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深粮B:2021年半年度报告(英文版) 下载公告
公告日期:2021-08-26

SHENZHEN CEREALS HOLDINGS CO., LTD.

SEMI-ANNUAL REPORT 2021

August 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.Person in charge of the Company Zhu Junming, Head of Accounting Lu Yuheand Head of Accounting Institution (Accounting Supervisors) Wen Jieyu herebyconfirm that the Financial Report of Semi-Annual Report 2021 is authentic,accurate and complete.In addition tot he following directors, other directors attended the BoardMeeting for the deliberation of the semi-annual report.

Name of the director not present in personTitle of the director not present in personReason for not attending the meeting in personEntrusted person
Zhu JunmingChairmanVacationLu Qiguang
Hu XianghaidirectorVacationLu Qiguang

Concerning the forward-looking statements with future planning involved in thesemi-annual report, they do not constitute a substantial commitment forinvestors, Securities Times, China Securities Journal, Hong Kong CommercialDaily and Juchao Website (www.cninfo.com.cn) are the media appointed by theCompany for information disclosure, all information of the Company disclosedin the above mentioned media should prevail. Investors are advised to exercisecaution of 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“Risks and Countermeasures”in the report of Section III-Management

Discussion and Analysis. This report has been prepared in Chinese and Englishversion respectively. In the event of difference in interpretation between the twoversions, Chinese report shall prevail.The Company plans not to distributed cash dividend, bonus and no capitalizingof common reserves either.

Contents

Section I Important Notice, Contents and Interpretation ...... 2

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

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

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

Section V Enviornmental and Social Responsibility ...... 31

Section VI Important Events…………………………………………………… ...... 33Section VII Changes in shares and particular about shareholders………………………….....41Section VIII Preferred Stock ...... 46

Section IX Corporate Bonds ...... 47

Section X Financial Report ...... 48

Documents Available for Reference

1. Text of financial statement with signature and seals of legal person, person in charge of accounting works andperson in charge of accounting institution;

2. 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;

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

Interpretation

ItemsRefers toContents
SZCH/Listed Company /the Company/Refers toShenzhen Cereals Holdings Co., Ltd.
SZCGRefers toShenzhen Cereals Group Co., Ltd
Hualian CompanyRefers toShenzhen Hualian Grain and Oil Trading Co., Ltd.
Shenliang DoximiRefers toShenliang Doximi Business Co., Ltd.
Flour CompanyRefers toShenzhen Flour Co., Ltd
Shenliang Quality InspectionRefers toShenliang Quality Inspection Co., Ltd.
Dongguan LogisticsRefers toDongguan Shenliang Logistics Co., Ltd.
Dongguan Food Industrial ParkRefers toDongguan International Food Industrial Park Development Co., Ltd.
Shenliang Cold ChainRefers toShenzhen Shenliang Cold Chain Logistics Co., Ltd.
Shenliang PropertyRefers toShenzhen Shenliang Property Development Co., Ltd.
Shenliang BigRefers toShenzhen Shenliang Big Kitchen Food Supply Chain Co., Ltd
Shenbao HuachengRefers toShenzhen Shenbao Huacheng Technology Co., Ltd.
Shenbao InvestmentRefers toShenzhen Shenshenbao Investment Co., Ltd.
Food Materials GroupRefers toShenzhen Food Materials Group Co., Ltd
Agricultural ProductsRefers toShenzhen Agricultural Products Group Co., Ltd
Shenzhen SASACRefers toShenzhen Municipal People’s Government State-owned Assets Supervision & Administration Commission
CSRCRefers toChina Securities Regulation Commission
SSERefers toShenzhen Stock Exchange
Article of AssociationRefers toArticle of Association of Shenzhen Cereals Holdings Co., Ltd.
RMB/10 thousand YuanRefers toCNY/ten thousand Yuan

Section II Company Profile and Main Financial IndexesI. Company profile

Short form for shareSZCH, Shenliang BStock code000019, 200019
Listing stock exchangeShenzhen 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 (if applicable)深粮控股
English name of the Company(if applicable)SHENZHEN CEREALS HOLDINGS CO.,LTD
Legal RepresentativeZhu Junming

II. Person/Way to contact

Secretary of the BoardRep. of security affairs
NameChen XiaohuaChen Kaiyue, Liu Muya
Contact add.13/F, Tower A, World Trade Plaza, No.9 Fuhong Rd., Futian District, Shenzhen13/F, Tower A, World Trade Plaza, No.9 Fuhong Rd., Futian District, Shenzhen
Tel.0755-837786900755-83778690
Fax.0755-837783110755-83778311
E-mailchenxh@slkg1949.comchenky@slkg1949.com、liumy@slkg1949.com

III. Others

1. Way of contact

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

□ Applicable √Not applicable

The registrations address, offices address and codes as well as website and email of the Company have no changes in the Period,found more in Annual Report 2020.

2. Information disclosure and preparation place

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

□ Applicable √ Not applicable

The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparationplace for semi-annual report have no change in reporting period, found more details in Annual Report 2020.

IV. Main accounting data and financial indexesWhether information disclosure and preparation place changed in reporting period or not

□Yes √No

Current PeriodSame period of last yearChanges over last year (+,-)
Operating revenue (RMB)5,262,189,180.534,740,428,222.1011.01%
Net profit attributable to shareholders of the listed Company (RMB)243,846,874.76210,738,686.1215.71%
Net profit attributable to shareholders of the listed Company after deducting non-recurring gains and losses (RMB)237,039,666.31196,760,081.8020.47%
Net cash flow arising from operating activities (RMB)-691,272,151.339,610,361.15-7,292.99%
Basic earnings per share (RMB/Share)0.21160.182815.75%
Diluted earnings per share (RMB/Share)0.21160.182815.75%
Weighted average ROE5.17%4.66%0.51%
End of current PeriodEnd of last yearChanges over end of last year (+,-)
Total assets (RMB)8,429,737,224.827,309,384,147.9315.33%
Net assets attributable to shareholder of listed Company (RMB)4,448,099,108.104,595,331,999.76-3.20%

V. Difference of the accounting data under accounting rules in and out of China

1. Difference of the net profit and net assets disclosed in financial report, under both IAS (InternationalAccounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)

√ Applicable □ Not applicable

In RMB

Net profit attributable to shareholders of listed CompanyNet assets attributable to shareholders of listed Company
Current periodLast periodPeriod-endPeriod-begin
Chinese GAAP243,846,874.76210,738,686.124,448,099,108.104,595,331,999.76
Items and amount adjusted by IAS
Adjustment for other payable fund of stock1,067,000.001,067,000.00
market regulation
IAS243,846,874.76210,738,686.124,449,166,108.104,596,398,999.76

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

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

√ Applicable □ Not applicable

In RMB

ItemAmountNote
Gains/losses from the disposal of non-current asset (including the write-off that accrued for impairment of assets)4,753.12
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)4,811,695.56
Profit and loss of assets delegation on others’ investment or management3,061,191.63
Gains and losses from change of fair values of held-for-transaction financial assets, derivative financial assets, held-for-transaction financial liability and derivative financial liability except for the effective hedge business related to normal business of the Company, and investment income from disposal of tradable financial assets, derivative financial assets, tradable financial liability, derivative financial liability and other debt investment.288,972.32
Other gains/losses items that conform to the definition of non-recurring gains/losses1,529,279.86
Less: impact on income tax2,005,561.30
Impact on minority shareholders’ equity (post-tax)883,122.74
Total6,807,208.45--

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 of

extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities tothe Public --- Extraordinary Profit/loss

Section III Management Discussion and Analysis

I. Main businesses of the Company in the reporting periodMain business of the Company includes the wholesale and retail business, food processing and manufacturingbusiness, leasing and commerce service business.The wholesale and retail business are mainly rice, wheat, rice in the husk, corn, sorghum, cooking oil and othervarieties of grain and oil as well as the sales of fine tea, beverage and condiment. During the reporting period, thecompany overcame many adverse factors such as shortage of grain source and fluctuation of grain price under theinfluence of the pandemic, took multiple measures to ensure supply and stable supply, and continued to expandthe market, strengthen the brand and optimize the products. Mainly supplied wheat, rice, corn, barley, sorghumand other raw grain to customers such as the industry's large traders, feed processing and flour processingenterprises and so on; mainly sold rice, flour, cooking oil, high-quality tea, beverages and other products todemand units and community residents.

Food processing and manufacturing business are mainly the processing the technology research in aspect of flour,rice, cooking oil, tea and natural plant extracts, beverage and condiments etc. The company's flour brands andproducts include “Jinchangman”, “Yingshanhong” and “Hongli” series bread flour; “Clivia” and “Canna” seriestailored flour for cakes and steamed bun; “Sunflower” wheat flour for noodles and cookie flour; “Tianlvxiang”wheat flour for bread, refined flour and dumpling flour etc.; Rice products include “Shenliang Doximi”,“Guzhixiang”, “Gufengxianman”, “Runxiangliangpin”, “Hexiang” and “Taitai Fukou” etc. Cooking oil productsinclude brands such as “Shenliang Fuxi”, “Shenliang Jinxi” and “Youtian” etc. Tea brands mainly include"Jufangyong" tea; "Yichong" fresh extract, "Jindiao" instant tea powder and other tea deep-processed products, aswell as "Shenbao" chrysanthemum tea, lemon tea, and "Cha Mi Xiang Qi" and other series of tea drinks.Condiments are mainly "Sanjing" oyster sauce and sauces. Several brands have formed product series, including"SZCH Yushuiqing" rice, noodles, oil, and coarse cereals series, "Jiaxi" rice & noodles series, "Jinchangman"noodles & oil series, Black-faced Spoonbill tea, rice, oil, drinking water, non-staple food and condiment series,etc., and the launch of Yueqiu tea wine continues to enrich the product structure. During the reporting period, thecompany insisted on innovation-oriented, continued to extend the industrial chain, actively carried out newproduct research and development, and launched the SZCH sports drink brand "Shenbao Sports Muscle".

The leasing and business service refers to providing the professional import & export trade, warehousing &storage, logistic & distribution, quality inspection & information technology services, property leasing andmanagement, business operation management services for all kinds of clients in the upstream and downstream ofthe industrial chain, by using the advantage of brand reputation, operation service capacity and facility technologythat accumulated in field of grain and oil market. Its Dongguan smart gain logistics complex is a comprehensivegrain 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 providescold chain of food storage and distribution services to the customers, and Shenliang Property is a professionalassets management platform enterprise.

II. Core Competitiveness AnalysisThe company enhances the endogenous power by deepening reform, strengthens the "extensive" development byinnovation cooperation, and continuously upgrades and transforms the governance pattern, development quality,and guarantee ability, and has embarked on a path of sustainable and high-quality development throughself-innovation, and become a highly competitive, innovative and influential "ten billion" backbone grainenterprise 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 pragmaticspirit. Combined with the actual development of the Company, formulated a set of effective mechanisms topromote the quality and efficiency of business development. The company vigorously promotes the innovation andtransformation of business models, and actively promotes the transition from “trade-oriented enterprises” to“service-oriented enterprises”, and from “operational management and control” to “strategic management andcontrol”. In business control, the company has built a "six-in-one" new control system with relative separation andmutual checks and balances among "business operation and funds management, inventory management, qualitymanagement, contract management, information system management". By strengthening the whole process risksupervision, budget management, plan management, contract management, customer management and brandmanagement, it effectively reduced business risks while fully participating in market competition, and realized thedeep integration of "ensuring grain security" and "promoting development". Through innovative talentdevelopment mechanism, the company has established an open talent team to meet the long-term development ofenterprises and reserve intelligence for the enterprise upgrading and development. The company has innovatedand implemented the EVA performance appraisal mechanism and established a result-oriented incentive andrestraint assessment mechanism which effectively built the performance culture and stimulated the viability withinthe enterprise. The company insists on cultivating and advocating the corporate culture with “people-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 forcustomers in different areas of the industry chain, establishes a multi-level product supply network coveringonline and offline, and realizes the transformation of product supply to "remoteness, intelligentization, andself-service". In terms of grain and oil trading services, the bulk commodity trading platform www.zglsjy.com.cn

created by its subsidiary Hualian Company efficiently integrates business flow, logistics, and information flow,improves circulation efficiency, and provides spot listings, one-way bidding, basis price, financing, logistics,quality inspection, information and other services for internal business units, suppliers and customers. In terms ofe-commerce, SZCH doximi actively promotes the development of new grain retail formats such as "Internet +Grain" and "Community Automatic Grain Sales Stations", it has a B2C grain and oil online direct sales platform"doximi.com", and has opened channels on e-commerce platforms such as Tmall and Jingdong Mall so as topromote the deep integration of online and offline e-commerce platforms. In terms of group meal supply, itssubsidiary SZCH Beige has established a one-stop distribution service platform serving large end customers,providing high-quality and safe smart group meal food services for group users such as enterprises, schools, andgovernment institutions. In terms of comprehensive tea drinking services, its subsidiary Shenbao Investment haslaunched 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 moderntechnological means, and actively introduces new-generation information technologies such as the Internet ofThings, cloud computing, big data, and mobile Internet into grain management, forming an information systemthat can cover the entire industrial chain of the grain industry, and promoting the "Internet + Grain" industrydevelopment. The company’s informatization construction capability is at the leading level in the grain reservesindustry, taking the lead in building the warehouse management of "standardization, mechanization,informatization, and harmlessness" in the industry, the self-developed "Grain Logistics Information System(SZCG GLS)" has built a framework for the construction of grain informatization work, innovated the grainmanagement model, led the development direction of the grain industry, and became a benchmark for the nationalgrain industry. The project was awarded the “National IoT Major Application Demonstration Project” by theNational Development and Reform Commission and the Ministry of Finance. The company has undertaken anumber of national-level research projects, the results of a number of informatization projects have won national,provincial and municipal awards, and more than 30 information systems have been developed and are operatingnormally.

(4) R&D capabilities

The company has strong research and development capabilities in the field of food and beverage, gathers leadingtechnological advantages and equipment systems, has Jiangxi provincial enterprise technology center, Shenzhenmunicipal research and development center (technology center) and Shenzhen plant deep processing technologyengineering laboratory. Its subsidiaries, Shenbao Huacheng and Wuyuan County Jufangyong Tea Co., Ltd., haveobtained national high-tech enterprise certification. Shenbao Huacheng has independently researched anddeveloped more than 50 patented technologies for tea powder, tea concentrated juice and plant extraction,published more than 30 scientific papers, and won a number of awards such as Science and Technology ProgressAward of the Ministry of Agriculture, Zhejiang Science and Technology Award, Science and Technology Award of

Chinese Academy of Agricultural Sciences, Jiangxi Science and Technology Progress Award, Science andTechnology Award of China National Light Industry Council, etc., presided over or participated in the preparationof national standards "GBT 21733-2008 Tea Drinks" and two industry standards, i.e. "Tea Concentrated Juice forFood Industry - Light Industry Standard QB-T 4068- 2010" and "Instant Tea Powder for Food Industry - LightIndustry Standard QB-T 4067-2010" .

(5) Quality control

The company implements grain and oil quality standards that are higher than national standards. The subordinateSZCG Quality Inspection has the leading grain and oil quality inspection technology and equipment in thedomestic grain industry, and is included in the national grain quality supervision and inspection system. It wasawarded the "Guangdong Shenzhen National Grain Quality Monitoring Station" by the State Administration ofGrain and obtained the assessment certificate of agricultural product quality and safety inspection agency (CATL)and the qualification certificate of inspection agency (CMA) etc, and total number of certified testing capabilityitems is 756. Shenliang Quality Inspection takes the lead in listing pesticide residues, heavy metal pollutants,fungal toxins and other hygiene indicators as well as food taste indicators in the daily inspection indicators. It hasthe ability to detect four types of indicators of generic quality, storage quality, food security & quality and otherfour types of indicators of testing capacity, the detection capability can meet the relevant quality detectionrequirements of grain and oil products, and can accurately analyze the nutritional composition and hygienicindicators of the grain and determine its storage and edible quality. It has initiated the "digital laboratory" in thegrain industry, real-time monitoring of the entire process of cuttings, testing, distribution, etc., relying oncollaborative platforms to save, retrieve, integrate, analyze and share grain and oil testing data to achieve 100%coverage of grain & oil product inspection, and 100% product quality qualification rate of the factory. SubsidiaryShenbao Huacheng has established a quality control system recognized by large international food and beveragecompanies, and has successfully passed the quality certification of global suppliers of Coca-Cola, Lipton, Kraft,Suntory, and Nestlé.

(6) Brand effect

The company was awarded the "Top 500 Service Enterprises in China", "China Top Ten Grain and Oil Groups","China Top 100 Grain and Oil Enterprises", "National Leading Enterprise Supporting Grain and OilIndustrialization", “National Quality Benchmark”, “Top 10 Food Digital Technology Applications” and otherhonors, 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 manywell-known brands and platforms such as "Shenzhen Flour", "SZCH Doxi", "SZCH Yushuiqing", "Beige Kitchen","www.zglsjy.com.cn", "Shenbao Teabank", "Wuyuan Jufangyong" and other well-known brands and platforms,and has gradually built up a complete industrial system with the elements of “rice” +”tea”. The ChangxiangdaoDaohuaxiang Rice, held by the Shenliang Doximi, was selected as the first batch of "China Good Cereals andOils" by the State Administration of Grain. The company keeps abreast with the international first-class standardsand builds high-quality urban food brands, its 35 products have obtained the "Zhen Pin" certification, and the

company's corporate recognition, market reputation, and social recognition have continued to increase.

III. Main business analysisSee the “I-Main businesses of the Company in the reporting period”Y-o-y changes of main financial data

In RMB

Current periodSame period of last yearY-o-y increase/decreaseReasons for changes
Operation revenue5,262,189,180.534,740,428,222.1011.01%
Operation cost4,650,397,070.674,219,403,828.8010.21%
Sales expenses106,711,776.77109,796,698.11-2.81%
Management expenses109,316,093.65101,838,460.537.34%
Financial expenses17,204,774.526,155,212.61179.52%Mainly due to the increase in borrowings and part of the engineering projects have been transferred to fixed assets in the period, resulting in an increase in expensed interest.
Income tax expense13,407,354.562,465,268.63443.85%Lower income tax expense base due to the rent reduction in the prior period for the epidemic
R&D investment10,926,018.157,368,772.6848.27%Investment for R&D increased in the Period
Net cash flow arising from operation activities-691,272,151.339,610,361.15-7,292.99%Increase in food and oil purchases in the period
Net cash flow arising from investment activities-267,111,859.35-70,334,070.80-279.78%Purchase equity of the minority shareholders of Dongguan Logistics in the period
Net cash flow arising from financing activities836,677,347.4019,387,290.614,215.60%The working capital loans increased in the period
Net increase of cash and cash equivalent-121,720,142.83-41,317,771.47-194.60%Mainly due to the y-o-y change impact of net cash flow arising from operation activities

Major changes on profit composition or profit resources in reporting period

□ Applicable √ Not applicable

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

Constitute of operation income

In RMB

Current periodSame period last yearIncrease/decrease y-o-y (+,-)
AmountRatio in operation incomeAmountRatio in operation income
Total operation revenue5,262,189,180.53100%4,740,428,222.10100%11.01%
According to industries
Wholesale and retail4,400,038,220.5683.62%4,082,124,009.2486.11%7.79%
Leasing and commercial services476,311,036.389.05%417,157,357.858.80%14.18%
Manufacturing385,839,923.597.33%241,146,855.015.09%60.00%
According to products
Grain and oil trading and processing4,675,804,942.8488.86%4,229,578,137.4589.22%10.55%
Grain and oil storage, logistics and services422,355,721.288.03%377,567,473.647.96%11.86%
Food & beverage and tea processing111,339,446.112.11%93,692,726.801.98%18.83%
Leasing and others52,689,070.301.00%39,589,884.210.84%33.09%
According to region
Domestic market5,245,073,883.1899.67%4,721,086,070.5499.59%11.10%
Exportation17,115,297.350.33%19,342,151.560.41%-11.51%

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

√ Applicable □Not applicable

In RMB

Operation revenueOperation costGross profit ratioIncrease/decrease of operation revenue y-o-yIncrease/decrease of operation cost y-o-yIncrease/decrease of gross profit ratio y-o-y
According to industries
Wholesale and retail4,400,038,220.564,133,013,050.296.07%7.79%6.30%1.31%
According to products
Grain and oil trading and processing4,675,804,942.844,412,107,449.495.64%10.55%9.60%0.82%
According to region
Domestic market5,245,073,883.184,637,681,823.3211.58%11.10%10.33%0.62%

Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based onlatest one year’s scope of period-end

□ Applicable √Not applicable

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

□ Applicable √Not applicable

IV. Analysis of the non-main business

√ Applicable □ Not applicable

In RMB

AmountRatio in total profitCausesWhether be sustainable
Investment income3,501,371.301.35%Unsustainable
Gains/losses of fair value variation288,972.320.11%Unsustainable
Asset impairment-111,448,173.12-43.00%Accrual of the reserve for falling prices of goods in stock. When selling the goods with falling prices accrual, the actual carrying forward of the reserves will be used to offset the current costUnsustainable
Non-operating income1,627,702.560.63%Unsustainable
Non-operating expense403,164.300.16%Unsustainable

V. Assets and liability analysis

1. Major changes of assets composition

In RMB

End of current periodEnd of last yearRatioNotes of major changes
AmountRatio in total assetsAmountRatio in total assetschanges
Monetary fund68,774,083.110.82%190,494,225.942.61%-1.79%The operating expenses increased in the Period
Account receivable712,441,439.018.45%198,311,102.172.71%5.74%The income from grain & oil reserve services have not yet been returned in the period
Inventory4,130,250,968.8649.00%3,418,328,974.2746.77%2.23%Increase in food and oil purchases in the period
Investment real estate244,847,354.372.90%253,037,899.573.46%-0.56%
Long-term equity investment73,655,327.510.87%73,215,147.841.00%-0.13%
Fix assets1,339,305,491.0715.89%1,122,692,490.5515.36%0.53%Part of the engineering projects of Dongguan Logistics have been transferred to fixed assets in the period
Construction in process868,979,194.2410.31%1,045,643,295.5714.31%-4.00%Part of the engineering projects of Dongguan Logistics have been transferred to fixed assets in the period
Right-of-use assets89,811,269.931.07%1.07%The lease right-of-use assets recognized under the new lease standards in the period
Short-term loans1,212,686,540.7314.39%110,318,727.121.51%12.88%The working capital loans increased in the period
Contract liability149,884,356.621.78%108,975,866.821.49%0.29%
Long-term loans805,594,327.989.56%841,864,531.7511.52%-1.96%
Lease liability91,245,488.141.08%1.08%The lease liability recognized under the new lease standards in the period

2. Main overseas assets

□Applicable √Not applicable

3. Assets and liability measured by fair value

√ Applicable □ Not applicable

In RMB

ItemsOpening amountChanges of fair value gains/losses in this periodAccumulative changes of fair value reckoned into equityDevaluation of withdrawing in the periodAmount of purchase in the periodAmount of sale in the periodOther changesEnding amount
Financial assets
1. Trading financial assets (excluding derivative financial assets)160,621,806.51288,972.32160,000,000.00910,778.83
Other non-current financial assets57,500.0057,500.00
Aforementioned total160,679,306.51288,972.32160,000,000.00968,278.83
Financial liabilities0.000.00

Content of other changesN/AWhether there have major changes on measurement attributes for main assets of the Company in report period or not

□ Yes √No

4. The assets rights restricted till end of the period

ItemEnding book valueReasons for restriction
Fixed assets671,932,275.20According to the long-term loan mortgage contract signed by the Company, Shenzhen Branch of Agricultural Development Bank and Huizhou Zhongkai Sub-branch of HSBC, the Company 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 ShenzhenBranch of Agricultural Development Bank and Huizhou Zhongkai Sub-branch of HSBC insequence as loan collateral.Intangibleassets

Intangible assets68,667,888.52According to the loan contract Yue DG2017 NGDZ No. 006 signed by International Food Company, a subsidiary of the Company, and Bank of Communications Co., Ltd., Dongguan Branch, International Food Company has mortgaged its two pieces of land "DFGY (2009) DT No. 190" and "Yue(2020) Dongguan Real Estate Right No. 0321771" to the Bank of Communications Co., Ltd., Dongguan Branch as loan collateral.
Intangible assets35,398,230.05According to the long-term loan mortgage contract signed by the Company and Dongguan Branch of CMB, Dongguan Logistics Company has mortgaged the real estate 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 as loan collateral.
Total775,998,393.77

VI. Investment analysis

1. Overall situation

√ Applicable □ Not applicable

Investment in reporting period (RMB)Investment in the same period of last year (RMB)Changes (+,-)
423,203,922.73107,920,927.79292.14%

2.The major equity investment obtained in the reporting period

√ Applicable □ Not applicable

In RMB

Investee companyMain businessInvestment methodAmount investedShareholding ratioCapital sourcePartnersInvestment termProduct typeProgress as of the balance sheet dateExpected earningsGain/loss on investment in current periodWhether it is involved in a lawsuit(Y/N)Date of disclosure (if any)Disclosure index (if any)
Dongguan Shenliang Logistics Co., Ltd.Grain storage logisticsAcquisition321,680,000.00100.00%Own funds---Completed the business change registration0.000.00N2 June 2021“Acquisition of the 49% equity of Dongguan Shenliang Logistics Co., Ltd.” (Notice No.:2021-17) released on Juchao Website (www.cninfo.com.cn) dated 2 June 2021
Total----321,680,000.00------------0.000.00------

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

√ Applicable □Not applicable

In RMB

ItemInvestment methodWhether it is the fixed assets investment (Y/N)Industry with the investment involvedAmount input in the periodAccumulated actual input as of the end of reporting periodCapital sourcesProgressExpected earningsIncome accumulated at end of the reporting periodReasons for failure to achieve planned progress and expected benefitsDate of disclosure (if any)Disclosure index (if any)
Dongguan ShenliangSelf-buildYStorage and13,582,785.9419,517,999.Owned100.00%-
Logistics Co., Ltd.- Grain storage and wharf complementary engineeringwharf928Funds and Bank Loans
Dongguan Shenliang Logistics Co., Ltd.- Grain storage and wharf complementary engineering (Phase II)Self-buildYStorage and wharf172,810,142.85Owned Funds and Bank Loans100.00%-
Dongguan International Food Industrial Park Development Co., Ltd.-Warehouse logistic distribution centerSelf-buildYWarehouse logistic7,665,976.79957,511,995.31Owned Funds and Bank Loans88.06%52,799,890.9623,926,145.22Construction program adjustment
Dongguan Shenliang Logistics Co., Ltd.--Grain logistics and wharf complementary engineeringSelf-buildYWarehouse logistic1,739,280.5193,052,038.79Owned Funds and Bank Loans17.17%Construction program adjustment
Dongguan Shenliang LogisticsSelf-buildYWarehouse logisti5,345,529.305,345,529.30Owned Funds42.76%New constructio
Co., Ltd.-A1cottage warehousecand Bank Loansn
Land use rightSelf-buildNConstruction245,018,960.82Owned Funds-
Total------28,333,572.591,893,256,666.35----52,799,890.9623,926,145.22------

4. Financial assets investment

(1) Securities investment

√ Applicable□Not applicable

Variety of securitiesCode of securitiesShort form of securitiesInitial investment costAccounting measurement modelBook value at the beginning of the periodChanges in fair value of the current profit and lossCumulative fair value changes in equityCurrent purchase amountCurrent sales amountProfit and loss in the Reporting PeriodBook value at the end of the periodAccounting subjectCapital Source
Domestic and overseas stock000017Zhonghua-A0.00Fair value measurements621,806.51288,972.32288,972.32910,778.83Tradable financial assetsDebt rescheduled shares
Total0.00--621,806.51288,972.320.000.000.00288,972.32910,778.83----
Disclosure date of securities investment approval of the BoardNot 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 PeriodVII. Sales of major assets and equity

1. Sales of major assets

□ Applicable √Not applicable

The Company had no sales of major assets in the reporting period.

2. Sales of major equity

□ Applicable √Not applicable

VIII. Analysis of main holding Company and stock-jointly companies

√ Applicable□Not applicable

Particular about main subsidiaries and stock-jointly companies net profit over 10%

In RMB

Company nameTypeMain businessRegister capitalTotal assetsNet assetsOperating revenueOperating profitNet profit
Shenzhen Cereals Group Co., LtdSubsidiaryGrain & oil trading processing,Grain and oil reserve service1,530,000,000.007,905,807,107.804,005,341,666.695,075,167,561.24227,542,574.06215,483,330.97
Shenzhen Flour Co., LtdSubsidiaryGrain & oil trading processing30,000,000.001,008,586,902.83102,377,425.791,718,389,940.1938,937,975.8838,938,653.06
Shenzhen Hualian Grain and Oil Trading Co., Ltd.SubsidiaryGrain & oil trading100,000,000.002,035,583,513.97309,640,159.401,731,978,543.6251,276,718.5951,134,582.88

Particular about subsidiaries obtained or disposed in report period

√ Applicable □Not applicable

Company nameThe way of getting and treating subsidiary in the reportingInfluence on overall product and performance
Dongguan Shenliang Hualian Grain & oil trading Co., Ltd.EstablishmentNo operating business has occurred yet

Explanation on main holding/stock-jointly enterprise:

Shenzhen Cereals Group Co., Ltd: general business items: grain and oil purchase and sales, grain and oil storageand supply of military grain; grain and oil and products management and processing (operated by branches);operation and processing of feed (operated by outsourcing); investment in grain and oil, feed logistics projects;establishing grain and oil and feed trading market (including e-commerce market) (market license is alsoavailable); storage (operated by branches); development, operation and management of free property; providingmanagement services for hotels; investing and setting up industries (specific projects are separately declared);domestic trade; engaging in import and export business; E-commerce and information construction; and graincirculation service. Licensed business items: the following projects shall be operated only with the relevantexamination and approval documents if they are involved in obtaining approval: information services (internetinformation service only); general freight, professional transport (refrigerated preservation). Register capital was1,530,000,000.00 Yuan. Ended as this period, total assets amounted as 7,905,807,107.80 Yuan, and net assetsamounting to 4,005,341,666.69 Yuan, shareholders’ equity attributable to parent Company is 3,816,559,564.40Yuan; in the reporting period, achieved operation revenue, net profit and net profit attributable to shareholder ofparent Company as 5,075,167,561.24 Yuan, 215,483,330.97Yuan and 213,542,280.46 Yuan respectively.

Shenzhen Flour Co., Ltd: business scope: hardware and electrical equipment, chemical products (excludinghazardous chemicals and restricted items), auto parts, purchase and sales of construction materials; self-operatedimport and export business (carry out according to the provisions of the registration certificate SMGDZZ No. 76);domestic trade (excluding franchise, exclusive control, monopoly commodities); wheat wholesale and retail; flourprocessing and production. Register capital was 30,000,000.00 Yuan. Ended as this period, total assets amountedas 1,008,586,902.83 Yuan, and net assets amounting to 102,377,425.79 Yuan, shareholders’ equity attributable toparent Company is 102,377,425.79 Yuan; in the reporting period, achieved operation revenue, net profit and netprofit attributable to parent Company as 1,718,389,940.19 Yuan, 38,938,653.06 Yuan and 38,938,653.06 Yuanrespectively.

Shenzhen Hualian Grain and Oil Trading Co., Ltd.: Business scope: general business items: domestic trade(except for projects that laws, administrative regulations, and decisions of the State Council require approvalbefore registration); engaging in import and export business (except for projects prohibited by laws,administrative regulations, and decision of the State Council, restricted projects can be operated only afterobtaining permission); online feed sales; information consultation, self-owned housing leasing (excluding talentagency services and other restricted items); international freight forwarding, domestic freight forwarding (canonly be operated after being approved by the transport department if laws, administrative regulations, StateCouncil decision require the approval of transport department); Licensed business items: purchase and sale ofgrain and oil, online sales of grain and oil; information service business (internet information service businessonly). Register capital was 100,000,000.00 Yuan. Ended as this period, total assets amounted as 2,035,583,513.97Yuan, and net assets amounting to 309,640,159.40 Yuan, shareholders’ equity attributable to parent Company is

286,114,190.37 Yuan;in the reporting period, achieved operation revenue, net profit and net profit attributable toparent Company as 1,731,978,543.62 Yuan, 51,134,582.88 Yuan and 51,816,675.78 Yuan respectively.

IX. Structured vehicle controlled by the Company

□ Applicable√Not applicable

X. Risks and countermeasures

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

Since year of 2020, the global spread of the COVID-19 epidemic has affected macroeconomic operations tovarying degrees. Judging from the current situation, although the domestic epidemic has occurred sporadically, theoverall situation has been brought under control. The overseas epidemic still has the risk of instability, making theeconomy unpredictable and uncertain, which may affect the company's production, trade, and industrial supplychain. The epidemic has caused increases in various costs such as raw material costs, labor costs, and logisticscosts. In response to this risk, the company will unswervingly do a good job of epidemic prevention and strictlyimplement various epidemic prevention measures to ensure the orderly production and operation of the company.

2. Food safety risk

On the one hand, our country is paying more and more attention to food safety and strengthening the supervision.On the other hand, consumers’ awareness of food safety and rights protection is also increasing. Food safety hasbecome the industry’s number one risk, especially after the COVID-19 epidemic, consumers' attention to foodsafety and cleanliness is rapidly increasing in the short term, and put forward higher requirements for foodhygiene and safety.

The company has always regarded food quality and safety as the most important core work. The first is to strictlyimplement laws and regulations related to national food safety, and assume the social responsibility of supplyinghigh-quality and safe food to the market. The second is to strengthen the quality of raw materials and strengthenquality control from the source. The third is to strengthen production management, standardize productionoperations, and implement quality responsibilities. The fourth is to strengthen staff's operating skills and safetyawareness training to prevent product quality accidents caused by non-standard operations or weak food safetyawareness. The fifth is to continuously improve product quality assurance level through technologicaltransformation and technological progress. The sixth is to strengthen product transportation and storagemanagement to prevent secondary pollution of products.

3. Raw material fluctuation risk

On the one hand, with the implementation of the quantitative easing policy of the US dollar and major currenciesin the world, the speculative nature and hedging preferences of capital will cause social funds to flow into the bulkcommodity sector, which will lead to violent fluctuations in domestic and foreign bulk commodity prices. On theother hand, with the outbreak of the COVID-19 epidemic, most countries' controls on the export of agricultural

products will have a major impact on prices; at the same time, the epidemic will also affect the normal operationof the supply chain in various regions and have a direct impact on the supply of bulk agricultural and sidelineproducts.

The company will actively respond to the risk of adverse effects of price fluctuations on the company's operationsthrough measures such as strengthening market forecasts, establishing strategic cooperation, optimizing supplymanagement, and using refined management to improve utilization.

4. Risk of intensified market competition

As a representative enterprise of regional grain, oil and food business, compared with central enterprises and largemultinational grain, oil and food enterprises, the company still has a certain gap in scale and brand awareness. Inthe future, the competition in the grain, oil and food industry will become more intense, if the company cannoteffectively promote its own brand and broaden its marketing channels, it may face greater risks when marketcompetition intensifies.

In response to possible market and business risks, on the one hand, the company makes overall plans for the year'sprocurement, carefully optimizes procurement channels, and ensures sufficient grain supply and orderly supply.On the other hand, the company continues to strengthen communication with upstream and downstreamcustomers in the industry chain, vigorously expands sales channels, focuses on customer needs, deepens brand andservice, 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 theM&A project can form synergy with the original business and whether the integration of corporate culture andmanagement methods is in place during the critical period of integration of mergers and acquisitions are the key tothe realization of the company’s strategic goals. Inadequate management and control can easily lead to merger andacquisition risks.

The company will take the following measures to prevent risks, the first is to pay attention to the operation of themerged company and the integrating degree with the company's development strategy, and correct deviations in atimely manner; the second is to pay attention to the synergy between the merged company and the company'sexisting industry, and coordinate the deployment of resources in a timely manner; the third is to gradually realizethe integration of systems and cultures; the fourth is to increase performance improvement and innovationincentives and assessments for mergers and acquisitions, and continuously adjust incentive policies that arecompatible with operations.

Section IV Corporate Governance

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

1. AGM in the period

SessionsTypeInvestor participation (%)Opening dateDisclosure dateResolutions
2020 Annual general meetingAGM72.05%2021-05-182021-05-19Resolution Notice of AGM 2020 of Shenzhen Cereals Holdings Co., Ltd. (Notice No.: 2021-14) released on Juchao website (www.cninfo.com.cn) dated 19 May 2021

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

□ Applicable √ Not applicable

II. Changes of directors, supervisors and senior executives

√ Applicable □ Not applicable

NamePositionTypeDateCauses
Jin ZhenyuanCFODismiss2021-07-16Job transfer
Jin ZhenyuanDirectorOutgoing2021-07-16Job transfer
Lu YuheCFOAppointment2021-07-16Appointment of the Board of Directors
Lu YuheDirectorBe elected2021-08-02Election of the Shareholder Meeting

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

□ Applicable √ Not applicable

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

IV. Implementation of the Company’s stock incentive plan, employee stock ownership plan orother 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.

Section V Environmental and Social ResponsibilityI. Major environmental protection

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

□Yes √No

Administrative penalties imposed for environmental issues during the reporting period

Company/SubsidiaryReasons for penaltyViolation situationPenalty resultsImpact on the production & operation of the listed companyCorrective measures
Not applicableNot applicableNot applicableNot applicableNot applicableNot applicable

Other environmental information disclosed with reference to the key emission unitsThe 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.

Reasons for not disclosing other environmental informationThe Company and its subsidiaries do not belong to the key emission units announced by the environmental protection department,and there is no other environmental information that needs to be disclosed.

II. Social responsibility2021 is the first year of rural revitalization, and a key year for promoting a smooth transition of poverty alleviationpolicies and measures and work systems to rural revitalization. In accordance with the document spirit of theImplementation Opinions on Three-year Targeted Poverty Alleviation in the New Era (Yuefa [2016] No. 13)issued by Guangdong Provincial Party Committee and Guangdong Provincial Government, the working team ofGuilin Village, Yidu Town, Longchuan County, Heyuan City (hereinafter referred to as the "working team in thevillage") dispatched by SZCH has completed the targeted poverty alleviation project for Guilin Village andachieved expected results by the end of 2020 through a series of powerful measures, contributing SZCH strengthfor winning the battle against poverty as scheduled. In the first half of 2021, in order to consolidate and expandthe achievements of poverty alleviation, the working team in the village maintained unabated efforts and workedhard, and did a good job in the finishing touches in a pragmatic and efficient manner so as to make the foundationof poverty alleviation more stable and the results more sustainable, and make solid progress in the effectiveconnection between targeted poverty alleviation and rural revitalization.

To effectively carry out the rural revitalization work, according to the relevant work deployment of the provincialparty committee and municipal party committee, SZCH and Government Offices Administration of Shenzhen,Meteorological Bureau of Shenzhen Municipality and China Life Insurance Company Ltd., Heyuan CentreBranch assigned crew, and formed a support working in the town (hereinafter referred to as the "working team inthe town") to Tuocheng Town, Longchuan County, Heyuan City to carry out the support work of ruralrevitalization.SZCH has been working hard to provide assistance to Tibet. The second batch of high-quality cadres have beenselected and sent to Chayu Farm in Nyingchi, Tibet. We will take good care of cadres assisting Tibet, and ensuretheir services and support, so that they can make more contributions to Tibet. The company donated 200,000 yuanto Chayu Farm to improve the living conditions of farm workers.

Section VI Important EventsI. Commitments that the actual controller, shareholders, related party, buyer and the Company havefulfilled during the reporting period and the overdue commitments as of the end of the reporting period

□ Applicable √Not applicable

There is no commitments that the actual controller, shareholders, related party, buyer and the Company have fulfilled during thereporting period and the overdue commitments as of the end of the reporting period

II. Non-operational fund occupation from controlling shareholders and its related party

□ Applicable √Not applicable

No non-operational fund occupation from controlling shareholders and its related party in period.

III. External guarantee against the regulation

□ Applicable √Not applicable

No external guarantee against the regulation occurred in the periodIV. Appointment and non-reappointment (dismissal) of CPAWhether the financial report has been audited or not

□Yes √No

The financial report has not been auditedV. Explanation from Board of Directors and Supervisory Committee for “Qualified Opinion”that issued by CPA

□ Applicable √ Not applicable

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

□ Applicable √ Not applicable

VII. Bankruptcy reorganization

□ Applicable √ Not applicable

No bankruptcy reorganization for the Company in end of this periodVIII. LawsuitsSignificant lawsuits and arbitration

□ Applicable √ Not applicable

No significant lawsuits and arbitration occurred in the reporting periodOther lawsuits

√ Applicable □ Not applicable

Lawsuits (arbitration)Amount involved (in 10 thousand Yuan)Resulted an accrual liability (Y/N)ProgressTrial result and influenceExecution of judgmentDisclosure dateDisclosure index
As of 30 June 2021, 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 housing lease contract dispute etc.13,918.9Yes, 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 regulationsAfter comprehensive analysis, the outcome of the cases involved in the lawsuits will not have a significant impact on the CompanyIn promoting activelyNot applicableNot applicable

IX. Penalty and rectification

□ Applicable √Not applicable

No penalty and rectification for the Company in reporting period.

X. Integrity of the Company and its controlling shareholders and actual controllers

□ Applicable √Not applicable

XI. Major related transaction

1. Related transaction with routine operation concerned

□ Applicable √ Not applicable

No related transaction occurred in the period with routine operation concerned

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

□ Applicable √ Not applicable

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

3. Related transaction of foreign investment

□ Applicable √Not 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. Transactions with related finance companies and finance companies controlled by the Company

□ Applicable √ Not applicable

No deposits, loans, credit or other financial operations occurred between the Company and related finance companies, the financecompanies controlled by the Company and related parties in the period.

6. Other major related transaction

□ Applicable √Not applicable

No other major related transaction in the Period.

XII. Significant contract and implementations

1. Trusteeship, contract and leasing

(1) Trusteeship

□ Applicable √Not applicable

No trusteeship for the Company in reporting period

(2) Contract

□ Applicable √Not applicable

No contract for the Company in reporting period

(3) Leasing

□ Applicable √Not applicable

No leasing in the Period

2. Major Guarantee

√ Applicable □Not applicable

In 10 thousand Yuan

External Guarantee (not including guarantees to subsidiaries)
Name of the Company guaranteedRelated Announcement disclosure dateGuarantee limitActual date of happeningActual guarantee limitGuarantee typeCollateral (if any)Counter guarantee (if any)Guarantee termComplete implementation or notGuarantee for related party (Y/N)
Guarantee for the subsidiaries
Name of the Company guaranteedRelated Announcement disclosure dateGuarantee limitActual date of happeningActual guarantee limitGuarantee typeCollateral (if any)Counter guarantee (if any)Guarantee termComplete implementation or notGuarantee for related party (Y/N)
Guarantee of the subsidiaries for the subsidiaries
Name of the Company guaranteedRelated Announcement disclosure dateGuarantee limitActual date of happeningActual guarantee limitGuarantee typeCollateral (if any)Counter guaranteeGuarantee termComplete implementation or notGuarantee for related party (Y/N)
(if any)
Dongguan Shenliang Logistics Co., Ltd.27,3002015-07-1314,502Joint and several liability guaranteeN/AN8-yearNN
Dongguan Shenliang Logistics Co., Ltd.10,2002016-12-212,918Joint and several liability guaranteeN/AN5-yearNN
Dongguan International Food Industrial Park Development Co., Ltd.39,1682018-07-2731,216Joint and several liability guaranteeN/AN14-yearNN
Dongguan Shenliang Logistics Co., Ltd.21,9302020-10-201,935Joint and several liability guaranteeN/AN14-yearNN
Dongguan Shenliang Oil & Food Trade Co., Ltd.11,8832019-04-194,584Joint and several liability guaranteeN/AN8-yearNN
Total amount of approving guarantee for subsidiaries in report period (C1)82,300Total amount of actual occurred guarantee for subsidiaries in report period (C2)659
Total amount of approved guarantee for subsidiaries at the end of reporting period (C3)192,781Total balance of actual guarantee for subsidiaries at the end of reporting period (C4)55,155
Total amount of guarantee of the Company (total of three above mentioned guarantee)
Total amount of approving guarantee in report period (A1+B1+C1)82,300Total amount of actual occurred guarantee in report period (A2+B2+C3)659
Total amount of approved guarantee at the end of report period (A3+B3+C2)192,781Total balance of actual guarantee at the end of report period (A4+B4+C4)55,155
The proportion of the total amount of actually guarantee in the net assets of the Company (that is A4+ B4+C4)12.40%
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)50,571
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)50,571
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 wayN/A

3.Trust financing

√ Applicable □ Not applicable

In 10 thousand Yuan

TypeFund sourcesAmount occurredUndue balanceOverdue amountImpairment amount accrual for overdue financial management
Bank financial productsOwned Funds29,0002,00000
Total29,0002,00000

The high-risk trust investment with single major amount or has minor security, poor fluidity and non-guaranteed

□ Applicable √Not applicable

Unrecoverable principal or impairment possibility from entrust investment

□ Applicable √ Not applicable

4. Material contracts for daily operations

□ Applicable √Not applicable

5. Other material contracts

□ Applicable √ Not applicable

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

√ Applicable □ Not applicable

1. Changes in directors, supervisor and senior executives

On July 16, 2021, the company received a written resignation from Ms. Jin Zhenyuan, a director and the ChiefFinancial Officer of the company. Due to job transfer, Ms. Jin Zhenyuan applied to resign from her position asdirector and chief financial officer of the company. On the same day, the company held the 16

th

meeting of thetenth board of directors, deliberated and approved the Proposal on the Appointment of the Company's ChiefFinancial Officer and the Proposal on the Addition of the Company's Directors, and agreed to appoint Ms. LuYuhe as the company's chief financial officer for a term from the date of the approval of the board of directors tothe expiration of the tenth board of directors; agreed to add Ms. Lu Yuhe as a director of the tenth board ofdirectors of the company and submit it to the shareholders' meeting for approval. For details, see theAnnouncement of Resolutions of the 16th Meeting of the Tenth Board of Directors of the Company and theAnnouncement of Resignation of Directors and Chief Financial Officer of the Company and Appointment ofChief Financial Officer of the Company and the Addition of Directors of the Company published atwww.cninfo.com.cn on July 17, 2021.The company held the first extraordinary shareholders' meeting of 2021 on August 2, 2021, which deliberated andapproved the Proposal on the Addition of Directors of the Company and agreed to add Ms. Lu Yuhe as a directorof the tenth board of directors of the company. The term of office shall be from the date of approval of theresolution at the shareholders' meeting of the company to the date of expiration of the tenth board of directors ofthe company. For details, see the Announcement of the Resolutions of the Company's First Extraordinary GeneralMeeting of Shareholders in 2021 published at www.cninfo.com.cn on August 3, 2021.

XIV. Important events from subsidiaries

√ Applicable □ Not applicable

1. The company held the 15th meeting of the tenth board of directors on June 1, 2021, which deliberated andapproved the Proposal on the Company's Acquisition of 49% Equity of Dongguan Shenliang Logistics Co., Ltd.,and agreed that the company acquires the 49% equity of Dongguan Shenliang Logistics Co., Ltd., held byDongguan Fruits and Vegetables and Non-staple Food Trading Market Co., Ltd. in cash, the purchase price was

321.68 million yuan. For details, see the "Announcement of Resolutions of the 15

th

Meeting of the Tenth Board of

Directors of the Company" and the "Announcement of the Company on the Acquisition of 49% Equity ofDongguan Shenliang Logistics Co., Ltd." published at www.cninfo.com.cn on June 2, 2021.

2. The company held the 16

thmeeting of the tenth board of directors on July 16, 2021 and the first extraordinaryshareholders’ meeting on August 2, 2021, which deliberated and approved the "Proposal on the Consolidation andMerger of Shenzhen Shenbao Technology Center Co., Ltd., agreed to the company’s consolidation and merger ofthe wholly-owned subsidiary of Shenzhen Shenbao Technology Center Co., Ltd. For details, please see theAnnouncement of Resolutions of the 16

th

Meeting of the Tenth Board of Directors of the Company and theAnnouncement of the Company’s Consolidation and Merger of Shenzhen Shenbao Technology Center Co., Ltd.published at www.cninfo.com.cn on July 17, 2021, and the Announcement of Resolutions of the Company’s FirstExtraordinary Shareholders’ Meeting in 2021 published at www.cninfo.com.cn on August 3, 2021.

3. On July 22, 2021, the company acquired 51% of the equity of Wuhan Jiacheng biotechnology Co.,Ltd in cashwith the purchase price of 21,675,000 yuan. After the completion of the acquisition, the Company held a total of51% of the equity of Wuhan Jiasheng biotechnology Co., Ltd.

Section VII. Changes in Shares and Particulars about Shareholders

I. Changes in Share Capital

1. Changes in Share Capital

In Share

Before the ChangeIncrease/Decrease in the Change (+, -)After the Change
AmountProportionNew shares issuedBonus sharesPublic reserve transfer into share capitalOthersSubtotalAmountProportion
I. Restricted shares684,601,14259.40%00000684,601,14259.40%
1. State-owned shares00.00%0000000.00%
2. State-owned legal person’s shares684,569,56759.40%00000684,569,56759.40%
3. Other domestic shares31,5750.00%0000031,5750.00%
Including: Domestic legal person’s shares00.00%0000000.00%
Domestic natural person’s shares31,5750.00%0000031,5750.00%
4. Foreign shares00.00%0000000.00%
Including: Foreign legal person’s shares00.00%0000000.00%
Foreign natural person’s shares00.00%0000000.00%
II. Unrestricted shares467,934,11240.60%00000467,934,11240.60%
1. RMB ordinary shares416,184,83236.11%00000416,184,83236.11%
2. Domestically listed foreign shares51,749,2804.49%0000051,749,2804.49%
3. Overseas listed foreign shares00.00%0000000.00%
4. Others00.00%0000000.00%
III. Total shares1,152,535,254100.00%000001,152,535,254100.00%

Reasons for share changed

□ Applicable √ Not applicable

Approval of share changed

□ Applicable √ Not applicable

Ownership transfer of share changed

□ Applicable √ Not applicable

Progress of shares buy-back

□ Applicable √ Not applicable

Implementation progress of reducing holdings of shares buy-back by centralized bidding

□ Applicable √ Not applicable

Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to 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 lock-up stocks

□ Applicable √ Not applicable

II. Securities issuance and listing

□ Applicable √ Not applicable

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

In Share

Total common stock shareholders in reporting period-end55,886Total preference shareholders with voting rights recovered at end of reporting period (if applicable) (see note 8)0
Particulars about common shares held above 5% by shareholders or top ten common shareholders
Full name of ShareholdersNature of shareholderProportion of shares heldAmount of common shares held at the end of reporting periodChanges in report periodAmount of restricted common shares heldAmount of common shares held without restrictionInformation of shares pledged, tagged or frozen
State of shareAmount
Shenzhen Food MaterialsState-owned63.79%735,237,2530669,184,73566,052,518
Group Co., Ltdlegal person
Shenzhen Agricultural Products Group Co., LtdState-owned legal person8.23%94,832,294015,384,83279,447,462
Dongguan Fruit Vegetable Non-staple Food Trading Market Co., Ltd.Domestic non-state legal person0.54%6,198,2366,198,23606,198,236
Lin JunboDomestic nature person0.31%3,600,00033,30003,600,000
Sun HuimingDomestic nature person0.30%3,436,462003,436,462
Chen JiuyangDomestic nature person0.27%3,086,700342,00003,086,700
Xu WenxingDomestic nature person0.18%2,056,9256,54502,056,925
Hu XiangzhuDomestic nature person0.12%1,380,000-183,00001,380,000
Xu ZhifengDomestic nature person0.10%1,166,0001,166,00001,166,000
Wang LianyiDomestic nature person0.10%1,152,2001,152,20001,152,200
Strategy investor or general legal person becoming the top 10 common shareholders by placing new shares (if applicable) (see note 3)N/A
Explanation on associated relationship among the aforesaid shareholdersShenzhen 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
Special note on the repurchase account among the top 10 shareholders (if applicable) (see note 11)N/A
Particular about top ten shareholders with un-lock up common stocks held
Shareholders’ nameAmount of common shares held without restriction at Period-endType of shares
TypeAmount
Shenzhen Agricultural Products Group Co., Ltd79,447,462RMB common shares79,447,462
Shenzhen Food Materials Group Co., Ltd66,052,518RMB common shares66,052,518
Dongguan Fruit Vegetable Non-staple Food Trading Market Co., Ltd.6,198,236RMB common shares6,198,236
Lin Junbo3,600,000RMB common shares3,600,000
Sun Huiming3,436,462Domestically listed foreign shares3,436,462
Chen Jiuyang3,086,700RMB common shares3,086,700
Xu Wenxing2,056,925RMB common shares2,056,925
Hu Xiangzhu1,380,000RMB common shares1,380,000
Xu Zhifeng1,166,000RMB common shares1,166,000
Wang Lianyi1,152,200RMB common shares1,152,200
Expiation on associated relationship or consistent actors within the top 10 un-lock up common shareholders and between top 10 un-lock up common shareholders and top 10 common shareholdersShenzhen 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 common shareholders involving margin business (if applicable) (see note 4)1. At the end of reporting period, Shareholder – Lin Junbo holds 3,600,000 shares of the Company under customer credit trading secured securities account through China Merchants Securities Co., Ltd., common account holds 0 shares, and 3,600,000 shares are held in total at end of the Period. During the reporting period, the credit trading secured securities account has 3,600,000 shares increased, and shares held in the common account has 3,566,700 shares decreased, shares held are increased 33,300 shares in total.

Whether top ten common stock shareholders or top ten common stock shareholders with un-lock up 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-lock up shares held of the Company have nobuy-back agreement dealing in reporting period.

IV. Changes of shares held by directors, supervisors and senior executives

□ Applicable √ Not applicable

Shares held by directors, supervisors and senior executives have no changes in reporting period, found more details in Annual Report2020.V. Changes in controlling shareholders or actual controllersChange of controlling shareholder during the reporting period

□ Applicable √ Not applicable

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

□ Applicable √ Not applicable

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

Section VIII. Preferred Stock

□ Applicable √ Not applicable

The Company had no preferred stock in the Period.

Section IX. Corporate Bonds

□ Applicable √ Not applicable

Section X. Financial ReportI. Audit report

Whether the semi annual report is audited

□ Yes √ No

The company's semi annual financial report has not been auditedII. Financial StatementStatement in Financial Notes are carried in RMB/CNY

1. Consolidated Balance Sheet

Prepared by SHENZHEN CEREALS HOLDINGS CO., LTD.

In RMB/CNY

ItemJune 30, 2021December 31, 2020
Current assets:
Monetary funds68,774,083.11190,494,225.94
Settlement provisions
Capital lent
Trading financial assets910,778.83160,621,806.51
Derivative financial assets
Note receivable694,376.002,213,426.00
Account receivable712,441,439.01198,311,102.17
Receivable financing
Accounts paid in advance75,748,406.5727,136,263.84
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance receivable
Other account receivable18,588,482.6222,631,043.66
Including: Interest receivable
Dividend receivable
Buying back the sale of financial assets
Inventories4,130,250,968.863,418,328,974.27
Contract assets
Assets held for sale
Non-current asset due within one year
Other current assets126,719,728.35119,750,603.31
Total current assets5,134,128,263.354,139,487,445.70
Non-current assets:
Loans and payments on behalf
Debt investment
Other debt investment
Long-term account receivable
Long-term equity investment73,655,327.5173,215,147.84
Investment in other equity instrument
Other non-current financial assets57,500.0057,500.00
Investment real estate244,847,354.37253,037,899.57
Fixed assets1,339,305,491.071,122,692,490.55
Construction in progress868,979,194.241,045,643,295.57
Productive biological asset382,848.00387,694.20
Oil and gas asset
Right-of-use assets89,811,269.93
Intangible assets606,551,066.68599,306,223.04
Expense on Research and Development
Goodwill
Long-term expenses to be apportioned29,232,611.1131,732,325.01
Deferred income tax asset41,450,382.7241,347,952.12
Other non-current asset1,335,915.842,476,174.33
Total non-current asset3,295,608,961.473,169,896,702.23
Total assets8,429,737,224.827,309,384,147.93
Current liabilities:
Short-term loans1,212,686,540.73110,318,727.12
Loan from central bank
Capital borrowed
Trading financial liability
Derivative financial liability
Note payable
Account payable703,173,288.94480,896,517.64
Accounts received in advance4,961,036.193,376,262.66
Contract liability149,884,356.62108,975,866.82
Selling financial asset of repurchase
Absorbing deposit and interbank deposit
Security trading of agency
Security sales of agency
Wage payable232,853,211.08260,514,559.66
Taxes payable29,684,001.7066,904,735.29
Other account payable438,040,855.78397,325,719.50
Including: Interest payable
Dividend payable2,933,690.042,933,690.04
Commission charge and commission payable
Reinsurance payable
Liability held for sale
Non-current liabilities due within one year137,873,648.25104,225,183.07
Other current liabilities7,250,420.68
Total current liabilities2,909,156,939.291,539,787,992.44
Non-current liabilities:
Insurance contract reserve
Long-term loans805,594,327.98841,864,531.75
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability91,245,488.14
Long-term account payable17,023,270.1916,126,146.20
Long-term wages payable
Accrual liability3,500,000.003,500,000.00
Deferred income103,098,943.07100,710,038.32
Deferred income tax liabilities11,943,176.4312,150,035.13
Other non-current liabilities
Total non-current liabilities1,032,405,205.81974,350,751.40
Total liabilities3,941,562,145.102,514,138,743.84
Owner’s equity:
Share capital1,152,535,254.001,152,535,254.00
Other equity instrument
Including: Preferred stock
Perpetual capital securities
Capital public reserve1,262,320,013.741,422,892,729.36
Less: Inventory shares
Other comprehensive income
Reasonable reserve
Surplus public reserve382,367,575.37382,367,575.37
Provision of general risk
Retained profit1,650,876,264.991,637,536,441.03
Total owner’ s equity attributable to parent company4,448,099,108.104,595,331,999.76
Minority interests40,075,971.62199,913,404.33
Total owner’ s equity4,488,175,079.724,795,245,404.09
Total liabilities and owner’ s equity8,429,737,224.827,309,384,147.93

Legal Representative: Zhu JunmingPerson in charge of accounting works: Lu YuhePerson in charge of accounting institute: Wen Jieyu

2. Balance Sheet of Parent Company

In RMB/CNY

ItemJune 30, 2021December 31, 2020
Current assets:
Monetary funds5,854,664.285,312,806.71
Trading financial assets910,778.83621,806.51
Derivative financial assets
Note receivable
Account receivable364,150,328.774,087,681.18
Receivable financing
Accounts paid in advance
Other account receivable824,833,488.88892,105,968.23
Including: Interest receivable
Dividend receivable390,000,000.00390,000,000.00
Inventories
Contract assets
Assets held for sale
Non-current assets maturing within one year
Other current assets11,817,926.971,497,597.50
Total current assets1,207,567,187.73903,625,860.13
Non-current assets:
Debt investment
Other debt investment
Long-term receivables
Long-term equity investments4,029,394,425.093,707,714,425.09
Investment in other equity instrument
Other non-current financial assets
Investment real estate16,750,708.9016,986,504.04
Fixed assets32,539,655.7233,125,275.65
Construction in progress493,682.75
Productive biological assets382,848.00387,694.20
Oil and natural gas assets
Right-of-use assets
Intangible assets16,781,499.4712,842,693.98
Research and development costs
Goodwill
Long-term deferred expenses966,458.941,040,708.20
Deferred income tax assets
Other non-current assets
Total non-current assets4,097,309,278.873,772,097,301.16
Total assets5,304,876,466.604,675,723,161.29
Current liabilities:
Short-term borrowings312,629,623.82
Trading financial liability
Derivative financial liability
Notes payable
Account payable
Accounts received in advance
Contract liability411.00411.00
Wage payable35,530,964.4326,535,794.31
Taxes payable3,625,912.042,736,075.65
Other accounts payable545,254,132.0045,560,514.82
Including: Interest payable
Dividend payable
Liability held for sale
Non-current liabilities due within one year
Other current liabilities
Total current liabilities897,041,043.2974,832,795.78
Non-current liabilities:
Long-term loans
Bonds payable
Including: Preferred stock
Perpetual capital securities
Lease liability
Long-term account payable
Long term employee compensation payable
Accrued liabilities3,500,000.003,500,000.00
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities3,500,000.003,500,000.00
Total liabilities900,541,043.2978,332,795.78
Owners’ equity:
Share capital1,152,535,254.001,152,535,254.00
Other equity instrument
Including: Preferred stock
Perpetual capital securities
Capital public reserve3,018,106,568.273,018,106,568.27
Less: Inventory shares
Other comprehensive income
Special reserve
Surplus reserve109,963,147.23109,963,147.23
Retained profit123,730,453.81316,785,396.01
Total owner’s equity4,404,335,423.314,597,390,365.51
Total liabilities and owner’s equity5,304,876,466.604,675,723,161.29

3. Consolidated Profit Statement

In RMB/CNY

Item2021 semi-annual2020 semi-annual
I. Total operating income5,262,189,180.534,740,428,222.10
Including: Operating income5,262,189,180.534,740,428,222.10
Interest income
Insurance gained
Commission charge and commission income
II. Total operating cost4,901,525,013.614,448,897,391.27
Including: Operating cost4,650,397,070.674,219,403,828.80
Interest expense
Commission charge and commission expense
Cash surrender value
Net amount of expense of compensation
Net amount of withdrawal of insurance contract reserve
Bonus expense of guarantee slip
Reinsurance expense
Tax and extras6,969,279.854,334,418.54
Sales expense106,711,776.77109,796,698.11
Administrative expense109,316,093.65101,838,460.53
R&D expense10,926,018.157,368,772.68
Financial expense17,204,774.526,155,212.61
Including: Interest expenses15,362,400.047,410,693.33
Interest income765,002.681,735,133.50
Add: Other income4,891,929.3010,824,560.17
Investment income (Loss is listed with “-”)3,501,371.3010,249,064.30
Including: Investment income on affiliated company and joint venture440,179.67366,989.43
The termination of income recognition for financial assets measured by amortized cost
Exchange income (Loss is listed with “-”)
Net exposure hedging income (Loss is listed with “-”)
Income from change of fair value (Loss is listed with “-”)288,972.32-572,784.42
Loss of credit impairment (Loss is listed with “-”)34,157.371,791,966.35
Losses of devaluation of asset (Loss is listed with “-”)-111,448,173.12-95,290,043.04
Income from assets disposal (Loss is listed with “-”)8,318.64-10,598.38
III. Operating profit (Loss is listed with “-”)257,940,742.73218,522,995.81
Add: Non-operating income1,627,702.561,358,799.58
Less: Non-operating expense403,164.305,186,666.30
IV. Total profit (Loss is listed with “-”)259,165,280.99214,695,129.09
Less: Income tax expense13,407,354.562,465,268.63
V. Net profit (Net loss is listed with “-”)245,757,926.43212,229,860.46
(i) Classify by business continuity
1.continuous operating net profit (net loss listed with ‘-”)245,757,926.43212,229,860.46
2.termination of net profit (net loss listed with ‘-”)
(ii) Classify by ownership
1.Net profit attributable to owner’s of parent company243,846,874.76210,738,686.12
2.Minority shareholders’ gains and losses1,911,051.671,491,174.34
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 income245,757,926.43212,229,860.46
Total comprehensive income attributable to owners of parent Company243,846,874.76210,738,686.12
Total comprehensive income attributable to minority shareholders1,911,051.671,491,174.34
VIII. Earnings per share:
(i) Basic earnings per share0.21160.1828
(ii) Diluted earnings per share0.21160.1828

Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before combination, andrealized 0 Yuan at last period for combined party.Legal Representative: Zhu JunmingPerson in charge of accounting works: Lu YuhePerson in charge of accounting institute: Wen Jieyu

4. Profit Statement of Parent Company

In RMB/CNY

ItemSemi-annual of 2021Semi-annual of 2020
I. Operating income78,409,527.17191,007.09
Less: Operating cost235,795.14250,130.28
Taxes and surcharge443,112.63115,899.05
Sales expenses1,557.53
Administration expenses40,040,419.5027,299,132.94
R&D expenses
Financial expenses893,183.83-137,521.80
Including: Interest expenses1,145,171.80
Interest income285,480.74131,202.58
Add: Other income169,161.92994,791.02
Investment income (Loss is listed with “-”)567,166.06392,812,575.88
Including: Investment income on affiliated Company and joint venture-48,505.63
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 “-”)288,972.32-572,784.42
Loss of credit impairment (Loss is listed with “-”)-220,207.77-204,763.50
Losses of devaluation of asset (Loss is listed with “-”)
Income on disposal of assets (Loss is listed with “-”)
II. Operating profit (Loss is listed with “-”)37,602,108.60365,691,628.07
Add: Non-operating income357,590.00
Less: Non-operating expense150,000.005,090,000.00
III. Total Profit (Loss is listed with “-”)37,452,108.60360,959,218.07
Less: Income tax
IV. Net profit (Net loss is listed with “-”)37,452,108.60360,959,218.07
(i) continuous operating net profit (net loss listed with ‘-”)37,452,108.60360,959,218.07
(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 income37,452,108.60360,959,218.07
VII. Earnings per share:
(i) Basic earnings per share
(ii) Diluted earnings per share

5. Consolidated Cash Flow Statement

In RMB/CNY

ItemSemi-annual of 2021Semi-annual of 2020
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor services4,872,625,307.714,851,380,535.76
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 received15,314,266.132,634,408.13
Other cash received concerning operating activities509,043,498.66440,707,293.21
Subtotal of cash inflow arising from operating activities5,396,983,072.505,294,722,237.10
Cash paid for purchasing commodities and receiving labor service5,229,031,194.264,653,349,386.89
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 workers158,496,287.47149,264,002.51
Taxes paid108,750,086.7137,068,103.68
Other cash paid concerning operating activities591,977,655.39445,430,382.87
Subtotal of cash outflow arising from operating activities6,088,255,223.835,285,111,875.95
Net cash flows arising from operating activities-691,272,151.339,610,361.15
II. Cash flows arising from investing activities:
Cash received from recovering investment270,000,000.00464,500,000.00
Cash received from investment income3,051,423.057,544,998.92
Net cash received from disposal of fixed, intangible and other long-term assets17,565.0019,988.32
Net cash received from disposal
of subsidiaries and other units
Other cash received concerning investing activities54,336.41337,500.00
Subtotal of cash inflow from investing activities273,123,324.46472,402,487.24
Cash paid for purchasing fixed, intangible and other long-term assets98,438,615.15156,742,240.20
Cash paid for investment120,006,966.66385,000,000.00
Net increase of mortgaged loans
Net cash received from subsidiaries and other units obtained321,680,000.00
Other cash paid concerning investing activities109,602.00994,317.84
Subtotal of cash outflow from investing activities540,235,183.81542,736,558.04
Net cash flows arising from investing activities-267,111,859.35-70,334,070.80
III. Cash flows arising from financing activities:
Cash received from absorbing investment490,000.00
Including: Cash received from absorbing minority shareholders’ investment by subsidiaries
Cash received from loans2,006,423,247.45833,803,914.65
Other cash received concerning financing activities
Subtotal of cash inflow from financing activities2,006,913,247.45833,803,914.65
Cash paid for settling debts907,763,968.37558,227,673.50
Cash paid for dividend and profit distributing or interest paying262,471,931.68256,130,248.31
Including: Dividend and profit of minority shareholder paid by subsidiaries
Other cash paid concerning financing activities58,702.23
Subtotal of cash outflow from1,170,235,900.05814,416,624.04
financing activities
Net cash flows arising from financing activities836,677,347.4019,387,290.61
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate-13,479.5518,647.57
V. Net increase of cash and cash equivalents-121,720,142.83-41,317,771.47
Add: Balance of cash and cash equivalents at the period -begin190,494,225.94154,954,757.85
VI. Balance of cash and cash equivalents at the period -end68,774,083.11113,636,986.38

6. Cash Flow Statement of Parent Company

In RMB/CNY

ItemSemi-annual of 2021Semi-annual of 2020
I. Cash flows arising from operating activities:
Cash received from selling commodities and providing labor services826,505.31124,032.00
Write-back of tax received103,987.33
Other cash received concerning operating activities664,855,399.05279,260,229.55
Subtotal of cash inflow arising from operating activities665,681,904.36279,488,248.88
Cash paid for purchasing commodities and receiving labor service45,000,000.0012,742.23
Cash paid to/for staff and workers25,664,475.7015,199,812.23
Taxes paid1,938,500.471,392,555.04
Other cash paid concerning operating activities337,740,658.1727,911,182.13
Subtotal of cash outflow arising from operating activities410,343,634.3444,516,291.63
Net cash flows arising from operating activities255,338,270.02234,971,957.25
II. Cash flows arising from investing activities:
Cash received from recovering investment10,000,000.0024,500,000.00
Cash received from investment income123,077.77524,005.56
Net cash received from disposal of fixed, intangible and other long-term assets
Net cash received from disposal of subsidiaries and other units
Other cash received concerning investing activities54,336.41337,500.00
Subtotal of cash inflow from investing activities10,177,414.1825,361,505.56
Cash paid for purchasing fixed, intangible and other long-term assets4,271,363.115,054,670.76
Cash paid for investment20,006,966.6630,000,000.00
Net cash received from subsidiaries and other units obtained321,680,000.00
Other cash paid concerning investing activities
Subtotal of cash outflow from investing activities345,958,329.7735,054,670.76
Net cash flows arising from investing activities-335,780,915.59-9,693,165.20
III. Cash flows arising from financing activities:
Cash received from absorbing investment
Cash received from loans411,800,462.65
Other cash received concerning financing activities
Subtotal of cash inflow from financing activities411,800,462.65
Cash paid for settling debts99,925,561.27
Cash paid for dividend and profit distributing or interest paying230,890,398.24230,507,050.80
Other cash paid concerning financing activities58,702.23
Subtotal of cash outflow from financing activities330,815,959.51230,565,753.03
Net cash flows arising from financing activities80,984,503.14-230,565,753.03
IV. Influence on cash and cash equivalents due to fluctuation in exchange rate8,620.29
V. Net increase of cash and cash equivalents541,857.57-5,278,340.69
Add: Balance of cash and cash equivalents at the period -begin5,312,806.7116,272,394.90
VI. Balance of cash and cash equivalents at the period -end5,854,664.2810,994,054.21

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

Current Amount

In RMB/CNY

ItemSemi-annual of 2021
Owners’ equity attributable to the parent CompanyMinority interestsTotal owners’ equity
Share capitalOther equity instrumentCapital reserveLess: Inventory sharesOther comprehensive incomeReasonable reserveSurplus reserveProvision of general riskRetained profitOtherSubtotal
Preferred stockPerpetual capital securitiesOther
I. The ending balance of the previous year1,152,535,254.001,422,892,729.36382,367,575.371,637,536,441.034,595,331,999.76199,913,404.334,795,245,404.09
Add: Changes of accounting
policy
Error correction of the last period
Enterprise combine under the same control
Other
II. The beginning balance of the current year1,152,535,254.001,422,892,729.36382,367,575.371,637,536,441.034,595,331,999.76199,913,404.334,795,245,404.09
III. Increase/ Decrease in the period (Decrease is listed with “-”)-160,572,715.6213,339,823.96-147,232,891.66-159,837,432.71-307,070,324.37
(i) Total comprehensive income243,846,874.76243,846,874.761,911,051.67245,757,926.43
(ii) Owners’ devoted and decreased capital-160,572,715.62-160,572,715.62-161,748,484.38-322,321,200.00
1.Common shares invested by shareholders-160,572,715.62-160,572,715.62-161,748,484.38-322,321,200.00
2. Capital invested by holders of other equity instruments
3. Amount reckoned into owners equity
with share-based payment
4. Other
(iii) Profit distribution-230,507,050.80-230,507,050.80-230,507,050.80
1. Withdrawal of surplus reserves
2. Withdrawal of general risk provisions
3. Distribution for owners (or shareholders)-230,507,050.80-230,507,050.80-230,507,050.80
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
1. Withdrawal in the report period
2. Usage in the report period
(vi) Others
VI. Balance at the end of the period1,152,535,254.001,262,320,013.74382,367,575.371,650,876,264.994,448,099,108.1040,075,971.624,488,175,079.72

Amount of the previous period

In RMB/CNY

ItemSemi-annual of 2020
Owners’ equity attributable to the parent CompanyMinority interestsTotal owners’ equity
Share capitalOther equity instrumentCapital reserveLess: Inventory sharesOther comprehensive incomeReasonable reserveSurplus reserveProvision of general riskRetained profitOtherSubtotal
Preferred stockPerpetual capital secOther
urities
I. The ending balance of the previous year1,152,535,254.001,422,892,729.36522.55350,187,601.061,495,135,080.604,420,751,187.57202,686,943.424,623,438,130.99
Add: Changes of accounting policy
Error correction of the last period
Enterprise combine under the same control
Other
II. The beginning balance of the current year1,152,535,254.001,422,892,729.36522.55350,187,601.061,495,135,080.604,420,751,187.57202,686,943.424,623,438,130.99
III. Increase/ Decrease in the period (Decrease is listed with “-”)-522.55-19,768,364.68-19,768,887.2334,174.34-19,734,712.89
(i) Total comprehensive income210,738,686.12210,738,686.121,491,174.34212,229,860.46
(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-230,507,050.80-230,507,050.80-1,457,000.00-231,964,050.80
1. Withdrawal of surplus reserves
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 period574,618.41574,618.41574,618.41
2. Usage in the report period575,140.96575,140.96575,140.96
(vi) Others
VI. Balance at the end of1,152,1,422,89350,187,1,475,364,400,98202,721,114,603,703,
the period535,254.002,729.36601.066,715.922,300.347.76418.10

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

Current Amount

In RMB/CNY

ItemSemi-annual of 2021
Share capitalOther equity instrumentCapital reserveLess: Inventory sharesOther comprehensive incomeReasonable reserveSurplus reserveRetained profitOtherTotal owners’ equity
Preferred stockPerpetual capital securitiesOther
I. The ending balance of the previous year1,152,535,254.003,018,106,568.27109,963,147.23316,785,396.014,597,390,365.51
Add: Changes of accounting policy
Error correction of the last period
Other
II. The beginning balance of the current year1,152,535,254.003,018,106,568.27109,963,147.23316,785,396.014,597,390,365.51
III. Increase/ Decrease in the period (Decrease is listed with “-”)-193,054,942.20-193,054,942.20
(i) Total comprehensive37,452,137,452,108.60
income08.60
(ii) Owners’ devoted and decreased capital
1.Common shares invested by shareholders
2. Capital invested by holders of other equity instruments
3. Amount reckoned into owners equity with share-based payment
4. Other
(iii) Profit distribution-230,507,050.80-230,507,050.80
1. Withdrawal of surplus reserves
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
VI. Balance at the end of the period1,152,535,254.003,018,106,568.27109,963,147.23123,730,453.814,404,335,423.31

Amount of the previous period

In RMB/CNY

ItemSemi-annual of 2020
Share capitOther equity instrumentCapital reservLess: InventoryOther comprehensiveReasonable reserveSurplus reserveRetained profitOtherTotal owners’ equity
PreferrePerpetualOther
ald stockcapital securitiesesharesincome
I. The ending balance of the previous year1,152,535,254.003,018,106,568.2777,783,172.92257,672,677.944,506,097,673.13
Add: Changes of accounting policy
Error correction of the last period
Other
II. The beginning balance of the current year1,152,535,254.003,018,106,568.2777,783,172.92257,672,677.944,506,097,673.13
III. Increase/ Decrease in the period (Decrease is listed with “-”)130,452,167.27130,452,167.27
(i) Total comprehensive income360,959,218.07360,959,218.07
(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-230,507,050.80-230,507,050.80
1. Withdrawal of surplus reserves
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
VI. Balance at the end of the period1,152,535,254.003,018,106,568.2777,783,172.92388,124,845.214,636,549,840.40

III. Basic information of Company

Shenzhen Cereals Holdings Co., Ltd. (formerly the Shenzhen Shenbao Industrial Co., Ltd., hereinafter referred toas “Company” or “the Company” ), formerly named Shenzhen Shenbao Canned Food Company, obtainedapproval (Document (1991) No.978) from Shenzhen Municipal People’s Government to change to the name asShenzhen Shenbao Industrial Co., ltd. on 1 August 1991.Then with the approval (Document (1991)No.126) fromPeople’s Bank of China, the Company began to list on Shenzhen Stock Exchange. The Company belongs to thegrain, oil, food and beverage industry.

As of 30 June 2021, 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 Group Co., Ltd; actual controller of theCompany: Assets Supervision and Administration Commission of Shenzhen municipal People’s Government.

Change of the consolidate scope in the Period found more in “Note VIII. Change of consolidate scope”Information with subsidiaries concerned found more in the “Note IX. Equity in other entity”

IV. Basis of preparation of financial statements

1. Basis of preparation

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

Specific accounting policies and estimation attention:

The following disclosures have covered the specific accounting policies and estimates that formulated by theCompany according to the actual characteristics of production and operation.

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 30 June 2021, as well as the consolidate and parent company’s operationalresults and cash flow from Jan.-Jun. of 2021.

2. Accounting period

Calendar year is the accounting period for the Company, that is falls to the range starting from 1 January to 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 value

of 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 variousidentifiable 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 current

profit and loss at current period when losing controlling right.

If each transactions doesn’t form a package deal, equity held from subsidiary shall be accounted in 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 acquisitiondate (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. 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.

8. Foreign currency business and conversion of foreign currency statement

8.1 Foreign currency business

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

8.2 Conversion of foreign currency financial statements

Assets and liabilities in the balance sheet are converted at the spot exchange rate on the balance sheet date; exceptfor the “undistributed profit” item, other items of the owner's equity items are converted at the spot exchange rate at

the time of occurrence. Income and expense items in the income statement are converted at the spot exchange rateon the transaction date.When disposing an overseas operation, the translation difference of the foreign currency financial statements relatedto the overseas operation is transferred from the owner's equity items to the disposal of the current profit and loss.

9. Financial instruments

The Company recognizes a financial assets, financial liabilities or equity instrument when it becomes a party to afinancial instrument contract.

9.1 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 changes

included 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, ifaccounting 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.

9.2 Recognition and measurement for financial instrument

(1) Financial assets measured at amortized cost

Financial assets measured at amortized cost include notes receivable, accounts receivable, other receivables,long-term receivables, and debt investment, which are initially measured at fair value, and related transaction 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, impairment

losses or gains and exchange gains and losses calculated by using the effective interest method.

When a financial asset is terminated for recognition, the accumulated gain or loss previously included in 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.

9.3 Termination of recognition and transfer of financial assets

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

- the contractual rights to receive cash flows from financial assets terminates;- the financial asset has been transferred and virtually all the risks and rewards of the ownership of the 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.

9.4 Terminating the recognition of financial liability

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

9.5 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.

9.6 Testing of the financial assets impairment and accounting treatment

The Company estimates the expected credit losses of financial assets measured at amortized cost, financial assets(debt instruments) measured at fair value and whose changes are included in other comprehensive income, 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 the

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

10. Inventory

10.1 Classification and costs of inventory

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

process-outsourced and so on.

Inventory is initially measured at cost, which includes the costs of purchase, processing costs and otherexpenditures incurred in bringing the inventories to their present location and condition.

10.2 Valuation methods for delivery of inventory

The weighted average or individual valuation method is used when the inventory is issued according to the natureof the business.

10.3 Recognition standards of the net realizable value for inventory

On the balance sheet date, inventories shall be measured at the lower of cost and net realizable value. When 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, is measuredas the residual value after deducting the estimated sales expense and related taxes and fees from the estimatedselling price; the net realizable value of an item of inventories subject to further processing, in normal businessproduction, is measured as the residual value after deducting the sum of the estimated costs of completion, salesexpense and related taxes and fees from the estimated selling price of the for-sale item. The net realizable value ofthe quantity of inventories held to satisfy firm sales or service contracts is based on the contract price. If the salescontracts are for less than the inventory quantities held, the net realizable value of the excess is based on generalselling prices.

After making provisions for inventory write-down, if the factors that previously affected the write-down of theinventory 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.

10.4 Inventory system

Inventory system is the perpetual inventory system.

10.5 Amortization of low-value consumables and packaging materials

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

(2) Wrappage adopts the method of primary resale.

11. Contract asset

11.1 Methods and criteria for recognition of a contract asset

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

11.2 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

12. Contract cost

Contract cost includes contract performance cost and contract acquisition cost.The cost incurred by the Company for the performance of the contract does not fall within the scope of relevantstandards and norms such as inventory, fixed assets or intangible assets, and shall be recognized as an asset ascontract performance cost when the following conditions are met:

? The cost is directly related to a current or anticipated contract.? This cost increases the Company's resources for future performance obligations.? This cost is expected to be recovered.The incremental cost incurred by the Company to acquire the contract which is expected to be recovered shall berecognized as an asset as the contract acquisition cost.Assets related to contract cost are amortized on the same basis as revenue recognition for the goods or servicesrelated to the assets; However, if the amortization period of the contract acquisition cost does not exceed one year,the Company shall record it into the profit and loss of the current period when it occurs.If the carrying value of the assets related to the contract cost is higher than the difference between the followingtwo items, the Company shall make an impairment provision for the excess part and recognize it as an assetimpairment loss:

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

(2) the cost estimated to occur for the transfer of the relevant goods or services.If the said difference is higher than the book value of the asset due to the changes in the factors of impairment in theprevious period, the Company shall reverse the original provision for impairment which has been set aside andrecord it into the profits and losses of the current period, provided that the book value of the asset after beingreversed shall not exceed the book value of the asset on the date of reversal under the assumption that no impairmentprovision is set aside.

13. Long-term equity investment

13.1 Criteria for judgment of the common control and significant influence

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

13.2 Determination of initial investment cost

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

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

initial 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

13.3 Subsequent measurement and recognition of gains and losses

(1) Long-term equity investment measured by cost

The long-term equity investment for subsidiary shall be measured by cost, unless the investment qualities as 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 theinvestee 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 incomerecognized 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.

14. 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.

15. 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

CategoryMethodYears of depreciationScrap value rateYearly depreciation rate
House and buildingsStraight-line depreciation
Production buildingsStraight-line depreciation20-355.002.71-4.75
Non-production buildingsStraight-line depreciation20-405.002.38-4.75
Temporary dormitory and simple room etc.Straight-line depreciation5-155.006.33-19.00
Gas storage binStraight-line depreciation205.004.75
SiloStraight-line depreciation505.001.90
Wharf and supporting facilitiesStraight-line depreciation505.001.90
Machinery equipmentStraight-line depreciation
Other machinery equipmentStraight-line depreciation10-205.004.75-9.50
Warehouse transmission equipmentStraight-line depreciation205.004.75
Transport equipmentStraight-line depreciation3-105.009.50-31.67
Electronic equipment and othersStraight-line depreciation2-105.009.50-47.50

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 theassets when the option is exercised;

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

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

16. Construction in progress

Construction in progress is measured at the actual cost incurred. The actual cost includes construction cost,installation cost, borrowing costs that meet the capitalization conditions, and other necessary 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.

17. Borrowing expenses

17.1 Recognition of the borrowing expenses capitalization

Borrowing expenses that attributed for purchasing or construction of assets that are complying start to 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.

17.2 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.

17.3 Period of suspended

If purchasing, construction, or manufacturing process of an asset satisfying the conditions of capitalization issuspended abnormally for over 3 months, capitalizing of borrowing expenses shall be suspended; the suspendedassets that satisfying the conditions of capitalization meets the necessary procedure of reaching predicted usablestatus or for-sale status, capitalizing of borrowing expenses shall be resumed. The borrowing expenses occurredduring the period of suspended shall reckon into current gains and losses until the purchasing, construction, ormanufacturing process is resumed for capitalizing.

17.4 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.

18. Biological assets

18.1The Company's biological assets are productive biological assets, which are classified into productivebiological assets, consumptive biological assets and biological assets for commonweal according to the purpose ofholding and the way in which economic benefits are realized.

18.2 Biological assets are initially measured at cost

18.3 The necessary expenditures incurred by productive biological assets before reaching the intended productionand operation purposes constitute the cost of the productive biological assets. Subsequent expenditures incurredafter achieving the intended production purposes shall be included in the current profit and loss.

18.4 The necessary expenditures for consumptive biological assets before closure constitute the cost ofconsumptive biological assets, and subsequent expenditures incurred after closure are included in the currentprofit and loss. The cost of consumptive biological assets shall be carried forward according to the growing stockvolume ratio method when harvesting.

18.5 The Company’s biological assets are mainly tea trees. The company’s productive biological assets thatachieve the intended production and operation purposes are depreciated according to the average service lifemethod, and the service life is determined as the remaining period of land use after deducting the immature teatree period (5 years), the residual value rate is 5.00%. At the end of each year, the company reviews the servicelife, expected net residual value and depreciation methods. If the service life and expected net output value aredifferent from the original estimate, or there is a significant change in the realization of economic benefits, it willbe used as an accounting estimate change to adjust the service life or estimated net output value or change thedepreciation method.

18.6 Biological assets for commonweal refer to biological assets whose main purpose is protection andenvironmental protection, including wind-breaking and sand-fixing forests, soil and water conservation forests,and water conservation forests.

The cost of self-constructed biological assets for commonweal shall be determined in accordance with 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 apportioned

before the closure, including borrowing costs that meet the conditions for capitalization.

Biological assets for commonweal are subsequently measured at cost. There is no need to withdraw the assetimpairment reserve for biological assets for commonweal.

18.7 The balance of the disposal consideration from the sale, inventory loss, death or damage of biological assetsafter deducting the book value and relevant taxes shall be included in the current profit and loss.

19. Right-of-use assets

On the commencement date of the lease term, the Company recognizes the right-of-use assets for leases other than short-termleases and low-value asset leases. The right-of-use assets shall be initially measured at cost. The cost includes:

The initial measurement amount of lease liabilities;Where the lease payments paid on or before the commencement date of the lease term have a lease incentive, theamount of the lease incentive already enjoyed shall be deducted;Initial direct costs incurred by the Company;Costs expected to be incurred by the Company to dismantle and remove the leased assets, restore the sites wherethe leased assets locate or restore the leased assets to the state agreed upon in the lease terms, excluding costsincurred for the production of inventory.The Company shall subsequently use the straight-line method to calculate the depreciation of the right-of-useassets. Where ownership of the leased asset can be reasonably determined at the end of the lease term, theCompany shall calculate the depreciation during the remaining useful life of the leased asset; Otherwise, thedepreciation of the leased asset is calculated during the period which is shorter between the lease term and theremaining useful life of the leased asset.The Company determines whether the right-of-use asset impairment has occurred in accordance with theprinciples described in the Notes "21. Impairment of Long-term Assets", and makes accounting treatment for theidentified impairment loss.

20. Intangible assets

(1) Measurement, use of life and impairment testing

1) Measurement

i-Initial measurement is made at cost when the Company acquires intangible assets;For those intangible assets purchased from outside, the purchase value, relevant taxes and other paymentsattributable to predicted purpose obtained should recognized as cost for this assets.

ⅱ-Subsequent measurement

Analyzing and judging the service life of an intangible asset when they are acquired.Those intangible assets with limited useful life are evenly amortized on straight basis from the date whenthey become usable to the end of expected useful life;Intangible assets for which it is impossible to predict theterm during which the assets can bring in economic benefits are viewed as intangible assets with indefinite lifewithout amortization.

2)Estimation of the service life of intangible assets with limited service life

ItemPredicted useful lifeAmortization methodResidual value rateBasis
Land use rightAmortized the actual rest of life after certificate of land use right obtainedStraight-line method0.00%Certificate of land use right
Forest tree use rightService life arrangedStraight-line method0.00%Protocol agreement
Trademark use right10-yearStraight-line method0.00%Actual situation of the Company
Shop management rightService life arrangedStraight-line method0.00%Protocol agreement
Software use right5-8 yearsStraight-line method0.00%Protocol agreement
Patents and others20-yearStraight-line method0.00%Actual situation of the Company

3) Judgment basis on intangible assets with uncertain service life and review procedures for the service lifeIntangible assets for which it is impossible to predict the term during which the assets can bring ineconomic benefits are viewed as intangible assets with indefinite life. Intangible assets with indefinite life arenot amortized 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

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.

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 current periodgains and losses when occurs. Development expenditure previously included in gains and losses in previousperiods will not be re-recognized as assets in later periods. Capitalized development expenditure is stated inbalance sheet as development expenditure, and is transferred to intangible assets when the project is ready forplanned use.

21. Impairment of long term assets

The long-term assets as long-term equity investments, investment real estate measured at cost, fixed assets,construction in progress, right-of-use assets, intangible assets with certain service life and oil & gas assets aretested for impairment if there is any indication that an asset may be impaired at the balance date. If the result ofthe impairment test indicates that the recoverable amount of the asset is less than its carrying amount, a provisionfor impairment and an impairment loss are recognized for the amount by which the asset’s carrying amountexceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell andthe present value of the future cash flows expected to be derived from the asset. Provision for asset impairment isdetermined and recognized on the individual asset basis. If it is not possible to estimate the recoverable amount ofan individual asset, the recoverable amount of a group of assets to which the asset belongs is determined. A group

of assets is the smallest group of assets that is able to generate independent cash inflows.

For goodwill formed by business combination, intangible assets with uncertain service life, and intangible 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.

22. 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.

23. Contract liabilities

The 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.

24. Staff remuneration

(1)Accounting treatment of short term remuneration

In the period of employee services, short-term benefits are actually recognized as liabilities and charged to 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

1)Defined contribution plan

The 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.

2)Defined benefit plan

The 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 ofthe 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.

25. 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 byfulfillment of current responsibilities.

While determined the best estimation, take the risks, uncertainty and periodic value of currency that connectedto the 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 results within this range isthe same, the best estimate is determined according to the median value in the range; in other cases, the best estimate shall betreated 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.

26. Other financial instrument of preferred stocks and perpetual bond

The Company categorizes a financial instrument or its components as a financial asset, a financial liability or an

equity instrument at the time of initial recognition based on the contractual terms of preferred stocks/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 the

derivative 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.

27. Revenue

Accounting policy used for revenue recognition and measurement

27.1 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 thereis 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.

27.2 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 isconfirmed 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 Government

Grain Reserve Expenses Contract Operation Regulations" and the "Shenzhen Municipal Government EdibleVegetable Oil Government Reserve Expenses Contract Operation Regulations".

3) Other income:

i-The amount of royalty revenue is calculated and determined in accordance with the charging time and methodagreed in the relevant contract or agreement;ii- 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.

Differences in accounting policies for revenue recognition due to the different operating models for the same types of business

28. Government subsidy

28.1 Types

Governments subsidy of the Company refer to the monetary and non-monetary assets obtained from governmentfor free, and are divided into those related to assets and others related to revenues.

Government subsidy related to assets refer to those obtained by the Company and used for purchase orconstruction of or otherwise to form long-term assets. Government subsidies related to revenue refer to those otherthan government subsidies related to assets.

Specific criteria for classifying the government subsidy as asset-related by the Company are: government subsidyacquired for the acquisition and construction or other formation of long-term assets

Specific criteria for classifying the government subsidy as income-related by the Company are: governmentsubsidy obtained by the Company other than those related to assets.

28.2 Recognition time point

At end of the period, if there is evidence show that the Company qualified relevant condition of fiscal supportingpolices and such supporting funds are predicted to obtained, than recognized the amount receivable as governmentsubsidy. After that, government subsidy shall recognize while actually received.

Government subsidy in the form of monetary assets are stated at the amount received or receivable. Governmentsubsidy in the form of non-monetary assets are measured at fair value; if fair value cannot be obtained, a nominalamount (one yuan) is used. Government subsidy measured at nominal amount is recognized immediately in profitor loss for the current period.

28.3 Accounting treatment

Based on the nature of economic business, the Company determines whether a certain type of government 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.

ItemCalculation content
Based on gross methodAll business of government subsidy

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) If the finance directly allocates interest discount funds to the Company, the Company will write down therelevant borrowing costs with the corresponding interest discount.

29. Deferred income tax assets and deferred income tax liabilities

Income tax includes current income tax and deferred income tax. Except for income tax arising from business mergers andtransactions or events that are directly included in owner's equity (including other comprehensive income), the Company include

current income tax and deferred income tax in current profit and loss.

Deferred income tax assets and deferred income tax liabilities are calculated and recognized based on 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 taxdeductions 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.

30. Lease

(1)Accounting treatment for operating lease

Accounting policy since 1 Jan. 2021

A lease is a contract whereby the lessor transfers the right to the use of an asset to the lessee for a certain period oftime in exchange for consideration. On the commencement date of the contract, the Company evaluates whetherthe contract is a lease or includes a lease. A contract is a lease or includes a lease if one party transfers the right tocontrol the use of one or more identified assets for a certain period of time in exchange for consideration.If the contract contains multiple separate leases at the same time, the Company will divide the contract and makeaccounting treatment for each separate lease. If the contract contains both leasing and non-leasing parts, the lesseeand lessor shall divide the leasing and non-leasing parts.

30.1. The Company acts as the lessee

(1) Right-of-use assets

On the commencement date of the lease term, the Company recognizes the right-of-use assets for leases other thanshort-term leases and low-value asset leases. The right-of-use assets shall be initially measured at cost. The costincludes:

The initial measurement amount of lease liabilities;Where the lease payments paid on or before the commencement date of the lease term have a lease incentive, theamount of the lease incentive already enjoyed shall be deducted;Initial direct costs incurred by the Company;Costs expected to be incurred by the Company to dismantle and remove the leased assets, restore the sites wherethe leased assets locate or restore the leased assets to the state agreed upon in the lease terms, excluding costsincurred for the production of inventory.

The Company shall subsequently use the straight-line method to calculate the depreciation of the right-of-useassets. Where ownership of the leased asset can be reasonably determined at the end of the lease term, theCompany shall calculate the depreciation during the remaining useful life of the leased asset; Otherwise, thedepreciation of the leased asset is calculated during the period which is shorter between the lease term and theremaining useful life of the leased asset.

The Company determines whether the right-of-use asset impairment has occurred in accordance with theprinciples described in the Notes "21. Impairment of Long-term Assets", and makes accounting treatment for theidentified impairment loss.

(2) Lease liabilities

On the commencement date of the lease term, the Company recognizes the lease liabilities for leases other thanshort-term leases and low-value asset leases. Lease liabilities are initially measured at the present value ofoutstanding lease payments. The lease payments include:

Where there is a lease incentive in the fixed payments (including the substantive fixed payments), deduct the leaseincentive;Variable lease payments depending on the index or ratio;The payments estimated to be paid according to the guaranteed residual value provided by the company;The executive price of the call option provided that the company reasonably determines that the option will beexercised;

The payments payable to exercise the termination of lease option provided that the lease term reflects that thecompany shall exercise the termination of lease option.

The Company uses the interest rate implicit in lease as the discount rate, but if the interest rate implicit in leasecannot be reasonably determined, the Company's incremental borrowing rate shall be used as the discount rate.

The Company calculates the interest expense of the lease liability in each period of the lease term at a fixedperiodic rate and records it into the current profits and losses or the cost of underlying asset.

The variable lease payments not included in the measurement of lease liabilities are booked into the profits andlosses of the current period or the cost of related assets when actually incurred.After the commencement date of the lease term, if any of the following circumstances occurs, the Company shallre-measure the lease liabilities and adjust the corresponding right-of-use assets. If the book value of theright-of-use assets has been reduced to zero, but the lease liabilities still need to be further reduced, the differenceshall be recorded into the profits and losses of the current period.

If the evaluation results of the call option, the lease renewal option or the termination option changes, or the actualexercise of the said option is inconsistent with the original evaluation results, the Company shall remeasure thelease liability at the present value calculated by the changed lease payment and the revised discount rate;

In the event of a change in the substantive fixed payment, a change in the amount expected to be payable for theguaranteed residual value, or a change in the index or ratio used to determine the lease payment, the Company

shall remeasure the lease liability according to the present value calculated by the changed lease payment and theoriginal discount rate. However, where changes in lease payments result from changes in floating interest rates,the present value is calculated by using the revised discount rate.

(3) Short-term leases and low-value asset leases

The Company chooses not to recognize the right-of-use assets and lease liabilities for short-term leases andlow-value asset leases, and records the relevant lease payments into the current profits and losses or related assetcosts in accordance with the straight-line method for each period of the lease term. A short-term lease is a leasenot exceeding 12 months and excluding the call option on the commencement date of the lease term. Thelow-value asset lease refers to a lease with a lower value when a single leased asset is a new asset. Where thecompany subleases or expects to sublease the leased asset, the original lease is not a low-value asset lease.

(4) Lease change

If the lease changes and meets the following conditions at the same time, the Company will treat the lease changeas a separate lease for accounting treatment:

The lease change expands the lease scope by increasing one or more right of use of the leased assets;The increased consideration and the separate price for the extension portion of the lease shall be equivalent to theamount adjusted according to the contract.

If the lease change is not regarded as a separate lease for accounting treatment, the company shall, on the effectivedate of the lease change, reapportion the consideration of the contract after the change, redetermine the lease term,and remeasure the lease liabilities according to the present value calculated by the changed lease payments and therevised discount rate.

If the lease change results in the narrowing of the lease scope or the shortening of the lease term, the Companyshall adjust the book value of the right-of-use assets accordingly, and record the profits or losses related to partialor complete termination of lease into the profits and losses of the current period. The Company shall adjust thebook value of the right-of-use assets accordingly if the lease liabilities are remeasured due to other lease changes.

30.2 The Company acts as the lessor

On the commencement date of the lease, the lease receipts of operating lease are recognized as rental income inaccordance with the straight-line method for each period of the lease term. The Company capitalizes the initialdirect costs incurred in connection with the operating lease and appoints them into the current profits and losseson the same basis as the rental income recognition during the lease term. Variable lease payments not included inlease receipts are recorded in the current profits and losses when they actually occur. If the operating leasechanges, the Company shall treat it as a new lease for accounting treatment as of the effective date of the change,and the lease receipts collected in advance or receivable related to the lease before change shall be regarded as the

receipts of the new lease.

Accounting policy before 1 Jan. 2021

1)The rental fee paid for renting the properties by the company are amortized by the straight-line method 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, shall beamortized 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

Accounting policy since 1 Jan. 2021On the commencement date of the lease, the Company recognizes the finance lease receivable for the financelease and terminates the recognition of the finance lease assets. In the initial measurement of the finance leasereceivable, the Company shall take the net lease investment as the entry value of the finance lease receivable. Thenet lease investment is the sum of the unguaranteed residual value and the present value of the lease receipts notyet received at the commencement date of the lease term and discounted at the interest rate implicit in lease.

The Company calculates and recognizes the interest income for each period of the lease term at a fixed periodicinterest rate. The accounting treatment for the termination of recognition and the impairment of the finance leaseis conducted in accordance with the Notes "9. Financial Instruments".

Variable lease payments not included in the measurement of net lease investment are recorded in the currentprofits and losses when they actually occur.

If the finance lease changes and meets the following conditions at the same time, the Company will treat the

change as a separate lease for accounting treatment:

The change expands the lease scope by increasing one or more right of use of the leased assets;The increased consideration and the separate price for the extension portion of the lease shall be equivalent to theamount adjusted according to the contract.

If the change of finance lease is not regarded as a separate lease for accounting treatment, the Company willtreat the changed lease as follows:

If the change takes effective on the commencement date of the lease, the lease will be classified as an operatinglease, and the Company will take it as a new lease for accounting treatment as of the effective date of the leasechange, and take the net lease investment before the effective date of the lease change as the book value of theleased asset;

If the change takes effective on the commencement date of the lease, the lease will be classified as a finance lease,and the Company will comply with the policies on modification or renegotiation of contract in Notes "9. FinancialInstruments" for accounting treatment.

Accounting policy before 1 Jan. 2021

(1)Assets lease-in by financing: On the beginning date of the lease, the entry value of leased asset shall be at 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.

31. Other important accounting policy and estimation

Safety production expensesThe safety production expenses drawn by the Company in accordance with the national regulations are included inthe cost of relevant products or the current profit and loss, and are recorded in the “special reserve” account. When

using 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.

32. Changes of important accounting policy and estimation

(1)Changes of important accounting policies

√ Applicable □ Not applicable

Content & reasonsApproval procedureNote

32.1Changes of important accounting estimate

(1) Implementation of the Accounting Standards for Business Enterprises No. 21 - Lease (2018 Revision)The Ministry of Finance revised the Accounting Standards for Business Enterprises No. 21 -- Lease ("New LeaseStandards" for short) in 2018. The Company has implemented the new lease standards from January 1, 2021.According to the revised standards, the company chooses not to re-evaluate whether they are leases or includeleases on the first execution date for contracts that already exist prior to the first execution date.· The Company acts as the lesseeThe Company chooses to adjust the amount of retained earnings and other relevant items in its financialstatements at the beginning of the year of the first implementation of the new lease standards based on thecumulative impact of the first implementation of the new lease standards, without adjusting the comparable periodinformation.For an operating lease existing prior to the first execution date, the Company shall measure the lease liabilities atthe first execution date based on the present value of the remaining lease payment discounted at the incrementalborrowing rate of the Company at the first execution date, and measure the right-of-use assets according to one ofthe following two ways for each lease:

Assume that the book value of the new lease standards is adopted on the start date of the lease term and theCompany's incremental borrowing rate on the first execution date is used as the discount rate.Make necessary adjustments to the prepaid rent for the amount equal to the lease liability.For operating leases prior to the first execution date, the Company may choose one or more of the followingsimplified treatments for each lease in conjunction with the above method:

1) The leases completed within 12 months after the first execution date shall be treated as short-term leases;

2) When measuring lease liabilities, leases with similar features shall use the same discount rate;

3) The measurement of the right-of-use assets does not include the initial direct cost;

4) Where there is an option to renew or terminate the lease, the lease term shall be determined according to theactual exercise of the option prior to the first exercise and other latest conditions;

5) As an alternative to the impairment test of the right-of-use asset, assess whether the contract containing thelease is a loss contract prior to the first execution date in accordance with the Notes "25. Estimated Liabilities"and adjust the right-of-use asset according to the amount of loss provisions recorded in the balance sheet prior tothe first execution date;

6) The lease changes occurring before the first execution date shall not be retroactively adjusted, and theaccounting treatment shall be conducted in accordance with the final arrangement of lease changes and the newlease standards.

For the finance lease existing before the first execution date, the Company shall measure the right-of-use assetsand lease liabilities respectively on the first execution date according to the original book value of the financelease assets and the finance lease payments payable.· The Company acts as the lessorFor the subleases classified as operating leases prior to the first execution date and surviving after the firstexecution date, the Company will re-evaluate them on the first execution date on the basis of the remainingcontract term and terms of the original lease and the sublease, and classify them in accordance with the provisionsof the new lease standards. If they are reclassified as finance leases, the Company will treat them as new financeleases.Except for subleases, the Company does not need to adjust the leases on which it is the lessor in accordance withthe new lease standards. The company shall conduct accounting treatment in accordance with the new leasestandards from the first execution date.The main effects of the Company's implementation of the new lease standards on the financial statements are asfollows:

Content and reasons for changes in accounting policiesStatement items affectedImpact on the amount on balance as of 1 Jan. 2021
ConsolidateParent company
As a lessee, the adjustment of the operating leases existing before the date of fist execution
Right-of-use assets2,329,027.97
Lease liability2,329,027.97

(2) Implementation of the "Interpretation No. 14 of Accounting Standards for Business Enterprises"The Ministry of Finance promulgated the "Interpretation No. 14 of Accounting Standards for BusinessEnterprises" (CK[2021] No. 1, hereinafter referred to as "Interpretation No. 14") on February 2, 2021, which hastaken effect as of the date of promulgation. The relevant business added from January 1, 2021 to the effective dateshall be adjusted according to Interpretation No. 14.

① Public-private partnership (PPP) project contracts

Interpretation No. 14 is applicable for the PPP project contracts that meet the "dual features" and "doublecontrols" described in the interpretation at the same time, and makes retroactive adjustment on the relevant PPP

project contracts that have been implemented before December 31, 2020 and have not been completed up to theimplementation date, where the retroactive adjustment is not feasible, the application begins at the beginning ofthe earliest period of retroactive adjustment, cumulative impact adjusts the retained earnings at the beginning ofthe year of the implementation date and other related items in the financial statements, and information ofcomparable periods shall not be adjusted. The implementation of the provisions does not have a significant impacton the Company's financial situation and operating results.

② Interest rate benchmark reform

Interpretation No. 14 provides a simplified accounting treatment for cases where the basis for determining cashflows related to financial instrument contracts and lease contracts is changed as a result of the interest ratebenchmark reform.

According to the provisions of this interpretation, businesses related to the interest rate benchmark reformoccurring before December 31, 2020 shall be subject to retroactive adjustment, except where retroactiveadjustment is not feasible, and there is no need to adjust the data in the previous comparative financial statements.On the implementation date of this interpretation, the difference between the original carrying value of financialassets and financial liabilities and the new carrying value shall be included in the retained earnings or othercomprehensive income at the beginning of the annual reporting period of the implementation date of thisinterpretation. The implementation of the provisions does not have a significant impact on the Company'sfinancial situation and operating results.

(3) Execution of the “Notice on the Adjustment of the Scope of Application of the Provisions on the AccountingTreatment of COVID-19 Related Rent Concessions”On June 19, 2020, the Ministry of Finance issued the "Regulations on Accounting Treatment of RentalConcessions Related to the COVID-19 Epidemic" (CK (2020) No. 10), and enterprises can choose to adoptsimplified methods for accounting treatments for rent concessions and deferred payment of rents directly causedby the COVID-19 epidemic that meet the conditions.

On May 26, 2021, the Ministry of Finance promulgated the Notice on the Adjustment of the Scope of Applicationof the Provisions on the Accounting Treatment of COVID-19 Related Rent Concessions (CK [2021] No. 9), whichhas taken effective from May 26, 2021, the scope of application of COVID-19 pandemic-related rent concessionswhich are allowed to adopt the simplified method under the Provisions on the Accounting Treatment ofCOVID-19 Related Rent Concessions is adjusted from the "the concession applies only to lease payments payablebefore 30 June 2021" to "the concession only applies to lease payments payable before 30 June 2022" to "theconcession only applies to lease payments payable before 30 June 2022", and other conditions remain unchanged.

The Company has selected the simplified accounting treatment method for all the eligible lease contracts beforethe adjustment of scope of application, and adopted the simplified accounting treatment method for all the eligible

and similar lease contracts after the adjustment of scope of application, and made retroactive adjustment onrelevant lease contracts that had adopted lease change for accounting treatment before the release of the notice,but did not adjust the data of the previous comparative financial statement; The relevant rent concessions incurredbetween January 1, 2021 and the effective date of the notice of which accounting treatment are not conducted inaccordance with the provisions of the notice shall be adjusted in accordance with the notice.

32.2Adjustment on the items of financial statements at beginning of the year when first exercise the newlease standards

Consolidate balance sheet

ItemBalance at end of last yearBalance at beginning of the yearNumber adjusted
Re-classifiedRe-measuredTotal
Right-of-use assets2,329,027.972,329,027.972,329,027.97
Lease liability2,329,027.972,329,027.972,329,027.97

(2) Changes of important accounting estimate

□ Applicable √ Not applicable

(3)Adjustment on the relevant items of financial statement at beginning of the year when implemented thenew leasing standards since 2021ApplicableWhether to adjust the items of balance sheet at the beginning of the year

√Yes □No

Consolidate balance sheet

In RMB

Item2020-12-312021-01-01Adjustments
Current assets:
Monetary fund190,494,225.94190,494,225.94
Settlement provisions
Capital lent
Trading financial assets160,621,806.51160,621,806.51
Derivative financial assets
Note receivable2,213,426.002,213,426.00
Account receivable198,311,102.17198,311,102.17
Account receivable financing
Accounts paid in advance27,136,263.8427,136,263.84
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance receivable
Other account receivable22,631,043.6622,631,043.66
Including: Interest receivable
Dividend receivable
Buying back the sale of financial assets
Inventory3,418,328,974.273,418,328,974.27
Contract asset
Assets held for sale
Non-current asset due within one year
Other current assets119,750,603.31119,750,603.31
Total current assets4,139,487,445.704,139,487,445.70
Non-current assets:
Loans and payments on behalf
Creditors’ investment
Other creditors’ investment
Long-term account receivable
Long-term equity investment73,215,147.8473,215,147.84
Other equity instrument investment
Other non-current financial assets57,500.0057,500.00
Investment real estate253,037,899.57253,037,899.57
Fix assets1,122,692,490.551,122,692,490.55
Construction in progress1,045,643,295.571,045,643,295.57
Productive biological asset387,694.20387,694.20
Oil and gas asset
Right-of-use asset2,329,027.972,329,027.97
Intangible assets599,306,223.04599,306,223.04
Expense on Research and Development
Goodwill
Long-term expenses to be apportioned31,732,325.0131,732,325.01
Deferred income tax assets41,347,952.1241,347,952.12
Other non-current assets2,476,174.332,476,174.33
Total non-current assets3,169,896,702.233,172,225,730.202,329,027.97
Total assets7,309,384,147.937,311,713,175.902,329,027.97
Current liabilities:
Short-term loans110,318,727.12110,318,727.12
Loan from central bank
Capital borrowed
Tradable financial liability
Derivative financial liability
Note payable
Account payable480,896,517.64480,896,517.64
Accounts received in advance3,376,262.663,376,262.66
Contract liabilities108,975,866.82108,975,866.82
Selling financial asset of repurchase
Absorbing deposit and
interbank deposit
Security trading of agency
Security sales of agency
Wage payable260,514,559.66260,514,559.66
Taxes payable66,904,735.2966,904,735.29
Other account payable397,325,719.50397,325,719.50
Including: Interest payable
Dividend payable2,933,690.042,933,690.04
Commission charge and commission payable
Reinsurance payable
Liability held for sale
Non-current liabilities due within one year104,225,183.07104,225,183.07
Other current liabilities7,250,420.687,250,420.68
Total current liabilities1,539,787,992.441,539,787,992.44
Non-current liabilities:
Insurance contract reserve
Long-term loans841,864,531.75841,864,531.75
Bonds payable
Including: preferred stock
Perpetual capital securities
Lease liability2,329,027.972,329,027.97
Long-term account payable16,126,146.2016,126,146.20
Long-term wage payable
Accrual liabilities3,500,000.003,500,000.00
Deferred income100,710,038.32100,710,038.32
Deferred income tax liabilities12,150,035.1312,150,035.13
Other non-current liabilities
Total non-current liabilities974,350,751.40976,679,779.372,329,027.97
Total liabilities2,514,138,743.842,516,467,771.812,329,027.97
Owners’ equity:
Share capital1,152,535,254.001,152,535,254.00
Other equity instrument
Including: preferred stock
Perpetual capital securities
Capital public reserve1,422,892,729.361,422,892,729.36
Less: Inventory shares
Other comprehensive income
Reasonable reserve
Surplus public reserve382,367,575.37382,367,575.37
Provision of general risk
Retained profit1,637,536,441.031,637,536,441.03
Total owner’s equity attributable to parent company4,595,331,999.764,595,331,999.76
Minority interests199,913,404.33199,913,404.33
Total owner’s equity4,795,245,404.094,795,245,404.09
Total liabilities and owner’s equity7,309,384,147.937,311,713,175.902,329,027.97

Explanation on adjustment

Balance sheet of parent company

In RMB

Item2020-12-312021-01-01Adjustments
Current assets:
Monetary fund5,312,806.715,312,806.71
Trading financial assets621,806.51621,806.51
Derivative financial assets
Note receivable
Account receivable4,087,681.184,087,681.18
Account receivable financing
Accounts paid in advance
Other account receivable892,105,968.23892,105,968.23
Including: Interest receivable
Dividend receivable390,000,000.00390,000,000.00
Inventory
Contract asset
Assets held for sale
Non-current asset due within one year
Other current assets1,497,597.501,497,597.50
Total current assets903,625,860.13903,625,860.13
Non-current assets:
Creditors’ investment
Other creditors’ investment
Long-term account receivable
Long-term equity investment3,707,714,425.093,707,714,425.09
Other equity instrument investment
Other non-current financial assets
Investment real estate16,986,504.0416,986,504.04
Fix assets33,125,275.6533,125,275.65
Construction in progress
Productive biological asset387,694.20387,694.20
Oil and gas asset
Right-of-use asset
Intangible assets12,842,693.9812,842,693.98
Expense on Research and Development
Goodwill
Long-term expenses to be apportioned1,040,708.201,040,708.20
Deferred income tax assets
Other non-current assets
Total non-current assets3,772,097,301.163,772,097,301.16
Total assets4,675,723,161.294,675,723,161.29
Current liabilities:
Short-term loans
Tradable financial liability
Derivative financial liability
Note payable
Account payable
Accounts received in advance
Contract liabilities411.00411.00
Wage payable26,535,794.3126,535,794.31
Taxes payable2,736,075.652,736,075.65
Other account payable45,560,514.8245,560,514.82
Including: Interest payable
Dividend payable
Liability held for sale
Non-current liabilities due within one year
Other current liabilities
Total current liabilities74,832,795.7874,832,795.78
Non-current liabilities:
Long-term loans
Bonds payable
Including: preferred stock
Perpetual capital securities
Lease liability
Long-term account payable
Long-term wage payable
Accrual liabilities3,500,000.003,500,000.00
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities3,500,000.003,500,000.00
Total liabilities78,332,795.7878,332,795.78
Owners’ equity:
Share capital1,152,535,254.001,152,535,254.00
Other equity instrument
Including: preferred stock
Perpetual capital securities
Capital public reserve3,018,106,568.273,018,106,568.27
Less: Inventory shares
Other comprehensive income
Reasonable reserve
Surplus public reserve109,963,147.23109,963,147.23
Retained profit316,785,396.01316,785,396.01
Total owner’s equity4,597,390,365.514,597,390,365.51
Total liabilities and owner’s equity4,675,723,161.294,675,723,161.29

Explanation on adjustment

(4) Retrospective adjustment of early comparison data description when implemented the new leasingstandards since 2021

□ Applicable √ Not applicable

33.Others

N/AVI. Taxes

1. Type of tax and rate for main applicable tax

TaxesBasisRate
VATThe 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%, 9% ,6%, 5%, 3%
Urban maintenance and construction taxCalculated according to the actual value-added tax and consumption tax5%, 7%
Enterprise income taxCalculated according to taxable income25%, 15%, 10%, 5%
Educational surtaxCalculated according to the actual value-added tax and consumption tax3%
Local education surchargeCalculated according to the actual value-added tax and consumption tax2%
Property taxPrice-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%
Deed taxWhen 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 sum3%-5%

Rate of income tax for different taxpaying body:

Taxpaying bodyRate of income tax
Shenzhen Cereals Holdings Co., Ltd.25%
Shenzhen Cereals Group Co., Ltd. (hereinafter referred to as "SZCG")25%, Some businesses are tax-free
Shenzhen Hualian Grain & Oil Trade Co., Ltd. (hereinafter referred to as "Hualian Cereals and Oil")25%
Dongguan Hualian Grain & Oil Trade Co., Ltd. (hereinafter referred to as "Dongguan Hualian ")25%
Shenzhen Flour Co., Ltd. (hereinafter referred to as "Shenzhen Flour")Tax-free
Shenliang Quality Inspection Co., Ltd. (hereinafter referred to as "Shenliang Quality Inspection ")5%
Hainan Shenliang Oil & Food Co., Ltd. (hereinafter referred to as "Hainan Oil & Food")5%
Shenliang Doximi Business Co., Ltd. (hereinafter referred to as "Doximi")25%
Shenzhen Shenliang Big Kitchen Food Supply Chain Co., Ltd(hereinafter referred to as "Big Kitchen ")25%
Shenzhen Shenliang Storage (Yingkou) Co., Ltd. (hereinafter referred to as "Yingkou Storage")25%
Shenzhen Shenliang Cold Chain Logistics Co., Ltd. (hereinafter referred to as "Cold Chain Logistics")15%
Shenzhen Shenliang Property Development Co., Ltd. (hereinafter referred to as " Shenliang Property")25%
Shenzhen Shenliang Property Management Co., Ltd. (hereinafter referred to as "Shenliang Property")5%
Dongguan Shenliang Logistics Co., Ltd. (hereinafter referred to as "Dongguan Logistics")25%
Dongguan International Food Industrial Park Development Co., Ltd. (hereinafter referred to as "International Food")25%
Dongguan Shenliang Oil & Food Trade Co., Ltd. (hereinafter referred to as "Dongguan Oil & Food")25%
Shuangyashan Shenliang Zhongxin Cereals Base Co., Ltd.25%
(hereinafter referred to as "Shuangyashan")
Heilongjiang Hongxinglong Nongken Shenxin Cereals Industrial Park Co., Ltd. (hereinafter referred to as " Hongxinglong")25%
Shenzhen Shenbao Huacheng Science and Technology Co., Ltd. (hereinafter referred to as "Shenbao Huacheng")25%
Wuyuan Ju Fang Yong Tea Industry Co., Ltd.(hereinafter referred to as "Wuyuan Ju Fang Yong")25%
Shenzhen Shenshenbao Investment Co., Ltd. (hereinafter referred to as "Shenbao Investment")25%
Shenzhen Shenshenbao Tea Culture Commercial Management Co., Ltd. (hereinafter referred to as "Shenbao Tea Culture")25%
Hangzhou Ju Fang Yong Holding Co., Ltd (hereinafter referred to as "Ju Fang Yong Holding ")25%
Hangzhou Ju Fang Yong Trading Co., Ltd. (hereinafter referred to as "Ju Fang Yong Trading ")25%
Hangzhou Fuhaitang Catering Management Chain Co., Ltd. (hereinafter referred to as "Fuhaitang Catering")25%
Hangzhou Fuhaitang Tea Ecological Technology Co., Ltd. (hereinafter referred to as "Fuhaitang Ecological")25%
Mount Wuyi Shenbao Rock Tea Co., Ltd. (hereinafter referred to as "Shenbao Rock Tea")25%
Yunnan Shenbao Pu’er Tea Supply Chain Management Co., Ltd. (hereinafter referred to as "Pu’er Tea Supply Chain")25%
Shenzhen Shenliang Food Co., Ltd. (hereinafter referred to as "Shenliang Food ")25%
Yunnan Pu’er Tea Trading Center Co., Ltd. (hereinafter referred to as "Pu’er Tea Trading Center")25%
Huizhou Shenbao Food Co., Ltd. (hereinafter referred to as "Shenbao Food")25%
Huizhou Shenbao Technology Co., Ltd. (hereinafter referred to as "Huizhou Shenbao")25%
Shenzhen Shenbao Property Management Co., Ltd. (hereinafter referred to as "Shenbao Property")10%
Shenzhen Shenbao Technology Center Co., Ltd. (hereinafter referred to as "Shenbao Technology")25%
Shenzhen Shenbao Industrial & Trading Co., Ltd. (hereinafter referred to as "Shenbao Industry and Trade")25%
Shenzhen Shenliang Hongjun Catering Management Co., Ltd.25%

2. Tax preferential

2.1 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 enterprises thatundertake grain collection and storage tasks for Shenzhen, the grain sold is subject to tax-free declaration by ruleand enjoys the exemption from VAT. In addition, according to the stipulation of the “Announcement of StateAdministration of Taxation on Relevant Management Matters After Clarifying the Cancellation of the Approval ofSome VAT Preferential Policies” (SAT Announcement 2015 No. 38), the approval for exemption from VAT andthe involved tax review and approval procedures for the state-owned grain enterprises that undertake graincollection and storage tasks, other grain enterprises that operate tax-free projects and enterprises that have ediblevegetable oil sales business for government reserves are cancelled and changed to record management. Thetaxpayer does not change the content of the record materials during the period of tax exemption can be put on aone-time record. In December 2013, SZCG obtained the notice of the VAT preferential record (SGSFJBM [2013]No.2956) from Shenzhen Futian State Administration of Taxation. In the case of no change in policy, this limitedfiling period started on January 1

st, 2014.The VAT input tax amount of the preferential item was separatelyaccounted for, and the input VAT calculation method cannot be changed within 36 months after the selection. Asof December 31, 2018, the tax exemption policy has been in effect since its filing in 2014, and the company’s VATinput tax has not changed since it was accounted for separately in 2014, so the company continues to enjoy the taxpreference.

2.2 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.

2.3 Enterprise income tax

(1) According to the “Notice on the Issues Concerning the Treatment of Corporate Income Taxes for Fiscal Funds

of 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.

(2) Shenzhen Flour, a subsidiary of the Company, is a flour primary processing enterprise, according to thestipulations of the “Notice on Issuing the Scope (Trial) of Primary Processing of Agricultural Products Applicableto the Corporate Income Tax Preferential Policy (CS [2008] No. 149)” and the “Supplementary Notice on theScope of Primary Processing of Agricultural Products Applicable to the Corporate Income Tax Preferential Policyof the Ministry of Finance and the State Administration of Taxation” (CS [2011] No. 26), the wheat primaryprocessing is exempt from income tax.

(3) According to Article 1, CS [2021] No. 30 of the Notice on the Extension of Preferential Policies of EnterpriseIncome Tax of Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone in Shenzhen, theenterprise income tax of qualified enterprises located in Qianhai Shenzhen-Hong Kong Modern Service IndustryCooperation Zone is levied at the rate of 15.00%. The Company's subsidiary cold chain logistics is registered inShenzhen Qianhai Cooperation Zone, which is eligible for preferential tax conditions. According to relevantpolicies of the cooperation zone, its income tax will enjoy a preferential tax of 15.00%, and the preferential taxpolicy will end on December 31, 2025.

(4) 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

Nil

VII. Annotation to main items of consolidated financial statements

1. Monetary funds

In RMB/CNY

ItemEnding balanceOpening balance
Cash on hand100,315.0362,642.11
Cash in bank67,609,744.07189,169,821.01
Other monetary fund1,064,024.011,261,762.82
Total68,774,083.11190,494,225.94

Other explanationThe Company did not has account pledge, freeze or has potential risks in collection ended as 30 June 2021.

2. Tradable financial assets

In RMB/CNY

ItemEnding balanceOpening balance
Financial assets measured by fair value and with variation reckoned into current gains/losses910,778.83160,621,806.51
Including:
Structured financial products160,000,000.00
Equity investment instrument910,778.83621,806.51
Including:
Total910,778.83160,621,806.51

Other explanation:

3. Note receivable

(1) Category

In RMB/CNY

ItemEnding balanceOpening balance
Bank acceptance bill694,376.002,213,426.00
Total694,376.002,213,426.00

In RMB/CNY

CategoryEnding balanceOpening balance
Book balanceBad debtBookBook balanceBad debt provisionBook
provisionvaluevalue
AmountRatioAmountAccrual ratioAmountRatioAmountAccrual ratio
Including:
Including:

Bad debt provision accrual on single basis:

In RMB/CNY

NameEnding balance
Book balanceBad debt provisionAccrual ratioAccrual causes

Bad debt provision accrual on portfolio:

In RMB/CNY

NameEnding balance
Book balanceBad debt provisionAccrual 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 referto the disclosure of other account receivables to disclose related information about bad-debt provisions:

□ Applicable √Not applicable

4. Account receivable

(1) Category

In RMB/CNY

CategoryEnding balanceOpening balance
Book balanceBad debt provisionBook valueBook balanceBad debt provisionBook value
AmountRatioAmountAccrual ratioAmountRatioAmountAccrual ratio
Account receivable with bad debt provision accrual on a single basis99,461,835.1912.24%96,675,238.6397.20%2,786,596.5699,461,835.1933.33%96,675,238.6397.20%2,786,596.56
Including:
Account receivable with single significant amount and withdrawal bad debt provision on single basis10,455,627.541.29%10,455,627.54100.00%10,455,627.543.50%10,455,627.54100.00%
Account receivable with single minor amount but with bad debts provision accrued on a single basis89,006,207.6510.95%86,219,611.0996.87%2,786,596.5689,006,207.6529.83%86,219,611.0996.87%2,786,596.56
Account receivable with bad debt provision accrual on portfolio713,078,324.2687.76%3,423,481.810.48%709,654,842.45198,936,140.2966.67%3,411,634.681.71%195,524,505.61
Including:
Combination of sales receivables279,222,500.8234.46%3,423,481.811.23%275,799,019.01123,378,031.8341.35%3,411,634.682.77%119,966,397.15
Specific object combinations433,855,823.4453.40%433,855,823.4475,558,108.4625.32%75,558,108.46
Total812,540,159.45100.00%100,098,720.4412.32%712,441,439.01298,397,975.48100.00%100,086,873.3133.54%198,311,102.17

Bad debt provision accrual on single basis:

In RMB/CNY

NameEnding balance
Book balanceBad debt provisionAccrual ratioAccrual causes
Guangzhou Jinhe Feed Co., Ltd10,455,627.5410,455,627.54100.00%Slightly possibly taken back
Shenzhen Faqun Industry Co., Ltd.4,582,156.004,582,156.00100.00%Slightly possibly taken back
Li Shaoyu owes for goods2,929,128.532,929,128.53100.00%Slightly possibly taken back
Hengyang Feed factory2,591,566.652,591,566.65100.00%Slightly possibly taken back
Zhuhai Doumen Huabi Feed Co., Ltd.2,396,327.142,396,327.14100.00%Slightly possibly taken back
Chongqing Zhongxing Food Industry Co., Ltd.2,354,783.302,354,783.30100.00%Slightly possibly taken back
Shenzhen Buji Agricultural Products Wholesale Center1,534,512.451,534,512.45100.00%Slightly possibly taken back
Market Xingmin Commercial Bank
Cao Shengyun1,429,745.001,429,745.00100.00%Slightly possibly taken back
Huaxing Feed Factory, Shunde District, Foshan City1,290,274.221,290,274.22100.00%Slightly possibly taken back
Shanghai office1,059,295.901,059,295.90100.00%Slightly possibly taken back
Shenzhen Dihuan Investment Development Company1,045,356.501,045,356.50100.00%Slightly possibly taken back
Other single provision67,793,061.9665,006,465.4095.89%Slightly possibly taken back
Total99,461,835.1996,675,238.63----

Bad debt provision accrual on single basis:

In RMB/CNY

NameEnding balance
Book balanceBad debt provisionAccrual ratioAccrual causes

Bad debt provision accrual on portfolio:

In RMB/CNY

NameEnding balance
Book balanceBad debt provisionAccrual ratio
Combination of sales receivables279,222,500.823,423,481.811.23%
Specific object combinations433,855,823.44
Total713,078,324.263,423,481.81--

Explanation on portfolio determines:

Bad debt provision accrual on portfolio:

In RMB/CNY

NameEnding balance
Book balanceBad debt provisionAccrual 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/CNY

Account ageEnding balance
Within one year (including 1-year)709,154,553.26
1-2 years1,997,698.44
2-3 years4,291,591.73
Over 3 years97,096,316.02
3-4 years997,736.66
4-5 years796,616.58
Over 5 years95,301,962.78
Total812,540,159.45

(2) Bad debt provision accrual, collected or reversal in the period

Bad debt provision accrual in the period:

In RMB/CNY

CategoryOpening balanceAmount changed in the periodEnding balance
AccrualCollected or reversalWritten-offOther
Bad debt provision accrual on single basis96,675,238.6396,675,238.63
Sales receivable3,411,634.6811,847.133,423,481.81
Total100,086,873.3111,847.13100,098,720.44

Including major amount bad debt provision that collected or reversal in the period:

In RMB/CNY

EnterpriseAmount collected or reversalCollection way

Nil

(3) Top 5 account receivables at ending balance by arrears party

In RMB/CNY

EnterpriseEnding balance of accounts receivableProportion in total receivables at ending balanceBad debt preparation ending balance
First433,676,208.6053.37%
Second116,537,624.8114.34%1,165,376.25
Third47,968,235.575.90%479,682.36
Fourth15,645,347.201.93%156,453.47
Fifth11,998,839.551.48%119,988.40
Total625,826,255.7377.02%

5. Accounts paid in advance

(1) By account age

In RMB/CNY

Account ageEnding balanceOpening balance
AmountRatioAmountRatio
Within one year74,621,066.0698.51%26,384,747.1397.23%
1-2 years990,625.121.31%616,328.732.27%
2-3 years62,060.020.08%61,695.870.23%
Over 3 years74,655.370.10%73,492.110.27%
Total75,748,406.57--27,136,263.84--

Explanation on reasons of failure to settle on important account paid in advance with age over one year:

(2) Top 5 account paid in advance at ending balance by prepayment object

Prepaid objectsEnding balanceProportion in of total prepayment balance at the end of period (%)
First51,099,594.0567.46
Second6,098,013.758.05
Three4,806,333.756.35
Fourth2,120,000.002.80
Fifth1,794,973.442.37
Total65,918,914.9987.03

Other explanation:

6. Other account receivable

In RMB/CNY

ItemEnding balanceOpening balance
Other account receivable18,588,482.6222,631,043.66
Total18,588,482.6222,631,043.66

(3) Other account receivable

1) By nature

In RMB/CNY

NatureEnding book balanceOpening book balance
Margin and deposit5,419,081.2414,965,660.96
Other intercourse funds110,917,774.74105,459,789.74
Total116,336,855.98120,425,450.70

2) Accrual of bad debt provision

In RMB/CNY

Bad debt provisionPhase IPhase IIPhase IIITotal
Expected credit losses over next 12 monthsExpected 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, 20212,380,495.4295,413,911.6297,794,407.04
Balance of Jan. 1, 2021 in the period————————
Current accrual-266,212.27220,207.77-46,004.50
Current write-off29.1829.18
Balance on Jun. 30, 20212,114,253.9795,634,119.3997,748,373.36

Change of book balance of loss provision with amount has major changes in the period

□ Applicable √Not applicable

By account age

In RMB/CNY

Account ageEnding balance
Within one year (including 1-year)15,684,570.95
1-2 years3,946,102.73
2-3 years1,048,008.68
Over 3 years95,658,173.62
3-4 years1,329,095.17
4-5 years683,347.93
Over 5 years93,645,730.52
Total116,336,855.98

3) Bad debt provision accrual, collected or reversal in the period

Bad debt provision accrual in the period:

In RMB/CNY

CategoryOpening balanceAmount changed in the periodEnding balance
AccrualCollected or reversalWritten offOther
Bad debt provision accrual on single basis95,413,911.62220,207.7795,634,119.39
Bad debt provision accrual on portfolio2,380,495.42-266,212.2729.182,114,253.97
Total97,794,407.04-46,004.5029.1897,748,373.36

Including major amount with bad debt provision reverse or collected in the period:

In RMB/CNY

EnterpriseAmount reversal or collectedCollection way

4) Top 5 other receivables at ending balance by arrears party

In RMB/CNY

EnterpriseNatureEnding balanceAccount ageRatio in total ending balance of other account receivablesBad debt preparation ending balance
FirstIntercourse funds24,384,884.84Over 5 years20.96%21,963,786.56
SecondIntercourse funds8,326,202.63Over 5 years7.16%8,326,202.63
ThreeIntercourse funds8,285,803.57Over 5 years7.12%8,285,803.57
FourthIntercourse funds5,677,473.59Over 5 years4.88%5,677,473.59
FifthIntercourse funds5,602,468.81Over 5 years4.82%5,602,468.81
Total--52,276,833.44--44.94%49,855,735.16

7. Inventories

Whether companies need to comply with the disclosure requirements of the real estate industryNo

(1) Category

In RMB/CNY

ItemEnding balanceOpening balance
Book balanceInventories fall provision or contract performance costs impairment provisionBook valueBook balanceInventories fall provision or contract performance costs impairment provisionBook value
Raw materials76,395,063.8016,559,251.3259,835,812.4868,152,781.1216,559,251.3251,593,529.80
Inventory goods4,135,095,644.49111,536,919.084,023,558,725.413,431,982,588.15110,146,694.453,321,835,893.70
Revolving material1,785,312.27887,023.20898,289.075,614,055.57887,023.204,727,032.37
Goods in transit7,350,107.957,350,107.957,582,654.137,582,654.13
Consignment processing materials6,095,792.035,290,502.32805,289.715,388,478.795,290,502.3297,976.47
Semi-finished products29,487,509.6129,487,509.6127,672,374.1327,672,374.13
Low-value consumables-packaging8,315,234.638,315,234.634,819,513.674,819,513.67
Total4,264,524,664.78134,273,695.924,130,250,968.863,551,212,445.56132,883,471.293,418,328,974.27

(2) Inventories fall provision or contract performance costs impairment provision

In RMB/CNY

ItemOpening balanceCurrent amount increasedCurrent amount decreasedEnding balance
AccrualOtherReversal or write-offOther
Raw materials16,559,251.3216,559,251.32
Inventory goods110,146,694.45111,448,173.12110,057,948.49111,536,919.08
Revolving material887,023.20887,023.20
Consignment processing materials5,290,502.325,290,502.32
Total132,883,471.29111,448,173.12110,057,948.49134,273,695.92

8. Other current assets

In RMB/CNY

ItemEnding balanceOpening balance
Financial products20,000,000.0010,000,000.00
Other
Input tax to be deducted106,719,728.35109,023,326.25
Prepaid enterprise income tax727,277.06
Total126,719,728.35119,750,603.31

Other explanation:

9. Long-term equity investment

In RMB/CNY

The invested entityOpening balance (book value)Current changes (+,-)Ending balance (book value)Ending balance of impairment provision
Additional investmentCapital reductionInvestment gains recognized under equityOther comprehensive income adjustmentOther equity changeCash dividend or profit announced to issuedAccrual of impairment provisionOther
I. Joint venture
II. Associated enterprise
Zhuhai Hengxing Feed Industrial Co., Ltd.33,002,039.62324,998.5833,327,038.20
Shenzhen Duoxi Equity Investm3,359,601.93-185,548.733,174,053.20
ent Fund Management Co., Ltd.
Shenliang Intelligent Wulian Equity Investment Fund (Shenzhen) Partnership Enterprise (Limited)26,255,667.98-109,515.5226,146,152.46
Shenzhen Shenyuan Data Tech. Co., Ltd10,597,838.31410,245.3411,008,083.65
Shenzhen Shenbao (Liaoyuan) Industrial Co., Ltd.57,628.53
Shenzhen Shenbao2,870,000.00
(Xinmin) Foods Co., Ltd.
Changzhou Shenbao Chacang E-business Co., Ltd.
Shenzhen Shichumingmen Restaurant Management Co., Ltd.
Subtotal73,215,147.84440,179.6773,655,327.512,927,628.53
Total73,215,147.84440,179.6773,655,327.512,927,628.53

Other explanation

10. Other non-current financial assets

In RMB/CNY

ItemEnding balanceOpening balance
Financial assets measured at fair value and whose changes are included in the current profit and loss
Including: Debt instrument investment
Equity instrument investment57,500.0057,500.00
Total57,500.0057,500.00

Other explanation:

11. Investment real estate

(1) Measured at cost

√ Applicable □Not applicable

In RMB/CNY

ItemHouse and buildingLand use rightConstruction in progressTotal
I. Original book value
1.Opening balance590,440,328.15590,440,328.15
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 balance590,440,328.15590,440,328.15
II. Accumulated depreciation and accumulated amortization
1.Opening balance337,402,428.58337,402,428.58
2.Current amount increased8,190,545.208,190,545.20
(1) Accrual or amortization8,190,545.208,190,545.20
3.Current amount decreased
(1) Disposal
(2) Other transfer-out
4.Ending balance345,592,973.78345,592,973.78
III. Impairment provision
1.Opening balance
2.Current amount increased
(1) Accrual
3. Current amount decreased
(1) Disposal
(2) Other transfer-out
4.Ending balance
IV. Book value
1.Ending book value244,847,354.37244,847,354.37
2. Opening book value253,037,899.57253,037,899.57

12. Fixed assets

In RMB/CNY

ItemEnding balanceOpening balance
Fixed assets1,339,289,781.071,122,692,490.55
Fixed assets disposal15,710.00
Total1,339,305,491.071,122,692,490.55

(1) Fixed assets

In RMB/CNY

ItemHouse and buildingsMachinery equipmentTransport equipmentElectronic and other equipmentTotal
I. Original book value:
1.Opening1,039,002,914.64532,316,124.3617,662,383.7468,287,685.821,657,269,108.56
balance
2.Current amount increased206,859,963.7720,609,099.5337,536.1621,125,146.53248,631,745.99
(1) Purchase849,283.5837,536.1614,161,752.4515,048,572.19
(2) Construction in progress transfer-in206,859,963.7719,759,815.956,963,394.08233,583,173.80
(3) Increased by combination
3.Current amount decreased810,115.28586,965.42641,148.212,038,228.91
(1) Disposal or scrap810,115.28586,965.42641,148.212,038,228.91
4.Ending balance1,245,862,878.41552,115,108.6117,112,954.4888,771,684.141,903,862,625.64
II. Accumulated depreciation
1.Opening balance217,598,012.04255,179,025.4612,517,697.6444,323,543.85529,618,278.99
2.Current amount increased14,397,576.8411,888,234.19694,122.184,650,771.7031,630,704.91
(1) Accrual14,397,576.8411,888,234.19694,122.184,650,771.7031,630,704.91
3.Current amount decreased729,103.75329,065.00576,309.601,634,478.35
(1) Disposal or scrap729,103.75329,065.00576,309.601,634,478.35
4.Ending balance231,995,588.88266,338,155.9012,882,754.8248,398,005.95559,614,505.55
III. Impairment provision
1.Opening balance689,332.714,259,116.449,889.874,958,339.02
2.Current
amount increased
(1) Accrual
3.Current amount decreased
(1) Disposal or scrap
4.Ending balance689,332.714,259,116.449,889.874,958,339.02
IV. Book value
1.Ending book value1,013,177,956.82281,517,836.274,230,199.6640,363,788.321,339,289,781.07
2. Opening book value820,715,569.89272,877,982.465,144,686.1023,954,252.101,122,692,490.55

(2) Fix assets without property certification held

In RMB/CNY

ItemBook valueReasons for without the property certification
House buildings88,736,008.62Still under processing
House buildings15,188,788.28At present, the relevant application and approval procedures are being started.
House buildings10,588,288.49Simple and temporary buildings etc, cannot handle the property right certificate
House buildings1,178,284.70Simple and temporary buildings etc, cannot handle the property right certificate
House buildings102,533,049.08Berth of wharf has right of use, no need to handle the certificate
House buildings154,683,436.23Berth of wharf has right of use, no need to handle the certificate

Other explanation

(3) Fixed assets disposal

In RMB/CNY

ItemEnding balanceOpening balance
Fixed assets disposal15,710.00
Total15,710.00

Other explanation

13. Construction in progress

In RMB/CNY

ItemEnding balanceOpening balance
Construction in progress868,979,194.241,045,643,295.57
Total868,979,194.241,045,643,295.57

(1) Construction in progress

In RMB/CNY

ItemEnding balanceOpening balance
Book balanceImpairment provisionBook valueBook balanceImpairment provisionBook value
Shenbao Plaza project3,842,333.643,842,333.643,842,333.643,842,333.64
Dongguan grain storage and wharf matching project105,051,055.18105,051,055.18266,376,815.54266,376,815.54
Pinghu Grain Depot Phase III Low Temperature Rice Warehouse Expansion and Reconstruction Project13,069,797.5313,069,797.53
Deep processing of Dongguan Industry and Trading Food692,628.86692,628.86513,729.78513,729.78
CDE storage of736,730,017.78736,730,017.78720,076,609.48720,076,609.48
Dongguan Food Industrial Park and wharf mating projects
Grain storage and processing43,334,291.0443,334,291.04
Water Leakage Project of Pinghu Reservoir2,763,915.812,763,915.81
Shuguang Warehouse No. 3 & No. 6 Refrigeration Reconstruction Project1,992,099.161,992,099.16
Renovation of supporting loading and unloading facilities in Pinghu Reservoir1,169,025.001,169,025.00
Cold chain intelligent system3,645,282.943,645,282.943,645,282.943,645,282.94
Other10,693,601.69903,189.749,790,411.956,674,716.56903,189.745,771,526.82
Total873,724,717.624,745,523.38868,979,194.241,050,388,818.954,745,523.381,045,643,295.57

(2) Changes of major construction in progress

In RMB/CNY

Item NameBudgetOpening balanceCurrent amount increasedTransfer-in fixed assetsOther decreased in the PeriodEnding balanceProportion of project investment in budgetProgressAccumulated capitalization of interestIncluding: amount of capitalization of interest inInterest capitalization rate in PeriodCapital resources
Period
Dongguan grain storage and wharf matching project1,242,000,000.00266,376,815.5410,664,855.98171,990,616.34105,051,055.1877.00%77.00%34,175,733.671,938,827.034.90%Other
Deep processing of Dongguan Industry and Trading Food292,000,000.00513,729.78178,899.08692,628.8642.00%42.00%4,812,867.06Other
CDE storage of Dongguan Food Industrial Park and wharf mating projects1,087,300,000.00720,076,609.4816,653,408.30736,730,017.7895.00%95.00%87,395,237.6714,547,868.694.90%Other
Total2,621,300,000.00986,967,154.8027,497,163.36171,990,616.34842,473,701.82----126,383,838.4016,486,695.72--

14. Productive biological asset

(1) Measured by cost

√ Applicable □Not applicable

In RMB/CNY

ItemPlantLivestockForestryFisheriesTotal
Tea tree
I. Original book value
1.Opening balance416,771.28416,771.28
2.Current amount increased
(1) Outsourcing
(2) self-cultivate
3.Current amount decreased
(1) Disposal
(2) Other
4.Ending balance416,771.28416,771.28
II. Accumulated depreciation
1.Opening balance29,077.0829,077.08
2.Current amount increased4,846.204,846.20
(1) Accrual4,846.204,846.20
3.Current amount decreased
(1) Disposal
(2) Other
4.Ending balance33,923.2833,923.28
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 value382,848.00382,848.00
2. Opening book value387,694.20387,694.20

15. Right-of-use asset

In RMB/CNY

ItemHouse buildingTotal
1.Opening balance2,329,027.972,329,027.97
2.Current amount increased96,145,899.5396,145,899.53
—New lease96,145,899.5396,145,899.53
4.Ending balance98,474,927.5098,474,927.50
2.Current amount increased8,663,657.578,663,657.57
(1) Accrual8,663,657.578,663,657.57
4.Ending balance8,663,657.578,663,657.57
1.Ending book value89,811,269.9389,811,269.93
2. Opening book value2,329,027.972,329,027.97

Other explanation:

16. Intangible assets

(1) Intangible assets

In RMB/CNY

ItemLand use rightPatentNon-patent technologyOtherTotal
I. Original book value
1.Opening balance633,437,630.1947,245,918.8940,777,889.5634,007,377.25755,468,815.89
2.Current amount increased95,247.356,846,482.2013,683,637.7420,625,367.29
(1) Purchase95,247.356,846,482.2013,683,637.7420,625,367.29
(2) Internal R&D
(3) Increased by combination
3.Current amount decreased
(1) Disposal
4.Ending balance633,532,877.5447,245,918.8947,624,371.7647,691,014.99776,094,183.18
II. Accumulated amortization
1.Opening balance100,424,358.4227,673,682.239,037,770.4512,343,156.33149,478,967.43
2.Current amount increased7,569,916.801,026,128.943,526,506.371,257,971.5413,380,523.65
(1) Accrual7,569,916.801,026,128.943,526,506.371,257,971.5413,380,523.65
3.Current amount decreased
(1) Disposal
4.Ending balance107,994,275.2228,699,811.1712,564,276.8213,601,127.87162,859,491.08
III. Impairment provision
1.Opening balance5,553,283.541,130,341.880.006,683,625.42
2.Current amount increased
(1) Accrual
3.Current amount decreased
(1) Disposal
4.Ending balance5,553,283.541,130,341.880.006,683,625.42
IV. Book value
1.Ending book value525,538,602.3212,992,824.1833,929,753.0634,089,887.12606,551,066.68
2. Opening book value533,013,271.7714,018,953.1230,609,777.2321,664,220.92599,306,223.04

Ratio of the intangible assets from internal R&D in balance of intangible assets at period-end

(2) Land use rights without certificate of ownership

In RMB/CNY

ItemBook valueReasons for without the property certification
Land use right34,305,035.82Still under processing

Other explanation:

17. Goodwill

(1) Goodwill Original book value

In RMB/CNY

The investedOpeningCurrent increasedCurrent decreasedEnding balance
entity or matters forming goodwillbalanceFormed by business combinationDispose
Yunnan Pu’er Tea Trading Center Co., Ltd.673,940.32673,940.32
Total673,940.32673,940.32

(2) Goodwill impairment provision

In RMB/CNY

The invested entity or matters forming goodwillOpening balanceCurrent increasedCurrent decreasedEnding balance
AccrualDispose
Yunnan Pu’er Tea Trading Center Co., Ltd.673,940.32673,940.32
Total673,940.32673,940.32

Relevant information about the assets group or portfolio goodwill includedNote: In May 2016, the 15% equity of Pu’er Tea Trading Center held by Yunnan Heng Feng Xiang Investment Co., Ltd was acquiredby Ju Fang Yong Holding, the sub-subsidiary of the Company, after completion of the acquisition, the Company has control over thePu’er Tea Trading Center. The balance between the combined cost and the fair value of net assets on the combining date formedgoodwill of RMB 673,940.32. As of June 30, 2021, the impairment provision has been fully accrued.

Instructions for goodwill impairments test process and key parameters (such as the forecast period growth rate, stable period 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

18. Long-term expenses to be apportioned

In RMB/CNY

ItemOpening balanceCurrent amount increasedCurrent amortizationOther decreasedEnding balance
Improve12,887,591.232,760,426.271,820,244.8713,827,772.63
expenditure for fix assets
Decoration fee8,966,668.26845,069.457,186,859.672,624,878.04
Improve expenditure for investment real estate4,285,771.94160,095.184,125,676.76
Affiliated project of resident area in Wuyuan Ju Fang Yong96,739.8713,191.7883,548.09
Other5,495,553.713,853,942.89778,761.018,570,735.59
Total31,732,325.017,459,438.619,959,152.5129,232,611.11

Other explanation

19. Deferred income tax asset /Deferred income tax liabilities

(1) Deferred income tax assets without offset

In RMB/CNY

ItemEnding balanceOpening balance
Deductible temporary differencesDeferred income tax assetDeductible temporary differencesDeferred income tax asset
Impairment provision for assets67,113,321.8616,501,454.2367,113,321.8616,501,454.23
Unrealized profits in internal transactions3,488,612.52872,153.133,078,755.60769,722.53
Deductible loss53,846.2013,461.5553,846.2013,461.55
Credit impairment loss96,768,909.4724,063,313.8196,768,909.4724,063,313.81
Total167,424,690.0541,450,382.72167,014,833.1341,347,952.12

(2) Deferred income tax liability without offset

In RMB/CNY

ItemEnding balanceOpening balance
Taxable temporary differencesDeferred income tax liabilitiesTaxable temporary differencesDeferred income tax liabilities
Asset evaluation increment of enterprise combine under47,772,705.7211,943,176.4348,600,140.5212,150,035.13
different control
Total47,772,705.7211,943,176.4348,600,140.5212,150,035.13

(3) Deferred income tax assets and deferred income tax liabilities listed after off-set

In RMB/CNY

ItemTrade-off between the deferred income tax assets and liabilitiesEnding balance of deferred income tax assets or liabilities after off-setTrade-off between the deferred income tax assets and liabilities at period-beginOpening balance of deferred income tax assets or liabilities after off-set
Deferred income tax asset41,450,382.7241,347,952.12
Deferred income tax liabilities11,943,176.4312,150,035.13

(4) Details of uncertain deferred income tax assets

In RMB/CNY

ItemEnding balanceOpening balance
Deductible temporary differences226,433,711.65183,270,008.13
Deductible loss363,628,773.68351,368,763.83
Total590,062,485.33534,638,771.96

20. Other non-current asset

In RMB/CNY

ItemEnding balanceOpening balance
Book balanceImpairment provisionBook valueBook balanceImpairment provisionBook value
Prepaid for equipment611,965.84611,965.84611,965.84611,965.84
Prepaid for system723,950.00723,950.001,864,208.491,864,208.49
Total1,335,915.841,335,915.842,476,174.332,476,174.33

Other explanation:

21. Short-term loans

(1) Category

In RMB/CNY

ItemEnding balanceOpening balance
Loan in credit1,212,686,540.73110,318,727.12
Total1,212,686,540.73110,318,727.12

Explanation on category of short-term loans:

22. Account payable

(1) Account payable

In RMB/CNY

ItemEnding balanceOpening balance
Trade accounts payable488,144,451.37221,632,903.56
Account payable for engineering208,126,202.35254,410,372.45
Other6,902,635.224,853,241.63
Total703,173,288.94480,896,517.64

23. Accounts received in advance

(1) Accounts received in advance

In RMB/CNY

ItemEnding balanceOpening balance
Other4,961,036.193,376,262.66
Total4,961,036.193,376,262.66

24. Contract liabilities

In RMB/CNY

ItemEnding balanceOpening balance
Sales price149,884,356.62108,975,866.82
Total149,884,356.62108,975,866.82

Amount and reasons for important changes of book value in the period

In RMB/CNY

ItemAmount changedReasons of changes

25. Wage payable

(1) Wage payable

In RMB/CNY

ItemOpening balanceCurrent increasedCurrent decreasedEnding balance
I. Short-term compensation243,040,453.26141,910,030.56171,001,148.83213,949,334.99
II. After-service welfare-defined contribution plans16,738,931.809,088,085.587,683,026.6818,143,990.70
III. Dismissed welfare735,174.60350,981.09326,270.30759,885.39
Total260,514,559.66151,349,097.23179,010,445.81232,853,211.08

(2) Short-term compensation

In RMB/CNY

ItemOpening balanceCurrent increasedCurrent decreasedEnding balance
1. Wage, bonus, allowance and subsidy234,356,069.74122,448,450.33149,519,388.07207,285,132.00
2. Employees’ welfare156,952.357,245,636.487,402,588.83
3. Social insurance charges198,640.243,094,989.143,245,891.2447,738.14
Including: medical insurance premium115,400.072,834,293.352,937,215.7812,477.64
Industrial injury insurance premiums1,267.41115,193.44116,406.6454.21
Maternity insurance premiums40,586.98145,502.35150,883.0435,206.29
Other41,385.7841,385.78
4. Housing public reserve61,858.476,818,628.306,871,039.809,446.97
5. Trade union fee and education fee8,266,932.462,302,326.313,962,240.896,607,017.88
Total243,040,453.26141,910,030.56171,001,148.83213,949,334.99

(3) Defined contribution plans

In RMB/CNY

ItemOpening balanceCurrent increasedCurrent decreasedEnding balance
1. Basic endowment insurance premiums393,107.746,959,588.977,135,906.32216,790.39
2. Unemployment insurance premiums975.4196,724.5897,699.99
3. Enterprise annuity16,344,848.652,031,772.03449,420.3717,927,200.31
Total16,738,931.809,088,085.587,683,026.6818,143,990.70

Other explanation:

26. Taxes payable

In RMB/CNY

ItemEnding balanceOpening balance
VAT2,646,968.622,792,128.64
Enterprise income tax10,869,915.2459,929,311.33
Personal income tax8,865,349.38975,572.27
Urban maintenance and construction tax109,791.27117,101.01
House property tax5,091,298.351,041,691.54
Educational surtax71,345.3184,670.40
Use tax of land774,044.06191,383.02
Stamp tax467,780.061,066,139.48
Other123,281.5742,509.76
Deed tax664,227.84664,227.84
Total29,684,001.7066,904,735.29

Other explanation:

27. Other account payable

In RMB/CNY

ItemEnding balanceOpening balance
Dividend payable2,933,690.042,933,690.04
Other account payable435,107,165.74394,392,029.46
Total438,040,855.78397,325,719.50

(1) Dividend payable

In RMB/CNY

ItemEnding balanceOpening balance
Shenzhen Investment Management Company2,690,970.142,690,970.14
Unmanaged shares242,719.90242,719.90
Total2,933,690.042,933,690.04

Other explanation, including important dividend payable over one year without payment, disclose reasons for un-paid:

(2) Other account payable

1) By nature

In RMB/CNY

ItemEnding balanceOpening balance
Engineering quality retention money and fund of tail1,056,043.07737,356.67
Deposit and margin113,796,045.40191,086,945.49
Intercourse funds and other319,443,401.51191,229,002.98
Drawing expenses in advance811,675.7611,338,724.32
Total435,107,165.74394,392,029.46

2) Significant other account payable with over one year age

In RMB/CNY

ItemEnding balanceReasons of outstanding or carry-over
Shenzhen Food Materials Group Co., Ltd146,162,941.72The settlement conditions have not yet been met
Total146,162,941.72--

Other explanation

28. Non-current liabilities due within one year

In RMB/CNY

ItemEnding balanceOpening balance
Long-term loans due within one year137,873,648.25104,225,183.07
Total137,873,648.25104,225,183.07

Other explanation:

29. Other current liabilities

In RMB/CNY

ItemEnding balanceOpening balance
VAT payable2,329,512.69
Other4,920,907.99
Total7,250,420.68

Change of short-term bonds payable:

In RMB/CNY

BondsFace valueIssuance dateBonds termAmount issuedOpening balanceIssued in the periodAccrual interest by face valuePremium and discount amortizationPaid in the periodEnding balance

Other explanation: nil

30. Long-term loans

(1) Category

In RMB/CNY

ItemEnding balanceOpening balance
Mortgage + guarantee805,594,327.98841,864,531.75
Total805,594,327.98841,864,531.75

Explanation on category of long-term loans:

Other explanation, including interest rate range:

31. Lease liability

In RMB/CNY

ItemEnding balanceOpening balance
Lease payment91,245,488.142,329,027.97
Total91,245,488.142,329,027.97

Other explanation

32. Long-term account payable

In RMB/CNY

ItemEnding balanceOpening balance
Special account payable17,023,270.1916,126,146.20
Total17,023,270.1916,126,146.20

(1) Special account payable

In RMB/CNY

ItemOpening balanceCurrent increasedCurrent decreasedEnding balanceCauses
Depreciation fund for grain deposits16,126,146.20897,123.9917,023,270.19
Total16,126,146.20897,123.9917,023,270.19--

Other explanation:

Note: the finance allocated to the Company as a government investment in depreciation special funds of reserve grain depot andinterest.

33. Accrual liabilities

In RMB/CNY

ItemEnding balanceOpening balanceCauses
External guarantee3,500,000.003,500,000.00
Total3,500,000.003,500,000.00--

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.

34. Deferred income

In RMB/CNY

ItemOpening balanceCurrent increasedCurrent decreasedEnding balanceCauses
Government subsidies100,710,038.325,660,000.003,271,095.25103,098,943.07
Total100,710,038.325,660,000.003,271,095.25103,098,943.07--

Item with Government subsidy involved:

In RMB/CNY

LiabilityOpening balanceNew grants in the PeriodAmount reckoned in non-operation revenueAmount reckoned in other incomeCost reduction in the periodOther changesEnding balanceAssets-related/income related
Government central government grant funds4,710,782.455,660,000.00706,844.699,663,937.76Assets-related
Intelligent management of grain depot based on mobile internet466,666.56100,000.02366,666.54Assets-related
Special funds for intelligent upgrading and transformation of grain warehouse “Grain Safety Project”10,922,083.35477,499.9810,444,583.37Assets-related
Subsidy for supply system construction of agricultural products350,000.00100,000.00250,000.00Assets-related
Agricultural product safety testing project of the special fund for agricultural development - Central investment fund342,000.00171,000.00171,000.00Assets-related
Special fund for agricultural development - agricultural product safety testing project- capacity building of the third party inspection institution expansion evaluation164,000.0082,000.0082,000.00Assets-related
Construction of O2O community sales service system for high quality grain and oil based on B2C E-commerce platform1,712,259.1219,288.021,692,971.10Assets-related
Industrialization of Doximi E-commerce platform978,281.14368,210.28610,070.86Assets-related
Grain storage project of Dongguan Shenliang Logistics Co., Ltd. -7,717,903.59131,128.567,586,775.03Assets-related
Storage A
Phase II of grain storage project of Dongguan Shenliang Logistics Co., Ltd.- Storage B30,906,098.48515,650.2630,390,448.22Assets-related
Grain, oil and food headquarters and innovative public service platform of Dongguan Shenliang Logistics Co., Ltd.18,000,000.0018,000,000.00Assets-related
Construction of 450000 ton silos and 60000 ton film silos -CDE warehouse. Gas storage bin16,830,624.6516,511.2216,814,113.43Assets-related
Base of further processing for tea and nature plants550,000.00137,500.02412,499.98Assets-related
Special fund for the development of2,836,474.79175,604.522,660,870.27Assets-related
strategic emerging industries in Shenzhen
Industrialization of instant tea powder1,691,244.9198,222.941,593,021.97Assets-related
Enterprise technology center is a municipal R&D center. Subsidies for industrial technological advancement1,579,251.97102,012.241,477,239.73Assets-related
Grant for key technology research and industrialization of instant tea powder124,521.177,122.48117,398.69Assets-related
Construction amount for 50 tons for clearly processing for Mingyou tea249,999.9462,500.02187,499.92Assets-related
Project grants for years for agricultural53,846.2053,846.20Assets-related
district, Xihu Zone
Commercial circulation development project funding524,000.00524,000.00Assets-related
Total100,710,038.325,660,000.003,271,095.25103,098,943.07

Other explanation:

35. Share capital

In RMB/CNY

Opening balanceIncreased (decreased) in this period+, -Ending balance
New shares issuedBonus sharesShares converted from public reserveOtherSubtotal
Total shares1,152,535,254.001,152,535,254.00

Other explanation:

36. Capital public reserve

In RMB/CNY

ItemOpening balanceCurrent increasedCurrent decreasedEnding balance
Capital premium (Share capital premium)1,413,996,347.50160,572,715.621,253,423,631.88
Other capital reserve8,896,381.868,896,381.86
Total1,422,892,729.36160,572,715.621,262,320,013.74

Other instructions, including changes in the current period, reasons for the change:

37. Surplus public reserve

In RMB/CNY

ItemOpening balanceCurrent increasedCurrent decreasedEnding balance
Statutory surplus reserves382,367,575.37382,367,575.37
Total382,367,575.37382,367,575.37

Other explanation, including changes and reasons for changes:

38. Retained profit

In RMB/CNY

ItemCurrent periodLast period
Retained profit at the end of the previous year before adjustment1,637,536,441.031,495,135,080.60
Total retained profit at the beginning of the previous year before adjustment1,637,536,441.031,495,135,080.60
Add: net profit attributable to shareholder of parent company243,846,874.76210,738,686.12
Common stock dividends payable230,507,050.80230,507,050.80
Retained profit at period-end1,650,876,264.991,475,366,715.92

Details about adjusting the retained profits at the beginning of the period:

1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the 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

39. Operating income and operating cost

In RMB/CNY

ItemCurrent periodLast period
IncomeCostIncomeCost
Main business5,259,568,275.954,649,191,683.414,738,760,181.964,218,999,878.26
Other business2,620,904.581,205,387.261,668,040.14403,950.54
Total5,262,189,180.534,650,397,070.674,740,428,222.104,219,403,828.80

Information relating to revenue:

In RMB/CNY

CategoryBranch 1Branch 2Total
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 149,884,356.62 yuan, among them, 149,884,356.62 yuan of revenue isexpected to be recognized in 2021.Other explanation

40. Tax and surcharges

In RMB/CNY

ItemCurrent periodLast period
Consumption tax544,486.02393,095.87
Urban maintenance and construction tax411,731.33293,482.34
House property tax4,225,156.712,332,175.04
Use tax of land945,095.60871,580.42
Vehicle and vessel use tax8,953.20
Stamp duty826,252.63385,415.59
Other7,604.3658,669.28
Total6,969,279.854,334,418.54

Other explanation:

41. Sales expenses

In RMB/CNY

ItemCurrent periodLast period
Labor and social security benefits40,890,403.8232,804,986.80
Port terminal fee29,316,408.8919,474,717.84
Handling charges4,291,965.964,882,744.12
Depreciation and amortization of long-term assets6,730,728.236,518,839.48
Equivalent loss for low value perishable goods2,408,636.91935,717.93
After-sale services2,359,846.00789,476.48
Utilities and office expenses2,848,894.712,350,318.50
Rental2,942,783.482,577,208.22
Logistics transportation fee2,180,760.9528,612,496.12
Travel expenses1,101,872.85779,656.28
Sales commission230,219.20248,538.85
Business hospitality799,812.28527,170.78
Advertisement charge790,841.41363,244.31
Property insurance premium631,971.4382,506.02
Automobile expenses296,086.85317,274.99
Other8,890,543.808,531,801.39
Total106,711,776.77109,796,698.11

Other explanation:

42. Administration expenses

In RMB/CNY

ItemCurrent periodLast period
Labor and social security benefits74,829,904.0769,229,045.12
Depreciation and amortization of long-term assets12,401,821.3713,292,796.12
Office expenses5,946,658.733,701,673.55
Intermediary agency fee3,127,140.252,140,781.77
Rental2,049,677.281,468,092.89
Business hospitality776,421.991,164,075.59
Relocation and shutdown costs419,391.74
Travel expenses721,643.56552,462.94
Repair cost311,482.72693,712.09
Communication fee602,782.52520,417.29
Vehicle usage fee458,887.95546,606.17
Low-value consumables66,494.16179,389.99
Other7,603,787.318,285,912.43
Contract compensation63,494.58
Total109,316,093.65101,838,460.53

Other explanation:

43. R&D expenses

In RMB/CNY

ItemCurrent periodLast period
Labor and social security benefits7,052,838.344,299,743.55
Depreciation cost2,141,451.051,678,787.85
Logistics consumption350,852.2380,752.32
Office expenses559,237.89146,085.41
Maintenance and inspection fee190,595.5911,870.89
Travel expenses350,496.6382,848.06
Automobile expenses27,522.00
Intermediary fees18,883.02
Other234,141.401,068,684.60
Total10,926,018.157,368,772.68

Other explanation:

44. Financial expenses

In RMB/CNY

ItemCurrent periodLast period
Interest expenses15,362,400.047,410,693.33
Less: Interest income765,002.681,735,133.50
Exchange loss152,194.11-54,764.94
Other2,455,183.05534,417.72
Total17,204,774.526,155,212.61

Other explanation:

45. Other income

In RMB/CNY

SourcesCurrent periodLast period
Government subsidies related to asset3,271,095.252,055,335.31
Government subsidies related to income1,004,197.508,769,224.86
Collectively deduction for input tax294,887.24
Withholding personal income tax handling fee321,549.63
Direct VAT exemption199.68
Total4,891,929.3010,824,560.17

46. Investment income

In RMB/CNY

ItemCurrent periodLast period
Long-term equity investment income measured by equity440,179.67366,989.43
Investment income from disposal of long-term equity investment2,337,075.95
Income from financial products3,061,191.637,544,998.92
Total3,501,371.3010,249,064.30

Other explanation:

47. Income of fair value changes

In RMB/CNY

SourcesCurrent periodLast period
Tradable financial assets288,972.32-572,784.42
Total288,972.32-572,784.42

Other explanation:

48. Credit impairment loss

In RMB/CNY

ItemCurrent periodLast period
Loss of bad debt of other account receivable46,004.50638,878.91
Loss of bad debt of account receivable-11,847.131,153,087.44
Total34,157.371,791,966.35

Other explanation:

49. Assets impairment loss

In RMB/CNY

ItemCurrent periodLast period
II. Inventory price drop loss and contract performance cost impairment loss-111,448,173.12-95,290,043.04
Total-111,448,173.12-95,290,043.04

Other explanation:

50. Income from assets disposal

In RMB/CNY

SourcesCurrent periodLast period
Profit and loss on disposal of non current assets8,318.64-10,598.38
Total8,318.64-10,598.38

51. Non-operating income

In RMB/CNY

ItemCurrent periodLast periodAmount included in the current non-recurring profit and loss
Government subsidy3,879.4210,030.083,879.42
Profit91,006.3891,006.38
Other1,532,816.76664,790.241,532,816.76
Liquidated damages compensation income683,979.26
Total1,627,702.561,358,799.581,627,702.56

Government subsidy reckoned into current gains/losses:

In RMB/CNY

GrantsIssuing subjectIssuing causeProperty typeWhether the impact of subsidies on the current profit and lossWhether special subsidiesAmount of this periodAmount of last periodAssets related/Income related

Other explanation: nil

52. Non-operating expenditure

In RMB/CNY

ItemCurrent periodLast periodAmount included in the current non-recurring profit and loss
External donations150,397.265,151,098.92150,397.26
Inventory loss6,532.186,532.18
Loss of scrap from non-current assets19,868.5435,567.3819,868.54
Other226,366.32226,366.32
Total403,164.305,186,666.30403,164.30

Other explanation:

53. Income tax expense

(1) Income tax expense

In RMB/CNY

ItemCurrent periodLast period
Current income tax expenses13,716,643.863,142,430.31
Deferred income tax expenses-309,289.30-677,161.68
Total13,407,354.562,465,268.63

(2) Adjustment process of accounting profit and income tax expenses

In RMB/CNY

ItemCurrent period
Total profit259,165,280.99
Income tax expenses calculated by statutory tax rate64,791,320.25
Impact from different tax rate apply with the subsidiary-271,592.28
Effect of adjusting income tax in the previous period5,552,660.64
Impact of non taxable income-93,461,467.46
Impact on cost, expenses and losses that unable to deducted27,943,603.88
Unrecognized impacts of deductible temporary differences or deductible losses on deferred income tax assets in the period11,584,334.07
Additional deductible expenses required by tax law——Impact on R&D costs deduction-2,731,504.54
Income tax expenses13,407,354.56

Other explanation

54. Annotation of cash flow statement

(1) Cash received with other operating activities concerned

In RMB/CNY

ItemCurrent periodLast period
Intercourse funds and deposit501,614,298.48425,055,874.21
Government subsidy6,664,197.5013,758,224.86
Interest income765,002.681,893,194.14
Other
Total509,043,498.66440,707,293.21

Note of cash paid with other operating activities concerned:

(2) Cash paid with other operating activities concerned

In RMB/CNY

ItemCurrent periodLast period
Intercourse funds and deposit506,989,695.21342,216,823.96
Operating daily expenses80,962,607.92103,213,558.91
Other4,025,352.26
Total591,977,655.39445,430,382.87

Note of cash paid with other operating activities concerned:

(3) Cash received with other investment activities concerned

In RMB/CNY

ItemCurrent periodLast period
Performance compensation337,500.00
Other54,336.41
Total54,336.41337,500.00

Note of cash received with other investment activities concerned:

(4) Cash paid related with investment activities

In RMB/CNY

ItemCurrent periodLast period
Other109,602.00994,317.84
Total109,602.00994,317.84

Note of cash paid related with investment activities:

(5) Other cash paid related with financing activities

In RMB/CNY

ItemCurrent periodLast period
Other58,702.23
Total58,702.23

Note of other cash paid related with financing activities:

55. Supplementary information to statement of cash flow

(1) Supplementary information to statement of cash flow

In RMB/CNY

Supplementary informationCurrent periodLast period
1. Net profit adjusted to cash flow of operation activities:----
Net profit245,757,926.43212,229,860.46
Add: Impairment provision for assets111,414,015.7593,498,076.69
Depreciation of fixed assets, consumption of oil assets and depreciation of productive biology assets39,826,096.3136,594,574.62
Depreciation of right-of-use assets8,663,657.57
Amortization of intangible assets13,380,523.6511,220,066.23
Amortization of long-term pending expenses9,959,152.512,824,888.62
Loss from disposal of fixed assets, intangible assets and other long-term assets (income is listed with “-”)-8,318.6410,598.38
Losses on scrapping of fixed assets (income is listed with “-“)19,868.5435,567.38
Loss from change of fair value (income is listed with “-“)-288,972.32572,784.42
Financial expenses (income is listed with “-”)15,500,789.857,410,693.33
Investment loss (income is listed with “-”)-3,501,371.30-10,249,064.30
Decrease of deferred income tax assets (increase is listed with “-”)-102,430.60-470,303.13
Decrease of deferred income tax asset ((increase is listed with “-”)-206,858.70-206,858.55
Decrease of inventory (increase is listed with “-”)-713,312,219.22-382,924,860.42
Decrease of operating receivable accounts (increase is listed with “-”)-557,180,868.53129,417,912.00
Increase of operating payable accounts (decrease is listed with “-”)138,806,857.37-90,353,574.58
Other
Net cash flow arising from operating activities-691,272,151.339,610,361.15
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 end68,774,083.11113,636,986.38
Less: Balance of cash at year-begin190,494,225.94154,954,757.85
Add: Balance at year-end of cash equivalents
Less: Balance at year-begin of cash equivalents
Net increasing of cash and cash equivalents-121,720,142.83-41,317,771.47

(2) Constitution of cash and cash equivalent

In RMB/CNY

ItemEnding balanceOpening balance
I. Cash68,774,083.11190,494,225.94
Including: Cash on hand100,315.0362,642.11
Bank deposit available for payment at any time67,609,744.07189,169,821.01
Other monetary fund available for payment at any time1,064,024.011,261,762.82
III. Balance of cash and cash equivalent at period-end68,774,083.11190,494,225.94

Other explanation:

56. Assets with ownership or use right restricted

In RMB/CNY

ItemEnding book valueReasons for restriction
Fix assets671,932,275.20According to the long-term loan mortgage contract signed by the Company, with Shenzhen Branch of Agricultural Development Bank and Huizhou Zhongkai Sub-branch of HSBC, the Company has mortgaged the real estate property rights of the structures of Yue (2020) Dongguan Property Right No. 0127118, Yue (2020) Dongguan Property Right No. 0127119, Yue (2020) 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 assets68,667,888.52According 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 assets35,398,230.05According to the long-term loan mortgage contract signed by 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
Total775,998,393.77--

Other explanation:

57. Foreign currency monetary items

(1) Foreign currency monetary items

In RMB/CNY

ItemEnding foreign currency balanceConvert rateEnding RMB balance converted
Monetary fund----649,435.35
Including: USD51,229.506.4601330,947.69
EURO
HKD382,751.660.8321318,487.66
Account receivable----2,413,463.66
Including: USD356,778.876.46012,304,827.18
EURO
HKD130,557.000.8321108,636.48
Long-term loans----
Including: USD
EURO
HKD

Other explanation:

58. Government subsidy

(1) Government subsidy

In RMB/CNY

CategoryAmountItemAmount reckoned into current gains/losses
Government subsidy related to assets103,098,943.07Deferred income3,271,095.25
Government subsidy related to income1,008,076.921,008,076.92
Total104,107,019.994,279,172.17

59. Other

NilVIII. Changes of consolidation range

1. Other reasons for consolidation range changed

Consolidation scope changes caused by other reasons (eg, newly establish subsidiaries, liquidate subsidiaries, etc.) and the relatedcircumstances:

During the reporting period, the Company newly established Dongguan Hualian Company

2. Other

Nil

IX. Equity in other entity

1. Equity in subsidiary

(1) Constitute of enterprise group

SubsidiaryMain place of operationRegistration placeBusiness natureShare-holding ratioAcquired way
DirectlyIndirectly
Shenbao HuachengShenzhenShenzhenManufacturing100.00%Establishment
Wuyuan Ju Fang YongShangraoShangraoManufacturing100.00%Establishment
Shenbao Tea CultureShenzhenShenzhenCommercial trade100.00%Establishment
Ju Fang Yong TradingHangzhouHangzhouWholesale business60.00%Establishment
Ju Fang Yong HoldingHangzhouHangzhouComprehensive100.00%Establishment
Fuhaitang CateringHangzhouHangzhouCatering industry100.00%Establishment
Fuhaitang EcologicalHangzhouHangzhouTea planting, production and sales100.00%Acquisition
Shenbao Rock TeaWuyishanWuyishanManufacturing100.00%Establishment
Pu'er Tea Supply ChainPu’erPu’erWholesale business100.00%Establishment
Shenbao FoodHuizhouHuizhouWholesale business100.00%Establishment
Pu’er Tea Trading CenterPu’erPu’erService industry55.00%Establishment
Shenbao InvestmentShenzhenShenzhenInvestment management100.00%Establishment
Shenliang FoodHuizhouShenzhenManufacturing100.00%Establishment
Huizhou ShenbaoHuizhouHuizhouComprehensive100.00%Establishment
Shenbao PropertyShenzhenShenzhenProperty management100.00%Establishment
ShenbaoShenzhenShenzhenDevelopment,100.00%Establishment
Technologyconsulting and transfer of technology
Shenbao Industry & TradeHuizhouShenzhenWholesale business100.00%Establishment
SZCGShenzhenShenzhenGrain & oil trading100.00%Combine under the same control
Hualian Grain & OilShenzhenShenzhenGrain & oil trading100.00%Combine under the same control
Dongguan HualianDongguanDongguanGrain & oil trading100.00%Establishment
Shenzhen FlourShenzhenShenzhenFlour processing100.00%Combine under the same control
Shenliang Quality InspectionShenzhenShenzhenInspection100.00%Combine under the same control
Hainan Grain and OilHaikouHaikouFeed production100.00%Combine under the same control
DoximiShenzhenShenzhenE-commerce100.00%Combine under the same control
Big KitchenShenzhenShenzhenSales and processing of grain, oil and products70.00%Combine under the same control
Yingkou StorageYingkouYingkouStorage100.00%Combine under the same control
Cold-Chain LogisticShenzhenShenzhenFresh food management on-line100.00%Combine under the same control
Shenliang PropertyShenzhenShenzhenProperty management100.00%Combine under the same control
Shenliang RealShenzhenShenzhenReal estate100.00%Combine under
Estatedevelopment and property managementthe same control
International FoodDongguanDongguanPort operation, food production51.00%Combine under the same control
Dongguan Grain and OilDongguanDongguanFood production51.00%Combine under the same control
Dongguan LogisticsDongguanDongguanStorage, logistics49.00%51.00%Combine under the same control
HongxinglongShuangyashanShuangyashanConstruction of food base and development of related complementary facility51.00%Combine under the same control
ShuangyashanShuangyashanShuangyashanConstruction of food base and development of related complementary facility51.00%Combine under the same control
Shenliang HongjunShenzhenShenzhenCatering51.00%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. Transaction that has owners equity shares changed in subsidiary but still with controlling rights

(1) Owners equity shares changed in subsidiary

During the reporting period, the 49.00% equity of Dongguan Logistics were acquired by the Company and became a wholly-ownedsubsidiary of the company.

(2) Impact on minority’s interest and owners’ equity attributable to parent company

In RMB/CNY

Dongguan Logistics
Purchase cost/disposal consideration321,680,000.00
--Cash321,680,000.00
Purchase cost/total disposal consideration321,680,000.00
Less: Subsidiary's share of net assets calculated based on the proportion of acquired/disposed equity161,107,284.38
Difference160,572,715.62
Including: Adjust the capital reserve160,572,715.62

Other explanation

3. Equity in joint venture and associated enterprise

(1) Important joint venture or associated enterprise

Joint venture/Associated enterpriseMain place of operationRegistration placeBusiness natureShare-holding ratioAccounting treatment on investment for joint venture and associated enterprise
DirectlyIndirectly
Zhuhai Hengxing Feed Industrial Co., Ltd.ZhuhaiZhuhaiAquatic fee and animal fee40.00%Equity method
Shenliang Intelligent Wulian Equity Investment Fund (Shenzhen) Partnership Enterprise (Limited)ShenzhenShenzhenEquity investment; investment consultant49.02%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/CNY

Ending balance/Current periodOpening 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 assets165,853,289.0421,012,185.0398,242,527.5220,459,246.10
Non current assets27,231,124.6332,835,895.1929,365,806.2333,102,244.01
Total assets193,084,413.6753,848,080.22127,608,333.7553,561,490.11
Current liabilities111,754,886.72510,000.0044,972,658.51
Non current liabilities491,358.69537,345.69
Total liabilities112,246,245.41510,000.0045,510,004.20
Shareholders' equity attributable to the parent company80,838,168.2653,338,080.2282,098,329.5553,561,490.11
Share of net assets calculated by shareholding ratio32,335,267.3026,146,326.9332,839,331.8226,255,842.45
Adjustment items991,770.90-174.47162,707.80-174.47
--Other991,770.90-174.47162,707.80-174.47
Book value of equity investment in associated enterprises33,327,038.2026,146,152.4633,002,039.6226,255,667.98
Operating revenue342,054,335.50259,095,047.79
Net profit1,430,282.78-223,409.893,337,583.11-352,638.57
Total comprehensive income1,430,282.78-223,409.893,337,583.11-352,638.57

Other explanation

(3) Financial summary for non-important Joint venture and associated enterprise

In RMB/CNY

Ending balance/Current periodOpening balance/Last period
Joint venture:----
Amount based on share-holding ratio----
Associated enterprise:----
Total book value of investment14,182,136.8513,957,440.24
Amount based on share-holding ratio----
--Net profit224,696.61415,495.06
--Total comprehensive income224,696.61415,495.06

Other explanation

(4) Excess loss occurred in joint venture or associated enterprise

In RMB/CNY

Joint venture/Associated enterpriseCumulative un-recognized lossesUn-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.8,742,655.05165,079.108,907,734.15
Shenzhen Shichumingmen Catering Management Co., Ltd.4,815,325.704,815,325.70

Other explanation

4. Other

Nil

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.

1. Credit risk

Credit 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 30 June 2021, the account receivable from top five customers accounted for 77.02% of the Company’s totalaccount 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”

2. Liquidity risk

Liquidity 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.

3. Market risk

The 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 (57) Foreign Currency Monetary Items of VII. 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/CNY

ItemEnding fair value
First-orderSecond-orderThird-orderTotal
I. Sustaining measured by fair value--------
1.Financial assets measured by fair value and with variation reckoned into current gains/losses910,778.83910,778.83
(2) Equity instrument investment910,778.83910,778.83
Other non-current financial assets57,500.0057,500.00
II. Non-persistent measure--------

2. Other

Nil

XII. Related party and related transactions

1. Parent company

Parent companyRegistration placeBusiness natureRegistered capitalRatio of shareholding on the CompanyRatio of voting right on the Company
Shenzhen Food Materials Group Co., LtdShenzhenInvesting in industry, development, operation and management of the own property5000 million Yuan63.79%63.79%

Explanation on parent company of the enterpriseUltimate controller of the Company is Shenzhen Municipal People’s Government State-owned Assets Supervision & AdministrationCommission

Ultimate controller of the Enterprise is Shenzhen Municipal People’s Government State-owned Assets Supervision & AdministrationCommission。Other explanation:

2. Subsidiary

Subsidiary of the Company found more in Note "1. Equity in subsidiaries" of Note IX-Equity in other entity

3. Joint venture and associated enterprise

Joint Venture of the Company found more in Note "3. Equity in joint arrangement or joint venture" of Note IX-Equity in other entityOther cooperative enterprise and joint venture that have related transaction with the Company in the Period or occurred in previousperiod:

Joint venture/Associated enterpriseRelationship with the Enterprise

Other explanation

4.Other related party

Other related partyRelationship with the Enterprise
Shenzhen Agricultural Products Group Co., LtdShareholder of the Company, subsidiary of the actual controller, controlled by the same ultimate controlling party
Zhanjiang Haitian Aquatic Feed Co., LtdSubsidiary 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., LtdSubsidiary 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., LtdFormer shareholder of the Company, Controlled by the same ultimate controlling party
Fujian Wuyishan Yuxing Tea Co., LtdMinority shareholder of former controlling subsidiary
Shenzhen Fruits and Vegetables Trading Co., LtdWholly-owned subsidiary of Shenzhen Agricultural Products Group Co., Ltd
Shenzhen Higreen International Agricultural Products Logistic Management Co., LtdControlling subsidiary of Shenzhen Agricultural Products Group Co., Ltd
Zhanjiang Changshan (Shenzhen) Ecological Aquaculture Co., LtdHas the same parent company
Shenzhen Shenliang Cold Transport Co., Ltd.Holding subsidiary of the company's associated enterprise
Shenzhen Yixin Investment Co., LtdFormer 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., LtdControlling subsidiary of Shenzhen Agricultural Products Group Co., Ltd
Shenzhen Shennong Kitchen Co., LtdWholly-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/CNY

Related partyRelated transaction contentCurrent PeriodApproved transaction limitWhether more than the transaction limit (Y/N)Last Period
Shenzhen Shenliang Cold Transport Co., Ltd.Warehousing Services/Transportation services25,982.95178,503.88
Shenzhen Shenyuan Data Technology Co., ltd.Information software development18,675,417.455,290,531.23
Shenzhen Food Materials Group Co., LtdAsset management20,809.52

Goods sold/labor service providing

In RMB/CNY

Related partyRelated transaction contentCurrent periodLast period
Shenzhen Duoxi Equity Investment Fund Management Co., Ltd.Grain and oil sales/Cleaning services fee11,320.74
Shenzhen Agricultural Products Group Co., LtdGrain and oil sales52,800.00
Shenzhen Shenliang Cold Transport Co., Ltd.Grain and oil sales/Warehousing Services125,643.48
Shenzhen Shennong Kitchen Co., LtdGrain and oil sales251,262.00
Shenzhen Food Materials Group Co., LtdAsset management62,894.66

Explanation on goods purchasing, labor service providing and receiving

(2) Related lease

As a lessor for the Company:

In RMB/CNY

LesseeAssets typeLease income recognized in the PeriodLease income recognized last Period
Shenzhen Shichumingmen Catering Management Co., Ltd.Operating site580,466.28

As lessee:

In RMB/CNY

LessorAssets typeLease income recognized in the PeriodLease income recognized last Period
Shenzhen Food Materials Group Co., LtdOffice space268,542.85

Explanation on related lease

(3) Related guarantee

As guarantor

In RMB/CNY

Secured partyGuarantee amountGuarantee start dateGuarantee expiry dateWhether the guarantee has been fulfilled
Changzhou Shenbao Chacang E-business Co., ltd.5,000,000.00December 20, 2011No

As secured party

In RMB/CNY

GuarantorGuarantee amountGuarantee start dateGuarantee expiry dateWhether the guarantee has been fulfilled
Dongguan Fruit Vegetable Non-Staple Food Trading Market Co., Ltd.28,031,499.73December 27, 2016December 26, 2021No
Dongguan Fruit Vegetable Non-Staple Food Trading Market Co., Ltd.299,915,049.97July 27, 2018August 29, 2032No
Dongguan Fruit Vegetable Non-Staple Food Trading Market Co., Ltd.18,587,157.80October 20, 2020October 19, 2034No
Dongguan Fruit Vegetable Non-Staple Food Trading Market Co., Ltd.40,369,672.45May 9, 2019May 8, 2027No

Explanation on related guarantee

6. Receivable and payable of related party

(1) Receivable item

In RMB/CNY

Item NameRelated partyEnding balanceOpening balance
Book balanceBad debt provisionBook balanceBad debt provision
Account receivable
Shenzhen Shenliang Cold Transport Co., Ltd.164,402.167,029.57113,286.177,029.57
Shenzhen Shennong Kitchen Co., Ltd23,082.00636.7263,672.00636.72
Shenzhen Duoxi Equity Investment Fund Management Co., Ltd.8,701.0087.01
Shenzhen Qianhai Nongmai World E-Commerce Co., Ltd38,259.42382.59
Shenzhen Food Materials Group Co., Ltd87,524.347,408.78740,878.317,408.78
Shenzhen Agricultural Products Group Co., Ltd2,328.0025.982,598.0025.98
Other account receivable
Shenzhen Shenliang Cold Transport Co., Ltd.578.005.78578.005.78
Shenzhen Higreen International Agricultural Products Logistic Management Co., Ltd50,000.0050,000.00
Zhanjiang Changshan (Shenzhen) Ecological Aquaculture Co., Ltd5,520.005,520.005,520.005,520.00
Shenzhen Shenyuan Data Technology Co., ltd.1,000,377.3510,003.778,972,895.5489,728.96
Changzhou Shenbao Chacang E-business Co., ltd.24,384,884.8421,963,786.5624,494,677.0722,007,578.79
Shenzhen Shichumingmen Catering Management Co., Ltd.2,092,197.67581,383.342,092,197.67581,383.34
Shenzhen Investment Holdings Co., Ltd.415,644.52415,644.52

(2) Payable item

In RMB/CNY

Item NameRelated partyEnding book balanceOpening book balance
Dividend payable
Shenzhen Investment Management Co., Ltd2,690,970.142,690,970.14
Other account payable
Shenzhen Shenliang Cold Transport Co., Ltd.2,790.002,790.00
Shenzhen Food Materials Group Co., Ltd146,234,653.72146,520,998.86
Zhanjiang Changshan (Shenzhen) Ecological Aquaculture Co., Ltd8,020,367.878,009,954.17
Shenzhen Duoxi Equity Investment Fund Management Co., Ltd.41,486.0041,486.00
Shenzhen Shichumingmen Catering Management Co., Ltd.184,275.00184,275.00
Shenzhen Investment Management Co., Ltd3,510,297.203,510,297.20
Account received in advance
Shenzhen Shenliang Cold Transport Co., Ltd.210.00

7. Other

NilXIII. Commitment or contingency

1. Important commitments

Important commitments on balance sheet dateThe Company has no important commitments that need to disclosed up to 30 June 2021.

2. Contingency

(1) Contingency on balance sheet date

1. Lawsuits

(1) Contract disputes between Hualian Grain and Oil and Zhuhai HuabiFor the contract disputes between the plaintiff, Shenzhen Hualian Grain and Oil Trading Co., Ltd. (hereinafterreferred to as "Hualian Grain and Oil"), and the defendant, Zhuhai Doumen Huabi Trading Co., Ltd. (hereinafterreferred to as "Zhuhai Huabi"), the People's Court of Luohu District in Shenzhen made a first-instance judgmentthat took effect in 2007: 1) The defendant should repay the plaintiff payment for goods of 2,396,300 yuan; 2) Thedefendant should pay the plaintiff liquidated damages of 239,600 yuan; 3) Court acceptance fee of 33,200 yuanshould be borne by the defendant.In 2005, Zhuhai Huabi stopped production and its legal representative was arrested by the public security organs.It was found that Zhuhai Huabi had been cancelled.As of June 30, 2021, Hualian Grain and Oil has set aside 100.00% of bad debt reserves for the receivables of2,396,300 yuan from Zhuhai Huabi.

(2) Contract disputes between Hualian Grain & Oil and Huaxing Feed FactoryIn August and October 2007, Shenzhen Hualian Grain and Oil Trading Co., Ltd. (Hereinafter referred to as "Hualian Grain and Oil") sold products to Foshan Shunde Huaxing Feed Factory and received commercialacceptance bills totaling 2,958,600 yuan. Due to the company’s failure to repay the overdue payment, HualianGrain & Oil filed a lawsuit with the Shunde District People’s Court of Foshan City on October 29, 2007,requesting Foshan Shunde Huaxing Feed Factory to repay the payment and pay the corresponding interest. FromJune to July 2011, a total of 1,638,900 yuan of the company’s bankruptcy assets was recovered. As of 30 June

2021, Hualian Grain & Oil had a receivable payment of 1,319,700 yuan from Foshan Shunde Huaxing FeedFactory. This amount has been withdrawn bad debt reserves by 100.00%.

(3) Mung bean business disputes between SZCG and Shengda Company

The agency contract disputes between the plaintiff, Shenzhen Cereals Group Co., Ltd. (hereinafter referred to as"SZCG") and the defendant, Jilin Tongyu County Shengda Company (hereinafter referred to as "ShengdaCompany") was filed and accepted by the People's Court of Futian District, Shenzhen City on August 26, 2010.After mediation, both parties voluntarily reached a mediation agreement: 1) It is confirmed that the defendantShengda Company still owes the plaintiff SZCG the repurchase amount of 7.492 million yuan and the interest ofthe repurchase amount of 2.8 million yuan before September 3, 2009. 2) The defendant Shengda Company shallpay the first payment of 1 million yuan to the plaintiff SZCG before October 30, 2010, and pay 1 million yuanbefore the end of each month from November 2010 to March 2011, and pay 492,000 yuan before the end of April2011, totaling 6,492,000 yuan. 3) If the defendant Shengda Company can pay the above amount in full on time,there is no need to pay the remaining principal of 1 million yuan and the interest of 2.8 million yuan; If any of theabove payments is not paid in full on time, the plaintiff may apply to the court for enforcement of all the claimslisted in Item 1 above.After the mediation agreement takes effect, Shengda Company has not fully fulfilled the repayment obligations,and SZCG has applied for compulsory execution. As of June 30, 2021, the accounts receivables were 5,602,500yuan, and the execution of the remaining payments was highly uncertain, SZCG has set aside the bad debtreserves of 5,602,500 yuan in full for the payments.

(4) Disputes over loan contract among Changzhou Shenbao Tea-Shop, former Shenshenbao andAgricultural Products GuaranteeFor the contract disputes among the plaintiff, Shenzhen Agricultural Products Financing Guarantee Co., Ltd.(hereinafter referred to as "Agricultural Products Guarantee"), and the defendants, Changzhou Shenbao Tea-ShopE-commerce Co., Ltd., (hereinafter referred to as "Changzhou Shenbao Tea-Shop") and Shenzhen ShenbaoIndustrial Co.,Ltd. (now renamed as Shenzhen Cereals Holdings Co.,Ltd., hereinafter referred to as "formerShenshenbao"), the first-instance court accepted the case in June 2016, and made a judgment in May 2017: 1) Thedefendant Changzhou Shenbao Tea-Shop shall repay the loan principal of 5 million yuan and the interest of353,900 yuan and the interest penalty (the interest penalty shall be based on the principal of 5 million yuan andcalculate at the annual standard of 21.6% from September 7, 2013 to the actual date of repayment, and forrepayment by installment, the corresponding penalty interest shall be calculated until the date of each repayment)to the plaintiff, Agricultural Products Guarantee, within ten days from the effective date of this judgment. 2) Thedefendant, Changzhou Shenbao Tea-Shop, shall pay the attorney fee of 193,400 yuan to the plaintiff, AgriculturalProducts Guarantee, within ten days from the effective date of the judgment. 3) Other claims of the plaintiff,Agricultural Products Guarantee, are rejected. 4) The court acceptance fee is 73,600 yuan, of which 71,900 yuanwill be borne by the defendant, Changzhou Shenbao Tea-Shop, and 1,700 yuan will be borne by the plaintiff; Thepreservation fee of 5,000 yuan shall be borne by the defendant, Changzhou Shenbao Tea-Shop.

On July 4, 2017, Agricultural Products Guarantee filed an appeal, and On April 26, 2019, Shenzhen Intermediate

People's Court made the final judgment: 1) The first and second judgment of the first instance is upheld; 2) Cancelthe third judgment of the first instance; 3) Former Shenshenbao shall assume the joint and several liability for thedebts of Changzhou Shenbao Tea-Shop within the range of 3.5 million yuan. Former Shenshenbao has the right torecover from Changzhou Shenbao Tea-Shop after the liquidation.After the judgment second instance came into effect, Agricultural Products Guarantee communicated andnegotiated with Changzhou Shenbao Tea-Shop and former Shenshenbao on how to execute the judgment. In May2021, Agricultural Products Guarantee had applied to the first-instance Futian District Court for enforcement of5,193,443 yuan. As of June 30, 2021, the Company has recognized liabilities of 3.5 million yuan.

(5) Contract disputes between the Company’s subsidiaries, Shenbao Rock Tea, Jufangyong Holdings, andJiuxing Company, Yuxing Company, Xingjiu Tea Co., Ltd., Chen Yuxing, Chen GuopengDue to the separation agreement disputes, on December 3, 2018, the arbitration applicants, Mount Wuyi ShenbaoRock Tea Co., Ltd. (hereinafter referred to as "Shenbao Rock Tea") and Hangzhou Jufangyong Holdings Co., Ltd.(hereinafter referred to as the "Jufangyong Holdings"), took Mount Wuyi Jiuxing Tea Co., Ltd. (hereinafterreferred to as "Jiuxing Company"), Fujian Wuyishan Yuxing Tea Co., Ltd. (hereinafter referred to as "YuxingCompany"), Xingjiu Tea Co., Ltd., Chen Yuxing, and Chen Guopeng as five respondents according to thearbitration clause in the original Formal Agreement for the Separation of Fujian Province Mount Wuyi ShenbaoYuxing Tea Co., Ltd., and submitted to the Shenzhen International Court of Arbitration for arbitration, claimed to:

1) Rule that the respondent, Yijiuxing Company, shall pay 5,272,900 yuan and liquidated damages of 1,581,900yuan to the applicant, Shenbao Rock Tea, totaling 6,854,800 yuan; 2) Rule that the respondents, Yuxing Company,Xingjiu Tea Co., Ltd., Chen Yuxing and Chen Guopeng shall assume joint and several liabilities for the abovereceivables and liquidated damages of the applicant, Shenbao Rock Tea; 3) Rule that the respondent JiuxingCompany shall pledge 19 designated trademarks to the applicant, Jufangyong Holdings, and cooperate with therelevant trademark pledge registration procedures; 4) Rule that all the respondents shall bear the lawyer fees of190,000 yuan, the preservation fee and other expenses incurred by the arbitration (the applicant reserves the rightto pursue the rest of the lawyer fees); 5) Rule that all the respondents shall bear all the arbitration fees of the case.On April 18, 2019, Shenzhen Court of International Arbitration held a hearing on the arbitration case. On May 26,2021, Shenzhen Court of International Arbitration made the following rulings: 1. Jiuxing Company shallcompensate Jufangyong Holding and Shenbao Rock Tea for the loss of receivables and liquidated damages of4,798,369.95 yuan; 2. Yuxing Company, Xingjiu Tea Co., Ltd., Chen Yuxing and Chen Guopeng shall assumejoint and several liabilities for the above payment obligations of Jiuxing Company; 3. The arbitration fee of104,953 yuan shall be paid by the five respondents to the two applicants; 4. The expenses of 4000 yuan of the twoarbitrators shall be paid directly by the five respondents to the two applicants. After the arbitration award comesinto effect, the applicant has applied to the court for enforcement because the respondent refuses to repay. As ofJune 30, 2021, the Company has accumulatively set aside bad debt reserves of 4,469,500 yuan.

(6) Contract disputes between Hualian Grain and Oil and Liangshuntong Company

1) For the contract dispute case ([2019] Yue 0304 Min Chu No. 49562) between the plaintiff, DalianLiangshuntong Supply Chain Management Co., Ltd. (hereinafter referred to as "Liangshuntong Company") andthe defendant, Shenzhen Hualian Grain and Oil Trading Co., Ltd. (hereinafter referred to as "Hualian Grain and

Oil"), the People's Court of Futian District made a civil judgment of first instance on July 3, 2020 that: ① Theplaintiff Liangshuntong Company should pay 595,800 yuan to Hualian Grain and Oil; ② RejectedLiangshuntong Company’s litigation request; ③ Rejected other litigation requests of Hualian Grain and Oil; ④The plaintiff Liangshuntong Company should pay in advance the litigation fee of 208,900 yuan, which should beassumed by the plaintiff, and the defendant Hualian Grain and Oil should pay in advance the counterclaim fee of113,000 yuan, of which the plaintiff should assume 1,800 yuan, and the defendant should assume 111,200 yuan.The plaintiff Liangshuntong Company refused to accept the judgment of the first instance and appealed to theShenzhen Intermediate People's Court. The second trial was held on July 29 after the Shenzhen IntermediatePeople's Court accepted the case on appeal, but the final judgment has yet to be received.

2) For the contract dispute case (Case No.[2020] Yue 0304 Min Chu No. 2824) between the plaintiff, HualianGrain and Oil, and the defendant, Liangshuntong Company, the Futian District People’s Court served the "CivilJudgment" of the first instance on December 31, 2020, which judged that: ① the defendant LiangshuntongCompany shall pay Hualian Grain and Oil an advance fee of 461,900 yuan and capital cost of 4,030,000 yuanwithin ten days from the date when the judgment becomes legally effective; ② Liangshuntong Company shallpay the capital occupation fee to Hualian Grain and Oil within ten days from the date when the judgment becomeslegally effective (Based on 461,900 yuan, calculate from December 11, 2019 to the date when the payment isactually paid at the annual interest rate of 10.00%); ③ The litigation fee of 42,700 yuan shall be borne byLiangshuntong Company. Liangshuntong Company submitted an appeal to the Shenzhen Intermediate People'sCourt on January 22, 2021. So far, no notice of the second trial has been received.

(7) Disputes over construction contract between Hongxinglong and Zhishengda CompanyIn April 2020, Heilongjiang Zhishengda Construction Engineering Co., Ltd. (hereinafter referred to as"Zhishengda Company") sued Heilongjiang Hongxinglong Agricultural Reclamation Shenxin Grain IndustrialPark Co., Ltd. (hereinafter referred to as "Hongxinglong") for construction contract disputes, request theHeilongjiang Hongxinglong People's Court that: 1) Confirm that the "Letter on Rectification of CompletedProjects and Cancellation of Not Constructed Projects" sent by Hongxinglong on April 7, 2020 does not have theeffect of canceling the contract, the cancellation of the contract made by it is invalid, and judge that the defendantHongxinglong should continue to perform the contract (the project cost required to perform the contract is5,137,800 yuan). 2) The litigation fee and other legal costs should be assumed by Hongxinglong.On July 29, 2020, Hongxinglong filed a counterclaim with the court of first instance with the following appeals: 1)Request the court to confirm the validity of the cancellation of the construction contract between Hongxinglongand Zhishengda Company in accordance with the law. 2) Request the court to rule that the Zhishengda should payHongxinglong liquidated damages of 1,003,200 yuan, of which liquidated damages for overdue completion of theproject of 253,200 yuan, repair costs for unqualified project quality of about 240,000 yuan (the specific amount isto be determined by a third party), liquidated damages for project manager’s absence from the construction sitewithout permission of 500,000 yuan, liquidated damages for the migrant worker’s collective petitions of 10,000yuan. 3) The counterclaim fee and appraisal fee shall be borne by Zhishengda. At present, all parties involved inthe case have filed applications for judicial appraisal to the court of first instance, and the case has not yet beenheard.

(8) Contract dispute case between Jufangyong Commercial and Trading and Xingfu Feixiang CompanyIn July 2020, Hangzhou Jufangyong Commercial and Trading Co., Ltd. (hereinafter referred to as "JufangyongCommercial and Trading") sued Hangzhou Xingfu Feixiang Commercial and Trading Co., Ltd. (hereinafterreferred to as "Xingfu Feixiang") due to contract dispute, requested Xiaoshan Primary People's Court, Hangzhou,Zhejiang, 1) Order the defendant Xingfu Feixiang to pay a total of 2,454,700 yuan for the cooperation royaltiesand water and electricity charges; 2) Order the defendant to pay cooperation fee of 699,700 yuan and water andelectricity charges (according to the actual amount incurred) to the western restaurant from July 1, 2019 toSeptember 10, 2019; 3) Order the defendant to pay liquidated damages of 515,300 yuan; 4) Order the defendant topay liquidated damages (with 3,154,400 yuan as the base and the monthly interest rate of 2% from April 16, 2020to the date of paying off); 5) Order that the litigation costs should be borne by the defendant.Since Xingfu Feixiang applied for bankruptcy and the court has accepted the appointment of administrator, thecourt of first instance ruled to suspend the trial in August 2020, and Jufangyong Commercial and Trading has filedclaims with the bankruptcy administrator. The bankruptcy administrator of Xingfu Feixiang, namely ShanghaiCity Development (Hangzhou) Law Firm, is in the process of checking the assets, and there is no propertydistribution plan yet.On December 23, 2020, Xiaoshan Court resumed the trial of this case, and the bankruptcy administrator issued theconfirmation of debt, confirming the debt principal of 2,422,000 yuan and the interest of 166,000 yuan, a total of2,588,000 yuan. So far, no judgment has been made.

(9) Contract dispute case between Big Kitchen Ltd and Tianjin Rongyi CompanyOn April 27, 2021, Shenzhen Shenliang Big Kitchen Food Supply Chain Co., Ltd. (hereinafter referred to as "BigKitchen Ltd") received a summons from Shanghai Huangpu District People's Court, Tianjin Rongyi Supply ChainManagement Co., Ltd. (hereinafter referred to as "Tianjin Rongyi Company") sued and required Big Kitchen Ltdto deliver 10,400 tons of rice (with the value of 41.6 million yuan), pay penalty of 4,784,000 yuan, issue aninvoice of 100,000 yuan, bear lawyer's fee of 300,000 yuan, and bear litigation costs of this case.On May 27, 2021, the case was held in Shanghai Huangpu District People's Court, and the court required bothparties to provide supplementary evidence. On May 30, Big Kitchen Ltd submitted the Application for JudicialAppraisal of Seal, applying for judicial appraisal of the seal of Big Kitchen Ltd on the relevant evidence submittedby Tianjin Rongyi Company. At present, the court has designated institutions to for judicial appraisal of the seal,up to now, it is still waiting for the second session.

(10) Disputes over construction subcontract between Dongguan Logistics and Xu AnwuOn March 17, 2021, the plaintiff, Xu Anwu, filed a lawsuit against the defendants, Dongguan Shenliang LogisticsCo., Ltd. (hereinafter referred to as "Dongguan Logistics"), Guangdong Dianbai Construction EngineeringCorporation, Gansu Installation Construction Group Co., Ltd., and Xu Jianqiang, to the First People's Court ofDongguan, claiming that: 1. The four defendants immediately pay the project payment of 10,445,000 yuan to theplaintiff; 2. The legal costs of this case shall be borne by the four defendants. The case has been held on June 4,and Dongguan Logistics has entrusted lawyers to appear in court for defence. So far, no judgment has been made.

11) Disputes over private lending between Shenshenbao Tea Culture and Shi Chu Ming MenIn May 2021, Shenshenbao Tea Culture Commercial Management Co., Ltd. (hereinafter referred to as

"Shenshenbao Tea Culture") filed a lawsuit against the defendant, Shenzhen Shi Chu Ming Men CateringManagement Co., Ltd. (hereinafter referred to as "Shi Chu Ming Men"), on the basis of the disputes over theprivate lending contract, requesting the People's Court of Nanshan District of Shenzhen to: 1. Order the defendantShi Chu Ming Men to return the loan principal of 1,183,000 yuan to the plaintiff Shenshenbao Tea Culture; 2.Order Shi Chu Ming Men to pay the interest on borrowing to Shenshenbao Tea Culture (the interest is piecewisecalculated by: A. Taking the borrowing principal of 500,000 yuan as the base, the interest is calculated accordingto the annual bank loan interest rate of the People's Bank of China for the same period is 78,179.17 yuan fromFebruary 2, 2016 to August 19, 2019; B. Taking the borrowing principal of 333,000 yuan as the base, the interestis calculated according to the annual bank loan interest rate of the People's Bank of China for the same period is70,022.92 yuan from June 16, 2016 to August 19, 2019; C. Taking the borrowing principal of 200,000 yuan as thebase, the interest is calculated according to the annual bank loan interest rate of the People's Bank of China for thesame period is 67,425.00 yuan from July 19, 2016 to August 19, 2019; D. Taking the borrowing principal of150,000 yuan as the base, the interest is calculated according to the annual bank loan interest rate of the People'sBank of China for the same period is 64,887.50 yuan from September 9, 2016 to August 19, 2019; E. Taking theborrowing principal of 1,183,000 yuan as the base, the interest is calculated based on the loan prime rate (LPR)that the People's Bank of China authorizes the National Interbank Funding Center to publish from August 20,2019 to the date of actual repayment. The total provisional interest is 171,250.68 yuan; 3. The legal costs of thiscase shall be borne by the defendant, Shi Chu Ming Men. (The total principal and provisional interest of the aboveborrowings is 1,354,250.68 yuan)People's Court of Nanshan District of Shenzhen has accepted the case, so far no date has been set for session.

2. Guarantee

(1) Subsidiary of the Company -SZCG provide a guarantee to its subsidiary -Dongguan LogisticsSZCG provide a guarantee to Dongguan Logistics for the application of loans, amount of guarantee is 547.7159million yuan. As of the report date, the loan is not yet due for repayment.

(2) Associated guarantees and restricted assets

For restricted assets, see Note VII. 56 Assets with restricted ownership or use rights, and for related guarantees,see Note 12, 5 Related Party Transactions.

(2) If the Company has no important contingency need to disclosed, explain reasons

The Company has no important contingency that need to disclose.

3. Other

Nil

XIV. Events after balance sheet date

1. Description of other balance sheet events after the date

As of the approval date of this financial report, the company has no major future events that need to be disclosed.

XV. Principal notes of financial statements of parent company

1.Account receivable

(1) Account receivable classify by category

In RMB/CNY

CategoryEnding balanceOpening balance
Book balanceBad debt provisionBook valueBook balanceBad debt provisionBook value
AmountRatioAmountAccrual ratioAmountRatioAmountAccrual ratio
Account receivable with bad debt provision accrual on a single basis28,453.080.01%28,453.08100.00%28,453.080.69%28,453.08100.00%
Including:
Account receivable with single significant amount and withdrawal bad debt provision on single basis
Account receivable with single minor amount but with bad debts provision accrued on a single basis28,453.080.01%28,453.08100.00%28,453.080.69%28,453.08100.00%
Account receivable with bad debt provision accrual on portfolio364,160,865.9999.99%10,537.22364,150,328.774,098,218.4099.31%10,537.220.26%4,087,681.18
Including:
Combination of125,510.03%10,537.8.39%114,98796,9919.31%10,537.1.32%786,459.
sales receivables8.94221.726.912269
Specific object combinations364,035,347.0599.96%364,035,347.053,301,221.4980.00%3,301,221.49
Total364,189,319.07100.00%38,990.300.01%364,150,328.774,126,671.48100.00%38,990.300.94%4,087,681.18

Bad debt provision accrual on single basis:28,453.08

In RMB/CNY

NameEnding balance
Book balanceBad debt provisionAccrual ratioAccrual causes
Other accrual on single basis28,453.0828,453.08100.00%Slightly possibly taken back
Total28,453.0828,453.08----

Bad debt provision accrual on single basis:

In RMB/CNY

NameEnding balance
Book balanceBad debt provisionAccrual ratioAccrual causes

Bad debt provision accrual on portfolio:10,537.22

In RMB/CNY

NameEnding balance
Book balanceBad debt provisionAccrual ratio
Combination of sales receivables125,518.9410,537.228.39%
Specific object combinations364,035,347.05
Total364,160,865.9910,537.22--

Explanation on portfolio determines:

Bad debt provision accrual on portfolio:

In RMB/CNY

NameEnding balance
Book balanceBad debt provisionAccrual 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/CNY

Account ageEnding balance
Within one year (including 1-year)364,152,013.39
2-3 years8,852.60
Over 3 years28,453.08
Over 5 years28,453.08
Total364,189,319.07

(2) Bad debt provision accrual, collected or reversal in the period

Bad debt provision accrual in the period:

In RMB/CNY

CategoryOpening balanceAmount changed in the periodEnding balance
AccrualCollected or reversalWritten offOther
Bad debt provision accrual on single basis28,453.0828,453.08
Sales receivable10,537.2210,537.22
Total38,990.3038,990.30

Including major amount bad debt provision that collected or reversal in the period: nil

In RMB/CNY

EnterpriseAmount collected or reversalCollection way

(3) Top 5 account receivables at ending balance by arrears party

In RMB/CNY

EnterpriseEnding balance of accounts receivableProportion in total receivables at ending balanceBad debt preparation ending balance
First364,035,347.0599.94%
Second66,668.340.02%
Third25,574.000.01%
Fourth24,424.000.01%244.24
Fifth18,456.500.01%18,456.50
Total364,170,469.8999.99%

2. Other account receivable

In RMB/CNY

ItemEnding balanceOpening balance
Dividend receivable390,000,000.00390,000,000.00
Other account receivable434,833,488.88502,105,968.23
Total824,833,488.88892,105,968.23

(1) Dividend receivable

1) Category of dividend receivable

In RMB/CNY

Item (or the invested entity)Ending balanceOpening balance
SZCG390,000,000.00390,000,000.00
Total390,000,000.00390,000,000.00

2) Important dividend receivable with account age over one year

In RMB/CNY

Item (or the invested entity)Ending balanceAccount ageReasons for not collectionWhether impairment occurs and its judgment basis
SZCG390,000,000.001-2 yearsNot yet settledNo, internal unit payments
Total390,000,000.00------

(2) Other account receivable

1) Other account receivable classify by nature

In RMB/CNY

NatureEnding book balanceOpening book balance
Margin and deposit233,029.3973,975.47
Current payments and others462,266,131.58529,477,457.08
Total462,499,160.97529,551,432.55

2) Accrual of bad debt provision

In RMB/CNY

Bad debt provisionPhase IPhase IIPhase IIITotal
Expected credit losses over next 12 monthsExpected 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, 2021258,262.8227,187,201.5027,445,464.32
Balance of Jan. 1, 2021 in the period————————
Current accrual220,207.77220,207.77
Balance on Jun. 30, 2021258,262.8227,407,409.2727,665,672.09

Change of book balance of loss provision with amount has major changes in the period

□ Applicable √Not applicable

By account age

In RMB/CNY

Account ageEnding balance
Within one year (including 1-year)431,691,818.12
2-3 years5,749,601.83
Over 3 years25,057,741.02
3-4 years436,664.33
4-5 years436,664.33
Over 5 years24,184,412.36
Total462,499,160.97

3) Bad debt provision accrual, collected or reversal in the period

Bad debt provision accrual in the period:

In RMB/CNY

CategoryOpening balanceAmount changed in the periodEnding balance
AccrualCollected or reversalWritten offOther
Bad debt provision accrual on single basis27,187,201.50220,207.7727,407,409.27
Bad debt provision258,262.82258,262.82
accrual on portfolio
Total27,445,464.32220,207.7727,665,672.09

Including major amount with bad debt provision reverse or collected in the period: nil

In RMB/CNY

EnterpriseAmount reversal or collectedCollection way

4)Top 5 other receivables at ending balance by arrears party

In RMB/CNY

EnterpriseNatureEnding balanceAccount ageRatio in total ending balance of other account receivablesBad debt preparation ending balance
FirstInternal funds166,151,922.89Within one year35.92%
SecondInternal funds121,559,181.62Within one year26.28%
ThreeInternal funds116,516,793.43Within one year25.19%
FourthIntercourse funds24,384,884.84Over 5 years5.27%21,963,786.56
FifthInternal funds14,441,831.94Within one year3.12%
Total--443,054,614.72--95.80%21,963,786.56

3. Long-term equity investment

In RMB/CNY

ItemEnding balanceOpening balance
Book balanceImpairment provisionBook valueBook balanceImpairment provisionBook value
Investment for subsidiary4,034,894,425.095,500,000.004,029,394,425.093,713,214,425.095,500,000.003,707,714,425.09
Investment for associates and joint venture2,927,628.532,927,628.532,927,628.532,927,628.53
Total4,037,822,053.628,427,628.534,029,394,425.093,716,142,053.628,427,628.533,707,714,425.09

(1) Investment for subsidiary

In RMB/CNY

The investedOpeningCurrent changes (+, -)EndingEnding
entitybalance (book value)Additional investmentCapital reductionAccrual of impairment provisionOtherbalance (book value)balance of impairment provision
Shenbao Property2,550,000.002,550,000.00
Shenbao Industry & Trade0.000.005,500,000.00
Shenliang Food80,520,842.3680,520,842.36
Shenbao Huacheng168,551,781.80168,551,781.80
Huizhou Shenbao60,000,000.0060,000,000.00
Shenbao Technology54,676,764.1154,676,764.11
Shenbao Investment50,000,000.0050,000,000.00
SZCG3,291,415,036.823,291,415,036.82
Dongguan Logistics321,680,000.00321,680,000.00
Total3,707,714,425.09321,680,000.004,029,394,425.095,500,000.00

(2) Investment for associates and joint venture

In RMB/CNY

Investment companyOpening balance (book value)Current changes (+, -)Ending balance (book value)Ending balance of impairment provision
Additional investmentCapital reductionInvestment gains recognized under equityOther comprehensive income adjustmentOther equity changeCash dividend or profit announced to issuedAccrual of impairment provisionOther
I. Joint venture
II. Associated enterprise
Shenzhen57,628.53
Shenbao (Liaoyuan) Industrial Company
Shenzhen Shenbao (Xinmin) Foods Co., Ltd2,870,000.00
Changzhou Shenbao Chacang E-business Co., Ltd.
Subtotal2,927,628.53
Total2,927,628.53

(3) Other explanation

Nil

4. Operating revenue and operating cost

In RMB/CNY

ItemCurrent periodLast period
RevenueCostRevenueCost
Main business78,409,527.17235,795.14191,007.09250,130.28
Total78,409,527.17235,795.14191,007.09250,130.28

Information relating to revenue:

In RMB/CNY

CategoryDivision 1Division 2Total
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, 411.00 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/CNY

ItemCurrent periodLast period
Long-term equity investment income measured by equity-48,505.63
Investment income from disposal of long-term equity investment2,337,075.95
Investment income during the period of tradable financial assets hold116,111.1150,729.15
Dividend451,054.95390,473,276.41
Total567,166.06392,812,575.88

6. Other

Nil

XVI. Supplementary information

1. Current non-recurring gains/losses

√ Applicable □Not applicable

In RMB/CNY

ItemAmountNote
Gains/losses from the disposal of non-current asset4,753.12
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)4,811,695.56
Profit and loss of assets delegation on others’ investment or management3,061,191.63
Gains and losses from change of fair values of held-for-transaction financial assets, derivative financial assets, held-for-transaction financial liability and derivative financial liability except for the effective hedge business related to normal business of the Company, and investment income from disposal of tradable financial assets, derivative financial assets, tradable financial liability, derivative financial liability and other debt investment.288,972.32
Other gains/losses items that conform to the definition of non-recurring gains/losses1,529,279.86
Less: impact on income tax2,005,561.30
Impact on minority interests883,122.74
Total6,807,208.45--

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 periodWeighted average ROEEarnings per share
Basic earnings per share (RMB/Share)Diluted earnings per share (RMB/Share)
Net profits belong to common stock stockholders of the Company5.17%0.21160.2116
Net profits belong to common stock stockholders of the Company after deducting5.02%0.20570.2057

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/CNY

nonrecurring gains and losses

Net profitNet assets
Current periodLast periodEnding balanceOpening balance
Chinese GAAP243,846,874.76210,738,686.124,448,099,108.104,595,331,999.76
Items and amount adjusted by IAS:
Adjustment for other payable fund of stock market regulation1,067,000.001,067,000.00
IAS243,846,874.76210,738,686.124,449,166,108.104,596,398,999.76

(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

4. Other

Nil


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