SHENZHEN CEREALS HOLDINGS CO., LTD.
SEMI-ANNUAL REPORT 2019
August 2019
Section I. Important Notice, Contents and ParaphraseBoard 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, accuracyand completion of the whole contents.Chairman of the Company Zhu Junming, General Manager Hu Xianghai, Headof Accounting Ye Qingyun and Head of Accounting Institution (AccountingSupervisors) Wen Jieyu hereby confirm that the Financial Report of Semi-AnnualReport 2019 is authentic, accurate and complete.All Directors are attended the Board Meeting for deliberation of this Report.Concerning the forward-looking statements with future planning involved in theannual report, they do not constitute a substantial commitment for investors,Securities Times, China Securities Journal, Hong Kong Commercial Daily andJuchao Website (www.cninfo.com.cn) are the media appointed by the Companyfor information disclosure, all information of the Company disclosed in the abovementioned media should prevail. Investors are advised to exercise caution ofinvestment risks.The Company has analyzed the risk factors that the Company may exist and its
countermeasures in the report, investors are advised to pay attention to read“Risks and Countermeasures” in the report of Section IV-Discussion and Analysisof the Operation. This report has been prepared in Chinese and English versionrespectively. In the event of difference in interpretation between the two versions,Chinese report shall prevail.The Company plans not to distributed cash dividend, bonus and no capitalizingof common reserves either.
Contents
Section I Important Notice, Contents and Paraphrase............. 错误!未定义书签。
Section II Company Profile and Main Financial Indexes ...... 6
Section III Summary of Company Business ...... 11
Section IV Discussion and Analysis of Operation ...... 16
Section V Important Events ...... 29
Section VI Changes in shares and particular about shareholders ...... 41
Section VII Preferred Stocks ...... 45
Section VIII Directors, Supervisors and Senior Executives ...... 46
Section IX Corporate Bonds ...... 48
Section X Financial Reprot ...... 49
Section XI Documents Available for Reference ...... 239
Paraphrase
| Items | Refers to | Contents |
| SZCH/Listed Company /the Company | Refers to | Shenzhen Cereals Holdings Co., Ltd. |
| SZCG | Refers to | Shenzhen Cereals Group Co., Ltd |
| Doximi | Refers to | SZCG Doximi Business Co., Ltd. |
| Flour Company | Refers to | Shenzhen Flour Co., Ltd |
| SZCG Quality Inspection | Refers to | SZCG Quality Inspection Co., Ltd. |
| Dongguan Logistics / SZCG Dongguan Logistics | Refers to | SZCG Dongguan Logistics Co., Ltd. |
| Dongguan Food Industrial Park | Refers to | Dongguan International Food Industrial Park Development Co., Ltd. |
| Wuyuan Ju Fang Yong | Refers to | Ju Fang Yong Tea Industry Co., Ltd. in Wuyuan County |
| Shenbao Technology Center | Refers to | Shenzhen Shenbao Technology Center Co., Ltd. |
| Fude Capital | Refers to | Shenzhen Fude State-Owned Capital Operation Co., Ltd. |
| Agricultural Products | Refers to | Shenzhen Agricultural Products Co., Ltd |
| Shenzhen SASAC | Refers to | Shenzhen Municipal People’s Government State-owned Assets Supervision & Administration Commission |
| CSRC | Refers to | China Securities Regulation Commission |
| RMB/10 thousand Yuan | Refers to | CNY/ten thousand Yuan |
Section II. Company Profile and Main Financial Indexes
I. Company profile
| Short form for share | SZCH, Shenliang B | Stock code | 000019, 200019 |
| Listing stock exchange | Shenzhen Stock Exchange | ||
| Chinese name of the 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 Representative | Zhu Junming | ||
| Secretary of the Board | Rep. of security affairs | |
| Name | Du Jianguo | Chen Kaiyue, Liu Muya |
| Contact add. | 13/F, Tower A, World Trade Plaza, No.9 Fuhong Rd., Futian District, Shenzhen | 13/F, Tower A, World Trade Plaza, No.9 Fuhong Rd., Futian District, Shenzhen |
| Tel. | 0755-82027522 | 0755-82027522 |
| Fax. | 0755-83778311 | 0755-83778311 |
| dujg@slkg1949.com | chenky@slkg1949.com, liumy@slkg1949.com |
| Company Registration Address | 8/F, Tower B, No.4 Building, Software Industry Base, South District, Science & Technology Park, Xuefu Rd., Yuehai Street, Nanshan District, Shenzhen |
| Postal Code of Company Registration Address | 518057 |
| Company's Office Address | 13/F, Tower A, World Trade Plaza, No.9 Fuhong Rd., Futian District, Shenzhen |
| Postal Code of the Company's Office Address | 518033 |
| Company Web Site | www.slkg1949.com |
| Company E-mail | szch@slkg1949.com |
| Query date of the interim notice on designated website (if applicable) | 2019-04-27 |
| Search index of the interim notice on designated website (if applicable) | Found more in the Notice of the Change of Company’s Office Address and Contact Information released on Juchao Website (www.cninfo.com.cn) |
| The Period | Same period of last year | Changes over last |
| year | ||||
| Before adjustment | After adjustment | After adjustment | ||
| Operating revenue (RMB) | 4,782,167,732.69 | 136,721,215.40 | 4,434,688,646.82 | 7.84% |
| Net profit attributable to shareholders of the listed Company (RMB) | 203,168,850.61 | -18,246,639.07 | 202,779,343.34 | 0.19% |
| Net profit attributable to shareholders of the listed Company after deducting non-recurring gains and losses (RMB) | 198,195,100.05 | -18,884,920.69 | -18,884,920.69 | 1,149.49% |
| Net cash flow arising from operating activities (RMB) | -389,429,629.75 | 9,795,470.07 | 52,861,245.30 | -836.70% |
| Basic earnings per share (RMB/Share) | 0.1763 | -0.0367 | 0.1759 | 0.23% |
| Diluted earnings per share (RMB/Share) | 0.1763 | -0.0367 | 0.1759 | 0.23% |
| Weighted average ROE | 4.82% | -1.95% | 5.06% | -0.24% |
| End of the Period | End of last year | Changes over end of last year | ||
| Before adjustment | After adjustment | After adjustment | ||
| Total assets (RMB) | 6,432,513,092.25 | 1,040,484,135.20 | 6,468,951,793.87 | -0.56% |
| Net assets attributable to shareholder of listed Company (RMB) | 4,260,480,115.67 | 928,673,938.26 | 4,172,502,535.11 | 2.11% |
| Total share capital of the Company on the trading day prior to disclosure (Share) | 1,152,535,254 |
| Total diluted EPS calculated with the latest share capital (RMB/Share) | 0.1763 |
| Net profit attributable to shareholders of listed Company | Net assets attributable to shareholders of listed Company | |||
| Current period | Last period | Period-end | Period-begin | |
| Chinese GAAP | 203,168,850.61 | 202,779,343.34 | 4,260,480,115.67 | 4,172,502,535.11 |
| Items and amount adjusted by IAS | ||||
| Adjustment for other payable fund of stock market | 1,067,000.00 | 1,067,000.00 | ||
| regulation | ||||
| IAS | 203,168,850.61 | 202,779,343.34 | 4,261,547,115.67 | 4,173,569,535.11 |
| Item | Amount | Note |
| Gains/losses from the disposal of non-current asset (including the write-off that accrued for impairment of assets) | -4,184.59 | |
| 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) | 5,463,876.60 | |
| Profit and loss of assets delegation on others’ investment or management | 3,627,466.27 | |
| Gains and losses from change of fair values of held-for-transaction financial assets and financial liabilities except for the effective hedge business related to normal business of the Company, and investment income from disposal of trading financial assets and liabilities and financial assets available for sale | 28,381.21 | |
| Switch-back of provision of impairment of account receivable and contract assets which are treated with separate depreciation test | 412,500.00 | |
| Other non-operating income and expenditure except for the aforementioned items | -3,619,767.49 | |
| Less: impact on income tax | 702,095.88 | |
| Impact on minority shareholders’ equity (post-tax) | 232,425.56 | |
| Total | 4,973,750.56 | -- |
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to thePublic --- Extraordinary Profit/loss
Section III. Summary of Company BusinessI. Main businesses of the Company in the reporting periodDoes the Company need to comply with disclosure requirements of the special industry?NoDuring the reporting period, the company accelerated the service convergence and synergetic development, the mainbusiness includes the circulation and service business of grain and oil reserves, trade and processing, and theproduction, research and development and sales of food raw materials (ingredients) mainly based on deep processingof tea and natural plants.
The grain and oil trade business are mainly rice, wheat, rice in the husk, corn, sorghum, cooking oil and othervarieties of grain and oil. According to the market conditions and the needs of upstream and downstream enterprises,the above-mentioned grain and oil products purchased are independently traded. The wheat, rice in the husk, corn,barley and sorghum in the trade products are the unprocessed grain, which are mainly used for the further processingof food and feed for providing raw material distribution service to customers such as large traders, feed and flourprocessing enterprises in the industry ; rice, flour and edible oil are the finished grain and oil, of which the mainconsumer groups are institutions, organizations, enterprises and public institutions, food deep processing enterprisesand community residents.The grain and oil processing business are mainly the processing and sale of flour, rice, cooking oil and other products.The company's flour brands and products include “Jinchangman”, “Yingshanhong” and “Hongli” series bread flour;“Clivia” and “Canna” series tailored flour for cakes and steamed bun; “Sunflower” high-gluten tailored flour andbiscuit tailored flour; “Feiyu” caramel treats tailored flour; “Yuejixiang” moon cake tailored flour and other varioussmall packages of flour. Rice products include “Shenliang Duoxi”, “Guzhixiang”, “Jinjiaxi”, “Runxiangliangpin”,“Hexiang”, “Shenliang Yushuiqing”, etc. Cooking oil products include brands such as “Shenliang Duoxi”,“Shenliang Fuxi”, “Hongli” and “Shenliang Yushuiqing”, etc. Shenliang Duoxi Changxiangdao Daohuaxiang Ricewas selected as the first batch of “China Good Grain and Oil” products of the National Grain Administration, and itwas the only selected product in Guangdong Province. The "Shenliang fish-water friendship" has formed a seriesof rice, noodles, oil, miscellaneous and special military supplies and military civilian brands.
The grain and oil reserve service business mainly provide dynamic grain and oil reserve services to localgovernments in Shenzhen, and provides local governments with market-oriented services such as grain and oilreserves, testing, and rotation in the form of business holdings. With the advantages of brand, reputation, experience,management, service, facilities and information system accumulated in the grain and oil market, we independentlyorganize and implement the procurement, storage, rotation, sales and other activities of the local governmentreserves of grain and oil, and ensure the quality, quantity and safety and other aspects of grain and oil reserves arein line with the requirements of the reserve grain and oil administrative authorities of local governments, providing
local governments with high-quality dynamic grain and oil reserve services to assist local food security.The company provides grain and oil circulation services such as warehousing and logistics, terminal loading andunloading, and quality inspection for upstream and downstream enterprises in the industrial chain. The ShenliangDongguan Grain Logistics Nodes Project construction and operation has been steadily advanced, completedstorehouse capacity of 320,000 tons (including 20,000 tons of gas film warehouse) and put the 10000-ton wharfberth into production, which achieved the storage transfer volume reached 1.2 million tons, and the terminal transfervolume was more than 400,000 tons; at the same time, the CDE silos with 510,000 tons of warehouse capacityunder construction, food deep processing projects, the terminal phase I and other projects are progressing smoothly.After the project is completed, it will become a comprehensive grain circulation service provider integrating fivefunctions including grain and oil terminal, transfer reserve, inspection and processing, processing industry, andmarket transaction. The subordinate Shenliang Quality Inspection has more than 100 professional equipments, hasobtained the qualification certificate of quality inspection organization, and was awarded the “Guangdong ShenzhenNational Grain Quality Monitoring Station”. There were more than 4,000 samples tested during the reporting period.The company also provides logistics services and cold chain delivery services to its customers. The above-mentioned integrated services of grain and oil supply chain and distribution is becoming an increasingly importantbusiness segment of the company.
The tea business mainly covers deep processing of tea, sales of fine tea, tea life experience, food and beverage, andtechnology research and development, etc. The main products include “Golden Eagle” instant tea powder, teaconcentrate and other series of tea products; “Jufangyong”, “Gutan”, “Fuhaitang” series of tea products; “Tri-Well”oyster sauce, chicken essence, seafood sauce and other series of condiments; “Shenbao” chrysanthemum tea, lemontea, herbal tea and other series of drinks.
II. Major changes in main assets
1. Major changes in main assets
| Major assets | Note of major changes |
| Equity assets | No major Change |
| Fixed assets | No major Change |
| Intangible assets | No major Change |
| Construction in progress | Investment for node project engineering from Shenliang Dongguan Logistic increased |
III. Core Competitiveness AnalysisDoes the Company need to comply with disclosure requirements of the special industry?No
During the reporting period, the company extended and expanded the development of grain and tea industry chain,deepened corporate reforms and strengthened the core competitive advantages of enterprises by optimizing resourceintegration. The company stimulated the vitality of the enterprise through innovative implementation of EVAperformance appraisal mechanism, promoted the sustainable development of the enterprise through the grainlogistics node project, promoted the reform of the grain and oil reserve mechanism by adhering to the marketizationdirection, and improves the management efficiency by continuously leading the information construction of thedomestic grain industry, prevented business risks by perfecting the management and control mode, and accumulatedstrengths in leapfrog development space by strengthening the corporate culture and talent management, and we haveembarked on a sustainable development path of traditional enterprise self-innovation and formed the company'sunique competitiveness.
1. Management Efficiency Advantage
The core management team of the company has rich experience and stable structure, and has a strong strategicvision and pragmatic spirit. It has formed a set of effective system to promote the high-quality development of thecompany by combining with the company’s actual development. The company vigorously promotes the innovationand transformation of business models, and actively promotes the transition from “trade-oriented enterprises” to“service-oriented enterprises”, and from “operational management and control” to “strategic management andcontrol”. In the business management and control, the company builds a “four-in-one” management and controlmodel that the “business operations and fund management, inventory management, and quality management”relatively separate and check and balance each other, at the same time, it strengthens risk management, budgetmanagement, plan management, contract management, customer management and brand management and othermeasures to effectively prevent operational risks. Through innovative talent management, the company hasestablished an open talent team to meet the long-term development of enterprises. The company has innovated andimplemented the EVA performance appraisal mechanism and established a result-oriented incentive and restraintassessment mechanism which effectively built the performance culture and stimulated the viability within theenterprise. 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 advantages
In terms of business layout and management, the company has deepened and subdivided its target markets, carriedout specialized operations in different areas of the grain and oil food industry chain, embraced the Internet, andgradually built a “trinity” of multilevel product supply network of terminal grain and oil e-commerce, catering anddistribution services, and bulk grain and oil trading services. In terms of e-commerce, the company vigorouslydeveloped new formats of grain, and actively promoted the development of new grain retail formats such as “Internet
+ Grain” and “Community Automatic Selling Grain Supply Centers”. It has already had the B2C Grain and OilNetwork Direct Selling Platform “Doximi .com”, and has opened channels on Tmall, Jingdong Mall and other e-commerce platforms to promote the online and offline deep integration of e-commerce platforms. In terms ofcatering and distribution, the company has built a one-stop distribution service platform for large-scale terminalcustomers such as chain catering and canteens of thousands of people. Food and oil trading services, the companybuilds a grain bulk commodity trading platform, efficiently integrates business flow “Shenliang Cereals TradingNetwork”, logistics and information flow, improves circulation efficiency, and provides spot trading, financing,logistics, quality inspection, transaction information and other services for internal business units, suppliers andcustomers. The company gives full play to the traction role of major projects such as grain logistics nodes,continuously improves the construction of the grain supply chain system, and promotes the sustainable developmentof enterprises.
3. Research and development technology advantages
The company attaches great importance to transforming and upgrading the traditional industries by moderntechnologies, and actively introduces a new generation of information technologies such as internet of things, cloudcomputing, big data and mobile internet into grain management. It takes the lead in promoting the construction of“standardization, mechanization, informationization and harmlessness” of warehouse management in the industry,independently develops “grain logistics information system” (Shenliang GLS), applies RFID technology and slipsheet equipment, introduces intelligent robots, and upgrades the grain depot operation efficiency and managementefficiency. The company has undertaken a number of national-level research projects, and multiple IT project resultshave won national, provincial and municipal awards. More than 30 information systems have been developed andrun normally. As of now, the company has 69 patents and 23 copyrights.
4. Advantages of quality control
The company gives full play to the advantages of products, channels, brands, warehousing, quality inspection, etc.,and truly provides good quality and safety products for the society. The company has established a quality controlsystem that is recognized by international large food and beverage enterprises. In the grain and oil business, thecompany’s subordinate enterprise, SZCG Quality Test, has the leading grain quality testing technology andequipment in the domestic grain industry, and has been officially incorporated into the national grain qualitysupervision and testing system, and has been awarded the “Guangdong Shenzhen National Grain QualityMonitoring Station” by the State Administration of Grain. The advanced testing technology selects and checks thegrain from the source, and timely and accurately checks the quality status of grain and oil in all aspects ofwarehousing, storage and delivery. Shenliang Quality Test has obtained the qualification certificate (CMA) fortesting and inspection institutions, and it is the first among domestic peers to include pesticide residues, heavy metalpollutants, mycotoxins and other hygienic indicators and taste value indicators in daily testing indicators, and hasthe detection ability of four types of indicators such as grain regular quality, storage quality, hygiene and eatingquality, which can meet the relevant quality inspection requirements of grain and oil products, and can accuratelyanalyze the nutritional ingredients and hygienic index of grain and determine its storage quality and eating quality.
5. Advantage of brand effect
The company regards “quality” as the cornerstone of establishing the enterprise brand, and takes “good service”
and “livelihood guarantee” as the brand’s core value, and has created a batch of “reliable grain”, “reliable flour” and“reliable oil” brand systems, and has formed good brand effects. The company has been selected as one of the “Top500 Chinese Service Enterprises” for five times, and has won the “China Top Ten Grain and Oil Group”, “ChinaTop 100 Grain and Oil Enterprise”, “China’s Most Respected Grain and Oil Enterprise”, “National Top 100 MilitarySupply Stations” and “Key Agricultural Leading Enterprises in Guangdong Province”, etc., and was awarded“Shenzhen Credit Enterprise”, “Shenzhen Old Brand”, “Leading Enterprises Strongly Support Grain and OilIndustrialization”, etc., the market influence of “Shenliang Yushuiqing”, “Shenliang Duoxi”, “Guzhixiang”,“Clivia”, “Shenliang Fuxi” and other brands has gradually expanded, and the subordinate flour company has wonthe title of “Shenzhen Old Brand”, and Shenliang Duoxi Changxiangdao Daohuaxiang rice has been selected as thefirst batch of “China Good Grain and Oil” products of the State Administration of Grain which is the only selectedproduct in Guangdong Province.
6. Comprehensive basic advantages
The company has a large-scale warehouse capacity in Shenzhen, it is the main force of Shenzhen's municipal grainreserves and the “rice bag” trusted by the public. At present, its own grain storage capacity is about 400,000 tons.Over the years, on the basis of giving priority to ensuring the government's macroeconomic regulation and controlof grain and guaranteeing the grain security, the company has been exploring the reform of the grain and oil reservesystem and mechanism, fully utilizing the operational characteristics and advantages of “dynamic rotation” andfully participating in market competition. In the process of market-oriented self-management, the companycontinues to optimize and innovate the grain storage logistics mode and the grain and oil distribution docking mode,so that the market competitiveness and regulation power have significantly enhanced, the main channel advantagesof grain and oil supply have been further stabilized, and the main position of grain and oil industry has furtherhighlighted. The company has established long-term, extensive and diversified cooperative relations with grain andoil traders, processors and end customers, and has built a wide business network and stable business channels. Ithas a high market share in the regional market and is rated as “Key Agricultural Leading Enterprise of GuangdongProvince” by the Department of Agriculture of Guangdong Province.
Section IV. Discussion and Analysis of the Operation
I. IntroductionDuring the reporting period, according to the annual key work and strategic planning objectives, the companyfocused on the post-restructuring integration development and corporate strategy reshaping, and effectively exertedthe leading role of party building, and implemented the reform requirements of “Double Hundred Actions”throughout the various key work. The main economic indicators in the first half of the year have been completedwell, the quality of main business development has been improved, the construction of strategic projects has beensteadily advanced, and the internal management and control level has been further improved.
1. Main business development
During the reporting period, the companybased on its own advantages and industrial development, used information technology, innovated and opened upthe grain and oil products supply channels and trading methods, created a new pattern for tea and food businessindustry, built a multi-group and multi-channel food supply chain and service network, expanded the effectivesupply of medium- and high-end grain, oil, and food, and strived to meet people's needs of "quality, diversity,nutrition, health, green, and convenience", and promoted the transformation of grain and oil products from "eat full"to "eat well".As the “grain security” project and “rice bag” in Shenzhen, the company completed the government grain and oilreserve service with quality and quantity guaranteed during the reporting period, the monthly average grain reservewas 1.065 million tons, and the monthly average oil reserve was 12,100 tons, which guaranteed the sufficient grainand oil supply and stable price in Shenzhen through the balanced rotation of grain and oil.During the reporting period, the company integrated and reconstructed the deep processing of tea and natural plants,and allocated the staff. Through integration, some businesses initially achieved stop loss or turnaround goals.
2. Key projects
During the reporting period, the construction and operation of the company's Dongguan grain logistics nodeprogressed smoothly. The construction of grain logistics and terminal supporting projects, CDE warehouse project,food deep processing projects and the first phase of the wharf have been steadily advanced according to the planand progress. The international foods wharf loaded and unloaded 128 vessels with a turnover of 180,000 tons. Thesubordinate Dongguan logistics company promoted the establishment of safety production standardization andachieved results, and was awarded the second-level enterprise of safety production standardization.During the reporting period, the company's northeast grain source base project achieved “breaking ice”. In order tospeed up the implementation of the “North Grain to the South, South Grain for Storage in North” strategy, thecompany set up the infrastructure office of the Northeast Grain Source Project to accelerate the construction of thegrain source base project. In June, the main project of the first phase of the Northeast Grain Source Base Project of150,000 tons has been started.During the reporting period, the company focused on promoting grain and oil platform transactions. At the 2
ndChina
Grain Trade Conference, “www.zglsjy.com.cn” further expanded the market influence and expanded new customersto bid and list trading on the basis of serving internal customers. As of June, the “www.zglsjy.com.cn” had a tradingvolume of 2.2 million tons.
3. Continuous innovation and development
During the reporting period, the company improved the efficiency of its operational management by increasing theapplication of informatization innovation results to ensure the sustainable and healthy development of enterprise.At present, the innovative R&D system with Shenliang research institute as the core and with the far-reaching data,the product research and development center of flour company, the doximi quality inspection R&D department, thetechnology center of reserve branch, the tea product and technology research and development center as the keysupports has been focusing on the innovation and research and development of informatization projects, guided bythe operational management needs and the development of the industry's most cutting-edge technology, planed andcompleted 14 informatization projects such as company management and control and innovation managementplatform. Up to now, the company has 69 patents and 23 software copyrights.
4. Other key tasks
(1) During the reporting period, the company completed the organizational restructuring, completed the changes ofcompany name, business scope, registered capital and securities short name, and completed the reelection of theboard of directors, the board of supervisors and senior management personnel. In accordance with the newregulatory requirements and relevant regulations and procedures, the company completed the combination andrevision of the internal systems to promote the improvement of corporate governance, and further enhanced themanagement effectiveness of the company through various effective measures.
(2) During the reporting period, the company implemented the relevant requirements of the “Double HundredActions” state-owned enterprise reform, further expanded the compensation system and incentive and restraintmechanism, and completed the overall market-based selection and employment of the management teams of somesubordinate units, and promoted the rotation exchange of key position talents, and further optimized the company'stalent echelon construction.
(3) During the reporting period, the company further strengthened fund management and control, and in accordancewith the centralized management mode of “internal bank” funds, promoted the online reporting platform, andeffectively supervised the expense reimbursement, capital expenditure and operating expenses of the companyheadquarters and subordinate units. At the same time, the company further improved the CBS fund managementinformation system function, and fully opened the bank-corporate direct linkage of 9 banks to realize the systemsupervision of banks and accounts. During the reporting period, the company promoted the subordinate units tooptimize the structure of the debts and achieved remarkable results.
(4) During the reporting period, the company built a new pattern of safe production, further strengthened the conceptof safe development, strictly implemented the responsibility system for production safety, consolidated thefoundation of safety management, investigated hidden dangers and immediately rectified them, and became the firstenterprise in the municipal state-owned assets system to complete the “double” prevention mechanisms and safetystandardization construction. The company closely followed the theme of “preventing risks, eliminating hiddendangers, and restraining accidents”, and has comprehensively launched the “Safe Production Month” activities.
In the first half of 2019, the company achieved a total operating income of RMB 4,782,167,700, an increase of 7.84%over the same period of the previous year (after restructuring); operating profit of RMB 235,345,700, an increaseof 7.38% over the same period of the previous year (after restructuring); net profit attributable to shareholders oflisted companies was RMB 203,168,900, an increase of 0.19% over the same period of the previous year (afterrestructuring).
II. Main business analysis
See the “I-Introduction” in “Discussion and Analysis of the Operation”Y-o-y changes of main financial data
In RMB
| Current period | Same period of last year | Y-o-y increase/decrease | Reasons for changes | |
| Operation revenue | 4,782,167,732.69 | 4,434,688,646.82 | 7.84% | |
| Operation cost | 4,262,101,770.62 | 3,962,753,163.26 | 7.55% | |
| Sales expenses | 112,553,742.74 | 120,452,104.30 | -6.56% | |
| Management expenses | 101,397,947.99 | 96,324,028.90 | 5.27% | |
| Financial expenses | 8,519,731.85 | -2,173,306.27 | 492.02% | Parts of the infrastructure of the node project from Shenliang Dongguan Logistic has been put into operation, expensed interest increased in the year; the exchange losses goes up on a y-o-y basis in the year |
| Income tax expense | 15,485,294.03 | 11,869,852.06 | 30.46% | Income tax expenses arising from settlement and payment in the period increased from a year earlier. |
| R&D investment | 4,211,474.91 | 2,977,062.54 | 41.46% | Strengthen R&D in the year and more investment occurred. |
| Net cash flow arising from operation activities | -389,429,629.75 | 52,861,245.30 | -836.70% | The cash received from labor service providing in first half of the year declined, and the cash paid for good purchasing increased, account payable declined. |
| Net cash flow arising from investment activities | -140,751,694.07 | -307,367,061.47 | 54.21% | First, the first half reserve grain and oil government service income advance funds of this year has not received; Second, the increases of the grain and oil stock caused the enlargement of operating activity cash outflow. |
| Net cash flow arising from financing | 88,425,677.74 | 66,419,850.49 | 33.13% | More loans from the bank, the net cash flow from financing activities changes due to the dividend distribution |
| activities | ||||
| Net increase of cash and cash equivalent | -441,723,854.29 | -184,996,984.35 | -138.77% | Net cash flow from operation activities has changes on a y-o-y basis |
| Operating revenue | Operating cost | Gross profit ratio | Increase or decrease of operating revenue over same period of last year | Increase or decrease of operating cost over same period of last year | Increase or decrease of gross profit ratio over same period of last year | |
| According to industries | ||||||
| Trading | 4,044,141,582.04 | 3,880,146,561.03 | 4.06% | 9.21% | 8.86% | 0.31% |
| According to products | ||||||
| Grain and oil trading and processing | 4,192,557,805.77 | 4,020,740,766.97 | 4.10% | 7.65% | 7.37% | 0.25% |
| According to region | ||||||
| Domestic sales | 4,770,863,075.53 | 4,252,262,350.62 | 10.87% | 7.76% | 7.45% | 0.26% |
| Amount | Ratio in total profit | Note | Whether be sustainable | |
| Investment income | 7,167,936.04 | 3.09% | Unsustainable | |
| Gains/losses of fair value variation | 28,381.21 | 0.01% | Unsustainable | |
| Asset impairment | -69,231,423.42 | -29.88% | Reasons including: If the reserve for depreciation of inventory has been calculated for the sold inventory, the reserve for depreciation of inventory has been carried forward to reduce the current main business cost. | Unsustainable |
| Non-operating income | 362,252.46 | 0.16% | Unsustainable |
| Non-operating expense | 3,982,019.95 | 1.72% | Unsustainable |
| End of current period | End of period of last year | Ratio changes | Notes of major changes | |||
| Amount | Ratio in total assets | Amount | Ratio in total assets | |||
| Monetary fund | 189,914,485.39 | 2.95% | 631,638,339.68 | 9.76% | -6.81% | The cash out-flow for operation activities purpose increased on a y-o-y basis |
| Account receivable | 617,831,167.71 | 9.60% | 473,646,886.64 | 7.32% | 2.28% | The first half reserve grain and oil government service income advance funds of this year has not received. |
| Inventory | 3,053,593,314.19 | 47.47% | 2,811,802,600.19 | 43.47% | 4.00% | Increase grain and oil stock according to demand |
| Investment property | 278,173,249.83 | 4.32% | 282,622,184.92 | 4.37% | -0.05% | |
| Long-term equity investment | 73,362,651.19 | 1.14% | 70,999,666.81 | 1.10% | 0.04% | |
| Fix assets | 967,835,524.07 | 15.05% | 993,136,743.51 | 15.35% | -0.30% | |
| Construction in process | 403,629,287.82 | 6.27% | 186,586,135.06 | 2.88% | 3.39% | Investment for the node project engineering for Shenliang Dongguan Logistic increased |
| Short-term loans | 30,590,000.00 | 0.48% | 91,600,000.00 | 1.42% | -0.94% | |
| Long-term loans | 777,384,100.20 | 12.09% | 516,687,791.66 | 7.99% | 4.10% | Long-term loans from node project engineering for Shenliang Dongguan Logistic increased |
| Items | Amount at the beginning | Changes of fair value | Accumulative changes of fair | Devaluation of | Amount of | Amount of sale | Amount in the end of period |
| period | gains/losses in this period | value reckoned into equity | withdrawing in the period | purchase in the period | in the period | ||
| Financial assets | |||||||
| 1. Trading financial assets (excluding derivative financial assets) | 1,124,927.96 | 28,381.21 | 1,153,309.17 | ||||
| Aforementioned total | 1,124,927.96 | 28,381.21 | 0.00 | 0.00 | 0.00 | 0.00 | 1,153,309.17 |
| Financial liabilities | 0.00 | 0.00 | 0.00 | ||||
| Item | Original book value | Book value at period-end | Reasons for restriction |
| Intangible assets | 92,328,788.83 | 83,859,264.48 | According to the long-term loan mortgage contract signed by the subsidiary Dongguan Logistics and Agricultural Development Bank, Dongguan Logistics mortgaged the land DFGY (2014) DT No. 6 and the future built-up grain storage and wharf supporting facilities and other buildings and structures on the ground of No. 32, Jianshe Road, Masan Village, Machong Town, Dongguan City to the Agricultural Development Bank as collaterals for the loan. In addition, according to the loan contract “44191000-2018 (Dongben) Zi No.0100” signed by Dongguan Logistics and Agricultural Development Bank, Dongguan Logistics mortgaged the land “Yue (2016) DGSBDCQ No. 0028527” to the Agricultural Development Bank as a collateral for the loan. |
| Fixed assets | 400,834,811.27 | 371,805,770.40 | |
| Construction in process | 76,182,755.87 | 76,182,755.87 | |
| Intangible assets | 45,580,368.97 | 35,798,712.71 | According to the loan contract Yue DG 2017 NGDZ No. 006 signed by Dongguan Food Industry Park and Bank of Communications Co., Ltd. Dongguan Branch, Dongguan Food Industry Park 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. |
| Total | 614,926,724.94 | 567,646,503.46 |
| Investment in reporting period (Yuan) | Investment in the same period of last year (Yuan) | Range |
| 244,767,336.46 | 0.00 | 100.00% |
2. The major equity investment obtained in the reporting period
□ Applicable √ Not applicable
3. The major non-equity investment carrying in the reporting period
√ Applicable □ Not applicable
In RMB
| Item | Investment ways | Whether it is the investment for fixed assets (Y/N) | Industry with the investment involved | Amount input in the period | Accumulated actual input as of the end of reporting period | Capital resources | Progress | Estimated revenue | Income accumulated at end of the reporting period | Reasons for failure to achieve planned progress and expected benefits | Disclosure date (if applicable) | Disclosure index (if applicable) |
| Grain storage and wharf complementary engineering of Dongguan Shenliang Logistics Co., Ltd. | Self-build | Y | Storage and wharf | 15,220,775.52 | 316,826,549.21 | Owned Funds and Bank Loans | 79.21% | 43,363,000.00 | 62,584,926.78 | - | ||
| Grain storage and wharf complementary engineering (Phase II) of Dongguan Shenliang Logistics Co., Ltd. | Self-build | Y | Storage and wharf | 179,679,302.57 | Owned Funds and Bank Loans | 100.00% | - | |||||
| Food logistics and wharf matching project of Dongguan Shenliang Logistics Co., Ltd. | Self-build | Y | Warehouse logistic | 14,141,959.70 | 25,213,182.62 | Owned Funds | 5.12% | - | ||||
| Warehouse logistic | Self-build | Y | Warehouse | 146,326,592.24 | 417,764,182.46 | Owned | 43.14% | 37,108,900.00 | - |
| distribution center of Dongguan International Food Industrial Park Development Co., Ltd. | logistic | Funds and Bank Loans | ||||||||||
| Food processing project of Dongguan Shenliang Oil & Food Trade Co., Ltd. | Self-build | Y | Flour processing | 36,906,337.84 | 76,182,755.87 | Owned Funds | 26.09% | - | ||||
| Land use right | Self-build | N | Construction | 24,179,185.60 | 227,922,642.82 | Owned Funds | - | |||||
| Total | -- | -- | -- | 236,774,850.90 | 1,243,588,615.55 | -- | -- | 80,471,900.00 | 62,584,926.78 | -- | -- | -- |
| Variety of securities | Code of securities | Short form of securities | Initial investment cost | Accounting measurement model | Book value at the beginning of the period | Changes in fair value of the current profit and loss | Cumulative fair value changes in equity | Current purchase amount | Current sales amount | Profit and loss in the Reporting Period | Book value at the end of the period | Accounting subject | Capital Source |
| Domestic and overseas stock | 000017 | CBC-A | 0.00 | Measured by fair value | 1,124,927.96 | 28,381.21 | 0.00 | 0.00 | 0.00 | 28,381.21 | 1,153,309.17 | Trading financial assets | Shares repaid from debt reorganization |
| Total | 0.00 | -- | 1,124,927.96 | 28,381.21 | 0.00 | 0.00 | 0.00 | 28,381.21 | 1,153,309.17 | -- | -- | ||
| Disclosure date of securities investment approval of the Board | Not applicable |
| Disclosure date of securities investment approval of the Shareholder Meeting (if applicable) | Not applicable |
| Company name | Type | Main business | Register capital | Total assets | Net Assets | Operating revenue | Operating profit | Net profit |
| Shenzhen Cereals Group Co., Ltd | Subsidiary | Grain & oil trading processing、Grain and oil reserve service | 1,530,000,000.00 | 5,701,507,859.86 | 3,727,498,207.39 | 4,614,789,800.67 | 245,205,307.45 | 228,906,380.61 |
| Shenzhen Flour Co., Ltd | Subsidiary | Grain & oil trading processing | 30,000,000.00 | 958,911,346.84 | 270,170,166.90 | 1,310,067,982.82 | 34,184,781.83 | 34,160,150.52 |
| Shenzhen Hualian Grain & Oil Trade Co., ltd. | Subsidiary | Grain & oil trading | 31,180,000.00 | 961,870,154.63 | 225,250,597.47 | 1,706,053,677.49 | 24,141,077.31 | 24,141,077.31 |
Particular about subsidiaries obtained or disposed in report period
□ Applicable √ Not applicable
Explanation on main holding/stock-jointly enterprise
Shenzhen Cereals Group Co., Ltd., its business scope includes 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 also available);information service business (internet information service business only) (operating with value-addedtelecommunications service business license Guangdong B2-20100081, with a limited period to February 11, 2015);storage (operated by branches); ordinary freight, professional transportation (refrigerated fresh storage) (operatedby road transport license No. 440300155916, valid until June 30, 2014); development, operation and managementof free property; providing management services for hotels; investing and setting up industries (specific projects areseparately declared); domestic trade (excluding franchise, exclusive control, and monopoly commodities); engagingin import and export business (except for projects prohibited by laws, administrative regulations, and decision ofthe State Council, restricted projects can be operated only after obtaining permission). Register capital was1,530,000,000 Yuan. Ended as this period, total assets amounted as 5,701,507,859.86 Yuan, and net assetsamounting to 3,727,498,207.39 Yuan, shareholders’ equity attributable to parent Company is 3,541,962,524.81 Yuan;in the reporting period, achieved operation income, net profit and net profit attributable to shareholder of parentCompany as 4,614,789,800.67 Yuan, 228,906,380.61 Yuan and 215,226,820.22 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 Yuan. Ended as this period, total assets amounted as958,911,346.84 Yuan, and net assets amounting to 270,170,166.90 Yuan, shareholders’ equity attributable to parentCompany is 270,170,166.90 Yuan; in the reporting period, achieved operation income, net profit and net profitattributable to parent Company as 1,310,067,982.82 Yuan, 34,160,150.52Yuan and 34,160,150.52 Yuan respectively.Shenzhen Hualian Grain and Oil Trade Co., Ltd., business scope: general operational projects include domestictrade (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, administrativeregulations, and decision of the State Council, restricted projects can be operated only after obtaining permission);online feed sales; information consultation, self-owned housing leasing (excluding talent agency services and otherrestricted items); international freight forwarding, domestic freight forwarding (can only be operated after beingapproved by the transport department if laws, administrative regulations, State Council decision require the approvalof transport department); license business projects include purchase and sale of grain and oil, online sales of grainand oil; information service business (internet information service business only). Register capital was RMB31,180,000. Ended as this period, total assets amounted as RMB 961,870,154.63, and net assets amounting to RMB225,250,597.47, shareholders’ equity attributable to parent Company is RMB 225,250,597.47; in the reporting
period, achieved operation income, net profit and net profit attributable to parent Company as RMB1,706,053,677.49, RMB 24,141,077.31 and RMB 24,141,077.31 respectively.
VIII. Structured vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Prediction of business performance from January – September 2019Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the warningof its material change compared with the corresponding period of the last year and explanation on reason
□ Applicable √ Not applicable
X. Risks and countermeasures
1. Affected by a series of unfavorable factors such as Sino-US trade friction and African swine fever, the overallenvironment of the grain, feed, food and other domestic industries has been greatly affected, and the company'soperations are facing greater pressure. In contrast to the annual work objectives and requirements, there is still agap between the company's work and the annual mission plan requirements. In the second half of the year, thecompany will focus on deepening enterprise reform, firming the strategic projects construction, improvingoperational efficiency, concentrating on innovation-driven leading, and expanding business channels to ensure thecompletion of annual work goals.
2. Faced with the changing consumption trends in recent years and the increasing scale of the company's businessand the more complex business structure, the company's reserves in professional talents, key talents, andcomprehensive talents are relatively insufficient, so the company showed slight weakness in innovation ability andcontingency ability when cultivating new business and facing new field. The company will focus on strategic andbusiness development needs, innovate talent training, accelerate talent introduction, strengthen talent echelonconstruction and innovative talent reserves, open up development channels for employees, create careerdevelopment opportunities, and provide kinetic energy for the company's sustainable development.
Section V. Important Events
I. Annual General Meeting and extraordinary shareholders general meeting held in this period
1. AGM in the period
| Sessions | Type | Investor participation (%) | Opening date | Disclosure date | Disclosure index |
| The First Interim Shareholders General Meeting of 2019 | Interim Shareholders General Meeting | 63.83% | 2019-01-18 | 2019-01-19 | Resolution Notice of The First Interim Shareholders General Meeting of 2019 of Shenzhen Shenbao Industrial Co., Ltd. (Notice No.: 2019-10) released on Juchao website dated 19 Jan. 2019 |
| The Second Interim Shareholders General Meeting of 2019 | Interim Shareholders General Meeting | 63.83% | 2019-01-30 | 2019-01-31 | Resolution Notice of The Second Interim Shareholders General Meeting of 2019 of Shenzhen Shenbao Industrial Co., Ltd. (Notice No.: 2019-14) released on Juchao website dated 31 Jan. 2019 |
| The Thrid Interim Shareholders General Meeting of 2019 | Interim Shareholders General Meeting | 63.82% | 2019-02-21 | 2019-02-22 | Resolution Notice of The Third Interim Shareholders General Meeting of 2019 of Shenzhen Shenbao Industrial Co., Ltd. (Notice No.: 2019-21) released on Juchao website dated 22 Feb. 2019 |
| 2018 Annual general meeting | Annual general meeting | 63.80% | 2019-05-20 | 2019-05-21 | Resolution Notice of AGM 2018 of Shenzhen Shenbao Industrial Co., Ltd. (Notice No.: 2019-45) released on Juchao website dated 21 May 2019 |
the half year
III. Commitments completed in Period and those without completed till end of the Period fromactual controller, shareholders, related parties, purchaser and companies etc.
□ Applicable √ Not applicable
There are no commitments completed in Period and those without completed till end of the Period from actual controller, shareholders,related parties, purchaser and companies etc.IV. 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 period
VIII. 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 | Resulted an accrual liability (Y/N) | Progress | Trial result and influence | Execution of judgment | Disclosure date | Disclosure index |
| thousand Yuan) | |||||||
| During the reporting period, the litigation matters mainly including: Disputes over sales contract, principal-agent contract disputes, infringement disputes, loan contract disputes and so on | 5,291.98 | No, the event is related to routine operation of the Company with minor amount. Judging from the progress of the case, relevant litigation do not constitute a significant impact on the Company | Relevant litigation-related matters are executed by legal dept. Of the Company and external laws firms. The matters will litigation involved are carry out the promotion according to relevant process currently. | Judging from the litigation, it does not have a significant impact on the Company | In processing | Not applicable | Not applicable |
3. Related transaction of foreign investment
□ Applicable √ Not applicable
No related transaction of foreign investment occurred at period-end
4. Related credits and liabilities
□ Applicable √ Not applicable
No related credits and liabilities occurred in period
5. Other major related transaction
□ Applicable √ Not applicable
No other major related transaction in the PeriodXIII. 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.XIV. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable √ Not applicable
No trusteeship for the Company in reporting period
(2) Contract
□ Applicable √ Not applicable
No contract for the Company in reporting period
(3) Leasing
□ Applicable √ Not applicable
No leasing in the Period
2. Major Guarantee
√ Applicable □ Not applicable
(1) Guarantee
In 10 thousand Yuan
| External Guarantee (not including guarantees to subsidiaries) | ||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening (Date of signing agreement) | Actual guarantee limit | Guarantee type | Guarantee term | Complete implementation or not | Guarantee for related party |
| Guarantee between the Company and subsidiary | ||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening (Date of signing agreement) | Actual guarantee limit | Guarantee type | Guarantee term | Complete implementation or not | Guarantee for related party |
| Dongguan Shenliang Logistics Co., Ltd. | 27,300 | 2015-07-13 | 21,281 | Joint liability guaranty | 8 years | N | Y | |
| Dongguan Shenliang Logistics Co., Ltd. | 10,200 | 2016-12-21 | 5,090 | Joint liability guaranty | 5 years | N | Y | |
| Dongguan International Food Industrial Park Development Co., Ltd. | 39,168 | 2018-07-27 | 24,663 | Joint liability guaranty | 14 years | N | Y | |
| Shenzhen Shenbao Huacheng Science and Technology Co., Ltd. | 3,000 | 2018-07-26 | 3,000 | Joint liability guaranty | 1 year | N | Y | |
| Dongguan Shenliang Logistics Co., Ltd. | 21,930 | 2019-01-25 | 250 | Joint liability guaranty | 12 years | N | Y | |
| Dongguan Shenliang Oil & Food Trade Co., Ltd. | 11,883 | 2019-04-19 | 1,852 | Joint liability guaranty | 8 years | N | Y | |
| Total amount of approving | 33,813 | Total amount of actual | 10,680 | |||||
| guarantee for subsidiaries in report period (B1) | occurred guarantee for subsidiaries in report period (B2) | ||||||||
| Total amount of approved guarantee for subsidiaries at the end of reporting period (B3) | 113,481 | Total balance of actual guarantee for subsidiaries at the end of reporting period (B4) | 56,136 | ||||||
| Guarantee between the subsidiaries | |||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening (Date of signing agreement) | Actual guarantee limit | Guarantee type | Guarantee term | Complete implementation or not | Guarantee for related party | |
| Total amount of guarantee of the Company (total of three above mentioned guarantee) | |||||||||
| Total amount of approving guarantee in report period (A1+B1+C1) | 33,813 | Total amount of actual occurred guarantee in report period (A2+B2+C3) | 10,680 | ||||||
| Total amount of approved guarantee at the end of report period (A3+B3+C2) | 113,481 | Total balance of actual guarantee at the end of report period (A4+B4+C4) | 56,136 | ||||||
| The proportion of the total amount of actually guarantee in the net assets of the Company (that is A4+ B4+C4) | 13.18% | ||||||||
| Including: | |||||||||
| Amount of guarantee for shareholders, actual controller and its related parties (D) | 0 | ||||||||
| The debts guarantee amount provided for the guaranteed parties whose assets-liability ratio exceed 70% directly or indirectly (E) | 53,136 | ||||||||
| 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) | 53,136 | ||||||||
XV. Social responsibility
1. Major environment protection
The listed Company and its subsidiary whether belong to the key sewage units released from environmental protection departmentNoThe company and its subsidiaries do not belong to the key pollutant discharge units announced by the environmental protectiondepartment.
2. Execution of social responsibility of targeted poverty alleviation
(1) Plan of targeted poverty alleviation
In 2019, Shenzhen Cereals Holdings continues to use the socialism with Chinese characteristics of Xi Jinping newera of as a guide to carry out the targeted poverty alleviation work to help Guilin Village, Yidu Town, LongchuanCounty, Heyuan City, in accordance with spirit of the document of “Implementation Opinions on the Three-YearPlan for Poverty Alleviation in the New Period (Yuefa [2016] No. 13)” of the Guangdong Provincial PartyCommittee and the Provincial Government, the overall goal and task of Guilin Village's targeted poverty alleviationis to achieve the goal of making the relatively poor population be free from worry of food and clothing and beguaranteed with compulsory education, basic medical care and housing security by the end of 2019, and making theindicators of main areas of basic public services be equivalent to the provincial average, and getting 52 householdsand 144 people all out of poverty. In order to implement the poverty alleviation work, the residency povertyalleviation work team of Shenzhen Cereals Holdings adopted the following effective assistance measures under thecorrect leadership of the company's party committee: First, in the aspect of industrial assistance. By holding trainingcourses, participating in exhibitions to help the selling of tea, providing public welfare jobs, handling small loans,encouraging migrant workers, guiding the cultivation of tea, increasing the planting area, using the “reward forcompensation” financial funds and Shenliang help fund investment dividends and other various new forms and newmethods to help poor households and village collectives to increase their income. The second is to continue toincrease the support of medical care and education so as to solve the worries of poor households. Third, in terms ofvillage infrastructure, the village service center project and the water purification project will be put into use by theend of 2019.
(2) Summary of semi-annual targeted poverty alleviation
In the first half of 2019, Shenzhen Cereals Holdings invested RMB 1,000,900 in poverty alleviation funds (notincluding consolation money and goods and materials), which is used to improve infrastructure construction,increase the collective economic income of the village, improve the rural living environment, and support medicalcare and education, etc.Performance and effect: First, in the aspect of industrial assistance, carried out poverty alleviation work in the mode
of “company + cooperative + farmer + base”, guided the large tea farmers to actively buy tea from more than 20poor households with working ability, which solved the marketing problem of poor households’ tea to a certainextent, Stimulate the production enthusiasm of poor households; utilized the “substituting and complementing thefinancial funds with rewards” to guide the 20 poor households with labor capacity to invest in the NanyuewangCompany and the Aodingfeng Tea Cooperative, it is estimated that by the end of 2019, the dividends of these twoinvestments will reach RMB 98,300, with an average income of RMB 4,914 per household; At the same time,Shenzhen Cereals Holdings appropriated RMB 500,000 to help the Guilin Village Committee invest in theNanyuewang Company, which can bring about RMB 60,000 of dividends every year and effectively increase thecollective income. Second, it organized the tea-planting farmers to participate in the Shenzhen Spring Tea Expo anda variety of other trade fairs, which not only strengthened exchange with peers but also enhanced the popularity of"Guilin Tea". Third, in the improvement of village infrastructure and public services, Shenzhen Cereals Holdingspre-invested RMB 790,000 to help Guilin Village build a village service center to effectively improve theenvironment of the village committee office and villagers' activities, the company has already paid RMB 390,000.The fourth is to invest RMB 77,600 in medical care and education to help the villagers living in Guilin Village tohandle new rural cooperative medical insurance, strengthen medical security, and reduce villagers' burden inpreventing and curing disease; applied for subsidy of RMB 33,500 from the Shenzhen Charity Federation for thechildren of 5 poor households, which effectively reduced the economic burden in schooling of poor households;invested RMB 10,800 to install LED display and toilet door partition, clean the campus environment, and purchasecleaning tools for Guilin Primary School. In the first half of 2019, there were 52 poor households with 144 peoplein Guilin Village, all of which have reached poverty alleviation conditions.
(3) Performance of targeted poverty alleviation
| Target | Measurement unit | Numbers/ implementation |
| i. Overall | —— | —— |
| Including:1. fund | 10 thousand yuan | 100.09 |
| 2. Material discount | 10 thousand yuan | 1.08 |
| 3.number of poverty-stricken populations eliminating poverty with card for archives established | Person | 144 |
| ii. Invested by specific project | —— | —— |
| 1.Industrial development poverty | —— | —— |
| Including: 1.1Type | —— | Poverty Alleviation by Asset Income |
| 1.2 numbers of industrial development poverty | Number | 1 |
| 1.3Amount input | 10 thousand | 50 |
| yuan | ||
| 1.4number of poverty-stricken population eliminating poverty with card for archives established | Person | 7 |
| 2.Transfer employment | —— | —— |
| Including: 2.1 Amount input for vocation skills training | 10 thousand yuan | 0 |
| 2.2 Number of vocation skills training | Person-time | 0 |
| 2.3 Number of poverty-stricken populations achieving employment with card for archives established | Person | 0 |
| 3.Relocation the poor | —— | —— |
| Including: 3.1 Number of employed persons from relocated households | Person | 0 |
| 4.Education poverty | —— | —— |
| Including: 4.1 Amount input for subsidizing the impoverished students | 10 thousand yuan | 0 |
| 4.2Number of subsidized poor student s | Person | 0 |
| 4.3Amount input for improving the education resources in poverty-stricken areas | 10 thousand yuan | 1.08 |
| 5.Health poverty alleviation | —— | —— |
| Including: 5.1 Amount input for medical and health resources in poverty-stricken areas | 10 thousand yuan | 7.76 |
| 6.Ecological protection and poverty alleviation | —— | —— |
| Including: 6.1 Type | —— | Environmental Cleaning and Maintenance |
| 6.2Amount input | 10 thousand yuan | 1.51 |
| 7.Fallback protection | —— | —— |
| Including: 7.1 Amount input for Three Stay Behind persons | 10 thousand yuan | 0 |
| 7.2Number of Three Stay Behind persons help | Person | 0 |
| 7.3Amount input for poor disabled persons | 10 thousand yuan | 0 |
| 7.4Number of poor disabled persons help | Person | 0 |
| 8.Social poverty alleviation | —— | —— |
| Including: 8.1Amount of the poverty alleviation cooperation between the Eastern and Western regions | 10 thousand yuan | 0 |
| 8.2Amount for targeted poverty alleviation | 10 thousand | 0 |
| yuan | ||
| 8.3Amount for the poverty alleviation public welfare fund | 10 thousand yuan | 0 |
| 9.Other | —— | —— |
| Including: 9.1. number of items | Number | 3 |
| 9.2. Amount input | 10 thousand yuan | 39.74 |
| 9.3. number of poverty-stricken populations eliminating poverty with card for archives established | Person | 139 |
| iii. Awards (content and grade) | —— | —— |
| Outstanding contributions to poverty alleviation for 2016-2018 in Heyuan - Li Suiyang |
There are no other important events to be explained in the company's reporting period.
XVII. Significant event of subsidiary of the Company
□ Applicable √ Not applicable
Section VI. Changes in Shares and Particulars about Shareholders
I. Changes in Shares
1. Changes in shares
In Share
| Before the Change | Increase/Decrease in the Change (+, -) | After the Change | |||||||
| A mount | Proportion | New shares issued | Bonus shares | Capitalization of public reserve | Others | Subtotal | A mount | Proportion | |
| I. Restricted shares | 684,821,396 | 59.42% | 0 | 0 | 0 | 0 | 0 | 684,821,396 | 59.42% |
| 1. State-owned shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 2. State-owned corporate shares | 669,184,735 | 58.06% | 0 | 0 | 0 | 0 | 0 | 669,184,735 | 58.06% |
| 3. Other domestic shares | 15,583,326 | 1.35% | 0 | 0 | 0 | 0 | 0 | 15,583,326 | 1.35% |
| Including: Domestic legal person’s shares | 15,384,832 | 1.33% | 0 | 0 | 0 | 0 | 0 | 15,384,832 | 1.33% |
| Domestic nature person’s shares | 198,494 | 0.02% | 0 | 0 | 0 | 0 | 0 | 198,494 | 0.02% |
| 4. Foreign shares | 53,335 | 0.01% | 0 | 0 | 0 | 0 | 0 | 53,335 | 0.01% |
| Including: Foreign corporate shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| overseas nature person’s share | 53,335 | 0.01% | 0 | 0 | 0 | 0 | 0 | 53,335 | 0.01% |
| II. Un-restricted shares | 467,713,858 | 40.58% | 0 | 0 | 0 | 0 | 0 | 467,713,858 | 40.58% |
| 1. RMB common shares | 415,964,578 | 36.09% | 0 | 0 | 0 | 0 | 0 | 415,964,578 | 36.09% |
| 2. Domestically listed foreign shares | 51,749,280 | 4.49% | 0 | 0 | 0 | 0 | 0 | 51,749,280 | 4.49% |
| 3. Foreign listed foreign shares | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| 4. Other | 0 | 0.00% | 0 | 0 | 0 | 0 | 0 | 0 | 0.00% |
| III. Total shares | 1,152,535,254 | 100.00% | 0 | 0 | 0 | 0 | 0 | 1,152,535,254 | 100.00% |
□ Applicable √ Not applicable
Progress of shares buy-back
□ Applicable√Not applicable
Implementation progress of the reduction of repurchases shares by centralized bidding
□ Applicable√Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholdersof Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
2. Changes of restricted shares
□ Applicable √ Not applicable
II. Securities issuance and listing
□ Applicable √ Not applicable
III. Amount of shareholders and particulars about shares holding
In Share
| Total common stock shareholders in reporting period-end | 1,152,535,254 | Total preference shareholders with voting rights recovered at end of reporting period (if applicable) (found in note8) | 0 | ||||||
| Particulars about shares held above 5% by common shareholders or top ten common shareholders | |||||||||
| Full name of Shareholders | Nature of shareholder | Proportion of shares held | Total common shares hold at the end of report period | Changes in report period | Amount of restricted common shares held | Amount of un-restricted common shares held | Number of share pledged/frozen | ||
| State of share | Amount | ||||||||
| Shenzhen Fude State-Owned Capital Operation Co., Ltd. | State-owned legal person | 63.79% | 735,237,253 | 0 | 669,184,735 | 66,052,518 | |||
| Shenzhen Agricultural Products Co., Ltd | State-owned legal person | 8.23% | 94,832,294 | 0 | 15,384,832 | 79,447,462 | |||
| Sun Huiming | Domestic nature person | 0.30% | 3,436,462 | 0 | 0 | 3,436,462 | |||
| Bohai Securities Co., Ltd. | State-owned | 0.26% | 2,980,500 | 2,980,500 | 0 | 2,980,500 | |||
| legal person | ||||||||||
| Hu Xiangzhu | Domestic nature person | 0.24% | 2,800,000 | 170,000 | 0 | 2,800,000 | ||||
| Lin Junbo | Domestic nature person | 0.17% | 2,000,000 | 542,100 | 0 | 2,000,000 | ||||
| Central Huijin Asset Management Co., Ltd. | State-owned legal person | 0.13% | 1,472,625 | 0 | 0 | 1,472,625 | ||||
| Li Qian | Domestic nature person | 0.11% | 1,309,661 | 30,470 | 0 | 1,309,661 | ||||
| Li Yongqi | Domestic nature person | 0.10% | 1,099,205 | -9,000 | 0 | 1,099,205 | ||||
| Cai Congda | Domestic nature person | 0.09% | 1,080,051 | 1,080,051 | 0 | 1,080,051 | ||||
| Strategy investors or general corporation comes top 10 common shareholders due to rights issue (if applicable) (see note 3) | N/A | |||||||||
| Explanation on associated relationship among the aforesaid shareholders | Shenzhen SASAC directly holds 100% equity of Fude Capital, and holds 34% of Agricultural Products indirectly through Fude Capital; the Company was not aware of any related relationship between other shareholders above, and whether they belonged to parties acting in concert as defined by the Acquisition Management Method of Listed Company. | |||||||||
| Particular about top ten common shareholders with un-restrict shares held | ||||||||||
| Shareholders’ name | Amount of un-restrict common shares held at Period-end | Type of shares | ||||||||
| Type | Amount | |||||||||
| Shenzhen Fude State-Owned Capital Operation Co., Ltd. | 79,447,462 | RMB common shares | 79,447,462 | |||||||
| Shenzhen Agricultural Products Co., Ltd | 66,052,518 | RMB common shares | 66,052,518 | |||||||
| Sun Huiming | 3,436,462 | Domestically listed foreign shares | 3,436,462 | |||||||
| Bohai Securities Co., Ltd. | 2,980,500 | RMB common shares | 2,980,500 | |||||||
| Hu Xiangzhu | 2,800,000 | RMB common | 2,800,000 | |||||||
| shares | |||
| Lin Junbo | 2,000,000 | RMB common shares | 2,000,000 |
| Central Huijin Asset Management Co., Ltd. | 1,472,625 | RMB common shares | 1,472,625 |
| Li Qian | 1,309,661 | RMB common shares | 1,309,661 |
| Li Yongqi | 1,099,205 | RMB common shares | 1,099,205 |
| Cai Congda | 1,080,051 | RMB common shares | 1,080,051 |
| Expiation on associated relationship or consistent actors within the top 10 un-restrict shareholders and between top 10 un-restrict shareholders and top 10 shareholders | Shenzhen SASAC directly holds 100% equity of Fude Capital, and holds 34% of Agricultural Products indirectly through Fude Capital; the Company was not aware of any related relationship between other shareholders above, and whether they belonged to parties acting in concert as defined by the Acquisition Management Method of Listed Company. | ||
| Explanation on top 10 shareholders involving margin business (if applicable) (see note 4) | Shareholder Li Yongqi holds 1,097,205 shares of the Company under customer credit trading secured securities account through Xingye Securities Co., ltd, common account holds 2,000 shares, and 1,099,205 shares are held by Li in total at end of the Period. During the reporting period, the credit trading secured securities account has 9,100 shares decreased, and 100 shares increased in the common account, shares held by Li are decreased 9,000 shares in total. | ||
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the Period.
Section VIII. Particulars about Directors, Supervisor and Senior
Executives
I. Changes of shares held by directors, supervisors and senior executives
□ Applicable √ Not applicable
No change of shares held by directors, supervisors and senior executives, found more details in Annual Report 2018.II. Changes of directors, supervisors and senior executives
√ Applicable □ Not applicable
| Name | Position | Type | Date | Causes |
| Zhu Junming | Party Secretary, Chairman | Election | 2019-02-21 | Election of the Board of Directors |
| Hu Xianghai | Deputy party secretary, Director, GM | Election | 2019-02-21 | Election of the Board of Directors |
| Lu Qiguang | Deputy party secretary, Director | Election | 2019-02-21 | Election of the Board of Directors |
| Jin Zhenyuan | Director, CFO | Election | 2019-02-21 | Election of the Board of Directors |
| Zhao Rubing | Independent director | Election | 2019-02-21 | Election of the Board of Directors |
| Bi Weimin | Independent director | Election | 2019-02-21 | Election of the Board of Directors |
| Liu Haifeng | Independent director | Election | 2019-02-21 | Election of the Board of Directors |
| Wang Huimin | SCID, Chairman of supervisory committee | Election | 2019-02-21 | Election of the Board of Supervisors |
| Liu Ji | Supervisor | Election | 2019-02-21 | Election of the Board of Supervisors |
| Qian Wenying | Supervisor | Election | 2019-02-21 | Election of the Board of Supervisors |
| Zheng Shengqiao | Staff supervisor | Election | 2019-02-21 | Election of workers' Congress |
| Du Jianguo | Staff supervisor | Election | 2019-02-21 | Election of workers' Congress |
| Cao Xuelin | Deputy GM | Appointment | 2019-02-21 | Appointment of the Board of Directors |
| Ye Qingyun | Deputy GM | Appointment | 2019-02-21 | Appointment of the Board of Directors |
| Dai Bin | Deputy GM | Appointment | 2019-02-21 | Appointment of the Board of Directors |
| Wang Fangcheng | Secretary of the Board | Appointment | 2019-02-21 | Appointment of the Board of |
| Directors | ||||
| Zheng Yuxi | Party Secretary, Chairman | Term of office expires and leave the office | 2019-02-21 | Term of office expires and is not renewed |
| Zhang Guodong | Director | Term of office expires and leave the office | 2019-02-21 | Term of office expires and is not renewed |
| Fan Zhiqing | Independent director | Term of office expires and leave the office | 2019-02-21 | Term of office expires and is not renewed |
| Wu Shuping | Independent director | Term of office expires and leave the office | 2019-02-21 | Term of office expires and is not renewed |
| Chen Cansong | Independent director | Term of office expires and leave the office | 2019-02-21 | Term of office expires and is not renewed |
| Yan Zesong | Director, GM | Term of office expires and leave the office | 2019-02-21 | Term of office expires and is not renewed |
| Li Yiyan | Director, Deputy GM, Secretary of the Board | Term of office expires and leave the office | 2019-02-21 | Term of office expires and is not renewed |
| Lin Hong | Chairman of supervisory committee | Term of office expires and leave the office | 2019-02-21 | Term of office expires and is not renewed |
| Luo Longxin | Staff supervisor | Term of office expires and leave the office | 2019-02-21 | Term of office expires and is not renewed |
| Qian Xiaojun | Deputy GM | Term of office expires and leave the office | 2019-02-21 | Term of office expires and is not renewed |
| Yao Xiaopeng | Deputy GM | Term of office expires and leave the office | 2019-02-21 | Term of office expires and is not renewed |
| Wang Zhiping | CFO | Term of office expires and leave the office | 2019-02-21 | Term of office expires and is not renewed |
| Wang Fangcheng | Secretary of the Board | Dismiss | 2019-06-13 | Job transfer |
Section IX. Corporate Bonds
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date whensemi-annual report approved for released or fail to cash in full on dueNo
Section X. Financial Report
I. Audit reportsWhether the semi-annual report was audited or not
□ Yes √ No
The financial report of this semi-annual report was unaudited
II. Financial statements
Units in Notes of Financial Statements is RMB
1. Consolidated Balance Sheet
Prepared by SHENZHEN CEREALS HOLDINGS CO., LTD.
2019-06-30
In RMB
| Item | 2019-6-30 | 2018-12-31 |
| Current assets: | ||
| Monetary funds | 189,914,485.39 | 631,638,339.68 |
| Settlement provisions | ||
| Capital lent | ||
| Tradable financial assets | 1,153,309.17 | |
| Financial assets measured by fair value and with variation reckoned into current gains/losses | 1,124,927.96 | |
| Derivative financial assets | ||
| Note receivable | 350,756.64 | 1,027,635.04 |
| Account receivable | 617,831,167.71 | 473,646,886.64 |
| Receivable financing | ||
| Accounts paid in advance | 26,189,928.10 | 83,696,870.07 |
| Insurance receivable | ||
| Reinsurance receivables | ||
| Contract reserve of reinsurance receivable | ||
| Other account receivable | 57,624,419.71 | 33,803,428.45 |
| Including: Interest receivable | ||
| Dividend receivable | ||
| Buying back the sale of financial assets | ||
| Inventories | 3,053,593,314.19 | 2,811,802,600.19 |
| Contractual assets | ||
| Assets held for sale | ||
| Non-current asset due within one year | ||
| Other current assets | 108,098,667.05 | 254,493,764.04 |
| Total current assets | 4,054,756,047.96 | 4,291,234,452.07 |
| Non-current assets: | ||
| Loans and payments on behalf | ||
| Debt investment | ||
| Finance asset available for sales | 57,500.00 | |
| Other debt investment | ||
| Held-to-maturity investment | ||
| Long-term account receivable | ||
| Long-term equity investment | 73,362,651.19 | 70,999,666.81 |
| Investment in other equity instrument | ||
| Other non-current financial assets | 57,500.00 | |
| Investment real estate | 278,173,249.83 | 282,622,184.92 |
| Fixed assets | 967,835,524.07 | 993,136,743.51 |
| Construction in progress | 403,629,287.82 | 186,586,135.06 |
| Productive biological asset | 402,232.74 | 407,078.92 |
| Oil and gas asset | ||
| Right-of-use assets | ||
| Intangible assets | 586,543,323.51 | 569,997,392.08 |
| Expense on Research and Development | ||
| Goodwill | ||
| Long-term expenses to be apportioned | 16,742,788.37 | 21,799,899.80 |
| Deferred income tax asset | 50,155,704.51 | 50,174,590.98 |
| Other non-current asset | 854,782.25 | 1,936,149.72 |
| Total non-current asset | 2,377,757,044.29 | 2,177,717,341.80 |
| Total assets | 6,432,513,092.25 | 6,468,951,793.87 |
| Current liabilities: | ||
| Short-term loans | 30,590,000.00 | 91,600,000.00 |
| Loan from central bank | ||
| Capital borrowed | ||
| Transactional financial liability | ||
| Financial liability measured by fair value and with variation reckoned into current gains/losses | ||
| Derivative financial liability | ||
| Note payable | ||
| Account payable | 171,201,542.03 | 472,738,283.80 |
| Accounts received in advance | 136,680,506.97 | 205,428,594.16 |
| Selling financial asset of repurchase | ||
| Absorbing deposit and interbank deposit | ||
| Security trading of agency | ||
| Security sales of agency | ||
| Wage payable | 118,823,329.33 | 135,709,423.52 |
| Taxes payable | 30,267,605.83 | 24,969,718.58 |
| Other account payable | 304,979,705.51 | 280,689,548.29 |
| Including: Interest payable | 1,020,795.27 | |
| Dividend payable | 2,909,182.74 | 2,909,182.74 |
| Commission charge and commission payable | ||
| Reinsurance payable | ||
| Contractual liability | ||
| Liability held for sale | ||
| Non-current liabilities due within one year | 60,027,362.43 | 55,090,793.79 |
| Other current liabilities | 219,151,968.63 | 219,151,968.63 |
| Total current liabilities | 1,071,722,020.73 | 1,485,378,330.77 |
| Non-current liabilities: |
| Insurance contract reserve | ||
| Long-term loans | 777,384,100.20 | 516,687,791.66 |
| Bonds payable | ||
| Including: Preferred stock | ||
| Perpetual capital securities | ||
| Lease liability | ||
| Long-term account payable | 15,724,141.66 | 15,690,202.08 |
| Long-term wages payable | ||
| Accrual liability | ||
| Deferred income | 98,721,691.96 | 100,608,203.01 |
| Deferred income tax liabilities | 13,162,941.71 | 12,988,434.77 |
| Other non-current liabilities | ||
| Total non-current liabilities | 904,992,875.53 | 645,974,631.52 |
| Total liabilities | 1,976,714,896.26 | 2,131,352,962.29 |
| Owner’s equity: | ||
| Share capital | 1,152,535,254.00 | 1,152,535,254.00 |
| Other equity instrument | ||
| Including: Preferred stock | ||
| Perpetual capital securities | ||
| Capital public reserve | 1,422,892,729.36 | 1,422,892,729.36 |
| Less: Inventory shares | ||
| Other comprehensive income | ||
| Reasonable reserve | 62,409.56 | 154.21 |
| Surplus public reserve | 327,140,910.28 | 327,140,910.28 |
| Provision of general risk | ||
| Retained profit | 1,357,848,812.47 | 1,269,933,487.26 |
| Total owner’ s equity attributable to parent company | 4,260,480,115.67 | 4,172,502,535.11 |
| Minority interests | 195,318,080.32 | 165,096,296.47 |
| Total owner’ s equity | 4,455,798,195.99 | 4,337,598,831.58 |
| Total liabilities and owner’ s equity | 6,432,513,092.25 | 6,468,951,793.87 |
Person in charge of accounting works: Ye QingyunPerson in charge of accounting institute: Wen Jieyu
2. Balance Sheet of Parent Company
In RMB
| Item | 2019-6-30 | 2018-12-31 |
| Current assets: | ||
| Monetary funds | 4,667,978.54 | 168,900,586.84 |
| Trading financial assets | 1,153,309.17 | |
| Financial assets measured by fair value and with variation reckoned into current gains/losses | 1,124,927.96 | |
| Derivative financial assets | ||
| Note receivable | ||
| Account receivable | 4,700,782.83 | 42,441,119.07 |
| Receivable financing | ||
| Accounts paid in advance | ||
| Other account receivable | 242,873,517.60 | 159,677,969.59 |
| Including: Interest receivable | ||
| Dividend receivable | ||
| Inventories | 2,972,019.11 | 8,806,338.26 |
| Contractual assets | ||
| Assets held for sale | ||
| Non-current assets maturing within one year | ||
| Other current assets | 30,000,000.00 | 50,068,745.74 |
| Total current assets | 286,367,607.25 | 431,019,687.46 |
| Non-current assets: | ||
| Debt investment | ||
| Available-for-sale financial assets | ||
| Other debt investment | ||
| Held-to-maturity investments | ||
| Long-term receivables | ||
| Long-term equity investments | 4,212,419,029.48 | 4,212,554,063.36 |
| Investment in other equity instrument | ||
| Other non-current financial assets | ||
| Investment real estate | 17,693,889.54 | 17,929,684.70 |
| Fixed assets | 30,905,606.49 | 31,417,912.54 |
| Construction in progress | ||
| Productive biological assets | 402,232.74 | 407,078.92 |
| Oil and natural gas assets | ||
| Right-of-use assets | ||
| Intangible assets | 6,363,106.12 | 6,663,692.30 |
| Research and development costs | ||
| Goodwill | ||
| Long-term deferred expenses | 302,763.72 | 409,621.50 |
| Deferred income tax assets | 5,579,344.64 | 5,630,538.80 |
| Other non-current assets | ||
| Total non-current assets | 4,273,665,972.73 | 4,275,012,592.12 |
| Total assets | 4,560,033,579.98 | 4,706,032,279.58 |
| Current liabilities | ||
| Short-term borrowings | ||
| Trading financial liability | ||
| Financial liability measured by fair value and with variation reckoned into current gains/losses | ||
| Derivative financial liability | ||
| Notes payable | ||
| Account payable | 34,354,909.69 | 73,705,646.54 |
| Accounts received in advance | 3,247.80 | 124,945.74 |
| Contractual liability | ||
| Wage payable | 9,866,658.37 | 6,448,561.16 |
| Taxes payable | 2,745,766.36 | 2,702,655.24 |
| Other accounts payable | 254,402,388.26 | 232,109,084.76 |
| Including: Interest payable | ||
| Dividend payable | ||
| Liability held for sale | ||
| Non-current liabilities due within |
| one year | ||
| Other current liabilities | ||
| Total current liabilities | 301,372,970.48 | 315,090,893.44 |
| Non-current liabilities: | ||
| Long-term loans | ||
| Bonds payable | ||
| Including: preferred stock | ||
| Perpetual capital securities | ||
| Lease liability | ||
| Long-term account payable | ||
| Long term employee compensation payable | ||
| Accrued liabilities | ||
| Deferred income | 45,575.32 | 46,129.96 |
| Deferred income tax liabilities | 18,060.77 | 10,965.46 |
| Other non-current liabilities | ||
| Total non-current liabilities | 63,636.09 | 57,095.42 |
| Total liabilities | 301,436,606.57 | 315,147,988.86 |
| Owners’ equity: | ||
| Share capital | 1,152,535,254.00 | 1,152,535,254.00 |
| Other equity instrument | ||
| Including: preferred stock | ||
| Perpetual capital securities | ||
| Capital public reserve | 3,018,106,568.27 | 3,018,106,568.27 |
| Less: Inventory shares | ||
| Other comprehensive income | ||
| Special reserve | ||
| Surplus reserve | 54,736,482.14 | 54,736,482.14 |
| Retained profit | 33,218,669.00 | 165,505,986.31 |
| Total owner’s equity | 4,258,596,973.41 | 4,390,884,290.72 |
| Total liabilities and owner’s equity | 4,560,033,579.98 | 4,706,032,279.58 |
3. Consolidated Profit Statement
In RMB
| Item | Semi-annual of 2019 | Semi-annual of 2018 |
| I. Total operating income | 4,782,167,732.69 | 4,434,688,646.82 |
| Including: Operating income | 4,782,167,732.69 | 4,434,688,646.82 |
| Interest income | ||
| Insurance gained | ||
| Commission charge and commission income | ||
| II. Total operating cost | 4,495,390,182.31 | 4,187,994,970.83 |
| Including: Operating cost | 4,262,101,770.62 | 3,962,753,163.26 |
| Interest expense | ||
| Commission charge and commission expense | ||
| Cash surrender value | ||
| Net amount of expense of compensation | ||
| Net amount of withdrawal of insurance contract reserve | ||
| Bonus expense of guarantee slip | ||
| Reinsurance expense | ||
| Tax and extras | 6,605,514.20 | 7,661,918.10 |
| Sales expense | 112,553,742.74 | 120,452,104.30 |
| Administrative expense | 101,397,947.99 | 96,324,028.90 |
| R&D expense | 4,211,474.91 | 2,977,062.54 |
| Financial expense | 8,519,731.85 | -2,173,306.27 |
| Including: Interest expenses | 10,087,784.34 | 4,313,048.72 |
| Interest income | 2,185,171.96 | 3,899,478.59 |
| Add: other income | 5,463,876.60 | 4,324,296.96 |
| Investment income (Loss is listed with “-”) | 7,167,936.04 | 1,343,407.46 |
| Including: Investment income on affiliated company and joint venture | 3,413,100.95 | 626,055.86 |
| The termination of income recognition for financial assets measured |
| by amortized cost(Loss is listed with “-”) | ||
| Exchange income (Loss is listed with “-”) | ||
| Net exposure hedging income (Loss is listed with “-”) | ||
| Income from change of fair value (Loss is listed with “-”) | 28,381.21 | -425,718.15 |
| Loss of credit impairment (Loss is listed with “-”) | 5,143,559.77 | |
| Losses of devaluation of asset (Loss is listed with “-”) | -69,231,423.42 | -32,562,385.63 |
| Income from assets disposal (Loss is listed with “-”) | -4,184.59 | -210,840.01 |
| III. Operating profit (Loss is listed with “-”) | 235,345,695.99 | 219,162,436.62 |
| Add: Non-operating income | 362,252.46 | 980,860.83 |
| Less: Non-operating expense | 3,982,019.95 | 595,492.72 |
| IV. Total profit (Loss is listed with “-”) | 231,725,928.50 | 219,547,804.73 |
| Less: Income tax expense | 15,485,294.03 | 11,869,852.06 |
| V. Net profit (Net loss is listed with “-”) | 216,240,634.47 | 207,677,952.67 |
| (i) Classify by business continuity | ||
| 1.continuous operating net profit (net loss listed with ‘-”) | 216,240,634.47 | 207,677,952.67 |
| 2.termination of net profit (net loss listed with ‘-”) | ||
| (ii) Classify by ownership | ||
| 1.Net profit attributable to owner’s of parent company | 203,168,850.61 | 202,779,343.34 |
| 2.Minority shareholders’ gains and losses | 13,071,783.86 | 4,898,609.33 |
| 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.gain/loss of fair value changes for available-for-sale financial assets | ||
| 4.Amount of financial assets re-classify to other comprehensive income | ||
| 5.Gain/loss of held-to-maturity investments that re-classify to available-for-sale financial asset | ||
| 6.Credit impairment provision for other debt investment | ||
| 7.Cash flow hedging reserve | ||
| 8.Translation differences arising on translation of foreign currency financial statements | ||
| 9.Other | ||
| Net after-tax of other comprehensive income attributable to minority shareholders | ||
| VII. Total comprehensive income | 216,240,634.47 | 207,677,952.67 |
| Total comprehensive income | 203,168,850.61 | 202,779,343.34 |
| attributable to owners of parent Company | ||
| Total comprehensive income attributable to minority shareholders | 13,071,783.86 | 4,898,609.33 |
| VIII. Earnings per share: | ||
| (i) Basic earnings per share | 0.1763 | 0.1759 |
| (ii) Diluted earnings per share | 0.1763 | 0.1759 |
| Item | Semi-annual of 2019 | Semi-annual of 2018 |
| I. Operating income | 31,562,730.23 | 67,228,720.81 |
| Less: Operating cost | 29,829,293.00 | 63,731,294.22 |
| Taxes and surcharge | 252,634.47 | 292,769.77 |
| Sales expenses | 293,450.97 | 1,943,060.61 |
| Administration expenses | 21,614,585.82 | 14,366,353.12 |
| R&D expenses | ||
| Financial expenses | -532,360.14 | -1,565,736.21 |
| Including: interest expenses | ||
| Interest income | ||
| Add: other income | 1,253,598.63 | 554.64 |
| Investment income (Loss is listed with “-”) | 1,432,614.92 | -185,480.37 |
| Including: Investment income on affiliated Company and joint venture | -135,033.88 | -185,480.37 |
| 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 “-”) | 28,381.21 | -425,718.15 |
| Loss of credit impairment (Loss is listed with “-”) | -204,340.76 | |
| Losses of devaluation of asset (Loss is listed with “-”) | 409,117.45 | -203,706.33 |
| Income on disposal of assets (Loss is listed with “-”) | ||
| II. Operating profit (Loss is listed with “-”) | -16,975,502.44 | -12,353,370.91 |
| Add: Non-operating income | ||
| Less: Non-operating expense | 51.64 | |
| III. Total Profit (Loss is listed with “-”) | -16,975,502.44 | -12,353,422.55 |
| Less: Income tax | 58,289.47 | -157,620.42 |
| IV. Net profit (Net loss is listed with “-”) | -17,033,791.91 | -12,195,802.13 |
| (i)continuous operating net profit (net loss listed with ‘-”) | -17,033,791.91 | -12,195,802.13 |
| (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.gain/loss of fair value changes for available-for-sale financial assets | ||
| 4.Amount of financial assets re-classify to other comprehensive income | ||
| 5.Gain/loss of held-to-maturity investments that re-classify to available-for-sale financial asset | ||
| 6.Credit impairment provision for other debt investment | ||
| 7.Cash flow hedging reserve | ||
| 8.Translation differences arising on translation of foreign currency financial statements | ||
| 9.Other | ||
| VI. Total comprehensive income | -17,033,791.91 | -12,195,802.13 |
| VII. Earnings per share: | ||
| (i) Basic earnings per share | -0.0148 | -0.0106 |
| (ii) Diluted earnings per share | -0.0148 | -0.0106 |
| Item | Semi-annual of 2019 | Semi-annual of 2018 |
| I. Cash flows arising from operating activities: | ||
| Cash received from selling commodities and providing labor services | 4,570,303,860.45 | 4,726,406,214.58 |
| Net increase of customer deposit and interbank deposit | ||
| Net increase of loan from central |
| bank | ||
| Net increase of capital borrowed from other financial institution | ||
| Cash received from original insurance contract fee | ||
| Net cash received from reinsurance business | ||
| Net increase of insured savings and investment | ||
| Cash received from interest, commission charge and commission | ||
| Net increase of capital borrowed | ||
| Net increase of returned business capital | ||
| Net cash received by agents in sale and purchase of securities | ||
| Write-back of tax received | 341,886.74 | 893,445.54 |
| Other cash received concerning operating activities | 187,051,727.97 | 24,547,106.70 |
| Subtotal of cash inflow arising from operating activities | 4,757,697,475.16 | 4,751,846,766.82 |
| Cash paid for purchasing commodities and receiving labor service | 4,737,315,792.15 | 4,340,946,309.76 |
| 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 financial assets held for transaction purposes | ||
| Net increase of capital lent | ||
| Cash paid for interest, commission charge and commission | ||
| Cash paid for bonus of guarantee slip | ||
| Cash paid to/for staff and workers | 117,107,205.65 | 126,373,197.96 |
| Taxes paid | 36,670,126.83 | 27,553,349.81 |
| Other cash paid concerning operating activities | 256,033,980.28 | 204,112,663.99 |
| Subtotal of cash outflow arising from operating activities | 5,147,127,104.91 | 4,698,985,521.52 |
| Net cash flows arising from operating activities | -389,429,629.75 | 52,861,245.30 |
| II. Cash flows arising from investing activities: | ||
| Cash received from recovering investment | 376,000,000.00 | 100,000,000.00 |
| Cash received from investment income | 3,281,912.85 | 717,351.60 |
| Net cash received from disposal of fixed, intangible and other long-term assets | 5,225,078.07 | 8,600.00 |
| Net cash received from disposal of subsidiaries and other units | ||
| Other cash received concerning investing activities | ||
| Subtotal of cash inflow from investing activities | 384,506,990.92 | 100,725,951.60 |
| Cash paid for purchasing fixed, intangible and other long-term assets | 279,258,684.99 | 251,093,013.07 |
| Cash paid for investment | 246,000,000.00 | 120,000,000.00 |
| Net increase of mortgaged loans | ||
| Net cash received from subsidiaries and other units obtained | 37,000,000.00 | |
| Other cash paid concerning investing activities | ||
| Subtotal of cash outflow from investing activities | 525,258,684.99 | 408,093,013.07 |
| Net cash flows arising from investing activities | -140,751,694.07 | -307,367,061.47 |
| III. Cash flows arising from financing activities | ||
| Cash received from absorbing investment | 17,150,000.00 |
| Including: Cash received from absorbing minority shareholders’ investment by subsidiaries | 17,150,000.00 | |
| Cash received from loans | 275,167,400.91 | 67,732,101.19 |
| Cash received from issuing bonds | ||
| Other cash received concerning financing activities | 24,500,000.00 | |
| Subtotal of cash inflow from financing activities | 292,317,400.91 | 92,232,101.19 |
| Cash paid for settling debts | 70,544,523.73 | 18,898,888.81 |
| Cash paid for dividend and profit distributing or interest paying | 133,274,201.72 | 6,913,361.89 |
| Including: Dividend and profit of minority shareholder paid by subsidiaries | ||
| Other cash paid concerning financing activities | 72,997.72 | |
| Subtotal of cash outflow from financing activities | 203,891,723.17 | 25,812,250.70 |
| Net cash flows arising from financing activities | 88,425,677.74 | 66,419,850.49 |
| IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | 31,791.79 | 3,088,981.33 |
| V. Net increase of cash and cash equivalents | -441,723,854.29 | -184,996,984.35 |
| Add: Balance of cash and cash equivalents at the period -begin | 631,638,339.68 | 544,440,739.45 |
| VI. Balance of cash and cash equivalents at the period -end | 189,914,485.39 | 359,443,755.10 |
| Item | Semi-annual of 2019 | Semi-annual of 2018 |
| I. Cash flows arising from operating activities: | ||
| Cash received from selling commodities and providing labor | 74,116,410.44 | 99,228,621.54 |
| services | ||
| Write-back of tax received | 336,964.29 | 737,441.54 |
| Other cash received concerning operating activities | 138,446,106.95 | 27,633,986.64 |
| Subtotal of cash inflow arising from operating activities | 212,899,481.68 | 127,600,049.72 |
| Cash paid for purchasing commodities and receiving labor service | 67,845,729.08 | 96,230,177.23 |
| Cash paid to/for staff and workers | 14,152,467.36 | 12,384,561.21 |
| Taxes paid | 1,160,654.10 | 2,194,673.02 |
| Other cash paid concerning operating activities | 199,823,754.56 | 11,572,835.91 |
| Subtotal of cash outflow arising from operating activities | 282,982,605.10 | 122,382,247.37 |
| Net cash flows arising from operating activities | -70,083,123.42 | 5,217,802.35 |
| II. Cash flows arising from investing activities: | ||
| Cash received from recovering investment | 266,000,000.00 | |
| Cash received from investment income | 1,567,648.80 | |
| Net cash received from disposal of fixed, intangible and other long-term assets | 2,710.37 | |
| Net cash received from disposal of subsidiaries and other units | ||
| Other cash received concerning investing activities | ||
| Subtotal of cash inflow from investing activities | 267,570,359.17 | |
| Cash paid for purchasing fixed, intangible and other long-term assets | 483,680.00 | 18,200.00 |
| Cash paid for investment | 246,000,000.00 | 30,000,000.00 |
| Net cash received from subsidiaries and other units obtained | ||
| Other cash paid concerning |
| investing activities | ||
| Subtotal of cash outflow from investing activities | 246,483,680.00 | 30,018,200.00 |
| Net cash flows arising from investing activities | 21,086,679.17 | -30,018,200.00 |
| III. Cash flows arising from financing activities | ||
| Cash received from absorbing investment | ||
| Cash received from loans | ||
| Cash received from issuing bonds | ||
| Other cash received concerning financing activities | ||
| Subtotal of cash inflow from financing activities | ||
| Cash paid for settling debts | 10,000,000.00 | |
| Cash paid for dividend and profit distributing or interest paying | 115,253,525.40 | 28,710.00 |
| Other cash paid concerning financing activities | 72,997.72 | |
| Subtotal of cash outflow from financing activities | 115,326,523.12 | 10,028,710.00 |
| Net cash flows arising from financing activities | -115,326,523.12 | -10,028,710.00 |
| IV. Influence on cash and cash equivalents due to fluctuation in exchange rate | 90,359.07 | 76,401.91 |
| V. Net increase of cash and cash equivalents | -164,232,608.30 | -34,752,705.74 |
| Add: Balance of cash and cash equivalents at the period -begin | 168,900,586.84 | 239,662,344.24 |
| VI. Balance of cash and cash equivalents at the period -end | 4,667,978.54 | 204,909,638.50 |
7. Statement of Changes in Owners’ Equity (Consolidated)
Current period
In RMB
| Item | Semi-annual of 2019 | ||||||||||||||
| Owners’ equity attributable to the parent Company | Minority interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Provision of general risk | Retained profit | Other | Subtotal | |||||
| Preferred stock | Perpetual capital securities | Other | |||||||||||||
| I. Balance at the end of the last year | 1,152,535,254.00 | 1,422,892,729.36 | 154.21 | 327,140,910.28 | 1,269,933,487.26 | 4,172,502,535.11 | 165,096,296.47 | 4,337,598,831.58 | |||||||
| Add: Changes of accounting policy | |||||||||||||||
| Error correction of the last period | |||||||||||||||
| Enterprise combine under the same control | |||||||||||||||
| Other | |||||||||||||||
| II. Balance at the beginning of this year | 1,152,535,254.00 | 1,422,892,729.36 | 154.21 | 327,140,910.28 | 1,269,933,487.26 | 4,172,502,535.11 | 165,096,296.47 | 4,337,598,831.58 | |||||||
| III. Increase/ Decrease in this year (Decrease is listed with “-”) | 62,255.35 | 87,915,325.21 | 87,977,580.56 | 30,221,783.85 | 118,199,364.41 | ||||||||||
| (i) Total comprehensive income | 203,168,850.61 | 203,168,850.61 | 13,071,783.85 | 216,240,634.46 | |||||||||||
| (ii) Owners’ devoted and decreased capital | 17,150,000.00 | 17,150,000.00 | |||||||||||||
| 1.Common shares invested by shareholders | 17,150,000.00 | 17,150,000.00 | |||||||||||||
| 2. Capital invested by holders of other equity instruments | |||||||||||||||
| 3. Amount reckoned into owners equity with share-based payment | |||||||||||||||
| 4. Other | |||||||||||||||
| (III) Profit distribution | -115,253,525.40 | -115,253,525.40 | -115,253,525.40 | ||||||||||||
| 1. Withdrawal of surplus reserves | |||||||||||||||
| 2. Withdrawal of general risk provisions |
| 3. Distribution for owners (or shareholders) | -115,253,525.40 | -115,253,525.40 | -115,253,525.40 | ||||||||||||
| 4. Other | |||||||||||||||
| (IV) Carrying forward internal owners’ equity | |||||||||||||||
| 1. Capital reserves conversed to capital (share capital) | |||||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | |||||||||||||||
| 3. Remedying loss with surplus reserve | |||||||||||||||
| 4．Carry-over retained earnings from the defined benefit plans | |||||||||||||||
| 5．Carry-over retained earnings from other comprehensive income | |||||||||||||||
| 6. Other | |||||||||||||||
| (V) Reasonable reserve | 62,255.35 | 62,255.35 | 62,255.35 | ||||||||||||
| 1. Withdrawal in the report period | 460,394.34 | 460,394.34 | 460,394.34 |
| 2. Usage in the report period | 398,138.99 | 398,138.99 | 398,138.99 | ||||||||||||
| (VI)Others | |||||||||||||||
| IV. Balance at the end of the report period | 1,152,535,254.00 | 1,422,892,729.36 | 62,409.56 | 327,140,910.28 | 1,357,848,812.47 | 4,260,480,115.67 | 195,318,080.32 | 4,455,798,195.99 |
| Item | Semi-annual of 2018 | ||||||||||||||
| Owners’ equity attributable to the parent Company | Minority interests | Total owners’ equity | |||||||||||||
| Share capital | Other equity instrument | Capital reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Provision of general risk | Retained profit | Other | Subtotal | |||||
| Preferred stock | Perpetual capital securities | Other | |||||||||||||
| I. Balance at the end of the last year | 496,782,303.00 | 358,999,356.28 | 54,736,482.14 | 36,402,435.91 | 946,920,577.33 | 16,232,752.93 | 963,153,330.26 | ||||||||
| Add: Changes of accounting policy | |||||||||||||||
| Error correction of the | |||||||||||||||
| last period | |||||||||||||||
| Enterprise combine under the same control | |||||||||||||||
| Other | |||||||||||||||
| II. Balance at the beginning of this year | 496,782,303.00 | 358,999,356.28 | 54,736,482.14 | 36,402,435.91 | 946,920,577.33 | 16,232,752.93 | 963,153,330.26 | ||||||||
| III. Increase/ Decrease in this year (Decrease is listed with “-”) | -18,246,639.07 | -18,246,639.07 | -979,179.58 | -19,225,818.65 | |||||||||||
| (i) Total comprehensive income | -18,246,639.07 | -18,246,639.07 | -979,179.58 | -19,225,818.65 | |||||||||||
| (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 |
| 1. Withdrawal of surplus reserves | |||||||||||||||
| 2. Withdrawal of general risk provisions | |||||||||||||||
| 3. Distribution for owners (or shareholders) | |||||||||||||||
| 4. Other | |||||||||||||||
| (IV) Carrying forward internal owners’ equity | |||||||||||||||
| 1. Capital reserves conversed to capital (share capital) | |||||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | |||||||||||||||
| 3. Remedying loss with surplus reserve | |||||||||||||||
| 4．Carry-over retained earnings from the defined benefit plans | |||||||||||||||
| 5．Carry-over retained earnings from other comprehensive income | |||||||||||||||
| 6. Other |
| (V) Reasonable reserve | |||||||||||||||
| 1. Withdrawal in the report period | |||||||||||||||
| 2. Usage in the report period | |||||||||||||||
| (VI)Others | |||||||||||||||
| IV. Balance at the end of the report period | 496,782,303.00 | 358,999,356.28 | 54,736,482.14 | 18,155,796.84 | 928,673,938.26 | 15,253,573.35 | 943,927,511.61 |
| Item | Semi-annual of 2019 | |||||||||||
| Share capital | Other equity instrument | Capital public reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Retained profit | Other | Total owners’ equity | |||
| Preferred stock | Perpetual capital securities | Other | ||||||||||
| I. Balance at the end of the last year | 1,152,535,254.00 | 3,018,106,568.27 | 54,736,482.14 | 165,505,986.31 | 4,390,884,290.72 | |||||||
| Add: Changes of accounting policy | ||||||||||||
| Error correction of the last period | ||||||||||||
| Other | ||||||||||||
| II. Balance at the beginning of this year | 1,152,535,254.00 | 3,018,106,568.27 | 54,736,482.14 | 165,505,986.31 | 4,390,884,290.72 | |||||||
| III. Increase/ Decrease | - | -132,287,317.31 | ||||||||||
| in this year (Decrease is listed with “-”) | 132,287,317.31 | |||||||||||
| (i) Total comprehensive income | -17,033,791.91 | -17,033,791.91 | ||||||||||
| (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 | -115,253,525.40 | -115,253,525.40 | ||||||||||
| 1. Withdrawal of surplus reserves | ||||||||||||
| 2. Distribution for owners (or shareholders) | -115,253,525.40 | -115,253,525.40 | ||||||||||
| 3. Other | ||||||||||||
| (IV) Carrying forward internal owners’ equity | ||||||||||||
| 1. Capital reserves conversed to capital (share capital) | ||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | ||||||||||||
| 3. Remedying loss with |
| surplus reserve | ||||||||||||
| 4．Carry-over retained earnings from the defined benefit plans | ||||||||||||
| 5．Carry-over retained earnings from other comprehensive income | ||||||||||||
| 6. Other | ||||||||||||
| (V) Reasonable reserve | ||||||||||||
| 1. Withdrawal in the report period | ||||||||||||
| 2. Usage in the report period | ||||||||||||
| (VI)Others | ||||||||||||
| IV. Balance at the end of the report period | 1,152,535,254.00 | 3,018,106,568.27 | 54,736,482.14 | 33,218,669.00 | 4,258,596,973.41 |
| Item | Semi-annual of 2018 | |||||||||||
| Share capital | Other equity instrument | Capital public reserve | Less: Inventory shares | Other comprehensive income | Reasonable reserve | Surplus reserve | Retained profit | Other | Total owners’ equity | |||
| Preferred stock | Perpetual capital securities | Other | ||||||||||
| I. Balance at the end of the last year | 496,782,303.00 | 382,444,482.45 | 54,736,482.14 | 199,789,650.74 | 1,133,752,918.33 | |||||||
| Add: Changes of accounting policy | ||||||||||||
| Error correction of the last period | ||||||||||||
| Other | ||||||||||||
| II. Balance at the beginning of this year | 496,782,303.00 | 382,444,482.45 | 54,736,482.14 | 199,789,650.74 | 1,133,752,918.33 | |||||||
| III. Increase/ Decrease in this year (Decrease is listed with “-”) | -12,195,802.13 | -12,195,802.13 | ||||||||||
| (i) Total comprehensive income | -12,195,802.13 | -12,195,802.13 | ||||||||||
| (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 | ||||||||||||
| 1. Withdrawal of surplus reserves | ||||||||||||
| 2. Distribution for owners (or shareholders) | ||||||||||||
| 3. Other | ||||||||||||
| (IV) Carrying forward internal owners’ equity |
| 1. Capital reserves conversed to capital (share capital) | ||||||||||||
| 2. Surplus reserves conversed to capital (share capital) | ||||||||||||
| 3. Remedying loss with surplus reserve | ||||||||||||
| 4．Carry-over retained earnings from the defined benefit plans | ||||||||||||
| 5．Carry-over retained earnings from other comprehensive income | ||||||||||||
| 6. Other | ||||||||||||
| (V) Reasonable reserve | ||||||||||||
| 1. Withdrawal in the report period | ||||||||||||
| 2. Usage in the report period | ||||||||||||
| (VI)Others | ||||||||||||
| IV. Balance at the end of the report period | 496,782,303.00 | 382,444,482.45 | 54,736,482.14 | 187,593,848.61 | 1,121,557,116.20 |
III. Basic situation of Company
1. The history of the 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, obtained approval(Document (1991) No.978) from Shenzhen Municipal People’s Government to change to the present name as on 1August 1991.Then with the approval (Document (1991)No.126) from People’s Bank of China, the Company beganto list on Shenzhen Stock Exchange. The certificate for uniform social credit code: 91440300192180754J
The Company initially issued 107,312,935 shares in the stock exchange. In 1992, one bonus share was dispatchedfor each 10 shares held by its shareholders, thus totally 10,731,290 shares were increased. In 1993, one bonus shareand one allotted share were dispatched for each 10 shares held by its shareholders, thus totally 20,878,845 shareswere increased. Subsequently, one bonus share was dispatched for each 10 shares held by shareholders upon thebasis of total share capital as at the end of 1996, and capitalizing of capital reserves was carried out at one to tenbasis, thus totally 27,784,614 shares were increased. In 2001, based on the total share capital as at the end of 1999,three shares were allotted for each 10 shares held by shareholders, and totally 15,215,404 shares were allotted. Theregistered capital of the Company amounts to 181, 923,088 yuan.
On 22 June 2011, the Company privately offering 68,977,066 shares of RMB ordinary share (A share) to targetinvestors with issuing price of 8.70 yuan each while book value of 1.00 yuan. Total monetary capital 600,100,474.20yuan was raised. Change procedures of industrial and commerce has completed on 12 July 2011. Register capitalof the Company changed as 250,900,154.00 yuan.
On 9 April 2014, the equity allocation plan was deliberated and approved by Annual General Meeting of 2013.Based on 250,900,154 shares dated 31
stDecember 2013, increase 2 shares by each 10 shares transferring to allshareholders. Share capital increased to 301,080,184 shares after transferring.
On 17 May 2016, the equity allocation plan was deliberated and approved by Annual General Meeting of 2015.Based on 301,080,184 shares dated 31
stDecember 2015, increase 5 shares by each 10 shares transferring to allshareholders. Share capital increased to 451,620,276 shares after transferring.
On 15 May 2017, the equity allocation plan was deliberated and approved by Annual General Meeting of 2016.Based on 451,620,276 shares dated 31
stDecember 2016, distributed 0.50 Yuan (tax included) for every 10 sharesheld by all shareholders with one bonus shares (tax included), no capitalization from public reserves. Shares capitalincreased to 496,782,303 shares after bonus stock distributed.
On October 15, 2018, the Company received the “Reply on the Approval of Shenzhen Shenbao Industrial Co., Ltd.to Issue Shares to Shenzhen Fude State-owned Capital Operation Co., Ltd. to Purchase Assets” (ZJXK [2018] No.1610) from the China Securities Regulatory Commission, agreed the Company to issue 655,752,951 shares of
restricted ordinary shares to Shenzhen Fude State-owned Capital Operation Co., Ltd. (hereinafter referred to as FudeCapital) to acquire 100.00% equity of Shenzhen Cereals Group Co., Ltd. held by Fude Capital.
On October 18, 2018, 100.00% equity of Shenzhen Cereals Group Co., Ltd. completed the transfer procedures andrelated industrial and commercial change registration. After the completion of this major asset reorganization, theCompany’s share capital increased to 1,152,535,254 shares. This share capital change was examined by JontenCertified Public Accountant (Limited Liability Partnership) who issued the capital verification report Jonten [2018]YZ No. 90066 on October 22, 2018.
End as 30 June 2019, the total share capital of the company was 1,152,535,254 shares, registered capital amountedto 1,152,535,254.00 yuan.
Register address of the Company: 8/F, Tower B, No.4 Building, Software Industry Base, South District, Science &Technology Park, Xuefu Rd., Yuehai Street, Nanshan District, Shenzhen
On 30 January 2019, the Company hold a Second Extraordinary Shareholders Meeting of 2019 to deliberated andapproved the proposal of “Change the Name and Stock Short Name of the Company ”, agreed to change the nameof the Company from “Shenzhen Shenbao Industrial Co., Ltd.” to “Shenzhen Cereals Holdings Co., Ltd.”, stockshort name change from “Shen Shenbao A, Shen Shenbao B” to “SZCH, Shenliang B”. On 18 February 2019,registration procedures on industrial and commercial has completed and obtained the new Business License fromShenzhen Market Supervision and Administration.
(ii) Business nature and main operation activitiesThe Company belongs to the grain, oil food and beverage industry.
Main products of the Company including grain and oil trading and processing, grain and oil reserve service, militaryfood supplies, food beverage of tea and tea products.
Business scope: production of tea, tea products, extract of tea and natural plant, canned food, beverage and nativeproducts ( business license for the production place should apply separately); technology development andtechnology service of tea, plant products, soft beverage and foods; info tech development and supporting service;on-line trading; investment, operation, management and development of tea plantation; investment in industrialprojects (apply separately for detail projects); domestic trading(excluding special sales, specific control andexclusive commodity); import and export business; engaged in real estate development and operation in the landlegally obtained; lease and sales of the self-owned property and property management.” (as for the projects subjectto examination and approval regulated by the state laws, administrative regulations and state council, approvalshould be obtained before operation). Business in license: wholesale of prepackaged food (excluding reheatingprepackaged food) (in non-physical way).
In the reporting period, under the way of issuing shares to Fude Capital for purchasing 100 percent equity ofShenzhen Cereals Group Co., Ltd, on basis of production, research and development and sales of food raw materials(ingredients) centered on intensive processing of tea and natural plants, main business of the Company increasedgrain and oil reserve, grain & oil trading, circulation of grain and oil such as grain and oil processing, and grain andoil reserve service. Therefore, on 18 February 2019, relevant business scope of the Company was changed as:
general operation items: acquisition and sales of grain & oil, grain and oil reserves; management and processing ofgrain & oil and their products; production of tea, tea products, extract of tea and natural plant, canned food, beverageand native products ( business license for the production place should apply separately); management and processingof feed (outsourcing); grain and oil logistics, feed logistics, investment, operation and development for the projectsof tea garden; sales of feed and tea; storage service; grain distribution services; modern grain supply chain service;technical development and services of grain and oil, tea, plant products, soft drinks and food; E-business andinformation construction, IT development and supporting services; investment in industrial projects (applyseparately for detail projects); domestic trading; import and export business; engaged in real estate developmentand operation in the land legally obtained; development, operation, leasing and management of the owned property;property management; providing management services for hotels. (as for projects mentioned above that are requiredto be submitted for examination and approval by the laws, administrative regulations and decision of the statecouncil, approval and examination shall be required before operated). Business in license: wholesale of prepackagedfood (excluding reheating prepackaged food) (in non-physical way); information services business (internetinformation services business only); general freight transportation and professional transportation (refrigeration andfresh-keeping)
(iii) Report approval for the financial statementThe statement has been approved by BOD of the company for reporting on 23 August 2019.
Up to 30
th
June 2019, the subsidiaries included in consolidate financial statement, mainly including:
| Subsidiary | Type | Level | Shareholding ratio (%) | Voting rights ratio (%) |
| Shenzhen Shenbao Huacheng Science and Technology Co.,Ltd(hereinafter referred to as Shenbao Huacheng) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Ju Fang Yong Tea Industry Co., Ltd. in Wuyuan County(hereinafter referred to as Wuyuan Ju Fang Yong) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Shenzhen Shenbao Sanjing Food & Beverage Development Co., Ltd(hereinafter referred to as Shenbao Sanjing) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Huizhou Shenbao Technology Co., Ltd(hereinafter referred to as Huizhou Shenbao Technology ) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Shenzhen Shenbao Property Management Co., Ltd.(hereinafter referred to as Shenbao Property) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Shenzhen Shenbao Industrial & Trading Co., Ltd.(hereinafter referred to as Shenbao Industrial & Trading) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Hangzhou Ju Fang Yong Holding Co., Ltd(hereinafter referred to as Hangzhou Ju Fang Yong) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Shenzhen Shenbao Technology Center Co., Ltd(hereinafter referred to as Shenbao Technology Center ) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Shenzhen Shenshenbao Investment Co., Ltd. (hereinafter referred to as Shenshenbao Investment ) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Yunnan Shenbao Pu’er Tea Supply Chain Management Co., Ltd(hereinafter referred to as Yunnan Supply Chain) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Huizhou Shenbao Food Co., Ltd(hereinafter referred to as Huizhou Shenbao Food) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Yunnan Pu’er Tea Trading Center Co., Ltd(hereinafter referred to as Pu’er Tea Trading Center) | Controlling subsidiary | First grade | 55 | 55 |
| Mount Wuyi Shenbao Rock Tea Co., Ltd. (hereinafter referred to as Shenbao Rock Tea ) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Hangzhou Fuhaitang Tea Ecological Technology Co., Ltd(hereinafter referred to as Fuhaitang Ecological) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Hangzhou Chunshi Network Technology Co.,Ltd.(hereinafter referred to as Chunshi Network) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Shenzhen Shenshenbao Tea Culture Management Co., Ltd.(hereinafter referred to as Shenshenbao Tea Culture) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Hangzhou Ju Fang Yong Trading Co., Ltd. (hereinafter referred to as Ju Fang Yong Trading) | Controlling subsidiary | Second grade | 60 | 60 |
| Shenzhen Shenbao Tea-Shop Co., Ltd. (hereinafter referred to as Shenbao Tea-Shop) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Hangzhou Fuhaitang Catering Management chain Co., Ltd(hereinafter referred to as Fuhaitang Catering) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Shenzhen Cereals Group Co., Ltd(hereinafter referred to as SZCG) | Wholly-owned subsidiary | First grade | 100 | 100 |
| Shenzhen Flour Co., Ltd(hereinafter referred to as Shenzhen Flour) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Shenzhen Hualian Grain & Oil Trade Co., ltd. (hereinafter referred to as Hualian Grain & oil trading) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Hainan Haitian Aquatic Feed Co., Ltd(hereinafter referred to as Hainan Haitian ) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Shenzhen Shenliang Quality Inspection Co., Ltd. | Wholly-owned | Second | 100 | 100 |
| (hereinafter referred to as Shenliang Quality Inspection) | subsidiary | grade | ||
| Shenzhen Shenliang Doximi Business Co., Ltd.(hereinafter referred to as Shenliang Doximi) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Shenzhen Shenliang Cold-Chain Logistic Co., Ltd(hereinafter referred to as Shenliang Cold-Chain Logistic ) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Shenzhen Shenliang Big Kitchen Food Supply Chain Co., Ltd(hereinafter referred to as Shenliang Big Kitchen) | Controlling subsidiary | Second grade | 70 | 70 |
| Shenzhen Shenliang Real Estate Development Co., Ltd. (hereinafter referred to as Shenliang Real Estate Development) | Wholly-owned subsidiary | Second grade | 100 | 100 |
| Shenzhen Shenliang Property Management Co., Ltd. (hereinafter referred to as Shenliang Property ) | Wholly-owned subsidiary | Third grade | 100 | 100 |
| Shenliang Storage (Yingkou) Co., Ltd(hereinafter referred to as Shenliang Storage (Yingkou) ) ) | Wholly-owned subsidiary | Third grade | 100 | 100 |
| Dongguan Shenliang Logistics Co., Ltd.(hereinafter referred to as Dongguan Shenliang Logistics ) | Controlling subsidiary | Second grade | 51 | 51 |
| Dongguan International Food Industrial Park Development Co., Ltd.(hereinafter referred to as Dongguan Food Industrial Park) | Controlling subsidiary | Third grade | 51 | 51 |
| Dongguan Shenliang Oil & Food Trade Co., Ltd. (hereinafter referred to as Dongguan Food Trade) | Controlling subsidiary | Third grade | 51 | 51 |
| Dongguan Jinying Biology Tech. Co., Ltd. (hereinafter referred to as Dongguan Jinying ) | Controlling subsidiary | Third grade | 51 | 51 |
| Shuangyashan Shenliang Zhongxin Cereals Base Co., Ltd.(hereinafter referred to as Shuangyashan Shenliang Zhongxin ) | Controlling subsidiary | Second grade | 51 | 51 |
| Heilongjiang Hongxinglong Nongken Shenxin Cereals Industrial Park Co., ltd. (hereinafter referred to as Hongxinglong Nongken Industrial Park) | Controlling subsidiary | Third grade | 51 | 51 |
IV. Basis of preparation of financial statements
1. Basis of preparation
Based on going concern, and according to actual occurrence of transactions and issues, the Company prepared thefinancial statement in line with the Accounting Standards for Business Enterprise -Basic Standard issued byMinistry of Finance and specific accounting principle as well as the application guidance for the accountingprinciples for enterprise, interpretation to the accounting principles for enterprise and other related requirements(hereinafter referred to as Enterprise Accounting Principles), combining the Information Disclosure PreparationRules for Company Public Issuing Securities No.15-General Rules for Financial Report (amended in 2014) of theCSRC
2. Going concern
The Company was evaluated on continued viability of 12 months for the reporting period and found to have nosignificant doubt. Accordingly, the financial statements have been prepared on the basis of going concernassumptions.
V. Major accounting policy, accounting estimationSpecific accounting policies and estimation attention:
(i) Implementation of the Accounting Standards for Business Enterprise No. 22- Recognition and Measurement ofFinancial Instruments, Accounting Standards for Business Enterprise No. 23- Transfer of Financial Assets,Accounting Standards for Business Enterprise No. 24- Hedge Accounting and Accounting Standards for BusinessEnterprise No. 37- Presentation of Financial Instruments (2017 Revised), and in 2017, the Ministry of Financerevised the Accounting Standards for Business Enterprise No. 22- Recognition and Measurement of FinancialInstruments, Accounting Standards for Business Enterprise No. 23- Transfer of Financial Assets, AccountingStandards for Business Enterprise No. 24- Hedge Accounting and Accounting Standards for Business EnterpriseNo. 37- Presentation of Financial Instruments. The revised standards stipulate that for financial instruments thathave not been derecognized on the first implementation date, if the previous recognition and measurement areinconsistent with the requirements of the revised standards, they shall be retrospectively adjusted. If the data relatingto the comparative financial statements in prior period are inconsistent with the requirements of the revised standards,no adjustment is required. The Company will adjust the retained earnings and other comprehensive income at thebeginning of the year due to the cumulative impact of retrospective adjustment, the main impacts of theimplementation of the above standards are as follows: (1) Due to the change in the name of the report item, “thefinancial assets measured at fair value and whose changes are included in the current profit and loss” are reclassified
as “transactional financial assets”, financial assets measured at fair value and whose changes are included in thecurrent profit and loss have a decrease of 1,124,927.96 yuan; and the trading financial assets have an increase of1,124,927.96 yuan; (2) the available-for-sale equity instrument investments are reclassified as the “financial assetsmeasured at fair value and whose changes are included in the current profit and loss”. Available-for-sale financialassets have a decrease of 57,500.00 yuan; other non-current financial assets have an increase of 57,500.00 yuan.
(ii) Implementation of the Ministry of Finance issued the Notice on Revision and Issuance of 2019 FinancialStatement Format for General Corporate
On 30 April 2019, the Ministry of Finance issued the Notice on Revision and Issuance of 2019 Financial StatementFormat for General Corporate (Cai Kuai [2019] No.6), format of the financial statement has been revised. Mainimpact for implementation of the above mentioned regulations: in balance sheet: the “Note receivable and accountreceivable” divided into “Note receivable” and “Account receivable”; “Note payable and account payable” dividedinto “Note payable” and “Account payable”; the comparison data are adjusted accordingly. “Note receivable andaccount receivable” divided into “Note receivable” and “Account receivable”, current amount of “Note receivable”was 350,756.64 Yuan while 1,027,635.04 Yuan at last period; the “Account receivable” has617,831,167.71Yuan inthe period while 473,646,886.64 Yuan at last period; “Note payable and account payable” divided into “Notepayable” and “Account payable”, current amount of “Account payable” was 171,201,542.03 Yuan while472,738,283.80 Yuan at last period.
1. Statement for observation of Accounting Standard for Enterprise
The financial statements prepared by the Company are in accordance to requirements of Accounting Standard forEnterprise, which truly and completely reflect the information related to financial position, operational results andcash flow of the Company.
2. Accounting period
Calendar year is the accounting period for the Company, that is falls to the range starting from 1 January to 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 ultimate controllingparty of goodwill acquired by the merging parties and the formation of) stated in combined financial report of theultimate controlling party on the merger date. The net book value of assets and the payment of the mergerconsideration in the merger book value (or nominal value of shares issued) shall be adjusted in the share premiumof reserve capital. the share premium in capital reserve is not enough for deducting, retained earnings .
Business combination not under the same control: Assets paid and liabilities taken for business combination on theacquisition date shall be measured at fair value. The difference between the fair value and book value is recognizedin profit or loss. Goodwill is realized by the Company as for the difference between the combination cost and thefair value of the recognizable net assets of the acquiree acquired by acquirer in such business combination. In casethat the above cost is less than the above fair value even with re-review, then the difference shall be recorded incurrent gains and losses.
Audit, legal, consulting services, and other intermediary costs and other expenses directly related to the businesscombination, shall be included in current profit or loss in the event; any transaction fee for issuing equity securitiesfor business combination shall be deducted from equity.
6. Methods for preparation of consolidated financial statements
(i) Consolidated scopeThe consolidation scope of the consolidated financial statements of the Company is fixed on the basis of control,and all subsidiaries(including the divisible part of the invested party that control by the Company) have beenconsolidated.(ii)Consolidated procedure
The Company edits the consolidated financial statements based on its own financial statements and the subsidiaries’,as well as other relevant information. The consolidated financial statements hold the enterprise group as a wholeaccounting entity. It is recognized in accordance with relevant Accounting Standards, measurement and presentation
requirements. Uniform accounting policies reflect the overall financial position of the Group's business, operatingresults and cash flow.
The accounting policies and accounting period adopted by the subsidiaries taken into account of the consolidationscope are in line with the Company. If it is not the same as the Company, necessary adjustments will be made whenpreparing consolidated financial statements according to the accounting policy and accounting period of theCompany. For the subsidiaries acquired through business combination under uncommon control, financialstatements shall be adjusted based on the fair value of the identifiable net assets on acquiring date. For thesubsidiaries acquired through business combination under common control, its assets and liabilities (includinggoodwill formed from ultimate controlling party acquiring the subsidiary to) shall be adjusted based on the bookvalue in the financial statements of the ultimate controlling party.
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 of netprofit in profit sheet and item of total comprehensive income. Current loss minority shareholders of a subsidiaryexceed the minority shareholders in the subsidiary's opening owners' equity share and the formation of balance,offset against minority interests.
(1) Increase of subsidiary or business
During the reporting period, the merger of the enterprises under the same control results in additional subsidiariesor business, then adjust the opening amount of consolidated balance sheet; income, expenses and profit of thesubsidiaries or business from beginning to the end of the reporting shall be included in the consolidated profitstatement; cash flows of the subsidiaries or business from beginning to the end of reporting period shall be includedinto the consolidated cash flow statement. And relevant comparative items of comparable statement shall be adjustedsince reporting entity is controlled by the ultimate controller.
If additional investment and other reasons can lead investee to be controlled under the same control, all parties shallbe adjusted at the beginning when the ultimate controlling party starts control. Equity investments made beforeobtaining controlling right, relevant gains and losses and other comprehensive income as well as other changes innet assets confirmed during the latter date between point obtaining original equity and merger and mergered underthe same control day to the combined day, shall be offset against the retained earnings or profit or loss of thecomparative reporting period.
During the reporting period, opening amount of consolidated balance sheet shall not be adjusted since enterpriseunder different control combine or increase holding of subsidiary or business; the income, expense and profit of thesubsidiaries or business from the acquisition date to the end of reporting period shall be included in the consolidatedprofit statement; while cash flows shall be included into the consolidated cash flow statement.
Equity held from investee before acquisition date shall be measured at fair value of acquisition date if additionalinvestment and other reasons can lead investee to be controlled under the same control. Difference between the fairvalue and the book value is recognized as investment income. other comprehensive income and other owners' equityexcept for net profit or loss, other comprehensive income and the distribution of profits related to equity held frominvestee before acquisition date, as well as relevant other comprehensive income associated with all other bychanges in equity shall be included in current investment income, except for other comprehensive income arisingfrom change of net assets or net liabilities redefined by investee.
(2) Disposal of subsidiaries or business
① The general approach
During the reporting period, the Company carry out disposal of subsidiaries or business, revenue, expense and profitof the subsidiary or business included in the consolidated profit statement from the beginning to the disposal date;while the cash flow into cash flow table.
If losing controlling right to investee due to disposal of partial equity, the remaining equity after the disposal shallbe re-measured at fair value at the date when control is lost. Price of equity disposal plus fair value of the remainingequity, then subtracting net assets held from the former subsidiary from the acquisition date or combination dateinitially measured in accordance with original stake and goodwill, the difference shall be included in investmentincome of the period losing controlling right. other comprehensive income and other owners' equity except for netprofit or loss, other comprehensive income and the distribution of profits related to equity held from investee beforeacquisition date, as well as relevant other comprehensive income associated with all other by changes in equity shallbe included in current investment income, except for other comprehensive income arising from change of net assetsor net liabilities redefined by investee.
If the Company’s shareholding ratio declines and thus loses the control power due to other investors’ capital increasein the subsidiaries, accounting treatment shall be conducted in accordance with the above principles.
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 disposal of equity in subsidiaries lead the loss of control and the transactions can be seen as a package deal, theCompany will take accounting treatment of the transaction; however, before the loss of control the difference
between the disposal price and the corresponding net assets of the subsidiary, recognized as other comprehensiveincome in the consolidated financial statements, into current profit and loss at current period when losing controllingright.
If disposal of equity in subsidiaries lead the loss of control and the transactions doesn’t form a package deal, equityheld from subsidiary shall be accounted in accordance with relevant rules before losing controlling right, while inaccordance with general accounting treatment when losing controlling right.
(3) Purchase of a minority stake in the subsidiary
Long-term equity investment of the Company for the purchase of minority interests in accordance with the 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 balance ofthe share premium in the capital reserve share premium insufficient, any excess is adjusted to retained earnings.
(4) Disposal of equity in subsidiary without losing control
Disposal price and disposal of long-term equity investment without a loss of control due to partial disposal ofsubsidiaries and long-term equity investment made between the relative net assets from the purchase date or thedate of merger were initially measured at the difference between the subsidiary shall enjoy, the consolidated balancesheet adjustment in the balance of the share premium, capital balance of the share premium insufficient, any excessis adjusted to retained earnings.
7. Classification of joint venture arrangement and accounting for joint operations
Joint venture arrangements are divided into joint operations and joint ventures.When the Company is a joint venture party of a joint venture arrangement and enjoys the relevant assets of thearrangement and bears the liabilities related to the arrangement, it is a joint operation.
The Company recognizes its proportion of interests in joint operation as related to the Company, and accounts forunder relevant business accounting principles:
(1) To recognize separately-held assets and jointly-held assets under its proportion;
(2) To recognize separately-assumed liabilities and jointly-assumed liabilities under its proportion;
(3) To recognize revenue from disposal of the output which the Company is entitled to under the proportion;
(4) To recognize revenue from disposal of the output under the proportion;
(5) To recognize separately occurred expenses, and to recognize expenses occurred for joint operations under itsproportion.
8. Recognition standards for cash and cash equivalents
When preparing cash flow statement, the Company recognized the stock cash and deposits available for payment atany time as cash, and investments featuring with the following four characters at the same time as cash equivalents:
short term (expire within 3 months commencing from purchase day), active liquidity, easy to convert to already-known cash, and small value change risks.
9. Foreign currency business and conversion of foreign currency statement
(i) Foreign currency businessThe 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.(ii) Conversion of foreign currency financial statementsAssets 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 rateat the time of occurrence. Income and expense items in the income statement are converted at the spot exchangerate on 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.
10. Financial instruments
Financial instruments include financial assets, financial liabilities and equity instruments.(i) Categories of financial instrumentsAccounting policy applicable since 1
stJan. 2019According 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 assets measuredat amortized cost, the financial assets(debt instrument) measured at fair value and whose changes are included inother comprehensive income, and the financial assets measured at fair value and whose changes are included incurrent gain or loss.
The financial assets of which the business model aims at the collection of contractual cash flow and the contractualcash flow is only the payment of the principal and the interest based on the outstanding principal amount areclassified as financial assets measured at amortized cost. The financial assets of which the business model aims notonly at the collection of contractual cash flow but also at selling the financial assets and the contractual cash flowis only the payment of the principal and the interest based on the outstanding principal amount are classified asfinancial assets measured at fair value and whose changes are included in other comprehensive income (debtinstruments). Other financial assets other than this are classified as financial assets measured at fair value and whosechanges are included in current profit and loss.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. In the initial recognition, in order to eliminate or significantly reduce accounting mismatches,financial assets can be designated as financial assets measured at fair value and whose changes are included incurrent 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 financial liabilityportfolio 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.
Accounting policy applicable before 1
stJan. 2019At initial recognition, financial assets and financial liability are classified as: financial assets or liabilitiesmeasured at fair value and with its variation reckoned into current gains/losses, including the transactionalfinancial assets or financial liabilities and financial assets or liabilities directly designated measured at fair valueand with its variation reckoned into current gains/losses; held-to-maturity investment; account receivable; financialassets available-for-sale; other financial liability and so on.(ii) Recognition and measurement for financial instrumentAccounting policy applicable since 1
stJan. 2019
(1) Financial assets measured at amortized cost
Financial assets measured at amortized cost include notes receivable, accounts receivable, other receivables, long-term receivables, and debt investment, which are initially measured at fair value, and related transaction costs areincluded in the initial recognition amount. The accounts receivable not including major financing components andthe 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 assetis included in the current profit and loss.
(2) Financial assets (debt instruments) measured at fair value and whose changes are included in othercomprehensive incomeFinancial assets (debt instruments) measured at fair value and whose changes are included in other comprehensiveincome, including receivables financing, other debt investment, etc., are initially measured at fair value, and relatedtransaction expenses are included in the initial recognition amount. The financial assets are subsequently measuredat fair value, the changes in fair value are included in other comprehensive income except for interest, impairmentlosses or gains and exchange gains and losses calculated by using the effective interest method.When a financial asset is derecognized, the accumulated gain or loss previously included in other comprehensiveincome 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 transaction expensesare included in the initially recognised amount. The financial assets are subsequently measured at fair value, andchanges in fair value are included in other comprehensive income. The dividends obtained are included in the currentprofits and losses.When a financial asset is derecognized, the accumulated gain or loss previously included in other comprehensiveincome 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, includingtransactional 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 recognised in current profit and loss.When a financial asset is derecognized, the difference between its fair value and the initially recorded amount isrecognized as investment income, and the gains and losses from changes in fair value are adjusted.
(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 derecognized, the difference between its fair value and the initially recorded amount isrecognized as investment income, and the gains and losses from changes in fair value are adjusted.
(6) Financial liabilities measured at amortized cost
Financial liabilities measured at amortized cost, including short-term borrowings, bills payable, accounts payable,
other payables, long-term borrowings, bonds payable, and long-term payables, are initially measured at fair value,and related transaction expenses are included in the initial recognition amount.Interest calculated by the effective interest method during the holding period is included in the current profit andloss.When a financial liability is derecognized, the difference between the consideration paid and the book value of thefinancial liability is included in current profit and loss.
Accounting policy applicable before January 1, 2019
(1) Financial assets (financial liabilities) measured at fair value and whose changes are included in current profitand lossAt the time of acquisition, the fair value (deducting the cash dividends that have been declared but not yet paid orthe bond interest whose interest payment has been due but not yet received) is taken as the initial recognition amount,and the related transaction expenses are included in the current profit and loss.During the holding period, the interest or cash dividends are recognized as investment income, and the changes infair value are included in the current profit and loss at the end of the period.At the time of disposal, the difference between the fair value and the initial recorded amount is recognized asinvestment income, and the gains and losses from changes in fair value are adjusted.
(2) Held-to-maturity investments
At the time of acquisition, the sum of the fair value (deducting the bond interest whose interest payment has beendue but not yet received) and the related transaction expenses is taken as the initial recognition amount.During the holding period, the interest income is calculated and recognized based on the amortized cost and theactual interest rate, and is included in the investment income. The effective interest rate is determined at the time ofacquisition and remains unchanged during the expected duration or for a shorter period of time applicable.At the time of disposal, the difference between the purchase price and the book value of the investment is includedin the investment income.
(3) Account receivable
The contract price charged to the buyers shall be recognized as initial value for those account receivables whichmainly comprise the receivable creditor’s right caused by the sale of goods and providing of labor service to externalcustomers by the Company, and receivables in other companies excluding debt instruments priced in active markets,includes but not limited to account receivables, other account receivables and so on. If characterized as of financingnature, the initial recognition shall be priced at the present value.
Upon disposal, the difference between the sale value and the book value of the receivables shall be accounted intocurrent profit or loss on its recovery or disposal.
(4) Available-for-sale financial assets
At the time of acquisition, the sum of the fair value (deducting the cash dividends that have been declared but notyet paid or the bond interest whose interest payment has been due but not yet received) and the related transactionexpenses are taken as the initial recognition amount.During the holding period, the interest or cash dividends obtained are recognized as investment income. At the endof the period, it is measured at fair value and the changes in fair value are included in other comprehensive income.However, an equity instrument investment that is not quoted in an active market and whose fair value cannot bereliably measured and the derivative financial assets that are linked to the equity instrument and that are required tobe settled through the delivery of the equity instrument are measured at cost.At the time of disposal, the difference between the price obtained and the book value of the financial asset is includedin the investment gains and losses. At the same time, the amount of the accumulated amount of changes in fair valueoriginally and directly included in other comprehensive income being corresponding to the disposal portion istransferred out and included in current profit and loss.
(5) Other financial liabilities
Initial recognition amount is determined at the sum of fair value and relevant transaction fee. Subsequentmeasurement is conducted at amortized cost.(iii) Confirmation evidence and measurement methods for transfer of financial assets
When transfer of financial assets occurs, the Company shall stop recognition of such financial assets if all risksand remunerations related to ownership of such financial assets have almost been transferred to the receiver;while shall continue to recognize such financial assets if all risks and remunerations related to ownership ofsuch financial assets have almost been retained.
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 overweighs format. TheCompany divides such transfer into entire transfer and part transfer. As for the entire transfer meeting condition fordiscontinued recognition, balance between the following two items is recorded in current gains and losses:
(1) Carrying value of financial assets in transfer;
(2) Aggregate of the consideration received from transfer and accumulative movements of fair value originallyrecorded in owners’ equity directly (applicable when financial assets involved in transfer belong to financial assetsavailable for sale).
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 available for sale).
Financial assets are still subject to recognition if transfer of such assets doesn’t satisfy the condition for discontinuedrecognition. And consideration received is recognized as financial liability.(iv) De-recognition condition for financial liability
As for the financial liabilities with its whole or part present obligations released, the company shall de-realize suchfinancial liabilities or part of it. if the company enters into agreement with its creditor to substitute for the existingfinancial liabilities by means of assuming new financial liabilities, then the company shall de-realize the existingfinancial liabilities and realize the new financial liabilities provided that the contract clauses of the new and theexisting financial liabilities are different in substance.
If the company makes substantial amendment to the whole or part contract clauses of the existing financial liabilities,it shall de-realize the existing financial liabilities or part of it. Meanwhile, the financial liabilities with amendmentto its clauses shall be realized as new financial liabilities.
In case of derecognizing of financial liabilities in whole or part, the difference between the carrying value of suchde-realized financial liabilities and consideration paid (including the non-cash assets exchanged or new financialliabilities 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 the financialliabilities in whole on the repurchase date. Difference between the carrying value allocated to the derecognizingpart and the consideration paid (including the non-cash assets exchanged or new financial liabilities assumed) shallbe recorded in current gains and losses.(v) Determination 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 the timeof valuation, the Company adopted applicable in the present case and there is enough available data and otherinformation technology to support valuation, assets or liabilities of feature selection and market participants in thetrading of the underlying asset or liability considered consistent input value and priority as the relevant observableinputs. Where relevant observable inputs can not get or do not get as far as practicable, the use of unobservableinputs.
(vi) Testing of the financial assets (account receivable excluded) impairment and accounting treatment
Accounting policy applicable from January 1, 2019The Company considers all reasonable and evidence-based information, including forward-looking information,and estimates the expected credit losses of the financial assets measured at amortized cost and the financial assets(debt instruments) measured at fair value and whose changes are included in other comprehensive income on asingle or combination mode.The measurement of expected credit losses depends on whether the credit risks of financial assets have increasedsignificantly since the initial recognition.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 ofthe financial 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.Usually, if it s overdue for more than 30 days, the Company shall believe that the credit risk of the financialinstrument has increased significantly, unless there is conclusive evidence that the credit risk of the financialinstrument 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 creditrisk of the financial instrument has not increased significantly since the initial recognition.Accounting policy applicable before January 1, 2019Except for financial assets measured at fair value and whose changes are included in current profit and loss, theCompany checks the book value of financial assets on the balance sheet date. If there is objective evidence that afinancial asset is impaired, make impairment provision.
(1) Provision for impairment of available-for-sale financial assets:
At the end of the period, if the fair value of available-for-sale financial assets seriously declines, or aftercomprehensive consideration of various relevant factors, it is expected that such downward trend is non-temporary,it is deemed to have been impaired, and the accumulated losses resulting from the decline in the fair value originallyand directly included in the owner's equity are transferred out and the impairment loss is recognized.
If there are objective evidences showing that the value of available-for-sale debt instrument is recovered and itrelates to the matters happened after the impairment loss recognition, the impairment loss recognized shall bereversed and accounted in current profit or loss.
The impairment loss from equity instrument investment available-for-sale should no be reversed throughgains/losses.
Recognition standards for the impairment of equity instrument investment available for sale: The Company hasseparately tested various available-for-sale equity instruments at the balance sheet date. It will be defined as
impairment if the fair value is lower than the initial investment cost by more than 50% (including 50%) or the lowstate has lasted for no less than one year. While the lower proportion is between 20% and 50%, the Group will takeother factors such as price fluctuation into consideration to estimate whether the equity instrument has impaired ornot.
Measurement of the investment cost: Initial segment of the "cost" of the sale of equity instruments in accordancewith available cost less any principal repayment and amortization, impairment loss has been included in determiningprofit or loss; The fair value of the available-for-sale equity instrument investment without an active market isdetermined by the present value determined on the basis of the current market return similar to financial assetsversus the future discounted cash; the fair value of available-for-sale equity instrument investment with offers inthe active market is determined by the closing price of the stock exchange at the end of the period, unless thisavailable-for-sale equity instrument investment has a restricted stock trade period. For the presence of restrictedinvestments in equity instruments available for sale, according to the end of the closing price of the stock exchangemarket participants by deducting the risk equity instrument within a specified period cannot be sold on the openmarket and the requirements to obtain compensation.
(2) Impairment provision for held-to-maturity investment
Measurement on the impairment loss of held-to-maturity investment reference to the measurement methods andtreatment of impairment losses of account receivable.
11. Note receivable
Same as account receivable
12. Account receivable
(i) Account receivable with single significant amount and withdrawal bad debt provision on single basisRecognition criteria on account receivable with single significant amount and withdrawal bad debt provision on single basis:
(1)Account receivable: single account receivable has over 10 million Yuan in amount;
(2) Other account receivable: single other account receivable has over 5 million Yuan in amount.Accrual method for the bad debt provision of account receivable with single significant amount: Conductedimpairment testing separately, balance between the present value of future cash flow and its carrying value, baddebt provision withdrawal and reckoned into current gains/losses. For those without impairment being found aftertest, collected into relevant combination for accrual.(ii) Accounts receivable whose bad debts provision was accrued by combination based on credit riskcharacteristics portfolio
(1) Recognition criteria on portfolio
Receivables with insignificant single amount are classified into several combinations according to the credit riskcharacteristics together with the receivables that are not individually impaired after the individual test and havesignificant single amount, and the provision for bad debts that should be accrued is determined according to theactual loss rate of the collection of receivables combination with credit risk characteristics similar to previous yearsand combined with the current situation.
Basis for determining the portfolio:
| Portfolio | Accrual method | Basis |
| Related parties in consolidate scope | Bad debt provision without accrual | For receivables among related parties within the scope of consolidation, the possibility of bad debts is very small, and no bad debt provision is made for the portfolio. |
| Specific objects | Bad debt provision without accrual | For cash deposit, security deposit and receivables from government departments, the possibility of bad debts is very small, and no bad debt provision is made for the this portfolio. |
| Aging analysis | Aging analysis | Including receivables other than the above portfolios, the Company makes the best estimate on the provision proportion of receivables based on the past historical experience, and refers to the age of receivables for credit risk portfolio classification. |
| Account age | Accrual ratio of the account receivable (%) | Accrual ratio of the other account receivable (%) |
| Within one year | 1 | 1 |
| 1－2 years | 10 | 10 |
| 2－3 years | 30 | 30 |
| 3－4 years | 50 | 50 |
| 4－5 years | 50 | 50 |
| Over 5 years | 80 | 80 |
13. Account receivable financing
Nil
14. Other account receivable
Determining method and accounting treatment on the expected credit loss of other account receivableAs for the measurement of impairment for other account receivable except for account receivables, reference tothe “(vi) Testing of the financial assets (account receivable excluded) impairment and accounting treatment ” in
10.Financial instrument above mentioned.
15. Inventory
Does the Company need to comply with disclosure requirements of the special industry?No(i) ClassificationInventory includes raw materials, work in process-outsourced, goods in process, finished goods, goods in transit,revolving material and wrappage and so on.(ii) Valuation methods for send out stocksStocks are valued at time of shipment by weighted average method.(iii) Recognized standards of the net realizable value for inventory
The net realizable value of inventory products and sellable materials, in normal business production, ismeasured as the residual value after deducting the estimated sales expense and related taxes and fees fromthe estimated selling price; the net realizable value of an item of inventories subject to further processing, innormal business production, is measured as the residual value after deducting the sum of the estimated costsof completion, sales expense and related taxes and fees from the estimated selling price of the sellable item.The net realizable value of the quantity of inventories held to satisfy firm sales or service contracts is basedon the contract price. If the sales contracts are for less than the inventory quantities held, the net realizablevalue of the excess is based on general selling prices.
An impairment allowance, if any, is generally individually recognized for each type of inventories at period-endexcept: For an individual impairment allowance, if any, is recognized for the whole category of inventories of lowvalue and large quantities; and for an individual impairment allowance, if any, is recognized for a group ofinventories, which are held for the production and sales of products of a single territory and for identical or similarusages or purposes, and which are indistinguishable from other types of inventories within the group.
Except that there is clear evidence indicates that the market price on the balance sheet date is abnormal, the netrealizable value of the inventory item is determined based on the market price at the balance sheet date.The net realizable value of the inventory items at the end of the period is determined based on the market price at
the balance sheet date.
(iv) Inventory systemInventory system is the perpetual inventory system.(v) Amortization of low-value consumables and packaging materials
(1) Low-value consumables adopts the method of primary resale;
(2) Wrappage adopts the method of primary resale.
16. Contract assets
Nil
17. Contract cost
18. Assets held for sale
The Company recognizes the non-current assets or disposal groups that meet both of the following conditions as thecomponent of available for sale:
(1) According to the practice in similar transactions of selling such assets or disposal groups, it can be soldimmediately under current conditions;
(2) The sale is very likely to occur, that is, the Company has already made a resolution on one sales plan and hasobtained a certain purchase commitment, and it is anticipated that the sale will be completed within one year. Asfor the assets for sale should be approved by relevant authority organization or supervision department byregulations, the approval has been obtained.
19. Creditors’ investment
Nil
20. Other creditors’ investment
Nil
21. Long-term account receivable
Nil
22. Long-term equity investment
(i) Criteria for judgment of the common control and significant influenceCommon control refers to the control that is common to an arrangement in accordance with the relevant agreement,and the relevant activities of the arrangement must be agreed upon by the participants sharing the control rightsbefore making a decision. Where the Company and other joint venture parties jointly control the invested entity andhave rights to the net assets of the invested entity, the invested entity is the joint venture of the Company.
Significant influence refers to the right to participate in making decisions relating to the financial and operationalpolicies of an enterprise, while not able to control or jointly control (with others) establishment of these policies. Ifthe Company has significant influence on the invested enterprises, than such invested enterprises shall be the jointventure of the Company.
(II) Determination of initial investment cost
(1) Long-term equity investment formed by business combination
Business combination under the same control: If the company pays cash, transfers non-cash assets or assumes debts,and issues equity securities as the merger consideration, the share of the book value of the acquired owner's equityof the merged party in the consolidated financial statements of the ultimate controlling party is taken as the initialinvestment cost of the long-term equity investment on the merger date. If it is possible to exercise control over theinvestee under the same control due to additional investment, etc., the initial investment cost of the long-term equityinvestment shall be determined according to the share of the book value of the net assets of the merged party in theconsolidated financial statements of the ultimate controlling party on the merger date. The equity premium isadjusted based on the difference between the initial investment cost of the long-term equity investment on thecombination date and the book value of the long-term equity investment before the merger plus the book value ofthe new payment consideration for stock further obtained on the merger date, if the equity premium is insufficientto be offset, offset the retained earnings.Business combination not under the same control: The company take the merger cost determined on the purchasedate as the initial investment cost of the long-term equity investment. If it is possible to control the investee underthe same control due to additional investment, etc., the initial investment cost calculated by the cost method iscalculated according to the sum of the book value of the original equity investment plus the new investment cost.
(2) Long-term equity investment required by other ways
For long-term equity investments obtained through payment with cash, then the actual payment shall be viewed asinitial investment cost.
For long-term equity investments obtained through issuance of equity securities, then the fair value of such securitiesshall be viewed as initial investment cost
Under the precedent condition that non-monetary assets exchanges are featured with commercial nature andfair values of exchange-in or exchange-out assets can be reliably measured, long-term equity investmentexchange-in through non-monetary assets exchange shall be recognized with initial investment cost on thebasis of the fair value of the assets exchange-out, unless there is obvious evidence showing that fair value ofexchange-in assets is more reliable; as for non-monetary assets exchanges not satisfying such precedentcondition, initial investment cost of exchange-in long-term equity investment falls to the carrying value ofexchange-out assets and relevant taxes payable.For long-term equity investment obtained through debt restructuring, the entry value is determined by the fair valueof the abandoned creditor's right and the taxes directly attributable to the asset and other cost, and the differencebetween the fair value of the abandoned creditor's right and the book value is included in current profit and loss.
(iii) 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.Other than payment actually paidfor obtaining investment or cash dividend or profit included in consideration which has been declared whilenot granted yet, the Company recognizes investment income according to its share in the cash dividend orprofit 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.
Return on investments and other comprehensive income is recognized respectively by shares of net gains and lossesrealized by the invested company and other comprehensive income, and book value of such investment is adjustedaccordingly. Profit or cash dividends pro rata distributed by the invested company are to minus book value of therelative long-term investment. Book value of long-term investment is adjusted when changes occur other than netgains and losses, other comprehensive income and profit distribution of the invested company, and is to report inowners’ equity accordingly.
The Company should recognized net profit of invested unit after adjustment according to the accounting policy andperiod of the Company, based on fair value of vary identifiable assets of invested unit while obtained investment,while recognized net profit or net losses of invested units that should be enjoy by investment enterprise. During theperiod of holding the investment, if the investee prepares the consolidated financial statement, it shall be accountedfor a based on the net profit, other comprehensive income and the amount attributable to the investee in changes in
the other owner's equity in the consolidated financial statements.
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. If the unrealized internal transaction losses with the investee areassets impairment losses, they will be fully recognized. If a transaction of investing or selling assets occurs betweenthe company and an associate enterprise or joint venture, and the assets constitute a business, the accountingtreatment shall be handled in accordance with relevant policy policies disclosed in the Notes “5. AccountingTreatment Methods for Business Combinations Under the Same Control and Not Under the Same Control” and“6.Methods for Preparing Combined Financial Statements”.
When the Company is confirmed to share losses of the invested units, the following order shall prevail fordisposal: first of all, offset carrying value of long-term equity investment. Second, for long-term equityinvestment whose carrying value is not enough for offset, investment loss should be continued to recognizewithin the limit of carrying value of other long-term equity which substantially forms net investment toinvested units, to offset carrying value of long-term items receivable. At last, after the aforesaid treatment, ifenterprise still bears additional duties according to investment contract or agreement, projected liabilities arerecognized in accordance to the obligations which are expected to undertake, and then recorded in currentgains and losses.
(3) Disposal of long-term equity investment
Difference between carrying value and actual acquisition price in respect of disposal of long term equity investmentshall be included in current period gains and losses.
For long term equity investment under equity method, the Company shall adopt the same basis as the investeedirectly disposes relevant assets or liabilities when disposing this investment, and account for the part originallyincluded in other comprehensive income under appropriate proportion. The owner's equity recognized as a result ofchanges in the owner's equity other than the net profit or loss, other comprehensive income and profit distributionof the investee is carried forward to the current profit and loss in proportion, except for other comprehensive incomearising from changes in net liabilities or net assets as the investee re-measures the defined benefit plans.
If the joint control or significant influence on the investee is lost due to the disposal of part of the equity investment,etc., the remaining equity after disposal shall be accounted for according to the recognition and measurementstandard of financial instruments, and the difference between the fair value and the book value of the day losing thejoint control or significant impact is included in the current profit and loss. For other comprehensive income asrecognized under equity method in respect of the original equity investment, when the Company ceases calculation
under equity method, the aforesaid income shall be accounted for on the same basis as the investee would otherwiseadopt when it directly disposes relevant assets or liabilities. The owner's equity recognized as a result of changes inthe owner's equity other than the net profit or loss, other comprehensive income and profit distribution of theinvestee is carried forward to the current profit and loss when the equity method is terminated to be used for businessaccounting.
The Company loses the control over the investee due to the decrease in shareholding ratio caused by the disposal ofpart of the equity investment or other investors' capital increase in the subsidiary, if the remaining equity canimplement joint control or significant influence on the investee, it shall be accounted for according to the equitymethod when preparing individual financial statements, and the remaining equity shall be adjusted as if it wasaccounted for according to the equity method since obtained. If the remaining equity cannot implement joint controlor significant influence on the investee, it shall be accounted for according to relevant provisions of the recognitionand measurement standard of financial instruments, and the difference between the fair value and the book value onthe date of loss of control is included in current profit and loss.The disposed equity is obtained through business combination for reasons such as additional investment, in thepreparation of individual financial statement, if the remaining equity after disposal is accounted for by using thecost method or equity method, for the equity investment held before the purchase date, other comprehensive incomeand other owner's equity recognized due to being accounted for by using the equity method are carried forward ona pro-rata basis; if the remaining equity after disposal is changed to be accounted for according to the recognitionand measurement standard of financial instruments, the other comprehensive income and other owners' equity shallbe entirely carried forward.
23. Investment real estate
MeasurementMeasured by costDepreciation or amortization method
Investment real estate is defined as the real estate with the purpose to earn rent or capital appreciation or both,including the rented land use rights and the land use rights which are held and prepared for transfer after appreciation,the rented buildings (including the buildings for rent after completion of self-construction or development activitiesand the buildings under construction or development for future lease).
Current investment real estate of the Company are measured by cost. As for the investment real estate-rental buildingmeasured by cost, the depreciation policy is same as the fixed assets of the Company, the land use right for rentalhas the same amortization policy as intangible assets.
Expected service life for the investment real estate, an rate of the net salvage value and annual amortization(depreciation) are as:
| Category | Expected service life (year) | Expected net salvage value | Annual amortization (depreciation) rate |
| Houses and buildings | 10-40 | 5% | 2.37%-9.50% |
| Category | Method | Years of depreciation | Scrap value rate | Yearly depreciation rate |
| Production buildings | Straight-line depreciation | 20-35 | 5 | 2.71-4.75 |
| Non-production buildings | Straight-line depreciation | 20-35 | 5 | 2.71-4.75 |
| Temporary dormitory | Straight-line depreciation | 20-40 | 5 | 2.38-4.75 |
| Simple room etc. | Straight-line depreciation | 5-15 | 5 | 6.33-19 |
| Gas storage bin | Straight-line depreciation | 20 | 5 | 4.75 |
| Silo | Straight-line depreciation | 50 | 5 | 1.9 |
| Wharf and supporting facilities | Straight-line depreciation | 50 | 5 | 1.9 |
| Other machinery equipment | Straight-line depreciation | 10-20 | 5 | 4.75-9.5 |
| Warehouse transmission equipment | Straight-line depreciation | 20 | 5 | 4.75 |
| Electronic equipment | Straight-line depreciation | 2-5 | 5 | 19-47.5 |
| Transport equipment | Straight-line depreciation | 3-10 | 5 | 9.5-31.67 |
| Other equipment | Straight-line depreciation | 3-10 | 5 | 9.5-31.67 |
(3) Recognition, measurement and depreciation of fixed assets held under finance 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 uponthe expiration of the lease term; (2) the Company has the option to purchase assets for a purchase price much lowerthan the fair value of the assets when the option is exercised; (3) the lease period accounts for most of the servicelife of the leased assets; (4) there is no significant difference between the present value of the minimum leasepayment on the lease commencement date and the fair value of the assets. On the lease start date, the companyregards the lower of the fair value of the leased asset and the present value of the minimum lease payment as thebook value of the leased asset and regards the minimum lease payment amount as the book value of the long-termpayable, and the difference is regarded as unrecognized financing charges.
25. Construction in progress
Fixed asset is booked with the entire expenditures occurred in the Construction in progress till it arrives atpredicted state for use. For those constructions in process of fixed assets which have already arrived at thepredicted state for use, while still with absence of completion settlement, they shall be carried forward tofixed assets at the estimated value based on engineering budget, construction cost or actual cost commencingfrom the date of arrival of the predicted state for use. Meanwhile, they shall be also subject to the depreciationpolicies applicable to fixed assets of the Company for provision of depreciation. Once completion settlementis made, the original temporary estimated value shall be adjusted at the effective cost. However, the originalprovision of depreciation remains unchanged.
26. Borrowing expenses
(i) Recognition of the borrowing expenses capitalizationBorrowing expenses including the amortization of interest, discount or premium on borrowing, the ancillaryexpenses and exchange differences arising from foreign currency borrowings and so on.
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 andlosses after 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.
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 withinterest taken for purchasing, constructing or manufacturing assets that complying with capitalizingcondition;
(2) Borrowing expenses have occurred;
(3) Necessary activities occurred for reaching predicted usable statues or sale-able status for assets purchased,constructed or manufactured.(ii) Period of capitalization
Capitalizing period was from the time star capitalizing until the time of suspended capitalization. The periodfor borrowing expensed suspended excluded in the period.
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.
If purchasing, construction, or manufacturing process of an asset satisfying the conditions of capitalizationcompleted projects and usable independently for part of the projects, borrowing expenses for this kind ofassts shall suspended capitalization.
If the assets have been completed in every part, but can be reached the useful status or sale-able status whilecompleted entirely, the borrowing expense shall be suspended for capitalization while the assets completelyfinished in whole.(iii) Period of suspendedIf 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 sellable 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.(iv) 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 is
determined based on the weighted average interest rate of general borrowings.
27. Biological assets
(i) Classification of biological assetsBiological assets of the Company refer to the productive biological assets. Productive biological assets includedtea tree.
Biological assets are recognized when the following three conditions are fully satisfied:
(1) An enterprise owns or controls such biological assets due to the past transactions or events；
(2) It may result in the inflow of economic benefits or service potential in relation to such biological assets;
(3) Cost of such biological assets can be reliably measured.
(ii) Initial recognition of Biological assetsThe biological assets will initially measured by cost while obtained. The cost of biological asset used for productionpurchased from the outside includes the purchase price, related taxes, transportation expense, insurance premiumand other charges directly attributable to the purchase of such asset. Biological asset used for production input byinvestors is stated at its entry value which is calculated based on the value as stipulated in the investment contractor agreement plus the related taxes payable. Where value stipulated in the contract or agreement is not fair, theactual cost is fixed at fair value.(iii) Subsequent measurement of biological assets
(1) Follow-up expenses
The cost of productive biological assets constituted by the actual costs of self-cultivated and constructed productivebiological assets occurred before achieving the intended production and operation goals, and the follow-up expensessuch as management and protection occurred after achieving the intended production goals are included in thecurrent profits and losses.
(2) Depreciation of productive biological assets
Biological assets of the Company refer to the tea plants. For those productive biological assts that reached itspredicted productive purpose, withdrawal depreciation by average age method. The service life was determined bythe residual terms of the residual term of land use after deducting the un-maturity period (5-year) of the tea plantswith 5 percent salvage value calculated. Reviewing the service life, predicted salvage vale and depreciation methodat year-end, if there have difference between the predicted number and original estimated number or have majorchanges on way of profit earning, than adjusted the service life or predicted salvage value or depreciation methodas account estimation variation.
(3) Disposal of biological assets:
The cost of biological assets after the shift of use is stated at the carrying amount at the time of shift of use. When
sold, destroyed and inventory losses occurred, the disposal income of biological assets net of carrying amount andrelated taxes shall be charged to profit or loss for the current period.(iv) Biological assets impairmentThe Company inspects the productive biological assets at least at the end of each year, conclusive evidence indicatesthat if the recoverable amount of productive biological assets are less than the book value due to natural disasters,insect pests, animal diseases or changes in market demand, the Company make the provision for impairment ofbiological assets and include them in the current profits and losses according to the balance between the recoverableamount and the book value.
The balance lower than the book value shall be calculated and accrued to falling price reserves or provision forimpairment of biological assets and included in the current profits and losses.
Once the provision for impairment of productive biological assets is made, it cannot be reversed.
28. Oil and gas assets
Nil
29. Right-of-use assets
Nil
30. Intangible assets
(1) Measurement, use of life and impairment testing
(i) Measurement
(1) 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. For those purchased amount thatpaid overdue exceeded the normal credit condition, owns financing natures actually, the cost should be recognizedbased on the current value while purchased.
As for the intangible assets acquired from the debtor in debt restructuring for the purpose of settlement of debt, thefair value of the intangible assets shall be based to determine the accounting value. The difference between thecarrying value of restructured debt and the fair value of the intangible assets use for settlement of debt shall berecorded in current gains and losses.
With the preceding conditions that non-monetary assets exchange has commerce nature and the fair value of theassets exchanged in or out can be measured reliably, the intangible assets exchanged in through non-monetary assetsexchange are accounted at the value based on the fair value of assets exchanged out, unless there is obvious evidenceshowing the fair value of assets exchanged in is more reliable; for non-monetary assets exchange not qualifying forthe preceding conditions, the carrying value of assets exchanged out and related taxes payable shall be viewed asthe cost of intangible assets exchanged in, without recognition of gains and losses.
(2) Subsequent measurement
Analyzing and judging the service life of an intangible asset when they are acquired.Those intangible assets with limited useful life are evenly amortized on straight basis from the date when theybecome usable to the end of expected useful life;Intangible assets for which it is impossible to predict the termduring which the assets can bring in economic benefits are viewed as intangible assets with indefinite lifewithout amortization.
(ii) Estimation of the service life of intangible assets with limited service life
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. Particular about the estimation on intangible assetswith limited service life:
| Item | Predicted useful life | Basis |
| Land use right | Amortized the actual rest of life after certificate of land use right obtained | Certificate of land use right |
| Proprietary technology | 20-year | Actual situation of the Company |
| Trademark use right | 10-year | Actual situation of the Company |
| Software use right | 5-8 years | Protocol agreement |
| Forest tree use right | Service life arranged | Protocol agreement |
| Shop management right | Service life arranged | Protocol agreement |
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.
(ii) Standards for capitalization satisfaction of expenditure in development state
Intangible assets recognized for expenditure in exploitation stage by satisfying the followed at same time:
(1) Owes feasibility in technology and completed the intangible assets for useful or for sale;
(2) Owes the intention for completed the intangible assets and for sale purpose;
(3) Way of profit generated including: show evidence that the products generated from the intangible assets owes amarket 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.
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 readyfor planned use.
31. Impairment of long term assets
The long-term assets as long-term equity investments, investment real estate measured at cost, fixed assets,construction in progress and intangible assets with certain service life are tested for impairment if there is anyindication that an asset may be impaired at the balance date. If the result of the impairment test indicates that therecoverable amount of the asset is less than its carrying amount, a provision for impairment and an impairment lossare recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Therecoverable amount is the higher of an asset’s fair value less costs to sell and the present value of the future cashflows expected to be derived from the asset. Provision for asset impairment is determined and recognized on theindividual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverableamount of a group of assets to which the asset belongs is determined. A group of assets is the smallest group ofassets that is able to generate independent cash inflows.
Goodwill and intangible asset with an indefinite useful life are tested for impairment 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;if it is difficult to apportion it to the relevant asset group, apportion it to the relevant asset group portfolio. Whenthe book value of goodwill is apportioned to the relevant asset group or asset group portfolio, it is apportionedaccording to the proportion of the fair value of each asset group or asset group portfolio in the total fair value of the
relevant asset group or asset group portfolio. If the fair value is difficult to be reliably measured, it is apportionedaccording to the proportion of the book value of each asset group or asset group portfolio in the total book value ofthe relevant asset group or asset group portfolio.
When conducting impairment test for relevant asset group with inclusion of goodwill, in case that there is indicationof impairment for such asset group, impairment test would be firstly conducted in respect of the asset groups withoutinclusion of goodwill. Then, it shall calculate the recoverable amount and determine the corresponding impairmentloss as compared to its carrying value. Second, asset group with inclusion of goodwill would be tested forimpairment. If it is found after comparison between the carrying value and recoverable amount of the asset groupthat the recoverable amount is less than carrying value, the Company would recognize impairment loss for goodwill.Once recognized, asset impairment loss would not be reversed in future accounting period.
32. Long term prepaid expense
Long term prepaid expense represents the expense which the Company has occurred and shall be amortized in thecurrent and later periods with amortization period exceeding one year. Long term prepaid expense is amortizedduring the beneficial period under straight line method.
33. Contract liability
Nil
34. Staff remuneration
(1) Short term remuneration
In the period of employee services, short-term benefits are actually recognized as liabilities and charged to profit orloss 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.
If the employee welfare are non-monetary benefits and can be measured reliably, they shall be measured at fairvalue.
(2) Accounting treatment for post office benefits
(i) Defined contribution planThe Company pays basic endowment insurance and unemployment insurance for employees according to therelevant regulations of the local government. In the accounting period in which employees provide services for theCompany, the amount to be paid is calculated according to the local payment base and proportion, and is recognizedas a liability and included in current profit and loss or related asset cost.
In addition to the basic endowment insurance, employees who meet the conditions of the “Enterprise AnnuityScheme of Shenzhen Cereals Group Co., Ltd.” can apply for the annuity plan established by the Company. Duringthe accounting period when employee provides services for the Company, the contribution calculated under definedwithdraw plan would be recognized as liabilities and included in current gains and losses or relevant asset cost.
Other than periodic payment of the aforesaid amounts in compliance with national standards, the Company is notobliged to make other payment.
(ii) Defined benefit planThe Company assigns the benefit obligation arising from the defined benefit plan to the period during which theemployee provides service according to the formula determined by the expected accumulated benefit unit method,and includes it in the current profit and loss or related asset cost.The deficit or surplus formed by the present value of the defined benefit plan obligation minus the fair value of thedefined benefit plan asset is recognized as a net benefit or net asset of the defined benefit plan. If there is a surplusin the defined benefit plan, the Company measures the net assets of the defined benefit plan by the lower of thesurplus and the asset limit of the defined benefit plan.All defined benefit plan obligations, including obligations expected to be paid within twelve months of the end 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 ofthe defined benefit plan are included in the current profit and loss or the related assets cost; the changes generatedby the remeasurement of net liabilities or net assets of the defined benefit plan are included in other comprehensiveincome, and will not be transferred back to profit or loss in the subsequent accounting period, when the originaldefined benefit plan is terminated, the part that was originally included in other comprehensive income will becarried forward to undistributed profit within the scope of equity.When settling the defined benefit plan, the settlement gain or loss is confirmed by the difference between the presentvalue of the defined benefit plan obligation and the settlement price determined on the settlement date.
(3) Accounting treatment for dismissal benefit
When the Company cannot unilaterally withdraw the dismissal benefits provided by the termination of the laborrelationship plan or the downsizing proposal, or when confirm the cost or expenses related to the reorganization ofthe dismissal benefits (the earlier one), confirm the employee compensation liabilities generated by dismissalbenefits and include in the current profit and loss.
(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 payables shallbe recognized as liabilities and included in current gains and losses or relevant asset cost during the accountingperiod in which the staff provides services to the Company.
35. Lease liability
Nil
36. Accrual liability
(i) Recognition standards for accrual liabilityWhen the obligations relating to contingencies such as litigation, debt guarantee, loss contract, reorganization andetc. Satisfy the following conditions, an accrual liability shall be recognized:
(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.
(ii) Measurement
Accrual liabilities shall conduct initial measurement by best estimation of expenditures needed by fulfillment ofcurrent responsibilities.
While determined the best estimation, take the risks, uncertainty and periodic value of currency that connected tothe contingent issues into consideration. For major influence from periodic value of currency, determined best
estimation after discount on future relevant cash out-flow.
Treatment for best estimation:
If the expenditure has a continuous range, and with similar possibility within the range, the best estimation shoulddetermined by the middle value within the range, that is the average amount between the up and low limit.
If the expenditure has no continuous range, or has a continuous range but with different possibility within the range,the possibility amount shall determined as the best estimation while single events involved by contingency; if manyevents were involved by contingency, the best estimation shall be determined by various results and relevantprobability.
If the expenses for clearing of predictive liability is fully or partially compensated by a third party, and thecompensated amount can be definitely received, it is recognized separated as asset. Though the compensated amountshall not greater than the book value of the predictive liability
37. Share-based payment
Nil
38. Other financial instrument of preferred stocks and perpetual bond
The Company classifies it as a financial asset, a financial liability or an equity instrument at initial recognition basedon the contractual terms of the preferred stock/perpetuity bonds issued and the economic substance it reflects butnot only in legal form.When a financial instrument such as perpetual bond/preferred share issued by the Company satisfies one of thefollowing conditions, classify the financial instrument as a whole or its components as a financial liability at initialrecognition:
(1) There is a contractual obligation that the Company cannot unconditionally avoid performing by cash paymentor other financial assets;
(2) Include contractual obligations that are settled by the delivery of a variable amount of self-equity instruments;
(3)Include derivatives (such as transfer of equity) that are settled by their own interests, and the derivative does notexchange a fixed amount of cash or other financial assets with a fixed amount of its own equity instruments;
(4) There are contractual clauses that indirectly form contractual obligations;
(5) The perpetual debt of the issuer is in the same liquidation order as the ordinary bonds and other debts issued bythe issuer at the time of liquidation.For financial instruments such as perpetual bonds/preferred shares that do not meet any of the above conditions,classify the financial instrument as a whole or its components as equity instrument at the initial recognition.
39. Revenue
Does the Company need to comply with disclosure requirements of the special industry?NoWhether implemented the new revenue standards
□Yes √No
(i) Sales of goods
When main risks and rewards attached to the ownership of goods have been transferred to the buyer, reserved neithercontinuous management power nor effective control over the goods, incoming payment can be measured reliably,relative financial benefit possibly inflow to the company, cost occurred or will occur can be reliably measured, salesincome of goods is recognized.
The product sales of the Company include domestic sales and export sales, the sales revenue of domestic sales isrecognized after the goods is delivered and conforms to the relevant causes of the contract; the sales revenue ofexport sales is recognized after the goods is sent out and declared, and conforms to the relevant causes of the contract.(ii) Provide labor servicesIf the results of the labor service transaction on the balance sheet date can be reliably estimated, the labor serviceincome will be recognized by the percentage of completion method. The completion schedule of the labor servicetransaction is determined based on the measurement of the completed work.The results of the labor service transaction can be reliably estimated, which means it can meet the followingconditions:
(1) The amount of income can be reliably measured;
(2) The relevant economic benefits are likely to flow into the enterprise;
(3) The completion schedule of the transaction can be reliably determined;
(4) The costs incurred and to be incurred in the transaction can be reliably measured.The total amount of labor service income is determined by the received or receivable contract or agreement price,except that the contract or agreement price received or receivable is not fair. On the balance sheet date, the currentlabor service income is determined by the amount that the total labor service income multiplies by the completionschedule and deducts the accumulated labor income from the previous accounting period. At the same time, thecurrent labor cost is carried forward by the amount that the total labor service cost multiplies by the completionschedule and deducts the accumulated labor cost from the previous accounting period.
If the results of the labor service transaction on the balance sheet date cannot be reliably estimated, they shall bedisposed as follows:
(1) If the labor costs incurred is estimated to be compensated, the labor service income shall be determined according
to the amount of labor costs incurred, and the labor costs shall be carried forward at the same amount.
(2) If the labor costs incurred is estimated not to be compensated, the labor costs incurred shall be included in thecurrent profit and loss, and the labor service income shall not be recognized.When the contract or agreement signed by the Company with other enterprises includes the sale of goods and therendering of labor services, if the parts of the sales of goods and the parts of the rendering of labor service can bedistinguished and can be separately measured, treat the part of the sales of goods as the sales of goods, and treat thepart of the rendering of labor services as rendering of labor services. If the parts of the sales of goods and the partsof the rendering of labor service cannot be distinguished, or can be distinguished but cannot be separately measured,treat the part of the sales of goods and the parts of the rendering of labor service both as the sales of goods.Recognize revenue for the grain and oil dynamic storage and rotation services provided by the Company for theShenzhen Municipal Government when the relevant labor service activities occur. Specifically, monthly calculateand recognize the government service income based on the actual storage grain and oil quantity and the storageprice stipulated by “Operational Procedures for Government Grain Storage All-in Cost of Shenzhen” and“Operational Procedures for Edible Vegetable Oil Government Reserve All-in Cost of Shenzhen”.
(iii) Recognition of the right to use the transferred assetsFinancial benefit attached to the contract is possibly inflow to the company; Overall income of the contract can bemeasured reliably. Determined the use right income for transaction assets respectively as followed:
(1) Amount of interest income: determined by the time and effective interest rate of the currency capital used byother people.
(2) Amount of income from use: determined by the charge time and calculation method agreed in the relevantcontract or agreement.
(3) For the income from real estate, dock warehouse and other property leasing and terminal docking business,calculate and determine the rental income and warehousing logistics income according to the chargeable time andmethod as stipulated in the contract or agreement.
40. Government Grants
(i) TypesGovernments grants of the Company refer to the monetary and non-monetary assets obtained from government forfree, and are divided into those related to assets and others related to revenues.
Government grants related to assets refer to those obtained by the Company and used for purchase or constructionof or otherwise to form long-term assets. Government subsidies related to revenue refer to those other thangovernment subsidies related to assets.
Specific criteria for government grants related to assets: the government grants obtained by the Company for the
purchase, construction or other formation of long-term assets;
Specific criteria for government grants related to revenue: the government grant other than an asset-relatedgovernment grant.(ii) Recognition point of timeAt end of the period, if there is evidence show that the Company qualified relevant condition of fiscal supportingpolices and such supporting funds are predicted to obtained, than recognized the amount receivable as governmentgrants. After that, government grants shall recognize while actually received.
Government grants in the form of monetary assets are stated at the amount received or receivable.Government grants in the form of non-monetary assets are measured at fair value; if fair value cannot beobtained, a nominal amount (one yuan) is used. Government grants measured at nominal amount isrecognized immediately in profit or loss for the current period.(iii) Accounting treatment
Government grants related to assets offset the book value of underlying assets or are recognized as deferred income.If they are recognized as deferred income, they shall be included in the current profit and loss by stages accordingto reasonable and systematic methods within the useful life of the relevant assets. (Those related to the dailyactivities of the Company are included in other income; those not related to the daily activities of the Company areincluded in the non-operating income);Government grants related to the income which are used to compensate the related costs or losses of the Companyin the future period are recognized as deferred income are included in the current profit and loss (Those related tothe daily activities of the Company are included in other income; those not related to the daily activities of theCompany are included in the non-operating income) or offset relevant costs or losses during the period ofrecognizing the relevant costs or losses; those used to compensate the occurred related costs or losses of theCompany are directly included in the current profit and loss (Those related to the daily activities of the Companyare included in other income; those not related to the daily activities of the Company are included in the non-operating income) or offset relevant costs or losses.Policy preferential loan interest discounts obtained by the Company are separately accounted for by distinguishingthe following two cases:
(1) The government appropriates the discounted funds to the loan bank, the loan bank provides loans to the Companyat a policy preferential interest rate, the Company uses the actual amount of the borrowed money as the book valueof the loan, and calculates the relevant borrowing costs according to the loan principal and the policy preferentialinterest rate.
(2) If the government directly appropriates the discounted funds to the Company, the Company will offset therelevant borrowing costs with the corresponding interest discounts.
41. Deferred income tax assets and deferred income tax liabilities
The deferred income tax assets recognised by deductible temporary differences are within the limit of taxableincome that is probably achieved in the future to deduct the deductible temporary differences. The deductible lossesand tax credits that can be carried forward in subsequent years are within the limit of the future taxable income it isprobably achieved in the future to deduct the deductible losses and tax credits, and the corresponding deferredincome tax assets are recognized.
For taxable temporary differences, deferred income tax liabilities are recognised except in special circumstances.
The special circumstances of not recognizing deferred income tax assets or deferred income tax liabilities include:
initial recognition of goodwill; other transactions or matters other than business combinations that neither affectaccounting profits nor affect taxable income (or deductible losses) when occur.
When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or to realize theassets and settle the liabilities simultaneously, current tax assets and current tax liabilities are offset and presentedon a net basis.
When the Group has a legal right to settle current tax assets and liabilities on a net basis, and deferred tax assets anddeferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entityor different taxable entities which intend either to settle current tax assets and liabilities on a net basis or to realizethe assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax assets orliabilities are expected to be reversed, deferred tax assets and deferred tax liabilities are offset and presented on anet basis.
42. Lease
(1) Accounting treatment for operating lease
(i)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, the companyshall deduct the expenses from the total rental costs, share by the deducted rental costs during the lease term, andreckon in the current expenses.
(ii)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, andaccounted for as profit or loss for the current period on the same basis as recognition of rental income over the entirelease period.
When the company undertakes the expenses related to the lease that should be undertaken by the lessor, the companyshall deduct the expenses from the total rental income, and distribute by the deducted rental costs during the leaseterm.
(2) Accounting treatment for financing lease
(i) 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 date ofthe 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 financial expenses and amortized and using effective interestmethod during the leasing period. The initial direct expenses incurred by the Company are included in the value ofthe rented assets.
(ii) 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, and reducesthe amount of income confirmed in the lease term.
43. 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. Whenusing the drawn safety production expenses, directly offset the special reserve if it belongs to the expenseexpenditure. For fixed assets, the expenses incurred through the collection of “under construction” subjects shall berecognized as fixed assets when the safety project is completed and ready for use. At the same time, the special
reserve shall be offset according to the cost of forming the fixed assets, and accumulated depreciation of the sameamount shall be recognized. The fixed assets will no longer be depreciated in the future.
44. Changes of important accounting policy and estimation
(1)Changes of major accounting policies
□ Applicable √Not applicable
(2) Changes of important accounting estimate
□ Applicable √Not applicable
(3) Adjustment the financial statements at the beginning of the first year of implementation of new financialinstrument standards, new revenue standards and new leasing standards
√ Applicable □Not applicable
Consolidate balance sheet
In RMB/CNY
| Item | 2018-12-31 | 2019-01-01 | Adjustments |
| Current assets: | |||
| Monetary funds | 631,638,339.68 | 631,638,339.68 | |
| Settlement provisions | |||
| Capital lent | |||
| Tradable financial assets | 1,124,927.96 | 1,124,927.96 | |
| Financial assets measured by fair value and with variation reckoned into current gains/losses | 1,124,927.96 | -1,124,927.96 | |
| Derivative financial assets | |||
| Note receivable | 1,027,635.04 | 1,027,635.04 | |
| Account receivable | 473,646,886.64 | 473,646,886.64 | |
| Account receivable financing | |||
| Accounts paid in advance | 83,696,870.07 | 83,696,870.07 | |
| Insurance receivable |
| Reinsurance receivables | |||
| Contract reserve of reinsurance receivable | |||
| Other account receivable | 33,803,428.45 | 33,803,428.45 | |
| Including: Interest receivable | 561,500.00 | ||
| Dividend receivable | |||
| Buying back the sale of financial assets | |||
| Inventories | 2,811,802,600.19 | 2,811,802,600.19 | |
| Contract assets | |||
| Assets held for sale | |||
| Non-current asset due within one year | |||
| Other current assets | 254,493,764.04 | 254,493,764.04 | |
| Total current assets | 4,291,234,452.07 | 4,291,234,452.07 | |
| Non-current assets: | |||
| Loans and payments on behalf | |||
| Creditors’ investment | |||
| Available-for-sale financial assets | 57,500.00 | -57,500.00 | |
| Other creditors’ investment | |||
| Held-to-maturity investment | |||
| Long-term account receivable | |||
| Long-term equity investment | 70,999,666.81 | 70,999,666.81 | |
| Other equity instrument investment | |||
| Other non-current financial assets | 57,500.00 | 57,500.00 | |
| Investment real estate | 282,622,184.92 | 282,622,184.92 |
| Fixed assets | 993,136,743.51 | 993,136,743.51 | |
| Construction in progress | 186,586,135.06 | 186,586,135.06 | |
| Productive biological asset | 407,078.92 | 407,078.92 | |
| Oil and gas asset | |||
| Right-of-use asset | |||
| Intangible assets | 569,997,392.08 | 569,997,392.08 | |
| Expense on Research and Development | |||
| Goodwill | |||
| Long-term expenses to be apportioned | 21,799,899.80 | 21,799,899.80 | |
| Deferred income tax asset | 50,174,590.98 | 50,174,590.98 | |
| Other non-current asset | 1,936,149.72 | 1,936,149.72 | |
| Total non-current asset | 2,177,717,341.80 | 2,177,717,341.80 | |
| Total assets | 6,468,951,793.87 | 6,468,951,793.87 | |
| Current liabilities: | |||
| Short-term loans | 91,600,000.00 | 91,600,000.00 | |
| Loan from central bank | |||
| Capital borrowed | |||
| Tradable financial liability | |||
| Financial liability measured by fair value and with variation reckoned into current gains/losses | |||
| Derivative financial liability | |||
| Note payable | |||
| Account payable | 472,738,283.80 | 472,738,283.80 | |
| Accounts received in advance | 205,428,594.16 | 205,428,594.16 | |
| Selling financial asset of repurchase | |||
| Absorbing deposit and interbank deposit |
| Security trading of agency | |||
| Security sales of agency | |||
| Wage payable | 135,709,423.52 | 135,709,423.52 | |
| Taxes payable | 24,969,718.58 | 24,969,718.58 | |
| Other account payable | 280,689,548.29 | 280,689,548.29 | |
| Including: Interest payable | |||
| Dividend payable | 2,909,182.74 | 2,909,182.74 | |
| Commission charge and commission payable | |||
| Reinsurance payable | |||
| Contract liability | |||
| Liability held for sale | |||
| Non-current liabilities due within one year | 55,090,793.79 | 55,090,793.79 | |
| Other current liabilities | 219,151,968.63 | 219,151,968.63 | |
| Total current liabilities | 1,485,378,330.77 | 1,485,378,330.77 | |
| Non-current liabilities: | |||
| Insurance contract reserve | |||
| Long-term loans | 516,687,791.66 | 516,687,791.66 | |
| Bonds payable | |||
| Including: preferred stock | |||
| Perpetual capital securities | |||
| Lease liability | |||
| Long-term account payable | 15,690,202.08 | 15,690,202.08 | |
| Long-term wage payable | |||
| Accrual liabilities | |||
| Deferred income | 100,608,203.01 | 100,608,203.01 | |
| Deferred income tax liabilities | 12,988,434.77 | 12,988,434.77 |
| Other non-current liabilities | |||
| Total non-current liabilities | 645,974,631.52 | 645,974,631.52 | |
| Total liabilities | 2,131,352,962.29 | 2,131,352,962.29 | |
| Owners’ equity: | |||
| Share capital | 1,152,535,254.00 | 1,152,535,254.00 | |
| Other equity instrument | |||
| Including: preferred stock | |||
| Perpetual capital securities | |||
| Capital public reserve | 1,422,892,729.36 | 1,422,892,729.36 | |
| Less: Inventory shares | |||
| Other comprehensive income | |||
| Reasonable reserve | 154.21 | 154.21 | |
| Surplus public reserve | 327,140,910.28 | 327,140,910.28 | |
| Provision of general risk | |||
| Retained profit | 1,269,933,487.26 | 1,269,933,487.26 | |
| Total owner’s equity attributable to parent company | 4,172,502,535.11 | 4,172,502,535.11 | |
| Minority interests | 165,096,296.47 | 165,096,296.47 | |
| Total owner’s equity | 4,337,598,831.58 | 4,337,598,831.58 | |
| Total liabilities and owner’s equity | 6,468,951,793.87 | 6,468,951,793.87 |
| Item | 2018-12-31 | 2019-01-01 | Adjustments |
| Current assets: | |||
| Monetary funds | 168,900,586.84 | 168,900,586.84 | |
| Tradable financial assets | 1,124,927.96 | 1,124,927.96 | |
| Financial assets measured by fair value and with variation reckoned into | 1,124,927.96 | -1,124,927.96 |
| current gains/losses | |||
| Derivative financial assets | |||
| Note receivable | |||
| Account receivable | 42,441,119.07 | 42,441,119.07 | |
| Account receivable financing | |||
| Accounts paid in advance | |||
| Other account receivable | 159,677,969.59 | 159,677,969.59 | |
| Including: Interest receivable | |||
| Dividend receivable | |||
| Inventories | 8,806,338.26 | ||
| Contract assets | |||
| Assets held for sale | |||
| Non-current asset due within one year | |||
| Other current assets | 50,068,745.74 | 50,068,745.74 | |
| Total current assets | 431,019,687.46 | 431,019,687.46 | |
| Non-current assets: | |||
| Creditors’ investment | |||
| Available-for-sale financial assets | |||
| Other creditors’ investment | |||
| Held-to-maturity investment | |||
| Long-term account receivable | |||
| Long-term equity investment | 4,212,554,063.36 | 4,212,554,063.36 | |
| Other equity instrument investment | |||
| Other non-current |
| financial assets | |||
| Investment real estate | 17,929,684.70 | 17,929,684.70 | |
| Fixed assets | 31,417,912.54 | 31,417,912.54 | |
| Construction in progress | |||
| Productive biological asset | 407,078.92 | 407,078.92 | |
| Oil and gas asset | |||
| Right-of-use asset | |||
| Intangible assets | 6,663,692.30 | 6,663,692.30 | |
| Expense on Research and Development | |||
| Goodwill | |||
| Long-term expenses to be apportioned | 409,621.50 | 409,621.50 | |
| Deferred income tax asset | 5,630,538.80 | 5,630,538.80 | |
| Other non-current asset | |||
| Total non-current asset | 4,275,012,592.12 | 4,275,012,592.12 | |
| Total assets | 4,706,032,279.58 | 4,706,032,279.58 | |
| Current liabilities: | |||
| Short-term loans | |||
| Tradable financial liability | |||
| Financial liability measured by fair value and with variation reckoned into current gains/losses | |||
| Derivative financial liability | |||
| Note payable | |||
| Account payable | 73,705,646.54 | 73,705,646.54 | |
| Accounts received in advance | 124,945.74 | 124,945.74 | |
| Contract liability | |||
| Wage payable | 6,448,561.16 | 6,448,561.16 | |
| Taxes payable | 2,702,655.24 | 2,702,655.24 | |
| Other account payable | 232,109,084.76 | 232,109,084.76 |
| Including: Interest payable | |||
| Dividend payable | |||
| Liability held for sale | |||
| Non-current liabilities due within one year | |||
| Other current liabilities | |||
| Total current liabilities | 315,090,893.44 | 315,090,893.44 | |
| Non-current liabilities: | |||
| Long-term loans | |||
| Bonds payable | |||
| Including: preferred stock | |||
| Perpetual capital securities | |||
| Lease liability | |||
| Long-term account payable | |||
| Long-term wage payable | |||
| Accrual liabilities | |||
| Deferred income | 46,129.96 | 46,129.96 | |
| Deferred income tax liabilities | 10,965.46 | 10,965.46 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 57,095.42 | 57,095.42 | |
| Total liabilities | 315,147,988.86 | 315,147,988.86 | |
| Owners’ equity: | |||
| Share capital | 1,152,535,254.00 | 1,152,535,254.00 | |
| Other equity instrument | |||
| Including: preferred stock | |||
| Perpetual capital securities | |||
| Capital public reserve | 3,018,106,568.27 | 3,018,106,568.27 |
| Less: Inventory shares | |||
| Other comprehensive income | |||
| Reasonable reserve | |||
| Surplus public reserve | 54,736,482.14 | 54,736,482.14 | |
| Retained profit | 165,505,986.31 | 165,505,986.31 | |
| Total owners’ equity | 4,390,884,290.72 | 4,390,884,290.72 | |
| Total liabilities and owner’s equity | 4,706,032,279.58 | 4,706,032,279.58 |
| Taxes | Basis | Rate |
| VAT | The output tax is calculated on the basis of the sales of goods and the taxable service income calculated according to the tax law. After deducting the input tax amount that is allowed to be deducted in the current period, the difference part is the value-added tax payable. | 16%, 10%, 6%, 5%, 3% |
| Urban maintenance and construction tax | Turnover tax payable | 7%, 5% |
| Enterprise income tax | Taxable income | 25%, 15%, 0% |
| Educational surtax | Turnover tax payable | 5% |
| Taxpaying body | Income tax rate |
| The Company | 25% |
| Shenbao Huacheng | 15% |
| Including: Shantou Branch of Shenbao Huacheng | 25% |
| Wuyuan Ju Fang Yong | 15% |
| Shenbao Sanjing | 25% |
| Huizhou Shenbao Technology | 25% |
| Huizhou Shenbao Food | 25% |
| Shenbao Property | 25% |
| Shenbao Industrial & Trading | 25% |
| Hangzhou Ju Fang Yong | 25% |
| Shenbao Technology Center | 25% |
| Fuhaitang Ecological | 25% |
| Chunshi Network | 25% |
| Shenshenbao Investment | 25% |
| Shenshenbao Tea Culture | 25% |
| Yunnan Supply Chain | 25% |
| Ju Fang Yong Trading | 25% |
| Shenbao Rock Tea | 25% |
| Pu’er Tea Trading Center | 25% |
| Shenbao Tea-Shop | 25% |
| Fuhaitang Catering | 25% |
| SZCG | 25%, tax exemption for some businesses |
| Shenliang Real Estate Development | 25% |
| Shenzhen Flour | Tax free |
| Shenliang Quality Inspection | 25% |
| Hualian Grain & oil trading | 25% |
| Shenliang Cold-Chain Logistic | 15% |
| Shenliang Doximi | 25% |
| Hainan Haitian | 25% |
| Dongguan Shenliang Logistics | 25% |
| Shenliang Big Kitchen | 15% |
| Shenliang Storage (Yingkou) ) | 25% |
| Shenliang Property | 25% |
| Dongguan Food Industrial Park | 25% |
| Dongguan Food Trade | 25% |
| Dongguan Jinying | 25% |
| Shuangyashan Shenliang Zhongxin | 25% |
| Hongxinglong Nongken Industrial Park | 25% |
high-tech enterprises, the qualified high-tech enterprises shall pay the corporate income tax at a reduced income taxrate of 15% within three years from the year of the determination, and Shenbao Huacheng enjoys the tax preferentialpolicy from 2017 to 2019.
(2) The Company’s subsidiary, Wuyuan Jufangyong, obtained the “High-tech Enterprise Certificate” (Certificatenumber is GR201836000703) jointly issued by the Science and Technology Department of Jiangxi Province, theFinance Department of Jiangxi Province, and Jiangxi Provincial Tax Service, State Taxation Administration onAugust 13, 2018, which is valid for three years. According to the relevant preferential policies of the state for high-tech enterprises, the qualified high-tech enterprises shall pay the corporate income tax at a reduced income tax rateof 15% within three years from the year of the determination, and Wuyuan Jufangyong enjoys the tax preferentialpolicy from 2018 to 2020.
(3) According to the “Notice on the Issues Concerning the Treatment of Corporate Income Taxes for Fiscal Fundsof Special Purposes of the Ministry of Finance and the State Administration of Taxation (CS [2009] No. 87), 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.
(4) Shenzhen Flour, a subsidiary of the Company, is a flour primary processing enterprise, according to thestipulations of the “Notice on Issuing the Scope (Trial) of Primary Processing of Agricultural Products Applicableto the Corporate Income Tax Preferential Policy (CS [2008] No. 149)” and the “Supplementary Notice on the Scopeof Primary Processing of Agricultural Products Applicable to the Corporate Income Tax Preferential Policy of theMinistry of Finance and the State Administration of Taxation” (CS [2011] No. 26), the wheat primary processing isexempt from income tax.
(5) According to the Article one of the “Notice of the Ministry of Finance and the State Administration of Taxationon the Corporate Income Tax Preferential Policies and Preferential Catalogue for Guangdong Hengqin New District,Fujian Pingtan Comprehensive Experimental Zone, and Shenzhen Qianhai Shenzhen-Hong Kong Modern ServiceIndustry Cooperation Zone” (CS [2014] No.26), levy the corporate income tax at a reduced income tax rate of 15%for the encouraged industrial enterprises located in Hengqin New District, Pingtan Comprehensive ExperimentalZone and Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation Zone. The Company’s subsidiaries,Shenliang Cold-Chain Logistic and Shenliang Big Kitchen, are registered in Shenzhen Qianhai Cooperation Zoneand meet the preferential tax conditions, according to the relevant policies in the Cooperation Zone, their incometax enjoys a tax preference of 15%, and this preferential tax policy shall be up to 2020.
3. Other
NilVII. Annotation to main items of consolidated financial statements
1. Monetary funds
RMB/CNY
| Item | Ending balance | Opening balance |
| Cash on hand | 248,295.15 | 282,322.45 |
| Cash in bank | 189,525,109.14 | 631,190,032.12 |
| Other monetary fund | 141,081.10 | 165,985.11 |
| Total | 189,914,485.39 | 631,638,339.68 |
| Item | Ending balance | Opening balance |
| Financial assets measured by fair value and with variation reckoned into current gains/losses | 1,153,309.17 | 1,124,927.96 |
| Including: | ||
| Equity investment instrument | 1,153,309.17 | 1,124,927.96 |
| Including: | ||
| Total | 1,153,309.17 | 1,124,927.96 |
| Item | Ending balance | Opening balance |
4. Note receivable
(1) Category
RMB/CNY
| Item | Ending balance | Opening balance |
| Bank acceptance bill | 350,756.64 | 1,027,635.04 |
| Total | 350,756.64 | 1,027,635.04 |
| Category | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Ratio | Amount | Accrual ratio | Amount | Ratio | Amount | Accrual ratio | |||
| Including: | ||||||||||
| Including: | ||||||||||
| Name | Ending balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
| Name | Ending balance | ||
| Book balance | Bad debt provision | Accrual ratio | |
| Category | Opening balance | Amount changed in the period | Ending balance | ||
| Accrual | Collected or reversal | Written-off | |||
(3) Note receivable that pledged at period-end
RMB/CNY
| Item | Amount pledged at period-end |
| Item | Amount derecognition at period-end | Amount not derecognition at period-end |
| Item | Amount transfer to account receivable at period-end |
| Item | Amount written-off |
| Enterprise | Nature | Amount written-off | Written-off causes | Procedure of written-off | Resulted by related transaction (Y/N) |
| Category | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Ratio | Amount | Accrual ratio | Amount | Ratio | Amount | Accrual ratio | |||
| Account receivable with bad debt provision accrual on a single basis | 100,508,379.06 | 13.91% | 98,754,448.60 | 98.25% | 1,753,930.46 | 100,920,879.06 | 17.40% | 99,166,948.60 | 98.26% | 1,753,930.46 |
| Including: | ||||||||||
| Account receivable with single significant amount and withdrawal bad debt provision on single basis | 10,455,627.54 | 1.45% | 10,455,627.54 | 100.00% | 10,455,627.54 | 1.80% | 10,455,627.54 | 100.00% | ||
| Account receivable with single minor amount but with bad debts provision accrued on a single basis | 90,052,751.52 | 12.46% | 88,298,821.06 | 98.05% | 1,753,930.46 | 90,465,251.52 | 15.60% | 88,711,321.06 | 98.06% | 1,753,930.46 |
| Account receivable with bad debt provision accrual on portfolio | 622,241,934.11 | 86.09% | 6,164,696.86 | 0.99% | 616,077,237.25 | 479,058,935.68 | 82.60% | 7,165,979.50 | 1.50% | 471,892,956.18 |
| Including: | ||||||||||
| Related party and petty cash | 159,082,329.20 | 22.01% | 159,082,329.20 | 37,904,559.66 | 6.54% | 37,904,559.66 | ||||
| Age portfolio | 463,159,604.92 | 64.08% | 6,164,696.86 | 1.33% | 456,994,908.06 | 441,154,376.02 | 76.06% | 7,165,979.50 | 1.62% | 433,988,396.52 |
| Total | 722,750,313.17 | 100.00% | 104,919,145.46 | 14.52% | 617,831,167.71 | 579,979,814.74 | 100.00% | 106,332,928.10 | 18.33% | 473,646,886.64 |
| Name | Ending balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
| Account receivable with single significant amount and withdrawal bad debt provision on single basis | ||||
| Guangzhou Jinhe Feed Co., Ltd | 10,455,627.54 | 10,455,627.54 | 100.00% | Slightly possibly taken back |
| Total | 10,455,627.54 | 10,455,627.54 | -- | -- |
| Name | Ending balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
| Account receivable with | ||||
| single minor amount but with bad debts provision accrued on a single basis at period-end | ||||
| Shenzhen Faqun Industrial Co., Ltd. | 4,582,156.00 | 4,582,156.00 | 100.00% | Slightly possibly taken back |
| Li Shaoyu | 2,929,128.53 | 2,929,128.53 | 100.00% | Slightly possibly taken back |
| Zhuhai Doumen Huabi Feed Co., Ltd | 2,396,327.14 | 2,396,327.14 | 100.00% | Slightly possibly taken back |
| Chongqing Zhongxing Food Industry Co., Ltd. | 2,354,783.30 | 2,354,783.30 | 100.00% | Slightly possibly taken back |
| Hengyang Feed Plant | 1,907,679.95 | 1,907,679.95 | 100.00% | Slightly possibly taken back |
| Beijing Zhongwang Food Co., Ltd. | 1,873,886.58 | 1,873,886.58 | 100.00% | Slightly possibly taken back |
| Sichuan Zhongxing Food Industry Co., Ltd. | 1,698,103.22 | 1,698,103.22 | 100.00% | Slightly possibly taken back |
| Shenzhen Buji Agricultural Products Wholesale Center Market Xingmin Commercial Shop | 1,534,512.45 | 1,534,512.45 | 100.00% | Slightly possibly taken back |
| Other account receivable with over 3 years for Slightly possibly taken back | 70,776,174.35 | 69,022,243.89 | 97.52% | Slightly possibly taken back |
| Total | 90,052,751.52 | 88,298,821.06 | -- | -- |
| Name | Ending balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
| Name | Ending balance | ||
| Book balance | Bad debt provision | Accrual ratio | |
| Within one year | 459,556,076.84 | 4,595,560.77 | 1.00% |
| 1-2 years | 1,082,033.98 | 108,203.40 | 10.00% |
| 2-3 years | 311,445.72 | 93,433.72 | 30.00% |
| 3-4 years | 1,057,518.76 | 528,759.39 | 50.00% |
| 4-5 years | 277,613.73 | 138,806.87 | 50.00% |
| Over 5 years | 874,915.89 | 699,932.71 | 80.00% |
| Total | 463,159,604.92 | 6,164,696.86 | -- |
| Name | Ending balance | ||
| Book balance | Bad debt provision | Accrual ratio | |
| Account age | Ending balance |
| Within one year(one year included) | 617,070,571.01 |
| Within one year(one year included) | 617,070,571.01 |
| 1-2 years | 1,082,033.98 |
| 2-3 years | 311,445.72 |
| Over 3 years | 104,286,262.46 |
| 3-4 years | 1,057,518.76 |
| 4-5 years | 277,613.73 |
| Over 5 years | 102,951,129.97 |
| Total | 722,750,313.17 |
| Category | Opening balance | Amount changed in the period | Ending balance | ||
| Accrual | Collected or reversal | Written-off | |||
| Bad debt provision accrual on single basis | 99,166,948.60 | 412,500.00 | 98,754,448.60 | ||
| Age portfolio | 7,165,979.50 | 252,985.38 | 1,254,268.02 | 6,164,696.86 | |
| Total | 106,332,928.10 | 252,985.38 | 1,666,768.02 | 104,919,145.46 |
| Enterprise | Amount collected or reversal | Collection way |
| Item | Amount written-off |
| Enterprise | Nature | Amount written-off | Written-off causes | Procedure of written-off | Resulted by related transaction (Y/N) |
| Item | Ending balance | Opening balance |
7. Accounts paid in advance
(1) By account age
RMB/CNY
| Account age | Ending balance | Opening balance | ||
| Amount | Ratio | Amount | Ratio | |
| Within one year | 25,907,038.42 | 98.91% | 83,282,051.24 | 99.51% |
| 1-2 years | 22,283.22 | 0.09% | 70,556.78 | 0.08% |
| 2-3 years | 7,670.34 | 0.01% | ||
| Over 3 years | 260,606.46 | 1.00% | 336,591.71 | 0.40% |
| Total | 26,189,928.10 | -- | 83,696,870.07 | -- |
| Item | Ending balance | Opening balance |
| Interest receivable | 561,500.00 | |
| Other account receivable | 57,624,419.71 | 33,241,928.45 |
| Total | 57,624,419.71 | 33,803,428.45 |
| Item | Ending balance | Opening balance |
| Time deposit | 561,500.00 |
| Total | 561,500.00 |
| Borrower | Ending balance | Overdue time | Overdue causes | Whether impairment occurs and its judgment basis |
| Item (or invested enterprise) | Ending balance | Opening balance |
| Item (or invested enterprise) | Ending balance | Account age | Reasons for not collection | Whether impairment occurs and its judgment basis |
| Nature | Ending book balance | Opening book balance |
| Margin and deposit | 45,434,104.15 | 11,160,677.29 |
| Export tax rebate | 3,085,206.14 | 312,364.06 |
| Intercourse funds and other | 101,951,791.76 | 119,759,129.21 |
| Total | 150,471,102.05 | 131,232,170.56 |
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) |
| Balance on Jan. 1, 2019 | 91,037.53 | 7,300,675.36 | 90,598,529.22 | 97,990,242.11 |
| Balance of Jan. 1, 2019 in the period | —— | —— | —— | —— |
| Current accrual | 12,330.41 | 204,763.49 | 217,093.90 | |
| Current reversal | 5,360,653.67 | 5,360,653.67 | ||
| Balance on Jun. 30, 2019 | 103,367.94 | 1,940,021.69 | 90,803,292.71 | 92,846,682.34 |
| Account age | Ending balance |
| Within one year(one year included) | 50,038,334.00 |
| Within one year(one year included) | 50,038,334.00 |
| 1-2 years | 4,038,032.96 |
| 2-3 years | 947,859.87 |
| Over 3 years | 95,446,875.22 |
| 3-4 years | 112,539.37 |
| 4-5 years | 930,794.83 |
| Over 5 years | 94,403,541.02 |
| Total | 150,471,102.05 |
| Category | Opening balance | Amount changed in the period | Ending balance | |
| Accrual | Collected or reversal | |||
| Other account receivable with single minor amount but with bad debt provision accrual on single basis | 44,887,199.60 | 44,887,199.60 | ||
| Other account receivable with single major amount and with bad debt provision accrual on single basis | 45,711,329.62 | 204,763.49 | 45,916,093.11 | |
| Aging analysis portfolio | 7,391,712.89 | 12,330.41 | 5,360,653.67 | 2,043,389.63 |
| Total | 97,990,242.11 | 217,093.90 | 5,360,653.67 | 92,846,682.34 |
RMB/CNY
| Enterprise | Amount reversal or collected | Collection way |
| Shenzhen Yixin Investment Co., Ltd | 5,111,304.11 | Amount collected |
| Total | 5,111,304.11 | -- |
| Item | Amount written-off |
| Enterprise | Nature | Amount written-off | Written-off causes | Procedure of written-off | Resulted by related transaction (Y/N) |
| Enterprise | Nature | Ending balance | Account age | Ratio in total ending balance of other account receivables | Ending balance of bad debt reserve |
| Changzhou Shenbao Chacang E-business Co., ltd. | Intercourse funds | 20,618,710.83 | Within one year; 1-4 year and above | 13.70% | 18,024,144.51 |
| Shenzhen Gaojian Food Joint Venture Co., Ltd | Intercourse funds | 8,326,202.63 | Over 5 years | 5.53% | 416,310.13 |
| Shenzhen Sha Tau Kok Import & Export Corporation | Intercourse funds | 8,285,803.57 | Over 5 years | 5.51% | 414,290.18 |
| Jinzhou Tianli Grain Trading Co., Ltd. | Margin | 5,743,108.32 | Within one year | 3.82% | 287,155.42 |
| Shenzhen Changjiang Development Co., Ltd. | Intercourse funds | 5,677,473.59 | Over 5 years | 3.77% | 283,873.68 |
| Total | -- | 48,651,298.94 | -- | 32.33% | 19,425,773.92 |
| Enterprise | Government grants | Ending balance | Ending account age | Time, amount and basis for collection predicted |
8) The amount of assets and liabilities that are transferred other receivable and continued to be involvedOther explanation:
9. Inventories
Whether implemented the new revenue standards
□Yes √No
(1) Category
RMB/CNY
| Item | Ending balance | Opening balance | ||||
| Book balance | Falling price reserves | Book value | Book balance | Falling price reserves | Book value | |
| Raw materials | 68,342,539.38 | 24,106,831.49 | 44,235,707.89 | 63,928,125.50 | 19,906,198.09 | 44,021,927.41 |
| Goods in process | 13,823,647.30 | 13,823,647.30 | 23,840,568.24 | 68,371.10 | 23,772,197.14 | |
| Finished goods | 3,079,344,347.80 | 95,464,608.75 | 2,983,879,739.05 | 2,827,653,415.87 | 101,081,767.83 | 2,726,571,648.04 |
| Revolving material | 9,752,899.65 | 1,618,111.19 | 8,134,788.46 | 10,843,165.99 | 941,939.14 | 9,901,226.85 |
| Goods in transit | 3,409,547.41 | 3,409,547.41 | 7,410,407.72 | 7,410,407.72 | ||
| Work in process-outsourced | 109,884.08 | 109,884.08 | 5,415,695.35 | 5,290,502.32 | 125,193.03 | |
| Total | 3,174,782,865.62 | 121,189,551.43 | 3,053,593,314.19 | 2,939,091,378.67 | 127,288,778.48 | 2,811,802,600.19 |
| Item | Opening balance | Current amount increased | Current amount decreased | Ending balance | ||
| Accrual | Other | Reversal or write-off | Other | |||
| Raw materials | 19,906,198.09 | 8,220,891.21 | 4,020,257.81 | 24,106,831.49 | ||
| Goods in process | 68,371.10 | 68,371.10 | ||||
| Finished goods | 101,081,767.83 | 54,067,440.32 | 59,684,599.40 | 95,464,608.75 | ||
| Revolving material | 941,939.14 | 676,172.05 | 1,618,111.19 | |||
| Goods in transit | ||||||
| Work in process-outsourced | 5,290,502.32 | 5,290,502.32 | ||||
| Total | 127,288,778.48 | 62,964,503.58 | 69,063,730.63 | 121,189,551.43 |
| Item | Amount |
| Item | Ending balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Item | Amount changed | Cause of change |
| Item | Current accrual | Current reversal | Charge off/Written-off | Causes |
| Item | Ending book balance | Impairment provision | Ending book value | Fair value | Estimated disposal cost | Estimated disposal time |
12. Non-current asset due within one year
RMB/CNY
| Item | Ending balance | Opening balance |
| Item | Ending balance | Opening balance | ||||||
| Face value | Coupon rate | Actual rate | Maturity date | Face value | Coupon rate | Actual rate | Maturity date | |
| Item | Ending balance | Opening balance |
| Enterprise income tax paid in advance | 9,719.32 | 394,677.16 |
| VAT input tax ready for deduction | 78,086,632.70 | 88,918,809.39 |
| Financial products held to maturity within one year | 30,000,000.00 | 160,000,000.00 |
| Other | 2,315.03 | 5,180,277.49 |
| Total | 108,098,667.05 | 254,493,764.04 |
| Item | Ending balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Item | Ending balance | Opening balance | ||||||
| Face value | Coupon rate | Actual rate | Maturity date | Face value | Coupon rate | Actual rate | Maturity date | |
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) | ||
| Balance of Jan. 1, 2019 in the period | —— | —— | —— | —— |
| Item | Opening balance | Accrual interest | Change of fair value in the period | Ending balance | Cost | Accumulated change of fair value | Loss impairment accumulated recognized in other comprehensive income | Note |
| Other债权Item | Ending balance | Opening balance | ||||||
| Face value | Coupon rate | Actual rate | Maturity date | Face value | Coupon rate | Actual rate | Maturity date | |
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) | ||
| Balance of Jan. 1, 2019 in the period | —— | —— | —— | —— |
16. Long-term account receivable
(1) Long-term account receivable
RMB/CNY
| Item | Ending balance | Opening balance | Discount rate interval | ||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | ||
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) | ||
| Balance of Jan. 1, 2019 in the period | —— | —— | —— | —— |
| The invested entity | Opening balance | Current changes (+,-) | Ending balance | Ending balance of impairment provision | |||||||
| Additional investment | Capital reduction | Investment gains recognized under equity | Other comprehensive income adjustment | Other equity change | Cash dividend or profit announced to issued | Accrual of impairment provision | Other | ||||
| I. Joint venture | |||||||||||
| II. Associated enterprise | |||||||||||
| Shenzhen Shenbao (Xinmin) Foods | 2,870,000.00 | 2,870,000.00 | 2,870,000.00 | ||||||||
| Co., Ltd*1 | |||||||||||
| Changzhou Shenbao Chacang E-business Co., ltd.*2 | |||||||||||
| Shenzhen Shenbao (Liaoyuan) Industrial Co., Ltd*1 | 57,628.53 | 57,628.53 | 57,628.53 | ||||||||
| Huizhou Shenbao Manan Bio-technology Co., Ltd. | 1,050,116.57 | 1,050,116.57 | |||||||||
| Shenzhen Shichumingmen Restaurant Management Co., Ltd.*2 | |||||||||||
| Guangzhou Shenbao Mendao Tea Co., Ltd. | 3,825,725.70 | -135,033.88 | 3,690,691.82 | ||||||||
| Zhuhai Hengxing Feed Industrial | 29,510,771.11 | 666,203.01 | 30,176,974.12 |
| Co., Ltd. | |||||||||||
| Shenzhen Duoxi Equity Investment Fund Management Co., Ltd. | 4,014,625.45 | -180,833.30 | 3,833,792.15 | ||||||||
| Shenliang Intelligent Wulian Equity Investment Fund (Shenzhen) Partnership Enterprise (Limited) | 23,105,662.49 | 3,062,765.12 | 26,168,427.61 | ||||||||
| Shenzhen Shenyuan Data Tech. Co., Ltd | 9,492,765.49 | 9,492,765.49 | |||||||||
| Subtotal | 73,927,295.34 | 1,050,116.57 | 3,413,100.95 | 76,290,279.72 | 2,927,628.53 | ||||||
| Total | 73,927,295.34 | 1,050,116.57 | 3,413,100.95 | 76,290,279.72 | 2,927,628.53 |
| Item | Ending balance | Opening balance |
Itemized the non-tradable equity instrument investment in the period
RMB/CNY
| Item | Dividend income recognized | Cumulative gains | Cumulative losses | Retained earnings transfer from other comprehensive income | Causes of those that designated measured by fair value and with its variation reckoned into other comprehensive income | Cause of retained earnings transfer from other comprehensive income |
| Item | Ending balance | Opening balance |
| Equity instrument investment | 57,500.00 | 57,500.00 |
| Total | 57,500.00 | 57,500.00 |
| Item | House and building | Land use right | Construction in progress | Total |
| I. Original book value | ||||
| 1.Opening balance | 567,162,333.74 | 567,162,333.74 | ||
| 2.Current amount increased | 23,277,994.41 | 23,277,994.41 | ||
| (1) Outsourcing | 506,238.00 | 506,238.00 | ||
| (2) Inventory\fixed assets\construction in process transfer-in | ||||
| (3) Increased by combination | ||||
| (4) Fixed assets re-classify | 22,771,756.41 | 22,771,756.41 |
| 3.Current amount decreased | ||||
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| 4.Ending balance | 590,440,328.15 | 590,440,328.15 | ||
| II. Accumulated depreciation and accumulated amortization | ||||
| 1.Opening balance | 284,540,148.82 | 284,540,148.82 | ||
| 2.Current amount increased | 27,726,929.50 | 27,726,929.50 | ||
| (1) Accrual or amortization | 15,008,484.90 | 15,008,484.90 | ||
| (2) Fixed assets re-classify | 12,718,444.60 | 12,718,444.60 | ||
| 3.Current amount decreased | ||||
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| 4.Ending balance | 312,267,078.32 | 312,267,078.32 | ||
| III. Impairment provision | ||||
| 1.Opening balance | ||||
| 2.Current amount increased | ||||
| (1) Accrual | ||||
| 3. Current amount decreased | ||||
| (1) Disposal | ||||
| (2) Other transfer-out | ||||
| 4.Ending balance | ||||
| IV. Book value |
| 1.Ending book value | 278,173,249.83 | 278,173,249.83 | ||
| 2. Opening book value | 282,622,184.92 | 282,622,184.92 |
| Item | Book value | Reasons |
| Item | Ending balance | Opening balance |
| Fixed assets | 967,835,524.07 | 993,136,743.51 |
| Total | 967,835,524.07 | 993,136,743.51 |
| Item | House and buildings | Machinery equipment | Transport equipment | Electronic and other equipment | Total |
| I. Original book value: | |||||
| 1.Opening balance | 915,002,141.50 | 483,988,177.15 | 19,100,984.41 | 60,021,239.23 | 1,478,112,542.29 |
| 2.Current amount increased | 7,068,163.27 | 1,948,332.70 | 388,401.72 | 1,189,068.09 | 10,593,965.78 |
| (1) Purchase | 851,658.64 | 1,948,332.70 | 388,401.72 | 1,189,068.09 | 4,377,461.15 |
| (2) Construction in progress transfer-in | |||||
| (3) Increased by combination | |||||
| (4) Long-term expenses to be apportioned transfer-in and deduct from fixed assets disposal | 6,216,504.63 | 6,216,504.63 |
| 3.Current amount decreased | 22,972,570.10 | 26,000.00 | 250,083.23 | 170,679.38 | 23,419,332.71 |
| (1) Disposal or scrap | 200,813.69 | 26,000.00 | 250,083.23 | 170,679.38 | 647,576.30 |
| (2) Investment real estate re-classify | 22,771,756.41 | 22,771,756.41 | |||
| 4.Ending balance | 899,097,734.67 | 485,910,509.85 | 19,239,302.90 | 61,039,627.94 | 1,465,287,175.36 |
| II. Accumulated depreciation | |||||
| 1.Opening balance | 180,969,012.00 | 243,434,618.06 | 13,913,087.94 | 36,532,801.29 | 474,849,519.29 |
| 2.Current amount increased | 11,138,187.50 | 8,714,345.81 | 584,438.71 | 5,148,706.96 | 25,585,678.98 |
| (1) Accrual | 11,138,187.50 | 8,714,345.81 | 584,438.71 | 5,148,706.96 | 25,585,678.98 |
| 3.Current amount decreased | 12,723,481.61 | 13,379.16 | 236,714.88 | 136,250.82 | 13,109,826.47 |
| (1) Disposal or scrap | 5,037.01 | 13,379.16 | 236,714.88 | 136,250.82 | 391,381.87 |
| (2) Investment real estate re-classify | 12,718,444.60 | 12,718,444.60 | |||
| 4.Ending balance | 179,383,717.89 | 252,135,584.71 | 14,260,811.77 | 41,545,257.43 | 487,325,371.80 |
| III. Impairment provision | |||||
| 1.Opening balance | 1,797,706.49 | 8,207,030.23 | 93,411.42 | 28,131.35 | 10,126,279.49 |
| 2.Current amount increased | |||||
| (1) Accrual | |||||
| 3.Current amount decreased | |||||
| (1) Disposal or scrap | |||||
| 4.Ending balance | 1,797,706.49 | 8,207,030.23 | 93,411.42 | 28,131.35 | 10,126,279.49 |
| IV. Book value | |||||
| 1.Ending book value | 717,916,310.29 | 225,567,894.91 | 4,885,079.71 | 19,466,239.16 | 967,835,524.07 |
| 2. Opening book value | 732,235,423.01 | 232,346,528.86 | 5,094,485.05 | 23,460,306.59 | 993,136,743.51 |
| Item | Original book value | Accumulated depreciation | Impairment provision | Book value | Note |
| Item | Original book value | Accumulated depreciation | Impairment provision | Book value |
| Item | Ending book value |
| Item | Book value | Reasons for without the property certification |
| House and buildings | 322,147,486.94 | Still under processing |
| House and buildings | 106,732,318.67 | Berth of wharf has right of use, no need to handle the certificate |
| House and buildings | 15,818,640.81 | The planning acceptance and construction acceptance record can not be handle due to the loss of planning and construction historical data, the approval process for construction applications to relevant government departments has been restarted. |
| House and buildings | 16,622,783.16 | Simple and temporary buildings etc, cannot handle the property right certificate |
| Total | 461,321,229.58 |
(6) Fixed assets disposal
RMB/CNY
| Item | Ending balance | Opening balance |
| Item | Ending balance | Opening balance |
| Construction in progress | 403,629,287.82 | 186,586,135.06 |
| Total | 403,629,287.82 | 186,586,135.06 |
| Item | Ending balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Shenbao Plaza project | 3,842,333.64 | 3,842,333.64 | 3,842,333.64 | 3,842,333.64 | ||
| Dongguan grain storage and wharf matching project | 121,640,933.02 | 121,640,933.02 | 91,924,086.19 | 91,924,086.19 | ||
| Deep processing of Dongguan Industry and Trading Food | 76,182,755.87 | 76,182,755.87 | 39,276,418.03 | 39,276,418.03 | ||
| CDE storage of Dongguan Food Industrial Park and wharf mating projects | 193,189,866.13 | 193,189,866.13 | 43,391,511.05 | 43,391,511.05 | ||
| Grain storage and processing | 7,635,165.71 | 7,635,165.71 | 6,621,284.40 | 6,621,284.40 | ||
| Supporting projects related to grain supply | 1,133,400.00 | 1,133,400.00 | ||||
| Workshop transformation of | 711,487.37 | 711,487.37 | ||||
| Flour Company | ||||||
| Other-Management and control system informatization construction project of SZCG | 408,850.00 | 408,850.00 | ||||
| Transformation - Transformer capacity expansion project of Pinghu warehouse | 597,600.06 | 597,600.06 | ||||
| Other | 8,489,430.15 | 5,648,713.12 | 2,840,717.03 | 5,564,537.76 | 903,189.74 | 4,661,348.02 |
| Total | 413,120,334.58 | 9,491,046.76 | 403,629,287.82 | 191,331,658.44 | 4,745,523.38 | 186,586,135.06 |
| Item Name | Budget | Opening balance | Current amount increased | Transfer-in fixed assets | Other decreased in the Period | Ending balance | Proportion of project investment in budget | Progress | Accumulated capitalization of interest | Including: amount of capitalization of interest in Period | Interest capitalization rate in Period | Capital resources |
| Dongguan grain storage and wharf matching project | 91,924,086.19 | 29,716,846.83 | 121,640,933.02 | |||||||||
| Deep processing of Dongguan Industry and Trading | 39,276,418.03 | 36,906,337.84 | 76,182,755.87 |
| Food | ||||||||||||
| CDE storage of Dongguan Food Industrial Park and wharf mating projects | 43,391,511.05 | 149,798,355.08 | 193,189,866.13 | |||||||||
| Grain storage and processing | 6,621,284.40 | 1,013,881.31 | 7,635,165.71 | |||||||||
| Total | 181,213,299.67 | 217,435,421.06 | 398,648,720.73 | -- | -- | -- |
| Item | Amount accrual in the period | Reasons of accrual |
| Item | Ending balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Item | Plant | Livestock | Forestry | Fisheries | Total |
| Tea tree | |||||
| I. Original book value | |||||
| 1.Opening balance | 436,156.00 | 436,156.00 | |||
| 2.Current amount increased | |||||
| (1)Outsourcing | |||||
| (2)self-cultivate | |||||
| 3.Current amount decreased | |||||
| (1)Disposal | |||||
| (2)Other | |||||
| 4.Ending balance | |||||
| II. Accumulated depreciation | |||||
| 1.Opening balance | |||||
| 2.Current amount increased | |||||
| (1)Accrual | |||||
| 3.Current amount decreased | |||||
| (1)Disposal | |||||
| (2)Other | |||||
| 4.Ending balance | 436,156.00 | 436,156.00 | |||
| III. Impairment provision | |||||
| 1.Opening balance | 29,077.08 | 29,077.08 | |||
| 2.Current amount increased | 4,846.18 | 4,846.18 | |||
| (1)Accrual | 4,846.18 | 4,846.18 | |||
| 3.Current amount |
| decreased | |||||
| (1)Disposal | |||||
| (2)Other | |||||
| 4.Ending balance | 33,923.26 | 33,923.26 | |||
| IV. Book value | |||||
| 1.Ending book value | 402,232.74 | 402,232.74 | |||
| 2. Opening book value | 407,078.92 | 407,078.92 |
| Item | Total |
| Item | Land use right | Patent | Non-patent technology | Forest tree use right | Trademark use right | Shop management right | Software use right | Other | Total |
| I. Original book value | |||||||||
| 1.Opening balance | 594,651,154.35 | 46,265,918.89 | 22,871,704.98 | 277,927.77 | 3,610,487.37 | 10,028,021.72 | 5,054,036.12 | 682,759,251.20 | |
| 2.Current amount | 25,676,017.14 | 954,566.08 | 26,630,583.22 |
| increased | |||||||||
| (1) Purchase | 25,676,017.14 | 954,566.08 | 26,630,583.22 | ||||||
| (2) internal R&D | |||||||||
| (3) Increased by combination | |||||||||
| (4) Group handover | |||||||||
| 3.Current amount decreased | 2,977,317.12 | 106,454.45 | 3,083,771.57 | ||||||
| (1) Disposal | 2,977,317.12 | 106,454.45 | 3,083,771.57 | ||||||
| 4.Ending balance | 620,327,171.49 | 43,288,601.77 | 22,871,704.98 | 171,473.32 | 3,610,487.37 | 10,028,021.72 | 6,008,602.20 | 706,306,062.85 | |
| II. Accumulated depreciation | |||||||||
| 1.Opening balance | 69,506,679.20 | 24,341,841.17 | 4,627,352.38 | 165,797.48 | 1,197,835.86 | 3,544,168.52 | 2,656,842.35 | 106,040,516.96 | |
| 2.Current amount increased | 7,707,105.72 | 566,196.28 | 430,340.55 | 3,347.75 | 54,168.03 | 32,200.02 | 1,285,499.83 | 10,078,858.18 | |
| (1) Accrual | 7,707,105.72 | 566,196.28 | 430,340.55 | 3,347.75 | 54,168.03 | 32,200.02 | 1,285,499.83 | 10,078,858.18 | |
| (2) Group handover | |||||||||
| 3.Current | 949,832.38 | 68,737.71 | 1,018,570.09 |
| amount decreased | |||||||||
| (1) Disposal | 949,832.38 | 68,737.71 | 1,018,570.09 | ||||||
| 4.Ending balance | 77,213,784.92 | 23,958,205.07 | 5,057,692.93 | 100,407.52 | 1,252,003.89 | 3,576,368.54 | 3,942,342.18 | 115,100,805.05 | |
| III. Impairment provision | |||||||||
| 1.Opening balance | 5,553,283.54 | 37,716.74 | 1,130,341.88 | 6,721,342.16 | |||||
| 2.Current amount increased | |||||||||
| (1) Accrual | |||||||||
| 3.Current amount decreased | 2,021,691.13 | 37,716.74 | 2,059,407.87 | ||||||
| (1) Disposal | 2,021,691.13 | 37,716.74 | 2,059,407.87 | ||||||
| 4.Ending balance | 3,531,592.41 | 1,130,341.88 | 4,661,934.29 | ||||||
| IV. Book value | |||||||||
| 1.Ending book value | 543,113,386.57 | 15,798,804.29 | 17,814,012.05 | 71,065.80 | 2,358,483.48 | 5,321,311.30 | 2,066,260.02 | 586,543,323.51 | |
| 2. Opening book value | 525,144,475.15 | 16,370,794.18 | 18,244,352.60 | 74,413.55 | 2,412,651.51 | 5,353,511.32 | 2,397,193.77 | 569,997,392.08 |
(2) Land use rights without certificate of ownership
RMB/CNY
| Item | Book value | Reasons for without the property certification |
| Land use right | 69,525,279.34 | Still under processing |
| Land use right | 7,849,990.00 | Collective land, cannot handle the certificate of ownership |
| Total | 77,375,269.34 |
| Item | Opening balance | Current amount increased | Current amount decreased | Ending balance |
| The invested entity or matters forming goodwill | Opening balance | Current increased | Current decreased | Ending balance | ||
| Pu’er Tea Trading Center | 673,940.32 | 673,940.32 | ||||
| Total | 673,940.32 | 673,940.32 | ||||
| The invested entity or matters forming goodwill | Opening balance | Current increased | Current decreased | Ending balance | ||
| Pu’er Tea Trading Center | 673,940.32 | 673,940.32 | ||||
| Total | 673,940.32 | 673,940.32 | ||||
by Yunnan Heng Feng Xiang Investment Co., Ltd. in May 2016. After the completion of the purchase, the Company got command ofYunnan Pu’er Tea Trading Center. The balance between the combined cost and the fair value of net assets on the combining dateformed goodwill of RMB 673,940.32.
Instructions for goodwill impairments test process and key parameters (such as the forecast period growth rate, stable period growthrate, profit rate, discount rate, and forecast period when estimating the present value of the future cash flow), and the method ofconfirming the impairment loss of goodwill:
Impact of goodwill impairment testOther explanation
29. Long-term expenses to be apportioned
RMB/CNY
| Item | Opening balance | Current amount increased | Current amortization | Other decreased | Ending balance |
| Decoration fee | 4,550,750.21 | 639,455.81 | 1,077,318.99 | 4,112,887.03 | |
| Improve expenditure for investment real estate | 8,706,105.90 | 386,402.36 | 1,718,294.87 | 7,374,213.39 | |
| Improve expenditure for fix assets | 2,385,091.34 | 386,402.36 | 1,077,318.99 | 1,694,174.71 | |
| Affiliated project of resident area in Wuyuan Ju Fang Yong | 36,374.47 | 36,374.47 | |||
| Other | 6,121,577.88 | 4,509,660.72 | 7,069,725.36 | 3,561,513.24 | |
| Total | 21,799,899.80 | 5,921,921.25 | 10,979,032.68 | 16,742,788.37 |
| Item | Ending balance | Opening balance | ||
| Deductible temporary differences | Deferred income tax asset | Deductible temporary differences | Deferred income tax asset | |
| Impairment provision for assets | 200,374,677.59 | 49,789,641.65 | 200,997,551.38 | 49,759,336.40 |
| Unrealized profits in | 1,348,710.60 | 337,177.65 | 1,348,710.60 | 337,177.65 |
| internal transactions | ||||
| Deferred income | 115,540.85 | 28,885.21 | 312,307.72 | 78,076.93 |
| Total | 201,838,929.04 | 50,155,704.51 | 202,658,569.70 | 50,174,590.98 |
| Item | Ending balance | Opening balance | ||
| Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities | |
| Asset evaluation increment of enterprise combine under different control | 52,450,293.02 | 13,112,573.25 | 51,909,877.24 | 12,977,469.31 |
| Change of fair value for the financial assets available for sale | 18,060.77 | 43,861.84 | 10,965.46 | |
| Other | 129,230.76 | 32,307.69 | ||
| Total | 52,579,523.78 | 13,162,941.71 | 51,953,739.08 | 12,988,434.77 |
| Item | Trade-off between the deferred income tax assets and liabilities | Ending balance of deferred income tax assets or liabilities after off-set | Trade-off between the deferred income tax assets and liabilities at period-begin | Opening balance of deferred income tax assets or liabilities after off-set |
| Deferred income tax asset | 50,155,704.51 | 50,174,590.98 | ||
| Deferred income tax liabilities | 13,162,941.71 | 12,988,434.77 |
| Item | Ending balance | Opening balance |
| Deductible loss | 114,488,957.68 | 112,864,728.90 |
| Impairment provision for assets | 163,267,590.71 | 172,615,170.87 |
| Deferred income | 98,606,151.11 | 10,097,899.20 |
| Total | 376,362,699.50 | 295,577,798.97 |
| Year | Ending amount | Opening amount | Note |
| Item | Ending balance | Opening balance |
| Prepaid for equipment | 854,782.25 | 866,378.12 |
| Prepaid for engineering | 1,069,771.60 | |
| Total | 854,782.25 | 1,936,149.72 |
| Item | Ending balance | Opening balance |
| Secured loans | 30,000,000.00 | |
| Guarantee loan | 30,000,000.00 | |
| Loan in credit | 30,590,000.00 | 31,600,000.00 |
| Total | 30,590,000.00 | 91,600,000.00 |
(2) Overdue short-term loans without payment
RMB 0 short-term loans over due without paid at period-end, including follow major amount:
RMB/CNY
| Borrower | Ending balance | Loan rate | Overdue time | Overdue interest |
| Item | Ending balance | Opening balance |
| Including: | ||
| Including: |
| Item | Ending balance | Opening balance |
| Category | Ending balance | Opening balance |
| Item | Ending balance | Opening balance |
| Trade accounts payable | 166,948,547.76 | 438,618,768.51 |
| Account payable for engineering | 2,740,687.88 | 31,922,123.90 |
| Other | 1,512,306.39 | 2,197,391.39 |
| Total | 171,201,542.03 | 472,738,283.80 |
(2) Major accounts payable with age over one year
RMB/CNY
| Item | Ending balance | Reasons of outstanding or carry-over |
| Item | Ending balance | Opening balance |
| Account for goods received in advance | 136,680,171.97 | 204,866,040.96 |
| Other | 335.00 | 562,553.20 |
| Total | 136,680,506.97 | 205,428,594.16 |
| Item | Ending balance | Reasons of outstanding or carry-over |
| Item | Amount |
| Item | Ending balance | Opening balance |
| Item | Amount changed | Reasons of changes |
39. Wage payable
(1) Wage payable
RMB/CNY
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| I. Short-term compensation | 121,382,348.52 | 110,755,883.84 | 126,712,977.10 | 105,425,255.26 |
| II. After-service welfare-defined contribution plans | 10,264,159.59 | 7,137,532.42 | 5,709,228.04 | 11,692,463.97 |
| III. Dismissed welfare | 4,062,915.41 | 1,775,288.50 | 4,132,593.81 | 1,705,610.10 |
| Total | 135,709,423.52 | 119,668,704.76 | 136,554,798.95 | 118,823,329.33 |
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| 1. Wage, bonus, allowance and subsidy | 113,607,669.85 | 95,513,877.15 | 112,379,987.79 | 96,741,559.21 |
| 2. Employees’ welfare | 4,322,541.36 | 3,488,228.87 | 834,312.49 | |
| 3. Social insurance charges | 99,598.81 | 3,179,002.40 | 3,253,503.72 | 25,097.49 |
| Including:medical insurance premium | 92,813.10 | 2,908,544.07 | 2,985,246.36 | 16,110.81 |
| Industrial injury insurance premiums | 304.92 | 98,717.46 | 98,733.53 | 288.85 |
| Maternity insurance premiums | 6,480.79 | 171,740.87 | 169,523.83 | 8,697.83 |
| 4. Housing public reserve | 4,268,648.06 | 4,207,418.56 | 61,229.50 | |
| 5. Trade union fee and education fee | 7,675,079.86 | 3,471,814.87 | 3,383,838.16 | 7,763,056.57 |
| 6. Short paid absence | ||||
| Total | 121,382,348.52 | 110,755,883.84 | 126,712,977.10 | 105,425,255.26 |
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| 1. Basic endowment insurance premiums | 236,975.62 | 5,425,569.74 | 5,426,694.64 | 235,850.72 |
| 2. Unemployment insurance premiums | 4,569.75 | 85,387.47 | 85,427.65 | 4,529.57 |
| 3. Enterprise annuity | 10,022,614.22 | 1,626,575.21 | 197,105.75 | 11,452,083.68 |
| Total | 10,264,159.59 | 7,137,532.42 | 5,709,228.04 | 11,692,463.97 |
| Item | Ending balance | Opening balance |
| VAT | 7,962,236.13 | 9,493,004.93 |
| Enterprise income tax | 9,895,834.07 | 9,219,053.50 |
| Personal income tax | 4,381,282.54 | 1,927,699.20 |
| Urban maintenance and construction tax | 2,010,802.27 | 640,819.28 |
| House property tax | 3,618,554.77 | 1,725,020.41 |
| Use tax of land | 1,906,234.62 | 574,505.73 |
| Stamp tax | 139,142.66 | 246,056.29 |
| Educational surtax | 347,625.53 | 483,228.46 |
| Other | 5,893.24 | 660,330.78 |
| Total | 30,267,605.83 | 24,969,718.58 |
| Item | Ending balance | Opening balance |
| Interest payable | 1,020,795.27 | |
| Dividend payable | 2,909,182.74 | 2,909,182.74 |
| Other account payable | 301,049,727.50 | 277,780,365.55 |
| Total | 304,979,705.51 | 280,689,548.29 |
| Item | Ending balance | Opening balance |
| Long-term loans interest for installment | 1,020,795.27 |
| Total | 1,020,795.27 |
| Borrower | Overdue amount | Overdue causes |
| Item | Ending balance | Opening balance |
| Common stock dividends | 2,909,182.74 | 2,909,182.74 |
| Total | 2,909,182.74 | 2,909,182.74 |
| Item | Ending balance | Opening balance |
| Engineering quality retention money and fund of tail | 34,476,867.04 | 3,191,037.22 |
| Deposit and margin | 160,981,227.12 | 151,049,170.31 |
| Intercourse funds and other | 99,081,804.21 | 100,749,160.89 |
| Drawing expenses in advance | 6,509,829.13 | 22,790,997.13 |
| Total | 301,049,727.50 | 277,780,365.55 |
| Item | Ending balance | Reasons of outstanding or carry-over |
| Item | Ending balance | Opening balance |
| Item | Ending balance | Opening balance |
| Long-term loans due within one year | 60,027,362.43 | 55,090,793.79 |
| Total | 60,027,362.43 | 55,090,793.79 |
| Item | Ending balance | Opening balance |
| Subsidies for grain reserve services | 219,151,968.63 | 219,151,968.63 |
| Total | 219,151,968.63 | 219,151,968.63 |
| Bonds | Face value | Issuance date | Bonds term | Amount issued | Opening balance | Issued in the period | Accrual interest by face value | Premium and discount amortization | Paid in the period | Ending balance |
| Item | Ending balance | Opening balance |
| Mortgage loan | 701,297,326.68 | 462,449,380.03 |
| Guarantee loan | 136,114,135.95 | 109,329,205.42 |
| Less: Long-term loans due within one year | -60,027,362.43 | -55,090,793.79 |
| Total | 777,384,100.20 | 516,687,791.66 |
Dongguan Logistics obtained the principal balance of the loan of HSBC of RMB 9,9794,700, of which the non-current liabilities duewithin one year was RMB 20,340,300. SZCG and Dongguan Fruit Vegetable Non-staple Food Trading Market Co., Ltd. provided themaximum guarantee amount for the loan.
(2) Dongguan Industry and Trade, a subsidiary of the Company, signed a bank credit contract with credit number of CN11002181808-190305-SCOM-TML with HSBC, HSBC provided a loan credit not more than RMB233 million to Dongguan Industry and Trade. Theapplicable interest rate for each loan at each interest period is from 5% to 3% of the loan benchmark interest rate of central bankapplicable on the fixed interest date of the interest period, the borrowing date was from May 9, 2019 to May 8, 2024. As of June 30,2019, Dongguan Industry and Trade had obtained the principal balance of the loan of RMB 36,319,500 from HSBC. SZCG andDongguan Fruit Vegetable Non-staple Food Trading Market Co., Ltd. provided the maximum guarantee amount for the loan.
(ii) Mortgage loan
(1) Dongguan Food Industry Park, a subsidiary of the Company, signed the loan contract of “Yue DG 2017 NGDZ No. 006” with Bankof Communications Guangdong Branch, the loan amount is RMB 768 million, and the loan term is from September 22, 2017 to August29, 2032. The loan under this contract is only used for the construction of the warehousing and logistics distribution center project ofDongguan Food Industry Park. The principal of the current loan was RMB 49.8 million, RMB 3,783,400, RMB 30 million, RMB 200million and RMB 200 million, the loan interest rate of last two RMB 200 million were calculated by the benchmark interest rate forloan of the People’s Bank of China on the loan entry date, which was 4.90%; the other three loans were calculated by the benchmarkinterest rate of the People’s Bank of China on the loan entry date after rising by 15%, which is 5.635%. As of 30
thJune 2019, the totalloan balance under the above loan contract was RMB 483,583,400. Dongguan Food Industry Park mortgaged its two pieces of lands(DFGY (2009) DT No. 190) and (DFGY (2012) DT No. 152) for the borrowing. At the same time, the Company’s subsidiaries, SZCGand Dongguan Fruit Vegetable Non-staple Food Trading Market Co., Ltd., provide joint liability guarantee.
(2) Dongguan Logistics, a subsidiary of the Company, signed a loan contract with contract number of 44031000-2015 (Shen) Zi No.0023 with China Agricultural Development Bank, with a total loan amount of RMB 273 million and an annual interest rate of 5.4%,the interest rate is adjusted year by year from the actual withdrawal date based on the adjustment of benchmark interest rate for loan ofthe People's Bank of China, and the loan period is from July 31, 2015 to July 12, 2023. As of 30
th
June 2019, the balance under theabove contract was RMB 212,813,900, of which the non-current liabilities due within one year were RMB 39,687,000. ShenzhenCereals Group has provided guarantee for the loan, and taken Dongguan Logistics’ land “DFGY(2014) DT No. 6” at No. 32, JiansheRoad, Masan Village, Machong Town, Dongguan City and the above-ground buildings and structures to be built in the future asmortgages, of which the land assessment value is RMB 51.21 million.
(3) Dongguan Logistics, a subsidiary of the Company, signed a loan contract with contract number of 44191000-2018 (Dongben) ZiNo. 0100 with China Agricultural Development Bank, with a total loan amount of RMB 430 million and an annual interest rate of
4.9%, the interest rate is adjusted year by year from the actual withdrawal date based on the adjustment of benchmark interest rate forloan of the People's Bank of China, and the loan period was from January 25, 2019 to January 24, 2031. As of June 30, 2019, thebalance under the above contract was RMB 4.9 million. The Company’s subsidiaries, SZCG and Dongguan Fruit Vegetable Non-stapleFood Trading Market Co., Ltd., and Dongguan Houjie Xunda Industrial Co., Ltd. provided joint liability guarantee for the borrowing,and took Dongguan Logistics’ land “Yue (2016) DGSBDCQ No. 0028527” as a mortgage, of which the land assessment value is RMB52,290,800.
Other explanation, including interest rate range:
46. Bonds payable
(1) Bonds payable
RMB/CNY
| Item | Ending balance | Opening balance |
| Outstanding financial instrument | Period-beginning | Current increased | Current decreased | Period-end | ||||
| Amount | Book value | Amount | Book value | Amount | Book value | Amount | Book value | |
| Item | Ending balance | Opening balance |
| Item | Ending balance | Opening balance |
| Special account payable | 15,724,141.66 | 15,690,202.08 |
| Total | 15,724,141.66 | 15,690,202.08 |
| Item | Ending balance | Opening balance |
| Item | Opening balance | Current increased | Current decreased | Ending balance | Causes |
| Depreciation fund for grain deposits | 15,471,085.99 | 39,978.58 | 15,511,064.57 | The finance allocated to the company as a government investment in depreciation special funds of reserve grain depot and interest. | |
| Special funds for public welfare scientific research in grain industry | 219,116.09 | 6,039.00 | 213,077.09 | ||
| Total | 15,690,202.08 | 39,978.58 | 6,039.00 | 15,724,141.66 | -- |
| Item | Ending balance | Opening balance |
| Item | Current Period | Last Period |
| Item | Current Period | Last Period |
| Item | Current Period | Last Period |
Content of defined benefit plans and relevant risks, impact on future cash flow of the Company as well as times and uncertainty:
Major actuarial assumption and sensitivity analysis:
Other explanation:
50. Accrual liabilities
Whether implemented the new revenue standards
□Yes √No
RMB/CNY
| Item | Ending balance | Opening balance | Causes |
| Item | Opening balance | Current increased | Current decreased | Ending balance | Causes |
| Government grants | 100,608,203.01 | 1,386.60 | 1,887,897.65 | 98,721,691.96 | See table below for details |
| Total | 100,608,203.01 | 1,386.60 | 1,887,897.65 | 98,721,691.96 | -- |
| Liability | Opening balance | New grants in the Period | Amount reckoned in non-operation revenue | Amount reckoned in other income | Cost reduction in the period | Other changes | Ending balance | Assets-related/income related |
| (1) Base of further processing for tea and nature plants | 1,100,000.00 | 520,462.29 | 579,537.71 | Assets-related | ||||
| (2) Enterprise technology center is a municipal R&D center. Subsidies for industrial technological advancement | 1,987,301.17 | 1,987,301.17 | Assets-related | |||||
| (3) Project | 312,307.72 | 312,307.72 | Assets- |
| grants for years for agricultural district, Xihu Zone | related | |||||||
| (4)Key technology research and development for the preparation of high-quality aroma extracts based on the use of tea aroma precursors | 241,323.58 | 2,490.27 | 238,833.31 | Income-related | ||||
| (5)Key technology research and development for the preparation of high-quality aroma extracts based on the use of tea aroma precursors | 243,233.62 | 104,329.55 | 138,904.07 | Assets-related | ||||
| (6) Finance Discount | 337,222.22 | 337,222.22 | Assets-related | |||||
| (7) Industrialization of instant tea powder | 2,084,136.67 | 2,084,136.67 | Assets-related | |||||
| (8) Grant for key technology research and industrialization of | 153,011.21 | 153,011.21 | Assets-related |
| instant tea powder | ||||||||
| (9) Special fund for the development of strategic emerging industries in Shenzhen(plant deep processing engineering) (Shen Development & Reform No. 20131601) | 3,538,892.95 | 3,538,892.95 | Assets-related | |||||
| (10)Construction amount for 50 tons for clearly processing for Mingyou tea | 500,000.00 | 62,500.00 | 437,500.00 | Assets-related | ||||
| (11) Subsidy for tea seeding of New Tea Garden in Wangkou | 46,129.96 | 1,386.60 | 1,941.24 | 45,575.32 | Assets-related | |||
| (12) Subsidy for supply system construction of agricultural products | 750,000.00 | 750,000.00 | Assets-related | |||||
| (13) Grain storage project of Dongguan Shenliang Logistics Co., | 8,242,417.83 | 131,128.56 | 8,111,289.27 | Assets-related |
| Ltd. - Storage A | ||||||||
| (14) Phase II of grain storage project of Dongguan Shenliang Logistics Co., Ltd.- Storage B | 32,968,699.52 | 515,650.26 | 32,453,049.26 | Assets-related | ||||
| (15) Grain, oil and food headquarters and innovative public service platform of Dongguan Shenliang Logistics Co., Ltd. | 18,000,000.00 | 18,000,000.00 | Assets-related | |||||
| (16)Special funds for intelligent upgrading and transformation of grain warehouse for the 2017 “Grain Safety Project” | 5,100,000.00 | 5,100,000.00 | Assets-related | |||||
| (17) Construction of 450000 ton silos and 60000 ton film silos -CDE warehouse. Gas storage bin | 17,491,764.71 | 17,491,764.71 | Assets-related |
| (18) Special fund for agricultural development in Shenzhen - subsidy for agricultural product quality and safety testing capacity-building project | Assets-related | |||||||
| (19) Special fund for agricultural development of 2016- agricultural product safety testing project- capacity building of the third party inspection institution expansion evaluation | 492,000.00 | 492,000.00 | Assets-related | |||||
| (20)Agricultural product safety testing project of the special fund for agricultural development of 2016 - Central investment fund | 1,026,000.00 | 1,026,000.00 | Assets-related | |||||
| (21) | 1,789,411.20 | 19,288.02 | 1,770,123.18 | Assets- |
| Construction of O2O community sales service system for high quality grain and oil based on B2C E-commerce platform | related | |||||||
| (22) Industrialization of Doximi E-commerce platform | 2,813,684.01 | 430,107.44 | 2,383,576.57 | Assets-related | ||||
| (23) Commercial circulation development project funding for year of 2017 | 524,000.00 | 524,000.00 | Assets-related | |||||
| (24) Intelligent management of grain depot based on mobile internet | 866,666.64 | 100,000.02 | 766,666.62 | Assets-related | ||||
| Total | 100,608,203.01 | 1,386.60 | 1,887,897.65 | 98,721,691.96 |
| Item | Ending balance | Opening balance |
53. Share capital
In RMB/CNY
| Opening balance | Increased (decreased) in this year +,- | Ending balance | |||||
| New shares issued | Bonus shares | Shares converted from public reserve | Other | Subtotal | |||
| Total shares | 1,152,535,254.00 | 1,152,535,254.00 | |||||
| Outstanding financial instrument | Period-beginning | Current increased | Current decreased | Period-end | ||||
| Amount | Book value | Amount | Book value | Amount | Book value | Amount | Book value | |
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| Capital premium (Share capital premium) | 1,413,996,347.50 | 1,413,996,347.50 | ||
| Other capital reserve | 8,896,381.86 | 8,896,381.86 | ||
| Total | 1,422,892,729.36 | 1,422,892,729.36 |
| Item | Opening balance | Current increased | Current decreased | Ending balance |
57. Other comprehensive income
RMB/CNY
| Item | Opening balance | Current Period | Ending balance | |||||
| Account before income tax in the period | Less: written in other comprehensive income in previous period and carried forward to gains and losses in current period | Less: written in other comprehensive income in previous period and carried forward to retained earnings in current period | Less : income tax expense | Belong to parent company after tax | Belong to minority shareholders after tax | |||
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| Production safety fee | 154.21 | 460,394.34 | 398,138.99 | 62,409.56 |
| Total | 154.21 | 460,394.34 | 398,138.99 | 62,409.56 |
| Item | Opening balance | Current increased | Current decreased | Ending balance |
| Statutory surplus reserves | 327,140,910.28 | 327,140,910.28 | ||
| Total | 327,140,910.28 | 327,140,910.28 |
| Item | Current period | Last period |
| Retained profit at the end of the previous year before adjustment | 1,269,933,487.26 | 961,602,454.82 |
| Total retained profit at the beginning of the previous year before adjustment | 1,269,933,487.26 | 961,602,454.82 |
| Add: net profit attributable to shareholder of parent company | 203,168,850.61 | 308,331,032.44 |
| Common stock dividends payable | 115,253,525.40 | |
| Retained profit at period-end | 1,357,848,812.47 | 1,269,933,487.26 |
| Item | Current Period | Last Period | ||
| Income | Cost | Income | Cost | |
| Main business | 4,778,550,071.95 | 4,258,702,014.11 | 4,430,802,356.92 | 3,960,514,399.97 |
| Other business | 3,617,660.74 | 3,399,756.51 | 3,886,289.90 | 2,238,763.29 |
| Total | 4,782,167,732.69 | 4,262,101,770.62 | 4,434,688,646.82 | 3,962,753,163.26 |
| Item | Current Period | Last Period |
| Urban maintenance and construction tax | 850,546.63 | 760,276.77 |
| Educational surtax | 647,628.82 | 531,572.95 |
| House property tax | 3,902,342.55 | 4,101,505.15 |
| Use tax of land | 856,035.80 | 1,734,334.20 |
| Stamp tax | 339,910.55 | 490,071.74 |
| Other | 9,049.85 | 44,157.29 |
| Total | 6,605,514.20 | 7,661,918.10 |
| Item | Current Period | Last Period |
| Labor and social security benefits | 28,921,374.58 | 28,566,852.50 |
| Rental | 4,572,089.52 | 5,202,348.44 |
| Utilities and office expenses | 2,983,459.64 | 2,256,674.49 |
| After-sale services | 3,239,606.10 | 2,278,428.97 |
| Logistics transportation fee | 55,354,469.30 | 64,795,623.08 |
| Travel expenses | 1,356,310.96 | 1,393,737.48 |
| Equivalent loss for low value perishable goods | 1,481,592.76 | 73,335.37 |
| Depreciation and amortization of long-term assets | 5,855,616.32 | 6,325,647.19 |
| Business hospitality | 485,263.49 | 891,031.17 |
| Advertisement charge | 406,507.02 | 340,028.56 |
| Sales commission | 893.65 | 33,525.44 |
| Property insurance premium | 462,098.96 | 636,293.07 |
| Other | 7,434,460.44 | 7,658,578.54 |
| Total | 112,553,742.74 | 120,452,104.30 |
| Item | Current Period | Last Period |
| Labor and social security benefits | 64,112,522.69 | 57,480,497.61 |
| Communication fee | 698,972.98 | 469,589.19 |
| Vehicle usage fee | 678,600.30 | 629,920.42 |
| Low-value consumables | 141,751.26 | 148,541.67 |
| Repair cost | 264,513.27 | 154,127.60 |
| Depreciation and amortization of long- | 11,830,728.97 | 16,385,472.44 |
| term assets | ||
| Travel expenses | 1,286,620.67 | 1,585,963.64 |
| Business hospitality | 1,227,426.99 | 1,807,036.55 |
| Office expenses | 7,666,398.75 | 3,974,305.97 |
| Rental | 750,998.75 | 747,002.77 |
| Intermediary fees | 3,750,693.95 | 7,635,130.54 |
| Other | 8,988,719.41 | 5,306,440.50 |
| Total | 101,397,947.99 | 96,324,028.90 |
| Item | Current Period | Last Period |
| Labor and social security benefits | 2,786,779.24 | 2,090,867.55 |
| Depreciation cost | 619,854.40 | 443,606.10 |
| Office expenses | 280,219.64 | 237,386.41 |
| Travel expenses | 180,071.96 | 39,290.22 |
| Logistics consumption | 199,042.35 | 8,028.00 |
| Intermediary fees | 43,200.00 | |
| Maintenance and inspection fee | 35,889.40 | 38,966.32 |
| Material costs | 20,436.66 | |
| Other | 45,981.26 | 118,917.94 |
| Total | 4,211,474.91 | 2,977,062.54 |
| Item | Current Period | Last Period |
| Interest expenses | 10,087,784.34 | 4,313,048.72 |
| Less: Interest income | 2,185,171.96 | 3,899,478.59 |
| Exchange loss | 303,008.96 | -2,999,702.59 |
| Bank commission charge and others | 314,110.51 | 412,826.19 |
| Total | 8,519,731.85 | -2,173,306.27 |
67. Other income
RMB/CNY
| Sources | Current Period | Last Period |
| R&D subsidy for 2018 from Shenzhen Science & Technology Innovation Committee | 216,000.00 | |
| Other subsidy | 1,023,166.45 | |
| Received the construction subsidy for top talents project of Guangdong Provincial Grain & Material Reserve Bureau | 30,000.00 | |
| Grain talents program subsidy | 20,269.70 | |
| Amortization of deferred income | 1,402,816.24 | |
| Amortization of deferred income | 485,081.41 | |
| Received the loan discount for leading agricultural enterprises | 388,300.00 | |
| Service charges are refund by Taxation Bureau | 126,043.99 | |
| Received the intermediary fee subsidy for mergers and acquisition of the Nanshan Economic promotion Bureau | 738,700.00 | |
| Received the employee social insurance subsidy (1-9) of Wuyuan County Finance Bureau for 2018 | 470,078.93 | |
| Received the patent award for 2018 from Shangrao Intellectual Property Bureau | 50,000.00 | |
| Received the guiding funds for industrial development for 2018 from Industry and Information Technology Bureau (Fiscal Appropriation) | 170,697.00 | |
| Received the high-tech enterprise award for 2018 from Industry and Information Technology Bureau (Fiscal Appropriation) | 200,000.00 | |
| Received the provincial R&D center fund for 2018 from Industry and Information Technology Bureau (Fiscal Appropriation) | 50,000.00 | |
| Amount of the new project of 50 tons clean mingou tea processing for first half of 2019 | 62,500.00 |
| Government grants | 826,872.02 | |
| Special supporting funds for the development of independent innovative industry in Nanshan District (funding for modern agricultural development) | 451,582.44 | |
| Doximi's construction of O2O community sales service system for high quality grain and oil based on B2C E-commerce platform | 19,288.02 | |
| Funds for construction of the agricultural products supply system | 100,000.00 | |
| Grain modern logistics for year of 2014 | 128,150.93 | |
| Special funds for the development of E-commerce development service industry | 1,000,000.00 | |
| Industrial development funds in Futian District, the 2nd batch of supporting enterprise for year of 2013 | 1,100,000.00 | |
| Investment subsidy for the infrastructure works of Dongguan International Food Industrial Park Development Co., Ltd from Guangdong Development & Reform Commission and Guangdong provincial Food Bureau | 69,411.76 | |
| Grain storage facilities (expansion of 150000 tons of warehouse capacity) | 541,158.45 | |
| Subsidy for internet of things project supervised by the State for Grain Storage and Transportation | 54,500.00 | |
| Independent innovation support funds of SASAC based on mobile internet project | 33,333.34 | |
| Total | 5,433,653.72 | 4,324,296.96 |
| Item | Current Period | Last Period |
| Long-term equity investment income measured by equity | 3,413,100.95 | 626,055.86 |
| Investment income from disposal of long-term equity investment | 127,368.82 |
| Income from financial products | 3,627,466.27 | 717,351.60 |
| Total | 7,167,936.04 | 1,343,407.46 |
| Item | Current Period | Last Period |
| Sources | Current Period | Last Period |
| Tradable financial assets | 28,381.21 | -425,718.15 |
| Total | 28,381.21 | -425,718.15 |
| Item | Current Period | Last Period |
| Loss of bad debt of other account receivable | 5,143,559.77 | |
| Total | 5,143,559.77 |
| Item | Current Period | Last Period |
| I. Bad debt losses | 2,063,558.29 | 116,491.30 |
| II. Provision for falling price of inventory | -71,294,981.71 | -32,678,876.93 |
| Total | -69,231,423.42 | -32,562,385.63 |
73. Income from assets disposal
RMB/CNY
| Sources | Current Period | Last Period |
| Gains or losses from fixed assets disposal | -4,184.59 | -210,840.01 |
| Item | Current Period | Last Period | Amount included in the current non-recurring profit and loss |
| Government grants | 3,000.00 | 3,000.00 | |
| Other | 359,252.46 | 980,860.83 | 359,252.46 |
| Total | 362,252.46 | 980,860.83 | 362,252.46 |
| Grants | Issuing subject | Issuing cause | Property type | Whether the impact of subsidies on the current profit and loss | Whether special subsidies | Amount of this period | Amount of last period | Assets related/Income related |
| Item | Current Period | Last Period | Amount included in the current non-recurring profit and loss |
| External donations | 2,000,000.00 | 525,810.97 | 2,000,000.00 |
| Abnormal loss | 1,962,312.38 | 1,962,312.38 | |
| Inventory loss | 4,693.69 | 4,693.69 | |
| Loss of scrap from non-current assets | 14,840.94 | 69,625.01 | 14,840.94 |
| Other | 172.94 | 56.74 | 172.94 |
| Total | 3,982,019.95 | 595,492.72 | 3,982,019.95 |
76. Income tax expense
(1) Income tax expense
RMB/CNY
| Item | Current Period | Last Period |
| Current income tax expenses | 8,075,504.29 | 13,790,990.10 |
| Deferred income tax expenses | 7,409,789.74 | -1,921,138.04 |
| Total | 15,485,294.03 | 11,869,852.06 |
| Item | Current Period |
| Total profit | 231,725,928.50 |
| Income tax expenses calculated by statutory tax rate | 57,931,482.13 |
| Impact from different tax rate apply with the subsidiary | -2,440,713.51 |
| Impact on cost, expenses and losses that unable to deducted | -45,351,677.76 |
| Impact of the deductible loss on deferred income tax assets not recognized in the prior period of use | -556,944.32 |
| Unrecognized impacts of deductible temporary differences or deductible losses on deferred income tax assets in the period | 2,744,541.31 |
| Impact on R&D costs deduction | 3,158,606.18 |
| Income tax expenses | 15,485,294.03 |
| Item | Current Period | Last Period |
| Interest income | 2,185,171.96 | 3,629,642.58 |
| Government grants | 4,448,353.51 | 6,683,802.85 |
| Intercourse funds and other | 180,418,202.50 | 14,233,661.27 |
| Total | 187,051,727.97 | 24,547,106.70 |
| Item | Current Period | Last Period |
| Expenses | 102,412,945.42 | 105,648,051.11 |
| Intercourse funds and other | 153,621,034.86 | 98,464,612.88 |
| Total | 256,033,980.28 | 204,112,663.99 |
| Item | Current Period | Last Period |
| Item | Current Period | Last Period |
| Item | Current Period | Last Period |
| Investment amount received in advance | 24,500,000.00 | |
| Total | 24,500,000.00 |
| Item | Current Period | Last Period |
| Relevant expenses for bonus paid | 72,997.72 | |
| Total | 72,997.72 |
| Supplementary information | Current period | Last period |
| 1. Net profit adjusted to cash flow of operation activities: | -- | -- |
| Net profit | 216,240,634.47 | 207,677,952.67 |
| Add: Impairment provision for assets | 64,087,863.65 | 32,562,605.32 |
| Depreciation of fixed assets, consumption of oil assets and depreciation of productive biology assets | 25,585,678.98 | 36,676,343.25 |
| Amortization of intangible assets | 10,078,858.18 | 11,002,051.40 |
| Amortization of long-term pending expenses | 10,979,032.68 | 3,423,495.33 |
| Loss from disposal of fixed assets, intangible assets and other long-term assets (income is listed with “-”) | 4,184.59 | 210,840.01 |
| Losses on scrapping of fixed assets (income is listed with “-“) | 14,840.94 | 69,625.01 |
| Loss from change of fair value (income is listed with “-“) | -28,381.21 | 425,718.15 |
| Financial expenses (income is listed with “-”) | 10,087,784.34 | 1,914,851.35 |
| Investment loss (income is listed with “-”) | -7,167,936.04 | -1,343,407.46 |
| Decrease of deferred income tax assets (increase is listed with “-”) | 18,886.47 | -1,641,669.44 |
| Decrease of deferred income tax asset( (increase is listed with “-”) | 174,506.94 | -317,403.72 |
| Decrease of inventory (increase is listed with “-”) | -235,691,486.95 | -112,655,074.54 |
| Decrease of operating receivable accounts (increase is listed with “-”) | -118,497,256.23 | 104,836,662.81 |
| Increase of operating payable accounts (decrease is listed with “-”) | -365,316,840.56 | -229,981,344.84 |
| Net cash flow arising from operating activities | -389,429,629.75 | 52,861,245.30 |
| 2. Material investment and financing not involved in cash flow | -- | -- |
| 3. Net change of cash and cash equivalents: | -- | -- |
| Balance of cash at period end | 189,914,485.39 | 359,443,755.10 |
| Less: Balance of cash at year-begin | 631,638,339.68 | 544,440,739.45 |
| Net increasing of cash and cash equivalents | -441,723,854.29 | -184,996,984.35 |
| Amount | |
| Including: | -- |
| Including: | -- |
| Including: | -- |
| Amount | |
| Including: | -- |
| Including: | -- |
| Including: | -- |
| Item | Ending balance | Opening balance |
| I. Cash | 189,914,485.39 | 631,638,339.68 |
| Including: Cash on hand | 248,295.15 | 282,322.45 |
| Bank deposit available for payment at any time | 189,525,109.14 | 631,190,032.12 |
| Other monetary fund available for payment at any time | 141,081.10 | 165,985.11 |
| III. Balance of cash and cash equivalent at period-end | 189,914,485.39 | 631,638,339.68 |
| Item | Ending book value | Reasons for restriction |
| Fixed assets | 371,805,770.40 | According to the long-term loan mortgage contract signed by Dongguan Shenliang Logistics, a subsidiary of the Company, and Agricultural Development Bank, Dongguan Logistics mortgaged the land (DFGY (2014) DT No. 6) of No. 32, Jianshe Road, Masan Village, Machong Town, Dongguan City and the grain storage and terminal facilities to be built and other buildings and structures on the ground to Agricultural Development Bank as collateral for the loan. In addition, according to the “44191000-2018 (Dongben) Zi No. 0100” loan contract signed by Dongguan Shenliang Logistics and China Agricultural Development Bank, Dongguan Logistics mortgaged the land “Yue (2016) DGSBDCQ No. 0028527” to the China Agricultural Development Bank as borrowing collateral. |
| Intangible assets | 83,859,264.48 | According to the long-term loan mortgage contract signed by Dongguan Shenliang Logistics, a subsidiary of the Company, and Agricultural Development Bank, Dongguan Logistics mortgaged the land (DFGY (2014) DT No. 6) of No. 32, Jianshe Road, Masan Village, Machong Town, Dongguan City and the grain storage and terminal facilities to be built and other buildings and structures on the ground to Agricultural Development Bank as collateral for the loan. In addition, according to the “44191000-2018 (Dongben) Zi No. 0100” loan contract signed by Dongguan Shenliang Logistics and China Agricultural Development Bank, Dongguan Logistics mortgaged the land “Yue (2016) DGSBDCQ No. 0028527” to the China Agricultural Development Bank as borrowing collateral. |
| Construction in progress | 76,182,755.87 | According to the long-term loan mortgage contract signed by Dongguan Shenliang Logistics, a subsidiary of the Company, and Agricultural Development Bank, Dongguan Logistics mortgaged the land (DFGY (2014) DT No. 6) of No. 32, Jianshe Road, Masan Village, Machong Town, Dongguan City and the grain storage and terminal facilities to be built and other buildings and structures on the ground to Agricultural Development Bank as collateral for the loan. In addition, |
| according to the “44191000-2018 (Dongben) Zi No. 0100” loan contract signed by Dongguan Shenliang Logistics and China Agricultural Development Bank, Dongguan Logistics mortgaged the land “Yue (2016) DGSBDCQ No. 0028527” to the China Agricultural Development Bank as borrowing collateral. | ||
| Intangible assets | 35,798,712.71 | According to the loan contract of “Guangdong DG 2017 NGDZ No. 006” signed by Dongguan Food Industrial Park, a subsidiary of the Company, and Bank of Communications Guangdong Branch, Dongguan Food Industry Park mortgaged its two pieces of lands (DFGY (2009) DT No. 190) and (DFGY (2012) DT No. 152) to Bank of Communications Guangdong Branch as collateral for the borrowing. |
| Total | 567,646,503.46 | -- |
| Item | Ending foreign currency balance | Convert rate | Ending RMB balance converted |
| Monetary funds | -- | -- | 2,709,685.00 |
| Including: USD | 362,401.02 | 6.8747 | 2,491,398.31 |
| EURO | |||
| HKD | 248,148.93 | 0.8797 | 218,286.69 |
| Account receivable | -- | -- | 2,013,144.22 |
| Including: USD | 278,280.34 | 6.8747 | 1,913,093.86 |
| EURO | |||
| HKD | 113,737.53 | 0.8797 | 100,050.36 |
| Long-term loans | -- | -- | |
| Including: USD | |||
| EURO | |||
| HKD | |||
(2) Explanation on foreign operational entity, including as for the major foreign operational entity, disclosedmain operation place, book-keeping currency and basis for selection; if the book-keeping currency changed,explain reasons
□ Applicable √Not applicable
83. Hedging
Disclosed hedging items and relevant hedging instrument based on hedging’s category, disclosed qualitative and quantitativeinformation for the arbitrage risks:
84. Government grants
(1) Government grants
RMB/CNY
| Category | Amount | Item | Amount reckoned into current gains/losses |
| (1) Base of further processing for tea and nature plants | 579,537.71 | Deferred income | 520,462.29 |
| (2) Enterprise technology center is a municipal R&D center. Subsidies for industrial technological advancement | 1,987,301.17 | Deferred income | 0.00 |
| (3) Project grants for years for agricultural district, Xihu Zone | 312,307.72 | Deferred income | 0.00 |
| (4)Key technology research and development for the preparation of high-quality aroma extracts based on the use of tea aroma precursors | 238,833.31 | Deferred income | 2,490.27 |
| (5)Key technology research and development for the preparation of high-quality aroma extracts based on the use of tea aroma precursors | 138,904.07 | Deferred income | 104,329.55 |
| (6) Finance Discount | 337,222.22 | Deferred income | 0.00 |
| (7) Industrialization of instant tea powder | 2,084,136.67 | Deferred income | 0.00 |
| (8) Grant for key technology research and industrialization of instant tea powder | 153,011.21 | Deferred income | 0.00 |
| (9) Special fund for the development of strategic emerging industries in Shenzhen(plant deep processing engineering) (Shen Development & Reform No. 20131601) | 3,538,892.95 | Deferred income | 0.00 |
| (10)Construction amount for 50 tons for clearly processing for Mingyou tea | 437,500.00 | Deferred income | 62,500.00 |
| (11) Subsidy for tea seeding of New Tea Garden in Wangkou | 45,575.32 | Deferred income | 1,941.24 |
| (12) Subsidy for supply system construction of agricultural products | 750,000.00 | Deferred income | 0.00 |
| (13) Grain storage project of Dongguan Shenliang Logistics Co., Ltd. - Storage A | 8,111,289.27 | Deferred income | 131,128.56 |
| (14) Phase II of grain storage project of Dongguan Shenliang Logistics Co., Ltd.- Storage B | 32,453,049.26 | Deferred income | 515,650.26 |
| (15) Grain, oil and food headquarters and innovative public service platform of Dongguan Shenliang Logistics Co., Ltd. | 18,000,000.00 | Deferred income | 0.00 |
| (16)Special funds for intelligent upgrading and transformation of grain warehouse for the 2017 “Grain Safety Project” | 5,100,000.00 | Deferred income | 0.00 |
| (17) Construction of 450000 ton silos and 60000 ton film silos -CDE warehouse. Gas storage bin | 17,491,764.71 | Deferred income | 0.00 |
| (18) Special fund for agricultural development of 2016- agricultural product safety testing project- capacity building of the third party inspection institution expansion evaluation | 492,000.00 | Deferred income | 0.00 |
| (19)Agricultural product safety testing project of the special fund for agricultural development of 2016 - Central investment fund | 1,026,000.00 | Deferred income | 0.00 |
| (20) Construction of O2O community sales service system for high quality grain and oil based on B2C E-commerce platform | 1,770,123.18 | Deferred income | 19,288.02 |
| (21) Industrialization of Doximi E-commerce platform | 2,383,576.57 | Deferred income | 430,107.44 |
| (22) Commercial circulation development project funding for year of 2017 | 524,000.00 | Deferred income | 0.00 |
| (23) Intelligent management of grain depot based on mobile internet | 766,666.62 | Deferred income | 100,000.02 |
| (24) R&D subsidy for 2018 from Shenzhen Science & Technology Innovation Committee | 216,000.00 | Other income | 216,000.00 |
| (25) Other subsidy | 1,023,166.45 | Other income | 1,023,166.45 |
| (26) Received the construction subsidy for top talents project of Guangdong Provincial Grain & Material Reserve Bureau | 30,000.00 | Other income | 30,000.00 |
| (27) Grain talents program subsidy | 20,269.70 | Other income | 20,269.70 |
| (28) Received the loan discount for leading agricultural enterprises | 388,300.00 | Other income | 388,300.00 |
| (29) Service charges are refund by Taxation Bureau | 126,043.99 | Other income | 126,043.99 |
| (30) Received the intermediary fee subsidy for mergers and acquisition of the Nanshan Economic promotion Bureau | 738,700.00 | Other income | 738,700.00 |
| (31) Received the employee social insurance subsidy (1-9) of Wuyuan County Finance Bureau for 2018 | 470,078.93 | Other income | 470,078.93 |
| (32) Received the patent award for 2018 from Shangrao Intellectual Property Bureau | 50,000.00 | Other income | 50,000.00 |
| (33) Received the guiding funds for industrial development for 2018 from Industry and Information Technology Bureau (Fiscal Appropriation) | 170,697.00 | Other income | 170,697.00 |
| (34) Received the high-tech enterprise award for 2018 from Industry and Information Technology Bureau (Fiscal Appropriation) | 200,000.00 | Other income | 200,000.00 |
| (35) Received the provincial R&D center fund for 2018 from Industry and Information Technology Bureau (Fiscal Appropriation) | 50,000.00 | Other income | 50,000.00 |
| (36) Amount of the new project of 50 tons clean mingou tea processing for first half of 2019 | 62,500.00 | Other income | 62,500.00 |
| Total | 102,267,448.03 | 5,433,653.72 |
| Acquiree | Time point for equity obtained | Cost of equity obtained | Ratio of equity obtained | Acquired way Equity obtained way | Purchasing date | Standard to determine the purchasing date | Income of acquiree from purchasing date to period-end | Net profit of acquiree from purchasing date to period-end |
| Combination cost |
(3) Identifiable assets and liability on purchasing date under the acquiree
RMB/CNY
| Fair value on purchasing date | Book value on purchasing date | |
| Acquiree | Equity ratio obtained in combination | Basis of combined under the same control | Combination date | Standard to determine the combination date | Income of the combined party from period-begin of combination to the combination date | Net profit of the combined party from period-begin of combination to the combination date | Income of the combined party during the comparison period | Net profit of the combined party during the comparison period |
| Combination cost |
(3) Book value of the assets and liability of the combined party on combination date
RMB/CNY
| On purchasing date | At end of last period | |
| Subsidiary | Main operation place | Registered place | Business nature | Share-holding ratio | Acquired way | |
| Directly | Indirectly | |||||
| Shenbao Huacheng | Shenzhen | Shenzhen | Manufacturing | 100.00% | Establishment | |
| Wuyuan Ju Fang Yong | Shangrao | Shangrao | Manufacturing | 100.00% | Establishment | |
| Shenbao Sanjing | Huizhou | Shenzhen | Manufacturing | 100.00% | Establishment | |
| Huizhou Shenbao Technology | Huizhou | Huizhou | Comprehensive | 100.00% | Establishment | |
| Shenbao Property | Shenzhen | Shenzhen | Property management | 100.00% | Establishment | |
| Shenbao Industrial & Trading | Huizhou | Shenzhen | Wholesale business | 100.00% | Establishment | |
| Hangzhou Ju Fang Yong | Hangzhou | Hangzhou | Comprehensive | 100.00% | Establishment | |
| Shenbao Technology Center | Shenzhen | Shenzhen | Development, consultant and transfer of technology | 100.00% | Establishment | |
| Fuhaitang Ecological | Hangzhou | Hangzhou | Tea planting, production and sales | 100.00% | Acquisition | |
| Chunshi Network | Hangzhou | Hangzhou | Wholesale business | 100.00% | Establishment | |
| Shenshenbao Investment | Shenzhen | Shenzhen | Investment management | 100.00% | Establishment | |
| Shenshenbao Tea Culture | Shenzhen | Shenzhen | Commerce | 100.00% | Establishment | |
| Ju Fang Yong Trading | Hangzhou | Hangzhou | Wholesale business | 60.00% | Establishment | |
| Yunnan Supply Chain | Pu’er | Pu’er | Wholesale business | 100.00% | Establishment | |
| Huizhou Shenbao Food | Shenzhen | Shenzhen | Wholesale business | 100.00% | Establishment | |
| Shenbao Rock Tea | Wuyishan | Wuyishan | Manufacturing | 100.00% | Establishment | |
| Pu’er Tea Trading Center | Pu’er | Pu’er | Service industry | 55.00% | Establishment | |
| Shenbao Tea-Shop | Shenzhen | Shenzhen | Commerce | 100.00% | Establishment | |
| Fuhaitang Catering | Hangzhou | Hangzhou | Catering | 100.00% | Establishment | |
| SZCG | Shenzhen | Shenzhen | Grain & oil trading | 100.00% | Combine under the same control | |
| Shenzhen Flour | Shenzhen | Shenzhen | Flour processing | 100.00% | Combine under the same control | |
| Hualian Grain & | Shenzhen | Shenzhen | Grain & oil | 100.00% | Combine under |
| oil trading | trading | the same control | ||||
| Hainan Haitian | Haikou | Haikou | Feed production | 51.00% | 49.00% | Combine under the same control |
| Shenliang Quality Inspection | Shenzhen | Shenzhen | Inspection | 100.00% | Combine under the same control | |
| Shenliang Doximi | Shenzhen | Shenzhen | E-commerce | 100.00% | Combine under the same control | |
| Shenliang Cold-Chain Logistic | Shenzhen | Shenzhen | Fresh food management on-line | 100.00% | Combine under the same control | |
| Shenliang Big Kitchen | Shenzhen | Shenzhen | Sales and processing of grain ,oil and products | 70.00% | Combine under the same control | |
| Shenliang Real Estate Development | Shenzhen | Shenzhen | Real estate development and property management | 100.00% | Combine under the same control | |
| Shenliang Property | Shenzhen | Shenzhen | Property management | 100.00% | Combine under the same control | |
| Shenliang Storage (Yingkou) ) | Yingkou | Yingkou | Storage | 100.00% | Combine under the same control | |
| Dongguan Shenliang Logistics | Dongguan | Dongguan | Storage, logistics | 51.00% | Combine under the same control | |
| Dongguan Food Industrial Park | Dongguan | Dongguan | Port operation, food production | 51.00% | Combine under the same control | |
| Dongguan Food Trade | Dongguan | Dongguan | Food production | 51.00% | Combine under the same control | |
| Dongguan Jinying | Dongguan | Dongguan | Feed, biofertilizer | 51.00% | Combine under the same control | |
| Shuangyashan Shenliang Zhongxin | Shuangyashan | Shuangyashan | Construction of food base and development of related complementary facility | 51.00% | Combine under the same control | |
| Hongxinglong Nongken Industrial Park | Shuangyashan | Shuangyashan | Construction of food base and development of | 51.00% | Combine under the same control |
relatedcomplementaryfacility
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 consolidate statement:
Basis of termination of agent or consignor:
Other explanation:
(2) Important non-wholly-owned subsidiary
RMB/CNY
| Subsidiary | Share-holding ratio of minority | Gains/losses attributable to minority in the Period | Dividend announced to distribute for minority in the Period | Ending equity of minority |
| Dongguan Shenliang Logistics | 49.00% | 5,443,741.51 | 153,130,186.36 |
| Subsidiary | Ending balance | Opening balance | ||||||||||
| Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | Current assets | Non-current assets | Total assets | Current liabilities | Non-current liabilities | Total liabilities | |
| Dongguan Shenliang Logistics | 248,138,218.07 | 1,151,170,302.88 | 1,399,308,520.95 | 216,154,682.24 | 870,643,254.30 | 1,086,797,936.54 | 634,938,480.46 | 920,908,724.11 | 1,555,847,204.57 | 679,025,611.19 | 610,420,685.53 | 1,289,446,296.72 |
| Subsidiary | Current Period | Last Period | ||||||
| Operating income | Net profit | Total comprehensive income | Cash flow from operation activity | Operating income | Net profit | Total comprehensive income | Cash flow from operation activity | |
| Dongguan Shenliang | 1,222,449,75 | 11,109,676.5 | 11,109,676.5 | 97,553,848.2 | 905,720,767. | 12,516,721.4 | 12,516,721.4 | -19,848,597.9 |
| Logistics | 5.98 | 6 | 6 | 8 | 08 | 1 | 1 | 7 |
| Joint venture or Associated enterprise | Main operation place | Registered place | Business nature | Share-holding ratio | Accounting treatment on investment for joint venture and associated enterprise | |
| Directly | Indirectly | |||||
| Zhuhai Hengxing Feed Industrial Co., Ltd. | Zhuhai | Zhuhai | Aquatic fee and animal fee | 40.00% | Equity | |
| Shenzhen Duoxi Equity Investment Fund Management Co., Ltd. | Shenzhen | Shenzhen | Trusted equity investment fund | 35.00% | Equity | |
| Shenzhen Shenyuan Data Tech. Co., Ltd | Shenzhen | Shenzhen | Design for information system, software development | 40.00% | Equity | |
| Shenliang Intelligent Wulian Equity Investment Fund (Shenzhen) Partnership Enterprise (Limited) | Shenzhen | Shenzhen | Equity investment; investment consultant | 49.02% | Equity | |
| Changzhou Shenbao Chacang E-business Co., ltd. | Changzhou | Changzhou | Manufacturing | 33.00% | Equity | |
| Huizhou Shenbao Manan Bio-technology Co., Ltd. | Huizhou | Huizhou | Manufacturing | 51.00% | Equity | |
| Shenzhen Shichumingmen Restaurant Management Co., Ltd. | Shenzhen | Shenzhen | Catering | 51.00% | Equity | |
| Guangzhou Shenbao Mendao Tea Co., Ltd | Guangzhou | Guangzhou | Retail | 45.00% | Equity |
| Ending balance/Current Period | Opening balance/Last Period | |
| Ending balance/Current Period | Opening balance/Last Period | |
| Book value of the equity investment for associated enterprise | 73,362,651.19 | 70,999,666.81 |
| Net profit | 7,096,756.53 | 1,374,764.19 |
| Total comprehensive income | 7,096,756.53 | 1,374,764.19 |
| Ending balance/Current Period | Opening balance/Last Period | |
| Joint venture: | -- | -- |
| Amount based on share-holding ratio | -- | -- |
| Associated enterprise: | -- | -- |
| Amount based on share-holding ratio | -- | -- |
(5) Major limitation on capital transfer ability to the Company from joint venture or associated enterprise
(6) Excess loss occurred in joint venture or associated enterprise
RMB/CNY
| Joint venture/Associated enterprise | Cumulative un-recognized losses | Un-recognized losses not recognized in the Period (or net profit enjoyed in the Period) | Cumulative un-recognized losses at period-end |
| Changzhou Shenbao Chacang E-business Co., ltd. | 8,367,950.07 | 126,999.270 | 8,494,949.33 |
| Shenzhen Shichumingmen Restaurant Management Co., Ltd. | 3,491,151.31 | 426,122.69 | 3,917,274.00 |
| Name | Main place of operation | Registration place | Business nature | Shareholding ratio/ shares enjoyed | |
| Directly | In-directly | ||||
obligations. The credit risk mainly arises from monetary funds, account receivable and other account receivable soon. The management has established adequate credit policies and continues to monitor exposure of these credit risks.
The monetary funds held by the Company are mainly deposited in state-controlled banks and other large 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 losses causedby the breach of contract of the opposite side.
For trade receivables and other receivables, the Company establishes relevant policies to control exposure of creditrisk. The Company appraises customers’ credit quality based on their financial position, possibility to obtainguarantee from third parties, credit history and other factors such as prevailing market conditions, and setcorresponding credit terms. Customers’ credit history would be regularly monitored by the Company. For thosecustomers who have bad credit history, the Company will call collection in written form, shorten credit term orcancel credit term to ensure its overall credit risk is under control.
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 guarantee for financial carried in Note XI.
(ii) Liquidity riskLiquidity risk represents the possibility that the Company is not able to acquire sufficient fund to satisfy businessrequirement, settle debt when it is due and perform other obligation of payment.
The finance department continues to monitor capital requirement for short and long term, to ensure adequate cashreserve. In addition, it continues to monitor whether borrowing agreement is complied with, and seeks forcommitment from major financial institutions for provision of sufficient back-up fund, so as to satisfy capitalrequirement in a short and long term.
(iii) Market risk
1.Exchange risk
The major operation of the Company is located in the PRC, and its major operation is settled in Renminbi. However,there is also exchange risk in respect of the recognized foreign currency assets and liabilities and future foreigncurrency transactions which are mainly denominated in US dollar. Our finance department is responsible formonitoring 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 any forward exchange contract ormonetary exchange contract.
2.Interest risk
Our interest risk mainly arises from bank borrowings. Financial liabilities at floating rate expose the Company tocash flow interest risk, and financial liabilities at fixed rate expose the Company to fair value interest risk. TheCompany determines the respective proportion of contracts at fixed rate and floating rate based on prevailing marketconditions.
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.
3.Price risk
The Company purchases and sells products at market prices, therefore it is affected by fluctuation of these prices.
XI. Disclosure of fair value
1. Ending fair value of the assets and liabilities measured by fair value
RMB/CNY
| Item | Ending fair value | |||
| First-order | Second-order | Third-order | Total | |
| I. Sustaining measured by fair value | -- | -- | -- | -- |
| (i)Tradable financial assets | 1,153,309.17 | 1,153,309.17 | ||
| 1.Financial assets measured by fair value and with variation reckoned into current gains/losses | 1,153,309.17 | 1,153,309.17 | ||
| (2) Equity instrument investment | 1,153,309.17 | 1,153,309.17 | ||
| II. Non-persistent measure | -- | -- | -- | -- |
2. Recognized basis for the market price sustaining and non-persistent measured by fair value on first-order
3. Valuation technique and qualitative and quantitative information on major parameters for the fair valuemeasure sustaining and non-persistent on second-order
4. Valuation technique and qualitative and quantitative information on major parameters for the fair valuemeasure sustaining and non-persistent on third-order
5. Adjustment information and sensitivity analysis of unobservable parameters for the fair value measuresustaining and non-persistent on third-order
6. Sustaining items measured by fair value, as for the conversion between at all levels, reasons for conversionand policy for conversion time point
7. Changes of valuation technique in the Period
8. Financial assets and liability not measured by fair value
9. Other
XII. Related party and related transactions
1. Parent company
| Parent company | Registration place | Business nature | Registered capital | Ratio of shareholding on the Company | Ratio of voting right on the Company |
| Shenzhen Fude State-owned Capital Operation Co., Ltd. | Shenzhen | Investing in industry, development, operation and management of the own property | 500 million Yuan | 63.79% | 63.79% |
| Joint venture/Associated enterprise | Relationship |
| Other related party | Relationship with the Enterprise |
| Shenzhen Agricultural Products Co., Ltd | Shareholder of the Company, subsidiary of the actual controller, controlled by the same ultimate controlling party |
| Zhanjiang Haitian Aquatic Feed Co., Ltd | Subsidiary of the actual controller, Controlled by the same ultimate controlling party |
| Dongguan Fruit and Vegetable Non-staple Food Market Co., Ltd | Minority shareholder of controlling subsidiary |
| Taizhong Agricultural Co., Ltd | Subsidiary of the actual controller, Controlled by the same ultimate controlling party |
| Shenzhen Investment Management Co., Ltd | Former shareholder of the Company, Controlled by the same ultimate controlling party |
| Fujian Wuyishan Yuxing Tea Co., Ltd*1 | Minority shareholder of former controlling subsidiary |
| Shenzhen Fruits and Vegetables Trading Co., Ltd | Wholly-owned subsidiary of Shenzhen Agricultural Products Co., Ltd |
| Shenzhen Higreen International Agricultural Products Logistic Management Co., Ltd | Controlling subsidiary of Shenzhen Agricultural Products Co., Ltd |
| Zhanjiang Changshan (Shenzhen) Ecological Aquaculture Co., Ltd | Has the same parent company |
| Shenzhen Yixin Investment Co., Ltd | Former shareholder of Shenzhen Agricultural Products Co., Ltd, Controlled by the same ultimate controlling party |
| Related party | Related transaction content | Current Period | Approved transaction limit | Whether more than the transaction limit (Y/N) | Last Period |
| Related party | Related transaction content | Current Period | Last Period |
| Shenzhen Fude State-owned Capital Operation Co., Ltd. | Payment for goods | 2,510.00 | |
| Shenzhen Shenyuan Data Tech. Co., Ltd | Office space leasing | 15,358.00 | 28,293.00 |
| Shenzhen Agricultural Products Co., Ltd | Sales of tea | 219,560.00 | 65,000.00 |
| Shenzhen Higreen International Agricultural Products Logistic Management Co., Ltd | Sales of tea | 7,410.00 | |
| Shichumingmen Company | Sales of tea products | 246.15 | |
| Shenzhen Fruits and Vegetables Trading Co., Ltd | Sales of tea | 3,270.00 |
| Client/Contract-out party | Entrusting party/Contractor | Trustee/assets contract | Trustee /start | Trustee /ends | Managed earnings /pricing of the contract earnings | Managed earnings confirmed in the period / contract earnings |
| Client/Contract-out party | Entrusting party/Contractor | Entrust /assets outsourcing | Entrust /start | Entrust /ends | Trustee fee / pricing of the outsourcing | Entrusted earnings confirmed in the period / outsourcing costs |
| Lessee | Assets type | Lease income in recognized in the Period | Lease income in recognized last the Period |
| Shichumingmen | Management site | 580,466.28 | 503,949.19 |
| Shenzhen Fude State-owned Capital Operation Co., Ltd. | Office space leasing | 84,300.00 |
As lessee:
RMB/CNY
| Lessor | Assets type | Lease income in recognized in the Period | Lease income in recognized last the Period |
| Shenzhen Fude State-owned Capital Operation Co., Ltd. | Warehouse leasing | 14,217,100.00 | 14,217,100.00 |
| Shenzhen Fude State-owned Capital Operation Co., Ltd. | Management site | 345,038.85 |
| Secured party | Guarantee amount | Guarantee start date | Guarantee expiry date | Whether the guarantee has been fulfilled |
| Shenbao Huacheng | 30,000,000.00 | 2018-07-26 | Two years after the expiration of the debt performance period for each specific credit under the main contract | N |
| Guarantor | Guarantee amount | Guarantee start date | Guarantee expiry date | Whether the guarantee has been fulfilled |
| Dongguan Fruit and Vegetable Non-staple Food Market Co., Ltd | 14,700,000.00 | 2017-06-08 | 2019-04-11 | Y |
| Dongguan Fruit and Vegetable Non-staple Food Market Co., Ltd | 53,571,310.66 | 2016-12-27 | 2021-12-26 | N |
| Dongguan Fruit and Vegetable Non-staple Food Market Co., Ltd | 138,955,864.84 | 2018-07-27 | 2032-08-29 | N |
Shenliang Logistics, a subsidiary of the Company, and HSBC, HSBC will provide a loan credit of not exceedingRMB 200 million to Dongguan Logistics, the applicable interest rate for each loan at each interest period is 90% ofthe central bank loan benchmark interest rate applicable on the fixed interest date of the interest period, theborrowing date is from December 27, 2016 to December 26, 2021. As of December 31, 2018, the balance of theloan principal achieved by Dongguan Shenliang Logistics from HSBC was RMB 109,329,205.42, and theCompany’s subsidiaries, SZCG and Dongguan Fruit and Vegetable Non-staple Food Market Co., Ltd provided jointliability guarantee for the loans, the amount guaranteed by Dongguan Fruit and Vegetable Non-staple Food MarketCo., Ltd. was RMB 53,571,310.66, and the amount guaranteed by SZCG was RMB 55,757,894.76.
4. According to the loan contract “Yue DG 2017 NGDZ No. 006” signed by Dongguan Food Industrial Park, asubsidiary of the Company, and Bank of Communications Dongguan Branch, the current loan principal isrespectively RMB 49.80 million, RMB 3,783,400, RMB 30 million and RMB 200 million, the loan period is fromJuly 27, 2018 to August 29, 2032. The loan interest rate of RMB 200 million is calculated by the benchmark interestrate for loan of the People’s Bank of China on the loan entry date, which is 4.90%; the other three are calculated bythe benchmark interest rate of the People’s Bank of China on the loan entry date after rising by 15%, which is
5.635%. The Company’s subsidiaries, SZCG and Dongguan Fruit and Vegetable Non-staple Food Market Co., Ltd,provide joint liability guarantee for the loans, the amount guaranteed by Dongguan Fruit and Vegetable Non-stapleFood Market Co., Ltd is RMB 138,955,864.84, and the amount guaranteed by SZCG is RMB 144,627,532.80.
(5) Related party’s borrowed funds
RMB/CNY
| Related party | Borrowing amount | Starting date | Maturity date | Note |
| Borrowing | ||||
| Lending | ||||
| Related party | Related transaction content | Current Period | Last Period |
| Item | Current Period | Last Period |
(8) Other related transaction
6. Receivable and payable of related party
(1) Receivable item
RMB/CNY
| Item Name | Related party | Ending balance | Opening balance | ||
| Book balance | Bad debt provision | Book balance | Bad debt provision | ||
| Account receivable | Shenzhen Fude State-owned Capital Operation Co., Ltd. | 42,150.00 | 421.50 | ||
| Account receivable | Shenzhen Agricultural Products Co., Ltd | 55,000.00 | 89.60 | 8,960.00 | 89.60 |
| Account receivable | Shenzhen Higreen International Agricultural Products Logistic Management Co., Ltd | 7,410.00 | 74.10 | ||
| Other account receivable | Changzhou Shenbao Chacang Company | 20,618,710.83 | 18,024,144.51 | 20,413,947.34 | 17,819,381.02 |
| Other account receivable | Shenzhen Higreen International Agricultural Products Logistic Management Co., Ltd | 50,000.00 | 500.00 | 50,000.00 | 500.00 |
| Other account receivable | Shichumingmen | 1,365,179.36 | 275,978.87 | 1,429,898.28 | 275,978.87 |
| Item Name | Related party | Ending book balance | Opening book balance |
| Other account payable | Zhanjiang Changshan (Shenzhen) Ecological Aquaculture Co., Ltd | 7,972,700.83 | 7,967,662.50 |
| Other account payable | Shenzhen Duoxi Equity Investment Fund Management | 39,906.00 | 41,486.00 |
| Co., Ltd. | |||
| Other account payable | Shenzhen Fruits and Vegetables Trading Co., Ltd | 245,714.59 | 245,714.59 |
| Other account payable | Shenzhen Investment Management Co., Ltd | 3,510,297.20 | 3,510,297.20 |
| Other account payable | Shenzhen Fude State-owned Capital Operation Co., Ltd. | 67,762,184.76 | 53,470,612.86 |
| Dividend payable | Shenzhen Investment Management Co., Ltd | 2,690,970.14 | 2,690,970.14 |
2. Contingency
(1)Contingency on balance sheet date
1. Contingencies arising from pending litigation or arbitration and its financial impact
(1) Disputes over the loan contracts between Changzhou Shenbao Chacang E-commence Co., Ltd., the Companyand Shenzhen Agricultural Products Financing Guarantee Co., Ltd.
On July 15, 2016, Shenzhen Agricultural Products Financing Guarantee Co., Ltd. (hereinafter referred to asAgricultural Products Guarantee Company) submitted a “Civil Appeal” to the People’s Court of Futian District,Shenzhen, requesting Changzhou Shenbao Chacang Company to repay the loan principal amount of RMB5,000,000.00, the interest of RMB 389,968.52, and the interest penalty of RMB 3,200,271.79 (the interest penaltywas temporarily calculated to June 30, 2016, which shall be actually calculated to the date of the full repayment ofthe borrowing); and pay the compensation of RMB 100,000.00 (5 million Yuan × 2%); two items in total wereRMB 8,690,240.31; the Company undertook joint liability for the loan of RMB 5,000,000.00.
On May 31, 2017, Shenzhen Futian District Court made the first-instance judgment and ruled Changzhou ShenbaoChacang Company to repay the loan principal of RMB 5 million and the interest and interest penalty, the Companydid not need to undertake joint liability for the loan of RMB 5 million of Changzhou Shenbao Chacang Company.On July 4, 2017, the Agricultural Products Guarantee Company filed an appeal, on October 13, 2017, and ShenzhenIntermediate People’s Court held the second instance hearing.
On April 26, 2019, the Shenzhen Intermediate People's Court made a civil judgment (Civil Judgment (2017) Yue03 Min Zhong No. 12296), and judged Shenzhen Shenbao Industrial Co., Ltd. (now renamed as Shenzhen CerealsHoldings Co., Ltd.) to undertake a joint and several liability for the of Changzhou Shenbao Chacang E-CommerceCo., Ltd. within the scope of 3.5 million yuan. Shenzhen Shenbao Industrial Co., Ltd. (now renamed as ShenzhenCereals Holdings Co., Ltd.) has the right to claim compensation from Changzhou Company after the payment. Thejudgment has taken effect,currently it’s in a reconciliation
(2) Contract disputes between the Company’s subsidiaries, Mount Wuyi Shenbao Rock Tea Co., Ltd. (hereinafterreferred to as Wuyishan Rock Tea Company) and Hangzhou Jufangyong Holdings Co., Ltd. (hereinafter referred toas Jufangyong Company), and Wuyishan Jiuxing Tea Co., Ltd. (hereinafter referred to as Jiuxing Company), FujianWuyishan Yuxing Tea Co., Ltd. (hereinafter referred to as Yuxing Company), Xingjiu Tea Co., Ltd., Chen Yuxing,Chen Guopeng
On September 22, 2017, Jufangyong Company, Xingjiu Tea Co., Ltd., Yuxing Company, Chen Yuxing and ChenGuopeng signed an “Formal Agreement on the Separation of Fujian Wuyishan Shenbao Yuxing Tea Co., Ltd.”,
according to the separation agreement: the original Shenbao Yuxing Company was separated, after the separation,Jufangyong Company held 100% equity of the newly established company (i.e. Shenbao Rock Tea Company), andYuxing Company and Xingjiu Tea Company jointly held 100% equity of the surviving company (Jiuxing Company);Shenbao Rock Tea Company got receivables of RMB 7,273,774.01, which was guaranteed by Jiuxing Company toachieve RMB 2 million within one year after separation and the remaining amount would be returned within 2 years.Chen Yuxing and Chen Guopeng, as the actual controllers of Jiuxing Company, Yuxing Company and Xingjiu TeaCompany, assumed joint responsibility for the joint guarantee to Shenbao Rock Tea Company and JufangyongCompany for all the obligations and responsibilities stipulated in the “Separation Agreement”.
As of September 22, 2018, the time limit stipulated in the “Separation Agreement” for the realization of fourreceivables had expired, and Shenbao Rock Tea Company still had RMB 5,212,301.40 unrecovered. On December6, 2018, Shenbao Rock Tea Company and Hangzhou Jufangyong Company applied for arbitration to ShenzhenCourt of International Arbitration (Shenzhen Arbitration Commission) for the above matters, and requested JiuxingCompany to pay RMB 5,272,934.01 to Shenbao Rock Tea Company, and requested Yuxing Company, Xingjiu TeaCompany, Chen Yuxing and Chen Guopeng to assume joint liability.
On April 18, 2019, Shenzhen International Arbitration Court heard the arbitration case in court. Since relevantmatters are still to be determined and ascertained, the two parties concerned shall provide supplementary defensematerials to the court. Currently, the case has not ye been arbitrated by Shenzhen International Arbitration Court.
As of 30
thJune 2019, the accumulated bad debt provision accrual by the Company was RMB 3,458,370.94.
(3) Disputes on mung bean business between Shenzhen Cereals Group (SZCG) and Jilin Tongyu County ShengdaCompany
In August 2007, Shenzhen Cereals Group and Tongyu County Shengda Grain and Oil Trading Co., Ltd. (hereinafterreferred to as Shengda Company) signed the “Mung Bean Entrusted Acquisition, Processing and Storage Contract”,from October 2007 to May 2008, totally 4,918.00 tons of mung beans were acquired, the Company paid paymentfor goods of RMB 30 million. According to the contract, after the completion of the entrusted acquisition, ShengdaCompany has the obligations to assist in the sale of goods and buy-back. Shengda Company did not fully fulfill itsobligations, and Shenzhen Cereals Group also carried out various forms of collection. In September 2010, ShenzhenCereals Group sued Shengda Company for repayment of its arrears and interest. The two parties reached anaccommodation during the court trial, and Futian District People’s Court of Shenzhen issued a “Paper of CivilMediation”, but Shengda Company did not fully fulfill the repayment obligation, Shenzhen Cereals Group hasapplied to the court for enforcement. As of 30
thJune 2019, the book receivables amounted to RMB 5,602,468.81,and the execution of remaining funds has large uncertainties. The Company has fully made provision for bad debtsof RMB 5,602,468.81.
(4) Contract disputes between Flour Company and Shenzhen Fujin Food Industry Co., Ltd.On May 31, 2013, Shenzhen Fujin Food Industry Co., Ltd. (hereinafter referred to as Fujin Company) signed a“Purchases and Sales Contract” with Flour Company, agreed that Flour Company would supply the moon caketailored flour and the tailored wheatmeal for cakes and pastries to Fujin Company. Later, Fujin Company sued FlourCompany, it said that the lipase (a processing aid) in the flour supplied by Flour Company to Fujin Company wasactive, causing the “acid value” of the moon cakes and fillings made from it exceed the food safety standards, whichcaused huge losses to Fujin Company, so it advocated that Flour Company should bear the corresponding liabilityfor compensation, and compensate for the property loss of Fujin Company of RMB 9,784,485.55; the litigationcosts should be borne by Flour Company.
On November 29, 2014, the Nanshan District People’s Court of Shenzhen made the first-instance judgment ([2014]SNFMYCZ No.45), and considered that Fujin Company failed to prove that its so-called problem product with toohigh “acid value” was caused by the lipase activity of the flour supplied by Flour Company, it has not been proventhat the raw materials of the problem food were supplied by Flour Company; secondly, the relevant standards of theMinistry of Health allow the addition of active lipase to the flour raw material, therefore, the court ruled that allclaims of Shenzhen Fujin Food Industry Co., Ltd. were rejected.On June 5, 2015, the Shenzhen Intermediate People’s Court made a ruling ([2015] SZFMZZ No. 563), consideringthat the court of first instance could not find out what standards should be applied to the quality of the flour productsinvolved in the case, nor could it found that the obligation to remove processing aids in flour should be attributedto the flour supplier or the food producer. Therefore, the civil judgment [2014] SNFMYCZ No.45 was revoked andsent back to the Nanshan District People’s Court for retrial.
On December 21, 2017, People's Court of Nanshan District of Shenzhen made the first-instance judgment of retrialwhich rejected all claims of Shenzhen Fujin Food Industry Co., Ltd.
On June 10, 2019, the Shenzhen Intermediate People's Court made the second-instance judgment (Civil Judgment(2018) Yue 03 Min Zhong No. 7911), and the judgment rejected the appeal of Shenzhen Fujin Food Industry Co.,Ltd. and upheld the original judgment.
(5) Contract disputes among Shenzhen Cereals Group, Hualian Grain and Oil, Guangzhou Jinhe Feed Co., Ltd. andHuang Xianning Import Agent
From October 2005 to January 2007, Shenzhen Cereals Group, Hualian Grain and Oil, and Guangzhou Jinhe FeedCo., Ltd. (hereinafter referred to as Guangzhou Jinhe Company) signed 20 “Import Agent Contracts”, agreed thatShenzhen Cereals Group and Hualian Grain and Oil agent Guangzhou Jinhe Company to import Peruvian fishmeal.
In August 2007, Hualian Grain and Oil, Guangzhou Jinhe Company and Huangxianning signed the “GuaranteeContract”, agreed that Huangxianning would guarantee that all payables of Guangzhou Jinhe Company under thetrade contracts signed by Hualian Grain and Oil and Guangzhou Jinhe Company would be paid on time. Later, dueto Guangzhou Jinhe Company’s insufficient payment of goods and import agency fees, Shenzhen Cereals Groupand Hualian Grain and Oil filed a lawsuit to Futian District People’s Court of Shenzhen.
On February 16, 2015, the Futian District People’s Court of Shenzhen made the first-instance judgment ([2014]SFFMECZ No. 786), and sentenced Guangzhou Jinhe Company to pay RMB 10,237,385.74 to Shenzhen CerealsGroup and Hualian Grain and Oil, and bear the case acceptance fee of RMB 83,224.00; Huang Xianning does notneed to bear the joint and several liability.
As Guangzhou Jinhe Company refused to accept the above first-instance judgment, it lodged an appeal to theShenzhen Intermediate People’s Court, claiming that the prosecution of Shenzhen Cereals Group and Hualian Grainand Oil had exceeded the time limit for litigation. On March 30, 2017, the Shenzhen Intermediate People’s Courtmade the second-instance judgment (Civil Judgment [2015] SZFSZZ No.1767), and the judgment rejectedGuangzhou Jinhe Company’s appeal and upheld the original judgment.
The case is still in enforcement, and the other party has not paid any money, Shenzhen Cereals Group has madeprovision for bad debts in proportion to 100% of the accounts receivable of RMB 10,455,600 of Guangzhou JinheCompany.
According to the “Commitment Letter of Shenzhen Fude State-owned Capital Operation Co., Ltd. on the PendingLitigation of Shenzhen Cereals Group Co., Ltd.”, If Shenzhen Cereals Group Co., Ltd. and its holding subsidiariessuffer any claims, compensation, losses or expenses due to the contract disputes with Guangzhou Jinhe Feed Co.,Ltd. and Huangxianning Import Agent, Shenzhen Fude State-owned Capital Operation Co., Ltd. will assume thecompensation or loss caused by the lawsuits.
(6) Contract disputes between Hualian Grain and Oil Company and Zhuhai Doumen Huabi Feed Factory
On December 9, 2004, Hualian Grain and Oil Company signed a purchases and sales contract with Zhuhai DoumenHuabi Feed Factory to sell 2,000.00 tons of corn, with payment for goods of RMB 2,396,300, but the payment hasnot been taken back. In April 2005, Hualian Grain and Oil Company discovered that Zhuhai Doumen Huabi FeedFactory had basically stopped production and the goods were transferred, the legal representative, Liang Dongxing,had fled. On July 2, 2005, the public security organ arrested Liang Dongxing. Hualian Company has prosecutedhim and won in the lawsuit, and the lawsuit has been settled and in enforcement.
As of 30
th
June 2019, Hualian Grain and Oil Company had received RMB 2,396,300 from Zhuhai Doumen HuabiFeed Factory, Hualian Grain and Oil Company had made 100% of bad debt provision for this amount.
(7) Contract disputes between Hualian Grain and Oil Company and Foshan Huaxing Feed Factory
In August and October 2007, Hualian Grain and Oil Company sold goods to Foshan City Shunde District HuaxingFeed Factory, and received a total of RMB 2,958,600 of commercial acceptance bills. Due to the company’s overduepayment, Hualian Grain and Oil Company filed a lawsuit with the People’s Court of Shunde District, Foshan Cityon October 29, 2007, requesting Foshan City Shunde District Huaxing Feed Factory to repay the payment for goodsand pay the corresponding interests. From June to July 2011, totally took back the company’s bankruptcy propertysettlement of RMB 1,638,900. As of 30
thJune 2019, Hualian Grain and Oil Company had receivables of RMB1,319,700 from Foshan City Shunde District Huaxing Feed Factory, and it had made 100% of bad debt provisionfor this amount.
(8) Contract disputes on the international sales transactions of soybeans between Shenzhen Cereals Group and NobleResources Pte. LtdOn March 3, 2004, Shenzhen Cereals Group and Noble Resources Pte. Ltd. (hereinafter referred to as NobleCompany) signed a contract stipulating that Shenzhen Cereals Group Co., Ltd. would purchase 55,000 tons ofArgentine or Brazilian soybeans from Noble Company under CFR conditions.
On May 10, 2004, the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) issueda notice that a shipload of Brazilian soybeans exported to Xiamen, China by Noble Company in April 2004 wasfound to be mixed with seed-coating soybeans, thus Noble Company was suspended to export Brazilian soybeansto China.
On June 25, 2004, after the cargo ship arrived in Qingdao Port, the cargo was inspected by Qingdao CommodityInspection and Quarantine Bureau who found the cargo contained seed-coating soybeans, and the cargo was sealedup according to law.
On July 22, 2004, the two parties signed a supplementary agreement on the above-mentioned soybean sales contract,stipulating that the demurrage incurred as the cargo could not be unloaded due to seed-coating soybeans shall beborne by Noble Company, and agreed that the disputes under the contract shall be governed by Chinese courtsaccording to Chinese law.
In July 2004, Noble Company submitted the case to the Hong Kong International Arbitration Center for arbitration,requesting Shenzhen Cereals Group Co., Ltd. to undertake cargo ship detainment, Hong Kong demurrage, losscontingencies, and so on, totaling seven claims. Shenzhen Cereals Group Co., Ltd. filed a jurisdictional objection,the Hong Kong International Arbitration Center ruled on December 14, 2006 that two claims have the right ofjurisdiction, i.e. demurrage of Noble ship in Hong Kong and loss contingencies, other claims were rejected.
The Hong Kong International Arbitration Center ruled on 17 Feb. 2011 that: the demurrage of $ 2,173,000.00 shouldbe paid by Shenzhen Cereals Group, and the interest counted by annual interest rate of 5.00% since 4
th
June 2004.In July 2011, Noble Company applied to Shenzhen Intermediate People’s Court for enforcement of the ruling. On30 March 2015, a civil order ([2017] Shen Zhong Fa Min Chu Zi No. 270) was made by Shenzhen IntermediatePeople’s Court, ruling that the demurrage charges arising from the failure of normal unloading of the goods involvedshall be borne by Nobel Company as stipulated in the Supplementary Agreement of the Soybean Sales Contractsigned by both parties, the disputes under the contractual agreements shall be settled by Chinese Laws and shall beunder the jurisdiction of Chinese courts. The Hong Kong International Arbitration Center has no jurisdiction overthis case, than the application for execution of Nobel Company was rejected.
On February 6, 2018, Noble Company applied to the Hong Kong High Court for enforcement of the Hong KongInternational Arbitration Center's ruling on February 17, 2011. On February 18, 2019, the Hong Kong High Courtruled that the enforcement time limit for the application of Noble Company has been lost. On September 3, 2014,Noble Company submitted the “Application for Further Claims Arbitration” to the Hong Kong InternationalArbitration Center, requesting Shenzhen Cereals Group Co., Ltd. to pay Noble Company US$7.45 million incompensation for the freighter’s lessor - Bunge Limited, and the corresponding litigation and arbitration fee.However, Noble Company had never applied for litigation matters such as court hearings. On November 1, 2016,the arbitrator of Hong Kong International Arbitration Center wrote to Noble Company, requesting it to initiate thearbitration at the end of 2016, otherwise, the arbitral tribunal will take measures to close the case, but so far, NobleCompany has not initiated the arbitration.The application for arbitration of the second part of the ruling of Hong Kong International Arbitration Center madeby Noble Company in the mainland has been rejected, the application for enforcement in Hong Kong was ruled thatthe time limit of application for arbitration has been exceeded. Related procedures of the third part of the arbitrationhas not been initiated in accordance with the requirements of the arbitral tribunal, therefore, it can be presumed thatthe case has been closed.
According to the “Commitment Letter of Shenzhen Fude State-owned Capital Operation Co., Ltd. on the PendingLitigation of Shenzhen Cereals Group Co., Ltd.”, If Shenzhen Cereals Group Co., Ltd. and its holding subsidiariessuffer any claims, compensation, losses or expenses due to the contract dispute of international sale of soybean withNoble Resources Co., Ltd., Shenzhen Fude State-owned Capital Operation Co., Ltd. will assume the compensationor loss caused by the lawsuit.
(9) Contract disputes between Shenzhen Cereals Group and Beijing Zhongwang Food Co., Ltd.
On August 22, 2007, Beijing Zhongwang Food Co., Ltd. defaulted on the payment for goods of RMB 1,911,200.00to Shenzhen Cereals Group. Beijing Zhongwang Food Co., Ltd. was in bankruptcy proceedings, Shenzhen CerealsGroup has reported claims and interests of RMB 2,473,400 to the bankruptcy administrator, and the confirmedordinary creditor’s rights are RMB 2,128,300. It is estimated that the bankruptcy property repayment amount isabout RMB 50,000 at most.
On April 22, 2018, Shenzhen Cereals Group received a bankruptcy liquidation of RMB 37,313.42, and up to 30
th
June 2019, the bad debt provision for residual claims are accrual by Shenzhen Cereals Group in total as RMB1,873,886.58.
2. Contingency arising from the provision of external debt guarantee and their impacts on financial
The guarantee for related parties found more in the Note XII. Related party and related transactionEnded as 30
thJune 2019, the Company has no guarantees provided for non-related parties
3. Except for the above mentioned contingency, up to 30
th
June 2019, the Company has no other majorcontingency that should be disclosed
(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
XV. Events after balance sheet date
1. Important non adjustment matters
RMB/CNY
| Item | Content | Impact on financial status and operation results | Reasons of fails to estimate the impact |
3. Sales return
4. Other events after balance sheet date
Up to the date of the financial report released, the Company has no other events after balance sheet date need to releasedXVI. Other important events
1. Previous accounting errors collection
(1)Retrospective restatement
RMB/CNY
| Content | Treatment procedure | Items impact during vary comparative period | Accumulated impact |
| Content | Approval procedure | Reasons |
| Item | Revenue | Expenses | Total profit | Income tax expenses | Net profit | Profit of discontinuing operation |
attributable toowners of parentcompany
Other explanation
6. Segment
(1) Recognition basis and accounting policy for reportable segment
(2) Financial information for reportable segment
RMB/CNY
| Item | Offset between segment | Total |
| Category | Ending balance | Opening balance | ||||||||
| Book balance | Bad debt provision | Book value | Book balance | Bad debt provision | Book value | |||||
| Amount | Ratio | Amount | Accrual ratio | Amount | Ratio | Amount | Accrual ratio | |||
| Account receivable with bad debt provision accrual on a single basis | 28,453.08 | 0.60% | 28,453.08 | 100.00% | 0.00 | 28,453.08 | 0.07% | 28,453.08 | 100.00% | 0.00 |
| Including: | ||||||||||
| Account receivable with single minor amount but with bad | 28,453.08 | 0.60% | 28,453.08 | 100.00% | 0.00 | 28,453.08 | 0.07% | 28,453.08 | 100.00% | 0.00 |
| debts provision accrued on a single basis | ||||||||||
| Account receivable with bad debt provision accrual on portfolio | 4,720,500.44 | 100.00% | 19,717.61 | 0.42% | 4,700,782.83 | 42,869,954.13 | 99.93% | 428,835.06 | 1.00% | 42,441,119.07 |
| Including: | ||||||||||
| Age portfolio | 4,582,528.24 | 97.08% | 19,717.61 | 0.42% | 4,562,810.63 | 42,869,954.13 | 99.93% | 428,835.06 | 1.00% | 42,441,119.07 |
| Related party and petty cash | 137,972.20 | 2.92% | 137,972.20 | |||||||
| Total | 4,748,953.52 | 100.00% | 48,170.69 | 1.01% | 4,700,782.83 | 42,898,407.21 | 100.00% | 457,288.14 | 1.07% | 42,441,119.07 |
| Name | Ending balance | |||
| Book balance | Bad debt provision | Accrual ratio | Accrual causes | |
| Name | Ending balance | ||
| Book balance | Bad debt provision | Accrual ratio | |
| Aging analysis | 4,582,528.24 | 19,717.61 | 0.43% |
| Related party and petty cash | 137,972.20 | 0.00 | 0.00% |
| Account receivable with single minor amount but with bad debts provision accrued on a single basis | 28,453.08 | 28,453.08 | 100% |
| Total | 4,748,953.52 | 48,170.69 | -- |
| Name | Ending balance | ||
| Book balance | Bad debt provision | Accrual ratio | |
Explanation on portfolio determines:
If the provision for bad debts of account receivable is made in accordance with the general model of expected credit losses, pleaserefer to the disclosure of other account receivable to disclose related information about bad-debt provisions:
□ Applicable √Not applicable
By account age
RMB/CNY
| Account age | Ending balance |
| Within one year(one year included) | 4,712,012.82 |
| Within one year(one year included) | 4,712,012.82 |
| 1-2 years | 1,383.22 |
| 2-3 years | 3,117.40 |
| Over 3 years | 32440.08 |
| 3-4 years | 3,987.00 |
| Over 5 years | 28,453.08 |
| Total | 4,748,953.52 |
| Category | Opening balance | Amount changed in the period | Ending balance | ||
| Accrual | Collected or reversal | Written-off | |||
| Age portfolio | 428,835.06 | 409,117.45 | 19,717.61 | ||
| Other account receivable with single minor amount but with bad debt provision accrual on single basis | 28,453.08 | 28,453.08 | |||
| Total | 457,288.14 | 409,117.45 | 48,170.69 | ||
| Enterprise | Amount collected or reversal | Collection way |
(3) Account receivable actually written-off in the period
RMB/CNY
| Item | Amount written-off |
| Enterprise | Nature | Amount written-off | Written-off causes | Procedure of written-off | Resulted by related transaction (Y/N) |
| Item | Ending balance | Opening balance |
| Other account receivable | 242,873,517.60 | 159,677,969.59 |
| Total | 242,873,517.60 | 159,677,969.59 |
| Item | Ending balance | Opening balance |
| Borrower | Ending balance | Overdue time | Overdue causes | Whether impairment occurs and its judgment basis |
(2) Dividend receivable
1) Category
RMB/CNY
| Item (or invested enterprise) | Ending balance | Opening balance |
| Item (or invested enterprise) | Ending balance | Account age | Reasons for not collection | Whether impairment occurs and its judgment basis |
| Nature | Ending book balance | Opening book balance |
| Margin and deposit | 1,235,229.39 | 119,089.00 |
| Export tax rebate | 171,917.78 | 312,364.06 |
| Intercourse funds and other | 264,704,763.86 | 182,280,569.20 |
| Total | 266,111,911.03 | 182,712,022.26 |
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit losses over next 12 months | Expected credit losses for the entire duration (without credit impairment occurred) | Expected credit losses for the entire duration (with credit impairment occurred) | ||
| Balance on Jan. 1, 2019 | 1,922.73 | 75,499.40 | 22,956,630.54 | 23,034,052.67 |
| Balance of Jan. 1, 2019 in the period | —— | —— | —— | —— |
| Current accrual | 204,763.49 | 204,763.49 | ||
| Current reversal | 422.73 | 422.73 | ||
| Balance on Jun. 30, 2019 | 1,500.00 | 75,499.40 | 23,161,394.03 | 23,238,393.43 |
RMB/CNY
| Account age | Ending balance |
| Within one year(one year included) | 209,256,830.79 |
| Within one year(one year included) | 209,256,830.79 |
| 1-2 years | 7,483,918.42 |
| 2-3 years | 18,812,851.47 |
| Over 3 years | 30,558,310.35 |
| 3-4 years | 6,875,000.00 |
| 4-5 years | 6,218,962.15 |
| Over 5 years | 17,464,348.20 |
| Total | 266,111,911.03 |
| Category | Opening balance | Amount changed in the period | Ending balance | |
| Accrual | Collected or reversal | |||
| Age portfolio | 77,422.13 | 422.73 | 76,999.40 | |
| Other account receivable with single minor amount but with bad debt provision accrual on single basis | 5,641,249.52 | 5,641,249.52 | ||
| Other account receivable with single major amount and with bad debt provision accrual on single basis | 17,315,381.02 | 204,763.49 | 17,520,144.51 | |
| Total | 23,034,052.67 | 204,763.49 | 422.73 | 23,238,393.43 |
| Enterprise | Amount reversal or collected | Collection way |
| Item | Amount written-off |
| Enterprise | Nature | Amount written-off | Written-off causes | Procedure of written- | Resulted by related |
| off | transaction (Y/N) |
| Enterprise | Nature | Ending balance | Account age | Ratio in total ending balance of other account receivables | Ending balance of bad debt reserve |
| Huizhou Shenbao Technology Co., Ltd | Intercourse funds | 112,351,493.44 | Within one year | 42.22% | |
| Shenzhen Cereals Group Co., Ltd | Intercourse funds | 83,019,048.50 | Within one year | 31.20% | |
| Shenzhen Shenbao Sanjing Food & Beverage Development Co., Ltd | Intercourse funds | 26,205,575.88 | Over 5 years | 9.85% | |
| Changzhou Shenbao Chacang Company | Intercourse funds | 19,988,710.83 | 1-3 years | 7.51% | 17,520,144.50 |
| Shenzhen Shenbao Technology Center Co., Ltd | Intercourse funds | 12,628,225.82 | Over 5 years | 4.75% | |
| Total | -- | 254,193,054.47 | -- | 95.52% | 17,520,144.50 |
| Enterprise | Government grants | Ending balance | Ending account age | Time, amount and basis for collection predicted |
| Item | Ending balance | Opening balance | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Investment for subsidiary | 4,208,728,337.66 | 4,208,728,337.66 | 4,208,728,337.66 | 4,208,728,337.66 | ||
| Investment for | 6,618,320.35 | 2,927,628.53 | 3,690,691.82 | 6,753,354.23 | 2,927,628.53 | 3,825,725.70 |
| associates and joint venture | ||||||
| Total | 4,215,346,658.01 | 2,927,628.53 | 4,212,419,029.48 | 4,215,481,691.89 | 2,927,628.53 | 4,212,554,063.36 |
| The invested entity | Opening balance | Current increased | Current decreased | Ending balance | Current accrual Impairment provision | Ending balance of impairment provision |
| Shenbao Property | 2,550,000.00 | 2,550,000.00 | ||||
| Shenbao Industrial & Trading | 5,500,000.00 | 5,500,000.00 | ||||
| Shenbao Sanjing | 80,520,842.36 | 80,520,842.36 | ||||
| Shenbao Huacheng | 168,551,781.80 | 168,551,781.80 | ||||
| Huizhou Shenbao Technology | 60,000,000.00 | 60,000,000.00 | ||||
| Wuyuan Ju Fang Yong | 280,404,134.35 | 280,404,134.35 | ||||
| Hangzhou Ju Fang Yong | 176,906,952.42 | 176,906,952.42 | ||||
| Shenbao Technology Center | 54,676,764.11 | 54,676,764.11 | ||||
| Shenshenbao Investment | 50,000,000.00 | 50,000,000.00 | ||||
| Yunnan Supply Chain | 20,000,000.00 | 20,000,000.00 | ||||
| Pu’er Tea Trading Center | 18,202,825.80 | 18,202,825.80 | ||||
| SZCG | 3,291,415,036.82 | 3,291,415,036.82 | ||||
| Total | 4,208,728,337.66 | 4,208,728,337.66 |
| investment company | Opening balance | Current changes (+,-) | Ending balance | Ending balance of | |||||||
| Additional | Capital reduction | Investment gains | Other comprehe | Other equity | Cash dividend | Accrual of | Other | ||||
| investment | recognized under equity | nsive income adjustment | change | or profit announced to issued | impairment provision | impairment provision | |||||
| I. Joint venture | |||||||||||
| II. Associated enterprise | |||||||||||
| Shenzhen Shenbao (Liaoyuan) Industrial Company | 0.00 | 0.00 | 57,628.53 | ||||||||
| Shenzhen Shenbao (Xinmin) Foods Co., Ltd | 0.00 | 0.00 | 2,870,000.00 | ||||||||
| Changzhou Shenbao Chacang | |||||||||||
| Guangzhou Shenbao Mendao Tea Co., Ltd. | 3,825,725.70 | -135,033.88 | 3,690,691.82 | 0.00 | |||||||
| Subtotal | 3,825,725.70 | -135,033.88 | 3,690,691.82 | 2,927,628.53 | |||||||
| Total | 3,825,725.70 | -135,033.88 | 3,690,691.82 | 2,927,628.53 | |||||||
| Item | Current Period | Last Period | ||
| Income | Cost | Income | Cost | |
| Main business | 31,562,730.23 | 29,829,293.00 | 67,228,720.81 | 63,731,294.22 |
| Total | 31,562,730.23 | 29,829,293.00 | 67,228,720.81 | 63,731,294.22 |
| Item | Current Period | Last Period |
| Long-term equity investment income measured by equity | -135,033.88 | -185,480.37 |
| Income from financial products | 1,567,648.80 | |
| Total | 1,432,614.92 | -185,480.37 |
| Item | Amount | Note |
| Gains/losses from the disposal of non-current asset | -4,184.59 | |
| Governmental grants calculated into current gains and losses(while closely related with the normal business of the Company, excluding the fixed-amount or fixed-proportion governmental subsidy according to the unified national standard) | 5,463,876.60 | |
| Profit and loss of assets delegation on others’ investment or management | 3,627,466.27 | |
| Except for the effective hedging business related to the normal business of the Company, the fair value changes from holding the tradable financial assets, derivative financial assets, tradable financial liability and derivative financial liability; and investment income from | 28,381.21 |
| disposal of tradable financial assets, derivative financial assets, tradable financial liability and other creditors investment | ||
| Switch back of the impairment provision for account receivable with impairment test on single basis and contract assets | 412,500.00 | |
| Other non-operating income and expense other than the above mentioned ones | -3,619,767.49 | |
| Less: Impact on income tax | 702,095.88 | |
| Impact on minority interests | 232,425.56 | |
| Total | 4,973,750.56 | -- |
| Profits during report period | Weighted average ROE | Earnings per share | |
| Basic EPS (Yuan/share) | Diluted EPS (Yuan/share) | ||
| Net profits belong to common stock stockholders of the Company | 4.82% | 0.1763 | 0.1763 |
| Net profits belong to common stock stockholders of the Company after deducting nonrecurring gains and losses | 4.70% | 0.1720 | 0.1720 |
| Net profit | Net assets | |||
| Current Period | Last Period | Ending balance | Opening balance | |
| Chinese GAAP | 203,168,850.61 | 202,779,343.34 | 4,260,480,115.67 | 4,172,502,535.11 |
| Items and amount adjusted by IAS: | ||||
| Adjustment for other payable fund of stock market regulation | 1,067,000.00 | 1,067,000.00 | ||
| IAS | 203,168,850.61 | 202,779,343.34 | 4,261,547,115.67 | 4,173,569,535.11 |
Section XI. 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, and Hong Kong Commercial Daily in the report period;
3. Original copies of 2019 Semi-Annual Report with signature of the Chairman.
SHENZHEN CEREALS HOLDINGS CO.,LTDChairman: Zhu Junming
rd
August 2019