SHENZHEN SHENBAO INDUSTRIAL CO., LTD.
SEMI-ANN UAL REPORT 2018
August 2018
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and seniorexecutives of Shenzhen Shenbao Industrial Co., Ltd.(hereinafter referred to asthe Company) hereby confirm that there are no any fictitious statements,misleading statements, or important omissions carried in this report, and shalltake all responsibilities, individual and/or joint, for the reality, accuracy andcom plet i on of the wh ole cont ents.Chairman of the Company Zheng Yuxi, General Manager Yan Zesong, ChiefFinancial Officer Wang Zhiping and Financial Management DepartmentManager Xu Qiming hereby confirm that the Financial Report of Semi-AnnualRepor t 20 18 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 Kon g Commercial Daily andJuchao Website (www.cninfo.com.cn) are the media appointed by the Companyfor information disclosure, all information of the Company disclosed in theabove mentioned media should prevail. Investors are advised to exercise cautionof investment risks.The Company has a nalyzed the risk factors that the Company may exist and itscountermeasures in the report, investors are advised to pay attention to read“Risks and Countermeasures” in the report of Section IV-Discussion andAnalysis of the Operation.The Company plans n ot to distributed cash dividend, bonus and no capitalizingof common reserves either.This report has been prepared in Chinese and English version respectively. Inthe event of difference in interpretation between the two versions, Chinesereport shall prevail.
Contents
Section I. Important Notice, Contents and Paraphrase ....................................................................................... 2
Section II Com pany Profile and Main Financial Indexes ...... 6
Section III Summary of Company Business ...... 10
Section IV Discussion and Analysis of the Operation ...... 12
Section V. Important Events ................................................................................................................................. 20
Section VI. Changes in Shares and Particulars about Shareholders ................................................................ 32
Section VII. Preferr ed S toc k ................................................................................................................................. 38
Section VIII. Particulars about Directors, Supervisor and Senior Executives ................................................. 39
Section IX Corporate Bonds ...... 40
Section X. Financial Repor t .................................................................................................................................. 41
Section XI. Documents available for Reference ................................................................................................ 160
Paraphrase
Items Refers to ContentsShenshenbao/Shenbao Company/ ListedCompany /the Company/
Refers to Shenzhen Shenbao Industrial Co., Ltd.Shenbao Huacheng Refers to Shenzhen Shenbao Huacheng Science and Technology Co.,Ltd
Wuyuan Ju Fang YongRefers toJu Fang Yong Tea Industry Co., Ltd. in Wuyuan County
Hangzhou Ju Fang Yong Refers to Hangzhou Ju Fang Yong Holding Co., Ltd.Shenbao Technology Center Refers to Shenzhen Shenbao Technology Center Co., Ltd.Huizhou Shenbao Science & TechnologyRefers toHuizh ou S henbao Science & Technology Co., Ltd.
Shenbao Sanjing Refers to Shenzhen Shenbao Sanjing Food & Beverage Development Co., LtdShenbao Industrial & Trading Refers to Shenzhen Shenbao Industrial & Trading Co., Ltd.Shenbao P ropertiesRefers toShenzhen Shenbao Properties Management Co., Ltd.
Shenshenbao Investment Refers to Shenzhen Shenshenbao Investment Co., Ltd.Yunnan Supply Chain Refers to Yunnan Shenbao Pu’er Tea Supply Chain Management Co., Ltd.Fuhaitang EcologicalRefers toFuhaitang Tea Ecological Technology Co., Ltd.
Fuhaitang Restaurant Refers to Hangzhou Fuhaitang Restaurant Management Co., Ltd.Chunshi Network Refers to Hangzhou Chunshi Network Technology Co.,Ltd.Jufangyong TradingRefers toHangzhou Jufangyong Trading Co., Ltd
Shenshenbao Tea Culture Refers to Shenzhen Shenshenbao Tea Culture Management Co., LtdPu’er Tea Trading Cen ter/Tea Trading
Center
Refers to Yunnan Pu’er Tea Trading Center Co., Ltd.Huizhou Shenbao FoodRefers toHuizhou Shenbao Food Co., Ltd.
Shenbao R oc k Tea Refers to Mount Wuyi Shenbao Rock Tea Co., Ltd.Shenbao Tea-Shop Refers to Shenzhen Shenbao Tea-Shop Co., Ltd.Fud e C api tal Refers to Shenzhen Fude State-Owned Capital Operation Co., Ltd.Agricultural ProductsRefers toShenzhe n Ag ricultura l Products Co., Ltd
Shenzhen Investment Holding Refers to Shenzhen Investment Holding Co., LtdSZCG Refers to Shenzhen Cereals Group Co., Ltd.
SASACRefers to
State-owned Assets Supervision and Administration Commission of theState Coun cil
Shen zhen SASAC Refers to
Shen zhen Municipal People’s G overnment State-owned AssetsSupervision & Administration CommissionCSRC Refers to China Securities Regulation CommissionSSE Refers to Shenzhen Stock ExchangeDahua CPA Refers to Dahua Certified Public Accountants (Special General Partnership)
Article of Association Refers to Article of Association of Shenzhen Shenbao Industrial Co., LtdRMB/10 thousand Yuan Refers to CNY/ten thousand Yuan
Sect i o n I I Company Profil e a nd Main Financial Indexes
I. Company profile
Short form for share
Stock code000019, 20 0019
Listing stock exchange Shenzhen Stock ExchangeChinese nam e of the Company
SHENSHENBAO-A,SHENSHENBAO-B
深圳市深宝实业股份有限公司
Abbr. of Chinese name of theCompany (if applicable)
深宝
English name of theCompany(if applicable)
SHENZHEN SHE NB AO INDUSTRIAL CO.,LTD.Abbr. of English name of the
Company(if applicable)
SBSYLegal Repr esentative Zheng Yuxi
II. Person/Way to contact
Secretary o f the Board Rep. of security affairsName Li Yiyan Huang Bingxia
Contact add.
8/F, Tower-
B, Building 4, SoftwareIndust ry Base, Science & Technology Park(South), Xuefu Road, Nanshan District,
Shenzhen
8/F, Tower-
| B, Building 4, Software Indust ry Base, Science & Technology Park (South), Xuefu Road, Nanshan District, | B, Building 4, Software Indust ry Base, Science & Technology Park (South), Xuefu Road, Nanshan District, |
ShenzhenTel. 0755-82027522 0755-82027522Fax. 0755-82027522 0755-82027522E-mail lyy@sbsy.com.cn huangbx@sbsy.com.cn
III. Others
1. Way of contact
Whether r egi s trations address, offices address and codes as well as website and email of the Company changed in reporting period ornot
□ Applicable √ Not applicable
Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period,found more details in Annual Report 2017
2. Information disclosure and preparation place
Whether i nformation disclosure and preparation place changed in reporting period or not
□ Applicable √ Not applicable
The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparationplace for semi -annual report have no change in reporting period, found more details in Annual Report 2017
IV. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting da ta
□Yes √No
Current period Same period of last year Changes over last yearOperati ng revenue (RMB)
| 136,721,215.40 | 138,158,382.95 |
-
Net profit attributable to shareholders ofthe listed Company(RMB)
-
| 1.04% | ||
| 18,246,639.07 |
-
-
| 17,759,776.83 | 2.74% |
Net profit attributable to shareholders ofthe listed Company after deductingnon-recurring gains and losses(RMB)
-
-
| 18,884,920.69 | 19,357,560.01 | 2.44% |
Net cash flow arising from operatingactivities(RMB)
-
| 9,795,470.07 | 50,432,648.15 |
119.42%
Basic earnings per share (RMB/Share) -0.0367
-0.0357
-
| 2.80% |
Diluted earnings per share (RMB/Share)-0.0367
-0.0357
-
Weighted average ROE -1.95%
| 2.80% | ||
-1.74%
-
| 0.21% |
End of current period End of last year
Changes over end of last
yearTotal assets (RMB)
| 1,040,484,135.20 | 1,070,386,220.55 |
-
Net assets attributable to shareholder oflisted Company(RMB)
| 2.79% | ||
| 928,673,938.26 | 946,920,577.33 |
-
V. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (InternationalAccounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
√ Applicable □ Not applicable
In RMB
Net profit attributable to shareholders of listed
Company
Net assets attributable to shareholders of listed
CompanyCurrent period Last period Period-end Period-beginChinese GAAP -
1.93%18,246,639.07
-
| 18,246,639.07 | 17,759,776.83 | 928,673,938.26 | 946,920,577.33 |
Items and amount adjusted by IASAdjustment for other payablefund of stock marketregulation
1,067,000.00
| 1,067,000.00 |
IAS -
-
| 18,246,639.07 | 17,759,776.83 | 929,740,938.26 | 947,987,577.33 |
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accountingrules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company has no above mentioned condition occurred in the period
3. Explanation on differences of the data under accounting standards in and out of China
□ Applicable √ Not applicable
VI. Items and amounts of extraordinary profit (gains)/loss
√ Applicable □ Not applicable
In RMBItem Amount Note
write-off that accrued for i mpai rment of assets)
-67,563.97
| Gains/losses from the disposal of non-current asset (including the |
business)
| 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 | 1,377,862.18 |
held-for-transaction financial assets and
| financial liabilities except for the effective hedge business related to normal business of the |
Company
sale
-425,718.15
| , and investment income from disposal of transactional financial assets and liabilities and financial asset s available for |
aforemen tioned items
56,049.77
| Other non-operating income and expenditure except for the |
Less: impact on income tax
52,636.76
Impact on minority shareholders’ equity (post-tax)
| 249,711.45 |
Total
638,281.62
--Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists ofextraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to
the Public --- Extraordinary Profit/loss
Section III Summary of Company Business
I. Main businesses of the Company in the reporting period
Does the Company need to comply with disclosure requirements of the special industry?No
The Company mainly engaged in the production, R&D and sale business of ingredient/raw-food material based ontea and deep processing of natural plants. After decades of development, we have established relatively completeindustrial chain involving tea cultivation, purified tea, tea extract, boutique tea sales, tea cultural experience,e-commerce, tea trading platform and tea finance. Its main business comprises tea refining and fine tea sales,tea-life experience, tea e-commerce, food and beverage, research and development and so on. The Company hasestablished three major business directions, namely, the “health technology” development direction with plantextraction technology as the core business, the “industrial service” development direction with tea exchangeindustry finance and electronic trading as the core business, and the “life experience” development direction withiTealife / Teabank tea fashion consumption as the core business, and promotes the integration and coordinateddevelopment of all business segments and enhances the overall value of the industry by vigorously expanding thethree major business directions.Main products are including "Golden Eagle" instant tea powder, juice ect series; "Jufangyong", "Gutan", "Fuhaitang" and “Shenbao Tea-Shop” ect series; "Mitsui" oyster sauce, chicken, seafood sauce and other condiments;"Shenbao" chrysanthemum tea, lemon tea, herbal tea and other drinks.
II. Major changes in main assets
1. Major changes in main assets
Major as sets Note of major changesEquity assets No major Change
Fixed assets No major ChangeIntang ible assetsNo major Change
Construction in progress No major ChangeOther current assets
Increase of t he other current assets: the financial products have more account from a yearearlier at end of the period
2. Main overseas assets
□ Applicable √ Not applicable
III. Core Competitiveness Analysis
Does the Company need to comply with disclosure requirements of the special industry?
NoDuring the reporting period, core competence wasn’t significantly changed. The Company has establish ed relatively completeindustrial chain involvin g tea cu ltivatio n , pu rified tea, t ea extract , b ou tiqu e tea s ales, t ea cul tu ral experi ence, e-co mmerce, tea tr adi ngplatform and tea finance, forming a good industrial base; relying strong R & D capabilities, leading edge technology, two state-levelhigh-t ech en terp ris es, a qu alit y con tro l syste m reco gnized b y large in tern ation al fo od and b everage c ompan ies, th e Company broughta group of high-quality large domestic and foreign clients. The Company will continu e to innovate institutional mechanisms,innovat iv e ideas, innovative products to enhance synergies and core competitiveness of the tea industry chain.
Section IV Discussion and Analysis of the Operation
I. Introduction
In first half of 2018, the Company continued to promote scientific and technological innovation by focusing on the existing industriallayout and market development trends, fully implemented various operational measures to consolidate the industrial foundation andenhance the industrial value, vigorously expand the main business, and enhance the profitability and core competitiveness of theenterprise. At the same time, in line with the overall strategic deployment of state-owned grain and agricultural enterprises inShenzhen, it was planned to acquire 100% equity of Shenzhen Cereals Group Co., Ltd. by issuing shares to purchase assets. Duringthis period, the Company adhered to grasping two objects at the same time, in the case of steadily implementing various intrinsicmanagemen t measures, ensur ed the stab le develop ment of various business segments, actively promoted the progress of major assetsrestructuring projects, adjusted and optimized the industrial layout, and achieved resource integration by superior resourcecomplementary of all parties, which ultimately promoted the Company’s sustainable operation ability and profitability and improvedthe qual ity and efficiency of enterprise development.During the reporting period, the Company continuously promoted the project research and development and technical support,promoted the industrial development by product breakthroughs and technological innovations, steadily improved the advantages oftradit ional business s egments, and stri ved to improve qualit y and reduce losses and incr ease revenue. In the first h alf of the year, theTechnology Center completed a number of government application projects, including “Shenzhen High-tech Enterprise Cultivationand Storage” and “Shenzhen R&D Expenses Funding”, and reached cooperation with many brand customers, which providedintegrative solutions with multiple dimensions and aspects for related enterprises from concept to product realization; the deepprocessing business module somewhat increased the product gross margin through a series of strict cost control measures such asoptimizing supply chain, reducing consumption and increasing efficiency; Huizhou Shenbao Technology continued to improve theproduction process and formula of the beverage and condiments business, and completed various production tasks by guaranteeingboth quality and quantity; the overall sales of specialty tea business of Hangzhou Ju Fang Yong did not meet the expectations, but thefast drink business of its subordinate “iTealife” has gradually opened up the franchise market through the third party cooperation, andthe performance has been improved to some extent; under the premise of the existing business model, Shenbao tea culture continuedto promote the internal rectification, sorted out the product system, and achieved expectations in new product development, costcontrol, and operation procedure improvement, and reduced losses.During the reporting period, the Company actively promoted the major assets restructuring projects and fulfilled the relevant internaldecision-making procedures and information disclosure obligations.In the first half of 2018, the Company achieved a total operating income of 136,721,215.40 Yuan, a decline of 1.04% over the sameperiod of last year; operating profit of -18,090,617.03 Yuan, a decrease of 15.97% over the same period of last year; net profitattributable to shareholders of listed companies was -18,246,639.07 Yuan, a decline of 2.74% compared with the same period of lastyear. The main reason for t he change was that t he Company’s profit from tea deep processing business increased compared with thesame period of the previous year by optimizing the product structure. At the same time, the Company added new assets restructuringrelated exp enses in t he current perio d, which cau sed the Company’s overall losses were basically the same as that of the same periodof last year.
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 changesOperation revenue
| 136,721,215.40 | 138,158,382.95 |
-1.04%
Operation cost
| 98,142,437.41 | 104,400,839.32 |
-5.99%
Sales expenses
| 18,475,423.94 | 21,174,407.31 |
-12.75%
Manage ment expenses
| 37,057,054.07 | 33,082,783.76 |
12.01%
Financial expenses
-
| 1,547,896.32 |
-
0.95%
| 1,533,397.02 |
Income tax e xpense
36,586.58
| 1,125,027.35 |
2,974.97%
| Part of the subordinate enterprise gains in the |
period, thus the
tax expense i ncreasedR&D investment
| income | |||
| 1,308,711.37 | 1,162,154.46 |
12.61%
Net cash flow arisingfrom operation activities
| 9,795,470.07 |
-
-119.42%
| 50,432,648.15 | The cash flow from good sales increased in the |
period; the cash out-
declinedNet cash flow arising
from investmentactivities
-
| flow from goods purchasing | ||
| 31,925,603.80 |
-
-62.29%
| 84,671,733.66 | The cash paid for purchasing financial products in the period declined from a year |
earlierNet cash flow arising
from financing activities
-
-
| 10,610,098.89 | 17,904,646.76 |
-40.74%
| At same period of last year, there was a cash expenses from dividend |
dist
periodNet incr ease of cas h andcash equivalent
-
| ribution, while no such account in the | ||
| 32,614,983.97 |
-
-78.69%
| 153,076,370.04 |
Other current assets
| 32,071,685.68 | 2,758,494.99 |
1,062.65%
| Balance of the financial products increased over |
same period of last yearMajor changes on profit composition or profit resources in reporting period
□ Applicable √ Not applicable
No major changes on profit composition or profit resources occurred in reporting period
Compo s it io n of mai n bus i ness
In RMB
Operating
revenue
Operati ng cost
| Gross profit ratio | Increase or |
decrease of
over
| same period |
of last year
decrease ofoperating cost
| over same period |
of last year
decrease of g r ossprofit ratio oversame period of
last yearAccording to industries
Industry
121,178,697.27
Increase or
| 91,848,572.71 |
24.20%
-0.03%
-4.70%
3.71%
Trading
10,621,768.13
| 3,833,267.60 |
63.91%
-22.27%
-41.67%
| 12.00% |
According to productsSoft drink 16,625,023.79
| 11,744,617.80 |
29.36%
9.18%
| 11.83% |
-
Tea products
| 1.67% | |||
| 111,557,314.93 | 81,501,902.46 |
26.94%
-4.01%
-9.76%
| 4.66% |
According to regionExportation 7,247,844.78
| 5,160,648.34 |
28.80%
3.14%
5.99%
-
| 1.91% |
South China 19,580,861.50
| 14,230,891.31 |
27.32%
-39.38%
-38.76%
-
| 0.74% |
North China 11,331,470.49
| 9,336,777.66 |
17.60%
32.09%
20.12%
| 8.21% |
East China 74,819,223.73
| 51,324,665.29 |
31.40%
10.93%
2.52%
| 5.63% |
Central China 12,754,935.79
| 10,041,568.45 |
21.27%
9.24%
5.81%
| 2.55% |
III. Analysis of the non-main business
□ Applicable √ Not applicable
IV. Assets and liability
1. Major changes of assets composition
In RMB
End of cur re nt pe r iod End of period of last year
Ratiochanges
Notes of major changes
Amount
Ratio in total
assets
Amount
Ratio in total
assetsMonetary fund 223,346,666.44
| 21.47% | 255,961,650.41 |
23.91%
-2.44%
Accountreceivable
65,057,127.05
| 6.25% | 77,193,068.03 |
7.21%
-0.96%
Inventory 162,120,133.29
| 15.58% | 155,306,108.94 |
14.51%
1.07%
Investmentproperty
18,165,479.87
| 1.75% |
18,401,275.03
1.72%
0.03%
Long-term equityinvestment
5,063,724.67
| 0.49% | 5,248,629.66 |
0.49%
0.00%
Fix assets 303,675,729.05
| 29.19% | 313,742,404.72 |
29.31%
-0.12%
Construction inprocess
864,175.33
| 0.08% | 134,918.91 |
0.01%
0.07%
2. Assets and liability measured by fair value
√ Applicable □ Not applicable
In RMBItems
Amount at the
beginning
period
valuegains/losses in
this period
Accumulativechanges of fair
| Changes of f air | value reckoned |
into equity
the period
Amount ofpurch
| Devaluation of withdrawing in | ase in the |
period
in the period
| Amount of sale | Amount in the |
end of periodFinancial assets
1. Fin ancialassetsmeasured byfair valu e andwhose chang eis recorded incurren t g ainsand losses(excludingderivativefinancialassets)
1,599,668.20
-425,718.15
| 92,883.96 | 1,173,950.05 |
Subtotal 1,599,668.20
-
| 425,718.15 | 92,883.96 | 1,173,950.05 |
Aforementioned total
1,599,668.20
-
| 425,718.15 | 92,883.96 | 1,173,950.05 |
Financialliabilities
0.00
0.00
Whether there have major changes on measurement attributes for main assets of the Company in report period or not
□ Yes √No
3. The assets rights restricted till end of the period
Ended as reporting period, the Company has no assets rights restricted
V. Investment Analysis
1. Overall situation
√ Applicable □ Not applicable
Investment in reporting period (Yuan) Investment in the same period of last year Range
(Yuan)0.00
5,500,000.00
-
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
4. Financial assets investment(1) Securities investment
√ Applicable □ Not applicable
Variety
ofsecuritie
s
100.00%
Code of
securitie
s
Shortform ofsecuritie
s
Initi
| Code of | al |
investment cos t
Account
ingmeasure
mentmodel
Bookvalue at
thebeginni
ng of
theperiod
| Changes |
in fair
thecurrentprofitand loss
Cumulative fair
valuechanges
inequity
Currentpurchas
eamount
Current
salesamount
Profit
in theReporti
ngPeriod
Bookvalue atthe endof theperiod
Account
ingsubject
CapitalSource
| and loss |
Domestic and
stock
000017 CBC-A --
| overseas |
Measure
value
1,599,6
68.20
| d by fair |
-425,71
8.15
92,883.
0.00
0.00
0.00
1,173,9
50.05
Transactionalfinancial assets
Sharesrepaidfromdebtreorganization
Total --
--
1,599,6
68.20
-425,71
8.15
92,883.
0.00
0.00
0.00
1,173,9
50.05
-- --Disclos ure date of
securit ies investmentapproval of the Board
Not ap pl icableDisclos ure date of
securit ies investmentapproval of the Shareho
Meeting ( if applicable)
Not ap pl icable
(2) Derivative investment
□ Applicable √ Not applicable
The Company has no derivatives investment in the Period
VI. Sales of major assets and equity
1. Sales of major assets
□ Applicable √ Not applicable
The Company had no sales of major assets in the reporting period.
2. Sales of major equity
□ Applicable √ Not applicable
VII. Analysis of main Holding Company and stock-jointly companies
√ Applicable □ Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMBCompany
name
Type
Mainbusiness
Register cap ital Total assets Net Assets
Operating
revenue
Operating
profit
Net profitWuyuan
Ju FangYong
Subsidiary
Sales and
| production |
of teaproducts
290,000,000.00
| 406,980,655.84 | 324,994,035.58 |
84,705,491.88
| 5,186,849.97 |
3,882,637.49
ShenbaoTechnology Center
Subsidiary
Development,consultingandtr ansfer oftechnology
54,000,000.00
| 44,100,092.63 | 33,847,707.32 |
12,528.05
-
| 2,020,660.37 |
-
HangzhouJu FangYong
Subsidiary
| 2,020,660.37 | ||
Sales and
of teaproducts
175,000,000.00
| production | 211,729,223.62 | 156,892,147.26 |
15,424,604.46
-
| 5,146,570.80 |
-
Pu’er TeaTradingCenter
Subsidiary
| 5,035,099.00 | ||
Serviceindustry
50,000,000.00
| 45,407,102.16 | 34,590,516.81 |
76,410.93
-
| 2,164,182.09 |
-
Particular about subsidiaries obtained or disposed in report period
□ Applicable √ Not applicable
Explanation on main holding/stock-jointly enterprise1.Ju Fang Yong Tea Industry Co., Ltd. in Wuyuan County is a wholly-owned subsidiary of the Company. Business scope: tea,natural plants, t ea and natural plant ext racts, planting, tea import and export trade, agricultural and sideline products, acquisition,process ing, sal es; pre-packaged food sales. (The above projects for which the country has special provisions should be operated witha valid qualification certificate or permit). Registered capital amou nted as 290,000,000 Yuan. Up to the reporting period, total asstesof Wuyuan Ju Fang Yong comes to 406,980,655.84 Yuan, net assets amounted as 324,994,035.58 Yuan, the shareholdres equity
attributable to parent Company amount ed as 324,994,035.58 Yuan; in the reporting period, operation revenue amounted as84,705,491.88 Yuan, net profit achived 3,882,637.49 Yuan and net profit attributable to parent Company was 3,882,637.49 Yuan.2. Shenzhen Shenbao Technology Center Co., Ltd. is a wholly-owned subsidiary of the Company, its business scope includestechnical development, technical consultation, technology transfer and inspection services for tea, plant products, soft drinks andfood (except for projects subject to approval before registration by laws, administrative regulations, State Council decisions);domestic trade; prepackaged food wholesale, liquor wholesale. Register capital was 54 million Yuan. Ended as this period-end, totalassets of Shenbao Technology Center amounted as 44,100,092.63 Yuan, net assets amounting to 33,847,707.32 Yuan, theshareholders equity attributable to parent Company amounted as 33,847,707.32 Yuan; in the reporting period, Shenbao TechnologyCenter achieved operation revenu e of 12,528.05 Yuan, net profit amounting to (2,020,660.37) Yuan and net profit attributable toparent Company amounted as (2,020,660.37) Yuan3. Hangzhou Ju Fang Yong Holding Co., Ltd., a wholly owned subsidiary. Business scope: sell both retail and wholesale: wholesale,retail of the prepackaged food and bulk food (pre-approval items should be operated within validity period ): tea set; acquisitions: teabusiness sales required (limited to the acquisition of the original producer of primary industry directly); Services: Tea businessinvestment and asset management, technology development, cultivation, breeding, technical consulting, technical services, transfer ofresults, the other all legitimate projects without approval, subsidiaries’ business scope included. Register capital was 175 millionYuan. Ended as this period-end, the total assets of Ju Fang Yong is 211,729,223.62 Yuan, and net assets amounting to156,892,147.26 Yuan, shareholders’ equity attributable to parent Company is 157,204,306.46 Yuan; in the reporting period, Ju FangYong achieved operation income, net profit and net profit attributable to shareholder of parent Company as 15,424,604.46 Yuan,(5,035,099.00) Yuan and (5,029,801.36) Yuan respectively.4. Yunnan Pu'er Tea Trading Center Co., Ltd. is a controlling subsidiary of the Company, its business scope includes providing places,facilities and in termediary, brokerage, auction, finance, and consult ing services for tea and other agricultu ral and sideline products,spot trading of industrial raw materials and bulk stock, and related financial services; invest ment and management of oth er relatedprojects; conferen ce and exhibition services (pro jects subject to approval accor ding to law, operating activities only be carried outafter th e appro val of rele vant d epartments). Registe r capital was 50 million Yuan. Ended as this period-end, total assets of P u’ er TeaTrading Center amounted as 45,407,102.16 Yuan, net assets amounting to 34,590,516.81 Yuan, the shareholders equity attributable toparent Company a mounted as 34,590,516.81 Yuan; in the reporting period, Pu’er Tea Trading Center achieved operation revenue of76,410.93 Yuan, net profit amounting to (2,164,182.09) Yuan and net profit attributable to parent Company amounted as(2,164,182.09) Yuan
VIII. Structured vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Prediction of business performance from January – September 2018
Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or thewarning of its material change compared with the corresponding period of the last year and explanation on reason
□ Applicable √ Not applicable
X. Risks and countermeasures
1. Rest ricted by the ch allenges faced by the overall en vironment o f the domestic b everage mar ket, the competition in the industry isintensifying, the Company’s profits are not satisfactory, and the return expectations of various projects are relatively slow. TheCompany is actively promoting various improvement measures to reduce consumption and increase efficiency, drive the product
upgrades and innovations to improve market competitiveness, enhance overall profit margins, and accelerate the efficiencypromotion.2. In recent years, the consumption trend is changing day by day, but the Company’s business structure and talent structure arerelatively simple, the team construction is lagging behind, and the professional talent team is lacking, as a result, in the cultivation ofnew business, the Company’s innovation ability and strain capacity are inadequate when facing the competitio n in new areas, whichincreases the cycle and cost of business transformation. The Company will continue to introduce professional talents from the outside,train talents at home, strengthen the construction of talent teams, and open up the development channels for employees to createcareer development opportunities.3. As the Company is actively promoting major asset restructuring projects during the reporting period, the Company has disclosedthe various risk factors in detail in the “Report on Issuing Shares for Asset Pu rchase and Related Transactions” (draft) (revisedversion ), see the Company’s announcement disclosed at www.cninfo.com.cn on June 23, 2018.
Section V. Important Events
I. A nnual General Meeting and extraordinary shareholders general meeting held in thisperiod
1. AGM in the period
Sessions Type
Investorparticipati
on (%)
Opening date Disclosure date Disclosure index
2017 Annualgeneral meeting
Annual generalmeeting
35.34%
2018-05-15 2018-05-16
| Resolution Notice of AGM 2017 of Shenzhen Shenbao Industrial Co., Ltd. |
(Notice No.: 2018-
Juchao website dated 16 May 2018The FirstInterimShareholders
| 44) released on | ||
| General Meeting |
of 2018
Interim
eting
4.83%
2018-06-27 2018-06-28
| Resolution Notice of The First Interim Shareholders General Meeting of 2018 of Shenzhen Shenbao Industrial Co., Ltd. |
(Notice No.: 2018-
Juchao website dated 28 June 2018
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
□ Applicable √ Not applicable
The Company plans not to carried out distribution of cash dividend, bonus shares and share converted from capital reserve either forthe half year
III. C ommitments completed in Period and those without completed till end of the Period from actualcontroller, 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 CPA
Whether the financial report has b een audited or not
□Yes √No
The financial report has not been audited
V. E xplanation from Board of Directors and Supervisory Committee for “Qualified Opinion”that issued by CPA
□ Applicable √ Not applicable
VI. Explanation from the BOD for “Qualified Opinion” of last year
□ Applicable √ Not applicable
VII. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization for the Company in end of this period
VIII. Lawsuits
Significant lawsuits and arbitrations
□ Applicable √ Not applicable
No significant lawsuits and arbitrations occurred in the reporting periodOther lawsuits
√ Applicable □ Not applicable
Lawsuits (arbitrations)
Amountinvolved
(in 10thousand
Yuan)
Result ed an
accrualliability
(Y/N)
Progress
Trial result and
influence
ofjudgment
Disclosur
edate
Discl
| osure index | |||
| Shenzhen Shenbao Industrial Co., Ltd. (hereinafter referred to as “Shenbao Company”) received the Civil Complaint from Shenzhen Agricultural Products |
Financing Guarantee Co., Ltd. (hereina
Warehousing E-
| commerce Co., Ltd., a shareholding enterprise of Shenbao Company, to repay the loan principal and interest, |
N
In secondinstance, finaljudgment hasnot been madeout while thesecond instancehas completed
The firstinstancejudgment hasbeen issued, thecourt ruled toreject the appealof GuaranteeCompany thatShenbaoCompanyshould
Adjudication has not
| been made |
in secondinstancecourt
Notapplicable
Notapplicable
5,000,000.00.
| After holding a hearing, Shenbao Company |
received the written judgment of first instanc
Shenzhen Intermediate People's Court, Ca
| se is in second instance, final judgment has not been made out while the second instance has |
completed
undertake jointliability
Technology Co., Ltd.
| sued Ma Xuezhong and |
required
which has not yet been decided.
| Ma Xuezhong to pay the equity transfer payment of 600,000 Yuan and the overdue interest, Shangsi Court of Hangzhou West Lake District People’s Court held a hearing for this equity transfer dispute case |
N
In process offirst instance
Not yet verdict Invalid
Notapplicable
Notapplicable
IX. Penalty and rectification
□ Applicable √ Not applicable
No penalty and rectification for the Company in re porting period.
X. Integrity of the Company and its controlling shareholders and actual controllers
√ Applicable □ Not applicable
During the reporting period, the Company and its controlling shareholder always obeyed final judgment in the court case, relativelylarge amount of debt overdue and other non-compliance.
XI. I mplementation of the Company’s stock incentive plan, employee stock ownership plan orother employee incentives
□ Applicable √ Not applicable
During the reporting period, the Company has no stock incentive plan, employee stock ownership plan or other employee incentivesthat hav e not been implemented.
XII. Major related transaction
1. Related transaction with routine operation concerned
□ Applicable √ Not applicable
No related transaction occurred in the period with routine operation concerned
2. Assets or equity acquisition, and sales of assets and equity
□ Applicable √ Not applicable
No relat ed transaction concerning the asses or equity acquisition and sold at period-end
3. Related transaction of foreign investment
□ Applicable √ Not applicable
No relat ed 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
On 8 June 2018 and 27 June, the 17th session of 9th BOD and First Extraordinary General Meeting of 2018 are deliberated andapproved the Proposal as Purchasing Assets by Issuing of Shares and Report of Related Transactions (Draft) and its Summary, theCompany agreed to purchased 100% equity of Shenzhen Cereals Group held by Fude Capital by shares offering with considerate of5,875,546,441.66 Yuan for the target assets.The counterparty-Fude Capital is the controlling shareholder of the Shenbao Industry and in accordance with relevant regulations asRestructuring Measures and Listing Rules from Shenzhen Stock Exchange, the transaction constitutes related transactions.Up to now, the matter is still in the audit stage of the China Securities Regulatory Commission and will be implemented after it hasbeen approved.Relevant information of website for announcement disclosed with major related transaction concerned
Announcement Date for disclosure Website for inquiryPurchasing Assets by Issuing of Shares and Report of
Related Transactions (Draft)
2018-06-11
Juchao Websi te(www.cninfo.com.cn)
2018-06-28Juchao Websi te
(www.cninfo.com.cn)
XIII. 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 YuanExternal Guarantee (not including guarantees to subsidiaries)Name of the
Companyguaranteed
Announce
mentdisclosure
| date |
Guarantee
limit
Actual dat e of
of signingagreement)
Actualguarantee limit
| happen ing (Date |
Guarantee
type
Guarantee
term
Complete
implementation or
not
Guarante
e fo rrelated
partyGuarantee between the Company and subsidiaryName of the
Companyguaranteed
Related
Announce
mentdisclosure
| date |
Guarantee
limit
Actual dat e of
of signingagreement)
Actualguarantee limit
| happen ing (Date |
Guarantee
type
Guarantee
term
Complete
implementation or
not
Guarante
e fo rrelated
party
| Shenzhen Shenbao |
2017-04-24
2017-07-27 3,000
| 3,000 |
Joint liabilityOne year N Y
Huacheng Scienceand TechnologyCo., Ltd
guaranty
report period (B1)
| Total amount of approving guarantee for subsidiaries in | Total amount of actual occurred guarantee for subsidiaries in report period (B2) | 3,000 | |
| Total amount of approved |
guarantee for subsidiaries a
end of reporting period (B3)
3,000
| t the | Total balance of actual guarantee for subsidiaries at the end of reporting period (B4) | 3,000 |
Guarantee between the subsidiariesName of the
Companyguaranteed
Announce
mentdisclosure
| date |
Guarantee
limit
Actual dat e of
of signingagreement)
Actualguarantee limit
| happen ing (Date |
Guarantee
type
Guarantee
term
Complete
implementation or
not
Guarante
e fo rrelated
partyTotal amount of guarantee of the Company( total of three abovementioned guarantee)
Total amount of approvingguarantee in report period(A1+B1+C1)
| Total amount of approving guarantee in report period (A1+B1+C1) | Total amount of actual occurred guarantee in report period (A2+B2+C3) | 3,000 | |
| Total amount of approved guarantee at the end of report period (A3+B3+C2) |
3,000
| Total balance of actual |
guarantee at
| the end of report period (A4+B4+C4) | 3,000 | |
| The proportion of the total amount of actually guarantee in the |
net assets of the Company(that is A4+ B4+C4)
Including:
3.23%Amount o f guarantee fo r shareh olders, act ual con troller an d its
related parties(D)
| Amount o f guarantee fo r shareh olders, act ual con troller an d its related parties(D) | |
| The debts guarantee amount provided for the guaranteed |
parties whose assets-
| liability ratio exceed 70% directly or indirectly(E) | |
| Proportion of total amount of guarantee in net assets of the Company exceed 50%(F) |
Total amount of the aforesaid three guarantees(D+E+F)
| Explanations on possibly bearing joint and several liquidating |
responsibilities for undue guarantees (if applicable)
Not ap pl icable
procedures (if applicable)
Not ap pl icableExplanation on compound guarantee
Nil
(2) Illegal external guarantee
□ Applicable √ Not applicable
No ill egal ex ternal guarantee in the period
3. Other material contracts
√ Applicable □ Not applicable
Company
ContractConclusion
OtherParty
| Name of the | Name of |
theContractConclusion
ContractObject
theContract
BookValueof AssetsInvolvi
| Date of | ng in |
Contrac
thousan
| d Yuan) |
(if any)
Estimate
of
| Assets |
Involvin
Contract(ten
| thousand Yuan) (if |
any)
EvaluationAuthority Name (if any)
BaseDateof AssetEvaluati
any)
Pricing Principle
TransactionPrice(ten
| on (if | thousand |
Yuan)
WhetherRelatedTransactions
RelatedRelation
Implementat
ReportingPeriod
| ion as of the end of the | Date of |
Disclosure
Disclosure Index
Shenzhen
Industrial Co.,Ltd.
ShenzhenFudeState-OwnedCapitalOperationCo., Ltd.
ShenzhenCerealsGroupCo.,Ltd.
2018-06-
314,259
.1
| Shenbao |
587,554.
BeijingChinaEnterpriseAppraisals
| Consultation |
Co., Ltd.
2017-09-
See details
Related
| Transactions” (draft) |
(revisedversion) disclosedat
cn on June 23, 2018.
Y
Thecounterparty-F
Industry
| , this |
transaction
relatedtransaction.
As of the
| constituted a | end of the |
reporting
transaction
| is still subject to |
thecentralized
the
| operators of the Ministry |
ofCommerce
2018-06-
| and the | As for the Agreement on Shenzhen Shenbao Industrial Co., Ltd. and Shenzhen Fude |
State-
Ltd.
| Issuing Shares to Purchase Assets and its |
supplementary
th
| e relevant announcement published |
at www.cninfo.com.cn on
2018.
SecuritiesRegulatoryCommission
| , and there is |
uncertainty
be
| approved and the time |
beingapproved.
XV. Social responsibility
1. Major environment protection
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection departmentYes
Name
Particular Pollutants
Emission Method
| Name of Major Pollutants and | Quantity of |
DischargeOutlet
Discharge Outlet
EmissionConcentration
Execute
| Distribution of | d Pollutant |
DischargeStandards
TotalEmissions
ApprovedTotalEmissions
ExcessiveDischarge
Shenzhen ShenbaoHuacheng Science andTechnology Co.,Ltd
demand
Emission after the
| Chemical oxygen | qualified biochemical |
treatment
Concentrativeemissions
10 90 0.22 tons
15.44 to ns/Year
NShenzhen Shenbao
Suspen ded matter
Emission after the
Concentrative5 60 0.11 tons10.293 tonsN
Huacheng Science andTechnology Co.,Ltd
treatment
emissions /YearShenzhen Shenbao
Huacheng Science andTechnology Co.,Ltd
Five-
| qualified biochemical | |
| day biochemical |
oxygen demand
Emission after the
treatment
Concentrativeemissions
1.8 20 0.04 tons
3.431 to ns/Year
NShenzhen Shenbao
Huacheng Science andTechnology Co.,Ltd
Ammonia nitrogen
Emission after the
| qualified biochemical |
| qualified biochemical |
treatment
Concentrativeemissions
0.146 10 0.003 tons
1.716 to ns/Year
NShenzhen Shenbao
Huacheng Science andTechnology Co.,Ltd
Chroma
Emission after the
treatment
Concentrativeemissions
2 40 0.044 tons
6.862 to ns/Year
NShenzhen Shenbao
Huacheng Science andTechnology Co., Ltd
PH va lue
Emission after the
| qualified biochemical |
| qualified biochemical |
treatment
Concentrativeemissions
7.43 6~9 —— —— N
Construction and operation of pollution prevention and control facilities1. In the initial stage of production, the first phase of sewage treatment capacity was 230T/day. However, due to the increase inproduction capacity and management needs, the second phase of the treatment capacity of 240T/day was rebuilt in 2007, and the totalsewage treatment design capacity reached 470T/day.2. In the past three years, the Company’s sewage treatment facilities have performed well and there has been no excessive discharge.Environmental impact assessment of construction projects and other environmental protection administrative licenses1. The Company obtained the latest environmental protection approval in 2009:
Shenzhen Longgang District Environmental Protection Bureau Construction Project Environmental Impact Review and Approval No.SLHP[2009]703873; the Company’s industrial wastewater discharge is not allowed to exceed 470 tons/day, the wastewater dischargeperforms the first-level standard for the second period of DB44/26-2001.2. The Company obtained the latest “Guangdong Province Pollutant Discharge Permit” in 2016, which is valid until 2021.Emergency response plan for environmental emergenciesThe Company strengthened the operation, maintenance and management of environmental protection facilities, formulated a strictresponsibility system for environmental protection posts, established an emergency response team with the chairman of the pollutantdischarge unit as the co re of leadership, and revised the Company’s Emergency Response Plan for Environmental Emergencies toensure the stable and normal operation rate of the pollution control facilities reaches 100%.Environmental self-monitoring scheme1. The Company installed COD, PH value, and flowmeter pollution source online monitor for all-weather on-line monitoring in
2010.2. Engage a third-party professional organization to test the industrial discharge of wastewater for every half year.Other environmental information that should be disclosed1. Oil-to-gas project: In 2011, the Company transformed its two boilers from diesel boilers into natural gas boilers that burn cleanenergy, which greatly reduced the greenhouse gas emissions.2. Clean production audit: The Company passed the voluntary clean production audit of Shenzhen in 2016.
Other environment protectionNil
2. Execution of social responsibility of targeted poverty alleviation
The Company has no targeted poverty alleviation in the period and no follow-up poverty alleviation plan either temporary
XVI. Other major events
√ Applicable □ Not applicable
Shenzhen Shenbao Industrial has applied for a suspension of the Company’s stock (referred to as: Shenshenbao A, Shenshenbao B,stock code: 000019, 200019) from the opening of the market on August 22, 2017 to the Shenzhen Stock Exchange due to theplanning and preparation of major events. On September 5, 2017, the Company disclosed the “Announcement on the Suspension forthe Major Asset Restructuring of the Company”, the Company’s stock has been transferred to major asset restructuring and continuedto be suspended since the opening of the market on September 5, 2017. During the suspension of the Company’s stock, the Companyhas disclosed the “Announcement on Suspension Progress of Major Asset Restructuring” at least every five trading days inaccordance with relevant regulations.On March 23, 2018, the Company convened the fifteenth meeting of the Ninth Session of Board of Directors which discussed and
approved the “Proposal on Preplanning of Shenzhen Shenbao Industrial Co., Ltd. Issuing Shares to Purchase Assets and RelatedTransactions”, and the proposals related to this major asset restructuring.
On 27 March 2018, the Company received the “Inquiry Letter on the Restructuring of Shenzhen Shenbao Industrial Co., Ltd.”[License Restructuring Inquiry Letter [2018] No. 6] issued by the Shenzhen Stock Exchange. According to the requirements of theinquiry letter, the Company promptly organized various intermediaries t o carry out careful research, implemented and replied therelevant issues term by term, and supplemented and revised the original planning, and compiled the “Preplanning of ShenzhenShenbao Industrial Co., Ltd. Issuing Shares to Purchase Assets and Related Transactions (revised version)”By appl ication, the Company’s stock resumed the trading on the opening of the market on the morning of April 4, 2018 (Wednesday).
On June 8, 2018, the Company held the 17
th
meeting of the ninth board of directors which deliberated and approved the “Proposal on‘the Company’s Share Issuance for Purchasing Assets and Related Transactions Report (Draft)’ and its Summary” and otherproposals related to major asset restructuring.On June 15, 2018, the Company received the “Approval of Shenzhen State-owned Assets Supervision and AdministrationCommission on the Company’s Share Issuance for the Acquisition of 100% Equity of Shenzhen Cereals Group and Relevant Issuesof Major Assets Restructuring” (SGZWH [2018] No. 499) issued by Shenzhen SASAC from Fude Capital, agreed the restructuringplan reported by Fude Capital.On June 19, 2018, the Company received the “Inquiry Letter on the Company’s Restructuring” [XKLCZWXH[2018] No. 18] issuedby the Shenzhen Stock Exchange. According to the requirements of the inquiry letter, the Company supplemented and improved thedocuments related to this major asset restructuring, and established the Report on Share Issuance of Shenzhen Shenbao Industrial Co.,Ltd. for Purchasing Assets and Related Transactions (Revised Version).On June 27, 2018, the Company held the first extraordinary meeting in 2018 which reviewed and approved the “Proposal on ‘theCompany’s Share Issuance for Purchasing Assets and Related Transactions Report (Draft)’ and its Summary” and other proposalsrelated to this major asset restructuring.On July 5, 2018, the Company received the “Notice of Correction on Application for Administrative License o f China SecuritiesRegulatory Commission” (No. 181013) (hereinafter referred to as the “Notice of Correction”) issued by the China SecuritiesRegulatory Commission. The CSRC reviewed the applicat ion materials for the administrative license of the “Approval o f theCompany’s Listed Companies to Issue Shares to Purchase Assets” submitted by the Company, and requested the Company to submitthe relevant correction materials to the acceptance department of CSRC for administrative license application within 30 working daysfrom the date of issuance of the Notice of Correction. The Company strictly followed the requirements of the Notice of Correction,and actively prepared the correction materials and submitted them in time.On July 27, 2018, the Company received the “Administrative License Application Acceptance Fo rm of CSRC” issued by the Chin aSecurities Regulatory Commission (accep tance number is 181013). The China Securi ties Regulatory Commission examined theapplication materials for the administ rative license of the “Approval of the Issu ance of Shares by Listed Companies to PurchaseAssets” submitted by the Company in accordance with the law, considering that all materials were complete, decided to accept theapplication for the administrative license.On August 9, 2018, the Company obtained the “Notice of Investigation of China Securities Regulatory Commission” (YZDCTZ No.180133) from Jonten, the audit institution responsible for this major asset restructuring, because it was suspected of violatingsecurit ies laws and r egulatio ns in the audit process of oth er enterpr ises, CSRC d ecided to file a case and investigate it . In accordancewith the relevant regulations of the CSRC Decree No. 138, the Company convened the board meeting on August 13, 2018, anddecided to apply to the CSRC for the suspension of the “Approval of the Issuance of Shares by Listed Companies to PurchaseAssets” and submitted the application to the CSRC on the same day. On August 15th, the Company received the “Notice of theSuspension of the Review about Administrative License Application from China Securities Regulatory Commission (No. 181013),and CSRC decided to agree to the Company’s suspension of the review.
In view of the fact that Jonten had fulfilled the corresponding review procedures and issued the review report in accordance with theregulations, on August 19, 2018, the Company convened the board meeting to deliberate and approve the “Proposal on Resuming theReview about the Application for ‘the Approval of Issuance of Assets by Listed Companies to Purchase Assets’ to the ChinaSecurities Regulatory Commission”, and agreed the Company to apply to the China Securities Regulatory Commission forresumption of review.On 23 August 2018, the Company received a Decision of Anti-monopoly Examination of the Acts of Concentration of BusinessOperators without Further Examination (Anti- monopoly CS Letter [2018] No.153) from Anti-monopoly Bureau of the StateAdministration of Market Supervision and Administration, the Bureau agrees to conduct no further examination on the equityacquisition of Shenzhen Cereals Group by the Company, and the Company can implement centralization from now on.The material assets restructuring should be approved by CSRC and there is no certainty in approval.
XVII. Significant event of subsidiary of the Company
□ Applicable √ Not applicable
Section VI. Changes in Shares and Particulars about Shareholders
I. Changes in Shares1. Changes in shares
In Share
Before the C hange Increase/Decrease in the Change (+, -) After the ChangeA mount
Newsharesissued
Bonusshares
Capitalizat
ion ofpublicreserve
Others Subtotal A mount
Proportio
nI. Restricted shares
29,068,44
| Proportion | |
5.85%
9,942
9,942
| 29,078,38 |
5.85%
1. State-owned shares
0.00%
0.00%
2. State-owned corporateshares
13,431,78
2.70%
-13,431,78
-13,431,78
0.00%
3. Other domestic shares
15,583,32
3.14%
13,441,72
13,441,72
| 29,025,05 |
5.84%
Including: Domestic legalperson’s shares
15,384,83
3.10%
13,431,78
13,431,78
| 28,816,61 |
5.80%
| Domestic nature person’s shares |
198,493
0.04%
9,943
9,943
| 208,436 |
0.04%
4. Foreign shares 53,336
0.01%
-1
-1
| 53,335 |
0.01%
Including: Foreigncorporate shares
0.00%
0.00%
overseas natureperson’s share
53,336
0.01%
-1
-1
| 53,335 |
0.01%
II. Un-restricted shares
467,713,8
94.15%
-9,942
-9,942
| 467,703,9 |
94.15%
1. RMB common shares
415,964,5
83.73%
-9,942
-9,942
| 415,954,6 |
83.73%
2. Domestically listedforeign shares
51,749,28
10.42%
| 51,749,28 |
10.42%
3. Foreign listed foreignshares
0.00%
0.00%
4. Other
0.00%
0.00%
III. Total shares496,782,3100.00%
| 496,782,3 |
100.00%
Reasons for share changed
√ Applicable □ Not applicable
1. On January 19, 2018, the Company received the notice from the Company’s actual controller, Shenzhen State-owned AssetsSupervision and Administration Commission: In order to promote the overall strategic adjustment of in Shenzhen municipalstate-owned grain and agricultural enterprises, the Shenzhen Municipal People’s Government issued SFH [2018] No. 17 on January18, 2018, agreed to carry out holistic changes to Shenzhen municipal state assets, and transfer 16% equity of Shenshenbao held byShenzhen Investment Holdings to Fude Capital without compensation. For details, please refer to the “Prompt Announcement of theCompany on the Free T ransfer of State-owned Shares” disclosed at www.cninfo.com.cn on January 20, 2018.2. Ms. Li Fang, the original senior manager of the Company, submitted a written resignation report to the Company on May 31, 2018and immediately took effect. According to the relevant provisions of the “Detailed Rules for Reducing Shareholdings of Shareholders,Directo rs, Sup ervisors, and Senior Management of Listed Companies of the Shenzhen Stock Exchange”, 9,942 shares of outstandingshares of the Company h eld by Ms. Li Fang were converted into restricted shares from this d ate. For details, please refer to the“Announcement of the Company on the Resignation of Senior Management” disclosed at www.cninfo.com.cn on June 2, 2018.3. Due to the rounding off in the annual recalculation of shares locked by senior executive, the Company’s director, Mr. Yan Zesong,of whom one share of the Company was lifted restriction on January 2, 2018; the Company’s senior management, Mr. Yao Xiaopeng,of whom one share of the Company was restricted on January 2, 2018.
Approval of share changed
√ Applicable □ Not applicable
It has been approved by the State-owned Assets Supervision and Administration Commission of the State Council, the Ministry ofCommerce, and the China Securities Regulatory Commission that the 13,431,784 shares of the Company held by ShenzhenInvestment Holdings should be transferred to Fude Capital, for details, please refer to the “Announcement on the Progress of theCompany’s Free Transfer of State-owned Shares” disclosed at www.cninfo.com.cn on F ebruary 18, 2018, and the “Announcement ofthe Company on t he Approval of China Securities Regulatory Commission for the Application for the Exemption of Tender OfferObligations Obtained by Shenzhen Fude S tate-owned Capital Operation Co., Ltd. and the Progress of Major Assets Restructuringand Delisting” disclosed at www.cninfo.com.cn on March 17, 2018.
Ownership transfer of share changed
√ Applicable □ Not applicable
On April 3, 2018, China Securities Depository and Clearing Co., Ltd. completed the transfer of 13,431,784 shares of the Companyheld by Shenzhen Investment Holdings to Fude Capital. For details, please refer to the “Announcement of the Company on theCompletion of Free Transfer of State-owned Shares” disclosed at www.cninfo.com.cn on April 4, 2018.
Influence on the basic EPS and diluted EPS as well as oth er financial indexes of net assets per share attribut able to commonshareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
2. Changes of restricted shares
√ Applicable □ Not applicable
In Share
Shareholders’ name
Number of
sharesrestrict ed atPeriod-
Number of
sharesreleased i n
the Year
Number of newshares rest ricted
in the Y ear
Number of
sharesrestrict ed atPeriod-end
| begin |
Restriction
reasons
Released date
Shenzhen Fude Capital Operation
| Co., Ltd. |
13,431,784
13,431,784
Restrictedshares o fshare reform
Restrict s hares ofShen zhen InvestmentHolding transfer forfree
Shenzhen Investment HoldingCo., Ltd
| 13,431,784 |
13,431,784
Restrictedshares o fshare reform
Restrict ed sharestransfer to FudeCapital for f r ee
Yan Zesong 53,336
53,335
Executiveslocked-upshares
Shares unlock every
| year takes 25% of the |
total shares holding
Li F ang 29,824
9,942
39,766
Executiveslocked-upshares
Found more in“Notice of SeniorExecutive
on Jucha o Websitedated 2 June 2018
Yao Xiaopeng 33,288
| Resignation” released | ||
33,289
Executiveslocked-upshares
Shares unlock every
| year takes 25% of the |
total shares holdingTotal
13,431,785
| 13,548,232 |
13,441,727
13,558,174
-- --
II. Securities issuance and listing
□ Applicable √ Not applicable
III. Amount of shareholders and particulars about shares holding
In ShareTotal common stock
shareholders in reportingperiod-end
71,459
Total preference shareholder swith voting rights recovered atend of reporting period (ifapplic a bl e ) (found in note8)
Particulars about shares held above 5% by common shareholders or top ten common shareholdersFull name of Shareholders
Nature ofshareholder
Proporti
on ofshares
held
shares hold at
the end ofreport pe ri o d
Changes in
reportperiod
Amount ofrestrictedcommonshares h eld
Amount ofun-
commonshares h eld
| restricted | Number of share |
pledged/frozenState of
share
Amoun
tShenzhe n Ag ricultura l Products
Co., Ltd
Other19.09%
| 94,832,294 |
| 15,384,832 |
79,447,462
Shenzhen Fude State-OwnedCapital Operation Co., Ltd.
Other16.00%
| 79,484,302 |
79,484,302
| 13,431,784 |
66,052,518
Sun Huiming
Domesticnatureperson
0.69%
| 3,403,262 |
3,403,262
Hu Xiangzhu
Domesticnatureperson
0.45%
| 2,238,400 |
328,400
2,238,400
Zhou Jun
Domesticnatureperson
0.33%
| 1,636,790 |
1,636,790
1,636,790
Central H uijin Asset ManagementCo., Ltd.
State-
legal person
0.30%
| owned | 1,472,625 |
1,472,625
Li Qian
Domesticnatureperson
0.26%
| 1,278,311 |
-4,367
| 1,278,311 |
Ye Xiuxia
Domesticnatureperson
0.20%
| 1,000,230 |
1,000,230
Chen Xia n pi ng
Domesticnatureperson
0.20%
| 990,000 |
990,000
Gu Fengyuan
Domesticnatureperson
0.19%
| 950,300 |
950,300
950,300
Strategy investors or general corporation comes
(if appl icable) (see note 3)
N/A
| top 10 common shareholders due to rights issue |
| Explanation on associated relationship among |
the aforesai d shareholders
Agricultural Products indirectly through Fude Capital; the Company
| was not aware of any related relationship between other sharehold ers 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 heldShareholders’ name
Amount of un-restrict common shares held at
Period-end
Type of sharesType Amount
Shenzhen Agricultural Products Co., Ltd 79,447,462
RMB commonshares
| 79,447,462 |
Shenzhen Fude State-Owned Capital OperationCo., Ltd.
66,052,518
RMB commonshares
| 66,052,518 |
Sun Huiming 3,403,262
Domesticallylisted foreignshares
| 3,403,262 |
Hu Xiangzhu 2,238,400
RMB commonshares
| 2,238,400 |
Zhou Jun 1,636,790
RMB commonshares
| 1,636,790 |
Central H uijin Asset Management Co., Ltd. 1,472,625
RMB commonshares
| 1,472,625 |
Li Qian 1,278,311
RMB commonshares
| 1,278,311 |
Ye Xiuxia 1,000,230
RMB commonshares
| 1,000,230 |
Chen Xia n pi ng 990,000
RMB commonshares
990,000
Gu Fengyuan 950,300
RMB commonshares
950,300
| Expiation on associated relationship or |
consistent actors within the top 10 un-
shareholders and between top 10 un-
| restrict |
shareholders and top 10 shareholders
Shenzhen SASAC directly holds 100% equity
Agricultural Products indirectly through Fude Capital; the Company
| was not aware of any related relationship between other sharehold ers above, and whether they |
belonged to parties acting in concert as defined by the Acquis
Method of Listed Company.Explanation on top 10 shareholders involvingmargin busin es s ( if applicable) (see note 4)
N/AWhether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back
agreement dealing in reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have nobuy-back agreement dealing in reporting period.
IV. Change of controlling shareholder or actual controller
Changes of controlling shareholders in reporting period
√ Applicable □ Not applicable
New controlling shareholder Shenzhen Fude State-Owned Capital Operation Co., Ltd.Date of chang e 2018-04-03
Query index in appointed website
”Notice of State-owned Shares Tra nsf er for Free”(NoticeNo.:2018-27) released on Juchao Webs ite
Disclos ure date in appointed website 2018-04-04Changes of actual controller in reporting period
□ Applicable √ Not applicable
The Company had no changes of actual controller in reporting period
Section VII. Preferred S t ock
□ 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
Name
Title
Post-ho
ldingstatus
Sharesheld atperiod-begin (Shar e)
Increasing
in thisperiod(Share)
| shares h eld | Decreasing shares h eld |
in thisperiod(Share)
Sharesheld atperiod-end
(Share)
Number ofrestricted
sharesgranted atperiod-begin
(share)
Number ofrestricted
sharesgranted inthis period
(share)
Number ofrestrict ed shares
granted atperiod-end
(share)Yan
Zesong
Directo r, GM
Current
ly inoffice
| 71,114 |
71,114
| 53,336 |
-1
| 53,335 |
Li F ang
Deputy partysecretary,deputy SCID,Deputy GM
Officeleaving
| 39,766 |
39,766
| 29,824 |
9,942
| 39,766 |
YaoXiaopeng
Deputy GM
Currently inoffice
| 44,385 |
44,385
| 33,288 |
| 33,289 |
Total -- --
| 155,265 |
155,265
116,448
9,942
| 126,390 |
II. Changes of directors, supervisors and senior executives
√ Applicable □ Not applicable
Name Position Type Date CausesWang Li Director Election 2018-05-15 Job transferNi Yue Director Election 2018-05-15 Job transferWang Huimin Supervisor Election 2018-05-15 Job transferLiu Zhengyu Director Resignation 2018-04-13 Job transferHuang Yu Director Resignation 2018-04-13 Job transferLi Xinjian Supervisor Resignation 2018-05-15 Job transfer
Li F ang
SCID, Deputy GM
Dismiss 2018-05-31 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 r eport approved for released or fail to cash in full on dueNo
Section X . F inancial Report
I. Audit reports
Whether the sem i-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 SheetPrepared by Shenzhen Shenbao Industrial Co., Ltd.
2018-06-30
In RMBItems Ending balance Opening balanceCurrent assets:
Monetary fund
| 223,346,666.44 | 255,961,650.41 |
Settlement provisions
Capital lent
Financial assets measured by fair
value and with variation reckoned intocurren t g ains/losses
| 1,173,950.05 | 1,599,668.20 |
Derivative fi nancial assets
Notes recei vable
Account receivable
| 65,057,127.05 | 77,193,068.03 |
Acc ount pa i d in advance
| 4,269,088.68 | 11,787,432.82 |
Insurance receivable
Reinsurance receivables
Contract reserve of reinsurance
receivable
Interest receivable
Dividends receivable
Other receivables
| 23,327,599.67 | 23,311,599.67 |
Purchase restituted finance asset
深圳市深宝实业股份有限公司2018年半年度报告全文Inventory
| 162,120,133.29 | 155,306,108.94 |
Assets hel d f or sale
Non-current assets due within one
year
Other current assets
| 32,071,685.68 | 2,758,494.99 |
Total current assets
| 511,366,250.86 | 527,918,023.06 |
Non-current assets:
Loans and payments on behalf
Available-for-sale financial assets
| 57,500.00 | 57,500.00 |
Held-to-maturity investments
Long-term receivables
Long-term equity invest ment
| 5,063,724.67 | 5,248,629.66 |
Investment property 18,165,479.87
| 18,401,275.03 |
Fix assets
| 303,675,729.05 | 313,742,404.72 |
Construction in process
| 864,175.33 | 134,918.91 |
Proj ect mater ials
Disposal of fixed assets
Productive biological assets
| 411,925.10 | 416,771.28 |
Oil and natural gas assets
Intangible assets
| 183,861,850.82 | 187,321,246.43 |
Research and development costs
| 1,308,711.37 |
Goodwill
Long-term deferred expen s es
| 9,494,951.88 | 11,136,767.80 |
Deferred income tax assets
| 5,479,370.41 | 5,524,575.14 |
Other non-current assets 734,465.84
| 484,108.52 |
Total non-current assets
| 529,117,884.34 | 542,468,197.49 |
Total assets
| 1,040,484,135.20 | 1,070,386,220.55 |
Current liabilities:
Short-term loans
| 10,000,000.00 |
Loan from cen tral bank
Absorbing deposit and interbank
deposit
Capital borrowed
value and with variation reckoned into
| Financial liability measured by fair |
curren t g ains/losses
Derivative financial liability
Notes payable
Accounts payable
| 26,880,720.28 | 23,546,074.15 |
Accounts received in advance
| 3,762,920.01 | 2,866,288.61 |
Selling financial asset of
repurchase
Commission charge and
commission payable
Wage payable
| 9,686,311.51 | 14,385,332.90 |
Taxes payable
| 6,573,488.08 | 6,605,186.44 |
Interest payable
Divi de nd pa yable
| 2,909,182.74 | 2,909,182.74 |
Other accounts payable
| 33,918,453.99 | 32,812,938.61 |
Reinsurance payables
Insurance contract reserve
Securi ty trading of agency
Securi ty sales of agency
Liability held for sale
Non-current liabilities due within
one year
Other current liabilities
Total current liabilities
| 83,731,076.61 | 93,125,003.45 |
Non-current liabilities:
Long-term loans
Bonds payable
Including: preferred stock
Perpet ual capital
securities
Long-term account payable
Long-term wages payable
Special accounts payable
Accrual liabilities
Deferred income
| 11,725,164.61 | 12,863,139.81 |
Deferred income tax liabilities
| 1,100,382.37 | 1,244,747.03 |
深圳市深宝实业股份有限公司2018年半年度报告全文Other non-current liabilities
Total non-current liabilities
| 12,825,546.98 | 14,107,886.84 |
Total liabilities
| 96,556,623.59 | 107,232,890.29 |
Owners’ equity:
Share capital
| 496,782,303.00 | 496,782,303.00 |
Other equity instrument
Including: preferred stock
Perpet ual capital
securities
Capital reserve
| 358,999,356.28 | 358,999,356.28 |
Less: Inventory shares
Other comp rehensive income
Reasonable reserve
Surplus reserve
| 54,736,482.14 | 54,736,482.14 |
Provision of general risk
Retained profit
36,402,435.91
| 18,155,796.84 |
Total owners’ equity attributable toparent Company
| 928,673,938.26 | 946,920,577.33 |
Minority interests
| 15,253,573.35 | 16,232,752.93 |
Total owners’ equity
| 943,927,511.61 | 963,153,330.26 |
Total liabilities and owner’s equity
1,070,38
| 1,040,484,135.20 | 6,220.55 |
Legal Representative: Zheng YuxiPerson in charge of accounting works: Wang ZhipingPerson in charge of accounting institute: Xu Qiming
2. Balance Sheet of Parent Company
In RMBItems Ending balance Opening balanceCurrent assets:
Monetary fund
| 204,909,638.50 | 239,662,344.24 |
Financial assets measured by fair
value and with variation reckoned intocurren t g ains/losses
| 1,173,950.05 | 1,599,668.20 |
深圳市深宝实业股份有限公司2018年半年度报告全文Derivative fi nancial assets
Notes recei vable
Account receivable 30,642,294.02
| 53,950,930.37 |
Account paid in advance
| 2,000.00 | 2,000.00 |
Interest receivable
Dividends receivable
Other receivables
| 175,501,929.20 | 163,404,561.75 |
Inventory
| 5,565,296.97 | 4,963,517.93 |
Assets hel d f or sale
Non-current assets due within one
year
Other current assets
| 30,022,990.25 |
Total current assets
| 447,818,098.99 | 463,583,022.49 |
Non-current assets:
Available-for-sale financial assets
Held-to-maturity investments
Long-term receivables
Long-term equity investment
| 921,321,502.00 | 921,506,982.37 |
Investment property
| 18,165,479.87 | 18,401,275.03 |
Fix assets
| 31,999,586.52 | 32,560,534.94 |
Construction in process
Proj ect mater ials
Disposal of fixed assets
Productive biological assets 4
| 11,925.10 | 416,771.28 |
Oil and natural gas assets
Intang ible assets
| 6,963,913.95 | 7,264,135.59 |
Research and development costs
Goodwill
Long-term deferred expen s es
| 516,479.28 | 623,337.06 |
Deferred income tax assets
3,395,295.39
| 3,446,486.27 |
Other non-current assets
Total non-current assets
| 982,825,372.99 | 984,168,331.66 |
Total assets
| 1,430,643,471.98 | 1,447,751,354.15 |
Current liabilities:
深圳市深宝实业股份有限公司2018年半年度报告全文Short-term loans
| 10,000,000.00 |
value and wi th variation reckoned intocurren t g ains/losses
| Financial liability measured by fair |
Derivative financial liability
Notes payable
Accounts payable
| 43,762,494.53 | 65,683,781.46 |
Accounts received in advance
| 197,695.57 | 194,269.96 |
Wage payable
| 3,384,755.58 | 6,577,772.01 |
Taxes payable
| 2,487,005.15 | 2,832,009.17 |
Interest payable
Divi de nd pa yable
| 2,909,182.74 | 2,909,182.74 |
Other accounts payable
| 256,275,316.62 | 225,624,530.71 |
Liability held for sale
Non-current liabilities due within
one year
Other current liabilities
Total current liabilities
| 309,016,450.19 | 313,821,546.05 |
Non-current liabilities:
Long-term loans
Bonds payable
Including: preferred stock
Perpet ual capital
securities
Long-term account payable
Long-term wages payable
Special accounts payable
Accrual liabilities
Deferred income
| 46,684.60 | 47,239.24 |
Deferred income tax liabilities
| 23,220.99 | 129,650.53 |
Other non-current liabilities
Total non-current liabilities
| 69,905.59 | 176,889.77 |
Total liabilities
| 309,086,355.78 | 313,998,435.82 |
Owners’ equity:
Share capital
| 496,782,303.00 | 496,782,303.00 |
深圳市深宝实业股份有限公司2018年半年度报告全文Other equity instrument
Including: preferred stock
Perpet ual capital
securities
Capital reserve
382,444,482.45
| 382,444,482.45 |
Less: Inventory shares
Other comp rehensive income
Reasonable reserve
Surplus reserve
| 54,736,482.14 | 54,736,482.14 |
Retained profit
| 187,593,848.61 | 199,789,650.74 |
Total owners’ equity
| 1,121,557,116.20 | 1,133,752,918.33 |
Total liabilities and owner’s equity
| 1,430,643,471.98 | 1,447,751,354.15 |
3. Consolidated Profit Statement
In RMBItem Amount in this period Amount in last periodI. Total operating income
| 136,721,215.40 | 138,158,382.95 |
Including: Operating income
138,158
| 136,721,215.40 | ,382.95 |
Interest income
Insurance gained
Commission charge and
commission income
II. Total operating cost
| 155,026,741.38 | 159,770,044.15 |
Including: Operating cost
| 98,142,437.41 | 104,400,839.32 |
Interest ex pense
Commission charge and
commission expense
Cash surrender value
Net amount of expense of
compensation
insu r ance contract reserve
| Net amount of withdrawal of |
Bonus expense of guarantee
slip
Reinsurance expense
Operating tax and extras
| 2,699,973.08 | 2,454,733.49 |
深圳市深宝实业股份有限公司2018年半年度报告全文Sales expenses
| 18,475,423.94 | 21,174,407.31 |
Administration expenses
| 37,057,054.07 | 33,082,783.76 |
Financial expenses -
-
| 1,547,896.32 | 1,533,397.02 |
Losses of devaluation of
asset
| 199,749.20 | 190,677.29 |
Add: Changing income of fair
value(Loss is listed with “-”)
-
-
| 425,718.15 | 990,762.24 |
Investmen t income (Loss is
listed with “-”)
-
| 184,904.99 | 1,093,417.06 |
Including: Investment income
on affiliated Company and joint venture
-184,904.99
-
Exchange i ncome (Loss is
listed with “-”)
| 159,244.04 | |
Income from assets disposal
(Loss is listed with “-”)
-1,339.93
-
| 21,015.26 |
Other income
| 826,872.02 |
III. Operating profit (Loss is listed with“-”)
-
-
| 18,090,617.03 | 21,530,021.64 |
Add: Non-operating income
| 69,507.48 | 1,011,697.45 |
Less: Non-operating expense
| 79,681.75 | 22,122.68 |
IV. Total Profit (Loss is listed with “-”) -
-
| 18,100,791.30 | 20,540,446.87 |
Less: Income tax expense
| 1,125,027.35 | 36,586.58 |
V. Net profit (Net loss is listed with “-”) -
-
| 19,225,818.65 | 20,577,033.45 |
(i) continuing operation net profit
(Net loss is listed with “-”)
-
-
| 19,225,818.65 | 20,577,033.45 |
(ii)dis-continuing operation net
profit (Net loss is listed with “-”)
Net profit attributable to owner’s of
parent Company
-
-
| 18,246,639.07 | 17,759,776.83 |
Minority shareholders’ gains and
losses
-
-
| 979,179.58 | 2,817,256.62 |
VI. N et aft er-tax of other comprehensiveincome
Net after-tax of other comprehensive
income attributable to owners of parentCompany
(I) Other comprehensive income
items which will not be reclassified
subsequently to profit of loss
1. Changes as a result of
re-measurement of net defined benefitplan liability or asset
2. Share of the other
comprehensive income of the investee
will not be reclassified subsequently toprofit and loss
| accounted for using equity method which |
(II) Other comprehensive income
items which will be reclassifiedsubsequently to profit or loss
1. Share of the other
comprehensive income of the investee
or loss
| accounted for using equity method which will be reclassified subsequently to profit |
2. Gains or losses arisi ng
from changes in fair value ofavailable-for-sale financial assets
3. Gains or losses arisi ng
from reclass ification of held-to-maturityinvestment as available-for-sale financialassets
of gains or losses arising from cash flowhedging instruments
| 4. The effect hedging portion |
5. T ranslation differences
arising on translation of foreign currencyfinancial statements
6.Other
Net after-tax of other comprehensive
income attributable to minorityshareholders
VII. Total comprehensive income -
-
| 19,225,818.65 | 20,577,033.45 |
Total comprehensive income
attributable to owners of parent Company
-
| 18,246,639.07 |
-
Total comprehensive income
attributable to minority shareholders
-
| 17,759,776.83 | |
| 979,179.58 |
-
VIII. Earnings per share:
深圳市深宝实业股份有限公司2018年半年度报告全文(i) Basic earnings per share -0.0367
-0.0357
(ii) Diluted earnings per share -0.0367
-0.0357
Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before combination, andrealized 0 Yuan at last period for combined party.
Legal Representative: Zheng YuxiPerson in charge of accounting works: Wang ZhipingPerson in charge of accounting institute: Xu Qiming
4. Profit Statement of Parent Company
In RMBItem Amount in this period Amount in last periodI. Operating income
49,271,727.89
| 67,228,720.81 |
Less: Operating cost
| 63,731,294.22 | 45,987,989.13 |
Operati ng tax and extras
| 292,769.77 | 37,532.38 |
Sales expenses
| 1,943,060.61 | 1,562,377.52 |
Administration expenses
| 14,366,353.12 | 9,942,760.18 |
Financial expenses -
-1,563,751.20
| 1,565,736.21 |
Losses of devaluation of asset
| 203,706.33 | 194,763.50 |
Add: Changing income of fair
value(Loss is listed with “-”)
-
-
| 425,718.15 | 990,762.24 |
Investmen t income (Loss is
listed with “-”)
-
| 185,480.37 | 1,095,403.43 |
Including: Investment income
on affiliated Company and joint venture
-
-
| 185,480.37 | 157,257.67 |
Income from assets
disposal(Loss is listed with “-”)
| 2,270.24 |
Other income 554.64
II. Operating profit (Loss is listedwith “-”)
-
-
| 12,353,370.91 | 6,783,032.19 |
Add: Non-operating income
| 53,528.63 |
Less: Non-operating expense 51.64
III. Total Profit (Loss is listed with“-”)
-
-
| 12,353,422.55 | 6,729,503.56 |
Less: Income tax expense -
-
| 157,620.42 | 298,881.44 |
IV. Net profit (Net loss is listed with“-”)
-
-6,430,622.12
| 12,195,802.13 |
(Net loss is listed with “-”)
-
| (i) continuing operation net profit | 12,195,802.13 |
-
(ii) dis-continuing operation net
profit (Net loss is listed with “-”)
| 6,430,622.12 | |
V. Net after-
income
| tax of other comprehensive |
(I) Other comprehensive income
items which will not be reclassifiedsubsequently to profit of loss
1. Changes as a result of
re-measurement of net defined benefitplan liability or asset
2. Share of the other
comprehensive income of the investeeacc ount e d for us ing equity methodwhich will not be reclassifiedsubsequently to profit and loss
(II) Other comprehensive income
items which will be reclassifiedsubsequently to profit or loss
1. Share of the other
comprehensive income of the investeeaccounted for using equity methodwhich will be reclassified subsequentlyto profit or loss
2. Gains or losses arisi ng
from changes in fair value ofavailable-for-sale financial assets
3. Gains or losses arisi ng
from reclas s ification of held-to-m
investment as available-for-salefinancial as sets
| aturity |
4. The effect hedging
portion of gains or losses arising fromcash flow hedging instruments
5. T ranslation differences
arising on translation of foreigncurren cy financial statements
深圳市深宝实业股份有限公司2018年半年度报告全文6.Other
VI. Total comprehensive income -
-
| 12,195,802.13 | 6,430,622.12 |
VII. Earnings per share:
(i) Basic earnings per share
(ii) Diluted earnings per share
5. Consolidated Cash Flo w Statem ent
In RMBItem Amount in this period Amount in last periodI. Cash flows arising from operatingactivities:
Cash received fr om selling
commodities and providing laborservices
| 178,673,382.75 | 146,109,487.53 |
Net incr ease of customer deposit
and interbank deposit
Net incr ease of loan from central
bank
Net incr ease of capital borrowed
from other financial institution
Cash received fr om original
insu r ance contract fee
business
| Net cash recei ved from reinsurance |
Net incr ease of insured savings
and investment
Net increase of amount from
disp osal financial assets that measuredby fair value and with variationreckoned into current gains/losses
Cash received fr om interest,
commission charge and commission
Net incr ease of capital borrowed
Net incr ease of returned business
capital
Write-back of tax received
| 893,445.54 | 582,422.91 |
Other cash received concerning
operating activities
| 4,991,347.26 | 6,348,302.37 |
Subtotal of cash inflow arising fromoperating activities
| 184,558,175.55 | 153,040,212.81 |
Cash paid for purchasing
commodit ies and receiving laborservice
| 103,282,399.62 | 110,998,020.02 |
Net incr ease of customer loans and
advances
Net incr ease of deposits in central
bank and int e r bank
Cash paid for original insurance
contract compensation
charge and com missi on
| Cash paid for interest, commission |
Cash paid for bonus of guarantee
slip
Cash paid to/for staff and workers
| 38,390,713.80 | 38,799,120.95 |
Taxes paid
| 10,981,751.13 | 33,095,652.63 |
Other cash paid concerning
operating activities
| 22,107,840.93 | 20,580,067.36 |
Subtotal of cash outflow arising fromoperating activities
| 174,762,705.48 | 203,472,860.96 |
Net cash flows arising from operatingactivities
-
| 9,795,470.07 | 50,432,648.15 |
II. Cash flows arising from investingactivities:
Cash received fr om recovering
investment
| 189,350,000.00 |
Cash received fr om investment
income
| 1,252,661.10 |
Net cash recei ved from disposal of
fixed, intangible and other long-termassets
| 8,600.00 | 31,780.00 |
Net cash received from disposal
of s ubsidiaries and other units
Other cash received concerning
investing activities
Subtotal of cash inflow from investingactivities
| 8,600.00 | 190,634,441.10 |
深圳市深宝实业股份有限公司2018年半年度报告全文Cash paid for purchasing fixed,
intang i ble a nd ot he r long-term assets
5,306,174.76
| 1,934,203.80 |
Cash paid for investment
| 30,000,000.00 | 270,000,000.00 |
Net incr ease of mortgaged loans
Net cash received from
subsidi a ri e s an d ot he r uni ts
Other cash paid concerning
investing activities
| Subtotal of cash outflow from investing |
activities
| 31,934,203.80 | 275,306,174.76 |
Net cash flows arising from investingactivities
-
-
| 31,925,603.80 | 84,671,733.66 |
III. Cash flows arising from financingactivities
Cash received fr om absorbing
investment
Includ ing: Cash received from
absorbing minority shareholders’investment by subsidiaries
Cash received fr om loans
| 10,000,000.00 |
Cash received from issuing bonds
Other cash received concerning
financing activities
Subtotal of cash inflow from financingactivities
| 10,000,000.00 |
Cash paid for settling debts
| 10,000,000.00 | 5,000,000.00 |
Cash paid for dividend and profit
distributing or interest paying
| 610,098.89 | 22,904,646.76 |
Including: Dividend and profit of
minority shareholder paid bysubsidiaries
Other cash paid concerning
financing activities
| Subtotal of cash outflow from financing |
activities
| 10,610,098.89 | 27,904,646.76 |
Net cash flow s ar ising from financingactivities
-
-
| 10,610,098.89 | 17,904,646.76 |
IV. Influence on cash and cash
-
| 125,248.65 | 67,341.47 |
equivalents due to fluctuation inexchange rateV. Net increase of cash and cashequivalents
-
-
| 32,614,983.97 | 153,076,370.04 |
Add: Balance of cash and cash
equival ents at the period -begin
| 255,961,650.41 | 358,564,242.83 |
VI. Balance of cash and cashequival ents at the period -end
| 223,346,666.44 | 205,487,872.79 |
6. Cash Flow Statement of Parent Company
In RMBItem Amount in this period Amount in last periodI. Cash flows arising from operatingactivities:
Cash received fr om selling
commodities and providing laborservices
| 99,228,621.54 | 70,267,796.87 |
Write-back of tax received
| 737,441.54 | 433,663.93 |
Other cash received concerning
operating activities
| 27,633,986.64 | 34,066,372.91 |
Subtotal of cash inflow arising fromoperating activities
| 127,600,049.72 | 104,767,833.71 |
Cash paid for purchasing
commodit ies and receiving laborservice
| 96,230,177.23 | 63,220,288.40 |
Cash paid to/for staff and workers
| 12,384,561.21 | 13,078,753.60 |
Taxes paid
| 2,194,673.02 | 15,149,260.25 |
Other cash paid concerning
operating activities
| 11,572,835.91 | 21,420,055.12 |
Subtotal of cash outflow arising fromoperating activities
112,
| 122,382,247.37 | 868,357.37 |
Net cash flows arising from operatingactivities
-
| 5,217,802.35 | 8,100,523.66 |
II. Cash flows arising from investingactivities:
Cash received fr om recovering
investment
| 189,350,000.00 |
Cash received fr om investment
| 1,252,661.10 |
income
Net cash recei ved from disposal of
fixed, intangible and other long-termassets
Net cash received from disposal
of subsidiaries and other units
| 31,000.00 |
Other cash received concerning
investing activities
Subtotal of cash inflow from investingactivities
| 190,633,661.10 |
Cash paid for purchasing fixed,
intang i ble a nd ot he r long-term assets
| 18,200.00 | 133,049.80 |
Cash paid for investment
| 30,000,000.00 | 275,500,000.00 |
Net cash received from
subsidi a ri e s an d ot he r uni ts
Other cash paid concerning
investing activities
| Subtotal of cash outflow from investing |
activities
| 30,018,200.00 | 275,633,049.80 |
Net cash flows arising from investingactivities
-
-
| 30,018,200.00 | 84,999,388.70 |
III. Cash flows arising from financingactivities
Cash received from absorbing
investment
Cash received fr om loans
| 10,000,000.00 |
Cash received from issuing bonds
Other cash received concerning
financing activities
Subtotal of cash inflow from financingactivities
| 10,000,000.00 |
Cash paid for settling debts
| 10,000,000.00 | 5,000,000.00 |
Cash paid for dividend and profit
distributing or interest paying
| 28,710.00 | 22,904,646.76 |
Other cash paid concerning
financing activities
| Subtotal of cash outflow from financing |
activities
10,028,710.00
| 27,904,646.76 |
Net cash flow s ar ising from financingactivities
-
-
| 10,028,710.00 | 17,904,646.76 |
IV. Influence on cash and cashequivalents due to fluctuation inexchange rate
-8,996.28
| 76,401.91 |
V. Net increase of cash and cashequivalents
-34,752,705.74
-
| 111,013,555.40 |
Add: Balance of cash and cash
equival ents at the period -begin
| 239,662,344.24 | 305,477,853.97 |
VI. Balance of cash and cashequival ents at the period -end
| 204,909,638.50 | 194,464,298.57 |
7. Statement of Changes in Owners’ Equity (Consolidated)
Current period
In RMB
Items
Current periodOwners’ equity attributable to parent Company
Minorit
yinterests
Total
| owners’ |
equityShare
capital
Other equity
instrument
Capitalreserve
Less:
Invento
ryshares
Othercompre
| hensive |
income
Reason
ablereserve
Surplusreserve
Provisio
n ofgeneral
risk
Retained profit
Prefer
redstock
Perpet
ualcapita
lsecuri
ties
Other
I. Balance at theend of t he last year
496,782,303.
358,999,356.28
54,736,482.14
| 36,402, |
435.91
| 16,232, |
752.93
| 963,153 |
,330.26
Add:
Changes ofacc ount ing pol ic y
Error
corre c t ion of t helast period
Enterprisecom bi ne under t hesame control
Other
II. Balance at thebeginning of thisyear
496,782,303.
358,999,356.28
54,736,482.14
| 36,402, |
435.91
| 16,232, |
752.93
| 963,153 |
,330.26
III. Increase/Decrease in thisyear (Decrease islisted with “-”)
-
639.07
-979,17
9.58
-
| 19,225, |
818.65
(i) Totalcomprehensiveincome
-
639.07
-979,17
9.58
-
| 19,225, |
818.65
(ii) Owners’devoted anddecreased capital
1.Common sharesinvested byshareholders
2. Capital invested
equity instruments
3. Am ountreckoned into
share-basedpayment
| owners equity with |
4.Other
(III) Profitdistribution
1. Withdrawal ofsurplus reserves
2. Withdrawal ofgeneral ri skprovisions
3. Distribution forowners (orshareholders)
4.Other
(IV) Carryingforward internalowners’ equity
1. Capital reserves
conversed tocapital ( s harecapital)
conversed tocapital ( s harecapital)
| 2. Surplus reserves | |||||||||||||
| 3. Remedying loss |
with surplusreserve
4.Other
(V) Reas onablereserve
1. Withdrawal inthe report period
2. Usage in thereport period
(VI)Others
IV. Balance at theend of the reportperiod
496,782,303.
358,999,356.28
54,736,482.14
| 18,155, |
796.84
| 15,253, |
573.35
| 943,927,511.61 |
Last Year
In RMB
Items
Last periodOwners’ equity attributable to parent Company
Minorit
yinterest
s
Total
equityShare
capital
owners’
Other equity
instrument
Capitalreserve
Less:
Invento
ryshares
Othercompre
| hensive |
income
Reason
ablereserve
reserve
Provisio
n ofgeneral
risk
Retained profit
Prefer
redstock
Perpet
ualcapita
lsecuri
ties
Other
I. Balance at theend of t he last year
| Surplus | ||
451,620,276.
367,172,017.79
54,736,482.14
158,239,612.94
| 17,970, |
173.99
| 1,049,738,562. |
Add:
Changes ofacc ount ing pol ic y
深圳市深宝实业股份有限公司2018年半年度报告全文Error
corre c t ion of t helast period
Enterprisecom bi ne under t hesame control
Other
II. Balance at thebeginning of thisyear
451,620,276.
367,172,017.79
54,736,482.14
158,239,612.94
| 17,970, |
173.99
| 1,049,738,562. |
III. Increase/Decrease in thisyear (Decrease islisted with “-”)
45,162,027.0
-8,172,6
61.51
-121,837,177.0
-1,737,421.06
-
232.60
(i) Totalcomprehensiveincome
-54,094,
136.23
-7,158,791.96
-
928.19
(ii) Owners’devoted anddecreased capital
-8,172,6
61.51
| 5,421,370.90 |
-2,751,2
1.Common sharesinvested byshareholders
| 90.61 | ||||||||||||
| 640,000 |
.00
| 640,000 |
.00
2. Capital investedby holders
| of other |
equity instruments
3. Am ountreckoned into
share-basedpayment
| owners equity with |
4.Other
-8,172,6
61.51
| 4,781,370.90 |
-3,391,2
(III) Profitdistribution
45,162,027.0
| 90.61 | |||||||||||
-67,743,
040.80
-
013.80
1. Withdrawal ofsurplus reserves
2. Withdrawal of
general ri skprovisions3. Distribution forowners (orshareholders)
45,162,027.0
-67,743,
040.80
-
013.80
4.Other
(IV) Carryingforward internalowners’ equity
1. Capital reservesconversed tocapital ( s harecapital)
| 2. Surplus reserves |
conversed tocapital ( s harecapital)
| 3. Remedying loss |
with surplusreserve
4.Other
(V) Reas onablereserve
1. Withdrawal inthe report period
2. Usage in thereport period
(VI)Others
IV. Balance at theend of the reportperiod
496,782,303.
358,999,356.28
54,736,482.14
36,402,435.91
| 16,232, |
752.93
| 963,153 |
,330.26
8. Statement of Changes in Owners’ Equity (Parent Company)
Current period
In RMBItems
Current periodShare
capital
Other equity instrument
Capitalreserve
Less:
Inventory
shares
Othercomprehe
nsive
Reasonable reserve
| Inventory |
Surplusreserve
Retained profit
Totalowners’equity
Preferred stock
Perpetu
al
Other
capitalsecuriti
es
income
I. Balance at theend of t he last year
496,782,
303.00
| 382,444,4 |
82.45
54,736,48
2.14
| 199,789 |
,650.74
| 1,133,752 |
,918.33
| Add: Changes |
of accountingpolicy
Error
corre c t ion of t helast period
Other
II. Balance at thebeginning of thisyear
496,782,
303.00
| 382,444,4 |
82.45
54,736,48
2.14
| 199,789 |
,650.74
| 1,133,752 |
,918.33
III. Increase/Decrease in thisyear (Decrease islisted with “-”)
-
802.13
-
(i) Totalcomprehensiveincome
| 12,195,802.13 | ||||||||||
-
802.13
-
(ii) Owners’devoted anddecreased capital
| 12,195,802.13 | ||||||||||
1.Common sharesinvested byshareholders
2. Capital invested
equity instruments
3. Am ountreckoned into
share-basedpayment
| owners equity with |
4.Other
(III) Profitdistribution
1. Withdrawal of
surplus reserves2. Distribution forowners (orshareholders)
3．Other
(IV) Carryingforward internalowners’ equity
1. Capital reservesconversed tocapital ( s harecapital)
| 2. Surplus reserves |
conversed tocapital ( s harecapital)
| 3. Remedying loss |
with surplusreserve
4.Other
(V) Reas onablereserve
1. Withdrawal inthe report period
2. Usage in thereport period
(VI)Others
IV. Balance at theend of the reportperiod
496,782,
303.00
| 382,444,4 |
82.45
54,736,48
2.14
| 187,593 |
,848.61
| 1,121,557 |
,116.20
Last Year
In RMB
Items
Last Period
Sharecapital
Other equity instrument
Capitalreserve
Less:
Inventory
shares
Othercomprehe
nsiveincome
Reasonable reserve
| Inventory |
Surplusreserve
Retained profit
Totalowners’equity
Preferred stock
Perpetu
alcapitalsecuriti
es
Other
I. Balance at theend of t he last year
451,620,
276.00
| 382,444,4 |
82.45
54,736,48
2.14
| 283,746 |
,524.30
| 1,172,547 |
,764.89
| Add: Changes |
of accountingpolicy
Error
corre c t ion of t helast period
Other
II. Balance at thebeginning of thisyear
451,620,
276.00
| 382,444,4 |
82.45
54,736,48
2.14
| 283,746 |
,524.30
| 1,172,547 |
,764.89
III. Increase/Decrease in thisyear (Decrease islisted with “-”)
45,162,0
27.00
-
873.56
-
(i) Totalcomprehensiveincome
| 38,794,846.56 | ||||||||||
-
832.76
-
(ii) Owners’devoted anddecreased capital
| 16,213,832.76 | ||||||||||
1.Common sharesinvested byshareholders
2. Capital invested
equity instruments
3. Am ountreckoned into
share-basedpayment
| owners equity with |
4.Other
(III) Profitdistribution
45,162,0
27.00
-
040.80
-
1. Withdrawal ofsurplus reserves
| 22,581,013.80 | ||||||||||
2. Distribution forowners (or
45,162,0
27.00
-
040.80
-
shareholders)
3．Other
(IV) Carryingforward internalowners’ equity
1. Capital reservesconversed tocapital ( s harecapital)
| 2. Surplus reserves |
conversed tocapital ( s harecapital)
| 3. Remedying loss |
with surplusreserve
4.Other
(V) Reas onablereserve
1. W ithdrawal inthe report period
2. Usage in thereport period
(VI)Others
IV. Balance at theend of the reportperiod
496,782,
303.00
| 382,444,4 |
82.45
54,736,48
2.14
| 199,789 |
,650.74
| 1,133,752 |
,918.33
III. Basic situation of Company
1. The history of the CompanyShenzhen Shenbao Industrial Co., Ltd. (the “Company” or “Company” for short), formerly named ShenzhenShenbao Canned Food Company, obtained approval (Document (1991) No.978) from Shenzhen MunicipalPeople’s Government to change to the present name as on 1 August 1991.Then with the approval (Document(1991)No.126) from People’s Bank of China, the Company began to list on Shenzhen Stock Exchange. Thecertificate 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 bonusshare and one allotted share were dispatched for each 10 shares held by its shareholders, thus totally 20,878,845
shares were increased. Subsequently, one bonus share was dispatched for each 10 shares held by shareholdersupon the basis of total share capital as at the end of 1996, and capitalizing of capital reserves was carried out atone to ten basis, thus totally 27,784,614 shares were increased. In 2001, based on the total share capital as at theend of 1999, three shares were allotted for each 10 shares held by shareholders, and totally 15,215,404 shareswere allotted. The registered capital of the Company amounts to RMB181, 923,088.
On 22 June 2011, the Company privately offering 68,977,066 shares of RMB ordinary share (A share) to targetinvestors with issuing price of RMB 8.70 each while book value of RMB 1.00. Total monetary capital RMB600,100,474.20 was raised. Change procedures of industrial and commerce has completed on 12 July 2011.Register capital of the Company changed as RMB 250,900,154.00.
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
st
D ecember 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 share s dated 31
st
D ecember 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
st
D ecember 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. Sharescapital increased to 496,782,303 shares after bonus stock distributed.
End as June 30, 2018, the total share capital of the Company was 496,782,303 shares.
Register address of the Company: 8/F, B Section, 4
th
Tower, Software Industrial Base, South Technology Park,Xuefu Street, Yuehai Avenue, Nanshan District, Shenzhen, P.R. China.
2. Industry natureThe Company is the food and beverage industry.
3. Business scopeBusiness 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 and
exclusive commodity); import and export business; engaged in real estate development and operation in the landlegally obtained; lease and sales of the self-owned property and property management.” (as for the projectssubject to examination and approval regulated by the state laws, administrative regulations and state council,approval should be obtained before operation). Business in license: wholesale of prepackaged food (excludingreheating prepackaged food) (in non-physical way).
4. Report approval for the financial statementThe statement has been approved by all directors of the Company dated 24 August 2018 for reporting.
Consolidated financial statement scope
Totally 19 subsidiaries are included in consolidate financial statement, mainly including:
Subsidiaries Type Level
(%)
| Shareholding ratio | Voting rights ratio (%) | ||
| Shen zhen Shenbao Huacheng Science and Technology Co.,Ltd. (Shenbao Huacheng |
for short)
Wholly-owned
subsidiary
First grade
100 100
for short)
Wholly-owned
subsidiary
First grade
100 100
Ju Fang Yong Tea Industry Co., Ltd. in WuyuanCounty (Wuyuan Ju Fang Yong
Shen zhen Shenbao Sanjing Food & BeverageDevelopment Co., Ltd.
(She nba o Sanjing for short)
Wholly-owned
subsidiary
First grade
100 100
| Shen zhen Shenbao Sanjing Food & Beverage Development Co., Ltd. |
| Huizhou Shenbao Science & Technology Co., Ltd. (Huizhou Shenbao Science & Technology |
for short)
Wholly-owned
subsidiary
First grade
100 100
for short)
Wholly-owned
subsidiary
First grade
100 100
| Shenzhen Shenbao Properties Management Co., Ltd.( She nbao Properties |
| Shenzhen Shenbao Industrial & Trading Co., Ltd. |
(Shenbao Industrial & Trading for short)
Wholly-owned
subsidiary
First grade
100 100
Hangzhou Ju Fang Yong for short)
Wholly-owned
subsidiary
First grade
100 100
Hangzhou Ju Fang Yong Holding Co., Ltd.(
Shenzhen Shenbao Technology Center Co.,Ltd.
(Shenbao Technology Center for short)
Wholly-owned
subsidiary
First grade
100 100
| Shenzhen Shenbao Technology Center Co., Ltd. |
| Shenzhen Shenshenbao Investment Co., Ltd. |
(Shenshenbao Investment for short)
Wholly-owned
subsidiary
First grade
100 100
(Yunnan Supply Chain for
| short |
)
Wholly-owned
subsidiary
First grade
100 100
(Huizhou Shenbao
| Food |
for short)
Wholly-owned
subsidiary
First grade
100 100
for short)
Holding subsidiary First grade
55 55
| Yunnan Pu’er Tea Trading Center Co., Ltd. (Pu’er Tea Trading C enter |
| Mount Wuyi Shenbao Rock Tea Co., Ltd. (Shenbao Rock Tea |
for short)
Wholly-owned
subsidiary
Second grade
100 100
Wholly-owned Second grade 100 100
(Fuhait ang Ecological for s hort)) subsidiary
Ltd.Hangzhou Chunshi Network Technology Co.,Ltd.
(
Chunshi Network for short)
Wholly-owned
subsidiary
Second grade
100 100
| Hangzhou Chunshi Network Technology Co.,Ltd. ( |
| Shenzhen Shenshenbao Tea Culture Management Co., Ltd. |
(Shenshenbao Tea Culture for short)
Wholly-owned
subsidiary
Second grade
100 100
(Jufangyong
| Trading |
for short)
First grade Second grade
60 60
a-Shop Co., Ltd. (Shenbao
| Tea |
-Shop for short)
Wholly-owned
subsidiary
Second grade
100 100
for short)
Wholly-owned
subsidiary
Second grade
100 100
1. Subsidiary excluded in consolidated financial statement(1) Shenzhen Shenbao (Liaoyuan) Industrial Company has established for a long time without normal operation,Industry and Commerce Bureau has canceled the business license of the Company, the long-term equityinvestment for the Company has been accrual for impairment totally. Financial statement of the Company is out ofthe consolidation range.
(2) Huizhou Baomanan Biotechnology Co., Ltd. (Former S henzhen Baomanan Biotechnology Co., Ltd.)is asubsidiary of the Company, set up by Huizhou Shenbao Technology and Guangzhou Shen Guangshengbiotechnology limited liability Company, according to the contract signed by both parties on March 28, 2014,Huizhou Shenbao Technology does not have the right to manage this Company, thus it is accounted by the equitymethod.
(3) Shenzhen Shichumingmen Restaurant Management Co., Ltd. (hereinafter referred to as "ShichumingmenCompany"), set up by a subsidiary of the Company Shenshenbao tea culture and Shenzhen Investment Co., Ltd. F.according t o Articles of Association, the Board of Directors to vote by one vote one person. Attendees to theboard of directors should be more than 2/3 of the whole number of directors, and all participants approve theresolution thus it is effective. The Company only accounted for 3/ 5 of the voting rights in ShichumingmenCompany, control can not be reached, so it is accounted for by the equity method.
IV. Basis of preparation of financial statements
1. Basis of preparationBased on continuing operation, the Company conducts recognition and measurement according to actual
occurrence of transactions and issues, pursuant to the accounting principles for enterprise-basic rules and specificaccounting principle as well as the application guidance for the accounting principles for enterprise, interpretationto the accounting principles for enterprise and other related requirements (hereinafter referred to as EnterpriseAccounting Principles) issued by the ministry of finance, on that basis, combining the Information Disclosure
Preparation Rules for Company P ublic Issuing Securities No.15-General Rules for Financial Report (amended in2014) of the CSRC for statement preparation.
2. Going concernThe Company was eval uated on continued viability of 12 months for the reporting period and found to have no
significant doubt. Accordingly, the financial statements have been prepared on the basis of going concernassumptions.
V. Major accounting policy, accounting estimation
Specific accounting policies and estimation attention:
Nil
1. Statement for observation of Accounting Standard for EnterpriseThe financial statements prepared by the Company are in accordance to requirements of Accounting Standard for
Enterpr ise, which truly and completel y reflect the infor mation rela ted to f inancial position, operational results andcash flow of the Company.
2. Accounting periodCalendar year is the accounting period for the Company, that is falls to the range starting from 1 January to 31
December.3. Operating cycle
Operating cycle of the Company was 12 months, and the operating cycle is the determining criterion for liquidityof assets and liabilities.
4. Standard currencyThe 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 samecontrol
1. If the terms, conditions, and economic impact of each transaction involved in business combinationachieved in stages fall within one or more of the following situations, such transactions will be accounted foras a package deal:
(1) Such transactions are entered into simultaneously or in the case of considering the impact of each other;(2) Such transactions as a whole in order to reach a complete business results;
(3) The occurrence of a transaction subject to that of at least one other transaction;(4) One transaction alone is not economic, but otherwise when considered with other transactions.
2. Business combination under the same controlThe assets a nd liabilities the Company acquired in a busi ness combination shall be measured in accordance withbook value of assets, liabilities (including the ultimate controlling party of goodwill acquired by the mergingparties and the formation of) stated in combined financial report of the ultimate controlling party on the mergerdate. The net book value of assets and the payment of the merger consideration in the merger book value (ornominal value of shares issued) shall be adjusted in the share premium of reserve capital. the share premium incapital reserve is not enough for deducting, retained earnings .
If the capital reserve is not sufficient to absorb the difference, any excess shall be adjusted against retainedearnings. In case there is existence of contingent consideration which needs to confirm projected liabilities orassets, then the difference between the projected liabilities or assets and settlement amount for consequentcontingent consideration is utilized to adjust capital reserve (capital premium or equity premium); in case ofinsufficient capital reserve, adjust retained earnings.
As for business combination realized through numbers of transactions, and if these transactions belong to a bundleof transactions, then each of them shall be accounted as a transaction to acquire controlling right; and if not belongto a bundle of transactions, then the difference between the initial investment cost of the long term equityinvestment as of the date on which the Company obtains controlling right and the carrying value of the long termequity investment prior to combination plus the carrying value of the new consideration paid for furtheracquisition of shares as of the combination date shall be used to adjust capital reserve; in case of insufficientcapital reserve, adjust retained earnings. For equity investment held prior to the combination date, the othercomprehensive income recognized due to calculation by equity method or based on recognition and measurementprinciples for financial instruments would not be accounted for temporarily until the Company disposes of thisinvestment on the same basis as the investee directly disposes of relevant assets or liabilities; other changes ofowners’ equity in the net assets of investee as recognized under equity method, except for net profit or loss, othercomprehensive income and profit distribution, shall not be accounted for until being transferred to current profitor loss when this investment is disposed of.
3. Business combination not under the same controlPurchase d ate refers to the date on which the Company actually obtains control over the acquiree, that is, the datewhen the acquiree’s net assets or control of production and business decisions are transferred to the Company.When satisfying the following conditions at the same time, the Company generally believes that the transfer ofcontrol rights has been achieved:
① The business merger contract or agreement has been approved by the Company’s internal authority.② Business merger matters need to be approved by the relevant national com petent authority, and approval has
been obtained.
③ The necessary procedures for the transfer of property rights have been completed.
④ The Company has paid most of the merger cost and has the ability and plan to pay the remaining amount.⑤ The Company has actually controlled the finance and operating policies of the acquiree, and enjoys
corresponding benefits and assumes corresponding risks.
Assets paid and liabilities taken for business combination on the acquisition date shall be measured at fair value.The difference between the fair value and book value is recognized in profit or loss.
Goodwill is rea lized b y the Company as for the difference between the combination cost and the fair value of therecognizable net assets of the acquiree acquired by acquirer in such business combination. In case that the abovecost is less than the above fair value even with re-review, then the difference shall be recorded in current gainsand losses.
As for the business combination not under the same control realized through several exchange transactions step bystep, part of the package deal, than carrying accounting treatment on transactions with controlling rights obtainedthrough vary transactions; as for non-package: for equity investment held prior to combination date which iscalculated under equity method, the sum between carrying value of the equity investment prior to acquisition dateand cost of additional investment made on the acquisition date is deemed to be the initial investment cost of thisinvestment. Other comprehensive income recognized for equity investment held prior to combination date underequity method shall be accounted for when the Company disposes of this investment on the same basis as theinvestee directly disposes of relevant assets or liabilities. In case that e quity invest ment held p rior to combinationdate is calculated based on recognition and measurement principles for financial instruments, then the fair value ofthis equity investment as of combination date plus new investment cost shall be deemed as initial investment cost.The difference between fair value and carrying value of the originally held equity interests and the accumulatedfair value movements as originally recorded in other comprehensive income shall be all transferred to investmentincome of the period in which the combination date falls.
4. Expenses related to the mergerAudit, 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 equitysecurities for business combination which can be directly attributable to the equity transaction shall be deductedfrom equity.
6. Methods for preparation of consolidated financial stat em ents1. Merger scope
The consolidation scope of the consolidated financial statements of the Company is fixed on the basis of control,and all subsidiaries have been consolidated.
2. Merger procedureThe Company edits the consolidated financial statements based on its own financial statements and thesubsidiaries’, as well as other relevant information. The consolidated financial statements hold the enterprisegroup as a whole accounting entity. It is recognized in accordance with relevant Accounting Standards,measurement and presentation requirements. Uniform accounting policies reflect the overall financial position ofthe Group's business, operating results 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 madewhen preparing consolidated financial statements according to the accounting policy and accounting period of theCompany.
Internal transactions between the Company and its subsidiaries and between subsidiaries to each other shall putimpact on the consolidated balance sheet, consolidated income statement, consolidated cash flow statement, theconsolidated shareholders' equity. The impact shall be offset when combing financial statements. If it is not thesame when you stand Enterprise Group and the angle of the Company or its subsidiaries as the accounting entityidentified on the same transaction, the business point of view shall be adjusted to the Group's transactions.
Subsidiary's equity, current net profits or losses and current comprehensive income belonging to minorityshareholders shall be listed respectively under item of owners’ equity in the consolidated balance sheet, item ofnet profit in profit sheet and item of total comprehensive income. Current loss minority shareholders of asubsidiary exceed the minority shareholders in the subsidiary's opening owners' equity share and the formation ofbalance, offset against minority interests.
For the subsidiaries acquired through business combination under common control, its assets and liabilities(including goodwill formed from ultimate controlling party acquiring the subsidiary to) shall be adjusted based onthe book value in the financial statements of the ultimate controlling party.
For the subsidiaries acquired through business combination under uncommon control, financial statements shallbe adjusted based on the fair value of the identifiable net assets on acquiring date.
1. Increase of subsidiary or businessDuring 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 profit
statement; cash flows of the subsidiaries or business from beginning to the end of reporting period shall beincluded into the consolidated cash flow statement. And relevant comparative items of comparable statement shallbe adjusted since reporting entity is controlled by the ultimate controller.
If additional investment and other reasons can lead investee to be controlled under the same control, all partiesshall be adjusted at the beginning when the ultimate controlling party starts control. Equity investments madebefore obtaining controlling right, relevant gains and losses and other comprehensive income as well as otherchanges in net assets confirmed during the latter date between point obtaining original equity and merger andmergered under the same control day to the combined day, shall be offset against the retained earnings or profit orloss of the comparative 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 ofthe subsidiaries or business from the acquisition date to the end of reporting period shall be included in theconsolidated profit statement; while cash flows shall be included into the consolidated cash flow statement.
Equity held from investee before acquisition date shall be measured at fair value of acquisition date if additionalinvestment and other reasons can lead investee to be controlled under the same control. Difference between thefair value and the book value is recognized as investment income. other comprehensive income and other owners'equity except for net profit or loss, other comprehensive income and the distribution of profits related to equityheld from investee before acquisition date, as well as relevant other comprehensive income associated with allother by changes in equity shall be included in current investment income, except for other comprehensive incomearising from change of net assets or net liabilities redefined by investee.
2. Disposal of subsidiaries or business1) The general approachDuring the reporting period, the Company carry out disposal of subsidiaries or business, revenue, expense andprofit of the subsidiary or business included in the consolidated profit statement from the beginning to the disposaldate; 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 theremaining equity, then subtracting net assets held from the former subsidiary from the acquisition date orcombination date initially measured in accordance with original stake and goodwill, the difference shall beincluded in investment income of the period losing controlling right. other comprehensive income and otherowners' equity except for net profit or loss, other comprehensive income and the distribution of profits related toequity held from investee before acquisition date, as well as relevant other comprehensive income associated withall other by changes in equity shall be included in current investment income, except for other comprehensive
income arising from change of net assets or net liabilities redefined by investee.
2) Step disposal of subsidiariesAs 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:
A. These transactions are made considering at the same time or in the case of mutual impact;B. These transactions only reach a complete business results when as a whole;C. A transaction occurs depending on the occurrence of at least one other transaction;D. Single transaction is not economical, but considered together with other transactions it is economical.If disposal of equity in subsidiaries lead the loss of control and the transactions can be seen as a package deal, theCompany will take accounting treatment of the transaction; however, before the loss of control the differencebetween 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 losingcontrolling right.
If disposal of equity in subsidiaries lead the loss of control and the transactions doesn’t form a package deal,equity held from subsidiary shall be accounted in accordance with relevant rules before losing controlling right,while in accordance with general accounting treatment when losing controlling right.
3. Purchase of a minority stake in the subsidiaryLong-term equity investmen t of the Company for the purchase of minority interests in accordance with the newlyacquired stake in the new calculation shall be entitled to the difference between the net assets from the acquisitiondate (or combination date) initially measured between the consolidated balance sheet adjustment capital balanceof the share premium in the capital reserve share premium insufficient, any excess is adjusted to retained earnings.
4. Disposal of equity in subsidiary without losing controlDisposal 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 consolidatedbalance sheet adjustment in the balance of the share premium, capital balance of the share premium insufficient,any excess is adjusted to retained earnings.
7. Classification of joint venture arrangement and accounting for joint operations1. Classification of joint venture arrangement
The Company c lassifies joint venture arrangement into joint operations and joint ventures based on the structure,legal form, agreed terms of the arrangement and other related facts and conditions.
Joint venture arrangement not concluded through separate entity is classified as joint operation; and thoseconcluded through separate entity are generally classified as joint ventures. However, joint venture arrangementwhich meets any of the following conditions as proven by obvious evidence and satisfies relevant laws and rulesis grouped as joint operation:
1. T he legal form of the arrangement shows that parties to the arrangement are entitled to and assume rights andobligations in respect of the relevant assets and liabilities.2. It is agreed by the terms of the arrangement that parties to the arrangement are entitled to and assume rights andobligations in respect of the relevant assets and liabilities.3. O ther related facts and conditions show that parties to the arrangement are entitled to and assume rights andobligations in respect of the relevant assets and liabilities. For insta nce, joint parties are entitled to almost all theoutput related to joint venture arrangement and settlement of the liabilities under the arrangement continues to relyon supports from the joint parties.
2. Accounting for joint operationsThe Company recognizes its proportion of interests in join t opera tion as rela ted to th e 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.
For injection to or disposal of assets of joint operations (other than those assets constituting business operation),gain or loss arising from the transaction is only recognized to the extent it is attributable to other parties to thejoint operation before the joint operation is sold to any third party. In case those assets injected or disposed satisfythe condition for asset impairment loss under Business Accounting Principle No.8-Assets Impairment, theCompany recognizes this loss in full.
For acquisition of assets from joint operations (other than those assets constituting business operation), gain orloss arising from the transaction is only recognized to the extent it is attributable to other parties to the jointoperation before the relevant assets are sold to any third party. In case that the acquired assets satisfy the conditionfor asset impairment loss under Business Accounting Principle No.8-Assets Impairment, the Company recognizesrelevant loss according to the proportion it assumes.
The Company e xercises no common control over joint operations. If the Company is entitled to relevant assets ofthe joint operation and assure relevant liabilities, it shall be accounted for under the above principle, otherwise itwould be accounted for under the relevant business accounting principles.
8. Recognition standards for cash and cash equivalentsWhen preparing cash flow statement, the Company recognized the stock cash and deposits available for payment
at any time as cash, and investments featuring with the following four characters at the same time as cashequivalents: short term (expire within 3 months commencing from purchase day), active liquidity, easy to convertto already-known cash, and small value change risks.
9. Foreign currency business and conversion of foreign currency statementFor the foreign currency business, the Company converts the foreign currency into RMB for book-keeping based
on spot exchange rate at date of trading occurred.
On balance sheet date, balance of foreign currency monetary items shall be converted based on the spot rate as atthe balance sheet date, and the arising exchange difference shall be recorded in current gains and losses other thanthose arising from the special foreign currency borrowings related to purchasing assets qualifying forcapitalization which is treated under the principle of borrowing expense capitalization. As for the foreign currencynon-monetary items measured in historical cost, conversion is still conducted with the spot rate as at thetransaction date, without any change to its functional currency. As for the foreign currency non-monetary itemsmeasured in fair value, conversion is conducted with the spot rate as at the date for determination of fair value,and the arising exchange difference shall be recorded in current gains and losses or capital reserve.
As for the foreign currency non-monetary items measured in fair value, conversion is conducted with the spot rateas at the date for determination of fair value, and the arising exchange difference shall be recorded in current gainsand losses or capital reserve.
10. Financial instrumentsFinancial instruments include financial assets, financial liabilities and equities instruments.
1. Categories of financial instrumentsAccording to the contract terms of the financial instrument issued and economic substance reflects by suchinstrument, not only in form of law, combine with purposes held for financial assets and liabilities, the Companycategorizes fina ncial assets and liability into different types: financ ial assets (or financial liabili ties) at fair valuethrough current gains and losses; accounts receivable; financial assets available for sale; other financ ial liab ilities ,etc.
2. Recognition and measurement for financial instrument1. Financial assets or liabilities at fair value through profit or lossFinancial assets or liab ilities at fair value throu gh profit or loss include transactional financial assets or financialliabilities and financial assets or liabilities directly designated at fair value through profit or loss.
Transactional financial assets or financial liabilities refer to those meeting any of the following conditions:
1) Purpose for holding the assets or liabilities are to disposal, repurchase or redemption in a short time;2) Cons titute part of the identifiable financial instrument group for central management, and there is objectiveevidence proving that the Company manages this group in a short-time-return way recently;3) Be long to derivative financial instrument, other than those derivatives designated as effective hedgeinstruments, belonging to financial guarantee contracts and those linked to equity instrument investment which isnot quoted in an active market and whose fair cannot be measured reliably and the settlement of which isconditional upon delivery of the equity instrument.
Subject to satisfaction of any of the following conditions, financial assets or liabilities can be designated asfinancial assets or liabilities at fair value through profit or loss upon initial measurement:
1) The designation can eliminate or substantially eliminate the inconsistencies between profit and loss from thefinancial assets arising from different measurement basis;2) The portfolio of financial assets and liabilities in which the financial asset belongs to are designated asmeasured at fair value in the risk management report or investment strategic report handed in to key managementpersonnel;3) Hybrid instruments which contains one or more embedded derivatives, unless the containing of embeddedderivatives does not have substantial effect on the cash flows of the hybrid instruments, or the embeddedderivatives obviously should not be separated from relevant hybrid instruments;4) Hybrid instruments which contains embedded derivatives that should split, but cannot be measured separatelywhen acquired or on the subsequent balance sheet date.
The Company initially measure s fin anc ial a ssets or lia bil ities at fa i r value th rou gh pro fit or loss a t the ir fa ir v alu eswhen acquiring the assets or liabilities (after deducting cash dividend already declared but not paid or bondinterests whic h is due for inter est p ayment but not received), and the relevant transaction fee is included in currentprofit or loss. Interest or cash dividend acquired during the holding period shall be recognized as investmentincome, and movement of fair value at the end of period is included in current profit or loss. Upon disposal, thedifference between its fair value and initial accounting amount shall be recognized as investment income, withcorresponding adjustment to gains and losses from movement of fair value.
1. Account receivablesAccount receivable refers to the non-derivative financial assets without price in active market and with amount tobe fixed or to be determinedThe 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 toexternal customers by the Company, and receivables in other companies excluding debt instruments priced inactive markets, includes but not limited to trade receivables, notes receivables, account paid in advance, otherreceivables and advance payment. If characterized as of financing nature, the initial recognition shall be priced at
the present value.
Upon disposal, the difference between the sale value and the book value of the receivables shall be accounted intocurrent profit or loss on its recovery or disposal.
2. Held-to-maturity investmentThe non-derivative financial assets with maturity date, fix return amount or amount able to determined, and theCompany held with specific intention and ability.
The Company takes the sum of fair value (after deducting bond interests which is due for interest payment but notreceived) and related transaction fee as initial recognition amount in respect of held-to-maturity investment uponacquisition of the investment. During the holding period, the Company recognizes interest income at amortizedcost and effective interest rate which is included in investment income. The effective interest rate is determinedupon acquisition of the investment and remains unchanged for the expected continuous period or appropriateshorter period. Difference between sale price and carrying value of the investment is included in investmentincome.
If h el d -to-maturity investm e nt is disposed or reclassified as other types of financial asset, and the relevant amountis relatively bigger than the total amount of our all held-to-maturity investments prior to disposal orreclassification, the remaining held-to-maturity investments shall be reclassified as available-for-sale financialassets immediately following such disposal or reclassification. On the reclassification date, difference between thecarrying value and fair value of the investment is included in other comprehensive income and is transferred outinto current profit or loss when the available-for-sale financial assets experience impairment or derecognition.However, the followings are exceptions:
1) The date of disposal or reclassification is approaching to the date of expiration or redemption of the investment(such as three months prior to expiration), and change of market rate has no material influences over the fair valueof the investment.2) Company has already recovered nearly all initial principal under the repayment means as agreed in contract.3) D isposal or reclassification is arising from separate matters which are out of our control, which are expectednot to occur repeatedly and which are difficult to predict reasonably.
3. Available-for-sale financial assetsAvailable-for-sale financial assets are non-derivative financial assets that are designated as available-for-sale uponinitial recognition and financial assets other than other categories of financial assets.
The Company initially measures available-for-sale financial assets at the sum between their fair values whenacquiring the assets or liabilities (after deducting cash dividend already declared but not paid or bond interestswhich is due for interest payment but not received) and the relevant transaction fee. Interest or cash dividend
acquired during the holding period shall be recognized as investment income. Gains or losses arising frommovement of fair value is directly included in other comprehensive income except for impairment loss andexchange difference arising from foreign currency monetary financial assets. When disposing available-for-salefinancial assets, the Company includes the difference between the acquired price and carrying value of thefinancial assets into investment pro fit or loss. Meanwhile, accumulated fair value movement a ttributable to thedisposed part which is originally directly included in other comprehensive income is transferred out and includedinvestment profit or loss.
For equit y instrument invest ment which is not quoted in an active market and whose fair value cannot be reliablymeasured, and derivative financial assets which are linked to the equity instrument and whose settlement isconditional upon delivery of the equity instrument, they are stated at cost by the Company.
4. Other financial liabilitiesInitial recognition amount is determined at the sum of fair value and relevant transaction fee. Subsequentmeasurement is conducted at amortized cost.
3. Confirmation evidence and measurement methods for transfer of financial assetsWhen 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; whileshall continue to recognize such financial assets if all risks and remunerations related to ownership of suchfinancial 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 conditionfor discontinued recognition, balance between the following two items is recorded in current gains and losses:
(1) Carrying value of financial assets in transfer;(2) Aggregate of the consideration received from transfer and accumulative movements of fair value 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 fordiscontinued recognition. And consideration received is recognized as financial liability.
4. De-recognition condition for financial liabilityAs for the financial liabilities with its whole o r part present obligations released, the Company shall de-realize
such fina ncial liabilities o r part of it. if the Company e nters into agreement with its creditor to substitute for theexisting fin ancial liabil ities by means of assu ming new f inancial liabili ties, then the Company sha ll de-realize theexisting financial liabilitie s and realize the new financial liabilities provided that the contract clauses of the newand the existing financial liabilities are different in substance.
If the Company m akes substantial amendment to the whole or part contract clauses of the existing financialliabilities, it s hall de-realize the ex isting financial liabili ties or part of it. Mean while, the financial liab ilities withamendment to its clauses shall be realized as new financial liabilities.
In case of derecognizing of financial liabilities in whole or part, the difference between the carrying value of 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 thefinancial liabilities in whole on the repurchase date. Difference between the carrying value allocated to thederecognizing part and the consideration paid (including the non-cash assets exchanged or new financial liabilitiesassumed) shall be recorded in current gains and losses.
5. Determination method for fair value of financial assets and financial liabilitiesAs for the financial asse ts or financia l liabilities w ith an a ctive market, th e fair value is dete rmined b y the offer ofthe active market; the offer of the active market includes the offers of underlying assets or liabilities easily andregularly obtained from the exchange, the dealer, the broker, the industry group, the pricing institution or theregulatory body, which can represent the market transactions actually and frequently occur on the basis of fairtrade.
The initia l acquis ition or financ ial assets o r financial liab ilities a ssumed, market tra nsa ction pric e to determine thefair value basis.
There is no active market for a fina ncial asset or financial liability, the valua tion techniques to determine its fairvalue. At th e time of valuation, the Company adopted applicable in the present case and there is enough availabledata and other information technology to support valuation, assets or liabilities of feature selection and marketparticipants in the trading of the underlying asset or liability considered consistent input value and priority as therelevant observable inputs. Where relevant observable inputs can not get or do not get as far as practicable, the use
of unobservable inputs.
6. Provision of impairment reserve for impairment of financial assets (excluding account receivables)The Company r e views the carrying value of the financial assets (excluding those measured by fair value and thechange thereof is recorded in current gains and losses) on the balance sheet date, if there is objective evidenceshowing impairment of the financial assets, it shall provide impairment reserve.
Objective evidence that a financial asset is impaired includes the following observable events:
1. Significant financial difficulty of the issuer or obligor;2. A breach of contract by the borrower, such as a default or delinquency in interest or principal payments;3. The creditor, for economic or legal reasons relating to the borrower’s financial difficulty, granting a concessionto the borrower;4. It becoming probable that the borrower will enter bankruptcy or other financial reorganizations;5. The disappearance of an active market for that financial asset because of financial difficulties of the issuer;6. Observable data indicating that there is a measurable decrease in the estimated future cash flows from a groupof financial assets since the initial recognition of those assets, although the decrease cannot yet be identified withthe individual financial assets in the group, including: adverse changes in the payment status of borrowers in thegroup, an increase in the unemployment rate in the country or geographical area of the borrowers, a decrease inproperty prices for mortgages in the relevant area, or adverse changes in industry conditions that affect theborrowers in the group;7. Significant adverse changes in the technological, market, economic or legal environment in which the issueroperates, indicating that the cost of the investment in the equity instrument may not be recovered by the investor;8. A significant or prolonged decline in the fair value of an investment in an equity instrument below its cost;
Details for impairment of financial assets are set out below:
(1) Impairment provision for available-for-sale financial assetsThe Group has separately tested various available-for-sale equity instruments a t the balance sheet date. It will bedefined as impairment if the fair value is lower than the initial investment cost by more than 50% (including 50%)or the low sta te h as la sted for no le ss tha n 1 year. While the lower proportion is between 20% and 50%, the Groupwill take other factors such as price fluctuation into consideration to estimate whether the equity instrument hasimpaired or not.
Initial seg ment of the "cost" of the sale of equity i nstruments in accordance with available cost less any principalrepayment and amortization, impairment loss has been included in determining profit or loss; The fair value of theavailable-for-sale equity instrument investment without an active market is determined by the present valuedetermined on the basis of the current market return similar to financial assets versus the future discounted cash;the fair value of available-for-sale equity instrument investment with offe rs in the active market is determined bythe closing price of the stock exchange at the end of the period, unless this available-for-sale equity instrument
investment has a restricted stock trade period. For the presence of restricted investments in equity instrumentsavailable for sale, according to the end of the closing price of the stock exchange market participants by deductingthe risk equity instrument within a specified period cannot be sold on the open market and the requirements toobtain compensation.
When an available-for-sale financial asset is impaired, the cumulative loss aris ing from decline in fair value thathad been recognized in other comprehensive income is reclassified to the profit or loss even though the financialasset has not been derecognized. The amount of the cumulative loss that is removed from equity is the differencebetween the acquisition cost (net of any principal repayment and amortization) and current fair value, less anyimpairment loss on that financial asset previously recognized in profit or loss.
If there are objective evidences showing that the value of available-for-sale debt instrument is recovered and itrelates to the matters happened after the impairment loss recognition, the impairment loss recognized shall bereversed and accounted in current profit or loss. Impairment losses recognized for equity instrument investmentsclassified as available-for-sale are reversed through equity. However, impairment loss occurred by equityinstrument investment which is not quoted in an active market and whose fair value cannot be measured reliablyand derivative financial assets which are linked to the equity instrument and whose settlement is conditional upondelivery of the equity instrument, shall not be reversed.
(2) Impairment provision for held-to-maturity investmentFo r he ld-to-maturity investment, if there is object evidence showing the investment is impaired, then impairmentloss is determined based on the difference between its fair value and present value of predicted future cash flow.After provision, if there is evidence showing its value has been restored, the originally recognized impairment losscan be reversed and included in current profit or loss, provided that the reversed carrying value shall not exceedthe amortized cost of the financial asset as at reversal date assuming no impairment provision had been made.
7. Offset of financial assets and financial liabilitiesFinancial assets and financial liabilities are stated in balance sheet separately without inner-offset. However, thenet amount after inner offset is stated in balance sheet date when the following conditions are all met:
(1) The Company has legal right to offset recognized amount and the right is enforceable;(2) The Company plans to settle on a net basis, or simultaneously realize the financial assets and settle thefinancial liabilities.
11. Account receivable(1) Account receiva ble with si ngle signi ficant am ount and withdra wal single item bad debt pro vision
Acc ount with single s ignifican t amount
Amount occupied 10 pe
with single significant amount
| Withdrawal method for bad debt provision of account receivable | Conducted impairment testing separately, balance between the |
present value of future cash flow
relevant combination for accrual.
(2) Accounts receivable whose bad debts provision was accrued by combination based on credit riskcharacteristics portfolio
Combination Bad debt provision accrualParty composition within the scope of consolidation related Other methodAging of accounts group Age analysis methodGroup with bad debt provision accrual by aging:
√ Applicable □ Not applicable
Age Accrual ratioAccrual ratio for other receivable
Within one year (one year included)0.00%
and its carrying value, bad debtprovision withdrawal and reckoned into current gains/losses. Forthose without impairment being found after test, collected into
| 0.00% |
1－2 years
5.00%
| 5.00% |
2－3 years
10.00%
| 10.00% |
Over 3 years
15.00%
| 15.00% |
3－4 years 15.00%
| 15.00% |
4－5 years15.00%
| 5.00% |
Over 5 years 15.00%
| 15.00% |
In combination, withdrawal proportion of bad debt provision based on balance proportion
□ Applicable √ Not applicable
In combination, withdrawal proportion of bad debt provision based on other methods:
□ Applicable √ Not applicable
(3) Account receivable with minor single amount but with withdrawal bad debt provision for single item
Reasons for provision of bad debt reserve
There is ob jective eviden ce that th e Company
recover the money under the original terms of receivables.Provision method of bad debt reserve
| will not be able to |
| Withdrawn according to the difference between p resent value of |
expected future cash flows and the book value of the receivables.
12. Inventories
Whether the Company needs to comply with the disclosure requirements of the particular industryNo
1. Classification
Inventory means finished goods and merchandise that are ready for sale, work-in-progress, or material used in theprocess of production or provision of service in the ordinary course of business. Inventory includes merchandisein warehouse, delivered goods, work- in-progress, raw materials, subcontracted materials, packages, etc.
2. Valuation methodInventory carried initial measured by cost, including purchasing cost, processing cost and other costs. Theinventory in transit was valued by weighted average method.
3. Recognized standards o f the net real izabl e value for inventory and withdrawal method on provision ofinventoryAfter inventory at period-end, the inventories are accounted depending on which is lower between the cost and thenet realizable value or adjusted the provision of inventory. The net realizable value of inventory products andsellable materials, in normal business production, is measured as the residual value after deducting the estimatedsales expense and related taxes and fees from the estimated selling price; the net realizable value of an item ofinventories subject to further processing, in normal business production, is measured as the residual value afterdeducting the sum of the estimated costs of completion, sales expense and related taxes and fees from theestimated selling pric e of the sellable item. The net re alizable value of the quantity of invento ries held to satisfyfirm sales or service contracts is based on the contract price. If the sales contracts are for less than the inventoryquantities held, the net realizable value of the excess is based on general selling prices.
An impairment allowance, if any, is generally individually recognized for each type of inventories at period-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.
If the previous factors resulting in deduction of inventories values disappear, then such deduction of value shall bereversed back from the original provision of inventory depreciation reserve, and turns to current gains and losses.
4. Inventory systemInventory system is the perpetual inventory system.
5. Amortization of low-value consumables and packaging materials1. Adopt five-five amortization for low-value consumables;2. Adopt one-off writing off process for packaging materials.
13. Classified as assets held for sale1. The confirmation standards for classifying as available for sale
The Company r ecognizes the non-current assets or disposal groups that meet both of the following conditions asthe component 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 lik ely to oc cur, 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.The confirmed purchase commitment refers to the legally binding purchase agreement signed between theCompany and other parties. The agreement contains important terms such as transaction price, time, and enoughsevere penalties for breach of contract, etc., so that it is very unlikely to make major adjustments or cancellationsto the agreement.2. Accounting methods for avail able for saleThe Company does not calculate and dis till depreciation or amortization for the non-current assets or disposalgroup available for sale, if the book value is higher than the net amount after deducting selling cost from fair value,the book value shall be written down to the net amount after deducting selling cost from fair value, the write-downamount is recognized as asset impairment loss and is included in the current gains and losses, and makes provisionfor impairment of available-for-sale assets at the same time.For the non-current assets or disposal group classified as available for sale at the acquisition date, compare theinitial measurement amount with the net amount after deducting selling cost from fair value based on theassumption that it is not classified as ava ilable for sale at the initial measurement, and measure by the loweramount.The above principles are suitable for all non-current assets, but not including the investment real estate that adoptsfair value model for follow-up measurement, or the biological assets that are measured at the net amount afterdeducting selling cost from fair value, or the assets formed by employee compensation, or the deferred income taxassets, or the financial assets regulated by the relevant accounting standards of financial instruments, or the rightsarising from the insurance contracts regulated by the relevant accounting standards of insurance contracts.
14. Long-term equity investment1. Recognition of investment cost
(1) As for the long-term equity investment formed from business combination under the same control, accountingpolicy found in (V) Accounting method for business combination (not) under the same control of Note IV
(2) Long-term equity investment obtained by other meansFor long-term equity investments obtained through payment with cash, then the actual payment shall be viewed asinitial investment cost. Initial investment cost including the expenses, taxes and other necessary costs that directlyconcerned with the long-term equity investment that acquired.
For long-term equity investments obtained through issuance of equity securities, then the fair value of suchsecurities shall be viewed as initial investment cost; for transaction expenses from issuing or own equityinstrument acquired, it can be deducted from the equity when such expenses attributable directly to equitytransaction.
Under the precedent condition that non-monetary assets exchanges are featured with commercial nature and fairvalues of exchange-in or exchange-out assets can be reliably measured, long-term equity investment exchange-inthrough non-monetary assets exchange shall be recognized with initial investment cost on the basis of the fairvalue of the assets exchange-out, unless there is obvious evidence showing that fair value of exchange-in assets ismore reliable; as for non-monetary assets exchanges not satisfying such precedent condition, initial investmentcost of exchange-in long-term equity investment falls to the carrying value of exchange-out assets and relevanttaxes payable.
For long-term equity investments obtained through debt reorganization, its initial investment cost is recognizedbased on fair value.
2. Subsequent measurement and recognition of gains and losses(1) Cost methodThe long-term equity investment control b y invested entity shall counted by cost method, and pricing on initialinvestment cost, cost of the long-term equity investment shall be adjusted while additional investment ordis-investment.
Other than payment actually paid for obtaining investment or cash dividend or profit included in considerationwhich has been declared while not granted yet, the Company recognizes investment income according to its sharein the cash dividend or profit declared for grant by the invested unit.
(2) Equity methodThe Company calculates long ter m equity investment in associates and joint ventures under equity method. Forcertain equity investments in associates indirectly held through risk investment institutions, joint funds, trustcompanies or similar entitie s including investment linked insurance fund, the Company measures the investmentat fair value through profit or loss.
Where the initial investment cost of a long -term equity i nvestment exceeds the Group’s share of the fair value ofthe investee’s identifiable net assets at the time of acquisition, no adjustment is made to the initial investment cost.Where the initia l investment cost is less th an 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 andlosses realized by the invested Company and other comprehensive income after acquisition of long-term equity,
and book value of such investment is adjusted accordingly. Profit or cash dividends pro rata distributed by theinvested Company are to minus book value of the relative long-term investment. Book value of long-terminvestment is adjusted when changes occur other than net gains and losses, other comprehensive income andprofit distribution of the invested Company, and is to report in owners’ equity accordingly.
The Company should recognized net profit of invested unit after adjustment, based on fair value of varyidentifiable assets of invested unit while obtained investment, while recognized net profit or net losses of investedunits that should be enjoy by investment enterprise. the un-realized transaction gains/losses attributable toinvestment enterprise, internally occurred between the Company, affiliated units and joint-ventures shouldcalculated by proportion of shares-holding which should be offset, than recognized investment gains/losses.
When the Company is confirmed to share losses of the invested units, the f ollowing order shall prevail fordisposal: first of all, offset carrying value of long-term equity investment. Second, for long-term equity investmentwhose carrying value is not enough for offset, investment loss should be continued to recognize within the limit ofcarrying value of other long-term equity which substantially forms net investment to invested units, to offsetcarrying value of long-term items receivable. At last, after the aforesaid treatment, if enterprise still bearsadditional duties according to investment contract or agreement, projected liabilities are recognized in accordanceto the obligations which are expected to undertake, and then recorded in current gains and losses.
In the event that the in vested unit realizes pro fit in later periods, the Company will adopt disposal adverse to theabove order after deduction the unrecognized share of loss, i.e. write off the carrying value of the recognizedprojected liabilities, recover carrying value of long-term equity which substantially forms net investment toinvested unit and long-term equity investment, and recognize investment income at the same time.
3. Transfer of calculation for long term equity investment1. Measure at fair value transfer to equity methodFor the equity investment originally held by the Company in which it has no control, common control orsignificant influence over the investee and which is accounted for under recognition and measurement principle asfinancial assets, in case that the Company becomes able to exercise significant influence or common control uponthe investee due to additional investment while no control is reached, the sum of fair value of the originally heldequity investment as determined under Business Accounting Principles No.22- Recognition and MeasurementPrinciple as Financial Assets plus cost of the new investment shall be deemed as the initial investment cost uponcalculation under equity method.
If the originally held equity investment is classified as available for sale financial assets, the difference between itsfair value and carrying value and the accumulated fair value movement which is originally included in othercomprehensive income shall be transferred to current period gains and losses under equity method.
In case that the initial investment cost under equity method is lesser than share of fair value of the investee’s netidentifiable assets as of the date when additional investment is made as calculated based on the latest shareholdingproportion upon additional investment, carrying value of the long term equity investment shall be adjusted againstsuch difference which is included in current period non-operating income.
2. Measure at fair value or calculation under equity method transfer to calculation under cost methodFor the equity investment originally held by the Company in which it has no control, common control orsignificant influence over the investee and which is accounted for under recognition and measurement principle asfinancia l instru ment, or for long term equity investment originally held in associates or joint ventures, in case thatthe Company becomes able to exercise control over investee not under common control due to additionalinvestment, the sum of fair value of the originally held equity investment plus cost of the new investment shall bedeemed as the initial investment cost upon calculation under cost method when preparing separate financialstatement.
For other comprehensive income as recognized under equity method in respect of equity investment held prior toacquisition date, when the Company disposes this investment, the aforesaid income shall be accounted for on thesame basis as the investee would otherwise adopt when it directly disposes relevant assets or liabilities.
For equity investment held prior to acquisition date which is accounted for under Business Accounting PrinciplesNo.22- Recognition and Measurement of Financial Assets, the accumulated fair value movement which originallyincluded in other comprehensive income shall be transferred to current period gains and losses upon calculationunder cost method.
3. Calculation under equity method transfer to fair value measurementIn case that the Company lost common control or significant influence upon investee due to disposal of part equityinvestment, the remaining equity investment shall be calculated under Business Accounting Principles No.22-Recognition and Measurement of Financial Assets, and the difference between its fair value and carrying value asof the date when the Company lost common control or significant influence shall be included in current periodgains and losses.
For other comprehensive income as recognized under equity method in respect of the original equity investment,when the Company ceases calculation under equity method, the aforesaid income shall be accounted for on thesame basis as the investee would otherwise adopt when it directly disposes relevant assets or liabilities.
4. Cost method transfer to equity methodIn case that the Company lost control upon investee due to disposal of part equity investment, and if the remainingequity investment can exercise common control or significant influence over the investee, equity method shall beadopted when preparing separate financial statement, and the remaining equity investment shall be adjusted as if it
had been stated under equity method since the acquisition.
5. Cost method transfer to fair value measureIn case that the Company lost control upon investee due to disposal of part equity investment, and if the remainingequity investment cannot exercise common control or significant influence over the investee, Business AccountingPrinciples No.22- Recognition and Measurement of Financial Assets shall be adopted for accounting treatmentwhen preparing separate financial statement, and the fair value and carrying value as of the date when control islost shall be included in current period gains and losses.
4. Disposal of long term equity investmentDifference between carrying value and actual acquisition price in respect of disposal of long term equityinvestment shall be included in current period gains and losses. For long term equity investment under equitymethod, the Company shall adopt the same basis as the investee directly disposes relevant assets or liabilitieswhen disposing this investment, and account for the part originally included in other comprehensive income underappropriate proportion.
If the terms, conditions and economic impact of each transaction involved in the disposal by steps of investmentin subsidiaries fall into one or more of the following situations, such transactions will be accounted for as apackage deal:
1. Such transactions are entered into simultaneously or in the case of considering the impact of each other;2. Such transactions as a whole in order to reach complete commercial results;3. The occurrence of one transaction is subject to that of at least one other transaction;4. A transaction alone is not economic, but otherwise when considered with other transactions.
Enterprises that lose control of their original subsidiaries due to the disposal of partial equity investment orotherwise, and therefore disqualify a package deal, should prepare the relevant accounting treatment indifferentiation with individual financial statements and consolidated financial statement:
(1) In separate financial statement, as for disposal of equity interest, difference between carrying value and actualacquisition price shall be included in current period gains and losses. In case that the remaining equity interestscan exercise common control or significant influence over investee, it shall be stated under equity method in stead,and shall be adjusted as if the remaining equity interests had been stated under equity method since the acquisition.In case that the remaining equity interests cannot exercise common control or significant influence over investee,it shall be accounted for under Business Accounting Principles No.22- Recognition and Measurement Principle ofFinancial Instruments, and the difference between its fair value and carrying value as of the date then theCompany lost control shall be included in current period gains and losses.
(2) In c onsolidated financial statement, for those transactions occurred before lost of control in subsidiaries, thedifference between disposal price and share of net assets of subsidiaries since purchase date or combination date
shall be used to adjust capital reserve (equity premium), and if capital reserve is insufficient to offset, then it shalladjust retained earnings; when the Company lost control in a subsidiary, the remaining equity interests would bere-measured at the fair value as of the control-lost date. T he sum of consideration gained from the disposal ofequity and the fair value of remaining equity minus the share of net assets of original subsidiaries since the day ofpurchase and based on its original shareholding ratio is credited into investment gain for the current period, andoff-set the go odwill at the same time. Other comprehensive income in relation to equity investments of originalsubsidiaries should be transferred to investment gain for the period at the time of loss of control.
Each transaction involved in the disposal of equity investments of subsidiaries until loss of control falls into apackage deal, carrying accounting treatment on transaction of losing control rights and disposing the Company,and should be accounted for accordingly in differentiation with individual financial statements and consolidatedfinancial statements:
(1) In consolidated financial statements, difference between each payment from disposal of an equity and the bookvalue of such long-term equity investment before the loss of control should be recognized as other comprehensiveincome and at the time of loss of control, transferred to profit or loss for the current period.(2) In consolidated financial statements, difference between each payment from disposal of a subsidiary and theshare of its net assets through investment before the loss of control should be recognized as other comprehensiveincome and at the time of loss of control, transferred to profit or loss for the current period.
5. Criteria for common control and significant influenceWhere the Company jointly controls an arrangement with other participators under agreed terms, and decisionswhich materially affect return of such arrangement can only exist when other participators unanimously agree onthe decisions, the Company is deemed to join tly control this arrangement with other participators, and thearrangement belongs to joint venture arrangement.
In case of a joint venture arrangement concluded through separate entity, when the Company is judged to beentitled to the net assets of the separate entity under relevant agreements, the entity shall be viewed as a jointventure under equity method. However, when the Company is judged to be not entitled to the net assets of theseparate entity under relevant agreements, the entity shall be viewed as a joint operation, in which case, theCompany recognizes items relating to its share of interests from the joint operation and accounts for according torelevant business accounting rules.
Significant influence refers to that investor has right to participate in making decisions relating to the financial andoperatio nal p olic ies o f the investee, wh ile n ot ab le to co ntrol or jo intl y control (with oth ers) esta blish ment of th esepolicies. The following one or more conditions are based to judge whether the Company has significant influenceover investee with consideration of all facts and situations: (1)has delegate in the board of directors or similarauthority organs of investee; (2)participate in establishing financial and operational policies of the investee;(3)occur material transactions with the investee; (4)delegate management to the investee; (5)provide key technical
data to the investee.15. Investment real estate
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 afterappreciation, the rented buildings. In addition, for the vacant buildings that the Company hol ds for operatingleases, if the board of directors makes written decisions and explicitly indicates to use for operating leases and thepurpose of management is not to change in the short term, they are also reported as an investment real estate.
The investment property of the Company is accounted at its cost. Cost of investment property purchased from theexternal sources includes purchase payment, related taxes and other expenditures which can be directlyattributable to such assets; Cost of investment property constructed by the Company comprise of the necessaryexpenditure occurred during the construction for reaching the condition of planned use.
The Company adopts cost method for subsequent measurement of investment property. As for the investmentproperty measured at cost method – buildings for lease are depreciated under the policies which are the same asfixed assets, and land use right for lease are amortized under the policies which are the same as intangible assets.
When use of investment property changes to be used by the Company itself, the Company sh all transfer theinvestment property to fixed assets or intangible assets since the change date. When use of the self-use real estatechanges for earning rental or capital appreciatio n, the Company shall transfer the fixed assets or intangible assetsto investment property since the change date. For such transfer, the carrying value prior to the transfer is deemedto be the value accounted after the transfer.
The Company would de-realize investment property when the sam e is disposed or out of use forever and noeconomic benefit would be obtained from such disposal. The disposal income from sale, transfer, dump or destroyof investment property less its carrying value and related taxes is recorded in current gains and losses.
16. Fixed asset(1) Recognition of fixed assetsFixed assets is defined as the tangible assets which are held for the purpose of producing goods, providing
services, lease or for operation & management, and have more than one year of service life. Fixed assets should berecognized for qualified the followed conditions at the same time: (1) It is probable that the economic benefitsassociate d with the asse ts will flow into the Company; (2) The cost of the assts can be measured reliably. (1) The
cost of outsourcing fixed assets includes the buying price, import tariff and other related taxes and fees, as well asother expenses occurred before making the fixed assets reach the intended serviceable condition and can bedirectly attributab le to the assets. (2) The cost of self-constructed fixed assets consists of the necessary expensesoccurred before reaching the intended serviceable condition by the construction of the assets. (3) The fixed assetsinvested by the investors take the value stipulated by investment contract or agreement as the entry value, but itshould take the fair value as the entry value when the value stipulated by investment contract or agreement is notfair. (4) When the cost of purchasing fixed assets has a delay in payment exceeding the normal credit terms andsubstantially possesses financing, the cost of fixed assets is determined on the basis of the present value of thepurchasing price. The balance between the actual paid cost and the present value of purchasing price is reckonedin the current profits and losses in the credit period, except for the capitalization. Subsequent measurement anddisposal of fixed assets (1) Depreciation of fixed assets is accrued within the estimated useful life after deductingthe estimated residual value from its entry value. For the fixed assets accrued with provision for impairment,determine the amount of depreciation by the book value deducting the provision for impairment and according tothe useful life. The Company determines the useful life and estimated net residual value of fixed assets accordingto the nature and use of fixed assets, and rechecks the useful life, estimated net residual value, and depreciationmethod of fixed assets at the end of the year, and makes corresponding adjustments if there is difference with theoriginal estimated number. (2) The follow-up expenses of fixed assets and the follow-up expenses related to fixedassets are included in the cost of fixed assets if they meet the requirements for recognition of fixed assets; thosecannot meet the requirements for recognition of fixed assets should be included in the current profits and losseswhen occur. (3) When the fixed assets are disposed, or expected not to generate economic benefits through use ordisposal, derecognize the fixed assets. The amount after deducting its book value and related taxes and dues fromthe disposal income of the fixed assets sale, transfer, retirement or impairment is included in the current profitsand losses.
(2) Depreciation methods
Categories Method Years of depreciation Scrap value rate Yearly depreciation rateProduc t ion buildings
Straight-line depreciati on
35 5% 2.71%Produc t ion buildings
Straight-line depreciati on
40 5% 2.38%Makeshift
Straight-line depreciati on
9 5% 10.56%Mechan ical equipment
Straight-line depreciati on
12 5% 7.92%Transportation vehicle
Straight-line depreciati on
9 5% 10.56%Other equipment
Straight-line depreciati on
6 5% 15.83%
(3) Recognition, measurement and depreciation of fixed assets held under finance leaseA fixed asset leased by the Company is recognized as the fixed asset held under finance lease if one or more of the
following c riteria are met: (1) U pon the e xpiry of the leas e term, the ownership is transfe rred to the Company. (2)The Company has the option to purchase the asset at a predetermined price that is expected to be sufficiently
lower than the fair value at the date the option becomes exercisable and it is reasonably ascertained at theinception of lease that the option will be exercised. (3) The lease term approximates the useful life of the relevantasset even if the ownership is not transferred. (4) At the inception of the lease, the present value of the minimumlease payments is substantiall y equivalent to the fair value of the leased asset. (5) The leased assets are of such aspecialized nature that only the Company can use them without major modification. A fixed asset held underfinance lease is initially recognized at the lower of fair value of the leased asset and the present value of theminimum lease payments, while the amount of the minimum lease payments will be recognized as the entry valueof long-term account payable, the difference between them will be recognized as unrecognized financing costs.The initial direct costs such as commissions, attorney’s fees, and travelling expenses, stamp duties attributable tothe leased item incurred during the process of lease negotiating and signing the leasing agreement shall berecorded in the asset value. Unrealized finance costs will be amortized using actual interest rate method over eachperiod during the lease terms. The Company adopts depreciation policies for leased assets consistent with those ofself-owned fixed assets for the purpose of calculating the depreciation of a leased asset. If it is reasonable to becertain that the lessee will obtain the ownership of the leased asset when the lease term expires, the leased assetshall be fully depreciated over its useful life. If it is not reason able to be certain that the lessee will obtain theownership of the leased asset at the expiry of the lease term, the leased asset shall be fully depreciated over theshorter one of the lease term or its useful life.
17. Construction in process1. Initial measurement of constructions under progress
Self-constructed constructions under progress of the Company are carried at actual costs. Actual costs include thenecessary expenses for constructing such asset to the expected useable condition, including material costs forproject, labor cost, related taxes and fees paid, borrowing expenses to be capitalized and indirect costs to beamortized.
2. Standard and point of time for construction in process carrying forward to fixed assetsFixed asset is booked with th e en tire e xpen ditur es occu rred in th e cons truc tion in pr ocess till it arri ves at p red ictedstate for use. For those constructions in process of fixed assets which have already arrived at the predicted statefor use, while still with absence of completion settlement, they shall be carried forward to fixed assets at theestimated value based on engineering budget, construction cost or actual cost commencing from the date of arrivalof the predicted state for use. Meanwhile, they shall be also subject to the depreciation policies applicable to fixedassets of the Company for provision of depreciation. Once completion settlement is made, the original temporaryestimated value shall be adjusted at the effective cost. However, the original provision of depreciation remainsunchanged.
18. Borrowing expense s1. Recognition of the borrowing expenses capitalization
Borrowing expenses that attributed for purchasing or construction of assets that are complying start to becapitalized and counted as relevant assts cost; other borrowing expenses, reckoned into current gains and lossesafter expenses recognized while occurred.
Assets satisfying the conditions of capitalization are those assets of fixed, investment real estate etc. which need along period of time to purchase, construct, or manufacturing before becoming usable.
Capitalizing for borrowing expenses by satisfying the followed at same time:
(1) Assets expense occurred, and paid as expenses in way of cash, non-cash assets transfer or debt with interesttaken for purchasing, constructing or manufacturing assets that complying with capitalizing condition;(2) Borrowing expenses have occurred;(3) Necessary activities occurred for reaching predicted usable statues or sale-able status for assets purchased,constructed or manufactured.
2. Period of capitalizationCapitalizing period was from the time star capitalizing until the time of suspended capitalization. The period forborrowing 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 of asstsshall suspended capital iza tion.
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.
3. 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 conditio ns 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.
4. Calculation for capitalization amount
Interest expenses practically occurred at the current term of a special borrowing are capitalized after deducting ofthe bank saving interest of unused borrowed fund or provisional investment gains.
Capitalization amounts of common borrowings are decided by the weighted average of exceeding part ofaccumulated asset expenses over the special borrowing assets multiply the capitalizing rate of commonborrowings adopted. Capitalization rates are decided by the weighted average of common borrowings.
For those expenses with discount or premium, determined the amortizable discount or premium in every fiscalyear by effective interest method, than adjusted interest amount in every period.
19. Biological assets1. Classification of biological assets
Biological 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.
2. Initial recognition of Biological assetsThe biological assets will initially measured by cost while obtained. The cost of biological asset used forproduction purchased from the outside includes the purchase price, related taxes, transportation expense,insurance premium and other charges directly attributable to the purchase of such asset. Biological asset used forproduction input by investors is stated at its entry value which is calculated based on the value as stipulated in theinvestment contract or agreement plus the related taxes payable. Where value stipulated in the contract oragreement is not fair, the actual cost is fixed at fair value.
3. Subsequent measurement of biological assets(1) Follow-up expensesThe cost of productive biological assets constituted by the actual costs of self-cultivated and constructedproductive biological assets occurred before achieving the intended production and operation goals, and thefollow-up expenses such as management and protection occurred after achieving the intended production goals areincluded in the current profits and losses.
(2) Depreciation of productive biological assetsBiological 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 by
the 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 depreciationmethod at year-end, if there have difference between the predicted number and original estimated number or havemajor changes on way of profit earning, than adjusted the service life or predicted salvage value or depreciationmethod as account estimation variation.
(3) Disposal of biological assets:
The cost of biolo gical assets after th e shift of use is stated at the carrying amount at the time of shift of use. Whensold, 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.
4. Biological assets impairmentThe Company inspects the productive biological assets at least at the end of each year, conclusive evidenceindicates that if the recoverable amount of productive biological assets are less than the book value due to naturaldisasters, insect pests, animal diseases or changes in market demand, the Company make the provision forimpairment of biological assets and include them in the current profits and losses according to the balancebetween the recoverable amount and the book value.
The balance lower than the book value shall be calculated and accrued to falling price reserves or provision 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.20. Intangible assets(1) Measurement, use of life and impairment testingAn intangible asset is an identifiable non-monetary asset without physical substance owned or controlled by the
Company, including land use right, technical know-how, forest tree use right, trademark use right and softwareuse right.
1. Measurement of intangible assetsFor those intangible assets purchased from outside, the purchase value, relevant taxes and other paymentsattributable to predicted purpose obtained should recognized as cost for this assts. For those purchased amountthat paid overdue exceeded the normal credit condition, owns financing natures actually, the cost should berecognized based on the current value while purchased.
As for the intangible assets acquired from the debtor in debt restructuring for the purpose of settlement of debt, the
fair value of the intangible assets shall be based to determine the accounting value. The difference between 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-monetaryassets exchange are accounted at the value based on the fair value of assets exchanged out, unless there is obviousevidence showing the fair value of assets exchanged in is more reliable; for non-monetary assets exchange notqualifying for the preceding conditions, the carrying value of assets exchanged out and related taxes payable shallbe viewed as the cost of intangible assets exchanged in, without recognition of gains and losses.
Intangible assets obtained by means of enterprise mergered under common control, recognized book-keepingvalue by the book value of mergered party; Intangible assets obtained by means of enterprise mergered underdifferent control, recognized book-keeping value by the its fair value.
For those cost of intangible assets development internally including: the used materials, labor cost and registercharge for development; amortization for other patent and concession used and interest expense satisfying thecapitalization condition during process of development; other directly expense before reached its predated usefulpurpose.
2. Subsequent measurementAnalysis and determined the service life for intangible assts while o btained. And classified into intangible assetswith limited useful life and assets without certain service life.
1. Intangible assets with limited useful lifeThose intangible assets with limited useful life are evenly amortized on straight basis from the date when theybecome useable to the end of expected useful life. Particular about the estimation on intangible assets with limitedservice life:
ItemPredicted useful life Basis
Amortized the actual rest oflife after cert ificate of land
use right obtained
Certificate of land use right
Land use rightProprietary technology
20-year Actual situation of the Company
| Proprietary technology |
| Forest tree use right |
Service life arranged Protocol agreement
10-year Actual situation of the Company
Trademark use rightSoftware use right
5-8-year Protocol agreement
At end of report term, revising will be performed on the useful life of intangible assets with limited useful life andthe methods of amortizing; if there is a differences been found with the original estimated number, correspondingadjustment shall prevail.
Being revised, the useful life of intangible assets and amortization method at period-end shows the same asprevious
2. Intangible assets without certained service lifeIntangible assets for which it is impossible to predict the term during which the assets can bring in economicbenefits are viewed as intangible assets with indefinite life.
Intangible assets with indefinite life are not amortized during the holding period, and useful life is re-reviewed atthe end of e ach accounting period. In case that it is still determined as indefinite after s uch re-review, thenimpairment test will be conducted continuously in every accounting period.
The Company has no such intangible assets without certained service life after review.(2) Internal accounting policies relating to research and development expenditures
1. Detail standard for classification on research stage and exploitation stageResearch stage: stage of the investigation and research activities exercising innovative-ness for new science ortechnology knowledge obtained and understanding.
Exploitation 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.
The expenditure of the research stage in R&D project internally shall reckon into current gains and losses whileoccurred.
2. Standards for capitalization satisfaction of expenditure in exploitation stateIntangible 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 owesa market or owes a market for itself; if the intangible assets will use internally, than show evidence of useful-ness;(4) Possess sufficient technique, financial resources and other resources for the development of kind of intangibleassets and has the ability for used or for sale;(5) The expenditure attributable to the exploitation stage for intangible assets could be measured reliably.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 in
balance sheet as development expenditure, and is transferred to intangible assets when the project is ready forplanned use.
21. Impairment of long term assetsLong term asset is judged whether for which there is indication of impairment on balance sheet date. If there is
indication of impairment, the Company would estimate its recoverable amount b ased on single asset; if it isdifficult to esti mate the recoverable amount of single asset, then the assets group which the single asset belongs tois based to determine the recoverable amount of the assets group.
Recoverable amount of an asset is determined at the higher of its fair value less disposal fee and present value ofits predicted future cash flow.
If measurement of recoverable amount shows that the recoverable amount of long term asset is lower thancarrying value, and then the carrying value shall be deducted to recoverable amount, with the deducted amountrecognized as impairment loss which is included in current period gains and losses, meanwhile, asset impairmentprovision shall be made accordingly. Once recognized, asset impairment loss would not be reversed in futureaccounting period.
Once an asset is recognized for impairment loss, its depreciation or amortization expense would be adjusted infuture periods, so as to systematically allocate the adjusted asset carrying value (after deduction of predicted netresidual value) during the remaining useful life.
Goodwill arising from business combination and intangible assets with indefinite useful life shall be testedannually for impairment whether or not there is indication of impairment.
When goodwill impairment testing comes, book value of goodwill is allocated to asset group or combinationbenefit from the synergies of the business combination. When conducting impairment test for relevant asset groupwith inclusion of goodwill, in case that there is indication of impairment for such asset group, impairment testwould be firstly conducted in respect of the asset groups without inclusion of goodwill. Then, it shall calculate therecoverable amount and determine the corresponding impairment loss as compared to its carrying value. Second,asset group with inclusion of goodwill would be tested for impairment. If it is found after comparison between thecarrying value and recoverable amount of the asset group that the recoverable amount is less than carrying value,the Company would recognize impairment loss for goodwill.
22. Long term prepaid expenseLong term prepaid expense represents the expense which the Company has occurred and shall be amortized in the
current and later periods with amortization period exceeding one year. Long term prepaid expense is amortized
during the beneficial period under straight line method.23. Staff remuneration(1) Short term remunerationEmployee remuneration refers to the various forms of remuneration or compensation given by the Company to
obtain the services provided by the employees or to terminate the labor relations. Employee remuneration includesshort-term remuneration, after-service benefits, dismissal benefits and other long-term employee benefits.
Short term r emunera tion ref ers to a ll the staff remuneration payable by the Company to its staff within 12 monthsafter the end of annual reporting period in which staff provides relevant services, other than post office benefit anddismissal benefits. The Company recognizes short term remuneration payables as liabilities during the accountingperiod during which staff provides services, and includes in cost and expense of relevant asset according to thebeneficial parties of such services.
(2) Post office benefitsPost office benefits refer to kinds of remuneration or benefits granted by the Company to staff for their provision
of service upon retirement or release of employment, other than short term remuneration and dismissal benefits.
Post benefit plan is categorized as defined withdraw plan.
Defined withdraw plan under post office benefit mainly represents participation into social basic pensioninsurance and unemployment insurance operated by labor and social security authorities. During the accountingperiod when employee provides services for the Company, the contribution calculated under defined withdrawplan 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.
(3) Dismissal benefitDismissal benefit represents compensation paid to employees for release of employment before expiration or as
compensation for their willing of cut, Liabilities arising from dismiss benefit shall be included in current profitand loss when the Company cannot unilaterally withdraw from the termination plan or take redundancy offer andwhen reorganize the payment of termination benefits related to the cost.
(4) Other long term staff benefitsOther long term staff benefits refers to all the other staff benefits except for short term remuneration, post office
benefit and dismissal benefit.
For other long term staff benefits satisfying conditions under defined withdraw plan, the contribution payablesshall be recognized as liabilities and included in current gains and losses or relevant asset cost during theaccounting period in which the staff provides services to the Company.
24. Accrual liability1. Recognition standards for accrual liability
Responsibilities connected to contingent issues and satisfied all of the following conditions are recognized asaccrual liabilities:
The responsibility is a current responsibility undertaken by the Company;Fulfilling of the responsibility may lead to financial benefit outflow;The responsibility can be measured reliably for its value.
2. MeasurementAccrual liabilities sha ll conduct initial measurement by b est estimation of expenditures need ed by fulfillment ofcurrent responsibilities.
While determined the best estimation, take the risks, uncertainty and periodic value of currency that connected tothe contingent issues into consideration. For major influence from periodic value of currency, determined bestestimation after discount on future relevant cash out-flow.
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 therange, the possibility amount shall determined as the best estimation while single events involved by contingency;if many events were involved by contingency, the best estimation shall be determined by various results andrelevant probability.
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 compensatedamount shall not greater than the book value of the predictive liability
25. Revenue
Whether the Company needs to comply with the disclosure requirements of the particular industry
No
1. Recognition of the income from commodity salesWhen main risks and rewards attached to the ownership of goods have been transferred to the buyer, reservedneither continuous management power nor effective control over the goods, incoming payment can be measuredreliably, relative financial benefit possibly inflow to the Company, cost occurred or will occur can be reliablymeasured, sales income of goods is recognized.
The product sales of the Company i nclude 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 thecontract.
2. Basis on use right income for transaction assetsFinancial benefit attached to the contract is possibly inflow to the Company; Overall income of the contract can be
measured reliably. Determined the use right income for transaction assts 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.
26. Government Grants(1) Determination basis and accounting for government grants related to assets1.Type
Governments grants of the Company refer to the monetary and non-monetary assets obtained from governmentfor free, and are divided into those related to assets and others related to revenues.
Government subsidies related to assets refer to those obtained by the Company and used for purchase orconstruction of or otherwise to form long-term assets. Government subsidies related to revenue refer to those otherthan government subsidies related to assets.
2. Confirmation of government subsidyAt end of the period, if there is evidence show that the Company qualified relevant condition of fiscal supportingpolices and such supporting funds are predicted to obtained, than recognized the amount receivable as governmentsubsidy. After that, government subsidy shall recognize while actually received.
Government subsidies in the form of monetary assets are stated at the amount received or receivable. Governmentsubsidies in the form of non-monetary assets are measured at fair value; if fair value cannot be obtained, a
nominal amount (RMB1) is used. Government subsidies measured at nominal amount is recognized immediatelyin profit or loss for the current period.
3. Methods of accounting treatmentGovernment grants in relation to purchase of long-term assets such as fixed assets or intangible assets shall berecognized as deferred income. And reckoned into gains/losses by installment with reasonable and systematicapproach according to the useful life of such asserts that purchased or constructed
(2) Determination basis and accounting for government grants related to incomeAs for the government grants with income concerned, which has compensated relevant expenses and losses
occurred i n later period, than recognized as deferred income, and reckoned into current gains/losses during theperiod while relevant expenses or losses determined; for those government grants which has compensated relevantexpenses and losses that occurred, reckoned into current gains/losses while acquired.
Government grants relevant to daily activities of enterprises are included in other income; government grantsirrelevant to daily activities of enterprises are included in non-operating income and expenditure.
The government subsidy relevant to discounted interest on policy concessional loans is used to offset the relevantborrowing costs; the fair value of borrowings is used as the entry value of borrowings and the borrowing costs arecalculated according to the actual interest rate method, the balance between the actual amount received and thefair value of borrowings is recognized as deferred income. Deferred income is amortized to offset the relatedborrowing costs by adopting the actual interest rate method in duration of borrowings.
When a recognized government grant needs to be returned, adjust the book value of assets if it is used to offset thebook value of underlying assets at initial recognition; if there is a related deferred income balance, offset the bookbalance of relevant deferred income, and include the excess in current profit or loss; if there is no related deferredincome, and directly include in the current profit or loss.
27. Deferred income tax assets and deferred income tax liabilitiesDeferred income tax assets and liabilities are measured and recognized based on the difference (temporary
difference) between the taxation bases of the assets and liabilities and their carrying value. As of the balance sheetdate, deferred income tax assets and liabilities are measured at the tax rate applicable during the period in whichthe assets are recovered or liabilities are settled.
1. Reference for recognition of deferred income tax assetsDeferred income tax asset arising from deductible temporary difference is recognized to the extent of assessableincome which is likely to acquire to offset deductible temporary difference and for which deductible losses andtax credit for subsequent years can be carried forward. However, deferred income tax assets arising from initial
measurement of assets or liabilities in transactions with the following characteristics would not be recognized: (1)the transaction is not business combination; (2)occurrence of the transaction would neither affect accounting profitnor affect assessable income or deductible loss.
For deductible temporary difference relating to investment in associates, the Company would recognize deferredincome tax assets accordingly if the following conditions are met: temporary difference is likely to be reversed inforeseeable future and it is likely to acquire assessable income against which deductible temporary difference isutilized.
2. Basis for determination of deferred income tax liabilitiesAssessable temporary difference which should be paid while not paid yet for the current and previous periods isrecognized as deferred income tax liabilities, excluding:
(1) Temporary difference arising from initial measurement of goodwill;(2) Transaction or issue arising from non business combination, and its occurrence would neither affectaccounting profit, nor affect temporary difference arising from assessable income (or deductible loss);(3) For assessable temporary difference relating to investments in subsidiary or associate, timing for reversal ofthe temporary difference can be controlled and it is likely that the difference would not be reversed in foreseeablefuture.
3. Deferred tax assets and liabilities are offset if all the following conditions are met.(1) An enterprise has the legal rights to settle the income tax assets and income tax liabilities for the current periodby net amount;
(2) They relate to income taxes levied by the same tax authority on either the taxable entity has a legallyenforceable right or set off current income tax assets against current income tax liabilities, and different taxableentities which either intend to settle th e current income tax liabilities and assets on a net basis, or to realize theassets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred taxliabilities or assets are expected to be settled or recovered.
28. Lease(1) Accounting for operating leaseIf the lease terms substantially transfer all risks and rewards related to the ownership of leased asset to the lessee,
the lease is a finance lease and the other leases are operating leases.1. Accounting for operating lease(1) Assets lease-in by Operating:
The rental fee paid for renting the properties by the Company are amortized by the straight-line method andreckoned in the current expenses throughout the lease term without deducting rent-free period. The initial direct
costs related to the lease transactions paid by the Company are reckoned in the current expenses.
When the lessor undertakes the expenses related to the lease that should be undertaken by the Company, theCompany shall deduct the expenses from the total rental costs, share by the deducted rental costs during the leaseterm, and reckon in the current expenses.
(2) Operating leased assets:
Rental obtained from assets leasing, during the whole leasing period without rent-free period excluded, shall beamortized by straight-line method and recognized as l easing revenue. The initial direct costs paid with leasingtransaction concerned are reckoned into current expenditure; the amount is larger is capitalized when incurred,and accounted for as profit or loss for the current period on the same basis as recognition of rental income over theentire lease period.
When the Company undertakes the expenses related to the lease that should be undertaken by the lessor, theCompany shall deduct the expenses from the total rental income, and distribute by the deducted rental costs duringthe lease term.
(2) Accounting for financing lease1. Accounting for financing lease
(1) Assets lease-in by financing: On the beginning date of the lease, the entry value of leased asset shall be at thelower of the fair value of the leased asset and the present value of minimum lease payment at the beginning dateof the lease. Minimum lease payment shall be the entry value of long-term accounts payable, with differencerecognized as unrecognized financing expenses.
The basis, valuation and depreciation method of financing lease assets see Note IV-(XVI) Fixed Assets.
Unrecognized financing expenses shall be reckoned in financial expenses and amortized and using ef fectiveinterest method during the leasing period.
(2) Finance leased assets: on the lease commencement date, the Company affirms the balance among the financelease receivables, the sum of unguaranteed residual value and its present value as the unrealized financing income,and recognizes it as the rental income during the period of receiving the rent. For the initial direct costs related tothe rental transaction, the Company reckons in t he initial measurement of the finance lease receivables, andreduces the amount of income confirmed in the lease term.
29. 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
VI. Taxes
1. Type of tax and rate for main applicable tax
Taxes Basis RateVAT
Service incom e f rom goods sales andtaxable sales
17%, 11%, 6%, 5%, 3%Urban maintenance and construction taxTurnover tax payable 5%, 7%
Educational surtaxTurnover tax payable 5%
Rate of in come tax f or different taxpaying body:
Taxpaying body Rate of income taxThe Company 25%Shenbao Huacheng 15%Including: Shantou Branch of Shenbao Huacheng 25%Wuyuan Ju Fang Yong 25%Shenbao Sanjing 25%Huizhou Shenbao Science & Technology 25%Huizhou Shenbao Food 25%Shenbao P roperties 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%
Jufangyong Trading 25%Shenbao R oc k Tea 25%Pu’er Tea Trading Cen ter 25%Shenbao Tea-Shop 25%Fuhaitang Restaurant 25%
2. Tax preferential and basisShenbao Huacheng, a wholly-owned subsidiary of the Company, has been granted High-tech Enterprise
Certifica tion (No . GR201744203462) jointly promulgated by Shenzhen Commission on Innovation & Technology,Shenzhen Finance Committee, Shenzhen Municipal Bureau of State Taxation and Shenzhen Municipal Bureau ofLocal Taxation as at the date of 31 Oct. 2017 with a valid term of 3 years. With relevant preferential policiesadopted by the State in favor of high-tech enterprises, all qualified high-tech enterprises are able to enjoy thelower income tax rate of 15% for collection of enterprise income tax, capable for 3 years commencing from theyear when they are deemed as qualified. Shenbao Huacheng has favored from this preferential policy from 2017to 2019.
VII. Annotation to main items of consolidated financial statements
1. Monetary fund
In RMB
| Item | Closi ng balance | Opening balance |
| Cash on hand |
441,516.36
194,650.44
| Cash in ba nk | 222,905,150.08 |
255,448,120.29
| Other monetary fund |
318,879.68
| Total | 223,346,666.44 |
255,961,650.41
Other noteThe Company did not has account pledge, freeze or has potential risks in collection ended as 30 June 2018.
2. Financial assets measured by fair value and with the variation recorded into current gains/losses
In RMBItem Closing balance Opening balanceTradable financial ass ets 1,173,950.05
| 1,599,668.20 |
Equity investment 1,173,950.05
| 1,599,668.20 |
Total 1,173,950.05
| 1,599,668.20 |
Other explanation:
Closing balance refers to the 258,011 shares of A-stock under the name of “Shen Zhonghua-A”
3. Account receivable(1) Account receivable classified according to types
In RMBType
Closing balance Opening balanceBook balanceBad debt provision
Bookvalue
Book balanceBad debt provision
Book value
Amount Ratio Amount
Accrual
Ratio
Amount
Ratio Amount
Accrual
Ratio
| Account receivable |
withdrawal bad de
66,342,7
42.62
| bt provision by group of credit risk characteristics |
76.61%
1,285,61
5.57
1.94%
65,057,12
7.05
| 78,480, |
035.29
| 79.49% |
1,286,967
.26
1.64%
| 77,193,068. |
| Account receivable with single minor amount but withdrawal bad debt provision for single item |
20,254,4
11.14
23.39%
20,254,4
100.00%
| 11.14 | 20,254, |
411.14
| 20.51% | 20,254,41 |
1.14
100.00%
Total
86,597,1
53.76
100.00%
21,540,0
26.71
24.87%
65,057,12
7.05
| 98,734, |
446.43
| 100.00% |
21,541,37
8.40
21.82%
| 77,193,068. |
Account receivable with single significant amount and withdrawal bad debt provision separately at period end:
□Applicable √ Not applicable
Account receivable with bad debt provision withdrawal by age analysis in group:
√ Applicable □ Not applicable
In RMBAge
Closing balanceAccount receivable Bad debt reserve Accrual ratioSub item of within one yearWithin 1 year
55,135,762.09
| 55,135,762.09 |
1-2 years
129,962.06
| 2,599,241.28 |
5.00%
2-3 years
| 2,710,147.67 |
271,014.76
| 10.00% |
Over 3 years
884,638.75
| 5,897,591.58 | 15.00% |
3-4years
516,194.04
| 3,441,293.53 | 15.00% |
4-5 years
18,302.25
| 122,015.02 | 15.00% |
5years above 2,334,283.03
350,142.46
| 15.00% |
Total
1,285,615.57
| 66,342,742.62 |
1.94%
Explanation on combination determines:
In combination, withdrawal proportion of bad debt provision based on balance proportion for account receivable
□ Applicable √ Not applicable
In combination, withdrawal proportion of bad debt provision based on other methods for account receivable:
(2) Bad debt provision accrual collected or switch back
Bad debt provision accrual of RMB 0; collected or switch back bad debt provision of RMB 1,351.69.Major bad debt provision collected or switch back:
In RMB
Name Amount Method
(3) Top 5 receivables at ending balance by arrears party
| Name | Closi ng balance | Proportion in total receivables at closing balance (%) | Bad debt provision accrual |
| Customer 1 | 13,202,096.00 | 15.25 |
---
| Customer 2 |
5.75
| 4,976,292.86 |
---
Customer 3
| Customer 3 | 3,472,370.90 |
4.01
| 493,436.36 |
| Customer 4 | 3,195,254.93 |
3.69
---
| Customer 5 |
2.26
| 1,958,919.74 |
---
Total
26,804,934.43
| 26,804,934.43 | 30.96 |
493,436.3
4. Account paid in advance(1) Aging analysis
In RMBAge
Closi ng balance Opening balanceAmount Ratio Amount RatioWithin 1 year
3,780,380.03
88.56%
| 3,780,380.03 | 11,179,178.48 |
94.84%
1-2years
| 81,498.64 |
1.91%
128,246.97
1.09%
2-3years
| 296,638.61 |
6.95%
369,435.97
3.13%
Over 3 years
| 110,571.40 |
2.58%
| 110,571.40 |
0.94%
Total
| 4,269,088.68 |
--
--Reasons for significant repayment with over one year age without settle:
Nil
(2) Top 5 accounts paid in advance at closing balance collected by objects
Name Closing amount
11,787,432.82Ratio in total
acc ount pa id i n
advance (%)
Time Unsettled reasons
| Ratio in total acc ount pa id i n advance (%) | ||
| Supplier 1 |
| 2,303,251.58 | 53.95 |
Within 1 year The contract is being carried
out
| Supplier 2 | 611,965.84 | 14.33 |
Within 1 year The contract is being carried
out
plier 3
| Sup | 273,556.80 |
6.41
Within 1 year The contract is being carried
out
| Supplier 4 | 219,257.92 |
5.14
Within 1 year The contract is being carried
out
| Supplier 5 |
3.82
| 163,000.00 |
Within 1 year The contract is being carried
outTotal
| 3,571,032.14 | 83.65 |
Other note:
Nil
5. Other account receivable(1) Other account receivable classified according to types:
In RMBType
Closing balance Opening balance
| Book balance | Bad debt provision |
Bookvalue
| Book balance | Bad debt provision |
Book value
Amount Ratio Amount
Accrual
ratio
Amount
| Ratio |
Amount
Accrual
ratio
20,182,0
46.51
| Other account receivable with single major amount and withdrawal bad debt provision for single item |
39.73%
9,275,91
2.22
45.96%
10,906,13
4.29
| 19,977, |
283.01
| 39.50% |
9,071,148
.72
45.41%
| 10,906,134. |
| Other account |
receivable
12,884,6
32.91
| withdrawal bad debt provision by group of credit risk characteristics |
25.37%
463,167.
3.59%
12,421,46
5.38
| 12,872, |
295.52
| 25.45% |
466,830.1
3.63%
| 12,405,465. |
| Other account receivable with |
single
17,723,4
55.12
| minor amount but withdrawal bad debt provision for single item |
34.90%
17,723,4
55.12
100.00%
| 17,723, |
455.12
| 35.05% |
17,723,45
5.12
100.00%
Total
50,790,1
34.54
100.00%
27,462,5
34.87
54.07%
23,327,59
9.67
| 50,573, |
033.65
| 100.00% |
27,261,43
3.98
53.91%
| 23,311,599. |
Other receivable with single significant amount and withdrawal bad debt provision separately at end of period:
√ Applicable □ Not applicable
In RMBAccountreceivable(units)
Closing balanceAccount receivable Bad debt reserve Accrual ratio ReasonsChangzhou ShenbaoChacang E -commenceCo., Ltd. (“ChangzhouShenbao ChacangCompany” for short)
20,182,046.51
| 20,182,046.51 | 9,275,912.22 |
45.96%
The difference b etweenthe present value offuture cash flow andbook val ue will accrualfor bad debt provisionTotal
| 20,182,046.51 | 9,275,912.22 |
-- --
Other receivable with bad debt provision withdrawal by age analysis in group:
√ Applicable □ Not applicable
In RMBAge
Closing balanceOther accounts receivable Bad debt provision Accrual ratioSub item of within one yearWithin 1 year
| 7,780,249.90 |
1-2 years
125,294.83
| 2,505,896.54 |
5.00%
2-3 years
| 1,038,005.19 |
103,800.52
| 0.00% |
Over 3 years
234,072.18
| 1,560,481.28 | 15.00% |
3-4 years
14,234.51
| 94,896.77 | 15.00% |
4-5 years
| 748,187.20 | 112,228.08 | 15.00% |
5 years above
107,609.59
| 717,397.31 | 15.00% |
Total
463,167.53
| 12,884,632.91 |
3.59%
Explanations on combination determine:
In combination, withdrawal proportion of bad debt provision based on balance proportion for other account receivable:
□ Applicable √ Not applicable
In combination, withdrawal proportion of bad debt provision based on other methods for other account receivable:
□ Applicable √ Not applicable
(2) Bad debt provision accrual collected or switch back
Bad debt provision accrual was 204,763.50 Yuan; the amount collected or switches back amounting to 3,662.61 YuanMajor bad debt provision collected or switch back:
In RMBName Amount Method
(3) Nature classification for other receivables
In RMBItem Closing book balance Opening book balanceMargin and deposit
5,752,273.11
| 5,752,273.11 | 4,540,242.47 |
VAT rebates receivables339,104.64
| 733,709.16 |
Intercourse funds and other44,698,756.79
| 45,299,082.02 |
Total50,790,134.54
| 50,573,033.65 |
(4) Top five units in other account receivable at closing balance
In RMB
| Name | Amount nature | Closi ng balance | Age | Ratio in total other | Bad debt provision |
| account receivable at closing balance | Closi ng balance |
Changzhou ShenbaoChacang Company
Intercourse funds
Within 1 year, 1-3year and above
39.73%
| 20,182,046.51 | 9,275,912.22 |
Shichu MingmenCompany
Intercourse funds
Within 1 year and1-2 year
3.14%
| 1,596,491.82 | 53,585.30 |
Hang z hou Xia os hanInternational A irportCo., Ltd.
Deposit
Within 1 year and1-2 year
2.65%
| 1,344,149.95 | 22,875.00 |
Sutingdian Rent 964,365.25
Within 1 year and1-2 year
1.90%
| 18,460.20 |
Hang z hou Xia os hanInternational A irportZheji ang BrigadeHotel Co., Ltd.
Deposit 729,166.64
Within 1 year and1-3 year
1.44%
4,000.00
Total --
| 24,816,220.17 |
-- 48.86%
| 9,374,832.72 |
6. Inventory(1) Types
In RMBItems
Closi ng balance Opening balanceBook balance
Book value Book balance
| Falling price reserves | Falling price reserves |
Book valueRaw materials73,044,104.81
| 4,281,853.67 |
68,762,251.14
77,403,549.46
| 4,385,924.31 |
73,017,625.15
Goods in proc e s s 30,662,696.94
219,554.80
30,443,142.14
28,569,954.36
| 264,169.09 | 28,305,785.27 |
Finished goods50,835,159.71
| 1,166,164.97 |
49,668,994.74
| 44,089,811.15 | 1,184,370.13 | 42,905,441.02 |
Goods in transit 6,417,149.54
6,417,149.54
5,475,723.52
| 5,475,723.52 |
Materials
commission
5,456,948.02
| processed on | 5,290,502.32 |
166,445.70
5,394,430.47
| 5,290,502.32 | 103,928.15 |
Wrappage 6,662,150.03
6,662,150.03
5,497,605.83
| 5,497,605.83 |
Total 173,078,209.05
| 10,958,075.76 |
162,120,133.29
166,431,074.79
| 1,124,965.85 | 155,306,108.94 |
Does the Company comply with the disclosure requirement of “Information Disclosure Guidelines of Shenzhen Stock ExchangeNo.4 – Listed Companies Engaged in Seed Industry and Planting Business” or notNo
(2) Inventory falling price reserves
In RMBTypeOpening balance Current amount increased Current amount decreased Closing balance
Accrual Other
Switch b ack/
Written off
Other
4,385,924.31
| Raw materials |
104,070.64
| 4,281,853.67 | ||||
| Goods in proc e s s |
264,169.09
44,614.29
| 219,554.80 | ||||
| Finished goods |
1,184,370.13
18,205.16
| 1,166,164.97 | ||||
| Work in process-outsourced |
5,290,502.32
| 5,290,502.32 |
Total
| 11,124,965.85 |
166,890.09
| 10,958,075.76 |
(3) Explanation on inventories with capitalization of borrowing costs included at ending balance
Nil
(4) Assets unsettled formed by construction contract which has completed at period-end
In RMBItem AmountOther note:
Nil
7. Other current assets
In RMBItem Closing balance Opening balanceVAT input tax ready for deduction2,071,685.68
| 2,712,300.53 |
Financial products held to maturity withinone year
30,000,000.00
Other
| 46,194.46 |
Total 32,071,685.68
| 2,758,494.99 |
Other note:
Nil
8. Financial assets available for sale(1) Financial assets available for sale
In RMBItem
Closi ng balance Opening balanceBook balance
Book balance
| Depreciation reserves | Depreciation reserves |
Book balance
Instrument equityavailable for sale:
17,537,500.00
| Depreciation reserves | ||||
| 17,480,000.00 | 57,500.00 |
17,537,500.00
| 17,480,000.00 |
57,500.00
Measured by cost17,537,500.00
| 17,480,000.00 | 57,500.00 |
17,537,500.00
| 17,480,000.00 | 57,500.00 |
Total17,537,500.00
| 17,480,000.00 | 57,500.00 |
17,537,500.00
| 17,480,000.00 | 57,500.00 |
(2) Financial assets available for sale measured by cost at period-end
In RMBInvestee
unit
Book balance Depreciation reserves Ratio of
share-holdi
ng ininvested
entity
Current
cashdividend
Openingbalance
Currentincreased
Currentdecreased
Closingbalance
Openingbalance
Currentincreased
Currentdecreased
Closingbalance
SanjiuWeitaiCapsules
| Co., Ltd. |
2,480,000.
| 2,480,000. |
2,480,000.
| 2,480,000. |
0.95%
| Shenzhen |
TianjiPhotoelectricIndustrialCo., Ltd.
(FormerShenzhenTianjiPhotoelectricTechnologyIndustrial
| Co., Ltd.） |
15,000,000
.00
.00
15,000,000
.00
| 15,000,000 |
.00
3.77%
| Beijing |
Tiantan
57,500.00
| Co., Ltd. | 57,500.00 |
Total
17,537,500
.00
| 17,537,500 |
.00
17,480,000
.00
| 17,480,000 |
.00
--
(3) Change of financial assets depreciation for sale during reporting period
In RMBType
Instrument equityavailable for sale
Instrument debtavailable for sale
TotalBalance of accrual at
period-begin
| 17,480,000.00 | 17,480,000.00 |
Balance of accrual atperiod-end
| 17,480,000.00 | 17,480,000.00 |
9. Long-term equity investment
In RMB
Investee
unit
Opening
bookbalance
-,+ in the Period
Closing
bookbalance
Endingbalance
ofimpairme
ntprovision
Additiona
linvestmen
t
Capital
Investment gainsrecognize
d underequity
Othercomprehe
nsiveincomeadjustmen
t
Otherequitychange
| reduction |
Cashdividendor profitannounce
d toissued
Impairme
Other
I. Joint ventureII. Associated enterpriseShenzhenShenbao(Xinmin)FoodsCo.,Ltd*1
2,870,000
.00
nt accrual
2,870,000
.00
2,870,000
.00
ChangzhouShenbaoChacangE-commence Co.,Ltd *2
| Shenzhen |
Shenbao(Liaoyuan)IndustrialCo.,
57,628.53
| Ltd.*1 |
57,628.53
57,628.53
| Huizhou |
Shenbao
Bio-technology
| Co., Ltd. |
1,054,948
.13
575.38
1,055,523
.51
ShenzhenShichumingmenRestaurantManagement Co.,Ltd. *2
GuangzhouShenbaoMendaoTea Co.,
4,193,681
.53
-185,480.
4,008,201
.16
Ltd.Subtotal
8,176,258
.19
-184,904.
7,991,353
.20
2,927,628
.53
Total
8,176,258
.19
-184,904.
7,991,353
.20
2,927,628
.53
Other explanation
*1: these two companies have been established for a long time. At the cu rrent stage, their business licenses have been revoked.Impairment provision is made in full due to absence of settlement.*2: the long-term equity invesment for Changzhou Shenbao Chacang Company and Shichumingmen Company which is measured byequity; the book balance counted as Zero for losses in the two abovementioned enterprises
10. Investment real estate(1) Investment real estate measured at cost
√ Applicable □ Not applicable
In RMBItemHouse and building Land use right Construction in process
Total
| I. Total original book value |
1. Opening balance
| 19,834,643.51 | 19,834,643.51 | |||
| 2. Current amount increased |
(1) Purchase
| (2) Stock\fixed assets |
\Transfer-in from
| constr uc t i on i n pr oc e s s | ||||
| (3) Increased by combination |
| 3. Current amount decreased |
(1) Disposal
(2) Other transfer-out
4. Closing balance
| 19,834,643.51 | 19,834,643.51 | |||
| II. accumul ated |
depreciation andaccumulated
| amortization |
1. Opening balance
| 1,433,368.48 | 1,433,368.48 | |||
| 2. Current amount increased | 235,795.16 | 235,795.16 | ||
| (1) Accrual or amortization | 235,795.16 | 235,795.16 |
| 3. Current amount decreased |
(1) Disposal
(2) Other transfer-out
4. Closing balance
| 1,669,163.64 | 1,669,163.64 |
III. Impairment provision
1. Opening balance
| 2. Current amount increased |
(1) Accrual
| 4. Current amount decreased |
(1) Disposal
(2) Other transfer-out
4. Closing balance
IV. Book value Total
1. Ending book value
| 18,165,479.87 | 18,165,479.87 |
2.Openingbook value
| 18,401,275.03 | 18,401,275.03 |
(2) Investment real estate measured by fair value
□ Applicable √ Not applicable
11. Fixed assets(1) Fixed assets
In RMBItem House & buildings
| Machinery equipment | Transportation facilities |
Other equipment Total
| I. Total original book value |
1. Opening balance
| 256,254,642.80 | 234,122,882.07 |
| ,116,373.26 | 17,085,662.59 | 514,579,560.72 | |||
| 2. Current amount increased | 256,230.99 |
3,200.00
| 164,721.86 | 424,152.85 |
(1) Purchase
| 256,230.99 |
3,200.00
| 164,721.86 | 424,152.85 | |||
| (2) Transfer-in from |
constr uc t i on i n
| process | |||||
| (3) Increased by combination |
| 3. Current amount decreased |
7,855.55
| 151,460.79 | 159,316.34 | ||||
| (1) Disposal or scrap |
7,855.55
| 151,460.79 | 159,316.34 |
4. Closing balance
| 256,254,642.80 | 234,371,257.51 | 7,119,573.26 | 17,098,923.66 | 514,844,397.23 | |
| II. accumul ated depreciation |
1. Opening balance
| 36,187,842.08 | 144,793,412.44 |
4,614,980.16
| 9,596,679.77 | 195,192,914.45 | ||||
| 2. Current amount increased | 3,636,294.36 | 5,420,921.95 |
274,055.32
| 1,047,855.24 | 10,379,126.87 |
(1) Accrual
| 3,636,294.36 | 5,420,921.95 |
274,055.32
1,047,855.24
| 10,379,126.87 |
| 3. Current amount decreased |
1,895.92
| 45,718.77 | 47,614.69 | ||||
| (1) Disposal or scrap |
1,895.92
| 45,718.77 | 47,614.69 |
4. Closing balance
| 39,824,136.44 | 150,212,438.47 |
4,889,035.48
| 10,598,816.24 | 205,524,426.63 | ||||
| III. Impairment provision |
1. Opening balance
| 1,355,290.18 | 4,288,951.37 | 5,644,241.55 | |||
| 2. Current amount increased |
(1) Accrual
| 3. Current amount decreased | |||||
| (1) Disposal or scrap |
4. Closing balance
| 1,355,290.18 | 4,288,951.37 | 5,644,241.55 |
IV. Book value Total
| 1. Ending book value | 215,075,216.18 | 79,869,867.67 |
2,230,537.78
| 6,500,107.42 | 303,675,729.05 | ||||
| 2.Openingbook value | 218,711,510.54 | 85,040,518.26 |
2,501,393.10
| 7,488,982.82 | 313,742,404.72 |
(2) Certificate of title un-completed
In RMBItem Book value ReasonsHouse and building 1,679,436.07
In progress
Other note
Nil
12. Construction in process(1) Construction in process
In RMB
Item
Closi ng balance Opening balanceBook balance
Book value Book balance
| Depreciation reserves | Depreciation reserves |
Book value
project
3,842,333.64
| Shenbao Plaza | 3,842,333.64 |
3,842,333.64
| 3,842,333.64 |
Other 1,767,365.07
903,189.74
| 864,175.33 |
1,038,108.65
| 903,189.74 |
134,918.91
Total 5,609,698.71
| 4,745,523.38 | 864,175.33 |
4,880,442.29
| 4,745,523.38 |
134,918.91
13. Productive biological assets(1) Productive biological asset s measured by cost
√ applicable □ not applicable
In RMBItem Plant Livestock Forestry Fisheries Total
Tea tree
I. Total original bookvalue
| I. Total original book value |
1. Opening balance
436,156.00
| 436,156.00 | |||||
| 2. Current amount increased |
(1) Purchase
(2) Self-cultivate
| 3. Current amount decreased |
(1) Disposal
(2) Other
4. Closing balance
436,156.00
| 436,156.00 | |||||
| II. accumul ated depreciation |
1. Opening balance
19,384.72
| 19,384.72 | |||||
| 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. Closing b alance
24,230.90
| 24,230.90 | |||||
| III. impairment provision |
1. Opening balance
| 2. Current amount increased |
(1) Accrual
| 3. Current amount decreased |
(1) Disposal
(2) Other
4. Closing balance
IV. Book value Total
| 1. Ending book value | 411,925.10 | 411,925.10 | |||
| 2.Openingbook value |
416,771.28
| 416,771.28 |
(2) Productive biological asset s m eas ured by fair value
□ Applicable √ Not applicable
14. Intangible assets(1) Intangible assets
In RMBItem Land using right PatentUn-patent tech Other Total
| I. Total original book value |
1. Opening balance
| 172,549,352.87 | 46,264,718.89 |
5,159,737.87
| 22,871,704.98 | 246,845,514.61 | ||||
| 2. Current amount increased |
1,200.00
23,931.62
| 25,131.62 |
(1) Purchase
1,200.00
23,931.62
| 25,131.62 |
(2) Internal R&D
(3) Increased bycombination
| 3. Current amount decreased |
(1) Disposal
4. Closin g balance
| 172,549,352.87 | 46,265,918.89 |
5,183,669.49
| 22,871,704.98 | 246,870,646.23 | ||||
| II. accumul ated depreciation |
1. Opening balance
| 28,710,317.15 | 22,367,888.26 |
1,591,147.47
| 3,855,071.41 | 56,524,424.29 | ||||
| 2. Current amount increased | 1,752,219.66 |
1,2
279,199.92
| 66,361.14 | 192,540.11 | 3,490,320.83 |
(1) Accrual
| 1,752,219.66 | 1,266,361.14 |
279,199.92
| 192,540.11 | 3,490,320.83 |
| 3. Current amount decreased |
5,793.60
5,793.60
(1) Disposal
5,793.60
5,793.60
4. Closing balance
| 30,462,536.81 | 23,628,455.80 |
1,870,347.39
| 4,047,611.52 |
60,008,951.52
| III. impairment provision |
1. Opening balance
| 1,869,502.01 |
1,130,341.88
| 2,999,843.89 | |||||
| 2. Current amount increased |
(1) Accrual
| 3. Current amount decreased |
(1) Accrual
4. Closing balance
| 1,869,502.01 |
1,130,341.88
| 2,999,843.89 |
IV. Book value Total
| 1. Ending book value | 142,086,816.06 | 20,767,961.08 |
2,182,980.22
| 18,824,093.46 | 183,861,850.82 | ||||
| 2.Openingbook value | 143,839,035.72 | 22,027,328.62 |
2,438,248.52
| 19,016,633.57 | 187,321,246.43 |
Ratio of the intangible assets from internal R&D in balance of intangible assets at period-end was 0.00%.
15. Development expenditure
In RMBItem
Openingbalance
Increase during the year Decreased during the year
ClosingbalanceProj ect I
| 368,238.39 | 368,238.39 |
Proj ect II
| 196,789.45 | 196,789.45 |
Proj ect III
| 217,102.93 | 217,102.93 |
P roject IV
| 308,331.96 | 308,331.96 |
Project V
| 183,925.29 | 183,925.29 |
Project VI
| 231,112.80 | 231,112.80 |
Total
| 1,505,500.82 | 196,789.45 | 1,308,711.37 |
Other noteNil
16. Goodwill(1) Original book value of goodwill
In RMBThe investedentity or items
Opening balance
Increase during the year Decreased during the year Closing balance
| Pu’er Tea Trading |
Center
673,940.32
| 673,940.32 |
Total 673,940.32
| 673,940.32 |
(2) Goodwill depreciation reserves
In RMBThe investedentity or items
Opening balance
Increase during the year Decreased during the year Closing balance
Pu’er Tea
Center
673,940.32
| Trading | 673,940.32 |
Total 673,940.32
| 673,940.32 |
Explain process of impairment test, index and determination:
NilOther note
Hangzhou Ju Fang Yong, a subsidiary of the Company, funded and purchased 15.00% stake of Yunnan Pu’er TeaExchange held by Yunnan Heng Feng Xiang Investment Co., Ltd. in May 2016. After the completion of thepurchase, the Company got command of Yunnan Pu’er Tea Exchange. The balance between the combined costand the fair value of net assets on the combining date formed goodwill of RMB 673,940.32.
17. Long-term deferred expense
In RMB
| Item | Opening balance | Current increased | Current amortization | Other decreased | Closi ng balance |
Decorati on charge
| 5,630,658.92 | 456,245.49 |
1,174,977.32
| 4,911,927.09 | ||||
| Affiliated project of |
reside
Juf a ngyong Wuyuan
| nt area in | 389,956.00 |
158,292.65
| 231,663.35 |
in Wuyuan
| Reform of tea park | 6,666.66 |
6,666.66
| Reform project of |
warehouse
| 1,054,663.93 |
324,849.18
| 729,814.75 | ||||
| Lease of workshop |
and office building
| 733,479.20 |
191,342.40
| 542,136.80 |
Other
| 3,321,343.09 | 1,440.00 |
243,373.20
| 3,079,409.89 |
Total
| 11,136,767.80 | 457,685.49 |
2,099,501.41
| 9,494,951.88 |
Other noteNil
18. Deferred income tax assets and deferred income tax liability(1) Deferred income tax assets without offset
In RMBItem
Closi ng balance Opening balance
| Deduct ible temporary differences | Deferred income tax assets | Deduct ible temporary differences | Deferred income tax assets | |
| Impairment provision for |
assets
| 19,343,409.96 | 4,835,852.49 |
19,149,097.09
| 4,784,661.61 |
Unrealized pr ofits ininternal transactions
533,133.30
| 2,132,533.20 | 2,518,115.62 | 629,528.91 |
Deferred income
| 441,538.48 | 110,384.62 |
441,538.48
| 110,384.62 |
Total
| 21,917,481.64 | 5,479,370.41 |
22,108,751.19
| 5,524,575.14 |
(2) Deferred income tax liability without offset
In RMBItem
Closi ng balance Opening balance
| Taxable temporary differences | Deferred income tax liability | Taxable temporary differences | Deferred income tax liability | |
| Asset evaluation increment of enterprise combine under different control |
4,308,645.52
| 1,077,161.38 |
4,460,386.00
| 1,115,096.50 |
Change of fair value forthe financial assetsavailable for sale
23,220.99
| 92,883.96 | 518,602.11 | 129,650.53 |
Total
| 4,401,529.48 | 1,100,382.37 | 4,978,988.11 | 1,244,747.03 |
(3) Deferred income tax assets and deferred income tax liabilities listed after off-set
In RMB
Item
Trade-off between the
deferred income taxassets and liabilities
Ending balance ofdeferred income taxassets or liabilities after
off-set
Trade-off between the
deferred income taxassets and liabilities at
period-begin
Opening balance ofdeferred income taxassets or liabilities after
off-setDeferred income taxassets
| 5,479,370.41 | 5,524,575.14 |
Deferred income taxliabilities
| 1,100,382.37 | 1,244,747.03 |
(4) Details of uncertain deferred income tax assets
In RMBItem Closing balance Opening balanceLosses deductible
| 149,227,820.13 | 125,382,554.44 |
Asset impairment provision
| 74,775,667.69 | 74,575,918.49 |
Total
| 224,003,487.82 | 199,958,472.93 |
19. Other non-current assets
In RMBItem Closing balance Opening balancePrepaid for equipment 734,465.84
| 484,108.52 |
total734,465.84
| 484,108.52 |
Other explanation:
Nil
20. Short-term loans(1) Short-term loans
In RMBType Closing balance Opening balanceGuarantee loan
| 10,000,000.00 |
Total
10,000,000.00
Note:
Nil
21. Account payables(1) Account payables
In RMBItem Closing balance Opening balanceMaterial payable
| 24,706,768.38 | 21,674,392.61 |
Trade accounts payable 1,988,272.30
| 1,494,694.23 |
Other 185,679.60
| 376,987.31 |
Total26,880,720.28
| 23,546,074.15 |
(2) Major accounts payable with age over 1 year
In RMBName Closing balanceReasons of outstanding or carry-over
Supplier 1518,655.52
Uncertain whether need to be paidSupplier 2 515,892.30
Uncertai n whether need to be paidTotal1,034,547.82
--Other note:
Nil
22. Account received in advance(1) Account received in advance
In RMBItem Closing balance Opening balanceWithin 1 year2,838,341.06
| 1,949,897.16 |
1-2 years156,956.35
| 132,674.36 |
2-3 years29,964.92
| 7,378.31 |
Over 3 years737,657.68
| 776,338.78 |
Total3,762,920.01
| 2,866,288.61 |
23. Wages payable(1) Wages payable
In RMBItem Opening balance Current increased Current decreased Closing balance
| I. Short-term compensation | 14,132,550.31 | 33,207,212.36 |
37,906,886.29
9,
| 432,876.38 | |||
| II. After -service |
welfare-defined
| contribution plans | 252,782.59 | 2,834,705.82 |
2,834,053.28
| 253,435.13 |
Total
| 14,385,332.90 | 36,041,918.18 |
40,740,939.57
| 9,686,311.51 |
(2) Short-term compensation
In RMBItem Opening balance Current increased Current decreased Closing balance
| 1. Wage, bonus, allowance and subsidy | 11,704,362.95 | 25,527,889.26 |
30,635,172.79
| 6,597,079.42 |
2. Employees’ welfare
| 3,733,726.42 |
3,733,726.42
| 3. Soci al insurance charges | 19,189.70 | 1,328,425.12 |
1,328,442.43
| 19,172.39 | ||||
| Including: basic medical insurance premium | 16,419.98 | 1,155,345.54 |
1,155,564.03
| 16,201.49 | |||
| Industrial injury |
insurance
802.47
| premiums |
85,621.72
85,612.73
811.46
| Maternity |
insurance
| premiums | 1,967.25 |
87,457.86
87,265.67
| 2,159.44 | ||||
| 4. Housing public reserve | 1,774,508.75 |
1,774,508.75
| 5. Trade union fee and education fee | 2,408,997.66 |
842,662.81
435,035.90
| 2,816,624.57 |
Total
| 14,132,550.31 | 33,207,212.36 |
37,906,886.29
| 9,432,876.38 |
(3) Defined contribution plans
In RMBItem Opening balance Current increased Current decreased Closing balance
| 1. Basi c endowment insurance premiums | 250,987.15 | 2,769,772.20 |
2,769,142.16
| 251,617.19 | ||||
| 2. Unemployment insurance premiums | 1,795.44 |
64,933.62
| 64,911.12 | 1,817.94 |
Total
| 252,782.59 | 2,834,705.82 |
2,834,053.28
| 253,435.13 |
Other note:
Nil
24. Tax payable
In RMBItem Closing balance Opening balanceVAT
| 1,035,163.80 | 1,504,443.80 |
Enterprise income tax
| 4,153,556.44 | 3,486,792.17 |
Personal income tax 45,905.74
| 466,035.81 |
Urban maintenance and construction tax
40,487.62
65,591.62
House property tax757,882.64
| 332,637.65 |
Surt ax for education expenses 33,823.36
| 54,877.18 |
Use tax of land385,407.85
| 615,768.07 |
Other t ax fee 121,260.63
| 79,040.14 |
Total
| 6,573,488.08 | 6,605,186.44 |
Other note:
Nil
25. Dividend payable
In RMBName Closing balance Opening balanceOther 2,909,182.74
| 2,909,182.74 |
Total2,909,182.74
| 2,909,182.74 |
Other note, including payable dividend unpaid with over one year, disclosure reasons:
Nil
26. Other account payables(1) Listed by age
In RMBItem Closing balance Opening balanceDeposit and margin2,582,816.84
| 618,257.53 | ||
| Engineering quality retention money and fund of tail |
1,335,256.49
| 1,121,662.69 |
Intercourse funds and other
| 19,976,370.84 | 19,592,619.66 |
Fund lending
| 10,024,009.82 | 11,480,398.73 |
Total
| 33,918,453.99 | 32,812,938.61 |
(2) Significant other payable with over one year age
In RMBItem Closing balance Reasons of un-paid or carry-overShen zhen Investment ManagementCompany
3,510,297.20
Histor ical paymentTotal 3,510,297.20
--Other noteNil
27. Deferred income
In RMBItemOpening balance
Increase during the
year
year
Closi ng balance CausesGovernment grants
| Decreased during the | ||
| 12,863,139.81 |
1,137,975.20
| 11,725,164.61 |
Total
| 12,863,139.81 |
1,137,975.20
| 11,725,164.61 |
--Items involving governance grants:
In RMBLiability
Openingbalance
Grantsincreased in
the Period
Amount
non-
| operating |
revenue
Amount
| reckoned into other revenue | Amount with |
costsreduction in
the period
Otherchanges
Endingbalance
Assets-related/income-rela
ted
| Subsidy for tea seeding of New Tea Garden in Wangkou | 47,239.24 |
554.64
| 46,684.60 |
Assets-related
| (Construction amount f or 50 tons for clearly processing for Mingyou tea | 625,000.00 | 625,000.00 |
Assets-related
project of
| instant tea power |
| 2,280,582.54 |
98,222.94
| 2,182,359.60 |
Assets-related
further
| processing for tea and nat ure |
plants
| 1,375,000.00 |
137,500.00
| 1,237,500.00 |
Assets-related
| Enterprise technology center is a municipal R&D center. Subsidies for industrial technological advancement | 2,191,325.64 |
102,012.30
| 2,089,313.34 |
Assets-related
| Subsidies for key technology | 167,256.22 |
7,122.51
| 160,133.71 | Assets-relate |
d
| research and industrialization of instant tea powder |
| Special funds for Shenzhen strategic emerging industrial development |
| 3,890,101.98 |
175,604.54
| 3,714,497.44 |
Assets-related
for years foragriculturaldistrict, XihuZone
| Proj ect g r ants | 441,538.48 | 441,538.48 |
Assets-related
Keytechnologyresearch anddevelopmentfor thepreparationofhigh-qualityaromaextractsbased on theuse of teaaromaprecursors
| 250,000.00 | 250,000.00 |
Assets-related
Keytechnologyresearch anddevelopmentfor thepreparationofhigh-qualityaromaextractsbased on theuse of teaaromaprecursors
| 524,800.00 | 65,968.11 | 458,831.89 |
Income-related
FinanceDiscount
| 1,070,295.71 |
550,990.16
| 519,305.55 |
Income-related
| Total | 12,863,139.8 |
1,137,975.20
| 11,725,164.6 |
--Other note:
Nil
28. Share capital
In RMB
Openingbalance
Increased (decreased) in this year +,-
Closingbalance
New shares
issued
Bonus shares
Shares
converted from
publi c reserve
Other Sub-totalTotal shares
| converted from | ||||||
| 496,782,303.00 | 496,782,303.00 |
Other note:
Nil
29. Capital reserves
In RMBItem Opening balance Current increased Current decreased Closing balanceCapital premium (Sharecapital premium )
| 358,180,412.46 | 358,180,412.46 |
Other capital reserve
| 818,943.82 | 818,943.82 |
Total
| 358,999,356.28 | 358,999,356.28 |
Other instructions, including changes in the current period, reasons for the change:
Nil
30. Surplus reserves
In RMBItem Opening balance Current increased Current decreased Closing balance
| Statutory surplus reserves | 54,736,482.14 | 54,736,482.14 |
Total
| 54,736,482.14 | 54,736,482.14 |
Other explanation, including changes and reasons for changes:
Nil
31. Retained profit
In RMBItemThis period Last period
| Retained profit at the end of the previous year before adjustment | 36,402,435.91 | 158,239,612.94 |
| Total retained profit at the beginning of the previous year before adjustment | 36,402,435.91 | 158,239,612.94 |
| Add: net profit attributable to shareholder of parent Company |
-
-
| 18,246,639.07 | 54,094,136.23 |
Dividend for common shares payable
| 22,581,013.80 |
Dividend of common shares transferred
| 45,162,027.00 |
Retained profit at the begin of the year afteradjustment
| 18,155,796.84 | 36,402,435.91 |
Details about adjusting the retained profits at the beginning of the period:
1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the retainedprofits at the beginning of the period amounting to 0 Yuan.2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 0 Yuan.3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0 Yuan4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to 0 Yuan.5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 Yuan
32. Operating income and Operating cost
In RMBItems
Current Period Last PeriodIncome Cost Income CostMain operating
| 132,834,925.50 | 95,903,674.12 |
136,473,406.96
103,1
| 82,564.29 |
Other operating
| 3,886,289.90 | 2,238,763.29 |
1,684,975.99
| 1,218,275.03 |
Total
| 136,721,215.40 | 98,142,437.41 |
138,158,382.95
| 104,400,839.32 |
32. Tax and surcharges
In RMBItem Current Period Last PeriodCity main tenance and construction tax 440,674.22
| 570,241.97 |
Educational fee and extra
345,778.29
| 437,060.65 |
Property tax 1,015,210.12
| 748,577.58 |
Land use tax 836,053.33
| 653,330.76 |
Stamp tax 62,257.12
| 45,522.53 |
Total2,699,973.08
| 2,454,733.49 |
Other note:
Nil
34. Sales expenses
In RMBItem Current Period Last Period
6,692,965.66
| Employee compensation and employee costs | 8,415,437.33 |
Rental and utilities4,605,741.44
| 4,486,810.13 |
Depreciat ion and amortization expenses1,017,306.02
| 1,306,854.39 |
Goods transport miscellaneous expenses3,840,171.84
| 3,571,058.05 | ||
| Sales discounts, promotion fee and |
advertising expenses
525,870.52
| 1,016,356.24 |
Daily office expen ses1,487,899.73
| 1,894,181.18 |
Others305,468.73
| 483,709.99 |
Total
| 18,475,423.94 | 21,174,407.31 |
Other note:
Nil
35. Management expenses
In RMBItem Current Period Last Period
| Employee compensation and employee costs | 19,321,018.52 | 18,059,573.89 |
Rental and utilities1,133,244.77
| 1,253,438.85 |
Depreciat ion and amortization expenses6,904,588.01
| 6,715,698.24 |
Intermediary and disclosure expenses4,505,049.04
| 1,408,462.38 |
Daily office expen ses3,736,281.59
| 4,376,421.31 |
Others 1,456,872.14
| 1,269,189.09 |
Total
| 37,057,054.07 | 33,082,783.76 |
Other note:
Nil
36. Financial expenses
In RMBCategory Current Period Last PeriodInterest ex pense44,563.57
-
| 57,803.94 |
Less: inter es t income1,750,417.09
| 1,951,838.54 |
Exchange l oss-35,969.90
| 213,930.71 |
Others193,927.10
| 262,314.75 |
Total-1,547,896.32
-
| 1,533,397.02 |
Other note:
Nil
37. Asset impairment loss
In RMBItem Current Period Last PeriodI. Bad debt losses199,749.20
| 190,677.29 |
Total199,749.20
| 190,677.29 |
Other note:
Nil
38. Gains /losses from change of fair value
In RMBSource of gains from change of fair value Current Period Last PeriodFinancial assets measured by fair value
gains/losses
-425,718.15
| and with its variation reckoned into current |
-
Total-425,718.15
| 990,762.24 | |
-
Other note:
Nil
39. Investment gains
In RMBItem Current Period Last Period
990,762.24Long-term equity investment gain s recognized
under equity method
-184,904.99
| Long-term equity investment gain s recognized under equity method |
-
Earnings from financing products
| 159,244.04 | |
| 1,252,661.10 |
Total-184,904.99
| 1,093,417.06 |
Other note:
Nil
40. Asset disposal income
In RMBSource of asset disposal incomeCurrent Period Last Period
Profit or loss for the disposal of fixed-1,339.93
-
| 21,015.26 |
assets
41. Other income
In RMBSource of other incomeCurrent Period Last Period
Government subsidies 826,872.02
42. Non-operating income
In RMBItem Current Period Last Period
non-recurring profit and lossGovernment grants
| Amount included in the current | ||
618,962.22
Other
66,816.28
| 69,507.48 | 69,507.48 |
Performan ce compensation
325,918.95
Total
| 69,507.48 | 1,011,697.45 |
Government subsidy reckoned into current gains/losses:
In RMB
Item
Issuingsubject
Issuing cause
Property type
Whether the
impact ofsubsidi e s onthe currentprofit and
loss
Whetherspecialsubsidies
Amount ofthis period
Amount oflast period
Assetsrelated/Incom
e relatedDeferred
incometransfer-in
No No
| 582,962.22 |
Assets relat ed
The “Threeproducts onestandard”award fromAgriculturalBureau
| Tea bureau of Wuyuan County |
Award
Subsidy forindustries thecountryencourageand support(according tonationalpolicy)
No No
| 30,000.00 |
Incomerelated
MarketSupervisionBureau -
subsidies
ShenzhenMarketSupervisoryAuthority
Subsidy
Subsidy forindustries thecountryencourageand support(according to
No No
| Patent fu nded | 6,000.00 |
nationalpolicy)Total -- -- -- -- --
| 618,962.22 |
--Other note:
Nil
43. Non-operati ng expe ndi ture
In RMBItem Current Period Last Period
Amount reckoned into current
non-recurring gains/lossesDonation expenditure
20,916.00
| 10,000.00 | 10,000.00 |
Losses on disposa l of assets
| 69,625.01 | 69,625.01 |
Other 56.74
1,206.68
56.74
Total
| 79,681.75 |
22,122.68
| 79,681.75 |
Other note:
Nil
44. Income tax expense(1) Statement of income tax expenses
In RMBItem Current Period Last PeriodCurrent income tax expenses1,186,252.16
| 335,468.02 |
Deferred income tax expenses-61,224.81
-
| 298,881.44 |
Total1,125,027.35
36,586.58
(2) Adjustment process of accounting profit and income tax expenses
In RMBItem Current PeriodTotal profit-
Income tax e xpenses calculated by statutory tax rate-
| 18,100,791.30 |
| 4,525,197.83 |
Impact from differ ent tax rate apply with the subsidiary
Impact on deductible temporary differences or losses deductiblewhich was un-recognized as deferred income tax assets
| 103,048.34 |
| 5,547,176.84 |
Income tax e xpense
Other noteNil
45. Annotation of cash flow statement(1) Cash received with other operating activities concerned
In RMBItem This Period Last PeriodInterest income1,480,581.08
| 1,723,814.05 |
Government grants256,948.58
| 419,100.00 |
Intercourse funds and other3,253,817.60
| 4,205,388.32 |
Total4,991,347.26
| 6,348,302.37 |
Note of cash r eceiv ed with other operating activities concerned:
Nil
(2) Cash paid with other operating activities concerned
In RMBItem This Period Last PeriodExpenses
| 17,017,291.45 | 14,640,748.15 |
Intercourse funds and other5,090,549.48
| 5,939,319.21 |
Total
| 22,107,840.93 | 20,580,067.36 |
Note of cash paid with other operating activities concerned:
Nil
46. Supplementary information to statement of cash flow(1) Supplementary information to statement of cash flow
In RMBItem This Period Last Period1.Net profit adjusted to cash flow ofoperation activities:
-- --Net profit-
-
| 19,225,818.65 | 20,577,033.45 |
Add: Impairment provision for assets
| 199,968.89 | 190,677.29 | |
| Depreciation of fixed assets, consumption of |
oil assets and depreciation of productivebiology assets
| 10,619,768.21 | 10,965,845.80 |
Amortization of intangible assets
| 3,490,320.83 | 3,525,894.04 |
Amortization of long-term deferred expenses
| 2,099,501.41 | 2,797,203.36 | |
| Loss from disposal of fixed assets, intangible assets and other long-term assets (income is |
1,339.93
| 33,547.35 |
Losses on scrapping of fixed assets (incomeis listed with “-“)
| listed with “-”) | ||
| 69,625.01 |
Loss from change of fair value (income islisted with “-“)
| 425,718.15 | 990,762.24 |
Financial expenses (income is listed with“-”)
610,098.89
| 539,226.77 |
Investment loss (income is listed with “-”)
-
| 184,904.99 | 1,093,417.06 | |
| Decrease of deferred income tax assets (increase is listed with “-”) | 45,204.73 |
-
| 51,190.88 | ||
| Increase of deferred income tax liability (decrease is listed with “-”) |
-144,364.66
-
| 285,625.68 |
Decrease of i nventory (increase is listed with“-”)
-
-
| 6,814,024.36 | 8,524,247.90 |
Decrease of operating receivableaccounts(increase is listed with “-”)
-
| 11,223,309.58 | 14,650,942.01 |
Increase of operating payableaccounts(decrease is listed with “-”)
-
| 7,009,917.12 | 24,293,348.02 |
Net cash flow arising from operatingactivities
-
| 9,795,470.07 | 50,432,648.15 |
2.Material investment and financing notinvolved in cash flow:
-- --3.Net change of cash and cash equivalents -- --
Balance of cash at period end
| 223,346,666.44 | 205,487,872.79 |
Less: Balance of cash at year-begin
| 255,961,650.41 | 358,564,242.83 |
Net incr easing of cash and cash equivalents -
-
| 32,614,983.97 | 153,076,370.04 |
(4) Constitution of cash and cash equivalent
In RMBItem Closing balance Opening balanceI. Cash
| 223,346,666.44 | 255,961,650.41 |
Includ i ng : Cas h on ha nd
| 441,516.36 | 194,650.44 |
Bank deposit available for payment at anytime
| 222,905,150.08 | 255,448,120.29 | |
| Other monetary funds available for payment |
at any time
318,879.68
III. Bal ance of cash and cash equivalent atyear-end
| 223,346,666.44 | 255,961,650.41 |
Other note:
Nil
47. Foreign currency monetary items(1) Foreign currency monetary items
In RMBItem
Exchange rate convert
| Ending foreign currency balance | Ending balance of RMB converted |
Including: USD
6.6166
| 1,713,857.17 | 11,339,907.35 |
HKD
0.8431
| 206,694.34 | 174,264.00 |
Including: USD
6.6166
| 127,695.30 | 844,908.72 |
Other note:
Nil
(2) Explanation on foreign operational entity, including as for the major foreign operational entity,disclosed main operation place, book-keeping currency and basis for selection; if the book-keepingcurrency changed, explain reasons
□ Applicable √ Not applicable
VIII. Equity in other entity
1. Equity in subsidiary(1) Constitute of enterprise group
Subsidiary
Main operation
place
Registered place Business nature
| Share-holding ratio | |
Acquired wayDirectly Indirectly
ShenbaoHuacheng
Shenzhen Shenzhen Manufacturing 100.00%
EstablishmentWuyuan Ju Fang
Yong
Shangrao Shangrao Manufacturing 100.00%
EstablishmentShenbao Sanjing Huizhou Shenzhen Manufacturing 100.00%
Establishment
Science &Technology
Huizhou Huizhou Comprehensive 100.00%
| Huizhou Shenbao |
EstablishmentShenbao
Properties
Shenzhen Shenzhen
Propertymanagement
100.00%
EstablishmentShenbao
Industrial &Trading
Huizhou Shenzhen
Trade andCommercewholesale
100.00%
EstablishmentHangzhou Ju
Fang Yong
Hangzhou Hangzhou Comprehensive 100.00%
Establishment
ShenbaoTechnologyCenter
Shenzhen Shenzhen
Technologydevelopment,consulting andtransfer
100.00%
EstablishmentFuhaitang
Ecological
Hangzhou Hangzhou
Planting,production andsales of tea
| 100.00% |
Purchased
Hangzhou Hangzhou
Trade andCommercewholesale
| Chunshi Network |
100.00%
EstablishmentShenshenbao
Investment
Shenzhen Shenzhen
Investmentmanagement
100.00%
EstablishmentShenshenbao Tea
Culture
Shenzhen Shenzhen
Trade andCommerce
| 100.00% |
EstablishmentJufangyong
Trading
Hangzhou Hangzhou
Trade andCommercewholesale
| 60.00% |
Establishment
Chain
Pu’er Pu’er
Trade andCommercewholesale
100.00%
| Yunnan Supply |
Establishment
Food
Shenzhen Shenzhen
Trade andCommercewholesale
100.00%
| Huizhou Shenbao |
EstablishmentShenbao Rock
Tea
Wuyishan City Wuyishan City Manufacturing 100.00%
Establishment
Center
Pu’er Pu’er Service 55.00%
| Pu’er Tea Trading |
EstablishmentShenbao
Tea-Shop
Shenzhen Shenzhen
Trade andCommerce
| 100.00% |
EstablishmentFuhaitang
Restaurant
Hangzhou Hangzhou Catering
| 100.00% |
EstablishmentExplanation on share-holding ratio in subsidiary different from ratio of voting right:
NilBasis of the invested unit control by the Company though holds half or below voting rights; and the invested unit without controls bythe Company but with over half voting rights hold:
NilMajor structured entity included in consolidates statement:
NilBasis of termination of agent or consigner:
Nil
Other note:
Nil
(2) Important non-wholly-owned subsidiary
In RMBSubsidiary
Share-holding ratio of
minority
Gains/losses attributableto minority in the Period
Dividend distribute forminority in the Period
Accumulated equity ofminority at period-end
Pu’er Tea Trading Cen ter
| 45.00% |
-
| 973,881.94 | 15,565,732.56 |
Explanation on holding ratio different from the voting right ratio for minority shareholders:
NilOther note:
Nil
(3) Main finance of the important non-wholly-owned subsidiary
In RMBSubsidia
ry
Closing balance Opening balanceCurrent
assets
Non-curr
entassets
Totalassets
Currentliability
Non-curr
entliability
Totalliability
Current
assets
Non-curr
entassets
Totalassets
Currentliability
Non-curr
entliability
Totalliability
Pu’erTeaTradingCenter
34,083,2
84.09
| 11,323,8 |
18.07
45,407,1
02.16
10,297,2
79.80
519,305.
36,821,3
07.26
| 0,816,585.35 |
12,028,8
90.18
48,850,1
97.44
11,025,2
02.83
| 1,070,29 |
5.71
12,095,4
98.54
In RMBSubsidiary
Current Period Last PeriodOperation
Income
Net profit
Totalcomprehensi
ve income
Cash flow
fromoperation
activity
Operation
Income
Net profit
Totalcomprehensi
ve income
Cash flow
fromoperation
activityPu’er TeaTradingCenter
-
| 76,410.93 | 2,164,182.09 |
-
-2,565,380.12
| 2,164,182.09 |
556,614.78
-
| 2,089,534.90 |
-
-
| 2,089,534.90 | 31,729,663.8 |
Other note:
Nil
2. Equity in joint venture and cooperative enterprise(1) Important joint venture and cooperative enterprise
NameMain operationRegistered place
Business nature
Share-holding ratioAccounting
place
Directly Indirectly
treat ment oninvestment forjoint venture and
cooperative
enterpriseChangzhou
E-
| commence Co., |
Ltd.
Changzhou City Changzhou City
Manufacturingindustry
33.00%
Equity methodShenzhen
Shenbao Ma NanBio-technologyCo., Ltd.
Huizhou City Huizhou City
Manufacturingindustry
51.00%
Equity methodShenzhen
ShichumingmenRestaurant
Ltd.
Shen zhen City Shenzhen City Catering
| Manage ment C o., |
51.00%
Equity method
GuangzhouMendao Tea Co.,Ltd.
Guangzhou Guangzhou Retail industry 45.00%
Equity methodHolding shares ratio different from the voting right ratio:
NilHas major influence with less 20% voting rights hold, or has minor influence with over 20% (20% included) voting rights hold:
Nil
(2) Financial summary for un-important joint venture or cooperative enterprise
In RMB
Closi ng balance /Amount of this period Opening balance /Amount of last periodJoint venture:
-- --
Total numbers measured by share-holdingratio
-- --Cooperative enterprise: -- --
Total book value of investments
| 5,063,724.67 | 5,248,629.66 |
Total numbers measured by share-holdingratio
-- ---- Net profit -531,031.57
-
| 159,244.04 |
-- Total comprehensive income -531,031.57
-
| 159,244.04 |
Other note
Nil
(3) Excess losses from joint venture or cooperative enterprise
In RMBName
Cumulative un-confirmed
losses
Un-confirmed losses not
profit enjoyed in the Period)
Cumulative un-confirmed
losses at period-endChangzhou Shenbao Chacang
E-commence Co., Ltd
| recognized in the Period (or net | |
| 8,115,908.90 |
258,535.11
| 8,374,444.01 |
Shenzhen ShichumingmenRestaurant Management Co.,Ltd.
355,975.69
| 2,939,544.23 | 3,295,519.92 |
Other noteNil
IX. Disclosur e o f risks relating to finan cia l inst rum ents
Our business operation makes the Company exposed to various financial risks: credit risk, liquidity risk andmarket risk (mainly refers to exchange risk and interest risk). The general risk management policy of theCompany is to minimize potential negative effects on our financial performance in view of the unforeseeablefinancial market.(1) Credit riskThe credit risk mainly arises from monetary capital, trade receivables and other receivables. The management hasestablished 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 comm ercial banks and other financial institutions. The management believes that these commercialbanks have high reputation and asset status and have no major credit risk, and won't create any major lossescaused by the breach of contract of the opposite side.
For trade receivables and other receivables, the Company establishes relevant policies to control exposure ofcredit risk. The Company appraises customers’ credit quality based on their financial position, possibility toobtain guarantee 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.
Up to 30 June 2018, the top five client’s account receivable takes 30.96% in total account receivable of theCompany (2017: 40.08%)
The maximum credit risk exposure equals to the carrying value of each financial asset in balance sheet (includingderivative financial in strument). The Company has not provided any guarantee which would otherwise make theCompany exposed to credit risk.
(2) 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.
(3) Market risk1. Exchange riskThe major operation of the Company is located in the P RC, and its major operation is settled in Renminbi.However, there is also exchange risk in respect of the recognized foreign currency assets and liabilities and futureforeign currency transactions which are mainly denominated in US dollar. Our finance department is responsiblefor monitoring scale of foreign currency assets and liabilities and foreign currency transactions, to minimize itsexposure to exchange risks. In 2017 and J an. to Jun. of 2018, the Company did not sign any forward exchangecontract or monetary exchange contract.
2. Interest riskOur interest risk mainly arises from bank borrowings. Financial liabilities at floating rate expose the Company tocash flow interest risk, and f inancial liabilities at fixed rate expose the Company to fair value interest risk. TheCompany dete rmines the respective proportion of contracts at fixed rate and floating rate based on prevailingmarket conditions.
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 riskThe Company purchases and sells products at market prices, therefore it is affected by fluctuation of these prices.
X. Disclosure of fair value
1. Ending fair value of the assets and liabilities measured by fair value
In RMBItems
Ending fair valueFirst-order Second-order Third-order TotalI. Sustaining measured byfair valu e
-- -- -- --
curren t g ains/losses
| (I)Finan cial assets measured by fair value and with variation reckoned into | 1,173,950.05 | 1,173,950.05 |
(2) Equity instrumentsinvestment
| 1,173,950.05 | 1,173,950.05 |
II. Non-persistent measure-- -- -- --
2. Recognized basis for the market price sustaining and non-persistent measured by fair value onfirst-order
The Company listed the book value of financial assets instruments measured at fair value on December 31, 2017 at three levels offair value. When t he fair value ranks three levels as a whole, it is based on the lo west level of the three levels that each importantinput value used in the fair value measurement. The three levels are defined as follows:
Level 1: It is the quoted price that has no t been adjus ted in the act ive market for th e same assets o r liabil ities that can be obtai ned onthe measurement date;Level 2: It is the input value that is directly or indirectly observable for the relevant assets or liabilities except the input value of thefirst level;Input value of level 2 includes: 1) quoted price for similar assets or liabilities in active markets; 2) quoted price for the same orsimilar assets or liabilities in inactive markets; 3) other observable input value except quoted price, including the observable interestrates and yield curves, implied volatility, and credit spreads during the interval in normal quoted price; 4) input value for marketverificati on, etc.Level 3: It is the unobservable input value of related assets or liabilities.
XI. 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 |
ShenzhenAgriculturalProducts Co., Ltd.
Shenzhen
Development,established, operatedand manage ment theagriculturalwholesale market ,
1,696,964,100
| 19.09% | 19.09% |
operates marketingleasing business etc.Expla na t ion on parent Company of the enterpriseNilUltimate controller of the Company is Shenzhen Municipal People’s Government State-Owned Assets Supervision andAdministration CommissionOther note:
Nil
2. SubsidiarySubsidiary of the Company found more in Note VIII-(I) equity in subsidiary3. Cooperative enterprise and joint ventureJoint Venture of the Company found more in Note VIII-(II) equity in joint Venture
Other co operative enter prise and join t venture that h ave related transact ion with th e Company in the Period or occurred in previousperiod
Name RelationshipShenzhen Shichumingmen Restaurant Management Co., Ltd. Cooperative enterpriseChangzhou Shenbao Chacang E-commence Co., Ltd Cooperative enterpriseOther note:
Nil
4. Other related party
Other related party Relationship with the EnterpriseShen zhen Investment Management Company Former first largest shareholder of the CompanyShenzhen Investment Holding Co., Ltd. Second largest shareholder of the CompanyShenzhen Nongmei Investment Management Co., Ltd. Former minority shareholder of the second-subsidiaryOther noteNil
5. Related transaction(1) Goods purchased and labor service receivedGoods purchasing, labor service providing and receiving
In RMBRelated party Content Current Period
limit
Whether more thanthe transaction limit
Amount of last period
| Approved transaction |
ShenzhenShichumingmenRestaurant
Purchase of teaproducts
0.00
No 927.50
Manage ment C o.,Ltd.Goods sold/labor service providing
In RMBRelated party Content Current Period Last PeriodShenzhen ShichumingmenRestaurant Management Co.,Ltd.
Activity service
| 6,442.74 |
Shenzhen ShichumingmenRestaurant Management Co.,Ltd.
Sales of tea products455.09
Note of sale of goods/rendering of labor services/labor service offering:
Nil
(2) Related lease
As a lessor for the Company:
In RMBLessee Assets type
Lease income in recognized in
the Period
the PeriodShenzhen ShichumingmenRestaurant Management Co.,Ltd.
Operating site479,951.61
| Lease income in recognized last | |
| 409,500.00 |
As lessee:
In RMBLesser Assets type
Lease income in recognized in
the Period
the PeriodShenzhen Investment HoldingCo., Ltd
Operating site1,025,966.95
| Lease income in recognized last | |
| 979,514.77 |
Explanation on related leaseNil
(3) Related guarantee
As guarantor
In RMBSecured party Guarantee amount Guarantee start date Guarantee expiry date
Whether the guarantee
has been fulfilledShenbao Huacheng
2017-07-27 2019-07-26 NoAs secured party
In RMB
Guarantor Guarantee amount Guarantee start date Guarantee expiry date
Whether the guarantee
has been fulfilledRelated guarantee noteAccording to the “Comprehensive Credit Line Contract” numbered as PY (SZ) ZZ No. A237201707130001 signed by ShenbaoHuacheng, a subsidiary of the Company, with Ping An Bank, Shenzhen Branch on July 27, 2017, Ping An Bank, Shenzhen Branchprovided a comprehensive credit line of RMB 30 million to the subsidiary of the Company, Shenbao Huacheng, the time limit of thecomprehensive credit limit was within 12 months from the effective date of the contract. In order to ensure that all claims under thiscomprehensive credit limit can be repaid, the Company has provide d a maximum guarantee with guarantee amount of RMB30,000,000.00. Except for the guarantee amount, other interests, interest and interest penalty, and other claims charges are alsoguaranteed, and the guarantee period is from July 27, 2017 to the end of the two-year period from the expiration date for debtperformance of each specific credit line under the master contract.
(4) Related party’s borro w ed funds
In RMBRelated party Loan amount Start date Expiry date NoteBorrowingShenzhen NongmeidiInvestmen t ManagementCo., LTD
2017-01-01 2018-02-13 Paid off on 13 Feb, 2018
| 5,250,000.00 |
LoansShenzhenShichumingmenRestaurant ManagementCo., Ltd.
2016-06-23 2017-07-31
Benchmar k i nterest ratefor one-year borrowingfrom People’s Bank ofChina
6. Receivable and payable of relat ed party(1) Item receivable
In RMBItem Related party
Closi ng balance Opening balanceBook balance Bad debt provision Book balance Bad debt provision
Other accountreceivable
1,180,000.00Changzhou Shenbao
ChacangE-commence Co.,Ltd
| Changzhou Shenbao | 20,182,046.51 |
9,275,912.22
19,977,283.01
| 9,071,148.72 |
Other accountreceivable
ShenzhenAgriculturalProducts Co., Ltd
1,060.00
159.00
1,060.00
159.00
Other account Shenzhen
53,585.30
| 1,596,491.82 | 1,870,811.75 | 53,585.30 |
receivable Shichumingmen
RestaurantManage ment C o.,Ltd.
Other accountreceivable
ShenzhenInvestment HoldingCo., Ltd
31,743.34
| 433,469.10 |
319,129.94
| 31,743.34 |
(2) Item payable
In RMBItem Related party Closing book balance Opening book balance
Divi de nd pa yable
Shen zhen InvestmentManagement Company
2,690,970.14
| 2,690,970.14 |
Other payab le
Shenzhen NongdimeiInvestmen t ManagementCompany
1,
| 478,800.00 |
Other payab le
Shen zhen InvestmentManagement Company
3,510,297.20
| 3,510,297.20 |
7. Commitments of related party8. Other
As a shareholder of Changzhou Shenbao Chacang Company, the Company holds 33.00% equity of Changzhou Shenbao ChacangCompany. As of June 30, 2018, the advance payment that the Company paid for Changzhou Shenbao Chacang Company in previousyears, the balance of other accounts receivable was RMB 20,182,046.51, and the provisions for bad debts was RMB 9,275,912.22,and the book value of other receivables was RMB 10,906,134.29.
XII. Commitment or contingency
1. Important commitments
Important commitments in balance sheet date
2. Contingency(1) Contingency on balance sheet date
On July 15, 2016, Shenzhen Agricultural Products Financing Guarantee Co., Ltd. (“Agricultural Products Guarantee Company” forshort) submitted a “Civil Appeal” to the People’s Court of Futian District, Shenzhen, requesting Changzhou Shenbao ChacangCompany to repay the loan principal amount of RMB 5,000,000.00, the interest of RMB 389,968.52, and the interest penalty of RMB3,200,271.79 (the interest penalty was temporarily calculated to June 30, 2016, which shall be actually calculated to the date of thefull repayment of the 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 Shenbao ChacangCompany to repay the loan principal of RMB 5 million and the interest and interest penalty, the Company did not need to undertakejoint liability for the loan of RMB 5 million of Changzhou Shenbao Chacang Company. On July 4, 2017, the Agricultural ProductsGuarantee Company filed an appeal, on October 13, 2017, and Shenzhen In termediate Peop le’s Court h eld a hearin g. As of the dateof appro val of th e finan cial statemen ts, th e case has b een in the proces s of hear in g, and th e Shenzhen In termediat e P eop le's Co urt hasnot yet made a final judgment in this case.
XIII. Events after balance sheet date
1. Explanation on other events after balance sheet day
On July 24, 2018, the Company held the 18
th
m eeting of the ninth board of directors and the 10
th
m eeting of the ninth board ofsupervisors, which reviewed and approved the “Proposal on the Removal of the Shenzhen Plant of Shenzhen Shenbao HuachengTech Co., Ltd.”. The expenses for the corresp onding staff place ment, asset impair ment preparation, removal, equipment installationand commissioning in this removal are not expected to exceed RMB 13.6 million, which will be included in the current profit andloss of the Company.Except for the event s after the balance sheet date mention ed above, as of the date of approval of reporting the financial report, theCompany has no other major events after the balance sheet date that should be disclosed but not disclosed.
XIV. Other important events
1. Other
On August 22, 2017, the Company received the n otice from the major shareholder Shenzhen Agricultural Products Co., Ltd.(hereinafter referred to as “Agricultural Products ”), as Agricultural Products and relevant parties were negotiating major issuesconcerning the Company, after applying to the Shenzhen Stock Exchange, the Company was suspended trading since the opening onAug us t 22, 2017.On September 5, 2017, the Company confirmed that this major event constituted a major asset restructuring, after applying to theShenzhen Stock Exchange, the Company’s stock was transferred to the major asset restructuring matter and continued to besuspended from the opening on September 5, 2017.On January 19, 2018, the Company received the notice from the State-owned Assets Supervision and Administration Commission ofShen zhen Municipal P eople’s Govern ment (herein after referred to as “Shenzhen SASAC”): In order t o promote th e overall strategicadjustment of Shenzhen municipal state-owned grain and agricultural enterprises, Shenzhen Municipal People’s Government issuedthe SFH [2018] No. 17 on January 18, 2018, agreed to carry out holistic changes to Shenzhen municipal state assets, and transfer28.76% equity of Agricultural Products held by Shenzhen SASAC, 5.22% equity of Agricultural Products held by Shenzhen CapitalCo., Ltd., 0.02% equity of Agricultural Products held by Shenzhen Yixin Investment Co., Ltd., and 16% equity of the Company heldby Shenzhen Investment Holdings Co., Ltd. to Shenzhen Fude State-owned Capital Operation Co., Ltd. (hereinafter referred to as“Fud e C apital”).On January 23, 2018, the above-mentioned parties signed the “Shares/Property Free Transfer Agre e ment”, an d complet ed al l th e fre etransfer matters on April 3, 2018.On March 23, 2018, the Company held the 15
th
m eeting of the ninth session of the board of directors which reviewed and approvedthe “Proposal on the Planning for Share Issuance of Shenzhen Shenbao Industrial Co., Ltd. for Purchasing Assets and RelatedTransactions” and other proposals related to this major asset restructuring. The planning mentioned that “the Company intends toacquire 100% equity of Shenzhen Cereals Group Co., Ltd. (hereinafter referred to as “Shenzhen Cereals Group”) held by FudeCapital via share issuance, and the estimated value of 100% equ ity of Shenzh en C ereals Group is 5,859,432,100 Yuan, both parties
agreed to take this value as the transaction price of the underlying asset after preliminary negotiation.On March 27, 2018, the Company received the “Inquiry Letter on the Restructuring of Shenzhen Shenbao Industrial Co., Ltd.”[XKLCZWXH[2018] No. 6] (hereinafter referred to as “Inquiry Letter”) issued by the Shenzhen Stock Exchange. According to therequirements of the inquiry letter, the Company supplemented and revised the original planning contents, and disclosed the “Planningfor Share Issuance of Shenzhen Shenbao Industrial Co., Ltd. for Purchasing Assets and Related Transactions (Revised Version)”.After applying to the Shenzhen Stock Exchange, the Company’s stock resumed trading since the opening on April 4, 2018.On June 8, 2018, the Company held the 17
th
meeting of the ninth board of directors which deliberated and approved the “Proposal on‘the Company’s Sh are Issuance for Purchasing Assets and Related Transactions Report (Draft)’ and its Summary” and otherproposals related to major asset restructuring.On June 15, 2018, the Company received the “Approval of Shenzhen State-owned Assets Supervision and AdministrationCommission on the Company’s Share Issuance for the Acquisition of 100% Equity of Shenzhen Cereals Group and Relevant Issuesof Major Assets Restructuring” (SGZWH [2018] No. 499) issued by Shenzhen SASAC from Fude Capital, agreed the restructuringplan reported by Fude Capital.On June 19, 2018, the Company received the “Inquiry Letter on the Company’s Restructuring” [XKLCZWXH[2018] No. 18] issuedby the Shenzhen Stock Exchange. According to the requirements of the inquiry letter, the Company supplemented and improved thedocuments related to this major asset restructuring, and established the Report on Share Issuance of Shenzhen Shenbao Industrial Co.,Ltd. for Purchasing Assets and Related Transactions (Revised Version).On June 27, 2018, the Company held the first extraordinary meeting in 2018 which reviewed and approved the “Proposal on ‘theCompany’s Share Issuance for Purchasing Assets and Related Transactions Report (Draft)’ and its Summary” and other proposalsrelated to this major asset restructuring.On July 5, 2018, the Company received the “Notice of Correction on Application for Administrative License o f China SecuritiesRegulatory Commission” (No. 181013) (hereinafter referred to as the “Notice of Correction”) issued by the China SecuritiesRegulatory Commission. The CSRC reviewed the applicat ion materials for the administrative license of the “Approval of theCompany’s Listed Companies to Issue Shares to Purchase Assets” submitted by the Company, and requested the Company to submitthe relevant correction materials to the acceptance department of CSRC for administrative license application within 30 working daysfrom the date of issuance of the Notice of Correction. The Company strictly followed the requirements of the Notice of Correction,and activ ely p r epared the correction materials and submitted them in time.On July 27, 2018, the Company received the “Administrative License Application Acceptance Fo rm of CSRC” issued by the Chin aSecurities Regulatory Commission (acceptance number is 181013). The China Securities Regulatory Commission examined theapplication materials for the administrative license of the “Approval of the Issuance of Shares by Listed Companies to PurchaseAssets” submitted by the Company in accordance with the law, con sidering that all material s were complete, d ecided to accept t heapplication for the administrative license.On August 9, 2018, the Company obtained the “Notice of Investigation of China Securities Regulatory Commission” (YZDCTZ No.180133) from Jonten, the audit institution responsible for this major asset restructuring, because it was suspected of violatingsecurit ies laws and r egulatio ns in the audit process of oth er enterpr ises, CSRC d ecided to file a case and investigate it . In accordancewith the relevant regulations o f the CSRC Decree No. 138, the Company c onvened the board meeting on August 13, 2018, anddecided to apply to the CSRC for the suspension of the “Approval of the Issuance of Shares by Listed Companies to PurchaseAssets” and submitted the application to the CSRC on the same day. On August 15th, the Company received the “Notice of theSuspension of the Review about Administrative License Application from China Securities Regulatory Commission (No. 181013),and CSRC decided to agree to the Company’s suspension of the review.In view of the fact that Jonten had fulfilled the corresponding review procedures and issued the review report in accordance with theregulations, on August 19, 2018, the Company convened the board meeting to deliberate and approve the “Proposal on Resuming theReview about the Application for ‘the Approval of Issuance of Assets by Listed Companies to Purchase Assets’ to the ChinaSecurities Regulatory Commission”, and agreed the Company to apply to the C hina Securities Regulatory Commission for
resumption of review.On 23 August 2018, the Company received a Decision of Anti-monopoly Examination of the Acts of Concentration of BusinessOperators without Further Examination (Anti- monopoly CS Letter [2018] No.153) from Anti-monopoly Bureau of the StateAdministration of Market Supervision and Administration, the Bureau agrees to conduct no further examination on the equityacquisition of Shenzhen Cereals Group by the Company, and the Company can implement centralization from now on.The material assets restructuring should be approved by CSRC and there is no certainty in approval.
XV. Annotation to main items in financial statements of Parent Company
1. Account receivables(1) Disclosed by type
In RMBType
| Closing balance | Opening balance | ||
| Book balance | Bad debt provision | ||
Bookvalue
| Book balance | Bad debt provision |
Book value
Amount Ratio Amount
Accrual
ratio
Amount
| Accrual |
Ratio Amount
ratio
| Accrual | ||
| Account receivable withdrawal bad debt provision by group of credit risk |
characteristics
30,642,2
94.02
99.91%
30,642,29
4.02
| 53,950, |
930.37
| 99.95% | 53,950,930. |
| Account receivable with single minor amount but withdrawal bad debt provision for single |
item
28,453.0
0.09%
28,453.0
100.00%
| 28,453. |
0.05%
28,453.08
100.00%
Total
30,670,7
47.10
100.00%
28,453.0
0.09%
30,642,29
4.02
| 53,979, |
383.45
| 100.00% |
28,453.08
0.05%
| 53,950,930. |
Account receivable with single significant amount and withdrawal bad debt provision separately at period end:
□ Applicable √ Not applicable
Account receivable provided for bad debt reserve under aging analysis method in the groups:
√ Applicable □ Not applicable
In RMBAge
Closing balanceAccount receivable Bad debt provision Accrual ratio (%)Sub item within 1 yearWithin 1 year
30,583,544.02
| 30,583,544.02 |
Total
| 30,583,544.02 |
Explanations on combination determine:
Nil
In combination, withdrawal proportion of bad debt provision based on balance proportion for account receivable:
□ Applicable √ Not applicable
In combination, withdrawal proportion of bad debt provision based on other methods for account receivable:
Nil
(2) Bad debt provision accrual, collected or reversed
Bad debt provision accrual of RMB 0.00; collected or switch back bad debt provision of RMB 0.00Major bad debt provision collected or switch back:
In RMBName Amount Method
(3) Top five receivables at Period-end
Name Closing balance
receivables at closing
| balance (% ) |
Bad debt provision accrual
| Customer 1 | 13,202,096.00 |
---
| 43.04 | |||
| Customer 2 |
| 4,976,292.86 | 16.22 |
---
Customer 3
| Customer 3 | 3,195,254.93 |
---
| 10.42 | |||
| Customer 4 |
| 1,958,919.74 | 6.39 |
---
Customer 5
| Customer 5 | 1,414,188.43 |
---
| 4.61 |
Total
| 24,746,751.96 | 80.68 |
---
2. Other receivables(1) Disclosed by type
In RMBTypes
Closing balance
| Closing balance | Opening balance | ||
| Book balance | Bad debt provision | ||
Bookvalue
| Book balance | Bad debt provision |
Book value
Amount Ratio Amount
Accrual
ratio
Amount
| Accrual |
Ratio Amount
ratio
| Accrual | ||
| Other account receivable with single major amount |
and w
single item
19,552,0
46.51
| ithdrawal bad debt provision for |
10.28%
9,212,91
2.22
47.12%
10,339,13
4.29
| 19,347, |
283.01
| 10.87% |
9,008,148
.72
46.56%
| 10,339,134. |
| Other account |
receivable
165,203,
104.20
| withdrawal bad debt provision by group of credit risk |
86.84%
40,309.2
0.02%
165,162,7
94.91
| 153,106 |
,793.92
| 86.05% |
41,366.46
0.03%
| 153,065,42 |
7.46
| characteristics |
| Other account receivable with single minor amount but withdrawal bad debt provision for |
single item
5,472,39
8.91
2.88%
5,472,39
8.91
100.00%
| 5,472,3 |
98.91
3.08%
5,472,398
.91
100.00%
Total
190,227,
549.62
100.00%
14,725,6
20.42
7.74%
175,501,9
29.20
| 177,926 |
,475.84
| 100.00% |
14,521,91
4.09
8.16%
| 163,404,56 |
1.75
Other receivable with single significant amount and withdrawal bad debt provision separately at end of period:
√Applicable □Not applicable
In RMBOther receivables (unit)
Closi ng balanceOther receivables Provision for bad debt Accrue ratio Accrue reason
Changzhou ShenbaoChacang E -commenceTrading Co., Ltd
19,552,046.51
| 19,552,046.51 | 9,212,912.22 |
47.12%
The difference b etweenestimated present valueof future cash flow andbook value shouldaccrual for bad debtprovisionTotal
| 19,552,046.51 | 9,212,912.22 |
-- --
Other receivable with bad debt provision withdrawal by age analysis in group:
√Applicable □Not applicable
In RMBAge
Closing balanceOther receivable Bad debt provision Accrual ratio (%)Sub item within 1 yearSubtotal within 1 year
| 164,932,908.90 |
1－2 yeas
110.00
| 2,200.00 |
5.00%
Over 3 years
| 267,995.30 |
40,199.29
| 15.00% |
4-5 years
9,004.03
| 60,026.89 |
15.00%
Over 5 years
| 207,968.41 |
31,195.26
| 15.00% |
Total
40,309.29
| 165,203,104.20 |
0.02%
Explanations on combination determine:
NilIn combination, withdrawal proportion of bad debt provision based on balance proportion for other accountreceivable
□ Applicable √ Not applicable
In combination, withdrawal proportion of bad debt provision based on other methods for other account receivable
□ Applicable √ Not applicable
(2) Bad debt provision accrual, collected or reversedAccrual bad debt provision204,763.50 Yuan; collected or reversed 1,057.17 Yuan.
Major bad debt provision collected or switch back:
In RMBName Amount Method
(3) Other receivables by nature
In RMBNature Ending book balance Opening book balanceDeposit
| 233,289.39 | 233,289.39 |
Intercourse accounts and other
| 189,994,260.23 | 177,693,186.45 |
Total
| 190,227,549.62 | 177,926,475.84 |
(4) Top five clients of other receivable at period-end
In RMBCompany Nature Ending balance Book age
Ratio in total ending
balance of other
receivables
Ending balance ofbad bet provision
Huizhou ShenbaoScience &Technology Co., Ltd.
Intercourse funds
Within 1 year and1-2 year
59.33%
| 112,856,862.25 |
Shenzhen ShenbaoSanjing Food &BeverageDevelopment Co., Ltd
Intercourse funds
| 26,203,135.61 |
Within 1 year and1-2 year
13.77%
Changzhou ShenbaoChacang E -
Co., Ltd
Intercourse funds
| commence | 19,552,046.51 |
Within 1 year, 1-3year and above
10.28%
| 9,212,912.22 |
Shenzhen ShenbaoTechnology CenterCo., Ltd.
Intercourse funds
Within 1 year and1-2 year
4.41%
| 8,389,388.97 |
ShenzhenShenshenbao TeaCulture ManagementCo., Ltd
Intercourse funds
Within 1 year and1-2 year
0.29%
| 553,015.56 |
Total --
-- 88.08%
| 167,554,448.90 | 9,212,912.22 |
3. Long-term equity investment
In RMBItems
Closing balance Opening balanceBook balance Impairment Book value Book balance Impairment Book valueInvestment forsubsidiary
917,313,300.84
| 917,313,300.84 | 917,313,300.84 |
917,313,300.84
Investment forassociates andjoint venture
6,935,829.69
| 2,927,628.53 | 4,008,201.16 |
7,121,310.06
| 2,927,628.53 |
4,193,681.53
Total 924,249,130.53
| 2,927,628.53 | 921,321,502.00 | 924,434,610.90 | 2,927,628.53 |
921,506,982.37
(1) Investment for subsidiary
In RMBInvestee u nit
Opening balance
Current increased
| Opening balance |
Currentdecreased
Closi ng balance
Impairmentreserve accrual in
the Period
Closi ng balance
of impair ment
reserveShenbaoProperties
| 2,550,000.00 | 2,550,000.00 | |||||
| Shenbao Industrial |
& Trad ing
| 5,500,000.00 | 5,500,000.00 |
Shenbao Sanjing
| 80,520,842.36 | 80,520,842.36 |
ShenbaoHuacheng
168,551,781.80
| 168,551,781.80 |
Huizhou ShenbaoScience &Technology
| 60,000,000.00 | 60,000,000.00 |
Wuyuan Ju FangYong
| 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
ShenshenbaoInvestment
| 50,000,000.00 | 50,000,000.00 |
Yunnan SupplyChain
| 20,000,000.00 | 20,000,000.00 |
Pu’er Tea TradingCenter
| 18,202,825.80 | 18,202,825.80 |
Total
| 917,313,300.84 | 917,313,300.84 |
(2) Investment for associates and joint venture
In RMB
Company
Openingbalance
Increase & decrease in this period
Endingbalance
Endingbalance
ofimpairme
nt
| provision |
Additiona
linvestmen
t
Capital
Investment gainsrecognize
d underequity
Othercomprehe
nsiveincomeadjustmen
t
Otherequitychange
| reduction |
Cashdividendor profitannounce
d toissued
Impairme
Other
I. Joint ventureII. Associated enterpriseShenzhenShenbao(Liaoyuan)IndustrialCompany
57,628.53
nt accrual
57,628.53
57,628.53
ShenzhenShenbao(Xinmin)Food Co.,Ltd
2,870,000
.00
2,870,000
.00
2,870,000
.00
ChangzhouShenbaoChacangE-commence Co.,Ltd
GuangzhouShenbaoMendaoTea Co.,Ltd.
4,193,681
.53
-185,480.
4,008,201
.16
Subtotal
7,121,310
.06
-185,480.
6,935,829
.69
2,927,628
.53
Total
7,121,310
.06
-185,480.
6,935,829
.69
2,927,628
.53
(3) Other note
Nil
4. Operating income and operating cost
In RMBItems
Current Period Last PeriodIncome Cost Income CostMain business income
| 67,228,720.81 | 63,731,294.22 | 49,271,727.89 | 45,987,989.13 |
Other business income
| 67,228,720.81 | 63,731,294.22 | 49,271,727.89 | 45,987,989.13 |
Other note:
Nil
5. Investment earnings
In RMBItem Current Period Last PeriodInvestment income of long-term equitybased on equity
-185,480.37
-
| 157,257.67 |
Financ ia l pr o duc ts re v e nue
| 1,252,661.10 |
Total -185,480.37
| 1,095,403.43 |
6. Other
Nil
XVI. Supplementary information
1. Current non-recurring gains/losses
√ Applicable □ Not applicable
In RMBItem AmountStatement
Gains/losses from the disposal ofnon-current asset
-67,563.97
Governmental subsidy calculated into
| curren t g ains and losses(while closely related |
with the normal business of the Company,excluding the fixed-am ount orfixed-proportion governmental subsidyaccording to the unified national standard)
Gains and losses from change of fair valuesof held-for-transaction financial assets andfinancial liabilities except for the effective
the Company, and investment income fromdisp osal of transactional financial assets andliabilities and financial assets available forsale
-425,718.15
| hedge business related to normal business of |
56,049.77
| Other non-operating income and expenditure except for t he af orementioned items |
Less: Impact on income tax52,636.76
Affect on minority equity(after taxation)
| 249,711.45 |
Total638,281.62
--Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
2. REO and earnings per share
Profits during report period Weighted average ROE
Earnings per shareBasic EPS (RMB/Share)
| Basic EPS (RMB/Share) | |||
| Net profits belong to common stock |
stockholders of the Company
-1.95%
-0.0367
-0.0367
| Net profits belong to common stock |
stockholders of the Company afterdeducting nonrecurring gains andlosses
-2.01%
-0.0380
-0.0380
3. Difference of accounting data under CAS and IAS(1) Difference of net profit and net assets disclosed in financial report based on IAS and CAS
√ Applicable □ Not applicable
In RMB
Net profit Net assetsCurrent Period Last Period Closing balance Opening balanceBy Chinese A ccountingStandards
-
18,246,639.07
-
| 18,246,639.07 | 17,759,776.83 | 928,673,938.26 | 946,920,577.33 |
Items and amount adjusted by IAS:
Other adjustment on
share market
| regulated funds payable in |
1,067,000.00
| 1,067,000.00 |
Accounting Standards
-
| By International | 18,246,639.07 |
-
| 17,759,776.83 | 929,740,938.26 | 947,987,577.33 |
Section XI. Documents available for Reference
The office of board in the Company had the complete reference file for CSRC, Shenzhen Stock Exchange andshareholders of the Company to query, including:
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 H ong Ko ng Com mercial Daily in the report period;3. Original copies of 2018 Semi-Annual Report with signature of the Chairman.
Shenzhen Shenbao Industrial Co., Ltd.
Chairman of Board: Zheng Yuxi
24 August 2018