Guangdong Haid Group Co., Limited
2021 Annual Report
Stock Code: 002311
Date of Approval for Publication: 10 April 2022
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Section I. Important Notes, Table of Contents and Definitions
The board of directors (the "Board"), the supervisory committee, the directors,
the supervisors and the senior management of Guangdong Haid Group Co.,
Limited (the "Company") hereby warrant the truthfulness, accuracy and
completeness of the information presented in this report, guarantee that there
are no misrepresentations, misleading statements or material omissions
contained in this annual report, and are individually and collectively responsible
for the authenticity, accuracy and completeness of the information contained in
this report.
Mr. Hua Xue, head of the Company, and Mr. Shaolin Yang, head in charge of
accounting work and head of the accounting department (Accounting Officer),
declare that they warrant the truthfulness, accuracy and completeness of the
financial statements in the annual report.
All directors were present in person at the Board meeting to consider and
approve this annual report.
The Report contains forward-looking statements such as future plans, which do
not constitute any specific undertakings by the Group to its investors. Investors
are advised to pay attention to investment risks.
Risk Warning:
1.Risk of periodical fluctuation of feed industry affected by abnormal weather
and animal diseases
The feed industry is mainly served for the downstream breeding industry. The
abnormal changes of temperature, precipitation and typhoon may lead to the
fluctuation of livestock and aquaculture inventory, even the large-scale outbreak
of diseases, further impacting the demand for feed and likely causing the risk of
periodic and regional fluctuations of feed industry. Animal epidemic diseases
may also occur frequently owing to the environmental changes and the
expansion of large-scale animal industry. For instance, African swine fever
broke out in August 2018 and spread across China, and PRRSV-mediated pig
diseases, shrimp-relevant EMS epidemic diseases and poultry-relevant H7N9
diseases occurred recently. The outbreak of animal diseases directly holds up the
scale of breeding and reduces the demand for feed in the short term. Major
animal epidemic diseases may also reduce the demand of end-consumers,
leading to the downturn of the animal breeding and further the demand of feed
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products, resulting in adverse effects on the production and operation of feed
enterprises.
Risk control methods: (1) The company is currently fully deploying
manufacturers and local markets in major areas of Southern China, Central
China, Eastern China and Northern China and overseas markets in Southeast
Asia, etc. The expansion of regional distribution can effectively decrease the risk
of weather anomalies and natural disasters in local areas. (2) The feed products
cover pig, chicken, duck, goose, fish, shrimp feeds and other livestock and
aquatic feeds. The variety of products and well-balanced structure can
effectively mitigate the risk of single species disease with strong comprehensive
risk-relieve capability.
2. Risk of the drastic fluctuation of main ingredient materials’ price
The feed ingredients consist of staple agricultural products such as corn and
soybeans (soybean meal) et al. In recent years, the domestic and international
markets of agricultural product have been closely linked. The changes of the
planting area size and the harvest amount in these major grain-producing
countries, purchasing and storage and subsidy policies, import and export
policies, political conflicts between countries, international trade relations,
logistics capacity and conditions of shipping and exchange rates result in great
fluctuations of agricultural products’ price, bringing certain impact on the cost
of feed and animal industry. With the strengthening of the international trade of
agricultural products, the factors affecting the prices of agricultural products
have become more complicated, and the fluctuation of price therefore increased.
Failing to understand the changes of feed raw materials in a timely manner and
promptly implement strategic management, the company may face the risk of
the rising procurement costs.
Risk control methods: (1) The materials were divided into different categories
such as centralized purchasing staple category and local procurement of
regional varieties category. It not only guarantees the advantages of large-scale
raw material procurement, but also makes best use of localization advantages
from rapid response in respect of regional procurement. (2) The raw material
procurement research system was continuously invested and constructed. The
members of team are professional and familiar with raw material information.
It can effectively control the procurement risk through real-time tracking,
studying and judging the market trend in domestic and foreign bulk raw
material, and manage the risk of bulk raw materials through futures hedging,
raw materials trade and other tools. (3) The company has strong research and
development (R&D) team composed of nearly 2,000 employees with extensive
experience in research on animal nutrition and feed formulation technologies.
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Large amounts of funds are invested on R&D each year, focusing on animal
nutrition requirements, feed formulation technology, animal farming and
genetic improvement, overall investigation on healthy animal farming strategies,
and other research areas. Whenever the material price is fluctuated, the formula
can be quickly adjusted to guarantee feed nutrient level and control the cost
based on the profound understanding of animal nutritional requirements and
the expertise in making best use of raw materials.
3. Risk of environmental protection laws and policies on the scale structure and
regional adjustment in animal industry
In recent years, our government has introduced a series of environmental
protection laws and policies such as new Environmental Protection Law, the
Regulations on Prevention and Control of Pollution from Large-Scale Livestock
and Poultry Industry, the Plan for Prevention and Treatment of Contaminated
Water, the Guiding Opinions on Adjusting the Layout of Pig Production in the
Southern Water Network Region et al. These anti-pollution regulations stipulate
the pollution prevention in animal industry, and especially limit the production
scale in the regions of key water sources and its surrounding areas. According to
the regulations and policies of the central government, the banned areas and
restricted areas have been set up throughout the country, and pig farms in the
prohibited areas are gradually relocated in the southern water network areas.
The implementation of environmental protection policies not only speeds up the
withdrawal of family pig farms with backward production capacity and
unqualified environmental protection, but also expands the production capacity
of large-scale farms and improves breeding scale structure. In addition, the
establishment of banned areas and restricted areas will enforce the adjustments
of pig production capacity across the country. The adjustments of the scale
composition of pig production and the relocation of pig production areas will
certainly have profound impact on the existing capacity layout, market share,
pricing power and business model of feed industry. The impact of environmental
protection policies on the pig industry and feed industry makes the existing
competitive enterprises at risk of reshuffling.
Risk control measures: (1) The company continually improves its service
capability to farmers. In addition to feed products, the company is also engaged
in the industrial fields of animal healthcare products, vaccines and finance, and
set up strong connection with large-scale farmers. (2) The feed products of the
company cover the field of livestock, poultry, and aquatic animals with
abundant product lines. The producing lines for pig feed, chicken feed, duck
feed and pelleted fish feed can be shared and switched. The company can rapidly
shift the production layout according to the changes in the market through
adjusting the production capacity. (3) The company adopts multiple models to
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speed up the production layout in areas with abundant resources and permitted
environment, and to obtain more market share in new animal farming areas. (4)
The company continues to increase R&D investment, and the key technologies
on microbial fermented feed and antibiotic substitutes have been effectively
applied to foster the progress and development of the industry.
4. Risk of Exchange Rate Fluctuations
The global procurement of feed raw materials has become the norm. The scale
of overseas investment and operations of the company is also rapidly expanded.
The scale of cross-border fund settlement and the stock of overseas assets have
grown substantially, involved in various currency types of different countries.
The currency exchange rate fluctuations are subject to different factors. The
exchange rate fluctuations in any currency put certain impact on the settlement
cost and asset value of the regions.
Risk control methods: (1) the company strictly controls the exchange rate risks,
carefully selects settlement currencies to achieve relatively balanced regional
fund inflow and outflow through the structural arrangements of financing
sources and financing types according to the scale, the operation model, and the
settlement characteristics of business in different regions and countries. (2) The
expansion of two-way fluctuations in RMB exchange rate has become the new
norm. The company increases its awareness of foreign exchange risk and
arranges settlement models according to the procurement and sales strategies
and the cycle characteristics of import and export operations, and flexibly used
financial instruments such as forward foreign exchange settlement and sale,
swaps, foreign exchange options and others to lock in exchange rate risks,
control procurement and sales costs and the possible risk caused by exchange
rate fluctuations.
The proposed profit distribution plan of the Company was considered and
passed by the Board: on the basis of the total number of shares on the date of
record minus the repurchased shares when the plan is implemented in the future,
the Company will distribute cash dividend of RMB 1.50 (tax inclusive) and 0
bonus share (tax inclusive) for every 10 existing shares held by all shareholders
without capitalization of capital reserve.
This report has been prepared in both Chinese and English. Should there be any
discrepancies or misunderstandings between the two versions, the Chinese
version shall prevail. The complete published Chinese 2021 Annual Report is
availableat the media designated for information disclosure .
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Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Table of Contents
Section I. Important Notes, Table of Contents and Definitions ....................................................... 1
Section II. Company Profile and Key Financial Indicators .......................................... 8
Section III. Management Discussion and Analysis ..................................................... 14
Section IV. Corporate Governance .............................................................................. 74
Section V. Environmental and Social Responsibility ................................................ 121
Section VI. Material Matters ..................................................................................... 131
Section VII. Share Changes and Shareholder Information ....................................... 155
Section VIII. Preferred Shares................................................................................... 164
Section IX. Bonds...................................................................................................... 165
Section X. Financial Statements ................................................................................ 169
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Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Documents Available for Reference
1. The financial statements signed and sealed by the head of the Company, the head in charge of
accounting work and the head of the accounting department (Accounting Officer).
2. The original copy of the Independent Auditor’s Report signed and sealed by the CPAs, as well as
sealed by the CPA firm.
3. The originals of all the Company’s announcements and documents which were disclosed during
the Reporting Period.
4. The annual report disclosed on other securities markets.
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Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Definitions
Item Definition
Company, Group, Haid Group Guangdong Haid Group Co., Limited
Board the board of directors of Guangdong Haid Group Co., Limited
Supervisory Committee the supervisory committee of Guangdong Haid Group Co., Limited
General Meeting the general meeting of Guangdong Haid Group Co., Limited
Company Law the Company Law of the People’s Republic of China
Securities Law the Securities Law of the People’s Republic of China
Articles of Association the Articles of Association of Guangdong Haid Group Co., Limited
RMB Renminbi
reporting period, the period, the year the period from 1 January 2021 to 31 December 2021
last year, the same period of last year the period from 1 January 2020 to 31 December 2020
the end of the period 31 December 2021
the beginning of the period or the year 1 January 2021
CSRC China Securities Regulatory Commission
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Section II. Company Profile and Key Financial Indicators
I. Company profile
Stock name Haid Group Stock code 002311
Changed stock name (if any) N/A
Stock exchanges on which the
Shenzhen Stock Exchange
shares are listed
Chinese name of the Company 广东海大集团股份有限公司
Chinese abbreviation of the
海大集团
Company
English name of the Company
Guangdong Haid Group Co., Limited
(if any)
English abbreviation of the
HAID GROUP
Company (If any)
Legal representative of the
Hua Xue
Company
Room 701 , Building 2，Haid Mansion，No. 42，Road 4, Wangbo, Nancun Town, Panyu Dist，
Registered address
Guangzhou，China.
Postal code of registered
511445
address
Past changes of registered
The registered address remained unchanged during the reporting period.
address
Room 701 , Building 2，Haid Mansion，No. 42，Road 4, Wangbo, Nancun Town, Panyu Dist，
Office address
Guangzhou，China
Postal code of office address 511445
Website of the Company www.haid.com.cn
Email address zqbgs@haid.com.cn
II. Contact persons and contact methods
Board Secretary Securities Affairs Representative
Name Zhijian Huang Jiewen Lu and Huafang Yang
Room 701 , Building 2，Haid Mansion， Room 701 , Building 2，Haid Mansion，
Correspondence address
No. 42，Road 4, Wangbo, Nancun Town, No. 42，Road 4, Wangbo, Nancun Town,
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Panyu Dist， Guangzhou，China Panyu Dist， Guangzhou，China
Telephone 8620-39388960 8620-39388960
Facsimile 8620-39388958 8620-39388958
Email address zqbgs@haid.com.cn zqbgs@haid.com.cn
III. Information disclosure and places for inspection
Stock exchange website where the Annual Report is Securities Times, China Securities Journal, Securities Daily, Shanghai
disclosed Securities News
Media and website where the Annual Report is
www.cninfo.com.cn
disclosed
Places for inspection of the Company’s
Securities Department of the Company
Annual Report
IV. Change in registration
Organisation registration code No change
Change of principal activities since its
No change
listing (if any)
Change of the controlling shareholder (if
No change
any)
V. Other relevant information
CPA firm engaged by the Company
Name of the CPA firm Grant Thornton China (Special General Partnership)
CPA firm’s address 5th Floor, Scitech Palace 22 Jianguomen Wai Avenue, Chaoyang District, Beijing
Name of the signing certified
Wenyuan Guan and Shuxia Zhang
public accountants
Sponsors engaged by the Company to continuously perform its supervisory function during the reporting period
√ Applicable □ Not applicable
Name Office address Representative Period of supervision
111 Fuhua First Road, Futian
China Merchants Securities Co., Ziqiang Kang and Xiaoliang From 16 April 2020 to 31
Street, Futian District,
Ltd. Shen December 2021
Shenzhen
Financial Advisors engaged by the Company to continuously perform its supervisory function during the reporting period
□ Applicable √ Not applicable
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VI. Major accounting data and financial indicators
Retrospective adjustment to or restatement of the accounting data for prior years by the Company
□ Yes √ No
Increase/decrease
for the year as
2021 2020 2019
compared to the
prior year
Operating income (RMB) 85,998,559,748.78 60,323,862,405.94 42.56% 47,612,587,464.50
Net profit for the year attributable
to shareholders of the parent 1,596,046,173.08 2,522,730,419.35 -36.73% 1,648,762,579.59
company (RMB)
Net profit for the year attributable
to shareholders of the parent
1,519,412,737.99 2,459,587,964.11 -38.22% 1,580,784,060.76
company after deducting the
non-recurring gain or loss (RMB)
Net cash flows from operating
3,137,948,250.69 485,259,232.03 546.65% 3,246,980,705.08
activities (RMB)
Basic earnings per share (RMB per
0.96 1.60 -40.00% 1.06
share)
Diluted earnings per share (RMB
0.96 1.60 -40.00% 1.05
per share)
Rate of return on equity on
11.46% 23.87% -12.41% 19.54%
weighted average basis
Increase/decrease
as at the end of
As at the
As at the end of 2020 the year compared As at the end of 2019
end of 2021
to the end of
the prior year
Total assets (RMB) 35,648,579,800.09 27,526,958,371.19 29.50% 18,854,315,218.31
Total equity attributable to
shareholders of the parent 14,461,135,509.32 13,972,788,864.41 3.49% 9,103,789,731.01
company (RMB)
Whether the lower of the net profit for the year attributable to shareholders of the parent company before and after deducting the
non-recurring gain or loss was negative for the last three accounting years, and the latest independent auditor’s report indicated that
there was uncertainty about the Company’s ability to continue as a going concern
□ Yes √ No
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Whether the lower of the net profit for the year attributable to shareholders of the parent company before and after deducting the
non-recurring gain or loss was negative
□ Yes √ No
VII. Differences in accounting data under domestic and overseas accounting standards
1. Differences between the net profit and net assets disclosed in accordance with international accounting
standards and China accounting standards in the financial report
□ Applicable √ Not applicable
There was no difference between the net profit and net assets disclosed in accordance with international accounting standards and
China accounting standards in the financial report during the reporting period.
2. Differences between the net profit and net assets disclosed in accordance with overseas accounting
standards and China accounting standards in the financial report
□ Applicable √ Not applicable
There was no difference between the net profit and net assets disclosed in accordance with overseas accounting standards and China
accounting standards in the financial report during the reporting period.
VIII. Key Financial Indicators by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating income 15,713,132,477.82 22,478,102,881.45 26,122,667,497.11 21,684,656,892.40
Net profit for the year attributable
to shareholders of the parent 707,280,316.86 825,305,727.12 213,887,814.83 -150,427,685.73
company
Net profit for the year attributable
to shareholders of the parent
691,739,925.38 805,116,849.80 206,917,039.33 -184,361,076.52
company after deducting the
non-recurring gain or loss
Net cash flows from operating
-834,854,929.29 1,415,157,516.61 1,671,634,848.35 886,010,815.02
activities
Whether the above indicators or their aggregated amounts have any material difference with the respective amounts as disclosed in
the quarterly report or interim report
□ Yes √ No
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IX. Items and Amounts of Non-recurring Gains or Losses
√ Applicable □ Not applicable
Unit: RMB
Item Amount for 2021 Amount for 2020 Amount for 2019 Explanation
Gain or loss on disposal of non-current
-21,381,178.37 -8,506,037.63 -699,384.34
assets
Government grants charged to current profit
or loss (excluding government grants
consistently given in the Company’s
91,417,497.06 123,628,058.53 53,217,210.55
ordinary course of business at fixed quotas
or amounts as per government’s policies or
standards)
Investment costs for acquisition of
subsidiaries, associates and joint venture less
40,510.51 1,749,131.53 3,199,250.94
than gains from the fair value of identifiable
net assets of the investees
Except for the effective hedging activities
related to the Company's ordinary activities,
profit or loss arising from changes in fair
value of financial assets held for trading and
financial liabilities held for trading, and 292.58 4,383,792.92
investment income from disposal of
financial assets held for trading, financial
liabilities held for trading, and financial
assets available for sale
Reversal of provision for bad and doubtful
debt where accounts receivable are 11,769,732.86 3,118,886.26 3,818,866.10
individually tested for impairment
Profits or losses from external entrusted
18,750.00
loans
Other non-operating incomes and expenses,
12,478,800.92 -43,325,417.81 19,284,324.06
except for the above
Other gain or loss satisfied the definition of
3,713,581.31 5,465,542.39
non-recurring gain or loss
Less: impact of Income tax 15,798,527.34 9,094,660.10 17,653,550.72
Less: impact of non-controlling interests（net
5,606,981.86 4,446,548.12 3,037,533.07
of tax）
Total 76,633,435.09 63,142,455.24 67,978,518.83 --
Particulars about other gain or loss that satisfied the definition of non-recurring gain or loss:
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□ Applicable √ Not applicable
The Company had no other gain or loss that satisfied the definition of non-recurring gain or loss.
Notes for the Company’s non-recurring gain or loss items as illustrated in the Explanatory Announcement on Information Disclosure
for Companies Offering Their Securities to the Public No.1 - Non-recurring Gain or Loss (公开发行证券的公司信息披露解释性公
告第 1 号——非经常性损益) defined as its recurring gain or loss items
□ Applicable √ Not applicable
No non-recurring gain or loss items as illustrated in the Explanatory Announcement on Information Disclosure for Companies
Offering Their Securities to the Public No.1 - Non-recurring Gain or Loss (公开发行证券的公司信息披露解释性公告第 1 号——
非经常性损益) were defined by the Company as its recurring gain or loss items during the reporting period.
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Section III. Management Discussion and Analysis
I. Industry situation during the reporting period
1. Basic situation and development stage of the industry
The breeding industry is in the middle of agricultural industry chain, linking the planting industry with the food
industry. As the upstream of the breeding industry, the feed industry is the link between the planting industry and
the breeding industry. The feed industry possesses the highest degree of industrialization in the agricultural
industrial chain. The feed generally accounts for more than 70% of the farming cost and undertakes the important
function of guaranteeing the breeding transformation efficiency and reducing the breeding cost. With the
promotion of consumption upgrading, food safety and technological innovation, the farming industry has entered
the stage of industrialized, large-scale, intensive and intelligent development after the upgrades of environmental
protection regulations and the test of pandemics. However, the level of development varies in different species due
to the objective factors such as resources, technologies, land et al. Among them, poultry farming is at the highest
degree of industrialized, large-scale, centralized and intelligent development, followed by pig and aquaculture
farming, and cattle & sheep farming is still in their early development stage. With the intensification, large-scale,
centralized and intelligent development of farming industry as well as the improvement of farming techniques, the
sectors related to farming industry such as feeds and animal healthcare products are also increasing intensively,
and the industry integration is accelerated.
The detailed situations of feed, seedling, animal healthcare and poultry, pig and aquaculture farming industry: (1)
Feed industry is the important link in the production system of animal breeding. The development of feed industry
in China began in the 1980s. After more than 40 years of development, the total amount of feed has continuously
ranked the top in the world in recent years. According to the overview of the development of national feed
industry in 2021 issued by the Ministry of agriculture and rural areas and the feed industry association, the feed
output in 2021 reached a new high with the total output of more than 290 million tons, the increase of 16.1%
year-on-year. The output value of feed was 1,223.41 billion yuan, the increase of 29.30% year-on-year. In last 10
years, the feed industry has gradually changed from quantity oriented to high-quality development stage. The feed
industrial has entered the stage of industrial integration and upgrading, and the market growth rate has decreased.
At the same time, a few advanced enterprises in the industry have gradually emerged, and the industrial
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concentration has increased rapidly. In 2021, with the accelerated recovery of pig production and the continuous
development of aquaculture and ruminant breeding, the output of feed industry increased rapidly, and the total
output of domestic industrial feed increased significantly, reaching an all-time high. (2) High- quality seedlings
are the key of animal farming, particularly in the aquaculture industry. However, the supply of high-quality
seedlings, especially aquatic seedlings, is insufficient. Few new seedlings with independent intellectual property
rights and small production capacity are far from reaching the needs of the upgrading and progress of the animal
industry. Seedlings will face the pressure on improving production through research and increasing the supply
capacity in the long term. (3) The market demand of animal healthcare products has grown rapidly. In particular,
the demand for healthy, safe and green farming has significantly increased with the uprising of consumption and
the upgrading of farming species. The concept that the disease prevention is more important than treatment is
increasingly accepted by most farmers. The benefits of reasonable investment of animal healthcare products for
farming is mainly reflected in the direct effects of reducing disease risk, health improvement, safety-added values
of end-products, controllable farming costs, and higher farming efficiency, there are also many extra effects such
as decreasing labor intensity and the improvement of industrial chain extension capability. In the future, the
capacity of the animal healthcare industry will have a large space for sustainable development based on the
current situation, and the advantageous enterprises will usher in major market development opportunities. (4) The
output value of poultry breeding industry exceeds 1 trillion yuan, which is the industry with the highest degree of
large-scale and standardization. The stock of large-scale poultry breeding in China accounts for more than 70%,
and the centralized trend is keeping up. With the help of capital, technology, scale and other advantages, the
industrial chain integration become an important trend for the development of poultry breeding industry. (5) The
output value of pig breeding industry is about 1.5 trillion yuan, which is rapidly moving towards large-scale,
intensive and industrialized process. The outbreak of African swine fever in 2018 and COVID-19 in 2020
accelerated the industrial centralization, and the small-scale and free- style farms quickly withdrew from the
market. During the epidemic period, large-scale enterprises are expected to rapidly expand their breeding volume
relying on their advantages in capital, technology and the construction of the unbroken epidemic prevention
system. Large- scale family farms with strong epidemic prevention capacity become the main force besides
large-scale enterprises. (6) Aquaculture industry has broad prospects for development, and the output value of
aquaculture also exceeds 1 trillion yuan. Aquatic products industry is dominated by aquaculture farming and
supplemented by fishing industry. In recent years, the policy of marine summer fishing moratorium has
accelerated the proportion of aquaculture farming in the whole aquatic products. With the development of
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intelligence and automation and the rapid improvement of aquaculture technology, the large-scale aquaculture will
accelerate the development of aquaculture business. With the upgrading of consumption, the development of
catering industry and the awareness of food safety, it is gradually increasing the demand for stable, safe and
high-quality aquatic animal protein. The change of consumption structure will drive the supply of high-end
aquatic products. Aquaculture enterprises with high-quality seedlings and strong technical and financial strength
will become pioneers in the field of aquaculture and create broader market prospects in promoting technological
innovation of aquaculture.
2. The industry situation in 2021
In 2021, COVID-19 continued to spread in the world, along with limited import and export, the rising prices of
bulk raw materials, the declining consumer demand of domestic residents, and the depressed prices of poultry and
pork, livestock and poultry breeding was squeezed by the declining of meat products’ price and the rising of raw
material price, resulting in huge losses and difficulties. The price of aquatic products is relatively better, but the
profit is also decreased by the upward prices of raw material.
In terms of bulk agricultural products, corn prices will further increase after rising to the high level in 2020. The
price of soybean meal rose to the historical high compared with the beginning of the year and remained at the high
price throughout the year. According to the statistics of the Ministry of rural agriculture, at the end of 2021, the
average price of corn reached 2,930 yuan / ton, an increase of 26.3% over last year's average price with a record
high. The average price of soybean meal reached 3,790 yuan / ton, an increase of 14.2% over the average price of
last year. The price rise of corn and soybean meal has also driven the rise of other agricultural products’ prices.
The prices of wheat, sorghum, rice and cottonseed meal have increased to varying degrees. Driven by the rising
prices of raw grain, the domestic feed price has reached a record high, and the breeding cost has further increased.
In terms of the breeding industry, (1) the poultry breeding continues its depressed market after 2020. Affected by
the continuous weakness of market demand and the continuous decline of pig prices, combined with the sharp rise
of feed costs, the income of poultry breeding industry continues to decline, and the industrial capacity is at the
stage of rapid clearance. Meat duck farming has suffered losses for 20 consecutive months. In 2021, the operating
rate of slaughtering enterprises and the average storage capacity rate of frozen products fell year-on-year, and the
production capacity was further cleared. With the continuous release of high production capacity, white feather
chicken farming increased significantly from 2020 to 2021. The problem of over-capacity became more and more
prominent again. Over-supply led to market downturn and the income of the whole industrial chain continued to
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decline. The consumption of yellow feather chicken farming was greatly impacted by the control management of
live poultry market. The output began to decline from 2020. The number of slaughters in 2021 decreased by 8.5%
and the output decreased by 4.7% compared with 2020. (2) With the standardized prevention and the control of
African swine fever virus and the further recovery of breeding capacity, according to the statistical bulletin of
national economic and social development in 2021 issued by National Bureau of statistics, the number of pigs sold
in the whole year was 671.28 million and the number of pigs in stock at the end of the year was 449.22 million,
with a year-on-year increase of 27.4% and 10.5%, respectively. The output of pork was 52.96 million tons, an
increase of 28.8%. The supply of live pigs increased significantly, and the price of live pigs dropped from the
highest 36 yuan / kg in the first half of the year to the lowest 10 yuan / kg in the second half of the year. The
continuous downward of pig prices led to the loss of farmers from the second quarter. Farms began to eliminate
many inefficient breeding and reserve sows, and the pig breeding industry entered the huge loss stage. (3) In the
first two years of aquaculture affected by COVID-19 and the comprehensive ban on fishing in the Yangtze River
system and the relatively small number of aquatic seedlings, the storage and discharge of aquatic products are
generally tight in 2021 resulting in better prices of aquatic products in 2021. The prices of traditional common
water fish such as silver carp, spotted silver carp, carp and grass carp continued to rise, reaching a record high
from June to July. Among them, the wholesale prices of grass carp, carp and silver carp exceeded 20 yuan / kg.
Although the prices fell in the second half of the year, the prices were still generally higher than the average prices
in last 10 years. After the downturn of shrimp culture in the past few years, with the further improvement of
domestic culture technology, the success rate of shrimp culture has been improved by small shed, greenhouse,
high-level pool and industrialized culture mode. During the epidemic period, the consumption demand of shrimp
has been stimulated, and the shrimp price has been rising. Due to the high dependence on catering and circulation,
the demand of special water fish species is low throughout the year due to the impact of the epidemic.
In terms of feed industry, although the farming industry is depressed, due to the significant investment release of
livestock and poultry production capacity in last two years, especially the further recovery of pig production
capacity, feed demand has increased, and feed output has increased rapidly to a new high. In 2021, the total output
of feed exceeded 290 million tons, with the year-on-year increase of 16.1%. Among them, pig feed was 130.765
million tons, the year-on-year increase of 46.6%. 121.41 million tons of poultry feed, the year-on-year decrease of
3.1%. 22.93 million tons of aquatic feed, the year-on-year increase of 8.0%. The centralization and large-scale of
feed industry have been further improved. There are 39 feed enterprise groups with an annual output of more than
one million tons, accounting for 59.7% of the total feed output in China, an increase of 5.1 percentage points over
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the previous year. It is expected that the integration will continue in the later stage, the number of enterprises will
be further reduced, and the business centralization will be further enhanced. Dominant enterprises utilize industry
integration opportunities and scale advantages to expand production capacity through purchasing and building
new construction or extend the industrial chain and develop diversified businesses. Owing to the bottleneck
factors of capital, talents, technical pressure and service capacity, small and medium-sized enterprises will
gradually be integrated, merged and withdrawn from the market by dominant enterprises.
3. The periodic characteristics of the industry
The periodicity of the breeding industry is mainly determined by the supply side (the farming quantity). The
periodicity of feed, animal healthcare, seedling and other industries is related to the periodicity of the breeding
industry.
China is the country with a large population, and the food consumption demand of residents is huge, which
remains relatively rigid and stable for a certain period. Therefore, the supply side of the breeding industry
determines the price of breeding varieties, thus determining the periodicity of the breeding industry. The
periodicity of the feed industry generally lags behind the breeding industry. When the breeding volume is less than
the consumption demand, the price of breeding products will rise with considerable profit, resulting in the
prosperity of the breeding cycle. The feed demand will be reduced due to the reduction of breeding volume. When
the amount of breeding is greater than the consumption demand, the prices of breeding end products will fall, and
the breeding cycle will be depressed. The rigid demand for feed is large due to the large amount of breeding. But
at the same time, the decline in the prosperity of the breeding industry directly affects the farmers' choice of
high-quality or low-quality feed products, the enthusiasm of feeding, the sensitivity of feed product prices and the
effective transmission of feed raw material price fluctuations. Therefore, in fact, the periodic factors of the feed
industry such as seedlings and animal healthcare will offset each other and have less impact on feed, which is a
weak periodic industry.
4. The position of the company in the industry
The company belongs to the large comprehensive enterprise.
In terms of feed, although the industry centralization is strengthening, it is still relatively scattered. In 2021, the
company's feed sales volume was 19.63 million tons, accounting for about 6.69% of the country's total feed output,
ranking second in China feed industry, and the market share still has plenty space to increase. Among them, the
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external sales volume is 18.77 million tons, and the internal farming consumption sales volume is 860,000 tons.
The company's aquatic feed technology and scale are leading in the world. Livestock and poultry feed ranks
among the top ten in the industry and is in the leading position in technology and industrial scale in the regional
market. The company has gradually developed feed, seedling and animal healthcare markets in Southeast Asia,
Africa, South America and other countries. The company also ranks among the top ten in the production and
marketing scale of global feed enterprises.
The company is regarded as the national key leading enterprise in agricultural industrialization, the national
enterprise technology center, China top 500 enterprises, China top 500 manufacturing enterprises, China top 500
private enterprises, Fortune China top 500 enterprises in 2021, and China top 500 listed companies in 2021.
II. Main businesses of the company during the reporting period
The company should comply with the disclosure requirements of livestock and poultry aquaculture industry in the
guidelines for self-discipline supervision of listed companies of Shenzhen Stock Exchange No. 3 - industry
information disclosure.
1. Main businesses, products and business models of the company during the reporting period
The company carries out industrial chain business with the aim of providing overall services to animal farming. It
has formed a relatively complete aquatic product industrial chain, and the livestock and poultry industrial chain is
also gradually being constructed. The main products include high-quality seedlings, feed, animal healthcare and pig
breeding. The business operation has covered all business links such as R&D, designing, producing, sales and
services of various products. Specifically, the company's products include feeds of chickens, ducks, geese, pigs, fish,
shrimps and crabs, the breeding varieties including pigs, shrimps, fish fry and chickens, as well as biological
products, veterinary medicine, vaccines and other products required for producing livestock, poultry and
aquaculture.
(1) Main business and products
The core business of feed is integrated with seedling and animal healthcare products as two wings for
breeding industry
Feed business is the core foundation of the company. Based on fully understanding the needs of farmers, the
company has developed its aquatic seedlings and animal healthcare products as supplements to facilitate the growth
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of the feed business after over ten years’ relentless efforts. After more than 20 years of development, the company's
feed business has accumulated a wide range of customer resources. Through providing customers with valuable
high-quality animal seedlings and cost-effective feed products in the market, relying on breeding technical services
to drive the development of vaccines, veterinary medicines, biological products and other animal healthcare
products, the company can better support customers to achieve breeding success through a full set of breeding
services, and help customers realize that healthy breeding at the same time, can also better control the breeding cost
and obtain the competitive advantage in respect of end products.
Extended development of breeding and product processing
Based on the healthy development of feed, seedling and animal healthcare business, the company has formed the
core competitiveness in breeding chains, therefore in recent years, the company has begun to cultivate the breeding
and food processing businesses. In terms of livestock and poultry breeding, the company mainly focuses on pig
breeding, and gradually expands pig slaughtering and poultry slaughtering. In terms of aquaculture, the company
has started the cultivation and processing of special aquatic products such as raw fish and shrimp using its own
high-quality seedlings, feed and animal protection products. With the company's investment in aquatic product
research and development and the presentation of achievements, the company will gradually expand the cultivation
of other high-quality fish and shrimp products.
(2) Major business model
The company started its development from the feed business. Due to the abundant customer resources, based on
deeply understanding and excavating the needs of customers, the company continuously enriched and provided
customers with products and services. From feed products extending to seedling breeding, veterinary medicine and
vaccine products’ R&Dand manufacturing with higher technical and economic added value, the production and
marketing scale of high value-added products gradually expanded, and the proportion of income structure also
increased year by year. In recent years, through the extension of the industrial chain, the company has begun to
gradually go further into the industrial links such as breeding and food processing. The business model has been
orderly developed and extended with various industrial sectors supporting and developing each other.
Feeds, seedlings and animal healthcare products business
With the increasing scale of feed business, the business management is mainly carried out with the business model
of the centralized procurement of raw materials, the distribution of production layout, sales of products
accompanied by technical services. The adoption of the centralized procurement model of group headquarter plus
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regional center is combined with hedging and other methods for agricultural products and other bulk raw materials
to achieve better procurement cost advantages and risk control. In terms of production, on the basis of being closer
to the market, convenient in logistics and rich in resources, the company currently has feed factories distributed in
nearly 100 cities in China and Southeast Asia. Distribution together with direct sales is the company's main sales
model. Focusing on localized marketing, the company has fully established distribution channels to efficiently solve
farmers' capital and transportation needs. Through establishing service stations in main production areas, the
technical service teams directly visit farmers to provide professional services for breeding and have achieved
functional complementation and collaboration with sales organization and management teams in terms of sales and
service as well as channel and farmers. High-quality animal seedlings, biological Products, veterinary drugs and
vaccines become indispensable and constitute a package of integrated products and tools to provide services for
farmers.
The business models for seedlings and animal healthcare products reflect the distinctive features of research and
development with technology as the guide, differentiated products as the carrier, and technical support as the main
promotion strategy. Seedlings and animal healthcare products demand a long period of investment in research and
development. Technology accumulation needs better predictability and market insight, and strong originality of
products. To provide better service support, it is necessary to invest in the long term and to build service teams with
advanced technology, knowledge, and experience. Therefore, a multi-level R&D system has been selected in the
business management model, supplemented by a production and process base with a higher starting point for
investment and more aggressive marketing strategy.
Animal breeding and processing business
The company's pig breeding segment is in its early stage of development, which adopts both the "self-breeding plus
farming community" model and "company plus family farm" model. The "self-breeding plus farming community"
model means that seedlings are introduced and bred to create the farming system of grandparent - parent -
commercial pig, under which reproduction is separated from breeding to ensure that the farming process is safe and
controllable. The "company plus family farms" model means that the company provides family farmers with
products for farming including seedlings, feeds, and vaccines, and provides major technical supports for farming, in
turn the farmers are responsible for animal raising and transfer the end- products back to the company for sales.
The aquatic animal farming and processing business has just started, and the primary aquatic products are fishes,
prawns and other specialty products. With its advantages in high-quality seedlings, feeds, animal healthcare and
technology, the company carries out standardized and industrialized aquaculture breeding, supplying sustainable,
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healthy, traceable aquatic products (processed products) to large catering enterprises and fresh food platforms.
The company has set up professional functional departments including research institute, procurement center,
financial center, operation and development center, marketing center, process and information management center,
human resource center and Haid college at its headquarters, and set up multiple regional/business divisions
according to regions or business categories. Each professional center aims at acquiring technical and management
leadership in its field and provides technical and management standards as well as integrated and professional
management and service support for large regions/business divisions and various branches and subsidiaries. All
regional/business divisions build management platforms, give full play to four in one collaboration mechanism of
R&D, procurement, production and management, strengthen the ability to swiftly respond to the market, fully
explore market potential, and enhance refined management efficiency of all business sectors.
III. Analysis of Core Competitiveness
The products and services are centered on the needs of the animal production industry. Its core competitiveness is
represented by the capability of creating values for customers while carrying out the mission of changing rural
China. The comprehensive performance includes the rich and complete product configuration and industrial chain
layout, outstanding single product power, leading R & D ability, comprehensive aquaculture technical service
capacity, fine management ability and perfect talent training and incentive growth system.
1. Diverse and complete product configurations with strong anti-risk capacity to provide farmers with
complete products and services covering the whole production process
The company possesses a relatively abundant and complete product configuration after years of technical
investment, the transformation of R&D achievements, product accumulation and production layout around the
breeding chain, basically covering the needs of the whole process of breeding from feed, functional feed, seedlings,
medicines, vaccines and biological products, and is still developing. Among feed products, the company is one of
few domestic enterprises that can produce and distribute fish, shrimp, pig, meat and poultry, egg and poultry feed
products at the same time. Its product lines cover all kinds of highly competitive products and high market shares in
key markets. Product configuration capability requires strong customer demand insight ability, R&D organization
ability, achievement transformation ability, production base investment and construction ability, processing
organization ability, marketing promotion ability and technical service ability.
The technical content of various feed varieties is different, the gross profit rate, the market characteristics and
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operation risks are also different. The company's product structure combination enables the company a higher gross
profit than the average level of the industry, and better controls the market operation risks from animal diseases and
imbalance between supply and demand, hence, the sales revenue of feed products of the company is stable and
maintains far higher rapid growth rate than that of the industry.
Over the years, the company has orderly arranged high-quality aquatic animal seedlings, aquatic animal protection
products, livestock and poultry vaccines, veterinary medicines, livestock and poultry animal protection products,
pig breeding and other businesses. The core technology in the industrial chains has gradually obtained the
advantages of technology, industrial layout and industrial synergy, cultivating more new business growth and profit
growth points for the company, and further amplifying the multiplier effect of the industrial chain and laying good
foundation for building comparative competitive advantages.
2. Distinct and excellent product power is the most important competitive advantage of the company
All series of products of the company are committed to building product power significantly ahead of competitors
and put great efforts to strengthen the explicit expression of product power. High-quality products with high pricing
have obvious advantages of ultimately better animal survival rate, growth effect and growth efficiency, and the
brand effect is prominent. Based on the leading production efficiency, the pricing of terminal products is close to the
pricing of competitors' products, pursuing outstanding product cost performance. With the support of farmers, the
overall benefits of the company are significantly higher than those of similar products. In the circumstances of the
declining aquaculture benefits， the whole industry is at a loss, however, our customers only have few loss or even
no loss.
The embodiment of product power needs the support of professional abilities indispensable including the R&D
ability of animal nutrition and raw material utilization, the formula technical ability of products, the value
procurement ability of raw materials, efficient internal operation ability and other professional abilities such as the
support of value purchasing capacity. The company's procurement team has outstanding professional capacity. The
team is young and specialized. The division of labor is carried out according to the classification of raw materials.
The industry perspective is broad, and the amount of information collection and analysis is huge. The team can track,
study and judge the market trend of large raw materials at home and abroad in real- time, and use futures tools to
hedge bulk raw materials, and effectively control the price risk and financial risk of procurement. The team finds out
many purchasing opportunities of raw materials with their outstanding purchasing capacity, making the cost
advantage of feed products and raw material trade possible. The company is the first enterprise in the industry to
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successfully set up centralized procurement, with obvious advantages in scale procurement. Due to its rich
experience in the application of spot, futures, options and other procurement tools, the application method is also
relatively flexible. Long term value procurement and risk position management are also conducive to the company's
acquisition of procurement cost advantages.
Another is the company's efficient operation ability. By promoting the implementation of management software
such as SAP, EPS and business sharing system, the company has a strong informatization system, and its internal
operation is process-oriented, standardized and data based. The function of digitization is to find out efficient and
energy-saving operating methods by comparing the big data of each subsidiary company. The function of process
and standardization is to greatly improve the internal replicability. The middle office management mechanism
enables the production, R&D, procurement and manpower to respond to the market quickly and match the needs of
the market and customers in a more flexible, fast and efficient way. Efficient operation capability has become an
important support for effectively organizing the professional production of various products.
3. Technology R&D is the professional support of product creation, the foundation and driving force of the
company's development, and the core advantage of the company
At the beginning of its founded, the company established the research center to build an industry-leading R&D
system of the whole industry chain including breeding, nutrition, health, breeding and food. With the increasing of
investment in application technology, the company has focused on strengthening the technical platform
construction of each business module in the industrial chain, forming the three-level R&D system from platform
technology research to application technology development to system solution application, promoting the rapid
transformation and application demonstration of scientific and technological achievements through the effective
connection of the three-level R&D system and the operation mechanism of "Research Institute plus subsidiary
company". The company carries out research on basic, forward-looking and key problems in seven R&D directions:
animal genetics and breeding, animal nutrition and feed, animal medicine and biopharmaceutical, microbial
engineering, biochemical industry, protein engineering and healthy breeding, constantly improves the three-level
R&D system, and comprehensively and effectively supports, drives and serves the needs of the rapid development
of the whole industrial chain of the group.
The company has rich technical research reserves with the R&D team of more than 3000 people and huge funds
were invested in R&D every year. The R&D personnel include talents from animal nutrition, veterinary, breeding,
farming model, bioengineering, biochemistry, machinery and other disciplines. The transformation speed of R&D
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results is fast, the investment supporting strategy can be implemented clearly and quickly, and the product allocation
ability of the company is strong.
For example, through more than 20 years of continuous research and development, the company has established a
huge animal nutrition demand database and stored a variety of raw material formula technology for feed formula.
Every year, thousands of groups of comparative experimental results are added to the animal core nutrition demand
and raw material utilization database to transform the technology into productivity. Therefore, the company has
strong ability to organize and continuously optimize the product formula and strong adaptability. It can quickly
adjust the formula when the price of raw materials fluctuates, to obtain cost competitive advantage.
The company's technical service marketing team, who knows the technology and is familiar with the products, can
go deep into fishponds and farms to understand the breeding situation in real-time. Therefore, the company has
detailed data sources for terminal consumption habits, feed breeding effect, disease prevention, breeding mode and
breeding demand, can accurately grasp the needs of farmers and put forward clear technical requirements for
product design, supporting the company's technical resources to fully focus on the core needs of customers.
By providing farmers with complete breeding services such as seedling, breeding technology, disease prevention,
breeding model, healthcare and environmental protection, it provides a strong support for the development of s core
business products of seedling, feed and animal healthcare. At the same time, the development of business provides
deeper foundation for R&D, and the technological innovations lays more solid foundations for the development of
the industry.
4. The comprehensive breeding technology service system is important for the company to coordinate the
product chain, create value for customers, continuously obtain new customers and improve customer
loyalty
In 2006, the company took the lead in providing comprehensive technical services to farmers in the industry and
established the company as a service-oriented enterprise providing overall breeding services to farmers. The
company provides farmers with products and technical service support in the whole breeding process, such as
seedling stocking mode - environmental control - epidemic prevention and control - feed - market information -
financial support, to ensure that farmers can use the most advanced breeding technology to guarantee the success
and profitability. The company has more than 9,000 experienced and passionate technical service teams in the
industry and accumulates a variety of advanced breeding modes in combination with local characteristics. There are
hundreds of highly efficient service stations in intensive breeding areas across the country, which can provide
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technical services for tens of thousands of farmers at the same time. The relatively complete service system in the
industry can give full play to the advantages of product power and provide the whole process technical services of
breeding, effectively enlarging the income of customers and increase the loyalty of customers.
The company's farming technical service started from aquaculture. After more than ten years of team construction
and platform construction, the process and concept of aquaculture technical service system have penetrated all links
such as products, technology, R&D, market and operation, driving the development of the company's aquatic feed
and animal healthcare business, highlighting the effect. The process and ideas have been gradually promoted to
poultry breeding and pig breeding, in recent years, the company has achieved remarkable results on promoting the
development of livestock and poultry business by setting up livestock and poultry service stations. The
comprehensive breeding technology service has become an important brand label of the company and an important
starting point for the company to create value for customers, obtain and keep customers.
5. Continue to build an excellent operation and management team, fine management ability and promote
the sustainable development of the company
The company has a consistent, diligent and professional management team. Most of the team members have
graduated from agricultural colleges and universities and have strong professional background. The management
has a deep and comprehensive understanding of the feed industry and has accumulated abundant practical
experience. They have a grand and unified vision and goal, strong industry insight, leadership and execution
capacity. The management can adapt to the rapid change of feed industry and the higher and higher management
requirements depending on their educational background, knowledge structure, industry experience and age level.
In recent years, the industry goes through a drastic changes era. The great changes have taken place in the
development of the industry, the scale of farmers and the needs of customers. Emerging industries such as rural
finance and internet plus also continue to impact on the industry, promoting the reform and innovation of the
industry, and creating a corporate mechanism and culture that can quickly respond to changes, that is, the collective
learning ability that enables the company to continuously create value for customers, which is the foundation of the
company to keep a sustainable competitive advantage.
The business has started from aquatic premix to various aquatic compound feeds such as freshwater fish, marine fish
and shrimp, from the core advantages of aquatic feed to the advantages of livestock and poultry feed, from simple
feed management to comprehensive service capabilities such as providing breeding, animal protection and breeding
technical services for farmers, and has experienced many expansion from South China to central China, East China,
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North China, Southeast Asia and South America, the process of being stronger and bigger and leading the industry
depends on the collective learning ability of the company's management and all employees. This capacity and
culture keep the company in learning progress and growing in learning.
6. The perfect talent training system and effective incentive mechanism have laid the foundation for the
sustainable and stable development of the company
The company continues to promote the establishment of an organizational atmosphere for talent training. Through
Haida college and the human resources center, the company has built the three-way training system covering the
whole career of employees, the whole business of the company and the whole post of business. The system is the
learning ecosystem combining universal education and elite training, matched with standardized skill training at all
levels to realize the standardized rapid endogenous talent training and output mechanism. With the continuous
development of the company's business and the deep extension of the industrial layout, a number of young,
enthusiastic, energetic young cadres with new ideas and new era labels have become the mainstay of the company's
middle-level management and core technical backbone. Through the establishment of school enterprise cooperation
and the integration of industry and education, the company attracts a large number of excellent college students to
join every year, forming the reserve talent team to support the sustainable development of the company. Through the
establishment of China Modern Fishery Vocational Education Group and the establishment of Rural Revitalization
college, a large number of new farmers are attracted to participate in the construction of technical and industrial
talent team. The establishment of internal and external talent system has realized the talent system pattern on
internal talent training and external industry empowerment and driving the overall progress of the industry.
Since the listing of company, it has launched multi-stage equity incentive plan and employee stock ownership plan
for core management and core technical members at different levels, established a unified incentive mechanism of
long-term and short-term incentives and constraints in consistent with the interests of all shareholders, and ensured
the implementation of the development strategy and business objectives through setting performance objectives and
incentives for the sustainable and stable development of the company.
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IV. The analysis of main business
1.Overview
(1) Analysis of industry competition pattern
China will face unprecedented drastic changes in the industry of agricultural and animal husbandry in next 3-5 years.
The growth inflection point appears in the industry. In past two decades, the industry has been developing in the
increasing growth. All links in the breeding industry chain, both enterprises and practitioners obtain the growth
dividends from the expansion of market demand. However, we will face stagnant consumption and growth, and
even the decline growth of the industry in next few years. From the continuous deterioration of international
environment and the great difficulties and challenges faced by domestic economy, the total domestic meat demand
is likely to continue to decline, posing a severe challenge to the survival of most agricultural and animal husbandry
enterprises. The entire animal industry faces extreme serious overproduction. In 2019, African swine fever caused
the periodic shortage of pork. The high pig price drove the whole industry go crazy. In last two and a half years,
hundreds of billions and trillions of investments into the industry caused the serious overproduction of pork. Driven
by high meat prices, the poultry industry has also increased significantly in last three years, also forming a serious
overproduction to make the matter worse. In the next few years, the whole pig and poultry industry chain will face a
cruel process of capacity reduction. All enterprises will face all challenge of capital, technology, team and cost
control ability. Some will have difficult to survive without professional ability, technical ability and service ability.
The industry will reshuffle fast and firmly. The cost of breeding industry increases rapidly with the continuously
rising expenses of land, infrastructure, environmental protection, labor and raw materials. Grain is expected to
remain high price in next two or three years. The intensified situation of high grain prices, and the weak
consumption and other high costs will put huge pressure on the industrial chains.
The company fully understands and senses the changes in the future industry and has been making efforts on
strategic layout and internal capacity-building in last two years. After strengthening the core competitive advantages
and team training, rapidly improving organizational management ability and internal efficiency, and creating
differentiated competitive advantages through innovation, the company can face the challenges in the next few
years and transfer huge pressure into the driving force for team development. The company will face more brutal
competition and ensure to achieve the five-year development plan from 2021 to 2025.
After the practice of the past two years, the strategic plan of the company has become clearness. Feed, seedling and
animal healthcare products are the core businesses and the technology and team ability continue to improve, laying
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the foundation for rapid growth in the next few years. On the premise of stability, the breeding business should be
cultivated patiently, the pig business should maintain the existing investment scale in the relatively light asset model,
and quickly improving the management ability and professional ability. At present, the cost of raising pigs has been
well controlled and strive to reach the industry top- level within two years. No more investment will be used for
poultry breeding and slaughtering, and the original poultry business will aim to improve its capacity. The
aquaculture business will focus on the industrialized shrimp farming and raw fish farming which the company
already has the overall advantages. The industrialized shrimp farming business is expected to become the new
growth point of the company in addition to feed, seedlings and animal healthcare in next two years.
Feed business is still in its gold stage among the breeding industry chain and the core business of the company in the
middle and long terms. Facing the harsh competitive environment, the company has confidence to achieve the sale
target of 40 million tons. From the perspective of industry, the downturn of consumption and the reduction of
breeding capacity in next few years will bring great pressure to the company. However, it will bring very good
development opportunities for the company from the perspective of market competition. The harsh competitive
environment will accelerate the industry integration, and the withdrawal of small and medium-sized feed enterprises.
A large number of large-scale feed enterprises have also been dragged down by their deep involvement in farming
industry in last few years. The product strength and operating efficiency in the feed sector are expected to continue
to improve and strengthen its competitive advantage over the industry. In the on-coming harsh competitive
environment, the company has ushered in better strategic development opportunities. The aquatic feed, poultry feed
and pig feed went hand in hand, and ruminant feed also began to be distributed rapidly. Aquatic feed has the most
advantage in the industry. The company will continue to expand the gap with the industry in terms of seedling,
animal healthcare, feed product strength and service mode, provide overall services for farmers, and ensure the
achievement of the high goal of 2025. In last two years, the research and development of poultry feed has begun to
subdivide the varieties of poultry feed, seeking breakthroughs in technology and create differentiated products. At
the same time, the internal efficiency has been continuously improved to make the products more competitive. The
product research and development of pig feed has made continuous progress, the production capacity layout
nationally has been basically achieved, and the pig feed is expected to reach the leading position in the industry in
2025. Another support system for poultry and pig feed is the establishment of service station starting in 2021, which
is long-term strategy. The company has patience, determination and confidence to reach the "thousand station plan"
and strives to establish the competition threshold of livestock and poultry feed in 2025.
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(2) Main business analysis
In 2021, the company achieved an operating revenue of 85.999 billion yuan, the year-on-year increase of 42.56%;
The net profit attributable to the shareholders of the listed company was 1.596 billion yuan, the year-on-year
decrease of 36.73%. Among them, the operating revenue of pig breeding sector was about 4.642 billion yuan, the
year-on-year increase of 25.08%. The net profit attributable to the shareholders of the listed company in the pig
breeding business was -896 million yuan, the year-on-year decrease of 238.09%. Excluding other businesses of pig
breeding, the company achieved an operating revenue of 81.357 billion yuan, the year-on-year increase of 43.71%,
and the net profit attributable to shareholders of listed companies was 2.492 billion yuan, the year-on-year increase
of 32.97%.
1. Feed sales achieved new high, and the market share was further increased
During the reporting period, the company sold 19.63 million tons of feed, including 860,000 tons of the internal
breeding. The company achieved 18.77 million tons of external feed sales, the year-on-year increase of 28%, much
higher than the growth rate of the industry, and further increased the market share. ① Poultry feed achieved the
external sales of 9.44 million tons, the year-on-year increase of 11%. Relying on the advantages of product strength,
the company expanded its cooperation with large-scale breeding plants and one-stop breeding companies to provide
customized products and breeding schemes. Under the condition of sharp declining demand, the poultry feed still
achieved contrarian growth. ② Pig feed sales reached 4.6 million tons, the year-on-year increase of 100%. After
the investment of R & D and the team building of pig feed in recent years, the customer recognition of the
company's pig feed brand continues to increase, the key sales areas of products are further expanded from the
original South and central China to north, southwest and northwest regions, and quickly obtain product competitive
advantages in these new markets. ③ the sales of aquatic feed reached 4.67 million tons, the year-on-year increase
of 21%. In 2021, the price of common fish was high, the breeding profit was huge, and the demand for feed was
strong. The company's common fish feed (granular material and ordinary expanded material) increased by 21%
year-on-year; However, due to the decline of catering consumption demand and the degradation of seedlings, the
demand for special water fish feed is low, and the sales volume is basically the same; Benefiting from the company's
advantages in shrimp seedlings, shrimp feed, aquatic animal protection and service model, the annual sales of
shrimp and crab feed increased by 35% year-on-year.
2. Seedlings and animal healthcare products continue to grow, the breeding service system was further improved,
and the core competitiveness was continuously enhanced
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Seedling business: the seedling business is mainly aquatic seedlings with prominent core technology advantages
and excellent profitability. During the reporting period, the operating revenue was 855 million yuan, with the
year-on-year increase of 42.30% and the gross profit margin of 51.22%. Aiming at solving the key problem of the
degradation of germplasm resources in the aquatic seed industry, the company has developed and launched a variety
of new national aquatic varieties such as Litopenaeus vannamei "haixingnong No. 2" shrimp seedlings and long
pearl hybrid mandarin fish. Among them, Litopenaeus vannamei "haixingnong No. 2" is selected using multiple
parent shrimp populations from different regions of the world, and the growth and survival rate as the breeding goal
and family BLUP breeding technology combined with molecular assisted breeding technology for five consecutive
generations. Compared with common shrimp seedlings, "haixingnong 2" has the characteristics of fast growth,
strong stress resistance and high survival rate. Combined with the company's feed and animal healthcare products,
the breeding service scheme is outstanding in various breeding areas The breeding success rate is far higher than the
market level, quickly driving the sales of shrimp feed.
The animal healthcare business realized an operating revenue of 892 million yuan, a year-on-year increase of 34.27%
and a gross profit margin of 50.85%. Among them, the operating income of aquatic animal healthcare products
reached 676 million yuan, with a year-on-year increase of 26.48% and a gross profit margin of 54.10%. Livestock
and poultry animal healthcare business realized an operating revenue of 216 million yuan, a year-on-year increase of
66.29% and a gross profit margin of 40.70%. During the reporting period, the company continued to promote the
"thousand store plan" of the core breeding regional service station. By integrating the advantages of the company's
industrial chain, the company established a comprehensive service platform for advanced products and technologies
in the industry, provided breeding technical services for farmers, expanded the company's leading advantages in the
industry, and established the entry threshold for livestock and poultry feed and breeding services.
3.With the support of specialization, the company will extend to the upstream and downstream of the industrial
chain to create multi-dimensional comprehensive competitiveness
In the pig breeding business, about 2 million pigs were sold throughout the year, realizing an operating revenue of
about 4.642 billion yuan, the year-on-year increase of 25.08%. Since the company mainly focused on the
construction of breeding team in the early stage without the breeding system established, the pigs in 2021 were
mainly fattened by purchasing piglets. Affected by the sharp fluctuations of piglets and pigs’ prices during the
reporting period, the pig breeding business lost 896 million yuan in the whole year. The pig breeding team has
professional breeding technology, veterinary technology and environmental protection technology. During the
reporting period, the biological prevention and control ability of the pig breeding team was further improved. The
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breeding survival rate at the fattening stage exceeded 90%. Combined with R&D and scale advantages of feed
products, the pig breeding cost decreased significantly.
Aquaculture business: the company started to enter the aquaculture business in recent years. The main aquaculture
varieties include special aquatic products such as raw fish and shrimp. At present, the business is at cultivation stage,
and the operating revenue in the reporting period is 618 million yuan. Compared with traditional aquaculture
breeding, the company has obvious advantages such as the industrial shrimp breeding plants designed scientifically,
the recycling water system and biological bait technology and the precisely management system, the company will
further expand the scale of aquaculture in the future.
Poultry industry business, including poultry breeding and slaughtering business, achieved an operating revenue of
2.457 billion yuan during the reporting period, with the year-on-year increase of 36.70%. As the company's feed
downstream industry chain extension business, it can extend the company's understanding of the industry.
Trade business, mainly on bulk raw materials, achieved an operating revenue of 6.39 billion yuan and a gross profit
margin of 4.05% during the reporting period. As the company's feed upstream industry chain business, the trading
business of 40-million-ton procurement volume can cultivate the team and increase the understanding of the
industry.
4.Continuously increasing investment in talents and R&D to build a scientific and advanced agricultural and animal
husbandry company
Talents are the core resource of the company's development and the first productivity of the company's development.
The company attaches great importance to talent recruitment, cultivation and incentive. In 2021, more than 7,300
employees were hired, with the year-on-year increase of 27.88%. Among them, more than 400 personnel with
master's degree and doctoral degree, with the year-on-year increase of 37%, 887 technicians with the year-on-year
increase of 41%, and the proportion of higher education and technical talents were further increased. At the same
time, the company has implemented the new equity incentive plan, covering more than 4,000 core persons and
technical talents. Due to the personnel growth, structural changes and the implementation of the new incentive plan,
the annual personnel cost was 4.54 billion yuan with the significant increase over last year, the year-on-year increase
of 39.91%.
In 2021, the company invested 653 million yuan in R&D, with the year-on-year increase of 36.24%. TheR&D team
has exceeded 3,000 people including more than 700 doctors and masters. The key jobs of feed in the company
includes the revision and improvement of animal nutrition and feed formula database, the development and
application of feed resources, especially protein resources, the technology of raw material toxins treatment, the
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development and application of precision nutrition, green environmental protection, non- antibiotics feed,
functional feed and feed additives. The breeding model focuses on exploring the healthy livestock and poultry
breeding model suitable for small-scale intensive breeding. In terms of breeding, the company focuses on the
development of new varieties such as shrimp, tilapia, blunt snout bream, mandarin fish, Australian lobster, grass
carp and raw fish. In terms of biological products, the company focuses on the disease prevention and controlling
technology of livestock, poultry and aquatic animals, as well as the development of vaccines, detection kits and
disinfectant products.
5.Accelerate the regional and product layout for further increasing the market share
During the reporting period, the company paid 4.659 billion yuan in cash for the purchase and construction of fixed
assets, intangible assets and other long-term assets. From 2020 to 2021, due to the impact of COVID-19 and the
substantial increase of agricultural product prices, the enterprises was rapidly integrated. The company seized the
opportunity to actively plan and increase the investment in feed production capacity. The newly invested production
capacity is nearly 5 million tons, covering all feed product lines, of which the production capacity of special aquatic
shrimp is increased by nearly 2 million tons. At the same time, the company added more than 30 feed plants through
leasing, M & A and cooperative operation, and increased the production capacity by about 3.7 million tons, laying
the foundation for achieving the target feed output of 40 million tons.
In addition, according to the market development trend, the company has actively arranged new products and
categories, such as ruminant feed, pig premix, concentrated feed and other varieties. During the reporting period, the
company has made certain reserves in market development and team construction.
2. Revenue and cost
(1) Components of operating income
Unit: RMB
2021 2020
% of operating % of operating Increase/decrease
Amount Amount
income income
Total operating
85,998,559,748.78 100% 60,323,862,405.94 100% 42.56%
income
By industry
Feed industry 77,369,298,601.07 89.97% 53,955,776,608.48 89.44% 43.39%
Farming industry 8,629,261,147.71 10.03% 6,368,085,797.46 10.56% 35.51%
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By product
Feed sales 69,825,872,761.95 81.19% 48,765,213,907.42 80.84% 43.19%
Animal healthcare
892,463,422.53 1.04% 664,662,163.91 1.10% 34.27%
products sales
Agricultural sales 8,629,261,147.71 10.03% 6,368,085,797.46 10.56% 35.51%
Trade business 6,389,973,548.31 7.43% 4,404,959,107.51 7.30% 45.06%
Other 260,988,868.28 0.30% 120,941,429.64 0.20% 115.80%
By region
Southern China 55,147,949,625.58 64.13% 34,089,748,602.32 56.51% 61.77%
Eastern China 10,648,037,268.13 12.38% 8,782,920,530.71 14.56% 21.24%
Northern China 26,902,001,964.34 31.28% 21,128,275,963.35 35.02% 27.33%
Central China 20,310,973,692.55 23.62% 12,591,006,531.74 20.87% 61.31%
Overseas 7,058,846,596.73 8.21% 5,586,714,516.28 9.26% 26.35%
Combined offset -34,069,249,398.55 -39.62% -21,854,803,738.46 -36.23% 55.89%
(2) Industries, products, regions or sales models accounting for over 10% of operating income or operating
profit of the Company
√ Applicable □ Not applicable
Unit: RMB
Increase/decrease Increase/decrease
Increase/decrease
of operating of gross profit
of operating costs
income as margin as
Gross profit as compared to
Operating income Operating costs compared to the compared to the
margin the corresponding
corresponding corresponding
period of the
period of the period of the prior
prior year
prior year year
By industry
Feed industry 77,369,298,601.07 70,138,650,435.90 9.35% 43.39% 45.06% -1.04%
Farming
8,629,261,147.71 8,560,127,195.18 0.80% 35.51% 73.23% -21.60%
industry
By product
Feed sales 69,825,872,761.95 63,485,844,564.16 9.08% 43.19% 45.16% -1.24%
Animal
healthcare 892,463,422.53 438,660,889.58 50.85% 34.27% 33.55% 0.27%
products sales
Agricultural
8,629,261,147.71 8,560,127,195.18 0.80% 35.51% 73.23% -21.60%
sales
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Trade business 6,389,973,548.31 6,131,124,456.61 4.05% 45.06% 44.01% 0.70%
By region
Southern China 55,147,949,625.58 50,950,143,007.06 7.61% 61.77% 70.67% -4.82%
Eastern China 10,648,037,268.13 9,929,998,592.89 6.74% 21.24% 21.45% -0.17%
Northern China 26,902,001,964.34 25,862,468,378.71 3.86% 27.33% 29.97% -1.96%
Central China 20,310,973,692.55 19,609,992,345.12 3.45% 61.31% 66.93% -3.25%
Under the circumstances that the statistics specification for the Company’s principal operations data experienced adjustment in the
reporting period, the principal operations data upon adjustment of the statistics specification at the end of the reporting period in the
latest year
□ Applicable √ Not applicable
(3) Whether revenue from sales in kind is higher than revenue from services
√ Yes □ No
Increase/
By industry Item Unit 2021 2020
decrease
Sales volume (including
10,000 tons 1,963.01 1,520.53 29.10%
internal farming volume)
Feed
industry Production output 10,000 tons 1,968.72 1,469.58 33.96%
Inventories 10,000tons 24.34 18.64 30.58%
Explanation on why the related data varied by more than 30%
√ Applicable □ Not applicable
The Company’s production output and inventories increased 33.96% and 30.58% respectively during the reporting period compared
with last year, primarily driven by the expansion of the Company's operating scale.
(4) Performance of material sales contracts and material procurement contracts of the Company during the
reporting period
□ Applicable √ Not applicable
(5) Composition of operating costs
By industry and product
Unit: RMB
2021 2020
By industry Item % of total % of total Increase/decrease
Amount Amount
operating costs operating costs
Feed industry Material costs 66,949,873,406.58 95.45% 46,208,636,806.18 95.57% 44.89%
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Feed industry Labor costs 811,822,422.69 1.16% 577,162,499.20 1.19% 40.66%
Manufacturing
Feed industry 2,125,642,816.64 3.03% 1,381,867,251.75 2.86% 53.82%
expenses
Contract
Feed industry performance 168,291,264.44 0.24% 152,737,782.34 0.32% 10.18%
costs
Feed industry Others 83,020,525.57 0.12% 29,918,004.28 0.06% 177.49%
Total of feed
70,138,650,435.92 100.00% 48,350,322,343.75 100.00% 45.06%
industry
Farming industry Material costs 7,313,386,810.78 85.44% 3,977,617,606.06 80.49% 83.86%
Farming industry Labor costs 780,987,405.81 9.12% 632,978,273.06 12.81% 23.38%
Manufacturing
Farming industry 443,554,945.17 5.18% 323,797,587.09 6.56% 36.99%
expenses
Contract
Farming industry performance 22,198,033.43 0.26% 7,063,849.47 0.14% 214.25%
costs
Total of farming
8,560,127,195.18 100.00% 4,941,457,315.68 100.00% 73.23%
industry
Unit: RMB
2021 2020
By product Item % of total % of total Increase/decrease
Amount Amount
operating costs operating costs
Feed sales Material costs 60,455,275,979.29 95.23% 41,661,229,143.22 95.26% 45.11%
Feed sales Labor costs 785,254,553.84 1.24% 568,414,674.05 1.30% 38.15%
Manufacturing
Feed sales 2,093,425,159.76 3.30% 1,370,569,543.68 3.13% 52.74%
expenses
Contract
Feed sales performance 151,888,871.26 0.24% 134,263,615.31 0.31% 13.13%
costs
Total feed sales 63,485,844,564.16 100.00% 43,734,476,976.26 100.00% 45.16%
Animal
healthcare Material costs 363,472,970.68 82.86% 289,949,820.97 88.27% 25.36%
products sales
Animal
healthcare Labor costs 26,567,868.84 6.06% 8,747,825.15 2.66% 203.71%
products sales
Animal Manufacturing
32,217,656.88 7.34% 11,297,708.07 3.44% 185.17%
healthcare expenses
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products sales
Animal Contract
healthcare performance 16,402,393.18 3.74% 18,474,167.03 5.63% -11.21%
products sales costs
Total animal
healthcare 438,660,889.58 100.00% 328,469,521.22 100.00% 33.55%
products sales
Agricultural sales Material costs 7,313,386,810.78 85.44% 3,977,617,606.06 80.49% 83.86%
Agricultural sales Labor costs 780,987,405.81 9.12% 632,978,273.06 12.81% 23.38%
Manufacturing
Agricultural sales 443,554,945.17 5.18% 323,797,587.09 6.56% 36.99%
expenses
Contract
Agricultural sales performance 22,198,033.43 0.26% 7,063,849.47 0.14% 214.25%
costs
Total
agricultural 8,560,127,195.18 100.00% 4,941,457,315.68 100.00% 73.23%
sales
Trade business Sales costs 6,131,124,456.61 100.00% 4,257,457,841.99 100.00% 44.01%
Other Sales costs 83,020,525.57 100.00% 29,918,004.28 100.00% 177.49%
Notes:
N/A
(6) Change of scope of consolidation during the reporting period
√ Yes □ No
During the year, the scope of consolidation included 497 subsidiaries, increasing by 123 and reducing by 15 as
compared with the last year. For details, please refer to the Note "VI. Change in Consolidation Scope" and the
Note "VII. Interests in Other Entities" in Section X “Financial Statements".
(7) Significant change in or adjustment of the businesses, products or services of the Company during the
reporting period
□ Applicable √ Not applicable
(8) Sales to major customers and major suppliers
Sales to major customers of the Company
Total sales to top 5 customers (RMB) 1,777,398,802.96
Total sales to top 5 customers as a percentage of the total
2.07%
sales for the year
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Sales to top 5 customers who are related parties as a
0.00%
percentage of the total sales for the year
Information on top 5 customers of the Company
As a percentage
No. Name of customer Sales (RMB) of the total sales
for the year (%)
1 No. 1 379,928,490.98 0.44%
2 No. 2 378,020,407.86 0.44%
3 No. 3 376,844,952.88 0.44%
4 No. 4 338,320,135.88 0.39%
5 No. 5 304,284,815.36 0.35%
Total -- 1,777,398,802.96 2.07%
Other explanation of major customers
√ Applicable □ Not applicable
The top five customers of the Company are mainly customers of raw materials and poultry feed. The top five customers have no
related relationship with the Company. The Company’s directors, supervisors, senior management, core technical personnel,
shareholders holding more than 5% of shares, actual controller and other related parties do not have direct or indirect interest in the
major customers. The top five customers accounted for 2.07% of total annual sales. The Company’s sales revenue does not depend on
single or top five customers.
Major suppliers of the Company
Total purchases from top 5 suppliers (RMB) 9,773,980,706.17
Total purchases from top 5 suppliers as a percentage of
12.60%
the total purchases for the year
Total purchases from top 5 suppliers who are related
0.00%
parties as a percentage of the total purchases for the year
Information on top 5 suppliers of the Company
As a percentage of
No. Name of supplier Purchases (RMB) the total purchases
for the year (%)
1 No. 1 4,514,855,863.59 5.82%
2 No. 2 2,195,154,513.46 2.83%
3 No. 3 1,469,815,941.13 1.89%
4 No. 4 826,909,265.59 1.07%
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5 No. 5 767,245,122.40 0.99%
Total -- 9,773,980,706.17 12.60%
Other explanation of major suppliers
√ Applicable □ Not applicable
The top five suppliers of the Company have no related relationship with the Company. The Company’s directors, supervisors, senior
management, core technical personnel, shareholders holding more than 5% of shares, actual controller and other related parties do
not have direct or indirect interest in the major suppliers. The top five suppliers accounted for 12.6% of total annual purchases. The
Company’s purchases do not depend on single or top five suppliers.
3. Expenses
Unit: RMB
Increase/
2021 2020 Reasons for material changes
decrease
Mainly due to the expansion of the
Company's operating scale, the increase in
Selling and distribution personnel and their salaries, the increase in
1,808,249,264.31 1,342,844,756.41 34.66%
expenses expense amortization under the 2021 share
option incentive plan, and the increase in
travel and other expenses
Mainly due to the expansion of the
Company's operating scale, the increase in
General and management personnel and their salaries and
2,228,521,838.59 1,558,972,459.50 42.95%
administrative expenses benefits, the increase in expense amortization
under the 2021 Share Option Incentive Plan,
and the increase in office expenses
Mainly due to the increased loans, the
increased interest rate of loans and interest
expenses due to the repayment of the opening
COVID-19-related subsidized loan upon
Financial expenses 402,888,653.32 236,239,259.96 70.54%
maturity, and the increased amortization of
unrecognized financing costs on lease
liabilities due to the adoption of the new
accounting standards for leases
Mainly due to a higher number of R&D
personnel and higher salaries for the R&D
Research and
652,995,298.85 479,306,685.65 36.24% personnel in a bid to enhance the research
development expenses
and development, as well as the increase in
expense amortization under the 2021 Share
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Option Incentive Plan
4. Research and development investments
In 2021, the Company worked together with multiple universities and scientific research institutes including the
Ocean University of China, the South China Agricultural University, and the Pearl River Fisheries Research
Institute (PRFRI), Chinese Academy of Fishery Science (CAFS) to undertake the national key R&D plans and key
R&D projects in Guangzhou Province or Guangzhou City. Furthermore, the Company jointly undertook the
international science and technology cooperation projects of Guangdong Province with the Tiran Shipping LTD of
Israel.
Progress of major R&D projects in the current year:
Name of major Expected impact on the
Purpose Progress Specific objectives
R&D project Company
The verification test for
the effectiveness of To develop functional mixed
dozens of formulas in the animal feeds for white-leg To drive the advancement of
The development of simulated market winter shrimp that can be the animal husbandry industry
the specified animal The development of shed animal husbandry commercially promoted to by the optimization of animal
feed for white-leg functional animal conditions has been address the shortcomings of feed products and raise the
shrimp for feeds carried out. In addition, slow growth and longer influence of the Company's
wintering period the pilot test has been animal husbandry period of products on the industrial
conducted on the terminal white-leg shrimp for improvement
market of animal wintering period
husbandry
The appropriate additive
amounts of new protein
sources have been
The consumption of fish
determined. The
meals can be reduced. The
compromise on the
raw materials for animal feeds
The effectiveness growth and immune
To significantly reduce the can be more diversified and
appraisal and performance of white-leg
costs of animal feeds and environmentally friendly.
application and shrimp has been
The development of achieve better growth Meanwhile, the operation
promotion for the supplemented by adding
new protein sources performance, stronger costs of the Company can be
replacement of fish crystalline amino acids,
immunity and resistance to significantly decreased, thus
meal with new taurine,
stress for shrimps increasing the
protein sources immunopotentiator, and
competitiveness of shrimp
enzymic preparations.
feed products and creating
Consequently, the
additional value for customers
effectiveness before the
replacement has been
achieved or surpassed
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The accurate nutrition
demand for shrimps in
To ensure more accurate The costs of the animal feeds
multiple animal
nutrition of shrimps, save can be significantly reduced
husbandry modes
costs of animal feeds, avoid and the animal husbandry
The establishment (higher-place pond, earth
wastes of animal feeds, costs for farmers can be
and maintenance of dike, shed, and industrial
protect the environment, magnificently decreased. The
the targeted Targeted nutrition animal husbandry) at
guarantee the more complete growth performance for
nutrition database different phases (white
digestion and absorption of shrimps can be higher, thus
for shrimps water, winter shed, etc.)
animal feeds for shrimps, and driving the green
and under different animal
significantly improve the development of the shrimp
husbandry environments
growth performance farming industry
(salinity, temperature,
etc.)
To choose raw materials that
are easier to digest and absorb
so that the gastrointestinal
tract of piglets can better
shred and digest. As a result,
The research on the
the piglets can be healthier
The establishment nutrition value evaluation
and of higher survival rate The good quality of creep
of the nutrition of different raw materials,
due to the all-around and feeds and nursing feeds can
system of the creep Targeted nutrition nutrition demand, feeding
balanced nutrition. In be created, thus making it the
feeds and nursing modes, and feed
addition, the piglets can have industrial benchmark
feeds processing has been
better intestinal development
completed
and less diarrhea. The animal
feeds can be better chewed to
make the nutrition absorption
better and more balanced to
make the piglets grow faster
In terms of the common
diseases for piglets and
breeding pigs, the Centering on the core concept
The establishment The immunopotentiator immunopotentiator can of creating values for
The development of
of the has been developed to effectively improve the customers, the animal
functional animal
disease-resistant improve the resistance to disease resistance of the husbandry efficiency can be
feeds and functional
nutrition system for bacterial and viral swine herd, thus providing a raised and brand
additives
the swine herd diseases in the swine herd stronger guarantee for the competitiveness can be given
healthy and effective play
production of the animal
husbandry of the swine herd
Research and development personnel of the Company
2021 2020 Percentage change
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Research and development
3,049 2,162 41.03%
headcount
Ratio of research and
9.09% 8.24% 0.85%
development personnel
Educational background of
research and development —— —— ——
personnel
Bachelor’s degree 736 515 42.91%
Master’s degree 636 410 55.12%
Doctoral degree 111 83 33.73%
Age structure of research and
—— —— ——
development personnel
Below 30 1,701 1,179 44.27%
30~40 938 666 40.84%
40~50 266 231 15.15%
Over 50 144 86 67.44%
Research and development investments of the Company
2021 2020 Percentage change
Research and development
652,995,298.85 490,795,848.72 33.05%
investments (RMB)
Research and development
investments as % of operating 0.76% 0.81% -0.05%
income
Capitalized amount of research
and development investments 14,561,385.46 12,836,233.50 13.44%
(RMB)
Capitalized research and
development investments as %
2.23% 2.62% -0.39%
of total research and
development investments
Reasons for significant change in the composition of research and development personnel and the impact
□ Applicable √ Not applicable
Reasons for significant change in total research and development investments as % of operating income
□ Applicable √ Not applicable
Reasons for significant change in capitalization rate of research and development investments and explanations thereon
□ Applicable √ Not applicable
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5. Cash flows
Unit: RMB
Increase/
Item 2021 2020
decrease
Sub-total of cash inflows from
88,764,663,792.04 62,715,373,846.39 41.54%
operating activities
Sub-total of cash outflows for
85,626,715,541.35 62,230,114,614.36 37.60%
operating activities
Net cash flows from operating
3,137,948,250.69 485,259,232.03 546.65%
activities
Sub-total of cash inflows from
4,131,496,813.28 4,079,849,668.13 1.27%
investing activities
Sub-total of cash outflows for
8,354,711,112.76 8,400,395,782.73 -0.54%
investing activities
Net cash flows from investing
-4,223,214,299.48 -4,320,546,114.60 2.25%
activities
Sub-total of cash inflows from
17,465,010,784.87 13,992,384,966.94 24.82%
financing activities
Sub-total of cash outflows for
16,686,344,678.54 9,978,234,208.90 67.23%
financing activities
Net cash flows from financing
778,666,106.33 4,014,150,758.04 -80.60%
activities
Net increase in cash and cash
-329,778,050.36 186,622,412.65 -276.71%
equivalents
Explanation on main effects of material changes
√ Applicable □ Not applicable
1. Net cash flows from operating activities increased by 546.65% as compared to the corresponding period of the
prior year mainly because the end of the prior year saw a substantial increase in inventories as compared to the
beginning of the period, resulting in a low amount of net cash flows from operating activities in the prior year.
2. Net cash flows from financing activities decreased by 80.60% as compared to the corresponding period of the
prior year mainly due to a high amount of cash inflows from financing activities as a result of the offering of
convertible corporate bonds in the prior year.
Explanation on main reasons leading to the material difference between net cash flows from operating activities
during the reporting period and net profit for the year
√ Applicable □ Not applicable
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During the reporting period, the net cash flows from operating activities of the Company amounted to RMB
3,137.9483 million, which was RMB 1,326.8577 million higher than the net profit of RMB 1,811.0906 million.
The difference was mainly due to the depreciation and amortization of fixed assets, intangible assets and
productive biological assets.
V. Analysis of Non-Principal Operations
□ Applicable √ Not applicable
VI. Analysis of Assets and Liabilities
1. Material changes of asset items
Unit: RMB
As at the end of 2021 As at the beginning of 2021
As % of Percentag
As % of Description of major changes
Amount total Amount e change
total assets
assets
At the end of the period, the percentage
in total assets decreased by 2.24
percentage points; and the balance
decreased by 15.41% from the
Cash at bank and
1,739,655,125.14 4.88% 2,056,471,632.75 7.12% -2.24% beginning of the period, which was
on hand
mainly due to the increase in payments
for raw materials and investments as a
result of the expansion of the
Company's operating scale.
At the end of the period, the percentage
in total assets decreased by 0.07
percentage points; and the balance
Accounts
1,293,328,829.38 3.63% 1,067,301,941.46 3.70% -0.07% increased by 21.18% from the
receivable
beginning of the period, which was
mainly due to the expansion of the
Company's operating scale.
Contract assets 0.00% 0.00% 0.00% N/A
At the end of the period, the percentage
in total assets decreased by 0.10
percentage points; and the balance
increased by 22.98% from the
Inventories 8,922,903,666.78 25.03% 7,255,350,539.93 25.13% -0.10%
beginning of the period, which was
mainly due to the increase in stocks of
raw materials for trading and
production and the inventory of
44
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
consumptive biological assets at the
end of the period.
At the end of the period, the percentage
Investment in total assets decreased by 0.02
26,941,013.33 0.08% 29,426,486.24 0.10% -0.02%
properties percentage points, almost flat with the
beginning of the period.
At the end of the period, the percentage
in total assets increased by 0.63
percentage points; and the balance
increased by 406.30% from the
Long-term equity beginning of the period, which was
301,076,512.33 0.84% 59,465,879.68 0.21% 0.63%
investments mainly due to the increase in
investments in associates including
Guangzhou Hengjuchang Venture
Investment Partnership (Limited
Partnership).
At the end of the period, the percentage
in total assets increased by 5.06
percentage points; and the balance
increased by 46.99% from the
beginning of the period, which was
mainly because the Company’s projects
Fixed assets 11,271,964,642.07 31.62% 7,668,294,587.09 26.56% 5.06%
under construction were transferred to
fixed assets after completion and being
put into production in the year, as well
as due to the acquisition of new
companies and the increase in purchase
and construction of fixed assets.
At the end of the period, the percentage
in total assets decreased by 1.21
Construction in percentage points; and the balance
1,531,493,842.31 4.30% 1,591,741,924.42 5.51% -1.21%
progress decreased by 3.79% from the
beginning of the period, almost flat
with the beginning of the period.
At the end of the period, the percentage
in total assets increased by 0.45
percentage points; and the balance
Right-of-use increased by 32.64% from the
2,331,346,912.43 6.54% 1,757,671,818.57 6.09% 0.45%
assets beginning of the period, which was
mainly due to the new business of
leases conducted by the Company in a
bid to expand its operating scale.
45
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
At the end of the period, the percentage
in total assets decreased by 5.79
percentage points; and the balance
Short-term loans 3,782,336,144.35 10.61% 4,735,948,585.16 16.40% -5.79% decreased by 20.14% from the
beginning of the period, which was
mainly due to the adjustments to the
debt structure.
At the end of the period, the percentage
in total assets decreased by 1.19
Contract percentage points; and the balance
1,908,259,980.27 5.35% 1,889,338,880.88 6.54% -1.19%
liabilities increased by 1.00% from the beginning
of the period, almost flat with the
beginning of the period.
At the end of the period, the percentage
in total assets increased by 8.35
percentage points; and the balance
Long-term loans 4,411,107,883.25 12.37% 1,161,404,700.00 4.02% 8.35% increased by 279.81% from the
beginning of the period, which was
mainly due to the adjustments to the
debt structure.
At the end of the period, the percentage
in total assets increased by 0.38
percentage points; and the balance
increased by 34.97% from the
Lease liabilities 1,578,746,388.19 4.43% 1,169,692,122.19 4.05% 0.38%
beginning of the period, which was
mainly due to the new business of
leases conducted by the Company in a
bid to expand its operating scale.
At the end of the period, the percentage
in total assets increased by 0.68
percentage points; and the balance
increased by 36.36% from the
Prepayments 2,550,853,738.02 7.16% 1,870,673,397.18 6.48% 0.68% beginning of the period, which was
mainly due to the increase in
prepayments for raw materials as a
result of the rapid development of the
Company’s business.
At the end of the period, the percentage
in total assets increased by 0.44
Productive percentage points; and the balance
508,486,715.64 1.43% 286,202,211.97 0.99% 0.44%
biological assets increased by 77.67% from the
beginning of the period, which was
mainly due to the increase in sows bred
46
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
and purchased by the Company.
At the end of the period, the percentage
in total assets increased by 1.14
percentage points; and the balance
Notes payable 407,090,978.58 1.14% - - 1.14%
increased by 100% from the beginning
of the period, which was mainly due to
the procurement of raw materials.
At the end of the period, the percentage
in total assets increased by 4.23
percentage points; and the balance
Accounts payable 4,051,704,338.04 11.37% 2,060,550,537.54 7.14% 4.23% increased by 96.63% from the
beginning of the period, which was
mainly due to the procurement of raw
materials.
At the end of the period, the percentage
in total assets increased by 0.19
percentage points; and the balance
increased by 30.99% from the
Employee
1,212,811,083.04 3.40% 925,893,314.96 3.21% 0.19% beginning of the period, which was
benefits payable
mainly due to the increase in
employees and their salaries and
benefits as a result of the expansion of
the Company's operating scale.
At the end of the period, the percentage
in total assets increased by 0.39
Non-current percentage points; and the balance
liabilities due 563,923,844.74 1.58% 344,310,074.48 1.19% 0.39% increased by 63.78% from the
within one year beginning of the period, which was
mainly due to the increase in long-term
loans due within one year.
At the end of the period, the percentage
in total assets increased by 1.65
percentage points; and the balance
increased by 379.18% from the
Treasury stock 792,321,152.16 2.22% 165,350,332.65 0.57% 1.65% beginning of the period, which was
mainly due to the repurchase of shares
for intended use in equity incentive
and/or employee stock ownership
plans.
At the end of the period, the percentage
Non-controlling
1,472,249,227.12 4.13% 985,903,096.95 3.41% 0.72% in total assets increased by 0.72
interests
percentage points; and the balance
47
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
increased by 49.33% from the
beginning of the period, which was
mainly due to the receipt of capital
increases from non-controlling
shareholders and entities with
non-controlling shareholders making
profits during the reporting period
compared with the prior year.
Overseas assets account for a larger proportion in total assets
□ Applicable √ Not applicable
2. Assets and liabilities measured at fair value
√ Applicable □ Not applicable
Unit: RMB
Cumulat
ive Impairm
Gain or loss fair ent
Purchases
from changes in value provided Disposal during Other
Item Opening balance during the Closing balance
fair value during changes during the period changes
period
the period recogniz the
ed in period
equity
Financial
assets
1.
Held-for-tradi
ng financial
assets
86,719,309.28 85,867,798.79 2,507,784.13
(exclusive of
derivative
financial
assets)
Sub-total of
financial 86,719,309.28 85,867,798.79 2,507,784.13
assets
Others (note) 504,417,562.64 36,000,000.00 253,848,262.09 286,569,300.55
Total of the
591,136,871.92 85,867,798.79 0.00 0.00 36,000,000.00 253,848,262.09 0.00 289,077,084.68
above
Financial
127,446,229.19 -38,761,796.62 44,174,431.17
liabilities
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Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Note: Others include bank’s wealth management products and non-current financial assets measured at fair value.
Contents of other changes
Whether there were any material changes on the measurement attributes of major assets of the Company during the reporting period
□ Yes √ No
3. Restriction on asset rights as at the end of the reporting period
As at the end of the reporting period, the Company still had restricted assets of RMB 94,004,157.88, which were
mainly land reclamation deposits, letter of credit deposits, guarantee deposits, deposits for bank guarantees, and
collaterals for loans.
VII. Analysis of Investments
1. Overview
√ Applicable □ Not applicable
Investments during
Investments during the
the corresponding period of Change
reporting period (RMB)
prior year (RMB)
4,659,257,785.73 3,390,357,467.37 37.43%
2. Material equity investments during the reporting period
□ Applicable √ Not applicable
3. Material non-equity investments during the reporting period
□ Applicable √ Not applicable
4. Financial investments
(1) Securities investments
□ Applicable √ Not applicable
The Company did not make any securities investment in the reporting period.
(2) Derivatives investments
√ Applicable □ Not applicable
Unit: RMB’0,000
Counter Relation Related- Type of Initial Start Opening Purchase Sold in Impai Closing Closin Actual
End date
party ship party derivativ investm date investm d in the the rment investme g gain/los
49
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
with the transacti e ent ent period period allow nt invest s in the
Compan on or amount amount ance amount ment period
y not (if amoun
any) t as %
of the
Comp
any’s
closin
g net
assets
Futures
contracts
Futures Non-relat 1 Jan. 31 Dec.
Not of corn, 0 22,787.37 12,917.4 9,869.97 0.62% 32,931.85
company ed party 2021 2021
soybean
meal, etc.
Forward
Commerci Non-relat 1 Jan. 31 Dec.
Not and swap 0 30,416.73 161,333.61 191,750.34 12.03% 1,216.68
al bank ed party 2021 2021
contracts
Total 0 -- -- 53,204.1 161,333.61 12,917.4 201,620.31 12.65% 34,148.54
Funding source Self-funded
Legal matters involved (if applicable ) N/A
Disclosure date of the announcement 19 January 2021
about the board’s consent for the
24 September 2021
derivative investment (if any)
Disclosure date of the announcement
about the general meeting’s consent 4 February 2021
for the derivative investment (if any)
1. The hedging business was compatible with the production and operation of the
Company. The Company strictly controlled the positions of futures and options, conducted
foreign exchange hedging transactions in strict accordance with its projected collection
period, payment period and amount, and reasonably made use of futures, options,
Risk analysis of positions held in
portfolios of the aforementioned products, foreign exchange hedging and other instruments
derivatives during the reporting
to have a lock on the Company's costs and expenses of raw materials of animal feeds and
period and explanation of control
other related products.
measures (Including but not limited
2. Relevant departments and personnel strictly controlled the scale of hedging funds,
to market risk, liquidity risk, credit
reasonably planned and used the margin, and gave operation instructions in strict
risk, operational risk, legal risk, etc.)
accordance with the Company's futures trading management policies. No operation could
be carried out unless it had been approved in light of related regulations. The Company
will reasonably allocate funds for its hedging business.
3. In accordance with the Guidelines No. 1 of the Shenzhen Stock Exchange for the
50
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Self-regulation of Listed Companies—the Standard Operation of Main Board Listed
Companies (《深圳证券交易所上市公司自律监管指引第 1 号--主板上市公司规范运
作》), the Futures Management Policy (《期货管理制度》) and the Measures for Futures
Management (《期货管理办法》) have been formulated, which clearly stipulate the
approval authority, internal review process and risk handling procedures for hedging
business. The Company has established a special team for commodity hedging operation
and a monitoring team for commodity hedging operation, and developed corresponding
business procedures. Relevant business and activities were controlled through the
implementation of authorization, position restraint, internal audit and other measures.
4. The Company has formulated the Policy for the Management of Foreign Exchange
Hedging Business (《外汇套期保值业务管理制度》), which clearly stipulates the limit of
foreign exchange hedging business, the scope of varieties, approval authority, internal
review procedures, responsible departments and persons, information isolation measures,
internal risk reporting policies and risk handling procedures. The Policy is in conformity
with the relevant requirements of regulatory authorities, meets the needs of actual
operation, and contains effective risk control measures.
5. The Securities Department of the Company conducted regular and irregular inspections
of the hedging transaction business, and supervised the implementation of risk
management policies and risk management procedures by the personnel taking charge of
the hedging transaction business, to timely prevent operational risks in the business.
Changes in market prices or fair Since the Company's varieties of commodity hedging transactions were traded at futures
value of derivative products during exchanges, with transparent markets and active transactions, the transaction price and the
the reporting period, specific methods settlement unit price of the day could fully reflect the fair value of the derivatives. The
used and relevant assumption and varieties of foreign exchange hedging transactions were measured at the fair value on the
parameter settings shall be disclosed date of contract signing between the Company and commercial banks, and their fair value
for analysis of fair value of was subsequently measured based on the valuation notices issued by each commercial bank
derivatives at the end of the period.
The Company conducted accounting processing of hedging business in accordance with the
stipulations in the Accounting Standards for Business Enterprises No. 22 - Recognition and
Explanation of significant changes in
Measurement of Financial Instruments (《企业会计准则第 22 号——金融工具确认和计
accounting policies and specific
量》), the Accounting Standards for Business Enterprises No. 23 - Transfer of Financial
financial accounting principles in
Assets (《企业会计准则第 23 号——金融资产转移》), the Accounting Standards for
respect of the Company's derivatives
Business Enterprises No. 24 - Hedging Accounting (《企业会计准则第 24 号——套期会
for the reporting period as compared
计》) and the Accounting Standards for Business Enterprises No. 37 - Presentation of
to the previous reporting period
Financial Instruments (《企业会计准则第 37 号——金融工具列报》) as well as their
guidelines.
1. The commodity hedging business of the Company was carried out in strict accordance
with relevant policies. Therefore, the Company effectively controlled the cost of raw
Special opinions expressed by
materials related to production and trade as well as related products, and effectively
independent directors concerning the
prevented and mitigated risks. The relevant approval procedures for the Company to use its
Company's derivatives investment
own funds to carry out hedging business in commodity futures and options markets were in
and risk control
compliance with relevant national laws and regulations as well as provisions in the Articles
of Association (《公司章程》). The Company has established a sound organizational
51
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
structure and developed the Futures Management Policy 《期货管理制度》 for commodity
hedging. There is no circumstance where the interest of the Company and its entire
shareholders has been damaged.
2. The decision-making procedures of the Company for foreign exchange hedging business
were in compliance with relevant national laws and regulations as well as provisions in the
Articles of Association. The Company made use of foreign exchange hedging instruments
to reduce exchange rate risks and financial expenses and control operational risks on the
basis of normal production and operation. There is no circumstance where the interest of
the Company, its entire shareholders and especially, its minority shareholders has been
damaged. At the same time, the Company has formulated the Policy for the Management
of Foreign Exchange Hedging Business ( 《 外 汇 套 期 保 值 业 务 管 理 制 度 》 ). By
strengthening internal control and implementing risk prevention measures, specific
operation standards have been developed for the Company's foreign exchange hedging
business.
In summary, it is approved that the Company and its majority-owned subsidiaries carry out
commodity hedging business and foreign exchange hedging business within the considered
limit.
5. Use of raised funds
√ Applicable □Not applicable
(1) Overall use of raised funds
√ Applicable □Not applicable
Unit: RMB’0,000
Total
Total Total Proportion
raised Total Total Use and Raised
raised raised of total
funds with accumulati raised ownership funds that
Year for Method of Total funds that funds that accumulati
altered ve raised funds that change of have been
fund-raisin fund-raisin raised have been have been ve raised
purposes funds with have not unused left unused
g g funds used in the used funds with
during the altered been used raised for over
current accumulati altered
reporting purposes yet funds two years
period vely purposes
period
In addition
to
Public
temporary
offering of
replenishme
2020 convertible 283,000 94,835.45 187,383.54 31,477.24 31,477.24 11.12% 95,461.61 0
nt of
corporate
working
bonds
capital and
cash
52
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
managemen
t, the unused
amount of
raised funds
was
deposited in
the special
bank
account for
fund-raising
projects.
Total -- 283,000 94,835.45 187,383.54 31,477.24 31,477.24 11.12% 95,461.61 -- 0
Explanation of the overall use of raised funds
Upon the approval of the China Securities Regulatory Commission (hereinafter referred to as "CSRC") through the issuance of the
Approval on the Public Offering of Convertible Corporate Bonds by Guangdong Haid Group Co., Limited 《关于核准广东海大集
团股份有限公司公开发行可转换公司债券的批复》) (Zheng Jian Xu Ke [2020] No. 205), the Company was allowed to issue
convertible corporate bonds with a total face value of RMB 2,830 million to the public. Actually, the Company issued 28.30 million
convertible corporate bonds with a face value of RMB 100 each to the public, and raised RMB 2,830,000,000.00 of funds in total.
After deducting the fees related to the issuance, the actual net raised funds was RMB 2,810,854,230.16. The availability of the
above-mentioned raised funds has been verified by Grant Thornton China (Special General Partnership), which issued the Capital
Verification Report (《验资报告》) (Grant Thornton Yan Zi [2020] No. 440ZC0065) on 26 March 2020.
As at the end of 2021, the Company used RMB 1,873.8354 million of raised funds, accrued RMB 17.8325 million of interest
income (with banks' handling fees deducted), and temporarily replenished the working capital with RMB 874 million of idle raised
funds. The balance of its special account for raised fund deposit was RMB 80.6161 million.
(2) Committed projects of raised funds
√ Applicable □Not applicable
Unit: RMB’0,000
Whether Accumul
The Investme
projects Total ative Date Whether
Adjusted investme nt Benefits Whether
have committe investme when the there are
Committed investment total nt progress recorded the
been d nt projects material
projects and investment investme amount as at the during estimated
altered investme amount are ready changes
of excessive raised nt during end of the the benefits
(includin nt with as at the for their in the
funds amount the reporting reporting are
g partial raised end of the intended project
(1) reporting period (3) period reached
alternatio funds reporting use feasibility
period ＝(2)/(1)
n) period (2)
Committed investment projects
Animal feed project of 31 October
No 7,144.21 7,144.21 3,450.59 7,200.25 100.78% 1,121.83 No No
Nantong Haid with an 2021
53
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
annual output of 240,000
tons (hereinafter referred to
as the "Nantong Haid
project")
Animal feed project of
Qingyuan Haid with an
30
annual output of 240,000
No 6,493.11 6,493.11 1,049.5 6,504.38 100.17% September 2,713.24 Yes No
tons (hereinafter referred to
2021
as the "Qingyuan Haid
project")
Animal feed project of
Huai'an Hailong with an
31
annual output of 200,000
No 16,123.49 16,123.49 1,208.12 9,625.98 59.70% December -13.62 No No
tons (hereinafter referred to
2022
as the "Huai'an Hailong
project")
Animal feed project of
Nanning Haid with an
30
annual output of 480,000
No 23,589.07 23,589.07 7,752.94 18,839.4 79.86% November 886.23 No No
tons (hereinafter referred to
2021
as the "Nanning Haid
project")
Animal feed project of
Zhaoqing Gaoyao with an
annual output of 240,000 30 April
No 4,679.43 4,679.43 4,679.43 100.00% 1,722.37 No No
tons (hereinafter referred to 2020
as the "Zhaoqing Gaoyao
project")
Animal feed project of
Fuzhou Haid with an annual
30 June
output of 180,000 tons No 29,075.05 29,075.05 6,354.32 15,019.38 51.66% -1,896.97 No No
2022
(hereinafter referred to as the
"Fuzhou Haid project")
Animal feed project of
Qingyuan Haibei with an
annual output of 30,000 tons Yes 15,053.58 2,176.01 111.38 2,176.01 100.00% N/A Yes
(hereinafter referred to as the
"Qingyuan Haibei project")
Animal feed project of
31
Shaoguan Haid with an
No 13,964.32 13,964.32 4,331.17 14,036.59 100.52% December 2,208.59 Yes No
annual output of 400,000
2021
tons (hereinafter referred to
54
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
as the "Shaoguan Haid
project")
Animal feed project of
Qingyuan Hailong with an
31
annual output of 720,000
No 36,955.3 36,955.3 13,001.8 29,247.41 79.14% December 1,952.43 No No
tons (hereinafter referred to
2022
as the "Qingyuan Hailong
project")
Animal feed project of
Yicheng Haid with an annual 31
output of 380,000 tons No 16,509.88 16,509.88 7,536.59 8,996.37 54.49% December -470.74 No No
(hereinafter referred to as the 2022
"Yicheng Haid project")
Animal feed project of
Hexian Haid with an annual
30 June
output of 300,000 tons No 21,344.95 21,344.95 9,453.32 18,097.16 84.78% -610.3 No No
2022
(hereinafter referred to as the
"Hexian Haid project")
Animal feed project of
Kaifeng Haid with an annual
30 June
output of 300,000 tons No 17,069.03 17,069.03 5,175.76 10,800.57 63.28% 902.99 Yes No
2022
(hereinafter referred to as the
"Kaifeng Haid project")
Animal feed project of
Zhanjiang Haid with an
annual output of 200,000
Yes 20,380.33 N/A Yes
tons (hereinafter referred to
as the "Zhanjiang Haid
project")
Animal feed project of Yulin
Haid with an annual output 31
of 450,000 tons (hereinafter No 31,186.61 31,186.61 8,593.76 11,106.16 35.61% December -271.28 No No
referred to as the "Yulin 2022
Haid project")
Animal feed project of
Sichuan Rongchuan with an
annual output of 200,000 30 June
No 23,431.64 23,431.64 5,799.9 10,038.15 42.84% -1,024.06 No No
tons (hereinafter referred to 2022
as the "Sichuan Rongchuan
project")
Animal feed project of 30 June
No 22,000 12,187.54 12,187.54 55.40% - No No
Jiangmen Rongchuan with 2023
55
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
an annual output of 270,000
tons (hereinafter referred to
as the "Jiangmen Rongchuan
project")
Biological compound feed
project of Huainan Haid
with an annual output of 31 July
No 9,477.24 8,828.76 8,828.76 93.16% -605.72 No No
300,000 tons (hereinafter 2021
referred to as the "Huainan
Haid project")
Subtotal of committed
-- 283,000 281,219.34 94,835.45 187,383.54 -- -- 6,614.99 -- --
investment projects
Investment of excessive raised funds
N/A
Repaying bank loans (if
-- -- -- -- --
any)
Replenishing the
-- -- -- -- --
working capital (if any)
Subtotal of investment
of excessive raised -- -- -- -- --
funds
Total -- 283,000 281,219.34 94,835.45 187,383.54 -- -- 6,614.99 -- --
1. Due to the impact of COVID-19 on food consumption, the Nantong Haid project and the Zhaoqing
Gaoyao project failed to meet the objectives with respect to product mix and profitability. As such, these
projects failed to reach the predicted returns.
2. The Huai’an Hailong project failed to meet the objectives with respect to output and sales volume
because the project was not yet entirely put into production. As such, this project failed to reach the
predicted returns.
3. The Nanning Haid project failed to meet the objectives with respect to output and sales volume because
Cases and reasons for the project was not entirely completed and put into production until the second half of 2021. As such, this
failing to reach the project failed to reach the predicted returns.
planned progress or 4. Concerning the Fuzhou Haid project, the Yicheng Haid project, the Hexian Haid project, the Yulin Haid
predicted returns (by project and the Sichuan Rongchuan project, part of the equipment of some of the projects were put into
specific projects) production in mid 2021 but the respective projects were not yet entirely put into production. As such, these
projects failed to meet the objectives with respect to output and sales volume and thus failed to reach the
predicted returns.
5. The Qingyuan Hailong project failed to meet the objectives with respect to output and sales volume in
2021 because only part of its equipment were put into production in July 2020, indicating a short term of
operation. As such, this project failed to reach the predicted returns.
6. The Jiangmen Rongchuan project is still under construction and not ready for production.
7. The Huainan Haid project was put into production in July 2021, indicating a short-term of operation. As
56
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
such, this project failed to reach the predicted returns.
Explanations of the
material changes in the N/A
project feasibility
Amount, use, and use N/A
progress of excessive
raised funds
Applicable
Occurred during the reporting period
Changes of As reviewed at the 14th Meeting of the Fifth Board of Directors and the First Extraordinary General
implementation Meeting in 2021, it was approved to change the implementation entities and locations of the “Qingyuan
locations of the Haibei project” and the “Zhanjiang Haid project”. To be specific, the implementation entities of “Qingyuan
investment projects Haibei Biotechnology Co., Ltd.” and “Zhanjiang Haid Feed Co., Ltd.” were changed to “Jiangmen
with the raised funds Rongchuan Feed Co., Ltd.” and “Huainan Haid Biological Feed Co., Ltd.”, and the implementation
locations of “Qingyuan City, Guangdong Province” and “Zhanjiang City, Guangdong Province” to
“Duanfen Town, Taishan City, Guangdong Province” and “Shouxian County, Huainan City, Anhui
Province”.
Adjustments to the N/A
implementation
methods of the
investment projects
with the raised funds
Applicable
On 9 April 2020, Grant Thornton China issued the Verification Report on the Early Investment of
Self-raised Funds in the Investment Projects with Raised Funds by Guangdong Haid Group Co., Limited
(《关于广东海大集团股份有限公司以自筹资金预先投入募集资金投资项目的鉴证报告》) (Grant
Early investment and
Thornton Zhuan Zi (2020) No. 440ZA4433). The Company invested RMB 393,920,200 of self-raised
replacement concerning
funds in the raised fund projects in the preliminary stage. On 18 April 2020, the Proposal on Replacing
the investment projects
Self-raised Funds That Has Been Invested in Fund-raising Investment Projects with the Raised Funds (《关
with the raised funds
于以募集资金置换预先已投入募集资金投资项目的自筹资金的议案》) on the Ninth Meeting of the
Fifth Board of Directors. The Company replaced the self-raised funds that had been invested with the
raised funds of RMB 393,920,200. The interval between this replacement with raised funds and the arrival
of raised funds is shorter than six months.
Applicable
The Proposal on Temporary Replenishment of Working Capital with Partial Idle Raised Funds ( 关于使用
Temporary
部分闲置募集资金暂时补充流动资金的议案》) was reviewed and approved on the 24th Meeting of the
replenishment of
Fifth Board of Directors on 13 December 2021. It was approved that the Company could temporarily
working capital with
replenish working capital with no more than RMB 900 million of idle raised funds. The use term should be
the idle raised funds
less than 12 months upon the approval of the Board of Directors. As at 31 December 2021, the balance of
the idle raised funds for temporary replenishment of working capital was RMB 874 million.
Surplus raised funds for N/A
57
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
project implementation
and reasons for the
surplus
Use and ownership
In addition to temporary replenishment of working capital and cash management, the unused amount of
change of unused raised
raised funds was deposited in the special bank account for fund-raising projects.
funds
Problems in the use of
raised funds and
N/A
disclosure, or other
cases
(3) Altered projects of raised funds
√ Applicable □Not applicable
Unit: RMB’0,000
Whether
Accumulati
Total Investment there are
The ve Date when
investment progress as Benefits material
investment investment the projects Whether the
amount for at the end of recorded changes in
Project after Previous amount amount as are ready estimated
the project the during the the
alteration project during the at the end of for their benefits are
after reporting reporting feasibility
reporting the intended reached
alteration period (3)＝ period of the
period reporting use
(1) (2)/(1) project after
period (2)
alteration
Qingyuan
Jiangmen Haibei
30 June
Rongchuan project and 22,000 12,187.54 12,187.54 55.40% N/A No
2023
project Zhanjang
Haid project
Qingyuan
Haibei
Huainan 31 July
project and 9,477.24 8,828.76 8,828.76 93.16% -605.72 No No
Haid project 2021
Zhanjang
Haid project
Total -- 31,477.24 21,016.3 21,016.3 -- -- -605.72 -- --
1. Decision-making procedure executed for the changes:
According to the Proposal on the Changes to Certain Raised Funds Investment Projects
Reasons for the changes,
( 关于变更部分募集资金投资项目的议案》 approved at the First Extraordinary General
decision-making procedure executed
Meeting in 2021 on 3 February 2021, it has been agreed to transfer the raised funds for the
and information disclosed (by specific
“Qingyuan Haibei project” and the “Zhanjiang Haid project” and the cash management
projects)
income with the Guangzhou branch of HSBC Bank (China) Company Limited to the
“Jiangmen Rongchuan project” and the “Huainan Haid project”.
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Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
2. Reasons for the changes:
A. Previously, the Qingyuan Haibei project intended to build an annual capacity of 30,000
tons of aquatic premixture with an investment of RMB 216.0009 million. Due to reasons
such as the adjustments to the industry’s farming scale and structure and production areas as
well as the Company’s constant refinement of its product portfolio, the Company intends to
change the Qingyuan Haibei project to other feed projects so as to better meet market needs
and further refine the existing production capacity structure.
B. Previously, the Zhanjiang Haid project intended to build an annual capacity of 200,000
tons of biological compound feed with an investment of RMB 220.9288 million to increase
its supply to West Guangdong Province and East Guangxi Province. However, the feed
factory of Wuzhou Haid in East Guangxi Province has been completed, and construction
accelerated for the raised funds investment project of Nanning Haid with an annual output
of 480,000 tons of feed, which will help ease the supply pressure in the region to some
degree. In view of the priority levels of the projects and the Company’s capacity portfolio
needs, the Company intends to change the Zhanjiang Haid project to other feed projects.
To sum up, in view of market needs and the Company’s capacity portfolio needs, and in
order for better use of the raised funds, the Company has changed the construction
arrangements for the Qingyuan Haibei project and the Zhanjiang Haid project and has
decided to use the remaining raised funds for advance investment in the construction of the
Jiangmen Rongchuan project and the Huainan Haid project.
Cases and reasons for failing to reach 1. The Jiangmen Rongchuan project is still under construction and not ready for production.
the planned progress or predicted 2. The Huainan Haid project was put into production in July 2021, indicating a short-term
returns (by specific projects) of operation. As such, this project failed to reach the predicted returns.
VIII. Disposal of Material Assets and Equity Interest
1. Disposal of material assets
□ Applicable √ Not applicable
The Company did not dispose of any material asset in the reporting period.
2. Disposal of material equity interest
□ Applicable √ Not applicable
IX. Analysis of major subsidiaries and investees
√ Applicable □ Not applicable
Major subsidiaries and investees accounting for over 10% of the net income of the Company
Unit: RMB’0,000
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Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Type of Principal Registered Operating Operating
Name of company Total assets Net assets Net profit
company activities capital income profit
Production and
Qingyuan Haibei
sales of
Biotechnology Co.,
premixture,
Ltd. (hereinafter Subsidiary 1,000.00 131,091.05 98,068.51 71,175.42 22,634.28 19,552.63
additives and
referred to as
micro-ecologic
“Qingyuan Haibei”)
al products
China Haida Feed
Group (HK)
HKD
Limited (hereinafter Subsidiary Trading 56,683.36 43,392.83 110,812.52 26,011.05 25,978.77
10,000.00
referred to as “HK
Haid”)
Acquisition and disposal of subsidiaries during the reporting period
√ Applicable □ Not applicable
Methods to acquire and
Impact on overall production and
Name of companies dispose of subsidiaries
operation and results
during the reporting period
Ganzhou Lianduoli Feed Technology Co., Business combination not under common No material effects on the results of the
Ltd. control period
Business combination not under common No material effects on the results of the
Raoping Haide Biotechnology Co., Ltd.
control period
Business combination not under common No material effects on the results of the
Jiangmen Debao Group Co., Ltd.
control period
Maoming Debao Agriculture and Animal Business combination not under common No material effects on the results of the
Husbandry Co., Ltd. control period
Business combination not under common No material effects on the results of the
Guangzhou Denong Feed Co., Ltd.
control period
Guangzhou Debao Nongshan Feed Co., Business combination not under common No material effects on the results of the
Ltd. control period
Business combination not under common No material effects on the results of the
Foshan Dazhi Biotechnology Co., Ltd.
control period
Business combination not under common No material effects on the results of the
Taishan Debao Feed Co., Ltd.
control period
Foshan Hanheng Luggage Manufacturing Business combination not under common No material effects on the results of the
Co., Ltd. control period
Yueyang Fengtun Ecological Agriculture No material effects on the results of the
Newly established
Co., Ltd. period
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No material effects on the results of the
Guangdong Yiheng Investment Co., Ltd. Newly established
period
Wugang Yitun Ecological Agriculture Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Hunan Yitun Technology Co., Ltd. Newly established
period
No material effects on the results of the
Wuwei Haid Feed Co., Ltd. Newly established
period
Baoji Haid Agriculture and Animal No material effects on the results of the
Newly established
Husbandry Co., Ltd. period
Vinh Long Hailianke Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Haid Feed Bangladesh Limited Newly established
period
Dongying Haijingzhou Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
Shanwei Haizenong Marine Biotechnology No material effects on the results of the
Newly established
Co., Ltd. period
No material effects on the results of the
Zhenyuan Haidsun Protein Feed Co., Ltd. Newly established
period
No material effects on the results of the
Guangzhou An'an Logistics Co., Ltd. Newly established
period
Xiyu Haisheng (Guangzhou) Supply Chain No material effects on the results of the
Newly established
Co., Ltd. period
No material effects on the results of the
Jilin Haid Rongchuan Trade Co., Ltd. Newly established
period
Zhuhai Ronghai Farming Technology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Binh Dinh Hai Long Co., Ltd. Newly established
period
Suixian Haiding Veterinary Service Co., No material effects on the results of the
Newly established
Ltd. period
Yuncheng Haiding Veterinary Service Co., No material effects on the results of the
Newly established
Ltd. period
Shanxian Haiding Veterinary Service Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Heze Dingxin Veterinary Service Co., Ltd. Newly established
period
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No material effects on the results of the
Jining Haiding Veterinary Service Co., Ltd. Newly established
period
Jining Sishui Dingxin Veterinary Service No material effects on the results of the
Newly established
Co., Ltd. period
Feixian Hairuida Veterinary Service Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Yinan Dingxin Veterinary Service Co., Ltd. Newly established
period
Binzhou Haiding Veterinary Service Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Junan Haiding Veterinary Service Co., Ltd. Newly established
period
Liaocheng Haiding Veterinary Service Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Dongying Dinghao Farming Co., Ltd. Newly established
period
No material effects on the results of the
Xuzhou Hairuida Feed Co., Ltd. Newly established
period
Xuzhou Zhongyi Haiding Agriculture and No material effects on the results of the
Newly established
Animal Husbandry Co., Ltd. period
Lanling Haiding Hekangyuan Agriculture No material effects on the results of the
Newly established
and Animal Husbandry Co., Ltd. period
Gaotang Haiding Agriculture and Animal No material effects on the results of the
Newly established
Husbandry Co., Ltd. period
No material effects on the results of the
Jiangsu Fengcheng Technology Co., Ltd. Newly established
period
No material effects on the results of the
Gansu Fengying Technology Co., Ltd. Newly established
period
No material effects on the results of the
Henan Mugaole Feed Co., Ltd. Newly established
period
Henan Haihe Houyi Agriculture and No material effects on the results of the
Newly established
Animal Husbandry Technology Co., Ltd. period
Qingyuan Baisheng Aquatic Farming Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Yibin Yucan Veterinary Service Co., Ltd. Newly established
period
No material effects on the results of the
Dezhou Haiying Food Co., Ltd. Newly established
period
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Linyi Haihe Agriculture and Animal No material effects on the results of the
Newly established
Husbandry Technology Co., Ltd. period
No material effects on the results of the
Yantai Zhizhuren Pig Farm Feed Co., Ltd. Newly established
period
Gaomi Haihe Agriculture and Animal No material effects on the results of the
Newly established
Husbandry Technology Co., Ltd. period
No material effects on the results of the
Zhongshan Rongda Aquatic Seed Co., Ltd. Newly established
period
No material effects on the results of the
Dali Haizhi Trading Co., Ltd. Newly established
period
Chongqing Hainong Veterinary Service No material effects on the results of the
Newly established
Co., Ltd. period
No material effects on the results of the
Haile (Luliang) Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Maoming Haiwei Feed Co., Ltd. Newly established
period
No material effects on the results of the
Yangjiang Haihe Feed Co., Ltd. Newly established
period
No material effects on the results of the
Leizhou Hailong Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Sichuan Hailong Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Qinzhou Haiwei Feed Co., Ltd. Newly established
period
Yancheng Rongchuan Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Nanning Dachuan Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Yongzhou Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Baotou Haichen Feed Co., Ltd. Newly established
period
No material effects on the results of the
Jiangsu Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Guiyang Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Wuwei Haimu Biotechnology Co., Ltd. Newly established
period
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Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
No material effects on the results of the
Guilin Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Inner Mongolia Haid Feed Co., Ltd. Newly established
period
No material effects on the results of the
Guiyang Dachuan Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Xingtai Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Foshan Lianduoli Feed Co., Ltd. Newly established
period
Guangdong Haifulai Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Liupanshui Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Guangdong Haiqi Investment Co., Ltd. Newly established
period
Heze Haibo Youmei Technical Service Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Hubei Haiqi Technical Service Co., Ltd. Newly established
period
No material effects on the results of the
Kaifeng Haiqi Technical Service Co., Ltd. Newly established
period
No material effects on the results of the
Sichuan Haiqi Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Xishui Haiqi Technical Service Co., Ltd. Newly established
period
Kunming Haiqi Technical Service Co., No material effects on the results of the
Newly established
Ltd. period
Mianyang Haiqi FarmingTechnology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Ya’an Haiqi Farming Technology Co., Ltd. Newly established
period
Nanchang Haiqi Veterinary Medicine Co., No material effects on the results of the
Newly established
Ltd. period
Hengyang Haiqi Technical Service Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Jingzhou Haiqi Technical Service Co., Ltd. Newly established
period
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Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
No material effects on the results of the
Jingshan Haiqi Technical Service Co., Ltd. Newly established
period
No material effects on the results of the
Huaihua Haiqi Technical Service Co., Ltd. Newly established
period
No material effects on the results of the
Jieshou Haiqi Technical Service Co., Ltd. Newly established
period
No material effects on the results of the
Meizhou Haiqi Technology Co., Ltd. Newly established
period
Zhangzhou Haiqi Veterinary Medicine Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Maoming Haiqi Technology Co., Ltd. Newly established
period
No material effects on the results of the
Yangjiang Haiqi Technology Co., Ltd. Newly established
period
No material effects on the results of the
Qingyuan Haiqi Technology Co., Ltd. Newly established
period
Gansu Muqi Agricultural Technology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Yulin Haiqi Biotechnology Co., Ltd. Newly established
period
Qinzhou Pubei Haiqi Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
Xingtai Haiqi Farming Technology Service No material effects on the results of the
Newly established
Co., Ltd. period
No material effects on the results of the
Nanning Haililai Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Shaoyang Haid Feed Co., Ltd. Newly established
period
Shaoguan Dachuan Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Liaoning Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Huai’an Haichang Feed Co., Ltd. Newly established
period
Guizhou Hailongwang Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
Guangdong Huashite Testing Technology No material effects on the results of the
Newly established
Co., Ltd. period
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No material effects on the results of the
Hebei Haimu Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Dali Dachuan Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Yunnan Hairui Biotechnology Co., Ltd. Newly established
period
Henan Haid Jiuzhou Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Enshi Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Ningguo Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Chaozhou Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Haixin (Tianjin) Biotechnology Co., Ltd. Newly established
period
Haid Nanshan Biotechnology (Jinhu) Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Tongliao Haid Biotechnology Co., Ltd. Newly established
period
No material effects on the results of the
Huaihua Hailong Biotechnology Co., Ltd. Newly established
period
Guangzhou Haihan Financial Technology No material effects on the results of the
Newly established
Co., Ltd. period
Guangdong Haizhihui Aquaculture No material effects on the results of the
Newly established
Technology Co., Ltd. period
No material effects on the results of the
Jiangsu Haiwei Feed Co., Ltd. Newly established
period
Guangdong Hairuike Biotechnology Co., No material effects on the results of the
Newly established
Ltd. period
No material effects on the results of the
Hubei Haid Seed Technology Co., Ltd. Newly established
period
The Company took control of its in a
Foshan Chuanghuamei Biotechnology Co., business combination not under common No material effects on the results of the
Ltd. control in May 2021 and ceased to control period
it in July 2021 due to equity transfer.
The Company took control of its in a
Guangdong Zhongyu Duck Industry Co., No material effects on the results of the
business combination not under common
Ltd. period
control in May 2021 and ceased to control
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Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
it in August 2021 due to equity transfer.
The Company has ceased to control it due
Alaer Ruiliheng Biological Protein Co., No material effects on the results of the
to change to its corporate governance
Ltd. period
structure.
The Company has ceased to control it due
No material effects on the results of the
Wujiaqu Taikun Plant Protein Co., Ltd. to change to its corporate governance
period
structure.
Linyi Yitun Ecological Agriculture Co., No material effects on the results of the
De-registered
Ltd. period
No material effects on the results of the
Shaoxing Haid Biotechnology Co., Ltd. De-registered
period
Dingtao Hairong Livestock Farming No material effects on the results of the
De-registered
Service Specialized Cooperative period
Guigang Hairong Farming Service No material effects on the results of the
De-registered
Specialized Cooperative period
No material effects on the results of the
Dingtao Haiding Feed Co., Ltd. De-registered
period
Binzhou Dingxin Farming Service Co., No material effects on the results of the
De-registered
Ltd. period
No material effects on the results of the
Chengdu Haiqi Biotechnology Co., Ltd. De-registered
period
Heze Dingtao Hairong Farming No material effects on the results of the
De-registered
Specialized Cooperative Association period
No material effects on the results of the
Qingdao Daxin Feed Co., Ltd. De-registered
period
Yingde Haifeng Agriculture and Animal No material effects on the results of the
De-registered
Husbandry Co., Ltd. period
No material effects on the results of the
Deyang Dachuan Biotechnology Co., Ltd. De-registered
period
Description of major subsidiaries and investees
1. Qingyuan Haibei is principally engaged in the production and sales of aquatic and animal healthcare products.
It recorded good operating income and profit from aquatic and animal healthcare products in the year.
2. HK Haid is one of the Company’s platforms for importing and hedging raw materials. Its income and profit
came from trading and hedging of raw materials in the year.
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Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
X. Structured Entities Controlled by the Company
□ Applicable √ Not applicable
XI. The prospect of the company's future development
1. Industry pattern and trend
The 14th five- year- plan (2021-2025) is the first five years of the new journey on building a socialist modern
country in all-round way. The opinions of the CPC Central Committee and the State Council on comprehensively
promoting rural revitalization and accelerating agricultural and rural modernization (hereinafter referred to as the
"opinions on Rural Revitalization") put forward "improving the supply capacity of grain and important
agricultural products" and "accelerating the construction of a modern breeding system". The breeding industry
will move towards standardization, industrialization, large -scale, intelligence and capitalization, the feed industry
will enter the stage of high-speed integration, and the advantages and position of industry giants are becoming
increasingly prominent in the international market.
(1) Structural development of feed industry
During the 13th five- year -plan period from 2016 to 2020, the total feed output was increased by 21%, and the
industry continued to grow. With the industrialization and large-scale development of the aquaculture industry and
the increasing popularity of feed, the total feed output will continue to grow. The continuous growth of national
per capita disposable income, the upgrading of consumption, the improvement of urbanization level and the
change of consumption concept will increase the demand for high-quality, characteristic and high-standard meat
and food. The consumption of aquatic products, cattle and sheep meat will significantly increase, the consumption
of meat and poultry / egg poultry will be stable, the consumption of pork will decline, and the feed varieties will
also show structural adjustment.
(2) Industry integration is further intensified, and international competitiveness is increasing
The total feed growth slowed down and the competition among enterprises was intensified. Many factors such
as the impact of epidemic diseases, the awareness of food safety, the pressure of self-sufficiency in food supply
and the uncertainty of international trade, intensified the withdrawal of small and medium-sized enterprises in the
industry, providing more opportunities for enterprises with advantages in comprehensive strength, capital,
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Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
management, technology and talents, and the leading enterprises will expand rapidly to emerging markets such as
Southeast Asia, Northeast Asia and Africa with the increasing international competitiveness.
(3) The industry progress driven by technology is more obvious
Technology plays more and more important roles in industry competition along with the differentiation,
integration and development of feed industry. The global relevance of agricultural products is becoming closer
and closer. The weather conditions in some regions and the uncertainty of international trade relations will cause
sharp fluctuations of agricultural products’ prices. Animal nutrition demand, feed formula adjustment and raw
material substitution technology are the core aspects of feed technology competition. Other technologies, such as
the vigorous development of biological feed technology, the increasing variety and function of feed
microorganisms and enzyme preparations, show great potential in promoting the substitution of feed antibiotics
and the efficient utilization of feed resources, becoming the new competitive threshold for the industry.
(4) The seedling and animal protection industry will grow rapidly in the long term due to technology
progress and breeding upgrading
The opinions on Rural Revitalization put forward that "major scientific and technological projects of agricultural
biological breeding will be further increased" and "the construction of improved seed breeding system will be
strengthened to promote the integrated development of breeding and reproduction". Focusing on the development
of breeding industry, high-quality animal seedlings will be greatly demanded in the long term. Strengthening
animal healthcare is an important trend feature of the development of animal breeding, and the demand for animal
healthcare products will grow rapidly. In terms of aquaculture, with the upgrading of aquaculture industry and the
implementation of national inspection and quarantine of aquatic seedlings, the seedlings will enter the process of
industry integration and reshuffle, the demand for high-quality seedlings accredited by the State will increase
rapidly, and the aquatic seedlings in the aquaculture industry chains will also become more valuable, including
production / disease resistance / farming and other production and profit-making links. The upgrading of breeding
varieties and structure, the decline of profitability of conventional varieties and their models, the improvement of
consumption of special and excellent varieties in turn driving the upgrading of varieties and models. Large -scale
breeding bases is gradually increasing, and extended to circulation and processing, forming a regional or single
variety industry chain model of breeding / multiplying / raising / and processing.
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Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
(5) The breeding industry will be accelerated into large-scale, industrialization, intelligence and
capitalization
The factors such as land constraints, food safety, industrial technological progress and increasingly young
employees promote the process of industrialization, large-scale, intelligence and capitalization of the industry. At
present, the large-scale poultry breeding has initially formed, and the scale threshold has been continuously raised.
Due to the influence of African swine fever, pig breeding is rapidly completing the large-scale process. The
large-scale of aquaculture is also gradually developing. The scale of ruminant breeding is still in its infancy. There
is fund shortage in the whole industry. Excellent listed companies are increasing industrial expansion, the large
real- estate companies and the Science and Technology corporations also entered the animal industry. Through
bringing capital, manpower, technology and management, the excellent enterprises empower the animal industry
with automation, digitization and intellectualization, promoting the intelligent and industrialized development of
the animal industry.
(6) The development of industrial chain becomes more comprehensive and in-depth
The demand for green and safe food will promote the construction of food traceability system and agricultural
standardization system. Large excellent enterprises will gradually improve the industrial chain layout with their
technology, talents and capital advantages by connecting the entire businesses and being more capable of
controlling the whole process including seedling, breeding, feed, animal healthcare, slaughtering, transportation
and food processing, in turn further promoting large excellent enterprises more efficient and in-depth industrial
chain layout. Food safety issue also forces the professional docking of large-scale enterprises in the industry's
production links to ensure that each production link is safe, controllable and traceable, promoting the aggregation
of industrial chains and accelerating industry integration.
2. The prospect of company’s future development
(1). The goal of company's development is to become the leading high-tech agricultural and animal husbandry
company with sustainable development ability in China. The development is based on "creating value for
customers". Center on the upstream and downstream of breeding, the company focuses on seedling, animal
healthcare, feed, breeding, slaughtering, food processing and other links. The company builds an industry-leading
whole industry chain and provides comprehensive services for farmers including feed, seedling, animal healthcare
and breeding technical services, as well as other needs such as financial services for farmers and dealers,
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effectively improving the profitability of farmers and dealers, and realizing the win-win development mode
between the company and customers.
(2). The basic strategy of the industrial chain development is to scale up based on its specialization, and to extend
the industrial chain based on its core competitiveness. The company will take advantage of feed products as its
core business, and actively expands businesses such as raw materials, animal healthcare, seedlings, breeding,
circulation and food processing, to cultivate the professional ability in the industrial chain and build
comprehensive core competitiveness in the industrial chain.
(3). The company's five-year business development plan (2021-2025). The development in next five years is still
to focus on the needs of breeding links, provide overall services for farmers, and further expand the sales scale
and the profitability of feed, seedlings and animal healthcare products. At the same time, the company maintains
an appropriate amounts of pigs, aquatic products and poultry, resolutely strengthens the professional breeding
capacity, and scales them up based on specialization.
Feed business is the core business of the company. The company's feed sales target in next five years is 40 million
tons (2025, including export and internal use). In 2021, the company formulated an equity incentive plan
including more than 4000 employees. The annual growth target of feed sales in next five years is no less than 3.2
million tons and increases year by year. Until 2024 and 2025, the annual growth target is 6 million tons, and the
compound growth rate of five-year sales is 21%, which is much higher than the growth rate of feed industry and
peer listed companies in recent years and significantly higher than that of the company in previous years. If the
feed sales target can be successfully achieved, the company's market share will be greatly increased, the product
competitive advantage will become more and more obvious, and the company will have sustained and strong
competitive advantages.
The overall services for farmers must rely on seedlings and animal healthcare. At present, the company has
become the leader in aquatic seedlings and animal healthcare, and the sales scale and product quality are ahead of
the industry. In particular, shrimp seedlings have been performing well in recent years and have been accepted by
farmers, not only greatly improving the income of farmers, but also increasing the growth of feed sales. The
company continues to increase seedling research and development and business cooperation, and gradually
expands the advantages of seedlings into fish, pigs and poultry varieties. For the animal healthcare business, the
company will continue to promote the "thousand station plan” and plans to set up more than 1000 service stations
within five years to provide breeding technical services for farmers. The main products of service stations are
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animal healthcare products and technical services. Through the establishment of service stations, the company will
accelerate the upgrading of aquatic animal protection products and services, expand its leading advantages in the
industry, and serve the advantageous products to farmers all over the country (not limited to the company's feed
farmers). For livestock and poultry protection, the company will quickly build a professional livestock and poultry
service team with thousands of people to provide professional prevention, diagnosis, dispensing, after-sales and
other services for farmers, to further improve the profitability of farmers and their fidelity to the company's
products and services.
The breeding business sticks to the large-scale based on specialization. The development of breeding business can
deepen the understanding of the company and team on breeding needs and provide many talents with high-quality
services for feed, seedling and animal healthcare business. At the same time, the breeding business is also required
for the company to further expand and develop the downstream of the industrial chain in the future, such as food
processing business. In the future, the company hopes to provide healthy and traceable food materials for
customers. The professional breeding capacity must be opened up and the breeding size can be controlled at an
appropriate scale. The breeding business includes pig, aquatic and poultry breeding, will develop in the relatively
balanced manner. The development of breeding business must adhere to the large-scale based on specialization,
with mainly building the professional ability of the team.
XII. Reception of research investigations, communications and interviews during the
reporting period
√ Applicable □ Not applicable
Main
Type of Index to basic
Reception Communication discussions and
Date Place communication information on
method party information
party communication
provided
For details, please refer
Bosera Funds, to the Table of Investor
Taikang Asset, Relations Activity
Zhong Ou Asset, Records of Guangdong
Company The Company’s
China Merchants Haid Group Co.,
20 April 2021 Conference By phone Institution annual operating
Fund, Dacheng Limited 2021-001)
Room results
Fund, CIB Fund, published on the
Great Wall Fund, website of
etc. www.cninfo.com.cn on
22 April 2021
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For details, please refer
to the Table of Investor
Relations Activity
The investors
The Company’s Records of Guangdong
Company participating in
operations and Haid Group Co.,
28 April 2021 Conference Other Other the interaction of
development Limited 2021-002)
Room "Panorama Road
strategy published on the
Show"
website of
www.cninfo.com.cn on
29 April 2021
Harvest Fund,
Taikang Asset,
For details, please refer
Fullgoal Fund,
to the Table of Investor
UBS SDIC
Relations Activity
Fund, GF Fund
Multi-function The Company’s Records of Guangdong
Management,
Hall of Sheraton operations and Haid Group Co.,
20 May 2021 Field research Institution ICBC Credit
Guangzhou development Limited 2021-003)
Suisse Asset,
Panyu strategy published on the
Penghua Fund,
website of
China Universal
www.cninfo.com.cn on
Asset
24 May 2021
Management, E
Fund, etc.
For details, please refer
Harvest Fund, to the Table of Investor
Baoying Fund, Relations Activity
Purekind Fund, Records of Guangdong
Company The Company’s
New China Haid Group Co.,
27 July 2021 Conference By phone Institution interim
Asset Limited 2021-004)
Room operating results
Management, published on the
Guotai Fund, website of
etc. www.cninfo.com.cn on
28 July 2021
For details, please refer
Harvest Fund, to the Table of Investor
Baoying Fund, Relations Activity
Purekind Fund, Records of Guangdong
Company The Company’s
New China Haid Group Co.,
20 October 2021 Conference By phone Institution Q3 operating
Asset Limited 2021-005)
Room results
Management, published on the
Guotai Fund, website of
etc. www.cninfo.com.cn on
20 October 2021
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Section IV. Corporate Governance
I Overview
1. The Establishment of the Company System
From the listing of the Company to the end of the Reporting Period, the Company strictly complied with the
Company Law 《公司法》), the Securities Law 《证券法》), the Stock Listing Rules of Shenzhen Stock Exchange
(《深圳证券交易所股票上市规则》 ), the Guidelines No. 1 of the Shenzhen Stock Exchange for the
Self-regulation of Listed Companies—the Standard Operation of Main Board Listed Companies (《深圳证券交易
所上市公司自律监管指引第 1 号--主板上市公司规范运作》), and the laws and regulations and normative
documents and the Articles of Association, continued to improve the Company's internal corporate governance
structure, refine internal control environment, improve internal management policies, standardize corporate
operation, and strive to improve the Company's capability of governance. The actual situation of the corporate
governance conformed to the requirements of relevant normative documents issued by the China Securities
Regulatory Commission (CSRC) and Shenzhen Stock Exchange on the governance of listed companies.
2. Shareholders and General Meeting of Shareholders
During the reporting period, the Company strictly adhered to applicable laws and regulations such as the
Company Law ( 公司法》), the Articles of Association ( 公司章程》), and the Rules of Procedure of the General
Meeting of Shareholders (《股东大会议事规则》), as well as the Company’s internal control rules, and
standardized the convening, holding and voting procedures of the General Meeting of Shareholders to ensure that
all shareholders could be equal, and fully exercise their rights. In addition, as witnessed by the hired lawyers, the
legitimacy of the meeting’s convening, holding and voting procedures could be guaranteed, and relevant
legitimate rights and interests of the Company and its shareholders could be secured as well. In 2021, four general
meetings of shareholders were convened and held by the Board in total; the convening, holding and voting
procedures of such meetings were witnessed by the lawyers and all were legal and valid.
3. Directors and the Board of Directors
Strictly in accordance with the Company Law (《公司法》), the Articles of Association (《公司章程》), the Rules
of Procedure of the Board of Directors (《董事会议事规则》) and the Independent Director System (《独立董事
制度》), the Company has elected and appointed various directors, and such election and appointment procedures
are open, fair and just. Besides, the composition and number of directors meet relevant legal and regulatory
requirements. The members for the Company’s Fifth Board of Directors are all nominated, approved and elected
by the Board of Directors by means of the cumulative voting system. Currently, there are 7 directors, including 3
independent directors. Independent directors occupy more than one third of all directors and their qualifications
are in accordance with the Guidance Opinions on the Establishment of Independent Director System in Listed
Companies (《关于在上市公司建立独立董事制度的指导意见》).
All directors of the Company have performed their duties in strict compliance with relevant laws, regulations, and
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regulatory documents, attended all board meetings and carried out related works in a serious and responsible
manner, and firmly conformed to any statement and commitment made by directors. However, independent
directors have full right to know about the Company’s major issues and can issue independent opinions on major
issues without being influenced.
The Board of Directors has established the Audit Committee, the Remuneration and Appraisal committee, the
Strategy Committee and the Nomination Committee. Each committee can exercise its functions in accordance
with its work rules and make due contributions to the standardization of corporate governance. In the meantime,
the Board of Directors is able to carry out its work in strict accordance with relevant laws and regulations. All
directors of the Company are honest and trustworthy, diligent and responsible, attend corresponding board
meetings and general meetings with a serious attitude, actively participate in relevant training, and are familiar
with relevant laws and regulations.
4. Supervisors and the Supervisory Committee
The Company has strictly observed the Company Law (《公司法》), the Articles of Association (《公司章程》),
and other relevant regulations to appoint supervisors. The Fifth Supervisory Committee consists of three
supervisors, including two shareholder supervisors and one employee supervisor. The number and composition of
the Supervisory Committee meet relevant requirements stipulated in applicable laws and regulations. However,
the shareholder representative supervisors are elected by adopting the cumulative voting system, and the
employee supervisors are elected and appointed by means of the employees’ assembly in the form of secret ballot.
The number of supervisors that served as directors or senior management personnel of the Company in recent two
years does not exceed one half of the total number of supervisors of the Company, and the number of supervisors
nominated by a single shareholder does not exceed one half of the total number of supervisors of the Company.
The Company’s supervisors can earnestly fulfill their responsibilities in accordance with the Rules of Procedure
of the Supervisory Committee (《监事会议事规则》), effectively supervise and inspect the Company’s major
issues, related party transactions, the legality and compliance of duties performed by the Company’s directors and
senior management, and maintain legitimate rights and interests of the Company and its shareholders.
5. Internal Audit System
The Company has established the complete internal audit system and set up the internal audit department in
charge of the effective internal supervision of the Company’s daily operations.
6. Stakeholders
The Company fully respects and safeguards legitimate rights and interests of relevant stakeholders, realizes the
coordinated balance of interests of the society, shareholders, the Company, and employees etc., sincerely treats
suppliers and customers, earnestly cultivates every employee, develops the mutual benefit and win-win
cooperation with relevant stakeholders, and jointly promotes the Company’s sustained, healthy and rapid
development.
7. Information Disclosure and Transparency
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Pursuant to relevant laws and regulations, as well as the Company’s Information Disclosure System (《信息披露
制度》) and Investor Relations Management System (《投资者关系管理制度》), the Company has disclosed
corresponding information in a true, accurate, complete and timely manner to ensure that all shareholders have
equal access to such information.
The Chairman of the Board accepts primary responsibility for the management of information disclosure affairs.
The Company has designated the Board Secretary in charge of the Company’s information disclosure and investor
relations management, and the Securities Department serves as the executive department for information
disclosure and investor relations management. The Company pays special attention to communicate with investors
and will strengthen communication with investors by various means such as telephone, e-mail, and investor
relations interactive platform etc.
8. Investor Relations Management
The Company has always attached great importance to the management of investor relations, carried out related
works in accordance with the Investor Relations Management System (《投资者关系管理制度》) and other
systems, implemented the investor relations management by various means such as Shenzhen Stock Exchange
investor relations interactive platform, investor hot-lines, and reception of investors etc., strengthened the
communication with investors, and fully guaranteed the investors’ right to know.
The corporate governance is a systematic and long-term project that requires continuous improvement. After the
Company is successfully listed, it is willing to accept supervisions from all parties, adhere to the scientific outlook
on development, constantly improve the corporate governance system, and strengthen the implementation of
various laws and regulations to promote the healthy development of the Company and enhance the overall
competitiveness.
9. Insider Information Management
According to the Company Law (《公司法》), the Securities Law (《证券法》), the Guidelines No. 5 of the
Shenzhen Stock Exchange for the Self-regulation of Listed Companies—Management of Information Disclosure
Affairs 《深圳证券交易所上市公司自律监管指引第 5 号——信息披露事务管理》), the Stock Listing Rules of
Shenzhen Stock Exchange (《深圳证券交易所股票上市规则》), the Guidelines No. 1 of the Shenzhen Stock
Exchange for the Self-regulation of Listed Companies—the Standard Operation of Main Board Listed Companies
(《深圳证券交易所上市公司自律监管指引第 1 号--主板上市公司规范运作》), the Guidelines No. 5 for the
Regulation of Listed Companies—Establishment of Insiders Registration and Management System by Listed
Companies 《上市公司监管指引第 5 号——上市公司内幕信息知情人登记管理制度》 and other relevant laws,
regulations, and the Articles of Association ( 公司章程》), the Company has established the Management System
for Information Insider Registration (《内幕信息知情人登记管理制度》). The Company properly carried out
corresponding information insider registration and reporting works strictly according to relevant requirements and
systems, and recorded and disclosed the list of all information insiders and material matter progress
memorandums in all the links of reporting, transmitting, preparation, resolution-making and disclosure before any
information was disclosed. During the Reporting Period, the Company notified all directors, supervisors, senior
management and relevant information insiders that they were not allowed to buy and sell the Company’s shares
within the window period by means of SMS and e-mail 30 days before the disclosure of annual and interim
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reports and 10 days before the disclosure of quarterly reports, earnings forecast announcements and preliminary
earnings estimate announcements, and conducted an internal audit on the buying and selling of the Company’s
shares by directors, supervisors, senior management and relevant information insiders. During the reporting period,
no information insider was ever involved in the illegal buying and selling of the Company’s shares, and no
relevant personnel was suspected of being involved in insider trading and was imposed some supervision
measures and administrative penalties by competent regulatory departments.
Indicate by tick market whether there is any material incompliance with the applicable laws, administrative
regulations and regulations issued by the CSRC governing the governance of listed companies.
□ Yes √ No
No such incompliance.
II. The Company’s Independence from the Controlling Shareholder and the Actual
Controller in Asset, Personnel, Financial Affairs, Organizational Structure and Business
The Company has independent and complete businesses and independent management capabilities. It is
completely independent from the controlling shareholder in terms of asset, personnel, financial affairs,
organizational structure and business.
1. Asset: The property rights relationship between the Company and the controlling shareholder is clear. The
Company has independent land use rights and housing property. The Company's assets are independently
registered, set up in accounting, accounted for, and managed so as to avoid the controlling shareholder's
occupation for non-operating purposes and allocation of the Company's assets or the intervention of the operation
and management of such assets.
2. Personnel: The Company has established an independent human resources system. The controlling shareholder
exercises its rights and assumes corresponding obligations in accordance with the law, and does not affect the
personnel appointment or dismissal of the listed Company, nor restricted the duty fulfillment of the directors,
supervisors, senior management or other personnel of the listed Company by means other than exercising
shareholder's rights specified in laws and regulations.
3. Financial affairs: The Company has set up a complete and independent financial institution with sufficient
full-time personnel, established an independent accounting system and financial management system, set up
independent bank accounts, independently paid taxes, allocated funds, and made financial decisions. As a result,
the controlling shareholder cannot intervene in the Company's financial management;
4. Organizational structure: The Company's Board of Directors, Supervisory Committee, and internal functional
departments can independently operate. There is no leader-member relation between the controlling shareholder
and internal institutions. The controlling shareholder did not directly or indirectly intervene in the Company's
decision-making and business activities without the General Meeting of Shareholders.
5. Business: The business structure of the Company is independent and complete, which is of the business
capability of independent market orientation and management. There is no competition in terms of the Company's
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business cope, business nature, customer objects, and product replaceability. In addition, the controlling
shareholder cannot harness its controlling position to the Company to try to gain the Company's business
opportunities. Moreover, the controlling shareholder cannot substitute the General Meeting of Shareholders and
the Board of Directors to directly make major decisions for the listed company and intervene in the normal
decision-making process of the listed company.
III. Horizontal Competition
□ Applicable √ Not applicable
IV. Annual and Extraordinary General Meetings of Shareholders Convened during the
Reporting Period
1. General Meetings of Shareholders Convened during the Reporting Period
Investor
Date of the
Meeting Type participation Disclosure date Resolutions
meeting
ratio
For details, see the Announcement on
Resolutions of First Extraordinary General
First Extraordinary Meeting of Shareholders of 2021 (No.
General Meeting of Extraordinary 58.44% 3 February 2021 4 February 2021 2021-019) disclosed on Securities Times,
Shareholders of 2021 China Securities Journal, Shanghai
Securities News, Securities Daily and
www.cninfo.com.cn
For details, see the Announcement on
Resolutions of 2020 Annual General
2020 Annual General Meeting of Shareholders (No. 2021-064)
Meeting of Annual 58.41% 20 May 2021 21 May 2021 disclosed on Securities Times, China
Shareholders Securities Journal, Shanghai Securities
News, Securities Daily and
www.cninfo.com.cn
For details, see the Announcement on
Resolutions of Second Extraordinary
Second
General Meeting of Shareholders of 2021
Extraordinary
Extraordinary 62.77% 11 August 2021 12 August 2021 (No. 2021-086) disclosed on Securities
General Meeting of
Times, China Securities Journal, Shanghai
Shareholders of 2021
Securities News, Securities Daily and
www.cninfo.com.cn
For details, see the Announcement on
Third Extraordinary
30 December 31 December Resolutions of Third Extraordinary
General Meeting of Extraordinary 62.64%
2021 2021 General Meeting of Shareholders of 2021
Shareholders of 2021
(No. 2021-112) disclosed on Securities
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Times, China Securities Journal, Shanghai
Securities News, Securities Daily and
www.cninfo.com.cn
2. Extraordinary General Meetings of Shareholders Convened at Request of Preferred Shareholders with
Resumed Voting Rights
□ Applicable √ Not applicable
V. Directors, Supervisors and Senior Management
1. General Information
Increase Decrease
Opening Other Closing
Starting Ending in in Reasons
Office Incumben sharehol increase/ sharehol
Name Gender Age date of date of Reportin Reportin for share
title t/Former ding decrease ding
tenure tenure g Period g Period changes
(share) (share) (share)
(share) (share)
Chairman
6 June 16 July
Hua Xue of the Incumbent Male 52
2007 2022
Board
25 May 16 July
Hua Xue President Incumbent Male 52
2010 2022
Vice
Yingzhuo Chairman 6 June 16 July
Incumbent Male 54
Xu of the 2007 2022
Board
18
7 June
Li Tian Director Former Female 50 January 1,965,100 1,965,100
2016
2021
16 July 16 July
Qi Cheng Director Incumbent Male 42 70,000 70,000
2019 2022
Executive
16 July 16 July
Qi Cheng Vice Incumbent Male 42
2019 2022
President
3 Personal
Xueqiao 16 July
Director Incumbent Male 55 February 340,900 85,200 255,700 financial
Qian 2022
2021 needs
Xueqiao Vice 16 July 16 July
Incumbent Male 55
Qian President 2019 2022
Xueqiao Chief Incumbent Male 55 6 June 16 July
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Qian Engineer 2007 2022
Independe
Jianfang 16 July 16 July
nt Incumbent Male 66
Gui 2019 2022
Director
Independe
Jianguo 16 July 16 July
nt Incumbent Male 60
He 2019 2022
Director
Independe
Yunguo 16 July 16 July
nt Incumbent Male 56
Liu 2019 2022
Director
Zhenxion Superviso 6 June 16 July
Incumbent Male 52
g Qi r 2007 2022
16
Superviso 16 July
Hua Wang Incumbent Male 35 November
r 2022
2020
16
Yongfang Superviso 16 July
Incumbent Female 33 November
Mu r 2022
2020
Personal
Guoxiang Vice 16 July 16 July
Incumbent Male 53 270,170 67,500 202,670 financial
Liu President 2019 2022
needs
Shaolin Vice 16 July 16 July
Incumbent Male 48 330,900 330,900
Yang President 2019 2022
Chief 22
Shaolin 16 July
Financial Incumbent Male 48 October
Yang 2022
Officer 2012
Xiewu Vice 16 July 16 July
Incumbent Male 54 66,780 66,780
Jiang President 2019 2022
Personal
Guocheng Vice 16 July 16 July
Incumbent Male 50 323,700 80,900 242,800 financial
Mi President 2019 2022
needs
Personal
Zhongzhu Vice 16 July 16 July
Incumbent Male 52 251,470 62,800 188,670 financial
Chen President 2019 2022
needs
Mingzhon Vice 6 June 16 July
Incumbent Male 57
g Chen President 2007 2022
Zhijian Vice 26 July 16 July
Incumbent Male 44 412,244 412,244
Huang President 2012 2022
Zhijian Board 26 July 16 July
Incumbent Male 44
Huang Secretary 2012 2022
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Total -- -- -- -- -- -- 4,031,264 0 296,400 3,734,864 --
Indicate whether any director, supervisor or senior management resigned before the expiry of their tenures during the reporting
period.
√ Yes □ No
Ms. Li Tian resigned as Director of the Fifth Board of Directors on 18 January 2021 for personal reasons and ceased to be a member
of the Audit Committee and the Strategy Committee under the Board of Directors at the same time. For further information, see the
Proposal on Change of Director (Announcement No. 2021-013) disclosed by the Company on the media designated for information
disclosure, namely Securities Times, China Securities Journal, Shanghai Securities News, Securities Times and
http://www.cninfo.com.cn dated 18 January 2021.
Change in directors, supervisors and senior management:
√ Applicable □ Not applicable
Name Office title Type of change Date Reason
Li Tian Director Resignation 18 January 2021 Voluntary resignation
Xueqiao Qian Director Appointed 3 February 2021
2. Brief Biographies
Professional backgrounds, main working experience and current responsibilities in the Company of the incumbent
directors, supervisors and senior management:
1. Directors
(1) Hua Xue
Mr. Hua Xue is an engineer. He graduated from College of Fisheries of Huazhong Agricultural University in 1992
with a major in special aquaculture; in 1995, he obtained the master’s degree in zoology from School of Life
Sciences of Sun Yat-Sen University. As one of the founders of the Company, he now serves as the Chairman of
the Board and President (General Manager) of the Company, as well as an Executive Director of the Company’s
controlling shareholder Guangzhou Haihao Investment Co., Ltd. He was/is the Executive Vice President of China
Feed Industry Association (CFIA), Chairman of China Vocational Education Group of Modern Fishery, Vice
Chairman of China Association of Young Rural Entrepreneurial Leaders (CAYREL), Chairman of Guangdong
Hi-tech Enterprise Association (GDHTEA), Vice President of Guangdong Feed Industry Association, Vice
Chairman of Guangdong Antibiotic-Free Feed Industry Alliance, the NPC Member of the 14th National Congress
of the Communist Party of Guangzhou, a member of the 11th Chinese People’s Political Consultation Conference
Guangzhou Committee, the NPC Member of the 16th National Congress of the Communist Party of Guangzhou,
Vice Chairman of the 15th Executive Committee of Guangzhou Federation of Industry and Commerce, and
Honorary Chairman of Guangzhou Feed Profession Association (GZFPA). Meanwhile, he is recognized as
“Leading Entrepreneur in China’s Feed Industry” by the Ministry of Agriculture, and “Top 30 Excellent
Entrepreneurs in China” by China Feed Industry Association (CFIA). Mr. Hua Xue holds 39.75% equity interests
in the Company's controlling shareholder Guangzhou Haihao Investment Co., Ltd. and is the actual controller of
the Company.
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(2) Yingzhuo Xu
Mr. Yingzhuo Xu is one of the founders of the Company, and he now serves as the Company’s Vice Chairman of
the Board. He holds a bachelor’s degree and is a livestock specialist. He also holds a master’s degree in business
administration from HEC Paris. From 1991 to 1997, he worked for Guangdong Academy of Agricultural Sciences
in technology research and promotion with respect to feed for the animal husbandry industry. He served as a Vice
President and Director of the Company starting from 1998 before being a Vice Chairman of the Board of the
Company. Mr. Yingzhuo Xu holds 27% equity interests in Guangzhou Haihao Investment Co., Ltd., the
Company's controlling shareholder.
(3) Qi Cheng
Mr. Qi Cheng graduated from the major of Automation of Huazhong University of Science and Technology in
2002; studied the major of World Economy in Sun Yat-sen University from 2005 to 2008 and obtained the
Master’s degree; studied EMBA in CEIBS from 2013 to 2015 and obtained MBA. From 2002 to 2010, he served
as Process Engineer, Operation Manager, Supply Chain Manager and Director of Technology in Guangzhou
Procter & Gamble Co., Ltd.; from 2010 to 2017, he served as Operation Director of East Asia-Pacific Region and
Global Supply Chain Director in Essel Propack Co., Ltd.. Joining the Company in March 2017, he currently
serves as a Director, an Executive Vice President (Vice General Manager) and the General Manager of the South
China Region of the Company.
(4) Xueqiao Qian
Dr. Xueqiao Qian, Chinese Han nationality, is an Associate Professor and has obtained the doctorate degree from
the Institute of Hydrobiology, Chinese Academy of Science. He successively presided over or participated in the
Hubei Provincial Natural Science Fund Project -- Development and Utilization of Feather Proteins in Fishery
Feeds, the development projects of the State Key Laboratory of Freshwater Ecology and Biotechnology -- Effects
of Nutrition Levels and Nutritional History on Fish’s Growth and Activities, Research on the Feeding Behavior
and Chemical Sensation of Allogynogenetic Crucian Carp, and Studies on the Utilization of Plant Protein by Main
Cultured Freshwater Fish, the NSFC Project -- Studies on the Comparative Nutritional Energetics of Feed Protein
Requirements of Carnivorous Fish and Omnivorous Fish, and the MOA’s 948 project -- Artificial Propagation and
Large-scale Aquaculture of Paddlefish etc.. Further, he has published more than 20 papers, of which, three papers
were published in international publications and included in SCI. He joined the Company in 2004 and is mainly
engaged in the aquatic animal nutrition and feed research and the development of new feed additives. Now, he is a
Director, Vice President (Vice General Manager) and the Chief Engineer of the Company. And he holds 3%
equity interests in the Company’s controlling shareholder Guangzhou Haihao Investment Co., Ltd..
(5) Jianfang Gui
Dr. Jianfang Gui has obtained PhD and is a doctoral supervisor, academician of the Chinese Academy of Sciences
and of The World Academy of Sciences. He graduated from the major of Cytobiology of Wuhan University and
obtained the Bachelor’s degree in January 1982; obtained the Master’s degree in Genetics from Wuhan University
in December 1984 and joined in Institute of Hydrobiology, Chinese Academy of Sciences in the same year and
has since worked there. In 1995, he obtained the Doctor’s degree of science from Institute of Hydrobiology,
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Chinese Academy of Sciences. From 1991 to 1994, he paid work visits and conducted postdoctoral research in
Medical College of Ohio and US San Diego. From 1995, he served as Researcher and Doctoral Supervisor in
Institute of Hydrobiology, Chinese Academy of Sciences. He served as Executive Deputy Director and Director of
Hydrobiology from 1999 to 2007, Director of State Key Laboratory of Freshwater Ecology and Biotechnology
from 2001 to 2011, and Independent Director of the 1st and 2nd sessions of the Board of the Company from 2007
to 2013. Currently he serves as a research fellow of the Institute of Hydrabiology, Chinese Academy of Sciences,
a Vice President of China Society of Fisheries, and an Independent Director of the Company.
(6) Jianguo He
Dr. Jianguo He has obtained PhD and is a professor of Sun Yat-sen University, winner of “The National Science
Fund for Distinguished Young Scholars” and Chief Scientist of the State Shrimp and Crab Industry Technology
System. He graduated from the major of Zoology of Sun Yat-sen University and obtained the Doctor’s degree of
science in 1990. He has been working in Sun Yat-sen University since 1991. He served as Deputy Director of
College of Life Sciences, Sun Yat-sen University from 2000 to 2008, and Director of College of Marine Science,
Sun Yat-sen University from 2008 to 2018. His current positions include Director of State Key Laboratory of Pest
Control and Resource Utilization (Sun Yat-sen University), Director of China-ASEAN Mariculture Technology
“Belt and Road” Joint Laboratory, Member of Fisheries Advisory Committee of MARA, Deputy Director of
Aquacultural Disease Control Expert Commission of MARA, President of Guangdong Zoological Society, Vice
President of the Crustacean Branch of China Zoological Society, and Independent Director of the Company.
(7) Yunguo Liu
Dr. Yunguo Liu has obtained the Doctor’s degree in management (accounting) from Xiamen University. His
current positions and titles include Professor of Accounting and Doctoral Supervisor in Sun Yat-sen Business
School (SYSBS), Director of Sun Yat-sen University Cost and Management Accounting Research Center,
Director of School of Accountancy in Guangzhou Xinhua University (a private university), Member of
Management Accounting Professional Committee of Chinese Accounting Society, Executive Director of Cost
Research Society of China, a management, accounting and consultancy expert of the Ministry of Finance, Leading
Talent in Accountancy (Phase I) under the Ministry of Finance, Third Batch of Shortlisted Candidates for Special
Support Program of the Development of State Leading Talents in Accountancy under the Ministry of Finance,
Shortlisted Candidate (2019) for the Development of Accounting Celebrities under the Ministry of Finance,
Member of CGMA North Asian 100 Think Tank Leaders, Member of IMA China Academic Consultation
Commission, and Vice Chairman of Guangdong Association of Management Accountants. Currently, he is also
Independent Director of Shenzhen Heungkong Holding Co., Ltd. (600162.SH), Guangdong Daya Smart Kitchen
Appliances Co., Ltd. (837009.OC) and Changwei Information Technology Development Co., Ltd..
2. Supervisors
(1) Zhenxiong Qi
Dr. Zhenxiong Qi is a doctoral degree holder and senior engineer. He successively participated in a key program
of National Natural Science Foundation of China, the National Key Technologies R & D Program of China during
the 8th Five-Year Plan Period, National Climb—B Plan, and programs of the Shandong and Guangdong
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Provincial Natural Science Funds. Meanwhile, he has also published many research papers, applied for multiple
invention patents and been granted a State Technological Invention Award (Second Prize). Since he joined the
Company, he has been mainly engaged in researches on animal nutrition and feed, aquatic farming and disease
control. He has years of experience in product development, grass-root farming and technology promotion. He is
now the Chairman of the Company’s Supervisory Committee. Mr. Zhenxiong Qi holds 0.1% equity interests in
the Company’s controlling shareholder Guangzhou Haihao Investment Co., Ltd..
(2) Hua Wang
Mr. Hua Wang, Chinese Han nationality, is a member of the CPC, an economist and a political mentor. Hua Wang
majored in politics and administration and graduated from Southwest Jiaotong University in 2009. He obtained a
professional master's degree in political theory from Wuhan University in 2011. Hua Wang worked for China
Tunnel Construction Co. Ltd. Guangdong from July 2011 to March 2017, and worked for Guangdong Cinda Real
Estate Co., Ltd. from June 2017 to March 2019. He joined Guangdong Haid Group Co., Limited in April 2019,
and currently serves as the Senior Manager of the Group's Secretary Office.
(3) Yongfang Mu
Ms. Yongfang Mu, Chinese Han nationality, is an intermediate accountant. Yongfang Mu graduated from Henan
University of Economics and Law in June 2012, majoring in accounting. She joined Guangdong Haid Group Co.,
Limited in July 2012 and has held positions related to cost accounting, budget management and financial
management for the Company. She currently serves as Financial Director of the Company.
3. Senior Management
(1) Guoxiang Liu
Mr. Guoxiang Liu is an assistant research fellow. He graduated from the Aquaculture Department of Huazhong
Agricultural University in 1992, majoring in special aquaculture professionalism. He is now a Vice President
(Vice General Manager) and the Central China General Manager of the Company, in addition to being the Vice
Chairman of Hubei Province Feed Industry Association. Mr. Guoxiang Liu holds 1.5% equity interests in the
Company’s controlling shareholder Guangzhou Haihao Investment Co., Ltd..
(2) Shaolin Yang
Mr. Shaolin Yang has obtained the master’s degree. Graduated from Sun Yat-sen University with a major in
Business Administration, he is also a senior accountant, certified public accountant, and certified tax accountant,
and has been selected and listed into the expert database of the high-tech enterprises of Department of Science and
Technology of Guangdong Province. From December 2008 to April 2012, he served as Executive Director, CFO
and Joint Secretary of KEE Holdings Company Limited (HK.02011). From May 2016 to May 2021, he served as
a supervisor of Guangdong Association of Management Accountants (GAMA); and has become Vice Chairman
of GAMA since October 2021. Since June 2016, he has acted as an extramural tutor for master’s degree students
in accounting of Sun Yat-sen Business School. Since 2021, he has been a tutor for master’s degree students in
accounting of Guangdong University of Foreign Studies. In April 2012, he joined the Company and is currently
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the Company’s Vice President (Vice General Manager) and CFO.
(3) Xiewu Jiang
Mr. Xiewu Jiang is an aquacultural engineer. He graduated from the major of Special Aquaculture of College of
Fisheries, Huazhong Agricultural University in 1992. Subsequently, he studied in the postgraduate program of
Aquatic Animal Nutrition of Sun Yat-sen University and EMBA of South China University of Technology.
Currently, he serves as Vice President (Deputy General Manager) of the Company and General Manager of
Aquacultural Breeding/Premix BU. His other positions include Director of Guangzhou Municipal Agricultural
Leading Enterprises Association, Executive Director of the First Board of Directors of the Aquatic Seed Branch of
China Fisheries Association, Chairman of Weifang Fisheries Association, Vice Chairman of Guangdong Ocean
Association, and Vice Chairman of the Marine Animal Branch of Guangdong Ocean Association. Mr. Xiewu
Jiang holds 4.5% equity interests in the Company’s controlling shareholder Guangzhou Haihao Investment Co.,
Ltd..
(4) Guocheng Mi
Mr. Guocheng Mi graduated from the major of Freshwater Fishery of Southwest Agricultural University. He
joined in the Company in 2010 and currently serves as a Vice President (Vice General Manager) and the General
Manager of the Pig Farming BU of the Company.
(5) Zhongzhu Chen
Mr. Zhongzhu holds an MBA degree for senior management personnel from Xiamen University. He joined in the
Company in 2004 and currently serves as a Vice President (Vice General Manager) and the General Manager of
the Shrimp Feed BU of the Company.
(6) Mingzhong Chen
Mr. Mingzhong Chen graduated from MBA of Hong Kong Baptist University. His past titles include Deputy to
Zhuhai Municipal People’s Congress and Member of Shaowu Municipal CPPCC and current social titles include
Vice President of Guangzhou Municipal Agricultural Leading Enterprises Association, Vice President of the
Standing Committee of Panyu District Federation of Industry and Commerce of Guangzhou, Vice President of the
three federations of Guangzhou (including Guangzhou Industrial Economy Federation) and Executive Vice
President of Nancun General Chamber of Commerce of Panyu District, Guangzhou. He has won a number of
honors and titles, such as “Excellent Entrepreneur for Caring for Employees in Panyu District, Guangzhou”. He
joined in the Company in 2004 and served as the head for project investment and preparations and Director of
Purchase. He currently serves as a Vice President (Vice General Manager) of the Company and is responsible for
public relations, brand image and promotion of the Company.
(7) Zhijian Huang
Mr. Zhijian Huang is an accountant and a bachelor’s degree holder. He joined the Company in 2004 and is now a
Vice President (Vice General Manager) and the Board Secretary of the Company.
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Posts concurrently held in shareholding entities:
√ Applicable □ Not applicable
Post held in Remuneration or
Starting date of Ending date of
Name Shareholding entity shareholding allowance from
tenure tenure
entity shareholding entity
Guangzhou Haihao Investment Co., Executive
Hua Xue 27 September 2006 No
Ltd. director
Guangzhou Haihao Investment Co.,
Xueqiao Qian Supervisor 1 December 2021 No
Ltd.
Guangzhou Haihao Investment Co., General
Yingzhuo Xu 1 December 2021 Yes
Ltd. Manager
Yingzhuo Xu has ceased to be paid by the Company and started to be paid by Guangzhou Haihao Investment Co.,
Note
Ltd. since December 2021.
Posts held concurrently in other entities:
√ Applicable □ Not applicable
Remuneration
Post held in or allowance
Name Other entity Starting date of tenure Ending date of tenure
other entity from the
entity
Guangdong Aerocity Holding Co.,
Hua Xue Director 21 January 2015 No
Ltd.
Guangzhou Huading Investment Executive
Hua Xue 4 June 2021 No
Holding Co., Ltd. Director
Guangzhou Huayu Investment Executive
Hua Xue 14 December 2021 No
Co., Ltd. Director
Zhuhai Haihao Industrial Executive
Yingzhuo Xu 20 March 2020 No
Investment Co., Ltd. Director
Guangzhou Haihao Technology
Yingzhuo Xu Director 20 March 2020 No
Industry Operation Co., Ltd.
Guangdong Haihaowan Executive
Yingzhuo Xu 22 April 2020 No
Development Co., Ltd. Director
Guangzhou Haihao Biotechnology Executive
Yingzhuo Xu 29 April 2020 No
Co., Ltd. Director
Guangzhou Haoyue
Executive
Yingzhuo Xu Biotechnology Development Co., 29 May 2020 No
Director
Ltd.
Guangzhou Zhuoling Investment Executive
Yingzhuo Xu 2 June 2021 No
Development Co., Ltd. Director
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Guangzhou Zhuoyi Investment
Yingzhuo Xu Supervisor 4 June 2021 No
Development Co., Ltd.
Guangzhou Zhuosheng Executive
Yingzhuo Xu 8 June 2021 No
Investment Holding Co., Ltd. Director
Guangzhou Huayu Investment
Yingzhuo Xu Manager 14 December 2021 No
Co., Ltd.
Institute of Hydrobiology, Chinese
Jianfang Gui Research fellow 1 August 1995 Yes
Academy of Sciences
Jianguo He Sun Yat-Sen University Professor 1 December 1994 Yes
Yunguo Liu Sun Yat-Sen University Professor 1 December 1999 Yes
Guangdong Daya Smart Kitchen Independent
Yunguo Liu 22 June 2017 12 October 2022 Yes
Appliances Co., Ltd. Director
Shenzhen Heungkong Holding Independent
Yunguo Liu 6 May 2016 17 May 2022 Yes
Co., Ltd. Director
Changwei Information
Independent
Yunguo Liu Technology Development Co., 1 September 2016 1 September 2022 Yes
Director
Ltd.
Bangpu Breeding Technology Co.,
Xiewu Jiang Director 1 May 2019 No
Ltd.
Extramural
Tutor for
Shaolin Yang Sun Yat-Sen University 5 June 2016 5 June 2022 Yes
master’s degree
students
Tutor for
Guangdong University of Foreign
Shaolin Yang master’s degree 1 January 2021 1 January 2025 Yes
Studies
students
Guangdong Association of
Shaolin Yang Vice Chairman 1 October 2021 1 October 2027 No
Management Accountants
Note N/A
Punishments imposed in the recent three years by the securities regulator on the incumbent directors, supervisors and senior
management as well as those who left in the Reporting Period:
□ Applicable √ Not applicable
3. Remuneration of Directors, Supervisors and Senior Management
Decision-making procedure, determination basis and actual payments of remuneration for directors, supervisors
and senior management:
The remuneration of the Company’s directors, supervisors and senior management is in strict compliance with the
Company’s Rules of Procedure for Meetings of Shareholders ( 股东大会议事规则》 and Rules of Procedure for
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Board (《董事会议事规则》), as well as with the Company Law and the Company’s Articles of Association. The
remuneration is determined according to the Company’s operating performance and these personnel’s
performance appraisal indicators.
Remuneration of directors, supervisors and senior management in the Reporting Period:
Unit: RMB’0,000
Total before-tax
remuneration Remuneration
Name Office title Gender Age Incumbent/Former
from the from related party
Company
Chairman of the
Hua Xue Board and General Male 52 Incumbent 303.46 No
Manager
Vice Chairman of the
Yingzhuo Xu Male 54 Incumbent 87.51 Yes (note 1)
Board
Li Tian (note 3) Director Female 50 Former 0 No
Jianfang Gui Independent Director Male 66 Incumbent 12 No
Jianguo He Independent Director Male 60 Incumbent 12 No
Yunguo Liu Independent Director Male 56 Incumbent 12 No
Zhenxiong Qi Supervisor Male 52 Incumbent 163.81 No
Hua Wang Supervisor Male 35 Incumbent 49.52 No
Yongfang Mu Supervisor Female 33 Incumbent 42.32 No
Director and
Qi Cheng (note 2) Executive Vice Male 42 Incumbent 174.48 No
President
Guoxiang Liu Vice President (Vice
Male 54 Incumbent 148.51 No
(note 2) General Manager)
Director, Vice
Xueqiao Qian President (Vice
Male 55 Incumbent 176.87 No
(note 2) General Manager)
and Chief Engineer
Vice President (Vice
Shaolin Yang General Manager)
Male 48 Incumbent 159.57 No
(note 2) and Chief Financial
Officer
Xiewu Jiang Vice President (Vice
Male 54 Incumbent 148.9 No
(note 2) General Manager)
Guocheng Mi Vice President (Vice
Male 50 Incumbent 149.53 No
(note 2) General Manager)
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Zhongzhu Chen Vice President (Vice
Male 52 Incumbent 129.57 No
(note 2) General Manager)
Mingzhong Chen Vice President (Vice
Male 57 Incumbent 104.4 No
(note 2) General Manager)
Vice President (Vice
Zhijian Huang
General Manager) Male 44 Incumbent 120.38 No
(note 2)
and Board Secretary
Total -- -- -- -- 1,994.83 --
Notes:
1. Yingzhuo Xu, Vice Chairman of the Board of the Company, has acted as General Manager of the Company’s controlling
shareholder Guangzhou Haihao Investment Co., Ltd. (hereinafter referred to as “Haihao Investment”) since December 2021, and has
been paid by Haihao Investment since 1 December 2021. His remunerations in the table above are salaries, year-end bonuses, etc.
from the Company for the period from January to November 2021.
2. The table above is exclusive of a total of RMB 27.3744 million out of the operating profit of the last three years that were granted
in 2021 as rewards to Vice General Managers Qi Cheng, Guoxiang Liu, Xueqiao Qian, Shaolin Yang, Xiewu Jiang, Guocheng Mi,
Zhongzhu Chen, Mingzhong Chen and Zhijian Huang. The aforesaid amounts have been given to their personal accounts after
deducting the individual income tax as required.
3. Director Li Tian has resigned on 18 January 2021 before the expiry of her tenure.
VI. Performance of Duties by Directors in the Reporting Period
1. Board Meetings Convened in the Reporting Period
Meeting Date of the meeting Disclosure date Resolutions
The following proposals were deliberated and approved: 1. The Proposal
on the Changes to Certain Raised Funds Investment Projects (《关于变
更 部 分 募 集 资 金 投 资 项 目 的 议 案 》 ); 2. The Proposal on the
Application for Comprehensive Credit Line from Banks in 2021 (《关于
2021 年向银行申请综合授信额度的议案》); 3. The Proposal on the
The 14th
External Guarantee in 2021 (《关于 2021 年对外担保的议案》); 4. The
Meeting of the
18 January 2021 19 January 2021 Proposal on Conducting Hedging Business in 2021 ( 关于 2021 年开展
Fifth Board of
套期保值业务的议案》); 5. The Proposal on Temporary Replenishment
Directors
of Working Capital with Partial Idle Raised Funds 《关于使用部分闲置
募集资金暂时补充流动资金的议案》); 6. The Proposal on the Change
in the Company's Directors (《关于变更公司董事的议案》); 7. The
Proposal on Convening the 1st Extraordinary General Meeting of 2021
(《关于召开 2021 年第一次临时股东大会的议案》).
The 15th
1. It deliberated and approved the Proposal on the By-election of
Meeting of the
3 February 2021 4 February 2021 Members of the Special Committees of the Board of Directors of the
Fifth Board of
Company (《关于补选公司董事会专门委员会委员的议案》).
Directors
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The 16th
Meeting of the 1. It deliberated and approved the Proposal on Adjusting the Plan for
4 March 2021 6 March 2021
Fifth Board of Share Repurchase (《关于调整回购股份方案的议案》).
Directors
The following proposals were deliberated and approved: 1. The Proposal
on the 2021 Share Option Incentive Plan (Draft) of Guangdong Haid
Group Co., Limited and Its Summary (《关于<广东海大集团股份有限
公司 2021 年股票期权激励计划(草案)>及其摘要的议案》); 2. The
Proposal on the Management Methods for the Implementation and
The 17th
Appraisal for the 2021 Share Option Incentive Plan of Guangdong Haid
Meeting of the
6 April 2021 7 April 2021 Group Co., Limited ( 关于<广东海大集团股份有限公司 2021 年股票
Fifth Board of
期权激励计划实施考核管理办法>的议案》); 3. The Proposal on
Directors
Authorisation of the Board of Directors at the General Meeting to
Handle Matters Related to the 2021 Share Option Incentive Plan (《关于
提请股东大会授权董事会办理公司 2021 年股票期权激励计划有关
事项的议案》); 4. The Proposal on Terminating the Plan for Share
Repurchase (《关于终止回购公司股份方案的议案》).
The following proposals were deliberated and approved: 1. The Proposal
on the 'Report on the Work of the Board of Directors for 2020' (《关于<
公司 2020 年度董事会工作报告>的议案》); 2. The Proposal on the
'Report on the Work of the General Manager of the Company for the
Year 2020' ( 关于<公司 2020 年度总经理工作报告>的议案》); 3. The
Proposal on the 'Annual Report of the Company for 2020' and its
Abstract (《关于<公司 2020 年年度报告>及其摘要的议案》); 4. The
Proposal on the 'Financial Final Report for 2020 of the Company' (《关
于<公司 2020 年度财务决算报告>的议案》); 5. The Proposal on the
Profit Appropriation Plan in 2020 ( 关于 2020 年度利润分配预案的议
案》); 6. The Proposal on the 'Internal Control Self-assessment Report of
The 18th the Company in 2020' (《关于<公司 2020 年度内部控制自我评价报
Meeting of the 告>的议案》); 7. The Proposal on the 'Special Report on Deposit and
17 April 2021 20 April 2021
Fifth Board of Usage of Raised Funds of the Company in 2020' (《关于<公司 2020 年
Directors 年度募集资金存放与使用情况的专项报告>的议案》); 8. The Proposal
on the 'Corporate Social Responsibility Report 2020 of the Company'
(《关于<公司 2020 年社会责任报告>的议案》); 9. The Proposal
Regarding Repurchase of Certain Restricted Shares for Cancellation
(《关于回购注销部分限制性股票的议案》); 10. The Proposal on the
Satisfaction of the Unlocking Conditions of the 2016 Restricted Share
Incentive Plan (《关于 2016 年限制性股票激励计划符合解锁条件的
议案》); 11. The Proposal on Routine Related-party Transactions in 2021
(《关于 2021 年日常关联交易的议案》); 12. The Proposal on the Cash
Management of Part of Idle Funds Raised and Self-owned Funds 《关于
使用部分闲置募集资金及自有资金进行现金管理的议案》); 13. The
Proposal on the Application for Syndicated Loans and Provision of
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Guarantees for Subsidiaries 《关于子公司申请银团贷款及为其提供担
保的议案》); 14. The Proposal on the External Guarantee (《关于对外
提供担保的议案》); 15. The Proposal on the Application for the
Adjustment of Comprehensive Credit Line from Banks 《关于向银行申
请综合授信额度调整的议案》); 16. The Proposal on the Fourth Plan of
the Employee Stock Ownership Plan for Core Team (Draft) of
Guangdong Haid Group Co., Limited and Its Summary (《关于<广东海
大集团股份有限公司核心团队员工持股计划之四期计划（草案）>
及其摘要的议案》); 17. The Proposal on the 'First Quarter Report for
2021 of the Company' (《关于<公司 2021 年第一季度报告>的议案》).
The following proposals were deliberated and approved: 1. The Proposal
on the 2021 Share Option Incentive Plan (Revised Draft) of Guangdong
Haid Group Co., Limited and Its Summary (《关于<广东海大集团股份
The 19th 有限公司 2021 年股票期权激励计划（草案修订稿）>及其摘要的议
Meeting of the 案》); 2. The Proposal on Authorisation of the Board of Directors at the
29 April 2021 30 April 2021
Fifth Board of General Meeting to Handle Matters Related to the 2021 Share Option
Directors Incentive Plan (《关于提请股东大会授权董事会办理公司 2021 年股
票期权激励计划有关事项的议案》); 3. The Proposal on Convening the
2020 Annual General Meeting of Shareholders (《关于召开 2020 年年
度股东大会的议案》).
1. It deliberated and approved the Proposal on Adjustments to the List of
Awardees and the Numbers of Equities to Be Granted to Them in the
The 20th First Grant under the 2021 Share Option Incentive Plan (《关于调整公
Meeting of the 司 2021 年股票期权激励计划首次授予激励对象名单及授予权益数
10 June 2021 15 June 2021
Fifth Board of 量的议案》); 2. It deliberated and approved the Proposal on the Grant of
Directors Share Options to the Awardees for the First Grant under the 2021 Share
Option Incentive Plan (《关于向公司 2021 年股票期权激励计划首次
授予激励对象授予股票期权的议案》).
The following proposals were deliberated and approved: 1. The Proposal
on the 'Semi-Annual Report of the Company for 2021' and its Abstract
《关于<公司 2021 年半年度报告>及其摘要的议案》); 2. The Proposal
on the 'Special Report on Deposit and Usage of Raised Funds of the
Company in the First Half of 2021' 《关于<公司 2021 年半年度募集资
金存放与使用情况的专项报告>的议案》); 3. The Proposal on the
The 21st
External Guarantee ( 关于对外提供担保的议案》); 4. The Proposal on
Meeting of the
23 July 2021 27 July 2021 the Routine Related-party Transactions ( 关于日常关联交易的议案》);
Fifth Board of
5. The Proposal on Changing the Registered Capital of the Company and
Directors
Revising the Articles of Association ( 关于变更公司注册资本及修订<
公司章程>的议案》); 6. The Proposal on Revising the 'Management
System for Information Disclosure of Debt Financing Instruments in
Inter-bank Bond Market' (《关于修订<银行间债券市场债务融资工具
信息披露管理制度>的议案》); 7. The Proposal on Convening the 2nd
Extraordinary General Meeting of 2021 (《关于召开 2021 年第二次临
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时股东大会的议案》).
The 22nd
Meeting of the 24 September 1. It deliberated and approved the Proposal on Adjusting the Foreign
23 September 2021
Fifth Board of 2021 Exchange Hedging Business (《关于调整外汇套期保值业务的议案》).
Directors
The following proposals were deliberated and approved: 1. The Proposal
on the 'Third Quarter Report for 2021 of the Company' (《关于<公司
2021 年第三季度报告>的议案》); 2. The Proposal on the Renewal of
Appointment of Grant Thornton China (LLP) as the Audit Institution for
The 23rd
2021 of the Company ( 关于续聘致同会计师事务所（特殊普通合伙）
Meeting of the
18 October 2021 20 October 2021 为公司 2021 年度审计机构的议案》); 3. The Proposal on the Securities
Fifth Board of
Investment and Derivatives Trading (《关于进行证券投资及衍生品交
Directors
易的议案》); 4. The Proposal on the Formulation of the 'External
Guarantee Management System' 《关于制定<对外担保管理制度>的议
案》); 5. The Proposal on the Routine Related-party Transactions (《关
于日常关联交易的议案》).
The following proposals were deliberated and approved: 1. The Proposal
on Temporary Replenishment of Working Capital with Partial Idle
The 24th
Raised Funds (《关于使用部分闲置募集资金暂时补充流动资金的议
Meeting of the 14 December
13 December 2021 案》); 2. The Proposal on Changing the Responsible Person of Internal
Fifth Board of 2021
Audit 《关于变更内审负责人的议案》); 3. The Proposal on Convening
Directors
the Third Extraordinary General Meeting of Shareholders of 2021 (《关
于召开 2021 年第三次临时股东大会的议案》).
2. Attendances of Directors at Board Meetings and General Meetings
Attendances of directors at board meetings and general meetings
Due Attendances at
Attendances at Not attending
attendances at Attendances at board meetings Attendances at
board meetings Absences at board meetings
Director board meetings board meetings by general
through a board meetings in person for
in Reporting on site telecommunica meetings
proxy twice in a row
Period tion
Hua Xue 11 11 0 0 0 N/A 4
Yingzhuo Xu 11 10 1 0 0 N/A 1
Li Tian 1 1 0 0 0 N/A 0
Xueqiao Qian 10 9 1 0 0 N/A 0
Qi Cheng 11 9 2 0 0 N/A 1
Jianfang Gui 11 5 6 0 0 N/A 2
Jianguo He 11 9 2 0 0 N/A 1
Yunguo Liu 11 7 4 0 0 N/A 2
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Explanation for any independent director not attending board meetings in person for twice in a row:
None of the directors failed to attend board meetings in person for twice in a row in the reporting period.
3. Objections Raised by Directors on Matters of the Company
Indicate by tick mark whether any director raised any objection on any matter of the Company.
□ Yes √ No
No such cases in the reporting period.
4. Other Information about Performance of Duties by Directors
Indicate by tick mark whether any suggestions from directors were adopted by the Company.
√ Yes □ No
Suggestions of directors adopted or not adopted by the Company:
During the Reporting Period, all the directors of the Company carried out their work diligently and
conscientiously in strict accordance with the Company Law ( 公司法》), the Stock Listing Rules of the Shenzhen
Stock Exchange (《深圳证券交易所股票上市规则》), the Articles of Association (《公司章程》), the Rules of
Procedure for General Meetings of Shareholders (《股东大会议事规则》), and the Rules of Procedure of the
Board of Directors (《董事会议事规则》). Based on the Company's reality, they put forward relevant opinions on
the Company's major governance and operation decisions and reached consensuses through full communication
and discussion. They resolutely supervised and promoted the implementation of the resolutions of the Board of
Directors to ensure scientific, timely, and efficient decision-making and safeguard the legitimate rights and
interests of the Company and all of its shareholders.
VII. Performance of Duties by Specialized Committees under the Board of Directors in the
Reporting Period
Substantial opinion and Details of
Meetings Date of the Topics of the Other
Committee Members recommendations put objections
convened meeting meeting activities
forward (if any)
Communicated Discussed the key audit
18 January
Yunguo Liu, before the 2020 matters in 2020 to be N/A N/A
The Audit 2021
Jianguo He and 2 annual audit reviewed
Committee
Li Tian 18 January Summarized the
N/A N/A N/A
2021 2020 internal audit
Communicated
about the first draft Discussed audit
Yunguo Liu, of the 2020 procedures carried out
The Audit 17 April
Jianguo He and 6 Independent in the 2020 annual audit N/A N/A
Committee 2021
Li Tian Auditors Report, and the identification of
as well as key audit matters
reviewed
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accounting policy
changes, the
financial
statements and the
internal audit
report for Q1 2021
Reviewed the
financial
13 July
statements and the N/A N/A N/A
2021
internal audit
report for Q2 2021
Agreed to re-appoint
Grant Thornton China
Appointed
13 October (Special General
Independent N/A N/A
2021 Partnership) as the
Auditor for 2021
Independent Auditor for
2021
Reviewed the
financial
13 October
statements and the N/A N/A N/A
2021
internal audit
report for Q3 2021
13 Communicated Discussed the key audit
December before the 2021 matters in 2021 to be N/A N/A
2021 annual audit reviewed
Discussed audit
Reviewed the procedures carried out
13 summary of the in the 2021 annual audit
December 2021 internal audit and the identification of N/A N/A
2021 and 2022 internal key audit matters, as
audit plan well as the key areas for
the 2022 internal audit
Nominated
Xueqiao Qian as a
13 January Non-independent
N/A N/A N/A
2021 Director of the
The Jianguo He,
Fifth Board of
Nomination Yunguo Liu 2
Directors
Committee and Qi Cheng
Nominated Jing
13
Wang as Assistant
December N/A N/A N/A
to Chairman of the
2021
Board
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Discussed the post
system and the
Discussed the awardees
remuneration
and performance
27 March system and plans,
requirements for the N/A N/A
2021 as well as the draft
2021 Share Option
of the 2021 Share
Incentive Plan
Option Incentive
Plan
Discussed the draft
of the Fourth Plan
of the Employee
Stock Ownership
Discussed
Plan for Core
performan
Team, as well as
ce
the repurchase and
appraisals
retirement of
7 April of the
shares and the N/A N/A
2021 awardees
unlocking
under the
conditions under
equity
the 2016
incentive
The Restricted Share
Yunguo Liu, plan
Remuneration Incentive Plan
Jianguo He and 5
and Appraisal (Revised) (2016 年
Yingzhuo Xu
Committee 限制性股票激励
计划（修订稿）)
Determined the list
of holders and
their shares
31 May allocated under the
N/A N/A N/A
2021 Fourth Plan of the
Employee Stock
Ownership Plan
for Core Team
Discussed the list
of awardees,
number adjustment
5 June 2021 and the first grant N/A N/A N/A
under the 2021
Share Option
Incentive Plan
31 Discussed the
December three vestings N/A N/A N/A
2021 under the Third
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Plan of the
Employee Stock
Ownership Plan,
and the first grant
under the Fourth
Plan of the
Employee Stock
Ownership Plan
for Core Team
N/A
Discussed hedges
to be carried out in
Hua Xue, 2021 and the Focused on the
The Strategy 13 January
Yingzhuo Xu 1 intention to feasibility and risks of N/A N/A
Committee 2021
and Li Tian enhance effort in derivative investments
factory-based
aquaculture
Discussed the pig Focused on the related
5 June 2021 farming capacity strategic objectives and N/A N/A
layout risks
Discussed
Hua Xue, adjustments to the
The Strategy
Yingzhuo Xu 2 upper limit for the Focused on the
Committee 18
and Li Tian amount of hedges, feasibility and risks of
September N/A N/A
as well as securities and derivative
2021
securities and investments
derivative
investments
VIII. Performance of Duties by the Supervisory Committee
Indicate by tick mark whether the Supervisory Committee found any risk to the Company during its supervision in the reporting
period.
□ Yes √ No
The Supervisory Committee raised no objections in the reporting period.
IX Employees
1. Numbers, Functions and Educational Backgrounds of Employees
Number of in-service employees of Parent Company (Haid
2,022
Group exclusive of subsidiaries) at the end of the period
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Number of in-service employees of major subsidiaries at the end
31,535
of the period
Total number of in-service employees at the end of the period 33,557
Total number of paid employees in Reporting Period 33,557
Number of retirees to whom Parent Company or its major
0
subsidiaries need to pay retirement pension
Functions
Function Employees
Production 15,698
Sales 9,092
Technical 3,049
Financial 1,856
Administrative 3,056
Procurement 806
Total 33,557
Educational backgrounds
Educational background Employees
Doctoral degree 123
Master’s degree 1,365
Bachelor’s degree 6,741
Junior college 6,625
Senior high school, technical secondary school and below 18,703
Total 33,557
2. Employee Remuneration Policy
While strictly abiding by the Labor Law of the People’s Republic of China (《中华人民共和国劳动法》), the
Labor Contract Law of the People’s Republic of China (《中华人民共和国劳动合同法》) and other national and
local related laws, regulations, department rules and regulatory documents, the Company implements the
following principles according to the characteristics of the industry and the Company’s operations: persist in the
principle of labor-based distribution combining duties, power and interests; implement the principle of linking
income levels with the Company’s performance and work goals; implement the principle of integrating individual
remuneration with the Company’s long-term interests to ensure sustained and sound growth in main business,
prevent short-term behaviors and promote the Company’s sustained operations and development; stick to the
principle of linking remuneration with performance appraisal with equal emphasis on incentive and restraint; give
comprehensive consideration to market changes and market remuneration levels. The Company has established a
reasonable post and remuneration system to provide employees with competitive salaries in the industry, link
performance with remuneration, align employees’ and the Company’s interests, enhance staff awareness for team
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work and give full play to every employee’s enthusiasm and creativity.
3. Employee Training Plans
The Company always emphasizes the development of human resources and talents with a firm belief that staff
development is an important power and resource for the Company’s continuous development. The Company has
established an extensive talent cultivation system covering new employees, key personnel, managers, assistant
general managers/vice general managers and the general manager, matching employees in different positions and
at different levels with better learning resources to help them grow faster. It possesses an excellent course
development system and a systematic internal trainer development system and carries out broad-based and precise
talent development through famous trainer courses, outdoor training, behavior learning, coach tutoring, online
broadcasting, online learning and other channels. The Company has also established a self-inspection mechanism
covering “talent development mechanism, talent development platform operation and plan implementation, talent
assessment and talent management self-inspection reports”.
Haid College, the Company’s functional department for talent development, has always closely followed the
Group's strategies and the guidelines of the Group's business. It remains committed to the values of "All for your
growth" and follows the principle of elite training and inclusive education to solve key problems for the
development of the organization. Through the combination of online and offline working methods, it has kept
exploring new modes for talent development.
In 2021, Haid College created a learning organization centering on creating value for customers. It has focused on
its efforts to cultivate a team of managerial staff with cultural strategies, business operation, and leadership. It
continued to carry out the EDP Future Pilot Program and the Min-MBA Class and initiate the IDP Core Cadre
Class, Chief Financial Officer (CFO) Class, and Managerial Staff Class for Regional Business Division. The
number of managerial staff for all professional centers has surpassed 800. Moreover, it has continuously
strengthened and standardized cultural education for recruits from universities and society.
The Company's new platform for online learning, namely, "Haiwei", has accelerated the formation of the learning
ecosystem. The learning resource base of professional institutes has preliminarily taken shape, with more than
8,000 online course resources, approximately 30,000 online learners, and total learning hours of approximately
620,000, which makes the average learning hours for online learners exceed 22 throughout the year.
The atmosphere of talent development in the Company has come into vogue. The Company has established the
resource system of talent development, implemented the learning roadmap of professional centers, set up
professional institutes, launched the BP cultivation program and cultivated 100 staff that can independently handle
the talent cultivation work in regional business divisions/divisions, branches, and subsidiaries. It held the Haid
Talent Development Annual Conference at Jinggangshan. The training system for professional lines and divisions
has gradually taken shape, which has become the performance highlight of HR and business managers. The
development of cadres has been comprehensively launched and the resource platform has gradually shaped,
forging a profound learning atmosphere in the organization.
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4. Labor Outsourcing
□ Applicable √ Not applicable
X. Profit Distribution and Capitalization of Capital Reserve
Formulation, implementation or adjustment of profit distribution policy, especially the cash dividend during the
reporting period
√ Applicable □ Not applicable
According to the Proposal on 2020 Equity Distribution Plan (《关于2020年年度权益分派实施的议案》) as
considered and approved at the 2020 Annual General Meeting convened on 20 May 2021, the distribution plan is
as follows: The Company proposed to distribute RMB 3.20 (tax inclusive) per 10 shares based on "the total
number of shares exclusive of the repurchased shares (the number of shares eligible for profit distribution) on the
date of record when the plan is implemented in the future". The proposed total amount of dividend shall not
exceed the profit of the company (parent company) available for distribution to shareholders as at 31 December
2020. The retained earnings will be carried forward to the following year. On 9 July 2021, the equity distribution
was completed.
The Company’s profit distribution policy, dividend distribution policy, dividend standards, and dividend ratios are
well-defined and clear. Independent directors have duly performed their duties and functions. Minority
shareholders have the opportunity to fully express their views and concern, which is in line with the Articles of
Association and the requirements of the consideration procedures. The conditions and procedures for the
adjustment or change of the profit distribution policy are compliant and transparent, and the legal rights and
interests of small and medium investors are fully protected.
Particulars of Cash Dividend Policy
Whether the policy is in compliance with the requirements of the
Articles of Association or the resolutions passed at the general Yes
meeting;
Whether the basis and ratio of the distribution of dividends are
Yes
well-defined and clear;
Whether the relevant decision making procedure and system are
Yes
sound;
Whether the independent directors have duly performed their
Yes
duties and functions;
Whether there are enough opportunities for minority
shareholders to express their views and concerns, and whether Yes
their legal interests are sufficiently protected, etc;
Whether the conditions and procedures are legal and transparent
Not applicable
in respect of cash dividend policy with adjustments and changes;
The Company made a profit and had positive retained profit available for ordinary shareholders of parent company during the
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reporting period without cash dividend being proposed
□ Applicable √ Not applicable
Proposals on profit distribution and capitalization of capital reserve during the reporting period:
√ Applicable □ Not applicable
Number of bonus share per 10 shares (share(s)) 0
Dividend distribution per 10 shares (RMB) (tax
1.50
inclusive)
Total number of shares exclusive of the repurchased shares on the registration
Share base of the distribution proposal (shares)
date when the plan is implemented in the future
Amount of cash dividend (RMB) (tax inclusive) 247,633,342.95
Amount of cash dividend distribution through other
707,442,393.60
means (such as share repurchase) (RMB)
Total amount of cash dividends (including other
955,075,736.55
means) (RMB)
Distributable profits (RMB ) 2,991,262,794.10
Total amount of cash dividends (including other
100%
means) as % of total profit distribution
Cash dividend policy
For profit distribution of companies which are in the growth period with significant capital expenditure arrangement, the percentage
for cash dividend shall represent at least 20% of the profits distribution for the current year
Particulars of profit distribution and capitalization of capital reserves
According to the audit report issued by Grant Thornton China (Special General Partnership), the Company (parent company)
achieved a net profit of RMB 1,073,335,056.61 and made provision for statutory surplus reserves of RMB 107,333,505.66 (10% of
the net profit), without allocation to discretionary revenue reserve in 2021. As at 31 December 2021, the profit available for
distribution to shareholders amounted to RMB 2,991,262,794.10.
Based on the operating results of the Company in 2021, as well as the Company's business scale and future growth, the legitimate
demands of investors and continuous return to shareholders, the Company formulated the 2021 annual profit distribution plan as
follows: The Company proposed to distribute RMB 1.50 (tax inclusive) per 10 shares based on "the total number of shares
exclusive of the repurchased shares (the number of shares eligible for profit distribution) on the date of record when the plan is
implemented in the future". The proposed total amount of dividend shall not exceed the profit of the Company (parent company)
available for distribution to shareholders as at 31 December 2021. The retained earnings will be carried forward to the following
year.
Where any change occurs to the Company’s total share capital during the period from the disclosure of the distribution plan to its
implementation due to reasons such as conversion of convertible corporate bonds to shares, share repurchases, exercise of equity
incentives, and new offering of shares for re-financing, the dividend per 10 shares shall remain the same while the total amount of
dividend shall be adjusted accordingly.
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In order to look after the shareholders’ immediate and long-term interests in a better way on the premise of guaranteeing the
Company's normal operations and long-term development, the Company put forward the above-mentioned profit distribution plan.
The preparation of the above-mentioned profit distribution plan is in line with the Company Law (《公司法》) and the Articles of
Association (《公司章程》), and the Dividend Distribution Plan of the Company for the Next Three Years (2019-2021) (《未来三
年（2019-2021年）分红回报规划》). The distribution plan is legal, compliant and reasonable and in line with the Company's
distribution policy.
The independent directors of the Company expressed their independent opinions that the Company's 2021 profit distribution plan
gives full consideration to the returns to investors and is in line with the actual situation of the company without any prejudice to
the interests of shareholders, in particular minority shareholders. Therefore, they agreed to the 2021 profit distribution plan.
This proposal will be submitted to a general meeting for final approval.
XI. Implementation of the Equity Incentive Plan, Employee Stock Ownership Plan or Other
Employee Incentive Measures of the Company
√ Applicable □ Not applicable
1. Equity Incentives
(1) 2016 Restricted Share Incentive Plan
① Decision-making procedures and approval
On 15 February 2017, the Company convened the First Extraordinary General Meeting of 2017 to consider and
approve the 2016 Restricted Share Incentive Plan of Guangdong Haid Group Co., Limited (Revised) (广东海大集
团股份有限公司2016年限制性股票激励计划(修订稿)) and its summary (hereinafter referred to as "2016
Restricted Share Incentive Plan") and the Proposal Regarding Authorisation of the Board of Directors at the
General Meeting to Handle Matters Related to the 2016 Restricted Share Incentive Plan (《关于提请股东大会授
权董事会办理公司2016年限制性股票激励计划相关事宜的议案》) and related resolutions, pursuant to which
the Company was approved to issue no more than 46 million restricted shares to awardees by way of private
placement of which 41,601,300 shares would be first granted to 1,484 awardees at the grant price of RMB 7.48
per share, and 4,398,700 restricted shares would be reserved.
On 13 March 2017, the Company convened the Sixth Meeting of the Fourth Board of Directors to consider and
approve the Proposal on Adjustment to the Number of Interests under the 2016 Restricted Share Incentive Plan of
the Company 《关于调整公司2016年限制性股票激励计划权益数量的议案》), pursuant to which the number of
awardees of the first grant was changed from 1,484 into 1,373 and the restricted shares not granted yet were
adjusted from 41,601,300 shares to 40,283,200 shares. The Proposal on Grant of Restricted Shares to Incentive
Targets under the 2016 Restricted Share Incentive Plan of the Company 《关于向公司2016年限制性股票激励计
划激励对象授予限制性股票的议案》) was also considered and approved at the aforesaid meeting, pursuant to
which the Company was approved to grant 40,283,200 shares to 1,373 awardees for the first time with 13 March
2017 as the first grant date and the grant price of RMB 7.48 per share. On 20 March 2017, the Company
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completed the registration of grant of all the above-mentioned restricted shares.
On 8 December 2017, the Company convened the Eleventh Meeting of the Fourth Board of Directors to consider
and approve the Proposal Regarding the Grant of Reserved Restricted Shares to Awardees under the 2016
Restricted Share Incentive Plan of the Company (《关于向公司2016年限制性股票激励计划激励对象授予预留
限制性股票的议案》), pursuant to which the Company was approved to grant 4,398,700 reserved restricted shares
to 399 awardees with the grant price of RMB 10.44 per share and 8 December 2017 as the grant date. Upon audit
and confirmation by the Shenzhen Stock Exchange and Shenzhen Branch of China Securities Depository and
Clearing Corporation Limited, the Company completed the registration for grant of reserved restricted shares to
360 awardees. 4,308,000 reserved restricted shares were granted and the listing date of the restricted shares would
be 24 January 2018.
② Implementation during the reporting period
A. The fourth unlocking period of the first grant and the third unlocking period of the reserve grant of the 2016
Restricted Share Incentive Plan
On 17 April 2021, the Company convened the 18th Meeting of the Fifth Board of Directors to consider and
approve the Proposal on the Satisfaction of the Unlocking Conditions of the 2016 Restricted Share Incentive Plan
(《关于2016年限制性股票激励计划符合解锁条件的议案》). The Board was of the view that the unlocking
conditions had been satisfied for the fourth unlocking period of the first grant and for the third unlocking period of
the reserve grant under the 2016 Restricted Share Incentive Plan (Revised) (《2016年限制性股票激励计划（修
订稿）》) and thus approved the awardees to unlock the relevant shares as prescribed. In the fourth unlocking
period of the first grant, the number of restricted shares available for listing and trading was 10,690,680; and in
the third unlocking period of the reserve grant, the number of restricted shares available for listing and trading was
1,448,720.
B. Repurchase for cancellation for the 2016 Restricted Share Incentive Plan
On 17 April 2021, the Company convened the 18th Meeting of the Fifth Board of Directors to consider and
approve the Proposal Regarding Repurchase of Certain Restricted Shares for Cancellation (《关于回购注销部分
限制性股票的议案》). Due to the resignation, failure to pass the 2020 individual performance appraisal, etc. of 7
awardees in the first grant of restricted shares and 2 awardees in the reserve grant, the Company was agreed to
repurchase and cancel 34,290 restricted shares in the first grant and 15,400 restricted shares in the reserve grant
that had been granted to the aforesaid awardees but had not yet reached the unlocking conditions. On 17 June
2021, as confirmed by the Shenzhen branch of China Securities Depository and Clearing Corporation Limited, the
Company completed the repurchase for cancellation of the above-mentioned restricted shares.
③ Awardees' exercise of interests during the reporting period and interests accumulatively granted but not yet
exercised as at the end of the reporting period
In summary, during the reporting period, due to implementation of the 2016 Restricted Share Incentive Plan
(Revised) (《2016年限制性股票激励计划（修订稿）》), the Company repurchased a total of 49,690 restricted
shares for cancellation. As at the end of the reporting period, the restricted shares granted had all been unlocked.
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(2) 2021 Share Option Incentive Plan
① Decision-making procedures and approval
On 6 April 2021, the Company convened the 17th Meeting of the Fifth Board of Directors to consider and approve
the Proposal on the 2021 Share Option Incentive Plan (Draft) of Guangdong Haid Group Co., Limited and Its
Summary (《关于<广东海大集团股份有限公司2021年股票期权激励计划(草案)>及其摘要的议案》), the
Proposal on the Management Methods for the Implementation and Appraisal for the 2021 Share Option Incentive
Plan of Guangdong Haid Group Co., Limited 《关于<广东海大集团股份有限公司2021年股票期权激励计划实
施考核管理办法>的议案》), and the Proposal on Authorisation of the Board of Directors at the General Meeting
to Handle Matters Related to the 2021 Share Option Incentive Plan (《关于提请股东大会授权董事会办理公司
2021年股票期权激励计划有关事项的议案》). On the same day, the Company convened the 13th Meeting of the
Fifth Supervisory Committee to consider and approve the Proposal on the 2021 Share Option Incentive Plan
(Draft) and Its Summary 《关于<公司2021年股票期权激励计划(草案)>及其摘要的议案》), the Proposal on the
Management Methods for the Implementation and Appraisal for the 2021 Share Option Incentive Plan of
Guangdong Haid Group Co., Limited ( 关于<广东海大集团股份有限公司2021年股票期权激励计划实施考核
管理办法>的议案》), and the Proposal on the Examination of the List of Awardees for the 2021 Share Option
Incentive Plan (Draft) (《关于核查公司2021年股票期权激励计划（草案）激励对象名单的议案》).
On 29 April 2021, the Company convened the 19th Meeting of the Fifth Board of Directors to consider and
approve the Proposal on the 2021 Share Option Incentive Plan (Revised Draft) of Guangdong Haid Group Co.,
Limited and Its Summary (《关于<广东海大集团股份有限公司2021年股票期权激励计划（草案修订稿）>及
其摘要的议案》), and the Proposal on Authorisation of the Board of Directors at the General Meeting to Handle
Matters Related to the 2021 Share Option Incentive Plan 《关于提请股东大会授权董事会办理公司2021年股票
期权激励计划有关事项的议案》). On the same day, the Company convened the 15th Meeting of the Fifth
Supervisory Committee to consider and approve the Proposal on the 2021 Share Option Incentive Plan (Revised
Draft) of Guangdong Haid Group Co., Limited and Its Summary (《关于<广东海大集团股份有限公司2021年股
票期权激励计划（草案修订稿）>及其摘要的议案》), and the Proposal on the Examination of the List of
Awardees for the 2021 Share Option Incentive Plan (Revised Draft) (《关于核查公司2021年股票期权激励计划
（草案修订稿）激励对象名单的议案》).
On 7 April 2021 and 30 April 2021, the Company disclosed the List of Awardees for the First Grant under the
2021 Share Option Incentive Plan (Draft) (《2021年股票期权激励计划（草案）首次授予激励对象名单》) and
the List of Awardees for the First Grant under the 2021 Share Option Incentive Plan (Revised Draft) (《2021年股
票期权激励计划（草案修订稿）首次授予激励对象名单》) respectively on the website designated by China
Securities Regulatory Commission (CSRC) for information disclosure. The Company publicized internally the
names and positions of the awardees on the Company website for the period from 30 April 2021 to 13 May 2021,
during which the Supervisory Committee received no objections regarding the publicized information. On 14 May
2021, the Company disclosed the Statement of the Supervisory Committee on the Examination and Publication
Results of the List of Awardees for the 2021 Share Option Incentive Plan (《监事会关于2021年股票期权激励计
划激励名单核查及公示情况的说明》). The Supervisory Committee was of the opinion that the awardees for the
first grant under the incentive plan were all eligible, legitimate and valid according to the applicable laws,
regulations and regulatory documents, as well as the awardee scope and conditions of the incentive plan.
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On 20 May 2021, the Company convened the 2020 Annual General Meeting to consider and approve the 2021
Share Option Incentive Plan (Revised) (《2021年股票期权激励计划（修订稿）》), the Management Methods for
the Implementation and Appraisal for the 2021 Share Option Incentive Plan (《2021年股票期权激励计划实施考
核管理办法》 (hereinafter referred to as the “Appraisal and Management Methods” 《公司考核管理办法》)), and
the Proposal on Authorisation of the Board of Directors at the General Meeting to Handle Matters Related to the
2021 Share Option Incentive Plan ( 关于提请股东大会授权董事会办理公司2021年股票期权激励计划有关事
项的议案》).
On 10 June 2021, the Company convened the 20th Meeting of the Fifth Board of Directors and the 16th Meeting of
the Fifth Supervisory Committee to consider and approve the Proposal on Adjustments to the List of Awardees
and the Numbers of Equities to Be Granted to Them in the First Grant under the 2021 Share Option Incentive Plan
《关于调整公司2021年股票期权激励计划首次授予激励对象名单及授予权益数量的议案》), and the Proposal
on the Grant of Share Options to the Awardees for the First Grant under the 2021 Share Option Incentive Plan
(《关于向公司2021年股票期权激励计划首次授予激励对象授予股票期权的议案》). As such, the list of
awardees for the first grant under the incentive plan and the numbers of equities to be granted to them were
adjusted. Meanwhile, it was decided that a total of 47,953,200 share options were to be granted to 4,003 eligible
awardees on 10 June 2021 in the first grant under the incentive plan. The registration formalities with respect to
the first grant under the 2021 Share Option Incentive Plan were completed on 28 June 2021.
Upon the completion of the 2020 annual equity distribution on 8 July 2021, the exercise price for the first grant
and the reserve grant under the 2021 Share Option Incentive Plan would be adjusted from RMB 59.68/share to
RMB 59.36/share, and the said adjustment is subject to final approval by the Board of Directors.
(3) Explanations for other circumstances due to the implementation of the 2016 Restricted Share Incentive
Plan (2016年限制性股票激励计划) during the reporting period
① Explanation on changes in share capital caused by implementation of the 2016 Restricted Share Incentive Plan
(Revised) (2016年限制性股票激励计划（修订稿）).
During the reporting period, the total shares of the Company decreased by 49,690 shares in total due to repurchase
of restricted shares for cancellation.
② Accounting treatment method for option incentive and effects of equity incentive cost on the results of the
Company
According to relevant provisions under the Accounting Standards for Business Enterprises No. 11 - Share-based
Payment (企业会计准则第11号–股份支付), the Company will, on each balance sheet date in the waiting period,
amend the number of restricted shares / share options that are expected to be unlockable / exercisable according to
the latest available information of changes in the number of incentive targets allowed to unlock restricted
shares/exercise options, completion of performance indicators and other follow-up information and include the
services obtained in the current period in the relevant costs or expenses and capital reserve at fair value of the
restricted shares/exercise options on the grant date.
The implementation of the above equity incentive plan will not have a significant impact on the Company's
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financial position and operating results during the reporting period and in the future.
Equity incentives for directors and senior management:
√ Applicable □ Not applicable
Unit: share
Share Exercise Restrict
options price for Market ed Restrict
Exercisa Share Restrict Grant
held at Share Exercise exercise price at shares ed
ble options Shares ed price of
the options d share d share the end held at shares
share held at unlocke shares the
Office beginni granted options options of the the held at
Name options the end d in the granted restricte
title ng of in the in the in the reportin beginni the end
for the of the reportin in the d shares
the reportin reportin reportin g period ng of of the
reportin reportin g period reportin (RMB/s
reportin g period g period g period (RMB / the reportin
g period g period g period hare)
g (RMB / share) reportin g period
period share) g period
Director
and
Qi
Executiv 100,000 100,000 73.3 40,000 40,000 10.44
Cheng
e Vice
President
Director
Xueqiao and
90,000 90,000 73.3 33,450 33,450 7.48
Qian Chief
Engineer
Guoxian Vice
122,840 122,840 10.44
g Liu President
Guoxian Vice
80,000 80,000 73.3 72,600 72,600 7.48
g Liu President
Xiewu Vice
80,000 80,000 73.3 33,390 33,390 7.48
Jiang President
Guoche Vice
126,000 126,000 10.44
ng Mi President
Guoche Vice
80,000 80,000 73.3 66,630 66,630 7.48
ng Mi President
Zhongz Vice
112,840 112,840 10.44
hu Chen President
Zhongz Vice
100,000 100,000 73.3 68,850 68,850 7.48
hu Chen President
Vice
Shaolin
President 90,000 90,000 73.3 33,660 33,660 7.48
Yang
and CFO
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Vice
President
Zhijian and
90,000 90,000 73.3 41,280 41,280 7.48
Huang Board
Secretar
y
Total -- 0 710,000 0 0 -- 710,000 -- 751,540 751,540 0 -- 0
1. The grant prices of the restricted shares in the table are ex-right and ex-dividend prices.
Notes (if any) 2. A total of 710,000 share options were granted to the eight directors and senior management in the table
during the reporting period, all of which were still in lockup as of the end of the reporting period.
Appraisal mechanism and incentives for senior management:
The Company has put in place a senior management selection, appraisal, incentive and restrictive system. All
appointed by and being responsible to the Board of Directors, senior management shoulders the operating
indicators set by the Board of Directors. The Remuneration and Appraisal Committee under the Board is
responsible for a year-end appraisal of senior management’s service ability, performance of duties and fulfillment
of objectives, among others. And then the committee formulates a remuneration plan for the Board’s review.
During the reporting period, the Company duly restricted its senior management as per the applicable laws and
regulations by strengthening the connection between performance appraisal and remuneration and incentives,
aligning remuneration with appraisal results, and achieving differentiation in remuneration and incentives.
2. Employee stock ownership plans
√ Applicable □ Not applicable
Outstanding employee stock ownership plans during the reporting period:
As a percentage
Number of of the
Scope of employees Total shares held Change Funding source
employees Company’s total
share capital
The awardees for the Second
The special fund established by the
Plan of the Employee Stock
Company for the employee stock
Ownership Plan for Core
ownership plan, legitimate employee
Team are key personnel that No more than
4,386,186.00 N/A 0.26% remunerations, and funds pooled by
play a significant role in the 30
other means allowed by the
Company’s operating
applicable laws and administrative
performance and mid- and
regulations
long-term development.
The awardees for the Third The special fund established by the
No more than
Plan of the Employee Stock 888,500.00 N/A 0.05% Company for the employee stock
30
Ownership Plan for Core ownership plan
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Team are key personnel that
play a significant role in the
Company’s operating
performance and mid- and
long-term development.
The awardees for the Fourth
Plan of the Employee Stock
Ownership Plan for Core
The special fund established by the
Team are key personnel that No more than
1,194,582.00 N/A 0.07% Company for the employee stock
play a significant role in the 30
ownership plan
Company’s operating
performance and mid- and
long-term development.
Shares held by directors, supervisors and senior management under employee stock ownership plans during the reporting period:
Shares held at the As a percentage of the
Shares held at the end of
Name Office title beginning of the Company’s total share
the reporting period
reporting period capital
Director and Executive Vice
Qi Cheng
President (Vice General Manager)
Director, Vice President (Vice
Xueqiao Qian General Manager) and Chief
Engineer
Vice President (Vice General
Guoxiang Liu
Manager)
Vice President (Vice General
Shaolin Yang
Manager) and CFO 4,094,921 1,428,500 0.09%
Vice President (Vice General
Xiewu Jiang
Manager)
Vice President (Vice General
Guocheng Mi
Manager)
Vice President (Vice General
Zhongzhu Chen
Manager)
Vice President (Vice General
Zhijian Huang
Manager) and Board Secretary
Note: The shares held in the table above are inclusive of shares that had yet been vested.
Change of asset management organizations during the reporting period:
□ Applicable √ Not applicable
Equity changes incurred by disposal of shares by holders, etc. during the reporting period:
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□ Applicable √ Not applicable
Exercise of shareholder rights during the reporting period:
N/A.
Other information about employee stock ownership plans during the reporting period:
□ Applicable √ Not applicable
Changes in members of the management committees for employee stock ownership plans:
□ Applicable √ Not applicable
Financial impact of employee stock ownership plans on the Company during the reporting period and the relevant
accounting treatments:
√ Applicable □ Not applicable
1. Accounting treatments for share repurchases for the Fourth Plan of the Employee Stock Ownership Plan for
Core Team
According to the application guide for the Accounting Standards for Business Enterprises No. 11 - Share-based
Payment (《企业会计准则第11号—股份支付》), share repurchases carried out by an enterprise as rewards for its
employees are equity-settled share-based payments, for which the accounting treatments are as follows:
(1) Share repurchases
All the costs in share repurchases shall be recorded as inventory stock and the relevant registration for reference
shall be carried out.
(2) Recognition of costs and expenses
The amount by which the price for receiving repurchased shares for employee stock ownership plans is lower than
the fair value on the grant date, as expenses on share-based payments, is recorded in costs and expenses and
amortized over the vesting period, and at the same time recognized in capital reserve (other capital reserve).
(3) Exercise under employee stock ownership plans
Where any exercise occurs upon the expiry of a lockup period under employee stock ownership plans, the
Company writes off treasury stock costs and the cumulative amount in capital reserve (other capital reserve)
during the vesting period, and the difference is recognized as an adjustment to capital reserve (surplus reserve).
2. Financial impact on the Company during the reporting period
The Company completed the non-transaction transfer formalities in June 2021 with respect to all the 1,194,582
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shares under the Fourth Plan of the Employee Stock Ownership Plan for Core Team. The relevant total expenses
recognized during the reporting period were RMB 54.6483 million, which was recognized in general and
administrative expenses and capital reserve.
Termination of employee stock ownership plans during the reporting period:
□ Applicable √ Not applicable
Other information:
1. On 14 May 2018, the Proposal Regarding the Second Plan of the Employee Stock Ownership Plan for Core
Team of Guangdong Haid Group Co., Limited and Its Summary (《关于<广东海大集团股份有限公司核心团队
员工持股计划之二期计划>及其摘要的议案》) (hereinafter referred to as the “Second Plan of the Stock
Ownership Plan”) was approved at the 2017 Annual General Meeting. As such, the Company was approved to
implement the Second Plan of the Employee Stock Ownership Plan. A special fund of RMB38,511,460.57 would
be established and the related employees would raise no more than RMB50,000,000. As of 11 July 2018, the "GF
Yuanchi Haid Core No. 2 Targeted Asset Management Program” (广发原驰海大核心2号定向资产管理计划)
purchased 4,386,186 shares of the Company’s stock from the secondary market for the Second Plan of the Stock
Ownership Plan, of which 1,908,436 shares were purchased with the special fund. On 28 December 2018, the first
vesting of the said shares purchased with the special fund was completed, with 40% of these shares, i.e. 763,374
shares, being vested. On 31 December 2019, the second vesting of the said shares purchased with the special fund
was completed, with 30% of these shares, i.e. 572,531 shares, being vested. On 31 December 2020, the third
vesting of the said shares purchased with the special fund was completed, with 30% of these shares, i.e. 572,531
shares, being vested. The 2,477,750 shares purchased with the employees’ self-raised capital were vested
according to their payment percentage, including a total of 1,585,760 shares to directors and senior management
(Ms. Li Tian, Mr. Qi Cheng, Mr. Xueqiao Qian, Mr. Shaolin Yang, Mr. Zhijian Huang, Mr. Guoxiang Liu, Mr.
Xiewu Jiang, Mr. Guocheng Mi, and Mr. Zhongzhu Chen) and a total of 891,990 shares to other core employees.
As of 31 December 2020, the total 4,386,186 shares under the Second Plan of the Stock Ownership Plan had been
vested, with the vesting particulars in line with the Second Plan of the Stock Ownership Plan.
As of the end of the reporting period, all the 4,386,186 shares held under the Second Plan of the Stock Ownership
Plan had been sold by way of centralized bidding, accounting for 0.26% of the then total share capital.
2. On 6 May 2019, the Proposal Regarding the Third Plan of the Employee Stock Ownership Plan for Core Team
of Guangdong Haid Group Co., Limited and Its Summary (《广东海大集团股份有限公司核心团队员工持股计
划之三期计划》及其摘要的议案》 (hereinafter referred to as the “Third Plan of the Stock Ownership Plan”) was
approved at the 2018 Annual General Meeting. As such, the Company was approved to implement the Third Plan
of the Employee Stock Ownership Plan. A special fund of RMB30,180,630.23 would be established as the capital
source. As of 4 November 2019, the "GF Yuanchi Haid Core Employee Stock Ownership Plan No. 3 Single
Asset Management Program” (广发原驰海大核心员工持股计划3号单一资产管理计划) purchased 888,500
shares of the Company’s stock from the secondary market for the Third Plan of the Stock Ownership Plan. On 31
December 2019, the vesting of the first vesting period of the above-mentioned shares was completed, with 40% of
these shares, i.e. 355,400 shares, being vested. On 31 December 2020, the vesting of the second vesting period of
the above-mentioned shares was completed, with 30% of these shares, i.e. 266,550 shares, being vested. On 31
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December 2021, the vesting of the third vesting period of the above-mentioned shares was completed, with 30%
of these shares, i.e. 266,550 shares, being vested. As of 31 December 2021, the total 888,500 shares under the
Third Plan of the Stock Ownership Plan had been vested, with the vesting particulars in line with the Third Plan of
the Stock Ownership Plan. On 31 December 2021, the lockup period for the Third Plan of the Stock Ownership
Plan expired and the unlocking conditions had been satisfied. Therefore, starting from 31 December 2021, all the
888,500 shares under the Third Plan of the Stock Ownership Plan have been allowed for trading.
As of the end of the reporting period, 888,500 shares were held under the Third Plan of the Stock Ownership Plan,
accounting for 0.05% of the then total share capital. During the reporting period, no change occurred to the
holders of the Third Plan of the Stock Ownership Plan and their holdings.
3. On 20 May 2021, the Proposal Regarding the Fourth Plan of the Employee Stock Ownership Plan for Core
Team (Draft) of Guangdong Haid Group Co., Limited and Its Summary ( 广东海大集团股份有限公司核心团队
员工持股计划之四期计划（草案）》) (hereinafter referred to as the “Fourth Plan of the Stock Ownership Plan”)
was approved at the 2020 Annual General Meeting. As such, the Company was approved to implement the Fourth
Plan of the Employee Stock Ownership Plan. A special fund of RMB 82,438,128.98 would be established as the
capital source. As of 18 June 2021, the Company had transfer 1,194,582 shares of the treasury stock in the
securities account of Haid Group for repurchased shares to the Fourth Plan of the Stock Ownership Plan through a
non-transaction transfer. On 31 December 2021, the vesting of the first vesting period of the above-mentioned
shares was completed, with 40% of these shares, i.e. 477,832 shares, being vested.
As of the end of the reporting period, 1,194,582 shares were held under the Fourth Plan of the Stock Ownership
Plan, accounting for 0.07% of the then total share capital. During the reporting period, no change occurred to the
holders of the Fourth Plan of the Stock Ownership Plan and their holdings.
3. Other Employee Incentive Measures
□ Applicable √ Not applicable
XII. Establishment and Implementation of the Internal Control System during the Reporting
Period
1. Establishment and Implementation of the Internal Control System
(I) Control environment
The Company has set up a favorable governance structure and organization structure and relevant control systems.
It attaches great importance to the favorable corporate culture and has formed a relatively complete internal
control system in terms of business management, capital management, accounting information system
management, human resources and compensation management, information communication, and disclosure
management.
(1) Governance structure
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According to the requirements of relevant laws, regulations, and the Articles of Association (《公司章程》), the
Company has set up the General Meeting of Shareholders, the Board of Directors, the Supervisory Committee
(hereinafter referred to as the "Three Meetings") and the Senior Management. Furthermore, it has specified their
rights and obligations in the Articles of Association and formulated the rules of procedure to ensure the explicit
division of labor and the fulfillment of their duties and responsibilities.
The General Meeting of Shareholders is the high authority of the Company, which enjoys the legal rights
stipulated by laws and regulations and the Articles of Association. It shall, strictly by the law, exercise its right to
vote for major events such as the management principle of the Company, fund-raising, investment, and profit
appropriation.
During the Reporting Period, the Company can hold "Three Meetings" on schedule according to the provisions of
relevant laws, regulations, and the Articles of Association. The documents for "Three Meetings" are complete and
filed. The decision-making process for major investment and financing has fulfilled the rules of procedure of the
Articles of Association and relevant rules. All the directors have attended the meetings with a diligent and
responsible attitude and practically fulfilled their obligations. The Supervisory Committee has played its role by
adopting certain ways of supervision. The Strategy Committee, the Audit Committee, the Remuneration and
Appraisal Committee and the Nomination Committee of the Board of Directors have driven the Board of
Directors to make scientific and efficient decisions. Moreover, the resolutions of "Three Meetings" are well
implemented. The General Manager regularly organized and held manager meetings, conducted production and
business operations, instructed, coordinated, managed, and supervised the Company's functional departments and
holding subsidiaries, ensuring the normal business operation of the Company.
(2) Organizational structure
Based on the demand of principal business and management, the Company set up the President's Room,
Procurement Center, Haid College, Haid Research Institute, Marketing Center, Human Resource Center, Financial
Center, Operation and Development Center, Process and Information Management Center, Securities Department,
the President's Office, Party Working Committee Office, Project Management Office, Audit Center and other
functional departments. Each functional department has its specific division of labor. They fulfill their duties and
responsibilities while they mutually counterbalance and supervise. Based on the Company's business progress, the
Company continues to fully research and improve the core and key work tasks of each functional department so as
to improve the efficiency of the organization and refine the management and control mechanism.
(3) Development strategy
The Strategy Committee of the Board of Directors is responsible for the formulation of the Company's
development strategies to instruct the Company's long-term and robust development. The Strategy Committee
held meetings regularly or irregularly to deliberate major strategic plans for the Company's development and
adjust the Company's development objectives properly. The Company's business management team will formulate
corresponding objectives according to the strategic plans determined by the Strategy Committee and the divisions,
branches, and subsidiaries will formulate their development objectives accordingly.
(4) Corporate culture
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The Company attaches great importance to the development of corporate culture. It fosters positive values and a
sense of social responsibility, advocates honesty, trustworthiness, dedication, and innovation, highlights customer
value, and focuses on employee growth and the spirit of teamwork. It adopts many approaches, such as regular
internal meetings, internal newspapers and publications, the Company's website, forum, the campaign of
rationalization proposal, and employee training, to penetrate the Company's values into the Company. In addition,
it has proactively arranged various themed activities to enhance employees' cohesion and team spirit, thus
promoting the development of corporate culture. Corporate culture has gradually become the value guidance for
the Company's operating and management activities.
(5) Procedures and systems
The Company formulates tailored systematic systems and procedures for the professional work of specialized
departments, implements them throughout the Company, and improves the Company's duplicating and controlling
capability of management. For instance, the Company has developed and continued to improve policies, such as
talent recruitment, talent development, talent promotion, appraisal, remuneration, and incentive. In terms of
internal control, it has set up and refined the capital plan management system, comprehensive budget management
system, accounts receivable management system, fixed asset management system, expense management system,
contract management system, future foreign exchange settlement management system, and internal audit system,
etc. The management systems are annually reviewed, discussed, and upgraded by the Company so as to make
them more adaptable to the Company's business and play the role in guiding and restraining the Company's
business.
(6) Internal supervision
Under the leadership of the Board of Directors and the Audit Committee, the Company sets up the Audit Center,
which is independent of other departments of the Company. The Audit Center conducts internal audits of the
internal control and financial situation of the Company and its holding subsidiaries through a combination of
continuous and special supervision and inspections. The internal audits can inspect and supervise the
establishment and implementation of the Company's internal control systems, the authenticity and integrity of
financial information, and the efficiency and effectiveness of operating activities.
(7) Information communication
The Company has set up an information and communication system to clarify the procedures for collecting,
processing, and transmitting relevant information of internal control so as to ensure the timely communication of
such information, thus promoting the effective operation of internal control.
A. The unblocked information collection channels. Internal information can be accessed by the Company through
many channels, including financial and accounting data, operation management data, investigation reports, special
information, internal publications, EPS, ERP/SAP, and financial sharing system. In addition, the Company can
access external information through trade associations and organizations, social intermediary organizations,
customers and suppliers, market surveys, letters and visits, network media, and relevant regulatory authorities.
B. The timely information transmission procedures. The Company can communicate and feedback relevant
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information on internal control among internal management hierarchies, responsible departments, business links,
internal and external investors, creditors, customers, suppliers, intermediary agencies, and regulatory authorities
promptly. In case of any problems identified from the course of information communication, the Company can
timely report and solve such problems. Important information can be reported timely to the Board of Directors,
the Supervisory Committee, and the Management.
C. The safe operation of information systems. The Company has set up control systems related to the development
and maintenance, access and change, data input and output, document storage, and cyber security of information
systems so as to ensure the safe and stable operation of such systems. The Company also monitors and reviews the
logistics and capital flow of branches and subsidiaries through the information system. All data of branches and
subsidiaries are dually duplicated. The Process and Information Management Center will cross-examine the data
of the Group, branches, and subsidiaries regularly and irregularly. In addition, the Financial Center has assigned
dedicated personnel to conduct random inspections for data of information systems of branches and subsidiaries in
real-time.
(8) Human resources management
In accordance with the provisions of the Labor Law (《劳动法》) and relevant laws and regulations, the Company
has established complete management systems in terms of the recruitment, allocation, compensation, training,
performance management, and promotion of human resources. The Company adheres to the people-oriented
principle and signs labor contracts with all employees. The employees' sense of belonging and sense of mission
has been enhanced through the implementation of the performance appraisal system, motivating their enthusiasm
for work. The stable growth of the Company's operating results and employees' income has been achieved, laying
a foundation for the Company's sustainable development.
(II) Risk assessment
(1) Risk identification and analysis
The Company has a strong sense of risk prevention. It attaches great importance to the identification of risks in
advance. It solicits extensive opinions of relevant parties on all major business decisions. Furthermore, the
Company conducts comprehensive assessments of operating, financial, industrial, and market risks through legal
assessment and contract review, and joint signature. It also develops corresponding risk management measures,
thus forming a relatively refined risk management mechanism.
Meanwhile, the Company continues to collect information related to risk change based on the market situation and
business expansion for risk identification and analysis so as to adjust risk response strategies in time.
(2) Risk control
The Company has developed relatively complete provisions of risk control management to carry out the pre-event
assessment, in-event supervision, and post-event appraisal for the determination of the Company's financial
structure, the arrangement of financing structure, the estimation of financing cost, and the repayment plan for
financing. Feasible research must be conducted for all kinds of investments and the approval authority is
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determined according to the project size and the amount required. Contingency plans are formulated to cope with
any negative factors that might occur in the course of investment. The early warning system of financial risks and
management system of business contracts have been established to enhance the assessment and control over credit
risks and contract risks.
(III) Control activities
In order to reasonably guarantee the realization of all objectives, the Company has set up relevant control policies
and procedures, which mainly include: The approval control of transaction authorization, separate control of
incompatible duties, voucher and record control, property preservation control, independent inspection control,
electronic information system control, complete budgetary control, external guarantee control, information
disclosure control, and the monitoring of control.
(1) The approval control of transaction authorization
It has specified the scope, authority, procedures, responsibilities, and other relevant contents of the authorized
approval. All internal Management levels of the Company must exercise their functional authorities within their
authorized scope and the handling personnel must handle businesses with their authorities as well.
Based on the amount and nature of transactions, the Company has categorized the transaction authorization into
two levels, which are, general authorization and special authorization. In terms of general transactions, such as
purchase and sale and the reimbursement of routine expenses, the Company adopts the hierarchical approval
system involving the responsible accountant, department head, financial manager, general manager, and chairman
so as to ensure that all businesses are approved according to procedures. In terms of non-conventional transactions,
such as related party transactions, major acquisitions, significant capital expenditure, stock issuance, bond
issuance, and other major transactions, must be approved by the Board of Directors or the General Meeting of
Shareholders. The hierarchal authorization has been conducted for transactions in different natures, thus
effectively controlling risks.
(2) The separate control of incompatible duties
It has set up the system of assigning responsibility by position and internal check system and formulated the
position responsibilities of each constituent department and its personnel through the division of authorities and
responsibilities, thus avoiding mistakes and corrupt practices. Based on reasonable labor of division and scientific
division of responsibilities and authorities, the incompatible duties can be separated and each person can
automatically check the work of the other person or multiple persons, thus taking shape of the mechanism of
mutual check and balance. The incompatible duties mainly include: Authorized approval, business handling,
accounting record, property preservation, supervision, and inspections.
(3) Voucher and record control
The Company strictly reviews original vouchers and reasonably formulates the transfer procedures of vouchers.
Vouchers of transactions must be formulated and submitted to the accounting department for recording in time.
The registered vouchers must be filed orderly.
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(4) Property preservation control
Unauthorized personnel is strictly restrained from direct access to properties. Measures, such as periodic inventory,
property record, reconciliation of book balance and actual amount, and property insurance, are adopted to ensure
the security and integrity of various properties.
(5) Independent inspection control
A dedicated internal audit institution has been set up. The responsibilities and authorities of the internal
supervision for the internal audit institution and other internal institutions have been clarified. Meanwhile, the
procedures, methods, and requirements of internal supervision and the scope and frequency of daily supervision
and special supervision have been specified. The nature and cause of deficiencies in internal control identified
from supervision can be analyzed in time. Furthermore, remediation plans can be put forward in time. Such
deficiencies and corresponding remediation plans can be promptly reported to the Board of Directors, the
Supervisory Committee, or the Management in proper form.
(6) Electronic information system control
The Company has developed stricter policies for electronic information system control. Greater efforts have been
made in terms of the development and maintenance of electronic information systems, data input and output, and
document storage.
(7) Complete budgetary control
The Company has carried out the complete budgetary management to strictly control the off-budget capital
expenditure. The financial sharing system and dedicated personnel will supervise, analyze, and appraise the
implementation of the budget. All divisions/branches and subsidiaries/business departments will formulate
budgetary plans annually, which will be regularly analyzed by the financial department so as to restrain such
budget.
(8) External guarantee control
The Company controls the external guarantee in accordance with the law-based, prudent, mutually beneficial, and
safe principle so as to strictly prevent risks caused by the guarantee. The Company has formulated relevant
management systems to reasonably ensure the authenticity and integrity of guarantee business and the legitimacy
and compliance of review procedures.
(9) Information disclosure control
The Company has developed the Information Disclosure System (《信息披露制度》), the Internal Reporting
System of Material Information 《重大信息内部报告制度》), and the Accountability Policy for Material Errors in
Information Disclosure of the Annual Report (《年报信息披露重大差错责任追究制度》). The systems have
specified the responsible person, principle, and main contents of information disclosure, the disclosure, working
procedure, management, and accountability mechanism of major events, and the measures to deal with employees
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violating rules.
The Company has strictly fulfilled the information disclosure obligations according to relevant laws, regulations,
and rules to disclose information truthfully, accurately, completely, and timely, thus ensuring that all shareholders
have an equal opportunity to obtain information.
(10) The monitoring of control
The Company checks the implementation of internal control systems regularly and irregularly, which mainly
includes: The inspection of the Board of Directors of the Company, the inspection of the Audit Committee, and
the inspection of internal audit departments. All these inspections can ensure the effective operation of internal
control activities.
Through the inspection and supervision activities of internal control and the effective measures for the problems
identified from the inspection of regulatory authorities, the Company continues to supervise and inspect business
activities and the implementation of main internal control systems and continuously puts forward opinions and
suggestions on improvement. All these efforts have effectively prevented the risks of internal control and
safeguarded the normal operation of business management activities. It has played important roles in guiding and
driving the enhancement of standardized operation, refinement of corporate governance, and improvement of
management level.
2. Material Internal Control Deficiencies Identified for the Reporting Period
□ Yes √ No
XIII. The Company’s Management and Control of Subsidiaries during the Reporting Period
Problems Solution
Consolidation Solutions Subsequent
Company name Consolidation plan arising in implementation
progress taken solutions
consolidation progress
As per the applicable regulations of
the CSRC and the Shenzhen Stock
Exchange, as well as the Company’s
Articles of Association, the Company
provided compliance guidance for the
Jiangmen Debao
target company in organizational Completed N/A N/A N/A N/A
Group Co., Ltd.
structure, personnel adjustment,
internal controls, financial system,
etc., and has included the target
company in the Company’s system for
unified management.
Ganzhou As per the applicable regulations of
Lianduoli Feed the CSRC and the Shenzhen Stock Completed N/A N/A N/A N/A
Technology Co., Exchange, as well as the Company’s
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Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Ltd. Articles of Association, the Company
provided compliance guidance for the
target company in organizational
structure, personnel adjustment,
internal controls, financial system,
etc., and has included the target
company in the Company’s system for
unified management.
As per the applicable regulations of
the CSRC and the Shenzhen Stock
Exchange, as well as the Company’s
Articles of Association, the Company
Raoping Haide provided compliance guidance for the
Biotechnology target company in organizational Completed N/A N/A N/A N/A
Co., Ltd. structure, personnel adjustment,
internal controls, financial system,
etc., and has included the target
company in the Company’s system for
unified management.
XIV. Self-Assessment Report or Independent Auditor’s Report on Internal Control
1. Internal Control Self-Assessment Report
Disclosure date of internal control
12 April 2022
self-assessment report
Index to disclosed internal control self-
www.cninfo.com.cn
assessment report
Assessed entities’ combined assets as a
100.00%
percentage of consolidated total assets
Assessed entities’ combined operating
income as a percentage of consolidated 100.00%
operating income
Internal control deficiency identification standards
Type Financial-reporting related Non-financial-reporting related
A material deficiency refers to a deficiency Material deficiencies: (1) The internal
or a deficiency group that consists of control environment is invalid; (2) Any
multiple deficiencies that may cause a great leak of insider information about any
Nature standard deviation from the control objective. It is investment in external parties, asset
considered a material financial-reporting restructuring, etc. against regulations
internal control deficiency if any of the causes any severe fluctuations in the
following cases occurs: (1) Any of the Company’s stock price or any materially
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Company’s directors, supervisors or senior adverse impact on the Company’s image;
management is involved in a serious fraud; (3) The violation of the Company’s
(2) The Company corrects its disclosed decision-making procedure in any
financial statements for multiple times; (3) significant event causes a significant
certified public accountants identifies a economic loss to the Company; or (4)
material misstatement in the current financial The independent auditor identifies any
statements which the Company has failed to other material deficiencies in the
identify during its internal control process; Company.
or (4) The Company’s Audit Committee and Serious deficiencies: (1) The Company
internal audit organ maintain invalid provides any guarantee or conducts any
supervision over internal control. derivative financial instrument
A serious deficiency refers to a single transaction without due authorization or
deficiency or a deficiency group including performance of the corresponding
other deficiencies that is less serious than a information disclosure duty; (2) A severe
material deficiency but may still cause a loss of key talent occurs; (3) The
deviation from the control objective. It is Company is punished or a materially
considered a serious financial-reporting adverse impact is made to its image due
internal control deficiency if any of the to deviation from governing policies,
following cases occurs: (1) The Company measurement errors, etc.; (4) The
does not select and adopt its accounting independent auditor identifies any other
policies as per the generally accepted serious deficiencies in the Company.
accounting standards; (2) The Company does An ordinary deficiency refers to any
not formulate anti-fraud procedures or deficiency that is neither a material
control measures; (3) The Company has no deficiency nor a serious deficiency.
control systems for the accounting treatment
of non-conventional or special transactions;
or (4) There are one or multiple deficiencies
in controls over the financial reporting
process and there is no reasonable assurance
that the financial statements prepared are
truthful and accurate.
An ordinary deficiency refers to any
deficiency that is neither a material
deficiency nor a serious deficiency.
Material deficiency: misstated amount > 3% Material deficiency: Direct loss caused to
of profit before income tax, misstated the Company (hereinafter referred to as
amount ＞3% of net asset value. “loss amount”) > 3% of profit before
Serious deficiency: 1% of profit before income tax, loss amount ＞3% of net
Quantitative standard income tax ＜ misstated amount ≤ 3% of asset value.
profit before income tax, 1% of net asset Serious deficiency: 1% of profit before
value < misstated amount ≤ 3% of net income tax＜loss amount≤3% of profit
asset value. before income tax, 1% of net asset value
Ordinary deficiency: misstated amount ≤ < loss amount ≤ 3% of net asset value.
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1% of profit before income tax, misstated Ordinary deficiency: loss amount ≤1%
amount ≤1% of net asset value. of profit before income tax, loss amount
≤1% of net asset value.
Number of material financial-reporting
0
internal control deficiencies
Number of material
non-financial-reporting internal control 0
deficiencies
Number of serious financial-reporting
0
internal control deficiencies
Number of serious non-financial-reporting
0
internal control deficiencies
2. Independent Auditor’s Report on Internal Control
□ Applicable √ Not applicable
XV. Remediation of Problems Identified by Self-inspection in the Special Action on the
Governance of Listed Companies
On 10 December 2020, the China Securities Regulatory Commission issued the Announcement on Launching a
Special Campaign to Improve the Governance of Listed Companies ([2020] No.69) (《关于开展上市公司治理专
项行动的公告》). According to the notice and requirements of special self-inspection on the governance of listed
companies issued by the Securities Regulatory Bureau of Guangdong of the CSRC, the Company made
coordinated plans, based on the practical and realistic principle, to conduct self-inspection on the governance of
the Company. The relevant self-inspection and remediation report is presented as follows:
1. Self-inspection of the Company
The Company shall need to further refine relevant systems. The Company has set up sound internal management
systems according to relevant laws and regulations and operated by relevant systems and specifications. Upon the
self-inspection, it has been discovered that the provisions on the subject of the legal right to solicit voting rights of
shareholders in the Articles of Association (《公司章程》) are incomplete, which should be revised accordingly.
2. Remediation of the Company
The Company held the 21st Meeting of the 5th Board of Directors and the 2nd Extraordinary General Meeting of
Shareholders of 2021 on 23 July 2021, and 11 August 2021, respectively. The Proposal on Changing the
Registered Capital of the Company and Revising the 'Articles of Association' (《关于变更公司注册资本及修订<
公司章程>的议案》) was deliberated and approved, revising the incomplete clauses related to the subject of legal
right to solicit voting rights of shareholders. Details are presented as follows:
Before revision After revision
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Article 82 The shareholders (including shareholder proxies) shall Article 82 The shareholders (including shareholder proxies) shall
exercise their voting rights with the number of voting shares exercise their voting rights with the number of voting shares
represented by them, with one vote for each share. represented by them, with one vote for each share.
In the event of deliberating major events that may compromise the In the event of deliberating major events that may compromise the
interests of small and medium-sized investors at the General interests of small and medium-sized investors at the General
Meeting of Shareholders, the votes of such investors shall be Meeting of Shareholders, the votes of such investors shall be
counted separately. The separate voting results shall be publicly counted separately. The separate voting results shall be publicly
disclosed in time. disclosed in time.
The shares held by the Company have no voting rights, and such The shares held by the Company have no voting rights, and such
shares shall not be counted in the total number of voting shares shares shall not be counted in the total number of voting shares
present at the General Meeting of Shareholders. present at the General Meeting of Shareholders.
The Board of Directors, independent directors and eligible The Board of Directors, independent directors, shareholders with
shareholders can solicit the voting rights of shareholders. more than one percent of the voting shares, or the investor
Sufficient disclosure of voting intentions shall be disclosed to protection institutes established according to laws,
the shareholders whose voting rights are to be solicited. It is administrative regulations, or the provisions of the CSRC can
prohibited from soliciting shareholders' voting rights in a paid solicit voting rights by themselves or entrust securities
form or a disguised paid form. The Company shall not put companies and securities service agencies. They can publicly
forward a minimum shareholding limit for the solicited voting request the shareholders of the Company to entrust them to
rights. attend the General Meeting of Shareholders, and exercise
their rights of proposals, voting and other shareholder rights
on their behalf. Documents related to the solicitation of voting
rights of shareholders shall be disclosed to the corresponding
shareholders and the Company shall cooperate with such
behaviors accordingly. It is prohibited from soliciting
shareholders' voting rights in a paid form or a disguised paid form.
The Company shall not put forward a minimum shareholding limit
for the solicited voting rights. If the Company or its
shareholders suffer a loss due to the illegal solicitation of
shareholders' voting rights against the law, administrative
regulations, or the provisions of the CSRC, the corresponding
party shall be held accountable for compensation according to
laws.
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Section V. Environmental and Social Responsibility
I. Material Environmental Issues
Whether the Company and its subsidiaries are key pollutant discharging units as published by the environmental protection authority
√ Yes □ No
Names of
The
major Total
numbe Distribut The
Name of the pollutants Total dischar Excess
Discharg r of ion of concentratio
company or and Pollutant discharge standards dischar ge dischar
e method dischar discharg n of the
subsidiary characteris ge approve ge
ge e outlets discharge
tic d
outlets
pollutants
Discharge Standard of Water
Pollutants for Meat Packing
Industry ( 肉类加工工业水污染物
排放标准》) (GB13457-92);
Wastewater Quality Standards for
Wastewate Discharge to Municipal Sewers COD COD
r: chemical Discharg (《污水排入城镇下水道水质标 4.64t/y; 50.495t
oxygen ed into COD 48.9 准》) (GB/T31962-2015); Emission ammon /y;
demand the mg/L; Standards for Odor Pollutants (《恶 ia ammon
(COD), municipa ammonia 臭污染物排放标准》) nitroge ia
Jiaxiang Total
ammonia l pipe nitrogen 10.6 (GB14554-93); Discharge Standard n nitroge
Haiying Food 1 discharg None
nitrogen, network mg/L; TN of Cooking Fume (《饮食业油烟排 0.608t/ n
Co., Ltd. e outlets
total after 24.4 mg/L; 放标准》) (DB37/597—2006); y; TN 4.385t/
nitrogen reaching TP 2.6 mg/L; Integrated Emission Standard of Air 2.57t/y; y; TN
(TN), total the pH7.15 Pollutants (《大气污染物综合排放 TP 56.7t/y;
phosphoru standard 标准》) (GB16297-1996); Emission 0.449t/ TP
s (TP), pH Standard of Air Pollutants for y 6.48t/y
Boilers (《锅炉大气污染物排放标
准》) (DB372374-2018); Emission
Standard of Air Pollutants for
Boilers (《锅炉大气污染物排放标
准》) (GB13271-2014)
Wastewate Wastewat One COD: Wastewater: Secondary standard of COD COD
r: COD, er: outlet for 100mg/L; the Discharge Standard of Water 6.97t/y; 6.97t/y;
Linxi Haiying ammonia Discharg wastewat BOD: Pollutants for Meat Packing ammon ammon
6 None
Food Co., Ltd. nitrogen, ed into er, two 40mg/L; Industry ( 肉类加工工业水污染物 ia ia
biochemic the outlets total 排放标准》) (GB13457-1992); nitroge nitroge
al oxygen municipa for suspended exhaust gas: Emission Standard of n n
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demand l pipe boilers, particulates: Air Pollutants for Boilers (《锅炉大 0.67t/y; 0.67t/y;
(BOD), network and three 100mg/L; 气污染物排放标准》) TP TP
TP, TN, after outlets ammonia (GB13271-2014); Emission 0.021t/ 0.021t/
PH, reaching for nitrogen: Standards for Odor Pollutants (《恶 y; TN y; TN
suspended the exhaust 20mg/L; TN: 臭污染物排放标准》) 0.716t/ 0.716t/
solids, and standard; gas from 40mg/L; TP: (GB14554-1993) y; y;
animal and exhaust producti 3mg/L; PH: sulfur sulfur
vegetable gas: on 6-9; animal dioxide dioxide
oil; Organize and 0.288t/ 0.288t/
exhaust d vegetable y; y;
gas: Sulfur discharge oil:20mg/L; nitroge nitroge
dioxide, sulfur n oxide n oxide
nitrogen dioxide: 1.464t/ 1.464t/
oxide, 10mg/m y y
particles, nitrogen
odor oxide:
concentrati 30mg/m
on, particles:
hydrogen 5mg/m
sulfide, ammonia:
and 4.9kg/h;
ammonia hydrogen
sulfide:
0.33kg/h;
odor
concentratio
n
(dimensionle
ss): 2000
Exhaust Exhaust Odor Table 2 standard of the Emission COD COD
gas: gas: Three concentratio Standards for Odor Pollutants (《恶 73.62t/ 73.62t/
Particles, Organize outlets n 2000; 臭污染物排放标准 》) y; y;
nitrogen d for nitrogen (GB14554-93); Emission Standard ammon ammon
oxide, odor discharge worksho oxide of Air Pollutants for Boilers (《锅炉 ia ia
concentrati and ps, four 100mg/N m 大气污染物排放标准》) nitroge nitroge
Yiyuan on, unorgani outlets Ringelman (DB37/2374-2018); Level 3 n n
Haiying Food Ringelman zed 10 for emittance standard in Table 3 of the Discharge 7.98t/y; 7.98t/y; None
Co., Ltd. emittance; discharge boilers, shade 1; Standard of Water Pollutants for sulfur sulfur
wastewater ; and three sulfur Meat Packing Industry (《肉类加工 dioxide dioxide
: COD, wastewat outlets dioxide 工业水污染物排放标准》) 0.225t/ 0.225t/
ammonia er: for 50mg/N m (GB13457-92); Grade B standards y; y;
nitrogen, Discharg wastewat particles in Table 1 of the Wastewater nitroge nitroge
TN, TP, e after er 10mg/N m Quality Standards for Discharge to n oxide n oxide
pH value, treatment pH value Municipal Sewers ( 污水排入城镇 0.315t/ 0.315t/
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chroma, 6-8.5; COD 下水道水质标准》) y; y;
suspended 500mg/L; (GB/T31962-2015) particle particle
solids, TN 70mg/L; s s
five-day fecal 0.067t/ 0.067t/
BOD, fecal coliform y y
coliform, 10000;
and animal five-day
and BOD
vegetable 250mg/L;
oil ammonia
nitrogen
45mg/L;
chroma 64;
suspended
solids
300mg/L;
animal and
vegetable oil
50mg/L; TP
8mg/L
Wastewate Wastewat Acute
r: COD, er: toxicity:
ammonia Discharg 0.07mg/L;
Discharge Standards of Water
nitrogen e after TOC:
Pollutants for Pharmaceutical
(nitrogen being 30mg/L;
Industry Bio-pharmaceutical
H3 - treated volatile
Category (《生物工程类制药工业
nitrogen), by One phenols:
水污染物排放标准》) (GB
pH value, wastewat discharg 0.5mg/L; pH OCD: OCD:
21907-2008 and the concentration
TN, er e outlet value: 6-9; 9.06t/y; 9.06t/y;
limits specified in the drainage
chroma, treatment for ammonia ammon ammon
agreement of sewage treatment
Sichuan suspended station in wastewat nitrogen ia ia
plant; Emission Standard of Air
Hailinger solids, the er and (nitrogen H3 nitroge nitroge
Five Pollutants for Boilers (《锅炉大气 None
Biopharmaceu five-day worksho four - nitrogen): n: n:
污染物排放标准》)
tical Co., Ltd. BOD, p and discharg 25mg/L; TP 0.453t/ 0.453t/
(GB13271-2014); Emission
animal and reaching e outlets (in P): y; TP: y; TP:
Standards for Odor Pollutants (《恶
vegetable the for 5.1mg/L; 0.092t/ 0.092t/
臭污染物排放标准》)
oil, standard; exhaust formaldehyd y y
(GB14554-93); Sichuan Emission
formaldeh exhaust gas e: 2.0mg/L;
Control Standard for Volatile
yde, gas: animal and
Organic Compounds ( 四川省固定
acetonitrile Organize vegetable oil:
污染源大气挥发性有机物排放标
, total d 70mg/L;
准》) DB51/ 2377—2017
residual discharge chroma: 55;
chlorine and number of
(in unorgani fecal
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chloride), zed coliforms/
total discharge (MP
organic nitrogen/L):
carbon 500;
(TOC), suspended
acute solids:
toxicity, 350mg/L;
number of acetonitrile:
fecal 3.0mg/L;
coliforms, COD:
and 500mg/L;
volatile five-day
phenolic BOD:
surfactants 250mg/L;
; exhaust total residual
gas: Odor chlorine (in
concentrati chloride):
on, 0.5mg/L; TN
NMHC, (in nitrogen):
particles, 38mg/L;
the ammonia:
blackness 1.5mg/m
of smoke, hydrogen
nitrogen sulfide: 0.06
oxide, mg/m odor
sulfur concentratio
dioxide, n: 2000
ammonia (dimensionle
(ammonia ss); volatile
gas), and organic
hydrogen compounds
sulfide (in NMHC):
2.0 mg/m
sulfur
dioxide: 50
mg/m
nitrogen
oxide:150mg
/m
particles:
20mg/m the
blackness of
smoke: ≤
shade 1
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OCD:
3.14t/y;
OCD: suspend
86mg/L; ed
Wastewate Level-1 standards for the 2nd time
One suspended solids:
r: TP, TN, interval of the Discharge Limits of
outlet in solids: 1.82t/y;
Gaozhou OCD, Discharg Water Pollutants of Maoming City
the 50mg/L; ammon
Sanhe Animal ammonia e after (《茂名市水污染物排放限值》);
1 wastewat ammonia ia None None
Husbandry nitrogen, sewage Pollutant Discharge Standards for
er nitrogen: nitroge
Co., Ltd. PH, and treatment Livestock and Poultry Farming
treatment 5.6mg/L; n:
suspended Industry ( 畜禽养殖业污染物排放
zone TN:69mg/L; 0.2t/y;
solids 标准》)
TP: 2.9mg/L; TN:
PH:6-9 2.52t/y;
TP:
0.11t/y
Sulfur Sulfur
The dioxide dioxide
exhaust 0.118t/y 0.118t/y
Exhaust gas is ; ;
gas: discharge Sulfur nitroge nitroge
Nitrogen d after dioxide n oxide n oxide
oxide; being 6mg/m3; 1.769t/ 1.769t/
sulfur processe nitrogen y; y;
dioxide; d for oxide smoke smoke
particles urea 90mg/m3; The discharge limits of air 0.393t/ 0.393t/
(smoke); spraying smoke pollutants for the biomass-fired y; y;
Boiler
mercury denitratio 20mg/m3; briquette boiler of the suspend suspend
exhaust
and its n in a suspended Emission Standard of Air Pollutants ed ed
gas
Guangzhou oxides; bag-type solids for Boiler (《锅炉大气污染物排放 solids solids
outlet;
Haiwei Feed and the dust 2 60mg/L; 标准》)(DB44/26-2001) of 0.087t/ 0.087t/ None
wastewat
Co., Ltd. blackness collector; ammonia Guangdong Province; Grade 1 of y; y;
er
of smoke; the nitrogen the second period of the Discharge ammon ammon
discharg
wastewater wastewat 10mg/L; Limits of Water Pollutants (《水污 ia ia
e outlet
: er is COD 染物排放限值》) (DB44/26-2001) nitroge nitroge
Suspended discharge 90mg/L; of Guangdong Province n n
solids; d into the animal and 0.010t/ 0.010t/
flow, municipa vegetable oil y; COD y; COD
ammonia l pipe 10mg/L; 0.087t/ 0.087t/
nitrogen; network COD y; y;
PH; and after 10mg/L animal animal
COD reaching and and
the vegetab vegetab
standard le oil le oil
0.010t/ 0.010t/
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y; BOD y; BOD
0.010t/ 0.010t/
y y
Construction and operation of pollution prevention and control facilities:
During the Reporting Period, all key pollutant discharging subsidiaries of the Company have been equipped with
pollution control facilities, which are maintained regularly to ensure their effective operation. Specifically: (1)
Exhaust gas: It is discharged after being reduced the concentration and content of ammonia, hydrogen sulfide, and
offensive smell through many processes including wet dust removal, activated carbon, deodorization of spray
tower, and light and oxygen purification; (2) sewage (wastewater): It is discharged after being treated to reach the
standard through A/O process, AAO process, solid-liquid separation + cover lagoon anaerobic + two-stage AO +
Fenton treatment process; (3) solid wastes: Relevant facilities and equipment are equipped to realize harmless and
resource-based treatment.
Environmental impact assessment and other environmental protection administrative licensing of
construction projects:
All the aforementioned feed factories prepared environmental impact reports before project implementation and
submitted to the environmental authority for review and approval in accordance with the requirements of
environmental laws and regulations. They commenced project construction after obtaining the approval and
carried out construction works strictly in accordance with the requirements of environmental impact assessment.
Furthermore, they went through the procedures for the acceptance of project completion for environmental impact
assessment in accordance with laws and obtained the pollutant discharge permit.
Emergency plan for emergent environmental incidents:
During the Reporting Period, in order to implement the Emergency Response Law of the People's Republic of
China (《中华人民共和国突发事件应对法》), other relevant laws, regulations and documents, and to prevent,
prepare for and respond to environmental emergencies, as well as to protect the lives and reduce property losses,
all branches and subsidiaries have formulated contingency plans for environmental protection in accordance with
the requirements of local environmental protection authorities and have carried out drills under the contingency
plans. Meanwhile, in accordance with the requirements in the Management Measures of Haid Group for Safety
and Environmental Protection Emergency Preparation and Response (《海大集团安全环保应急准备和响应管理
办法》), the above-mentioned branches and subsidiaries have established a top-down organizational structure for
emergency response and allocated personnel and resources to enhance the response to risks and events of different
degrees, and strengthen the collaboration between various departments.
Self-monitoring program for environment:
All the branch companies and subsidiaries have formulated environmental self-monitoring plans in accordance
with the requirements of local environmental protection authorities and contacted qualified monitoring units to
conduct self-monitoring on a regular basis. Besides, they disclosed relevant information or filed with local
environmental protection authorities as required. All self-monitoring activities were in compliance with the
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requirements of the environmental protection evaluation and emission standards. Furthermore, some subsidiaries
engaged external professional agencies to carry out phased environmental monitoring. The supervision of the
Company on environmental protection has been intensified by the combination of the Company's self-monitoring
and the third-party professional monitoring. For example, Sichuan Hailinger Biopharmaceutical Co., Ltd.,
engaged a third-party independent agency, namely, Sichuan Jiecheng Environmental Technology Co., Ltd., to
monitor the discharged pollutants. It monitored the ammonia, odor concentration, and nitrogen oxide in exhaust
gas and COD, suspended solids, and ammonia nitrogen in wastewater and issued testing reports stating that all
results conform to requirements of relevant standards.
Administrative penalties imposed for environmental issues during the Reporting Period:
Name of the
Impact on the Remediation
company or Reason for penalty Regulation violated Penalty
Company measures
subsidiary
It violated the
provisions of Clause
I of Article 48 of the
The collection pipe
Law of the People's
of exhaust gas It was instructed to Repaired the
Republic of China
Jiaxiang Haiying ruptured, resulting in correct the unlawful No significantly ruptured pipe and
on the Prevention
Food Co., Ltd. the direct discharge act and fined adverse impact conducted regular
and Control of
of exhaust gas to the RMB20,000 inspections
Atmospheric
external environment
Pollution (《中华人
民共和国大气污染
防治法》)
It violated the
provisions of Article
10 of the Law of the The environmental
People's Republic of The TP in the facilities and
It was instructed to
China on the discharged equipment have been
Jiaxiang Haiying correct the unlawful No significantly
Prevention and wastewater exceeded replaced in time to
Food Co., Ltd. act and fined adverse impact
Control of the requirements of enhance the
RMB370,000
Atmospheric the standard capability of
Pollution (《中华人 wastewater treatment
民共和国大气污染
防治法》)
It violated the The pipe connecting
provisions of Article the photo-oxygen
45 of the Law of the integrated machine It was instructed to Repaired the
Linxi Haiying Food People's Republic of above the gas trap correct the unlawful No significantly damaged pipe and
Co., Ltd. China on the hood in its act and fined adverse impact conducted regular
Prevention and butchering workshop RMB23,000 inspections
Control of was damaged,
Atmospheric generating the
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Pollution (《中华人 exhaust gas
民共和国大气污染 containing volatile
防治法》) organic compounds.
Although the
production was
carried out in a
confined space, the
pollution prevention
measures were not
effective.
Other environmental information that should be disclosed:
N/A.
Measures taken to reduce carbon emissions during the reporting period and the results:
√ Applicable □ Not applicable
The Company has proactively explored energy conservation technologies and processes to reduce energy
consumption and the relevant emissions leading to climate change. Meanwhile, in recent years, Haid has
continued to push forward the energy transformation plans. Clean energies have been utilized in our operating
sites to reduce the dependence on conventional fossil fuels. For current projects, the Company has widely carried
out the phaseout program of coal-fired boilers. So far, the Company has preliminarily realized the conversion to
natural gas boilers and biomass vaporizers. For newly-built projects, the Company has allocated natural gas
boilers, biomass boilers, and other environmental protection equipment during the construction phase of these
projects.
Other information on environmental protection:
N/A.
II. Fulfillment of Social Responsibility
Please refer to the “Haid Group: Social Responsibility Report 2021” (《海大集团：2021年度社会责任报告》)
disclosed by the Company on the media designated for information disclosure.
III. Efforts in Poverty Alleviation and Rural Revitalization
As a privately-held enterprise rooted in agriculture, rural areas, and farmers and dedicated to agriculture and
animal husbandry, Haid Group has proactively responded to the call of the Party and the state. It has remained
committed to the enterprise mission of "prospering agriculture with science and technology, changing rural China",
aiming to facilitate farmers to achieve prosperity and contribute to comprehensive rural revitalization. Since the
founding of Haid Group, over 9,000 service engineers have rushed to ponds and hogcotes to practically assist
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farmers to carry out scientific animal husbandry, fulfilling its responsibility as an example of a leading
agricultural and animal husbandry enterprise. It has exerted well the industry, technology, service, mode, talent,
and capital advantages and continued to enhance its independent innovation capability and comprehensive
strength of scientific research. As a result, it has built a rural revitalization mode with characteristics of Haid,
facilitating the realization of industrialized agriculture, professional farmers, and popularized agricultural
techniques, thus writing a new chapter of comprehensive rural revitalization.
During the Reporting Period, the Company took the realization of common prosperity of farmers as the
fundamental goal. It has focused on industrial revitalization, talent revitalization, scientific revitalization, and
public services to facilitate the realization of three goals, which are, industrialized agriculture, professional
farmers, and popularized agricultural techniques. It has built a rural revitalization mode with characteristics of
Haid, which has been recognized by all sectors of society. Specifically:
Bureau of Agriculture and Rural Affairs of Guangzhou Municipality and Bureau of Agriculture and Rural Affairs
of Panyu District in Guangzhou have recognized the Haijingzhou animal husbandry base in Gull island and
Guangzhou Rongda Aquatic Technology Co., Ltd. (both are owned by Haid Group) as the production base for the
"vegetable basket" project in the Guangdong-Hong Kong-Macao Greater Bay Area, facilitating the local rural
revitalization.
Rural Development Bureau of Guangzhou has recognized Haid Group as the "Outstanding Contribution
Collective for Poverty Alleviation of the Province", fully demonstrating the high recognition of all sectors of
society of Haid Group for its devotion to poverty alleviation. Meanwhile, it also demonstrates the high
appreciation of the industrial poverty alleviation model featuring the "five elements of empowerment" of Haid
Group.
The Leading Group Office for the Implementation of Rural Revitalization Strategy of Guangdong Provincial Party
Committee has recognized Haid Group as the "Advanced Collective of Rural Revitalization in Guangdong
Province". As a local key national leading enterprise for the industrialization of agriculture in Guangdong, Haid
Group has closely followed the work arrangements of rural revitalization in Guangzhou, contributing to poverty
alleviation.
China Society for Promotion of the Guangcai Program announced the "Key Guangcai Programs in China of 2020".
Relying on the outstanding contribution to poverty alleviation and rural revitalization, the "charitable education
project for one million new professional farmers" submitted by Haid Group was listed on the "Key Guangcai
Programs in China of 2020", becoming one of the 28 enterprises that have been rewarded with such honor in
China.
Department of Agriculture and Rural Affairs of Guangdong Province, the Rural Revitalization Administration of
Guangdong Province, Guangdong Federation of Industry and Commerce, and Nanfang Daily Media Group jointly
launched the "Power of Revitalization - 2021 Excellent Case Promotion Campaign of Rural Revitalization in
Guangdong". The case of Leveraging the Power of Industry and Technology (《发挥产业之能，善用科技之力》
conducted by Haid Group has been highly recognized by the recommended panel, successfully being selected as
the 2021 Excellent Case of Rural Revitalization in Guangdong.
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For further information, please refer to the “Haid Group: Social Responsibility Report 2021” (《海大集团：2021
年度社会责任报告》) disclosed by the Company on the media designated for information disclosure.
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Section VI. Material Matters
I. Performance of Undertakings
1. Undertakings made by parties involved in undertakings including the Company’s actual controller,
shareholders, related parties, acquirers and the Company during the reporting period or prior periods but
subsisting to the end of the reporting period
√ Applicable □Not applicable
Particulars
Party involved Types of Undertaking Term of on the
Undertaking Details of undertaking
in undertaking undertaking date undertaking performanc
e
Undertaking on
shareholding structure
reformation
Undertaking made in
offering documents or
shareholding alternation
documents
Undertaking made
during asset
restructuring
1. Mr. Hua Xue guarantees no
prejudice to the interests of Haid
Group and its other shareholders
by virtue of his capacity as the
actual controller. 2. Mr. Hua Xue
Undertaking guarantees that, as long as he
on serves as the actual controller of
horizontal Haid Group, he and his
Undertaking made on 27 In strict
competition, wholly-owned subsidiaries,
initial public offering or Hua Xue November Long term performanc
related party controlled subsidiaries and
refinancing 2009 e
transaction actually controlled companies
and capital (except Haid Group) will not
occupation engage in business activities that,
directly or indirectly, compete
with or constitute competitive
threat to the principal businesses
or major products of Haid Group
in any form, including investment,
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acquisition or merger of
companies, enterprises or other
economic organizations the
principal businesses or major
products of which are the same
with or similar to those of Haid
Group.
1. It guarantees no prejudice to the
interests of Haid Group and other
shareholders of Haid Group by
virtue of its capacity as the
controlling controller. 2.
Guangzhou Haihao guarantees
that, as long as it is the controlling
shareholder of Haid Group, it and
its wholly-owned subsidiaries,
Undertaking
controlled subsidiaries (except
on
Haid Group) and actually
Guangzhou horizontal
controlled companies will not 27 In strict
Haihao competition,
engage in business activities that, November Long term performanc
Investment Co., related party
directly or indirectly, compete 2009 e
Ltd. transaction
with or constitute competitive
and capital
threat to the principal businesses
occupation
or major products of Haid Group
in any form, including investment,
acquisition or merger of
companies, enterprises or other
economic organizations the
principal businesses or major
products of which are the same
with or similar to those of Haid
Group.
The Company guarantees no
provision of loans or financial
assistance in other forms to the
awardees for acquisition of
From 15
Guangdong relevant interests under the 2016
Undertakings related to Other 15 February February
Haid Group Co., Restricted Share Incentive Plan of Expired
equity incentives undertakings 2017 2017 to 17
Limited Guangdong Haid Group Co.,
June 2021
Limited (《广东海大集团股份有
限公司 2016 年限制性股票激励
计划》), including provision of
guarantees for their loans.
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The Company guarantees no
provision of loans, loan
guarantees, or financial assistance
in other forms to the awardees for From 20
Guangdong In strict
Other acquisition of relevant interests 20 May May 2021 to
Haid Group Co., performanc
undertakings under the 2021 Share Option 2021 27 June
Limited e
Incentive Plan of Guangdong 2027
Haid Group Co., Limited (《广东
海大集团股份有限公司 2021 年
股票期权激励计划》).
Specific conditions, proportions
and intervals of cash dividends:
The following conditions shall be
satisfied when the company
makes distribution of cash
dividends: (1) The profits and the
accumulative distributable profit
(i.e., tax after the Company makes
up losses and make allocation to
reserves) realized by the company
in the year or half year is positive
in value and the cash flow is
sufficient. The distribution of cash
dividend will not affect the
Company's subsequent operations;
(2) The auditor has issued a
Undertakings made to Guangdong From 6 May In strict
Dividend standard unqualified audit report
minority shareholders of Haid Group Co., 6 May 2019 2019 to 5 performanc
undertaking on the Company's annual financial
the Company Limited May 2022 e
report (if the Company distributes
the interim dividend, the auditor
shall have issued a standard
unqualified audit report on the
Company's financial report for the
previous year); (3) The Company
has no plan on material external
investment or major cash outlays
within the next twelve months
(except proceeds-financed
investment projects). A major
investment plan means that the
accumulated expenditure of the
Company to be used for external
investment and purchase of assets
or equipment within the next
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twelve months will reach or
exceed 30% of the Company's
latest audited net assets. (4) Other
circumstances in which the Board
considers it is not suitable for
distribution of cash dividends. In
compliance with the above
conditions, the Company will, in
principle, make a distribution of
cash dividend once a year. The
Board of the Company may
propose interim cash dividends
based on the profitability of the
Company when the relevant
regulations allow. In principle, the
Company's profits accumulated in
cash every three years should not
be less than 30% of the annual
average distributable profit
realized in the three years.
Hua Xue,
Yingzhuo Xu,
Qi Cheng,
Jianfang Gui,
Jianguo He,
Yunguo Liu,
Zhenxiong Qi,
In compliance with the laws and
Hua Wang, Undertaking
regulations governing 27 In strict
Yongfang Mu, on reduction
shareholding reductions by November Long term performanc
Guoxiang Liu, of
directors, supervisors and senior 2009 e
Xueqiao Qian, shareholding
management
Shaolin Yang,
Xiewu Jiang,
Guocheng Mi,
Zhongzhu Chen,
Mingzhong
Chen and
Zhijian Huang
In compliance with the laws and
Undertaking
Jing Wang, Jia regulations governing In strict
on reduction 21 August 16 January
Chen and Li shareholding reductions by performanc
of 2013 2023
Tian directors, supervisors and senior e
shareholding
management
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Whether undertakings
Yes
performed on time
Specific reasons why
undertakings were not
N/A
performed on time and
next steps
2. Description on the Company’s assets and items in meeting original profit forecast and its explanation as
there is profit forecast for assets and items of the Company and the reporting period is still within the
profit forecast period
□ Applicable √ Not applicable
II. Appropriation of Funds of the Company by the Controlling Shareholder and Its Related
Parties for Non-Operating Purposes
□ Applicable √ Not applicable
There was no appropriation of funds of the Company by the controlling shareholder and its related parties for non-operating purposes
during the reporting period.
III. External Guarantees against the Rules and Regulations
□ Applicable √ Not applicable
There was no external guarantee provided by the Company which was against the rules and regulations during the reporting period.
IV. Opinions of the Board Regarding the Latest "Modified Audit Report"
□ Applicable √ Not applicable
V. Opinions of the Board, the Supervisory Committee and Independent Directors (If Any)
Regarding the "Modified Audit Report" for the Reporting Period Issued by the Accountants
□ Applicable √ Not applicable
VI. Reason for Changes in Accounting Policies and Accounting Estimates as well as
Correction of Major Accounting Errors as Compared to the Financial Report for the Prior
Year
√ Applicable □ Not applicable
For the changes in accounting policies and accounting estimates as compared to the financial report for the prior
year, please refer to Note III, 39 in Section X. “Financial Statements”.
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Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
VII. Reason for Changes in Scope of the Consolidated Financial Statements as Compared to
the Financial Report for the Prior Year
√ Applicable □ Not applicable
During the year, the scope of consolidation included 497 subsidiaries, increasing by 123 and reducing by 15 as
compared with the last year. For details, please refer to the Note "VI. Change in Consolidation Scope" and the
Note "VII. Interests in Other Entities" in Section X “Financial Statements".
VIII. Engagement or Dismissal of Accounting Firm
Current accounting firm engaged
Name of the domestic accounting firm Grant Thornton China (Special General Partnership)
Remuneration of the domestic accounting firm (RMB ’0,000) 450
Continued term of service of the domestic accounting firm 3
Name of certified public accountants of the domestic accounting
Wenyuan Guan, Shuxia Zhang
firm
Continued term of service of certified public accountants of the Wenyuan Guan: 3 years
domestic accounting firm Shuxia Zhang: 4 years
Name of the overseas accounting firm (if any) N/A
Remuneration of the overseas accounting firm (RMB ’0,000) (if
0
any)
Continued term of service of the overseas accounting firm (if
N/A
any)
Name of certified public accountants of the overseas accounting
N/A
firm (if any)
Continued term of service of certified public accountants of the
N/A
overseas accounting firm (if any)
Whether to appoint another accounting firm during the current period
□ Yes √ No
Particulars on recruitment of accounting firms, financial consultants or sponsors for internal control and auditing purposes
□ Applicable √ Not applicable
IX. Delisting Upon Publication of Annual Report
□ Applicable √ Not applicable
X. Matters Related to Bankruptcy and Reorganisation
□ Applicable √ Not applicable
There was no matter related to bankruptcy and reorganisation during the reporting period.
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XI. Material Litigation and Arbitration
□ Applicable √ Not applicable
During the reporting period, the Company was not involved in any material litigation and arbitration.
XII. Punishment and Rectification
□ Applicable √ Not applicable
There was no punishment and rectification of the Company during the reporting period.
XIII. Credibility of the Company, Its Controlling Shareholder and Actual Controller
□ Applicable √ Not applicable
XIV. Significant Related Party Transactions
1. Related party transactions associated with day-to-day operation
√ Applicable □ Not applicable
Amount Percent Amount Market
Subject Pricing
Types of age of Whethe Settlem price
matter basis Price of
Related of the related as the transacti r ent of of
of the of the related Disclos
Related party related party amount ons exceedi related availabl Disclos
related related party ure
party relations party transacti of approve ng party e ure date
party party transacti index
hip transacti ons similar d approve transacti similar
transacti transacti ons
ons (RMB ’ transacti (RMB ’ d cap ons transacti
ons ons
0,000) ons 0,000) on
The Announ
price of cement
each on
On
transacti Day-to-
normal
on shall day
Purchas Purchas commer
be Related
e of raw e of raw cial
Guizhou determi Party
material material terms or
Fuhai Associat Market ned by 20,779. 20 April Transac
s and s and 0.27% 21,053 No in N/A
Chemical e price both 82 2021 tion in
receipt receipt accorda
Co., Ltd. parties 2021
of labor of labor nce with
through (Annou
services services relevant
negotiat ncemen
agreeme
ion t No.
nts
based 2021-0
on the 41)
uniform publish
137
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
market ed on
price as 20
quoted April
external 2021 in
ly by the
the media
seller at designa
the time ted for
of informa
transacti tion
on. disclos
ure
The Announ
price of cement
each on
transacti Day-to-
on shall day
be Related
determi Party
ned by Transac
both On tion
parties normal (Annou
through commer ncemen
Alaer negotiat cial t No.
Purchas Purchas
Ruiliheng ion terms or 20 2021-0
Associat e of raw e of raw Market 1,221.8
Biologica based 0.02% 2,700 No in N/A October 99)
e material material price 7
l Protein on the accorda 2021 publish
s s
Co., Ltd. uniform nce with ed on
market relevant 20
price as agreeme October
quoted nts 2021 in
external the
ly by media
the designa
seller at ted for
the time informa
of tion
transacti disclos
on. ure
The On Announ
Wujiaqu Purchas Purchas
price of normal 20 cement
Taikun Associat e of raw e of raw Market 2,551.9
each 0.03% 2,300 Yes commer N/A October on
Plant e material material price 8
transacti cial 2021 Day-to-
Protein s s
on shall terms or day
138
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Co., Ltd. be in Related
determi accorda Party
ned by nce with Transac
both relevant tion
parties agreeme (Annou
through nts ncemen
negotiat t No.
ion 2021-0
based 99)
on the publish
uniform ed on
market 20
price as October
quoted 2021 in
external the
ly by media
the designa
seller at ted for
the time informa
of tion
transacti disclos
on. ure
The Announ
price of cement
each on
transacti Day-to-
on shall day
be Related
Haid On
determi Party
Yingtaog normal
ned by Transac
u Farm commer
both tion
(Vietnam) cial
Purchas Purchas parties (Annou
Co., Ltd. terms or
Associat e of raw e of Market through 0.0014 27 July ncemen
and its 109.11 160.00 No in N/A
e material duckling price negotiat % 2021 t No.
branch accorda
s s ion 2021-0
companie nce with
based 81)
s and relevant
on the publish
subsidiari agreeme
uniform ed on
es nts
market 27 July
price as 2021 in
quoted the
external media
ly by designa
the ted for
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Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
seller at informa
the time tion
of disclos
transacti ure
on.
Announ
cement
on
Day-to-
day
Related
The Party
price of Transac
each tion in
transacti 2021
on shall (Annou
be ncemen
Foshan
determi t No.
Haihang
ned by 2021-0
Xingfa
both On 41) and
Agricultu
parties normal Announ
re and
through commer cement
Animal
negotiat cial 20 April on
Husbandr Sales of
Sales of ion terms or 2021 Day-to-
y Associat feed and Market 11,138.
commo based 0.13% 11,550 No in N/A and 27 day
Develop e other price 07
dities on the accorda July Related
ment Co., products
uniform nce with 2021 Party
Ltd. and
market relevant Transac
its branch
price as agreeme tion
companie
quoted nts (Annou
s and
external ncemen
subsidiari
ly by t No.
es
the 2021-0
seller at 81)
the time publish
of ed on
transacti 20
on. April
2021
and 27
July
2021
respecti
vely in
140
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
the
media
designa
ted for
informa
tion
disclos
ure
The Announ
price of cement
each on
transacti Day-to-
on shall day
be Related
determi Party
ned by Transac
Haid both On tion
Yingtaog parties normal (Annou
u Farm through commer ncemen
(Vietnam) negotiat cial t No.
Sales of
Co., Ltd. Sales of ion 4,086.8 terms or 20 2021-0
Associat feed and Market
and its commo based 1 0.05% 4,340 No in N/A October 99)
e other price
branch dities on the accorda 2021 publish
products
companie uniform nce with ed on
s and market relevant 20
subsidiari price as agreeme October
es quoted nts 2021 in
external the
ly by media
the designa
seller at ted for
the time informa
of tion
transacti disclos
on. ure
39,887.
Total -- -- -- 42,103 -- -- -- -- --
66
Particulars on refund of bulk sale N/A
Actual performance of day-to-day
transactions to be conducted in the
period for which the total transaction N/A
amount is estimated by categories
during the reporting period (if any)
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Reasons for large differences between
transaction prices and market N/A
reference prices (if applicable)
2. Related party transactions in connection with purchase or sale of assets or equity interest
□ Applicable √ Not applicable
There was no related party transaction of the Company in connection with purchase or sale of assets or equity interest during the
reporting period.
3. Related party transactions connected to joint external investment
□ Applicable √ Not applicable
There was no related party transaction of the Company connected to joint external investment during the reporting period.
4. Related creditors’ rights and debts transactions
□ Applicable √ Not applicable
There were no related creditors’ rights and debts of the Company during the reporting period.
5. Transactions with related finance companies
□ Applicable √ Not applicable
The Company did not make deposits in, receive loans or credit from and was not involved in any other finance business with any
related finance company or any of its related parties.
6. Transactions between finance companies controlled by the Company and related parties
□ Applicable √ Not applicable
No related parties made deposits in, received loans or credit from or was involved in any other finance business with any finance
company controlled by the Company.
7. Other significant related party transactions
√ Applicable □ Not applicable
The Proposal on External Investment and Related Party Transactions (《关于对外投资暨关联交易的议案》) was
reviewed and approved on the Eleventh Meeting of the Fifth Board of Directors on 25 July 2020 and the First
Extraordinary General Meeting of 2020 on 14 August 2020. It was approved that the wholly-owned subsidiary of
the Company could transfer 33.47% of the fund share of Guangzhou Hengjuchang Venture Investment Partnership
(Limited Partnership) held by Guangzhou Haihao Investment Co., Ltd., the controlling shareholder of the
Company, with its own capital of RMB 1,011,100, and assume the remaining capital contribution of RMB 669
million from Guangzhou Haihao Investment Co., Ltd. in the Partnership Agreement of Guangzhou Hengjuchang
Venture Investment Partnership (Limited Partnership) (《广州市恒聚昌创业投资合伙企业（有限合伙）之合伙
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Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
协议》) and all the rights and obligations under the Partnership Agreement. As at 16 April 2021, the transfer of the
above-mentioned share has been completed and registered for business change.
Current announcements on the significant related party transactions and website where they are disclosed:
Title of current announcement Disclosure date disclosure website
Securities Times, China Securities Journal,
Announcement on Investment in External
28 July 2020 Shanghai Securities News, Securities Times,
Entity & Related Party Transaction
and http://www.cninfo.com.cn/
XV. Material Contracts and Implementation
1. Custody, contracting and leasing
(1) Custody
□ Applicable √ Not applicable
There was no custody of the Company during the reporting period.
(2) Contracting
□ Applicable √ Not applicable
There was no contracting of the Company during the reporting period.
(3) Leasing
□ Applicable √ Not applicable
There was no leasing of the Company during the reporting period.
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Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
2. Significant guarantees
√ Applicable □ Not applicable
Unit: RMB’0,000
External guarantees of the Company and its subsidiaries (excluding guarantees to subsidiaries)
Date of the
related
Amount Guarantee
announcemen
of Guarantee Type of Collateral Fulfilled to related
Name of obligee t Guarantee date Counter-guarantee (if any) Term
guarante provided guarantee (if any) or not parties
disclosing the
e or not
guarantee
amount
Customers (such as
farmers and
The Company has the right to confiscate the
dealers) of seven
relevant funds (including but not limited to
controlled Joint liability
28 June 2018 2,000 15 April 2020 6 prepayments, discounts and annual bonuses) 3 years No No
subsidiaries guarantee
of the customer for repaying the principal and
including Hunan
interest of the customer’s overdue loan.
Haid Bio-Feed Co.,
Ltd.
Customers (such as The Company has the right to confiscate the
farmers and relevant funds (including but not limited to
dealers) of eleven Joint liability prepayments, discounts, annual bonuses,
16 April 2019 1,500 16 May 2019 282 3 years No No
controlled guarantee security deposits, farming entrustment fees) of
subsidiaries the customer for repaying the principal and
including Guangxi interest of the customer’s overdue loan.
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Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Haid Feed Co., Ltd.
The spouse of the borrower, adult children of
the borrower and their spouses, and/or
third-party guarantors provide
Customers (such as counter-guarantees; and the Company has the
farmers and 17 March Joint liability right to confiscate the relevant funds 1-3
38,450 14 May 2020 174.5 No No
dealers) of 2020 guarantee (including but not limited to prepayments, years
subsidiary discounts, annual bonuses, security deposits,
farming entrustment fees) of the customer for
repaying the principal and interest of the
customer’s overdue loan.
Joint liability The spouse of the borrower, adult children of Within 1
4 January 2021 4,184.9 Yes No
guarantee the borrower and their spouses, and/or year
third-party guarantors provide
Customers (such as counter-guarantees; and the Company has the
farmers and right to confiscate the relevant funds
28 July 2020 52,850
dealers) of 29 December Joint liability (including but not limited to prepayments,
633 1 year No No
subsidiary 2020 guarantee discounts, annual bonuses, security deposits,
farming entrustment fees) of the customer for
repaying the principal and interest of the
customer’s overdue loan.
Joint liability The spouse of the borrower, adult children of Within 1
3 February 2021 45,220.6 Yes No
guarantee the borrower and their spouses, and/or year
Customers (such as third-party guarantors provide
farmers and 19 January counter-guarantees; and the Company has the
91,400
dealers) of 2021 Joint liability right to confiscate the relevant funds 1-3
4 February 2021 47,094.2 No No
subsidiary guarantee (including but not limited to prepayments, years
discounts, annual bonuses, security deposits,
farming entrustment fees) of the customer for
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Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
repaying the principal and interest of the
customer’s overdue loan.
Customers (such as The spouse of the borrower, adult children of
farmers and Joint liability the borrower and their spouses, and/or
27 July 2021 24,000 11 August 2021 476.31 1 year Yes No
dealers) of guarantee third-party guarantors provide
subsidiary counter-guarantees.
Total external guarantees
Total actual external guarantees
approved during the reporting 115,400 98,071.52
during the reporting period (A2)
period (A1)
Total external guarantees Total balance of actual external
approved at the end of the 210,200 guarantees at the end of the reporting 48,115.64
reporting period (A3) period (A4)
Guarantees between the Company and its subsidiaries
Date of the
related
Amount Guarantee
announcemen
of Guarantee Type of Collateral Fulfilled to related
Name of obligee t Guarantee date Counter-guarantee (if any) Term
guarante provided guarantee (if any) or not parties
disclosing the
e or not
guarantee
amount
Sheng Long
Minority shareholders provide
Bio-Tech 17 March Joint liability 5
33,096 25 January 2021 1,186.38 counter-guarantees for the Company in Yes No
International 2020 guarantee months
proportion to their shareholding percentages.
Co.,Ltd
27 October Joint liability
Haid International 31,878.5 13 June 2018 31,878.5 N/A 7 years No No
2017 guarantee
Group Limited
20 April 2021 255,028 10 September 255,028 Joint liability N/A 3 years No No
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Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
2021 guarantee
Sheng Long Bio
19 January
Tech(M)SDN. 685
2021
BHD
Haid Feed 17 March Joint liability 3
7,953 21 January 2021 775.77 N/A Yes No
Co.,Limited 2020 guarantee months
Haid Feed 19 January Joint liability 1-3
6,851 3 February 2021 12,725.69 N/A Yes No
Co.,Limited 2021 guarantee months
Minority shareholders provide
19 January 20 February Joint liability 1-5
8,973 2,091.65 counter-guarantees for the Company in Yes No
2021 2021 guarantee months
proportion to their shareholding percentages.
Shenglong Minority shareholders provide
Joint liability 4-5
Bio-Tech (India) 29 May 2021 2,334.19 counter-guarantees for the Company in Yes No
guarantee months
Private Limited proportion to their shareholding percentages.
20 April 2021 2,055
Minority shareholders provide
Joint liability
17 July 2021 3,427.97 counter-guarantees for the Company in 1 year No No
guarantee
proportion to their shareholding percentages.
Hai Duong Haid 19 January Joint liability 1-3
6,166 3 February 2021 9,817.13 N/A Yes No
Company Limited 2021 guarantee months
China Haida Feed
19 January
Group（HK） 30,502
2021
Limited
China Haida Feed
Group（HK） 20 April 2021 40,000
Limited
Pt.Haida 19 January 24 February Joint liability 2-5
10,277 10,164.05 N/A Yes No
Agriculture 2021 2021 guarantee months
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Indonesia Joint liability
21 October 2021 1,044.42 N/A 1 year No No
guarantee
Vinh Long Hai Dai
20 April 2021 2,055
Co.,Ltd
28 November Joint liability
29 June 2019 100,000 49,166.2 N/A 10 years No No
2019 guarantee
10 September Joint liability
28 July 2020 55,000 41,527.16 N/A 10 years No No
2020 guarantee
Joint liability
180,000 8 February 2021 15,332.88 N/A 10 years No No
guarantee
Guangzhou Yitun Joint liability 1-6
12 March 2021 7,000 N/A Yes No
Pig Industry 19 January guarantee months
Investment Co., 2021 Joint liability
131,146 12 March 2021 33,000 N/A 1 year No No
Ltd. guarantee
Joint liability
2 July 2021 20,000 N/A 1 year No No
guarantee
28 September Joint liability
50,000 7,045.72 N/A 9 years No No
2021 guarantee
20 April 2021
Joint liability
18,854 18 June 2021 10,000 N/A 1 month Yes No
guarantee
Subsidiaries
including
19 January
Shijiazhuang Weike 15,700
2021
Biotechnology Co.,
Ltd.
Shandong Haiding 19 January 50,000
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Agriculture and 2021
Animal Husbandry
Co., Ltd.
Guangdong Haid
International Trade 20 April 2021 95,000
Co., Ltd.
Qingyuan Hailong
Joint liability 2-3
Biotechnology Co., 28 July 2020 350 17 August 2020 345 N/A No No
guarantee years
Ltd.
Wholly-owned or Minority shareholders provide
19 January Joint liability
controlled 183,225 3 February 2021 23,600.28 counter-guarantees for the Company in 1 year No No
2021 guarantee
subsidiaries proportion to their shareholding percentages.
Wholly-owned or Minority shareholders provide
Joint liability
controlled 20 April 2021 6,000 20 May 2021 879.79 counter-guarantees for the Company in 1 year No No
guarantee
subsidiaries proportion to their shareholding percentages.
Wholly-owned or Minority shareholders provide
Joint liability
controlled 27 July 2021 55,000 11 August 2021 9,268.06 counter-guarantees for the Company in 1 year No No
guarantee
subsidiaries proportion to their shareholding percentages.
Wholly-owned or
19 January
controlled 121,000
2021
subsidiaries
Total amount of guarantee
Total amount of guarantee provided
provided for subsidiaries
1,268,517 for subsidiaries during the reporting 547,638.84
approved during the reporting
period (B2)
period (B1)
Total amount of guarantee Total balance of guarantee provided
1,496,794.5 467,532.82
provided for subsidiaries for subsidiaries as at the end of the
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approved as at the end of the reporting period (B4)
reporting period (B3)
Guarantees between subsidiaries
Date of the
related
Amount Guarantee
announcemen
of Guarantee Type of Collateral Fulfilled to related
Name of obligee t disclosing Guarantee date Counter-guarantee (if any) Term
guarante provided guarantee (if any) or not parties
the
e or not
guarantee
amount
Minority shareholders provide
Joint liability 3-6
28 July 2020 50,353 18 January 2021 5,484.69 counter-guarantees for the Company in Yes No
guarantee months
proportion to their shareholding percentages.
Sheng Long
Minority shareholders provide
Bio-Tech Joint liability 2-6
3 February 2021 47,504.35 counter-guarantees for the Company in Yes No
International guarantee months
19 January proportion to their shareholding percentages.
Co.,Ltd 109,305
2021 Minority shareholders provide
Joint liability
16 July 2021 8,421.68 counter-guarantees for the Company in 1 year No No
guarantee
proportion to their shareholding percentages.
Hai Duong Haid 19 January Joint liability 2
8,000 7 April 2021 641.6 N/A Yes No
Company Limited 2021 guarantee months
Haid Feed 19 January Joint liability 2
3,426 2 March 2021 2,554.76 N/A Yes No
Co.,Limited 2021 guarantee months
Shenglong Minority shareholders provide
19 January Joint liability 3
Bio-Tech (India) 9,999 10 May 2021 891.27 counter-guarantees for the Company in Yes No
2021 guarantee months
Private Limited proportion to their shareholding percentages.
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Minority shareholders provide
Joint liability
26 August 2021 959.83 counter-guarantees for the Company in 1 year No No
guarantee
proportion to their shareholding percentages.
Pt.Haida
19 January Joint liability 2
Agriculture 3,426 25 August 2021 571.8 N/A Yes No
2021 guarantee months
Indonesia
Vinh Long Hai Dai 19 January
8,221
Co.,Ltd 2021
Long Sheng
International 20 April 2021 3,426
Co.,Ltd
Jiangmen Debao
Group Co., Ltd. Joint liability
27 July 2021 7,500 11 August 2021 7,500 N/A 1 year No No
and its controlled guarantee
subsidiaries
Total amount of guarantee Total amount of guarantee between
between subsidiaries approved 153,303 subsidiaries during the reporting 74,529.98
during the reporting period (C1) period (C2)
Total amount of guarantee
Total balance of guarantee between
between subsidiaries approved as
203,656 subsidiaries as at the end of the 16,881.5
at the end of the reporting period
reporting period (C4)
(C3)
Total amount of guarantee provided (i.e. sum of the above three guarantee amounts)
Total amount of guarantee approved during the Total amount of guarantee during the
1,537,220 720,240.34
reporting period (A1+B1+C1) reporting period (A2+B2+C2)
Total balance of guarantee as at the
Total amount of guarantee approved as at the end 1,910,650.5 532,529.96
end of the reporting period
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of the reporting period (A3+B3+C3) (A4+B4+C4)
The percentage of total amount of guarantee provided (i.e.
36.82%
A4+B4+C4) to the net assets of the Company
Of which:
Balance of guarantee provided for shareholders, beneficial
0
controllers and its related parties (D)
Balance of guarantee directly or indirectly provided for
465,429.56
obligors with gearing ratio over 70% (E)
Total amount of guarantee provided in excess of 50% of net
0
assets (F)
Total amount of the three kinds of guarantees above (D+E+F) 465,429.56
Explanations on liability to guarantee occurred during the
During the reporting period, the Company paid a total of RMB 3.2416 million for overdue loans with its guarantee, of which
reporting period or possible joint liability for satisfaction for
RMB 437,100 was collected while it is trying to collect the rest.
undue guarantee contracts (if any)
Explanations on provision of guarantee in violation of
N/A
established procedures
Notes:
1. The guarantee amounts provided by subsidiaries for external parties are calculated according to the equity-holding percentages of the Company in those subsidiaries.
2. The foreign-currency guarantees in the table above are converted at the middle rate of exchange at the end of the reporting period.
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3. Entrusted cash and asset management
(1) Entrusted wealth management
√ Applicable □ Not applicable
Entrusted wealth management during the reporting period
Unit: RMB’0,000
Impairment
Fund source for
Amount of entrusted Overdue allowances for the
Type entrusted wealth Undue balance
wealth management outstanding amount overdue outstanding
management
amount
Wealth management
Owned funds 30,000 0 0 0
products of banks
Wealth management
products of Raised funds 15,000 0 0 0
securities firms
Wealth management
Raised funds 25,000 0 0 0
products of banks
Total 70,000 0 0 0
Particulars of high risk wealth management products with individual significant amount or low security or poor liquidity:
□ Applicable √ Not applicable
Unable to recover the principal of entrusted wealth management or other circumstances that may result in impairment:
□ Applicable √ Not applicable
(2) Entrusted loans
√ Applicable □ Not applicable
Overview of entrusted loans during the reporting period
Unit: RMB’0,000
Total entrusted loans Source Undue balance Overdue outstanding amount
2,250 Owned funds 1,850 0
Particulars of high risk wealth entrusted loans with individual significant amount or low security or poor liquidity:
□ Applicable √ Not applicable
Unable to recover the principal of entrusted loans or other circumstances that may result in impairment:
□ Applicable √ Not applicable
4. Other material contracts
□ Applicable √ Not applicable
The Company did not have any other material contract during the reporting period.
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XVI. Other Matters of Significance
□ Applicable √ Not applicable
The Company did not have any other matters of significance to be explained during the reporting period.
XVII. Matters of Significance of Subsidiaries of the Company
□ Applicable √ Not applicable
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Section VII. Share Changes and Shareholder Information
I Share Changes
1. Share Changes
Unit: share
Before Increase/decrease in the reporting period (+/-) After
Share
Shares
s as
as
divide
divide
nd
nd
conve
Percenta New conver Percent
Shares rted Other Subtotal Shares
ge (%) issue ted age (%)
from
from
retain
capital
ed
reserv
earnin
es
gs
1. Restricted shares 14,413,777 0.87% -11,379,230 -11,379,230 3,034,547 0.18%
1.1 Shares held by the state
1.2 Shares held by
state-owned juridical persons
1.3 Shares held by other
14,413,777 0.87% -11,379,230 -11,379,230 3,034,547 0.18%
domestic investors
Of which: shares held by
domestic juridical persons
Shares held by domestic
14,413,777 0.87% -11,379,230 -11,379,230 3,034,547 0.18%
natural persons
1.4 Shares held by foreign
investors
Of which: shares held by
foreign juridical persons
Shares held by foreign natural
persons
2. Non-restricted shares 1,646,796,974 99.13% 11,329,540 11,329,540 1,658,126,514 99.82%
2.1 RMB ordinary shares 1,646,796,974 99.13% 11,329,540 11,329,540 1,658,126,514 99.82%
2.2 Domestically listed
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foreign shares
2.3 Overseas listed foreign
shares
2.4 Other
3. Total shares 1,661,210,751 100.00% -49,690 -49,690 1,661,161,061 100.00%
Reasons for share changes:
√ Applicable □ Not applicable
1. Based on the shareholdings of the Company’s directors, supervisors and senior management in the Company at
the end of last year, their tradable shares were recalculated at the beginning of the current year, resulting in
changes in their shares in lockup.
2. As certain awardees of the 2016 Restricted Share Incentive Plan (Revised) 《2016 年限制性股票激励计划（修
订稿）》) had resigned, been dismissed or failed in their individual performance appraisals of 2020, among others,
the Company repurchased and cancelled a total of 49,690 restricted shares that had been granted to the said
awardees but failed to meet the unlocking conditions. On 17 June 2021, the Company completed the repurchase
and cancellation of the said restricted shares. As such, the Company’s total shares decreased by 49,690 shares.
3. Restricted shares were unlocked under the restricted share incentive plan: On 7 May 2021, as the unlocking
conditions had been satisfied for the fourth unlocking period of the first grant and for the third unlocking period of
the reserve grant under the 2016 Restricted Share Incentive Plan (Revised) (《2016 年限制性股票激励计划（修
订稿）》), a total of 12,139,400 restricted shares were unlocked, including 10,690,680 restricted shares in the first
grant and 1,448,720 restricted shares in the reserve grant.
4. Shares of senior management that were in lockup increased by 809,860 shares during the reporting period.
After all the changes above, the Company’s total shares have changed from 1,661,210,751 shares to
1,661,161,061 shares.
Approval of share changes:
√ Applicable □ Not applicable
On 17 April 2021, the Company convened the 18th Meeting of the Fifth Board of Directors and the 2021 Annual
General Meeting to consider and approve the Proposal Regarding Repurchase of Certain Restricted Shares for
Cancellation (《关于回购注销部分限制性股票的议案》). Due to the resignation, failure to pass the 2020
individual performance appraisal, etc. of 7 awardees in the first grant of restricted shares and 2 awardees in the
reserve grant, the Company was agreed to repurchase and cancel 34,290 restricted shares in the first grant and
15,400 restricted shares in the reserve grant that had been granted to the aforesaid awardees but had not yet
reached the unlocking conditions.
Transfer of share ownership:
□ Applicable √ Not applicable
Effects of share changes on the basic earnings per share, diluted earnings per share, equity per share attributable to
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the ordinary shareholders of the parent company and other financial indicators of the prior year and the prior
period, respectively:
□ Applicable √ Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable √ Not applicable
2. Change in Restricted Shares
√ Applicable □ Not applicable
Unit: share
Opening Increased in Unlocked in Closing restricted Reason for Date of
Shareholder
restricted shares Reporting Period Reporting Period shares lockup unlocking
Restricted shares
Certain directors
and shares of
and senior
3,023,447 809,860 798,760 3,034,547 senior N/A
management of the
management that
Company
were in lockup
Other restricted
share awardees
11,390,330 11,390,330 - Restricted shares 7 May 2021
than senior
management
Total 14,413,777 809,860 12,189,090 3,034,547 -- --
II. Issuance and Listing of Securities
1. Securities (Exclusive of Preferred Shares) issued in the reporting period
□ Applicable √ Not applicable
2. Change in Total Shares, Shareholder Structure and Asset and Liability Structures
√ Applicable □ Not applicable
As certain awardees of the 2016 Restricted Share Incentive Plan (Revised) (《2016 年限制性股票激励计划（修
订稿）》) had resigned, been dismissed or failed in their individual performance appraisals of 2020, among others,
the Company repurchased and cancelled a total of 49,690 restricted shares that had been granted to the said
awardees but failed to meet the unlocking conditions. On 17 June 2021, the Company completed the repurchase
and cancellation of the said restricted shares. As such, the Company’s total shares decreased by 49,690 shares.
The above changes in the Company’s total shares did not result in the change of the Company’s actual controller.
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3. Existing Staff-Held Shares
□ Applicable √ Not applicable
III. Shareholders and Actual Controller
1. Shareholders and Their Shareholdings at the Period-End
Unit: share
Preferred
Ordinary shareholders
Preferred
shareholders at with resumed
Ordinary shareholders with
the month-end voting rights at
shareholders at 19,898 22,047 resumed voting 0 0
prior to the the month-end
the period-end rights at the
disclosure of this prior to the
period-end (if any)
Report disclosure of this
Report (if any)
5% or greater shareholders or top 10 shareholders
Sharehold Pledged, marked or frozen
ing Change shares
Nature of
percentag during Restricte Non-restricted
Name of shareholder sharehold Shares
e at Reporting d shares shares
er Status Shares
period-en Period
d (%)
Domestic
non-state-o
Guangzhou Haihao Investment
wned 54.04% 897,627,559 2,038,200 897,627,559 Pledged 51,235,000
Co., Ltd.
juridical
person
Foreign
Hong Kong Securities Clearing
juridical 4.20% 69,756,544 24,290,137 69,756,544
Company Ltd.
person
Industrial and Commercial
Bank of China－Invesco Great
Other 2.59% 42,999,933 14,000,676 42,999,933
Wall Newly Growth Mixed
Securities Investment Fund
Foreign
Norges Bank – Proprietary
juridical 1.08% 17,996,681 -1,925,425 17,996,681
Fund
person
Bank of China－Invesco Great
Wall Dingyi Mixed Securities Other 0.96% 15,999,899 3,999,955 15,999,899
Investment Fund (LOF)
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Industrial and Commercial
Bank of China－
Dongfanghong Qiheng Other 0.81% 13,489,252 13,489,252 13,489,252
Three-year Mixed Securities
Investment Fund
National Social Security Fund
Other 0.51% 8,529,088 -1,376,487 8,529,088
Portfolio 104
Foreign
Abu Dhabi Investment
juridical 0.51% 8,481,214 -444,301 8,481,214
Authority
person
Rosefinch Fund－Shaanxi Coal
Industry Company Limited－
Shaanxi Coal Rosefinch New Other 0.50% 8,287,633 3,712,348 8,287,633
Economy Single Asset
Management Plan
Foreign
Monetary Authority of Macao
juridical 0.46% 7,717,608 -3,816,334 7,717,608
－Proprietary Fund
person
Strategic investor or general juridical
person becoming top-10 shareholder
N/A
due to placing of new shares (if any)
(see note 3)
Among the top 10 shareholders above, the first shareholder is the controlling shareholder of
the Company, which is neither a related party nor an acting-in-concert party to the other
Related or acting-in-concert parties
shareholders. It is unknown whether there is, among the other shareholders, any
among shareholders above
acting-in-concert party as defined in the Administrative Measures On Acquisition Of Listed
Companies (《上市公司收购管理办法》) or any related party.
Explain if any of the shareholders
above was involved in
N/A
entrusting/being entrusted with voting
rights or waiving voting rights
Special securities account for At the end of the reporting period, the balance of the special securities account for
repurchased shares among the top 10 repurchased shares of Guangdong Haid Group Co., Limited was 10,272,100 shares, which
shareholders (if any) (see note 10) was not among the top 10 shareholders.
Top 10 non-restricted shareholders
Type of shares
Name of shareholder Non-restricted shares held at period-end
Type Shares
RMB
Guangzhou Haihao Investment Co.,
897,627,559 ordinary 897,627,559
Ltd.
stock
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RMB
Hong Kong Securities Clearing
69,756,544 ordinary 69,756,544
Company Ltd.
stock
Industrial and Commercial Bank of
RMB
China－Invesco Great Wall Newly
42,999,933 ordinary 42,999,933
Growth Mixed Securities Investment
stock
Fund
RMB
Norges Bank – Proprietary Fund 17,996,681 ordinary 17,996,681
stock
Bank of China－Invesco Great Wall RMB
Dingyi Mixed Securities Investment 15,999,899 ordinary 15,999,899
Fund (LOF) stock
Industrial and Commercial Bank of
RMB
China－Dongfanghong Qiheng
13,489,252 ordinary 13,489,252
Three-year Mixed Securities
stock
Investment Fund
RMB
National Social Security Fund
8,529,088 ordinary 8,529,088
Portfolio 104
stock
RMB
Abu Dhabi Investment Authority 8,481,214 ordinary 8,481,214
stock
Rosefinch Fund－Shaanxi Coal
RMB
Industry Company Limited－Shaanxi
8,287,633 ordinary 8,287,633
Coal Rosefinch New Economy Single
stock
Asset Management Plan
RMB
Monetary Authority of Macao－
7,717,608 ordinary 7,717,608
Proprietary Fund
stock
Related or acting-in-concert parties
Among the top 10 shareholders above, the first shareholder is the controlling shareholder of
among top 10 non-restricted ordinary
the Company, which is neither a related party nor an acting-in-concert party to the other
shareholders, as well as between top
shareholders. It is unknown whether there is, among the other shareholders, any
10 non-restricted ordinary
acting-in-concert party as defined in the Measures for Administration of Takeover of Listed
shareholders and top 10 ordinary
Companies (《上市公司收购管理办法》) or any related party.
shareholders
As at the end of the reporting period, the Company’s controlling shareholder Guangzhou
Top 10 ordinary shareholders Haihao Investment Co., Ltd. held 34,000,000 shares in the Company in its client account of
conducting securities margin trading collateral securities for margin trading; and it took back 2,038,200 shares (not a
(if any) (see note 4) shareholding increase as ownership of these shares had not been transferred) in its
refinancing business. Except for that, other shareholders of the top 10 ordinary shareholders
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were not engaged in margin trading.
Note: At the end of the reporting period, the balance of the special securities account for repurchased shares of Guangdong Haid
Group Co., Limited was 10,272,100 shares, which was not among the top 10 non-restricted shareholders.
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 non-restricted ordinary shareholders of the
Company conducted any promissory repo during the Reporting Period.
□ Yea √ No
No such cases in the Reporting Period.
2. Controlling Shareholder
Nature of controlling shareholder: Controlled by a natural person
Type of controlling shareholder: Juridical person
Legal
Name of controlling representative/ Date of Unified social credit
Main business scope
shareholder person in establishment code
charge
Investment with self-owned capital;
wholesale of commodities (excluding
commodities that require a permit or
approval document to trade); retail sales of
Guangzhou Haihao commodities (excluding commodities that
Hua Xue 27 September 2006 91440113793877530G
Investment Co., Ltd. require a permit or approval document to
trade); import and export of commodities
(excluding commodities restricted to specific
parties); and import and export of
technologies
Shareholdings of the
controlling
shareholder in other
controlled or
N/A
non-controlled listed
companies at home or
abroad during the
Reporting Period
Change of the controlling shareholder during the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Actual Controller
Nature of actual controller: Domestic natural person
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Type of actual controller: Natural person
Relationship with actual Right of residence in other
Name of actual controller Nationality
controller countries or regions
Hua Xue Himself Chinese None
Main office titles Chairman of the Board, and President (General Manager)
Used-to-be-holding listed
companies at home and abroad N/A
in past 10 years
Change of the actual controller during the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Ownership and control relations between the actual controller and the Company:
Hua Xue
39.75%
Guangzhou Haihao Investment Co., Ltd.
54.04%
Guangdong Haid Group Co., Limited
Indicate by tick mark whether the actual controller controls the Company via trust or other ways of asset management.
□ Applicable √ Not applicable
4. Indicate whether the cumulative shares of the controlling shareholder or the largest shareholder and
their acting-in-concert parties that are in pledge account for 80% or greater of their shareholdings in the
Company.
□ Applicable √ Not applicable
5. Other 10% or Greater Juridical-Person Shareholders
□ Applicable √ Not applicable
6. Holdings of the Company’s Controlling Shareholder, Actual Controller, Reorganizer and Other
Commitment Makers under Restricted Sales Condition
□ Applicable √ Not applicable
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IV. Share Repurchases during the Reporting Period
Implementation progress of any share repurchase:
√ Applicable □ Not applicable
Shares
repurchased as
As a a percentage of
Disclosure date Number of Number of
percentage of Amount to be Repurchase the total target
of the share shares to be Purpose shares
the total share used period number of the
repurchase plan repurchased repurchased
capital equity
incentive plan
(if any)
Within 12
For use in
No less than months starting
equity
RMB 400 from the
4,444,444 to incentive plans
26 October 0.27% to million and no approval of the
8,888,888 and/or 11,466,690
2020 0.54% more than share
shares employee stock
RMB 800 repurchase plan
ownership
million by the Board of
plans
Directors
Note: On 26 October 2020, the Proposal on the Plan for Share Repurchase (《关于回购公司股份方案的议案》) was reviewed and
approved by the Board of Directors. As such, the Company intended to repurchase shares with no less than RMB 300 million and no
more than RMB 600 million. On 4 March 2020, the Proposal on Adjusting the Plan for Share Repurchase (《关于调整回购股份方案
的议案》) was reviewed and approved by the Board of Directors. The amount to be used for the share repurchase program was
adjusted from “no less than RMB 300 million and no more than RMB 600 million” to “no less than RMB 400 million and no more
than RMB 800 million”.
Implementation progress of any reduction of the repurchased shares through centralized bidding:
□ Applicable √ Not applicable
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Section VIII. Preferred Shares
□ Applicable √ Not applicable
No preferred shares in the reporting period.
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Section IX. Bonds
√ Applicable □ Not applicable
I. Enterprise Bonds
□ Applicable √ Not applicable
No enterprise bonds in the reporting period.
II. Corporate Bonds
□ Applicable √ Not applicable
No corporate bonds in the reporting period.
III. Debt Instruments as a Non-financial Enterprise
√ Applicable □ Not applicable
1. General Information on Debt Instruments as a Non-Financial Enterprise
Unit: RMB
Way of
Name of Code of principal
Date of Outstanding Place of
debt Abbr. debt Value date Maturity Interest rate repayment
issuance balance trading
instrument instrument and interest
payment
The First
Tranche of
Super
Short-term
Commercial
Papers of 22 Haid Principal
2022 of SCP001BC 21 and interest Inter-bank
23 March 25 March 400,000,000
Guangdong (Rural 012281164 September 3.18% repayable in bond
2022 2022 .00
Haid Group Revitalizati 2022 full upon market
Co., on) maturity
Limited
(Rural
Revitalizati
on, Bond
Connect)
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Investor eligibility arrangements (if
N/A
any)
Trading system applicable The trading system of the inter-bank bond market
Risk of termination of listing and
N/A
trading (if any) and countermeasures
Overdue debt instruments:
□ Applicable √ Not applicable
2. Triggering and Execution of Issuer or Investor Option Clauses and Investor Protection Clauses
√ Applicable □ Not applicable
In the duration of “22 Haid SCP001BC (Rural Revitalization)”, the Company shall make sure that in its
consolidated financial statements, the financial indicators at the end of each year shall meet the following
condition: the outstanding balance of the debt instrument shall account for no more than 40% of the total liabilities
of the latest year.
If the Company fails to meet any of the aforesaid financial indicators, the protection mechanism as agreed will be
triggered.
The Company did not trigger the aforesaid protection mechanism during the reporting period.
3. Intermediary Agencies
Accountant writing
Bond name Intermediary agency Office address Contact person Tel.
signatures
Tower 1, Courtyard
22 Haid SCP001BC
China CITIC Bank 10, Longhua Road,
(Rural N/A Xiangzhe Shen 010-66635910
Corporation Limited Chaoyang District,
Revitalization)
Beijing
22 Haid SCP001BC 1 Fuxingmennei
Bank of China
(Rural Avenue, Xicheng N/A Su Xu 010-66595011
Limited
Revitalization) District, Beijing
6/10/11/16/17F, Two
22 Haid SCP001BC Beijing Zhong Lun
IFC, 8 Century
(Rural (Shanghai) Law N/A Qin Hu 021-60613666
Avenue, Pudong
Revitalization) Firm
New Area, Shanghai
5th Floor, Scitech
22 Haid SCP001BC Grant Thornton Palace 22
Guan Wenyuan and
(Rural China (Special Jianguomen Wai Wenyuan Guan 010-85665858
Zhang Shuxia
Revitalization) General Partnership) Avenue, Chaoyang
District, Beijing
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Change of the agencies in the table above during the Reporting Period:
□ Yes √ No
4. Use of Raised Funds
Unit: RMB
In compliance
Status of the Rectification for with the purpose,
Total amount special account any irregularity use plan and
Bond name Amount used Amount unused
raised for raised funds (if any) in the use other information
(if any) of raised funds stated in the
prospectus
22 Haid
SCP001BC
400,000,000.00 400,000,000.00 0.00 N/A N/A Yes
(Rural
Revitalization)
Use of raised funds in construction projects:
□ Applicable √ Not applicable
Indicate whether the raised funds were re-purposed during the reporting period:
□ Applicable √ Not applicable
5. Changes in Credit Ratings in the Reporting Period
□ Applicable √ Not applicable
6. Execution and Changes with respect to Guarantees, Repayment Plans and Other Repayment-Ensuring
Measures in the Reporting Period, as well as the Impact on the Interests Of Debt Instrument Holders
□ Applicable √ Not applicable
IV. Convertible Corporate Bonds
□ Applicable √ Not applicable
No convertible corporate bonds in the reporting period.
V. Consolidated Loss of the Reporting Period Accounting for Over 10% of Net Assets as at
the End of Last Year
□ Applicable √ Not applicable
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VI. Interest-bearing Liabilities Other than Bonds that Were Overdue at the End of the
Reporting Period
□ Applicable √ Not applicable
VII. Irregularities during the Reporting Period
□ Yes √ No
VIII. Key Financial Information of the Company in the Past Two Years
Unit: RMB’0,000
Item 31 December 2021 31 December 2020 Change
Current ratio 1.24 1.31 -5.34%
Debt/asset ratio 55.30% 45.66% 9.64%
Quick ratio 0.55 0.65 -15.38%
2021 2020 Change
Net profit after deducting the
153,473.8 245,958.8 -37.60%
non-recurring gain or loss
EBITDA/debt ratio 39.97% 71.26% -31.29%
Interest cover (times) 7.24 13.92 -47.99%
Cash-to-interest cover (times) 7.96 2.05 288.29%
EBITDA-to-interest cover
10.94 17.47 -37.38%
(times)
Debt repayment ratio (%) 100.00% 100.00% 0.00%
Interest payment ratio (%) 100.00% 100.00% 0.00%
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Section X. Financial Statements
Independent Auditors Report
Audit Opinion Unmodified unqualified audit opinion
Audit Report Sign-off Date April 10th, 2022
Audit Institution Name Grant Thornton China (Special General Partnership)
Audit Report Number GTCNSZ (2022) NO. 440A008865
Name of Certified Public Accountant Wenyuan Guan, Shuxia Zhang
To the Shareholders of Guangdong Haid Group Co., Limited,
I. Opinion
We have audited the financial statements of Guangdong Haid Group Co., Limited (the “Company”), which
comprise the consolidated balance sheet as at December 31, 2021, and the consolidated income statement,
consolidated statement of changes in shareholders’ equity and consolidated statement of cash flows for the year
then ended, and the notes to the consolidated financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated and
the Company’s financial position as at December 31, 2021, and the consolidated and the Company’s financial
performance and cash flows for the year then ended in accordance with Accounting Standards for Business
Enterprises.
II. Basis for Opinion
We conducted our audit in accordance with China Standards on Auditing. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statement section of
our report. We are independent of the Company in accordance with the Code of Ethics for Chinese Certified
Public Accountant (the “Ethics Code”) together with the ethical requirements that are relevant to our audit of the
financial statements, and we fulfilled our other ethical responsibilities in accordance with these requirements and
the Ethics Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
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III. Key audit matters
The key audit matters are those matters that, in our professional judgment, are of most significance in our audit of
the financial statements of the current period. These matters are addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
(I) Revenue Recognition
Please refer to Note III. 29 and Note V. 49 in the Notes to the Financial Statements for the disclosure of revenue
recognition.
1. Description
Haid Group is mainly engaged in feed production and sales. In 2021, the Company’s operating revenue was
RMB85,998.56 million. We identified revenue recognition as a key audit matter because operating revenue is one
of the Company’s key performance indicators, there is an inherent risk that management may manipulating the
timing of revenue recognition to achieve specific goals or expectations.
2. How Our Audit Addressed the Key Audit Matter
(1) We understood and evaluated the design effectiveness of internal controls related to revenue recognition. We
tested the operation effectiveness of key internal controls.
(2) We carried out a spot check on significant sales contracts to analyze whether the identification of
performance obligations, the allocation of transaction prices and the determination on when the transfer of control
of the related goods or services are in line with the business model of the Company and complied with the
accounting standards for business enterprises;
(3) We performed analytical procedures to access the reasonableness of changes in revenue and gross margin;
examined the monthly average sales price of the Company’s major products, and compared it with the data in the
prior period;
(4) We obtained the archival information of the new significant customers, searched their relevant information
through public channels and conducted assessment on whether they were related parties of the Company.
(5) To test the authenticity and completeness of revenue, we inspected the supporting documents related to
revenue recognition, including extracting sales statements to review the related sales contracts, delivery notes,
bills of lading, weighing notes, bank receipts, and monthly customer sales statements. We verified and analyzed
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the sales data in the Company’s logistics system and financial system.
(6) To evaluate the accuracy and completeness of revenue, we performed confirmation procedures on revenue.
(7) We performed revenue cut-off testing as of the balance sheet date in conjunction with inventory observation
procedures to evaluate whether revenue was recognized in the appropriate period.
(II) Expected Credit Losses on Accounts Receivable
Please refer to Note III. 10 (6) and Note V. 4 in the Notes to the Financial Statements for the disclosure of
expected credit losses on accounts receivable.
1. Description
As of December 31, 2021, the balance of the Company’s accounts receivable was RMB1,293.33 million,
including provision of bad and doubtful debts of RMB192.71 million. The Company’s management assessed the
expected credit losses on accounts receivable individually and collectively based on the consideration of past
events, current situations and predictions of future economic conditions. Except for accounts receivable with
provision of bad and doubtful debts made individually, the management classified the accounts receivable into
corresponding portfolios based on similar credit risk characteristics. For accounts receivable classified into
portfolios, the management prepared comparison table of the accounts receivable aging and expected credit loss
rate based on the historical credit losses in conjunction with the current situation and predictions of future
economic conditions, and calculated the expected credit losses.
We identified expected credit losses on accounts receivable as a key audit matter because the Company involved
significant accounting estimate and judgment in making the expected credit losses on accounts receivable, and the
impact was significant.
2. How Our Audit Addressed the Key Audit Matter
1) We understood and evaluated the design effectiveness of internal controls related to expected credit losses on
accounts receivable. We tested the operation effectiveness of key internal controls.
2) For accounts receivable that measure expected credit losses based on portfolio of credit risk characteristics, we
evaluated the appropriateness of portfolio classification, reviewed the appropriateness of the historical losses rate
and prospective adjustment calculated based on the migration rate model, reviewed if the expected credit losses
was adequate.
3) We selected samples based on the distribution of accounts receivable as at balance sheet date and the revenue in
the current year to perform confirmation procedure on accounts receivable. We compared the confirmation result
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against the Company’s book records.
4) For accounts receivables with significant balance as at balance sheet date or long aged, we selected samples to
examine customers’ operation situation, historical payment records and subsequent payments after the balance
sheet date.
(III) Inventory Provision
Please refer to Note III. 12 and Note V.7 in the Notes to the Financial Statements for disclosure of inventory
provision.
1. Description
As of December 31, 2021, the balance of the Company’s inventory was RMB8,922.90 million, which accounted
for 25.03% of the total assets, with an inventory provision of RMB29.01 million. The Company measured its
inventories at the lower of cost and net realizable value. Net realizable value is the estimated selling price less the
estimated costs to completion, estimated selling expenses and relevant tax expenses. The Company used the
conclusive evidence obtained as the basis, in conjunction with the consideration of the purpose of holding the
inventories and the impact of subsequent events after the balance sheet date to determine the net realizable value.
We identified inventory provision as a key audit matter because the inventory balance was significant as at
December 31, 2021 and it involved management’s significant judgment in determining the net realizable value.
2. How Our Audit Addressed the Key Audit Matter
1) We understood, evaluated and tested the design and operation effectiveness of internal controls related to
inventory.
2) We performed inventory observation procedures to inspect the inventory quantity and condition.
3) We obtained the inventory provision calculation schedule, tested for inventory provision and analyzed if the
inventory provision was adequate.
4) We obtained the inventory list as at December 31, 2021. We performed analytical review on inventories with
long aging in conjunction with the inventory condition and evaluated the appropriateness of inventory provision.
5) For inventory provision accrued in prior year, we inspected its movement in the current period.
6) For products with available open market price, we selected samples to perform independent research and
compared the open market price with the Company’s estimated sales price. For products without available open
market price, we compared the Company’s estimated sales price against their latest actual sales price or actual
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sales price in the subsequent period or actual sales price of similar products, to evaluate if the inventory provision
was adequate.
IV. Other Information
The Company’s management is responsible for the other information. The other information comprises all of the
information included in the Company’s 2021 Annual Report other than the financial statements and our auditor’s
report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
V. Responsibilities of Management and Those Charged with Governance for Financial
Statements
The Company’s management is responsible for the preparation of the financial statements that give a fair view in
accordance with the Accounting Standards for Business Enterprises, and for designing, implementing and
maintaining such internal control as the management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the management either intends to liquidate the Company or to cease operations,
or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
Auditor’s Responsibilities for Audit of Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
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Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with China Standards on Auditing will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with CAS, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by the management.
(4) Concluded on the appropriateness of the management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Company’s ability to continue as a going concern. If we concluded that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date of our auditor’s report. However, further events or conditions may
cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial
statements represent the underlying transactions and events in a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express an opinion on the financial statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicated with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
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identified during our audit.
We also provided those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and communicated with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that are of most
significance in the audit of the financial statements of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our
report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
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Consolidated and Company Balance Sheet
As at December 31, 2021
Prepared by: Guangdong Haid Group Co., Limited
Expressed in RMB
Item Note As at 31/12/2021 As at 31/12/2020
V Consolidated Company Consolidated Company
Current assets:
Cash at bank and 1 2,056,471,632.75
on hand 1,739,655,125.14 608,829,404.62 699,532,802.68
Held-for-trading 2 336,719,309.28
financial assets 2,507,784.13 - 263,640,850.00
Notes receivable 3 17,833,751.84
9,902,395.11 - -
Accounts 4 1,067,301,941.46
receivable 1,293,328,829.38 17,219.37 -
Accounts
receivable - - - -
financing
Prepayments 5 1,870,808,733.28
2,550,853,738.02 1,177,163.76 1,819,630.87
Other receivables 6 13,207,220,849.29 732,315,186.36
780,025,770.40 10,705,830,242.22
Including:
Interest - - 2,807.70 -
receivables
Dividend 900,009.00 900,009.00 - -
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receivables
Inventories 7 7,255,350,539.93
8,922,903,666.78 46,967,892.60 84,736,207.88
Contract assets
- - - -
Assets
held-for-sale - - - -
Non-current assets 8
due within one 9,645,605.89 - 2,457,622.86 -
year
Other current 9 925,208,486.45
assets 794,339,839.32 15,832,844.29 8,795,911.92
Total 16,103,162,754.17 13,880,045,373.93 14,264,467,204.21
current assets 11,764,355,645.57
Non-current
assets:
Debt investments 10 22,501,033.35
14,501,072.58 - -
Loans and 11 31,418,327.11
advances to 4,397,461.24 - -
customers
Other debt
investments - - - -
Long-term 12 97,462,501.79
receivables 86,932,591.35 2,494,068.21 907,302.50
Long-term equity 13 59,465,879.68
investments 301,076,512.33 6,331,184,148.05 4,452,434,939.93
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Investments in
other equity - - - -
instruments
Other non-current 14 254,417,562.64
financial assets 286,569,300.55 255,147,950.55 222,596,212.64
Investment 15 29,426,486.24
properties 26,941,013.33 18,516,515.82 20,565,176.04
Fixed assets 16 11,271,964,642.07 7,703,538,937.81
270,269,433.52 239,611,327.76
Construction in 17 1,591,741,924.42
progress 1,531,493,842.31 21,971,207.85 16,372,133.08
Productive 18 286,202,211.97
biological assets 508,486,715.64 - -
Oil and natural
gas assets - - - -
Right-of-use 19
assets 2,331,346,912.43 75,059,956.05
Intangible assets 20 1,257,221,361.76
1,490,419,035.61 112,961,029.65 118,046,787.57
Development 21 13,567,349.13
costs 5,953,762.00 - -
Goodwill 22 342,738,904.21
364,614,702.18 - -
Long-term 23 352,075,183.20
deferred expenses 134,993,772.59 31,863,128.22 28,770,769.63
Deferred tax 24 847,086,216.97
assets 734,900,665.63 243,534,161.40 398,251,653.53
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Other non-current 25 373,627,286.70
assets 450,825,044.08 26,973,605.46 2,695,741.00
Total 19,545,417,045.92 13,262,491,166.98
non-current 7,389,975,204.78 5,500,252,043.68
assets
Total 35,648,579,800.09 21,270,020,578.71 27,526,958,371.19
assets 17,264,607,689.25
Current liabilities:
Short-term 26 4,735,948,585.16
loans 3,782,336,144.35 2,569,087,753.67 4,169,670,770.39
Held-for-trad 27 127,446,229.19
ing financial 44,174,431.17 38,923,761.17 1,046,249.19
liabilities
Notes 28
payable 407,090,978.58 696,404,396.50 - -
Accounts 29 2,060,550,537.54
payable 4,051,704,338.04 41,622,240.49 38,737,771.88
Advances 30
from customers 69,917.84 - - -
Contract 31 1,889,338,880.88
liabilities 1,908,259,980.27 - -
Employee 32 925,893,314.96
benefits payable 1,212,811,083.04 189,613,686.92 150,890,070.01
Taxes 33 196,208,088.61
payable 241,421,008.19 480,338.96 1,013,415.11
Other 34 456,555,079.92
payables 427,912,490.76 6,922,399,128.52 2,976,129,435.19
Including: Interest - - - -
payables
Dividend payables 21,827,574.34 - 2,591,473.50 -
Liabilities
held-for-sale - - - -
Non-current 35 142,405,690.99
liabilities due 563,923,844.74 216,252,005.11 39,999,252.87
within one year
Other current 36 314,566,716.35
liabilities 398,722,254.96 21,269,289.31 17,907,456.12
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13,038,426,471.94 10,696,052,600.65 10,848,913,123.60
Total current 7,395,394,420.76
liabilities
Non-current
liabilities:
Long-term 37 1,161,404,700.00
loans 4,411,107,883.25 565,000,000.00 -
Debentures
payable - - - -
Lease 38
liability 1,578,746,388.19 51,426,577.63 -
Long-term 39 36,320,489.48
payables 53,886,898.67 - -
Long-term 40 144,890,945.29
employee benefits 168,352,908.90 19,633,044.09 23,032,749.25
payable
Provisions
- - - -
Deferred 41 202,333,450.44
income 286,411,601.04 10,174,804.63 11,016,146.26
Deferred tax 24 174,403,701.02
liabilities 178,262,911.66 14,158,114.77 10,829,462.30
Other
non-current - - - -
liabilities
Total 1,719,353,286.23
non-current 6,676,768,591.71 660,392,541.12 44,878,357.81
liabilities
19,715,195,063.65 11,356,445,141.77 12,568,266,409.83
Total liabilities 7,440,272,778.57
Share capital 42 1,661,210,751.00
1,661,161,061.00 1,661,161,061.00 1,661,210,751.00
Other equity
instruments - - - -
Including: - - - -
Preference share
Perpetual debt - - - -
Capital 43 5,041,921,064.80
reserve 5,127,738,338.63 5,307,476,327.94 5,136,265,883.82
Less: 44 165,350,332.65
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Treasury stock 792,321,152.16 792,321,152.16 165,350,332.65
Other 45 -106,486,348.07
comprehensive -144,698,175.60 - -
income
Specific
reserve - - - -
Surplus 46 638,662,900.40
reserve 745,996,406.06 745,996,406.06 638,662,900.40
General risk 47
provision 9,005,028.55 - 7,814,011.67 -
Retained 48 6,895,016,817.26
earnings 7,854,254,002.84 2,991,262,794.10 2,553,545,708.11
Total equity 14,461,135,509.32 13,972,788,864.41
attributable to 9,913,575,436.94 9,824,334,910.68
shareholders of
the parent
company
Non-controlli 985,903,096.95
ng interests 1,472,249,227.12 - -
Total 15,933,384,736.44 14,958,691,961.36
shareholders' 9,913,575,436.94 9,824,334,910.68
equity
Total liabilities 35,648,579,800.09 21,270,020,578.71 27,526,958,371.19
and 17,264,607,689.25
shareholders'
equity
Legal representative: Hua Xue Person in charge of accounting function: Shaolin Yang
Person in charge of accounting department: Shaolin Yang
Consolidated and Company Income Statement
For the year ended December 31, 2021
Prepared by: Guangdong Haid Group Co., Limited
Expressed in RMB
Item Note 2021 2020
V Consolidated Company Consolidated Company
I. Operating income 49 85,998,559,748.78
2,024,047,232.85 60,323,862,405.94 1,259,053,597.66
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Less: Operating costs 49 78,698,777,631.10
866,481,873.15 53,291,779,659.43 605,645,251.12
50
Taxes and surcharges 103,114,300.28 2,863,641.90 68,867,125.96 3,547,468.19
51
Selling and distribution 1,808,249,264.31 - 1,342,844,756.41 5,140,366.51
expenses
52
General and 2,228,521,838.59 530,685,944.80 1,558,972,459.50 370,336,332.69
administrative expenses
53
Research and 652,995,298.85 204,111,930.64 479,306,685.65 176,021,384.05
development expenses
54
Financial expenses 402,888,653.32 131,344,861.78 236,239,259.96 106,253,737.27
Including: Interest 319,824,182.96 221,337,729.86 226,613,261.69 199,329,480.27
expenses
Interest income 29,932,608.81 114,907,837.95 27,826,287.56 109,576,830.47
Add: Other income 55
90,871,598.32 11,384,679.18 101,912,587.05 23,045,148.97
56
Investment income ("-" 384,851,154.17 833,556,750.22 2,075,166.49 67,117,893.44
for losses)
Including: Income from -1,557,102.23 219,125.44 -2,612,715.19 1,265,025.86
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investment in associates
and joint ventures
Income from - - - -
derecognition of
financial assets
measured at amortized
cost ("-" for losses)
Net
exposure hedge income - - - -
("-" for losses)
Gains 57
from changes in fair 47,106,002.17 -2,669,641.98 -11,980,259.31 9,546,233.81
value ("-" for losses)
Credit 58
losses ("-" for losses) -87,397,171.55 1,584,131.30 -43,414,958.12 -1,057,645.44
59
Impairment losses ("-" -72,194,585.99 - -56,901,585.79 -
for losses)
Gains 60
from assets disposal ("-" 647,470.97 943.99 9,248,271.38 -37,061.08
for losses)
II. Operating profit
("-" for losses) 2,467,897,230.42 1,132,415,843.29 3,346,791,680.73 90,723,627.53
Add: Non-operating 61
income 42,373,960.51 713,166.80 24,320,115.25 91,722.27
Less: Non-operating 62
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expenses 48,501,004.55 4,541,364.44 86,797,071.05 46,860,743.13
III. Profit before
income tax ("-" for 2,461,770,186.38 1,128,587,645.65 3,284,314,724.93 43,954,606.67
losses)
Less: Income tax 63
expenses 650,679,589.05 55,252,589.04 434,503,577.10 1,403,639.76
IV. Net profit for the
year ("-" for losses) 1,811,090,597.33 1,073,335,056.61 2,849,811,147.83 42,550,966.91
(I) Classification
according to operation
continuity
Including: Net
profit from continuing 1,811,090,597.33 1,073,335,056.61 2,849,811,147.83 42,550,966.91
operations ("-" for net
loss)
Net profit from - - - -
discontinued operations
("-" for net loss)
(II) Attributable
to:
Including:
Shareholders of the 1,596,046,173.08 1,073,335,056.61 2,522,730,419.35 42,550,966.91
parent company ("-" for
net loss)
Non-controlling
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interests ("-" for net 215,044,424.25 - 327,080,728.48 -
loss)
V. Other
comprehensive income, -37,081,918.64 - -111,562,601.99 -
net of tax
Other
comprehensive income -38,211,827.53 - -111,778,611.97 -
(net of tax) attributable
to shareholders of the
parent company
(I) Items that
will not be reclassified - - - -
to profit or loss
(II) Items that
may be reclassified to -38,211,827.53 - -111,778,611.97 -
profit or loss
1.
Translation differences -38,211,827.53 - -111,778,611.97 -
arising from translation
of foreign currency
financial statements
Other
comprehensive income 1,129,908.89 - 216,009.98 -
(net of tax) attributable
to non-controlling
interests
VI. Total
comprehensive income 1,774,008,678.69 1,073,335,056.61 2,738,248,545.84 42,550,966.91
185
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
for the year
Attributable to
shareholders of the 1,557,834,345.55 1,073,335,056.61 2,410,951,807.38 42,550,966.91
parent company
Attributable to
non-controlling interests 216,174,333.14 - 327,296,738.46 -
VII. Earnings per
share
1. Basic earnings per
share 0.96 1.60
2. Diluted earnings
per share 0.96 1.60
Legal representative: Hua Xue Person in charge of accounting function: Shaolin Yang
Person in charge of accounting department: Shaolin Yang
Consolidated and Company Cash Flow Statement
For the year ended December 31, 2021
Prepared by: Guangdong Haid Group Co., Limited
Expressed in RMB
Item Note 2021 2020
V Consolidated Company Consolidated Company
I. Cash flows from
operating activities
Cash received from 87,156,308,826.61
sales of goods and 64,099,598.56 61,960,961,513.04 20,873,482.39
rendering of services
Cash received from
186
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interest, handling fee 52,398,783.61 - 45,244,949.44 -
and commission
Refund of taxes
28,552,067.44 2,018.26 38,261,655.98 4,284,368.54
Cash received from 64
other operating 1,527,404,114.38 94,344,720,105.45 670,905,727.93 62,409,219,017.91
activities
Sub-total of cash 88,764,663,792.04
inflows from operating 94,408,821,722.27 62,715,373,846.39 62,434,376,868.84
activities
Cash paid for goods and 77,942,873,205.55
services 585,113,729.02 57,120,540,167.98 809,973,824.23
Net increase in loans
and advances to 120,656,045.94 - -14,879,876.33 -
customers
Cash paid to and on
behalf of employees 4,247,371,433.26 503,103,566.29 3,001,611,662.91 383,005,520.39
Taxes payments
842,752,484.72 6,300,961.42 597,257,702.00 10,039,004.17
Cash paid for other 64
operating activities 2,473,062,371.88 89,949,434,656.19 1,525,584,957.80 64,388,722,865.81
Sub-total of cash 85,626,715,541.35
outflows for operating 91,043,952,912.92 62,230,114,614.36 65,591,741,214.60
activities
Net cash flows from
operating activities 3,137,948,250.69 3,364,868,809.35 485,259,232.03 -3,157,364,345.76
II. Cash flows from
187
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investing activities
Cash received from
disposal of investments 3,746,774,708.37 366,348,722.88 3,725,092,243.75 482,597,769.82
Cash received from
investment gains 362,775,819.58 821,023,044.31 285,536,504.66 71,510,549.50
Cash received from
disposal of fixed assets, 15,390,950.11 324,334.20 69,020,919.72 237,045.38
intangible assets and
other long-term assets
Net proceeds from
disposal of subsidiaries - - - -
and other business units
Cash received from 64
other investing 6,555,335.22 - 200,000.00 -
activities
Sub-total of cash
inflows from investing 4,131,496,813.28 1,187,696,101.39 4,079,849,668.13 554,345,364.70
activities
Payment for acquisition
of fixed assets, 4,659,257,785.73 135,919,979.73 3,390,357,467.37 78,357,682.21
intangible assets and
other long-term assets
Payment for acquisition
of investments 3,535,622,590.51 2,157,226,931.75 4,860,043,796.49 1,107,328,066.90
Net payments for
acquisition of 145,778,584.48 - 132,986,317.45 -
subsidiaries and other
188
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business units
Cash paid for other 64
investing activities 14,052,152.04 - 17,008,201.42 -
Sub-total of cash
outflows for investing 8,354,711,112.76 2,293,146,911.48 8,400,395,782.73 1,185,685,749.11
activities
Net cash flows from
investing activities -4,223,214,299.48 -1,105,450,810.09 -4,320,546,114.60 -631,340,384.41
III. Cash flows from
financing activities
Cash received from
investors 418,241,406.00 - 60,493,073.65 -
Including:
Proceeds from 418,241,406.00 - 60,493,073.65 -
non-controlling
shareholders of
subsidiaries
Cash received from 17,029,202,863.80
borrowings 11,530,201,972.64 13,881,524,523.67 11,747,213,296.52
Cash received from 64
other financing 17,566,515.07 5,996,166.86 50,367,369.62 7,530,907.48
activities
Sub-total of cash 17,465,010,784.87
inflows from financing 11,536,198,139.50 13,992,384,966.94 11,754,744,204.00
activities
Repayments of 14,557,113,635.09
borrowings 12,419,698,614.75 8,959,667,200.65 7,283,320,406.16
189
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Payment for dividends,
profit distributions or 941,106,454.09 729,053,571.15 844,897,007.11 714,931,286.78
interests
Including:
Dividends and profits 121,478,678.04 - 77,305,907.82 -
paid to non-controlling
shareholders of
subsidiaries
Cash paid for other 64
financing activities 1,188,124,589.36 720,664,327.03 173,670,001.14 100,419,296.90
Sub-total of cash 16,686,344,678.54
outflows for financing 13,869,416,512.93 9,978,234,208.90 8,098,670,989.84
activities
Net cash flows from
financing activities 778,666,106.33 -2,333,218,373.43 4,014,150,758.04 3,656,073,214.16
IV. Effect of foreign
exchange rate changes -23,178,107.90 -13,655,242.35 7,758,537.18 -4,119,911.66
on cash and cash
equivalents
V. Net increase in cash
and cash equivalents -329,778,050.36 -87,455,616.52 186,622,412.65 -136,751,427.67
Add: Cash and cash
equivalents at the 2,010,888,021.43 691,266,966.09 1,824,265,608.78 828,018,393.76
beginning of the period
VI. Cash and cash
equivalent at the end 1,681,109,971.07 603,811,349.57 2,010,888,021.43 691,266,966.09
of the period
Legal representative: Hua Xue Person in charge of accounting function: Shaolin Yang
190
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Person in charge of accounting department: Shaolin Yang
191
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Consolidated Statement of Changes in Shareholders' Equity
For the year ended December 31, 2021
Prepared by: Guangdong Haid Group Co., Limited
Expressed in RMB
Item Year ended 31/12/2021
Attributable to shareholders' equity of the parent company Non-contr Total
olling sharehold
Share Other equity Capital Less: Other Specific Surplus General Retained
capital instruments reserve Treasury comprehe reserve reserve risk earnings interests ers' equity
stock nsive provision
Prefe Perp Othe
income
rence etual rs
share debt
I. Balance at the
end of last year 1,661,210, - - - 5,041,921, 165,350,33 -106,486,3 - 638,662,90 7,814,011. 6,895,016, 985,903,09 14,958,691
751.00 064.80 2.65 48.07 0.40 67 817.26 6.95 ,961.36
Add: Changes in
accounting policies - - - - - - - - - - - - -
Correction of prior - - - - - - - - - - - - -
period errors
192
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Adjustments for - - - - - - - - - - - - -
business
combinations
involving
enterprises under
common control
Others
- - - - - - - - - - - - -
II. Balance at the
beginning of the 1,661,210, - - - 5,041,921, 165,350,33 -106,486,3 - 638,662,90 7,814,011. 6,895,016, 985,903,09 14,958,691
year 751.00 064.80 2.65 48.07 0.40 67 817.26 6.95 ,961.36
III. Changes in
equity during the -49,690.00 - - - 85,817,273 626,970,81 -38,211,82 - 107,333,50 1,191,016. 959,237,18 486,346,13 974,692,77
year ( "- " for .83 9.51 7.53 5.66 88 5.58 0.17 5.08
decrease)
(I) Total
comprehensive - - - - - - -38,211,82 - - - 1,596,046, 216,174,33 1,774,008,
193
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income 7.53 173.08 3.14 678.69
(II) Shareholders'
contributions and -49,690.00 - - - 181,248,15 626,970,81 - - - - - 410,777,20 -34,995,14
decrease of capital 0.10 9.51 9.68 9.73
1. Contribution by
ordinary -49,690.00 - - - -312,567.2 -362,257.2 - - - - - 418,241,40 418,241,40
shareholders 0 0 6.00 6.00
2. Contribution by
holders of other - - - - - - - - - - - - -
equity instruments
3. Share based
payment included - - - - 262,778,76 -80,958,25 - - - - - 11,540,405 355,277,42
in shareholders' 2.42 9.20 .47 7.09
equity
4. Others
- - - - -81,218,04 708,291,33 - - - - - -19,004,60 -808,513,9
5.12 5.91 1.79 82.82
(III) Appropriation
194
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
of profits - - - - - - - - 107,333,50 1,191,016. -636,808,9 -140,605,4 -668,889,8
5.66 88 87.50 12.65 77.61
1. Appropriation
for surplus reserves - - - - - - - - 107,333,50 - -107,333,5 - -
5.66 05.66
2. Appropriation
for general risk - - - - - - - - - 1,191,016. -1,191,016. - -
provision 88 88
3. Distributions to
shareholders - - - - - - - - - - -528,284,4 -140,605,4 -668,889,8
64.96 12.65 77.61
4. Others
- - - - - - - - - - - - -
(IV) Transfer
within equity - - - - - - - - - - - - -
1. Transfer of
capital reserve to - - - - - - - - - - - - -
share capital
195
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2. Transfer of
surplus reserve to - - - - - - - - - - - - -
share capital
3. Surplus
reserve for making - - - - - - - - - - - - -
up losses
4. Transfer the
changes in defined - - - - - - - - - - - - -
benefit plan into
retained earnings
5. Transfer of other
comprehensive - - - - - - - - - - - - -
income to retained
earning
6. Others
- - - - - - - - - - - - -
(V) Specific
reserve - - - - - - - - - - - - -
196
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1. Appropriation
during the year - - - - - - - - - - - - -
2. Utilization
during the year - - - - - - - - - - - - -
(VI) Others
- - - - -95,430,87 - - - - - - - -95,430,87
6.27 6.27
IV. Balance at the
end of the year 1,661,161, - - - 5,127,738, 792,321,15 -144,698,1 - 745,996,40 9,005,028. 7,854,254, 1,472,249, 15,933,384
061.00 338.63 2.16 75.60 6.06 55 002.84 227.12 ,736.44
Item Year ended 31/12/2020
Attributable to shareholders' equity of the parent company Non-control Total
Other equity instruments ling shareholders
Share Capital Less: Other Specif Surplus General Retained
interests ' equity
capital reserve Treasury comprehen ic reserve risk earnings
Prefere Perpet Othe
nce ual rs stock sive income reser provision
share debt ve
197
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
I. Balance
1,580,357,49 - - - 2,118,792,10 172,540,56 5,292,263.9 - 634,407,80 - 4,937,480,62 638,200,576 9,741,990,30
at the end 4.00 6.43 6.20 0 3.71 9.17 .75 7.76
of last
year
Add:
- - - - - - - - - - - - -
Changes in
accounting
policies
- - - - - - - - - - - - -
Correction
of prior
period
errors
- - - - - - - - - - - - -
Adjustmen
ts for
business
combinatio
ns
198
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
involving
enterprises
under
common
control
- - - - - - - - - - - - -
Others
II.
1,580,357,49 - - - 2,118,792,10 172,540,56 5,292,263.9 - 634,407,80 - 4,937,480,62 638,200,576 9,741,990,30
Balance at 4.00 6.43 6.20 0 3.71 9.17 .75 7.76
the
beginning
of the year
III.
80,853,257.0 - - - 2,923,128,95 -7,190,233. -111,778,61 - 4,255,096.6 7,814,011 1,957,536,18 347,702,520 5,216,701,65
Changes 0 8.37 55 1.97 9 .67 8.09 .20 3.60
in equity
during the
year ( "- "
for
decrease)
199
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
(I) Total
- - - - - - -111,778,61 - - - 2,522,730,41 327,296,738 2,738,248,54
comprehen 1.97 9.35 .46 5.84
sive
income
(II)
80,853,257.0 - - - 2,788,649,12 -2,773,077. - - - - - 99,144,120. 2,971,419,58
Shareholde 0 9.67 10 70 4.47
rs'
contributio
ns and
decrease of
capital
1.
-431,357.00 - - - -2,590,753.1 -86,802,89 - - - - - 60,493,073. 144,273,856.
Contributio 6 3.35 65 84
n by
ordinary
shareholde
rs
2.
81,284,614.0 - - - 2,791,538,92 - - - - - - - 2,872,823,54
Contributio
200
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
n by 0 7.85 1.85
holders of
other
equity
instrument
s
3. Share
- - - - 7,968,763.90 - - - - - - 351,840.94 8,320,604.84
based
payment
included in
shareholde
rs' equity
4. Others
- - - - -8,267,808.9 84,029,816. - - - - - 38,299,206. -53,998,419.0
2 25 11 6
(III)
- - - - - -4,417,156. - - 4,255,096.6 7,814,011 -565,194,231 -78,738,338. -627,446,305.
Appropriat 45 9 .67 .26 96 41
ion of
profits
201
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
1.
- - - - - - - - 4,255,096.6 - -4,255,096.6 - -
Appropriat 9 9
ion for
surplus
reserves
2.
- - - - - - - - - 7,814,011 -7,814,011.6 -
Appropriat .67 7
ion for
general
risk
provision
3.
- - - - - -4,417,156. - - - - -553,125,122 -78,738,338. -627,446,305.
Distributio 45 .90 96 41
ns to
shareholde
rs
4. Others
- - - - - - - - - - - - -
(IV)
- - - - - - - - - - - - -
202
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Transfer
within
equity
1. Transfer
- - - - - - - - - - - - -
of capital
reserve to
share
capital
2. Transfer
- - - - - - - - - - - - -
of surplus
reserve to
share
capital
3.
- - - - - - - - - - - - -
Surplus
reserve for
making up
losses
203
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4. Transfer
- - - - - - - - - - - - -
the
changes in
defined
benefit
plan into
retained
earnings
5. Transfer
- - - - - - - - - - - - -
of other
comprehen
sive
income to
retained
earning
6. Others
- - - - - - - - - - - - -
(V)
- - - - - - - - - - - - -
Specific
204
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
reserve
1.
- - - - - - - - - - - - -
Appropriat
ion during
the year
2.
- - - - - - - - - - - - -
Utilization
during the
year
(VI) Others
- - - - 134,479,828. - - - - - - - 134,479,828.
70 70
IV.
1,661,210,75 - - - 5,041,921,06 165,350,33 -106,486,34 - 638,662,90 7,814,011 6,895,016,81 985,903,096 14,958,691,9
Balance at 1.00 4.80 2.65 8.07 0.40 .67 7.26 .95 61.36
the end of
the year
205
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
Company Statement of Changes in Shareholders' Equity
For the year ended December 31, 2021
Prepared by: Guangdong Haid Group Co., Limited
Expressed in RMB
Item Year ended 31/12/2021
Share capital Other equity instruments Capital Less: Other Specific Surplus Retained Total
Others reserve Treasury comprehensi reserve reserve earnings shareholders
Prefer Perpet
stock ve income ' equity
ence ual
share debt
I. Balance at the end
of last year 1,661,210,75 - - - 5,136,265,88 165,350,332. - - 638,662,900. 2,553,545,70 9,824,334,91
1.00 3.82 65 40 8.11 0.68
Add: Changes in
accounting policies - - - - - - - - - - -
Correction
of prior period errors - - - - - - - - - - -
Others
206
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- - - - - - - - - - -
II. Balance at the
beginning of the year 1,661,210,75 - - - 5,136,265,88 165,350,332. - - 638,662,900. 2,553,545,70 9,824,334,91
1.00 3.82 65 40 8.11 0.68
III. Changes in equity
during the year ( "- " -49,690.00 - - - 171,210,444. 626,970,819. - - 107,333,505. 437,717,085. 89,240,526.2
for decrease) 12 51 66 99 6
(I) Total
comprehensive income - - - - - - - - - 1,073,335,05 1,073,335,05
6.61 6.61
(II) Shareholders'
contributions and -49,690.00 - - - 274,006,600. 626,970,819. - - - - -353,013,908.
decrease of capital 69 51 82
1. Contribution by
ordinary shareholders -49,690.00 - - - -312,567.20 -362,257.20 - - - - -
2. Contribution by
holders of other equity - - - - - - - - - - -
instruments
207
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3. Share based
payment included in - - - - 274,319,167. -80,958,259.2 - - - - 355,277,427.
shareholders' equity 89 0 09
4. Others
- - - - - 708,291,335. - - - - -708,291,335.
91 91
(III) Appropriation of
profits - - - - - - - - 107,333,505. -635,617,970. -528,284,464.
66 62 96
1. Appropriation for
surplus reserves - - - - - - - - 107,333,505. -107,333,505. -
66 66
2. Appropriation for
general risk provision - - - - - - - - - - -
3. Distributions to
shareholders - - - - - - - - - -528,284,464. -528,284,464.
96 96
4. Others
208
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
- - - - - - - - - - -
(IV) Transfer within
equity - - - - - - - - - - -
1. Transfer of capital
reserve to share capital - - - - - - - - - - -
2. Transfer of surplus
reserve to share capital - - - - - - - - - - -
3. Surplus reserve
for making up losses - - - - - - - - - - -
4. Transfer the changes
in defined benefit plan - - - - - - - - - - -
into retained earnings
5. Transfer of other
comprehensive income - - - - - - - - - - -
to retained earning
6. Others
- - - - - - - - - - -
(V) Specific reserve
209
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
- - - - - - - - - - -
1. Appropriation
during the year - - - - - - - - - - -
2. Utilization during
the year - - - - - - - - - - -
(VI) Others
- - - - -102,796,156. - - - - - -102,796,156.
57 57
IV. Balance at the
end of the year 1,661,161,06 - - - 5,307,476,32 792,321,152. - - 745,996,406. 2,991,262,79 9,913,575,43
1.00 7.94 16 06 4.10 6.94
Item Year ended 31/12/2020
Share capital Other equity instruments Capital Less: Other Specific Surplus Retained Total
reserve Treasury comprehensi reserve reserve earnings shareholders'
Preferen Perpetu Other
stock ve income equity
ce share al debt s
I. Balance at the - - - - -
1,580,357,494. 2,202,920,835. 172,540,566. 634,407,803. 3,068,374,960. 7,313,520,528.
210
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
end of last year 00 86 20 71 79 16
Add: Changes in - - - - - - - - - - -
accounting policies
- - - - - - - - - - -
Correction of prior
period errors
Others - - - - - - - - - - -
II. Balance at the - - - - -
1,580,357,494. 2,202,920,835. 172,540,566. 634,407,803. 3,068,374,960. 7,313,520,528.
beginning of the 00 86 20 71 79 16
year
III. Changes in - - - - -
80,853,257.00 2,933,345,047. -7,190,233.5 4,255,096.69 -514,829,252.6 2,510,814,382.
equity during the 96 5 8 52
year ( "- " for
decrease)
(I) Total - - - - - - - - -
42,550,966.91 42,550,966.91
comprehensive
income
(II) Shareholders' - - - - - - -
211
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
contributions and 80,853,257.00 2,797,268,779. -2,773,077.1 2,880,895,113.
53 0 63
decrease of capital
1. Contribution by -431,357.00 - - - -2,590,753.16 - - - -
-86,802,893. 83,780,783.19
ordinary 35
shareholders
2. Contribution by - - - - - - - -
81,284,614.00 2,791,538,927. 2,872,823,541.
holders of other 85 85
equity instruments
3. Share based - - - - 8,320,604.84 - - - - - 8,320,604.84
payment included
in shareholders'
equity
4. Others - - - - - - - - -
84,029,816.2 -84,029,816.25
5
(III) Appropriation - - - - - - -
-4,417,156.4 4,255,096.69 -557,380,219.5 -548,707,966.4
of profits 5 9 5
1. Appropriation for - - - - - - - - -4,255,096.69 -
4,255,096.69
surplus reserves
212
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2. Appropriation for - - - - - - - - - - -
general risk
provision
3. Distributions to - - - - - - - -
-4,417,156.4 -553,125,122.9 -548,707,966.4
shareholders 5 0 5
4. Others - - - - - - - - - - -
(IV) Transfer - - - - - - - - - - -
within equity
1. Transfer of - - - - - - - - - - -
capital reserve to
share capital
2. Transfer of - - - - - - - - - - -
surplus reserve to
share capital
3. Surplus reserve - - - - - - - - - - -
for making up
losses
213
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4. Transfer the - - - - - - - - - - -
changes in defined
benefit plan into
retained earnings
5. Transfer of other - - - - - - - - - - -
comprehensive
income to retained
earning
6. Others - - - - - - - - - - -
(V) Specific reserve - - - - - - - - - - -
1. Appropriation - - - - - - - - - - -
during the year
2. Utilization during - - - - - - - - - - -
the year
(VI) Others - - - - - - - - -
136,076,268.4 136,076,268.4
3 3
IV. Balance at the - - - - -
1,661,210,751. 5,136,265,883. 165,350,332. 638,662,900. 2,553,545,708. 9,824,334,910.
end of the year 00 82 65 40 11 68
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Notes to the Financial Statements
I. Company Profile
1. Company’s Information
Guangdong Haid Group Co., Limited (formerly known as “Guangdong Haid Industrial Co., Ltd.” or
“Guangdong Haid Group Limited”, and hereinafter referred to as the “Company”) is a share limited
company registered in Guangdong Province, which listed on the Shenzhen Stock Exchange in November
2009.
As of December 31, 2021, the total share capital of the Company was 1,661,161,061 shares, of which
3,034,547 shares were restricted shares, accounted for 0.18% of the total shares, and 1,658,126,514 shares
were non-restricted shares, accounted for 99.82% of the total shares.
The Company and its subsidiaries (hereinafter referred to as the “Group”) operates in the feed industry, the
main products include aquatic and livestock feed, high-quality aquatic animal seedlings, animal health
products, biological products, pig breeding and so on, covering all business chain such as research and
development, design, production, sales and service of various products.
The financial statements and notes have been approved by the 25th meeting of the fifth Board of Directors
of the Company on April 10, 2022.
2. Scope of Consolidated Financial Statements
A total of 497 subsidiaries were included in the scope of the consolidated financial statements of the
current year. 123 entities were added into and 15 entities were removed from the consolidation scope for
the current year when compared to prior year. For further information, please refer to the disclosures in
Note VI. Changes in Consolidation Scope and Note VII. Interests in Other Entities.
II. Basis of Preparation
The financial statements are prepared in accordance with the Accounting Standards for Business
Enterprises and corresponding application guidance, interpretations and other related provisions issued by
the Ministry of Finance (collectively, "Accounting Standards for Business Enterprises"). In addition, the
Group also disclosed the relevant financial information in accordance with the Explanatory Announcement
No. 15 on Information Disclosure for Companies Offering Their Securities to the Public—General
Requirements for Financial Reporting (2014 version) issued by the China Securities Regulatory
Commission.
The financial statements have been prepared on the going concern basis.
The Group adopts the accrual basis of accounting. The financial statements are prepared under the
historical cost except for certain financial instruments. Non-current assets held-for-sale are measured at the
lower of the amount of the fair value less estimated costs and the book value when it was recognized as
held-for-sale. If the assets were impaired, a provision for impairment shall be provided in accordance with
the relevant regulations.
III. Significant Accounting Policies and Accounting Estimates
The Group determines revenue recognition policy according to the characteristics of its production and
operation and relevant requirements in Accounting Standards for Business Enterprises. For more
information on the accounting policies, please refer to Note III. 29.
1. Representation of Compliance with Accounting Standards for Business Enterprises
The financial statements have been prepared in accordance with the requirements of Accounting Standards
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for Business Enterprises. These financial statements have truly and completely presented the consolidated
financial position and financial position of the Company as at December 31, 2020 and their operating
results and cash flows for the year ended December 31, 2021.
2. Accounting Period
The accounting period of the Group is from 1 January to 31 December.
3. Operating Cycle
The operating cycle of the Group is 12 months.
4. Functional currency
The Company and its domestic subsidiaries use Renminbi (“RMB”) as their functional currency. The
overseas subsidiaries of the Company determine their functional currency according to the primary
economic environment where they operate. The financial statements of the Group have been prepared in
RMB.
5. Accounting Treatment for Business Combination Involving Entities under Common Control and not under
Common Control
(1) Business combinations involving entities under common control
For a business combination involving entities under common control, the assets acquired and liabilities
assumed are measured based on their carrying amounts in the consolidated financial statements of the
ultimate controlling party at the combination date, except for adjustments due to different accounting
policies. The difference between the carrying amount of the net assets acquired and the consideration paid
for the combination is adjusted against share premium in the capital reserve (share capital premium), with
any excess adjusted against retained earnings.
For a business combination involving entities under common control achieved in stages that involves
multiple exchange transactions
In the separate financial statements, the initial investment cost is the combining party’s share of the
carrying amount of the net assets of the combined party in the consolidated financial statements of the
ultimate controlling party at combination date. The difference between initial investment cost, and the total
of investment carrying amount prior to combination date and additional investment cost at the combination
date is adjusted to capital reserve (share premium). Any excess is adjusted to retained earnings.
In the consolidated financial statements, the assets acquired and liabilities assumed are measured based on
their carrying amounts in the consolidated financial statements of the ultimate controlling party at the
combination date, except for adjustments due to different accounting policies; the difference between the
sum of the carrying amount of the investment before combination and the carrying amount of new
consideration paid at the combination date, and the carrying amount of the net asset acquired in the
combination, is adjusted against capital reserve (share premium), with any excess adjusted against retained
earnings. The long-term equity investment of the combining party before acquiring the control, the profit or
loss, other comprehensive income and other changes in the owner’s equity recognized from the later of the
initial acquisition date of the equity and the date when the combining party and the combined party under
common ultimate control party to the combination date, shall be offset against the opening retained
earnings and profit or loss for the current period in the comparative statement.
(2) Business combinations involving entities not under common control
For business combinations involving entities not under common control, the consideration costs are the fair
values of the assets paid, the liabilities incurred or assumed and the equity instruments issued by the
acquirer in exchange for control over the acquiree on the acquisition date. At the acquisition date, the
acquired assets, liabilities and contingent liabilities of the acquiree are measured at their fair value.
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Where the combination cost exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable
net assets, the difference is recognized as goodwill, and subsequently measured based on its cost less
accumulated impairment provisions. Where the combination cost is less than the acquirer’s interest in the
fair value of the acquiree’s identifiable net assets, the difference is recognized in profit or loss for the
current period after reassessment.
For a business combination involving entities not under common control and achieved in stages that
involves multiple exchange transactions
In the individual financial statements, the initial investment cost is the sum of the book value of the equity
investment held by the purchased party before the purchase date and the new investment cost on the
purchase date. The equity investment is recognized as other comprehensive income by using equity method,
this part of other comprehensive income is not adjusted in the purchase date, when disposal this investment,
using the same basis as the investee directly dispose of related assets or liabilities for accounting treatment;
equity recognized due to changes in the other equity of the investee (other than the changes in net profit
and loss, other comprehensive income and profit distribution), is transferred to the gain or loss in the
disposal period when this investment is disposed. If the equity investment held before the purchase date is
measured at fair value, the cumulative change in fair value that was originally included in other
comprehensive income is transferred to profit or loss in the current period when the cost method is used.
In the separate financial statements, the initial investment cost is the total of the carrying amount of
previously-held equity investment and the additional investment cost at the acquisition date. When the
previously-held equity investment which was recognized under the equity method before the acquisition
date, any other comprehensive income previously recognized is not adjusted on acquisition date. When the
investment is disposed, the previous recognized amount in the other comprehensive income is recognized
on the same basis as would be required if the investee had directly disposed the related assets or liabilities.
For the changes of the investee’s other owners’ equity which have recognized in the owner’s equity except
for net profit or loss, other comprehensive income and profit distribution are transferred to profit or loss for
the current period when disposing the investment. When the previously-held equity investment which was
measured at fair value before the acquisition date, the accumulated changes in fair value included in other
comprehensive income is transferred to retained earnings upon commencement of the cost method.
In the consolidated financial statements, the cost of business combination is the total of the consideration
paid at the acquisition date and the fair value of equity investment of the acquiree held prior to the
acquisition date. The cost of equity investment of the acquiree held prior to the acquisition date shall be
re-measured at the fair value at the acquisition date, the difference between the fair value and par value
shall be recognized as profit or loss for the current period. Other comprehensive income and changes of
other owners’ equity from the equity interest held in the acquiree prior to the acquisition date shall be
transferred to profit or loss for the current period, except for other comprehensive income arising from the
movement of net liabilities or assets in the investee’s re-measurement of defined benefit plan.
(3) The accounting treatment of transaction costs in business combination
The overhead for the business combination, including the expenses for auditing, legal services, appraisal
and advisory, and other related administrative expenses, are recognized in profit or loss for the current
period when incurred. The transaction costs of equity or debt securities issued as the consideration of
business combination are included in the initial recognition amount of the equity or debt securities.
6. Consolidated Financial Statements
(1) Scope of consolidated financial statements
The scope of consolidated financial statements is based on control. Control exists when the Company has
power over the investee; exposure, or rights to variable returns from its involvement with the investee and
has the ability to affect its returns through its power over the investee. A subsidiary is an entity that is
controlled by the Company (including entity, a portion of an investee as a deemed separate component, and
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structured entity controlled by the entity).
(2) Basis of preparation of consolidated financial statements
The consolidated financial statements are prepared by the Company based on the financial statements of
the Company and its subsidiaries and other relevant information. When preparing the consolidated financial
statements, the accounting policies and accounting periods of the subsidiaries shall be consistent with those
established by the Company. All significant intra-company balances and transactions shall be eliminated.
Where a subsidiary or business was acquired during the reporting period, through a business combination
involving entities under common control, the financial statements of the subsidiary are included in the
consolidated financial statements as if the combination had occurred at the date that the ultimate controlling
party first obtained control.
Where a subsidiary or business was acquired during the reporting period, through a business combination
involving entities not under common control, its revenue, expenses and profit from the acquisition date to
the end of the reporting period are included in the consolidated income statement and its cash flows are
included in the consolidated cash flow statement.
The non-controlling interests of the subsidiary that is not attributable to the Group are presented separately
in the shareholders’ equity section within the consolidated balance sheet. Net profit or loss attributable to
non-controlling shareholders is presented separately as non-controlling interests below the line item “net
profit” within the consolidated income statement. When the amount of loss for the current period
attributable to the non-controlling shareholders of a subsidiary exceeds the non-controlling shareholders’
share of the opening owners’ equity of the subsidiary, the excess is still allocated against the
non-controlling interests.
(3) Acquire shares from minority shareholders of subsidiary
Where the Group acquires a non-controlling interest from a subsidiary’s non-controlling shareholders or
disposes of a portion of an interest in a subsidiary without a change in control, the difference between the
proportion interests of the subsidiary’s net assets being acquired or disposed and the amount of the
consideration paid or received is adjusted to the capital reserve (share premium) in the consolidated balance
sheet, with any excess adjusted to retained earnings.
(4) Disposal of subsidiaries
When the Group loses control over a subsidiary due to partial disposal of equity investment or other
reasons, the remaining equity interests is re-measured at its fair value at the date when the control is lost. A
gain or loss is the total of consideration received from the disposal of equity investment and the remaining
equity investment at its fair value, deducted the total of the subsidiary’s net asset and goodwill which
calculated in proportion based on the original shareholding percentage since the acquisition date. Any
resulting gain or loss is recognized as investment income for the current period.
Except for the other comprehensive income arose from the movement of net liabilities or net assets driven
by investee’s remeasurement on defined benefit plan, other comprehensive income related to the original
equity investment in subsidiaries is transferred to profit or loss for the current period when the Group loses
control of the subsidiary.
(5) The treatment of disposing equity investment by stages until the control is lost
The Group considers the arrangements of multiple transactions by disposing equity investment by stages
until the control is lost as a single transaction when the terms, conditions and economic impact of each
transaction meet one or more of the following situations:
① The transactions are entered into at the same time or in contemplation of each other;
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② The transactions are considered as a single transaction to achieve an overall commercial effect;
③ The occurrence of one transaction dependent on the occurrence of at least one other transaction;
④ A transaction is not economically justified when considered on its own, but it is economically justified
when considered together with other transactions.
In the separate financial statements, for multiple transactions by disposing equity investment by stages until
the control is lost that not qualified as a single transaction, the carrying amount of long-term equity
investments related to each transaction of disposal of equity is derecognized, the difference between the
consideration received and the carrying amount of disposed long-term equity investments is recognized as
investment income. For those arrangements qualified as a single transaction, the carrying amount of
long-term equity investments related to each transaction of disposal of equity is derecognized, the
difference between the consideration received and the carrying amount of disposed long-term equity
investments is recognized as other comprehensive income, and finally recognized in profit or loss for the
current period on the date when the control is lost.
In the consolidated financial statements, when the Company disposal of investments step by step through
multiple transactions until loss of control, the evaluation of remaining share and accounting for the disposal
of equity gain or loss can refer to the aforementioned "treatment of loss of control of the subsidiary".
Before the loss of control, the difference between the price of each disposal and the corresponding share of
the net asset book value of the subsidiary since the purchase date corresponding to the disposal of the
investment shall be treated as follows:
In the consolidated financial statements, please refer to the above “disposal of subsidiaries” for the
measurement of remaining equity and accounting treatment for profit or loss of disposing equity investment
by stages until the control is lost. The difference between each consideration received and the share of the
subsidiary’s net assets since acquisition date relevant to disposing investment until the control is lost:
① is recognized in other comprehensive income if the arrangements are regarded as a single transaction.
Other comprehensive income is transferred to profit or loss for the current period until the control is
lost.
② is recognized in capital reserve (share premium) as an equity transaction if the arrangements are not
regarded as a single transaction. Capital reserve is not transferred to profit or loss for the current
period when the control is lost.
7. Joint Arrangement Classification and Accounting Treatment for Joint Operation
A joint arrangement is an arrangement of which two or more parties have joint control. The Company
classifies joint arrangements into joint operations and joint ventures.
(1) Joint operations
A joint operation is a joint arrangement whereby the Group has rights to the assets, and obligations for the
liabilities, relating to the arrangement.
The Group recognizes the following items relating to its interest in a joint operation, and account for them
in accordance with relevant accounting standards:
A. its solely-held assets, and its share of any assets held jointly;
B. its solely-assumed liabilities, and its share of any liabilities assumed jointly;
C. its revenue from the sale of its share of the output arising from the joint operation;
D. its share of the revenue from the sale of the output by the joint operation;
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E. its solely-incurred expenses, and its share of any expenses incurred jointly.
(2) Joint ventures
A joint venture is a joint arrangement whereby the Group has rights to the net assets of the arrangement.
The Group adopts equity method of long-term equity investment to account for its investment in joint
venture.
8. Cash and Cash Equivalents
Cash comprises cash in hand and deposits that can be readily withdrawn on demand. Cash equivalents
include short-term, highly liquid investments that are readily convertible to known amounts of cash and are
subject to an insignificant risk of change in value.
9. Foreign Currency Transactions and Translation of Foreign Currency Financial Statements
(1) Foreign currency transactions
Foreign currency transactions are translated to the functional currency of the Group at the spot exchange
rates or approximate spot exchange rates (usually, it refers to the central parity rate published by the
People’s Bank of China) on the dates of the transactions.
Monetary items denominated in foreign currencies are translated to Renminbi at the spot exchange rate at
the balance sheet date. The resulting exchange differences between the spot exchange rate at balance sheet
date and the spot exchange rate at initial recognition or at the previous balance sheet date are recognized in
profit or loss. Non-monetary items that are measured at historical cost in foreign currencies are translated to
Renminbi using the exchange rate at the transaction date. Non-monetary items that are measured at fair
value in foreign currencies are translated using the exchange rate at the date when the fair value is
determined. The resulting exchange differences are recognized in profit or loss or other comprehensive
income, depending on the nature of non-monetary items.
(2) Translation of foreign currency financial statements
When translating the foreign currency financial statements of overseas subsidiaries, assets and liabilities of
foreign operation are translated to Renminbi at the spot exchange rate at the balance sheet date. Equity
items, except for retained earnings, are translated to Renminbi at the spot exchange rates at the transaction
dates.
Income and expenses of foreign operation are translated to Renminbi at the approximate exchange rates
determined under a systematic and rational method at the transaction dates.
Items of cash flow statement are translated to Renminbi at the spot exchange rates at the cash flow
occurrence dates. Effect of foreign exchange rate changes on cash and cash equivalents is presented
separately as Effect of foreign exchange rate changes on cash and cash equivalents in the cash flow
statement.
The resulting translation differences are recognized in other comprehensive income in shareholders’ equity
in the balance sheet.
When the control on foreign operation is lost due to disposal, the translation differences accumulated in
shareholders’ equity attributable to the foreign operation as presented under shareholders’ equity in the
balance sheet are transferred to profit or loss for the current period entirely or partially based on the
disposed portion.
10. Financial instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial
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liability or an equity instrument of another entity.
(1) Recognition and derecognition of financial instruments
A financial asset or a financial liability is recognized when the Group becomes a party to the contractual
provisions of a financial instrument.
If one of the following criteria is met, a financial asset is derecognized:
A. The contractual rights to receive the cash flows from the financial asset are terminated;
B. The financial asset has been transferred, and is in accordance with the following conditions for
derecognition.
A financial liability is derecognized entirely or partially when its contractual obligation is ceased entirely or
partially. If the Group (borrower) enters into an agreement with the lender to replace the existing financial
liability with a new assumed financial liability, and contractual terms are different in substance, the existing
financial liability is derecognized while a new financial liability is recognized.
Conventionally traded financial assets are recognized and derecognized at the transaction date.
(2) Classification and measurement of financial assets
The Group classifies financial assets into three categories at initial recognition according to the business
model in which a financial asset is managed and its contractual cash flow characteristics: financial assets
measured at amortized cost, financial assets measured at fair value through other comprehensive income
and financial assets measured at fair value through profit or loss.
Financial assets measured at amortized cost
The Group classifies financial assets that meet the following conditions and are not designated as financial
assets measured at fair value through profit or loss, as financial assets measured at amortized cost:
The objective for the business model in which the financial asset is managed, is to collect the
contractual cash flows;
The contract terms of the financial asset stipulate that the cash flow generated on a specific date is
only for the payment of principal and interest on the outstanding principal.
The effective interest method is adopted to measure such financial assets at amortized cost after initial
recognition. Gains or losses arising from financial assets measured at amortized cost and are not part of any
hedging relationship are recognized in profit or loss when they are derecognized, amortized according to
the effective interest method or recognized for impairment.
Financial assets measured at fair value through other comprehensive income
The Group classifies financial assets that meet the following conditions and are not designated as financial
asset measured at fair value through profit or loss, as financial assets measured at fair value through other
comprehensive income:
The objectives for the business model in which the financial asset is managed, are to collect the
contractual cash flows and to sell the financial asset;
The contract terms of the financial asset stipulate that the cash flow generated on a specific date is
only for the payment of principal and interest on the outstanding principal.
Such financial assets are subsequently measured at fair value after initial recognition. Interest calculated by
using effective interest method, impairment losses or gains, and exchange gains and losses are recognized
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in the profit or loss for the current period, while other gains or losses are recognized in other
comprehensive income. When they are derecognized, the accumulated gains or losses in the other
comprehensive income are transferred to profit or loss for the current period.
Financial assets measured at fair value through profit or loss
All financial assets not classified as measured at amortized cost or financial assets measured at fair value
through other comprehensive income as described above, the Group classifies them as financial assets
measured at fair value through profit or loss. On initial recognition, the Group may irrevocably designate a
financial assets otherwise meets the requirements to be measured at amortized cost or at fair value through
other comprehensive income as at financial assets measured at fair value through profit or loss if doing so
eliminates or significantly reduces an accounting mismatch that would otherwise arise.
These financial assets are subsequently measured at fair value. Gains or losses (including interest and
dividend income) are recognized in profit or loss for the current period, unless the financial asset is part of
a hedging relationship.
The business model for managing financial assets refers to how the Group manages financial assets to
generate cash flows. The business model determines whether the cash flows will result from collecting
contractual cash flows, selling financial assets, or both. The Group determines the business model for
managing financial assets according to the objective facts and based on the specific business objectives for
managing the financial assets determined by the key management personnel.
The Group evaluates the contractual cash flow characteristics of financial assets to determine whether the
contractual cash flow generated by the relevant financial assets on a specific date is only the payment for
principal and interest on the outstanding principal. Principal is defined as the fair value of the financial
asset at initial recognition. Interest is defined as consideration for the time value of money and for the
credit risk associated with the outstanding principal during a particular period of time and for other basic
lending risks and costs, as well as profits. The Group also assesses whether the financial asset contains a
contractual term that could change the timing or amount of contractual cash flows such that it would not
meet this condition.
Only when the Group changes the business model for managing financial assets, all relevant affected
financial assets are reclassified on the first day of the first reporting period after the business model is
changed, otherwise the financial assets cannot be reclassified after initial recognition.
Financial assets are measured at fair value at initial recognition. The relevant transaction cost for financial
assets measured at fair value through profit or loss is recognized in profit or loss for the current period,
while the transaction cost for other financial assets is included in their initial cost. The Group recognizes
the expected consideration that the Group is entitled to as the initial cost for accounts receivable arising
from the sale of products or render of services and/or do not contain or consider significant financing
components.
(3) Classification and measurement of financial liabilities
The Group classifies financial liabilities into different categories at initial recognition: financial liabilities
measured at fair value through profit or loss and financial liabilities measured at amortized cost. The
relevant transaction cost is included in initial cost for financial liabilities other than those classified as
financial liabilities measured at fair value through profit or loss.
Financial liabilities measured at fair value through profit or loss
Financial liabilities measured at fair value through profit or loss include held-for-trading financial liabilities
and financial liabilities designated as financial liabilities measured at fair value through profit or loss at
initial recognition. Such financial liabilities are subsequently measured at fair value. Gain or losses arising
from change in fair value, and any dividend and interest expenses related to such financial liabilities are
recognized in profit or loss for the current period.
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Financial liabilities measured at amortized cost
Other financial liabilities are subsequently measured at amortized cost using the effective interest method.
Gains or losses arising from derecognition or amortization are recognized in profit or loss for the current
period.
Financial guarantee contract
Financial guarantee contract is not a financial liability designated as financial liabilities measured at fair
value through profit or loss. It is initially measured at fair value, and subsequently measured at the higher
of the loss allowance of provisions determined by the expected credit loss model, and the balance of the
initial recognized amount deducts the accumulated amortization.
Distinction between financial liabilities and equity instruments
A financial liability is recognized if one of the following conditions is satisfied:
A. a contractual obligation to deliver cash or another financial asset to another entity;
B. a contractual obligation to exchange financial assets or financial liabilities with another entity under
conditions that are potentially unfavorable to the Group;
C. a non-derivative contract that will or may be settled in the Group’s own equity instruments and the
Group is obliged to deliver a variable number of the Group’s own equity instruments;
D. a derivative contract that will or may be settled in the Group’s own equity instruments, except for a
derivative contract that is settled by the exchange of a fixed number of the Group’s own equity instruments
for a fixed amount of cash or other financial assets.
An equity instrument is a contract that evidences a residual interest in the assets of the Group after
deducting all of its liabilities.
If the Group does not have an unconditional right to avoid delivering cash or another financial asset to
settle a contractual obligation, the obligation meets the definition of a financial liability.
If a financial instrument will or may be settled by the Group’s own equity instruments, classification of the
instrument depends on whether the Group’s own equity instruments work as the replacement of cash or
other financial instrument, or represent the investor’s residual interest in the Group’s assets after deducting
all its liabilities. In the former case, the instrument is classified as a financial liability; in the latter case, the
instrument is classified as an equity instrument.
(4) Derivative financial instruments and embedded derivative instruments
The Group’s derivative financial instruments included forward exchange contract, currency exchange rate
swap agreement, interest rate swap agreement and foreign currency option contract, etc. Derivative
financial instruments are initially measured at fair value of the date a derivative contract entered into and
subsequently measured at their fair value. Derivative financial instruments with positive fair value are
recognized as assets while those with negative fair value are recognized as liabilities. Any gains or losses
arising from changes in fair value which do not meet the requirements of hedge accounting are directly
recognized in profit or loss for the current period.
For hybrid instruments with embedded derivatives, the relevant requirements for financial asset
classification are applicable to the entire hybrid instruments if the master contracts are financial assets. If
the master contract is not a financial assets and such hybrid instrument is not designated as measured at fair
value through profit or loss, the economic features and risks of the embedded derivative are not closely
related to the master contract, and a similar instrument with the same terms as the embedded derivative
would meet the definition of a derivative, then he embedded derivative is separated from hybrid instrument
and considered as an individual derivative. If the embedded derivative is unable to measure separately
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either at acquisition or subsequently at balance sheet date, the entire hybrid instrument is designated as a
financial asset or financial liability measured at fair value through profit or loss.
(5) Fair value of financial instruments
For the recognition of fair value of financial assets and financial liabilities, please refer to Note III. 11.
(6) Impairment of financial assets
The Group makes provisions of impairment and recognizes impairment losses based on expected credit loss
for the following items:
Financial assets measured at amortized cost
Receivables and debt investments measured at fair value through other comprehensive income;
Contract assets as defined in the Accounting Standards for Business Enterprises No. 14 - Revenue;
Lease receivables
Financial guarantee contract (except for those measured at fair value through profit and loss, the
transfer of financial assets does not meet the conditions for derecognition or continue to involve in the
transferred financial assets)
Measurement of expected credit losses
Expected credit loss is the weighted average of credit losses of financial instruments with the risk of default.
Credit loss is the present value of all cash shortfalls (i.e. the difference between the cash flows due to the
entity in accordance with the contract and the cash flows that the Group expects to receive).
The Group calculates the probability-weighted amount of the present value of the difference between the
contractual cash flow receivables and the expected cash inflow, and recognizes as the expected credit loss,
based on reasonable and reliable information on past events, current status and future economic conditions,
and weighted by the risk of default.
The Group measures the expected credit losses of financial instruments at different stages separately. The
financial instrument is at the first stage when there is no significant increase in credit risk since initial
recognition. The Group measures the loss allowance according to the expected credit losses in the next 12
months. The financial instrument is at the second stage when there is significant increase in credit risk since
initial recognition and credit loss is not yet occurred. The Group then measures the loss allowance
according to expected credit losses over the expected life of a financial instrument. The financial
instrument is at the third stage when there is significant increase in credit risk since initial recognition and
credit loss is occurred. The Group then measures the loss allowance according to expected credit losses
over the expected life of a financial instrument.
For financial instrument that has low credit risk at the balance sheet date, the Group assumes there is no
significant increase in its credit risk since initial recognition. The Group measures the loss allowance
according to the expected credit losses in the next 12 months.
Lifetime expected credit losses are the expected credit losses that result from all possible default events
over the expected life of a financial instrument. Expected credit losses in the next 12 months are the portion
of expected losses that result from default events that are possible within the 12 months after the balance
sheet date (or a shorter period if the expected life of the instrument is less than 12 months).
The maximum period considered when estimating expected credit losses is the maximum contractual
period (including extension options) over which the Group is exposed to credit risk.
For the financial instruments at the first and second stage as well as financial instruments that have low
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credit risk, the Group calculates the interest income based on the book value without loss allowance
deducted and effective interest rate. While for the financial instruments at the third stage, the Group
calculates the interest income based on the amortized cost of the book value less loss allowance and
effective interest rate.
Notes receivable, accounts receivable
For notes receivable and accounts receivable, regardless of whether they involve significant financing
components, the Group always measures the loss allowance at an amount equal to lifetime expected credit
losses.
The Group classifies the notes receivable and accounts receivable into different groups according to the
credit risk characteristics when the expected credit loss information of a single financial assets cannot be
assessed at a reasonable cost. Expected credit losses are calculated based on groups. The basis of
determination is as below:
A. Notes receivable
Group 1 of notes receivable: Bank acceptance notes
Group 2 of notes receivable: Commercial acceptance notes
Group 3 of notes receivable: Usance letters of credit
B. Accounts receivable
Group 1 of accounts receivable: Accounts receivable due from feed related customers
Group 2 of accounts receivable: Accounts receivable due from related parties within the scope of
consolidation
Group 3 of accounts receivable: Accounts receivable due from raw materials customers
For notes receivable classified into groups, the Group calculates the expected credit losses through the
exposure at default and the lifetime expected credit loss rate, based on the historical credit loss experience,
in conjunction with the current situation and predictions of future economic conditions.
For accounts receivable classified into groups, the Group prepares the credit loss matrix on the aging of
accounts receivable/days of overdue and lifetime expected credit loss rates based on the Group’s historical
credit loss experience, in conjunction with the current situation and predictions of future economic
conditions. The Group then uses the matrix to calculate the expected credit losses.
Other receivables
The Group classifies other receivables into groups based on credit risk characteristics. Expected credit
losses are calculated based on groups. The basis of determination is as below:
Group 1 of other receivables: Security deposits
Group 2 of other receivables: Futures margin
Group 3 of other receivables: Receivables due from external parties
Group 4 of other receivables: Advance social security and provident fund
Group 5 of other receivables: Petty cash
Group 6 of other receivables: Other receivables due from related parties within the scope of
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consolidation
Group 7 of other receivables: Others
For other receivables that are divided into portfolios, the Group calculates the expected credit loss through
the exposure at default and the expected credit loss rate within the next 12 months or the entire duration.
Loans and advances to customers
For loans and advances to customer, the Group calculates the expected credit loss through the exposure at
default and the expected credit loss rate within the next 12 months or the entire duration.
Long-term receivables
The Group's long-term receivables include financial lease receivables, security deposit receivables,
receivables for subcontracting due by installment, etc.
The Group classifies financial lease receivables, security deposit receivables and receivables for
subcontracting due by installment into groups based on credit risk characteristics. Expected credit losses
are calculated based on groups. The basis of determination is as below:
A. Finance lease receivables
Group 1 of finance leases: Receivable due from related parties within the scope of consolidation.
Group 2 of finance leases: Receivable due from other customers
B. Other long-term receivables
Group 1 of long-term receivables: Security deposit receivables
Group 2 of long-term receivables: Receivables for subcontracting due by installments
Group 3 of long-term receivables: Other receivables
For security deposit receivables and receivables for subcontracting due by installment, the Group calculates
the expected credit losses through the exposure at default and the lifetime expected credit loss rate, based
on the historical credit loss experience, in conjunction with the current situation and predictions of future
economic conditions.
For other receivables classified into portfolios, except for security deposit receivables and receivables for
subcontracting due by installment receivables, the Group calculates the expected credit loss through the
exposure at default and the expected credit loss rate within the next 12 months or the entire duration.
Debt investments and other debt investments
For debt investments and other debt investments, the Group calculates the expected credit losses according
to the nature of the investment, counterparty and various types of risk exposures, the exposure at default
and the expected credit loss rate within the next 12 months or the entire duration.
Assessment of significant increase in credit risk
In assessing whether the credit risk of a financial instrument has increased significantly since initial
recognition, the Group compares the risk of default occurring on the financial instrument assessed at the
balance sheet date with that assessed at the date of initial recognition.
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When determining whether the credit risk has increased significantly since initial recognition, the Group
considers the reasonable and supportable information that is available without undue cost or effort,
including forward-looking information. In particular, the following information is taken into account:
Failure to make payments of principal or interest on their contractually due dates;
An actual or expected significant deterioration in a financial instrument’s external or internal credit
rating (if available);
An actual or expected significant deterioration in the operating results of the debtor; and
Existing or forecast changes in the technological, market, economic or legal environment that have a
significant adverse effect on the debtor’s ability to meet its obligation to the Group
Depending on the nature of the financial instruments, the Group assesses whether there is a significant
increase in credit risk either on an individual basis or a collective basis. When the Group is assessed on a
collective basis, the financial instruments are classified into groups based on shared credit risk
characteristics, such as past due status and credit risk ratings.
The Group determines that the credit risk of a financial instrument has increased significantly if it is more
than 30 days past due.
Credit-impaired financial assets
At each balance sheet date, the Group assesses whether financial assets measured at amortized cost and
debt investments measured at fair value through other comprehensive income are credit-impaired. A
financial asset is credit-impaired when one or more events that have adverse impact on the expected future
cash flows of financial asset have occurred. Evidence that a financial asset is credit-impaired includes the
following observable information:
Significant financial difficulty of the borrower or issuer;
A breach of contract, such as default or overdue in interest or principal payments;
For economic or contractual reasons relating to the borrower’s financial difficulty, the Group having
granted to the borrower a concessions that would not otherwise consider;
It is probable that the borrower will enter into bankruptcy or other financial restructuring;
The disappearance of an active market for that financial asset because of issuer’s or borrower’s
financial difficulties.
Presentation of allowance for expected credit losses
The Group remeasures the expected credit losses at each balance sheet date to reflect changes in the
financial instrument’s credit risk since initial recognition. Any increase or reversal of expected credit losses
shall be recognized as an impairment gain or loss in profit or loss for the current period. The Group
recognizes an impairment gain or loss for financial assets measured at amortized cost with a corresponding
adjustment to their carrying amount through a loss allowance account. While the Group recognizes a loss
allowance in other comprehensive income for debt investments that are measured at fair value through
other comprehensive income and does not adjust their carrying amount.
Write-off
The gross carrying amount of a financial asset is written off (either partially or entirely) to the extent that
there is no realistic prospect of recovery of the contractual cash flows. A write-off constitutes a
derecognition event. This is generally the case when the Group determines that the debtor does not have
assets or sources of income that could generate sufficient cash flows to repay the amounts subject to the
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write-off. However, financial assets that are written off could still be subject to enforcement activities in
order to comply with the Group’s procedures for recovery of amounts due.
Subsequent recoveries of an asset that was previously written off are recognized as a reversal of
impairment in profit or loss in the period when the recovery occurs.
(7) Transfer of financial assets
Transfer of financial assets is the transfer or delivery of financial assets to another party (the transferee)
other than the issuer of financial assets.
A financial asset is derecognized if the Group transfers substantially all the risks and rewards of ownership
of the financial asset to the transferee. A financial asset is not derecognized if the Group retains
substantially all the risks and rewards of ownership of the financial asset to the transferee.
The Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial
asset, the accounting treatments are as following: if control over the financial assets is surrendered, the
Group derecognizes the financial assets and recognize any assets and liabilities arose; if the Group retains
the control of the financial assets, financial assets to the extent of the continuing involvement in the
transferred financial assets by the Group and any relating liability are recognized.
(8) Offset between financial assets and financial liabilities
When the Group has the legal right to offset the recognized financial assets and financial liabilities, and the
legal rights is enforceable, and the Group plans to settle by net amount or realize the financial assets and
pay off the financial liabilities, the amount after being offset is presented in the balance sheet. Otherwise,
financial assets and financial liabilities are presented separately in the balance Sheet and not allowed to
offset against each other.
11. Fair Value Measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date.
The Group measures related assets or liabilities at fair value assuming the assets or liabilities are transferred
in an orderly transaction in their principal market; in the absence of a principal market, the Group assumes
that the transaction is occurred in the most advantageous market for the underlying asset or liability.
Principal market (or the most advantageous market) is the market that the Group can normally enter into a
transaction at the measurement date. The Group adopts the assumptions that would be used by market
participants in achieving the maximized economic benefit when pricing the assets or liabilities.
For financial assets or financial liabilities that have an active market, the Group uses the quoted prices in
the active market as their fair value. Otherwise, the Group uses valuation technique to determine their fair
value.
Fair value measurement of a non-financial asset considers market participants’ ability to generate economic
benefits by using the asset in its best way or ability to sell the asset to another market participant who is
able to generate economic benefits by using the asset in its best way.
The Group uses valuation techniques that are appropriate in the current circumstances and for which
sufficient data and other information are available. The Group uses the relevant observable inputs in
preference and only use unobservable input when the observable inputs are unavailable or impractical to
obtain.
For assets and liabilities measured or disclosed at fair value in the financial statements, their level of fair
value are determined according to the significant lowest level input to the entire fair value measurement:
Level 1 inputs are the unadjusted quoted prices in active markets for identical assets or liabilities that can
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be accessed at the measurement date; Level 2 inputs are inputs other than quoted prices included within
Level 1 that are observable for the assets or liabilities, either directly or indirectly; Level 3 inputs are
unobservable inputs for the assets or liabilities.
At the balance sheet date, the Group revalues assets and liabilities being measured at fair value
continuously in the financial statements to determine whether any change within the levels of fair value is
occurred.
12. Inventories
(1) Classification
Inventories include raw materials, finished goods, work in progress, consumptive biological assets and
consigned processing material, etc.
(2) Measurement method of cost of inventories
Inventories are initially measured at cost. Raw materials and finished goods are calculated by using
weighted average method.
(3) Basis for determining the net realizable value and method for provision for the decline in value of
inventories
Net realizable value is the estimated selling price less the estimated costs to completion, estimated
selling expenses and relevant tax expenses. The Group used the conclusive evidence obtained as the
basis, in conjunction with the consideration of the purpose of holding the inventories and the impact of
subsequent events after the balance sheet date to determine the net realizable value.
Any excess of the cost over the net realizable value at the balance sheet date is recognized as a provision
for the decline in value of inventories. The Group generally recognizes the provision for decline in value of
inventories by single inventory item. If the previous factors caused the decline in value of inventories have
disappeared at the balance sheet date, the previously recognized provision for decline in value of
inventories is reversed.
(4) Inventory count system
The Group maintains a perpetual inventory system.
13. Assets Held for Sale and Discontinued Operations
(1) Classification and measurement of non-current assets or disposal groups held-for-sale
The Group classifies a non-current asset or disposal group as held-for-sale when the carrying amount of the
non-current asset or disposal group will be recovered through a sale transaction (including an exchange
transaction of non-monetary assets with commercial substance) other than through continuous use.
The non-current assets mentioned above do not include investment properties subsequently measured by
fair value model, biological assets measured at fair value less selling costs, assets arising from employee
benefits, financial assets, deferred tax assets and contractual rights under insurance contracts.
The disposal group is a group of assets to be disposed of, by sale or otherwise, together as a whole in a
single transaction, and liabilities directly associated with those assets that will be transferred in the
transaction. Under certain circumstances, the disposal group includes goodwill acquired in a business
combination.
A non-current asset or disposal group is classified as held-for-sale when all the following criteria are met:
the non-current asset or disposal group is available for immediate sale in its present condition according to
the customary practices of selling such asset or disposal group in similar transactions; the sale is highly
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probable to occur, that is, the Group has made a resolution on a sale plan and entered into a legally binding
purchase agreement with other parties, and the sale is expected to be completed within one year. When the
Group is committed to a sale plan involving loss of control of a subsidiary and the classification criteria for
held-for-sale are met, the Group classifies the entire investment to subsidiary as held-for-sale in the
separate financial statements, and classifies all the assets and liabilities of that subsidiary as held-for-sale in
the consolidated financial statements, regardless of whether the Group retains any non-controlling interest
in the subsidiary after the sale.
Non-current assets or disposal groups held-for-sale are initially and subsequently measured at the lower of
carrying amount and fair value less selling cost. Any excess of the carrying amount over the fair value less
selling cost is recognized as an impairment loss. The impairment loss recognized for a disposal group is
adjusted to the carrying amount of goodwill allocated to the disposal group first, and then adjusted the
carrying amount of other non-current assets on pro rata basis in proportion to the carrying amount of each
non-current asset in the disposal group.
The Group recognizes a gain for any subsequent increase in fair value less selling cost of an asset in profit
or loss for the current period, to the extent of the cumulative impairment loss that has been recognized after
classified as held-for-sale. The reduced carrying amount of goodwill cannot be reversed.
The Group is no longer depreciated or amortized the non-current assets and assets in the disposal group
once they have been classified as held-for-sale. The Group continue to recognize the interests and other
expenses attributable to the liabilities of a disposal group classified as held-for-sale. If an entire or partial
investment in an associate or a joint venture is classified as held-for-sale, the held-for-sale portion is no
longer measured by the equity method while equity method is continue applied for the retain portion
(which is not classified as held-for-sale). When the Group can no longer exercise significant influence over
an associate or a joint venture due to the sale transaction, the use of equity method shall be suspended.
When an asset or disposal group is classified as held-for-sale, but no longer satisfies the recognition criteria
for held-for-sale non-current assets subsequently, the Group ceases to classify it as held-for-sale, and
measure it at the lower of:
① its carrying amount of the asset or disposal group before it was classifying as held-for-sale, and
adjusted for any depreciation, amortization or impairment as if it has not being classified as
held-for-sale;
② its recoverable amount.
(2) Discontinued operations
Discontinued operation is a component that either has been disposed or classified as held-for-sale by the
Group if it is separately identifiable and satisfies one of the following conditions:
② It represents a separate major line of business or a separate geographical area of operations;
③ It is part of a single coordinated plan to dispose of a separate major line of business or a separate
geographical area of operations;
③ It is a subsidiary acquired for the purpose of resale.
(3) Presentation
The Group presents a non-current asset classified as held-for-sale and the assets of a disposal group
classified as held-for-sale as Assets held-for-sale in the balance sheet. While the liabilities of a disposal
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group classified as held-for-sale is presented as Liabilities held-for-sale in the balance sheet.
The Group separately presents profit or loss from discontinued operations and profit or loss from
continuing operations in the income statement. Impairment loss and reversal amount and any disposal gain
or loss of a non-current asset or disposal group classified as held-for-sale that does not meet the definition
of a discontinued operation is included in profit or loss from continuing operations. Any gain or loss from
continuing operation of discontinued operations, including impairment loss and reversal amount, and gain
or loss on disposal is included in profit or loss from discontinued operations.
A disposal group which is planned to cease operation rather than for sale, and meets the criteria of a part of
discontinued operation, the Group presents it as discontinued operation from the date of cessation.
Where an operation is classified as discontinued in the current period, the information previously presented
as profit or loss from continuing operations in the comparable period is reclassified to profit or loss from
discontinued operations in the income statement for the current period. If the Group ceases to classify a
discontinued operation as held-for-sale, the information previously presented as discontinued operations in
the comparable period is reclassified to profit or loss from continuing operations.
14. Long-term Equity Investments
Long-term equity investments include equity investments in subsidiaries, joint ventures and associates.
When the Group can exercise significant influence over the investee, the investee is its associate.
(1) Recognition of initial investment cost
Long-term equity investments arising from business combination: the initial cost of a long-term equity
investment acquired through a business combination involving entities under common control is the
Group’s share of the carrying amount of the subsidiary’s equity in the consolidated financial statements of
the ultimate controlling party at the combination date. For a long-term equity investment obtained through
a business combination not involving entities under common control, the initial cost is the combination
cost.
For a long-term equity investment acquired other than through a business combination: a long-term equity
investment acquired other than through a business combination is initially recognized at the amount of cash
paid if the Group acquires the investment by cash, or at the fair value of the equity securities issued if an
investment is acquired by issuing equity securities.
(2) Subsequent measurement and recognition of profit or loss
Investment in subsidiaries is measured by the cost method, unless the investment meets the conditions for
held-for-sale while an investment in associates and joint ventures is measured by the equity method.
For a long-term equity investment which is subsequently measured by the cost method, except for cash
dividends or profit distributions declared but not yet distributed that have been included in the price or
consideration paid in obtaining the investments, the Group recognizes its share of the cash dividends or
profit distributions declared by the investee as investment income for the current period.
For a long-term equity investment which is subsequently measured by the equity method, no adjustment is
made to the initial investment cost if the initial cost of a long-term equity investment exceeds the Group’s
interest in the fair value of the investee’s identifiable net assets. If the initial investment cost is less than the
Group’s interest in the fair value of the investee’s identifiable net assets, the difference is recognized in
profit or loss for the current period and the carrying amount of the long-term equity investment is adjusted
accordingly.
Under the equity method, the Group recognizes its share of the investee’s net profit or loss as well as its
share of the investee’s other comprehensive income, as investment income or losses and other
comprehensive income, respectively. The carrying amount of the investment is also adjusted accordingly.
The carrying amount of the investment is reduced by the portion of any cash dividends or profit
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distributions declared by the investee that is attributable to the Group. Changes in the Group’s share of the
investee’s owners’ equity, other than those arising from the investee’s net profit or loss, other
comprehensive income or profit distribution, is recognized in the Group’s capital reserve (other capital
reserve), and the carrying amount of the long-term equity investment is adjusted accordingly. The Group
recognizes its share of the investee’s net profits or losses based on the fair values of the investee’s
individual separately identifiable assets at the time of acquisition, after making appropriate adjustments
thereto in conformity with the accounting policies and accounting periods of the Group.
When the Company becomes capable of exercising joint control or significant influence (but not control)
over an investee due to additional investment or other reasons, the Group uses the fair value of the
previously-held equity investment, together with additional investment cost, as the initial investment cost
under the equity method on conversion date. If the previously-held equity is classified as an investment in a
non-trading equity instrument that is measured at fair value through other comprehensive income, the
accumulated changes in fair value previously recognized in other comprehensive income related to it, shall
be transferred to retained earnings upon commencement of the equity method.
When the Group can no longer exercise joint control of or significant influence over an investee due to
partial disposal of the equity investment or other reasons, the remaining equity investment shall be
accounting for using Accounting Standard for Business Enterprises No. 22 - Recognition and Measurement
of Financial Instruments. The difference between the fair value and the carrying amount of the remaining
equity investment shall be recognized in profit or loss for the current period at the date when the joint
control or significant influence is lost. Any other comprehensive income previously recognized under the
equity method shall be treated on the same basis as would have been required if the Group had directly
disposed of the related assets or liabilities for the current period upon discontinuation of the equity method.
Other movement of owners’ equity related to original equity investment is transferred to profit or loss for
the current period.
When the Group can no longer exercise control over an investee due to partial disposal of the equity
investment or other reasons, and able to exercise joint control of or significant influence over an investee
with the remaining equity after disposal, the remaining equity is adjusted by equity method as would have
been applied from the date of acquisition. When the Group cannot exercise joint control of or significant
influence over an investee with the remaining equity after disposal, the difference between the fair value
and the carrying amount of the remaining equity investment shall be recognized in profit or loss for the
current period at the date when the control is lost in accordance with Accounting Standard for Business
Enterprises No. 22 - Recognition and Measurement of Financial Instruments.
When the Group can no longer exercise control over an investee due to new capital injection by other
investors, and the Group can exercise joint control of or significant influence over an investee, the Group
recognizes its share of the investee’s newly added net assets based on the new shareholding percentage. The
difference between its new share of the investee’s newly added net assets and the reduction in the
shareholding percentage of the original long-term equity investment is recognized in profit or loss for the
current period. The long-term equity investment is adjusted accordingly to the new shareholding percentage
by the equity method as it would have been used from the date of acquisition.
Unrealized profits or losses resulting from transactions between the Group and its associates or joint
ventures are eliminated to the extent of the Group’s interest in the associates or joint ventures. The Group
recognized them as investment income or loss. Any losses resulting from transactions between the Group
and the investee, which are attributable to impairment loss shall not be eliminated.
(3) Criteria for determining the existence of joint control or significant influence over an investee
Joint control is the contractually agreed sharing of control of an arrangement, which exists only when
decisions about the relevant activities require the unanimous consent of the parties sharing control. When
assessing whether a joint control is existed, the Group considers whether the arrangement is controlled by
all participants or a group of participants collectively. The Group also considers whether strategic decisions
relating to the investee’s relevant activities require the unanimous consent of all participant parties that
sharing of control. All participants or a group of participants are considered to control the arrangement
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collectively if they must act together to determine the activities related to an arrangement. If there are two
or more groups of participants that can control an arrangement collectively, joint control is not exist.
Protective rights are not taken into consideration when assessing whether a joint control is existed.
Significant influence is the power to participate in the financial and operating policy decisions of an
investee but does not have control or joint control over those policies. When determining whether the
Group can exercise significant influence over an investee, it considers the impact of direct or indirect
voting rights held by the Group as well as the assumption of the current exercisable potential rights held by
the Group or other parties have been converted into investee’s equity, including the impact of convertible
warrants, share options and convertible bonds.
When the Group holds 20% (inclusive) or more but less than 50% of investee’s voting shares through its
subsidiaries directly or indirectly, the Group has significant influence over the investee. Unless there is
clear evidence indicated that the Group cannot participate in the production and business decisions of the
investee, and therefore significant influence is not existed. When the Group holds 20% (exclusive) or less
of the voting shares, the Group does not have significant influence over the investee. Unless there is clear
evidence indicated that the Group can participate in the production and business decisions of the investee
so as to form a significant influence.
(4) Equity investments held-for-sale
Accounting treatment for an entire or partial equity investment in an associate or a joint venture that is
classified as held-for-sale, please refer to Note III. 13.
Any remaining equity investment that has not been classified as held-for-sale shall be measured by using
the equity method.
When an equity investment in an associate or a joint venture that has been previously classified as
held-for-sale no longer meets the criteria of held-for-sale, the equity method shall be adopted and
retrospective adjustment is required from the date when it is classified as assets held-for-sale.
(5) Method of impairment testing and impairment provision
For impairment on investments in subsidiaries, associates and joint ventures, please refer to Note III. 22.
15. Investment Properties
Investment properties are properties held either to earn rental income or for capital appreciation or both.
The Group’s investment properties include leased land use rights, land use right held and ready to transfer
after appreciation and leased buildings.
The Group’s investment properties are initially measured at acquisition cost. They are depreciated or
amortized in accordance with the relevant rules of fixed assets or intangible assets.
For impairment on investment properties that are subsequently measured by the cost model, please refer to
Note III. 22.
The balance of the disposal income from the sale, transfer, scrapping or damage of the investment real
estate after deducting its book value and relevant taxes shall be recorded into the current profit and loss.
16. Fixed Assets
(1) Recognition of fixed assets
Fixed assets represent the tangible assets held by the Group for the use in production of goods, in supply of
services, for rental or for administrative purposes with useful lives over one accounting year.
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Fixed assets are only recognized when its related economic benefits is probable to flow to the Group and its
cost can be measured reliably.
Fixed asset are initially measured at cost up on acquisition.
Subsequent expenditures related to fixed assets are recognized as the cost of fixed assets when it is
probable that the related economic benefits will flow to the Group and their costs can be measured reliably.
The costs of routine repairs of fixed assets that do not qualify for capitalization of subsequent expenditures
on fixed assets are recognized in the current profit or loss or as the cost of the related assets as incurred,
depending on the object of benefit. For the replaced portion, the carrying amount is derecognized.
(2) Depreciation of fixed assets
The Group adopts the straight-line method for depreciation. Fixed asset begins to be depreciated when it is
ready for its intended use, and stops being depreciated when it is derecognized or classified as non-current
assets held for sale. Without considering the provision for impairment, the Group determines the annual
depreciation rate of fixed assets according to the asset categories, estimated useful lives and estimated
residual value of fixed as follows:
Estimated useful life
Category Residual value rate % Depreciation rate %
(years)
Plant and buildings 5-40 (Note) 5 19.00-2.38
Machinery and
3-12 5 31.67-7.92
equipment
Motor vehicles 5 5 19.00
Electronic equipment 3-5 5 31.67-19.00
Others 3-5 5 31.67-19.00
Note:
① For the immovable buildings on the leased land, they are depreciated over the shorter of the lease
term of land use right and the expected useful lives of the immovable buildings.
② The Group purchased freehold lands in India, Ecuador and Indonesia. No depreciation is
recognizes for these lands because their estimated useful lives is uncertain. The Group tests for
impairment on these lands every year.
For impaired fixed assets, depreciation rate is calculated based on the carrying amounts after deducting the
provision for impairment.
(3) For the impairment on fixed assets, please refer to Note III. 22.
(4) Recognition, measurement and depreciation of fixed assets acquired under finance leases
Fixed assets leased by the Group are recognized as finance leases when they meet one or more of the
following criteria:
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① The ownership of leased assets is transferred to the Group by the end of the lease term.
② The Group has the option to purchase the leased asset at a price that is expected to be sufficiently lower
than the fair value at the date of the option becomes exercisable for it to be reasonably certain, at the
inception of the lease, that the option will be exercised.
③ Even if the ownership of the assets is not transferred, the lease term covers for the most of the useful
life of the leased asset.
④ At the inception of lease, the present value of minimum lease payments amounts is substantially all of
the fair value of leased asset.
⑤ Leased assets are of a specialized nature that only the Group can use them without major
modifications.
For fixed assets acquired under finance leases, the Group recognize their cost at the lower of the fair value
of leased asset at the commencement of the lease term and the present value of minimum lease payment.
The minimum lease payments are recorded as long-term payables. The difference between the carrying
amount of the leased assets and the minimum lease payments is recognized as unrecognized financing
charges. Initial direct costs such as handling charges, legal fees, travelling expenses and stamp duty
attributable to the finance lease that are incurred by the Group are included in the carrying amount of the
leased asset. Unrecognized finance charges are amortized by using the effective interest method over the
lease term.
Depreciation is accounted for in accordance with the accounting policies of fixed assets. If there is
reasonable certainty that the Group will obtain ownership of a leased asset at the end of the lease term, the
leased asset is depreciated over its estimated useful life. Otherwise, the leased asset is depreciated over the
shorter of the lease term and its estimated useful life.
(5) At the end of each year, the Group reviews the useful lives, estimated net residual values and depreciation
methods of fixed assets
The Group adjusts the useful lives and estimated net residual values of fixed assets if they are different
from the original estimated useful lives and net residual values.
(6) Overhaul costs
Overhaul costs occurred in regular inspection are recognized in the cost if there is undoubted evidence to
confirm that this part meets the recognition criteria of fixed assets, otherwise, the overhaul costs are
recognized in profit or loss for the current period. Fixed assets are depreciated during the period of regular
overhaul.
17. Construction-in-progress
Construction-in-progress is recognized based on the actual construction cost, including all expenditures
incurred for construction projects, capitalized borrowing costs and any other costs directly attributable to
bring the asset to working condition for its intended use.
Construction in progress is transferred to fixed asset when it is ready for its intended use.
For the impairment on construction in progress, please refer to Note III. 22.
18. Borrowing Costs
(1) Recognition of capitalized borrowing costs
Borrowing costs incurred directly attributable to the acquisition, construction or production of a qualifying
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asset shall be capitalized as part of the cost of the asset. Other borrowing costs are expensed in profit or
loss for the current period as incurred. The capitalization of borrowing costs shall commence only when the
following criteria are met:
① asset expenditures have been incurred, including expenditures in the form of cash payment, transfer of
non-cash assets or the assumption of interest-bearing liabilities;
② borrowing costs have been incurred;
③ acquisition, construction or production activities necessary for bring the asset to working conditions for
its intended use or ready for sales have been commenced.
(2) Capitalization period of borrowing costs
Capitalization of borrowing costs ceases when qualifying the asset being acquired, constructed or produced
becomes ready for its intended use, the borrowing costs incurred thereafter are recognized as expenses in
profit or loss for the current period.
Capitalization of borrowing costs is suspended during periods in which the acquisition or construction of a
qualifying asset is interrupted abnormally and the interruption is for a continuous period of more than 3
months. The borrowing costs incur during the normal interrupted period are continue to be capitalized.
(3) Capitalization rate and calculation method of borrowing costs
For specific-purpose borrowings, the amount of interest to be capitalized is the actual interest expense
incurred during the current period less any interest income earned from depositing the borrowed funds or
any investment income on the temporary investment of those funds before being used on the asset. To the
extent that the Group borrows funds generally and uses them for the acquisition and construction of a
qualifying asset, the amount of borrowing costs eligible for capitalization is determined by applying a
capitalization rate to the weighted average of the excess amounts of cumulative expenditure on the asset
over the above amounts of specific borrowings. The capitalization rate is the weighted average of the
interest rates applicable to the general-purpose borrowings.
During the capitalization period, exchange differences of specific-purpose borrowings in foreign currency
are capitalized while the exchange differences of general-purpose borrowings in foreign currency are
recognized in profit or loss for the current period.
19. Biological Assets
(1) Recognition criteria for biological assets
Biological assets are assets that composed of living animals and plants. Biological assets shall be
recognized if they satisfy all of the following conditions:
① The entity owns or controls the biological asset due to past transactions or events;
② The economic benefits or potential service related to the biological asset are probable to flow into the
entity;
③ The cost of the biological asset can be measured reliably.
(2) Classification of biological assets
The Group’s biological assets include consumptive biological assets and productive biological assets.
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① Consumptive biological assets
Consumptive biological assets is the biological assets held-for-sale or harvested as agricultural products in
the future, including livestock for sale, etc. Consumptive biological assets are initially measured at cost.
The cost of self-propagating or breeding consumptive biological assets is the necessary expenditure
incurred that can directly attributable to the asset before the asset is sold or shipped, including capitalized
borrowing costs. Subsequent expenditures after harvest such as management, protection and feeding
expenses are recognized in the profit or loss for the current period.
When the consumptive biological assets are harvested or sold, the cost of goods sold is recognized based on
the carrying amount using the weighted average method.
② Productive biological assets
Productive biological assets are the biological assets held for the purpose of producing agricultural products,
providing services or leasing, including livestock production. Productive biological assets are initially
measured at cost. The cost of productive biological asset by self-growing or propagating is the necessary
expenditure directly attributable to the asset incurred before the asset reaches its intended production and
operation purpose, including capitalized borrowing costs.
The subsequent expenditures for managing, protecting and feeding the productive biological assets incurred
after crown closure or reaching its intended objective of production and operation is recognized in profit or
loss for the current period.
Productive biological assets are depreciated by straight-line method. Depreciation for each period is
calculated and recognized based on the estimated useful lives less residual value of each type of biological
assets.
At the end of each year, the Group reviews the useful lives, estimated net residual values and depreciation
methods of productive biological assets. If there is any change, it is treated as a change in accounting
estimates.
The proceeds on disposal of productive biological asset for the sales, inventory loss, dead or damage less
the carrying amount and related taxes are recognized in profit or loss for the current period.
(3) Impairment of biological assets
When the net realizable value of a consumptive biological asset is lower than its carrying amount, the
difference is recognized as the impairment provision and the corresponding impairment loss is recognized
in profit or loss for the current period. If the previous factors caused the decline in value of consumptive
biological asset have disappeared at the balance sheet date, the previously recognized provision for decline
in value of consumptive biological assets is reversed, to the extent of provision recognized in the past, the
reversal amount is recognized in profit or loss for the current period.
For the impairment of productive biological assets, please refer to Note III. 22.
20. Intangible Assets
Intangible assets include land use rights, patent rights, software use rights, trademarks, and non-patent, etc.
Intangible asset is initially measured cost and its useful life is determined at the time of acquisition. An
intangible asset with a finite useful life is amortized by a method which can reflect the expected realization
of economic benefits related to the asset since the intangible asset is available for use. When the expected
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realization of economic benefits cannot be reliably determined, intangible asset is amortized under
straight-line method. An intangible asset with an indefinite useful life is not amortized.
At the end of each year, the Group reviews the useful life and amortization method of intangible assets with
finite useful life. If there is any change, adjustment made to original estimates and it shall be treated as the
change of accounting estimate.
On the balance sheet date, an intangible asset shall be derecognized in profit or loss for the current period
when it is not expected to generate future economic benefits.
For the impairment of intangible assets, please refer to Note III. 22.
21. Research and Development Expenditure
Expenditure on an internal research and development project is classified into expenditure incurred during
the research phase and expenditure incurred during the development phase.
Expenditures in the research phase is recognized in the profit or loss for the current period when incurred.
Expenditure in the development phase is capitalized only when the Group satisfies all of the following
criteria: there is technical feasibility of completing the intangible asset so that it can be used or sold; has the
intention to complete the intangible asset, and use or sell it; ways to generate economic benefits from the
intangible asset, including the existence of a market for the output of the intangible asset or the intangible
asset itself or, evidence of usefulness where it will be used internally; has sufficient technical, financial and
other resources to complete the development of intangible assets as well as the ability to use or sell the
intangible asset; the expenditure attributable to the intangible asset during its development phase can be
measured reliably. If the development expenditure does not satisfied the above criteria, it is recognized as
profit or loss for the current period.
The Group’s research and development projects will enter into the development phase when they meet the
above criteria, technical and economic feasibility research is completed and granted the necessary approval
of the project.
Capitalized expenditure on the development phase is presented as Development costs in the balance sheet
and transferred to intangible assets when the project is reached its intended use.
22. Asset Impairment
The impairment of long-term equity investments in subsidiaries, associates and joint ventures, investment
properties measured by the cost model, fixed assets, construction in progress, productive biological assets
measured by the cost model, intangible assets, goodwill, etc. (excluding inventories, investment
properties measured by the fair value model, deferred tax assets and financial assets) are determined as
follows:
At the balance sheet date, the Group assesses whether there is any indication of impairment. If any
indication exists, the Group will estimate the recoverable amount and test for impairment. For goodwill
arising from a business combination, intangible assets with indefinite useful life and intangible assets that
are not ready for use are tested for impairment annually, regardless of whether there is any indication of
impairment.
The recoverable amount of an asset is the higher of its fair value less disposal costs and the present value of
expected future cash flows. The Group estimates the recoverable amount based on each individual asset. If
it is impossible to estimate the recoverable amount of each individual asset, the Group determines the
recoverable amount for the asset group to which the asset belongs. An asset group is determined based on
whether the main cash inflow generated by the asset group is independent of the cash inflow of other assets
or asset groups.
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An impairment loss is recognized in profit or loss when the recoverable amount of an asset is less than its
carrying amount. A provision for impairment of the asset is recognized accordingly.
For the impairment test of goodwill, the carrying amount of goodwill arising from a business combination
shall be allocated to the relevant asset groups by using a reasonable method from the date of acquisition. If
the carrying amount of goodwill is unable to be allocated to the asset group, it shall be allocated to the
relevant set of asset groups. Relevant asset group or set of asset groups is the asset group or group of asset
groups, that is expected to benefit from the synergies of the combination and not greater than the reportable
segment of the Group.
If any impairment indication exists in asset group or set of asset groups related to goodwill, the Group shall
perform an impairment test for the asset group or set of asset groups which does not contain goodwill first,
the recoverable amount is calculated and recognized the corresponding impairment losses. Then the Group
shall perform an impairment test for the asset group or set of asset groups that contain goodwill by
comparing its carrying amount and recoverable amount. If the recoverable amount is less than the carrying
amount, impairment loss of goodwill is recognized.
Once an impairment loss is recognized, it cannot be reversed in a subsequent period.
23. Long-term Deferred Expenses
Long-term deferred expenses are measured at cost and amortized by using straight-line method over the
expected beneficial period. If the Group cannot benefit from the long-term deferred in the future accounting
period, the amortized cost shall be recognized in profit or loss for the current period.
24. Employee Benefits
(1) Scope of employee benefits
Employee benefits refer to all forms of consideration or compensation given by the Group in exchange for
service rendered by employees or for the termination of employment relationship. Employee benefits
include short-term employee benefits, post-employment benefits, termination benefits and other long-term
employee benefits. Benefits provided by the Group to the spouse, children, dependents, family members of
deceased employees or other beneficiaries are also part of the employee benefits.
Employee benefits are separately presented as Employee benefits payable and Long-term employee
benefits payable on the balance sheet based on the liquidity.
(2) Short-term employee benefits
Employee wages or salaries, bonuses, social insurance contributions such as medical insurance, work injury
insurance, maternity insurance and housing fund, measured at the amount incurred at the applicable
benchmarks and rates, are recognized as a liability as the employee provides services, with a corresponding
charge to profit or loss or included in the cost of assets where appropriate. If the liability is not expected to
be settled in full within 12 months after the end of the annual reporting period in which the employees
render the related services, and has significant financial impact, the liability will be measured at the
discounted value.
(3) Post-employment benefits
Post-employment benefit plan includes defined contribution plans and defined benefit plans. Defined
contribution plans are post-employment benefit plans which an entity pays a fixed amount of fee to an
independent fund and has no further payment obligation. Defined benefit plans are post-employment
benefit plans other than defined contribution plans.
Defined contribution plans
Defined contribution plans include basic pension insurance, unemployment insurance, etc.
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The contribution amount calculated according to the define contribution plan is recognized as a liability as
the employee provides services, with a corresponding charge to profit or loss or included in the cost of
assets where appropriate.
Defined benefit plans
For defined benefit plans, independent actuaries estimate the actuarial value at the balance sheet date to
determine the cost of welfare by using the projected unit credit method. The Group recognizes the
following components of employee benefits cost arising from defined benefit plan:
① service cost, comprising current service cost, past service cost and any gain or loss on settlement.
Current service cost is the increase in the present value of the defined benefit plan obligation resulting from
employee service in the current period. Past service cost is the increase or decrease in the present value of
the defined benefit plan obligation for employee service in prior periods, resulting from a plan amendment.
② net interest on the net defined benefit plan liabilities or assets, including interest income on plan assets,
interest cost on the defined benefit plan obligation and interest on the effect of the asset ceiling.
③ changes as a result of re-measurement of the net defined benefit liabilities or assets.
Item①and item②above should be recognized in profit or loss for the current period unless another
accounting standard requires or permits the inclusion of the employee benefit costs in the cost of assets.
Item③shall be recognized in other comprehensive income and shall not reclassified to profit or loss in a
subsequent period. On termination of defined benefit plans, other comprehensive income previously
recognized is transferred to retained earnings.
(4) Termination benefits
The Group provides termination benefits to employees, the employee liabilities arising from the
termination benefits shall be recognized with a corresponding charge to profit or loss at the earlier of the
following dates: when the Group cannot unilaterally withdraw the offer of termination benefits because of
an employee termination plan or a curtailment proposal; when the Group recognizes the costs or expenses
related to a restructuring plan involving the payment of termination benefits.
When the Group implements an internal retirement plan, the economic compensation before the formal
retirement date is attributable to the termination benefits. The salaries and social insurance payment to be
paid for the early-retired employee are recognized as one-off expense in profit or loss for the current period
between the date when the employee stops rendering service and formal retirement. Economic
compensation after the date of formal retirement (such as normal pension) shall be accounted for as
post-employment benefits.
(5) Other long-term employee benefits
The Group provides other long-term employee benefits to the employees. For those satisfied the conditions
for classifying as a defined contribution plan, they shall be accounted for in accordance with the
requirements relating to defined contribution plan as described above. When the benefits satisfied the
conditions for defined benefit plan, they shall be accounted for in accordance with the requirements relating
to defined benefit plan described as above. The movement arising from the remeasurement of net liabilities
or assets in the defined benefit plan shall be recognized in profit or loss for the current period or included in
the cost of assets where appropriate.
25. Provisions
A provision is recognized for an obligation related to a contingency if all the following conditions are
satisfied:
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(1) The Group has a present obligation;
(2) It is probable that an outflow of economic benefits will be required to settle the obligation;
(3) The amount of the obligation can be measured reliably.
A provision is initially measured at the best estimate of the expenditure required to settle the related present
obligation and the relevant risk, uncertainty and time value of money shall be taken into consideration.
Where the effect of the time value of money is significant, the best estimates are determined by discounting
the expected future cash flows. The Group reviews the carrying amount of a provision at the balance sheet
date and adjusts the carrying amount to the current best estimate.
If the entire or partial settlement related to the provision is expected to be compensated by a third party, and
the compensated amount can be received certainly, the compensated amount is recognized as an asset. The
recognized compensated amount shall not exceed the carrying amount of the provision.
26. Share-based Payment and Equity Instruments
(1) Types of share-based payment
The Group's share-based payment is classified into equity-settled share-based payment and cash-settled
share-based payment.
(2) Recognition method of the fair value of equity instruments
If an active market exists for the equity instruments such as stock option granted by the Group, the fair
value of the equity instrument shall be determined according to the quoted price in the active market. If an
active market does not exist, the fair value of the equity instrument shall be determined by using the option
pricing model. The Group considers the following factors when selecting the model: A) the exercise price
of the option; B) the validity period of the option; C) current price of underlying stock; D) expected
volatility of the stock price; E) expected dividend of the stock; F) risk-free interest rate within the validity
period of the option.
(3) Basis for the best estimate of exercisable equity instruments
At each balance sheet date of the waiting period, the Group revises the number of equity instruments that
will ultimately vest based on the best estimate of the latest number of eligible employees and other
subsequent information. On vesting date, the number of expected vested equity instruments should be
agreed with the actual number vested.
(4) Accounting treatments for the implementation, modification and termination of share-based payment plans
① Accounting treatment on the grant date
When the Group grants restricted shares to its employees under a share incentive plan, the Group shall
recognize the share capital and capital reserve (share premium) on the grant date based on the subscription
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received from employees. The Group shall recognize the repurchase obligation based on the total
repurchase amount as a liability, which shall be included in treasury stocks and presented as an allowance
item for shareholders’ equity in the balance sheet.
No accounting treatment is required for stock option granted to the employees under a share incentive plan
on the grant date.
② Accounting treatment during the waiting period
Equity-settled share-based payments of which vesting is conditional upon completion of services or
fulfillment of performance conditions are measured by recognizing services rendered during the period in
relevant costs or expenses and crediting the capital reserve accordingly at the fair value on the date of grant
according to the best estimates conducted by the Group at each balance sheet date during the waiting period.
If the share incentive plan is cancelled by forfeiture when the vesting conditions are not satisfied during the
waiting period, the Group reverses the previously recognized relevant costs or expenses.
Restricted shares issued by the Group are eligible for profit distribution where cash dividends are
cancellable. For the cash dividends allocated to the holders of restricted shares where their restricted shares
are expected to be relieved in the future, the Group treats such cash dividends as profit distribution. For the
cash dividends allocated to the holders of restricted shares where their restricted shares are expected not to
be relieved in the future, the Group records the cash dividends against related liability. If any subsequent
information indicates that the number of restricted shares that are expected not to be relieved in the future is
different from the previous estimate, it shall be treated as a change in accounting estimates.
③ Accounting treatment on the vesting day or the day when the shares become unlock
When restricted stocks are regarded as the equity instrument for share-based payment, the Group shall
repurchase and cancel those shares which did not meet the relevant requirement for unlocking. When the
treasury stocks are cancelled, the share capital shall be reduced to the extent of the total par value of the
treasury stocks cancelled. Where the cost of the treasury stocks cancelled exceeds the total par value, the
excess is deducted from capital reserve (share premium), surplus reserve and retained earnings sequentially.
If the cost of treasury stocks cancelled is less than the total par value, the difference is credited to the
capital reserve (share premium). When the treasury stocks are transferred, any excess of proceeds above
cost is recognized in capital reserve (share premium) while any shortfall is deducted against capital reserve
(share premium), surplus reserve and retained earnings sequentially. For restricted shares satisfied the
unlock conditions where no repurchase is required, the Group reduced the corresponding liabilities and
treasury stocks by their carrying amount, any difference is adjusted to capital reserve (share premium).
When stock options are regarded as the equity instrument for share-based payment, the Group shall
recognizes the subscription paid by the employees as share capital on the vesting date and the capital
reserve recognized during the waiting period shall be transferred to share premium at the same time.
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27. General Risk Provision
General risk provision refers to the provision for loan losses which has been deducted after calculating the
potential risk estimate of a risky asset using the standard method, and is set aside from undistributed profits
and used to partially cover the potential loss that has not been identified. Risk assets include loans,
advances and other current assets held by subsidiaries engaged in financial business.
28. Other Financial Instruments such as Preference Shares, Perpetual Bonds
(1) Distinction between financial liabilities and equity instruments
The Group classifies the financial instrument or its components as a financial asset, financial liabilities or
equity instruments at initial recognition, according to the contract terms of the financial instrument issued
and its economic substance, not only in legal form, and in conjunction with the definition of financial assets,
financial liabilities and equity instruments.
(2) Accounting treatment for preference shares, perpetual bonds
The Group initially recognizes and measures financial instrument in accordance with the standards of
financial instrument. On the basis of the category of financial instrument issued, interest is accrued or
dividends are paid at each balance sheet date according to the relevant accounting standards. For the
financial instrument classified as equity instrument, the interest or dividend paid is treated as profit
distribution of the Group, and the repurchase and cancellation of the financial instrument is treated as the
movement in equity. For the financial instrument classified as financial liability, the interest or dividend
paid is treated as borrowing cost, and gains or losses arising from the repurchase or redemption of financial
instrument is recognized in profit or loss for the current period.
When the Group issues financial instrument, the relevant transaction costs such as handling charges and
commission are recognized the initial amount of issued instrument if it is classified as debt instrument
measured at amortized cost. The transaction costs are deducted against equity if it is classified as equity
instrument.
29. Revenue
(1) General principle
The Group recognizes the revenue when it satisfied its performance obligation stated in the contract, that is,
when the control of the good or service is transferred to the customer.
If the contract comprises two or more performance obligations, the Group allocates the transaction price to
each performance obligation based on the proportion of sales price for the goods or service committed by
each performance obligation at the commencement date of the contract. Revenue is recognized the
allocated transaction for each performance obligation.
If one of the following conditions is satisfied, the Group satisfies its performance obligation over time;
Otherwise, the performance obligation is satisfies at a point in time.
① The customer simultaneously receives and consumes the economic benefits provided by the Group's
performance as the Group's performs its obligation;
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② The Group’s performance produces good that the customer control as the good is created;
③ The Group’s performance produces goods without an alternative use to the Group and the Group has
an enforceable right to payment for performance completed to date.
For performance obligation satisfied over time, the Group shall recognize the revenue over time by
measuring the progress toward complete satisfaction of that performance obligation. If the progress cannot
be reasonably measured and the Group is expected to be compensated for the costs already incurred,
revenue shall be recognized to the extent of the costs that have been incurred until the progress can be
reasonably measured.
For performance obligation satisfied at a point in time, the Group recognizes revenue at the time when the
control of good or service is transferred to the customer. The Group considers the following indications
when determining whether the control of good or service is transferred to the customer:
① The Group has a present right to payment for good or service, i.e. the customer has a present payment
obligation for the good
② The Group has transferred the legal title of the good to the customer, i.e. the customer has the legal
title.
③ The Group has transferred the physical good to the customer, i.e. the customer has physical possession.
④ The Group has transferred the significant risks and rewards of ownership of the good to the customer,
i.e., the customer has the significant risks and rewards of ownership.
⑤ The customer has accepted the good.
⑥ Other indications that the customer has the control of the good.
Contract asset is recognized when the Group has the right to consideration in exchange for goods or
services that the Group has transferred to ta customer (such right is conditional other than the passage of
time). Impairment of contract assets is calculated based on the expected credit losses (please refer to Note
III. 10 (6)). The Group presented the right to consideration is unconditional if only the passage of time is
required before payment of that consideration is due, as accounts receivable.
Contract assets and contract liabilities under the same contract shall be presented as a net amount. The net
amount is presented as Contract assets or Other non-current assets according to liquidity if it has a debit
balance. While the net amount is presented as Contract liabilities or Other non-current liabilities according
to liquidity if it has a credit balance.
(2) Specific method
The specific recognition method for the Group's sales of goods is as follows:
The Group recognizes the revenue when the customers collect the goods by door or the goods have been
delivered to the designated location, and the customers accept the goods and obtain the control of goods.
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For the sale of goods with sales return clauses, revenue recognition is limited to extent of cumulative
recognized revenue that is unlikely to be materially reversed. The Group recognizes a liability according to
the expected refund. The carrying amount of the returned goods less than the estimated cost to recover the
goods (including the decline in value for the returned goods) is recognized as an asset at the same time.
30. Contract Cost
Contract costs include the incremental costs of obtaining a contract and costs to fulfill a contract.
Incremental costs of obtaining a contract are the cost only incurred if the contract is obtained (i.e.
commission). The Group expects to recover these costs and recognized as an asset of incremental costs of
obtaining a contract. Other expenditures of obtaining a contract except for the incremental costs expected to
be recovered, are recognized in profit or loss for the current period when incurred.
The Group recognizes the costs to fulfill a contract as an asset if the costs are incurred for fulfilling the
performance obligation of the contract, do not fall within the scope of other accounting standards, such as
inventory, and meet the following criteria:
① The costs directly related to a contract or an anticipated contract that can specifically identify, including
direct labor, direct materials, manufacturing overheads (or similar expenses), costs explicitly chargeable
to the customer and other costs incurred solely for the contract;
② The costs generate or enhance resources of Group that will be used in satisfying performance
obligations in the future.
③ The cost is expected to be recovered.
Assets recognized from costs of obtaining a contact and costs to fulfill a contract (hereinafter referred to as
"assets related to contract cost") shall be amortized in the profit or loss for the current period on the same
basis as revenue recognition of goods or services related to such assets. If the amortization period does not
exceed one year, it is recognized in profit or loss for the current period when it occurs.
When the carrying amount of the assets related to the contract cost is greater than the difference between
the following two items. The Group shall make provision for impairment of the excess amount and
recognize as impairment loss:
① The remaining consideration that the Group is expected to be received as a result of the transfer of the
goods or services related to the asset;
② Costs probably incurred for transferring of the relevant goods or services
When the costs to fulfill the contract is recognized as assets with an amortization period less than one year
or one normal business cycle at initial measurement, it is presented as Inventories. It is presented as Other
non-current assets if the amortization period is over one year or one normal business cycle at initial
measurement.
When the costs of obtaining a contact is recognized as assets with an amortization period less than one year
or one normal business cycle at initial measurement, it is presented as Other current assets. It is presented
as Other non-current assets if the amortization period is over one year or one normal business cycle at
initial measurement.
31. Government Grants
A government grant is recognized when there is reasonable assurance that the grant will be received and
that the Group will comply with the conditions attaching to the grant.
If a government grant is in the form of a transfer of a monetary asset, it is measured at the amount received
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or receivable. If a government grant is in the form of a transfer of a non-monetary asset, it is measured at
fair value. If fair value cannot be reliably determined, it is measured at a nominal amount of RMB 1.
Government grants related to assets are grants whose primary condition is that the Group qualifying for
them should purchase, construct or otherwise acquire long-term assets. Government grants related to
income are grants other than those related to assets.
For government grants with unspecified purpose, the amount of grants used to form a long-term asset is
regarded as government grants related to an asset, the remaining amount of grants is regarded as
government grants related to income. If it is not possible to distinguish, the amount of grants is treated as
government grants related to income.
A government grant related to an asset is offset against the carrying amount of the related asset, or
recognized as deferred income and amortized to profit or loss over the useful life of the related asset on a
reasonable and systematic manner. A grant that compensates the Group for expenses or losses already
incurred is recognized in profit or loss or offset against related expenses directly. A grant that compensates
the Group for expenses or losses to be incurred in the future is recognized as deferred income, and included
in profit or loss or offset against related expenses in the periods in which the expenses or losses are
recognized. Government grants measured at nominal amounts are directly recognized in the profit or loss
for the current period. The Group applies the same method to the same or similar government grant.
A grant related to ordinary activities is recognized as other income or offset against related expenses based
on the economic substance. A grant not related to ordinary activities is recognized as non-operating income.
For repayment of a government grant, if the government grant is offset against the carrying amount of the
related asset at the time of recognition, the carrying amount of the related asset shall be adjusted. If there is
related deferred income, the repayment is offset against the carrying amount of the deferred income, and
any excess is recognized in profit or loss for the current period. Otherwise, the repayment is recognized
immediately in profit or loss for the current period.
For the grant of interests on bank loan, the Group offset against the borrowing costs.
32. Deferred Tax Assets and Deferred Tax Liabilities
Income tax comprises of current tax and deferred tax. Current tax and deferred tax are both recognized in
current profit or loss except for the adjusted goodwill arising from business combination or the deferred tax
related to the transactions or events directly included in the owner's equity.
Temporary differences arising from the difference between the carrying amount of an asset or liability and
its tax base are recognized as deferred tax using the balance sheet liability method.
All the taxable temporary differences are recognized as deferred tax liabilities except for those incurred in
the following transactions:
(1) initial recognition of goodwill, or the initial recognition of an asset or liability in a transaction that is
not a business combination and neither affects the accounting profit nor taxable profit;
(2) taxable temporary differences associated with investments in the Group, associates and joint ventures,
and the Group is able to control the timing of the reversal of the temporary difference and it is probable that
the temporary difference will not reverse in the foreseeable future.
The Group recognizes a deferred tax asset for the deductible temporary differences, deductible losses and
tax credits carried forward to subsequent periods, to the extent that it is probable that future taxable profits
will be available against which deductible temporary differences, deductible losses and tax credits can be
utilized, except for those incurred in the following transactions:
(1) a transaction that is not a business combination and neither affects the accounting profit nor taxable
profit;
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(2) deductible temporary differences associated with investments in the Group, associates and joint
ventures, the corresponding deferred tax asset is recognized when both of the following conditions are
satisfied: it is probable that the temporary difference will reverse in the foreseeable future; and it is
probable that taxable profits will be available in the future against which the temporary difference can be
utilized.
At the balance sheet date, the Group measures the deferred tax assets and deferred tax liabilities according
to the applicable tax rate during the period when the assets are expected to be recovered or the liabilities are
settled, and reflect the income tax impact of the expected asset recovery or liability settlement method on
the balance sheet date.
At the balance sheet date, the Company reviews the carrying amount of any deferred tax asset. If it is
probable that sufficient taxable profits will not be available in future periods to allow the benefit of the
deferred tax asset to be utilized, the carrying amount of the deferred tax asset is reduced. Any such
reduction in amount is reversed to the extent that it becomes probable that sufficient taxable profits will be
available.
33. Leases
(1) Identifying a lease
At the commencement date of the lease, the Group, as a lessee or a lessor, shall assess whether the
customer under the contract has the right to obtain substantially all of the economic benefits from use of the
identified asset during the period of use and has to right to direct the use of the identified asset during the
period of use. The Group considers the contract to be a lease or to include a lease if one of the parties to the
contract conveys the right to control the use of one or more identified assets for a certain period of time in
exchange for consideration.
(2) The lease where the Group is a lessee
At the commencement date of the lease, the Group recognizes right-of-use assets and lease liabilities for all
leases, except for short-term leases and leases of low-value assets that are subject to simplified treatment.
For the accounting policy of the right-of-use assets, see Note III.34.
Lease liabilities are initially measured at the present value of the lease payments outstanding at the
commencement date of the lease term using the present value calculated using the interest rate implicit in
the lease, and if the interest rate implicit in the lease cannot be determined, the incremental borrowing rate
shall be used as the discount rate. The lease payments include: fixed payments and in-substance fixed
payments; if there are lease incentives, the relevant amount of lease incentives shall be deducted; variable
lease payments depending on an index or a rate; the exercise price of the option provided that the lessee is
reasonably certain that the option will be exercised; the amount to be paid to exercise the option to
terminate the lease if the lease term reflects that the lessee will exercise the option to terminate the lease;
and the amount expected to be payable based on the residual value of the security provided by the lessee.
The interest expense of the lease liability in each period of the lease term shall be calculated in accordance
with the fixed periodic interest rate and recorded into the profit or loss of the current period. The variable
lease payment not included in the measurement of lease liabilities shall be recorded into the current profit
or loss when actually incurred.
Short-term leases
A short-term lease is a lease that, at the commencement date, has a lease term of 12 months or less, except
for a lease that contains a purchase option.
The Group records the lease payment amount of short-term lease into the cost of relevant assets or current
profit or loss in each period of the lease term according to the straight-line method
Leases of Low-value assets
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Leases of low value assets refer to lease of a single leased asset whose value is less than RMB40, 000 when
it is a brand-new asset.
The Group includes the lease payment of the low-value asset lease into the cost of the relevant asset or
current profit or loss in each period of the lease term according to the straight-line method
For low-value asset leases, the Group chooses to apply the above simplified treatment depending on the
specific circumstances of each lease.
Lease modifications
A lessee shall account for a lease modification as a separate lease if both:: (i) the lease modifies the scope
of the lease by adding the right to use one or more underlying assets; and (ii) the increase in consideration
must be commensurate with the stand-alone price for the increase in scope and any appropriate adjustments
to that stand-alone price to reflect the circumstances of the particular contract.
If a lease modification is not accounted for as a separate lease, at the effective date of the lease
modification, the Group reallocates the consideration in the modified lease, redetermines the lease term,
and remeasures the present value of lease liability according to the revised lease payments and revised
discount rate.
If a lease modification results in a reduction in the scope of the lease or a shortening of the lease term, the
Group reduces the carrying amount of the right-of-use asset accordingly and recognizes the gain or loss
related to partial termination or full termination of the lease in profit or loss for the current period.
If all other lease modifications result in the remeasurement of the lease liabilities, the Group makes a
corresponding adjustment to the carrying amount of right-of-use asset.
(3) The lease where the Group is a lessor
When the Group acts as the lessor, the leases that substantially transfer all the risks and rewards related to
the ownership of the assets are recognized as finance leases, and other leases other than finance leases are
recognized as operating leases.
Finance lease
In the case of finance leases, the Group takes the net investments in the lease as the carrying amounts of
finance lease receivables at the commencement date, and the net lease investments are the sum of the
unguaranteed residual value and the present value of the lease payments receivable at the commencement
date discounted at the implicit interest rate. The Group, as the lessor, calculates and recognizes interest
income for each period of the lease term at a fixed periodic rate. The variable lease payments obtained by
the Group as the lessor and not included in the measurement of the net lease investments shall be recorded
into the current profit or loss when actually incurred.
The derecognition and impairment of finance lease receivable shall be accounted for in accordance with the
provisions of Accounting Standards for Business Enterprises No. 22 - "Recognition and Measurement of
Financial Instruments" and Accounting Standards for Business Enterprises No. 23 - "Transfer of Financial
Assets".
Operating lease
For the rent in the operating lease, the Group shall recognize the profit or loss of the current period in
accordance with the straight-line method during each period of the lease term. The initial direct costs
incurred in connection with the operating lease shall be capitalized, allocated on the same basis as the
recognition of rental income during the lease term and recorded into the current profit or loss in
installments. The variable lease payments obtained in connection with the operating lease and not included
in the lease payments shall be recorded into the current profit or loss when actually incurred.
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Lease modification
If an operating lease is modified, the Group will treat it as a new lease for accounting treatment from the
effective date of the modification, and the amount of lease payments received in advance or receivable
related to the lease before the modification will be regarded as the amount of new lease payments.
The Group will treat the finance lease modification as a separate lease if the following conditions are met:
(i) the lease modifies the scope of the lease by adding the right to use one or more underlying assets; and (ii)
the increase in consideration must be commensurate with the stand-alone price for the increase in scope and
any appropriate adjustments to that stand-alone price to reflect the circumstances of the particular contract.
If the finance lease modification is not accounted for as a separate lease, the Group will deal with the
modified lease under the following circumstances: (i) if the modification takes effect on the
commencement date of the lease, the lease will be classified as an operating lease, and the Group will treat
it as a new lease from the effective date of the lease modification, and take the net investment in lease
before the effective date of the lease modification as the carrying amount of the leased asset; (ii) if the
modification takes effect on the commencement date of the lease, the lease will be classified as a finance
lease, and the Group will conduct accounting treatment in accordance with the provisions of the
Accounting Standards for Business Enterprises No. 22 - "Recognition and Measurement of Financial
Instruments" regarding the modification or renegotiation of contract.
34. Right-of-use Assets
(1) Criteria for recognition of right-of-use assets
A right-of-use asset represents the right of the Group, as a lessee, to utilize the leased assets over the
duration of an agreed-upon lease term.
On the commencement date, the right-of-use assets shall be initially measured at cost. The cost includes:
the initial measurement of the lease liability; for the amount of lease payments paid on or before the
commencement date of the lease term, if there is a lease incentive, the relevant amount of lease incentive
already enjoyed will be deducted; initial direct costs incurred by the Group as the lessee; the costs which
the Group, as the lessee, expects to incur in dismantling and removing the leased assets, restoring the
premises on which the leased assets are located or restoring the leased assets to the state agreed in the lease
terms. The Group, as the lessee, shall recognize and measure the costs of demolition and restoration in
accordance with the Accounting Standards for Business Enterprises No. 13 - “Contingencies”. Subsequent
adjustments are made for any remeasurement of the lease liability.
(2) Depreciation method of the right-of-use assets
The Group uses the straight line method of depreciation. Where the Group, as the lessee, can reasonably
determine that it obtains the ownership of the leased assets upon expiration of the lease term, depreciation
shall be accrued over the remaining useful life of the leased assets. Where it is impossible to reasonably
determine that the ownership of the leased asset can be acquired at the expiration of the lease term,
depreciation shall be accrued in the shorter period between the lease term and the remaining useful life of
the leased asset.
(3) See Note III. 22 for the impairment test method of the right-of-use assets and the loss allowance.
35. Repurchase Shares
When the Group repurchase its own shares, those shares are treated as treasury stock before they are
cancelled or transferred. All the expenditures relating to the repurchased shares are recorded as the cost of
treasury stock. The consideration and transaction costs paid in share repurchase reduce the shareholders’
equity. No profit or loss is recognized when repurchasing, transferring or canceling the Group's shares.
When the treasury stock is transferred, the difference between the actual amount received and the carrying
amount of treasury stock is recognized in capital reserve. Any excess is recognized in surplus reserve and
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retained earnings. When the treasury stock is cancelled, the share capital should be reduced to the extent of
the total par value and the number of shares cancelled. The difference between the carrying amount and par
value of the treasure stock cancelled is recognized in capital reserve. Any excess is recognized in surplus
reserve and retained earnings.
36. Restricted Stock
Under the share incentive plan, the Group grants restricted share to its employees, and the employees
subscribe the share first. If the unlocking conditions specified in the share incentive plan are not met
subsequently, the Group will repurchase the shares at the agreed price. When the procedures of the increase
in capital completed such as registration in accordance with the relevant regulations, the Group recognizes
the share capital and capital reserve (share premium) according to the subscription payment received from
the employees on the date of grant. Treasury stock and other payables relating to the obligation of
repurchase are recognized accordingly.
37. Hedge Accounting
At the inception of a hedge relationship, the Group formally designates and documents the hedge
relationship to which the Group wishes to apply hedge accounting, the risk management objective and its
strategy for undertaking the hedge. The documentation includes identification of the hedging instrument,
the hedged item or transaction, the nature of the risk being hedged and how the Group will assess the
effectiveness of the hedging instrument.
The Group assesses an ongoing basis to determine that the hedging instrument actually have been highly
effective throughout the financial reporting periods for which they were designated. The hedge relationship
is ceased if it is unsatisfactory. Hedging accounting should meet the following requirements for the
effectiveness of hedging:
① There is an economic relationship between hedged items and hedging instruments.
② The impact of credit risk does not dominate in the change of value caused by the economic relationship
between hedged items and hedging instruments.
③ The hedging ratio of the hedging relationship should be equal to the ratio of the number of hedged
items actually hedged by the enterprise to the actual number of corresponding hedging instruments. It
should not reflect the imbalance of the relative weight of the hedged item and the hedging instrument. This
imbalance will cause the hedge to be invalid and may give accounting results that are inconsistent with
objectives of the hedge accounting.
The Group ceases the use of hedge accounting if one of the following situation is exist:
① The hedging relationship is no longer meets the risk management objectives due to changes in risk
management objectives.
② The hedging instrument is expired, sold, the contract is terminated or has been exercised.
③ The economic relationship between the hedged item and the hedging instrument is no longer existed, or
the impact of credit risk does not dominate in the change of value caused by the economic relationship
between hedged items and hedging instruments.
④ The hedging relationship is no longer satisfied other conditions for using hedging accounting.
Fair value hedge
Fair value hedge refers to a hedge of the exposure to changes in fair value of a recognized asset or liability
or an unrecognized firm commitment, or a component of any such item, that is attributable to a particular
risk. This change in fair value would affect the Group’s profit or loss, or other comprehensive income.
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Any gain or loss arising from fair value hedge is recognized in profit or loss for the current period. Gain or
loss of hedged item arising from the exposure of risk is recognized in profit or loss for the current period,
and adjusted the carrying amount of hedged items not measure at fair value accordingly.
If the hedged item is a financial instrument (or its component) measured at amortized cost, any adjustment
to the carrying amount of the hedged item is amortized to profit or loss. The amortization is based on a
recalculated effective interest rate at the date that amortization begins.
When unrecognized firm commitment is designated as a hedged item, the cumulative change in the fair
value of the hedged item subsequent to its designation is recognized as an asset or a liability with a
corresponding gain or loss recognized in profit or loss for the current period. When an asset is obtained or a
liability is committed through the fulfillment of confirmed commitment, the initial amount of such asset or
liability is adjusted according to the cumulative change in the fair value of recognized hedged item.
Cash flow hedging
Cash flow hedge refers to a hedge of exposure from cash flow changes. This variability in cash flows is
attributable to a particular risk associated with a recognized asset or liability or a highly probably forecast
transaction and can affect profit or loss.
The portion of the gain or loss on the hedging instrument that is determined to be an effective hedge is
recognized as cash flow hedging reserve in other comprehensive income. Any remaining gain or loss on the
hedging instrument that is hedged ineffective is recognized in profit or loss for the current period.
For cash flow hedging, when the hedged item is an expected transaction, and a non-financial asset or
non-financial liability arising from the expected transaction, or fair value hedge accounting is applicable to
a commitment arising the expected transaction of non-financial assets or non-financial liability, the Group
transfers the cash flow hedging reserve previously recognized in the other comprehensive income to the
initial recognition amount of such asset or liability.
For cash flow hedges that do not fall into the above situations, the Group transfers cash flow hedging
reserve previously recognized in the other comprehensive income to profit or loss for the period when the
profit or loss is impacted by the expected cash flow being hedged.
If the cash flow hedging reserve recognized in the other comprehensive income is a loss, the entire or part
of the loss is not expect to be recovered in the future accounting period, the Group transfers the
unrecovered portion from the other comprehensive income to profit or loss.
When the Group ceases the use of hedging accounting for cash flow hedges, the cumulative cash flow
hedging reserve recognized in the other comprehensive income is retained if the hedged cash flow is
expected to occur in the future. The cash flow hedging reserve is treated in accordance with the accounting
policies of cash flow hedging mentioned above when the expected transaction has occurred. The
cumulative cash flow hedging reserve recognized in the other comprehensive income is transferred to profit
or loss for the current period if the hedged cash flow is not expected to be occurred in the future. If the
hedged cash flow is no longer probable to be occurred in the future but it may still be expected to be
occurred, the cumulative cash flow hedging reserve recognized in the other comprehensive income is
retained until the expected transaction has occurred, it is then treated in accordance with the accounting
policies of cash flow hedging mentioned above.
38. Significant Accounting Estimates and Judgments
The Group assesses the significant accounting estimates and key assumptions on an ongoing basis,
based on the historical experience and other factors, including reasonable expectation of future events.
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It is probable that the significant adjustment risk to the carrying amount of assets and liability in the next
accounting period will arise from the following significant accounting judgments and key assumptions:
Measurement of expected credit losses on accounts receivable
The Group calculates the expected credit loss of accounts receivable through the default risk exposure of
accounts receivable and the expected credit loss rate of accounts receivable. The Group determines the
expected credit loss rate based on the probability and loss rate of default. When determining the expected
credit loss rate, the Group uses internal historical credit loss experience and other data, and adjusts the
historical data in conjunction with current conditions and forward-looking information. When considering
forward-looking information, the indicators used by the Group include the risk of economic downturn,
changes in the external market environment, technological environment and customer situation. The Group
regularly monitors and reviews assumptions related to the calculation of expected credit losses.
Impairment of goodwill
The Group assesses the impairment of goodwill at least once a year. The Group shall evaluate the value in
use for the cash-generating units to which goodwill has been allocated. When assessing the value in use, the
Group requires to estimate the expected future cash flows from the cash-generating unit and select an
appropriate discount rate to calculate the present value.
Deferred tax asset
To the extent that there is likely that there will be sufficient profits to offset losses, deferred tax assets
should be recognized for all unutilized tax losses. The management requires using many judgments to
estimate the time and amount of future taxable profits, in conjunction with tax planning strategies, to
determine the amount of deferred tax assets that should be recognized.
39. Significant Changes in Accounting Policies and Accounting Estimates, and Correction of Errors in prior
periods
(1) Significant changes in accounting policies
① New lease standard
The Ministry of Finance issued the “Accounting Standards for Business Enterprises No. 21 - Lease
(Revised)” in 2018, which requires enterprises listed both domestically and internationally, as well as those
listed outside of China and adopting IFRS or ASBE for the preparation of financial statements, to be
effective from January 1, 2019; and be effective from January 1, 2021 for other enterprises. The Company
has implemented the new lease standard effectively since January 1, 2021, and has adjusted the related
content of accounting policies. Revised accounting policies please refer to Note III. 33 and 34.
The Group selects not to reassess whether a contract exists prior to the date of initial application is, or
contains a lease at the date of initial application. For contracts signed or modified after the date of initial
application, the Group assesses whether the contract is a lease or includes a lease according to the
definition of lease in the new lease standard.
The definition of lease in the new lease standard does not have a material impact on the scope of the
Group's contracts that meet the definition of lease.
As lessee
The new lease standard requires lessees to recognize right-of-use assets and lease liabilities for all leases,
with the exception of simplified treatment for short-term leases and leases of low-value assets, and to
recognize depreciation and interest expenses respectively.
The new lease standard allows lessees to choose one of the following methods of transitional
treatment:
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In accordance with the provisions of the “Accounting Standards for Business Enterprises No.28 -
Changes in Accounting Policies, Accounting Estimates and Errors Correction”, retrospective
adjustment method is adopted.
According to the cumulative impact of initial application of the standard, the amount of retained
earnings and other relevant items in the financial statements at the beginning of the year of initial
application of this standard will be adjusted, without adjusting the information for comparable periods.
In accordance with the provisions of the new lease standard, the Group retroactively adjusted the difference
between the initial application of the new lease standard and the current lease standard into the retained
earnings at the beginning of 2021. At the same time, the Group has not adjusted the data in the comparative
financial statements.
For the finance lease before the initial application date, the Group shall measure the use right asset and
the lease liability respectively according to the original carrying amount of the finance lease asset and
the finance lease payment payable.
For operating leases prior to the initial application date, the Group measures the lease liabilities at the
present value of the remaining lease payments discounted at the incremental borrowing rate on the
initial application date, and measures the right-of-use assets at an amount equal to the lease liabilities
for all leases and makes necessary adjustments to right-of-use assets according to prepaid rents.
On the initial application date, the Group conducts impairment tests on the right-of-use assets in
accordance with Note III.34 and carries out corresponding accounting treatment.
For operating leases whose leased assets belong to low-value assets before the initial application date or
which will be completed within 12 months, the Group adopts the simplified method and does not recognize
the right-of-use assets and lease liabilities.
For operating leases before the initial application date, the Group adopts the following simplified
method:
When measuring lease liabilities, the same discount rate can be used for leases with similar
characteristics, and the weighted average of incremental borrowing rates used is 3.20% to 4.00%; the
measurement of the right-of-use assets does not include the initial direct costs;
If there is an option to renew the lease or terminate the lease, the Group will determine the lease term
according to the actual exercise of the option before the initial application date and the latest situation;
As an alternative to the impairment test of the right-of-use assets, the Group evaluates whether the
contract containing the lease is an onerous contract before the initial application date, and adjusts the
right-of-use assets according to the loss provisions amount recorded in the balance sheet before the
initial application date;
For the lease modification prior to the initial application date, the Group shall conduct accounting
treatment according to the final arrangement of the lease modification.
The impact of the implementation of the new lease standard on the consolidated balance sheet items
as at January 1, 2021 is as follows:
Carrying amount
before Carrying amount
Item adjustment Reclassification Remeasurement after adjustment
(December 31, (January 1, 2021)
2020)
Assets
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Carrying amount
before Carrying amount
Item adjustment Reclassification Remeasurement after adjustment
(December 31, (January 1, 2021)
2020)
Prepayments 1,870,808,733.28 -135,336.10 - 1,870,673,397.18
Other receivables 732,315,186.36 -4,250,000.00 - 728,065,186.36
Other current assets 925,208,486.45 -84,677,340.47 - 840,531,145.98
Held-to-maturity
97,462,501.79 -32,583,330.00 - 64,879,171.79
investments
Fixed assets 7,703,538,937.81 -35,244,350.72 - 7,668,294,587.09
Right-of-use asset - 1,757,671,818.57 - 1,757,671,818.57
Long-term deferred
352,075,183.20 -252,006,779.37 - 100,068,403.83
expenses
Other non-current
373,627,286.70 -4,816,778.49 - 368,810,508.21
assets
Total assets 27,526,958,371.19 1,343,957,903.42 - 28,870,916,274.61
Liabilities
Other payables 456,555,079.92 4,867,818.99 - 461,422,898.91
Non-current
liabilities due within 142,405,690.99 201,904,383.49 - 344,310,074.48
one year
Lease liability - 1,169,692,122.19 - 1,169,692,122.19
Long-term payables 36,320,489.48 -32,506,421.25 - 3,814,068.23
Total Liabilities 12,568,266,409.83 1,343,957,903.42 - 13,912,224,313.25
The composition of the carrying amount of the right-of-use assets on January 1, 2021 is as follows:
Item 2021.01.01
Right-of-use assets:
For the right-of-use assets recognized under the operating leases
1,710,523,239.69
before the initial application date
Finance lease assets recognized under the original lease standard 47,148,578.88
Total 1,757,671,818.57
As lessor
According to the new lease standard, except for the subleases classified as operating leases before the
initial application date and still exist after the initial application date (i.e. January 1, 2021), the Group does
not need to adjust its lease as a lessor in accordance with the transition provisions, but needs to carry out
accounting treatment in accordance with the new lease standard from the date of the initial application of
the new lease standard.
(2) Significant changes in accounting estimates
There were no significant changes in the Company's accounting estimates during the year.
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(3) Impact of the adoption of New Revenue Standards on the relevant items in the financial statements as at
January 1, 2021
Consolidated balance sheet
Item 2020.12.31 2021.01.01 Adjustments
Current assets:
Cash at bank and on hand 2,056,471,632.75 2,056,471,632.75 -
Held-for-trading financial assets 336,719,309.28 336,719,309.28 -
Notes receivable 17,833,751.84 17,833,751.84 -
Accounts receivable 1,067,301,941.46 1,067,301,941.46 -
Accounts receivable financing - - -
Prepayments 1,870,808,733.28 1,870,673,397.18 -135,336.10
Other receivables 732,315,186.36 728,065,186.36 -4,250,000.00
Including: Interest receivables 2,807.70 2,807.70 -
Dividend receivables - - -
Inventories 7,255,350,539.93 7,255,350,539.93 -
Contract assets - - -
Assets held-for-sale - - -
Non-current assets due within one year 2,457,622.86 2,457,622.86 -
Other current assets 925,208,486.45 840,531,145.98 -84,677,340.47
Total current assets 14,264,467,204.21 14,175,404,527.64 -89,062,676.57
Non-current assets:
Debt investments 22,501,033.35 22,501,033.35 -
Loans and advances to customers 31,418,327.11 31,418,327.11 -
Other debt investments - - -
Held-to-maturity investments 97,462,501.79 64,879,171.79 -32,583,330.00
Long-term equity investments 59,465,879.68 59,465,879.68 -
Investments in other equity instruments - - -
Other non-current financial assets 254,417,562.64 254,417,562.64 -
Investment properties 29,426,486.24 29,426,486.24 -
Fixed assets 7,703,538,937.81 7,668,294,587.09 -35,244,350.72
Construction in progress 1,591,741,924.42 1,591,741,924.42 -
Productive biological assets 286,202,211.97 286,202,211.97 -
Oil and natural gas assets - - -
Right-of-use asset - 1,757,671,818.57 1,757,671,818.57
Intangible assets 1,257,221,361.76 1,257,221,361.76 -
Development costs 13,567,349.13 13,567,349.13 -
Goodwill 342,738,904.21 342,738,904.21 -
Long-term deferred expenses 352,075,183.20 100,068,403.83 -252,006,779.37
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Item 2020.12.31 2021.01.01 Adjustments
Deferred tax assets 847,086,216.97 847,086,216.97 -
Other non-current assets 373,627,286.70 368,810,508.21 -4,816,778.49
Total non-current assets 13,262,491,166.98 14,695,511,746.97 1,433,020,579.99
Total assets 27,526,958,371.19 28,870,916,274.61 1,343,957,903.42
Current liabilities:
Short-term loans 4,735,948,585.16 4,735,948,585.16 -
Held-for-trading financial liabilities 127,446,229.19 127,446,229.19 -
Notes payable - - -
Accounts payable 2,060,550,537.54 2,060,550,537.54 -
Advances from customers - - -
Contract liabilities 1,889,338,880.88 1,889,338,880.88 -
Employee benefits payable 925,893,314.96 925,893,314.96 -
Taxes payable 196,208,088.61 196,208,088.61 -
Other payables 456,555,079.92 461,422,898.91 4,867,818.99
Including: Interest payables - - -
Dividend payables 2,591,473.50 2,591,473.50 -
Liabilities held-for-sale - - -
Non-current liabilities due within one
142,405,690.99 344,310,074.48 201,904,383.49
year
Other current liabilities 314,566,716.35 314,566,716.35 -
Total current liabilities 10,848,913,123.60 11,055,685,326.08 206,772,202.48
Non-current liabilities:
Long-term loans 1,161,404,700.00 1,161,404,700.00 -
Debentures payable - - -
Lease liability - 1,169,692,122.19 1,169,692,122.19
Long-term payables 36,320,489.48 3,814,068.23 -32,506,421.25
Long-term employee benefits payable 144,890,945.29 144,890,945.29 -
Provisions - - -
Deferred income 202,333,450.44 202,333,450.44 -
Deferred tax liabilities 174,403,701.02 174,403,701.02 -
Other non-current liabilities - - -
Total non-current liabilities 1,719,353,286.23 2,856,538,987.17 1,137,185,700.94
Total liabilities 12,568,266,409.83 13,912,224,313.25 1,343,957,903.42
Shareholders' equity
Share capital 1,661,210,751.00 1,661,210,751.00 -
Other equity instruments - - -
Including: Preference share - - -
Perpetual debt - - -
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Item 2020.12.31 2021.01.01 Adjustments
Capital reserve 5,041,921,064.80 5,041,921,064.80 -
Less: Treasury stock 165,350,332.65 165,350,332.65 -
Other comprehensive income -106,486,348.07 -106,486,348.07 -
Specific reserve - - -
Surplus reserve 638,662,900.40 638,662,900.40 -
General risk provision 7,814,011.67 7,814,011.67 -
Retained earnings 6,895,016,817.26 6,895,016,817.26 -
Total equity attributable to shareholders
13,972,788,864.41 13,972,788,864.41 -
of the parent company
Non-controlling interests 985,903,096.95 985,903,096.95 -
Total shareholders' equity 14,958,691,961.36 14,958,691,961.36 -
Total liabilities and shareholders'
27,526,958,371.19 28,870,916,274.61 1,343,957,903.42
equity
Company Balance Sheet
Item 2020.12.31 2021.01.01 Adjustments
Current assets:
Cash at bank and on hand 699,532,802.68 699,532,802.68 -
Held-for-trading financial assets 263,640,850.00 263,640,850.00 -
Notes receivable - - -
Accounts receivable - - -
Accounts receivable financing - - -
Prepayments 1,819,630.87 1,819,630.87 -
Other receivables 10,705,830,242.22 10,705,830,242.22 -
Including: Interest receivables - - -
Dividend
- - -
receivables
Inventories 84,736,207.88 84,736,207.88 -
Contract assets - - -
Assets held-for-sale - - -
Non-current assets due within one year - - -
Other current assets 8,795,911.92 7,137,459.33 -1,658,452.59
Total current assets 11,764,355,645.57 11,762,697,192.98 -1,658,452.59
Non-current assets:
Debt investments - - -
Loans and advances to customers - - -
Other debt investments - - -
Held-to-maturity investments 907,302.50 907,302.50 -
Long-term equity investments 4,452,434,939.93 4,452,434,939.93 -
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Item 2020.12.31 2021.01.01 Adjustments
Investments in other equity instruments - - -
Other non-current financial assets 222,596,212.64 222,596,212.64 -
Investment properties 20,565,176.04 20,565,176.04 -
Fixed assets 239,611,327.76 239,611,327.76 -
Construction in progress 16,372,133.08 16,372,133.08 -
Productive biological assets - - -
Oil and natural gas assets - - -
Right-of-use asset - 49,409,194.44 49,409,194.44
Intangible assets 118,046,787.57 118,046,787.57 -
Development costs - - -
Goodwill - - -
Long-term deferred expenses 28,770,769.63 18,799,356.81 -9,971,412.82
Deferred tax assets 398,251,653.53 398,251,653.53 -
Other non-current assets 2,695,741.00 2,695,741.00 -
Total non-current assets 5,500,252,043.68 5,539,689,825.30 39,437,781.62
Total assets 17,264,607,689.25 17,302,387,018.28 37,779,329.03
Current liabilities:
Short-term loans 4,169,670,770.39 4,169,670,770.39 -
Held-for-trading financial liabilities 1,046,249.19 1,046,249.19 -
Notes payable - - -
Accounts payable 38,737,771.88 38,737,771.88 -
Advances from customers - - -
Contract liabilities - - -
Employee benefits payable 150,890,070.01 150,890,070.01 -
Taxes payable 1,013,415.11 1,013,415.11 -
Other payables 2,976,129,435.19 2,976,129,435.19 -
Including: Interest payables - - -
Dividend payables - - -
Liabilities held-for-sale - - -
Non-current liabilities due within one
39,999,252.87 39,999,252.87 -
year
Other current liabilities 17,907,456.12 17,907,456.12 -
Total current liabilities 7,395,394,420.76 7,395,394,420.76 -
Non-current liabilities:
Long-term loans - - -
Debentures payable - - -
Lease liability - 37,779,329.03 37,779,329.03
Long-term payables - - -
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Item 2020.12.31 2021.01.01 Adjustments
Long-term employee benefits payable 23,032,749.25 23,032,749.25 -
Provisions - - -
Deferred income 11,016,146.26 11,016,146.26 -
Deferred tax liabilities 10,829,462.30 10,829,462.30 -
Other non-current liabilities - - -
Total non-current liabilities 44,878,357.81 82,657,686.84 37,779,329.03
Total liabilities 7,440,272,778.57 7,478,052,107.60 37,779,329.03
Shareholders' equity
Share capital 1,661,210,751.00 1,661,210,751.00 -
Other equity instruments - - -
Including: Preference share - - -
Perpetual debt - - -
Capital reserve 5,136,265,883.82 5,136,265,883.82 -
Less: Treasury stock 165,350,332.65 165,350,332.65 -
Other comprehensive income - - -
Specific reserve - - -
Surplus reserve 638,662,900.40 638,662,900.40 -
General risk provision - - -
Retained earnings 2,553,545,708.11 2,553,545,708.11 -
Total shareholders' equity 9,824,334,910.68 9,824,334,910.68 -
Total liabilities and shareholders'
17,264,607,689.25 17,302,387,018.28 37,779,329.03
equity
IV. Taxation
1. Main Type of Taxes and Corresponding Tax Rates
Tax Tax base Statutory tax rate
Sales revenue or taxable Exemption (Note 1, Note 2), 1% (Note 3), 3% (Note
Value-added tax
4), 5%, 6%., 9% (Note 5), 10% (Note 6), 13% (Note
(VAT) income 5)
Corporate income
Taxable income Please refer to Note IV. 2
tax
City maintenance
and Turnover tax payable 1%, 5%, 7%
construction tax
Educational
Turnover tax payable 3%
surcharge
Local education
Turnover tax payable 2%
surcharge
Note 1: In accordance with document Caishui [2001] No. 121 jointly issued by the Ministry of Finance and
the State Administration of Taxation, the Company and its subsidiaries are exempted from VAT on their
feed products, which has been filed with the competent tax authorities.
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Note 2: The Company and its subsidiaries are eligible for valued-added tax exemption when selling
self-produced products in accordance with Article 16 “Agricultural producers are exempted from
value-added tax when selling self-produced agricultural products” of the Interim Regulation of People’s
Republic of China on Value-Added Tax.
Note 3: According to announcement 2021 No. 7 issued by the Ministry of Finance and State Taxation
Administration, “Announcement of the General Administration of Taxation of the Ministry of Finance on
the continuation of the implementation of some preferential policies on taxes and fees in response to the
epidemic”, VAT will be levied at a reduced rate of 1% for small-scale taxpayers during the epidemic period.
Note 4: In accordance with the regulation of the Circular of the Ministry of Finance and the State
Administration of Taxation on the Policy of Simplified and Consolidated VAT Levy Rate (Caishui (2014)
No. 57), the sales revenue of Qingyuan Haibei Biotechnology Co., Ltd. and Sichuan Hailinger
Biopharmaceutical Co., Ltd. of the subsidiaries of the Company that meet the requirements are subject to
VAT at a simplified rate of 3% and other taxable income is subject to VAT at the applicable tax rate.
Note 5: In accordance with the regulation of the Announcement of Related Policies on Further Reformation
of Value-added Tax by the Ministry of Finance, State Taxation Administration and General Administration
of Customs (Ministry of Finance, State Taxation Administration General Administration of Customs
Announcement 2019 No. 39), the VAT rate changed to 13% and 9% since April 1, 2019 for those taxable
sales that were formerly subject to 16% and 10%, respectively.
Note 6: In accordance with the VAT regulation of the Socialist Republic of Vietnam, feed and feed-related
industries are exempted from VAT since 2016. The freezer rental revenue from SHENG LONG BIO-TECH
INTERNATIONAL CO., LTD, a company incorporated in Vietnam, is subject to VAT at 10%.
2. Corporate Income Tax
Income tax
Taxpayer Abbreviation Note
rate (%)
Guangdong Haid Group Co., Limited Guangdong Haid 15 Note 1
Guangzhou
Guangzhou Runchuan Investment Co., Ltd. 25
Runchuan
Guangzhou Yitun Swine Industry Investment
Guangzhou Yitun 25
Co., Ltd.
12.5, exempt
Enping Fengwo Agriculture and Animal
Enping Fengwo from income Note 2, 3
Husbandry Co., Ltd.
tax
Exempt from
Yangxi Fengwo Ecological Agriculture Co., Ltd. Yangxi Fengwo Note 2
income tax
Yangjiang Yangdong Fengwo Agriculture and Exempt from
Yangdong Fengwo Note 2
Animal Husbandry Co., Ltd. income tax
Exempt from
Enping Yitun Ecological Agriculture Co., Ltd. Enping Yitun Note 2
income tax
Exempt from
Gaozhou Sanhe Animal Husbandry Co., Ltd. Gaozhou Sanhe Note 2
income tax
Exempt from
Yingde Yitun Ecological Agriculture Co., Ltd. Yingde Yitun Note 2
income tax
Exempt from
Hunan Yitun Ecological Agriculture Co., Ltd. Hunan Yitun Note 2
income tax
Hengyang County Jisheng Agriculture and Exempt from
Hengyang Jisheng Note 2
Animal Husbandry Development Co., Ltd. income tax
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Income tax
Taxpayer Abbreviation Note
rate (%)
Yueyang Yitun Agriculture and Animal Exempt from
Yueyang Yitun Note 2
Husbandry Co., Ltd. income tax
Yueyang Fengtun Ecological Agriculture Co., Exempt from
Yueyang Fengtun Note 2
Ltd. income tax
Guigang Qintang District Yitun Ecological Exempt from
Qintang Yitun Note 2
Agriculture Co., Ltd. income tax
Exempt from
Pingnan Yitun Ecological Agriculture Co., Ltd. Pingnan Yitun Note 2
income tax
Exempt from
Pingguo Yitun Ecological Agriculture Co., Ltd. Pingguo Yitun Note 2
income tax
Exempt from
Guiping Yitun Ecological Agriculture Co., Ltd. Guiping Yitun Note 2
income tax
Exempt from
Hengyang Yitun Ecological Agriculture Co., Ltd. Hengyang Yitun Note 2
income tax
Exempt from
Hengshan Yitun Ecological Agriculture Co., Ltd. Hengshan Yitun Note 2
income tax
Guigang Gangbei District Yitun Ecological Exempt from
Gangbei Yitun Note 2
Agriculture Co., Ltd. income tax
Exempt from
Duyun Yitun Ecological Agriculture Co., Ltd. Duyun Yitun Note 2
income tax
Rongjiang County Yitun Ecological Agriculture Exempt from
Rongjiang Yitun Note 2
Co., Ltd. income tax
Exempt from
Binyang Yitun Ecological Agriculture Co., Ltd. Binyang Yitun Note 2
income tax
Exempt from
Yicheng Yitun Ecological Agriculture Co., Ltd. Yicheng Yitun Note 2
income tax
Exempt from
Zixing Yitun Ecological Agriculture Co., Ltd. Zixing Yitun Note 2
income tax
Changning Yitun Ecological Agriculture Co., Exempt from
Changning Yitun Note 2
Ltd. income tax
Guigang Donghuang Breeding And Breeding Guigang Exempt from
Note 2
Co., Ltd. Donghuang income tax
Shaoguan Zhenjiang Yitun Ecological Exempt from
Zhenjiang Yitun Note 2
Agriculture Co., Ltd. income tax
Exempt from
Shandong Yitun Ecological Agriculture Co., Ltd. Shandong Yitun Note 2
income tax
Exempt from
Laizhou Zhizhu Animal Husbandry Co., Ltd. Laizhou Zhizhuren Note 2
income tax
Exempt from
Qinzhou Yitun Ecological Agriculture Co., Ltd. Qinzhou Yitun Note 2
income tax
Feicheng He Ruifeng Agricultural Science And Feicheng Exempt from
Note 2
Technology Co., Ltd. Heruifeng income tax
Weifang Xuheng Agricultural Science And Exempt from
Weifang Xuheng Note 2
Technology Co., Ltd. income tax
Gaotang Huayu Swine Co., Ltd. Gaotang Huayu Exempt from Note 2
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Income tax
Taxpayer Abbreviation Note
rate (%)
income tax
Ganong (Lianyungang) Animal Husbandry Jianong Exempt from
Note 2
Technology Co., Ltd. Lianyungang income tax
Exempt from
Guizhou Aikexin Swine Breeding Co., Ltd. Guizhou Aikexin Note 2
income tax
Binyang County Hejiyitun Ecological Exempt from
Binyang Heji Yitun Note 2
Agriculture Co., Ltd. income tax
Qinzhou Qinnan Yitun Ecological Agriculture Qinzhou Qinnan Exempt from
Note 2
Co., Ltd. Yitun income tax
Exempt from
Huayuan Yitun Ecological Agriculture Co., Ltd. Huayuan Yitun Note 2
income tax
Baojing County Yitun Ecological Agriculture Exempt from
Baojing Yitun Note 2
Co., Ltd. income tax
Exempt from
Yingde Yitun Pig Breeding Co., Ltd. Yingde Yitun Note 2
income tax
Exempt from
Hengnan Yitun Ecological Agriculture Co., Ltd. Hengnan Yitun Note 2
income tax
Exempt from
Lianzhou Yitun Ecological Agriculture Co., Ltd. Lianzhou Yitun Note 2
income tax
Longan County Yitun Ecological Agriculture Exempt from
Longan Yitun Note 2
Co., Ltd. income tax
Exempt from
Youxian Yitun Ecological Agriculture Co., Ltd. Youxian Yitun Note 2
income tax
Exempt from
Wengyuan County Yitun Pig Breeding Co., Ltd. Wengyuan Yitun Note 2
income tax
Fufeng County Yitun Ecological Agriculture Co., Exempt from
Fufeng Yitun Note 2
Ltd. income tax
Exempt from
Linyou Yitun Ecological Agriculture Co., Ltd. Linyou Yitun Note 2
income tax
Exempt from
Laibin Yitun Ecological Agriculture Co., Ltd. Laibin Yitun Note 2
income tax
Exempt from
Yantai Yitun Ecological Agriculture Co., Ltd. Yantai Yitun Note 2
income tax
Exempt from
Yantai Zhizhuren Animal Husbandry Co., Ltd. Yantai Zhizhuren Note 2
income tax
Exempt from
Guiyang Yitun Ecological Agriculture Co., Ltd. Guiyang Yitun Note 2
income tax
Guangdong Yiheng Investment Co., Ltd. Guangdong Yiheng 25
Exempt from
Gaozhou Haiyuan Agriculture Co., Ltd. Gaozhou Haiyuan Note 2
income tax
Exempt from
Ruyuan County Yitun Pig Breeding Co., Ltd. Ruyuan Yitun Note 2
income tax
Exempt from
Luoding Yitun Ecological Agriculture Co., Ltd. Luoding Yitun Note 2
income tax
Wugang Yitun Ecological Agriculture Co., Ltd. Wugang Yitun Exempt from Note 2
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Income tax
Taxpayer Abbreviation Note
rate (%)
income tax
Exempt from
Hunan Yitun Technology Co., Ltd. Hunan Yitun Tech. Note 2
income tax
Guangzhou Haiwei Feed Co., Ltd. Guangzhou Haiwei 25
Guangzhou
Guangzhou Rongchuan Feed Co., Ltd. 25
Rongchuan
Foshan Haihang Feed Co., Ltd. Foshan Haihang 25
Maoming Haihang Feed Co., Ltd. Maiming Haihang 25
Guangzhou
Guangzhou Dachuan Feed Co., Ltd. 25
Dachuan
Hubei Haid Feed Co., Ltd. Hubei Haid 25
Guangdong Hinter Biotechnology Group Co.,
Guangdong Hinter 15 Note 1
Ltd.
Guangzhou Haishengyuan Biotechnology Co., Guangzhou
20 Note 18
Ltd. Haishengyuan
Guangzhou Mutai Feed Technology Co., Ltd. Guangzhou Mutai 20 Note 18
Guangzhou
Guangzhou Haiyiyuan Biotechnology Co., Ltd. 20 Note 18
Haiyiyuan
Shaanxi Haid Agriculture and Animal Husbandry Exempt from
Shanxi Haid Note 2
Co., Ltd. income tax
Yangling Haid Feed Co., Ltd. Yangling Haid 25
15, exempt
Gansu Haid Feed Co., Ltd. Gansu Haid from income Note 2, 7
tax
Weinan Haid Feed Co., Ltd. Weinan Haid 20 Note 18
Wuwei Haid Feed Co., Ltd. Wuwei Haid 25
Baoji Haid Agriculture and Animal Husbandry
Baoji Haid 25
Co., Ltd.
Hunan Haid Bio-Feed Co., Ltd. Hunan Haid 25, 12.5 Note 3
Guangzhou Haihe Feed Co., Ltd. Guangzhou Haihe 25
Liaocheng Haixin Enterprise Management
Liaocheng Haixin 20 Note 18
Consulting Co., Ltd.
Anyang Haiyue Feed Technology Co., Ltd. Anyang Haiyue 20 Note 18
Zoucheng Haiyue Enterprise Management
Zoucheng Haiyue 20 Note 18
Consulting Co., Ltd.
Yinan Haiyue Biotechnology Co., Ltd. Yinan Haiyue 20 Note 18
Lanzhou Haid Feed Co., Ltd. Lanzhou Haid 25
Yichang Zhihai Feed Co., Ltd. Yichang Zhihai 25
Foshan Haipu Feed Co., Ltd. Foshan Haipu 25
Qingyuan Haibei Biotechnology Co., Ltd. Qingyuan Haibei 15 Note 1
Zhanjiang Haid Feed Co., Ltd. Zhanjiang Haid 25
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Income tax
Taxpayer Abbreviation Note
rate (%)
Jiangmen Haid Feed Co., Ltd. Jiangmen Haid 15 Note 1
Chengdu Haid Biotechnology Co., Ltd. Chengdu Haid 25
Taizhou Haid Bio-Feed Co., Ltd. Taizhou Haid 25, 12.5 Note 3
Jingzhou Haid Feed Co., Ltd. Jingzhou Haid 25
Ezhou Haid Feed Co., Ltd. Ezhou Haid 25
Dongguan Haid Feed Co., Ltd. Dongguan Haid 25
Fujian Haid Feed Co., Ltd. Fujian Haid 25
Zhejiang Haid Feed Co., Ltd. Zhejiang Haid 25
Guangxi Haid Feed Co., Ltd. Guangxi Haid 25
Kinghill Holdings Pte.Ltd. Kinghill Holdings 17 Note 12
Kinghill Pte.Ltd. Kinghill Pte. 17 Note 12
Haid Egypt Co.,Ltd Haid Egypt Co.,Ltd 22.5 Note 21
Kinghill Resources Pte.Ltd. Kinghill Resources 17 Note 12
Vinh Long Exempt from
Vinh Long Hailianke Biotechnology Co., Ltd Note 10
Hailianke income tax
Kinghill Agri Pte.Ltd. Kinghill Agri 17 Note 12
Pt.Haida Agriculture Indonesia Haida Indonesia 22 Note 19
Pt.Haida Surabaya Trading Haida Surabaya 22 Note 19
PT Hisenor
Pt Hisenor Technology Indonesia Technology 22 Note 19
Indonesia
Haid Feed Bangladesh Limited Bangladesh Haid 25 Note 25
Jiangxi Haid Feed Co., Ltd. Jiangxi Haid 25
Guangzhou Haid Feed Co., Ltd. Guangzhou Haid 25
Guangdong
Guangdong Hisenor Group Co., Ltd. 12.5 Note 3
Hisenor
Zhanjiang Hisenor Marine Biotechnology Co.,
Zhanjiang Hisenor 12.5 Note 3
Ltd.
Zhanjiang Haijingzhou Marine Biotechnology Zhanjiang
12.5 Note 3
Co., Ltd. Haijingzhou
Hainan Hisenor Marine Biotechnology Co., Ltd. Hainan Hisenor 12.5 Note 3
Jingtai Haijingzhou Fishery Technology Co.,
Jingtai Haijingzhou 12.5 Note 3
Ltd.
Yongji Haijingzhou Fishery Science And
Yongji Haijingzhou 12.5 Note 3
Technology Co., Ltd.
Yuncheng Haishengyuan Fishery Technology Yuncheng
12.5 Note 3
Co., Ltd. Haishengyuan
Zhangzhou Haijingzhou Marine Biotechnology Zhangzhou
12.5 Note 3
Co., Ltd. Haijingzhou
Changyi Haijingzhou Biological Technology Changyi
12.5 Note 3
Co., Ltd. Haijingzhou
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Income tax
Taxpayer Abbreviation Note
rate (%)
Nantong Haijingzhou Biological Technology Nantong
12.5 Note 3
Co., Ltd. Haijingzhou
Shanwei Haijingzhou Marine Biological Shanwei
12.5 Note 3
Technology Co., Ltd. Haijingzhou
Guangzhou
Guangzhou Haijingzhou Food Co., Ltd. 25
Haijingzhou
Dongying
Dongying Haijingzhou Biotechnology Co., Ltd. 12.5 Note 3
Haijingzhou
Shanwei Haizenong Marine Biotechnology Co., Shanwei
12.5 Note 3
Ltd. Haizenong
Rongcheng
Rongcheng Rongchuan Biotechnology Co., Ltd. 25
Rongchuan
25, exempt
Rongcheng
Rongcheng Yandun Horn Fish Meal Co., Ltd. from income Note 4
Yandunjiao
tax
25, exempt
Fujian Haisheng Feed Co., Ltd. Fujian Haidsun from income Note 5
tax
Zhenyuan
Zhenyuan Haisheng Protein Feed Co., Ltd. 25
Haisheng
25, exempt
Pucheng Haisheng Feed Co., Ltd. Pucheng Haidsun from income Note 5
tax
Xinjiang Xiyu Haihua Products Co., Ltd. Xiyu Haihua 25
Jinzhou Zhengyuan Grain Trade Co., Ltd. Jinzhou Zhengyuan 25
Yingkou Fengmu Agricultural Development Co.,
Yingkou Fengmu 25
Ltd.
Guangzhou Haiyou Trade Co., Ltd. Guangzhou Haiyou 20 Note 18
Ningbo Fengmu Agricultural Development Co.,
Ningbo Fengmu 25
Ltd.
Sanya Fengmu Agricultural Development Co.,
Sanya Fengmu 15 Note 22
Ltd.
Guangzhou Anan Logistics Co., Ltd. An'an Logistics 25
Xiyu Haisheng (Guangzhou) Supply Chain Co.,
Xiyu Haisheng 25
Ltd.
Jilin Haid Rongchuan Trading Co., Ltd. Jilin, Rongchuan 25
Maoming Hailong Feed Co., Ltd. Maoming Hailong 25
Nanchang Haid Biotechnology Co., Ltd. Nanchang Haid 25
Zhuhai Rongchuan Feed Co., Ltd. Zhuhai Rongchuan 15 Note 1
Jieyang Haid Feed Co., Ltd. Jieyang Haid 25
Zhuhai Ronghai Breeding Technology Co., Ltd. Zhuhai Ronghai 12.5 Note 3
Foshan Sanshuifanling Feed Co., Ltd. Sanshuifanling 25
Dalian Haid Rongchuan Trading Co., Ltd. Dalian Haid 25
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Income tax
Taxpayer Abbreviation Note
rate (%)
8.25, exempt
Haid International Group Limited Haid International from income Note 20
tax
16.5, exempt
China Haida Feed Group(HK)Limited Haida HK from income Note 9
tax
Exempt from
Rickworth Investments Limited Rickworth Note 8
income tax
Hong Kong
Hong Kong Longreat Trading Co., Limited 16.5 Note 9
Longreat
Haid Feed Company Limited Dong Nai Haid 7.5 Note 10
Dong Nai Haid
Dong Nai Haid Farm Company Limited 15 Note 10
Breeding
Dancl Limited Dancl 16.5 Note 9
Exempt from
Panasia Trading Resources Limited Panasia Trading Note 8
income tax
Sheng Long Exempt from
Sheng Long International Ltd. Note 8
International income tax
Sheng Long
Sheng Long Bio-Tech International Co.,Ltd 20, 17, 10 Note 10
Bio-Tech
Long Sheng
Long Sheng International Co.,Ltd 20, 10 Note 10
International
Hisenor Exempt from
Hisenor International Limited Note 8
International income tax
Exempt from
Hisenor Viet Nam Aquatic Breeding Co.,Ltd Hisenor Vietnam Note 10
income tax
Kembang Subur
Kembang Subur International Ltd. 24 Note 11
International
Namduong Exempt from
Namduong Vietnam Aquatic Hatchery Co.,Ltd. Note 10
Vietnam income tax
Sheng Long
Sheng Long Bio Tech(M)Sdn.Bhd. 24 Note 11
Malaysia
Ding Sheng
Prime World Co., Ltd. 24 Note 11
International
Taiwan Sheng
Taiwan Shenglong Biotechnology Co., Ltd. 20 Note 23
Long
Sheng Long
Sheng Long Aqua Technology (M) Sdn. Bhd. 24 Note 11
Aquatic Malaysia
Exempt from
Nano South Limited Nano Note 8
income tax
Exempt from
Oceanic Forward Ventures Limited Oceanic Note 8
income tax
Exempt from
Power Spring Investments Limited Power Spring Note 8
income tax
Link Tide Limited Link Exempt from Note 8
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Income tax
Taxpayer Abbreviation Note
rate (%)
income tax
Vinh Long Exempt from
Thang Long(Vinh Long)Biotech Co.,Ltd. Note 10, 28
Shenglong income tax
Changzhou Haid Bio-Feed Co., Ltd. Changzhou Haid 25, 12.5 Note 3
Tianjin Haid Feed Co., Ltd. Tianjin Haid 25
Jiangmen A&T Xinhui Feed Co., Ltd. A&T Xinhui 25
Tianmen Haid Feed Co., Ltd. Tianmen Haid 25
Zhuhai Hailong Biotechnology Co., Ltd. Zhuhai Hailong 15 Note 1
Yangjiang Haid Feed Co., Ltd. Yangjiang Haid 25
Guigang Haid Feed Co., Ltd. Guigang Haid 25
Yiyang Haid Feed Co., Ltd. Yiyang Haid 25
Nantong Haid Biotechnology Co., Ltd. Nantong Haid 25
Yunnan Haid Biotechnology Co., Ltd. Yunnan Haid 15 Note 1
Guangzhou
Guangzhou Hailong Feed Co., Ltd. 20 Note 18
Hailong
Zhaoqing Haid Feed Co., Ltd. Zhaoqing Haid 25
Wuhan Aquaera Biotechnology Co., Ltd. Wuhan Aquaera 20 Note 18
Shenzhen Longreat Trading Co., Ltd. Shenzhen Longreat 25
Lanking Pte.Ltd. Lanking 17 Note 12
Haid Lanking International Trading Inc. Lanking America 13 Note 13
Lanking Nemo(Sg) Pte.Ltd. Lanking Nemo 17 Note 12
Shenglong Bio-Tech(India)Private Limited Sheng Long India 25 Note 14
Lanking Rickworth Pte.Ltd. Lanking Rickworth 17 Note 12
Haidmarino Exempt from
Haidmarino Cia.Ltda. Note 17
Cia.Ltda income tax
Lanking Nano Pte.Ltd. Lanking Nano 17 Note 12
Hai Duong Haid Company Limited Hai Duong Haid 8.5 Note 10
Hai Dai Company
Hai Dai Company Limited 15 Note 10
Limited
Exempt from
Vinh Long Hai Dai Co.,Ltd Vinh Long Hai Dai Note 10
income tax
Exempt from
Binh Dinh Hai Long Co.,Ltd Binh Dinh Hailong Note 10
income tax
Coreseed Aquaculture(Guam) Corporation Guam Xingyuan 21 Note 24
Hunan Dongting Haid Feed Co., Ltd. Dongting Haid 25
Zhangzhou Haid Feed Co., Ltd. Zhangzhou Haid 25
Anhui Haid Feed Co., Ltd. Anhui Haid 25
Xiangtan Haid Feed Co., Ltd. Xiangtan Haid 25
Changsheng
Guangzhou Changsheng Logistics Co., Ltd. 25
Logistics
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Income tax
Taxpayer Abbreviation Note
rate (%)
Guangzhou
Guangzhou Cangyouliang Trading Co., Ltd. 20 Note 18
Cangyouliang
Guangzhou Zhongcangsheng Commercial & Guangzhou
25
Trading Co., Ltd. Zhongcangsheng
Guangzhou Danong Enterprise Management Co., Guangzhou
25
Ltd. Danong
20, exempt
Chengnan Development Zone Hairong Livestock
Chengnan Hairong from income Note 16, 18
Farming Service Specialized Cooperative
tax
Zhangzhou Longwen Hairong Farming Service Zhangzhou Exempt from
Note 15
Specialized Cooperative Hairong income tax
Guangzhou Haifengchang Enterprise Guangzhou
20 Note 18
Management Co., Ltd. Haifengchang
Shandong Haiding Agriculture and Animal
Shandong Haiding 25
Husbandry Co., Ltd.
Suixian Yuliang Haiding Feed Co., Ltd. Suixian Haiding 25
Exempt from
Suixian Haiding Veterinary Service Co., Ltd. Suixian Haiding Note 2
income tax
Yuncheng Haiding Hongda Feed Co., Ltd. Yuncheng Haiding 25
Exempt from
Yuncheng Haiding Veterinary Service Co., Ltd. Yuncheng Haiding Note 2
income tax
Jinan Haiding Farming And Animal Husbandry
Jinan Haiding 25 Note 27
Co., Ltd.
Liaocheng Haiding Feed Co., Ltd. Liaocheng Haiding 25
Shanxian Zhongyi Haiding Feed Co., Ltd. Shanxian Haiding 25
Exempt from
Jinan Haiding Veterinary Service Co., Ltd. Jinan Haiding Note 2
income tax
Xinxiang Haiding Feed Co., Ltd. Xinxiang Haiding 25
Xinxiang Hairuida Feed Co., Ltd. Xinxiang Hairuida 20 Note 18
Heze Haiding Feed Technology Co., Ltd. Heze Haiding 15 Note 1
Exempt from
Heze Haiding Veterinary Service Co., Ltd. Heze Haiding Note 2
income tax
Jining Haiding Feed Co., Ltd. Jining Haiding 25
Exempt from
Jining Haiding Veterinary Service Co., Ltd. Jining Haiding Note 2
income tax
Exempt from
Sishui Dingxin Veterinary Service Co., Ltd. Sishui Dingxin Note 2
income tax
Feixian Hairuida Feed Co., Ltd. Feixian Hairuida 25
Exempt from
Feixian Hairuida Veterinary Service Co., Ltd. Feixian Hairuida Note 2
income tax
Yinan Haiding Feed Co., Ltd. Yinan Haiding 25
Exempt from
Yinan Haiding Veterinary Service Co., Ltd. Yinan Haiding Note 2
income tax
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Income tax
Taxpayer Abbreviation Note
rate (%)
Jinan Fengcheng Agriculture and Animal
Jinan Fengcheng 25
Husbandry Co., Ltd.
Tengzhou
Tengzhou Fengcheng Feed Co., Ltd. 25
Fengcheng
Binzhou Haiding Feed Co., Ltd. Binzhou Haiding 25
Exempt from
Binzhou Haiding Veterinary Service Co., Ltd. Binzhou Haiding Note 2
income tax
Jining Fengcheng Feed Co., Ltd. Jining Fengcheng 20 Note 18
Exempt from
Dong’E Dingxin Farming Service Co., Ltd. Dong’e Dingxin Note 2
income tax
Heze Haiding Exempt from
Heze Haiding Ecological Farming Co., Ltd. Note 2
Breeding income tax
Linyi Haiding Feed Technology Co., Ltd. Linyi Haiding 25
Linyi Hedong Haiding Agriculture and Animal Linyi Hedong
25
Husbandry Development Co., Ltd. Haiding
Junan Haiding Feed Co., Ltd. Junan Haiding 25
Exempt from
Junan Haiding Veterinary Service Co., Ltd. Junan Haiding Note 2
income tax
Sihong Haiding Feed Co., Ltd. Sihong Haiding 25
Exempt from
Linyi Dingxin Farming Co., Ltd. Linyi Dingxin Note 2
income tax
Exempt from
Linyi Haiding Veterinary Service Co., Ltd. Linyi Haiding Note 2
income tax
Exempt from
Liaocheng Haiding Veterinary Service Co., Ltd. Liaocheng Haiding Note 2
income tax
Henan Haiding Feed Co., Ltd. Henan haiding 25
Qingzhou Haidinghe Xinsheng Feed Co., Ltd. Qingzhou Haiding 25
Linyi Haiding
Linyi Haiding Lusheng Feed Co., Ltd. 20 Note 18
Lusheng
Qinggang
Qinggang Feng Chengbai Zun Feed Co., Ltd. 20 Note 18
Fengcheng Bozun
Suihua Fengcheng
Suihua Feng Chengbaizun Feed Co., Ltd. 20 Note 18
Bozun
Chengwu
Chengwu Fengcheng Feed Co., Ltd. 20 Note 18
Fengcheng
Weifang Binhai Haiding Feed Co., Ltd. Binhai Haiding 25
Exempt from
Linyi Dinghao Breeding Co., Ltd. Linyi Dinghao Note 2
income tax
Exempt from
Dongying Dinghao Farming Co., Ltd. Dongying Dinghao Note 2
income tax
Xuzhou Hairuida Feed Co., Ltd. Xuzhou Hairuida 25
Xuzhou Zhongyi Haiding Agriculture and Xuzhou Zhongyi
25
Animal Husbandry Co., Ltd. Haiding
269
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Income tax
Taxpayer Abbreviation Note
rate (%)
Lanling Haiding Hekangyuan Agriculture and
Lanling Haiding 25
Animal Husbandry Co., Ltd.
Gaotang Haiding Agriculture and Animal
Gaotang Haiding 25
Husbandry Co., Ltd.
Jiangsu Fengcheng Technology Co., Ltd. Jiangsu Fengcheng 25
Gansu Fengying Technology Co., Ltd. Gansu Fengying 25
Xishui Haid Feed Co., Ltd. Xishui Haid 25
Yancheng Haid Bio-Feed Co., Ltd. Yancheng Haid 25
Honghu Haid Feed Co., Ltd. Honghu Haid 25
Kaifeng Haid Feed Co., Ltd. Kaifeng Haid 25
Guangzhou
Guangzhou Heshengtang Biotechnology Co.,
Heshengtang 25
Ltd.
Biotechnology
Guangzhou
Guangzhou Heshengtang Veterinary
Heshengtang 25
Pharmaceutical Co., Ltd.
Pharmaceutical
Haid Livestock
Guangdong Haid Livestock Veterinary Research
Veterinary 25
Institute Co., Ltd.
Research Institute
Henan Haihe Agriculture and Animal Husbandry
Henai Haihe 25
Technology Co., Ltd.
Xuchang Haihe Feed Co., Ltd. Xuchang Haihe 20 Note 18
Anyang Haihe Agriculture and Animal
Anyang Haihe 25
Husbandry Technology Co., Ltd.
Jiyuan Haihe Jinyu Feed Co., Ltd. Jiyuan Haihe 25
Henan Mugaole Feed Co., Ltd. Henan Mugaole 25
Henan Haihehouyi Agriculture and Animal
Henan Haihehouyi 25
Husbandry Technology Co., Ltd.
Suqian Haid Feed Co., Ltd. Suqian Haid 25
Huaihua Haid Feed Co., Ltd. Huaihua Haid 25
Guangzhou Meinong Investment Management Guangzhou
20 Note 18
Co., Ltd. Meinong
Exempt from
Haid (Ecuador) Feed Cia.Ltda. Haid Ecuador Note 17
income tax
Guangdong Hairuite Pet Nitribution Technology Guangdong
25
Co., Ltd. Hairuite
Guangzhou Haijian Investment Co., Ltd. Guangzhou Haijian 25
Foshan Nanhai Bairong Aquatic Farming Co.,
Nanhai Bairong 12.5 Note 3
Ltd.
Zhaoqing Bairong Aquatic Farming Co., Ltd. Zhaoqing Bairong 12.5 Note 3
Yangxin Bairong Aquatic Farming Co., Ltd. Yangxin Bairong 12.5 Note 3
Jingzhou Bairong Aquatic Farming Co., Ltd. Jingzhou Bairong 12.5 Note 3
270
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Income tax
Taxpayer Abbreviation Note
rate (%)
Shandong Bairong Fisheries Fine Seed Co., Ltd. Shandong Bairong 12.5 Note 3
Hainan Bairong Aquatic Products Co., Ltd. Hainan Bairong 12.5 Note 3
Zhaoqing Baishengyuan Aquatic Products Co., Zhaoqing
12.5 Note 3
Ltd. Baishengyuan
Qingyuan
Qingyuan Baishengyuan Aquatic Seed Co., Ltd. 12.5 Note 3
Baishengyuan
Hunan Innovation Biotechnology Limited Hunan Innovation 15 Note 1
Guangzhou
Guangzhou Haishengke Investment Co., Ltd. 25
Haishengke
Sichuan Hailinger Biopharmaceutical Co., Ltd. Sichuan Hailinger 25
Sanming Haid Feed Co., Ltd. Sanming Haid 25
Qingyuan Haid Biotechnology Co., Ltd. Qingyuan Haid 25
Qingyuan Hainong Agriculture and Animal Exempt from
Qingyuan Hainong Note 2
Husbandry Co., Ltd. income tax
Xuancheng Haid Biotechnology Co., Ltd. Xuancheng Haid 25
Guangdong Shunde Haid Biotechnology Co.,
Shunde Haid 25
Ltd.
Jiaxing Haid Yongwang Bio-Feed Co., Ltd. Jiaxing Haid 25
Shijiazhuang
Shijiazhuang Weike Biotechnology Co., Ltd. 15 Note 1
Weike
Chongqing Haid Feed Co., Ltd. Chongqing Haid 25
Shenyang Haid Feed Co., Ltd. Shenyang Haid 15 Note 1
Jiangsu Haihe Agriculture and Animal
Jiangsu Haihe 20 Note 18
Husbandry Co., Ltd.
Xuzhou Haihe Feed Co., Ltd. Xuzhou Haihe 25
Lianyungang
Lianyungang Haihe Feed Co., Ltd. 20 Note 18
Haihe
Xuzhou Haid Hexin Feed Co., Ltd. Xuzhou Haid 25
Anshan Dachuan Feed Technology Co., Ltd. Anshan Dachuan 20 Note 18
Guangzhou
Guangzhou Haiyuan Factoring Co., Ltd. 25
Haiyuan Factoring
Haid Pet Care Co., Ltd. Haid Pet 25
Haid Pet Care (Weihai) Co., Ltd. Weihai Pet 25
Wuhan Zeyi Investment Co., Ltd. Wuhan Zeyi 25
Yibin Zhihai Feed Co., Ltd. Yibin Zhihai 25
Meishan Haidzhihai Feed Co., Ltd. Meishan Zhihai 20 Note 18
Exempt from
Yibin Yucan Veterinary Service Co., Ltd. Yibin Yucan Note 2
income tax
Ganzhou Haid Biotechnology Co., Ltd. Ganzhou Haid 25
Foshan Haid Beacon Feed Co., Ltd. Foshan Haid 25
Guangzhou Zecan Investment Management Co., Guangzhou Zecan 25
271
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Income tax
Taxpayer Abbreviation Note
rate (%)
Ltd.
Guangzhou Punong Investment Management Guangzhou
25
Co., Ltd. Punong
Shandong
Shandong Fengying Food Co., Ltd. 25
Fengying
Exempt from
Jiaxiang Haiying Food Co., Ltd. Jiaxiang Haiying Note 6
income tax
Exempt from
Linxi Haiying Food Co., Ltd. Linxi Haiying Note 6
income tax
Exempt from
Yiyuan Haiying Food Co., Ltd. Yiyuan Haiying Note 6
income tax
Exempt from
Zouping Haiying Food Co., Ltd. Zouping Haiying Note 6
income tax
Exempt from
Binzhou Haiying Food Co., Ltd. Binzhou Haiying Note 6
income tax
Exempt from
Dezhou Haiying Food Co., Ltd. Dezhou Haiying Note 6
income tax
Guangzhou Yannong Investment Management Guangzhou
20 Note 18
Co., Ltd. Yuannong
Guangdong Haid Poverty Alleviation Investment Guangdong Haid
25
Development Co., Ltd. Poverty Alleviation
Liyang Jiu He Feed Co., Ltd. Liyang Jiuhe 25
Shaoguan Haid Biotechnology Co., Ltd. Shaoguan Haid 25
Shandong Daxin Group Co., Ltd. Shandong Daxin 25
Weifang Daxin Feed Co., Ltd. Weifang Daxin 25
Yantai Daxin Feed Co., Ltd. Yantai Daxin 25
Linyi Yihe Feed Co., Ltd. Linyi Yihe 25
Jiangsu Daxin Feed Co., Ltd. Jiangsu Daxin 25
Shandong Daxin Agriculture and Animal
Shandong Daxin 25
Husbandry Technology Co., Ltd.
Qingdao Zhizhu Xia Pig Raising Service Co.,
Qingdao Zhizhuxia 20 Note 18
Ltd.
Linyi Zhizhuxia Breeding Technology Service
Linyi Zhizhuxia 25
Co., Ltd.
Liaocheng Daxin Feed Co., Ltd. Liaocheng Daxin 25
Laiyang Haihe Agriculture and Animal
Laiyang Haihe 25
Husbandry Technology Co., Ltd.
Qingdao Haihe Agriculture and Animal
Qingdao Haihe 25 Note 26
Husbandry Technology Co., Ltd.
Linyi Haihe Agriculture and Animal Husbandry
Linyi Haihe 25
Technology Co., Ltd.
Yantai Zhizhuren
Yantai Zhizhuren Feed Co., Ltd. 25
Feed
272
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Income tax
Taxpayer Abbreviation Note
rate (%)
Gaomi Haihe Agriculture and Animal Husbandry
Gaomi Haihe 25
Technology Co., Ltd.
Qingdao Huaxin Feed Co., Ltd. Qingdao Huaxin 25
Huaian Hailong Feed Co., Ltd. Huai’an Hailong 25
Hunan Jinhuilong Technology Co., Ltd. Hunan Jinhuilong 25
Yueyang Jinhuilong Biological Technology Co., Yueyang
25
Ltd. Jinhuilong
Jiaozuo Jinhuilong Biological Technology Co.,
Jiaozuo Jinhuilong 25
Ltd.
Shijiazhuang
Shijiazhuang Huilong Feed Co., Ltd. 25
Huilong
Handan Huilong Feed Co., Ltd. Handan Huilong 20 Note 18
Huilong Feed Co., Ltd. Huai’an Huilong 20 Note 18
Fuzhou Haid Feed Co., Ltd. Fuzhou Haid 25
Zhaoqing Gaoyao Haid Biological Technology
Gaoyao Haid 25
Co., Ltd.
Nanning Haid Biotechnology Co., Ltd. Nanning Haid 25
Ganzhou Hailong Feed Co., Ltd. Ganzhou Hailong 25
Guangzhou
Guangzhou Haiyuan Microfinance Co., Ltd. Haiyuan 25
Micro-Credit
Guangdong Haid
Guangdong Haid Biotechnology Co., Ltd. Biological 20 Note 18
Technology
Jiangmen
Jiangmen Rongchuan Feed Co., Ltd. 25
Rongchuan
Chongqing Zhihai Feed Co., Ltd. Chongqing Zhihai 25
Meizhou Haid Biotechnology Co., Ltd. Meizhou Haid 25
Yicheng Haid Biological Technology Co., Ltd. Yicheng Haid 25
Heshan Ronghai Feed Co., Ltd. Heshan Ronghai 25
Hexian Haid Biotechnology Co., Ltd. Hexian Haid 25
Pingnanhai Da Feed Co., Ltd. Pingnan Haid 25
Guangzhou
Guangzhou Shunkang Aquaculture Co., Ltd. 25
Shunkang
Tianjin Rongchuan Feed Co., Ltd. Tianjin Rongchuan 25
Zhanjiang Rongda Feed Co., Ltd. Zhanjiang Rongda 25
Huainan Haid Biological Feed Co., Ltd. Huainan Haid 25
Maoming Haid Biological Technology Co., Ltd. Maoming Haid 25
Guangzhou Ronghai Breeding Technology Co., Guangzhou
20 Note 18
Ltd. Ronghai
Zhongshan City Seawater Production And Zhongshan
12.5 Note 3
Aquaculture Co., Ltd. Ronghai
273
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Income tax
Taxpayer Abbreviation Note
rate (%)
Guangzhou Rongda Aquatic Products Guangzhou
12.5 Note 3
Technology Co., Ltd. Rongda
Jiangmen Ronghai Aquaculture Technology Co.,
Jiangmen Ronghai 12.5 Note 3
Ltd.
25, exempt
Zhongshan Yugezi Food Co., Ltd. Zhongshan Yugezi from income Note 6
tax
Guangxi Ronghai Fishery Co., Ltd. Guangxi Ronghai 12.5 Note 3
Zhongshan Rongda Aquatic Seed Co., Ltd. Zhongshan Rongda 12.5 Note 3
Sichuan
Sichuan Rongchuan Feed Co., Ltd. 25
Rongchuan
Yulin Haid Feed Co., Ltd. Yulin Haid 25
Sichuan Haile Agriculture and Animal
Sichuan Haile 25
Husbandry Co., Ltd.
Yichang
Yichang Zhihai Agriculture and Animal
Agriculture and 25
Husbandry Co., Ltd.
Animal Husbandry
Mianyang
Mianyang Zhonggui Feed Co., Ltd. 25
Zhonggui
Dali Haiwang Feed Co., Ltd. Dali Haiwang 20 Note 18
Dali Haizhi Trade Co., Ltd. Dali Haizhi 20 Note 18
Yunnan Zhonggui Feed Co., Ltd. Yunnan Zhonggui 20 Note 18
Chongqing Haizhi Feed Co., Ltd. Chongqing Haizhi 20 Note 18
Chongqing Exempt from
Chongqing Hainong Veterinary Service Co., Ltd. Note 2
Hainong income tax
Guiyang Haid Zhihai Feed Co., Ltd. Guiyang Zhihai 25
Qujing Zhihai Feed Co., Ltd. Qujing Zhihai 25
Haile (Luliang) Biotechnology Co., Ltd. Luliang Haile 20 Note 18
Guangzhou Xingnong Ecological Agriculture Guangzhou
25
and Animal Husbandry Development Co., Ltd. Xingnong
Xinxing County Haifeng Agriculture and Animal Exempt from
Xinxing Haifeng Note 2
Husbandry Co., Ltd. income tax
Exempt from
Sihui Haifeng Ecological Agriculture Co., Ltd. Sihui Haifeng Note 2
income tax
Wengyuan Haifeng Ecological Agriculture Co., Exempt from
Wengyuan Haifeng Note 2
Ltd. income tax
Yingde Haifeng Agriculture and Animal Yingde Haifeng Exempt from
Note 2
Husbandry Co., Ltd. Agri. income tax
Qingyuan Exempt from
Qingyuan Haichuan Food Co., Ltd. Note 6
Haichuan income tax
Exempt from
Ezhou Haifeng Ecological Agriculture Co., Ltd. Ezhou Haifeng Note 2
income tax
Yingde Haifeng Ecological Agriculture Co., Ltd. Yingde Haifeng Exempt from Note 2
274
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Income tax
Taxpayer Abbreviation Note
rate (%)
income tax
12.5, exempt
Qingyuan Ronghai Breeding Technology Co.,
Qingyuan Ronghai from income Note 3, 6
Ltd.
tax
Guangzhou Haiyin Financing Guarantee Co.,
Guangzhou Haiyin 25
Ltd.
Qinzhou Hailong Feed Co., Ltd. Qinzhou Hailong 25
Hainan Haid Biotechnology Co., Ltd. Hainan Haid 25
Liuzhou Haid Feed Co., Ltd. Liuzhou Haid 25
Jiangsu Dachuan Biotechnology Co., Ltd. Jiangsu Dachuan 25
Zhaoqing Ronghai Aquaculture Technology Co.,
Zhaoqing Ronghai 12.5 Note 3
Ltd.
Gaoan Haid Biotechnology Co., Ltd. Gaoan Haid 25
Shanghai Gaohaid Biotechnology Co., Ltd. Shanggao Haid 25
Qingyuan Hailong Biological Technology Co.,
Qingyuan Hailong 25
Ltd.
Qingyuan
Guangdong Qingyuan Guanghong Feed Co., Ltd. 20 Note 18
Guanghong
Guangdong Haid
Guangdong Haid International Trade Co., Ltd. International 25
Trading
Guangzhou Nansha Haid Biotechnology Co.,
Nansha Haid 25
Ltd.
Yancheng Haiwei Biological Technology Co.,
Yancheng Haiwe 25
Ltd.
Hainan Haid Aquatic Seed Industry
Hainan Haid Seed 12.5 Note 3
Development Co., Ltd.
Wuzhou Haid Biotechnology Co., Ltd. Wuzhou Haid 25
Dongguan Haiqi Feed Co., Ltd. Dongguan Hailin 25
Zhangzhou
Zhangzhou Haiheng Feed Co., Ltd. 25
Haiheng
Deyang Dachuan Agriculture and Animal
Deyang Dachuan 25
Husbandry Technology Co., Ltd.
Mianyang Hailong Feed Co., Ltd. Mianyang Hailong 25
Meishan Haid Biotechnology Co., Ltd. Meishan Haid 25
Guangzhou
Guangzhou Nongzhidao Feed Co., Ltd. 25
Nongzhidao
Yingkou Dachuan Feed Technology Co., Ltd. Yingkou Dachuan 25
Jiesou Haid Feed Co., Ltd. Jieshou Haid 25
Anlu Haid Feed Co., Ltd. Anlu Haid 25
Jingzhou Haihe Biological Technology Co., Ltd. Jinzhou Haihe 25
Guangzhou Chenzhao Investment Co., Ltd. Guangzhou 25
275
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Income tax
Taxpayer Abbreviation Note
rate (%)
Chenzhao
Hainan Zhuangmei Agriculture and Animal
Hainan Zhuangmei 25
Husbandry Co., Ltd.
Yancheng Runchuan Agricultural Science And Yancheng
12.5 Note 3
Technology Co., Ltd. Runchuan
Zigong Hailong Biological Technology Co., Ltd. Zigong Hailong 25
Jiangxi Jiabo Biological Engineering Co., Ltd. Jiangxi Jiabo 25
Jiangxi Gunan Herbal Science And Technology Jiangxi
25
Collaborative Innovation Co., Ltd. Gunanbencao
Jiangxi Renxin Tang Biotechnology Co., Ltd. Jiangxi Renxintang 25
Guangxi
Guangxi Rongchuan Feed Co., Ltd. 20 Note 18
Rongchuan
Dali Haid Biotechnology Co., Ltd. Dali Haid 25
Guangzhou Haid Technology Development Co., Guangzhou Haid
25
Ltd. Technology
Heshan Haiwei Feed Co., Ltd. Heshan Haiwei 25
Ganzhou Lianduoli Feed Technology Co., Ltd. Ganzhou Lianduoli 25
Maoming Haiwei Feed Co., Ltd. Maoming Haiwei 25
Yangjiang Haihe Feed Co., Ltd. Yangjiang Haihe 25
Leizhou Hailong Biotechnology Co., Ltd. Leizhou Hailong 25
Sichuan Hailong Biotechnology Co., Ltd. Sichuan Hailong 25
Qinzhou Haiwei Feed Co., Ltd. Qinzhou Haiwei 25
Yancheng
Yancheng Rongchuan Biotechnology Co., Ltd. 25
Rongchuan
Naning Dachuan Biotechnology Co., Ltd. Naning Dachuan 25
Yongzhou Haid Biotechnology Co., Ltd. Yongzhou Haid 25
Baotou Haicheng Feed Co., Ltd. Baotou Haicheng 25
Jiangsu Haid Biotechnology Co., Ltd. Jiangsu Haid 25
Guiyang Haid Biotechnology Co., Ltd. Guiyang Haid 25
Wuwei Haimu Biotechnology Co., Ltd. Wuwei Haimu 25
Guilin Haid Biotechnology Co., Ltd. Guilin Haid 25
Inner Mongolia
Inner Mongolia Haid Feed Co., Ltd. 25
Haid
Guiyang Dachuan Biotechnology Co., Ltd. Guiyang Dachuan 25
Xingtai Haid Biotechnology Co., Ltd. Xingtai Haid 25
Foshan Lianduoli Feed Co., Ltd. Foshan Lianduoli 20 Note 18
Guangdong
Guangdong Haifulai Biotechnology Co., Ltd. 25
Haifulai
Liupanshui Haid Biotechnology Co., Ltd. Liupanshui Haid 25
Guangdong Haiqi Investment Co., Ltd. Guangdong Haiqi 25
276
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Income tax
Taxpayer Abbreviation Note
rate (%)
Heze Haiboyoumei Technical Service Co., Ltd. Heze Haiboyoumei 25
Hubei Haiqi Technical Service Co., Ltd. Hubei Haiqi 25
Kaifeng Haiqi Technical Service Co., Ltd. Kaifeng Haiqi 25
Sichuan Haiqi Biotechnology Co., Ltd. Sichuan Haiqi 25
Xishui Haiqi Technical Service Co., Ltd. Xishui Haiqi 25
Kunming Haiqi Technical Service Co., Ltd. Kunming Haiqi 25
Mianyang Haiqi Breeding Technology Service
Mianyang Haiqi 25
Co., Ltd.
Yaan Haiqi Breeding Technology Service Co.,
Ya'an Haiqi 25
Ltd.
Nanchang Haiqi Veterinary Medicine Co., Ltd. Nanchang Haiqi 25
Hengyang Haiqi Technical Service Co., Ltd. Hengyang Haiqi 25
Jingzhou Haiqi Technical Service Co., Ltd. Jingzhou Haiqi 25
Jingshan Haiqi Technical Service Co., Ltd. Jingshan Haiqi 20 Note 18
Huaihua Haiqi Technical Service Co., Ltd. Huaihua Haiqi 20 Note 18
Jieshou Haiqi Technical Service Co., Ltd. Jieshou Haiqi 20 Note 18
Guangzhou Haiki Technology Co., Ltd. Guangzhou Hailin 20 Note 18
Meizhou Haiqi Technology Co., Ltd. Meizhou Haiqi 20 Note 18
Zhangzhou Haiqi Veterinary Medicine Co., Ltd. Zhangzhou Haiqi 25
Maoming Haiqi Technology Co., Ltd. Maoming Haiqi 20 Note 18
Yangjiang Haiqi Technology Co., Ltd. Yangjiang Haiqi 20 Note 18
Qingyuan Haiqi Technology Co., Ltd. Qingyuan Haiqi 25
Gansu Muqi Agricultural Technology Co., Ltd. Gansu Muqi 25
Raoping Haide Biotechnology Co., Ltd. Raoping Haide 20 Note 18
Yulin Haiqi Biotechnology Co., Ltd. Yulin Haiqi 20 Note 18
Qinzhou Pubei Haiqi Biotechnology Co., Ltd. Qinzhou Haiqi 20 Note 18
Xingtai Haiqi Breeding Technology Service Co.,
Xingtai Haiqi 20 Note 18
Ltd.
Nanning Haililai Biotechnology Co., Ltd. Nanning Haililai 25
Shaoyang Haid Feed Co., Ltd. Shaoyang Haid 25
Jiangmen Debao Group Co., Ltd. Jiangmen Debao 25
Guangzhou
Guangzhou Denong Feed Co., Ltd. 25
Denong
Foshan Dazhi Biotechnology Co., Ltd. Foshan Dazhi 25
Taishan Debao Feed Co., Ltd. Taishan Debao 25
Maoming Debao Agriculture and Animal
Maoming Debao 25
Husbandry Co., Ltd.
Guangzhou
Guangzhou Debaonongshan Feed Co., Ltd. 25
Debaonongshan
277
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Income tax
Taxpayer Abbreviation Note
rate (%)
Foshan Hanheng Luggage Manufacturing Co.,
Foshan Hanheng 25
Ltd.
Shaoguan Dachuan Biotechnology Co., Ltd. Shaoguan Dachuan 25
Liaoning Haid Biotechnology Co., Ltd. Liaoning Haid 25
Huai'An Haichang Feed Co., Ltd. Huai'an Haichang 25
Guizhou
Guizhou Hailongwang Biotechnology Co., Ltd. 25
Hailongwang
Guangdong Huashite Testing Technology Co.,
Huashite Test 25
Ltd.
Hebei Haimu Biotechnology Co., Ltd. Hebei Haimu 25
Dali Dachuan Biotechnology Co., Ltd. Dali Dachuan 25
Yunnan Hairui Biotechnology Co., Ltd. Yunnan Hairui 25
Henan
Henan Haidajiuzhou Biotechnology Co., Ltd. 25
Haidajiuzhou
Enshi Haida Biotechnology Co., Ltd. Enshi Haida 25
Ningguo Haid Biotechnology Co., Ltd. Ningguo Haid 25
Chaozhou Haid Biotechnology Co., Ltd. Chaozhou Haid 25
Tianjin Haixin Biotechnology Co., Ltd. Tianjin Haixin 25
Nanshan Haid Biotechnology (Jinhu) Co., Ltd. Jinhu Haid 25
Tongliao Haid Biotechnology Co., Ltd. Tongliao Haid 25
Huaihua Hailong Biotechnology Co., Ltd. Huaihua Hailong 25
Guangzhou Haihan Finance Technology Co.,
Guangzhou Haihan 25
Ltd.
Guangdong Haizhihui Breeding Technology Guangdong
25
Service Co., Ltd. Haizhihui
Jiangsu Haiwei Feed Co., Ltd. Jiangsu Haiwei 25
Guangdong
Guangdong Hairuike Biotechnology Co., Ltd. 25
Hairuike
Hubei Haida Seed Technology Co., Ltd. Hubei Haid Seed 12.5 Note 3
Note 1: The Company and its subsidiaries Jiangmen Haid, Guangdong Haiinte, Qingyuan Haibei, Zhuhai
Rongchuan, Zhuhai Hailong, Yunnan Haida, Heze Haiding, Hunan Innovation, Shijiazhuang Weike,
Shenyang Haida were recognized as high-tech enterprises by their respective provincial departments of
science and technology, departments of finance, offices of the State Administration of Taxation or local
taxation bureaus with an effective period of three years. Their applicable corporate income tax rate for 2021
is 15%.
Note 2: In accordance with Corporate Income Tax Law of the People’s Republic of China and the
Regulation on the Implementation of the Corporate Income Tax Law of the People’s Republic of China, the
income of the Company’s subsidiaries that is derived from livestock and poultry farming and veterinary
service is exempt from corporate income tax.
Note 3: The Company's subsidiaries Enping Fengwo, Hunan Haid, Taizhou Haid, Guangdong Haixingnong,
Zhanjiang Haixingnong, Zhanjiang Haijingzhou, Hainan Haixingnong (the subsidiary was recognized as a
high-tech enterprise by the local provincial science and technology department, provincial finance
278
Full text of 2021 Annual Report of Guangdong Haid Group Co., Limited
department, provincial state taxation bureau and provincial local taxation bureau), Jingtai Haijingzhou,
Yongji Haijingzhou, Yuncheng Haishengyuan, Zhangzhou Haijingzhou, Changyi Haijingzhou, Nantong
Haijingzhou, Shanwei Haijingzhou, Dongying Haijingzhou, Shanwei Hazenong, Zhuhai Ronghai,
Changzhou Haid, Nanhai Bairong, Zhaoqing Bairong, Yangxin Bairong, Jingzhou Bairong, Shandong
Bairong, Hainan Bairong, Zhaoqing Baishengyuan, Qingyuan Baishengyuan, Zhongshan Ronghai,
Guangzhou Rongda, Jiangmen Ronghai, Guangxi Ronghai, Zhongshan Rongda, Qingyuan Ronghai,
Zhaoqing Ronghai, Hainan Haid Seed, Yancheng Runchuan, Hubei Haid Seed in accordance with Article
27 of the Corporate Income Tax Law of the People’s Republic of China and Article 86 of the Regulation on
the Implementation of the Corporate Income Tax Law of the People’s Republic of China, the company's
income from marine and inland aquaculture is subject to enterprise income tax at a 50% reduction in the tax
rate of 25%, while other income is subject to enterprise income tax at a 25% tax rate.
Note 4: Rongcheng Yandunjiao, the subsidiary of the Company, manufactures fish powder and shrimp
powder. Income from these primarily processed agricultural products is exempt from corporate income tax
in accordance with Notice of the Ministry of Finance and State Administration of Taxation on Announcing
the Scope of Primary Processing of Agricultural Products Covered by Preferential Policies on Corporate
Income Tax (for Trial Implementation) (Caishui [2008] No. 149). Other income is subject to corporate
income tax at 25%.
Note 5: Fujian Haidsun and Pucheng Haidsun, the subsidiaries of the Company, manufacture chicken
powder. Income from the sales of these primarily processed agricultural products is exempt from corporate
income tax in accordance with Notice of the Ministry of Finance and State Administration of Taxation on
Announcing the Scope of Primary Processing of Agricultural Products Covered by Preferential Policies on
Corporate Income Tax (for Trial Implementation) (Caishui [2008] No. 149). Other income is subject to
corporate income tax at 25%.
Note 6: Jiaxiang Haiying, Linxi Haiying, Yiyuan Haiying, Zouping Haiying, Binzhou Haiying, Dezhou
Haiying, Zhongshan Yugezi, Qingyuan Haichuan, and Qingyuan Hairong, the subsidiaries of the Company,
engaged in slaughtered and cut poultry, and income derived from the sales of these primarily processed
agricultural products is exempt from corporate income tax in accordance with Notice of the Ministry of
Finance and State Administration of Taxation on Announcing the Scope of Primary Processing of
Agricultural Products Covered by Preferential Policies on Corporate Income Tax (for Trial Implementation)
(Caishui [2008] No. 149). Other income is subject to corporate income tax at 25%.
Note 7: Gansu Haitai, a subsidiary of the Company, is entitled to enjoy the preferential corporate income
tax policy at a reduced rate of 15% from 2021 to 2030 according to the Notice of the General
Administration of Customs of the Ministry of Finance and the State Administration of Taxation on Tax
Policy Issues Related to the Further Implementation of the Western Development Strategy (Caishui [2011]
No. 58), the Announcement of the State Administrati 
