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公司公告

深粮B:2019年半年度报告(英文版)(更新后)2019-09-03  

						SHENZHEN CEREALS HOLDINGS CO., LTD.

       SEMI-ANNUAL REPORT 2019




              August 2019
                                             深圳市深粮控股股份有限公司 2019 年半年度报告全文




     Section I. Important Notice, Contents and Paraphrase

Board of Directors, Supervisory Committee, all directors, supervisors and senior

executives of SHENZHEN CEREALS HOLDINGS CO., LTD.(hereinafter

referred to as the Company) hereby confirm that there are no any fictitious

statements, misleading statements, or important omissions carried in this report,

and shall take all responsibilities, individual and/or joint, for the reality,

accuracy and completion of the whole contents.

Chairman of the Company Zhu Junming, General Manager Hu Xianghai, Head

of Accounting Ye Qingyun and Head of Accounting Institution (Accounting

Supervisors) Wen Jieyu hereby confirm that the Financial Report of

Semi-Annual Report 2019 is authentic, accurate and complete.

All Directors are attended the Board Meeting for deliberation of this Report.

Concerning the forward-looking statements with future planning involved in the

annual report, they do not constitute a substantial commitment for investors,

Securities Times, China Securities Journal, Hong Kong Commercial Daily and

Juchao Website (www.cninfo.com.cn) are the media appointed by the Company

for information disclosure, all information of the Company disclosed in the

above mentioned media should prevail. Investors are advised to exercise caution

of investment risks.

The Company has analyzed the risk factors that the Company may exist and its

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countermeasures in the report, investors are advised to pay attention to read

“Risks and Countermeasures” in the report of Section IV-Discussion and

Analysis of the Operation. This report has been prepared in Chinese and English

version respectively. In the event of difference in interpretation between the two

versions, Chinese report shall prevail.

The Company plans not to distributed cash dividend, bonus and no capitalizing

of common reserves either.




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                                                Contents




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

Section II. Company Profile and Main Financial Indexes ..................................... 6

Section III. Summary of Company Business ........................................................ 11

Section IV. Discussion and Analysis of the Operation .......................................... 16

Section V. Important Events .................................................................................. 29

Section VI. Changes in Shares and Particulars about Shareholders ................... 40

Section VII. Preferred Stock .................................................................................. 45

Section VIII. Particulars about Directors, Supervisor and Senior Executives ... 46

Section IX. Corporate Bonds ................................................................................. 48

Section X. Financial Report ................................................................................... 49

Section XI. Documents available for Reference .................................................. 238




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                                          Paraphrase


                    Items            Refers to                               Contents

SZCH/Listed Company /the Company     Refers to Shenzhen Cereals Holdings Co., Ltd.

SZCG                                 Refers to Shenzhen Cereals Group Co., Ltd

Doximi                               Refers to SZCG Doximi Business Co., Ltd.

Flour Company                        Refers to Shenzhen Flour Co., Ltd

SZCG Quality Inspection              Refers to SZCG Quality Inspection Co., Ltd.

Dongguan Logistics / SZCG Dongguan
                                     Refers to SZCG Dongguan Logistics Co., Ltd.
Logistics

Dongguan Food Industrial Park        Refers to Dongguan International Food Industrial Park Development Co., Ltd.

Wuyuan Ju Fang Yong                  Refers to Ju Fang Yong Tea Industry Co., Ltd. in Wuyuan County

Shenbao Technology Center            Refers to Shenzhen Shenbao Technology Center Co., Ltd.

Fude Capital                         Refers to Shenzhen Fude State-Owned Capital Operation Co., Ltd.

Agricultural Products                Refers to Shenzhen Agricultural Products Co., Ltd

                                                 Shenzhen Municipal People’s Government State-owned Assets
Shenzhen SASAC                       Refers to
                                                 Supervision & Administration Commission

CSRC                                 Refers to China Securities Regulation Commission

RMB/10 thousand Yuan                 Refers to CNY/ten thousand Yuan




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       Section II. Company Profile and Main Financial Indexes

I. Company profile

Short form for share              SZCH, Shenliang B                       Stock code                    000019, 200019

Listing stock exchange            Shenzhen Stock Exchange

Chinese name of the Company 深圳市深粮控股股份有限公司

Abbr. of Chinese name of the
                                  深粮控股
Company (if applicable)
English name of the Company
                                  SHENZHEN CEREALS HOLDINGS CO.,LTD
(if applicable)
Legal Representative              Zhu Junming


II. Person/Way to contact

                               Secretary of the Board                                    Rep. of security affairs

Name            Du Jianguo                                          Chen Kaiyue, Liu Muya

Contact         13/F, Tower A, World Trade Plaza, No.9 Fuhong       13/F, Tower A, World Trade Plaza, No.9 Fuhong Rd., Futian
add.            Rd., Futian District, Shenzhen                      District, Shenzhen

Tel.            0755-82027522                                       0755-82027522

Fax.            0755-83778311                                       0755-83778311

E-mail          dujg@slkg1949.com                                   chenky@slkg1949.com, liumy@slkg1949.com


III. Others

1. Way of contact


Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or
not

√ Applicable     □ Not applicable

                                                    8/F, Tower B, No.4 Building, Software Industry Base, South District, Science &
Company Registration Address
                                                    Technology Park, Xuefu Rd., Yuehai Street, Nanshan District, Shenzhen

Postal Code of Company Registration Address         518057

Company's Office Address                            13/F, Tower A, World Trade Plaza, No.9 Fuhong Rd., Futian District, Shenzhen

Postal Code of the Company's Office Address         518033

Company Web Site                                    www.slkg1949.com

Company E-mail                                      szch@slkg1949.com

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Query date of the interim notice on designated
                                                   2019-04-27
website (if applicable)

Search index of the interim notice on designated
                                                   Found more in the Notice of the Change of Company’s Office Address and
website (if applicable)
                                                   Contact Information released on Juchao Website (www.cninfo.com.cn)



2. Information disclosure and preparation place


Whether information disclosure and preparation place changed in reporting period or not
□ Applicable   √ Not applicable
The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation
place for semi-annual report have no change in reporting period, found more details in Annual Report 2018.


3. Other relevant information

Whether other relevant information changed during the reporting period
√ Applicable   □ Not applicable
 (1) On February 18, 2019, the company completed the industrial and commercial registration procedures for the
changes of company name, business scope and registered capital, and obtained the Business License renewed by
the Shenzhen Market Supervision Administration. The company name was changed from “Shenzhen Shenbao
Industrial Co., Ltd.” to “Shenzhen Cereals Holdings Co., Ltd.”; the business scope newly added grain and oil
circulation and grain and oil reserve services businesses such as grain and oil reserves, grain and oil trade, grain
and oil processing, etc. based on the original main business of the production, research and development and sales
of food raw materials (ingredients) mainly based on deep processing of tea and natural plants; the registered
capital was changed from “RMB 496,782,303” to “RMB 1,152,535,254”. For details, please refer to the
“Announcement of the Company on Completion of Industrial and Commercial Registration for the Changes of
Company Name, Business Scope and Registered Capital” disclosed on www.cninfo.com.cn on February 20, 2019.
(2) Applied by the company and approved by the Shenzhen Stock Exchange, the company's securities short name
has been changed from “Shenshenbao A, Shenshenbao B” to “SZCH, Shenliang B” since February 28, 2019. For
details, please refer to the “Announcement of the Company on Changing the Securities Short Name” disclosed on
www.cninfo.com.cn on February 28, 2019.




IV. Main accounting data and financial indexes

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

√Yes □No
Reasons for retroactive adjustment or re-statement
Enterprise combined under the same control

                                                   The Period              Same period of last year           Changes over last

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                                                                                                                               year

                                                                          Before adjustment      After adjustment       After adjustment

Operating revenue (RMB)                          4,782,167,732.69             136,721,215.40       4,434,688,646.82                      7.84%
Net profit attributable to shareholders of
                                                   203,168,850.61             -18,246,639.07         202,779,343.34                      0.19%
the listed Company (RMB)
Net profit attributable to shareholders of
the listed Company after deducting                 198,195,100.05             -18,884,920.69         -18,884,920.69              1,149.49%
non-recurring gains and losses (RMB)
Net cash flow arising from operating
                                                  -389,429,629.75               9,795,470.07          52,861,245.30               -836.70%
activities (RMB)
Basic earnings per share (RMB/Share)                         0.1763                  -0.0367                  0.1759                     0.23%

Diluted earnings per share (RMB/Share)                       0.1763                  -0.0367                  0.1759                     0.23%

Weighted average ROE                                         4.82%                   -1.95%                   5.06%                   -0.24%

                                                                                                                       Changes over end of
                                                                                     End of last year
                                               End of the Period                                                             last year

                                                                          Before adjustment      After adjustment       After adjustment

Total assets (RMB)                               6,432,513,092.25           1,040,484,135.20       6,468,951,793.87                   -0.56%
Net assets attributable to shareholder of
                                                 4,260,480,115.67             928,673,938.26       4,172,502,535.11                      2.11%
listed Company (RMB)
Total share capital of the Company on the trading day prior to disclosure:

Total share capital of the Company on the trading day prior to
                                                                                                                             1,152,535,254
disclosure (Share)

Total diluted EPS calculated with the latest share capital
                                                                                                                                      0.1763
(RMB/Share)


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

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

√ Applicable □ Not applicable
                                                                                                                                      In RMB
                                   Net profit attributable to shareholders of listed       Net assets attributable to shareholders of listed
                                                      Company                                                 Company

                                     Current period                Last period                  Period-end               Period-begin

Chinese GAAP                             203,168,850.61                   202,779,343.34        4,260,480,115.67          4,172,502,535.11

Items and amount adjusted by IAS

Adjustment for other payable
                                                                                                     1,067,000.00              1,067,000.00
fund of stock market


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regulation

IAS                                       203,168,850.61                202,779,343.34      4,261,547,115.67         4,173,569,535.11


2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)


□ Applicable √ Not applicable

The Company has no above mentioned condition occurred in the period


3. Explanation on differences of the data under accounting standards in and out of China

□ Applicable √ Not applicable


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

√ Applicable □ Not applicable
                                                                                                                                In RMB
                                            Item                                                      Amount                  Note
Gains/losses from the disposal of non-current asset (including the write-off that
                                                                                                                -4,184.59
accrued for impairment of assets)
Governmental subsidy reckoned into current gains/losses (not including the subsidy
enjoyed in quota or ration according to national standards, which are closely relevant                      5,463,876.60
to enterprise’s business)

Profit and loss of assets delegation on others’ investment or management                                   3,627,466.27
Gains and losses from change of fair values of held-for-transaction financial assets and
financial liabilities except for the effective hedge business related to normal business
                                                                                                                28,381.21
of the Company, and investment income from disposal of trading financial assets and
liabilities and financial assets available for sale

Switch-back of provision of impairment of account receivable and contract assets
                                                                                                               412,500.00
which are treated with separate depreciation test
Other non-operating income and expenditure except for the aforementioned items                             -3,619,767.49
Less: impact on income tax                                                                                     702,095.88
      Impact on minority shareholders’ equity (post-tax)                                                      232,425.56
Total                                                                                                       4,973,750.56        --

Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons

□ Applicable √ Not applicable

In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
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                                                                      深圳市深粮控股股份有限公司 2019 年半年度报告全文


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




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                   Section III. Summary of Company Business

I. Main businesses of the Company in the reporting period

Does the Company need to comply with disclosure requirements of the special industry?
No
During the reporting period, the company accelerated the service convergence and synergetic development, the
main business includes the circulation and service business of grain and oil reserves, trade and processing, and the
production, research and development and sales of food raw materials (ingredients) mainly based on deep
processing of tea and natural plants.


The grain and oil trade business are mainly rice, wheat, rice in the husk, corn, sorghum, cooking oil and other
varieties of grain and oil. According to the market conditions and the needs of upstream and downstream enterprises,
the above-mentioned grain and oil products purchased are independently traded. The wheat, rice in the husk, corn,
barley and sorghum in the trade products are the unprocessed grain, which are mainly used for the further processing
of food and feed for providing raw material distribution service to customers such as large traders, feed and flour
processing enterprises in the industry ; rice, flour and edible oil are the finished grain and oil, of which the main
consumer groups are institutions, organizations, enterprises and public institutions, food deep processing
enterprises and community residents.
The grain and oil processing business are mainly the processing and sale of flour, rice, cooking oil and other
products. The company's flour brands and products include “Jinchangman”, “Yingshanhong” and “Hongli” series
bread flour; “Clivia” and “Canna” series tailored flour for cakes and steamed bun; “Sunflower” high-gluten tailored
flour and biscuit tailored flour; “Feiyu” caramel treats tailored flour; “Yuejixiang” moon cake tailored flour and
other various small packages of flour. Rice products include “Shenliang Duoxi”, “Guzhixiang”, “Jinjiaxi”,
“Runxiangliangpin”, “Hexiang”, “Shenliang Yushuiqing”, etc. Cooking oil products include brands such as
“Shenliang Duoxi”, “Shenliang Fuxi”, “Hongli” and “Shenliang Yushuiqing”, etc. Shenliang Duoxi
Changxiangdao Daohuaxiang Rice was selected as the first batch of “China Good Grain and Oil” products of the
National Grain Administration, and it was the only selected product in Guangdong Province. The "Shenliang
fish-water friendship" has formed a series of rice, noodles, oil, miscellaneous and special military supplies and
military civilian brands.


The grain and oil reserve service business mainly provide dynamic grain and oil reserve services to local
governments in Shenzhen, and provides local governments with market-oriented services such as grain and oil
reserves, testing, and rotation in the form of business holdings. With the advantages of brand, reputation, experience,
management, service, facilities and information system accumulated in the grain and oil market, we independently
organize and implement the procurement, storage, rotation, sales and other activities of the local government
reserves of grain and oil, and ensure the quality, quantity and safety and other aspects of grain and oil reserves are in
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line with the requirements of the reserve grain and oil administrative authorities of local governments, providing
local governments with high-quality dynamic grain and oil reserve services to assist local food security.
The company provides grain and oil circulation services such as warehousing and logistics, terminal loading and
unloading, and quality inspection for upstream and downstream enterprises in the industrial chain. The Shenliang
Dongguan Grain Logistics Nodes Project construction and operation has been steadily advanced, completed
storehouse capacity of 320,000 tons (including 20,000 tons of gas film warehouse) and put the 10000-ton wharf
berth into production, which achieved the storage transfer volume reached 1.2 million tons, and the terminal
transfer volume was more than 400,000 tons; at the same time, the CDE silos with 510,000 tons of warehouse
capacity under construction, food deep processing projects, the terminal phase I and other projects are progressing
smoothly. After the project is completed, it will become a comprehensive grain circulation service provider
integrating five functions including grain and oil terminal, transfer reserve, inspection and processing, processing
industry, and market transaction. The subordinate Shenliang Quality Inspection has more than 100 professional
equipments, has obtained the qualification certificate of quality inspection organization, and was awarded the
“Guangdong Shenzhen National Grain Quality Monitoring Station”. There were more than 4,000 samples tested
during the reporting period. The company also provides logistics services and cold chain delivery services to its
customers. The above-mentioned integrated services of grain and oil supply chain and distribution is becoming an
increasingly important business segment of the company.


The tea business mainly covers deep processing of tea, sales of fine tea, tea life experience, food and beverage,
and technology research and development, etc. The main products include “Golden Eagle” instant tea powder, tea
concentrate and other series of tea products; “Jufangyong”, “Gutan”, “Fuhaitang” series of tea products; “Tri-Well”
oyster sauce, chicken essence, seafood sauce and other series of condiments; “Shenbao” chrysanthemum tea, lemon
tea, herbal tea and other series of drinks.


II. Major changes in main assets

1. Major changes in main assets


                Major assets                                          Note of major changes


Equity assets                          No major Change

Fixed assets                           No major Change

Intangible assets                      No major Change

Construction in progress               Investment for node project engineering from Shenliang Dongguan Logistic increased


2. Main overseas assets

□ Applicable √ Not applicable



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III. Core Competitiveness Analysis

Does the Company need to comply with disclosure requirements of the special industry?

No
During the reporting period, the company extended and expanded the development of grain and tea industry chain,
deepened corporate reforms and strengthened the core competitive advantages of enterprises by optimizing
resource integration. The company stimulated the vitality of the enterprise through innovative implementation of
EVA performance appraisal mechanism, promoted the sustainable development of the enterprise through the grain
logistics node project, promoted the reform of the grain and oil reserve mechanism by adhering to the
marketization direction, and improves the management efficiency by continuously leading the information
construction of the domestic grain industry, prevented business risks by perfecting the management and control
mode, and accumulated strengths in leapfrog development space by strengthening the corporate culture and talent
management, and we have embarked on a sustainable development path of traditional enterprise self-innovation
and formed the company's unique competitiveness.


1. Management Efficiency Advantage
The core management team of the company has rich experience and stable structure, and has a strong strategic
vision and pragmatic spirit. It has formed a set of effective system to promote the high-quality development of the
company by combining with the company’s actual development. The company vigorously promotes the innovation
and transformation of business models, and actively promotes the transition from “trade-oriented enterprises” to
“service-oriented enterprises”, and from “operational management and control” to “strategic management and
control”. In the business management and control, the company builds a “four-in-one” management and control
model that the “business operations and fund management, inventory management, and quality management”
relatively separate and check and balance each other, at the same time, it strengthens risk management, budget
management, plan management, contract management, customer management and brand management and other
measures to effectively prevent operational risks. Through innovative talent management, the company has
established an open talent team to meet the long-term development of enterprises. The company has innovated and
implemented the EVA performance appraisal mechanism and established a result-oriented incentive and restraint
assessment mechanism which effectively built the performance culture and stimulated the viability within the
enterprise. The company insists on cultivating and advocating the corporate culture with “people-oriented,
performance first, excellent quality, and harmony” as the core values, combines the personal development goals of
employees with the corporate vision, and enhances the cohesiveness and centripetal force of the enterprise.
2. Business model advantages
In terms of business layout and management, the company has deepened and subdivided its target markets, carried
out specialized operations in different areas of the grain and oil food industry chain, embraced the Internet, and
gradually built a “trinity” of multilevel product supply network of terminal grain and oil e-commerce, catering and
distribution services, and bulk grain and oil trading services. In terms of e-commerce, the company vigorously
developed new formats of grain, and actively promoted the development of new grain retail formats such as
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“Internet + Grain” and “Community Automatic Selling Grain Supply Centers”. It has already had the B2C Grain
and Oil Network Direct Selling Platform “Doximi .com”, and has opened channels on Tmall, Jingdong Mall and
other e-commerce platforms to promote the online and offline deep integration of e-commerce platforms. In terms
of catering and distribution, the company has built a one-stop distribution service platform for large-scale terminal
customers such as chain catering and canteens of thousands of people. Food and oil trading services, the company
builds a grain bulk commodity trading platform, efficiently integrates business flow “Shenliang Cereals Trading
Network”, logistics and information flow, improves circulation efficiency, and provides spot trading, financing,
logistics, quality inspection, transaction information and other services for internal business units, suppliers and
customers. The company gives full play to the traction role of major projects such as grain logistics nodes,
continuously improves the construction of the grain supply chain system, and promotes the sustainable development
of enterprises.
3. Research and development technology advantages
The company attaches great importance to transforming and upgrading the traditional industries by modern
technologies, and actively introduces a new generation of information technologies such as internet of things,
cloud computing, big data and mobile internet into grain management. It takes the lead in promoting the
construction of “standardization, mechanization, informationization and harmlessness” of warehouse management
in the industry, independently develops “grain logistics information system” (Shenliang GLS), applies RFID
technology and slip sheet equipment, introduces intelligent robots, and upgrades the grain depot operation
efficiency and management efficiency. The company has undertaken a number of national-level research projects,
and multiple IT project results have won national, provincial and municipal awards. More than 30 information
systems have been developed and run normally. As of now, the company has 69 patents and 23 copyrights.
4. Advantages of quality control
The company gives full play to the advantages of products, channels, brands, warehousing, quality inspection, etc.,
and truly provides good quality and safety products for the society. The company has established a quality control
system that is recognized by international large food and beverage enterprises. In the grain and oil business, the
company’s subordinate enterprise, SZCG Quality Test, has the leading grain quality testing technology and
equipment in the domestic grain industry, and has been officially incorporated into the national grain quality
supervision and testing system, and has been awarded the “Guangdong Shenzhen National Grain Quality
Monitoring Station” by the State Administration of Grain. The advanced testing technology selects and checks the
grain from the source, and timely and accurately checks the quality status of grain and oil in all aspects of
warehousing, storage and delivery. Shenliang Quality Test has obtained the qualification certificate (CMA) for
testing and inspection institutions, and it is the first among domestic peers to include pesticide residues, heavy metal
pollutants, mycotoxins and other hygienic indicators and taste value indicators in daily testing indicators, and has
the detection ability of four types of indicators such as grain regular quality, storage quality, hygiene and eating
quality, which can meet the relevant quality inspection requirements of grain and oil products, and can accurately
analyze the nutritional ingredients and hygienic index of grain and determine its storage quality and eating quality.
5. Advantage of brand effect
The company regards “quality” as the cornerstone of establishing the enterprise brand, and takes “good service” and
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“livelihood guarantee” as the brand’s core value, and has created a batch of “reliable grain”, “reliable flour” and
“reliable oil” brand systems, and has formed good brand effects. The company has been selected as one of the “Top
500 Chinese Service Enterprises” for five times, and has won the “China Top Ten Grain and Oil Group”, “China Top
100 Grain and Oil Enterprise”, “China’s Most Respected Grain and Oil Enterprise”, “National Top 100 Military
Supply Stations” and “Key Agricultural Leading Enterprises in Guangdong Province”, etc., and was awarded
“Shenzhen Credit Enterprise”, “Shenzhen Old Brand”, “Leading Enterprises Strongly Support Grain and Oil
Industrialization”, etc., the market influence of “Shenliang Yushuiqing”, “Shenliang Duoxi”, “Guzhixiang”,
“Clivia”, “Shenliang Fuxi” and other brands has gradually expanded, and the subordinate flour company has won
the title of “Shenzhen Old Brand”, and Shenliang Duoxi Changxiangdao Daohuaxiang rice has been selected as the
first batch of “China Good Grain and Oil” products of the State Administration of Grain which is the only selected
product in Guangdong Province.
6. Comprehensive basic advantages
The company has a large-scale warehouse capacity in Shenzhen, it is the main force of Shenzhen's municipal
grain reserves and the “rice bag” trusted by the public. At present, its own grain storage capacity is about 400,000
tons. Over the years, on the basis of giving priority to ensuring the government's macroeconomic regulation and
control of grain and guaranteeing the grain security, the company has been exploring the reform of the grain and
oil reserve system and mechanism, fully utilizing the operational characteristics and advantages of “dynamic
rotation” and fully participating in market competition. In the process of market-oriented self-management, the
company continues to optimize and innovate the grain storage logistics mode and the grain and oil distribution
docking mode, so that the market competitiveness and regulation power have significantly enhanced, the main
channel advantages of grain and oil supply have been further stabilized, and the main position of grain and oil
industry has further highlighted. The company has established long-term, extensive and diversified cooperative
relations with grain and oil traders, processors and end customers, and has built a wide business network and
stable business channels. It has a high market share in the regional market and is rated as “Key Agricultural
Leading Enterprise of Guangdong Province” by the Department of Agriculture of Guangdong Province.




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          Section IV. Discussion and Analysis of the Operation

I. Introduction

During the reporting period, according to the annual key work and strategic planning objectives, the company
focused on the post-restructuring integration development and corporate strategy reshaping, and effectively
exerted the leading role of party building, and implemented the reform requirements of “Double Hundred Actions”
throughout the various key work. The main economic indicators in the first half of the year have been completed
well, the quality of main business development has been improved, the construction of strategic projects has been
steadily advanced, and the internal management and control level has been further improved.
1. Main business development
During the reporting period, the company
based on its own advantages and industrial development, used information technology, innovated and opened up
the grain and oil products supply channels and trading methods, created a new pattern for tea and food business
industry, built a multi-group and multi-channel food supply chain and service network, expanded the effective
supply of medium- and high-end grain, oil, and food, and strived to meet people's needs of "quality, diversity,
nutrition, health, green, and convenience", and promoted the transformation of grain and oil products from "eat
full" to "eat well".
As the “grain security” project and “rice bag” in Shenzhen, the company completed the government grain and oil
reserve service with quality and quantity guaranteed during the reporting period, the monthly average grain
reserve was 1.065 million tons, and the monthly average oil reserve was 12,100 tons, which guaranteed the
sufficient grain and oil supply and stable price in Shenzhen through the balanced rotation of grain and oil.
During the reporting period, the company integrated and reconstructed the deep processing of tea and natural
plants, and allocated the staff. Through integration, some businesses initially achieved stop loss or turnaround
goals.
2. Key projects
During the reporting period, the construction and operation of the company's Dongguan grain logistics node
progressed smoothly. The construction of grain logistics and terminal supporting projects, CDE warehouse project,
food deep processing projects and the first phase of the wharf have been steadily advanced according to the plan
and progress. The international foods wharf loaded and unloaded 128 vessels with a turnover of 180,000 tons. The
subordinate Dongguan logistics company promoted the establishment of safety production standardization and
achieved results, and was awarded the second-level enterprise of safety production standardization.
During the reporting period, the company's northeast grain source base project achieved “breaking ice”. In order
to speed up the implementation of the “North Grain to the South, South Grain for Storage in North” strategy, the
company set up the infrastructure office of the Northeast Grain Source Project to accelerate the construction of the
grain source base project. In June, the main project of the first phase of the Northeast Grain Source Base Project
of 150,000 tons has been started.
                                                         16
                                                                 深圳市深粮控股股份有限公司 2019 年半年度报告全文


During the reporting period, the company focused on promoting grain and oil platform transactions. At the 2nd
China Grain Trade Conference, “www.zglsjy.com.cn” further expanded the market influence and expanded new
customers to bid and list trading on the basis of serving internal customers. As of June, the “www.zglsjy.com.cn”
had a trading volume of 2.2 million tons.
3. Continuous innovation and development
During the reporting period, the company improved the efficiency of its operational management by increasing
the application of informatization innovation results to ensure the sustainable and healthy development of
enterprise. At present, the innovative R&D system with Shenliang research institute as the core and with the
far-reaching data, the product research and development center of flour company, the doximi quality inspection
R&D department, the technology center of reserve branch, the tea product and technology research and
development center as the key supports has been focusing on the innovation and research and development of
informatization projects, guided by the operational management needs and the development of the industry's most
cutting-edge technology, planed and completed 14 informatization projects such as company management and
control and innovation management platform. Up to now, the company has 69 patents and 23 software copyrights.
4. Other key tasks
(1) During the reporting period, the company completed the organizational restructuring, completed the changes
of company name, business scope, registered capital and securities short name, and completed the reelection of
the board of directors, the board of supervisors and senior management personnel. In accordance with the new
regulatory requirements and relevant regulations and procedures, the company completed the combination and
revision of the internal systems to promote the improvement of corporate governance, and further enhanced the
management effectiveness of the company through various effective measures.
(2) During the reporting period, the company implemented the relevant requirements of the “Double Hundred
Actions” state-owned enterprise reform, further expanded the compensation system and incentive and restraint
mechanism, and completed the overall market-based selection and employment of the management teams of some
subordinate units, and promoted the rotation exchange of key position talents, and further optimized the
company's talent echelon construction.
(3) During the reporting period, the company further strengthened fund management and control, and in
accordance with the centralized management mode of “internal bank” funds, promoted the online reporting
platform, and effectively supervised the expense reimbursement, capital expenditure and operating expenses of the
company headquarters and subordinate units. At the same time, the company further improved the CBS fund
management information system function, and fully opened the bank-corporate direct linkage of 9 banks to realize
the system supervision of banks and accounts. During the reporting period, the company promoted the subordinate
units to optimize the structure of the debts and achieved remarkable results.
(4) During the reporting period, the company built a new pattern of safe production, further strengthened the
concept of safe development, strictly implemented the responsibility system for production safety, consolidated
the foundation of safety management, investigated hidden dangers and immediately rectified them, and became
the first enterprise in the municipal state-owned assets system to complete the “double” prevention mechanisms
and safety standardization construction. The company closely followed the theme of “preventing risks, eliminating

                                                         17
                                                                                深圳市深粮控股股份有限公司 2019 年半年度报告全文


hidden dangers, and restraining accidents”, and has comprehensively launched the “Safe Production Month”
activities.
In the first half of 2019, the company achieved a total operating income of RMB 4,782,167,700, an increase of
7.84% over the same period of the previous year (after restructuring); operating profit of RMB 235,345,700, an
increase of 7.38% over the same period of the previous year (after restructuring); net profit attributable to
shareholders of listed companies was RMB 203,168,900, an increase of 0.19% over the same period of the
previous year (after restructuring).




II. Main business analysis

See the “I-Introduction” in “Discussion and Analysis of the Operation”

Y-o-y changes of main financial data
                                                                                                                                   In RMB
                                                                     Y-o-y
                                           Same period of last
                       Current period                             increase/de                      Reasons for changes
                                                   year
                                                                    crease

Operation
                        4,782,167,732.69      4,434,688,646.82           7.84%
revenue

Operation cost          4,262,101,770.62      3,962,753,163.26           7.55%

Sales expenses            112,553,742.74        120,452,104.30         -6.56%

Management
                          101,397,947.99         96,324,028.90           5.27%
expenses

                                                                                 Parts of the infrastructure of the node project from
Financial                                                                        Shenliang Dongguan Logistic has been put into
                            8,519,731.85          -2,173,306.27      492.02%
expenses                                                                         operation, expensed interest increased in the year; the
                                                                                 exchange losses goes up on a y-o-y basis in the year

Income tax                                                                       Income tax expenses arising from settlement and
                           15,485,294.03          11,869,852.06       30.46%
expense                                                                          payment in the period increased from a year earlier.

                                                                                 Strengthen R&D in the year and more investment
R&D investment              4,211,474.91           2,977,062.54       41.46%
                                                                                 occurred.

Net cash flow
                                                                                 The cash received from labor service providing in first
arising from
                         -389,429,629.75         52,861,245.30      -836.70% half of the year declined, and the cash paid for good
operation
                                                                                 purchasing increased, account payable declined.
activities

                                                                                 First, the first half reserve grain and oil government
Net cash flow
                                                                                 service income advance funds of this year has not
arising from
                         -140,751,694.07       -307,367,061.47        54.21% received; Second, the increases of the grain and oil stock
investment
                                                                                 caused the enlargement of operating activity cash
activities
                                                                                 outflow.

                                                                    18
                                                                                深圳市深粮控股股份有限公司 2019 年半年度报告全文


Net cash flow
                                                                                    More loans from the bank, the net cash flow from
arising from
                            88,425,677.74        66,419,850.49           33.13% financing activities changes due to the dividend
financing
                                                                                    distribution
activities

Net increase of
                                                                                    Net cash flow from operation activities has changes on a
cash and cash             -441,723,854.29      -184,996,984.35         -138.77%
                                                                                    y-o-y basis
equivalent

Major changes on profit composition or profit resources in reporting period
□ Applicable √ Not applicable
No major changes on profit composition or profit resources occurred in reporting period
Composition of main business
                                                                                                                                        In RMB
                                                                                       Increase or           Increase or        Increase or
                                                                                       decrease of           decrease of     decrease of gross
                          Operating
                                          Operating cost       Gross profit ratio operating revenue         operating cost    profit ratio over
                           revenue
                                                                                    over same period over same period         same period of
                                                                                       of last year          of last year         last year

According to industries
Trading                4,044,141,582.04 3,880,146,561.03                    4.06%                  9.21%             8.86%               0.31%

According to products

Grain and oil
trading and            4,192,557,805.77 4,020,740,766.97                    4.10%                  7.65%             7.37%               0.25%
processing

According to region

Domestic sales         4,770,863,075.53 4,252,262,350.62                 10.87%                    7.76%             7.45%               0.26%


III. Analysis of the non-main business

√ Applicable     □ Not applicable
                                                                                                                                        In RMB

                                              Ratio in total                                                                  Whether be
                             Amount                                                        Note
                                                  profit                                                                      sustainable

Investment income             7,167,936.04                 3.09%                                                             Unsustainable

Gains/losses of fair
                                  28,381.21                0.01%                                                             Unsustainable
value variation

                                                                   Reasons    including:     If     the    reserve   for
                                                                   depreciation of inventory has been calculated
Asset impairment            -69,231,423.42            -29.88% for       the sold inventory,           the reserve    for     Unsustainable
                                                                   depreciation of inventory has been carried
                                                                   forward to reduce the current main business

                                                                       19
                                                                            深圳市深粮控股股份有限公司 2019 年半年度报告全文


                                                              cost.

Non-operating
                              362,252.46              0.16%                                                           Unsustainable
income

Non-operating
                            3,982,019.95              1.72%                                                           Unsustainable
expense


IV. Assets and liability

1. Major changes of assets composition

                                                                                                                                   In RMB

                                                                                       Ratio
                        End of current period         End of period of last year                          Notes of major changes
                                                                                      changes

                                           Ratio in                        Ratio in
                          Amount            total        Amount             total
                                            assets                          assets

                                                                                                 The     cash   out-flow    for    operation
Monetary fund            189,914,485.39      2.95%      631,638,339.68       9.76%      -6.81% activities purpose increased on a y-o-y
                                                                                                 basis

                                                                                                 The first half reserve grain and oil
Account
                         617,831,167.71      9.60%      473,646,886.64       7.32%      2.28% government service income advance
receivable
                                                                                                 funds of this year has not received.

                                                                                                 Increase grain and oil stock according
Inventory              3,053,593,314.19 47.47%        2,811,802,600.19 43.47%           4.00%
                                                                                                 to demand

Investment
                         278,173,249.83      4.32%      282,622,184.92       4.37%      -0.05%
property

Long-term equity
                          73,362,651.19      1.14%       70,999,666.81       1.10%      0.04%
investment

Fix assets               967,835,524.07 15.05%          993,136,743.51 15.35%           -0.30%

                                                                                                 Investment     for   the   node     project
Construction in
                         403,629,287.82      6.27%      186,586,135.06       2.88%      3.39% engineering for Shenliang Dongguan
process
                                                                                                 Logistic increased

Short-term loans          30,590,000.00      0.48%       91,600,000.00       1.42%      -0.94%

                                                                                                 Long-term loans from node project
Long-term loans          777,384,100.20 12.09%          516,687,791.66       7.99%      4.10% engineering for Shenliang Dongguan
                                                                                                 Logistic increased


2. Assets and liability measured by fair value

√ Applicable   □ Not applicable

                                                                      20
                                                                                   深圳市深粮控股股份有限公司 2019 年半年度报告全文


                                                                                                                                       In RMB

                                                         Changes of                             Devaluatio Amount
                                                                             Accumulative                             Amount
                                                          fair value                              n of        of
                                      Amount at the                          changes of fair                          of sale in Amount in the
                Items                                    gains/losses                           withdrawi purchase
                                    beginning period                         value reckoned                             the     end of period
                                                           in this                              ng in the   in the
                                                                               into equity                             period
                                                           period                                period     period

Financial assets

1. Trading financial assets
(excluding derivative financial         1,124,927.96       28,381.21                                                            1,153,309.17
assets)

Aforementioned total                    1,124,927.96       28,381.21                     0.00        0.00      0.00       0.00 1,153,309.17

Financial liabilities                             0.00                                                         0.00                      0.00
Whether there have major changes on measurement attributes for main assets of the Company in report period or not
□ Yes √No


3. The assets rights restricted till end of the period

                Original book       Book value at
   Item                                                                                  Reasons for restriction
                    value            period-end

Intangible                                            According to the long-term loan mortgage contract signed by the subsidiary
                   92,328,788.83      83,859,264.48
   assets                                             Dongguan Logistics and Agricultural Development Bank, Dongguan Logistics
                                                      mortgaged the land DFGY (2014) DT No. 6 and the future built-up grain storage
   Fixed
                 400,834,811.27     371,805,770.40 and wharf supporting facilities and other buildings and structures on the ground
   assets
                                                      of No. 32, Jianshe Road, Masan Village, Machong Town, Dongguan City to the
                                                      Agricultural Development Bank as collaterals for the loan. In addition, according
Constructi                                            to the loan contract “44191000-2018 (Dongben) Zi No.0100” signed by
   on in           76,182,755.87      76,182,755.87 Dongguan Logistics and Agricultural Development Bank, Dongguan Logistics
  process                                             mortgaged the land “Yue (2016) DGSBDCQ No. 0028527” to the Agricultural
                                                      Development Bank as a collateral for the loan.

                                                      According to the loan contract Yue DG 2017 NGDZ No. 006 signed by
                                                      Dongguan Food Industry Park and Bank of Communications Co., Ltd. Dongguan
Intangible
                   45,580,368.97      35,798,712.71 Branch, Dongguan Food Industry Park mortgaged two pieces of land “DFGY
   assets
                                                      (2009) DT No. 190” and “DFGY (2012) DT No. 152” to Bank of
                                                      Communications Co., Ltd. Dongguan Branch as collateral for the loan.

   Total        614,926,724.94      567,646,503.46



V. Investment Analysis

1. Overall situation

√ Applicable   □ Not applicable
   Investment in reporting period (Yuan)      Investment in the same period of last year                              Range
                                                                        21
                                                           深圳市深粮控股股份有限公司 2019 年半年度报告全文


                                                 (Yuan)

                             244,767,336.46                       0.00                            100.00%


2. The major equity investment obtained in the reporting period

□ Applicable   √ Not applicable




                                                   22
                                                                                                                                      深圳市深粮控股股份有限公司 2019 年半年度报告全文


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

√ Applicable   □ Not applicable
                                                                                                                                                                                        In RMB

                                                                                                                                                                 Reasons for                    Disc
                                                                                                                                                                     failure to                 losur
                                                                                                                                                   Income
                                         Whether it is Industry with                    Accumulated                                                                  achieve                     e
                                                                                                                                                 accumulated                      Disclosure
                            Investmen the investment        the        Amount input actual input as of      Capital                  Estimated                       planned                    inde
           Item                                                                                                        Progress                  at end of the                     date (if
                              t ways       for fixed    investment     in the period      the end of       resources                 revenue                         progress                   x (if
                                                                                                                                                   reporting                      applicable)
                                         assets (Y/N)    involved                      reporting period                                                                and                      appli
                                                                                                                                                    period
                                                                                                                                                                     expected                   cabl
                                                                                                                                                                     benefits                    e)

Grain storage and wharf
complementary                                                                                               Owned
                                                        Storage and
engineering of Dongguan Self-build            Y                        15,220,775.52    316,826,549.21 Funds and          79.21%                                 -
                                                          wharf
Shenliang Logistics Co.,                                                                                  Bank Loans
Ltd.
                                                                                                                                   43,363,000.00 62,584,926.78
Grain storage and wharf
complementary                                                                                               Owned
                                                        Storage and
engineering (Phase II) of   Self-build        Y                                         179,679,302.57 Funds and         100.00%                                 -
                                                          wharf
Dongguan Shenliang                                                                                        Bank Loans
Logistics Co., Ltd.

Food logistics and wharf
matching project of                                     Warehouse                                           Owned
                            Self-build        Y                        14,141,959.70     25,213,182.62                     5.12%                                 -
Dongguan Shenliang                                        logistic                                          Funds
Logistics Co., Ltd.

Warehouse logistic          Self-build        Y         Warehouse 146,326,592.24        417,764,182.46      Owned         43.14% 37,108,900.00                   -

                                                                                                23
                                                                                                                                                    深圳市深粮控股股份有限公司 2019 年半年度报告全文
distribution center of                                          logistic                                         Funds and
Dongguan International                                                                                           Bank Loans
Food Industrial Park
Development Co., Ltd.

Food processing project of
                                                                 Flour                                            Owned
Dongguan Shenliang Oil        Self-build        Y                             36,906,337.84      76,182,755.87                       26.09%                                 -
                                                            processing                                             Funds
& Food Trade Co., Ltd.

                                                                                                                  Owned
Land use right                Self-build        N          Construction 24,179,185.60           227,922,642.82                                                              -
                                                                                                                   Funds

Total                             --            --                 --        236,774,850.90 1,243,588,615.55         --              --       80,471,900.00 62,584,926.78         --            --           --


4. Financial assets investment

(1) Securities investment
√ Applicable    □ Not applicable
                                                                                                                                                                                                 In RMB

                                                                                              Changes in
                                                                Accountin Book value               Cumulative                                          Profit and
                                                                                     fair value of                         Current
                                                       Initial     g       at the                   fair value                            Current      loss in the   Book value Accounting           Capital
 Variety of       Code of       Short form of
                                                     investme                         the current                         purchase                                   at the end of
 securities      securities       securities
                                                      nt cost measureme beginning of               changes in                          sales amount Reporting         the period   subject           Source
                                                                                       profit and                          amount
                                                               nt model the period                    equity                                             Period
                                                                                          loss

                                                                                                                                                                                                     Shares
Domestic                                                        Measured                                                                                                           Trading      repaid from
and overseas      000017             CBC-A               0.00     by fair    1,124,927.96      28,381.21          0.00          0.00           0.00      28,381.21 1,153,309.17   financial           debt
stock                                                             value                                                                                                                assets   reorganizatio
                                                                                                                                                                                                       n

Total                                                    0.00           --   1,124,927.96      28,381.21          0.00          0.00           0.00      28,381.21 1,153,309.17          --            --

                                                                                                           24
                                                                                                                      深圳市深粮控股股份有限公司 2019 年半年度报告全文

Disclosure date of securities investment
                                              Not applicable
approval of the Board

Disclosure date of securities investment
approval of the Shareholder Meeting (if       Not applicable
applicable)


(2) Derivative investment

□ Applicable   √ Not applicable
The Company has no derivatives investment in the Period


VI. Sales of major assets and equity

1. Sales of major assets

□ Applicable   √ Not applicable
The Company had no sales of major assets in the reporting period.


2. Sales of major equity

□ Applicable   √ Not applicable


VII. Analysis of main Holding Company and stock-jointly companies

√ Applicable   □ Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over 10%
                                                                                                                                                             In RMB

        Company name                 Type       Main business       Register capital   Total assets   Net Assets   Operating revenue Operating profit   Net profit

                                                                                          25
                                                                                                                           深圳市深粮控股股份有限公司 2019 年半年度报告全文

                                               Grain & oil
                                                 trading
Shenzhen Cereals Group Co.,
                               Subsidiary processing、Grain      1,530,000,000.00   5,701,507,859.86   3,727,498,207.39   4,614,789,800.67 245,205,307.45    228,906,380.61
Ltd
                                             and oil reserve
                                                 service

                                               Grain & oil
Shenzhen Flour Co., Ltd        Subsidiary                          30,000,000.00     958,911,346.84     270,170,166.90    1,310,067,982.82   34,184,781.83    34,160,150.52
                                            trading processing

Shenzhen Hualian Grain & Oil                   Grain & oil
                               Subsidiary                          31,180,000.00     961,870,154.63     225,250,597.47    1,706,053,677.49   24,141,077.31    24,141,077.31
Trade Co., ltd.                                  trading




                                                                                        26
                                                                       深圳市深粮控股股份有限公司 2019 年半年度报告全文


Particular about subsidiaries obtained or disposed in report period
□ Applicable   √ Not applicable
Explanation on main holding/stock-jointly enterprise

Shenzhen Cereals Group Co., Ltd.- Business scope: general business items: grain and oil purchase and sales, grain
and oil storage and supply of military grain; grain and oil and products management and processing (operated by
branches); operation and processing of feed (operated by outsourcing); investment in grain and oil, feed logistics
projects; establishing grain and oil and feed trading market (including e-commerce market) (market license is also
available); storage (operated by branches); development, operation and management of self-owned property;
providing management services for hotels; investing and setting up industries (specific projects are separately
declared); domestic trade; engaging in import and export business; E-commerce and information construction and
grain circulation service. Licensed business items: if the following items involved the approval and examination
which should be obtained, the relevant approval documents shall be used for operation: information service
(internet information service only); general freight, professional transport (cold storage and freshness
preservation ). Registered capital amounted as RMB 1,530,000,000. Ended as the reporting period, total assets
amounted as RMB 5,701,507,859.86; net assets amounted as RMB 3,727,498,207.39; the equity attributable to
shareholder of parent company was RMB 3,541,962,524.81; during the reporting period, business revenue
achieved RMB 4,614,789,800.67, net profit was RMB 228,906,380.61 and the net profit attributable to parent
company was RMB 215,226,820.22.
Shenzhen Flour Co., Ltd., business scope: hardware and electrical equipment, chemical products (excluding
hazardous chemicals and restricted items), auto parts, purchase and sales of construction materials; self-operated
import and export business (carry out according to the provisions of the registration certificate SMGDZZ No. 76);
domestic trade (excluding franchise, exclusive control, monopoly commodities); wheat wholesale and retail; flour
processing and production. Register capital was 30,000,000 Yuan. Ended as this period, total assets amounted as
958,911,346.84 Yuan, and net assets amounting to 270,170,166.90 Yuan, shareholders’ equity attributable to
parent Company is 270,170,166.90 Yuan; in the reporting period, achieved operation income, net profit and net
profit attributable to parent Company as 1,310,067,982.82 Yuan, 34,160,150.52Yuan and 34,160,150.52 Yuan
respectively.
Shenzhen Hualian Grain and Oil Trade Co., Ltd., business scope: general operational projects include domestic
trade (except for projects that laws, administrative regulations, and decisions of the State Council require approval
before registration); engaging in import and export business (except for projects prohibited by laws,
administrative regulations, and decision of the State Council, restricted projects can be operated only after
obtaining permission); online feed sales; information consultation, self-owned housing leasing (excluding talent
agency services and other restricted items); international freight forwarding, domestic freight forwarding (can
only be operated after being approved by the transport department if laws, administrative regulations, State
Council decision require the approval of transport department); license business projects include purchase and sale
of grain and oil, online sales of grain and oil; information service business (internet information service business
only). Register capital was RMB 31,180,000. Ended as this period, total assets amounted as RMB 961,870,154.63,
and net assets amounting to RMB 225,250,597.47, shareholders’ equity attributable to parent Company is RMB

                                                                  27
                                                                         深圳市深粮控股股份有限公司 2019 年半年度报告全文


225,250,597.47; in the reporting period, achieved operation income, net profit and net profit attributable to parent
Company as RMB 1,706,053,677.49, RMB 24,141,077.31 and RMB 24,141,077.31 respectively.


VIII. Structured vehicle controlled by the Company

□ Applicable   √ Not applicable


IX. Prediction of business performance from January – September 2019

Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the
warning of its material change compared with the corresponding period of the last year and explanation on reason
□ Applicable   √ Not applicable


X. Risks and countermeasures

1. Affected by a series of unfavorable factors such as Sino-US trade friction and African swine fever, the overall
environment of the grain, feed, food and other domestic industries has been greatly affected, and the company's
operations are facing greater pressure. In contrast to the annual work objectives and requirements, there is still a
gap between the company's work and the annual mission plan requirements. In the second half of the year, the
company will focus on deepening enterprise reform, firming the strategic projects construction, improving
operational efficiency, concentrating on innovation-driven leading, and expanding business channels to ensure the
completion of annual work goals.
2. Faced with the changing consumption trends in recent years and the increasing scale of the company's business
and the more complex business structure, the company's reserves in professional talents, key talents, and
comprehensive talents are relatively insufficient, so the company showed slight weakness in innovation ability and
contingency ability when cultivating new business and facing new field. The company will focus on strategic and
business development needs, innovate talent training, accelerate talent introduction, strengthen talent echelon
construction and innovative talent reserves, open up development channels for employees, create career
development opportunities, and provide kinetic energy for the company's sustainable development.




                                                                28
                                                                     深圳市深粮控股股份有限公司 2019 年半年度报告全文




                                       Section V. Important Events

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

1. AGM in the period


                                         Investor
     Sessions              Type         participati   Opening date    Disclosure date             Disclosure index
                                         on (%)

                                                                                        Resolution Notice of The First
The First Interim                                                                       Interim    Shareholders      General
                          Interim
Shareholders                                                                            Meeting of 2019 of Shenzhen
                      Shareholders         63.83%     2019-01-18       2019-01-19
General Meeting                                                                         Shenbao     Industrial    Co.,   Ltd.
                    General Meeting
of 2019                                                                                 (Notice No.: 2019-10) released on
                                                                                        Juchao website dated 19 Jan. 2019

                                                                                        Resolution Notice of The Second
The Second
                                                                                        Interim    Shareholders      General
Interim                   Interim
                                                                                        Meeting of 2019 of Shenzhen
Shareholders          Shareholders         63.83%     2019-01-30       2019-01-31
                                                                                        Shenbao     Industrial    Co.,   Ltd.
General Meeting     General Meeting
                                                                                        (Notice No.: 2019-14) released on
of 2019
                                                                                        Juchao website dated 31 Jan. 2019

                                                                                        Resolution Notice of The Third
The Thrid Interim                                                                       Interim    Shareholders      General
                          Interim
Shareholders                                                                            Meeting of 2019 of Shenzhen
                      Shareholders         63.82%     2019-02-21       2019-02-22
General Meeting                                                                         Shenbao     Industrial    Co.,   Ltd.
                    General Meeting
of 2019                                                                                 (Notice No.: 2019-21) released on
                                                                                        Juchao website dated 22 Feb. 2019

                                                                                        Resolution Notice of AGM 2018 of
                                                                                        Shenzhen Shenbao Industrial Co.,
2018 Annual           Annual general
                                           63.80%     2019-05-20       2019-05-21       Ltd. (Notice No.: 2019-45) released
general meeting          meeting
                                                                                        on Juchao website dated 21 May
                                                                                        2019


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

□ Applicable   √ Not applicable


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

□ Applicable   √ Not applicable
                                                               29
                                                                           深圳市深粮控股股份有限公司 2019 年半年度报告全文


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


III. Commitments completed in Period and those without completed till end of the Period
from actual controller, shareholders, related parties, purchaser and companies etc.

□ Applicable    √ Not applicable
There are no commitments completed in Period and those without completed till end of the Period from actual controller,
shareholders, related parties, purchaser and companies etc.


IV. Appointment and non-reappointment (dismissal) of CPA


Whether the financial report has been audited or not

□Yes √No

The financial report has not been audited


V. Explanation from Board of Directors and Supervisory Committee for “Qualified Opinion”
that issued by CPA

□ Applicable    √ Not applicable


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

□ Applicable    √ Not applicable


VII. Bankruptcy reorganization

□ Applicable    √ Not applicable
No bankruptcy reorganization for the Company in end of this period


VIII. Lawsuits


Significant lawsuits and arbitration

□ Applicable    √ Not applicable
No significant lawsuits and arbitration occurred in the reporting period

Other lawsuits

√ Applicable    □ Not applicable

                          Amount       Resulted an accrual                          Trial result and   Execution of Disclo Disclo
Lawsuits (arbitration)                                               Progress
                          involved       liability (Y/N)                               influence        judgment     sure    sure

                                                                  30
                                                                               深圳市深粮控股股份有限公司 2019 年半年度报告全文


                             (in 10                                                                                             date   index
                            thousand
                             Yuan)

                                                                 Relevant
During the reporting
                                       No, the event is related litigation-related
period, the litigation
                                       to routine operation of matters are executed
matters           mainly                                                                    Judging       from
                                       the    Company       with by legal dept. Of the
including:      Disputes                                                                    the litigation, it
                                       minor amount. Judging Company and external                                               Not    Not
over sales contract,                                                                        does not have a
                             5,291.98 from the progress of the laws       firms.      The                        In processing applic applic
principal-agent                                                                             significant
                                       case, relevant litigation matters will litigation                                        able   able
contract        disputes,                                                                   impact on the
                                       do    not   constitute   a involved are carry out
infringement disputes,                                                                      Company
                                       significant impact on the the         promotion
loan contract disputes
                                       Company                   according to relevant
and so on
                                                                 process currently.


IX. Penalty and rectification

□ Applicable    √ Not applicable
No penalty and rectification for the Company in reporting period.


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

□ Applicable    √ Not applicable


XI. Implementation of the Company’s stock incentive plan, employee stock ownership plan or
other employee incentives

□ Applicable    √ Not applicable
During the reporting period, the Company has no stock incentive plan, employee stock ownership plan or other employee incentives
that have not been implemented.


XII. Major related transaction


1. Related transaction with routine operation concerned


□ Applicable    √ Not applicable

No related transaction occurred in the period with routine operation concerned



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


□ Applicable    √ Not applicable

No related transaction concerning the asses or equity acquisition and sold at period-end
                                                                   31
                                                                           深圳市深粮控股股份有限公司 2019 年半年度报告全文


3. Related transaction of foreign investment


□ Applicable   √ Not applicable

No related transaction of foreign investment occurred at period-end



4. Related credits and liabilities


□ Applicable   √ Not applicable

No related credits and liabilities occurred in period



5. Other major related transaction


□ Applicable   √ Not applicable

No other major related transaction in the Period


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

□ Applicable   √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.


XIV. Significant contract and implementations

1. Trusteeship, contract and leasing

(1) Trusteeship

□ Applicable   √ Not applicable
No trusteeship for the Company in reporting period


(2) Contract

□ Applicable   √ Not applicable
No contract for the Company in reporting period


(3) Leasing

□ Applicable   √ Not applicable

No leasing in the Period




                                                                 32
                                                                               深圳市深粮控股股份有限公司 2019 年半年度报告全文


2. Major Guarantee

√ Applicable   □ Not applicable


(1) Guarantee

                                                                                                                     In 10 thousand Yuan
                                     External Guarantee (not including guarantees to subsidiaries)
                        Related
                                                                                                                    Complete Guarante
    Name of the       Announce                  Actual date of happening     Actual
                                    Guarant                                                               Guarant implemen      e for
       Company           ment                       (Date of signing        guarantee   Guarantee type
                                    ee limit                                                              ee term tation or    related
       guaranteed     disclosure                      agreement)              limit
                                                                                                                      not       party
                          date
                                               Guarantee between the Company and subsidiary
                        Related
                                                                                                                    Complete Guarante
    Name of the       Announce                  Actual date of happening     Actual
                                    Guarant                                                               Guarant implemen      e for
       Company           ment                       (Date of signing        guarantee   Guarantee type
                                    ee limit                                                              ee term tation or    related
       guaranteed     disclosure                      agreement)              limit
                                                                                                                      not       party
                          date
Dongguan
                                                                                        Joint liability
Shenliang                            27,300           2015-07-13              21,281                      8 years      N         Y
                                                                                          guaranty
Logistics Co., Ltd.

Dongguan
                                                                                        Joint liability
Shenliang                            10,200           2016-12-21               5,090                      5 years      N         Y
                                                                                          guaranty
Logistics Co., Ltd.

Dongguan
International Food
                                                                                        Joint liability     14
Industrial Park                      39,168           2018-07-27              24,663                                   N         Y
                                                                                          guaranty         years
Development Co.,
Ltd.

Shenzhen Shenbao
Huacheng Science                                                                        Joint liability
                                      3,000           2018-07-26               3,000                      1 year       N         Y
and Technology                                                                            guaranty
Co., Ltd.

Dongguan
                                                                                        Joint liability     12
Shenliang                            21,930           2019-01-25                 250                                   N         Y
                                                                                          guaranty         years
Logistics Co., Ltd.
Dongguan
Shenliang Oil &                                                                         Joint liability
                                     11,883           2019-04-19               1,852                      8 years      N         Y
Food Trade Co.,                                                                           guaranty
Ltd.
Total amount of approving                                          33,813 Total amount of actual                                10,680

                                                                       33
                                                                               深圳市深粮控股股份有限公司 2019 年半年度报告全文


guarantee for subsidiaries in                                              occurred guarantee for
report period (B1)                                                         subsidiaries in report period
                                                                           (B2)
                                                                           Total balance of actual
Total amount of approved
                                                                           guarantee for subsidiaries at
guarantee for subsidiaries at the                               113,481                                                         56,136
                                                                           the end of reporting period
end of reporting period (B3)
                                                                           (B4)

                                                   Guarantee between the subsidiaries
                        Related
                                                                                                                   Complete Guarante
      Name of the     Announce                 Actual date of happening     Actual
                                    Guarant                                                                Guarant implemen     e for
       Company           ment                      (Date of signing        guarantee    Guarantee type
                                    ee limit                                                               ee term tation or   related
      guaranteed      disclosure                     agreement)              limit
                                                                                                                      not      party
                         date

Total amount of guarantee of the Company (total of three above mentioned guarantee)
Total amount of approving                                                  Total amount of actual
guarantee in report period                                        33,813 occurred guarantee in report                           10,680
(A1+B1+C1)                                                                 period (A2+B2+C3)
Total amount of approved                                                   Total balance of actual
guarantee at the end of report                                  113,481 guarantee at the end of report                          56,136
period (A3+B3+C2)                                                          period (A4+B4+C4)
The proportion of the total amount of actually guarantee in the net
                                                                                                                               13.18%
assets of the Company (that is A4+ B4+C4)

Including:
Amount of guarantee for shareholders, actual controller and its
                                                                                                                                         0
related parties (D)
The debts guarantee amount provided for the guaranteed parties
                                                                                                                                53,136
whose assets-liability ratio exceed 70% directly or indirectly (E)
Proportion of total amount of guarantee in net assets of the Company
                                                                                                                                         0
exceed 50% (F)
Total amount of the aforesaid three guarantees (D+E+F)                                                                          53,136

Explanation on compound guarantee
Nil


(2) Illegal external guarantee

□ Applicable   √ Not applicable

No illegal external guarantee in the period


3. Other material contracts

□ Applicable   √ Not applicable

No other material contracts in the period.
                                                                      34
                                                                         深圳市深粮控股股份有限公司 2019 年半年度报告全文


XV. Social responsibility

1. Major environment protection


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

No
The company and its subsidiaries do not belong to the key pollutant discharge units announced by the environmental protection
department.


2. Execution of social responsibility of targeted poverty alleviation

(1) Plan of targeted poverty alleviation

In 2019, Shenzhen Cereals Holdings continues to use the socialism with Chinese characteristics of Xi Jinping new
era of as a guide to carry out the targeted poverty alleviation work to help Guilin Village, Yidu Town, Longchuan
County, Heyuan City, in accordance with spirit of the document of “Implementation Opinions on the Three-Year
Plan for Poverty Alleviation in the New Period (Yuefa [2016] No. 13)” of the Guangdong Provincial Party
Committee and the Provincial Government, the overall goal and task of Guilin Village's targeted poverty
alleviation is to achieve the goal of making the relatively poor population be free from worry of food and clothing
and be guaranteed with compulsory education, basic medical care and housing security by the end of 2019, and
making the indicators of main areas of basic public services be equivalent to the provincial average, and getting
52 households and 144 people all out of poverty. In order to implement the poverty alleviation work, the residency
poverty alleviation work team of Shenzhen Cereals Holdings adopted the following effective assistance measures
under the correct leadership of the company's party committee: First, in the aspect of industrial assistance. By
holding training courses, participating in exhibitions to help the selling of tea, providing public welfare jobs,
handling small loans, encouraging migrant workers, guiding the cultivation of tea, increasing the planting area,
using the “reward for compensation” financial funds and Shenliang help fund investment dividends and other
various new forms and new methods to help poor households and village collectives to increase their income. The
second is to continue to increase the support of medical care and education so as to solve the worries of poor
households. Third, in terms of village infrastructure, the village service center project and the water purification
project will be put into use by the end of 2019.




(2) Summary of semi-annual targeted poverty alleviation

In the first half of 2019, Shenzhen Cereals Holdings invested RMB 1,000,900 in poverty alleviation funds (not
including consolation money and goods and materials), which is used to improve infrastructure construction,
increase the collective economic income of the village, improve the rural living environment, and support medical
care and education, etc.
Performance and effect: First, in the aspect of industrial assistance, carried out poverty alleviation work in the mode

                                                                35
                                                                     深圳市深粮控股股份有限公司 2019 年半年度报告全文


of “company + cooperative + farmer + base”, guided the large tea farmers to actively buy tea from more than 20
poor households with working ability, which solved the marketing problem of poor households’ tea to a certain
extent, Stimulate the production enthusiasm of poor households; utilized the “substituting and complementing the
financial funds with rewards” to guide the 20 poor households with labor capacity to invest in the Nanyuewang
Company and the Aodingfeng Tea Cooperative, it is estimated that by the end of 2019, the dividends of these two
investments will reach RMB 98,300, with an average income of RMB 4,914 per household; At the same time,
Shenzhen Cereals Holdings appropriated RMB 500,000 to help the Guilin Village Committee invest in the
Nanyuewang Company, which can bring about RMB 60,000 of dividends every year and effectively increase the
collective income. Second, it organized the tea-planting farmers to participate in the Shenzhen Spring Tea Expo
and a variety of other trade fairs, which not only strengthened exchange with peers but also enhanced the
popularity of "Guilin Tea". Third, in the improvement of village infrastructure and public services, Shenzhen
Cereals Holdings pre-invested RMB 790,000 to help Guilin Village build a village service center to effectively
improve the environment of the village committee office and villagers' activities, the company has already paid
RMB 390,000. The fourth is to invest RMB 77,600 in medical care and education to help the villagers living in
Guilin Village to handle new rural cooperative medical insurance, strengthen medical security, and reduce
villagers' burden in preventing and curing disease; applied for subsidy of RMB 33,500 from the Shenzhen Charity
Federation for the children of 5 poor households, which effectively reduced the economic burden in schooling of
poor households; invested RMB 10,800 to install LED display and toilet door partition, clean the campus
environment, and purchase cleaning tools for Guilin Primary School. In the first half of 2019, there were 52 poor
households with 144 people in Guilin Village, all of which have reached poverty alleviation conditions.




(3) Performance of targeted poverty alleviation


                                                                      Measurement
                                    Target                                                Numbers/ implementation
                                                                          unit

i. Overall                                                                ——                      ——

                                                                       10 thousand
  Including:1. fund                                                                                               100.09
                                                                          yuan

                                                                       10 thousand
             2. Material discount                                                                                   1.08
                                                                          yuan

             3.number of poverty-stricken populations eliminating
                                                                         Person                                      144
poverty with card for archives established

ii. Invested by specific project                                          ——                      ——

  1.Industrial development poverty                                        ——                      ——

Including:      1.1Type                                                   ——       Poverty Alleviation by Asset Income

             1.2 numbers of industrial development poverty               Number                                        1

             1.3Amount input                                           10 thousand                                    50

                                                                36
                                                                          深圳市深粮控股股份有限公司 2019 年半年度报告全文


                                                                               yuan

             1.4number of poverty-stricken population eliminating
                                                                              Person                                        7
poverty with card for archives established

  2.Transfer employment                                                        ——                    ——

                                                                            10 thousand
Including:     2.1 Amount input for vocation skills training                                                                0
                                                                               yuan

             2.2 Number of vocation skills training                         Person-time                                     0

             2.3 Number of poverty-stricken populations achieving
                                                                              Person                                        0
employment with card for archives established

  3.Relocation the poor                                                        ——                    ——

Including:     3.1 Number of employed persons from relocated
                                                                              Person                                        0
 households

  4.Education poverty                                                          ——                    ——

Including:     4.1 Amount input for subsidizing the impoverished            10 thousand
                                                                                                                            0
 students                                                                      yuan

             4.2Number of subsidized poor student s                           Person                                        0

             4.3Amount input for improving the education resources in       10 thousand
                                                                                                                          1.08
 poverty-stricken areas                                                        yuan

  5.Health poverty alleviation                                                 ——                    ——

Including:        5.1 Amount input for medical and health resources in      10 thousand
                                                                                                                          7.76
 poverty-stricken areas                                                        yuan

  6.Ecological protection and poverty alleviation                              ——                    ——

                                                                                             Environmental Cleaning and
Including:        6.1 Type                                                     ——
                                                                                                    Maintenance

                                                                            10 thousand
                 6.2Amount input                                                                                          1.51
                                                                               yuan

  7.Fallback protection                                                        ——                    ——

                                                                            10 thousand
Including:     7.1 Amount input for Three Stay Behind persons                                                               0
                                                                               yuan

             7.2Number of Three Stay Behind persons help                      Person                                        0

                                                                            10 thousand
             7.3Amount input for poor disabled persons                                                                      0
                                                                               yuan

             7.4Number of poor disabled persons help                          Person                                        0

  8.Social poverty alleviation                                                 ——                    ——

Including:     8.1Amount of the poverty alleviation cooperation between     10 thousand
                                                                                                                            0
   the Eastern and Western regions                                             yuan

             8.2Amount for targeted poverty alleviation                     10 thousand                                     0

                                                                37
                                                                         深圳市深粮控股股份有限公司 2019 年半年度报告全文


                                                                              yuan

                                                                           10 thousand
             8.3Amount for the poverty alleviation public welfare fund                                                          0
                                                                              yuan

  9.Other                                                                     ——                       ——

Including:      9.1. number of items                                         Number                                             3

                                                                           10 thousand
             9.2. Amount input                                                                                           39.74
                                                                              yuan

             9.3. number of poverty-stricken populations eliminating
                                                                             Person                                        139
poverty with card for archives established

iii. Awards (content and grade)                                               ——                       ——

                                                                                         Outstanding contributions to poverty
                                                                                         alleviation for 2016-2018 in Heyuan -
                                                                                         Li Suiyang


(4) Follow-up of targeted poverty alleviation

2019 is a key year for winning the three-year tack on targeted poverty alleviation, SZCG will continue to take Xi
Jinping’s socialism with Chinese characteristics as a guide and take related poverty alleviation policies of
governments at all levels as a gist, concentrate efforts, strengthen measures, promote poverty alleviation work in
an orderly manner, promote the industry development of Guilin Village, consolidate the results of poverty
alleviation, bring all poverty-stricken households out of poverty. The plan is as follows: First, continue to do a
good job in precision assistance, encourage 20 poor households who have the ability to work to go out as migrant
workers, continue to implement the dividend income of investing in Nanyuewang and Aodingfeng for the poor
households and village collectives, and continue to explore new projects to increase the income of poor
households from various aspects, fully implement the “two no-worries, three guarantees” policy, achieve the
"eight have" standard, and effectively implement the measures to support medical care and education. The second
is to continue to follow the village infrastructure, it plans to renovate three safe drinking water facilities for
villagers and strive to complete the construction of the village service center this year. Third, further promote the
Guilin Tea to go out and increase the brand awareness of the product through the participation of tea fairs so as to
increase the industrial income and increase the production enthusiasm. The fourth is to combine the policies of the
poverty alleviation department, develop the tea industry in Guilin according to local conditions, continue to
explore the model of “planting tea + tourism”, and form a long-term and comprehensive poverty alleviation
mechanism. Fifth, comprehensively do a good job in the smooth docking of “precise poverty alleviation” and
“rural revitalization”, and further consolidate the effectiveness of poverty alleviation.




XVI. Other major events

□ Applicable   √ Not applicable

                                                                38
                                                                          深圳市深粮控股股份有限公司 2019 年半年度报告全文


There are no other important events to be explained in the company's reporting period.


XVII. Significant event of subsidiary of the Company

□ Applicable   √ Not applicable




                                                                 39
                                                                                      深圳市深粮控股股份有限公司 2019 年半年度报告全文




    Section VI. Changes in Shares and Particulars about Shareholders

I. Changes in Shares

1. Changes in shares

                                                                                                                                           In Share
                                 Before the Change                Increase/Decrease in the Change (+, -)                    After the Change

                                                                     Bon Capitaliz
                                                            New
                                                 Proporti            us         ation of
                                 A mount                    shares                            Others       Subtotal       A mount       Proportion
                                                   on                shar       public
                                                            issued
                                                                      es        reserve

I. Restricted shares            684,821,396 59.42%               0         0             0      44,180        44,180      684,865,576      59.42%

1. State-owned shares                       0      0.00%         0         0             0             0              0             0       0.00%
2. State-owned corporate
                                669,184,735 58.06%               0         0             0   15,384,832 15,384,832        684,569,567      59.39%
shares
3. Other domestic shares         15,583,326        1.35%         0         0             0 -15,358,431 -15,358,431           224,895        0.02%
Including: Domestic legal
                                 15,384,832        1.33%         0         0             0 -15,384,832 -15,384,832                  0       0.00%
person’s shares
           Domestic nature
                                       198,494     0.02%         0         0             0      26,401        26,401         224,895        0.02%
person’s shares

4. Foreign shares                       53,335     0.01%         0         0             0      17,779        17,779          71,114        0.01%
Including: Foreign
                                            0      0.00%         0         0             0             0              0             0       0.00%
corporate shares
           overseas nature
                                        53,335     0.01%         0         0             0      17,779        17,779          71,114        0.01%
person’s share

II. Un-restricted shares        467,713,858 40.58%               0         0             0     -44,180       -44,180      467,669,678      40.58%

1. RMB common shares            415,964,578 36.09%               0         0             0     -44,180       -44,180      415,920,398      36.09%
2. Domestically listed
                                 51,749,280        4.49%         0         0             0             0              0    51,749,280       4.49%
foreign shares
3. Foreign listed foreign
                                            0      0.00%         0         0             0             0              0             0       0.00%
shares
4. Other                                    0      0.00%         0         0             0             0              0             0       0.00%

III. Total shares              1,152,535,254 100.00%             0         0             0             0              0 1,152,535,254     100.00%

Reasons for share changed

√Applicable        □Not applicable
1. During the reporting period, natural of the shares held by shareholder Agricultural Products are changed to state-owned corporate
shares instead of domestic legal person’s shares, the state-owned corporate shares in restricted shares has 15,384,832 shares increased

                                                                           40
                                                                                     深圳市深粮控股股份有限公司 2019 年半年度报告全文


while 15,384,832 shares decreased in other domestic shares.
2. During the reporting period, the shares are lock-in for changes after the former directors, supervisors and senior executives leaving
the office. The un-restricted shares has 44,180 decreased while 44,180 shares increased in restricted shares.
Approval of share changed

□ Applicable    √ Not applicable
Ownership transfer of share changed

□ Applicable    √ Not applicable
Progress of shares buy-back
□ Applicable√Not applicable
Implementation progress of the reduction of repurchases shares by centralized bidding
□ Applicable√Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
shareholders of Company in latest year and period
□ Applicable    √ Not applicable
Other information necessary to disclose or need to disclosed under requirement from security regulators

□ Applicable    √ Not applicable


2. Changes of restricted shares

√Applicable     □Not applicable

                                             Restrict shares       Restricted shares       Shares
                       Shares restricted                                                                      Restriction     Date for shares
    Shareholder                               released in          increased in the      restricted at
                        at period-begin                                                                         causes           released
                                             current period         current period       period-end

                                                                                                             Shares lock-in
    Yan Zesong                   53,335                        0              17,779            71,114                          2019-8-22
                                                                                                             for executives

                                                                                                             Shares lock-in
    Zheng Yuxi                   49,500                        0              16,500            66,000                          2019-8-22
                                                                                                             for executives

                                                                                                             Shares lock-in
   Yao Xiaopeng                  33,289                        0              11,096            44,385                          2019-8-22
                                                                                                             for executives

                                                                                                             Shares lock-in
     Lin Hong                    30,937                        0              10,313            41,250                          2019-8-22
                                                                                                             for executives

                                                                                                             Shares lock-in
      Li Yiyan                   30,937                        0              10,313            41,250                          2019-8-22
                                                                                                             for executives

                                                                                                             Shares lock-in
   Wang Zhiping                  21,037                        0                7,013           28,050                          2019-8-22
                                                                                                             for executives

                                                                                                             Shares lock-in
    Fan Zhiqing                      2,970                     0                  990             3,960                         2019-8-22
                                                                                                             for executives

                                                                                                             Shares lock-in
      Li Fang                    29,824               29,824                  -29,824                    0                      2019-3-11
                                                                                                             for executives

        Total                   251,829               29,824                  44,180           296,009             --               --

                                                                         41
                                                                          深圳市深粮控股股份有限公司 2019 年半年度报告全文


II. Securities issuance and listing


□ Applicable   √ Not applicable


III. Amount of shareholders and particulars about shares holding

                                                                                                                                In Share

                                                                                     Total preference shareholders
Total common stock
                                                                                     with voting rights recovered at
shareholders in reporting                                                  54,313                                                     0
                                                                                     end of reporting period (if
period-end
                                                                                     applicable) (found in note8)

                  Particulars about shares held above 5% by common shareholders or top ten common shareholders

                                                                                                                         Number of
                                                         Total common                  Amount of        Amount of             share
                                                Proporti                Changes
                                     Nature of   on of shares hold at                  restricted       un-restricted   pledged/frozen
   Full name of Shareholders                                            in report
                                    shareholder shares      the end of                  common            common        State
                                                  held                   period
                                                          report period               shares held       shares held      of     Amount
                                                                                                                        share

Shenzhen Fude State-Owned           State-owned
                                                   63.79%   735,237,253         0      669,184,735        66,052,518
Capital Operation Co., Ltd.         legal person

Shenzhen Agricultural Products State-owned
                                                   8.23%     94,832,294         0       15,384,832        79,447,462
Co., Ltd                            legal person

                                    Domestic
Sun Huiming                         nature         0.30%      3,436,462         0                   0      3,436,462
                                    person

                                    State-owned
Bohai Securities Co., Ltd.                         0.26%      2,980,500 2,980,500                   0      2,980,500
                                    legal person

                                    Domestic
Hu Xiangzhu                         nature         0.24%      2,800,000   170,000                   0      2,800,000
                                    person

                                    Domestic
Lin Junbo                           nature         0.17%      2,000,000   542,100                   0      2,000,000
                                    person

Central Huijin Asset                State-owned
                                                   0.13%      1,472,625         0                   0      1,472,625
Management Co., Ltd.                legal person

                                    Domestic
Li Qian                             nature          0.11%     1,309,661    30,470                   0      1,309,661
                                    person

                                    Domestic
Li Yongqi                                          0.10%      1,099,205     -9,000                  0      1,099,205
                                    nature

                                                                 42
                                                                            深圳市深粮控股股份有限公司 2019 年半年度报告全文


                                    person

                                    Domestic
Cai Congda                          nature         0.09%       1,080,051 1,080,051                  0        1,080,051
                                    person

Strategy investors or general corporation
comes top 10 common shareholders due to         N/A
rights issue (if applicable) (see note 3)

                                                Shenzhen SASAC directly holds 100% equity of Fude Capital, and holds 34% of
                                                Agricultural Products indirectly through Fude Capital; the Company was not aware
Explanation on associated relationship among
                                                of any related relationship between other shareholders above, and whether they
the aforesaid shareholders
                                                belonged to parties acting in concert as defined by the Acquisition Management
                                                Method of Listed Company.

                               Particular about top ten common shareholders with un-restrict shares held

                                                 Amount of un-restrict common shares held at                 Type of shares
              Shareholders’ name
                                                                  Period-end                              Type           Amount

Shenzhen Fude State-Owned Capital                                                                RMB common
                                                                                   79,447,462                                 79,447,462
Operation Co., Ltd.                                                                              shares

                                                                                                 RMB common
Shenzhen Agricultural Products Co., Ltd                                            66,052,518                                 66,052,518
                                                                                                 shares

                                                                                                 Domestically
Sun Huiming                                                                          3,436,462 listed foreign                  3,436,462
                                                                                                 shares

                                                                                                 RMB common
Bohai Securities Co., Ltd.                                                           2,980,500                                 2,980,500
                                                                                                 shares

                                                                                                 RMB common
Hu Xiangzhu                                                                          2,800,000                                 2,800,000
                                                                                                 shares

                                                                                                 RMB common
Lin Junbo                                                                            2,000,000                                 2,000,000
                                                                                                 shares

                                                                                                 RMB common
Central Huijin Asset Management Co., Ltd.                                            1,472,625                                 1,472,625
                                                                                                 shares

                                                                                                 RMB common
Li Qian                                                                              1,309,661                                 1,309,661
                                                                                                 shares

                                                                                                 RMB common
Li Yongqi                                                                            1,099,205                                 1,099,205
                                                                                                 shares

                                                                                                 RMB common
Cai Congda                                                                           1,080,051                                 1,080,051
                                                                                                 shares

Expiation on associated relationship or         Shenzhen SASAC directly holds 100% equity of Fude Capital, and holds 34% of
consistent actors within the top 10 un-restrict Agricultural Products indirectly through Fude Capital; the Company was not aware
shareholders and between top 10 un-restrict     of any related relationship between other shareholders above, and whether they

                                                                  43
                                                                           深圳市深粮控股股份有限公司 2019 年半年度报告全文


shareholders and top 10 shareholders           belonged to parties acting in concert as defined by the Acquisition Management
                                               Method of Listed Company.

                                               Shareholder Li Yongqi holds 1,097,205 shares of the Company under customer
                                               credit trading secured securities account through Xingye Securities Co., ltd, common
Explanation on top 10 shareholders involving account holds 2,000 shares, and 1,099,205 shares are held by Li in total at end of the
margin business (if applicable) (see note 4)   Period. During the reporting period, the credit trading secured securities account has
                                               9,100 shares decreased, and 100 shares increased in the common account, shares
                                               held by Li are decreased 9,000 shares in total.

Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back
agreement dealing in reporting period
□ Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no
buy-back agreement dealing in reporting period.


IV. Change of controlling shareholder or actual controller

Change of controlling shareholders during the reporting period
□ Applicable   √ Not applicable
The Company had no changes of controlling shareholders in reporting period
Changes of actual controller in reporting period
□ Applicable   √ Not applicable
The Company had no changes of actual controller in reporting period




                                                                 44
                                                         深圳市深粮控股股份有限公司 2019 年半年度报告全文




                                      Section VII. Preferred Stock

□ Applicable   √ Not applicable
The Company had no preferred stock in the Period.




                                                    45
                                                                          深圳市深粮控股股份有限公司 2019 年半年度报告全文




      Section VIII. Particulars about Directors, Supervisor and Senior

                                                         Executives

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

□ Applicable    √ Not applicable
No change of shares held by directors, supervisors and senior executives, found more details in Annual Report 2018.


II. Changes of directors, supervisors and senior executives

√ Applicable    □ Not applicable

      Name                       Position                  Type                Date                          Causes

  Zhu Junming           Party Secretary, Chairman        Election           2019-02-21         Election of the Board of Directors

                    Deputy party secretary, Director,
  Hu Xianghai                                            Election           2019-02-21         Election of the Board of Directors
                                     GM

   Lu Qiguang        Deputy party secretary, Director    Election           2019-02-21         Election of the Board of Directors

  Jin Zhenyuan                Director, CFO              Election           2019-02-21         Election of the Board of Directors

  Zhao Rubing             Independent director           Election           2019-02-21         Election of the Board of Directors

   Bi Weimin              Independent director           Election           2019-02-21         Election of the Board of Directors

   Liu Haifeng            Independent director           Election           2019-02-21         Election of the Board of Directors

                     SCID, Chairman of supervisory                                             Election of the Board of
  Wang Huimin                                            Election           2019-02-21
                                committee                                                      Supervisors

                                                                                               Election of the Board of
      Liu Ji                    Supervisor               Election           2019-02-21
                                                                                               Supervisors

                                                                                               Election of the Board of
  Qian Wenying                  Supervisor               Election           2019-02-21
                                                                                               Supervisors

Zheng Shengqiao              Staff supervisor            Election           2019-02-21         Election of workers' Congress

   Du Jianguo                Staff supervisor            Election           2019-02-21         Election of workers' Congress

                               Deputy GM                                                       Appointment of the Board of
   Cao Xuelin                                           Appointment         2019-02-21
                                                                                               Directors

                               Deputy GM                Appointment                            Appointment of the Board of
   Ye Qingyun                                                               2019-02-21
                                                                                               Directors

                               Deputy GM                Appointment                            Appointment of the Board of
     Dai Bin                                                                2019-02-21
                                                                                               Directors

Wang Fangcheng            Secretary of the Board        Appointment         2019-02-21         Appointment of the Board of


                                                                  46
                                                                     深圳市深粮控股股份有限公司 2019 年半年度报告全文


                                                                                      Directors

                                                  Term of office
                                                                                      Term of office expires and is not
  Zheng Yuxi       Party Secretary, Chairman        expires and       2019-02-21
                                                                                      renewed
                                                  leave the office

                                                  Term of office                      Term of office expires and is not
Zhang Guodong               Director                expires and       2019-02-21      renewed
                                                  leave the office

                                                  Term of office                      Term of office expires and is not
  Fan Zhiqing         Independent director          expires and       2019-02-21      renewed
                                                  leave the office

                                                  Term of office                      Term of office expires and is not
 Wu Shuping           Independent director          expires and       2019-02-21      renewed
                                                  leave the office

                                                  Term of office                      Term of office expires and is not
 Chen Cansong         Independent director          expires and       2019-02-21      renewed
                                                  leave the office

                                                  Term of office                      Term of office expires and is not
  Yan Zesong             Director, GM               expires and       2019-02-21      renewed
                                                  leave the office

                                                  Term of office                      Term of office expires and is not
                 Director, Deputy GM, Secretary
   Li Yiyan                                         expires and       2019-02-21      renewed
                          of the Board
                                                  leave the office

                                                  Term of office                      Term of office expires and is not
                    Chairman of supervisory
   Lin Hong                                         expires and       2019-02-21      renewed
                           committee
                                                  leave the office

                                                  Term of office                      Term of office expires and is not
 Luo Longxin            Staff supervisor            expires and       2019-02-21      renewed
                                                  leave the office

                                                  Term of office                      Term of office expires and is not
 Qian Xiaojun             Deputy GM                 expires and       2019-02-21      renewed
                                                  leave the office

                                                  Term of office                      Term of office expires and is not
 Yao Xiaopeng             Deputy GM                 expires and       2019-02-21      renewed
                                                  leave the office

                                                  Term of office                      Term of office expires and is not
 Wang Zhiping                CFO                    expires and       2019-02-21      renewed
                                                  leave the office

Wang Fangcheng       Secretary of the Board          Dismiss          2019-06-13      Job transfer




                                                               47
                                                                          深圳市深粮控股股份有限公司 2019 年半年度报告全文




                                        Section IX. Corporate Bonds

Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when
semi-annual report approved for released or fail to cash in full on due
No




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                                                                          深圳市深粮控股股份有限公司 2019 年半年度报告全文




                                         Section X. Financial Report

I. Audit reports

Whether the semi-annual report was audited or not
□ Yes √ No
The financial report of this semi-annual report was unaudited


II. Financial statements

Units in Notes of Financial Statements is RMB


1. Consolidated Balance Sheet

Prepared by SHENZHEN CEREALS HOLDINGS CO., LTD.
                                                            2019-06-30
                                                                                                                     In RMB

                    Item                                  2019-6-30                              2018-12-31

Current assets:

     Monetary funds                                                   189,914,485.39                          631,638,339.68

     Settlement provisions

     Capital lent

     Tradable financial assets                                           1,153,309.17

     Financial assets measured by fair
value and with variation reckoned into                                                                          1,124,927.96
current gains/losses

     Derivative financial assets

     Note receivable                                                      350,756.64                            1,027,635.04

     Account receivable                                               617,831,167.71                          473,646,886.64

     Receivable financing

     Accounts paid in advance                                          26,189,928.10                           83,696,870.07

     Insurance receivable

     Reinsurance receivables

     Contract reserve of reinsurance
receivable

     Other account receivable                                          57,624,419.71                           33,803,428.45

                                                                49
                                                      深圳市深粮控股股份有限公司 2019 年半年度报告全文


          Including: Interest receivable

                  Dividend receivable

       Buying back the sale of financial
assets

       Inventories                               3,053,593,314.19                     2,811,802,600.19

         Contractual assets

       Assets held for sale

       Non-current asset due within one
year

       Other current assets                       108,098,667.05                        254,493,764.04

Total current assets                             4,054,756,047.96                     4,291,234,452.07

Non-current assets:

       Loans and payments on behalf

       Debt investment

       Finance asset available for sales                                                     57,500.00

       Other debt investment

       Held-to-maturity investment

       Long-term account receivable

       Long-term equity investment                 73,362,651.19                         70,999,666.81

       Investment in other equity
instrument

       Other non-current financial assets              57,500.00

       Investment real estate                     278,173,249.83                        282,622,184.92

       Fixed assets                               967,835,524.07                        993,136,743.51

       Construction in progress                   403,629,287.82                        186,586,135.06

       Productive biological asset                    402,232.74                           407,078.92

       Oil and gas asset

         Right-of-use assets

       Intangible assets                          586,543,323.51                        569,997,392.08

       Expense on Research and
Development

       Goodwill

       Long-term expenses to be
                                                   16,742,788.37                         21,799,899.80
apportioned

       Deferred income tax asset                   50,155,704.51                         50,174,590.98


                                            50
                                                      深圳市深粮控股股份有限公司 2019 年半年度报告全文


     Other non-current asset                          854,782.25                          1,936,149.72

Total non-current asset                          2,377,757,044.29                     2,177,717,341.80

Total assets                                     6,432,513,092.25                     6,468,951,793.87

Current liabilities:

     Short-term loans                              30,590,000.00                         91,600,000.00

     Loan from central bank

     Capital borrowed

     Transactional financial liability

     Financial liability measured by fair
value and with variation reckoned into
current gains/losses

     Derivative financial liability

     Note payable

     Account payable                              171,201,542.03                        472,738,283.80

     Accounts received in advance                 136,680,506.97                        205,428,594.16

     Selling financial asset of
repurchase

     Absorbing deposit and interbank
deposit

     Security trading of agency

     Security sales of agency

     Wage payable                                 118,823,329.33                        135,709,423.52

     Taxes payable                                 30,267,605.83                         24,969,718.58

     Other account payable                        304,979,705.51                        280,689,548.29

          Including: Interest payable               1,020,795.27

                       Dividend payable             2,909,182.74                          2,909,182.74

     Commission charge and
commission payable

     Reinsurance payable

      Contractual liability

     Liability held for sale

     Non-current liabilities due within
                                                   60,027,362.43                         55,090,793.79
one year

     Other current liabilities                    219,151,968.63                        219,151,968.63

Total current liabilities                        1,071,722,020.73                     1,485,378,330.77

Non-current liabilities:
                                            51
                                                   深圳市深粮控股股份有限公司 2019 年半年度报告全文


     Insurance contract reserve

     Long-term loans                           777,384,100.20                        516,687,791.66

     Bonds payable

        Including: Preferred stock

                     Perpetual capital
securities

       Lease liability

     Long-term account payable                  15,724,141.66                         15,690,202.08

     Long-term wages payable

     Accrual liability

     Deferred income                            98,721,691.96                        100,608,203.01

     Deferred income tax liabilities            13,162,941.71                         12,988,434.77

     Other non-current liabilities

Total non-current liabilities                  904,992,875.53                        645,974,631.52

Total liabilities                             1,976,714,896.26                     2,131,352,962.29

Owner’s equity:

     Share capital                            1,152,535,254.00                     1,152,535,254.00

     Other equity instrument

        Including: Preferred stock

                     Perpetual capital
securities

     Capital public reserve                   1,422,892,729.36                     1,422,892,729.36

     Less: Inventory shares

     Other comprehensive income

     Reasonable reserve                             62,409.56                               154.21

     Surplus public reserve                    327,140,910.28                        327,140,910.28

     Provision of general risk

     Retained profit                          1,357,848,812.47                     1,269,933,487.26

Total owner’ s equity attributable to
                                              4,260,480,115.67                     4,172,502,535.11
parent company

     Minority interests                        195,318,080.32                        165,096,296.47

Total owner’ s equity                        4,455,798,195.99                     4,337,598,831.58

Total liabilities and owner’ s equity        6,432,513,092.25                     6,468,951,793.87


Legal Representative: Zhu Junming


                                         52
                                                                     深圳市深粮控股股份有限公司 2019 年半年度报告全文


Person in charge of accounting works: Ye Qingyun


Person in charge of accounting institute: Wen Jieyu


2. Balance Sheet of Parent Company

                                                                                                                In RMB

                   Item                               2019-6-30                             2018-12-31

Current assets:

     Monetary funds                                                 4,667,978.54                         168,900,586.84

     Trading financial assets                                       1,153,309.17

     Financial assets measured by fair
value and with variation reckoned into                                                                     1,124,927.96
current gains/losses

     Derivative financial assets

     Note receivable

     Account receivable                                             4,700,782.83                          42,441,119.07

     Receivable financing

     Accounts paid in advance

     Other account receivable                                     242,873,517.60                         159,677,969.59

       Including: Interest receivable

                   Dividend receivable

     Inventories                                                    2,972,019.11                           8,806,338.26

     Contractual assets

     Assets held for sale

     Non-current assets maturing within
one year

     Other current assets                                          30,000,000.00                          50,068,745.74

Total current assets                                              286,367,607.25                         431,019,687.46

Non-current assets:

     Debt investment

     Available-for-sale financial assets

     Other debt investment

     Held-to-maturity investments

     Long-term receivables

     Long-term equity investments                               4,212,419,029.48                     4,212,554,063.36


                                                           53
                                                      深圳市深粮控股股份有限公司 2019 年半年度报告全文


     Investment in other equity
instrument

     Other non-current financial assets

     Investment real estate                        17,693,889.54                         17,929,684.70

     Fixed assets                                  30,905,606.49                         31,417,912.54

     Construction in progress

     Productive biological assets                     402,232.74                           407,078.92

     Oil and natural gas assets

     Right-of-use assets

      Intangible assets                             6,363,106.12                          6,663,692.30

     Research and development costs

     Goodwill

     Long-term deferred expenses                      302,763.72                           409,621.50

     Deferred income tax assets                     5,579,344.64                          5,630,538.80

     Other non-current assets

Total non-current assets                         4,273,665,972.73                     4,275,012,592.12

Total assets                                     4,560,033,579.98                     4,706,032,279.58

Current liabilities

     Short-term borrowings

     Trading financial liability

     Financial liability measured by fair
value and with variation reckoned into
current gains/losses

     Derivative financial liability

     Notes payable

     Account payable                               34,354,909.69                         73,705,646.54

     Accounts received in advance                       3,247.80                           124,945.74

     Contractual liability

     Wage payable                                   9,866,658.37                          6,448,561.16

     Taxes payable                                  2,745,766.36                          2,702,655.24

     Other accounts payable                       254,402,388.26                        232,109,084.76

        Including: Interest payable

                Dividend payable

     Liability held for sale

     Non-current liabilities due within

                                            54
                                                  深圳市深粮控股股份有限公司 2019 年半年度报告全文


one year

     Other current liabilities

Total current liabilities                     301,372,970.48                        315,090,893.44

Non-current liabilities:

     Long-term loans

     Bonds payable

        Including: preferred stock

                    Perpetual capital
securities

     Lease liability

     Long-term account payable

     Long term employee compensation
payable

     Accrued liabilities

     Deferred income                               45,575.32                             46,129.96

     Deferred income tax liabilities               18,060.77                             10,965.46

     Other non-current liabilities

Total non-current liabilities                      63,636.09                             57,095.42

Total liabilities                             301,436,606.57                        315,147,988.86

Owners’ equity:

     Share capital                           1,152,535,254.00                     1,152,535,254.00

     Other equity instrument

        Including: preferred stock

                    Perpetual capital
securities

     Capital public reserve                  3,018,106,568.27                     3,018,106,568.27

     Less: Inventory shares

     Other comprehensive income

     Special reserve

     Surplus reserve                           54,736,482.14                         54,736,482.14

     Retained profit                           33,218,669.00                        165,505,986.31

Total owner’s equity                        4,258,596,973.41                     4,390,884,290.72

Total liabilities and owner’s equity        4,560,033,579.98                     4,706,032,279.58




                                        55
                                                                      深圳市深粮控股股份有限公司 2019 年半年度报告全文


3. Consolidated Profit Statement

                                                                                                                  In RMB

                        Item                      Semi-annual of 2019                    Semi-annual of 2018

I. Total operating income                                        4,782,167,732.69                     4,434,688,646.82

      Including: Operating income                                4,782,167,732.69                     4,434,688,646.82

              Interest income

              Insurance gained

              Commission charge and
commission income

II. Total operating cost                                         4,495,390,182.31                     4,187,994,970.83

      Including: Operating cost                                  4,262,101,770.62                     3,962,753,163.26

              Interest expense

              Commission charge and
commission expense

     Cash surrender value

     Net amount of expense of
compensation

     Net amount of withdrawal of
insurance contract reserve

     Bonus expense of guarantee slip

              Reinsurance expense

              Tax and extras                                        6,605,514.20                          7,661,918.10

              Sales expense                                       112,553,742.74                        120,452,104.30

              Administrative expense                              101,397,947.99                         96,324,028.90

              R&D expense                                            4,211,474.91                         2,977,062.54

              Financial expense                                     8,519,731.85                          -2,173,306.27

                     Including: Interest
                                                                   10,087,784.34                          4,313,048.72
expenses

                                Interest income                     2,185,171.96                          3,899,478.59

      Add: other income                                             5,463,876.60                          4,324,296.96

            Investment income (Loss is
                                                                    7,167,936.04                          1,343,407.46
listed with “-”)

            Including: Investment income
                                                                    3,413,100.95                               626,055.86
on affiliated company and joint venture
                     The termination of income
recognition for financial assets measured

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                                                         深圳市深粮控股股份有限公司 2019 年半年度报告全文


by amortized cost(Loss is listed with “-”)

              Exchange income (Loss is
listed with “-”)

              Net exposure hedging income
(Loss is listed with “-”)

              Income from change of fair
                                                           28,381.21                          -425,718.15
value (Loss is listed with “-”)
              Loss of credit impairment
                                                        5,143,559.77
(Loss is listed with “-”)
              Losses of devaluation of asset
                                                      -69,231,423.42                       -32,562,385.63
(Loss is listed with “-”)

              Income from assets disposal
                                                           -4,184.59                          -210,840.01
(Loss is listed with “-”)

III. Operating profit (Loss is listed with
                                                      235,345,695.99                       219,162,436.62
“-”)

         Add: Non-operating income                       362,252.46                           980,860.83

         Less: Non-operating expense                    3,982,019.95                          595,492.72

IV. Total profit (Loss is listed with “-”)          231,725,928.50                       219,547,804.73

         Less: Income tax expense                      15,485,294.03                        11,869,852.06

V. Net profit (Net loss is listed with “-”)         216,240,634.47                       207,677,952.67

   (i) Classify by business continuity

         1.continuous operating net profit
                                                      216,240,634.47                       207,677,952.67
(net loss listed with ‘-”)

         2.termination of net profit (net loss
listed with ‘-”)

   (ii) Classify by ownership

         1.Net profit attributable to owner’s
                                                      203,168,850.61                       202,779,343.34
of parent company

         2.Minority shareholders’ gains and
                                                       13,071,783.86                         4,898,609.33
losses

VI. Net after-tax of other comprehensive
income

   Net after-tax of other comprehensive
income attributable to owners of parent
company

         (I) Other comprehensive income
items which will not be reclassified
subsequently to profit of loss


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              1.Changes of the defined
benefit plans that re-measured

              2.Other comprehensive
income under equity method that cannot
be transfer to gain/loss

              3.Change of fair value of
investment in other equity instrument

              4.Fair value change of
enterprise's credit risk

              5. Other

         (ii) Other comprehensive income
items which will be reclassified
subsequently to profit or loss

              1.Other comprehensive
income under equity method that can
transfer to gain/loss

              2.Change of fair value of
other debt investment

              3.gain/loss of fair value
changes for available-for-sale financial
assets

              4.Amount of financial assets
re-classify to other comprehensive
income

              5.Gain/loss of
held-to-maturity investments that
re-classify to available-for-sale financial
asset

              6.Credit impairment
provision for other debt investment

              7.Cash flow hedging reserve

              8.Translation differences
arising on translation of foreign currency
financial statements

              9.Other

  Net after-tax of other comprehensive
income attributable to minority
shareholders

VII. Total comprehensive income                    216,240,634.47                       207,677,952.67


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         Total comprehensive income
                                                                      203,168,850.61                            202,779,343.34
attributable to owners of parent Company

      Total comprehensive income
                                                                       13,071,783.86                              4,898,609.33
attributable to minority shareholders

VIII. Earnings per share:

       (i) Basic earnings per share                                             0.1763                                  0.1759

     (ii) Diluted earnings per share                                            0.1763                                  0.1759

Enterprise combine under the same control in the Period, the combined party realized net profit of 0 Yuan before combination, and
realized 0 Yuan at last period for combined party.


Legal Representative: Zhu Junming


Person in charge of accounting works: Ye Qingyun


Person in charge of accounting institute: Wen Jieyu


4. Profit Statement of Parent Company

                                                                                                                        In RMB

                       Item                           Semi-annual of 2019                      Semi-annual of 2018

I. Operating income                                                   31,562,730.23                              67,228,720.81

      Less: Operating cost                                            29,829,293.00                              63,731,294.22

            Taxes and surcharge                                             252,634.47                               292,769.77

            Sales expenses                                                  293,450.97                             1,943,060.61

            Administration expenses                                   21,614,585.82                              14,366,353.12

            R&D expenses

            Financial expenses                                          -532,360.14                               -1,565,736.21

                     Including: interest
expenses

                              Interest income

      Add: other income                                                1,253,598.63                                      554.64

            Investment income (Loss is
                                                                       1,432,614.92                                 -185,480.37
listed with “-”)

            Including: Investment income
                                                                        -135,033.88                                 -185,480.37
on affiliated Company and joint venture
                     The termination of
income recognition for financial assets
measured by amortized cost (Loss is
listed with “-”)

                                                                59
                                                        深圳市深粮控股股份有限公司 2019 年半年度报告全文


              Net exposure hedging income
(Loss is listed with “-”)

              Changing income of fair
                                                         28,381.21                           -425,718.15
value (Loss is listed with “-”)
              Loss of credit impairment
                                                       -204,340.76
(Loss is listed with “-”)
              Losses of devaluation of asset
                                                        409,117.45                           -203,706.33
(Loss is listed with “-”)

              Income on disposal of assets
(Loss is listed with “-”)

II. Operating profit (Loss is listed with
                                                     -16,975,502.44                       -12,353,370.91
“-”)

         Add: Non-operating income

         Less: Non-operating expense                                                              51.64

III. Total Profit (Loss is listed with “-”)        -16,975,502.44                       -12,353,422.55

         Less: Income tax                                58,289.47                           -157,620.42

IV. Net profit (Net loss is listed with
                                                     -17,033,791.91                       -12,195,802.13
“-”)

         (i)continuous operating net profit
                                                     -17,033,791.91                       -12,195,802.13
         (net loss listed with ‘-”)

         (ii) termination of net profit (net
loss listed with ‘-”)

V. Net after-tax of other comprehensive
income

         (I) Other comprehensive income
items which will not be reclassified
subsequently to profit of loss

                 1.Changes of the defined
benefit plans that re-measured

                 2.Other comprehensive
income under equity method that cannot
be transfer to gain/loss

                 3.Change of fair value of
investment in other equity instrument

                 4.Fair value change of
enterprise's credit risk

                 5. Other

          (II) Other comprehensive income
items which will be reclassified

                                                60
                                                                    深圳市深粮控股股份有限公司 2019 年半年度报告全文


subsequently to profit or loss

               1.Other comprehensive
income under equity method that can
transfer to gain/loss

               2.Change of fair value of
other debt investment

               3.gain/loss of fair value
changes for available-for-sale financial
assets

               4.Amount of financial
assets re-classify to other
comprehensive income

               5.Gain/loss of
held-to-maturity investments that
re-classify to available-for-sale financial
asset

               6.Credit impairment
provision for other debt investment

               7.Cash flow hedging
reserve

               8.Translation differences
arising on translation of foreign
currency financial statements

               9.Other

VI. Total comprehensive income                                 -17,033,791.91                          -12,195,802.13

VII. Earnings per share:

         (i) Basic earnings per share                                  -0.0148                               -0.0106

        (ii) Diluted earnings per share                                -0.0148                               -0.0106


5. Consolidated Cash Flow Statement

                                                                                                              In RMB

                     Item                     Semi-annual of 2019                      Semi-annual of 2018

I. Cash flows arising from operating
activities:

        Cash received from selling
commodities and providing labor                              4,570,303,860.45                        4,726,406,214.58
services

        Net increase of customer deposit

                                                        61
                                                       深圳市深粮控股股份有限公司 2019 年半年度报告全文


and interbank deposit

        Net increase of loan from central
bank

       Net increase of capital borrowed
from other financial institution

       Cash received from original
insurance contract fee

       Net cash received from reinsurance
business

       Net increase of insured savings
and investment

       Cash received from interest,
commission charge and commission

       Net increase of capital borrowed

       Net increase of returned business
capital

       Net cash received by agents in sale
and purchase of securities

       Write-back of tax received                      341,886.74                           893,445.54

       Other cash received concerning
                                                   187,051,727.97                         24,547,106.70
operating activities

Subtotal of cash inflow arising from
                                                  4,757,697,475.16                     4,751,846,766.82
operating activities

       Cash paid for purchasing
commodities and receiving labor                   4,737,315,792.15                     4,340,946,309.76
service

       Net increase of customer loans and
advances

       Net increase of deposits in central
bank and interbank

       Cash paid for original insurance
contract compensation

       Net increase of financial assets
held for transaction purposes

       Net increase of capital lent

       Cash paid for interest, commission
charge and commission

        Cash paid for bonus of guarantee


                                             62
                                                      深圳市深粮控股股份有限公司 2019 年半年度报告全文


slip

       Cash paid to/for staff and workers         117,107,205.65                        126,373,197.96

       Taxes paid                                  36,670,126.83                         27,553,349.81

       Other cash paid concerning
                                                  256,033,980.28                        204,112,663.99
operating activities

Subtotal of cash outflow arising from
                                                 5,147,127,104.91                     4,698,985,521.52
operating activities

Net cash flows arising from operating
                                                 -389,429,629.75                         52,861,245.30
activities

II. Cash flows arising from investing
activities:

       Cash received from recovering
                                                  376,000,000.00                        100,000,000.00
investment

       Cash received from investment
                                                    3,281,912.85                           717,351.60
income

       Net cash received from disposal of
fixed, intangible and other long-term               5,225,078.07                              8,600.00
assets

       Net cash received from disposal of
subsidiaries and other units

       Other cash received concerning
investing activities

Subtotal of cash inflow from investing
                                                  384,506,990.92                        100,725,951.60
activities

       Cash paid for purchasing fixed,
                                                  279,258,684.99                        251,093,013.07
intangible and other long-term assets

       Cash paid for investment                   246,000,000.00                        120,000,000.00

       Net increase of mortgaged loans

       Net cash received from
                                                                                         37,000,000.00
subsidiaries and other units obtained

       Other cash paid concerning
investing activities

Subtotal of cash outflow from investing
                                                  525,258,684.99                        408,093,013.07
activities

Net cash flows arising from investing
                                                 -140,751,694.07                       -307,367,061.47
activities

III. Cash flows arising from financing
activities


                                            63
                                                                深圳市深粮控股股份有限公司 2019 年半年度报告全文


     Cash received from absorbing
                                                          17,150,000.00
investment

       Including: Cash received from
absorbing minority shareholders’                         17,150,000.00
investment by subsidiaries

     Cash received from loans                            275,167,400.91                            67,732,101.19

     Cash received from issuing bonds

     Other cash received concerning
                                                                                                   24,500,000.00
financing activities

Subtotal of cash inflow from financing
                                                         292,317,400.91                            92,232,101.19
activities

     Cash paid for settling debts                         70,544,523.73                            18,898,888.81

     Cash paid for dividend and profit
                                                         133,274,201.72                             6,913,361.89
distributing or interest paying

     Including: Dividend and profit of
minority shareholder paid by
subsidiaries

     Other cash paid concerning
                                                                 72,997.72
financing activities

Subtotal of cash outflow from financing
                                                         203,891,723.17                            25,812,250.70
activities

Net cash flows arising from financing
                                                          88,425,677.74                            66,419,850.49
activities

IV. Influence on cash and cash
equivalents due to fluctuation in                                31,791.79                          3,088,981.33
exchange rate

V. Net increase of cash and cash
                                                         -441,723,854.29                         -184,996,984.35
equivalents

     Add: Balance of cash and cash
                                                         631,638,339.68                           544,440,739.45
equivalents at the period -begin

VI. Balance of cash and cash
                                                         189,914,485.39                           359,443,755.10
equivalents at the period -end


6. Cash Flow Statement of Parent Company

                                                                                                         In RMB

                  Item                    Semi-annual of 2019                      Semi-annual of 2018

I. Cash flows arising from operating
activities:

                                                    64
                                                  深圳市深粮控股股份有限公司 2019 年半年度报告全文


     Cash received from selling
commodities and providing labor                 74,116,410.44                        99,228,621.54
services

     Write-back of tax received                   336,964.29                           737,441.54

     Other cash received concerning
                                               138,446,106.95                        27,633,986.64
operating activities

Subtotal of cash inflow arising from
                                               212,899,481.68                       127,600,049.72
operating activities

     Cash paid for purchasing
commodities and receiving labor                 67,845,729.08                        96,230,177.23
service

     Cash paid to/for staff and workers         14,152,467.36                        12,384,561.21

     Taxes paid                                  1,160,654.10                         2,194,673.02

     Other cash paid concerning
                                               199,823,754.56                        11,572,835.91
operating activities

Subtotal of cash outflow arising from
                                               282,982,605.10                       122,382,247.37
operating activities

Net cash flows arising from operating
                                               -70,083,123.42                         5,217,802.35
activities

II. Cash flows arising from investing
activities:

     Cash received from recovering
                                               266,000,000.00
investment

     Cash received from investment
                                                 1,567,648.80
income

     Net cash received from disposal of
fixed, intangible and other long-term                2,710.37
assets

     Net cash received from disposal of
subsidiaries and other units

     Other cash received concerning
investing activities

Subtotal of cash inflow from investing
                                               267,570,359.17
activities

     Cash paid for purchasing fixed,
                                                  483,680.00                             18,200.00
intangible and other long-term assets

     Cash paid for investment                  246,000,000.00                        30,000,000.00

     Net cash received from


                                          65
                                                   深圳市深粮控股股份有限公司 2019 年半年度报告全文


subsidiaries and other units obtained

     Other cash paid concerning
investing activities

Subtotal of cash outflow from investing
                                               246,483,680.00                         30,018,200.00
activities

Net cash flows arising from investing
                                                21,086,679.17                        -30,018,200.00
activities

III. Cash flows arising from financing
activities

     Cash received from absorbing
investment

     Cash received from loans

     Cash received from issuing bonds

     Other cash received concerning
financing activities

Subtotal of cash inflow from financing
activities

     Cash paid for settling debts                                                     10,000,000.00

     Cash paid for dividend and profit
                                               115,253,525.40                             28,710.00
distributing or interest paying

     Other cash paid concerning
                                                    72,997.72
financing activities

Subtotal of cash outflow from financing
                                               115,326,523.12                         10,028,710.00
activities

Net cash flows arising from financing
                                               -115,326,523.12                       -10,028,710.00
activities

IV. Influence on cash and cash
equivalents due to fluctuation in                   90,359.07                             76,401.91
exchange rate

V. Net increase of cash and cash
                                               -164,232,608.30                       -34,752,705.74
equivalents

     Add: Balance of cash and cash
                                               168,900,586.84                        239,662,344.24
equivalents at the period -begin

VI. Balance of cash and cash
                                                  4,667,978.54                       204,909,638.50
equivalents at the period -end




                                          66
                                                                                                                                         深圳市深粮控股股份有限公司 2019 年半年度报告全文
7. Statement of Changes in Owners’ Equity (Consolidated)

Current period
                                                                                                                                                                                    In RMB
                                                                                                Semi-annual of 2019
                                                                 Owners’ equity attributable to the parent Company
                                           Other
                                          equity
                                        instrument
                                             Pe
                                             rpe
                                                                            Othe
                                             tua                                                              Provi
                                                                    Less:      r
                                        Pr                                                                     sion
       Item                                   l                     Inve    comp                                                                                Minority      Total owners’
                                        efe                                       Reasonabl                     of                  Othe
                     Share capital           ca     Capital reserve ntory   rehen           Surplus reserve         Retained profit              Subtotal       interests        equity
                                                                                  e reserve                   gener                  r
                                        rre     Ot                  share    sive
                                            pit                                                                 al
                                         d      her                   s      inco
                                             al                                                                risk
                                        sto                                   me
                                            sec
                                        ck
                                            uri
                                             tie
                                              s
I. Balance at the
                     1,152,535,254.00                1,422,892,729.36                 154.21 327,140,910.28           1,269,933,487.26       4,172,502,535.11 165,096,296.47 4,337,598,831.58
end of the last year
               Add:
Changes           of
accounting policy
               Error
correction of the
last period

 Enterprise
 combine under
 the same control
                                                                                                67
                                                                                                     深圳市深粮控股股份有限公司 2019 年半年度报告全文

       Other
II. Balance at the
beginning of this 1,152,535,254.00   1,422,892,729.36     154.21 327,140,910.28   1,269,933,487.26       4,172,502,535.11 165,096,296.47 4,337,598,831.58
year
III.       Increase/
Decrease in this
                                                        62,255.35                   87,915,325.21           87,977,580.56 30,221,783.85     118,199,364.41
year (Decrease is
listed with “-”)
  (i)            Total
comprehensive                                                                      203,168,850.61          203,168,850.61 13,071,783.85     216,240,634.46
income
  (ii)      Owners’
devoted            and                                                                                                      17,150,000.00    17,150,000.00
decreased capital
1.Common shares
invested             by                                                                                                     17,150,000.00    17,150,000.00
shareholders
2. Capital invested
by holders of other
equity instruments
3.          Amount
reckoned           into
owners         equity
with share-based
payment
4. Other
(III)         Profit
                                                                                   -115,253,525.40        -115,253,525.40                   -115,253,525.40
distribution
1. Withdrawal of
surplus reserves
2. Withdrawal of
general         risk
provisions


                                                                    68
                                                           深圳市深粮控股股份有限公司 2019 年半年度报告全文
3. Distribution for
owners          (or                      -115,253,525.40        -115,253,525.40             -115,253,525.40
shareholders)
4. Other
(IV)       Carrying
forward internal
owners’ equity
1. Capital reserves
conversed         to
capital       (share
capital)
2. Surplus reserves
conversed         to
capital       (share
capital)
3. Remedying loss
with         surplus
reserve
4.Carry-over
   retained
   earnings from
   the defined
   benefit plans
5.Carry-over
retained earnings
from other
comprehensive
income
6. Other
(V)     Reasonable
                        62,255.35                                    62,255.35                    62,255.35
reserve
1. Withdrawal in
                       460,394.34                                   460,394.34                   460,394.34
the report period

2. Usage in the        398,138.99                                   398,138.99                   398,138.99
                                    69
                                                                                                                                      深圳市深粮控股股份有限公司 2019 年半年度报告全文
report period

(VI)Others
IV. Balance at the
end of the report 1,152,535,254.00                 1,422,892,729.36              62,409.56 327,140,910.28          1,357,848,812.47       4,260,480,115.67 195,318,080.32 4,455,798,195.99
period
Last Period
                                                                                                                                                                                 In RMB
                                                                                             Semi-annual of 2018
                                                              Owners’ equity attributable to the parent Company
                                         Other
                                        equity
                                      instrument
                                           Pe
                                           rp
                                           etu                            Other                             Provi
                                                                  Less:
                                      Pr                                  comp                               sion
      Item                                al                      Inven                                                                                      Minority      Total owners’
                                      efe                                 rehen Reasonabl                     of                  Othe
                     Share capital        ca      Capital reserve tory                    Surplus reserve         Retained profit             Subtotal       interests        equity
                                                                           sive e reserve                   gener                  r
                                      rre     Oth                 share
                                          pit                              inco                               al
                                       d       er                   s
                                          al                                me                               risk
                                      sto
                                          se
                                      ck
                                          cu
                                           riti
                                           es
I. Balance at the
end of the last      496,782,303.00                 358,999,356.28                          54,736,482.14            36,402,435.91          946,920,577.33 16,232,752.93   963,153,330.26
year
             Add:
Changes         of
accounting policy
            Error
correction of the
                                                                                             70
                                                                                     深圳市深粮控股股份有限公司 2019 年半年度报告全文
last period

 Enterprise
 combine under
 the same control
        Other
II. Balance at the
beginning of this 496,782,303.00   358,999,356.28   54,736,482.14   36,402,435.91          946,920,577.33 16,232,752.93   963,153,330.26
year
III.      Increase/
Decrease in this
                                                                    -18,246,639.07         -18,246,639.07   -979,179.58   -19,225,818.65
year (Decrease is
listed with “-”)
  (i)          Total
comprehensive                                                       -18,246,639.07         -18,246,639.07   -979,179.58   -19,225,818.65
income
  (ii)     Owners’
devoted           and
decreased capital
1.Common shares
invested            by
shareholders
2.          Capital
invested            by
holders of other
equity
instruments
3.         Amount
reckoned          into
owners        equity
with share-based
payment
4. Other

(III)         Profit
                                                     71
                           深圳市深粮控股股份有限公司 2019 年半年度报告全文
distribution
1. Withdrawal of
surplus reserves
2. Withdrawal of
general        risk
provisions
3. Distribution for
owners          (or
shareholders)
4. Other
(IV)      Carrying
forward internal
owners’ equity
1.          Capital
reserves
conversed        to
capital      (share
capital)
2.          Surplus
reserves
conversed        to
capital      (share
capital)
3.      Remedying
loss with surplus
reserve
4.Carry-over
   retained
   earnings from
   the defined
   benefit plans
5.Carry-over
retained earnings
from other
comprehensive

                      72
                                                                                                                                         深圳市深粮控股股份有限公司 2019 年半年度报告全文
income
6. Other
(V) Reasonable
reserve
1. Withdrawal in
the report period

2. Usage in the
report period

(VI)Others
IV. Balance at the
end of the report    496,782,303.00                 358,999,356.28                           54,736,482.14               18,155,796.84             928,673,938.26 15,253,573.35    943,927,511.61
period


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

Current period
                                                                                                                                                                                         In RMB
                                                                                                   Semi-annual of 2019
                                               Other equity instrument
                                                                                                Less:      Other
           Item                                       Perpetual            Capital public                          Reasonable            Surplus                                   Total owners’
                          Share capital     Preferred                                        Inventory comprehens                                     Retained profit   Other
                                                       capital    Other       reserve                               reserve              reserve                                      equity
                                              stock                                            shares   ive income
                                                      securities
I. Balance at the end of
                         1,152,535,254.00                                 3,018,106,568.27                                         54,736,482.14 165,505,986.31                   4,390,884,290.72
the last year
      Add: Changes of
accounting policy
                   Error
correction of the last
period
         Other


                                                                                              73
                                                                          深圳市深粮控股股份有限公司 2019 年半年度报告全文
II. Balance at the
                            1,152,535,254.00   3,018,106,568.27        54,736,482.14 165,505,986.31       4,390,884,290.72
beginning of this year
III. Increase/ Decrease
                                                                                     -132,287,317.3
in this year (Decrease                                                                                     -132,287,317.31
                                                                                                 1
is listed with “-”)
  (i)                 Total
                                                                                     -17,033,791.91         -17,033,791.91
comprehensive income
 (ii) Owners’ devoted
and decreased capital
1.Common         shares
invested             by
shareholders
2. Capital invested by
holders of other equity
instruments
3. Amount reckoned
into owners equity with
share-based payment
4. Other

                                                                                     -115,253,525.4
(III) Profit distribution                                                                                  -115,253,525.40
                                                                                                 0
1.    Withdrawal        of
surplus reserves
2. Distribution        for
                                                                                     -115,253,525.4
owners                 (or                                                                                 -115,253,525.40
                                                                                                 0
shareholders)
3. Other
(IV) Carrying forward
internal owners’ equity
1. Capital reserves
conversed to capital
(share capital)
2.   Surplus     reserves
                                                                  74
                                                                                                                               深圳市深粮控股股份有限公司 2019 年半年度报告全文
conversed to capital
(share capital)
3. Remedying loss with
surplus reserve
4.Carry-over retained
earnings from the
defined benefit plans
5.Carry-over retained
earnings from other
comprehensive income
6. Other

(V) Reasonable reserve

1. Withdrawal in the
report period

2. Usage in the report
period

(VI)Others
IV. Balance at the end
                       1,152,535,254.00                                 3,018,106,568.27                                   54,736,482.14 33,218,669.00            4,258,596,973.41
of the report period
Last Period
                                                                                                                                                                         In RMB
                                                                                              Semi-annual of 2018
                                             Other equity instrument
                                                                                                      Other
                                                    Perpetua                                Less:
           Item                                                         Capital public             comprehen Reasonable      Surplus                               Total owners’
                         Share capital    Preferred l capital                            Inventory                                      Retained profit   Other
                                                                Other      reserve                     sive   reserve        reserve                                  equity
                                            stock securitie                                shares
                                                                                                     income
                                                        s
I. Balance at the end
                         496,782,303.00                                 382,444,482.45                                    54,736,482.14 199,789,650.74            1,133,752,918.33
of the last year
     Add: Changes of
accounting policy

                                                                                            75
                                                                          深圳市深粮控股股份有限公司 2019 年半年度报告全文
                 Error
correction of the last
period
        Other
II. Balance at the
                              496,782,303.00   382,444,482.45        54,736,482.14 199,789,650.74         1,133,752,918.33
beginning of this year
III. Increase/ Decrease
in this year (Decrease                                                             -12,195,802.13           -12,195,802.13
is listed with “-”)
  (i)                 Total
comprehensive                                                                      -12,195,802.13           -12,195,802.13
income
  (ii) Owners’ devoted
and decreased capital
1.Common            shares
invested                 by
shareholders
2. Capital invested by
holders      of       other
equity instruments
3. Amount reckoned
into owners equity
with        share-based
payment
4. Other
(III)            Profit
distribution
1. Withdrawal of
surplus reserves
2. Distribution for
owners              (or
shareholders)
3. Other

                                                                76
                                                                       深圳市深粮控股股份有限公司 2019 年半年度报告全文
(IV) Carrying forward
internal        owners’
equity
1. Capital reserves
conversed to capital
(share capital)
2. Surplus reserves
conversed to capital
(share capital)
3. Remedying loss
with surplus reserve
4.Carry-over retained
earnings from the
defined benefit plans
5.Carry-over retained
earnings from other
comprehensive
income
6. Other
(V)          Reasonable
reserve
1. Withdrawal in the
report period

2. Usage in the report
period

(VI)Others
IV. Balance at the end
                           496,782,303.00   382,444,482.45        54,736,482.14 187,593,848.61          1,121,557,116.20
of the report period




                                                             77
                                                                 深圳市深粮控股股份有限公司 2019 年半年度报告全文


III. Basic situation of Company
1. The history of the company
Shenzhen Cereals Holdings Co., Ltd. (formerly the Shenzhen Shenbao Industrial Co., Ltd., hereinafter referred to
as “Company” or “the Company” ), formerly named Shenzhen Shenbao Canned Food Company, obtained
approval (Document (1991) No.978) from Shenzhen Municipal People’s Government to change to the present
name as on 1 August 1991.Then with the approval (Document (1991)No.126) from People’s Bank of China, the
Company began to list on Shenzhen Stock Exchange. The certificate for uniform social credit code:
91440300192180754J


The Company initially issued 107,312,935 shares in the stock exchange. In 1992, one bonus share was dispatched
for each 10 shares held by its shareholders, thus totally 10,731,290 shares were increased. In 1993, one bonus
share and one allotted share were dispatched for each 10 shares held by its shareholders, thus totally 20,878,845
shares were increased. Subsequently, one bonus share was dispatched for each 10 shares held by shareholders
upon the basis of total share capital as at the end of 1996, and capitalizing of capital reserves was carried out at
one to ten basis, thus totally 27,784,614 shares were increased. In 2001, based on the total share capital as at the
end of 1999, three shares were allotted for each 10 shares held by shareholders, and totally 15,215,404 shares
were allotted. The registered capital of the Company amounts to 181, 923,088 yuan.


On 22 June 2011, the Company privately offering 68,977,066 shares of RMB ordinary share (A share) to target
investors with issuing price of 8.70 yuan each while book value of 1.00 yuan. Total monetary capital
600,100,474.20 yuan was raised. Change procedures of industrial and commerce has completed on 12 July 2011.
Register capital of the Company changed as 250,900,154.00 yuan.


On 9 April 2014, the equity allocation plan was deliberated and approved by Annual General Meeting of 2013.
Based on 250,900,154 shares dated 31st December 2013, increase 2 shares by each 10 shares transferring to all
shareholders. Share capital increased to 301,080,184 shares after transferring.


On 17 May 2016, the equity allocation plan was deliberated and approved by Annual General Meeting of 2015.
Based on 301,080,184 shares dated 31st December 2015, increase 5 shares by each 10 shares transferring to all
shareholders. Share capital increased to 451,620,276 shares after transferring.


On 15 May 2017, the equity allocation plan was deliberated and approved by Annual General Meeting of 2016.
Based on 451,620,276 shares dated 31st December 2016, distributed 0.50 Yuan (tax included) for every 10 shares
held by all shareholders with one bonus shares (tax included), no capitalization from public reserves. Shares
capital increased to 496,782,303 shares after bonus stock distributed.


On October 15, 2018, the Company received the “Reply on the Approval of Shenzhen Shenbao Industrial Co., Ltd.
to Issue Shares to Shenzhen Fude State-owned Capital Operation Co., Ltd. to Purchase Assets” (ZJXK [2018] No.

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1610) from the China Securities Regulatory Commission, agreed the Company to issue 655,752,951 shares of
restricted ordinary shares to Shenzhen Fude State-owned Capital Operation Co., Ltd. (hereinafter referred to as
Fude Capital) to acquire 100.00% equity of Shenzhen Cereals Group Co., Ltd. held by Fude Capital.


On October 18, 2018, 100.00% equity of Shenzhen Cereals Group Co., Ltd. completed the transfer procedures and
related industrial and commercial change registration. After the completion of this major asset reorganization, the
Company’s share capital increased to 1,152,535,254 shares. This share capital change was examined by Jonten
Certified Public Accountant (Limited Liability Partnership) who issued the capital verification report Jonten [2018]
YZ No. 90066 on October 22, 2018.


End as 30 June 2019, the total share capital of the company was 1,152,535,254 shares, registered capital amounted
to 1,152,535,254.00 yuan.


Register address of the Company: 8/F, Tower B, No.4 Building, Software Industry Base, South District, Science &
Technology Park, Xuefu Rd., Yuehai Street, Nanshan District, Shenzhen


On 30 January 2019, the Company hold a Second Extraordinary Shareholders Meeting of 2019 to deliberated and
approved the proposal of “Change the Name and Stock Short Name of the Company ”, agreed to change the name
of the Company from “Shenzhen Shenbao Industrial Co., Ltd.” to “Shenzhen Cereals Holdings Co., Ltd.”, stock
short name change from “Shen Shenbao A, Shen Shenbao B” to “SZCH, Shenliang B”. On 18 February 2019,
registration procedures on industrial and commercial has completed and obtained the new Business License from
Shenzhen Market Supervision and Administration.



(ii) Business nature and main operation activities
The Company belongs to the grain, oil food and beverage industry.


Main products of the Company including grain and oil trading and processing, grain and oil reserve service,
military food supplies, food beverage of tea and tea products.


Business scope: production of tea, tea products, extract of tea and natural plant, canned food, beverage and native
products ( business license for the production place should apply separately); technology development and
technology service of tea, plant products, soft beverage and foods; info tech development and supporting service;
on-line trading; investment, operation, management and development of tea plantation; investment in industrial
projects (apply separately for detail projects); domestic trading(excluding special sales, specific control and
exclusive commodity); import and export business; engaged in real estate development and operation in the land
legally obtained; lease and sales of the self-owned property and property management.” (as for the projects
subject to examination and approval regulated by the state laws, administrative regulations and state council,
approval should be obtained before operation). Business in license: wholesale of prepackaged food (excluding
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reheating prepackaged food) (in non-physical way).


In the reporting period, under the way of issuing shares to Fude Capital for purchasing 100 percent equity of
Shenzhen Cereals Group Co., Ltd, on basis of production, research and development and sales of food raw
materials (ingredients) centered on intensive processing of tea and natural plants, main business of the Company
increased grain and oil reserve, grain & oil trading, circulation of grain and oil such as grain and oil processing,
and grain and oil reserve service. Therefore, on 18 February 2019, relevant business scope of the Company was
changed as: general operation items: acquisition and sales of grain & oil, grain and oil reserves; management and
processing of grain & oil and their products; production of tea, tea products, extract of tea and natural plant,
canned food, beverage and native products ( business license for the production place should apply separately);
management and processing of feed (outsourcing); grain and oil logistics, feed logistics, investment, operation and
development for the projects of tea garden; sales of feed and tea; storage service; grain distribution services;
modern grain supply chain service; technical development and services of grain and oil, tea, plant products, soft
drinks and food; E-business and information construction, IT development and supporting services; investment in
industrial projects (apply separately for detail projects); domestic trading; import and export business; engaged in
real estate development and operation in the land legally obtained; development, operation, leasing and
management of the owned property; property management; providing management services for hotels. (as for
projects mentioned above that are required to be submitted for examination and approval by the laws,
administrative regulations and decision of the state council, approval and examination shall be required before
operated). Business in license: wholesale of prepackaged food (excluding reheating prepackaged food) (in
non-physical way); information services business (internet information services business only); general freight
transportation and professional transportation (refrigeration and fresh-keeping)


(iii) Report approval for the financial statement
The statement has been approved by BOD of the company for reporting on 23 August 2019.


Up to 30th June 2019, the subsidiaries included in consolidate financial statement, mainly including:

                     Subsidiary                           Type          Level       Shareholding ratio (%) Voting rights ratio (%)

Shenzhen Shenbao Huacheng Science and Technology       Wholly-owned   First grade            100                     100
Co.,Ltd(hereinafter referred to as Shenbao Huacheng)    subsidiary
Ju Fang Yong Tea Industry Co., Ltd. in Wuyuan          Wholly-owned   First grade            100                     100
County(hereinafter referred to as Wuyuan Ju Fang        subsidiary
Yong)
Shenzhen Shenbao Sanjing Food & Beverage               Wholly-owned   First grade            100                     100
Development Co., Ltd(hereinafter referred to as         subsidiary
Shenbao Sanjing)
Huizhou Shenbao Technology Co., Ltd(hereinafter        Wholly-owned   First grade            100                     100
referred to as Huizhou Shenbao Technology )             subsidiary
Shenzhen Shenbao Property Management Co.,              Wholly-owned   First grade            100                     100


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Ltd.(hereinafter referred to as Shenbao Property)        subsidiary
Shenzhen Shenbao Industrial & Trading Co.,              Wholly-owned   First grade      100                100
Ltd.(hereinafter referred to as Shenbao Industrial &     subsidiary
Trading)
Hangzhou Ju Fang Yong Holding Co., Ltd(hereinafter      Wholly-owned   First grade      100                100
referred to as Hangzhou Ju Fang Yong)                    subsidiary
Shenzhen Shenbao Technology Center Co.,                 Wholly-owned   First grade      100                100
Ltd(hereinafter referred to as Shenbao Technology        subsidiary
Center )
Shenzhen Shenshenbao Investment Co., Ltd.               Wholly-owned   First grade      100                100
(hereinafter referred to as Shenshenbao Investment )     subsidiary
Yunnan Shenbao Pu’er Tea Supply Chain                  Wholly-owned   First grade      100                100
Management Co., Ltd(hereinafter referred to as           subsidiary
Yunnan Supply Chain)
Huizhou Shenbao Food Co., Ltd(hereinafter referred      Wholly-owned   First grade      100                100
to as Huizhou Shenbao Food)                              subsidiary
Yunnan Pu’er Tea Trading Center Co., Ltd(hereinafter    Controlling   First grade      55                  55
referred to as Pu’er Tea Trading Center)                subsidiary
Mount Wuyi Shenbao Rock Tea Co., Ltd. (hereinafter      Wholly-owned    Second          100                100
referred to as Shenbao Rock Tea )                        subsidiary      grade
Hangzhou Fuhaitang Tea Ecological Technology Co.,       Wholly-owned    Second          100                100
Ltd(hereinafter referred to as Fuhaitang Ecological)     subsidiary      grade
Hangzhou Chunshi Network Technology                     Wholly-owned    Second          100                100
Co.,Ltd.(hereinafter referred to as Chunshi Network)     subsidiary      grade
Shenzhen Shenshenbao Tea Culture Management Co.,        Wholly-owned    Second          100                100
Ltd.(hereinafter referred to as   Shenshenbao Tea        subsidiary      grade
Culture)
Hangzhou Ju Fang Yong Trading Co., Ltd.                  Controlling    Second          60                  60
(hereinafter referred to as Ju Fang Yong Trading)        subsidiary      grade
Shenzhen Shenbao Tea-Shop Co., Ltd. (hereinafter        Wholly-owned    Second          100                100
referred to as Shenbao Tea-Shop)                         subsidiary      grade
Hangzhou Fuhaitang Catering Management chain Co.,       Wholly-owned    Second          100                100
Ltd(hereinafter referred to as Fuhaitang Catering)       subsidiary      grade
Shenzhen Cereals Group Co., Ltd(hereinafter referred    Wholly-owned   First grade      100                100
to as SZCG)                                              subsidiary
Shenzhen Flour Co., Ltd(hereinafter referred to as      Wholly-owned    Second          100                100
Shenzhen Flour)                                          subsidiary      grade
Shenzhen Hualian Grain & Oil Trade Co., ltd.            Wholly-owned    Second          100                100
(hereinafter referred to as Hualian Grain & oil          subsidiary      grade
trading)
Hainan Haitian Aquatic Feed Co., Ltd(hereinafter        Wholly-owned    Second          100                100
referred to as Hainan Haitian )                          subsidiary      grade

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Shenzhen Shenliang Quality Inspection Co., Ltd.          Wholly-owned    Second          100                100
(hereinafter referred to as Shenliang Quality             subsidiary      grade
Inspection)
Shenzhen Shenliang Doximi Business Co.,                  Wholly-owned    Second          100                100
Ltd.(hereinafter referred to as   Shenliang Doximi)       subsidiary      grade
Shenzhen Shenliang Cold-Chain Logistic Co.,              Wholly-owned    Second          100                100
Ltd(hereinafter referred to as Shenliang Cold-Chain       subsidiary      grade
Logistic )
Shenzhen Shenliang Big Kitchen Food Supply Chain          Controlling    Second          70                  70
Co., Ltd(hereinafter referred to as Shenliang Big         subsidiary      grade
Kitchen)
Shenzhen Shenliang Real Estate Development Co.,          Wholly-owned    Second          100                100
Ltd. (hereinafter referred to as Shenliang Real Estate    subsidiary      grade
Development)
Shenzhen Shenliang Property Management Co., Ltd.         Wholly-owned     Third          100                100
(hereinafter referred to as Shenliang Property )          subsidiary      grade
Shenliang Storage (Yingkou) Co., Ltd(hereinafter         Wholly-owned     Third          100                100
referred to as Shenliang Storage (Yingkou) ) )            subsidiary      grade
Dongguan Shenliang Logistics Co., Ltd.(hereinafter        Controlling    Second          51                  51
referred to as Dongguan Shenliang Logistics )             subsidiary      grade
Dongguan International Food Industrial Park               Controlling     Third          51                  51
Development Co., Ltd.(hereinafter referred to as          subsidiary      grade
Dongguan Food Industrial Park)
Dongguan Shenliang Oil & Food Trade Co., Ltd.             Controlling     Third          51                  51
(hereinafter referred to as   Dongguan Food Trade)        subsidiary      grade
Dongguan Jinying Biology Tech. Co., Ltd.                  Controlling     Third          51                  51
(hereinafter referred to as Dongguan Jinying )            subsidiary      grade
Shuangyashan Shenliang Zhongxin Cereals Base Co.,         Controlling    Second          51                  51
Ltd.(hereinafter referred to as Shuangyashan              subsidiary      grade
Shenliang Zhongxin )
Heilongjiang Hongxinglong Nongken Shenxin Cereals         Controlling     Third          51                  51
Industrial Park Co., ltd.                                 subsidiary      grade
(hereinafter referred to as Hongxinglong Nongken
Industrial Park)



Change of the consolidate scope found more in Note VIII. Change of consolidate scope and Note IX. Equity in
other entity




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IV. Basis of preparation of financial statements

1. Basis of preparation


Based on going concern, and according to actual occurrence of transactions and issues, the Company prepared the
financial statement in line with the Accounting Standards for Business Enterprise -Basic Standard issued by
Ministry of Finance and specific accounting principle as well as the application guidance for the accounting
principles for enterprise, interpretation to the accounting principles for enterprise and other related requirements
(hereinafter referred to as Enterprise Accounting Principles), combining the Information Disclosure Preparation
Rules for Company Public Issuing Securities No.15-General Rules for Financial Report (amended in 2014) of the
CSRC



2. Going concern


The Company was evaluated on continued viability of 12 months for the reporting period and found to have no
significant doubt. Accordingly, the financial statements have been prepared on the basis of going concern
assumptions.




V. Major accounting policy, accounting estimation

Specific accounting policies and estimation attention:
(i) Implementation of the Accounting Standards for Business Enterprise No. 22- Recognition and Measurement of
Financial Instruments, Accounting Standards for Business Enterprise No. 23- Transfer of Financial Assets,
Accounting Standards for Business Enterprise No. 24- Hedge Accounting and Accounting Standards for Business
Enterprise No. 37- Presentation of Financial Instruments (2017 Revised), and in 2017, the Ministry of Finance
revised the Accounting Standards for Business Enterprise No. 22- Recognition and Measurement of Financial
Instruments, Accounting Standards for Business Enterprise No. 23- Transfer of Financial Assets, Accounting
Standards for Business Enterprise No. 24- Hedge Accounting and Accounting Standards for Business Enterprise
No. 37- Presentation of Financial Instruments. The revised standards stipulate that for financial instruments that
have not been derecognized on the first implementation date, if the previous recognition and measurement are
inconsistent with the requirements of the revised standards, they shall be retrospectively adjusted. If the data
relating to the comparative financial statements in prior period are inconsistent with the requirements of the
revised standards, no adjustment is required. The Company will adjust the retained earnings and other
comprehensive income at the beginning of the year due to the cumulative impact of retrospective adjustment, the
main impacts of the implementation of the above standards are as follows: (1) Due to the change in the name of
the report item, “the financial assets measured at fair value and whose changes are included in the current profit

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and loss” are reclassified as “transactional financial assets”, financial assets measured at fair value and whose
changes are included in the current profit and loss have a decrease of 1,124,927.96 yuan; and the trading financial
assets have an increase of 1,124,927.96 yuan; (2) the available-for-sale equity instrument investments are
reclassified as the “financial assets measured at fair value and whose changes are included in the current profit and
loss”. Available-for-sale financial assets have a decrease of 57,500.00 yuan; other non-current financial assets
have an increase of 57,500.00 yuan.


(ii) Implementation of the Ministry of Finance issued the Notice on Revision and Issuance of 2019 Financial
Statement Format for General Corporate


On 30 April 2019, the Ministry of Finance issued the Notice on Revision and Issuance of 2019 Financial
Statement Format for General Corporate (Cai Kuai [2019] No.6), format of the financial statement has been
revised. Main impact for implementation of the above mentioned regulations: in balance sheet: the “Note
receivable and account receivable” divided into “Note receivable” and “Account receivable”; “Note payable and
account payable” divided into “Note payable” and “Account payable”; the comparison data are adjusted
accordingly. “Note receivable and account receivable” divided into “Note receivable” and “Account receivable”,
current amount of “Note receivable” was 350,756.64 Yuan while 1,027,635.04 Yuan at last period; the “Account
receivable” has617,831,167.71Yuan in the period while 473,646,886.64 Yuan at last period;        “Note payable and
account payable” divided into “Note payable” and “Account payable”, current amount of “Account payable” was
171,201,542.03 Yuan while 472,738,283.80 Yuan at last period.




1. Statement for observation of Accounting Standard for Enterprise


The financial statements prepared by the Company are in accordance to requirements of Accounting Standard for
Enterprise, which truly and completely reflect the information related to financial position, operational results and
cash flow of the Company.



2. Accounting period


Calendar year is the accounting period for the Company, that is falls to the range starting from 1 January to 31
December.



3. Operating cycle


Operating cycle of the Company was 12 months


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4. Standard currency


The Company and its subsidiaries take RMB as the standard currency for bookkeeping.



5. Accounting treatment for business combinations under the same control and those not under the same
control


Business combination under the same control: The assets and liabilities the Company acquired in a business
combination shall be measured in accordance with book value of assets, liabilities (including the ultimate
controlling party of goodwill acquired by the merging parties and the formation of) stated in combined financial
report of the ultimate controlling party on the merger date. The net book value of assets and the payment of the
merger consideration in the merger book value (or nominal value of shares issued) shall be adjusted in the share
premium of reserve capital. the share premium in capital reserve is not enough for deducting, retained earnings .


Business combination not under the same control: Assets paid and liabilities taken for business combination on
the acquisition date shall be measured at fair value. The difference between the fair value and book value is
recognized in profit or loss. Goodwill is realized by the Company as for the difference between the combination
cost and the fair value of the recognizable net assets of the acquiree acquired by acquirer in such business
combination. In case that the above cost is less than the above fair value even with re-review, then the difference
shall be recorded in current gains and losses.


Audit, legal, consulting services, and other intermediary costs and other expenses directly related to the business
combination, shall be included in current profit or loss in the event; any transaction fee for issuing equity
securities for business combination shall be deducted from equity.



6. Methods for preparation of consolidated financial statements


(i) Consolidated scope
The consolidation scope of the consolidated financial statements of the Company is fixed on the basis of control,
and all subsidiaries(including the divisible part of the invested party that control by the Company) have been
consolidated.
(ii)Consolidated procedure




The Company edits the consolidated financial statements based on its own financial statements and the
subsidiaries’, as well as other relevant information. The consolidated financial statements hold the enterprise
group as a whole accounting entity. It is recognized in accordance with relevant Accounting Standards,
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measurement and presentation requirements. Uniform accounting policies reflect the overall financial position of
the Group's business, operating results and cash flow.


The accounting policies and accounting period adopted by the subsidiaries taken into account of the consolidation
scope are in line with the Company. If it is not the same as the Company, necessary adjustments will be made
when preparing consolidated financial statements according to the accounting policy and accounting period of the
Company. For the subsidiaries acquired through business combination under uncommon control, financial
statements shall be adjusted based on the fair value of the identifiable net assets on acquiring date. For the
subsidiaries acquired through business combination under common control, its assets and liabilities (including
goodwill formed from ultimate controlling party acquiring the subsidiary to) shall be adjusted based on the book
value in the financial statements of the ultimate controlling party.


Subsidiary's equity, current net profits or losses and current comprehensive income belonging to minority
shareholders shall be listed respectively under item of owners’ equity in the consolidated balance sheet, item of
net profit in profit sheet and item of total comprehensive income. Current loss minority shareholders of a
subsidiary exceed the minority shareholders in the subsidiary's opening owners' equity share and the formation of
balance, offset against minority interests.


(1) Increase of subsidiary or business
During the reporting period, the merger of the enterprises under the same control results in additional subsidiaries
or business, then adjust the opening amount of consolidated balance sheet; income, expenses and profit of the
subsidiaries or business from beginning to the end of the reporting shall be included in the consolidated profit
statement; cash flows of the subsidiaries or business from beginning to the end of reporting period shall be
included into the consolidated cash flow statement. And relevant comparative items of comparable statement shall
be adjusted since reporting entity is controlled by the ultimate controller.


If additional investment and other reasons can lead investee to be controlled under the same control, all parties
shall be adjusted at the beginning when the ultimate controlling party starts control. Equity investments made
before obtaining controlling right, relevant gains and losses and other comprehensive income as well as other
changes in net assets confirmed during the latter date between point obtaining original equity and merger and
mergered under the same control day to the combined day, shall be offset against the retained earnings or profit or
loss of the comparative reporting period.


During the reporting period, opening amount of consolidated balance sheet shall not be adjusted since enterprise
under different control combine or increase holding of subsidiary or business; the income, expense and profit of
the subsidiaries or business from the acquisition date to the end of reporting period shall be included in the
consolidated profit statement; while cash flows shall be included into the consolidated cash flow statement.



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Equity held from investee before acquisition date shall be measured at fair value of acquisition date if additional
investment and other reasons can lead investee to be controlled under the same control. Difference between the
fair value and the book value is recognized as investment income. other comprehensive income and other owners'
equity except for net profit or loss, other comprehensive income and the distribution of profits related to equity
held from investee before acquisition date, as well as relevant other comprehensive income associated with all
other by changes in equity shall be included in current investment income, except for other comprehensive income
arising from change of net assets or net liabilities redefined by investee.


(2) Disposal of subsidiaries or business
① The general approach
During the reporting period, the Company carry out disposal of subsidiaries or business, revenue, expense and
profit of the subsidiary or business included in the consolidated profit statement from the beginning to the disposal
date; while the cash flow into cash flow table.


If losing controlling right to investee due to disposal of partial equity, the remaining equity after the disposal shall
be re-measured at fair value at the date when control is lost. Price of equity disposal plus fair value of the
remaining equity, then subtracting net assets held from the former subsidiary from the acquisition date or
combination date initially measured in accordance with original stake and goodwill, the difference shall be
included in investment income of the period losing controlling right. other comprehensive income and other
owners' equity except for net profit or loss, other comprehensive income and the distribution of profits related to
equity held from investee before acquisition date, as well as relevant other comprehensive income associated with
all other by changes in equity shall be included in current investment income, except for other comprehensive
income arising from change of net assets or net liabilities redefined by investee.


If the Company’s shareholding ratio declines and thus loses the control power due to other investors’ capital
increase in the subsidiaries, accounting treatment shall be conducted in accordance with the above principles.


② Step disposal of subsidiaries
As multiple transactions over disposal of the subsidiary's equity lead to loss of controlling right, if the terms of the
transaction, situation and economic impact subject to one or above of the following conditions, usually it indicates
repeated transactions should be accounted for as a package deal:


    i. These transactions are made considering at the same time or in the case of mutual impact;
    ii. These transactions only reach a complete business results when as a whole;
    iii. A transaction occurs depending on the occurrence of at least one other transaction;
    iv. Single transaction is not economical, but considered together with other transactions it is economical.
If disposal of equity in subsidiaries lead the loss of control and the transactions can be seen as a package deal, the
Company will take accounting treatment of the transaction; however, before the loss of control the difference

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between the disposal price and the corresponding net assets of the subsidiary, recognized as other comprehensive
income in the consolidated financial statements, into current profit and loss at current period when losing
controlling right.


If disposal of equity in subsidiaries lead the loss of control and the transactions doesn’t form a package deal,
equity held from subsidiary shall be accounted in accordance with relevant rules before losing controlling right,
while in accordance with general accounting treatment when losing controlling right.


(3) Purchase of a minority stake in the subsidiary
Long-term equity investment of the Company for the purchase of minority interests in accordance with the newly
acquired stake in the new calculation shall be entitled to the difference between the net assets from the acquisition
date (or combination date) initially measured between the consolidated balance sheet adjustment capital balance
of the share premium in the capital reserve share premium insufficient, any excess is adjusted to retained earnings.


(4) Disposal of equity in subsidiary without losing control
Disposal price and disposal of long-term equity investment without a loss of control due to partial disposal of
subsidiaries and long-term equity investment made between the relative net assets from the purchase date or the
date of merger were initially measured at the difference between the subsidiary shall enjoy, the consolidated
balance sheet adjustment in the balance of the share premium, capital balance of the share premium insufficient,
any excess is adjusted to retained earnings.


7. Classification of joint venture arrangement and accounting for joint operations


Joint venture arrangements are divided into joint operations and joint ventures.
When the Company is a joint venture party of a joint venture arrangement and enjoys the relevant assets of the
arrangement and bears the liabilities related to the arrangement, it is a joint operation.


The Company recognizes its proportion of interests in joint operation as related to the Company, and accounts for
under relevant business accounting principles:
(1) To recognize separately-held assets and jointly-held assets under its proportion;
(2) To recognize separately-assumed liabilities and jointly-assumed liabilities under its proportion;
(3) To recognize revenue from disposal of the output which the Company is entitled to under the proportion;
(4) To recognize revenue from disposal of the output under the proportion;
(5) To recognize separately occurred expenses, and to recognize expenses occurred for joint operations under its
proportion.




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8. Recognition standards for cash and cash equivalents


When preparing cash flow statement, the Company recognized the stock cash and deposits available for payment
at any time as cash, and investments featuring with the following four characters at the same time as cash
equivalents: short term (expire within 3 months commencing from purchase day), active liquidity, easy to convert
to already-known cash, and small value change risks.



9. Foreign currency business and conversion of foreign currency statement



(i) Foreign currency business
The foreign currency business uses the spot exchange rate on the transaction date as the conversion rate to convert
the foreign currency amount into RMB.
The balance of foreign currency monetary items on the balance sheet date is converted at the spot exchange rate on
the balance sheet date. The resulting exchange differences, except that the balance of exchange generated from the
foreign currency special borrowings related to the assets whose acquisition and construction are eligible for
capitalization is disposed in accordance with the principle of borrowing costs capitalization, are included in the
current profit and loss.
(ii) Conversion of foreign currency financial statements
Assets and liabilities in the balance sheet are converted at the spot exchange rate on the balance sheet date; except
for the “undistributed profit” item, other items of the owner's equity items are converted at the spot exchange rate at
the time of occurrence. Income and expense items in the income statement are converted at the spot exchange rate
on the transaction date.
When disposing an overseas operation, the translation difference of the foreign currency financial statements related
to the overseas operation is transferred from the owner's equity items to the disposal of the current profit and loss.



10. Financial instruments


Financial instruments include financial assets, financial liabilities and equity instruments.
(i) Categories of financial instruments
Accounting policy applicable since 1st Jan. 2019
According to the business model of managing financial assets and the contractual cash flow characteristics of
financial assets, at initial recognition, the Company classifies the financial assets into the financial assets
measured at amortized cost, the financial assets(debt instrument) measured at fair value and whose changes are
included in other comprehensive income, and the financial assets measured at fair value and whose changes are
included in current gain or loss.



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The financial assets of which the business model aims at the collection of contractual cash flow and the contractual
cash flow is only the payment of the principal and the interest based on the outstanding principal amount are
classified as financial assets measured at amortized cost. The financial assets of which the business model aims not
only at the collection of contractual cash flow but also at selling the financial assets and the contractual cash flow is
only the payment of the principal and the interest based on the outstanding principal amount are classified as
financial assets measured at fair value and whose changes are included in other comprehensive income (debt
instruments). Other financial assets other than this are classified as financial assets measured at fair value and whose
changes are included in current profit and loss.
For non-trading equity instrument investment, the Company determines whether it is designated as a financial asset
(equity instrument) measured at fair value and whose changes are included in other comprehensive income at the
initial recognition. In the initial recognition, in order to eliminate or significantly reduce accounting mismatches,
financial assets can be designated as financial assets measured at fair value and whose changes are included in
current profit and loss.
In the initial recognition, financial liabilities are classified as the financial liabilities measured at fair value and
whose changes are included in current profit and loss and the financial liabilities measured at amortized cost.
Financial liabilities that meet one of the following conditions can be designated as financial liabilities measured at
fair value and whose changes are included in current profit and loss in the initial measurement:
(1) The designation can eliminate or significantly reduce accounting mismatches.
(2) According to the enterprise risk management or investment strategy specified in the official written document,
manage and make performance evaluation of the financial liability portfolio or financial assets and financial
liability portfolio based on fair value, and report to the key management personnel based on this.
(3) The financial liability includes embedded derivatives that need to be separately split.


Accounting policy applicable before 1st Jan. 2019
At initial recognition, financial assets and financial liability are classified as: financial assets or liabilities
measured at fair value and with its variation reckoned into current gains/losses, including the            transactional
financial assets or financial liabilities and financial assets or liabilities directly designated measured at fair value
and with its variation reckoned into current gains/losses; held-to-maturity investment; account receivable;
financial assets available-for-sale; other financial liability and so on.
(ii) Recognition and measurement for financial instrument
Accounting policy applicable since 1st Jan. 2019


(1) Financial assets measured at amortized cost
Financial assets measured at amortized cost include notes receivable, accounts receivable, other receivables,
long-term receivables, and debt investment, which are initially measured at fair value, and related transaction costs
are included in the initial recognition amount. The accounts receivable not including major financing components
and the accounts receivable that the Company decides not to consider the financing component of not more than one
year are initially measured at the contract transaction price.
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Interest calculated by the effective interest method during the holding period is included in the current profit and
loss.
When recovering or disposing, the difference between the price obtained and the book value of the financial asset is
included in the current profit and loss.
(2) Financial assets (debt instruments) measured at fair value and whose changes are included in other
comprehensive income
Financial assets (debt instruments) measured at fair value and whose changes are included in other comprehensive
income, including receivables financing, other debt investment, etc., are initially measured at fair value, and related
transaction expenses are included in the initial recognition amount. The financial assets are subsequently measured
at fair value, the changes in fair value are included in other comprehensive income except for interest, impairment
losses or gains and exchange gains and losses calculated by using the effective interest method.
When a financial asset is derecognized, the accumulated gain or loss previously included in other comprehensive
income is transferred from other comprehensive income and included in current profit and loss.
(3) Financial assets (equity instruments) measured at fair value and whose changes are included in other
comprehensive income
Financial assets (equity instruments) measured at fair value and whose changes are included in other comprehensive
income, including other equity instruments, etc., are initially measured at fair value, and related transaction
expenses are included in the initially recognised amount. The financial assets are subsequently measured at fair
value, and changes in fair value are included in other comprehensive income. The dividends obtained are included in
the current profits and losses.
When a financial asset is derecognized, the accumulated gain or loss previously included in other comprehensive
income is transferred from other comprehensive income and included in retained earnings.
(4) Financial assets measured at fair value and whose changes are included in current profit and loss
Financial assets measured at fair value and whose changes are included in current profit and loss, including
transactional financial assets, derivative financial assets and other non-current financial assets, etc., are initially
measured at fair value, and related transaction expenses are included in the initial recognition amount. The financial
assets are subsequently measured at fair value, and changes in fair value are recognised in current profit and loss.
When a financial asset is derecognized, the difference between its fair value and the initially recorded amount is
recognized as investment income, and the gains and losses from changes in fair value are adjusted.
(5) Financial liabilities measured at fair value and whose changes are included in current profit and loss
Financial liabilities measured at fair value and whose changes are included in current profit and loss, including
transaction financial liabilities, derivative financial liabilities, etc., are initially measured at fair value, and related
transaction expenses are included in current profit and loss. The financial liabilities are subsequently measured at
fair value, and changes in fair value are included in current profit and loss.
When a financial liability is derecognized, the difference between its fair value and the initially recorded amount is
recognized as investment income, and the gains and losses from changes in fair value are adjusted.
(6) Financial liabilities measured at amortized cost
Financial liabilities measured at amortized cost, including short-term borrowings, bills payable, accounts payable,

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other payables, long-term borrowings, bonds payable, and long-term payables, are initially measured at fair value,
and related transaction expenses are included in the initial recognition amount.
Interest calculated by the effective interest method during the holding period is included in the current profit and
loss.
When a financial liability is derecognized, the difference between the consideration paid and the book value of the
financial liability is included in current profit and loss.


Accounting policy applicable before January 1, 2019
(1) Financial assets (financial liabilities) measured at fair value and whose changes are included in current profit
and loss
At the time of acquisition, the fair value (deducting the cash dividends that have been declared but not yet paid or the
bond interest whose interest payment has been due but not yet received) is taken as the initial recognition amount,
and the related transaction expenses are included in the current profit and loss.
During the holding period, the interest or cash dividends are recognized as investment income, and the changes in
fair value are included in the current profit and loss at the end of the period.
At the time of disposal, the difference between the fair value and the initial recorded amount is recognized as
investment income, and the gains and losses from changes in fair value are adjusted.
(2) Held-to-maturity investments
At the time of acquisition, the sum of the fair value (deducting the bond interest whose interest payment has been
due but not yet received) and the related transaction expenses is taken as the initial recognition amount.
During the holding period, the interest income is calculated and recognized based on the amortized cost and the
actual interest rate, and is included in the investment income. The effective interest rate is determined at the time of
acquisition and remains unchanged during the expected duration or for a shorter period of time applicable.
At the time of disposal, the difference between the purchase price and the book value of the investment is included
in the investment income.




(3) Account receivable


The contract price charged to the buyers shall be recognized as initial value for those account receivables which
mainly comprise the receivable creditor’s right caused by the sale of goods and providing of labor service to
external customers by the Company, and receivables in other companies excluding debt instruments priced in
active markets, includes but not limited to account receivables, other account receivables and so on. If
characterized as of financing nature, the initial recognition shall be priced at the present value.


Upon disposal, the difference between the sale value and the book value of the receivables shall be accounted into
current profit or loss on its recovery or disposal.
(4) Available-for-sale financial assets

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At the time of acquisition, the sum of the fair value (deducting the cash dividends that have been declared but not yet
paid or the bond interest whose interest payment has been due but not yet received) and the related transaction
expenses are taken as the initial recognition amount.
During the holding period, the interest or cash dividends obtained are recognized as investment income. At the end
of the period, it is measured at fair value and the changes in fair value are included in other comprehensive income.
However, an equity instrument investment that is not quoted in an active market and whose fair value cannot be
reliably measured and the derivative financial assets that are linked to the equity instrument and that are required to
be settled through the delivery of the equity instrument are measured at cost.
At the time of disposal, the difference between the price obtained and the book value of the financial asset is
included in the investment gains and losses. At the same time, the amount of the accumulated amount of changes in
fair value originally and directly included in other comprehensive income being corresponding to the disposal
portion is transferred out and included in current profit and loss.


 (5) Other financial liabilities
Initial recognition amount is determined at the sum of fair value and relevant transaction fee. Subsequent
measurement is conducted at amortized cost.
(iii) Confirmation evidence and measurement methods for transfer of financial assets


    When transfer of financial assets occurs, the Company shall stop recognition of such financial assets if all
    risks and remunerations related to ownership of such financial assets have almost been transferred to the
    receiver; while shall continue to recognize such financial assets if all risks and remunerations related to
    ownership of such financial assets have almost been retained.


When judging whether or not the aforesaid terminal recognition condition for financial assets is arrived at for
transfer of financial assets, the Company generally adopts the principle that substance overweighs format. The
Company divides such transfer into entire transfer and part transfer. As for the entire transfer meeting condition
for discontinued recognition, balance between the following two items is recorded in current gains and losses:
(1) Carrying value of financial assets in transfer;
(2) Aggregate of the consideration received from transfer and accumulative movements of fair value originally
recorded in owners’ equity directly (applicable when financial assets involved in transfer belong to financial assets
available for sale).


As for the part transfer meeting condition for discontinued recognition, entire carrying value of financial assets in
transfer is shared by discontinued recognition part and continued recognition part, in light of their respective fair
value. Balance between the following two items is recorded in current gains and losses:
(1) Carrying value of discontinued recognition part;




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(2) Aggregate of the consideration of discontinued recognition part and amount of such part attributable to
accumulative movements of fair value originally recorded in owners’ equity directly (applicable when financial
assets involved in transfer belong to financial assets available for sale).


Financial assets are still subject to recognition if transfer of such assets doesn’t satisfy the condition for
discontinued recognition. And consideration received is recognized as financial liability.
(iv) De-recognition condition for financial liability


As for the financial liabilities with its whole or part present obligations released, the company shall de-realize
such financial liabilities or part of it. if the company enters into agreement with its creditor to substitute for the
existing financial liabilities by means of assuming new financial liabilities, then the company shall de-realize the
existing financial liabilities and realize the new financial liabilities provided that the contract clauses of the new
and the existing financial liabilities are different in substance.


If the company makes substantial amendment to the whole or part contract clauses of the existing financial
liabilities, it shall de-realize the existing financial liabilities or part of it. Meanwhile, the financial liabilities with
amendment to its clauses shall be realized as new financial liabilities.


In case of derecognizing of financial liabilities in whole or part, the difference between the carrying value of such
de-realized financial liabilities and consideration paid (including the non-cash assets exchanged or new financial
liabilities assumed) shall be recorded in current gains and losses.


In case that the company repurchases part of financial liabilities, based on the comparative fair value of the
continuing recognition part and the derecognizing part, the company shall allocate the carrying value of the
financial liabilities in whole on the repurchase date. Difference between the carrying value allocated to the
derecognizing part and the consideration paid (including the non-cash assets exchanged or new financial liabilities
assumed) shall be recorded in current gains and losses.
(v) Determination method for fair value of financial assets and financial liabilities
As for the financial instrument with an active market, the fair value is determined by the offer of the active market;
there is no active market for a financial instrument, the valuation techniques to determine its fair value. At the
time of valuation, the Company adopted applicable in the present case and there is enough available data and
other information technology to support valuation, assets or liabilities of feature selection and market participants
in the trading of the underlying asset or liability considered consistent input value and priority as the relevant
observable inputs. Where relevant observable inputs can not get or do not get as far as practicable, the use of
unobservable inputs.


(vi) Testing of the financial assets (account receivable excluded) impairment and accounting treatment



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Accounting policy applicable from January 1, 2019
The Company considers all reasonable and evidence-based information, including forward-looking information,
and estimates the expected credit losses of the financial assets measured at amortized cost and the financial assets
(debt instruments) measured at fair value and whose changes are included in other comprehensive income on a
single or combination mode.
The measurement of expected credit losses depends on whether the credit risks of financial assets have increased
significantly since the initial recognition.
If the credit risk of the financial instrument has increased significantly since the initial recognition, the Company
measures its loss provision based on the amount equivalent to the expected credit losses for the entire duration of the
financial instrument; if the credit risk of the financial instrument has not increased significantly since the initial
recognition, the Company measures its loss provision based on the amount equivalent to the expected credit losses
of the financial instrument in the next 12 months. The increase or reversal amount of the resulting loss provision is
included in the current profit and loss as an impairment loss or gain.
Usually, if it s overdue for more than 30 days, the Company shall believe that the credit risk of the financial
instrument has increased significantly, unless there is conclusive evidence that the credit risk of the financial
instrument has not increased significantly since the initial recognition.
If the financial instrument's credit risk at the balance sheet date is low, the Company shall believe that the credit risk
of the financial instrument has not increased significantly since the initial recognition.
Accounting policy applicable before January 1, 2019
Except for financial assets measured at fair value and whose changes are included in current profit and loss, the
Company checks the book value of financial assets on the balance sheet date. If there is objective evidence that a
financial asset is impaired, make impairment provision.
(1) Provision for impairment of available-for-sale financial assets:
At the end of the period, if the fair value of available-for-sale financial assets seriously declines, or after
comprehensive consideration of various relevant factors, it is expected that such downward trend is non-temporary,
it is deemed to have been impaired, and the accumulated losses resulting from the decline in the fair value originally
and directly included in the owner's equity are transferred out and the impairment loss is recognized.




If there are objective evidences showing that the value of available-for-sale debt instrument is recovered and it
relates to the matters happened after the impairment loss recognition, the impairment loss recognized shall be
reversed and accounted in current profit or loss.


The impairment loss from equity instrument investment available-for-sale should no be reversed through
gains/losses.


Recognition standards for the impairment of equity instrument investment available for sale: The Company has
separately tested various available-for-sale equity instruments at the balance sheet date. It will be defined as

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impairment if the fair value is lower than the initial investment cost by more than 50% (including 50%) or the low
state has lasted for no less than one year. While the lower proportion is between 20% and 50%, the Group will
take other factors such as price fluctuation into consideration to estimate whether the equity instrument has
impaired or not.


Measurement of the investment cost: Initial segment of the "cost" of the sale of equity instruments in accordance
with available cost less any principal repayment and amortization, impairment loss has been included in
determining profit or loss; The fair value of the available-for-sale equity instrument investment without an active
market is determined by the present value determined on the basis of the current market return similar to financial
assets versus the future discounted cash; the fair value of available-for-sale equity instrument investment with
offers in the active market is determined by the closing price of the stock exchange at the end of the period, unless
this available-for-sale equity instrument investment has a restricted stock trade period. For the presence of
restricted investments in equity instruments available for sale, according to the end of the closing price of the
stock exchange market participants by deducting the risk equity instrument within a specified period cannot be
sold on the open market and the requirements to obtain compensation.


(2) Impairment provision for held-to-maturity investment
Measurement on the impairment loss of held-to-maturity investment reference to the measurement methods and
treatment of impairment losses of account receivable.




11. Note receivable

   Same as account receivable


12. Account receivable


(i) Account receivable with single significant amount and withdrawal bad debt provision on single basis


Recognition criteria on account receivable with single significant amount and withdrawal bad debt provision on single basis:
(1)Account receivable: single account receivable has over 10 million Yuan in amount;
(2) Other account receivable: single other account receivable has over 5 million Yuan in amount.
Accrual method for the bad debt provision of account receivable with single significant amount: Conducted
impairment testing separately, balance between the present value of future cash flow and its carrying value, bad
debt provision withdrawal and reckoned into current gains/losses. For those without impairment being found after
test, collected into relevant combination for accrual.
(ii) Accounts receivable whose bad debts provision was accrued by combination based on credit risk
characteristics portfolio
(1) Recognition criteria on portfolio
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Receivables with insignificant single amount are classified into several combinations according to the credit risk
characteristics together with the receivables that are not individually impaired after the individual test and have
significant single amount, and the provision for bad debts that should be accrued is determined according to the
actual loss rate of the collection of receivables combination with credit risk characteristics similar to previous
years and combined with the current situation.


Basis for determining the portfolio:

          Portfolio                 Accrual method                                              Basis
Related       parties    in Bad debt provision without accrual For receivables among related parties within the scope             of
consolidate scope                                            consolidation, the possibility of bad debts is very small, and no bad
                                                             debt provision is made for the portfolio.



Specific objects           Bad debt provision without accrual For cash deposit, security deposit and receivables from government
                                                             departments, the possibility of bad debts is very small, and no bad debt
                                                             provision is made for the this portfolio.

Aging analysis             Aging analysis                    Including receivables other than the above portfolios, the Company
                                                             makes the best estimate on the provision proportion of receivables
                                                             based on the past historical experience, and refers to the age of
                                                             receivables for credit risk portfolio classification.



     (2)Accrual method recognized according to portfolio
     ①By aging analysis
                   Account age                 Accrual ratio of the account receivable Accrual ratio of the other account receivable
                                                                (%)                                            (%)
Within one year                                                  1                                              1
1-2 years                                                       10                                             10
2-3 years                                                       30                                             30
3-4 years                                                       50                                             50
4-5 years                                                       50                                             50
Over 5 years                                                     80                                             80


②Account receivable with minor single amount but withdrawal bad debt provision on single item


Reasons for provision of bad debt reserve: There is objective evidence that the Company will not be able to
recover the money under the original terms of receivables.


Provision method of bad debt reserve: Withdrawn according to the difference between present value of expected
future cash flows and the book value of the receivables.




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13. Account receivable financing

  Nil


14. Other account receivable


Determining method and accounting treatment on the expected credit loss of other account receivable
As for the measurement of impairment for other account receivable except for account receivables, reference to
the “(vi) Testing of the financial assets (account receivable excluded) impairment and accounting treatment ” in
10.Financial instrument above mentioned.


15. Inventory


Does the Company need to comply with disclosure requirements of the special industry?
No

(i) Classification
Inventory includes raw materials, work in process-outsourced, goods in process, finished goods, goods in transit,
revolving material and wrappage and so on.
(ii) Valuation methods for send out stocks
Stocks are valued at time of shipment by weighted average method.
(iii) Recognized standards of the net realizable value for inventory
        The net realizable value of inventory products and sellable materials, in normal business production, is
        measured as the residual value after deducting the estimated sales expense and related taxes and fees from
        the estimated selling price; the net realizable value of an item of inventories subject to further processing,
        in normal business production, is measured as the residual value after deducting the sum of the estimated
        costs of completion, sales expense and related taxes and fees from the estimated selling price of the
        sellable item. The net realizable value of the quantity of inventories held to satisfy firm sales or service
        contracts is based on the contract price. If the sales contracts are for less than the inventory quantities held,
        the net realizable value of the excess is based on general selling prices.


An impairment allowance, if any, is generally individually recognized for each type of inventories at period-end
except: For an individual impairment allowance, if any, is recognized for the whole category of inventories of low
value and large quantities; and for an individual impairment allowance, if any, is recognized for a group of
inventories, which are held for the production and sales of products of a single territory and for identical or similar
usages or purposes, and which are indistinguishable from other types of inventories within the group.


Except that there is clear evidence indicates that the market price on the balance sheet date is abnormal, the net
realizable value of the inventory item is determined based on the market price at the balance sheet date.
The net realizable value of the inventory items at the end of the period is determined based on the market price at the

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balance sheet date.


(iv) Inventory system
Inventory system is the perpetual inventory system.
(v) Amortization of low-value consumables and packaging materials
(1) Low-value consumables adopts the method of primary resale;
    (2) Wrappage adopts the method of primary resale.



16. Contract assets


   Nil


17. Contract cost


18. Assets held for sale


The Company recognizes the non-current assets or disposal groups that meet both of the following conditions as
the component of available for sale:
(1) According to the practice in similar transactions of selling such assets or disposal groups, it can be sold
immediately under current conditions;
(2) The sale is very likely to occur, that is, the Company has already made a resolution on one sales plan and has
obtained a certain purchase commitment, and it is anticipated that the sale will be completed within one year. As
for the assets for sale should be approved by relevant authority organization or supervision department by
regulations, the approval has been obtained.




19. Creditors’ investment


    Nil


20. Other creditors’ investment


    Nil


21. Long-term account receivable


    Nil




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22. Long-term equity investment


(i) Criteria for judgment of the common control and significant influence
Common control refers to the control that is common to an arrangement in accordance with the relevant
agreement, and the relevant activities of the arrangement must be agreed upon by the participants sharing the
control rights before making a decision. Where the Company and other joint venture parties jointly control the
invested entity and have rights to the net assets of the invested entity, the invested entity is the joint venture of the
Company.


Significant influence refers to the right to participate in making decisions relating to the financial and operational
policies of an enterprise, while not able to control or jointly control (with others) establishment of these policies.
If the Company has significant influence on the invested enterprises, than such invested enterprises shall be the
joint venture of the Company.


(II) Determination of initial investment cost
(1) Long-term equity investment formed by business combination
Business combination under the same control: If the company pays cash, transfers non-cash assets or assumes debts,
and issues equity securities as the merger consideration, the share of the book value of the acquired owner's equity
of the merged party in the consolidated financial statements of the ultimate controlling party is taken as the initial
investment cost of the long-term equity investment on the merger date. If it is possible to exercise control over the
investee under the same control due to additional investment, etc., the initial investment cost of the long-term equity
investment shall be determined according to the share of the book value of the net assets of the merged party in the
consolidated financial statements of the ultimate controlling party on the merger date. The equity premium is
adjusted based on the difference between the initial investment cost of the long-term equity investment on the
combination date and the book value of the long-term equity investment before the merger plus the book value of
the new payment consideration for stock further obtained on the merger date, if the equity premium is insufficient to
be offset, offset the retained earnings.
Business combination not under the same control: The company take the merger cost determined on the purchase
date as the initial investment cost of the long-term equity investment. If it is possible to control the investee under
the same control due to additional investment, etc., the initial investment cost calculated by the cost method is
calculated according to the sum of the book value of the original equity investment plus the new investment cost.


(2) Long-term equity investment required by other ways


For long-term equity investments obtained through payment with cash, then the actual payment shall be viewed as
initial investment cost.


For long-term equity investments obtained through issuance of equity securities, then the fair value of such

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securities shall be viewed as initial investment cost


       Under the precedent condition that non-monetary assets exchanges are featured with commercial nature
       and fair values of exchange-in or exchange-out assets can be reliably measured, long-term equity
       investment exchange-in through non-monetary assets exchange shall be recognized with initial investment
       cost on the basis of the fair value of the assets exchange-out, unless there is obvious evidence showing that
       fair value of exchange-in assets is more reliable; as for non-monetary assets exchanges not satisfying such
       precedent condition, initial investment cost of exchange-in long-term equity investment falls to the
       carrying value of exchange-out assets and relevant taxes payable.
For long-term equity investment obtained through debt restructuring, the entry value is determined by the fair value
of the abandoned creditor's right and the taxes directly attributable to the asset and other cost, and the difference
between the fair value of the abandoned creditor's right and the book value is included in current profit and loss.


(iii) Subsequent measurement and recognition of gains and losses
(1) Long-term equity investment measured by cost
       The long-term equity investment for subsidiary shall be measured by cost.Other than payment actually paid
       for obtaining investment or cash dividend or profit included in consideration which has been declared
       while not granted yet, the Company recognizes investment income according to its share in the cash
       dividend or profit declared for grant by the invested unit.


(2) Long-term equity investment measured by equity
The Company calculates long term equity investment in associates and joint ventures under equity method. Where
the initial investment cost of a long-term equity investment exceeds the Group’s share of the fair value of the
investee’s identifiable net assets at the time of acquisition, no adjustment is made to the initial investment cost.
Where the initial investment cost is less than the Group’s share of the fair value of the investee’s identifiable net
assets at the time of acquisition, the difference is recognized in profit or loss for the period.


Return on investments and other comprehensive income is recognized respectively by shares of net gains and
losses realized by the invested company and other comprehensive income, and book value of such investment is
adjusted accordingly. Profit or cash dividends pro rata distributed by the invested company are to minus book
value of the relative long-term investment. Book value of long-term investment is adjusted when changes occur
other than net gains and losses, other comprehensive income and profit distribution of the invested company, and
is to report in owners’ equity accordingly.


The Company should recognized net profit of invested unit after adjustment according to the accounting policy
and period of the Company, based on fair value of vary identifiable assets of invested unit while obtained
investment, while recognized net profit or net losses of invested units that should be enjoy by investment
enterprise. During the period of holding the investment, if the investee prepares the consolidated financial statement,

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it shall be accounted for a based on the net profit, other comprehensive income and the amount attributable to the
investee in changes in the other owner's equity in the consolidated financial statements.




The un-realized transaction gains/losses attributable to investment enterprise, internally occurred between the
Company, affiliated units and joint-ventures should calculated by proportion of shares-holding which should be
offset, than recognized investment gains/losses. If the unrealized internal transaction losses with the investee are
assets impairment losses, they will be fully recognized. If a transaction of investing or selling assets occurs
between the company and an associate enterprise or joint venture, and the assets constitute a business, the
accounting treatment shall be handled in accordance with relevant policy policies disclosed in the Notes “5.
Accounting Treatment Methods for Business Combinations Under the Same Control and Not Under the Same
Control” and “6.Methods for Preparing Combined Financial Statements”.




       When the Company is confirmed to share losses of the invested units, the following order shall prevail for
       disposal: first of all, offset carrying value of long-term equity investment. Second, for long-term equity
       investment whose carrying value is not enough for offset, investment loss should be continued to recognize
       within the limit of carrying value of other long-term equity which substantially forms net investment to
       invested units, to offset carrying value of long-term items receivable. At last, after the aforesaid treatment,
       if enterprise still bears additional duties according to investment contract or agreement, projected liabilities
       are recognized in accordance to the obligations which are expected to undertake, and then recorded in
       current gains and losses.


(3) Disposal of long-term equity investment
Difference between carrying value and actual acquisition price in respect of disposal of long term equity
investment shall be included in current period gains and losses.


For long term equity investment under equity method, the Company shall adopt the same basis as the investee
directly disposes relevant assets or liabilities when disposing this investment, and account for the part originally
included in other comprehensive income under appropriate proportion. The owner's equity recognized as a result
of changes in the owner's equity other than the net profit or loss, other comprehensive income and profit
distribution of the investee is carried forward to the current profit and loss in proportion, except for other
comprehensive income arising from changes in net liabilities or net assets as the investee re-measures the defined
benefit plans.


If the joint control or significant influence on the investee is lost due to the disposal of part of the equity
investment, etc., the remaining equity after disposal shall be accounted for according to the recognition and
measurement standard of financial instruments, and the difference between the fair value and the book value of
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the day losing the joint control or significant impact is included in the current profit and loss. For other
comprehensive income as recognized under equity method in respect of the original equity investment, when the
Company ceases calculation under equity method, the aforesaid income shall be accounted for on the same basis
as the investee would otherwise adopt when it directly disposes relevant assets or liabilities. The owner's equity
recognized as a result of changes in the owner's equity other than the net profit or loss, other comprehensive
income and profit distribution of the investee is carried forward to the current profit and loss when the equity
method is terminated to be used for business accounting.


The Company loses the control over the investee due to the decrease in shareholding ratio caused by the disposal
of part of the equity investment or other investors' capital increase in the subsidiary, if the remaining equity can
implement joint control or significant influence on the investee, it shall be accounted for according to the equity
method when preparing individual financial statements, and the remaining equity shall be adjusted as if it was
accounted for according to the equity method since obtained. If the remaining equity cannot implement joint
control or significant influence on the investee, it shall be accounted for according to relevant provisions of the
recognition and measurement standard of financial instruments, and the difference between the fair value and the
book value on the date of loss of control is included in current profit and loss.
The disposed equity is obtained through business combination for reasons such as additional investment, in the
preparation of individual financial statement, if the remaining equity after disposal is accounted for by using the
cost method or equity method, for the equity investment held before the purchase date, other comprehensive income
and other owner's equity recognized due to being accounted for by using the equity method are carried forward on a
pro-rata basis; if the remaining equity after disposal is changed to be accounted for according to the recognition and
measurement standard of financial instruments, the other comprehensive income and other owners' equity shall be
entirely carried forward.




23. Investment real estate


Measurement
Measured by cost
Depreciation or amortization method


Investment real estate is defined as the real estate with the purpose to earn rent or capital appreciation or both,
including the rented land use rights and the land use rights which are held and prepared for transfer after
appreciation, the rented buildings (including the buildings for rent after completion of self-construction or
development activities and the buildings under construction or development for future lease).


Current investment real estate of the Company are measured by cost. As for the investment real estate-rental
building measured by cost, the depreciation policy is same as the fixed assets of the Company, the land use right
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for rental has the same amortization policy as intangible assets.


Expected service life for the investment real estate, an rate of the net salvage value and annual amortization
(depreciation) are as:
             Category                   Expected service life       Expected net salvage value      Annual amortization
                                                (year)                                                (depreciation) rate
Houses and buildings                            10-40                            5%                        2.37%-9.50%




24. Fixed asset


(1)Recognition


Fixed assets is defined as the tangible assets which are held for the purpose of producing goods, providing
services, lease or for operation & management, and have more than one year of service life. Fixed assets should be
recognized for qualified the followed conditions at the same time: (1) It is probable that the economic benefits
associated with the assets will flow into the Company; (2) The cost of the assets can be measured reliably.




(2) Depreciation methods


         Category                 Method             Years of depreciation       Scrap value rate   Yearly depreciation rate

Production buildings     Straight-line depreciation 20-35                    5                      2.71-4.75

Non-production
                         Straight-line depreciation 20-35                    5                      2.71-4.75
buildings

Temporary dormitory      Straight-line depreciation 20-40                    5                      2.38-4.75

Simple room etc.         Straight-line depreciation 5-15                     5                      6.33-19

Gas storage bin          Straight-line depreciation 20                       5                      4.75

Silo                     Straight-line depreciation 50                       5                      1.9

Wharf and supporting
                         Straight-line depreciation 50                       5                      1.9
facilities

Other machinery
                         Straight-line depreciation 10-20                    5                      4.75-9.5
equipment

Warehouse transmission
                         Straight-line depreciation 20                       5                      4.75
equipment

Electronic equipment     Straight-line depreciation 2-5                      5                      19-47.5

Transport equipment      Straight-line depreciation 3-10                     5                      9.5-31.67

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Other equipment        Straight-line depreciation 3-10               5                        9.5-31.67




(3) Recognition, measurement and depreciation of fixed assets held under finance lease


If any of the following conditions are stipulated in the lease agreement signed by the Company and the lessee, it
shall be recognized as a financial leased assets: (1) ownership of the leased assets shall belong to the Company
upon the expiration of the lease term; (2) the Company has the option to purchase assets for a purchase price much
lower than the fair value of the assets when the option is exercised; (3) the lease period accounts for most of the
service life of the leased assets; (4) there is no significant difference between the present value of the minimum
lease payment on the lease commencement date and the fair value of the assets. On the lease start date, the
company regards the lower of the fair value of the leased asset and the present value of the minimum lease
payment as the book value of the leased asset and regards the minimum lease payment amount as the book value
of the long-term payable, and the difference is regarded as unrecognized financing charges.




25. Construction in progress



       Fixed asset is booked with the entire expenditures occurred in the Construction in progress till it arrives at
       predicted state for use. For those constructions in process of fixed assets which have already arrived at the
       predicted state for use, while still with absence of completion settlement, they shall be carried forward to
       fixed assets at the estimated value based on engineering budget, construction cost or actual cost
       commencing from the date of arrival of the predicted state for use. Meanwhile, they shall be also subject to
       the depreciation policies applicable to fixed assets of the Company for provision of depreciation. Once
       completion settlement is made, the original temporary estimated value shall be adjusted at the effective
       cost. However, the original provision of depreciation remains unchanged.



26. Borrowing expenses


(i) Recognition of the borrowing expenses capitalization
Borrowing expenses including the amortization of interest, discount or premium on borrowing, the ancillary
expenses and exchange differences arising from foreign currency borrowings and so on.


       Borrowing expenses that attributed for purchasing or construction of assets that are complying start to be
       capitalized and counted as relevant assets cost; other borrowing expenses, reckoned into current gains and
       losses after expenses recognized while occurred.



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Assets satisfying the conditions of capitalization are those assets of fixed, investment real estate etc. which need a
long period of time to purchase, construct, or manufacturing before becoming usable.


Capitalizing for borrowing expenses by satisfying the followed at same time:
       (1) Assets expense occurred, and paid as expenses in way of cash, non-cash assets transfer or debt with
       interest taken for purchasing, constructing or manufacturing assets that complying with capitalizing
       condition;
       (2) Borrowing expenses have occurred;
       (3) Necessary activities occurred for reaching predicted usable statues or sale-able status for assets
       purchased, constructed or manufactured.
(ii) Period of capitalization
       Capitalizing period was from the time star capitalizing until the time of suspended capitalization. The
       period for borrowing expensed suspended excluded in the period.


       If purchasing, construction, or manufacturing process of an asset satisfying the conditions of capitalization
       reached its predicted usable status or sale-able status, capitalization suspended for borrowing expenses.


       If purchasing, construction, or manufacturing process of an asset satisfying the conditions of capitalization
       completed projects and usable independently for part of the projects, borrowing expenses for this kind of
       assts shall suspended capitalization.


       If the assets have been completed in every part, but can be reached the useful status or sale-able status
       while completed entirely, the borrowing expense shall be suspended for capitalization while the assets
       completely finished in whole.
(iii) Period of suspended
If purchasing, construction, or manufacturing process of an asset satisfying the conditions of capitalization is
suspended abnormally for over 3 months, capitalizing of borrowing expenses shall be suspended; the suspended
assets that satisfying the conditions of capitalization meets the necessary procedure of reaching predicted usable
status or sellable status, capitalizing of borrowing expenses shall be resumed. The borrowing expenses occurred
during the period of suspended shall reckon into current gains and losses until the purchasing, construction, or
manufacturing process is resumed for capitalizing.
(iv) Capitalization rate of the borrowing costs, measurement of the capitalized amount
As for the special loans borrowed for the purchase, construction or production of assets eligible for capitalization,
 the borrowing costs are capitalized by deducting the actual borrowing costs incurred in current period of special
borrowing, the interest income earned by borrowing funds that have not ye been used, deposited in the bank or the
investment income obtained from the temporary investment.


For the general borrowings used for the acquisition, construction or production of assets eligible for capitalization,

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the amount of borrowing costs that should be capitalized for general borrowings is calculated and determined
according to the weighted average of the asset expenditures of accumulated asset expenditures over the special
borrowings multiplying by the capitalization rate of the occupied general borrowings. The capitalization rate is
determined based on the weighted average interest rate of general borrowings.



27. Biological assets


(i) Classification of biological assets
Biological assets of the Company refer to the productive biological assets. Productive biological assets included
tea tree.


Biological assets are recognized when the following three conditions are fully satisfied:
(1) An enterprise owns or controls such biological assets due to the past transactions or events;
(2) It may result in the inflow of economic benefits or service potential in relation to such biological assets;
(3) Cost of such biological assets can be reliably measured.
(ii) Initial recognition of Biological assets
The biological assets will initially measured by cost while obtained. The cost of biological asset used for
production purchased from the outside includes the purchase price, related taxes, transportation expense,
insurance premium and other charges directly attributable to the purchase of such asset. Biological asset used for
production input by investors is stated at its entry value which is calculated based on the value as stipulated in the
investment contract or agreement plus the related taxes payable. Where value stipulated in the contract or
agreement is not fair, the actual cost is fixed at fair value.
(iii) Subsequent measurement of biological assets
(1) Follow-up expenses
The cost of productive biological assets constituted by the actual costs of self-cultivated and constructed
productive biological assets occurred before achieving the intended production and operation goals, and the
follow-up expenses such as management and protection occurred after achieving the intended production goals are
included in the current profits and losses.


(2) Depreciation of productive biological assets
Biological assets of the Company refer to the tea plants. For those productive biological assts that reached its
predicted productive purpose, withdrawal depreciation by average age method. The service life was determined by
the residual terms of the residual term of land use after deducting the un-maturity period (5-year) of the tea plants
with 5 percent salvage value calculated. Reviewing the service life, predicted salvage vale and depreciation
method at year-end, if there have difference between the predicted number and original estimated number or have
major changes on way of profit earning, than adjusted the service life or predicted salvage value or depreciation
method as account estimation variation.


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(3) Disposal of biological assets:
The cost of biological assets after the shift of use is stated at the carrying amount at the time of shift of use. When
sold, destroyed and inventory losses occurred, the disposal income of biological assets net of carrying amount and
related taxes shall be charged to profit or loss for the current period.
(iv) Biological assets impairment
The Company inspects the productive biological assets at least at the end of each year, conclusive evidence
indicates that if the recoverable amount of productive biological assets are less than the book value due to natural
disasters, insect pests, animal diseases or changes in market demand, the Company make the provision for
impairment of biological assets and include them in the current profits and losses according to the balance
between the recoverable amount and the book value.


The balance lower than the book value shall be calculated and accrued to falling price reserves or provision for
impairment of biological assets and included in the current profits and losses.


Once the provision for impairment of productive biological assets is made, it cannot be reversed.



28. Oil and gas assets

   Nil


29. Right-of-use assets


   Nil


30. Intangible assets


(1) Measurement, use of life and impairment testing


(i) Measurement
(1) Initial measurement is made at cost when the Company acquires intangible assets;
For those intangible assets purchased from outside, the purchase value, relevant taxes and other payments
attributable to predicted purpose obtained should recognized as cost for this assets. For those purchased amount
that paid overdue exceeded the normal credit condition, owns financing natures actually, the cost should be
recognized based on the current value while purchased.


As for the intangible assets acquired from the debtor in debt restructuring for the purpose of settlement of debt, the
fair value of the intangible assets shall be based to determine the accounting value. The difference between the
carrying value of restructured debt and the fair value of the intangible assets use for settlement of debt shall be

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recorded in current gains and losses.


With the preceding conditions that non-monetary assets exchange has commerce nature and the fair value of the
assets exchanged in or out can be measured reliably, the intangible assets exchanged in through non-monetary
assets exchange are accounted at the value based on the fair value of assets exchanged out, unless there is obvious
evidence showing the fair value of assets exchanged in is more reliable; for non-monetary assets exchange not
qualifying for the preceding conditions, the carrying value of assets exchanged out and related taxes payable shall
be viewed as the cost of intangible assets exchanged in, without recognition of gains and losses.


(2) Subsequent measurement
Analyzing and judging the service life of an intangible asset when they are acquired.
    Those intangible assets with limited useful life are evenly amortized on straight basis from the date when they
    become usable to the end of expected useful life;Intangible assets for which it is impossible to predict the term
    during which the assets can bring in economic benefits are viewed as intangible assets with indefinite life
    without amortization.


(ii) Estimation of the service life of intangible assets with limited service life
       Those intangible assets with limited useful life are evenly amortized on straight basis from the date when
       they become usable to the end of expected useful life. Particular about the estimation on intangible assets
       with limited service life:
          Item                                Predicted useful life                                      Basis
     Land use right       Amortized the actual rest of life after certificate of land use     Certificate of land use right
                                                  right obtained
Proprietary technology                               20-year                                Actual situation of the Company
  Trademark use right                                10-year                                Actual situation of the Company
   Software use right                               5-8 years                                     Protocol agreement
  Forest tree use right                       Service life arranged                               Protocol agreement
Shop management right                     Service life arranged                       Protocol agreement
(iii)Judgment basis on intangible assets with uncertain service life and review procedures for the service life
Disclosure requirement: for intangible assets with uncertain service life, the judgment basis for uncertain service
life and the procedures for checking their service life should be disclosed.



(2) Accounting policy of the internal R&D expenditure


(i) Specific criteria for dividing research and development stages
The expenditure for internal R&D is divided into research expenditure and development expenditure.


Research stage: stage of the investigation and research activities exercising innovative-ness for new science or

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technology knowledge obtained and understanding.


Development stage: stage of the activities that produced new or material advance materials, devices and products
that by research results or other knowledge adoption in certain plan or design before the commercial production or
usage.


(ii) Standards for capitalization satisfaction of expenditure in development state
         Intangible assets recognized for expenditure in exploitation stage by satisfying the followed at same time:
(1) Owes feasibility in technology and completed the intangible assets for useful or for sale;
(2) Owes the intention for completed the intangible assets and for sale purpose;
(3) Way of profit generated including: show evidence that the products generated from the intangible assets owes
a market or owes a market for itself; if the intangible assets will use internally, than show evidence of useful-ness;
(4) Possess sufficient technique, financial resources and other resources for the development of kind of intangible
assets and has the ability for used or for sale;
(5) The expenditure attributable to the exploitation stage for intangible assets could be measured reliably.
         Expenditure happened in development phase not satisfying the above conditions is included in current
         period gains and losses when occurs. Development expenditure previously included in gains and losses in
         previous periods will not be re-recognized as assets in later periods. Capitalized development expenditure
         is stated in balance sheet as development expenditure, and is transferred to intangible assets when the
         project is ready for planned use.



31. Impairment of long term assets


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


Goodwill and intangible asset with an indefinite useful life are tested for impairment at least at the end of each year.
When the Company conducts the goodwill impairment test, the book value of goodwill formed by business
combination is apportioned to the relevant asset group according to reasonable methods from the date of purchase; if
it is difficult to apportion it to the relevant asset group, apportion it to the relevant asset group portfolio. When the
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book value of goodwill is apportioned to the relevant asset group or asset group portfolio, it is apportioned
according to the proportion of the fair value of each asset group or asset group portfolio in the total fair value of the
relevant asset group or asset group portfolio. If the fair value is difficult to be reliably measured, it is apportioned
according to the proportion of the book value of each asset group or asset group portfolio in the total book value of
the relevant asset group or asset group portfolio.


When conducting impairment test for relevant asset group with inclusion of goodwill, in case that there is
indication of impairment for such asset group, impairment test would be firstly conducted in respect of the asset
groups without inclusion of goodwill. Then, it shall calculate the recoverable amount and determine the
corresponding impairment loss as compared to its carrying value. Second, asset group with inclusion of goodwill
would be tested for impairment. If it is found after comparison between the carrying value and recoverable
amount of the asset group that the recoverable amount is less than carrying value, the Company would recognize
impairment loss for goodwill. Once recognized, asset impairment loss would not be reversed in future accounting
period.




32. Long term prepaid expense


Long term prepaid expense represents the expense which the Company has occurred and shall be amortized in the
current and later periods with amortization period exceeding one year. Long term prepaid expense is amortized
during the beneficial period under straight line method.



33. Contract liability


   Nil


34. Staff remuneration


(1) Short term remuneration


In the period of employee services, short-term benefits are actually recognized as liabilities and charged to profit
or loss or relevant assets costs.


Regarding to the social insurance and housing funds that the Company paid for employees, the Company should
recognize corresponding employees benefits payable according to the appropriation basis and proportion as
stipulated by relevant requirements and recognize the corresponding liabilities.


If the employee welfare are non-monetary benefits and can be measured reliably, they shall be measured at fair

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value.


(2) Accounting treatment for post office benefits


(i) Defined contribution plan
The Company pays basic endowment insurance and unemployment insurance for employees according to the
relevant regulations of the local government. In the accounting period in which employees provide services for the
Company, the amount to be paid is calculated according to the local payment base and proportion, and is
recognized as a liability and included in current profit and loss or related asset cost.


In addition to the basic endowment insurance, employees who meet the conditions of the “Enterprise Annuity
Scheme of Shenzhen Cereals Group Co., Ltd.” can apply for the annuity plan established by the Company. During
the accounting period when employee provides services for the Company, the contribution calculated under
defined withdraw plan would be recognized as liabilities and included in current gains and losses or relevant asset
cost.




Other than periodic payment of the aforesaid amounts in compliance with national standards, the Company is not
obliged to make other payment.


(ii) Defined benefit plan
The Company assigns the benefit obligation arising from the defined benefit plan to the period during which the
employee provides service according to the formula determined by the expected accumulated benefit unit method,
and includes it in the current profit and loss or related asset cost.
The deficit or surplus formed by the present value of the defined benefit plan obligation minus the fair value of the
defined benefit plan asset is recognized as a net benefit or net asset of the defined benefit plan. If there is a surplus in
the defined benefit plan, the Company measures the net assets of the defined benefit plan by the lower of the surplus
and the asset limit of the defined benefit plan.
All defined benefit plan obligations, including obligations expected to be paid within twelve months of the end of
the annual reporting period in which the employee provides services, are discounted based on the market return of
the national debt matching with the defined benefit plan obligations deadline and currency or the high quality
corporation bonds in an active market on the balance sheet date.
The service cost generated by the defined benefit plan and the net liabilities or the net interest of the net assets of the
defined benefit plan are included in the current profit and loss or the related assets cost; the changes generated by the
remeasurement of net liabilities or net assets of the defined benefit plan are included in other comprehensive income,
and will not be transferred back to profit or loss in the subsequent accounting period, when the original defined
benefit plan is terminated, the part that was originally included in other comprehensive income will be carried
forward to undistributed profit within the scope of equity.

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When settling the defined benefit plan, the settlement gain or loss is confirmed by the difference between the present
value of the defined benefit plan obligation and the settlement price determined on the settlement date.



(3) Accounting treatment for dismissal benefit




When the Company cannot unilaterally withdraw the dismissal benefits provided by the termination of the labor
relationship plan or the downsizing proposal, or when confirm the cost or expenses related to the reorganization of
the dismissal benefits (the earlier one), confirm the employee compensation liabilities generated by dismissal
benefits and include in the current profit and loss.



(4) Accounting treatment for other long term staff benefits


Other long term staff benefits refers to all the other staff benefits except for short term remuneration, post office
benefit and dismissal benefit.


For other long term staff benefits satisfying conditions under defined withdraw plan, the contribution payables
shall be recognized as liabilities and included in current gains and losses or relevant asset cost during the
accounting period in which the staff provides services to the Company.



35. Lease liability

   Nil


36. Accrual liability


(i) Recognition standards for accrual liability
When the obligations relating to contingencies such as litigation, debt guarantee, loss contract, reorganization and
etc. Satisfy the following conditions, an accrual liability shall be recognized:


(1)The responsibility is a current responsibility undertaken by the Company;
(2)Fulfilling of the responsibility may lead to financial benefit outflow;
(3)The responsibility can be measured reliably for its value.


(ii) Measurement




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Accrual liabilities shall conduct initial measurement by best estimation of expenditures needed by fulfillment of
current responsibilities.


While determined the best estimation, take the risks, uncertainty and periodic value of currency that connected to
the contingent issues into consideration. For major influence from periodic value of currency, determined best
estimation after discount on future relevant cash out-flow.


Treatment for best estimation:
If the expenditure has a continuous range, and with similar possibility within the range, the best estimation should
determined by the middle value within the range, that is the average amount between the up and low limit.


If the expenditure has no continuous range, or has a continuous range but with different possibility within the
range, the possibility amount shall determined as the best estimation while single events involved by contingency;
if many events were involved by contingency, the best estimation shall be determined by various results and
relevant probability.


If the expenses for clearing of predictive liability is fully or partially compensated by a third party, and the
compensated amount can be definitely received, it is recognized separated as asset. Though the compensated
amount shall not greater than the book value of the predictive liability



37. Share-based payment


   Nil


38. Other financial instrument of preferred stocks and perpetual bond



The Company classifies it as a financial asset, a financial liability or an equity instrument at initial recognition based
on the contractual terms of the preferred stock/perpetuity bonds issued and the economic substance it reflects but not
only in legal form.
When a financial instrument such as perpetual bond/preferred share issued by the Company satisfies one of the
following conditions, classify the financial instrument as a whole or its components as a financial liability at initial
recognition:
(1) There is a contractual obligation that the Company cannot unconditionally avoid performing by cash payment or
other financial assets;
(2) Include contractual obligations that are settled by the delivery of a variable amount of self-equity instruments;
(3)Include derivatives (such as transfer of equity) that are settled by their own interests, and the derivative does not
exchange a fixed amount of cash or other financial assets with a fixed amount of its own equity instruments;

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(4) There are contractual clauses that indirectly form contractual obligations;
(5) The perpetual debt of the issuer is in the same liquidation order as the ordinary bonds and other debts issued by
the issuer at the time of liquidation.
For financial instruments such as perpetual bonds/preferred shares that do not meet any of the above conditions,
classify the financial instrument as a whole or its components as equity instrument at the initial recognition.



39. Revenue


Does the Company need to comply with disclosure requirements of the special industry?
No
Whether implemented the new revenue standards
□Yes √No

(i) Sales of goods


When main risks and rewards attached to the ownership of goods have been transferred to the buyer, reserved
neither continuous management power nor effective control over the goods, incoming payment can be measured
reliably, relative financial benefit possibly inflow to the company, cost occurred or will occur can be reliably
measured, sales income of goods is recognized.


The product sales of the Company include domestic sales and export sales, the sales revenue of domestic sales is
recognized after the goods is delivered and conforms to the relevant causes of the contract; the sales revenue of
export sales is recognized after the goods is sent out and declared, and conforms to the relevant causes of the
contract.
(ii) Provide labor services
If the results of the labor service transaction on the balance sheet date can be reliably estimated, the labor service
income will be recognized by the percentage of completion method. The completion schedule of the labor service
transaction is determined based on the measurement of the completed work.
The results of the labor service transaction can be reliably estimated, which means it can meet the following
conditions:
(1) The amount of income can be reliably measured;
(2) The relevant economic benefits are likely to flow into the enterprise;
(3) The completion schedule of the transaction can be reliably determined;
(4) The costs incurred and to be incurred in the transaction can be reliably measured.
The total amount of labor service income is determined by the received or receivable contract or agreement price,
except that the contract or agreement price received or receivable is not fair. On the balance sheet date, the current
labor service income is determined by the amount that the total labor service income multiplies by the completion
schedule and deducts the accumulated labor income from the previous accounting period. At the same time, the

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current labor cost is carried forward by the amount that the total labor service cost multiplies by the completion
schedule and deducts the accumulated labor cost from the previous accounting period.


If the results of the labor service transaction on the balance sheet date cannot be reliably estimated, they shall be
disposed as follows:
(1) If the labor costs incurred is estimated to be compensated, the labor service income shall be determined
according to the amount of labor costs incurred, and the labor costs shall be carried forward at the same amount.
(2) If the labor costs incurred is estimated not to be compensated, the labor costs incurred shall be included in the
current profit and loss, and the labor service income shall not be recognized.
When the contract or agreement signed by the Company with other enterprises includes the sale of goods and the
rendering of labor services, if the parts of the sales of goods and the parts of the rendering of labor service can be
distinguished and can be separately measured, treat the part of the sales of goods as the sales of goods, and treat
the part of the rendering of labor services as rendering of labor services. If the parts of the sales of goods and the
parts of the rendering of labor service cannot be distinguished, or can be distinguished but cannot be separately
measured, treat the part of the sales of goods and the parts of the rendering of labor service both as the sales of
goods.
Recognize revenue for the grain and oil dynamic storage and rotation services provided by the Company for the
Shenzhen Municipal Government when the relevant labor service activities occur. Specifically, monthly calculate
and recognize the government service income based on the actual storage grain and oil quantity and the storage
price stipulated by “Operational Procedures for Government Grain Storage All-in Cost of Shenzhen” and
“Operational Procedures for Edible Vegetable Oil Government Reserve All-in Cost of Shenzhen”.


(iii) Recognition of the right to use the transferred assets
Financial benefit attached to the contract is possibly inflow to the company; Overall income of the contract can be
measured reliably. Determined the use right income for transaction assets respectively as followed:
(1) Amount of interest income: determined by the time and effective interest rate of the currency capital used by
other people.
(2) Amount of income from use: determined by the charge time and calculation method agreed in the relevant
contract or agreement.
(3) For the income from real estate, dock warehouse and other property leasing and terminal docking business,
calculate and determine the rental income and warehousing logistics income according to the chargeable time and
method as stipulated in the contract or agreement.



40. Government Grants


(i) Types
Governments grants of the Company refer to the monetary and non-monetary assets obtained from government
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for free, and are divided into those related to assets and others related to revenues.


Government grants related to assets refer to those obtained by the Company and used for purchase or construction
of or otherwise to form long-term assets. Government subsidies related to revenue refer to those other than
government subsidies related to assets.


Specific criteria for government grants related to assets: the government grants obtained by the Company for the
purchase, construction or other formation of long-term assets;


Specific criteria for government grants related to revenue: the government grant other than an asset-related
government grant.
(ii) Recognition point of time
At end of the period, if there is evidence show that the Company qualified relevant condition of fiscal supporting
polices and such supporting funds are predicted to obtained, than recognized the amount receivable as government
grants. After that, government grants shall recognize while actually received.


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


Government grants related to assets offset the book value of underlying assets or are recognized as deferred income.
If they are recognized as deferred income, they shall be included in the current profit and loss by stages according to
reasonable and systematic methods within the useful life of the relevant assets. (Those related to the daily activities
of the Company are included in other income; those not related to the daily activities of the Company are included
in the non-operating income);
Government grants related to the income which are used to compensate the related costs or losses of the Company in
the future period are recognized as deferred income are included in the current profit and loss (Those related to the
daily activities of the Company are included in other income; those not related to the daily activities of the
Company are included in the non-operating income) or offset relevant costs or losses during the period of
recognizing the relevant costs or losses; those used to compensate the occurred related costs or losses of the
Company are directly included in the current profit and loss (Those related to the daily activities of the Company
are included in other income; those not related to the daily activities of the Company are included in the
non-operating income) or offset relevant costs or losses.
Policy preferential loan interest discounts obtained by the Company are separately accounted for by distinguishing
the following two cases:
(1) The government appropriates the discounted funds to the loan bank, the loan bank provides loans to the

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Company at a policy preferential interest rate, the Company uses the actual amount of the borrowed money as the
book value of the loan, and calculates the relevant borrowing costs according to the loan principal and the policy
preferential interest rate.
(2) If the government directly appropriates the discounted funds to the Company, the Company will offset the
relevant borrowing costs with the corresponding interest discounts.




41. Deferred income tax assets and deferred income tax liabilities


The deferred income tax assets recognised by deductible temporary differences are within the limit of taxable
income that is probably achieved in the future to deduct the deductible temporary differences. The deductible
losses and tax credits that can be carried forward in subsequent years are within the limit of the future taxable
income it is probably achieved in the future to deduct the deductible losses and tax credits, and the corresponding
deferred income tax assets are recognized.


For taxable temporary differences, deferred income tax liabilities are recognised except in special circumstances.


The special circumstances of not recognizing deferred income tax assets or deferred income tax liabilities include:
initial recognition of goodwill; other transactions or matters other than business combinations that neither affect
accounting profits nor affect taxable income (or deductible losses) when occur.




When the Group has a legal right to settle on a net basis and intends either to settle on a net basis or to realize the
assets and settle the liabilities simultaneously, current tax assets and current tax liabilities are offset and presented
on a net basis.


When the Group has a legal right to settle current tax assets and liabilities on a net basis, and deferred tax assets
and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable
entity or different taxable entities which intend either to settle current tax assets and liabilities on a net basis or to
realize the assets and liabilities simultaneously, in each future period in which significant amounts of deferred tax
assets or liabilities are expected to be reversed, deferred tax assets and deferred tax liabilities are offset and
presented on a net basis.




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42. Lease


(1) Accounting treatment for operating lease


(i)The rental fee paid for renting the properties by the company are amortized by the straight-line method and
reckoned in the current expenses throughout the lease term without deducting rent-free period. The initial direct
costs related to the lease transactions paid by the company are reckoned in the current expenses.


When the lessor undertakes the expenses related to the lease that should be undertaken by the company, the
company shall deduct the expenses from the total rental costs, share by the deducted rental costs during the lease
term, and reckon in the current expenses.


(ii)Rental obtained from assets leasing, during the whole leasing period without rent-free period excluded, shall be
amortized by straight-line method and recognized as leasing revenue. The initial direct costs paid with leasing
transaction concerned are reckoned into current expenditure; the amount is larger is capitalized when incurred,
and accounted for as profit or loss for the current period on the same basis as recognition of rental income over the
entire lease period.


When the company undertakes the expenses related to the lease that should be undertaken by the lessor, the
company shall deduct the expenses from the total rental income, and distribute by the deducted rental costs during
the lease term.



(2) Accounting treatment for financing lease


(i) Assets lease-in by financing: On the beginning date of the lease, the entry value of leased asset shall be at the
lower of the fair value of the leased asset and the present value of minimum lease payment at the beginning date
of the lease. Minimum lease payment shall be the entry value of long-term accounts payable, with difference
recognized as unrecognized financing expenses.


Unrecognized financing expenses shall be reckoned in financial expenses and amortized and using effective
interest method during the leasing period. The initial direct expenses incurred by the Company are included in the
value of the rented assets.


(ii) Finance leased assets: on the lease commencement date, the company affirms the balance among the finance
lease receivables, the sum of unguaranteed residual value and its present value as the unrealized financing income,
and recognizes it as the rental income during the period of receiving the rent. For the initial direct costs related to
the rental transaction, the company reckons in the initial measurement of the finance lease receivables, and
reduces the amount of income confirmed in the lease term.
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43. Other important accounting policy and estimation


Safety production expenses
The safety production expenses drawn by the Company in accordance with the national regulations are included in
the cost of relevant products or the current profit and loss, and are recorded in the “special reserve” account. When
using the drawn safety production expenses, directly offset the special reserve if it belongs to the expense
expenditure. For fixed assets, the expenses incurred through the collection of “under construction” subjects shall be
recognized as fixed assets when the safety project is completed and ready for use. At the same time, the special
reserve shall be offset according to the cost of forming the fixed assets, and accumulated depreciation of the same
amount shall be recognized. The fixed assets will no longer be depreciated in the future.



44. Changes of important accounting policy and estimation


(1)Changes of major accounting policies


□ Applicable √Not applicable


(2) Changes of important accounting estimate


□ Applicable √Not applicable


(3) Adjustment the financial statements at the beginning of the first year of implementation of new financial
instrument standards, new revenue standards and new leasing standards


√ Applicable □Not applicable
Consolidate balance sheet

                                                                                                          In RMB/CNY

             Item                    2018-12-31                    2019-01-01                    Adjustments

Current assets:

     Monetary funds                        631,638,339.68                631,638,339.68

     Settlement provisions

     Capital lent

     Tradable financial assets                                             1,124,927.96                   1,124,927.96

     Financial assets
measured by fair value and                   1,124,927.96                                                -1,124,927.96
with variation reckoned into

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current gains/losses

     Derivative financial
assets

     Note receivable              1,027,635.04                  1,027,635.04

     Account receivable         473,646,886.64                473,646,886.64

     Account receivable
financing

     Accounts paid in
                                 83,696,870.07                 83,696,870.07
advance

     Insurance receivable

     Reinsurance receivables

     Contract reserve of
reinsurance receivable

     Other account
                                 33,803,428.45                 33,803,428.45
receivable

         Including: Interest
                                                                 561,500.00
receivable

                Dividend
receivable

     Buying back the sale of
financial assets

     Inventories               2,811,802,600.19             2,811,802,600.19

     Contract assets

     Assets held for sale

     Non-current asset due
within one year

     Other current assets       254,493,764.04                254,493,764.04

Total current assets           4,291,234,452.07             4,291,234,452.07

Non-current assets:

     Loans and payments on
behalf

     Creditors’ investment

     Available-for-sale
                                     57,500.00                                                -57,500.00
financial assets

     Other creditors’
investment

     Held-to-maturity

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investment

        Long-term account
receivable

        Long-term equity
                                     70,999,666.81                 70,999,666.81
investment

        Other equity instrument
investment

        Other non-current
                                                                       57,500.00                  57,500.00
financial assets

        Investment real estate      282,622,184.92                282,622,184.92

        Fixed assets                993,136,743.51                993,136,743.51

        Construction in progress    186,586,135.06                186,586,135.06

        Productive biological
                                        407,078.92                   407,078.92
asset

        Oil and gas asset

        Right-of-use asset

        Intangible assets           569,997,392.08                569,997,392.08

        Expense on Research
and Development

        Goodwill

        Long-term expenses to
                                     21,799,899.80                 21,799,899.80
be apportioned

        Deferred income tax
                                     50,174,590.98                 50,174,590.98
asset

        Other non-current asset       1,936,149.72                  1,936,149.72

Total non-current asset            2,177,717,341.80             2,177,717,341.80

Total assets                       6,468,951,793.87             6,468,951,793.87

Current liabilities:

        Short-term loans             91,600,000.00                 91,600,000.00

        Loan from central bank

        Capital borrowed

        Tradable financial
liability

        Financial liability
measured by fair value and
with variation reckoned into
current gains/losses

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     Derivative financial
liability

     Note payable

     Account payable               472,738,283.80                472,738,283.80

     Accounts received in
                                   205,428,594.16                205,428,594.16
advance

     Selling financial asset of
repurchase

     Absorbing deposit and
interbank deposit
     Security trading of
agency

     Security sales of agency

     Wage payable                  135,709,423.52                135,709,423.52

     Taxes payable                  24,969,718.58                 24,969,718.58

     Other account payable         280,689,548.29                280,689,548.29

          Including: Interest
payable

                 Dividend
                                     2,909,182.74                  2,909,182.74
payable
     Commission charge and
commission payable

     Reinsurance payable

     Contract liability

     Liability held for sale

     Non-current liabilities
                                    55,090,793.79                 55,090,793.79
due within one year

     Other current liabilities     219,151,968.63                219,151,968.63

Total current liabilities         1,485,378,330.77             1,485,378,330.77

Non-current liabilities:

     Insurance contract
reserve

     Long-term loans               516,687,791.66                516,687,791.66

     Bonds payable

          Including: preferred
stock

                 Perpetual

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capital securities

     Lease liability

     Long-term account
                                   15,690,202.08                 15,690,202.08
payable

     Long-term wage
payable

     Accrual liabilities

     Deferred income              100,608,203.01                100,608,203.01

     Deferred income tax
                                   12,988,434.77                 12,988,434.77
liabilities

     Other non-current
liabilities

Total non-current liabilities     645,974,631.52                645,974,631.52

Total liabilities                2,131,352,962.29             2,131,352,962.29

Owners’ equity:

     Share capital               1,152,535,254.00             1,152,535,254.00

     Other equity instrument

         Including: preferred
stock

                    Perpetual
capital securities

     Capital public reserve      1,422,892,729.36             1,422,892,729.36

     Less: Inventory shares

     Other comprehensive
income

     Reasonable reserve                   154.21                       154.21

     Surplus public reserve       327,140,910.28                327,140,910.28

     Provision of general risk

     Retained profit             1,269,933,487.26             1,269,933,487.26

Total owner’s equity
attributable to parent           4,172,502,535.11             4,172,502,535.11
company

     Minority interests           165,096,296.47                165,096,296.47

Total owner’s equity            4,337,598,831.58             4,337,598,831.58

Total liabilities and owner’s
                                 6,468,951,793.87             6,468,951,793.87
equity

Explanation on adjustment
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Balance sheet of parent company

                                                                                                  In RMB/CNY

              Item                2018-12-31                  2019-01-01                  Adjustments

Current assets:

     Monetary funds                    168,900,586.84               168,900,586.84

     Tradable financial assets                                        1,124,927.96                1,124,927.96

     Financial assets
measured by fair value and
                                         1,124,927.96                                            -1,124,927.96
with variation reckoned into
current gains/losses

     Derivative financial
assets

     Note receivable

     Account receivable                 42,441,119.07                42,441,119.07

     Account receivable
financing

     Accounts paid in
advance

     Other account
                                       159,677,969.59               159,677,969.59
receivable

         Including: Interest
receivable

                  Dividend
receivable

     Inventories                         8,806,338.26

     Contract assets

     Assets held for sale

     Non-current asset due
within one year

     Other current assets               50,068,745.74                50,068,745.74

Total current assets                   431,019,687.46               431,019,687.46

Non-current assets:

     Creditors’ investment

     Available-for-sale
financial assets

     Other creditors’

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investment

        Held-to-maturity
investment

        Long-term account
receivable

        Long-term equity
                                   4,212,554,063.36             4,212,554,063.36
investment

        Other equity instrument
investment

        Other non-current
financial assets

        Investment real estate       17,929,684.70                 17,929,684.70

        Fixed assets                 31,417,912.54                 31,417,912.54

        Construction in progress

        Productive biological
                                        407,078.92                   407,078.92
asset

        Oil and gas asset

        Right-of-use asset

        Intangible assets             6,663,692.30                  6,663,692.30

        Expense on Research
and Development

        Goodwill

        Long-term expenses to
                                        409,621.50                   409,621.50
be apportioned

        Deferred income tax
                                      5,630,538.80                  5,630,538.80
asset

        Other non-current asset

Total non-current asset            4,275,012,592.12             4,275,012,592.12

Total assets                       4,706,032,279.58             4,706,032,279.58

Current liabilities:

        Short-term loans

        Tradable financial
liability

        Financial liability
measured by fair value and
with variation reckoned into
current gains/losses


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     Derivative financial
liability

     Note payable

     Account payable              73,705,646.54                73,705,646.54

     Accounts received in
                                    124,945.74                   124,945.74
advance

     Contract liability

     Wage payable                  6,448,561.16                 6,448,561.16

     Taxes payable                 2,702,655.24                 2,702,655.24

     Other account payable       232,109,084.76               232,109,084.76

        Including: Interest
payable

                Dividend
payable

     Liability held for sale

     Non-current liabilities
due within one year

     Other current liabilities

Total current liabilities        315,090,893.44               315,090,893.44

Non-current liabilities:

     Long-term loans

     Bonds payable

        Including: preferred
stock

                Perpetual
capital securities

     Lease liability

     Long-term account
payable

     Long-term wage
payable

     Accrual liabilities

     Deferred income                  46,129.96                    46,129.96

     Deferred income tax
                                      10,965.46                    10,965.46
liabilities

     Other non-current
liabilities

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Total non-current liabilities                 57,095.42                             57,095.42

Total liabilities                       315,147,988.86                       315,147,988.86

Owners’ equity:

      Share capital                   1,152,535,254.00                  1,152,535,254.00

      Other equity instrument

         Including: preferred
stock

                    Perpetual
capital securities

      Capital public reserve          3,018,106,568.27                  3,018,106,568.27

      Less: Inventory shares

      Other comprehensive
income

      Reasonable reserve

      Surplus public reserve             54,736,482.14                        54,736,482.14

      Retained profit                   165,505,986.31                       165,505,986.31
Total owners’ equity                 4,390,884,290.72                  4,390,884,290.72
Total liabilities and owner’s
                                      4,706,032,279.58                  4,706,032,279.58
equity

Explanation on adjustment


(4) Retrospective adjustment of early comparison data description when initially implemented the new
financial instrument standards and new leasing standards

□ Applicable √Not applicable


45. Other

VI. Taxes

1. Type of tax and rate for main applicable tax


                       Taxes                           Basis                                        Rate
                                    The output tax is calculated on the basis of
                                    the sales of goods and the taxable service
                                    income calculated according to the tax law.
VAT                                                                                 16%, 10%, 6%, 5%, 3%
                                    After deducting the input tax amount that
                                    is allowed to be deducted in the current
                                    period,   the   difference   part   is    the


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                                         value-added tax payable.



Urban maintenance and construction tax   Turnover tax payable                         7%, 5%

Enterprise income tax                    Taxable income                               25%, 15%, 0%

Educational surtax                       Turnover tax payable                         5%



Rate of enterprise income tax for different taxpaying body:
                        Taxpaying body                                                  Income tax rate

The Company                                                     25%

Shenbao Huacheng                                                15%

Including: Shantou Branch of Shenbao Huacheng                   25%

Wuyuan Ju Fang Yong                                             15%

Shenbao Sanjing                                                 25%

Huizhou Shenbao Technology                                      25%

Huizhou Shenbao Food                                            25%

Shenbao Property                                                25%

Shenbao Industrial & Trading                                    25%

Hangzhou Ju Fang Yong                                           25%

Shenbao Technology Center                                       25%

Fuhaitang Ecological                                            25%

Chunshi Network                                                 25%

Shenshenbao Investment                                          25%

Shenshenbao Tea Culture                                         25%

Yunnan Supply Chain                                             25%

Ju Fang Yong Trading                                            25%

Shenbao Rock Tea                                                25%

Pu’er Tea Trading Center                                       25%

Shenbao Tea-Shop                                                25%

Fuhaitang Catering                                              25%

SZCG                                                            25%, tax exemption for some businesses

Shenliang Real Estate Development                               25%

Shenzhen Flour                                                  Tax free

Shenliang Quality Inspection                                    25%

Hualian Grain & oil trading                                     25%


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Shenliang Cold-Chain Logistic                             15%

Shenliang Doximi                                          25%

Hainan Haitian                                            25%

Dongguan Shenliang Logistics                              25%

Shenliang Big Kitchen                                     15%

Shenliang Storage (Yingkou) )                             25%

Shenliang Property                                        25%

Dongguan Food Industrial Park                             25%

 Dongguan Food Trade                                      25%

Dongguan Jinying                                          25%

Shuangyashan Shenliang Zhongxin                           25%

Hongxinglong Nongken Industrial Park                      25%


2. Tax preferential


(i)VAT discounts and approval
According to the “Notice of the Ministry of Finance and the State Administration of Taxation on the Issues
Concerning the VAT Collection and Exemption of Grain Enterprises (CSZ [1999] No. 198)” and “Shenzhen Tax
Service, State Taxation Administration and Shenzhen Finance Bureau SGSF (SCF [1999] No.428)”, confirming
that SZCG, the Company’s subsidiary, and its subsidiaries, are state-owned grain purchase and sale enterprises
that undertake grain collection and storage tasks for Shenzhen, the grain sold is subject to tax-free declaration by
rule and enjoys the exemption from VAT. In addition, according to the stipulation of the “Announcement of State
Administration of Taxation on Relevant Management Matters After Clarifying the Cancellation of the Approval of
Some VAT Preferential Policies” (SAT Announcement 2015 No. 38), the approval for exemption from VAT and
the involved tax review and approval procedures for the state-owned grain enterprises that undertake grain
collection and storage tasks, other grain enterprises that operate tax-free projects and enterprises that have edible
vegetable oil sales business for government reserves are cancelled and changed to record management. The
taxpayer does not change the content of the record materials during the period of tax exemption can be put on a
one-time record. In December 2013, SZCG obtained the notice of the VAT preferential record (SGSFJBM [2013]
No.2956) from Shenzhen Futian State Administration of Taxation. In the case of no change in policy, this limited
filing period started on January 1st, 2014. The VAT input tax amount of the preferential item was separately
accounted for, and the input VAT calculation method cannot be changed within 36 months after the selection. As
of December 31, 2018, the tax exemption policy has been in effect since its filing in 2014, and the company’s VAT
input tax has not changed since it was accounted for separately in 2014, so the company continues to enjoy the tax
preference.
(ii) Stamp duty, house property tax, and urban land use tax preferences
According to the stipulations of “Notice of the Ministry of Finance and the State Administration of Taxation on

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the Relevant Tax Policies Concerning Some National Reserved Commodities (CS [2019] No. 77)”, confirming
that the fund account book of SZCG, the Company’s subsidiary, and its direct depots is exempt from stamp duty,
confirming that the written purchase and sale contracts of SZCG in the process of undertaking the commodity
reserve business are exempt from stamp duty, and confirming that SZCG’s house property and land used for the
commodity reserve business are exempt from house property tax and urban land use tax. The execution time limit
for this tax preference policy is up to December 31, 2021.


 (iii) Enterprise income tax
(1) Shenbao Huacheng, a subsidiary of the Company, obtained the “High-tech Enterprise Certificate” (Certificate
number is GR201744203462) jointly issued by Shenzhen Science and Technology Innovation Committee,
Shenzhen Financial Committee, Shenzhen Tax Service, State Taxation Administration and Shenzhen Local
Taxation Bureau on October 31, 2017, which is valid for three years. According to the relevant preferential
policies of the state for high-tech enterprises, the qualified high-tech enterprises shall pay the corporate income
tax at a reduced income tax rate of 15% within three years from the year of the determination, and Shenbao
Huacheng enjoys the tax preferential policy from 2017 to 2019.


(2) The Company’s subsidiary, Wuyuan Jufangyong, obtained the “High-tech Enterprise Certificate” (Certificate
number is GR201836000703) jointly issued by the Science and Technology Department of Jiangxi Province, the
Finance Department of Jiangxi Province, and Jiangxi Provincial Tax Service, State Taxation Administration on
August 13, 2018, which is valid for three years. According to the relevant preferential policies of the state for
high-tech enterprises, the qualified high-tech enterprises shall pay the corporate income tax at a reduced income
tax rate of 15% within three years from the year of the determination, and Wuyuan Jufangyong enjoys the tax
preferential policy from 2018 to 2020.


(3) According to the “Notice on the Issues Concerning the Treatment of Corporate Income Taxes for Fiscal Funds
of Special Purposes of the Ministry of Finance and the State Administration of Taxation (CS [2009] No. 87), the
government service income obtained by SZCG, the Company’s subsidiary, and its subsidiaries from the
government’s grain reserve business is a special-purpose fiscal fund, which can be used as non-taxable income if
eligible and is deducted from the total income when calculating the taxable income. The expenses arising from the
above-mentioned non-taxable income for expenditure shall not be deducted when calculating the taxable income;
the calculated depreciation and amortization of the assets formed by non-taxable income for expenditure shall not
be deducted when calculating the taxable income.


(4) Shenzhen Flour, a subsidiary of the Company, is a flour primary processing enterprise, according to the
stipulations of the “Notice on Issuing the Scope (Trial) of Primary Processing of Agricultural Products Applicable
to the Corporate Income Tax Preferential Policy (CS [2008] No. 149)” and the “Supplementary Notice on the
Scope of Primary Processing of Agricultural Products Applicable to the Corporate Income Tax Preferential Policy

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of the Ministry of Finance and the State Administration of Taxation” (CS [2011] No. 26), the wheat primary
processing is exempt from income tax.
(5) According to the Article one of the “Notice of the Ministry of Finance and the State Administration of Taxation
on the Corporate Income Tax Preferential Policies and Preferential Catalogue for Guangdong Hengqin New
District, Fujian Pingtan Comprehensive Experimental Zone, and Shenzhen Qianhai Shenzhen-Hong Kong
Modern Service Industry Cooperation Zone” (CS [2014] No.26), levy the corporate income tax at a reduced
income tax rate of 15% for the encouraged industrial enterprises located in Hengqin New District, Pingtan
Comprehensive Experimental Zone and Qianhai Shenzhen-Hong Kong Modern Service Industry Cooperation
Zone. The Company’s subsidiaries, Shenliang Cold-Chain Logistic and Shenliang Big Kitchen, are registered in
Shenzhen Qianhai Cooperation Zone and meet the preferential tax conditions, according to the relevant policies in
the Cooperation Zone, their income tax enjoys a tax preference of 15%, and this preferential tax policy shall be up
to 2020.




3. Other

   Nil


VII. Annotation to main items of consolidated financial statements


1. Monetary funds

                                                                                                             RMB/CNY

                    Item                          Ending balance                         Opening balance

Cash on hand                                                        248,295.15                              282,322.45

Cash in bank                                                  189,525,109.14                         631,190,032.12

Other monetary fund                                                 141,081.10                              165,985.11

Total                                                         189,914,485.39                         631,638,339.68

Other explanation
    The Company did not has account pledge, freeze or has potential risks in collection ended as 30 June 2019

2. Tradable financial assets

                                                                                                             RMB/CNY

                    Item                          Ending balance                         Opening balance

Financial assets measured by fair value and
with variation reckoned into current                               1,153,309.17                            1,124,927.96
gains/losses

  Including:

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                                                                                 深圳市深粮控股股份有限公司 2019 年半年度报告全文


Equity investment instrument                                                     1,153,309.17                                     1,124,927.96

  Including:

Total                                                                            1,153,309.17                                     1,124,927.96

Other explanation:

Ending balance refers to the 258,011 shares of A-stock under the name of “CBC-A”



3. Derivative financial assets

                                                                                                                                    RMB/CNY

                      Item                                     Ending balance                                Opening balance

Other explanation:


4. Note receivable

(1) Category

                                                                                                                                    RMB/CNY

                      Item                                     Ending balance                                Opening balance

Bank acceptance bill                                                               350,756.64                                     1,027,635.04

Total                                                                              350,756.64                                     1,027,635.04

                                                                                                                                    RMB/CNY

                                             Ending balance                                             Opening balance

                             Book balance      Bad debt provision                     Book balance          Bad debt provision
        Category                                                        Book                                                          Book
                                                         Accrual                                                       Accrual
                         Amount      Ratio      Amount                  value      Amount       Ratio       Amount                    value
                                                              ratio                                                       ratio

  Including:

  Including:

Bad debt provision accrual on single basis:
                                                                                                                                    RMB/CNY

                                                                            Ending balance
           Name
                                  Book balance               Bad debt provision             Accrual ratio              Accrual causes

Bad debt provision accrual on portfolio:
                                                                                                                                    RMB/CNY

                                                                                 Ending balance
               Name
                                              Book balance                      Bad debt provision                   Accrual ratio

Explanation on portfolio determines:


                                                                      133
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If the provision for bad debts of note receivable is made in accordance with the general model of expected credit losses, please refer to
the disclosure of other account receivables to disclose related information about bad-debt provisions:



□ Applicable √Not applicable


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

Bad debt provision accrual in the period:
                                                                                                                             RMB/CNY

                                                               Amount changed in the period
      Category             Opening balance                                                                          Ending balance
                                                    Accrual         Collected or reversal       Written-off

Including major amount bad debt provision that collected or reversal in the period:
□ Applicable √Not applicable


(3) Note receivable that pledged at period-end

                                                                                                                             RMB/CNY

                                 Item                                                 Amount pledged at period-end


(4) Notes endorsement or discount and undue on balance sheet date

                                                                                                                             RMB/CNY

                    Item                         Amount derecognition at period-end         Amount not derecognition at period-end


(5) Notes transfer to account receivable due for failure implementation by drawer at period-end

                                                                                                                             RMB/CNY

                                 Item                                      Amount transfer to account receivable at period-end

Other explanation


(6) Note receivable actually written-off in the period

                                                                                                                             RMB/CNY

                                 Item                                                       Amount written-off

Including important note receivable that written-off:
                                                                                                                             RMB/CNY

                                                                                               Procedure of       Resulted by related
      Enterprise                 Nature       Amount written-off     Written-off causes
                                                                                                written-off        transaction (Y/N)

Explanation on note receivable written-off



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5. Account receivable

(1)Category

                                                                                                                                 RMB/CNY

                                           Ending balance                                             Opening balance

                         Book balance        Bad debt provision                      Book balance        Bad debt provision
        Category                                                      Book
                                                         Accrual                                                    Accrual Book value
                       Amount      Ratio      Amount                  value       Amount      Ratio     Amount
                                                            ratio                                                    ratio

Account receivable
with bad debt          100,508,               98,754,4              1,753,930 100,920,8                 99,166,94               1,753,930.4
                                  13.91%                  98.25%                              17.40%                 98.26%
provision accrual on     379.06                  48.60                      .46      79.06                   8.60                        6
a single basis

Including:

Account receivable
with single
significant amount     10,455,6               10,455,6                            10,455,62             10,455,62
                                    1.45%                100.00%                               1.80%                100.00%
and withdrawal bad        27.54                  27.54                                 7.54                  7.54
debt provision on
single basis

Account receivable
with single minor
amount but with bad    90,052,7               88,298,8              1,753,930 90,465,25                 88,711,32               1,753,930.4
                                  12.46%                  98.05%                              15.60%                 98.06%
debts provision           51.52                  21.06                      .46        1.52                  1.06                        6
accrued on a single
basis

Account receivable
with bad debt          622,241,               6,164,69              616,077,2 479,058,9                 7,165,979               471,892,95
                                  86.09%                    0.99%                             82.60%                    1.50%
provision accrual on     934.11                   6.86                    37.25      35.68                    .50                     6.18
portfolio

Including:

Related party and      159,082,                                     159,082,3 37,904,55                                         37,904,559.
                                  22.01%                                                       6.54%
petty cash               329.20                                           29.20        9.66                                             66

                       463,159,               6,164,69              456,994,9 441,154,3                 7,165,979               433,988,39
Age portfolio                     64.08%                    1.33%                             76.06%                    1.62%
                         604.92                   6.86                    08.06      76.02                    .50                     6.52

                       722,750,               104,919,              617,831,1 579,979,8                 106,332,9               473,646,88
Total                             100.00%                 14.52%                              100.00%                18.33%
                         313.17                 145.46                    67.71      14.74                  28.10                     6.64

Bad debt provision accrual on single basis:10,455,627.54 Yuan
                                                                                                                                 RMB/CNY

Name                      Ending balance

                                                                    135
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                                Book balance           Bad debt provision           Accrual ratio              Accrual causes

Account receivable with
single significant amount
and withdrawal bad debt
provision on single basis

Guangzhou Jinhe Feed                                                                                    Slightly possibly taken
                                     10,455,627.54               10,455,627.54                100.00%
Co., Ltd                                                                                                back

Total                                10,455,627.54               10,455,627.54 --                       --

Bad debt provision accrual on single basis: 88,298,821.06 Yuan
                                                                                                                        RMB/CNY

                                                                       Ending balance
            Name
                                Book balance           Bad debt provision           Accrual ratio              Accrual causes

Account receivable with
single minor amount but
with bad debts provision
accrued on a single basis
at period-end

Shenzhen Faqun                                                                                          Slightly possibly taken
                                      4,582,156.00                4,582,156.00                100.00%
Industrial Co., Ltd.                                                                                    back

                                                                                                        Slightly possibly taken
Li Shaoyu                             2,929,128.53                2,929,128.53                100.00%
                                                                                                        back

Zhuhai Doumen Huabi                                                                                     Slightly possibly taken
                                      2,396,327.14                2,396,327.14                100.00%
Feed Co., Ltd                                                                                           back

Chongqing Zhongxing                                                                                     Slightly possibly taken
                                      2,354,783.30                2,354,783.30                100.00%
Food Industry Co., Ltd.                                                                                 back

                                                                                                        Slightly possibly taken
Hengyang Feed Plant                   1,907,679.95                1,907,679.95                100.00%
                                                                                                        back

Beijing Zhongwang Food                                                                                  Slightly possibly taken
                                      1,873,886.58                1,873,886.58                100.00%
Co., Ltd.                                                                                               back

Sichuan Zhongxing Food                                                                                  Slightly possibly taken
                                      1,698,103.22                1,698,103.22                100.00%
Industry Co., Ltd.                                                                                      back

Shenzhen Buji
Agricultural Products
                                                                                                        Slightly possibly taken
Wholesale Center Market               1,534,512.45                1,534,512.45                100.00%
                                                                                                        back
Xingmin Commercial
Shop

Other account receivable
                                                                                                        Slightly possibly taken
with over 3 years for                70,776,174.35               69,022,243.89                 97.52%
                                                                                                        back
Slightly possibly taken


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back

Total                                  90,052,751.52                88,298,821.06 --                         --

Bad debt provision accrual on single basis:
                                                                                                                              RMB/CNY

                                                                           Ending balance
            Name
                                 Book balance                Bad debt provision         Accrual ratio               Accrual causes

Bad debt provision accrual on portfolio: 6,164,696.86Yuan
                                                                                                                              RMB/CNY

                                                                              Ending balance
               Name
                                              Book balance                  Bad debt provision                    Accrual ratio

Within one year                                     459,556,076.84                      4,595,560.77                              1.00%

1-2 years                                              1,082,033.98                         108,203.40                            10.00%

2-3 years                                               311,445.72                           93,433.72                            30.00%

3-4 years                                              1,057,518.76                         528,759.39                            50.00%

4-5 years                                               277,613.73                          138,806.87                            50.00%

Over 5 years                                            874,915.89                          699,932.71                            80.00%

Total                                               463,159,604.92                      6,164,696.86 --

Explanation on portfolio determines:
Bad debt provision accrual on portfolio:
                                                                                                                              RMB/CNY

                                                                              Ending balance
               Name
                                              Book balance                  Bad debt provision                    Accrual ratio

Explanation on portfolio determines:
If the provision for bad debts of account receivable is made in accordance with the general model of expected credit losses, please refer
to the disclosure of other account receivables to disclose related information about bad-debt provisions:



□ Applicable √Not applicable
By account age
                                                                                                                              RMB/CNY

                           Account age                                                         Ending balance

Within one year(one year included)                                                                                       617,070,571.01

Within one year(one year included)                                                                                       617,070,571.01

1-2 years                                                                                                                  1,082,033.98

2-3 years                                                                                                                    311,445.72

Over 3 years                                                                                                             104,286,262.46

   3-4 years                                                                                                               1,057,518.76

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  4-5 years                                                                                                                    277,613.73

  Over 5 years                                                                                                           102,951,129.97

Total                                                                                                                    722,750,313.17


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

Bad debt provision accrual in the period:
                                                                                                                                RMB/CNY

                                                                  Amount changed in the period
        Category            Opening balance                                                                            Ending balance
                                                        Accrual         Collected or reversal      Written-off

Bad debt provision
accrual on single                  99,166,948.60                                 412,500.00                               98,754,448.60
basis

Age portfolio                       7,165,979.50           252,985.38           1,254,268.02                                  6,164,696.86

Total                             106,332,928.10           252,985.38           1,666,768.02                             104,919,145.46

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

                     Enterprise                         Amount collected or reversal                         Collection way


(3) Account receivable actually written-off in the period

                                                                                                                                RMB/CNY

                                    Item                                                        Amount written-off

Including major account receivable written-off
                                                                                                                                RMB/CNY

                                                                                                   Procedure of      Resulted by related
        Enterprise                 Nature          Amount written-off    Written-off causes
                                                                                                    written-off       transaction (Y/N)

Explanation on account receivable written-off


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

Total period-end balance of top five receivables by arrears party amounting to 447,155,799.70 Yuan, takes 61.87 percent of the total
account receivable at period-end, bad debt provision accrual correspondingly at year-end amounting as 722,114.57 Yuan.




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(5) Account receivable derecognition due to financial assets transfer

(6) Assets and liabilities resulted by account receivable transfer and continues involvement

Other explanation:


6. Account receivable financing

                                                                                                                               RMB/CNY

                      Item                                 Ending balance                              Opening balance

Changes of account receivable financing and change of fair value in the period
□ Applicable √Not applicable
If the impairment provision of account receivable financing is made in accordance with the general model of expected credit losses,
please refer to the disclosure of other account receivables to disclose related information about impairment provision:



□ Applicable √Not applicable
Other explanation:


7. Accounts paid in advance

(1) By account age

                                                                                                                               RMB/CNY

                                             Ending balance                                        Opening balance
        Account age
                                    Amount                      Ratio                     Amount                      Ratio

Within one year                       25,907,038.42                     98.91%              83,282,051.24                       99.51%

1-2 years                                  22,283.22                     0.09%                   70,556.78                       0.08%

2-3 years                                                                                          7,670.34                      0.01%

Over 3 years                              260,606.46                     1.00%                 336,591.71                        0.40%

Total                                 26,189,928.10               --                        83,696,870.07                 --

Explanation on reasons of failure to settle on important account paid in advance with age over one year
The closing balance of prepayments decreased by RMB 57,506,941.97 compared with the beginning of the period, with a decrease ratio
of 69%, it was mainly because the Company’s subsidiary Dongguan Shenliang Logistics signed a purchase contract with Xiamen
Mingsui Grain and Oil Trading Co., Ltd. and prepaid the payment at the end of December 2018, resulting in large balance of the
payment at the beginning of the period.




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

Total period-end balance of top five account paid in advance by prepayment object amounted to 21,379,819.55 Yuan, takes 81.63
percent of the total advance payment at period-end.



Other explanation:


8. Other account receivable

                                                                                                                          RMB/CNY

                      Item                               Ending balance                              Opening balance

Interest receivable                                                                                                    561,500.00

Other account receivable                                                 57,624,419.71                             33,241,928.45

Total                                                                    57,624,419.71                             33,803,428.45


(1) Interest receivable

1) Category
                                                                                                                          RMB/CNY

                      Item                               Ending balance                              Opening balance

Time deposit                                                                                                           561,500.00

Total                                                                                                                  561,500.00

2) Significant overdue interest
                                                                                                                          RMB/CNY

                                                                                                           Whether impairment
        Borrower                  Ending balance          Overdue time             Overdue causes        occurs and its judgment
                                                                                                                  basis

Other explanation:
3) Accrual of bad debt provision
□ Applicable √Not applicable


(2) Dividend receivable

1) Category
                                                                                                                          RMB/CNY

        Item (or invested enterprise)                    Ending balance                              Opening balance

2)   Important dividend receivable with account age over one year
                                                                                                                          RMB/CNY

     Item (or invested                                                             Reasons for not         Whether impairment
                                  Ending balance          Account age
        enterprise)                                                                  collection          occurs and its judgment
                                                               140
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                                                                                                                        basis

3) Accrual of bad debt provision
□ Applicable √Not applicable
Other explanation:


(3) Other account receivable

1) By nature
                                                                                                                                RMB/CNY

                     Nature                               Ending book balance                            Opening book balance

Margin and deposit                                                          45,434,104.15                                11,160,677.29

Export tax rebate                                                             3,085,206.14                                  312,364.06

Intercourse funds and other                                                101,951,791.76                               119,759,129.21

Total                                                                      150,471,102.05                               131,232,170.56

2) Accrual of bad debt provision
                                                                                                                                RMB/CNY

                                     Phase I                  Phase II                       Phase III

                                 Expected credit      Expected credit losses for    Expected credit losses for
   Bad debt provision                                                                                                    Total
                               losses over next 12   the entire duration (without   the entire duration (with
                                    months           credit impairment occurred) credit impairment occurred)

Balance on Jan. 1, 2019                  91,037.53                  7,300,675.36                 90,598,529.22           97,990,242.11

Balance of Jan. 1, 2019
                                      ——                      ——                          ——                       ——
in the period

Current accrual                          12,330.41                                                   204,763.49             217,093.90

Current reversal                                                    5,360,653.67                                          5,360,653.67

Balance on Jun. 30, 2019                103,367.94                  1,940,021.69                 90,803,292.71           92,846,682.34

Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
By account age
                                                                                                                                RMB/CNY

                              Account age                                                       Ending balance

Within one year(one year included)                                                                                       50,038,334.00

Within one year(one year included)                                                                                       50,038,334.00

1-2 years                                                                                                                 4,038,032.96

2-3 years                                                                                                                   947,859.87

Over 3 years                                                                                                             95,446,875.22

  3-4 years                                                                                                                 112,539.37

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   4-5 years                                                                                                                        930,794.83

   Over 5 years                                                                                                                  94,403,541.02

Total                                                                                                                           150,471,102.05

3) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
                                                                                                                                      RMB/CNY
                                                                     Amount changed in the period
          Category                 Opening balance                                                                          Ending balance
                                                                 Accrual               Collected or reversal
Other account receivable
with single minor amount
but      with    bad      debt             44,887,199.60                                                                         44,887,199.60
provision       accrual    on
single basis
Other account receivable
with single major amount
and      with    bad      debt             45,711,329.62                204,763.49                                                45,916,093.11
provision       accrual    on
single basis

Aging analysis portfolio                    7,391,712.89                   12,330.41              5,360,653.67                     2,043,389.63

Total                                      97,990,242.11                217,093.90                5,360,653.67                   92,846,682.34

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

                     Enterprise                        Amount reversal or collected                          Collection way

Shenzhen Yixin Investment Co., Ltd                                              5,111,304.11 Amount collected

Total                                                                           5,111,304.11                           --

4) Other account receivable actually written-off in the period
                                                                                                                                      RMB/CNY

                                  Item                                                         Amount written-off

Including important other account receivable written-off
                                                                                                                                      RMB/CNY

                                                                                                  Procedure of              Resulted by related
        Enterprise                Nature         Amount written-off     Written-off causes
                                                                                                   written-off               transaction (Y/N)

Explanation on other account receivable written-off
5) Top 5 other receivables at ending balance by arrears party
                                                                                                                                      RMB/CNY

                                                                                               Ratio in total ending
                                                                                                                            Ending balance of
        Enterprise                Nature           Ending balance           Account age          balance of other
                                                                                                                             bad debt reserve
                                                                                               account receivables

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Changzhou Shenbao
                                                                     Within one year;
Chacang E-business Intercourse funds                 20,618,710.83                                        13.70%          18,024,144.51
                                                                     1-4 year and above
Co., ltd.

Shenzhen Gaojian
Food Joint Venture     Intercourse funds                8,326,202.63 Over 5 years                            5.53%           416,310.13
Co., Ltd

Shenzhen Sha Tau
Kok Import &           Intercourse funds                8,285,803.57 Over 5 years                            5.51%           414,290.18
Export Corporation

Jinzhou Tianli Grain
                       Margin                           5,743,108.32 Within one year                         3.82%           287,155.42
Trading Co., Ltd.

Shenzhen
Changjiang
                       Intercourse funds                5,677,473.59 Over 5 years                            3.77%           283,873.68
Development Co.,
Ltd.

Total                            --                  48,651,298.94             --                         32.33%          19,425,773.92

6) Other account receivables related to government grants
                                                                                                                              RMB/CNY

                                                                                                               Time, amount and basis
        Enterprise              Government grants            Ending balance            Ending account age
                                                                                                                for collection predicted

7) Other receivable for termination of confirmation due to the transfer of financial assets
8) The amount of assets and liabilities that are transferred other receivable and continued to be involved
Other explanation:


9. Inventories

Whether implemented the new revenue standards
□Yes √No


(1) Category

                                                                                                                              RMB/CNY

                                        Ending balance                                               Opening balance
        Item                               Falling price                                              Falling price
                       Book balance                            Book value           Book balance                         Book value
                                             reserves                                                   reserves

Raw materials           68,342,539.38       24,106,831.49      44,235,707.89         63,928,125.50     19,906,198.09      44,021,927.41

Goods in process        13,823,647.30                          13,823,647.30         23,840,568.24          68,371.10     23,772,197.14

Finished goods       3,079,344,347.80       95,464,608.75 2,983,879,739.05 2,827,653,415.87           101,081,767.83 2,726,571,648.04

Revolving
                         9,752,899.65        1,618,111.19       8,134,788.46         10,843,165.99        941,939.14       9,901,226.85
material
                                                                   143
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Goods in transit         3,409,547.41                       3,409,547.41     7,410,407.72                          7,410,407.72

Work in
process-outsource          109,884.08                          109,884.08    5,415,695.35      5,290,502.32          125,193.03
d

Total                 3,174,782,865.62   121,189,551.43 3,053,593,314.19 2,939,091,378.67    127,288,778.48 2,811,802,600.19

Whether the Company needs to comply with the disclosure requirement of Industry Information Disclosure Guidelines of Shenzhen
Stock Exchange No.4 -Listed Companies Engaged in Seed Planting Business
No


(2)Falling price reserves of inventories

                                                                                                                      RMB/CNY

                                           Current amount increased           Current amount decreased
        Item          Opening balance                                       Reversal or                         Ending balance
                                           Accrual             Other                            Other
                                                                             write-off

Raw materials           19,906,198.09      8,220,891.21                      4,020,257.81                         24,106,831.49

Goods in process            68,371.10                                           68,371.10

Finished goods         101,081,767.83     54,067,440.32                     59,684,599.40                         95,464,608.75

Revolving
                           941,939.14       676,172.05                                                             1,618,111.19
material

Goods in transit

Work in
process-outsource        5,290,502.32                                        5,290,502.32
d

Total                  127,288,778.48     62,964,503.58                     69,063,730.63                        121,189,551.43


(3) Explanation on inventories with capitalization of borrowing costs included at ending balance

     Nil


(4) Assets unsettled formed by construction contract which has completed at period-end

                                                                                                                      RMB/CNY

                               Item                                                         Amount

Other explanation:


10. Contract assets

                                                                                                                      RMB/CNY

               Item                           Ending balance                                  Opening balance

                                                                144
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                                                    Impairment                                         Impairment
                                 Book balance                         Book value     Book balance                       Book value
                                                    provision                                           provision

Amount and reasons for the major changes of book value of contract assets in the period
                                                                                                                             RMB/CNY

              Item                      Amount changed                                        Cause of change
If the bad debt provision of accrual contract is made in accordance with the general model of expected credit losses, please refer to the
disclosure of other account receivables to disclose related information about bad debt provision:



□ Applicable √Not applicable
Impairment provision of contract assets in the period
                                                                                                                             RMB/CNY

             Item                 Current accrual          Current reversal          Charge off/Written-off           Causes

Other explanation:


11. Assets held for sale

                                                                                                                             RMB/CNY

                      Ending book          Impairment           Ending book                           Estimated          Estimated
       Item                                                                        Fair value
                            balance         provision              value                             disposal cost     disposal time

Other explanation:


12. Non-current asset due within one year

                                                                                                                             RMB/CNY

                     Item                                   Ending balance                               Opening balance

Important creditors’ investment/Other creditors’ investment
                                                                                                                             RMB/CNY

                                                Ending balance                                      Opening balance
             Item                                                      Maturity                                             Maturity
                              Face value Coupon rate Actual rate                    Face value Coupon rate Actual rate
                                                                           date                                                date

Other explanation:


13. Other current assets

Whether implemented the new revenue standards
□Yes √No
                                                                                                                             RMB/CNY

                     Item                                   Ending balance                               Opening balance

Enterprise income tax paid in advance                                              9,719.32                                 394,677.16

                                                                    145
                                                                                   深圳市深粮控股股份有限公司 2019 年半年度报告全文


VAT input tax ready for deduction                                                 78,086,632.70                                     88,918,809.39

Financial products held to maturity within
                                                                                  30,000,000.00                                   160,000,000.00
one year

Other                                                                                    2,315.03                                    5,180,277.49

Total                                                                            108,098,667.05                                   254,493,764.04

Other explanation:


14. Creditors’ investment

                                                                                                                                        RMB/CNY

                                          Ending balance                                                    Opening balance
        Item                                 Impairment                                                         Impairment
                      Book balance                                 Book value            Book balance                               Book value
                                               provision                                                         provision

Important creditors’ investment
                                                                                                                                        RMB/CNY

                                                 Ending balance                                                 Opening balance
           Item                                                               Maturity                                                  Maturity
                            Face value Coupon rate Actual rate                             Face value Coupon rate Actual rate
                                                                                date                                                        date

Accrual of impairment provision
                                                                                                                                        RMB/CNY

                                     Phase I                       Phase II                         Phase III

                                 Expected credit       Expected credit losses for         Expected credit losses for
   Bad debt provision                                                                                                               Total
                            losses over next 12       the entire duration (without         the entire duration (with
                                    months           credit impairment occurred) credit impairment occurred)

Balance of Jan. 1, 2019
                                      ——                          ——                             ——                           ——
in the period

Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
Other explanation:


15. Other creditors’ investment

                                                                                                                                        RMB/CNY

                                                                                                                         Loss
                                                                                                                       impairment
                                                    Change of                                        Accumulated
                     Opening          Accrual                          Ending                                         accumulated
        Item                                       fair value in                          Cost         change of                            Note
                     balance          interest                         balance                                       recognized in
                                                    the period                                         fair value
                                                                                                                         other
                                                                                                                      comprehensi


                                                                       146
                                                                               深圳市深粮控股股份有限公司 2019 年半年度报告全文


                                                                                                                 ve income

Important other creditors’ investment
                                                                                                                                 RMB/CNY

                                               Ending balance                                            Opening balance
     Other 债权 Item                                                     Maturity                                                Maturity
                            Face value Coupon rate Actual rate                      Face value Coupon rate Actual rate
                                                                           date                                                      date

Accrual of impairment provision
                                                                                                                                 RMB/CNY

                                     Phase I                  Phase II                       Phase III

                                 Expected credit      Expected credit losses for    Expected credit losses for
   Bad debt provision                                                                                                        Total
                             losses over next 12     the entire duration (without   the entire duration (with
                                    months           credit impairment occurred) credit impairment occurred)

Balance of Jan. 1, 2019
                                      ——                      ——                          ——                           ——
in the period

Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
Other explanation:


16. Long-term account receivable

(1) Long-term account receivable

                                                                                                                                 RMB/CNY

                                      Ending balance                                     Opening balance
                                                                                                                             Discount rate
       Item                              Bad debt                                           Bad debt
                     Book balance                        Book value       Book balance                       Book value         interval
                                         provision                                          provision

Impairment of bad debt provision
                                                                                                                                 RMB/CNY

                                     Phase I                  Phase II                       Phase III

                                 Expected credit      Expected credit losses for    Expected credit losses for
   Bad debt provision                                                                                                        Total
                             losses over next 12     the entire duration (without   the entire duration (with
                                    months           credit impairment occurred) credit impairment occurred)

Balance of Jan. 1, 2019
                                      ——                      ——                          ——                           ——
in the period

Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable




                                                                    147
                                                                                       深圳市深粮控股股份有限公司 2019 年半年度报告全文


(2) Long-term account receivable derecognition due to financial assets transfer

(3) Assets and liabilities resulted by long-term account receivable transfer and continues involvement

Other explanation


17. Long-term equity investment

                                                                                                                                      RMB/CNY

                                                               Current changes (+,-)
                                                                                                                                       Ending
                                                                 Other                     Cash
                                                   Investme                                           Accrual                         balance
      The                  Additiona                           comprehe                  dividend
               Opening                             nt gains                    Other                     of                Ending        of
    invested                   l        Capital                  nsive                    or profit
               balance                             recognize                   equity                 impairme    Other   balance impairme
     entity                investmen reduction                  income                   announce
                                                    d under                change                        nt                              nt
                               t                               adjustmen                    d to
                                                    equity                                            provision                       provision
                                                                   t                       issued

I. Joint venture

II. Associated enterprise

Shenzhen
Shenbao
(Xinmin) 2,870,000                                                                                                        2,870,000 2,870,000
Foods                .00                                                                                                        .00           .00
Co.,
Ltd*1

Changzho
u
Shenbao
Chacang
E-busines
s Co.,
ltd.*2

Shenzhen
Shenbao
(Liaoyuan
)              57,628.53                                                                                                  57,628.53 57,628.53
Industrial
Co.,
Ltd*1

Huizhou
Shenbao        1,050,116               1,050,116
Manan                .57                     .57
Bio-techn

                                                                         148
                                            深圳市深粮控股股份有限公司 2019 年半年度报告全文


ology
Co., Ltd.

Shenzhen
Shichumi
ngmen
Restauran
t
Managem
ent Co.,
Ltd.*2

Guangzho
u
Shenbao       3,825,725   -135,033.                                      3,690,691
Mendao              .70         88                                             .82
Tea Co.,
Ltd.

Zhuhai
Hengxing
              29,510,77   666,203.0                                      30,176,97
Feed
                   1.11          1                                            4.12
Industrial
Co., Ltd.

Shenzhen
Duoxi
Equity
Investme 4,014,625        -180,833.                                      3,833,792
nt Fund             .45         30                                             .15
Managem
ent Co.,
Ltd.

Shenliang
Intelligent
Wulian
Equity
Investme
nt Fund       23,105,66   3,062,765                                      26,168,42
(Shenzhe           2.49         .12                                           7.61
n)
Partnershi
p
Enterprise
(Limited)

Shenzhen 9,492,765                                                       9,492,765


                                      149
                                                                               深圳市深粮控股股份有限公司 2019 年半年度报告全文


Shenyuan            .49                                                                                                   .49
Data
Tech. Co.,
Ltd

             73,927,29                 1,050,116 3,413,100                                                          76,290,27 2,927,628
Subtotal
                   5.34                      .57       .95                                                               9.72         .53

             73,927,29                 1,050,116 3,413,100                                                          76,290,27 2,927,628
Total
                   5.34                      .57       .95                                                               9.72         .53

Other explanation
      *1: these two companies have been established for a long time. At the current stage, their business licenses have been revoked.
Impairment provision is made in full due to absence of settlement.
      *2: the long-term equity investment for Changzhou Shenbao Chacang E-commence Co., Ltd and              Shenzhen Shichumingmen
Restaurant Management Co., Ltd. which are measured by equity; the book balance counted as Zero for losses in the two above
mentioned enterprises




18. Other equity instrument investment

                                                                                                                                RMB/CNY

                     Item                                     Ending balance                            Opening balance

Itemized the non-tradable equity instrument investment in the period
                                                                                                                                RMB/CNY

                                                                                                  Causes of those
                                                                                                   that designated
                                                                                Retained earnings measured by fair Cause of retained
                                                                                  transfer from   value and with its earnings transfer
                     Dividend income                           Cumulative
         Item                              Cumulative gains                           other           variation          from other
                          recognized                              losses
                                                                                 comprehensive      reckoned into      comprehensive
                                                                                    income              other              income
                                                                                                   comprehensive
                                                                                                       income

Other explanation:


19. Other non-current financial assets

                                                                                                                                RMB/CNY

                     Item                                     Ending balance                            Opening balance

Equity instrument investment                                                     57,500.00                                      57,500.00

Total                                                                            57,500.00                                      57,500.00

Other explanation:



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                                                                         深圳市深粮控股股份有限公司 2019 年半年度报告全文


20. Investment real estate

(1) Measured at cost

√ Applicable □Not applicable
                                                                                                                   RMB/CNY

              Item               House and building     Land use right       Construction in progress      Total

I. Original book value

1.Opening balance                      567,162,333.74                                                      567,162,333.74

2.Current amount
                                        23,277,994.41                                                       23,277,994.41
increased

(1) Outsourcing                            506,238.00                                                          506,238.00

(2) Inventory\fixed
assets\construction in
process transfer-in

(3) Increased by
combination

(4) Fixed assets
re-classify                             22,771,756.41                                                       22,771,756.41



3.Current amount
decreased

(1) Disposal

(2) Other transfer-out



4.Ending balance                       590,440,328.15                                                      590,440,328.15

II. Accumulated
depreciation and
accumulated
amortization

1.Opening balance                      284,540,148.82                                                      284,540,148.82

2.Current amount
                                        27,726,929.50                                                       27,726,929.50
increased

(1) Accrual or
                                        15,008,484.90                                                       15,008,484.90
amortization

(2) Fixed assets
                                        12,718,444.60                                                       12,718,444.60
re-classify

3.Current amount


                                                             151
                                                                   深圳市深粮控股股份有限公司 2019 年半年度报告全文


decreased

(1) Disposal

(2) Other transfer-out



4.Ending balance                 312,267,078.32                                                       312,267,078.32

III. Impairment provision

1.Opening balance

2.Current amount
increased

(1) Accrual



3. Current amount
decreased

(1) Disposal

(2) Other transfer-out



4.Ending balance

IV. Book value

1.Ending book value              278,173,249.83                                                       278,173,249.83

2. Opening book value            282,622,184.92                                                       282,622,184.92


(2) Measure on fair value

□ Applicable √Not applicable


(3) Investment real estate without property certificate completed

                                                                                                           RMB/CNY

                    Item                           Book value                               Reasons

Other explanation


21. Fixed assets

                                                                                                           RMB/CNY

                    Item                          Ending balance                         Opening balance

Fixed assets                                                    967,835,524.07                        993,136,743.51

Total                                                           967,835,524.07                        993,136,743.51



                                                       152
                                                                     深圳市深粮控股股份有限公司 2019 年半年度报告全文


(1) Fixed assets

                                                                                                                 RMB/CNY

                                             Machinery                              Electronic and other
         Item          House and buildings                    Transport equipment                             Total
                                             equipment                                  equipment

I. Original book
value:

  1.Opening balance        915,002,141.50    483,988,177.15         19,100,984.41         60,021,239.23    1,478,112,542.29

  2.Current amount
                              7,068,163.27     1,948,332.70           388,401.72           1,189,068.09      10,593,965.78
increased

     (1) Purchase              851,658.64      1,948,332.70           388,401.72           1,189,068.09       4,377,461.15

(2) Construction in
progress transfer-in

     (3) Increased
by combination

         (4)
Long-term expenses
to be apportioned
                              6,216,504.63                                                                    6,216,504.63
transfer-in and
deduct from fixed
assets disposal

  3.Current amount
                             22,972,570.10        26,000.00           250,083.23             170,679.38      23,419,332.71
decreased

     (1) Disposal or
                               200,813.69         26,000.00           250,083.23             170,679.38         647,576.30
scrap
(2) Investment real
                             22,771,756.41                                                                   22,771,756.41
estate re-classify

  4.Ending balance         899,097,734.67    485,910,509.85         19,239,302.90         61,039,627.94    1,465,287,175.36

II. Accumulated
depreciation

  1.Opening balance        180,969,012.00    243,434,618.06         13,913,087.94         36,532,801.29     474,849,519.29

  2.Current amount
                             11,138,187.50     8,714,345.81           584,438.71           5,148,706.96      25,585,678.98
increased

     (1) Accrual             11,138,187.50     8,714,345.81           584,438.71           5,148,706.96      25,585,678.98



  3.Current amount
                             12,723,481.61        13,379.16           236,714.88             136,250.82      13,109,826.47
decreased

     (1) Disposal or
                                  5,037.01        13,379.16           236,714.88             136,250.82         391,381.87
scrap

                                                          153
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(2) Investment real
                            12,718,444.60                                                                          12,718,444.60
estate re-classify

  4.Ending balance         179,383,717.89          252,135,584.71          14,260,811.77        41,545,257.43     487,325,371.80

III. Impairment
provision

  1.Opening balance           1,797,706.49           8,207,030.23              93,411.42            28,131.35      10,126,279.49

  2.Current amount
increased

     (1) Accrual



  3.Current amount
decreased

     (1) Disposal or
scrap



  4.Ending balance            1,797,706.49           8,207,030.23              93,411.42            28,131.35      10,126,279.49

IV. Book value

  1.Ending book
                           717,916,310.29          225,567,894.91           4,885,079.71        19,466,239.16     967,835,524.07
value

  2. Opening book
                           732,235,423.01          232,346,528.86           5,094,485.05        23,460,306.59     993,136,743.51
value


(2) Temporarily idle fixed assets

                                                                                                                       RMB/CNY

                                              Accumulated             Impairment
         Item          Original book value                                                    Book value            Note
                                               depreciation               provision


(3) Fixed assets by financing leased

                                                                                                                       RMB/CNY

                                                           Accumulated
            Item             Original book value                                  Impairment provision          Book value
                                                           depreciation


(4) Fixed assets leased out by operation

                                                                                                                       RMB/CNY

                              Item                                                         Ending book value



                                                                154
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(5) Fix assets without property certification held

                                                                                                                                 RMB/CNY

                                                                                                Reasons for without the property
                    Item                                     Book value
                                                                                                             certification

House and buildings                                                       322,147,486.94 Still under processing

                                                                                           Berth of wharf has right of use, no need to
House and buildings                                                       106,732,318.67
                                                                                           handle the certificate

                                                                                           The planning acceptance and construction
                                                                                           acceptance record can not be handle due to
                                                                                           the loss of planning and construction
House and buildings                                                        15,818,640.81 historical data, the approval process for
                                                                                           construction applications to relevant
                                                                                           government departments has been
                                                                                           restarted.

                                                                                           Simple and temporary buildings etc,
House and buildings                                                        16,622,783.16
                                                                                           cannot handle the property right certificate

Total                                                                     461,321,229.58

Other explanation


(6) Fixed assets disposal

                                                                                                                                 RMB/CNY

                    Item                                    Ending balance                                 Opening balance

Other explanation


22. Construction in progress

                                                                                                                                 RMB/CNY

                    Item                                    Ending balance                                 Opening balance

Construction in progress                                                  403,629,287.82                                     186,586,135.06

Total                                                                     403,629,287.82                                     186,586,135.06


(1) Construction in progress

                                                                                                                                 RMB/CNY

                                          Ending balance                                          Opening balance
        Item                               Impairment                                                   Impairment
                      Book balance                           Book value        Book balance                                  Book value
                                            provision                                                   provision

Shenbao Plaza              3,842,333.64      3,842,333.64                         3,842,333.64           3,842,333.64

                                                                 155
                                                                       深圳市深粮控股股份有限公司 2019 年半年度报告全文


project

Dongguan grain
storage and wharf     121,640,933.02                      121,640,933.02      91,924,086.19                          91,924,086.19
matching project

Deep processing
of Dongguan
                       76,182,755.87                       76,182,755.87      39,276,418.03                          39,276,418.03
Industry and
Trading Food

CDE storage of
Dongguan Food
Industrial Park       193,189,866.13                      193,189,866.13      43,391,511.05                          43,391,511.05
and wharf mating
projects

Grain storage and
                        7,635,165.71                        7,635,165.71       6,621,284.40                           6,621,284.40
processing

Supporting
projects related to     1,133,400.00                        1,133,400.00
grain supply

Workshop
transformation of                                                               711,487.37                              711,487.37
Flour Company

Other-Manageme
nt and control
system
                          408,850.00                         408,850.00
informatization
construction
project of SZCG

Transformation -
Transformer
capacity
                          597,600.06                         597,600.06
expansion project
of Pinghu
warehouse

Other                   8,489,430.15      5,648,713.12      2,840,717.03       5,564,537.76           903,189.74      4,661,348.02

Total                 413,120,334.58      9,491,046.76    403,629,287.82   191,331,658.44            4,745,523.38   186,586,135.06


(2) Changes of major construction in progress

                                                                                                                        RMB/CNY

  Item                Opening Current Transfer-   Other     Ending Proporti               Accumul Includin Interest       Capital
             Budget                                                            Progress
 Name                 balance   amount   in fixed decrease balance    on of                   ated        g:    capitaliz resources

                                                              156
                                                                   深圳市深粮控股股份有限公司 2019 年半年度报告全文


                      increased   assets   d in the              project         capitaliz amount ation rate
                                           Period                investme        ation of      of       in Period
                                                                   nt in         interest capitaliz
                                                                  budget                    ation of
                                                                                            interest
                                                                                            in Period
Donggua
n grain
storage
            91,924,0 29,716,8                         121,640,
and
              86.19      46.83                         933.02
wharf
matching
project

Deep
processi
ng of
Donggua
            39,276,4 36,906,3                         76,182,7
n
              18.03      37.84                          55.87
Industry
and
Trading
Food

CDE
storage
of
Donggua
n Food
            43,391,5 149,798,                         193,189,
Industria
              11.05     355.08                         866.13
l Park
and
wharf
mating
projects

Grain
storage
            6,621,28 1,013,88                         7,635,16
and
               4.40       1.31                           5.71
processi
ng

            181,213, 217,435,                         398,648,
Total                                                               --      --                                      --
             299.67     421.06                         720.73




                                                        157
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(3) The provision for impairment of construction in progress

                                                                                                                            RMB/CNY

                     Item                          Amount accrual in the period                       Reasons of accrual

Other explanation


(4) Engineering material

                                                                                                                            RMB/CNY

                                                 Ending balance                                      Opening balance
            Item                                   Impairment                                          Impairment
                                  Book balance                          Book value    Book balance                     Book value
                                                    provision                                           provision

Other explanation:


23. Productive biological asset

(1) Measured by cost

√ Applicable □Not applicable
                                                                                                                            RMB/CNY

        Item                     Plant            Livestock                Forestry            Fisheries               Total

                                                                           Tea tree

I. Original book
value

  1.Opening balance                                                           436,156.00                                   436,156.00

  2.Current amount
increased

     (1)Outsourcing

     (2)self-cultivate



  3.Current amount
decreased

     (1)Disposal

     (2)Other



  4.Ending balance

II. Accumulated
depreciation


                                                                  158
                                       深圳市深粮控股股份有限公司 2019 年半年度报告全文


  1.Opening balance

  2.Current amount
increased

     (1)Accrual



  3.Current amount
decreased

     (1)Disposal

     (2)Other



  4.Ending balance                      436,156.00                          436,156.00

III. Impairment
provision

  1.Opening balance                      29,077.08                           29,077.08

  2.Current amount
                                          4,846.18                            4,846.18
increased

     (1)Accrual                           4,846.18                            4,846.18



  3.Current amount
decreased

     (1)Disposal

     (2)Other



  4.Ending balance                       33,923.26                           33,923.26

IV. Book value

  1.Ending book
                                        402,232.74                          402,232.74
value

  2. Opening book
                                        407,078.92                          407,078.92
value


(2) Measured by fair value

□ Applicable √Not applicable


24. Oil and gas asset

□ Applicable √Not applicable



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25. Right-of-use asset

                                                                                                                                    RMB/CNY

                     Item                                                                                             Total

Other explanation:


26. Intangible assets

(1) Intangible assets

                                                                                                                                    RMB/CNY

                                                                                           Shop
                Land use                        Non-patent Forest tree Trademark                         Software
     Item                         Patent                                                 managemen                     Other         Total
                  right                         technology    use right     use right                    use right
                                                                                           t right

I. Original
book value


               594,651,154 46,265,918.                       22,871,704.                 3,610,487.3 10,028,021. 5,054,036.1 682,759,251
1.Opening                                                                   277,927.77
                          .35              89                         98                             7           72            2             .20
balance


2.Current      25,676,017.                                                                                                         26,630,583.
                                                                                                                      954,566.08
amount                    14                                                                                                                 22
increased

         (1)   25,676,017.                                                                                                         26,630,583.
                                                                                                                      954,566.08
Purchase                  14                                                                                                                 22

         (2)
internal
R&D

         (3)
Increased
by
combination


(4) Group
handover

  3.Current
                                2,977,317.1                                                                                        3,083,771.5
amount                                                                      106,454.45
                                           2                                                                                                  7
decreased

         (1)                    2,977,317.1                                                                                        3,083,771.5
                                                                            106,454.45
Disposal                                   2                                                                                                  7


                                                                          160
                                                               深圳市深粮控股股份有限公司 2019 年半年度报告全文




               620,327,171 43,288,601.     22,871,704.                3,610,487.3 10,028,021. 6,008,602.2 706,306,062
4.Ending                                                 171,473.32
                       .49           77            98                          7           72             0           .85
balance

II.
Accumulate
d
depreciation


               69,506,679. 24,341,841.     4,627,352.3                1,197,835.8 3,544,168.5 2,656,842.3 106,040,516
1.Opening                                                165,797.48
                       20            17             8                          6            2             5           .96
balance


2.Current      7,707,105.7                                                                       1,285,499.8 10,078,858.
                             566,196.28    430,340.55      3,347.75    54,168.03    32,200.02
amount                  2                                                                                 3           18
increased

         (1)   7,707,105.7                                                                       1,285,499.8 10,078,858.
                             566,196.28    430,340.55      3,347.75    54,168.03    32,200.02
Accrual                 2                                                                                 3           18


(2) Group
handover


3.Current                                                                                                     1,018,570.0
                             949,832.38                   68,737.71
amount                                                                                                                 9
decreased

         (1)                                                                                                  1,018,570.0
                             949,832.38                   68,737.71
Disposal                                                                                                               9




               77,213,784. 23,958,205.     5,057,692.9                1,252,003.8 3,576,368.5 3,942,342.1 115,100,805
4.Ending                                                 100,407.52
                       92            07             3                          9            4             8           .05
balance

III.
Impairment
provision


                             5,553,283.5                                           1,130,341.8                6,721,342.1
1.Opening                                                 37,716.74
                                      4                                                     8                          6
balance


2.Current
amount
increased

                                                    161
                                                                               深圳市深粮控股股份有限公司 2019 年半年度报告全文


           (1)
Accrual




3.Current                      2,021,691.1                                                                                        2,059,407.8
                                                                          37,716.74
amount                                  3                                                                                                    7
decreased

      (1)                      2,021,691.1                                                                                        2,059,407.8
                                                                          37,716.74
Disposal                                3                                                                                                    7




                               3,531,592.4                                                          1,130,341.8                   4,661,934.2
4.Ending
                                        1                                                                     8                              9
balance

IV. Book
value


                 543,113,386 15,798,804.               17,814,012.                    2,358,483.4 5,321,311.3 2,066,260.0 586,543,323
1.Ending                                                                  71,065.80
                         .57           29                       05                              8             0               2             .51
book value

      2.
                 525,144,475 16,370,794.               18,244,352.                    2,412,651.5 5,353,511.3 2,397,193.7 569,997,392
Opening                                                                   74,413.55
                         .15           18                       60                              1             2               7             .08
book value

Ratio of the intangible assets from internal R&D in balance of intangible assets at period-end was 2.69%.


(2)     Land use rights without certificate of ownership

                                                                                                                                   RMB/CNY

                                                                                                    Reasons for without the property
                      Item                                   Book value
                                                                                                              certification

Land use right                                                               69,525,279.34 Still under processing

                                                                                              Collective land, cannot handle the
Land use right                                                                 7,849,990.00
                                                                                              certificate of ownership

Total                                                                        77,375,269.34

Other explanation:


27. Expense on Research and Development

                                                                                                                                   RMB/CNY

                    Opening                                                                                                        Ending
      Item                               Current amount increased                      Current amount decreased
                     balance                                                                                                      balance


                                                                    162
                                                                             深圳市深粮控股股份有限公司 2019 年半年度报告全文


Other explanation


28. Goodwill

(1) Goodwill Original book value

                                                                                                                        RMB/CNY

   The invested
 entity or matters Opening balance             Current increased                      Current decreased           Ending balance
forming goodwill

Pu’er Tea Trading
                          673,940.32                                                                                   673,940.32
Center

      Total               673,940.32                                                                                   673,940.32


(2) Goodwill impairment provision

                                                                                                                        RMB/CNY

   The invested
 entity or matters Opening balance             Current increased                      Current decreased           Ending balance
forming goodwill

Pu’er Tea Trading
                          673,940.32                                                                                   673,940.32
Center

      Total               673,940.32                                                                                   673,940.32

Relevant information about the assets group or portfolio goodwill included
Hangzhou Ju Fang Yong, a subsidiary of the Company, funded and purchased 15.00% stake of Yunnan Pu’er Tea Trading Center
held by Yunnan Heng Feng Xiang Investment Co., Ltd. in May 2016. After the completion of the purchase, the Company got
command of Yunnan Pu’er Tea Trading Center. The balance between the combined cost and the fair value of net assets on the
combining date formed goodwill of RMB 673,940.32.



Instructions for goodwill impairments test process and key parameters (such as the forecast period growth rate, stable period growth
rate, profit rate, discount rate, and forecast period when estimating the present value of the future cash flow), and the method of
confirming the impairment loss of goodwill:
Impact of goodwill impairment test
Other explanation


29. Long-term expenses to be apportioned

                                                                                                                        RMB/CNY

                                              Current amount
         Item           Opening balance                            Current amortization     Other decreased     Ending balance
                                                  increased

Decoration fee                4,550,750.21            639,455.81             1,077,318.99                            4,112,887.03

                                                                163
                                                                             深圳市深粮控股股份有限公司 2019 年半年度报告全文


Improve expenditure
for investment real         8,706,105.90             386,402.36              1,718,294.87                                7,374,213.39
estate

Improve expenditure
                            2,385,091.34             386,402.36              1,077,318.99                                1,694,174.71
for fix assets

Affiliated project of
resident area in
                               36,374.47                                       36,374.47
Wuyuan Ju Fang
Yong

Other                       6,121,577.88           4,509,660.72              7,069,725.36                                3,561,513.24

Total                      21,799,899.80           5,921,921.25             10,979,032.68                              16,742,788.37

Other explanation


30. Deferred income tax asset /Deferred income tax liabilities

(1) Deferred income tax assets without offset

                                                                                                                              RMB/CNY

                                             Ending balance                                       Opening balance
           Item            Deductible temporary       Deferred income tax           Deductible temporary     Deferred income tax
                               differences                      asset                   differences                   asset

Impairment provision for
                                  200,374,677.59                 49,789,641.65              200,997,551.38             49,759,336.40
assets

Unrealized profits in
                                    1,348,710.60                     337,177.65               1,348,710.60                 337,177.65
internal transactions

Deferred income                       115,540.85                        28,885.21              312,307.72                     78,076.93

Total                             201,838,929.04                 50,155,704.51              202,658,569.70             50,174,590.98


(2) Deferred income tax liability without offset

                                                                                                                              RMB/CNY

                                             Ending balance                                       Opening balance
           Item             Taxable temporary         Deferred income tax            Taxable temporary       Deferred income tax
                               differences                    liabilities               differences                 liabilities

Asset evaluation
increment of enterprise
                                   52,450,293.02                 13,112,573.25               51,909,877.24             12,977,469.31
combine under different
control

Change of fair value for
                                                                        18,060.77                43,861.84                    10,965.46
the financial assets

                                                                 164
                                                                              深圳市深粮控股股份有限公司 2019 年半年度报告全文


available for sale

Other                                     129,230.76                    32,307.69

Total                                  52,579,523.78              13,162,941.71                51,953,739.08                12,988,434.77


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

                                                                                                                                 RMB/CNY
                                                          Ending balance of          Trade-off between the         Opening balance of
                              Trade-off between the
                                                         deferred income tax          deferred income tax          deferred income tax
              Item             deferred income tax
                                                       assets or liabilities after   assets and liabilities at   assets or liabilities after
                              assets and liabilities
                                                                off-set                   period-begin                    off-set

Deferred income tax
                                                                  50,155,704.51                                             50,174,590.98
asset

Deferred income tax
                                                                  13,162,941.71                                             12,988,434.77
liabilities


(4) Details of uncertain deferred income tax assets

                                                                                                                                 RMB/CNY

                       Item                                Ending balance                                  Opening balance

Deductible loss                                                            114,488,957.68                                  112,864,728.90
                                                                           163,267,590.71
Impairment provision for assets                                                                                            172,615,170.87


Deferred income                                                              98,606,151.11                                  10,097,899.20
                                                                           376,362,699.50
Total                                                                                                                      295,577,798.97



(5) Deductible losses of un-recognized deferred income tax assets expired on the followed year

                                                                                                                                 RMB/CNY

                Year                       Ending amount                     Opening amount                            Note

Other explanation:


31. Other non-current asset

Whether implemented the new revenue standards
□Yes √No
                                                                                                                                 RMB/CNY

                       Item                                Ending balance                                  Opening balance

Prepaid for equipment                                                           854,782.25                                      866,378.12

                                                                  165
                                                                           深圳市深粮控股股份有限公司 2019 年半年度报告全文


Prepaid for engineering                                                                                                 1,069,771.60

Total                                                                        854,782.25                                 1,936,149.72

Other explanation:


32. Short-term loans

(1) Category

                                                                                                                          RMB/CNY

                     Item                                 Ending balance                              Opening balance

Secured loans                                                                                                         30,000,000.00

Guarantee loan                                                                                                        30,000,000.00

Loan in credit                                                           30,590,000.00                                31,600,000.00

Total                                                                    30,590,000.00                                91,600,000.00

Explanation on category of short-term loans
Dongguan Logistics, a subsidiary of the Company, signed the “Liquidity Loan Contract” No. 44191000-2018 (Dongben) Zi No. 0124
with Agricultural Development Bank of China Dongguan Branch, and obtained a loan of RMB 31.60 million by credit loan on 25
December 2018, the life of the loan is 11 months, which expires on October 31, 2019, the lending rate is 4.35%, and the interest
accrual is segmented and shall be adjusted with the adjustment of the benchmark interest rate for loan of the People’s Bank of China.
On 25 April 2019, return the principal of RMB 1.01 million in advance, as of 30th June 2019, balance of the above loan contract was
RMB 30.59 million.


(2) Overdue short-term loans without payment

RMB 0 short-term loans over due without paid at period-end, including follow major amount:
                                                                                                                          RMB/CNY

        Borrower                Ending balance               Loan rate                Overdue time             Overdue interest

Other explanation:


33. Tradable financial liability

                                                                                                                          RMB/CNY

                     Item                                 Ending balance                              Opening balance

  Including:

  Including:

Other explanation:


34. Derivative financial liability

                                                                                                                          RMB/CNY

                                                                 166
                                                                    深圳市深粮控股股份有限公司 2019 年半年度报告全文


                     Item                          Ending balance                           Opening balance

Other explanation:


35. Note payable

                                                                                                                RMB/CNY

                Category                           Ending balance                           Opening balance


Notes expired at year-end without paid was Yuan.


36. Account payable

(1) Account payable

                                                                                                                RMB/CNY

                     Item                          Ending balance                           Opening balance

Trade accounts payable                                         166,948,547.76                              438,618,768.51

Account payable for engineering                                     2,740,687.88                            31,922,123.90

Other                                                               1,512,306.39                              2,197,391.39

Total                                                          171,201,542.03                              472,738,283.80


(2) Major accounts payable with age over one year

                                                                                                                RMB/CNY

                     Item                          Ending balance                  Reasons of outstanding or carry-over

Other explanation:


37. Accounts received in advance

Whether implemented the new revenue standards
□Yes √No


(1) Accounts received in advance

                                                                                                                RMB/CNY

                     Item                          Ending balance                           Opening balance

Account for goods received in advance                          136,680,171.97                              204,866,040.96

Other                                                                    335.00                                562,553.20

Total                                                          136,680,506.97                              205,428,594.16




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(2) Important account received in advance with account age over one year

                                                                                                                        RMB/CNY

                     Item                               Ending balance                 Reasons of outstanding or carry-over


(3)Projects that settle without completed from construction contract at period-end

                                                                                                                        RMB/CNY

                             Item                                                         Amount

Other explanation:


38. Contract liability

                                                                                                                        RMB/CNY

                     Item                               Ending balance                              Opening balance

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

             Item                    Amount changed                                 Reasons of changes


39. Wage payable

(1) Wage payable

                                                                                                                        RMB/CNY

           Item               Opening balance          Current increased        Current decreased           Ending balance

I. Short-term
                                    121,382,348.52           110,755,883.84          126,712,977.10             105,425,255.26
compensation

II. After-service
welfare-defined                      10,264,159.59             7,137,532.42             5,709,228.04              11,692,463.97
contribution plans

III. Dismissed welfare                4,062,915.41             1,775,288.50             4,132,593.81                  1,705,610.10

Total                               135,709,423.52           119,668,704.76          136,554,798.95              118,823,329.33


(2) Short-term compensation

                                                                                                                        RMB/CNY
           Item               Opening balance          Current increased        Current decreased           Ending balance

1. Wage, bonus,
                                    113,607,669.85            95,513,877.15           112,379,987.79              96,741,559.21
allowance and subsidy

2. Employees’ welfare                                         4,322,541.36             3,488,228.87                   834,312.49

                                                              168
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3. Social insurance
                                          99,598.81           3,179,002.40               3,253,503.72                   25,097.49
charges

      Including:medical
                                          92,813.10           2,908,544.07               2,985,246.36                   16,110.81
insurance premium
        Industrial injury
        insurance                           304.92                 98,717.46                98,733.53                      288.85
        premiums
        Maternity
        insurance                          6,480.79             171,740.87                169,523.83                      8,697.83
        premiums
4. Housing public reserve                                     4,268,648.06               4,207,418.56                   61,229.50
5. Trade union fee and
                                    7,675,079.86              3,471,814.87               3,383,838.16                 7,763,056.57
education fee
6. Short paid absence

Total                             121,382,348.52           110,755,883.84              126,712,977.10           105,425,255.26



(3) Defined contribution plans

                                                                                                                        RMB/CNY

            Item             Opening balance          Current increased         Current decreased           Ending balance
1. Basic endowment
                                         236,975.62           5,425,569.74               5,426,694.64                  235,850.72
insurance premiums
2. Unemployment
                                           4,569.75                85,387.47                85,427.65                     4,529.57
insurance premiums
3. Enterprise annuity              10,022,614.22              1,626,575.21                197,105.75              11,452,083.68

Total                              10,264,159.59              7,137,532.42               5,709,228.04             11,692,463.97

Other explanation:


40. Taxes payable

                                                                                                                        RMB/CNY

                      Item                             Ending balance                               Opening balance

VAT                                                                     7,962,236.13                                  9,493,004.93

Enterprise income tax                                                   9,895,834.07                                  9,219,053.50

Personal income tax                                                     4,381,282.54                                  1,927,699.20

Urban maintenance and construction tax                                  2,010,802.27                                   640,819.28

House property tax                                                      3,618,554.77                                  1,725,020.41

Use tax of land                                                         1,906,234.62                                   574,505.73

Stamp tax                                                                 139,142.66                                   246,056.29

Educational surtax                                                        347,625.53                                   483,228.46


                                                             169
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Other                                                                         5,893.24                                  660,330.78

Total                                                                   30,267,605.83                              24,969,718.58

Other explanation:


41. Other account payable

                                                                                                                         RMB/CNY

                     Item                                Ending balance                             Opening balance

Interest payable                                                          1,020,795.27

Dividend payable                                                          2,909,182.74                                 2,909,182.74

Other account payable                                                  301,049,727.50                             277,780,365.55

Total                                                                  304,979,705.51                             280,689,548.29


(1) Interest payable

                                                                                                                         RMB/CNY

                     Item                                Ending balance                             Opening balance

Long-term loans interest for installment                                  1,020,795.27

Total                                                                     1,020,795.27

Major overdue interest:
                                                                                                                         RMB/CNY

                   Borrower                             Overdue amount                              Overdue causes

Other explanation:


(2) Dividend payable

                                                                                                                         RMB/CNY

                     Item                                Ending balance                             Opening balance

Common stock dividends                                                    2,909,182.74                                 2,909,182.74

Total                                                                     2,909,182.74                                 2,909,182.74

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


(3) Other account payable

1) By nature
                                                                                                                         RMB/CNY

                     Item                                Ending balance                             Opening balance

Engineering quality retention money and                                 34,476,867.04                                  3,191,037.22


                                                               170
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fund of tail

Deposit and margin                                                   160,981,227.12                                151,049,170.31

Intercourse funds and other                                            99,081,804.21                               100,749,160.89

Drawing expenses in advance                                               6,509,829.13                              22,790,997.13

Total                                                                301,049,727.50                                277,780,365.55

2)Significant other account payable with over one year age
                                                                                                                        RMB/CNY

                       Item                              Ending balance                    Reasons of outstanding or carry-over

Other explanation


42. Liability held for sale

                                                                                                                        RMB/CNY

                       Item                              Ending balance                               Opening balance

Other explanation:


43. Non-current liabilities due within one year

                                                                                                                        RMB/CNY

                       Item                              Ending balance                               Opening balance

Long-term loans due within one year                                    60,027,362.43                                55,090,793.79

Total                                                                  60,027,362.43                                55,090,793.79

Other explanation:
   Found more in Long-term loans




44. Other current liabilities

Whether implemented the new revenue standards
□Yes √No
                                                                                                                        RMB/CNY

                       Item                              Ending balance                               Opening balance

Subsidies for grain reserve services                                 219,151,968.63                                219,151,968.63

Total                                                                219,151,968.63                                219,151,968.63

Change of short-term bonds payable:
                                                                                                                        RMB/CNY

                                                                             Accrual Premium
               Face       Issuance   Bonds    Amount   Opening Issued in                             Paid in             Ending
  Bonds                                                                      interest      and
               value          date     term   issued    balance the period                          the period           balance
                                                                              by face    discount
                                                               171
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                                                                                 value     amortizati
                                                                                              on

Other explanation:


45. Long-term loans

(1) Category

                                                                                                                            RMB/CNY

                     Item                                  Ending balance                               Opening balance

Mortgage loan                                                            701,297,326.68                               462,449,380.03

Guarantee loan                                                           136,114,135.95                               109,329,205.42

Less: Long-term loans due within one year                                 -60,027,362.43                               -55,090,793.79

Total                                                                    777,384,100.20                               516,687,791.66
Explanation on category of long-term loans:
(i) Guarantee loan
(1) Dongguan Logistics, a subsidiary of the Company, signed a bank credit contract with credit number of
CN11002181808-160714-SCDGTML2 with HSBC. HSBC has provided a loan credit not more than RMB 200 million to Dongguan
Logistics. The applicable interest rate for each loan at each interest period is 90% of the loan benchmark interest rate of central bank
applicable on the fixed interest date of the interest period, the borrowing date is from December 27, 2016 to December 27, 2021. As
of 30th June 2019, Dongguan Logistics obtained the principal balance of the loan of HSBC of RMB 9,9794,700, of which the
non-current liabilities due within one year was RMB 20,340,300. SZCG and Dongguan Fruit Vegetable Non-staple Food Trading
Market Co., Ltd. provided the maximum guarantee amount for the loan.


(2) Dongguan Industry and Trade, a subsidiary of the Company, signed a bank credit contract with credit number of
CN11002181808-190305-SCOM-TML with HSBC, HSBC provided a loan credit not more than RMB233 million to Dongguan
Industry and Trade. The applicable interest rate for each loan at each interest period is from 5% to 3% of the loan benchmark interest
rate of central bank applicable on the fixed interest date of the interest period, the borrowing date was from May 9, 2019 to May 8,
2024. As of June 30, 2019, Dongguan Industry and Trade had obtained the principal balance of the loan of RMB 36,319,500 from
HSBC. SZCG and Dongguan Fruit Vegetable Non-staple Food Trading Market Co., Ltd. provided the maximum guarantee amount
for the loan.


(ii) Mortgage loan
(1) Dongguan Food Industry Park, a subsidiary of the Company, signed the loan contract of “Yue DG 2017 NGDZ No. 006” with
Bank of Communications Guangdong Branch, the loan amount is RMB 768 million, and the loan term is from September 22, 2017 to
August 29, 2032. The loan under this contract is only used for the construction of the warehousing and logistics distribution center
project of Dongguan Food Industry Park. The principal of the current loan was RMB 49.8 million, RMB 3,783,400, RMB 30 million,
RMB 200 million and RMB 200 million, the loan interest rate of last two RMB 200 million were calculated by the benchmark
interest rate for loan of the People’s Bank of China on the loan entry date, which was 4.90%; the other three loans were calculated by
the benchmark interest rate of the People’s Bank of China on the loan entry date after rising by 15%, which is 5.635%. As of 30th
June 2019, the total loan balance under the above loan contract was RMB 483,583,400. Dongguan Food Industry Park mortgaged its
two pieces of lands (DFGY (2009) DT No. 190) and (DFGY (2012) DT No. 152) for the borrowing. At the same time, the

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Company’s subsidiaries, SZCG and Dongguan Fruit Vegetable Non-staple Food Trading Market Co., Ltd., provide joint liability
guarantee.


(2) Dongguan Logistics, a subsidiary of the Company, signed a loan contract with contract number of 44031000-2015 (Shen) Zi No.
0023 with China Agricultural Development Bank, with a total loan amount of RMB 273 million and an annual interest rate of 5.4%,
the interest rate is adjusted year by year from the actual withdrawal date based on the adjustment of benchmark interest rate for loan
of the People's Bank of China, and the loan period is from July 31, 2015 to July 12, 2023. As of 30th June 2019, the balance under the
above contract was RMB 212,813,900, of which the non-current liabilities due within one year were RMB 39,687,000. Shenzhen
Cereals Group has provided guarantee for the loan, and taken Dongguan Logistics’ land “DFGY(2014) DT No. 6” at No. 32, Jianshe
Road, Masan Village, Machong Town, Dongguan City and the above-ground buildings and structures to be built in the future as
mortgages, of which the land assessment value is RMB 51.21 million.


(3) Dongguan Logistics, a subsidiary of the Company, signed a loan contract with contract number of 44191000-2018 (Dongben) Zi
No. 0100 with China Agricultural Development Bank, with a total loan amount of RMB 430 million and an annual interest rate of
4.9%, the interest rate is adjusted year by year from the actual withdrawal date based on the adjustment of benchmark interest rate for
loan of the People's Bank of China, and the loan period was from January 25, 2019 to January 24, 2031. As of June 30, 2019, the
balance under the above contract was RMB 4.9 million. The Company’s subsidiaries, SZCG and Dongguan Fruit Vegetable
Non-staple Food Trading Market Co., Ltd., and Dongguan Houjie Xunda Industrial Co., Ltd. provided joint liability guarantee for the
borrowing, and took Dongguan Logistics’ land “Yue (2016) DGSBDCQ No. 0028527” as a mortgage, of which the land assessment
value is RMB 52,290,800.




Other explanation, including interest rate range:


46. Bonds payable

(1) Bonds payable

                                                                                                                           RMB/CNY

                    Item                                   Ending balance                              Opening balance


(2) Changes of bonds payable (not including the other financial instrument of preferred stock and
perpetual capital securities that classify as financial liability)

                                                                                                                           RMB/CNY


(3) Convertible conditions and time for shares transfer for the convertible bonds

(4) Other financial instruments classify as financial liability

Basic information of the outstanding preferred stock and perpetual capital securities at period-end
Changes of outstanding preferred stock and perpetual capital securities at period-end
                                                                                                                           RMB/CNY

                                                                 173
                                                                               深圳市深粮控股股份有限公司 2019 年半年度报告全文


  Outstandin           Period-beginning              Current increased             Current decreased                 Period-end
  g financial
                     Amount       Book value      Amount        Book value       Amount       Book value      Amount         Book value
  instrument

Basis for financial liability classification for other financial instrument
Other explanation


47. Lease liability

                                                                                                                                 RMB/CNY

                      Item                                    Ending balance                               Opening balance

Other explanation


48. Long-term account payable

                                                                                                                                 RMB/CNY

                      Item                                    Ending balance                               Opening balance

Special account payable                                                       15,724,141.66                                 15,690,202.08

Total                                                                         15,724,141.66                                 15,690,202.08


(1) By nature

                                                                                                                                 RMB/CNY

                      Item                                    Ending balance                               Opening balance

Other explanation:


(2) Special account payable

                                                                                                                                 RMB/CNY

         Item                Opening balance     Current increased       Current decreased     Ending balance               Causes
                                                                                                                    The              finance
                                                                                                                    allocated        to   the
                                                                                                                    company          as     a
                                                                                                                    government
Depreciation fund
                                 15,471,085.99             39,978.58                              15,511,064.57 investment        in
for grain deposits                                                                                              depreciation special
                                                                                                                    funds       of   reserve
                                                                                                                    grain       depot     and
                                                                                                                    interest.

Special funds for
public welfare                      219,116.09                                     6,039.00            213,077.09
scientific research in

                                                                     174
                                                                                  深圳市深粮控股股份有限公司 2019 年半年度报告全文


grain industry

Total                             15,690,202.08              39,978.58                6,039.00         15,724,141.66               --

Other explanation:


49. Long-term wage payable

(1) Long-term wage payable

                                                                                                                                    RMB/CNY

                       Item                                      Ending balance                              Opening balance


(2) Changes of defined benefit plans

Present value of the defined benefit plans:
                                                                                                                                    RMB/CNY

                       Item                                      Current Period                                Last Period

Scheme assets:
                                                                                                                                    RMB/CNY

                       Item                                      Current Period                                Last Period

Net liability (assets) of the defined benefit plans
                                                                                                                                    RMB/CNY

                       Item                                      Current Period                                Last Period

Content of defined benefit plans and relevant risks, impact on future cash flow of the Company as well as times and uncertainty:
Major actuarial assumption and sensitivity analysis:
Other explanation:


50. Accrual liabilities

Whether implemented the new revenue standards
□Yes √No
                                                                                                                                    RMB/CNY

                Item                            Ending balance                    Opening balance                       Causes

Other explanation, including relevant important assumptions and estimation:


51. Deferred income

                                                                                                                                    RMB/CNY

         Item                 Opening balance       Current increased     Current decreased         Ending balance               Causes

                                                                                                                       See table below for
Government grants                100,608,203.01               1,386.60            1,887,897.65         98,721,691.96
                                                                                                                       details
                                                                        175
                                                                            深圳市深粮控股股份有限公司 2019 年半年度报告全文


Total                        100,608,203.01                1,386.60         1,887,897.65      98,721,691.96             --

Item with government grants involved:
                                                                                                                         RMB/CNY

                                                Amount
                                                               Amount          Cost                                 Assets-relate
                  Opening       New grants    reckoned in                                   Other       Ending
     Liability                                               reckoned in    reduction in                                d/income
                   balance      in the Period non-operatio                                 changes     balance
                                                             other income    the period                                  related
                                               n revenue

(1) Base of
further
                                                                                                                    Assets-relate
processing       1,100,000.00                                  520,462.29                              579,537.71
                                                                                                                    d
for tea and
nature plants

(2) Enterprise
technology
center is a
municipal
                                                                                                                    Assets-relate
R&D center.      1,987,301.17                                                                        1,987,301.17
                                                                                                                    d
Subsidies for
industrial
technological
advancement

(3) Project
grants for
years for                                                                                                           Assets-relate
                  312,307.72                                                                           312,307.72
agricultural                                                                                                        d
district, Xihu
Zone

(4)Key
technology
research and
development
for the
preparation
of                                                                                                                  Income-relate
                  241,323.58                                     2,490.27                              238,833.31
high-quality                                                                                                        d
aroma
extracts
based on the
use of tea
aroma
precursors

(5)Key            243,233.62                                   104,329.55                              138,904.07 Assets-relate

                                                                  176
                                             深圳市深粮控股股份有限公司 2019 年半年度报告全文


technology                                                                          d
research and
development
for the
preparation
of
high-quality
aroma
extracts
based on the
use of tea
aroma
precursors

(6) Finance                                                                         Assets-relate
                   337,222.22                                         337,222.22
Discount                                                                            d

(7)
Industrializati                                                                     Assets-relate
                  2,084,136.67                                       2,084,136.67
on of instant                                                                       d
tea powder

(8) Grant for
key
technology
research and                                                                        Assets-relate
                   153,011.21                                         153,011.21
industrializati                                                                     d
on of
instant tea
powder

(9) Special
fund for the
development
of strategic
emerging
industries in
Shenzhen(pla
                                                                                    Assets-relate
nt deep           3,538,892.95                                       3,538,892.95
                                                                                    d
processing
engineering)
(Shen
Development
& Reform
No.
20131601)

(10)Construct      500,000.00    62,500.00                            437,500.00 Assets-relate

                                  177
                                                        深圳市深粮控股股份有限公司 2019 年半年度报告全文


ion amount                                                                                     d
for 50 tons
for clearly
processing
for Mingyou
tea

(11) Subsidy
for tea
seeding of                                                                                     Assets-relate
                   46,129.96    1,386.60     1,941.24                              45,575.32
New Tea                                                                                        d
Garden in
Wangkou

(12) Subsidy
for supply
system
                                                                                               Assets-relate
construction      750,000.00                                                     750,000.00
                                                                                               d
of
agricultural
products

(13) Grain
storage
project of
Dongguan                                                                                       Assets-relate
                 8,242,417.83              131,128.56                           8,111,289.27
Shenliang                                                                                      d
Logistics Co.,
Ltd. - Storage
A

(14) Phase II
of grain
storage
project of
                 32,968,699.5                                                   32,453,049.2 Assets-relate
Dongguan                                   515,650.26
                           2                                                               6d
Shenliang
Logistics Co.,
Ltd.- Storage
B

(15) Grain,
oil and food
headquarters
                 18,000,000.0                                                   18,000,000.0 Assets-relate
and
                           0                                                               0d
innovative
public service
platform of

                                             178
                                      深圳市深粮控股股份有限公司 2019 年半年度报告全文


Dongguan
Shenliang
Logistics Co.,
Ltd.

(16)Special
funds for
intelligent
upgrading
and
                                                                             Assets-relate
transformatio 5,100,000.00                                    5,100,000.00
                                                                             d
n of grain
warehouse
for the 2017
“Grain Safety
Project”

(17)
Construction
of 450000
ton silos and
60000 ton        17,491,764.7                                 17,491,764.7 Assets-relate
film silos                 1                                             1d
-CDE
warehouse.
Gas storage
bin

(18) Special
fund for
agricultural
development
in Shenzhen -
subsidy for                                                                  Assets-relate
agricultural                                                                 d
product
quality and
safety testing
capacity-buil
ding project

(19) Special
fund for
agricultural                                                                 Assets-relate
                  492,000.00                                   492,000.00
development                                                                  d
of 2016-
agricultural

                                179
                                              深圳市深粮控股股份有限公司 2019 年半年度报告全文


product
safety testing
project-
capacity
building of
the third
party
inspection
institution
expansion
evaluation

(20)Agricultu
ral product
safety testing
project of the
special fund
for                                                                                  Assets-relate
                  1,026,000.00                                        1,026,000.00
agricultural                                                                         d
development
of 2016       -
Central
investment
fund

(21)
Construction
of O2O
community
sales service
system for                                                                           Assets-relate
                  1,789,411.20    19,288.02                           1,770,123.18
high quality                                                                         d
grain and oil
based on
B2C
E-commerce
platform

(22)
Industrializati
                                                                                     Assets-relate
on of Doximi 2,813,684.01        430,107.44                           2,383,576.57
                                                                                     d
E-commerce
platform

(23)
                                                                                     Assets-relate
Commercial         524,000.00                                          524,000.00
                                                                                     d
circulation

                                   180
                                                                          深圳市深粮控股股份有限公司 2019 年半年度报告全文


development
project
funding for
year of 2017

(24)
Intelligent
management
                                                                                                                 Assets-relate
of grain         866,666.64                                  100,000.02                            766,666.62
                                                                                                                 d
depot based
on mobile
internet

               100,608,203.                                                                       98,721,691.9
Total                                 1,386.60             1,887,897.65
                            01                                                                              6

Other explanation:


52. Other non-current liabilities

Whether implemented the new revenue standards
□Yes √No
                                                                                                                     RMB/CNY

                     Item                                Ending balance                         Opening balance

Other explanation:


53. Share capital

                                                                                                                  In RMB/CNY

                                                       Increased (decreased) in this year +,-
                     Opening                                          Shares
                                      New shares                                                             Ending balance
                      balance                      Bonus shares converted from          Other    Subtotal
                                        issued
                                                                  public reserve

                 1,152,535,254.                                                                              1,152,535,254.
Total shares
                                 00                                                                                         00

Other explanation:


54. Other equity instrument

(1)Basic information of the outstanding preferred stock and perpetual capital securities at period-end

(2) Changes of outstanding preferred stock and perpetual capital securities at period-end

                                                                                                                     RMB/CNY


                                                                181
                                                                                  深圳市深粮控股股份有限公司 2019 年半年度报告全文


 Outstandin            Period-beginning              Current increased                 Current decreased                Period-end
  g financial
                   Amount       Book value          Amount         Book value        Amount       Book value      Amount         Book value
  instrument

Changes of other equity instrument, change reasons and relevant accounting treatment basis:
Other explanation:


55. Capital public reserve

                                                                                                                                     RMB/CNY

           Item                 Opening balance                 Current increased           Current decreased           Ending balance
Capital premium (Share
                                    1,413,996,347.50                                                                       1,413,996,347.50
capital premium)
Other capital reserve                      8,896,381.86                                                                         8,896,381.86

Total                               1,422,892,729.36                                                                       1,422,892,729.36

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


56.Treasury stock

                                                                                                                                     RMB/CNY

           Item                 Opening balance                 Current increased           Current decreased           Ending balance

Other explanation, including changes and reasons for changes:


57. Other comprehensive income

                                                                                                                                     RMB/CNY

                                                                                      Current Period

                                                                                      Less:
                                                                   Less: written written in
                                                                      in other        other
                                                                   comprehensi comprehe
                                                                   ve income in       nsive
                                                      Account
                                                                     previous       income in              Belong to    Belong to
                                       Opening         before                                                                   Ending
                Item                                                period and       previous Less : income parent   minority
                                          balance    income tax                                                                 balance
                                                                      carried       period and tax expense company shareholders
                                                       in the
                                                                     forward to       carried               after tax    after tax
                                                       period
                                                                     gains and      forward to
                                                                     losses in       retained
                                                                      current       earnings in
                                                                      period         current
                                                                                      period

Other explanation, including the active part of the hedging gains/losses of cash flow transfer to initial reorganization adjustment for

                                                                       182
                                                                               深圳市深粮控股股份有限公司 2019 年半年度报告全文


the arbitraged items:


58. Reasonable reserve

                                                                                                                             RMB/CNY

           Item                 Opening balance            Current increased           Current decreased           Ending balance

Production safety fee                            154.21               460,394.34                  398,138.99                 62,409.56

Total                                            154.21               460,394.34                  398,138.99                 62,409.56

Other explanation, including changes and reasons for changes:


59. Surplus public reserve

                                                                                                                             RMB/CNY

           Item                 Opening balance            Current increased           Current decreased           Ending balance

Statutory surplus
                                      327,140,910.28                                                                    327,140,910.28
reserves

Total                                 327,140,910.28                                                                    327,140,910.28

Other explanation, including changes and reasons for changes:


60. Retained profit

                                                                                                                             RMB/CNY
                        Item                                      Current period                               Last period
Retained profit at the end of the previous year
                                                                               1,269,933,487.26                         961,602,454.82
before adjustment
Total retained profit at the beginning of the                                                                           961,602,454.82
                                                                               1,269,933,487.26
previous year before adjustment

Add: net profit attributable to shareholder of
                                                                                203,168,850.61                          308,331,032.44
parent company

     Common stock dividends payable                                             115,253,525.40

                                                                                                                   1,269,933,487.26
Retained profit at period-end                                                  1,357,848,812.47


Details about adjusting the retained profits at the beginning of the period:
1) The retroactive adjustments to Accounting Standards for Business Enterprises and its relevant new regulations affect the retained
profits at the beginning of the period amounting to 0 Yuan.
2) The changes in accounting policies affect the retained profits at the beginning of the period amounting to 0 Yuan.
3) The major accounting error correction affects the retained profits at the beginning of the period amounting to 0 Yuan
4) Merge scope changes caused by the same control affect the retained profits at the beginning of the period amounting to 0 Yuan.
5) Other adjustments affect the retained profits at the beginning of the period amounting to 0 Yuan


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61. Operating income and operating cost

                                                                                                                                 RMB/CNY

                                              Current Period                                            Last Period
             Item
                                     Income                      Cost                        Income                       Cost
Main business                        4,778,550,071.95          4,258,702,014.11              4,430,802,356.92         3,960,514,399.97

Other business                          3,617,660.74              3,399,756.51                  3,886,289.90               2,238,763.29

Total                                4,782,167,732.69          4,262,101,770.62              4,434,688,646.82         3,962,753,163.26

Whether implemented the new revenue standards
□Yes √No
Other explanation


62. Tax and surcharges

                                                                                                                                 RMB/CNY

                      Item                                Current Period                                    Last Period

Urban maintenance and construction tax                                       850,546.63                                      760,276.77

Educational surtax                                                           647,628.82                                      531,572.95

House property tax                                                          3,902,342.55                                   4,101,505.15

Use tax of land                                                              856,035.80                                    1,734,334.20

Stamp tax                                                                    339,910.55                                      490,071.74

Other                                                                             9,049.85                                       44,157.29

Total                                                                       6,605,514.20                                   7,661,918.10

Other explanation:


63. Sales expenses

                                                                                                                                 RMB/CNY

                      Item                                Current Period                                    Last Period

Labor and social security benefits                                         28,921,374.58                                  28,566,852.50

Rental                                                                      4,572,089.52                                   5,202,348.44

Utilities and office expenses                                               2,983,459.64                                   2,256,674.49

After-sale services                                                         3,239,606.10                                   2,278,428.97

Logistics transportation fee                                               55,354,469.30                                  64,795,623.08

Travel expenses                                                             1,356,310.96                                   1,393,737.48

Equivalent loss for low value perishable
                                                                            1,481,592.76                                         73,335.37
  goods


                                                                 184
                                                       深圳市深粮控股股份有限公司 2019 年半年度报告全文


Depreciation and amortization of
                                                       5,855,616.32                            6,325,647.19
long-term assets

Business hospitality                                    485,263.49                              891,031.17

Advertisement charge                                    406,507.02                              340,028.56

Sales commission                                            893.65                                33,525.44

Property insurance premium                              462,098.96                              636,293.07

Other                                                  7,434,460.44                            7,658,578.54

Total                                            112,553,742.74                              120,452,104.30

Other explanation:


64. Administration expenses

                                                                                                 RMB/CNY

                     Item            Current Period                            Last Period

Labor and social security benefits                    64,112,522.69                           57,480,497.61

Communication fee                                       698,972.98                              469,589.19

Vehicle usage fee                                       678,600.30                              629,920.42

Low-value consumables                                   141,751.26                              148,541.67

Repair cost                                             264,513.27                              154,127.60

Depreciation and amortization of
                                                      11,830,728.97                           16,385,472.44
long-term assets

Travel expenses                                        1,286,620.67                            1,585,963.64

Business hospitality                                   1,227,426.99                            1,807,036.55

Office expenses                                        7,666,398.75                            3,974,305.97

Rental                                                  750,998.75                              747,002.77

Intermediary fees                                      3,750,693.95                            7,635,130.54

Other                                                  8,988,719.41                            5,306,440.50

Total                                            101,397,947.99                               96,324,028.90

Other explanation:


65. R&D expenses

                                                                                                 RMB/CNY

                     Item            Current Period                            Last Period

Labor and social security benefits                     2,786,779.24                            2,090,867.55

Depreciation cost                                       619,854.40                              443,606.10

Office expenses                                         280,219.64                              237,386.41
                                          185
                                                              深圳市深粮控股股份有限公司 2019 年半年度报告全文


Travel expenses                                                180,071.96                              39,290.22

Logistics consumption                                          199,042.35                               8,028.00

Intermediary fees                                               43,200.00

Maintenance and inspection fee                                  35,889.40                              38,966.32

Material costs                                                  20,436.66

Other                                                           45,981.26                             118,917.94

Total                                                         4,211,474.91                          2,977,062.54

Other explanation:


66. Financial expenses

                                                                                                       RMB/CNY

                     Item                   Current Period                            Last Period

Interest expenses                                            10,087,784.34                          4,313,048.72

Less: Interest income                                         2,185,171.96                          3,899,478.59

Exchange loss                                                  303,008.96                           -2,999,702.59
                                                               314,110.51
Bank commission charge and others                                                                     412,826.19


Total                                                         8,519,731.85                          -2,173,306.27

Other explanation:


67. Other income

                                                                                                       RMB/CNY

                    Sources                 Current Period                            Last Period

R&D subsidy for 2018 from Shenzhen
Science & Technology Innovation                                216,000.00
Committee

Other subsidy                                                 1,023,166.45

Received the construction subsidy for top
talents project of Guangdong Provincial                         30,000.00
Grain & Material Reserve Bureau

Grain talents program subsidy                                   20,269.70

Amortization of deferred income                               1,402,816.24

Amortization of deferred income                                485,081.41

Received the loan discount for leading
                                                               388,300.00
agricultural enterprises


                                                 186
                                                    深圳市深粮控股股份有限公司 2019 年半年度报告全文


Service charges are refund by Taxation
                                                     126,043.99
Bureau

Received the intermediary fee subsidy for
mergers and acquisition of the Nanshan               738,700.00
Economic promotion Bureau

 Received the employee social insurance
subsidy (1-9) of Wuyuan County Finance               470,078.93
Bureau for 2018

 Received the patent award for 2018 from
                                                      50,000.00
Shangrao Intellectual Property Bureau

Received the guiding funds for industrial
development for 2018 from Industry and
                                                     170,697.00
Information Technology Bureau (Fiscal
Appropriation)

Received the high-tech enterprise award
for 2018 from Industry and Information               200,000.00
Technology Bureau (Fiscal Appropriation)

Received the provincial R&D center fund
for 2018 from Industry and Information                50,000.00
Technology Bureau (Fiscal Appropriation)

Amount of the new project of 50 tons
clean mingou tea processing for first half            62,500.00
of 2019

Government grants                                                                        826,872.02

Special supporting funds for the
development of independent innovative
                                                                                         451,582.44
industry in Nanshan District (funding for
modern agricultural development)

Doximi's construction of O2O community
sales service system for high quality grain
                                                                                          19,288.02
and oil based on B2C E-commerce
platform

Funds for construction of the agricultural
                                                                                         100,000.00
products supply system

Grain modern logistics for year of 2014                                                  128,150.93

Special funds for the development of
                                                                                        1,000,000.00
E-commerce development service industry

Industrial development funds in Futian
District, the 2nd batch of supporting                                                   1,100,000.00
enterprise for year of 2013

                                              187
                                                                深圳市深粮控股股份有限公司 2019 年半年度报告全文


Investment subsidy for the infrastructure
works of Dongguan International Food
Industrial Park Development Co., Ltd from
                                                                                                         69,411.76
Guangdong Development & Reform
Commission and Guangdong provincial
Food Bureau

Grain storage facilities (expansion of
                                                                                                        541,158.45
150000 tons of warehouse capacity)

Subsidy for internet of things project
supervised by the State for Grain Storage                                                                54,500.00
and Transportation

Independent innovation support funds of
                                                                                                         33,333.34
SASAC based on mobile internet project

Total                                                           5,433,653.72                           4,324,296.96


68. Investment income

                                                                                                         RMB/CNY

                      Item                        Current Period                         Last Period

Long-term equity investment income
                                                                   3,413,100.95                         626,055.86
measured by equity

Investment income from disposal of long-term
                                                                     127,368.82
equity investment

Income from financial products                                     3,627,466.27                         717,351.60

Total                                                              7,167,936.04                        1,343,407.46

Other explanation:


69. Net exposure hedge gains

                                                                                                         RMB/CNY

                     Item                      Current Period                           Last Period

Other explanation:


70. Income of fair value changes

                                                                                                         RMB/CNY

                  Sources                      Current Period                           Last Period

Tradable financial assets                                          28,381.21                            -425,718.15

Total                                                              28,381.21                            -425,718.15

Other explanation:
                                                    188
                                                                                  深圳市深粮控股股份有限公司 2019 年半年度报告全文


71. Credit impairment loss

                                                                                                                                     RMB/CNY

                      Item                                       Current Period                                    Last Period

Loss of bad debt of other account
                                                                                  5,143,559.77
receivable

Total                                                                             5,143,559.77

Other explanation:


72. Assets impairment loss

Whether implemented the new revenue standards
□Yes √No
                                                                                                                                     RMB/CNY

                      Item                                       Current Period                                    Last Period

I. Bad debt losses                                                                2,063,558.29                                      116,491.30

II. Provision for falling price of inventory                                    -71,294,981.71                                   -32,678,876.93

Total                                                                           -69,231,423.42                                   -32,562,385.63

Other explanation:


73.     Income from assets disposal

                                                                                                                                     RMB/CNY

                     Sources                                     Current Period                                    Last Period

Gains or losses from fixed assets disposal                                           -4,184.59                                     -210,840.01


74. Non-operating income

                                                                                                                                     RMB/CNY

                                                                                                            Amount included in the current
               Item                            Current Period                       Last Period
                                                                                                                non-recurring profit and loss

Government grants                                               3,000.00                                                              3,000.00

Other                                                       359,252.46                         980,860.83                           359,252.46

Total                                                       362,252.46                         980,860.83                           362,252.46
Government grants reckoned into current gains/losses:
                                                                                                                                     RMB/CNY
                                                                    Whether        Whether                                           Assets
                     Issuing      Issuing          Property                                       Amount of        Amount of
      Grants                                                       the impact       special                                        related/Inc
                     subject        cause            type                                         this period      last period
                                                                       of          subsidies                                       ome related

                                                                       189
                                                                               深圳市深粮控股股份有限公司 2019 年半年度报告全文


                                                                subsidies
                                                                 on the
                                                                 current
                                                               profit and
                                                                  loss
Other explanation:


75. Non-operating expenditure

                                                                                                                                 RMB/CNY

                                                                                                           Amount included in the current
               Item                       Current Period                         Last Period
                                                                                                            non-recurring profit and loss

External donations                                     2,000,000.00                        525,810.97                          2,000,000.00

Abnormal loss                                          1,962,312.38                                                            1,962,312.38

Inventory loss                                              4,693.69                                                               4,693.69

Loss of scrap from non-current
                                                           14,840.94                           69,625.01                          14,840.94
assets

Other                                                        172.94                               56.74                             172.94

Total                                                  3,982,019.95                        595,492.72                          3,982,019.95

Other explanation:


76. Income tax expense

(1) Income tax expense

                                                                                                                                 RMB/CNY

                      Item                                   Current Period                                    Last Period

Current income tax expenses                                                    8,075,504.29                                   13,790,990.10

Deferred income tax expenses                                                   7,409,789.74                                   -1,921,138.04

Total                                                                         15,485,294.03                                   11,869,852.06


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

                                                                                                                                 RMB/CNY

                               Item                                                              Current Period

Total profit                                                                                                                 231,725,928.50

Income tax expenses calculated by statutory tax rate                                                                          57,931,482.13

Impact from different tax rate apply with the subsidiary                                                                      -2,440,713.51

Impact on cost, expenses and losses that unable to deducted                                                                  -45,351,677.76

                                                                   190
                                                                            深圳市深粮控股股份有限公司 2019 年半年度报告全文


Impact of the deductible loss on deferred income tax assets not
                                                                                                                     -556,944.32
recognized in the prior period of use

Unrecognized impacts of deductible temporary differences or
                                                                                                                    2,744,541.31
deductible losses on deferred income tax assets in the period

Impact on R&D costs deduction                                                                                       3,158,606.18

Income tax expenses                                                                                                15,485,294.03

Other explanation


77. Other comprehensive income

Found more in annotations


78. Annotation of cash flow statement

(1) Cash received with other operating activities concerned

                                                                                                                      RMB/CNY

                    Item                                   Current Period                           Last Period

Interest income                                                             2,185,171.96                            3,629,642.58

Government grants                                                           4,448,353.51                            6,683,802.85

Intercourse funds and other                                              180,418,202.50                            14,233,661.27

Total                                                                    187,051,727.97                            24,547,106.70

Note of cash received with other operating activities concerned:
    Nil


(2) Cash paid with other operating activities concerned

                                                                                                                      RMB/CNY

                    Item                                   Current Period                           Last Period

Expenses                                                                 102,412,945.42                           105,648,051.11

Intercourse funds and other                                              153,621,034.86                            98,464,612.88

Total                                                                    256,033,980.28                           204,112,663.99

Note of cash paid with other operating activities concerned:
    Nil


(3) Cash received with other investment activities concerned

                                                                                                                      RMB/CNY

                    Item                                   Current Period                           Last Period


                                                                   191
                                                                               深圳市深粮控股股份有限公司 2019 年半年度报告全文


Note of cash received with other investment activities concerned
    Nil


(4) Cash paid related with investment activities

                                                                                                                         RMB/CNY

                    Item                                     Current Period                            Last Period

Note of cash paid related with investment activities
    Nil


(5) Cash received with other financing activities concerned

                                                                                                                         RMB/CNY

                    Item                                     Current Period                            Last Period

Investment amount received in advance                                                                                 24,500,000.00

Total                                                                                                                 24,500,000.00

Note of cash received with other financing activities concerned
    Nil


(6) Other cash paid related with financing activities

                                                                                                                         RMB/CNY

                    Item                                     Current Period                            Last Period

Relevant expenses for bonus paid                                                 72,997.72

Total                                                                            72,997.72

Note of other cash paid related with financing activities:
    Nil


79. Supplementary information to statement of cash flow

(1) Supplementary information to statement of cash flow

                                                                                                                         RMB/CNY

          Supplementary information                          Current period                            Last period

1. Net profit adjusted to cash flow of
                                                                    --                                     --
operation activities:

Net profit                                                               216,240,634.47                              207,677,952.67
                                                                              64,087,863.65
Add: Impairment provision for assets                                                                                  32,562,605.32


Depreciation of fixed assets, consumption of                                  25,585,678.98                           36,676,343.25
                                                                  192
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oil assets and depreciation of productive
biology assets
                                                              10,078,858.18
Amortization of intangible assets                                                                 11,002,051.40


Amortization of long-term pending expenses                    10,979,032.68                        3,423,495.33

Loss from disposal of fixed assets, intangible
assets and other long-term assets (income is                        4,184.59                        210,840.01
listed with “-”)

Losses on scrapping of fixed assets (income
                                                                  14,840.94                           69,625.01
is listed with “-“)

Loss from change of fair value (income is
                                                                  -28,381.21                        425,718.15
listed with “-“)
Financial expenses (income is listed with
                                                              10,087,784.34                        1,914,851.35
“-”)

Investment loss (income is listed with “-”)                  -7,167,936.04                      -1,343,407.46

Decrease of deferred income tax assets
                                                                  18,886.47                       -1,641,669.44
(increase is listed with “-”)
Decrease of deferred income tax
                                                                 174,506.94                         -317,403.72
asset( (increase is listed with “-”)

Decrease of inventory (increase is listed with
                                                            -235,691,486.95                     -112,655,074.54
“-”)

Decrease of operating receivable accounts                    -118,497,256.23
                                                                                                 104,836,662.81
(increase is listed with “-”)

Increase of operating payable accounts
                                                            -365,316,840.56                     -229,981,344.84
(decrease is listed with “-”)

Net cash flow arising from operating                        -389,429,629.75
                                                                                                  52,861,245.30
activities

2. Material investment and financing not
                                                      --                                   --
involved in cash flow

3. Net change of cash and cash equivalents:           --                                   --

                                                           189,914,485.39
Balance of cash at period end                                                                    359,443,755.10


Less: Balance of cash at year-begin                          631,638,339.68                      544,440,739.45

                                                       -441,723,854.29
Net increasing of cash and cash equivalents                                                     -184,996,984.35



(2) Net cash paid for obtaining subsidiary in the Period

                                                                                                     RMB/CNY

                                                     193
                                                                             深圳市深粮控股股份有限公司 2019 年半年度报告全文


                                                                                                     Amount

Including:                                                                                             --

Including:                                                                                             --

Including:                                                                                             --

Other explanation:


(3) Net cash received by disposing subsidiary in the Period

                                                                                                                              RMB/CNY

                                                                                                     Amount

Including:                                                                                             --

Including:                                                                                             --

Including:                                                                                             --

Other explanation:


(4) Constitution of cash and cash equivalent

                                                                                                                              RMB/CNY

                         Item                               Ending balance                                  Opening balance
                                                                           189,914,485.39
I. Cash                                                                                                                 631,638,339.68


Including: Cash on hand                                                        248,295.15                                     282,322.45

             Bank deposit available for payment
                                                                           189,525,109.14                               631,190,032.12
at any time

             Other monetary fund available for
                                                                               141,081.10                                     165,985.11
payment at any time

III.    Balance of cash and cash equivalent at                             189,914,485.39
                                                                                                                        631,638,339.68
period-end

Other explanation:


80. Notes of changes of owners’ equity

Explain the name and adjusted amount in “Other” at end of last period:
       Nil


81. Assets with ownership or use right restricted

                                                                                                                              RMB/CNY

        Item        Ending book value                                      Reasons for restriction


                                                                 194
                                                                           深圳市深粮控股股份有限公司 2019 年半年度报告全文


                                    According to the long-term loan mortgage contract signed by Dongguan Shenliang Logistics, a
                                    subsidiary of the Company, and Agricultural Development Bank, Dongguan Logistics
                                    mortgaged the land (DFGY (2014) DT No. 6) of No. 32, Jianshe Road, Masan Village, Machong
                                    Town, Dongguan City and the grain storage and terminal facilities to be built and other buildings

Fixed assets         371,805,770.40 and structures on the ground to Agricultural Development Bank as collateral for the loan. In
                                    addition, according to the “44191000-2018 (Dongben) Zi No. 0100” loan contract signed by
                                    Dongguan Shenliang Logistics and China Agricultural Development Bank, Dongguan Logistics
                                    mortgaged the land “Yue (2016) DGSBDCQ No. 0028527” to the China Agricultural
                                    Development Bank as borrowing collateral.

                                    According to the long-term loan mortgage contract signed by Dongguan Shenliang Logistics, a
                                    subsidiary of the Company, and Agricultural Development Bank, Dongguan Logistics
                                    mortgaged the land (DFGY (2014) DT No. 6) of No. 32, Jianshe Road, Masan Village, Machong
                                    Town, Dongguan City and the grain storage and terminal facilities to be built and other buildings
Intangible
                      83,859,264.48 and structures on the ground to Agricultural Development Bank as collateral for the loan. In
assets                              addition, according to the “44191000-2018 (Dongben) Zi No. 0100” loan contract signed by
                                    Dongguan Shenliang Logistics and China Agricultural Development Bank, Dongguan Logistics
                                    mortgaged the land “Yue (2016) DGSBDCQ No. 0028527” to the China Agricultural
                                    Development Bank as borrowing collateral.

                                    According to the long-term loan mortgage contract signed by Dongguan Shenliang Logistics, a
                                    subsidiary of the Company, and Agricultural Development Bank, Dongguan Logistics
                                    mortgaged the land (DFGY (2014) DT No. 6) of No. 32, Jianshe Road, Masan Village, Machong
                                    Town, Dongguan City and the grain storage and terminal facilities to be built and other buildings
Construction
                      76,182,755.87 and structures on the ground to Agricultural Development Bank as collateral for the loan. In
in progress
                                    addition, according to the “44191000-2018 (Dongben) Zi No. 0100” loan contract signed by
                                    Dongguan Shenliang Logistics and China Agricultural Development Bank, Dongguan Logistics
                                    mortgaged the land “Yue (2016) DGSBDCQ No. 0028527” to the China Agricultural
                                    Development Bank as borrowing collateral.

                                    According to the loan contract of “Guangdong DG 2017 NGDZ No. 006” signed by Dongguan
                                    Food Industrial Park, a subsidiary of the Company, and Bank of Communications Guangdong
Intangible
                      35,798,712.71 Branch, Dongguan Food Industry Park mortgaged its two pieces of lands (DFGY (2009) DT No.
assets
                                    190) and (DFGY (2012) DT No. 152) to Bank of Communications Guangdong Branch as
                                    collateral for the borrowing.

Total                567,646,503.46 --

Other explanation:


82. Foreign currency monetary items

(1) Foreign currency monetary items

                                                                                                                          RMB/CNY

                                         Ending foreign currency
               Item                                                          Convert rate           Ending RMB balance converted
                                                balance


                                                                    195
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Monetary funds                                    --                                   --                              2,709,685.00

Including: USD                                         362,401.02 6.8747                                               2,491,398.31

          EURO

          HKD                                          248,148.93 0.8797                                                 218,286.69



Account receivable                                --                                   --                              2,013,144.22

Including: USD                                         278,280.34 6.8747                                               1,913,093.86

          EURO

          HKD                                              113,737.53 0.8797                                             100,050.36



Long-term loans                                   --                                   --

Including: USD

          EURO

          HKD



Other explanation:
    Nil


(2) Explanation on foreign operational entity, including as for the major foreign operational entity,
disclosed main operation place, book-keeping currency and basis for selection; if the book-keeping
currency changed, explain reasons

□ Applicable √Not applicable


83. Hedging

Disclosed hedging items and relevant hedging instrument based on hedging’s category, disclosed qualitative and quantitative
information for the arbitrage risks:


84. Government grants

(1) Government grants

                                                                                                                          RMB/CNY

                                                                                                              Amount reckoned into
                            Category                                      Amount                 Item
                                                                                                               current gains/losses

(1) Base of further processing for tea and nature plants                  579,537.71        Deferred income              520,462.29

(2) Enterprise technology center is a municipal R&D center.
                                                                       1,987,301.17         Deferred income                     0.00
Subsidies for industrial technological advancement

                                                                    196
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(3) Project grants for years for agricultural district, Xihu Zone          312,307.72    Deferred income                  0.00

(4)Key technology research and development for the
preparation of high-quality aroma extracts based on the use of             238,833.31    Deferred income              2,490.27
tea aroma precursors

(5)Key technology research and development for the
preparation of high-quality aroma extracts based on the use of             138,904.07    Deferred income            104,329.55
tea aroma precursors

(6) Finance Discount                                                       337,222.22    Deferred income                  0.00

(7) Industrialization of instant tea powder                           2,084,136.67       Deferred income                  0.00

(8) Grant for key technology research and industrialization of
                                                                           153,011.21    Deferred income                  0.00
instant tea powder

(9) Special fund for the development of strategic emerging
industries in Shenzhen(plant deep processing engineering)             3,538,892.95       Deferred income                  0.00
(Shen Development & Reform No. 20131601)

(10)Construction amount for 50 tons for clearly processing for
                                                                           437,500.00    Deferred income             62,500.00
Mingyou tea

(11) Subsidy for tea seeding of New Tea Garden in Wangkou                   45,575.32    Deferred income              1,941.24

(12) Subsidy for supply system construction of agricultural
                                                                           750,000.00    Deferred income                  0.00
products

(13) Grain storage project of Dongguan Shenliang Logistics
                                                                          8,111,289.27   Deferred income            131,128.56
Co., Ltd. - Storage A

(14) Phase II of grain storage project of Dongguan Shenliang
                                                                     32,453,049.26       Deferred income            515,650.26
Logistics Co., Ltd.- Storage B

(15) Grain, oil and food headquarters and innovative public
                                                                     18,000,000.00       Deferred income                  0.00
service platform of Dongguan Shenliang Logistics Co., Ltd.

(16)Special funds for intelligent upgrading and transformation
                                                                      5,100,000.00       Deferred income                  0.00
of grain warehouse for the 2017 “Grain Safety Project”

(17) Construction of 450000 ton silos and 60000 ton film silos
                                                                     17,491,764.71       Deferred income                  0.00
-CDE warehouse. Gas storage bin

(18) Special fund for agricultural development of 2016-
agricultural product safety testing project- capacity building of          492,000.00    Deferred income                  0.00
the third party inspection institution expansion evaluation

(19)Agricultural product safety testing project of the special
fund for agricultural development of 2016 - Central                   1,026,000.00       Deferred income                  0.00
investment fund

(20) Construction of O2O community sales service system for
                                                                      1,770,123.18       Deferred income             19,288.02
high quality grain and oil based on B2C E-commerce platform

(21) Industrialization of Doximi E-commerce platform                  2,383,576.57       Deferred income            430,107.44


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(22) Commercial circulation development project funding for
                                                                        524,000.00   Deferred income                   0.00
year of 2017

(23) Intelligent management of grain depot based on mobile
                                                                        766,666.62   Deferred income             100,000.02
internet

(24) R&D subsidy for 2018 from Shenzhen Science &
                                                                        216,000.00    Other income               216,000.00
Technology Innovation Committee

(25) Other subsidy                                                  1,023,166.45      Other income              1,023,166.45

(26) Received the construction subsidy for top talents project
                                                                         30,000.00    Other income                30,000.00
of Guangdong Provincial Grain & Material Reserve Bureau

(27) Grain talents program subsidy                                       20,269.70    Other income                20,269.70

(28) Received the loan discount for leading agricultural
                                                                        388,300.00    Other income               388,300.00
enterprises

(29) Service charges are refund by Taxation Bureau                      126,043.99    Other income               126,043.99

(30) Received the intermediary fee subsidy for mergers and
                                                                        738,700.00    Other income               738,700.00
acquisition of the Nanshan Economic promotion Bureau

(31)    Received the employee social insurance subsidy (1-9) of
                                                                        470,078.93    Other income               470,078.93
Wuyuan County Finance Bureau for 2018

(32)    Received the patent award for 2018 from Shangrao
                                                                         50,000.00    Other income                50,000.00
Intellectual Property Bureau

(33)    Received the guiding funds for industrial development
for 2018 from Industry and Information Technology Bureau                170,697.00    Other income               170,697.00
(Fiscal Appropriation)

(34) Received the high-tech enterprise award for 2018 from
Industry and Information Technology Bureau (Fiscal                      200,000.00    Other income               200,000.00
Appropriation)

(35) Received the provincial R&D center fund for 2018 from
Industry and Information Technology Bureau (Fiscal                       50,000.00    Other income                50,000.00
Appropriation)

(36) Amount of the new project of 50 tons clean mingou tea
                                                                         62,500.00    Other income                62,500.00
processing for first half of 2019

Total                                                             102,267,448.03                                5,433,653.72


(2) Government grants rebate

□ Applicable √Not applicable
Other explanation:




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85. Other

VIII. Changes of consolidation range

1. Enterprise merger not under the same control

(1) Enterprise merger not under the same control

                                                                                                                         RMB/CNY

                                                                                                         Income of     Net profit
                                                                                           Standard to
                                                                Acquired                                  acquiree     of acquiree
                 Time point        Cost of       Ratio of                                  determine
                                                               way Equity     Purchasing                   from           from
  Acquiree          for equity     equity         equity                                       the
                                                                obtained          date                   purchasing    purchasing
                    obtained      obtained       obtained                                  purchasing
                                                                   way                                    date to        date to
                                                                                              date
                                                                                                         period-end    period-end

Other explanation:


(2) Combination cost and goodwill

                                                                                                                         RMB/CNY

                           Combination cost

Determination method for fair value of the combination cost and contingent consideration and changes:
Main reasons for large goodwill resulted:
Other explanation:


(3) Identifiable assets and liability on purchasing date under the acquiree

                                                                                                                         RMB/CNY



                                                     Fair value on purchasing date             Book value on purchasing date
Determination method for fair value of the identifiable assets and liabilities:
Contingent liability of the acquiree bear during combination:
Other explanation:


(4) Gains or losses arising from re-measured by fair value for the equity held before purchasing date

Whether it is a business combination realized by two or more transactions of exchange and a transaction of obtained control rights in
the Period or not
□Yes √No




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(5)On purchasing date or period-end of the combination, combination consideration or fair value of
identifiable assets and liability for the acquiree are un-able to confirm rationally

(6) Other explanation

2. Enterprise combined under the same control

(1) Enterprise combined under the same control in the Period

                                                                                                                              RMB/CNY

                                                                           Income of the Net profit of
                                                                              combined   the combined
                                                                                                         Income of the Net profit of
                                                                            party from     party from
                                 Basis of                    Standard to                                   combined     the combined
                Equity ratio                                               period-begin period-begin
                                combined      Combination determine the                                   party during party during
  Acquiree      obtained in                                                      of            of
                                under the        date       combination                                       the              the
               combination                                                 combination combination
                               same control                     date                                      comparison     comparison
                                                                               to the        to the
                                                                                                             period           period
                                                                           combination combination
                                                                                date          date

Other explanation:


(2) Combination cost

                                                                                                                              RMB/CNY

                        Combination cost

Explanation on contingent consideration and its changes:
Other explanation:


(3) Book value of the assets and liability of the combined party on combination date

                                                                                                                              RMB/CNY



                                                         On purchasing date                           At end of last period

Contingent liability of the combined party bear during combination:
Other explanation:


3. Reverse purchase

Basic transaction information, basis of counter purchase, whether making up business due to the assets and liability reserved by listed
company and basis, determination of combination cost, amount and calculation on adjusted equity by equity transaction




                                                                 200
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4. Disposal Subsidiary

Whether there is a subsidiary disposal on one time, which is loss control of rights
□Yes √No
Whether there is a subsidiary disposal by steps through multiple trading and loss control of rights in the period
□Yes √No


5. Other reasons for consolidation range changed

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


6. Other

IX. Equity in other entity

1. Equity in subsidiary

(1) Constitute of enterprise group


                     Main operation                                                      Share-holding ratio
    Subsidiary                          Registered place    Business nature                                           Acquired way
                          place                                                       Directly         Indirectly

Shenbao
                   Shenzhen            Shenzhen            Manufacturing                  100.00%                   Establishment
Huacheng

Wuyuan Ju Fang
                   Shangrao            Shangrao            Manufacturing                  100.00%                   Establishment
Yong

Shenbao Sanjing Huizhou                Shenzhen            Manufacturing                  100.00%                   Establishment

Huizhou Shenbao
                   Huizhou             Huizhou             Comprehensive                  100.00%                   Establishment
Technology

                                                           Property
Shenbao Property Shenzhen              Shenzhen                                           100.00%                   Establishment
                                                           management

Shenbao
                                                           Wholesale
Industrial &       Huizhou             Shenzhen                                           100.00%                   Establishment
                                                           business
Trading

Hangzhou Ju
                   Hangzhou            Hangzhou            Comprehensive                  100.00%                   Establishment
Fang Yong

                                                           Development,
Shenbao
                                                           consultant and
Technology         Shenzhen            Shenzhen                                           100.00%                   Establishment
                                                           transfer of
Center
                                                           technology

Fuhaitang          Hangzhou            Hangzhou            Tea planting,                                    100.00% Acquisition

                                                                   201
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Ecological                                 production and
                                           sales

                                           Wholesale
Chunshi Network Hangzhou        Hangzhou                                              100.00% Establishment
                                           business

Shenshenbao                                Investment
                     Shenzhen   Shenzhen                              100.00%                   Establishment
Investment                                 management

 Shenshenbao
                     Shenzhen   Shenzhen   Commerce                                   100.00% Establishment
Tea Culture

Ju Fang Yong                               Wholesale
                     Hangzhou   Hangzhou                                               60.00% Establishment
Trading                                    business

Yunnan Supply                              Wholesale
                     Pu’er     Pu’er                                100.00%                   Establishment
Chain                                      business

Huizhou Shenbao                            Wholesale
                     Shenzhen   Shenzhen                              100.00%                   Establishment
Food                                       business

Shenbao Rock
                     Wuyishan   Wuyishan   Manufacturing              100.00%                   Establishment
Tea

Pu’er Tea Trading
                     Pu’er     Pu’er     Service industry            55.00%                   Establishment
Center

Shenbao
                     Shenzhen   Shenzhen   Commerce                                   100.00% Establishment
Tea-Shop

Fuhaitang
                     Hangzhou   Hangzhou   Catering                                   100.00% Establishment
Catering

                                           Grain & oil                                          Combine under
SZCG                 Shenzhen   Shenzhen                              100.00%
                                           trading                                              the same control

                                                                                                Combine under
Shenzhen Flour       Shenzhen   Shenzhen   Flour processing           100.00%
                                                                                                the same control

Hualian Grain &                            Grain & oil                                          Combine under
                     Shenzhen   Shenzhen                              100.00%
oil trading                                trading                                              the same control

                                                                                                Combine under
Hainan Haitian       Haikou     Haikou     Feed production             51.00%          49.00%
                                                                                                the same control

Shenliang Quality                                                                               Combine under
                     Shenzhen   Shenzhen   Inspection                 100.00%
Inspection                                                                                      the same control

                                                                                                Combine under
Shenliang Doximi Shenzhen       Shenzhen   E-commerce                 100.00%
                                                                                                the same control

Shenliang                                  Fresh food
                                                                                                Combine under
Cold-Chain           Shenzhen   Shenzhen   management                 100.00%
                                                                                                the same control
Logistic                                   on-line

Shenliang Big                              Sales and                                            Combine under
                     Shenzhen   Shenzhen                               70.00%
Kitchen                                    processing of                                        the same control

                                                     202
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                                                          grain ,oil and
                                                          products

                                                          Real estate
Shenliang Real
                                                          development and                                            Combine under
Estate               Shenzhen          Shenzhen                                          100.00%
                                                          property                                                   the same control
Development
                                                          management

Shenliang                                                 Property                                                   Combine under
                     Shenzhen          Shenzhen                                                            100.00%
Property                                                  management                                                 the same control

Shenliang Storage                                                                                                    Combine under
                     Yingkou           Yingkou            Storage                        100.00%
(Yingkou) )                                                                                                          the same control

Dongguan
                                                                                                                     Combine under
Shenliang            Dongguan          Dongguan           Storage, logistics             51.00%
                                                                                                                     the same control
Logistics

Dongguan Food                                             Port operation,                                            Combine under
                     Dongguan          Dongguan                                                             51.00%
Industrial Park                                           food production                                            the same control

 Dongguan Food                                            Food                                                       Combine under
                     Dongguan          Dongguan                                                             51.00%
Trade                                                     production                                                 the same control

Dongguan                                                                                                             Combine under
                     Dongguan          Dongguan           Feed, biofertilizer                               51.00%
Jinying                                                                                                              the same control

                                                          Construction of
                                                          food base and
Shuangyashan
                                                          development of                                             Combine under
Shenliang            Shuangyashan      Shuangyashan                                      51.00%
                                                          related                                                    the same control
Zhongxin
                                                          complementary
                                                          facility

                                                          Construction of
                                                          food base and
Hongxinglong
                                                          development of                                             Combine under
Nongken              Shuangyashan      Shuangyashan                                                         51.00%
                                                          related                                                    the same control
Industrial Park
                                                          complementary
                                                          facility
Explanation on share-holding ratio in subsidiary different from ratio of voting right:
Basis for controlling the invested entity with half or below voting rights held and without controlling invested entity but with over
half and over voting rights:
Major structured entity included in consolidate statement:
Basis of termination of agent or consignor:

Other explanation:


(2) Important non-wholly-owned subsidiary

                                                                                                                             RMB/CNY

                                                                     203
                                                                                              深圳市深粮控股股份有限公司 2019 年半年度报告全文


                                                                                                      Dividend announced to
                                   Share-holding ratio of         Gains/losses attributable                                                  Ending equity of
          Subsidiary                                                                                  distribute for minority in
                                         minority                 to minority in the Period                                                     minority
                                                                                                             the Period

Dongguan Shenliang
                                                       49.00%                   5,443,741.51                                                      153,130,186.36
Logistics
Explanation on holding ratio different from the voting right ratio for minority shareholders:

Other explanation:


(3) Main finance of the important non-wholly-owned subsidiary

                                                                                                                                                            RMB/CNY

                                       Ending balance                                                               Opening balance
Subsidia                 Non-curr                            Non-curr                                  Non-curr                               Non-curr
             Current                   Total       Current                   Total       Current                     Total         Current                    Total
     ry                    ent                                    ent                                     ent                                    ent
              assets                  assets   liabilities                 liabilities       assets                  assets    liabilities                  liabilities
                          assets                             liabilities                                 assets                               liabilities

Donggua
n
             248,138, 1,151,17 1,399,30 216,154, 870,643, 1,086,79 634,938, 920,908, 1,555,84 679,025, 610,420, 1,289,44
Shenlian
                 218.07 0,302.88 8,520.95           682.24      254.30 7,936.54              480.46       724.11 7,204.57           611.19      685.53 6,296.72
g
Logistics

                                                                                                                                                            RMB/CNY

                                           Current Period                                                               Last Period

                                                                           Cash flow                                                                   Cash flow
                                                          Total                                                                        Total
    Subsidiary      Operating                                                from              Operating                                                    from
                                      Net profit       comprehensi                                                Net profit       comprehensi
                       income                                              operation            income                                                 operation
                                                        ve income                                                                   ve income
                                                                            activity                                                                    activity

Dongguan
                   1,222,449,75 11,109,676.5 11,109,676.5 97,553,848.2 905,720,767. 12,516,721.4 12,516,721.4 -19,848,597.9
Shenliang
                            5.98                   6                 6                   8                 08                  1                  1                   7
Logistics

Other explanation:


(4) Significant restrictions on the use of enterprise group assets and pay off debts of the enterprise group

(5) Financial or other supporting offers to the structured entity included in consolidated financial statement
range

Other explanation:




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                                                                              深圳市深粮控股股份有限公司 2019 年半年度报告全文


2. Transaction that has owners equity shares changed in subsidiary but still with controlling rights

(1) Owners equity shares changed in subsidiary

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

                                                                                                                          RMB/CNY



Other explanation


3. Equity in joint venture and associated enterprise

(1) Important joint venture or associated enterprise


                                                                                               Share-holding ratio    Accounting
                                                                                                                     treatment on
                                          Main
     Joint venture or Associated                     Registered                                                      investment for
                                        operation                        Business nature
              enterprise                                 place                                 Directly Indirectly joint venture and
                                          place
                                                                                                                       associated
                                                                                                                       enterprise

Zhuhai Hengxing Feed Industrial
                                         Zhuhai          Zhuhai   Aquatic fee and animal fee   40.00%                   Equity
Co., Ltd.

Shenzhen Duoxi Equity Investment                                  Trusted equity investment
                                        Shenzhen     Shenzhen                                  35.00%                   Equity
Fund Management Co., Ltd.                                                     fund

                                                                   Design for information
Shenzhen Shenyuan Data Tech.
                                        Shenzhen     Shenzhen         system, software                     40.00%       Equity
Co., Ltd
                                                                          development

Shenliang Intelligent Wulian Equity
                                                                     Equity investment;
Investment Fund (Shenzhen)              Shenzhen     Shenzhen                                  49.02%                   Equity
                                                                    investment consultant
Partnership Enterprise (Limited)

Changzhou Shenbao Chacang                            Changzho
                                       Changzhou                         Manufacturing         33.00%                   Equity
E-business Co., ltd.                                       u

Huizhou Shenbao Manan
                                         Huizhou      Huizhou            Manufacturing                     51.00%       Equity
Bio-technology Co., Ltd.

Shenzhen Shichumingmen
                                        Shenzhen     Shenzhen               Catering                       51.00%       Equity
Restaurant Management Co., Ltd.

Guangzhou Shenbao Mendao Tea                         Guangzho
                                      Guangzhou                              Retail            45.00%                   Equity
Co., Ltd                                             u

Holding shares ratio different from the voting right ratio:
Has major influence with less 20% voting rights hold, or has minor influence with over 20% (20% included) voting rights hold:



                                                                   205
                                                                       深圳市深粮控股股份有限公司 2019 年半年度报告全文


(2) Main financial information of the important joint venture

                                                                                                                   RMB/CNY

                                               Ending balance/Current Period               Opening balance/Last Period



Other explanation


(3) Main financial information of the important associated enterprise

                                                                                                                   RMB/CNY

                                               Ending balance/Current Period               Opening balance/Last Period



Book value of the equity investment for
                                                                    73,362,651.19                              70,999,666.81
associated enterprise

Net profit                                                             7,096,756.53                              1,374,764.19

Total comprehensive income                                             7,096,756.53                              1,374,764.19

Other explanation


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

                                                                                                                   RMB/CNY

                                                Ending balance/Current Period              Opening balance/Last Period

Joint venture:                                                 --                                      --

Amount based on share-holding ratio                            --                                      --

Associated enterprise:                                         --                                      --

Amount based on share-holding ratio                            --                                      --

Other explanation


(5) Major limitation on capital transfer ability to the Company from joint venture or associated enterprise

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

                                                                                                                   RMB/CNY

                                                                       Un-recognized losses not
                                            Cumulative un-recognized recognized in the Period (or Cumulative un-recognized
      Joint venture/Associated enterprise
                                                     losses             net profit enjoyed in the     losses at period-end
                                                                                Period)

Changzhou Shenbao Chacang E-business
                                                        8,367,950.07                  126,999.270               8,494,949.33
Co., ltd.


                                                              206
                                                                                 深圳市深粮控股股份有限公司 2019 年半年度报告全文


Shenzhen Shichumingmen Restaurant
                                                                 3,491,151.31                 426,122.69                3,917,274.00
Management Co., Ltd.

Other explanation


(7) Unconfirmed commitment with joint venture investment concerned

(8) Intangible liability with joint venture or affiliates investment concerned

4. Major conduct joint operation


                            Main place of                                                      Shareholding ratio/ shares enjoyed
         Name                                    Registration place         Business nature
                              operation                                                          Directly            In-directly

Share-holding ratio or shares enjoyed different from voting right ratio:
If the co-runs entity is the separate entity, basis of the co-runs classification
Other explanation


5. Structured body excluding in consolidate financial statement


Explanation:


6. Other

X. Disclosure of risks relating to financial instruments

Our business operation makes the Company exposed to various financial risks: credit risk, liquidity risk and
market risk (mainly refers to exchange risk and interest risk). The general risk management policy of the
Company is to minimize potential negative effects on our financial performance in view of the unforeseeable
financial market.


(i) Credit risk


Credit risk refers to the risk of a financial loss caused by the counter party’s failure to fulfill its contractual
obligations. The credit risk mainly arises from monetary funds, account receivable and other account receivable so
on. The management has established adequate credit policies and continues to monitor exposure of these credit
risks.


The monetary funds held by the Company are mainly deposited in state-controlled banks and other large and
medium-sized commercial banks and other financial institutions. The management believes that these commercial
banks have high reputation and asset status and have no major credit risk, and won't create any major losses
caused by the breach of contract of the opposite side.

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                                                                    深圳市深粮控股股份有限公司 2019 年半年度报告全文




For trade receivables and other receivables, the Company establishes relevant policies to control exposure of
credit risk. The Company appraises customers’ credit quality based on their financial position, possibility to
obtain guarantee from third parties, credit history and other factors such as prevailing market conditions, and set
corresponding credit terms. Customers’ credit history would be regularly monitored by the Company. For those
customers who have bad credit history, the Company will call collection in written form, shorten credit term or
cancel credit term to ensure its overall credit risk is under control.


The maximum credit risk exposure equals to the carrying value of each financial asset in balance sheet (including
derivative financial instrument). The Company has not provided any guarantee which would otherwise make the
Company exposed to credit risk except for the guarantee for financial carried in Note XI.


(ii) Liquidity risk
Liquidity risk represents the possibility that the Company is not able to acquire sufficient fund to satisfy business
requirement, settle debt when it is due and perform other obligation of payment.


The finance department continues to monitor capital requirement for short and long term, to ensure adequate cash
reserve. In addition, it continues to monitor whether borrowing agreement is complied with, and seeks for
commitment from major financial institutions for provision of sufficient back-up fund, so as to satisfy capital
requirement in a short and long term.



(iii) Market risk


1.Exchange risk
The major operation of the Company is located in the PRC, and its major operation is settled in Renminbi.
However, there is also exchange risk in respect of the recognized foreign currency assets and liabilities and future
foreign currency transactions which are mainly denominated in US dollar. Our finance department is responsible
for monitoring scale of foreign currency assets and liabilities and foreign currency transactions, to minimize its
exposure to exchange risks. In reporting period, the Company did not sign any forward exchange contract or
monetary exchange contract.
2.Interest risk
Our interest risk mainly arises from bank borrowings. Financial liabilities at floating rate expose the Company to
cash flow interest risk, and financial liabilities at fixed rate expose the Company to fair value interest risk. The
Company determines the respective proportion of contracts at fixed rate and floating rate based on prevailing
market conditions.


The financial department of the Company continuously monitors the interest rate of the Company. The rise in
interest rates will increase the cost of new interest-bearing debts and the interest expense of the Company’s unpaid
                                                           208
                                                                 深圳市深粮控股股份有限公司 2019 年半年度报告全文


interest-bearing debts with floating interest rates, management will make timely adjustments based on the latest
market conditions.


3.Price risk
The Company purchases and sells products at market prices, therefore it is affected by fluctuation of these prices.




XI. Disclosure of fair value

1. Ending fair value of the assets and liabilities measured by fair value

                                                                                                          RMB/CNY

                                                                 Ending fair value
               Item
                                    First-order           Second-order               Third-order           Total

I. Sustaining measured by fair
                                        --                      --                       --                 --
value

(i)Tradable financial assets             1,153,309.17                                                   1,153,309.17

1.Financial assets measured by
fair value and with variation
                                         1,153,309.17                                                   1,153,309.17
reckoned into current
gains/losses

(2) Equity instrument
                                         1,153,309.17                                                   1,153,309.17
investment

II. Non-persistent measure              --                      --                       --                 --




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                                                                            深圳市深粮控股股份有限公司 2019 年半年度报告全文


2. Recognized basis for the market price sustaining and non-persistent measured by fair value on
first-order

3. Valuation technique and qualitative and quantitative information on major parameters for the fair value
measure sustaining and non-persistent on second-order

4. Valuation technique and qualitative and quantitative information on major parameters for the fair value
measure sustaining and non-persistent on third-order

5. Adjustment information and sensitivity analysis of unobservable parameters for the fair value measure
sustaining and non-persistent on third-order

6. Sustaining items measured by fair value, as for the conversion between at all levels, reasons for
conversion and policy for conversion time point

7. Changes of valuation technique in the Period

8. Financial assets and liability not measured by fair value

9. Other

XII. Related party and related transactions

1. Parent company

                                                                                           Ratio of shareholding Ratio of voting right
     Parent company    Registration place     Business nature         Registered capital
                                                                                             on the Company        on the Company

                                            Investing in industry,
Shenzhen Fude                               development,
State-owned Capital Shenzhen                operation and            500 million Yuan                   63.79%                63.79%
Operation Co., Ltd.                         management of the
                                            own property

Explanation on parent company of the enterprise
Ultimate controller of the Company is Shenzhen Municipal People’s Government State-Owned Assets Supervision and
Administration Commission
Other explanation:


2. Subsidiary

Subsidiary of the Company found more in Note IX- Equity in other entity


3.    Joint venture and associated enterprise

Joint Venture of the Company found more in Note IX- Equity in other entity
Other cooperative enterprise and joint venture that have related transaction with the Company in the Period or occurred in pr evious
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                                                                              深圳市深粮控股股份有限公司 2019 年半年度报告全文


period

                 Joint venture/Associated enterprise                                            Relationship

Other explanation


4. Other related party


                         Other related party                                        Relationship with the Enterprise
                                                                   Shareholder of the Company, subsidiary of the actual controller,
Shenzhen Agricultural Products Co., Ltd
                                                                   controlled by the same ultimate controlling party
                                                                   Subsidiary of the actual controller, Controlled by the same
Zhanjiang Haitian Aquatic Feed Co., Ltd
                                                                   ultimate controlling party

Dongguan Fruit and Vegetable Non-staple Food Market Co., Ltd Minority shareholder of controlling subsidiary
                                                                   Subsidiary of the actual controller, Controlled by the same
Taizhong Agricultural Co., Ltd                                     ultimate controlling party
                                                                   Former shareholder of the Company, Controlled by the same
Shenzhen Investment Management Co., Ltd                            ultimate controlling party

Fujian Wuyishan Yuxing Tea Co., Ltd*1                              Minority shareholder of former controlling subsidiary
                                                                   Wholly-owned subsidiary of Shenzhen Agricultural Products
Shenzhen Fruits and Vegetables Trading Co., Ltd
                                                                   Co., Ltd

Shenzhen Higreen International Agricultural Products Logistic      Controlling subsidiary of Shenzhen Agricultural Products Co.,

Management Co., Ltd                                                Ltd

Zhanjiang Changshan (Shenzhen) Ecological Aquaculture Co.,         Has the same parent company
Ltd
                                                                   Former shareholder of Shenzhen Agricultural Products Co., Ltd,
Shenzhen Yixin Investment Co., Ltd
                                                                   Controlled by the same ultimate controlling party

Other explanation
*1: Fujian Wuyishan Yuxing Tea Co., Ltd. was a minority shareholder of Fujian Wuyishan Shenbao Yuxing Tea Co., Ltd., a former
controlling subsidiary of Hangzhou Ju Fang Yong which is a subsidiary of the Company, and the controlling subsidiary was
separated in 2016.




5. Related transaction


(1) Goods purchasing, labor service providing and receiving

Goods purchasing/labor service receiving
                                                                                                                           RMB/CNY

                                                                                        Whether more than
                       Related transaction                      Approved transaction
      Related party                            Current Period                          the transaction limit       Last Period
                             content                                     limit
                                                                                                 (Y/N)

Goods sold/labor service providing
                                                                  211
                                                                                深圳市深粮控股股份有限公司 2019 年半年度报告全文


                                                                                                                                     RMB/CNY

                                                                    Related transaction
                         Related party                                                             Current Period            Last Period
                                                                          content

Shenzhen Fude State-owned Capital Operation Co., Ltd.            Payment for goods                           2,510.00

Shenzhen Shenyuan Data Tech. Co., Ltd                            Office space leasing                       15,358.00                28,293.00

Shenzhen Agricultural Products Co., Ltd                          Sales of tea                              219,560.00                65,000.00

Shenzhen Higreen International Agricultural Products
                                                                 Sales of tea                                7,410.00
Logistic Management Co., Ltd

Shichumingmen Company                                            Sales of tea products                                                 246.15

Shenzhen Fruits and Vegetables Trading Co., Ltd                  Sales of tea                                3,270.00

Explanation on goods purchasing, labor service providing and receiving


(2) Related trusteeship management/contract & entrust management/ outsourcing

Trusteeship management/contract:

                                                                                                                                     RMB/CNY

                                                                                                                               Managed
                                                                                                           Managed
                                                                                                                               earnings
Client/Contract-o     Entrusting         Trustee/assets                                               earnings /pricing
                                                              Trustee /start      Trustee /ends                            confirmed in the
     ut party       party/Contractor        contract                                                   of the contract
                                                                                                                           period / contract
                                                                                                           earnings
                                                                                                                               earnings

Related managed/contract:
Entrusted management/outsourcing:
                                                                                                                                     RMB/CNY

                                                                                                                               Entrusted
                                                                                                        Trustee fee /          earnings
Client/Contract-o     Entrusting         Entrust /assets
                                                              Entrust /start       Entrust /ends       pricing of the      confirmed in the
     ut party       party/Contractor      outsourcing
                                                                                                        outsourcing             period /
                                                                                                                           outsourcing costs

Related management/ outsourcing:


(3) Related lease

As a lessor for the Company:
                                                                                                                                     RMB/CNY

                                                                      Lease income in recognized in Lease income in recognized last
                Lessee                          Assets type
                                                                                  the Period                            the Period

Shichumingmen                             Management site                                  580,466.28                            503,949.19

Shenzhen Fude State-owned Capital         Office space leasing                                 84,300.00


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                                                                        深圳市深粮控股股份有限公司 2019 年半年度报告全文


Operation Co., Ltd.

As lessee:
                                                                                                                            RMB/CNY

                                                                 Lease income in recognized in Lease income in recognized last
                   Lessor                     Assets type
                                                                             the Period                        the Period

Shenzhen Fude State-owned Capital
                                        Warehouse leasing                            14,217,100.00                    14,217,100.00
Operation Co., Ltd.

Shenzhen Fude State-owned Capital
                                        Management site                                345,038.85
Operation Co., Ltd.

Explanation on related lease
The Company's second-level subsidiary, Shenzhen Shenshenbao Tea Culture Business Management Co., Ltd.
Nanshan Software Industry Base Subbranch subleased the shop located at Room 02, 2nd Floor, Tower A, Building
5, Software Industry Base, Keyuan Road, Nanshan District, Shenzhen that it rented from Shenzhen Investment
Holding Co., Ltd. to the Company's associated company, Shi Chu Ming Men Company, the rental income for this
year was RMB 580,466.28, and the pricing of related transactions was based on the market price.
As an asset management unit entrusted by State-owned Assets Supervision and Administration Commission of
Shenzhen, Fude Capital signed the “Overall Rental Agreement of Shenzhen Grain Reserve Depot” with Shenzhen
Cereals Group on October 17, 2018, the lease term was from October 1, 2017 to December 31, 2019, it was
agreed to pay an annual total rent of RMB 28,434,200 based on market prices.


Fude Capital rented out Room 3001-3065 of third floor and 5008-5009 of fifth floor of the main building and
three storeys of darkrooms of Grain Building located at Nanfang No. 656, Hubei Road, Luohu District, Shenzhen
and Room 2303 located at Building C, World Trade Plaza, No. 9, Fuhong Road, Futian Street to the Company’s
second-tier subsidiaries, Shenliang Real Estate and Shenliang Property as office use, the lease period is from
August 1, 2018 to July 31, 2019, , and the pricing of related transactions was based on the market price.



(4) Related guarantee

As guarantor
                                                                                                                            RMB/CNY

                                                                                                             Whether the guarantee
      Secured party            Guarantee amount       Guarantee start date      Guarantee expiry date
                                                                                                               has been fulfilled
                                                                               Two     years   after   the
                                                                               expiration of the debt

Shenbao Huacheng                     30,000,000.00 2018-07-26                  performance period for N
                                                                               each specific credit under
                                                                               the main contract

As secured party

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                                                                      深圳市深粮控股股份有限公司 2019 年半年度报告全文


                                                                                                                   RMB/CNY

                                                                                                    Whether the guarantee
       Guarantor             Guarantee amount       Guarantee start date    Guarantee expiry date
                                                                                                        has been fulfilled

Dongguan Fruit and
Vegetable Non-staple                14,700,000.00 2017-06-08               2019-04-11               Y
Food Market Co., Ltd

Dongguan Fruit and
Vegetable Non-staple                53,571,310.66 2016-12-27               2021-12-26               N
Food Market Co., Ltd

Dongguan Fruit and
Vegetable Non-staple               138,955,864.84 2018-07-27               2032-08-29               N
Food Market Co., Ltd

Explanation on related guarantee

1. According to the “Comprehensive Credit Line Contract” numbered as PY (SZ) ZZ No. A237201707130001
signed by Shenbao Huacheng, a subsidiary of the Company, with Ping An Bank, Shenzhen Branch on July 27,
2017, Ping An Bank, Shenzhen Branch provided a comprehensive credit line of RMB 30 million to the subsidiary
of the Company, Shenbao Huacheng, the time limit of the comprehensive credit limit was within 12 months from
the effective date of the contract. In order to ensure that all claims under this comprehensive credit limit can be
repaid, the Company has provided a maximum guarantee with guarantee amount of RMB 30,000,000.00. Except
for the guarantee amount, other interests, interest and interest penalty, and other claims charges are also
guaranteed, and the guarantee period is from July 26, 2018 to the end of the two-year period from the expiration
date for debt performance of each specific credit line under the master contract.



2. According to the working capital loans contract (Yue DG2017 nian Jie Zi No. 005) entered by the subsidiary
Dongguan Shenliang Logistics and Bank of Communications Dongguan Branch, Dongguan Shenliang Logistics
gains a cyclic quota of RMB 30 million with borrowing interest rate of 5.22%. Each loan drawn under this
contract shall be for a period of not more than 12 months, and the maturity date for all loans shall be no later than
11th April 2019. The Company’s subsidiaries, SZCG and Dongguan Fruit and Vegetable Non-staple Food Market
Co., Ltd provided joint liability guarantee for the loans. The amount guaranteed by Dongguan Fruit and Vegetable
Non-staple Food Market Co., Ltd. was RMB 14.7 million, and the amount guaranteed by SZCG was RMB 15.3
million. During the guarantee period, respectively calculate according to the debt performance period of each
principal debt agreed in the main contract (under opening of the bank acceptance bill/letter of credit/guarantee
letter, calculate according to the creditor's advance payment date). The guarantee period under each principal debt
is from the expiration of the debt performance period (or the creditor’s advance payment date) to two years after
the date of the expiration of the debt performance period (or the creditor’s advance payment date) of the main debt
finally due under all main contracts.




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                                                                      深圳市深粮控股股份有限公司 2019 年半年度报告全文


3. According to the bank credit contract of credit No. CN11002181808-160714-SCDGTML2 signed by Dongguan
Shenliang Logistics, a subsidiary of the Company, and HSBC, HSBC will provide a loan credit of not exceeding
RMB 200 million to Dongguan Logistics, the applicable interest rate for each loan at each interest period is 90% of
the central bank loan benchmark interest rate applicable on the fixed interest date of the interest period, the
borrowing date is from December 27, 2016 to December 26, 2021. As of December 31, 2018, the balance of the loan
principal achieved by Dongguan Shenliang Logistics from HSBC was RMB 109,329,205.42, and the Company’s
subsidiaries, SZCG and Dongguan Fruit and Vegetable Non-staple Food Market Co., Ltd provided joint liability
guarantee for the loans, the amount guaranteed by Dongguan Fruit and Vegetable Non-staple Food Market Co.,
Ltd. was RMB 53,571,310.66, and the amount guaranteed by SZCG was RMB 55,757,894.76.



4. According to the loan contract “Yue DG 2017 NGDZ No. 006” signed by Dongguan Food Industrial Park, a
subsidiary of the Company, and Bank of Communications Dongguan Branch, the current loan principal is
respectively RMB 49.80 million, RMB 3,783,400, RMB 30 million and RMB 200 million, the loan period is from
July 27, 2018 to August 29, 2032. The loan interest rate of RMB 200 million is calculated by the benchmark
interest rate for loan of the People’s Bank of China on the loan entry date, which is 4.90%; the other three are
calculated by the benchmark interest rate of the People’s Bank of China on the loan entry date after rising by 15%,
which is 5.635%. The Company’s subsidiaries, SZCG and Dongguan Fruit and Vegetable Non-staple Food
Market Co., Ltd, provide joint liability guarantee for the loans, the amount guaranteed by Dongguan Fruit and
Vegetable Non-staple Food Market Co., Ltd is RMB 138,955,864.84, and the amount guaranteed by SZCG is
RMB 144,627,532.80.




(5) Related party’s borrowed funds

                                                                                                                     RMB/CNY

     Related party        Borrowing amount            Starting date             Maturity date                 Note
Borrowing

Lending



(6) Related party’s assets transfer and debt reorganization

                                                                                                                     RMB/CNY

          Related party        Related transaction content            Current Period                 Last Period


(7) Remuneration of key manager

                                                                                                                     RMB/CNY

                   Item                              Current Period                             Last Period

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                                                                                 深圳市深粮控股股份有限公司 2019 年半年度报告全文


(8) Other related transaction

6. Receivable and payable of related party

(1) Receivable item

                                                                                                                                RMB/CNY

                                                                Ending balance                              Opening balance
    Item Name                  Related party
                                                    Book balance          Bad debt provision      Book balance         Bad debt provision

                         Shenzhen Fude
                                                                                      421.50
Account receivable       State-owned Capital                42,150.00
                         Operation Co., Ltd.

                         Shenzhen
Account receivable       Agricultural                       55,000.00                  89.60                8,960.00                89.60
                         Products Co., Ltd

                         Shenzhen Higreen
                         International
                         Agricultural
Account receivable                                             7,410.00                74.10
                         Products Logistic
                         Management Co.,
                         Ltd

Other account            Changzhou Shenbao
                                                       20,618,710.83           18,024,144.51        20,413,947.34           17,819,381.02
receivable               Chacang Company

                         Shenzhen Higreen
                         International
Other account            Agricultural
                                                            50,000.00                 500.00               50,000.00               500.00
receivable               Products Logistic
                         Management Co.,
                         Ltd

Other account
                         Shichumingmen                  1,365,179.36              275,978.87          1,429,898.28             275,978.87
receivable


(2) Payable item

                                                                                                                                RMB/CNY

             Item Name                         Related party                  Ending book balance              Opening book balance

                                     Zhanjiang Changshan
Other account payable                (Shenzhen) Ecological                                 7,972,700.83                       7,967,662.50
                                     Aquaculture Co., Ltd

                                     Shenzhen Duoxi Equity
Other account payable                                                                          39,906.00                        41,486.00
                                     Investment Fund Management

                                                                      216
                                                                     深圳市深粮控股股份有限公司 2019 年半年度报告全文


                                 Co., Ltd.

                                 Shenzhen Fruits and Vegetables
Other account payable                                                          245,714.59                 245,714.59
                                 Trading Co., Ltd

                                 Shenzhen Investment
Other account payable                                                         3,510,297.20               3,510,297.20
                                 Management Co., Ltd

                                 Shenzhen Fude State-owned
Other account payable                                                        67,762,184.76              53,470,612.86
                                 Capital Operation Co., Ltd.

                                 Shenzhen Investment
Dividend payable                                                              2,690,970.14               2,690,970.14
                                 Management Co., Ltd


7. Related party commitment

8. Other

XIII. Share-based payment

1. Overall situation of share-based payment


□ Applicable √Not applicable


2. Share-based payment settled by equity

□ Applicable √Not applicable


3. Share-based payment settled by cash

□ Applicable √Not applicable


4. Modification and termination of share-based payment

Nil


5. Other

Nil

XIV. Commitment or contingency

1. Important commitments

Important commitments on balance sheet date
The Company has no important commitments that need to disclosed up to 30th June 2019



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2. Contingency

(1)Contingency on balance sheet date

1. Contingencies arising from pending litigation or arbitration and its financial impact


(1) Disputes over the loan contracts between Changzhou Shenbao Chacang E-commence Co., Ltd., the Company
and Shenzhen Agricultural Products Financing Guarantee Co., Ltd.



On July 15, 2016, Shenzhen Agricultural Products Financing Guarantee Co., Ltd. (hereinafter referred to as
Agricultural Products Guarantee Company) submitted a “Civil Appeal” to the People’s Court of Futian District,
Shenzhen, requesting Changzhou Shenbao Chacang Company to repay the loan principal amount of RMB
5,000,000.00, the interest of RMB 389,968.52, and the interest penalty of RMB 3,200,271.79 (the interest penalty
was temporarily calculated to June 30, 2016, which shall be actually calculated to the date of the full repayment of
the borrowing); and pay the compensation of RMB 100,000.00 (5 million Yuan × 2%); two items in total were
RMB 8,690,240.31; the Company undertook joint liability for the loan of RMB 5,000,000.00.


On May 31, 2017, Shenzhen Futian District Court made the first-instance judgment and ruled Changzhou
Shenbao Chacang Company to repay the loan principal of RMB 5 million and the interest and interest penalty, the
Company did not need to undertake joint liability for the loan of RMB 5 million of Changzhou Shenbao Chacang
Company. On July 4, 2017, the Agricultural Products Guarantee Company filed an appeal, on October 13, 2017,
and Shenzhen Intermediate People’s Court held the second instance hearing.


On April 26, 2019, the Shenzhen Intermediate People's Court made a civil judgment (Civil Judgment (2017) Yue
03 Min Zhong No. 12296), and judged Shenzhen Shenbao Industrial Co., Ltd. (now renamed as Shenzhen Cereals
Holdings Co., Ltd.) to undertake a joint and several liability for the of Changzhou Shenbao Chacang E-Commerce
Co., Ltd. within the scope of 3.5 million yuan. Shenzhen Shenbao Industrial Co., Ltd. (now renamed as Shenzhen
Cereals Holdings Co., Ltd.) has the right to claim compensation from Changzhou Company after the payment.
The judgment has taken effect,currently it’s in a reconciliation



(2) Contract disputes between the Company’s subsidiaries, Mount Wuyi Shenbao Rock Tea Co., Ltd. (hereinafter
referred to as Wuyishan Rock Tea Company) and Hangzhou Jufangyong Holdings Co., Ltd. (hereinafter referred
to as Jufangyong Company), and Wuyishan Jiuxing Tea Co., Ltd. (hereinafter referred to as Jiuxing Company),
Fujian Wuyishan Yuxing Tea Co., Ltd. (hereinafter referred to as Yuxing Company), Xingjiu Tea Co., Ltd., Chen
Yuxing, Chen Guopeng



On September 22, 2017, Jufangyong Company, Xingjiu Tea Co., Ltd., Yuxing Company, Chen Yuxing and Chen
Guopeng signed an “Formal Agreement on the Separation of Fujian Wuyishan Shenbao Yuxing Tea Co., Ltd.”,
                                                              218
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according to the separation agreement: the original Shenbao Yuxing Company was separated, after the separation,
Jufangyong Company held 100% equity of the newly established company (i.e. Shenbao Rock Tea Company),
and Yuxing Company and Xingjiu Tea Company jointly held 100% equity of the surviving company (Jiuxing
Company); Shenbao Rock Tea Company got receivables of RMB 7,273,774.01, which was guaranteed by Jiuxing
Company to achieve RMB 2 million within one year after separation and the remaining amount would be returned
within 2 years. Chen Yuxing and Chen Guopeng, as the actual controllers of Jiuxing Company, Yuxing Company
and Xingjiu Tea Company, assumed joint responsibility for the joint guarantee to Shenbao Rock Tea Company and
Jufangyong Company for all the obligations and responsibilities stipulated in the “Separation Agreement”.



As of September 22, 2018, the time limit stipulated in the “Separation Agreement” for the realization of four
receivables had expired, and Shenbao Rock Tea Company still had RMB 5,212,301.40 unrecovered. On
December 6, 2018, Shenbao Rock Tea Company and Hangzhou Jufangyong Company applied for arbitration to
Shenzhen Court of International Arbitration (Shenzhen Arbitration Commission) for the above matters, and
requested Jiuxing Company to pay RMB 5,272,934.01 to Shenbao Rock Tea Company, and requested Yuxing
Company, Xingjiu Tea Company, Chen Yuxing and Chen Guopeng to assume joint liability.


On April 18, 2019, Shenzhen International Arbitration Court heard the arbitration case in court. Since relevant
matters are still to be determined and ascertained, the two parties concerned shall provide supplementary defense
materials to the court. Currently, the case has not ye been arbitrated by Shenzhen International Arbitration Court.


As of 30th June 2019, the accumulated bad debt provision accrual by the Company was RMB 3,458,370.94.


(3) Disputes on mung bean business between Shenzhen Cereals Group (SZCG) and Jilin Tongyu County Shengda
Company



In August 2007, Shenzhen Cereals Group and Tongyu County Shengda Grain and Oil Trading Co., Ltd.
(hereinafter referred to as Shengda Company) signed the “Mung Bean Entrusted Acquisition, Processing and
Storage Contract”, from October 2007 to May 2008, totally 4,918.00 tons of mung beans were acquired, the
Company paid payment for goods of RMB 30 million. According to the contract, after the completion of the
entrusted acquisition, Shengda Company has the obligations to assist in the sale of goods and buy-back. Shengda
Company did not fully fulfill its obligations, and Shenzhen Cereals Group also carried out various forms of
collection. In September 2010, Shenzhen Cereals Group sued Shengda Company for repayment of its arrears and
interest. The two parties reached an accommodation during the court trial, and Futian District People’s Court of
Shenzhen issued a “Paper of Civil Mediation”, but Shengda Company did not fully fulfill the repayment
obligation, Shenzhen Cereals Group has applied to the court for enforcement. As of 30th June 2019, the book
receivables amounted to RMB 5,602,468.81, and the execution of remaining funds has large uncertainties. The
Company has fully made provision for bad debts of RMB 5,602,468.81.

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(4) Contract disputes between Flour Company and Shenzhen Fujin Food Industry Co., Ltd.

On May 31, 2013, Shenzhen Fujin Food Industry Co., Ltd. (hereinafter referred to as Fujin Company) signed a
“Purchases and Sales Contract” with Flour Company, agreed that Flour Company would supply the moon cake
tailored flour and the tailored wheatmeal for cakes and pastries to Fujin Company. Later, Fujin Company sued
Flour Company, it said that the lipase (a processing aid) in the flour supplied by Flour Company to Fujin
Company was active, causing the “acid value” of the moon cakes and fillings made from it exceed the food safety
standards, which caused huge losses to Fujin Company, so it advocated that Flour Company should bear the
corresponding liability for compensation, and compensate for the property loss of Fujin Company of RMB
9,784,485.55; the litigation costs should be borne by Flour Company.



On November 29, 2014, the Nanshan District People’s Court of Shenzhen made the first-instance judgment ([2014]
SNFMYCZ No.45), and considered that Fujin Company failed to prove that its so-called problem product with too
high “acid value” was caused by the lipase activity of the flour supplied by Flour Company, it has not been proven
that the raw materials of the problem food were supplied by Flour Company; secondly, the relevant standards of
the Ministry of Health allow the addition of active lipase to the flour raw material, therefore, the court ruled that
all claims of Shenzhen Fujin Food Industry Co., Ltd. were rejected.

On June 5, 2015, the Shenzhen Intermediate People’s Court made a ruling ([2015] SZFMZZ No. 563),
considering that the court of first instance could not find out what standards should be applied to the quality of the
flour products involved in the case, nor could it found that the obligation to remove processing aids in flour should
be attributed to the flour supplier or the food producer. Therefore, the civil judgment [2014] SNFMYCZ No.45
was revoked and sent back to the Nanshan District People’s Court for retrial.



On December 21, 2017, People's Court of Nanshan District of Shenzhen made the first-instance judgment of
retrial which rejected all claims of Shenzhen Fujin Food Industry Co., Ltd.


On June 10, 2019, the Shenzhen Intermediate People's Court made the second-instance judgment (Civil Judgment
(2018) Yue 03 Min Zhong No. 7911), and the judgment rejected the appeal of Shenzhen Fujin Food Industry Co.,
Ltd. and upheld the original judgment.



(5) Contract disputes among Shenzhen Cereals Group, Hualian Grain and Oil, Guangzhou Jinhe Feed Co., Ltd.
and Huang Xianning Import Agent



From October 2005 to January 2007, Shenzhen Cereals Group, Hualian Grain and Oil, and Guangzhou Jinhe Feed
Co., Ltd. (hereinafter referred to as Guangzhou Jinhe Company) signed 20 “Import Agent Contracts”, agreed that
Shenzhen Cereals Group and Hualian Grain and Oil agent Guangzhou Jinhe Company to import Peruvian
                                                         220
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fishmeal. In August 2007, Hualian Grain and Oil, Guangzhou Jinhe Company and Huangxianning signed the
“Guarantee Contract”, agreed that Huangxianning would guarantee that all payables of Guangzhou Jinhe
Company under the trade contracts signed by Hualian Grain and Oil and Guangzhou Jinhe Company would be
paid on time. Later, due to Guangzhou Jinhe Company’s insufficient payment of goods and import agency fees,
Shenzhen Cereals Group and Hualian Grain and Oil filed a lawsuit to Futian District People’s Court of Shenzhen.



On February 16, 2015, the Futian District People’s Court of Shenzhen made the first-instance judgment ([2014]
SFFMECZ No. 786), and sentenced Guangzhou Jinhe Company to pay RMB 10,237,385.74 to Shenzhen Cereals
Group and Hualian Grain and Oil, and bear the case acceptance fee of RMB 83,224.00; Huang Xianning does not
need to bear the joint and several liability.



As Guangzhou Jinhe Company refused to accept the above first-instance judgment, it lodged an appeal to the
Shenzhen Intermediate People’s Court, claiming that the prosecution of Shenzhen Cereals Group and Hualian
Grain and Oil had exceeded the time limit for litigation. On March 30, 2017, the Shenzhen Intermediate People’s
Court made the second-instance judgment (Civil Judgment [2015] SZFSZZ No.1767), and the judgment rejected
Guangzhou Jinhe Company’s appeal and upheld the original judgment.



The case is still in enforcement, and the other party has not paid any money, Shenzhen Cereals Group has made
provision for bad debts in proportion to 100% of the accounts receivable of RMB 10,455,600 of Guangzhou Jinhe
Company.



According to the “Commitment Letter of Shenzhen Fude State-owned Capital Operation Co., Ltd. on the Pending
Litigation of Shenzhen Cereals Group Co., Ltd.”, If Shenzhen Cereals Group Co., Ltd. and its holding subsidiaries
suffer any claims, compensation, losses or expenses due to the contract disputes with Guangzhou Jinhe Feed Co.,
Ltd. and Huangxianning Import Agent, Shenzhen Fude State-owned Capital Operation Co., Ltd. will assume the
compensation or loss caused by the lawsuits.



(6) Contract disputes between Hualian Grain and Oil Company and Zhuhai Doumen Huabi Feed Factory



On December 9, 2004, Hualian Grain and Oil Company signed a purchases and sales contract with Zhuhai
Doumen Huabi Feed Factory to sell 2,000.00 tons of corn, with payment for goods of RMB 2,396,300, but the
payment has not been taken back. In April 2005, Hualian Grain and Oil Company discovered that Zhuhai Doumen
Huabi Feed Factory had basically stopped production and the goods were transferred, the legal representative,
Liang Dongxing, had fled. On July 2, 2005, the public security organ arrested Liang Dongxing. Hualian Company
has prosecuted him and won in the lawsuit, and the lawsuit has been settled and in enforcement.


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As of 30th June 2019, Hualian Grain and Oil Company had received RMB 2,396,300 from Zhuhai Doumen Huabi
Feed Factory, Hualian Grain and Oil Company had made 100% of bad debt provision for this amount.



(7) Contract disputes between Hualian Grain and Oil Company and Foshan Huaxing Feed Factory



In August and October 2007, Hualian Grain and Oil Company sold goods to Foshan City Shunde District Huaxing
Feed Factory, and received a total of RMB 2,958,600 of commercial acceptance bills. Due to the company’s
overdue payment, Hualian Grain and Oil Company filed a lawsuit with the People’s Court of Shunde District,
Foshan City on October 29, 2007, requesting Foshan City Shunde District Huaxing Feed Factory to repay the
payment for goods and pay the corresponding interests. From June to July 2011, totally took back the company’s
bankruptcy property settlement of RMB 1,638,900. As of 30th June 2019, Hualian Grain and Oil Company had
receivables of RMB 1,319,700 from Foshan City Shunde District Huaxing Feed Factory, and it had made 100% of
bad debt provision for this amount.



(8) Contract disputes on the international sales transactions of soybeans between Shenzhen Cereals Group and
Noble Resources Pte. Ltd

On March 3, 2004, Shenzhen Cereals Group and Noble Resources Pte. Ltd. (hereinafter referred to as Noble
Company) signed a contract stipulating that Shenzhen Cereals Group Co., Ltd. would purchase 55,000 tons of
Argentine or Brazilian soybeans from Noble Company under CFR conditions.


On May 10, 2004, the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ) issued
a notice that a shipload of Brazilian soybeans exported to Xiamen, China by Noble Company in April 2004 was
found to be mixed with seed-coating soybeans, thus Noble Company was suspended to export Brazilian soybeans
to China.



On June 25, 2004, after the cargo ship arrived in Qingdao Port, the cargo was inspected by Qingdao Commodity
Inspection and Quarantine Bureau who found the cargo contained seed-coating soybeans, and the cargo was
sealed up according to law.



On July 22, 2004, the two parties signed a supplementary agreement on the above-mentioned soybean sales
contract, stipulating that the demurrage incurred as the cargo could not be unloaded due to seed-coating soybeans
shall be borne by Noble Company, and agreed that the disputes under the contract shall be governed by Chinese
courts according to Chinese law.



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In July 2004, Noble Company submitted the case to the Hong Kong International Arbitration Center for
arbitration, requesting Shenzhen Cereals Group Co., Ltd. to undertake cargo ship detainment, Hong Kong
demurrage, loss contingencies, and so on, totaling seven claims. Shenzhen Cereals Group Co., Ltd. filed a
jurisdictional objection, the Hong Kong International Arbitration Center ruled on December 14, 2006 that two
claims have the right of jurisdiction, i.e. demurrage of Noble ship in Hong Kong and loss contingencies, other
claims were rejected.



The Hong Kong International Arbitration Center ruled on 17 Feb. 2011 that: the demurrage of $ 2,173,000.00
should be paid by Shenzhen Cereals Group, and the interest counted by annual interest rate of 5.00% since 4th
June 2004. In July 2011, Noble Company applied to Shenzhen Intermediate People’s Court for enforcement of the
ruling. On 30 March 2015, a civil order ([2017] Shen Zhong Fa Min Chu Zi No. 270) was made by Shenzhen
Intermediate People’s Court, ruling that the demurrage charges arising from the failure of normal unloading of the
goods involved shall be borne by Nobel Company as stipulated in the Supplementary Agreement of the Soybean
Sales Contract signed by both parties, the disputes under the contractual agreements shall be settled by Chinese
Laws and shall be under the jurisdiction of Chinese courts. The Hong Kong International Arbitration Center has
no jurisdiction over this case, than the application for execution of Nobel Company was rejected.


On February 6, 2018, Noble Company applied to the Hong Kong High Court for enforcement of the Hong Kong
International Arbitration Center's ruling on February 17, 2011. On February 18, 2019, the Hong Kong High Court
ruled that the enforcement time limit for the application of Noble Company has been lost. On September 3, 2014,
Noble Company submitted the “Application for Further Claims Arbitration” to the Hong Kong International
Arbitration Center, requesting Shenzhen Cereals Group Co., Ltd. to pay Noble Company US$7.45 million in
compensation for the freighter’s lessor - Bunge Limited, and the corresponding litigation and arbitration fee.
However, Noble Company had never applied for litigation matters such as court hearings. On November 1, 2016,
the arbitrator of Hong Kong International Arbitration Center wrote to Noble Company, requesting it to initiate the
arbitration at the end of 2016, otherwise, the arbitral tribunal will take measures to close the case, but so far, Noble
Company has not initiated the arbitration.

The application for arbitration of the second part of the ruling of Hong Kong International Arbitration Center
made by Noble Company in the mainland has been rejected, the application for enforcement in Hong Kong was
ruled that the time limit of application for arbitration has been exceeded. Related procedures of the third part of
the arbitration has not been initiated in accordance with the requirements of the arbitral tribunal, therefore, it can
be presumed that the case has been closed.


According to the “Commitment Letter of Shenzhen Fude State-owned Capital Operation Co., Ltd. on the Pending
Litigation of Shenzhen Cereals Group Co., Ltd.”, If Shenzhen Cereals Group Co., Ltd. and its holding subsidiaries
suffer any claims, compensation, losses or expenses due to the contract dispute of international sale of soybean
with Noble Resources Co., Ltd., Shenzhen Fude State-owned Capital Operation Co., Ltd. will assume the
compensation or loss caused by the lawsuit.
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(9) Contract disputes between Shenzhen Cereals Group and Beijing Zhongwang Food Co., Ltd.



On August 22, 2007, Beijing Zhongwang Food Co., Ltd. defaulted on the payment for goods of RMB
1,911,200.00 to Shenzhen Cereals Group. Beijing Zhongwang Food Co., Ltd. was in bankruptcy proceedings,
Shenzhen Cereals Group has reported claims and interests of RMB 2,473,400 to the bankruptcy administrator, and
the confirmed ordinary creditor’s rights are RMB 2,128,300. It is estimated that the bankruptcy property
repayment amount is about RMB 50,000 at most.


On April 22, 2018, Shenzhen Cereals Group received a bankruptcy liquidation of RMB 37,313.42, and up to 30th
June 2019, the bad debt provision for residual claims are accrual by Shenzhen Cereals Group in total as RMB
1,873,886.58.



2. Contingency arising from the provision of external debt guarantee and their impacts on financial
The guarantee for related parties found more in the Note XII. Related party and related transaction
Ended as 30th June 2019, the Company has no guarantees provided for non-related parties



3. Except for the above mentioned contingency, up to 30th June 2019, the Company has no other major
contingency that should be disclosed



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

The Company has no important contingency that need to disclose.


3. Other

XV. Events after balance sheet date

1. Important non adjustment matters

                                                                                                                         RMB/CNY

                                                                    Impact on financial status and Reasons of fails to estimate the
               Item                           Content
                                                                           operation results                    impact


2. Profit distribution

                                                                                                                         RMB/CNY




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3. Sales return

4. Other events after balance sheet date

Up to the date of the financial report released, the Company has no other events after balance sheet date need to released


XVI. Other important events

1. Previous accounting errors collection

(1)Retrospective restatement

                                                                                                                             RMB/CNY

                                                                       Items impact during vary
              Content                   Treatment procedure                                                Accumulated impact
                                                                            comparative period


(2)Prospective application


                   Content                                Approval procedure                               Reasons


2. Debt restructuring

3. Assets exchange

(1) Exchange of non-monetary assets

(2)Other assets exchange

4. Pension plan

According to the “Enterprise Annuity Scheme of Shenzhen Cereals Group Co., Ltd.” and the employees’
application, the Company pays the enterprise annuity for the employees who meet the conditions for participation
according to the proportion agreed by the Confirmation for Enterprise Payment Ratio of the Enterprise Annuity of
Shenzhen Cereals Group Co., Ltd., the payment base is based on the total salary of the previous year, and the
maximum payment rate is not more than 8.33%.




5. Discontinuing operation

                                                                                                                             RMB/CNY

                                                                                                                        Profit of
                                                                                  Income tax
       Item             Revenue            Expenses          Total profit                           Net profit        discontinuing
                                                                                   expenses
                                                                                                                        operation

                                                                 225
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                                                                                                                       attributable to
                                                                                                                      owners of parent
                                                                                                                             company

Other explanation


6. Segment

(1) Recognition basis and accounting policy for reportable segment

(2) Financial information for reportable segment

                                                                                                                               RMB/CNY

                 Item                                                     Offset between segment                     Total


(3) The Company has no segment, or unable to disclose total assets and liability of the segment, explain
reasons

(4) Other explanation

7. Other major transaction and events makes influence on investor’s decision

8. Other

XVII. Principle notes of financial statements of parent company


1. Account receivable

(1)Category

                                                                                                                               RMB/CNY

                                           Ending balance                                          Opening balance

                          Book balance       Bad debt provision                   Book balance        Bad debt provision
      Category                                                        Book
                                                         Accrual                                                Accrual Book value
                        Amount     Ratio      Amount                  value    Amount      Ratio     Amount
                                                            ratio                                                 ratio

Account receivable
with bad debt           28,453.0              28,453.0
                                    0.60%                100.00%          0.00 28,453.08    0.07% 28,453.08 100.00%                    0.00
provision accrual on          8                      8
a single basis

Including:

Account receivable
                        28,453.0              28,453.0
with single minor                   0.60%                100.00%          0.00 28,453.08    0.07% 28,453.08 100.00%                    0.00
                              8                      8
amount but with bad

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debts provision
accrued on a single
basis

Account receivable
with bad debt           4,720,50                19,717.6              4,700,782 42,869,95                 428,835.0              42,441,119.
                                     100.00%                  0.42%                              99.93%                  1.00%
provision accrual on        0.44                      1                     .83        4.13                      6                       07
portfolio

Including:
                                                                                  42,869,95
                        4,582,52                19,717.6              4,562,810                           428,835.0              42,441,119.
Age portfolio                         97.08%                  0.42%                    4.13      99.93%                  1.00%
                            8.24                      1                     .63                                  6                       07


Related party and       137,972.                                      137,972.2
                                       2.92%
petty cash                     20                                             0
                        4,748,95                48,170.6
                                                                      4,700,782 42,898,40                 457,288.1              42,441,119.
Total                       3.52 100.00%              9       1.01%                             100.00%                  1.07%
                                                                            .83        7.21                      4                       07


Bad debt provision accrual on single basis:
                                                                                                                                  RMB/CNY

                                                                            Ending balance
            Name
                                    Book balance             Bad debt provision               Accrual ratio             Accrual causes
Bad debt provision accrual on portfolio: 48,170.69 Yuan
                                                                                                                                  RMB/CNY

                                                                              Ending balance
               Name
                                              Book balance                   Bad debt provision                       Accrual ratio

Aging analysis                                        4,582,528.24                              19,717.61                             0.43%

Related party and petty cash                               137,972.20                                 0.00                            0.00%
Account receivable with single
minor amount but with bad
                                                            28,453.08                           28,453.08
debts provision accrued on a                                                                                                          100%
single basis


                                                      4,748,953.52                              48,170.69
Total                                                                                                                      --


Explanation on portfolio determines:
Bad debt provision accrual on portfolio:
                                                                                                                                  RMB/CNY

                                                                              Ending balance
               Name
                                              Book balance                   Bad debt provision                       Accrual ratio

Explanation on portfolio determines:
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If the provision for bad debts of account receivable is made in accordance with the general model of expected credit losses, please refer
to the disclosure of other account receivable to disclose related information about bad-debt provisions:


□ Applicable √Not applicable
By account age
                                                                                                                              RMB/CNY

                            Account age                                                       Ending balance

Within one year(one year included)                                                                                          4,712,012.82

Within one year(one year included)                                                                                          4,712,012.82

1-2 years                                                                                                                       1,383.22

2-3 years                                                                                                                       3,117.40

Over 3 years                                                                                                                   32440.08

   3-4 years                                                                                                                    3,987.00

Over 5 years                                                                                                                  28,453.08
                                                                                                                            4,748,953.52
Total



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

Bad debt provision accrual in the period:
                                                                                                                              RMB/CNY

                                                               Amount changed in the period
        Category          Opening balance                                                                           Ending balance
                                                    Accrual         Collected or reversal       Written-off
                                                                              409,117.45
Age portfolio                    428,835.06                                                                                   19,717.61


Other account
receivable with
single minor amount                                                                                                           28,453.08
                                  28,453.08
but with bad debt
provision accrual on
single basis



                                                                              409,117.45                                      48,170.69
Total                            457,288.14


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

                    Enterprise                         Amount collected or reversal                        Collection way



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(3) Account receivable actually written-off in the period

                                                                                                                             RMB/CNY

                                  Item                                                     Amount written-off

Including major account receivable written-off
                                                                                                                             RMB/CNY

                                                                                            Procedure of        Resulted by related
        Enterprise               Nature         Amount written-off   Written-off causes
                                                                                             written-off        transaction (Y/N)

Explanation on account receivable written-off


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

Total period-end balance of top five receivables by arrears party amounting to 4,542,912.44 Yuan, takes 95.66 percent of the total
account receivable at period-end, bad debt provision accrual correspondingly at year-end amounting as 45,951.02 Yuan.




(5) Account receivable derecognition due to financial assets transfer

(6) Assets and liabilities resulted by account receivable transfer and continues involvement

Other explanation:


2. Other account receivable

                                                                                                                             RMB/CNY

                     Item                                  Ending balance                             Opening balance

Other account receivable                                                 242,873,517.60                             159,677,969.59

Total                                                                    242,873,517.60                             159,677,969.59


(1) Interest receivable

1)Category
                                                                                                                             RMB/CNY

                     Item                                  Ending balance                             Opening balance

2) Important overdue interest

                                                                                                             Whether impairment
         Borrower                 Ending balance            Overdue time             Overdue causes        occurs and its judgment
                                                                                                                     basis

Other explanation:
3) Accrual of bad debt provision
□ Applicable √Not applicable
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(2) Dividend receivable

1) Category
                                                                                                                                       RMB/CNY

        Item (or invested enterprise)                           Ending balance                                 Opening balance

2)   Important dividend receivable with account age over one year
                                                                                                                                       RMB/CNY

                                                                                                                       Whether impairment
     Item (or invested                                                                      Reasons for not
                                  Ending balance                  Account age                                         occurs and its judgment
        enterprise)                                                                            collection
                                                                                                                               basis

3) Accrual of bad debt provision
□ Applicable √Not applicable
Other explanation:


(3) Other account receivable

1) By nature
                                                                                                                                       RMB/CNY

                      Nature                                 Ending book balance                             Opening book balance

Margin and deposit                                                                1,235,229.39                                     119,089.00

Export tax rebate                                                                  171,917.78                                      312,364.06

Intercourse funds and other                                                    264,704,763.86                                 182,280,569.20

Total                                                                           266,111,911.03                                182,712,022.26

2) Accrual of bad debt provision
                                                                                                                                       RMB/CNY

                                     Phase I                     Phase II                        Phase III

                                 Expected credit         Expected credit losses for     Expected credit losses for
     Bad debt provision                                                                                                        Total
                               losses over next 12      the entire duration (without    the entire duration (with
                                    months              credit impairment occurred) credit impairment occurred)

Balance on Jan. 1, 2019                   1,922.73                          75,499.40                22,956,630.54              23,034,052.67

Balance of Jan. 1, 2019
                                      ——                         ——                           ——                         ——
in the period

Current accrual                                                                                          204,763.49                204,763.49

Current reversal                               422.73                                                                                    422.73

Balance on Jun. 30, 2019                  1,500.00                          75,499.40                23,161,394.03              23,238,393.43

Change of book balance of loss provision with amount has major changes in the period
□ Applicable √Not applicable
By account age

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                                                                                                                             RMB/CNY

                              Account age                                                      Ending balance

Within one year(one year included)                                                                                    209,256,830.79

Within one year(one year included)                                                                                    209,256,830.79

1-2 years                                                                                                                  7,483,918.42

2-3 years                                                                                                               18,812,851.47

Over 3 years                                                                                                            30,558,310.35

   3-4 years                                                                                                               6,875,000.00

   4-5 years                                                                                                               6,218,962.15

   Over 5 years                                                                                                         17,464,348.20

Total                                                                                                                  266,111,911.03

3) Bad debt provision accrual, collected or reversal in the period
Bad debt provision accrual in the period:
                                                                                                                             RMB/CNY

                                                                     Amount changed in the period
          Category                Opening balance                                                                 Ending balance
                                                                 Accrual              Collected or reversal

Age portfolio                                 77,422.13                                               422.73                 76,999.40

Other account receivable
with single minor amount
but with bad debt                           5,641,249.52                                                                   5,641,249.52
provision accrual on
single basis

Other account receivable
with single major amount
and with bad debt                          17,315,381.02                204,763.49                                      17,520,144.51
provision accrual on
single basis

Total                                      23,034,052.67                204,763.49                    422.73            23,238,393.43

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

                     Enterprise                        Amount reversal or collected                       Collection way

4) Other account receivable actually written-off in the period
                                                                                                                             RMB/CNY

                                  Item                                                       Amount written-off

Including important other account receivable written-off
                                                                                                                             RMB/CNY

        Enterprise                Nature         Amount written-off     Written-off causes      Procedure of      Resulted by related

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                                                                                                       written-off         transaction (Y/N)

Explanation on other account receivable written-off
5) Top 5 other receivables at ending balance by arrears party
                                                                                                                                     RMB/CNY

                                                                                                 Ratio in total ending
                                                                                                                          Ending balance of
        Enterprise               Nature             Ending balance         Account age             balance of other
                                                                                                                           bad debt reserve
                                                                                                 account receivables

Huizhou Shenbao
                           Intercourse funds          112,351,493.44 Within one year                           42.22%
Technology Co., Ltd

Shenzhen Cereals
                           Intercourse funds           83,019,048.50 Within one year                           31.20%
Group Co., Ltd

Shenzhen Shenbao
Sanjing Food &
                           Intercourse funds           26,205,575.88 Over 5 years                                9.85%
Beverage
Development Co., Ltd

Changzhou Shenbao                                      19,988,710.83
                           Intercourse funds                           1-3 years                                 7.51%          17,520,144.50
Chacang Company

Shenzhen Shenbao
Technology Center          Intercourse funds           12,628,225.82 Over 5 years                                4.75%
Co., Ltd
                                                      254,193,054.47
Total                               --                                             --                          95.52%           17,520,144.50


6) Other account receivables related to government grants
                                                                                                                                     RMB/CNY

                                                                                                                      Time, amount and basis
           Enterprise             Government grants             Ending balance             Ending account age
                                                                                                                      for collection predicted

7) Other receivable for termination of confirmation due to the transfer of financial assets
8) The amount of assets and liabilities that are transferred other receivable and continued to be involved
Other explanation:


3. Long-term equity investment

                                                                                                                                     RMB/CNY

                                           Ending balance                                                Opening balance
        Item                                   Impairment                                                  Impairment
                         Book balance                            Book value             Book balance                            Book value
                                               provision                                                    provision

Investment for
                        4,208,728,337.66                       4,208,728,337.66 4,208,728,337.66                             4,208,728,337.66
subsidiary

Investment for             6,618,320.35         2,927,628.53      3,690,691.82            6,753,354.23       2,927,628.53        3,825,725.70

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associates and
joint venture

Total                4,215,346,658.01   2,927,628.53 4,212,419,029.48 4,215,481,691.89              2,927,628.53 4,212,554,063.36


(1) Investment for subsidiary

                                                                                                                         RMB/CNY

                                                                                                 Current accrual Ending balance of
                                                         Current
The invested entity Opening balance Current increased                      Ending balance         Impairment        impairment
                                                        decreased
                                                                                                   provision         provision

Shenbao Property         2,550,000.00                                         2,550,000.00

Shenbao Industrial
                         5,500,000.00                                         5,500,000.00
& Trading

Shenbao Sanjing         80,520,842.36                                        80,520,842.36

Shenbao
                       168,551,781.80                                       168,551,781.80
Huacheng

Huizhou Shenbao
                        60,000,000.00                                        60,000,000.00
Technology

Wuyuan Ju Fang
                       280,404,134.35                                       280,404,134.35
Yong

Hangzhou Ju Fang
                       176,906,952.42                                       176,906,952.42
Yong

Shenbao
                        54,676,764.11                                        54,676,764.11
Technology Center

Shenshenbao
                        50,000,000.00                                        50,000,000.00
Investment

Yunnan Supply
                        20,000,000.00                                        20,000,000.00
Chain

Pu’er Tea Trading
                        18,202,825.80                                        18,202,825.80
Center

SZCG                 3,291,415,036.82                                      3,291,415,036.82

Total                4,208,728,337.66                                      4,208,728,337.66


(2) Investment for associates and joint venture

                                                                                                                         RMB/CNY

investmen                                          Current changes (+,-)                                                  Ending
             Opening                                                                                            Ending
    t                           Capital Investme Other                                                                    balance
             balance Additiona                                    Other       Cash      Accrual
                                                                                                      Other    balance
company                 l      reduction nt gains comprehe        equity     dividend       of                              of

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                           investmen            recognize     nsive      change   or profit impairme                             impairme
                               t                 d under     income               announce        nt                                nt
                                                 equity     adjustmen                  d to    provision                         provision
                                                                t                     issued

I. Joint venture

II. Associated enterprise

Shenzhen
Shenbao
(Liaoyuan
                    0.00                                                                                                  0.00 57,628.53
)
Industrial
Company

Shenzhen
Shenbao
                                                                                                                                 2,870,000
(Xinmin)            0.00                                                                                                  0.00
                                                                                                                                         .00
Foods
Co., Ltd

Changzho
u
Shenbao
Chacang

Guangzho
u
Shenbao      3,825,725                          -135,033.                                                            3,690,691
                                                                                                                                      0.00
Mendao               .70                               88                                                                  .82
Tea Co.,
Ltd.

             3,825,725                          -135,033.                                                            3,690,691 2,927,628
Subtotal
                     .70                               88                                                                  .82           .53

             3,825,725                          -135,033.                                                            3,690,691 2,927,628
Total
                     .70                               88                                                                  .82           .53


(3) Other explanation

4. Operating income and operating cost

                                                                                                                                 RMB/CNY

                                                 Current Period                                            Last Period
             Item
                                       Income                         Cost                     Income                     Cost

Main business                           31,562,730.23                 29,829,293.00              67,228,720.81            63,731,294.22

Total                                   31,562,730.23                 29,829,293.00              67,228,720.81            63,731,294.22

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Whether implemented the new revenue standards
□Yes √No
Other explanation:


5. Investment income

                                                                                                                  RMB/CNY

                         Item                             Current Period                           Last Period

Long-term equity investment income
                                                                           -135,033.88                           -185,480.37
measured by equity

Income from financial products                                             1,567,648.80

Total                                                                      1,432,614.92                          -185,480.37


6. Other

XVIII. Supplementary information

1. Current non-recurring gains/losses

√ Applicable □Not applicable
                                                                                                                  RMB/CNY

                         Item                                Amount                                   Note

Gains/losses       from       the       disposal     of
                                                                              -4,184.59
non-current asset

Governmental grants calculated into current
gains and losses(while closely related with
the normal business of the Company,
                                                                           5,463,876.60
excluding          the      fixed-amount             or
fixed-proportion         governmental         subsidy
according to the unified national standard)

Profit and loss of assets delegation on others’
                                                                           3,627,466.27
investment or management

Except for the effective hedging business
related to the normal business of the
Company, the fair value changes from
holding      the   tradable     financial      assets,
derivative     financial      assets,        tradable                        28,381.21
financial liability and derivative financial
liability;   and investment income                 from
disposal     of    tradable     financial      assets,
derivative financial assets, tradable financial

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liability and other creditors investment

 Switch back of the impairment provision
for account receivable with impairment test                                       412,500.00
on single basis and contract assets

Other non-operating income and expense
                                                                                -3,619,767.49
other than the above mentioned ones

Less: Impact on income tax                                                        702,095.88

     Impact on minority interests                                                 232,425.56

Total                                                                           4,973,750.56                       --

Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √Not applicable


2. ROE and earnings per share


                                                                                                       Earnings per share
    Profits during report period                Weighted average ROE                                                    Diluted EPS
                                                                                       Basic EPS (Yuan/share)
                                                                                                                        (Yuan/share)

Net profits belong to common stock
                                                                               4.82%                     0.1763                    0.1763
stockholders of the Company

Net profits belong to common stock
stockholders of the Company after
                                                                               4.70%                     0.1720                    0.1720
deducting nonrecurring gains and
losses


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

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

√ Applicable □Not applicable
                                                                                                                                RMB/CNY

                                                    Net profit                                             Net assets

                                   Current Period                Last Period              Ending balance            Opening balance

Chinese GAAP                          203,168,850.61               202,779,343.34               4,260,480,115.67         4,172,502,535.11

Items and amount adjusted by IAS:

Adjustment for other
                                                                                                   1,067,000.00              1,067,000.00
payable fund of stock

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                                                             深圳市深粮控股股份有限公司 2019 年半年度报告全文


market regulation

IAS                              203,168,850.61    202,779,343.34      4,261,547,115.67      4,173,569,535.11


(2) Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)

□ Applicable √Not applicable


(3) Explanation on data differences under the accounting standards in and out of China; as for the
differences adjustment audited by foreign auditing institute, listed name of the institute

4. Other




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                                                                深圳市深粮控股股份有限公司 2019 年半年度报告全文




                   Section XI. Documents available for Reference

1. Text of financial statement with signature and seals of legal person, person in charge of accounting works and
person in charge of accounting institution;
2. Original and official copies of all documents which have been disclosed on Securities Times, China Securities
Journal, and Hong Kong Commercial Daily in the report period;
3. Original copies of 2019 Semi-Annual Report with signature of the Chairman.



                                                                      SHENZHEN CEREALS HOLDINGS CO.,LTD

                                                                                  Chairman: Zhu Junming

                                                                                  23rd August 2019




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