2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
Contents
Section I. Company Information and Key Financial Indicators ....................................................................... 7
Section II. Discussion and Analysis of Management of the Company .............................................................11
Section III Company Governance..............................................................................................................33
Section IV Financial Report .....................................................................................................................44
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
Section I. Company Information and Key Financial Indicators
I. Company Information
Stock abbreviation Rainbow Chemical Stock code 301035
Chinese name of the
山东潍坊润丰化工股份有限公司
Company
Chinese abbreviation of the
润丰股份
Company
Name of the Company in
SHANDONG WEIFANG RAINBOW CHEMICAL CO.,LTD
English (if any)
Abbreviation of the
RAINBOW CHEMICAL
Company in English (if any)
Legal representative of the
Wicky Wang
Company
Registered address No.03001 Lvjian Road, Binhai Economic Development Zone, Weifang City, Shandong Province
Postal code of registered
262737
address
Previous changes of
registered address of the N/A
Company
20th Floor, Building A3-4, Hanyu Financial Business Center, High-tech Zone, Jinan City,
Business address
Shandong Province
Postal code of business
250101
address
Company website www.rainbowagro.com
E-mail rfzqb@rainbowagro.com
II. Contact Person and Contact Information
Secretary of the board Securities affairs representative
Name Xing Bingpeng Hu Dongju
20th Floor, Building A3-4, Hanyu 20th Floor, Building A3-4, Hanyu
Contact address Financial Business Center, High-tech Financial Business Center, High-tech
Zone, Jinan City, Shandong Province Zone, Jinan City, Shandong Province
Tel 0531-83199916 0531-83199916
Fax 0531-83191676 0531-83191676
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
E-mail rfzqb@rainbowagro.com rfzqb@rainbowagro.com
III. Information Disclosure and Place of Report
Website of the stock exchange for release of the
Shenzhen Stock Exchange: http://www.szse.cn
Annual Report
Securities Times, China Securities Journal, Shanghai Securities News,
Name and website of the media for release of the
Securities Daily, Economic Information Daily, CNINFO
Annual Report
(www.cninfo.com.cn)
Place where the Annual Report is available for 20th Floor, Building A3-4, Hanyu Financial Business Center, High-tech
inspection Zone, Jinan City, Shandong Province
IV. Other Relevant Information
Accounting firm engaged by the Company
Name of the accounting firm Shangkuai Certified Public Accountants (Special General Partnership)
Business address of the
25th Floor, No. 755 Weihai Road, Jing'an District, Shanghai
accounting firm
Name of certified accountants Zhang Lifa, Yin Zuoyong
The sponsor institution engaged by the Company to perform continuous supervision during the reporting period
Name of the sponsor Business address of the Name of sponsor Duration of continuous
institution sponsor institution representative supervision
No. 6666 Shengtai Street, From July 28, 2021 to
Northeast Securities Co.,Ltd Wang Zhengang, Liu Junjie
Changchun December 31, 2024
V. Key Accounting Data and Financial Indicators
2021 2020 Year-on-year change 2019
Operating income (RMB) 9,797,107,551.38 7,289,831,535.13 34.39% 6,073,610,606.06
Net profit attributable to
shareholders of the Company 799,718,982.72 437,634,530.57 82.74% 339,337,470.60
(RMB)
Net profit attributable to
shareholders of the Company
798,010,406.55 438,276,863.19 82.08% 328,232,603.59
excluding non-recurring gains
and losses (RMB)
Net cash flow from operating
791,071,609.73 511,874,913.50 54.54% 746,615,721.97
activities (RMB)
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
Basic earnings per share
3.39 2.11 60.66% 1.64
(RMB/Share)
Diluted earnings per share
3.39 2.11 60.66% 1.64
(RMB/Share)
Weighted average return on net
21.22% 16.70% 4.52% 14.59%
assets
Total assets (RMB) 10,311,655,543.89 7,293,867,946.37 41.37% 5,279,992,205.95
Net assets attributable to
shareholders of the Company 4,908,724,302.71 2,801,888,242.99 75.19% 2,449,452,843.10
(RMB)
VI. Key Quarterly Financial Indicators
Unit: RMB
First quarter Second quarter Third quarter Fourth quarter
Operating income 1,811,987,233.25 2,202,080,867.86 2,744,280,268.65 3,038,759,181.62
Net profit attributable to
96,143,598.31 178,632,576.09 175,271,728.16 349,671,080.16
shareholders of the Company
Net profit attributable to
shareholders of the Company
83,683,638.61 182,597,527.74 177,336,755.37 354,392,484.83
excluding non-recurring gains
and losses (RMB)
Net cash flow from operating
-385,771,636.97 -82,685,717.16 769,941,347.68 489,587,616.18
activities
VII. Items and Amounts of Non-recurring Gains and Losses
Unit: RMB
Item Amount of 2021 Amount of 2020 Amount of 2019 Notes
Gain and loss on disposal of non-current
assets (including the write-off portion of -25,602,738.28 -14,803,882.23 -3,181,974.99
asset impairment provision)
Government subsidies included in current
gains and losses (closely related to normal
operational business of the Company,
15,234,035.09 24,934,631.23 18,344,984.45
excluding the continuous government
subsidies of certain amount or quota
complying with national policies)
Rollback of impairment provisions for
308,619.60 579,599.90
receivables that are separately tested for
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
impairment
Other non-operating revenue and
expenditure other than those mentioned 12,074,283.42 -10,200,580.06 -2,152,278.80
above
Less: affected amount of income tax 339,152.38 26,515.88 2,069,651.24
Affected amount of minority shareholders'
-33,528.72 545,985.68 415,812.31
equity (after tax)
Total 1,708,576.17 -642,332.62 11,104,867.01 --
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
Section II. Discussion and Analysis of Management of the Company
I. The situation of the industry during the reporting period
The Company is categorized into the industry of chemical pesticide manufacturing in chemical raw materials and chemical
manufacturing. Pesticides are also commonly known as crop protection products in the industry, which refer to products with a
broader scope, including non-chemical pesticides (such as bio-pesticides, and bio-stimulants). Pesticides are known as preparations
for the prevention and control of crop diseases and insect pests. Pesticide products actually used are pesticide preparations made from
pesticide active ingredients and pesticide formulations. The active compound takes effect, and it is also called active ingre dients or
active constitute. In addition, depending on the targets, the pesticides can also be categorized into herbicide, insecticide, fungicide,
plant growth regulator, etc.
(I) The development and trend of crop protection industry:
1. Structural growth opportunities still exist in the global crop protection market with rigid demands
From the global perspective, the crop protection industry is an existing market that has rigid demands and is steadily growing in
market shares. The demand for crop protection is closely related to the demands of humans for food and other crops. In recent years,
with the increase in the population of the world, and the continuous occurrence of pests and diseases, the scale of global crop
protection market is constantly expanding. According to the data of Phillips McDougall, a British market research company, the
global crop protection market scale increased from USD 35.575 billion to USD 67.629 billion, with annual compound growth rate of
5.07% from 2006 to 2019. It is not an industry featuring rapid growth in terms of the total growth rate, and it is also an in dustry that
lacks change or strong growth dynamic due to the limitation of the non-linear improvement of new compound development costs, but
it still has three clear structural growth opportunities: First, the continuous expansion of the market share of non-patented crop
protection products. Second, with the continuous expansion of non-patented crop protection market share, excellent multinational
generic companies grow rapidly (such as UPL in India). Third, with the promotion of different transgenic seeds and the resistance of
different active ingredients, the prohibition policy from the government has brought about the change of usage amount of different
active ingredients (such as glufosinate-ammonium and diquat gained rapid growth in the global market in the past few years).
2. Non-patented crop protection market shares and excellent multinational non-patented crop protection companies
grow fast
With the continuous expansion of the non-patented crop protection market shares, excellent multinational non-patented crop
protection companies have grown rapidly. The most eye-catching case in the industry in past few years is how Indian company UPL
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
rapidly strengthened itself and expanded its market share internationally by acquiring Arysta and other companies with strong
channel brands and constantly investing in the self-production of important out of patents active ingredients. Excellent multinational
generic crop protection companies with high growth rate must have the following five features:
(1) Fast response and decision-making mechanism (quick response to the rapid changes in the supply-end, cost-end and
market-end globally is needed);
(2) Light structure and low-expense rate (fierce homogeneous competition in non-patented crop protection markets will make
gross profit margin of the market channels constantly decline);
(3) Diversified and complete product portfolio for providing an integrated crop solution (not relying too much on a single ac tive
ingredient);
(4) The broad global market coverage and channel, and the construction of the brand (not relying too much on a single market,
and having a good brand channel);
(5) Be able to global power on a number of important active ingredients (advanced manufacturing on important active
ingredients to form the complete industrial chain from the factory to the farm, thus stabilizing the supply and cost advantage, and
supporting further expansion of the global market).
3. The global usage amount of different active ingredients changes rapidly
With the promotion of different transgenic seeds, the prohibition/ restriction policies of government, and the resistance of
different active ingredients, the usage amount is changing rapidly among different active ingredients.
(1) With the promotion of transgenic seeds, the growth rate of global use of dicamba, and glufosinate-ammonium, 2,4D was
significantly higher than that of other active ingredients in the past three years.
(2) The prohibition or restriction policies of the government have a great impact on the use of different active ingredients: For
example, the prohibition of paraquat in China, Brazil, Vietnam, Thailand and other markets has prompted significant increase of its
alternatives active ingredients such as glufosinate-ammonium and diquat; To give another example, the prohibition of chlorpyrifos in
Argentina, Vietnam, the EU, Myanmar, the United States and other markets directly has led to a significant decline in the global use
of chlorpyrifos, and promoted the rapid growth of other alternative active ingredients; Another example is the prohibition of
chlorothalonil in the EU directly has led to the serious excess of chlorothalonil production.
(3) The resistance changes of different active ingredients require the mixed use of several alternatives for the same target
diseases, insects and weeds: For example, countries such as Vietnam and Pakistan in South Asia have habitually used a single
insecticide frequently and intensively, resulting in the rapid rise of its insecticide resistance and the frequent changes of different
active ingredients; For another example, the fungicide resistance of Brazil to prevent soybean Asian rust changes rapidly, and it needs
to be used alternately or mixed among different active ingredients.
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
The rapid change in such different active ingredients enables manufacturers who are relying too much on a single active
ingredients to face significant opportunities or major crises.
4. The development of crop protection products market in different regions of the world is imbalanced, the growth rate is
different, and emerging markets are growing rapidly.
In the past five years, the growth rate of the crop protection products market in different regions of the world has been different,
and the growth rate in emerging markets is faster, which is represented as follows:
(1) The Latin American region continues to grow rapidly: Latin America has become an increasingly important source of
agricultural production and supply in the world. In the past five years, Latin America has sustained rapid growth, especially in Brazil.
(2) The growth rate in the Northern American market slows down: The market size of the United States and Canada is relatively
stable, and with the increase in the market share of non-patented crop protection products, competition has intensified;
(3) The Asia-Pacific market is growing steadily and slowly: In the region the growth rate of India and Indonesia is very obvious
and will continue to grow;
(4) The growth rate in Africa is accelerating: With the development of economy, countries in Africa increase investment in
agriculture, and the market scale of crop protection products grows rapidly;
(5) The growth rate in the Eastern European market is speeding up: The growth rate of Russia and Ukraine, in the region, is very
obvious, especially Russia, which has become the seventh largest crop protection product market in the world;
(6) The size of the EU market is stable and slightly decreased: The EU's policy of prohibiting and restricting more and more
active ingredients, and the high product registration and maintenance costs to meet regulatory requirements have made this market
less attractive due to the high risk of registration investment and high amortization cost of intangible assets, despite its high gross
profit margin. The market size in this region is stable and continues to decline slightly, but the market for bio-pesticide and
bio-stimulant will become a growth point.
5. The management regulations and policies of crop protection products in different countries worldwide are frequently
adjusted and increasingly strict
To enter the market of any country, crop protection products need to obtain a product registration certificate in that countr y in
accordance with relevant laws and regulations of that country. Obtaining a product registration in country A does not mean that it can
be sold in country B. That is, even the same product also needs to be sold in accordance with relevant laws and regulations of each
country, to obtain the product registration certificate in the target country. The manage ment regulations and policies for crop
protection products in various countries around the world are frequently adjusted and increasingly strict, mainly in the following
aspects:
(1) Changes in registration policies or approval fees have increased the registration costs of individual products in various
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
countries: For example, the adjustment of the registration policy of the imported product of India in 2017, has made the registration
fee of a single imported technical products directly rise from 20,000 USD to around 400,000 USD to 800,000 USD now. In China,
with the implementation of the new pesticide management regulations issued in 2017, the registration cost of a single technic al
products of the old active ingredients has increased from about RMB 200,000 to about RMB 5 million now.
(2) Registration policies are being adjusted towards high standardization and complication, making registration more difficult:
Even countries with very loose requirements are increasingly changing from accepting public data to requesting GLP reports. The
types of reports requested are more and more complex, which increases the types of data requested for the registration of a s ingle
product, improves the standard, and increases the preparation time of data, and some of the data is extremely difficult to prepare
professionally.
(3) The efficiency of approval by the governments in various countries has dropped sharply with the spread of the pandemic:
The government departments in many countries have even stopped accepting any new applications due to the effect of the pandemic.
For example, in Argentina, SENASA has stopped approving the registration and application of any active compound products sinc e
mid-2020, making the time for new appovals generally longer and slower in most countries. Many countries, such as Argentina,
Bangladesh, Malaysia, and Algeria, have even introduced policies to limit the number of new approvals or new submissions per
applicant per year.
(4) The registration process in those major crop protection markets generally takes a longer time: The process takes longer in the
world's major crop protection markets such as Brazil, Argentina, Mexico, Russia, India, China, the EU and etc. In Brazil, it generally
takes 5-8 years; In Russia, India, and the EU, it generally takes 4-6 years; In Argentina, Mexico, and China, it generally takes 3-5
years.
The above-mentioned changes in industry regulations and policies are very beneficial to those companies who already have:
registration team with registration skills KNOW-HOW in various markets around the world; have efficient decision-making and well
organized mechanisms; and already have a large number of registrations in various markets around the world.
(II) 2021 global crop protection market environment
1. The overall demand for crop protection products in the global market is strong
The food security concerns and the demand for bio-fuel recovery resulting from the on-going global COVID-19 pandemic and
the weather-related agricultural supply problems, have boosted the global demand for bulk agricultural products which prices are
expected to remain high. The high price of bulk agricultural products will bring growers to expand the planting area and increase the
input of agricultural inputs, and the global demand for crop protection products will generally increase.
2. The global supply chain and smooth logistics are facing unprecedented challenges
Due to the continuous spread of the pandemic overseas, the detention of goods in many countries has caused port congestion,
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
resulting in the lack of sufficient transportation resources in the global trade market, and the shipping cost has soared to a
record-breaking high level. In addition, many destination ports still can not deliver smoothly as scheduled for not being able to obtain
shipping space.
3. The cost of raw materials and the market price of active ingredients fluctuate frequently
(1) The overall cost is relatively stable from January to March in 2021;
(2) From April to mid-September 2021, with the rise in the cost of many chemical raw materials, the market prices of most
products continued to rise;
(3) From mid-September to mid-November 2021, due to the "double control of energy consumption", the prices of most
products soared, breaking through historical highs, and the domestic crop protection industry defaulted on a large scale;
(4) After mid-November 2021, most products started to fall from historical highs because of the recovery in the resumption of
work and production;
In 2021, the market price of most active ingredients fluctuated by more than 60%, and the rises and falls of prices were changed
frequently and quickly, which brought great challenges to stabilizing operations and avoiding risks.
4. The crop protection industry is in an industry boom cycle, and the overall performance is good
In 2021, the crop protection industry showed strong market demands and tight supply throughout the year. The prices of most
products exceeded historical highs, showing a unilateral upward trend. Benefiting from this, the profit margins of companies in the
industry have generally increased, especially glyphosate and glufosinate-ammonium, the profit margins of which have soared
significantly. The overall performance of companies in the industry is better than the historical average.
II. The Main Business of the Company During the Reporting Period
Rainbow has always focused on the in-depth cultivation in the field of crop protection globally, and is committed "To be a
Global Leading Crop Protection Company" is the Company's vision. As a mu ltinational crop protection company established in
China, the Company is actively promoting the realization of "From Made in China to Globalization of Chinese Brands".
The Company's main products include comprehensive product portfolios of five categories, i.e herbicides, insecticides,
fungicides, plant growth regulators and seed treatments.
With the presence worldwide, The Company has four manufacturing bases respectively in Wei Fang, Qingdao (Shandong
Province, China), P ingluo (Ningxia Province, China) and Argentina in South America.. It has established more than 60 subsidiaries
overseas, and has carried out business in more than 80 countries and regions around the world, thus improving the global marketing
network actively and constantly.
Rainbow has built a complete industrial chain covering the R&D and manufacturing of pesticide active ingredients and
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
formulations, as well as brands, channels, sales and services targeting the global market. Relying on the self-production capacity,
strong domestic supply chain and global marketing network, Rainbow is characterized by "Light structure, Fast response", and builds
an international professional team with the values of "Open and Inclusive, Together We Work, Together We Win", originating from
China and serving the world.
As a multinational crop protection company established in China, Rainbow has always been leading in the export of crop
protection products in China. In the rating organized by CAC(the Organizing Committee of China International Agrochemical &
Crop Protection Exhibition), the Company has ranked number one in the "Top 20 Chinese Pesticide Exporters" for six consecutive
years. According to the TOP20 list of global agrochemical companies released by Agropages, the Company ranked 11th in the
industry in 2020.
III. Analysis of Core Competitiveness
1. Originating from China Serving the world---the unique business model to achieve “From Made in China
to Globalization of Chinese Brands”
In the early years after the Company's establishment, relying on the experience accumulated by the founding team in the crop
protection industry, it participated in the global pesticide industry chain as an active ingredients manufacturer and supplie r. It
achieved rapid growth and initial accumulation with the help of the rapid development of the global crop protection products market
and the wave of industrial transfer to emerging countries such as China.
With the changes in the global economic environment, the global crop protection industry is also undergoing changes.
Especially after the outbreak of the financial crisis in 2008, affected by the decline in overall market demand, the overcapacity
problem of domestic manufacturing industry was more and more prominent due to years of continuous low-level repeated production.
Many products were oversupplied and generated vicious price competition, which adversely affected the profitability of enterprises
in the industry. In response to the challenges brought about by changes in domestic and foreign economic and market environments,
the Company responded quickly. Since the second half of 2008, it began to explore and plan the optimization and upgrading of the
Company's sales model and development route. The Company has gradually formed a global marketing network with
“Team+P latform+Innovation” as the basic elements, combining the traditional export mode of crop protection products with the
overseas independent registration mode, and featuring a “Quick Market Access Platform”.
The core of the "Quick Market Access Platform” is to obtain the registration of a rich and complete product portfolio in each
target country and to adhere to the concept of open platform. The rich and complete product portfolio registration can provide
growers with integrated crop solutions, and the concept of open platform enables the Company to build its own local team based on
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
the target country platform, to carry out the B-C business model of its own brand. In addition, the Company adopts flexible way to
open the platform to other excellent partners to carry out B-B operation. Based on this open platform, the Company can rapidly
expand market share through multiple channels including the Company's self-built team and cooperation with industry partners.
In each target country, the Company adheres to the combination of the traditional export model of crop protection products and
the overseas self-registration model. The Company can flexibly adjust and switch between different market roles such as suppliers,
brand owners and service providers according to changes in market scenarios and product differences. Two models promote and
complement each other. The traditional export model provides a solid customer base and market awareness for business expansio n
under the overseas self-registration model. The abundant overseas self-registration not only greatly improves the Company's brand
awareness, but also can better meet customer needs with more various products and improve the intimacy with customers, which is
more conducive to the development of the Company's traditional export business.
At present, the Company's traditional export business model still accounts for a considerable proportion of revenue. In futur e,
with the continuous increase of the Company's overseas self-registration quantities and the continuous improvement of the
construction of the global marketing network characterized by “Quick Market Access Platform”, the proportion of revenue of the
overseas self-registration model and the proportion of B-C revenue of self-owned brands will be further increased. In addition, the
Company's profitability and capabilities to maintain sustainable and stable growth and operation will be significantly improved, so as
to achieve stable, sustainable and rapid growth in performance.
According to the mid-term strategic plan, the Company is speeding up and increasing the investment in overseas
self-registration to enrich the product portfolio in each target country, and starting the construction of a “Quick Market Access
Platform” in more target countries. In the meanwhile, the Company also adheres to the characteristics of “Light Structure, Fast
Response” to accelerate the development of its own brand B-C business in each target country. With its own strength and China's
strong supply chain, the Company is striving to achieve “From Made in China to Globalization of Chinese Brands”.
2. Clear and firmly implemented strategic plan
In 2019, based on the BLM model, with the participation of all core team members, the Company reached a consensus and
determined the mid-term strategic plan for 2020-2024 after in-depth and sufficient discussions. The mid-term strategic plan was
formulated based on the guidelines of “Persisting in doing the difficult but correct work; Moving towards the forefront of industrial
value chain; Building a complete industrial chain”.
After the mid-term strategic plan is completed, the Company organizes an annual review and update in the middle of each year
to ensure that the ten key tasks formulated around the plan keep pace with the times. Based on the mid-term strategic plan, the
Company formulates the annual business plan, annual department work plan and personal PBC. After decoding level by level, it
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
forms a strategic plan implementation map, summarizes, reviews and comments on the implementation every quar ter, and proposes
the next improvement plan to ensure that all staff focus on strategic planning and annual work plans, and work together to ac hieve
the goals.
3. A professional, committed and international core team
The Company has nurtured a stable operation team. For more than 20 years, the operation team led by founding shareholders,
Wicky Wang, Sun Guoqing, Cathy Chiu, Yuan Liangguo and Liu Yuanqiang, has focused on the sector of crop protection industry.
They have a profound expertise and rich hands-on experiences with insights into segmented markets and development trends
globally.
The Company's vision is “To be a Global Leading Crop Protection Company” and its mission is “All about Growing". The core
values of the Company are“Customer Oriented; Rapid Response; Constant Effort; Open and Inclusive; Together We Work; Together
We Win”. With the guidance of the vision, mission and core values, and by practicing them, the Company builds cultural identities
and unity of team members. Through continuously improving positions, salaries and benefits, performances and training systems, the
Company builds an international team to facilitate global business expansion.
To fully implement the core value of “Together We Win”, the Company has launched a restricted share incentive plan for
excellent core members of the operational team other than the founding shareholders in 2021. This will be an integral part of the
Company’s efforts in continuously improving positions, salaries and benefits, performances and training systems with an aim to build
a united international team who will pay collective efforts towards shared goals.
4. R& D and innovate support for advanced manufacturing
Since the financial crisis in 2008, under the influence of decreasing demands on the market and with aggravated
over-productivity due to continuous low-level repeated construction in China domestic manufacturing sector for years, the China
domestic market has seen excessive supplies of the crop protection products and vicious price competition which exerts negative
influences on the profits of the companies in the industry. In response to the challenges brought by the domestic& foreign economic
environment and changes in the market, the operation team determined to invest resources and focus on business expansion and
deepening of the global market between 2008 to 2019 after analysis and discussion, and built a global marketing network which
features as “Quick Market Access Platform”.
At this stage, matching with the strategic planning, the Company mostly concentrates its R&D and innovation resources on
development of differentiated formulations oriented by the pain points of the end market. So far, the Company has set up a R& D
team to facilitate rapid development of all different types formulations to satisfy the demand from clients around the world. The
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
development features as rapid, cost-effective, compliant with laws and regulations of varied countries and globally leading.
Since 2017, with the improvement of national security and environmental protection management requirements and law
enforcement, non-compliant and technological backward production capacity in the domestic crop protection manufacturing industry
has been cleared out. Large compliant active ingredients manufacturers have gotten into a favorable development and growth cycle
which is expected to last for quite a long time. During this cycle, more and more active ingredients producers are seeking
technological breakthroughs in automatic production, continuity, environmental protection and other aspects to meet the requirements
of laws& regulations and stable production. Once they achieve the breakthroughs, they can expand the production into larger s cale as
to dominate the global market in that product.
The Company has spotted this trend on the active ingredients manufacturing early, and thus shifted its resources of R&D to the
advanced manufacturing of active ingredients in 2019. To achieve large-scale production of active ingredients by utilizing globally
leading technologies, on basis of the network built in the course of the long-term international market expansion and the Company’s
international vision, the Company has actively gathered top experts from varied segmented domains and optimized the R&D work
flow. So far, the Company has set up an international R&D team with globally leading expertise and a science-based, rigorous,
efficient and systematic work flow. That has given strong support to the successful execution and stable operation of the act ive
ingredients synthesis program in the long-term planning.
According to the Company’s medium-term planning, the main measures and focus of the Company in R&D and innovation are
as follows:
（1）Select out of patent active ingredients for R&D and manufacturing investment. For those active ingredients, the company
will only choose those products which can: support the company with great significance for expanding global markets; have lar ge
volume to have scale effects; have fairly large room for technological improvement. And the Company will only invest on those
active ingredients which the company has global advanced technology and leading scale. So far, there are 7 such critical active
ingredients in the plan;
（2）Select important active ingredients which patents are about to be expired soon, and also have higher potential market
growth globally. For those active ingredients, The company is plan to be the first entrants after the patent is expired. So far, there are
3 such critical active ingredients in the plan;
（3）Research, develop and launch differentiated formulations to focus the solution on those important pain points for end users
around the globe. This type of market driven R&D have seen considerable success on many target markets. The Company has
summarized the methodology from the practice and paid full efforts in implementing the methodology.
5. Broadly covered global marketing network
The Company's business covers the world, with four manufacturing bases in Wei Fang, Qingdao (Shandong Province, China),
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
Pingluo (Ningxia Province, China) and Argentina in South America. The Company has set up over 60 subsidiaries overseas with its
businesses in over 80 countries. With strong global registration competence, the Company is expanding its global marketing ne twork
at high speed.
According to the Company’s medium-term strategic plan (updated in 2021), in terms of the construction of “Quick Market
Access Platform”, the Company will complete the construction of the platform in all major markets except the United States, Canada
and Japan by 2024. In addition, the Company will complete the construction of the platform in all major markets between 2025 and
2029 . In terms of running self-branded B-C business by setting up local teams, the Company will implement this plan in no less than
16 new target countries by the end of 2024.
6. Based on the complete industrial chain and deep understanding of the whole process, with the advantages
of "Light Structure, Fast Response ".
The Company has built a complete industrial chain involving research and development of active ingredients, manufacturing,
branding towards the global market, trading channels, sales and services from the factory to the farm. The Company also has a deep
understanding of the whole industrial chain and can also harvest from each value chain. By leveraging its own productivity, strong
supply chain in China and a global marketing network, the Company responds to changes on the supply side, cost side and globa l
market rapidly, which features as "Light Structure, Fast Response".
The global marketing network enables the Company to gain insights in the market dynamics and advert risks of blind
investment in R&D and manufacturing side.
The global vision, international professional team and its core values of "Open and Inclusive, Together We work, Together We
Win” also help the Company successfully integrate the upstream side and downstream side of the global industrial chain as well as to
grow rapidly in the capital market.
Ⅳ. Analysis on main businesses
1. Overview
Rainbow's present medium-term strategic plan（2020-2024) was drawn under the guiding principle of “Persisting in doing the
difficult but correct work; Moving towards the forefront of industrial value chain; Building a complete industrial chain ”. On basis of
this medium-term strategic plan, the Company will continue focusing on R&D and innovation-backed advanced manufacturing and
improving the global marketing network. Following is the summary of progresses made in these two aspects in this year.
I. R&D and innovation-backed advanced manufacturing
1. Team building: In 2021, the Company has recruited 49 new staff to the technology line, including 2 doctoral graduates and 2 9
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
master graduates, through recruitment campaigns at domestic universities and colleges and social recruitment. Meanwhile, with a
wide expertise network build through years in the international market and an international vision, the Company has actively
integrated top experts in segmented domains and further improved R&D processes. So far, the Company has preliminarily built an
international technology team with top expertise and a science-based, rigorous, effective and systematic work flow which provides
strong support o successful construction and stable operation of programs in the Company planning.
2. Project planning: Under the guidance of the Company’s medium-term strategic plan, by leveraging advantages in sharp
market sensitivity and full transparent industrial chain, the Company has selected systematic, rigorous and targeted products for
medium-term product planning. In terms of manufacturing active ingredients, there are 7 important out of patent active ingredients
and 3 important active ingredients which patents will be expired soon in the R&D chain. They are all handled by different project
teams in steady progress.
3. Progress of execution: In terms of manufacturing active ingredients, the Company has developed and optimized processing
technologies of manufacturing important active ingredients based on goals of automation, continuity and environmental protection to
make the processing more refined and green chemical technology. So far, a full auto and continuous process, green technology for
one active ingredient built in China, has been put into operation; One project has finished detailed design and is in progress; One
project has been in progress with key equipment under development, which is expected to complete and put into operation in 20 23.
The successful execution and stable operation of each project in the medium-term strategic planning will gradually improve the
whole industrial chain of Rainbow and provide strong support to the expansion of the global market.
（II）Improving the Global Marketing Network
1. Team building: The marketing and registration team has rapidly expanded through recruitment campaig ns at domestic
universities and colleges, social recruitment and local recruitment in different countries. Especially after enhancing recruitment of
local staff in foreign countries, the set-up and management of international teams has become more systemat ic and mature. With
more young staff joining the team, the Company has further enriched and optimized the marketing and registration training scheme
and serial training materials. It has successfully organized 4-month Training program for new staff recruited at universities and
colleges and an annual 1-week intelligence training camp for on-the-job staff, which achieved the goal of improving unity, sharing
lessons learned at work and educating methodologies of success.
2. Market expansion: With the pandemic raging abroad, the domestic market team has made efforts to expand outbound. While
deepening the business in existing target markets, the team has continuously expanded new market and accelerated construction of
the global marketing network.
(1) Completed new in-depth market surveys in Ethiopia, Sudan, Tanzania, Zimbabwe, Zambia, Cameroon, Uganda, Tunisia,
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
Egypt, Turkey, Serbia, Dominica, Jamaica, Uzbekistan, Angola, Togo, Benin and other markets;
(2) Newly Set up or to set up wholly-owned subsidiaries/offices or joint ventures in Turkey, Serbia, Dominica, Tunisia, Peru,
Ethiopia, Zambia, Uzbekistan, Thailand, Algeria, Japan, Togo, Benin and other markets;
(3) Started local branding and operation by Rainbow’s local teams in Cameroon, Uganda, Kenya, Zambia, Peru, Uzbekistan,
Thailand, and El Salvador;
(4) Started local branding by Rainbow’s authorized agents in Sudan, Ethiopia, Malawi, Serbia, Georgia, Kazakhstan, and
Ukraine.
3. Global registration: As the construction of the global marketing network accelerates, the Company also pays more efforts and
accelerates the global registration layout.
(1) Expanded the global registration team rapidly, from 69 team members in 2020 to 119 at present.
(2) Significantly increased investment in global registration, with a year-on-year increase of about RMB 50 million in global
registration fees (excluding purchase registration payments).
(3) Invest in purchase of registration: To accelerate registration and access to important markets, the Company has spent mor e
than USD 2 million in buying 23 Russian registrations and 15 Argentine registrations.
(4) Newly started the investment of registration in Turkey, Serbia, Bangladesh, C te d'Ivoire, Tanzania, Zimbabwe, Tunisia,
Sudan, Uzbekistan, Togo, Benin, Chile and other target countries. And also invested more resources in existing registered countries
and obtain more registrations, to enrich the product portfolio and meet demands in different countries.
(5) As of December 31st, 2021, the Company has 242 registration items in China and 4,007 registration items abroad.
The Company is accelerating the construction of global “Quick Market Access Platform” comprehensively and orderly
according to the mid-term strategic planning.
III. Analysis of the Company's Annual Operations
Each task has been implemented and completed according to the medium-term strategic plan and annual work plan, but looking
forward, there are still obvious gap in the Company capacity.
1. Throughout the year, the overall operation of the Company is in good condition. Each task has been implemented according
to the medium-term strategic plan and annual work plan. Both the progress and quality of each key task meet the expectation.
2. The operation team fully leverages the advantages of “Light Structure, Fast Response” to calmly embrace the major changes
in the market, effectively reduce and control operational risks to achieve good business performance.
3. The global marketing network has been built at higher speed than expected. Satisfactory progresses have been made in
deepening the market end and optimizing the business model.
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
4. There are gaps in capabilities when the Company expands its global map. The gaps mainly include: The capability of buildin g
business operational models based on understanding of target markets, target market midterm developmental plans and Local
operations; Suitable organization structure adjustment and global operation improvement under the circumstance that more
self-branded B-C subsidiaries have set up local operation in different countries (maintaining "Light Structure, Fast Response" while
expanding the Company); Capability of advanced manufacturing with the support of R&D and innovation (Especially on: Advanced
manufacturing on many important active ingredients with global power, R&D on important differentiated formulations based on
market pain points).
2. Composition of operating incomes
Overall operating incomes
Unit: RMB
2021 2020 Year-on-year
Proportion in Proportion in increase or
Amount Amount
operating incomes operating incomes decrease
Total operating
9,797,107,551.38 100% 7,289,831,535.13 100% 34.39%
incomes
By products
Major product-
7,992,792,442.48 81.58% 5,801,349,076.70 79.58% 37.52%
Herbicide
Major product-
864,351,261.74 8.82% 684,092,046.99 9.38% 26.35%
Insecticide
Major product-
670,578,706.58 6.84% 666,231,831.33 9.14% 0.65%
Fungicide
Major product-
152,871,668.80 1.56% 84,712,844.36 1.16% 80.46%
Other
Other Businesses 116,513,471.78 1.19% 53,445,735.75 0.73% 118.00%
By regions
Foreign 9,488,826,098.84 96.85% 7,189,266,438.52 98.62% 31.99%
Domestic 308,281,452.54 3.15% 100,565,096.61 1.38% 206.55%
3. Expenses
Unit: RMB
Year-on-year
2021 2020 Notes on significant changes
increase or
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
decrease
Mainly caused by dramatic increase in
Sales expenses 219,514,455.26 176,753,956.13 24.19%
registration costs during the reporting period
Mainly caused by increase in staff salaries
Management
293,698,852.81 214,627,201.55 36.84% and benefits, depreciation and amortization,
expenses
etc. during the reporting period
Mainly caused by exchange loss due to
Financial
95,665,159.54 230,924,229.99 -58.57% fluctuations of exchange rates during the
expenses
reporting period
R&D Mainly caused by investment in on-going
312,438,469.66 227,225,895.12 37.50%
expenditures projects and increase in labor costs
4. R&D Investment
R&D investment amount in recent 3 years and their proportion in operating income
2021 2020 2019
R&D investment amount
312,438,469.66 227,225,895.12 191,792,896.98
(RMB)
Proportion of R&D
investment amount in 3.19% 3.12% 3.16%
operating incomes
R&D expenditure
0.00 0.00 0.00
capitalization amount (RMB)
Proportion of R&D
capitalized expenditure
0.00% 0.00% 0.00%
amount in R&D investment
amount
Proportion of R&D
capitalized expenditure
0.00% 0.00% 0.00%
amount in net profits of the
current period
5. Cash flow
Unit: RMB
Year-on-year increase or
Item 2021 2020
decrease
Subtotal of cash inflow in
10,254,282,775.89 7,189,179,144.49 42.63%
business activities
Subtotal of cash outflow in 9,463,211,166.16 6,677,304,230.99 41.72%
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
business activities
Net cash flow from operating
791,071,609.73 511,874,913.50 54.54%
activities
Subtotal of cash inflow in
234,884,534.77 92,242,019.26 154.64%
investment activities
Subtotal of cash outflow in
814,615,446.56 322,218,044.37 152.81%
investment activities
Net cash flow in investment
-579,730,911.79 -229,976,025.11 -152.08%
activities
Subtotal of cash inflow in
2,653,844,231.90 1,588,905,171.50 67.02%
financing activities
Subtotal of cash outflow in
1,532,169,238.30 1,688,461,017.45 -9.26%
financing activities
Net cash flow from financing
1,121,674,993.60 -99,555,845.95 1,226.68%
activities
Net increase in cash and cash
1,312,659,341.39 136,373,800.75 862.55%
equivalents
1. Net cash flow in business activities increased by 54.54% compared with the previous year which mainly resulted from the increase
in payment collection of sales incomes during the reporting period;
2. Net cash flow in investment activities decreased by 152.08% compared with the previous year which mainly resulted from
increase in project construction and other capital expenses during the reporting period;
3. Net cash flow in financing activities increased by 1226.68% compared with the previous year which mainly resulted from the
increase in capitals due to Initial Public Offering during the reporting period;
4. Cash and cash equivalents increased by 862.55% compared with the previous year which mainly resulted from the increase in
capitals due to Initial Public Offering during the reporting period.
Ⅴ. Non-major Businesses
Unit: RMB
Proportion of total Whether it is
Amount Causes
profits sustainable
Mainly due to investment returns
Investment
224,428,785.59 22.68% gained from disposal of trading No
returns
financial assets
Profits and losses
Mainly due to changes in fair
of changes in fair -84,356,048.50 -8.53% No
values of trading financial assets
values
Mainly due to increase in
Asset Impairment -14,353,166.10 -1.45% impairment of fixed assets and No
on-going projects during the
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
reporting period
Non-operating Mainly due to incomes from
8,404,814.92 0.85% No
income scrapping non-current assets
Non-operating Mainly due to non-current assets
31,719,144.18 3.21% No
expenses scrap loss
Credit Mainly due to the accounts
-48,700,774.17 -4.92% No
impairment receivable credit impairment loss
Ⅵ. Analysis on Assets and Debts
1. Significant changes in asset composition
Unit: RMB
End of 2021 Beginning of 2021
Proporti Proporti Increase/De
on in on in crease in Notes on significant changes
Amount Amount
total total proportion
assets assets
Caused by increase in raised
Monetary
3,724,744,059.71 36.12% 2,414,448,915.08 33.08% 3.04% funds through IPO during the
funds
reporting period
Accounts
2,328,358,879.35 22.58% 2,143,568,272.92 29.37% -6.79%
receivable
Contracted
0.00% 0.00% 0.00%
assets
Caused by increase in
inventory and goods delivered
Inventory 1,775,113,092.67 17.21% 1,009,026,739.04 13.83% 3.38%
at the end of the reporting
period
Investment real
0.00% 0.00% 0.00%
estate
Long-term
equity 1,810,538.69 0.02% 1,826,018.32 0.03% -0.01%
investment
Mainly caused by transfer in
completion projects of
Fixed assets 1,218,635,770.03 11.82% 924,361,253.46 12.67% -0.85%
construction in progress
during the reporting period
Construction in Mainly caused by increase in
281,855,456.95 2.73% 200,820,098.24 2.75% -0.02%
progress investment of new and
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
expanded construction
projects during the reporting
period
Mainly caused by
implementing new accounting
Assets with
18,876,699.07 0.18% 4,497,555.03 0.06% 0.12% treatment based on new lease
rights of use
regulations during the
reporting period
Short-term
550,348,417.31 5.34% 650,352,593.02 8.91% -3.57%
loan
Mainly caused by increase in
Contract customer payments accepted
45,096,633.96 0.44% 27,611,393.11 0.38% 0.06%
liability in advance during the
reporting period
Mainly caused by decrease in
Long-term
25,555,537.87 0.25% 48,946,980.76 0.67% -0.42% mortgage during the reporting
loan
period
Mainly caused by
implementing new accounting
Lease liability 13,312,230.04 0.13% 3,637,546.30 0.05% 0.08% treatment based on new lease
regulations during the
reporting period
2. Assets and liabilities measured in fair value
√ Applicable □ Not applicable
Unit: RMB
Change Impai
s in rment
Changes of accum accru
Purchase
gain or loss ulative ed Sales amount Othe
amount
Opening in fair values fair durin during the r Ending
Item during the
balance during the values g the reporting chan Balance
reporting
reporting that are report period ges
period
period counte ing
d into perio
equity d
Financial assets
1. Trading
financial 200,000,000 200,000,000.
assets .00 00
(derivative
27
2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
financial
assets
excluded)
2.
Derivative 133,278,332. -84,356,048. 3,722,771,2 4,009,677,730. 48,922,283.5
financial 00 50 30.00 00 0
assets
The above 133,278,332. -84,356,048. 3,922,771,2 4,009,677,730. 248,922,283.
total 00 50 30.00 00 50
Financial
0.00 0.00
debts
VII Vision of Future Development
(I) Rainbow ’s present medium-term strategic plan（2020-2024) was drawn under the guiding principle of “Persisting in doing
the difficult but correct work; Moving towards the forefront of industrial value chain; Building a complete industrial chain ”. On
basis of this medium-term strategic plan, the Company will continue focusing on R&D-backed advanced manufacturing and
improving the global marketing network. Work progresses the Company has made in these two aspects in 2021 have been described
in detailed in the section of analysis on major businesses above, which will not be repeated here. The implementation plan of the
Company's mid-term strategic plan and the important work in 2022 about these two aspects are summarized as follows:
1. Firmly implement the medium-term strategic plan
In terms of R&D-backed advanced manufacturing, the Company plans to complete advanced manufacturing of 7 important out
of patent active ingredients towards the goals of automation, continuity and environmental protection during the medium-term
strategic planning stage (by the end of 2024). For the three important active ingredients whose patent period is about to expire,
preparation is carried out actively to achieve advanced manufacturing successfully during 2025-2029.
In terms of improving the global marketing network, the Company plans to complete the construction of “Quick Market Access
Platform” in all major markets except the United States, Canada and Japan during the medium-term strategic planning stage (by the
end of 2024) and will complete the construction of “Quick Market Access Platform” in all major markets on the globe between 2025
and 2029.
2. Important work for the year of 2022
(1) To intensify the training of team leaders' capabilities and values, enforce the qualification standards for team leaders to take
office, take serious measures for the publicity and practice of core values, and guarantee that team leaders want to "fight", be able to
"fight" and win the "fight".
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
(2) To actively promote process change projects within the Company in collaboration with management consulting companies,
build a complete set of excellent end-to-end process operation system and management system in line with Rainbow's business to
guarantee the execution of processes change projects.
(3) To closely keep up with the pace of global market expansion, and adjust the matching global operation management
structure in due course, particularly do well in risk control under global operation.
(4) To successfully enforce the established advanced manufacturing project of important active ingredients on schedule.
(5) To finish the enforcement of the registration plan in each target country..
(6) To continuously enrich and perfect the Company's brand business guidelines, and actively expand the Company's brand
business in more markets by implementing flexible business model.
(7) To continuously enhance the automation and informatization of the whole process of orders, reduce staff and boost efficiency,
and guarantee the high quality and delivery of orders as scheduled.
3. Industry outlook for the year of 2022
(1) The global market as a whole will still be in great demand for crop protection-related products: As the global COVID-19
epidemic has not yet been effectively controlled and the regional conflicts also broke out, the food security concerns arising
therefrom will boost the global demand for bulk agricultural products, and the prices of bulk agricultural products are expected to
remain at a high level. The high price of bulk agricultural products will bring growers to expand the planting area and incre ase the
input of agricultural inputs, and the global demand for crop protection products will generally increase.
(2) The global supply of crop protection-related products is generally stable and sufficient, and the supply exceeds demand in
some products: Since the epidemic situation in China is well controlled, the new production capacity of a large number of active
ingredients is released, and the influence of the dual-control policy of energy consumption is lowered. The overall supply tension,
which continued until November 2021, improved comprehensively, with an increasing number of active ingredients beginning to
show oversupply conditions, and also caused the prices of most active ingredients to fall from historic highs after mid-November
2021.
(3) The overall performance of China's crop protection industry will take on a trend of high to low: Despite that the prices of
most active ingredients began to fall from the historic highs after mid-November 2021, the prices of most products remained at the
historic highs until March, 2022. The overall performance of the industry will fall along with the gradual decline of most products,
and it is highly likely that the overall performance of China's industry of crop protection-related products in the first half of the year
will be significantly better than in the second half of the year.
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
II. Potential Risks the Company may Face
1. Risks from environmental protection
The Company is categorized into the sub-industry of manufacturing of chemical pesticides under the manufacturing of chemical
raw materials and chemical products. Waste water, waste gas and waste residue will be produced during production and operation,
which requires comparatively high environmental protection. Along with the full enforcement of the national strategy for sustainable
development, the environmental protection policy has become increasingly strict, and the goal of environmental pollution
management has been increasingly raised. The Company will further intensify its investment in environmental protection, insis t on
source control, launch digital transformation of production, and endeavor to control environmental protection risks within a
reasonable range.
Counter-measures: The Company will strictly comply with the requirements of relevant laws and regulations on environmental
protection to fulfill the corresponding examination and approval procedures on environmental protection, enhance relevant pollution
treatment facilities, cut down pollutant emissions to a further extent, and guarantee that the Company's operations conform t o
relevant environmental requirements. Apart from that, the Company will increase the research on green technology, apply cleaner
production to practice, and continuously decrease the generated waste and pollutants by use of clean energy, technologies and
equipment with high resource utilization rate and low pollutant discharge, as well as comprehensive utilization technology of waste
and harmless treatment technology of pollutants.
2. Risks from safety production
Some raw materials, semi-finished products and finished products of the Company are flammable, explosive, corrosive or toxic
substances, and the production process is made up of high-temperature and high-pressure processes, raising relatively high
requirements for equipment security and appropriateness of manual operation. There exist the risks of accidents and security
incidents as a result of imperfect equipment and technology, improper storage and operation of goods. The Company has been
devoted to enhancing the process routes all along, increasing the degree of automation control in the process of production,
reinforcing management and raising the security awareness of employees.
Counter-measures: The Company will continue to launch special rectification actions for safety production, perfect the double
prevention mechanism, increase investment in the management of safety production, reinforce the maintenance of security equipment
and facilities, enhance on-site management and security education and training for employees, build and perfect a variety of security
management systems, and control and prevent accidents in an effective manner.
3. Risks of policy changes in major importing countries of pesticides
The Company principally sells its products to the international market, and the exporters in the reporting period principally
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
cover Argentina, Brazil, Australia, the United States, Thailand, and the like. Since the requirements for environmental prote ction in
various countries have become increasingly stringent, the major importers of pesticides on a global sc ale may take increasingly
stringent control measures for the import and use of pesticide products, including raising the standards for product registra tion and
restricting the import of highly toxic and residual pesticide active ingredients, and the like. As a major exporter of pesticide products
in the world, China's trade protection measures such as anti-dumping investigation against China's exported pesticide products will
also be adopted from time to time, leaving a certain adverse influence on the export of domestic manufacturers of pesticides.
Counter-measures: The Company will carry out more information collection and analysis of foreign markets, and actively keep
track of the policy trends of relevant countries and markets. Apart from that, the Company will continuously raise the level of
technology and process, expedite the construction of “Quick Market Access Platform”, actively probe into the commercial operation
mode of brands and channels on the basis of the platform, exploit the global market to a further extent, and low and disperse the risks
of relevant policy changes as well.
4. Risks of overseas independent registered investment in pesticide products
Since the second half of 2008, the Company has begun to study and plan the improvement and upgrading of the Company's
sales model and development route, gradually building a sales model integrating the traditional export model of pesticide pro ducts
with the overseas independent registration model of pesticide products. By the end of this reporting period, the Company was in
possession of more than 4000 overseas registration certificates for pesticide products. To register crop protection products
independently in various countries, a lot of investment is needed in product research and development, product experiment,
registration, etc. However, resulting from various uncertain factors such as economic environment and market demand, the Company
find it unable to guarantee that all investment in the registration of overseas crop protection products can attain the expected results in
a short period of time.
Counter-measures: In light of the medium-and long-term strategic plan, the Company will launch profound research in the target
country, learn about crops, diseases, pests and terminal medication habits, dig deep into the pain points of the market, and work out a
targeted product registration plan in the target country, including the best-selling products in the target country, the improved and
differentiated new preparations of registered crops, and the like. After the product registration plan is prepared, the team of the target
country will decode the key tasks level by level to guarantee that the important value in the important market is accurately registered
and first acquired, and plan the market entry strategy six months ahead of the registering expected acquisition time to fulfill
commercialization.
5. Risk of exchange rate fluctuations
The Company's export sales revenue of products makes up a large proportion of the primary business revenue in the
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
corresponding period, and the payment for export sales of products is mostly priced and settled in USD. Thus, the change of
exchange rate will leave a certain influence on the Company's profit by changing the Company's product price. Besides, change s in
exchange rate will also exert a certain influence on the value of foreign currency assets held by the Company. Thanks to the expanded
scale of the Company's overseas market development, the export sales revenue will increase to a further degree. If the exchange rate
fluctuates greatly in future, it will impose a certain influence on the Company's performance. The Company will intensify the
Company's research on the policies for international trade and exchange rate. At the same time, it will also strengt hen the research on
the rules of foreign exchange fluctuations, timely carry out foreign exchange forward settlement business, and lock in exchange rate
fluctuations.
Counter-measures: The Company will put a high premium on the control of exchange rate ris ks, and hedge and evade exchange
rate risks by various means while guaranteeing security and liquidity. For the risk exposure of exchange rates, the Company w ill
actively make use of financial hedging instruments, for example hedging, and reasonably contro l the risks without taking speculation
as the purpose.
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
Section III Company Governance
I. Information of directors, supervisors and senior manage ment
1 Basic information
Number of Number
Number of Number
Number of shares of shares Other
shares held of shares Reasons for
Restricted increased reduced in increases
Ter m start Ter mination at the held at the increase or
Name P osition Status Gender Age Shares II in the the or
date date beginning of end of the decrease of
granted current current decreases
the period period shares
(shares) period period (shares)
(shares) (shares)
(shares) (shares)
Wednesday,
Wicky Currently September
Chairman Male 51 September 7, 0 0 0 0 0 0 N/A
Wang in office 8, 2019
2022
Wednesday,
Sun Currently September
Director Male 50 September 7, 0 0 0 0 0 0 N/A
Guoqing in office 8, 2019
2022
Director and Wednesday,
Cathy Currently September
Vice Female 53 September 7, 0 0 0 0 0 0 N/A
Chiu in office 8, 2019
P resident 2022
Wednesday,
Deputy Currently September
Li Xueshi Male 65 September 7, 0 0 0 0 0 0 N/A
Chairman in office 8, 2019
2022
Director and Wednesday,
Yuan Currently September
Vice Male 51 September 7, 0 0 0 0 0 0 N/A
Liangguo in office 8, 2019
P resident 2022
Director and Wednesday,
Liu Currently September
Vice Male 51 September 7, 0 0 0 0 0 0 N/A
Yuanqiang in office 8, 2019
P resident 2022
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
Wednesday,
Huang Independent Currently September
Male 54 September 7, 0 0 0 0 0 0 N/A
Fangliang director in office 8, 2019
2022
Wednesday,
Meng Independent Currently September
Male 49 September 7, 0 0 0 0 0 0 N/A
Qingqiang director in office 8, 2019
2022
Wednesday,
Niu Independent Currently September
Male 50 September 7, 0 0 0 0 0 0 N/A
Hongjun director in office 8, 2019
2022
Chairman of Wednesday,
Sun Currently September
the Board of Male 68 September 7, 0 0 0 0 0 0 N/A
Jianguo in office 8, 2019
Supervisors 2022
Friday, Wednesday,
Hou Currently
Supervisor Male 47 October 8, September 7, 0 0 0 0 0 0 N/A
Juzhen in office
2021 2022
Wednesday, Wednesday,
Currently
Cai Huan Supervisor Female 39 September September 7, 0 0 0 0 0 0 N/A
in office
22, 2021 2022
The equity
Monday, Friday, incentive
Wang
Supervisor Off-office Female 42 June 15, October 8, 0 92,500 0 0 0 0 plan grants
Yucui
2020 2021 Restricted
Shares II
The equity
Wednesday, incentive
September
Li Zhiqing Supervisor Off-office Male 42 September 0 95,700 0 0 0 0 plan grants
8, 2019
22, 2021 Restricted
Shares II
34
2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
The equity
Wednesday, incentive
Currently September
Shen Jie CEO Female 47 September 7, 0 199,600 0 0 0 0 plan grants
in office 8, 2019
2022 Restricted
Shares II
The equity
CFO and
Wednesday, incentive
Xing Secretary of Currently September
Male 41 September 7, 0 168,900 0 0 0 0 plan grants
Bingpeng the Board of in office 8, 2019
2022 Restricted
Directors
Shares II
Total -- -- -- -- -- -- 0 556,700 0 0 0 0 --
2. Employment status
Professional background, chief work experience and chief responsibilities of current directors, supervisors and senior
management in the Company
(1) Members of the Board of Directors
Wicky Wang: Male, Chinese nationality, born in 1971, without permanent right of abode overseas, bachelor's degree, graduated
from the major of Fine Chemical Engineering, East China University of Science and Technology. From 1994 to 2000: served as
Director, Assistant General Manager and General Manager of Shandong LVYE Workshop; From 2001 to 2007: served as the
Chairman of Shandong Rainbow; In 2005: founded the Company and took responsibility for overseas market development as one of
the chief founders of the Company; Currently the Chairman of the Company.
Sun Guoqing: Male, Chinese nationality, born in 1972, without permanent right of abode overseas, bachelor's degree, graduated
from the major of Organic Chemical Engineering, East China University of Science and Technology, and a senior engineer. From
1995 to 2000: served as Project Manager of R&D Department, Deputy Manager of Production Department and Manager of Technical
Department of Shandong LVYE; From 2001 to 2007: served as the Director and General Manager of Shandong Rain bow; In 2005,
founded the Company as one of the chief founders of the Company and served as the chairman; currently a director of the Compa ny.
Cathy Chiu: Female, Chinese nationality, born in 1969, without permanent right of abode overseas, bachelor's degree, graduated
from the major of Fine Chemical Engineering, East China University of Science and Technology, and an engineer. From 1993 to
35
2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
1998: served as the Supervisor and Deputy Manager of Shandong LVYE Additives Co., Ltd.; From 1998 to 2001: served as Manager
of Shandong LVYE Department; From 2001 to 2005: served as the Director and Deputy General Manager of Shandong Rainbow; In
2005: founded the Company as one of the chief founders and served as Deputy General Manager; Currently the Director and Vice
President of the Company.
Li Xueshi: Male, Chinese nationality, born in 1957, without permanent right of abode overseas, Senior Economist, MBA from
School of Management, University at Buffalo(The State University of New York), graduated from the major of Management
Engineering, China University of Petroleum with a bachelor's degree. From 1987 to 1989: serviced as a lecturer of East China
Petroleum Institute; From 1989 to 1999: served as the Chairman of Shandong LVYE; From 2000 to 2006: served as the Vice
President of Beijing Lianjin Investment Co., Ltd.; In 2007: joined the Company and served as a Director; Currently the Vice
Chairman of the Company.
Yuan Liangguo: male, Chinese nationality, born in 1971, without permanent right of abode overseas, MBA of Beijing Jiaotong
University, engineer, graduated from the major of Applied Chemistry, Shanghai Jiao Tong University with a bachelor's degree. From
1997 to 2000: director of Shandong LVYE Workshop; From 2001 to 2007: served as the Director and Deputy General Manager of
Shandong Rainbow; In 2005: joined the Company and served as Deputy General Manager; Currently Director and Vice President of
the Company.
Liu Yuanqiang: Male, Chinese nationality, born in 1971, without permanent right of abode overseas, bachelor's degree,
graduated from Shandong University in major of Chemistry, and an engineer From 1994 to 2001: the Manager of Quality
Supervision Department of Shandong LVYE; From 2001 to 2007: served as the Director and Deputy General Manager of Shandong
Rainbow Chemical Co., Ltd.; In 2005: joined the Company and served as Deputy General Manager; Currently the Director and Vice
President of the Company.
Huang Fangliang: Male, Chinese nationality, born in 1968, without permanent right of abode overseas, Ph.D. in Econ omics,
Fudan University. From 1991 to 1999: served as a teacher of Foreign Languages Department of Shandong Polytechnic University;
From 1997 to 2007, served as Senior Project Manager, Assistant General Manager and Executive Director of investment bank
headquarters of Tiantong Securities Co., Ltd.; From 2006 to 2012: served as an Associate Professor at the School of Finance,
Shandong University of Finance and Economics; Since 2012: remained a professor at School of Finance, Shandong University of
Finance and Economics, Director of Capital Management Institute, and an independent Director of the Company.
Meng Qingqiang: Male, Chinese nationality, born in 1973, without permanent right of abode overseas, bachelor's degree,
graduated from Shandong University with major in law. From 2001 to 2002: served as an intern lawyer of Shandong Dongjian Law
Firm; From 2002 to 2004: served as a lawyer of Shandong Anbaihe Law Firm; From 2004 to 2011: served as a lawyer and partner of
36
2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
Shandong Kangqiao Law Firm; Since 2012: re mained a senior partner of Beijing Deheng (Jinan) Law Offices and an independent
Director of the Company.
Niu Hongjun: Male, Chinese nationality, born in 1972, without permanent right of abode overseas, Ph.D. in Management from
Renmin University of China, Tutor of master students. From 1995 to 2005: a lecturer at the School of Economics and Management,
Shijiazhuang Tiedao University; From 2005 to 2008: studied for a doctorate in Management at the Business School of Renmin
University of China; Since 2008: remained a lecturer at the Business School of Beijing Technology and Business University and an
independent Director of the Company.
(2) Members of the Board of Supervisors
Sun Jianguo: Male, Chinese nationality, born in 1954, without permanent right of abode overseas, Master of Management,
University of Science and Technology of China, senior economist. From 1981 to 1985: served as Deputy Secretary of the Youth
League Committee of Lixia District, Jinan; From 1985 to 1987: served as Minister of Propaganda Department of Lixia District
Committee of Jinan; From 1987 to 1996: served as Deputy Head of Lixia District People's Government of Jinan; From 1996 to 1998:
served as Deputy Director of Construction Committee of Jinan City; From 1998 to 2005: served as Chairman and General Manager
of Shandong Shengli Co., Ltd.; In 2005: joined the Company and served as a Director; Currently the Chairman of the Board of
Supervisors of the Company.
Cai Huan: Female, Han, born on November 18, 1983, Chinese nationality, with no right of abode overseas. In July, 2001:
Graduated from Shandong College of Electronic Technology with a college degree. In 2005: joined the Company and served as the
Purchaser of Shandong Weifang Rainbow Chemical CO., Ltd.; Currently the Supervisor of the Co mpany.
Hou Juzhen, male, Han, born on February 17, 1975, Chinese nationality, with no right of abode overseas. In July, 1997:
graduated from Shandong University of Finance and Economics with a college degree. From September 1997 to November 2000:
served as the Cashier of Shandong Vicome Greenland Chemical Co., Ltd.; From December, 2000 to July, 2007: served as the
Financial Manager of Shandong Rainbow Chemical Co., Ltd.; Since October 2005: Remained a Supervisor of Shandong Rainbow
Chemical Co., Ltd; Since July, 2019: remained Executive Director of Shandong Shuimu Qinghua Ecological Technology Co., Ltd.
Currently a Supervisor of the Company.
(3) Senior management
Shen Jie: Female, Chinese nationality, born in 1975, without permanent right of abode overseas, bachelor's degree, graduated
from the major of International Enterprise Management, Qingdao University, international business engineer, human resource
manager. From 1997 to 1999: served as an outreach member of Shandong Council for the Promotion of International Trade; From
1999 to 2001: served as Assistant to the Marketing Director of Dong-E-E-Jiao Group; from 2001 to 2003: served as the Office
37
2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
Director of SD. EMEDCHINA CN; From 2003 to 2007: served as Manager of Human Resource Department of Rainbow and D eputy
General Manager; In 2005: joined the Company and served as Deputy General Manager; Currently the CEO of the Company.
Cathy Chiu: Refer to the introduction to directors.
Yuan Liangguo: Refer to the introduction to directors.
Liu Yuanqiang: Refer to the introduction to directors.
Xing Bingpeng: Male, Chinese nationality, born in 1981, without permanent right of abode overseas, bachelor's degree,
graduated from the major of Financial Management, Shandong University of Finance and Economics, and a senior accountant; From
2004 to 2005: worked as a Cashier of Shandong Tongji Technology Development Co., Ltd.; From 2005 to 2007: served as the Chief
Accountant and Deputy Manager of the Finance Department of Shandong Runbo; In 2007: joined the Company and successively
served as Deputy Manager and Manager of the Finance Department. Currently the CFO and Secretary of the Board of Directors of
the Company.
3. Remuneration of directors, supervisors and senior management
Decision-making procedures, basis for determination and actual payment of remuneration of directors, supervisors and senior
executives
Decision-making procedures: the remuneration of the Company's directors and supervisors shall be decided by the Board of
Shareholders, and the remuneration of senior executives shall be decided by the Board of Directors; The remuneration of the
directors, supervisors and senior executives who work in the Company shall be paid by the Company, and the directors and
supervisors shall not pay any allowance separately.
Basis for determination: in accordance with the relevant national laws and regulations as well as the provisions of the Articles of
Association and in consideration of the income level of the industry and region and the Company's profit level, the remuneration
shall be comprehensively subject to the performance of duties and annual performance assessments of directors, supervisors and
senior executives.
Actual payment: the gross remuneration of directors, supervisors and senior executives of the Company for the year of 2021 was
RMB 9.7377 million
Remuneration of directors, supervisors and senior management of the Company during the reporting period
Unit: RMB ten thousand
Get
Total pre-tax
remuneration
remuneration
Name Position Gender Age Status from related
received from
parties of the
the Company
Company or
38
2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
not
Currently in
Wicky Wang Chairman Male 51 213.05 No
office
Currently in
Sun Guoqing Director Male 50 0 Yes
office
Director and Currently in
Cathy Chiu Female 53 117.11 No
Vice President office
Deputy Currently in
Li Xueshi Male 65 0 Yes
Chairman office
Director and Currently in
Yuan Liangguo Male 51 113.2 No
Vice President office
Director and Currently in
Liu Yuanqiang Male 51 104.12 No
Vice President office
Huang Independent Currently in
Male 54 10 No
Fangliang director office
Meng Independent Currently in
Male 49 10 No
Qingqiang director office
Independent Currently in
Niu Hongjun Male 50 10 No
director office
Chairman of
Currently in
Sun Jianguo the Board of Male 68 0 Yes
office
Supervisors
Former
Li Zhiqing Male 42 Off-office 87.31 No
supervisor
Former
Wang Yucui Female 42 Off-office 64.17 No
supervisor
Currently in
Cai Huan Supervisor Female 39 15.11 No
office
Currently in
Hou Juzhen Supervisor Male 47 0 No
office
Currently in
Shen Jie CEO Female 47 133.05 No
office
CFO and
Secretary of the Currently in
Xing Bingpeng Male 41 96.65 No
Board of office
Directors
Total -- -- -- -- 973.77 --
39
2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
II. Employees of the Company
1. Number of employees, professional composition and education level
Number of on-the-job employees in the parent company at the
1,663
end of the reporting period (persons)
Number of on-the-job employees of major subsidiaries at the
1,541
end of the reporting period (persons)
Total number of on-the-job employees at the end of the
3,204
reporting period (persons)
Total number of employees receiving salary in the current
3,204
period (persons)
Number of retired employees (people) borne by the parent
1
company and its major subsidiaries
Professional composition
Category of professional composition Number of people of professional composition (persons)
Production personnel 1,866
Sales personnel 496
Technical personnel 387
Financial personnel 84
Administrative personnel 160
Integrated management personnel 211
Total 3,204
Education
Education Category Quantity (persons)
Doctor 4
Master 221
Undergraduate 991
Junior college 660
Below junior college 1,328
Total 3,204
III. The Company's profit distribution and conversion of capital reserve fund into share
capital
Preparation, enforcement or adjustment of profit distribution policy, particularly the policy for cash dividend within the reporting
period
√ Applicable □ Not applicable
40
2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
On August 24, 2021, the Company held the 22nd meeting of the third Board of Directors, which deliberated and approved the
Proposal on the Profit Distribution P lan for the Half Year of 2021. The Company intends to distribute cash dividend of RMB 5. 40
(tax inclusive) for every 10 shares to all shareholders premised on the total share capital of 276,180,000 shares, with total cash
dividend of RMB 149,137,200.00 distributed. On September 10, 2021, the Company held the fourth extraordinary general meeting of
shareholders of 2021, deliberated and approved the Proposal on the Profit Distribution Plan for the Half Year of 2021. On September
13, 2021, the Announcement on the Company's Profit Distribution P lan for the Half Year of 2021 was published on the information
disclosure website designated by China Securities Regulatory Commission. This distribution of interests was completed on
September 17, 2021.
Special notes about the policy for cash dividend
Whether it is in line with the requirements of the Articles of
Yes
Association or the resolutions of the Board of Shareholders:
Whether the dividend standard and proportion are clear: Yes
Whether relevant decision-making procedures and mechanisms
Yes
are complete:
Whether the independent directors fulfill their duties
Yes
responsibly and play their due roles;
Whether the minority shareholders are provided with the
opportunity to fully voice their opinions and demands, and
Yes
whether their legitimate rights and interests have been fully
protected:
Whether the conditions and procedures are compliant and
transparent if the policy for cash dividend is adjusted or Not applicable
changed:
Within the reporting period, the Company's profit distribution plan and plan for conversion of capital reserve into share capital are
tally with the Company's Articles of Association and management measures for dividend.
√ Yes □ No □ Not applicable
The Company's profit distribution plan and the plan of conversion of capital reserve into share capital within the reporting period are
in conformity with relevant provisions of the Company's Articles of Association.
Profit distribution and conversion of capital reserve into share capital in current year
Bonus shares per 10 shares (shares) 0
Dividends per 10 shares (RMB) (tax-inclusive) 8.33
Transferred shares per 10 shares (shares) 0
Share capital base of the distribution plan
276,180,000.00
(shares)
Cash dividend amount (RMB) (tax-inclusive) 230,057,940.00
Amount of cash dividends in other ways (such 0.00
41
2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
as share repurchase) (RMB)
Total cash dividends (including other ways)
230,057,940.00
(RMB)
Distributable profit (RMB) 1,348,003,539.08
Proportion of total cash dividends (including
100.00%
other ways) in total distributable profit
Details of the cash dividends distribution
If the development phase of the Company is in the growth phase and there exist material capital expenditure arrangements, when
making profit distribution, the proportion of cash dividends in this profit distribution shall be at least 20%
Details of the plan for profit distribution or capital reserve converted into share capital
Based on the total share capital of the registration date when the profit distribution plan is implemented, a cash dividend of RMB
8.33 (tax inclusive) is distributed to all shareholders for every 10 shares, and the remaining undistributed profits is carried
forward to the next year. Except for the above-mentioned cash dividend distribution, no share dividend is distributed this time,
and there is no conversion of capital reserve into share capital.
IV. Imple mentation of the Company's equity incentive plan, e mployee stock ownership plan
or other employee incentive measures
√ Applicable □ Not applicable
1. Equity incentives
On October 14, 2021, the Company held the 25th meeting of the third Board of Directors, deliberated and approved the Proposal
on the Company's Incentive Plan (Draft) for Restricted Shares (2021) and Its Abstract, the Proposal on Measures for the
Administration of Implementation Assessment of the Company's Incentive Plan for Restricted Shares (2021), as well as other
proposals. As the Company revised partial relevant contents in the original draft incentive plan, on October 20, 2021, the Company
held the 26th meeting of the third Board of Directors of the Company, which deliberated and approved the Proposal on the
Company's Incentive Plan (Revised Draft) for Restricted Shares (2021) and Its Abstract, the Proposal on Measures for the
Administration of Implementation Assessment of the Company's Incentive Plan for Restricted Shares (2021) (Revised Draft), as well
as other proposals. On November 1, 2021, the Company held the 7th extraordinary shareholders' meeting of 2021, which deliberated
and approved the Proposal on the Company's Incentive Plan (Revised Draft) for Restricted Shares (2021) and Its Abstract, the
Proposal on Measures for the Administration of Implementation Assessment of the Company's Incentive Plan for Restricted Shares
(2021) (Revised Draft), and the Proposal on Requesting the Shareholders' Meeting to Authorize the Board of Directors to Handle
Matters Associated with Equity Incentives, as well as other proposals.
42
2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
On November 3, 2021, the Company held the 28th meeting of the third Board of Directors, deliberated and approved the
Proposal on Granting Restricted Shares to Incentive Objects for the First Time, consenting to grant 4.9319 million Restricted Shares
II to 153 eligible incentive objects at the price of RMB 25.06/share on November 3, 2021 as the first grant date.
Within the reporting period, the reserved part of the above-mentioned equity incentive plan has not been enforced yet for the
time being.
Equity incentives granted to directors and senior management during the reporting period
√ Applicable □ Not applicable
Unit: Share
Number of
Number of Number of
Market price at newly granted Grant price of
Restricted Restricted
the end of the Restricted Restricted
Name Position Shares II held Shares II held
reporting period Shares II within Shares II (RMB
at the beginning at the end of the
(RMB/share) the reporting per share)
of the period period
period
Shen Jie CEO 58.00 0 199,600 25.06 199,600
Secretary of the
Xing Bingpeng 58.00 0 168,900 25.06 168,900
board, CFO
Total -- -- 0 368,500 -- 368,500
In the reporting period, the Company implements the share incentive plan and grants
Note (if any)
Restricted Shares II to senior management.
Assessment mechanism and incentives granted for senior management
The number of the restricted shares actually attributed to an incentive object in current year is linked to his or her performance
assessment in the last year, and the attributable percentage is determined according to the result of individual performance assessment
of the incentive object:
Assessment result (X) X ≥ 80 points 60 points ＜ X ＜ X ≤ 60 points
80 points
Attributable percentage on an individual 100% 80% 0%
basis (Y)
If the Company’s performance does not meet the performance assessment target, the proposed restricted shares attributable to
incentive objects of the current period will become invalid.
If the Company’s performance meets the performance assessment target, the actual restricted shares attributed to incentive
objects of the current period = the number of proposed shares attributable to an incentive object of the current period × the
Company’s attributable percentage × the incentive object’s attributable percentage.
The proposed restricted shares attributable to an incentive object of the current period will become invalid and cannot carried
forward over subsequent years, if they are not attributed or attributed completely for any assessment related reason.
If it is difficult to achieve the intended incentive purpose by continuing the incentive plan after the Company/its shares are changed
along with economic developments or market tendencies, with the approval from the board of directors and/or the general meeting of
43
2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
the Company, an decision may be made to cancel the attribution of a tranche/tranches of restricted shares that have not been
attributed yet under the incentive plan or terminate the incentive plan.
During the reporting period, the evaluation and incentive of the above share incentive plan have not been implemented.
Section IV. Financial Report
I. Audit Report
Type of Audit Opinions Standard unqualified opinion
Signing Date of the Audit Report Tuesday, March 29, 2022
Shangkuai Certified Public Accountants (Special General
Name of the Audit Institution
Partnership)
Audit Report Reference No. SKSBZ (2022) No. 2146
Name of CPAs Zhang Lifa, Yin Zuoyong
Text of Audit Report
Audit Report
SKSBZ (2022) No. 2146
To all shareholders of Shandong Weifang Rainbow Chemical Co., Ltd.,
I. Audit opinions
We have audited the attached financial statements of Shandong Weifang Rainbow Chemical Co., Ltd. (hereinafter referred to as
“Rainbow”), including the consolidated and company balance sheet as of December 31, 2021, consolidated and company income
statements, consolidated and company cash flow statements, consolidated and company statements of changes in owner’s equity a nd
relevant notes to financial statements of 2021.
In our opinion, the attached financial statements are prepared, in all material respects, in accordance with Accounting Standards
for Business Enterprises, and give a fair view of the consolidated and financial position of Rainbow as of December 31, 2021 and its
consolidated operating results and cash flow of 2021.
II. Basis of Opinions
We implemented audit in accordance with stipulations of the Auditing Standards for Chinese Certified Public Accountants. Our
responsibilities under those standards are further explained in the part of "CPA's Responsibilities for the Audit of the Financial
44
2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
Statements" of this audit report. In accordance with the Code of Ethics for Certified Public Accountants in China, we are independent
of Rainbow and fulfill our other ethical responsibilities. We believe that the audit evidences which we have acquired are sufficient
and appropriate, which offer basis for the provision of audit opinions.
III. Key Matters to be Audited
Key matters to be audited are those that we, in our professional judgment, consider to be the most important for the audit of the
financial statements for the current period. These matters shall be addressed in the context of audit of the overall financia l statements
and formation of audit opinion, and we will not express an opinion on these matters separately. Key audit matte rs we have identified
in our audit include:
1. Income recognition
(1) Matter description
Rainbow is devoted into the research, development, production and sales of plant friendly products, i.e. pesticide active
compound. As stated in Notes for Consolidated Financial Statements VI. 40. RMB 9,680,594,079.60 is recorded in main operating
income for the year 2021, with an increases of 33.78% compared with the year of 2020. The Company’s income is a considerable
amount and has seen a great increase. Operating income, as a key performance indicator of the Company, has inherent risk that the
management manipulates the time point of income recognition in order to achieve a specific goal or expectation. Therefore, we
identify income as a key audit matter.
(2) Audit response
The main audit procedures we implement for income confirmation are as follows:
① Understand and evaluate the rationality of the design of management's internal control system related to income, and test the
effectiveness of the internal control system related to income;
② Have knowledge of the Company’s business model, obtain the Company’s sales income breakdown, analyze income
constituents and compare income, cost, gross margin and other indicators related to main products with the peer data;
③ For the Company’s export income, check accounting vouchers, sales orders, delivery documents, export declarations, bills of
lading, sales invoices and other income recognition basis among selected customers. For the Company’s domestic sales income,
check accounting vouchers, sales contracts, delivery documents, shipment records, customer acceptance records and other income
recognition basis among selected customers;
④ As per the external confirmations of accounts receivable, send income confirmation requests to selected customers to verify
the truthfulness of the recognized incomes of the Company;
⑤ Conduct cut-off test over business income for any inter-period operating income of the Company.
45
2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
2. Provisions for bad debts of accounts receivable
(1) Matter description
The ending balance of account receivable of Rainbow is a large amount. As stated in Notes for Consolidated Financial
Statements VI. 5, as of December 31, 2021, RMB 2,493,562,277.24 was recorded in the ending balance of account receivable. RMB
165,203,397.89 is recorded in the ending balance of bad debt provision, and the amount of account receivable is 22.58% of total
assets. The management uses significant accounting estimates and judgments in deciding whether the credit risk of account
receivable of the Company increases significantly and measuring expected credit loss and estimated recoverable amount of account
receivable. Thus, we identify the bad debt provision for accounts receivable as a key audit matter.
2. Audit response
The main audit procedures we have implemented for the bad debt provision for accounts receivable are as follows:
① Understand and evaluate management and accounts receivable management related internal control design rationality and
operational effectiveness;
② Analyze the rationality of the Company’s accounting estimates for the bad debt provision for accounts receivable, including
the basis for determining risk feature portfolios, and the judgment for evaluating and making the provision for bad debt on a n
individual basis;
③ For the accounts receivable which the bad debt provisions have been made by aging, have knowledge of the Company’s
credit policy and its implementation, check the collections of accounts receivable and evaluate the rationality of the bad de bt
provisions for accounts receivable, by analyzing the aging of accounts receivable and customers’ credibility;
④ For the accounts receivable which the bad debt provisions have been made on an individual basis, check the judgment basis
of the management's estimated future recoverable amounts, including but not limited to customers’ credit records, the record of the
Company's claims made against China Export & Credit Insurance Corporation, the record of compensations received, the record of
customer default or late payment transactions, and analyze and review the rationality of the bad debt provisions that have been made
on an individual basis.
IV. Other Information
The management of Rainbow is responsible for Other Information, which includes the information covered in the 2021 Annual
Report of Rainbow, but does not include the financial statements and our audit report.
Our audit opinion on the financial statements does not cover the Other Information, and we do not issue any form of verificat ion
conclusion on Other Information.
In combination with our audit of the financial statements, our responsibility is to read the Other Information. In the proces s, WE
46
2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
consider whether the Other Information is materially inconsistent with the financial statements or the information we learned during
the audit, or whether there is a material mis-statement.
Based on the work that we have already done, if we determine that the Other Information contains material mis-statements, we
should report the fact. In this regard, we have nothing to report.
V. Responsibilities of Management and Those Charged with Governance for the Financial Statements
The management of Rainbow is responsible for preparing the financial statements in accordance with the requirements of
Accounting Standards for Business Enterprises to achieve a fair presentation, and designing, implementing and maintaining
necessary internal controls so that there are no material mis-statements caused by fraud or errors in the financial statements.
In preparing the financial statement, the management is responsible for assessing Rainbow’s capability to continue as a going
concern, disclosing matters related to going concern (if applicable) and using the going concern basis of accounting, unless the
management either intends to liquidate Rainbow or to cease operations, or has no realistic alternative.
Those charged with governance are responsible for monitoring the financial reporting process of Rainbow.
VI. CPA's Responsibilities for the Audit of the Financial Statements
Our objective is to obtain reasonable assurance that the financial statements as a whole are free of material mis-statement due to
fraud or error, and to issue an audit report that includes our audit opinion. Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance with audit standards will always detect a material mis-statement when it exists.
The mis-statement may be caused by fraud or errors. If each or all of the mis-statement could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements, it is generally deemed as material mis-statement.
We exercise professional judgment and maintain professional skepticism in carrying out our audit in accordance with audit
standards. At the same time, we also do the following work:
1. Identify and assess the risks of material mis-statement of the financial statements due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material mis-statement resulting from fraud is higher than that resulting from error, as fraud may
involve collusion, forgery, intentional omissions, mis-representations, or the override of internal control.
2. Understand the internal controls related to auditing, in order to design appropriate audit procedures, but not for the purpose of
expressing an opinion on the effectiveness of internal controls.
3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the management of Rainbow.
4. Conclude on the appropriateness of using the going concern assumption by the management of Rainbow. At the same time,
47
2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
based on the audit evidence obtained, a conclusion shall be drawn on whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the ability of Rainbow to continue as a going concern. If we conclude that a material
uncertainty exists, according to audit standards, we are required to draw attention in our audit report of related disclosure s in the
consolidated financial statements or, if such disclosures are inadequate, to modify our opinion.]If we conclude that there is material
uncertainty, the audit standards require us to bring relevant disclosures in our audit report, in order to draw the attention of the
financial statements users .If disclosure is inadequate, we should express unqualified opinions. Our conclusion is based on the
information available as of the audit report date. However, future events or conditions may cause Rainbow to cease to continue as a
going concern.
5. Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and evaluate
whether the financial statements fairly reflect relevant transactions and events.
6. Obtain sufficient and appropriate audit evidence regarding the financial information of Rainbow in ent ities and business
activities to express an audit opinion on the consolidated financial statements. We are responsible for guidance, supervision and
implementation of the group audit and take full responsibility for the audit opinions.
We have communicated with those charged with governance regarding the planned scope and schedule of the audit, and
significant audit matters, including any significant audit deficiencies in internal control that we identify during our audit.
We have also provided declarations to those charged with governance that we have complied with professional ethics
requirements relating to independence, and communicated with them all relationships and other matters that may reasonably be
considered to affect our independence, as well as relevant preventive measures (where appropriate).
For the matters communicated with those charged with governance, we determine which matters are most important to the audit
of the financial statements for the current period, and thus constituted the key audit matters. We describe these matters in our audit
report, unless the public disclosure of these matters is prohibited by laws and regulations, or in rare cases, if it is reasonably expected
that the negative consequences caused by communication of certain matters in our audit report outweigh benefits generated in public
interest, we confirm that such matters should not be communicated in our audit reports.
Shangkuai Certified Public Accountants (Special General Partnership) Chinese Certified Public Accountant Zhang Lifa
(Project Partner)
Chinese Certified Public Accountant Yin Zuoyong
Shanghai, China March 29, 2022
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
II. Financial Statements
The currency of the statements in the financial notes is: RMB
1. Consolidated balance sheet
Prepared by: Shandong Weifang Rainbow Chemical Co., Ltd.
Friday, December 31, 2021
Unit: RMB
Item Friday, December 31, 2021 Thursday, December 31, 2020
Current assets:
Monetary funds 3,724,744,059.71 2,414,448,915.08
Deposit reservation for balance
Lending to banks and other financial
institutions
Financial assets held for trading 200,000,000.00
Derivative financial assets 48,922,283.50 133,278,332.00
Notes receivable 35,385,609.76
Accounts receivable 2,328,358,879.35 2,143,568,272.92
Receivables financing 100,000.00 230,000.00
Pre-payments 77,313,374.04 76,103,861.97
Premium receivable
Re-insurance accounts receivable
Reserves for re-insurance contract
receivable
Other receivables 11,576,269.72 5,953,741.13
Including.: interest receivable
Dividends receivable
Financial assets purchased under
resale agreement
Inventory 1,775,113,092.67 1,009,026,739.04
Contracted assets
Assets held for sale
Non-current assets that mature within
one year
Other current assets 264,431,341.13 165,619,381.42
Total current assets 8,465,944,909.88 5,948,229,243.56
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
Non-current assets:
Disbursed loans and advances
Debt investments
Other debt investment
Long-term receivables
Long-term equity investment 1,810,538.69 1,826,018.32
Other equity instrument investment
Other non-current financial assets
Investment real estate
Fixed assets 1,218,635,770.03 924,361,253.46
Construction in progress 281,855,456.95 200,820,098.24
Productive biological assets
Oil and gas assets
Assets with rights of use 18,876,699.07
Intangible assets 118,003,684.46 120,487,087.24
Development expenditure
Goodwill 26,949,350.10 26,949,350.10
Long-term deferred expenses 1,972,932.08 1,939,406.84
Deferred income tax assets 46,893,086.34 31,535,237.65
Other non-current assets 130,713,116.29 37,720,250.96
Total non-current assets 1,845,710,634.01 1,345,638,702.81
Total assets 10,311,655,543.89 7,293,867,946.37
Current liabilities:
Short-term loan 550,348,417.31 650,352,593.02
Borrowings from the central bank
Borrowing from banks and financial
institutions
Financial liabilities held for trading
Derivative financial liabilities
Notes payable 3,369,427,627.30 2,851,033,174.02
Accounts payable 879,276,036.26 535,811,764.12
Advance receipts 2,624,536.52
Contract liability 45,096,633.96 27,611,393.11
Financial assets sold for repurchase
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
Deposits and inter bank deposits
received
Amount received from agency trading
of securities
Amount received from agency
underwriting of securities
Payroll payable 154,700,982.42 131,488,193.75
Taxes payable 83,154,482.55 25,818,770.58
Other payables 29,657,941.65 34,939,347.25
Including: Interests payable
Dividends payable
Charges and commissions payable
Re-insurance accounts payable
Liabilities held for sale
Non-current liabilities due within one
19,679,032.26 9,318,434.03
year
Other current liabilities 37,357,003.10
Total current liabilities 5,171,322,693.33 4,266,373,669.88
Non-current liabilities:
Provision for insurance contracts
Long-term loan 25,555,537.87 48,946,980.76
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liability 13,312,230.04
Long-term payables
Long-term payroll payable
Accrued liabilities 840,000.00
Deferred income 13,950,734.80 13,270,222.26
Deferred income tax liabilities 43,570,565.25 37,767,127.96
Other non-current liabilities
Total non-current liabilities 97,229,067.96 99,984,330.98
Total liabilities 5,268,551,761.29 4,366,358,000.86
Owner’s equity:
Share capital 276,180,000.00 207,130,000.00
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserve 2,226,848,878.76 858,290,440.12
Less: Treasury stock
Other comprehensive income -6,390,755.46 -27,063,944.13
Special reserve 14,783,485.63 16,936,043.63
Surplus reserve 158,674,657.07 114,159,831.52
General risk reserve
Undistributed profit 2,238,628,036.71 1,632,435,871.85
Total owners' equity attributed to
4,908,724,302.71 2,801,888,242.99
parent company
Minority shareholder’s interest 134,379,479.89 125,621,702.52
Total owner’s equity 5,043,103,782.60 2,927,509,945.51
Total liabilities and owners’ equity 10,311,655,543.89 7,293,867,946.37
Legal Representative: Wicky Wang Chief Accountant in Charge: Xing Bingpeng Chief of Accounting Institution: Zhang Baolin
2. Consolidated income statement
Unit: RMB
Item 2021 2020
I. Gross Operating Income 9,797,107,551.38 7,289,831,535.13
Including: Operating income 9,797,107,551.38 7,289,831,535.13
Interest income
Premium earned
Handling charges and commissions
income
II. Total Operating Costs 8,872,442,224.57 6,902,209,431.26
Including: Costs of business 7,938,158,166.90 6,040,215,411.31
Interest expenses
Handling charges and commission
expenses
Surrender value
Net payments for insurance claims
Net withdrawal of reserve for insurance
52
2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
responsibility contracts
Expenditures of policy dividend
Re-insurance expense
Taxes and surcharges 12,967,120.40 12,462,737.16
Sales expenses 219,514,455.26 176,753,956.13
Management expenses 293,698,852.81 214,627,201.55
R&D expenditures 312,438,469.66 227,225,895.12
Financial expenses 95,665,159.54 230,924,229.99
Including: Interest expenses 26,673,548.50 28,883,202.01
Interest income 30,734,697.16 22,873,901.83
Add: Other incomes 14,634,035.09 18,085,971.91
Income from investment (“－” for
224,428,785.59 86,127,591.36
loss)
Including: Income from investment in
associated enterprises and joint -15,479.63 -174,787.67
ventures
Income recognized at termination of
financial assets measured at amortized
cost
Foreign exchange gain ("-" fro loss)
Net exposure hedging income ("-" for
loss)
Income from changes in fair value ("-"
-84,356,048.50 117,832,064.00
for loss)
Credit impairment losses ("-" for loss) -48,700,774.17 -37,601,406.77
Asset impairment losses ("-" for loss) -14,353,166.10 -5,624,419.94
Gains from asset disposal ("-" for loss) -3,614,935.21 -19,173.62
III. Operating Profit ("-" for loss) 1,012,703,223.51 566,422,730.81
Add: Non-operating income 8,404,814.92 9,796,005.68
Less: Non-operating expenses 31,719,144.18 27,932,635.03
IV. Total Profit Before Tax (“-” for
989,388,894.25 548,286,101.46
total losses)
Less: Income tax expenses 143,341,408.16 82,884,412.38
V. Net Profit ("-" for net loss) 846,047,486.09 465,401,689.08
(I) Classification by business
continuity
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
1. Net profit from continuing
846,047,486.09 465,401,689.08
operations (“-” for net loss)
2. Net profit from discontinued
operations (“-” for net loss)
(II) Classification by ownership
1. Net profit attributed to the
799,718,982.72 437,634,530.57
shareholders of the parent company
2. Profit or loss of minority
46,328,503.37 27,767,158.51
shareholders
VI. Net Amount after Tax of Other
-13,968,931.28 -27,915,144.34
Comprehensive Income
Net amount of other comprehensive
income after tax attributed to the 20,673,188.67 -22,998,716.24
owners of parent company
(I) Other comprehensive income that
cannot be reclassified into profit or loss
1. Changes due to re-measurement on
defined benefit plan
2. Other comprehensive income that
cannot be converted into profit and loss
under the equity method
3. Changes in fair value of other equity
instrument investments
4. Changes in the fair value of the
credit risk of the enterprise
5. Other
(ii) Other comprehensive income that
20,673,188.67 -22,998,716.24
will be reclassified into profit and loss
1. Other comprehensive income that
can be converted to profit or loss under
the equity method
2. Changes in fair value for other
investment on bonds
3. Amount of financial assets
reclassified into other comprehensive
income
4. Provision for credit impairment of
other creditor's rights investment
5. Cash flow hedge reserve
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
6. Difference of foreign currency
20,673,188.67 -22,998,716.24
financial statement translation
7. Other
Net amount of other comprehensive
income after tax attribute d to minority -34,642,119.95 -4,916,428.10
shareholders
VII. Total Comprehensive Income 832,078,554.81 437,486,544.74
Total comprehensive income attributed
820,392,171.39 414,635,814.33
to parent company owners
Total comprehensive income attributed
11,686,383.42 22,850,730.41
to minority shareholders
VIII. Earnings per Share:
(i) Basic earnings per share 3.39 2.11
(ii) Diluted earnings per share 3.39 2.11
For business combination under the same control in the current period, the net profit of the merged party before the business
combination is RMB , and the net profit of the merged party in the previous period is RMB .
Legal Representative: Wicky Wang Chief Accountant in Charge: Xing Bingpeng Chief of Accounting Institution: Zhang Baolin
3. Consolidated cash flow statement
Unit: RMB
Item 2021 2020
I. Cash Flows Generated from
Operating Activities:
Cash received from sales of goods
9,623,031,311.61 6,623,303,362.41
and services
Net increase in deposit from
customers and inter bank
Net increase in borrowing from
central bank
Net increase in borrowings from
other financial institutions
Cash receipts from premiums under
direct insurance contracts
Net cash receipts from re-insurance
business
Net cash receipts from policyholders'
deposits and investments
55
2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
Cash receipts from interest, handling
fees and commissions
Net increase in capital borrowed from
banks and other financial institutions
Net increase in repurchase business
capital
Net cash received from securities
trading brokerage
Cash receipts from tax refunds 577,883,804.65 504,282,929.26
Cash received relating to other
53,367,659.63 61,592,852.82
operating activities
Subtotal of cash inflow in business
10,254,282,775.89 7,189,179,144.49
activities
Cash payments for goods acquired
8,330,141,066.73 5,825,768,243.81
and services received
Net increase in customer loans and
advances
Net increase in deposits in central
bank and inter bank
Cash payments for original insurance
contract claims
Net increase in lending funds from
banks and other financial institutions
Cash payments for interest, fee and
commission
Cash payments for insurance
policyholder dividends
Cash payments to employees and on
447,860,665.81 347,912,621.91
behalf of employees
Cash payments for taxes 161,162,768.69 111,491,727.77
Other cash payments relating to
524,046,664.93 392,131,637.50
operating activities
Subtotal of cash outflow in business
9,463,211,166.16 6,677,304,230.99
activities
Net cash flow from operating
791,071,609.73 511,874,913.50
activities
II. Cash Flows from Investing
Activities:
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
Cash receipts from investment
withdrawal
Cash receipts from return on
investments
Net cash receipts from disposals of
fixed assets, intangible assets and 10,440,269.55 5,939,640.23
other long-term assets
Net cash receipts from disposal of
subsidiary or any other business unit
Other cash receipts relating to
224,444,265.22 86,302,379.03
investing activities
Subtotal of cash inflow in investment
234,884,534.77 92,242,019.26
activities
Cash payments to acquire or
construct fixed assets, intangible 614,615,446.56 322,218,044.37
assets and other long-term assets
Cash payments for investment 200,000,000.00
Net increase in pledged loans
Net cash payments to acquire
subsidiary and other business units
Other cash payments relating to
investment activities
Subtotal of cash outflow in
814,615,446.56 322,218,044.37
investment activities
Net cash flow in investment activities -579,730,911.79 -229,976,025.11
III. Cash Flows from Financing
Activities:
Cash received from capital
1,428,809,338.64
contributions
Including: Cash received from
investment of minority shareholder
from subsidiary
Cash receipts from borrowings 1,225,034,893.26 1,588,905,171.50
Other cash receipts relating to
financing activities
Subtotal of cash inflow in financing
2,653,844,231.90 1,588,905,171.50
activities
Cash repayments of borrowings 1,343,683,572.12 1,010,424,945.52
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
Cash payments for distribution of
dividends, profits, or cash payments 163,753,538.25 94,211,087.65
for interest expenses
Including: Dividends and profits paid
to minority shareholders by
subsidiaries
Other cash paid related to financing
24,732,127.93 583,824,984.28
activities
Subtotal of cash outflow in financing
1,532,169,238.30 1,688,461,017.45
activities
Net cash flow from financing
1,121,674,993.60 -99,555,845.95
activities
IV. Effect of Exchange Rate Changes
-20,356,350.15 -45,969,241.69
on Cash and Cash Equivalents
V. Net Increase in Cash and Cash
1,312,659,341.39 136,373,800.75
Equivalents
Add: Beginning balance of cash and
719,642,914.12 583,269,113.37
cash equivalents
VI. Closing Balance of Cash and
2,032,302,255.51 719,642,914.12
Cash Equivalents
4. Consolidated statement of changes in owners' equity
Amount in the current period
2021
Equity attributed to ownersof the parent company
Item
Other equity instruments Minority Total owner’s
Less:
Other comprehensive General risk Undistributed
Treasury sharehold er’s interest equity
Share capital Capital reserve Special reserv e Surplus reserve Other Subtotal
Preferred Perpetual
income reserve profit
Other
stock
shares bonds
I. Balance at the end of the period of
207,130,000.00 858,290,440.12 -27,0 63,944.13 16,936,0 43.63 114,159,831.52 1,632,435,871.8 5 2,801,888,242.9 9 125,621,702.52 2,927,509,945.5 1
previous year:
Add: Changes in accounting policies 125,207.69 125,207.69 125,207.69
Correction of errors fromprevious
period
Business combination under common
contro l
Other
II. Opening balance of the current 207,130,000.00 858,290,440.12 -27,0 63,944.13 16,936,0 43.63 114,159,831.52 1,632,561,079.5 4 2,802,013,450.6 8 125,621,702.52 2,927,635,153.2 0
58
2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
year
III. Changes in Current Perio d (“-” for
69,050,0 00.00 1,368,558,438.6 4 20,673,1 88.67 -2,152,558.0 0 44,514,8 25.55 606,066,957.17 2,106,710,852.0 3 8,757,777.37 2,115,468,629.4 0
decrease)
(I) Total comprehensive income 20,673,1 88.67 799,718,982.72 820,392,171.39 11,686,3 83.42 832,078,554.81
(II) Capital contribution and reduction
69,050,0 00.00 1,368,558,438.6 4 1,437,608,438.6 4 1,437,608,438.6 4
by owners
1. Ordinary shares invested by owners 69,050,0 00.00 1,359,759,338.6 4 1,428,809,338.6 4 1,428,809,338.6 4
2. Capital contributed from other
equity instrument holders
3. Amounts of share-based payments
8,799,100.00 8,799,100.00 8,799,100.00
recognized in owners' equity
4. Other
(III) Profit distribution 44,514,8 25.55 -193,652,025.5 5 -149,137,200.0 0 -2,875,809.2 3 -152,013,009.2 3
1. Appropriation of surplus reserve 44,514,8 25.55 -44,5 14,825.55
2. Appropriation of general risk
reserve
3. Distribution to owners (or
-149,137,200.0 0 -149,137,200.0 0 -2,875,809.2 3 -152,013,009.2 3
sharehold ers)
4. Other
(IV) Internal carry -ove of owners'
equity
1. Capital reserve converted into
capital (or share capital)
2. Surplus reserve converted into
capital (or share capital)
3. Recovery of losses by surplus
reserves
4. Carry -over retained earnings from
defined benefit plan changes
5. Carry -over retained earnings from
other comprehensive income
6. Other
(V) Special reserves -2,152,558.0 0 -2,152,558.0 0 -52,7 96.82 -2,205,354.8 2
1. Withdrawal in the current period 28,629,0 21.92 28,629,0 21.92 378,850.78 29,007,8 72.70
2. Use in the current period -30,7 81,579.92 -30,7 81,579.92 -431,647.60 -31,2 13,227.52
(VI) Other
IV. Balance at the end of the current 276,180,000.00 2,226,848,878.7 6 -6,390,755.4 6 14,783,4 85.63 158,674,657.07 2,238,628,036.7 1 4,908,724,302.7 1 134,379,479.89 5,043,103,782.6 0
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
period
Unit: RMB
Amount in the previous period
Unit: RMB
Year of 2020
Equity attributed to ownersof the parent company
Item
Other equity instruments Minority Total owner’s
Less:
Other comprehensive General risk Undistributed
sharehold er’s interest equity
Share capital Capital reserve Treasury Special reserve Surplus reserve Other Subtotal
Preferred Perpetual
income reserve profit
Other
stock
shares bonds
I. Balance at the end of the period of
207,130,000.00 858,290,440.12 -4,065,227.8 9 10,783,5 58.07 114,159,831.52 1,263,154,241.2 8 2,449,452,843.1 0 103,598,601.81 2,553,051,444.9 1
previous year:
Add: Changes in accounting policies
Correction of errors fromprevious
period
Business combination under common
control
Other
II. Opening balance of the current
207,130,000.00 858,290,440.12 -4,065,227.8 9 10,783,5 58.07 114,159,831.52 1,263,154,241.2 8 2,449,452,843.1 0 103,598,601.81 2,553,051,444.9 1
year
III. Changes in Current Period (“-”
-22,9 98,716.24 6,152,485.56 369,281,630.57 352,435,399.89 22,023,1 00.71 374,458,500.60
for decrease)
(I) Total comprehensive income -22,9 98,716.24 437,634,530.57 414,635,814.33 22,850,7 30.41 437,486,544.74
(II) Capital contribution and
reduction by owners
1. Ordinary shares invested by
owners
2. Capital contributed from other
equity instrument holders
3. Amounts of share-based payments
recognized in owners' equity
4. Other
(III) Profit distribution -68,3 52,900.00 -68,3 52,900.00 -880,426.52 -69,2 33,326.52
1. Appropriation of surplus reserve
2. Appropriation of general risk
reserve
3. Distribution to owners (or
-68,3 52,900.00 -68,3 52,900.00 -880,426.52 -69,2 33,326.52
sharehold ers)
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2021 Annual Report of Rainbow To be a Global Leading Crop Protection Company
4. Other
(IV) Internal carry -ove of owners'
equity
1. Capital reserve converted into
capital (or share capital)
2. Surplus reserve converted into
capital (or share capital)
3. Recovery of losses by surplus
reserves
4. Carry -over retained earnings from
defined benefit plan changes
5. Carry -over retained earnings from
other comprehensive income
6. Other
(V) Special reserves 6,152,485.56 6,152,485.56 52,796.8 2 6,205,282.38
1. Withdrawal in the current period 24,217,2 12.35 24,217,2 12 .35 354,240.93 24,571,4 53.28
2. Use in the current period -18,0 64,726.79 -18,0 64,726.79 -301,444.1 1 -18,3 66,170.90
(VI) Other
IV. Balance at the end of the current
207,130,000.00 858,290,440.12 -27,0 63,944.13 16,936,0 43.63 114,159,831.52 1,632,435,871.8 5 2,801,888,242.9 9 125,621,702.52 2,927,509,945.5 1
period
In the case of any deviation from the explanations presented hereof, the 2021 Annual Report in Chinese
version shall prevail.
61
