深粮B:2019年半年度报告(英文版)(更新后)

SHENZHEN CEREALS HOLDINGS CO., LTD.

       SEMI-ANNUAL REPORT 2019




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




     Section I. Important Notice, Contents and Paraphrase

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

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

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

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

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

accuracy and completion of the whole contents.

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

of Accounting Ye Qingyun and Head of Accounting Institution (Accounting

Supervisors) Wen Jieyu hereby confirm that the Financial Report of

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

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

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

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

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

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

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

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

of investment risks.

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

                                        2
                                              深圳市深粮控股股份有限公司 2019 年半年度报告全文



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

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

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

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

versions, Chinese report shall prevail.

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

of common reserves either.




                                          3
                                                                深圳市深粮控股股份有限公司 2019 年半年度报告全文




                                                Contents




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

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

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

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

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

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

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

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

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

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

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




                                                        4
                                                              深圳市深粮控股股份有限公司 2019 年半年度报告全文




                                          Paraphrase


                    Items            Refers to                               Contents

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

SZCG                                 Refers to Shenzhen Cereals Group Co., Ltd

Doximi                               Refers to SZCG Doximi Business Co., Ltd.

Flour Company                        Refers to Shenzhen Flour Co., Ltd

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

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

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

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

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

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

Agricultural Products                Refers to Shenzhen Agricultural Products Co., Ltd

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

CSRC                                 Refers to China Securities Regulation Commission

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




                                                     5
                                                                            深圳市深粮控股股份有限公司 2019 年半年度报告全文




       Section II. Company Profile and Main Financial Indexes

I. Company profile

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

Listing stock exchange            Shenzhen Stock Exchange

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

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


II. Person/Way to contact

                               Secretary of the Board                                    Rep. of security affairs

Name            Du Jianguo                                          Chen Kaiyue, Liu Muya

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

Tel.            0755-82027522                                       0755-82027522

Fax.            0755-83778311                                       0755-83778311

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


III. Others

1. Way of contact


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

√ Applicable     □ Not applicable

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

Postal Code of Company Registration Address         518057

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

Postal Code of the Company's Office Address         518033

Company Web Site                                    www.slkg1949.com

Company E-mail                                      szch@slkg1949.com

                                                                   6
                                                                          深圳市深粮控股股份有限公司 2019 年半年度报告全文


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

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



2. Information disclosure and preparation place


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


3. Other relevant information

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




IV. Main accounting data and financial indexes

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

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

                                                   The Period              Same period of last year           Changes over last

                                                                  7
                                                                                深圳市深粮控股股份有限公司 2019 年半年度报告全文


                                                                                                                               year

                                                                          Before adjustment      After adjustment       After adjustment

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

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

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

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

                                                                          Before adjustment      After adjustment       After adjustment

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

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

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


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

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

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

                                     Current period                Last period                  Period-end               Period-begin

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

Items and amount adjusted by IAS

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


                                                                      8
                                                                              深圳市深粮控股股份有限公司 2019 年半年度报告全文


regulation

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


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


□ Applicable √ Not applicable

The Company has no above mentioned condition occurred in the period


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

□ Applicable √ Not applicable


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

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

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

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

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

□ Applicable √ Not applicable

In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
                                                                    9
                                                                      深圳市深粮控股股份有限公司 2019 年半年度报告全文


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




                                                             10
                                                                        深圳市深粮控股股份有限公司 2019 年半年度报告全文




                   Section III. Summary of Company Business

I. Main businesses of the Company in the reporting period

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


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


The grain and oil reserve service business mainly provide dynamic grain and oil reserve services to local
governments in Shenzhen, and provides local governments with market-oriented services such as grain and oil
reserves, testing, and rotation in the form of business holdings. With the advantages of brand, reputation, experience,
management, service, facilities and information system accumulated in the grain and oil market, we independently
organize and implement the procurement, storage, rotation, sales and other activities of the local government
reserves of grain and oil, and ensure the quality, quantity and safety and other aspects of grain and oil reserves are in
                                                               11
                                                                     深圳市深粮控股股份有限公司 2019 年半年度报告全文


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


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


II. Major changes in main assets

1. Major changes in main assets


                Major assets                                          Note of major changes


Equity assets                          No major Change

Fixed assets                           No major Change

Intangible assets                      No major Change

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


2. Main overseas assets

□ Applicable √ Not applicable



                                                            12
                                                                        深圳市深粮控股股份有限公司 2019 年半年度报告全文


III. Core Competitiveness Analysis

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

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


1. Management Efficiency Advantage
The core management team of the company has rich experience and stable structure, and has a strong strategic
vision and pragmatic spirit. It has formed a set of effective system to promote the high-quality development of the
company by combining with the company’s actual development. The company vigorously promotes the innovation
and transformation of business models, and actively promotes the transition from “trade-oriented enterprises” to
“service-oriented enterprises”, and from “operational management and control” to “strategic management and
control”. In the business management and control, the company builds a “four-in-one” management and control
model that the “business operations and fund management, inventory management, and quality management”
relatively separate and check and balance each other, at the same time, it strengthens risk management, budget
management, plan management, contract management, customer management and brand management and other
measures to effectively prevent operational risks. Through innovative talent management, the company has
established an open talent team to meet the long-term development of enterprises. The company has innovated and
implemented the EVA performance appraisal mechanism and established a result-oriented incentive and restraint
assessment mechanism which effectively built the performance culture and stimulated the viability within the
enterprise. The company insists on cultivating and advocating the corporate culture with “people-oriented,
performance first, excellent quality, and harmony” as the core values, combines the personal development goals of
employees with the corporate vision, and enhances the cohesiveness and centripetal force of the enterprise.
2. Business model advantages
In terms of business layout and management, the company has deepened and subdivided its target markets, carried
out specialized operations in different areas of the grain and oil food industry chain, embraced the Internet, and
gradually built a “trinity” of multilevel product supply network of terminal grain and oil e-commerce, catering and
distribution services, and bulk grain and oil trading services. In terms of e-commerce, the company vigorously
developed new formats of grain, and actively promoted the development of new grain retail formats such as
                                                               13
                                                                   深圳市深粮控股股份有限公司 2019 年半年度报告全文


“Internet + Grain” and “Community Automatic Selling Grain Supply Centers”. It has already had the B2C Grain
and Oil Network Direct Selling Platform “Doximi .com”, and has opened channels on Tmall, Jingdong Mall and
other e-commerce platforms to promote the online and offline deep integration of e-commerce platforms. In terms
of catering and distribution, the company has built a one-stop distribution service platform for large-scale terminal
customers such as chain catering and canteens of thousands of people. Food and oil trading services, the company
builds a grain bulk commodity trading platform, efficiently integrates business flow “Shenliang Cereals Trading
Network”, logistics and information flow, improves circulation efficiency, and provides spot trading, financing,
logistics, quality inspection, transaction information and other services for internal business units, suppliers and
customers. The company gives full play to the traction role of major projects such as grain logistics nodes,
continuously improves the construction of the grain supply chain system, and promotes the sustainable development
of enterprises.
3. Research and development technology advantages
The company attaches great importance to transforming and upgrading the traditional industries by modern
technologies, and actively introduces a new generation of information technologies such as internet of things,
cloud computing, big data and mobile internet into grain management. It takes the lead in promoting the
construction of “standardization, mechanization, informationization and harmlessness” of warehouse management
in the industry, independently develops “grain logistics information system” (Shenliang GLS), applies RFID
technology and slip sheet equipment, introduces intelligent robots, and upgrades the grain depot operation
efficiency and management efficiency. The company has undertaken a number of national-level research projects,
and multiple IT project results have won national, provincial and municipal awards. More than 30 information
systems have been developed and run normally. As of now, the company has 69 patents and 23 copyrights.
4. Advantages of quality control
The company gives full play to the advantages of products, channels, brands, warehousing, quality inspection, etc.,
and truly provides good quality and safety products for the society. The company has established a quality control
system that is recognized by international large food and beverage enterprises. In the grain and oil business, the
company’s subordinate enterprise, SZCG Quality Test, has the leading grain quality testing technology and
equipment in the domestic grain industry, and has been officially incorporated into the national grain quality
supervision and testing system, and has been awarded the “Guangdong Shenzhen National Grain Quality
Monitoring Station” by the State Administration of Grain. The advanced testing technology selects and checks the
grain from the source, and timely and accurately checks the quality status of grain and oil in all aspects of
warehousing, storage and delivery. Shenliang Quality Test has obtained the qualification certificate (CMA) for
testing and inspection institutions, and it is the first among domestic peers to include pesticide residues, heavy metal
pollutants, mycotoxins and other hygienic indicators and taste value indicators in daily testing indicators, and has
the detection ability of four types of indicators such as grain regular quality, storage quality, hygiene and eating
quality, which can meet the relevant quality inspection requirements of grain and oil products, and can accurately
analyze the nutritional ingredients and hygienic index of grain and determine its storage quality and eating quality.
5. Advantage of brand effect
The company regards “quality” as the cornerstone of establishing the enterprise brand, and takes “good service” and
                                                          14
                                                                    深圳市深粮控股股份有限公司 2019 年半年度报告全文


“livelihood guarantee” as the brand’s core value, and has created a batch of “reliable grain”, “reliable flour” and
“reliable oil” brand systems, and has formed good brand effects. The company has been selected as one of the “Top
500 Chinese Service Enterprises” for five times, and has won the “China Top Ten Grain and Oil Group”, “China Top
100 Grain and Oil Enterprise”, “China’s Most Respected Grain and Oil Enterprise”, “National Top 100 Military
Supply Stations” and “Key Agricultural Leading Enterprises in Guangdong Province”, etc., and was awarded
“Shenzhen Credit Enterprise”, “Shenzhen Old Brand”, “Leading Enterprises Strongly Support Grain and Oil
Industrialization”, etc., the market influence of “Shenliang Yushuiqing”, “Shenliang Duoxi”, “Guzhixiang”,
“Clivia”, “Shenliang Fuxi” and other brands has gradually expanded, and the subordinate flour company has won
the title of “Shenzhen Old Brand”, and Shenliang Duoxi Changxiangdao Daohuaxiang rice has been selected as the
first batch of “China Good Grain and Oil” products of the State Administration of Grain which is the only selected
product in Guangdong Province.
6. Comprehensive basic advantages
The company has a large-scale warehouse capacity in Shenzhen, it is the main force of Shenzhen's municipal
grain reserves and the “rice bag” trusted by the public. At present, its own grain storage capacity is about 400,000
tons. Over the years, on the basis of giving priority to ensuring the government's macroeconomic regulation and
control of grain and guaranteeing the grain security, the company has been exploring the reform of the grain and
oil reserve system and mechanism, fully utilizing the operational characteristics and advantages of “dynamic
rotation” and fully participating in market competition. In the process of market-oriented self-management, the
company continues to optimize and innovate the grain storage logistics mode and the grain and oil distribution
docking mode, so that the market competitiveness and regulation power have significantly enhanced, the main
channel advantages of grain and oil supply have been further stabilized, and the main position of grain and oil
industry has further highlighted. The company has established long-term, extensive and diversified cooperative
relations with grain and oil traders, processors and end customers, and has built a wide business network and
stable business channels. It has a high market share in the regional market and is rated as “Key Agricultural
Leading Enterprise of Guangdong Province” by the Department of Agriculture of Guangdong Province.




                                                           15
                                                                 深圳市深粮控股股份有限公司 2019 年半年度报告全文




          Section IV. Discussion and Analysis of the Operation

I. Introduction

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


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

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


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




II. Main business analysis

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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

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

According to products

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

According to region

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


III. Analysis of the non-main business

√ Applicable     □ Not applicable
                                                                                                                                        In RMB

                                              Ratio in total                                                                  Whether be
                             Amount                                                        Note
                                                  profit                                                                      sustainable

Investment income             7,167,936.04                 3.09%                                                             Unsustainable

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

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

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


                                                              cost.

Non-operating
                              362,252.46              0.16%                                                           Unsustainable
income

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


IV. Assets and liability

1. Major changes of assets composition

                                                                                                                                   In RMB

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

                                           Ratio in                        Ratio in
                          Amount            total        Amount             total
                                            assets                          assets

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

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

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

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

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

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

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

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

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


2. Assets and liability measured by fair value

√ Applicable   □ Not applicable

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


                                                                                                                                       In RMB

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

Financial assets

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

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

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


3. The assets rights restricted till end of the period

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

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

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

   Total        614,926,724.94      567,646,503.46



V. Investment Analysis

1. Overall situation

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


                                                 (Yuan)

                             244,767,336.46                       0.00                            100.00%


2. The major equity investment obtained in the reporting period

□ Applicable   √ Not applicable




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


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

√ Applicable   □ Not applicable
                                                                                                                                                                                        In RMB

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

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

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

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

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

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

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

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


4. Financial assets investment

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

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

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

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

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

Disclosure date of securities investment
                                              Not applicable
approval of the Board

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


(2) Derivative investment

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


VI. Sales of major assets and equity

1. Sales of major assets

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


2. Sales of major equity

□ Applicable   √ Not applicable


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

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

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

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

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

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

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




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


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

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

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


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


VIII. Structured vehicle controlled by the Company

□ Applicable   √ Not applicable


IX. Prediction of business performance from January – September 2019

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


X. Risks and countermeasures

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




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




                                       Section V. Important Events

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

1. AGM in the period


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

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

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

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

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


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

□ Applicable   √ Not applicable


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

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


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


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

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


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


Whether the financial report has been audited or not

□Yes √No

The financial report has not been audited


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

□ Applicable    √ Not applicable


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

□ Applicable    √ Not applicable


VII. Bankruptcy reorganization

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


VIII. Lawsuits


Significant lawsuits and arbitration

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

Other lawsuits

√ Applicable    □ Not applicable

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

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


                             (in 10                                                                                             date   index
                            thousand
                             Yuan)

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


IX. Penalty and rectification

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


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

□ Applicable    √ Not applicable


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

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


XII. Major related transaction


1. Related transaction with routine operation concerned


□ Applicable    √ Not applicable

No related transaction occurred in the period with routine operation concerned



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


□ Applicable    √ Not applicable

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


3. Related transaction of foreign investment


□ Applicable   √ Not applicable

No related transaction of foreign investment occurred at period-end



4. Related credits and liabilities


□ Applicable   √ Not applicable

No related credits and liabilities occurred in period



5. Other major related transaction


□ Applicable   √ Not applicable

No other major related transaction in the Period


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

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


XIV. Significant contract and implementations

1. Trusteeship, contract and leasing

(1) Trusteeship

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


(2) Contract

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


(3) Leasing

□ Applicable   √ Not applicable

No leasing in the Period




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


2. Major Guarantee

√ Applicable   □ Not applicable


(1) Guarantee

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

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

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

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

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

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


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

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

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

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

Explanation on compound guarantee
Nil


(2) Illegal external guarantee

□ Applicable   √ Not applicable

No illegal external guarantee in the period


3. Other material contracts

□ Applicable   √ Not applicable

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


XV. Social responsibility

1. Major environment protection


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

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


2. Execution of social responsibility of targeted poverty alleviation

(1) Plan of targeted poverty alleviation

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




(2) Summary of semi-annual targeted poverty alleviation

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

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


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




(3) Performance of targeted poverty alleviation


                                                                      Measurement
                                    Target                                                Numbers/ implementation
                                                                          unit

i. Overall                                                                ——                      ——

                                                                       10 thousand
  Including:1. fund                                                                                               100.09
                                                                          yuan

                                                                       10 thousand
             2. Material discount                                                                                   1.08
                                                                          yuan

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

ii. Invested by specific project                                          ——                      ——

  1.Industrial development poverty                                        ——                      ——

Including:      1.1Type                                                   ——       Poverty Alleviation by Asset Income

             1.2 numbers of industrial development poverty               Number                                        1

             1.3Amount input                                           10 thousand                                    50

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


                                                                               yuan

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

  2.Transfer employment                                                        ——                    ——

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

             2.2 Number of vocation skills training                         Person-time                                     0

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

  3.Relocation the poor                                                        ——                    ——

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

  4.Education poverty                                                          ——                    ——

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

             4.2Number of subsidized poor student s                           Person                                        0

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

  5.Health poverty alleviation                                                 ——                    ——

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

  6.Ecological protection and poverty alleviation                              ——                    ——

                                                                                             Environmental Cleaning and
Including:        6.1 Type                                                     ——
                                                                                                    Maintenance

                                                                            10 thousand
                 6.2Amount input                                                                                          1.51
                                                                               yuan

  7.Fallback protection                                                        ——                    ——

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

             7.2Number of Three Stay Behind persons help                      Person                                        0

                                                                            10 thousand
             7.3Amount input for poor disabled persons                                                                      0
                                                                               yuan

             7.4Number of poor disabled persons help                          Person                                        0

  8.Social poverty alleviation                                                 ——                    ——

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

             8.2Amount for targeted poverty alleviation                     10 thousand                                     0

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


                                                                              yuan

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

  9.Other                                                                     ——                       ——

Including:      9.1. number of items                                         Number                                             3

                                                                           10 thousand
             9.2. Amount input                                                                                           39.74
                                                                              yuan

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

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

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


(4) Follow-up of targeted poverty alleviation

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




XVI. Other major events

□ Applicable   √ Not applicable

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


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


XVII. Significant event of subsidiary of the Company

□ Applicable   √ Not applicable




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




    Section VI. Changes in Shares and Particulars about Shareholders

I. Changes in Shares

1. Changes in shares

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

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

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

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

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

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

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

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

Reasons for share changed

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

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


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

□ Applicable    √ Not applicable
Ownership transfer of share changed

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

□ Applicable    √ Not applicable


2. Changes of restricted shares

√Applicable     □Not applicable

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

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

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

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

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

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

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

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

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

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

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


II. Securities issuance and listing


□ Applicable   √ Not applicable


III. Amount of shareholders and particulars about shares holding

                                                                                                                                In Share

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

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

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

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

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

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

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

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

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

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

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

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

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


                                    person

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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

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

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


IV. Change of controlling shareholder or actual controller

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




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




                                      Section VII. Preferred Stock

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




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




      Section VIII. Particulars about Directors, Supervisor and Senior

                                                         Executives

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

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


II. Changes of directors, supervisors and senior executives

√ Applicable    □ Not applicable

      Name                       Position                  Type                Date                          Causes

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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


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


                                                                                      Directors

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

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

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

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

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

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

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

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

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

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

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

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

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




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




                                        Section IX. Corporate Bonds

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




                                                                   48
                                                                          深圳市深粮控股股份有限公司 2019 年半年度报告全文




                                         Section X. Financial Report

I. Audit reports

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


II. Financial statements

Units in Notes of Financial Statements is RMB


1. Consolidated Balance Sheet

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

                    Item                                  2019-6-30                              2018-12-31

Current assets:

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

     Settlement provisions

     Capital lent

     Tradable financial assets                                           1,153,309.17

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

     Derivative financial assets

     Note receivable                                                      350,756.64                            1,027,635.04

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

     Receivable financing

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

     Insurance receivable

     Reinsurance receivables

     Contract reserve of reinsurance
receivable

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

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


          Including: Interest receivable

                  Dividend receivable

       Buying back the sale of financial
assets

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

         Contractual assets

       Assets held for sale

       Non-current asset due within one
year

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

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

Non-current assets:

       Loans and payments on behalf

       Debt investment

       Finance asset available for sales                                                     57,500.00

       Other debt investment

       Held-to-maturity investment

       Long-term account receivable

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

       Investment in other equity
instrument

       Other non-current financial assets              57,500.00

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

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

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

       Productive biological asset                    402,232.74                           407,078.92

       Oil and gas asset

         Right-of-use assets

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

       Expense on Research and
Development

       Goodwill

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

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


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


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

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

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

Current liabilities:

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

     Loan from central bank

     Capital borrowed

     Transactional financial liability

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

     Derivative financial liability

     Note payable

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

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

     Selling financial asset of
repurchase

     Absorbing deposit and interbank
deposit

     Security trading of agency

     Security sales of agency

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

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

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

          Including: Interest payable               1,020,795.27

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

     Commission charge and
commission payable

     Reinsurance payable

      Contractual liability

     Liability held for sale

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

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

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

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


     Insurance contract reserve

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

     Bonds payable

        Including: Preferred stock

                     Perpetual capital
securities

       Lease liability

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

     Long-term wages payable

     Accrual liability

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

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

     Other non-current liabilities

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

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

Owner’s equity:

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

     Other equity instrument

        Including: Preferred stock

                     Perpetual capital
securities

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

     Less: Inventory shares

     Other comprehensive income

     Reasonable reserve                             62,409.56                               154.21

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

     Provision of general risk

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

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

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

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

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


Legal Representative: Zhu Junming


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


Person in charge of accounting works: Ye Qingyun


Person in charge of accounting institute: Wen Jieyu


2. Balance Sheet of Parent Company

                                                                                                                In RMB

                   Item                               2019-6-30                             2018-12-31

Current assets:

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

     Trading financial assets                                       1,153,309.17

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

     Derivative financial assets

     Note receivable

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

     Receivable financing

     Accounts paid in advance

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

       Including: Interest receivable

                   Dividend receivable

     Inventories                                                    2,972,019.11                           8,806,338.26

     Contractual assets

     Assets held for sale

     Non-current assets maturing within
one year

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

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

Non-current assets:

     Debt investment

     Available-for-sale financial assets

     Other debt investment

     Held-to-maturity investments

     Long-term receivables

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


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


     Investment in other equity
instrument

     Other non-current financial assets

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

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

     Construction in progress

     Productive biological assets                     402,232.74                           407,078.92

     Oil and natural gas assets

     Right-of-use assets

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

     Research and development costs

     Goodwill

     Long-term deferred expenses                      302,763.72                           409,621.50

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

     Other non-current assets

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

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

Current liabilities

     Short-term borrowings

     Trading financial liability

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

     Derivative financial liability

     Notes payable

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

     Accounts received in advance                       3,247.80                           124,945.74

     Contractual liability

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

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

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

        Including: Interest payable

                Dividend payable

     Liability held for sale

     Non-current liabilities due within

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


one year

     Other current liabilities

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

Non-current liabilities:

     Long-term loans

     Bonds payable

        Including: preferred stock

                    Perpetual capital
securities

     Lease liability

     Long-term account payable

     Long term employee compensation
payable

     Accrued liabilities

     Deferred income                               45,575.32                             46,129.96

     Deferred income tax liabilities               18,060.77                             10,965.46

     Other non-current liabilities

Total non-current liabilities                      63,636.09                             57,095.42

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

Owners’ equity:

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

     Other equity instrument

        Including: preferred stock

                    Perpetual capital
securities

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

     Less: Inventory shares

     Other comprehensive income

     Special reserve

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

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

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

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




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


3. Consolidated Profit Statement

                                                                                                                  In RMB

                        Item                      Semi-annual of 2019                    Semi-annual of 2018

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

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

              Interest income

              Insurance gained

              Commission charge and
commission income

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

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

              Interest expense

              Commission charge and
commission expense

     Cash surrender value

     Net amount of expense of
compensation

     Net amount of withdrawal of
insurance contract reserve

     Bonus expense of guarantee slip

              Reinsurance expense

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

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

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

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

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

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

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

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

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

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

                                                            56
                                                         深圳市深粮控股股份有限公司 2019 年半年度报告全文


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

              Exchange income (Loss is
listed with “-”)

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

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

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

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

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

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

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

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

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

   (i) Classify by business continuity

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

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

   (ii) Classify by ownership

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

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

VI. Net after-tax of other comprehensive
income

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

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


                                                 57
                                                      深圳市深粮控股股份有限公司 2019 年半年度报告全文


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

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

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

              4.Fair value change of
enterprise's credit risk

              5. Other

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

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

              2.Change of fair value of
other debt investment

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

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

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

              6.Credit impairment
provision for other debt investment

              7.Cash flow hedging reserve

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

              9.Other

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

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


                                              58
                                                                            深圳市深粮控股股份有限公司 2019 年半年度报告全文


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

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

VIII. Earnings per share:

       (i) Basic earnings per share                                             0.1763                                  0.1759

     (ii) Diluted earnings per share                                            0.1763                                  0.1759

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


Legal Representative: Zhu Junming


Person in charge of accounting works: Ye Qingyun


Person in charge of accounting institute: Wen Jieyu


4. Profit Statement of Parent Company

                                                                                                                        In RMB

                       Item                           Semi-annual of 2019                      Semi-annual of 2018

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

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

            Taxes and surcharge                                             252,634.47                               292,769.77

            Sales expenses                                                  293,450.97                             1,943,060.61

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

            R&D expenses

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

                     Including: interest
expenses

                              Interest income

      Add: other income                                                1,253,598.63                                      554.64

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

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

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


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

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

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

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

         Add: Non-operating income

         Less: Non-operating expense                                                              51.64

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

         Less: Income tax                                58,289.47                           -157,620.42

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

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

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

V. Net after-tax of other comprehensive
income

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

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

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

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

                 4.Fair value change of
enterprise's credit risk

                 5. Other

          (II) Other comprehensive income
items which will be reclassified

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


subsequently to profit or loss

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

               2.Change of fair value of
other debt investment

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

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

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

               6.Credit impairment
provision for other debt investment

               7.Cash flow hedging
reserve

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

               9.Other

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

VII. Earnings per share:

         (i) Basic earnings per share                                  -0.0148                               -0.0106

        (ii) Diluted earnings per share                                -0.0148                               -0.0106


5. Consolidated Cash Flow Statement

                                                                                                              In RMB

                     Item                     Semi-annual of 2019                      Semi-annual of 2018

I. Cash flows arising from operating
activities:

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

        Net increase of customer deposit

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


and interbank deposit

        Net increase of loan from central
bank

       Net increase of capital borrowed
from other financial institution

       Cash received from original
insurance contract fee

       Net cash received from reinsurance
business

       Net increase of insured savings
and investment

       Cash received from interest,
commission charge and commission

       Net increase of capital borrowed

       Net increase of returned business
capital

       Net cash received by agents in sale
and purchase of securities

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

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

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

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

       Net increase of customer loans and
advances

       Net increase of deposits in central
bank and interbank

       Cash paid for original insurance
contract compensation

       Net increase of financial assets
held for transaction purposes

       Net increase of capital lent

       Cash paid for interest, commission
charge and commission

        Cash paid for bonus of guarantee


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


slip

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

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

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

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

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

II. Cash flows arising from investing
activities:

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

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

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

       Net cash received from disposal of
subsidiaries and other units

       Other cash received concerning
investing activities

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

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

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

       Net increase of mortgaged loans

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

       Other cash paid concerning
investing activities

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

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

III. Cash flows arising from financing
activities


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


     Cash received from absorbing
                                                          17,150,000.00
investment

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

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

     Cash received from issuing bonds

     Other cash received concerning
                                                                                                   24,500,000.00
financing activities

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

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

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

     Including: Dividend and profit of
minority shareholder paid by
subsidiaries

     Other cash paid concerning
                                                                 72,997.72
financing activities

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

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

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

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

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

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


6. Cash Flow Statement of Parent Company

                                                                                                         In RMB

                  Item                    Semi-annual of 2019                      Semi-annual of 2018

I. Cash flows arising from operating
activities:

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


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

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

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

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

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

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

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

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

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

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

II. Cash flows arising from investing
activities:

     Cash received from recovering
                                               266,000,000.00
investment

     Cash received from investment
                                                 1,567,648.80
income

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

     Net cash received from disposal of
subsidiaries and other units

     Other cash received concerning
investing activities

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

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

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

     Net cash received from


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


subsidiaries and other units obtained

     Other cash paid concerning
investing activities

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

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

III. Cash flows arising from financing
activities

     Cash received from absorbing
investment

     Cash received from loans

     Cash received from issuing bonds

     Other cash received concerning
financing activities

Subtotal of cash inflow from financing
activities

     Cash paid for settling debts                                                     10,000,000.00

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

     Other cash paid concerning
                                                    72,997.72
financing activities

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

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

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

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

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

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




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

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

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

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


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

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

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

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

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

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

2. Usage in the
report period

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


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

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


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

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

(V) Reasonable reserve

1. Withdrawal in the
report period

2. Usage in the report
period

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

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

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

2. Usage in the report
period

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




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


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


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


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


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


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


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


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

                                                         78
                                                                 深圳市深粮控股股份有限公司 2019 年半年度报告全文


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


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


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


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


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



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


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


Business scope: production of tea, tea products, extract of tea and natural plant, canned food, beverage and native
products ( business license for the production place should apply separately); technology development and
technology service of tea, plant products, soft beverage and foods; info tech development and supporting service;
on-line trading; investment, operation, management and development of tea plantation; investment in industrial
projects (apply separately for detail projects); domestic trading(excluding special sales, specific control and
exclusive commodity); import and export business; engaged in real estate development and operation in the land
legally obtained; lease and sales of the self-owned property and property management.” (as for the projects
subject to examination and approval regulated by the state laws, administrative regulations and state council,
approval should be obtained before operation). Business in license: wholesale of prepackaged food (excluding
                                                         79
                                                                      深圳市深粮控股股份有限公司 2019 年半年度报告全文


reheating prepackaged food) (in non-physical way).


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


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


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

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

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


                                                             80
                                                                       深圳市深粮控股股份有限公司 2019 年半年度报告全文


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

                                                               81
                                                                        深圳市深粮控股股份有限公司 2019 年半年度报告全文


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



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




                                                                82
                                                                 深圳市深粮控股股份有限公司 2019 年半年度报告全文


IV. Basis of preparation of financial statements

1. Basis of preparation


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



2. Going concern


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




V. Major accounting policy, accounting estimation

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

                                                         83
                                                                  深圳市深粮控股股份有限公司 2019 年半年度报告全文


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


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


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




1. Statement for observation of Accounting Standard for Enterprise


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



2. Accounting period


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



3. Operating cycle


Operating cycle of the Company was 12 months


                                                         84
                                                                深圳市深粮控股股份有限公司 2019 年半年度报告全文


4. Standard currency


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



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


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


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


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



6. Methods for preparation of consolidated financial statements


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




The Company edits the consolidated financial statements based on its own financial statements and the
subsidiaries’, as well as other relevant information. The consolidated financial statements hold the enterprise
group as a whole accounting entity. It is recognized in accordance with relevant Accounting Standards,
                                                        85
                                                                   深圳市深粮控股股份有限公司 2019 年半年度报告全文


measurement and presentation requirements. Uniform accounting policies reflect the overall financial position of
the Group's business, operating results and cash flow.


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


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


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


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


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



                                                          86
                                                                   深圳市深粮控股股份有限公司 2019 年半年度报告全文


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


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


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


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


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


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

                                                          87
                                                                   深圳市深粮控股股份有限公司 2019 年半年度报告全文


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


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


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


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


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


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


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




                                                           88
                                                                   深圳市深粮控股股份有限公司 2019 年半年度报告全文


8. Recognition standards for cash and cash equivalents


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



9. Foreign currency business and conversion of foreign currency statement



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



10. Financial instruments


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



                                                           89
                                                                    深圳市深粮控股股份有限公司 2019 年半年度报告全文


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


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


(1) Financial assets measured at amortized cost
Financial assets measured at amortized cost include notes receivable, accounts receivable, other receivables,
long-term receivables, and debt investment, which are initially measured at fair value, and related transaction costs
are included in the initial recognition amount. The accounts receivable not including major financing components
and the accounts receivable that the Company decides not to consider the financing component of not more than one
year are initially measured at the contract transaction price.
                                                            90
                                                                     深圳市深粮控股股份有限公司 2019 年半年度报告全文


Interest calculated by the effective interest method during the holding period is included in the current profit and
loss.
When recovering or disposing, the difference between the price obtained and the book value of the financial asset is
included in the current profit and loss.
(2) Financial assets (debt instruments) measured at fair value and whose changes are included in other
comprehensive income
Financial assets (debt instruments) measured at fair value and whose changes are included in other comprehensive
income, including receivables financing, other debt investment, etc., are initially measured at fair value, and related
transaction expenses are included in the initial recognition amount. The financial assets are subsequently measured
at fair value, the changes in fair value are included in other comprehensive income except for interest, impairment
losses or gains and exchange gains and losses calculated by using the effective interest method.
When a financial asset is derecognized, the accumulated gain or loss previously included in other comprehensive
income is transferred from other comprehensive income and included in current profit and loss.
(3) Financial assets (equity instruments) measured at fair value and whose changes are included in other
comprehensive income
Financial assets (equity instruments) measured at fair value and whose changes are included in other comprehensive
income, including other equity instruments, etc., are initially measured at fair value, and related transaction
expenses are included in the initially recognised amount. The financial assets are subsequently measured at fair
value, and changes in fair value are included in other comprehensive income. The dividends obtained are included in
the current profits and losses.
When a financial asset is derecognized, the accumulated gain or loss previously included in other comprehensive
income is transferred from other comprehensive income and included in retained earnings.
(4) Financial assets measured at fair value and whose changes are included in current profit and loss
Financial assets measured at fair value and whose changes are included in current profit and loss, including
transactional financial assets, derivative financial assets and other non-current financial assets, etc., are initially
measured at fair value, and related transaction expenses are included in the initial recognition amount. The financial
assets are subsequently measured at fair value, and changes in fair value are recognised in current profit and loss.
When a financial asset is derecognized, the difference between its fair value and the initially recorded amount is
recognized as investment income, and the gains and losses from changes in fair value are adjusted.
(5) Financial liabilities measured at fair value and whose changes are included in current profit and loss
Financial liabilities measured at fair value and whose changes are included in current profit and loss, including
transaction financial liabilities, derivative financial liabilities, etc., are initially measured at fair value, and related
transaction expenses are included in current profit and loss. The financial liabilities are subsequently measured at
fair value, and changes in fair value are included in current profit and loss.
When a financial liability is derecognized, the difference between its fair value and the initially recorded amount is
recognized as investment income, and the gains and losses from changes in fair value are adjusted.
(6) Financial liabilities measured at amortized cost
Financial liabilities measured at amortized cost, including short-term borrowings, bills payable, accounts payable,

                                                            91
                                                                    深圳市深粮控股股份有限公司 2019 年半年度报告全文


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


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




(3) Account receivable


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


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

                                                              92
                                                                      深圳市深粮控股股份有限公司 2019 年半年度报告全文


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


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


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


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


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




                                                          93
                                                                     深圳市深粮控股股份有限公司 2019 年半年度报告全文


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


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


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


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


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


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


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



                                                            94
                                                                    深圳市深粮控股股份有限公司 2019 年半年度报告全文


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




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


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


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

                                                           95
                                                                      深圳市深粮控股股份有限公司 2019 年半年度报告全文


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


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


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




11. Note receivable

   Same as account receivable


12. Account receivable


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


Recognition criteria on account receivable with single significant amount and withdrawal bad debt provision on single basis:
(1)Account receivable: single account receivable has over 10 million Yuan in amount;
(2) Other account receivable: single other account receivable has over 5 million Yuan in amount.
Accrual method for the bad debt provision of account receivable with single significant amount: Conducted
impairment testing separately, balance between the present value of future cash flow and its carrying value, bad
debt provision withdrawal and reckoned into current gains/losses. For those without impairment being found after
test, collected into relevant combination for accrual.
(ii) Accounts receivable whose bad debts provision was accrued by combination based on credit risk
characteristics portfolio
(1) Recognition criteria on portfolio
                                                             96
                                                                           深圳市深粮控股股份有限公司 2019 年半年度报告全文


Receivables with insignificant single amount are classified into several combinations according to the credit risk
characteristics together with the receivables that are not individually impaired after the individual test and have
significant single amount, and the provision for bad debts that should be accrued is determined according to the
actual loss rate of the collection of receivables combination with credit risk characteristics similar to previous
years and combined with the current situation.


Basis for determining the portfolio:

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



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

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



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


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


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


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




                                                                97
                                                                        深圳市深粮控股股份有限公司 2019 年半年度报告全文


13. Account receivable financing

  Nil


14. Other account receivable


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


15. Inventory


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

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


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


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

                                                               98
                                                                深圳市深粮控股股份有限公司 2019 年半年度报告全文


balance sheet date.


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



16. Contract assets


   Nil


17. Contract cost


18. Assets held for sale


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




19. Creditors’ investment


    Nil


20. Other creditors’ investment


    Nil


21. Long-term account receivable


    Nil




                                                        99
                                                                    深圳市深粮控股股份有限公司 2019 年半年度报告全文


22. Long-term equity investment


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


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


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


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


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


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

                                                          100
                                                                     深圳市深粮控股股份有限公司 2019 年半年度报告全文


securities shall be viewed as initial investment cost


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


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


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


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


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

                                                           101
                                                                   深圳市深粮控股股份有限公司 2019 年半年度报告全文


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




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




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


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


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


If the joint control or significant influence on the investee is lost due to the disposal of part of the equity
investment, etc., the remaining equity after disposal shall be accounted for according to the recognition and
measurement standard of financial instruments, and the difference between the fair value and the book value of
                                                         102
                                                                   深圳市深粮控股股份有限公司 2019 年半年度报告全文


the day losing the joint control or significant impact is included in the current profit and loss. For other
comprehensive income as recognized under equity method in respect of the original equity investment, when the
Company ceases calculation under equity method, the aforesaid income shall be accounted for on the same basis
as the investee would otherwise adopt when it directly disposes relevant assets or liabilities. The owner's equity
recognized as a result of changes in the owner's equity other than the net profit or loss, other comprehensive
income and profit distribution of the investee is carried forward to the current profit and loss when the equity
method is terminated to be used for business accounting.


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




23. Investment real estate


Measurement
Measured by cost
Depreciation or amortization method


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


Current investment real estate of the Company are measured by cost. As for the investment real estate-rental
building measured by cost, the depreciation policy is same as the fixed assets of the Company, the land use right
                                                          103
                                                                        深圳市深粮控股股份有限公司 2019 年半年度报告全文


for rental has the same amortization policy as intangible assets.


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




24. Fixed asset


(1)Recognition


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




(2) Depreciation methods


         Category                 Method             Years of depreciation       Scrap value rate   Yearly depreciation rate

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

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

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

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

Gas storage bin          Straight-line depreciation 20                       5                      4.75

Silo                     Straight-line depreciation 50                       5                      1.9

Wharf and supporting
                         Straight-line depreciation 50                       5                      1.9
facilities

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

Warehouse transmission
                         Straight-line depreciation 20                       5                      4.75
equipment

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

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

                                                              104
                                                                 深圳市深粮控股股份有限公司 2019 年半年度报告全文


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




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


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




25. Construction in progress



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



26. Borrowing expenses


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


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



                                                          105
                                                                  深圳市深粮控股股份有限公司 2019 年半年度报告全文


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


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


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


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


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


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

                                                         106
                                                                   深圳市深粮控股股份有限公司 2019 年半年度报告全文


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



27. Biological assets


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


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


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


                                                            107
                                                                    深圳市深粮控股股份有限公司 2019 年半年度报告全文


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


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


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



28. Oil and gas assets

   Nil


29. Right-of-use assets


   Nil


30. Intangible assets


(1) Measurement, use of life and impairment testing


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


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

                                                           108
                                                                      深圳市深粮控股股份有限公司 2019 年半年度报告全文


recorded in current gains and losses.


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


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


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



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


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


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

                                                           109
                                                                   深圳市深粮控股股份有限公司 2019 年半年度报告全文


technology knowledge obtained and understanding.


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


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



31. Impairment of long term assets


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


Goodwill and intangible asset with an indefinite useful life are tested for impairment at least at the end of each year.
When the Company conducts the goodwill impairment test, the book value of goodwill formed by business
combination is apportioned to the relevant asset group according to reasonable methods from the date of purchase; if
it is difficult to apportion it to the relevant asset group, apportion it to the relevant asset group portfolio. When the
                                                          110
                                                                   深圳市深粮控股股份有限公司 2019 年半年度报告全文


book value of goodwill is apportioned to the relevant asset group or asset group portfolio, it is apportioned
according to the proportion of the fair value of each asset group or asset group portfolio in the total fair value of the
relevant asset group or asset group portfolio. If the fair value is difficult to be reliably measured, it is apportioned
according to the proportion of the book value of each asset group or asset group portfolio in the total book value of
the relevant asset group or asset group portfolio.


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




32. Long term prepaid expense


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



33. Contract liability


   Nil


34. Staff remuneration


(1) Short term remuneration


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


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


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

                                                           111
                                                                        深圳市深粮控股股份有限公司 2019 年半年度报告全文


value.


(2) Accounting treatment for post office benefits


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


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




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


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

                                                            112
                                                                   深圳市深粮控股股份有限公司 2019 年半年度报告全文


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



(3) Accounting treatment for dismissal benefit




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



(4) Accounting treatment for other long term staff benefits


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


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



35. Lease liability

   Nil


36. Accrual liability


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


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


(ii) Measurement




                                                          113
                                                                    深圳市深粮控股股份有限公司 2019 年半年度报告全文


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


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


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


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


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



37. Share-based payment


   Nil


38. Other financial instrument of preferred stocks and perpetual bond



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

                                                           114
                                                                        深圳市深粮控股股份有限公司 2019 年半年度报告全文


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



39. Revenue


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

(i) Sales of goods


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


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

                                                              115
                                                                  深圳市深粮控股股份有限公司 2019 年半年度报告全文


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


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


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



40. Government Grants


(i) Types
Governments grants of the Company refer to the monetary and non-monetary assets obtained from government
                                                         116
                                                                   深圳市深粮控股股份有限公司 2019 年半年度报告全文


for free, and are divided into those related to assets and others related to revenues.


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


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


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


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


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

                                                          117
                                                                    深圳市深粮控股股份有限公司 2019 年半年度报告全文


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




41. Deferred income tax assets and deferred income tax liabilities


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


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


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




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


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




                                                           118
                                                                  深圳市深粮控股股份有限公司 2019 年半年度报告全文


42. Lease


(1) Accounting treatment for operating lease


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


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


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


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



(2) Accounting treatment for financing lease


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


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


(ii) Finance leased assets: on the lease commencement date, the company affirms the balance among the finance
lease receivables, the sum of unguaranteed residual value and its present value as the unrealized financing income,
and recognizes it as the rental income during the period of receiving the rent. For the initial direct costs related to
the rental transaction, the company reckons in the initial measurement of the finance lease receivables, and
reduces the amount of income confirmed in the lease term.
                                                         119
                                                                  深圳市深粮控股股份有限公司 2019 年半年度报告全文




43. Other important accounting policy and estimation


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



44. Changes of important accounting policy and estimation


(1)Changes of major accounting policies


□ Applicable √Not applicable


(2) Changes of important accounting estimate


□ Applicable √Not applicable


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


√ Applicable □Not applicable
Consolidate balance sheet

                                                                                                          In RMB/CNY

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

Current assets:

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

     Settlement provisions

     Capital lent

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

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

                                                            120
                                                        深圳市深粮控股股份有限公司 2019 年半年度报告全文


current gains/losses

     Derivative financial
assets

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

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

     Account receivable
financing

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

     Insurance receivable

     Reinsurance receivables

     Contract reserve of
reinsurance receivable

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

         Including: Interest
                                                                 561,500.00
receivable

                Dividend
receivable

     Buying back the sale of
financial assets

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

     Contract assets

     Assets held for sale

     Non-current asset due
within one year

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

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

Non-current assets:

     Loans and payments on
behalf

     Creditors’ investment

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

     Other creditors’
investment

     Held-to-maturity

                                                  121
                                                            深圳市深粮控股股份有限公司 2019 年半年度报告全文


investment

        Long-term account
receivable

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

        Other equity instrument
investment

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

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

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

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

        Productive biological
                                        407,078.92                   407,078.92
asset

        Oil and gas asset

        Right-of-use asset

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

        Expense on Research
and Development

        Goodwill

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

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

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

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

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

Current liabilities:

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

        Loan from central bank

        Capital borrowed

        Tradable financial
liability

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

                                                      122
                                                           深圳市深粮控股股份有限公司 2019 年半年度报告全文


     Derivative financial
liability

     Note payable

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

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

     Selling financial asset of
repurchase

     Absorbing deposit and
interbank deposit
     Security trading of
agency

     Security sales of agency

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

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

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

          Including: Interest
payable

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

     Reinsurance payable

     Contract liability

     Liability held for sale

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

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

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

Non-current liabilities:

     Insurance contract
reserve

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

     Bonds payable

          Including: preferred
stock

                 Perpetual

                                                     123
                                                          深圳市深粮控股股份有限公司 2019 年半年度报告全文


capital securities

     Lease liability

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

     Long-term wage
payable

     Accrual liabilities

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

     Deferred income tax
                                   12,988,434.77                 12,988,434.77
liabilities

     Other non-current
liabilities

Total non-current liabilities     645,974,631.52                645,974,631.52

Total liabilities                2,131,352,962.29             2,131,352,962.29

Owners’ equity:

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

     Other equity instrument

         Including: preferred
stock

                    Perpetual
capital securities

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

     Less: Inventory shares

     Other comprehensive
income

     Reasonable reserve                   154.21                       154.21

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

     Provision of general risk

     Retained profit             1,269,933,487.26             1,269,933,487.26

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

     Minority interests           165,096,296.47                165,096,296.47

Total owner’s equity            4,337,598,831.58             4,337,598,831.58

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

Explanation on adjustment
                                                    124
                                                              深圳市深粮控股股份有限公司 2019 年半年度报告全文




Balance sheet of parent company

                                                                                                  In RMB/CNY

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

Current assets:

     Monetary funds                    168,900,586.84               168,900,586.84

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

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

     Derivative financial
assets

     Note receivable

     Account receivable                 42,441,119.07                42,441,119.07

     Account receivable
financing

     Accounts paid in
advance

     Other account
                                       159,677,969.59               159,677,969.59
receivable

         Including: Interest
receivable

                  Dividend
receivable

     Inventories                         8,806,338.26

     Contract assets

     Assets held for sale

     Non-current asset due
within one year

     Other current assets               50,068,745.74                50,068,745.74

Total current assets                   431,019,687.46               431,019,687.46

Non-current assets:

     Creditors’ investment

     Available-for-sale
financial assets

     Other creditors’

                                                        125
                                                            深圳市深粮控股股份有限公司 2019 年半年度报告全文


investment

        Held-to-maturity
investment

        Long-term account
receivable

        Long-term equity
                                   4,212,554,063.36             4,212,554,063.36
investment

        Other equity instrument
investment

        Other non-current
financial assets

        Investment real estate       17,929,684.70                 17,929,684.70

        Fixed assets                 31,417,912.54                 31,417,912.54

        Construction in progress

        Productive biological
                                        407,078.92                   407,078.92
asset

        Oil and gas asset

        Right-of-use asset

        Intangible assets             6,663,692.30                  6,663,692.30

        Expense on Research
and Development

        Goodwill

        Long-term expenses to
                                        409,621.50                   409,621.50
be apportioned

        Deferred income tax
                                      5,630,538.80                  5,630,538.80
asset

        Other non-current asset

Total non-current asset            4,275,012,592.12             4,275,012,592.12

Total assets                       4,706,032,279.58             4,706,032,279.58

Current liabilities:

        Short-term loans

        Tradable financial
liability

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


                                                      126
                                                        深圳市深粮控股股份有限公司 2019 年半年度报告全文


     Derivative financial
liability

     Note payable

     Account payable              73,705,646.54                73,705,646.54

     Accounts received in
                                    124,945.74                   124,945.74
advance

     Contract liability

     Wage payable                  6,448,561.16                 6,448,561.16

     Taxes payable                 2,702,655.24                 2,702,655.24

     Other account payable       232,109,084.76               232,109,084.76

        Including: Interest
payable

                Dividend
payable

     Liability held for sale

     Non-current liabilities
due within one year

     Other current liabilities

Total current liabilities        315,090,893.44               315,090,893.44

Non-current liabilities:

     Long-term loans

     Bonds payable

        Including: preferred
stock

                Perpetual
capital securities

     Lease liability

     Long-term account
payable

     Long-term wage
payable

     Accrual liabilities

     Deferred income                  46,129.96                    46,129.96

     Deferred income tax
                                      10,965.46                    10,965.46
liabilities

     Other non-current
liabilities

                                                  127
                                                                  深圳市深粮控股股份有限公司 2019 年半年度报告全文


Total non-current liabilities                 57,095.42                             57,095.42

Total liabilities                       315,147,988.86                       315,147,988.86

Owners’ equity:

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

      Other equity instrument

         Including: preferred
stock

                    Perpetual
capital securities

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

      Less: Inventory shares

      Other comprehensive
income

      Reasonable reserve

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

      Retained profit                   165,505,986.31                       165,505,986.31
Total owners’ equity                 4,390,884,290.72                  4,390,884,290.72
Total liabilities and owner’s
                                      4,706,032,279.58                  4,706,032,279.58
equity

Explanation on adjustment


(4) Retrospective adjustment of early comparison data description when initially implemented the new
financial instrument standards and new leasing standards

□ Applicable √Not applicable


45. Other

VI. Taxes

1. Type of tax and rate for main applicable tax


                       Taxes                           Basis                                        Rate
                                    The output tax is calculated on the basis of
                                    the sales of goods and the taxable service
                                    income calculated according to the tax law.
VAT                                                                                 16%, 10%, 6%, 5%, 3%
                                    After deducting the input tax amount that
                                    is allowed to be deducted in the current
                                    period,   the   difference   part   is    the


                                                          128
                                                                           深圳市深粮控股股份有限公司 2019 年半年度报告全文


                                         value-added tax payable.



Urban maintenance and construction tax   Turnover tax payable                         7%, 5%

Enterprise income tax                    Taxable income                               25%, 15%, 0%

Educational surtax                       Turnover tax payable                         5%



Rate of enterprise income tax for different taxpaying body:
                        Taxpaying body                                                  Income tax rate

The Company                                                     25%

Shenbao Huacheng                                                15%

Including: Shantou Branch of Shenbao Huacheng                   25%

Wuyuan Ju Fang Yong                                             15%

Shenbao Sanjing                                                 25%

Huizhou Shenbao Technology                                      25%

Huizhou Shenbao Food        &e