亚钾国际投资（广州）股份有限公司 2020 年第三季度报告全文 亚钾国际投资（广州）股份有限公司 2020 年第三季度报告 2020-065 2020 年 10 月 1 亚钾国际投资（广州）股份有限公司 2020 年第三季度报告全文 第一节 重要提示 公司董事会、监事会及董事、监事、高级管理人员保证季度报告内容的真 实、准确、完整，不存在虚假记载、误导性陈述或重大遗漏，并承担个别和连 带的法律责任。 所有董事均已出席了审议本次季报的董事会会议。 公司负责人郭柏春、主管会计工作负责人苏学军及会计机构负责人(会计主 管人员)苏学军声明：保证季度报告中财务报表的真实、准确、完整。 2 亚钾国际投资（广州）股份有限公司 2020 年第三季度报告全文 第二节 公司基本情况 一、主要会计数据和财务指标 公司是否需追溯调整或重述以前年度会计数据 | --- | --- | --- | --- | --- | |-----------------------------------------------------|------------------|-------------------------|--------- ...

Important Notice [Statement by the Board of Directors and Supervisory Board](index=2&type=section&id=Statement%20by%20the%20Board%20of%20Directors%20and%20Supervisory%20Board) The Board of Directors, Supervisory Board, and senior management affirm the report's truthfulness, accuracy, and completeness, with all directors present for the review - The company's Board of Directors, Supervisory Board, and all directors, supervisors, and senior management guarantee the report's content is **true, accurate, and complete**, free from false records, misleading statements, or major omissions[3](index=3&type=chunk) - The company's principal officer, the person in charge of accounting, and the head of the accounting department all declare that the financial statements in the quarterly report are **true, accurate, and complete**[3](index=3&type=chunk) Company Profile [Key Accounting Data and Financial Indicators](index=3&type=section&id=I.%20Key%20Accounting%20Data%20and%20Financial%20Indicators) In Q1 2020, operating revenue decreased by **20.18%** to **CNY 81.22 million**, while net profit attributable to shareholders surged by **181.64%** to **CNY 4.12 million**, and operating cash flow improved significantly from a net outflow to a net inflow of **CNY 17.56 million** | Indicator | Current Period | Prior Year (Adjusted) | YoY Change | | :--- | :--- | :--- | :--- | | **Operating Revenue (CNY)** | 81,222,250.93 | 101,759,069.54 | -20.18% | | **Net Profit Attributable to Shareholders (CNY)** | 4,121,915.14 | 1,463,527.24 | 181.64% | | **Net Profit Attributable to Shareholders (Excl. Non-recurring Items) (CNY)** | 4,088,313.66 | 847,549.43 | 382.37% | | **Net Cash Flow from Operating Activities (CNY)** | 17,559,724.72 | -33,670,971.42 | 152.15% | | **Basic Earnings Per Share (CNY/share)** | 0.0054 | 0.0019 | 184.21% | | **Weighted Average Return on Net Assets** | 0.11% | 0.04% | Increased by 0.07 percentage points | | **Total Assets (CNY)** | 4,193,753,165.05 | - | -0.60% (vs. End of Prior Year) | | **Net Assets Attributable to Shareholders (CNY)** | 3,657,295,033.60 | - | 0.10% (vs. End of Prior Year) | - The company performed accounting error corrections and retrospectively adjusted relevant financial statement data due to non-compliant intangible asset amortization methods in prior periods[5](index=5&type=chunk) [Non-recurring Gains and Losses Items and Amounts](index=3&type=section&id=Non-recurring%20Gains%20and%20Losses%20Items%20and%20Amounts) During the reporting period, total non-recurring gains and losses amounted to **CNY 33,601.48**, primarily from government subsidies and other non-operating income from scrap material sales | Item | Amount (CNY) | Description | | :--- | :--- | :--- | | Government Subsidies Included in Current Profit/Loss | 17,247.19 | Mainly unemployment insurance stabilization subsidies received by the company | | Other Non-operating Income and Expenses | 27,956.05 | Mainly from the sale of scrap materials in the current period | | Less: Income Tax Impact | 9,784.62 | - | | Less: Impact on Minority Interests (After Tax) | 1,817.14 | - | | **Total** | **33,601.48** | - | [Shareholder Information](index=4&type=section&id=II.%20Shareholder%20Information%20at%20Period-End%20and%20Top%20Ten%20Shareholders%27%20Holdings) As of the reporting period end, the company had **16,479** common shareholders, with the top three holding significant stakes, and notable share pledges, freezes, and related party relationships among major shareholders - At the end of the reporting period, the company had a total of **16,479** common shareholders[8](index=8&type=chunk) - Guangzhou Dongling Industrial and Mudanjiang Guofu Investment are parties acting in concert; Xinjiang Jiangzhiyuan and Shanghai Kaili Tianren are controlled by the same ultimate beneficial owner[9](index=9&type=chunk)[12](index=12&type=chunk) | Shareholder Name | Shareholding Percentage | Share Status | | :--- | :--- | :--- | | China Agricultural Means of Production Group Co., Ltd. | 19.15% | Frozen, Pledged | | Guangzhou Dongling Industrial Investment Group Co., Ltd. | 11.05% | Pledged | | Mudanjiang Guofu Investment Center (Limited Partnership) | 11.05% | - | | Xinjiang Jiangzhiyuan Equity Investment Partnership (Limited Partnership) | 7.94% | Frozen, Pledged | Significant Events [Analysis of Major Financial Data Changes](index=7&type=section&id=I.%20Analysis%20of%20Major%20Financial%20Data%20Changes%20and%20Reasons) During the reporting period, the company experienced significant financial changes, including reduced accounts receivable and contract liabilities, decreased operating revenue due to trade business, lower financial expenses, and a positive shift in operating cash flow | Consolidated Balance Sheet Item | Change Rate | Primary Reason | | :--- | :--- | :--- | | Accounts Receivable | -54.41% | Due to collection of accounts receivable from potash business | | Contract Liabilities | -76.00% | Due to decrease in advance receipts for goods | | Employee Compensation Payable | -49.17% | Due to payment of employee compensation accrued at period-beginning | | Consolidated Income Statement Item | Change Rate | Primary Reason | | :--- | :--- | :--- | | Operating Revenue | -20.18% | Due to decrease in trade business revenue | | Financial Expenses | -131.39% | Due to increase in interest income | | Asset Impairment Losses | 100.00% | No inventory impairment losses recognized in current period | | Investment Income | -100.00% | Due to no wealth management activities in current period | | Consolidated Cash Flow Statement Item | Change Rate | Primary Reason | | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 152.15% | Increase in sales collection, decrease in procurement expenditure | | Net Cash Flow from Investing Activities | -103.72% | Due to no wealth management activities in current period | [Progress of Significant Events](index=8&type=section&id=II.%20Progress%20of%20Significant%20Events%20and%20Analysis%20of%20Impact%20and%20Solutions) This section details the ongoing complex legal disputes stemming from the 2015 acquisition of Zhongnong Potash, primarily concerning unfulfilled performance commitments, compensation obligations, and related issues impacting board governance and restricted share解除 [Zhongnong Potash Major Asset Restructuring and Subsequent Disputes](index=8&type=section&id=1.%20Issuance%20of%20Shares%20to%20Purchase%20Assets%20and%20Raise%20Supporting%20Funds%20for%20Related%20Transactions%20-%20Progress%20on%20Zhongnong%20Potash%20Matter) The company details complex legal disputes arising from the 2014 Zhongnong Potash acquisition, including unfulfilled 2017 performance commitments by ten parties, leading to ongoing lawsuits for performance compensation and a successful first-instance ruling against a defaulting subscriber for supporting funds, now under appeal - The core of the dispute is Zhongnong International's failure to meet its **2017 performance commitment**, with the ten transaction parties (including China Agricultural Group) yet to fulfill their compensation obligations[40](index=40&type=chunk)[51](index=51&type=chunk) - The company has filed a lawsuit regarding the performance compensation dispute with the Beijing High People's Court, and the case is currently **under trial** with no judgment yet rendered[23](index=23&type=chunk)[35](index=35&type=chunk)[52](index=52&type=chunk) - The company sued Dongling Industrial for defaulting on supporting fund subscriptions, with the Guangdong High Court ruling in the first instance that Dongling Industrial pay **CNY 103 million** in liquidated damages, though Dongling Industrial has appealed to the Supreme People's Court[21](index=21&type=chunk)[37](index=37&type=chunk)[38](index=38&type=chunk) [Explanation Regarding Restricted Shares Not Yet Listed for Circulation](index=16&type=section&id=2.%20Explanation%20Regarding%20Restricted%20Shares%20Not%20Yet%20Listed%20for%20Circulation) Due to the failure of ten transaction parties, including China Agricultural Group, to meet 2017 performance commitments and fulfill compensation obligations, their **353,448,272** restricted shares remain unlisted, pending resolution of ongoing compensation disputes - The transaction parties, having failed to meet their **2017 performance commitment**, are required to compensate the company with **117,400,934 shares** and **CNY 247 million** in cash, but have not yet fulfilled this obligation[40](index=40&type=chunk) - Given the unfulfilled performance compensation obligations and ongoing litigation, the company will not apply for the lifting of restrictions on the **353 million** restricted shares held by the transaction parties[41](index=41&type=chunk) [Overdue Unfulfilled Commitments](index=23&type=section&id=III.%20Overdue%20Unfulfilled%20Commitments%20by%20Controlling%20Shareholders%2C%20Shareholders%2C%20Related%20Parties%2C%20Acquirers%2C%20and%20the%20Company) During the reporting period, the company faced multiple overdue unfulfilled commitments related to a major asset restructuring, primarily involving ten transaction parties' failure to meet performance compensation, related parties' joint liability for failed fundraising, and core management's breach of service and non-compete agreements | Promising Party | Commitment Type | Fulfillment Status | | :--- | :--- | :--- | | China Agricultural Group and Ten Other Transaction Parties | Performance Commitment and Compensation Arrangement | 2017 performance commitment unfulfilled, compensation obligations not met, company has filed a lawsuit | | Guangzhou Huishan Investment Co., Ltd. and Others | Other Commitments (Guarantees for Supporting Funds) | Fund subscribers defaulted, related parties bear joint and several liability for breach | | Bai Ming, Huang Lu, and Other Core Management Personnel | Other Commitments (Service Period and Non-Compete) | Some personnel resigned early without company consent and joined affiliated companies, breaching commitments | - The company has filed a lawsuit against China Agricultural Group and other transaction parties for unfulfilled performance compensation commitments, with the case still **under trial**[52](index=52&type=chunk) [Securities Investment](index=27&type=section&id=IV.%20Securities%20Investment) The company had no securities investments during the reporting period - During the reporting period, the company made **no securities investments**[53](index=53&type=chunk) [Wealth Management](index=28&type=section&id=V.%20Wealth%20Management) The company had no entrusted wealth management activities during the reporting period - During the reporting period, the company had **no entrusted wealth management business**[54](index=54&type=chunk) [Derivative Investments](index=28&type=section&id=VI.%20Derivative%20Investments) The company had no derivative investments during the reporting period - During the reporting period, the company made **no derivative investments**[54](index=54&type=chunk) [Investor Relations Activities](index=28&type=section&id=VII.%20Registration%20Form%20for%20Research%2C%20Communication%2C%20Interview%20Activities%20in%20the%20Reporting%20Period) During Q1 2020, the company engaged with individual investors through telephone communication - From January 1 to March 31, 2020, the company communicated with individual investors via **telephone**[54](index=54&type=chunk) [Illegal External Guarantees](index=28&type=section&id=VIII.%20Illegal%20External%20Guarantees) The company had no illegal external guarantees during the reporting period - During the reporting period, the company had **no illegal external guarantees**[55](index=55&type=chunk) [Controlling Shareholder Fund Occupation](index=28&type=section&id=IX.%20Non-Operating%20Fund%20Occupation%20by%20Controlling%20Shareholders%20and%20Related%20Parties) The company had no non-operating fund occupation by controlling shareholders or their related parties during the reporting period - During the reporting period, there was **no non-operating fund occupation** by controlling shareholders or their related parties[55](index=55&type=chunk) Financial Statements [Financial Statements](index=29&type=section&id=I.%20Financial%20Statements) This section provides the consolidated and parent company balance sheets as of March 31, 2020, and the consolidated and parent company income and cash flow statements for Q1 2020 - Includes consolidated balance sheet and parent company balance sheet[56](index=56&type=chunk)[61](index=61&type=chunk) - Includes consolidated income statement and parent company income statement[63](index=63&type=chunk)[67](index=67&type=chunk) - Includes consolidated cash flow statement and parent company cash flow statement[69](index=69&type=chunk)[73](index=73&type=chunk) [Explanation of Financial Statement Adjustments](index=43&type=section&id=II.%20Explanation%20of%20Financial%20Statement%20Adjustments) Effective January 1, 2020, the company adopted new revenue recognition standards, reclassifying **CNY 17,430,309.37** from 'Advance Receipts' to 'Contract Liabilities' on the initial adoption date, with no impact on opening retained earnings - The company first adopted new revenue recognition standards in **2020**, adjusting relevant financial statement items at the beginning of the year[75](index=75&type=chunk) | Adjusted Item | Before Adjustment (2019-12-31) | After Adjustment (2020-01-01) | Adjustment Amount | | :--- | :--- | :--- | :--- | | Advance Receipts | 17,430,309.37 | 0.00 | -17,430,309.37 | | Contract Liabilities | 0.00 | 17,430,309.37 | 17,430,309.37 | [Audit Report](index=46&type=section&id=III.%20Audit%20Report) The company's Q1 2020 report is unaudited - This quarterly report is **unaudited**[79](index=79&type=chunk)

Corporate Governance and Structure - The company’s legal representative is Guo Baichun[12]. - The company’s board secretary is Zhao Qing, and the securities affairs representative is Hua Shunyang[13]. - The company completed the deregistration of its wholly-owned subsidiary, Beijing Dongling New Technology Investment Co., Ltd., in February 2019[61]. - The company has established a long-term cooperative relationship with the Lao government, which supports the potassium salt project as a key area of resource cooperation[42]. - The company has committed to fulfilling performance commitments, and if the actual net profit falls below the agreed amount, compensation obligations will be executed as per the signed agreement[125]. - The company has retained Zhongqi Wanxin Accounting Firm for three consecutive years, with an audit fee of RMB 0.95 million for the current period[160]. - The company held one shareholders' meeting in 2019, ensuring the protection of shareholders' rights through a combination of on-site and online voting[183]. Financial Performance - In 2019, the company's operating revenue reached CNY 605,438,216.50, representing a 43.80% increase compared to CNY 421,023,245.50 in 2018[17]. - The net profit attributable to shareholders was CNY 41,435,599.36, a significant increase of 935.13% from CNY 3,141,902.19 in the previous year[17]. - The total operating revenue for 2019 was CNY 605,438,216.50, representing a 43.80% increase from CNY 421,023,245.54 in 2018[53]. - The potassium fertilizer segment generated CNY 443,039,673.49, accounting for 73.18% of total revenue, with a year-on-year growth of 38.03%[53]. - The trade segment saw a significant increase in revenue to CNY 161,526,575.31, up 101.46% from CNY 80,179,206.11 in 2018[53]. - The company reported a significant increase in the net profit after deducting non-recurring gains and losses, reaching CNY 33,924,325.81, a 6,756.03% increase from a loss of CNY 1,370,718.60 in 2018[17]. - The company achieved a production and sales ratio of 99.59% in 2019, indicating efficient operations, but faces challenges due to limited potassium salt mining scale and insufficient production capacity[94]. Market and Operations - The company underwent a change in its main business focus, shifting to potassium fertilizer operations and grain trading as of 2019[16]. - The company produced 246,900 tons of qualified potassium fertilizer in 2019, with sales reaching 245,900 tons, indicating strong market demand and operational efficiency[29]. - The company is actively advancing a 1 million tons/year potassium salt mining and processing project, which is expected to enhance profitability and core competitiveness upon completion[29]. - The company plans to exit the grain trading business to focus on potassium mining and fertilizer production, consolidating resources for better operational efficiency[28]. - The company’s potassium fertilizer sales are primarily targeted at Southeast Asian markets, with significant sales in Vietnam and Indonesia, expanding its global market influence[32]. - The company is focusing on expanding its market share in Southeast Asia, which is known for high potassium fertilizer prices, leveraging its geographical advantages[93]. Cash Flow and Investments - The net cash flow from operating activities was CNY 80,456,810.66, reflecting a 91.37% increase from CNY 42,042,406.27 in 2018[17]. - The company reported a net cash flow from investment activities improved by 159.41% to ¥245,696,972.42, reflecting increased redemptions of financial products[66]. - The company plans to invest 400 million RMB in expanding the Laos potash project, increasing the registered capital of Zhongnong International to 930.56 million RMB[85]. - The company is facing financial risks due to the increasing funding needs for its 1 million ton potassium fertilizer expansion project in Laos, which may be affected by exchange rate fluctuations[104]. Legal and Compliance Issues - The company is involved in a lawsuit regarding a cash compensation dispute amounting to 247.05 million RMB, which is currently under trial in the Beijing High People's Court[162]. - The company has initiated legal proceedings against several parties regarding disputes related to the non-public issuance of shares for the acquisition of 100% equity in Zhongnong International Potash Development Co., Ltd.[193]. - The company is currently unable to determine the impact of ongoing litigation on its financial performance for the current and future periods[162]. - The company has reported that mediation efforts regarding disputes with China Agricultural Group are still ongoing, with no specific resolution reached yet[162]. Risk Management - The company has established a risk management strategy for derivative trading to mitigate market volatility impacts on operational efficiency[79]. - The company is committed to maintaining production safety and has implemented various measures to ensure that operations are not affected by the COVID-19 pandemic[50]. - The company has committed to ensuring that no insider trading occurs related to the major asset restructuring[123]. Dividend Policy - The company reported a plan not to distribute cash dividends, issue bonus shares, or increase capital from reserves[5]. - The company has not proposed any cash dividend distribution plan despite having a positive profit available for distribution to ordinary shareholders in 2019[116]. - The company’s cash dividend policy emphasizes a sustainable and stable return to shareholders, with a minimum cash dividend of 30% of the average distributable profit over the last three years[108]. - The company has not distributed any cash dividends in the past three years, with the total cash dividend amount for 2019 being 0.00[116]. Strategic Initiatives - The company is investing 200 million RMB in R&D for new technologies aimed at enhancing product efficiency and sustainability[136]. - A strategic partnership was established with a leading agricultural firm, expected to generate an additional 100 million RMB in revenue over the next two years[136]. - The company is exploring potential acquisitions to further enhance its product portfolio and market presence[135].

[Important Notice, Table of Contents and Definitions](index=2&type=section&id=Important%20Notice%2C%20Table%20of%20Contents%20and%20Definitions) This section provides essential disclaimers, the report's table of contents, and definitions of key terms - The company's board of directors, supervisory board, and senior management guarantee the report's content, but directors Liu Jinhong, Wu Yi, and Liu Guochang **cannot guarantee** the truthfulness, accuracy, and completeness of the report's content, urging investors to pay **special attention**[2](index=2&type=chunk) - The company plans **not to distribute** cash dividends, **not to issue** bonus shares, or **not to convert** capital reserves into share capital for the 2018 fiscal year[2](index=2&type=chunk) [Company Profile and Key Financial Indicators](index=5&type=section&id=Company%20Profile%20and%20Key%20Financial%20Indicators) This section introduces the company's basic information, its business evolution, and presents key financial data and indicators [Company Basic Information](index=5&type=section&id=Company%20Basic%20Information) This chapter provides the company's basic business registration information, including stock abbreviation, code, full names, legal representative, and addresses Company Basic Information Details | Item | Content | | :--- | :--- | | Stock Abbreviation | *ST Dongling | | Stock Code | 000893 | | Full Chinese Name | 广州东凌国际投资股份有限公司 | | Full English Name | DONLINKS INTERNATIONAL INVESTMENT CO., LTD. | | Legal Representative | 赖宁昌 | [Registration Changes and Evolution of Main Business](index=6&type=section&id=Registration%20Changes%20and%20Evolution%20of%20Main%20Business) The company's main business has evolved from refrigerator compressors to vegetable oil processing, and currently to potash fertilizer operations and grain trading, with the controlling shareholder changing to Guangzhou Dongling Industrial Investment Group Co., Ltd. since 2006 - The company's main business underwent **significant change** in 2015, **acquired** Zhongnong Potash assets and **divested** grain and oil processing and sales assets, with current main businesses being potash fertilizer operations and grain trading[8](index=8&type=chunk) [Key Accounting Data and Financial Indicators](index=7&type=section&id=Key%20Accounting%20Data%20and%20Financial%20Indicators) In 2018, operating revenue significantly decreased by **72.59%**, but net profit attributable to shareholders **turned profitable** with a **100.58%** increase due to prior year's asset impairment, while operating cash flow grew by **191.45%**, and prior accounting errors were retrospectively adjusted, primarily involving potash mining rights revaluation and amortization method changes to resolve the 2017 audit opinion Annual Financial Performance Summary | Indicator | 2018 | 2017 (Adjusted) | YoY Change (Adjusted) | | :--- | :--- | :--- | :--- | | Operating Revenue (CNY) | 421,023,245.54 | 1,535,770,294.27 | -72.59% | | Net Profit Attributable to Shareholders (CNY) | 4,002,942.47 | -687,438,014.02 | 100.58% | | Net Cash Flow from Operating Activities (CNY) | 42,042,406.27 | 14,425,310.23 | 191.45% | | Basic Earnings Per Share (CNY/share) | 0.0053 | -0.9082 | 100.58% | | Total Assets (CNY) | 4,223,915,770.60 | 4,237,477,506.74 | -0.32% | | Net Assets Attributable to Shareholders (CNY) | 3,612,381,917.80 | 3,609,094,771.72 | 0.09% | - The company retrospectively adjusted prior accounting data due to re-evaluation and recognition of Zhongnong Potash mining rights value and impairment, and correction of non-compliant intangible asset amortization methods to the output method[11](index=11&type=chunk) Quarterly Financial Performance | Quarter | Operating Revenue (CNY) | Net Profit Attributable to Shareholders (CNY) | | :--- | :--- | :--- | | 第一季度 | 85,742,732.41 | -7,859,126.03 | | 第二季度 | 89,085,551.83 | 2,655,129.66 | | 第三季度 | 129,686,540.89 | 4,434,058.50 | | 第四季度 | 116,508,420.41 | 4,772,880.34 | [Company Business Overview](index=10&type=section&id=Company%20Business%20Overview) This section outlines the company's main business activities, significant asset changes, and analyzes its core competitive advantages [Main Business](index=10&type=section&id=Main%20Business) The company's 2018 main business comprised two segments: potash salt mining, potash fertilizer production and sales, and grain trading, with the Laos potash project increasing capacity, producing **221 thousand tons** and selling **191.2 thousand tons** of potash fertilizer in 2018, primarily to Southeast Asia, while grain trading focused on importing feed raw materials like corn, sorghum, and barley for distribution in southern China - Potash fertilizer business: Subsidiary Zhongnong International holds a **35 square kilometers** potash salt mining right in Khammouane Province, Laos, with total reserves of **1.002 billion tons**; in 2018, **221 thousand tons** of potash fertilizer were produced and **191.2 thousand tons** sold, with main markets in Vietnam, Thailand, Laos, and other Southeast Asian countries[17](index=17&type=chunk) - Grain trading business: Primarily imports corn, sorghum, barley, and other grain feed raw materials, as well as rapeseed meal, sunflower meal, and other protein feed raw materials, supplying feed mills and other end-users in the southern regions of China[18](index=18&type=chunk) [Significant Changes in Major Assets](index=10&type=section&id=Significant%20Changes%20in%20Major%20Assets) During the reporting period, the company's major assets, including equity, fixed assets, and intangible assets, showed no significant changes, with construction in progress primarily involving underground mining tunnel construction for the **500 thousand tons** experimental potash salt expansion project, and overseas asset Zhongnong Hong Kong (holding Zhongnong Potash) accounting for **26.14%** of the company's net assets with no significant impairment risk - Construction in progress primarily involves underground mining tunnel construction and some maintenance projects for the **500 thousand tons** experimental potash salt expansion production[20](index=20&type=chunk) Overseas Asset Information | Overseas Assets | Formation Reason | Asset Scale (CNY) | Location | Proportion of Company Net Assets | Significant Impairment Risk | | :--- | :--- | :--- | :--- | :--- | :--- | | 中农香港 | Acquisition through share issuance | 943,491,047.27 | Hong Kong | 26.14% | No | [Core Competitiveness Analysis](index=11&type=section&id=Core%20Competitiveness%20Analysis) The company's core competitiveness stems from its potash fertilizer project's resource and geographical advantages, mature technological expertise, experienced management team, and support from both Chinese and Lao governments, complemented by the grain business's one-stop supply chain services and the company's capital platform advantage as a listed entity - Potash fertilizer project advantages: Possesses **1.002 billion tons** of potash salt reserves in Laos, providing **resource advantages**; located in Southeast Asia, it can radiate to high-price potash regions like Vietnam and Thailand, offering **geographical advantages**[22](index=22&type=chunk) - Technology and team: The company has **mastered** core technologies such as ore mining, beneficiation production, and underground backfilling, and possesses an **experienced** management and technical team[23](index=23&type=chunk)[24](index=24&type=chunk) - Grain business advantages: Through its US subsidiary, the company directly collaborates with local farmers and logistics companies to provide **one-stop supply chain services** to end-users, from source procurement to distribution[26](index=26&type=chunk) [Discussion and Analysis of Operations](index=13&type=section&id=Discussion%20and%20Analysis%20of%20Operations) This section discusses the company's operating performance, analyzes revenue, costs, cash flow, and outlines future development plans and risks [Operating Overview](index=13&type=section&id=Operating%20Overview) In 2018, the company's two main businesses showed divergent performance: potash fertilizer benefited from international market price recovery, with output exceeding **200 thousand tons** and revenue increasing by **16.92%**, though the **1 million tons** expansion project was shelved due to funding issues, while grain trading, affected by the China-US trade war and RMB depreciation, proactively reduced trade volume by **74.39%** to control risk, yet **achieved profitability** by adjusting product categories and seizing protein raw material market opportunities - Potash fertilizer business: 2018 output **exceeded 200 thousand tons** for the first time, reaching **221 thousand tons**; sales were **191.2 thousand tons**; operating revenue reached **321 million CNY**, **increased YoY by 16.92%**; however, the **1 million tons** expansion project was **shelved** due to **funding not secured**[28](index=28&type=chunk) - Grain trading business: Affected by the China-US trade war and RMB depreciation, the company proactively adjusted its operating strategy, avoiding US goods imports, leading to a **74.39%** decrease in trade volume YoY; despite this, the business **achieved profitability** by expanding new product categories, with gross margin **increased YoY by 7.29%**[29](index=29&type=chunk) [Main Business Analysis](index=14&type=section&id=Main%20Business%20Analysis) In 2018, the company's total operating revenue was **421 million CNY**, a **72.59%** significant decrease YoY, primarily due to sharp contractions in shipping and trading business revenues, which decreased by **97.75%** and **78.80%** respectively, making potash fertilizer the revenue pillar, with its revenue proportion jumping from **17.88%** to **76.24%**, reaching **321 million CNY**, an **increased YoY by 16.92%**, and a gross margin of **48.35%**, while sales to the top five customers accounted for **44.45%** of total sales, and purchases from the top five suppliers accounted for **55.87%** of total procurement, indicating **high concentration** Operating Revenue by Industry | By Industry | 2018 Revenue (CNY) | Proportion of Total Revenue | YoY Change | | :--- | :--- | :--- | :--- | | Shipping | 19,868,144.31 | 4.72% | -97.75% | | Trading | 80,179,206.11 | 19.04% | -78.80% | | Potash fertilizer | 320,975,895.12 | 76.24% | 16.92% | Operating Performance by Product | By Product | Operating Revenue (CNY) | Operating Cost (CNY) | Gross Margin | Operating Revenue YoY Change | Operating Cost YoY Change | Gross Margin YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Grain | 80,179,206.11 | 75,490,053.83 | 5.85% | -78.39% | -79.94% | 7.29% | | Potash fertilizer | 320,975,895.12 | 165,798,086.59 | 48.35% | 16.92% | 7.26% | 4.65% | - The company's top five customers' total sales amount was **187 million CNY**, accounting for **44.45%** of total annual sales[38](index=38&type=chunk) - The company's top five suppliers' total procurement amount was **151 million CNY**, accounting for **55.87%** of total annual procurement[41](index=41&type=chunk) [Expense Analysis](index=17&type=section&id=Expense%20Analysis) During the reporting period, selling expenses significantly increased by **268.15%** due to increased potash fertilizer business transportation costs, administrative expenses decreased by **15.57%** primarily because litigation fees were accrued in the prior period but not in the current period, financial expenses decreased by **25.49%** due to reduced exchange losses from RMB appreciation, and income tax expense increased by **26.05%** due to increased potash fertilizer business profits Expense Analysis | Expense Item | 2018 (CNY) | 2017 (CNY) | YoY Change | Key Change Explanation | | :--- | :--- | :--- | :--- | :--- | | Selling expenses | 30,951,740.96 | 8,407,464.03 | 268.15% | Increased transportation costs for potash fertilizer business | | Administrative expenses | 70,936,987.45 | 84,022,967.70 | -15.57% | Litigation fees accrued in prior period, none added in current period | | Financial expenses | -4,368,813.70 | -3,481,468.74 | -25.49% | Reduced exchange losses due to RMB appreciation | | Income tax expense | 28,806,712.21 | 22,852,815.08 | 26.05% | Increased income tax accrued for potash fertilizer business | [Cash Flow Analysis](index=18&type=section&id=Cash%20Flow%20Analysis) In 2018, the company's cash and cash equivalents net decreased by **378.78 million CNY**; net cash flow from operating activities was **42.04 million CNY**, **increased YoY by 191.45%**, primarily because the decrease in business payments exceeded the decrease in fund recovery; net cash flow from investing activities was **-413.55 million CNY**, a **414.11%** significant decrease YoY, mainly due to the purchase of large wealth management products in the current period; and net cash flow from financing activities was **-8.22 million CNY**, primarily due to subsidiary deregistration and repayment of shareholder investment Cash Flow Summary | Item | 2018 (CNY) | 2017 (CNY) | YoY Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 42,042,406.27 | 14,425,310.23 | 191.45% | | Net Cash Flow from Investing Activities | -413,554,069.11 | 131,661,066.13 | -414.11% | | Net Cash Flow from Financing Activities | -8,223,940.55 | 5,196,602.61 | -258.26% | | Net Increase in Cash and Cash Equivalents | -378,784,209.21 | 146,301,651.78 | -358.91% | - Investing activities cash outflow **increased** significantly, primarily due to the current period's **purchase of large wealth management products**, whereas the prior period involved the **recovery of wealth management products**[45](index=45&type=chunk) [Future Development Outlook and Risks](index=25&type=section&id=Future%20Development%20Outlook%20and%20Risks) The company anticipates a potash fertilizer industry price recovery in 2019 and plans to advance the Laos **1 million tons** expansion project, aiming to produce **220 thousand tons** of potash fertilizer, while grain trading faces severe challenges from China-US trade relations and African swine fever, with key risks including the inability to fully obtain Zhongnong International's performance compensation, pending litigation over supporting fundraising defaults, potential delays in the Laos potash project, and industry, market, and financial risks - 2019 operating plan: For potash fertilizer business, plans include **1.66 million tons** of ore supply, **220 thousand tons** of potash fertilizer production, and utmost efforts to support the Laos **1 million tons** expansion project; for grain trading, the company will **address** the **challenging environment** posed by China-US trade relations and African swine fever, and prepare for potential liberalization of US agricultural product business[65](index=65&type=chunk)[66](index=66&type=chunk)[67](index=67&type=chunk) - Main risks: - **Performance compensation risk**: Due to Zhongnong International's failure to meet its 2017 performance commitment, the counterparties have **not yet fulfilled** their compensation obligations, and the company faces the **unable to obtain full amount** of compensation, having **filed a lawsuit**[68](index=68&type=chunk)[69](index=69&type=chunk)[73](index=73&type=chunk) - **Litigation risk**: The dispute case regarding Dongling Industrial and two other parties abandoning subscription for new capital has **not yet ruled**, and there is **uncertainty** whether liquidated damages will be supported[68](index=68&type=chunk)[69](index=69&type=chunk)[73](index=73&type=chunk) - **Project construction risk**: The Laos potash fertilizer **1 million tons** expansion project faces risks of **delayed construction** due to approval procedures and funding issues[74](index=74&type=chunk) - **Market risk**: The outcome of China-US trade negotiations and the African swine fever epidemic pose **uncertainty** for the grain trading business[74](index=74&type=chunk) [Significant Matters](index=29&type=section&id=Significant%20Matters) This section details significant corporate events, including profit distribution, fulfillment of commitments, accounting changes, and major litigation [Profit Distribution Policy and Plan](index=29&type=section&id=Profit%20Distribution%20Policy%20and%20Plan) The company has formulated a continuous and stable profit distribution policy, prioritizing cash dividends, but based on its 2018 operating performance, it plans **not to distribute** cash dividends, **not to issue** bonus shares, and **not to convert** capital reserves into share capital, consistent with its 2016 and 2017 distribution plans, marking **three consecutive years** with no profit distribution - The company's 2016, 2017, and 2018 profit distribution proposals have consistently been **not to distribute** cash, **not to issue** bonus shares, and **not to convert** capital reserves into share capital[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) [Fulfillment of Commitments](index=31&type=section&id=Fulfillment%20of%20Commitments) During the reporting period, most commitments were strictly fulfilled; however, the most critical performance commitment was not met, as Zhongnong International failed to complete its 2017 performance commitment, and the counterparties have not yet fulfilled their compensation obligations, leading the company to file a lawsuit, while some key management personnel also violated commitments regarding term of office and non-compete clauses - Zhongnong International failed to meet its 2017 performance commitment, and the counterparties (Zhongnong Group and ten other parties) have **not yet fulfilled** their compensation obligations; the company has **filed a lawsuit**, but the **case has no judgment or mediation outcome yet**[92](index=92&type=chunk)[93](index=93&type=chunk)[107](index=107&type=chunk) - Meng Dianyong, Huang Lu, Song Ying, Bai Ming, and Kong Lina, five key management personnel, **resigned without the listed company's consent**, and **violated the commitment** to serve for at least **5 years**[101](index=101&type=chunk) - Meng Dianyong, Huang Lu, Song Ying, and Bai Ming, four key management personnel, took positions in subsidiaries of Zhongnong Group after resignation, **violated non-compete commitment**[101](index=101&type=chunk)[102](index=102&type=chunk) [Changes in Accounting Policies](index=53&type=section&id=Changes%20in%20Accounting%20Policies) During the reporting period, the company revised its financial statement format according to new regulations issued by the Ministry of Finance, such as merging "notes receivable" and "accounts receivable" into "notes receivable and accounts receivable," and retrospectively adjusted its 2017 financial statements, additionally, withholding tax handling fees received were adjusted from "non-operating income" to "other income" presentation - According to Cai Kuai [2018] No. 15 issued by the Ministry of Finance, the company revised its financial statement format, merging or disaggregating multiple balance sheet and income statement items, and retrospectively adjusted its 2017 data[109](index=109&type=chunk)[350](index=350&type=chunk) [Correction of Significant Accounting Errors](index=55&type=section&id=Correction%20of%20Significant%20Accounting%20Errors) The company corrected two prior accounting errors: first, to eliminate the impact of the 2017 disclaimer of opinion audit report, the company re-evaluated the value of Zhongnong Potash mining rights, recognizing impairment of **705.5838 million CNY** (significantly lower than originally accrued **2.5926252 billion CNY**), and retrospectively adjusted 2017 financial data; second, the company corrected the error of amortizing intangible assets (mining rights) using different methods at the consolidated financial statements level, **unified to output method**, which **increased** net profit attributable to parent company shareholders from 2015 to 2018 - To eliminate the impact of the 2017 disclaimer of opinion audit report, the company **re-evaluated** Zhongnong Potash mining rights value, **recognized impairment** of **705.5838 million CNY**, **significantly lower than originally accrued 2.5926252 billion CNY**, and retrospectively adjusted for this[113](index=113&type=chunk) - The company **corrected** the prior error of amortizing the same intangible asset (mining rights) using different methods at the consolidated financial statements level, **unified to output method**, and retrospectively adjusted relevant financial data[114](index=114&type=chunk) [Significant Litigation and Arbitration Matters](index=57&type=section&id=Significant%20Litigation%20and%20Arbitration%20Matters) The company is involved in multiple significant lawsuits, with the core litigation being a lawsuit against Zhongnong Group and ten other counterparties for failure to meet Zhongnong International's performance commitment, demanding **247 million CNY** in cash compensation and **225 million shares** in compensation shares; additionally, the company filed lawsuits against supporting fundraising subscribers Dongling Industrial, Lai Ningchang, and Li Chaobo for abandoning subscription, claiming **103 million CNY**, **10 million CNY**, and **10 million CNY** respectively, while an overseas arbitration case involving **82.6551 million USD** has not yet been heard, and none of the above cases have been ruled, leading to **uncertain impact on the company's profit and loss** Significant Litigation and Arbitration Cases | Litigation/Arbitration Matter | Amount Involved | Progress | | :--- | :--- | :--- | | Lawsuit against Zhongnong Group and ten other parties for performance compensation dispute | Cash compensation **247 million CNY** and compensation shares **225 million shares** | Hearing held, not yet ruled, under mediation | | Lawsuit against Dongling Industrial for abandoning subscription | **103 million CNY** | Hearing held, not yet ruled | | Lawsuit against Lai Ningchang for abandoning subscription | **10 million CNY** | Hearing held, litigation suspended | | Lawsuit against Li Chaobo for abandoning subscription | **10 million CNY** | Hearing held, litigation suspended | | Arbitration for procurement contract dispute with Mitsui USA | **82.6551 million USD** | Not yet heard | [Explanation of Other Significant Matters](index=68&type=section&id=Explanation%20of%20Other%20Significant%20Matters) This chapter provides a detailed review of the company's acquisition of Zhongnong Potash assets since 2014 and a series of subsequent significant issues, including supporting fundraising subscribers defaulting on subscription, failure to meet 2017 performance commitment triggering litigation, serious disagreements between the company and shareholder Zhongnong Group on corporate governance issues leading to multiple lawsuits, the 2017 financial report receiving a disclaimer of opinion audit report, and a series of rectification measures such as asset impairment revaluation to remove delisting risk warning - In 2016, supporting fundraising subscribers Dongling Industrial, Lai Ningchang, and Li Chaobo for the major asset restructuring **defaulted** on subscription, and the company has **filed a lawsuit** **claiming liquidated damages**[142](index=142&type=chunk) - In 2017, due to Zhongnong International's failure to meet its performance commitment, the company and counterparties Zhongnong Group and others had disputes, which **triggered multiple lawsuits** regarding board re-election and board resolution validity, **indicating serious internal governance conflicts** within the company[144](index=144&type=chunk)[145](index=145&type=chunk)[146](index=146&type=chunk) - As Zhongnong Group and ten other issuing parties failed to fulfill their performance compensation obligations, their total shares held of **353,448,272 restricted shares** (originally scheduled for lifting of restrictions on September 28, 2018) are **temporarily not applying for listing and circulation**[161](index=161&type=chunk)[163](index=163&type=chunk) [Share Changes and Shareholder Information](index=84&type=section&id=Share%20Changes%20and%20Shareholder%20Information) This section provides an overview of the company's share capital changes, shareholder structure, and information on its controlling shareholder and actual controller [Share Changes](index=84&type=section&id=Share%20Changes) As of the end of 2018, the company's total share capital was **756,903,272 shares**, and the **total share capital remained unchanged** during the reporting period, with restricted shares accounting for **47.06%** and unrestricted shares for **52.94%** Share Capital Structure | Share Type | End-of-Period Quantity (shares) | Proportion | | :--- | :--- | :--- | | Restricted shares | 356,161,322 | 47.06% | | Unrestricted shares | 400,741,950 | 52.94% | | **Total Share Capital** | **756,903,272** | **100.00%** | [Shareholders and Actual Controller Information](index=86&type=section&id=Shareholders%20and%20Actual%20Controller%20Information) As of the end of 2018, the company had **16,451 shareholder accounts**; Guangzhou Dongling Industrial Investment Group Co., Ltd. was the controlling shareholder with a **22.10%** shareholding, and Mr. Lai Ningchang was the actual controller; among the top ten shareholders, those who entered due to the acquisition of Zhongnong International occupy most positions, and **most of their shares are pledged or frozen** Top Shareholders Information | Shareholder Name | Shareholding Proportion | End-of-Period Shareholding (shares) | Share Status | | :--- | :--- | :--- | :--- | | 广州东凌实业投资集团有限公司 | 22.10% | 167,298,554 | Pledged 164,990,000 shares | | 中国农业生产资料集团公司 | 19.15% | 144,913,793 | Frozen/Pledged | | 新疆江之源股权投资合伙企业 | 7.94% | 60,086,206 | Frozen/Pledged | | 上海劲邦劲德股权投资合伙企业 | 7.47% | 56,551,724 | Frozen/Pledged | - The company's actual controller, Mr. Lai Ningchang, and his parties acting in concert collectively hold **22.14%** of the company's shares; in April 2018, Dongling Holdings, the upper-level shareholder of controlling shareholder Dongling Industrial, introduced new shareholders, but Mr. Lai Ningchang's **actual controller status remained unchanged**[8](index=8&type=chunk)[184](index=184&type=chunk) [Preferred Share Information](index=91&type=section&id=Preferred%20Share%20Information) This section confirms the absence of preferred shares issued by the company during the reporting period - During the reporting period, the company had **no preferred shares**[187](index=187&type=chunk) [Directors, Supervisors, Senior Management, and Employees](index=92&type=section&id=Directors%2C%20Supervisors%2C%20Senior%20Management%2C%20and%20Employees) This section details changes in the board, supervisory board, and senior management, their remuneration, and provides an overview of the company's employee structure [Changes in Directors, Supervisors, and Senior Management](index=93&type=section&id=Changes%20in%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) During the reporting period, the company's senior management team changes occurred, with Ms. Cheng Xiaona, Deputy General Manager and Board Secretary, resigning due to personal reasons, and Mr. Zhang Zhigang, General Manager, resigning due to health reasons Changes in Directors, Supervisors, and Senior Management | Name | Position Held | Change Type | Date | Reason | | :--- | :--- | :--- | :--- | :--- | | 程晓娜 | Deputy General Manager, Board Secretary | Dismissed | 2018年03月29日 | Resigned due to personal reasons | | 张志钢 | General Manager | Dismissed | 2018年05月16日 | Resigned due to health reasons | [Remuneration of Directors, Supervisors, and Senior Management](index=99&type=section&id=Remuneration%20of%20Directors%2C%20Supervisors%2C%20and%20Senior%20Management) During the reporting period, the total pre-tax remuneration received by the company's directors, supervisors, and senior management was **6.0176 million CNY** - During the reporting period, the company paid to directors, supervisors, and senior management a total remuneration of **6.0176 million CNY**[204](index=204&type=chunk)[205](index=205&type=chunk) [Employee Information](index=101&type=section&id=Employee%20Information) As of the end of the reporting period, the company had a total of **474 active employees**; in terms of professional composition, **production personnel accounted for the highest proportion** at **208 employees**; and in terms of education level, employees with high school education or below accounted for a larger proportion, totaling **341 employees**, or **71.9%** of the total Employee Professional Composition | Professional Composition | Number of Employees | | :--- | :--- | | Production Personnel | 208 | | Sales Personnel | 18 | | Technical Personnel | 96 | | Financial Personnel | 18 | | Administrative Personnel | 81 | | Management Personnel | 53 | | **Total** | **474** | [Corporate Governance](index=103&type=section&id=Corporate%20Governance) This section describes the company's corporate governance framework, independent directors' performance, and internal control status [Basic Corporate Governance Status](index=103&type=section&id=Basic%20Corporate%20Governance%20Status) The company claims its corporate governance status is largely consistent with relevant regulatory requirements, with standardized operations in shareholders' meetings, board of directors, supervisory board, and information disclosure, and the company maintains independence from its controlling shareholder in business, personnel, assets, organization, and finance - The company's corporate governance status is **largely consistent with relevant regulatory requirements** on corporate governance of listed companies issued by the China Securities Regulatory Commission, with **no significant differences**[213](index=213&type=chunk) [Independent Directors' Performance of Duties](index=105&type=section&id=Independent%20Directors%27%20Performance%20of%20Duties) During the reporting period, independent directors actively performed their duties but raised objections to multiple proposals; independent director Liu Guochang abstained or voted against proposals for appointing the Board Secretary and General Manager, and senior management remuneration, citing hasty procedure and significant differences between candidates and company needs, while independent directors Guo Xuejin and Sha Zhenquan also voted against the "2017 General Manager's Work Report," deeming it not comprehensive and not valuing independent directors' opinions, reflecting **clear disagreements within the board** - Independent director Liu Guochang voted against the proposal for appointing the company's General Manager, believing the candidate significantly differs from company needs and that the nomination committee did not reach a consensus[218](index=218&type=chunk) - Independent directors Guo Xuejin, Liu Guochang, and Sha Zhenquan voted against the "2017 General Manager's Work Report," believing the report was **not comprehensive** and **did not value independent directors' opinions**[218](index=218&type=chunk) [Internal Control Status](index=109&type=section&id=Internal%20Control%20Status) The company conducted a self-assessment of internal control for 2018, concluding that there are **no material weaknesses** in financial and non-financial reporting internal controls, and the accounting firm issued a **standard unqualified audit report** on the company's internal control over financial reporting, stating that the company **maintained effective internal control** over financial reporting in all material respects as of December 31, 2018 - The company's internal control evaluation report concluded that **no material weaknesses** were found in financial and non-financial reporting[224](index=224&type=chunk)[226](index=226&type=chunk) - The accounting firm issued a **standard unqualified audit report** on internal control, stating that the company **maintained effective internal control** over financial reporting in all material respects as of December 31, 2018[228](index=228&type=chunk)[229](index=229&type=chunk) [Corporate Bond Information](index=112&type=section&id=Corporate%20Bond%20Information) This section confirms the company has no outstanding corporate bonds that are publicly issued and listed - The company has **no publicly issued corporate bonds** listed on a stock exchange that are not yet due or were not fully redeemed by the annual report approval date[230](index=230&type=chunk) [Financial Report](index=113&type=section&id=Financial%20Report) This section presents the company's audited financial statements and the auditor's opinion, highlighting key audit matters [Audit Report](index=113&type=section&id=Audit%20Report) Zhongqin Wanxin Certified Public Accountants issued a **standard unqualified audit opinion** on the company's 2018 financial statements, believing the financial statements **fairly presented** the company's financial position and operating results in all material respects, which is a **significant positive development**, signifying that the company has **resolved the issues** that led to the 2017 'disclaimer of opinion' audit report, with the audit report listing "recognition of potash fertilizer business revenue" as a key audit matter - The audit opinion type is a "**standard unqualified opinion**," signifying that the accounting firm believes the financial statements **fairly presented** the company's situation[232](index=232&type=chunk)[233](index=233&type=chunk) - The key audit matter is "recognition of potash fertilizer business revenue," due to its **material amount** (accounting for **76.01%** of consolidated revenue) and its status as a **key performance indicator**, posing a **potential misstatement risk**[236](index=236&type=chunk) [List of Reference Documents](index=266&type=section&id=List%20of%20Reference%20Documents) This section lists all documents available for public inspection, including financial statements and original announcements - Reference documents include **financial statements bearing the legal representative's signature**, the **original audit report**, and **originals of all publicly disclosed documents and announcements during the reporting period**[622](index=622&type=chunk)

[Important Notes, Table of Contents, and Definitions](index=2&type=section&id=%E7%AC%AC%E4%B8%80%E8%8A%82%20%E9%87%8D%E8%A6%81%E6%8F%90%E7%A4%BA%E3%80%81%E7%9B%AE%E5%BD%95%E5%92%8C%E9%87%8A%E4%B9%89) [Important Notes](index=2&type=section&id=%E9%87%8D%E8%A6%81%E6%8F%90%E7%A4%BA) This is the restated 2017 annual report, which received a standard unqualified audit opinion after correcting prior period accounting errors - The Board of Directors approved the adjustment of 2017 asset impairments and the correction and restatement of prior period accounting errors on April 22, 2019[2](index=2&type=chunk) - The original 2017 annual report received a "disclaimer of opinion" from Zhongqin Wanxin Certified Public Accountants, prompting the company to reassess the value of its Laos potash mining rights and restate financial data[2](index=2&type=chunk) - Following a re-audit, Zhongqin Wanxin Certified Public Accountants issued a **standard unqualified audit opinion** on the company's restated 2017 financial report in April 2019[3](index=3&type=chunk) - The company does not plan to distribute cash dividends, issue bonus shares, or capitalize reserves for the 2017 fiscal year[4](index=4&type=chunk) [Company Profile and Key Financial Indicators](index=6&type=section&id=%E7%AC%AC%E4%BA%8C%E8%8A%82%20%E5%85%AC%E5%8F%B8%E7%AE%80%E4%BB%8B%E5%92%8C%E4%B8%BB%E8%A6%81%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) [Company Information and Changes in Main Business](index=6&type=section&id=%E5%85%AC%E5%8F%B8%E4%BF%A1%E6%81%AF%E4%B8%8E%E4%B8%BB%E8%90%A5%E4%B8%9A%E5%8A%A1%E5%8F%98%E6%9B%B4) The company's main business shifted from grain and oil processing to potash fertilizer, grain trading, and shipping in 2015 - The company's main business underwent a major change in 2015, shifting from grain and oil processing and sales to three segments: **potash fertilizer operations, grain trading, and shipping**[12](index=12&type=chunk) - As of the reporting period end, the controlling shareholder Dongling Industry held **22.10%** of the company's shares, while the ultimate controller Mr. Lai Ningchang and his concerted parties held a combined **22.14%**[12](index=12&type=chunk) [Key Accounting Data and Financial Indicators](index=8&type=section&id=%E4%B8%BB%E8%A6%81%E4%BC%9A%E8%AE%A1%E6%95%B0%E6%8D%AE%E5%92%8C%E8%B4%A2%E5%8A%A1%E6%8C%87%E6%A0%87) The company's performance declined sharply in 2017, with revenue down 36.01% and a net loss of RMB 688 million Annual Financial Highlights | Indicator | 2017 | 2016 | Y-o-Y Change | | :--- | :--- | :--- | :--- | | Operating Revenue (RMB) | 1,535,770,294.27 | 2,399,954,760.73 | -36.01% | | Net Profit Attributable to Shareholders (RMB) | -688,323,758.32 | 19,520,905.53 | -3626.09% | | Net Cash Flow from Operating Activities (RMB) | 14,425,310.23 | 119,022,392.35 | -87.88% | | Basic Earnings Per Share (RMB/Share) | -0.9094 | 0.03 | -3131.33% | | Weighted Average Return on Equity | -17.41% | 0.45% | -17.86% | | Total Assets (RMB) | 4,235,247,036.60 | 5,170,864,649.57 | -18.09% | | Net Assets Attributable to Shareholders (RMB) | 3,607,087,348.60 | 4,301,893,893.70 | -16.15% | Quarterly Financial Data | Quarter | Operating Revenue (RMB) | Net Profit Attributable to Shareholders (RMB) | | :--- | :--- | :--- | | Q1 | 274,319,702.18 | -5,105,250.22 | | Q2 | 415,938,398.35 | -15,393,520.39 | | Q3 | 417,087,906.17 | -15,828,733.67 | | Q4 | 428,424,287.57 | -651,996,254.04 | [Non-recurring Gains and Losses](index=9&type=section&id=%E9%9D%9E%E7%BB%8F%E5%B8%B8%E6%80%A7%E6%8D%9F%E7%9B%8A%E9%A1%B9%E7%9B%AE%E5%8F%8A%E9%87%91%E9%A2%9D) Non-recurring items totaled RMB 0.71 million in 2017, having a minor impact on net profit Details of Non-recurring Items | Item | 2017 Amount (RMB) | 2016 Amount (RMB) | | :--- | :--- | :--- | | Gains/Losses from Disposal of Non-current Assets | -33,780.63 | -10,510.43 | | Government Grants | 20,368.37 | 120,707.18 | | Gains/Losses from Trading Financial Assets/Liabilities | 2,461,286.04 | 8,850.14 | | Other Non-operating Income and Expenses | -1,664,560.62 | 579,745.01 | | **Total** | **706,410.02** | **13,454,162.00** | [Business Overview](index=11&type=section&id=%E7%AC%AC%E4%B8%89%E8%8A%82%20%E5%85%AC%E5%8F%B8%E4%B8%9A%E5%8A%A1%E6%A6%82%E8%A6%81) [Principal Activities](index=11&type=section&id=%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E5%85%AC%E5%8F%B8%E4%BB%8E%E4%BA%8B%E7%9A%84%E4%B8%BB%E8%A6%81%E4%B8%9A%E5%8A%A1) The company operates in three segments: potash mining, grain trading, and international shipping - **Potash Business**: Holds mining rights to a 35 sq km potash mine in Khammouane Province, Laos, with total reserves of 1.002 billion tons; produced 173,000 tons and sold 191,300 tons of potash fertilizer in 2017, but the planned 1 million ton/year expansion project has stalled due to lack of funding[21](index=21&type=chunk) - **Grain Trading**: Procures primary agricultural products like corn, feed barley, and sorghum from production areas and imports protein feed ingredients like rapeseed meal and sunflower meal for end-users in southern China[22](index=22&type=chunk) - **Shipping Business**: Engages in ocean-going dry bulk transportation by chartering vessels, primarily transporting commodities like grain, iron ore, and coal on routes mainly between the Americas and China, as well as within the Asia-Pacific region[22](index=22&type=chunk)[23](index=23&type=chunk) [Significant Changes in Major Assets](index=12&type=section&id=%E4%B8%BB%E8%A6%81%E8%B5%84%E4%BA%A7%E9%87%8D%E5%A4%A7%E5%8F%98%E5%8C%96%E6%83%85%E5%86%B5) Intangible assets decreased significantly due to impairment of the Laos potash mining rights, which pose a major risk - Intangible assets changed significantly due to the impairment provision for the Laos potash mining rights during the reporting period[24](index=24&type=chunk) Major Overseas Assets | Overseas Asset | Asset Size (RMB) | Location | Profit/Loss (RMB) | % of Company's Net Assets | Major Impairment Risk | | :--- | :--- | :--- | :--- | :--- | :--- | | Sino-Agri Hong Kong (holds 90% of Sino-Agri Potash) | 896,256,296.31 | Hong Kong | 32,479,007.98 | 46.96% | Yes | [Core Competency Analysis](index=12&type=section&id=%E6%A0%B8%E5%BF%83%E7%AB%9E%E4%BA%89%E5%8A%9B%E5%88%86%E6%9E%90) Core competencies include potash resources, integrated grain supply chain services, and professional shipping capabilities - **Potash Resources & Location Advantage**: The Laos potash project has total reserves of **1.002 billion tons**, equivalent to 152 million tons of pure potassium chloride; the shallow deposit is easy to mine, and its location in central Southeast Asia offers an economic land transport radius to neighboring countries[28](index=28&type=chunk) - **Grain Supply Chain Services**: Provides end-to-end services for terminal customers, from sourcing and transportation to loading/unloading and delivery, effectively controlling quality and costs[29](index=29&type=chunk) - **Professional Shipping Capabilities**: The team possesses comprehensive information advantages in commodity trading and shipping markets, enabling them to offer optimized bulk sea freight solutions[30](index=30&type=chunk) [Management Discussion and Analysis](index=14&type=section&id=%E7%AC%AC%E5%9B%9B%E8%8A%82%20%E7%BB%8F%E8%90%A5%E6%83%85%E5%86%B5%E8%AE%A8%E8%AE%BA%E4%B8%8E%E5%88%86%E6%9E%90) [Overview](index=14&type=section&id=%E4%B8%80%E3%80%81%E6%A6%82%E8%BF%B0) The company faced severe challenges in 2017, leading to a significant revenue decline and substantial net loss 2017 Performance Summary | Indicator | 2017 Amount (RMB 10,000) | Y-o-Y Change | | :--- | :--- | :--- | | Operating Revenue | 153,577.03 | -36.01% | | Operating Profit | -74,930.90 | -7296.12% | | Net Profit Attributable to Parent | -68,832.38 | -3626.09% | - The company faced three major challenges: the stalled expansion of the 1 million ton/year potash project, a harsh grain trading environment due to national destocking policies, and overcapacity in the international shipping market[32](index=32&type=chunk) [Analysis of Main Business Operations](index=16&type=section&id=%E4%BA%8C%E3%80%81%E4%B8%BB%E8%90%A5%E4%B8%9A%E5%8A%A1%E5%88%86%E6%9E%90) Only the potash business was profitable, while the shipping and trading segments incurred losses and saw revenue declines Performance by Business Segment | Segment | Operating Revenue (RMB) | Operating Cost (RMB) | Gross Margin | Revenue Y-o-Y Change | | :--- | :--- | :--- | :--- | :--- | | Shipping | 883,124,651.83 | 920,197,495.13 | -4.20% | -35.97% | | Trading | 378,122,042.86 | 383,271,040.03 | -1.36% | -53.49% | | Potash | 274,523,599.58 | 155,621,331.84 | 43.31% | 32.21% | - The total sales to the company's top five customers amounted to **RMB 422 million**, accounting for 27.49% of total annual sales; total purchases from the top five suppliers were **RMB 421 million**, representing 28.87% of total annual purchases[47](index=47&type=chunk)[48](index=48&type=chunk) Analysis of Expenses | Expense Item | 2017 (RMB) | 2016 (RMB) | Y-o-Y Change | Reason for Change | | :--- | :--- | :--- | :--- | :--- | | Selling Expenses | 8,407,464.03 | 5,835,850.09 | 44.07% | Increased transportation fees for potash business | | Administrative Expenses | 83,955,771.82 | 69,812,491.92 | 20.26% | Increased mining rights amortization, litigation and legal fees | | Financial Expenses | -3,481,468.74 | -19,987,129.16 | 82.58% | Interest on deferred payment from asset sale in prior year and currency fluctuations | | Income Tax Expense | 22,852,815.08 | -2,450,513.44 | 1,032.57% | Increased income tax provision for Sino-Agri Potash | - Net cash flow from operating activities **decreased sharply by 87.88%** year-over-year, primarily due to reduced cash flows from the shipping and trading businesses[51](index=51&type=chunk)[52](index=52&type=chunk) [Analysis of Non-core Business](index=21&type=section&id=%E4%B8%89%E3%80%81%E9%9D%9E%E4%B8%BB%E8%90%A5%E4%B8%9A%E5%8A%A1%E5%88%86%E6%9E%90) Asset impairment losses of RMB 708 million were the primary cause of the company's significant loss in 2017 Impact of Non-core Items on Profit | Item | Amount (RMB) | % of Total Profit | Explanation | | :--- | :--- | :--- | :--- | | Investment Income | 2,699,446.77 | -0.36% | Mainly from wealth management products, OTC, and reverse repos | | Asset Impairment | 707,892,571.71 | -94.26% | Mainly impairment provision for Sino-Agri Potash mining rights | | Non-operating Income | 280,481.55 | -0.04% | Mainly from sale of scrap materials | | Non-operating Expenses | 1,934,836.27 | -0.26% | Mainly charitable donations | [Assets and Liabilities](index=21&type=section&id=%E5%9B%9B%E3%80%81%E8%B5%84%E4%BA%A7%E5%8F%8A%E8%B4%9F%E5%80%BA%E7%8A%B6%E5%86%B5) Total assets decreased by 18.09% to RMB 4.24 billion, with significant shifts in cash, prepayments, and other current assets - Cash and cash equivalents at year-end were **RMB 499 million**, an increase of 4.69 percentage points from the beginning of the year, mainly due to the redemption of wealth management products and reverse repos[55](index=55&type=chunk) - Other current assets at year-end were **RMB 31 million**, a significant decrease from the beginning of the year, primarily due to a reduction in principal-protected wealth management products[55](index=55&type=chunk) - Prepayments and advances from customers decreased by 1.93 and 2.08 percentage points, respectively, reflecting a contraction in business scale[55](index=55&type=chunk)[56](index=56&type=chunk) [Future Outlook](index=27&type=section&id=%E4%B9%9D%E3%80%81%E5%85%AC%E5%8F%B8%E6%9C%AA%E6%9D%A5%E5%8F%91%E5%B1%95%E7%9A%84%E5%B1%95%E6%9C%9B) The company plans to advance its potash project, explore new grain markets, and stabilize shipping operations while addressing multiple risks - **2018 Operating Plan**: - **Potash**: Plan to produce 200,000 tons and actively promote the construction of the 1 million ton project in Laos - **Grain Trading**: Increase development of agricultural products from Ukraine and ASEAN countries and seek new business models - **Shipping**: Maintain a transport volume of 5 million tons, focusing on improving profitability and stability[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) - **Key Risks**: - **Performance Compensation Risk**: Sino-Agri International failed to meet its 2017 performance commitment, and with some counterparties' shares pledged, the company faces the risk of not receiving full compensation and has initiated legal action - **Asset Impairment Risk**: The potash mining rights are subject to impairment risk, with the final impairment amount pending a court ruling - **Industry and Market Risks**: Faces risks from currency fluctuations, trade protectionism, and low potash prices - **Litigation Risk**: The company is involved in several major lawsuits with uncertain outcomes[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk)[79](index=79&type=chunk) [Significant Events](index=32&type=section&id=%E7%AC%AC%E4%BA%94%E8%8A%82%20%E9%87%8D%E8%A6%81%E4%BA%8B%E9%A1%B9) [Profit Distribution](index=32&type=section&id=%E4%B8%80%E3%80%81%E5%85%AC%E5%8F%B8%E6%99%AE%E9%80%9A%E8%82%A1%E5%88%A9%E6%B6%A6%E5%88%86%E9%85%8D%E5%8F%8A%E8%B5%84%E6%9C%AC%E5%85%AC%E7%A7%AF%E9%87%91%E8%BD%AC%E5%A2%9E%E8%82%A1%E6%9C%AC%E6%83%85%E5%86%B5) The company proposed no profit distribution for 2017 due to losses and has not paid cash dividends for three consecutive years - For three consecutive years (2015, 2016, and 2017), the company's profit distribution plan involved **no cash dividends, no bonus shares, and no capitalization of reserves**[86](index=86&type=chunk)[87](index=87&type=chunk) [Fulfillment of Commitments](index=34&type=section&id=%E4%B8%89%E3%80%81%E6%89%BF%E8%AF%BA%E4%BA%8B%E9%A1%B9%E5%B1%A5%E8%A1%8C%E6%83%85%E5%86%B5) Sino-Agri International failed to meet its 2017 profit commitment, and several key managers violated their service and non-compete agreements - Sino-Agri International **failed to meet its 2017 performance commitment**; the promised net profit was no less than RMB 451.5 million, while the actual recurring net profit attributable to the parent was RMB 24.74 million[97](index=97&type=chunk)[112](index=112&type=chunk) - Five key managers, including Meng Dianyong, Huang Lu, Song Ying, Bai Ming, and Kong Lina, resigned without the company's consent, **violating their commitment to a service period of no less than 5 years**[105](index=105&type=chunk) - Four key managers, including Meng Dianyong, Huang Lu, Song Ying, and Bai Ming, took positions in subsidiaries of Sino-Agri Group after their departure, **violating their non-compete commitments**[105](index=105&type=chunk) [Explanation of Non-standard Audit Report](index=56&type=section&id=%E4%BA%94%E3%80%81%E8%91%A3%E4%BA%8B%E4%BC%9A%E3%80%81%E7%9B%91%E4%BA%8B%E4%BC%9A%E3%80%81%E7%8B%AC%E7%AB%8B%E8%91%A3%E4%BA%8B%EF%BC%88%E5%A6%82%E6%9C%89%EF%BC%89%E5%AF%B9%E4%BC%9A%E8%AE%A1%E5%B8%88%E4%BA%8B%E5%8A%A1%E6%89%80%E6%9C%AC%E6%8A%A5%E5%91%8A%E6%9C%9F%E2%80%9C%E9%9D%9E%E6%A0%87%E5%87%86%E5%AE%A1%E8%AE%A1%E6%8A%A5%E5%91%8A%E2%80%9D%E7%9A%84%E8%AF%B4%E6%98%8E) The initial disclaimer of opinion was due to insufficient audit evidence regarding the impairment of potash mining rights - Zhongqin Wanxin Certified Public Accountants initially issued a **disclaimer of opinion** on the company's 2017 financial report (Qin Xin Shen Zi [2018] No. 1017)[114](index=114&type=chunk) - The Board explained that the disclaimer of opinion stemmed from the auditor's inability to verify the reasonableness of the impairment provision for the potash mining rights, particularly due to disagreements over the adoption of a third-party valuation report[114](index=114&type=chunk) - The Supervisory Committee and independent directors respected the auditor's professional opinion and agreed with the Board's explanation, urging the company to take measures to resolve the issue[116](index=116&type=chunk) [Correction of Major Accounting Errors](index=58&type=section&id=%E4%B8%83%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E5%8F%91%E7%94%9F%E9%87%8D%E5%A4%A7%E4%BC%9A%E8%AE%A1%E5%B7%AE%E9%94%99%E6%9B%B4%E6%AD%A3%E9%9C%80%E8%BF%BD%E6%BA%AF%E9%87%8D%E8%BF%B0%E7%9A%84%E6%83%85%E5%86%B5%E8%AF%B4%E6%98%8E) The company restated its 2017 financials by adjusting the mining rights impairment from RMB 2.59 billion to RMB 0.71 billion - The company made a significant adjustment to the impairment provision for intangible assets (mining rights) for fiscal year 2017, reducing the original provision of **RMB 2.593 billion** to a re-evaluated amount of **RMB 706 million**[119](index=119&type=chunk) - This adjustment was treated as a prior period error correction, and the Board of Directors approved the related restatement proposal on April 22, 2019, facilitating a re-audit of the 2017 financial statements[119](index=119&type=chunk) [Major Litigation and Arbitration](index=59&type=section&id=%E5%8D%81%E4%BA%8C%E3%80%81%E9%87%8D%E5%A4%A7%E8%AF%89%E8%AE%BC%E3%80%81%E4%BB%B2%E8%A3%81%E4%BA%8B%E9%A1%B9) The company is involved in multiple lawsuits concerning performance commitments, subscription defaults, and contract disputes Summary of Major Legal Cases | Parties | Cause of Action | Amount Involved | Status | | :--- | :--- | :--- | :--- | | Company vs Sino-Agri Group & 9 others | Performance commitment & asset impairment compensation dispute | RMB 247 million cash & 225 million shares | Hearing held, verdict pending | | Company vs Dongling Industry | Dispute over default on private placement subscription | RMB 103 million | Hearing held, verdict pending | | Company vs Lai Ningchang/Li Chaobo | Dispute over default on private placement subscription | RMB 10 million each | Hearing not yet scheduled | | Mitsui & Co. (U.S.A.) vs Company | Brazilian soybean purchase contract dispute | Approx. USD 82.66 million | Hearing not yet scheduled | | Sino-Agri Group vs Company | Dispute over validity of Board resolutions | N/A | Hearing held, verdict pending | [Equity Incentive Plan](index=64&type=section&id=%E5%8D%81%E4%BA%94%E3%80%81%E5%85%AC%E5%8F%B8%E8%82%A1%E6%9D%83%E6%BF%80%E5%8A%B1%E8%AE%A1%E5%88%92%E3%80%81%E5%91%98%E5%B7%A5%E6%8C%81%E8%82%A1%E8%AE%A1%E5%88%92%E6%88%96%E5%85%B6%E4%BB%96%E5%91%98%E5%B7%A5%E6%BF%80%E5%8A%B1%E6%8E%AA%E6%96%BD%E7%9A%84%E5%AE%9E%E6%96%BD%E6%83%85%E5%86%B5) The 2015 employee stock ownership plan was terminated in January 2018 after all shares were sold - The company's 2015 employee stock ownership plan completed its share purchases on January 5, 2016, acquiring a total of **4,224,603 shares**, representing 0.56% of the total share capital, at an average price of approximately RMB 15.31 per share[135](index=135&type=chunk) - The plan's duration was extended once and was ultimately terminated on January 5, 2018, after all shares were sold[135](index=135&type=chunk) [Share Capital and Shareholders](index=80&type=section&id=%E7%AC%AC%E5%85%AD%E8%8A%82%20%E8%82%A1%E4%BB%BD%E5%8F%98%E5%8A%A8%E5%8F%8A%E8%82%A1%E4%B8%9C%E6%83%85%E5%86%B5) [Changes in Share Capital](index=80&type=section&id=%E4%B8%80%E3%80%81%E8%82%A1%E4%BB%BD%E5%8F%98%E5%8A%A8%E6%83%85%E5%86%B5) The company's total share capital remained unchanged at 756.9 million shares during the reporting period Share Structure | Share Type | Number of Shares | Percentage | | :--- | :--- | :--- | | Shares with Selling Restrictions | 356,048,822 | 47.04% | | Shares without Selling Restrictions | 400,854,450 | 52.96% | | **Total Shares** | **756,903,272** | **100.00%** | [Shareholders and Ultimate Controller](index=81&type=section&id=%E4%B8%89%E3%80%81%E8%82%A1%E4%B8%9C%E5%92%8C%E5%AE%9E%E9%99%85%E6%8E%A7%E5%88%B6%E4%BA%BA%E6%83%85%E5%86%B5) The controlling shareholder is Dongling Industry, and a significant portion of shares held by major shareholders are pledged or frozen - Nearly all of the **167 million shares** held by the controlling shareholder, Dongling Industry, were pledged; of the **145 million shares** held by the second-largest shareholder, Sino-Agri Group, approximately 61% were pledged and 39% were frozen[170](index=170&type=chunk) - Several shareholders who came in through the restructuring, including Xinjiang Jiangzhiyuan, Shanghai Jinbang Jinde, and Shanghai Kaili Tianren, also had a large proportion of their shares pledged or frozen[175](index=175&type=chunk) - The company's ultimate controller, Mr. Lai Ningchang, controls the shareholder Dongling Industry through Dongling Holding Group; although Dongling Holding underwent a capital increase in April 2018, Mr. Lai maintained his ultimate control through a concerted action agreement[179](index=179&type=chunk)[180](index=180&type=chunk)[181](index=181&type=chunk) [Directors, Supervisors, Senior Management, and Employees](index=88&type=section&id=%E7%AC%AC%E5%85%AB%E8%8A%82%20%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%91%E4%BA%8B%E3%80%81%E9%AB%98%E7%BA%A7%E7%AE%A1%E7%90%86%E4%BA%BA%E5%91%98%E5%92%8C%E5%91%98%E5%B7%A5%E6%83%85%E5%86%B5) [Changes in Directors, Supervisors, and Senior Management](index=89&type=section&id=%E4%BA%8C%E3%80%81%E5%85%AC%E5%8F%B8%E8%91%A3%E4%BA%8B%E3%80%81%E7%9B%91%E4%BA%8B%E3%80%81%E9%AB%98%E7%BA%A7%E7%AE%A1%E7%90%86%E4%BA%BA%E5%91%98%E5%8F%98%E5%8A%A8%E6%83%85%E5%86%B5) The company experienced several changes in its senior management team, including the appointment of a new General Manager Management Changes | Name | Position Change | Date | Reason | | :--- | :--- | :--- | :--- | | Guo Jiahua | Resigned as General Manager | 2017-06-08 | Work adjustment | | Zhang Zhigang | Resigned as Chairman of Supervisory Committee | 2017-06-09 | Work adjustment | | Kang He | Dismissed as Deputy General Manager | 2017-06-24 | Board resolution | | Cheng Xiaona | Resigned as Deputy GM & Board Secretary | 2018-03-29 | Personal reasons | [Employee Information](index=96&type=section&id=%E4%BA%94%E3%80%81%E5%85%AC%E5%8F%B8%E5%91%98%E5%B7%A5%E6%83%85%E5%86%B5) As of year-end, the company had 468 employees, with production staff accounting for the largest proportion at 46% Employee Composition | Category | Number of Employees | | :--- | :--- | | Production | 217 | | Sales | 14 | | Technical | 91 | | Financial | 18 | | Administrative | 86 | | Management | 42 | | **Total** | **468** | [Corporate Governance](index=98&type=section&id=%E7%AC%AC%E4%B9%9D%E8%8A%82%20%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86) [Overview of Corporate Governance](index=98&type=section&id=%E4%B8%80%E3%80%81%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%E7%9A%84%E5%9F%BA%E6%9C%AC%E7%8A%B6%E5%86%B5) The company's governance practices were generally compliant with regulations, maintaining independence from its controlling shareholder - The corporate governance structure is well-established and operates in compliance with CSRC regulations regarding shareholder meetings, board of directors, supervisory committee, and information disclosure, with no material discrepancies[206](index=206&type=chunk)[207](index=207&type=chunk)[208](index=208&type=chunk)[209](index=209&type=chunk)[210](index=210&type=chunk)[212](index=212&type=chunk) - The company is **fully separate from its controlling shareholder** in terms of business, personnel, assets, organization, and finance, possessing independent and complete business operations and self-management capabilities[213](index=213&type=chunk) [Performance of Independent Directors](index=100&type=section&id=%E4%BA%94%E3%80%81%E6%8A%A5%E5%91%8A%E6%9C%9F%E5%86%85%E7%8B%AC%E7%AB%8B%E8%91%A3%E4%BA%8B%E5%B1%A5%E8%A1%8C%E8%81%8C%E8%B4%A3%E7%9A%84%E6%83%85%E5%86%B5) Independent directors actively fulfilled their duties, notably opposing several proposals from shareholder Sino-Agri Group - Independent directors Guo Xuejin, Sha Zhenquan, Liu Guochang, and Xu Yue **voted against** the proposal by shareholder Sino-Agri Group to convene an extraordinary general meeting for board elections, citing pending litigation, uncertain share ownership, and a prior board resolution to extend the current term[219](index=219&type=chunk) - All independent directors **voted against** Sino-Agri Group's proposals to remove a supervisor, invalidate the status of an employee supervisor, and elect a new supervisor, stating that the existing supervisory committee structure and election process were legally valid[221](index=221&type=chunk) [Internal Controls](index=108&type=section&id=%E4%B9%9D%E3%80%81%E5%86%85%E9%83%A8%E6%8E%A7%E5%88%B6%E6%83%85%E5%86%B5) The board found no material weaknesses in internal controls, but the auditor issued a qualified opinion with an emphasis of matter paragraph - The Board of Directors' self-assessment concluded that **no material or significant weaknesses** were found in the internal controls for financial reporting and non-financial reporting[233](index=233&type=chunk)[234](index=234&type=chunk) - The accounting firm issued an unqualified internal control audit report with an **emphasis of matter paragraph**, highlighting that multiple lawsuits between the company and its shareholders could affect normal decision-making[236](index=236&type=chunk)[241](index=241&type=chunk) [Financial Report](index=113&type=section&id=%E7%AC%AC%E5%8D%81%E4%B8%80%E8%8A%82%20%E8%B4%A2%E5%8A%A1%E6%8A%A5%E5%91%8A) [Auditor's Report](index=113&type=section&id=%E4%B8%80%E3%80%81%E5%AE%A1%E8%AE%A1%E6%8A%A5%E5%91%8A) The restated financial report received a standard unqualified opinion, with revenue recognition and mining rights impairment as key audit matters - The audit opinion was a **standard unqualified opinion**, stating that the financial statements fairly present the company's financial position and operating results in all material respects for 2017[244](index=244&type=chunk)[245](index=245&type=chunk) - **Key Audit Matter 1: Revenue Recognition**; As revenue is a key performance indicator with a significant impact on the financial statements, the auditor identified it as a key audit matter and performed control tests, analytical procedures, contract inspections, confirmations, and cut-off tests[248](index=248&type=chunk)[249](index=249&type=chunk) - **Key Audit Matter 2: Impairment of Intangible Assets - Mining Rights**; Due to the material value of the mining rights and the complexity and significant management judgment involved in the impairment test, the auditor identified it as a key audit matter and evaluated the internal controls, external valuation, key assumptions, and calculation accuracy[250](index=250&type=chunk)[251](index=251&type=chunk) [List of Documents for Inspection](index=234&type=section&id=%E7%AC%AC%E5%8D%81%E4%BA%8C%E8%8A%82%20%E5%A4%87%E6%9F%A5%E6%96%87%E4%BB%B6%E7%9B%AE%E5%BD%95)

广州东凌国际投资股份有限公司 2019 年半年度报告全文 广州东凌国际投资股份有限公司 2019 年半年度报告 2019 年 08 月 1 广州东凌国际投资股份有限公司 2019 年半年度报告全文 第一节 重要提示、目录和释义 公司董事会、监事会及董事、监事、高级管理人员保证半年度报告内容的 真实、准确、完整，不存在虚假记载、误导性陈述或重大遗漏，并承担个别和 连带的法律责任。 公司负责人赖宁昌、主管会计工作负责人苏学军及会计机构负责人(会计主 管人员)苏学军声明：保证本半年度报告中财务报告的真实、准确、完整。 所有董事均已出席了审议本报告的董事会会议。 | --- | |---------------------------------------------------------------------------------| | | | 《中国证券报》、《证券时报》、《证券日报》、《上海证券报》及巨潮资讯网 | | http://www.cninfo.com.cn 为本公司 2019 年选定的信息披露媒体，本公司对外披 | | 露信息均以在上述选定媒体刊登的信息为准，敬请投资者注意投资风险。公司 | ...