Chaoda Modern Agriculture : ANNUAL REPORT 2018/2019

（Stock Code: 682）

2018/2019

ANNUAL REPORT

• Corporate Information

• Chairman's Statement

• Management Discussion and Analysis

• Corporate Governance Report

21 Environmental, Social and Governance Report

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Profiles of Directors and Senior Executives

Directors' Report

Contents	60	Independent Auditors' Report
Chaoda Modern Agriculture
(Holdings) Limited	65	Consolidated Statement of Profit or Loss and
Annual Report 2018/2019
		Other Comprehensive Income

67 Consolidated Statement of Financial Position

69 Consolidated Statement of Cash Flows

71 Consolidated Statement of Changes in Equity

73 Notes to the Consolidated Financial Statements

130 Five Year Financial Summary

CHAODA MODERN AGRICULTURE (HOLDINGS) LIMITED 2018 / 2019 ANNUAL REPORT

Corporate Information

BOARD OF DIRECTORS

Executive Directors

Mr. Kwok Ho (Chairman)

Mr. Kuang Qiao

Mr. Yang Gang

Non-executive Director

Mr. Ip Chi Ming

Independent Non-executive Directors

Mr. Fung Chi Kin

Mr. Tam Ching Ho

Professor Lin Shun Quan

Mr. Chan Yik Pun

AUDIT COMMITTEE

Mr. Tam Ching Ho (Chairman)

Mr. Fung Chi Kin

Mr. Chan Yik Pun

REMUNERATION COMMITTEE

Mr. Fung Chi Kin (Chairman)

Mr. Tam Ching Ho

Mr. Chan Yik Pun

NOMINATION COMMITTEE

Mr. Fung Chi Kin (Chairman)

Mr. Kwok Ho

Mr. Kuang Qiao

Mr. Tam Ching Ho

Mr. Chan Yik Pun

AUTHORISED REPRESENTATIVES

Mr. Kwok Ho

Mr. Ip Chi Ming

COMPANY SECRETARY

Mr. Yeung Man Chit

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CHAODA MODERN AGRICULTURE (HOLDINGS) LIMITED 2018 / 2019 ANNUAL REPORT

Corporate Information (continued)

STOCK CODE

The Stock Exchange of Hong Kong Limited: 682

AUDITORS

Elite Partners CPA Limited

Certified Public Accountants

PRINCIPAL BANKS

China Merchants Bank Co., Ltd.

China CITIC Bank Corporation Limited

Industrial Bank Co., Ltd.

Shanghai Pudong Development Bank Co., Ltd.

Ping An Bank Co., Ltd.

REGISTERED OFFICE

P.O. Box 309

Ugland House

Grand Cayman

KY1-1104

Cayman Islands

HEAD OFFICE AND PRINCIPAL PLACE OF BUSINESS IN HONG KONG

Room B, 21st Floor

Times Media Centre

133 Wan Chai Road

Wanchai, Hong Kong

SHARE REGISTRAR AND TRANSFER OFFICE

Tricor Abacus Limited

Level 54

Hopewell Centre

183 Queen's Road East

Hong Kong

COMPANY'S WEBSITE

http://www.chaoda.com.hk

http://www.irasia.com/listco/hk/chaoda

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CHAODA MODERN AGRICULTURE (HOLDINGS) LIMITED 2018 / 2019 ANNUAL REPORT

Chairman's Statement

I hereby present the annual results of Chaoda Modern Agriculture (Holdings) Limited (the "Company") and its subsidiaries (collectively referred to as the "Group" or "Chaoda") for the financial year ended 30 June 2019 on behalf of the board of directors (the "Board") of the Company.

REVIEW

In reviewing the past financial year, it is an important year for the pilot reform of the Chaoda business. At the beginning of 2019, the State Council issued the "Several Opinions on Prioritizing the Development of Agriculture and Rural Areas to Address the Issues Relating to Agriculture, Rural Areas and Rural People" (堅持農業農村優先發展做好「三農」工作的若干意見), proposed concentrate on precise policy, decisive battle to overcome poverty and tackle difficulties, consolidate the agricultural foundation, and ensure the effective supply of important agricultural products. This is the 16th consecutive year of the PRC government released the "No. 1 document" (一號文件) to show its concerns over the problem of "Agriculture, Rural Areas and Rural People" in the PRC.

General Secretary Xi Jinping emphasized that the source of food safety is in agricultural products and the foundation is in agriculture. It is necessary to clear the root of the problems by producing high quality products. Taking the quality and safety of agricultural products as a key link in transforming agricultural development methods and accelerating modern agricultural construction. With the most stringent standards, the strictest supervision, the most severe punishments, and the most serious accountability, we can ensure the whole nation "Safety on the tip of the tongue". Following the issuance of the "Regulations on the Food Safety Responsibility System of Local Party and Government Leading Cadres" (地方黨政領導幹部食品安全責任 制規定) issued by the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council in February 2019, the Central Committee of the Communist Party of China and the State Council issued the "Opinions on deepening reform and strengthening food safety task" (關於深化改革，加強食品安全工作的意見) in May 2019, food safety has become an important duty and key task of party committees and governments at all levels in China.

As for the above-mentioned central government's proposal to help the rural areas get rid of poverty, ensure the effective supply of important agricultural products, food safety, etc., being a national key leading enterprise that has been rooted in China for 30 years, Chaoda has taken an initiative role in structural reforms on the supply side of agriculture and tackle the problem of poverty alleviation. The Chaoda new business operation model was highly consistent with national guidelines and policies, which emphasize in protection of food safety, the realization of customized production of agricultural products by connecting the production and consumption, and the effective linkage mechanism between small farmers and modern agriculture. Once again it proves the forward-looking nature, correctness, great development prospects and potential of Chaoda new business operation model.

As the Group needs to adjust and integrate resources from the above-mentionedsupply-side structural reform in agricultural, and at the same time invest resources in technology research and development, enhance the company's capacity and strengthen technological capabilities, so to turn around the current operational difficulties as soon as possible, and lay a solid foundation for the business restructuring and transformation ahead. The financial year ended 30 June 2019 was a difficult and challenging year for the Group. However, despite the active development by joint efforts of management and employees, Chaoda's brand name and reputation are still recognized and affirmed by the society and the public. In June 2019, Chaoda was continuously recognised as "China's 500 Most Valuable Brands" by the World Brand Laboratory, ranking 83rd with a brand value of RMB56.285 billion.

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