China Shengmu Organic Milk : Announcements and Notices - Unaudited Consolidated Financial Information of Inner Mongolia Shengmu High-tech Farming Co., Ltd.* An Indirect Wholly Owned Subsidiary of the Company for the Nine Months Ended 30 September 2017

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CHINA SHENGMU ORGANIC MILK LIMITED

中 國 聖 牧 有 機 奶 業 有 限 公 司

(Incorporated in the Cayman Islands with limited liability)

(Stock Code: 1432) UNAUDITED CONSOLIDATED FINANCIAL INFORMATION OF Inner Mongolia Shengmu High-tech Farming Co., Ltd.* (內蒙古聖牧高科牧業有限公司) AN INDIRECT WHOLLY OWNED SUBSIDIARY OF THE COMPANY FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2017

This announcement is made by the board of directors (the "Board") of China Shengmu Organic Milk Limited (the "Company" and, together with its subsidiaries, the "Group") pursuant to Rule 13.09(2) of the Rules Governing the Listing of Securities on the Stock Exchange of the Hong Kong Limited (the "Listing Rules") and the Inside Information Provisions (as defined under the Listing Rules) under Part XIVA of the Securities and Futures Ordinance (Chapter 571, Laws of Hong Kong).

An indirect wholly owned subsidiary of the Company, Inner Mongolia Shengmu High-tech Farming Co., Ltd.* (內蒙古聖牧高科牧業有限公司) (the "Shengmu Holding"), completed the issuance of the first tranche of short-term debentures in the amount of RMB400 million on 23 June 2017.

Pursuant to applicable laws and regulations in the PRC, the unaudited consolidated financial information of Shengmu Holding for the nine months ended 30 September 2017 prepared in accordance with the PRC Generally Accepted Accounting Principles (the "PRC GAAP") (the "Unaudited Consolidated Financial Information of Shengmu Holding") shall be published on the websites of Shanghai Clearing House (http://www.shclearing.com) and China Foreign Exchange Trade System (http://www.chinamoney.com.cn) on or before 31 October 2017.

The Unaudited Consolidated Financial Information of Shengmu Holding is attached as Appendix to this announcement.

The Unaudited Consolidated Financial Information of Shengmu Holding is prepared in accordance with the PRC GAAP, which may require adjustment during the course of auditing. In addition, the information contained therein is limited solely to Shengmu Holding and its subsidiaries, which does not provide a full picture of the business operation of the Group. Shareholders and potential investors should exercise caution when dealing in the shares of the Company and should not rely solely on such information.

By Order of the Board

China Shengmu Organic Milk Limited Shao Genhuo

Chairman

Hong Kong, 31 October 2017

As at the date of this announcement, the executive directors of the Company are Mr. Yao Tongshan, Mr. Wu Jianye, Ms. Gao Lingfeng and Mr. Cui Ruicheng; and the non-executive directors of the Company are Mr. Wen Yongping, Mr. Fan Xiang, Mr. Cui Guiyong, Mr. Sun Qian, Mr. Shao Genhuo and Mr. Zhang Jiawang; and the independent non-executive directors of the Company are Mr. Li Changqing, Ms. Ge Xiaoping, Mr. Fu Wenge, Mr. Wang Liyan and Mr. Li Xuan.

* For identification purposes only

Consolidated Income Statement

Prepared by: Inner Mongolia Shengmu High-tech Farming Co., Ltd.

For the nine-months ended

Items	30 September, 2017	30 September, 2016
(Unaudited)	(Unaudited)
RMB	RMB
I. Operational income	2,011,829,637	2,512,252,966
Income from principal operations	1,940,051,589	2,486,973,083
Income from other operations	71,778,048	25,279,883
Less: Operating costs	1,260,998,243	1,314,277,957
Cost of principal operations	1,156,215,620	1,295,797,037
Cost of other operations	104,782,623	18,480,920
Taxes and surcharges	4,697,991	1,007,251
Selling expenses	218,409,300	214,004,929
Management expenses	65,522,254	94,493,316
Financial expenses	105,941,095	93,338,553
Impairment loss on assets	72,233,521	1,284,501
Add: Gain from change in fair value (loss indicated by "-")	-65,921,130	29,611,561
Income from investment	-8,411,424	-11,123,041
II. Operational profit	209,694,679	812,334,980
Add: Non-operational income	787,724	14,853,562
Less: Non-operational expenses	4,756,022	544,288
III. Total profit (loss indicated by "-")	205,726,381	826,644,254
Less: Income tax expenses	-19,865,767	10,605,419
IV. Net profit ( loss indicated by "-")	225,592,148	816,038,835

Consolidated Balance Sheet

Prepared by: Inner Mongolia Shengmu High-tech Farming Co., Ltd.

As at

Items	30 September, 2017	31 December, 2016
(Unaudited)	(Audited)
RMB	RMB
Assets Current assets:
Cash	732,155,223	984,696,278
Bills receivables	10,604,102	60,200,000
Receivables	1,769,775,866	1,048,586,624
Other receivables	35,505,470	36,678,529
Prepayments	512,658,189	340,659,714
Interest receivable	114,183	160,605
Inventories	715,712,057	928,816,384
Non-current assets due within one year	2,289,399	2,289,399
Other current assets	42,833,183	131,137,222
Total current assets	3,821,647,672	3,533,224,755
Non-current assets:
Available-for-sale financial assets	2,006,500	1,426,500
long-term receivables	16,483,995	19,683,995
Long-term equity investments	104,246,652	112,658,076
Net fixed assets	2,355,986,447	2,274,876,479
Construction in progress	422,816,180	435,491,591
Biological assets	4,281,471,373	3,884,257,232
Net intangible assets	39,354,261	42,082,301
Deferred income tax assets	44,647,434	24,633,663
Other non-current assets	42,776,569	40,115,561
Total non-current assets	7,309,789,411	6,835,225,398
Total assets	11,131,437,083	10,368,450,153