2017 t 1 - china agriimg.chinaagri.com/uploads/zlyz/file/2018/07/20/u5b517ff721705.pdf · this...

1 2017 CHINA AGRI-INDUSTRIES HOLDINGS LIMITED | CSR REPORT


03

50

04

52

05

11

15

05

11

15

08

12

21

09

13

26

10

14

30

36

44

ContentsAbout This ReportA Message from the Top ExecutiveAbout UsCompany Profile

Our Business

Corporate Governance

Honors & Awards

Social Responsibility ManagementSocial Responsibility Philosophy

Social Responsibility System

Material Topic Identification

Social Responsibility Communication

Social Responsibility PracticesValue Creation

Social Development

Cooperation and Mutual Benefit

Environmental Protection

Care for Employees

Charitable Work

IndexReaders' Feedback


This report is the ninth Corporate Social Responsibility Report released by China Agri-Industries Holdings Limited.

REPORTING PERIODFrom 1 January 2017 to 31 December 2017. Parts of the report contain information from previous years.

SCOPEThis report covers China Agri-Industries Holdings Limited ("China Agri" or "the Company") and its group companies, including the companies that are principally engaged in biochemical and biofuel businesses (“COFCO Biochemical”). The Company completed the disposal of COFCO Biochemical on 27 December 2017 and has presented the disposed COFCO Biochemical as discontinued operation in accordance with the Hong Kong Financial Reporting Standards in the financial statements for the year ended 31 December 2017. Unless otherwise stated, all data and case studies presented in this report are derived from China Agri and its subsidiaries.

REPORTING FRAMEWORKThis report is prepared in accordance with the Environmental, Social and Governance Reporting Guide (“ESG Reporting Guide”) issued by the Stock Exchange of Hong Kong Limited.

REPORTING IMPROVEMENTSCompared to last year, the following improvements were made to this report: The core CSR issues related to the Company’s businesses and the content of the report were further identified and screened to complete the framework of this report in accordance with the ESG Reporting Guide published by the Stock Exchange of Hong Kong Limited.

DATA COLLECTIONThe content of this report was selected to ensure that it meets the compliance requirement in the ESG Reporting Guide published by the Stock Exchange of Hong Kong Limited, which is in line with international standard for sustainability/social responsibility reporting. The report also took reference from best practices of sustainability management of industry in China and abroad.

About This Report

PUBLICATIONThis report is available in traditional Chinese and English. Electronic copy can be accessed and downloaded from the Company’s website (www.chinaagri.com).

UNAUDITED DATAUnless otherwise specified, the data in this report is unaudited. Please refer to our 2017 Annual Report for the audited consolidated financial statements of the Company for the year ended 31 December 2017 and other details of our financial performance and operating results. The 2017 Annual Report is available on the Company’s website.Unless otherwise specified, the currency shown in this report refers to Renminbi.Certain figures and financial information relating to the year ended 31 December 2017 and the last two years included in this report are not the Company's statutory annual consolidated financial statements for those years but is derived from those consolidated financial statements. Further information relating to those statutory financial statements required to be disclosed in accordance with section 436 of the Companies Ordinance is as follows:The Company has delivered those consolidated financial statements for the years ended 31 December 2015 and 2016 to the Registrar of Companies as required by section 662(3) of, and Part 3 of Schedule 6 to, the Companies Ordinance and will deliver the consolidated financial statements for the year ended 31 December 2017 in due course.The Company's independent auditor has reported on those financial statements. The auditor's reports were unqualified; did not include a reference to any matters to which the auditor drew attention by way of emphasis without qualifying its reports; and did not contain a statement under sections 406(2), 407(2) or (3) of the Companies Ordinance.


“Governing a country relies on appeasing the people, while appeasing the people relies on sufficient food”. Food is China’s strategic material and people’s daily necessity. Food security has been the priority to administer China through the ages, which has always been a key broader strategic issue related to China’s national economic development, social stability and national independence. 2017 is a crucial year to fully implement the 13th Five-Year Plan and advance the structural adjustment, transformation and upgrade. While China accelerates its supply-side structural reform in agriculture to develop the economy of grain industry and construct a leading power of the industry, the development of the grain industry faces new opportunities and challenges.In 2017, we as China’s leading grain and oil enterprise, adhere to the strategic objective of becoming the “world’s leading big grain supplier” by placing the topmost priority on ensuring food security and regarding the boosting of agriculture development, the ensuring of food safety, and the promoting of social progress as the core issues of the Company’s social responsibility. Food safety is the lifeline and core competitiveness of the Company. We focus on promoting the upgrade of our product structure and improving the quality and efficiency of the grain and oil supply system as well as increasing the supply of green and quality agricultural products. Powered by reform and innovation, we uphold the new development conception to provide consumers with safer, more nutritional, and healthier products. At the same time, we endeavor to actively promote product R&D, advocate the concept of healthy life, and constantly enhance customers’ satisfaction and sense of gain while promoting the progress of the industry to contribute to the society by more quality and reliable grain and oil products.As a listed company with a sound foundation for sustainable development, we optimize and improve our capital structure and footprint and re-establish our strategic direction by acquisitions and disposal. On the basis of creating desirable value return for shareholders, we will pursue a more sustainable development.As an enterprise with a strong sense of social responsibility, the Company

actively pays attention to the communication among employees, shareholders, communities and other stakeholders. Being employee-oriented, we focus on the interests of employees and their career development to support a cohesive enterprise. We enhance corporate operation management and core competitiveness, as well as maximize the value of shareholders. We participate in community construction and devote ourselves to public welfare undertakings to build a dedicated enterprise.Looking into the future, the Company will constantly explore management innovation and achieve overall progress by grasping the innovation direction of products and consumption, perfecting corporate value creation, promoting the industrial progress and social development, caring for employees and participating in public welfare undertakings. We will promote the win-win cooperation with our stakeholders, become a grain and oil enterprise that is complied with international standards, and keep fulfilling our CSR in order to contribute to sustainable development.

A Message from the Top Executive

Dong Wei

China Agri-Industries Holdings Limited

Chairman


China Agri-Industries Holdings Limited (“China Agri” or “the Company” ; Stock code: 606) was incorporated in Hong Kong in November 2006 and officially listed on the Main Board of the Stock Exchange of Hong Kong Limited in March 2007. By keeping pace with China’s economic growth, the Company has grown healthily, devoting itself to become an internationalized grain, oil and food processing company in the entire industrial chain by improving its strategic footprint, expanding its production capacity reasonably, and promoting its scale benefits.As a leading agricultural products and food processing company, China Agri engaged in processing of agricultural products such as cereals and sales operations, to provide customers with safe, nutritious and healthy quality products. Our products include edible oils, rice, flour, noodles, bread, beer malt and feedstuffs. The Company’s operation and production facilities and operating assets are located in mainland China, with sales and distribution networks across the country and extending to the international markets.Our business scale, healthy operational performance, industry leadership, as well as outstanding management in sustainable development are recognized by investors. The Company is also selected as one of the constituents of several indexes, such as the Hang Seng Composite Index Series, Hang Seng Stock Connect Hong Kong Index Series, Hang Seng Global Composite Index, Hang Seng Composite Indices Series, Hang Seng Composite Market Cap Index Series, Hang Seng Composite Industry Index - Consumer Goods Manufacturing and Services, Hang Seng Corporate Sustainability Benchmark Index, as well as MSCI Emerging Markets Small Cap Index.

The Company ranked No.86 on the Fortune China 500 list in 2017, ranking the second place in the food and beverage industry.

1 About Us1. Company Profile2. Our Business3. Corporate Governance4. Honors & Awards

Company Profile


Oilseeds processing

Rice processing and trading

Wheat processing

Brewing materials

Capacity Distribution


The disposal of Biochemical and Biofuel Business was completed on 27 December 2017.

General A

dministration

Departm

ent

Risk Control D

epartment

COFCO

Oils

& O

ilseeds

COFCO

Biochemical

COFCO

Grains

Audit D

epartment

Legal Departm

ent

Hum

an Resources D

epartment

Finance Departm

ent

Strategy Departm

ent

*

*

Company Structure

China Agri


COFCO Oils & Oilseeds :

COFCO Oils & Oilseeds: China Agri is one of the largest vegetable oil and oilseed meal producers in China. We are primarily engaged in the sales of soybean oil, palm oil, rapeseed oil, and oilseed meal. Renowned brands include “Fortune”( 福临门 ) , “Fuzhanggui” ( 福掌柜 ), “Sihai”( 四海 ), "Xiyingying” ( 喜盈盈 ), “Guhua”( 谷花 ) and other brands in small and medium-sized packaging. Up till 31 December 2017, we have established 19 oilseeds and oil manufacturing factories in Jiangsu, Shandong, Guangxi, Tianjin, Hubei, Guangdong, Liaoning, Jiangxi, Anhui, Chongqing and Xinjiang, with crushing capacity of 12.93 million tons and refining capacity of 4.88 million tons, as well as set up about 550,000 points-of-sales to sell packaged edible oil. We have achieved a leading position in the domestic market by production and sales.

COFCO Grains :

It covers five major categories: rice, flour, noodles, bread, and brewing materials. The Company has a relatively complete industrial footprint in the major grain production areas in China and has full control over grain resources at home and abroad. The sales network of our products covers the whole country. At present, our annual rice processing capacity is 4.08 million tons. The rice brand “Fortune”（福临门） has ranked first in the national rice market for eight consecutive years. The Company’s annual wheat processing capacity is 3.69 million tons, which has an annual noodle production capacity of 220,000 tons, and an annual bread and pastry production capacity of around 2,000 tons. Our flour brand “Xiangxue”( 香雪 ) has been honored one of the “Chinese Brand-name Products”. We have an annual malt processing capacity of 740,000 tons, accounting for more than 20% of domestic market shares. Our malt exports volume also takes up over 45% of China’s total.

COFCO Biochemical :

It was a leading biochemical enterprise and produced starch, sweeteners, MSG, and related products using quality corns originating from northeast China as raw materials. Boasting extensive experience in the industry, we provided customers with quality food ingredients and food additive solution services. We were one of China's largest starch and fructose manufacturing enterprises and the pioneer of China’s biofuel industry and the largest provider of liquid biofuels, ranking No.1 in the domestic ethanol fuel market. We established the National Energy Research Center of Liquid Biofuels, taking a leading position in China. On 27 December 2017, the Company completed the disposal of the biochemical and biofuel business and the relevant companies are no longer subsidiaries of the Company.

2 Our Business


China Agri is committed to maintaining sound corporate governance by strictly following business ethics, continuously improving our effective accountability mechanism, and implementing transparent operational structure.

The Company attaches great importance to the transparency of business operations and has developed effective measures to protect our shareholders’ rights. In compliance with the Listing Rules of the Stock Exchange of Hong Kong Limited, the Company has established a sound, timely and transparent information disclosure system to ensure the promptness and accuracy of the relevant information being published to the capital market and the public.

The Board of Directors is responsible for the leadership and supervision of the Company, and overseeing China Agri’s business, strategic development decisions and performances. At present, the Board consists of eight members, including three executive directors, two non-executive directors and three independent non-executive directors. In order to strengthen the Company’s information disclosure and internal control, the Board has established the Audit Committee, Remuneration Committee and Nomination Committee, the majority of those members are independent non-executive directors. An Executive Committee is also in place. All committees perform duties according to the delegation determined by the Board of Directors. There was a change in the composition of its Board of Directors in January 2018. Currently, Mr. Dong Wei serves as the Chairman of the Board of Directors and Mr. Wang Qingrong is the Managing Director of the Company.

3 Corporate Governance


COFCO (Zhengzhou) Oils & Grains Industries Co., Ltd. was named o n e o f t h e “ G r a i n and Oil Food Safety I n t e g r i t y M o d e l Enterprises” by Henan Province in 2016.

COFCO Rice (Yancheng) Co. , Ltd. was named one of the “Key Leading Enterprises of Agricultural I n d u s t r i a l i z a t i o n i n Jiangsu Province” and one of the “Demonstrative M a n u f a c t u r i n g E n t e r p r i s e s o f t h e National Assured Grain and Oil Demonstration Project”.

COFCO Eastocean Oils & Grains Industries (Zhangjiagang) Co., Ltd. was honored executive member unit of China's grain industry.

COFCO Malt (Jiangyin) Co., Ltd. was awarded t h e L e v e l 1 W o r k Safety Standardization E n t e r p r i s e s ( Fo o d Production) by the China Association of Work Safety.

Xiamen Haijia Flour Mil ls Co. , Ltd. won t h e “ C o o p e r a t i v e Raw Materials Model Supplier Award of the 11th Rising Stars of the Food Industry”.

COFCO Fortune Foods Sales & Distribution Co. , Ltd.’s “For tune Gold Place of Origin Corn Oil” was selected for BRICS Leaders’ Meetings in Xiamen.

I n D e c e m b e r 2 0 1 7 , COFCO Rice (Xiantao) CO. , Ltd. was named one of the “Key Leading Enterprises of Agricultural I n d u s t r i a l i z a t i o n i n Hubei Province” and one of the “Demonstrative M a n u f a c t u r i n g E n t e r p r i s e s o f t h e National Assured Grain and Oil Demonstration Project”.

COFCO Eastocean Oils & Grains Industries (Zhangjiagang) Co., L t d . w a s n a m e d o n e o f t h e “ K e y Leading Enterprises o f A g r i c u l t u r a l Industrialization in Jiangsu Province”.

T h e “ F o r t u n e Nutritionist Blended Cooking Oil “(" 福临门 " 营养家食用调和油 )of COFCO Fortune Foods Sales & Distribution Co., Ltd. won the “Gold Quality Products Award” at the 8th IEOE China International Edible Oil Industry Expo.

COFCO Fortune Foods Sales & Distribution Co., Ltd. was named one of the “Top 100 Credit Demonstration Units” at the 2017 China Food Safet y Annual Conference.

COFCO (Zhengzhou) O i l s & G r a i n s Industries Co., Ltd. was named one of the “Demonstrative M a n u f a c t u r i n g E nte r p r i s e s o f t h e National Assured Grain and Oil Demonstration Project”.

Feixian COFCO Oil & Grain Industries Company Limited was named one of the “Demonstrative M a n u f a c t u r i n g E n t e r p r i s e s o f t h e National Assured Grain and Oil Demonstration Project”.

COFCO Flour Industry (Haining) Co. , Ltd. was named one of the “Demonstrative M a n u f a c t u r i n g E nte r p r i s e s o f t h e National Assured Grain and Oil Demonstration Project”.

COFCO Malt (Hulunbeier) Co., Ltd. was named a leading enterprise in the industrialization of the agriculture and animal husbandry of Inner Mongolia for five years in a row.

In January 2017

In November 2017

In February 2017

In November 2017

In August 2017

In December 2017

In September 2017

In December 2017

In October 2017

In December 2017

In November 2017

In December 2017

In November 2017

In December 2017

4 Honors & Awards


Social ResponsibilityManagement1. Social Responsibility Philosophy

2. Social Responsibility System

3. Material Topic Identification

4. Social Responsibility Communication

The sustainable development philosophy of COFCO Corporation, China Agri’s parent company, is "Being loyal to National Welfare and Creating Benefits for People’s Livelihood". In upholding this philosophy, China Agri fulfills its responsibilities to employees, consumers, the environment and communities, while creating benefits for its shareholders and investors, as well as fulfilling its responsibilities as a good corporate citizen. We incorporate social responsibility into our corporate strategies and culture. We also pay great attention to values of people and contributions to environmental protection, consumer rights and social welfare in the course of our business operations. We believe that by doing so, we build our corporate reputation, as well as winning the confidence, trust and satisfaction of investors, consumers, and employees.

1 Social Responsibility Philosophy


In 2017, China Agri continued to stick to the concept of the "RESPONSIBILITY TREE". Six key words – faithfulness, integrity, sincerity, virtue, benevolence, and morality – represent six CSR sectors and their corresponding stakeholders. This system is the guiding framework for long-term reference and implementation of our social responsibility practices, which will be summarized, assessed, and improved regularly.

2 Social Responsibility System

Actively participate in public welfare activities to build a spirit of charity

Care for employees’ rights and interests to support a more cohesive enterprise

Improve corporate operations, management, and core competitiveness to create value

Support agricultural development, ensure food safety, and lay the basis for social progress

Realize win-win development with partners

Treasure natural resources, fight environmental pollution, and realize sustainable development


In order to enhance the engagement of its stakeholders and make the report better targeted and received, China Agri identified the materiality of the relevant topics and developed its matrix regarding the material topics in line with the analysis model on topic materiality in the Environmental, Social and Governance Reporting Guide issued by the Stock Exchange of Hong Kong Limited, as well as based on its development strategies and social responsibility system. The Company also referred to stakeholders' opinions.

3 China Agri divided the topics into six categories and identified 16 topics for disclosure, which are of significance for the development of the Company, after having into previous advice of third-party consulting firms into consideration. We sorted out the 16 topics in line with the significance levels for the Company and the stakeholders (as shown in the following chart). We will present the Company's responsibility fulfillment in the 16 topics as precisely and completely as possible.

Material Topic Identification

Importance to Stakeholders Very High

Very High

High

Importance to Com

pany

Public Charities

Volunteer Services

Diversity and Inclusiveness

Promote Industry Progress Reduce Emissions

Boost Suppliers’ Development Eco-friendly Operation

Product R&D

Ensure Market Supply

Support Development of Agriculture, Farmers, and Rural Areas

Workplace Health and Safety

Protect Employees’ Rights and Interests

Food Safety

Risk Control

Anti-corruption

Employee Training and Development


China Agri takes the philosophy of COFCO Corporation –"Being loyal to National Welfare and Creating Benefits for People’s Livelihood"– as its internal values. The Company has achieved win-win results between social responsibility fulfillment and operation sustainability through innovation in business modes and management culture, as well as market-oriented measures.China Agri’s stakeholders mainly include the government, shareholders, farmers, consumers/clients, employees, suppliers, and so forth. Through a long-term communication mechanism with them, the Company is able to learn of their primary needs, as well as adjust its CSR fulfillment strategies and initiatives in a timely manner to meet their expectations.In 2017, China Agri communicated with its stakeholders both online and in-person. In-person communications were carried out through training sessions and exhibitions. Online communications were implemented via new media, such as Weibo and WeChat, by the Company and its business units, which were utilized to spread its business philosophy and achieve positive interaction and communication results.In September 2017, China Agri held the Paddy Rice Cultivating Culture Festival and the Paddy Rice Culture Festival, during which COFCO Rice (Yancheng) Co., Ltd. and COFCO Rice (Jilin) Co., Ltd. were served as main venues, with the aim to establish a good platform between consumers and the Company and effectively spread the paddy rice culture, enabling consumers to better understand “Fortune”（福临门）and COFCO’s brands.

4 Social Responsibility Communication

Mechanism for Communications with Stakeholders

Communication Forms

Communication Forms

Communication Forms Communication Forms

Communication FormsCommunication Content

Communication Content

Communication ContentCommunication Content

Communication Content

Employee representative conferencesTraining for workers at all levels360-degree feedback for managersEmployee satisfaction survey

Consumer survey Community campaignsRoadshowMedia communications Customer relationship management

Major conferencesPolicy consultingReporting

Community publicityTrainingWin-win cooperation

Promote industrialized and intensive operation of agriculture Cultivate new-type agricultural operation modesStrengthen agricultural technology and financial services Boost steady increases in agricultural output and farmers' income

Shareholders' meetingAnnual reportCSR report

Ensure the realization of shareholders' rightsEnsure the maximization of shareholders' value and safeguard their interestsProper disclosure of information

Ensure food security, stabilize the grain and oil marketSupport the development of new-type and eco-friendly agricultureEnsure food quality and safety, provide high-quality nutritious and healthy foodLead the upgrading of the grain and oil industry, and set up industrial standards

Trustable partners and the supply of quality products and servicesCreate widely-known and trustable brandsProvide safe, nutritious and healthy foodProvide comprehensive services of financing, information, technology, and so forth

Ensure employees’ basic rights and interestsEnsure employees’ health and safetyProvide systematic and standardized training sessions, as well as development platforms for employees, enabling them to develop with the Company

MajorStakeholders

Employees

Government

Farmers

Consumers/clients

Shareholders (investors)


Value Creation

Social Responsibility Practices

1. Strengthen Operational

Management

2. Enhance Risk Management

and Internal Controls

3. Strengthen Brand Building

In 2017, China Agri continued to deepen the professional operation, promote fine management, strengthen risk control, boost brand building, and guide the sustainable business development to seek constant improvement in business scale, profitability and operational quality and thereby create a bigger value and return for shareholders.

Revenue (HK$ million)

Total Assets (HK$ million)

Oilseeds processing

Biochemical and biofuel

Rice processing and trading

Wheat processing

Brewing materials 2016

89,163

82,548

20172015

2016

2017

2015

72,126

67,253

67,337

99,181


In 2017, the Company, aiming at constantly improving its business performance, comprehensively deepened the work for quality improvement and efficiency enhancement, streamlined its structure and functional departments, as well as consolidated and optimized the business operation mechanism, fully stimulating its factories' operation vitality, endogenous power and market response capability, with business performance seeing significant growth from a year earlier.

Focusing on the concept of "quality improvement and efficiency enhancement, further exploration in regional markets", COFCO Eastocean Oils & Grains Industries (Zhangjiagang) Co., Ltd. actively pushed ahead the work for quality improvement and efficiency enhancement and completed 26 key improvement programs in the full year, with strong support from the management team as well as the wisdom and efforts of technical backbones. The factory gained good economic results through exchanging with and learning from benchmark factories to consistently improve its craftsmanship and automation levels, and also through expanding transfer business, repairing old equipment and recycling the wastes and other means to reduce costs and improve operation efficiency.

Many Plants of COFCO Oils & Oilseeds Actively Pushed Ahead Work for Quality Improvement and Efficiency Enhancement

1 Strengthen Operational Management

After the acquisition of the small-packaged oil distribution business was completed on 14 September 2017, the Company comprehensively strengthened the production and sales connection of its branded products, optimized production plans, integrated upstream and downstream storage and logistics resources, and established an optimal supply synergy to further improve its response speed and terminal performance.

COFCO Oils & Grains Industries (Jiujiang) Co., Ltd., COFCO Oils & Grains Industries (Huanggang) Co., Ltd. and COFCO Oils & Grains Industries (Chongqing) Co., Ltd., with a focus on the theme of "Comprehensively Promoting Quality Improvement and Efficiency Enhancement, Consistently Enhancing Management Levels", introduced benchmark management and total cost management tools into the strategy formulation, operation analysis, budget management, performance appraisal and other work, as well as in the procurement, processing, sales, hedging, functional management and other aspects, to effectively push ahead the work for quality improvement and efficiency enhancement under a quantifiable framework and build systematic ways of thinking and working methods.They selected 40 dimensionalities in all business links of supply, production, sales and warehousing to make horizontal and vertical comparisons, covering both the total amount and per-capita figures. At the quarterly operation analysis conference, they ranked factories' processing volume, yield, material consumption, costs and expenses with financial data, while looking for roots of problems and learning from each other to make progress.

Case Study No. 1


In 2017, China Agri further enhanced risk management to effectively cope with potential risks and strive to build a sound and comprehensive risk management system. The Company took hedging strategies that effectively managed market risks, thereby avoiding losses caused by sharp fluctuations in the oilseeds market; implemented the established strategies that effectively managed foreign exchange risks and averting risks caused by currency devaluation; and improved its information system to screen out low credit clients and opted for insurance to prevent credit risks.

（1）Continue to Build a Sound Market Risk Management and Control System

◎ Establish and improve the risk management system and risk control mechanism to promote compliance managementChina Agri has formulated the Regulations on Risk Management in the Commodity Market of China Agri, which covers such control mechanisms as the exposure limit management mechanism and loss limit management mechanism, as well as such systems and procedures as annual authorization, hierarchical early-warning, and risk control measures.

◎ Establish a major market risk screening and reporting mechanismBased on internal quantitative standards, China Agri's Risk Control Department established reporting and briefing processes regarding major risks for the Company. The department monitored risks on a daily basis, with major risks reported within one working day.

◎ Establish systematic risk management information databases and a reporting mechanismChina Agri’s Risk Control Department further built up its statistics, analysis, and monitor databases based on various risk control indicators and established its daily report mechanism for risk control data, with reports sent to the management timely, ensuring the accuracy and timeliness of risk control information, as well as the smooth transfer of the information.

◎ Introduce an organizational structure balanced by the front, middle and back platforms to control risks

2 China Agri built an organizational structure balanced by the front, middle and back platforms in its market risk control system to control risks. The structure consists of the front business divisions, middle risk control departments and back audit departments. The front business divisions are in charge of strategy making; the middle risk control departments are responsible for risk control; and the back audit departments take charge of compliance audit. The middle risk control departments maintain independence, not being affected by the front business divisions, which ensures the independence of risk management regarding organization structuring, personnel appointment and dismissal, and reporting paths.

◎ Strengthen the publicity of the risk control concept to foster sound risk management cultureChina Agri publicized the risk control concept to foster sound risk management culture, ensuring and supporting all of the Company’s business with professional services, as well as supporting and promoting business value creation in an all-round way.

（2）Improve China Agri's Credit Risk Control Systems and Build Fully-fledged

Pre-event, In-event and Post-event Credit Risk Control Systems

◎ Enhance construction of information systemChina Agri established the Administrative Measures for Credit Risk Management, as an important guideline for credit risk management, monitoring work and daily business operations.

◎ Improve credit management and control mechanismChina Agri established a credit rating system, credit granting approval procedures, and credit rating models, which served as major tools for customer credit assessment and the calculation of credit lines. The Company set up the KRI quantitative index monitoring system, and strengthened the monitoring mechanism for high-risk and blacklisted customers and suppliers to actively prevent credit risks; established a hierarchical monitoring mechanism for customers and suppliers to track and monitor credit risks at different levels; implemented a review, monitoring and reporting mechanism as well as the procedures of relevant operations for major risks; continuously promoted the construction of the credit risk data information system and improved the monitoring effects; and actively pushed forward the credit insurance work and adopted risk disposal means.

Enhance Risk Management and Internal Control

1 / Complete and Improved Comprehensive Risk Management System


In 2017, China Agri continued to stringently strengthen disciplinary reviews, conduct integrity education, enhance special supervision of important positions, and improve managers’ integrity and self-discipline awareness to prevent corruption.

In 2017, China Agri continued to enhance integrity education and training for managers by making it compulsory for newly appointed managers. The Company held integrity talks with newly appointed managers of our factories, and organized them to study the “Provisions on the Honest and Clean Conduct of the Leadership Members of State-owned Enterprises” and “COFCO's 14 Rules for Managers to Maintain Professional Integrity” to enhance their awareness about incorruptible employment.

As required by COFCO Corporation, China Agri earnestly carried out in corruptible e m p l o y m e n t k n o w l e d g e t e s t s , w i t h managers of operational units and functional departments at all levels participating in the tests. According to the “Interim Measures on Tests of Incorruptible Employment Knowledge for China Agri Managers” compiled last year, the test results would be taken as an important reference for promotion and appointments. In addition, the tests would cover the junior level.

China Agri organized persons in charge of operational units and functional departments at all levels to sign the Letter of Commitment on Integrity to intensify the Company's incorruptible construction, improve the internal supervision and restraint mechanism, and promote managers ' incorrupt ible operations and employment.

Strengthening Integrity Training to Improve Managers’ Integrity and Self-discipline Awareness

Organizing Managers to Par t ic ipate in Incorruptible Employment Knowledge Tests

Organizing Business Units to Sign Letter of Commitment on Integrity

2 / Strengthened Anti-corruption Work

Case Study No. 1

Case Study No. 2

Case Study No. 3


Strengthen Brand Building3

In 2017, following the trend of industrial consumption upgrading, China Agri rearranged and established a new strategic goal of "focusing on rice, flour, oil and other grain, oil and food business, as well as upgrading the company into a grain, oil and food and branded consumer goods enterprise engaged in the whole industry chain". Based on this, the Company rearranged its business portfolio. The Company successfully acquired the branded packaged oil distribution business in mid-September, realizing the connection of upstream and downstream oilseed processing industry chains, as well as gaining the right to use the small-packaged oil brand “Fortune”( 福临门 ) and about 550,000 domestic points-of-sales. The Company sold its bios and feed business, so as to further focus on the development of rice, flour, oil and other core business.China Agri invested resources in brand marketing, product upgrading and other aspects, focusing on the core grain, oil and food business. With an excellent sales and market promotion team and a perfect distributor network, the Company competed with other comprehensive suppliers more effectively, listened to market feedback better and satisfied consumers’ needs timely, therefore boosting sustained growth of the Group’s business scale.

China Agri has a deep insight into consumers’ needs as a leader in China's grain and oil industry. On 26 December 2017, the launch event of Fortune's( 福临门 ) new “Nutritionist Blended Cooking Oil “(营养家食用调和油) was held at the National Convention Center in Beijing. As the first edible oil product with its recipe proportion and nutritional ingredients being disclosed to the public in China, the product has reached the international leading level in R&D technology and product quality, which satisfies consumers' expectations for "food safety" and "dietary nutrition". While promoting the development of the grain and oil industry, “Fortune”（福临门） shoulders the responsibility of leading consumption upgrading in the edible oil industry to deliver safer, more nutritious, healthier and more delicious dining experiences to Chinese.

Releasing New "Blend Oil" to Lead Consumption Upgrading

Case Study No. 1


From 1 June to 31 July 2017, China Agri’s Rice Processing and Trading Business Division launched a "Scanning a QR Code, Winning Cash Red Envelopes" large-scale promotion activity, themed "Hot Selling for Fifteen Years, Classic Taste of Happiness". The Division aimed to enhance the brand awareness of “Fortune”（福临门） and strengthen the product exposure of the brand through the activity on the occasion of the 15th anniversary of the launch of Fortune’s （福临门）China northeast rice series. The Division employed a modern channel promotion approach by adding an award-winning QR code to product packaging. By scanning the QR code, consumers could participate in a lucky draw for red envelope prizes. This stimulated and improved outlet activeness. The utilization of outlet product display and communication platforms, including WeChat, strengthened the brand’s popularity, consolidated the image of Fortune’s（福临门）quality China northeast rice series and attracted consumers to increase sales.From 1 June to 31 July 2017, the activity was held for a total of 1,305 times at 1,305 stores from 56 key account (KA) systems in 117 cities nationwide. Consumers received 162,310 red envelope prizes in 17,840 person-times of buying, getting 161,932 incentives, which were worth RMB 155,890. The total sum of QR code scanning was RMB 177,213. The sales generated in the activity reached RMB 59,638,660. The comprehensive reward-cashing rate was 11%.

"Scanning a QR Code, Winning Red Envelopes" Activity for Fortune’s Quality China Northeast Rice

In 2017, China Agri’s Wheat Processing Business Division launched “Fortune” （福临门）flour and fine dried noodle series, which attracted much attention. Consumers quickly established brand awareness and took a close look at the selling points of the new products. The product launch events were held at plazas or shopping malls with large consumer flows in target cities. Interactive space with area of 200 to 300 square meters was built to bring sunshine wheat fields to city centers. The launch events were characterized by product release, product display, AR interaction, H5, WeChat Shake, product foretaste, interaction with rice and flour chefs, product selling, broadcast and so forth. Moreover, the Division leveraged the large-scale brand activity Spring Ploughing Festival, achieving the first official large-scale exposure of its flour products to dealers and clients.The events reached no less than 40,000 person-times offline, with total offline sales amounting to 105.75 tons. Over 152 million people were covered in the event communication, generating over 190,000 new media article reads, over 6.36 million live streaming views with over 6.5 million likes, over 20.6 million TV views, over 1.18 million page views (PVs) on the mobile app of Douguo.com, and 384,057 clicks on Douguo.com. In addition, twenty-two videos were produced for the events, with no less than 15,000 views.

Launch New Flour and Fine Dried Noodle Series

Case Study No.2

Case Study No.3


A company is the source of fulfilling social responsibility and creating benefit, which playing a key role to the rapid development of social economy. In 2017, China Agri further developed to ensure market supply and food safety; promoted the development of agriculture, farmers and countryside; and drove industrial development, being serving the society.

In 2017, China Agri continued to ensure a smooth supply from the source of the industrial chain by market-oriented means and product quality safety. The Company enhanced the coordination of supply and marketing, and improved procurement, processing, logistics, and sales systems to ensure its grain supply.

Ensure Market Supply1

1.Ensure Market Supply

2.Ensure Food Safety

3.Boost the Development

of Agriculture, Farmers, and

Rural Areas

4.Boost Industry Development

Social Development


Food safety is tied with every person’s health and life safety. In 2017, as an agribusiness company, China Agri steadily promoted its food safety management system that covers the whole value chain, and strengthened a whole food production process tracing to ensure food safety by abiding by the Group’s “General Criteria for Quality and Safety of Suppliers”, “General Requirements for Traceability System Construction”, “Guidelines for Supervision and Inspection of Product Quality and Safety”, and “General Requirements for Management of Food Safety Information”.

In 2017, China Agri kept improving its full-process management and control mode in source, process and terminal management. Management from the source refers to graded and classified management on suppliers. China Agri completed all examination on 69 main ingredient suppliers and 118 minor ingredient suppliers. Process management and control focuses on the improvement of inspection and detection capabilities. China Agri organized 26 companies to take part in a lab detection capability comparison. Samples for the comparison involved oil, oilseed and meal, which were compared in 15 batches, involving 20 indicators and 1,994 testing items. China Agri also organized enterprises to carry out targeted self-check, rectification and improvement programs in line with inspection and detection weaknesses found in the comparison.

At the same time, China Agri further perfected the construction of its traceability system. By taking the opportunity of COFCO’s traceability practice in 2017, China Agri organized subordinate companies to launch traceability emergency drills to check its traceability at large, therefore effectively finding the deficiency of the traceability systems and conducting targeted rectification. The Company also carried out self-checks in eight aspects such as traceability system management and base management. The results show that those subordinate companies made headway in traceability systems to some extent from the previous year.

Ensure Food Safety2

China Agri Continued to Improve Full-Process Management and Control Mode

Case Study No.1


COFCO Oils & Oilseeds continued to promote the construction of a procurement system covering the global raw materials and improved the good cooperation with such suppliers as COFCO International, ADM, Cargill, and Bunge. In 2017, COFCO Oils & Oilseeds purchased more than 11 million tons of soybeans, soybean oil, rapeseed oil, sunflower oil, and palm oil from many places globally.COFCO Oils & Oilseeds has established 13 oilseeds factories along the Yangtze River Basin, which is a main rapeseed production area, Shandong Province, which is a main peanut production area, and the Xinjiang Uyghur Autonomous Region, which is abundant in oilseeds resources. In 2017, COFCO Oils & Oilseeds purchased more than 100,000 tons of home-made raw materials, including peanuts and rapeseeds. The capacity of soybean crushing and soybean oil refining has been growing year by year, effectively ensuring market supply of high-quality and affordable grain and oil products to the society, and making social contribution to the national economy and people's livelihood.

In December 2017, Xiamen Haijia Flour Mills Co., Ltd. successfully applied for the quality mark of “High-Quality Grain and Oil Product in China” for its plain flour. It has been two decades since the Pure Wheat Medium Gluten Flour was launched. The product has become the top choice for consumers in Xiamen to make cooked wheaten food in their daily life. It is available at 90% of grain and oil stores in the city. In 2017, a product manager mechanism was introduced for the sales of the Pure Wheat Medium Gluten Flour in South China. The Pure Wheat Medium Gluten Flour is made from high-quality domestically-grown or imported wheat, featuring advanced processing technology, as well as stringent inspection, logistics and storage processes employed to maximally retain wheat nutr it ion and ensure food safety, bringing safety, nutrition and health to consumers.

COFCO Oils & Oilseeds Improved Its Procurement System Construction

Xiamen Haijia Flour Mills Co., Ltd. Successfully Applied for Quality Mark of “High-Quality Grain and Oil Product in China” for Its Plain Flour

Case Study No.2

Case Study No.3


As a result of the relatively tight agricultural resources, as well as challenges from aging and by-business in rural labor forces, traditional agriculture has to undergo “mode transformation and structure adjustment”, embarking on the road towards modernized agriculture. Adhering to the development goal of agricultural supply-side structural reform, China Agri has been committed to boosting rural and agricultural development and creating opportunities in multiple and innovative ways, as well as increasing incomes and jobs for farmers through training, technical exchanges and other ways, thereby improving the local economic level as a whole.

Factories of the Rice Management Division of COFCO Grains constructed the operating management platform integrating production and marketing by giving full play to their own advantages in agricultural resources, talent reserves, fine management, and others. They also actively cooperated with each other in terms of raw materials purchase, warehousing and logistics, technological innovation and market development, which brought a significant impetus to the cultivation of high-quality rice and industrialization in all regions, therefore increasing farmers' income significantly. For instance, COFCO Rice (Chaohu) Co., Ltd. encouraged farmers to plant 1.8 million mu (Mu is a standard unit of area for farmland in China. 1 mu = 0.6666 hectares or 0.1647 acres) of grains through the establishment of high-quality grain bases, which purchased grains from these farmers at or above the national minimal purchase prices. The company thereby helped more than 1,600 households increase income by over RMB 6.7 million. These factories also actively developed planting bases, tracked and supervised in the whole process and in an all-round way ranging from breeding, fertilization, pesticide application, and growing, so as to control product quality and ensure food security at the sources, and thereby expanding the social influence of the enterprise and the brand. For instance, COFCO Rice (Wuchang) Co., Ltd. promoted the cultivation of 108,000 mu (Mu is a standard unit of area for farmland in China. 1 mu = 0.6666 hectares or 0.1647 acres) grains for the 2017-2018, including 73,000 mu of Daohuaxiang, 20,000 mu of Wuchang Changli and 15,000 mu of Songjing, and targeted 54,000 tons of unprocessed grains. COFCO Rice (Dalian) Co., Ltd. established the COFCO Dandong Yalu River Agriculture Joint Production Specialized Cooperative (hereinafter referred to as the "Donggang Cooperative"). The Donggang Cooperative has 8,000 core rural households, and a total of 18,000 mu of self-controlled farmland, which mobilized more than 10,000 households in the surrounding areas, covering a planting area of 100,000 mu. The Cooperative maximized the per unit area yield profit of japonica rice in Northeast China, promoted the agricultural industrialization of the Yellow Sea rice region, and encouraged farmers to plant rice in Donggang to increase income.

In 2017, COFCO (Zhengzhou) Oils & Grains Industries Co., Ltd. was invited to attend a matchmaking meeting for the production and sales of high-quality wheat held by the Henan provincial government to help the province fulfill its measures of high-quality wheat, high-quality peanuts, high-quality grass & livestock, high-quality fruits & vegetables, as well as regionalized layouts, large-scale operation, standardized production, and industrialized development to promote agricultural supply-side structural reform. The company proactively took part in contract planting, purchasing and processing regarding high-quality high-gluten wheat, played its role of setting example and guidance as a state-owned enterprise, as well as boosted the development of high-quality special-purpose wheat in Henan Province. The company’s contract planting program covered 220,000 mu (Mu is a standard

Based on the integrated procurement platform of COFCO Food Grain, COFCO Flour Industry (Qinhuangdao) Pang Thai Co., Ltd. signed a contract farming agreement with the Shandong Farmers' Professional Cooperative to promote the adjustment of planting structure, and contribute to agricultural supply-side structural reform.

Boost the Development of Agriculture, Farmers, and Rural Areas3

Rice Management Divis ion of COFCO Grains Bui lt Operating Management Platform Integrating Production and Marketing

COFCO (Zhengzhou) Oils & Grains Industries Co., Ltd. Promoted Contract Planting for High-Gluten Wheat in Henan Province

COFCO Flour Industry (Qinhuangdao) Pang Thai Co., Ltd. and Shandong Farmer Cooperative Sign Contract Farming Contract Agreement

unit of area for farmland in China. 1 mu =0.6666 hectares or 0.1647 acres) of high-quality high-gluten wheat, which is expected to enable the company to repurchase 100,000 tons of wheat in 2018 and help farmers increase their income by RMB 20 million. In doing so, the company could achieve “high quality and ideal prices”, and help farmers increase income. Furthermore, four high-quality flour products that the company produces were included in the first list of “High-quality Grains and Oil Products in China”.

Case Study No.2

Case Study No.3

Case Study No.1


In 2017, COFCO Fortune Foods Sales & Distribution Co., Ltd. attended Chinese express industry’s signing ceremony for 2017 as a representative firm of the related industry, and signed a strategic cooperation agreement with China Postal Express & Logistics Co., Ltd. Under the agreement, the two sides will cooperate with one another on cooperation enhancement among central enterprises and exploration of “connection and diversification” cooperation development philosophy, as well as on storage and logistics, distribution business, supply chain financing and big data. They will jointly explore new industry specialization under the Internet economy, combine their core advantages, connect upstream and downstream industries, and expand the industry chain to improve efficiency and growth points, as well as benefit one another and numerous consumers.

Boost Industry Development4

In May 2017, Xiamen Haijia Flour Mills Co., Ltd. organized food companies to attend the China Bakery Exhibition in Guangzhou, providing customers with a whole set of bakery solutions to promote the development of the industry. The company also held bakery presentations, meetings relating to noodle technology and laws & regulations, as well as 12 training sessions throughout the year, bringing new products and technologies to customers, as well as popularizing food laws and regulations.

COFCO Fortune Foods Sales & Distribution Co., Ltd. and China Postal Express & Logistics Co., Ltd. Sign Strategic Cooperation Agreement

Xiamen Haijia Flour Mills Co., Ltd. Attends China Bakery Exhibition in Guangzhou

Case Study No.1

Case Study No.2


China Agri has always insisted on observing, obtaining, and serving clients from the perspective of the entire industry chain, and building a customer-oriented business system. We pay great attention to cooperation with clients, especially with key accounts, believing the biggest value of key accounts is to enable the Company and industry-leading companies to achieve "win-win" strategic cooperation. Centered on the strategic position of building the Company into a one-stop solution provider of food ingredients and feed ingredients, we have established close partnership with leading companies in downstream industries such as food processing, catering, dairy, beverages, drinking wine, feed, breeding and so on, continuously improving the overall image of our Company in the hearts of key accounts and increasing its market share and customer stickiness.

1.Improve the Value of Key Accounts

2.Promote Supplier Management

3.Strengthen Communication with

Distributors

Cooperation and Mutual Benefit


In 2017, COFCO Oils & Oilseeds organized sales personnel to actively visit the market, retain existing clients and develop new superior clients. During channel management, COFCO Oils & Oilseeds kept innovating in business patterns and enhancing client cooperation loyalty. On this basis, COFCO Oils & Oilseeds inspired and led customers for new variety needs, conducted locked and rolling sales, added new service highlights, and reasonably leveraged different regional advantages to deliver a host of services, more comprehensive services, to clients. Through these measures, COFCO Oils & Oilseeds reached cooperation with 30 new clients regarding non-GMO oil and oil products, including 21 new clients regarding non-GMO oil products and nine new key accounts, overfufilling the 2017 work target.

Improve the Value of Key Accounts1

In October, Xiamen Haijia Flour Mills Co., Ltd. joined hands with Angel Yeast Co., Ltd. and the Baker Branch of the China Association of Bakery & Confectionery Industry to co-host the Vocational College Creative Bread Contest in Shanghai, which attracted dozens of vocational colleges across China and cultivated talent for the industry. In December, Xiamen Haijia Flour Mills Co., Ltd. partnered with its client Ronghe (Shanghai) International Trade Co., Ltd. to participate in the organization of the Chinese Pizza Championship. With its pizza flour being designated pizza flour, the company achieved win-win cooperation with the client.

COFCO Oils & Oilseeds Kept Making Innovation in Business Patterns and Developing New Clients

Xiamen Haijia Flour Mills Co., Ltd. Co-hosted Vocational College Creative Bread Contest

Case Study No.1

Case Study No.2


Promote Supplier Management2

COFCO Flour (Qinhuangdao) Pang Thai Co., Ltd. helped dealers conduct training of terminal clients and improve the technical level, achieving win-win cooperation with clients.

The modern food safety environment is becoming increasingly complex and the food supply chain is evolving towards a food supply network. Uncertainties and complexities in industrial chain sources increase difficulties in food safety management and control. China Agri made supplier development plans and comprehensively evaluated eight aspects of a supplier, including the basic qualification of suppliers, in an effort to enhance supplier management and build up a normalized and competitive procurement system and supplier management mode. The Company established a safe, reliable and stable supply and demand cooperation relationship with suppliers to improve the overall level of supply chains and boost business rationalization.

COFCO Flour Industry (Qinhuangdao) Pang Thai Co., Ltd. Helped Dealers Conduct Training of Terminal Clients

Case Study No.1


Strengthen Communication with Dealers3

On 12 April 2017, COFCO Oils & Oilseeds' meal product sales department held the National Meal Product Dealer Annual Meeting. More than 250 people, including representatives of COFCO Oils & Oilseeds' meal product dealers from each region across China, representatives of terminal growers and sales personnel, attended the meeting. At the event, COFCO Oils & Oilseeds gave an impressive analysis of the market situation and conducted exchanges with the participants. In addition, seven client representatives gave a review of the history of their cooperation with COFCO and the status quo of their development, as well as exchanged and discussed operation thinking and profitability modes under the new situation. The meeting further enhanced COFCO Oils & Oilseeds' partnership with its dealers and fully reflected COFCO Oils & Oilseeds’ belief of developing together and achieving mutual benefits and win-win cooperation with clients. The meeting played an important role in promoting business development and improving teams' anti-risk capabilities and profitability.The department, the most important arm of COFCO Oils & Oilseeds, undertakes the sale of almost 80% of oilseed processing products, serving as the bridge between the enterprise and the market. COFCO Oils & Oilseeds will fully support the sale of meal products and boost brand value through reform and resource optimization, so as to enable partners to get more and better services.

In 2017, a delegation of COFCO Fortune Foods Sales & Distribution Co., Ltd. visited Suning's headquarters and signed a strategic cooperation agreement with Mr. Wang Di, Executive Vice President of Suning Commerce Group's supermarket unit. The two sides will explore comprehensive cooperation modes, including customization and exclusive supply, and provide customers with more mid-level to high-end customized products. According to the agreement, the company will give top priorities to Suning supermarkets in providing product resources such as debuting products, customized products and exclusively supplied products, as well as increase the number of mid-level to high-end products to satisfy customers' purchase needs in pursuit of quality and personalization. In addition, the company will explore and study Suning.com's consumer data to provide customers with more precise and superior services and develop personalized customized products.

COFCO Fortune Foods Sales & Distribution Co., Ltd. Signed Strategic Cooperation Agreement with Suning Commerce Group's Supermarket Unit

COFCO Oils & Oilseeds' Meal Products Sales Department Held National Meal Product Dealer Annual Meeting

Case Study No.1

Case Study No.2


China Agri has actively responded to the national call by attaching great importance to environmental responsibilities of corporations. Abiding by the development concept of “green industrial chain, low-carbon quality products”, the Company made great efforts in environmental protection, comprehensively tapped the potential of energy conservation and emissions reduction in all segments, exploring the new development path of low input, low consumption, low emissions and high yield. The Company has reduced the consumption of energy and water resources as well as pollutant emissions by promoting environment-friendly production, resource recycling and other measures, realising sound economic returns and social benefits. By fulfilling the social responsibility, the Company promoted sustainable development of its own as well.

In 2017, China Agri significantly reduced its resource consumption and pollutant emissions through several measures of energy-saving, water-saving and environmental technology improvement. In 2017, the Company decreased its total water consumption by 255,073 tons, waste water discharge by 1,073,347 tons, COD by 4 tons, ammonia nitrogen by 5 tons, SO2 by 211 tons, and oxynitride by 283 tons from the previous year.

1.Fulfilling Energy Conservation and

Emissions Reduction

2.Advocating Recycling

3. Clean Energy

4. Water Resources Management

Environmental Protection


Environmental statistics vary from division to division according to different production conditions. For instance, the consumption of energy and resources is comparatively less and has little influence on the environment during the production and processing of rice, and therefore data is only available for five indicators including CO2 discharge, intensity of CO2 emissions, comprehensive energy consumption, intensity of comprehensive energy consumption and electricity. As methane is poisonous gas, China Agri strictly follows the national laws and regulations and ensures no atmospheric emissions by consuming residual methane artificially when methane output is higher than its utilization during production. The Company's business activities will not have a big impact on the environment and natural resources.(Data exclude the Biochemical and Biofuel Business that was disposed on 27 December 2017.)

Oilseeds Processing Business Rice Processing and Trading Business

B r e w i n g M a t e r i a l s Business Wheat Processing Business

Total Water Consumption(Unit: ton) 3,476,206↓ (3,514,531) - 3,996,089↓ (4,212,837) -

Waste Water Output(Unit: ton) 2,824,574↓ (2,963,580) 375,290 3,231,119↓ (3,303,317) -

Waste Water Discharge(Unit: ton) 1,600,509↓ (2,963,580) 361,922 3,231,119↓ (3,303,317) -

COD (Unit: ton) 54.26 ↑ (50.58) 36.30 285.93↓ (330.06) -

Ammonia Nitrogen(Unit: ton) 4.85 ↑ (4.66) 1.25 18.55↓ (25.47) -

SO2(Unit: ton) 383.10↓ (565.65) - 192.20↓ (220.81) -

Oxynitride(Unit: ton) 306↓ (531) - 109↓ (167) -

CO2 Discharge(Unit: ton) 236,462 ↑ (187,923) 257 ↑ (248.3) - -

Emissions Intensity of CO2 (Unit: ton/RMB10,000) 0.046 ↑ (0.041) 0.000314↓ (0.001) - -

Comprehensive Energy Consumption

(Unit: ton of standard coal equivalent)379,328 ↑ (365,545) 17,181 ↑ (9,101) 82,858↑ (80,461) 33,606↑ (28,977)

Comprehensive Energy Consumption Intensity(Unit: ton of

standard coalequivalent /RMB 10,000)0.07↓ (0.08) 0.02-(0.02) 0.47↑ (0.37) 0.04↓ (0.05)

Coal(Unit: ton) 140,131 ↑ (135,834) 666.65 47,131↑ (38,522) 1,758.86

Electricity(Unit: 10,000 kWh) 55,731 ↑ (48,388) 13,219 ↑ (3,066) 10,254↑ (9,546) 22,668↑ (17,482)

Natural Gas(Unit:10,000 cubic meters) 709↓ (800) - - 107.01

Steam(unit: MkJ) 4,711,753 ↑ (2,359,335) - 678,180↓ (708,427) -

Methane Yield(Unit:10,000 cubic meters) - - - -

Methane Utilization(Unit: 10,000 cubic meters) - - - -

comprehensive energy consumption/t

production(Unit: ton)30.15 10.43 121.7 12.92

water consumption/t production(Unit: ton) 0.355 - 5.87 -

Purchase volume of packing materials

(Unit: ton/ strips)105897 tons Packaging bags：

29700000 strips 604 tonsWoven bag：105210000 strips

Non-woven fabrics：23240000 strips

Plastic coiled materials：650 tons


Fulfilling Energy Conservation and Emissions Reduction1 In 2017, China Agri vigorously advocated the application of new technologies and craftsmanship for energy conservation and emissions reduction during the process of expanding and rebuilding its capability, and adjusting its industrial structure.

China’s environmental protection is grim currently as coal fired boiler will be phased out and the cost of steam increases gradually. COFCO Oils & Oilseeds realized the cyclic utilization of excess heat through technical reformations such as improving the efficiency of boilers, exploring the reutilization of excess heat, and optimizing heat-exchange equipment to increase the heat utilization of coal and steam, reduce cost, improve quality and efficiency, and cut the emissions of CO2, oxynitride, and sulphide. COFCO Oils & Oilseeds has therefore made great contribution to addressing climate change and improving air quality.In 2017, COFCO Oils & Oilseeds worked out its management system for energy saving and environmental protection in all sectors to comprehensively tap the potential of cost reduction and efficiency improvement in all segments, advance source control and the refinement of its process management, deepen excess heat exchange in all segments, the improvement of energy efficiency, comprehensive recovery and utilization of water resource and the progress of technology, as well as reduce the consumption of power, steam and water and the pollutant emissions in the productive process in full measure, realizing low-cost production and environmental protection and improving internal competitiveness. According to the measures for thermal energy saving in the system, COFCO Oils & Oilseeds has conducted 34 equipment and technological transformations including the technical modification of boilers’ steam production per ton of coal, the excess heat recovery and utilization of boiler flue gas, the excess heat recovery and utilization of extractor DC emissions, refining oil products and the heat exchange of unrefined oil, heat loss reduction by spraying and insulating of extractor shell, and the marching replacement of heat exchanger, realizing the thermal energy saving of 5,056 tons of standard coal equivalent, significantly reducing the emissions of greenhouse gas and earning RMB 10.54 million accumulatively.

Plants under COFCO Oils & Oilseeds Took Measures to Save Energy and Cut Emissions

Case Study No.1


Advocating Recycling

China Agri has been actively exploring recycling to transform waste into assets in manufacturing, recycle these resources and develop circular economy to improve the utilization efficiency of its resources and energy, as well as follow a low carbon development path of low-energy consumption, low emissions, and low pollution.

In order to conserve resources, realize the multistage utilization of the resources, and implement the low-carbon development path of low energy consumption, low emissions, and low pollution, COFCO Oils & Oilseeds has effectively relieve the pressure on resources and energy by utilizing clean production process, disposing materials and waste via resource recycling, harmlessness, and minimization, enhancing the integrated utilization of resources and developing circular economy. According to the power-saving methods of the management system for energy saving and environmental protection in all sectors, COFCO Oils & Oilseeds has combed its power transmission and distribution system and motor system, conducting 28 technical reformations such as the frequency conversion retrofit of motors, the transformation and reduction of water pumps by cooling process, and the power saving by adopting high-efficiency appliances. COFCO Oils & Oilseeds realized the energy saving of 930 tons of standard coal equivalent and saved capital of RMB 10.55 million a year.With the increased sales of corn oil and sunflower seed oil in recent years, COFCO Oils & Oilseeds needs to build new plants or conduct transformation to improve capacity due to the serious lack of current winterizing capacity in the plants. COFCO Oils & Oilseeds also on longer needs extraction processing and marketing due to the price hike of palm oil, while the extraction workshops have thus seen low utilization and unused equipment and cannot be fully utilized. After deeply researching the principles of oil processing, COFCO Oils & Oilseeds transformed the fractionation facilities into multi-functional facilities for both extraction and winterizing process, making use of the similar principles of the two processes. The resources are used efficiently by the multi-purpose and flexible utilization of a set of instruments, which invigorates the fixed assets and reduces the investment in new equipment. In the case of improving the winterizing capacity

2

Plants under COFCO Oils & Oilseeds Promoted Circular Economy by Using Clean Production Process

Case Study No.1

from 200T/D to 500T/D, while new construction requires an investment of about RMB 8 million and the transformation from extraction to winterization needs an investment of only RMB 1 million, RMB 7.03 million of construction capital will be saved thereafter.


Clean Energy3 Energy shortage has attracted great attention from countries all over the world. People are seeking a development path that is economically feasible and sustainable in terms of resources to solve the problems of energy and environment simultaneously. In 2017, China Agri continued to promote the extensive application of fuel ethanol and actively studied the application of other clean energy sources to ease energy pressure.

On 18 November 2014, the National Development and Reform Commission issued and implemented an implementation plan on the comprehensive upgrade project for the energy conservation and environmental protection of coal fired boilers. According to the requirement of the implementation plan on the governance of coal fired boilers in Hebei Province, all coal fired boilers with a volume of 10 tons and below should be eliminated by the end of 2017. The Hengshui Municipal Environmental Protection Bureau required that all coal fired boilers with a volume of 10 tons and below should be phased out and banned by the end of June 2016. However, companies could transform those boilers to clean coal (semi-coke) boilers, which could be used continuously if the emissions meet the discharge standard. In November 2016, the company conducted a semi-coke technical transformation on the 2# coal fired boiler. In July 2017, the 1# coal fired boiler was removed. In September 2017, the company newly installed a 15-ton gas fired boiler at the original site of the 1# coal fired boiler. In October 2017, the semi-coke boiler and the original chimneys of the coal fired boilers were removed.

COFCO Biochemical Energy (Hengshui) Co., Ltd. Eliminated Two 10-Ton Coal Fired Boilers

Eliminated coal fired boilers Newly installed gas fired boilers

Case Study No.1


Water Resources Management4With the growth of the world’s population and the promotion of industrialization in recent years, the shortage of water resources has become a serious topic all over the world. In 2017, China Agri continued to take multiple measures to strengthen the management of water resources in order to save water.

In 2017, COFCO Oils & Oilseeds combed the water consuming points and water saving points in all segments according to the methods of water resource utilization in the management system for energy saving and environmental protection in all sectors. COFCO Oils & Oilseeds has achieved the multistage and cascade utilization of water resources by 15 water-saving transformations such as conducting the multi-purpose and multi-string of the water within and between processes, recycling condensation water, and using reclaimed water for greening and the prescription for water treatment, saving water of 91,682 tons.

With the implementation of industrial standards such as the standard of water pollutants discharge in the starch industry and the successive increase of local standards for water pollutants, among COFCO Biochemical’s companies, those did not have phosphorus removal facilities faced an urgent compliance risk. Therefore, the companies of COFCO Biochemical all selected the chemical phosphorus removal process with high operation stability and cost, realizing total phosphorus removal by increasing phosphorus removal chemical feeding facilities for wastewater, phosphorus removal sludge dewatering equipment and coagulation sedimentation tank. The companies reduced 83 tons of total phosphorus emissions through a series of initiatives.

COFCO Oils & Oilseeds Conducted Water Saving Transformation to Achieve Multistage Utilization of Water Resources

COFCO Biochemical Implemented Comprehensive Treatment Project for Total Phosphorus Emissions Reduction

Total phosphorus processing facility of COFCO Bio-Chemical Energy (Gongzhuling) Co., Ltd.

Total phosphorus processing facility of Yellow Dragon Food Industry Co., Ltd.

Case Study No.1

Case Study No.2


Employees are the most precious resource and wealth for an enterprise, which are also an important basis for the further development. China Agri always concerns the self-realisation of employees. Through creating transparent corporate culture, the Company is committed to help every employee achieve their personal development.China Agri adheres to the "People First" management philosophy and “Employees First” corporate culture. The Company established a law-based, harmonious and efficient employment system, protecting the rights and interests of our workers. We attach great importance to our employees' value realisation, providing them with multiple development platforms. The Company always pays attention to occupational safety and health as well as conducts multiple recreational activities for employees.

1.Safeguard the Rights and Interests of Employees2.Attach Importance to Employee

Development and Value

Realization3. Workplace Safety and Health4.Care for Employees

Care for Employees


As of 31 December 2017, the total number of employees at China Agri

was 18,307 (27,413 in 2016).

Since the Biochemical and Biofuel Business was disposed on 27 December 2017, this figure did not include 9,167 employees of the Business.

73%

60%

17%

11%

7%

4%

27%Male13,403 (Person)

（18,477 in 2016）

Female 4,904 (Person)

（8,936 in 2016）

Aged ＜ 35: 11,070

(Person) (16,724 in 2016)

Aged 41-45: 2,034 (Person) (2,742 in 2016)

Aged 46-50: 1,318 (Person) (2,193 in 2016)

Aged ＞ 51: 684 (Person) (823 in 2016)

Aged 36-40: 3,201

(Person) (4,935 in 2016)

Safeguard the Rights and Interests 1 China Agri aims to establish a legal, harmonious, efficient and stable employment system. The Company respects and protects the rights and interests of its employees, strictly abiding by China’s Labor Law, Labor Contract Law, and other laws and regulations, as well as preventing child labors. We treat every employee equally to make sure offer of employment, wages and promotions are not discriminated against for their ethnic group, race, nationality, gender, religion, age, sexual preference, political faction and marital status. The Company makes salary payments, overtime payments and other benefits according to China’s Labor Law and implements a comprehensive calculation work time system. The Company strives to improve its employee management systems on an ongoing basis and has established sound supervisory systems to protect labor rights, which is mainly shown in the following aspects:

1. The Company signs labor contracts with employees in accordance with national and local laws and regulations, and fulfills its duties according to law and contract. In the process of signing, renewing, and terminating labor contracts, we follow legal procedures, prevent the policy on forced labor and protect the legitimate rights and interests of our employees.

2. In accordance with national and local laws and regulations, we pay social insurance for our employees. We provide them with a good variety of benefits, including supplementary medical insurance, corporate pensions, traffic allowance, and lunch subsidies. We also arrange regular physical checkups, have a medical insurance system for major diseases, and disseminate information on physical and mental health maintenance.

3. The Company formulates rules and regulations of the enterprise in a practical manner. We carry out regular compliance assessments of human resources management at our subsidiaries, using both internal and external audits, in order to ensure that our employee relations system is in compliance with state laws and regulations and the interests of all employees are protected.

4. We encourage employees to enjoy their legal rights of taking leave. In addition to statutory annual leave, employees enjoy paid leave every year, whose entitlement is based on the number of years employed.

We attach great importance to the employee representative conference system. We have established a trade union to help safeguard employee rights. The employee

Gender

Proportion

of Employees

China Agri

Employees’ Age

Distribution in

China Agri

*

*


representative conference convenes at least once a year to give our workers an opportunity to learn about corporate developments and major issues concerning their interests, as well as providing a communication channel for them to express their views. The Party Committee of China Agri and its trade union hold the symposium each year for employee representatives. During the meeting, we solicit opinions and suggestions for corporate development and answer any questions employees may have.

China Agri has built a complete remuneration management system to ensure competitive salary benefits for employees and allows employees to enjoy incentive orientation associated with performance results, reflecting performance first and good work deserving good pay.

In 2017, China Agri, led by the "13th Five-Year Plan", focused on two core tasks of "integration" and "development", strengthened professional operation, proactively expanded markets, forged ahead aggressively, comprehensively strengthened team building, adjusted the operating mechanism and optimized the strategic layout, as well as improved quality and efficiency. In 2017, we hold the ROE as the core indicator of business assessment, and the total profit as the auxiliary target. The Company put the integration of assets, quality and efficiency enhancement, operating income, brand business development at the top of its agendas, while seeing the "major quality safety accidents, major cases involving violation of laws and regulations, major risk events, and legal disputes" as the four basic bottom lines, to promote the formation of a virtuous cycle of business operations, and the release of scale advantages.

1.Employee Career Development

China Agri always adheres to the talent-based principle and continuously explores the growth mechanism of talents to provide diversified growth space for employees. On the basis of clarifying the path of career promotion and development for employees in management and professionalism, the Company further opened up the internal boundary for talents to provide a channel for the flow of talented people across institutions. In 2017, the Company actively promoted the reserve talents plan and selected young cadres with high potential and outstanding performance to strengthen work ability of the cadre team and guarantee stable organizational structure. We also conducted systematic education and training in rotation under the theme of "understanding politics, business and management" to promote the sustainable development by enhancing team capability. The Company broke the traditional concept and reduced the number of managerial positions in order to further establish a streamlined and efficient functional headquarters and to realize a "quality" "enhancement" based on "downsizing" of "quantity." We also adjusted the position management mechanism from the traditional "job hierarchy based on position hierarchy" to the "1 + N" mechanism in accordance with position map. This not only simplified the management level, shortened the decision-making process and improved the management efficiency, but also broadened the coverage of talents and provided a more open platform for the growth of talents.

2.Employee Competency Improvement

China Agri has always regarded employees’ professional skill development as the most valuable strategic investment. We develop a unique employee training and professional skill improvement system and create learning opportunities to ensure that employees are able to upgrade their skills and knowledge on an ongoing basis. We have improved the competencies of the management team, as well as their leadership and professional skills, at all levels. We have paid special attention to the development of young and key employees. The Company’s staff training rate was 100% in 2017.

In 2017, China Agri actively created learning opportunities for young employees and ensured employees can continuously improve their work performance by combing the existing training system, applying scientific training management methodology, establishing an internal trainer operation mechanism, strengthening the management trainee project and other distinctive excellent and efficient curricula.

Attach Importance to Employee Development and Value Realization2


In 2017, COFCO Oils & Oilseeds organized 11 training sessions to promote the integration of employees and the unity of business languages, and to enhance communication and exchange in all aspects of the value chain and improve the basic literacy of employees. The trainings cover business knowledge of oil and oilseeds business model, futures hedging model, financial fundamentals, main materials procurement, oil and oilseeds processing technologies, meal products sales, packaged oil sales and risk control management. With these trainings, COFCO Oils & Oilseeds intended to strengthen the communication and collaboration in all aspects through the introduction of each value chain in the business so as to realize the result of “one plus one is greater than two.”

COFCO Oils & Oilseeds Conducted a Series of Business Trainings

In the second half of 2017, COFCO Fortune Foods Sales & Distribution Co., Ltd. (hereinafter referred to as Fortune Company) launched the new Nutritionist Blended Cooking Oil by making a lot of efforts in the market research, systematic R&D, and elaborate production, with the aim to provide consumers with healthy and nutritious edible oils. Fortune Company organized a training for its supervisors nationwide on 20-21 November to allow more than 2,300 shopping advisors to better serve customers, publicize the healthy life concept and thereby lift the ideological understanding by the ongoing training.

This training gathered 47 outstanding shopping advisor nationwide and presented them with the concept of the "Yingyangjia" ( 营养家）that is "a variety of nutrition guarantees healthy". An analysis on a variety of nutrients of the "Yingyangjia", such as phytosterols, vitamin E, linoleic acid, oryzanol, and squalene, which are not contained in a single-component edible oil, was given during the training. The formula and various nutrients of the new product were also introduced in detail. Through on-site experience and explanations, COFCO's image as a responsible enterprise for national food safety has been highlighted and its management philosophy has been strengthened to provide people with safe and healthy edible oil products. As a result, all shopping advisors have regarded "leading the market to benign and healthy development" as their own social responsibility.

COFCO Fortune Foods Sales & Distribution Co., Ltd. Successfully Organized Nutritionist Blended Cooking Oil Training Activity for Its Supervisors Nationwide

Case Study No.1

Case Study No.2


In October 2017, COFCO Eastocean Oils & Grains Industries (Zhangjiagang) Co., Ltd. carried out the job skill upgrading competitions, themed "learning and competing, specializing in certain field, showing ingenuity, and enhancing quality and efficiency". The machine maintenance and electrician test was divided into the written and practice examinations, involving machine maintenance safety guidelines, knowledge of using electricity safely and road traffic safety, "three one stops", "ten prohibitions", basic knowledge of mechanical maintenance, common fault code of PLC, common sense of first aid for electric shock, and food production safety. The test for flour forklift truck drivers involves "obstacle avoidance and carrying goods". There were also tests regarding “steaming cakes” for flour R&D and laboratory baking technicians. Overall, more than 300 employees participated in the competitions, which improved the skills of the staff, promoted the professional level of technical talents, and fostered the spirit of craftsmanship.

On 23 July 2017, COFCO Biochemical officially established COFCO Bio-Chemical University and planned to carry out basic professional skill course system for 400 engineers, including 20 majors in seven series, with a total of about 600 learning hours, covering 19 professional courses. By the end of 2017, the course of the Principles of Chemical Industry had been launched, with 133 people receiving the training. At the same time, a basic training course for the procurement management team of 190 people was set up. According to the assessment results from internal and external experts, a total of 884 scientific and technological personnel were selected, including 198 engineers with advanced technical position or above.

In 2017, COFCO Grains carried out a variety of skills contests, covering three categories of beer malt, rice and flour, as well as six types of work, at COFCO Malt (Jiangyin) Co., Ltd., COFCO Malt (Hulunbeier) Co., Ltd., COFCO Rice (Jilin) Limited, and COFCO Flour Industry (Haining) Co., Ltd., in which 387 employees from 32 companies of COFCO Grains participated. Leaders of the labor union of the group provided guidance and presented prizes for the participants. Through the skills competitions, a total of 15 excellent participants were selected, including one breaking the internal records (rubber covered roller replacement). These winners would be recommended to go in for technical expert appraisal activities organized by the group and the State-owned Assets Supervision and Administration Commission.

COFCO Eastocean Oils & Grains Industries (Zhangjiagang) Co., Ltd. Carried out Job Skills Upgrading Competitions

COFCO Biochemical Officially Established COFCO Bio-Chemical University

COFCO Grains Carried out Various Kinds of Skills Competitions

Case Study No.3

Case Study No.4

Case Study No.5


In 2017, COFCO Malt (Dalian) Co., Ltd. carried out steps for the qualification as an occupational health infrastructure construction demonstration enterprise. To this end, the company organized the occupational health safety management knowledge training, revised and improved occupational health management systems and held special programs for safety protection and potential risks identification. Through these moves, the company established a fully-fledged occupational health management system and responsibility system, improved the safety consciousness of all employees, and eventually attained its goal of being qualified as an occupational health infrastructure construction demonstration enterprise. In September 2017, the company passed the occupational health demonstration enterprise acceptance tests of the Dalian Administration Bureau of Safety Working and was honored as the “Infrastructure Construction Demonstration Enterprise of Dalian City”.

Workplace Safety and Health Care for Employees3 4In 2017, China Agri continued to promote its efforts in workplace safety and safety construction regarding special safe production programs as a major control measure to prevent dangerous sources so as to specify safe production responsibilities in each hierarchical level. Within the year, the Company added four regulations including the Safety Management Regulations of COFCO Oils & Oilseeds on Loading and Unloading of Hazardous Chemicals and the Safety Management Standards of COFCO Oils & Oilseeds for Leaching Workshops, as well as continued to implement production and quality safety management regulations of our parent company, COFCO Corporation.

China Agri enriches the leisure life of its employees through various cultural and sports activities. We also provide those in financial difficulty with assistance to help ease their pressure and show concern for their live, embracing the atmosphere of warmth and care of our enterprise. The Company enhances the cohesion and loyalty of its team members and offers them a sense of belonging based on a coherent and positive corporate culture with the motto, “Work with Passion and Live a Happy Life”.

In 2017, the Labor Union of COFCO Oils & Oilseeds established cultural and sport clubs for employees, involving various activities such as basketball, football, badminton, swimming and body fitness, with wide participation of employees. In July, 2017, the employees from the cultural and sport clubs of COFCO Oils & Oilseeds actively participated in the 5th “New Culture Cup” contests of ball games and tug-of-war organized by COFCO Corporation, which achieved outstanding achievements and won honors for the Division. The Division continuously improved employees’ happiness and sense of gains through cultural and sport activities as well as a sense of belonging and recognition, and created a harmonious and upward cultural atmosphere.

Cultural activities are a stage for employees to show their talents, which are also an important form to cultivate their tastes. In 2017, China Agri continued to carry out cultural and sport activities against the backdrop of traditional festivals to enrich employees’ leisure life through employee clubs.

1/Activities Supporting Physical and Mental Health of Employees

COFCO Malt (Dalian) Co., Ltd. Developed As An Occupational Health Demonstration Enterprise

Labor Union of COFCO Oils & Oilseeds Built Cultural and Sport Clubs for Employees

Case Study No.1

Case Study No.1


C h i n a A g r i a c t i v e l y participated in the “COFCO Miaohui” Calligraphy and P a i n t i n g P h o t o g r a p h y ac t iv i t y. The number of selected works, exhibited works and award-winning works were the highest among all the exhibitors of the group. COFCO Grains won the "Best Organization Award" of the activity.

On 12 May 2017, the League Committee of COFCO Oils & Oilseeds organized young employees to visit the Beijing plant of COFCO Coca-Cola Beverages Ltd. to celebrate the 98th anniversary of the May Fourth Movement and the 95th anniversary of the China Communist Youth League. Young employees had an in-depth understanding of Coca-Cola’s development history and the relations with COFCO through the site visit, debriefing and firsthand experience. They also learned about Coca-Cola’s production technologies as well as Coca-Cola’s outstanding experience in brand construction and the establishment of enterprise culture. The activity was designed to guide and strengthen young employees’ learning and understanding of brand marketing and mobilize their active devotion to business development so as to contribute their youths and strength to the COFCO Oils & Oilseeds’ bright future.

Young Employees of COFCO Oils & Oilseeds Visited Beijing Plant of COFCO Coca-Cola Beverages Ltd.

China Agri Participated in “COFCO Miaohui” Calligraphy and Painting Photography Activity

Case Study No.2

Case Study No.3


2 / Care for Employees

An employee of COFCO (Dongguan) Oils & Grains Industries Co., Ltd. was hospitalized with leukemia and faced financial difficulties. The company quickly called on other factories and employees to raise money for her, which mobilized 306 employees to donate RMB 37,064. Through the donation, the company conveyed the posit ive energy of love, shouldered social responsibility and created a good atmosphere of mutual assistance, solidarity and friendship.

In 2017, COFCO Yellowsea Oils & Grains Industries (Shandong) Co. , Ltd. always practiced the principle of helping the valuerable groups and actively fulfilled social responsibilities by carrying out charity activities externally and caring for employees in financial difficulties in-house. The company released the Regulations for Helping Employees in Financial Difficulties and the Autumn Learning Assistance Rules, establishing supporting groups in divisions and formulated assistance planning quarterly. To address the needs and practical difficulties of employees in difficulties, the company conducted various activities, such as family visits, career talks, donate materials, rent reduction, fund-raising, visit for sickness absence, supporting the sales of agricultural products, and holiday greetings. Up to now, the company has helped 32 employees and party members in difficulties.

COFCO Malt (Jiangyin) Co., Ltd. has 203 employees. Under the care of the party branch, labor union and leaders, the company has established the assistance-providing mechanism for employees in f inancial difficulties. Every year, the company will provide assistance to employees in straitened circumstances, make application to the Jiangyin High-tech Industry Development Zone for subsidies, solicit donations from employees, participate in online donations such as Shuidi crowdfunding and make donations to employees in financial difficulties in the name of the company, and so on. In 2017, the company subsidized RMB 10,800 to two employees in financial difficulties. In addition, leaders and most of the employees of the company participated in and called for the donation for an employee in a Shuidi crowdfunding. The donation is estimated to be nearly RMB 10,000. In 2018, the company will make application to the Jiangxi High-tech Industry Development Zone for subsidies in favor of two employees in financial difficulties.

Employees of the COFCO Industrial Park in Guangdong Made Donations to Colleague in Need

COFCO Yellowsea Oils & Grains Industries (Shandong) Co., Ltd. Held Public Welfare Activities to Care for Employees

COFCO Malt (Jiangyin) Co., Ltd. Showed Care for Employees in Difficulties

Case Study No.1

Case Study No.2

Case Study No.3


Communities like soil on which a company relies for existence and development, and the healthy development of the society cannot be realized without every “corporate citizen” getting involved. China Agri always pays attention to the combination of its economic benefits and social benefits. We also give back to the society through public activities in education, poverty alleviation and other sectors, making use of its own advantages.In 2017, China Agri made external donations by strictly complying with the External Donation Management Measures implemented by parent company COFCO Corporation. The Company donated over RMB 746,000 for disaster assistance, poverty alleviation, the physically challenged, and impoverished students.

1. Community Building

2.Caring for the Development

of Teenagers

3.Vulnerable Groups

Charitable Work


Community Building1

In mid-September, COFCO Eastocean Oils & Grains Industries (Zhangjiagang) Co., Ltd. organized employees of its Quality Control Department, Production Department, Rice Business Department and Flour Business Department to participate in the activity themed “Quality Month – Safe Food in Communities” in Jindu Community of Jingang Town. The activity was aimed to popularize how to select, eat and store rice, flour and edible oil, enhance residents’ food safety awareness and improve the company’s brand image. The company also fulfilled its social responsibility and demonstrated the elegant demeanour as a state-owned enterprise.

The Communist Party of China (CPC) committee of COFCO Eastocean Oils & Grains Industries (Zhangjiagang) Co., Ltd. and Jinrun Community in Zhangjiagang joined efforts to hold the “Jointly Building and Ensuring Safety” activity. A total of 60 CPC and Communist Youth League of China members participated in the activity to eliminate potential safety hazards over fire control facilities, power equipment and public space, as well as handed out safety education leaflets to residents.

In 2017, Xiamen Haijia Flour Mills Co., Ltd. organized 46 community service and quality education practice activities. As coordination of all parties was required, the company’s Communist Party of China and Communist Youth League of China Committees, as well as its labor union actively played an example role to organize participants, enabling the company to successfully fulfill its annual activity plan. The company also participated in "Group and Union Preaching", organized by the Federation of Trade Unions of Huli District, to carry out the community service activity of "Paying Attention to Healthy Living and Experiencing Cooked Wheaten Food Culture" in ten best communities, bringing healthy and nutritious cooked wheaten food culture and products to residents.

COFCO Eastocean Oils & Grains Industries (Zhangjiagang) Co., Ltd. Organized Safety Publicity Activity in Communities

COFCO Eastocean Oils & Grains Industries (Zhangjiagang) Co., Ltd. Held Activity of “Jointly Building and Ensuring Safety” with Jinrun Community

Xiamen Haijia Flour Mills Co., Ltd. Organized Community Service Activities

Case Study No.1

Case Study No.2

Case Study No.3


Caring for the Development of Teenagers2

Before Children’s Day in 2017, the Communist Youth League of China Committee of COFCO Eastocean Oils & Grains Industries (Zhangjiagang) Co., Ltd. joined hands with the Nansha Community Committee in Jingang Town and the Xinyuedu Reading Club to hold a reading promotion volunteer activity with the theme of “I Read; I am Happy; I Grow – Nansha Community Weekend Parent-child Reading Session”, presenting reading as the best gift on Children’s Day to children. Parents and children from 20 families of Nansha Community participated in the activity and experienced the joy of reading.The company also organized the “Helpful Reading and Literary Jingang” in Defeng Community. Some interactive and participatory games were added to it, including recognizing idioms through pictures and talking about the origins, which attracted children to actively participate in the games.The activity aimed to cultivate pupils’ interest in reading through interactive games, reading sharing and classic imitations, as well as enable parents to share their methods of parent-child reading. Several parents shared their skills to cultivate children’s reading habits, and also raised some questions about family reading.

Xiamen Haijia Flour Mills Co., Ltd. is the social practice activity base of quality education for primary and middle school students in Fujian Province. The company gained this qualification in December 2016, approved by the Fujian Provincial Bureau of Quality and Technical Supervision, Education Department of Fujian Province and Xiamen Entry-Exit Inspection and Quarantine Bureau, and actively propagandized this through WeChat, Weibo and its company website. The company made good reception of social practice activities regarding quality education of primary and middle school students. The state-owned company actively organized activities to popularize cooked wheaten food culture, flour quality and safety knowledge, as well as grain conservation ideas while paying attention to its own development.

COFCO Eastocean Oils & Grains Industries (Zhangjiagang) Co., Ltd. Organized Reading Promotion Volunteer Activities

Xiamen Haijia Flour Mills Co., Ltd. Held Cooked Wheaten Food Culture Popularization Activities for Primary and Middle School Students

Case Study No.1

Case Study No.2


On 30 May 2017, COFCO Oils (Qinzhou) Co., Ltd. held a series of parent-child campaigns to celebrate Children's Day, which enjoyed positive response from its employees.Different from the previous activity mode that employees' children had been gathered together in the company, the campaigns encouraged employees to organize parent-child activities on their own, which avoided some children’s absence due to inconvenient time and fixed activity forms. During weekends, employees could take their children to participate in the campaigns to have a picnic, purchase books, go to a children’s theme park or visit the Qinzhou Nixing Pottery Museum, which were organized by the company. The diversified campaign options made children have a warm and happy Children’s Day, which also promoted communication between employees, as well as brought children and their parents closer.Employees who are usually busy with work may have little time to accompany their children. The campaigns aimed to strengthen the parenthood between employees and their children, as well as increase society’s and families’ attention to the growth of teenagers, making efforts for the healthy development of teenagers.

On 28 September 2017, COFCO Rice (Hulin) CO., Ltd. participated in the “Big Hands Hold Small Hands” activity organized by the Hulin Association of Small and Medium Enterprises and the “Showing Care for Left-behind Children” activity hosted by the Education Tienan Kindergarten, which sent love and blessings to 18 left-behind children.

COFCO Oils (Qinzhou) Co., Ltd. Holds Parent-child Campaign to Celebrate Children's Day

COFCO Rice (Hulin) CO., Ltd. Positively Participated in Caring for Left-behind Children Activity

Case Study No.3

Case Study No.4


Vulnerable Groups3

On the Chung Yeung Festival 2017, which fell on 28 October, the final of the second season of “I Love Singing Nursery Rhymes”, supported by “Fortune”（福临门）Sunflower Oil, was held in Suzhou, Jiangsu Province, presenting a fantastic performance. COFCO Fortune Foods Sales & Distribution Co., Ltd. brought the top ten contestants to the Yinse Jiayuan Gerocomium in Suzhou, delivering happiness to the elderly with nursery rhymes to celebrate the Chung Yeung Festival with them. After the performance show for the elderly, the company donated healthy sunflower oil to the gerocomium for the health of the elderly.

The party branch of COFCO Oils (Qinzhou) Co., Ltd. joined hands with the Qinzhou Weideng Charity Association to hold the “Party Member Volunteer Day” activity to help the left-behind elderly of two families in Baishuitang Community to weed out ageing electric wires and do cleaning.Four party member representatives of the party branch of COFCO Oils (Qinzhou) Co., Ltd. took newly-purchased electric wires, switches and light bulbs to the apartments of three old people. After checking the power supply circuits, the party member representatives of the company’s electrical system department made use of their professional knowledge to transform unreasonable circuits in the apartments, eliminating potential safety hazards, as well as explained safety precautions in electricity using to the three senior citizens to fulfill their daily electricity needs. The elderly expressed their heartfelt thanks to the party members, and thanked the party for the warmth brought by it.The activity is one of the serial activities organized by the party branch of COFCO Oils (Qinzhou) Co., Ltd. to celebrate the anniversary of the Communist Party of China, which falls on 1 July, as well as one of the activities of the “Two Studies, One Action” Campaign. It aimed to cultivate party members’ consciousness of “devoting, realizing outstanding achievements, and doing practical work”, as well as further guide them to actively participate in public welfare activities and practice core socialist values.

COFCO Fortune Foods Sales & Distribution Co., Ltd. Donated Healthy Sunflower Oil to Yinse Jiayuan Gerocomium Party Branch of COFCO Oils (Qinzhou) Co., Ltd. Held “Party Member Volunteer Day” Activity with

Qinzhou Weideng Charity Association

Case Study No.1

Case Study No.2


On 27 October 2017, a delegation of COFCO Rice (Yancheng) Co., Ltd. led by Chairman of the Labor Union of COFCO Rice (Yancheng) Co., Ltd., and League Branch Secretary of the company, visited the Heli Gerocomium at the Wutan Street, Funing County before the Chung Yeung Festival. The delegation sent the elderly foods, oils and other necessities, and helped them clean up voluntarily.

The Communist Party of China committee and leading group of COFCO Grains actively participated in COFCO's poverty alleviation drive, laying great emphasis on fixed-point poverty alleviation in Yanshou County of Harbin City, Heilongjiang Province. First, the Division allocated money for poverty alleviation in accordance with the requirements of the group. Second, the Division’s leading leaders personally led a team to inspect poverty alleviation in Yanshou and explore new ideas for poverty alleviation based on high-quality rice resource development and industrial cooperation. The Rice Management Department and Project Department of COFCO Grains and the Northern Region where Yanshou is located paid earnest attention to industrial poverty alleviation. They dispatched several teams to conduct field research and draw up stepwise implementation plans for industrial poverty alleviation with the cadres who were on secondment for poverty alleviation and the relevant officials and departments in Yanshou. They also determined specific industrial assistance projects for the year to ensure the concrete implementation of industrial assistance. The local government attached great importance to and spoke highly of COFCO Grains' industry-based poverty alleviation ideas, as well as promised to give priority to the development of the local rice industry in the utilization of the anti-poverty funds and provide convenience for the company to participate in local industry development and business cooperation.

COFCO Rice (Yancheng) Co., Ltd.Visited Gerocomium

Playing an Active Role in COFCO’s Poverty-relief Drive and Exploring New Ideas for Poverty Alleviation in the Food Grain Industry

Case Study No.3

Case Study No.4


Report Sections ESG Reporting Guide

About This Report ——

A Message from the Top Executive ——

About Us

I. COMPANY PROFILE ——

II. OUR BUSINESS ——

III. CORPORATE GOVERNANCE ——

IV. HONORS & AWARDS ——

Social Responsibility Management

I. Social Responsibility Philosophy ——

II. Social Responsibility System ——

III. Material Topic Identification ——

IV. Social Responsibility Communication ——

Value Creation B5 General Disclosure，B7 General Disclosure，B7.2

I. Strengthen Operation Management ——

II. Enhance Risk Management and Internal Controls B5 General Disclosure，B7 General Disclosure， B7.2

III. Strengthen Brand Building ——

Social Development B6 General Disclosure

I. Ensure Market Supply ——

II. Ensure Food Safety B6 General Disclosure

III. Boost the Development of Agriculture, Farmers and Rural Areas ——

Index


IV. Boost Industry Development ——

Cooperation and Mutual Benefit B5 General Disclosure

I. Improve the Value of Key Accounts ——

II. Promote Supplier Development B5 General Disclosuree

III. Strengthen Communication with Distributors ——

Environmental Protection A1 General Disclosure，A1.1，A1.2，A1.3，A1.4，A1.5，A1.6，A2 General Disclosure，A2.1，A2.2，A2.3，A2.4，A2.5，A3 General Disclosure，A3.1

I. Fulfilling Energy Conservation and Emission Reduction A1 General Disclosure，A1.5，A1.6

II. Advocating Recycling A2 General Disclosure

III. Clean Energy A2 General Disclosure，A2.3

IV. Water Resources Management A2 General Disclosure，A2.4

Care for Employees B1 General Disclosure，B1.1 ，B2 General Disclosure，B2.3，B3 General Disclosure，B3.1，B4 General Disclosure，B4.1

I. Safeguard the Rights and Interests of Employees B1 General Disclosure，B1.1 ，B4 General Disclosure，B4.1

II. Attach Importance to Employee Development and Value Realization B3 General Disclosure，B3.1

III. Workplace Safety and Health B2 General Disclosure，B2.3

IV. Care for Employees ——

Charitable Work B8 General Disclosure ，B8.1，B8.2

I. Community Building B8 General Disclosure

II. Care for the Development of Teenagers ——

III. Vulnerable Groups ——


Readers' FeedbackDear reader，

Thank you for reading this report. For improving our work related to corporate social responsibility and promote our ability to fulfill our social responsibilities, we sincerely hope that you can evaluate this report. We would appreciate your valuable opinions and suggestions for further improvement of this report.

You may choose any of the following means to provide your feedback:

Fax: +852 2833 0319

Post: 31st Floor, COFCO Tower, 262 Gloucester Road, Causeway Bay, Hong Kong

Email: [email protected]

Please provide your feedback below:

1. Have you obtained information you need from the Report?

2. Do you think the Report covers the economic responsibilities China Agri bears?

3. Do you think the Report reflects the environmental responsibilities China Agri bears?

4. Do you think the Report reflects the social responsibilities China Agri bears?

5. Do you think the Report discloses adequate quantitative data?

6. Do you think the layout of the Report helps you comprehend the Report?

7. Please specify here any opinions and recommendations for the 2017 CSR Report:

Yes General No

Yes General No

Yes General No

Yes General No

Yes General No

Yes General No

2017 t 1 - china agriimg.chinaagri.com/uploads/zlyz/file/2018/07/20/u5b517ff721705.pdf · this...

Documents