HUBEI SANONDA CO., LTD.
INTERIM REPORT 2009
Short Form of the Stock: 000553 (200553)
Stock Code: Sanonda A (B)
August 2009Important Notes
1. The Board of Directors, the Supervisory Committee as well as directors,
supervisors and senior management of Hubei Sanonda Co., Ltd. (hereinafter referred
to as the Company) hereby confirm that there was no false information or misleading
statement or significant omission in this report, and will accept, individually and
collectively, the responsibilities for the authenticity, accuracy and completeness of the
contents of this report.
2. All directors attended the Board meeting.
3. Mr. Li Zuorong, person in charge of the Company, Mr. He Xuesong, person in
charge of accounting work and accounting organization, hereby confirm that the
Financial Report of Interim Report 2009 is true and complete.
4. This report has been prepared in Chinese and English version respectively. In the
event of difference in interpretation between the two versions, the Chinese report shall
prevail.
5. Financial Report in Interim Report 2009 was not audited.
Content
I. Company Profile-------------------------------------------------------------------------------1
II. Changes in Shares and Particulars about Share Capital---------------------------------3
III. Particulars about Directors, Supervisors and Senior Executives----------------------5
IV. Report of the Board of Directors-----------------------------------------------------------6
V. Significant Events-----------------------------------------------------------------------------8
VI. Financial Report (Un-audited) -----------------------------------------------------------15
VII. Documents Available for Reference----------------------------------------------------59I. Company Profile
(I) Basic information
1. Legal name of the Company
In Chinese: 湖北沙隆达股份有限公司
Abbr. in Chinese: 沙隆达
In English: HUBEI SANONDA CO., LTD.
Abbr. in English: SANONDA
2. Stock Exchange Listed With: Shenzhen Stock Exchange
Short Form of the Stock: Sanonda A, Sanonda B
Stock Code: 000553, 200553
3. Registered Address: No. 93, Beijing East Road, Jingzhou, Hubei
Office Address: No. 93, Beijing East Road, Jingzhou, Hubei
Post Code: 434001
Website of the Company: http://www.sanonda.cn
E-mail of the Company: sld@chemchina.com.cn
4. Legal Representative: Li Zuorong
5. Secretary of the Board of Directors: Li Zhongxi
Contact Tel: 0716-8208632
Fax: 0716-8321099
E-mail: li_zhongxi@263.net
Contact Address: No. 93, Beijing East Road, Jingzhou, Hubei
Securities Affairs Representative: Liang Jiqin
Tel: 0716-8208232
Fax: 0716-8321099
E-mail: freefly2006@263.net
Contact Address: No. 93, Beijing East Road, Jingzhou, Hubei
6. Newspaper for Disclosing the Information Chosen by the Company:
China Securities Journal, Securities Times and Ta Kung Pao
Internet Web Site Designated by CSRC for Publishing the Interim Report of
Company: http://www.cninfo.com.cn
The Place Where the Interim Report is Prepared and Placed: Office of the Company
7. Other Relevant Information of the Company
Initial registration date: Nov. 30, 1993
Initial registration organization: Hebei Province Administration Bureau for Industry
and Commerce
Registration code of corporate business license: QGEZ Zi No.: 002523
Registration code of taxation: 421001706962287
Certified Public Accountants engaged by the Company:
Name: Vocation International Certified Public Accountants Co., Ltd.
Office Address: Room 208, Building B of Huatong Mansion, No. 19,
Chegongzhuang West Road Yi, Haidian District, Beijing, PRC
(II) Main financial data and indicesUnit: RMB Yuan
At the end of the
report period
At the end of last
year
Increase/decrease compared
with the end of last year (%)
Total assets 2,337,437,595.55 2,049,481,852.69 14.05%
Owners’ equity attributable to shareholders of list
companies
1,112,883,918.38 1,098,558,871.77 1.30%
Share capital 593,923,220.00 593,923,220.00 0.00%
Net asset per share attributable to shareholders of list
companies (Yuan/share)
1.87 1.85 1.08%
In the report period
(from Jan. to Jun.)
The same period
of last year
Increase/decrease
year-on-year (%)
Operating revenue 985,283,990.84 1,252,546,727.94 -21.34%
Operating profit 58,673,360.32 105,058,807.83 -44.15%
Total profit 60,297,608.06 104,201,646.60 -42.13%
Net profit attributable to shareholders of listed companies 44,124,619.58 77,284,465.57 -42.91%
Net profit attributable to shareholders of listed companies
after deducting non-recurring gains and losses
44,241,366.89 78,141,626.80 -43.38%
Basic earnings per share (Yuan/share) 0.0743 0.1301 -42.89%
Diluted earnings per share (Yuan/share) 0.0743 0.1301 -42.89%
Net return on equity (%) 3.96% 7.79% -3.83%
Net cash flow from operating activities 59,930,108.90 110,826,976.74 -45.92%
Net cash flow from operating activities per share
(Yuan/share)
0.10 0.19 -47.37%
Attached: items of non-recurring gains and losses
Items Amount Note (if applicable)
Gains and losses on the disposal of non-current assets 3,771,756.19
Government subsidies recorded into current profit and loss (excluding government
subsidies with close relationship with the Company’s business and rationed
government grants in line with the united standard)
2,196,656.32
Other non-operating incomes and expenses except the above -707,508.45
Other items being in compliance with definition of non-recurring gains and losses -4,660,000.00
Impact on income tax -150,226.02
Impact on minority interests -567,425.35
Total -116,747.31 -
II. Changes in Share Capital and Particulars about Share Capital
(I) Statement on changes in share
Unit: share
Prior to the change Increase/decrease (+, - )
Subsequent to the
change
Number Proporti Issuance of Bonus Capitalizatio Other Subtotal Number Proportion new shares n of reserved
fund
on
I. Shares subject to trading
moratorium
122,226,014 20.58% 3,900 3,900 122,229,914 20.58%
1. Shares held by state
2. Shares held by
state-owned corporations
118,887,202 20.02% 118,887,202 20.02%
3. Shares held by other
domestic investors
3,300,000 0.56% 3,300,000 0.56%
Including: Shares held by
domestic non-state-owned
corporations
3,300,000 0.56% 3,300,000 0.56%
Shares held by domestic
natural person
4. Shares held by overseas
investors
Including: Shares held by
overseas corporations
Shares held by overseas
natural person
5. Shares held by senior
management
38,812 0.01% 3,900 3,900 42,712 0.01%
II. Shares not subject to
trading moratorium
471,697,206 79.42% -3,900 -3,900 471,693,306 79.42%
1. RMB ordinary shares 241,697,206 40.70% -3,900 -3,900 241,693,306 40.70%
2. Domestically listed
foreign shares
230,000,000 38.73% 230,000,000 38.73%
3. Overseas listed foreign
shares
4. Others
III. Total number of shares 593,923,220 100.00% 593,923,220 100.00%
(II) Number of shareholders and shares held by them
Unit: Share
Total number of shareholders 111,270 (Including 83,287 ones of A-share)
Particulars about shares held by the top ten shareholders
Name of shareholder Nature of shareholders
Proportion
(%)
Total number
of shares held
Shares subject to
trading moratorium held
Shares pledged
or frozen
SANONDA GROUP CORPORATION State-owned corporation 20.02% 118,887,202 118,887,202 0
HAITONG SECURITIES CO., LTD
Domestic non-state-owned
corporation
1.01% 5,999,920 0 0
STATE-OWNED ASSETS
ADMINISTRATION BUREAU OF
QICHUN COUNTY
State shares 0.76% 4,489,266 0 0JINGZHOU SHASHI DISTRICT
UNION RURAL CREDIT
COOPERATION
Domestic non-state-owned
corporation
0.42% 2,500,000 2,500,000 0
China Construction Bank-CITIC
Bonus Selected stock securities fund
Domestic non-state-owned
corporation
0.41% 2,461,909 0 0
Dongguan Tenglan Shoes’ Materials
Trading Co., Ltd
Domestic non-state-owned
corporation
0.40% 2,368,375 0 0
HUANG ZHI MING Domestic natural person 0.39% 2,328,700 0 0
NORGES BANK Foreign corporation 0.22% 1,301,210 0 0
CAI HONG YANG Domestic natural person 0.21% 1,253,900 0 0
YE JING Domestic natural person 0.19% 1,137,200 0 0
Particulars about the top ten shareholders holding share not subject to moratorium
Name of shareholders
Shares not subject to trading
moratorium
Type of shares
HAITONG SECURITIES CO., LTD 5,999,920 RMB ordinary shares
STATE-OWNED ASSETS ADMINISTRATION BUREAU OF
QICHUN COUNTY
4,489,266 RMB ordinary shares
China Construction Bank-CITIC Bonus Selected stock securities
fund
2,461,909 RMB ordinary shares
Dongguan Tenglan Shoes’ Materials Trading Co., Ltd 2,368,375 RMB ordinary shares
HUANG ZHI MING 2,328,700 RMB ordinary shares
NORGES BANK 1,301,210 Domestically listed foreign share
CAI HONG YANG 1,253,900 Domestically listed foreign share
YE JING 1,137,200 RMB ordinary shares
WANG GONG LIN 1,020,000 Domestically listed foreign share
DENG HUAI YU 923,600 Domestically listed foreign share
Explanation on associated relationship
among the top ten shareholders or
acting-in-concert
The Company is not aware of whether there is any associated relationship among the above top ten
shareholders and whether there is any action-in-concert among them.
(III) Number of shares held by the top ten shareholders subject to moratorium and
trading moratorium
Unit: Share
No.
Name of shareholders
holding shares
subject to trading
moratorium
Number of
shares subject to
trading
moratorium
Date on
which shares
can be listed
for trading
Number of
additional shares
can be listed for
trading
Trading moratorium
1
Sanonda Group
Corporation
118,887,202 3 Aug. 2009 0
No trading or transferring within 36 months from
the first trading day of A shares after the share
merger reform proposal was implemented
2
Jingzhou Shashi
District Union Rural
Credit Cooperation
2,50,000 3 Aug. 2009 0
No trading or transferring within 36 months from
the first trading day of A shares after the share
merger reform proposal was implemented
3 Jingzhou Sanonda 800，000 3 Aug. 2009 0 No trading or transferring within 36 months fromAdvertising Co., Ltd. the first trading day of A shares after the share
merger reform proposal was implemented
Note: As the disclose date of this report, the Company was handling relevant
procedures of releasing trading moratorium. Shares held by the above shareholders
will be listed for trade when the relevant procedure is completed.
(IV) Controlling shareholders and actual controller of the Company remained
unchanged in the report period
III. Particulars about Directors, Supervisors and Senior Executives
(I) Changes in shares held by directors, supervisors and senior executives
(II)
Name Title
Shares held
at the
year-begin
Additional
shares held at
the report
period
Decreased
shares held at
the report
period
Shares held
at the
period-end
Including
shares subject
to trading
moratorium
Number of
option held
at the
period-end
Reason for
change
Li Zuorong Chairman of the Board 5,490 5,200 0 10,690 8,017 0
Purchase from
the secondary
market
Liu Xingping Director 32840 0 0 32840 24630 0
He Fuchun Director & GM 4880 0 0 4880 3660 0
Deng Guobin Director & Vice GM 4880 0 0 4880 3660 0
Zhang
Jianguo
Chairman of the
Supervisory Committee
3660 0 0 3660 2745 0
(III) Particulars about rengagement and dismission of directors, supervisors and senior
executives
On 10 Feb. 2009, the Company held the 17th Meeting of the 5th Board of Directors
and engaged Xie Chengli as Assistant to the General Manager.
IV. Report of the Board of Directors
(I) Overall status of operating activities
During the report period, influenced by global financial crisis, domestic and
international economic environment was changeful and demand of pesticide market
was weak. Product sales of the Company were unprosperous, and price declined by a
large margin. Facing various difficulties in production and operation, the Company
adopted a series of measures to actively reply to disadvantage brought by financial
crisis: The Company roundly executed fine management, improved quality of
products and reduced producing cost; enhanced sales management, adjusted market
strategy reasonably, seized market, made effort to enlarge export volume and ensure
production equipment operating stably; was acquaint with trends of chemical industry
market, arranged purchase reasonably and effectively reduced purchase cost;
continued to push construction of new project and enlarged project and actively
started to tackle key problems in technology; faithfully enhanced management onaccounts receivable and inventories and prevented operating risks.
In the first half year of 2009, the Company realized operating income amounting to
RMB 985 million, with a decrease of 21.34% year-on-year; export for foreign change
amounting to USD 58.47 million, down by 18.14% year-on-year; total profit
amounting to RMB 60.298 million, with a decrease of 41.13% year-on-year.
(II) Scope and operation of the main business
1. Scope of main business: production and sale of pesticides and chemical products
2. Main business classified according to industries or products
Unit: RMB’0000 Yuan
Main business classified according to industries
Industry or products
Operating
income
Operating
cost
Gross profit
ratio (%)
Increase/decrease
of operating
income compared
with last year (%)
Increase/decrease
of operating
income compared
with last year (%)
Increase/decrease
of gross profit
ratio compared
with last year (%)
New chemical materials and
special chemical products
574.74 318.39 44.60% -23.37% -47.37% 25.27%
Petro-chemical industrial and
refined chemical products
3,189.77 2,254.22 29.33% -8.72% -25.42% 15.82%
Agrochemical like fertilize,
pesticide, etc
90,415.94 74,778.69 17.29% -22.60% -17.16% -5.44%
Total 94,180.45 77,351.29 17.87% -22.21% -17.62% -4.57%
3. Main business classified according to regions
Unit: RMB’0000 Yuan
Regions Operating income Increase/decrease of operating income compared with the last year (%)
Domestic 54,104.00 -21.19%
Overseas 40,076.00 -23.54%
Total 94,180.00 -22.21%
4. Analysis on financial status
Items Balance at the period-end Balance at the period-begin Change ratio
Accounts receivable 16,606 8,268 100.85%
Accounts paid in advance 9,317 1,592 485.31%
Construction in progress 9,986 3,712 169.00%
Short-term borrowings 32,869 18,700 75.77%
Long-term borrowings 47,556 29,756 59.82%
Note:
① Accounts receivable increased 100.85% over the period-end, mainly because the
export increased and settlement term was immature;
② Accounts paid in advance increased 485.31% over the period-end, because
accounts for engineering paid in advance increased;
③ Construction in progress increased 169% over the period-end, because investment
in engineering project increased;
④ Short-term borrowings increased 75.77% over the period-end, because production
capital and demand for investment on project increased;⑤ Long-term borrowings increased 59.82% over the period-end, because loan for
construction of combined heat and power generation and extension on project of
annual 20,000 tons glyphosate increased.
(III) Explanation on significant changes on profit components and profit capability of
main business
In the report period, the main business and its structure remained unchanged, mainly
included the chemical pesticide, chlor-alkali chemical engineering etc. Profitability
declined because influenced by global financial crisis, domestic and international
demand of pesticide market was weak, product sales of the Company were
unprosperous, and price dropped obviously. Otherwise, cost of raw material of
chemical industry products such as emulsion splitter decreased by a large margin
compared with the same period of last year, and gross profit ratio rose greatly;
however, the small amount influenced little.
(IV) Other business influenced the net profit significantly
In the report period, the net profit realized of the Company came from the main
business and not influenced by other business.
(V) Problems and difficulties of operation
During the report period, influenced by global financial crisis, domestic and
international demand of pesticide market was bearish, and supply of goods was
abundant, and dealers were waiting. Product sales was not swimmingly and export
was severe. Large decline of product price and frequent fluctuation of price of raw
material brought difficulties to the Company.
In the second half year, in order to realize operating plan made at the year-begin, the
Company will do the following work: firstly, the company will adopt effective
measures and faithfully enhanced sales; secondly, the Company will continue to push
fine and precious management and energy saving and expense reducing; thirdly, the
company will further enhance technology innovation and management on
construction of project; fourthly, the Company will enhance control of every
expenditure
(VI) Investment
1. In the report period, there was no raised proceeds occurred or raised proceeds
occurred in previous periods but continued to the report period.
2. Investment projects of non-raised proceeds in the report period:
Name of projects Amount revolved Progress Income of project
Expended construction of paraquat 1,931 38.72%
Expanding and improvement of acephate 2,076 103.78% As scheduled
The 2nd phase of glyphosate 2,448 31.59%
combined heat and power generation 745 In preparation
Formaldehyde project 1316 In preparation
Total 8,516 -
(VII) Forecast on operating performance from the year-begin to the end of the next
period
The Company forecast that net profit the year-begin to the end of the next period will
decline during 50% to 100%, which is mainly because influenced by financial crisis,pesticide market was bearish, product sales was not swimmingly and price of main
products dropped by a large margin.
Ⅴ. SIGNIFICANT EVENTS
(Ⅰ) Corporate governance
In the report period, the Company kept perfecting its corporate governance structure,
formulating and improving the internal management rules and regulating its operation
according to the requirements of the Company Law, Securities Law, Code of
Corporate Governance for Listed Companies and other relevant laws and regulations.
In the first half of 2009, according to the Basic Standards for Enterprise Internal
Control issued by CSRC and other relevant authorities, the Company further
improved its internal control system and effectively regulated its internal operation. In
order to strengthen its control and management over the subsidiaries, the Company
formulated the Rules for Managing Holding Subsidiaries to ensure clear powers and
responsibilities among and regulated operation of the shareholders’ general meetings,
boards of directors, board of supervisors and manager teams of the Company and its
holding subsidiaries. Meanwhile, the Company strengthened its management of the
relationship with investors by conducting timely communication with investors by
email and telephone, adopting a serious attitude towards information disclosure and
ensuring the factuality, accuracy, completeness and timeliness of the information
disclosed.
(Ⅱ) Profit distribution and its implementation in report period
On 8 May 2009, the proposal on profit distribution and turning capital surplus to share
capital for the year 2008 was reviewed and approved at the 2008 Annual
Shareholders’ General Meeting of the Company. According to the proposal, the
Company would, based on the Company’s total shares of 593,923,220 shares as at the
end of 2008, distribute a cash dividend of RMB 0.5 (tax included) per 10 shares to all
shareholders. A total of RMB 29,696,161 was expected to be distributed and no
capital surplus would be transferred to share capital. On 5 Jun. 2009, the public notice
on the implementation of profit distribution for the year 2008 was disclosed. As
disclosed in the public notice, for A share, the date of record was 11 Jun. 2009, the
ex-dividend date was 12 Jun. 2009 and the date of entering account was 12 Jun. 2009;
for B share, the last trading date was 11 Jun. 2009, the ex-dividend date was 12 Jun.
2009, the record date was 16 Jun. 2009 and the date of entering account was 16 Jun.
2009. And the Company distributed the cash dividend to A-share holders and B-share
holders respectively on 12 Jun. and 16Jun. 2009.
For the report period, the Company will not conduct profit distribution or
capitalization of capital reserves.
(Ⅲ) There existed no significant lawsuits or arbitrations in the report period, or thosecarried down from the previous years.
(Ⅳ) Transactions of assets in report period
1. Asset acquisition
Unit: RMB’0000
Transaction
party or
ultimate
controller
Asset
acquired
Date of
acquisition
Transaction
price
Net profit
contributed to
the Company
from the date of
purchase to the
end of report
period
(applicable to
mergers of
enterprises not
under the same
control)
Net profit
contributed to
the Company
from year-begin
to period-end
(applicable to
mergers of
enterprises
under the same
control)
Whether
a related
transactio
n or not
Pricing
principle
Whether
or not
ownershi
p of the
assets
involved
have
been
completel
y
transferre
d
Whether
or not
the
creditor’
s rights
and
liabilities
involved
have
been
complet
ely
transferr
ed
Relation
with
transactio
n party
(applicabl
e to
related
transactio
ns)
Insight
Finechem
Co., Ltd.
49% equity of
Jingzhou
Sanonda
Aifusi
Chemical
Industry Co.,
Ltd.
28 Jun. 2009 573.00 0.00 82.00 No
Market
price
Yes Yes
Non-relat
ed party
2. Sale of assets
Unit: RMB’0000
Transaction
party
Asset sold Date of sale
Transaction
price
Net profit
contributed by
the sold asset
to the
Company from
year-begin to
date of sale
Gains/
losses
from
selling the
asset
Whether a
related
transaction
or not
Pricing
principle
Whether
or not
ownershi
p of the
assets
involved
have
been
complet
ely
transferr
ed
Whether
or not
the
creditor’
s rights
and
liabilities
involved
have
been
complet
ely
transferr
ed
Relation
with
transaction
party
(applicable
to related
transaction
s)
Hubei 48% equity of 6 Jun. 2009 288.00 0.00 144.00 No Market Yes Yes Non-relateTianyang
Technology
Co., Ltd.
Jingzhou
Tianyang
Huibao
Precise
Chemical Co.,
Ltd. held by
the Company
price d party
(Ⅴ) Significant related transactions in report period
1. Transactions of purchase and sale
Type of transaction Name of related party
Relation with
related party
Transaction
amount
Proportion in
total amount of
the Company’s
same kind of
transactions
A. Related transactions arising from purchasing goods and receiving labor service
Purchase of raw
materials
China Industrial and
Agricultural Chemical
Corp.
Under the same
ultimate controller
21,914,775.00 3.86%
Purchase of raw
materials
Sanonda Group Corp. Parent company 64,428,155.10 11.34%
Purchase of packaging
materials
Jingzhou Fude Foods
General Factory
Under the same
parent company
1,413,846.61 0.25%
Purchase of packaging
materials
Sanonda Advertising Co.,
Ltd.
Under the same
parent company
2,489,959.85 0.44%
Purchase of raw
materials
Jingzhou Hengxiang
Materials Trading Co., Ltd.
Under the same
parent company
11,509,623.40 2.03%
Purchase of packaging
materials
Jingzhou Dali Industrial
Co., Ltd.
Joint venture
company
4,726,520.00 0.83%
B. Related transactions arising from selling goods and rendering labor service
Sale of pesticides and
chemical products
Jingzhou Hengxiang
Materials Trading Co., Ltd.
Under the same
parent company
129,701.56 0.01%
Sale of chemical
products
Hubei Jingzhou Huaxiang
Chemical Co., Ltd.
Associated
company of the
parent company
13,976,014.87 1.48%
Sale of pesticides
Jiangsu Anbang
Electrochemical Co., Ltd.
Under the same
ultimate controller
1,224,210.00 0.13%
C. Other related transactions
Payment of guarantee
fee
Sanonda Group Corp. Parent company 4,660,000.00 100%
Note 1: When recognizing a related party, the Company based the recognition on the
premise of control, joint control or significant influence, and followed the principle of
substance over form.Note 2: The guarantee fee in the item of other related transactions was paid by the
Company to its parent company—Sanonda Group Corp.—due to the fact that the
latter provided loan guarantees for the Company.
2. Guarantees between the Company and related parties
① A mutual-guarantee agreement was signed between the Company and Guangxi
Hechi Chemicals Co., Ltd. (hereinafter referred to as “Hechi Chemicals”, which,
together with the Company, belonged to China National Chemicals Corporation and
were controlled by the same ultimate controller). According to the agreement, the
Company provided a joint-liability guarantee for a loan of fixed assets amounting to
RMB 100,000,000 borrowed by Hechi Chemicals from Hechi Branch of Agricultural
Bank of China, while Hechi Chemicals also provided for the Company joint-liability
guarantees for a maximum loan of RMB 60,000,000 from Jingzhou Shashi
Sub-branch of Industrial and Commercial Bank of China and a maximum loan of
RMB 40,000,000 from Wuhan Branch of Bank of Communications.
② Other guarantees provided by related parties besides the aforesaid guarantees
Units providing
guarantees
Banks
Guarantee
amount at
period-end
(Unit:
RMB
million)
Term of guarantee
Type of
guarantee
Sanonda Group
Corporation
Jingzhou Shashi
Sub-branch of
Industrial and
Commercial Bank
15
20 Jan. 2009-19
Jan. 2010
Guarantee for
working
capital
borrowings
Sanonda Group
Corporation
Jingzhou Shashi
Sub-branch of
Industrial and
Commercial Bank
25
25 Mar. 2009-23
Mar. 2010
Guarantee for
working
capital
borrowings
Sanonda Group
Corporation
Jingzhou Sanwan
Sub-branch of China
Construction Bank
25
20 Mar. 2008-19
Mar. 2011
Guarantee for
working
capital
borrowings
Sanonda Group
Corporation
Jingzhou Sanwan
Sub-branch of China
Construction Bank
30
18 Feb. 2008-17
Feb. 2011
Guarantee for
working
capital
borrowings
China Industrial
and Agricultural
Chemical Corp.
Import & Export
Bank of China
50
18 May 2009-18
May 2011
Guarantee for
working
capital
borrowings
China National
Chemicals Corp.
Jingzhou Sanwan
Sub-branch of China
97.56
3 Feb. 2008-2 Feb.
2013
Guarantee for
projectConstruction Bank borrowings
China National
Chemicals Corp.
Jingzhou Sanwan
Sub-branch of China
Construction Bank
100
29 Aug. 2008-28
Aug. 2013
Guarantee for
project
borrowings
China National
Chemicals Corp.
Jingzhou Sanwan
Sub-branch of China
Construction Bank
100
10 Feb. 2009-9 Feb.
2014
Guarantee for
project
borrowings
Sanonda Group
Corporation
Wuhan Branch of
Industrial Bank 100
21 Apr. 2008-21
Apr. 2013
Guarantee for
project
borrowings
China National
Chemicals Corp.
Shenzhen Ping An
Bank
79
29 Apr. 2009-29
Apr. 2012
Guarantee for
project
borrowings
3. Balance of guarantees between the Company and its related parties
Related party
Relation with
related party
Accounting
item
Balance at
period-end
Proportion
in total
amount of
the
accounting
item
Jingzhou Hengxiang
Materials Trading Co., Ltd.
Under the same
parent company
Accounts
payable
2,119,921.84 1.66%
China Industrial and
Agricultural Chemical Corp.
Parent company Accounts
payable
264,775.00 0.21%
Jingzhou Dali Industrial Co.,
Ltd.
Joint venture
company
Accounts
payable
652,891.84 0.51%
Jingzhou Fude Foods
General Factory
Under the same
parent company
Accounts
payable
378,516.50 0.30%
Jingzhou Hengxiang
Materials Trading Co., Ltd.
Under the same
parent company
Accounts
received in
advance
440,491.50 0.46%
Hubei Jingzhou Huaxiang
Chemicals Co., Ltd.
Associated
company of the
parent company
Accounts
received in
advance
397,123.01 0.41%
Jiangsu Anbang
Electrochemical Co., Ltd.
Under the same
ultimate controller
Accounts
received in
advance
199,290.00 0.21%
(Ⅵ) Important contracts and their implementation in report period
1. In the report period, there existed no such significant transaction conducted by the
Company as holding in trust, contracting or leasing the assets of other companies or
vice versa. Nor were there such transactions carried down from the previous periods.2. Guarantees provided by the Company in report period
Unit: RMB’0000
Guarantees provided by the Company for external parties (excluding those for subsidiaries)
Name of the
guaranteed party
Date of occurrence
(date when the
agreement was
signed)
Amount of
guarantee
Type of
guarantee
Term of
guarantee
Whether or
not the
execution
of the
guarantee
had been
accomplish
ed
Whether a guarantee
for related parties
Guangxi Hechi
Chemicals Co.,
Ltd.
12 Jan. 2008 10,000.00
Joint-liabilit
y guarantee
5 years No Yes
Total amount of guarantee incurred in
report period
10,000.00
Total guarantee balance at period-end
(A)
10,000.00
Guarantees provided by the Company for subsidiaries
Total amount of guarantees for
subsidiaries in report period
25,900.00
Total balance of guarantees for
subsidiaries at period-end (B)
25,900.00
Total amount of guarantees provided by the Company (including those for subsidiaries)
Total guarantee amount (A+B) 35,900.00
Proportion of total guarantee amount in
the Company’s net assets
32.26%
Including:
Amount of guarantees provided for
shareholders, actual controller and
their related parties (C)
10,000.00
Amount of loan guarantees directly or
indirectly provided for parties with
asset-liability ratio over 70% (D)
25,200.00
Amount of total guarantee amount
exceeding 50% of net assets (E)
0.00
Total amount of the three kinds of
guarantees above（C+D+E）
35,200.00
Explanation on the possibility of taking
on joint liability concerning the undue
guarantees
All the guarantees provided by the Company for its subsidiaries were
joint-liability ones, with a mutual guarantee of RMB 100 million for a
related party of the Company—Guangxi Hechi Chemicals Co., Ltd..
3. In the report period, the Company did not entrust others with financial affairs. And
there existed no such matters carried down from the previous periods.(Ⅶ) Implementation of commitments made
In the report period, the Company or shareholders holding over 5% shares of the
Company did not make any other commitment except for the commitment concerning
the share merger reform. And there were no such commitments carried down from the
previous periods to the report period.
Commitments made by the originally non-tradable share holders in the share merger
reform, as well as their implementation:
Name of shareholder Commitments made
Particulars about
implementation
Sanonda Group Corp.
(1) No trading or transferring of the
Company’s shares held by Sanonda Group
Corporation would be conducted through
Shenzhen Stock Exchange within 36 months
since the first trading date after the
implementation of the share merger reform;
(2) Sanonda Group Corp. would put forward
and vote for the proposal on the Company’s
turning capital surplus to share capital (to
increase 10 shares for each 10 shares) at the
Company’s 2006 Annual Shareholders’
General Meeting.
The commitments
had been
implemented by the
disclosure date of
this report.
Jingzhou Shashi Union
Rural Credit Cooperation
No trading or transferring of the Company’s
shares held by Jingzhou Shashi Union Rural
Credit Cooperation would be conducted
through Shenzhen Stock Exchange within 36
months since the first trading date after the
implementation of the share merger reform.
The commitments
had been
implemented by the
disclosure date of
this report.
Jingzhou Sanonda
Advertising Co., Ltd.
No trading or transferring of the Company’s
shares held by Jingzhou Sanonda Advertising
Co., Ltd. would be conducted through
Shenzhen Stock Exchange within 36 months
since the first trading date after the
implementation of the share merger reform.
The commitments
had been
implemented by the
disclosure date of
this report.
(Ⅷ) Securities investment
Serial
No.
Securities
variety
Stock
code
Short
form of
stock
Initial
investment
amount
(RMB)
Shares held
at
period-end
(share)
Book value at
period-end
Proportion
in total
securities
investment
at
period-end
(%)
Gains/ losses in
report period
1 Stock 000717
Shuanghu
an
Science
495,000.00 495,000 6,380,528.32 100.00% 2,196,656.32and
Technolog
y
Other securities investment held at
period-end
0.00 - 0.00 0.00% 0.00
Gains/ losses from selling securities
investment in report period
- - - - 0.00
Total 495,000.00 - 6,380,528.32 100% 2,196,656.32
(Ⅸ) Field visits, interviews and written inquiries received in report period
Time of
reception
Place of reception Way of reception Visitor
Main discussion and materials
provided
29 May 2009
The meeting room of
the Company
Field visit Guoxin Securities
Recent particulars about the
production and operation of the
Company, as well as the
development of its main products
(Ⅹ) Punishment on the Company, its directors, supervisors, senior management staff,
shareholders and actual controller, as well as relevant rectification
In the report period, none of the Company, its directors, supervisors, senior
management staff, shareholders and actual controller received investigations,
administrative punishment, and criticism by circular or open criticism from CSRC or
police authorities.
(Ⅺ) Special explanation and independent opinion of impendent directors on capital
occupation by the Company’s related parties and external guarantees provided by the
Company
The independent directors of the Company were of the opinion that there existed no
non-operational capital occupation by the Company’s main shareholder or other
related parties in the report period. And the particulars about the progress of the
mutual guarantee between the Company and Guangxi Hechi Chemicals Co., Ltd. were
disclosed on China Securities Journal, Securities Times, Ta Kung Pao and
http://www.cninfo.com.cn dated 22 Feb. 2008. The decision-making procedures of the
Company’s external guarantees were legal, reasonable and fair, with no harm done to
the interests of the Company and its shareholders, especially the minority interests.
(Ⅻ) Analysis and explanation on other significant matters, as well as their influence
and relevant solutions
The Company was not involved in other significant matters in the report period.
(ⅩⅢ) Index for information disclosed in report period
Public notice
Date of
disclosure
Newspaper for
disclosure
Website for
disclosure
Public Notice on Correction 20 Jan. 2009 China Securities Journal, www.cninfo.com.cnof Earnings Estimate Securities Times and Ta
Kung Pao
Public Notice on the 17th
Meeting of the 5th Board of
Directors
12 Feb. 2009
China Securities Journal,
Securities Times and Ta
Kung Pao
www.cninfo.com.cn
Public Notice on
Preliminary Earnings
Estimate and Relevant
Clarification
19 Feb. 2009
China Securities Journal,
Securities Times and Ta
Kung Pao
www.cninfo.com.cn
Public Notice on Routine
Related Transactions, Public
Notice on Joint Investment,
Public Notice on Related
Transaction Concerning
Purchasing Land from
Controlling Shareholder,
Public Notice on Convening
the 1st Provisional
Shareholders’ General
Meeting in 2009, etc.
26 Feb. 2009
China Securities Journal,
Securities Times and Ta
Kung Pao
www.cninfo.com.cn
Public Notice on
Resolutions of the 1st
Provisional Shareholders’
General Meeting in 2009
17 Mar. 2009
China Securities Journal,
Securities Times and Ta
Kung Pao
www.cninfo.com.cn
Public Notice on
Resolutions Made at the 18th
Meeting of the 5th Board of
Directors, 2008 Annual
Report, Public Notice on
Related Transaction, Public
Notice on Providing
Guarantee for Holding
Subsidiary, etc.
10 Apr. 2009
China Securities Journal,
Securities Times and Ta
Kung Pao
www.cninfo.com.cn
Public Notice on
Resolutions Made at the 11th
Meeting of the 5th Board of
Supervisors
10 Apr. 2009
China Securities Journal,
Securities Times and Ta
Kung Pao
www.cninfo.com.cn
Public Notice on 16 Apr. 2009 China Securities Journal, www.cninfo.com.cnResolutions Made at the 19th
Meeting of the 5th Board of
Directors, First Quarterly
Report 2009 and Public
Notice on Convening 2008
Annual Shareholders’
General Meeting, etc.
Securities Times and Ta
Kung Pao
Public Notice on Adding
Provisional Proposals for
2008 Annual Shareholders’
General Meeting
30 Apr. 2009
China Securities Journal,
Securities Times and Ta
Kung Pao
www.cninfo.com.cn
Public Notice on
Resolutions Made at 2008
Annual Shareholders’
General Meeting
9 May 2009
China Securities Journal,
Securities Times and Ta
Kung Pao
www.cninfo.com.cn
Public Notice on
Resolutions Made at
Provisional Meeting of the
5th Board of Directors, and
Public Notice on Profit
Distribution for the Year
2008
9 May 2009
China Securities Journal,
Securities Times and Ta
Kung Pao
www.cninfo.com.cnⅥ. FINANCIAL REPORT (UN-AUDITED)
(Ⅰ) Accounting statements
Balance Sheet
Prepared by: Hubei Sanonda Co., Ltd. 30 Jun. 2009 Unit: (RMB) Yuan
Amount at period-end Amount at year-begin
Items
Consolidation Parent company Consolidation Parent company
Current assets:
Monetary funds 657,073,854.90 567,032,361.49 562,832,319.76 490,154,426.30
Settlement reserves
Lendings to banks and
other financial institutions
Transactional financial
assets
6,380,528.32 6,380,528.32 4,183,872.00 4,183,872.00
Notes receivable 31,076,998.65 22,354,332.65 8,620,358.99 6,982,848.99
Accounts receivable 166,055,997.57 48,323,022.16 82,676,725.12 7,589,321.37
Accounts paid in advance 93,172,132.93 91,961,073.42 15,918,504.32 11,598,028.21
Premium receivable
Reinsurance accounts
receivable
Reinsurance contract
reserve receivables
Interest receivable
Dividend receivable
Other accounts receivable 16,118,055.36 108,035,641.95 15,914,988.01 117,681,311.43
Financial assets purchased
under agreement to resell
Inventories 295,140,525.96 201,256,314.14 346,551,634.75 233,367,834.29
Non-current assets due
within 1 year
Other current assets
Total current assets 1,265,018,093.69 1,045,343,274.13 1,036,698,402.95 871,557,642.59
Non-current assets:
Loans granted and
advances
Financial assets available
for sale
Held-to-maturity
investment
Long-term accounts
receivable
Long-term equity
investment
11,378,382.63 88,092,025.27 12,818,382.63 73,932,025.27Investment real estate 5,233,808.50 5,233,808.50 5,356,412.50 5,356,412.50
Fixed assets 752,522,740.75 694,239,178.50 781,010,440.01 730,043,892.69
Construction in progress 99,858,912.88 92,013,350.21 37,121,583.37 31,539,313.21
Engineering materials 27,115.85 7,580.83
Disposal of fixed assets 32,394.82
Productive biological
assets
Oil-and-gas assets
Intangible assets 185,724,977.31 137,724,200.98 158,813,608.07 115,835,981.98
Development expenses
Goodwill
Long-term deferred
expenses
14,273.21
Deferred income tax assets 17,641,169.12 14,049,527.17 17,641,169.12 14,049,527.17
Other non-current assets
Total non-current assets 1,072,419,501.86 1,031,352,090.63 1,012,783,449.74 970,757,152.82
Total assets 2,337,437,595.55 2,076,695,364.76 2,049,481,852.69 1,842,314,795.41
Current liabilities:
Short-term borrowings 328,689,992.33 255,000,000.00 187,000,000.00 170,000,000.00
Borrowings from central
bank
Deposits and due to
placements with banks and
other financial institutions
Borrowings to banks and
other financial institutions
Transactional financial
liabilities
Notes payable 29,080,000.00 20,000,000.00 19,040,000.00 15,000,000.00
Accounts payable 127,469,251.48 86,124,310.42 102,784,556.06 66,963,994.66
Accounts received in
advance
96,487,213.23 34,281,569.80 112,330,681.17 30,364,281.48
Financial assets sold under
agreement to repurchase
Handing charges and
commission payable
Payroll payable 19,201,342.34 10,514,639.33 25,448,279.39 14,813,333.63
Taxes payable 11,827,909.86 21,812,569.03 51,639,246.20 54,951,662.72
Interest payable 328,050.00
Dividend payable 1,470,532.37 1,470,532.37
Other accounts payable 63,345,218.34 17,376,621.06 43,139,725.39 16,757,176.12
Reinsurance accounts
payableInsurance contract
reserves
Payment for vicariously
traded securities
Payment for vicariously
sold securities
Non-current liabilities due
within 1 year
30,000,000.00 30,000,000.00 70,000,000.00 70,000,000.00
Other current liabilities
Total current liabilities 707,899,509.95 476,580,242.01 611,382,488.21 438,850,448.61
Non-current liabilities:
Long-term borrowings 475,560,000.00 475,560,000.00 297,560,000.00 297,560,000.00
Debentures payable
Long-term payables 9,840,000.00 9,840,000.00 9,840,000.00 9,840,000.00
Special payables 2,761,170.00 2,761,170.00
Estimated liabilities
Deferred income tax
liabilities
Other non-current
liabilities
11,549,512.89 6,990,000.00 11,549,512.89 6,990,000.00
Total non-current liabilities 499,710,682.89 492,390,000.00 321,710,682.89 314,390,000.00
Total liabilities 1,207,610,192.84 968,970,242.01 933,093,171.10 753,240,448.61
Owner’s equity (or
shareholder’s equity):
Paid-in capital (or share
capital)
593,923,220.00 593,923,220.00 593,923,220.00 593,923,220.00
Capital surplus 271,719,841.74 268,447,075.77 271,719,841.74 268,447,075.77
Less: treasury stock
Special reserves 16,364,992.87 16,364,992.87 16,364,992.87 16,364,992.87
Earned surplus 73,514,866.46 73,514,866.46 73,514,866.46 73,514,866.46
General risk provision
Retained earnings 157,360,997.31 155,474,967.65 143,035,950.70 136,824,191.70
Foreign exchange
difference
Total owners’ equity
attributable to parent
company
1,112,883,918.38 1,107,725,122.75 1,098,558,871.77 1,089,074,346.80
Minority interests 16,943,484.33 17,829,809.82
Total owners’ equity 1,129,827,402.71 1,107,725,122.75 1,116,388,681.59 1,089,074,346.80
Total liabilities and owners’
equity
2,337,437,595.55 2,076,695,364.76 2,049,481,852.69 1,842,314,795.41
Income StatementPrepared by: Hubei Sanonda Co., Ltd. Jan.-Jun. 2009 Unit: (RMB) Yuan
Amount of current period Amount of last period
Items
Consolidation Parent company Consolidation Parent company
Ⅰ. Total operation revenue 985,283,990.84 705,509,417.65 1,252,546,727.94 883,883,071.30
Including: Sales 985,283,990.84 705,509,417.65 1,252,546,727.94 883,883,071.30
Interest income
Premium income
Handling charges and
commission income
Ⅱ. Total operation cost 930,247,286.84 657,640,802.04 1,150,841,068.49 788,166,399.97
Including: Cost of sales 810,536,655.99 577,862,532.97 972,751,275.69 661,215,874.47
Interest expenses
Handling charges and
commission expenses
Payments on
surrenders
Claim expenses-net
Provision for
insurance contract-net
Policyholder
dividends
Amortized
reinsurance expenditures
Business taxes and
surcharges
500,904.05 15,768.03 1,551,914.48 846,504.19
Selling expenses 39,341,923.32 23,491,390.74 58,255,764.11 40,142,355.17
Administrative
expenses
46,739,882.33 28,194,258.22 71,309,708.58 46,760,810.78
Financial expenses 27,537,885.61 25,336,610.79 32,829,856.93 27,013,742.26
Asset impairment
loss
5,590,035.54 2,740,241.29 14,142,548.70 12,187,113.10
Add: gains/ losses from
changes in fair value (“-” for
losses)
2,196,656.32 2,196,656.32
Gains/ losses from
investment (“-” for losses)
1,440,000.00 11,831,698.11 3,353,148.38 18,763,825.07
Including: gains/
losses from investment in
affiliated enterprises and
joint ventures
Gains/ losses from
foreign exchange difference
(“-” for losses)Ⅲ. Operation profit (“-” for
losses)
58,673,360.32 61,896,970.04 105,058,807.83 114,480,496.40
Add: non-business income 2,659,803.07 103,229.34 152,871.45 62,667.78
Less: non-business
expenses
1,035,555.33 863,633.53 1,010,032.68 758,151.98
Including: losses from
disposal of non-current assets
Ⅳ. Total profit (“-” for
losses)
60,297,608.06 61,136,565.85 104,201,646.60 113,785,012.20
Less: income tax expenses 15,073,885.85 12,686,216.93 26,050,411.66 24,608,295.46
Ⅴ. Net profit (“-” for losses) 45,223,722.21 48,450,348.92 78,151,234.94 89,176,716.74
Attributable to owners
of parent company
44,124,619.58 48,450,348.92 77,284,465.57 89,176,716.74
Minority interest 1,099,102.63 866,769.37
Ⅵ. Earnings per share
(Ⅰ) Basic earnings per
share
0.0743 0.1301
(Ⅱ) Diluted earnings
per share
0.0743 0.1301
Cash Flow Statement
Prepared by: Hubei Sanonda Co., Ltd. Jan.-Jun. 2009 Unit: (RMB) Yuan
Amount of current period Amount of last period
Items
Consolidation Parent company Consolidation Parent company
Ⅰ. Cash flows from
operating activities
Cash received from
sales of goods and rendering
of labor services
815,640,461.00 629,911,544.57 1,059,487,101.35 740,564,728.98
Net increase of deposits
from customers and due from
banks and other financial
institutions
Net increase of loans
from the central bank
Net increase of funds
borrowed from other
financial institutions
Cash received from
premium of original
insurance contracts
Net cash received from
reinsurance businessNet increase of savings
of policy holders and
investment fund
Net increase of disposal
of transactional financial
assets
Cash received from
interest, handling charges
and commissions
Net increase of
borrowings from banks and
other financial institutions
Net cash increase of
buy-back business
Tax refunds received 7,466,937.10 4,313,672.06 12,384,932.80 8,522,824.72
Other cash received
relating to operating
activities
22,779,215.89 27,375,736.82 46,727,763.50 27,656,478.25
Subtotal of cash
inflows from operating
activities
845,886,613.99 661,600,953.45 1,118,599,797.65 776,744,031.95
Cash paid for purchase
of commodities and
reception of service
584,292,545.59 419,080,706.47 827,342,034.01 580,708,884.15
Net increase of
customer borrowings and
advances
Net increase of funds
deposited in the central bank
and amount due from banks
Cash for paying claims
of the original insurance
contract
Cash paid for interest,
handling charges and
commissions
Cash paid for policy
dividends
Cash paid to and on
behalf of employees
54,889,480.84 34,881,129.75 48,719,232.74 24,585,559.48
Various taxes paid 76,265,886.56 62,340,271.73 45,274,141.48 29,694,265.82
Other cash paid relating
to operating activities
70,508,592.10 49,750,063.78 86,437,412.68 49,902,178.07
Subtotal of cash 785,956,505.09 566,052,171.73 1,007,772,820.91 684,890,887.52outflows from operating
activities
Net cash flows
from operating activities
59,930,108.90 95,548,781.72 110,826,976.74 91,853,144.43
Ⅱ. Cash flows from
investment activities:
Cash received from
disposal of investments
3,036,457.50 3,036,457.50 9,588,046.41 24,997,725.07
Investment income 487,500.00
Net cash received from
disposal of fixed assets,
intangible assets and other
long-term assets
3,569,562.00 29,853.00 350,300.00 350,300.00
Net cash received from
disposal of subsidiaries and
other operation units
Other cash received
relating to investment
activities
120,168.76 87,561.13
Subtotal of cash
inflows from investment
activities
6,726,188.26 3,153,871.63 9,938,346.41 25,835,525.07
Cash paid to acquire
fixed assets, intangible assets
and other long-term assets
201,634,779.90 176,882,084.58 215,218,485.75 215,057,222.75
Cash paid for
investment
15,600,000.00
Net increase of pledged
loans
Net cash paid by
subsidiaries and other
operating units
Other cash paid relating
to other investment activities
1,661,895.27 1,462,536.37
Subtotal of cash
outflows from investment
activities
203,296,675.17 193,944,620.95 215,218,485.75 215,057,222.75
Net cash flows
from investment activities
-196,570,486.91 -190,790,749.32 -205,280,139.34 -189,221,697.68
Ⅲ.Cash flows from
financing activities
Cash received from
capital contribution
4,900,000.00
Of which: cash received 4,900,000.00from capital contribution to
subsidiaries by minority
shareholders
Cash received from
borrowings
605,945,661.86 435,000,000.00 746,048,736.51 508,560,000.00
Cash received from
issuance of bonds
Other cash received
relating to financing
activities
3,722,549.10 3,431,828.17 3,384,396.70 2,701,560.54
Subtotal of cash
inflows from financing
activities
614,568,210.96 438,431,828.17 749,433,133.21 511,261,560.54
Cash paid to repay loans 324,899,516.48 212,000,000.00 407,117,872.22 180,000,000.00
Cash paid for interest
expenses and distribution of
dividends or profit
52,299,175.23 48,720,492.40 20,159,627.94 18,458,550.60
Of which: stock
dividends and profits paid to
minority shareholders by
subsidiaries
1,154,633.12
Other cash paid relating
to financing activities
6,487,606.10 5,591,432.98 4,769,743.36 3,339,988.22
Subtotal of cash
outflows from financing
activities
383,686,297.81 266,311,925.38 432,047,243.52 201,798,538.82
Net cash flows
from financing activities
230,881,913.15 172,119,902.79 317,385,889.69 309,463,021.72
Ⅳ. Effect of foreign
exchange changes on cash
and cash equivalents
Ⅴ. Net increase of cash and
cash equivalents
94,241,535.14 76,877,935.19 222,932,727.09 212,094,468.47
Plus: beginning balance
of cash and cash equivalents
562,832,319.76 490,154,426.30 452,405,704.33 384,695,931.50
Ⅵ. Closing balance of cash
and cash equivalents
657,073,854.90 567,032,361.49 675,338,431.42 596,790,399.97Consolidated Statement of Changes in Owners’ Equity
Prepared by: Hubei Sanonda Co., Ltd. For the first half of 2009 Unit: (RMB) Yuan
Amount of current period Amount of last year
Owners’ equity attributable to parent company Owners’ equity attributable to parent company
Items
Paid-in
capital
(or
share
capital)
Capital
reserve
Less:
treasury
stock
Special
reserve
Surplus
public
reserve
General
risk
reserve
Retaine
d profits
Others
Minority
interests
Total
owners’
equity
Paid-in
capital
(or
share
capital)
Capital
reserve
Less:
treasury
stock
Special
reserve
Surplus
public
reserve
General
risk
reserve
Retaine
d profits
Others
Minority
interests
Total
owners’
equity
I. balance at the end of last year
593,923
,220.00
271,719
,841.74
16,364,
992.87
73,514,
866.46
143,035
,950.70
17,829,
809.82
1,116,38
8,681.5
9
593,923
,220.00
271,719
,841.74
57,285,
245.67
-7,943,8
21.74
23,086,
736.33
938,071
,222.00
Add: change of accounting
policy
Correction of errors in
previous period
Others
II. balance at the beginning of
this year
593,923
,220.00
271,719
,841.74
16,364,
992.87
73,514,
866.46
143,035
,950.70
17,829,
809.82
1,116,38
8,681.5
9
593,923
,220.00
271,719
,841.74
57,285,
245.67
-7,943,8
21.74
23,086,
736.33
938,071
,222.00
III. Increase/ decrease of
amount in this year (“-” means
decrease)
14,325,
046.61
-886,32
5.49
13,438,
721.12
77,284,
465.57
-1,591,7
00.09
75,692,
765.48
(I) Net profit
44,124,
619.58
1,099,1
02.63
45,223,
722.21
77,284,
465.57
866,769
.37
78,151,
234.94
(II)Gain/loss listed to owners’equity directly
1. Net amount of changes
in fair value of financial assets
available for sale
2. Effect of changes in other
owners’ equity of invested units
under equity method
3. Effect of income tax
concerning items listed to
owners’ equity
4. Others
Subtotal of (I)and (II)
44,124,
619.58
1,099,1
02.63
45,223,
722.21
77,284,
465.57
866,769
.37
78,151,
234.94
(III) Capital input and
reduction of owners
1,960,0
00.00
1,960,0
00.00
-2,458,4
69.46
-2,458,4
69.46
1. Capital input of owners
1,960,0
00.00
1,960,0
00.00
2. Amount of stock
payment included in owners’
equity
3．Others
-2,458,4
69.46
-2,458,4
69.46
(IV) Profit distribution
-29,799,
572.97
-3,945,4
28.12
-33,745,
001.09
1．Withdrawing surplus
public reserve2. Withdrawing general risk
reserve
3．Distribution to owners
(shareholders)
-29,799,
572.97
-3,945,4
28.12
-33,745,
001.09
4．Others
(V) Internal carrying forward
of owners’ equity
1. New increase of capital
(share capital) from capital
reserves
2．New increase of capital
(share capital) from surplus
reserves
3. Surplus reserves make
up losses
4. Others
IV. Balance at the end of this
period
593,923
,220.00
271,719
,841.74
16,364,
992.87
73,514,
866.46
157,360
,997.31
16,943,
484.33
1,129,8
27,402.
71
593,923
,220.00
271,719
,841.74
57,285,
245.67
69,340,
643.83
21,495,
036.24
1,013,7
63,987.
48Statement of Changes in Owners’ Equity of Parent Company
Prepared by: Hubei Sanonda Co., Ltd. For the first half of 2009 Unit: (RMB) Yuan
Amount of current period Amount of last year
Items
Paid-in
capital (or
share
capital)
Capital
reserve
Less:
treasury
stock
Special
reserve
Surplus
public
reserve
Retained
profit
Total owners’
equity
Paid-in
capital (or
share
capital)
Capital
reserve
Less:
treasury
stock
Special
reserve
Surplus
public
reserve
Retained
profit
Total owners’
equity
I. balance at the end of last year
593,923,220
.00
268,447,075
.77
16,364,992.
87
73,514,866.
46
136,824,191
.70
1,089,074,34
6.80
593,923,220
.00
268,447,075
.77
57,285,245.
67
-27,490,764
.62
892,164,776.
82
Add: change of accounting
policy
Correction of errors in
previous period
Others
II. balance at the beginning of
this year
593,923,220
.00
268,447,075
.77
16,364,992.
87
73,514,866.
46
136,824,191
.70
1,089,074,34
6.80
593,923,220
.00
268,447,075
.77
57,285,245.
67
-27,490,764
.62
892,164,776.
82
III. Increase/ decrease of
amount in this year (“-” means
decrease)
18,650,775.
95
18,650,775.9
5
89,176,716.
74
89,176,716.7
4
(I) Net profit
48,450,348.
92
48,450,348.9
2
89,176,716.
74
89,176,716.7
4
(II)Gain/loss listed to owners’
equity directly
1. Net amount of changes
in fair value of financial assets
available for sale2. Effect of changes in other
owners’ equity of invested units
under equity method
3. Effect of income tax
concerning items listed to
owners’ equity
4. Others
Subtotal of (I)and (II)
48,450,348.
92
48,450,348.9
2
89,176,716.
74
89,176,716.7
4
(III) Capital input and
reduction of owners
1. Capital input of owners
2. Amount of stock
payment included in owners’
equity
3．Others
(IV) Profit distribution
-29,799,572
.97
-29,799,572.
97
1．Withdrawing surplus
public reserve
2. Distribution to owners
(shareholders)
-29,799,572
.97
-29,799,572.
97
3．Others
(V) Internal carrying forward
of owners’ equity
1. New increase of capital(share capital) from capital
reserves
2．New increase of capital
(share capital) from surplus
reserves
3. Surplus reserves make
up losses
4. Others
IV. Balance at the end of this
period
593,923,220
.00
268,447,075
.77
16,364,992.
87
73,514,866.
46
155,474,967
.65
1,107,725,12
2.75
593,923,220
.00
268,447,075
.77
57,285,245.
67
61,685,952.
12
981,341,493.
56Hubei Sanonda Co., Ltd.
Notes to the Financial Statement
For the First Six Months of 2009
(All amounts in RMB Yuan unless otherwise stated)
I. Company profiles
The former Hubei Sanonda Co., Ltd. (hereinafter referred to "Company" or "the
Company") is state operated Hubei Sha City Pesticides Factory, which was set up in
1958. In Aug. 1992, as approved by Hubei Commission for Economic System
Reformation, the original enterprise was reorganized as Hubei Sanonda Co., Ltd., which
turned into the first pioneer large state-operated industry enterprise in Hubei Province.
On 8 Sep. 1992, on the basis of reorganization of the former enterprise, the Company
was established formally. As approved by People's Government of Hubei Province and
reviewed by CSRC, 30,000,000 RMB ordinary public shares ("A shares") of the
Company have been issued since Oct. to 30 Nov. 1993. On 3 Dec. 1993, shares of the
Company have been listed on Shenzhen Stock Exchange.
As approved by Securities Committee of the State Council with "ZF(1997) No. 23", its
domestically listed foreign ordinary public shares ("B shares") amounting to
100,000,000 shares have been issued at the par value of RMB 1 per share on 29 Apr.
1997 to 5 May 1997, such shares have been listed on the Shenzhen Stock Exchange on
15 May 1997, and over-allotment option of 15,000,000 shares have been exercised since
15 May to 21 May 1997. The proposal on transferring capital reserve into share capital
has been examined and approved at the Shareholders' General Meeting 2006 held in May
2007, which transferred capital reserve into share capital at the rate of 10 for 10, and has
been implemented in July 2007. After transferring, the total share capital was RMB
593,920,000.
The addresses of the registered office and principal place of business of the Company
are No. 93, Beijing East Road, Jingzhou, Hubei. Legal representative is Li Zuorong.
Share abbreviations are Sanonda A and Sanonda B with stock code of 000530 and
200530 respectively.
Parent company of the Company is Sanonda Group Corporation, as well as ChemChina
Agrochemical Corporation as final parent company.
Main pesticide products include orthene, paraquate, glyphosate, trichlorphon, DDVP,
omethoate, triazophos, imidacloprid and carbofuran. Main chemical products include
spermine, liquid caustic soda, liquefied chlorine gas and hydrochloric acid. The
Company has self-operated import & export right. The Company has passed ISO9002
Quality System Certification and ISO14001 Environment Management System
Certification.
II. Statement for complying with the accounting standard for business enterprise
The financial statements of the Company are prepared based on the following
preparation basis, which are in compliance with the requirements of the accounting
standard for business enterprise and reflect the Company’s financial status, operatingresults and cash flows in true and complete.
III. Preparation basis of financial statement
With sustaining operation as a postulate premise, the Company prepared the financial
statement in accordance with the below-mentioned important accounting policies and
accounting estimate and actual transaction events, as well as the provisions related to
accounting standard for enterprise business promulgated by the Ministry of Finance on
15 Feb. 2006 and Application Guidelines.
IV. Major accounting policies and accounting estimates
1. Fiscal period
The Company’s fiscal year is from Jan. 1 to Dec. 31 the Gregorian calendar.
2. Bookkeeping base currency
The Company adopts Renminbi as a bookkeeping base currency.
3. Financial statement items that measurement attributes changed and
measurement attributes adopted in the reporting period
Measurement attributes adopted by the Company shall include historical cost,
replacement cost, net realizable value, present value and fair value.
The Company shall make accounting recognition, measurement and report by adopting
accrual basis. Historical cost shall be used for measurement of financial statement items
except that such items as tradable financial assets, financial assets available for sales,
business merger not under the same control, nonmonetary assets exchange with
commercial purpose, debts reorganization, nonmonetary assets invested by investors
shall be measured by adopting fair value.
4. Recognition standard for cash equivalents
In cash flow statement, cash defines cash on hand and any deposit that can be used for
cover, while cash equivalents are short-term (usually due within 3 months since the day
of purchase) and high circulating investments, which are easily convertible into known
amount of cash and whose risks in change of value are minimal.
5. Accounting methods for foreign currency
(1) As for a foreign currency transaction, the Company shall convert the amount in a
foreign currency into amount in its bookkeeping base currency at the middle price of
market exchange rate published by the People’s Bank of China on the day the transaction
is occurred. Of which, as for such transactions as foreign exchange or involving in
foreign exchange, the Company shall converted into amount in the bookkeeping base
currency at actual exchange rate the transaction is occurred.
(2) The Company shall, on the balance sheet date, converted the account balance of
foreign currency monetary assets and liabilities into amount in its bookkeeping base
currency at the middle price of market exchange rate published by the People’s Bank ofChina on the balance sheet date. The balance arising from the difference between amount
in the bookkeeping base currency converted at exchange rate on the balance sheet date
and amount in the original bookkeeping base currency shall be recorded into the
exchange gains and losses. Of which, the exchange gains and losses arising from foreign
currency loans related to acquisition of fixed assets shall be treated at the principle of
capitalization of borrowing costs, other balance of exchange shall be measured into the
financial expense of the current period.
(3) The Company shall, on the balance sheet date, convert the foreign currency
nonmonetary items measured at the historical cost into amount in its bookkeeping base
currency at the middle price of market exchange rate published by the People’s Bank of
China on the day the transaction is occurred, not changing its original bookkeeping base
currency. Where the foreign nonmonetary items measured at the fair value shall be
converted into amount in its bookkeeping base currency at the middle price of market
exchange rate published by the People’s Bank of China on the day the fair value is
recognized, the exchange gains and losses arising therefrom shall be recorded into the
current period gains and losses as gains and losses on change in fair value.
6. Financial assets and financial liabilities
(1) Classification of Financial assets and financial liabilities
Financial assets shall be classified into the following four categories when they are
initially recognized: (a) the financial assets which are measured at their fair values and
the variation of which is recorded into the profits and losses of the current period,
including transactional financial assets and the financial assets which are measured at
their fair values and of which the variation is included in the current profits and losses; (b)
the investments which will be held to their maturity; (c) loans and the account
receivables; and (d)financial assets available for sale.
Financial liabilities shall be classified into the following two categories when they are
initially recognized:(a) the financial liabilities which are measured at their fair values and
of which the variation is included in the current profits and losses, including transactional
financial liabilities and the designated financial liabilities which are measured at their fair
values and of which the variation is included in the current profits and losses; and (b)
other financial liabilities.
(2) Recognition of financial assets and financial liabilities and measurement methods
When the Company becomes a party to a financial instrument, it shall recognize a
financial asset or financial liability. The financial assets and financial liabilities initially
recognized by the Company shall be measured at their fair values. For the financial assets
and liabilities measured at their fair values and of which the variation is recorded into the
profits and losses of the current period, the transaction expenses thereof shall be directly
recorded into the profits and losses of the current period; for other categories of financial
assets and financial liabilities, the transaction expenses thereof shall be included into the
initially recognized amount.The Company shall make subsequent measurement on its financial assets according to
their fair values, and may not deduct the transaction expenses that may occur when it
disposes of the said financial asset in the future. However, those under the following
circumstances shall be excluded: (a) The investments held until their maturity, loans and
accounts receivable shall be measured on the basis of the post-amortization costs by
adopting the actual interest rate method; (b) The equity instrument investments for which
there is no quotation in the active market and whose fair value cannot be measured
reliably, and the derivative financial assets which are connected with the said equity
instrument and must be settled by delivering the said equity instrument shall be measured
on the basis of their costs.
The Company shall make subsequent measurement on its financial liabilities on the basis
of the post-amortization costs by adopting the actual interest rate method, with the
exception of those under the following circumstances: (a) For the financial liabilities
measured at their fair values and of which the variation is recorded into the profits and
losses of the current period, they shall be measured at their fair values, and none of the
transaction expenses may be deducted, which may occur when the financial liabilities are
settled in the future; (b) For the derivative financial liabilities, which are connected to the
equity instrument for which there is no quotation in the active market and whose fair
value cannot be reliably measured, and which must be settled by delivering the equity
instrument, they shall be measured on the basis of their costs; (c) For the financial
guarantee contracts which are not designated as a financial liability measured at its fair
value and the variation thereof is recorded into the profits and losses of the current period,
and for the commitments to grant loans which are not designated to be measured at the
fair value and of which the variation is recorded into the profits and losses of the current
period and which will enjoy an interest rate lower than that of the market, a subsequent
measurement shall be made after they are initially recognized according to the higher one
of the following: i. the amount as determined according to the best estimate of the
necessary expenses for the performance of the current obligation.; or ii. the surplus after
accumulative amortization as determined according to the effective interest method is
subtracted from the initially recognized amount.
(3) Recognition of transfer of financial assets
Where the Company has transferred nearly all of the risks and rewards related to the
ownership of the financial asset to the transferee, it shall stop recognizing the financial
asset. If it retained nearly all of the risks and rewards related to the ownership of the
financial asset, it shall continue to recognize transferred financial assets, and the
consideration received shall be recognized as a financial liabilities. Where the Company
does not transfer or retain nearly all of the risks and rewards related to the ownership of a
financial asset, it shall deal with it according to the circumstances as follows,
respectively:
(a) If it gives up its control over the financial asset, it shall stop recognizing the financial
asset;(b) If it does not give up its control over the financial asset, it shall, according to the
extent of its continuous involvement in the transferred financial asset, recognize the
related financial asset and recognize the relevant liability accordingly.
If the transfer of an entire financial asset satisfies the conditions for stopping recognition,
the difference between the amounts of the following two items shall be recorded in the
profits and losses of the current period:
(a)The book value of the transferred financial asset;
(b) The sum of consideration received from the transfer, and the accumulative amount of
the changes of the fair value originally recorded in the owner's equities.
If the transfer of partial financial asset satisfies the conditions to stop the recognition, the
entire book value of the transferred financial asset shall, between the portion whose
recognition has been stopped and the portion whose recognition has not been stopped, be
apportioned according to their respective relative fair value, and the difference between
the amounts of the following two items shall be included into the profits and losses of the
current period:
(a) The book value of the portion whose recognition has been stopped;
(b) The sum of consideration of the portion whose recognition has been stopped, and the
portion of the accumulative amount of the changes in the fair value originally recorded in
the owner's equities which are corresponding to the portion whose recognition has been
stopped.
(4) Determination of the fair value of main financial assets and financial liabilities
As for the financial assets or financial liabilities for which there is an active market, the
quoted prices in the active market shall be used to determine the fair values thereof.
Where there is no active market for a financial instrument, the enterprise concerned shall
adopt value appraisal techniques (including the prices adopted by the parties, who are
familiar with the condition, in the latest market transaction upon their own free will, the
current fair value obtained by referring to other financial instruments of the same
essential nature, the cash flow capitalization method and the option pricing model, etc.)
to determine its fair value. As for the financial assets initially obtained or produced at
source and the financial liabilities assumed, the fair value thereof shall be determined on
the basis of the transaction price of the market.
(5) Impairment test of financial assets and withdrawal method of impairment provision
The Company shall carry out an impairment test, on the balance sheet day, on the
carrying amount of the financial assets other than those measured at their fair values and
of which the variation is recorded into the profits and losses of the current period. An
impairment test shall be made on the financial assets with significant single amounts.
With regard to the financial assets with insignificant single amounts, an independent
impairment test may be included in a combination of financial assets with similar credit
risk features so as to carry out an impairment-related test. Where, upon independent test,the financial asset (including those financial assets with significant single amounts and
those with insignificant amounts) has not been impaired, it shall be included in a
combination of financial assets with similar risk features so as to conduct another
impairment test.
As for a financial asset measured on the basis of post-amortization costs, where there is
any objective evidence proving that such financial asset has been impaired, a loss on
impairment shall be made in the light of the balance between the book value and the
current value of the predicted future cash flow. Where there is a very small gap between
the predicted future cash flow of a short-term account receivable item and the current
value thereof, the predicted future cash flow is not required to be capitalized when
determining the relevant impairment-related losses. Where an equity instrument
investment for which there is no quoted price in the active market and whose fair value
cannot be reliably measured, or a derivative financial asset which is connected with the
equity instrument and which must be settled by delivering the equity instrument, suffers
from any impairment, the gap between the carrying amount of the equity instrument
investment or the derivative financial asset and the current value of the future cash flow
of similar financial assets capitalized according to the returns ratio of the market at the
same time shall be recognized as impairment-related losses. Where the fair value of
financial assets available for sales has decrease by a big margin and the expected
downward trend belongs to non-transient, the losses on impairment shall be recognized,
and the accumulative losses on the fair value of the owner’s equity which was directly
included shall be transferred out and recorded into the impairment-related losses.
7. Measurement of bad debts for accounts receivable
(1) Recognition of bad debts: the accounts receivable can not be recalled in line with the
legal liquidation procedure because debtor has a great bankruptcy and insolvency; or the
accounts receivable indeed can not be recalled because debtor is cancelled without
leaving any property or there is no person to undertake the obligation; or accounts
receivable can not be recalled where the debtor failed to perform obligation overdue and
there are conclusive evidences which make it clear hat the accounts receivable can not be
recalled.
(2) Allowance method shall be adopted by the company in the computation of the bad
debts.
(3) Withdrawal method of provision for bad debt and proportion: An independent
impairment test shall be carried out on the accounts receivable with significant single
amounts (the balance over RMB 5 million), and the losses on impairment shall be made
on the basis of the balance between the current values of the predicted future cash flow
lower than book value so as to withdraw provision for bad debts. The financial assets
with insignificant single amounts shall be divided into several combinations in the light
of aging, and then the losses on impairment shall be made on the basis of a certain
proportion of ending balance of accounts receivable combination so as to withdraw
provision for bad debts. The Company shall withdraw the provision for bad debts at a
proportion of 5% of ending balance of accounts receivable for every aging and 100% ofaccounts receivable for aging with 5 years or over. Where there are conclusive evidences
which make it clear hat the accounts receivable can not be recalled, the Company shall,
in accordance with administration authority, make a loss on bad debts after approval of
the Shareholders’ General Meeting or the Board of Directors, so as to write off the
provision for bad debts withdrawn.
8. Measurement of inventories
(1) The inventories of the Company include raw materials, goods in process,
merchandise on hand, consigned processing materials, goods in transit, packaging
materials, low value consumables, etc.
(2) The inventories shall be initially measured in light of their cost. On the date of
balance sheet, the inventories shall be measured whichever is lower in accordance with
the cost and the net realizable value.
(3) Physical inventory at fixed periods shall be taken under perpetual inventory system.
(4) A bulk chemicals raw materials, good in process and finished products shall be
priced at actual cost, while cost of sending out inventories shall be carried forward at the
weighted average method. Auxiliary material and packaging materials shall be priced at
actual cost and be measured by adopting planned cost; the difference between the actual
cost and planned cost shall be recorded into materials cost variance when measurement,
which materials cost variance allocable thereto shall be calculated based on materials
cost difference rate at the end of month, and the planned cost of sending out materials
shall be adjusted as actual cost. Low value consumables shall be recoded at actual cost
and be amortized by employing the one-off write-off method when claiming.
(5) On the date of balance sheet, the inventories shall be measured whichever is lower in
accordance with the cost and the net realizable value. If the cost of inventories is higher
than the net realizable value, the provision for the loss on decline in value of inventories
shall be made and be included in the current profits and losses. If the factors causing any
write-down of the inventories have disappeared, the amount of write-down shall be
resumed and be reversed from the provision for the loss on decline in value of
inventories that has been made. The reverse amount shall be included in the current
profits and losses. The net realizable value refers to in the daily business activity the
amount after deducting the estimated cost of completion, estimated sale expense and
relevant taxes from the estimated sale price of inventories.
9. Measurement of investment real estates
Investment real estates of the Company include the right to use any land which has
already been rented; the right to use any land which is held and prepared for transfer
after appreciation; and the right to use any building which has already been rented.
Investment real estates shall be recognized when it meets the following requirements
simultaneously: (a) the Company can get rental income related to the investment real
estates or incremental return, and (b) the cost of the investment real estates can be
reliably measured. The initial measurement shall be made at its actual cost when
purchase or building.The Company shall make a follow-up measurement to the investment real estates by
employing the cost pattern on the date of the balance sheet. An accrual depreciation or
amortization shall be made for the investment real estates in the light of the accounting
policies of fixed assets and intangible assets.
When the company has well –established evidence to indicate that the purpose of the real
estate has changed, such as begins to be used for its own, it shall convert the investment
real estate to other assets or vise versa.
Measurement of impairment provision for investment real estates: on the balance sheet
data, the Company shall make inspection to the investment real estates item by item;
where there is any sign of impairment of the investment real estates, the recoverable
amount shall be estimated in the light of the individual investment real estate item; with
regard to the balance between recoverable amount lower than its book value, its
provision for impairment of the investment real estate shall be withdrawn. The provision
for impairment of the investment real estate shall be recognized on the basis of the
balance between the book value of individual investment real estate item higher than its
recoverable amount. Once any impairment provision of the investment real estate is
recognized, it shall not be switched back in the future accounting periods.
10. Measurement of Fixed assets
(1) The term "fixed assets" refers to the tangible assets that simultaneously possess the
features as follows: (a) They are held for the sake of producing commodities, rendering
labor service, renting or business management; and (b) Their useful life is in excess of
one fiscal year.
No fixed asset may be recognized unless it simultaneously meets the conditions as
follows: (a) The economic benefits pertinent to the fixed asset are likely to flow into the
enterprise; and (b) The cost of the fixed asset can be measured reliably.
The initial measurement of a fixed asset shall be made at its cost.
(2) Depreciation of fixed assets: The Company shall make depreciation for all its fixed
assets. However, the fixed assets that have been fully depreciated but are still in use and
the land that is separately measured and included shall be excluded. The term
"depreciable amount" refers to the amount of deducting its expected net salvage value
from the original price of the fixed asset to be depreciated. For a fixed asset, the
provision for depreciation has been made, it shall deduct the accumulative amount of the
provision for impairment of the depreciated fixed asset that has been already made shall
be deducted. The "expected net salvage value" refers to the expected amount that an
enterprise may obtain from the current disposal of a fixed asset after deducting the
expected disposal expenses at the expiration of its expected useful life.
Depreciation of fixed assets shall be made by adopting the straight-line method.
categories, expected useful life, expected residual ratio and yearly depreciation:Categories
Depreciation
life
yearly
depreciation
Expected residual
ratio
House & buildings 24 years 4.00% 4%
Special equipment 9 years 10.89% 2%
General-purpose equipment 18 years 5.33% 4%
Transportation vehicles 9 years 10.89% 2%
Productive fixed assets has a large amount under the production environment with a
certain chemical corrosion, as a result, the residual value is the smaller.
(3) Measurement of provision for fixed asset impairment: on the balance sheet data, the
Company shall make inspection to the fixed assets item by item; where there is any sign
of impairment of the fixed assets, the recoverable amount shall be estimated in the light
of the individual fixed assets item; with regard to the balance between recoverable
amount lower than its book value, its provision for the fixed assets impairment shall be
withdrawn. The provision for fixed assets impairment shall be recognized on the basis of
the balance between the book value of individual fixed assets item higher than its
recoverable amount. Once any impairment provision of the fixed assets is recognized, it
shall not be switched back in the future accounting periods.
11. Measurement of construction in progress
(1) Construction in progress of the Company includes self-operating project and
construction contracted.
(2) Initial measurement of the construction in progress: Cost of the construction in
progress shall be recognized at its actual expenses incurred. Where interest on borrowing
related to the construction in progress occurred before the fixed assets reached estimated
usable status, it shall be capitalized.
(3) Time point of construction in progress being carried forward as fixed assets shall be
recognized at the time point that the construction reaches estimated usable status.
(4) Measurement of provision for impairment of construction in progress: on the balance
sheet data, the Company shall make inspection to the construction in progress item by
item; where there is any sign of impairment of the construction in progress, the
recoverable amount shall be estimated; with regard to the balance between recoverable
amount lower than its book value, its provision for the construction in progress
impairment shall be withdrawn. The provision for impairment of construction in
progress shall be recognized on the basis of the balance between the book value of
individual construction in progress item higher than its recoverable amount. Once any
impairment provision of the construction in progress is recognized, it shall not be
switched back in the future accounting periods.
12. Confirmation and measurement of intangible assets
(1) Initial Measurement of intangible assetsThe intangible assets are initially measured according to its actual cost when acquired.
(2) Classification criteria for research expenditures and development expenditures of the
Company’s internal research and development projects
The expenditures for the Company’s internal research and development projects are
classified into research expenditures and development expenditures for separate
handling.
The research expenditures refer to the Company’s expenses for the creative and planned
investigations to acquire and understand new scientific or technological knowledge. The
Company’s research expenditures for its internal research and development projects are
recorded into the profit or loss for the current period.
The development expenditures refer to the Company’s expenses for the application of
research achievement and other knowledge to a certain plan or design, prior to the
commercial production or use, so as to produce any new material, device or product, or
substantially improved material, device and product. And the development expenditures
are confirmed as intangible assets when they satisfied the following conditions
simultaneously: 1) It is technically feasible to finish the intangible assets for use or sale;
2) It is intended to finish and use or sell the intangible assets; 3) The usefulness of
methods for intangible assets to generate economic benefits is proved, including being
able to prove that there is a potential market for the products manufactured by applying
the intangible assets or that there is a potential market for the intangible assets itself or
that the intangible assets will be used internally; 4) It is able to finish the development of
the intangible assets, and able to use or sell the intangible assets, with the support of
sufficient technologies, financial resources and other resources; and 5) The development
expenditures of the intangible assets can be reliably measured.
Any other expenditure that the Company can not identify their belonging to research
expenditures or development expenditures are recorded as management expenditures
into the profit or loss for the current period.
(3) Subsequent measurement of intangible assets
① Estimate of the service life of intangible assets
As for the intangible assets that are possessed or controlled by the Company and that are
derived from any contractual right or other statutory rights, their service lives do not
exceed the term of the contractual right or other statutory rights; Where the contractual
right or other statutory rights continue due to their renewal after expiration and it is
proved that the Company does not need to pay a high cost for the renewal, the renewed
period is included in the service life of the intangible assets; where the service lives of
the intangible assets are not stipulated in contracts or by law, they are determined by the
Company’s previous experience or professional opinions from relevant experts. After
adoption of the aforesaid methods, if it is still unable to forecast the period when the
intangible asset can bring economic benefits to the Company, it is regarded by the
Company as an intangible assets with uncertain service life.② Check on the service life of intangible assets
The Company checks the service life of intangible assets on the balance sheet date.
Where there are evidences to prove that the service life of an intangible asset is different
from before, the service life of the intangible asset will be changed and treated according
to accounting estimate; where there are evidences to prove that the intangible assets with
uncertain service life have limited service lives, they will be estimated of their service
lives, and be treated according to the handling principles for intangible assets with
uncertain service life.
③ Amortization of intangible assets with limited service lives
The Company’s intangible assets with limited service lives are amortized on a
straight-line basis within their expected service lives beginning from the month of their
acquisition.
④ Subsequent measurement of intangible assets with uncertain service lives
Based on the relevant information available, if the service life of an intangible asset can
not be reasonably estimated, the Company recognizes the intangible asset as an
intangible asset with an uncertain service life. The intangible assets with uncertain
service lives will not be amortized during the holding period, but the Company will
conduct testing in every accounting period for the devaluation of intangible assets with
uncertain service lives.
(4) Withdrawal method of reserve for intangible assets impairment
At the period-end, the Company checks its intangible assets item by item. Where there is
a sign of asset impairment, the Company estimates the recoverable amount according to
the single intangible asset. Where the recoverable amount of the asset is less than its
book value, the book value is written down as the recoverable amount. The written-down
amount is recognized as assets impairment loss, and the corresponding impairment
reserve is withdrawn. Upon the recognition of the reserve for intangible assets
impairment, it is not to be reversed in the following accounting periods.
13. Long-term Equity Investments Recognition and Measurement
(1) The initial measurement of long-term equity investment: the initial cost of the
long-term equity investment, which is acquired by different means, shall be ascertained
in the following ways:
○1 As for the long-term equity investment acquired by merger of enterprises under the
same control, the share of the book value of the owner’s equity of the merged enterprise,
on the date of merger, is regarded as the initial cost of the long-term equity investment.
The difference between the initial cost of the long-term equity investment and the
payment in cash, non-cash assets transferred as well as the book value of the debts borne
by the merging party, or the total face value of marketable securities issued shall be
accounted into capital reserve; If the capital reserve is insufficient to dilute, the retained
earnings shall be adjusted.○2 As for the long-term equity investment acquired by the merger under different control,
the merger costs ascertained is regarded as the initial cost of the long-term equity
investment. If the merger cost is larger than the fair value difference of the purchased
party’s net identifiable assets, it will be recorded as goodwill in the consolidated
financial statement; if the merger cost is smaller than the fair value difference of the
purchased party’s net identifiable assets, it will be accounted into current profits and
losses.
○3 Beside the aforesaid long-term equity investment acquired by enterprises merger, with
regard to the long-term investment acquired by payment in cash, non-monetary assets
paid, or marketable securities issued, its fair value shall be regarded as the initial cost of
the long-term equity investment; the initial cost of a long-term equity investment
obtained by debt rephrasing will be the fair value of shares owned after debt-for-equity
swap; as for long-term equity investment invested by investors, the valued ascertained in
the investment contract or agreement shall be regarded as the initial cost, but if the value
ascertained in the investment contract or agreement was not fair, the fair value of
investment equity would be regarded as the initial cost. The cash profit included in the
actual payment or consideration, which has been announced yet not drew, shall be
independently calculated as account receivables.
(2) Subsequent Measurement of Long-term Equity Investments: for a long-term equity
investment for which there is no offer in the active market and of which the fair value
cannot be reliably measured, if the Company has not joint control or significant
influence over the subsidiaries or the invested entities, the cost method shall be
employed in the measurement; if the Company has joint control or significant influence
over the invested entities, the equity method shall be employed.
The term “joint control” refers to the control over an economic activity in accordance
with the contracts and agreements. Following situations shall be considered to decide
whether it is joint control:
○1 No cooperative party can singly control the production and operation activities of the
joint venture.
○2 Decisions involving basic business activities of the joint venture require consensus
among the cooperative parties.
○3 The cooperative parties can appoint one cooperative party by contract or agreement to
conduct management over daily operation of the joint venture, but the appointed
cooperative party shall exercise its administrative power within the scope of finance and
business policy, which has been agreed by all cooperative parties.
The term “significant influences” refers to the power to participate in making decisions
on the financial and operating policies of the invested entities, but not to control or do
joint control together with other parties over the formulation of these policies. As for the
Company, holding directly or indirectly through subsidiaries more than 20% but less
than 50% voting shares is regarded as having significant influence over the invested
entities, except for the situations where there is specific evidence proving it can notparticipate the decision making in operation and production of the invested entities, and
thus cannot exert significant influence.
It’s generally considered by the Company that those entities which hold less than 20%
voting shares of the invested entities have no significant influence over the invested
entities except for the following situations:
○1 Having representative(s) in the Board of Directors or other similar authority of the
invested entities.
○2 Participating in the process of formulating policies in the invested entities, including
the formulation of dividend distribution policy etc.
○3 Having important transactions with the invested entities.
○4 Dispatching management personnel to the invested entities.
○5 Providing key technology materials to the invested entities.
(3) Impairment for long-term equity investment: if there are signals for impairment,
withdrawal in single items shall be conducted based on the difference between the
receivable amount and the book value, so as to ascertain impairment losses. Once
ascertained, the impairment for long-term equity investment will not be returned in the
coming accounting period.
14. Recognition and Measurement of Borrowing Cost
(1) The Range of Borrowing Costs
The Company’s borrowing costs include interest on borrowings, amortization of
discounts or premiums on borrowings, ancillary expenses, and exchange balance
incurred by foreign currency borrowings etc..
(2) The Ascertain Principle of Borrowing Costs
Where the borrowing costs incurred to the Company can be directly attributable to the
construction or production of assets eligible for capitalization, it shall be capitalized and
recorded into the costs of relevant assets. Other borrowing costs shall be recognized as
expenses on the basis of the actual amount incurred, and shall be recorded into the
current profits and losses.
(3) The Ascertain of Capitalization Period of Borrowing Costs
○1 The Ascertain of Beginning Capitalization
If the asset disbursements or the borrowing costs have already incurred, and the
construction or production activities which are necessary to prepare the asset for its
intended use or sale have already started, the capitalization of borrowing costs begins.
○2 The Ascertain of Suspending Capitalization
Where the construction or production of asset eligible for capitalization is interrupted
abnormally and the interruption period lasts for more than 3 months, the capitalization ofthe borrowing costs shall be suspended. The borrowing costs incurred during such period
shall be recognized as expenses, and shall be recorded into the profits and losses of the
current period, till the construction or production of the asset restarts. If the interruption
is a necessary step for making the qualified asset under acquisition and construction or
production ready for the intended use or sale, the capitalization of the borrowing costs
shall continue.
○3 The Ascertain of Ceasing Capitalization
When the asset eligible for capitalization under acquisition and construction or
production is ready for the intended use or sale, the capitalization of the borrowing costs
shall be ceased. The borrowing costs incurred after the asset eligible for capitalization
under acquisition and construction or production is ready for the intended use or sale
shall be recognized as expenses at the incurred amount when they are incurred, and shall
be recorded into the profits and losses of the current period.
(4) The Ascertain of the To-Be-Capitalized Amount of Borrowing Costs
○1 The Ascertain of the To-Be-Capitalized Amount of Borrowing Interests
During the period of capitalization, the to-be-capitalized amount of interests (including
the amortization of discounts or premiums) in each accounting period shall be
determined according to the following provisions:
A: As for specifically borrowed loans for the acquisition and construction or production
of assets eligible for capitalization, the to-be-capitalized amount of interests shall be
determined in light of the actual cost incurred of the specially borrowed loan at the
present period minus the income of interests earned on the unused borrowing loans as a
deposit in the bank or as a temporary investment.
B: Where a general borrowing is used for the acquisition and construction or production
of assets eligible for capitalization, the Company shall calculate and determine the
to-be-capitalized amount of interests on the general borrowing by multiplying the
weighted average asset disbursement of the part of the accumulative asset disbursements
minus the general borrowing by the capitalization rate of the general borrowing used.
The capitalization rate shall be calculated and determined in light of the weighted
average interest rate of the general borrowing.
C: Where there is any discount or premium, the amount of discounts or premiums that
shall be amortized during each accounting period shall be determined by the real interest
rate method, and an adjustment shall be made to the amount of interests in each period.
D: During the period of capitalization, the amount of interest capitalized during each
accounting period shall not exceed the amount of interest actually incurred by the
relevant borrowings in the current period.
○2 The Ascertain of the To-Be-Capitalized Amount of Ancillary Expense
A: For the ancillary expense incurred to a specifically borrowed loan, those incurred
before a qualified asset under acquisition , construction or production is ready for theintended use or sale shall be capitalized at the incurred amount when they are incurred,
and shall be recorded into the costs of the asset eligible for capitalization; those incurred
after a qualified asset under acquisition and construction or production is ready for the
intended use or sale shall be recognized as expenses on the basis of the incurred amount
when they are incurred, and shall be recorded into the profits and losses of the current
period.
B: The ancillary expenses arising from a general borrowing shall be recognized as
expenses at their incurred amount when they are incurred, and shall be recorded into the
profits and losses of the current period.
○3 The Ascertain of the To-Be-Capitalized Amount of Exchange Balance
During the period of capitalization, the exchange balance on foreign currency
borrowings shall be capitalized and shall be recorded into the cost of assets eligible for
capitalization.
15. Recognition and measurement of employee compensation
(1) The employee compensation includes: wages, bonuses, allowances and subsidies for
the employees; welfare benefits for the employees; endowment insurance, medical
insurance, unemployment insurance, work injury insurance, maternity insurance and
other social insurances; housing accumulation fund; labor union expenditure and
employee education expenses; non-monetary welfare; compensations for the cancellation
of the labor relationship with the employees; and other relevant expenditures of services
offered by the employees.
(2) During the accounting period of an employee’s providing services to the Company,
the employee compensation payable is recognized as liabilities. Except for the
compensations for the cancellation of the labor relationship with the employee, the
employee compensations are recorded, according to the beneficiaries of the services
offered by the employee, respectively as costs of fixed assets, costs of intangible assets,
product costs and service costs. Other employee compensations are directly included in
the profit or loss for the current period.
16. Recognition and measurement of government subsidy
The government subsidies pertinent to incomes are treated respectively in accordance
with the circumstances as follows: 1) Those subsidies used for compensating the related
future expenses or losses of the Company are recognized as deferred income and are
included in the current profits and losses during the period when the relevant expenses
are recognized; or 2) Those subsidies used for compensating the related expenses or
losses incurred to the Company are directly included in the current profits and losses.
The government subsidies pertinent to assets are recognized as deferred income, equally
distributed within the useful lives of the relevant assets, and included in the current
profits and losses. But the government subsidies measured at their nominal amount are
directly included in the current profits and losses.17. Recognition and measurement of projected liabilities
(1) The obligation pertinent to a contingency is recognized as projected liabilities when
the following conditions are satisfied simultaneously:
① That obligation is a current obligation of the Company;
② It is likely to cause any economic benefit to flow out of the Company as a result of
performance of the obligation; and
③ The amount of the obligation can be measured in a reliable way.
(2) Projected liabilities are initially measured in accordance with the best estimate of the
necessary expenses for the performance of the relevant current obligation.
If there is a sequent range for the necessary expenses and if all the outcomes within this
range are equally likely to occur, the best estimate is determined in accordance with the
middle estimate within the range.
In other cases, the best estimate is conducted in accordance with the following situations,
respectively:
① if the contingencies concern one single item, it is determined in the light of the most
likely outcome.
② if the contingencies concern two or more items, the best estimate is calculated and
determined in accordance with all possible outcomes and the relevant probabilities.
18. Recognition and measurement of revenues
(1) Recognition standards for revenues from selling goods
Revenues from selling goods are recognized when the following conditions are met
simultaneously: 1) the significant risks and rewards of ownership of the goods have been
transferred to the buyer by the Company; 2) the Company retains neither continuous
management right that usually keeps relation with the ownership nor effective control
over the sold goods; 3) the relevant amount of revenues can be measured in a reliable
way; 4) the relevant economic benefits may flow into the Company; and 5) the relevant
costs incurred or to be incurred can be measured in a reliable way.
(2) Recognition standards of revenues from providing labor services
① Recognition standards of revenues from providing labor services on the condition
that the Company can reliably estimate the outcome of a transaction concerning the labor
services it provides
If the Company can, on the date of the balance sheet, reliably estimate the outcome of a
transaction concerning the labor services it provides, it recognizes the revenues from
providing services employing the percentage-of-completion method. And the outcome of
a transaction concerning the providing of labor services can be measured in a reliable
way when the following conditions are met simultaneously: 1) the amount of revenues
can be measured in a reliable way; 2) the relevant economic benefits are likely to flowinto the Company; 3) the schedule of completion under the transaction can be confirmed
in a reliable way; and 4) the costs incurred or to be incurred in the transaction can be
measured in a reliable way.
② Recognition standards of revenues from providing labor services on the condition
that the Company can not reliably estimate the outcome of a transaction concerning the
labor services it provides
If the Company can not, on the date of the balance sheet, measure the result of a
transaction concerning the providing of labor services in a reliable way, it is to be
conducted in accordance with the following circumstances, respectively:
A. If the cost of labor services incurred is expected to be fully compensated, the revenues
from providing labor services are recognized in accordance with the amount received or
expected to be received, and the cost of labor services incurred is carried forward;
B. If the cost of labor services incurred is expected to be partially compensated, the
revenues from providing labor services are recognized in accordance with the
compensated amount, and the cost of labor services incurred is carried forward;
C. If the cost of labor services incurred is expected to be fully uncompensated, the cost
incurred is included in the current profits and losses, and no revenue from the providing
of labor services may be recognized.
③ Method of determining the stage of completion when employing the
percentage-of-completion method
The stage of completion is determined according to the proportion of the costs incurred
against the estimated total costs.
19. Recognition and measurement of income tax
The Company adopts the balance sheet approach in its income tax accounting.
Where there is any deductible temporary difference between the book value of assets and
liabilities and the tax base, the Company recognizes the deferred income tax assets
arising from the deductible temporary difference, to the extent of the amount of the
taxable income which it is most likely to obtain and which can be deducted from the
deductible temporary difference.
Where there is any taxable temporary difference between the book value of assets and
liabilities and the tax base, the Company recognizes the deferred income tax liabilities
arising from the taxable temporary difference.
At the end of the period, the book value of deferred income tax assets is reexamined. If it
is unlikely to obtain sufficient taxable income to offset the benefit of the deferred income
tax assets, the book value of the deferred income tax assets shall be written down. When
it is probable to obtain sufficient taxable income, such written-down amount shall be
subsequently reversed.V. Business merger and consolidated financial statement
(I) Business merger
There is no need to disclose the financial information related to the business merger.
(II) Consolidated financial statement
1. Recognition principle of consolidation scope
The consolidation scope of consolidated financial statements shall be determined on the
basis of control. The term “control” refers to the power of the Company to govern the
financial and operating policies of investee entity so as to obtain benefits from its
business activities. To determine whether or not it is able to control the investee entity,
one shall take into account the investee entity’s current convertible corporate bonds and
current executable warrants held by the Company, as well as other potential factors
relating to the voting rights.
Where the Company holds half or more of the capital with voting rights of an investee
entity, or holds less than 50% of the capital with voting rights of an invetee entity but
owns the actual control right, such investee entities included in the consolidation scope
of consolidated financial statements.
2. Preparation of consolidated financial statement
In accordance with the provision stipulated in Accounting Standard for Business
Enterprise No. 33 – Consolidated Financial Statements, the consolidated financial
statements shall, on the basis of the financial statements of the parent company and its
subsidiaries included in the consolidation scope and other relevant information, be
prepared by the parent company after the long term equity investments in the
subsidiaries are adjusted through the equity method, and after equity capital investment
of parent company and quota held by parent company in owner’s equity of subsidiaries,
internal significant transactions and internal current within the Company are offset.
3. Minority interests of important subsidiaries
Name of subsidiaries Minority interest as at 30 Jun. 2009
Sanonda Zhengzhou Pesticide Co., Ltd. 6,346,902.65
Hubei Sanonda Foreign Trading Co., Ltd. 1,674,621.44
Hubei Sanonda Tianmen Agrochemical Co., Ltd. 254,961.49
Jingzhou Sanonda Aifusi Chemical Industry Co., Ltd. -369,803.39
Sanonda (Jingzhou) Pesticide & Chemical Co., Ltd. 50,814.33
Jingzhou Longhua Petrochemicals Co., Ltd. 4,177,166.96
Jingzhou Lingxiang Chemical Industry co., Ltd. 4,808,820.85
Total 16,943,484.33
4. Subsidiaries of the CompanyName of subsidiaries Registration place Business Nature
Registered
capital
Actual
investment
Proportion
of shares
held by the
Company
Proportion of
voting rights
enjoyed by the
Company
Sanonda Zhengzhou Pesticide Co.,
Ltd.
57 Chengdong South
Road, Zhengzhou
Production of
chemical products and
such pesticide as
omethoate and sodium
hydrate
40,000,000 38,558,619.32 70.00% 70.00%
Sanonda (Jingzhou) Pesticide &
Chemical Co., Ltd.
10 Xihuan Road,
Jingzhou District
Production of
pesticide and
intermediate
30,000,000 26,500,000.00 88.33% 88.33%
Hubei Sanonda Foreign Trading
Co., Ltd.
1 Beijing East Road,
Jingzhou
Import and export of
pesticide and
intermediate
10,000,000 9,000,000.00 90.00% 90.00%
Hubei Sanonda Tianmen
Agrochemical Co., Ltd.
179 Gudu Av., Zaoshi,
Tianmen
Production and sale of
pesticide
30,000,000 15,745,023.32 100.00% 100.00%
Jingzhou Longhua Petrochemicals
Co., Ltd.
95 Beijing East Road,
Jingzhou
Production and sale of
chemical products
5,000,000 3,250,000.00 65.00% 65.00%
Jingzhou Sanonda Aifusi Chemical
Industry Co., Ltd.
93 Beijing East Road,
Jingzhou
R&D, development,
production and sale of
fine chemical
products
6,000,000 3,060,000.00 100.00% 100.00%
Jingzhou Lingxiang Chemical
Industry co., Ltd.
Nongji Road, Jingzhou
Development Zone
Shashi Farm, Yaowan
Branch
R&D, Production and
sale of product of
chemical industry
(excluding dangerous
product of chemical
industry)
10,000,000 5,100,000.00 51.00% 51.00%
5. Original subsidiaries that no longer be included in the consolidation scope of the
Company
No. Name
Registration
place
Registered
capital
Business nature
Proportion of
shareholding
Proportion of
voting right
Reason why this
company is no
longer included
in the
consolidation
scope
1 Hubei Fengyuan T1, Linjiang 40,000,000 Production of fine 55% 55% Completion ofChemical Co.,
Ltd.
Road, Shashi
District
chemicals
products
liquidation
Note: This company did not be included into the consolidation scope in the last year.
After finishing liquidation, the said company was no longer included into the
consolidation scope.
6. Subsidiaries that have been disposed
2008 Disposal day
Year-begin to
disposal day
No. Name
Total
assets
Total
liabilities
Total equities
Total
assets
Total
liabilities
Total equities
Total
income
Total
profit
1
Hubei
Fengyuan
Chemical
Co., Ltd. 28,091.00 40,960,877.79 -40,932,786.79 12,032.36 40,987,020.83 -40,974,988.47 -42,201.68
7. New subsidiary company included into the consolidation scope in the reporting period
In the reporting period, new subsidiary company included into the consolidation scope is
Jingzhou Lingxiang Chemical Industry Co., Ltd. with the registered capital of RMB 10
million, whose registered office is situated at Nongji Road, Jingzhou Development Zone
Shashi Farm Yaowan Branch. This company is mainly engaged in R&D, Production and
sale of product of chemical industry (excluding dangerous product of chemical industry),
and production of formaldehyde. Its 51% equities are held by the Company, while the
rest 49% equities are held by Sanonda Group Corporation. At present, the said company
is under preconstruction, and is expected to start operation by the end of 2009.
VI. Tax
1. Income tax
Income tax shall be paid in light of the taxable amount of income and tax rate applicable
to the current period. Income tax rate is 25%.
2. VAT
(1) Sales tax of VAT for pesticides that is produced by the Company, shall be measured
at tax rate of 13%, such pesticides include orthene, paraquate, glyphosate, chlorofos,
DDVP, omethoate, triazophos and imidacloprid, ect..
(2) Sales tax of VAT for chemical products shall be accounted at tax rate of 17%, such
chemical products include spermine, liquid caustic soda, liquefied chlorine gas andhydrochloric acid.
(3) VAT for export products shall be recorded in light of the policy of “Tax exemption,
deduction and return”.
3. Business tax
Business tax shall be paid at 5% of turnover.
4. City maintenance construction tax
City maintenance construction tax shall be paid at 7% or 5% of turnover tax payable of
the current period.
5. Extra charges for education
Extra charges for education shall be paid at 3% of turnover tax payable of the current
period.
6. Housing property tax
Housing property tax shall be paid at 1.2% of balance after deducting 10-30% of original
value of property in lump. If there is property rental, housing property tax shall be paid
at 12% of property rental.
VII. Explanation on change in accounting policies and accounting estimates and
correction of prior-period accounting errors
1. Change in accounting policies
The Company’s accounting policies remained unchanged in the reporting period.
2. Change in accounting estimates
The Company’s accounting estimates remained unchanged in the reporting period.
3. Correction of previous accounting errors
No correction of previous accounting errors incurred in the reporting period.
VIII. Notes to the consolidated financial statement
Remark: The beginning of period (opening) refers to 1 Jan. 2009, the end of period
(ending) refers to 30 Jun. 2009; the last period refers to Jan. to Jun. 2008, the current
period refers to Jan. to Jun. 2009.
1. Monetary fund
(1) Listing by categories
Items Closing balance Opening balanceAmount in
original
currency
Rate of
exchange
Amount
converted into
RMB
Amount in
original
currency
Rate of
exchange
Amount
converted into
RMB
Cash 9,062.81 5,191.39
Of which: RMB 9,062.81 1.00 9,062.81 5,191.39 1.00 5,191.39
Bank deposit 638,214,243.67 555,786,579.95
Of which: RMB 624,897,987.08 1.00 624,897,987.08 542,442,781.65 1.00 542,442,781.65
USD 1,954,165.91 6.8143 13,316,256.59 1,952,497.59 6.8346 13,343,798.30
Other monetary
fund
18,850,548.42 7,040,548.42
Of which: RMB 18,850,548.42 1.00 18,850,548.42 7,040,548.42 1.00 7,040,548.42
Total 657,073,854.90 562,832,319.76
Note: With regard to monetary fund of the Company, there are no any payment
mortgaged or frozen that there exists restrictions on the realization, or any payment
deposited abroad or existing potential risk of recycling.
2. Tradable financial assets
Items Closing fair value Opening fair value
Investment of tradable equity
instrument
6,380,528.32 4,183,872.00
Total 6,380,528.32 4,183,872.00
Note: With regard to the above-mentioned tradable financial assets, there exist no
materials restrictions on the realization.
3. Notes receivable
Type of notes Closing balance Opening balance
Bank acceptance bill 31,076,998.65 8,556,358.99
Trade acceptance draft 64,000.00
Total 31,076,998.65 8,620,358.99
4. Accounts receivable
(1) Listing by aging
Closing balance Opening balance
Aging
Balance Proportion
Provision for
bad debts
Proportion Balance Proportion
Provision for
bad debts
Proportion
Within 1 year
(including 1
172,090,666.55
84.96%
8,607,088.50
5.00% 83,343,000.31 72.30% 4,196,608.55 5.04%Closing balance Opening balance
Aging
Balance Proportion
Provision for
bad debts
Proportion Balance Proportion
Provision for
bad debts
Proportion
year)
1-2 years
(including 2
years)
9,737,928.90
4.81%
8,806,234.23
90.43% 10,934,295.00 9.49% 8,397,093.21 76.80%
2-3 years
(including 3
years)
1,603,733.42
0.79%
423,183.01
26.39% 5,066,362.40 4.39% 4,782,573.37 94.40%
3-4 years
(including 4
years)
4,510,851.84
2.23%
4,380,162.59
97.10% 1,362,152.14 1.18% 789,196.35 57.94%
4-5 years
(including 5
years)
1,069,474.71
0.53%
739,989.52
69.19% 156,776.09 0.14% 20,389.34 13.01%
Over 5 years 13,542,537.86 6.69% 13,542,537.86 100.00% 14,414,129.66 12.50% 14,414,129.66 100.00%
Total 202,555,193.28 100.00% 36,499,195.71 18.02% 115,276,715.60 100.00% 32,599,990.48 28.28%
(2) Listing by categories
Closing balance Opening balance
Category
Amount Proportion
Withdrawal
proportion
Provision for
bad debts
Amount Proportion
Withdrawal
proportion
Provision for
bad debts
Significant
single
amounts
72,312,573.44 35.70% 15.34% 11,096,269.53 41,258,458.00 35.79% 23.13% 9,543,563.76
Insignificant
single
amounts but
with
significant
credit risk
5,960,095.43 2.94% 100.00% 5,960,095.43 5,960,095.43 5.17% 100.00% 5,960,095.43
Other
insignificant 124,282,524.41 61.36% 15.64% 19,442,830.75 68,058,162.17 59.04% 25.12% 17,096,331.29
Total 202,555,193.28 100.00% 18.02% 36,499,195.71 115,276,715.60 100.00% 28.28% 32,599,990.48
Note 1: With regard to the withdrawal proportion of bad debts of accounts receivable
with significant accounts, please refer to the following No. (4) as below:
Note 2: Accounts receivable with insignificant single amounts but with significant credit
risk is accounts receivable with larger recoverable risk recognized in accordance withcollection work of the Company to debtors and daily businesses occurred, and credit of
debtors.
(3) Amount in original currency of accounts receivable listed in foreign currency and
conversion rate
Currency Amount Conversion rate
US dollar 14,502,499.09 6.8143
(4) Explanation on withdrawing provision for bad debts of accounts receivable with
significant single amounts
Items
Ending book
balance
Amount of
bad debts
Withdra
wal
proportio
n
Reason
Bayer
23,673,440.99 1,183,672.05 5.00%
Business-as-usual, withdrawn
in light of withdrawal policies
of bad debt provision
Chongqing Ziguang Chemical
Industry Co., Ltd.
19,976,400.00 998,820.00 5.00%
Business-as-usual, withdrawn
in light of withdrawal policies
of bad debt provision
India UNITED PHOSPHORUS
LIMITED
9,713,369.83 485,668.49 5.00%
Business-as-usual, withdrawn
in light of withdrawal policies
of bad debt provision
Mexico TEKCHEM Corp.
7,874,358.80 7,874,358.80 100.00%
bankruptcy petition filed,
off-chance recoverability,
withdrawn in full
Indonesia Zhengda Company
5,885,359.02 294,267.95 5.00%
Business-as-usual, withdrawn
in light of withdrawal policies
of bad debt provision
India MEGHMANI
5,189,644.80 259,482.24 5.00%
Business-as-usual, withdrawn
in light of withdrawal policies
of bad debt provision
Total 72,312,573.44 11,096,269.53
(5) At the end of period, the top five accounts receivable totaled RMB 67,122,928.64,
including RMB 59,248,569.84 within one years and RMB 7,874,358.8 over one to two
years, taking up33.14% of total accounts receivable.
(6) No amount due from shareholders who hold 5% or more of the voting rights of theCompany is included in the accounts receivable.
(7) There exists no payment received from related parties in the accounts receivable.
5. Prepayment
(1) Listing by aging
Closing balance Opening balance
Aging
Balance Proportion
Provision
for bad
debts
Withdrawal
proportion
Balance Proportion
Provision
for bad
debts
Withdrawal
proportion
Within 1 year
(including1
year) 92,332,993.38 97.69% 1,207,740.76 1.31% 14,772,848.90 85.63% 1,110,045.41 7.51%
1-2 years
(including 2
years) 412,380.22 0.44% 15,981.95 3.88% 422,769.89 2.45% 12,800.23 3.03%
2-3 years
(including 3
years) 203,271.72 0.22% 1,824.30 0.90% 249,306.27 1.45% 12,230.95 4.91%
3-4 years
(including 4
years) 1,325,847.76 1.40% 66,059.06 4.98% 1,342,957.71 7.78% 66,547.89 4.96%
4-5 years
(including 5
years) 198,574.66 0.21% 9,328.74 4.70% 349,732.66 2.03% 17,486.63 5.00%
Over 5 years 40,105.13 0.04% 40,105.13 100.00% 114,440.63 0.66% 114,440.63 100.00%
Total 94,513,172.87 100.00% 1,341,039.94 1.42% 17,252,056.06 100.00% 1,333,551.74 7.73%
(2) Listing by categories
Closing balance Opening balance
Type
Amount Proportion
Withdrawal
proportion
Provision
for bad
debts
Amount Proportion
Withdrawal
proportion
Provision
for bad
debts
Significant
single amounts 58,400,425.37 61.79%
Insignificant
single amounts
but withClosing balance Opening balance
Type
Amount Proportion
Withdrawal
proportion
Provision
for bad
debts
Amount Proportion
Withdrawal
proportion
Provision
for bad
debts
significant
credit risk
Other
insignificant 36,112,747.50 38.21% 3.71% 1,341,039.94 17,252,056.06 100.00% 7.73% 1,333,551.74
Total 94,513,172.87 100.00% 1.42% 1,341,039.94 17,252,056.06 100.00% 7.73% 1,333,551.74
(3) No amount due from shareholders who hold 5% or more of the voting rights of the
Company is included in the prepayment.
(4) Closing prepayment increased by 77,261,116.81 compared with opening amount,
which caused by payment for equipment prepaid in advance due to increase of projects.
6. Other receivables
(1) Listing by aging
Closing balance Opening balance
Aging
Balance Proportion
Provision
for bad
debts
Withdrawal
proportion
Balance Proportion
Provision
for bad
debts
Withdrawal
proportion
Within 1 year
(including1
year) 6,945,664.00 29.66% 1,332,861.41 19.19% 10,128,450.50 45.77% 246,835.27 2.44%
1-2 years
(including 2
years) 6,014,519.12 25.68% 79,466.44 1.32% 1,625,533.87 7.35% 81,359.14 5.01%
2-3 years
(including 3
years) 2,912,203.73 12.44% 154,940.61 5.32% 2,845,333.73 12.86% 155,397.11 5.46%
3-4 years
(including 4
years) 884,428.90 3.78% 56,400.35 6.38% 949,028.90 4.29% 134,300.35 14.15%
4-5 years
(including 5
years) 1,154,112.12 4.93% 169,203.70 14.66% 1,100,881.77 4.97% 116,348.89 10.57%
Over 5 years 5,505,767.63 23.51% 5,505,767.63 100.00% 5,480,397.98 24.76% 5,480,397.98 100.00%Closing balance Opening balance
Aging
Balance Proportion
Provision
for bad
debts
Withdrawal
proportion
Balance Proportion
Provision
for bad
debts
Withdrawal
proportion
Total 23,416,695.50 100.00% 7,298,640.14 31.17% 22,129,626.75 100.00% 6,214,638.74 28.08%
(2) Listing by categories
Closing balance Opening balance
Type
Amount Proportion
Withdrawal
proportion
Provision
for bad
debts
Amount Proportion
Withdrawal
proportion
Provision
for bad
debts
Significant
single amounts
Insignificant
single amounts
but with
significant credit
risk
Other insignificant 23,416,695.50 100.00% 31.17% 7,298,640.14 22,129,626.75 100.00% 28.08% 6,214,638.74
Total 23,416,695.50 100.00% 31.17% 7,298,640.14 22,129,626.75 100.00% 28.08% 6,214,638.74
(3) At the end of period, the top five other receivables totaled RMB 12,332,461.30,
taking up 52.67% of total other receivable.
(4) No amount due from shareholders who hold 5% or more of the voting rights of the
Company is included in the other receivables.
(5) There exists no payment received from related parties in the other receivables.
7. Inventory
(1) Inventories
Items Closing balance Increase for the
current period
Decrease for the
current period
Opening balance
Raw material 69,008,143.01 509,533,455.71 523,946,868.66 54,594,730.06
Goods in process 46,306,846.87 1,297,718,204.48 1,304,020,679.91 40,004,371.44
Merchandise on hand 276,939,864.59 866,037,617.52 935,728,298.67 207,249,183.44
Low-value 694,546.07 429,424.22 492,533.81 631,436.48consumption goods
Packaging material 3,885,055.41 58,256,424.09 58,123,033.13 4,018,446.37
Consigned processing
materials 8,872.00 0.00 8,872.00
Goods in transit 7,111,022.02 6,363,684.79 10,298,369.05 3,176,337.76
Total 403,954,349.97 2,738,338,810.81 2,832,618,655.23 309,674,505.55
(2) Provision for falling price of inventory
Decrease for the current period
Items
Opening
balance
Withdrawal
for the
current
period
Switching
back
Writing-off Total
Closing
balance
Raw material 7,761,198.30 6,496,855.59 6,496,855.59 1,264,342.71
Merchandise on
hand
49,359,382.37
1,009,167.62 37,381,047.66 37,381,047.66 12,987,502.33
Packaging
material
282,134.55
282,134.55
Total 57,402,715.22 1,009,167.62 43,877,903.25 43,877,903.25 14,533,979.59
8. Long-term equity investment
(1) Listing by accounting method
Investee entities
Initial
investment
amount
Opening
carrying
amount
Increase
for the
current
period
Decrease
for the
current
period
Ending
carrying
amount
Cash
dividends
received for
the current
period
Calculation at cost method:
1. Jingzhou City Commercial Bank
Co., Ltd 20,000,000.00 20,000,000.00 20,000,000.00
2. Jingzhou Tianyang Huibao
Precision Chemicals Co., Ltd 1,440,000.00 1,440,000.00 1,440,000.00
3. Jingzhou Dali Industrial Co., Ltd 1,674,600.00 1,674,600.00 1,674,600.00
4.Hubei Shendian Co., Ltd. 564,000.00 564,000.00 564,000.00
5. Wangda Industrial Holding Co., Ltd 550,000.00 550,000.00 550,000.00Investee entities
Initial
investment
amount
Opening
carrying
amount
Increase
for the
current
period
Decrease
for the
current
period
Ending
carrying
amount
Cash
dividends
received for
the current
period
6. Guangxi Zhongding Holding Co.,
Ltd 580,800.00 580,800.00 580,800.00
Total 24,809,400.00 24,809,400.00 1,440,000.00 23,369,400.00
Note: During the reporting period, the Company transferred 48% equities of Jingzhou
Tianyang Huibao Fine Chemical Industrial Co., Ltd. to other shareholders, no longer
holding these equities.
(2) Provision for impairment of long-term investment
Investee entities Closing balance Opening balance
Jingzhou City Commercial Bank Co., Ltd 11,991,017.37 11,991,017.37
Total 11,991,017.37 11,991,017.37
9. Investment real estates
Items
Opening
balance
Increase for
the current
period
Decrease for
the current
period
Closing
balance
I. Original price 6,010,000.00 6,010,000.00
House and building 6,010,000.00 6,010,000.00
II. Accumulative depreciation and amortization 653,587.50 122,604.00 776,191.50
House and building 653,587.50 122,604.00 776,191.50
III. Accumulative provision for impairment of
investment real estates
House and building
IV. Total carrying value of investment real
estate 5,356,412.50 5,233,808.50
House and building 5,356,412.50 5,233,808.50
Note: Investment real estate of the Company is Hubei Building for hiring, which it is
located in Shenzhen. Relevant property certification is in process.。10. Fixed assets
(1) Category of fixed assets
Items
Opening
balance
Increase for
the current
period
Decrease for
the current
period
Closing balance
I. Total original price 1,257,958,181.21 19,076,287.11 29,394,237.40 1,247,640,230.92
Including: House and building 332,295,134.86 442,141.46 -44,004.79 332,781,281.11
General equipment 89,417,132.96 1,002,499.37 88,414,633.59
Special equipment 823,944,900.43 17,026,462.18 28,176,722.82 812,794,639.79
Transportation vehicle 12,301,012.96 1,607,683.47 259,020.00 13,649,676.43
II. Total accumulative depreciation 442,109,945.71 45,544,393.45 23,689,841.65 463,964,497.51
Including: House and building 106,763,516.08 6,486,523.53 5,453.48 113,244,586.13
General equipment 59,906,388.25 1,557,160.01 945,915.64 60,517,632.62
Special equipment 267,985,397.98 37,309,017.28 22,479,452.53 282,814,962.73
Transportation vehicle 7,454,643.40 191,692.63 259,020.00 7,387,316.03
III. Total accumulative amount of
provision for impairment of fixed
assets 34,837,795.49 3,684,802.83 31,152,992.66
Including: House and building 7,458,177.74 7,458,177.74
General equipment 3,962,381.16 3,962,381.16
Special equipment 23,417,236.59 3,684,802.83 19,732,433.76
Transportation vehicle -
IV. Total carrying value of fixed assets 781,010,440.01 752,522,740.75
Including: House and building 218,073,441.04 212,078,517.24
General equipment 25,548,363.55 23,934,619.81
Special equipment 532,542,265.86 510,247,243.30
Transportation vehicle 4,846,369.56 6,262,360.40
(2) Idle fixed assets
Type of fixed assets Original price
Accumulative
depreciation
Provision for
impairment
Net value
House and building 21,469,016.79 14,484,544.76 6,367,459.11 617,012.92Type of fixed assets Original price
Accumulative
depreciation
Provision for
impairment
Net value
General equipment 9,428,495.99 4,644,242.42 3,962,381.16 821,872.41
Special equipment 39,488,617.44 18,733,569.67 17,821,812.00 2,933,235.77
Total 70,386,130.22 37,862,356.85 28,151,652.27 4,372,121.10
(3) Closing amount of fixed assets decreased by 3.65% compared with the opening amount, which
was because the Company disposed the part of fixed assets.
11. Construction in progress
(1) Original price of construction in progress
Opening carrying balance
Decrease for the current
period
Name of
project
Budgeted
amount
Amount
Of which:
capitalization
of interest Increase for the
current period
Amount
transferred
into fixed
assets in the
reporting
period
Other
decrease
Extension and
reformation of
40000-ton
spermine 29,886,000.00 860,243.35 5,521,592.36
Extension of the
4th phase of
sewage disposal 13,040,000.00 400,000.00 895,141.89
Extension and
reformation of
paraquat 49,880,000.00 5,507,966.09 56,420.75 13,806,304.74
Extension 20,000,000.00 9,428,247.83 10,175.84 11,327,472.49
2nd phase of
glyphosate 77,500,000.00 8,523,681.58 15,954,895.20
Denitration by
freezing 9,455,000.00 1,220,148.48 3,597,138.60
Reformation of
compressed air
station 1,105,958.47 670,680.13Lipid dimethyl
phosphite 3,488,099.96 14,170.38
Nes carbofuran
project 517,604.98
Removal project 2,054,898.50 323,573.00
Combined
production of
heat and
electricity 490,000,000, 7,446,442.32
Other projects 4,532,339.11 0.00 7,652,392.18 0.00
4,472,473.
78
Total —— 37,639,188.35 66,596.59 67,209,803.29 0.00
4,472,473.
78
Con.:
Closing carrying balance
Name of projects
Amount
Of which:
capitalization
of interest
Resource of capital
Proportion of input
in budgets
Extension and
reformation of
40000-ton spermine 6,381,835.71 82,036.98
Bank loans
119%
Extension of the 4th
phase of sewage
disposal 1,295,141.89 33,475.89
Bank loans
103.16%
Extension and
reformation of
paraquat 19,314,270.83 357,737.66
Bank loans
38.72%
Extension 20,755,720.32 465,253.73 Bank loans 103.78%
2nd phase of
glyphosate 24,478,576.78 383,236.54
Bank loans
31.59%
Denitration by
freezing 4,817,287.08 72,719.66
Bank loans
50.95%
Reformation of
compressed air
station 1,776,638.60 36,909.70
Bank loans
Lipid dimethyl
phosphite 3,502,270.34
Bank loansNes carbofuran
project 517,604.98 Self-raised
Removal project 2,378,471.50 Self-raised
Combined
production of heat
and electricity 7,446,442.32 Bank loans 1.52%
Other projects 7,712,257.51 102,210.74
Total 100,376,517.86 1,533,580.90 —— ——
(2) Provision of impairment of construction in progress
Items
Opening
balance
Withdrawal for
the current
period
Decrease for the
current period
Closing balance Reason
Nes carbofuran
project
517,604.98 517,604.98
Total 517,604.98 517,604.98
(3) The construction in progress of the Company shall be capitalized at the capitalization
rate of 5.76%.
12. Intangible assets
Items
Opening
balance
Increase for the
current period
Decrease for
the current
period
Closing
balance
I. Total original price 224,181,378.53 28,594,900.00 252,776,278.53
1. Non-patent technology 7,503,700.00 7,503,700.00
2. Land use right 216,677,678.53 28,594,900.00 245,272,578.53
II. Total accumulative
amortization 33,295,676.93 1,683,530.76 34,979,207.69
1. Non-patent technology 3,275,525.67 290,934.96 3,566,460.63
2. Land use right 30,020,151.26 1,392,595.80 31,412,747.06
III. Total accumulative amount of
impairment provision of
intangible assets 32,072,093.53 32,072,093.53
1. Non-patent technology -Items
Opening
balance
Increase for the
current period
Decrease for
the current
period
Closing
balance
2. Land use right 32,072,093.53 32,072,093.53
IV. Total carrying value of
intangible assets 158,813,608.07 185,724,977.31
1. Non-patent technology 4,228,174.33 3,937,239.37
2. Land use right 154,585,433.74 181,787,737.94
13. Deferred income tax assets and deferred income tax liabilities
Items
Closing
balance
Corresponding
temporary
difference
Opening
balance
Corresponding
temporary
difference
Deferred income tax assets 17,641,169.12 70,564,676.47 17,641,169.12 70,564,676.47
1. Provision for bad debts 4,158,194.45 16,632,777.80 4,158,194.45 16,632,777.80
2. Provision for impairment of
fixed assets
29,631.68 118,526.72 29,631.68 118,526.72
3 Provision for devaluation of
inventories
12,696,875.75 50,787,502.99 12,696,875.75 50,787,502.99
4. Change in fair value of
tradable financial assets
756,467.24 3,025,868.96 756,467.24 3,025,868.96
14. Provision for assets impairment
Increase for the current period Decrease for the current period
Items
Opening
balance Withdrawal
Increase
for other
reasons
Total
Switching
back
Writing-off Total
Closing
balance
Provision for
bad debts 40,148,180.96 4,580,867.92 4,580,867.92 -409,826.91 -409,826.91 45,138,875.79
Provision for
falling price
of inventory 57,402,715.22 1,009,167.62 1,009,167.62 43,877,903.25 - 43,877,903.25 14,533,979.59
Provision for
impairment
of long-term 11,991,017.37 11,991,017.37equity
investment
Provision for
impairment
of fixed
assets 34,837,795.49 3,684,802.83 3,684,802.83 31,152,992.66
Provision for
impairment
of
construction
in progress 517,604.98 517,604.98
Provision for
impairment
of intangible
assets 32,072,093.53 32,072,093.53
Total 176,969,407.55 5,590,035.54 43,877,903.25 3,274,975.92 47,152,879.17 135,406,563.92
Note: The provision for falling price of inventory that is switched back in the reporting
period arose from reductive amount of provision for falling price of inventory due to that
selling price of products and price of chemical raw material climbed over the beginning
of year.
15. Short-term loans
(1) Category of loans
Type Closing balance Opening balance
Credit loan
Mortgage loan 131,000,000.00 91,000,000.00
Guaranteed loan 145,000,000.00 96,000,000.00
Secured borrowings 52,689,992.33
Total 328,689,992.33 187,000,000.00
Note: Mortgage loan is outward documentary bills handled by Sanonda Foreign Trading
Co., Ltd., the shareholding subsidiary of the Company. The Company has no matured
short-term loan unredeemed.
(2) Mortgage loan and guaranteed loanUnits Amount Way Guarantor (object of pledge)
Industrial and Commercial
Bank of China, Jingzhou Shashi
Subbranch 10,000,000.00 Mortgage loan 69 production lines
Industrial and Commercial
Bank of China, Jingzhou Shashi
Subbranch 15,000,000.00
Guaranteed loan
Sanonda Group Co., Ltd.
Industrial and Commercial
Bank of China, Jingzhou Shashi
Subbranch 25,000,000.00
Guaranteed loan
Sanonda Group Co., Ltd.
China Construction Bank
Jingzhou Sanwan Subbranch 45,000,000.00
Mortgage loan House and land
China Construction Bank
Jingzhou Sanwan Subbranch 40,000,000.00
Mortgage loan House and land
China Construction Bank
Jingzhou Sanwan Subbranch 30,000,000.00
Mortgage loan House and land
Bank of China Tianmen
Subbranch 3,000,000.00
Mortgage loan Properties, equipment and land
Bank of China Tianmen
Subbranch 3,000,000.00
Mortgage loan Properties, equipment and land
Bank of China Tianmen
Subbranch 7,000,000.00
Guaranteed loan
Hubei Sanonda Co., Ltd.
Import and Export Bank of
China 50,000,000.00
Guaranteed loan
China National Agrochemical
Corporation
Communication Bank Wuhan
Branch 40,000,000.00
Guaranteed loan
Guangxi Hechi Chemical Industry
Co., Ltd.
Zhengzhou Xiangyang Rural
Credit Cooperatives 8,000,000.00
Guaranteed loan Zhengzhou Xiangyang Rural Credit
Cooperatives
Total
276,000,000.00
Total
16. Notes payable
Type Closing balance Opening balance
Bank acceptance bill 29,080,000.00 19,040,000.00
Trade acceptance draft
Total 29,080,000.00 19,040,000.00
17. Accounts payable(1) Listing by aging
Closing balance Opening balance
Aging
Amount Proportion Amount Proportion
Within 1 year (including 1 year) 122,071,479.83 95.77% 89,268,439.22 86.85%
1-2 years (including 2 years) 2,126,006.01 1.67% 3,873,516.82 3.77%
2-3 years (including 3 years) 1,242,540.43 0.97% 2,594,736.36 2.52%
Over 3 years 2,029,225.21 1.59% 7,047,863.66 6.86%
Total 127,469,251.48 100.00% 102,784,556.06 100.00%
(2) There is no large item in the accounts payable with aging over 1 year.
(3) Amount of RMB 264,775.00 due from shareholders who hold 5% or more of the
voting rights of the Company is included in the accounts payable.
(4) In the accounts payable, the payment owed to the related parties is RMB
3,416,105.18.
18. Advance from customers
(1) Listing by aging
Closing balance Opening balance
Aging
Amount Proportion Amount Proportion
Within 1 year (including 1 year) 88,483,874.85 91.71% 104,525,367.22 93.05%
1-2 years (including 2 years) 4,675,689.11 4.85% 4,546,918.16 4.05%
2-3 years (including 3 years) 298,465.69 0.31% 300,613.54 0.27%
Over 3 years 3,029,183.58 3.14% 2,957,782.25 2.63%
Total 96,487,213.23 100.00% 112,330,681.17 100.00%
(2) There is no large item in the advance from customers with aging over 1 year.
(3) Amount in original currency of advance from customers listed in foreign currency
and conversion exchange rate
Currency Amount Conversion exchange rate
US dollar 32,440.00 6.8143
(4) No amount due from shareholders who hold 5% or more of the voting rights of the
Company is included in the advance from customers.
(5) In the advance from customers, the payment owed to the related parties is RMB1,036,904.51.
19. Payroll payable
Items
Opening
balance
Increase for the
current period
Payment for the
current period
Closing
balance
I. Wages, bonuses, allowance and
subsidies for the employees 9,070,060.00 30,007,989.22 35,396,049.22 3,682,000.00
II. Welfare expenses for the employees 4,451,202.40 3,301,356.40 1,149,846.00
III. Social insurances 3,294,020.73 10,499,248.32 12,693,920.83 1,099,348.22
Of which: 1. Medical insurance 244,914.68 801,343.68 1,686,145.72 -639,887.36
2. Endowment insurance 2,147,553.00 8,128,040.90 9,281,155.41 994,438.49
3. Annuity fund
4. Unemployment insurance 746,510.90 839,118.98 933,099.65 652,530.23
5. Work injury insurance 123,957.00 626,362.82 675,768.50 74,551.32
6. Maternity insurance 31,085.15 99,382.24 112,751.85 17,715.54
IV. Housing accumulation fund 421,245.26 2,769,760.94 2,454,225.83 736,780.37
V. Labor union expenditure 230,236.20 376,848.17 477,854.23 129,230.14
VI. Employee education expenses 63,097.88 17,680.41 36,260.00 44,518.29
VII. Non-monetary welfare
VIII. Compensations for the
cancellation of the labor relationship
with the employees 12,369,619.32 38,060.00 48,060.00 12,359,619.32
IX. Other
Of which: Cash-settled share-based
payment
Total 25,448,279.39 48,160,789.46 54,407,726.51 19,201,342.34
20. Taxes and dues payable
Tax Closing balance Opening balance
1. Corporate income tax 22,685,447.77 45,380,948.30
2. VAT -15,612,641.96 -2,782,326.42
3. Business tax 23,226.13 69,421.92Tax Closing balance Opening balance
4. Tax on resources 29,439.05 74,593.09
5. Land holding tax 990,914.36 1,339,950.80
6. Housing property tax 360,165.95 601,266.84
7. Vehicle and vessel usage tax
8. Tax for municipal maintenance
and construction 3,366,821.64 3,849,718.34
9. Educational expenses 20,322.21 2,139,110.87
10. Individual income tax
calculation and filing 87,357.41 490,171.90
11. Other -123,142.70 476,390.56
Total 11,827,909.86 51,639,246.20
21. Other payables
(1) Listing by aging
Closing balance Opening balance
Aging
Amount Proportion Amount Proportion
Within 1 year (including 1 year) 45,055,170.79 71.13% 23,342,968.92 54.11%
1-2 years (including 2 years) 7,822,674.40 12.35% 14,284,383.32 33.11%
2-3 years (including 3 years) 6,454,454.90 10.19% 1,499,454.90 3.48%
Over 3 years 4,012,918.25 6.33% 4,012,918.25 9.30%
Total 63,345,218.34 100.00% 43,139,725.39 100.00%
(2) No amount due from shareholders who hold 5% or more of the voting rights of the
Company is included in the other payables.
(3) There is no large item in the other payables with aging over 1 year.
22. Non-current liabilities due within one year
(1) Listing by category
Category Closing balance Opening balance
Long-term loan due within one year 30,000,000.00 70,000,000.00
Total 30,000,000.00 70,000,000.00(2) Long-term loan due within one year
Category of loan Closing balance Opening balance
Mortgage loan 30,000,000.00 70,000,000.00
Guaranteed loan
Total 30,000,000.00 70,000,000.00
(3) Mortgage loan
Units Amount Way Object of pledge
Industrial and Commercial Bank of China,
Jingzhou Shashi Subbranch
30,000,000.00 Mortgage Machinery equipment
Total 30,000,000.00
23. Long-term loan
(1) Listing by category
Category of loan Currency Closing balance Opening balance
Mortgage loan RMB
Guaranteed loan RMB 476,560,000.00 297,560,000.00
Total 476,560,000.00 297,560,000.00
(2) Guaranteed loan
Units Amount Way Guarantor
China Construction Bank Jingzhou
Sanwan Subbranch 97,560,000.00
Guaranteed loan China National Chemical
Corporation (ChemChina)
China Construction Bank Jingzhou
Sanwan Subbranch 100,000,000.00
Guaranteed loan China National Chemical
Corporation (ChemChina)
Industrial Bank Wuhan Branch
100,000,000.00
Guaranteed loan
China National Chemical
Corporation (ChemChina)
China Construction Bank Jingzhou
Sanwan Subbranch 100,000,000.00
Guaranteed loan
Sanonda Group Co., Ltd.
Shenzhen Ping An Bank
78,000,000.00
Guaranteed loan
China National Chemical
Corporation (ChemChina)
Total 475,560,000.00(3) The closing long-term loan increased by 59.82% compared with the opening amount,
which caused by projects loan borrowed by the Company from bank for purpose of
construction of combined production of heat and electricity project and of glyphosate
extension project with an annual production of 20000 tons.
24. Long-term payables
Category Closing balance Opening balance
Special loan for environmental
protection of Jingzhou Financial
Bureau
2,000,000.00 2,000,000.00
Loan for glyphosate project 490,000.00 490,000.00
Fund used in pollution treatment of
Environmental Protection Bureau of
Hubei Province
200,000.00 200,000.00
Loan for cooperation project of
Guangzhou Research & Design
Institute of Chemical Industry
160,000.00 160,000.00
Loan for riskiest pesticide transfer
project of Jingzhou Financial Bureau
6,990,000.00 6,990,000.00
Total 9,840,000.00 9,840,000.00
25. Special payable
Category Opening balance
Increase for the
current period
Decrease for the
current period
Closing balance
Appropriation of
fenoxycarb
project
2,400,000.00 2,400,000.00
Fund used in
treatment of
environmental
protection
361,170.00 361,170.00
Total 2,761,170.00 2,761,170.00
26. Other non-current liabilities
Items Closing balance Opening balance
Subsidy of treasury bonds financed
projects (riskiest pesticide alternate
6,990,000.00 6,990,000.00projects）
Appropriation of fenoxycarb project 4,559,512.89 4,559,512.89
Total 11,549,512.89 11,549,512.89
27. Share capital
Opening balance Closing balance
Items Investment
amount
Ratio
Increase
for the
current
period
Decrease
for the
current
period
Investment
amount
Ratio
I. Shares subject to
trading moratorium 122,234,072.00 20.58%
122,234,072.00 20.58%
1. Shares held by the State
2. Shares held by
state-owned corporation 118,887,202.00 20.02%
118,887,202.00 20.02%
3. Shares held by other
domestic investors 3,346,870.00 0.56%
3,346,870.00 0.56%
Of which: Shares held by
domestic corporation 3,300,000.00 0.55%
3,300,000.00 0.55%
Shares held by
domestic natural person 46,870.00 0.01%
46,870.00 0.01%
4. Shares held by other
foreign investors
Of which: Shares held by
foreign corporation
Shares held by
foreign natural person
II. Shares not subject to
trading moratorium 471,689,148.00 79.42%
471,689,148.00 79.42%
1. Renminbi common
shares 241,689,148.00 40.69%
241,689,148.00 40.69%
2. Domestically listed
foreign shares 230,000,000.00 38.73%
230,000,000.00 38.73%
3. Overseas listed foreign
shares
4. OtherOpening balance Closing balance
Items Investment
amount
Ratio
Increase
for the
current
period
Decrease
for the
current
period
Investment
amount
Ratio
Total shares 593,923,220.00 100.00% 593,923,220.00 100.00%
28. Capital reserve
Items
Opening
balance
Increase for
the current
period
Decrease for
the current
period
Closing balance
Reasons
Capital (share) premium 264,195,844.61 264,195,844.61
Other 7,523,997.13 7,523,997.13
Total 271,719,841.74 271,719,841.74
29. Special reserves
Items
Opening
balance
Increase for
the current
period
Decrease for
the current
period
Closing
balance
Reasons
Special reserves 16,364,992.87 16,364,992.87
Total 16,364,992.87 16,364,992.87
30. Surplus reserve
Items
Opening
balance
Increase for
the current
period
Decrease for
the current
period
Closing
balance
Reasons
Statutory surplus
reserve
69,699,780.81 69,699,780.81
Discretionary
surplus reserve
3,815,085.65 3,815,085.65
Total 73,514,866.46 73,514,866.46
31. Retained profit
Items Jan. – Jun. 2009 Jan. – Jun. 2008
Balance as at 31 Dec. 2008 143,035,950.70 -7,943,821.74Items Jan. – Jun. 2009 Jan. – Jun. 2008
Add: Change in accounting policies
Previous accounting errors
Balance as at 1 Jan. 2009 143,035,950.70 -7,943,821.74
Increase for the current period 44,124,619.58 77,284,465.57
① Net profit for the current period 44,124,619.58 77,284,465.57
② Other
Decrease for the current period 29,799,572.97
① Appropriating statutory surplus reserve
② Appropriating discretionary surplus reserve
③ Appropriating reserve funds
④ Appropriating enterprise development funds
⑤ Distributing profit 29,799,572.97
⑥ Other
Closing balance 157,360,997.31 69,340,643.83
31. Operating revenue
(1) Operating income and operating cost
Operating income Operating cost
Items Amount occurred for
the current period
Amount occurred
in the last period
Amount occurred
for the current
period
Amount occurred
in the last period
Main operation 941,804,531.22 1,210,675,338.66 773,512,937.14 938,964,764.41
Other 43,479,459.62 41,871,389.28 37,023,718.85 33,786,511.28
Total 985,283,990.84 1,252,546,727.94 810,536,655.99 972,751,275.69
(2) Income from main operation
Income from main operation Cost of main operation Profit from main operation
Category of main
business and products
Amount
occurred for
the current
period
Amount
occurred in the
last period
Amount
occurred for
the current
period
Amount
occurred in
the last period
Amount
occurred for
the current
period
Amount
occurred in
the last periodIncome from main operation Cost of main operation Profit from main operation
Category of main
business and products
Amount
occurred for
the current
period
Amount
occurred in the
last period
Amount
occurred for
the current
period
Amount
occurred in
the last period
Amount
occurred for
the current
period
Amount
occurred in
the last period
New Chemical Material
and Specialty
Chemicals 5,747,391.55 7,500,116.19 3,183,876.80 6,050,111.41 2,563,514.75 1,450,004.78
petrochemical and
refining and chemical
products 31,897,705.52 34,946,171.40 22,542,164.88 30,223,883.05 9,355,540.64 4,722,288.35
Agrochemical such as
fertilizer and pesticides 904,159,434.15 1,168,229,051.07 747,786,895.46 902,690,769.95 156,372,538.69 265,538,281.12
Total 941,804,531.22 1,210,675,338.66 773,512,937.14 938,964,764.41 168,291,594.08 271,710,574.25
(3) Sales revenue from the top five clients of the Company is RMB 279,591,909.36 in
total, accounting for 29.69% of total sales revenue.
33. Business taxes and surcharges
Items Standard Amount occurred for
the current period
Amount occurred in
the last period
Business tax 5% of turnover 120,583.48 208,871.79
Tax on resources RMB 2/ton for liquid salt and
RMB 12/ton for solid salt 443.52 4,376.16
Tax for municipal
maintenance and
construction
7% or 5% of turnover tax
252,098.97 902,866.22
Educational surtax 3% of turnover tax 108,042.27 397,033.85
Other 19,735.81 38,766.46
Total 500,904.05 1,551,914.48
34. Financial expense
Items Amount occurred for the
current period
Amount occurred in the last
period
Interest expense 21,466,709.34 17,402,955.76Items Amount occurred for the
current period
Amount occurred in the last
period
Less: interest income 3,639,286.97 3,207,020.31
Exchange loss 163,274.63 2,542,056.55
Less: exchange gain 190,857.90 1,027,785.24
Other 9,738,046.51 17,119,650.17
Total 27,537,885.61 32,829,856.93
35. Loss on assets impairment
Items
Amount occurred for the
current period
Amount occurred in the last
period
Loss on bad debts 4,580,867.92 12,574,393.76
Loss on falling price of inventory 1,009,167.62
Loss on impairment of long-term equity
investment -10,000.00
Loss on impairment of fixed assets 1578154.94
Total 5,590,035.54 14,142,548.70
36. Income from change in fair value
Item
Amount occurred for the
current period
Amount occurred in the last
period
Change in fair value of tradable financial
assets 2,196,656.32
Total 2,196,656.32
37. Investment income
Resource
Amount occurred for the
current period
Amount occurred in the last
period
Income from disposal of long-term equity
investment calculated by cost method 1,440,000.00 3,234,000.00
Income from tradable financial assets 119,148.38
Total 1,440,000.00 3,353,148.38Note: There exists no major limitation to repatriation of investment income.
38. Non-operating income
Item
Amount occurred for the
current period
Amount occurred in the last
period
1. Subtotal of gains from disposal of
non-current assets 2,331,756.19 61,157.02
Of which: gains from disposal of fixed
assets 2,331,756.19 61,157.02
2. Other 328,046.88 91,714.43
Total 2,659,803.07 152,871.45
39. Non-operating expense
Item
Amount occurred for the current
period
Amount occurred in the last
period
1. Total of loss on disposal of non-current
assets
122,294.11
Of which: Loss on disposal of fixed assets 122,294.11
2. Expense of common welfare donation 861,000.00
3. Extraordinary Losses 14,038.00 847.07
5. Other 1,021,517.33 25,891.50
Total 1,035,555.33 1,010,032.68
40. Income tax expense
Item
Amount occurred for the current
period
Amount occurred in the last
period
Income tax expense 15,073,885.85 26,050,411.66
Of which: Income tax of the current period 15,073,885.85 26,050,411.66
Deferred income tax
41. Net transferring net profit into cash flows of operating activities
Item Jan. – Jun. 2009 Jan. – Jun. 2008
Net profit 45,223,722.21 78,151,234.94Item Jan. – Jun. 2009 Jan. – Jun. 2008
Plus: Provision for assets impairment 5,590,035.54 14,142,548.70
Depreciation of fixed assets, of oil-gas assets, of productive
biological assets 45,544,393.45 28,787,248.90
Amortization of intangible assets 1,683,530.76 2,145,350.80
Amortization of long-term deferred expense 14,273.21 48,820.02
Loss on disposal of fixed assets, intangible assets and other
long-term assets (income is listed as “-”) -2,331,756.19 61,137.09
Loss on retirement of fixed assets (income is listed as “-”)
Losses on change in fair value （income is listed as “-”） -2,196,656.32
Financial expense（income is listed as “-”） 27,537,885.61 32,829,856.93
Investment losses（income is listed as “-”） -1,440,000.00 -3,353,148.38
Decrease in deferred income tax assets（increase is listed as “-”）
Increase in deferred income tax liabilities（decrease is listed as “-”）
Decrease of inventories (increase is listed as “-”) 51,411,108.79 -24,030,221.06
Decrease in operating receivables (increase is listed as “-”) -104,134,875.20 -116,032,347.25
Increase in operating payables (decrease is listed as “-”) -6,971,552.96 98,076,496.05
Other
Net cash flows arising from operating activities 59,930,108.90 110,826,976.74
II. Investing and financing activities that do not involving cash receipts
and payment:
Conversion of debt into capital 0 0
Convertible bond due with one year 0 0
Fixed assets financed by finance leases 0 0
III. Net increase in cash and cash equivalents: 0
Cash at the end of period 657,073,854.90 675,338,431.42
Less: cash at the beginning of period 562,832,319.76 452,405,704.33
Add: cash equivalents at the end of period 0 0
Less: cash equivalent at the beginning of period 0 0
Net in crease in cash and cash equivalents 94,241,535.14 222,932,727.09
42. Acquisition and disposal of subsidiaries and other operation unitsItems Amount
Disposal of subsidiaries and other operation units:
1. Disposal of price of subsidiaries and other operation units:
2. Disposal of cash and cash equivalents received by subsidiaries
and other operation units:
Less: Cash and cash equivalents held by subsidiaries and other
operation units
3. Disposal of net cash received by subsidiaries and other operation
units:
4. Disposal of net asset of subsidiaries
-40,974,988.47
Current assets 12,032.36
Non-current assets
Current liabilities 40,987,020.83
Non-current liabilities
IX. Notes to the Financial Statement of Parent Company
1. Accounts receivable
(1) Listing by aging
Closing balance Opening balance
Aging
Balance Proportion
Provision for
bad debts
Proportion Balance Proportion
Provision for
bad debts
Proportion
Within 1 year
(including1
year) 49,485,903.39 82.36% 2,487,569.33 5.03% 6,346,920.10 36.08% 297,842.42 4.69%
1-2 years
(including 2
years) 202,361.05 0.34% 10,118.05 5.00% 1,109,217.15 6.30% 55,460.86 5.00%
2-3 years
(including 3
years) 1,192,047.47 1.98% 59,602.37 5.00% 4,746,548.11 26.97% 4,679,125.66 98.58%
3-4 years
(including 4
years) 4,044,369.11 6.73% 4,044,369.11 100.00% 1,163,748.76 6.61% 744,683.81 63.99%Closing balance Opening balance
Aging
Balance Proportion
Provision for
bad debts
Proportion Balance Proportion
Provision for
bad debts
Proportion
4-5 years
(including 5
years) 933,174.51 1.55% 933174.51 100.00%
Over 5 years 4,229,744.25 7.04% 4,229,744.25 100.00% 4,229,744.25 24.04% 4,229,744.25 100.00%
Total 60,087,599.78 100.00% 11,764,577.62 19.58% 17,596,178.37 100.00% 10,006,857.00 56.87%
(2) Listing by categories
Closing balance Opening balance
Category
Amount Proportion
Withdrawal
proportion
Provision for
bad debts
Amount Proportion
Withdrawal
proportion
Provision for
bad debts
Significant
single
amounts 19,976,400.00 33.25% 5.00% 998,820.00
Insignificant
single
amounts but
with
significant
credit risk 5,078,592.01 8.45% 100.00% 5,078,592.01 5,078,592.01 28.86% 100.00% 5,078,592.01
Other
insignificant 35,032,607.77 58.30% 16.23% 5,687,165.61 12,517,586.36 71.14% 39.37% 4,928,264.99
Total 60,087,599.78 100.00% 19.58% 11,764,577.62 17,596,178.37 100.00% 56.87% 10,006,857.00
(3) At the end of period, the top five accounts receivable totaled RMB 28,110,760.31,
taking up 46.78% of total accounts receivable.
(4) No amount due from shareholders who hold 5% or more of the voting rights of the
Company is included in the accounts receivable.
(5) There exists no payment received from related parties in the accounts receivable.
2. Other receivables
(1) Listing by aging
Closing balance Opening balance
Aging
Balance Proportion
Provision
for bad
debts
Withdrawal
proportion
Balance Proportion
Provision
for bad
debts
Withdrawal
proportionClosing balance Opening balance
Aging
Balance Proportion
Provision
for bad
debts
Withdrawal
proportion
Balance Proportion
Provision
for bad
debts
Withdrawal
proportion
Within 1 year
(including1
year) 84,368,537.44 71.67% 1,147,007.11 1.36% 87,444,716.22 71.67% 73,851.72 0.08%
1-2 years
(including 2
years) 11,769,869.84 14.13% 38,896.42 0.33% 17,245,679.61 14.13% 33,946.42 0.20%
2-3 years
(including 3
years) 3,406,437.73 2.79% 33,027.31 0.97% 3,410,437.73 2.79% 37,027.31 1.09%
3-4 years
(including 4
years) 9,284,047.54 7.67% 74,870.00 0.81% 9,358,647.54 7.67% 78,600.00 0.84%
4-5 years
(including 5
years) 547,290.30 0.40% 46,740.06 8.54% 489,085.60 0.40% 43,829.82 8.96%
Over 5 years 4,099,519.77 3.34% 4,099,519.77 100.00% 4,079,124.47 3.34% 4,079,124.47 100.00%
Total 113,475,702.62 100.00% 5,440,060.67 4.79% 122,027,691.17 100.00% 4,346,379.74 3.56%
(2) Listing by categories
Closing balance Opening balance
Category
Amount Proportion
Withdrawal
proportion
Provision for
bad debts
Amount Proportion
Withdrawal
proportion
Provision
for bad
debts
Significant
single
amounts 107,956,299.08 95.14%
113,559,042.42 93.06%
Insignificant
single
amounts but
with
significant
credit risk
Other
insignificant 5,519,403.54 4.86% 98.56% 5,440,060.67 8,468,648.75 6.94% 51.32% 4,346,379.74Closing balance Opening balance
Category
Amount Proportion
Withdrawal
proportion
Provision for
bad debts
Amount Proportion
Withdrawal
proportion
Provision
for bad
debts
Total 113,475,702.62 100.00% 4.79% 5,440,060.67 122,027,691.17 100.00% 3.56% 4,346,379.74
(3) Other receivable with large amount
Contents Amount
Hubei Sanonda Foreign Trading Co., Ltd. 45,133,162.90
Jingzhou Lingxiang Chemical Industry Co., Ltd. 30,191,173.33
Sanonda (Jingzhou) Pesticide & Chemical Co., Ltd. 22,631,962.85
Sanonda Zhengzhou Pesticide Co., Ltd. 10,000,000.00
Shantou Biyue Plastic Co., Ltd. 3,125,000.00
(4) At the end of period, the top five accounts receivable totaled RMB 111,081,299.08,
taking up 97.89% of total accounts receivable.
(6) No amount due from shareholders who hold 5% or more of the voting rights of the
Company is included in the other receivables.
(7) Proportion of amount receivable from related parties in other receivables is 83.57%.
3. Long-term equity investment
(1) Listing by accounting method
Investee entities
Initial
investment
amount
Opening
carrying
amount
Increase for
the current
period
Decrease
for the
current
period
Closing
carrying
amount
Cash dividend
received for
the current
period
Calculation at cost
method:
Investment in subsidiaries
1. Sanonda Zhengzhou
Pesticide Co., Ltd. 38,558,619.32 38,558,619.32 38,558,619.32
2. Sanonda (Jingzhou)
Pesticide & Chemical Co.,
Ltd. 24,500,000.00 24,500,000.00 2,000,000.00 26,500,000.00Investee entities
Initial
investment
amount
Opening
carrying
amount
Increase for
the current
period
Decrease
for the
current
period
Closing
carrying
amount
Cash dividend
received for
the current
period
3. Hubei Sanonda Foreign
Trading Co., Ltd. 9,000,000.00 9,000,000.00 9,000,000.00 10,391,698.11
4. Hubei Sanonda
Tianmen Agrochemical
Co., Ltd. 7,245,023.32 7,245,023.32 8,500,000.00 15,745,023.32
5. Jingzhou Longhua
Petrochemicals Co., Ltd. 3,250,000.00 3,250,000.00 3,250,000.00
6. Jingzhou Lingxiang
Chemical Industry Co.,
Ltd. 5,100,000.00 5,100,000.00 5,100,000.00
7. Jingzhou Sanonda
Aifusi Chemical Industry
Co., Ltd. 3,060,000.00 3,060,000.00 3,060,000.00
Other equity investment
1. Jingzhou Tianyang
Huibao Precision
Chemicals Co., Ltd 1,440,000.00 1,440,000.00 1,440,000.00
2. Jingzhou Dali Industrial
Co., Ltd 1,674,600.00 1,674,600.00 1,674,600.00
3. Hubei Shendian Co.,
Ltd. 564,000.00 564,000.00 564,000.00
4. Wangda Industrial
Holding Co., Ltd 550,000.00 550,000.00 550,000.00
5. Guangxi Zhongding
Holding Co., Ltd 580,800.00 580,800.00 580,800.00
10. Jingzhou Commercial
Bank 20,000,000.00 20,000,000.00 20,000,000.00
Total 115,523,042.64 110,423,042.64 15,600,000.00 1,440,000.00 124,583,042.64 10,391,698.11
Note: ① During the reporting period, the Company transferred 48% equities of
Jingzhou Tianyang Huibao Fine Chemical Industrial Co., Ltd. to other shareholders, no
longer holding these equities.
② In the reporting period, Hubei Sanonda Foreign Trading Co., Ltd., the shareholdingsubsidiary of the Company acquired 49% equities of Jingzhou Sanonda Aifusi Chemical
Industry Co., Ltd.. Therefore, the Company totally holds 100% equities of Jingzhou
Sanonda Aifusi Chemical Industry Co., Ltd.
③ In the reporting period, in accordance with the relevant provision about access to
existing enterprises and additional enterprises producing pesticide stipulated by the State,
registered capital of the original enterprises producing pesticide has to reach to RMB 30
million since Oct. 2008, thus, the Company increased investment of RMB 2 million in
Sanonda (Jingzhou) Pesticide Chemical Industry (the subsidiary of the Company), so
that the registered capital increased to RMB 30 million, and the proportion of shares held
by the Company went up to 88.33% from 87.5%. The Company increased investment of
RMB 8.5 million in cash in Hubei Sanonda Tianmen Agrochemical Co., Ltd. (the
subsidiary of the Company, its other shareholder Hubei Sanonda Foreign Trading Co.,
Ltd. invested RMB 1.5 million in it. The said company transferred public reserve and
retained profit into capital amounting to RMB 12 million), so that the registered capital
increased to RMB 30 million, and the proportion of shares held by the Company
remained unchanged.
④ In the reporting period, the Company established Jingzhou Lingxiang Chemical
Industry Co., Ltd. (hereinafter referred to as Jingzhou Lingxiang) together with Sanonda
Group Corporation. Jingzhou Lingxiang whose registered capital is RMB 10 million is
engaged in the production of formaldehyde. This company’s 51% equities are held by
the Company, while the rest 49% equities are held by Sanonda Group Corporation. At
present, the said company is under preconstruction, and is expected to start operation by
the end of 2009.
(2) Provision for impairment of long-term investment
Investee entities Closing balance Opening balance
Sanonda (Jingzhou) Pesticide
& Chemical Co., Ltd.
24,500,000.00 24,500,000.00
Jingzhou Commercial Bank 11,991,017.37 11,991,017.37
Total 36,491,017.37 36,491,017.37
4. Operating income
(1) Operating income and operating cost
Operating income Operating cost
Items Amount occurred
for the current
Amount occurred
in the last period
Amount occurred
for the current
Amount occurred
in the last periodperiod period
Main operation 698,156,697.45 858,331,751.94 571,710,291.09 638,820,597.36
Other 7,352,720.20 25,551,319.36 6,152,241.88 22,395,277.11
Total 705,509,417.65 883,883,071.30 577,862,532.97 661,215,874.47
(2) Income from main operation
Income from main operation Cost of main operation Profit from main operation
Category of main
business and products
Amount
occurred for
the current
period
Amount
occurred in
the last period
Amount
occurred for
the current
period
Amount
occurred in
the last period
Amount
occurred for
the current
period
Amount
occurred in
the last period
Agrochemical such as
fertilizer and pesticides 698,156,697.45 858,331,751.94 571,710,291.09 638,820,597.36 126,446,406.36 219,511,154.58
Total 698,156,697.45 858,331,751.94 571,710,291.09 638,820,597.36 126,446,406.36 219,511,154.58
(3) Sales revenue from the top five clients of the Company is RMB 587,646,281.85 in
total, accounting for 35.28% of total sales revenue.
5. Investment income
Resource
Actual amount for the
current period
Actual amount in the last
period
Income from long-term equity investment calculated by cost
method 10,391,698.11 487,500.00
Income from disposal of long-term equity investment calculated 1,440,000.00 18,276,325.07
Total 11,831,698.11 18,763,825.07
X. Relationship of related parties and their transactions
1. Information related with parent company of the Company
Name of parent
companies
Registration place Character of business Registered capital Note
Sanonda Group
Corporation
93 Beijing East Road,
Jingzhou, Hubei
Production and
operation of pesticide,
chemicals products
240,661,000.00 Parent companyName of parent
companies
Registration place Character of business Registered capital Note
China National
Agrochemical
Corporation
62 Northern Fourth
Ring Road (West),
Haidian District,
Beijing
Constructional
engineering, mineral
products, fertilizer,
chemical raw material
300,000,000.00 Parent company of
parent company
China National
Chemical Corporation
62 Northern Fourth
Ring Road (West),
Haidian District,
Beijing
Constructional
engineering, mineral
products, fertilizer,
chemical raw material
8,897,497,037.78 Final controller
2. Shareholding proportion of the Company held by the parent companies and their
voting right proportion
Items
Opening
amount
Increase for the
current period
Decrease for the
current period
Closing amount
Shareholding proportion 20.02% 20.02%
Voting right proportion 20.02% 20.02%
3. Transaction of related parties (Unit: RMB Yuan)
(1) Purchase and sale transactions
Type of transactions Name of enterprises
Relationship of
related parties
Transaction
amount
Proportion of
transaction amount in
the same transactions
Associated transaction of purchasing commodities and receiving labor service
Raw material procurement
China National Agrochemical
Corporation
Same final controller 21,914,775.00 3.86%
Raw material procurement Sanonda Group Corporation Parent company 64,428,155.10 11.34%
Packaging procurement Jingzhou Fude Food General Factory
Same parent
company
1,413,846.61 0.25%
Packaging procurement Sanonda Advertising Company Same parent 2,489,959.85 0.44%
Raw material procurement
Jingzhou Hengxiang Material Trade
Co., Ltd.
Same parent
company
11,509,623.40 2.03%
Packaging procurement Jingzhou Dali Industrial Co., Ltd Joint stock company 4,726,520.00 0.83%
II. Associated transaction of selling commodities and providing labor service
Sales of pesticide and
chemical products
Jingzhou Hengxiang Material Trade
Co., Ltd
Same parent
company
129,701.56 0.01%
Sales of chemical products
Hubei Jingzhou Huaxiang Chemical
Co., Ltd.
Affiliated enterprise
of parent company
13,976,014.87 1.48%
Sales of pesticide products Jiangsu Anbang Electrical Company Same final controller 1,224,210.00 0.13%Limited
III. Other
Guarantee fee paid Sanonda Group Corporation Parent company 4,660,000.00 100%
Note 1: Taking control and joint control or significant influence as preconditions, the
Company recognizes related parties in line with the principle of substance over form.
Note 2: In other associated transactions, guarantee fee paid is that the Company paid
security costs that parent company Sanonda Group Corporation provides the guarantees
for the Company.
(2) Guarantees between the Company and related parties
① The Mutual-guarantee Agreement is signed between the Company and Guangxi
Hechi Chemicals Co., Ltd. (hereinafter referred to as “Hechi Chemicals”, it belongs to
China National Chemicals Corporation, same as the Company, controlled by the same
final controller), in which the Company provided a joint liability guarantee for loan for
fixed assets of RMB 100 million borrowed by Hechi Chemical from Agricultural Bank
of China Hechi Branch, while Hechi Chemical also provided a joint liability guarantee
for maximum loans of 60 million borrowed by the Company from Industrial and
Commercial Bank of China Jingzhou Branch Shashi Sub-branch and maximum loans of
40 million borrowed by the Company from Bank of Communications Wuhan Branch.
② Other guarantee by related parties otherwise the above-mentioned matters
Units Bank Guarantee
amount at
the
period-end
Guaranty period Typer
Sanonda Group
Corporation
Industrial and
Commercial Bank of
China, Jingzhou Shashi
Subbranch
15,000,000 20 Jan. 2009-
19 Jan. 2010
Guarantee for
borrowing of
flow funds
Sanonda Group
Corporation
Industrial and
Commercial Bank of
China, Jingzhou Shashi
Subbranch
25,000,000 25 Mar. 2009-
23 Mar. 2010
Guarantee for
borrowing of
flow funds
Sanonda Group
Corporation
China Construction Bank
Jingzhou Sanwan
Subbranch
25,000,000 20 Mar. 2008-
19 Mar. 2011
Guarantee for
borrowing of
flow funds
Sanonda Group
Corporation
China Construction Bank
Jingzhou Sanwan
Subbranch
30,000,000 18 Feb. 2008-
17 Mar. 2011
Guarantee for
borrowing of
flow fundsChina National
Agrochemical
Corporation
Import & Export Bank of
China
50,000,000 18 May. 2009-
18 May. 2011
Guarantee for
borrowing of
flow funds
China National
Chemical
Corporation
China Construction Bank
Jingzhou Sanwan
Subbranch
97,560,000 3 Feb. 2008-
2 Feb. 2011
Guarantee for
borrowing of
flow funds
China National
Chemical
Corporation
China Construction Bank
Jingzhou Sanwan
Subbranch
100,000,000 29 Aug. 2008-
28 Aug. 2013
Guarantee for
project loan
China National
Chemical
Corporation
China Construction Bank
Jingzhou Sanwan
Subbranch
100,000,000 10 Feb. 2009-
9 Feb. 2011
Guarantee for
borrowing of
flow funds
Sanonda Group
Corporation
Industrial Bank Wuhan
Branch 100,000,000 21 Apr. 2008-
21 Apr. 2013
Guarantee for
project loan
China National
Chemical
Corporation
Shenzhen Ping An Bank 79,000,000 29 Apr. 2009-
29 Apr. 2012
Guarantee for
borrowing of
flow funds
(3) Current balance of related parties
Units
Relationship of related
parties Items
Closing
balance
Proportion in
total amount
of project
Jingzhou Hengxiang Material
Trade Co., Ltd Same parent company
Advance
receipts
2,119,921.84 1.66%
China National Agrochemical
Corporation Parent company
Advance
receipts
264,775.00 0.21%
Jingzhou Dali Industrial Co., Ltd
Joint venture company Advance
receipts
652,891.84 0.51%
Jingzhou Fude Food General
Factory Same parent company
Advance
receipts
378,516.50 0.30%
Jingzhou Hengxiang Material
Trade Co., Ltd Same parent company
Advances to
suppliers
440,491.50 0.46%
Hubei Jingzhou Huaxiang
Chemical Co., Ltd.
Affiliated enterprise of
parent company
Advances to
suppliers 397,123.01 0.41%
Jiangsu Anbang Electrical
Company Limited
Same final controller Advances to
suppliers
199,290.00 0.21%
XI. Share-based payment
The Company has no information related with share-based payment to disclose in thereporting period.
XII. Nonmonetary assets exchange
The Company has no information related with nonmonetary assets exchange to disclose
in the reporting period.
XIII. Debts restructuring
For the reporting period, there was no debt restructuring that need to be disclosed.
XIV. Borrowing costs
The capitalization borrowing costs is RMB 1,533,580.90during the reporting period at
the capitalization rate of 5.76%
XV. Contingencies
1. Contingencies formed due from foreign guarantees
Guarantor Guarantee Total amount
Overdue
amount
Way Type
Current
situation of
guarantees
1. Guarantees for subsidiaries
The
Company
Hubei Sanonda Foreign Trading
Co., Ltd.
USD5000000
Joint liability
guarantee
Guarantee for loans
of trade financing
Business-as-usual
The
Company
Hubei Sanonda Foreign Trading
Co., Ltd.
RMB50000000
Joint liability
guarantee
Guarantee for loans
of trade financing
Business-as-usual
The
Company
Hubei Sanonda Foreign Trading
Co., Ltd.
USD10000000
Joint liability
guarantee
Guarantee for loans
of trade financing
Business-as-usual
The
Company
Hubei Sanonda Foreign Trading
Co., Ltd.
RMB100000000
Joint liability
guarantee
Guarantee for loans
of trade financing
Business-as-usual
The
Company
Hubei Sanonda Tianmen
Agrochemical Co., Ltd.
RMB7000000
Joint liability
guarantee
Guarantee for
current capital loans
Business-as-usual
2. Guarantees for other units
The
Company
Guangxi Hechi Chemicals Co.,
Ltd
RMB
100,000,000
Joint liability
guarantee
Guarantee for
project loans
Business-as-usual
Note: The guarantee provided for Hubei Sanonda Foreign Trading Co., Ltd. is that the
Company provides maximum security of guaranty for its trade financing behaviors such
as establishment of letter of credit and bill of exchange.
2. Other contingenciesThe Company has no other information related with contingency to disclose in the
reporting period.
XVI. Events after balance sheet date
There were no events to disclose during the period from balance sheet date to date of
approving to submit the financial report in the report period.
XVII. Commitment
The Company has no information related with commitment to disclose in the reporting
period.
XVIII. Supplementary information
1. Return on equity (ROE) and earnings per share (EPS)
(1) ROE and EPS
ROE EPS
Fully diluted Weighted average EPS-basic EPS-diluted
Profit in the
reporting period
Amount
for the
current
period
Amount
of last
period
Amount
for the
current
period
Amount
of last
period
Amount
for the
current
period
Amount
of last
period
Amount
for the
current
period
Amount
of last
period
Net profit attributable
to common
shareholders of the
Company 3.96% 7.79% 3.99% 8.10% 0.0743 0.1301 0.0743 0.1301
Net profit attributable
to common
shareholders of the
Company after
deduction of
non-recurring profit
and loss 3.98% 7.88% 4.00% 8.19% 0.0745 0.1316 0.0745 0.1316
(2) Explanation on counting process
Items Amount
Net profit attributable to common shareholders of the Company 44,124,619.58
Non-recurring gains and losses attributable to parent company -116,747.31
Net profit attributable to common shareholders of the Company after 44,241,366.89Items Amount
deduction of non-recurring profit and loss
Opening net assets attributable to common shareholders of the Company 1,098,558,871.77
Ending net assets attributable to common shareholders of the Company 1,112,883,918.38
Ending net assets attributable to common shareholders of the Company after
dilution 1,112,883,918.38
Net assets attributable to common shareholders of the Company after
weighted average 1,105,721,395.08
Number of shares 593,923,220.00
Formulas for computing various indexes are as follows:
① Fully diluted return on equity =P÷E
Of which: P is the net profit belonging to common stockholders of the company or the
net profit belonging to common stockholders of the company after deduction of
non-recurring profit and loss；E is the closing net assets belonging to common
stockholders of the company.
② Weighted average yield of net assets =P/(E0 ＋ NP÷2 ＋ Ei×Mi÷M0 －
Ej×Mj÷M0±Ek×Mk÷M0)
Of which: P is the net profit belonging to common stockholders of the company or net
profit belonging to common stockholders of the company after deduction of
non-recurring profit and loss；NP is the net profit belonging to common stockholders of
the company; E0 is the opening net assets belonging to common shareholders of the
company; Ei is the net assets newly added due to issuance of new shares or
debt-to-equity swap during the report period and belonging to common shareholders of
the company; Ej is the net assets decreased due to counter-purchase or cash bonus and
belonging to common shareholders of the company; M0 is the number of months of the
report period; Mi is the number of months from the month following the increase of net
assets to the end of the report period; Mj is the number of months from the month
following the decrease of net assets to the end of the report period; Ek is the change in
net assets caused by other transactions or events; Mk is the number of months from the
month following the change of net assets to the end of the report period.
③ Basic earnings per share=P÷S
S= S0＋S1＋Si×Mi÷M0－Sj×Mj÷M0－Sk
Of which: P is the net profit belonging to common stockholders of the company or net
profit belonging to common stockholders of the company after deduction of
non-recurring profit and loss; S is the weighted mean of the outstanding stock; S0 is the
sum of shares at the beginning of the period; S1 is the number of shares increased due to
conversion of accumulation funds to capital stock or distribution of stock dividends
during the report period; Si is the number of shares increased due to issuance of new
shares or debt-to-equity swap during the report period; Sj is the number of shares
decreased due to counter-purchase during the report period; Sk is the number of sharesreduced within the report period; M0 is the number of months of the report period; Mi is
the number of months from the month following the increase of net assets to the end of
the report period; Mj is the number of months from the month following the decrease
of net assets to the end of the report period.
④ Diluted earnings per share=[P+(Diluted potential common stock dividends confirmed
as expenses － conversion charge)×(1-income tax rate)]/(S0 ＋ S1 ＋ Si×Mi÷M0 －
Sj×Mj÷M0—Sk+ weighted mean of common stock increased by subscription warrants,
stock options and convertible bonds )
Of which: P is the net profit belonging to common stockholders of the company or the
net profit belonging to common stockholders of the company after deduction of
non-recurring profit and loss.
⑤ The Company has no dilutional potential common share but possibly having dilution
in the next period.
⑥ Number of common shares outstanding or number of potential common shares
remained unchanged from the balance sheet date to reporting date of approval of the
financial report.
2. Non-recurring gains and losses
(1) Schedule of non-recurring gains and losses in the reporting period
Items Amount
(1) Gains and losses on the disposal of non-current assets, including offset provision for assets
impairment withdrawn 3,771,756.19
(2) Gains and losses on change in fair value from tradable financial assets and tradable financial
liabilities, as well as investment income from disposal of tradable financial assets and tradable
financial liabilities and financial assets available for sales except for effective hedging related with
normal businesses of the Company 2,196,656.32
(3) Net amount of other non-operating incomes and expenses except the above items -707,508.45
(4) Items of gains and losses being in compliance with definition of non-recurring gains and losses -4,660,000.00
Subtotal 600,904.06
Less: Amount impact on income tax 150,226.02
Non-recurring gains and losses after deducting influence on income tax 450,678.04
Of which: Attributable to owners of parent company -116,747.31
Attributable to minority shareholders 567,425.35
(2) Explanation on non-recurring gains and losses in the reporting period
① As to gains and losses on disposal of non-current assets, the gains is RMB
2,331,756.19 arising from disposal of idle fixed assets and retirement of fixed assets bythe Company and its subsidiaries, as well as gains from disposal of long-term equity
investment of RMB 1,440,000.00.
② Gains and losses on change in fair value of tradable financial assets arose from an
income from stock investment by the Company in the reporting period.
③ Items of gains and losses being in compliance with definition of non-recurring gains
and losses is that the Company paid security costs that parent company Sanonda Group
Corporation provides the guarantees for the Company.
VII. Documents Available For Reference
I. Text of Interim Report 2009 and the Summary with signature of the Chairman of the
Board of the Company.
II. Accounting Statements carried with signatures and seals of Legal Representatives and
Accounting Principal.
III. The original copy of all company files and manuscript of public notices ever
disclosed on China Securities Journal, Securities Times and Hong Kong Ta Kung Pao in
the report period.
IV. Place for reference: the office of the Company
Hubei Sanonda Co., Ltd.
Chairman of the Baord: Li Zuorong
Aug. 14, 2009
