HUBEI SANONDA CO., LTD.
INTERIM REPORT 2010
Stock Code: 000553 (200553)
Short Form of Stock: Sanonda A (B)
August 2010Important 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 2010 is true and complete.
4. The financial report for the first half of 2010 has not been audited.
Contents
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----------------------------------------------------72I. 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: 0716-8208899
E-mail: li_zhongxi@263.net
Contact Address: No. 93, Beijing East Road, Jingzhou, Hubei
Securities Affairs Representative: Liang Jiqin
Tel: 0716-8208232
Fax: 0716-8208899
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: Hubei Province Administration Bureau for Industry
and Commerce
Registration date changed recently: 27 Oct. 2009
Registration code of corporate business license: 420000400004491
Organizational code: 70696228-7
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 indices
Unit: RMB Yuan
At the end of the
report period
At the period-end of
last year
Increase/decrease compared with
the period-end of last year (%)
Total assets 2,362,035,999.48 2,039,070,607.41 15.84%
Owners’ equity attributable to
shareholders of the listed company
1,102,126,641.75 1,087,987,662.96 1.30%
Share capital 593,923,220.00 593,923,220.00 0.00%
Net asset per share attributable to
shareholders of the listed company
(Yuan/share)
1.86 1.83 1.64%
In the report period
(from Jan. to Jun.)
The same period of
last year
Increase/decrease year-on-year
(%)
Total operating income 796,268,170.38 985,283,990.84 -19.18%
Operating profit 20,649,366.43 58,673,360.32 -64.81%
Total profit 20,921,459.07 60,297,608.06 -65.30%
Net profit attributable to shareholders of
the listed company
12,409,697.08 44,124,619.58 -71.88%
Net profit attributable to shareholders of
the listed company after deducting
non-recurring gains and losses
15,801,149.84 44,241,366.89 -64.28%
Basic earnings per share (Yuan/share) 0.0209 0.0743 -71.87%
Diluted earnings per share (Yuan/share) 0.0209 0.0743 -71.87%
Net return on equity (%) 1.13% 3.99% -2.86%
Net cash flows from operating activities -93,954,493.15 59,930,108.90
Net cash flows from operating activities
per share (Yuan/share)
-0.16 0.10
Attached: items of non-recurring gains and losses
Items Amount Note (if applicable)
Gains and losses on the disposal of non-current assets 603,607.10
Other non-operating incomes and expenses besides the
above
-331,514.46
Other items in compliance with definition of
non-recurring gains and losses
-4,850,000.00
Fees paid by the Company
to Sanonda Group
Corporation and China
National Agrochemical
Corporation for their
providing guarantees to the
Company
Impact on income tax 1,144,476.84
Impact on minority interests 41,977.76
Total -3,391,452.76 -
Notes: There exists no difference between PRC GAAP and IFRS.II. Changes in Share Capital and Particulars about Share Capital
(I) Statement on changes in share
Shares of the Company remained unchanged in the report period.
(II) Number of shareholders and shares held by them
Unit: Share
Total number of
shareholders
80,409 (including 54,049 A-share holders)
Particulars about shares held by the top ten shareholders
Name of
shareholder
Nature of
shareholders
Shareholding
ratio (%)
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 0 0
STATE-OWNED
ASSETS
ADMINISTRATION
BUREAU OF
QICHUN COUNTY
The state 0.76% 4,489,266 0 0
Huang Hua
Domestic natural
person
0.53% 3,172,702 0 0
Li Dongliang
Domestic natural
person
0.52% 3,105,223 0 0
Yuan Haixiang
Domestic natural
person
0.51% 3,002,349 0 0
Huang Yangsheng
Domestic natural
person
0.45% 2,678,950 0 0
JINGZHOU SHASHI
DISTRICT UNION
RURAL CREDIT
COOPERATION
Domestic
non-state-owned
corporation
0.42% 2,500,000 0 0
Luo Qian
Domestic natural
person
0.41% 2,435,666 0 0
Hong Qina
Domestic natural
person
0.41% 2,412,494 0 0
Zhou Baoping
Domestic natural
person
0.38% 2,254,327 0 0
Particulars about the top ten shareholders holding share not subject to moratorium
Name of shareholder
Shares not subject to trading moratorium
held by the shareholder
Type of shares
SANONDA GROUP CORPORATION 118,887,202 RMB ordinary shares
STATE-OWNED ASSETS
ADMINISTRATION BUREAU OF
QICHUN COUNTY
4,489,266 RMB ordinary sharesHuang Hua 3,172,702 RMB ordinary shares
Li Dongliang 3,105,223 RMB ordinary shares
Yuan Haixiang 3,002,349 RMB ordinary shares
Huang Yangsheng 2,678,950 RMB ordinary shares
JINGZHOU SHASHI DISTRICT
UNION RURAL CREDIT
COOPERATION
2,500,000 RMB ordinary shares
Luo Qian 2,435,666 RMB ordinary shares
Hong Qina 2,412,494 RMB ordinary shares
Zhou Baoping 2,254,327 RMB ordinary shares
Explanation on
associated relationship
among the top ten
shareholders or
acting-in-concert
The State-owned Assets Administration Bureau among the shareholder above holds shares of
the Company on behalf of the state. There exists no related-party relationship between the
controlling shareholder and other shareholders not subject to trading moratorium. And it is
unknown whether the shareholders above are acting-in-concert parties as prescribed in the
Administrative Methods for Acquisition of Listed Companies.
(III) Number of shares held by the top ten shareholders subject to moratorium and
trading moratorium
Up until 18 Sept. 2009, all restricted shares of the Company had been released.
(IV) The controlling shareholder 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
Shares held by directors, supervisors and senior executives remained unchanged in the
report period.
(II) Particulars about engagement and dismissal of directors, supervisors and senior
executives
On 3 Feb. 2010, the 23rd Meeting of the 5th Board of Directors was convened, at
which the proposal on adding Ai Qiuhong as an independent director candidate for the
5th Board was reviewed and approved. And the said proposal was passed by voting at
the 1st Provisional Shareholders’ General Meeting in 2010 convened on 26 Feb. 2010.
On 26 Feb. 2010, the 1st Provisional Shareholders’ General Meeting in 2010 was
convened, at which Ms. Liu Jun, Mr. Jiang Chenggang and Mr. Wu Hairong were
elected as supervisors for the 6th Supervisory Committee. And Mr. Zhang Jianguo and
Mr. Zhou Cheng were elected by voting as staff-representative supervisors for the 6th
Supervisory Committee at the 11th Workers’ Congress held on 3 Dec. 2009.IV. Report of the Board of Directors
(I) Overall status of operating activities
During the report period, the weak pesticide and chemical market continued with a
serious overcapacity in the industry as a whole. As a result, it was difficult for the
Company to sell products, prices of some main products dropped sharply and the
overall profitability also decreased. For the report period, the Company achieved an
operating income of RMB 796 million, down by 19.18% year on year; a foreign
exchange income from export amounting to USD 49.16 million, representing a
year-on-year drop of 15.33%; a total profit standing at RMB 20.92 million, decreasing
by 65.30% on the year-on-year basis; and a net profit of RMB 12.41 million, down by
71.88% as compared with the corresponding period of last year.
(II) Scope and operation of the main business
1. Scope of main business
Production and sale of pesticides and chemical products
2. Main businesses classified according to industries or products
Unit: RMB Ten thousand
Main business classified according to industries
Industry or product
Operating
income
Operating cost
Gross profit ratio
(%)
Increase/decreas
e of operating
income year on
year (%)
Increase/decreas
e of operating
cost year on year
(%)
Increase/decrease
of gross profit
ratio year on year
(%)
New chemical
materials and special
chemical products
900.41 488.86 45.71% 56.66% 53.54% 1.11%
Petro-chemical
industrial and refined
chemical products
4,891.42 4,059.73 17.00% 53.35% 80.10% -12.33%
Basic (chlor-alkali)
chemical products
1,358.33 1,484.91 -9.32%
Agrochemical like
fertilize, pesticide,
etc
67,153.86 57,768.38 13.98% -25.73% -22.75% -3.31%
Total 74,304.02 63,801.88 14.13% -21.10% -17.52% -3.74%
3. Main business classified according to regions
Unit: RMB Ten thousand
Regions Operating income Increase/decrease of operating income compared with the last year (%)
Domestic 43,286 -19.99%
Overseas 31,018 -22.60%
Total 74,304 -21.10%
4. Analysis on financial status
Item Closing balance Opening balance Increase/decrease ratio
Accounts
receivable 17,189 6,586 161.01%Construction in
process 40,381 28,786 40.28%
Short-term
borrowings 24,634 3,990 517.41%
Non-current
liabilities due
within 1 year 16,000 9,500 68.42%
Notes:
① Accounts receivable increased by 161.01% over the year-begin, which was mainly
because settlement modes adopted for product exports in the report period were
mostly with recourse and the settlement periods were comparatively longer;
② Construction in process increased by 40.28% over the year-begin, which was
mainly due to input increase for projects such as the thermal electricity joint supply
project;
③ Short-term borrowings increased by 517.41% over the year-begin, which was
mainly because more capital were needed for production funds and project input;
④ Non-current liabilities due within one year increased by 68.42% over the
year-begin, which was mainly due to the high-tech product export working capital
borrowing of RMB 115,000,000 due within one year from the Export-Import Bank of
China.
(III) Explanation on significant changes in profit breakdown and main business
profitability
No significant changes occurred in the main businesses and main business structure of
the Company in the report period, which were pesticides, chemicals, chlor-alkali
chemicals, etc.. The profitability drop was mainly due to the reason that the weak
pesticide and chemical market continued with a serious overcapacity in the industry as
a whole in the report period, which led to a sharp drop of prices for some main
products of the Company, as well as a decrease of the overall profitability.
(IV) Other business that 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) Analysis on operation status and business performance of main holding
companies
Unit: RMB Ten thousand
Name of subsidiary Nature of business
Registered
capital
Shareholding
ratio
Total
assets
Net
assets
Operating
revenue
Net
profit
Sanonda (Jingzhou)
Pesticides and
Chemicals Co., Ltd.
Production of pesticides
and intermediates
3000 88.33% 5,275 408 6,139 61
Hubei Sanonda
Foreign Trading Co.,
Ltd.
Import & Export of
pesticides and
intermediates 1000 90.00% 15,797 1,554 11,641 -178
Hubei Sanonda Production and sales of 3000 98.50% 4,604 3,448 3,588 52Tianmen
Agrochemical Co.,
Ltd.
pesticides
Jingzhou Longhua
Petrochemical Co.,
Ltd.
Production and sales of
chemical products
500 65.00% 2,986 1,461 4,891 133
Jingzhou Sanonda
Aifusi Chemical
Industry Co., Ltd.
Research, development,
production and sales of
fine chemical products 600 95.10% 1,975 910 900 161
Jingzhou Lingxiang
Chemical Co., Ltd.
Research, development,
production and sale of
chemicals 1000 51.00% 4,239 785 1,358 -188
(VI) Problems and difficulties met in operation
During the report period, the weak pesticide and chemical market continued with a
serious overcapacity in the industry as a whole. In addition, the market competition
was intense. As a result, it was difficult for the Company to sell products. Some
production equipments stopped working for a long period, which caused a
comparatively great loss.
(VII) 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 project Amount of project (RMB
Ten thousand)
Project
progress
Income from the
project
Thermal electricity joint
supply project
31,383 88.00% Unfinished
PMIDA phase Ⅱ 6,304 82.00% Unfinished
Steam tube project 1,800 100.00% As expected
Total 39,487 - -
(Ⅷ) Forecast on operating performance from the year-begin to the end of the next
report period
The Company forecasts that the net profit for the period from the year-begin to the
end of the next report period may decline by a margin from 50% to 80%, which is
mainly because the weak pesticide and chemical market may continue, which will
make it difficult for the Company to sell its products and will lead to a price drop.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 report period, in order to improve operation and management level and risk
prevention ability and in accordance with requirement of Public Notice on Do well in
Disclosure of Annual Report and Relevant Work (document No. [2009] 34) from
CSRC, the Company formulated Responsibility System on Serious Errors in
Disclosure of Annual Report, Working System on Annual Report for Independent
Directors, Administrative System on Report and Submitting Information to Other
Units and Administrative System on Significant Capital Flow and Rules on Annual
Report for Audit Commission and so on.
Meanwhile, in accordance with special requirements in Guiding Opinions on
Establishing the Independent Director System in Listed Companies issued by CSRC
and Notice on Development of Work concerning Corporate Governance of Listed
Company in 2009 released by CSRC Hubei Bureau, the Company held the 1st
Provisional Shareholders’ General Meeting 2010 on 26 Feb. 2010, at which proposal
on election Ai Qiuhong as independent director of the Company was reviewed and
approved. Number of the independent directors reached one third of number of the
Board of Directors.
(II) Profit distribution and its implementation in report period
During the report period, the Company neither execute profit distribution nor transfer
public reserves in share capital.
In the report period, the Company will not distribute profit or transfer public reserves.
(III) There were no significant lawsuits or arbitrations in the report period, or those
carried down from the previous years
(IV) In the report period, there was no assets transaction in the Company.
(V) Significant related transactions in report period (Unit: RMB Yuan)
1. Purchase and sale transaction, related transaction providing and receiving labor
service
Occurred amount in current
period
Occurred amount in the same
period of last year
Name of enterprise Type Content
Pricing
principle
Amount
Percentage to
the same
transaction
Amount
Percentage to
the same
transaction
China National Agrochemical Purchase Purchase of raw Market 43,779,916.05 10.55% 21,914,775.00 4.30%Corporation materials price
Sanonda Group Corporation Purchase
Purchase of raw
materials
Market
price 5,615,302.58 1.35% 64,428,155.10 12.64%
Jingzhou Sanonda
Advertising Co., Ltd.
Purchase Purchase of packaging
Market
price 3,244,611.79 6.05% 2,489,959.85 4.27%
Jingzhou Hengxiang Material
Trade Co., Ltd
Purchase
Purchase of raw
materials
Market
price 4,663,256.07 1.12% 11,509,623.40 2.26%
Jingzhou Dali Industrial Co.,
Ltd
Purchase Purchase of packaging
Market
price 2,917,948.72 5.44% 4,726,520.00 8.11%
Jingzhou Fude Foods General
Factory
Purchase Purchase of packaging
Market
price 1,413,846.61 2.43%
Bluestar Environmental
Engineering Co., Ltd
Purchase
Purchase of raw
materials
Market
price 11,538.46 0.003%
Jingzhou Hengxiang Material
Trade Co., Ltd
Sale
Sale of chemical
products
Market
price 720,159.83 0.10% 129,701.56 0.01%
Hubei Jingzhou Huaxiang
Chemical Co., Ltd.
Sale
Sale of chemical
products
Market
price 14,749,943.74 1.99% 13,976,014.87 1.48%
Jiangsu Anpon
Electrochemical Co., Ltd
Sale Sales of pesticide
Market
price 1,882,058.23 0.25% 1,224,210.00 0.13%
2. Related-party guarantee
Guarantor Secured party Amount secured Start date End date
Executio
n of not
Sanonda Group Corporation The Company 10,000,000.00 13 Nov. 2009 13 Nov. 2013 No
Sanonda Group Corporation The Company 20,000,000.00 1 Feb. 2010 1 Feb. 2013 No
Sanonda Group Corporation The Company 90,000,000.00 21 Apr. 2008 21 Apr. 2015 No
ChemChina Corporation The Company 217,000,000.00 28 Apr. 2008 28 Apr. 2014 No
ChemChina Corporation The Company 80,000,000.00 29 Aug. 2008 28 Aug. 2015 No
ChemChina Corporation The Company 80,000,000.00 10 Feb. 2009 9 Feb. 2016 No
ChemChina Corporation The Company 97,560,000.00 3 Feb. 2008 2 Feb. 2015 No
China National
Agrochemical Corporation
The Company 50,000,000.00 18 May 2009 18 May 2013 No
China National
Agrochemical Corporation
The Company 65,000,000.00 30 Jun. 2009 30 Jun. 2013 No
China National
Agrochemical Corporation
The Company 85,000,000.00 31 Jun. 2009 31 Jul. 2013 No
Guangxi Hechi Chemicals
Co., Ltd.
The Company 40,000,000.00 10 Feb. 2010 10 Dec. 2010 NoThe Company Guangxi Hechi
Chemicals Co., Ltd.
100,000,000.00 12 Jan. 2008 12 Jan. 2013 No
3. Other related transactions
Occurred amount in current period
Occurred amount in the same
period of last year
Name of enterprise Type Content
Pricing
principle
Amount
Percentage to
the same
transaction
Amount
Percentage to
the same
transaction
Sanonda Group Corporation Guarantee
Pay for guarantee
fee
Agreement
price 2,850,000.00 58.76%
3,450,000.00 74.03%
China National Agrochemical
Corporation
Guarantee
Pay for guarantee
fee
Agreement
price 2,000,000.00 41.24%
1,210,000.00 25.97%
4. Accounts receivable and payable of related parties
Name of project Related parties Closing amount Opening amount
Advances from customers Jingzhou Hengxiang Material Trade Co., Ltd 800.00 800.00
Accounts payable Jingzhou Hengxiang Material Trade Co., Ltd 544,448.00 157,828.70
Accounts payable Jingzhou Dali Industrial Co., Ltd 239,327.04 1,165,733.44
Accounts payable Jingzhou Fude Foods General Factory 378,516.50 378,516.50
Accounts payable
Bluestar (Beijing) Chemical Machinery Co.,
Ltd
1,852,200.00 1,852,200.00
Accounts payable Bluestar Environmental Engineering Co., Ltd 37,300.00 378,000.00
Other accounts payable Jingzhou Sanonda Advertising Co., Ltd. 742,889.70
(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 Yuan
Guarantees provided for external parties (excluding guarantees provided for subsidiaries)
Name of the
guaranteed
Date and No. of
Relevant public
notice
Guarantee
line
Date of
occurrence
(Date of
signing
agreement)
Actual
amount of
guarantee
Type of
guarantee
Term of
guarantee
Implementat
ion
accomplishe
d or not
Guarantee for
related parties
or not
Guangxi Hechi
Chemicals Co.,
Ltd.
22 Feb. 2008
No. 2008-01
10,000.00 12 Jan. 2008 10,000.00
Joint liability
guarantee
5 years No Yes
Total external guarantees lines 0.00 Total external guarantees 0.00examined and approved in the
reporting period (A1)
occurred in the reporting period
(A2)
Total external guarantee lines
examined and approved at the
period end (A3)
0.00
Balance of actual guarantees at
the period end (A4)
10,000.00
Guarantees provided for subsidiary companies
Name of the
guaranteed
Date and No, of
Relevant public
notice
Guarantee
line
Date of
occurrence
(Date of
signing
agreement)
Actual
amount of
guarantee
Type of
guarantee
Term of
guarantee
Implementat
ion
accomplishe
d or not
Guarantee for
related parties
or not
Hubei Sanonda
Foreign Trading
Co., Ltd.
17 Apr. 2010
No. 2010-012
22,800.00 28 May 2010 19,800.00
Guarantee
with liability
1 year No Yes
Total guarantees lines for
subsidiaries examined and
approved in the reporting period
(B1)
22,800.00
Total guarantees for subsidiaries
occurred in the reporting period
(B2)
19,800.00
Total guarantee lines for
subsidiaries examined and
approved at the period end (B3)
22,800.00
Balance of actual guarantees at
the period end (B4)
19,800.00
Total guarantees of the Company (Total of the two above)
Total guarantees lines examined
and approved in the reporting
period (A1+B1)
22,800.00
Total guarantees occurred in the
reporting period (A2+B2)
19,800.00
Total guarantees lines examined
and approved at the report period
(A3+B3)
22,800.00
Total balance of actual
guarantees at the period end
(A4+B4)
29,800.00
Proportion of total actual guarantee amount (A4+B4) in net assets of the
Company
27.04%
Among which:
Amount of guarantees provided for shareholders, actual controller and
other related parties (C)
10,000.00
Amount of debt guarantees provided directly or indirectly for parties with
asset-liability ratio exceeding 70% (D)
22,800.00
Proportion of total guarantee amount exceeding 50% of the Company’s
net assets (E)
0.00
Total amount of the above three guarantees (C+D+E) 32,800.00
Explanation on possibility of taking several and joint liability involving
immature 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, neither the Company entrust others with financial affairs, norsuch matters carried down from the previous periods.
(VII) Implementation of commitments made
In the report period or lasting to the report period, there was no commitment made or
executed by the Company or shareholders holding over 5% shares of the Company.
(VIII) In the report period, there was no investment on securities.
(IX) Field visits, interviews and written inquiries received in report period
Time Place Way Visitor Main discussion and materials provided
Jan.-Jun. 2010 The Company By telephone
Individual
investor
Inquiring about production and operation of
the company, as well as disclosure of public
notice, with no material provided.
(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) Explanation on other events
1. 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 no
non-operational capital occupation by the Company’s principle shareholder or other
related parties in the report period. Total amount of guarantee in the report period and
carried down to the report period from the previous period was RMB 328 million. Of
which mutual guarantee for controlling subsidiary of the Company- Hubei Sanonda
Foreign Trading Co., Ltd. Was RMB 100 million, and joint liability guarantee for
related party Guangxi Hechi Chemicals Co., Ltd was RMB 228 million. The above
guarantees had been reviewed and approved at the shareholders’ meeting by voting.
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.
2. On 22 Jun. 2010, the Company held the 27th Meeting of the 5th Board of Directors,
at which reviewed and approved Proposal on Purchase 76.33% equity of Jingzhou
Hongxiang Chemical Co., Ltd held by Sanonda Group Corporation and its controlling
subsidiary company Jingzhou Hengxiang Material Trade Co., Ltd. (For details please
refer to public notice with No. 2010-023 and 2010-025 published in China Securities
Journal, Securities Times and Ta Kung Pao, as well as http://www.cninfo.com.cn
dated 23 Jun. 2010). The above equity related to state-owned assets, and need
approval from state-owned assets administration authority (actual controller of theCompany is China National Agrochemical Corporation) according to relevant
regulations, therefore, the share transfer has not executed materially in the report
period.
(XII) Index for information disclosed in report period
No.
Public notice
Date of
disclosure
Newspaper for disclosure
Website for
disclosure
1
Public Notice on Resolutions of the 23rd
Meeting of the 5th Board of Directors, Public
Notice on Routine Related Transactions and
Notice on Holding the 1st Provisional
Shareholders’ General Meeting 2010
4 Feb. 2010
China Securities Journal,
Securities Times and Ta Kung Pao
www.cninfo.com.cn
2
Public Notice on Adding Provisional
Proposals for Shareholders’ General
Meeting
9 Feb. 2010
China Securities Journal,
Securities Times and Ta Kung Pao
www.cninfo.com.cn
3
Public Notice on Resolutions of the 1st
Provisional Shareholders’ General Meeting
2010 and Legal Opinion Letter
27 Feb. 2010
China Securities Journal,
Securities Times and Ta Kung Pao
www.cninfo.com.cn
4
Public Notice on Estimated Achievement of
the 1st Quarter of 2010
15 Apr. 2010
China Securities Journal,
Securities Times and Ta Kung Pao
www.cninfo.com.cn
5
Public Notice on Change in Time for
Disclosure of the Annual Report 2009
15 Apr. 2010
China Securities Journal,
Securities Times and Ta Kung Pao
www.cninfo.com.cn
6
Public Notice on Resolutions of the 24th
Meeting of the 5th Board of Directors, Public
Notice on Related Transactions and Public
Notice on Providing Guarantee for Holding
Subsidiary, etc.
17 Apr. 2010
China Securities Journal,
Securities Times and Ta Kung Pao
www.cninfo.com.cn
7
Public Notice on Resolutions of the 1st
Meeting of the 6th Supervisory Committee
17 Apr. 2010
China Securities Journal,
Securities Times and Ta Kung Pao
www.cninfo.com.cn
8
Summary of the Annual Report 2009and
relevant System concerning Annual Report
17 Apr. 2010
China Securities Journal,
Securities Times and Ta Kung Pao
www.cninfo.com.cn
9
Public Notice on Resolutions of the 25th
Meeting of the 5th Board of Directors, Notice
on Holding the Annual Shareholders’ General
Meeting 2009
24 Apr. 2010
China Securities Journal,
Securities Times and Ta Kung Pao
www.cninfo.com.cn
10 The 1st Quarterly Report 2010 24 Apr. 2010
China Securities Journal,
Securities Times and Ta Kung Pao
www.cninfo.com.cn
11
Supplementary Public Notice on the Annual
Report 2009
26 May 2010
China Securities Journal,
Securities Times and Ta Kung Pao
www.cninfo.com.cn
12
Public Notice on Resolutions of the Annual
Shareholders’ General Meeting 2009 and
Legal Opinion Letter
29 May 2010
China Securities Journal,
Securities Times and Ta Kung Pao
www.cninfo.com.cn
13 Public Notice on Resolutions of the 26th 10 Jun. 2010 China Securities Journal, www.cninfo.com.cnMeeting of the 5th Board of Directors, Notice
on Holding the 2nd Provisional Shareholders’
General Meeting 2010 and Public Notice on
Related Transaction concerning Providing
Financial Service
Securities Times and Ta Kung Pao
14
Suggestive Public Notice on Holding the 2nd
Provisional Shareholders’ General Meeting
2010
22 Jun. 2010
China Securities Journal,
Securities Times and Ta Kung Pao
www.cninfo.com.cn
15
Public Notice on Resolutions of the 27th
Meeting of the 5th Board of Directors, Notice
on Holding the 3rd Provisional Shareholders’
General Meeting 2010 and Public Notice on
Related Transaction concerning Purchase of
Equity of Related Party
23 Jun. 2010
China Securities Journal,
Securities Times and Ta Kung Pao
www.cninfo.com.cn
15
Public Notice on Resolutions of the
Provisional Meeting of the 5th Board of
Directors
24 Jun. 2010
China Securities Journal,
Securities Times and Ta Kung Pao
www.cninfo.com.cn
16
Public Notice on Resolutions of the 2nd
Provisional Shareholders’ General Meeting
2010 and Legal Opinion Letter
24 Jun. 2010
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. 2010 Unit: (RMB) Yuan
Closing balance Opening balance
Items
Consolidation Parent company Consolidation Parent company
Current assets:
Monetary funds 543,482,180.87 497,093,988.89 474,460,623.29 424,584,953.40
Settlement fund reserve
Dismantle fund
Transaction financial asset
Notes receivable 31,645,432.18 20,332,793.98 10,746,710.09 2,714,810.09
Account receivable 171,891,279.33 41,416,884.14 65,857,262.23 9,940,149.67
Account paid in advance 14,541,658.12 16,405,806.13 24,018,481.41 25,138,734.64
Premium receivables
Receivables from reinsurers
Reinsurance contract reserve receivables
Interest receivable
Dividend receivable 3,275,227.72
Other account receivable 17,691,606.45 149,846,931.94 19,220,669.32 97,072,583.33
Financial assets purchased under agreements
to resell
Inventories 249,665,411.95 202,682,867.05 198,762,663.23 146,279,805.97
Non-current assets due within 1 year
Other current assets
Total current assets 1,028,917,568.90 931,054,499.85 793,066,409.57 705,731,037.10
Non-current assets:
Loans and advance
Available for sale financial assets
Held to maturity investments
Long-term account receivable
Long-term equity investment 11,378,382.63 49,533,405.95 11,378,382.63 49,533,405.95
Investing property 4,988,600.50 4,988,600.50 5,116,012.50 5,116,012.50
Fixed asset 751,964,882.28 700,583,816.22 778,661,093.09 728,578,456.14
Project in construction 403,812,783.22 395,396,885.77 287,858,631.17 281,349,294.67
Engineering material
Fixed asset disposal
Bearer biological asset
Oil assets
Intangible assets 148,472,052.36 135,006,744.09 150,488,348.86 136,774,286.23
Development expense
GoodwillLong-term expense to be apportioned
Deferred tax assets 12,501,729.59 10,146,664.99 12,501,729.59 10,146,664.99
Other non-current assets
Total of non-current assets 1,333,118,430.58 1,295,656,117.52 1,246,004,197.84 1,211,498,120.48
Total assets 2,362,035,999.48 2,226,710,617.37 2,039,070,607.41 1,917,229,157.58
Current liabilities:
Short-term borrowings 246,341,514.63 205,000,000.00 39,899,274.54 35,000,000.00
Borrowing from Central Bank
Deposits and due to banks and other financial
institutions
Placements from banks and other financial
institutions
Transaction financial liabilities
Notes payable 20,000,000.00 20,000,000.00 5,000,000.00 5,000,000.00
Account payable 101,836,988.84 78,556,154.63 116,941,353.00 66,229,596.12
Account received in advance 35,254,746.27 22,378,043.99 30,731,258.63 18,309,739.93
Financial assets sold under agreements to
repurchase
Handling charges and commission payable
Employee’s compensation payable 6,103,538.57 3,149,113.09 17,231,898.45 13,295,096.69
Tax payable -11,679,001.66 -2,127,420.55 -4,458,696.03 2,208,088.91
Interest payable
dividend payable 349,463.30 349,463.30 349,463.30 349,463.30
Other account payable 46,135,229.62 24,814,680.13 39,413,834.96 27,182,609.39
Due to reinsurers
Insurance contract reserve
Customer deposits
Amount payables under security underwriting
Non-current liabilities due within 1 year 160,000,000.00 160,000,000.00 95,000,000.00 95,000,000.00
Other current liabilities
Total current liabilities 604,342,479.57 512,120,034.59 340,108,386.85 262,574,594.34
Non-current liabilities:
Long-term borrowings 624,560,000.00 624,560,000.00 579,560,000.00 579,560,000.00
Debentures payable
Long-term payables 9,840,000.00 9,840,000.00 9,840,000.00 9,840,000.00
Specific purpose account payables
Provisions for contingent liabilities
Deferred tax liabilities
Other non-current liabilities 9,209,677.27 6,990,000.00 9,209,677.27 6,990,000.00
Total non-current liabilities 643,609,677.27 641,390,000.00 598,609,677.27 596,390,000.00
Total liabilities 1,247,952,156.84 1,153,510,034.59 938,718,064.12 858,964,594.34
Owner’s equity (or shareholders’ equity)
Paid-in capital (or share capital) 593,923,220.00 593,923,220.00 593,923,220.00 593,923,220.00Capital surplus 271,591,478.35 268,447,075.77 271,591,478.35 268,447,075.77
Less: Treasury Stock
Specific reserves 22,419,101.70 14,025,023.53 20,689,819.99 13,898,173.74
Reserved fund 72,736,287.77 72,736,287.77 72,736,287.77 72,736,287.77
General risk provision
Retained earnings 141,456,553.93 124,068,975.71 129,046,856.85 109,259,805.96
Foreign exchange difference
Total owners' equity attributable to holding
company
1,102,126,641.75 1,073,200,582.78 1,087,987,662.96 1,058,264,563.24
Minority interest 11,957,200.89 12,364,880.33
Total owner’s equity 1,114,083,842.64 1,073,200,582.78 1,100,352,543.29 1,058,264,563.24
Total liabilities and owner’s equity 2,362,035,999.48 2,226,710,617.37 2,039,070,607.41 1,917,229,157.58
Legal Representative: Li Zuorong
Person in Charge of Accounting Work: He Xusong
Person in Charge of Accounting Firm: He Xuesong
Income Statement
Prepared by Hubei Sanonda Co., Ltd. Jan.-Jun. 2010 Unit: (RMB) Yuan
In current period The same period of last year
Items
Consolidation Parent company Consolidation Parent company
I. Total operation income 796,268,170.38 591,856,639.00 985,283,990.84 705,509,417.65
Including: Sales income 796,268,170.38 591,856,639.00 985,283,990.84 705,509,417.65
Interest income
Premium income
Handling charges and commission
income
II. Total operation cost 775,618,803.95 573,690,008.46 930,247,286.84 657,640,802.04
Including: Cost of sales 680,370,049.06 507,925,855.72 810,536,655.99 577,862,532.97
Interest expenses
Handling charges and commission
expenses
Surrender value
Net amount of claims
Net amount of insurance contract reserve
withdrawn
Expenditure on policy dividends
Reinsurance premium expenses
Taxes and associate charges 1,144,465.00 713,202.39 500,904.05 15,768.03
Selling expenses 26,647,718.10 16,282,916.09 39,341,923.32 23,491,390.74
Administrative expenses 32,526,534.32 18,618,938.83 46,739,882.33 28,194,258.22
Financial expenses 24,490,626.82 23,311,004.31 27,537,885.61 25,336,610.79
Impairment loss 10,439,410.65 6,838,091.12 5,590,035.54 2,740,241.29
Add: gain from change in fair value (“-” means 0.00 0.00 2,196,656.32 2,196,656.32loss)
Gain from investment (“-” means loss) 0.00 3,275,227.72 1,440,000.00 11,831,698.11
Including: income form investment in
affiliated enterprise and joint ventures
0.00 0.00
Foreign exchange difference (“-” means loss)
III. Operation profit (“-” means loss) 20,649,366.43 21,441,858.26 58,673,360.32 61,896,970.04
Add: non-operation income 846,398.70 427,402.03 2,659,803.07 103,229.34
Less: non-business expense 574,306.06 30,205.25 1,035,555.33 863,633.53
Including: loss from non-current asset disposal
IV. Total profit (“-” means loss) 20,921,459.07 21,839,055.04 60,297,608.06 61,136,565.85
Less: income tax expense 8,989,587.07 7,029,885.29 15,073,885.85 12,686,216.93
V. Net profit (“-” means loss) 11,931,872.00 14,809,169.75 45,223,722.21 48,450,348.92
Attributable to owners of parent company 12,409,697.08 14,809,169.75 44,124,619.58 48,450,348.92
Minority interest -477,825.08 0.00 1,099,102.63
VI. Earnings per share
(I) Basic earnings per share 0.0209 0.00 0.0743
(II) Diluted earnings per share 0.0209 0.00 0.0743
VII. Other composite income
VIII. Total composite income 11,931,872.00 14,809,169.75 45,223,722.21 48,450,348.92
Attributable to owners of parent company 12,409,697.08 14,809,169.75 44,124,619.58 48,450,348.92
Minority interest -477,825.08 0.00 1,099,102.63 0.00
Legal Representative: Li Zuorong
Person in Charge of Accounting Work: He Xusong
Person in Charge of Accounting Firm: He Xuesong
Cash Flow Statement
Prepared by Hubei Sanonda Co., Ltd. Jan.-Jun. 2010 Unit: (RMB) Yuan
In current period The same period of last year
Items
Consolidation Parent company Consolidation Parent company
I. Cash flows from operating activities:
Cash received from sale of commodities and
rendering of service
618,647,778.35 442,786,395.24 815,640,461.00 629,911,544.57
Net increase of deposits from customers and
due from banks
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 business
Net increase of savings of policy holders and
investment fund
Net increase of disposal of tradable financialassets
Cash received from interest, handling charges
and commissions
Net increase of borrowed inter-bank funds
Net increase of buy-back funds
Tax refunds received 23,272,273.76 20,299,627.42 7,466,937.10 4,313,672.06
Other cash received relating to operating
activities
26,848,146.80 13,359,810.56 22,779,215.89 27,375,736.82
Subtotal of cash inflows from operating
activities
668,768,198.91 476,445,833.22 845,886,613.99 661,600,953.45
Cash paid for purchase of commodities and
reception of service
619,408,167.39 449,480,880.80 584,292,545.59 419,080,706.47
Net increase of customer lending and advance
Net increase of funds deposited in the central
bank and amount due from banks
Cash for paying claims of the original
insurance contract
Cash for paying interest, handling charges and
commissions
Cash for paying policy dividends
Cash paid to and for employees 56,127,454.85 44,919,708.43 54,889,480.84 34,881,129.75
Various taxes paid 17,227,505.22 12,239,650.61 76,265,886.56 62,340,271.73
Other cash paid relating to operating activities 69,959,564.60 35,341,552.27 70,508,592.10 49,750,063.78
Subtotal of cash outflows from operating
activities
762,722,692.06 541,981,792.11 785,956,505.09 566,052,171.73
Net cash flows from operating activities -93,954,493.15 -65,535,958.89 59,930,108.90 95,548,781.72
II. Cash Flows from investment activities:
Cash received from disposal of investments 0.00 0.00 3,036,457.50 3,036,457.50
Cash received from investment income 0.00 0.00
Net cash received from disposal of fixed
assets, intangible assets and other long-term
assets
63,686.00 15,870.00 3,569,562.00 29,853.00
Net cash received from disposal of subsidiary
or other business units
10,000,000.00 10,000,000.00
Other cash received relating to investment
activities
238,473.04 238,473.04 120,168.76 87,561.13
Subtotal of cash inflows from investment
activities
10,302,159.04 10,254,343.04 6,726,188.26 3,153,871.63
Cash paid to acquire fixed assets, intangible
assets and other long-term assets
135,623,216.11 126,002,188.60 201,634,779.90 176,882,084.58
Cash paid for investment 0.00 0.00 15,600,000.00
Net increase of pledged loans
Net cash paid to acquire subsidiaries and otherbusiness units
Other cash paid relating to investment
activities
257,074.94 257,074.94 1,661,895.27 1,462,536.37
Subtotal of cash outflows from investment
activities
135,880,291.05 126,259,263.54 203,296,675.17 193,944,620.95
Net cash flows from investment activities -125,578,132.01 -116,004,920.50 -196,570,486.91 -190,790,749.32
III. Cash flows from financing activities:
Cash received from absorbing investment 0.00 0.00 4,900,000.00
Including: Cash received by subsidiaries
from investment of minority interest
0.00 0.00 4,900,000.00
Cash received from borrowings 436,293,178.92 380,000,000.00 605,945,661.86 435,000,000.00
Cash received from issuance of bonds
Other cash received relating to financing
activities
3,187,230.14 2,790,350.37 3,722,549.10 3,431,828.17
Subtotal of cash inflows from financing
activities
439,480,409.06 382,790,350.37 614,568,210.96 438,431,828.17
Cash paid to repay loans 119,850,938.83 100,000,000.00 324,899,516.48 212,000,000.00
Cash paid for interest expenses and
distribution of dividends or profit
23,234,524.47 21,953,592.63 52,299,175.23 48,720,492.40
Including: dividends or profit paid to
minority shareholders by subsidiaries
0.00 0.00 1,154,633.12
Other cash payments relating to financing
activities
7,840,763.02 6,786,842.86 6,487,606.10 5,591,432.98
Sub-total of cash outflows from financing
activities
150,926,226.32 128,740,435.49 383,686,297.81 266,311,925.38
Net cash flows from financing activities 288,554,182.74 254,049,914.88 230,881,913.15 172,119,902.79
IV. Effect of foreign exchange rate changes on
cash and cash equivalents
V. Net increase in cash and cash equivalents 69,021,557.58 72,509,035.49 94,241,535.14 76,877,935.19
Add: beginning balance of cash and cash
equivalents
474,460,623.29 424,584,953.40 562,832,319.76 490,154,426.30
VI. Closing balance of cash and cash equivalents 543,482,180.87 497,093,988.89 657,073,854.90 567,032,361.49
Legal Representative: Li Zuorong
Person in Charge of Accounting Work: He Xusong
Person in Charge of Accounting Firm: He XuesongConsolidated Statement of Changes in Owners’ Equity
Prepared by Hubei Sanonda Co., Ltd. For the first half of 2010 Unit: (RMB) Yuan
Amount for the current period Amount of the same period 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:
treasur
y stock
Specifi
c
reserve
s
Surplus
public
reserve
Genera
l risk
reserve
Retaine
d
profits
Others
Minorit
y
interest
Total
owners’
equity
Paid-in
capital
(or
share
capital)
Capital
reserve
Less:
treasur
y stock
Specifi
c
reserve
s
Surplus
public
reserve
Genera
l risk
reserve
Retaine
d
profits
Others
Minorit
y
interest
Total
owners’
equity
I. Balance at the end of last
year
593,923,2
20.00
271,591,
478.35
20,689,
819.99
72,736,
287.77
129,046
,856.85
12,364,
880.33
1,100,35
2,543.29
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
8,681.59
Add: change of accounting
policy
0.00
Correction of errors in
previous periods
Others
II. Balance at the beginning of
this year
593,923,2
20.00
271,591,
478.35
20,689,
819.99
72,736,
287.77
129,046
,856.85
12,364,
880.33
1,100,35
2,543.29
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
8,681.59
III. Increase/ decrease of
amount in this year (“-” means
decrease)
1,729,2
81.71
12,409,
697.08
-407,67
9.44
13,731,2
99.35
14,325,
046.61
-886,32
5.49
13,438,7
21.12
(I) Net profit
12,409,
697.08
-477,82
5.08
11,931,8
72.00
44,124,
619.58
1,099,1
02.63
45,223,7
22.21
(II) Other composite income
Subtotal of (I) and (II)
12,409,
697.08
-477,82
5.08
11,931,8
72.00
44,124,
619.58
1,099,1
02.63
45,223,7
22.21(III) Capital input and
reduction by owners
1,960,0
00.00
1,960,00
0.00
1. Capital input of owners
1,960,0
00.00
1,960,00
0.00
2. Amount of stock payment
included in owners’ equity
3. Others
(IV) Profit distribution
-29,799,
572.97
-3,945,
428.12
-33,745,
001.09
1. Withdrawing surplus public
reserve
2. Withdrawing general risk
reserve
3. Distribution to owners
(shareholders)
-29,799,
572.97
-3,945,
428.12
-33,745,
001.09
4. Others
(V) Internal carrying forward
of owners’ equity
1. New increase of capital (or
share capital) from capital
reserves
2. Converting surplus reserves
to capital (or share capital)
3. Surplus reserves make up
losses
4. Others(VI) Specific reserves
1,729,2
81.71
70,145.
64
1,799,42
7.35
1. Appropriated in current
period
8,205,6
54.72
145,40
8.36
8,351,06
3.08
2. Used in current period
6,476,3
73.01
75,262.
72
6,551,63
5.73
IV. Balance at the end of this
period
593,923,2
20.00
271,591,
478.35
22,419,
101.70
72,736,
287.77
141,456
,553.93
11,957,
200.89
1,114,08
3,842.64
593,923
,220.00
271,719,
841.74
16,364,
992.87
73,514,
866.46
157,360
,997.31
16,943,
484.33
1,129,82
7,402.71
Legal Representative: Li Zuorong
Person in Charge of Accounting Work: He Xusong
Person in Charge of Accounting Firm: He Xuesong
Statement of Changes in Owners’ Equity of Parent Company
Prepared by Hubei Sanonda Co., Ltd. For the first half of 2010 Unit: (RMB) Yuan
Amount for the current period Amount of the same period of last year
Items
Paid-in
capital (or
share capital)
Capital
reserve
Less:
treasury
stock
Specific
reserves
Surplus
public
reserve
General
risk
reserve
Retained
profit
Total
owners’
equity
Paid-in capital
(or share
capital)
Capital
reserve
Less:
treasury
stock
Specific
reserves
Surplus
public
reserve
General
risk
reserve
Retained
profit
Total
owners’
equity
I. Balance at the end of last
year
593,923,220.
00
268,447,0
75.77
13,898,17
3.74
72,736,28
7.77
109,259,8
05.96
1,058,264
,563.24
593,923,220.00
268,447,0
75.77
16,364,99
2.87
73,514,86
6.46
136,824,1
91.70
1,089,074
,346.80
Add: change of accounting
policy
Correction of errors in
previous periods
Others
II. Balance at the beginning of 593,923,220. 268,447,0 13,898,17 72,736,28 109,259,8 1,058,264 593,923,220.00 268,447,0 16,364,99 73,514,86 136,824,1 1,089,074this year 00 75.77 3.74 7.77 05.96 ,563.24 75.77 2.87 6.46 91.70 ,346.80
III. Increase/ decrease of
amount in this year (“-” means
decrease)
126,849.7
9
14,809,16
9.75
14,936,01
9.54
18,650,77
5.95
18,650,77
5.95
(I) Net profit
14,809,16
9.75
14,809,16
9.75
48,450,34
8.92
48,450,34
8.92
(II) Other composite income 0.00
Subtotal of (I) and (II)
14,809,16
9.75
14,809,16
9.75
48,450,34
8.92
48,450,34
8.92
(III) Capital input and
reduction by owners
0.00
1. Capital input of owners 0.00
2. Amount of stock payment
included in owners’ equity
0.00
3. Others 0.00
(IV) Profit distribution 0.00
-29,799,5
72.97
-29,799,5
72.97
1. Withdrawing surplus public
reserve
0.00
2. Withdrawing general risk
reserve
0.00
3. Distribution to owners
(shareholders)
0.00
-29,799,5
72.97
-29,799,5
72.97
4. Others 0.00
(V) Internal carrying forward
of owners’ equity
0.001. New increase of capital (or
share capital) from capital
reserves
0.00
2. Converting surplus reserves
to capital (or share capital)
0.00
3. Surplus reserves make up
losses
0.00
4. Others 0.00
(VI) Specific reserves
126,849.7
9
126,849.7
9
1. Appropriated in current
period
4,433,444
.81
4,433,444
.81
2. Used in current period
4,306,595
.02
4,306,595
.02
IV. Balance at the end of this
period
593,923,220.
00
268,447,0
75.77
14,025,02
3.53
72,736,28
7.77
124,068,9
75.71
1,073,200
,582.78
593,923,220.00
268,447,0
75.77
16,364,99
2.87
73,514,86
6.46
155,474,9
67.65
1,107,725
,122.75
Legal Representative: Li Zuorong
Person in Charge of Accounting Work: He Xusong
Person in Charge of Accounting Firm: He XuesongHubei Sanonda Co., Ltd
Notes to Financial Statements
For the First Half Year 2010
(The following amount is expressed in RMB unless otherwise special explanation)
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 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 for trading 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 593,923,220.
The registration address of the Company is located at No. 93, Beijing East Road,
Jingzhou, Hubei. Legal representative is Li Zuorong. Share abbreviations are Sanonda
A and Sanonda B with stock code of 000553 and 200553 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 (promulgated by the Ministry of Finance on 15 Feb.
2006) and reflect the Company’s financial status, operating results and cash flows in
true and complete.
III. Preparation basis of financial statement
With going-concern assumption as the basis, the Company prepares its financial
statement in light of the actual transactions matters, as well as relevant provisions of
the accounting standard for business enterprise promulgated by the Ministry of
Finance of PRC on 15 Feb. 2006 and application guide, and the following primary
accounting policies and accounting estimates.
IV. Major accounting policies and accounting estimates
1. Fiscal period
The Company’s fiscal year is from Jan. 1 to Dec. 31 of 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 adopted for measurement of financial
statement items other than such items as tradable financial assets, financial assets
available for sales, business combination 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 orinvolving 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
of China 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 liabilitiesinitially 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 theconsideration 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
provisionThe 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.
(6) Termination recognition of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in
part may the recognition of the financial liability be terminated in all or partly.
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 due to the death of the debtor
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:
① An independent impairment test shall be carried out on the accounts receivable
with significant single amounts (the balance is over RMB 5 million) and ones with
insignificant singles amounts but with significant credit risk, 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.
② Other receivables other than the above two accounts receivable 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 such 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% of accounts receivable for aging with 5
years or over.
③ Where there are conclusive evidences shows that 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 lowerin 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 changed the purpose of the real estate, such as becomes to be
used for its own, it shall convert the investment real estate to other assets.
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 Annual 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 inprogress 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 assets
The 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 bereliably 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 limited 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 impairmentAt 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. Measurement of Long-term Equity Investments
(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 significantinfluence 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 not participate 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. 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
of the 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 orproduction 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 the
intended 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. 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 andemployee 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. Measurement of Government Subsidies
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. 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 flow into 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, thecost incurred is included in the current profits and losses, and no revenue from the
providing of labor services may be recognized.
③Method 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. Measurement of Income Tax
Income tax includes the current income tax and deferred income tax. The income tax
of the current period and deferred income tax shall be treated as income tax expense
and shall be recorded into the profits and losses of the current period except that
goodwill incurred for business combination or deferred income tax related to the
transactions or events directly recorded in the owner’s equity should be recorded into
the owner’s equity.
The Company shall, on the balance sheet date, recognize deferred income tax in the
light of temporary difference between the book amount of the assets or liabilities and
its tax base by employing the balance sheet approach.
(1) Recognition of deferred income tax assets
As for any deductible temporary difference, deductible loss or tax deduction that can
be carried forward to the next year, the Company shall recognize the corresponding
deferred income tax assets arising from a deductible temporary difference, deductible
loss or tax deduction to the extent that the amount of future taxable income to be
offset by the deductible temporary difference, deductible loss or tax deduction to be
likely obtained. The deductible temporary difference occurred during the following
transactions shall not be recognized as deferred income tax assets:
① This transaction is not business combination, and at the time of transaction, the
accounting profits will not be affected, nor will be the taxable amount be affected.
② Where the deductible temporary difference related to the investments of the
subsidiary companies, associated enterprises and joint enterprises can meet the
following requirements simultaneously, the Company shall recognize the
corresponding deferred income tax assets: a. the temporary differences are likely to be
reversed in the expected future; and b. it is likely to acquire any amount of taxable
income tax that may be used for making up the deductible temporary differences.
(2) Recognition of deferred income tax liabilities
Except for the taxable temporary differences occurred during the following
transactions, the Company shall recognize the deferred income tax liabilities arising
from all taxable temporary differences:
① The initial recognition of business reputation, or the initial recognition of assets or
liabilities arising from the following transactions which are simultaneously featuredby the following: a. the transaction is not business combination; and b. at the time of
transaction, the accounting profits will not be affected, nor will the taxable amount be
affected.
② As for the taxable temporary differences related to the investment of subsidiary
companies, associated enterprises and joint enterprises, the Company can control the
time of the reverse of temporary difference and the temporary differences are unlikely
to be reversed in the excepted future.
On the balance sheet date, the deferred income tax assets and deferred income tax
liabilities shall be at the tax rate applicable to the period during which the assets are
expected to be recovered or the liabilities are expected to be settled, and reflect the
effect of the expected asset recovery or liability settlement method on the balance
sheet date on the income taxes.
The book amount of deferred income tax assets shall be reexamined on the balance
sheet date. If it is unlikely to obtain sufficient taxable income taxes to offset the
benefit of the deferred income tax assets, the book amount of the deferred income tax
assets shall be written down. When it is probable to obtain sufficient taxable income
taxes, such write-down amount shall be subsequently reversed.
V. Business combination and consolidated financial statement
(I) Accounting treatment for business combination under the same control and under
the different control
1. Business combination under the same control
As for the business combination under the same control, the assets and liabilities that
the Company, as the combining party, obtains in a business combination shall be
measured on the basis of their book amount in the combined party on the combining
date. For long-term equity investment formed by acquisition of majority interest under
the same control, its initial investment cost shall be measured on the basis of the
Company’s attributable share of the carrying value of the combined party’s owner’s
equity on the combining date. For details of relevant accounting treatment, please
refer to Note IV. 13. The assets and liabilities that the Company obtains in a
consolidation by merger under the same control shall be recorded on the basis of their
original book amount in the combined party. The balance between the carrying
amount of the net assets obtained by the Company and the carrying amount of the
consideration paid by the Company (or the total par value of the shares issued), the
capital reserve shall be adjusted. If the capital reserve is not sufficient to be offset, the
retained earnings shall be adjusted.
The direct cost occurred for the business combination of the Company, as the
combining party, including the expenses for audit, assessment and legal services, shall
be recorded into the profits and losses of the current period. The bonds issued for a
business combination or the handling fees, commissions and other expenses for
assuming other liabilities shall be recorded into the amount of initial measurement of
the bones or other debts. The handling fees, commissions and other expenses for the
issuance of equity securities for the business combination shall be credited against the
surplus of equity securities; if the surplus is not sufficient, the retained earnings shallbe offset.
2. Business combination not under the same control
As for the business combination not under the same control, the combination costs
shall be the summation of the fair values, on the acquisition date, of the assets paid,
the liabilities incurred or assumed and the equity securities issued by the Company in
exchange for the control on the acquiree and all relevant direct costs.
For long-term equity investment formed by acquisition of majority interest not under
the same control, the Company shall regard cost of business combination (excluding
cash dividend and profit received by the acquiree) recognized on the acquisition date
as its initial investment cost against the long-term equity investment of the acquiree.
The identifiable assets and liabilities of the acquiree, which meet the recognition
conditions and the Company obtains in a consolidation by merger not under the same
control, shall be recognized as assets and liabilities of the Company on the acquisition
date in the light of the fair value. Where the Company obtains the control right or all
identifiable assets and liabilities of the acquiree with non-monetary assets as the
consideration, the balance between the fair value of relevant non-monetary assets on
the acquisition date and its book value shall be recognized as profits and losses from
disposal of assets and recorded in the consolidated income statement of the current
period.
In the business combination not under the same control, the positive balance between
the combination costs and the fair value of the identifiable net assets the Company
obtains from the acquiree shall be recognized as business reputation. Under the
consolidation of merger, the said balance shall be recognized as business reputation in
the separate financial statement of parent company; while under the acquisition of
majority interest, the said balance shall be listed as business reputation in the
consolidated financial statement.
The balance that the combination costs are less than the fair value of the identifiable
net assets the Company obtains from the acquiree shall be recorded into the profits
and losses of the current period (non-operating income). Under the consolidation of
merger, the said balance shall be recorded in separate income statement of parent
company at the current period; while under the acquisition of majority interest, the
said balance shall be recorded in the consolidated income statement of the current
period.
(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 bondsand 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 are 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.
(III) Subsidiaries of the Company
1. The subsidiaries obtained by the Company through establishment or investment
Name of subsidiaries Type Registration Place Business
nature
Registered
capital
(RMB’0000)
Business scope Actual amount of
contribution at the
period-end
Sanonda (Jingzhou)
Pesticide & Chemical
Co., Ltd.
Holding subsidiary
10 Xihuan Road, Jingzhou
District
Manufacturing 3,000
Production of pesticide
and intermediate
26,500,000.00
Hubei Sanonda Foreign
Trading Co., Ltd.
Holding subsidiary
1 Beijing East Road,
Jingzhou
Trading 1,000
Import and export of
pesticide and intermediate
9,000,000.00
Hubei Sanonda Tianmen
Agrochemical Co., Ltd.
Holding subsidiary
179 Gudu Av., Zaoshi,
Tianmen
Manufacturing 3,000
Production and sale of
pesticide
18,445,023.32
Jingzhou Longhua
Petrochemicals Co., Ltd.
Holding subsidiary
95 Beijing East Road,
Jingzhou
Manufacturing 500
Production and sale of
chemical products
3,250,000.00
Jingzhou Sanonda Aifusi
Chemical Industry Co.,
Ltd.
Holding subsidiary
93 Beijing East Road,
Jingzhou
Manufacturing 600
R&D, production and sale
of fine chemical products
8,864,700.30
Jingzhou Lingxiang
Chemical Industry Co.,
Ltd.
Holding subsidiary
Nongji Road, Yaowan
Branch, Sha City Farm,
Jingzhou Development Zone
Manufacturing 1,000
R&D and sale of chemical
products
5,100,000.00
(Con.)Other essential
investment
The
proportion of
holding
shares
The
proportion
of voting
rights
Included in
consolidated
statement
Minority interests
Deductible minority
interests
Balance of parent company’s equity after
deducting the difference that loss of
minority interests exceed equity obtained
by minority shareholders
88.33% 88.33% Yes 476,032.81
90.00% 90.00% Yes 1,554,443.30
98.50% 98.50% Yes 517,183.11
65.00% 65.00% Yes 5,115,199.50
95.10% 95.10% Yes 445,870.80
51.00% 51.00% Yes 3,848,471.37
2. The subsidiaries obtained by the Company through business combination under the
same control
There is no subsidiary through business combination under the same control.
3. The subsidiaries obtained by the Company through business combination not under
the same control
There is no subsidiary through business combination not under the same control.
(IV) In the reporting period, the consolidated scope of the Company remained
unchanged.
VI. Tax
1. Income tax
Income tax shall be paid in light of the amount of taxable income and tax rate
applicable to the current period. Income tax rate is 25%.
2. VAT
(1) VAT on sales for pesticides that are produced by the Company shall be measured
at tax rate of 13%, such pesticides include orthene, paraquate, glyphosate, chlorofos,
DDVP, triazophos and imidacloprid, ect.
(2) VAT on sales for chemical products of the Company shall be measured at tax rate
of 17%, such chemical products include spermine, liquid caustic soda, liquefied
chlorine gas and hydrochloric acid.
(3) VAT for export products shall be recorded in the light of the policy of “Tax
exemption, tax deduction and tax rebate”.
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 circulating tax
payable of the current period.
5. Extra charges for education
Extra charges for education shall be paid at 3% of circulating 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 prior-period accounting errors
There exists no correction of prior-period accounting errors in the reporting period.
VIII. Notes to main items of consolidated financial statements
Note: The beginning of period (opening) refers to 31 Dec. 2009, the end of period
(closing) refers to 30 Jun. 2010; last period refers to Jan. to Jun. 2009, current period
refers to Jan. to Jun. 2010.
1. Monetary fund
(1) By categories
Closing balance Opening balance
Items Original
currency
Rate of
exchange
RMB
Original
currency
Rate of
exchange
RMB
Cash 3,872.44 6,067.14
Of which: RMB 3,872.44 1.0000 3,872.44 6,067.14 1.0000 6,067.14
Bank deposit 543,478,308.43 474,454,556.15
Of which: RMB 531,019,675.55 1.0000 531,019,675.55 472,852,325.78 1.0000 472,852,325.78
USD 1,834,607.03 6.7909 12,458,632.88 234,649.01 6.8282 1,602,230.37
Other
Of which: RMB
Total 543,482,180.87 474,460,623.29
(2) 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 collection.
(3) Closing balance of monetary fund increased by 14.55% compared with the
opening balance, which was caused by increase of loans during the reporting period.
2. Notes receivable(1) By categories
Type of notes Closing balance Opening balance
Bank acceptance bill 31,645,432.18 10,746,710.09
Trade acceptance draft
Total 31,645,432.18 10,746,710.09
(2) As at the period-end, the Company has no pledged notes receivable
3. Accounts receivable
(1) By category
Closing balance Opening balance
Categories
Amount Proportion
Provision
for bad
debt
Withdrawal
proportion
Amount Proportion
Provision
for bad
debt
Withdrawal
proportion
Significant
single amounts 77,325,912.30 36.92% 11,346,936.48 14.67% 22,573,314.79 22.67% 8,609,306.60 38.14%
Insignificant
single amounts
but with
significant credit
risk
9,833,469.11 4.70% 9,833,469.11 100.00% 10,163,469.11 10.20% 10,163,469.11 100.00%
Other
insignificant 122,258,723.54 58.38% 16,346,420.03 13.37% 66,871,717.76 67.13% 14,978,463.72 22.40%
Total 209,418,104.95 100.00% 37,526,825.62 17.92% 99,608,501.66 100.00% 33,751,239.43 33.88%
Note: Accounts receivable with insignificant single amounts but with significant
credit risk is accounts receivable with larger recoverable risk recognized in
accordance with collection work of the Company to debtors and daily businesses
occurred, and credit of debtors.
(2) Explanation on bad debt provisions for accounts receivable with significant single
amounts or insignificant but being conducted an independent impairment test on:
Contents of accounts receivable Closing balance Amount of bad
debt
Withdrawal
proportion
Reasons
1. Significant single amounts
Goods payment receivable by Hubei Sanonda
Foreign Trade Corporation from its customer
7,874,358.80 7,874,358.80 100.00%
The customer has applied for bankruptcy.
Possibility of recovering the account is faint and a
bad debt provision has thus been withdrawn in
full.
Goods payment receivable by Hubei Sanonda
Foreign Trade Corporation from its customer
69,451,553.50 3,472,577.68 5.00%
There existed abnormity in the customer’s
business. A bad debt provision has thus beenContents of accounts receivable Closing balance Amount of bad
debt
Withdrawal
proportion
Reasons
withdrawn according to policies.
2. Insignificant single amounts but being conducted an independent impairment test on
Goods payment receivable by the Company from its
domestic customer
8,172,080.39 8,172,080.39 100%
There has been no business contact between the
Company and the customer. And it has not been
paid after several reminders. Possibility of
recovering the account is estimatedly faint. And a
bad debt provision has thus been withdrawn in
full.
Goods payment receivable by Hubei Sanonda
Tianmen Agrochemical Co., Ltd. from its domestic
customer
1,661,388.72 1,661,388.72 100%
A case has been filed for the customer’s employee
running off with money. Possibility of recovering
the account is estimatedly faint. And a bad debt
provision has thus been withdrawn in full.
Total 87,159,381.41 21,180,405.59
(3) Classified according to credit risk (account aging)
Closing balance Opening balance
Aging
Balance Proportion
Provision for
bad debt
Withdrawal
proportion
Balance Proportion
Provision for
bad debt
Withdrawal
proportion
Within 1 year
(including 1
year) 178,930,142.20 85.45% 8,946,507.11 5.00%
67,290,403.71 67.56% 3,340,914.16 4.96%
1-2 years
(including 2
years) 2,178,395.05 1.04% 737,772.45 33.87%
2,181,545.05 2.19% 737,929.95 33.83%
2-3 years
(including 3
years) 9,738,975.76 4.65% 9,450,487.35 97.04%
9,735,825.76 9.77% 9,450,329.85 97.07%
3-4 years
(including 4
years) 4,571,430.28 2.18% 4,471,644.57 97.82%
4,771,430.28 4.79% 4,671,644.57 97.91%
4-5 years
(including 5
years) 1,201,136.54 0.57% 1,122,389.02 93.44%
1,331,271.74 1.34% 1,252,395.78 94.08%
Over 5 years 12,798,025.12 6.11% 12,798,025.12 100.00% 14,298,025.12 14.35% 14,298,025.12 100.00%
Total 209,418,104.95 100.00% 37,526,825.62 17.92%
99,608,501.66 100.00% 33,751,239.43 33.88%(4) Accounts receivable cancelled actually in the reporting period
Name Amount Nature
Reason for
offset
Caused by
related-party
transaction or not
Xinjiang Talimu Oilfield Construction
Engineering Co., Ltd.
6,480.09 Payment for
goods
Irrecoverable No
Total 6,480.09
(5) No amount due from shareholders who hold 5% or more of the voting rights of the
Company is included in the accounts receivable.
(6) At the end of period, the top five accounts receivable totaled RMB 52,325,186.62,
including RMB 44,450,827.82 within one year, RMB 7,874,358.80 within two to
three years, taking up 24.99% of total accounts receivable.
(7) There is no accounts receivable due from related parties.
4. Other receivables
(1) By categories
Closing balance Opening balance
Categories
Amount Proportion
Provision for
bad debt
Withdrawal
proportion
Amount Proportion
Provision for
bad debt
Withdrawal
proportion
Significant single
amounts 12,460,716.95 52.37% 10,000,000.00 39.49%
Insignificant single
amounts but with
significant credit risk
82,600.00 0.35% 82,600.00 100.00% 82,600.00 0.33% 82,600.00 100.00%
Other insignificant 11,250,809.52 47.28% 6,019,920.02 53.51% 15,239,745.64 60.18% 6,019,076.32 39.50%
Total 23,794,126.47 100.00% 6,102,520.02 25.65% 25,322,345.64 100.00% 6,101,676.32 24.10%
Note: Accounts receivable with insignificant single amounts but with significant
credit risk is accounts receivable with larger recoverable risk recognized in
accordance with collection work of the Company to debtors and daily businesses
occurred, and credit of debtors.
(2) Explanation on bad debt provisions for other receivables with significant single
amounts or insignificant but being conducted an independent impairment test on
Contents of receivables
Closing
balance
Amount of
bad debt
Withdrawal
proportion
Reasons
1. Significant single amounts
Jingzhou Municipal State Taxation
Bureau
12,460,716.95
Export rebates. And no sign of
impairment was spotted when an
impairment test was conducted on the
account.Contents of receivables
Closing
balance
Amount of
bad debt
Withdrawal
proportion
Reasons
2. Insignificant single amounts but being conducted an independent impairment test on
Individual arrears
82,600.00 82,600.00 100% Considering an old account age, the
account is estimated to be irrecoverable.
And a full-amount provision has thus
been withdrawn.
Total 12,543,316.95 82,600.00
(3) Classified by credit risk (account aging)
Closing balance Opening balance
Aging
Balance Proportion
Bad debt
provision
Withdrawal
proportion
Balance Proportion
Bad debt
provision
Withdrawal
proportion
Within 1
year
(including
1 year)
16,311,649.93 68.54% 191,433.87 1.17%
17,794,831.78 70.27% 190,590.17 1.07%
1-2 years
(including
2 years)
514,110.53 2.16% 27,918.97 5.43%
639,249.43 2.52% 31,962.47 5.00%
2-3 years
(including
3 years)
286,926.30 1.21% 14,176.94 4.94%
202,668.80 0.80% 10,133.44 5.00%
3-4 years
(including
4 years)
503,594.54 2.12% 29,187.53 5.80%
507,750.46 2.01% 29,187.53 5.75%
4-5 years
(including
5 years)
434,434.17 1.83% 96,391.71 22.19%
434,434.17 1.72% 96,391.71 22.19%
Over 5
years
5,743,411.00 24.14% 5,743,411.00 100.00%
5,743,411.00 22.68% 5,743,411.00 100.00%
Total 23,794,126.47 100.00% 6,102,520.02 25.65% 25,322,345.64 100.00% 6,101,676.32 24.10%
(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) Top five parties in other receivables as at period-endName of party
Relation with the
Company
Amount Age
Proportion
in total
other
receivables
Jingzhou Municipal State Taxation Bureau Non-related party 12,460,716.95 Within 1 year 52.37%
Shantou Piyue Plastic Co., Ltd. Non-related party 3,125,000.00 Over 5 years 13.13%
China Export & Credit Insurance Corporation, Wuhan
Branch
Non-related party 681,410.00 Within 1 year 2.86%
Hubei Jingzhou Shashi Agricultural Production Materials
Co., Ltd.
Non-related party 548,500.00 Within 1 year 2.31%
Jingzhou Municipal Administration Bureau of Work
Safety and Supervise
Non-related party 300,000.00 4-5 years 1.26%
Total 17,115,626.95 71.93%
(6) There are no receivables from related parties in other receivables.
5. Prepayment
(1) By aging
Closing balance Opening balance
Aging Balance Proportion Bad debt
provision
Withdrawal
proportion
Balance Proportion Bad debt
provision
Withdrawal
proportion
Within 1
year
(including
1 year) 15,562,277.51 98.07% 1,172,374.15 7.53% 24,151,872.17 95.28% 1,130,716.05 4.68%
1-2 years
(including
2 years) 35,896.80 0.23% 1,794.85 5.00% 926,134.95 3.65% 46,306.75 5.00%
2-3 years
(including
3 years) 2,965.00 0.02% 148.25 5.00% 39,220.20 0.15% 1,961.01 5.00%
Over 3
years 266,504.20 1.68% 151,668.14 56.91% 230,085.03 0.91% 149,847.13 65.13%
Total 15,867,643.51 100.00% 1,325,985.39 8.36% 25,347,312.35 100.00% 1,328,830.94 5.24%
(2) Top five entities in prepayment
Name of entity Relation with
the Company
Amount Age Reason for
unsettlement
Shaanxi Yulin Natural Gas Chemical Industry Non-related 3,169,193.60 Within 1 year Goods haveName of entity Relation with
the Company
Amount Age Reason for
unsettlement
Co., Ltd. supplier not been
received yet.
Yunnan Chengjiang Zhicheng Phosphate
Chemicals Co., Ltd. Non-related
supplier
2,572,800.00 Within 1 year
Goods have
not been
received yet.
Shine Star (Hubei) Biological Engineering
Co., Ltd. Non-related
supplier
1,298,564.40 Within 1 year
Goods have
not been
received yet.
PetroChina Qinghai Oilfield Marketing
Company Non-related
supplier
1,067,919.59 Within 1 year
Goods have
not been
received yet.
Shannxi Xi’an Dushanzi Petro-chemical Co.,
Ltd. Non-related
supplier
,487557.41 Within 1 year
Goods have
not been
received yet.
Total 8,983,935.00
(3) No amount due from shareholders who hold 5% or more of the voting rights of the
Company is included in the prepayment.
6. Inventory
(1) Classification of inventory
Closing balance Opening balance
Items
Book balance
Falling price
reserve
Book value Book balance
Falling price
reserve
Book value
Raw materials 36,035,352.94 2,779,590.71 33,255,762.23 52,839,474.12 2,779,590.71 50,059,883.41
Goods in process 32,147,044.64 32,147,044.64 38,605,920.77 38,605,920.77
Stock commodities 190,437,630.51 17,788,350.83 172,649,279.68 118,457,217.78 13,238,476.96 105,218,740.82
Low-value
consumption
goods 538,018.33 538,018.33 480,198.97 480,198.97
Packaging material 2,471,651.20 213,344.22 2,258,306.98 2,176,131.09 213,344.22 1,962,786.87
Goods in transit 8,817,000.09 8,817,000.09 2,435,132.39 2,435,132.39
Total 270,446,697.71 20,781,285.76 249,665,411.95 214,994,075.12 16,231,411.89 198,762,663.23
(2) Changes of inventory in this periodItems Book balance at
period-begin
Increase this period Decrease this period Book balance at
period-end
Raw materials 52,839,474.12 414,862,920.35 431,667,041.53 36,035,352.94
Goods in process 38,605,920.77 1,147,844,492.65 1,154,303,368.78 32,147,044.64
Stock commodities 118,457,217.78 812,717,173.84 740,736,761.11 190,437,630.51
Low-value
consumption goods 480,198.97 474,909.12 417,089.76 538,018.33
Packaging material 2,176,131.09 53,662,606.39 53,367,086.28 2,471,651.20
Goods in transit 2,435,132.39 12,395,800.25 6,013,932.55 8,817,000.09
Total 214,994,075.12 2,441,957,902.60 2,386,505,280.01 270,446,697.71
(3) Provisions for price falling of inventory
Decrease in this period
Item
Opening
balance
Withholding
in this period Reversal Write-off
Decrease due
to other
reasons
Total
Closing
balance
Raw
materials 2,779,590.71 2,779,590.71
Stock
commodities 13,238,476.96 6,859,227.51 2,309,353.64 2,309,353.64 17,788,350.83
Packaging
material 213,344.22 213,344.22
Total 16,231,411.89 6,859,227.51 2,309,353.64 2,309,353.64 20,781,285.76
(4) Particulars about provisions for inventory price falling
Thereunder for
withdrawing
inventory price
falling provision
Reason for recovery of
inventory price falling
provision in this period
Proportion of recovery
amount in this period in
closing balance of the
inventory item (%)
Thereunder for
withdrawing inventory
price falling provision
Raw materials net realizable value is lower
than cost
Stock commodities net realizable value is lower
than cost
Packaging materials net realizable value is lower
than cost
7. Long-term equity investment
(1) By specific items
Investee entity
Accounting
method
Initial
investment
Opening book
amount
Increase
in this
period
Decrease
in this
period
Closing book
amountInvestee entity
Accounting
method
Initial
investment
Opening book
amount
Increase
in this
period
Decrease
in this
period
Closing book
amount
Jingzhou City Commercial Bank Co.,
Ltd
Cost
method
20,000,000.00 20,000,000.00 20,000,000.00
Jingzhou Dali Industrial Co., Ltd Cost
method
1,674,600.00 1,674,600.00 1,674,600.00
Hubei Shendian Co., Ltd. Cost
method
564,000.00 564,000.00 564,000.00
Wangda Industrial Holding Co., Ltd Cost
method
550,000.00 550,000.00 550,000.00
Guangxi Zhongding Holding Co.,
Ltd
Cost
method
580,800.00 580,800.00 580,800.00
Total 24,809,400.00 23,369,400.00 23,369,400.00
(Con.)
Shareholding
ratio in investee
entity
Voting
shareholding
ratio in investee
entity
Explanation on
disagreement
between
shareholding ratio
and voting
shareholding ratio in
investee entity
Opening
impairment
reserve
Asset
impairment
reserve
withdrawn
in this
period
Closing
impairment
reserve
Cash bonus
5.15% 5.15% 11,991,017.37 11,991,017.37
33.70% 33.70%
0.60% 0.60%
2.75% 2.75%
1.41% 1.41%
Total 11,991,017.37 11,991,017.37
(2) Concerning long-term equity investments, the Company’s ability to transfer funds
to investee entities is not restricted.
8. Investment real estates
(1) Investment real estates measured by cost method
Items Opening
balance
Increase this
period
Decrease this
period
Closing
balance
I. Cost 6,010,000.00 6,010,000.00Items Opening
balance
Increase this
period
Decrease this
period
Closing
balance
House and building 6,010,000.00 6,010,000.00
II. Accumulative depreciation and
amortization 893,987.50 127,412.00 1,021,399.50
House and building 893,987.50 127,412.00 1,021,399.50
III. Accumulative provision for
impairment of investment real estates
House and building
IV. Total book value of investment real
estate 5,116,012.50 4,988,600.50
House and building 5,116,012.50 4,988,600.50
(2) Investment real estate of the Company is Hubei Building for hiring, located in
Shenzhen. The relevant property certificate is a collative warrant, part of which
belongs to the Company. Currently, the Company is unable to go through formalities
for changes of the collective warrant.
9. Fixed assets
(1) Categories of fixed assets
Items Opening balance Increase this
period
Decrease this
period
Closing balance
I. Cost 1,197,194,042.69 30,804,073.20 13,830,943.49 1,214,167,172.40
Including: House and building
326,081,232.44
19,069,419.68 193,324.94 344,957,327.18
General equipment
61,755,551.19
5,380.00 401,634.09 61,359,297.10
Special equipment
797,101,617.87
11,594,074.52 12,457,444.16 796,238,248.23
Transportation vehicle
12,255,641.19
135,199.00 778,540.30 11,612,299.89
II. Total accumulative depreciation
413,040,690.70
54,434,789.69 8,207,763.59 459,267,716.80
Including: House and building
98,164,935.24
13,620,848.34 47,277.72 111,738,505.86
General equipment
43,265,538.10
1,487,943.56 314,270.28 44,439,211.38
Special equipment
265,157,090.66
38,825,442.71 7,269,399.45 296,713,133.92
Transportation vehicle
6,453,126.70
500,555.08 576,816.14 6,376,865.64
III. Total accumulative amount of provision
for impairment of fixed assets
5,492,258.90
2,557,685.58 2,934,573.32
Including: House and building
1,090,718.63
1,090,718.63Items Opening balance Increase this
period
Decrease this
period
Closing balance
General equipment
82,995.62
82,995.62 -
Special equipment
4,318,544.65
2,474,689.96 1,843,854.69
Transportation vehicle
IV. Total book value of fixed assets
778,661,093.09
751,964,882.28
Including: House and building
226,825,578.57
232,128,102.69
General equipment
18,407,017.47
16,920,085.72
Special equipment
527,625,982.56
497,681,259.62
Transportation vehicle
5,802,514.49
5,235,434.25
Note: Depreciation amount in 2009 stands at RMB 54,434,789.69, and the original
price of construction in progress transferred into fixed assets in the reporting period
stands at RMB 24,867,157.97.
(2) Fixed assets with unfinished property certificates
Type Original price
Reason Time when the property certificate will be
obtained
Houses and
buildings
116,958,457.29
Has been put into use
only for a short period
Relevant materials are being collected and the
Company is estimated to obtain the property
certificate at the end of 2010.
10. Construction in progress
(1) Balance of construction in progress
Closing amount Opening amount
Items
Book balance
Impairment
provision
Net book value Book balance
Impairment
provision
Net book value
Cogeneration
project
313,832,490.16 313,832,490.16 198,572,300.79 198,572,300.79
The second
phase of PMIDA
63,042,533.13 63,042,533.13 54,652,984.34 54,652,984.34
Steam pipeline
project
9,906,565.84 9,906,565.84
Prepayment for
contract project
4,142,356.93 4,142,356.93 5,881,264.88 5,881,264.88
Acetaldehyde
Project
7,639,782.19 7,639,782.19 5,795,073.05 5,795,073.05
Project on
Circuitry 110KV
5,231,583.54 5,231,583.54 5,119,536.88 5,119,536.88Closing amount Opening amount
Items
Book balance
Impairment
provision
Net book value Book balance
Impairment
provision
Net book value
from old area to
new area
Reformation of
compressed air
1,892,489.63 1,892,489.63
Improvement on
synthesizing
technology of
trichlorphon
2,227,507.56 2,227,507.56 1,794,516.25 1,794,516.25
The 4th phase of
extension and
reformation on
sewage disposal
1,326,225.30 1,326,225.30
Callback of
mother liquor of
fine trichlorphon
774,247.88 774,247.88
Extension of
8000t/a paraquat
545,236.46 545,236.46
New carbofuran
project
517,604.98 517,604.98 517,604.98 517,604.98 0.00
Reformation
project of acid
tank in acid-base
station
472,029.19 472,029.19
Methyl
isocyanate and
auxiliary
manufacturing
equipments for
phosgene with
1000t/year
578,255.00 578,255.00 420,000.00 420,000.00
Alinating
isocarbophos
2,464,664.98 2,464,664.98 411,897.23 411,897.23
Extension and
Reformation
project on T08
0.00 0.00 294,263.45 294,263.45
Jingdi steam
main special line
project
2,815,490.73 2,815,490.73
Other 1,838,119.00 1,838,119.00
Total 404,330,388.20 517,604.98 403,812,783.22 288,376,236.15 517,604.98 287,858,631.17(2) Significant changes in construction in progress
Name of project
Budgeted
amount
Opening
balance
Increase this
period
Transferring
into fixed
assets this
period
Other decrease
Proportion of
input in
budgets
Total 288,376,236.15 142,571,949.63 24,867,157.97 1,750,639.61
Of which:
The second phase
of PMIDA 77,500,000.00 54,652,984.34 8,389,548.79 81.35%
Cogeneration
project 360,000,000.00 198,572,300.79 115,260,189.37 87.18%
Steam pipeline
project 20,000,000.00 9,906,565.84 8,093,434.16 18,000,000.00 90.00%
Methanal project 20,000,000.00 5,795,073.05 1,844,709.14 38.20%
Con.:
Project
progress
Capitalization of
interest
Of which: capitalization of
interest in 2009
Capitalization rate
of interest in 2009
Capital
resource
Closing amount
8,867,171.41 3,393,077.59 404,330,388.20
82% 1,420,303.24 Bank loans 63,042,533.13
88% 5,882,207.59 4.86% Bank loans 313,832,490.16
100% Self-raised
40% Self-raised 7,639,782.19
(3) Impairment provisions of construction in progress
Project
Opening
balance
Increase this
period
Decrease this
period
Closing
balance
Reason
New carbofuran project 517,604.98 517,604.98
Total 517,604.98 517,604.98
(4) Closing amount of construction in progress increased RMB 115,950,000 over the
opening amount, mainly because of increase in cogeneration project input in the
reporting period.
11. Intangible assets
Project Opening balance
Increase this
period
Decrease this
period
Closing balance
I. Total cost 210,591,119.53 210,591,119.53
1. Non-patent technology 9,573,700.00 9,573,700.00Project Opening balance
Increase this
period
Decrease this
period
Closing balance
2. Land use right 201,017,419.53 201,017,419.53
II. Total accumulative amortization 28,030,677.14 2,016,296.50 30,046,973.64
1. Non-patent technology 3,776,533.17 304,000.02 4,080,533.19
2. Land use right 24,254,143.97 1,712,296.48 25,966,440.45
III. Total accumulative amount of
impairment provision 32,072,093.53 32,072,093.53
1. Non-patent technology 0
2. Land use right 32,072,093.53 32,072,093.53
IV. Total carrying value 150,488,348.86 148,472,052.36
1. Non-patent technology 5,797,166.83 5,493,166.81
2. Land use right 144,691,182.03 142,978,885.55
12. Deferred income tax assets
(1) Recognized deferred income tax assets
Items Closing balance Opening balance
Provision for assets impairment 4,399,137.65 4,399,137.65
Deductible deficit 8,102,591.94 8,102,591.94
Changes in fair value of tradable
financial assets
Total 12,501,729.59 12,501,729.59
(2) Details for unrecognized deferred income tax assets
Items Closing balance Opening balance
Deductible temporary difference 32,680,993.43
32,680,993.43
Deductible deficit 207,192.60
207,192.60
Total 32,888,186.03 32,888,186.03
(3) Deductible deficit of unrecognized deferred income tax assets will be mature in
the next year
Year
Closing
balance
Opening
balance
Remark
2014 -828,770.38
Deductible deficit arising from Jingzhou Lingxiang
Chemical Industry Co., Ltd in 2009
Total -828,770.38
(4) Temporary difference caused by temporary different assetsItems Closing amount of temporary
difference
Opening amount of temporary
difference
Provision for assets impairment 17,596,550.60 17,596,550.60
Deductible deficit 32,410,367.75 32,410,367.75
Changes in fair value of tradable
financial assets
Total 50,006,918.35 50,006,918.35
13. Provision for assets impairment
Increase this period Decrease this period
Items
Opening
balance Withdrawal
Other
increase
Reversal Writing-off
Other
decrease
Closing
balance
Provision for bad debts
41,181,746.69 3,788,521.58 6,480.09 8,457.15 44,955,331.03
Provision for falling
price of inventory
16,231,411.89
6,859,227.51 2,309,353.64 - 20,781,285.76
Provision for
impairment of
long-term equity
investment
11,991,017.37
- - - 11,991,017.37
Provision for
impairment of fixed
assets
5,492,258.90
- 2,557,685.58 - 2,934,573.32
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 107,486,133.36 10,647,749.09 4,873,519.31 8,457.15 113,251,905.99
14. Assets with restricted ownership
(1) Assets with restricted ownership
Assets with restricted
ownership
Opening book
value
Increase this
period
Decrease this
period
Closing book
value
Assets for guarantee
1. Receivable accounts 4,899,274.54 86,442,240.09 91,341,514.63
2. Fixed assets 92,943,550.50 92,943,550.50
Total 97,842,825.04 86,442,240.09 184,285,065.13(2) Reason for assets ownership being restricted: receivable accounts was trade
financing loans from bank which was documentary L/C of opened by foreign
customers, then Hubei Sanonda Foreign Trade Corporation, subsidiary of the
Company, pledged right of collecting payment for goods to bank, and loans obtained
by the Company through pledge of accounts receivable to ICBC Shashi Subbranch;
fixed assets with restricted ownership was because the Company mortgaged 69
production lines to Industrial and Commercial Bank of China for gaining short-term
loans.
15. Short-term loans
(1) Category of loans
Type Closing balance Opening balance
Collaterall loan 85,000,000.00 10,000,000.00
Guaranteed loan 70,000,000.00 25,000,000.00
Secured borrowings 91,341,514.63 4,899,274.54
Total 246,341,514.63 39,899,274.54
(2) There is no matured short-term loan unredeemed in the Company
(3) Guaranteed loan
Units Amount Way Guarantor (object of pledge)
China Construction Bank, Sanwan
Subbranch
85,000,000.00 Collaterall loan House and building, land
Pudong Development Bank, Wuhan
Branch
30,000,000.00 Guaranteed loan
Sanonda Group Corporation
Bank of Communications, Wuhan
Branch
40,000,000.00 Guaranteed loan Guangxi Hechi Chemicals
Co., Ltd
Industrial and Commercial Bank of
China, Shashi Subbranch
50,000,000.00 Secured
borrowings
Accounts receivable
International Department of Bank of
China
3,590,375.10 Secured
borrowings
Accounts receivable
Agricultural Bank of China Jingzhou
Jiangjin Subbranch
23,531,834.42 Secured
borrowings
Accounts receivable
Bank of Communications, Wuhan
Branch
14,219,305.11 Secured
borrowings
Accounts receivable
Total 246,341,514.63
(4) Closing amount of short-term loan increased RMB 206,440,000 over the opening
amount, mainly because of increase in production fund and project input needs.
16. Notes payableType Closing balance Opening Balance
Bank acceptance bill 20,000,000.00 5,000,000.00
Total 20,000,000.00 5,000,000.00
17. Accounts payable
(1) By aging
Closing balance Opening balance
Aging
Amount Proportion Amount Proportion
Within 1 year (including 1
year)
92,219,025.56 90.56%
106,679,646.18 91.23%
1-2 years (including 2 years) 5,129,103.62 5.04% 4,908,266.24 4.20%
2-3 years (including 3 years) 777,354.54 0.76% 1,584,294.76 1.35%
Over 3 years 3,711,505.12 3.64% 3,769,145.82 3.22%
Total 101,836,988.84 100.00% 116,941,353.00 100.00%
(2) No amount due from shareholders who hold 5% or more of the voting rights of the
Company is included in the accounts payable.
(3) Accounts payable of large amount with aging over 1 year.
Enterprise name Amount
Reason for unpaid or
unsettlement
Repayment amount after
balance sheet
Bluestar (Beijing) Chemical
Machinery Co., Ltd
1,542,200.00 Unsettlement because the
project has not finished
yet
(4) In accounts payable, the Company need to pay RMB 3,051,791.54 to related parties,
accounting for 3% in total accounts payable.
18. Advance from customers
(1) By aging
Closing balance Opening balance
Aging
Amount Proportion Amount Proportion
Within 1 year (including 1 year) 32,380,695.01 91.85% 28,029,729.38 91.21%
1-2 years (including 2 years) 313,268.95 0.89% 590,312.70 1.92%
2-3 years (including 3 years) 592,541.75 1.68% 227,914.84 0.74%
Over 3 years 1,968,240.56 5.58% 1,883,301.71 6.13%
Total 35,254,746.27 100.00% 30,731,258.63 100.00%
(2) No amount due from shareholders who hold 5% or more of the voting rights of theCompany is included in the advance from customers.
(3) In advance from customers, the Company received RMB 800.00 from related
parties in advance, accounting for 0.002% in total advance from customers.
(4) There is no large item in the advance from customers with aging over 1 year.
19. Payroll payable
Items Opening balance Increase this period Payment this period Closing balance
I. Wages, bonuses, allowance and
subsidies 12,288,980.00 26,885,970.60 39,174,950.60
II. Welfare expenses for the
employees 4,117,207.48 3,128,690.32 988,517.16
III. Social insurances 560,000.00 9,663,429.08 10,600,456.20 -377,027.12
Of which: 1. Medical insurance 232,258.84 1,002,205.24 -769,946.40
2. Endowment insurance 8,112,112.82 8,249,928.02 -137,815.20
3. Unemployment insurance 560,000.00 712,059.28 736,432.28 535,627.00
4. Work injury insurance 488,585.14 492,073.50 -3,488.36
5. Maternity insurance 118,413.00 119,817.16 -1,404.16
IV. Housing accumulation fund 20,589.79 3,274,137.00 2,252,952.00 1,041,774.79
V. Labor union expenditure 245,457.95 391,218.14 272,519.03 364,157.06
VI. Employee education expenses 21,929.59 24,396.97 37,827.00 8,499.56
VII. Compensations for the
cancellation of the labor relationship
with the employees 4,094,941.12 67,200.00 67,200.00 4,094,941.12
VIII. Other 575,535.70 592,859.70 -17,324.00
Total 17,231,898.45 44,999,094.97 56,127,454.85 6,103,538.57
20. Taxes and dues payable
Taxes and dues Closing balance Opening balance
1. Corporate income tax 7,498,764.51 13,722,355.69
2. VAT -21,363,883.65 -21,328,286.43
3. Business tax 471,303.68 56,449.91
4. Tax on resources 28,550.56 28,952.66
5. Land holding tax 520,481.42 308,509.51
6. Property tax 441,822.18 301,624.41
7. Tax for maintaining and building
cities 296,953.89 902,284.85
8. Educational surcharges 137,669.97 517,318.91Taxes and dues Closing balance Opening balance
9. Individual income tax withheld
and remitted 153,163.71 33,491.38
10. Others 136,172.07 998,603.08
Total -11,679,001.66 -4,458,696.03
21. Dividends payable
Name of investor Closing balance Opening amount Reason for not paying
dividends for more than 1
year
State-owned Assets Supervision and
Administration Commission of
Qichun
224,463.30 224,463.30
Jingzhou Shashi Rural Credit Union 125,000.00 125,000.00
Total 349,463.30 349,463.30
22. Other payables
(1) Listing by ages
Closing balance Opening balance
Aging
Amount Proportion Amount Proportion
Within 1 year (including 1 year) 34,563,682.67 74.56% 26,831,621.91 68.08%
1-2 years (including 2 years) 2,635,458.35 5.79% 4,426,377.44 11.23%
2-3 years (including 3 years) 254,680.76 0.56% 4,317,106.00 10.95%
Over 3 years 8,681,407.84 19.09% 3,838,729.61 9.74%
Total 46,135,229.62 100.00% 39,413,834.96 100.00%
(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) Among other payables, RMB 742,889.70 is that the Company should pay to
related parties, accounting to 1.61% of total amount of other payables.
(4) There is no large item in the other payables with aging over 1 year.
23. Non-current liabilities due within one year
(1) Breakdown
Item Closing amount Opening amount
Long-term borrowings due within
one year
160,000,000.00 95,000,000.00
Total 16,000,000.00 95,000,000.00(2) Long-term borrowings due within one year
Type Closing balance Opening balance
Mortgaged borrowings
Guaranteed borrowings 160,000,000.00 95,000,000.00
Total 16,000,000.00 95,000,000.00
① Top five long-term borrowings due within one year with the largest amount
Closing balance Opening balance
Creditor
Beginning
date of loan
Ending
date of
loan
Interest
rate
Currency
Foreign
currency
RMB
Interest
rate
Currency
Foreign
currency
RMB
Shenzhen
Ping An
Bank
2009/4/28 2012/4/27 5.103% RMB
45,000,000.00 5.103% RMB
45,000,000.00
Import
and
Export
Bank of
China,
Hubei
Branch
2009/5/18 2011/5/18 3.51% RMB
50,000,000.00
Import
and
Export
Bank of
China,
Hubei
Branch
2009/6/30 2011/6/30 3.51% RMB
65,000,000.00
② No long-term borrowings due within one year of the Company are overdue.
③ Guaranteed loans
Creditor Amount of loan
Way of
guarantee
Guarantor
Shenzhen Ping An Bank 45,000,000.00 Guaranteed
loan
China National Chemical
Corporation (ChemChina)
Import and Export Bank of China, Hubei
Branch
115,000,000.00 Guaranteed
loan
China National
Agrochemical Corporation
Total 160,000,000.00
24. Long-term borrowings(1) By category
Type of borrowing Closing balance Opening balance
Guaranteed loan 624,560,000.00 579,560,000.00
Total 624,560,000.00 579,560,000.00
(2) Top five long-term borrowings with the largest amount
Closing balance Opening balance
Creditor
Beginning
date of
loan
Ending
date of
loan
Interest
rate
Currency
Foreign
currency
RMB
Interest
rate
Currency
Foreign
currency
RMB
Jingzhou
Sanwan
Sub-branch of
China
Construction
Bank
2008/2/3 2013/2/2 5.76% RMB
97,560,000.00 5.76% RMB
97,560,000.00
Jingzhou
Sanwan
Sub-branch of
China
Construction
Bank
2009/2/10 2014/2/9 5.76% RMB
80,000,000.00 5.76 RMB
80,000,000.00
Wuhan Branch
of Industrial
Bank
2008/4/21 2013/4/21 5.76% RMB
90,000,000.00 5.76% RMB
90,000,000.00
Import and
Export Bank of
China, Hubei
Branch
2009/7/31 2011/7/31 3.51% RMB
85,000,000.00 3.51% RMB
85,000,000.00
Shenzhen Ping
An Bank
2009/4/29 2012/4/29 4.86 RMB
172,000,000.00 4.86 RMB
32,000,000.00
(3) Guaranteed loan
Creditor Amount Way Guarantor
Jingzhou Sanwan Sub-branch of China
Construction Bank
257,560,000.00 Guaranteed loan China National Chemical
Corporation (ChemChina)
Wuhan Branch of Industrial Bank 110,000,000.00 Guaranteed loan Sanonda Group Co., Ltd.
Import and Export Bank of China,
Hubei Branch
85,000,000.00 Guaranteed loan China National Agrochemical
Corporation
Shenzhen Ping An Bank 172,000,000.00 Guaranteed loan China National ChemicalCreditor Amount Way Guarantor
Corporation (ChemChina)
Total 624,560,000.00
(4) Long-term borrowings as at the period-end increased by 7.76% as compared with
that at the period-begin, mainly because of increase in borrowing of thermal
electricity joint production project.
25. Long-term payables
Type Closing balance Opening balance
Environmental protection special loan from
Jingzhou Bureau of Finance
2,000,000.00 2,000,000.00
Loan for glyphosate project 490,000.00 490,000.00
Treatment funds from Environmental
Protection Bureau of Hubei Province
200,000.00 200,000.00
Borrowing for the cooperation project with
Guangzhou Chemical Industry Research
Institute
160,000.00 160,000.00
Borrowing for highly toxic pesticide
production line change from Jingzhou
Bureau of Finance
6,990,000.00 6,990,000.00
Total 9,840,000.00 9,840,000.00
26. Other non-current liabilities
Type Closing balance Opening balance
Subsidy of treasury bonds financed projects (highly
toxic pesticide alternate projects）
6,990,000.00 6,990,000.00
Appropriation to the CTC consumption elimination project of
Sanonda (Jingzhou) Pesticides and Chemicals Co., Ltd.
2,219,677.27 2,219,677.27
Total 9,209,677.27 9,209,677.27
27. Share capital
Increase/decrease (+/-)
Items
Opening
balance
New
shares
issued
Bonus shares
from retained
profit
Bonus shares
from capital
reserve
Others Total
Closing
balance
I. Shares subject to
trading moratorium
42,712.00 42,712.00
1. Shares held by the StateIncrease/decrease (+/-)
Items
Opening
balance
New
shares
issued
Bonus shares
from retained
profit
Bonus shares
from capital
reserve
Others Total
Closing
balance
2. Shares held by
state-owned corporation
3. Shares held by other
domestic investors
42,712.00 42,712.00
Of which: Shares held by
domestic corporation
Shares held by
domestic natural person
42,712.00 42,712.00
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
593,880,508.00 593,880,508.00
1. Renminbi common
shares
363,880,508.00 363,880,508.00
2. Domestically listed
foreign shares
230,000,000.00 230,000,000.00
3. Overseas listed foreign
shares
4. Other
Total shares
593,923,220.00 593,923,220.00
28. Special reserve
Items Opening balance Increase this
period
Decrease this
period
Closing balance
Safe production fee 20,689,819.99 8,205,654.72 6,476,373.01 22,419,101.70
Total 20,689,819.99 8,205,654.72 6,476,373.01 22,419,101.70
29. Capital reserveItems Opening balance Increase this
period
Decrease this
period
Closing balance
Capital premium (Premium
on capital stock)
264,067,481.22 264,067,481.22
Other 7,523,997.13 7,523,997.13
Total 271,591,478.35 271,591,478.35
30. Surplus reserve
Items Opening balance Increase this
period
Decrease this
period
Closing balance
Statutory surplus reserve 68,921,202.12 68,921,202.12
Discretionary surplus
reserve
3,815,085.65 3,815,085.65
Total 72,736,287.77 72,736,287.77
31. Retained profit
Items Amount
Retained profit at the end of previous year before adjustment 129,046,856.85
Adjustment: Total retained profit as at 31 December 2009
(increase “+”, decrease “-”)
Retained profit at the beginning of year after adjustment 129,046,856.85
Add: Net profit attributable to owners of parent company in this
period
12,409,697.08
Other increase
Less: appropriating statutory surplus reserve
Appropriating discretionary surplus reserve
Common share dividend payable
Dividend of common share transferred into share capital
Retained profit at the period-end 141,456,553.93
32. Operating revenue and operating cost
(1) Itemize
Operating revenue Operating cost
Items
This period Last period This period Last period
Main operation 743,040,199.27 941,804,531.22 638,018,854.90 773,512,937.14
Other 53,227,971.11 43,479,459.62 42,351,194.16 37,023,718.85
Total 796,268,170.38 985,283,990.84 680,370,049.06 810,536,655.99(2) Main operation (classified by industries)
Income from main operation Cost of main ope Name of ration Profit of main operation
industry This period Last period This period Last period This period Last period
Manufacturing of
chemical raw
material and
chemicals 743,040,199.27 941,804,531.22 638,018,854.90 773,512,937.14 105,021,344.37 168,291,594.08
Total 743,040,199.27 941,804,531.22 638,018,854.90 773,512,937.14 105,021,344.37 168,291,594.08
(3) Main operation (classified by products)
Income from main operation Cost of main operation Profit of main operation
Name of products
This period Last period This period Last period This period Last period
New chemical materials
and special chemicals 9,004,145.38 5,747,391.55 4,888,588.66 3,183,876.80 4,115,556.72 2,563,514.75
Petrochemicals and refining
and chemical products 48,914,169.13 31,897,705.52 40,597,346.44 22,542,164.88 8,316,822.69 9,355,540.64
Basic (chlor-alkali)
chemicals 13,583,301.73 14,849,102.40 -1,265,800.67
Agrochemicals such as
chemical fertilizer and
pesticide 671,538,583.03 904,159,434.15 577,683,817.40 747,786,895.46 93,854,765.63 156,372,538.69
Total 743,040,199.27 941,804,531.22 638,018,854.90 773,512,937.14 105,021,344.37 168,291,594.08
(4) Sales revenue from the top five clients of the Company is RMB 101,106,491.95 in total,
accounting for 13.61% of total sales revenue.
(5) Operating revenue in the reporting period has decreased by 19.18% over the last year, mainly
because pesticide and chemical market remains weak, as well as over-capacity of production,
resulting in a large margin drop in market price of products.
33. Business taxes and surcharges
(1) Itemize
Items This period Last period Standard
Business tax 765,108.59 120,583.48 5% of turnover
Tax on resources
443.52
RMB 2/ton for liquid salt, RMB 12/ton for
solid salt
Tax for maintaining
and building cities 197,843.33 252,098.97
7% or 5% of circulating tax
Educational surtax 91,400.99 108,042.27 3% of circulating taxItems This period Last period Standard
Other 90,112.09 19,735.81
Total 1,144,465.00 500,904.05
(2) Business taxes and surcharges in the reporting period decreased by 49.23% over the last year,
which caused by drop of operating revenue in the reporting period, resulting in falling-off of
surtax.
34. Financial expense
Items This period Last period
Interest expense 20,485,595.34 21,466,709.34
Less: interest income 3,085,001.43 3,639,286.97
Exchange loss 238,344.74 163,274.63
Less: exchange gain 41,051.78 190,857.90
Other 6,892,739.95 9,738,046.51
Total 24,490,626.82 27,537,885.61
35. Loss on assets impairment
Items This period Last period
1. Loss on bad debts 3,580,183.14 4,580,867.92
2. Loss on falling price of inventory 6,859,227.51 1,009,167.62
Total 10,439,410.65 5,590,035.54
36. Income from change in fair value
Items This period Last period
Transaction financial assets 2,196,656.32
Total 2,196,656.32
37. Investment income
(1) Itemize
Resource of investment income This period Last period
Income from disposal of long-term equity
investment measured at cost method
1,440,000.00
Total 1,440,000.00
Note: There exists no major limitation to repatriation of investment income.
38. Non-operating income
(1) ItemizeItems This period Last period
1. Subtotal of profit from disposal of non-current
assets
825,762.70
2,331,756.19
Of which: Profit from disposal of fixed assets 825,762.70 2,331,756.19
2. Other 20,636.00 328,046.88
Total 846,398.70 2,659,803.07
39. Non-operating expense
(1) Itemize
Items This period Last period
1. Total loss on disposal of non-current assets 222,155.60
Of which: Loss on disposal of fixed assets 222,155.60
2. Extraordinary loss 2545.97 14,038.00
3. Other 349,604.49 1,021,517.33
Total 574,306.06 1,035,555.33
40. Income tax expense
(1) Itemize
Items This period Last period
Income tax expense 8,989,587.07 15,073,885.85
Of which: Current period income tax 8,989,587.07 15,073,885.85
Deferred income tax
41. Supplementary information to cash flow statement
(1) Reconciliation of net profit to net cash flows generated from operating activities
Items This period Last period
1. Reconciliation of net profit to net cash flows generated from operating
activities
Net profit 11,931,872.00 45,223,722.21
Add: Provision for impairment of assets 5,765,772.63 5,590,035.54
Depreciation of fixed assets, of oil-gas assets, of productive biological assets 54,562,201.69 45,544,393.45
Amortization of intangible assets 2,016,296.50 1,683,530.76
Amortization of long-term deferred expense 14,273.21
Losses on disposal of property, plant and equipment, intangible assets and other
long-term assets (gains: negative) -603,607.10 -2,331,756.19
Loss on retirement of fixed assets (gains: negative)
Losses from variation of fair value (gains: negative) -2,196,656.32Items This period Last period
Financial cost (gains: negative) 24,490,626.82 27,537,885.61
Investment loss (gains: negative) -1,440,000.00
Decrease in deferred income tax assets (gains: negative)
Increase in deferred income tax liabilities (decrease: negative)
Decrease in inventory (gains: negative) -55,452,622.59 51,411,108.79
Decrease in accounts receivable from operating activities (gains: negative) -122,735,491.07 -104,134,875.20
Increase in payables from operating activities (decrease: negative) -13,929,542.03 -6,971,552.96
Other
Net cash flows generated from operating activities -93,954,493.15 59,930,108.90
II. Investing and financing activities that do not involving cash receipts and
payment:
Conversion of debt into capital -
Convertible bond due within one year -
Fixed assets financed by finance leases -
III. Net increase in cash and cash equivalents -
Closing balance of cash 543,482,180.87 657,073,854.90
Less: Opening balance of cash 474,460,623.29 562,832,319.76
Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents 69,021,557.58 94,241,535.14
IX. Related party and Related Transaction
1. Recognition standard for related parties: When a party controls, jointly controls or exercises
significant influence over another party, or when two or more parties are under the control, joint
control or significant influence of the same party, the affiliated party relationships are constituted.
2. Information related to parent company of the Company
Name of parent
company
Type Registration place
Legal
representative
Business scope Registered capital
Sanonda Group
Corporation
State-owned
enterprise
93 Beijing East
Road, Jingzhou,
Hubei Province
Li Zuorong
Production and operation
of pesticide and
chemicals products
240,661,000.00Name of parent
company
Type Registration place
Legal
representative
Business scope Registered capital
China National
Agrochemical
Corporation
State-owned
enterprise
62 North 4th Ring
Road W., Haidian
District, Beijing
Lei Zhihong
Constructional
engineering, mineral
products, fertilizer,
chemical raw materials
459,710,634.02
ChemChina
Corporation
State-owned
enterprise
62 North 4th Ring
Road W., Haidian
District, Beijing
Ren Jianxin
Constructional
engineering, mineral
products, fertilizer,
chemical raw materials
9,372,817,000.00
(Con.)
Proportion of share held by
parent company against the
Company
Proportion of voting rights owned
by parent company against the
Company
Organization code Remark
20.02% 20.02% 178987789 Parent company
100011399 Parent company of
parent company
710932515 Final controller
3. Information on subsidiaries of the Company
Name of subsidiaries Relationship
with the
Company
Type Registration place Legal
representative
Sanonda (Jingzhou)
Pesticide & Chemical
Co., Ltd.
Holding
subsidiary
State-holding
enterprise
10 Xihuan Road, Jingzhou District Deng Guobin
Hubei Sanonda
Foreign Trading Co.,
Ltd.
Holding
subsidiary
State-holding
enterprise
1 Beijing East Road, Jingzhou Li Zuorong
Hubei Sanonda
Tianmen
Agrochemical Co.,
Ltd.
Holding
subsidiary
State-holding
enterprise
179 Gudu Av., Zaoshi, Tianmen Xie Chengli
Jingzhou Longhua
Petrochemicals Co.,
Ltd.
Holding
subsidiary
State-holding
enterprise
95 Beijing East Road, Jingzhou Liu Anping
Jingzhou Sanonda
Aifusi Chemical
Holding
subsidiary
State-holding
enterprise
93 Beijing East Road, Jingzhou Li ZuorongName of subsidiaries Relationship
with the
Company
Type Registration place Legal
representative
Industry Co., Ltd.
Jingzhou Lingxiang
Chemical Industry
Co., Ltd.
Holding
subsidiary
State-holding
enterprise
Nongji Road, Yaowan Branch, Sha
City Farm, Jingzhou Development
Zone
Yin Hong
(Con.)
Business scope Registered
capital
(RMB’0000)
Proportion
of holding
share
Proportion
of voting
rights
Organization
code
Production of pesticide and intermediate 3,000 88.33% 88.33% 181860033
Import and export of pesticide and
intermediate
1,000 90.00% 90.00% 706963167
Production and sale of pesticide 3,000 98.50% 98.50% 181851778
Production and sale of chemical products 500 65.00% 65.00% 757019360
R&D, production and sale of fine
chemical products
600 95.10% 95.10% 760683174
R&D and sale of chemical products 1,000 51.00% 51.00% 682687056
4. Information on other related parties
Name of other related parties Relationship with the
Company
Organization code
Jingzhou Sanonda Advertising Co., Ltd. Same parent company 706967790
Jingzhou Hengxiang Material Trade Co.,
Ltd
Same parent company 790577401
Jingzhou Hongxiang Chemicals Co., Ltd Same parent company 798771196
Jingzhou Fude Foods General Factory Same parent company 178960447
Jingzhou Dali Industrial Co., Ltd Joint stock company 17897655-3
Hubei Jingzhou Huaxiang Chemical Co.,
Ltd.
Affiliated enterprise of parent
company
73713373X
Guangxi Hechi Chemicals Co., Ltd Same final controller 200887558
Bluestar (Beijing) Chemical Machinery
Co., Ltd
Same final controller 795955432
Bluestar Environment Engineering Co.,
Ltd. Same final controller
Jiangsu Anbang Electrochemical Co.,
Ltd. Same final controller 1394333375. Transaction of related parties
(1) Purchase and sale transaction, related transaction providing and receiving labor service (Unit:
RMB Yuan)
This period Last period
Name of enterprise Type Content
Principle
of price Amount
Percentage
to the same
transaction
Amount
Percentage
to the same
transaction
China National Agrochemical
Corporation
Purchase Purchase of raw
materials
Market
price 43,779,916.05 10.55% 21,914,775.00 4.30%
Sanonda Group Corporation Purchase Purchase of raw
materials
Market
price 5,615,302.58 1.35% 64,428,155.10 12.64%
Jingzhou Sanonda Advertising
Co., Ltd.
Purchase Purchase of packaging Market
price 3,244,611.79 6.05% 2,489,959.85 4.27%
Jingzhou Hengxiang Material
Trade Co., Ltd
Purchase Purchase of raw
materials
Market
price 4,663,256.07 1.12% 11,509,623.40 2.26%
Jingzhou Dali Industrial Co., Ltd Purchase Purchase of packaging Market
price 2,917,948.72 5.44% 4,726,520.00 8.11%
Jingzhou Fude Foods General
Factory
Purchase Purchase of packaging Market
price 1,413,846.61 2.43%
Bluestar Environment
Engineering Co., Ltd.
Purchase Purchase of raw
materials
Market
price 11,538.46 0.003%
Jingzhou Hengxiang Material
Trade Co., Ltd
Sale Sale of pesticide and
chemical products
Market
price 720,159.83 0.10% 129,701.56 0.01%
Hubei Jingzhou Huaxiang
Chemical Co., Ltd.
Sale Sale of chemical
products
Market
price 14,749,943.74 1.99% 13,976,014.87 1.48%
Jiangsu Anbang Electrochemical
Co., Ltd.
Sale
Sale of pesticides
Market
price 1,882,058.23 0.25% 1,224,210.00 0.13%
(2) Related-party guarantee
Guarantor Secured party Amount secured Starting date Ending date
Execution of
not
Sanonda Group Corporation The Company 10,000,000.00 2009.11.13 2012.11.13 No
Sanonda Group Corporation The Company 20,000,000.00 2010.02.01 2013.02.01 No
Sanonda Group Corporation The Company 90,000,000.00 2008.4.21 2015.4.21 No
ChemChina Corporation The Company 217,000,000.00 2009.4.28 2014.4.28 No
ChemChina Corporation The Company 80,000,000.00 2008.8.29 2015.8.28 No
ChemChina Corporation The Company 80,000,000.00 2009.2.10 2016.2.9 No
ChemChina Corporation The Company 97,560,000.00 2008.2.3 2015.2.2 NoGuarantor Secured party Amount secured Starting date Ending date
Execution of
not
China National Agrochemical
Corporation
The Company 50,000,000.00 2009.5.18 2013.5.18 No
China National Agrochemical
Corporation
The Company 65,000,000.00 2009.6.30 2013.6.30 No
China National Agrochemical
Corporation
The Company 85,000,000.00 2009.7.31 2013.7.31 No
Guangxi Hechi Chemicals Co.,
Ltd.
The Company 40,000,000.00 2010.2.10 2010.12.10 No
The Company Guangxi Hechi
Chemicals Co., Ltd.
100,000,000.00 2008.1.12 2013.1.12 No
(3) Other related transactions
This period Last period
Name of enterprise Type Content
Principle
of pricing Amount
Percentage to
the same
transaction
Amount
Percentage
to the same
transaction
Sanonda Group
Corporation
Guarantee Guarantee fee paid Negotiated
prices
4,850,000.00 70.80% 3,450,000.00 74.03%
China National
Agrochemical
Corporation
Guarantee Guarantee fee paid Negotiated
prices
2,000,000.00 29.20% 1,210,000.00 25.97%
6. Accounts receivable and payable of related parties
Name of project Related parties Closing amount Opening amount
Advances from
customers
Jingzhou Hengxiang Material Trade
Co., Ltd 800.00 800.00
Accounts payable
Jingzhou Hengxiang Material Trade
Co., Ltd 544,448.00 157,828.70
Accounts payable Jingzhou Dali Industrial Co., Ltd 239,327.04 1,165,733.44
Accounts payable
Jingzhou Fude Foods General
Factory 378,516.50 378,516.50
Accounts payable
Bluestar (Beijing) Chemical
Machinery Co., Ltd 1,852,200.00 1,852,200.00
Accounts payable
Bluestar Environment Engineering
Co., Ltd. 37,300.00 378,000.00
Other payablea
Jingzhou Sanonda Advertising Co.,
Ltd. 742,889.70X. Share-based payments
There are no share-based payments that need to be disclosed in the reporting period.
XI. Contingencies
1. Contingent events formed by external guarantee
Guarantor Secured entities
Total
guarantee
amount
Overdue
amount
Guarantee
way
Guarantee type
Current status
of secured
entities
I. Guarantee for subsidiaries
The
Company
Hubei Sanonda Foreign Trading
Co., Ltd.
228,000,000
Joint liability
guarantee
Guarantee for trade
financing loan
Business-as-usual
II. Guarantee for other entities
The
Company
Guangxi Hechi Chemicals Co.,
Ltd
100,000,000
Joint liability
guarantee
Guarantee for project
borrowing
Business-as-usual
Note: The guarantee provided for Hubei Sanonda Foreign Trading Co., Ltd. (the
holding subsidiary of the Company) is that the Company provides maximum security
of guaranty for its trade financing behaviors such as opening letter of credit and bill of
exchange.
2. Other contingencies
The Company has no other contingencies that need to be disclosed.
XII. Commitment Events
The Company has no significant commitment events that need to be disclosed.
XIII. Balance-sheet-date Events
The Company has no balance-sheet-date event that needs to be disclosed.
XIV. Non-monetary exchange of assets
The Company has no non-monetary exchange of assets that needs to be disclosed.
XV. Debt Restructuring
The Company has no debt restructuring that needs to be disclosed.
XVI. Borrowing Costs
In the reporting period, the borrowing cost that was capitalized was RMB 3,393,077.59 at the
capitalization rate of 4.86%.
XVII. Assets and Liabilities Measured at Fair Value
The Company has no assets or liabilities measured at fair value.XVIII. Notes to the Financial Statement of Parent Company
1. Accounts receivable
(1) By category
Closing balance Opening balance
Categories
Amount Proportion
Provision for
bad debt
Withdrawal
proportion
Amount Proportion
Provision for
bad debt
Withdrawal
proportion
Significant
single
amounts
Insignificant
single
amounts but
with
significant
credit risk
8,172,080.39 15.50% 8,172,080.39 100.00% 8,502,080.39 39.99% 8,502,080.39 100.00%
Other
insignificant 44,560,968.11 84.50% 3,144,083.97 7.06% 12,756,489.84 60.01% 2,816,340.17 22.08%
Total 52,733,048.50 100.00% 11,316,164.36 21.46% 21,258,570.23 100.00% 11,318,420.56 53.24%
Note: Accounts receivable with insignificant single amounts but with significant
credit risk is accounts receivable with larger recoverable risk recognized in
accordance with collection work of the Company to debtors and daily businesses
occurred, and credit of debtors.
(2) Explanation on bad debt provisions for accounts receivable with significant single
amounts or insignificant but being conducted an independent impairment test on:
Contents of accounts
receivable
Closing balance Amount of bad debt Withdrawal
proportion
Reasons
Payment for goods
receivable by
parent company
from its domestic
customer
8,172,080.39 8,172,080.39 100%
There has been no business contact
between parent company and the
customer. And it has not been paid after
several reminders. Possibility of
recovering the account is estimatedly
faint. And a bad debt provision has thus
been withdrawn in full.
Total 8,172,080.39 8,172,080.39
(3) Classified according to credit risk (aging analysis)
Aging Closing balance Opening balanceBalance Proportion
Provision for
bad debt
Withdrawal
proportion
Balance Proportion
Provision for
bad debt
Withdrawal
proportion
Within 1
year
(including
1 year) 42,477,031.09 80.54% 2,003,840.92 4.72% 9,372,552.82 44.09% 376,097.12 4.01%
1-2 years
(including
2 years) 894,701.27 1.70% 44,735.06 5.00% 894,701.27 4.21% 44,735.06 5.00%
2-3 years
(including
3 years) 968,190.45 1.84% 874,462.69 90.32% 968,190.45 4.55% 874,462.69 90.32%
3-4 years
(including
4 years) 4,429,632.68 8.40% 4,429,632.68 100.00% 4,629,632.68 21.78% 4,629,632.68 100.00%
4-5 years
(including
5 years) 1,033,748.76 1.96% 1,033,748.76 100.00% 1,163,748.76 5.47% 1,163,748.76 100.00%
Over 5
years 2,929,744.25 5.56% 2,929,744.25 100.00% 4,229,744.25 19.90% 4,229,744.25 100.00%
Total 52,733,048.50 100.00% 11,316,164.36 21.46% 21,258,570.23 100.00% 11,318,420.56 53.24%
(4) The Company hasno accounts receivable cancelled actually in the reporting
period.
(5) No amount due from shareholders who hold 5% or more of the voting rights of the
Company is included in the accounts receivable.
(6) At the end of period, the top five accounts receivable totaled RMB 14,062,725.37,
including RMB 11,736,915.07 within one year, RMB 45,520.00 within four to five
years, and RMB 2,280,290.30 over five years, taking up 26.67% of total accounts
receivable.
(7) Accounts receivable form related parties at the end of period
Name of enterprise Relationship with
the Company
Amount Proportion to total accounts
receivable
Hubei Sanonda Tianmen
Agrochemical Co., Ltd.
Subsidiary
2,169,899.18
4.11%
Jingzhou Sanonda Aifusi Chemical
Industry Co., Ltd.
Subsidiary
230,313.51
0.44%
Total 2,400,212.69 4.55%2. Other receivables
(1) By categories
Closing balance Opening balance
Categories
Amount Proportion
Provision for
bad debt
Withdrawal
proportion
Amount Proportion
Provision for
bad debt
Withdrawal
proportion
Significant single
amounts
142,473,847.44 92.11% 92,136,957.67 90.45%
Insignificant
single amounts but
with significant
credit risk
82,600.00 0.08% 82,600.00 100.00% 82,600.00 0.08% 82,600.00 100.00%
Other insignificant 12,078,562.87 7.81% 4,705,478.37 38.96% 9,643,446.06 9.47% 4,707,820.40 48.82%
Total 154,635,010.31 100.00% 4,788,078.37 3.10% 101,863,003.73 100.00% 4,790,420.40 4.70%
(2) Explanation on bad debt provisions for other receivables with significant single
amounts or insignificant but being conducted an independent impairment test on
Contents of receivables Closing balance
Amount of
bad debt
Withdrawal
proportion
Reasons
1. Significant single amounts
Jingzhou Lingxiang Chemical
Industry Co., Ltd
37,080,213.65
Payment for subsidiary, no impairment
occurred when an impairment test was
made singly
Hubei Sanonda Foreign Trading Co.,
Ltd.
79,630,571.51
Payment for subsidiary, no impairment
occurred when an impairment test was
made singly
Sanonda (Jingzhou) Pesticide
Chemical Industry Co., Ltd.
22,631,962.85
Payment for subsidiary, no impairment
occurred when an impairment test was
made singly
Jingzhou Sanonda Aifusi Chemical
Industry Co., Ltd.
3,131,099.43
Payment for subsidiary, no impairment
occurred when an impairment test was
made singly
2. Insignificant single amounts but being conducted an independent impairment test on
Individual arrears 82,600.00 82,600.00 100% Considering an old account age, the
account is estimated to be irrecoverable.
And a full-amount provision has thus been
withdrawn.
Total 142,556,447.44 82,600.00(3) Classified by credit risk (aging analysis)
Closing balance Opening balance
Aging
Balance Proportion
Bad debt
provision
Withdrawal
proportion
Balance Proportion
Bad debt
provision
Withdrawal
proportion
Within 1
year
(including
1 year)
133,965,548.68 86.63% 180,886.96 0.14%
87,444,716.22 71.67% 73,851.72 0.08%
1-2 years
(including
2 years)
4,146,951.78 2.68% 24,476.40 0.59%
17,245,679.61 14.13% 33,946.42 0.20%
2-3 years
(including
3 years)
9,272,630.00 6.00% 8,631.50 0.09%
3,410,437.73 2.79% 37,027.31 1.09%
3-4 years
(including
4 years)
2,366,133.61 1.53% 28,379.73 1.20%
9,358,647.54 7.67% 78,600.00 0.84%
4-5 years
(including
5 years)
434,434.17 0.28% 96,391.71 22.19%
489,085.60 0.40% 43,829.82 8.96%
Over 5
years
4,449,312.07 2.88% 4,449,312.07 100.00%
4,079,124.47 3.34% 4,079,124.47 100.00%
Total 154,635,010.31 100.00% 4,788,078.37 3.10% 122,027,691.17 100.00% 4,346,379.74 3.56%
(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) Other receivables with the larger amount at the end of reporting period
Name of enterprise Nature or content Amount
Jingzhou Lingxiang Chemical
Industry Co., Ltd
Borrowing 37,080,213.65
Hubei Sanonda Foreign Trading
Co., Ltd.
Export proceeds 79,630,571.51
Sanonda (Jingzhou) Pesticide
Chemical Industry Co., Ltd.
Borrowing 22,631,962.85
(6) Top five parties in other receivables as at period-endName of entity
Relation with
the Company
Amount Age
Proportion in
total other
receivables
Jingzhou Lingxiang Chemical
Industry Co., Ltd
Subsidiary
37,080,213.65
Within 1 year
23.98%
Hubei Sanonda Foreign Trading Co.,
Ltd.
Subsidiary
79,630,571.51
Within 1 year
51.50%
Sanonda (Jingzhou) Pesticide
Chemical Industry Co., Ltd.
Subsidiary
22,631,962.85
Within 4 year
14.64%
Jingzhou Municipal State Taxation
Bureau
Non-related
party 4,524,598.65
Within 1 year
2.93%
Jingzhou Sanonda Aifusi Chemical
Industry Co., Ltd.
Subsidiary
3,131,099.43
Within 1 year
2.02%
Total 146,998,446.09 95.06%
(7) Other receivables form related parties at the end of period
Name of entity
Relation with
the Company
Amount
Proportion in total
other receivables
Jingzhou Lingxiang Chemical Industry Co., Ltd Subsidiary 37,080,213.65 23.98%
Hubei Sanonda Foreign Trading Co., Ltd. Subsidiary 79,630,571.51 51.50%
Sanonda (Jingzhou) Pesticide Chemical Industry Co., Ltd. Subsidiary 22,631,962.85 14.64%
Jingzhou Sanonda Aifusi Chemical Industry Co., Ltd. Subsidiary 3,131,099.43 2.02%
Total 142,473,847.44 92.14%
3. Long-term equity investment
(1) By specific items
Investee entity
Accounting
method
Initial
investment
Opening book
amount
Increase in
this period
Decrease
in this
period
Closing book
amount
Sanonda (Jingzhou) Pesticide
Chemical Industry Co., Ltd.
Cost
method 24,500,000.00 26,500,000.00 26,500,000.00
Hubei Sanonda Foreign Trading
Co., Ltd.
Cost
method 9,000,000.00 9,000,000.00 9,000,000.00
Hubei Sanonda Tianmen
Agrochemical Co., Ltd.
Cost
method 7,245,023.32 15,745,023.32 15,745,023.32
Jingzhou Longhua
Petrochemicals Co., Ltd.
Cost
method 3,250,000.00 3,250,000.00 3,250,000.00
Jingzhou Sanonda Aifusi
Chemical Industry Co., Ltd.
Cost
method 3,060,000.00 3,060,000.00 3,060,000.00Investee entity
Accounting
method
Initial
investment
Opening book
amount
Increase in
this period
Decrease
in this
period
Closing book
amount
Jingzhou Lingxiang Chemical
Industry Co., Ltd.
Cost
method 5,100,000.00 5,100,000.00 5,100,000.00
Jingzhou City Commercial Bank
Co., Ltd
Cost
method 20,000,000.00 20,000,000.00 20,000,000.00
Jingzhou Dali Industrial Co., Ltd Cost
method 1,674,600.00 1,674,600.00 1,674,600.00
Hubei Shendian Co., Ltd. Cost
method 564,000.00 564,000.00 564,000.00
Wangda Industrial Holding Co.,
Ltd
Cost
method 550,000.00 550,000.00 550,000.00
Guangxi Zhongding Holding Co.,
Ltd
Cost
method 580,800.00 580,800.00 580,800.00
Total 75,524,423.32 86,024,423.32 86,024,423.32
(Con.)
Proportion of
holding share
in investee
entity
Proportion of
voting rights
in investee
entity
Explanation on disagreement
between shareholding ratio and
voting shareholding ratio in
investee entity
Opening
impairment
reserve
Asset
impairment
reserve
withdrawn in
this period
Closing
impairment
reserve
Cash bonus
88.33% 88.33% 24,500,000.00 24,500,000.00
90.00% 90.00%
98.50% 98.50%
65.00% 65.00% 650,000.00
95.10% 95.10%
2,625,227.72
51.00% 51.00%
5.15% 5.15% 11,991,017.37 11,991,017.37
33.70% 33.70%
0.60% 0.60%
2.75% 2.75%
1.41% 1.41%
Total 36,491,017.37 36,491,017.37 3,275,227.72
(2) Concerning long-term equity investments, the Company’s ability to transfer funds to investee
entities is not restricted.4. Operating revenue and operating cost
(1) Itemize
Operating revenue Operating cost
Items This period Last period This period Last period
Main operation 546,982,940.41 698,156,697.45 472,222,694.06 571,710,291.09
Other 44,873,698.59 7,352,720.20 35,703,161.66 6,152,241.88
Total 591,856,639.00 705,509,417.65 507,925,855.72 577,862,532.97
(2) Main operation (classified by industries)
Operating revenue Operating cost
Name of industry
Operating revenue Operating cost Operating revenue Operating cost
Manufacturing of chemical raw
material and chemicals
546,982,940.41 472,222,694.06 698,156,697.45 571,710,291.09
Total 546,982,940.41 472,222,694.06 698,156,697.45 571,710,291.09
(3) Main operation (classified by products)
This period Last period
Name of products
Operating revenue Operating cost Operating revenue Operating cost
Agrochemicals such as
chemical fertilizer and
pesticide
546,982,940.41 472,222,694.06 698,156,697.45 571,710,291.09
Total 546,982,940.41 472,222,694.06 698,156,697.45 571,710,291.09
(3) Sales revenue from the top five clients of the Company is RMB 101,106,491.95 in total,
accounting for 18.48% of total sales revenue.
5. Investment income
(1) Itemize
Resource of investment income This period Last period
Income from long-term equity investment measured at
cost method 3,275,227.72 10,391,698.11
Income from disposal of long-term equity investment 1,440,000.00
Total 3,275,227.72 11,831,698.11
(2) Long-term equity investments measured at cost method are listed according to investees
Investee This period Last period Reason for change of increase/decrease
Hubei Sanonda Foreign Trading Co., Ltd. 10,391,698.11 Bonues dividends are not distributed in this
reporting period
Jingzhou Sanonda Aifusi Chemical
2,625,227.72
Bonues dividends are not distributed at the
last periodInvestee This period Last period Reason for change of increase/decrease
Industry Co., Ltd.
Jingzhou Longhua Petrochemicals Co.,
Ltd.
650,000.00 Bonues dividends are not distributed at the
last period
Jingzhou Tianyang Huibao Precision
Chemicals Co., Ltd
1,440,000.00
Transfer at the last period
Total 3,275,227.72 11,831,698.11
XX. Supplementary Information 料
1. Return on equity (ROE) and earnings per share (EPS)
(1) ROE and EPS
EPS
Weighted average ROE
Profit as of reporting Basic Diluted
period This
period
Last
period
This
period
Last
period
This
period
Last
period
Net profit attributable to common
shareholders of the Company 1.13% 3.99% 0.0209 0.0743 0.0209 0.0743
Net profit attributable to common
shareholders of the Company
after deduction of non-recurring
profit and loss 1.44% 4.00% 0.0266 0.0745 0.0266 0.0745
(2) Explanation on counting process
Items Jan. – Jun. 2010 Jan. – Jun. 2009
Net profit attributable to common shareholders of
the Company 12,409,697.08 44,124,619.58
Non-recurring gains and losses attributable to parent
company -3,391,452.76 -116,747.31
Net profit attributable to common shareholders of
the Company after deduction of non-recurring profit
and loss 15,801,149.84 44,241,366.89
Opening net assets attributable to common
shareholders of the Company 1,087,987,662.96 1,098,558,871.77
Ending net assets attributable to common
shareholders of the Company 1,102,126,641.75 1,112,883,918.38
Net assets attributable to common shareholders of
the Company after weighted average 1,095,057,152.36 1,105,721,395.08
Number of shares 593,923,220.00 593,923,220.00
Formulas for computing various indexes are as follows:① Weighted average ROE
Weighted average ROE＝P0/(E0＋NP÷2＋Ei×Mi÷M0– Ej×Mj÷M0±Ek×Mk÷M0)
Of which: P0 refers to Net profit attributable to common shareholders of the Company or net
profit attributable to common shareholders of the Company after deducting non-recurring gains
and losses; NP refers net profit attributable to common shareholders of the Company; E0 refers to
opening net assets attributable to common shareholders of the Company; Ei refers to additional net
assets attributable to common shareholders of the Company due to new share issuance or turning
debts into shares in the report period; Ej refers to reduced net assets attributable to common
shareholders of the Company due to buy-back business or cash dividends in the report period; M0
refers to the number of months during the report period; Mi refers to the number of months from
the next month when net assets increased to the end of the report period; Mj refers to the number
of months from the next month when net assets decreased to the end of the report period; Ek refers
to change of increase/decrease of net assets due to other transaction events; Mk refers to the
number of months from the next month when other net assets changed the end of the report period.
In the reporting period, for the business combination under the same control, net assets of investee
party shall be made weighting from the beginning of reporting period when calculating weighted
average ROE; net assets of investee party shall be made weighting from the next month after
combination date when calculating weighted average ROE after deducting non-recurring gains
and losses. Net profit and net assets of investee party shall be made weighting from the beginning
of comparison period when calculating weighted average ROE during the comparison period; net
assets of investee party shall not be made weighting (weighting being zero) when calculating
weighted average ROE after deducting non-recurring gains and losses during the comparison
period.
② Basic EPS
Basic EPS＝P0÷S
S＝S0＋S1＋Si×Mi÷M0– Sj×Mj÷M0-Sk
Of which: P0 refers to net profit attributable to shareholders holding ordinary shares or net profit
attributable to shareholders holding ordinary shares after deducting non-recurring gains and losses;
S weighted average number of ordinary shares issued out; S0 refers to total number of shares at
the period-begin; S1 refers to the number of shares increased due to transferring capital reserve
into share capital or dividend distribution of shares during the report period; Si refers to the
number of shares increased due to issuance of new shares or debt for equity swap during the report
period; Sj refers to the number of shares decreased due to stock repurchase during the report
period; Sk refers to the number of split-share during the report period; M0 refers to the number of
months during the report period; Mi refers to the number of months from the next month to the
end of the report period for increase of shares; Mj refers to the number of months from the nextmonth to the end of the report period for decrease of shares
③ Diluted EPS
Diluted EPS＝P1/(S0＋S1＋Si×Mi÷M0–Sj×Mj÷M0–Sk+weighted average amount of ordinary
shares increased due to subscription warrant, stock options, convertible bonds, etc.)
Of which, P1 refers to net profit attributable to shareholders holding ordinary shares or net profit
attributable to shareholders holding ordinary shares after deducting non-recurring gains and losses.
The Company considered all influence of dilutive potential ordinary share against net profit and
made adjustment according to the provisions of Accounting Standard for Business Enterprise.
When the Company calculated diluted EPS, it shall consider all influence of dilutive potential
ordinary share against net profit attributable to shareholders holding ordinary shares or net profit
attributable to shareholders holding ordinary shares after deducting non-recurring gains and losses,
till to minimum diluted EPS.
④ The Company has no dilutional potential common share but possibly having dilution in the
next period.
⑤ 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
Non-recurring gains and losses Amount Illustration
(1) Gains on disposal of non-current assets including reversal of the
impairment loss
603,607.10
(2) Government grant recognized in current year, except for those acquired in
the ordinary course of business or granted continuously in certain standard
quota according to relevant national laws and regulations
(3) Included in current profit and loss against the non-financial enterprises
occupation fee funds collected
(4) Debt restructuring gains and losses
(5) 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
(6) Other non-operating income and expense other than abovementioned -331,514.46
(7) Other non-recurring gains and losses in line with the definition of profit
and loss items
-4,850,000.00 Note 1
Total of non-recurring gains and losses -4,577,907.36Non-recurring gains and losses Amount Illustration
Less: non-recurring income tax effect of gains and losses -1,144,476.84
Non-recurring gains and losses after deducting influence of income tax -3,433,430.52
Of which: Attributable to owners of parent company -3,391,452.76
Attributable to minority shareholders -41,977.76
Note 1: Other non-recurring gains and losses in line with the definition of profit and loss items
include guarantee fee paid by the Company to Sanonda Group Corporation and China National
Agrochemical Corporation.
XXI. Approval of Financial Report
The Company’s financial report has been approved at the 2nd Session of the 6th Board of Directors
of the Company on 18 August 2010.VII. Documents Available For Reference
I. Text of Interim Report 2010 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
18 Aug. 2010
