Report for the First Quarter of 2011 of Hubei Sanonda Co., Ltd.
HUBEI SANONDA CO., LTD.
REPORT FOR THE FIRST QUARTER OF 2011
§1 Important Notes
1.1 The Board of Directors, the Supervisory Committee as well as directors, supervisors and senior
executives of Hubei Sanonda Co., Ltd. (hereinafter referred to as “the Company”) guarantee that
this report does not contain any false information, misleading statement or material omission and
will take individual and/or joint liabilities for the factuality, accuracy and completeness of this
report.
1.2 Financial statements for the first quarter of 2011 have not been audited by an accounting firm.
1.3 Mr. Li Zuorong, the company principal, and Mr. He Xuesong, the principal of the accounting
work and the person-in-charge of the accounting department (the accounting principal), hereby
confirm that the financial statements enclosed in the quarterly report is true and complete.
[English translation for reference only. Should there be any discrepancy between the two versions,
the Chinese version shall prevail.]
§2 Company Profile
2.1 Main accounting data and financial indices
Unit: RMB Yuan
31 Mar. 2011 31 Dec. 2010 Increase/decrease (%)
Total assets (Yuan) 2,349,433,380.35 2,113,217,292.03 11.18%
Owners’ equity attributable to shareholders of the
1,110,090,152.50 1,134,047,169.15 -2.11%
Company (Yuan)
Share capital (share) 593,923,220.00 593,923,220.00 0.00%
Net assets per share attributable to shareholders
1.87 1.91 -2.09%
of the Company (Yuan/share)
Jan.-Mar. 2011 Jan.-Mar. 2010 Increase/decrease (%)
Gross revenue (Yuan) 465,889,677.27 377,247,000.51 23.50%
Net profit attributable to shareholders of the
8,227,439.93 7,109,506.88 15.72%
Company (Yuan)
Net cash flows from operating activities (Yuan) -49,561,364.57 -118,185,339.00 -58.06%
Net cash flows per share from operating
-0.08 -0.20 -60.00%
activities (Yuan/share)
Basic EPS (Yuan/share) 0.0139 0.0120 15.83%
Diluted EPS (Yuan/share) 0.0139 0.0120 15.83%
Weighted average ROA (%) 0.73% 0.65% 0.08%
Weighted average ROA after deducting
1.17% 0.64% 0.53%
non-recurring gains and losses (%)
Items of non-recurring gains and losses
√Applicable □Inapplicable
Unit: RMB Yuan
Items of non-recurring gains and losses Amount Notes (if applicable)
Net current gains/losses from the period-begin to the combination date
arising from subsidiaries obtained under business combinations under -10,395.14
the same control
Other non-operating incomes and expenses -178,008.96
Fees paid by the Company to Sanonda
Other gain/loss items that satisfy the definition of non-recurring gains Group and China National
-6,350,000.00
and losses Agrochemical Corp. for their provision
of guarantees for the Company
Income tax effects 1,634,601.03
Minority interests effects 5,633.86
Total -4,898,169.21 -
1
Report for the First Quarter of 2011 of Hubei Sanonda Co., Ltd.
2.2 Total number of shareholders and shares held by the top ten shareholders not subject to trading
moratorium at the end of the reporting period
Unit: share
Total number of shareholders at the end of the
74,751, of which the total number of A-share holders being 50,312
reporting period
Shares held by the top ten shareholders not subject to trading moratorium
Shares not subject to trading moratorium
Full name of shareholder Type of share
held at the period-end
Sanonda Group Corporation 118,887,202 RMB ordinary shares
State-Owned Assets Administration Bureau of
4,169,266 RMB ordinary shares
Qichun County
GUOTAI JUNAN SECURITIES(HONGKONG)
3,432,689 Domestically listed foreign shares
LIMITED
Yuan Haixiang 3,002,349 RMB ordinary shares
Huang Yangsheng 2,678,950 RMB ordinary shares
Jingzhou Shashi District Rural Credit
2,500,000 RMB ordinary shares
Cooperative
Li Dongliang 2,445,338 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
§3 Significant Events
3.1 Significant changes in main accounting statement items and financial indicators as well as
reasons for these changes
√Applicable □Non-applicable
Unit: RMB Ten thousand
31 Mar. 2011 31 Dec. 2010
Financial statement Increase/decrease
(Jan.-Mar. (Jan.-Mar. Main reasons for change
items (%)
2011) 2010)
Monetary funds 42.98% Increase of short-term borrowings
29,733 20,794
Accounts Sales receivables within the
101.19%
receivable 17,266 8,582 normal credit term
Increase of capital needs for
Short-term
148.09% production and technical
borrowings 25,104 10,119
innovation
Increase of payables for raw
Accounts payable 38.94%
14,493 10,431 materials and construction
Increase of inter-company
Other payables 37.01%
4,427 3,231 payables
Freight and export expenses
Selling expense 1,831 1,043 75.58% increased as a result of the sale
rise.
Administrative Increase of production halt loss
2,474 1,425 73.54%
expense and payroll expense
Increase of guarantee fees and
Financial expense 2,028 979 107.17%
export agency fees
3.2 Progress of significant events as well as their influence and solutions
3.2.1 Non-standard audit opinion
□Applicable √Inapplicable
3.2.2 The Company provides funds for the controlling shareholder or its related parties or provides
external guarantees in violation of the prescribed procedure
□Applicable √Inapplicable
3.2.3 Significant contracts signed and executed concerning routine operation
□Applicable √Inapplicable
2
Report for the First Quarter of 2011 of Hubei Sanonda Co., Ltd.
3.2.4 Other
√Applicable □Inapplicable
With 28 Feb. 2011 as the combination date, the Company included Jingzhou Hongxiang Chemicals
Co., Ltd., a subsidiary obtained by the Company in a business combination under the same control,
into its consolidated financial statements for the reporting period. The relevant opening items in the
balance sheet were re-stated retrospectively, with the effect on retained earnings being RMB
-960,907.36 and the effect on equity attributable to owners of the Company being RMB
28,439,092.64. For the reporting period, Jingzhou Hongxiang Chemicals Co., Ltd. achieved net
profit of RMB -10,395.14 before the combination.
3.3 Commitments made by the Company, its shareholders and actual controller
Commitments made by the Company, its directors, supervisors, senior executives, shareholders
holding over 5% of the Company’s shares, actual controller and other related parties in the reporting
period, or such commitments carried down into the reporting period
□Applicable √Inapplicable
3.4 Warnings of possible loss or large-margin year-on-year change of the accumulative net profit
made during the period from the beginning of the year to the end of the next reporting period
according to prediction, as well as explanations on the reasons
□Applicable √Inapplicable
3.5 Other significant events
3.5.1 Securities investments
□Applicable √Inapplicable
3.5.2 Researches, interviews and visits received in the reporting period
No field researches, phone calls or written inquiries were received from any investor in the
reporting period.
3.6 Derivative investments
□Applicable √Inapplicable
3.6.1 Derivative investments held at the end of the reporting period
□Applicable √Inapplicable
§4 Attachments
4.1 Balance sheet
Prepared by Hubei Sanonda Co., Ltd 31 Mar. 2011 Unit: RMB Yuan
Closing balance Opening balance
Items
Consolidation The Company Consolidation The Company
Current Assets:
Monetary funds 297,325,178.77 226,856,036.37 207,943,720.75 141,059,742.96
Settlement reserves
Lendings to banks and other
financial institutions
Transactional financial assets
Notes receivable 24,022,655.77 21,667,655.77 33,591,881.21 31,931,881.21
Accounts receivable 172,658,119.14 142,436,417.73 85,817,244.11 79,739,307.64
Accounts paid in advance 22,370,474.51 16,921,465.20 17,358,455.95 12,147,154.26
Premiums receivable
Reinsurance premiums
receivable
Receivable reinsurance contract
reserves
Interest receivable
Dividend receivable
Other accounts receivable 36,624,936.90 120,928,608.87 34,747,002.71 100,040,050.80
Financial assets purchased
under agreements to resell
3
Report for the First Quarter of 2011 of Hubei Sanonda Co., Ltd.
Inventories 317,036,495.32 279,028,750.24 275,951,648.02 221,107,344.13
Non-current assets due within 1
year
Other current assets
Total current assets 870,037,860.41 807,838,934.18 655,409,952.75 586,025,481.00
Non-current assets:
Entrusted loans and advances
granted
Available-for-sale financial
assets
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment 10,828,382.63 81,503,311.36 10,828,382.63 48,983,405.95
Investing property 4,875,612.50 4,875,612.50 4,875,612.50 4,875,612.50
Fixed assets 687,133,470.60 638,657,923.72 707,041,960.12 658,308,612.67
Construction in progress 611,285,081.84 479,345,300.67 570,246,228.13 450,486,934.93
Engineering materials 1,578,083.24 0.00 164,468.82
Disposal of fixed assets -66,678.85 -66,678.85
Production biological assets
Oil-gas assets
Intangible assets 149,626,406.80 132,504,467.19 150,515,525.90 133,260,813.21
R&D expense
Goodwill
Long-term deferred expenses
Deferred income tax assets 14,135,161.18 10,084,602.65 14,135,161.18 10,084,602.65
Other non-current assets
Total of non-current assets 1,479,395,519.94 1,346,904,539.24 1,457,807,339.28 1,305,999,981.91
Total assets 2,349,433,380.35 2,154,743,473.42 2,113,217,292.03 1,892,025,462.91
Current liabilities:
Short-term borrowings 251,035,599.41 160,000,000.00 101,186,235.61 10,000,000.00
Borrowings from Central Bank
Customer bank deposits and
due to banks and other financial
institutions
Borrowings from banks and
other financial institutions
Transactional financial
liabilities
Notes payable
Accounts payable 144,933,290.11 112,293,631.88 104,313,009.97 77,890,791.49
Accounts received in advance 57,756,797.29 33,725,833.45 63,264,694.18 32,689,813.89
Financial assets sold for
repurchase
Handling charges and
commissions payable
Employee’s compensation
5,249,761.63 3,680,432.10 13,159,536.52 10,876,073.00
payable
Tax payable -22,126,635.66 -9,438,886.48 -25,483,838.77 -12,702,756.69
Interest payable
Dividend payable 349,463.30 349,463.30 349,463.30 349,463.30
Other accounts payable 44,274,727.11 29,146,423.31 32,314,989.04 25,112,456.35
Reinsurance premiums payable
Insurance contract reserves
Payables for acting trading of
securities
Payables for acting
underwriting of securities
Non-current liabilities due
200,000,000.00 200,000,000.00 200,000,000.00 200,000,000.00
within 1 year
Other current liabilities 0.00 0.00
Total current liabilities 681,473,003.19 529,756,897.56 489,104,089.85 344,215,841.34
Non-current liabilities:
Long-term borrowings 532,560,000.00 532,560,000.00 459,560,000.00 459,560,000.00
Bonds payable 0.00 0.00 0.00
4
Report for the First Quarter of 2011 of Hubei Sanonda Co., Ltd.
Long-term payables 7,640,000.00 7,640,000.00 7,640,000.00 7,640,000.00
Specific payables
Estimated liabilities
Deferred income tax liabilities
Other non-current liabilities 8,180,312.16 8,168,888.89 10,388,566.16 8,168,888.89
Total non-current liabilities 548,380,312.16 548,368,888.89 477,588,566.16 475,368,888.89
Total liabilities 1,229,853,315.35 1,078,125,786.45 966,692,656.01 819,584,730.23
Owners’ equity (or shareholders’
equity)
Paid-up capital (or share
593,923,220.00 593,923,220.00 593,923,220.00 593,923,220.00
capital)
Capital reserves 265,474,656.04 263,799,837.18 300,991,478.35 268,447,075.77
Less: Treasury stock 0.00 0.00 0.00
Specific reserves 17,835,047.79 9,071,254.58 14,502,682.06 7,566,658.23
Surplus reserves 74,787,056.27 74,787,056.27 74,787,056.27 74,787,056.27
Provisions for general risks
Retained profits 158,070,172.40 135,036,318.94 149,842,732.47 127,716,722.41
Foreign exchange difference
Total equity attributable to owners
1,110,090,152.50 1,076,617,686.97 1,134,047,169.15 1,072,440,732.68
of the Company
Minority interests 9,489,912.50 12,477,466.87
Total owners’ equity 1,119,580,065.00 1,076,617,686.97 1,146,524,636.02 1,072,440,732.68
Total liabilities and owners’
2,349,433,380.35 2,154,743,473.42 2,113,217,292.03 1,892,025,462.91
equity
4.2 Income statement
Prepared by Hubei Sanonda Co., Ltd Jan.-Mar. 2011 Unit: RMB Yuan
Jan.-Mar. 2011 Jan.-Mar. 2010
Items
Consolidation The Company Consolidation The Company
I. Total operating revenues 465,889,677.27 395,007,012.61 377,247,000.51 276,938,206.08
Including: Sales income 465,889,677.27 395,007,012.61 377,247,000.51 276,938,206.08
Interest income
Premium income
Handling charge and
commission income
II. Total operating cost 454,028,557.92 385,241,589.96 367,946,268.49 269,530,342.49
Including: Cost of sales 390,460,597.82 334,715,323.86 332,895,862.20 246,626,061.74
Interest expenses
Handling charge and
commission expenses
Surrenders
Net claims paid
Net amount withdrawn for
the insurance contract reserve
Expenditure on policy
dividends
Reinsurance premium
Taxes and associate
240,340.66 13,465.09 578,381.01 353,549.67
charges
Selling and distribution
18,306,826.20 12,260,269.20 10,426,761.12 5,795,978.06
expenses
Administrative expenses 24,738,310.21 18,425,436.94 14,254,874.63 7,348,573.44
Financial expenses 20,282,483.03 19,827,094.87 9,790,389.53 9,406,179.58
Asset impairment loss 0.00 0.00 0.00
Add: Gain/(loss) from change in
0.00 0.00 0.00
fair value (“-” means loss)
Gain/(loss) from investment
0.00 0.00 0.00
(“-” means loss)
Including: share of profits in
0.00
associates and joint ventures
Foreign exchange gains (“-”
means loss)
III. Business profit (“-” means
11,861,119.35 9,765,422.65 9,300,732.02 7,407,863.59
loss)
5
Report for the First Quarter of 2011 of Hubei Sanonda Co., Ltd.
Add: non-operating income 11,857.45 11,055.39 420,553.67 7,600.00
Less: non-operating expense 250,694.71 17,016.00 205,378.97 0.00
Including: loss from non-current
asset disposal
IV. Total profit (“-” means loss) 11,622,282.09 9,759,462.04 9,515,906.72 7,415,463.59
Less: Income tax expense 2,969,117.41 2,439,865.51 2,723,440.80 1,853,865.90
V. Net profit (“-” means loss) 8,653,164.68 7,319,596.53 6,792,465.92 5,561,597.69
Attributable to owners of the
8,227,439.93 7,319,596.53 7,109,506.88 5,561,597.69
Company
Minority shareholders’
425,724.75 -317,040.96 0.00
income
VI. Earnings per share
(I) basic earnings per share 0.0139 0.0120
(II) diluted earnings per
0.0139 0.0120
share
Ⅶ. Other comprehensive incomes
Ⅷ. Total comprehensive incomes 8,653,164.68 7,319,596.53 6,792,465.92 5,561,597.69
Attributable to owners of the
8,227,439.93 7,319,596.53 7,109,506.88 5,561,597.69
Company
Attributable to minority
425,724.75 -317,040.96 0.00
shareholders
Where there were business combinations under the same control in the reporting period, the
combined parties achieved net profits of RMB -10,395.14 before the combinations.
4.3 Cash flow statement
Prepared by Hubei Sanonda Co., Ltd Jan.-Mar. 2011 Unit: RMB Yuan
Jan.-Mar. 2011 Jan.-Mar. 2010
Items
Consolidation The Company Consolidation The Company
I. Cash flows from operating
activities:
Cash received from sale of
commodities and rendering of 360,268,014.34 308,330,374.13 255,075,991.51 188,607,604.01
service
Net increase of deposits from
customers and dues 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 deposits of
policy holders and investment
fund
Net increase of disposal of
tradable financial assets
Cash received from interest,
handling charges and
commissions
Net increase of borrowings
from banks and other financial
institutions
Net increase of funds in
repurchase business
Tax refunds received 10,820,609.29 8,276,893.65 4,357,301.43 1,919,719.19
Other cash received relating to
19,611,371.28 7,382,609.36 18,839,351.58 7,996,483.53
operating activities
Subtotal of cash inflows from
390,699,994.91 323,989,877.14 278,272,644.52 198,523,806.73
operating activities
Cash paid for goods and
362,922,240.74 305,714,437.34 334,005,625.53 249,407,442.80
services
6
Report for the First Quarter of 2011 of Hubei Sanonda Co., Ltd.
Net increase of customer
lendings and advances
Net increase of funds deposited
in the central bank and amount
due from banks
Cash for paying claims of the
original insurance contracts
Cash for paying interest,
handling charges and
commissions
Cash for paying policy
dividends
Cash paid to and for employees 33,006,626.20 25,718,272.05 23,076,475.49 17,598,536.82
Various taxes paid 4,720,603.50 2,374,793.75 2,897,733.13 62,077.72
Other cash payment relating to
39,611,889.04 46,575,382.92 36,478,149.37 23,533,034.35
operating activities
Subtotal of cash outflows from
440,261,359.48 380,382,886.06 396,457,983.52 290,601,091.69
operating activities
Net cash flows from operating
-49,561,364.57 -56,393,008.92 -118,185,339.00 -92,077,284.96
activities
II. Cash flows from investing
activities:
Cash received from disposal of
investments
Cash received from return on
investments
Net cash received from disposal
of fixed assets, intangible assets 400,698.67 69,346.00 50,114.00 15,450.00
and other long-term assets
Net cash received from disposal
of subsidiaries or other business
units
Other cash received relating
238,473.04 238,473.04
to investing activities
Subtotal of cash inflows
400,698.67 69,346.00 288,587.04 253,923.04
from investing activities
Cash paid to acquire fixed
assets, intangible assets and other 43,954,185.91 37,885,635.66 69,181,101.82 61,920,715.51
long-term assets
Cash paid for investment 26,017,144.00 26,017,144.00
Net increase of pledged loans
Net cash paid to acquire
subsidiaries and other business
units
Other cash payments relating to
6,041.31 6,041.31 158,901.51 158,901.51
investing activities
Subtotal of cash outflows from
69,977,371.22 63,908,820.97 69,340,003.33 62,079,617.02
investing activities
Net cash flows from investing
-69,576,672.55 -63,839,474.97 -69,051,416.29 -61,825,693.98
activities
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Including: Cash received from
minority shareholder investments
by subsidiaries
Cash received from
286,927,494.37 250,000,000.00 250,865,127.14 230,000,000.00
borrowings
Cash received from issuance
of bonds
Other cash received relating to
1,048,754.42 974,860.65
financing activities
Subtotal of cash inflows from
287,976,248.79 250,974,860.65 250,865,127.14 230,000,000.00
financing activities
7
Report for the First Quarter of 2011 of Hubei Sanonda Co., Ltd.
Repayment of borrowings 47,561,509.55 27,000,000.00 75,743,172.95 75,000,000.00
Cash paid for interest
expenses and distribution of 25,028,954.11 11,579,850.86 12,041,097.79 11,251,662.49
dividends or profit
Including: dividends or profit
paid by subsidiaries to minority
shareholders
Other cash payments relating
6,866,289.99 6,366,232.49 248,969.63 138,341.62
to financing activities
Sub-total of cash outflows from
79,456,753.65 44,946,083.35 88,033,240.37 86,390,004.11
financing activities
Net cash flows from financing
208,519,495.14 206,028,777.30 162,831,886.77 143,609,995.89
activities
IV. Effect of foreign exchange
rate changes on cash and cash
equivalents
V. Net increase in cash and cash
89,381,458.02 85,796,293.41 -24,404,868.52 -10,292,983.05
equivalents
Add: Cash and cash
207,943,720.75 141,059,742.96 474,460,623.29 424,584,953.40
equivalents at the period-begin
VI. Cash and cash equivalents at
297,325,178.77 226,856,036.37 450,055,754.77 414,291,970.35
the period-end
4.4 Auditor’s report
Auditor’s opinion: un-audited
§5 Other Information
5.1 Capital occupation by the principal shareholder and its affiliated enterprises for non-operating
purposes and the repayment progress thereof
□Applicable √Inapplicable
5.2 Provision of external guarantees in violation of the prescribed procedure
□Applicable √Inapplicable
8
