HUBEI SANONDA CO., LTD.
INTERIM REPORT 2012
Stock Code: 000553 (200553)
Short Form of Stock: Sanonda A (B)
August 2012
I. Important Notes
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.
All directors attend the Board meeting for reviewing the interim report.
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 2012
is true and complete.
Explanation
Refer
Item Content for explanation
to
Refer
Company/the Company Hubei Sanonda Co., Ltd.
to
Refer
Shenzhen Stock Exchange Shenzhen Stock Exchange
to
Refer Hubei Regulatory Bureau of China Securities Regulatory
CSRC Hubei Bureau
to Commission
Refer
Company Law Company Law of the People's Republic of China
to
Refer
Securities Law Securities Law of the People’s Republic of China
to
Refer Shenzhen Stock Exchange, Growth Enterprise Market Listing
Listing Rules
to Rules
Refer
Articles of Association Articles of Association of Hubei Sanonda. Co., Ltd.
to
Refer
Yuan RMB Yuan
to
II. Company Profile
(I) Basic information
A-share code 000553 B-share code 200553
A-share abbreviation Sanonda A B-share abbreviation Sanonda B
Stock exchange listed
Shenzhen Stock Exchange
with
Legal Chinese name of
湖北沙隆达股份有限公司
the Company
Abbr. of the legal Chinese
沙隆达
name of the Company
Legal English name of the
HUBEI SANONDA CO., LTD
Company
Abbr. of the legal English SANONDA
1
name of the Company
Legal representative of
the Company
Li Zuorong
Registered address No. 93, Beijing East Road, Jingzhou, Hubei
Postal code for the
434000
registered address
Office address No. 93, Beijing East Road, Jingzhou, Hubei
Postal code for the office
434000
address
Internet website of the
http://www.sanonda.cn
Company
E-mail sld@agr.chemchina.com
(II) For contact
Secretary to the Board of Directors Securities Affairs Representative
Name Li Zhongxi
No. 93, Beijing East Road,
Contact address
Jingzhou, Hubei
Tel. 07168208632
Fax 07168321099
E-mail li_zhongxi@263.net
(III) About information disclosure and where the interim report is placed
Newspapers designated by the
Securities Times, Shanghai Securities News and Ta Kung Pao
Company for information disclosure
Internet website designated by CSRC
http://www.cninfo.com.cn
for disclosing the semi-annual report
Where the interim report is placed Office of the Company
III. Financial and Business Highlights
(I) Major accounting data and indexes
Any retrospective adjustment in previous financial statements?
√Yes □No □Inapplicable
Major accounting data
Same period of last year Increase/decrease (%)
Reporting period
Major accounting data Before Subsequent to
(Jan.-Jun.) Subsequent to adjustment
adjustment adjustment
Gross operating revenues (RMB
1,116,755,277.07 1,017,322,730.21 996,324,042.36 12.09%
Yuan)
Operating profit (RMB Yuan) 36,134,785.29 32,083,860.15 41,816,529.93 -13.59%
Total profit (RMB Yuan) 36,137,520.90 31,654,900.41 42,882,922.13 -15.73%
2
Net profit attributable to
shareholders of the Company 23,986,378.19 19,639,089.64 30,353,680.99 -20.98%
(RMB Yuan)
Net profit attributable to
shareholders of the Company
23,972,136.64 24,699,839.48 29,532,789.39 -18.83%
after deducting non-recurring
gains and losses (RMB Yuan)
Net cash flow from operating
132,227,529.17 2,184,221.45 12,265,219.60 978.07%
activities (RMB Yuan)
As at the end of As at the end of last year Increase/decrease (%)
this reporting Before Subsequent to
period Subsequent to adjustment
adjustment adjustment
Total assets (RMB Yuan) 2,621,401,968.85 2,292,650,234.81 2,292,650,234.81 14.34%
Owners’ equity attributable to
shareholders of the Company 1,184,371,100.26 1,156,347,732.27 1,156,347,732.27 2.42%
(RMB Yuan)
Share capital (share) 593,923,220.00 593,923,220.00 593,923,220.00 0%
Major financial indexes
Same period of last year Increase/decrease (%)
Reporting period
Major financial indexes Before Subsequent to
(Jan.-Jun.) Subsequent to adjustment
adjustment adjustment
Basic EPS (RMB Yuan/share) 0.0404 0.0331 0.0511 -20.94%
Diluted EPS (RMB Yuan/share) 0.0404 0.0331 0.0511 -20.94%
Basic EPS after deducting
non-recurring gains and losses
(RMB Yuan/share) 0.0404 0.0416 0.0497 -18.71%
Fully diluted ROE (%) 2.03% 1.75% 2.68% -0.65%
Weighted average ROE (%) 2.05% 1.74% 2.64% -0.59%
Fully diluted ROE after
deducting non-recurring gains
and losses (%) 2.02% 2.2% 2.61% -0.59%
Weighted average ROE after
deducting non-recurring gains
and losses (%) 2.05% 2.19% 2.57% -0.52%
Net cash flow per share from
operating activities (RMB
Yuan/share) 0.223 0.004 0.021 961.9%
As at the end of As at the end of last year Increase/decrease (%)
this reporting Before Subsequent to
period Subsequent to adjustment
adjustment adjustment
Net assets per share attributable
to shareholders of the Company 1.99 1.95 1.95 2.05%
(RMB Yuan/share)
Liability/asset ratio (%) 54.46% 49.17% 49.17% 5.29%
Notes to major accounting data and financial indexes before the end of this reporting period (please write an
adjustment note if there’s any retrospective adjustment)
The Iterim Report 2011 has not be audited, as of data in the reporting period has been audited that the cretificated
accounting firm has made adjustment to date of the same period of last year.
3
(II) Accounting data differences under the domestic and overseas accounting standards
1. Net profit and net asset differences between financial reports disclosed according to the international and
Chinese accounting standards respectively
□Applicable √Inapplicable
2. Net profit and net asset differences between financial reports disclosed according to the overseas and
Chinese accounting standards respectively
□Applicable √Inapplicable
3. Specific items involving significant difference
Involved provisions of
Items involving significant international and/or
Amount (RMB Yuan) Reason for the difference
difference overseas accounting
standards
4. Notes to accounting data differences under the domestic and overseas accounting standards
(III) Items of non-recurring gains and losses
□Inapplicable √Applicable
Jan.-Jun. 2012
Items Notes
(RMB Yuan)
Gains and losses on disposal of non-current assets -317,369.13
Tax rebate, reduction or exemption due to
un-authorized approval or the lack of formal
approval documents
Government grants recognized in the current year,
except for those acquired in the ordinary course of
543,888.89
business or granted at certain quotas or amounts
according to the country’s unified standards
Capital occupation fees received from non-financial
enterprises that are included in current gains and
losses
Gains generated when the investment costs of the
Company’s acquiring subsidiaries, associates and
joint ventures are less than the fair value of
identifiable net assets in the investees attributable
to the Company in the acquisition of the
investments
Exchange gains and losses of non-monetary assets
Gains and losses through entrusting others to invest
or manage assets
Various asset impairment provisions due to acts of
God such as natural disasters
4
Gains and losses on debt restructuring
Enterprise reorganization expenses, such as
expenses on employee settlement and integration
Gains and losses on the parts exceeding the fair
value when prices of transactions become unfair
Net current gains and losses from the period-begin
to the combination date of subsidiaries due to
business combinations under the same control
Gains and losses on contingent matters which are
irrelevant to the normal operation of the Company
Gains and losses on fair value changes of
transactional financial assets and liabilities, and
investment gains on disposal of transactional
financial assets and liabilities and available-for-sale
financial assets, except for the effective hedging
business related to the Company’s normal operation
Reversal of impairment provisions for accounts
receivable which are separately tested for
impairment signs
Gains and losses on entrustment loans from
external parties
Gains and losses on fair value changes of investing
properties for which the fair value method is
adopted for subsequent measurement
Current gain and loss effect due to a just-for-once
adjustment to current gains and losses according to
requirements of taxation and accounting laws and
regulations
Custodian fee income from entrusted operations
with the Company
Other non-operating incomes and expenses besides
-223,784.15
the items above
Other gain and loss items that meet the definition of
non-recurring gains and losses
Minority interests effects -12,189.84
Income tax effects 683.90
Total 14,241.55 --
Explanation given by the Company to “other gain and loss items that meet the definition of non-recurring gains
and losses” and when it recognizes a non-recurring gain and loss item as a recurring one according to the nature
and features of its ordinary business:
Item Involving amount (Yuan) Notes
5
IV. Changes in Share Capital and Particulars about Shareholders
(I) Changes in share capital
1. Statement of changes of shares
□Inapplicable √Applicable
Before the change Increase/decrease (+, -) After the change
Capitalizat
Issuance ion of
Proportion Bonus Proportio
Amount of new public Others Subtotal Amount
(%) shares n (%)
shares reserve
fund
I. Shares subject to trading
39,052.00 0.01% 8,210.00 8,210.00 47,262.00 0.01%
moratorium
1. State-owned shares
2. State-owned legal
person shares
3. Other domestic shares
Including: Shares held by
domestic legal persons
Shares held by
domestic individuals
4. Shares held by overseas
shareholders
Including: Shares held by
overseas legal persons
Shares held by
overseas individuals
5. Shares held by senior
39,052.00 0.01% 8,210.00 8,210.00 47,262.00 0.01%
management staff
II. Shares not subject to 593,884,1 593,875,9
99.99% -8,210.00 -8,210.00 99.99%
trading moratorium 68.00 58.00
1. Ordinary shares 363,884,1 363,875,9
61.27% -8,210.00 -8,210.00 61.27%
denominated in RMB 68.00 58.00
2. Domestically listed 230,000,0 230,000,0
38.72% 38.72%
foreign shares 00.00 00.00
3. Overseas listed foreign
shares
4. Others
593,923,2 593,923,2
III. Total shares 100% 100%
20.00 20.00
Approval of share changes (if applicable)
Transfers in share changes
Influence of share changes on the latest financial indexes such as EPS and net assets per share (if any)
Other contents that the Company thinks necessary or is asked by securities regulators to be disclosed
6
2. Changes of shares subject to trading moratorium
□Applicable √Inapplicable
(II) Issuance and listing of securities
1. Securities issues in the previous three years
□Applicable √Inapplicable
2. Changes of the Company’s share number and structure, as well as the corresponding changes in its
asset-liability structure
□Applicable √Inapplicable
3. Existing employee shares
□Applicable √Inapplicable
(III) Shareholders and actual controller
1. Total number of shareholders at the end of the reporting period
The Company had 76,104.00 shareholders in total at the end of the reporting period.
2. Shareholding of the top ten shareholders
Particulars about shares held by the top ten shareholders
Number of Pledged or frozen shares
shares held
Name of shareholder (full Nature of Shareholding Total shares held
subject to Number of
name) shareholder percentage (%) at the period-end Status of shares
trading shares
moratorium
SANONDA GROUP
20.02% 118,887,202.00 0.00
CORPORATION
STATE-OWNED ASSETS
ADMINISTRATION
0.7% 4,169,266.00 0.00
BUREAU OF QICHUN
COUNTY
CHINA MERCHANTS
SECURITIES (HK) CO., 0.47% 2,793,507.00 0.00
LTD.
JINGZHOU SHASHI
DISTRICT UNION
0.42% 2,500,000.00 0.00
RURAL CREDIT
COOPERATION
CHINA OPPORTUNITIES
0.31% 1,830,000.00 0.00
H-B FUND
GUOTAI JUNAN
SECURITIES(HONGKON 0.28% 1,663,190.00 0.00
G) LIMITED
7
ZHOU JIN 0.24% 1,422,499.00 0.00
CHEN QIAOLING 0.23% 1,390,830.00 0.00
LIU GUOCHENG 0.23% 1,366,000.00 0.00
SUN LONG 0.22% 1,299,295.00 0.00
Notes to particulars about shareholders
Particulars about shares held by the top ten shareholders holding shares not subject to trading moratorium
√Applicable □Inapplicable
Number of shares held Type and number of shares
not subject to trading
Name of shareholder
moratorium at the Type Number
period-end
SANONDA GROUP CORPORATION 118,887,202.00 A-share 118,887,202.00
STATE-OWNED ASSETS ADMINISTRATION
4,169,266.00 A-share 4,169,266.00
BUREAU OF QICHUN COUNTY
CHINA MERCHANTS SECURITIES (HK) CO.,
2,793,507.00 B-share 2,793,507.00
LTD.
JINGZHOU SHASHI DISTRICT UNION
2,500,000.00 A-share 2,500,000.00
RURAL CREDIT COOPERATION
CHINA OPPORTUNITIES H-B FUND 1,830,000.00 B-share 1,830,000.00
GUOTAI JUNAN SECURITIES(HONGKONG)
1,663,190.00 B-share 1,663,190.00
LIMITED
ZHOU JIN 1,422,499.00 A-share 1,422,499.00
CHEN QIAOLING 1,390,830.00 A-share 1,390,830.00
LIU GUOCHENG 1,366,000.00 B-share 1,366,000.00
SUN LONG 1,299,295.00 A-share 1,299,295.00
Explanation on associated relationship among the top ten shareholders or/and acting-in-concert
Among the top ten shareholders of the Company, there exists no related party relationship between the controlling shareholder and
other shareholders and they are not parties acting in concert as prescribed in the Administrative Methods for Acquisition of Listed
Companies. And it is unknown whether the shareholders above are related parties or acting-in-concert parties as prescribed in the
Administrative Methods for Acquisition of Listed Companies.
3. Controlling shareholder and actual controller
(1) Change of the controlling shareholder and actual controller
□Applicable √Inapplicable
(2) Particulars about the controlling shareholder and actual controller
Is there a new actual controller?
□Yes √No □Applicable
The State-owned Assets Supervision and Administration
Name of the actual controller
Commission of the State Council
Type of the actual controller SASAC
Notes:
The State-owned Assets Supervision and Administration Commission of the State Council is the actual controller of the Company.
(3) Illustration on the relationship between the Company and its actual controller
8
SASAC
Holding 100% shares
China National Chemical Corporation
Holding 100% shares
China National Agrochemical Corporation
Holding 100% shares
Sanonda Group Corporation
Holding 20.02% shares
Hubei Sanonda Co., Ltd.
(4) The actual controller controls the Company via trust or other ways of asset management
□Applicable √Inapplicable
4. Other corporate shareholders with a shareholding over 10%
□Applicable √Inapplicable
(IV) Convertible corporate bonds
□Applicable √Inapplicable
V. Directors, Supervisors and Senior Management
9
(I) Shareholding changes of directors, supervisors and senior management
Number of Number of Receives
Of which: Number of
Number of shares shares Number of payment
number of stock options
Starting date Ending date shares held at increased in decreased in shares held at Reason for from
Name Office title Sex Age restricted held at
of office of office period-begin reporting reporting period-end change shareholder
shares held period-end
(share) period period (share) units or other
(share) (share)
(share) (share) related units?
Li Zuorong Chairman Male 62.00 9 Jul. 2010 9 Jul. 2013 10,690.00 10,690.00 No
GM;
Liu Anping Male 45.00 11 May 2012 9 Jul. 2013 0.00 0.00 No
Director
CFO;
He Xuesong Male 57.00 9 Jul. 2010 9 Jul. 2013 0.00 0.00 No
Director
Director;
Deng Guobin Male 45.00 9 Jul. 2010 9 Jul. 2013 4,880.00 4,880.00 No
Vice GM
Yin Hong Director Male 45.00 9 Jul. 2010 9 Jul. 2013 0.00 0.00 No
Independent
Li Hui Female 44.00 9 Jul. 2010 9 Jul. 2013 0.00 0.00 No
director
Independent
Ai Qiuhong Male 44.00 9 Jul. 2010 9 Jul. 2013 0.00 0.00 No
director
Independent
Zhang Huide Female 48.00 9 Jul. 2010 9 Jul. 2013 0.00 0.00 No
director
Independent
Li Dejun Male 55.00 9 Jul. 2010 9 Jul. 2013 0.00 0.00 No
director
Yang Guang Assistant to Male 40.00 19 Jul. 2010 9 Jul. 2013 0.00 0.00 No
10
GM
Assistant to
Xie Chengli Male 45.00 19 Jul. 2010 9 Jul. 2013 0.00 0.00 No
GM
Liu Jianhua Male 34.00 11 May 2012 9 Jul. 2013 No
Zhang
Supervisor Male 59.00 26 Feb. 2010 26 Feb. 2013 3,660.00 3,660.00 No
Jianguo
Liu Jun Supervisor Female 51.00 26 Feb. 2010 26 Feb. 2013 0.00 0.00 No
Jiang
Supervisor Male 38.00 26 Feb. 2010 26 Feb.2013 0.00 0.00 No
Chenggang
Wu Hairong Supervisor Male 45.00 26 Feb. 2010 26 Feb. 2013 0.00 0.00 No
Zhou Cheng Supervisor Male 43.00 26 Feb. 2010 26 Feb. 2013 0.00 0.00 No
Company
Li Zhongxi Male 42.00 19 Jul. 2010 9 Jul. 2013 0.00 0.00 No
Secretary
Total -- -- -- -- -- 19,230.00 19,230.00 -- --
Equity incentives granted to directors, supervisors and senior management during the reporting period
□Applicable √Inapplicable
11
(II) Post-holding particulars
Post-holding in shareholders units
□Inapplicable √Applicable
Name of the
Position in
person holding Receives payment
the Beginning date Ending date of
any post in any Name of the shareholder unit from the shareholder
shareholder of office term office term
shareholder unit?
unit
unit
Executive
Director,
Li Zuorong Sanonda Group Corporation GM, 26 Apr. 2012 31 Mar. 2013 No
Secretary of
the Party
Vice
Liu Anping Sanonda Group Corporation Secretary of 26 Apr. 2012 No
the Party
Assistant to
Yin Hong Sanonda Group Corporation 24 Aug. 2006
GM
Assistant to
Liu Jianhua Sanonda Group Corporation 26 Mar. 2012
GM
Notes to
post-holding in
other
shareholding
units
Information of post-holding in other units
□Applicable √Inapplicable
(III) Remuneration for directors, supervisors and senior management
The remuneration of directors, supervisors and senior management was checked and approved by the
Decision-making
Remuneration & Appraisal Committee under the Board of Directors, remuneration for independent
procedure for the
directors was reviewed and approved by the Board of Directors, and then the above two items were
remuneration of directors,
submitted for approval of the Shareholders’ General Meeting of the Company. The Rules for
supervisors and senior
Implementing Remuneration of Directors, Supervisors and Senior management drew up standing
management
principle of the remuneration of senior management.
Directors and senior management decided the appraisal index of operation achievements or
management duties for senior management, according to the annual operating target, while at the end of
Basis for determining the
the year, the Board appraised Senior management based on the work report and business achievement
remuneration of directors,
of Senior management. Independent directors would not enjoy salary in the Company while the
supervisors and senior
Company would drop annual allowance of RMB 48,000 to independent directors respectively.
management
Independent directors would present relevant meetings, perform responsibilities according to Articles of
Association and apply for allowance factually. Annual salary for supervisors was paid according to their
12
posts.
Actual payment of the The remuneration level was defined according to operating target of the Company and performance
remuneration of directors, appraisal results of senior management. The annual salary was divided into two parts: basic annual
supervisors and senior salary and efficiency annual salary. The first one are paid monthly and the second are paid after
management appraisal at period-end.
(IV) Change of directors, supervisors and senior management
Name Position Way of change Date of change Reason for change
Liu No longer take
26 Jun. 2012
Xingping post of director
Resigned from the
post of Standing
Liu Anping Director, GM GM, and engaged 11 May 2012 Engaged by the 6th Board of Directors
in GM of the
Company
Engaged in
Liu Jianhua Assistant to GM Assistant to GM of 11 May 2012 Engaged by the 6th Board of Directors
the Company
(V) Employees
Number of on-job employees 2,224.00
Number of retired employees for whom the Company shall bear
1,383.00
expenses
Function structure
Type of function Number of personnel
Production 1,655.00
Sale 67.00
Technical 191.00
Financial 32.00
Administration 279.00
Level of education
Level of education Number of personnel
Doctor degree 1.00
Master degree 9.00
University 221.00
College 429.00
High school and below 1,564.00
Notes to the employee particulars:
13
VI. Report of the Board of Directors
（I）Discussion and analysis by the management
In the first half of 2012, due to the continuous weakness of the global economy, fierce price competition caused
by overcapacity in the pesticide industry and the large stocks, and raw material and energy prices lingering at high
levels, earnings of the Company decreased to some degree. For the reporting period, the Company achieved
operating revenues of RMB 1.117 billion, up 12.09% from a year earlier; a total profit standing at RMB
36,137,500, down 15.73% on the year-on-year basis; and a net profit attributable to the Company of RMB
23,986,400, down 20.98% as compared with the corresponding period of last year.
Keeping to the strategy of “boosting production by sales”, the Company enhanced information collection and
market analysis, caught up with market changes, seized market opportunities, enhanced promotion and market
development, expanded marketing channels, properly adjusted the structure of products for export, made itself
more sensitive to risks and enhanced management over accounts receivable. As a result, the sales grew steadily.
Meanwhile, through constantly improving all basic management, carrying out informatization, improving internal
control and constantly improving its management quality, the Company managed to maintain a good production
and operation and keep its main product production devices running at a high capacity, safely and stably. Focusing
on the purposes of achieving goals of the main product technical innovation and production expansion projects,
the Company conducted a series of researches and constantly improved technical innovation. During the first half
of the year, the Company applied for 6 patents, including 5 invention patents and 1 utility model patent. And the
Company was granted 4 of them. With great effort in energy saving and consumption reduction, the Company
managed to achieve a year-on-year decrease of 10% on the energy consumption per RMB 10,000 of industrial
output.
Is the Company’s actual business performance 20% lower or higher than any earning forecast or business plan for
the reporting period which has been publicly disclosed earlier?
□ Yes √ No □ Inapplicable
Analysis to the business and performances of the Company’s main subsidiaries and stock-participating companies:
Unit: RMB Ten thousand
Registered Shareholding Operating
Name of subsidiary Nature of business Total assets Net assets Net profit
capital ratio revenue
Sanonda (Jingzhou) Production of 3000 90.00% 2,378.44 507.46 2,458.23 39.56
Pesticides and pesticides and
Chemicals Co., Ltd. intermediates
Hubei Sanonda Import & Export of 1000 90.00% 25,310.60 2,465.04 10,260.53 107.27
Foreign Trading Co., pesticides and
Ltd. intermediates
Hubei Sanonda 3000 98.50% 3,179.69 2,991.40 2,250.29 -343.53
Production and
Tianmen
sales of pesticides
Agrochemical Co.,
14
Ltd.
Jingzhou Longhua Production and 500 65.00% 4,300.40 1,632.15 6,326.42 117.49
Petrochemical Co., sales of chemical
Ltd. products
Production and sale 4000 98.50% 18,335.38 2,864.63 133.76 -193.89
Jingzhou Hongxiang of chemical raw
Chemical Co., Ltd. materials
All risk factors that might have adverse impact on the Company’s effort to realize its future development strategy
and business goals:
A. The deteriorating European debt crisis, the slowdown in recovery of the US economy and other factors affect
growth of the domestic economy. Domestic and overseas economies are under great pressure of falling. These will
surely produce an unfavorable impact on the Company.
B. Due to overcapacity in the pesticide industry as a whole, price competition is extremely fierce. What’s worse,
international pesticide enterprises are accelerating their march into the domestic market.
C. Prices for chemical raw materials and energy lingers at high levels, producing a great impact on the Company’s
production cost.
D. The rising requirements for environmental project will also increase the Company’s operating costs.
1. Main business lines and their operating results
（1）Main business lines classified by industries and products
Unit: RMB Yuan
Increase/decrease Increase/decrease
Increase/decrease
of operating of gross profit
of operating cost
Industries/product Operating Gross profit rate revenue rate compared
Operating cost compared with
s revenue (%) compared with with the same
the same period
the same period period last year
last year (%)
last year (%) (%)
Industry
Chemical raw
materials and
1,083,164,933.46 928,161,925.69 14.31% 13.19% 16.56% -2.47%
chemicals
production
Product
New chemical
materials and
8,290,427.16 4,256,668.64 48.66% 2.91% -9.07% 6.77%
special chemical
products
Petro-chemical
and refined 57,932,775.77 48,252,498.08 16.71% -1.04% -1.96% 0.79%
chemical
15
products
Basic
(chlor-alkali)
3,381,404.09 3,182,528.21 5.88% 4.32% -0.28% 4.34%
chemical
products
Agrochemicals
like fertilize, 1,136,141,562.19 995,051,466.51 12.42% 6.10% 7.82% -1.39%
pesticide, etc
Internal
-122,581,235.75 -122,581,235.75 0% -33.26% -33.26% 0%
counteraction
（2）Main business lines classified by regions
Unit: RMB Yuan
Increase/decrease compared with the same
Region Operating revenue
period last year (%)
Domestic 634,193,164.65 2.37%
Overseas 571,553,004.56 9.68%
Internal offset amount -122,581,235.75 -33.26%
（3）Reasons for significant changes in main business and its structure
□Applicable √Inapplicable
（4）Reasons for significant changes in profitability of main business (gross profit rate) compared with that
in the last year
□Applicable √Inapplicable
（5）Analysis on reasons of significant changes in profit breakdown compared with the last year
□Applicable √Inapplicable
（6）Business nature, main products/services, net profit and other particulars about subsidiaries which
made a contribution over 10% to the Company’s net profit for the reporting period
□Applicable √Inapplicable
(7) Problems and difficulties encountered in operation
A．The tough economic situation at home and abroad, the oversupply circumstance in domestic pesticide market,
and the factors of low temperature in the first half year, delayed seasons, intense price competition between the
16
manufacturers and complex and changeable market situation, these make the sales become more difficult.
B. The increasing price of raw materials & energy and unfavorable result of decreasing energy consumption
makes an unfavorable main business profit margin for the Company.
C. The recession of domestic real economy and constraint bank credit all cause the increase of financing costs.
D. The pressure from environmental protection is still large.
2. Internal control rules in relation to fair value measurement
□Applicable √Inapplicable
3. Foreign-currency financial assets and liabilities held
□Applicable √Inapplicable
（II）Investments
1. General utilization of the raised funds
□Applicable √Inapplicable
17
2. Projects promised to be invested with raised funds
□Applicable √Inapplicable
18
3. Change of projects invested with raised funds
□Applicable √Inapplicable
4. Significant projects invested with non-raised funds
√Applicable □Inapplicable
Unit: RMB Ten thousand
Disclosure
Amount for the
Project name date of the first Project progress Project earnings
project
announcement
10,000-ton / year pyridine and
10,556 98.5% Unfinished
derivative
Public works for the new
3,363 85.36% Under the construction
district—integrated dock
2nd phase of PMIDA 7,708 99.45% Main project finished basically
20000t\a,4-D acid project 6,014 100% Reaching the expectation
Total 27,641 -- --
Explanation on significant non-raised funds investment projects
（III）Revision of the Board of Directors’ business plan for the second half of the year
□Applicable √Inapplicable
（IV）Business performance estimate for Jan.-Sept. 2012
Warnings of estimated possible losses or major changes of the accumulative net profit achieved during the period
from the beginning of the year to the end of the next reporting period compared with the same period of last year,
as well as the reasons
□Applicable √Inapplicable
（V）Explanation of the Board of Directors on “Non-standard Auditing Report” issued by the
CPA firm for the reporting period
□Applicable √Inapplicable
（VI）Explanation of the Board of Directors on changes and solutions of the issues involved in
the “Non-standard Auditing Report” issued by the CPA firm for last year
□Applicable √Inapplicable
19
（VII）State the discussion results of the Board of Directors on the reasons and influence of
the Company’s accounting policy and estimate alterations or significant accounting error
correction
□Applicable √Inapplicable
（VIII）Formulation and execution of the Company’s cash dividend policy
1. Articles 155 in the Articles of Association of the Company stipulate the profits distribution policy and
decision-making procedures for the Company, and it executes strictly. The independent directors of the Company
fulfill their responsibilities diligently and issue their independent opinion on the profits distribution plan over the
past years, so as to protect the legal interest of minority shareholders. As for the Company gained profits but
didn’t issue the cash dividends distribution plan, the Board of Directors all explained on the reason of no
distribution, etc., and the profit distribution plans over the past years were all reviewed and approved by the Board
of Directors then submitted to the Shareholders’ General Meeting for approval.
2. According to the Notice of CSRC on Further Implementing Matters Related to Cash Dividend Distribution by
Listed Companies and relevant documents from Hubei CSRC Bureau, the Company reviewed and approved the
Proposal on Amending the Articles of Association at the 13th Session of the 6th Board of Directors held on 19 Aug.
2012. And the amended articles specified the dividends distribution policies, decision-making procedures, interval
period, detailed conditions, ratio, and specified safeguard measures on fully listening to the opinion of
independent directors and minority shareholders on profits distribution as well as the conditions on adjustment of
cash dividends distribution policy, etc.. The Company will strictly execute the above relevant rules and
regulations.
（IX）Pre-plan for profit distribution or turning capital reserve into share capital
□Applicable √Inapplicable
（X）The accumulative retained profit as at the end of 2011 is a positive number but the
Company has not put forward a cash dividend pre-plan.
√Applicable □Inapplicable
Accumulated retained profits at the end of 2011 197,544,620.36
Purpose of relevant retained funds Supplementing the current funds of the Company
Generate gains or not? √ Yes □ No □ Inapplicable
Reasons of difference between actual income and estimated
income
Explanation on other particulars
（XI）Other events to be disclosed
On 10 May 2012, the Company has disclosed the Significant Assets Reorganization Preplan and relevant
documents on the designated medium in accordance with No. 26 Format Guidelines. During the reporting period,
20
the Company actively coordinated China National Agrochemical Corporation on engaging relevant agency to
conduct the audit of the assets planned to purchase and the appraisal work as well as environmental protection
checking work.. And now the above work is conducted as scheduled.
（ XII ） The Company’s liabilities, credit changes and future cash arrangements for
debt-clearing (Only listed companies with convertible corporate bonds are required to fill the
table below.)
□Applicable √Inapplicable
VII. Significant Events
（I）Corporate governance
During the reporting period, in accordance with relevant national laws, rules, the Basic Norms of Internal Control
for Enterprises and relevant supporting guidelines as well as the Work Plan on Implementation of Internal Control
Standards promulgated by the Company, the Company came through the preparation phase, construction phase
and Trial run phase, ect., and stably promoted the work on construction of internal control system, as well as
finished the promulgation of Internal Control Brochure of the Company and then continued to revise and perfect,
which was planned to submit to the Board of Directors for review and approved.
According to the Notice of CSRC on Further Implementing Matters Related to Cash Dividend Distribution by
Listed Companies and relevant documents from Hubei CSRC Bureau, the Company revised relevant contents,
such as profits distribution policies and decision-making procedures, etc.. And the Articles of Association further
specified the dividends distribution policies, decision-making procedures, interval period, detailed conditions,
ratio, and specified safeguard measures on fully listening to the opinion of independent directors and minority
shareholders on profits distribution as well as the conditions on adjustment of cash dividends distribution policy,
etc.. The Company will strictly execute the above relevant rules and regulations.
In accordance with CSRC Stipulation on Establishment of Information Insider Registration Management Rules for
Listed Companies (Zheng-Jian-Hui-Gong-Gao [2011] No. 30) and relevant regulations of Shenzhen Stock
Exchange, the Company revised the Information Insider Registration Management Rules in time, meanwhile, it
revised the Implementation Rules of the Special Committees under the Board of Directors of the Company, and
promulgated the Raised Funds Management Rules, etc.. Besides, it continued to perfect its internal control system
and timely check and supervise the situation on execution of internal control rules, which enhanced its
management level and risks prevention capacity, so as to effectively ensure its standardized operation and health
sustainable development.
（II）Execution of the plans for profit distribution, turning capital reserve into share capital
or new share issuance which had been made in the previous period and were carried out in
the reporting period
□Applicable √Inapplicable
21
(III) Significant litigations and arbitrations
□Applicable √Inapplicable
The Company was not involved in any significant lawsuit or arbitration during the reporting period.
22
(IV) Bankruptcy or reorganization events
□Applicable √Inapplicable
(V) Holding equity of other listed companies and joint financial enterprises
1. Securities investment
□Applicable √Inapplicable
Notes of securities investment
2. Holding equity of other listed companies
□Applicable √Inapplicable
Notes of holding equity of other listed companies
3. Holding equity of non-listed financial enterprises
□Applicable □Inapplicable
Notes of holding equity of non-listed financial enterprises
Name of Changes in
Gain/loss in
entity in Proportion in owners’
Initial investment Number of Book value the Accounting Equity
which the total equities equity in the
amount equities held at period-end reporting item source
Company of the entity reporting
period
holds equities period
Hubei Bank 20,000,000.00 20,000,000 1.18% 8,008,982.63 0.00 0.00
Long-term Purchase of
Corporation equity corporate
investment stock
Limited
Total 20,000,000.00 20,000,000 - 8,008,982.63 0.00 0.00 - -
4. Trading stocks of other listed companies
□Applicable √Inapplicable
Notes of trading stocks of other listed companies
(VI) Assets transaction events
23
1. Purchase of assets
□Applicable √Inapplicable
Notes to purchase of assets:
2. Sale of assets
□Applicable √Inapplicable
Notes to sale of assets:
3. Exchange of assets
□Applicable √Inapplicable
Notes to exchange of assets:
24
4. Business combination
□Applicable √Inapplicable
5. Progress of these events after the publication of the assets reorganization report or public notices on the
purchases or sales of assets, as well as the influences of these events on the operation results and financial
status of the Company in this reporting period
□Applicable √Inapplicable
(VII) Explanation on shareholding increase scheme during the reporting period proposed or
implemented by the principal shareholders and act-in-concert persons
□Applicable √Inapplicable
(VIII) Implementation situation and influence of equity incentive plan of the Company
□Applicable √Inapplicable
(IX) Significant related-party transactions
25
1. Related-party transactions relevant to routine operation
√ Applicable □ Inapplicable
Reason for
significant
Pricing Proportion in Settlement
Type of the Content of the Transaction Transaction Influence on Market price difference
principle of the same kind of method of the
Related party Relationship related-party related-party price (RMB amount (RMB the profits of (RMB Ten between the
related-party transactions related-party
transaction transaction Ten thousand) Ten thousand) the Company thousand) transaction
transaction (%) transaction
price and the
market price
Sanonda Group Parent Cash
Purchase Raw materials Market price 1,426,054.2 0.15%
Corporation company remittance
Sanonda Group Parent Chemical raw Cash
Sale Market price 2,569,788.52 0.23%
Corporation company materials remittance
Jingzhou
Sanonda The same Packaging Cash
Purchase Market price 2,481,724.84 0.26%
Advertising parent company materials remittance
Co., Ltd.
Bluestar Under
Environmental the same Cash
Purchase Raw materials Market price 13,500
Engineering ultimate remittance
Co., Ltd. controller
Under
China National
the same Cash
Agrochemical Purchase Raw materials Market price 8,227,400 0.86%
ultimate remittance
Corporation
controller
China National Actual Sale Pesticides Market price 3,972,713.5 0.35% Cash
26
Agrochemical controller remittance
Corporation
Under
Jiangsu Anpon
the same Cash
Electrochemica Sale Pesticides Market price 3,360,000 0.3%
ultimate remittance
l Co., Ltd
controller
Hubei Jingzhou
Associated Sales of
Huaxiang Cash
enterprises of Sale dynamic Market price 9,864,000 0.88%
Chemicals Co., remittance
parent company chemical
Ltd.
Total -- -- -- -- -- --
Details of large amount of sales returns
The routine related-party transactions for this time can give full play to the advantage of purchase and sales of Sanonda Group
Necessity and continuity of related-party transaction as well as
Corporation, so as to provide stable and reliable source of raw materials and further ensure the normal production and operation
reason of choosing the related party (but not other transaction
activities of the Company. The Company’s routine related-party transactions won’t generate negative effect on the Company and
parties) to conduct the said transaction
non-related party shareholders, thus such transactions will continue.
Impacts of related-party transaction on independency of the The above related transactions have no influence on the independency of the Company, thus its main business won’t form the
Company dependency on related parties due to such transactions.
Dependant degree of the Company on related party and relevant
solutions for the dependence (if any)
As for the prediction on the total amount of routine related-party
The amount of routine management transactions predicted to be RMB 100 million in the year, of which RMB 31.92 million actually
transactions to be occurred in the reporting period by relevant
occurred during the reporting period, accounting for 31.92% of the total prediction amount for the year.
types, the actual performance in the reporting period
The related-party transactions between the Company and its related parties are in line with the principles of voluntariness, equality ,
Explanation on related-party transaction
mutual benefit and fair, without any harm to the interest of the Company.
27
Related-party transactions relevant to routine operation
Selling products and providing labor services to related parties Purchasing products and receiving labor services from related parties
Related party Transaction amount (RMB Ten Proportion in same kind of Transaction amount (RMB Ten Proportion in same kind of
thousand) transactions (%) thousand) transactions (%)
Sanonda Group Corporation 2,569,788.52 0.23% 1,426,054.2 0.15%
Jingzhou Sanonda Advertising Co., Ltd. 2,481,724.84 0.26%
Bluestar Environmental Engineering Co.,
13,500
Ltd.
China National Agrochemical Corporation 3,972,713.5 0.35% 8,227,400 0.86%
Jiangsu Anpon Electrochemical Co., Ltd 3,360,000 0.3%
Hubei Jingzhou Huaxiang Chemicals Co.,
9,864,000 0.88%
Ltd.
Total 19,766,502.02 12,148,679.04
Of which: the total amount of related-party transactions of the Company regarding selling products or providing labor services to the controlling shareholder and subsidiaries
during the reporting period stood at RMB 19,770,000.
2. Related-party transactions regarding purchase and sales of assets
□Applicable √Inapplicable
3. Significant related-party transitions with joint investments
□Applicable √Inapplicable
28
4. Significant credits and liabilities with related parties
□Applicable √Inapplicable
Capital occupation during the reporting period and debt-clearing progress
□Applicable √Inapplicable
The accountability plan put forward by the Board of Directors when the Company had not completed collecting the capital occupied for non-operating purposes by the end
of the reporting period
□Applicable √Inapplicable
29
5. No other significant related-party transactions occurred.
(X) Significant contracts and execution
1. The trust, contract and lease whose profits reaching more than 10% (including 10%) of the total profits
of the Company in the reporting period
(1) Status of trust
□Applicable √Inapplicable
（2）Particulars about contracting
□Applicable √Inapplicable
（3）Particulars about leasing
□Applicable √Inapplicable
2. Guarantees provided by the Company
√Applicable □Inapplicable
Unit: RMB Ten thousand
Guarantees provided by the Company for external parties (excluding those for subsidiaries)
Disclosure Guarante
Actual
date of Actual e for a
Amount for occurrence date Type of Period of Executed
Guaranteed party relevant guarantee related
guarantee (date of guarantee guarantee or not
announcem amount party or
agreement)
ent not
Guangxi Hechi 12 Jan.
10,000 12 Jan. 2008 10,000 Guarantee Five years No Yes
Chemicals Co., Ltd. 2008
Total external guarantee line Total actual occurred amount
approved during the reporting of external guarantee during
period (A1) the reporting period (A2)
Total external guarantee line that Total actual external guarantee
has been approved at the end of balance at the end of the 10,000
the reporting period (A3) reporting period (A4)
Guarantees provided by the Company for its subsidiaries
Guaranteed party Disclosure Amount for Actual Actual Type of Period of Executed Guarante
30
date of guarantee occurrence date guarantee guarantee guarantee or not e for a
relevant (date of amount related
announcem agreement) party or
ent not
Hubei Sanonda
16 Mar.
Foreign Trading Co., 28,200 15 Mar. 2012 28,200 Guarantee One year No Yes
2012
Ltd.
Total guarantee line approved for Total actual occurred amount
the subsidiaries during the of guarantee for the
28,200 28,200
reporting period subsidiaries during the
(B1) reporting period (B2)
Total guarantee line that has been
Total actual guarantee balance
approved for the subsidiaries at
28,200 for the subsidiaries at the end 28,200
the end of the reporting period
of the reporting period (B4)
(B3)
Total guarantee amount provided by the Company (total of the above-mentioned two kinds of guarantees)
Total guarantee line approved Total actual occurred amount
during the reporting period 28,200 of guarantee during the 28,200
(A1+B1) reporting period (A2+B2)
Total guarantee line that has been
Total actual guarantee balance
approved at the end of the
28,200 at the end of the reporting 38,200
reporting period
period (A4+B4)
(A3+B3)
Proportion of total guarantee amount (A4+B4) to the net assets
32
of the Company
Of which:
Amount of guarantee for shareholders, actual controller and
10,000
related parties (C)
Amount of debt guarantee provided for the guaranteed party
whose asset-liability ratio is not less than 70% directly or 28,200
indirectly (D)
Part of the amount of the total guarantee over 50% of net assets
(E)
Total amount of the above three guarantees (C+D+E) 38,200
The Company’s guarantees for subsidiaries are all joint-liability
Explanation on possible bearing joint responsibility of
guarantees, and it provided related-party mutual-guarantee of
liquidation due to immature guarantee
RMB 100 million with Guangxi Hechi Chemicals Co., Ltd..
Explanation on provision of guarantees for external parties in
violation of the prescribed procedure
31
3. Entrusted financial management
□Applicable √Inapplicable
32
4. No performance of significant contracts relevant to routine operation
5. Other significant contracts
□Applicable √Inapplicable
(XI) Explanation on issuing corporate bonds
□Applicable √Inapplicable
(XII) Performance of commitments
1. Commitments made by the Company or shareholders holding over 5% of the Company’s shares in the
reporting period, or such commitments carried down into the reporting period
□Applicable √Inapplicable
2. The Company’s assets or projects exist profitable prediction and the reporting period is in such
prediction period, it states the profits from the assets or projects reaching original prediction and relevant
reasons
□Applicable √Inapplicable
(XIII) Items of other comprehensive income
Unit: RMB Yuan
Items This reporting period Same period of last year
1. Profits/(losses) from available-for-sale financial assets
Less: Effects on income tax generating from available-for-sale
financial assets
Net amount transferred into profit and loss in the current period that
recognized into other comprehensive income in prior period
Subtotal
2. Interests in the investee entities’ other comprehensive income as per
equity method
Less: Effects on income tax generating from the interests in the
investee entities’ other comprehensive income as per equity method
Net amount transferred into profit and loss in the current period that
recognized into other comprehensive income in prior period
Subtotal
3. Profits/(losses) from cash flow hedging instrument
Less: Effects on income tax generating from cash flow hedging
instrument
Net amount transferred into profit and loss in the current period that
recognized into other comprehensive income in prior period
33
The adjustment value that is the converted initial recognition amount of
arbitrage project
Subtotal
4. Converted amount of foreign currency financial statements
Less: Net value of disposal of oversea operations that recognized into
current profit and loss
Subtotal
5. Other
Less: Effects on income tax generating from the others that included
into other comprehensive income
Net amount transferred into profit and loss in the current period that
recognized into other comprehensive income in prior period
Subtotal
Total
(XIV) Particulars about researches, visits and interviews received in this reporting period
Main discussion and
Time of reception Place of reception Way of reception Visitor type Visitor materials provided by the
Company
Why was trading of the
Individual
13 Feb. 2012 The Company By phone Individual Company’s shares
investor
suspended?
Why was trading of the
Individual
14 Feb. 2012 The Company By phone Individual Company’s shares
investor
suspended?
Would the Company
Individual
7 Mar. 2012 The Company By phone Individual postpone resumption of its
investor
share trading?
Would the Company
Individual
8 Mar. 2012 The Company By phone Individual postpone resumption of its
investor
share trading?
Was the Company able to
Individual
19 Mar. 2012 The Company By phone Individual resume share trading on
investor
April 9th?
Was the Company able to
Individual
8 May 2012 The Company By phone Individual resume share trading on
investor
May 10th?
Individual Would the Company issue
11 Jun. 2012 The Company By phone Individual
investor A-shares or B-shares in
34
the additional issue
involved in the significant
reorganization?
Main contents reviewed at
Individual
20 Jun. 2012 The Company By phone Individual the special general
investor
meeting?
(XV) Particulars about engagement and disengagement of CPAs firm
Has this semi-annual report been audited?
√Yes □ No □ Inapplicable
CPAs firm engaged for now
Name of domestic CPAs firm RSM China Certified Public Accountants Co., Ltd. (LLP)
Remuneration for domestic CPAs firm (RMB 0’000) 45
Consecutive years of audit service provided by
2 years
domestic CPAs firm
Name of registered accounts of domestic CPAs firm Hao Guomin and Kuang Xiaochang
Name of overseas CPAs firm
Remuneration of overseas CPAs firm (RMB 0’000)
Consecutive years of audit service provided by
overseas CPAs firm
Name of registered accountants of overseas CPAs
firm
Whether changed to engage the CPAs firm?
□ Yes √ No □ Inapplicable
(XVI) Particulars about punishment and rectification order received by the Company, its
directors, supervisors, senior executives, shareholders, actual controller and acquirer
□Applicable √Inapplicable
(XVII) Explanation on other significant events
√Applicable □Inapplicable
(XVIII) Particulars about significant changes in the profitability, asset status and credit status
of the Company’s convertible bonds guarantor
(Only listed companies which issue convertible corporate bonds are required to fill the form below.)
□Applicable □Inapplicable
35
(XIX) Index for information disclosure
Internet website for disclosing
Newspapers for disclosing
Event Publishing date information and the searching
information and relevant page
approach
China Securities Journal,
Announcement on Earnings
Securities Times and Ta Kung 6 Jan. 2012 http://www.cninfo.com.cn/
Forecast for Year 2011
Pao
Announcement on Trading China Securities Journal,
Suspension Due to Significant Securities Times and Ta Kung 10 Feb. 2012 http://www.cninfo.com.cn/
Events Pao
Announcement on Trading China Securities Journal,
Suspension Due to Significant Securities Times and Ta Kung 14 Feb. 2012 http://www.cninfo.com.cn/
Assets Reorganization Pao
Announcement on Progress of China Securities Journal,
Significant Assets Securities Times and Ta Kung 24 Feb. 2012 http://www.cninfo.com.cn/
Reorganization Pao
Announcement on Progress of China Securities Journal,
Significant Assets Securities Times and Ta Kung 2 Mar. 2012 http://www.cninfo.com.cn/
Reorganization Pao
Announcement on Progress of
China Securities Journal,
Significant Assets
Securities Times and Ta Kung 9 Mar. 2012 http://www.cninfo.com.cn/
Reorganization and Delay of
Pao
Trading Resumption
China Securities Journal,
Announcement on Routine
Securities Times and Ta Kung 16 Mar. 2012 http://www.cninfo.com.cn/
Related-party Transactions
Pao
Announcement on Providing China Securities Journal,
Guarantees for Controlled Securities Times and Ta Kung 16 Mar. 2012 http://www.cninfo.com.cn/
Subsidiaries in 2012 Pao
Announcement on Resolutions China Securities Journal,
th
Made at the 10 Session of the Securities Times and Ta Kung 16 Mar. 2012 http://www.cninfo.com.cn/
th
6 Supervisory Committee Pao
Announcement on Resolutions China Securities Journal,
th
Made at the 10 Session of the Securities Times and Ta Kung 16 Mar. 2012 http://www.cninfo.com.cn/
6th Board of Directors Pao
Announcement on
Related-party Transaction China Securities Journal,
Regarding Payment of Securities Times and Ta Kung 16 Mar. 2012 http://www.cninfo.com.cn/
Guarantee Fee for Controlling Pao
Shareholder
36
China Securities Journal,
Full Text and Summary of 2011
Securities Times and Ta Kung 16 Mar. 2012 http://www.cninfo.com.cn/
Annual Report
Pao
Announcement on Progress of China Securities Journal,
Significant Assets Securities Times and Ta Kung 16 Mar. 2012 http://www.cninfo.com.cn/
Reorganization Pao
Announcement on Progress of China Securities Journal,
Significant Assets Securities Times and Ta Kung 23 Mar. 2012 http://www.cninfo.com.cn/
Reorganization Pao
Announcement on Progress of
China Securities Journal,
Significant Assets
Securities Times and Ta Kung 30 Mar. 2012 http://www.cninfo.com.cn/
Reorganization and Delay of
Pao
Trading Resumption
Announcement on Progress of China Securities Journal,
Significant Assets Securities Times and Ta Kung 11 Apr. 2012 http://www.cninfo.com.cn/
Reorganization Pao
Announcement on Progress of
China Securities Journal,
Significant Assets
Securities Times and Ta Kung 18 Apr. 2012 http://www.cninfo.com.cn/
Reorganization and Delay of
Pao
Trading Resumption
Notice on Convening the 2011 China Securities Journal,
Annual Shareholders’ General Securities Times and Ta Kung 19 Apr. 2012 http://www.cninfo.com.cn/
Meeting Pao
Announcement on Resolutions China Securities Journal,
th
Made at the 11 Session of the Securities Times and Ta Kung 19 Apr. 2012 http://www.cninfo.com.cn/
th
6 Board of Directors Pao
China Securities Journal,
Report of the First Quarter of
Securities Times and Ta Kung 19 Apr. 2012 http://www.cninfo.com.cn/
2012
Pao
Announcement on Progress of China Securities Journal,
Significant Assets Securities Times and Ta Kung 25 Apr. 2012 http://www.cninfo.com.cn/
Reorganization Pao
Announcement on Progress of China Securities Journal,
Significant Assets Securities Times and Ta Kung 4 May 2012 http://www.cninfo.com.cn/
Reorganization Pao
Announcement on Resolutions China Securities Journal,
th
Made at the 12 Session of the Securities Times and Ta Kung 10 May 2012 http://www.cninfo.com.cn/
th
6 Board of Directors Pao
Preplan on Issuing Shares to China Securities Journal,
10 May 2012 http://www.cninfo.com.cn/
Purchase Assets & Securities Times and Ta Kung
37
Related-party Transaction Pao
Announcement on Resolutions
China Securities Journal,
Made at the 1st Special Session
Securities Times and Ta Kung 12 May 2012 http://www.cninfo.com.cn/
of the 6th Board of Directors for
Pao
Year 2012
Announcement on Resolutions China Securities Journal,
Made at the 2011 Annual Securities Times and Ta Kung 12 May 2012 http://www.cninfo.com.cn/
Shareholders’ General Meeting Pao
Announcement on Resignation
China Securities Journal,
of the Chairman of the
Securities Times and Ta Kung 12 May 2012 http://www.cninfo.com.cn/
Supervisory Committee for the
Pao
Company
China Securities Journal,
Announcement on Correction
Securities Times and Ta Kung 2 Jun. 2012 http://www.cninfo.com.cn/
of 2011 Annual Report
Pao
Announcement on Resolutions
China Securities Journal,
Made at the 2nd Special Session
Securities Times and Ta Kung 8 Jun. 2012 http://www.cninfo.com.cn/
of the 6th Board of Directors for
Pao
Year 2012
Notice on Convening the First China Securities Journal,
Special Shareholders’ General Securities Times and Ta Kung 8 Jun. 2012 http://www.cninfo.com.cn/
Meeting for Year 2012 Pao
Announcement on Resolutions
China Securities Journal,
Made at the First Special
Securities Times and Ta Kung 26 Jun. 2012 http://www.cninfo.com.cn/
Shareholders’ General Meeting
Pao
for Year 2012
VIII. Financial Report
（I）Audit opinion
Has this semi-annual report been audited?
√ Yes □ No □ Inapplicable
Type of audit opinion Standard unqualified opinion
Date when the audit report is signed 18 Aug. 2012
Name of the audit agency RSM China Certified Public Accountants LLP
Document No. of the audit report ZRYHS Zi [2012] No. 6777
The audit report is as follows:
38
Audit Report
ZRYHS Zi [2012] No. 6777
TO THE SHAREHOLDERS OF HUBEI SANONDA CO., LTD.
We have audited the accompanying financial statements of Hubei Sanonda Co., Ltd. (the
“Company”) and its subsidiaries (hereinafter jointly referred to as “the Group”), which comprise the
consolidated and the Company’s balance sheets as at 30 Jun. 2012, the consolidated and the
Company’s income statements, the consolidated and the Company’s statements of change in equity,
the consolidated and the Company’s cash flow statements for the six months then ended, and notes
to the financial statements.
I. The management level’s responsibility for the financial statements
The management of the Company is responsible for the preparation of these financial statements
and fair presentation. These responsibilities include: (1) preparing financial statements according to
the Accounting Standards for Business Enterprises and make them a fair presentation; and (2)
designing, implementing and maintaining internal control relevant to the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
II. Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We
conducted our audit in accordance with Auditing Standards for CICPA. Those Standards require that
we plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
An audit includes performing audit procedures, so as to obtain audit evidence to support the
amounts and disclosures in the financial statements. Audit procedures are relied on the auditors’
judgments, including assessment on the risk of material misstatement of these financial statements
arising from fraud or error. In risk assessment procedures, we consider internal controls relating to
the preparation of these financial statements to design appropriate audit procedures, but our
objective is not to express our opinion on the effectiveness of internal controls. An audit also
includes assessing the reasonability of accounting principles used and significant estimates made by
the management, as well as evaluating the overall financial statements presentation.
We believe that the audit evidence we have obtained is sufficient and effective, providing a
reasonable basis for our opinion.
III Audit opinion
In our opinion, the financial statements comply with the Accounting Standards for Business
Enterprises in all material respects and present fairly the Group’s consolidated financial position as
at 30 Jun. 2012 and its consolidated business results and cash flows for the six months then ended,
as well as the Company’s financial position as at 30 Jun. 2012 and its business results and cash
flows for the six months then ended.
RSM China Certified Public Accountants CPA of China：Hao Guomin
LLP CPA of China：Kuang Xiaochang
BeijingChina
39
18 August 2012
（II）Financial statements
Consolidated statements or not?
√ Yes □ No □ Inapplicable
The monetary unit in the financial statements of the financial report is RMB Yuan if not specified otherwise.
Monetary unit of notes to financial statements: RMB Yuan
1. Consolidated balance sheet
Prepared by Hubei Sanonda Co., Ltd.
Unit: RMB Yuan
Item Note 30 Jun. 2012 31 Dec. 2011
Current Assets:
Monetary funds 409,575,662.00 219,587,687.99
Settlement reserves
Intra-group lendings
Transactional financial assets
Notes receivable 14,028,356.00 36,684,056.23
Accounts receivable 253,854,717.30 106,218,693.29
Accounts paid in advance 33,654,280.00 15,366,338.39
Premiums receivable
Reinsurance premiums receivable
Receivable reinsurance contract
reserves
Interest receivable
Dividend receivable
Other accounts receivable 28,924,184.19 24,413,841.54
Financial assets purchased under
agreements to resell
Inventories 286,980,747.51 297,952,963.89
Non-current assets due within 1
year
Other current assets 14,374.73 14,374.73
Total current assets 1,027,032,321.73 700,237,956.06
Non-current assets:
Loans by mandate and advances
granted
40
Available-for-sale financial assets
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment 9,153,782.63 9,153,782.63
Investing property 4,515,012.50 4,635,212.50
Fixed assets 1,180,145,827.84 1,114,276,784.03
Construction in progress 241,409,272.35 303,864,055.51
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 145,592,748.11 147,453,152.21
R&D expense
Goodwill
Long-term deferred expenses
Deferred income tax assets 13,553,003.69 13,029,291.87
Other non-current assets
Total of non-current assets 1,594,369,647.12 1,592,412,278.75
Total assets 2,621,401,968.85 2,292,650,234.81
Current liabilities:
Short-term borrowings 507,930,850.07 293,139,068.38
Borrowings from Central Bank
Customer bank deposits and due
to banks and other financial
institutions
Intra-group borrowings
Transactional financial liabilities
Notes payable 90,000,000.00
Accounts payable 163,418,013.01 122,637,168.06
Accounts received in advance 39,261,107.05 54,962,481.73
Financial assets sold for
repurchase
Handling charges and
commissions payable
Employee’s compensation 10,384,789.53 11,657,468.95
41
payable
Tax payable -23,560,012.67 -20,410,811.16
Interest payable
Dividend payable 349,463.30 349,463.30
Other accounts payable 66,208,868.26 42,034,152.27
Reinsurance premiums payable
Insurance contract reserves
Payables for acting trading of
securities
Payables for acting underwriting
of securities
Non-current liabilities due within
224,550,000.00 96,990,000.00
1 year
Other current liabilities
Total current liabilities 1,078,543,078.55 601,358,991.53
Non-current liabilities:
Long-term borrowings 330,000,000.00 507,560,000.00
Bonds payable
Long-term payables 650,000.00 650,000.00
Specific payables
Estimated liabilities
Deferred income tax liabilities
Other non-current liabilities 18,292,182.13 17,614,680.98
Total non-current liabilities 348,942,182.13 525,824,680.98
Total liabilities 1,427,485,260.68 1,127,183,672.51
Owners’ equity (or shareholders’
equity)
Paid-up capital (or share capital) 593,923,220.00 593,923,220.00
Capital reserves 265,719,285.02 266,649,062.72
Less: Treasury stock
Specific reserves 22,813,782.36 17,847,014.86
Surplus reserves 80,383,814.33 80,383,814.33
Provisions for general risks
Retained profits 221,530,998.55 197,544,620.36
Foreign exchange difference
42
Total equity attributable to owners
1,184,371,100.26 1,156,347,732.27
of the Company
Minority interests 9,545,607.91 9,118,830.03
Total owners’ (or shareholders’)
1,193,916,708.17 1,165,466,562.30
equity
Total liabilities and owners’ (or
2,621,401,968.85 2,292,650,234.81
shareholders’) equity
Legal representative: Li Zuorong Person-in-charge of the accounting work: He Xuesong
Chief of the accounting division: He Xuesong
2. Balance sheet of the Company
Unit: RMB Yuan
Item Note 30 Jun. 2012 31 Dec. 2011
Current Assets:
Monetary funds 298,919,823.80 178,056,420.12
Transactional financial assets
Notes receivable 8,523,620.00 35,470,074.23
Accounts receivable 253,081,717.20 107,116,214.14
Accounts paid in advance 29,977,687.58 19,942,535.80
Interest receivable
Dividend receivable 650,000.00
Other accounts receivable 159,532,223.97 139,147,365.19
Inventories 259,453,845.79 249,816,677.70
Non-current assets due within 1
year
Other current assets
Total current assets 1,010,138,918.34 729,549,287.18
Non-current assets:
Available-for-sale financial assets
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment 77,768,711.36 76,768,711.36
Investing property 4,515,012.50 4,635,212.50
Fixed assets 1,143,764,397.71 1,075,433,427.78
43
Construction in progress 111,797,562.55 168,798,220.23
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 130,890,603.62 132,784,006.82
R&D expense
Goodwill
Long-term deferred expenses
Deferred income tax assets 8,665,946.77 8,852,524.81
Other non-current assets
Total of non-current assets 1,477,402,234.51 1,467,272,103.50
Total assets 2,487,541,152.85 2,196,821,390.68
Current liabilities:
Short-term borrowings 437,000,000.00 279,000,000.00
Transactional financial liabilities
Notes payable 90,000,000.00
Accounts payable 153,965,011.83 101,223,780.57
Accounts received in advance 32,036,435.14 32,554,691.41
Employee’s compensation
9,510,561.95 8,669,946.00
payable
Tax payable -7,720,117.06 -1,071,376.94
Interest payable
Dividend payable 349,463.30 349,463.30
Other accounts payable 49,171,110.29 34,105,455.15
Non-current liabilities due within
224,550,000.00 96,990,000.00
1 year
Other current liabilities
Total current liabilities 988,862,465.45 551,821,959.49
Non-current liabilities:
Long-term borrowings 330,000,000.00 507,560,000.00
Bonds payable
Long-term payables 650,000.00 650,000.00
Specific payables
Estimated liabilities
44
Deferred income tax liabilities
Other non-current liabilities 7,403,888.89 7,947,777.78
Total non-current liabilities 338,053,888.89 516,157,777.78
Total liabilities 1,326,916,354.34 1,067,979,737.27
Owners’ equity (or shareholders’
equity)
Paid-up capital (or share capital) 593,923,220.00 593,923,220.00
Capital reserves 263,799,837.18 263,799,837.18
Less: Treasury stock
Specific reserves 16,583,624.88 12,647,237.00
Surplus reserves 80,383,814.33 80,383,814.33
Provision for general risks
Retained profits 205,934,302.12 178,087,544.90
Foreign exchange difference
Total owners’ (or shareholders’)
1,160,624,798.51 1,128,841,653.41
equity
Total liabilities and owners’ (or
2,487,541,152.85 2,196,821,390.68
shareholders’) equity
3. Consolidated income statement
Unit: RMB Yuan
Item Note Jan.-Jun. 2012 Jan.-Jun. 2011
I. Total operating revenues 1,116,755,277.07 996,324,042.36
Including: Sales income 1,116,755,277.07 996,324,042.36
Interest income
Premium income
Handling charge and
commission income
II. Total operating cost 1,080,620,491.78 954,507,512.43
Including: Cost of sales 956,561,172.05 830,789,907.99
Interest expenses
Handling charge and
commission expenses
Surrenders
Net claims paid
45
Net amount withdrawn for
the insurance contract reserve
Expenditure on policy
dividends
Reinsurance premium
Taxes and associate charges 486,326.30 642,894.62
Selling and distribution
35,678,208.25 35,865,651.50
expenses
Administrative expenses 43,183,369.31 43,262,478.58
Financial expenses 31,996,393.97 35,580,688.29
Asset impairment loss 12,715,021.90 8,365,891.45
Add: Gain/(loss) from change in fair
value (“-” means loss)
Gain/(loss) from investment
(“-” means loss)
Including: share of profits in
associates and joint ventures
Foreign exchange gains (“-” means
loss)
III. Business profit (“-” means loss) 36,134,785.29 41,816,529.93
Add: non-operating income 851,481.06 1,535,503.37
Less: non-operating expense 848,745.45 469,111.17
Including: loss from non-current
327,787.29
asset disposal
IV. Total profit (“-” means loss) 36,137,520.90 42,882,922.13
Less: Income tax expense 11,671,651.36 12,142,430.99
V. Net profit (“-” means loss) 24,465,869.54 30,740,491.14
Including: Net profit achieved
by combined parties before the
combinations
Attributable to owners of the
23,986,378.19 30,353,680.99
Company
Minority shareholders’ income 479,491.35 386,810.15
VI. Earnings per share -- --
(I) Basic earnings per share 0.0404 0.0511
(II) Diluted earnings per share 0.0404 0.0511
Ⅶ. Other comprehensive incomes
46
Ⅷ. Total comprehensive incomes 24,465,869.54 30,740,491.14
Attributable to owners of the
23,986,378.19 30,353,680.99
Company
Attributable to minority
479,491.35 386,810.15
shareholders
Where business mergers under the same control occurred in this reporting period, the net profit achieved by the merged parties before
the business mergers was RMB 0.
Legal representative: Li Zuorong Person-in-charge of the accounting work: He Xuesong
Chief of the accounting division: He Xuesong
4. Income statement of the Company
Unit: RMB Yuan
Item Note Jan.-Jun. 2012 Jan.-Jun. 2011
I. Total sales 1,025,044,325.64 860,799,156.71
Less: cost of sales 886,916,094.18 727,458,020.65
Business taxes and surcharges 222,757.83 196,215.90
Distribution expenses 27,150,973.97 22,262,958.43
Administrative expenses 32,435,235.50 31,177,722.66
Financial costs 31,536,093.23 33,993,457.28
Impairment loss 9,241,029.13 7,695,621.28
Add: gain/(loss) from change in fair
value (“-” means loss)
Gain/(loss) from investment (“-”
650,000.00 650,000.00
means loss)
Including: income form investment
on associates and joint ventures
II. Business profit (“-” means loss) 38,192,141.80 38,665,160.51
Add: non-business income 851,481.06 1,523,267.33
Less: non-business expense 345,460.00 17,016.00
Including: loss from non-current
215,460.00
asset disposal
III. Total profit (“-” means loss) 38,698,162.86 40,171,411.84
Less: income tax expense 10,851,405.64 10,853,991.08
IV. Net profit (“-” means loss) 27,846,757.22 29,317,420.76
V. Earnings per share -- --
47
(I) Basic earnings per share
(II) Diluted earnings per share
VI. Other comprehensive income
VII. Total comprehensive income 27,846,757.22 29,317,420.76
5. Consolidated cash flow statement
Unit: RMB Yuan
Item Jan.-Jun. 2012 Jan.-Jun. 2011
I. Cash flows from operating activities:
Cash received from sale of
772,261,565.23 878,896,298.61
commodities and rendering of 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 intra-group
borrowings
Net increase of funds in repurchase
business
Tax refunds received 18,058,309.46 34,114,076.18
Other cash received relating to
11,960,367.46 39,735,347.92
operating activities
Subtotal of cash inflows from operating
802,280,242.15 952,745,722.71
activities
Cash paid for goods and services 560,436,144.61 825,580,909.85
48
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 67,251,511.33 59,411,242.56
Various taxes paid 16,861,139.30 17,951,245.70
Other cash payment relating to
25,503,917.74 37,537,105.00
operating activities
Subtotal of cash outflows from
670,052,712.98 940,480,503.11
operating activities
Net cash flows from operating activities 132,227,529.17 12,265,219.60
II. Cash flows from investing activities:
Cash received from withdrawal of
investments
Cash received from return on
investments
Net cash received from disposal of
fixed assets, intangible assets and other 12,000.00 1,621,417.17
long-term assets
Net cash received from disposal of
subsidiaries or other business units
Other cash received relating to
investing activities
Subtotal of cash inflows from
12,000.00 1,621,417.17
investing activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 69,187,944.42 95,320,184.66
assets
Cash paid for investment 26,017,144.00
Net increase of pledged loans
Net cash paid to acquire subsidiaries
and other business units
49
Other cash payments relating to
investing activities
Subtotal of cash outflows from
69,187,944.42 121,337,328.66
investing activities
Net cash flows from investing activities -69,175,944.42 -119,715,911.49
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Including: Cash received from
minority shareholder investments by
subsidiaries
Cash received from borrowings 517,328,770.69 629,387,610.93
Cash received from issuance of
bonds
Other cash received relating to
financing activities
Subtotal of cash inflows from financing
517,328,770.69 629,387,610.93
activities
Repayment of borrowings 352,586,762.89 356,033,178.20
Cash paid for interest expenses and
36,824,366.87 31,023,747.46
distribution of dividends or profit
Including: dividends or profit paid
350,000.00 350,000.00
by subsidiaries to minority shareholders
Other cash payments relating to
19,098,876.69 6,775,443.96
financing activities
Sub-total of cash outflows from
408,510,006.45 393,832,369.62
financing activities
Net cash flows from financing activities 108,818,764.24 235,555,241.31
IV. Effect of foreign exchange rate
117,625.02 -687,155.31
changes on cash and cash equivalents
V. Net increase in cash and cash
171,987,974.01 127,417,394.11
equivalents
Add: Opening balance of cash and
219,587,687.99 207,943,720.75
cash equivalents
VI. Closing balance of cash and cash
391,575,662.00 335,361,114.86
equivalents
50
6. Cash flow statement of the Company
Unit: RMB Yuan
Item Jan.-Jun. 2012 Jan.-Jun. 2011
I. Cash flows from operating activities:
Cash received from sale of
710,865,542.67 796,030,226.11
commodities and rendering of service
Tax refunds received 12,650,502.53 28,031,628.20
Other cash received relating to
4,745,921.19 6,683,740.92
operating activities
Subtotal of cash inflows from operating
728,261,966.39 830,745,595.23
activities
Cash paid for goods and services 505,127,094.11 726,253,349.36
Cash paid to and for employees 57,747,772.92 50,351,965.04
Various taxes paid 12,731,963.09 12,152,275.52
Other cash payment relating to
39,041,881.71 116,605,102.48
operating activities
Subtotal of cash outflows from
614,648,711.83 905,362,692.40
operating activities
Net cash flows from operating activities 113,613,254.56 -74,617,097.17
II. Cash flows from investing activities:
Cash received from retraction of
investments
Cash received from return on
investments
Net cash received from disposal of
fixed assets, intangible assets and other 12,000.00 1,290,064.50
long-term assets
Net cash received from disposal of
subsidiaries or other business units
Other cash received relating to
investing activities
Subtotal of cash inflows from
12,000.00 1,290,064.50
investing activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 64,337,692.43 79,279,456.28
assets
Cash paid for investment 26,017,144.00
51
Net cash paid to acquire subsidiaries
and other business units
Other cash payments relating to
1,000,000.00
investing activities
Subtotal of cash outflows from
65,337,692.43 105,296,600.28
investing activities
Net cash flows from investing activities -65,325,692.43 -104,006,535.78
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Cash received from borrowings 406,000,000.00 560,000,000.00
Cash received from bonds issuance
Other cash received relating to
financing activities
Subtotal of cash inflows from financing
406,000,000.00 560,000,000.00
activities
Repayment of borrowings 298,000,000.00 225,000,000.00
Cash paid for interest expenses and
35,424,094.23 27,845,435.01
distribution of dividends or profit
Other cash payments relating to
18,000,000.00 6,350,000.00
financing activities
Sub-total of cash outflows from
351,424,094.23 259,195,435.01
financing activities
Net cash flows from financing activities 54,575,905.77 300,804,564.99
IV. Effect of foreign exchange rate
-64.22 -14,659.26
changes on cash and cash equivalents
V. Net increase in cash and cash
102,863,403.68 122,166,272.78
equivalents
Add: Opening balance of cash and
178,056,420.12 141,059,742.96
cash equivalents
VI. Closing balance of cash and cash
280,919,823.80 263,226,015.74
equivalents
7. Consolidated statement of changes in owners’ equity
Reporting period
Unit: RMB Yuan
52
Reporting period
Equity attributable to owners of the Company
Paid-up
Total
Item Minority
capital Less: General
Capital Specific Surplus Retaine owners’
(or treasury risk Others interests
reserve reserve reserve d profit equity
share stock reserve
capital)
I. Balance at the end of the 593,923 266,649, 17,847,0 80,383, 197,544, 9,118,830. 1,165,466,
previous year ,220.00 062.72 14.86 814.33 620.36 03 562.30
Add: change of accounting
policy
Correction of errors in
previous periods
Other
II. Balance at the beginning of 593,923 266,649, 17,847,0 80,383, 197,544, 9,118,830. 1,165,466,
the year ,220.00 062.72 14.86 814.33 620.36 03 562.30
III. Increase/ decrease of
-929,77 4,966,76 23,986,3 426,777.8 28,450,145
amount in the year (“-” means
7.70 7.50 78.19 8 .87
decrease)
23,986,3 479,491.3 24,465,869
(I) Net profit
78.19 5 .54
(II) Other comprehensive
incomes
23,986,3 479,491.3 24,465,869
Subtotal of (I) and (II)
78.19 5 .54
(III) Capital paid in and -929,77 -70,222.3 -1,000,000.
0.00 0.00 0.00 0.00 0.00 0.00 0.00
reduced by owners 7.70 0 00
1. Capital paid in by
owners
2. Amounts of share-based
payments recognized in
owners’ equity
-929,77 -70,222.3 -1,000,000.
3. Others
7.70 0 00
-350,000. -350,000.0
(IV) Profit distribution 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
00 0
1. Appropriations to
surplus reserves
2. Appropriations to
53
general risk provisions
3. Appropriations to -350,000. -350,000.0
owners (or shareholders) 00 0
4. Other
(V) Internal carry-forward of
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
owners’ equity
1. New increase of capital
(or share capital) from capital
public reserves
2. New increase of capital
(or share capital) from surplus
reserves
3. Surplus reserves for
making up losses
4. Other
4,966,76 367,508.8 22,813,782
(Ⅵ) Specific reserve
7.50 3 .36
1. Withdrawn for the 5,507,55 425,252.2 5,932,810.
period 8.29 5 54
540,790.
2. Used in the period 57,743.42 598,534.21
79
(Ⅶ) Other
593,923 265,719, 22,813,7 80,383, 221,530, 9,545,607 1,193,916,
IV. Closing balance
,220.00 285.02 82.36 814.33 998.55 .91 708.17
Last year
Unit: RMB Yuan
Last year
Equity attributable to owners of the Company
Paid-up
Total
Item Minority
capital Less: General
Capital Specific Surplus Retaine owners’
(or treasury risk Others interests
reserve reserve reserve d profit equity
share stock reserve
capital)
I. Balance at the end of the 593,923 300,991, 14,502,6 74,787, 149,842, 12,477,46 1,146,524,
previous year ,220.00 478.35 82.06 056.27 732.47 6.87 636.02
Add: retrospective
adjustments due to business
combinations under the same
control
54
Add: change of accounting
policy
Correction of errors in
previous periods
Other
II. Balance at the beginning of 593,923 300,991, 14,502,6 74,787, 149,842, 12,477,46 1,146,524,
the year ,220.00 478.35 82.06 056.27 732.47 6.87 636.02
III. Increase/ decrease of
-34,545, 3,500,32 5,596,7 30,353,6 -2,624,84 -3,316,571.
amount in the year (“-” means
727.72 4.94 58.06 80.99 9.91 70
decrease)
30,353,6 386,810.1 30,740,491
(I) Net profit
80.99 5 .14
(II) Other comprehensive
incomes
30,353,6 386,810.1 30,740,491
Subtotal of (I) and (II)
80.99 5 .14
(III) Capital paid in and -34,545, -2,621,41 -37,167,14
0.00 0.00 0.00 0.00 0.00 0.00 0.00
reduced by owners 727.72 6.28 4.00
1. Capital paid in by -33,076, -33,076,14
owners 144.00 4.00
2. Amounts of share-based
payments recognized in
owners’ equity
-1,469,5 -2,621,41 -4,091,000.
3. Others
83.72 6.28 00
-350,000. -350,000.0
(IV) Profit distribution 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
00 0
1. Appropriations to
surplus reserves
2. Appropriations to
general risk provisions
3. Appropriations to -350,000. -350,000.0
owners (or shareholders) 00 0
4. Other
(V) Internal carry-forward of
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
owners’ equity
1. New increase of capital
(or share capital) from capital
public reserves
55
2. New increase of capital
(or share capital) from surplus
reserves
3. Surplus reserves for
making up losses
4. Other
3,500,32 -40,243.7 3,460,081.
(Ⅵ) Specific reserve
4.94 8 16
1. Withdrawn for the 5,348,67 544,770.1 5,893,444.
period 4.45 6 61
1,848,34 585,013.9 2,433,363.
2. Used in the period
9.51 4 45
(Ⅶ) Other
593,923 266,445, 18,003,0 74,787, 180,196, 9,852,616 1,143,208,
IV. Closing balance
,220.00 750.63 07.00 056.27 413.46 .96 064.32
8. Statement of changes in owners’ equity of the Company
Reporting period
Unit: RMB Yuan
Reporting period
Paid-up
Less: General Total
Item capital (or Capital Specific Surplus Retained
treasury risk owners’
share reserve reserve reserve profit
stock reserve equity
capital)
I. Balance at the end of the 593,923,22 263,799,83 12,647,237 80,383,814 178,087,54 1,128,841,
previous year 0.00 7.18 .00 .33 4.90 653.41
Add: change of accounting
policy
Correction of errors in
previous periods
Other
II. Balance at the beginning of 593,923,22 263,799,83 12,647,237 80,383,814 178,087,54 1,128,841,
the year 0.00 7.18 .00 .33 4.90 653.41
III. Increase/ decrease of amount 3,936,387. 27,846,757 31,783,145
in the year (“-” means decrease) 88 .22 .10
27,846,757 27,846,757
(I) Net profit
.22 .22
(II) Other comprehensive
56
incomes
27,846,757 27,846,757
Subtotal of (I) and (II)
.22 .22
(III) Capital paid in and
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
reduced by owners
1. Capital paid in by owners
2. Amounts of share-based
payments recognized in owners’
equity
3. Others
(IV) Profit distribution 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1. Appropriations to surplus
reserves
2. Appropriations to general
risk provisions
3. Appropriations to owners
(or shareholders)
4. Other
(V) Internal carry-forward of
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
owners’ equity
1. New increase of capital
(or share capital) from capital
public reserves
2. New increase of capital
(or share capital) from surplus
reserves
3. Surplus reserves for
making up losses
4. Other
3,936,387. 16,583,624
(Ⅵ) Specific reserve
88 .88
4,198,329. 4,198,329.
1. Withdrawn for the period
75 75
2. Used in the period 261,941.87 261,941.87
(Ⅶ) Other
593,923,22 263,799,83 16,583,624 80,383,814 205,934,30 1,160,624,
IV. Closing balance
0.00 7.18 .88 .33 2.12 798.51
Last year
57
Unit: RMB Yuan
Last year
Paid-up
Less: General Total
Item capital (or Capital Specific Surplus Retained
treasury risk owners’
share reserve reserve reserve profit
stock reserve equity
capital)
I. Balance at the end of the 593,923,22 268,447,07 7,566,658. 74,787,056 127,716,72 1,072,440,
previous year 0.00 5.77 23 .27 2.41 732.68
Add: change of accounting
policy
Correction of errors in
previous periods
Other
II. Balance at the beginning of 593,923,22 268,447,07 7,566,658. 74,787,056 127,716,72 1,072,440,
the year 0.00 5.77 23 .27 2.41 732.68
III. Increase/ decrease of amount -4,647,238. 2,963,709. 29,317,420 27,633,892
in the year (“-” means decrease) 59 95 .76 .12
29,317,420 29,317,420
(I) Net profit
.76 .76
(II) Other comprehensive
incomes
29,317,420 29,317,420
Subtotal of (I) and (II)
.76 .76
(III) Capital paid in and -4,647,238. -4,647,238.
0.00 0.00 0.00 0.00 0.00 0.00
reduced by owners 59 59
-4,647,238. -4,647,238.
1. Capital paid in by owners
59 59
2. Amounts of share-based
payments recognized in owners’
equity
3. Others
(IV) Profit distribution 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
1. Appropriations to surplus
reserves
2. Appropriations to general
risk provisions
3. Appropriations to owners
(or shareholders)
58
4. Other
(V) Internal carry-forward of
0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
owners’ equity
1. New increase of capital
(or share capital) from capital
public reserves
2. New increase of capital
(or share capital) from surplus
reserves
3. Surplus reserves for
making up losses
4. Other
2,963,709. 2,963,709.
(Ⅵ) Specific reserve
95 95
3,542,700. 3,542,700.
1. Withdrawn for the period
00 00
2. Used in the period 578,990.05 578,990.05
(Ⅶ) Other
593,923,22 263,799,83 10,530,368 74,787,056 157,034,14 1,100,074,
IV. Closing balance
0.00 7.18 .18 .27 3.17 624.80
(III). Company profile
Hubei Sanonda Co., Ltd. (hereinafter referred to as "Company" or "the Company") is formerly
known as Hubei Sha City Pesticides Factory, a state-run enterprise set up in 1958. As approved by
the Hubei Commission for Economic System Reformation and other authorities, Hubei Sha City
Pesticides Factory was reorganized as Hubei Sanonda Co., Ltd., which marked Hubei’s first large
state-run industrial enterprise to adopt the stock system. On 8 Sept. 1992, upon the said
reorganization, the Company was formally established. Later, as approved by the People's
Government of Hubei Province and the China Securities Regulatory Commission (“CSRC”), the
Company issued 30,000,000 RMB-denominated ordinary shares ("A shares") to the public in Nov.
1993. And the total share capital of the Company was 104,933,900 shares after the public offering.
The Sha City Bureau for State-owned Assets Supervision and Administration is the first majority
shareholder of the Company, with a capital contribution of RMB 57,467,900, accounting for
54.77% of the Company’s total share capital. On 3 Dec. 1993, shares of the Company were listed in
the Shenzhen Stock Exchange.
In Apr. 1994, a dividend distribution plan was reviewed and approved at the 1993 Annual
Shareholders’ General Meeting. RMB 2.00 was distributed in cash for every 10 shares held by the
state and two bonus shares for every 10 shares held by individuals. The bonus shares were listed in
3 May 1994. And the Company’s total share capital rose to 113,988,000 shares after distribution of
the said bonus shares, with shares held by the first majority shareholder accounting for 50.42% of
the Company’s total shares.
In 1994, Jingzhou City and Sha City were combined and renamed as “Jingsha City”, Jiangling
County as “Jiangling District of Jingsha City”, and the Sha City Bureau for State-owned Assets
59
Supervision and Administration and the Jiangling County Bureau for State-owned Assets
Supervision and Administration (originally two shareholders of the Company) as “the Jingsha City
Bureau for State-owned Assets Supervision and Administration”. As such, the 50.42% and 1.93%
equity interests of the Company formerly held by the Sha City Bureau for State-owned Assets
Supervision and Administration and the Jiangling County Bureau for State-owned Assets
Supervision and Administration respectively were transferred to the Jingsha City Bureau for
State-owned Assets Supervision and Administration, which held 52.35% of the Company’s total
shares.
On 9 Aug. 1995, as approved at the Company’s 1994 Annual Shareholders’ General Meeting, the
Jingsha City Bureau for State-owned Assets Supervision and Administration transferred 3,002,700
shares it held in the Company (2.14% of the Company’s total shares) to the Qichun County Bureau
for State-owned Assets Supervision and Administration. After the said transfer, the Jingsha City
Bureau for State-owned Assets Supervision and Administration (the Company’s first majority
shareholder) held 50.21% of the Company’s total shares.
In Jul. 1995, the Company held the 1994 Annual Shareholders’ General Meeting, at which a share
allotment plan (three shares being allotted for every ten shares) was reviewed and approved. After
the said share allotment, the Company’s total number of shares rose to 139,970,500, with the
Jingsha City Bureau for State-owned Assets Supervision and Administration holding 44.66%.
In Nov. 1996, as approved by the “Document Zheng-Jian-Shang-Zi [1996] No.13” issued by CSRC,
the Company carried out the share allotment plan (three shares being allotted for every ten shares)
for the year 1996. A total of 41,991,100 shares of the Company were allotted, of which 19,552,900
shares were allotted for state-held shares and 22,438,200 shares for individual-held shares. After the
said share allotment, the Company’s total number of shares rose to 181,969,600. And the
shareholding ratio of every shareholder remained unchanged after the allotment.
In 1996, pursuant to the “E-Zheng-Ban-Han [1995] No.92 Reply of People’s Government of Hubei
Province on Authorizing Sanonda Group to Operate State-owned Assets”, in order to safeguard the
state-owned shares of the Company held by it, the Jingsha City Bureau for State-owned Assets
Supervision and Administration incorporated Sanonda Group and transferred the Company’s equity
interests it held to Sanonda Group. As such, Sanonda Group became the Company’s first majority
shareholder, holding 44.66% of the Company’s total shares.
From 29 Apr. to 5 May 1997, as approved by the “Zheng-Fa (1997) No.23 Document” issued by the
Securities Commission under the State Council, the Company issued 0.1 billion domestically-listed
foreign shares (B shares) of RMB 1.00 par value, which were listed in the Shenzhen Stock
Exchange for trading on 15 May 1997. And the Company exercised the over-allotment options of
15 million shares from 15 May to 21 May in the same year. After issuance of the said B shares, the
Company’s total number of shares rose to 296,961,600 shares, and the shareholding ratio of
Sanonda Group—the Company’s first majority shareholder—was changed to 27.52%.
On 20 May 2005, the Jingzhou City Bureau for State-owned Assets Supervision and Administration
and China National Agrochemical Corporation (a wholly-owned subsidiary under China National
Chemical Corporation) signed the “Agreement on Transferring Assets of Sanonda Group”. The
State-Owned Assets Supervision and Administration Commission of the People’s Government of
Hubei Province issued the “E-Guo-Zi-Chan-Quan [2005] No.177 Reply on Transferring
State-owned Assets of Sanonda Group with Compensation”. As a result, the People’s Government
of Jingzhou City was approved to transfer all state-owned assets of Sanonda Group to China
National Agrochemical Corporation with compensation, with the transfer base date on 31 Dec. 2004.
After the said transfer, Sanonda Group became a wholly-owned subsidiary under China National
Agrochemical Corporation.
60
In 2006, pursuant to the “Guo-Zi-Chan-Quan [2006] No.767 Reply of State-owned Assets
Supervision and Administration Commission under the State Council on Affairs Related to Share
Reform of Hubei Sanonda Co., Ltd.”, the “Share Reform Plan of Hubei Sanonda Co., Ltd.” was
reviewed and approved at the shareholders’ general meeting held on 8 Jul. 2006. And the share
reform was completed in Aug. 2006. With the base of 296,961,600 tradable shares, 2.2 shares were
paid to tradable A-share holders by non-tradable share holders as consideration for every 10
tradable A-shares, with the total number of shares paid by non-tradable share holders to tradable
share holders reaching 21,391,100,000 shares. After the share reform, the total number of the
Company’s shares remained unchanged, of which Sanonda Group held 61093,600 shares,
accounting for 20.57% of the Company’s total shares.
In Nov. 2006 and Mar. 2007, due to a dispute case concerning the provision of a loan guarantee by
the Company’s first majority shareholder—Sanonda Group—for an other company, 1.25 million
and 0.40 million state-owned corporate shares of the Company held by Sanonda Group were
forcibly transferred and auctioned by the court. After the auctions, shares of the Company held by
Sanonda Group were reduced to 59,443,600 shares, accounting for 20.02% of the Company’s total
shares.
In May 2007, the Company held the 2006 Annual Shareholders’ General Meeting, at which the plan
for turning capital reserve to share capital was reviewed and approved. As a result, 10 shares were
increased for every 10 shares held by all shareholders in Jul. 2007. After the increase, the
Company’s total number of shares rose to 593,923,200 shares. The first majority
shareholder—Sanonda Group—held 118,887,200 shares, accounting for 20.02% of the Company’s
total shares. And for the period up to 30 Jun. 2012, the share capital of the Company remained
unchanged.
As at the balance sheet date, Legal representative of the Company: Li Zuorong; Registered address:
No.93, Beijing East Road, Jingzhou, Hubei Province, PRC; Stock abbreviation: Sanonda A/
Sanonda B; and Stock code: 000553/ 200553.
The Company and its subsidiaries (hereinafter referred to as “the Group”) is principally engaged in
pesticide products such as orthene, paraquate, glyphosate, trichlorphon, DDVP, omethoate,
triazophos, imidacloprid and carbofuran; chemical products such as spermine, liquid caustic soda,
liquefied chlorine gas and hydrochloric acid. The Company has the rights of handling import and
export business. And the Company has passed ISO9002 Quality System Certification and ISO14001
Environment Management System Certification.
The parent company of the Group is Sanonda Group and the ultimate parent company is China
National Chemical Corporation.
The financial statements for 2011 have been authorized to be issued by at the board session held by
the Company on 18 Aug. 2012.
(IV) Main accounting policies and estimates and corrections of previous accounting errors
1. Basis for the preparation of financial statements
With the going-concern assumption as the basis and based on transactions and other events that
actually occurred, the Group prepared financial statements in accordance with the Basic Standard
and 38 specific standards of Accounting Standards for Business Enterprises issued by Ministry of
Finance of the PRC on 15 February 2006, Application Guidance of Accounting Standard for
Business Enterprises, Interpretation of Accounting Standards for Business Enterprises and other
regulations issued thereafter (hereinafter referred to as “the Accounting Standards for Business
Enterprises”, “China Accounting Standards” or “CAS”), Rules for Preparation Convention of
61
Disclosure of Public Offering Companies No.15 – General Regulations for Financial Reporting
(revised in 2010) by China Securities Regulatory Commission.
In accordance with relevant provisions of the Accounting Standards for Business Enterprises, the
Group adopted the accrual basis in accounting. Except for some financial instruments, where
impairment occurred on an asset, an impairment reserve was withdrawn accordingly pursuant to
relevant requirements.
2. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Group are in compliance with in compliance with the
Accounting Standards for Business Enterprises, which factually and completely present the
Company’s and the Group’s financial positions as at 30 Jun. 2012, business results and cash flows
for the first half year of 2012, and other relevant information. In addition, the Company’s and the
Group’s financial statements meet the requirements of disclosing financial statements and notes
thereto stated in the Rules for Preparation Convention of Disclosure of Public Offering Companies
No.15 – General Regulations for Financial Reporting (revised in 2010) by China Securities
Regulatory Commission.
3. Fiscal period
The Group’s fiscal periods include fiscal years and fiscal periods shorter than a complete fiscal year.
The Group’s fiscal year starts on 1 Jan. and ends on 31 Dec. of every year according to the
Gregorian calendar. And the fiscal period of the financial report is from 1 Jan. to 30 Jun..
4. Bookkeeping base currency
Renminbi is the dominant currency used in the economic circumstances where the Company and its
domestic subsidiaries are involved. Therefore, the Company and its domestic subsidiaries use
Renminbi as their bookkeeping base currency. And the Group adopted Renminbi as the
bookkeeping base currency when preparing the financial statements for the reporting year.
Bookkeeping base currency for overseas subsidiaries
5. Accounting treatment methods for business combinations under the same control and those
not under the same control.
(1) Business combinations under the same control
A business combination under the same control is a business combination in which all of the
combining enterprises are ultimately controlled by the same party or the same parties both before
and after the business combination and on which the control is not temporary. In a business
combination under the same control, the party which obtains control of other combining enterprise(s)
on the combining date is the combining party, the other combining enterprise(s) is (are) the
combined party. The “combining date” refers to the date on which the combining party actually
62
obtains control on the combined party.
The assets and liabilities that the combining party obtains in a business combination shall be
measured on the basis of their carrying amount in the combined party on the combining date. As for
the balance between the carrying amount of the net assets obtained by the combining party and the
carrying amount of the consideration paid by it (or the total par value of the shares issued), the
additional paid-in capital (share premium) shall be adjusted. If the additional paid-in capital (share
premium) is not sufficient to be offset, the retained earnings shall be adjusted.
The direct cost for the business combination of the combining party shall be recorded into the
profits and losses at the current period.
(2) Business combinations not under the same control
A business combination not under the same control is a business combination in which the
combining enterprises are not ultimately controlled by the same party or the same parties both
before and after the business combination. In a business combination not under the same control,
the party which obtains the control on other combining enterprise(s) on the purchase date is the
acquirer, and other combining enterprise(s) is (are) the acquiree.
For a business combination not under the same control, the combination costs shall include the fair
values, on the acquisition date, of the assets paid, the liabilities incurred or assumed and the equity
securities issued by the acquirer in exchange for the control on the acquiree, the expenses for audit,
legal services and assessment, and other administrative expenses, which are recorded into the
profits and losses in the current period. The trading expenses for the equity securities or debt
securities issued by the acquirer as the combination consideration shall be recorded into the amount
of initial measurement of the equity securities or debt securities. The involved contingent
consideration shall be recorded into the combination costs at its fair value on the acquiring date.
Where new or further evidences emerge, within 12 months since the acquiring date, against the
existing circumstances on the acquiring date and the contingent consideration thus needs to be
adjusted, the combined goodwill shall be adjusted accordingly. In a business combination realized
by two or more transactions of exchange, in the Group’s consolidated financial statements, as for
the equity interests that the Group holds in the acquiree before the acquiring date, they shall be
re-measured according to their fair values at the acquiring date; the positive difference between
their fair values and carrying amounts shall be recorded into the investment gains for the period
including the acquiring date; other comprehensive gains in relation to the equity interests that the
Group holds in the acquiree before the acquiring date shall be transferred into investment gains in
the current period; and the combination costs shall be the summation of the fair values at the
acquiring date of the equity interests that the Group holds in the acquiree before the acquiring date
and the fair values at the acquiring date of the equity interests that Group increases in the acquiree
on the acquiring date.
The combination costs of the acquirer and the identifiable net assets obtained by it in the
combination shall be measured according to their fair values at the acquiring date. The acquirer
shall recognize the positive balance between the combination costs and the fair value of the
identifiable net assets it obtains from the acquiree as business reputation. Where the combination
costs are less then the fair value of the identifiable net assets it obtains from the acquiree, the
63
acquirer shall re-examine the measurement of the fair values of the identifiable assets, liabilities and
contingent liabilities it obtains from the acquiree as well as the combination costs. If, after the
reexamination, the combination costs are still less than the fair value of the identifiable net assets it
obtains from the acquiree, the acquirer shall record the balance into the profits and losses of the
current period.
As for the deductible temporary differences the acquirer obtains from the acquiree which are not
recognized into deferred income tax liabilities due to their not meeting the recognition standards, if
new or further information shows that the relevant situation has existed on the acquiring date and
the economic benefits brought by the deductible temporary differences the acquirer obtains from the
acquiree on the acquiring date can be realized, they shall be recognized into deferred income tax
assets and the relevant goodwill shall be reduced. Where the goodwill is not sufficient to be offset,
the difference shall be recognized into the profits and losses in the current period. In other
circumstances than the above, where the deductible temporary differences are recognized into
deferred income tax assets on the acquiring date, they shall be recorded into the profits and losses in
the current period.
6. Methods for preparing consolidated financial statements
(1) Preparation methods for consolidated financial statements
1) Principle for determining the consolidation scope
The consolidation scope for financial statements is determined on the basis of control. The term
“control” is the power of the Company to determine financial and business policies of an investee
and obtain benefits from the investee’s operating activities. The consolidated financial statements
comprise the financial statements of the Company and its subsidiaries. A subsidiary is an enterprise
or entity controlled by the Company.
2) Methods for preparing the consolidated financial statements
Subsidiaries are fully consolidated from the date on which the Group obtains control on their net
assets and operation decision-making and are de-consolidated from the date when such control
ceases. As for a disposed subsidiary, its operating results and cash flows before the disposal date
has been appropriately included in the consolidated income statement and cash flow statement; and
as for subsidiaries disposed in the current period, the opening items in the consolidated balance
sheet are not adjusted. For a subsidiary acquired in a business combination not under the same
control, its operating results and cash flows after the acquiring date have been appropriately
included in the consolidated income statement and cash flow statement, and the opening items and
comparative items in the consolidated financial statements are not adjusted. For a subsidiary
acquired in a business combination under the same control or a combined party obtained in a
takeover, its operating results and cash flows from the beginning of the reporting period of the
combination to the combination date have been appropriately included in the consolidated income
statement and cash flow statement, and the comparative items in the consolidated financial
statements are adjusted at the same time.
The financial statements of subsidiaries are adjusted in accordance with the accounting policies and
64
accounting period of the Company during the preparation of the consolidated financial statements,
where the accounting policies and the accounting periods are inconsistent between the Company
and subsidiaries. For a subsidiary acquired from a business combination not under the same control,
the individual financial statements of the subsidiary are adjusted based on the fair value of the
identifiable net assets at the acquisition date.
All significant inter-group balances, transactions and unrealized profits are offset in the
consolidated financial statements.
The portion of a subsidiary’s shareholders’ equity and the portion of a subsidiary’s net profits and
losses for the period not held by the Company are recognized as minority interests and minority
shareholder profits and losses respectively and presented separately under shareholders’ equity and
net profits in the consolidation financial statements. The portion of a subsidiary’s net profits and
losses for the period that belong to minority interests is presented as the item of “minority
shareholder profits and losses” under the bigger item of net profits in the consolidated financial
statements. Where the loss of a subsidiary shared by minority shareholders exceeds the portion
enjoyed by minority shareholders in the subsidiary’s opening owners’ equity, minority interests are
offset.
Where the Company losses control on its original subsidiaries due to disposal of some equity
investments or other reasons, the residual equity interests are re-measured according to the fair
value on the date when such control ceases. The summation of the consideration obtained from the
disposal of equity interests and the fair value of the residual equity interests, minus the portion in
the original subsidiary’s net assets measured on a continuous basis from the acquisition date that is
enjoyable by the Company according to the original shareholding percentage in the subsidiary, is
recorded in investment gains for the period when the Company’s control on the subsidiary ceases.
Other comprehensive incomes in relation to the equity investment in the original subsidiary are
transferred to investment gains for the period when such control ceases. And subsequent
measurement is conducted on the residual equity interests according to the No.2 Accounting
Standard for Business Enterprises —Long-term Equity Investments or the No.22 Accounting
Standard for Business Enterprises—Recognition and Measurement of Financial Instruments.
(2) As for the event about purchasing and then selling (or selling and then purchasing) equities of
the same subsidiary, the Company shall disclose relevant accounting treatment methods.
7. Recognition standard for cash and cash equivalents
In the Group’s understanding, cash and cash equivalents include cash on hand, any deposit that can
be used for cover, and 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.
8. Foreign currency businesses and translation of foreign currency financial statements
(1) Foreign currency
1) Accounting treatments for translation of foreign currency transactions
65
As for a foreign currency transaction, the Company shall convert the amount in a foreign currency
into amount in its bookkeeping base at the spot exchange rate of the transaction date, while as for such
transactions as foreign exchange or involving in foreign exchange, the Company shall converted into
amount in the bookkeeping base currency at actual exchange rate the transaction is occurred.
(2) Accounting treatments for translation of foreign currency monetary items and non-monetary
items
On the balance sheet date, the foreign currency monetary items shall be translated at the spot
exchange rate on the balance sheet date. The exchange difference arising from the difference
between the spot exchange rate on the balance sheet date and the spot exchange rate at the time of
initial recognition or prior to the balance sheet date shall be recorded in the profits and losses in the
current period, excluding the following situations:
① the exchange difference arising from foreign currency loans related to acquisition of fixed assets
shall be treated at the principle of capitalization of borrowing costs;
② the exchange difference arising from change in the book balance of foreign currency monetary
items available for sale except the amortized costs shall be recorded into other comprehensive gains
and losses.
A foreign currency non-monetary item measured at the historical costs shall still be translated at the
spot exchange rate on the transaction date. Where the foreign nonmonetary items measured at the
fair value shall be converted into amount in its bookkeeping base currency at spot exchange rate,
the exchange gains and losses arising thereof shall be treated as change in fair value, and recorded
into the current period gains and losses or as other comprehensive gains and losses and recorded
into capital reserves.
(2) Translation of foreign currency financial statements
When it involves overseas business in preparing the consolidated financial statement, for the
translation difference of foreign currency monetary items of net investment in overseas business
arising from the change in exchange rate, it shall be recorded into the item of “difference of foreign
currency financial statement translation” under the owners’ equity; and be recorded into disposal
gains and losses at current period when disposing overseas business.
The foreign currency financial statement of overseas business should be translated in to RMB
financial statement by the following methods: The asset and liability items in the balance sheets shall
be translated at a spot exchange rate on the balance sheet date. Among the owner’s equity items,
except for the items as “undistributed profits”, other items shall be translated at the spot exchange rate
at the time when they are incurred. The income and expense items in the profit statements shall be
translated at the spot exchange rate of the transaction date. The undistributed profits at year-begin is
66
the undistributed profits at the end of last year after the translation; undistributed profits at year-end
shall be listed as various distribution items after the translation; after the translation, the balance
between assets and the sum of liabilities and owners’ equities shall be recorded into other
comprehensive gains and losses as difference of foreign currency translation, and individually listed
under the item of owners’ equity in the balance sheet. Where an enterprise disposes of an overseas
business without the control right, it shall shift the differences, which is presented under the items of
the owner’s equities in the balance sheet and which arises from the translation of foreign currency
financial statements relating to this overseas business, into the disposal profits and losses of the
current period by all or proportion of the disposed overseas business.
Foreign cash flow shall be translated at the spot exchange rate of the date of cash flow incurred. The
influence of exchange rate on the cash flow shall be adjustment item and individually listed in the
cash flow statement.
And the opening balance and the actual balance of last year shall be listed at the amounts after
translation of foreign currency financial statement in last year.
9. Financial instruments
(1) Classification of financial assets
(2) Recognition basis and measurements for financial instruments
(3) Recognition basis and measurement of financial asset transfers
(4) Termination of 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. Where the Group enters into an
agreement with a creditor so as to substitute the existing financial liabilities by way of any new
financial liability, and if the contractual stipulations regarding the new financial liability is
substantially different from that regarding the existing financial liability, it shall terminate the
recognition of the existing financial liability, and shall at the same time recognize the new financial
liability.
Where the recognition of a financial liability is totally or partially terminated, the Group shall
include into the profits and losses of the current period the gap between the carrying amount which
has been terminated from recognition and the considerations it has paid (including the non-cash
assets it has transferred out and the new financial liabilities it has assumed).
(5) Determination of the fair value of main financial assets and financial liabilities
Fair value refers to the price that both parties who are familiar with the situation are willing to
exchange assets or reimburse liabilities. As for the financial assets or financial liabilities for which
67
there is an active market, the quoted prices in the active market shall be used to determine the fair
values thereof. The quoted prices in the active market refers to the prices available from stock
exchange, broker’s agencies, guilds, pricing organization and etc, which represent the actual trading
price under equal transaction. 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.
(6) Withdrawal of impairment provision for financial assets (excluding accounts receivable)
(7) As for event about reclassifying the undue held-to-maturity investment into available-for-sale
financial assets, the Company shall state the basis of changes in holding purpose or ability
10. Recognition criteria and withdrawal methods for bad debts provision of accounts
receivable
The Group shall carry out an inspection, on the balance sheet day, on the carrying amount of
receivables. Where there is any objective evidence proving that such receivable has been impaired,
an impairment provision shall be made: ①A serious financial difficulty occurs to the debtor; ②
The debtor breaches any of the contractual stipulations, for example, fails to pay or delays the
payment of interests or the principal, etc.; ③The debtor will probably become bankrupt or carry
out other financial reorganizations; ④Other objective evidences indicating that such receivable has
been impaired.
(1) Bad debt provision for individually significant accounts receivable
The Company defines an account receivable equivalent to or
Judgement basis or monetary standards of provision for bad debts of
above RMB 5 million as an account receivable which is
the individually significant accounts receivable
individually significant.
The Company shall carry out an independent impairment test
on an account receivable which is individually significant.
For a financial asset that is proved to have no signs of
impairment after the independent impairment test, the
Company shall put it into the financial asset group that has
Method of individual provision for bad debts of the individually
the similar credit risk and carry out an impairment test on the
significant accounts receivable
group as a whole. For an account receivable that is proved in
the independent impairment test to have been impaired, the
Company shall not put it into the financial asset group that
has the similar credit risk and carry out an impairment test on
the group as a whole.
(2) Accounts receivable for which bad debt provisions are made on the group basis
Withdrawal method of bad
Name of group debt provision on the group Recognition basis of group
basis
Account age groups Aging analysis method Divided according to ages of accounts receivable.
68
Divided according to the related-party relation between the
Related-party groups Other method debtor and the Company (usually the Company’s actual
controller and other enterprises controlled by it)
Divided according to the debtor’s reputation, the nature of the
account, safeguard measures, etc. (usually amounts due from the
Risk-free groups Other method government for purchases, reserve funds for employees, deposits
for contracts, accounts receivable arising from guarantee terms,
etc.)
In the groups, adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Inapplicable
Withdrawal proportion for accounts Withdrawal proportion for other accounts receivable
Age
receivable (%) (%)
Within 1 year (including 1 year) 5% 5%
1-2 years 10% 10%
2-3 years 30% 30%
Over 3 years
3-4 years 50% 50%
4-5 years 50% 50%
Over 5 years 100% 100%
In the groups, adopting balance percentage method to withdraw bad debt provision
□ Applicable √ Inapplicable
In the groups, adopting other methods to withdraw bad debt provision
□ Applicable √ Inapplicable
Name of group Notes of method
Accounts receivable between the parent company and its subsidiaries
Related-party groups included into the consolidated scope are not withdrawn the bad debt
provisions.
Bad debt provisions are made according to the specific identification
Risk-free groups
method.
3) Accounts receivable with an insignificant single amount but for which the bad debt provision is
made individually
Reason of individually withdrawing bad debt provision:
The Group carries out an independent impairment test on an account receivable which is
individually insignificant but has the following feature (for instance, receivables over which there
exist disputes against the opposite parties or receivables concerning lawsuits and arbitrations; and
69
receivables of which there are obvious signs indicating that debtors may not be able to fulfill
repayment obligations).
Withdrawal method for bad debt provision:
The Group carries out an independent impairment test on an account receivable which is
individually insignificant but has the following feature. If there is any objective evidence proving
that the asset has been impaired (for instance, receivables over which there exist disputes against the
opposite parties or receivables concerning lawsuits and arbitrations; and receivables of which there
are obvious signs indicating that debtors may not be able to fulfill repayment obligations), the
Group recognizes impairment loss and makes bad-debt provisions according to the difference
between the present value of the asset’s future cash flow and the asset’s book value.
11. Inventory
(1) Classification
The inventories of the Group include raw materials, goods in process, merchandise on hand,
packaging materials, and low value consumables, etc.
(2) Pricing method for outgoing inventories
□ First-in first-out method √ Weighted average method □ Specific identification method □ Other
Bulk chemical raw materials, goods 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.
(3) Recognition basis of net realizable value and withdrawal method of depreciation reserves for
inventories
Inventories shall be measured whichever is lower in accordance with the cost and the net realizable
value at the period-end. 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.
(4) Inventory system for inventories:
√ Perpetual inventory system □ Periodic inventory system □ Other
The inventory system for inventories is perpetual inventory system.
(5) Amortization method of the low-value consumption goods and packing articles
Low-value consumption goods
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Amortisation method: one-off amortization method
Low value consumables shall be recoded at actual cost and be amortized by employing the one-off
amortization method when claiming.
Packing articles
Amortisation method: other
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.
12. Long-term equity investments
(1) Recognition of initial investment costs
As for long-term equity investments acquired by enterprise merger, if the merger is 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, and if the merger is not
under the same control, the sum of paid assets, occurred or assumed liabilities, and issued equity
securities by the purchasing party are included into costs of enterprise merger. Intermediary
expenses, such as the expenses for audit, assessment, and legal services, along with other relevant
administration fee, shall be recorded into the profits and losses of the current period. Transaction
costs arising from the issuance of equity securities or debt securities as merger consideration of the
purchasing party shall be recorded into the initially recognized amount of equity securities or debt
securities.
Other equity investments, except for the aforesaid long-term equity investments acquired by
enterprises merger, are initially measured according to costs, which can, in consideration of
different ways to obtain long-term equity investments, be respectively recognized by amount of
cash payment actually paid by the Group, fair value of equity securities issued by the Group, value
agreed upon investment contracts or investment agreements, fair value or original book value of
surrendered assets in transactions of non-currency assets, and fair value of the long-term equity
investment itself. Costs, taxes and other necessary expenses directly relevant to the acquirement of
long-term equity investments are also recorded onto investment costs.
(2) Subsequent measurement and recognition method of gains and losses
For the long-term equity investments which the Company have no joint control or significant
influence over invested entities, and there is no offer in the active market and the fair value cannot
be reliably measured, shall be accounted by cost method. Long-term equity investments with joint
control or significant influence over invested entities shall be accounted by equity method.
Long-term equity investments, which have no control, joint control or significant influence over
invested entities, nevertheless of which the fair value can be reliably measured, shall be accounted
as financial assets available for sale.
Besides, long-term equity investments that can implement control over invested entities are
accounted by cost method in financial statements of the Company.
① Long-term equity investments accounted by cost method
With the employment of cost method, long-term equity investments shall be valuated on the basis of
71
initial investment cost. Current investment income, except for actually paid amount during the
investment, and cash dividends or profits that have been declared but not yet been granted included
in the consideration, shall be ascertained in accordance with enjoyed cash dividends or profits
declared and granted by invested entities.
② Long-term equity investments accounted by equity method
With the employment of equity method, the initial investment cost of long-term equity investment
shall not be adjusted if the initial investment cost of long-term equity investment exceeds the share,
which should be enjoyed, of fair value of identifiable net assets of invested entities. Cost of
long-term equity investment shall be adjusted if the initial investment cost is less than the share,
which should be enjoyed, of fair value of identifiable net assets of invested entities, and the balance
between the two shall be recorded into profit or loss in the period in which it is incurred.
With the employment of equity method, profit or loss in the period in which it is incurred are the
share, which should be enjoyed or shared, of net gains and losses realized by invested entities in the
current year. When recognizing the share, which should be enjoyed, of net gains and losses of
invested entities, the recognition shall be implemented on the basis of fair value of all identifiable
assets of invested entities during the investment, and after the adjustment of net profit of invested
entities during the account period with the accordance of accounting policies of the Group. As for
gains and losses of unrealized internal transactions among associated enterprises, contractual
enterprises and the Group, the part belonging to the Group after calculating by shareholding
proportion shall be offset, and the investment gains and losses shall be thus recognized on that basis.
Nevertheless, losses, which belong to impairment losses of transferred assets in line with provisions
stipulated in the Accounting Standards for Enterprises No. 8 - Asset Impairment, of realized internal
transactions between invested entities and the Group shall not be offset. As for other integrated
incomes of invested entities, the book value of long-term equity investments shall be
correspondently adjusted and recognized as other investment incomes，which shall thus be recorded
into capital reserves.
When recognizing the incurred net losses, which should be shared, of invested entities, the limit
shall be the down-to-zero amount of write-down of book value of long-term equity investments and
other long-term equity essentially forming net investment over invested entities. Besides, if the
Group has any liability of undertaking extra losses over invested entities, then the estimated debts
shall be recognized in compliance with projected undertaken duties and recorded into gains and
losses of investment at the current period. If the invested entity realized net profits in subsequent
period, then the Group shall resume recognition of the shared amount of incomes after making up
unrecognized shared amount of losses with the shared amount incomes.
For the long-term equity investment on joint venture and associate held by the Company before
initially adopting the new accounting standard on 1 Jan. 2008, if there is debit balance of equity
investment relevant to such investment, which shall be recognized into profit or loss in the period in
which it is incurred with the amortised amount by straight-line method during the remaining period.
③ Acquisition of minority equity
During the preparation of consolidated financial statements, capital reserves shall be adjusted in
light of balance between long-term equity investments, which are newly increased because of the
purchase of minority stakes, and the share of net assets of subsidiaries, which should be enjoyed and
has been sustainably calculated since the acquisition date (or merger date) in accordance with newly
increased shareholding proportion. Retained earning shall be adjusted if capital reserves are
insufficient to dilute.
④ Disposal of long-term equity investments
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In consolidated financial statements, under the circumstance of keeping control power, the parent
company shall partially dispose long-term equity investments, and the balance between the disposed
price and the enjoyed net assets of subsidiaries correspondent to disposed long-term equity
investment shall be recorded into owners’ equity. If the partial disposal of parent company over
long-term equity investments of subsidiaries results in the loss of control over subsidiaries, in that
circumstance, it shall be managed according to relevant accounting policies stated in the Preparation
Method of Consolidated Financial Statements in Note IV. 4. (2).
As for disposal of long-term equity investment under other circumstances, the balance between
book value of disposed equity and its actually acquired price shall be included into profit or loss in
the period in which it is incurred. As for long-term equity investments with the employment of
equity method, other part of integrated incomes originally included in owners’ equity shall be
transferred to profit or loss in the period in which it is incurred in accordance with correspondent
proportion during the disposal. As for residual equity, it shall be recognized as long-term equity
investments or other relevant financial assets according to the book value, and shall be subsequently
measured according to accounting policies of the aforesaid long-term equity investments or
financial assets. Residual equity concerning accounting method transferred from cost method to
equity method shall be retrospectively restated and adjusted.
(3) Recognition basis for joint control and significant influence over invested entities
The term "control" means having the power to decide an enterprise's financial and operating policy
and obtain benefits from its business activities. The term "joint control" refers to the control over an
economic activity in accordance with the contracts and agreements, which does not exist unless the
investing parties of the economic activity with one an assent on sharing the control power over the
relevant important financial and operating decisions. The term "significant influences" refers to the
power to participate in making decisions on the financial and operating policies of an enterprise, but
not to control or do joint control together with other parties over the formulation of these policies.
When ascertaining whether or not it is able to control or have significant influences on an invested
entity, potential factors concerning the voting rights, such as investing enterprises, current
convertible corporate bonds, and current executable warrants of invested entities etc. have been
taken into full consideration.
(4) Impairment test method and withdrawal method of impairment provision
The Group shall check out whether there is any sign of impairment of long-term equity investments
on each balance sheet date. Where any evidence shows that there is possible assets impairment, the
recoverable amount of the assets shall be estimated. If the recoverable amount of the asset is less
than its book value, then asset impairment provision will be withdrawn in line with the balance and
recorded into profit or loss in the period in which it is incurred.
Once the impairment losses of long-term equity investments are recognized, they can’t be reversed
during the subsequent accounting period.
13. Investment real estates
The term "investment real estates" refers to the real estates held for generating rent and/or capital
appreciation. Investment real estates of the Group 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.
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The initial measurement of the investment real estate shall be made at its cost. Subsequent
expenditures incurred for an investment real estate is included in the cost of the investment real
estate when it is probable that economic benefits associated with the investment real estate will flow
to the Group and the cost can be reliably measured, otherwise the expenditure is recognised in profit
or loss in the period in which they are incurred.
The Group 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 the use right of buildings or
lands.
As for impairment test method and withdrawal method of impairment provision of investment real
estates, the Group shall judge whether there is sign of impairment on the balance sheet date. Where
any evidence shows that there is possible assets impairment, the recoverable amount of the assets
shall be estimated. When impairment test result shows that the recoverable amount of the asset is
lower than its book value, impairment provision shall be withdrawn in accordance with the balance
and recorded into impairment loss.
When owner-occupied real estate or inventories are changed into investment real estate or
investment real estate is changed into owner-occupied real estate, whose book value prior to the
change shall be the entry value after the change.
When an investment real estate is changed to an owner-occupied real estate, it is transferred to fixed
assets or intangible assets at the date of such change. When an owner-occupied real estate is
changed to be held to earn rental or for capital appreciation, the fixed asset or intangible asset is
transferred to investment real estate at the date of such change. If the fixed asset or intangible asset
is changed into investment real estate measured by adopting the cost pattern, whose book value
prior to the change shall be the entry value after the change; if the fixed asset or intangible asset is
changed into investment real estate measured by adopting the fair value pattern, whose fair value on
the date of such change shall be the entry value after the change
An investment real estate is derecognised on disposal or when the investment real estate is
permanently withdrawn from use and no future economic benefits are expected from its disposal.
The amount of proceeds on sale, transfer, retirement or damage of an investment real estate less its
carrying amount and related taxes and expenses is recognised in profit or loss in the period in which
it is incurred.
14. Fixed assets
(1) Conditions for recognition of fixed assets
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.
(2) Recognition basis and pricing method for fixed assets gained from finance lease
The "finance lease" shall refer to a lease that has transferred in substance all the risks and rewards
related to the ownership of an asset. The ownership of it may or may not eventually be transferred.
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In calculating the depreciation of a asset gained from finance lease, the lessee should adopt the
depreciation policy for the fixed assets which are owned by the lessee. If it is reasonable to be
certain that the lessee will obtain the ownership of the leased asset when the lease term expires, the
leased asset shall be fully depreciated over its useful life. If it is not reasonable to be certain that the
lessee will obtain the ownership of the leased asset at the expiry of the lease term, the leased asset
shall be fully depreciated over the shorter one of the lease term or its useful life.
(3) Depreciation methods for various fixed assets
The initial measurement of a fixed asset shall be made at its cost with the consideration of the effect
of expected discard expenses. From the next month of bringing the fixed asset to the expected
conditions for use, it shall be made the depreciation by adopting the straight-line method during its
useful life. The useful life, expected net salvage value and annual depreciation ratio of various fixed
assets are as follows:
The categories Estimated useful life (years) Residual value (%) Annual depreciation rate (%)
Houses and buildings 15-24 2-4 4-6.53
Machineries 3-15 2-4 6.4-32.67
Electronic equipment 9-18 4 5.33-10.67
Vehicles 9 2 10.89
Other equipments
Fixed assets acquired under
-- -- --
finance lease
Of which: houses and buildings
Machineries
Electronic equipment
Vehicles
Other equipments
(4) Testing method of impairment and withdrawal method of provision for impairment on fixed
assets
The Group shall judge whether there is sign of impairment on the balance sheet date. Where any
evidence shows that there is possible assets impairment, the Group shall estimate the recoverable
amount of the assets and make relevant impairment test.
When impairment test result shows that the recoverable amount of the asset is lower than its book
value, impairment provision shall be withdrawn in accordance with the balance and recorded into
impairment loss. The recoverable amount shall be determined on the basis of the higher one of the
net amount of the fair value of the asset minus the disposal expenses and the current value of the
expected future cash flow of the asset. Fair value of the asset shall be determined in light of the
price as stipulated in the sales agreement in the fair transaction. Where there is no sales agreement
but there is an active market of assets, the fair value shall be determined according to the price
bidden by the buyer of the asset. Where there is no sales agreement and no active market of assets,
75
the fair value shall be estimated in light of the best information available. The disposal expenses
shall include the relevant legal expenses, relevant taxes, truckage as well as the direct expenses for
bringing the assets into a marketable state. The current value of the expected future cash flow of an
asset shall be determined by the discounted cash with an appropriate discount rate, on the basis of
the expected future cash flow generated during the continuous use or final disposal of an asset.
Impairment provision of the asset shall be calculated and determined on the basis of single item
asset. Where it is difficult to do so, the enterprise shall determine the recoverable amount of the
group assets on the basis of the asset group to which the asset belongs. The term "group assets”
refers to a minimum combination of assets that can independently generate the flow-in cash.
Once the impairment losses of the aforesaid assets are recognized, they can’t be reversed during the
subsequent accounting period.
(5) Other explanations
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it
is probable that economic benefits associated with the fixed asset will flow to the Group and its cost
can be reliably measured. The carrying amount of those parts that are replaced is derecognized and
all other subsequent expenditures are recognised in profit or loss in the period in which it is
incurred.
The amount of proceeds on sale, transfer, retirement or damage of a fixed asset net less its carrying
amount and related taxes and expenses is recognised in profit or loss in the period in which it is
incurred.
The Group will check the useful life, expected net salvage value and depreciation method of fixed
assets at least at the end of year, and there is any change, the change will be treated as the change of
accounting estimation.
15. Construction in progress
(1) Categories of construction in progress
Construction in progress of the Group includes self-operating project and construction contracted.
(2) Criteria and time point of construction in progress being carried forward as fixed assets
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.
(3) Impairment test method and withdrawal method for impairment provision of construction in
progress
The Group shall judge whether there is sign of impairment on the balance sheet date. Where any
evidence shows that there is possible assets impairment, the Group shall estimate the recoverable
amount of the assets and make relevant impairment test.
When impairment test result shows that the recoverable amount of the asset is lower than its book
value, impairment provision shall be withdrawn in accordance with the balance and recorded into
impairment loss. The recoverable amount shall be determined on the basis of the higher one of the
net amount of the fair value of the asset minus the disposal expenses and the current value of the
expected future cash flow of the asset. Fair value of the asset shall be determined in light of the
price as stipulated in the sales agreement in the fair transaction. Where there is no sales agreement
but there is an active market of assets, the fair value shall be determined according to the price
bidden by the buyer of the asset. Where there is no sales agreement and no active market of assets,
76
the fair value shall be estimated in light of the best information available. The disposal expenses
shall include the relevant legal expenses, relevant taxes, truckage as well as the direct expenses for
bringing the assets into a marketable state. The current value of the expected future cash flow of an
asset shall be determined by the discounted cash with an appropriate discount rate, on the basis of
the expected future cash flow generated during the continuous use or final disposal of an asset.
Impairment provision of the asset shall be calculated and determined on the basis of single item
asset. Where it is difficult to do so, the enterprise shall determine the recoverable amount of the
group assets on the basis of the asset group to which the asset belongs. The term "group assets”
refers to a minimum combination of assets that can independently generate the flow-in cash.
Once the impairment losses of the aforesaid assets are recognized, they can’t be reversed during the
subsequent accounting period.
16. Borrowing costs
(1) Recognition principles for capitalization of borrowing costs
When the borrowing costs can be directly attributable to the construction or production of assets
eligible for capitalization, and 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. 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. Other borrowing
costs shall be recognized as expenses when incurred.
(2) Capitalization period of borrowing costs
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, which occurred after the asset eligible for capitalization under acquisition and construction or
production being ready for the intended use or sale, shall be recognized as expenses with the
occurring amount, and then recorded into current gains and losses.
(3) Period for ceasing capitalization of borrowing costs
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 till the construction or production of the asset restarts.
(4) Calculation method of capitalized amount of borrowing costs
The amount of interests shall be capitalized in light of the actual cost incurred of the specially
borrowed loan at the current period minus the income of interests earned on the unused borrowing
loans as a deposit in the bank or as a temporary investment. The to-be-capitalized amount shall be
determined 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.
17. Biological assets
Naught
77
18. Oil-gas assets
Naught
19. Intangible assets
(1) Pricing method of intangible assets
Intangible assets are initially measured according to its costs. Expenses relating to intangible assets
shall be recorded into cost of intangible assets if relevant economic profit is much likely to flow
into the Group and its cost can be reliably measured. Except for that, expenses of other items shall
be recorded into profit or loss in the period in which it is incurred when incurred.
(2) Estimated useful life of intangible assets with limited useful life
Intangible assets with limited service lives are averagely amortized by deducting the expected net
salvage value and the withdrawn accumulative amount of provision for the impairment from the
original value on a straight-line basis within their expected service lives beginning from the start of
its usage.
At the end of the period, service lives and amortization method for intangible assets with limited
service lives shall be checked. If there’s any change, the change shall be disposed as a change of the
accounting estimates.
Item Estimated useful life Basis
(3) Judgment basis of intangible assets with uncertain useful life
(4) Withdrawal of impairment provision of intangible assets
The Group shall judge whether there is sign of impairment on the balance sheet date. Where any
evidence shows that there is possible assets impairment, the Group shall estimate the recoverable
amount of the assets and make relevant impairment test. Intangible assets of good will or with
uncertain service lives, as well as intangible assets failing to reach the condition for use, shall be
subject to impairment tests every year, no matter whether there is any sign of possible assets
impairment.
When impairment test result shows that the recoverable amount of the asset is lower than its book
value, impairment provision shall be withdrawn in accordance with the balance and recorded into
impairment loss. The recoverable amount shall be determined on the basis of the higher one of the
net amount of the fair value of the asset minus the disposal expenses and the current value of the
expected future cash flow of the asset. Fair value of the asset shall be determined in light of the
price as stipulated in the sales agreement in the fair transaction. Where there is no sales agreement
but there is an active market of assets, the fair value shall be determined according to the price
bidden by the buyer of the asset. Where there is no sales agreement and no active market of assets,
the fair value shall be estimated in light of the best information available. The disposal expenses
shall include the relevant legal expenses, relevant taxes, truckage as well as the direct expenses for
bringing the assets into a marketable state. The current value of the expected future cash flow of an
asset shall be determined by the discounted cash with an appropriate discount rate, on the basis of
the expected future cash flow generated during the continuous use or final disposal of an asset.
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Impairment provision of the asset shall be calculated and determined on the basis of single item
asset. Where it is difficult to do so, the enterprise shall determine the recoverable amount of the
group assets on the basis of the asset group to which the asset belongs. The term "group assets”
refers to a minimum combination of assets that can independently generate the flow-in cash.
When making an impairment test, the carrying value of the good will presented separately in
financial statements shall be distributed to the asset group or combination of asset groups that can
benefit from the synergy effect of enterprise merger. If the impairment test shows that the
recoverable amount of the asset groups or combinations of asset groups containing good will is
lower than their carrying value, then the correspondent impairment loss shall be recognized. The
amount of the impairment loss shall first charge against the carrying value of the headquarter' assets
and good will which are apportioned to the asset group or combination of asset groups, then charge
it against the carrying value of other assets in proportion to the weight of other assets in the asset
group or combination of asset groups with the good will excluded.
Once the impairment losses of the aforesaid assets are recognized, they can’t be reversed during the
subsequent accounting period.
(5) Criteria of separating the research phase and development phase of internal R&D project
The expenditures for internal research and development projects of an enterprise shall be classified
into research expenditures and development expenditures.
(6) Calculation of the expenditures of internal R&D project
The expenditures for internal research and development projects of an enterprise shall be classified
into research expenditures and development expenditures.
The research expenditures shall be recorded into the profit or loss for the current period.
The development expenditures shall be confirmed as intangible assets when they satisfy the
following conditions simultaneously, and shall be recorded into profit or loss for the current period
when they don’t satisfy the following conditions.
① It is feasible technically to finish 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 shall be proved,
including being able to prove that there is a potential market for the products manufactured by
applying the intangible assets or there is a potential market for the intangible assets itself or 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;
⑤ The development expenditures of the intangible assets can be reliably measured.
As for expenses that can’t be identified as research expenditures or development expenditures, the
occurred R & D expenses shall be all included in current profits and losses.
20. Amortization method of long-term deferred expenses
21. Assets transfer with repurchasing conditions
22. Estimated liabilities
(1) Recognition criteria of estimated liabilities
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The obligation pertinent to a contingent event shall be recognized as an estimated liability when the
following conditions are satisfied simultaneously: (1) That obligation is a current obligation of the
Group; (2) It is likely to cause any economic benefit to flow out of the Group as a result of
performance of the obligation; (3) The amount of the obligation can be measured in a reliable way.
(2) Measurement of estimated liabilities
On the balance sheet date, with full consideration of the risks, uncertainty, time value of money, and
other factors pertinent to the contingent event, the estimated liabilities shall be initially measured in
accordance with the best estimate of the necessary expenses for the performance of the current
obligation.
When all or some of the expenses necessary for the liquidation of an estimated liability of the
Group is expected to be compensated by a third party, the compensation should be separately
recognized as an asset only when it is virtually certain that the reimbursement will be obtained. The
amount recognized for the reimbursement should not exceed the book value of the estimated
liability.
23. Share-based payment and equity instruments
(1) Categories of share-based payment
(2) The measures for the recognition of the fair value of the equity instruments.
(3) Basis for the recognition of the best estimation of the vested equity instruments
(4) Relevant accounting treatment on the implementation, revision and termination of share-based
payment plan
24. Repurchase of shares of the Company
25. Revenues
(1) Criteria for recognition time of revenue 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 Group; 2) the Group 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 enterprise;
and 5) the relevant costs incurred or to be incurred can be measured in a reliable way.
(2) Recognition basis of assignment of right to use assets revenue
When the economic benefits relevant to the assignment of right to use assets may flow into the
enterprise and the amount of revenue can be measured in a reliable way, the Company shall
recognize relevant revenue.
(3) Recognition basis and method for the schedule of contracted project when recognizing the
revenue from providing labour services and construction contract by percentage-of-completion
method
26. Government Subsidies
(1) Types
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A government subsidy means the monetary or non-monetary assets obtained free by the Group from
the government, but excluding the capital invested by the government as the owner of the enterprise.
Government subsidies consist of the government subsidies pertinent to assets and government
subsidies pertinent to income.
(2) Accounting treatment method
If a government subsidy is a monetary asset, it shall be measured in the light of the received or
receivable amount. If a government subsidy is a non-monetary asset, it shall be measured at its fair
value. If its fair value cannot be obtained in a reliable way, it shall be measured at its nominal
amount. The government subsidies measured at their nominal amounts shall be directly included in
the current profits and losses.
The government subsidies pertinent to assets shall be recognized as deferred income, equally
distributed within the useful lives of the relevant assets, and included in the current profits and
losses. The government subsidies pertinent to incomes used for compensating the related future
expenses or losses shall be recognized as deferred income and shall be included in the current
profits and losses during the period when the relevant expenses are recognized; or those subsidies
used for compensating the related expenses or losses shall be directly included in the current profits
and losses.
If it is necessary to refund any government subsidy which has been recognized, it shall be treated
respectively in accordance with the circumstances as follows: 1) If there is the deferred income
concerned, the book balance of the deferred income shall be offset against, but the excessive part
shall be included in the current profits and losses; and 2) If there is no deferred income concerned to
the government subsidy, it shall be directly included in the current profits and losses.
27. Deferred income tax assets / Deferred income tax liabilities
(1) Recognition basis of deferred income tax assets
(2) Recognition basis of deferred income tax liabilities
28. Operating lease and financial lease
(1) Accounting treatments of operating lease
Business of operating leases recorded by the Group as the lessee:
The rent expenses from operating leases shall be recorded by the lessee in the relevant asset costs or
the profits and losses of the current period by using the straight-line method over each period of the
lease term. The initial direct costs shall be recognized as the profits and losses of the current period.
The contingent rents shall be recorded into the profits and losses of the current period in which they
actually arise.
Business of operating leases recorded by the Group as the lessor:
The rent incomes from operating leases shall be recognized as the profits and losses of the current
period by using the straight-line method over each period of the lease term. The initial direct costs
of great amount shall be capitalized when incurred, and be recorded into current profits and losses
in accordance with the same basis for recognition of rent incomes over the whole lease term. The
initial direct costs of small amount shall be recorded into current profits and losses when incurred.
The contingent rents shall be recorded into the profits and losses of the current period in which they
actually arise.
81
(2) Accounting treatments of financial lease
Business of finance leases recorded by the Group as the lessee:
On the lease beginning date, the Group shall record the lower one of the fair value of the leased
asset and the present value of the minimum lease payments on the lease beginning date as the
entering value in an account, recognize the amount of the minimum lease payments as the entering
value in an account of long-term account payable, and treat the balance between the recorded
amount of the leased asset and the long-term account payable as unrecognized financing charges.
Besides, the initial direct costs directly attributable to the leased item incurred during the process of
lease negotiating and signing the leasing agreement shall be recorded in the asset value of the
current period. The balance through deducting unrecognized financing charges from the minimum
lease payments shall be respectively stated in long-term liabilities and long-term liabilities due
within 1 year.
Unrecognized financing charges shall be adopted by the effective interest rate method in the lease
term, so as to calculate and recognize current financing charges. The contingent rents shall be
recorded into the profits and losses of the current period in which they actually arise.
Business of finance leases recorded by the Group as the lessor:
On the beginning date of the lease term, the Group shall recognize the sum of the minimum lease
receipts on the lease beginning date and the initial direct costs as the entering value in an account of
the financing lease values receivable, and record the unguaranteed residual value at the same time.
The balance between the sum of the minimum lease receipts, the initial direct costs and the
unguaranteed residual value and the sum of their present values shall be recognized as unrealized
financing income. The balance through deducting unrealized financing incomes from the finance
lease accounts receivable shall be respectively stated in long-term claims and long-term claims due
within 1 year.
Unrecognized financing incomes shall be adopted by the effective interest rate method in the lease
term, so as to calculate and recognize current financing revenues. The contingent rents shall be
recorded into the profits and losses of the current period in which they actually arise.
29. Assets held for sale
(1) Recognition criteria of the assets held for sale
(2) Accounting treatments of the assets held for sale
30. Capitalization of assets
31. Hedging accounting
32. Changes in main accounting policies and estimates
Were the main accounting policies or estimates changed during the reporting period?
□Yes √No □ Inapplicable
(1) Change of accounting policies
Were the main accounting policies changed during the reporting period?
□Yes √No □ Inapplicable
82
(2) Change of accounting estimates
Were the main accounting estimates changed during the reporting period?
□Yes √No □ Inapplicable
33. Correction of previous accounting errors
Was any accounting error made in previous periods discovered in the reporting period?
□Yes □No □ Inapplicable
(1) Retrospective restatement method
Was any previous accounting error adopting retrospective restatement method discovered in the
reporting period?
□Yes □No □ Inapplicable
(2) Prospective application method
Was any previous accounting error adopting prospective application method discovered in the
reporting period?
□Yes □No □ Inapplicable
34. Other main accounting policies and estimates as well as compilation method of financial
statements
V. Taxation
1. Main taxes and tax rate
Category of taxes Tax basis Tax rate
VAT Taxable income 13% 17%
Consumption tax
Business tax Taxable income 5%
Urban maintenance and construction tax Taxable circulating tax 5% 7%
Enterprise income tax Taxable income 25%
Education surcharge Taxable circulating tax 3%
The income tax rates adopted by each subsidiary and branch factory
2. Tax preference and official documents
3. Other notes
VI. Business combination and consolidated financial statement
General instruction of business combination and consolidated financial statements
1. Subsidiaries
83
(1) Subsidiaries obtained by establishment and investment
Unit: RMB Yuan
Balance of
parent
company’s
equity after
deducting
Actual the
The The
amount of Other Included in Deductible difference
Registered Business Registered Business proportion proportion Minority
Subsidiaries Type Currency investments essential consolidated minority that loss of
place nature capital scope of holding of voting interest
at the investment statement interests minority
shares（%） rights（%）
period-end interests
exceed
equity
obtained by
minority
shareholders
Sanonda Controlled
Production
(Jingzhou) subsidiary
Manufacturi of pesticide
Pesticide & Jingzhou 3,000.00 2,750.00 90% 90% Yes 489,624.92
ng and
Chemical
intermediate
Co., Ltd.
Hubei Controlled Import and
Sanonda subsidiary export of
2,465,036.5
Foreign Jingzhou Trading 1,000.00 pesticide 900.00 90% 90% Yes
3
Trading Co., and
Ltd. intermediate
Hubei Controlled Production
Manufacturi
Sanonda subsidiary Tianmen 3,000.00 and sale of 1,574.50 98.5% 98.5% Yes 448,710.18
ng
Tianmen pesticide
84
Agrochemic
al Co., Ltd.
Jingzhou Controlled Production
Longhua subsidiary Manufacturi and sale of 5,712,542.1
Jingzhou 500.00 325.00 65% 65% Yes
Petrochemic ng chemical 1
als Co., Ltd. products
Other notes to subsidiaries obtained by establishment and investment:
Note: The Company directly holds 85.00% equity to Hubei Sanonda Tianmen Agrochemical Co., Ltd., and indirectly holds another 13.50%
equity by the Company’s subsidiary Hubei Sanonda Foreign Trading Co., Ltd. As such, the Company’s shareholding proportion over Hubei
Sanonda Tianmen Agrochemical Co., Ltd. totaled to 98.50%.
85
（2）Subsidiary through business combination under the same control
Unit: RMB Yuan
Balance
of
parent
compan
y’s
equity
after
deducti
Actual ng the
amount The The Include Deducti differen
Other
of proporti proporti d in ble ce that
Registe Registe essentia Minorit
Subsidi Busines Currenc Busines investm on of on of consoli minorit loss of
Type red red l y
aries s nature y s scope ents at holding voting dated y minorit
place capital investm interest
the shares rights stateme interest y
ent
period- （%） （%） nt s interest
end s
exceed
equity
obtaine
d by
minorit
y
shareho
lders
Jingzho Product
u ion and
Control
Hongxi sale of
led Jingzh Manufa 4,000.0 3,761.9 429,69
ang chemic 98.5% 98.5% Yes
subsidi ou cturing 0 9 4.17
Chemic al raw
ary
als Co., materia
Ltd. ls
Other notes to subsidiaries obtained through business combination under the same control:
(3) Subsidiary through business combination not under the same control
The group has no subsidiaries obtained through business combination under the same control.
Unit: RMB Yuan
Actual The The Include Deducti Balance
Other
amount proporti proporti d in ble of
Registe Registe essentia Minorit
Subsidi Busines Currenc Busines of on of on of consoli minorit parent
Type red red l y
aries s nature y s scope investm holding voting dated y compan
place capital investm interest
ents at shares rights stateme interest y’s
ent
the （%） （%） nt s equity
86
period- after
end deducti
ng the
differen
ce that
loss of
minorit
y
interest
s
exceed
equity
obtaine
d by
minorit
y
shareho
lders
Other notes to subsidiaries obtained through business combination not under the same control:
2. Special purpose entities or operating entities with control right formed by entrusted
operation or lease
□ Applicable √ Inapplicable
Other explanation on special purpose entities or operating entities with control right formed by
entrusted operation or lease:
3. Explanation on changes in consolidated scope
Explanation on changes in consolidated scope:
The Group has no changes in consolidated scope during the reporting period.
□ Applicable √ Inapplicable
4. Subsidiaries that newly combined into and not combined into consolidation scope in the
reporting period
The subsidiaries, special purpose entities and operating entities with control right formed by
entrusted operation or lease that newly included in the consolidated scope
Unit: RMB Yuan
Name Closing net assets Net profit in current period
The subsidiaries, special purpose entities and operating entities with control right formed by
entrusted operation or lease that not longer included in the consolidated scope in the reporting
period
Unit: RMB Yuan
Net profit from year-begin to
Name Net asset at the disposal date
disposal date
87
Other notes to entities newly combined into and not combined into consolidation scope:
5. Business combination under same control during the reporting period
Unit: RMB Yuan
Cash flow arising
Judgment basis of The consolidated The consolidated
from operating
business Actual controller of income from net profit from
The combined party activities between
combination under the same control period-begin to period-begin to
period-begin and
the same control combination date combination date
combination date
Other notes to business combination under same control:
6. Business combination not under same control during the reporting period
Unit: RMB Yuan
The combined party Amount of goodwill Calculation method of goodwill
Other notes to business combination not under same control:
7. Subsidiaries reduced by selling equities without control right during the reporting period
Name of subsidiary Disposal date Recognition method of gains and losses
Other notes to subsidiaries reduced by selling equities without control right during the reporting
period:
8. The counter purchases in the reporting period
Calculation method of goodwill
Judgment basis of counter Recognition method of recognized or included into
The backdoor party
purchase combination costs current gains and losses in the
combination
Other notes to counter purchases:
9. Mergers in the reporting period
Unit: RMB Yuan
Type of merger Main assets merged in Main liabilities merged in
Mergers under the
Mergers under the same control Item Amount Item
same control
Mergers not under the same control Item Amount Item Amount
Other notes to mergers:
10. Exchange rates of major items in financial statements for foreign entities
(VII) Notes on major items in consolidated financial statements of the Company
1. Monetary funds
88
Unit: RMB Yuan
Closing balance Opening balance
Item Amount in foreign Exchan Amount in Exchange
Amount in RMB Amount in RMB
currency ge rate foreign currency rate
Cash: -- -- 10,529.43 -- -- 2,400.93
RMB -- -- 10,529.43 -- -- 2,400.93
Bank deposit: -- -- 391,565,132.57 -- -- 219,585,287.06
RMB -- -- 337,804,901.87 -- -- 209,566,737.85
USD 8,499,775.60 6.3249 53,760,230.70 1,590,018.76 6.3009 10,018,549.21
Other monetary funds: -- -- 18,000,000.00 -- -- 0.00
RMB -- -- 18,000,000.00 -- --
Total -- -- 409,575,662.00 -- -- 219,587,687.99
Special explanation shall be made for the accounts limited by being mortgaged, pledged or frozen,
deposited overseas or with potential collecting risks:
Naught
2. Trading financial assets
(1) Trading financial assets
Unit: RMB Yuan
Item Closing fair value Opening fair value
Trading bonds investment
Trading equity instruments investment
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
Derivative financial assets
Hedging instruments
Others
Total
(2) Trading financial assets with realizable limit
Unit: RMB Yuan
Trading restriction or other significant limits in
Item Closing balance
realization
(3) Hedging instruments and notes to relevant hedging transaction
Naught
3. Notes receivable
89
(1) Category of notes receivable
Unit: RMB Yuan
Category Closing balance Opening balance
Bank acceptance bill 14,028,356.00 36,684,056.23
Total 14,028,356.00 36,684,056.23
(2) Notes receivable pledged at period-end
Unit: RMB Yuan
Issuing entity Date of issuance Expiring date Amount Remark
Total -- -- --
Notes:
The Group has no such notes receivable pledged at period-end.
(3) Notes transferred to accounts receivable because drawer of the notes fails to execute the contract
or agreement, and undue notes endorsed to other parties at the end of the period
Unit: RMB Yuan
Issuing entity Date of issuance Expiring date Amount Remark
Total -- -- --
Notes:
The Group has no notes transferred to accounts receivable because drawer of the notes fails to
execute the contract or agreement
Undue notes endorsed to other parties by the Company
Unit: RMB Yuan
Issuing entity Date of issuance Expiring date Amount Remark
Yifan Biotechnology
28 Apr. 2012 28 Oct. 2012 1,305,000.00
Group Co., Ltd.
Chongqing Chemical and
Pharmaceutical Holdings 30 May 2012 30 Nov. 2012 1,108,800.00
Group Finance Co., Ltd.
Hangzhou Huakang
8 Jun. 2012 8 Dec. 2012 1,000,000.00
Industrial Co., Ltd.
Hangzhou Huakang
8 Jun. 2012 8 Dec. 2012 1,000,000.00
Industrial Co., Ltd.
Hangzhou Huakang
8 Jun. 2012 8 Dec. 2012 1,000,000.00
Industrial Co., Ltd.
Total -- -- 5,413,800.00 --
Note:
Notes of commercial acceptance bill that already discounted or pledged.
Naught
90
4. Dividends receivable
Unit: RMB Yuan
Increase in current
Item Opening balance Decrease in current period Closing balance
period
Dividends receivable
aging less than one year
Of which:
Dividends receivable
aging over one year
Of which: -- -- -- --
Total
Notes:
5. Interest receivable
(1) Interest receivable
Unit: RMB Yuan
Increase in current Decrease in current
Item Opening balance Closing balance
period period
Total
(2) Overdue interest
Unit: RMB Yuan
Borrowing entity Overdue days (day) Amount of overdue interest
Total --
(3) Notes to interest receivable
6. Accounts receivable
(1) Accounts receivable listed by categories
Unit: RMB Yuan
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category
Proportion Proportion Proportion Proportion
Amount Amount Amount Amount
(%) (%) (%) (%)
Accounts receivable with
significant single amount
7,874,358.8 7,874,358.8 7,874,358
and individually 2.68% 100% 5.66% 7,874,358.80 100%
0 0 .80
withdrawn bad debt
provision
Accounts receivable for which bad debt provisions are made on the group basis
Account age groups 284,554,34 96.68% 30,699,631. 10.79% 128,793,0 92.59% 22,574,374.2 17.53%
91
8.55 25 67.55 6
284,554,34 30,699,631. 128,793,0 22,574,374.2
Subtotal of the groups 96.68% 10.79% 92.59% 17.53%
8.55 25 67.55 6
Accounts receivable with
insignificant single 1,870,848.4 1,870,848.4 2,439,247
amount and individually 0.64% 100% 1.75% 2,439,247.27 100%
withdrawn bad debt 0 0 .27
provision
294,299,55 40,444,838. 139,106,6 32,887,980.3
Total -- -- -- --
5.75 45 73.62 3
Notes of categories of accounts receivable:
1. The Company defines an account receivable equivalent to or above RMB 5 million as an account
receivable which is individually significant.
2. Accounts receivable are divided into three categories by groups
(1) Related-party groups: Divided according to the related-party relation between the debtor and the
Company (usually the Company’s actual controller and other enterprises controlled by it);
(2) Risk-free groups: Divided according to the debtor’s reputation, the nature of the account,
safeguard measures, etc. (usually amounts due from the government for purchases, reserve funds for
employees, deposits for contracts, accounts receivable arising from guarantee terms, etc.);
(3) Account age groups: Divided according to ages of accounts receivable.
Making bad debt provisions for group of accounts according to aging analysis:
Provision ratio for accounts Provision ratio for other
Account age
receivable (%) receivables (%)
Within 1 year (including 1 year, same
5 5
below)
1-2 years 10 10
2-3 years 30 30
3-4 years 50 50
4-5 years 50 50
Over 5 years 100 100
The Group carries out an independent impairment test on an account receivable which is
individually insignificant but has the following feature. If there is any objective evidence proving
that the asset has been impaired (for instance, receivables over which there exist disputes against the
opposite parties or receivables concerning lawsuits and arbitrations; and receivables of which there
are obvious signs indicating that debtors may not be able to fulfill repayment obligations), the
Group recognizes impairment loss and makes bad-debt provisions according to the difference
between the present value of the asset’s future cash flow and the asset’s book value.
Accounts receivable with significant single amount and individually withdrawn bad debt provision
√ Applicable □Inapplicable
Unit: RMB Yuan
Content of accounts receivable Book value Provision for bad Withdrawal Reason for
92
debts proportion withdrawal
Estimated to be
Trade receivable from foreign customers 7,874,358.80 7,874,358.80 100%
irrecoverable
Total 7,874,358.80 7,874,358.80 --
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Inapplicable
Unit: RMB Yuan
Closing balance Opening balance
Aging Book balance Provision for bad Book balance Provision for bad
Amount Proportion debts Amount Proportion debts
Within 1 year
Including: -- -- -- -- -- --
Within 1 year 264,571,910.43 92.98% 13,228,595.52 110,511,784.05 85.81% 5,525,589.20
Subtotal of within
264,571,910.43 92.98% 13,228,595.52 110,511,784.05 85.81% 5,525,589.20
1 year
1-2 years 2,180,549.16 0.77% 218,054.92 1,099,577.63 0.85% 109,957.77
2-3 years 519,217.36 0.18% 155,765.21 22,542.40 0.02% 6,762.72
Over 3 years 17,282,671.60 6.07% 17,097,215.60 17,159,163.47 13.32% 16,932,064.57
3 to 4 years 33,388.38 0.01% 16,694.19 342,556.21 0.27% 171,278.11
4 to 5 years 337,523.61 0.12% 168,761.80 111,641.60 0.09% 55,820.80
Over 5 years 16,911,759.61 5.94% 16,911,759.61 16,704,965.66 12.97% 16,704,965.66
Total 284,554,348.55 -- 30,699,631.25 128,793,067.55 -- 22,574,374.26
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt
provision:
□ Applicable √ Inapplicable
In the groups, accounts receivable adopting other methods to withdraw bad debt provision:
□ Applicable √ Inapplicable
Accounts receivable with insignificant single amount but individually withdrawn bad debt provision
at period-end:
√ Applicable □ Inapplicable
Unit: RMB Yuan
Content of accounts
Book value Provision for bad debts Withdrawal proportion Reason for withdrawal
receivable
Estimated to be
Trade receivables 1,870,848.40 1,870,848.40 100%
irrecoverable
Total 1,870,848.40 1,870,848.40 100% --
(2) Information of accounts receivable reversed or recovered in the reporting period
Unit: RMB Yuan
Content of accounts Reason for reversal or Basis on recognition of Withdrawal amount of Reversed or recovered
93
receivable recovery provision for bad debts bad debt provision before amount
the reversal or recovery
Total -- -- 0.00 --
The withdrawal of bad debt provision of accounts receivable with significant single amount or
insignificant single amount but individually made impairment test at the end of reporting period:
Content of accounts Withdrawal proportion
Book balance Amount of bad debts Reason
receivable (%)
Total -- --
Notes to accounts receivable with insignificant single amount but large risks of groups after
grouping by credit risks characteristics:
It mainly refers to receivables over which there exist disputes against the opposite parties or
receivables concerning lawsuits and arbitrations; and receivables of which there are obvious signs
indicating that debtors may not be able to fulfill repayment obligations
(3) Information of accounts receivable that written off in the reporting period
Unit: RMB Yuan
Whether arising
Name of company Nature Date Amount Reason from related-party
transaction or not
Total -- -- 0.00 -- --
Notes:
The Group has no accounts receivable with significant amount that written off in the reporting
period
(4) Information of shareholders with more than 5% (including 5%) of the voting shares of the
Company in accounts receivable in reporting period
□ Applicable √ Inapplicable
(5) Nature or content of other accounts receivable with significant amount
Unit: RMB Yuan
Name of company Relationship Amount Term Proportion (%)
Foreign customer A Non-related customer 36,402,530.11 Within one year 12.37%
Foreign customer B Non-related customer 16,528,056.89 Within one year 5.62%
Nantong WEILIKE
Non-related customer 15,360,000.00 Within one year 5.22%
Chemical Co., Ltd.
Hangzhou Sanyang
Non-related customer 11,593,958.30 Within one year 3.94%
Agricultural Materials
94
Co., Ltd.
Foreign customer C Non-related customer 10,981,267.66 Within one year 3.73%
Total -- 90,865,812.96 -- 30.88%
(6) Accounts receivable due from related parties
Unit: RMB Yuan
Name of company Relationship Amount Proportion (%)
Total -- 0.00 0%
(7) Information of accounts receivable that terminated recognition
Unit: RMB Yuan
Gains or loses related to the termination of
Item Amount of termination
recognition
Total 0.00 0.00
(8) If securitization is carried out on accounts receivable as the underlying assets, please list amount
of assets and liabilities arising from further involvement
Unit: RMB Yuan
Item Period-end
Assets:
Subtotal of assets
Liabilities:
Subtotal of liabilities
7. Other accounts receivable
(1) Other accounts receivable disclosed by type:
Unit: RMB Yuan
Closing balance Opening balance
Provision for doubtful Provision for doubtful
Category Book balance Book balance
debts debts
Proportio Proportio Proportion Proportio
Amount Amount Amount Amount
n (%) n (%) (%) n (%)
Other accounts
receivable that is
individually significant 0.00 0.00 0.00 0.00
and provisions for bad
debts individually
Other accounts receivable that provisions for bad debts by group
95
26,240,617.9 23,165,935.3
Risk-free groups 74.14% 74.07%
3 0
Account age groups 9,151,890.29 25.86% 6,468,324.03 70.68% 8,031,318.75 25.68% 6,783,412.51 84.46%
35,392,508.2 31,197,254.0
Subtotal of group 100% 6,468,324.03 18.28% 99.75% 6,783,412.51 21.74%
2 5
Other accounts
receivable that is
individually insignificant 0.00 0.00 77,195.30 0.25% 77,195.30 100%
but provisions for bad
debts individually
35,392,508.2 31,274,449.3
Total -- 6,468,324.03 -- -- 6,860,607.81 --
2 5
Notes of categories of other accounts receivable:
1. The Company defines an account receivable equivalent to or above RMB 5 million as an account
receivable which is individually significant.
2. Accounts receivable are divided into three categories by groups
(1) Related-party groups: Divided according to the related-party relation between the debtor and the
Company (usually the Company’s actual controller and other enterprises controlled by it);
(2) Risk-free groups: Divided according to the debtor’s reputation, the nature of the account,
safeguard measures, etc. (usually amounts due from the government for purchases, reserve funds for
employees, deposits for contracts, accounts receivable arising from guarantee terms, etc.);
(3) Account age groups: Divided according to ages of accounts receivable.
Making bad debt provisions for group of accounts according to aging analysis:
Provision ratio for accounts Provision ratio for other
Account age
receivable (%) receivables (%)
Within 1 year (including 1 year, same
5 5
below)
1-2 years 10 10
2-3 years 30 30
3-4 years 50 50
4-5 years 50 50
Over 5 years 100 100
The Group carries out an independent impairment test on an account receivable which is
individually insignificant but has the following feature. If there is any objective evidence proving
that the asset has been impaired (for instance, receivables over which there exist disputes against the
opposite parties or receivables concerning lawsuits and arbitrations; and receivables of which there
are obvious signs indicating that debtors may not be able to fulfill repayment obligations), the
Group recognizes impairment loss and makes bad-debt provisions according to the difference
between the present value of the asset’s future cash flow and the asset’s book value.
96
Other accounts receivable with significant single amount and individually withdrawn bad debt
provision
□Applicable √Inapplicable
In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt
provision:
√ Applicable □ Inapplicable
Unit: RMB Yuan
Closing balance Opening balance
Book balance Book balance
Aging
Proporti Bad debt provision Proporti Bad debt provision
Amount Amount
on (%) on (%)
Within 1 year
Including:
Within 1 year 2,363,242.44 25.83% 118,162.13 926,818.30 11.54% 46,340.89
Subtotal for those aging
2,363,242.44 25.83% 118,162.13 926,818.30 11.54% 46,340.89
within 1 year
1-2 years 266,698.75 2.91% 26,669.88 116,463.00 1.45% 11,646.30
2-3 years 71,336.65 0.78% 21,401.00 78,230.70 0.97% 23,469.23
Over 3 years 6,450,612.45 70.48% 6,302,091.02 6,909,806.75 86.04% 6,701,956.09
3-4 years 82,609.96 0.9% 41,304.98 227,215.43 2.83% 113,607.72
4-5 years 214,432.90 2.34% 107,216.45 188,485.90 2.35% 94,242.95
Over 5 years 6,153,569.59 67.24% 6,153,569.59 6,494,105.42 80.86% 6,494,105.42
Total 9,151,890.29 -- 6,468,324.03 8,031,318.75 -- 6,783,412.51
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt
provision:
□ Applicable √ Inapplicable
In the groups, other accounts receivable adopting other methods to withdraw bad debt provision:
√ Applicable □ Inapplicable
Unit: RMB Yuan
Name of group Book balance Provision for bad debts
Risk-free groups 26,240,617.93 0.00
Total 26,240,617.93 0.00
Other accounts receivable with insignificant single amount but individually withdrawn bad debt
provision at period-end:
□ Applicable √ Inapplicable
(2) Information of other accounts receivable reversed or recovered in the reporting period
Unit: RMB Yuan
97
Withdrawal amount of
Content of other accounts Reason for reversal or Basis on recognition of Reversed or recovered
bad debt provision before
receivable recovery provision for bad debts amount
the reversal or recovery
Total -- -- 0.00 --
The withdrawal of bad debt provision of other accounts receivable with significant single amount or
insignificant single amount but individually made impairment test at the end of reporting period:
Content of other accounts Withdrawal proportion
Book balance Amount of bad debts Reason
receivable (%)
Total -- --
Notes to other accounts receivable with insignificant single amount but large risks of groups after
grouping by credit risks characteristics:
Naught
(3) Information of other accounts receivable written off in the reporting period
Unit: RMB Yuan
Whether arising from
Nature of other
Name of company Write off date Write off amount Write off reason related party
accounts receivable
transactions or not
Total -- -- 0.00 -- --
Notes of other accounts receivable:
The Group has no other accounts receivable written off in the reporting period
(4) The other accounts receivable due from shareholders with more than 5% (including 5%) of the voting shares
of the Company in the reporting period
□ Applicable √ Inapplicable
(5) Nature or content of other accounts receivable with significant amount
Unit: RMB Yuan
Nature or details of the
Name of entity Amount Proportion of the total (%)
amount
National export tax
Export tax rebates receivable 26,066,237.85 73.65%
rebates receivable
Total 26,066,237.85 -- 73.65%
Notes:
The grants of national export tax rebates receivable exist no bad debts
(6) Information of top five other accounts receivable
Unit: RMB Yuan
Name of entity Relationship with the Amount Aging Proportion of the total
98
Company (%)
Grants
receivable—export Non-related party 26,066,237.85 Within one year 73.65%
rebates
Shantou Biyue Plastic
Non-related party 3,125,000.00 Over 5 years 8.83%
Co., Ltd.
Hubei Jingzhou Shashi
Agricultural Production Non-related party 548,500.00 Over 5 years 1.55%
Materials Co., Ltd.
Liang Jiqin Non-related party 380,000.00 Within one year 1.07%
Production Safety
Supervision Bureau of Non-related party 300,000.00 Over 5 years 0.85%
Jingzhou City
Total -- 30,419,737.85 -- 85.95%
(7) Other account receivable due from related parties
Unit: RMB Yuan
Name of entity Relationship with the Company Amount Proportion of the total (%)
Total -- 0.00 0%
(8) Information of other accounts receivable that terminated recognition
Unit: RMB Yuan
Gains or loses related to the termination of
Item Amount of termination
recognition
Total 0.00 0.00
(9) If securitization is carried out on the other accounts receivable as the underlying asset, please
brief on the arrangement of relevant transactions.
Unit: RMB Yuan
Item Closing balance
Assets:
Subtotal of assets
Liabilities:
Subtotal of liabilities
8. Prepayment
(1) List by aging analysis
99
Unit: RMB Yuan
Closing balance Opening balance
Aging Proportion Proportion
Amount Amount
(%) (%)
Within 1 year 33,417,883.90 99.3% 15,310,444.39 99.64%
1-2 years 236,396.10 0.7% 55,894.00 0.36%
2-3 years
Over 3 years
Total 33,654,280.00 -- 15,366,338.39 --
Notes of aging of prepayment:
It is mainly prepayment for raw materials, and most of which aged within one year.
(2) Information of the top 5 prepayment
Unit: RMB Yuan
Relationship with the
Name of entity Amount Aging Reason for unsettled
Company
Non-related-party
Supplier A 5,716,642.70 Goods not yet received
supplier
Non-related-party
Supplier B 4,594,693.03 Goods not yet received
supplier
Non-related-party
Supplier C 4,000,000.00 Goods not yet received
supplier
Non-related-party
Supplier D 2,596,601.40 Goods not yet received
supplier
Non-related-party
Supplier E 2,344,500.00 Goods not yet received
supplier
Total -- 19,252,437.13 -- --
Notes of important companies of prepayment:
It is mainly bulk raw material suppliers
(3) Information about amount due from shareholders with more than 5% (including 5%) of
the voting shares of the Company in prepayment
□ Applicable √ Inapplicable
(4) Notes of prepayment
Note: The closing amount of prepayment increased by 119.01% over the opening amount, mainly
because prepayment to suppliers increased.
100
9. Inventory
(1) Category
Unit: RMB Yuan
Closing balance Opening balance
Item Impairment of Impairment of
Book balance Book value Book balance Book value
inventories inventories
Raw materials 68,823,442.25 720,611.78 68,102,830.47 58,098,829.52 812,007.45 57,286,822.07
Construction
53,954,338.97 700,082.08 53,254,256.89 65,365,781.98 490,729.88 64,875,052.10
contract assets
Inventory goods 162,785,231.90 5,427,619.17 157,357,612.73 182,665,777.88 12,085,746.72 170,580,031.16
Turnover material 8,521,516.52 255,469.10 8,266,047.42 5,321,056.34 109,997.78 5,211,058.56
Consumable
biological assets
Total 294,084,529.64 7,103,782.13 286,980,747.51 311,451,445.72 13,498,481.83 297,952,963.89
(2) Impairment of inventories
Unit: RMB Yuan
Withdrawal in the Decrease in the reporting period
Category Opening book value Closing book balance
reporting period Reversal Written off
Raw materials 812,007.45 388,787.62 480,183.29 720,611.78
Construction contract
490,729.88 700,082.08 490,729.88 700,082.08
assets
Inventory goods 12,085,746.72 4,316,106.54 10,974,234.09 5,427,619.17
Turnover material 109,997.78 145,471.32 255,469.10
Consumable biological
assets
Total 13,498,481.83 5,550,447.56 0.00 11,945,147.26 7,103,782.13
(3) Details of provision for falling price of inventories
Proportion of reversal of
Basis on provision for falling Reasons for reversal in
Item provision for impairment of
price of inventories reporting period
inventories to closing balance
Raw materials Book cost is higher than
101
realizable net value
Book cost is higher than
Inventory goods
realizable net value
Book cost is higher than
Construction contract assets
realizable net value
Book cost is higher than
Turnover material
realizable net value
Book cost is higher than
Consumable biological assets
realizable net value
Notes of inventory:
Inventory were all in normal condition and the falling price of inventory was due to the market
factor.
10. Other current assets
Unit: RMB Yuan
Item Closing balance Opening balance
Prepaid income tax 14,374.73 14,374.73
Total 14,374.73 14,374.73
Notes of other current assets:
11. Available-for-sale financial assets
(1) Information of available-for-sale financial assets
Unit: RMB Yuan
Item Closing fair value Opening fair value
Available-for-sale bonds
Available-for-sale equity instruments
Others
Total
In the reporting period, the Company reclassified the held-to-maturity investment into
available-for-sale financial assets, a total of RMB0.00 was reclassified, which takes 0% of total
matured investment before reclassification.
Notes of available-for-sale financial assets:
Naught
102
(2) Long-term liability investment of available-for-sale financial assets
Unit: RMB Yuan
Accrued
Initial Interest in
Opening receivables or Closing
Item Category Book value investment Expire date current
balance receipt of balance
capital period
interest
Total -- -- --
Notes:
12. Held-to-maturity investment
(1) Information
Unit: RMB Yuan
Item Closing book balance Opening book balance
Total
Notes:
Naught
(2) Information of held-to-maturity investment sold in the reporting period but was not
matured
Unit: RMB Yuan
Item Amount Proportion to the investment before sales
Total --
Notes of undue held-to-maturity investment sold in the reporting period:
Naught
13. Long-term accounts receivable
Unit: RMB Yuan
Category Closing balance Opening balance
Finance lease
Including: unrealized finance
income
103
Installment sales
Installment offering service
Others
Total
14. Investment to joint ventures and associated enterprises
Unit: RMB Yuan
Percenta Voting Total
ge of percenta operatio
Nature Total Interest
Name Registra Legal Nature Register holding ge of Total Net n
of Currenc closing of the
of tion represen of ed shares the closing closing revenue
enterpri y liabilitie reportin
investee place tative business capital of the Compan assets assets of the
ses s g period
Compan y in reportin
y investee g period
I. Joint ventures
II. Associated enterprises
Notes if significant differences exist between the important accounting policies and accounting
estimations of joint ventures, associated enterprises and the Company:
15. Long-term equity investment
104
(1) List of long-term equity investment
Unit: RMB Yuan
Explanation for
indifferences
Withdrawn
between the
Share holding Voting impairment Cash bonus in
Accounting Initial Opening Increase/decrea share holding Impairment
Investee Closing balance percentage in percentage in provision in the the reporting
method investment cost balance se percentage and provision
investee investee reporting period
voting
period
percentage in
investee
Hubei Bank Cost method 20,000,000.00 20,000,000.00 20,000,000.00 1.18% 1.18% 11,991,017.37
Hubei
Shendian
Mobile and Cost method 564,000.00 564,000.00 564,000.00 0.6% 0.6%
Electric Motor
Co., Ltd.
Guangxi
Zhongding
Cost method 580,800.00 580,800.00 580,800.00 1.41% 1.41%
Holding Co.,
Ltd
Total -- 21,144,800.00 21,144,800.00 0.00 21,144,800.00 -- -- -- 11,991,017.37 0.00 0.00
105
(2) Information of the limitation on the capability to transfer capital to investee
Unit: RMB Yuan
Accumulated investment loss amount
Item Reason for limitation
unrecognized in reporting period
Notes of long-term equity investment:
There were no long-term equity investment with trading moratorium in the Company.
16. Investment property
(1) Investment property calculated by cost
√Applicable □Inapplicable
Unit: RMB Yuan
Increase in the reporting Decrease in the
Item Opening book balance Closing book balance
period reporting period
I. Total original book
6,010,000.00 0.00 0.00 6,010,000.00
value
1. Houses & buildings 6,010,000.00 6,010,000.00
2. Land use right
II. Accumulated
depreciation and
1,374,787.50 120,200.00 0.00 1,494,987.50
accumulated
amortization
1. Houses & buildings 1,374,787.50 120,200.00 1,494,987.50
2. Land use right
III. Total net book
value of investment 4,635,212.50 -120,200.00 0.00 4,515,012.50
property
1. Houses & buildings 4,635,212.50 -120,200.00 4,515,012.50
2. Land use right
IV. Accumulated
provision for
0.00 0.00 0.00 0.00
impairment of
investment property
1. Houses & buildings
2. Land use right
106
V. Total book value of
4,635,212.50 -120,200.00 0.00 4,515,012.50
investment property
1. Houses & buildings 4,635,212.50 -120,200.00 4,515,012.50
2. Land use right
Unit: RMB Yuan
The reporting period
Depreciation and amortization of the reporting period 120,200.00
Withdrawal amount for impairment of investment property in the
0.00
reporting period
(2) Investment property calculated by fair value
□Applicable √Inapplicable
Notes of investment property that altered calculated mode and failed to accomplish certification of
property, and notes of reason that the fail accomplish and estimated accomplish date:
Notes: Depreciation amount totaling RMB120,200.00 in the reporting period. The said asset is
Hubei Building in Shenzhen with an area of 780 square meters. The relevant property certificate is a
collective warrant, part of which belongs to the Company. Currently, the Company is unable to go
through formalities for changes of the collective warrant.
17. Fixed assets
(1) Information
Unit: RMB Yuan
Opening book Decrease in the Closing book
Item Increase in the reporting period
balance reporting period balance
I. Total original book value 1,703,395,579.06 132,378,597.56 3,424,985.46 1,832,349,191.16
Including: Property and
551,242,598.01 14,850,855.41 135,502.54 565,957,950.88
buildings
Machineries 1,139,404,026.35 116,238,663.16 3,226,062.92 1,252,416,626.59
Vehicles 12,748,954.70 1,289,078.99 63,420.00 13,974,613.69
Opening book Increase in Withdrawal in Decrease in current Closing book
--
balance current period current period period balance
II. Accumulated
576,065,529.08 0.00 66,266,815.56 3,182,247.27 639,150,097.37
depreciation
Including: Property and
125,747,402.31 10,967,828.51 82,930.33 136,632,300.49
buildings
107
Machineries 442,472,323.73 54,427,936.38 3,035,896.94 493,864,363.17
Vehicles 7,845,803.04 871,050.67 63,420.00 8,653,433.71
Opening book Closing book
-- --
balance balance
III. The net book value of
1,127,330,049.98 -- 1,193,199,093.79
fixed assets
Including: Property and
425,495,195.70 -- 429,325,650.39
buildings
Machineries 696,931,702.62 -- 758,552,263.42
Vehicles 4,903,151.66 -- 5,321,179.98
--
IV. Total impairment
13,053,265.95 -- 13,053,265.95
provision
Including: Property and
1,090,718.63 -- 1,090,718.63
buildings
Machineries 11,962,547.32 -- 11,962,547.32
Vehicles --
--
V. Total book value of fixed
1,114,276,784.03 -- 1,180,145,827.84
assets
Including: Property and
424,404,477.07 -- 428,234,931.76
buildings
Machineries 684,969,155.30 -- 746,589,716.10
Vehicles 4,903,151.66 -- 5,321,179.98
--
Depreciation amount of this reporting period was of RMB66,266,815.56; RMB122,322,229.13 was
transferred into fixed assets from construction project in the reporting period.
(2) Temporary idle fixed assets
Unit: RMB Yuan
Accrued Impairment
Item Original book value Net book value Remark
depreciation provision
Property and
0.00
buildings
Machineries 0.00
108
Vehicles 0.00
(3) Fixed assets leased in from financing lease
□Applicable √Inapplicable
(4) Fixed assets leased out from operation lease
√Applicable □Inapplicable
Unit: RMB Yuan
Category Closing book value
Property and buildings 1,554,434.12
Machineries
Vehicles
(5) Information of hold-for-sale fixed assets at period-end
Unit: RMB Yuan
Estimated disposal
Item Book value Fair value Estimated disposal date
expense
(6) Information of fixed assets failed to accomplish certification of property
Item Reason for unsettlement Estimated settle date
Notes of fixed asset:
There were no particulars about holding of available-for-sale fixed assets at the period-end by the
Group.
There were no particulars about fixed assets that non-accomplishing certificate of property right in
the group.
18. Construction in progress
(1)
Unit: RMB Yuan
109
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
10,000t /a pyridine and its
105,561,360.23 105,561,360.23 97,709,207.11 97,709,207.11
derivatives
Public projects in new
33,630,062.10 33,630,062.10 19,326,061.19 19,326,061.19
area-comprehensive wharf
Second phase of Glyphosate 27,081,933.77 27,081,933.77 76,046,203.66 76,046,203.66
Acetaldehyde Project 24,050,349.57 24,050,349.57 23,717,458.48 23,717,458.48
Development of
industrialization technology
10,642,082.00 10,642,082.00 4,765,791.55 4,765,791.55
of Acephate soluble
preparations
Newly installment of the 7th
5,623,352.75 5,623,352.75 3,261,878.99 3,261,878.99
set of equipment for paraquat
Carbamic acid applicable
4,318,822.70 4,318,822.70
pesticide
Doctor Venture Building in
Chemical Industry Park of 3,086,011.25 3,086,011.25
Sanonda
Membrane treatment
engineering of sewage 2,114,220.16 2,114,220.16
management plant
Tear down and build project
1,879,716.64 1,879,716.64
of brine line in salt mine
350t/m 2,4 D acid project 1,027,035.51 1,027,035.51
Chloral reformation 2,747,835.26 2,747,835.26 1,904,064.07 1,904,064.07
Promotion of production of
1,028,753.04 1,028,753.04 287,068.51 287,068.51
methyl ester
Backflow preventer of active
418,645.28 418,645.28 389,520.73 389,520.73
municipal water supply
Reformation of
393,493.05 393,493.05 46,761.64 46,761.64
chloromethane
Removal of active 10KV
510,478.31 510,478.31
brine line
Technology reform of ionic
membrane rectification 2,808.30 2,808.30
installment
110
Tower exaction reform of
237,330.55 237,330.55
Animation water
Sewage pool and waste gas
16,082.13 16,082.13
treatment project
Technology reform of
21,084.55 21,084.55
rectification on acephate
Art research test of 95%
28,647.41 28,647.41
methyl monochloride
Reform of layered system of
8,455.23 8,455.23
methyl chloride
Project prepayment 16,980,712.56 16,980,712.56 13,639,169.69 13,639,169.69
Environmental treatment of
9,874,752.15 9,874,752.15
sewage in Sanonda
20000t\a,4-D acid project 52,896,117.74 52,896,117.74
Total 241,409,272.35 0.00 241,409,272.35 303,864,055.51 0.00 303,864,055.51
111
(2) Significant changes in construction in progress
Unit: RMB Yuan
Including:
Project input Capitalization
Name of Opening Increase in Transferred to Other Project Capitalization capitalization Source of Closing
Budget percentage of of interest rate
project balance current period fixed assets decrease process of interest of interest funding balance
budget (%)
this period
10,000t /a Borrowings
161,300,000.0 105,561,360.2
pyridine and 97,709,207.11 7,852,153.12 65.42% 65.42 17,288,620.78 2,620,191.66 6.65% and self
0 3
its derivatives finance
Public
projectss in Borrowings
new 39,400,000.00 19,326,061.19 14,304,000.91 85.36% 85.36 1,125,760.05 816,241.09 6.1% and self 33,630,062.10
area-compreh finance
ensive wharf
Borrowings
Second phase
77,500,000.00 76,046,203.66 2,312,931.29 50,002,652.61 1,274,548.57 96.48% 96.48 11,466,445.63 2,312,931.29 6.1% and self 27,081,933.77
of Glyphosate
finance
Acetaldehyde
32,700,000.00 23,717,458.48 332,891.09 73.55% 73.55 Self finance 24,050,349.57
Project
Borrowings
20000t\a,4-D
56,600,000.00 52,896,117.74 7,247,531.96 60,143,649.70 103.21% 100 2,628,999.84 1,726,727.22 6.1% and self 0.00
acid project
finance
Environmenta
Borrowings
l treatment of 11,000,000.00 9,874,752.15 2,301,174.67 12,175,926.82 107.42% 100 526,773.06 359,838.20 6.1% 0.00
and self
sewage in
112
Sanonda finance
Development
of
industrializati Borrowings
on technology 12,900,000.00 4,765,791.55 5,876,290.45 82.5% 82.50 280,757.76 280,757.76 6.1% and self 10,642,082.00
of Acephate finance
soluble
preparations
Newly
installment of Borrowings
the 7th set of 5,700,000.00 3,261,878.99 2,361,473.76 98.66% 98.66 158,252.21 137,864.91 6.1% and self 5,623,352.75
equipment for finance
paraquat
Carbamic acid Borrowings
applicable 56,509,000.00 4,318,822.70 88.79% 88.79 112,833.77 112,833.77 6.1% and self 4,318,822.70
pesticide finance
Membrane
treatment
Borrowings
engineering of
6,980,000.00 2,114,220.16 29.91% 29.91 26,452.22 26,452.22 6.1% and self 2,114,220.16
sewage
finance
management
plant
Doctor
Venture Borrowings
Building in 5,180,000.00 3,086,011.25 58.59% 58.59 51,011.25 51,011.25 6.1% and self 3,086,011.25
Chemical finance
Industry Park
113
of Sanonda
Borrowings
Chloral
3,850,000.00 1,904,064.07 843,771.19 69.29% 69.29 101,154.79 80,325.69 6.1% and self 2,747,835.26
reformation
finance
469,619,000.0 289,501,534.9 122,322,229.1 218,856,029.7
Total 52,951,272.55 1,274,548.57 -- -- 33,767,061.36 8,525,175.06 -- --
0 4 3 9
Notes of changes in construction in progress:
Note: the decrease of the Second phase of Glyphosate in the reporting period was due to the Company transferred part of equipments of the Second
phase of Glyphosate to other projects. In the reporting period, 20000t\a,4-D acid project and Environmental treatment of sewage in Sanonda were
transferred into fixed assets.
114
(3) Impairment provision of construction in progress
Unit: RMB Yuan
Increase in reporting Decrease in Reason for
Item Opening balance Closing balance
period reporting period withdrawal
Total 0.00 0.00 0.00 0.00 --
(4) Information of procedures of significant construction in progress
Item Process Remark
10,000t /a pyridine and its derivatives 62.42 In progress
Public projects in new area-comprehensive
85.36 In progress
wharf
Main body of the project was basically
Second phase of Glyphosate 96.48
finished
Acetaldehyde Project 73.55 In progress
The project has transferred into fixed
20000t\a,4-D acid project 100
assets
Environmental treatment of sewage in The project has transferred into fixed
100
Sanonda assets
Development of industrialization
technology of Acephate soluble 82.5 In progress
preparations
Newly installment of the 7th set of Main body of the project was basically
98.66
equipment for paraquat finished
Carbamic acid applicable pesticide 88.79 In progress
Membrane treatment engineering of
29.91 In progress
sewage management plant
Doctor Venture Building in Chemical
58.59 In progress
Industry Park of Sanonda
Chloral reformation 69.29 In progress
(5) Notes of construction in progress:
In the reporting period, 20000t\a,4-D acid project, Environmental treatment of sewage in Sanonda
were all transferred into fixed assets, part of Second phase of Glyphosate were transferred into fixed
assets. Main body of the Second phase of Glyphosate and newly installment of the 7th set of
equipment for paraquat were basically accomplished, while the others were in progress.
115
19. Engineering materials
Unit: RMB Yuan
Decrease in
Item Closing balance Opening balance Closing balance
reporting period
Total 0.00 0.00
Notes:
Naught
20. Clearance of fixed assets
Unit: RMB Yuan
Item Opening book value Closing book value Reason for transfer into clearance
Total --
Notes of clearance process of fixed assets with a clearance term of over 1 year since the transfer
into fixed assets: Naught
21. Productive biological assets
(1) Calculated by cost
□Applicable √Inapplicable
(2) Calculated by fair value
□Applicable √Inapplicable
22. Oil and gas assets
Unit: RMB Yuan
Increase in the reporting Decrease in the reporting
Item Opening book balance Closing book balance
period period
I. Total original book value
1. Property rights of proved
mining area
2. Property rights of
unproved mining area
3. Well and relevant
facilities
116
II. Total accumulated
depreciation
1. Property rights of proved
mining area
2. Well and relevant
facilities a
III. Total accumulated oil
and gas assets depreciation
1. Property rights of proved
mining area
2. Property rights of
unproved mining area
3. Well and relevant
facilities
IV. Total book value of oil
and gas assets
1. Property rights of proved
mining area
2. Property rights of
unproved mining area
3. Well and relevant
facilities
Notes of oil and gas assets:
Naught
23. Intangible assets
(1) Information
Unit: RMB Yuan
Increase in the reporting Decrease in the reporting
Item Opening balance Closing balance
period period
I. Total original book
215,389,507.03 180,000.00 0.00 215,569,507.03
value
Land use right 201,673,307.07 201,673,307.07
Non-patents 13,713,699.96 180,000.00 13,893,699.96
Patent 2,500.00 2,500.00
II. Total accrued
35,864,261.29 2,040,404.10 0.00 37,904,665.39
amortization
117
Land use right 30,965,894.79 1,744,737.42 32,710,632.21
Non-patents 4,895,866.50 295,666.68 5,191,533.18
Patent 2,500.00 2,500.00
III. Total net book value of
179,525,245.74 -1,860,404.10 0.00 177,664,841.64
intangible assets
Land use right 170,707,412.28 -1,744,737.42 168,962,674.86
Non-patents 8,817,833.46 -115,666.68 8,702,166.78
Patent
IV. Total impairment
32,072,093.53 0.00 0.00 32,072,093.53
provision
Land use right 32,072,093.53 32,072,093.53
Non-patents
Patent
Total book value of
147,453,152.21 -1,860,404.10 0.00 145,592,748.11
intangible assets
Land use right 138,635,318.75 -1,744,737.42 136,890,581.33
Non-patents 8,817,833.46 -115,666.68 8,702,166.78
Patent
Amortization was of RMB 2,040,404.10 in the reporting period.
(2) Company development expense
Unit: RMB Yuan
Decrease
Item Opening balance Increase Recognized into Recognized as Closing balance
current gains/losses intangible assets
Total 0.00 0.00 0.00 0.00 0.00
Development expense percentage of total expenditure of R&D projects in the reporting period.
Percentage intangible assets arising from inner R&D of the Company of closing book value of
intangible assets.
Notes of R&D projects of the Company, those that includes individual value of more than RMB 1
million and recognized with a basis of assessed value, please disclose name of evaluation authority
and method of evaluation:
Naugth
118
(3) Information of intangible assets that failed to accomplish certification of property
Naught
24. Goodwill
Unit: RMB Yuan
Impairment
Name of investee or event that Increase in the Decrease in the
Opening balance Closing balance provision at
generated goodwill reporting period reporting period
period-end
Total 0.00 0.00 0.00 0.00 0.00
Notes of test method of goodwill impairment and impairment withdrawal method:
Naught
25. Long-term amortization expense
Unit: RMB Yuan
Amortization Reason for other
Item Opening balance Increase Other decrease Closing balance
balance decrease
Total --
Notes of long-term amortization expense:
Naught
26. Deferred tax assets and liabilities
(1) Deferred tax assets and liabilities are not listed as the net value after offset
√Applicable □Inapplicable
Deferred tax assets and liabilities that already recognized
Unit: RMB Yuan
Item Closing balance Opening balance
Deferred income tax assets:
Provision for assets impairment 13,553,003.69 13,029,291.87
Formation expenses
Deductible losses
Subtotal 13,553,003.69 13,029,291.87
119
Deferred income tax liabilities:
Estimated value of trading financial instruments,
derivative financial instruments
Fair value changes on available-for-sale financial
assets that recognized into capital reserves
Subtotal
List of unrecognized deferred income tax assets
Unit: RMB Yuan
Item Closing balance Opening balance
Deductible temporary 23,758,494.62 25,083,217.24
Deductible losses
Total 23,758,494.62 25,083,217.24
Deductible losses of unrecognized deferred income tax assets will due in the following years
Unit: RMB Yuan
Year Closing balance Opening balance Remark
Total --
List of taxable differences and deductible differences items
Unit: RMB Yuan
Temporary differences amount
Item
As at period-end As at period-begin
Taxable differences items
Subtotal
Deductible differences item
Subtotal
(2) Deferred income tax assets and liabilities are listed as the net value after offset
□Applicable √Inapplicable
Notes of deferred income tax assets and liabilities:
Deferred income tax assets of the Group were mainly arising from withdrawal of assets impairment.
120
27. List of provision for assets impairment
Unit: RMB Yuan
Opening book Decrease Closing book
Item Increase
balance Reversal Written off balance
I. Provision for bad debt 39,748,588.14 7,164,574.34 46,913,162.48
II. Provision for inventory
13,498,481.83 5,550,447.56 0.00 11,945,147.26 7,103,782.13
falling price
III. Impairment provision of
available-for-sale financial
assets
IV. Impairment provision of
held-to-maturity investment
V. Impairment provision of
11,991,017.37 0.00 11,991,017.37
long-term equity investment
VI. Impairment provision of
0.00 0.00 0.00
investment property
VII. Impairment provision of
13,053,265.95 13,053,265.95
fixed assets
VIII. Impairment provision of
engineering materials
IX. Impairment provision of
0.00 0.00 0.00
construction in progress
X. Impairment provision of
productive biological assets
Including: mature
productive biological assets
XI. Impairment provision of
oil gas assets
XII. Impairment provision of
32,072,093.53 0.00 32,072,093.53
intangible assets
XIII. Impairment provision of
0.00
goodwill
XIV. Others
Total 110,363,446.82 12,715,021.90 0.00 11,945,147.26 111,133,321.46
Notes of the list of assets impairment:
The land of provision for impairment located at Jingzhou Xuetangzhou, with an area of 400, 000 m2.
It was provided by Jingzhou municipal government to offset discount amount in 2001 with an
origin value of RMB 86,672,093.53. As an industrial land of fourth grade with a term of 50 years,
the land has been idle since acquired. In 2007, the Company made provision for impairment totaled
RMB32,072,093.53 by taking measure and calculation of it. There were no sign of forward
impairment in the reporting period.
121
28. Other non-current assets
Unit: RMB Yuan
Item Closing balance Opening balance
Total
Notes of other non-current assets
Naught
29. Short-term loan
(1)Category
Unit: RMB Yuan
Category Closing balance Opening balance
Pledge loan 113,930,850.07 44,139,068.38
Mortgage loan 50,000,000.00
Guarantee loan 344,000,000.00 249,000,000.00
Credit loan
Total 507,930,850.07 293,139,068.38
Notes:
Pledge loan of the Company mainly was loan receiving from the pledge of accounts receivable.
Mortgage loan of the Company mainly was loan receiving from mortgage of house and buildings as
well as land.
Guarantee loan of the Company mainly was loan receiving from guarantees provided by Sanonda
Group Corporation, China National Agrochemical Corporation and China National Chemical
Corporation.
(2)List of unsettled mature short-term loan
Unit: RMB Yuan
Reason for
Name of creditor Amount of loan Rate of loan Usage Estimated settle date
unsettlement
Total 0.00 -- -- -- --
RMB** was paid back after the Balance Sheet Date.
Notes of short-term loan, for those gaining extended term, notes term of extension and new mature
date:
There was no particualr about unsettled mature short-term loan as at period-end.
122
30. Trading financial liabilities
Unit: RMB Yuan
Item Closing fair value Opening fair value
Public trading bonds
Financial liabilities designed to recognized with
a basis on fair value and with its changes
recognized into current gains and losses
Derivative financial liabilities
Other financial liabilities
Total
Notes:
31. Notes payable
Unit: RMB Yuan
Category Closing balance Opening balance
Trade acceptance
Bank acceptance 90,000,000.00
Total 90,000,000.00
RMB 90,000,000.00 will be due in next accounting period.
Notes of notes payable:
Newly increase of bank acceptance bill of the Group was mainly used for payment of raw materials,
with a term of 6 months.
32. Accounts payable
(1)
Unit: RMB Yuan
Item Closing balance Opening balance
Within 1 year (including 1 year) 155,247,047.18 114,524,413.20
1 to 2 years (including 2 years) 4,230,154.63 3,022,785.50
2 to 3 years (including 3 years) 424,768.54 850,303.22
Over 3 years 3,516,042.66 4,239,666.14
Total 163,418,013.01 122,637,168.06
123
(2) The accounts payable to shareholders with more than 5% (including 5%) of the voting
shares of the Company
□Applicable √Inapplicable
Notes of the accounts payable aging over one year:
Name of creditor Amount Reeason for Whether pay
unpayment back after
Balance Sheet
Date?
Linqu County Longda Non-ferrous Equipments Co., 344,282.50 Project unfinished No
Ltd.
Yuyang Lianhua Tongda Construction Engineering 294,727.05 Project unfinished No
Co., Ltd.
JIANGXI NANCHANG KE-RUI INTEGRAL 292,560.00 Project unfinished No
RECTIFIER POWER CO., LTD.
Yichang Junma Electronical Equipment Engineering 292,418.35 Project unfinished No
Company
Chongqing Bozhang Electromechanical Equipment 164,000.00 Project unfinished No
Co., Ltd
Total 1,387,987.90
33. Advance from customers
(1)
Unit: RMB Yuan
Item Closing balance Opening balance
Within 1 year (including 1 year) 37,500,875.64 52,038,017.28
1 to 2 years (including 2 years) 267,198.79 1,349,385.34
2 to 3 years (including 3 years) 69,136.11 73,127.99
Over 3 years 1,423,896.51 1,501,951.12
Total 39,261,107.05 54,962,481.73
(2) Advanced from customers from shareholders with more than 5% (including 5%) of the
voting shares of the Company
√Applicable □Inapplicable
Unit: RMB Yuan
Name of entity Closing balance Opening balance
China National Agrochemical Corporation 35,183.75 4,524,350.00
124
Total 35,183.75 4,524,350.00
Notes of significant advance from customers aging over one year:
As of 30 Jun. 2012, the Group didn’t have significant advance from customers aging over one year.
34. Payroll payable
Unit: RMB Yuan
Item Opening book balance Increase Decrease Closing book balance
I. Salary, bonus,
10,719,946.00 41,867,704.70 43,657,556.70 8,930,094.00
allowance, subsidy
II. Employee welfare 7,504,087.68 7,504,087.68
III. Social insurance 658,310.16 11,710,404.36 11,788,689.36 580,025.16
Including: Medical
1,303,935.72 1,299,147.72 4,788.00
insurance premiums
Basic pension
98,310.16 8,702,456.29 8,798,599.29 2,167.16
benefits
Unemployment
560,000.00 918,821.12 905,751.12 573,070.00
insurance
Work-related injury
633,784.57 633,784.57
insurance
Maternity insurance 151,406.66 151,406.66
IV. Housing fund 24,200.79 3,515,525.00 3,036,657.00 503,068.79
V. Redemption for
terminations of labor 1,012,707.00 1,012,707.00
contract
VI. Others 255,012.00 368,403.17 251,813.59 371,601.58
Labour union budget
and employee 255,012.00 362,885.87 246,296.29 371,601.58
education budget
Other 5,517.30 5,517.30 0.00
Total 11,657,468.95 65,978,831.91 67,251,511.33 10,384,789.53
RMB 0.00 is the amounts in arrears in the payroll payable.
The labor union budget and employee education budget is RMB362,885.87, and the non-monetary
benefits are RMB 0.00, the compensation for terminating the labor contract is RMB 0.00.
The estimated distribution date and amount as well as other arrangements for payroll payable:
Remuneration in the Group in the first generally will be distributed in the middle of the following
month.
125
35. Taxes payable
Unit: RMB Yuan
Item Closing balance Opening balance
VAT -36,772,059.71 -32,012,184.51
Consumption tax
Business tax 42,554.77 33,698.39
Corporate income tax 11,659,215.33 9,941,044.91
Personal income tax 50,101.43 317,093.57
Urban maintenance and construction tax 43,497.53 159,656.62
Resource tax 47,299.76 19,205.85
Property tax 593,612.92 443,547.70
Land use tax 753,867.93 428,867.72
Education surtax 27,838.63 77,621.08
Other -5,941.26 180,637.51
Total -23,560,012.67 -20,410,811.16
Notes of taxes payable: for the taxable income of branch companies and factories approved to be
inter-adjusted by their local tax authorities, the Company shall specified their calculation procedure.
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
126
property in lump. If there is property rental, housing property tax shall be paid at 12% of property
rental.
36. Interest payable
Unit: RMB Yuan
Item Closing balance Opening balance
Interest payable on long-term borrowings that interest
was paid by stages and principle was repay upon due
Interest of corporate bond
Interest payable on short-term borrowings
Total
Notes:
Naught
37. Dividends payable
Unit: RMB Yuan
Reason for unsettlement over 1
Name of company Closing balance Opening balance
year
State-owned Assets Supervision Individual shareholders didn’t
and Administration Commission 224,463.30 224,463.30 withdraw cash dividends on
of Qichun previous years
Individual shareholders didn’t
Jingzhou Shashi Rural Credit
125,000.00 125,000.00 withdraw cash dividends on
Union
previous years
Total 349,463.30 349,463.30 --
Notes:
Dividends payable to the above two units were due to individual shareholders didn’t withdraw cash
dividends.
38. Other accounts payable
(1)
Unit: RMB Yuan
Item Closing balance Opening balance
Within 1 year 56,964,734.23 28,317,553.89
1 to 2 years 5,261,456.99 9,163,586.98
127
2 to 3 years 192,857.30 56,151.31
Over 3 years 3,789,819.74 4,496,860.09
Total 66,208,868.26 42,034,152.27
(2) Other accounts payable from shareholders with more than 5% (including 5%) of the
voting shares of the Company
√Applicable □Inapplicable
Unit: RMB Yuan
Name of entity Closing balance Opening balance
China National Chemical Corporation 200,000.00 200,000.00
Total 200,000.00 200,000.00
(3) Notes of the other large amount accounts payable aging over 1 year
Theere were no other large accounts payable aging over 1 year at period-end of the Group.
(4) Notes of other accounts payable with significant amount
Other accounts payable as at period-end increased 57.51% than period-begin, for the reason of
unpaid closing sales expense increased than that of same period of last year.
39. Estimated liabilities
Unit: RMB Yuan
Item Opening balance Increase Decrease Closing balance
External offering
guarantee
Unsettled lawsuit
Product quality guarantee
Responsibility of
reorganization
Dismissal welfare
Loss contract to be
executed
Other
Total
Notes:
Naught
128
40. Non-current liabilities due within 1 year
(1)
Unit: RMB Yuan
Item Closing balance Opening balance
Long-term loan due within 1 year 217,560,000.00 90,000,000.00
Bonds payable due within 1 year
Long-term accounts payable due within 1 year 6,990,000.00 6,990,000.00
Total 224,550,000.00 96,990,000.00
(2)Long-term loan due within 1 year
Long-term loan due within 1 year
Unit: RMB Yuan
Item Closing balance Opening balance
Pledge loan
Mortgage loan
Guarantee loan 217,560,000.00 90,000,000.00
Credit loan
Total 217,560,000.00 90,000,000.00
RMB000 of long-term loan due within 1 year was of mature loan with extended term.
Top five long-term loans due within 1 year
Unit: RMB Yuan
Closing balance Opening balance
Foreign Foreign
Creditor Starting date Ending date Currency Rate (%)
currency RMB balance currency RMB balance
balance balance
China
Construction 3 Feb. 2008 2 Feb. 2013 CNY 6.9% 97,560,000.00
Bank
The
Export-imp
26 Jan. .2011 26 Jan. 2013 CNY 5.99% 50,000,000.00
ort Bank of
China
Industrial
21 Apr. 2008 21 Apr. 2013 CNY 6.9% 30,000,000.00
Bank
China 10 Feb. 2009 31 Dec. 2012 CNY 6.45% 20,000,000.00 20,000,000.00
129
Construction
Bank
China
Construction 3 Sep. 2008 31 Dec. 2012 CNY 6.9% 20,000,000.00 20,000,000.00
Bank
217,560,000.0
Total -- -- -- -- -- -- 40,000,000.00
0
Mature loan of long-term loan due within 1 year:
Unit: RMB Yuan
Reason for Estimated settle
Creditor Amount of loan Overdue date Annual rate (%) Usage
unsettlement date
Total 0.00 -- -- -- -- --
RMB** was paid back after Balance Sheet Date:
Notes of long-term borrowings due within 1 year:
Long-term borrowings due within 1 year was mainly of China Construction Bank totalling
RMB137.56 million, of the Export-import Bank of China totalling RMB50 million and of Industrial
Bank of RMB30 million.
(3)Bonds payable due within 1 year
Unit: RMB Yuan
Accrued Interest paid
Opening Closing
Issuance Issuing interest in in the Closing
Name Par value Term interest interest
date amount current reporting balance
payable payable
period period
Notes:
Naught
(4)Long-term accounts payable due within 1 year
Unit: RMB Yuan
Creditor Term Initial amount Rate (%) Accrued interest Closing balance Conditions
Jingzhou City
Bureau for
State-owned Acute toxic
5 years 6,990,000.00 6,990,000.00
Assets pesticide project
Supervision and
Administration
Notes of long-term accounts payable due within 1 year:
130
Long-term accounts payable was mainly loan on acute toxic pesticide project allocated by Jingzhou
City Bureau for State-owned Assets Supervision and Administration.
41. Other current liabilities
Unit: RMB Yuan
Item Closing book balance Opening book balance
Total
Notes:
Naught
42. Long-term loan
(1)Category of long-term loan
Unit: RMB Yuan
Item Closing balance Opening balance
Pledge loan
Mortgage loan
Guarantee loan 547,560,000.00 597,560,000.00
Credit loan
Less: long-term loan due within 1 year -217,560,000.00 -90,000,000.00
Total 330,000,000.00 507,560,000.00
Notes: Long-term loan were all guarantee loan received from guarantee provided by Sanonda
Group Corporation, China National Agrochemical Corporation and China National Chemical
Corporation.
(2)The top five long-term loans
Unit: RMB Yuan
Closing balance Opening balance
Foreign Foreign
Creditor Starting date Ending date Currency Rate (%)
currency RMB amount currency RMB amount
amount amount
The
Export-imp
3 Jun. 2011 6 Jul. 2013 CNY 5.85% 85,000,000.00 85,000,000.00
ort Bank of
China
131
The
Export-imp
6 May 2011 6 Jul. 2013 CNY 5.85% 65,000,000.00 65,000,000.00
ort Bank of
China
China
Construction 10 Feb. 2009 9 Feb. 2014 CNY 6.45% 40,000,000.00 40,000,000.00
Bank
China
Construction 3 Sep. 2008 28 Aug. 2013 CNY 6.9% 40,000,000.00 40,000,000.00
Bank
Industrial
10 Jun. 2010 1 Jun. 2015 CNY 6.65% 30,000,000.00 30,000,000.00
Bank
Total -- -- -- -- -- 260,000,000.00 -- 260,000,000.00
Notes of long-term loan: for the long-term loans arising from mature loans with extended term, the
Company shall explain the conditions of extension, principal, interest, expected repayment
arrangement:
Long-term loan were all guarantee loan with an amount of RMB 547.56 million, of which
RMB217.56 million long-term loan was transferred into non-current liabilities due within 1 year.
There wasn’t any overdue loan in the Company.
43. Bonds payable
Unit: RMB Yuan
Interest paid
Opening Closing Closing
Issuance Issuing in the Closing
Name Par value Term interest interest interest
date amount reporting balance
payable payable payable
period
Notes of bonds payable, including the conditions and date of conversion of the convertible
corporate bonds:
Naught
44. Long-term payable
(1) The top five long-term payable
Unit: RMB Yuan
Conditions of
Unit Term Initial amount Rate (%) Accrued interest Closing balance
loan
Loan for
490,000.00 490,000.00
glyphosate
132
project
Borrowing for
the cooperation
project with
Guangzhou
160,000.00 160,000.00
Chemical
Industry
Research
Institute
(2)List of the financing lease payable under the long-term loan
Unit: RMB Yuan
Closing balance Opening balance
Unit
Foreign currency RMB currency Foreign currency RMB currency
Total 0.00 0.00 0.00 0.00
RMB** was guarantee for the Company’s financing lease provided by the independent third party.
Notes of the long-term payable:
45. Specific payable
Unit: RMB Yuan
Item Opening balance Increase Decrease Closing balance Note
Total --
Notes of specific payable:
46. Other non-current liabilities
Unit: RMB Yuan
Item Closing book balance Opening book balance
Appropriation for CTC consuming and
2,038,293.24 816,903.20
eliminating project
Highly toxic pesticide production Line
5,048,333.33 5,436,666.66
change and replacement project
Special fund for Management of source of
1,588,888.89 1,711,111.12
pollution
133
Subsidy for sewage treatment 766,666.67 800,000.00
Pyridine project 8,850,000.00 8,850,000.00
Total 18,292,182.13 17,614,680.98
Notes of other non-current liabilities, including each government grants relevant to assets and
income received in the reporting period and their closing amounts:
Other current liabilities were mainly of government subsidies. RMB543,888.89 of government
subsidies were transferred into non-operating revenue in the reporting period.
47. Share capital
Unit: RMB Yuan
Increase/Decrease (+/-)
Opening Capitalization Closing
Issuing new
balance Bonus shares of public Other Subtotal balance
shares
reserves
Total shares 593,923,220.00 0.00 593,923,220.00
Notes of changes in share capital, for those action of increasing capital or decreasing capital in the
reporting period, the Company shall disclose the name of the accounting firm executing the capital
verification and document number of the capital verification report; for joint-stock companies
running for less than three years, only the net assets shall be specified for particulars before
establishment; while for case of totally changing the limited liability companies into joint-stock
companies, capital verification on the establishment shall be specified:
Share capital remained unchanged in the reporting period.
48. Treasury stock
Notes of treasury stock:
49. Special reserves
Notes of treasury stock:
Item Opening Increase in Decrease in Closing
balance current period current period balance
Safty in production expense 17,847,014.86 5,507,558.29 540,790.79 22,813,782.36
Total 17,847,014.86 5,507,558.29 540,790.79 22,813,782.36
50. Capital reserves
Unit: RMB Yuan
Item Opening balance Increase Decrease Closing balance
134
Capital premium (share
258,153,971.00 929,777.70 257,224,193.30
capital premium)
Other capital reserves 8,495,091.72 8,495,091.72
Total 266,649,062.72 0.00 929,777.70 265,719,285.02
Notes: Capital reserves change in the reporting period was because the Group purchased minority
shares of subsidy Sanonda (Jingzhou) Pesticide & Chemical Co., Ltd. at premium.
51. Surplus reserves
Unit: RMB Yuan
Item Opening balance Increase Decrease Closing balance
Statutory surplus reserves 76,568,728.68 76,568,728.68
Discretional surplus reserves 3,815,085.65 3,815,085.65
Reserve fund
Enterprise development funds
Other
Total 80,383,814.33 0.00 0.00 80,383,814.33
Notes of surplus reserves: for surplus reserves transferred to share capital, compensating losses and
distributed as dividends, relevant resolutions shall be explained:
52. Provision for general risk
Notes of provision for general risk:
53. Retained profits
Unit: RMB Yuan
Withdrawal or distributed
Item Amount
proportion
Opening balance of retained profits before
197,544,620.36 --
adjustments
Adjustments of opening balance of retained
--
profits (“+” means add, “-” means reduce)
Opening balance of retained profits after
221,530,998.55 --
adjustments
Add: Net profit attributable to owners of the
23,986,378.19 --
Company
135
Less: Withdrawal of statutory surplus reserves
Withdrawal of discretional surplus reserves
Withdrawal of provision for general risk
Dividend of common stock payable
Dividend of common stock converted into
share capital
Closing retained profits 221,530,998.55 --
List of adjustment of opening retained profits:
1) RMB** opening retained profits was affected by retrospective adjustment conducted according
to the Accounting Standards for Business Enterprises and relevant new regulations.
2) RMB** opening retained profits was affected by changes on accounting policies.
3) RMB** opening retained profits was affected by correction of significant accounting errors.
4) RMB** opening retained profits was affected by changes in combination scope arising from
same control.
5) RMB** opening retained profits was affected totally by other adjustments.
Notes: as for IPO companies, if the accumulated profits were enjoyed by new and original
shareholders according to the resolutions made at the shareholders’ general meeting before public
offering, the Company shall explain clearly; if the accumulated profits were distributed before
public offering and enjoyed by the original shareholders according to the resolutions made at the
shareholders’ general meeting, the Company shall clearly disclose the audited profits of dividends
payable enjoyed by the original shareholders.
54. Revenue and Cost of Sales
(1) Revenue, Cost of Sales
Unit: RMB Yuan
Item Reporting period Same period of last year
Sales of main business 1,083,164,933.46 956,950,546.71
Other operating income 33,590,343.61 39,373,495.65
Cost of sales 956,561,172.05 830,789,907.99
(2) Main business (Classified by industry)
√Applicable □Inapplicable
Unit: RMB Yuan
Reporting period Same period of last year
Industry
Revenue of sales Costs of sales Revenue of sales Costs of sales
136
Manufacturing of chemical
raw material 1,083,164,933.46 928,161,925.69 956,950,546.71 796,327,245.99
and chemicals
Total 1,083,164,933.46 928,161,925.69 956,950,546.71 796,327,245.99
(3) Main business (Classified by product)
√Applicable □Inapplicable
Unit: RMB Yuan
Reporting period Same period of last year
Product
Revenue of sales Costs of sales Revenue of sales Costs of sales
New chemical materials
8,290,427.16 4,256,668.64 8,056,121.52 4,681,492.73
and special chemicals
Petrochemicals and refining
57,932,775.77 48,252,498.08 58,540,423.65 49,218,620.51
and chemical products
Basic (chlor-alkali) chemicals 1,337,550.74 1,550,724.89 3,241,253.35 3,191,359.27
Agrochemicals such as
chemical fertilizer and 1,138,185,415.54 996,683,269.83 1,070,774,738.83 922,897,764.12
pesticide
Internal offset amount -122,581,235.75 -122,581,235.75 -183,661,990.64 -183,661,990.64
Total 1,083,164,933.46 928,161,925.69 956,950,546.71 796,327,245.99
(4) Main business (Classified by area)
√Applicable □Inapplicable
Unit: RMB Yuan
Reporting period Same period of last year
Area
Revenue of sales Costs of sales Revenue of sales Costs of sales
Abroad 634,193,164.65 535,297,331.31 619,500,775.09 506,223,105.40
Home 571,553,004.56 515,445,830.13 521,111,762.26 473,766,131.23
Internal offset amount -122,581,235.75 -122,581,235.75 -183,661,990.64 -183,661,990.64
Total 1,083,164,933.46 928,161,925.69 956,950,546.71 796,327,245.99
(5) The revenue of sales from the top five customers
Unit: RMB Yuan
Customer Main business revenue Proportion of total business revenue (%)
Customer A of foreign accounts 48,285,803.34 4.32%
137
receivable
Customer C of foreign accounts
45,528,937.85 4.08%
receivable
Jiangsu Nantong WELIKE
39,282,300.88 3.52%
Chemical Co., Ltd.
Zhejiang Sanyang Agricultural
33,879,599.12 3.03%
Materials Co., Ltd.
Customer B of foreign accounts
29,208,688.27 2.62%
receivable
Total 196,185,329.46 17.57%
Notes:
Of the top five customers on sales, there are three foreign customers, two domestic customers. Their
main business is sales of pesticide and they took 17.57% of total operating revenue of the Company.
55. Revenue from the construction contracts
□Applicable √Inapplicable
Notes on construction contracts
56. Business tax and surcharges
Unit: RMB Yuan
Item Reporting period Same period of last year Calculation and payment standard
Consumption tax
Business tax shall be paid at 5% of
Business tax 150,107.51 274,524.78
turnover
Urban maintenance and construction City maintenance construction tax shall
tax 196,195.08 129,284.80 be paid at 7% or 5% of circulating tax
payable of the current period.
Education surtax Extra charges for education shall be
106,928.11 198,724.97 paid at 3% of circulating tax payable of
the current period
Resources tax
Extra charges for local education shall
Local education surtax 33,095.60 40,360.07 be paid at 2% of circulating tax payable
of the current period
Total 486,326.30 642,894.62 --
Notes:
138
Business tax reduced 24.35% compared with same period of last year, mainly because circulating
tax in the reporting period was increased than same period of last year.
57. Gains and losses from changes in fair value
Unit: RMB Yuan
Source Reporting period Same period of last year
Trading financial assets
Including: gains from the changes in fair value of
derivative financial instruments
Trading financial liabilities
Investment property calculated in fair value
Other
Total
Notes:
Naught
58. Investment income
(1)List of investment income
Unit: RMB Yuan
Item Reporting period Same period of last year
Long-term equity investment income accounted by
cost method
Long-term equity investment income accounted by
equity method
Investment income arising from disposal of
long-term equity investments
Investment income received from holding of trading
financial assets
Investment income received from holding of
held-to-maturity investments
Investment income received from holding of
available-for-sale financial assets
Investment income received from disposal of
trading financial assets
Investment income received from holding of
held-to-maturity investments
Investment income received from available-for-sale
139
financial assets
Other
Total
(2) Long-term equity investment income accounted by cost method
Unit: RMB Yuan
Same period of last
Name of investee Reporting period Reason for increase/decrease
year
Total --
(3) Long-term equity investment income accounted by equity method
Unit: RMB Yuan
Same period of last
Name of investee Reporting period Reason for increase/decrease
year
Total --
Notes of investment income: make notes if there is significant limitation for recovery of investment
income. If there isn’t the said limitation, notes too.
59. Impairment losses
Unit: RMB Yuan
Item Reporting period Same period of last year
I. Bad debts losses 7,164,574.34 6,416,951.94
II. Inventory falling price losses 5,550,447.56 1,948,939.51
III. Impairment losses of available-for-sale financial
assets
IV. Impairment losses of held-to-maturity of investment
V. Impairment losses of long-term equity investment
VI. Impairment losses of investment property
VII. Impairment losses of fixed assets
VIII. Impairment losses of engineering materials
IX. Impairment loss of construction in progress
X. Impairment losses of productive biological assets
140
XI. Impairment losses of oil and gas assets
XII. Impairment losses of intangible assets
XIII. Impairment losses of goodwill
XIV. Other
Total 12,715,021.90 8,365,891.45
60. Non-operating gains
(1)
Unit: RMB Yuan
Item Reporting period Same period of last year
Total gains from disposal of non-current assets 10,418.16 985,296.38
Including：Gains from disposal of fixed assets 10,418.16 985,296.38
Gains from disposal of intangible assets
Gains from debt reconstruction
Gains from non-monetary assets exchange
Acceptance of donations
Government grants 543,888.89 510,555.56
Penalty income 75,630.00 24,160.00
Other 221,544.01 15,491.43
Total 851,481.06 1,535,503.37
(2)List of government grants
Unit: RMB Yuan
Item Reporting period Same period of last year Note
Grants for the project of ECQF [2006] No. 170 government
replacing acute toxic pesticide 388,333.34 388,333.34 grants for replacement of acute
in farming toxic pesticide in farming
Special funds for sewage source
122,222.22 122,222.22 JHBKW [2009]No. 15
treatment
Subsidy for ewage treatment 33,333.33
Total 543,888.89 510,555.56 --
Notes:
Non-operating gains was reduced 44.55% compared with same period of last year, mainly because
revenue from disposal of fixed assets in last year was relatively bigger.
141
61. Non-operating expenses
Unit: RMB Yuan
Item Reporting period Same period of last year
Loss on disposal of non-current assets 327,787.29
Including: Loss on disposal of fixed assets 327,787.29
Loss on disposal of intangible assets
Loss on debt reconstruction
Loss on exchange of non-monetary assets
External donation
Penalty, overdue fine 130,000.00 2,200.00
Other 390,958.16 466,911.17
Total 848,745.45 469,111.17
Notes:
Non-operating expenses of the reporting period was 80.93% increase than same period of last year,
mainly because there was a relatively big loss of disposal of fixed assets occurred in the reporting
period.
62. Income tax expense
Unit: RMB Yuan
Item Reporting period Same period of last year
Current income tax expense accounted by tax and relevant
12,195,363.18 14,170,764.64
regulations
Adjustment of income tax -523,711.82 -2,028,333.65
Total 11,671,651.36 12,142,430.99
63. Calculation procedure of basic earnings per share and diluted earnings per share
EPS-basic refers to the current net profit attributable to common shareholders of the Company
divided the weighted average amount of outstanding issued common shares. The amount of newly
issued common shares is calculated from the date of consideration receivable in accordance with the
detailed terms of the contract for issuing shares.
The numerator of EPS-diluted is the current net profit attributable to common shareholders of the
Company, which is fixed by adjusting the following factors: (1) the interest of diluted potential
common shares which is recognized as the expenses of current period; (2) the gains and costs
incurred from transferring the diluted potential common shares; and (3) the influence on income tax
from the above adjustment.
142
The denominator is the sum of the two items as follows: (1) the weighted average amount of
common shares issued by the Parent Company in EPS-basic; (2) the increased weighted average
amount of common shares assuming that diluted potential common shares were transferred to
common shares.
While calculating the increased weighted average amount of common shares resulting from that
diluted potential common shares were transferred to issued common shares, the diluted potential
common shares issued in previous period are assumed to be transferred at current period; the diluted
potential common shares issued in current period are assumed to be transferred on the issuing date.
(1) Breakdown of basic earnings per share (EPS-basic) and diluted earnings per share (EPS-diluted)
in current and previous periods.
Amount in 2012 Amount in 2011
Profit as of reporting period
EPS-basic EPS-diluted EPS-basic EPS-diluted
Net profits attributable to common 0.0404 0.0404 0.0511 0.0511
shareholders of the Company
0.0404 0.0404 0.0497 0.0497
Net profits attributable to common
shareholders of the Company after
deducting non-recurring gains and
losses
(2) Explanation on counting process of EPS-basic and EPS-diluted
During the reporting period, there were no diluted potential common shares in the Company so that
EPS-diluted equaled to EPS-basic.
①When calculated the EPS-basic, the net profits attributable to common shareholders were as
follows:
Item Amount in 2012 Amount in 2011
Net profit attributable to common shareholders of the Company 23,986,378.19 30,353,680.99
Of which：Net profit attributable to continual operating 23,986,378.19 30,353,680.99
Net profit attributable to discontinued operating
Net profit attributable to common shareholders of the Company
23,972,136.64 29,532,789.39
after deducting non-recurring gains and losses
Of which：Net profit attributable to continual operating 23,972,136.64 29,532,789.39
②When calculated the EPS-basic, the denominator refers to the weighted average amount of
outstanding issued common shares, and the accounting process as follows:
Item Amount in 2012 Amount in 2011
Amount of outstanding issued common shares at
593,923,220.00 593,923,220.00
period-begin
Add：weighted average amount of common shares issued
143
at current period
Deduct ： weighted average amount of common shares
repurchased at current period
Weighted average amount of outstanding issued common
593,923,220.00 593,923,220.00
shares at period-end
64. Other comprehensive income
Unit: RMB Yuan
Item Reporting period Same period of last year
1. Profits/(losses) from available-for-sale financial assets
Less: Effects on income tax generating from available-for-sale
financial assets
Net amount transferred into profit and loss in the current period
that recognized into other comprehensive income in prior
period
Subtotal
2. Interests in the investee entities’ other comprehensive
income as per equity method
Less: Effects on income tax generating from the interests in the
investee entities’ other comprehensive income as per equity
method
Net amount transferred into profit and loss in the current period
that recognized into other comprehensive income in prior
period
Subtotal
3. Profits/(losses) from cash flow hedging instrument
Less: Effects on income tax generating from cash flow hedging
instrument
Net amount transferred into profit and loss in the current period
that recognized into other comprehensive income in prior
period
The adjustment value that is the converted initial recognition
amount of arbitrage project
Subtotal
4. Converted amount of foreign currency financial statements
Less: Net value of disposal of oversea operations that
recognized into current profit and loss
Subtotal
144
5. Other
Less: Effects on income tax generating from the others that
included into other comprehensive income
Net amount transferred into profit and loss in the current period
that recognized into other comprehensive income in prior
period
Subtotal
Total
Notes:
Naught
65. Notes of Cash Flow Statement
(1) Other cash received relevant to operating activities
Unit: RMB Yuan
Item Amount
Government grants 1,221,390.04
Interest income 2,039,871.63
Allowance for payment and others, etc. 8,699,105.79
Total 11,960,367.46
Notes:
Other cash received relevant to operating activities mainly were government grants, interest income
and allowance for payment etc..
(2) Other cash paid relevant to operating activities
Unit: RMB Yuan
Item Amount
Transportation fees 13,128,510.26
Reception fees 1,572,292.00
Property insurance fees 1,562,998.56
Water and electricity charges 1,403,920.15
Packing fees 1,338,666.46
Business expenses 1,187,209.41
Office expenses 1,146,339.27
Environmental protection expenses 1,070,750.00
Other 3,093,231.63
145
Total 25,503,917.74
Notes:
Other cash paid relevant to operating activities in the reporting period was expenditure for each fee.
(3) Other cash received relevant to investment activities
Unit: RMB Yuan
Item Amount
Total
Notes:
Naught
(4) Other cash paid relevant to investment activities
Unit: RMB Yuan
Item Amount
Total
Notes of other cash paid relevant to investment activities:
Naught
(5) Other cash received relevant to financing activities
Unit: RMB Yuan
Item Amount
Total
Other financial activities-related cash received
None
(6) Other financial activities-related cash paid
Unit: Yuan
Item Amount
Margin for notes payable 18,000,000.00
Purchase minority interests, purchase subsidiary under the same
1,000,000.00
control and pay consideration
fees for foreign exchange pledged without recourse 98,876.69
Total 19,098,876.69
Other financial activities-related cash paid
146
Other financial activities-related cash paid is mainly the margin for notes payable 18,000,000 Yuan.
66. Supplementary information to cash flow statement
(1). Supplementary information to cash flow statement
Unit: Yuan
Item Amount of this period Amount of last period
1. Reconciliation of net profit to net cash flows
-- --
generated from operating activities
Net profit 24,465,869.54 30,740,491.14
Add: Provision for impairment of assets 12,715,021.90 8,365,891.45
Depreciation of fixed assets, of oil-gas assets, of
66,387,015.57 47,261,170.48
productive biological assets
Amortization of intangible assets 2,040,404.10 2,019,782.66
Amortization of long-term deferred expense
Losses on disposal of property, plant and
equipment, intangible assets and other 317,369.63 -985,296.38
long-term assets (gains: negative)
Loss on retirement of fixed assets (gains: negative)
Financial cost (gains: negative)
Investment loss (gains: negative) 34,133,741.20 38,136,346.73
Decrease in deferred income tax assets (gains:
negative)
Increase in deferred income tax liabilities (decrease:
-523,711.82 -2,028,333.65
negative)
Decrease in inventory (gains: negative)
Decrease in accounts receivable from operating
17,366,916.08 -14,913,600.88
activities (gains: negative)
Increase in payables from operating activities
-154,943,182.38 -133,128,377.06
(decrease: negative)
Other 130,268,085.35 36,797,145.11
Net cash flows generated from operating activities
II. Investing and financing activities that do not
involving 132,227,529.17 12,265,219.60
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 -- --
Less: Opening balance of cash 391,575,662.00 335,361,114.86
Closing balance of cash equivalents 219,587,687.99 207,943,720.75
More: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
147
Net increase in cash and cash equivalents 171,987,974.01 127,417,394.11
(2) Relevant information gained during the report or through disposal of the subsidiary and other business
company
Unit: Yuan
Item Amount of this period Amount of last period
1. Relevant information gained during the report or
through disposal of the subsidiary and other -- --
business company
I. Price gained from subsidiary and other business
company
II. Cash or cash equivalents gained from subsidiary
and other business company
Less: cash and cash equivalents possessed by
subsidiary and other business company
III. Net cash gained from subsidiary and other
business company
IV. Net assets gained from subsidiary
current assets
non-current assets
current liabilities
non-current liabilities
2. Disposal of relevant information in subsidiary
-- --
and other business company
I. Disposal of price in subsidiary and other
business company
II. Disposal of cash and cash equivalents in
subsidiary and other business company
Less: cash and cash equivalents in possessed by
subsidiary and other business company
III. Disposal of cash net amount of subsidiary and
other business company
IV. Disposal of net assets of subsidiary
Current assets
Non-current assets
Current liabilities
Non-current liabilities
(3) Cash and cash equivalents
Unit: Yuan
Item Closing amount Opening amount
I. Cash 391,575,662.00 219,587,687.99
Including: Cash on hand 10,529.43 1,850.30
148
Bank deposit on demand 391,565,132.57 335,359,264.56
Other monetary funds on demand
Central bank deposit on demand
Deposits in other banks
Call loans from other banks
II. Cash equivalent
Including: Bond investment due in three months
III. Closing balance of cash and cash equivalents 391,575,662.00 219,587,687.99
Supplementary documents for cash flow statement
67. Notes on projects on statement of change in equity
Information on “other” item names when regulating the year end balance of last year and amount adjustment, and
retroactive adjustment incorporated and produced by the enterprise under the same control:
（8）. Accounting treatment of asset securitization business
1. Information on main transaction arrangement of asset securitization and clauses of accounting treatment
and bankruptcy remoteness
2. The Company does not have the control power, but of which in principle the company bears the risk with
special purpose.
Unit: Yuan
Business
Final total Final total Net income for
Name Final net assets income for Notes
assets liability current period
current period
（9）. Related party and related Transaction
1. Information related to parent company of the Company
Unit: Yuan
Proporti
Proporti on of
on of voting
share rights
The
held by owned
Name of Name of ultimate
Registra Legal parent by Organiz
parent Relation Busines parent Currenc controll
Type tion of represen compan parent ation
compan ship s scope compan y er of the
place tative y compan code
y y Compan
against y
y
the against
Compan the
y (%) Compan
y (%)
Sanonda Parent State-o 93 Li Producti 2,406,61 CNY 20.15% 20.15% China 178987
149
Group compan wned Beijing Zuorong on and 0,000,00 National 789
Corpora y compan East operatio 0.00 Chemic
tion y Road, n of al
Jingzho pesticid Corpora
u, Hubei e and tion
Provinc chemica
e ls
products
Information on the parent company:
The parent company directly held 20.02% of the Company’s shares, and indirectly held 0.13% of the Company’s
shares by its subsidiary company Sanonda Advertising Co., Ltd., and the total shares of the Company held by the
parent company were 20.15%
China National Chemical Corporation is the parent company of Sanonda Group Corporation, the ultimate
controller of the Company is China National Chemical Corporation.
2. Information on subsidiaries of the Company
Unit: Yuan
Proportio Proportio
Registrat Legal n of n of
Business Business Registere Organiza
Name Type ion of represent Currency holding voting
Type scope d capital tion code
place ative shares rights
(%) (%)
Sanonda
(Jingzho
u) wholly-o Limited
1818600
Pesticide wned Liability Tian Manufact
Jingzhou 3,000.00 CNY 90% 90% 33
s and subsidiar Compan Xueqing uring
Chemical y y
s Co.,
Ltd.
Hubei
wholly-o Limited
Sanonda Zhang
wned Liability 7069631
Foreign Jingzhou Shaochu Trading 1,000.00 CNY 90% 90%
subsidiar Compan 67
Trading n
y y
Co., Ltd.
Hubei
Sanonda wholly-o Limited
1818517
Tianmen wned Liability Xie Manufact
Tianmen 3,000.00 CNY 98.5% 98.5% 78
Agroche subsidiar Compan Chengli uring
mical y y
Co., Ltd.
Jingzhou wholly-o Limited
7570193
Longhua wned Liability Jingzhou Liu Manufact
500.00 CNY 65% 65% 60
Petroche subsidiar Compan Anping uring
mical y y
150
Co., Ltd.
Jingzhou
wholly-o Limited
Hongxia 1789877
wned Liability Yin Manufact
ng Jingzhou 4,000.00 CNY 98.5% 98.5% 89
subsidiar Compan Hong uring
Chemical
y y
Co., Ltd.
CNY
151
3. Information on co-operated or joint operated of the Company
Unit: Yuan
Proportio Business Net
Proportio
Legal n of income income
Business Registrati Business Registere n of Final total Final total Final net Relations Organizat
Item represent Currency holding for for
Type of place scope d capital voting assets liability assets hip ion code
ative shares current current
rights (%)
(%) period period
1.
co-operat -- -- -- -- -- -- -- -- -- -- -- -- -- -- --
ed
2. joint
-- -- -- -- -- -- -- -- -- -- -- -- -- -- --
operated
152
4. Information on other related parties
Name of other related parties Relationship with the Company Organization code
China National Chemical
Same final controller 10112351X
Finance Co., Ltd.
Jingzhou Sanonda Advertising
Same parent company 706967790
Co., Ltd.
Hubei Jingzhou Huaxiang Affiliated enterprise of parent
73713373X
Chemical Co., Ltd. company
Guangxi Hechi Chemicals Co.,
Same final controller 200887558
Ltd.
Jiangsu Anpon Electrochemical
Same final controller 139433337
Co., Ltd.
Bluestar (Beijing) Chemical
Same final controller 795955432
Machinery Co., Ltd.
Bluestar Environmental
Same final controller 71092737X
Engineering Co., Ltd.
Information on other related parties
5. Transaction of related parties
(1) Transaction of related parties
Unit: Yuan
Amount of this period Amount of last period
Proporti Proporti
Pricing on in on in
Name of Content of related
principle of transacti transacti
company transaction Amount Amount
related parties ons of ons of
the same the same
kind kind
Sanonda Group Purchase of raw
Market price 1,426,054.20 0.15% 2,711,664.71 0.5%
Corporation materials
Jingzhou Sanonda
Purchase of
Advertising Co., Market price 2,481,724.84 0.26% 2,615,065.38 4.73%
wrappages
Ltd.
Bluestar
Environmental Purchase of raw
Market price 13,500.00
Engineering Co., materials
Ltd.
China National Purchase of raw
Agrochemical Market price 8,227,400.00 0.86% 38,437,051.28 7.09%
Corporation materials
Unit: Yuan
153
Amount of this period Amount of last period
Proporti Proporti
Pricing on in on in
Name of Content of related
principle of transacti transacti
company transaction Amount Amount
related parties ons of ons of
the same the same
kind kind
Sanonda Group Sales of raw
Market price 2,569,788.52 0.23%
Corporation materials
China National
Agrochemical Sales of pesticides Market price 3,972,713.50 0.35%
Corporation
Jiangsu Anpon
Electrochemical Sales of pesticides Market price 3,360,000.00 0.3% 2,907,964.60 0.3%
Co., Ltd.
Jingzhou
Hengxiang Sale of chemical
Market price 9,864,000.00 0.88% 7,644,217.44 0.78%
Material Trade products
Co., Ltd.
(2) Related deposit/contract
Deposit/contract table of company
Unit: Yuan
Impa
cts on
deposit
comp
/contra
Pricing any
Involved ct
Start date End date eviden by
Name of Name of amount Consigne profits
Consigne of of ce for consi
consigno Consigne for d/contract confir
d/contract consignm consignm deposit gnme
r/contract e/contract Consigne ed med
ed assets ent/contra ent/contra /contra nt
ee or d/contract category during
ct ct ct and
ed assets the
profits contr
report
act
period
profit
s
Consignment/contract table of company
Information on Related deposit/contract
Unit: Yuan
Name of Name of Consignin Involved Consigne Start date End date Pricing deposit Impa
consigno Consigne g/contract amount d/contract of of eviden /contra cts on
r/contract e/contract ed assets for ed consignm consignm ce for ct comp
154
ee or Consigne category ent/contra ent/contra deposit profits any
d/contract ct ct /contra confir by
ed assets ct med consi
income during gnme
the nt
report and
period contr
act
inco
me
(3) Related leased items
Leased items of the company
Unit: Yuan
The lease Impacts
Leased Start End Pricing
Name Name Category Information income on
assets date date evidence
of of of leased on leased confirmed company
involving of of of lease
lessor lessee assets assets in the report by lease
amount lease lease income
period income
Leased items of the company
Unit: Yuan
The lease Impacts
Leased Start End Pricing
Name Name Category Information rent on
assets date date evidence
of of of leased on leased confirmed company
involving of of of lease
lessor lessee assets assets in the report by lease
amount lease lease rent
period income
Related leased items
（4）Related-party guarantee
Unit: Yuan
Execution
Secured Guarantee
Guarantor Start date End date accomplished or
party amount
not
Sanonda Group The August 7, August 07,
50,000,000.00 No
Corporation Company 2011 2014
Sanonda Group The January 09, November
50,000,000.00 No
Corporation Company 2012 09, 2014
Sanonda Group The May 27, May 31,
80,000,000.00 No
Corporation Company 2010 2017
Sanonda Group The 100,000,000.00 April 10, April 21, No
155
Corporation Company 2008 2015
Sanonda Group The October 11, January 27,
60,000,000.00 No
Corporation Company 2010 2016
Sanonda Group The March 14, March 14,
100,000,000.00 No
Corporation Company 2012 2015
Sanonda Group The August 10, August 10,
300,000,000.00 No
Corporation Company 2011 2014
Sanonda Group The January 23, July 06,
200,000,000.00 No
Corporation Company 2011 2015
Sanonda Group The July 28, August 28,
100,000,000.00 No
Corporation Company 2008 2015
ChemChina The July 28, 2 February
100,000,000.00 No
Corporation Company 2008 09, 2016
ChemChina The January 10, February 02,
97,560,000.00 No
Corporation Company 2008 2015
ChemChina The December December
68,000,000.00 No
Corporation Company 22, 2011 23, 2012
ChemChina The December June 23, No
120,000,000.00
Corporation Company 13, 2011 2013
China National No
The December December
Agrochemical 30,000,000.00
Company 24, 2009 23, 2014
Corporation
China National No
The December December
Agrochemical 34,000,000.00
Company 10, 2010 10, 2013
Corporation
China National No
The March 09, March 08,
Agrochemical 30,000,000.00
Company 2011 2014
Corporation
China National
The January 13, January 13,
Agrochemical 100,000,000.00 No
Company 2008 2013
Corporation
Information on related-party guarantee
Guarantee for loans is mainly provided by Sanonda Group Corporation, China National
Agrochemical Corporation and China National Chemical Corporation.
(5) Inter-bank lending capital by related party
Unites: Yuan
Inter-bank lending
Related party Start date End date Notes
amount
inter-bank borrowing transaction
inter-bank lending transaction
156
(6) Asset assignment and debt restructuring of related party
Unit: Yuan
Amount for current period Amount for last period
Occupancy Occupancy
Pricing type
Transacti of of
Transaction and decision
on type proportion proportion
Related party content by procedure for
by related Amount amount of Amount amount of
related party related party
party similar similar
transaction
transaction transaction
(%) (%)
(7). Other related transactions
6. Accounts receivable and payable of related parties
Accounts receivable and prepaid of related parties
Unit: Yuan
Item Name Closing amount Opening amount
Accounts payable and received in advance of related parties
Unit: Yuan
Item Name Closing amount Opening amount
Bluestar (Beijing)
Accounts payable Chemical Machinery Co., 4,561,192.00 6,011,192.00
Ltd.
Bluestar Environmental
Accounts payable 50,000.00
Engineering Co., Ltd.
China National
Accounts received in advance Agrochemical 35,183.75 4,524,350.00
Corporation
Hubei Jingzhou Huaxiang
Accounts received in advance 1,611,560.73 3,701,172.65
Chemical Co., Ltd.
China National
others Agrochemical 200,000.00 200,000.00
Corporation
Hubei Jingzhou Huaxiang
others 10,060,752.90
Chemical Co., Ltd.
（10）. Share-based payments
1. General circumstances for share-based payment
Total amount for all equity instruments
awarded in this period by the company
157
Total amount for all equity instruments
executed in this period by the company
Total amount for all equity instruments
expired in this period by the company
Scope of executive price and remaining
period of contract for exterior share
option issued by the company at end of
term
Scope of executive price and remaining
period of contract for other equity
instruments issued by the company at
end of term
Information on share-based payment
2. Information on equity-settled share-based payment
Unit: Yuan
Determining method of fair value of equity instrument
on date of grant
Determining method of best estimation for the quantity
of executive equity instruments
Causes for large differences of estimation between the
current period and last period
Accumulated amount by equity-settled share-based
payment among the capital reserve
Total expenses determined through equity-settled
share-based payment
Information on equity-settled share-based payment
3. Information on cash-settled share-based payment
Unit: Yuan
Determining method for fair value of liabilities
determined by company-bore, share or other equity
instrument-based calculation.
Accumulative liability amount produced by cash-settled
share-based payment among liabilities
Total expenses determined through cash-settled
share-based payment
Information on cash-settled share-based payment
4. Service based on share-based payment
Unit: Yuan
Total amount for staff service exchanged based on
share-based payment
158
Total amount for other service exchanged based on
share-based payment
5. Amendment and termination of share-based payment
（11）. Contingencies
1. Contingent liability and financial impacts caused by pending action or arbitration
2. Contingent liability and financial impacts caused by provision of guarantee for other
company
Total
Secured guarantee Overdue Guarantee Guarantee Current status of
Guarantor
entities amount amount way type secured entities
(RMB ’0000)
I. Guarantee for subsidiaries
Hubei 26,200.00 Joint Guarantee Business-as-usual
Sanonda liability for trade
The
Foreign guarantee financing
Company
Trading loan
Co., Ltd.
II. Guarantee for other entities
Guangxi 10,000.00 Joint Guarantee Business-as-usual
The Hechi liability for
Company Chemicals guarantee project
Co., Ltd borrowing
Note: The guarantee provided for Hubei Sanonda Foreign Trading Co., Ltd. (the holding
subsidiary of the Company) is the maximum security of guaranty that the Company provides for
its trade financing behaviors such as opening letter of credit and bill of exchange.
Other contingencies
The Company has no other contingencies that need to be disclosed.
（12）. Commitment events
1. Significant commitment events
As to 30 Jun. 2012, there are no significant commitment events of the group.
2. Performance of commitment in earlier stage
（13）. Events after balance-sheet-date
1. Important events after the balance sheet date
Unit: Yuan
Item Content Influence number of Reasons not being able to
159
financial status and estimate the influence
business achievements number
2. Information on future distribution of profits of balance sheet
Unit: Yuan
Profits and dividends about to be distributed
Profits and dividends released upon approval and
consideration
3. Information on future items of other balance sheet
Our group shall not disclose the future items unless on the day of approving the releasing of
financial report.
(14) Other important items
1. Exchange of non-monetary assets
2. Debt restructuring
3. Enterprise incorporation
The 12th meeting of 6th board of directors of the company has determined on May 2, 2012
that our company will release shares to the actual controller - China National Chemical
Corporation to purchase the 80.93% of the stock equity of Jiangsu Anpon Electrochemical Co.,
Ltd. And 70% of Jiangsu Huaihe Chemical Co., Ltd. held by the company, which is now still in
procedure.
4. Lease
5. Convertible Financial instruments into shares at end of term released externally
6. Major content and significant changes on annuity schedule
7. Other important items needed to be disclosed
(15) Explanation on major projects of financial statement in parent company
1. Accounts receivable
(1) Accounts receivable
Unit: Yuan
Closing balance Opening balance
Book balance Bad debt Book balance Bad debt
Category
Proporti Proporti Proporti Proporti
Amount Amount Amount Amount
on (%) on (%) on (%) on (%)
Debts
receivable
for
significant
amount 0.00 0.00 0.00 0.00
and
accountin
g and
drawing
160
for
provision
of bad
debt of
single
item
Debts receivable accounting and drawing for provision of bad debt in the combination
Combinati
on for 159,252,762 99,378,594.
60.09% 86.44%
related .27 16
party
Combinati
on by
105,749,019 11,920,064 14,983,634. 7,246,014.
account 39.91% 11.27% 13.03% 48.36%
.67 .74 74 76
receivable
age
Sub-total
for 265,001,781 11,920,064 114,362,228 7,246,014.
100% 4.51% 99.47% 6.34%
combinati .94 .74 .90 76
on
Debts
receivable
for
insignifica
nt amount
and
accountin
607,251.0
g and 0.00 0.00 607,251.05 0.53% 100%
5
drawing
for
provision
of bad
debt of
single
item
265,001,781 11,920,064 114,969,479 7,853,265.
In total -- -- -- --
.94 .74 .95 81
Information on categories of receivables
1. The company regulated that the accounts payment receivable over 5 million RMB or
above will be considered as significant payment receivable for single amount.
2. There are 3 categories for payment receivable categorized in the combination.
(1) Combination for related party: the combination is divided by the debtor and the
related relationship with the company (it generally refers to the actual controller of the company
and other enterprises controlled by the company).
(2) Risk-free combination: the combination is divided by the reputation of the debtor,
payment nature, transaction safeguard measure (it generally refers to purchasing fund, fund in
reserve for the employee, deposit of contract and receivables for setting up warranty clauses).
(3). Combination of account receivable age: the combination is divided by the account
receivable age of the receivables.
In the combination, the accounting and drawing standard for the combination of provisions
for bad debt by utilizing analysis of account receivable age.
161
Account receivable age accounting and drawing accounting and drawing
proportion (%) for receivables proportion (%) for other
receivables
Within 1 year (including 1 year, hereinafter inclusive) 5 5
1-2 years 10 10
2-3 years 30 30
3-4 years 50 50
4-5 years 50 50
Over 5 years 100 100
3. The group shall undertake impairment test separately to receivables with insignificant
amount but owning the following features. Provided that it’s been evident that such receivables
are impaired, the impairment loss and accounting and drawing provisions for bad debt shall be
determined in accordance with balance which the current value of future cash flow is below the
book value (for example: the controversial receivables with the other party or receivables related
to lawsuits and arbitration; the receivables which it has been obviously evident that the debtor is
unable to pay back).
Receivables with significant amount of single item and accounting and drawing provisions for bad
debt for single item at end of term
□ Applicable √ Inapplicable
In the combination, the receivables using account receivable aging analysis for accounting and
drawing provisions for bad debt:
√ Applicable □ Inapplicable
Closing balance Opening balance
Account Book balance Book balance
receivable Propor Propor
Bad debt Bad debt
age Amount tion Amount tion
(%) (%)
Within 1 year
Including: -- -- -- -- -- --
Sub-total
93.03 52.33
within 1 98,373,160.81 4,918,658.04 7,841,159.23 392,057.96
% %
year
1-2 years 262,755.68 0.25% 26,275.57 184,867.52 1.23% 18,486.76
2-3 years 36,512.86 0.03% 10,953.86 27.00 0% 8.10
46.44
3 years 7,076,590.32 6.69% 6,964,177.27 6,957,580.99 6,835,461.94
%
3-4 years 10,872.98 0.01% 5,436.49 200,969.11 1.34% 100,484.56
4-5 years 213,953.11 0.2% 106,976.55 43,269.00 0.29% 21,634.50
162
Over 5 44.81
6,851,764.23 6.48% 6,851,764.23 6,713,342.88 6,713,342.88
years %
Total 105,749,019.67 -- 11,920,064.74 14,983,634.74 -- 7,246,014.76
In the combination, the receivables using balance percentage method for accounting and drawing
provisions for bad debt:
□ Applicable √ Inapplicable
In the combination, the receivables using other methods for accounting and drawing provisions for
bad debt:
√ Applicable □ Inapplicable
Unit: Yuan
Name of combination Book balance Bad debt
Combination of related party 159,252,762.27 0.00
Total 159,252,762.27 0.00
Accounts receivable, of which single item is not large in amount but is individually allotted for
bad debt provision as at the period-end
□ Applicable √ Inapplicable
(2) The receivables transferred back or taken back during the report period
Unit: Yuan
Accumulate the
amount for accounted
Reasons for Evidence of
and drew provisions
transferring back determining the Amount transferred
Content for receivables for bad debt prior to
or taking back original provision for back or taken back
transferring back or
receivables bad debt
taking back
receivables
Total -- -- --
Accounting and drawing of provisions for bad debt of receivables with significant or insignificant
amount for single item separately undertaken impairment test at end of term:
Accounting and
Content for
Book balance Book balance drawing proportion Reasons
receivables
(%)
Total -- --
Information on receivables with insignificant amount on single item but whose combination with
large risk upon combination by credit risks.
(3) The receivables of actual offset in the report period
Unit: Yuan
163
Generated by
Name of Nature of
Date of offset Amount of offset Reasons of offset related
company receivables
transactions?
In total -- -- 0.00 -- --
Information on offset for receivables
Receivables without offset in the report period of the company
(4) Shareholder company holding 5% (including 5%) or above of voting stock of the
receivables in the report period
□ Applicable √ Inapplicable
(5) Nature or content of other receivables with larger amount
Other receivables with larger amount is mainly the payment for goods in subsidiary.
(6) The top 5 company of amount regarding receivables
Unit: Yuan
Occupancy rate of the
Relationship with the
Name of company Amount Period total amount of
Company
receivables (%)
Sanonda Foreign
Subsidiary 142,183,816.55 Within 1 year 53.65%
Trading Co., Ltd.
Jingzhou Hongxiang
Subsidiary 17,068,945.72 Within 1 year 6.44%
Chemical Co., Ltd.
Zhejiang Sanyang
Agricultural Material Non-related party 11,593,958.30 Within 1 year 4.38%
Co., Ltd.
Jiangsu Nantong
WEILIKE Chemical Non-related party 15,360,000.00 Within 1 year 5.8%
Co., Ltd.
Hangzhou Fresh Cure
Non-related party 4,821,317.84 Within 1 year 1.82%
Chemical Co., Ltd.
Total -- 191,028,038.41 -- 72.09%
(7) Receivables for related party
Unit: Yuan
Relationship with the Occupancy rate of the total
Name of company Amount
company amount of receivables (%)
Sanonda Foreign Trading
Subsidiary 142,183,816.55 53.65%
Co., Ltd.
Jingzhou Hongxiang
Subsidiary 17,068,945.72 6.44%
Chemical Co., Ltd.
Total -- 159,252,762.27 60.09%
(8) Transferred amount for the receivables non-conforming to the final terms
164
(9) In case of asset securitization based on the subject matter of receivables, relevant
transaction arrangement must be simply introduced.
2. Other receivables
(1) Other receivables
Unit: Yuan
Closing balance Opening balance
Book balance Bad debt Book balance Bad debt
Prop
Category Prop Prop Prop
ortio
Amount ortio Amount ortio Amount ortio Amount
n
n (%) n (%) n (%)
(%)
Debts receivable for
significant amount and
accounting and drawing 0.00 0.00 0.00 0.00
for provision of bad debt
of single item
Debts receivable accounting and drawing for provision of bad debt in the combination
Combination for related 95.17 138,138,523.5 95.51
157,133,099.55
party % 5 %
Combination by account 4.83 69.93 4.49 84.4
7,978,760.42 5,579,636.00 6,488,836.34 5,479,994.70
receivable age % % % 5%
Sub-total for 100 3.38 144,627,359.8 100 3.79
165,111,859.97 5,579,636.00 5,479,994.70
combination % % 9 % %
Debts receivable for
insignificant amount and
accounting and drawing 0.00 0.00 0.00 0.00
for provision of bad debt
of single item
144,627,359.8
Total 165,111,859.97 -- 5,579,636.00 -- -- 5,479,994.70 --
9
Information on categories of receivables
1. The company regulated that the accounts payment receivable over 5 million RMB or
above will be considered as significant payment receivable for single amount.
2. There are 3 categories for payment receivable categorized in the combination.
(1) Combination for related party: the combination is divided by the debtor and the
related relationship with the company (it generally refers to the actual controller of the company
and other enterprises controlled by the company).
(2) Risk-free combination: the combination is divided by the reputation of the debtor,
payment nature, transaction safeguard measure (it generally refers to purchasing fund, fund in
reserve for the employee, deposit of contract and receivables for setting up warranty clauses).
(3). Combination of account receivable age: the combination is divided by the account
receivable age of the receivables.
165
In the combination, the accounting and drawing standard for the combination of provisions
for bad debt by utilizing analysis of account receivable age.
Account receivable age accounting and drawing accounting and drawing
proportion (%) for receivables proportion (%) for other
receivables
Within 1 year (including 1 year, hereinafter inclusive) 5 5
1-2 years 10 10
2-3 years 30 30
3-4 years 50 50
4-5 years 50 50
Over 5 years 100 100
3. The group shall undertake impairment test separately to receivables with insignificant
amount but owning the following features. Provided that it’s been evident that such receivables
are impaired, the impairment loss and accounting and drawing provisions for bad debt shall be
determined in accordance with balance which the current value of future cash flow is below the
book value (for example: the controversial receivables with the other party or receivables related
to lawsuits and arbitration; the receivables which it has been obviously evident that the debtor is
unable to pay back).
Receivables with significant amount of single item and accounting and drawing provisions for bad
debt for single item at end of term
□ Applicable √ Inapplicable
In the combination, the receivables using account receivable aging analysis for accounting and
drawing provisions for bad debt:
√ Applicable □ Inapplicable
Unit: Yuan
Closing balance Opening balance
Book balance
Account
Propor Propor
receivable age Bad debt Book balance
Amount tion Amount tion
(%) (%)
Within 1 year
Including: -- -- -- -- -- --
Sub-total 27.26 11.89
2,175,159.58 108,757.98 771,323.90 38,566.20
within 1 year % %
1-2 years 196,698.75 2.47% 19,669.88 94,000.00 1.45% 9,400.00
2-3 years 71,256.65 0.89% 21,377.00 78,230.70 1.21% 23,469.21
3 years 5,535,645.44 69.38 5,429,831.14 5,545,281.74 85.45 5,408,559.29
166
% %
3-4 years 78,230.70 0.98% 39,115.35 273,444.90 4.21% 136,722.45
4-5 years 133,397.90 1.67% 66,698.95
66.73 81.24
Over 5 years 5,324,016.84 5,324,016.84 5,271,836.84 5,271,836.84
% %
Total 7,978,760.42 -- 5,579,636.00 6,488,836.34 -- 5,479,994.70
In the combination, the receivables using balance percentage method for accounting and drawing
provisions for bad debt:
□ Applicable √ Inapplicable
In the combination, the receivables using other methods for accounting and drawing provisions for
bad debt:
√ Applicable □ Inapplicable
Unit: Yuan
Name of combination Book balance Bad debt
Combination of related party 157,133,099.55 0.00
Total 157,133,099.55 0.00
Accounts receivable, of which single item is not large in amount but is individually allotted for
bad debt provision as at the period-end
□ Applicable √ Inapplicable
(2) The receivables transferred back or taken back during the report period
Unit: Yuan
Accumulate the
amount for accounted
Reasons for Evidence of
and drew provisions
transferring back determining the Amount transferred
Content for receivables for bad debt prior to
or taking back original provision for back or taken back
transferring back or
receivables bad debt
taking back
receivables
Total -- -- --
Accounting and drawing of provisions for bad debt of receivables with significant or insignificant
amount for single item separately undertaken impairment test at end of term:
Accounting and
Content for
Book balance Book balance drawing proportion Reasons
receivables
(%)
Total -- --
Information on receivables with insignificant amount on single item but whose combination with
large risk upon combination by credit risks.
167
(3) The receivables of actual offset in the report period
Unit: Yuan
Generated by
Name of Nature of
Date of offset Amount of offset Reasons of offset related
company receivables
transactions?
In total -- -- 0.00 -- --
Information on offset for receivables
Receivables without offset in the report period of the company
(4) Shareholder company holding 5% (including 5%) or above of voting stock of the
receivables in the report period
□ Applicable √ Inapplicable
(5) Nature or content of other receivables with larger amount
Other receivables with larger amount is mainly the payment for goods in subsidiary.
(6) The top 5 companies of amount regarding receivables
Unit: Yuan
Occupancy rate of the
Relationship with the
Name of company Amount Period total amount of
Company
receivables (%)
Jingzhou Hongxiang
Subsidiary 140,000,000.00 Within 1 year 84.79%
Chemical Co., Ltd.
Sanonda Foreign
Subsidiary 12,188,099.55 Within 1 year 7.38%
Trading Co., Ltd.
Zhejiang Sanyang
Agricultural Material Non-related party 4,945,000.00 Within 1 year 2.99%
Co., Ltd.
Jiangsu Nantong
WEILIKE Chemical Non-related party 3,125,000.00 Within 1 year 1.89%
Co., Ltd.
Hangzhou Fresh Cure
Non-related party 548,500.00 Within 1 year 0.33%
Chemical Co., Ltd.
Total -- 160,806,599.55 -- 97.38%
（7）Receivables for other related party
Unit: Yuan
Relationship with the Occupancy rate of the total
Name of company Amount
company amount of receivables (%)
Sanonda Foreign Trading
Subsidiary 140,000,000.00 84.79%
Co., Ltd.
168
Jingzhou Hongxiang
Subsidiary 12,188,099.55 7.38%
Chemical Co., Ltd.
Jingzhou Longhua
Subsidiary 4,945,000.00 2.99%
Petrochemical Co., Ltd.
Total -- 157,133,099.55 95.16%
(8) Transferred amount for the receivables non-conforming to the final terms
(9) In case of asset securitization based on the subject matter of receivables, relevant
transaction arrangement must be simply introduced.
3. Long-term equity investment
Unit: Yuan
Reason
s for
Accou
inconf
Votin nting
ormity
g and Cash
Increas Shareh betwee
powe drawin divide
Accou ing or olding n Depreci
Initial r g nds
nting Opening decrea Closing proport Shareh ation
Investee investm propo deprec for
metho balance sing balance ion for olding reserve
ent cost rtion iation this
d amoun investe proport s
for reserv perio
t e (%) ion and
inves es for d
Voting
tee this
power
(%) period
proport
ion
Sanond
a
(Jingzh
ou)
Pesticid Law
25,500,0 26,500,0 1,000, 27,500,0 24,500,
e of
00.00 00.00 000.00 00.00 000.00
Chemic cost
al
Industry
Co.,
Ltd.
Hubei
Sanond
Law
a 7,245,02 15,745,0 15,745,0
of
Tianme 3.32 23.32 23.32
cost
n
Agroch
169
emical
Co.,
Ltd.
Jingzho
u
Longhu
a 3,250,00 3,250,00 3,250,00 650,0
Petroch 0.00 0.00 0.00 00.00
emicals
Co.,
Ltd.
Hubei
Sanond
a Law
9,000,00 9,000,00 9,000,00
Foreign of
0.00 0.00 0.00
Trading cost
Co.,
Ltd.
Jingzho
u
Hongxi Law
37,619,9 37,619,9 37,619,9
ang of
05.41 05.41 05.41
Chemic cost
als Co.,
Ltd.
Law
Hubei 20,000,0 20,000,0 20,000,0 11,991,
of
Bank 00.00 00.00 00.00 017.37
cost
Hubei
Shendia Law
564,000. 564,000. 564,000.
n Auto of
00 00 00
Motor cost
Co., Ltd
Guangx
i
Law
Zhongdi 580,800. 580,800. 580,800.
of
ng 00 00 00
cost
Holding
Co., Ltd
103,759, 113,259, 1,000, 114,259, 36,491, 650,0
In total -- -- -- -- 0.00
728.73 728.73 000.00 728.73 017.37 00.00
Information on long-term equity investment
1 million Yuan is added for the long-term equity investment in this period to purchase the
minority equity of Sanonda (Jingzhou) Pesticide Chemical Industry Co., Ltd.
170
4. Operating revenue and operating cost
(1) Operating revenue and operating cost
Unit: Yuan
Item Amount of this period Amount of last period
Main operation revenue 1,004,601,707.14 843,415,983.09
Other operation revenue 20,442,618.50 17,383,173.62
Main operating cost 886,916,094.18 727,458,020.65
Total 1,025,044,325.64 860,799,156.71
(2) Main business (classified by industries)
√ Applicable □ Inapplicable
Unit: Yuan
Amount of this period Amount of last period
Name of Industries
Operating revenue Operating cost Operating revenue Operating cost
Manufacturing of
chemical
1,004,601,707.14 870,151,801.30 843,415,983.09 712,596,633.05
raw material and
chemicals
Total 1,004,601,707.14 870,151,801.30 843,415,983.09 712,596,633.05
(3) Main business (classified by products)
√ Applicable □ Inapplicable
Unit: Yuan
Amount of this period Amount of last period
Name of Products
Operating revenue Operating cost Operating revenue Operating cost
Agrochemicals such as
chemical fertilizer and 996,311,279.98 865,895,132.66 843,415,983.09 712,596,633.05
pesticide
New chemical material
8,290,427.16 4,256,668.64
and special chemicals
Total 1,004,601,707.14 870,151,801.30 843,415,983.09 712,596,633.05
(4) Main business (classified by districts)
√ Applicable □ Inapplicable
Unit: Yuan
Name of districts Amount of this period Amount of last period
171
Operating revenue Operating cost Operating revenue Operating cost
Domestic 537,302,205.33 449,298,299.75 465,343,167.47 382,107,118.29
overseas 467,299,501.81 420,853,501.55 378,072,815.62 330,489,514.76
Total 1,004,601,707.14 870,151,801.30 843,415,983.09 712,596,633.05
(5) Business Income of Top Five Customers of Company
Unit：Yuan
The proportion in
overall business
Name of customer Overall business income
income of
company (%)
Foreign customer A 45,528,937.85 4.44%
Foreign customer B 29,208,688.27 2.85%
Foreign customer C 27,532,017.00 2.69%
Foreign customer D 26,296,478.38 2.56%
Foreign customer E 26,196,101.20 2.56%
In total 154,762,222.70 15.1%
Information on business income
The business income has increased 19% compared to the same period of the previous year. On one
hand, the company has increased the price of some products because of the factor of cost price; on
the other hand, the sales of some leading products have grown.
5. Investment Income
(1) Details of Investment Income
Unit：Yuan
Item Amount of this period Amount of last period
Long-term equity investment income assessed by
650,000.00 650,000.00
cost method
Long-term equity investment income assessed by
equity method
Investment income from long-term equity
investment disposal
Investment income during holding trading financial
assets
Investment income for holding investment to
expiration date
Investment income during holding available-for-sale
financial assets
Investment income from trading financial assets
disposal
Investment income for holding investment to
expiration date
172
Investment income from available-for-sale financial
assets etc.
Others
Total 650,000.00 650,000.00
(2) Long-term equity investment income assessed by cost method
Unit：Yuan
Amount of this Amount of last Reasons for the change of
Investee
period period increase/decrease
Jinzhou Longhua Petrochemical Co.,
650,000.00 650,000.00
Ltd.
Total 650,000.00 650,000.00 --
(3) Long-term equity investment income assessed by equity method
Unit：Yuan
Amount of this Amount of last Reasons for the change of
Investee
period period increase/decrease
Total --
Information on investment income
6. Supplementary information to cash flow statement
Unit：Yuan
Item Amount of this period Amount of last period
1. Reconciliation of net profit to net cash
-- --
flows generated from operating activities
Net profit 27,846,757.22 29,317,420.76
Add: Provision for impairment of assets 9,241,029.13 7,695,621.28
Depreciation of fixed assets, of oil-gas
64,100,706.10 43,019,741.76
assets, of productive biological assets
Amortization of intangible assets 1,893,403.20 1,756,736.50
Amortization of long-term deferred expense
Losses on disposal of property, plant and
equipment, intangible assets and other 205,041.84 -984,796.38
long-term assets (gains: negative)
Loss on retirement of fixed assets (gains:
negative)
Financial cost (gains: negative)
Investment loss (gains: negative) 35,722,472.77 34,210,094.27
Decrease in deferred income tax assets
-650,000.00 -650,000.00
(gains: negative)
Increase in deferred income tax liabilities 186,578.04 -2,006,918.83
173
(decrease: negative)
Decrease in inventory (gains: negative)
Decrease in accounts receivable from
-4,724,415.70 -36,573,534.49
operating activities (gains: negative)
Increase in payables from operating
-167,244,669.31 -187,870,097.18
activities (decrease: negative)
Other 147,036,351.27 37,468,635.14
Net cash flows generated from operating
activities
II. Investing and financing activities that do
not involving 113,613,254.56 -74,617,097.17
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 -- --
Less: Opening balance of cash 280,919,823.80 263,226,015.74
Closing balance of cash equivalents 178,056,420.12 141,059,742.96
More: Closing balance of cash
equivalents
Less: Opening balance of cash
equivalents
Net increase in cash and cash equivalents 102,863,403.68 122,166,272.78
7. Assets and Liabilities in Assessed Value under Reverse Purchase
Unit：Yuan
Name of assets and liabilities in assessed value Assessed Original book value
Assets
Liabilities
(16). Supplementary Information
1. Return on equity (ROE) and earnings per share (EPS)
Unit: Yuan
Weighted average ROE EPS（Yuan/share）
Profit as of reporting period
(%) EPS-basic EPS-diluted
Net profit attributable to common
2.05% 0.0404 0.0404
shareholders of the Company
Net profit attributable to common 2.05% 0.0404 0.0404
174
shareholders of the Company after
deduction of non-recurring profit and
loss
2. Information on Abnormal Condition and Its Reason of Main Financial Statement Items of
Company
Information on great change of company’s assets and liabilities structure during reporting period
Unit: Ten thousand Yuan
Item 30 Jun. 2012 31 Dec. 2011 Increase/decreas
Amount Proportion in overall Amount Proportion in overall e (%)
investment（%） investment（%）
Monetary fund 40,958 15.62% 21,959 9.58% 86.52%
Notes receivable 1,403 0.53% 3,668 1.6% -61.76%
Accounts 25,385 9.68% 10,622 4.63% 138.99%
receivable
Prepayment 3,365 1.28% 1,537 0.67% 119.01%
Short-term 50,793 19.38% 29,314 12.79% 73.27%
borrowings
Accounts payable 16，342 6.23% 12,264 5.35% 33.25%
Other accounts 6,621 2.53% 4,203 1.83% 57.51%
payable
Non-current 22，455 8.57% 9,699 4.23% 131.52%
liabilities due
within one year
Long-term 33,000 12.59% 50,756 22.14% -34.98%
borrowings
Note:
1. The monetary fund has increased 86.52% compared to the early days of this reporting period.
The main reason is that short-term borrowings of this reporting period have risen.
2. The notes receivable has decreased 61.76% compared to the early days of this reporting period.
The main reason is that the payments are settled by notes in this reporting period.
3. The accounts receivable has increased 138.99% compared to the early days of this reporting
period. The main reason is that in this reporting period, the export sales has increased and the
settlement period is long because of most settlements with right of recourse.
4. The prepayment has increased 119.01% compared to the early days of this reporting period. The
main reason is the prepayment of equipment and raw material has increased in this reporting
period.
5. The short-term borrowings have increased 73.27% compared to the early days of this reporting
period. The main reason is the capital needed for upgrading production technology has increased
in this reporting period.
6. The accounts payable has increased 33.25% compared to the early days of this reporting period.
The main reason is the payment for raw material and projects to be paid has increased in this
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reporting period.
7. The other accounts payable has increased 57.51% compared to the early days of this reporting
period. The main reason is the unpaid sales in the end of this reporting period have increased
compared to last period.
8. The non-current liabilities due within one year have increased 131.52% compared to the early
days of this reporting period. The main reason is the long-term liabilities due within one year has
increased in this reporting period.
9. The long-term borrowings have reduced 34.98% compared to the early days of this reporting
period. The main reason is the long-term liabilities due within one year has increased and has been
transferred to the non-current liabilities item in this reporting period.
Item Amount of this Amount of last period Increase/decr
period ease (%)
Loss of assets depreciation 1,272 837 51.99%
Incomes besides business 85 154 -44.55%
Expenditures besides business 85 47 80.93%
1. Loss of assets depreciation has increased 51.99% compared to the same period of the
previous year due to the loss caused by falling price of inventory.
2. Incomes besides business has decreased 44.55% compared to the same period of the
previous year due to the reduced income of fixed assets disposal during this reporting period.
3. Expenditures besides business has increased 80.93% compared to the same period of the
previous year due to the great loss of fixed assets disposal during this reporting period.
IX Documents Available For Reference
Documents Available For Reference
1. Text of Interim Report 2012 and the Summary with signature of the Chairman of the Board of the Company.
2. Accounting Statements carried with signatures and seals of Legal Representative Accounting Principal, as
well as Head of the Accounting Organ.
3. The original copy of all company files and manuscript of public notices ever disclosed in China Securities
Journal, Securities Times and Hong Kong Ta Kung Pao in the reporting period.
4. Place for reference: the office of the Company
Chairman of the Board: Li Zuorong
Approved sent-off date: 19 Aug. 2012
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