2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
HUBEI SANONDA CO., LTD.
2016 SEMI-ANNUAL REPORT
August 2016
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Section I. Important Reminders, Contents & Explanation
The Board of Directors, the Supervisory Committee as well as all directors,
supervisors and senior management staff of Hubei Sanonda Co., Ltd.
(hereinafter referred to as “the Company”) warrant that this report is factual,
accurate and complete without any false record, misleading statement or
material omission. And they shall be jointly and severally liable for that.
All directors attended the board session for reviewing this report.
The Company plans not to distribute cash dividends or bonus shares or turn
capital reserve into share capital.
An Liru, company principal, Liu Anping, chief of the accounting work, and Tu
Zhiwen, chief of the accounting organ (chief of accounting), hereby confirm that
the Financial Report enclosed in this report is factual, accurate and complete.
This Report is prepared in both Chinese and English. Should there be any
discrepancy between the two versions, the Chinese version shall prevail.
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Contents
Section I. Important Reminders, Contents & Explanation ............................................................ 2
Section II. Company Profile .............................................................................................................. 5
Section III. Highlights of Accounting Data & Financial Indicators .............................................. 7
Section IV. Report of the Board of Directors ................................................................................... 9
Section V. Significant Events ........................................................................................................... 18
Section VI. Change in Shares & Shareholders .............................................................................. 30
Section VII. Preferrence Shares ...................................................................................................... 34
Section VIII. Directors, Supervisors & Senior Management Staff .............................................. 35
Section IX. Financial Report ........................................................................................................... 36
Section X. Documents Available for Reference ........................................................................... 150
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Explanation
Refers
Term Contents
to
Company/the Company Refers Hubei Sanonda Co., Ltd.
to
Refers
CSRC Hubei The Hubei bureau of China Securities Regulatory Commission
to
Refers
CSRC China Securities Regulatory Commission
to
Refers
SSE Shenzhen Stock Exchange
to
Refers
Reporting Period/the Reporting Period 1 Jan. 2016-30 Jun. 2016
to
Refers China National Agrochemical Corporation (holding 100% equity of
CNAC
to Sanonda Group, the Company’s controlling shareholder)
Refers ADAMA Celsius B.V., a company incorporated in the Netherlands
Celsius to according to its law, once called Celsius Property B.V., holding a stake of
10.6% in the Company
Refers ADAMA Agricultural Solutions LTD., a subsidiary indirectly controlled
to by CNAC, once called Makhteshim-Agan Industries Ltd., a company
ADAMA
incorporated in Israel according to its law, indirectly holding the 100%
equity of Celsius
Refers Jingzhou Sanonda Holdings Co., Ltd., once called Sanonda Group Co.,
Sanonda Holdings
to Ltd., the controlling shareholder of the Company
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Section II. Company Profile
I. Basic information of the Company
Stock abbreviation Sanonda A (Sanonda B) Stock code 000553 (200553)
Stock exchange listed with Shenzhen Stock Exchange
Chinese name of the Company 湖北沙隆达股份有限公司
Abbr. of the Chinese name of
沙隆达
the Company (if any)
English name of the Company
HUBEI SANONDA CO., LTD.
(if any)
Abbr. of the English name of
SANONDA
the Company (if any)
Legal representative of the
An Liru
Company
II. Contact information
Board Secretary Securities Representative
Name Li Zhongxi Liang Jiqin
No. 93, Beijing East Road, Jingzhou, No. 93, Beijing East Road, Jingzhou,
Contact address
Hubei Province, R.R.China Hubei Province, R.R.China
Tel. 0716-8208632 0716-8208232
Fax 0716-8321099 0716-8321099
E-mail lizhongxi@agr.chemchina.com liangjiqin@agr.chemchina.com
III. Other information
1. Ways to contact the Company
Did any change occur to the registered address, office address and their postal codes, website address and email address of the
Company during the Reporting Period?
□ Applicable √ Not applicable
The registered address, office address and their postal codes, website address and email address of the Company did not change
during the Reporting Period. The said information can be found in the 2015 Annual Report.
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
2. About information disclosure and where this report is placed
Did any change occur to information disclosure media and where this report is placed during the Reporting Period?
□ Applicable √ Not applicable
The newspapers designated by the Company for information disclosure, the website designated by CSRC for disclosing this report
and the location where this report is placed did not change during the Reporting Period. The said information can be found in the
2015 Annual Report.
3. Change of the registered information
Did any change occur to the registered information during the Reporting Period?
√ Applicable □ Not applicable
Registration
Tax registration
Registration date Registration place number of the Organization code
number
business license
Hubei
Administration for
Registered at the period-begin 3 Aug. 2015 420000400004491 421001706962287 70696228-7
Industry &
Commerce
Hubei
Administration for 914200007069622 914200007069622 914200007069622
Registered at the period-end 29 Mar. 2016
Industry & 87Q 87Q 87Q
Commerce
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Section III. Highlights of Accounting Data & Financial Indicators
I. Major accounting data and financial indicators
Does the Company adjust retrospectively or restate accounting data of previous years due to change of the accounting policy or
correction of any accounting error?
□ Yes √ No
Reporting Period Same period of last year YoY +/- (%)
Operating revenues (RMB) 1,005,697,157.50 1,235,251,682.81 -18.58%
Net profit attributable to shareholders of
16,807,555.50 117,678,175.59 -85.72%
the Company (RMB)
Net profit attributable to shareholders of
the Company after excluding extraordinary 6,397,955.00 115,491,779.81 -94.46%
gains and losses (RMB)
Net cash flows from operating activities
46,718,918.62 -19,276,749.38 342.36%
(RMB)
Basic EPS (RMB/share) 0.0283 0.1981 -85.71%
Diluted EPS (RMB/share) 0.0283 0.1981 -85.71%
Weighted average ROE (%) 0.80% 5.74% -4.94%
As at the end of the
As at the end of last year YoY +/- (%)
Reporting Period
Total assets (RMB) 3,043,794,012.40 2,977,268,169.32 2.23%
Net assets attributable to shareholders of
2,102,588,613.57 2,097,382,469.60 0.25%
the Company (RMB)
II. Differences between accounting data under domestic and overseas accounting standards
1. Differences of net profit and net assets disclosed in financial reports prepared under international and
Chinese accounting standards
□ Applicable √ Not applicable
No difference.
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards
□ Applicable √ Not applicable
No difference.
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
III. Items and amounts of extraordinary gains and losses
√ Applicable □ Not applicable
Unit: RMB
Item Amount Explanation
Gains/losses on the disposal of non-current assets (including the
10,210,811.11
offset part of asset impairment provisions)
Government grants recognized in the current period, except for
those acquired in the ordinary course of business or granted at
2,756,200.44
certain quotas or amounts according to the country’s unified
standards
Other non-operating income and expenses other than the above 912,455.78
Less: Income tax effects 3,469,866.83
Total 10,409,600.50 --
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Extraordinary Gains and
Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item
□ Applicable √ Not applicable
No such cases.
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Section IV. Report of the Board of Directors
I. Overview
In the first half of 2016, the pesticide market was still weak with severe overcapacity and cut-throat competition. Demand for the
major products of the Company was sluggish and the selling prices maintained at a low level, which greatly affected the production
and operation of the Company.
During the Reporting Period, the Company tightly embraced the center of “saving and potential tapping, cost decreasing and benefit
increasing” to develop work, made great efforts to internal work practice, controlled the cost by all manner of means, reduced the
expenses and optimized the operation. Solidified the progress, improve the mechanism, strengthened the assessment, consolidated the
basis, deeply developed the energy saving and resources reducing as well as the benchmarking, extruded the improvement of the
special projects and promoted the comprehensive level of the enterprise management. And the Company developed the energy saving
and cost reducing, quality increasing and efficiency enhancing on the aspects such as the safety production, marketing sales, material
logistics, scientific research and technical renovation, funds management and control as well as the human resources. , saving by
every bit and reduced the cost with efficiency increased, which all of the above steps made the overall production and operation met
with the anticipation basically.
For the Reporting Period, the Company achieved operating revenues of RMB1.006 billion, decreasing 18.58% over the same period
of last year; total profit of RMB23.11 million, representing a drop of 85.61% from a year earlier. The main reasons: during the
Reporting Period, the pesticide market was still weak, demand for the major products of the Company was sluggish and the selling
prices maintained at a low level, resulting in a considerable fall in the gross profit margin, as well as a decrease in the sales revenue,
on a year-on-year basis.
II. Main business analysis
YoY change of major financial data:
Unit: RMB
Reporting Period Same period of last year YoY +/-% Main reasons for change
Operating revenues 1,005,697,157.50 1,235,251,682.81 -18.58%
Operating costs 859,188,101.99 941,767,629.71 -8.77%
Selling expenses 45,242,941.76 36,541,875.51 23.81%
Mainly due to the YoY
increase of the factory
Administrative expenses 69,143,939.29 48,923,908.29 41.33%
shutdown losses of the
Reporting Period.
Mainly due to the YoY
increase of the exchange
Financial expenses 3,943,997.08 13,893,016.49 -71.61%
revenues of the
Reporting Period.
Income tax expenses 6,298,975.02 42,899,361.41 -85.32% Mainly due to the YoY
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
decrease of the total
profits of the Reporting
Period.
R&D input 1,497,874.56 1,349,295.92 11.01%
Mainly due to the YoY
decrease of the cash of
Net cash flows from the taxes payment and
46,718,918.62 -19,276,749.38 342.36%
operating activities that paid for the
merchandises purchase
of the Reporting Period.
Mainly due to the YoY
Net cash flows from decrease of the projects
-35,779,852.86 -152,808,985.39 76.59%
investing activities investment of the
Reporting Period.
Mainly due to the YoY
Net cash flows from decrease of the
19,473,916.83 181,047,673.31 -89.24%
financing activities borrowings of the
Reporting Period.
Mainly due to the YoY
Net increase in cash and increase of the net
31,952,006.72 8,999,355.64 255.05%
cash equivalents operating activities of the
Reporting Period.
Mainly due to the
decrease of the
withdrawn urban
Business tax and construction taxes and
3,853,275.19 8,887,120.84 -56.64%
surcharges the surcharges owning to
the YoY decline of the
revenues of the
Reporting Period.
Mainly due to the YoY
decrease of the inventory
Asset impairment loss 15,173,343.00 27,616,991.95 -45.06%
falling price reserves of
the Reporting Period.
Mainly due to the YoY
increase of the disposed
Non-operating income 13,882,859.98 2,937,379.44 372.63% intangible assets
revenues of the
Reporting Period.
Mainly due to the YoY
Net profits attributed to
16,807,555.50 117,678,175.59 -85.72% decrease of the sales
the owners’ of the
revenues and the gross
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Company margin of the Reporting
Period.
Mainly due to the
increase of the goods
Notes receivable 14,785,699.71 34,433,010.97 -57.06%
payment by the notes of
the Reporting Period.
Mainly due to the
decrease of the sales
Accounts receivable 400,197,459.56 180,450,531.93 121.78%
outstanding of the
Reporting Period.
Mainly due to the
increase of the accounts
Prepayments 28,224,389.49 20,413,365.68 38.26%
of the raw materials paid
in advance.
Mainly due to the
Other accounts increase of the land
14,228,948.02 9,847,451.35 44.49%
receivable amount receivable of the
Reporting Period.
Mainly due to the
decrease of the
Inventories 190,399,721.64 287,824,164.30 -33.85%
merchandise inventory of
the Reporting Period.
Mainly due to the
payment of the
Short-term loans 0.00 20,000,000.00 -100.00%
borrowings of the
Reporting Period.
Mainly due to the newly
increase of the managed
Notes payable 30,000,000.00 0.00
bank acceptance of the
Reporting Period.
Mainly due to the
decrease of the
customers’ goods
Deposit received 8,077,224.97 26,666,138.22 -69.71%
payment received in
advance of the Reporting
Period.
Mainly due to the
payment of the pending
Payroll payment 14,552,544.21 30,308,341.73 -51.99% payments of the last
period of the Reporting
Period.
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Mainly due to the
payment of part of the
Interests payable 753,198.89 1,123,849.31 -32.98% long-term loans interests
from the bank of the
Reporting Period.
Mainly due to the
Long-term accounts
0.00 650,000.00 -100.00% disposal of part of funds
payable
of the Reporting Period.
Mainly due to the newly
Other non-current
120,800,000.00 0.00 increased funds of the
liabilities
Reporting Period.
Major changes to the profit structure or sources of the Company during the Reporting Period:
□ Applicable √ Not applicable
No major changes occurred to the profit structure or sources of the Company during the Reporting Period.
Reporting Period progress of the future development planning in the disclosed documents of the Company such as share-soliciting
prospectuses, offering prospectuses, asset reorganization reports, etc.:
□ Applicable √ Not applicable
The Company did not mention any future planning for the Reporting Period in its disclosed documents such as share-soliciting
prospectuses, offering prospectuses, asset reorganization reports, etc.
Review the progress of the previously disclosed business plan in the Reporting Period:
The operating revenue goal of the Company for 2016 is RMB2.15 billion. And RMB1.006 billion has been accomplished for the
Reporting Period, 46.77%% of the goal.
III. Breakdown of main business
Unit: RMB
Increase/decrease Increase/decrease
Increase/decrease
of operating of gross profit
Operating of operating costs
Operating costs Gross profit rate revenues over the rate over the
revenues over the same
same period of same period of
period of last year
last year last year
Classified by industry
Industry of
manufacturing
chemical raw
988,076,337.88 843,037,392.01 14.68% -19.53% -10.12% -8.93%
materials and
chemical
products
Classified by product
New chemical
11,224,423.36 5,872,211.49 47.68% -10.62% -19.29% 5.62%
materials and
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
special chemicals
Basic
(chlor-alkali)
172,426,086.80 160,569,547.98 6.88% 66.41% 61.91% 2.59%
chemical
products
Agriculture-appli
ed chemicals,
804,425,827.72 676,595,632.54 15.89% -27.64% -18.63% -9.32%
such as fertilizer
and pesticide
Classified by region
Domestic 474,368,316.48 418,058,248.48 11.87% -13.04% -4.33% -8.03%
Overseas 513,708,021.40 424,979,143.53 17.27% -24.72% -15.17% -9.32%
IV. Core competitiveness analysis
No significant changes occurred to the core competitiveness of the Company in the Reporting Period.
V. Investment analysis
1. Investments in equities of external parties
(1) Foreign investment
□ Applicable √ Not applicable
There was no foreign investment of the Company in the Reporting Period.
(2) Equity-holdings in financial enterprises
√ Applicable □ Not applicable
Gain/loss
Initial Opening Closing
Opening Closing Closing in the
Enterprise Enterprise investment equity-hol equity-hol Accountin Equity
equity-hol equity-hol book value Reporting
name variety cost dings dings g title source
ding ratio ding ratio (RMB) Period
(RMB) (share) (share)
(RMB)
Available-f Purchase
Hubei Commerci 20,000,000 8,008,982. or-sale of
23,481,067 0.71% 23,481,067 0.71%
Bank al bank .00 63 financial corporate
assets stock
20,000,000 8,008,982.
Total 23,481,067 -- 23,481,067 -- 0.00 -- --
.00 63
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
(3) Investment in securities
□ Applicable √ Not applicable
There was no investment in securities by the Company in the Reporting Period.
(4) Shareholdings in other listed companies
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Information of trust management, derivative investment and entrusted loan
(1) Trust management
□ Applicable √ Not applicable
There was no trust management of the Company in the Reporting Period.
(2) Derivative investment
□ Applicable √ Not applicable
There was no derivative investment of the Company in the Reporting Period.
(3) Entrusted loan
□ Applicable √ Not applicable
There was no entrusted loan of the Company in the Reporting Period.
3. Use of raised funds
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Analysis to main subsidiaries and stock-participating companies
√ Applicable □ Not applicable
Main subsidiaries and stock-participating companies:
Unit: RMB
Main
Company Company Registered Operating Operating
Industry products/ser Total assets Net assets Net profit
name variety capital revenues profit
vices
Sanonda Chemical Production 30000000.0 11,068,868. 6,284,975.3 -646,370.
Subsidiary 8,203,633.06
(Jingzhou) raw of 0 75 7 33
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Pesticides material pesticides
and and and
Chemicals chemical intermediat
Co., Ltd. product es
manufacturi
ng industry
Import &
Hubei
export of
Sanonda
Trade pesticides 10000000.0 364,112,99 43,530,082. 102,702,05 -1,018,27
Foreign Subsidiary -764,152.77
industry and 0 3.81 39 8.14 4.55
Trading
intermediat
Co., Ltd.
es
Chemical
raw
Production
Jingzhou material
and sale of
Hongxiang and 40000000.0 211,876,71 -10,100,402 77,937,723. -2,491,92
Subsidiary chemical -1,980,255.31
Chemical chemical 0 5.27 .34 36 1.97
raw
Co., Ltd. product
materials
manufacturi
ng industry
5. Significant projects of investments with non-raised funds
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VI. Predict the operating results of January-September 2016
Warning of possible loss or considerable YoY change of the accumulated net profit made during the period-begin to the end of the
next Reporting Period according to prediction, as well as explanations on the reasons:
□ Applicable √ Not applicable
VII. Explanation by the Board of Directors and the Supervisory Committee about the
“non-standard audit report” issued by the CPAs firm for the Reporting Period
□ Applicable √ Not applicable
VIII. Explanation by the Board of Directors about the relevant situation of the “non-standard
audit report” of the first half year
□ Applicable √ Not applicable
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
IX. Implementation of profit allocation during the Reporting Period
Profit allocation plan implemented during the Reporting Period, especially execution and adjustment of the cash dividend plan and
the plan for turning capital reserve into share capital:
√ Applicable □ Not applicable
On 16 March 2016, the Company held the 8th Session of the 7th Board of Directors, which reviewed and approved the Preplan of the
2015 Profits Distribution that had reviewed and approved by the 2015 Annual General Meeting on 18 April. 2016. The 2015 profits
distribution plan was: based on the total share capital of the Company on 31 December 2015, distributed the cash bonus of RMB0.25
(tax included) of every 10 shares for the whole shareholders with 0 shares of the bonus shares (tax included) and without any turning
capital reserve into share capital. On 7 June 2016, the Company disclosed the Announcement on the Execution of the 2015 Equities
Distribution on the appointed information disclosure media and the above cash bonus had completed the execution on 17 June 2016.
Special statement about the cash dividend policy
In compliance with the Company’s Articles of Association and
Yes
the resolution of the general meeting
Yes. No. 155 of the Articles of Association explicitly stipulated
Specific and clear dividend standard and ratio the profits distribution policies, decision-making process as well
as the conditions and proportion of the dividends and so on.
Complete decision-making procedure and mechanism Yes
Independent directors fulfilled their responsibilities and played
Yes
their due role.
Minority shareholders have the chance to fully express their
opinion and desire and their legal rights and interests were fully Yes
protected.
In adjustment or alteration of the cash dividend policy, the
conditions and procedure were in compliance with regulations Not applicable.
and transparent.
X. Preplan for profit distribution and turning capital reserve into share capital in the
Reporting Period
□ Applicable √ Not applicable
The Company planed that no to distribute cash dividend, bonus shares and there was no turning of capital reserve into share capital.
XI. Particulars about researches, visits and interviews received in this Reporting Period
√ Applicable □ Not applicable
Main discussion and
Time Place Way of reception Visitor type Visitor materials provided by the
Company
Telephone Medium and small When will the Company’s
25 Mar. 2016 Jingzhou Individual
communication investors stocks resume listing?
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Materials offered:
Announcement on the
Progress of the
Reorganization of the
Significant Assets.
When will the Company’s
stocks resume listing?
Materials offered:
Telephone Medium and small
28 Mar. 2016 Jingzhouv Individual Announcement on the
communication investors
Progress of the
Reorganization of the
Significant Assets.
When will the Company’s
stocks resume listing?
Materials offered:
Telephone Medium and small
18 Apr. 2016 Jingzhou Individual Announcement on the
communication investors
Progress of the
Reorganization of the
Significant Assets.
When will the Company’s
stocks resume listing?
Materials offered:
Telephone Medium and small
7 Jun. 2016 Jingzhou Individual Announcement on the
communication investors
Progress of the
Reorganization of the
Significant Assets.
When will the Company’s
stocks resume listing?
Materials offered:
Telephone Medium and small
8 Jun. 2016 Jingzhou Individual Announcement on the
communication investors
Progress of the
Reorganization of the
Significant Assets.
When will the Company’s
stocks resume listing?
Materials offered:
Telephone Medium and small
29 Jun. 2016 Jingzhou Individual Announcement on the
communication investors
Progress of the
Reorganization of the
Significant Assets.。
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Section V. Significant Events
I. Corporate governance
The situation of the Company’s governance did not differ in principle from the Company Law and the relevant CSRC requirements
in the Reporting Period.
II. Litigations
Significant litigations and arbitrations
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Other litigations
□ Applicable √ Not applicable
III. Media query
□Applicable √Not applicable
The Company was not involved in any media query in the Reporting Period.
IV. Bankruptcy or Reorganization Events
□ Applicable √ Not applicable
There Company was not involved in any bankruptcy or reorganization events in the Reporting Period.
V. Transaction in Assets
1. Purchase of assets
□ Applicable √ Not applicable
There is no purchase of assets in the Company during the Reporting Period.
2. Sale of assets
□ Applicable √ Not applicable
There is no sale of assets in the Company during the Reporting Period.
3. Business combination
√ Applicable □ Not applicable
The Company had held the 12th Session of the 7th Board of Directros of the Company on 28 June 2016, which reviewed and approved
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
the Proposal on Absorbing and Combining Jingzhou Hongxiang Chemical Co., Ltd. and the Proposal on Absorbing and Combining
Sanonda (Jingzhou) Pesticides and Chemicals Co., Ltd.. Please refer to the www.cninfo.com.cn for the detailed content that disclosed
on 29 June 2016. As for the above events about the merger were still waiting for the approval from Annual General Meeting for
execution.
VI. Implementation and Influence of Equity Incentive Plan of the Company
□ Applicable √ Not applicable
There is no equity incentive plan and its implementation in the Company during the Reporting Period.
VII. Significant related-party transactions
1. Related-party transactions concerning routine operation
√ Applicable □ Not applicable
Type
Approve Settleme Simila
of Pricing Transact
Content Proporti d nt r
the principl ion
of the on in transacti Over method Transa
relate e of the amount
Related Relation related- Transact same on line approve of the ction Disclosu Disclosure
d-par related- (RMB
party ship party ion price kind of (RMB d line or related- marke re date index
ty party Ten
transacti transacti Ten not party t price
trans transacti thousan
on ons thousan transacti receiv
actio on d)
d) on able
n
Announcement
No.: 2016-20
and the
Bluestar Bluestar Announcement
(Beijing (Beijing name:
Under
) Equipm ) Announcement
the same Telegrap
Chemic Purc ent Market Chemic 18 Mar. on Expected
ultimate 0.3 100 No hic 0.3
al hase expense price al 2016 Routine
controll transfer
Machine s Machine Related-party
er
ry Co., ry Co., Transactions
Ltd. Ltd. for 2016;
disclosed on
http://www.cnin
fo.com.cn
Beijing Under
Purchas
Guangy the same Telegrap
Purc e of raw Market Market 18 Mar.
uan ultimate 609 800 No hic 609 Ditto
hase material price price 2016
AgroSci controll transfer
s
ences er
19
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Chemic
al Co.,
Ltd.
ADAM
Under
A
the same Sales of Telegrap
Agricult Market Market 18 Mar.
ultimate Sales pesticid 8,739 23,790 No hic 8,739 Ditto
ural price price 2016
controll e transfer
Solution
er
s LTD.
Jiangsu
Under
Anpon
the same Sales of Telegrap
Electroc Market Market 18 Mar.
ultimate Sales pesticid 22 300 No hic 22 Ditto
hemical price price 2016
controll e transfer
Co. Ltd.
er
China
Total -- -- 9,370.3 -- 24,990 -- -- -- -- --
Details about return of
N/A
large-amount sales
Where the Company classifies
and estimates the total amount of The Company expected of the total amount of RMB250 million of the 2016 routine related
routine related-party transactions
transaction with the actual occurred amount of RMB83.703 million that had not exceeded the
for the Reporting Period, explain
the actual implementation during expected limit.
the Reporting Period (if any)
The company’s related transactions with related party shall be carried out in accordance with the
Explain why the transaction price
is greatly different from the principle of voluntary, equality and mutual benefit, fair, and will not harm the interests of the
market price (if applicable)
company.
2. Related-party transactions arising from asset acquisition or sale
□ Applicable √ Not applicable
The Company was not involved in any related-party transactions arising from asset acquisition or sale during the Reporting Period.
3. Related-party transitions with joint investments
□ Applicable √ Not applicable
The Company was not involved in any related-party transaction with joint investments during the Reporting Period.
4. Credits and liabilities with related parties
√ Applicable □ Not applicable
Whether there were any non-current credits liabilities with related parties
□ Yes √ No
No such cases in the Reporting Period.
20
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
5. Other significant related-party transactions
√ Applicable □ Not applicable
1. The parent company of the Group—Jingzhou Sanonda Holdings Co., Ltd.—paid & gained wages and social security through the
Company with a total of RMB148,392.6.
2. Balance of bank deposit of Chemchina Finance Co., Ltd. of the Company at the year-begin was of RMB140,000,000.00,
period-end of the Period was of RMB100,958,989.89, and balance of short-term loan at the period- begin was of RMB0, period-end
was of RMB0; Interest of bank deposit of this year was of RMB958,989.89.
3. In Reporting Period, the 7th floor of the Company’s office building had rented to Jingzhou Sanonda Holdings Co., Ltd. for business
operation in the Reporting Period with the annual rent of RMB120,000.
The website to disclose the interim announcements on significant related-party transactions
Disclosure date of the interim
Name of the interim announcement Website to disclose the interim announcement
announcement
Announcement on Expected Routine
18 Mar. 2016 www.cninfo.com.cn
Related-party Transactions for 2016
VIII. Particulars about the non-operating occupation of funds by the controlling shareholder
and other related parties of the Company
□ Applicable √ Not applicable
The Company was not involved in the non-operating occupation of funds by the controlling shareholder and other related parties
during the Reporting Period.
IX. Particulars about significant contracts and their fulfillment
1. Particulars about trusteeship, contract and lease
(1) Trusteeship
□ Applicable √ Not applicable
There was no any trusteeship of the Company in the Reporting Period.
(2) Contract
□ Applicable √ Not applicable
There was no any contract of the Company in the Reporting Period.
(3) Lease
√ Applicable □ Not applicable
Explanation on the lease
The 7th floor of the Company’s office building had rented to Jingzhou Sanonda Holdings Co., Ltd. for business operation in the
Reporting Period with the annual rent of RMB120,000.
21
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
The lease whose profits reaching more than 10% of the total profits of the Company in the Reporting Period
□ Applicable √ Not applicable
There was no any lease whose profits reaching more than 10% of the total profits of the Company in the Reporting Period.
2. Guarantees provided by the company
√ Applicable □ Not applicable
Unit: RMB’0,000
Guarantees provided by the Company for external parties (excluding those for subsidiaries)
Disclosure
date on Guarante
Actual
relevant Actual e for a
Amount for occurrence date Type of Period of Executed
Guaranteed party announcem guarantee related
guarantee (date of guarantee guarantee or not
ent of amount party or
agreement)
guaranteed not
amount
Guarantees provided by the Company for its subsidiaries
Disclosure
date on Guarante
Actual
relevant Actual e for a
Amount for occurrence date Type of Period of Executed
Guaranteed party announcem guarantee related
guarantee (date of guarantee guarantee or not
ent of amount party or
agreement)
guaranteed not
amount
Hubei Sanonda
18 Mar. Joint liability
Foreign Trading 30,900 18 Mar. 2016 6,400 1 year No Yes
2016 guarantee
Co., Ltd.
Total actual occurred amount
Total guarantee line approved
of guarantee for the
for the subsidiaries during the 30,900 6,400
subsidiaries during the
Reporting Period (B1)
Reporting Period (B2)
Total guarantee line that has
Total actual guarantee balance
been approved for the
30,900 for the subsidiaries at the end 6,400
subsidiaries at the end of the
of the Reporting Period (B4)
Reporting Period (B3)
Guarantees provided by subsidiaries for subsidiaries
Disclosure Guarante
Actual
date on 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 of not
22
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
guaranteed
amount
Total guarantee amount provided by the Company (total of the above-mentioned three kinds of guarantees)
Total guarantee line approved Total actual occurred amount
during the Reporting Period 30,900 of guarantee during the 6,400
(A1+B1+C1) Reporting Period (A2+B2+C2)
Total guarantee line that has Total actual guarantee balance
been approved at the end of the 30,900 at the end of the Reporting 6,400
Reporting Period (A3+B3+C3) Period (A4+B4+C4)
Proportion of total guarantee amount (A4+B4+C4) to the net
3.04%
assets of the Company
Of which:
Amount of debt guarantee provided for the guaranteed party
whose asset-liability ratio is not less than 70% directly or 6,400
indirectly (E)
Total amount of the above three guarantees (D+E+F) 6,400
Notes to the undue guarantee which may burden the related
N/A
discharge duty (if any)
Notes to the external guarantee by violating the established
N/A
procedures (if any)
Explanation on guarantee that adopts complex method
(1) Particulars about illegal external guarantee
□ Applicable √ Not applicable
There was no particular about illegal external guarantee of the Company in the Reporting Period.
3. Other significant contracts
□ Applicable √ Not applicable
There was no other significant contract of the Company in the Reporting Period.
4. Other significant transactions
□ Applicable √ Not applicable
There was no other significant transaction of the Company in the Reporting Period.
X. 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 □ Not applicable
23
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Commitment Time of Term of
Type of commitment Commitment contents Execution
maker commitment commitment
Commitment on share
- - - - -
reform
I. Commitments on avoiding
horizontal competition: 1. except for
the Company proposed conducting
transaction may lead to competition in
domestic trade with Shenzhen
NOPOSION Agrochemical Co., Ltd.
disclosed in the B Shares Offer
Acquisition Report of Hubei Sanonda
CO., Ltd. The Company will take
effective measures to avoid the
Company and its controlling
subsidiaries engaged in the same or
similar business with Hubei Sanonda
CO., Ltd. within the territory.2. If the
Company or its controlling
subsidiaries domestically conduct
The
related business which form
commitments
ADAMA horizontal competition with Hubei
were being
Commitment in the Celsius Sanonda CO., Ltd. in future
carried out and
acquisition report or the B.V.;ADAMA (including related business of the 2013-09-07 2020-09-06
the commitment
report on equity changes Agricultural Company proposed conducting
makers abided
Solutions Ltd. transaction may lead to competition in
by the above
domestic trade with Shenzhen
commitments.
NOPOSION Agrochemical Co., Ltd.
disclosed in the B Shares Offer
Acquisition Report of Hubei Sanonda
CO., Ltd.) The Company will
according to the securities laws and
regulations and industry policy within
7 years or when the management
think the condition is ripe to actively
take steps, gradually eliminate the
competition, the concrete measures
including but not limited to the
following one or more: fight for
internal assets reconstruction,
(including putting the business into
Hubei Sanonda CO., Ltd. or operated
through Hubei Sanonda CO., Ltd. ) to
24
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
adjust the industrial plan and business
structure, to transform technology and
to upgrade products, to divide the
market so as to make each corporation
differ in the products and its ultimate
users, thus to avoid and eliminate the
current domestic horizontal
competition between the Company’s
controlling subsidiaries and Sanonda.
II. Commitments on maintaining the
Company’s operation independence
and specify the related transaction: 1.
After the complement of the tender
offer, Sanonda will continue to
maintain complete purchase,
production and sales system, and to
gain the independent intellectual
property. The Company and its direct
or indirect controlling shareholders
and Sanonda of which the personnel,
assets, finance, business and
institutions will be completely
separated, and at the same time
The
maintain the operation ability of
commitments
ADAMA Sanonda that independently face to
were being
Celsius the China agrochemical industry
carried out and
B.V.;ADAMA market. 2. The Company will avoid 2013-09-07 9999-12-31
the commitment
Agricultural and reduce the related transactions
makers abided
Solutions Ltd. with Sanonda according to the
by the above
requirements stipulated by the laws,
commitments.
regulations and other normative
documents; but for those related
transactions that are inevitable or
occur with reasonable cause, will have
to obey the just, fair and open market
principles. And to sign the agreement
according to the law and to carry out
legal program, and to make sure not to
harm the legal interest of Sanonda and
other shareholders by related
transaction according to the Articles
of Association of Sanonda, the
relevant system about related
transaction and to conduct the duty of
25
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
information disclosure as well as the
approval process which stipulated by
the relevant regulations."
I. Commitments on avoiding
horizontal competition: 1. The
business of the Company’s
subsidiaries-- Jiangsu Anpon
Electrochemical Co., Ltd., Anhui
Petroleum Chemical Group Co., Ltd.,
Shandong Dacheng Agrochemical
Co., Ltd. and Jiamusi Heilong
Agrochemicals Co., Ltd., and Hunan
Haohua Chemical Co., Ltd. and its
subsidiary had the same or similar
situations with the main business of
Sanonda, and aimed at the domestic
horizontal competition, the Company
committed to gradually eliminate such
kind of horizontal competition in the
future and to fight for the internal
The
assets reconstruction, to adjust the
commitments
industrial plan and business structure,
were being
China National to transform technology and to
carried out and
Chemical upgrade products, to divide the market 2013-09-07 2020-09-06
the commitment
Corporation so as to make each corporation differ
maker abided by
in the products and its ultimate users
the above
according to the securities laws and
commitments.
regulations and industry policy within
7 years, thus to eliminate the current
domestic horizontal competition
between the Company’s controlling
subsidiaries and Sanonda. 2.
Excepting the competition situation
disclosed in the offer acquisition
report, the Company take effective
measures to avoid the Company and
its controlling subsidiaries ( excepting
Commitments respectively made in
acquisition report by Celsius Property
B.V. and MAI )’ new increased
business engaged in the same or
similar business with Hubei Sanonda
CO., Ltd. within the territory in
future. 3. If the Company or its
26
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
controlling subsidiaries (excepting
Commitments respectively made in
acquisition report by Celsius Property
B.V. and MAI) domestically conduct
related business which form
horizontal competition with Hubei
Sanonda CO., Ltd. in future, the
Company will actively take steps,
gradually eliminate the competition,
the concrete measures including but
not limited to fight for internal assets
reconstruction, (including putting the
business into Hubei Sanonda CO.,
Ltd. or operated through Hubei
Sanonda CO., Ltd.) to adjust the
industrial plan and business structure,
to transform technology and to
upgrade products, to divide the market
so as to make each corporation differ
in the products and its ultimate users,
thus to avoid and eliminate the current
domestic horizontal competition
between the Company’s controlling
subsidiaries and Sanonda.
II. Commitments on maintaining the
Company’s operation independence
and specify the related transaction: 1.
After the complement of the tender
offer, Sanonda will continue to
maintain complete purchase,
production and sales system, and to The
gain the independent intellectual commitments
property. The Company and its direct were being
China National
or indirect controlling shareholders carried out and
Chemical 2013-09-07 9999-12-31
and Sanonda of which the personnel, the commitment
Corporation
assets, finance, business and maker abided by
institutions will be completely the above
separated, and at the same time commitments.
maintain the operation ability of
Sanonda that independently face to
the China agrochemical industry
market. 2. The Company will avoid
and reduce the related transactions
with Sanonda according to the
27
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
requirements stipulated by the laws,
regulations and other normative
documents; but for those related
transactions that are inevitable or
occur with reasonable cause, will have
to obey the just, fair and open market
principles. And to sign the agreement
according to the law and to carry out
legal program, and to make sure not to
harm the legal interest of Sanonda and
other shareholders by related
transaction according to the Articles
of Association of Sanonda, the
relevant system about related
transaction and to conduct the duty of
information disclosure as well as the
approval process which stipulated by
the relevant regulations.
Commitments made at
the time of assets
reorganization
Commitments made in
the initial public
offering or refinancing
Mr. Jiang
Chenggang had
completed the
“1. The Supervisory Board Chairman
execution of the
of the Company Mr. Jiang Chenggang
commitments
planed to purchase the shares of the
while owning to
Company of over 5000 shares through
the suspension
the secondary market by the
of the
Other commitments Mr. Jiang self-rising funds in the future 6
Company’s
made to minority Chenggang; Mr. months (2015.7.13-2016.1.12); 2. The 13 Jul. 2015 2016-01-12
shares from 5
shareholders Li Zhongxi Board Secretary Mr. Li Zhongxi
August 2015 to
planed to purchase the shares of the
the disclosure
Company of over 5000 shares through
date, Mr. Li
the secondary market by the
Zhongxi could
self-rising funds in the future 6
not execute the
months (2015.7.13-2016.1.12)”.
commitments on
increasing the
shareholding.
Executed timely or not? Yes
28
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
If the commitments
failed to complete the
execution when expired,
should specifically
Not applicable.
explain the reasons of
unfulfillment and the net
stage of the working
plan
XI. Particulars about engagement and disengagement of CPAs firm
Whether the semi-annual financial report had been audited?
□ Yes √ No
This semi-annual report is un-audited.
XII. Punishment and Rectification
□ Applicable √ Not applicable
There was no any punishment and rectification of the Company in the Reporting Period.
XIII. Reveal of the delisting risks of illegal or violation
□ Applicable √ Not applicable
There was no any delisting risk of illegal or violation of the Company in the Reporting Period.
XIV. Explanation about other significant matters
√ Applicable □ Not applicable
Owning to the Company was planning the significant events reorganization project, the Company’s stocks delist since the market
opening on 5 Aug. 2015. During the Reporting Period, the details of the progress of the reorganization events was on the
Announcement on the Progress of the Significant Assets Reorganization all previously disclosed.
XV. Related situation of the corporate bonds
Whether there was any public issuance of the corporate bonds which listed on the securities exchange that had not due on the
approved presentation date of the half-annual report or failed to pay in full amount.
No
29
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Section VI. Change in Shares & Shareholders
I. Changes in share capital
Unit: Share
Before this change Increase/decrease (+, -) After the change
Capitalizat
Issuance ion of
Bonus Proportio
Amount Proportion of new public Other Subtotal Amount
share n
shares reserve
fund
I. Shares subject to trading
20,531 0.00% 20,531 0.00%
moratorium
3. Other domestic shares 20,531 0.00% 20,531 0.00%
Shares held by
20,531 0.00% 20,531 0.00%
domestic individuals
II. Shares not subject to 593,902,6 593,902,6
100.00% 100.00%
trading moratorium 89 89
1. Ordinary shares 363,902,6 363,902,6
61.27% 61.27%
denominated in RMB 89 89
2. Domestically listed 230,000,0 230,000,0
38.73% 38.73%
foreign shares 00 00
593,923,2 593,923,2
III. Total of shares 100.00% 100.00%
20 20
Reasons for changes in share
□ Applicable √ Not applicable
Approval of share changes
□ Applicable √ Not applicable
Transfers in share changes
□ Applicable √ Not applicable
Influence of share changes towards financial indexes in the latest year and latest period such as basic EPS and diluted EPS, and net
assets per share belonging to shareholder with ordinary share
□ Applicable √ Not applicable
Other contents that the Company thinks necessary or is asked by securities regulators to be disclosed
□ Applicable √ Not applicable
Explanation of the changes in the sum of the shares and the structure of the shareholders and the structure of the assets as well as the
liabilities of the Company
□ Applicable √ Not applicable
30
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
II. Number of shareholders and shareholding
Unit: Share
Total number of preferred
Total number of common shareholders that had restored
63,170 (of which the Share A
shareholders at the end of the the voting right at the end of 0
shareholders were of 44,474)
Reporting Period the Reporting Period (if any)
(note 8)
Shareholding of common shareholders holding more than 5% shares or the top 10 of common shareholders
Increase Number Pledged or frozen shares
Number of Number of
and of shares
shareholding shares held
Holding decrease of held
Name of Nature of at the end of not subject
percentage shares subject to Status of Number of
shareholder shareholder the to trading
(%) during trading shares shares
Reporting moratoriu
Reporting moratoriu
Period m
Period m
Jingzhou Sanonda
State-owned legal
Shareholding Co., 20.15% 119,687,202 - - - - -
person
Ltd.
ADAMA Celsius Foreign legal
10.60% 62,950,659 - - - - -
B.V. person
Domestic natural
Chen Lichun 1.14% 6,790,954 - - - - -
person
State-owned Assets
Administration
State 0.70% 4,169,266 - - - - -
Bureau of Qichun
County
Domestic natural
Jiang Jian 0.61% 3,595,123 - - - - -
person
China Securities
Finance Corporation Other 0.47% 2,817,300 - - - - -
Limited
Foreign legal
NORGES BANK 0.44% 2,634,504 - - - - -
person
ICBC - Lion
Medium-and-small-
cap Selected Stock Other 0.42% 2,480,384 - - - - -
Securities
Investment Fund
Bank of China
Other 0.38% 2,252,947 - - - - -
Limited －
31
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Manulife Teda Jili
Debt Securities
Investment Funds
ICBC - JT Tianfu
Reform New Power
Flexible
Other 0.36% 2,160,078 - - - - -
Configuration of
Hybrid Securities
Investment Funds
Strategic investors or the general legal
person due to the placement of new
Not applicable
shares become the top 10 shareholders
(if any) (note 3)
Jingzhou Sanonda Shareholding Co., Ltd. and ADAMA Celsius B.V. are related parties,
and under the same control of China National Chemical Agrochemical Corporation, and
Explanation on associated relationship are acting-in-concert parties as prescribed in the Administrative Methods for Acquisition
or/and persons of Listed Companies. It is unknown whether the other shareholders are related parties or
acting-in-concert parties as prescribed in the Administrative Methods for Acquisition of
Listed Companies.
Particulars about shares held by top 10 common shareholders not subject to trading moratorium
Number of shares held not subject to trading moratorium Type of share
Name of shareholder
at the end of the Period Type of share Number
Jingzhou Sanonda Shareholding Co., RMB ordinary 119,687,20
119,687,202
Ltd. share 2
Domestically
ADAMA Celsius B.V. 62,950,659 listed foreign 62,950,659
share
RMB ordinary
Chen Lichun 6,790,954 6,790,954
share
State-owned Assets Administration RMB ordinary
4,169,266 4,169,266
Bureau of Qichun County share
RMB ordinary
Jiang Jian 3,595,123 3,595,123
share
China Securities Finance Corporation RMB ordinary
2,817,300 2,817,300
Limited share
Domestically
NORGES BANK 2,634,504 listed foreign 2,634,504
share
ICBC - Lion Medium-and-small-Cap RMB ordinary
2,480,384 2,480,384
Selected Stock Securities Investment share
32
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Fund
Bank of China Limited － Manulife
RMB ordinary
Teda Jili Debt Securities Investment 2,252,947 2,252,947
share
Funds
ICBC - JT Tianfu Reform New Power
RMB ordinary
Flexible Configuration of Hybrid 2,160,078 2,160,078
share
Securities Investment Funds
Explanation on associated relationship STATE-OWNED ASSETS ADMINISTRATION BUREAU OF QICHUN COUNTY
among the top ten shareholders of held the shares of the Company on behalf of the country. Jingzhou Sanonda
tradable share not subject to trading Shareholding Co., Ltd. and ADAMA Celsius B.V. are related parties, and under the same
moratorium, as well as among the top control of China National Chemical Agrochemical Corporation, and are
ten shareholders of tradable share not acting-in-concert parties as prescribed in the Administrative Methods for Acquisition of
subject to trading moratorium and top Listed Companies. It is unknown whether the other shareholders are related parties or
ten shareholders, or explanation on acting-in-concert parties as prescribed in the Administrative Methods for Acquisition of
acting-in-concert Listed Companies.
1. Shareholder Chen Lichun held 6,309,732 shares of the Company through a credit
collateral securities trading account and held shares of the Company through a common
Particular about shareholder participate
securities account, who thus held 6,790,954 shares of the Company in total. 2.
in the securities lending and borrowing
Shareholder Jiang Jian held 3,415,123 shares of the Company through a credit collateral
business (if any) (note 4)
securities trading account and held 180,000 shares of the Company through a common
securities account, who thus held 3,595,123 shares of the Company in total.
Did any top 10 common shareholders or the top 10 common shareholders not subject to trading moratorium of the Company carry
out an agreed buy-back in the Reporting Period?
□ Yes √ No
The top 10 common shareholders or the top 10 common shareholders not subject to trading moratorium of the Company had not
carried out any agreed buy-back in the Reporting Period.
III. Change of the controlling shareholder or the actual controller
Change of the controlling shareholder in the Reporting Period
□ Applicable √ Not applicable
There was no any change of the controlling shareholder of the Company in the Reporting Period.
Change of the actual controller in the Reporting Period
□ Applicable √ Not applicable
There was no any change of the actual controller of the Company in the Reporting Period.
IV. Particulars on shareholding increase scheme during the Reporting Period proposed or
implemented by the shareholders and act-in-concert persons
□ Applicable √ Not applicable
Within the scope known to the Company, there was no any shareholding increase scheme during the Reporting Period proposed or
implemented by the shareholders and act-in-concert persons.
33
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Section VII. Preferred Shares
□ Applicable √ Not applicable
There was no any preferred share of the Company during the Reporting Period.
34
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Section VIII. Directors, Supervisors, Senior Management Staffs
I. Changes in shareholding of Directors, Supervisors and Senior Management Staffs
□ Applicable √ Not applicable
There was no change in shareholding of Directors, Supervisors and Senior Management staffs, for the specific information please
refer to the 2015 Annual Report.
II. Changes in Directors, Supervisors and Senior Management Staffs
□ Applicable √ Not applicable
There was no change in Directors, Supervisors and Senior Management staffs, for the specific information please refer to the 2015
Annual Report.
35
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
IX. Financial Report
I. Audit report
Has this semi-annual report been audited?
□ Yes √ No
The semi-annual financial report has not been audited.
II. Financial statements
Currency unit for the statements in the notes to these financial statements: RMB
1. Consolidated balance sheet
Prepared by Hubei Sanonda Co., Ltd.
30 June 2016
Unit: RMB
Item Closing balance Opening balance
Current Assets:
Monetary funds 447,050,215.44 406,098,208.72
Settlement reserves
Intra-group lendings
Financial assets measured by fair
value with the changes be included in
the current gains and losses
Derivative financial assets
Notes receivable 14,785,699.71 34,433,010.97
Accounts receivable 400,197,459.56 180,450,531.93
Accounts paid in advance 28,224,389.49 20,413,365.68
Premiums receivable
Reinsurance premiums receivable
Receivable reinsurance contract
reserves
Interest receivable
Dividend receivable
Other accounts receivable 14,228,948.02 9,847,451.35
Financial assets purchased under
36
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
agreements to resell
Inventories 190,399,721.64 287,824,164.30
Assets divided available for sale
Non-current assets due within 1 year
Other current assets 11,406,283.03 14,685,220.14
Total current assets 1,106,292,716.89 953,751,953.09
Non-current assets:
Loans by mandate and advances
granted
Available-for-sale financial assets 9,153,782.63 9,153,782.63
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment
Investing property 4,879,635.66 5,036,745.54
Fixed assets 1,573,495,793.14 1,684,051,200.09
Construction in progress 171,601,549.18 143,683,545.15
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 160,317,671.35 165,569,924.44
R&D expense
Goodwill
Long-term deferred expenses
Deferred income tax assets 13,052,863.55 11,021,018.38
Other non-current assets 5,000,000.00 5,000,000.00
Total of non-current assets 1,937,501,295.51 2,023,516,216.23
Total assets 3,043,794,012.40 2,977,268,169.32
Current liabilities:
Short-term borrowings 0.00 20,000,000.00
Borrowings from Central Bank
Customer bank deposits and due to
banks and other financial institutions
Intra-group borrowings
Financial liabilities measured by fair
37
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
value with the changes be included in
the current gains and losses
Derivative financial liabilities
Notes payable 30,000,000.00 0.00
Accounts payable 144,021,775.40 134,357,481.77
Accounts received in advance 8,077,224.97 26,666,138.22
Financial assets sold for repurchase
Handling charges and commissions
payable
Employee’s compensation payable 14,552,544.21 30,308,341.73
Tax payable 22,141,868.93 26,858,466.27
Interest payable 753,198.89 1,123,849.31
Dividend payable 250,000.00 250,000.00
Other accounts payable 31,950,298.26 25,511,333.81
Reinsurance premiums payable
Insurance contract reserves
Payables for acting trading of
securities
Payables for acting underwriting of
securities
Liabilities divided available for sale
Non-current liabilities due within 1
254,000,000.00 244,000,000.00
year
Other current liabilities
Total current liabilities 505,746,910.66 509,075,611.11
Non-current liabilities:
Long-term borrowings 290,090,000.00 343,590,000.00
Bonds payable
Of which: preferred shares
Perpetual capital securities
Long-term payables 0.00 650,000.00
Long-term payroll payables
Specific payables
Estimated liabilities
Deferred income 24,568,488.17 26,570,088.61
38
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Deferred income tax liabilities
Other non-current liabilities 120,800,000.00
Total non-current liabilities 435,458,488.17 370,810,088.61
Total liabilities 941,205,398.83 879,885,699.72
Owners’ equity
Share capital 593,923,220.00 593,923,220.00
Other equity instruments
Of which: preferred shares
Perpetual capital securities
Capital reserves 263,063,461.97 263,063,461.97
Less: Treasury stock
Other comprehensive income
Specific reserves 26,095,528.12 22,848,859.15
Surplus reserves 190,699,248.11 190,699,248.11
Provisions for general risks
Retained profits 1,028,807,155.37 1,026,847,680.37
Total equity attributable to owners of
2,102,588,613.57 2,097,382,469.60
the Company
Minority interests
Total owners’ equity 2,102,588,613.57 2,097,382,469.60
Total liabilities and owners’ equity 3,043,794,012.40 2,977,268,169.32
Legal representative: An Liru Person-in-charge of the accounting work: Liu Anping
Chief of the accounting division: Tu Zhiwen
2. Balance sheet of the Company
Unit: RMB
Item Closing balance Opening balance
Current Assets:
Monetary funds 358,933,954.44 378,450,204.94
Financial assets measured by fair
value with the changes be included in
the current gains and losses
Derivative financial assets
Notes receivable 12,665,699.71 32,331,010.97
39
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Accounts receivable 618,514,974.18 352,274,073.40
Accounts paid in advance 24,421,745.06 19,218,775.50
Interest receivable
Dividend receivable
Other accounts receivable 745,265.13 1,535,805.55
Inventories 178,346,271.24 275,057,647.64
Assets divided available for sale
Non-current assets due within 1 year
Other current assets 0.00 387,633.86
Total current assets 1,193,627,909.76 1,059,255,151.86
Non-current assets:
Available-for-sale financial assets 9,153,782.63 9,153,782.63
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investment 55,526,635.41 55,526,635.41
Investing property 4,879,635.66 5,036,745.54
Fixed assets 1,440,503,812.01 1,543,099,613.97
Construction in progress 166,343,880.83 139,297,997.97
Engineering materials
Disposal of fixed assets
Production biological assets
Oil-gas assets
Intangible assets 148,108,007.83 150,253,232.11
R&D expense
Goodwill
Long-term deferred expenses
Deferred income tax assets 9,156,073.08 8,855,180.95
Other non-current assets 5,000,000.00 5,000,000.00
Total of non-current assets 1,838,671,827.45 1,916,223,188.58
Total assets 3,032,299,737.21 2,975,478,340.44
Current liabilities:
Short-term borrowings 0.00 20,000,000.00
Financial liabilities measured by fair
value with the changes be included in
the current gains and losses
40
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Derivative financial liabilities
Notes payable 30,000,000.00 0.00
Accounts payable 133,698,895.59 129,017,385.70
Accounts received in advance 5,958,025.00 24,885,411.49
Employee’s compensation payable 13,102,544.21 28,311,263.93
Tax payable 16,348,734.19 21,773,193.24
Interest payable 753,198.89 1,123,849.31
Dividend payable 250,000.00 250,000.00
Other accounts payable 30,720,924.29 23,536,806.94
Liabilities divided available for sale
Non-current liabilities due within 1
254,000,000.00 244,000,000.00
year
Other current liabilities
Total current liabilities 484,832,322.17 492,897,910.61
Non-current liabilities:
Long-term borrowings 290,090,000.00 343,590,000.00
Bonds payable
Of which: preferred shares
Perpetual capital securities
Long-term payables 0.00 650,000.00
Long-term payroll payables
Specific payables
Estimated liabilities
Deferred income 18,176,821.48 19,686,755.26
Deferred income tax liabilities
Other non-current liabilities 120,800,000.00
Total non-current liabilities 429,066,821.48 363,926,755.26
Total liabilities 913,899,143.65 856,824,665.87
Owners’ equity:
Share capital 593,923,220.00 593,923,220.00
Other equity instruments
Of which: preferred shares
Perpetual capital securities
Capital reserves 263,799,837.18 263,799,837.18
41
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Less: Treasury stock
Other comprehensive income
Specific reserves 21,126,415.81 17,879,746.84
Surplus reserves 190,699,248.11 190,699,248.11
Retained profits 1,048,851,872.46 1,052,351,622.44
Total owners’ equity 2,118,400,593.56 2,118,653,674.57
Total liabilities and owners’ equity 3,032,299,737.21 2,975,478,340.44
3. Consolidated income statement
Unit: RMB
Item Jan.-Jun. 2016 Jan.-Jun 2015
I. Total operating revenues 1,005,697,157.50 1,235,251,682.81
Including: Sales income 1,005,697,157.50 1,235,251,682.81
Interest income
Premium income
Handling charge and commission
income
II. Total operating cost 996,545,598.31 1,077,630,542.79
Including: Cost of sales 859,188,101.99 941,767,629.71
Interest expenses
Handling charge and commission
expenses
Surrenders
Net claims paid
Net amount withdrawn for the
insurance contract reserve
Expenditure on policy dividends
Reinsurance premium
Taxes and associate charges 3,853,275.19 8,887,120.84
Selling and distribution expenses 45,242,941.76 36,541,875.51
Administrative expenses 69,143,939.29 48,923,908.29
Financial expenses 3,943,997.08 13,893,016.49
Asset impairment loss 15,173,343.00 27,616,991.95
Add: Gain/(loss) from change in fair
value (“-” means loss)
42
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Gain/(loss) from investment (“-”
75,504.00
means loss)
Including: share of profits in associates
and joint ventures
Foreign exchange gains (“-” means loss)
III. Business profit (“-” means loss) 9,227,063.19 157,621,140.02
Add: non-operating income 13,882,859.98 2,937,379.44
Of which: gains from non-current
10,214,203.76
asset disposal
Less: non-operating expense 3,392.65 14,810.07
Of which: losses from non-current
3,392.65 7,689.72
asset disposal
IV. Total profit (“-” means loss) 23,106,530.52 160,543,709.39
Less: Income tax expense 6,298,975.02 42,899,361.41
V. Net profit (“-” means loss) 16,807,555.50 117,644,347.98
Attributable to owners of the
16,807,555.50 117,678,175.59
Company
Minority shareholders’ income -33,827.61
VI. After-tax net amount of other
comprehensive incomes
After-tax net amount of other
comprehensive incomes attributable to
owners of the Company
(I) Other comprehensive incomes
that will not be reclassified into gains and
losses
1. Changes in net liabilities or
assets with a defined benefit plan upon
re-measurement
2. Enjoyable shares in other
comprehensive incomes in investees that
cannot be reclassified into gains and
losses under the equity method
(II) Other comprehensive incomes
that will be reclassified into gains and
losses
1. Enjoyable shares in other
comprehensive incomes in investees that
will be reclassified into gains and losses
43
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
under the equity method
2. Gains and losses on fair
value changes of available-for-sale
financial assets
3. Gains and losses on
reclassifying held-to-maturity
investments into available-for-sale
financial assets
4. Effective hedging gains and
losses on cash flows
5. Foreign-currency financial
statement translation difference
6. Other
After-tax net amount of other
comprehensive incomes attributable to
minority shareholders
VII. Total comprehensive incomes 16,807,555.50 117,644,347.98
Attributable to owners of the
16,807,555.50 117,678,175.59
Company
Attributable to minority
-33,827.61
shareholders
VIII. Earnings per share
(I) Basic earnings per share 0.0283 0.1981
(II) Diluted earnings per share 0.0283 0.1981
For the business combination under the same control of the current period, the net profits realized before the combination of the
combined party were of RMB000 and the net profits realized of the combined party of the last period were of RMB000.
Legal representative: An Liru Person-in-charge of the accounting work: Liu Anping
Chief of the accounting division: Tu Zhiwen
4. Income statement of the Company
Unit: RMB
Item Jan.-Jun. 2016 Jan.-Jun 2015
I. Total sales 996,889,002.00 1,259,980,812.07
Less: cost of sales 856,424,336.31 971,392,111.37
Business taxes and surcharges 3,825,486.63 8,814,691.54
Distribution expenses 42,430,625.01 35,037,747.08
44
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Administrative expenses 66,110,552.46 45,633,925.73
Financial costs 7,357,642.37 14,472,806.78
Impairment loss 7,432,233.18 22,368,460.63
Add: gain/(loss) from change in
fair value (“-” means loss)
Gain/(loss) from investment (“-”
75,504.00
means loss)
Of which: income form investment
on associates and joint ventures
II. Business profit (“-” means loss) 13,383,630.04 162,261,068.94
Add: non-business income 2,989,711.67 2,445,712.78
Of which: gains from non-current
22,722.11
asset disposal
Less: non-business expense 3,392.65 14,810.07
Of which: losses from non-current
3,392.65 7,689.72
asset disposal
III. Total profit (“-” means loss) 16,369,949.06 164,691,971.65
Less: income tax expense 5,021,618.54 43,289,877.98
IV. Net profit (“-” means loss) 11,348,330.52 121,402,093.67
V. After-tax net amount of other
comprehensive incomes
(I) Other comprehensive
incomes that will not be reclassified
into gains and losses
1. Changes in net liabilities or
assets with a defined benefit plan upon
re-measurement
2. Enjoyable shares in other
comprehensive incomes in investees
that cannot be reclassified into gains
and losses under the equity method
(II) Other comprehensive
incomes that will be reclassified into
gains and losses
1. Enjoyable shares in other
comprehensive incomes in investees
that will be reclassified into gains and
losses under the equity method
45
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
2. Gains and losses on fair
value changes of available-for-sale
financial assets
3. Gains and losses on
reclassifying held-to-maturity
investments into available-for-sale
financial assets
4. Effective hedging gains
and losses on cash flows
5. Foreign-currency financial
statement translation difference
6. Other
VI. Total comprehensive incomes 11,348,330.52 121,402,093.67
VII. Earnings per share
(I) Basic earnings per share
(II) Diluted earnings per share
5. Consolidated cash flow statement
Unit: RMB
Item Jan.-Jun. 2016 Jan.-Jun 2015
I. Cash flows from operating activities:
Cash received from sale of
635,526,388.02 869,451,160.69
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 dispose of the
financial assets measured by fair value
with the changes be included in the
46
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
current gains and losses
Cash received from interest,
handling charges and commissions
Net increase of intra-group
borrowings
Net increase of funds in repurchase
business
Tax refunds received 12,746,757.98 32,330,521.58
Other cash received relating to
4,535,590.18 10,268,808.84
operating activities
Subtotal of cash inflows from operating
652,808,736.18 912,050,491.11
activities
Cash paid for goods and services 416,655,530.64 673,264,052.99
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 101,289,757.17 114,545,148.43
Various taxes paid 42,706,274.95 110,521,878.34
Other cash payment relating to
45,438,254.80 32,996,160.73
operating activities
Subtotal of cash outflows from
606,089,817.56 931,327,240.49
operating activities
Net cash flows from operating activities 46,718,918.62 -19,276,749.38
II. Cash flows from investing activities:
Cash received from withdrawal of
investments
Cash received from return on
75,504.00
investments
Net cash received from disposal of
fixed assets, intangible assets and other 4,021,964.00
long-term assets
47
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Net cash received from disposal of
subsidiaries or other business units
Other cash received relating to
investing activities
Subtotal of cash inflows from investing
4,097,468.00
activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 39,877,320.86 152,808,985.39
assets
Cash paid for investment
Net increase of pledged loans
Net cash paid to acquire
subsidiaries and other business units
Other cash payments relating to
investing activities
Subtotal of cash outflows from
39,877,320.86 152,808,985.39
investing activities
Net cash flows from investing activities -35,779,852.86 -152,808,985.39
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Including: Cash received from
minority shareholder investments by
subsidiaries
Cash received from borrowings 309,340,800.00
Cash received from issuance of
bonds
Other cash received relating to
120,800,000.00
financing activities
Subtotal of cash inflows from financing
120,800,000.00 309,340,800.00
activities
Repayment of borrowings 63,500,000.00 50,500,000.00
Cash paid for interest expenses and
28,826,083.17 76,293,126.69
distribution of dividends or profit
Including: dividends or profit paid
by subsidiaries to minority shareholders
Other cash payments relating to 9,000,000.00 1,500,000.00
48
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
financing activities
Sub-total of cash outflows from
101,326,083.17 128,293,126.69
financing activities
Net cash flows from financing activities 19,473,916.83 181,047,673.31
IV. Effect of foreign exchange rate
1,539,024.13 37,417.10
changes on cash and cash equivalents
V. Net increase in cash and cash
31,952,006.72 8,999,355.64
equivalents
Add: Opening balance of cash and
406,098,208.72 418,847,736.46
cash equivalents
VI. Closing balance of cash and cash
438,050,215.44 427,847,092.10
equivalents
6. Cash flow statement of the Company
Unit: RMB
Item Jan.-Jun. 2016 Jan.-Jun 2015
I. Cash flows from operating activities:
Cash received from sale of
539,504,213.22 846,655,883.96
commodities and rendering of service
Tax refunds received 168,260.60 16,386,842.52
Other cash received relating to
5,693,015.46 10,191,599.35
operating activities
Subtotal of cash inflows from operating
545,365,489.28 873,234,325.83
activities
Cash paid for goods and services 380,402,622.34 592,571,978.73
Cash paid to and for employees 97,588,936.88 105,873,091.71
Various taxes paid 36,133,647.98 107,107,308.86
Other cash payment relating to
40,373,743.83 29,470,327.61
operating activities
Subtotal of cash outflows from
554,498,951.03 835,022,706.91
operating activities
Net cash flows from operating activities -9,133,461.75 38,211,618.92
II. Cash flows from investing activities:
Cash received from retraction of
investments
Cash received from return on
75,504.00
investments
49
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Net cash received from disposal of
fixed assets, intangible assets and other 221,964.00
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 investing
297,468.00
activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 39,164,697.86 152,808,985.39
assets
Cash paid for investment
Net cash paid to acquire
subsidiaries and other business units
Other cash payments relating to
investing activities
Subtotal of cash outflows from
39,164,697.86 152,808,985.39
investing activities
Net cash flows from investing activities -38,867,229.86 -152,808,985.39
III. Cash Flows from Financing
Activities:
Cash received from capital
contributions
Cash received from borrowings 291,000,000.00
Cash received from issuance of
bonds
Other cash received relating to
120,800,000.00
financing activities
Subtotal of cash inflows from financing
120,800,000.00 291,000,000.00
activities
Repayment of borrowings 63,500,000.00 50,500,000.00
Cash paid for interest expenses
28,826,083.17 76,293,126.69
and distribution of dividends or profit
Other cash payments relating to
9,000,000.00 1,500,000.00
financing activities
Sub-total of cash outflows from
101,326,083.17 128,293,126.69
financing activities
50
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Net cash flows from financing activities 19,473,916.83 162,706,873.31
IV. Effect of foreign exchange rate
10,524.28 -278,150.43
changes on cash and cash equivalents
V. Net increase in cash and cash
-28,516,250.50 47,831,356.41
equivalents
Add: Opening balance of cash and
378,450,204.94 344,750,284.42
cash equivalents
VI. Closing balance of cash and cash
349,933,954.44 392,581,640.83
equivalents
7. Consolidated Statement of Changes in Owners’ Equity
January-June 2016
Unit: RMB
Jan.-Jun. 2016
Equity attributable to owners of the Company
Other equity
instruments
Perpet Other Minorit Total
Item Less: General
Share Capital compre Specific Surplus Retaine y owners’
ual
Prefer treasury risk
capital capita reserve hensive reserve reserve d profit interests equity
red Other stock reserve
l income
shares
securi
ties
I. Balance at the 593,92 1,026,8 2,097,3
263,063 22,848, 190,699
end of the 3,220. 47,680. 82,469.
,461.97 859.15 ,248.11
previous year 00 37 60
Add: change of
accounting policy
Correction of
errors in previous
periods
Business
combination under
the same control
Other
593,92 1,026,8 2,097,3
II. Balance at the 263,063 22,848, 190,699
3,220. 47,680. 82,469.
period-begin ,461.97 859.15 ,248.11
00 37 60
51
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
III. Increase/
decrease in the 3,246,6 1,959,4 5,206,1
period (“-” means 68.97 75.00 43.97
decrease)
(I) Total amount
of the 16,807, 16,807,
comprehensive 555.50 555.50
income
(II) Capital paid
in and reduced by
owners
1. Common shares
invested by the
shareholders
2. Capital invested
by the owners of
other equity
instruments
3. Amounts of
share-based
payments
recognized in
owners’ equity
4. Others
(III) Profit -14,848, -14,848,
distribution 080.50 080.50
1. Appropriations
to surplus reserves
2. Appropriations
to general risk
provisions
3. Appropriations
-14,848, -14,848,
to owners (or
080.50 080.50
shareholders)
4. Other
(IV) Internal
carry-forward of
owners’ equity
1. New increase of
capital (or share
52
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
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
(V) Specific 3,246,6 3,246,6
reserve 68.97 68.97
1. Withdrawn for 4,403,5 4,403,5
the period 80.42 80.42
2. Used in the 1,156,9 1,156,9
period 11.45 11.45
(VI) Other
593,92 1,028,8 2,102,5
IV. Closing 263,063 26,095, 190,699
3,220. 07,155. 88,613.
balance ,461.97 528.12 ,248.11
00 37 57
January-June 2015
Unit: RMB
Jan.-Jun. 2015
Equity attributable to owners of the Company
Other equity
instruments
Minorit
Other Total
Item Perpet y
Less: General
Share ual Capital compre Specific Surplus Retaine owners’
treasury risk interest
Prefer equity
capital capita reserve hensive reserve reserve d profit
red stock reserve s
Other
l income
shares
securi
ties
I. Balance at the 593,92 2,007,3
263,184 15,425, 178,048 957,050 -235,71
end of the 3,220. 95,433.
,043.66 099.43 ,385.86 ,401.65 6.61
previous year 00 99
Add: change of
accounting policy
Correction of
53
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
errors in previous
periods
Business
combination under
the same control
Other
593,92 2,007,3
II. Balance at the 263,184 15,425, 178,048 957,050 -235,71
3,220. 95,433.
period-begin ,043.66 099.43 ,385.86 ,401.65 6.61
00 99
III. Increase/
decrease in the 5,198,7 58,285, -33,827 63,450,
period (“-” means 34.41 853.59 .61 760.39
decrease)
(I) Total amount
of the 117,678 -33,827 117,644
comprehensive ,175.59 .61 ,347.98
income
(II) Capital paid
in and reduced by
owners
1. Common shares
invested by the
shareholders
2. Capital invested
by the owners of
other equity
instruments
3. Amounts of
share-based
payments
recognized in
owners’ equity
4. Others
(III) Profit -59,392, -59,392,
distribution 322.00 322.00
1. Appropriations
to surplus reserves
2. Appropriations
to general risk
provisions
54
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
3. Appropriations
-59,392, -59,392,
to owners (or
322.00 322.00
shareholders)
4. Other
(IV) Internal
carry-forward of
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
(V) Specific 5,198,7 5,198,7
reserve 34.41 34.41
1. Withdrawn for 5,396,8 5,396,8
the period 47.50 47.50
2. Used in the 198,113 198,113
period .09 .09
(VI) Other
593,92 1,015,3 2,070,8
IV. Closing 263,184 20,623, 178,048 -269,54
3,220. 36,255. 46,194.
balance ,043.66 833.84 ,385.86 4.22
00 24 38
8. Statement of changes in owners’ equity of the Company
January-June 2016
Unit: RMB
Jan.-Jun. 2016
Other equity instruments Other
Less: Total
Item Share Capital comprehe Specific Surplus Retaine
Perpetu
Preferre treasury owners’
capital al Other reserve nsive reserve reserve d profit
d shares stock equity
capital income
55
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
securiti
es
I. Balance at the 1,052,3
593,923, 263,799,8 17,879,74 190,699,2 2,118,653
end of the previous 51,622.
220.00 37.18 6.84 48.11 ,674.57
year 44
Add: change of
accounting policy
Correction of
errors in previous
periods
Other
1,052,3
II. Balance at the 593,923, 263,799,8 17,879,74 190,699,2 2,118,653
51,622.
period-begin 220.00 37.18 6.84 48.11 ,674.57
44
III. Increase/
decrease in the 3,246,668 -3,499,7 -253,081.
period (“-” means .97 49.98 01
decrease)
(I) Total amount
of the 11,348, 11,348,33
comprehensive 330.52 0.52
income
(II) Capital paid
in and reduced by
owners
1. Common shares
invested by the
shareholders
2. Capital invested
by the owners of
other equity
instruments
3. Amounts of
share-based
payments
recognized in
owners’ equity
4. Others
(III) Profit -14,848, -14,848,0
distribution 080.50 80.50
56
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
1. Appropriations
to surplus reserves
2. Appropriations
-14,848, -14,848,0
to general risk
080.50 80.50
provisions
3. Appropriations
to owners (or
shareholders)
4. Other
(IV) Internal
carry-forward of
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
3,246,668 3,246,668
4. Other
.97 .97
(V) Specific 4,403,580 4,403,580
reserve .42 .42
1. Withdrawn for 1,156,911 1,156,911
the period .45 .45
2. Used in the
period
1,048,8
593,923, 263,799,8 21,126,41 190,699,2 2,118,400
(VI) Other 51,872.
220.00 37.18 5.81 48.11 ,593.56
46
January-June 2015
Unit: RMB
Jan.-Jun. 2015
Item
Share Other equity instruments Capital Less: Other Specific Surplus Retaine Total
57
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
capital Perpetu reserve treasury comprehe reserve reserve d profit owners’
al stock nsive equity
Preferre
capital Other income
d shares
securiti
es
I. Balance at the
593,923, 263,799,8 10,455,98 178,048,3 997,886 2,044,113
end of the previous
220.00 37.18 7.12 85.86 ,184.22 ,614.38
year
Add: change of
accounting policy
Correction of
errors in previous
periods
Other
II. Balance at the 593,923, 263,799,8 10,455,98 178,048,3 997,886 2,044,113
period-begin 220.00 37.18 7.12 85.86 ,184.22 ,614.38
III. Increase/
decrease in the 5,198,734 62,009, 67,208,50
period (“-” means .41 771.67 6.08
decrease)
(I) Total amount
of the 121,402 121,402,0
comprehensive ,093.67 93.67
income
(II) Capital paid
in and reduced by
owners
1. Common shares
invested by the
shareholders
2. Capital invested
by the owners of
other equity
instruments
3. Amounts of
share-based
payments
recognized in
owners’ equity
4. Others
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
(III) Profit -59,392, -59,392,3
distribution 322.00 22.00
1. Appropriations
to surplus reserves
2. Appropriations
-59,392, -59,392,3
to general risk
322.00 22.00
provisions
3. Appropriations
to owners (or
shareholders)
4. Other
(IV) Internal
carry-forward of
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
5,198,734 5,198,734
4. Other
.41 .41
(V) Specific 5,396,847 5,396,847
reserve .50 .50
1. Withdrawn for 198,113.0 198,113.0
the period 9 9
2. Used in the
period
1,059,8
593,923, 263,799,8 15,654,72 178,048,3 2,111,322
(VI) Other 95,955.
220.00 37.18 1.53 85.86 ,120.46
89
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
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
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 September 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 November
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
RMB57,467,900, accounting for 54.77% of the Company’s total share capital. On 3 December 1993, shares of the Company were
listed in the Shenzhen Stock Exchange.
In April 1994, a dividend distribution plan was reviewed and approved at the 1993 Annual Shareholders’ General Meeting. RMB2.00
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 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 August 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 November 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 April 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 RMB1.00 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
December 2004. After the said transfer, Sanonda Group became a wholly-owned subsidiary under China National Agrochemical
Corporation.
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 November 2006 and March 2007, due to a dispute case concerning the provision of a loan guarantee by the Company’s first
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
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, which accounting for 20.02% of the Company’s total shares. And for the period up to 30 June 2012,
the share capital of the Company remained unchanged.
On 16 November 2012, Sanonda Group Co., Ltd. acquired 800,000 shares of the Company held by the to-be-cancelled
subsidiary-Jingzhou Sanonda Advertising Co., Ltd. through the block trading market, then it held a total of 119,687,200 shares of the
Company, accounting for 20.15% of the Company’s total share capital, and up to 31 December 2013, the share capital of the
Company remained unchanged. On 8 April 2014, Sanonda Group renamed as Jingzhou Sanonda Shareholding Co., Ltd.
As at the balance sheet date, Legal representative of the Company: An Liru; business license registration number 420000400004491;
registered address: No.93, Beijing East Road, Jingzhou, Hubei Province, PRC; Stock abbreviation: Sanonda A/Sanonda B; and Stock
code: 000553/200553.
The main pesticide products of the Company and its subsidiaries (were called by a joint name as “the Company”) are triazophos,
methomyl, paraquate, DDVP, orthene, glyphosate, trichlorphon, imidacloprid; chemical products such as liquid caustic soda, ionic
membrane caustic soda, spermine, pmida, pyridine, trimethyl 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 Company is Jingzhou Sanonda Holdings Co., Ltd. and the ultimate control party is China National
Chemical Corporation.
The financial statements for the six months ended 30 June 2016 have been authorized for issue by a resolution made by the Board of
Directors of the Company on 17 August 2016.
There was 3 subsidiaries included in the consolidated scope at the month-end of July in 2016 while the consolidated scops of the
Company remained unchanged over the last period during the Reporting Period.
IV. Basis for the preparation of financial statements
1. Basis for the preparation
With the going-concern assumption as the basis and based on transactions and other events that actually occurred, the Company
prepared financial statements in accordance with the ASBE-Basic Standard (No. 33 issued decreed by Ministry of Finance and No.
76 revised decreed by Ministry of Finance), the 41 specific standards of Accounting Standards for Business Enterprises issued by
Ministry of Finance of the PRC on 15 Feb 2006 and revised thereafter, Application Guidance of Accounting Standard for Business
Enterprises, Interpretation of Accounting Standards for Business Enterprises and other regulations(hereinafter referred to as “the
Accounting Standards for Business Enterprises”, “China Accounting Standards” or “CAS”), Rules for Preparation Convention of
Disclosure of Public Offering Companies No.15 – General Regulations for Financial Reporting (revised in 2014) by China Securities
Regulatory Commission.
In accordance with relevant provisions of the Accounting Standards for Business Enterprises, the Company 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. Continuing operations
There was no any event or situation caused major concerns on the continuing operation ability of the Company within 12 months
from the period-end.
V. Significant accounting policies and estimates
Reminder of the specific accounting policies and estimates:
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Naught
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company are in compliance with in compliance with the Accounting Standards for Business
Enterprises, which factually and completely present the Company’s, and the Company’s financial positions as at 30 June 2016,
business results and cash flows for the first half year of 2016, and other relevant information. In addition, the Company’s and the
Company’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
2014) by China Securities Regulatory Commission.
2. 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 January and ends on 31 December of every year according to the Gregorian calendar. The fiscal period of Reporting Period was
from 1 January to 30 June.
3. Operating cycle
A normal operating cycle refers to a period from the Group purchasing assets for processing to realizing cash or cash equivalents. An
operating cycle for the Group is 12 months, which are also the classification criteria for the liquidity of its assets and liabilities.
4. Recording currency
Renminbi is the dominant currency used in the economic circumstances where the Group and its domestic subsidiaries are involved.
Therefore, the Group 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.
5. Accounting treatment methods for business combinations under the same control or not under the same
control
Business combinations, it is refer to two or more separate enterprises merge to form a reporting entity transactions or events.
Business combination is divided into under the same control and those non 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 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
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
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. 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 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.
In a business combination not under same control realized by two or more transactions of exchange, according to about the 5 th Notice
about the Treasury Issuing the Accounting Standards for Enterprises (Finance accounting) [2012] No. 19 Criterion about the "
package deal" (see note 4, 4 (2)), Whether the deals are "package deal" or not, belong to the "package deal", see the previous
paragraphs described in this section and note 4, 10 “long term equity investment transaction” and conduct accounting treatment,
those not belong to the "package deal" distinguish between the individual financial statements and the consolidated financial
statements and conduct relevant accounting treatment.
In the individual financial statements, the sum of the book value and new investment cost of the Group holds in the acquiree before
the acquiring date shall be considered as initial cost of the investment. Other related comprehensive gains in relation to the equity
interests that the Group holds in the acquiree before the acquiring date shall be treated on the same basis as the acquiree directly
disposes the related assets or liabilities when disposing the investment (that is, except for the corresponding share in the changes in
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
the net liabilities or assets with a defined benefit plan measured at the equity method arising from the acquiree’s re-measurement, the
others shall be transferred into current investment gains).
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 related
comprehensive gains in relation to the equity interests that the Group holds in the acquiree before the acquiring date shall be treated
on the same basis as the acquiree directly disposes the related assets or liabilities when disposing the investment (that is, except for
the corresponding share in the changes in the net liabilities or assets with a defined benefit plan measured at the equity method
arising from the acquiree’s re-measurement, the others shall be transferred into current investment gains on the acquiring date).
6. Methods for preparing 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 Group
upon an investee, with which it can take part in relevant activities of the investee to obtain variable returns and is able to influence
the amount of returns. The consolidated financial statements comprise the financial statements of the Group and its subsidiaries. A
subsidiary is an enterprise or entity controlled by the Group.
(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 accounting period of the Group
during the preparation of the consolidated financial statements, where the accounting policies and the accounting periods are
inconsistent between the Group 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 Group 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.
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Where the Group 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 Group according to the
original shareholding percentage in the subsidiary, is recorded in investment gains for the period when the Group’s control on the
subsidiary ceases. Other comprehensive incomes in relation to the equity investment in the original subsidiary are treated on the same
accounting basis as the acquiree directly disposes the relevant assets or liabilities (that is, except for the changes in the net liabilities
or assets with a defined benefit plan resulted from re-measurement of the original subsidiary, the rest shall all be transferred into
current investment gains) 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. For details, see the “long term equity
investment” or “financial instruments” of this note.
Where the Group losses control on its original subsidiaries due to step by step disposal of equity investments through multiple
transactions, it need to distinguish the Group losses control on its subsidiaries due to disposal of equity investments whether belongs
to a package deal. All the transaction terms, conditions and economic impact of the disposal of subsidiaries’ equity investment are in
accordance with one or more of the following conditions, which usually indicate the multiple transactions, should be considered as a
package deal for accounting treatment. ① These deals are at the same time or under the condition of considering the influence of
each other to concluded; ② These transactions only be as a whole can achieve a complete business result; ③ The occurrence of a
deal depends on at least one other transactions; ④ A deal alone is not economical, it is economical with other trading together. Those
not belong to a package deal, each of them a deal depends on circumstances respectively conduct accounting treatment in accordance
with the applicable principles of “part disposal of subsidiaries of a long-term equity investment under the condition of not losing
control on its subsidiaries” and “Where the Group losses control on its original subsidiaries due to disposal of some equity
investments or other reasons” (See the front paragraph) relevant transactions of the Group losses control on its subsidiaries due to
disposal of equity investments belonging to a package deal, considered as a transaction and conduct accounting treatment. However,
Before losing control, every disposal cost and corresponding net assets balance of subsidiary of disposal investment are confirmed as
other comprehensive income in consolidated financial statements, which together transferred into the current profits and losses in the
loss of control , when the Group losing control on its subsidiary.
7. Classification of joint arrangements and accounting treatment of joint operations
A joint arrangement refers to an arrangement jointly controlled by two participants or above. The Group classifies joint arrangements
into joint operations and joint ventures according to its rights and duties in the joint arrangements. A joint operation refers to a joint
arrangement where the Group enjoys assets and has to bear liabilities related to the arrangement. A joint venture refers to a joint
arrangement where the Group is only entitled to the net assets of the arrangement.
The Group’s investments in joint ventures are measured at the equity method according to the accounting policies mentioned in
“Long-term equity investments measured at the equity method” of this note.
For a joint operation, the Group, as a joint operator, recognizes the assets and liabilities that it holds and bears in the joint operation,
and recognizes the jointly-held assets and jointly-borne liabilities according to the Group’s stake in the joint operation; recognizes the
income from sale of the Group’s share in the output of the joint operation; recognizes the income from sale of the joint operation’s
outputs according to the Group’s stake in it; and recognizes the expense solely incurred to the Group and the expense incurred to the
joint operation according to the Group’s stake in it.
When the Group, as a joint operator, transfers or sells assets (the assets not constituting business, the same below) to the joint
operation, or purchases assets from the joint operation, before the assets are sold to a third party, the Group only recognizes the share
of the other joint operators in the gains and losses arising from the sale. Where impairment occurs to the assets as prescribed in , the Group shall fully recognizes the loss for a transfer or
sale of assets to a joint operation; and shall recognize the loss according to its stake in the joint operation for a purchase of assets
from the joint operation.
8. 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.
9. Foreign currency businesses and translation of foreign currency financial statements
(1) Accounting treatments for translation of foreign currency transactions
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 (usually referring to the central parity rate announced by the People’s Bank of China, the same below)
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 the hedging
instruments used for effective hedging of net overseas operation investments shall be recorded into other comprehensive incomes,
and shall be recognized into current gains and losses when the net investments are disposed; and ③ 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.
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
other comprehensive incomes; and be recorded into disposal gains and losses at current period when disposing overseas business.
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 non-monetary 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 incomes.
(3) 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
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
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 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. 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.
Where the control of the Group over an overseas operation ceases due to disposal of all or some of the Group’s owner’s equity in the
overseas operation or other reasons, the foreign-currency statement translation difference belonging to the parent company’s owner’s
equity in relation to the overseas operation which is stated under the shareholders’ equity in the balance sheet shall be all restated as
gains and losses of the disposal period.
Where the Group’s equity in an overseas operation decreases due to disposal of some equity investment or other reasons but the
Group still has control over the overseas operation, the foreign-currency statement translation difference in relation to the disposed
part of the overseas operation shall be recorded into minority interests instead of current gains and losses. If what’s disposed is some
equity in an overseas associated enterprise or joint venture, the foreign-currency statement translation difference related to the
overseas operation shall be recorded into the gains and losses of the current period of the disposal according to the disposal ratio.
10. Financial instruments
The Group recognizes a financial asset or liability when it becomes a party of the relevant financial instrument contract. Financial
assets and liabilities are measured at fair value in initial recognition. As for the financial assets and liabilities measured at fair value
of which changes are recorded into current gains and losses, the relevant dealing expenses are directly recorded into gains and losses;
and the dealing expenses on other kinds of financial assets and liabilities are included in the amounts initially recognized.
(1) Determination of the fair value of main financial assets and financial liabilities
Fair value refers to the price that a market participant shall receive for selling an asset or shall pay for transferring a liability in an
orderly transaction on the measurement date. As for the financial assets or financial liabilities for which there is an active market, the
quoted prices in the active market shall be used to determine the fair values thereof. 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.
(2) Classification, recognition and measurement of financial assets
The purchase and sale of financial assets under the normal ways shall be recognized and stopped to be recognized respectively at the
price of transaction date. Financial assets shall be classified into the following four categories when they are initially recognized: (a)
the financial assets which are measured at their fair values and the variation of which is recorded into the profits and losses of the
current period, (b) the investments which will be held to their maturity; (c) loans and the account receivables; and (d) financial assets
available for sale.
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① The financial assets which are measured at their fair values and the variation of which is recorded into the profits and losses of the
current period
Including transactional financial assets and the financial assets which are designated to be measured at their fair value when they are
initially recognized and of which the variation is recorded into the profits and losses of the current period;
The financial assets meeting any of the following requirements shall be classified as transactional financial assets：A. The purpose to
acquire the said financial assets is mainly for selling them in the near future; B. Forming a part of the identifiable combination of
financial instruments which are managed in a centralized way and for which there are objective evidences proving that the enterprise
may manage the combination by way of short-term profit making in the near future; C. Being a derivative instrument, excluding the
designated derivative instruments which are effective hedging instruments, or derivative instruments to financial guarantee contracts,
and the derivative instruments which are connected with the equity instrument investments for which there is no quoted price in the
active market, whose fair value cannot be reliably measured, and which shall be settled by delivering the said equity instruments.
The financial assets meeting any of the following requirements shall be designated as 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 for initial recognition: A. the
designation can eliminate or significantly reduce the difference of relevant gains and losses between recognition and measurement
causing from different bases for measurement of financial assets; B. The official written documents for risk management and
investment strategies of the enterprise have clearly stated that it shall ,manage, evaluate and report to important management
personnel based on the fair value, about the financial assets group or the group of financial assets & liabilities which the financial
assets are belong to.
For 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 shall continue to be measured by fair value, gains and losses of change in fair value, dividends and interest related with
these financial assets should be recorded into gains and losses of current period.
② Held-to-maturity investment
The term "held-to-maturity investment" refers to a non-derivative financial asset with a fixed date of maturity, a fixed or
determinable amount of repo price and which the enterprise holds for a definite purpose or the enterprise is able to hold until its
maturity.
For the held-to-maturity investment adopting actual interest rate method, which is measured at the post-amortization costs, the profits
and losses that arise when such financial assets or financial liabilities are terminated from recognition, or are impaired or amortized,
shall be recorded into the profits and losses of the current period.
The actual interest rate method refers to the method by which the post-amortization costs and the interest incomes of different
installments or interest expenses are calculated in light of the actual interest rates of the financial assets or financial liabilities
(including a set of financial assets or financial liabilities). The actual interest rate refers to the interest rate adopted to cash the future
cash flow of a financial asset or financial liability within the predicted term of existence or within a shorter applicable term into the
current carrying amount of the financial asset or financial liability.
When the actual interest rate is determined, the future cash flow shall be predicted on the basis of taking into account all the
contractual provisions concerning the financial asset or financial liability (the future credit losses shall not be taken into account).and
also the various fee charges, trading expenses, premiums or reduced values, etc., which are paid or collected by the parties to a
financial asset or financial liability contract and which form a part of the actual interest rate.
③ Loans and the accounts receivables
Loans and the accounts receivables refer to non-derivative financial assets, which there is no quotation in the active market, with
fixed recovery cost or recognizable.
Financial assets that are defined as loans and the accounts receivables by the Group including notes receivables, accounts receivables,
interest receivable, dividends receivable and other receivables etc..
Loans and the accounts receivables are made follow-up measurement on the basis of post-amortization costs employing the effective
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interest method. Gains or loss arising from the termination recognition, impairment occurs or amortization shall be recorded into the
profits and losses of the current period.
④ Assets available for sales
Assets available for sales including non-derivative financial asset that has been assigned as assets available for sales on the initial
recognition and financial assets excluded those measured at fair value and of which the variation into profits and losses of the current
period, they are some financial assets, loans and accounts receivables, held-to-maturity investment.
The cost at the period-end of the available-for-sale liabilities instruments should be confirmed according to its amortized cost method,
that is the initially recognized amount which deduct the principal that had been repaid, to plus or minus the accumulative
amortization amount formed by the amortization between the difference of the initially recognized amount and the amount on the due
date that adopted the actual interest rate method, and at the same time deduct the amount after the impairment loss happened. The
cost at the period-end of the available-for-sale liabilities instruments is its initial cost.
Financial assets available-for-trade are subsequently measured at fair value, and gains or losses arising from changes in the fair value
are recognized as other comprehensive income, and be carried forward when the said financial assets stopped recognition, then it
shall be recorded into the profits and losses of the current period. But, the equity instrument investment which neither have quotation
in the active market nor its fair value could not be reliable measured, as well as the derivative financial assets that concern with the
equity instruments and should be settled through handing over to its equity instruments, should take the follow-up measurement
according to the cost.
Interest receive during the holding of assets available for sales and cash dividends with distribution announcement by invested
companies, it shall be recorded into the profits and losses of the current period.
(3) Impairment of financial assets
The Group assesses at the balance sheet date the carrying amount of every financial asset except for the financial assets that
measured by the fair value. If there is objective evidence indicating a financial asset may be impaired, a provision is provided for the
impairment.
The Group carries out a separate impairment test for every financial asset which is individually significant. As for a financial asset
which is individually insignificant, an impairment test is carried out separately or in the financial asset group with similar credit risk.
Where the financial asset (individually significant or insignificant) is found not impaired after the separate impairment test, it is
included in the financial asset group with similar credit risk and tested again on the group basis. Where the impairment loss is
recognized for an individual financial asset, it is not included in the financial asset group with similar credit risk for an impairment
test.
① Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying value by the estimated present value of future cash
flow. The difference is recorded as impairment loss. If there is objective evidence to indicate the recovery of value of financial assets
after impairment, and it is related with subsequent event after recognition of loss, the impairment loss recorded originally can be
reversed. The carrying value of financial assets after impairment loss reversed shall not exceed the amortized cost of the financial
assets without provisions of impairment loss on the reserving date.
② Impairment of available-for-sale financial assets
When it judged that the decrease of fair value of the available-for-sale equity instrument investment is serious and not temporarily
after comprehensive considering relevant factors, it reflected that the available-for-sale equity instrument investment occurred
impairment. Of which, the “serious decline” refers to the accumulative decline range of the fair value over 20%; while the
“non-temporary decline” refers to the consecutive decline time of the fair value over 12 months.
Where an available-for-sale financial asset is impaired, the accumulative losses arising from the decrease of the fair value of the
capital reserve which is directly included are transferred out and recorded in the profits and losses for the current period. The
accumulative losses transferred out are the balance obtained from the initially obtained cost of the said financial asset after deducting
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the principals as taken back, the amortized amount, the current fair value and the impairment loss originally recorded in the profits
and losses.
Where the impairment loss has been recognized for an available-for-sale financial asset, if, within the accounting periods thereafter,
there is any objective evidence proving that the value of the said financial asset has been restored and the restoration is objectively
related to the events that occur after the impairment loss was recognized, the originally recognized impairment loss is reversed. The
impairment losses on the available-for-sale equity instrument investments are reversed and recognized as other comprehensive
incomes, and the impairment losses on the available-for-sale liability instruments are reversed and recorded in the profits and losses
for the current period.
The impairment loss incurred to an equity instrument investment for which there is no quoted price in the active market and whose
fair value cannot be reliably measured, or incurred to a derivative financial asset which is connected with the said equity instrument
investment and which must be settled by delivering the said equity investment, is not reversed.
(4) Recognition and measurement of financial asset transfers
Where a financial asset satisfies any of the following requirements, the recognition of it is terminated: ① The contractual rights for
collecting the cash flow of the said financial asset are terminated; ② The said financial asset has been transferred and nearly all of the
risks and rewards related to the ownership of the financial asset to the transferee; or ③ The said financial asset has been transferred.
And the Group has ceased its control on the said financial asset though it neither transfers nor retains nearly all of the risks and
rewards related to the ownership of the financial asset.
Where the Group neither transfers nor retains nearly all of the risks and rewards related to the ownership of a financial asset, and it
does not cease its control on the said financial asset, it recognizes the relevant financial asset and liability accordingly according to
the extent of its continuous involvement in the transferred financial asset. The term "continuous involvement in the transferred
financial asset" refers to the risk level that the enterprise faces resulting from the change of the value of the financial asset.
If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the difference between the amounts of the
following 2 items is recorded in the profits and losses of the current period: (1) The book value of the transferred financial asset;
and (2) The sum of consideration received from the transfer, and the accumulative amount of the changes of the fair value originally
recorded in other comprehensive incomes.
If the transfer of partial financial asset satisfies the conditions to stop the recognition, the book value of the transferred financial asset
is apportioned between the portion whose recognition has been stopped and the portion whose recognition has not been stopped
according to their respective relative fair value, and the difference between the amounts of the following 2 items is included into the
profits and losses of the current period: (1) The summation of the consideration received from the transfer and the portion of the
accumulative amount of changes in the fair value originally recorded in other comprehensive incomes which corresponds to the
portion whose recognition has been stopped; and (2) The amortized carrying amounts of the aforesaid amounts.
In respect of the assets using recourse to sell or using endorsement to transfer, the Group needs to determine whether almost all of the
risks and rewards of the financial asset ownership are transferred. If almost all of the risks and rewards of the financial asset
ownership had been transferred to the transferee, derecognize the financial assets. For almost all of the risks and rewards of the
financial asset ownership retained, do not end to recognize the financial assets. For which neither transfer or retain almost all of the
risks and rewards of the financial asset ownership, continuously judge whether the Company retain the control of the assets, and
conduct accounting treatment according to the principle of mentioned in the previous paragraphs.
(5) Classification and measurement of financial liabilities
In the initial recognition, financial liabilities are divided into the financial liabilities measured at fair values and whose changes are
recorded in current gains and losses and other financial liabilities. Financial liabilities are initially recognized at their fair values. As
for a financial liability measured at fair value and whose changes are recorded in current gains and losses, the relevant trading
expense is directly recorded in the profits and losses for the current period. As for other financial liabilities, the relevant trading
expenses are recorded in the initially recognized amounts.
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① Financial liabilities measured at fair values and whose changes are recorded in current gains and losses
Such financial liabilities are divided into transactional financial liabilities and financial liabilities designated to be measured at fair
values and whose changes are recorded in current gains and losses in the initial recognition under the same conditions where such
financial assets are divided into transactional financial assets and financial assets designated to be measured at fair values and whose
changes are recorded in current gains and losses in the initial recognition.
Financial liabilities measured at fair values and whose changes are recorded in current gains and losses are subsequently measured at
their fair values. Gains or losses arising from the fair value changes, as well as the dividend and interest expenses in relation to the
said financial liabilities, are recorded in the profits and losses for the current period.
② Other financial liabilities
As for a derivative financial liability connected to an equity instrument for which there is not quoted price in an active market and
whose fair value cannot be reliably measured and which must be settled by delivering the equity instrument, it is subsequently
measured on the basis of costs. Other financial liabilities are subsequently measured according to the amortized cost using the actual
interest rate method. Gains or losses arising from de-recognition or amortization of the said financial liabilities is recorded in the
profits and losses for the current period.
③ Financial guarantee contract and loan commitment
For the financial guarantee contracts which are not designated as a financial liability measured at its fair value and the variation
thereof is recorded into the profits and losses of the current period, or the loan commitment which is not designated as a financial
liability measured at its fair value and the variation thereof is recorded into the gains and losses that will be loaned lower than the
market interest rate, which shall be initially recognized by fair value, and the subsequent measurement shall be made after they are
initially recognized according to the higher one of the following: a. the amount as determined according to the Accounting
Standards for Enterprises No. 13 – Contingencies; b. the surplus after accumulative amortization as determined according to the
principles of the Accounting Standards for Enterprises No. 14 - Revenues is subtracted from the initially recognized amount.
(6) De-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 (debtor) 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 terminates the recognition of the existing financial liability,
and at the same time recognizes the new financial liability.
Where the recognition of a financial liability is totally or partially terminated, the enterprise concerned shall include into the profits
and losses of the current period for the gap between the book value 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)
(7) Derivatives and embedded derivatives
Derivative financial instruments include derivatives are initially measured at fair value at the date when the derivative contracts are
entered into and are substantially re-measured at fair value. The resulting gain and loss is recognized in profit or loss.
An embedded derivative is separated from the hybrid instrument, where the hybrid instrument is not designated as a financial asset or
financial liability at fair value though profit or loss, and the treated as a standalone derivative if (a) the economic characteristics and
risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract; and (b) a
separate instrument with the same terms as the embedded derivative would meet the definition of a derivative. If the Company is
unable to measure the embedded derivative separately either at acquisition or at a subsequent balance sheet date, it designates the
entire hybrid instrument as a financial asset or financial liability at fair value through profit or loss.
(8) Offsetting financial assets and financial liabilities
When the Group has a legal right that is currently enforceable to set off the recognized financial assets and financial liabilities, and
intends either to settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously, a financial asset
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and a financial liability shall be offset and the net amount is presented in the balance sheet. Except for the above circumstances,
financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset.
(9) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.
The Group issues (including refinancing), re-purchases, sells or written-offs the equity instrument as the disposing of the changes of
the equity. The Group not recognized the changes of the fair value of the equity instrument. The transaction expenses related to the
equity transaction would be deducted from the equity.
All types of distribution (excluding stock dividends) made by the Group to holders of equity instruments are deducted from
shareholders’ equity. The Group does not recognize any changes in the fair value of equity instruments.
11. Receivables
(1) Accounts receivable with significant single amount for which the bad debt provision is made
individually
Receivables with the amount of RMB5 million or more than
Judgment basis or monetary standards of provision for bad debts
RMB5 million should recognize as the receivables with
of the individually significant accounts receivable
significant single amount.
The Company made an independent impairment test on
receivables with significant single amounts; the financial assets
without impairment by independent impairment test should be
Method of individual provision for bad debts of the individually
included in financial assets portfolio with similar credit risk to
significant accounts receivable
take the impairment test. Receivables was recognized with
impairment should no longer be included in receivables portfolio
with similar credit risk to take the impairment test.
(2) Accounts receivable which the bad debt provision is withdrawn by credit risk characteristics
Name of portfolios Bad debt provision method
Related party portfolios Other method
Risk-free portfolios Other method
Age portfolios Aging analysis
In the groups, adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Withdrawal proportion for accounts Withdrawal proportion for other accounts
Age
receivable (%) receivable (%)
Within 1 year (including 1 year) 5.00% 5.00%
1-2 years 10.00% 10.00%
2-3 years 30.00% 30.00%
3-4 years 50.00% 50.00%
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4-5 years 50.00% 50.00%
Over 5 years 100.00% 100.00%
In the groups, adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, adopting other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
(3) Accounts receivable with an insignificant single amount but for which the bad debt provision is made
individually
The Group made independent impairment test on receivables
with insignificant amount but with the following characteristics
(for example: receivables have dispute with the other parties or
Reason of individually withdrawing bad debt provision
involving lawsuit and arbitration; receivables have obvious
indication showing that the debtors are likely to fail to perform
the duty of repayment, etc.).
The Group made independent impairment test on receivables
with insignificant amount but with the following characteristics,
if any objective evidence shows that the accounts receivable has
been impaired, impairment loss shall be recognized on the basis
of the gap between the current values of the future cash flow
Withdrawal method for bad debt provision
lower than its book value so as to withdraw provision for bad
debts (for example: receivables have dispute with the other
parties or involving lawsuit and arbitration; receivables have
obvious indication showing that the debtors are likely to fail to
perform the duty of repayment, etc.).
12. Inventory
(1) Classification
Inventories mainly include raw materials, work-in-progress and self-made semi-manufactured goods, revolving materials, finished
products as well as stock products etc.
(2) Valuation method of inventories acquiring and issuing
The inventories should be measured by the actual cost when acquired, and the cost of the inventories including the procurement cost,
processing cost and other cost. Bulk chemical raw materials, work-in-progress goods and finished products should be measured by
the actual cost and should carry forward the cost by weighted average method when issuing; auxiliary materials, packing materials
should be measured by actual cost and adopt the planned cost for accounting as well as included the difference between the actual
cost and the planned cost into the material cost variance and according the material cost variance rate, work out the material cost
variance which should be shared at the end of the month, and to adjust the planned cost that had issued the materials as the actual cost;
low priced and easily worn articles should be recorded by actual cost and should adopt the one-time amortization method for
accounting when consuming.
(3) Basis for determining net realizable value of inventories and provision methods for decline in value of inventories
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Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion, the
estimated costs necessary to make the sale and relevant taxes. Net realizable value is determined on the basis of clear evidence
obtained, and takes into consideration the purpose of holding inventories and effect of post balance sheet events.
At the balance sheet date, inventories are measured at the lower of the cost and net realizable value. If the net realizable value is
below the cost of inventories, a provision for decline in value of inventories is made. The provision for inventories decline in value is
determined normally by the difference of the cost of individual item less its realizable value. For large quantity and low value items
of inventories, provision for decline in value is made based on categories of inventories. For items of inventories relating to a product
line that are produced and marketed in the same geographical area, have the same or similar end users or purposes, and cannot be
practicably evaluated separately from other items in that product line provision for decline in value is determined on an aggregate
basis.
After the provision for decline in value of inventories is made, if the circumstances that previously caused inventories to be written
down below cost no longer exist so that the net realizable value of inventories is higher than their cost, the original provision for
decline in value is reversed and the reversal is included in profit or loss for the period.
(4) The perpetual inventory system is maintained for stock system.
13. Divided as assets held for sale
If a non-current assets could be immediately sold only according to the usual terms of selling this kind of assets under current
situation, and the Group has made a decision on disposing a non-current asset, entered into an irreversible transfer agreement with the
transferee and the transfer is likely to be completed within one year, the non-current asset is measured as a non-current asset held for
sale, which shall not be depreciated or amortized since the date held for sale but shall be measured at the lower one of the net
amounts of the book value and the fair value after deducting the disposal expense. Non-current assets held for sale include
single-item assets and disposal groups. Where a disposal group is an asset group and the goodwill obtained in the business
combination is apportioned to the asset group according to the “Accounting Standard No. 8 for Business Enterprises—Asset
Impairment”, or a disposal group is an operation in such an asset group, the disposal group shall include the goodwill in the business
combination.
The non-current assets of single amount and the assets among the disposing group that both be divided as assets held for sale, should
be listed alone of the current assets on the balance sheet; liabilities related to the assets transfer among the disposing group which be
divided as assets held for sale, should be listed alone of the current assets on the balance sheet.
An asset or an disposal group was classified as held for sale before, but if it couldn’t meet the recognition conditions for held-for-sale
non-current asset later, the Company shall cease to classify it as held for sale, and measure it by the lower amount of the followings:
(1) its carrying amount before the asset (or disposal group) was classified as held for sale, adjusted for any depreciation, amortization
or impairment before the asset (or disposal group) being classified as held for sale; or (2) its recoverable amount on the date of the
subsequent decision not to sell.
14. Long-term equity investments
The long-term equity investments of this part refer to the long-term equity investments that the Group has control, joint control or
significant influence over the investees. The long-term equity investment that the Group does not have control, joint control or
significant influence over the investees, should be recognized as available-for-sale financial assets or be measured by fair value with
the changes should be included in the financial assets accounting of the current gains and losses, and please refer the details of the
accounting policies to “financial instrument” of this note.
Joint control, refers to the control jointly owned according to the relevant agreement on an arrangement by the Group and the
relevant activities of the arrangement should be decided only after the participants which share the control right make consensus.
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Significant influence refers to the power of the Group which could anticipate in the finance and the operation polices of the investees,
but could not control or jointly control the formulation of the policies with the other parties.
(1) Recognition of 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. The difference between the initial cost of the long-term equity investment and the payment in cash, non-cash assets
transferred as well as the book value of the debts borne by the merging party shall offset against the capital reserve. If the capital
reserve is insufficient to dilute, the retained earnings shall be adjusted. If the consideration of the merging enterprise is that it issues
equity securities, it shall, on the date of merger, regard the share of the book value of the shareholder's equity of the merged
enterprise on the consolidated financial statement of the ultimate control party as the initial cost of the long-term equity investment.
The total face value of the stocks issued shall be regarded as the capital stock, while the difference between the initial cost of the
long-term equity investment and total face value of the shares issued shall offset against the capital reserve. If the capital reserve is
insufficient to dilute, the retained earnings shall be adjusted. The equities of the combined party which respectively acquired through
multiple transaction under the same control that ultimately form into the combination of the enterprises under the same control,
should be disposed according whether belongs to package deal; if belongs to package deal, each transaction would be executed
accounting treatment by the Company as a transaction of acquiring the control right. If not belongs to package deal, it shall, on the
date of merger, regard the enjoyed share of the book value of the shareholder's equity of the merged enterprise on the consolidated
financial statement of the ultimate control party as the initial cost of the long-term equity investment, and as for the difference
between the initial investment cost of the long-term equity investment and sum of the book value of the long-term equity investment
before the combination and the book value of the consideration of the new payment that further required on the combination date,
should adjust the capital reserve; if the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. The equity
investment held before the combination date which adopted the equity method for accounting, or the other comprehensive income
confirmed for the available-for-sale financial assets, should not have any accounting disposal for the moment.
For the long-term investment required from the business combination under different control, the initial investment cost regarded as
long-term equity investment on the purchasing date according to the combination cost, the combination costs shall be the sum of the
fair values of the assets paid, the liabilities incurred or assumed and the equity securities issued by the Company. The equities of the
acquirees which respectively acquired through multiple transaction that ultimately form into the combination of the enterprises under
the different control, should be disposed according whether belongs to package deal; if belongs to package deal, each transaction
would be executed accounting treatment by the Company as a transaction of acquiring the control right. If not belongs to package
deal, the sum of the book value of the original held equity investment of the acquirees and the newly added investment cost should be
regarded as the initial investment cost of the long-term equity investment that changed to be accounted by cost method. If the original
held equity is calculated by cost method, the other relevant comprehensive income would not have any accounting disposal for the
moment. If the original held equity investment is the financial assets available for sale, its difference between the fair value and the
book value as well as the accumulative changes of the fair value that include in the other comprehensive income, should transfer into
the current gains and losses.
The commission fees for audit, law services, assessment and consultancy services and other relevant expenses occurred in the
business combination by the combining party or the purchase party, shall be recorded into current profits and losses upon their
occurrence; the transaction expense from the issuance of equity securities or bonds securities which are as consideration for
combination by the combining party, should be recorded as the initial amount of equity securities and bonds securities.
Besides the long-term equity investments formed by business combination, the other long-term equity investments shall be initially
measured by cost, the cost is fixed in accordance with the ways of gaining, such as actual cash payment paid by the Group, the fair
value of equity securities issued by the Group, the agreed value of the investment contract or agreement, the fair value or original
carrying amount of exchanged assets from non-monetary assets exchange transaction, the fair value of the long-term equity
investments, etc. The expenses, taxes and other necessary expenditures directly related with gaining the long-term equity investments
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
shall also be recorded into investment cost. The long-term equity investment cost for those could execute significant influences on
the investees because of appending the investment or could execute joint control but not form as control, should be as the sum of the
fair value of the original held equity investment and the newly added investment cost recognized according to the No.22 of
Accounting Standards for Business Enterprises—Recognition and Measurement of Financial Instrument.
(2) Subsequent measurement and recognition of gains or losses
A long-term equity investment where the investing enterprise has joint control (except for which forms into common operators) or
significant influence over the investors should be measured by equity method. Moreover, long-term equity investment adopting the
cost method in the financial statements, and which the Company has control on invested entity.
① Long-term equity investment measured by adopting cost method
The price of a long-term equity investment measured by adopting the cost method shall be included at its initial investment cost and
append as well as withdraw the cost of investing and adjusting the long-term equity investment. The return on investment at current
period shall be recognized in accordance with the cash dividend or profit announced to distribute by the invested entity, except the
announced but not distributed cash dividend or profit included in the actual payment or consideration upon gaining the investment.
② Long-term equity investment measured by adopting equity method
If the initial cost of a long-term equity investment is more than the Company's attributable share of the fair value of the invested
entity's identifiable net assets for the investment, the initial cost of the long-term equity investment may not be adjusted. If the initial
cost of a long-term equity investment is less than the Company's attributable share of the fair value of the invested entity's
identifiable net assets for the investment, the difference shall be included in the current profits and losses and the cost of the
long-term equity investment shall be adjusted simultaneously.
When measured by adopting equity method, respectively recognize investment income and other comprehensive income according to
the net gains and losses as well as the portion of other comprehensive income which should be enjoyed or be shared, and at the same
time adjust the book value of the long-term equity investment; corresponding reduce the book value of the long-term equity
investment according to profits which be declared to distribute by the investees or the portion of the calculation of cash dividends
which should be enjoyed; for the other changes except for the net gains and losses, other comprehensive income and the owners’
equity except for the profits distribution of the investees, should adjust the book value of the long-term equity investment as well as
include in the capital reserve. The investing enterprise shall, on the ground of the fair value of all identifiable assets of the invested
entity when it obtains the investment, recognize the attributable share of the net profits and losses of the invested entity after it
adjusts the net profits of the invested entity. If the accounting policies adopted by the investees are not accord with that of the Group,
should be adjusted according to the accounting policies of the Group and the financial statement of the investees during the
accounting period and according which to recognize the investment income as well as other comprehensive income. For the
transaction happened between the Group and associated enterprises as well as joint ventures, if the assets launched or sold not form
into business, the portion of the unrealized gains and losses of the internal transaction, which belongs to the Group according to the
calculation of the enjoyed proportion, should recognize the investment gains and losses on the basis. But the losses of the unrealized
internal transaction happened between the Group and the investees which belongs to the impairment losses of the transferred assets,
should not be neutralized. The assets launched by the Group to the associated enterprises or the joint ventures if could form into
business, the long-term equity investment without control right which acquired by the investors, should regard the fair value of the
launched business as the initial investment cost the newly added long-term equity investment, and for the difference between the
initial investment cost and the book value of the launched business, should be included into the current gains and losses with full
amount. The assets sold by the Group to the associated enterprises or the joint ventures if could form into business, the difference
between the acquired consideration and the book value of the business should be included in the current gains and losses with full
amount. The assets purchased by the Group to the associated enterprises or the joint ventures if could form into business, should be
accounting disposed according to the regulations of No. 20 of ASBE—Business Combination, and should be recognized gains or
losses related to the transaction with full amount.
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The Group shall recognize the net losses of the invested enterprise until the book value of the long-term equity investment and other
long-term rights and interests which substantially form the net investment made to the invested entity are reduced to zero. However,
if the Group has the obligation to undertake extra losses, it shall be recognized as the estimated liabilities in accordance with the
estimated duties and then recorded into investment losses at current period. If the invested entity realizes any net profits later, the
Group shall, after the amount of its attributable share of profits offsets against its attributable share of the un-recognized losses,
resume recognizing its attributable share of profits.
For the long-term equity investment held by the Group before the first execution of the new accounting criterion on 1 Jan. 2008 of
the associated enterprises and joint ventures, if there is debit difference of the equity investment related to the investment, should be
included in the current gains and losses according to the amount of the straight-line amortization during the original remained period.
③ Acquiring shares of minority interest
In the preparation for the financial statements, the balance existed between the long-term equity investment increased by acquiring
shares of minority interest and the attributable net assets on the subsidiary calculated by the increased shares held since the purchase
date (or combination date), the capital reserves shall be adjusted, if the capital reserves are not sufficient to offset, the retained profits
shall be adjusted.
④ Disposal of long-term equity investment
In the preparation of financial statements, the Company disposed part of the long-term equity investment on subsidiaries without
losing its controlling right on them, the balance between the disposed price and attributable net assets of subsidiaries by disposing the
long-term equity investment shall be recorded into owners’ equity; where the Company losses the controlling right by disposing part
of long-term equity investment on such subsidiaries, it shall treated in accordance with the relevant accounting policies in Method on
preparation of combined financial statements of this note.
For other ways on disposal of long-term equity investment, the balance between the book value of the disposed equity and its actual
payment gained shall be recorded into current profits and losses.
For the long-term equity investment measured by adopting equity method, if the remained equity after disposal still adopts the equity
method for measurement, the other comprehensive income originally recorded into owners’ equity should adopt the same basis of the
accounting disposal of the relevant assets or liabilities directly disposed by the investees according to the corresponding proportion.
The owners’ equity recognized owning to the changes of the other owners’ equity except for the net gains and losses, other
comprehensive income and the profits distribution of the investees, should be transferred into the current gains and losses according
to the proportion.
For the long-term equity investment which adopts the cost method of measurement, if the remained equity still adopt the cost method,
the other comprehensive income recognized owning to adopting the equity method for measurement or the recognition and
measurement standards of financial instrument before acquiring the control of the investees, should adopt the same basis of the
accounting disposal of the relevant assets or liabilities directly disposed by the investees and should be carried forward into the
current gains and losses according to the proportion; the changes of the other owners’ equity except for the net gains and losses, other
comprehensive income and the profits distribution among the net assets of the investees which recognized by adopting the equity
method for measurement, should be carried forward into the current gains and losses according to the proportion.
For those the Group lost the control of the investees by disposing part of the equity investment as well as the remained equity after
disposal could execute joint control or significant influences on the investees, should change to measure by equity method when
compiling the individual financial statement and should adjust the measurement of the remained equity to equity method as adopted
since the time acquired; if the remained equity after disposal could not execute joint control or significant influences on the investees,
should change the accounting disposal according to the relevant regulations of the recognition and measurement standards of
financial instrument, and its difference between the fair value and book value on the date lose the control right should be included in
the current gains and losses. For the other comprehensive income recognized by adopting equity method for measurement or the
recognition and measurement standards of financial instrument before the Group acquired the control of the investees, should execute
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the accounting disposal by adopting the same basis of the accounting disposal of the relevant assets or liabilities directly disposed by
the investees when lose the control of them, while the changes of the other owners’ equity except for the net gains and losses, other
comprehensive income and the profits distribution among the net assets of the investees which recognized by adopting the equity
method for measurement, should be carried forward into the current gains and losses according to the proportion. Of which, for the
disposed remained equity which adopted the equity method for measurement, the other comprehensive income and the other owners’
equity should be carried forward according to the proportion; for the disposed remained equity which changed to execute the
accounting disposal according to the recognition and measurement standards of financial instrument, the other comprehensive
income and the other owners’ equity should be carried forward in full amount.
For those the Group lost the control of the investees by disposing part of the equity investment, the disposed remained equity should
change to calculate according to the recognition and measurement standards of financial instrument, and difference between the fair
value and book value on the date lose the control right should be included in the current gains and losses. For the other
comprehensive income recognized from the original equity investment by adopting the equity method, should execute the accounting
disposal by adopting the same basis of the accounting disposal of the relevant assets or liabilities directly disposed by the investees
when terminate the equity method for measurement, while for the owners’ equity recognized owning to the changes of the other
owner’s equity except for the net gains and losses, other comprehensive income and the profits distribution of the investees, should
be transferred into the current investment income with full amount when terminate adopting the equity method.
The Group respectively disposes the equity investment of the subsidiaries through multiple transactions until lose the control right, if
the above transactions belongs to the package deal, should execute the accounting disposal by regarding each transaction as a deal of
disposing the equity investment of the subsidiaries until lose the control right, while the difference between each expenses of the
disposal and the book value of the long-term equity investment in accord with the disposed equity before losing the control right,
should firstly be recognized as other comprehensive income then be transferred into the current gains and losses of losing the control
right along until the time when lose it.
15. Investment real estates
Measurement mode of investment real estates
Measurement of cost method
Depreciation or amortization method
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.
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 recognized 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.
For details of impairment test method and withdrawal method of impairment provision of investment real estates, please refer to Note
IV. 16. Impairment of Non-current Non-financial Assets.
When owner-occupied real estate or inventories are changed into investment real estate or investment real estate is changed into
owner-occupied real estate, of which 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 would be transferred to fixed assets or intangible
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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 derecognized 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 recognized in profit or loss in the period in which it
is incurred.
16. Fixed assets
(1) Conditions for recognition
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. The fixed assets are only recognized when the relevant economic benefits probably flow in the Group and its cost could
be reliable measured. The fixed assets should take the initial measurement according to the cost and at the same time consider the
influences of the factors of the estimated discard expenses.
(2) Depreciation methods
Expected net salvage
Category of fixed assets Method Useful life Annual deprecation
value
Average method of
Housing and building 15-24 2%-4% 4%--6.53%
useful life
Average method of
Machinery equipment 3-15 2%-4% 6.4%--32.67%
useful life
Average method of
Electronic equipment 9-18 4.00% 5.33%--10.67%
useful life
Transportation Average method of
9 2.00% 10.89%
equipment useful life
(3) Recognition basis, pricing and depreciation method of fixed assets by 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.
Its ownership may or may not eventually be transferred. The fixed assets by finance lease shall adopt the same depreciation policy for
self-owned fixed assets. 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.
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17. Construction in progress
Construction in process is measured at actual cost. Actual cost comprises construction costs, borrowing costs that are eligible for
capitalization before the fixed assets being ready for their intended us and other relevant costs. Construction in process is transferred
to fixed assets when the assets are ready for their intended use.
18. Borrowing costs
The borrowing costs shall include interest on borrowings, amortization of discounts or premiums on borrowings, ancillary expenses,
and exchange balance on foreign currency borrowings. 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.
The to-be-capitalized amount of interests shall be determined in light of the actual interests incurred of the specially borrowed loan at
the present period minus the income of interests earned on the unused borrowing loans as a deposit in the bank or as a temporary
investment; the enterprise shall calculate and determine the to-be-capitalized amount on the general borrowing by multiplying the
weighted average asset disbursement of the part of the accumulative asset disbursements minus the general borrowing by the
capitalization rate of the general borrowing used. The capitalization rate shall be calculated and determined in light of the weighted
average interest rate of the general borrowing.
During the period of capitalization, the exchange balance on foreign currency special borrowings shall be capitalized; the exchange
balance on foreign currency general borrowings shall be recorded into current profits and losses.
The term “assets eligible for capitalization” refers to the fixed assets, investment real estate, inventories and other assets, of which the
acquisition and construction or production may take quite a long time to get ready for its intended use or for sale.
Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption period lasts
for more than 3 months, the capitalization of the borrowing costs shall be suspended.
19. Biological assets
20. Oil-gas assets
21. Intangible assets
(1) Pricing method, useful life and impairment test
The term "intangible asset" refers to the identifiable non-monetary assets possessed or controlled by enterprises which have no
physical shape.
The intangible assets shall be initially measured according to its cost. The costs related with the intangible assets, if the economic
benefits related to intangible assets are likely to flow into the enterprise and the cost of intangible assets can be measured reliably,
shall be recorded into the costs of intangible assets; otherwise, it shall be recorded into current profits and losses upon the occurrence.
The use right of land gained is usually measured as intangible assets. For the self-developed and constructed factories and other
constructions, the related expenditures on use right of land and construction costs shall be respectively measured as intangible assets
and fixed assets. For the purchased houses and buildings, the related payment shall be distributed into the payment for use right of
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land and the payment for buildings, if it is difficult to be distributed, the whole payment shall be treated as fixed assets.
For intangible assets with a finite service life, from the time when it is available for use, the cost after deducting the sum of the
expected salvage value and the accumulated impairment provision shall be amortized by straight line method during the service life.
While the intangible assets without certain service life shall not be amortized.
At the end of period, the Group shall check the service life and amortization method of intangible assets with finite service life, if
there is any change, it shall be regarded as a change of the accounting estimates. Besides, the Group shall check the service life of
intangible assets without certain service life, if there is any evidence showing that the period of intangible assets to bring the
economic benefits to the enterprise can be prospected, it shall be estimated the service life and amortized in accordance with the
amortization policies for intangible assets with finite service life.
(2) Accounting policies of internal R & D expenses
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.
22. Impairment of long-term assets
For non-current financial Assets of fixed Assets, projects under construction, intangible Assets with limited service life, investing real
estate with cost model, long-term equity investment of subsidiaries, cooperative enterprises and joint ventures, the Group should
judge whether decrease in value exists on the date of balance sheet. Recoverable amounts should be tested for decrease in value if it
exists. Other intangible Assets of reputation and uncertain service life and other non-accessible intangible assets should be tested for
decrease in value no matter whether it exists.
If the recoverable amount is less than book value in impairment test results, the provision for impairment of differences should
include in impairment loss. Recoverable amounts would be the higher of net value of asset fair value deducting disposal charges or
present value of predicted cash flow. Asset fair value should be determined according to negotiated sales price of fair trade. If no
sales agreement exists but with asset active market, fair value should be determined according to the Buyer’s price of the asset. If no
sales agreement or asset active market exists, asset fair value could be acquired on the basis of best information available. Disposal
expenses include legal fees, taxes, cartage or other direct expenses of merchantable Assets related to asset disposal. Present value of
predicted asset cash flow should be determined by the proper discount rate according to Assets in service and predicted cash flow of
final disposal. Asset depreciation reserves should be calculated on the basis of single Assets. If it is difficult to predict the recoverable
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amounts for single Assets, recoverable amounts should be determined according to the belonging asset group. Asset group is the
minimum asset combination producing cash flow independently.
In impairment test, book value of the business reputation in financial report should be shared to beneficial asset group and asset
group combination in collaboration of business merger. It is shown in the test that if recoverable amounts of shared business
reputation asset group or asset group combination are lower than book value, it should determine the impairment loss. Impairment
loss amount should firstly be deducted and shared to the book value of business reputation of asset group or asset group combination,
then deduct book value of all assets according to proportions of other book value of above assets in asset group or asset group
combination except business reputation.
After the asset impairment loss is determined, recoverable value amounts would not be returned in future.
23. Amortization method of long-term deferred expenses
Long-term deferred expenses refer to general expenses with the apportioned period over one year (one year excluded) that have
occurred but attributable to the current and future periods.
24. Payroll
(1) Accounting treatment of short-term compensation
Short-term compensation mainly including salary, bonus, allowances and subsidies, employee services and benefits, medical
insurance premiums, birth insurance premium, industrial injury insurance premium, housing fund, labor union expenditure and
personnel education fund, non-monetary benefits etc. The short-term compensation actually happened during the accounting period
when the active staff offering the service for the Group should be recognized as liabilities and is included in the current gains and
losses or relevant assets cost. Of which the non-monetary benefits should be measured according to the fair value.
(2) Accounting treatment of the welfare after demission
Welfare after demission mainly includes setting drawing plan. Of which setting the drawing plan mainly includes basic endowment
insurance, unemployment insurance and annuity etc, and the corresponding payable and deposit amount should be included into the
relevant assets cost or the current gains and losses when happen.
If an enterprise cancels the labor relationship with any employee prior to the expiration of the relevant labor contract or brings
forward any compensation proposal for the purpose of encouraging the employee to accept a layoff, and should recognize the payroll
liabilities occurred from the demission welfare base on the earlier date between the time when the Group could not one-sided
withdraw the demission welfare which offered by the plan or layoff proposal owning to relieve the labor relationship and the date the
Group recognizes the cost related to the reorganization of the payment of the demission welfare and at the same time includes which
into the current gains and losses. But if the demission welfare is estimated that could not totally pay after the end of the annual report
within 12 months, should be disposed according to other long-term payroll payment.
(3) Accounting treatment of the demission welfare
The inside employee retirement plan is treated by adopting the same principle with the above dismiss ion welfare. The group would
recorded the salary and the social security insurance fees paid and so on from the employee’s service terminative date to normal
retirement date into current profits and losses (dismiss ion welfare) under the condition that they meet the recognition conditions of
estimated liabilities.
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(4) Accounting treatment of the welfare of other long-term staffs
The other long-term welfare that the Group offers to the staffs, if met with the setting drawing plan, should be accounting disposed
according to the setting drawing plan, while the rest should be disposed according to the setting revenue plan.
25. Estimated liabilities
The company should recognize the related obligation as a provision for liability when the obligation meets the following conditions:
(1) That obligation is a present obligation of the enterprise; (2) It is probable that an outflow of economic benefits from the enterprise
will be required to settle the obligation; (3) A reliable estimate can be made of the amount of the obligation.
On the balance sheet date, an enterprise shall take into full consideration of the risks, uncertainty, time value of money, and other
factors pertinent to the Contingencies to measure the estimated liabilities 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 liabilities of an enterprise 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. Besides, the amount recognized for the reimbursement should not exceed the book value of the
estimated liabilities.
(1) Loss contract
The term "loss contract" refers to a contract whose performance of the contractual obligations will inevitably incur costs in excess of
the expected economic benefits. Where an executory contract turns to be a loss contract, and the obligations occur from the loss
contact meet with the above recognition conditions of the estimated liabilities, should recognize the confirmed part of the impairment
losses (if any) which estimated to loss exceed the underlying assets of the contract as the estimated liabilities.
(2) Reorganization obligations
For the reorganization plan which is specific, formal as well as had been public announced, if meet with the above recognition
conditions of the estimated liabilities, should recognize the amount of the estimated liabilities according to the direct expense related
to the reorganization. For the reorganization obligations of the selling business, only when the Group commits to sell partly of the
business (the time signed the restricted selling agreement), could recognize the relevant business of the reorganization.
26. Share-based payment
(1) Accounting treatment of share-based payment
Share-based payment refers to the transaction in order to require the service offered by the employees and other parties that grants the
equity instruments or responsible for the liabilities recognized on the basis of the equity instruments. Share-based payment divided
into equity-settled share-based payment and cash-settled share-based payment.
①Equity-settled share-based payment
It is a share-based payment settled by equity used for exchange the service offered by the staffs and be measured by the fair value on
the grant date of granting the equity instrument for the staffs. When the services are fully rendered during vesting period or specified
performance targets are met, based on the best estimate of the number of the vesting equity instruments during vesting period and
according to the straight-line method to calculate and to include into the relevant cost or expenses/when using the vesting power
immediately after the granting, should include the relevant cost or expenses on the grant date and correspondingly increase the capital
reserve.
On each balance sheet date within the vesting period, the Group makes the best estimate base on the subsequent information newly
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required such as the changes of the vesting staffs’ number to modify the number of the estimated vesting equity instrument. The
above influences of the estimation should be included into the current relevant cost or expenses and correspondingly adjust the
capital surplus.
For equity-settled share-based payment made in return of other parties' services and the fair value of the other parties' services can be
reliably measured, it will be measured based on the fair value of the other parties' services on the date of grant; if the fair value of the
other parties' services cannot be reliably measured but the fair value of equity instruments can be reliably measured, it will be
recognized in relevant costs or expenses and the capital reserves shall be adjusted accordingly at the fair value of such instruments on
the date of the grant.
② Cash-settled share-based payment
The cash-settled share-based payment should be measured according to the fair value of the liabilities recognized based on the shares
or other equity instrument undertaken by the Group. For the cash-settled share-based payment made in return for the rendering of
employee services that may be exercised immediately after the grant, the fair value of the liability incurred by the Group shall, on the
date of the grant, be recognized in relevant costs or expenses and the liabilities shall be increased accordingly. For cash-settled
share-based payment made in return for the rendering of employee services that cannot be exercised until the services are fully
provided during the vesting period or specified performance targets are met, on each balance sheet date within the vesting period, the
services acquired in the current period shall, based on the best estimate of the number of exercisable instruments, be recognized in
relevant costs or expenses and the corresponding liabilities at the fair value of the liability incurred by the Group.
On each balance sheet date and the settlement date before the settlement of the relevant liabilities, the Group should re-measure the
fair value of the liabilities and its changes should be included in the current gains and losses.
(2) Relevant accounting treatment about revision and termination of share-based payment plans
As to the revision on the share-based payment plan made by the Group, if the fair value of the granted equity instrument increases
after the revision, it shall recognize the increase of the service gained according to the increase of the fair value of equity instrument.
The increase of the fair value of equity instrument refers to the balance between the fair value on the revising date of the equity
instruments before and after the revision. If the total fair value of share-base payment decreases after the revision or adopting other
ways against the staffs in the revision, it shall continue to conduct accounting treatment on the service gained as if the revision never
happens, only if the Group cancel partial or total granted equity instrument.
During the vesting period, if the Group cancels the granted equity instrument, the Group shall treat the cancel of granted equity
instrument as accelerating the vesting, and includes the amount shall be recognized during the remained vesting period into current
profit and loss, and also recognize the capital reserves. If staffs or other party can choose to meet the non-vesting conditions but not
meets with them during the vesting period, which will be treated as the cancel of granted equity instrument by the Group.
(3) Accounting treatment of the share-based payment transactions involved with the Group, the shareholders of the Group or the
actual controllers
The share-based equity payment transaction which involved with the Group, the shareholders or actual controllers of the Group, if
one between the settlement enterprises and the service accepted enterprises are within the Group and the others are not, should be
accounting disposed according to the following regulations in the consolidation financial statement of the Group:
① For the settlement enterprises settle by the equity instruments of itself, should dispose the share-based payment transaction as the
share payment of the equity settlement; besides the rest should be disposed as the cash-settled share-based payment.
If the settlement enterprises accept the investor of the service enterprise, should recognize as the long-term equity investment on the
enterprises which accept service according to the fair value of the equity instruments on the granted date or the fair value which
should undertake the liabilities and at the same time be recognized as capital reserve (other capital reserve) or liabilities.
② For the enterprises accept the service without settlement obligations or the equity instruments granted for the staffs of the
enterprises are its own instruments, the share-based payment transaction should be disposed as the equity-settled share-based
payment; for the enterprises accept the service with the settlement obligations and the equity instruments are not its own instruments,
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the share-based payment transaction should be disposed as the cash-settled share-based payment.
The share-based payment transaction occur among each enterprise of the Group, if the enterprises accept service and the settlement
enterprises are not the same enterprises, the recognition and the measurement of the share-based payment transaction among each
individual financial statement of the service accepting enterprises and the settlement enterprises according to the above principles.
27. Other financial instruments such as preferred shares and perpetual capital securities
(1) Distinguish between perpetual capital securities and preferred shares etc.
The financial instruments such as perpetual capital securities and preferred shares issued by the Group that meet with the following
conditions at the same time are regarded as equity instruments:
① the financial instruments not including the contact obligations such as pay for the cash or other financial assets to other parties, or
to exchange the financial assets or financial liabilities under the potential disadvantages;
② if in the future have to use or could use the own equity instruments of the enterprises to settle the financial instruments, for
example, the financial instruments are non-derivative instruments, there would be no contact obligations for delivering the variable
own equity instruments for settlement; if they are derivative instruments, the Group could only settle the financial instruments
through exchange its own equity instruments with a fixed number for the cash or other financial assets with fixed amount.
The other financial instruments issued by the Group should be classified into financial liabilities except for the financial instruments
which could be classified into equity instruments according to the above conditions.
For the financial instruments issued by the Group which are complex financial instruments, should be recognized as an item of
liabilities according to the fair value of the liabilities and at the same time be recognized as “other equity instruments” according to
the amount that the actual received amount deduct the fair value of the liabilities. The transaction expenses occur when issuing the
complex financial instruments should be shared according each proportion of the total issue price between the liabilities and the
equities.
(2) Accounting treatment of perpetual capital securities and preferred shares etc.
The financial instruments such as the perpetual capital securities and preferred shares which be classified as financial liabilities, its
relevant interests, dividends (or stock dividends), profits or losses, and the profits or losses occur from the redemption or the
re-financing, should both be included in the current gains and losses except for the borrowing expenses that meet with the
capitalization conditions (see details to Notes VI 17 “Borrowing expenses”).
For the financial instruments such as the perpetual capital securities and preferred shares which be classified as equity instruments,
their issuance (including re-financing), re-purchase, selling or logout, the Group dispose them as the changes of the equities and the
relevant transaction expenses are also minus from the equities. The Group disposes the distribution of the holder of the equity
instruments as the profits distribution.
The Group not confirms the changes of the fair value of the equity instruments.
28. Revenue
No revenue from selling goods may be recognized unless the following conditions are met simultaneously: the significant risks and
rewards of ownership of the goods have been transferred to the buyer by the enterprise; the enterprise retains neither continuous
management right that usually keeps relation with the ownership nor effective control over the sold goods; the relevant amount of
revenue can be measured in a reliable way; the relevant economic benefits may flow into the enterprise; and the relevant costs
incurred or to be incurred can be measured in a reliable way.
(2) Providing labor services
If the Group can reliably estimate the outcome of a transaction concerning the labor services it provides, it shall recognize the
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
revenue from providing services employing the percentage-of-completion method on the date of the balance sheet. The completed
proportion of a transaction concerning the providing of labor services shall be decided by the proportion of the labor service already
provided to the total labor service to provide.
The outcome of a transaction concerning the providing of labor services can be measured in a reliable way, means that the following
conditions shall be met simultaneously: ① The amount of revenue can be measured in a reliable way; ② The relevant economic
benefits are likely to flow into the enterprise; ③ The schedule of completion under the transaction can be confirmed in a reliable way;
and ④ The costs incurred or to be incurred in the transaction can be measured in a reliable way.
If the outcome of a transaction concerning the providing of labor services can not be measured in a reliable way, the revenue from the
providing of labor services shall be recognized in accordance with the amount of the cost of labor services incurred and expected to
be compensated, and make the cost of labor services incurred as the current expenses. If it is predicted that the cost of labor services
incurred couldn’t be compensated, thus no revenue shall be recognized.
Where a contract or agreement signed between Group and other enterprises concerns selling goods and providing of labor services, if
the part of sale of goods and the part of providing labor services can be distinguished from each other and can be measured
respectively, the part of sale of goods and the part of providing labor services shall be treated respectively. If the part of selling goods
and the part of providing labor services can not be distinguished from each other, or if the part of sale of goods and the part of
providing labor services can be distinguished from each other but can not be measured respectively, both parts shall be conducted as
selling goods.
(3) Construction contract revenue
If the Group can reliably estimate the outcome of a construction contact, the contact revenue and the expenses should be recognized
according to the percentage of completion method on the balance sheet date. The completion progress of the contact should be
recognized according to the proportion of the accumulative actual occurred contact cost among the estimated total cost of the contact.
If the result of the construction contact is reliable for estimate refers to meet the following conditions at the same time: ① the total
revenue of the contact could be reliable measured; ② the economic benefits related to the contact probably flow into the
enterprises;③ the contact cost actual occurred could be clearly distinguish as well as reliable measured; ④ the completion progress
of the contact and cost which would still occur for completing the contact could be reliable confirmed.
If the result of the construction contact could not be reliable estimated while the contact cost could be returned, the contact revenue
should be recognized according to the returnable actual contact cost, and the contact cost should be recognized as contact expenses as
the period it occurs; if the contact cost could not be returned, should recognized as contact expenses immediately when it occurs and
not be confirmed as contact revenue. For the disadvantage factor no longer exist which lead the result of the construction contact
could not be reliable estimated, the revenue and expenses related to the construction contact should be recognized according to the
completion percentage method.
If the estimated total cost of the contact exceeds the total revenue, the estimated losses should be recognized as current expenses.
The accumulatively occurred cost of the contact under construction and the accumulative confirmed gross margin (losses) as well as
the settled price should be listed as the written-off net amount among the balance sheet. The amount the sum of the accumulatively
occurred cost of the contact under construction and the accumulative confirmed gross margin (losses) which exceed the settled price
should be listed as inventory; the part the settled price of the contact under construction exceeds the sum of the accumulatively
occurred cost of the contact under construction and the accumulative confirmed gross margin (losses) should be listed as
prepayments.
(4) Royalty revenue
In accordance with relevant contract or agreement, the amount of royalty revenue should be recognized as revenue on accrual basis.
(5) Interest revenue
The amount of interest revenue should be measured and confirmed in accordance with the length of time for which the Group’s
monetary fund is used by others and the agreed interest rate.
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29. Government subsidies
(1) Judgment basis and accounting treatment of government subsidies related to assets
The Company defines the government subsidies formed as the long-term assets which acquired for purchasing and constructing or by
other methods as the government subsidies related to assets and confirms which as the deferred income and executes the average
distribution as well as includes in the current gains and losses within the service life of the relevant assets.
(2) Judgment basis and accounting treatment of government subsidies related to profits
The Company defines the government subsidies formed as the long-term assets which acquired for purchasing and constructing or by
other methods as the government subsidies related to assets while the rest of which as the government subsidies related to profits.
The government subsidies related to profits used for supplementing the relevant expenses and losses during the follow-up period
should be regarded as the deferred income, and be included in the current gains and losses during the period of confirming the related
expenses; as those used for supplementing the occurred relevant expenses and losses, should be directly included in the current gains
and losses.
30. Deferred income tax assets/deferred income tax liabilities
(1) Income tax of the current period
On the balance sheet date, for the current income tax liabilities (or assets) of the current period as well as the part formed during the
previous period, should be measured by the income tax of the estimated payable (returnable) amount which be calculated according
to the regulations of the tax law. The amount of the income tax payable which is based by the calculation of the current income tax
expenses, are according to the result measured from the corresponding adjustment of the pre-tax accounting profit of 2015 which in
accord to the relevant regulations of the tax law.
(2) Deferred income tax assets and deferred income tax liabilities
The difference between the book value of certain assets and liabilities and their tax assessment basis, as well as the temporary
difference occurs from the difference between the book value of the items which not be recognized as assets and liabilities but could
confirm their tax assessment basis according to the regulations of the tax law, the deferred income tax assets and the deferred income
tax liabilities should be recognized by adopting liabilities law of the balance sheet.
No deferred tax liability is recognized for a temporary difference arising from the initial recognition of goodwill, the initial
recognition of assets or liabilities due to a transaction other than a business combination, which affects neither accounting profit nor
taxable profit (or deductible loss). Besides, no deferred tax assets is recognized for the taxable temporary differences related to the
investments of subsidiary companies, associated enterprises and joint enterprises, and the investing enterprise can control the time of
the reverse of temporary differences as well as the temporary differences are unlikely to be reversed in the excepted future. Otherwise,
the Company should recognize the deferred income tax liabilities arising form other taxable temporary difference.
No deferred taxable assets should be recognized for the deductible temporary difference of initial recognition of assets and liabilities
arising from the transaction which is not business combination, the accounting profits will not be affected, nor will the taxable
amount or deductible loss be affected at the time of transaction. Besides, no deferred taxable assets should be recognized for the
deductible temporary difference related to the investments of the subsidiary companies, associated enterprises and joint enterprises,
which are not likely to be reversed in the expected future or is not likely to acquire any amount of taxable income tax that may be
used for making up such deductible temporary differences. Otherwise, the Company shall recognize the deferred income tax assets
arising from a deductible temporary difference basing on the extent of the amount of the taxable income that is likely to be acquired
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
to make up such deductible temporary differences
For any deductible loss or tax deduction that can be carried forward to the next year, the corresponding deferred income tax asset
shall be determined to the extent that the amount of future taxable income to be offset by the deductible loss or tax deduction to be
likely obtained.
On the balance sheet date, the deferred income tax assets and the deferred income tax liabilities shall be measured at the tax rate
applicable to the period during which the assets are expected to be recovered or the liabilities are expected to be settled.
The book value of deferred income tax assets shall be reviewed at each balance sheet date. If it is unlikely to obtain sufficient taxable
income to offset against the benefit of the deferred income tax asset, the book value of the deferred income tax assets shall be written
down. Any such write-down should be subsequently reversed where it becomes probable that sufficient taxable income will be
available.
(3) Income tax expenses
Income tax expenses include current income tax and deferred income tax.
The rest current income tax and the deferred income tax expenses or revenue should be included into current gains and losses except
for the current income tax and the deferred income tax related to the transaction and events that be confirmed as other comprehensive
income or be directly included in the shareholders’ equity which should be included in other comprehensive income or shareholders’
equity as well as the book value for adjusting the goodwill of the deferred income tax occurs from the business combination.
(4) Offset of income tax
The current income tax assets and liabilities of the Company should be listed by the written-off net amount which intend to executes
the net amount settlement as well as the assets acquiring and liabilities liquidation at the same time while owns the legal rights of
settling the net amount.
The deferred income tax assets and liabilities of the Company should be listed as written-off net amount when having the legal rights
of settling the current income tax assets and liabilities by net amount and the deferred income tax and liabilities is relevant to the
income tax which be collected from the same taxpaying bodies by the same tax collection and administration department or is
relevant to the different taxpaying bodies but during each period which there is significant reverse of the deferred income assets and
liabilities in the future and among which the involved taxpaying bodies intend to settle the current income tax and liabilities by net
amount or are at the same time acquire the asset as well as liquidate the liabilities.
31. Lease
(1) Accounting treatment 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 Company 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.
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(2) Accounting treatments of financial lease
Business of finance leases recorded by the Company as the lessee
On the lease beginning date, the Company 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 Company as the lessor
On the beginning date of the lease term, the Company 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.
32. Other significant accounting policies and estimates
Operation termination refers to the compose part that meet with one of the following conditions which had been disposed by the
Company or be classified to held-to-sold as well as could be individually distinguished in operating and compiling the financial
statement: ① the compose part represents an individual main business or a main operation area; ② the compose part is a part
intends to dispose and plan an individual main business or a main operation area; ③ the compose part is a subsidiary which be
acquired only for resold.
For the details of the accounting treatment of the operation termination, please refer to the relevant description in “Divided as
held-to-sold assets” of this note.
33. Changes in main accounting policies and estimates
(1) Change of accounting policies
□ Applicable √ Not applicable
(2) Change of main accounting estimates
□ Applicable √ Not applicable
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34. Other
VI. Taxation
1. Main taxes and tax rate
Category of taxes Tax basis Tax rate
VAT Taxable income 13% 17%
Business tax Taxable income 5%
Urban maintenance and construction tax Turnover tax payable 7%
Enterprise income tax Income tax payable 25%
Education surtax Turnover tax payable 3%
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
Name Income tax rate
2. Tax preference
3. Other
VII. Notes on major items in consolidated financial statements of the Company
1. Monetary funds
Unit: RMB
Item Closing balance Opening balance
Bank deposits 438,050,215.44 406,098,208.72
Other monetary funds 9,000,000.00
Total 447,050,215.44 406,098,208.72
Other notes
Other monetary fund was the guarantee fund of bank acceptance.
2. Financial assets measured by fair value and the changes be included in the current gains and losses
Naught
3. Derivative financial assets
□ Applicable √ Not applicable
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4. Notes receivable
(1) Notes receivable listed by category
Unit: RMB
Item Closing balance Opening balance
Bank acceptance bill 14,785,699.71 34,433,010.97
Total 14,785,699.71 34,433,010.97
(2) Notes receivable pledged by the Company at the period-end
Not applicable
(3) Notes receivable which had endorsed by the Company or had discounted and had not due on the
balance sheet date at the period-end
Unit: RMB
Amount of recognition termination at the Amount of not terminated recognition at
Item
period-end the period-end
Bank acceptance bill 51,205,793.98
Total 51,205,793.98
(4) Notes transferred to accounts receivable because drawer of the notes fails to executed the contract or
agreement
Not applicable
5. Accounts receivable
(1) Accounts receivable disclosed by category
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Withdra
Book
Proportio wal Proportio Withdrawal Book value
Amount Amount value Amount Amount
n proportio n proportion
n
Accounts receivable
430,330, 30,133,4 400,197,4 198,651 18,200,60 180,450,53
withdrawn bad debt 99.86% 7.00% 99.71% 9.16%
911.35 51.79 59.56 ,132.62 0.69 1.93
provision according
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to credit risks
characteristics
Accounts receivable
with insignificant
single amount for 584,457. 584,457. 584,457 584,457.5
0.14% 100.00% 0.29% 100.00%
which bad debt 52 52 .52 2
provision separately
accrued
430,915, 30,717,9 400,197,4 199,235 18,785,05 180,450,53
Total 100.00% 100.00%
368.87 09.31 59.56 ,590.14 8.21 1.93
Accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end
□ Applicable √ Not applicable
In the groups, accounts receivable adopting aging analysis method to accrue bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
Closing balance
Aging
Accounts receivable Bad debt provision Withdrawal proportion
Subitem within 1 year
Within 1 year 417,212,733.32 20,860,636.67 5.00%
Subtotal within 1 year 417,212,733.32 20,860,636.67 5.00%
1 to 2 years 3,791,826.94 379,182.69 10.00%
Over 3 years 539,492.20 161,847.66 30.00%
3 to 4 years 8,786,858.89 8,731,784.77 99.37%
4 to 5 years 110,148.25 55,074.13 50.00%
Over 5 years 8,676,710.64 8,676,710.64 100.00%
Total 430,330,911.35 30,133,451.79 7.00%
Notes of the basis of recognizing the group:
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable √ Not applicable
In the groups, accounts receivable adopting other methods to accrue bad debt provision:
Accounts receivable (classified by Year end balance
units)
Total 584,457.52 584,457.52 — —
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(2) Accounts receivable withdraw, reversed or collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB11, 932,851.10; the amount of the
reversed or collected part during the Reporting Period was of RMB0.00.
Of which the significant amount of the reversed or collected part during the Reporting Period
Not applicable
(3) The actual write-off accounts receivable
Not applicable
(4) Top 5 of the closing balance of the accounts receivable collected according to the arrears party
Name of units Year end balance Aging Proportion of the total year end Bad debt provision
balance of the accounts
receivable (%)
Customer 63,422,060.48 Within 1 14.72% 3,171,103.02
receivable A year
Customer 33,146,112.29 Within 1 7.69% 1,657,305.61
receivable B year
Customer 32,964,089.18 Within 1 7.65% 1,648,204.46
receivable C year
Customer 22,068,647.76 Within 1 5.12% 1,103,432.39
receivable D year
Customer 17,555,700.00 Within 1 4.07% 877,785.00
receivable E year
Total 169,156,609.71 39.25% 8,457,830.48
(5) Account receivable which terminate the recognition owning to the transfer of the financial assets
(6) The amount of the assets and liabilities formed by the transfer and the continues involvement of
accounts receivable
Not applicable
6. Prepayment
(1) List by aging analysis:
Unit: RMB
Aging Closing balance Opening balance
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Amount Proportion Amount Proportion
Within 1 year 27,493,117.65 97.41% 19,657,116.96 96.30%
1 to 2 years 670,854.15 2.38% 695,831.03 3.40%
2 to 3 years 60,417.69 0.30%
Over 3 years 60,417.69 0.21%
Total 28,224,389.49 -- 20,413,365.68 --
Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in time:
(2) Top 5 of the closing balance of the prepayment collected according to the prepayment target
Name of units Year end balance Aging Proportion of the total year end balance of
the accounts receivable (%)
Supplier A 15,309,738.92 Within 1 year 54.24%
Supplier B 2,133,008.73 Within 1 year 7.56%
Supplier C 1,399,200.00 Within 1 year 4.96%
Supplier D 1,320,000.00 Within 1 year 4.68%
Supplier E 1,257,144.43 Within 1 year 4.45%
Total 21,419,092.08 75.89%
Other notes:
7. Interest receivable
Not applicable
8. Dividend receivable
Not applicable
9. Other accounts receivable
(1) Other accounts receivable disclosed by category
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Withdra
Book
Proportio wal Proportio Withdrawal Book value
Amount Amount value Amount Amount
n proportio n proportion
n
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Other accounts
receivable withdrawn
20,068,4 5,839,51 14,228,94 15,211, 5,363,991 9,847,451.3
bad debt provision 100.00% 29.10% 100.00% 35.26%
60.17 2.15 8.02 442.84 .49 5
according to credit
risks characteristics
20,068,4 5,839,51 14,228,94 15,211, 5,363,991 9,847,451.3
Total 100.00% 29.10% 100.00% 35.26%
60.17 2.15 8.02 442.84 .49 5
Other accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end
□ Applicable √ Not applicable
In the groups, other accounts receivable adopting aging analysis method to accrue bad debt provision:
√Applicable □ Not applicable
Unit: RMB
Closing balance
Aging
Other accounts receivable Bad debt provision Withdrawal proportion
Subitem within 1 year
Within 1 year 9,796,103.68 489,805.18 5.00%
Subtotal within 1 year 9,796,103.68 489,805.18 5.00%
2 to 3 years 29,513.72 2,951.37 10.00%
Over 3 years 5,490,647.88 5,346,755.60 97.38%
3 to 4 years 20,000.00 10,000.00 50.00%
4 to 5 years 267,784.57 133,892.29 50.00%
Over 5 years 5,202,863.31 5,202,863.31 100.00%
Total 15,316,265.28 5,839,512.15 38.13%
Notes of the basis of recognizing the group:
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable √ Not applicable
In the groups, other accounts receivable adopting other methods to accrue bad debt provision:
√ Applicable □ Not applicable
Name of group Year end balance
Total 4,752,194.89
Notes: the content of the non-risk group is the export tax refunds receivable.
(2) Accounts receivable withdraw, reversed or collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB475, 520.66; the amount of the reversed
or collected part during the Reporting Period was of RMB000.
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Of which the significant amount of the reversed or collected part during the Reporting Period
Not applicable.
(3) The actual write-off other accounts receivable
Not applicable.
(4) Other account receivable classified by account nature
Unit: RMB
Nature Closing book balance Opening book balance
Export rebates 4,752,194.89 9,241,792.16
Liquidation amount of investment fund 3,398,275.80 3,398,275.80
Cash pledge 720,000.00 700,000.00
Pretty cash 830,635.53 728,854.26
Liquidation amount of goods payment 548,500.00 548,500.00
Payment for land 8,945,000.00
Others 873,853.95 594,020.62
Total 20,068,460.17 15,211,442.84
(5) Top 5 of the closing balance of the other accounts receivable collected according to the arrears party
Unit: RMB
Closing balance of
Name of the entity Nature Closing balance Aging Proportion%
bad debt provision
Jingzhou Urban
Construction
Investment Payment for land 8,945,000.00 Below1 year 44.57% 447,250.00
Development Co.,
Ltd.
Jingzhou Center
Subtreasury of State Export rebates 4,752,194.89 Below1 year 23.68%
Treasury
Shantou Biyue Liquidation amount
3,125,000.00 Over 5 years 15.57% 3,125,000.00
Plastic Co., Ltd. of investment fund
Hubei Jingzhou
Shashi Agricultural Liquidation amount
548,500.00 Over 5 years 2.73% 548,500.00
Production Materials of goods payment
Co., Ltd.
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Jingzhou Production
Safety Supervision Cash pledge 300,000.00 Over 5 years 1.50% 300,000.00
Bureau
Total -- 17,670,694.89 -- 88.05% 4,420,750.00
(6) Account receivable involving government subsidies
Not applicable
(7) Other account receivable derecognized due to the transfer of financial assets
(8) Amount of transfer other account receivable and assets and liabilities formed by its continuous
involvement
Other notes:
10. Inventory
(1) Category of inventory
Unit: RMB
Closing balance Opening balance
Item Falling price Falling price
Book balance Book value Book balance Book value
reserves reserves
Raw materials 27,653,903.21 88,820.89 27,565,082.32 39,185,122.07 941,716.73 38,243,405.34
Goods in process 56,875,884.18 181,539.41 56,694,344.77 60,066,222.32 687,819.54 59,378,402.78
Inventory goods 108,634,905.49 2,494,610.94 106,140,294.55 194,848,529.59 4,646,173.41 190,202,356.18
Total 193,164,692.88 2,764,971.24 190,399,721.64 294,099,873.98 6,275,709.68 287,824,164.30
(2) Impairment of inventories
Unit: RMB
Increase Decrease
Item Opening balance Reverse or Closing balance
Withdrawal Others Others
write-off
Raw materials 941,716.73 88,820.89 941,716.73 88,820.89
Goods in process 687,819.54 181,539.41 687,819.54 181,539.41
Inventory goods 4,646,173.41 2,494,610.94 4,646,173.41 2,494,610.94
Total 6,275,709.68 2,764,971.24 6,275,709.68 2,764,971.24
Item Specific basis of withdrawal of falling Reasons for reversal Reasons for write-off
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
price reserves of inventory
Raw materials The realizable net value was lower than Consumed
the cost
Goods in process The realizable net value was lower than Consumed
the cost
Inventory goods The realizable net value was lower than Sold
the cost
Turnover materials
(3) Notes of the closing balance of the inventory which includes capitalized borrowing expenses
(4) Completed unsettled assets formed from the construction contact at the period-end
Not applicable
11. Assets divided as held-to-sold
Not applicable
12. Non-current assets due within 1 year
Not applicable
13. Other current assets
Unit: RMB
Item Closing balance Opening balance
Input tax to be deducted 11,406,283.03 14,297,586.28
Tax prepayments 387,633.86
Total 11,406,283.03 14,685,220.14
Other notes:
14. Available-for-sale financial assets
(1) List of available-for-sale financial assets
Unit: RMB
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Available-for-sale equity 21,144,800.00 11,991,017.37 9,153,782.63 21,144,800.00 11,991,017.37 9,153,782.63
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instruments
Measured by cost 21,144,800.00 11,991,017.37 9,153,782.63 21,144,800.00 11,991,017.37 9,153,782.63
Total 21,144,800.00 11,991,017.37 9,153,782.63 21,144,800.00 11,991,017.37 9,153,782.63
(2) Available-for-sale financial assets measured by fair value at the period-end
Not applicable
(3) Available-for-sale financial assets measured by cost at the period-end
Unit: RMB
Book balance Impairment provision Shareholdi Cash
ng bonus of
Investee Opening Opening Decrea proportion the
Increase Decrease Closing period Increase Closing period
period period se among the Reporting
investees Period
Hubei 20,000,000
20,000,000.00 11,991,017.37 11,991,017.37 0.71%
Bank .00
Guangxi
Zhongding 580,800.00 580,800.00 1.41% 75,504.00
Co., Ltd.
Hubei
Shendian
Auto 564,000.00 564,000.00 0.60%
Motor Co.,
Ltd.
21,144,800
Total 21,144,800.00 11,991,017.37 11,991,017.37 -- 75,504.00
.00
(4) Changes of the impairment of the available-for-sale financial assets during the Reporting Period
Not applicable
(5) Relevant notes of the fair value of the available-for-sale equity instruments which seriously fell or
temporarily fell but not withdrawn the impairment provision
Not applicable
15. Investment held-to-maturity
Not applicable
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
16. Long-term accounts receivable
Not applicable
17. Long-term equity investment
Not applicable
18. Investment property
(1) Investment property adopted the cost measurement mode
√ Applicable □ Not applicable
Unit: RMB
Item Houses and buildings Land use right Construction in progress Total
I. Original book value
1. Opening balance 7,934,843.00 7,934,843.00
2. Increased amount
of the period
(1) Outsourcing
(2) Transfer of
inventory\fixed
assets\project under
construction
(3) Increased from
enterprise merger
3. Decreased
amount of the period
(1) Disposal
(2) Other transfer
4. Closing balance 7,934,843.00 7,934,843.00
II. Accumulative
depreciation and
accumulative
amortization
1. Opening balance 2,898,097.46 2,898,097.46
2. Increased amount
157,109.88 157,109.88
of the period
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
(1) Withdrawal or
157,109.88 157,109.88
amortization
3. Decreased
amount of the period
(1) Disposal
(2) Other transfer
4. Closing balance 3,055,207.34 3,055,207.34
III. Depreciation reserves
1. Opening balance
2. Increased amount
of the period
(1) Withdrawal
3. Decreased
amount of the period
(1) Disposal
(2) Other transfer
4. Closing balance
IV. Book value
1. Closing book
4,879,635.66 4,879,635.66
value
2. Opening book
5,036,745.54 5,036,745.54
value
(2) Investment property adopted fair value measurement mode
□ Applicable √ Not applicable
(3) Details of investment property failed to accomplish certification of property
Not applicable
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
19. Fixed assets
(1) List of fixed assets
Unit: RMB
Transportation
Item Houses and buildings Machinery equipment Total
equipment
I. Original book value
1. Opening balance 843,883,536.24 1,962,958,375.53 10,815,874.17 2,817,657,785.94
2. Increased amount of
125,827.00 5,547,677.62 244,628.21 5,918,132.83
the period
(1) Purchase 4,954,048.60 244,628.21 5,198,676.81
(2) Transfer of
project under 125,827.00 593,629.02 719,456.02
construction
(3) Increased from
enterprise merger
3. Decreased amount
0.00 151,992.86 2,541,149.79 2,693,142.65
of the period
(1) Disposal or
151,992.86 2,541,149.79 2,693,142.65
Scrap
4. Closing balance 844,009,363.24 1,968,354,060.29 8,519,352.59 2,820,882,776.12
II. Accumulative
depreciation
1. Opening balance 236,818,332.30 875,850,494.55 6,127,008.34 1,118,795,835.19
2. Increased amount of
17,768,569.74 98,063,160.43 444,707.27 116,276,437.44
the period
(1) Withdrawal 17,768,569.74 98,063,160.43 444,707.27 116,276,437.44
3. Decreased amount
148,600.21 2,347,440.10 2,496,040.31
of the period
(1) Disposal or
148,600.21 2,347,440.10 2,496,040.31
Scrap
4. Closing balance 254,586,902.04 973,765,054.77 4,224,275.51 1,232,576,232.32
III. Depreciation reserves
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
1. Opening balance 2,848,203.34 11,962,547.32 14,810,750.66
2. Increased amount of
the period
(1) Withdrawal
3. Decreased amount
of the period
(1) Disposal or
Scrap
4. Closing balance 2,848,203.34 11,962,547.32 14,810,750.66
IV. Book value
1. Closing book value 586,574,257.86 982,626,458.20 4,295,077.08 1,573,495,793.14
2. Opening book value 604,217,000.60 1,075,145,333.66 4,688,865.83 1,684,051,200.09
(2) List of temporarily idle fixed assets
Unit: RMB
Accumulative Impairment
Item Original book value Book value Notes
depreciation provision
Houses and
8,736,063.10 6,927,877.30 1,757,484.71 50,701.09
buildings
Machinery
813,358.79 813,358.79
equipment
(3) Fixed assets leased in from financing lease
Not applicable
(4) Fixed assets leased out from operation lease
Not applicable
(5) Details of fixed assets failed to accomplish certification of property
Not applicable
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
20. Construction in progress
(1) List of construction in progress
Unit: RMB
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Mating Sewage
78,332,353.28 78,332,353.28 66,464,190.24 66,464,190.24
Treatment Project
Modification of
the 110KV
38,133,049.11 38,133,049.11 38,133,049.11 38,133,049.11
transformer
substation
Saline wastewater
incineration
project such as
sewage
35,047,476.15 35,047,476.15 27,058,639.76 27,058,639.76
N-phosphonomet
hyliminadiacetic
acid and
glyphosate
Optimization of
the pyridine
engineering
5,257,668.35 5,257,668.35 4,385,547.18 4,385,547.18
technology and
the safety
modification
Dynamic 110KV
ionic membrane
4,241,328.73 4,241,328.73 4,240,933.05 4,240,933.05
substation access
system
116 acres public
engineering
projects in 3,481,331.13 3,481,331.13 2,289,680.28 2,289,680.28
Sanonda new area
southeast corner
Pesticide Plant II
III
chloroacetaldehy 1,843,108.85 1,843,108.85 181,715.29 181,715.29
de stepwise
chloride
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
technological
upgrading
projects
Dynamic Sha city
farm heating 430,536.15 430,536.15
pipeline projects
Chlor-alkali
logistic
1,163,214.36 1,163,214.36 499,254.09 499,254.09
Xinxiangrui outer
tube projects
Herbicide factory
PMIDA Alkaline
hydrolysis 1,105,898.47 1,105,898.47
continuous pilot
project
Others 2,996,120.75 2,996,120.75
Total 171,601,549.18 171,601,549.18 143,683,545.15 143,683,545.15
(2) Changes of significant construction in progress
Unit: RMB
Of
Amount Proporti which:
Accumul
that on the Capitaliz
Other ative
transferr estimate amount ation rate
Estimate decrease amount
Name o f Opening ed to Closing d of the Project of the of the Capital
d Increase d amount of
item balance fixed balance project progress capitaliz interests resources
number of the capitaliz
assets of accumul ed of the
period ed
the ative interests period
interests
period input of the
period
Mating
Sewage
108,500, 66,464,1 11,868,1 78,332,3
Treatme 72.20% 72.20% Others
000.00 90.24 63.04 53.28
nt
Project
Modifica
tion of
the 45,000,0 38,133,0 38,133,0
86.55% 86.55% Others
110KV 00.00 49.11 49.11
transfor
mer
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
substatio
n
Saline
wastewat
er
incinerat
ion
project
such as
35,300,0 27,058,6 7,988,83 35,047,4
sewage 99.28% 99.28% Others
00.00 39.76 6.39 76.15
N-phosp
honomet
hylimina
diacetic
acid and
glyphosa
te
Optimiza
tion of
the
pyridine
engineeri
ng 3,910,00 4,385,54 872,121. 5,257,66
134.47% 99% Others
technolo 0.00 7.18 17 8.35
gy and
the
safety
modifica
tion
Dynamic
110KV
ionic
membra 4,900,00 4,240,93 4,241,32
395.68 86.56% 86.56% Others
ne 0.00 3.05 8.73
substatio
n access
system
116
acres
public 6,500,00 2,289,68 1,191,65 3,481,33
53.56% 53.56% Others
engineeri 0.00 0.28 0.85 1.13
ng
projects
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
in
Sanonda
new area
southeast
corner
204,110, 142,572, 21,921,1 164,493,
Total -- -- --
000.00 039.62 67.13 206.75
(3) List of the withdrawal of the impairment provision of the construction in progress
Not applicable
21. Engineering material
Not applicable
22. Liquidation of fixed assets
Not applicable
23. Productive biological assets
(1) Productive biological assets adopted cost measurement mode
□ Applicable √ Not applicable
(2) Productive biological assets adopted fair value measurement mode
□ Applicable √ Not applicable
24. Oil and gas assets
□ Applicable √ Not applicable
25. Intangible assets
(1) List of intangible assets
Unit: RMB
Item Land use right Patent right Non-patent right Others Total
I. Original book
value
1. Opening 231,343,514.07 18,743,699.96 2,500.00 250,089,714.03
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
balance
2. Increased
amount of the period
(1) Purchase
(2) Internal R
&D
(3) Increased
from enterprise
merger
3. Decreased
4,428,080.00 4,428,080.00
amount of the period
(1) Disposal 4,428,080.00 4,428,080.00
4. Closing
226,915,434.07 18,743,699.96 2,500.00 245,661,634.03
balance
II. Total accrued
amortization
1. Opening
44,212,611.83 8,232,584.23 2,500.00 52,447,696.06
balance
2. Increased
1,969,748.30 728,986.44 2,698,734.74
amount of the period
(1)
1,969,748.30 728,986.44 2,698,734.74
Withdrawal
3. Decreased
1,874,561.65 1,874,561.65
amount of the period
(1) Disposal 1,874,561.65 1,874,561.65
4. Closing
44,307,798.48 8,961,570.67 2,500.00 53,271,869.15
balance
III. Depreciation
reserves
1. Opening
32,072,093.53 32,072,093.53
balance
2. Increased
amount of the period
(1)
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Withdrawal
3. Decreased
amount of the period
(1) Disposal
4. Closing
32,072,093.53 32,072,093.53
balance
IV. Book value
1. Closing book
150,535,542.06 9,782,129.29 160,317,671.35
value
2. Opening
155,058,808.71 10,511,115.73 165,569,924.44
book value
The proportion the intangible assets formed from the internal R&D through the Company amount the balance of the intangible assets
at the period-end.
(2) Details of fixed assets failed to accomplish certification of land use right
Not applicable
26. R&D expenses
Not applicable
27. Goodwill
Not applicable
28. Long-term unamortized expenses
Not applicable
29. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets had not been off-set
Unit: RMB
Closing balance Opening balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Assets impairment 52,211,454.19 13,052,863.55 44,084,073.52 11,021,018.38
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
provision
Total 52,211,454.19 13,052,863.55 44,084,073.52 11,021,018.38
(2) Deferred income tax liabilities had not been off-set
Not applicable
(3) Deferred income tax assets or liabilities listed by net amount after off-set
Unit: RMB
Mutual set-off amount of Amount of deferred Amount of deferred
Mutual set-off amount of
deferred income tax income tax assets or income tax assets or
Item deferred income tax
assets and liabilities at liabilities after off-set at liabilities after off-set at
assets and liabilities
the period-end the period-end the period-begin
Deferred income tax
13,052,863.55 11,021,018.38
assets
(4) List of unrecognized deferred income tax assets
Unit: RMB
Item Closing balance Opening balance
Deductible temporary difference 45,984,800.07 45,214,547.42
Deductible losses 38,692,159.11 43,388,031.90
Total 84,676,959.18 88,602,579.32
(5) Deductible losses of unrecognized deferred income tax assets will due the following years
Unit: RMB
Years Closing balance Opening balance Notes
Y 2016 0.00 0.00
Y 2017 0.00 615,390.77
Y 2018 7,866,998.43 10,520,149.83
Y 2019 30,825,160.68 31,712,691.47
Y 2020 0.00 539,799.83
Total 38,692,159.11 43,388,031.90 --
Other notes:
30. Other non-current assets
Unit: RMB
110
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Item Closing balance Opening balance
Land compensation prepayments 5,000,000.00 5,000,000.00
Total 5,000,000.00 5,000,000.00
Other notes:
31. Short-term loans
(1) Category of short-term loans
Unit: RMB
Item Closing balance Opening balance
Guaranteed loan 20,000,000.00
Total 0.00 20,000,000.00
Notes of short-term loans category
(2) List of the short-term loans overdue but not return
Not applicable
32. Financial liabilities measured by fair value and the changes included in the current gains and losses
Not applicable
33. Derivative financial liabilities
□ Applicable √ Not applicable
34. Notes payable
Unit: RMB
Category Closing balance Opening balance
Bank acceptance bill 30,000,000.00
Total 30,000,000.00 0.00
The total amount of the due but not pay notes payable at the period-end was of RMB000.
35. Accounts payable
(1) List of accounts payable
Unit: RMB
Item Closing balance Opening balance
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Within 1 year (including 1 year) 129,957,898.50 95,743,429.46
1 to 2 years (including 2 years) 7,878,699.46 32,840,902.38
2-3years (including 3 years) 1,902,808.47 3,416,655.30
Over 3 years 4,282,368.97 2,356,494.63
Total 144,021,775.40 134,357,481.77
(2) Notes of the accounts payable aging over one year
Unit: RMB
Item Closing balance Unpaid/ Un-carry-over reason
Bluestar (Beijing) Chemical Machinery
2,580,000.00 Unsettled
Co., Ltd.
Jiangsu Leke Energy-saving Technology
1,990,000.00 Unsettled
Co., Ltd.
Jizhou Zhongyi Composite Material Co.,
531,600.00 Unsettled
Ltd
Shanghai Yu Long Mo Separation
448,000.00 Unsettled
Equipment Co., Ltd.
Wuxi Haichang Machinery Equipment
340,000.00 Unsettled
Co., Ltd.
Total 5,889,600.00 --
Other notes:
36. Advance from customers
(1) List of advance from customers
Unit: RMB
Item Closing balance Opening balance
Within 1 year (including 1 year) 5,924,160.52 24,854,970.29
1 to 2 years (including 2 years) 390,663.88 99,517.70
2-3years (including 3 years) 95,073.84 58,832.56
Over 3 years 1,667,326.73 1,652,817.67
Total 8,077,224.97 26,666,138.22
(2) Significant advance from customers aging over one year
Unit: RMB
112
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Item Closing balance Unpaid/ Un-carry-over reason
Retailer A 129,250.00 Unsettled
Retailer B 111,800.00 Unsettled
Retailer C 100,000.00 Unsettled
Retailer D 100,000.00 Unsettled
Retailer E 93,720.00 Unsettled
Total 534,770.00 --
(3) Particulars of settled but unfinished projects formed by construction contract at period-end.
Not applicable
37. Payroll payable
(1) List of Payroll payable
Unit: RMB
Item Opening balance Increase Decrease Closing balance
I. Short-term salary 23,608,851.88 79,148,067.43 94,588,841.12 8,168,078.19
II. Post-employment
benefit-defined 6,699,489.85 18,894,465.61 19,209,489.44 6,384,466.02
contribution plans
III. Termination benefits 199,170.00 199,170.00
Total 30,308,341.73 98,241,703.04 113,997,500.56 14,552,544.21
(2) List of Short-term salary
Unit: RMB
Item Opening balance Increase Decrease Closing balance
1. Salary, bonus,
15,945,567.00 56,403,256.20 67,384,407.56 4,964,415.64
allowance, subsidy
2. Employee welfare 3,211,670.50 3,211,670.50 0.00
3. Social insurance 1,434,398.33 6,355,811.23 6,503,979.47 1,286,230.09
Of which: 1. Medical
1,034,297.19 5,095,888.80 5,568,923.84 561,262.15
insurance premiums
Work-related injury
311,868.39 1,004,557.78 725,725.36 590,700.81
insurance
Maternity insurance 88,232.75 255,364.65 209,330.27 134,267.13
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
4. Housing fund 6,228,886.55 12,835,373.00 17,246,827.09 1,817,432.46
5. Labor union budget
and employee education 341,956.50 241,956.50 100,000.00
budget
Total 23,608,851.88 79,148,067.43 94,588,841.12 8,168,078.19
(3) List of drawing scheme
Unit: RMB
Item Opening balance Increase Decrease Closing balance
1. Basic pension benefits 4,654,726.30 14,258,501.06 14,919,563.26 3,993,664.10
2. Unemployment
1,176,207.24 1,517,740.28 1,089,333.03 1,604,614.49
insurance
Annuity 868,556.31 3,118,224.27 3,200,593.15 786,187.43
Total 6,699,489.85 18,894,465.61 19,209,489.44 6,384,466.02
Other notes:
38. Taxes payable
Unit: RMB
Item Closing balance Opening balance
VAT 15,016,332.53 9,039,619.15
Business tax 12,430.71
Corporate income tax 5,942,688.41 13,798,269.67
Personal income tax 302,489.61 265,402.33
Urban maintenance and construction tax 9,712.61 1,995,399.58
Resource tax 87,506.59 86,809.90
Property tax 417,742.34 67,652.33
Land use tax 201,682.42 31,682.42
Education Surcharge 4,162.57 1,022,110.33
Others 159,551.85 539,089.85
Total 22,141,868.93 26,858,466.27
Other notes:
39. Interest payable
Unit: RMB
Item Closing balance Opening balance
114
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Long-term loan interest of installment
payment of interest and repay the due 753,198.89 1,123,849.31
capital
Total 753,198.89 1,123,849.31
Particulars of significant overdue unpaid interest:
Not applicable
40. Dividends payable
Unit: RMB
Item Closing balance Opening balance
Common stock dividends 250,000.00 250,000.00
Total 250,000.00 250,000.00
Note: Including significant unpaid dividends payable over one year, the unpaid reason shall be disclosed:
41. Other accounts payable
(1) Other accounts payable listed by nature of the account
Unit: RMB
Item Closing balance Opening balance
Carriage 10,557,275.48 6,835,291.65
Energy charge 4,080,486.80
Commission 747,013.63 2,340,403.65
Sewage charge 5,299,186.00 1,763,989.00
Local charge 3,623,874.70 1,430,886.11
Cash pledge 1,919,163.11 1,338,163.11
Export price difference 969,501.53 1,028,363.50
Margin 812,500.00 835,800.00
Repair charge 1,101,275.73 527,757.71
Others 6,920,508.08 5,330,192.28
Total 31,950,298.26 25,511,333.81
(2) Other significant accounts payable with aging over one year
Unit: RMB
Item Closing balance Unpaid/ Un-carry-over reason
Hubei Haozhou Yunsheng Co., Ltd. 600,000.00 Cash pledge
115
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Qichun County Bureau for State-owned
300,270.90 Unsettled
Assets
Jingzhou Xintaida Logistics Co., Ltd. 300,000.00 Cash pledge
Total 1,200,270.90 --
Other notes:
42. Liabilities classified as holding for sale
Not applicable
43. Non-current liabilities due within 1 year
Unit: RMB
Item Closing balance Opening balance
Long-term loans due within 1 year 254,000,000.00 244,000,000.00
Total 254,000,000.00 244,000,000.00
Other notes:
44. Other current-liabilities
Not applicable
45. Long-term loan
(1) Category of long-term loan
Unit: RMB
Item Closing balance Opening balance
Guaranteed loan 544,090,000.00 587,590,000.00
Less: Long-term loans due within 1 year -254,000,000.00 -244,000,000.00
Total 290,090,000.00 343,590,000.00
Notes of short-term loans category:
Other notes including interest rate range:
46. Bonds payable
Not applicable
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
47. Long-term payable
(1) Long-term payable listed by nature of the account
Unit: RMB
Item Closing balance Opening balance
Loan for glyphosate project 0.00 490,000.00
Borrowing for the cooperation project with
Guangzhou Chemical Industry Research 0.00 160,000.00
Institute
Total 0.00 650,000.00
Other notes:
48. Long-term payroll payable
Not applicable
49. Payable
Not applicable
50. Estimated liabilities
Not applicable
51. Deferred revenue
Unit: RMB
Item Opening balance Increase Decrease Closing balance Formed reason
Government
26,570,088.61 2,001,600.44 24,568,488.17
subsidies
Total 26,570,088.61 2,001,600.44 24,568,488.17 --
Item involving government subsidies:
Unit: RMB
Amount recorded
into Related to
Amount of newly
Item Opening balance non-operating Other changes Closing balance assets/related
subsidy
income in report income
period
Pyridine project Related to the
6,883,333.35 491,666.66 6,391,666.69
subsidies assets
117
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Special fund for
Related to the
industry clean 5,509,259.26 388,888.88 5,120,370.38
assets
production
Appropriation for
CTC consuming Related to the
2,916,666.67 500,000.00 2,416,666.67
and eliminating assets
project
Government
Subsidy for Related to the
2,330,000.00 388,333.34 1,941,666.66
Highly toxic assets
pesticide
Special fund for
management of Related to the
733,333.31 122,222.22 611,111.09
source of assets
pollution
Special fund for
transferring
Related to the
environmental 533,333.35 33,333.34 500,000.01
assets
protection
deferred
Land Related to the
7,664,162.67 77,156.00 7,587,006.67
compensates assets
Total 26,570,088.61 2,001,600.44 24,568,488.17 --
Other notes:
52. Other non-current liabilities
Unit: RMB
Item Closing balance Opening balance
Agricultural Development Bank New
120,800,000.00
District Construction Funds
Total 120,800,000.00
Other notes:
53. Share capital
Unit: RMB
Increase/decrease (+/-)
Opening Closing
New shares Capitalized
balance Bonus shares Others Subtotal balance
issued Capital
118
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
reserves
The sum of
593,923,220.00 593,923,220.00
shares
Other notes:
54. Other equity instruments
Not applicable
55. Capital surplus
Unit: RMB
Item Opening balance Increase Decrease Closing balance
Capital premium 254,568,370.25 254,568,370.25
Other capital reserves 8,495,091.72 8,495,091.72
Total 263,063,461.97 263,063,461.97
Other notes, including changes and reason of change:
56. Treasury stock
Not applicable
57. Other comprehensive income
Not applicable
58. Special reserves
Unit: RMB
Item Opening balance Increase Decrease Closing balance
Safety production cost 22,848,859.15 4,403,580.42 1,156,911.45 26,095,528.12
Total 22,848,859.15 4,403,580.42 1,156,911.45 26,095,528.12
Other notes, including changes and reason of change:
59. Surplus reserves
Unit: RMB
Item Opening balance Increase Decrease Closing balance
Statutory surplus
186,884,162.46 186,884,162.46
reserves
119
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Discretionary surplus
3,815,085.65 3,815,085.65
reserves
Total 190,699,248.11 190,699,248.11
Other note, including changes and reason of change
60. Retained earnings
Unit: RMB
Item Reporting Period Last period
Opening balance of retained profits before
1,026,847,680.37 957,050,401.65
adjustments
Opening balance of retained profits after
1,026,847,680.37 957,050,401.65
adjustments
Add: Net profit attributable to owners of the
16,807,555.50 117,678,175.59
Company
Dividend of common stock payable 14,848,080.50 59,392,322.00
Closing retained profits 1,028,807,155.37 1,015,336,255.24
List of adjustment of opening retained profits:
1) RMB0 opening retained profits was affected by retrospective adjustment conducted according to the Accounting Standards for
Business Enterprises and relevant new regulations.
2) RMB0 opening retained profits was affected by changes on accounting policies.
3) RMB0 opening retained profits was affected by correction of significant accounting errors.
4) RMB0 opening retained profits was affected by changes in combination scope arising from same control.
5) RMB0 opening retained profits was affected totally by other adjustments.
61. Revenues and operating costs
Unit: RMB
Reporting Period Same period of last year
Item
Sales revenue Cost of sales Sales revenue Cost of sales
Main operations 988,076,337.88 843,037,392.01 1,227,923,283.93 937,967,817.10
Other operations 17,620,819.62 16,150,709.98 7,328,398.88 3,799,812.61
Total 1,005,697,157.50 859,188,101.99 1,235,251,682.81 941,767,629.71
62. Business tax and surcharges
Unit: RMB
Item Reporting Period Same period of last year
Business tax 33,784.15 70,084.09
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Urban maintenance and construction tax 2,228,193.13 4,834,274.92
Education Surcharge 955,073.55 2,071,832.10
Local education surtax 636,224.36 1,381,221.42
Others 529,708.31
Total 3,853,275.19 8,887,120.84
Other notes:
63. Sale expenses
Unit: RMB
Item Reporting Period Same period of last year
Transport fees 22,966,420.71 14,734,431.08
Export fees 14,602,368.29 13,559,127.57
Employee’s remuneration 1,441,738.11 3,340,894.15
Business travel charges 429,631.00 527,680.10
Handling charges 2,333,120.54 1,309,472.58
Advertising and general publicity expense 263,118.74 265,010.60
Premium 282,610.60 146,304.81
Others 2,923,933.77 2,658,954.62
Total 45,242,941.76 36,541,875.51
Other notes:
64. Administration expenses
Unit: RMB
Item Reporting Period Same period of last year
Employee’s remuneration 22,260,863.72 21,524,335.60
Tax expenses 3,663,047.81 4,800,588.89
Depreciation charge 3,772,945.90 3,383,428.40
Amortization of intangible assets 2,698,734.74 2,237,488.08
Business entertainment fees 786,854.26 930,935.70
Asset insurance fees 1,889,026.78 1,650,150.85
Water & electricity fees 783,891.98 1,010,581.92
Office expenses 935,883.71 849,115.95
Amortization of low-price consumables 964,702.64 1,362,828.63
Business travel charges 492,985.72 322,395.70
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Vehicle costs 149,420.39 198,507.31
Repair charge 573,175.06 537,629.99
Rental fee 550,048.00 433,548.00
Loss on work stoppages 26,150,123.83 6,241,343.86
Others 3,472,234.75 3,441,029.41
Total 69,143,939.29 48,923,908.29
Other notes:
65. Financial expenses
Unit: RMB
Item Reporting Period Same period of last year
Interest expenses 13,239,292.71 12,148,231.97
Interest income -2,195,939.30 -2,421,475.63
Exchange gains and losses -8,178,880.68 2,332,330.66
Others 1,079,524.35 1,833,929.49
Total 3,943,997.08 13,893,016.49
Other notes:
The financial expenses had a YOY decrease of 71.61%, mainly was the influence of exchange rate, the exchange rate revenue had a
YOY increase in the Reporting Period
66. Asset impairment loss
Unit: RMB
Item Reporting Period Same period of last year
I. Bad debt loss 12,408,371.76 9,103,636.37
II. Inventory falling price loss 2,764,971.24 18,513,355.58
Total 15,173,343.00 27,616,991.95
Other notes:
67. Gains and losses from changes in fair value
Not applicable
68. Investment income
Unit: RMB
Item Reporting Period Same period of last year
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Investment income received from holding of
75,504.00
available-for-sale financial assets
Total 75,504.00
Other notes:
69. Non-operating gains
Unit: RMB
Recorded in the amount of the
Item Reporting Period Same period of last year
non-recurring gains and losses
Total gains from disposal of
10,214,203.76 10,214,203.76
non-current assets
Including: Gains from disposal
22,722.11 22,722.11
of fixed assets
Gains from disposal of
10,191,481.65 10,191,481.65
intangible assets
Government subsidies 2,756,200.44 2,909,544.44 2,756,200.44
Others 912,455.78 27,835.00 912,455.78
Total 13,882,859.98 2,937,379.44 13,882,859.98
Government subsidies recorded into current profits and losses
Unit: RMB
Whether
subsidies
influence Special Related to
Distribution Distributio Reporting Same period
Item Nature the current subsidy assets/related
entity n reason Period of last year
profits and or not income
losses or
not
Due to engaged in
special industry that
the state encouraged
Government
Hubei and supported,
Subsidy for Related to the
Department Subsidy gained subsidy Yes No 388,333.34 388,333.34
Highly toxic assets
of Finance (obtaining in line
pesticide
with the law and the
regulations of
national policy)
Special fund Jingzhou Subsidy gained due
Related to the
for Environment Subsidy to confirming with Yes No 122,222.22 122,222.22
assets
management al Protection local government
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of source of Agency attracting
pollution investment and local
supportive policy
etc.
Subsidy gained due
to confirming with
Jingzhou
Sewage local government
Environment Related to the
disposal Subsidy attracting Yes No 33,333.34 33,333.34
al Protection assets
subsidy investment and local
Agency
supportive policy
etc.
China Subsidy gained due
The subsidies National to undertaking the
income of Agricultural state protecting one
Related to the
pesticides Means of Award public utility or Yes No 654,600.00 785,100.00
income
federal Production social necessary
reserve Group Co., products supply or
Ltd. price controlling
Due to engaged in
special industry that
Appropriatio
the state encouraged
n for CTC China
and supported,
consuming National Related to the
Subsidy gained subsidy Yes No 500,000.00 500,000.00
and Chemical assets
(obtaining in line
eliminating Corporation
with the law and the
project
regulations of
national policy)
Due to engaged in
special industry that
the state encouraged
Special fund China
and supported,
for industry National Related to the
Subsidy gained subsidy Yes No 388,888.88 388,888.88
clean Chemical assets
(obtaining in line
production Corporation
with the law and the
regulations of
national policy)
Due to engaged in
special industry that
China
the state encouraged
Pyridine National Related to the
Subsidy and supported, Yes No 491,666.66 491,666.66
project Chemical assets
gained subsidy
Corporation
(obtaining in line
with the law and the
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regulations of
national policy)
Special fund
appropriation
for safety Subsidy from R&D
FINANCE
production of Technical updating Related to the
BUREAU Award Yes No 200,000.00
2014 and transformation, income
OF WUXI
received from etc.
Jingzhou
city
Subsidy gained due
Financial to confirming with
Bureau local government
Land Related to the
development Subsidy attracting Yes No 77,156.00
compensates assets
zone of investment and local
Jingzhou supportive policy
etc.
Financial
Industrial Bureau
Related to the
enterprise development Award Yes No 100,000.00
income
award capital zone of
Jingzhou
Total -- -- -- -- -- 2,756,200.44 2,909,544.44 --
Other notes:
70. Non-operating expenses
Unit: RMB
Recorded in the amount of the
Item Reporting Period Same period of last year
non-recurring gains and losses
Loss on disposal of non-current
3,392.65 7,689.72 3,392.65
assets
Including: Loss on disposal of
3,392.65 7,689.72 3,392.65
fixed assets
Others 7,120.35
Total 3,392.65 14,810.07 3,392.65
Other notes:
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71. Income tax expense
(1) Lists of income tax expense
Unit: RMB
Item Reporting Period Same period of last year
Current income tax expense 8,330,820.19 44,300,841.29
Deferred income tax expense -2,031,845.17 -1,401,479.88
Total 6,298,975.02 42,899,361.41
(2) Adjustment process of accounting profit and income tax expense
Unit: RMB
Item Reporting Period
Total profits 23,106,530.52
Current income tax expense accounted by tax and relevant
5,776,632.63
regulations
Influence of income tax before adjustment 134,955.00
Influence of not deductable costs, expenses and losses 1,049,037.13
Influence of deductible losses of unrecognized deferred income
-1,156,713.57
tax assets used in previous years
Influence of deductible temporary difference or deductible losses
495,063.83
of deferred income tax assets derecognized in Reporting Period.
Income tax expense 6,298,975.02
Other notes:
72. Other comprehensive income
See note.
73. Supplementary information to cash flow statement
(1) Other cash received relevant to operating activities:
Unit: RMB
Item Reporting Period Same period of last year
Interest income 2,195,939.30 2,421,475.63
Finance subsidies 754,600.00 985,100.00
Allowance for payment and others, etc. 1,370,463.47 2,651,426.93
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Collect A/B shares withholding individual
214,587.41 4,210,806.28
income tax
Total 4,535,590.18 10,268,808.84
Note to other cash received relevant to operating activities:
(2) Other cash paid relevant to operating activities:
Unit: RMB
Item Reporting Period Same period of last year
Transport fees 22,966,420.71 14,734,431.08
Export fees 11,335,628.67 8,496,297.26
Handling charges 2,333,120.54 1,309,472.58
Business entertainment fees 1,291,244.83 930,935.70
Water & electricity fees 810,719.18 1,010,581.92
Office expenses 1,436,928.17 849,115.95
Premium 2,171,637.38 1,796,455.66
Business travel charges 954,517.82 875,240.56
Advertising and general publicity expense 263,118.74 265,010.60
Others 1,874,918.76 2,728,619.42
Total 45,438,254.80 32,996,160.73
Note to other cash paid relevant to operating activities:
(3) Other cash received relevant to investment activities
Not applicable
(4) Other cash paid relevant to investment activity
Not applicable
(5) Other cash received relevant to financing activities
Unit: RMB
Item Reporting Period Same period of last year
Agricultural Development Bank New
120,800,000.00
District Construction Funds
Total 120,800,000.00
Note to other cash received relevant to financing activities:
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(6) Other cash paid relevant to financing activities
Unit: RMB
Item Reporting Period Same period of last year
Freeze of margin notes 9,000,000.00 1,500,000.00
Total 9,000,000.00 1,500,000.00
Note to other cash paid relevant to financing activities:
74. Supplemental information for Cash Flow Statement
(1) Supplemental information for Cash Flow Statement
Unit: RMB
Supplemental information Reporting Period Same period of last year
1. Reconciliation of net profit to net cash
-- --
flows generated from operating activities
Net profit 16,807,555.50 117,644,347.98
Add: Provision for impairment of assets 15,173,343.00 27,616,991.95
Depreciation of fixed assets, of oil-gas
116,433,547.32 94,263,333.78
assets, of productive biological assets
Amortization of intangible assets 2,698,734.74 2,237,488.08
Losses on disposal of fixed assets, intangible
assets and other long-term assets (gains: -10,210,811.11 7,689.72
negative)
Financial cost (gains: negative) 13,239,292.71 12,148,231.97
Investment loss (gains: negative) -75,504.00
Decrease in deferred income tax assets
-2,031,845.17 -1,401,479.88
(gains: negative)
Decrease in inventory (gains: negative) 100,935,181.10 -31,611,280.98
Decrease in accounts receivable from
-212,292,136.85 -195,550,207.80
operating activities (gains: negative)
Increase in payables from operating
6,041,561.38 -44,631,864.20
activities (decrease: negative)
Net cash flows generated from operating
46,718,918.62 -19,276,749.38
activities
2. Significant investing and financing
activities without involvement of cash -- --
receipts and payments
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3. Net increase in cash and cash equivalents: -- --
Closing balance of cash 438,050,215.44 427,847,092.10
Less: Opening balance of cash 406,098,208.72 418,847,736.46
Net increase in cash and cash equivalents 31,952,006.72 8,999,355.64
(2) Net Cash paid of obtaining the subsidiary
Not applicable
(3) Net Cash receive from disposal of the subsidiary
Not applicable
(4) Cash and cash equivalents
Unit: RMB
Item Closing balance Opening balance
I. Cash 438,050,215.44 406,098,208.72
Bank deposit on demand 438,050,215.44 406,098,208.72
III. Closing balance of cash and cash
438,050,215.44 406,098,208.72
equivalents
Other notes:
75. Notes to items of changes in owner's equity
Not applicable
76. The assets with the ownership or use right restricted
Unit: RMB
Item Closing book value Restricted reason
Monetary capital 9,000,000.00 Cash deposit of bank acceptance
Total 9,000,000.00 --
Other notes:
77. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Closing foreign currency Closing convert to RMB
Item Exchange rate
balance balance
Monetary capital -- -- 64,929,986.32
Including: USD 9,789,817.61 6.6324 64,929,986.32
Account receivable -- -- 277,408,823.09
Including: USD 41,826,310.70 6.6324 277,408,823.09
Other notes:
(2) Note to oversea entities including: for significant oversea entities, shall disclose main operating place,
recording currency and selection basis, if there are changes into recording currency, shall also disclose the
reason.
□ Applicable √ Not applicable
78. Arbitrage
Not applicable.
79. Other
VIII. Changes of merge scope
1. Business combination not under the same control
(1) Business combination under the same control during the Reporting Period
Not applicable.
(2) Combination cost and goodwill
Not applicable.
(3) The identifiable assets and liabilities of acquiree at purchase date
Not applicable.
(4) The profit or loss from equity held by the date before acquisition in accordance with the fair value
measured again
Whether there is a transaction that through multiple transaction step by step to realize enterprises merger and gaining the control
during the Reporting Period
□ Yes √ No
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
(5) Note to merger could not be determined reasonable consideration or Identifiable assets, Fair value of
liabilities of the acquiree at acquisition date or closing period of the merge
Not applicable.
(6) Other notes
2. Business combination under the same control
(1) Business combination under the same control during the Reporting Period
Not applicable.
(2) Combination cost
Not applicable.
(3) The book value of the assets and liabilities of the combined party at combining date
Not applicable.
3. Counter purchase
Not applicable.
4. The disposal of subsidiary
Whether there is a single disposal of the investment to subsidiary and lost control
□ Yes √ No
Whether there are multiple transactions step by step dispose the investment to subsidiary and lost control in Reporting Period
□ Yes √ No
5. Other reasons for the changes in combination scope
Not applicable.
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6. Other
IX. Equity in other entities
1. Equity in subsidiary
(1) The structure of the enterprise group
Main operating Nature of Holding percentage (%)
Name Registration place Way of gaining
place business Directly Indirectly
Sanonda
(Jingzhou)
Manufacturing
Pesticide Jingzhou Jingzhou 100.00% Investment
industry
Chemical Co.,
Ltd.
Hubei Sanonda
Foreign Trading Jingzhou Jingzhou Trading 100.00% Investment
Co., Ltd.
Jingzhou
Under the same
Hongxiang Manufacturing
Jingzhou Jingzhou 100.00% control business
Chemicals Co., industry
combination
Ltd.
Notes: holding proportion in subsidiary different from voting proportion:
Basis of holding half or less voting rights but still been controlled investee and holding more than half of the voting rights not been
controlled investee:
Significant structure entities and controlling basis in the scope of combination:
Basis of determine whether the Company is the agent or the principal:
Other notes:
(2) Significant not wholly owned subsidiary
Not applicable.
(3) The main financial information of significant not wholly owned subsidiary
Not applicable.
(4) Significant restrictions of using enterprise group assets and pay off enterprise group debt
Not applicable.
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(5) Provide financial support or other support for structure entities incorporate into the scope of
consolidated financial statements
Not applicable.
2. The transaction of the Company with its owner’s equity share changed but still controlling the subsidiary
Not applicable.
3. Equity in joint venture arrangement or associated enterprise
Not applicable.
4. Significant common operation
Not applicable.
5. Equity of structure entity not including in the scope of consolidated financial statements
Not applicable.
6. Other
X. The risk related financial instruments
Main financial instruments of the Company included: Equity investment, loans, accounts receivable, accounts payable, etc., all the
details of the financial instruments, see related projects of “Note.VI". Risks related to financial instruments and risk management
policies to reduce risks are as follows. The management should control and monitor the risk exposure to ensure all risks within
defined scope.
The Company use sensitivity analysis technology to analyze the reasonable of risk variables, influence of probable changes to the
current profits and Stockholders' equity. Because rarely any risk variables change in isolation, and the correlation between variables
for the eventual impact of the change of a risk variables will have a significant effect, thus, the aforesaid content was processing
under the assumption of the change of each variable was conducted independently.
(I) Risk management objectives and policies
The goals of Company engaged in the risk management is to achieve the proper balance between the risks and benefits, reduced the
negative impact to the Company operating performance risk to a minimum, maximized the profits of shareholders and other equity
investors. Based on the risk management goal, the basic strategy of the Company's risk management is determine and analyze the
various risks faced by the Company, set up the bottom line of risk and conducted appropriate risk management, and timely
supervised various risks in a reliable way and controlled the risk within the range of limit.
1. Market risk
(1) Foreign exchange risk
Foreign exchange risk is referred to the risk incurred due to loss of changes in exchange rate. The Company’s foreign exchange risk
was mainly related to USD, excepting the Company’s export sale business settled by USD, in USD, the other main business settled
by RMB. On 30 June 2016, in addition to the following assets or liabilities in statement was USD, the Company’s assets or liabilities
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
was RMB balance. The foreign exchange risk incurred by assets and liabilities of foreign balance may have impact to the operation
results of the Company.
Item Closing amount Opening amount
Cash and cash equivalents 64,929,986.32 11,972,040.83
Account receivable 277,408,823.09 139,665,775.45
Sensitive analysis of foreign exchange risk:
Assumption of sensitive analysis of foreign exchange risk: all net investment arbitrage in overseas operation and cash flow arbitrage
were highly effective. Base on the aforesaid assumption and remain no change in other variables, influence of change of exchange
rate to current profits and losses and equity of shareholders was followed:
Item Change Reporting Period Same period of last year
The Company pay close attention to influence of change in exchange rate to the foreign exchange rate of the Company The Company
recently is according to the Forex Sale and Purchase Business Management and Operation Method of China National Chemical
Financial Corporation issued by the Financial Assets Company authorized by China National Chemical Corporation.
(2) Interest rate risk- cash flow change risk
Cash flow change risk caused by financial instruments due to interest rate change is related to floating interest rate of bank loan. The
policy of the Company is to maintain the floating rate of the loan
Sensitive analysis of interest rate risk:
Sensitive analysis of interest rate risk basing on the following assumption: the change of market interest rate influences interest
income and cost of variable rate of financial instruments;
Base on the aforesaid assumption and remain no change in other variables, influence of change of interest rate to current profits and
losses and equity of shareholders was followed:
Item Change Reporting Period Same period of last year
2. Credit risk
On 30 June 2016, the largest credit risk exposure what may lead to the financial losses was the other party of the contract failed to
fulfill the obligations and causes loss of the Company’s financial assets and financial guarantee, which including:
book value of financial assets recognized in consolidated balance sheet; as for the financial instruments measured at fair value, the
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
book value reflect its risk exposure, but not the largest one, the largest risk exposure will change when the future fair value changed.
In order the reduce the credit risk, the Company establish credit assessment group response for recognizing line of credit,
conducting credit approval and other monitor procedures to ensure that the necessary measures were used to recycle expired claims.
In addition, the Company at each balance sheet date, review every single receivables recycling situation, to ensure that the money
unable to recycle withdrawn provision for bad debt fully. Thus, the Company management believed that have assume the credit risk
the Company shouldered had been greatly reduced.
The company's working capital was in bank with higher credit rating, so credit risk of working capital was low.
On balance sheet date, the single recognition of impairment, the amount of Jiangxi Nanchang Red Valley Plant Protection Center,
through multiple collection failed, the Company had fully withrawn bad debt provision,
Due to the risk exposure of the Company distributed at multiple contract parties and multiple clients, there was no significant
concentration of credit risk in the Company.
3. Liquidity Risk
When managing liquidity risk, the Company maintained the management’s believe that supervising the sufficient cash and cash
equivalents to meet the operating demand of the Company and reduce the influence of the fluctuation of cash flow. The management
of the Company supervises the usage situation of the bank loan and ensures the loan agreement.
The Company considered the bank loan as the capital resource. On 30 June 2016, the unused bank loan of the Company was
RMB1295.91 million.
The analysis of financial liabilities according to the maturity of un-discounted remaining contract obligation was as following:
Item Within 1 year 1-3years (including 3 3-5years (including 5 Over 5 years
(including 1 year) years) years)
Short-term loans
Long-term borrowings 254,000,000.00 290,090,000.00
(II) Financial assets transfer
No such cases during Reporting Period.
XI. The disclosure of the fair value
Not applicable.
XII. Related party and related Transaction
1. Information related to parent company of the Company
Proportion of voting
Proportion of share
rights owned by
Name of parent held by parent
Registration place Nature of business Registered capital parent company
company company against the
against the Company
Company (%)
(%)
Production and
Jingzhou Sanonda operation of
Jingzhou, Hubei 240,661,000.00 20.15% 20.15%
Co., Ltd. pesticide and
chemicals products
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Notes: Information on the parent company:
Note: The finial control of the Company was China National Chemical Corporation China National Chemical Corporation
(hereinafter referred to as Chemical Corporation) held 100.00% equity of China National Agrochemical Corporation, while China
National Agrochemical Corporation held 100.00% equity of Sanonda Group Corporation, and China National Chemical Corporation
is a central enterprise under the management of State-owned Assets Supervision and Administration Commission of the State
Council.
The finial control of the Company was China National Chemical Corporation
Other notes:
2. Subsidiaries of the Company
See details to Notes IV.
3. Information on the joint ventures and associated enterprises of the Company
The details of significant joint venture and associated enterprise of the Company
4. Information on other related parties of the Company
Name Relationship
China National Chemical Corporation The finial control party
Jiamusi Heilong Agrochemicals Co., Ltd. Under the same control of China National Chemical Corporation
Beijing Grand AgroChem., Ltd. Under the same control of China National Chemical Corporation
Bluestar (Beijing) Chemical Machinery Co., Ltd. Under the same control of China National Chemical Corporation
China National Agrochemical Corporation Under the same control of China National Chemical Corporation
Jiangsu Anpon Electrochemical Co., Ltd. Under the same control of China National Chemical Corporation
Shangdong Dacheng Agrochemical Co., Ltd. Under the same control of China National Chemical Corporation
China National Chemical Financial Corporation Under the same control of China National Chemical Corporation
Bluestar Environmental Engineering Co., Ltd. Under the same control of China National Chemical Corporation
Haohua Engineering Co., Ltd. Under the same control of China National Chemical Corporation
ADAMA Agricultural Solutions Ltd. Under the same control of China National Chemical Corporation
Other notes:
5. List of related-party transactions
(1) Information on acquisition of goods and reception of labor service (unit: ten thousand Yuan)
Information on acquisition of goods and reception of labor service
Unit: RMB
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
The approval trade Whether exceed trade Same period of last
Related-party Content Reporting Period
credit credit or not year
Bluestar (Beijing)
Chemical Equipment cost 2,777.78 No 31,538.46
Machinery Co., Ltd.
Beijing Grand Purchase of raw
6,094,017.09 No
AgroChem.,Ltd. material
Haohua Engineering
Engineering Co., materials and 2,586,371.59
Ltd. services
Information of sales of goods and provision of labor service
Unit: RMB
Related-party Content Reporting Period Same period of last year
ADAMA Agricultural Solutions
Sales of pesticides 87,387,039.04 56,580,674.73
LTD.
Jiangsu Anpon Electrochemical
Sales of pesticides 223,008.85
Co., Ltd.
Notes:
(2) Related trusteeship/contract
Not applicable.
(3) Information of related lease
Not applicable.
(4) Related-party guarantee
The Company was guarantor:
Unit: RMB
Execution accomplished
Secured party Guarantee amount Start date End date
or not
Hubei Sanonda Foreign
120,000,000.00 23 June2013 22 June 2017 Yes
Trading Co., Ltd.
Hubei Sanonda Foreign
65,000,000.00 26 January 2014 26 January 2017 Yes
Trading Co., Ltd.
Hubei Sanonda Foreign
64,000,000.00 11 December 2013 10 December 2018 No
Trading Co., Ltd.
Hubei Sanonda Foreign 60,000,000.00 29 April 2014 28 April 2017 Yes
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2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
Trading Co., Ltd.
Hubei Sanonda Foreign
60,000,000.00 29 April 2015 28 April 2018 Yes
Trading Co., Ltd.
Hubei Sanonda Foreign
50,000,000.00 22 January 2013 21 January 2017 Yes
Trading Co., Ltd.
The Company was Secured party
Unit: RMB
Execution accomplished
Guarantor: Guarantee amount Start date End date
or not
Jingzhou Sanonda Co.,
170,000,000.00 26 December 2014 25 December 2019 No
Ltd.
Jingzhou Sanonda Co.,
140,000,000.00 1 February 2015 1 January 2018 Yes
Ltd.
Jingzhou Sanonda Co.,
140,000,000.00 1 February 2016 31 January 2019 No
Ltd.
Jingzhou Sanonda Co.,
50,000,000.00 13 March 2015 13 March 2018 Yes
Ltd.
China National
Agrochemical 300,000,000.00 19 November 2014 17 November 2019 No
Corporation
China National
Agrochemical 150,000,000.00 10 September 2013 10 September 2018 No
Corporation
China National
Agrochemical 50,000,000.00 19 March 2015 19 March 2019 No
Corporation
China National Chemical
200,000,000.00 25 September 2013 25 September 2020 No
Corporation
China National Chemical
160,000,000.00 10 June 2014 9 June 2021 No
Corporation
China National Chemical
150,000,000.00 14 October 2013 13 October 2020 No
Corporation
Notes:
(5) Inter-bank lending of capital of related parties：
Not applicable.
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(6) Related party asset transfer and debt restructuring
Not applicable.
(7) Rewards for the key management personnel
Unit: RMB
Item Reporting Period Same period of last year
Rewards for the key management
850,000.00 840,791.00
personnel
(8) Other related-party transactions
1. The parent company of the Group—Sanonda Group Corporation paid & gained wages and social security through the Group with
a total of RMB148, 392.6
2. Balance of bank deposit of Chemchina Finance Co., Ltd. of the Group at the period- begin was of RMB140,000,000.00,
period-end was of RMB 100,958,989.89, and balance of short-term loan at the period-begin was of RMB 0, period-end was of RMB0;
Interest of bank deposit of this year was of RMB958,989.89.
6. Receivables and payables of related parties
(1) Receivables
Unit: RMB
Closing balance Opening balance
Name o f item Related-party
Book balance Bad debt provision Book balance Bad debt provision
ADAMA
Account receivable Agricultural 63,422,060.48 3,171,103.02 19,683,913.31 984,195.67
Solutions Ltd
(2) Payables
Unit: RMB
Name o f item Related-party Closing book balance Opening book balance
Bluestar (Beijing) Chemical
Accounts payable 2,580,000.00 6,094,350.00
Machinery Co., Ltd.
Accounts payable Haohua Engineering Co., Ltd. 0.00 171,940.88
Accounts payable Beijing Grand AgroChem.,Ltd. 709,260.00 79,260.00
Jiamusi Heilong Agrochemicals
Accounts received in advance 10,020.00 10,020.00
Co., Ltd.
Accounts received in advance Shangdong Dacheng 1,500.00 1,500.00
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Agrochemical Co., Ltd.
7. Related party commitment
Not applicable.
8. Other
XIII. Stock payment
1. The Stock payment overall situation
□ Applicable √ Not applicable
2. The Stock payment settled by equity
□ Applicable √ Not applicable
3. The Stock payment settled by cash
□ Applicable √ Not applicable
4. Modification and termination of the stock payment
Not applicable.
5. Other
XIV. Commitments
1. Significant commitments
As of 30 June 2016, there were no significant commitments to be disclosed.
2. Contingency
(1) Significant contingency at balance sheet date
As of 30 June 2016, there were no significant contingency to be disclosed.
(2) The Company have no significant contingency to disclose, also should be stated
There was no significant contingency in the Company.
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3. Other
XV. Events after balance sheet date
1. Significant events had not adjusted
Not applicable.
2. Profit distribution
Not applicable.
3. Sales return
Not applicable.
4. Notes of other significant events
As of 30 June 2016, there was no other significant event after balance sheet date.
XVI. Other significant events
1. The accounting errors correction in previous period
Not applicable.
2. Debt restructuring
Not applicable.
3. Replacement of assets
Not applicable.
4. Pension plan
Not applicable.
5. Discontinuing operation
Not applicable.
6. Segment information
Not applicable.
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7. Other important transactions and events have an impact on investors decision-making
Not applicable.
XVII. Notes of main items in the financial statements of the Company
1. Accounts receivable
(1) Accounts receivable classified by category
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Withdra
Book
Proportio wal Proportio Withdrawal Book value
Amount Amount value Amount Amount
n proportio n proportion
n
Accounts receivable
withdrawal of bad
633,023, 14,508,4 618,514,9 361,912 9,638,653 352,274,07
debt provision of by 99.91% 2.29% 99.84% 2.66%
385.70 11.52 74.18 ,727.20 .80 3.40
credit risks
characteristics:
Accounts receivable
with insignificant
single amount for 584,457. 584,457. 584,457 584,457.5
0.09% 100.00% 0.16% 100.00%
which bad debt 52 52 .52 2
provision separately
accrued
633,607, 15,092,8 618,514,9 362,497 10,223,11 352,274,07
Total 100.00% 2.38% 100.00% 2.82%
843.22 69.04 74.18 ,184.72 1.32 3.40
Accounts receivable with single significant amount and withdrawal bad debt provision separately at end of period
□ Applicable √ Not applicable
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
Closing balance
Aging
Account receivable Bad debt provision Withdrawal proportion
Subentry within 1 year
Within 1 year 131,629,920.04 6,581,496.00 5.00%
Subtotal of within 1 year 131,629,920.04 6,581,496.00 5.00%
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1 to 2 years 3,791,826.94 379,182.69 10.00%
2 to 3 years 539,492.20 161,847.66 30.00%
Over 3 years 7,440,959.29 7,385,885.17 99.26%
4 to 5 years 110,148.25 55,074.13 50.00%
Over 5 years 7,330,811.04 7,330,811.04 100.00%
Total 143,402,198.47 14,508,411.52
Notes:
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, accounts receivable adopting other methods to withdraw bad debt provision:
Name of the group Closing balance
Accounts receivable with significant single amount and individually withdrawn bad debt provision at the end of the year
Closing balance
Account receivable
(2) Accounts receivable withdraw, reversed or collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB4,869,757.72; the amount of the reversed
or collected part during the Reporting Period was of RMB000.
Significant amount of reversed or recovered bad debt provision: not applicable.
(3) Particulars of the actual verification of accounts receivable during the Reporting Period
Not applicable.
(4) Top five of account receivable of closing balance collected by arrears party
The total amount of top five of account receivable of closing balance collected by arrears party was RMB547,242,999.52, 86.37% of
total closing balance of account receivable, the relevant closing balance of bad debt provision withdrawn was RMB2,881,090.61.
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(5) Derecogniziton of account receivable due to the transfer of financial assets
(6) The amount of the assets and liabilities formed by the transfer and the continues involvement of
accounts receivable
Not applicable.
2. Other accounts receivable
(1) Other account receivable classified by category
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Category Withdra
Book
Proportio wal Proportio Withdrawal Book value
Amount Amount value Amount Amount
n proportio n proportion
n
Other accounts
receivable withdrawn
6,020,14 5,274,88 745,265.1 6,784,7 5,248,915 1,535,805.5
bad debt provision 100.00% 87.62% 100.00% 77.36%
9.56 4.43 3 21.32 .77 5
according to credit
risks characteristics
6,020,14 5,274,88 745,265.1 6,784,7 5,248,915 1,535,805.5
Total 100.00% 87.62% 100.00% 77.36%
9.56 4.43 3 21.32 .77 5
Other receivable with single significant amount and withdrawal bad debt provision separately at end of period：
□ Applicable √ Not applicable
In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
Closing balance
Aging
Other accounts receivable Bad debt provision Withdrawal proportion
Subentry within 1 year
Within 1 year 605,063.68 30,253.18 5.00%
Subtotal of within 1 year 605,063.68 30,253.18 5.00%
1 to 2 years 29,513.72 2,951.37 10.00%
Over 3 years 5,385,572.16 5,241,679.88 97.33%
3 to 4 years 20,000.00 10,000.00 50.00%
4 to 5 years 267,784.57 133,892.29 50.00%
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Over 5 years 5,097,787.59 5,097,787.59 100.00%
Total 6,020,149.56 5,274,884.43
Notes:
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable √ Not applicable
In the groups, other accounts receivable adopting other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
(2) Accounts receivable withdraw, reversed or collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB25,968.66; the amount of the reversed or
collected part during the Reporting Period was of RMB000.
Of which the significant amount of the reversed or collected part during the Reporting Period: not applicable.
(3) Particulars of the actual verification of other accounts receivable during the Reporting Period
(4) Other account receivable classified by account nature
Unit: RMB
Nature Closing book balance Opening book balance
Liquidation amount of investment fund 3,398,275.80 3,398,275.80
Turnover accounts with the subsidiary 0.00 1,120,146.36
Pretty cash 771,957.64 714,944.37
Cash pledge 520,000.00 500,000.00
Liquidation amount of goods payment 548,500.00 548,500.00
Others 781,416.12 502,854.79
Total 6,020,149.56 6,784,721.32
(5) The top five other account receivable classified by debtor at period-end
Unit: RMB
Closing balance of
Name of the entity Nature Closing balance Aging Proportion%
bad debt provision
Shantou Biyue Plastic Liquidation amount
3,125,000.00 Over 5 years 51.91% 3,125,000.00
Co., Ltd. of investment fund
Hubei Jingzhou
Shashi Agricultural Liquidation amount
548,500.00 Over 5 years 9.11% 548,500.00
Production Materials of goods payment
Co., Ltd.
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Jingzhou Production
Safety Supervision Cash pledge 300,000.00 Over 5 years 4.98% 300,000.00
Bureau
Jingzhou Real
House renewal fund 237,784.57 4-5 years 3.95% 118,892.29
Estate Administration
Zhuhai Chuchang
International Liquidation amount
144,288.80 Over 5 years 2.40% 144,288.80
Development Co., of investment fund
Ltd.
Total -- 4,355,573.37 -- 72.35% 4,236,681.09
(6) Account receivable involving government subsidies
Not applicable.
(7) Other account receivable derecognized due to the transfer of financial assets
Not applicable.
(8) Amount of transfer other account receivable and assets and liabilities formed by its continuous
involvement
Not applicable.
3. Long-term equity investment
Unit: RMB
Closing balance Opening balance
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Investment to the
80,026,635.41 24,500,000.00 55,526,635.41 80,026,635.41 24,500,000.00 55,526,635.41
subsidiary
Total 80,026,635.41 24,500,000.00 55,526,635.41 80,026,635.41 24,500,000.00 55,526,635.41
(1) Investment to the subsidiary
Unit: RMB
Withdrawn
Closing balance
impairment
Investee Opening balance Increase Decrease Closing balance of impairment
provision in the
provision
Reporting Period
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Jingzhou
Hongxiang
37,619,905.41 37,619,905.41
Chemicals Co.,
Ltd.
Sanonda
(Jingzhou)
30,413,700.00 30,413,700.00 24,500,000.00
Pesticide Chemical
Co., Ltd.
Hubei Sanonda
Foreign Trading 11,993,030.00 11,993,030.00
Co., Ltd.
Total 80,026,635.41 80,026,635.41 24,500,000.00
(2) Investment to joint ventures and associated enterprises
Not applicable.
(3) Other notes
4. Revenues and operating costs
Unit: RMB
Reporting Period Same period of last year
Item
Sales revenue Cost of sales Sales revenue Cost of sales
Main operations 917,457,017.85 778,462,461.80 1,189,551,459.81 903,197,965.34
Other operations 79,431,984.15 77,961,874.51 70,429,352.26 68,194,146.03
Total 996,889,002.00 856,424,336.31 1,259,980,812.07 971,392,111.37
Other notes:
5. Investment income
Unit: RMB
Item Reporting Period Same period of last year
Investment income received from holding of
75,504.00
available-for-sale financial assets
Total 75,504.00
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6. Other
XVIII. Supplementary materials
1. Items and amounts of extraordinary gains and losses
√ Applicable □ Not applicable
Unit: RMB
Item Amount Explanation
Gains/losses on the disposal of non-current
10,210,811.11
assets
Tax rebates, reductions or exemptions due to
approval beyond authority or the lack of 2,756,200.44
official approval documents
Other non-operating income and expenses
912,455.78
other than the above
Less: Income tax effects 3,469,866.83
Total 10,409,600.50 --
Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Extraordinary Gains and
Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item.
□ Applicable √ Not applicable
2. Return on equity and earnings per share
EPS（Yuan/share）
Profit as of Reporting Period Weighted average ROE (%)
EPS-basic EPS-diluted
Net profit attributable to common
0.80% 0.0283 0.0283
shareholders of the Company
Net profit attributable to common
shareholders of the Company after
0.30% 0.0108 0.0108
deduction of non-recurring profit
and loss
3. Differences between accounting data under domestic and overseas accounting standards
(1) Differences of net profit and net assets disclosed in financial reports prepared under international and
Chinese accounting standards
□ Applicable √ Not applicable
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(2) Differences of net profit and net assets disclosed in financial reports prepared under overseas and
Chinese accounting standards
□ Applicable √ Not applicable
(3) Explain reasons for the differences between accounting data under domestic and overseas accounting
standards, for audit data adjusting differences had been foreign audited, should indicate the name of the
foreign institutions
4. Other
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Section X. Documents Available For Reference
(I) Financial Statements carried with signatures and seals of Legal Representative and Accounting Principal, as well as Head of the
Accounting Organ;
(II) In the Reporting Period, originals of all documents of the Company ever disclosed publicly in media designated by China
Securities Regulatory Commission as well as the originals of all the public notices were deposited in the office of the Company.
Hubei Sanonda Co., Ltd.
Legal Representative: An Liru
17 August 2016
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