Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
HUBEI SANONDA CO., LTD.
THIRD QUARTER REPORT 2018
Adama Agricultural Solutions Ltd., one of the world's leading crop protection companies, and Hubei
Sanonda Co., Ltd. have combined, creating the only integrated, publicly traded Global-China crop
protection company.
At ADAMA, we strive to Create Simplicity in Agriculture – offering farmers effective products and
services that simplify their lives and help them grow. With one of the most comprehensive and
diversified portfolios of differentiated, quality products, our 6,600 strong team reaches farmers in
over 100 countries, providing them with solutions to control weeds, insects and disease, and improve
their yields.
Please see key additional information and further details included in the Annex.
October 2018
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Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
Section I Important Notice
The Company’s Board of Directors, Board of Supervisors, directors, supervisors and senior
managers confirm that the content of the Report is true, accurate and complete and contains no false
statement, misleading presentation or material omissions, and assume joint and several legal liability
arising therefrom.
Chen Lichtenstein, the person in charge of the Company as well as its legal representative, and
Aviram Lahav, the person in charge of the accounting function (Chief Financial Officer), hereby state
and ensure the truthfulness, accuracy and completeness of the Financial Report.
All the Company’s directors attended the board meeting for the review of this Report.
This Report has been prepared in both Chinese and English. Should there be any discrepancies
between the two versions, the Chinese version shall prevail.
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Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
Section II Financial Highlights & Shareholder Changes
I Highlights of accounting data and financial indicators
Whether the Company performs any retroactive adjustments to or restatements of its accounting data of last year due to
change in accounting policies or correction of accounting errors
□Yes √ No
Unit: RMB’000
End of Reporting Period End of last year +/- (%)
Total assets 42,628,220 39,685,756 Note 1 7.41%
Net assets attributable to shareholders of
the Company 22,423,162 18,849,847 Note 1 18.96%
Unit: RMB’000
July - September January - September
+/- (%) +/- (%)
2018 2017 2018 2017
Operating revenues 5,928,627 5,624,175 5.41% 18,954,885 18,394,239 3.05%
Net profit attributable to shareholders of
the Company 179,661 282,520 (36.41%) 2,542,442 1,599,514 58.95%
Net profit attributable to shareholders of
the Company excluding non-recurring
profit and loss 175,718 270,892 (35.13%) 966,014 436,359 121.38%
Net cash flow from operating activities 1,454,557 2,521,540 (42.31%)
Basic EPS (RMB/share) 0.0734 0.1206 (39.14%) 1.0392 0.6830 52.15%
Diluted EPS (RMB/share) N/A N/A - N/A N/A -
Weighted average return on net assets 0.82% 1.61% (49.10%) 12.31% 9.28% 32.70%
Note 1:
The amounts specified are 2018 opening balance amounts rather than 2017 closing balance amounts. As of January 1,
2018, the Company began to adopt the revised Accounting Standards for Business Enterprises (“ASBE”) regarding
financial instruments and revenues, promulgated by Ministry of Finance in 2017. According to the transitional requirements
of relevant revised ASBEs, the opening balances of total assets and net assets attributable to the shareholders of the
Company have been adjusted. The total assets and net assets attributable to the shareholders of the Company as at
December 31, 2017 were RMB’000 39,613,922 and RMB’000 18,778,013, respectively.
Please see key additional information and further details included in the Annex.
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Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
Non-Recurring profit/loss
√ Applicable □ Not applicable
Unit: RMB’000
Item Reporting Period Note
Gains/losses on the disposal of non-current assets (including Divestment in Europe, related
1,996,244
the offset part of asset impairment provisions) to the Syngenta Transaction.
Government grants recognized through profit or loss
(excluding government grants closely related to business of
16,667 --
the Company and given at a fixed quota or amount in
accordance with government’s uniform standards)
Recovery or reversal of provision for bad debts which is
17,027 --
assessed individually during the years
Other non-operating income and expenses other than the
(4,134) --
above
Less: Income tax effects 449,376 --
Total 1,576,428 --
Explanation of why the Company classified an item as exceptional profit/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Profit
and Loss, or reclassified any exceptional profit/loss item given as an example in the said explanatory announcement to
recurrent profit/loss
□ Applicable √ Not applicable
No such cases in the Reporting Period.
II Total number of shareholders and shareholdings of top 10 shareholders at the period-
end
1. Total number of ordinary shareholders and preference shareholders who had resumed their voting right &
shareholdings of top 10 shareholders at the period-end
Unit: share
52,055 Total number of preference
Total number of ordinary
(including shareholders who had resumed their
shareholders at the end of the 0
35,817 for A shares and voting right at the end of the
Reporting Period
16,238 for B shares) Reporting Period (if any)
Shareholdings of top 10 shareholders
Number of Pledged or frozen shares
Nature of Shareholding Number of
Name of shareholder restricted
shareholder percentage shares held Status Number
shares held
China National
State-owned
Agrochemical 74.02% 1,810,883,039 1,810,883,039 - -
legal person
Corporation (CNAC)
Jingzhou Sanonda State-owned
4.89% 119,687,202 - - -
Holding Co., Ltd. legal person
China Cinda Asset State-owned
1.37% 33,557,046 33,557,046 - -
Management Co., Ltd. legal person
China Structural State-owned
1.37% 33,557,046 33,557,046 - -
Reform Fund Co., Ltd. legal person
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Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
CCB Principal-ICBC-
Avic Trust, Trust Plan
of Pooled Funds of
CCB Principal Private
Others 0.53% 12,885,906 12,885,906 - -
Placement
Investment, Tianqi
(2016) No. 293 of
Avic Trust
Industrial Bank Co.,
Ltd, Mixed Securities
Investment Fund,
Others 0.33% 8,053,736 8,053,736 - -
Aegon-Industrial
Trend Investment
(LOF)
Portfolio No.503 of
National Social Others 0.25% 5,999,921 - - -
Security Fund
Domestic
Jiang Yun 0.21% 5,200,173 - - -
natural person
Portfolio No.118 of
National Social Others 0.21% 5,065,684 - - -
Security Fund
GUOTAI JUNAN
Foreign legal
SECURITIES(HONG 0.20% 4,838,044 - - -
person
KONG) LIMITED
Shareholdings of top 10 non-restricted shareholders
Number of non-restricted Type of shares
Name of shareholder
shares held at the period-end Type Number
RMB ordinary
Jingzhou Sanonda Holding Co., Ltd. 119,687,202 119,687,202
share
RMB ordinary
Portfolio No.503 of National Social Security Fund 5,999,921 5,999,921
share
RMB ordinary
Jiang Yun 5,200,173 5,200,173
share
RMB ordinary
Portfolio No.118 of National Social Security Fund 5,065,684 5,065,684
share
Domestically
GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED 4,838,044 listed foreign 4,838,044
share
RMB ordinary
Qichun County State-owned Assets Administration 4,169,266 4,169,266
share
Agricultural Bank of China Limited - CSI 500 Exchange RMB ordinary
4,034,562 4,034,562
Traded Fund share
RMB ordinary
Wu Feng 2,980,237 2,980,237
share
Domestically
Xie Qingjun 2,500,000 listed foreign 2,500,000
share
Aegon-Industrial Fund – Agricultural Bank of China – 2,493,609 RMB ordinary 2,493,609
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Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
China Pacific Life Insurance –Entrusted Investment by share
Private Placement Strategic Product (Assured Amount
Bonus)
Jingzhou Sanonda Holdings Co., Ltd. and CNAC are related parties, and are acting-
in-concert parties as prescribed in the Administrative Methods for Acquisition of
Related or act-in-concert parties Listed Companies. Sanonda Holding is a wholly-controlled subsidiary of CNAC. It is
among the shareholders above unknown whether the other shareholders are related parties or acting-in-concert
parties as prescribed in the Administrative Methods for Acquisition of Listed
Companies.
Shareholder Wu Feng held 775,726 shares of the Company through a credit
Top 10 ordinary shareholders
collateral securities trading account and held 2,204,511shares of the Company
conducting securities margin
through a common securities account, who thus held 2,980,237shares of the
trading (if any)
Company in total.
Did any of the top 10 ordinary shareholders or the top 10 non-restricted ordinary shareholders of the Company conduct
any promissory repo during the Reporting Period?
□ Yes √ No
No such cases in the Reporting Period.
2. Total number of preference shareholders and shareholdings of the top 10 of them at the period-end
□ Applicable √ Not applicable
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Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
Section III Significant Events
I Changes in main accounting statement items and financial indicators in the Reporting
Period, as well as reasons for the changes
√ Applicable □ Not applicable
Unit: RMB’000
Assets and liabilities September 30, 2018 January 1, 2018 +/- (%) Main reason for change
Financial assets held for
47,528 23,000 107% Additional investment
trading
Derivative financial assets Revaluation of
677,223 455,153 49%
derivatives
Assets held for sale Divestment transaction
- 403,297 (100%)
completed
Other current assets Decrease in bank
533,834 765,028 (30%)
acceptance bills
Long term receivables Mainly collection and
134,984 192,968 (30%) devaluation of a foreign
currency
CIP transferred to fixed
Construction in progress 433,350 803,421 (46%)
assets
Mainly purchase of
Intangible assets 5,900,418 4,036,588 46% intangible from Syngenta
AG
Repayment of short term
Short term loans 452,729 2,280,912 (80%)
loans
Revaluation of
Derivative financial liabilities 1,045,164 789,050 32%
derivatives
Decrease in advances
Advances from customers 140,211 226,711 (38%)
from customers
Mainly increase in
liabilities for discounts,
Other payables 2,201,178 1,422,734 55% accrued expenses and
liability in respect of
securitization transaction
Taxes and fares payable Mainly due to increase in
corporate income tax due
630,084 431,275 46%
to increase in taxable
profit
Long-term loans Mainly due to repayment
304,549 514,320 (41%)
of loans
Deferred tax liabilities Mainly due to utilization
of losses carry forward
431,346 224,613 92%
due to gain from disposal
of intangible assets.
Provisions Decrease in provision in
102,337 163,913 (38%) respect of contingencies
and law suits
Deferred income Deferred income related
34,485 - 100%
to divestment transaction
Other comprehensive income Mainly due to revaluation
of hedge transaction and
1,108,221 (104,080) 1165%
translation effect of
foreign operations
Additions to safety
Special reserves (China) 16,255 9,349 74%
production reserve
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Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
Retained earnings 5,671,403 3,307,924 71% Mainly net profit
Profit and losses January-September January-September
+/- (%) Main reason for change
2018 2017
Taxes and surcharges 63,870 48,661 31% Increase in revenues
Research and Development Increase in investments
262,581 196,579 34%
expenses in R&D projects
Credit impairment loss 14,096 - 100% Adoption of ASBE 22
Mainly due to change in
Gains (Losses) from changes
(344,673) 170,228 (302%) the fair value of
in fair value
derivatives
Mainly due to realization
Investment income (loss) 355,813 28,088 1167%
of derivatives
Gain (Loss) from disposal of Gain from disposal of
1,996,242 55,761 3480%
assets intangible assets
Increase in non-recurring
Non-operating income 30,407 22,763 34%
income
Mainly due to gain from
disposal of intangible
assets and devaluation
Income tax expenses 787,319 259,358 204% of the Brazilian Real
which resulted in a
decrease in the local tax
assets
II Progress on significant events, as well as the influence and solutions
□ Applicable √ Not applicable
III None completion of Commitments that should have been completed in the reporting
period by the Company, actual controller, shareholders, related parties, acquirer, and other
committed parties.
□ Applicable √ Not applicable
No such cases in the Reporting Period.
IV Performance forecast for Y2018
Warning of possible loss or considerable YoY change in the accumulative net profit made during the year-beginning to the
end of the next reporting period, as well as the reasons
□ Applicable √ Not applicable
V Securities investment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VI Wealth management entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VII Investment in derivative financial instruments
√ Applicable □ Not applicable
Unit: RMB’000
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Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
Percentage of
Amount
The party Related Investment Amount sold Investment investment Gain/loss
Relation Initial purchased Impairment
that party Starting Expiring amount at during the amount at amount divided during the
with the Type investment during the accrued (if
operates the transaction date date beginning of reporting end of the by net asset at reporting
Company amount reporting any)
investment or not? the period period period end of the period
period
period
Banks No No Option 52,274 03/06/2018 09/03/2019 52,274 6,097,265 (2,547,865) No 3,601,674 16.06% (229,646)
Banks No No Forward 15,911,923 28/05/2018 11/01/2019 15,911,923 20,962,417 (23,768,719) No 13,105,621 58.45% (35,845)
Total 15,964,197 -- -- 15,964,197 27,059,682 (26,316,584) 16,707,295 74.51% (265,491)
Source of fund for the investment Internal
litigation-related situations (if applicable) N/A
Date of disclosure of Board approval (if any) December 30, 2017
Date of disclosure of Shareholders’ approval (if
N/A
any)
The aforesaid refers to short term hedging currency transactions made with banks.
The Group’s transactions are not traded in the market. The transactions are between the applicable company in the Group and the applicable
bank until the expiration date of the transaction, therefore no market risk is involved.
Regarding credit and liquidity risk, the Group is working with large and substantial banks only and with some of them the Group has ISDA
agreements.
As to operational risk, the Group is working with approved software for all transactions.
No legal risk is involved.
Risk and control analysis for the reporting The controls taken in order to further reduce said risks are:
period (including but not limited to market risk, The relevant subsidiaries have specific guidelines, under the Group’s policy, which were approved by the subsidiaries' Financial
liquidity risk, credit risk, operational risk, legal Statements Committee of the Board, which specifies, inter alia, the hedging policy, the persons that have the authorization to
risk, etc.) deal with hedging, the tools, ranges etc. The only subsidiary that has hedging positions in the Group in the period was Adama
Solutions and its subsidiaries.
The relevant subsidiaries apply local SOX audits that audit the working process and the controls of the hedging transactions,
in addition to the quarterly audit.
The controllers of the relevant subsidiaries are involved and monitor the hedging accounting treatment.
Every 2-3 years the internal audit of the relevant subsidiaries department is auditing the entire procedure.
Market price or fair value change of investments The aforesaid refers to short term hedging currency transactions made by the relevant subsidiary with banks.
during the reporting period. Segregation of duties as follows:
Specific methodology and assumptions should For the fair value evaluation, the relevant subsidiary is using external experts. The relevant subsidiary hedges currencies only; the relevant
be disclosed in the analysis of fair value of the transactions are simple (options and forwards) for up to 1.5 years. Therefore, the valuation is straightforward, and the exchange rates are
investments provided by the accounting department of the relevant subsidiary and all other parameters are provided by the external experts.
Explanation for any significant changes in
accounting policies and principles, compared N/A
with last reporting period
The derivative investments carried by the Company are for hedging and avoiding the risk of market fluctuations. The investments respond to
Independent Directors’ opinion on the
the Company’s routine business demands and are in accordance with the relevant laws and regulations. Additionally, the Company has
investment in derivative financial instruments
adopted Currency Risk Hedging Policy to strengthen the risk management and control which benefit the Company’s ability to protect against
and related risk controls
market risk. The derivative investments do not harm the interests of the Company and its shareholders.
VIII Visits paid to the Company for purposes of research, communication, interview, etc.
during the Reporting Period
√ Applicable □ Not applicable
Date of visit Way of visit Type of visitor About
Introduced the Company's overall
July 10, 2018 Call (One to Many) Institutional Investors
situation and business development.
Introduced the Company's overall
July 11, 2018 On Site Research Institutional Investors
situation and business development.
Introduced the global overall situation
Public Day of Capital of Agrochemical industry, and the
July 17, 2018 Institutional Investors
Market business of each function of the
Company.
Introduced the global overall situation
Public Day of Capital of Agrochemical industry, and the
July 19, 2018 Institutional Investors
Market business of each function of the
Company.
Communication on the Q2 and the
August 27, 2018 Call (One to Many) Institutional Investors first half year performances of the
Company.
9
Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
Date of visit Way of visit Type of visitor About
Communication on the Q2 and the
August 28, 2018 Roadshow (One to Many) Institutional Investors first half year performances of the
Company.
Communication on the Q2 and the
August 29, 2018 Roadshow (One to Many) Institutional Investors first half year performances of the
Company.
Communication on the Q2 and the
August 30, 2018 Roadshow (One to Many) Institutional Investors first half year performances of the
Company.
Introduced the Company's overall
situation, business development, and
September 4, 2018 Brokers’ Strategy Meeting Institutional Investors
the Q2 and the first half year
performances of the Company.
Communication on the Q2 and the
September 6, 2018 Brokers’ Strategy Meeting Institutional Investors first half year performances of the
Company.
IX Illegal provision of guarantees for external parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
X Utilization of the Company’s capital by the controlling shareholder or its related parties
for non-operating purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
10
Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
Section IV Financial Statements
I Financial statements
1. Consolidated balance sheet
Prepared by Hubei Sanonda Co., Ltd.
30 September 2018
Unit: RMB’000
September 30, January 1, December 31,
Item
2018 2018 2017
Current assets:
Cash at bank and on hand 6,415,839 7,868,858 7,868,858
Financial assets held for trading 47,528 23,000 23,000
Derivative financial assets 677,223 455,153 455,153
Notes and accounts receivable 6,455,077 5,115,838 5,236,880
Including: Notes receivable 38,572 29,927 180,030
Accounts receivable 6,416,505 5,085,911 5,056,850
Prepayments 219,279 202,111 202,111
Other receivables 929,709 1,029,557 1,037,836
Inventories 8,918,250 7,488,238 7,488,238
Assets held for sale - 403,297 403,297
Non-current assets due within one year 48 46 46
Other current assets 533,834 765,028 614,925
Total current assets 24,196,787 23,351,126 23,330,344
Non-current assets:
Available for sale financial assets N/A N/A 19,544
Long-term accounts receivable 134,984 192,968 192,968
Long-term equity investments 125,573 102,383 102,383
Other equity investments 91,572 91,090 N/A
Investment property 4,173 4,408 4,408
Fixed assets 6,803,806 6,141,490 6,141,490
Construction in progress 433,350 803,421 803,421
Intangible assets 5,900,418 4,036,588 4,036,588
Goodwill 4,095,490 3,890,097 3,890,097
Deferred tax assets 672,921 870,518 891,012
Other non-current assets 169,146 201,667 201,667
Total non-current assets 18,431,433 16,334,630 16,283,578
Total assets 42,628,220 39,685,756 39,613,922
11
Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
Unit: RMB’000
September 30, January 1, December 31,
Item
2018 2018 2017
Current liabilities:
Short-term loans 452,729 2,280,912 2,280,912
Derivative financial liabilities 1,045,164 789,050 789,050
Notes and accounts payable 4,194,748 4,218,038 4,218,038
Advances from customers 140,211 226,711 226,711
Employee benefits payable 865,466 995,637 995,637
Taxes payable 630,084 431,275 431,275
Other payables 2,201,178 1,422,734 1,422,734
Non-current liabilities due within one year 483,646 448,504 448,504
Other current liabilities 561,007 482,583 482,583
Total current liabilities 10,574,233 11,295,444 11,295,444
Non-current liabilities:
Long-term loans 304,549 514,320 514,320
Debentures payable 7,914,671 7,777,410 7,777,410
Long-term accounts payable 24,297 24,203 24,203
Long-term employee benefits payables 636,748 610,714 610,714
Provisions 102,337 163,913 163,913
Deferred income 34,485 - -
Deferred tax liabilities 431,346 224,613 224,613
Other non-current liabilities 182,392 225,292 225,292
Total non-current liabilities 9,630,825 9,540,465 9,540,465
Total liabilities 20,205,058 20,835,909 20,835,909
Owners’ equity:
Share capital 2,446,554 2,446,554 2,446,554
Capital reserves 12,972,906 12,982,277 12,982,277
Other comprehensive income 1,108,221 (104,080) (154,701)
Special reserves 16,255 9,349 9,349
Surplus reserves 207,823 207,823 207,823
Retained earnings 5,671,403 3,307,924 3,286,711
Total owners’ equity 22,423,162 18,849,847 18,778,013
Total liabilities and owners’ equity 42,628,220 39,685,756 39,613,922
Legal representative: Chen Lichtenstein;
Chief of the accounting work: Aviram Lahav;
Chief of the accounting organ: Aviram Lahav.
12
Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
2. Balance sheet of the Company
Unit: RMB’000
September 30, January 1, December 31,
Item
2018 2018 2017
Current Assets: 01.01.2018 31.12.17
Cash at bank and on hand 1,978,000 1,868,603 1,868,603
Notes and accounts receivable 846,085 850,034 1,001,641
Including: Notes receivable - - 146,525
Accounts receivable 846,085 850,034 855,116
Prepayments 45,492 24,019 24,019
Other receivables 3,546 1,140 1,140
Inventories 147,933 177,402 177,402
Other current assets 23,651 147,931 1,406
Total current assets 3,044,707 3,069,129 3,074,211
Non-current assets:
Available for sale financial assets N/A N/A 8,573
Long-term equity investments 15,939,826 15,939,826 15,939,826
Other equity investments 80,119 80,119 N/A
Investment property 4,173 4,408 4,408
Fixed assets 1,167,567 1,262,330 1,262,330
Construction in progress 163,094 81,993 81,993
Intangible assets 205,108 183,920 183,920
Deferred tax assets 19,452 26,892 35,064
Other non-current assets 11,000 11,000 11,000
Total non-current assets 17,590,339 17,590,488 17,527,114
Total assets 20,635,046 20,659,617 20,601,325
Current liabilities:
Short-term loans 20,000 70,000 70,000
Notes and accounts payable 363,444 257,615 257,615
Advances from customers 16,195 63,904 63,904
Employee benefits payable 33,298 30,491 30,491
Taxes payable 85,677 19,301 19,301
Other payables 137,800 482,858 482,858
Non-current liabilities due within one year 152,000 126,590 126,590
Total current liabilities 808,414 1,050,759 1,050,759
Non-current liabilities:
Long-term loans - 72,000 72,000
Long-term employee benefits payables 89,869 93,025 93,025
Provisions 16,258 15,671 15,671
Other non-current liabilities 171,770 171,770 171,770
Total non-current liabilities 277,897 352,466 352,466
Total liabilities 1,086,311 1,403,225 1,403,225
Owners’ equity:
Share capital 2,446,554 2,446,554 2,446,554
Capital reserves 15,413,663 15,423,034 15,423,034
Other comprehensive income 50,162 50,621 -
Special reserves 14,993 10,040 10,040
Surplus reserves 207,823 207,823 207,823
Retained earnings 1,415,540 1,118,320 1,110,649
Total owners’ equity 19,548,735 19,256,392 19,198,100
Total liabilities and owners’ equity 20,635,046 20,659,617 20,601,325
13
Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
3. Consolidated income statement for the Reporting Period
Unit: RMB’000
July-September July-September
Item
2018 2017
1. Total operating Income 5,928,627 5,624,175
Including: Operating income 5,928,627 5,624,175
2. Total operating cost 5,791,546 4,936,710
Including: Cost of sales 4,019,117 3,627,507
Taxes and surcharges 12,297 16,148
Selling and Distribution expenses 1,127,606 1,011,162
General and Administrative expenses 188,175 269,140
Research and Development expenses 106,304 64,745
Financial expenses: 310,703 (67,847)
Including: Interest expense 146,541 158,312
Interest income 18,184 38,127
Asset impairment loss 19,345 15,855
Credit impairment loss 7,999 N/A
Add: Other income - -
Investment income (loss), net 208,759 (241,361)
Including: Income (loss) from investment in associates
and joint ventures 992 2,820
Gain (loss) from changes in fair value (101,297) (52,048)
Gain (loss) from disposal of assets (929) (1,996)
3. Operating profit 243,614 392,060
Add: Non-operating income 1,404 12,414
Less: Non-operating expense 5,302 4,853
4. Total profit 239,716 399,621
Less: income tax expenses 60,055 117,101
5. Net profit 179,661 282,520
5.1 Classified by nature of operations
5.1.1 Continuing operations 179,661 282,520
5.1.2 Discontinued operations - -
5.2 Classified by ownership
5.2.1 Shareholders of the Company 179,661 282,520
5.2.2 Non-controlling interests - -
6. Other comprehensive income net of tax 706,883 (393,748)
Other comprehensive income net of tax attributable to shareholders
of the Company 706,883 (393,748)
6.1 Items that will not be reclassified into profit/loss (1,346) (4,207)
6.1.1 Re-measurement of defined benefit plan liability (1,346) (4,207)
6.2 Items that were or will be reclassified to profit or loss 708,229 (389,541)
6.2.1 Effective portion of gains or loss of cash flow hedge 7,609 (96,034)
6.2.2 Translation differences of foreign financial statements 700,620 (293,507)
7. Total comprehensive income for the period 886,544 (111,228)
7.1 Attributable to shareholders of the Company 886,544 (111,228)
8. Earnings per share
8.1 Basic earnings per share (RMB/ share) 0.0734 0.1206
8.2 Diluted earnings per share (RMB/ share) N/A N/A
Legal representative: Chen Lichtenstein;
Chief of the accounting work: Aviram Lahav;
Chief of the accounting organ: Aviram Lahav.
14
Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
4. Income statement of the Company for the Reporting Period
Unit: RMB’000
July-September July-September
Item
2018 2017
1. Operating income 760,590 688,042
Less: Operating costs 468,749 509,865
Taxes and surcharges 2,323 7,969
Selling and Distribution expenses 30,248 22,085
General and Administrative expenses 43,487 26,300
Research and Development expenses 23,433 1,003
Financial expenses (23,294) 10,154
Including: Interest expense 2,032 4,049
Interest income 6,061 143
Asset Impairment loss 401 (987)
Credit impairment loss 1,781 N/A
Add: Other income - -
Investment income (loss), net - 548
Gain (loss) from disposal of assets - 410
2. Operating profit 213,462 112,611
Add: Non-operating income - 815
Less: Non-operating expenses 844 1,619
3. Total profit 212,618 111,807
Less: Income tax expense 43,648 27,921
4. Net profit 168,970 83,886
4.1 Net profit from continuing operations 168,970 83,886
4.2 Net profit from discontinued operations - -
5. Other comprehensive income net of tax (68) -
5.1 Items that will not be reclassified into profit/loss (68) -
5.1.1 Re-measurement of defined benefit plan liability (68)
5.2 Items that were or will be reclassified to profit or loss - -
6. Total comprehensive income 168,902 83,886
15
Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
5. Consolidated income statement for the period from the year-beginning to the end of the Reporting Period
Unit: RMB’000
January-September January-September
Item
2018 2017
1. Total operating Income 18,954,885 18,394,239
Including: Operating income 18,954,885 18,394,239
2. Total operating cost 17,649,498 16,799,093
Including: Cost of sales 12,590,534 11,807,201
Taxes and surcharges 63,870 48,661
Selling and Distribution expenses 3,351,540 3,134,052
General and Administrative expenses 669,029 705,420
Research and Development expenses 262,581 196,579
Financial expenses: 640,721 844,069
Including: Interest expense 412,488 487,987
Interest income 59,403 167,714
Asset impairment loss 57,127 63,111
Credit impairment loss 14,096 N/A
Add: Other income
Investment income (loss), net 355,813 28,088
Including: Income (loss) from investment in
associates and joint ventures 13,750 4,906
Gain (loss) from changes in fair value (344,673) 170,228
Gain (loss) from disposal of assets 1,996,242 55,761
3. Operating profit 3,312,769 1,849,223
Add: Non-operating income 30,407 22,763
Less: Non-operating expense 13,415 13,114
4. Total profit 3,329,761 1,858,872
Less: income tax expenses 787,319 259,358
5. Net profit 2,542,442 1,599,514
5.1 Classified by nature of operations
5.1.1 Continuing operations 2,542,442 1,599,514
5.1.2 Discontinued operations - -
5.2 Classified by ownership
5.2.1 Shareholders of the Company 2,542,442 1,599,514
5.2.2 Non-controlling interests - -
6. Other comprehensive income net of tax 1,212,301 (979,765)
Other comprehensive income net of tax attributable to shareholders
of the Company 1,212,301 (979,765)
6.1 Items that will not be reclassified into profit/loss 9,760 (10,663)
6.1.1 Re-measurement of defined benefit plan liability 9,760 (10,663)
6.2 Items that were or will be reclassified to profit or loss 1,202,541 (969,102)
6.2.1 Effective portion of gains or loss of cash flow hedge 301,082 (449,236)
6.2.2 Translation differences of foreign financial statements 901,459 (519,866)
7. Total comprehensive income for the period 3,754,743 619,749
Attributable to shareholders of the Company 3,754,743 619,749
8. Earnings per share
8.1 Basic earnings per share (RMB/ share) 1.0392 0.6830
8.2 Diluted earnings per share (RMB/ share) N/A N/A
16
Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
6. Income statement of the Company for the period from the year-beginning to the end of the Reporting
Period
Unit: RMB’000
January-September January-September
Item
2018 2017
1. Operating income 2,427,162 2,130,107
Less: Cost of sale 1,638,505 1,626,813
Taxes and surcharges 23,534 16,535
Selling and Distribution expenses 99,782 68,335
General and Administrative expenses 129,163 76,565
Research and Development expenses 25,863 5,208
Financial expenses: (43,731) 22,346
Including: Interest expense 6,950 12,327
Interest income 19,096 687
Asset Impairment loss 1,306 7,065
Credit impairment loss 4,854 N/A
Add: Other income - -
Investment income (loss), net - 548
Gain (loss) from changes in fair value - (206)
Gain (loss) from disposal of assets - -
2. Operating profit 547,886 307,582
Add: Non-operating income 428 4,087
Less: Non-operating expense 420 2,286
3. Total profit 547,894 309,383
Less: Income tax expense 96,542 77,684
4. Net profit 451,352 231,699
4.1 Net profit from continuing operations 451,352 231,699
4.2 Net profit from discontinued operations - -
5. Other comprehensive income net of tax (459) -
5.1 Items that will not be reclassified into profit/loss (459) -
5.1.1 Re-measurement of defined benefit plan liability (459)
5.2 Items that were or will be reclassified to profit or loss - -
6. Total comprehensive income 450,893 231,699
17
Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
7. Consolidated cash flow statement for the period from the year-beginning to the end of the Reporting
Period
Unit: RMB’000
January-September January-September
Item
2018 2017
1. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 17,806,561 17,306,144
Refund of taxes and surcharges 33,600 35,662
Cash received relating to other operating activities 556,751 838,300
Sub-total of cash inflows from operating activities 18,396,912 18,180,106
Cash paid for goods and services 12,154,122 10,884,588
Cash paid to and on behalf of employees 2,387,942 2,318,685
Payments of taxes and surcharges 356,287 293,826
Cash paid relating to other operating activities 2,044,004 2,161,467
Sub-total of cash outflows from operating activities 16,942,355 15,658,566
Net cash flows from operating activities 1,454,557 2,521,540
2. Cash flows from investing activities:
Cash received from disposal of investments 9,792 20,544
Net cash received from disposal of fixed assets, intangible assets and
other long-term assets 2,413,446 95,750
Net cash received from disposal of subsidiaries or other business units - 100,139
Cash received from other investing activities 57 29,253
Sub-total of cash inflows from investing activities 2,423,295 245,686
Cash paid to acquire fixed assets, intangible assets and other
long-term assets 2,966,066 1,061,206
Cash paid for acquisition of investments 6,566 -
Net cash received from acquisition of subsidiaries and other
operating units 13,213 -
Cash paid for other investing activities 14 31,958
Sub-total of cash outflows from investing activities 2,985,859 1,093,164
Net cash flows from investing activities (562,564) (847,478)
3. Cash flows from financing activities:
Cash received from borrowings 84,953 181,108
Cash received relating to other financing activities - 7,800
Sub-total of cash inflows from financing activities 84,953 188,908
Cash repayment of borrowings 2,116,235 675,900
Cash payment for dividends, profit distributions or interest 464,425 384,802
Including: dividends or profit paid by subsidiaries to
minority interests 24,830 32,556
Cash paid relating to other financing activities 61,526 110,820
Sub-total of cash outflows from financing activities 2,642,186 1,171,522
Net cash flows from financing activities (2,557,233) (982,614)
4. Effect of foreign exchange rate changes on cash and cash
equivalents 172,121 (188,686)
5. Net increase (decrease) in cash and cash equivalents (1,493,119) 502,762
Add: Cash and cash equivalents at the beginning of the period 7,864,258 3,833,747
6. Cash and cash equivalents at the end of the period 6,371,139 4,336,509
18
Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
8. Cash flow statement of the Company for the period from the year-beginning to the end of the Reporting
Period
Unit: RMB’000
January-September January-September
Item
2018 2017
1. Cash flows from operating activities:
Cash received from sale of goods and rendering of services 2,006,704 984,714
Refund of taxes and surcharges 12,981 2,884
Cash received relating to other operating activities 24,141 4,649
Sub-total of cash inflows from operating activities 2,043,826 992,247
Cash paid for goods and services 844,221 643,788
Cash paid to and on behalf of employees 134,483 135,282
Payments of taxes and surcharges 75,128 85,185
Cash paid relating to other operating activities 126,968 108,998
Sub-total of cash outflows from operating activities 1,180,800 973,253
Net cash flows from operating activities 863,026 18,994
2. Cash flows from investing activities:
Net cash received from disposal of fixed assets, intangible assets and
other long-term assets - 701
Sub-total of cash inflows from investing activities - 701
Cash paid to acquire fixed assets, intangible assets and other
long-term assets 72,571 83,573
Sub-total of cash outflows from investing activities 72,571 83,573
Net cash flows from investing activities (72,571) (82,872)
3. Cash flows from financing activities:
Cash received from borrowings 20,000 75,000
Cash received relating to other financing activities - 7,800
Sub-total of cash inflows from financing activities 20,000 82,800
Cash repayment of borrowings 116,590 52,500
Cash payment for dividends, profit distributions or interest 161,188 12,530
Cash paid relating to other financing activities 454,551 110,820
Sub-total of cash outflows from financing activities 732,329 175,850
Net cash flows from financing activities (712,329) (93,050)
4. Effect of foreign exchange rate changes on cash and cash
equivalents (8,829) 44
5. Net increase (decrease) in cash and cash equivalents 69,297 (156,884)
Add: cash and cash equivalents at the beginning of the period 1,864,003 249,741
6. Cash and cash equivalents at the end of the period 1,933,300 92,857
II Auditor’s report
Is this Report audited?
□ Yes √ No
This Report is unaudited.
Hubei Sanonda Co., Ltd.
30 October 2018
19