Hubei Sanonda Co., Ltd.
SEMI-ANNUAL 2017Financial 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.
June 30, 2017
Unit: RMB
Item Closing balance Opening balance
Current assets:
Monetary funds 600,512,771.30 547,270,064.75
Settlement reserve
Interbank lendings
Financial assets at fair value through
profit/loss
Derivative financial assets
Notes receivable 34,000,716.79 91,784,604.58
Accounts receivable 421,276,828.44 208,608,355.93
Accounts paid in advance 24,721,414.90 42,012,434.98
Premiums receivable
Reinsurance premiums receivable
Receivable reinsurance contract
reserve
Interest receivable
Dividends receivable
Other accounts receivable 5,047,793.16 12,749,493.85
1
Financial assets purchased under
agreements to resell
Inventories 196,100,879.57 173,640,807.03
Assets held for sale
Non-current assets due within one
year
Other current assets 5,100,897.99 15,518,223.25
Total current assets 1,286,761,302.15 1,091,583,984.37
Non-current assets:
Loans and advances to customers
Available-for-sale financial assets 8,572,982.63 8,572,982.63
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investments
Investment property 4,565,415.90 4,722,525.78
Fixed assets 1,519,601,724.49 1,604,373,212.55
Construction in progress 22,526,508.36 21,225,256.37
Engineering materials
Disposal of fixed assets
Productive living assets
Oil-gas assets
Intangible assets 204,992,807.35 207,764,086.65
R&D expenses
Goodwill
Long-term deferred expense
Deferred income tax assets 25,559,788.07 39,518,542.98
Other non-current assets 13,823,207.46 7,123,207.46
Total non-current assets 1,799,642,434.26 1,893,299,814.42
Total assets 3,086,403,736.41 2,984,883,798.79
Current liabilities:
Short-term borrowings 50,000,000.00 0.00
Borrowings from the Central Bank
Money deposits accepted and
inter-bank deposits
Interbank borrowings
2
Financial liabilities at fair value
through profit/loss
Derivative financial liabilities
Notes payable 34,100,000.00 26,000,000.00
Accounts payable 183,575,832.98 169,182,510.04
Accounts received in advance 18,646,901.36 32,665,597.65
Financial assets sold for repurchase
Fees and commissions payable
Payroll payable 16,107,308.96 30,169,378.08
Taxes payable 40,739,288.26 18,472,322.61
Interest payable
Dividends payable 250,000.00 250,000.00
Other accounts payable 84,251,742.37 165,158,645.93
Reinsurance premiums payable
Insurance contract reserve
Payables for acting trading of
securities
Payables for acting underwriting of
securities
Liabilities held for sale
Non-current liabilities due within one
139,090,000.00 147,000,000.00
year
Other current liabilities
Total current liabilities 566,761,073.93 588,898,454.31
Non-current liabilities:
Long-term borrowings 152,000,000.00 196,590,000.00
Bonds payable
Of which: Preference shares
Perpetual bonds
Long-term accounts payable
Long-term payroll payable
Special payables
Provisions
Deferred income 20,565,287.29 22,566,887.73
Deferred income tax liabilities
Other non-current liabilities 171,770,450.00 171,770,450.00
3
Total non-current liabilities 344,335,737.29 390,927,337.73
Total liabilities 911,096,811.22 979,825,792.04
Owners’ equity:
Share capital 593,923,220.00 593,923,220.00
Other equity instruments
Of which: Preference shares
Perpetual bonds
Capital reserve 263,063,461.97 263,063,461.97
Less: Treasury shares
Other comprehensive income
Special reserve 20,919,938.07 19,862,463.34
Surplus reserve 190,699,248.11 190,699,248.11
Provisions for general risks
Retained earnings 1,106,701,057.04 937,509,613.33
Equity attributable to owners of the
2,175,306,925.19 2,005,058,006.75
Company
Minority interests
Total owners’ equity 2,175,306,925.19 2,005,058,006.75
Total liabilities and owners’ equity 3,086,403,736.41 2,984,883,798.79
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 59,581,473.63 257,540,892.07
Financial assets at fair value through
profit/loss
Derivative financial assets
Notes receivable 31,351,716.79 88,457,302.58
Accounts receivable 1,050,543,303.39 611,495,344.80
Accounts paid in advance 21,226,827.42 35,684,527.41
Interest receivable
Dividends receivable
Other accounts receivable 614,437.10 3,082,682.97
4
Inventories 179,121,692.83 168,497,335.12
Assets held for sale
Non-current assets due within one
year
Other current assets 490,319.48 5,738,347.99
Total current assets 1,342,929,770.64 1,170,496,432.94
Non-current assets:
Available-for-sale financial assets 8,572,982.63 8,572,982.63
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investments 55,526,635.41 55,526,635.41
Investment property 4,565,415.90 4,722,525.78
Fixed assets 1,399,371,205.39 1,475,229,079.55
Construction in progress 22,526,508.36 21,225,256.37
Engineering materials
Disposal of fixed assets
Productive living assets
Oil-gas assets
Intangible assets 193,860,644.23 196,093,173.33
R&D expenses
Goodwill
Long-term deferred expense
Deferred income tax assets 21,409,102.21 36,980,749.19
Other non-current assets 13,823,207.46 7,123,207.46
Total non-current assets 1,719,655,701.59 1,805,473,609.72
Total assets 3,062,585,472.23 2,975,970,042.66
Current liabilities:
Short-term borrowings 50,000,000.00
Financial liabilities at fair value
through profit/loss
Derivative financial liabilities
Notes payable 34,100,000.00 26,000,000.00
Accounts payable 177,172,223.63 162,150,878.66
Accounts received in advance 12,221,292.70 26,358,193.29
Payroll payable 14,019,523.63 26,352,607.70
5
Taxes payable 37,705,202.42 10,661,550.02
Interest payable
Dividends payable 250,000.00 250,000.00
Other accounts payable 90,384,200.97 172,324,381.38
Liabilities held for sale
Non-current liabilities due within one
139,090,000.00 147,000,000.00
year
Other current liabilities
Total current liabilities 554,942,443.35 571,097,611.05
Non-current liabilities:
Long-term borrowings 152,000,000.00 196,590,000.00
Bonds payable
Of which: Preference shares
Perpetual bonds
Long-term payables
Long-term payroll payable
Special payables
Provisions
Deferred income 15,156,953.92 16,666,887.70
Deferred income tax liabilities
Other non-current liabilities 171,770,450.00 171,770,450.00
Total non-current liabilities 338,927,403.92 385,027,337.70
Total liabilities 893,869,847.27 956,124,948.75
Owners’ equity:
Share capital 593,923,220.00 593,923,220.00
Other equity instruments
Of which: Preference shares
Perpetual bonds
Capital reserve 263,799,837.18 263,799,837.18
Less: Treasury shares
Other comprehensive income
Special reserve 15,950,825.76 14,893,351.03
Surplus reserve 190,699,248.11 190,699,248.11
Retained earnings 1,104,342,493.91 956,529,437.59
Total owners’ equity 2,168,715,624.96 2,019,845,093.91
6
Total liabilities and owners’ equity 3,062,585,472.23 2,975,970,042.66
3. Consolidated Income Statement
Unit: RMB
Item Jan.-Jun. 2017 Jan.-Jun 2016
I. Operating revenues 1,465,703,190.32 1,005,697,157.50
Including: Sales income 1,465,703,190.32 1,005,697,157.50
Interest income
Premium income
Fee and commission income
II. Operating costs 1,250,686,253.36 996,545,598.31
Including: Cost of sales 1,101,184,740.87 859,188,101.99
Interest expenses
Fee and commission expenses
Surrenders
Net claims paid
Net amount provided as insurance
contract reserve
Expenditure on policy dividends
Reinsurance premium
Taxes and surtaxes 8,909,838.94 3,853,275.19
Selling expenses 46,571,732.05 45,242,941.76
Administrative expenses 56,026,584.48 69,143,939.29
Finance costs 23,074,053.26 3,943,997.08
Asset impairment loss 14,919,303.76 15,173,343.00
Add: Profit on fair value changes (“-”
-205,804.20
means loss)
Investment income (“-” means loss) 75,504.00
Including: Share of profit/loss of
associates and joint ventures
Exchange gains (“-” means loss)
Other gains
III. Operating profit (“-” means loss) 214,811,132.76 9,227,063.19
Add: Non-operating income 3,763,540.44 13,882,859.98
Including: Profit on disposal of
10,214,203.76
non-current assets
7
Less: Non-operating expense 1,077,154.84 3,392.65
Including: Loss on disposal of
409,813.84 3,392.65
non-current assets
IV. Total profit (“-” means loss) 217,497,518.36 23,106,530.52
Less: Corporate income tax 48,306,074.65 6,298,975.02
V. Net profit (“-” means loss) 169,191,443.71 16,807,555.50
Net profit attributable to owners of
169,191,443.71 16,807,555.50
the Company
Minority interests’ income
VI. Other comprehensive income net of
tax
Other comprehensive income net of
tax attributable to owners of the
Company
(I) Other comprehensive income
that will not be reclassified into
profit/loss
1. Changes in net liabilities or
assets with a defined benefit plan upon
re-measurement
2 Share of other comprehensive
income of investees that cannot be
reclassified into profit/loss under the
equity method
(II) Other comprehensive income
to be subsequently reclassified into
profit/loss
1 Share of other comprehensive
income of investees that will be
reclassified into profit/loss under the
equity method
2. Profit/loss on fair value
changes of available-for-sale financial
assets
3. Profit/loss on reclassifying
held-to-maturity investments into
available-for-sale financial assets
4. Effective profit/loss on cash
flow hedges
5. Currency translation
differences
6. Other
8
Other comprehensive income net of
tax attributable to minority interests
VII. Total comprehensive income 169,191,443.71 16,807,555.50
Attributable to owners of the
169,191,443.71 16,807,555.50
Company
Attributable to minority interests
VIII. Earnings per share
(I) Basic earnings per share 0.2849 0.0283
(II) Diluted earnings per share 0.2849 0.0283
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. 2017 Jan.-Jun 2016
I. Operating revenues 1,442,064,917.29 996,889,002.00
Less: Operating costs 1,120,773,387.39 856,424,336.31
Taxes and surtaxes 8,565,797.54 3,825,486.63
Selling expenses 42,425,381.62 42,430,625.01
Administrative expenses 54,469,856.57 66,110,552.46
Finance costs 12,191,745.82 7,357,642.37
Asset impairment loss 8,051,394.21 7,432,233.18
Add: profit on fair value changes (“-”
-205,804.20
means loss)
Investment income (“-” means
75,504.00
loss)
Including: Share of profit/loss of
associates and joint ventures
Other gains
II. Operating profit (“-” means loss) 195,381,549.94 13,383,630.04
Add: Non-operating income 3,271,873.78 2,989,711.67
Including: Profit on disposal of
22,722.11
non-current assets
Less: Non-operating expense 1,077,154.84 3,392.65
Including: Loss on disposal of
409,813.84 3,392.65
non-current assets
9
III. Total profit (“-” means loss) 197,576,268.88 16,369,949.06
Less: Corporate income tax 49,763,212.56 5,021,618.54
IV. Net profit (“-” means loss) 147,813,056.32 11,348,330.52
V. Other comprehensive income net of
tax
(I) Other comprehensive income that
will not be reclassified into profit and
loss
1. Changes in net liabilities or
assets with a defined benefit plan upon
re-measurement
2. Share of other comprehensive
income of investees that cannot be
reclassified into profit/loss under the
equity method
(II) Other comprehensive income to
be subsequently reclassified into
profit/loss
1. Share of other comprehensive
income of investees that will be
reclassified into profit/loss under the
equity method
2. Profit/loss on fair value changes
of available-for-sale financial assets
3. Profit/loss on reclassifying
held-to-maturity investments into
available-for-sale financial assets
4. Effective profit/loss on cash
flow hedges
5. Currency translation differences
6. Other
VI. Total comprehensive income 147,813,056.32 11,348,330.52
VII. Earnings per share
(I) Basic earnings per share
(II) Diluted earnings per share
5. Consolidated Cash Flow Statement
Unit: RMB
Item Jan.-Jun. 2017 Jan.-Jun 2016
I. Cash flows associated with operating
10
activities:
Cash received from sale of
894,684,670.27 635,526,388.02
commodities and rendering of service
Net increase in money deposits from
customers and interbank placements
Net increase in loans from the
Central Bank
Net increase in funds borrowed from
other financial institutions
Cash received from premium of
original insurance contracts
Net cash received from reinsurance
business
Net increase in deposits of policy
holders and investment fund
Net increase in disposal of financial
assets at fair value through profit/loss
Interest, fees and commissions
received
Net increase in interbank borrowings
Net increase in funds in repurchase
business
Tax refunds received 20,704,608.00 12,746,757.98
Cash generated by other operating
4,396,889.50 4,535,590.18
activities
Subtotal of cash generated by operating
919,786,167.77 652,808,736.18
activities
Cash paid for goods and services 485,447,078.38 416,655,530.64
Net increase in loans and advances to
customers
Net increase in funds deposited in the
Central Bank and interbank placements
Cash paid for claims of original
insurance contracts
Interest, fees and commissions paid
Cash paid as policy dividends
Cash paid to and for employees 97,756,805.70 101,289,757.17
Taxes paid 49,084,706.43 42,706,274.95
Cash used in other operating
66,254,038.42 45,438,254.80
activities
Subtotal of cash used in operating
698,542,628.93 606,089,817.56
activities
11
Net cash generated by operating
221,243,538.84 46,718,918.62
activities
II. Cash flows associated with investing
activities:
Cash received from retraction of
investments
Cash received as investment income 75,504.00
Net cash received from disposal of
fixed assets, intangible assets and other 4,021,964.00
long-term assets
Net cash received from disposal of
subsidiaries or other business units
Cash generated by other investing
activities
Subtotal of cash generated by investing
4,097,468.00
activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 50,423,104.56 39,877,320.86
assets
Cash paid for investment
Net increase in pledged loans
Net cash paid to acquire subsidiaries
and other business units
Cash used in other investing
activities
Subtotal of cash used in investing
50,423,104.56 39,877,320.86
activities
Net cash generated by investing
-50,423,104.56 -35,779,852.86
activities
III. Cash flows associated with
financing activities:
Cash received from capital
contributions
Including: Cash received from
minority shareholder investments by
subsidiaries
Cash received as borrowings 105,000,000.00
Cash received from issuance of
bonds
Cash generated by other financing
7,800,000.00 120,800,000.00
activities
Subtotal of cash generated by financing 112,800,000.00 120,800,000.00
12
activities
Repayment of borrowings 102,500,000.00 63,500,000.00
Cash paid for interest expenses and
9,188,278.14 28,826,083.17
distribution of dividends or profit
Including: dividends or profit paid
by subsidiaries to minority interests
Cash used in other financing
106,820,000.00 9,000,000.00
activities
Sub-total of cash used in financing
218,508,278.14 101,326,083.17
activities
Net cash generated by financing
-105,708,278.14 19,473,916.83
activities
IV. Effect of foreign exchange rate
-10,889,449.59 1,539,024.13
changes on cash and cash equivalents
V. Net increase in cash and cash
54,222,706.55 31,952,006.72
equivalents
Add: Opening balance of cash and
539,470,064.75 406,098,208.72
cash equivalents
VI. Closing balance of cash and cash
593,692,771.30 438,050,215.44
equivalents
6. Cash Flow Statement of the Company
Unit: RMB
Item Jan.-Jun. 2017 Jan.-Jun 2016
I. Cash flows associated with operating
activities:
Cash received from sale of
597,838,990.78 539,504,213.22
commodities and rendering of service
Tax refunds received 2,883,660.70 168,260.60
Cash generated by other operating
3,487,531.06 5,693,015.46
activities
Subtotal of cash generated by operating
604,210,182.54 545,365,489.28
activities
Cash paid for goods and services 448,790,559.88 380,402,622.34
Cash paid to and for employees 93,885,884.82 97,588,936.88
Taxes paid 42,281,675.40 36,133,647.98
Cash used in other operating
60,775,456.65 40,373,743.83
activities
Subtotal of cash used in operating
645,733,576.75 554,498,951.03
activities
Net cash generated by operating -41,523,394.21 -9,133,461.75
13
activities
II. Cash flows associated with investing
activities:
Cash received from retraction of
investments
Cash received as investment income 75,504.00
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
Cash generated by other investing
activities
Subtotal of cash generated by investing
297,468.00
activities
Cash paid to acquire fixed assets,
intangible assets and other long-term 50,423,104.56 39,164,697.86
assets
Cash paid for investment
Net cash paid to acquire subsidiaries
and other business units
Cash used in other investing
activities
Subtotal of cash used in investing
50,423,104.56 39,164,697.86
activities
Net cash generated by investing
-50,423,104.56 -38,867,229.86
activities
III. Cash flows associated with
financing activities:
Cash received from capital
contributions
Cash received as borrowings 55,000,000.00
Cash received from issuance of
bonds
Cash generated by other financing
7,800,000.00 120,800,000.00
activities
Subtotal of cash generated by financing
62,800,000.00 120,800,000.00
activities
Repayment of borrowings 52,500,000.00 63,500,000.00
Cash paid for interest expenses and
8,497,633.69 28,826,083.17
distribution of dividends or profit
Cash used in other financing 106,820,000.00 9,000,000.00
14
activities
Sub-total of cash used in financing
167,817,633.69 101,326,083.17
activities
Net cash generated by financing
-105,017,633.69 19,473,916.83
activities
IV. Effect of foreign exchange rate
-15,285.98 10,524.28
changes on cash and cash equivalents
V. Net increase in cash and cash
-196,979,418.44 -28,516,250.50
equivalents
Add: Opening balance of cash and
249,740,892.07 378,450,204.94
cash equivalents
VI. Closing balance of cash and cash
52,761,473.63 349,933,954.44
equivalents
7. Consolidated Statement of Changes in Owners’ Equity
January-June 2017
Unit: RMB
January-June 2017
Equity attributable to owners of the Company
Other equity
Item Other Retaine Minorit Total
instruments Less: General
Share Capital compre Special Surplus d y owners’
Prefer Perpet Treasur risk
capital reserve hensive reserve reserve earning interests equity
ence ual Other y shares reserve
income s
shares bonds
I. Balance at the 593,92 2,005,0
263,063 19,862, 190,699 937,509
end of the prior 3,220. 58,006.
,461.97 463.34 ,248.11 ,613.33
year 00 75
Add: Changes
in accounting
policies
Correction of
errors in prior
periods
Business
mergers under the
same control
Other
II. Balance at the 593,92 2,005,0
263,063 19,862, 190,699 937,509
beginning of the 3,220. 58,006.
,461.97 463.34 ,248.11 ,613.33
year 00 75
III. Increase/ 1,057,4 169,191 170,248
15
decrease in the 74.73 ,443.71 ,918.44
period (“-” means
decrease)
(I) Total
169,191 169,191
comprehensive
,443.71 ,443.71
income
(II) Capital
increased and
reduced by owners
1. Ordinary
shares increased
by shareholders
2. Capital
increased by
holders of other
equity instruments
3. Amounts
of share-based
payments charged
to owners’ equity
4. Other
(III) Profit
distribution
1.
Appropriation to
surplus reserve
2.
Appropriation to
general risk
provisions
3.
Appropriation to
owners (or
shareholders)
4. Other
(IV) Internal
carry-forward of
owners’ equity
1. New
increase of capital
(or share capital)
from capital
reserve
16
2. New
increase of capital
(or share capital)
from surplus
reserve
3. Surplus
reserve for making
up loss
4. Other
(V) Special 1,057,4 1,057,4
reserve 74.73 74.73
1. Withdrawn 4,180,1 4,180,1
for the period 14.32 14.32
2. Used in the 3,122,6 3,122,6
period 39.59 39.59
(VI) Other
593,92 1,106,7 2,175,3
IV. Closing 263,063 20,919, 190,699
3,220. 01,057. 06,925.
balance ,461.97 938.07 ,248.11
00 04 19
January-June 2016
Unit: RMB
January-June 2016
Equity attributable to owners of the Company
Other equity Minorit
Other Total
Item instruments y
Less: General Retaine
Share Capital compre Specific Surplus owners’
Treasur risk d interest
Prefer Perpet equity
capital reserve hensive reserve reserve
y shares reserve earnings s
ence ual Other
income
shares bonds
I. Balance at the 593,92 1,026,8 2,097,3
263,063 22,848, 190,699
end of the prior 3,220. 47,680. 82,469.
,461.97 859.15 ,248.11
year 00 37 60
Add: Changes
in accounting
policies
Correction of
errors in prior
periods
Business
mergers under the
same control
17
Other
II. Balance at the 593,92 1,026,8 2,097,3
263,063 22,848, 190,699
beginning of the 3,220. 47,680. 82,469.
,461.97 859.15 ,248.11
year 00 37 60
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
16,807, 16,807,
comprehensive
555.50 555.50
income
(II) Capital
increased and
reduced by owners
1. Ordinary
shares increased
by shareholders
2. Capital
increased by
holders of other
equity instruments
3. Amounts
of share-based
payments charged
to owners’ equity
4. Other
(III) Profit -14,848, -14,848,
distribution 080.50 080.50
1.
Appropriation to
surplus reserve
2.
Appropriation to
general risk
provisions
3.
Appropriation to -14,848, -14,848,
owners (or 080.50 080.50
shareholders)
4. Other
(IV) Internal
carry-forward of
18
owners’ equity
1. New
increase of capital
(or share capital)
from capital
reserve
2. New
increase of capital
(or share capital)
from surplus
reserve
3. Surplus
reserve for making
up loss
4. Other
(V) Special 3,246,6 3,246,6
reserve 68.97 68.97
1. Withdrawn 4,403,5 4,403,5
for 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
8. Statement of Changes in Owners’ Equity of the Company
January-June 2017
Unit: RMB
January-June 2017
Other equity instruments Other
Less: Retaine Total
Item Share Capital comprehe Special Surplus
Prefere
Perpetu Treasury d owners’
capital nce Other reserve nsive reserve reserve
al bonds shares earnings equity
shares income
I. Balance at the
593,923, 263,799,8 14,893,35 190,699,2 956,529 2,019,845
end of the prior
220.00 37.18 1.03 48.11 ,437.59 ,093.91
year
Add: Changes
in accounting
policies
19
Correction of
errors in prior
periods
Other
II. Balance at the
593,923, 263,799,8 14,893,35 190,699,2 956,529 2,019,845
beginning of the
220.00 37.18 1.03 48.11 ,437.59 ,093.91
year
III. Increase/
decrease in the 1,057,474 147,813 148,870,5
period (“-” means .73 ,056.32 31.05
decrease)
(I) Total
147,813 147,813,0
comprehensive
,056.32 56.32
income
(II) Capital
increased and
reduced by owners
1. Ordinary
shares increased
by shareholders
2. Capital
increased by
holders of other
equity instruments
3. Amounts
of share-based
payments charged
to owners’ equity
4. Other
(III) Profit
distribution
1.
Appropriation to
surplus reserve
2.
Appropriation to
owners (or
shareholders)
3. Other
(IV) Internal
carry-forward of
owners’ equity
1. New
20
increase of capital
(or share capital)
from capital
reserve
2. New
increase of capital
(or share capital)
from surplus
reserve
3. Surplus
reserve for making
up loss
4. Other
(V) Special 1,057,474 1,057,474
reserve .73 .73
1. Withdrawn 4,180,114 4,180,114
for the period .32 .32
2. Used in the 3,122,639 3,122,639
period .59 .59
(VI) Other
1,104,3
IV. Closing 593,923, 263,799,8 15,950,82 190,699,2 2,168,715
42,493.
balance 220.00 37.18 5.76 48.11 ,624.96
91
January-June 2016
Unit: RMB
January-June 2016
Other equity instruments Other
Less: Retaine Total
Item Share Capital comprehe Special Surplus
Prefere
Perpetu Treasury d owners’
capital nce Other reserve nsive reserve reserve
al bonds shares earnings equity
shares income
I. Balance at the 1,052,3
593,923, 263,799,8 17,879,74 190,699,2 2,118,653
end of the prior 51,622.
220.00 37.18 6.84 48.11 ,674.57
year 44
Add: Changes
in accounting
policies
Correction of
errors in prior
periods
Other
21
II. Balance at the 1,052,3
593,923, 263,799,8 17,879,74 190,699,2 2,118,653
beginning of the 51,622.
220.00 37.18 6.84 48.11 ,674.57
year 44
III. Increase/
decrease in the 3,246,668 -3,499,7 -253,081.
period (“-” means .97 49.98 01
decrease)
(I) Total
11,348, 11,348,33
comprehensive
330.52 0.52
income
(II) Capital
increased and
reduced by owners
1. Ordinary
shares increased
by shareholders
2. Capital
increased by
holders of other
equity instruments
3. Amounts
of share-based
payments charged
to owners’ equity
4. Other
(III) Profit -14,848, -14,848,0
distribution 080.50 80.50
1.
Appropriation to
surplus reserve
2.
Appropriation to -14,848, -14,848,0
owners (or 080.50 80.50
shareholders)
3. Other
(IV) Internal
carry-forward of
owners’ equity
1. New
increase of capital
(or share capital)
from capital
reserve
22
2. New
increase of capital
(or share capital)
from surplus
reserve
3. Surplus
reserve for making
up loss
4. Other
(V) Special 3,246,668 3,246,668
reserve .97 .97
1. Withdrawn 4,403,580 4,403,580
for the period .42 .42
2. Used in the 1,156,911 1,156,911
period .45 .45
(VI) Other
1,048,8
IV. Closing 593,923, 263,799,8 21,126,41 190,699,2 2,118,400
51,872.
balance 220.00 37.18 5.81 48.11 ,593.56
46
III. Company profile
Hubei Sanonda Co., Ltd. (hereinafter referred to as “Company” or “the Company”) is formerly known as Hubei Sha City Pesticides
Factory, a state-run enterprise set up in 1958. As approved by the Hubei Commission for Economic System Reformation and other
authorities, Hubei Sha City Pesticides Factory was reorganized as Hubei Sanonda Co., Ltd., which marked Hubei’s first large
state-run industrial enterprise to adopt the stock system. On September 8, 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 December 3, 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 May 3, 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 August 9, 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 July 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%.
23
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 April 29 to May 5, 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 May 15, 1997. And the Company exercised the over-allotment options of 15
million shares from May 15 to May 21in 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 May 20, 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 December
31, 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 July 8, 2006. And the share
reform was completed in August 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
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 July
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 November 16, 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 December 31, 2013, the share capital of the
Company remained unchanged. On April 8, 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 herein have been authorized for issuance by the Board of Directors of the Company on August 17, 2017.
There were 3 subsidiaries included in the consolidated scope at the month-end of June in 2017 while the consolidated scope of the
Company remained unchanged over the last period during the Reporting Period.
24
IV. Basis for the preparation of financial statements
1. Preparation basis
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 issued by
the Ministry of Finance with Decree No. 33 and revised with Decree No. 76, the 41 specific accounting standards, the Application
Guidance of Accounting Standards for Business Enterprises, the Interpretation of Accounting Standards for Business Enterprises and
other regulations issued and revised from 15 Feb. 2006 onwards (hereinafter jointly referred to as “the Accounting Standards for
Business Enterprises”, “China Accounting Standards” or “CAS”), as well as 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.
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. Continuation
There will be no such events or situations in the 12 months from the end of the reporting period that will cause material doubts as to
the continuation capability of the Company.
V. Significant accounting policies and estimates
Reminder of the specific accounting policies and estimates:
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 2017,
business results and cash flows for the first half year of 2017, 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
January 1 and ends on December 31of every year according to the Gregorian calendar. The fiscal period of Reporting Period was
from January1 to June 30.
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.
25
4. Recording currency
Renminbi is the dominant currency used in the economic circumstances where the Company and its domestic subsidiaries are
involved. Therefore, the Company and its domestic subsidiaries use Renminbi as their bookkeeping base currency. And the Company
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
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
26
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 Company 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 Company 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).
In the Company’s consolidated financial statements, as for the equity interests that the Company 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 Company 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
Company 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 Company and its
subsidiaries. A subsidiary is an enterprise or entity controlled by the Company.
Once any changed facts or situations result in any changes to the elements involved in the aforesaid definition of “control”, the
Company shall carry out a review.
(2) Methods for preparing the consolidated financial statements
27
Subsidiaries are fully consolidated from the date on which the Company 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
Company during the preparation of the consolidated financial statements, where the accounting policies and the accounting periods
are inconsistent between the Company and subsidiaries. For a subsidiary acquired from a business combination not under the same
control, the individual financial statements of the subsidiary are adjusted based on the fair value of the identifiable net assets at the
acquisition date.
All significant inter-group balances, transactions and unrealized profits are offset in the consolidated financial statements.
The portion of a subsidiary’s shareholders’ equity and the portion of a subsidiary’s net profits and losses for the period not held by
the Company are recognized as minority interests and minority shareholder profits and losses respectively and presented separately
under shareholders’ equity and net profits in the consolidation financial statements. The portion of a subsidiary’s net profits and
losses for the period that belong to minority interests is presented as the item of “minority shareholder profits and losses” under the
bigger item of net profits in the consolidated financial statements. Where the loss of a subsidiary shared by minority shareholders
exceeds the portion enjoyed by minority shareholders in the subsidiary’s opening owners’ equity, minority interests are offset.
Where the Company losses control on its original subsidiaries due to disposal of some equity investments or other reasons, the
residual equity interests are re-measured according to the fair value on the date when such control ceases. The summation of the
consideration obtained from the disposal of equity interests and the fair value of the residual equity interests, minus the portion in the
original subsidiary’s net assets measured on a continuous basis from the acquisition date that is enjoyable by the Company according
to the original shareholding percentage in the subsidiary, is recorded in investment gains for the period when the Company’s control
on the subsidiary ceases. Other comprehensive incomes in relation to the equity investment in the original subsidiary are 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 Company losses control on its original subsidiaries due to step by step disposal of equity investments through multiple
transactions, it need to distinguish the Company 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
28
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 Company losses control on its original subsidiaries due to disposal
of some equity investments or other reasons” (See the front paragraph) relevant transactions of the Company 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 lose of control , when the Company 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 Company 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 Company enjoys assets and has to bear liabilities related to the arrangement. A joint venture
refers to a joint arrangement where the Company is only entitled to the net assets of the arrangement.
The Company’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 Company, 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 Company’s stake in the joint operation;
recognizes the income from sale of the Company’s share in the output of the joint operation; recognizes the income from sale of the
joint operation’s outputs according to the Company’s stake in it; and recognizes the expense solely incurred to the Company and the
expense incurred to the joint operation according to the Company’s stake in it.
When the Company, 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 Company 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 Company 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 Company’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
29
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
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 Company over an overseas operation ceases due to disposal of all or some of the Company’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 Company’s equity in an overseas operation decreases due to disposal of some equity investment or other reasons but the
Company 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.
30
10. Financial instruments
The Company 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.
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 Company’s financial
assets measured at fair value through profit/loss are all transactional financial assets.
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.
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.
31
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 Company 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
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 Company 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 Company 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 Company 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.
32
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
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 Company 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 Company 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
33
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 Company 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.
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 Company (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
34
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) Offsetting financial assets and financial liabilities
When the Company 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 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.
(8) 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 Company issues (including refinancing), re-purchases, sells or written-offs the equity instrument as the disposing of the changes
of the equity. The Company 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 Company to holders of equity instruments are deducted from
shareholders’ equity. The Company 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
Judgement basis or monetary standards of provision for bad
RMB5 million should recognize as the receivables with
debts 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 (%)
35
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%
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
Is the Company subject to any disclosure requirements for special industries?
No.
(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
36
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
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 Company 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.
37
14. Long-term equity investments
The long-term equity investments of this part refer to the long-term equity investments that the Company has control, joint control or
significant influence over the investees. The long-term equity investment that the Company 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 polices to “financial instrument” of this note.
Joint control, refers to the control jointly owned according to the relevant agreement on an arrangement by the Company and the
relevant activities of the arrangement should be decided only after the participants which share the control right make consensus.
Significant influence refers to the power of the Company 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.
38
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.
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 Company, the
fair value of equity securities issued by the Company, 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
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.
②Long-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 polices adopted by the investees is not accord with that of the Company,
should be adjusted according to the accounting policies of the Company 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 Company 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 Company 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 Company and the investees which belongs to the impairment losses of the
transferred assets, should not be neutralized. The assets launched by the Company to the associated enterprises or the joint ventures if
39
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 Company 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 Company 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.
The Company 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 Company 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 Company 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 Company before the first execution of the new accounting criterion on January 1,
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.
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
40
estates of the Company include the right to use any land which has already been rented; the right to use any land which is held and
prepared for transfer after appreciation; and the right to use any building which has already been rented.
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 Company 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 Company shall make a follow-up measurement to the investment real estates by employing the cost pattern on the date of the
balance sheet. An accrual depreciation or amortization shall be made for the investment real estates in the light of the accounting
policies of the use right of buildings or lands.
Impairment test method and withdrawal method of impairment provision of investment real estates. The Company, on the day of
balance sheet, made a judgment on whether there is any sign of possible assets impairment. If any evidence shows that there is
possible assets impairment, the recoverable amount of the assets shall be estimated and impairment test shall be conducted. If
impairment test result indicates that an asset's recoverable amount is lower than its carrying value, impairment provision shall be
made according to its difference and recognized as the impairment loss.
When owner-occupied real estate or inventories are changed into investment real estate or investment real estate is changed into
owner-occupied real estate, 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
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 Company 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
Category of fixed assets Depreciation method Useful year Salvage ratio Annual deprecation ratio
Average method of
Housing and building 15-24 2%-4% 4%--6.53%
useful life
Special equipment Average method of 3-15 2%-4% 6.4%--32.67%
41
useful life
Average method of
General 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.
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.
42
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
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 Company 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 Company 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.
43
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 Company 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
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.
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 Company 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 and defined benefit plans. 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 Company 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 Company 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
44
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 Company
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.
(4) Accounting treatment of the welfare of other long-term staffs
The other long-term welfare that the Company 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 Company 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.
45
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 Company makes the best estimate base on the subsequent information
newly 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 Company. 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 Company 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 Company.
On each balance sheet date and the settlement date before the settlement of the relevant liabilities, the Company 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 Company, 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 Company cancel partial or total granted equity instrument.
During the vesting period, if the Company cancels the granted equity instrument, the Company 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 Company.
(3) Accounting treatment of the share-based payment transactions involved with the Company, the shareholders of the Company or
the actual controllers
The share-based equity payment transaction which involved with the Company, the shareholders or actual controllers of the Company,
if one between the settlement enterprises and the service accepted enterprises are within the Company and the others are not, should
be accounting disposed according to the following regulations in the consolidation financial statement of the Company:
46
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,
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 Company, 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 Company 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 Company 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 Company 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 Company 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 Company dispose them as the changes of the equities and
the relevant transaction expenses are also minus from the equities. The Company disposes the distribution of the holder of the equity
instruments as the profits distribution.
The Company not confirms the changes of the fair value of the equity instruments.
47
28. Revenue
Is the Company subject to any disclosure requirements for special industries?
No.
(1) Revenue from sale of goods
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.
The Company mainly sells paraquat, acephate, glyphosate and other pesticide products as well as sodium hydroxide, ionic membrane
caustic soda, pmida and other chemical products. Domestic sales business takes the date of delivering the goods and issuing the
invoice as the confirmation time for income; the export business takes the date of loading the goods on board and receiving the bill of
lading issued by the carrier as the confirmation time for income.
(2) Providing labor services
If the Company can reliably estimate the outcome of a transaction concerning the labor services it provides, it shall recognize the
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) Royalty revenue
In accordance with relevant contract or agreement, the amount of royalty revenue should be recognized as revenue on accrual basis.
(4) Interest revenue
The amount of interest revenue should be measured and confirmed in accordance with the length of time for which the Company’s
monetary fund is used by others and the agreed interest rate.
48
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
to make up such deductible temporary differences
49
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 Company 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.
50
(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
51
34. Other
VI. Taxes
1. Main taxes and tax rates
Category of taxes Tax basis Tax rate
VAT Taxable income 13% 17%
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
Ministry of Finance and State Administration of Taxation have recently issued the Notice about Relevant Policy of simplifying and
consolidating VAT Rates (CS [2017] No. 37) that VAT rates structure would be simplified and consolidated and 13% VAT rate
would be cancelled from July 1, 2017. The VAT rate of pesticide products of the Company will drop from original 13% to 11% from
July 1, 2017.
VII. Notes on major items in consolidated financial statements of the Company
1. Monetary funds
Unit: RMB
Item Closing balance Opening balance
Bank deposits 593,692,771.30 539,470,064.75
Other monetary funds 6,820,000.00 7,800,000.00
Total 600,512,771.30 547,270,064.75
Other notes:
On June 30, 2017, the Company's monetary fund whose ownership was limited is RMB6,820,000.00. All are the margin for
bank acceptance bills.
2. Financial assets measured by fair value and the changes be included in the current gains and losses
Unit: RMB
Item Closing balance Opening balance
Other notes:
52
3. Derivative financial assets
□ Applicable √ Not applicable
4. Notes receivable
(1) Notes receivable listed by category
Unit: RMB
Item Closing balance Opening balance
Bank acceptance bill 34,000,716.79 91,784,604.58
Total 34,000,716.79 91,784,604.58
(2) Notes receivable pledged by the Company at the period-end
Unit: RMB
Item Amount
(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 335,888,576.86
Total 335,888,576.86
(4) Notes transferred to accounts receivable because drawer of the notes fails to executed the contract or
agreement
Unit: RMB
Amount of the notes transferred to accounts receivable at the
Item
period-end
Other notes
5. Accounts receivable
(1) Accounts receivable disclosed by category
Unit: RMB
Category Closing balance Opening balance
53
Book balance Bad debt provision Book balance Bad debt provision
Withdra
Book
Proportio wal Proportio Withdrawal Book value
Amount Amount value Amount Amount
n proportio n proportion
n
Accounts receivable
withdrawn bad debt
453,083, 31,806,9 421,276,8 228,550 19,942,37 208,608,35
provision according 99.87% 7.02% 99.74% 8.73%
778.02 49.58 28.44 ,726.13 0.20 5.93
to credit risks
characteristics
Accounts receivable
with insignificant
single amount for 584,457. 584,457. 584,457 584,457.5
0.13% 100.00% 0.26% 100.00%
which bad debt 52 52 .52 2
provision separately
accrued
453,668, 32,391,4 421,276,8 229,135 20,526,82 208,608,35
Total 100.00% 100.00%
235.54 07.10 28.44 ,183.65 7.72 5.93
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
Sub-item within 1 year
Within 1 year 438,362,789.92 21,918,139.51 5.00%
Subtotal within 1 year 438,362,789.92 21,918,139.51 5.00%
1 to 2 years 3,908,930.09 390,893.01 10.00%
2 to 3 years 1,507,706.92 452,312.07 30.00%
3 to 4 years 517,492.20 258,746.10 50.00%
Over 5 years 8,786,858.89 8,786,858.89 100.00%
Total 453,083,778.02 31,806,949.58 7.02%
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
54
units) Accounts receivable Bad debt provision Withdraw Withdraw reason
proportion
Jiangxi Nanchang Red Valley 584,457.52 584,457.52 100.00% No result after multiple
Plant Protection Center collection and estimate to be
unable to take back
Total 584,457.52 584,457.52 — —
(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 RMB 11,864,579.38; 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:
Unit: RMB
Name of the units Reversed or collected amount Method
(3) The actual write-off accounts receivable
Unit: RMB
Item Amount
Of which the significant actual write-off accounts receivable:
Unit: RMB
Whether occurred
Name of the units Nature Amount Reason Process from the related
transactions
Notes of the write-off the accounts receivable:
(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 end balance of Bad debt provision
the accounts receivable (%)
Customer receivable A 36,741,513.90 Within 1 year 8.10% 1,837,075.70
Customer receivable B 34,181,383.50 Within 1 year 7.53% 1,709,069.18
Customer receivable C 27,741,168.00 Within 1 year 6.11% 1,387,058.40
Customer receivable D 16,907,547.52 Within 1 year 3.73% 845,377.38
Customer receivable E 15,780,206.07 Within 1 year 3.48% 789,010.30
Total 131,351,818.99 28.95% 6,567,590.95
55
(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
Other notes:
6. Prepayment
(1) List by aging analysis:
Unit: RMB
Closing balance Opening balance
Aging
Amount Proportion Amount Proportion
Within 1 year 24,660,997.21 99.69% 41,952,017.29 99.86%
Over 3 years 60,417.69 0.31% 60,417.69 0.14%
Total 24,721,414.90 -- 42,012,434.98 --
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 5,084,014.82 Within 1 year 20.57%
Supplier B 5,000,000.00 Within 1 year 20.23%
Supplier C 2,736,000.00 Within 1 year 11.07%
Supplier D 2,308,799.83 Within 1 year 9.34%
Supplier E 1,355,408.98 Within 1 year 5.48%
Total 16,484,223.63 66.68%
Other notes:
7. Interest receivable
(1) Category of interest receivable
Unit: RMB
Item Closing balance Opening balance
56
(2) Significant overdue interest
Whether occurred
Borrower Closing balance Overdue time Reason impairment and its
judgment basis
Other notes:
8. Dividend receivable
(1) Dividend receivable
Unit: RMB
Item (or investees) Closing balance Opening balance
(2) Significant dividend receivable aged over 1 year
Unit: RMB
Whether occurred
Item (or investees) Closing balance Aging Reason impairment and its
judgment basis
Other notes:
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
Other accounts
receivable withdrawn
10,689,1 5,641,36 5,047,793 18,292, 5,543,317 12,749,493.
bad debt provision 100.00% 52.78% 100.00% 30.30%
58.60 5.44 .16 811.73 .88 85
according to credit
risks characteristics
10,689,1 5,641,36 5,047,793 18,292, 5,543,317 12,749,493.
Total 100.00% 52.78% 100.00% 30.30%
58.60 5.44 .16 811.73 .88 85
Other accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end
57
□ 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
Sub-item within 1 year
Within 1 year 767,352.96 38,367.65 5.00%
Subtotal within 1 year 767,352.96 38,367.65 5.00%
1 to 2 years 2,681,272.00 268,127.20 10.00%
4 to 5 years 267,784.57 133,892.28 50.00%
Over 5 years 5,200,978.31 5,200,978.31 100.00%
Total 8,917,387.84 5,641,365.44 63.26%
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
Other accounts receivable Bad debt provision Withdrawal proportion (%)
Non-risk group(Export tax 1,771,770.76
refunds)
Total 1,771,770.76
(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 RMB 98,047.56; 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:
Unit: RMB
Name of units Reversed or collected amount Method
(3) The actual write-off other accounts receivable
Unit: RMB
Item Amount
Of which the significant write-off other accounts receivable:
58
Unit: RMB
Whether occurred
Name of units Nature Amount Reason Process from the related
transactions
Notes of write-off other accounts receivable:
(4) Other accounts receivable classified by the nature of accounts
Unit: RMB
Nature Closing book balance Opening book balance
Export tax refunds 1,771,770.76 8,761,418.15
Liquidation amount of investment fund 3,398,275.80 3,398,275.80
Cash pledge 3,370,000.00 3,370,000.00
Pretty cash 855,392.18 1,454,504.18
Liquidation amount of loans 548,500.00 548,500.00
Other 745,219.86 760,113.60
Total 10,689,158.60 18,292,811.73
(5) Top 5 of the closing balance of the other accounts receivable collected according to the arrears party
Unit: RMB
Proportion of the
total end balance of Closing balance of
Name of units Nature Closing balance Aging
the accounts bad debt provision
receivable
Settlement payment
Shantou Biyue
for investment 3,125,000.00 Over 5 years 29.24% 3,125,000.00
Plastic Co., Ltd.
accounts
Shanghai COSCO
Cash pledge 2,670,000.00 1 to 2 years 24.98% 267,000.00
Logistics Co., Ltd
Jingzhou Center
Subtreasury of State Export rebates 1,771,770.76 Within 1 year 16.58%
Treasury
Hubei Jingzhou
Shashi Agricultural Settlement payment
548,500.00 Over 5 years 5.13% 548,500.00
Production Materials for goods
Co., Ltd.
Jingzhou Safety
Cash pledge 300,000.00 Over 5 years 2.81% 300,000.00
Production
59
Supervision Bureau
Total -- 8,415,270.76 -- 78.74% 4,240,500.00
(6) Accounts receivable involved with government subsidies
Unit: RMB
Project of government Estimated received time,
Name of units Closing balance Closing age
subsidies amount and basis
(7) Other account receivable which terminate the recognition owning to the transfer of the financial assets
(8) The amount of the assets and liabilities formed by the transfer and the continues involvement of other
accounts receivable
Other notes:
10. Inventory
Whether does the Company need to abide by the disclosure requirement in special industry?
No
(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 47,381,034.36 1,283,210.67 46,097,823.69 42,586,367.82 1,606,405.33 40,979,962.49
Goods in process 78,808,683.48 130,107.14 78,678,576.34 49,702,198.94 1,642,456.76 48,059,742.18
Inventory goods 72,867,838.55 1,543,359.01 71,324,479.54 85,851,536.06 1,250,433.70 84,601,102.36
Total 199,057,556.39 2,956,676.82 196,100,879.57 178,140,102.82 4,499,295.79 173,640,807.03
Whether the Company is required to comply with the Shenzhen Stock Exchange Industry Information Disclosure Guidelines No. 4 -
Listed Companies Engaged In Seed Industry, Planting Business disclosure requirements
No
(2) Falling price reserves of inventory
Unit: RMB
Increased amount Decreased amount
Item Opening balance Reverse or Closing balance
Withdrawal Other Other
write-off
60
Raw materials 1,606,405.33 1,283,210.67 1,606,405.33 1,283,210.67
Goods in process 1,642,456.76 130,107.14 1,642,456.76 130,107.14
Inventory goods 1,250,433.70 1,543,359.01 1,250,433.70 1,543,359.01
Total 4,499,295.79 2,956,676.82 4,499,295.79 2,956,676.82
Item Specific basis of withdrawal of falling Reasons for reversal Reasons for write-off
price reserves of inventory
The net realizable value lower than the Consumed
Raw materials
cost
The net realizable value lower than the Consumed
Goods in process
cost
The net realizable value lower than the Sold
Inventory goods
cost
(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
Unit: RMB
Item Amount
Other notes:
11. Assets divided as held-to-sold
Unit: RMB
Estimated disposal
Item Closing book value Fair value Estimated disposal time
expense
Other notes:
12. Non-current assets due within 1 year
Unit: RMB
Item Closing balance Opening balance
Other notes:
13. Other current assets
Unit: RMB
Item Closing balance Opening balance
61
Input tax to be deducted 4,205,149.22 9,779,875.26
Tax prepayments 405,429.29 5,042,224.31
Carbon emission right 490,319.48 696,123.68
Total 5,100,897.99 15,518,223.25
Other notes:
14. Available-for-sale financial assets
(1) List of available-for-sale financial assets
Unit: RMB
Closing balance Opening balance
Item Falling price Falling price
Book balance Book value Book balance Book value
reserves reserves
Available-for-sale equity
20,564,000.00 11,991,017.37 8,572,982.63 20,564,000.00 11,991,017.37 8,572,982.63
instruments
Measured by cost 20,564,000.00 11,991,017.37 8,572,982.63 20,564,000.00 11,991,017.37 8,572,982.63
Total 20,564,000.00 11,991,017.37 8,572,982.63 20,564,000.00 11,991,017.37 8,572,982.63
(2) Available-for-sale financial assets measured by fair value at the period-end
Unit: RMB
Category of the
Available-for-sale equity Available-for-sale
available-for-sale Total
instruments liabilities instruments
financial assets
(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 Period-beg Period-beg proportion the
Increase Decrease Period-end Increase Decrease Period-end
in in among the reporting
investees period
Hubei 20,000,000 20,000,000 11,991,017 11,991,017
0.71%
Bank .00 .00 .37 .37
Hubei
Shendian
564,000.00 564,000.00 0.60%
Auto
Motor Co.,
62
Ltd.
20,564,000 20,564,000 11,991,017 11,991,017
Total --
.00 .00 .37 .37
(4) Changes of the Impairment of the Available-for-sale Financial Assets during the Reporting Period
Unit: RMB
Category of
Available-for-sale equity Available-for-sale debt
available-for-sale Total
instruments instruments
financial assets
Opening impairment
balance that has been 11,991,017.37 11,991,017.37
accrued
Closing impairment
balance that has been 11,991,017.37 11,991,017.37
accrued
(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
Unit: RMB
Item of The falling range How long it is
Impairment Reason for no
available-for-sale Cost of of fair value falling
Closing fair value balance that has provision for
equity investment relative to the continuously
been accrued impairment
instruments cost (month)
Other notes
15. Investment Held-to-maturity
(1) List of Investment Held-to-maturity
Unit: RMB
Closing balance Opening balance
Item Provision for Provision for
Book balance Book value Book balance Book value
impairment impairment
(2) Significant Investment Held-to-maturity at the End of the Reporting Period
Unit: RMB
Item Book value Coupon rate Actual interest rate Due date
63
(3) The Current Reclassified Investment Held-to-maturity
Other notes
16. Long-term Accounts Receivable
(1) List of Long-term Accounts Receivable
Unit: RMB
Closing balance Opening balance
Interval of
Item Bad-debt Bad-debt
Book balance Book value Book balance Book value discount rate
provision provision
(2) Long-term Accounts Receivable derecognized for the transfer of financial assets
(3) Amount of Assets and Liabilities Generated from the Transfer of Long-term Accounts Receivable and
Continuous involvement
Other notes
17. Long-term Equity Investment
Unit: RMB
Increase/decrease
Closing
Gains and Adjustme
Cash Withdraw balance
Additiona losses nt of
Opening Reduced Changes bonus or al of Closing of
Investees l recognize other
balance investmen of other profits impairme Other balance impairme
investmen d under comprehe
t equity announce nt nt
t the equity nsive
d to issue provision provision
method income
I. Joint ventures
II. Associated enterprises
Other notes
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
64
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 3,212,317.22 3,212,317.22
2. Increased amount of
157,109.88 157,109.88
the period
(1) Withdrawal or
157,109.88 157,109.88
amortization
3. Decreased amount of
the period
(1) Disposal
(2) Other transfer
4. Closing balance 3,369,427.10 3,369,427.10
III. Depreciation reserves
1. Opening balance
2. Increased amount of
the period
65
(1) Withdrawal
3. Decreased amount of
the period
(1) Disposal
(2) Other transfer
4. Closing balance
IV. Book value
1. Closing book value 4,565,415.90 4,565,415.90
2. Opening book value 4,722,525.78 4,722,525.78
(2) Investment Property Adopted Fair Value Measurement Mode
□ Applicable √ Not applicable
(3) Details of Investment Property Failed to Accomplish Certification of Property
Unit: RMB
Item Book value Reason
A set of housing in Hubei Building of Built from raised funds with collective
3,312,483.62
Shenzhen property certificate
Other notes
19. Fixed Assets
(1) List of Fixed Assets
Unit: RMB
Houses and Machinery Transportation
Item Total Item
buildings equipment equipment
I. Original book
value
1. Opening
933,884,424.75 1,967,850,673.56 9,270,190.30 35,171,605.41 2,946,176,894.02
balance
2. Increased
1,647,295.28 24,728,652.39 26,375,947.67
amount of the period
(1) Purchase 1,647,295.28 6,907,530.19 8,554,825.47
(2) Transfer of 17,821,122.20 17,821,122.20
66
project under
construction
(3) Increased
from enterprise
merger
3. Decreased
1,162,170.19
amount of the period
(1) Disposal or
1,162,170.19
Scrap
4. Closing balance 935,531,720.03 1,991,417,155.76 9,270,190.30 35,171,605.41 2,971,390,671.50
II. Accumulative
depreciation
1. Opening
269,190,698.86 969,815,184.97 6,495,244.48 33,380,133.90 1,278,881,262.21
balance
2. Increased
19,462,116.04 90,590,337.96 355,409.10 318,830.54 110,726,693.64
amount of the period
(1) Withdrawal 19,462,116.04 90,590,337.96 355,409.10 318,830.54 110,726,693.64
3. Decreased
741,428.10 741,428.10
amount of the period
(1) Disposal or
741,428.10 741,428.10
Scrap
4. Closing balance 288,652,814.90 1,059,664,094.83 6,850,653.58 33,698,964.44 1,388,866,527.75
III. Depreciation
reserves
1. Opening
2,848,203.34 59,991,220.30 82,995.62 62,922,419.26
balance
2. Increased
amount of the period
(1) Withdrawal
3. Decreased
amount of the period
(1) Disposal or
Scrap
67
4. Closing balance 2,848,203.34 59,991,220.30 82,995.62 62,922,419.26
IV. Book value
1. Closing book
644,030,701.79 871,761,840.63 2,419,536.72 1,389,645.35 1,519,601,724.49
value
2. Opening book
661,845,522.55 938,044,268.29 2,774,945.82 1,708,475.89 1,604,373,212.55
value
(2) List of Temporarily Idle Fixed Assets
Unit: RMB
Accumulative Impairment
Item Original book value Book value Notes
depreciation provision
Houses and
5,531,028.88 3,722,843.08 1,757,484.71 50,701.09
buildings
(3) Fixed Assets Leased in from Financing Lease
Unit: RMB
Accumulative
Item Original book value Impairment provision Book value
depreciation
(4) Fixed Assets Leased out from Operation Lease
Unit: RMB
Item Closing book value
(5) Details of Fixed Assets Failed to Accomplish Certification of Property
Unit: RMB
Item Book value Reason
Other notes
20. Construction in Progress
(1) List of Construction in Progress
Unit: RMB
Closing balance Opening balance
Item
Book balance Impairment Book value Book balance Impairment Book value
68
provision provision
Relocation of ion
film electrolyser
of 10,391,878.97 10,391,878.97
electrochemical
plant
116 acres public
engineering
projects in 3,544,791.85 3,544,791.85 3,482,421.95 3,482,421.95
Sanonda new area
southeast corner
Herbicide factory
PMIDA Alkaline
hydrolysis 2,098,889.42 2,098,889.42
continuous pilot
project
Project of interval
moving,
upgrading and 3,129,857.53 3,129,857.53 1,972,012.90 1,972,012.90
transformation of
pesticide products
Pilot project of
continuous
oxidation of
1,830,815.14 1,830,815.14 1,338,675.84 1,338,675.84
glyphosate in
herbicide
factories
Sewage disposal
project which is
the supporting 5,499,906.56 5,499,906.56 438,777.48 438,777.48
project of ion
membrane
Project of 5000
tons newly
795,159.35 795,159.35
developed
pesticide products
Overhaul of the
salted salt mine
No. 9-10 and
2,106,855.03 2,106,855.03
upgrading and
transformation
of brine pumps
69
Project of
pretreatment of
1000 cubic
2,560,137.55 2,560,137.55
meters water due
to increased
pyroelectricity
Other 3,058,985.35 3,058,985.35 1,502,599.81 1,502,599.81
Total 22,526,508.36 22,526,508.36 21,225,256.37 21,225,256.37
(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
Project
of
interval
moving, Loans
upgradin from
1,509,42 1,972,01 1,157,84 3,129,85 758,271. 754,956.
g and 0.21% 0.21% 1.20% financial
0,000.00 2.90 4.63 7.53 37 06
transfor institutio
mation ns
of
pesticide
products
Project
of 5000
Loans
tons
from
newly 131,900, 244,339. 550,819. 795,159.
0.60% 0.60% 415.28 financial
develope 000.00 62 73 35
institutio
d
ns
pesticide
products
Sewage 5,390,00 438,777. 5,061,12 5,499,90 102.04% 98% Other
70
disposal 0.00 48 9.08 6.56
project
which is
the
supporti
ng
project
of ion
membra
ne
Overhaul
of the
salted
salt mine
No. 9-10
and 2,500,00 2,106,85 2,106,85
84.27% 84.27% Other
upgradin 0.00 5.03 5.03
g and
transfor
mation
of brine
pumps
Project
of
pretreat
ment of
1000
cubic
4,900,00 2,560,13 2,560,13
meters 52.25% 52.25% Other
0.00 7.55 7.55
water
due to
increase
d
pyroelect
ricity
Relocati
on of ion
Loans
film
from
electroly 14,000,0 10,391,8 4,514,25 14,906,1 17,662.2
106.47% 100% financial
ser of 00.00 78.97 0.12 29.09 2
institutio
electroch
ns
emical
plant
71
116
acres
public
engineeri
ng
6,500,00 3,482,42 62,369.9 3,544,79
projects 54.54% 54.54% Other
0.00 1.95 0 1.85
in
Sanonda
new area
southeast
corner
Chlorine
liquefact
ion safe
renovati
on on 1,190,00 700,721. 102,761. 803,482.
67.52% 100% Other
SIS 0.00 16 17 33
system
in
chlor-alk
ali plants
Pilot
project
of
continuo
us
3,810,00 1,338,67 492,139. 1,830,81
oxidatio 48.05% 48.05% Other
0.00 5.84 30 5.14
n of
glyphosa
te in
herbicide
factories
Herbicid
e factory
PMIDA
Alkaline
1,820,00 2,098,88 12,621.3 2,111,51
hydrolys 116.02% 100% Other
0.00 9.42 6 0.78
is
continuo
us pilot
project
1,681,43 20,667,7 16,620,9 17,821,1 19,467,5 776,348. 754,956.
Total -- -- --
0,000.00 17.34 27.87 22.20 23.01 87 06
72
(3) List of the Withdrawal of the Impairment Provision of the Construction in Progress
Unit: RMB
Item Amount of provision Reason of provision
Other notes
21. Engineering Material
Unit: RMB
Item Closing balance Opening balance
Other notes:
22. Liquidation of Fixed Assets
Unit: RMB
Item Closing balance Opening balance
Other notes:
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
277,213,484.07 18,743,699.96 2,500.00 295,959,684.03
balance
73
2. Increased
342,342.34 342,342.34
amount of the period
(1) Purchase 342,342.34 342,342.34
(2) Internal R
&D
(3) Increased
from enterprise
merger
3. Decreased
amount of the period
(1) Disposal
4. Closing
277,555,826.41 18,743,699.96 2,500.00 296,302,026.37
balance
II. Total accrued
amortization
1. Opening
46,430,446.71 9,690,557.14 2,500.00 56,123,503.85
balance
2. Increased
2,457,968.58 655,653.06 3,113,621.64
amount of the period
(1)
2,457,968.58 655,653.06 3,113,621.64
Withdrawal
3. Decreased
amount of the period
(1) Disposal
4. Closing
48,888,415.29 10,346,210.20 2,500.00 59,237,125.49
balance
III. Depreciation
reserves
1. Opening
32,072,093.53 32,072,093.53
balance
2. Increased
amount of the period
(1)
Withdrawal
74
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
196,595,317.59 8,397,489.76 204,992,807.35
value
2. Opening
198,710,943.83 9,053,142.82 207,764,086.65
book value
The proportion of the intangible assets formed from the internal R&D through the Company among the balance of the intangible
assets at the period-end is 000%.
(2) Details of Fixed Assets Failed to Accomplish Certification of Land Use Right
Unit: RMB
Item Book value Reason
Other notes:
26. R&D Expenses
Unit: RMB
Opening Closing
Item Current increased amount Current decreased amount
balance balance
Other notes
27. Goodwill
(1) Original Book Value of Goodwill
Unit: RMB
Name of the
invested units or
Opening balance Increase Decrease Closing balance
events generating
goodwill
(2) Impairment Provision of Goodwill
Unit: RMB
75
Name of the
invested units or
Opening balance Increase Decrease Closing balance
events generating
goodwill
Notes to the recognition methods of the goodwill impairment test process, parameters and goodwill impairment losses:
Other notes
28. Long-term Unamortized Expenses
Unit: RMB
Amortization
Item Opening balance Increased amount Decreased amount Closing balance
amount
Other notes
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
102,239,152.30 25,559,788.07 92,213,844.52 23,053,461.13
provision
Deductible losses 65,860,327.38 16,465,081.85
Total 102,239,152.30 25,559,788.07 158,074,171.90 39,518,542.98
(2) Deferred Income Tax Liabilities Had Not Been Off-set
Unit: RMB
Closing balance Opening balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
differences liabilities differences liabilities
(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
76
Deferred income tax
25,559,788.07 39,518,542.98
assets
(4) List of unrecognized deferred income tax assets
Unit: RMB
Item Closing balance Opening balance
Deductible temporary difference 45,735,826.97 45,341,127.03
Deductible losses 26,784,883.88 53,156,470.45
Total 72,520,710.85 98,497,597.48
(5) Deductible Losses of Unrecognized Deferred Income Tax Assets Will Due the Following Years
Unit: RMB
Years Closing balance Opening balance Notes
Y 2018 7,749,910.75
Y 2019 12,203,484.86 30,825,160.68
Y 2020
Y 2021 14,581,399.02 14,581,399.02
Total 26,784,883.88 53,156,470.45 --
Other notes:
30. Other Non-current Assets
Unit: RMB
Item Closing balance Opening balance
Land prepayments 11,000,000.00 5,000,000.00
Prepayment for sewage disposal
2,823,207.46 2,123,207.46
technology
Total 13,823,207.46 7,123,207.46
Other notes:
31. Short-term Loans
(1) Category of Short-term Loans
Unit: RMB
Item Closing balance Opening balance
Guaranteed loan 50,000,000.00
77
Total 50,000,000.00 0.00
Notes of short-term loans category:
The Company guaranteed that the loans were acquired after being secured by Jingzhou Sanonda Co., Ltd., China National
Agrochemical Corporation and China National Chemical Corporation.
(2) List of the Short-term Loans Overdue but Not Return
The amount of the overdue unpaid short-term loans at the period-end was of RMB000, of which the significant overdue unpaid
short-term loans are as follows:
Unit: RMB
Borrower Closing balance Lending rate Overdue time Overdue rate
Other notes:
32. Financial Liabilities Measured by Fair Value and the Changes Included in the Current Gains and
Losses
Unit: RMB
Item Closing balance Opening balance
Other notes:
33. Derivative Financial Liabilities
□ Applicable √ Not applicable
34. Notes Payable
Unit: RMB
Category Closing balance Opening balance
Bank acceptance bill 34,100,000.00 26,000,000.00
Total 34,100,000.00 26,000,000.00
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
Within 1 year 168,206,753.38 130,311,746.47
1 to 2 years 9,132,422.69 11,630,966.51
78
2-3years 1,021,616.37 21,934,800.22
Over 3 years 5,215,040.54 5,304,996.84
Total 183,575,832.98 169,182,510.04
(2) Notes of the Accounts Payable Aging over One Year
Unit: RMB
Item Closing balance Unpaid/ Un-carry-over reason
Dalian Haiyeet Heavy Industry Co., Ltd. 7,200,000.00 Unsettled
Jiangsu Leke Energy-saving Technology
390,000.00 Unsettled
Co., Ltd.
Yueyang Zhongnan Chemical Engineering
449,065.00 Unsettled
Construction Co., Ltd.
Total 8,039,065.00 --
Other notes:
36. Advance from Customers
(1) List of Advance from Customers
Unit: RMB
Item Closing balance Opening balance
Within 1 year 16,020,102.37 29,775,692.05
1 to 2 years 618,012.16 1,133,842.23
2-3years 256,691.03 97,504.64
Over 3 years 1,752,095.80 1,658,558.73
Total 18,646,901.36 32,665,597.65
(2) Significant Advance from Customers Aging over One Year
Unit: RMB
Item Closing balance Unpaid/ Un-carry-over reason
Retailer A 144,647.00 Unsettled
Retailer B 136,150.52 Unsettled
Retailer C 129,250.00 Unsettled
Retailer D 111,800.00 Unsettled
Retailer E 100,000.00 Unsettled
Total 621,847.52 --
79
(3) Particulars of Settled but Unfinished Projects Formed by Construction Contract at Period-end.
Unit: RMB
Item Amount
Other notes:
37. Payroll Payable
(1) List of Payroll Payable
Unit: RMB
Item Opening balance Increase Decrease Closing balance
I. Short-term salary 24,693,516.37 74,602,716.98 86,766,093.13 12,530,140.22
II. Post-employment
benefit-defined 5,475,861.71 12,677,387.53 14,576,080.50 3,577,168.74
contribution plans
III. Termination benefits 204,335.50 204,335.50
Total 30,169,378.08 87,484,440.01 101,546,509.13 16,107,308.96
(2) List of Short-term Salary
Unit: RMB
Item Opening balance Increase Decrease Closing balance
1. Salary, bonus,
20,308,241.70 59,036,419.94 69,417,219.67 9,927,441.97
allowance, subsidy
2. Employee welfare 3,694,339.91 3,694,339.91
3. Social insurance 2,061,992.23 4,949,525.87 5,698,089.49 1,313,428.61
Of which: Medical
1,763,857.90 4,090,282.50 4,819,085.20 1,035,055.20
insurance premiums
Work-related
227,580.03 657,199.10 672,275.86 212,503.27
injury insurance
Maternity
70,554.30 202,044.27 206,728.43 65,870.14
insurance
4. Housing fund 2,223,282.44 6,622,431.26 7,656,444.06 1,189,269.64
5. Labor union budget
and employee education 100,000.00 300,000.00 300,000.00 100,000.00
budget
Total 24,693,516.37 74,602,716.98 86,766,093.13 12,530,140.22
80
(3) List of Drawing Scheme
Unit: RMB
Item Opening balance Increase Decrease Closing balance
1. Basic pension benefits 4,762,416.33 9,775,712.56 11,437,980.84 3,100,148.05
2. Unemployment
176,384.83 364,734.45 421,858.87 119,260.41
insurance
3. Annuity 537,060.55 2,536,940.52 2,716,240.79 357,760.28
Total 5,475,861.71 12,677,387.53 14,576,080.50 3,577,168.74
Other notes:
38. Taxes Payable
Unit: RMB
Item Closing balance Opening balance
VAT 22,368,026.09 8,450,218.33
Corporate income tax 16,938,388.80 7,659,102.97
Personal income tax 140,205.05 66,040.48
Urban maintenance and construction tax 190,879.27 581,774.73
Resource tax 70,456.17 50,494.23
Property tax 511,845.33 1,205,340.94
Land use tax 251,682.42 31,682.42
Education Surcharge 81,805.42 249,332.03
Others 185,999.71 178,336.48
Total 40,739,288.26 18,472,322.61
Other notes:
39. Interest Payable
Unit: RMB
Item Closing balance Opening balance
List of the significant overdue unpaid interest:
Unit: RMB
Borrower Overdue amount Overdue reasons
Other notes:
81
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
Margin 822,200.00 100,741,400.00
Agency fee 43,302,376.35 45,874,730.25
Carriage 8,852,456.42 6,245,490.86
Sewage charge 5,315,955.00 1,763,989.00
Local charge 4,225,501.35 1,657,798.55
Cash pledge 2,251,800.11 1,636,263.11
Export price difference 1,246,035.32 1,190,027.40
Commission 2,009,315.51 692,702.44
Others 16,226,102.31 5,356,244.32
Total 84,251,742.37 165,158,645.93
(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
Jingzhou Xintaida Logistics Co., Ltd. 300,000.00 Cash pledge
Qichun County Bureau for State-owned
300,270.90 Unsettled
Assets
Jingzhou Agricultural & Technology Co.,
300,000.00 Cash pledge
Ltd.
Total 1,500,270.90 --
Other notes
82
42. Liabilities Classified as Holding for Sale
Unit: RMB
Item Closing balance Opening balance
Other notes:
43. Non-current Liabilities Due within 1 Year
Unit: RMB
Item Closing balance Opening balance
Long-term loans due within 1 year 139,090,000.00 147,000,000.00
Total 139,090,000.00 147,000,000.00
Other notes:
44. Other Current Liabilities
Unit: RMB
Item Closing balance Opening balance
Increase/decrease of the short-term bonds payable:
Unit: RMB
Withdraw Overflow
The Pay in
Bonds Face Issuing Bonds Opening interest discount Closing
Amount current current
name value date maturity balance by face amortizati balance
issue period
value on
Other notes:
45. Long-term Loan
(1) Category of Long-term Loan
Unit: RMB
Item Closing balance Opening balance
Guaranteed loan 291,090,000.00 343,590,000.00
Less: Long-term loans due within 1 year -139,090,000.00 -147,000,000.00
Total 152,000,000.00 196,590,000.00
Notes of short-term loans category:
Other notes including interest rate range:
83
46. Bonds Payable
(1) Bonds Payable
Unit: RMB
Item Closing balance Opening balance
(2) Increase/Decrease of Bonds Payable (Excluding the Other Financial Instruments Classified as the
Preference Shares, Perpetual Capital Securities of the Financial Liabilities)
Unit: RMB
(3) Notes to the Conditions and Time of the Shares Transfer of the Convertible Corporate Bonds
(4) Notes to the Other Financial Instruments Classified as Financial Liabilities
Basic situation of outstanding preferred stock, perpetual capital securities and other financial instrument at the period-end
Change in outstanding preferred stock, perpetual capital securities and other financial instrument at the period-end
Unit: RMB
Outstanding Opening period Increase Decrease Closing period
financial
Amount Book value Amount Book value Amount Book value Amount Book value
instrument
Notes to judgment of other financial instrument classified as financial liabilities
Other notes:
47. Long-term Payable
(1) Long-term Payable
Unit: RMB
Item Closing balance Opening balance
Other notes:
48. Long-term Payroll Payable
(1) Long-term Payroll Payable Chart
Unit: RMB
Item Closing balance Opening balance
(2) List of the Changes of Defined Benefit Plans
Obligation present value of defined benefit plans:
84
Unit: RMB
Item Reporting period Same period of last year
Plan assets:
Unit: RMB
Item Reporting period Same period of last year
Liabilities (net assets) of defined benefit plans:
Unit: RMB
Item Reporting period Same period of last year
Notes of influence of content of defined benefit plans and its relevant risks to the future cash flow, time and uncertainty of the
Company:
Notes to the results of significant actuarial assumptions and sensitivity analysis of defined benefit plans:
Other notes:
49. Special Payable
Unit: RMB
Item Opening balance Increase Decrease Closing balance Reasons
Other notes:
50. Accrued Liabilities
Unit: RMB
Item Closing balance Opening balance Reasons
Other notes, including significant assumptions, valuation explanation related to significant estimated liabilities:
51. Deferred Revenue
Unit: RMB
Item Opening balance Increase Decrease Closing balance Reason
Government
22,566,887.73 2,001,600.44 20,565,287.29
subsidies
Total 22,566,887.73 2,001,600.44 20,565,287.29 --
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
85
Land Related to the
7,509,850.67 77,156.00 7,432,694.67
compensates assets
Pyridine project Related to the
5,900,000.03 491,666.66 5,408,333.37
subsidies assets
Special fund for
Related to the
industry clean 4,731,481.48 388,888.88 4,342,592.60
assets
production
Appropriation for
CTC consuming Related to the
1,916,666.67 500,000.00 1,416,666.67
and eliminating assets
project
Government
Subsidy for Related to the
1,553,333.33 388,333.34 1,164,999.99
Highly toxic assets
pesticide
Special fund for
management of Related to the
488,888.86 122,222.22 366,666.64
source of assets
pollution
Special fund for
transferring
Related to the
environmental 466,666.69 33,333.34 433,333.35
assets
protection
deferred
Total 22,566,887.73 2,001,600.44 20,565,287.29 --
Other notes:
52. Other Non-current Liabilities
Unit: RMB
Item Closing balance Opening balance
Project Construction Funds of New
171,770,450.00 171,770,450.00
District
Total 171,770,450.00 171,770,450.00
Other notes:
The money was project loans to the Company by Jingzhou Sanonda Co., Ltd. for the Company’s
project of overall relocation, upgrading and reconstruction of the old plant.
53. Share Capital
Unit: RMB
86
Increase/decrease (+/-)
Opening Capitalized Closing
New shares
balance Bonus shares Capital Others Subtotal balance
issued
reserves
The sum of
593,923,220.00 593,923,220.00
shares
Other notes:
54. Other Equity Instruments
(1) The Basic Information of Other Financial Instruments such as Preferred Stock and Perpetual Bond
Outstanding at the End of the Period
(2) The Statement of Changes in Financial Instruments such as Preferred Stock and Perpetual Bond
Outstanding at the End of the Period
Unit: RMB
Outstanding The beginning of the
Increase Decrease The end of the period
financial period
instruments Amount Book value Amount Book value Amount Book value Amount Book value
The current changes in other equity instruments and the corresponding reasons and the basis of the relevant accounting treatment
Other notes:
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
Unit: RMB
Item Opening balance Increase Decrease Closing balance
Other notes, including changes and reason of change:
57. Other Comprehensive Income
Unit: RMB
87
Reporting period
Less: recorded
in other
Amount comprehensive Attributable
Opening before income in Less: to owners Attributable Closing
Item
balance income tax prior period Income tax of the to minority balance
in current and transferred expense Company shareholder
period to profit or after tax s after tax
loss in current
period
Other explanation, including the active part of the hedging gains/losses of cash flow transferred to initial reorganization adjustment
for the arbitraged items:
58. Special Reserves
Unit: RMB
Item Opening balance Increase Decrease Closing balance
Safety production cost 19,862,463.34 4,180,114.32 3,122,639.59 20,919,938.07
Total 19,862,463.34 4,180,114.32 3,122,639.59 20,919,938.07
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
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
937,509,613.33 1,026,847,680.37
adjustments
Opening balance of retained profits after 937,509,613.33 1,026,847,680.37
88
adjustments
Add: Net profit attributable to owners of the
169,191,443.71 16,807,555.50
Company
Dividend of common stock payable 14,848,080.50
Closing retained profits 1,106,701,057.04 1,028,807,155.37
List of adjustment of opening retained profits:
1) RMB000 opening retained profits was affected by retrospective adjustment conducted according to the Accounting Standards for
Business Enterprises and relevant new regulations.
2) RMB000 opening retained profits was affected by changes on accounting policies.
3) RMB000 opening retained profits was affected by correction of significant accounting errors.
4) RMB000 opening retained profits was affected by changes in combination scope arising from same control.
5) RMB000 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 1,441,525,223.01 1,078,264,538.46 988,076,337.88 843,037,392.01
Other operations 24,177,967.31 22,920,202.41 17,620,819.62 16,150,709.98
Total 1,465,703,190.32 1,101,184,740.87 1,005,697,157.50 859,188,101.99
62. Business Tax and Surcharges
Unit: RMB
Item Reporting Period Same period of last year
Urban maintenance and construction tax 2,696,165.03 2,228,193.13
Education Surcharge 1,155,499.32 955,073.55
Property tax 2,651,474.93
Land use tax 1,386,777.28
Stamp duty 442,172.70
Business tax 33,784.15
Local education surtax 577,749.68 636,224.36
Total 8,909,838.94 3,853,275.19
Other notes:
89
63. Sale Expenses
Unit: RMB
Item Reporting Period Same period of last year
Transport fees 25,332,755.59 22,966,420.71
Export fees 12,765,495.88 14,602,368.29
Employee’s remuneration 506,967.64 1,441,738.11
Handling charges 1,458,819.47 2,333,120.54
Advertising and general publicity expense 358,490.57 263,118.74
Premium 900,950.07 282,610.60
Three certificates fees 570,837.98 201,787.23
Others 4,677,414.85 3,151,777.54
Total 46,571,732.05 45,242,941.76
Other notes:
64. Administration Expenses
Unit: RMB
Item Reporting Period Same period of last year
Employee’s remuneration 22,238,067.47 22,260,863.72
Agency fees 2,235,945.58 1,219,026.73
Depreciation charge 3,268,218.46 3,772,945.90
Amortization of intangible assets 2,637,968.58 2,698,734.74
Business entertainment fees 735,689.78 786,854.26
Asset insurance fees 1,858,783.89 1,889,026.78
Water & electricity fees 450,819.96 783,891.98
Office expenses 604,499.30 935,883.71
Amortization of low-price consumables 433,537.25 964,702.64
Business travel charges 706,986.29 492,985.72
Repair charge 898,267.33 573,175.06
Rental fee 827,548.00 550,048.00
Loss on work stoppages 11,110,295.82 26,150,123.83
Others 8,019,956.77 6,065,676.22
Total 56,026,584.48 69,143,939.29
Other notes:
90
65. Financial Expenses
Unit: RMB
Item Reporting Period Same period of last year
Interest expenses 8,968,102.57 13,239,292.71
Less: interest income 1,443,872.67 2,195,939.30
Exchange gains and losses 15,004,542.22 -8,178,880.68
Others 545,281.14 1,079,524.35
Total 23,074,053.26 3,943,997.08
Other notes:
66. Asset Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
I. Bad debt loss 11,962,626.94 12,408,371.76
II. Inventory falling price loss 2,956,676.82 2,764,971.24
Total 14,919,303.76 15,173,343.00
Other notes:
67. Gains and Losses from Changes in Fair Value
Unit: RMB
Sources of changes in fair value gains Reporting period Same period of last year
Changes in fair value of carbon emission
-205,804.20
permit
Total -205,804.20
Other notes:
68. 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
Other notes:
91
69. Other Income
Unit: RMB
Sources of other income Reporting period Same period of last year
70. 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
non-current assets
Including: Gains from disposal
22,722.11
of fixed assets
Gains from disposal
10,191,481.65
of intangible assets
Government subsidies 3,726,500.44 2,756,200.44 3,726,500.44
Others 37,040.00 912,455.78 37,040.00
Total 3,763,540.44 13,882,859.98 3,763,540.44
Government subsidies recorded into current profits and losses
Unit: RMB
Whether
subsidies
Special Related to
Distribution Distribution influence the Reporting Same period
Item Nature subsidy or assets/related
entity reason current Period of last year
not income
profits and
losses or not
Due to
engaged in
special
industry that
the state
Government encouraged
Hubei
Subsidy for and Related to the
Department Subsidy Yes No 388,333.34 388,333.34
Highly toxic supported, assets
of Finance
pesticide gained
subsidy
(obtaining in
line with the
law and the
regulations of
92
national
policy)
Subsidy
gained due to
confirming
Special fund
Jingzhou with local
for
Environment government Related to the
management Subsidy Yes No 122,222.22 122,222.22
al Protection attracting assets
of source of
Agency investment
pollution
and local
supportive
policy etc.
Subsidy
gained due to
confirming
Jingzhou with local
Sewage
Environment government Related to the
disposal Subsidy Yes No 33,333.34 33,333.34
al Protection attracting assets
subsidy
Agency investment
and local
supportive
policy etc.
Subsidy
gained due to
undertaking
China the state
The subsidies National protecting
income of Agricultural one public
Related to the
pesticides Means of Award utility or Yes No 574,900.00 654,600.00
income
federal Production social
reserve Group Co., necessary
Ltd. products
supply or
price
controlling
Due to
Appropriatio engaged in
n for CTC China special
consuming National industry that Related to the
Subsidy Yes No 500,000.00 500,000.00
and Chemical the state assets
eliminating Corporation encouraged
project and
supported,
93
gained
subsidy
(obtaining in
line with the
law and the
regulations of
national
policy)
Due to
engaged in
special
industry that
the state
encouraged
Special fund China and
for industry National supported, Related to the
Subsidy Yes No 388,888.88 388,888.88
clean Chemical gained assets
production Corporation subsidy
(obtaining in
line with the
law and the
regulations of
national
policy)
Due to
engaged in
special
industry that
the state
encouraged
China and
Pyridine National supported, Related to the
Subsidy Yes No 491,666.66 491,666.66
project Chemical gained assets
Corporation subsidy
(obtaining in
line with the
law and the
regulations of
national
policy)
Financial Subsidy
Land Related to the
Bureau Subsidy gained due to Yes No 77,156.00 77,156.00
compensates assets
development confirming
94
zone of with local
Jingzhou government
attracting
investment
and local
supportive
policy etc.
Subsidy
gained due to
confirming
Financial
with local
Industrial Bureau
government Related to the
enterprise development Award Yes No 150,000.00 100,000.00
attracting income
award capital zone of
investment
Jingzhou
and local
supportive
policy etc.
Subsidy
gained due to
confirming
Financial
with local
Fixed assets Bureau
government Related to the
investment development Award Yes No 1,000,000.00
attracting income
award capital zone of
investment
Jingzhou
and local
supportive
policy etc.
Total -- -- -- -- -- 3,726,500.44 2,756,200.44 --
Other notes:
71. 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
409,813.84 3,392.65
assets
Including: Loss on disposal of
409,813.84 3,392.65 409,813.84
fixed assets
Others 667,341.00 667,341.00
Total 1,077,154.84 3,392.65 1,077,154.84
Other notes:
95
72. Income Tax Expense
(1) Lists of Income Tax Expense
Unit: RMB
Item Reporting Period Same period of last year
Current income tax expense 34,347,319.74 8,330,820.19
Deferred income tax expense 13,958,754.91 -2,031,845.17
Total 48,306,074.65 6,298,975.02
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
Item Reporting Period
Total profits 217,497,518.36
Current income tax expense accounted by tax and relevant
54,374,379.59
regulations
Influence of income tax before adjustment 61,183.45
Influence of not deductable costs, expenses and losses 420,641.33
Influence of deductible losses of unrecognized deferred income
-6,592,896.64
tax assets used in previous years
Influence of deductible temporary difference or deductible losses
42,766.92
of deferred income tax assets derecognized in Reporting Period.
Income tax expense 48,306,074.65
Other notes
73. Other Comprehensive Income
See note.
74. Information of Cash Flow Statement
(1) Other Cash Received Relevant to Operating Activities:
Unit: RMB
Item Reporting Period Same period of last year
Interest income 1,443,872.67 2,195,939.30
Allowance payment and others 1,228,116.83 1,585,050.88
Government subsidy 1,724,900.00 754,600.00
96
Total 4,396,889.50 4,535,590.18
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 32,287,435.27 22,966,420.71
Export fees 2,201,871.17 1,881,284.03
Handling charges 1,458,819.47 2,333,120.54
Business entertainment fees 1,178,558.92 1,291,244.83
Office expenses 1,078,253.74 1,436,928.17
Premium 1,925,521.82 2,171,637.38
Business travel charges 791,318.91 954,517.82
Rental fees 1,218,163.09 1,355,804.98
Sewage charge 5,748,034.00 5,764,803.00
Brokerage fee 4,603,267.20 1,050,000.00
Agency fees 3,836,618.96 0.00
Others 9,926,175.87 4,232,493.34
Total 66,254,038.42 45,438,254.80
Note to other cash paid relevant to operating activities:
(3) Other Cash Received Relevant to Investment Activities
Unit: RMB
Item Reporting Period Same period of last year
Note to other cash received relevant to investment activities:
(4) Other Cash Paid Relevant to Investment Activity
Unit: RMB
Item Reporting Period Same period of last year
Note to other cash paid relevant to investment activities:
(5) Other Cash Received Relevant to Financing Activities
Unit: RMB
Item Reporting Period Same period of last year
97
Agricultural Development Bank New
120,800,000.00
District Construction Funds
Unfreeze and turn back of cash deposit of
7,800,000.00
note
Total 7,800,000.00 120,800,000.00
Note to other cash received relevant to financing activities:
(6) Other Cash Paid Relevant to Financing Activities
Unit: RMB
Item Reporting Period Same period of last year
Freeze of cash deposit of note 6,820,000.00 9,000,000.00
Refund of cash deposit 100,000,000.00
Total 106,820,000.00 9,000,000.00
Note to other cash paid relevant to financing activities:
75. 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 169,191,443.71 16,807,555.50
Add: Provision for impairment of assets 14,919,303.76 15,173,343.00
Depreciation of fixed assets, of oil-gas
110,726,693.64 116,433,547.32
assets, of productive biological assets
Amortization of intangible assets 3,113,621.64 2,698,734.74
Losses on disposal of fixed assets, intangible
assets and other long-term assets (gains: 409,813.84 -10,210,811.11
negative)
Losses on changes in fair value (gains:
205,804.20
negative)
Financial cost (gains: negative) 8,968,102.57 13,239,292.71
Investment loss (gains: negative) -75,504.00
Decrease in deferred income tax assets
13,958,754.91 -2,031,845.17
(gains: negative)
98
Decrease in inventory (gains: negative) -20,917,453.57 100,935,181.10
Decrease in accounts receivable from
-129,891,863.95 -212,292,136.85
operating activities (gains: negative)
Increase in payables from operating
50,559,318.09 6,041,561.38
activities (decrease: negative)
Net cash flows generated from operating
221,243,538.84 46,718,918.62
activities
2. Significant investing and financing
activities without involvement of cash -- --
receipts and payments
3. Net increase in cash and cash equivalents: -- --
Closing balance of cash 593,692,771.30 438,050,215.44
Less: Opening balance of cash 539,470,064.75 406,098,208.72
Net increase in cash and cash equivalents 54,222,706.55 31,952,006.72
(2) Net Cash Paid of Obtaining the Subsidiary
Unit: RMB
Amount
Including: --
Including: --
Including: --
Other notes:
(3) Net Cash Receive from Disposal of the Subsidiary
Unit: RMB
Amount
Including: --
Including: --
Including: --
Other notes:
(4) Cash and Cash Equivalents
Unit: RMB
Item Closing balance Opening balance
I. Cash 593,692,771.30 539,470,064.75
99
II. Bank deposit on demand 593,692,771.30 539,470,064.75
III. Closing balance of cash and cash
593,692,771.30 539,470,064.75
equivalents
Other notes:
76. Note to Items in the Statement of Change in Equity
Particulars about the name of the item of “Other” adjusting last closing balance and the adjustment amount:
77. Assets with Restricted Ownership and Right to Use
Unit: RMB
Item Closing book value Restricted reason
Monetary capital 6,820,000.00 Cash deposit of bank acceptance
Total 6,820,000.00 --
Other notes:
78. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RMB
Closing foreign currency Closing convert to RMB
Item Exchange rate
balance balance
Including: USD 74,299,986.31 6.7744 503,337,827.26
HKD 0.42 0.8679 0.36
Including: USD 40,565,302.17 6.7744 274,805,583.02
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
79. Arbitrage
Disclosure of arbitrage items according to the category of arbitrage and the qualitative and quantitative information of related
arbitrage tools and hedging risk:
100
80. Other
VIII. Change of Consolidation Scope
1. Business Combination Not under the Same Control
(1) Business Combination Not under the Same Control during the Reporting Period
Unit: RMB
The income The net profit
of the of the
The
Proportion of acquiree from acquiree from
Time of the Cost of the Way of the determination
Name of the the Date of the the
acquisition of acquisition of acquisition of basis of
acquiree acquisition of acquisition acquisition acquisition
the stock the stock the stock acquisition
the stock date to the date to the
date
end of the end of the
period period
Other notes:
(2) Combination Cost and Goodwill
Unit: RMB
Cost of business combination
The explanations on the contingent consideration and its changes as well as the determination method of the fair value of the cost of
business combination:
The main reason for the formation of large goodwill:
Other notes:
(3) The Identifiable Assets and Liabilities of Acquiree at Purchase Date
Unit: RMB
The fair value of the Purchase date The book value of the purchase date
The determination method of the fair value of the recognizable assets and liabilities:
The contingent liabilities of the acquiree undertaken in business combination:
Other notes:
(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
101
□ Yes √ No
(5) The Explanations on the Situation in which the Merger Price Cannot Be determined Rationally at the
Date of Acquisition or the End of the Period of Merger and Explanations on the Fair Value of the
Acquiree’s Recognizable Assets and Liabilities
(6) Other Notes
2. Business Combination under the Same Control
(1) Business Combination under the Same Control during the Reporting Period
Unit: RMB
Income of the Net profits of
merged party the merged
Proportion of Basis of the Income of the Net profits of
Determinatio from the party from
equity enterprise merged party the merged
Name of the Date of n basis of the beginning of the beginning
acquired in merger under during the party during
merged party merger date of the period of of the period
business the same period of the period of
merger merger to the of merger to
combination control comparison comparison
date of the date of
merger merger
Other notes:
(2) Combination Cost
Unit: RMB
Combination cost
Explanations on contingent consideration and its changes:
Other notes:
(3) The Book Value of the Assets and Liabilities of the Combined Party at Combining Date
Unit: RMB
At combining date At the end of last period
The contingent liabilities of the merged party undertaken in enterprise merger:
Other notes:
3. Counter Purchase
The basic information of transactions, the constitutive basis of counter purchase, whether the retained assets and liabilities of listed
companies constitute the business or not and the relevant basis, the determination of the cost of merger, the amount and accounting of
the equity adjusted when treated as equity transaction:
102
4. The Disposal of Subsidiary
Whether there is such a situation where the control power of the subsidiary is lost for a single disposal of the investment to the
subsidiary
□ Applicable √ Not applicable
Whether there is such a situation where many transactions are made to dispose the investment to the subsidiary in phases losing the
control power of it during the report period
□ Applicable √ Not applicable
5. Other Reasons for the Changes in Combination Scope
Explanations on changes in consolidation scope caused by other reasons (such as the establishment of new subsidiary and liquidation
of subsidiary) and the relevant information:
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:
103
(2) Significant Not Wholly Owned Subsidiary
Unit: RMB
The profits and losses Declaring dividends Balance of minority
Shareholding proportion
Name arbitrate to the minority distribute to minority shareholder at closing
of minority shareholder
shareholders shareholder period
Holding proportion of minority shareholder in subsidiary different from voting proportion:
Other notes:
(3) The Main Financial Information of Significant Not Wholly Owned Subsidiary
Unit: RMB
Closing balance Opening balance
Non-curr Non-curr Non-curr Non-curr
Name Current Total Current Total Current Total Current Total
ent ent ent ent
assets assets liabilities liabilities assets assets liabilities liabilities
assets liabilities assets liabilities
Unit: RMB
Reporting period The same period of last year
Cash flow Cash flow
Total Total
Name Operation from Operation from
Net profit consolidated Net profit consolidated
revenue operating revenue operating
income income
activities activities
Other notes:
(4) Significant Restrictions of Using Enterprise Group Assets and Paying Off Enterprise Group Debt
(5) Provide Financial Support or Other Support for Structure Entities Incorporate into the Scope of
Consolidated Financial Statements
Other notes:
2. The Transaction of the Company with Its Owner’s Equity Share Changed but Still Controlling the
Subsidiary
(1) Explanations on Changes of Owner’s Equity in the Subsidiary
(2) The Effects of Transactions on Minority Equity and Owner’s Equity Attributable to the Parent
Company
Unit: RMB
Other notes
104
3. Equity in Joint Venture Arrangement or Associated Enterprise
(1) List of Significant Joint Ventures or Associated Enterprises
Proportion of shareholding (%) Accounting
treatment method
Name of the joint
of the investment
venture or Main place of Place of Nature of
to the joint
associated business registration business Directly Indirectly
venture or
enterprise
associated
enterprise
Explanations on the difference between the shareholding proportion and the proportion of voting right in the joint venture or the
associated enterprise:
The basis of holding 20% or less of voting right with significant influence and the basis of holding 20% or more of voting right
without great impacts:
(2) The Main Financial Information of Significant Joint Ventures
Unit: RMB
Closing balance/amount incurred in the Opening balance/amount incurred in last
current period period
Other notes
(3) The Main Financial Information of Significant Associated Enterprises
Unit: RMB
Closing balance/amount incurred in the Opening balance/amount incurred in last
current period period
Other notes
(4) The Summarized Financial Information of Unimportant Joint Ventures and Associated Enterprises
Unit: RMB
Closing balance/amount incurred in the Opening balance/amount incurred in last
current period period
Joint ventures: -- --
The total of the following items calculated
-- --
on the basis of shareholding proportion
Associated enterprises: -- --
105
The total of the following items calculated
-- --
on the basis of shareholding proportion
Other notes
(5) Explanations on Great Limitation of the Ability to Transfer Funds to the Company by Joint Ventures
or Associated Enterprises
(6) Excess Loss Incurred in Joint Ventures or Associated Enterprises
Unit: RMB
The unconfirmed losses of the The accumulated unconfirmed
Name of joint venture of The accumulated unconfirmed
report period (or the net profits losses at the end of the report
associated enterprise losses before the report period
shared by the current period) period
Other notes
(7) The Unrecognized Commitment Related to the Investment of Joint Ventures
(8) The Contingent Liabilities Related to the Investment of Joint Ventures or Associated Enterprises
4. Significant Joint Operation
Proportion of shareholding/shares
Name of joint Main places of
Registration Nature of business possessed (%)
operation business
Directly Indirectly
Explanations on the difference between the proportion of shareholding or shares possessed and the proportion of voting right in joint
operation:
The basis of the classification as joint operation when the joint operation performs as a separated subject:
Other notes
5. Equity of Structure Entity Not Including in the Scope of Consolidated Financial Statements
Explanations on the structured entity not included in the scope of the consolidated financial statements:
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
106
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 2017, in addition to the following assets or liabilities in statement was USD, the Company’s assets or liabilities
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 503,337,827.26 256,540,761.65
Account receivable 274,805,583.02 139,549,742.14
The Company keeps an eye on the influence of changes in exchange rate on the Company’s foreign exchange risk. At present, the
Company does not take any methods to avoid foreign exchange risk.
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 of exchange rate Reporting Period Same period of last year
Influence on the Influence on Influence on the Influence on
profits equity of profits equity of
shareholders shareholders
Cash, cash equivalents Up 1% against RMB -1,148,652. -1,148,652. -516,161.28 -516,161.28
and account receivable 88 88
Cash, cash equivalents Down 1% against RMB 1,148,652.8 1,148,652.8 516,161.28 516,161.28
and account receivable 8 8
(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
107
losses and equity of shareholders was followed:
Item Change Reporting Period Same period of last year
Influence on the Influence on equity Influence on the Influence on equity
profits of shareholders profits of shareholders
Long-term Increase 1% -3,410,900.00 -3,410,900.00 -5,440,900.00 -5,440,900.00
borrowings
Long-term Decrease 1% 3,410,900.00 3,410,900.00 5,440,900.00 5,440,900.00
borrowings
2. Credit Risk
On 30 June 2017, 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
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 collections failed, the Company had fully withdrawn 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 2017, the unused bank loan of the Company was
RMB883.90 million.
The analysis of financial liabilities according to the maturity of un-discounted remaining contract obligation was as following:
Item Within 1 year (including 1-3years (including 3 3-5years (including 5 Over 5 years
1 year) years) years)
Long-term borrowings 139,090,000.00 152,000,000.00
Short-term borrowings 50,000,000.00
(II) Financial Assets Transfer
No such cases during Reporting Period.
108
XI. The Disclosure of the Fair Value
1. Closing Fair Value of Assets and Liabilities Calculated by Fair Value
Unit: RMB
Fair value at the end of the reporting period
Item First level Second level Third level
Total
Fair value measurement Fair value measurement Fair value measurement
I. Sustaining fair value
-- -- -- --
measurement
Other current
assets-carbon emission 490,319.48 490,319.48
permit
Total assets continuously
490,319.48 490,319.48
measured at fair value
II. Non-Sustaining fair
-- -- -- --
value measurement
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level
1
The fair value of carbon emission permit was determined by the transaction price of carbon emission permit of Hubei province on
China Carbon Emission Trading Network on the latest trading day before the balance sheet date.
109
3. Consistent and Inconsistent Fair value Measurement Items at Level 2, Valuation Techniques Adopted,
the Qualitative and Quantitative Information of Important Parameters
4. Consistent and Inconsistent Fair Value Measurement Items at Level 3, Valuation Techniques Adopted,
the Qualitative and Quantitative Information of Important Parameters
5. Consistent Fair Value Measurement Items at Level 3, the Adjustment Information of the Opening and
Closing Book Value, and the Sensitivity Analysis of Unobservable Parameters
6. Consistent Fair Value Measurement Items, Conversion between All Levels during the Reporting Period,
the Reasons for Conversion and Policies at the Time of Determination of Conversion
7. Change and Change Reason of Valuation Techniques in the Reporting Period
8. Particulars about the Fair Value of the Financial Assets and Financial Liabilities Not Measured at Fair
Value
9. Other
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
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:
110
2. Subsidiaries of the Company
For more details, please refer to Note IX.
3. Information on the Joint Ventures and Associated Enterprises of the Company
Information of the major joint ventures or associated enterprises of the Company refers to note
List of other joint ventures and associated enterprises that made related-party transactions with the Company generating balance
during or before the report period:
Name of the joint venture or associated enterprise Relationship with the Company
Other notes
4. Information on Other Related Parties of the Company
Name Relationship
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
Jiangsu Anpon Electrochemical Co., Ltd. Under the same control of China National Chemical Corporation
Shandong 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
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
ADAMA (Beijing) Agricultural Technology Co., Ltd. Under the same control of China National Chemical Corporation
China National Chemical Information Center 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
The approval trade Whether exceed trade Same period of last
Related-party Content Reporting Period
credit credit or not year
Bluestar (Beijing)
Engineering
Chemical 2,743,153.85 No 2,777.78
materials
Machinery Co., Ltd.
Beijing Grand Purchase of raw 4,858,119.66 No 6,094,017.09
111
Agrochemical Co., materials
Ltd.
Haohua
Engineering
Engineering Co., 15,384.61 No
materials
Ltd.
China National
OA Value-added
Chemical 145,283.02 Yes
services
Information Center
ADAMA (Beijing)
Agricultural
Labor service 4,562,446.76 No
Technology Co.,
Ltd.
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 196,164,258.06 87,387,039.04
LTD.
Jiangsu Anpon Electrochemical
Sales of pesticides 223,008.85
Co., Ltd.
Information on related-party transactions of sales of goods and provision and reception of labor service
(2) Relating Commissioned Management/Contract and Entrusted Management/Outsourcing
List of commissioned management/contract of the Company:
Unit: RMB
Pricing basis of Revenue from
Name of the Start date of End date of
Name of the Type of the commissioned commissioned
entrusting commissioned commissioned
commissioned commissioned/co management management/cont
party/contract-out management/cont management/cont
party/contractor ntracted assets revenue/contract ract confirmed in
party ract ract
revenue the report period
Explanations on relating commissioned management/contract
List of entrusted management/outsourcing:
Unit: RMB
Trustee
Name of the Start date of End date of Pricing basis of
Name of the Type of the fee/expense on
entrusting entrusted entrusted trustee
commissioned entrusted/outsour outsourcing
party/contract-out management/outs management/outs fee/expense on
party/contractor ced assets confirmed in the
party ourcing ourcing outsourcing
report period
Explanations on relating management/outsourcing
112
(3) Information of Related Lease
The Company serves as the lessor:
Unit: RMB
Rental income confirmed in the Rental income confirmed in the
Name of leasee Type of leased assets
Report period same period of last year
The Company serves as the leasee:
Unit: RMB
Rental expense confirmed in the Rental expense confirmed in the
Name of lessor Type of leased assets
report period same period of last year
Explanations on related-party lease
(4) Related-party Guarantee
The Company serves as the guarantee
Unit: RMB
Secured party Amount Start date Maturity date Fulfill or not
Hubei Sanonda Foreign
70,000,000.00 11/29/2016 04/18/2019 Yes
Trading Co., Ltd.
The Company serves as the secured party
Unit: RMB
Guarantee Amount Start date Maturity date Fulfill or not
Jingzhou Sanonda Co.,
170,000,000.00 12/26/2014 12/25/2019 No
Ltd.
Jingzhou Sanonda Co.,
140,000,000.00 02/01/2016 01/31/2019 Yes
Ltd.
Jingzhou Sanonda Co.,
303,000,000.00 02/20/2017 02/19/2020 No
Ltd.
China National
Agrochemical 300,000,000.00 11/19/2014 11/17/2019 Yes
Corporation
China National
Agrochemical 50,000,000.00 03/19/2015 03/19/2019 Yes
Corporation
China National
Agrochemical 50,000,000.00 01/10/2017 01/10/2020 No
Corporation
China National Chemical
200,000,000.00 09/25/2013 09/25/2020 No
Corporation
113
China National Chemical
160,000,000.00 06/10/2014 06/09/2021 No
Corporation
China National Chemical
150,000,000.00 10/14/2013 10/13/2020 No
Corporation
Explanations on related-party guarantee
(5) Borrowing and Lending of Related Parties
Unit: RMB
Related party Amount Start date Maturity date notes
Borrowing
Jingzhou Sanonda Co.,
171,770,450.00 02/22/2016 12/19/2021
Ltd.
Lending
(6) Related Party Asset Transfer and Debt Restructuring
Unit: RMB
Contents of related-party
Related party Reporting period Same period of last year
transactions
(7) Rewards for the Key Management Personnel
Unit: RMB
Item Reporting period Same period of last year
Rewards for the key management
850,000.00 850,000.00
personnel
(8) Other Related-party Transactions
The parent company of the Company Jingzhou Sanonda Co., Ltd. paid & gained wages and social security through the Company
with a total of RMB141,928.48.
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
114
ADAMA
Accounts receivable Agricultural 74,638,115.18 3,731,905.76 30,274,782.99 1,513,739.15
Solutions Ltd
Haohua Engineering
Prepayment 5,000,000.00
Co., Ltd.
(2) Payables
Unit: RMB
Name o f item Related-party Closing book balance Opening book balance
Bluestar (Beijing) Chemical
Accounts payable 698,890.00 483,700.00
Machinery Co., Ltd.
Accounts payable Haohua Engineering Co., Ltd. 0.00 298,500.00
Accounts payable Beijing Grand AgroChem.,Ltd. 1,584,000.00
Notes payable Beijing Grand AgroChem.,Ltd. 0.00 1,000,000.00
Jiamusi Heilong Agrochemicals
Accounts received in advance 10,020.00 10,020.00
Co., Ltd.
Shandong Dacheng
Accounts received in advance 1,500.00 1,500.00
Agrochemical Co., Ltd.
7. Related Party Commitment
8. Other
XIII. Share-based Payment
1. General Share-based Payment
□ Applicable √ Not applicable
2. Shared-based Payment Settled by Equity
□ Applicable √ Not applicable
3. Shared-based Payment Settled by Cash
□ Applicable √ Not applicable
115
4. Modification and Termination on Share-based Payment
5. Other
XIV. Commitments and Contingencies
1. Significant Commitments
Significant commitments at balance sheet date
As of June 30, 2017, there were no significant commitments to be disclosed.
2. Contingencies
(1) Significant Contingencies at Balance Sheet Date
As of June 30, 2017, there were no contingencies to be disclosed.
(2) If the Company Has No Significant Contingency to Disclose, Relevant Explanations Should Also Be
Given
The company has no significant contingency to disclose.
3. Other
XV. Events after Balance Sheet Date
1. Significant Non-adjusting Events
Unit: RMB
Effects on financial condition Reason for inability to estimate
Item Content
and operating result the influence number
2. Profit Distribution
Unit: RMB
3. Sales Return
4. Notes of Other Events after Balance Sheet Date
As of June 30, 2017, the Company has no other evens after balance sheet date to disclose.
116
XVI. Other Significant Events
1. The Accounting Errors Correction in Previous Period
(1) Retroactive Restatement
Unit: RMB
Name of each affected item of
Contents of the correction of
Procedures of processing statement during the period of Cumulative effects
accounting errors
comparison
(2) Prospective Application
Contents of the correction of accounting Reason for adopting method of prospective
Procedures of approval
errors application
2. Debt Restructuring
3. Assets Replacement
(1) Exchange of Non-monetary Assets
(2) Replacement of Other Assets
4. Annuity Plan
5. Discontinued Operation
Unit: RMB
Profits generated
from
discontinued
Income tax
Item Income Expense Total profits Net profits operation
expense
attributable to
owners’ of the
Company
Other notes
117
6. Segment Information
(1) Recognition Basis and Accounting Policies of Reportable Segment
(2) The Financial Information of Reportable Segment
Unit: RMB
Item Offset between segments Total
(3) If There Is No Reportable Segment, or the Total Amount of Assets and Liabilities of Each Part of
Reportable Segment Cannot Be Disclosed, the Relevant Reasons Should Be Given
(4) Other Notes
7. Other Important Transactions and Events that Have an Impact on Investors’ Decision-making
8. Other
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
1,065,55 15,007,9 1,050,543 621,371 9,876,108 611,495,34
debt provision of by 99.95% 1.41% 99.91% 1.59%
1,264.50 61.11 ,303.39 ,453.23 .43 4.80
credit risks
characteristics:
Accounts receivable
with insignificant
single amount for 584,457. 584,457. 584,457 584,457.5
0.05% 100.00% 0.09% 100.00%
which bad debt 52 52 .52 2
provision separately
accrued
118
1,066,13 15,592,4 1,050,543 621,955 10,460,56 611,495,34
Total 100.00% 1.46% 100.00% 1.68%
5,722.02 18.63 ,303.39 ,910.75 5.95 4.80
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 129,397,159.50 6,469,857.98 5.00%
Subtotal of within 1 year 129,397,159.50 6,469,857.98 5.00%
1 to 2 years 3,860,856.69 386,085.67 10.00%
2 to 3 years 1,507,706.92 452,312.07 30.00%
3 to 4 years 517,492.20 258,746.10 50.00%
Over 5 years 7,440,959.29 7,440,959.29 100.00%
Total 142,724,174.60 15,007,961.11
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
Account receivable Bad debt provision Withdrawal reason
Risk-free groups 922,827,089.90 Internal account of the
Company
Total 922,827,089.90
Accounts receivable with insignificant single amount and individually withdrawn bad debt provision at the end of the year
Closing balance
Account receivable Account receivable Bad debt provision Withdrawal Withdrawal reason
proportion
Jiangxi Nanchang Red Valley 584,457.52 584,457.52 100.00% Multiple collection failed, not
Plant Protection Center expected to recover
Total 584,457.52 584,457.52 — —
(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 RMB5,131,852.68; the amount of the reversed
or collected part during the Reporting Period was of RMB000.
Significant amount of reversed or recovered bad debt provision:
119
Unit: RMB
Name of unit Collected or reversed amount Way
(3) Particulars about Other Accounts Receivable Actually Verified during the Reporting Period
Unit: RMB
Item Amount of verification
The verification of significant other accounts receivable:
Unit: RMB
Whether the
Procedures of accounts are
Nature of other Amount of Reason for
Name of unit verification generated from
accounts receivable verification verification
performed related-party
transactions or not
Notes of the verification of other accounts receivable:
(4) Accounts Receivable of the Top 5 of the Closing Balance Collected According to the Arrears Party
The total amount of top five of account receivable of closing balance collected by arrears party was RMB980,302,232.20, 91.95% of
total closing balance of account receivable, the relevant closing balance of bad debt provision withdrawn was RMB2,873,757.12.
(5) Accounts Receivable Derecognized for the Transfer of Financial Assets
(6) Amount of Assets and Liabilities Generated from the Transfer of Accounts Receivable and Continued
Involvement
Other notes:
2. Other Accounts Receivable
(1) Other 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
Other accounts
5,870,05 5,255,61 614,437.1 8,375,4 5,292,748 3,082,682.9
receivable withdrawn 100.00% 89.53% 100.00% 63.19%
0.12 3.02 0 31.28 .31 7
bad debt provision
120
according to credit
risks characteristics
5,870,05 5,255,61 614,437.1 8,375,4 5,292,748 3,082,682.9
Total 100.00% 89.53% 100.00% 63.19%
0.12 3.02 0 31.28 .31 7
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 496,362.96 24,818.15 5.00%
Subtotal of within 1 year 496,362.96 24,818.15 5.00%
1 to 2 years 10,000.00 1,000.00 10.00%
4 to 5 years 267,784.57 133,892.28 50.00%
Over 5 years 5,095,902.59 5,095,902.59 100.00%
Total 5,870,050.12 5,255,613.02
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) The Bad-debt Provision Withdrew, Reversed or Collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB000; the amount of the reversed or
collected part during the Reporting Period was of RMB37,135.29.
Of which the significant amount of the reversed or collected part during the Reporting Period:
Unit: RMB
Name of unit Collected or reversed amount Way
(3) Other Accounts Receivable Actually Verified during the Reporting Period
Unit: RMB
Item Amount of verification
The verification of significant other accounts receivable:
Unit: RMB
121
Whether the
Procedures of accounts are
Nature of other Amount of Reason for
Name of unit verification generated from
accounts receivable verification verification
performed related-party
transactions or not
Notes of the verification of other accounts receivable:
(4) Other Accounts Receivable Classified by Account Nature
Unit: RMB
Nature of accounts Closing book balance Opening book balance
Liquidation amount of investment fund 3,398,275.80 3,398,275.80
Export rebates 0.00 1,858,990.42
Petty cash 804,970.29 1,401,989.29
Liquidation amount of loans 548,500.00 548,500.00
Cash pledge 500,000.00 500,000.00
Others 618,304.03 667,675.77
Total 5,870,050.12 8,375,431.28
(5) The Top Five Other Account Receivable Classified by Debtor at Period-end
Unit: RMB
Proportion to the
Account-age at the total of closing Closing balance of
Name of unit Nature of accounts Closing balance
end of the period balance of other bad-debt provision
accounts receivable
Shantou Biyue Plastic
Investment fund 3,125,000.00 Over 5 years 53.24% 3,125,000.00
Co., Ltd.
Hubei Jingzhou
Shashi Agricultural Liquidation amount
548,500.00 Over 5 years 9.34% 548,500.00
Production Materials of loans
Co., Ltd.
Jingzhou Production
Safety Supervision Cash deposit 300,000.00 Over 5 years 5.11% 300,000.00
Bureau
Jingzhou Real
House renewal fund 237,784.57 4 to 5 years 4.05% 118,892.28
Estate Administration
Xiong Wen Petty cash 194,000.00 Within 1 year 3.30% 9,700.00
Total -- 4,405,284.57 -- 75.04% 4,102,092.28
122
(6) Account Receivable Involving Government Subsidies
Unit: RMB
Name of the government Account-age at the end Estimated time, amount
Name of unit Closing balance
subsidy item of the period and basis of charge
(7) Other Account Receivable Derecognized Due To the Transfer of Financial Assets
(8) Amount of Assets and Liabilities Generated from the Transfer of Other Accounts Receivable and
Continued Involvement
Other notes:
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
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.
123
Total 80,026,635.41 80,026,635.41 24,500,000.00
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
Increase/decrease
Profit and Closing
loss on Adjustme Cash, balance
Additiona investmen nt of dividends Impairme for
The Opening Reduced Changes Closing
l ts other and nt impairme
investor balance investmen in other Others balance
investmen confirmed comprehe profits provision nt
ts equity
ts according nsive declared s provision
to equity income to issue s
law
I. Joint ventures
II. Associated enterprises
(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 1,325,666,015.70 1,005,632,250.70 917,457,017.85 778,462,461.80
Other operations 116,398,901.59 115,141,136.69 79,431,984.15 77,961,874.51
Total 1,442,064,917.29 1,120,773,387.39 996,889,002.00 856,424,336.31
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
124
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
-409,813.84
assets
Government subsidies recorded into the
current gains and losses (excluding the
government subsidies that are closely
3,726,500.44
relative to business and enjoyed in normed
way or quantitatively in accordance with the
national standards)
Other non-operating income and expenses
-630,301.00
other than the above
Less: amount affected by income tax 548,679.74
Total 2,137,705.86 --
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 Net 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
8.09% 0.2849 0.2849
shareholders of the Company
Net profit attributable to common
shareholders of the Company after
7.99% 0.2813 0.2813
deduction of non-recurring profit
and loss
125
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
(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
Hubei Sanonda Co., Ltd.
Legal Representative: An Liru
本文网址：http://www.yqlinks.cn/xihuaxian/421014.html ，喜欢请注明来源周口新闻网。
郑重声明：本文版权归原作者所有，转载文章仅为传播更多信息之目的，如作者信息标记有误，请第一时间联系我们修改或删除，多谢。
