2014 Annual Report of Hubei Sanonda Co., Ltd. Hubei Sanonda Co., Ltd.
2014 Annual Report
March 2015
2014 Annual Report of Hubei Sanonda Co., Ltd. Section I. Important Reminders, Catalogue& Explanation
The Board of Directors, the Supervisory Committee, as well as all directors, supervisors and senior management staff of Hubei Sanonda Co., Ltd. (hereinafter referred to as “the Company”) warrant that this report is factual, accurate and complete without any false record, misleading statement or material omission. And they shall be jointly and severally liable for that.
All directors attended the board session for reviewing this report.
TheCompany’s profit distribution preplan upon review and approval of this board session: Based on the total shares of the Company as at 31 Dec. 2014, a cash dividend of RMB 1.00 (tax included) will be distributed for every 10 shares held by shareholders. No bonus shares will be granted and no capital reserve will be turned into share capital.
Mr. Li Zuorong, person in charge of the Company, Mr. He Xuesong, person in charge of the accounting work and the accounting organization (chief of accounting), hereby confirm that the Financial Report enclosed in this report is factual, accurate and complete.
Please be especially noted that any statement in this report in regard to any future plan shall not be considered as theCompany’s virtual promises to investors.
This report is prepared in both Chinese and English. Should there be any discrepancy between the two versions, the Chinese version shall prevail.
2014 Annual Report of Hubei Sanonda Co., Ltd. Catalogue
2014 Annual Report ........................................................................................................................... 1 Section I. Important Reminders, Catalogue& Explanation .......................................................... 2 Section II. Company Profile .............................................................................................................. 6 Section III. Accouonting& Business Highlights ............................................................................. 8 Section IV. Report of the Board of Directors ................................................................................. 10 Section V. Significant Events ........................................................................................................... 27 Section VI. Change in Shares& Shareholders .............................................................................. 40 Section VII. Preferred Shares ......................................................................................................... 49 Section VIII. Directors, Supervisors, Senior Management Staff& Employees ......................... 50 Section IX. Corporate Governance ................................................................................................ 57 Section X. Internal Control ............................................................................................................. 63 Section XI. Financial Report ........................................................................................................... 64 Section XII. Documents Available for Reference ........................................................................ 195
2014 Annual Report of Hubei Sanonda Co., Ltd. Explanation
||||
|-|-|-|
||Refers||
|Term||Contents|
||to||
|Company, the Company|Refers|Hubei Sanonda Co., Ltd.|
||to||
||Refers||
|CSRC Hubei||The Hubei bureau of China Securities Regulatory Commission|
||to||
||Refers||
|CSRC||China Securities Regulatory Commission|
||to||
||Refers||
|SSE||Shenzhen Stock Exchange|
||to||
||Refers||
|Reporting period, this period, current year||Year 2014|
||to||
||Refers|China National Agrochemical Corporation (holding 100% equity of|
|CNAC|||
||to|Sanonda Group, the Company’s controlling shareholder)|
||Refers|ADAMA Celsius B.V., a company incorporated in the Netherlands|
|Celsius|to|according to its law, once called Celsius Property B.V., holding a stake of|
|||10.6% in the Company|
||Refers|ADAMA Agricultural Solutions LTD., a subsidiary indirectly controlled|
||to|by CNAC, once called Makhteshim-Agan Industries Ltd., a company|
|ADAMA|||
|||incorporated in Israel according to its law, indirectly holding the 100%|
|||equity of Celsius|
||Refers|Jingzhou Sanonda Holdings Co., Ltd., once called Sanonda Group Co.,|
|Sanonda Holdings|||
||to|Ltd., the controlling shareholder of the Company|

2014 Annual Report of Hubei Sanonda Co., Ltd. Reminder of Major Risks
Please note that the future development strategies, the work plan for 2015 and possible risks in the future are described in “Section IV. Report of the Board ofDirectors”—“Outlook of theCompany’s future development”. The media designated for information disclosure in 2015 were China Securities Journal, Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn. And all information about the Company shall be subject to the information disclosed by the Company on the aforesaid designated media. Investors are kindly reminded to pay attention to possible investment risks.
2014 Annual Report of Hubei Sanonda Co., Ltd. Section II. Company Profile
I. Basic information of the Company
|||||
|-|-|-|-|
|Stock abbreviation|SLDA, SLDB|Stock code|000553, 200553|
|Stock exchange listed with|Shenzhen Stock Exchange|||
|Chinese name of the Company|湖北沙隆达股份有限公司|||
|Abbr. of the Chinese name of||||
||沙隆达|||
|the Company||||
|English name of the Company||||
||HUBEI SANONDA CO., LTD.|||
|(if any)||||
|Abbr. of the English name of||||
||SANONDA|||
|the Company (if any)||||
|Legal representative of the|Li Zuorong|||
|Company||||
|Registered address|No. 93, Beijing East Road, Jingzhou, Hubei|||
|Postal code for the registered||||
||434000|||
|address||||
|Office address|No. 93, Beijing East Road, Jingzhou, Hubei|||
|Postal code for the office||||
||434000|||
|address||||
|Internet website of the||||
||http://www.sanonda.cn|||
|Company||||
|Email address|sld@agr.chemchina.com|||

II. Contact us
||||
|-|-|-|
||Company Secretary|Securities Affairs Representative|
|Name|Li Zhongxi|Liang Jiqin|
||No. 93, Beijing East Road, Jingzhou,|No. 93, Beijing East Road, Jingzhou,|
|Contact address|||
||Hubei|Hubei|
|Tel.|0716-8208632|0716-8208232|
|Fax|0716-8321099|0716-8321099|
|E-mail|lizhongxi@agr.chemchina.com|liangjiqin@agr.chemchina.com|

2014 Annual Report of Hubei Sanonda Co., Ltd. III. About information disclosure and where this report is placed
|||
|-|-|
|Newspapers designated by the Company for|China Securities Journal, Securities Times, and Ta Kung Pao|
|information disclosure||
|Internet website designated by CSRC for disclosing|http://www.cninfo.com.cn|
|this report||
|Where this report is placed|Office of the Company|

IV. Change of the registered information
|||||||
|-|-|-|-|-|-|
|||||Registration code of||
||Registration date|Registration place|Business license No.||Organizational code|
|||||taxation||
|||Hubei||||
|||Administration for||||
|Initial registration|30 Nov. 1993||420000400004491|421001706962287|70696228-7|
|||Industry &||||
|||Commerce||||
|At the end of the||||||
||25 Sept. 2014|Unchanged|Unchanged|Unchanged|Unchanged|
|reporting period||||||
|Changes of the main business since listing||||||
|||Unchanged||||
|(if any)||||||
|Changes of the controlling shareholder (if||||||
|||Unchanged||||
|any)||||||

V. Other information
The CPAs firm hired by the Company:
|||
|-|-|
|Name|Ruihua Certified Public Accountants (LLP)|
||5-11F, West Tower, China Overseas Property Plaza, Building No. 7, Compound No. 8, Xibinhe|
|Office address||
||Road, Yongding Men, Dongcheng District, Beijing, P.R.C.|
|Signing accountants|Liu Hongping, Kuang Xiaochang|

Sponsor engaged by the Company to conduct sustained supervision during the reporting period
□ Applicable√ Inapplicable
Financial consultant engaged by the Company to conduct sustained supervision during the reporting period
□ Applicable√ Inapplicable
2014 Annual Report of Hubei Sanonda Co., Ltd. Section III. Accounting& Business Highlights
I. Major accounting data and financial indicators
Does the Company adjust retrospectively or restate accounting data of previous years due to change of the accounting policy or correction of any accounting error?
□ Yes√ No
||||||
|-|-|-|-|-|
||||Increase or decrease of||
||2014|2013|this year over last year|2012|
||||(%)||
|Operating revenue (RMB Yuan)|3,131,186,300.05|3,078,467,310.53|1.71%|2,345,146,528.97|
|Net profit attributable to|491,771,929.22|320,811,958.67|||
|shareholders of the Company|||53.29%|103,768,969.35|
|(RMB Yuan)|||||
|Net profit attributable to|||||
|shareholders of the Company after|490,238,498.19|326,183,175.01|50.30%|106,185,400.70|
|extraordinary gains and losses|||||
|(RMB Yuan)|||||
|Net cash flows from operating|699,173,855.92|799,701,589.04|||
||||-12.57%|233,590,424.82|
|activities (RMB Yuan)|||||
|Basic EPS (RMB Yuan/share)|0.8280|0.5402|53.28%|0.1747|
|Diluted EPS (RMB Yuan/share)|0.8280|0.5402|53.28%|0.1747|
|Weighted average ROE (%)|27.68%|22.88%|4.80%|8.62%|
||||Increase or decrease of||
||As at 31 Dec. 2014|As at 31 Dec. 2013|this year-end than last|As at 31 Dec. 2012|
||||year-end (%)||
|Total assets (RMB Yuan)|2,934,299,657.47|2,708,271,174.34|8.35%|2,405,494,385.09|
|Net assets attributable to|2,007,631,150.60|1,546,189,571.66|||
|shareholders of the Company|||29.84%|1,255,536,761.52|
|(RMB Yuan)|||||

II. Differences between accounting data under domestic and overseas accounting standards 1. Differences of net profit and net assets disclosed in financial reports prepared under international and Chinese accounting standards
□ Applicable√ Inapplicable
No difference.
2014 Annual Report of Hubei Sanonda Co., Ltd. 2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards
□ Applicable√ Inapplicable
No difference.
III. Items and amounts of extraordinary gains and losses
√ Applicable□ Inapplicable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|2014|2013|2012|Note|
|Gain/loss on the disposal of non-current|54,813.19||||
|assets (including the offset part of the asset||-10,822,583.41|-3,329,557.24||
|impairment provisions)|||||
|Government grants recognized in the current|4,574,874.07||||
|period, except for those acquired in the|||||
|ordinary course of business or granted at||3,270,500.35|3,650,934.78||
|certain quotas or amounts according to the|||||
|government’s unified standards|||||
|Gain/loss on debt restructuring|-6,000.00|-152,001.61|-694,017.10||
|Non-operating income and expense other|-2,876,432.21||||
|||497,140.96|-2,834,030.14||
|than the above|||||
|Less: Income tax effects|199,524.02|-1,801,735.93|-801,667.43||
|Minority interests effects (after tax)|14,300.00|-33,991.44|11,429.08||
|Total|1,533,431.03|-5,371,216.34|-2,416,431.35|--|

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 thePublic—Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item□ Applicable√ Inapplicable
No such cases.
2014 Annual Report of Hubei Sanonda Co., Ltd. Section IV. Report of the Board of Directors
I. Overview
In 2014, the pesticide chemical industry was still perplexed by an overall scant demand and overcapacity. Transnational pesticide tycoons were trying to take a larger market share in China, which resulted in a fiercer competition. In particular, the prices of pesticides with herbicides as the representative were in the fall from the fourth quarter onwards, causing great difficulties to our production and operation. As countermeasures, we carefully analyzed the market, seized opportunities in an accurate manner, upheld sales as a driving force for production, rationally arranged production, pushed forward the systematic improvement, enhanced management in all aspects, carried out technical innovation, accelerated project progress, made overall plans and coordinated and worked in a down-to-earth manner. As a result, we over-fulfilled the production and operation tasks for the year, with the main economic indicators reaching a record high.
For the reporting period, the Company achieved operating revenue of RMB 3.131 billion, up by1.71% over last year, of which export income stood at USD 310 million, up by14.68% over last year; total profit of RMB 669 million, representing a YoY growth of53.94%; and pesticide output of 66,800 tons(100% purity), up by7.66% over last year.
II. Main business analysis
1. Overview
|||||
|-|-|-|-|
|Item|2014 (RMBTen thousand)|2013 (RMBTen thousand)|+/-%|
|Operating revenues|313,119|307,847|1.71%|
|Operating costs|219,227|234,634|-6.57%|
|Period expense|25,028|27,379|-8.59%|
|R&D input|795|964|-17.53%|
|Net cash flows from operating activities|69,917|79,970|-12.57%|
|Net cash flows from investing activities|-39,310|-34,349|-14.44%|
|Net cash flows from financing activities|-29,877|-22,286|-34.06%|

(1) Operating revenues increased by1.71% over last year mainly because both the sales volumes and prices of leading products increased.
(2) Operating costs decreased by6.57% over last year mainly because costs of raw materials decreased.
(3) Period expense decreased by8.59% over last year mainly because financial expenses decreased.
(4)R&D input decreased by17.53% over last year mainly because the testing expenses inR&D decreased.
(5) Net cash flows from operating activities decreased by12.57% over last year mainly because the taxes and fares paid increased. (6) Net cash flows from investing activities decreased by14.44% over last year mainly because the input to fixed assets increased. (7) Net cash flows from financing activities decreased by34.06% over last year mainly because the decrease in bank loans surpassed that in bank loan repayments.
Overview of the reporting period progress of development strategies and business plans disclosed in previous periods:
As its production and operating goal for 2014, the Company had planned to reach RMB 3 billion in sales income. And the actual
figure was RMB 3.131 billion which overfullfilled the goals of the annual plan. During the reporting period, the Company seriously
2014 Annual Report of Hubei Sanonda Co., Ltd. study the market requirements, rapidly decided, quickly seized the opportunities and enlarged the products selling by continually embrace the overall development strategy with the export of the whole year of about 80,000 tons and the earn foreign exchange through exports of USD 0.31 billion which the YoY increased was15%. Deepened the development of the system construction of SHE, intensified the risks management, developed the troubleshooting and govern the hidden-risks, strengthened the operation safety management, perfected the contractor performance, developed safety training and emergency rescue drill, which made the safety situation gradually improved. Increased the environmental protection input and promoted the comprehensive improvement of the environment; developed the source of government to conserve energy and reduce emission; intensified the operation management of environmental protection device and continuously improved the environment. Insisted to develop the systematic construction and management such as TPM, TQM and 5S etc. and further enhanced the production management level. Further strengthened the human resource management and further optimized the human construction. Further refined the purchase strategy and perfected the purchase process, which guaranteed the material supply quality. Further strengthen the financial internal control that the YoY financial expenses declined with a large amount with the internal control system continuously improved as well as the YoY asset-liability ratio of the Company at the year-end of 2014 declined 11.4 percentage points. Constantly executed tens of the technical transformation and technical measures items such as developed the technical transformation, invested and constructed the spermine process optimization projects as well as acephate expansion project. Promoted the scientific research and product research work and developed several research project such as process optimization, agentia preparation improvement and environmental governance, vigorously developed research of new products, selected the types, strengthened the development aftereffect and continued to develop the patent filing work for further strengthen the developing power of the Company by the driven of innovation. Completed the construction of the 0.2 million tons/year ionic membrane caustic soda project which had been successfully put into operation at the end of Y2014 that further optimized the product structure, Intensified the cooperation with the ADAMA and with which signed the Cooperation Framework Agreement.
State the reasons why theCompany’s actual business performance is20% lower or higher than the earning forecast for the reporting period which has been publicly disclosed earlier:
□ Applicable√ Inapplicable
Changes of the main operation mode
□ Applicable√ Inapplicable
2. Revenue
Notes
Explanation:
For 2014, the Company achieved a main business income of RMB 3.104 billion, up by2.34% over last year, with no major change occurring to the income structure when compared with last year. And the gross profit rate of sales stood at29.85%, up by 6.06 percentage points over last year.
Are theCompany’s goods selling revenue higher than the service revenue?
√ Yes□ No
|||||||
|-|-|-|-|-|-|
|Industry|Item|Unit|2014|2013|YoY +/-%|
|Industry of|Sales volume|Ton|136,578|146,565|-6.81%|
|manufacturing|Output|Ton|142,773|144,282|-1.05%|
|chemical raw||||||
|materials and|Stock|Ton|14,895|8,699|71.23%|
|chemical products||||||

Reasons for anyover-30% YoY movement of the data above:
2014 Annual Report of Hubei Sanonda Co., Ltd.√ Applicable□ Inapplicable
YoY inventory increased71.23%, which mainly due to the increase of the inventory such as the glyphosate.
Major orders on hand:
□ Applicable√ Inapplicable
Significant change or adjustment of theCompany’s products or services during the reporting period:
□ Applicable√ Inapplicable
Major customers:
|||
|-|-|
|Total sales to the top 5 customers (RMB Yuan)|1,071,821,283.10|
|Ratio of the total sales to the top 5 customers to the||
||34.53%|
|annual total sales||

Information about the top 5 customers:
√ Applicable□ Inapplicable
|||||
|-|-|-|-|
|Serial No.|Name of customer|Sales (RMB Yuan)|Proportion in annual total sales|
|1|Foreign customer A|465,853,888.88|15.01%|
|2|Foreign customer B|219,578,915.87|7.07%|
|3|Foreign customer C|141,472,590.41|4.56%|
|4|Foreign customer D|134,062,790.59|4.32%|
|5|Foreign customer E|110,853,097.35|3.57%|
|Total|--|1,071,821,283.10|34.53%|

 Other information about the main customers
□ Applicable√ Inapplicable
3. Cost
Classified by industry:
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|||2014||2013|||
|Industry|Item||Proportion in||Proportion in|YoY +/-|
|||Amount||Amount|||
||||operating costs||operating costs||
|Industry of|||||||
|manufacturing|||||||
||Material expenses||||||
|chemical raw|||||||
||(procurement|1,676,552,011.50|77.00%|1,833,568,586.60|79.33%|-2.33%|
|materials and|||||||
||cost)||||||
|chemical|||||||
|products|||||||
|Industry of|||||||
|manufacturing|||||||
||Labor cost|139,427,185.71|6.40%|105,561,109.18|4.57%|1.83%|
|chemical raw|||||||
|materials and|||||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|chemical|||||||
|products|||||||
|Industry of|||||||
|manufacturing|||||||
|chemical raw|||||||
||Depreciation cost|154,851,600.00|7.11%|151,025,868.76|6.53%|0.58%|
|materials and|||||||
|chemical|||||||
|products|||||||

Classified by product:
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|||2014||2013|||
|Product|Item||Proportion in||Proportion in|YoY +/-|
|||Amount||Amount|||
||||operating costs||operating costs||

Notes:
Among total costs of the current year, material expenses accounted for77%, labor cost6.4% and depreciation cost7.11%.
Major suppliers:
|||
|-|-|
|Total purchases from the top 5 suppliers (RMB Yuan)|585,077,797.50|
|Ratio of the total purchases from the top 5 suppliers to the||
||26.87%|
|annual total purchases||

Information about the top 5 suppliers:
√ Applicable□ Inapplicable
|||||
|-|-|-|-|
|||Procurement amount (RMB|Proportion in annual total procurement|
|Serial No.|Name of supplier|||
|||Yuan)|amount|
|1|Shenhua Trading Group Limited|132,619,608.15|6.09%|
||Guang’an Honesty Chemical Engineering|||
|2||125,461,282.05|5.76%|
||Co., Ltd.|||
||Jingzhou Power Supply Company of|||
|3||123,968,015.08|5.69%|
||Guodian Hubei Province Company|||
||Qian’nan Jiaxin Commerce and Trade Co.,|||
|4||109,270,165.81|5.02%|
||Ltd.|||
||PetroChina Qinghai Oil Field Sales|||
|5||93,758,726.40|4.31%|
||Company|||
|Total|--|585,077,797.50|26.87%|

 Other information about the main suppliers
□ Applicable√ Inapplicable
4. Expenses
Unit: RMB Ten thousand Yuan
2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||
|-|-|-|-|
|Item|2014|2013|YoY +/-%|
|Selling expenses|9,783|9,500|2.98%|
|Administrative expenses|12,529|11,315|10.73%|
|Financial expenses|2,716|6,565|-58.63%|
|Income tax expenses|17,738|11,439|55.07%|

(1) Financial expenses decreased by58.63% over last year mainly because the reduce of the borrowings during the period led to the reduce of the interests expenses; influenced by the exchange rate, the exchange gains and losses of the reporting period changed rather larger.
(2) Income tax expenses increased by55.07% over last year mainly because total profit increased.
5.R&D expenses
In 2014,R&D expenses stood at RMB 7,951,019.41, accounting for0.4% of net assets and0.25% of operating revenue.
6. Cash flows
Unit: RMB Yuan
|||||
|-|-|-|-|
|Item|2014|2013|YoY +/-|
|Subtotal of cash inflows from|3,011,287,150.04|2,782,482,784.49||
||||8.22%|
|operating activities||||
|Subtotal of cash outflows from|2,312,113,294.12|1,982,781,195.45||
||||16.61%|
|operating activities||||
|Net cash flows from operating|699,173,855.92|799,701,589.04||
||||-12.57%|
|activities||||
|Subtotal of cash inflows from|1,717,816.00|10,941,400.93||
||||-84.30%|
|investing activities||||
|Subtotal of cash outflows from|394,819,264.29|354,430,049.71||
||||11.40%|
|investing activities||||
|Net cash flows from investing|-393,101,448.29|-343,488,648.78||
||||-14.44%|
|activities||||
|Subtotal of cash inflows from|479,659,359.80|1,332,595,618.49||
||||-64.01%|
|financing activities||||
|Subtotal of cash outflows from|778,428,157.06|1,555,457,301.92||
||||-49.96%|
|financing activities||||
|Net cash flows from financing|-298,768,797.26|-222,861,683.43||
||||-34.06%|
|activities||||
|Net increase in cash and cash|8,781,815.25|234,884,555.44||
||||-96.26%|
|equivalents||||

Reasons for anyover-30% YoY movement of the data above:
√ Applicable□ Inapplicable
2014 Annual Report of Hubei Sanonda Co., Ltd. (1) Cash inflows from investing activities decreased by84.3% over last year mainly because there was cash took back from disposing the subsidiaries of the last year while there was not any during the reporting period.
(2) Cash inflows from financing activities decreased by64.01% over last year mainly because the decrease of the bank borrowings over last year during the reporting period.
(3) Cash outflows from financing activities decreased by49.96% over last year mainly because the decrease of the turn of the bank borrowings over last year during the reporting period.
(4) Net cash flows from financing activities decreased by34.06% over last year mainly because the amount of the decrease of the cash inflows from financing activities over last year was larger than that of the cash outflows from financing activities.
(5) Net increase in cash and cash equivalents decreased by96.26% over last year mainly because the decrease of the operating, investment and financing activities during the reporting period over last year.
Reasons for a big difference between the operating cash flows and the net profit:
√ Applicable□ Inapplicable
The net cash flows from operating activities of the Company during the reporting period was of RMB 0.699 billion, the net profits of Y2014 was of RMB 0.491 billion that with the difference of RMB 0.208 billion, which mainly because the influences of the depreciation and amortization was of RMB 0.179 billion as well as the influences of the financial expenses was of RMB 26,000,000. III. Breakdown of main business
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|||||Increase/decrease|||
||||||Increase/decrease|Increase/decrease|
||Operating|||of operating|||
|||Operating cost|Gross profit rate||of operating cost|of gross profit|
||revenue|||revenue over last|||
||||||over last year|rate over last year|
|||||year|||
|Classified by industry|||||||
|Industry of|||||||
|manufacturing|||||||
|chemical raw|||||||
||3,103,955,333.69|2,177,467,206.31|29.85%|2.34%|-5.80%|6.06%|
|materials and|||||||
|chemical|||||||
|products|||||||
|Classified by product|||||||
|New chemical|||||||
|materials and|15,453,278.80|10,125,202.05|34.48%|2.65%|13.64%|-6.33%|
|special chemicals|||||||
|Basic|||||||
|(chlor-alkali)|||||||
||91,219,571.83|63,894,828.32|29.95%|40.98%|30.15%|5.82%|
|chemical|||||||
|products|||||||
|Agriculture-appli|||||||
|ed chemicals,|3,382,553,525.34|2,488,718,218.22|26.42%|9.21%|3.35%|4.17%|
|such as fertilizer|||||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|and pesticide|||||||
|Internal offset|-385,271,042.28||||||
|||-385,271,042.28|0.00%|72.45%|72.45%|0.00%|
|amount|||||||
|Classified by region:|||||||
|Domestic|1,639,605,811.68|1,251,009,921.30|23.70%|-0.76%|-1.38%|0.48%|
|Overseas|1,849,620,564.29|1,311,728,327.29|29.08%|15.30%|2.59%|8.74%|
|Internal offset|-385,271,042.28||||||
|||-385,271,042.28|0.00%|72.45%|72.45%|0.00%|
|amount|||||||

Where theCompany’s accounting standard of the main business data above changed during the reporting period, give the main business data of the latest year adjusted according to the accounting standard at the end of the reporting period:
□ Applicable√ Inapplicable
IV. Asset and liability analysis
1. Major changes of asset items
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||As at 31 Dec. 2014||As at 31 Dec. 2013||||
||||||Proportion||
|||Proportion in||Proportion in||Explain any major change|
||Amount||Amount||change||
|||total assets||total assets|||
|Monetary funds|423,347,736.46|14.43%|414,065,921.21|15.29%|-0.86%|Naught|
|Accounts|195,635,912.75||209,166,447.16||||
|||6.67%||7.72%|-1.05%|Naught|
|receivable|||||||
|Inventories|330,541,606.05|11.26%|258,274,457.88|9.54%|1.72%|Naught|
|Investing real|5,363,928.28||4,154,412.50||||
|||0.18%||0.15%|0.03%|Naught|
|estate|||||||
||1,248,826,394.76||1,324,222,385.03|||Mainly due to the increase of the|
|Fixed assets||42.56%||48.90%|-6.34%|depreciation during the reporting|
|||||||period|
|Construction in|423,857,021.70||234,487,866.23|||Mainly due to the increase of the|
|||14.44%||8.66%|5.78%||
|progress||||||ionic membrane project expenses|

 2. Major changes of liability items
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||2014||2013||||
||||||Proportio||
|||Proportion in||Proportion in||Explain any major change|
||Amount||Amount||n change||
|||total assets||total assets|||
|Short-term|75,000,000.00|2.56%|359,220,205.55|13.26%|-10.70%|Pay back the short-term borrowings|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|borrowings|||||||
|Long-term|431,590,000.00||296,090,000.00||||
|||14.71%||10.93%|3.78%|New project loans|
|borrowings|||||||

3. Assets and liabilities measured by fair value
□ Applicable√ Inapplicable
4. List of main foreign assets
□ Applicable√ Inapplicable
V. Core competitiveness analysis
During the reporting period, the Company insisted technology progress, strengthened the university-industry cooperation, optimized manufacturing technique and promoted energy conservation and emissions reduction that led the competitiveness of the main products further strengthened. Through executing a series of technical transformation items, the Company improved the yield and quality of the spermine products with the capacity of the acetyl methylamine phosphonic device further enlarged; the raw material consumption of 2, 4-D products obviously declined; the consumption of methomyl device declined with the product quality reached the domestic leading level; the output of glyphosate improved and production cost declined. At the same time, the intrinsically safe degree of the production device of the Company had further improved and the environmental comprehensive management level had obviously enhanced. At the end of Y2014, the newly-constructeditem—0.3 million tons/year energy saving and emission reduction technical transformation item of caustic soda devices (with 0.2 million tons/year) had been put into operation which laid the foundation of the follow-up development of the Company. As for the patent work, the Company had applied for 7 patents in 2014, among which with 3 patents for invention of the 4 which had been granted. Up to the end of Y2014, the Company owned 28 patents, including 19 patens for invention.
VI. Investment analysis
1. Investments in equities of external parties
(1) List of external parties
□ Applicable√ Inapplicable
There was no external investment of the Company during the reporting period.
(2) Equity-holdings in financial enterprises
√ Applicable□ Inapplicable
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||Initial|Openingequity-holdings(share)||Closing||Closing|Gain/loss|||
|||||Opening||Closing|||||
|Enterprise|Enterprise||||||||Accountin|Equity|
|||investment|||equity-hol||book value|in the|||
|||||equity-hol||equity-hol|||||
|name|variety|cost (RMB|||dings||(RMB|reporting|g title|source|
|||||ding ratio||ding ratio|||||
|||Yuan)|||(share)||Yuan)|period|||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||(RMB|||
|||||||||Yuan)|||
||||||||||Available-f|Purchase|
|Hubei|Commerci|20,000,000|||||8,008,982.|1,716,466.|or-sale|of|
||||20,000,000|0.71%|23,481,067|0.71%|||||
|Bank|al bank|.00|||||63|00|financial|corporate|
||||||||||assets|stock|
|||20,000,000|||||8,008,982.|1,716,466.|||
|Total|||20,000,000|--|23,481,067|--|||--|--|
|||.00|||||63|00|||

(3) Investment in securities
□ Applicable√ Inapplicable
The Company did not invest in any securities in the reporting period.
(4) List of holding the equity of other listed companies
□ Applicable√ Inapplicable
There was no any equity held by the Company of other listed companies during the reporting period.
2. Wealth management entrustment, derivative investments and entrustment loans
(1) Wealth management entrustment
□ Applicable√ Inapplicable
The Company did not make any wealth management entrustment in the reporting period.
(2) Derivative investment
□ Applicable√ Inapplicable
The Company did not carry out any derivative investment in the reporting period.
(3) Entrustment loans
□ Applicable√ Inapplicable
There were no entrustment loans in the reporting period.
3. Use of raised funds
□ Applicable√ Inapplicable
There was no any use of raised fund of the Company during the reporting period.
4. Analysis to main subsidiaries and stock-participating companies
√ Applicable□ Inapplicable
2014 Annual Report of Hubei Sanonda Co., Ltd. Main subsidiaries and stock-participating companies:
Unit: RMB Yuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||Main|||||||
|Company|Company|||Registered|||Operating|Operating||
|||Industry|||Total assets|Net assets|||Net profit|
||||products/se|||||||
|name|variety|||capital|||revenues|profit||
||||rvices|||||||
|Sanonda||Chemical raw|Production|||||||
|(Jingzhou)||material and|of|||||||
|Pesticides||chemical|pesticides||2,685,684.4|-1,440,419.||-1,560,860.|-1,565,034.|
||Subsidiary|||30000000.00|||21,245.30|||
|and||product|and||4|16||36|70|
|Chemicals||manufacturin|intermediat|||||||
|Co., Ltd.||g industry|es|||||||
||||Import &|||||||
|Hubei||||||||||
||||export of|||||||
|Sanonda||||||||||
|||Trade|pesticides||267,436,58|35,963,314.|387,940,28|14,800,882.|8,245,911.7|
|Foreign|Subsidiary|||10000000.00||||||
|||industry|and||6.02|64|8.70|30|8|
|Trading||||||||||
||||intermediat|||||||
|Co., Ltd.||||||||||
||||es|||||||
|||Chemical raw||||||||
||||Production|||||||
|Jingzhou||material and||||||||
||||and sale of|||||||
|Hongxiang||chemical|||198,635,03|-15,714,440|61,497,174.|-33,491,732|-32,538,399|
||Subsidiary||chemical|40000000.00||||||
|Chemical||product|||0.29|.46|82|.65|.32|
||||raw|||||||
|Co., Ltd.||manufacturin||||||||
||||materials|||||||
|||g industry||||||||

Explain particulars about main subsidiaries and stock-participating companies:
1. Subsidiary Sanonda (Jingzhou) Pesticides and Chemicals Co., Ltd. moved its production devices to the Company and had basically cleared during the reporting period.
2. Owning to the production device has been in the run-in period, the carrying capacity of the driving was not high that led subsidiary Jingzhou Hongxiang Chemical Co., Ltd. be in the red.
Subsidiaries acquired or disposed during the reporting period:
□ Applicable√ Inapplicable
5. Significant projects of investments with non-raised funds
√ Applicable□ Inapplicable
Unit: RMB Ten Thousand Yuan
|||||||||
|-|-|-|-|-|-|-|-|
||||Cumulative|||||
|||||||Disclosure||
||Total|Input for this||Project|Project|||
|Project name|||actual input as|||date (if|Disclosure index (if any)|
||investment|period|at the|progress|earnings|||
|||||||any)||
||||period-end|||||
|0.3 million||||||28 May|Announcement on the|
||62,162|21,495|35,919|98%|Uncompleted|||
|tons/year energy||||||2013|investment and|

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|saving and|||||||construction of 0.3 million|
|emission|||||||tons/year energy saving|
|reduction|||||||and emission reduction|
|technical|||||||technical transformation|
|transformation|||||||item of caustic soda|
|item of caustic|||||||devices (with 0.2 million|
|soda devices (with|||||||tons/year) (Announcement|
|0.2 million|||||||No. 2013-24), which|
|tons/year)|||||||disclosed on|
||||||||www.cninfo.com.cn|
|Total|62,162|21,495|35,919|--|--|--|--|

VII. Predict the operating results of Jan.-Mar. 2015
Warning of possible loss or considerable YoY change of the accumulated net profit made during the period-begin to the end of the next reporting period according to prediction, as well as explanations on the reasons:
□ Applicable√ Inapplicable
VIII. List of the special purpose subjects controlled by the Company
□ Applicable√ Inapplicable
IX. Outlook of theCompany’s future development
(I) Competition and development trends in the industry
1. Competition pattern of pesticide industry
Firstly, the concentration ratio of the domestic pesticide industry was not high and the small scale regional agentia preparation enterprises were numerous. The total amount of the pesticide sales of more than ten listed enterprises which the main business was pesticide only covered about10% of the total sales amount of the domestic pesticide enterprises, while the total sales amount of the top 6 enterprises of the world covered about75% of the world total pesticide sales amount. Secondly, the competition from the overseas pesticide enterprises became serious. The international pesticide enterprises represented by such as Syngenta and Bayer, which had rapidly moved into the China pesticide market, the domestic market ratio climbed quickly.
2. Development tendency of pesticide industry
Firstly, as the aggravation of the industry competition and the execution of the new Environmental Protection Law, and the further improve of the concentration ratio of the pesticide industry, a batch of pesticide enterprises owned scale, technology, and market as well as brand advantage developed rapidly. Secondly, the development mode through large-scale input the variety which exceeded the patent period and the capacity expansion of the domestic pesticide industry would be more and more difficult to sustain, while depended on the innovation to promote the structure adjustment and industry upgrade of the pesticide products would become the characteristic of the industry development. Thirdly, the competition advantage of the domestic pesticide would gradually transfer from cost advantage to quality and brand advantage to effectively realize the differentiation and brand premium of the products. Fourthly, to promote clearly produce, energy conservation and emission reduction. Lastly, the constantly emergence of the crop entire
solution that transferred from selling products to providing service based on transnational corporation and the prevention and control
of agricultural professional team constantly involved with the cell phones such as UAV and large spray equipment, and the emerging
agricultural management main entities such as the planting major clients, family farm and the cooperatives promoted by social
2014 Annual Report of Hubei Sanonda Co., Ltd. capital would constantly change the pesticide marketing and usage field, which would affect the form and package of the agentia preparation of the pesticide as well as the sales system and method of the pesticide.
(II) Development strategies of the Company
Under guidance of national industry policies and overall development strategy of CHEMCHINA and China National Agrochemical Corporation, the Company will make full use of existing resources, technology, etc. Moreover, by adhering to scientific development perspective to improve the operation quality of economic and promote the sustainable and healthy development of the enterprises guided by the market requirements, on the emphasis on the safety and environmental protection, centered by quality and benefit, based on the management strengthening, driven by the technology innovation as well as rooted by talent cultivation. Perfected and expanded the current pesticide chemical supporting system, vigorously development chemical products, constructed the energy mating supply system met with the manufacturing technique requirement of the agrochemical products of the Company, and constructed the three big industry chain--organic phosphorus series, phosgene series and pyridine series to strengthen the core competitiveness.
(III) Plan for operation
The operation revenue goal of the Company in Y2015 is of RMB 3.3 billion with the YoY increase of5%; during which the expenditure plan is of RMB 0.3 billion with the YoY increase of 36%; the operation cost is of RMB 2.6 billion with the YoY increase of 18%. (The above operation plans and goals not represent the profits estimation of the Company of Y2015, whether they could be realized depend on various factors such as the changes of the market conditions that with large uncertainty, so the investors should pay special attention.)
In order to achieve the above goals, the company will mainly focus on the following works:
Firstly, is to make great efforts to execute the security and environmental protection to ensure the steady operation of the production. Continue to promote the SHE system construction and to make great efforts to execute the practice of the liability form of safety production as well as to strengthen the hidden danger troubleshooting and risks identification as well as to intensify the practice of the rectification. As for the environmental protection, to take the prevention and control of the environmental pollution accidents, governance of the environmental hidden danger troubleshooting, wastewater discharge monitoring management, environmental management and environmental goals management as the main line to make great efforts to execute the environmental protection management. Continue to enlarge the investment power of the environmental protection and to accelerate the environmental protection projects construction as well as to make great efforts to execute the operation management of the environmental protection device.
Secondly, is to innovate the marketing thinking and to expand the market by all manner of means. To strengthen the market information collection, enhance the forecast and judgment ability, to select the target market according to the market characteristics, requirements tendency and competition conditions, to exert the enterprises advantages and to make great efforts to develop the market. To follow the changes of the market elements and to flexible and timely adjust the marketing strategies. Continue to intensify the channels management and to improve the enthusiasm of the customer sales, to enlarge the sales inspections and to realize the balanced development of the sales of each area and to exert the productivity advantage, to develop the active compound sales channels and to strive for the new breakthrough of the preparations and sales at the same time. As for the external sales, to further strengthen the closely connection and cooperation of the transnational corporation, actively search for new customers and actively cultivate stable and larger herbicide customer. Quicken the cooperation with ADAMA Company in the market information and sales, thus to form the sales growth.
Thirdly, is to deepen to the system construction and to promote the constantly improve of the management. To practical execute well of the TPM management, to improve the scheduled maintenance and the recondition quality, to intensify the daily maintenance of the equipments, to reduce the maintenance frequency and to control the repair expenses as well as to rectification optimization the TQM management. Strengthens the process control, to ensure the entire cover, and promotes the constantly improvement of the TQM management work. To enhance the 5S standard, to make great efforts to execute the training, to refine the process and to ensure the
responsibility arrives person, to practice the two-stage 5S inspection and assessment and to constantly improve the staff literacy.
2014 Annual Report of Hubei Sanonda Co., Ltd. Fourthly, is to intensify the operation management and control as well as to endeavor the promotion of the cost-reduction and synergy. Strengthens the management of purchase and logistics and controls the cost of the purchase and transportation. Strengthens the budget management and to control the cost expenses. Intensifies the energy-saving and cost-reducing as well as the benchmarking work and improves the production level. To deepen the human resources management and optimized the talents structure. Continue to promote the information construction and to improve the information level of the Company.
Lastly, is to insist the technology progress and to make great efforts to execute the standard reaches producing of the newly-constructed devices. Continue to strengthen the cooperation of the scientific research institutions and to develop the technology progress from the aspects such as energy-saving and cost-reducing, security and environmental protection, quality-improvement and synergy as well as to improve the competitiveness of the production market.
(IV) Capital requirement plan of company
In accordance with production and management, and projects planned to be constructed and under construction, it is predicted that the company needs about RMB 1 billion capitals in 2015. Fund sources directly come from bank loans and self-owned funds. (V) Risks of the Company
Firstly, the risks of environmental protection. As the environmental protection requirements of our nation are becoming stricter and stricter, the survival risk of the pesticide industry improved. The Company reinforced the cooperation of the scientific research institutions and enlarged the environmental investment as well as strengthened the comprehensive management to ensure the standard emission.
Secondly, the risks of exchange rate. The export ratio of the Company was increased that in Y2014 had exceeded60%, and the influence of the exchange rate on the Company increased. The Company fully considered the risks of the exchange rate when signing the trade contraction with the clients, made prompt settlement of exchange and shorten the payment days; and at the same time adjusted the export products structure, to face up to the risks of refund policy adjustment.
Lastly, the risks of human resources. The Company was facing with the increase of the human resources costs, and the risks of the lack of professional talents. The Company promoted the informative construction and improved the automation level, and made great efforts to enlarge the coverage area of DCS, and at the same time improved the salary system and incentive system to attract talents. X. Explanation of the Board of Directors and Board of Supervisors on Non-standard Auditing Report issued by the CPA firm for the reporting period
□ Applicable√ Inapplicable
XI. Explanation on changes of accounting policy, estimate and method compared to previousyear’s financial report
√ Applicable□ Inapplicable
At the year-begin of 2014, the Ministry of Finance issued No. 39 ofASBE—Fair Value Measurement, No. 30 ofASBE—Presentation of Financial Statements (revised in 2014), No. 9 ofASBE—Employee Compensation (revised in 2014), No. 33 ofASBE—Consolidation Financial Statement (revised in 2014). No. 40 ofASBE—Joint Venture Arrangement, No. 2 ofASBE—Long-term Investment (revised in 2014) and No. 41 ofASBE—Equity Disclosure of Other Entities which respectively by C-H[2014] No.6, No. 7, No. 8, No. 10, No. 11, No. 14 and No. 16 which be required to execute among the enterprises that applied the ASBE since 1 Jul. 2014 as well as encouraged the enterprises listed overseas to execute in advance. At the same time, the Ministry of Finance issued No. 37 ofASBE—Presentation of Financial Instruments (revised in 2014) as C-H[2014] No. 23 (hereinafter referred to Presentation Guidelines of Financial Instruments for short), which be required to present the financial instruments according to the requirements of the guidelines in Y2014 and the following period among the financial statement.
The Company began to execute the above 7 new issued or revised enterprises principles except for the presentation guidelines of
2014 Annual Report of Hubei Sanonda Co., Ltd. financial instruments since 1 Jul. 2014 and began to execute the presentation guidelines of financial instruments when compiling the 2014 financial report and adjusted according to the relative requirements of each guidelines, while the influences on the financial statement items during the current period and the earlier stage of the presentation as well as the amount were as follows:
|||||
|-|-|-|-|
|Name of criterions|Notes of the content and the influences|The affected amount of the relevantfinancial statement items on 1 Jan. 2014/ofY2013||
|||Name of items|Affected amountIncrease+/Decrease-|
|No. 2 of ASBE–Long-term EquityInvestment|The Group had no joint control or significant influenceson the investees before executing the No. 2 of ASBE–Long-term Equity Investment (revised in 2014), and theequity investment which had no quotation in the activemarket as well as its fair value could be not reliablemeasured should be measured as long-term equityinvestment by cost method. After executed the No. 2 ofASBE –Long-term Equity Investment (revised in 2014),the Group measured the equity investment which didn’thave joint control or significant influences on theinvestees and had no quotation in the active market aswell as its fair value could not be reliable measured asavailable-for-sale financial assets. The Group executed theaccounting treatment of the above changes of accountingpolicies by retrospective application.|Available-for-salefinancial assets|+9,153,782.63|
|||Long-term equityinvestment|-9,153,782.63|

XII. Explanation on retrospective restatement of significant accounting error correction during the reporting period
□ Applicable√ Inapplicable
There was no any retrospective restatement of significant accounting error correction of the Company during the reporting period. XIII. Explanation on changes of scopes of consolidated statement compared to previousyear’s financial report
□ Applicable√ Inapplicable
There was no any change of scopes of consolidated statement of the Company during the reporting period.
XIV. Profit allocation and dividend distribution
The formulation, execution or adjustment of profit distribution policy during the reporting period
□ Applicable√ Inapplicable
Pre-plan or plan for profit distribution and turning capital reserve into share capital in recent 3 years (including the reporting period)
Plan for profit distribution of 2012: Take the total share capital of 31 Dec. 2012 as cardinal number, the Company distributed cash
bonus to the whole shareholders with every 10 shares of RMB 0.5 (including tax), and granted bonus of none (including tax), which
2014 Annual Report of Hubei Sanonda Co., Ltd. not turned the share capital with capital reserve.
Plan for profit distribution of 2013: Take the total share capital of 31 Dec. 2013 as cardinal number, the Company distributed cash bonus to the whole shareholders with every 10 shares of RMB 0.5 (including tax), and granted bonus of none (including tax), which not turned the share capital with capital reserve.
Plan for profit distribution of 2014: Take the total share capital of 31 Dec. 2013 as cardinal number, the Company distributed cash bonus to the whole shareholders with every 10 shares of RMB 1.0 (including tax), and granted bonus of none (including tax), which not turned the share capital with capital reserve.
Cash dividend in the recent three years
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||||The ratio accounting|||
|||Net profit belonging|||The proportion|
||||in net profit which|The amount offered||
|||to shareholders of|||offered and|
||Amount of cash||belongs to|and re-purchased the||
|||the listed company|||re-purchased the|
|Dividend year|dividend (including||shareholders of the|shares by cash that||
|||in consolidated|||shares by cash that|
||tax)||listed company in|included in the cash||
|||statement of|||included in the cash|
||||consolidated|bonus||
|||dividend year|||bonus|
||||statement|||
|2014|59,392,322.00|491,771,929.22|12.08%|0.00|0.00%|
|2013|29,696,161.00|320,811,958.67|9.26%|0.00|0.00%|
|2012|29,696,161.00|103,768,969.35|28.62%|0.00|0.00%|

 Although the company obtains profits and the parentcompany’s undistributed profit is positive during the reporting period, no cash dividend distribution pre-plan is put forward.
□Applicable√Inapplicable
XV. Preplan for profit distribution and turning capital reserve into share capital in the reporting period
√ Applicable□ Inapplicable
|||
|-|-|
|Bonus shares for every 10 shares (shares)|0|
|Dividend for every 10 shares (RMB Yuan)||
||1.00|
|(including tax)||
|Shares turned from capital reserve for every 10||
||0|
|shares (share)||
|Total shares as the basis for the allocation preplan||
||593,923,220|
|(share)||
|Total cash dividends (RMB Yuan) (tax included)|59,392,322.00|
|Distributable profit (RMB Yuan)|440,057,791.67|
|Proportion of cash bonus in the total of profit||
||100.00%|
|distribution||
|Cash dividend policy:||
|Other||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||
|-|
|Specific explanation of preplan for profit distribution or preplan for turning capital reserve into share capital|
|Audited by Ruihua Certified Accountants (LLP), the net profits of 2014 that the Company realized and belongs to the parent|
|company was of RMB 491,771,929.22, and if withdrew the statutory surplus reserves of 10% of the current net profit of the parent|
|company, which amounted to RMB 51,714,137.55, the distributable profits of the year would be RMB 440,057,791.67. The actual|
|accumulated distributable profits for the shareholders was of RMB29,696,161.00, which deducted the distributed cash bonus of|
|RMB 546,688,770.98 of 2013 and added the profits which had not distribute of RMB 546,688,770.98. In consideration of the|
|production and operation as well as the projects construction of the Company still need rather large capital, for guarantee the|
|sustainable and healthy development, the preplan for profit distribution and turning capital reserve into share capital of|
|2014protocol led that: take the total share capital of 31 Dec. 2014 as cardinal number, the Company distributed cash bonus to the|
|whole shareholders with every 10 shares of RMB 1.0 (including tax), and granted bonus of none (including tax), which not turned|
|the share capital with capital reserve.|

XVI. Social Responsibility
√ Applicable□ Inapplicable
Through abiding by policy of safety, quality, environmental protection and benefit, the company carries out production operating activities in strict accordance with OHSAS18001 Occupation Health and Safety Management System, ISO14001 environment management system, ISO9001 quality management system and national cleaner production standards. Through vigorously developing technology improvement in the aspects of production equipments, technique and off-gas governance, the Company improves the intrinsically safe degree of the production device, promotes lean production, energy conservation and emission reduction, as well as educe energy and material consumption. And the comprehensive energy consumption and water consumption of ten thousand Yuan production value decreases gradually. The Company enlarges the investment in environmental protection, promotes the comprehensive improvement of the environment, develops the environmental protection technology transformation item and constantly improves the environmental performance.
The Company put emphasis on the training and education on the employees and constantly strengthens their awareness on safety and environmental protection. On the basis of increase of company benefits and sustainable development, the Company steadily improves the revenue of the employees. And at the same time, reinforces investment on safety protection for employees and strive to improve their work and life environment.
Our company strives to protectingconsumers’ rights and interests in real sense through continuously promoting product quality and severely cracking down on counterfeit and shoddy products. We strengthen communications among customers, suppliers and other stakeholders and actively response to the appeal of the customers, and do great effort for realization of multi-win-win based on equality and free will. On the basis of safeguarding sustainable development, the company attaches great importance toinvestors’ returns, and enlarges the cash bonus vigor in recent years.
Does the listed company or its subsidiaries belong to the heavily polluting industries stipulated by the environmental protection authorities of the country?
√ Yes□ No□ Inapplicable
1. All the construction projects had gone through the evaluation of the environmental influence, and had passed the examination of the Principal, Municipal Environmental Protection Bureau, which agreed the approval documents of construction. Strictly carried out the three-simultaneous system of environmental protection, which stipulated the simultaneous design, the simultaneous construction, the simultaneous commissioning that ensured the volume increased without increased pollution.
2. The Company took the lead in carrying out the SO14001 International Environmental Management Standards System in the same
industry and received the authentication certificate, which played an important role for promoting the enterprises environmental
management level and improving the enterprises environmental appearance. Enlarged the environmental protection investment to
2014 Annual Report of Hubei Sanonda Co., Ltd. ensure the three wastes emission met with the standards. Local environmental monitoring departments executed irregular monitoring of the release of the three wastes, and the result of the monitoring indicated that the Company turned out to reach the up-to-standard release of the three wastes basically; and the Company passed the clean production examination and approval as well as acceptance with no environmental pollution accident and other environmental violation for recent years. During the review report of the conformance of the environmental protection laws and regulations which be executed every year, the Company successfully passed the evaluation of the certification authority (the third party) for the situation of laws and disciplines observation. The Company revised the Emergency Preplan for Environment to the Environmental Protection Department and passed the evaluation organized by Hubei province Environmental Protection Department and consistently organized training, maneuver and evaluation for ensure the effectiveness of the preplan.
Does the listed company or its subsidiaries have any other significant social security problems?
□ Yes√ No□ Inapplicable
Any administrative punishment during the reporting period?
□ Yes√ No□ Inapplicable
XVII. Particulars about researches, visits and interviews received in this reporting period√ Applicable□ Inapplicable
|||||||
|-|-|-|-|-|-|
||||||Main discussion and|
|Time of reception|Place of reception|Way of reception|Visitor type|Visitor|materials provided by the|
||||||Company|
||||||Production and operation|
||||||situation of the first quarter|
|13 Mar. 2014|The Company|Other|Individual|Individual investor||
||||||of the Company and the|
||||||prices of the main products.|
||||||Proposals reviewed at the|
|28 Mar. 2014|The Company|Other|Individual|Individual investor|2013 Annual General|
||||||Meeting.|
||||||Influences of the|
||||||production prohibition of|
|||Telephone||||
|22 Apr. 2014|The Company||Individual|Individual investor|the paraquat aqueous|
|||communication||||
||||||solution on the Company|
||||||on 1 Jul. 2014.|
||||||Progress of the responsibl|
||||||e investigation of the Co|
|||Telephone||||
|19 May 2014|The Company||Individual|Individual investor|mpany executed by the in|
|||communication||||
||||||termediary agent that eng|
||||||aged by ADAMA.|
||||||Production and operation|
|||Telephone||||
|10 Jun. 2014|The Company||Individual|Individual investor|situation and pesticide|
|||communication||||
||||||market tendency.|
|||Telephone|||Product prices tendency|
|22 Jul. 2014|The Company||Individual|Individual investor||
|||communication|||such as glyphosate,|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|||||||paraquat.|
|||||||Holder number of A shares|
|||Telephone|||||
|3 Sep. 2014|The Company|||Individual|Individual investor|of the Company at the end|
|||communication|||||
|||||||of August.|
|||Telephone||||Production and operation of|
|26 Sep. 2014|The Company|||Individual|Individual investor||
|||communication||||the Company|
|||||||Relevant events of the|
|||Telephone||||equity transfer of the|
|30 Sep. 2014|The Company|||Individual|Individual investor||
|||communication||||shareholding of Jingzhou|
|||||||Sanonda|
|||||||The selling price of the p|
|||Telephone||||roducts whether fluctuated|
|17 Oct. 2014|The Company|||Individual|Individual investor||
|||communication||||as the price of the petro|
|||||||chemical products.|
|||Telephone||||Production and operation of|
|19 Dec. 2014|The Company|||Individual|Individual investor||
|||communication||||2014|
|Reception times|||11||||
|Number of reception institutions|||0||||

 Section V. Significant Events
I. Significant lawsuit or arbitration
□ Applicable√ Inapplicable
There was no significant lawsuit or arbitration during the reporting period.
II.Media’s questions
□ Applicable√ Inapplicable
There was nomedia’s question during the reporting period.
III. Particulars about the non-operating occupation of funds by the controlling shareholder and other related parties of the Company
□ Applicable√ Inapplicable
There was no particular about the non-operating occupation of funds by the controlling shareholder and other related parties of the Company during the reporting period.
IV. Bankrupt and reorganization events
There were no bankrupt or reorganization events for the Company during the reporting period.
2014 Annual Report of Hubei Sanonda Co., Ltd.□ Applicable√ Inapplicable
V. Asset transactions
1. Acquisition of assets
□ Applicable√ Inapplicable
There was no acquisition of assets during the reporting period.
2. Sales of assets
□ Applicable√ Inapplicable
There was no sale of assets during the reporting period.
3. Business combination
There was no business combination for the Company during the reporting period.
VI. Particulars about the implementation of equity incentive of the Company and its influence There was no equity incentive implemented by the Company up to the end of the reporting period.
VII. Significant related-party transactions
1. Related-party transactions concerning routine operation
√Applicable□ Inapplicable
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||Pricing||||Settlemen||||
|||Type of|Content|||Transacti||||||
|||||principle|||Proportio|t method|Similar|||
|||the|of the|||on||||||
|||||of the|||n in same|of the|Transacti|||
|Related|Relations|related-pa|related-pa||Transacti|amount||||Disclosur|Disclosure|
|||||related-pa|||kind of|related-pa|on market|||
|party|hip|rty|rty||on price|(RMB||||e date|index|
|||||rty|||transactio|rty|price|||
|||transactio|transactio|||Ten||||||
|||||transactio|||ns (%)|transactio|receivable|||
|||n|n|||thousand)||||||
|||||n||||n||||
||||||||||||Announce|
||||||||||||ment NO.|
|Bluestar||||||||||||
||||||||||||2013-34|
|(Beijing)|Under|||||||||||
|||||||||Cash|||name of|
|Chemical|the same||Equipmen|Market||||||20 Jul.||
|||Purchase||||494.81||remittanc|||the|
|Machiner|ultimate||ts|price||||||2013||
|||||||||e|||announce|
|y Co.,|controller|||||||||||
||||||||||||ment: the|
|Ltd.||||||||||||
||||||||||||Transactio|
||||||||||||ns|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||||||Announce|
|||||||||ment|
|||||||||Related|
|||||||||Contract|
|||||||||For Epc|
|||||||||General|
|||||||||Contractin|
|||||||||g Project|
|||||||||Signed|
|||||||||With|
|||||||||Related|
|||||||||Parties|
|||||||||Informatio|
|||||||||n|
|||||||||disclosed|
|||||||||on|
|||||||||http://ww|
|||||||||w.cninfo.c|
|||||||||om.cn|
|Bluestar|||||||||
|(Beijing)|Under||||||||
||||Engineeri|||Cash|||
|Chemical|the same|||Market|||20 Jul.|Same with|
|||Purchase|ng||4,769.23|remittanc|||
|Machiner|ultimate|||price|||2013|the above|
||||materials|||e|||
|y Co.,|controller||||||||
|Ltd.|||||||||
|||||||||Announce|
|||||||||ment NO.:|
|||||||||2014-20|
|||||||||name of|
|||||||||the|
|||||||||announce|
|||||||||ment: the|
||||Raw|||||Estimated|
|Jingzhou|||materials|||Cash||Announce|
||parent|||Market|||13 Jun.||
|Sanonda||Purchase|and||113.19|remittanc||ment of|
||company|||price|||2014||
|Co.,Ltd.|||packing|||e||Daily|
||||materials|||||Related|
|||||||||Party|
|||||||||Transactio|
|||||||||ns|
|||||||||Informatio|
|||||||||n|
|||||||||disclosed|
|||||||||on|

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||||||||||||http://ww|
||||||||||||w.cninfo.c|
||||||||||||om.cn|
|Haohua|Under|||||||||||
||||Equipmen|||||Cash||||
|Engineeri|the same|||Market||||||13 Jun.|Same with|
|||Purchase|ts and|||4,175.38||remittanc||||
|ng Co.,|ultimate|||price||||||2014|the above|
||||service|||||e||||
|Ltd.|controller|||||||||||
|Makhtesh||||||||||||
||Under|||||||||||
|im||||||||Cash||||
||the same||Sales of|Market||||||13 Jun.|Same with|
|Chemical||Sale||||4,377.02||remittanc||||
||ultimate||pesticides|price||||||2014|the above|
|Works||||||||e||||
||controller|||||||||||
|Ltd.||||||||||||
|Jiamusi||||||||||||
||Under|||||||||||
|Heilong||||||||Cash||||
||the same||Sales of|Market||||||13 Jun.|Same with|
|Agroche||Sale||||181.77||remittanc||||
||ultimate||pesticides|price||||||2014|the above|
|micals||||||||e||||
||controller|||||||||||
|Co., Ltd.||||||||||||
|Jiangsu||||||||||||
||Under|||||||||||
|Anpon||||||||Cash||||
||the same||Sales of|Market||||||13 Jun.|Same with|
|Electroch||Sale||||311.95||remittanc||||
||ultimate||pesticides|price||||||2014|the above|
|emical||||||||e||||
||controller|||||||||||
|Co., Ltd.||||||||||||
||Associate|||||||||||
||||Chemical|||||||||
|Jingzhou|d|||||||||||
||||engineeri|||||Cash||||
|Huaxiang|enterprise|||Market||||||13 Jun.|Same with|
|||Sale|ng and|||232.92||remittanc||||
|Chemical|s of|||price||||||2014|the above|
||||power|||||e||||
|Co., Ltd.|parent|||||||||||
||||products|||||||||
||company|||||||||||
||Under|||||||||||
|||||||||Cash||||
|FARMOZ|the same||Sales of|Market||||||13 Jun.|Same with|
|||Sale||||733.41||remittanc||||
|PTY LTD|ultimate||pesticides|price||||||2014|the above|
|||||||||e||||
||controller|||||||||||
|Shangdon||||||||||||
|g|Under|||||||||||
|||||||||Cash||||
|Dacheng|the same||Sales of|Market||||||13 Jun.|Same with|
|||Sale||||1,475.88||remittanc||||
|Agroche|ultimate||pesticides|price||||||2014|the above|
|||||||||e||||
|mical|controller|||||||||||
|Co., Ltd.||||||||||||
|Total||||--|--|16,865.56|--|--|--|--|--|
|Details about return of large-amount sales||||N/A||||||||
|Necessity and continuity of related-party||||The routine related-party transactions for this time can give full play to the advantage of||||||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||
|-|-|
|transaction as well as reason of choosing|purchase and sales of Sanonda Group Corporation, so as to provide stable and reliable|
|the related party (but not other transaction|source of raw materials and further ensure the normal production and operation|
|parties) to conduct the said transaction|activities of the Company. The Company’s routine related-party transactions won’t|
||generate negative effect on the Company and non-related party shareholders, thus such|
||transactions will continue.|
||The above related transactions have no influence on the independency of the Company,|
|Impacts of related-party transaction on||
||thus its main business won’t form the dependency on related parties or be controlled by|
|independency of the Company||
||them due to such transactions.|
|Dependent degree of the Company on||
|related party and relevant solutions for the|N/A|
|dependence (if any)||
||Estimated part exceeded daily related party transactions was examined and approved by|
|Where the Company classifies and||
|estimates the total amount of routine|34th Meeting of the Sixth Board of Directors. For details, referred to Announcement on|
|related-party transactions for the reporting||
||Ratification of the Excess Part of 2014 Annual Daily Related Party Transactions on|
|period, explain the actual implementation||
|during the reporting period (if any)|4Feb. 2015 (Announcement NO.:2015-7)|
|Explain why the transaction price is greatly||
||N/A|
|different from the market price (if||
|applicable)||

2. Related-party transactions regarding purchase and sales of assets
□ Applicable√ Inapplicable
There were no related-party transactions regarding purchase and sales of assets during the reporting period.
3. Significant related-party transitions with joint external investments
□ Applicable√ Inapplicable
There were no significant related-party transitions with joint external investments during the reporting period.
4. Significant credits and liabilities with related parties
□ Applicable√ Inapplicable
There were no significant credits and liabilities with related parties during the reporting period.
5. Other significant related-party transactions
√Applicable□ Inapplicable
1. The parent company of theGroup—Sanonda Group Corporation paid& gained wages and social security through the Group with a total of RMB1, 235,680.46.
2. Balance of bank deposit of Chemchina Finance Co., Ltd. of the Group at the period- begin was of RMB 68,573,515.18, period-end
was of RMB 82,266,671.62, and balance of short-term loan at the period- begin was of RMB 130,000,000.00, period-end was of
2014 Annual Report of Hubei Sanonda Co., Ltd. RMB 0.00; Interest of bank deposit of this year was of RMB 1,686,475.07, and interest of the paid of short-term loan of this year was of RMB 278,500.00.
3. In reporting period, the 7th floor of theCompany’s office building had rented to Sanonda Group Corporation for business operation in the reporting period with the annual rent of RMB 120,000.
4. In reporting period, the Company paid guarantee of RMB 1570000 to Jingzhou Sanonda Co., Ltd. and China National Chemical Agrochemical Corporation.
The website to disclose the interim announcements on significant related-party transactions
||||
|-|-|-|
||Disclosure date of the interim||
|Name of the interim announcement||Website to disclose the interim announcement|
||announcement||
|Related transaction announcement of ChinaNational Chemical Financial CorporationContinuing to Provide Financial Services tothe Company|||
||28 May 2013|www.cninfo.com.cn|
|Related transaction announcement ofinsurance pay to the controlling shareholderand related parties|||
||22 Apr. 2014|www.cninfo.com.cn|

VIII. Significant contracts and execution
1. Particulars about trusteeship, contract and lease
(1) Trusteeship
□ Applicable√ Inapplicable
There was no trusteeship during the reporting period.
(2) Contract
□ Applicable√ Inapplicable
There was no contract during the reporting period.
(3) Lease
√Applicable□ Inapplicable
Particulars about contract
In the reporting period, the 7th floor of theCompany’s office building had rented to Sanonda Group Corporation for business operation in the reporting period with the annual rent of RMB 120,000.
Gain/loss of projects that brought over10% of the total profits for the Company during the reporting period
□ Applicable√ Inapplicable
There was no gain/loss of projects that brought over10% of the total profits for the Company during the reporting period
2014 Annual Report of Hubei Sanonda Co., Ltd. 2. Guarantees provided by the Company
Unit: RMB Ten thousand Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Guarantees provided by the company for external parties (excluding those for subsidiaries)|||||||||
||Disclosure||||||||
||date on|||||||Guarante|
||||Actual||||||
||relevant|||Actual||||e for a|
|||Amount for|occurrence date||Type of|Period of|Executed||
|Guaranteed party|announcem|||guarantee||||related|
|||guarantee|(date of||guarantee|guarantee|or not||
||ent of|||amount||||party or|
||||agreement)||||||
||guaranteed|||||||not|
||amount||||||||
|Guarantees provided by the company for its subsidiaries|||||||||
||Disclosure||||||||
||date on|||||||Guarante|
||||Actual||||||
||relevant|||Actual||||e for a|
|||Amount for|occurrence date||Type of|Period of|Executed||
|Guaranteed party|announcem|||guarantee||||related|
|||guarantee|(date of||guarantee|guarantee|or not||
||ent of|||amount||||party or|
||||agreement)||||||
||guaranteed|||||||not|
||amount||||||||
|Hubei Sanonda|||||||||
||||||Joint liability||||
|Foreign Trading Co.,|4 Mar. 2014|34,900|15 Mar. 2013|34,900||1 year|No|Yes|
||||||guarantee||||
|Ltd.|||||||||
|Total guarantee line approved for||||Total actual occurred amount|||||
|the subsidiaries during the||||of guarantee for the|||||
|||34,900||||34,900|||
|reporting period||||subsidiaries during the|||||
|(B1)||||reporting period (B2)|||||
|Total guarantee line that has been|||||||||
|||||Total actual guarantee balance|||||
|approved for the subsidiaries at|||||||||
|||34,900||for the subsidiaries at the end||32,900|||
|the end of the reporting period|||||||||
|||||of the reporting period (B4)|||||
|(B3)|||||||||
|Total guarantee amount provided by the company (total of the above-mentioned two kinds of guarantees)|||||||||
|Total guarantee line approved||||Total actual occurred amount|||||
|during the reporting period||34,900||of guarantee during the||34,900|||
|(A1+B1)||||reporting period (A2+B2)|||||
|Total guarantee line that has been|||||||||
|||||Total actual guarantee balance|||||
|approved at the end of the|||||||||
|||34,900||at the end of the reporting||32,900|||
|reporting period|||||||||
|||||period (A4+B4)|||||
|(A3+B3)|||||||||
|Proportion of total guarantee amount (A4+B4) to the net assets|||||||||
|||||16.39%|||||
|of the Company|||||||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||
|-|-|
|Of which:||
|Amount of debt guarantee provided for the guaranteed party||
|whose asset-liability ratio is not less than 70% directly or|32,900|
|indirectly (D)||
|Total amount of the above three guarantees (C+D+E)|32,900|

 Explanation on guarantee that adopts complex method
(1) Particulars about illegal external guarantee
□ Applicable√ Inapplicable
There was no illegal external guarantee in the Company during the reporting period
3. Other significant contracts
□ Applicable√ Inapplicable
There was no other significant contract in the Company during the reporting period
4. Other significant transactions
□ Applicable√ Inapplicable
There was no other significant transaction in the Company during the reporting period
IX. Performance of commitments
1. Commitments made by the Company or shareholders holding over5% of theCompany’s shares in the reporting period or such commitments carried down into the reporting period
√Applicable□ Inapplicable
|||||||
|-|-|-|-|-|-|
|||||Term of||
||Commitmen||Time of|||
|Commitment items||Commitment contents||commitme|Execution|
||t maker||commitment|||
|||||nt||
|Commitments of share||||||
|reform||||||
|||I. Commitments on avoiding horizontal competition: 1.|||Up to the|
|||The business of the Company’s subsidiaries-- Jiangsu|||date of|
|||Anpon Electrochemical Co., Ltd., Anhui Petroleum|||declaration|
|Commitments made in|Celsius|||||
|||Chemical Group Co., Ltd., Shangdong Dacheng|||of the report,|
|acquisition report or in|Property|||Within 7||
|||Agrochemical Co., Ltd. and Jiamusi Heilong|7 Sep. 2013||the|
|report on changes of|B.V. and|||years||
|||Agrochemicals Co., Ltd., and Hunan Haohua Chemical|||commitment|
|equity|MAI|||||
|||Co., Ltd. and its subsidiary had the same or similar|||s were being|
|||situations with the main business of Sanonda, and aimed|||carried out|
|||at the domestic horizontal competition, the Company|||and the|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
||committed to gradually eliminate such kind of horizontal|||committers|
||competition in the future and to fight for the internal|||abided by|
||assets reconstruction, to adjust the industrial plan and|||the above|
||business structure, to transform technology and to|||commitment|
||upgrade products, to divide the market so as to make each|||s.|
||corporation differ in the products and its ultimate users||||
||according to the securities laws and regulations and||||
||industry policy within 7 years, thus to eliminate the||||
||current domestic horizontal competition between the||||
||Company’s controlling subsidiaries and Sanonda.||||
||II. Commitments on maintaining the Company’s||||
||operation independence and specify the related||||
||transaction: 1. After the complement of the tender offer,||||
||Sanonda will continues to maintain complete purchase,||||
||production and sales system, and to gain the independent||||
||intellectual property. The Company and its direct or|||Up to the|
||indirect controlling shareholders and Sanonda of which|||date of|
||the personnel, assets, finance, business and institutions|||declaration|
||will be completely separated, and at the same time|||of the report,|
||maintain the operation ability of Sanonda that|||the|
|Celsius|independently face to the China agrochemical industry|||commitment|
|Property|market. 2. The Company will avoid and reduce the related|||s were being|
|||7 Sep. 2013|Long term||
|B.V. and|transactions with Sanonda according to the requirements|||carried out|
|MAI|stipulated by the laws, regulations and other normative|||and the|
||documents; but for those related transactions that are|||committers|
||inevitable or occur with reasonable cause, will have to|||abided by|
||obey the just, fair and open market principles. And to sign|||the above|
||the agreement according to the law and to carry out legal|||commitment|
||program, and to make sure not to harm the legal interest|||s.|
||of Sanonda and other shareholders by related transaction||||
||according to the Articles of Association of Sanonda, the||||
||relevant system about related transaction and to conduct||||
||the duty of information disclosure as well as the approval||||
||process which stipulated by the relevant regulations.||||
||I. Commitments on avoiding horizontal competition: 1.|||Up to the|
||The business of the Company’s subsidiaries-- Jiangsu|||date of|
||Anpon Electrochemical Co., Ltd., Anhui Petroleum|||declaration|
|China|||||
||Chemical Group Co., Ltd., Shangdong Dacheng|||of the report,|
|National|Agrochemical Co., Ltd. and Jiamusi Heilong||Within 7|the|
|||7 Sep. 2013|||
|Chemical|Agrochemicals Co., Ltd., and Hunan Haohua Chemical||years|commitment|
|Corporation|Co., Ltd. and its subsidiary had the same or similar|||s were being|
||situations with the main business of Sanonda, and aimed|||carried out|
||at the domestic horizontal competition, the Company|||and the|
||committed to gradually eliminate such kind of horizontal|||committers|

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||||
|-|-|-|-|-|-|
|||competition in the future and to fight for the internal|||abided by|
|||assets reconstruction, to adjust the industrial plan and|||the above|
|||business structure, to transform technology and to|||commitment|
|||upgrade products, to divide the market so as to make each|||s.|
|||corporation differ in the products and its ultimate users||||
|||according to the securities laws and regulations and||||
|||industry policy within 7 years, thus to eliminate the||||
|||current domestic horizontal competition between the||||
|||Company’s controlling subsidiaries and Sanonda.||||
|||II. Commitments on maintaining the Company’s||||
|||operation independence and specify the related||||
|||transaction: 1. The Company will avoid and reduce the||||
|||related transactions with Sanonda according to the||||
|||requirements stipulated by the laws, regulations and other||||
|||normative documents; but for those related transactions||||
|||that are inevitable or occur with reasonable cause, will||||
|||have to obey the just, fair and open market principles.|||Up to the|
|||And to sign the agreement according to the law and to|||date of|
|||carry out legal program, and to make sure not to harm the|||declaration|
|||legal interest of Sanonda and other shareholders by|||of the report,|
|||related transaction according to the Articles of|||the|
||China|||||
|||Association of Sanonda, the relevant system about related|||commitment|
||National|transaction and to conduct the duty of information|||s were being|
||||7 Sep. 2013|Long term||
||Chemical|disclosure as well as the approval process which|||carried out|
||Corporation|stipulated by the relevant regulations.2. After the|||and the|
|||complement of the tender offer, Sanonda will continues to|||committers|
|||maintain complete purchase, production and sales system,|||abided by|
|||and to gain the independent intellectual property. The|||the above|
|||Company and its direct or indirect controlling|||commitment|
|||shareholders and Sanonda of which the personnel, assets,|||s.|
|||finance, business and institutions will be completely||||
|||separated, and at the same time maintain the operation||||
|||ability of Sanonda that independently face to the China||||
|||agrochemical industry market. The Company will accord||||
|||the relevant regulations of the Company Law and the||||
|||Securities Law, so thus to avoid any behaviors to||||
|||influence the independent operation of Sanonda.||||
|Commitments made at||||||
|the time of assets||||||
|reorganization||||||
|Commitments made in||||||
|the initial public||||||
|offering or refinancing||||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||
|-|-|
|Commitments made||
|by the company to||
|other medium and||
|small shareholders||
|Executed timely or||
||Yes|
|not?||

2. If theCompany’s assets or projects existing earnings prediction, and the reporting period is among the prediction period, it shall explain on whether the assets or projects reach the original earnings prediction and relevant reason
□ Applicable√ Inapplicable
X. Particulars about engagement and disengagement of CPAs firm
CPAs firm engaged at present
|||
|-|-|
|Name of domestic CPA firm|Ruihua Certified Public Accountants (LLP)|
|Remuneration for domestic CPA firm (ten thousand||
||85|
|Yuan)||
|Consecutive years of audit service provided by||
||5 years|
|domestic CPA firm||
|Name of registered accountants of domestic CPA||
||Kuang Xiaochang and Liu Hongping|
|firm||

Reengage the CPAs firm at current period or not?
□ Yes√ No
Particulars on engaging the audit firm for the internal control, financial adviser or sponsor
√ Applicable□ Inapplicable
The internal control audit firm be engaged was Ruihua Certified Public Accountants (LLP) in the reporting period.
No financial adviser or sponsor.
XI. Explanation of the Board of Supervisors and Independent Directors (If Applicable) on “Non-standard Auditing Report” Issued by the CPA Firm
XII. Punishment and Rectification
□ Applicable√ Inapplicable
There was no punishment and rectification n in the Company during the reporting period.
XIII. Particulars about trading suspension and termination faced after the disclosure of
annual report
□ Applicable√ Inapplicable
2014 Annual Report of Hubei Sanonda Co., Ltd. XIV. Explanation on other significant events
√ Applicable□ Inapplicable
1. TheCompany’s significant events of 300000 Tons/Year Caustic Soda Plant Technical Renovation Projects for Energy Conservation and Emissions Reduction, ofwhichⅠ 200000 Tons/Year of Caustic Soda was tested operation in late 2014.
2. Index of other events
||||
|-|-|-|
|Summary of significant events|Disclosure date|Website to disclose the interim|
|||announcement|
|The Suggestive Announcement on theCompany Controlling ShareholdersIntended to Restructuring|12 Mar. 2014|www.cninfo.com.cn|
|Announcement on Company ControllingShareholder Complete Restructuring andChanged the Name|15 Apr. 2014|www.cninfo.com.cn|
|The Suggestive Announcement on EquityChanges of the Controlling Shareholder|24 Sep. 2014||
|||www.cninfo.com.cn|
|The Suggestive Announcement on Equitytransfer of the Controlling Shareholder|9 Oct. 2014||
|||www.cninfo.com.cn|
|The Progressive Announcement on Equitytransfer of the Controlling Shareholder|11 Oct. 2014||
|||www.cninfo.com.cn|
|The Suggestive Announcement on theCSRC Approved and Exempted ADAMACelsius B.V. Offer Obligation|26 Dec. 2014||
|||www.cninfo.com.cn|

XV. Significant events of the subsidiaries of the Company
□ Applicable√ Inapplicable
XVI. Particulars about issuing corporate bonds by the Company
□ Applicable√ Inapplicable
2014 Annual Report of Hubei Sanonda Co., Ltd. Section VI. Changes in Share Capital and Particulars about Shareholders I. Changes in share capital
Unit: Share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before this change||Increase/decrease (+, -)|||||After the change||
||||||Capitalizat|||||
||||Issuance||ion of|||||
|||Proportion||Bonus|||||Proportio|
||Amount||of new||public|Other|Subtotal|Amount||
|||(%)||share|||||n (%))|
||||shares||reserve|||||
||||||fund|||||
|I. Shares subject to trading||||||||||
||32,467|0.01%||||||32,467|0.01%|
|moratorium||||||||||
|1. State-owned shares|0|0.00%||||||0|0.00%|
|2. State-owned legal||||||||||
|person|0|0.00%||||||0|0.00%|
|shares||||||||||
|3. Other domestic shares|32,467|0.01%||||||32,467|0.01%|
|Including: Shares held by||||||||||
||0|0.00%||||||0|0.00%|
|domestic legal persons||||||||||
|Shares held by domestic||||||||||
||32,467|0.01%||||||32,467|0.01%|
|individuals||||||||||
|4. Shares held by||||||||||
||0|0.00%||||||0|0.00%|
|overseas shareholders||||||||||
|Including: Shares held by||||||||||
||0|0.00%||||||0|0.00%|
|overseas legal persons||||||||||
|Shares held by overseas||||||||||
||0|0.00%||||||0|0.00%|
|individuals||||||||||
|II. Shares not subject to|593,890,7|||||||593,890,7||
|||99.99%|||||||99.99%|
|trading moratorium|53|||||||53||
|1. Ordinary shares|363,893,8|||||||363,893,8||
|||61.27%|||||||61.27%|
|denominated in RMB|28|||||||28||
|2. Domestically listed|229,996,9|||||||229,996,9||
|||38.73%|||||||38.73%|
|foreign shares|25|||||||25||
|3. Overseas listed foreign||||||||||
||0|0.00%||||||0|0.00%|
|shares||||||||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
|4. Other|0|0.00%|0|0.00%|
||593,923,2||593,923,2||
|III. Total of shares||100.00%||100.00%|
||20||20||

Reasons for changes in share
□ Applicable√ Inapplicable
Approval of share changes
□ Applicable√ Inapplicable
Transfers in share changes
□ Applicable√ Inapplicable
Influence of share changes towards financial indexes in the latest year and latest period such as basic EPS and diluted EPS, and net assets per share belonging to shareholder with ordinary share
□ Applicable√ Inapplicable
Other contents that the Company thinks necessary or is asked by securities regulators to be disclosed
□ Applicable√ Inapplicable
2. Changes in restricted shares
□ Applicable√ Inapplicable
II. Issuance and listing of securities
1. Issuance of securities over the past three years
□ Applicable√ Inapplicable
2. Explanation on changes in share capital& the structure of shareholders, the structure of assets and liabilities
□ Applicable√ Inapplicable
3. Existent shares held by internal staffs of the Company
□ Applicable√ Inapplicable
II. Particulars about the shareholders and actual controller
1. Total number of shareholders and their shareholding
Unit: Share
|||||||
|-|-|-|-|-|-|
|Total number of||Total number of||Total number of||
|shareholders at the|62,853|shareholders on the|59,719|preferred|0|
|reporting period||fifth trading day||stockholder with||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||before the disclosure|||||vote right restored( if|||
||||date of the annual|||||any) ( see note 8)|||
||||report||||||||
|Shareholding of shareholders holding more than 5% shares|||||||||||
|||||Number|Increase|Number|Number of||Pledged or frozen shares||
|||||of|and|of shares|shares||||
|||Holding||sharehold|decrease|held|held not||||
|Name of|Nature of||||||||||
|||percentag||ing at the|of shares|subject to|subject to||||
|shareholder|shareholder||||||||Status of shares|Number of shares|
|||e (%)||end of the|during|trading|trading||||
|||||reporting|reporting|moratoriu|moratoriu||||
|||||period|period|m|m||||
|SANONDAGROUPCORPORATION|State-owned legalperson|20.15%||119,687,202|||119,687,202||||
|Celsius PropertyB.V.|Foreign legalperson|10.60%||62,950,659|||62,950,659||||
|GUOTAIJUNANSECURITIES(HONGKONG)LIMITED|Foreign legalperson|0.76%||4,514,761|||4,514,761||||
|STATE-OWNEDASSETSADMINISTRATION BUREAUOF QICHUNCOUNTY|Nation|0.70%||4,169,266|||4,169,266||||
|Lai Qinrong|Domestic naturalperson|0.64%||3,787,132|3,787,13||3,787,132||||
|NORGES BANK|Foreign legalperson|0.44%||2,634,504|||2,634,504||||
|Dongguan TrustCo.,Ltd.—HongdeNo.6 AssembledFunds Trust Plan|Foreign non-statejuridical person|0.37%||2,180,886|2,180,88||2,180,886||||
|China Ping AnLife InsuranceCo.Ltd.--Traditional-- High Interest|Domesticnon-state juridicalperson|0.35%||2,059,389|2,059,38||2,059,389||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|VANGUARDTOTALINTERNATIONAL STOCKINDEX FUND|Foreign legalperson|0.29%|1,695,900||1,695,900|||
|Dongguan TrustCo.,Ltd.—HongdeNo.5 AssembledFunds Trust Plan|Domesticnon-state juridicalperson|0.28%|1,640,298|1,640,29|1,640,298|||
|Strategic investors or the general||||||||
|legal person due to the placement of||||||||
|||Inapplicable||||||
|new shares become the top 10||||||||
|shareholders (if any) (note 3)||||||||
|||Sanonda Group Corporation and Celsius Property B.V. are related parties, and under the||||||
|||same control of China National Chemical Agrochemical Corporation, and are||||||
|Explanation on associated||acting-in-concert parties as prescribed in the Administrative Methods for Acquisition of||||||
|relationship or/and persons||Listed Companies. It is unknown whether the other shareholders are related parties or||||||
|||acting-in-concert parties as prescribed in the Administrative Methods for Acquisition of||||||
|||Listed Companies.||||||
|Particulars about shares held by top 10 shareholders not subject to trading moratorium||||||||
|||Number of shares held not subject to trading||||Type of share||
|Name of shareholder||||||||
|||moratorium at the end of the period||||Type of share|Number|
|SANONDA GROUPCORPORATION||119,687,202||||RMB ordinary||
||||||||119,687,202|
|||||||share||
|Celsius Property B.V.||62,950,659||||Domestically||
|||||||listed foreign|62,950,659|
|||||||share||
|GUOTAI JUNANSECURITIES(HONGKONG)LIMITED||4,514,761||||Domestically||
|||||||listed foreign|4,514,761|
|||||||share||
|STATE-OWNED ASSETSADMINISTRATION BUREAU OFQICHUN COUNTY||4,169,266||||||
|||||||RMB ordinary||
||||||||4,169,266|
|||||||share||
|Lai Qinrong||3,787,132||||RMB ordinary||
||||||||3,787,132|
|||||||share||
|NORGES BANK||2,634,504||||Domestically||
||||||||2,634,504|
|||||||listed foreign||

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||
|-|-|-|-|
|||share||
|Dongguan Trust Co., Ltd.—HongdeNo.6 Assembled Funds Trust Plan|2,180,886|RMB ordinary||
||||2,180,886|
|||share||
|China Ping An Life Insurance Co.Ltd.--Traditional-- High InterestInsurance products|2,059,389|||
|||RMB ordinary||
||||2,059,389|
|||share||
|VANGUARD TOTALINTERNATIONAL STOCK INDEXFUND|1,695,900|Domestically||
|||listed foreign|1,695,900|
|||share||
|Dongguan Trust Co., Ltd.—HongdeNo.5 Assembled Funds Trust Plan|1,640,298|RMB ordinary||
||||1,640,298|
|||share||
|Explanation on associated||||
|relationship among the top ten||||
||Sanonda Group Corporation and Celsius Property B.V. are related parties, and under the|||
|shareholders of tradable share not||||
||same control of China National Chemical Agrochemical Corporation, and are|||
|subject to trading moratorium, as||||
||acting-in-concert parties as prescribed in the Administrative Methods for Acquisition of|||
|well as among the top ten||||
||Listed Companies. It is unknown whether the other shareholders are related parties or|||
|shareholders of tradable share not||||
||acting-in-concert parties as prescribed in the Administrative Methods for Acquisition of|||
|subject to trading moratorium and top||||
||Listed Companies.|||
|ten shareholders, or explanation on||||
|acting-in-concert||||
|Particular about shareholder||||
|participate in the securities lending||||
||Inapplicable|||
|and borrowing business (if any)||||
|( note 4)||||

Did any shareholder of the top 10 common shareholders and top 10 shareholders holding not subject to trading moratorium the Company carries out an agreed buy-back in the reporting period?
□ Yes√ No
There was no shareholder of the top 10 common shareholders and top 10 shareholders holding not subject to trading moratorium the Company carries out an agreed buy-back in the reporting period
2. Controlling shareholders of the company
Legal person
|||||||
|-|-|-|-|-|-|
||Legal|||||
|Name of actual|representative/resp|Date of|Code of|||
|||||Registered capital|Main business|
|controller|onsible person of|establishment|organization|||
||unit|||||
||||||Pesticides and|
|Jingzhou Sanonda|||||chemicals, chemical|
||Li Zuorong|22 Jun. 1994|17898778-9|RMB 240,061,000||
|Co.,Ltd.|||||fertilizer, veterinary|
||||||drug, feedstuff and|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|||chemical products;|
|||production and|
|||operation of|
|||thermoelectricity;|
|||medical product,|
|||circulation of|
|||agricultural product,|
|||development of real|
|||estate, agent and import|
|||& export of goods and|
|||technology (excluding|
|||goods or technology|
|||banned or limited to be|
|||imported and exported|
|||by the country)|
|Future development|||
||N/A||
|strategy|||
|Operating results,|||
|financial situation, cash|The Company realized the operation income of RMB 3,134,000,000 of 2014, the net profits of RMB||
|flow and future|525,000,000; the total assets of RMB 3 006,000,000 of 2014, the net assets of RMB 1,893,000,000 and||
|development strategy,|the net amount of cash flow of RMB 654,000,000.(the above data without audit).||
|etc.|||
|Equity of shareholding|||
|and participating shares|||
|of controlling|||
|shareholders in other|Inapplicable||
|domestic and foreign|||
|listed company during|||
|the reporting period|||

Changes of controlling shareholders during the reporting period
□ Applicable√ Inapplicable
There was no change of controlling shareholders during the reporting period
3. Actual controller of the Company
Legal person
|||||||
|-|-|-|-|-|-|
||Legal|||||
|Name of actual|representative/resp|Date of|Code of|||
|||||Registered capital|Main business|
|controller|onsible person of|establishment|organization|||
||unit|||||
|State-owned Assets||||||
||-|-|-|-|-|
|Supervision and||||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||
|-|-|
|Administration||
|Commission||
|Future development||
||Inapplicable|
|strategy||
|Operating results,||
|financial situation, cash||
|flow and future|Inapplicable|
|development strategy,||
|etc.||
|Equity of shareholding||
|and participating shares||
|of actual controllers in||
|other domestic and|Inapplicable|
|foreign listed company||
|during the reporting||
|period||

Changes on actual controller during the reporting period
□ Applicable√ Inapplicable
There was no change of actual controlling shareholders during the reporting period
Block diagram of equity and control relationship between the company and actual controller
2014 Annual Report of Hubei Sanonda Co., Ltd. State-owned Assets Supervision and Administration Commission of the State Council
100%
China National Chemical Corporation
100%
China National Agrochemical Corporation
100%
CNAC International Company Limited
100%
100%
CNAC International Pte., Ltd. Jingzhou Sanonda Holdings Co., Ltd.
60%
20.15%
ADAMA Agrochemical Solutions Ltd.
Hubei Sanonda Co., Ltd.
100% 100%
10.6%
Makhteshim Agan
99.99% 0.01%
ADAMA Celsius B.V
The actual controller controls the Company via trust or other ways of asset management
□ Applicable√ Inapplicable
4. Particulars about other corporate shareholders with shareholding proportion over10%
√Applicable□ Inapplicable
|||||||
|-|-|-|-|-|-|
||Legal|||||
||representative|Date of||||
|Name of institutional|||||Main business or|
||/responsible|establishm|Code of organization|Registered capital||
|shareholder|||||management activity|
||person of the|ent||||
||unit|||||
||||||wholesale of base and|
|||24 Dec.||||
|ADAMA Celsius B.V.|Inapplicable||Inapplicable|18,045.45Euro|agricultural chemical|
|||1987||||
||||||products|

 IV. Particulars on shareholding increase scheme during the reporting period proposed or
implemented by the shareholders and act-in-concert persons
Within the scope of the Company known, there was no shareholding increase scheme during the reporting period proposed or
2014 Annual Report of Hubei Sanonda Co., Ltd. implemented by the shareholders and act-in-concert persons
2014 Annual Report of Hubei Sanonda Co., Ltd. VII. Preferred stock
□ Applicable√ Inapplicable
There was no preferred stock during reporting period.
2014 Annual Report of Hubei Sanonda Co., Ltd. VIII. Directors, Supervisors, Senior Management Staffs and Employees
I. Changes in shareholding of directors, supervisors and senior management staffs
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Amount of|Amount of||
|||||||||shares|shares|Amount|
||||||||Shares||||
|||||||||increased|decreased|shares held|
|||Tenure||||Ending|held at the||||
|Name|Office title||Sex|Age|Start date|||at the|at the|at the|
|||status||||date|year-begin||||
|||||||||reporting|reporting|period-end|
||||||||(share)||||
|||||||||period|period|(share)|
|||||||||(share)|(share)||
||Chairman||||||||||
|Li|||||||||||
||of the|Current|Male|64|9 Jul. 2010|-|10,690|||10,690|
|Zuorong|||||||||||
||Board||||||||||
|Liu|Director,||||||||||
|||Current|Male|47|9 Jul. 2010|-|0|||0|
|Anping|GM||||||||||
|He|Director,||||||||||
|||Current|Male|59|9 Jul. 2010|-|0|||0|
|Xuesong|CFO||||||||||
||Director,||||||||||
|Yin Hong|Deputy|Current|Male|47|9 Jul. 2010|-|0|||0|
||GM||||||||||
||Director,||||||||||
|Xie|||||24 Jan.||||||
||Deputy|Current|Male|47||-|0|||0|
|Chengli|||||2013||||||
||GM||||||||||
|Ai|Independe||||||||||
|||Current|Male|46|9 Jul. 2010|-|0|||0|
|Qiuhong|nt Director||||||||||
|Zhang|Independe||||||||||
|||Current|Female|50|9 Jul. 2010|-|0|||0|
|Huide|nt Director||||||||||
||Independe||||||||||
|Li Dejun||Current|Male|57|9 Jul. 2010|-|0|||0|
||nt Director||||||||||
|Liu|Assistant||||11 May||||||
|||Current|Male|36||-|0|||0|
|Jianhua|to GM||||2012||||||
|Liu|Assistant||||06 Jan.||||||
|||Current|Male|39||-|28,500|||28,500|
|Zhiming|to GM||||2013||||||
|Jiang|Chief of||||||||||
||||||6 Jan.||||||
|Chenggan|the|Current|Male|40||-|0|||0|
||||||2013||||||
|g|Supervisor||||||||||
|Liu Jun|Supervisor|Current|Female|53|26 Feb.|-|4,100|||4,100|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||||2010||||||
|Zhou|||||26 Feb.|26 Feb.|||||
||Supervisor|Current|Male|45|||0|||0|
|Cheng|||||2010|2015|||||
||||||6 Jan.||||||
|Fu Loping|Supervisor|Current|Male|49||-|0|||0|
||||||2013||||||
|Ding|||||24 Jan.||||||
||Supervisor|Current|Male|52||-|0|||0|
|Shogun|||||2013||||||
||Secretary||||||||||
|Li Shangri|to the|Current|Male|44|9 Jul. 2010|-|0|||0|
||Board||||||||||
|Total|--|--|--|--|--|--|43,290|0|0|43,290|

 II. Post-holding situation
Main working experience of current directors, supervisors and senior management staffs over the past five years: Main working experience of current directors, supervisors and senior management staffs over the past five years: Mr. Li Zuorong, has been acting as Chairman of the Board and Secretary of the CPC of the Company since Dec. 2005.
Mr. Liu Anping, worked as the Director and Assistant to GM of the Company from Dec. 2005 to Aug. 2006; acted as the Director and Standing Deputy General Manager of the Company from Aug. 2006 to May 2012; and he has been the Director and GM of the Company since May 2012.
Mr. He Xuesong, has been the Director and CFO of the Company since Dec. 2005.
Mr. Yin Hong, acted as the Director of the Company from Aug. 2006 to Jan. 2013; and he has been the Director and Vice GM of the Company since Jan. 2013.
Mr. Xie Chengli, acted as General Manager and Chairman of the Board of Directors of Hubei Sanonda Tianmen Agrochemical Co., Ltd from Jan. 2006 to Feb. 2009; worked as Assistant to General Manager of the Company from Feb. 2009 to Jan. 2013; and he has been the Director and Vice GM of the Company since Jan. 2013. Mr. Ai Qiuhong has been a teacher of Xiangtan University since 2003. From Sep. 2005 to Jun. 2008, he was a doctor scholar in Xiangtan University majored in chemical engineering and received doctor degree in Jun. 2008. He has been acted as Independent Director of the Company since Feb. 2010.
Ms. Zhang Huide, associate professor of Zhongnan University of Economics and Law, supervisor of postgraduate, a CPA, member of Accounting Society of China, committee of Accounting Computerization Commission of Department of Finance of Hubei Province, training teacher for primary and intermediate accounting computerization. She is a teacher for Auditing skill applied in accounting computerization in national tax and local tax and has been involving in accounting computerization, teaching and research of ERP accounting information system as well as its actual application for many years. Now she act as independent director of Golden LaserCo.,Ltd.，Fubon Stock, TECH Stock. She has been acted as Independent Director of the Company since Jul. 2010.
Mr. Li Dejun, born in 1957, Master degree, he successively acted as Chief Officer, Deputy Chief, Chief of CCNU and Research Institute of Wuhan Province Commission for Restructuring Economic System and Editor in Chief of Overview of Private Economy, Secretary General of Research Institute of Hubei Province Commission for
Restructuring Economic System and Hubei Province Culture and Economy Research Society, Chief of Hubei
2014 Annual Report of Hubei Sanonda Co., Ltd. Regional Economic Development Research Center as well as Independent Director of Chutian High-speed, Angel Yeast, Xingfu Industry and so on. He has been acted as Independent Director of the Company since Jul. 2010. Mr. Liu Jianhua, acted as the Team Leader of the Creative Laboratory of Hanmi Pharm. Co., Ltd. from Jul. 2007 to Mar. 2008; acted as the Director of the Planning& Development Department of China National Agrochemical Corporation from Mar. 2008 to Mar. 2011; acted as the interim Secretary of CYL Committee of China National Agrochemical Corporation from Mar. 2011 to Mar. 2012; acted as the Assistant to GM of Sanonda Group Co., Ltd. from Mar. 2012 to May 2012; and he has been the Assistant to GM of the Company since May 2012. Mr. Liu Zhiming, acted as the Factory Director and Party Branch Secretary of the Pesticide
1st
Plant of the Company from Jan. 2007 to Dec. 2012; and he has been the Assistant to GM of the Company since Jan. 2013. Mr. Jiang Chenggang, acted as the Supervisor, Deputy Director of the Office and Deputy Secretaries of the Discipline Inspection Commission of the Company from Jun. 2006 to Jun. 2012; acted as the Chairman of the Labor Union, Supervisor, Deputy Director of the Office and Deputy Secretaries of the Discipline Inspection Commission of the Company from Jun. 2012 to Dec. 2012; and he has been the Chairman of the Labor Union, Supervisor and Deputy Secretaries of the Discipline Inspection Commission of the Company since Jan. 2013. Ms. Liu Jun, has acted as Deputy General Manager of Financial Company and Chief of Capital Accounting Department of the Company since Feb. 2007. She also has been Supervisor of the Company since Jun. 2003. Mr. Zhou Cheng, successively took the posts of Vice Factory Director and Factory Director of the Pesticide 5th Plant of the Company, Factory Director and Secretary of Party Branch of the Pesticide
2nd
Plant of the Company from Feb. 2000 to Dec. 2009; and he acted as Employee Supervisor of the Company, Factory Director and Secretary of Party Branch of Pesticide
2nd
Plant of the Company from Dec. 2009 to Dec. 2012; and he has been the Supervisor and Chief of the Scheduling Division of the Production Department of the Company since Jan. 2013.
Mr. Fu Liping, acted as the Vice Factory Director and Factory Director of the Pesticide
3rd
Plant of the Company from Jan. 2007 to Dec. 2012; and he has been the Employee Supervisor and Factory Director of the Pesticide 4th Plant of the Company since Jan. 2013 and employee Supervisor and Factory Director of the Pesticide
3rd Plant of the Company since Jan. 2014
Mr. Ding Shaojun, acted as the Vice GM and GM of the Sales Company of the Company from Jul. 2001 to Jun. 2009; and acted as the GM and Secretary of Party Branch of the Thermoelectricity Company of the Company from Jul. 2009 to Dec. 2012; and he has been the Supervisor of the Company, GM and Secretary of Party Branch of the Thermoelectricity Company of the Company since Jan. 2013.
Mr. Li Zhongxi, has been the Secretary to the Board of Directors and the Office Chief of the Company since Feb. 2000.
Post-holding inshareholders’ units
√Applicable□Inapplicable
|||||||
|-|-|-|-|-|-|
|Name of the||||||
|||Position in||||
|person holding|||||Receives payment|
|||the|Beginning date|Ending date of||
|any post in any|Name of the shareholder unit||||from the shareholder|
|||shareholder|of office term|office term||
|shareholder|||||unit?|
|||unit||||
|unit||||||
|||Executive||||
|||Director, GM||||
|Li Zuorong|Sanonda Group Co., Ltd.|and Secretary|1 May 2012||No|
|||of Secretary||||
|||of CPC||||
|||Vice||||
|Liu Anping|Sanonda Group Co., Ltd.||1 May 2012||No|
|||Secretary of||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||
|-|
|CPC|

Post-holding in other units
√Applicable□Inapplicable
|||||||
|-|-|-|-|-|-|
|Name of the||||||
|person holding||||||
||Name of other unit|Position in|Beginning date|Ending date of|Receives payment|
|any post in||other unit|of office term|office term|from other unit?|
|other units||||||
|Li Zuorong|Sanonda Foreign Trade Co., Ltd.|Director|1 Dec. 2005||No|
|Yin Hong|Jingzhou Hong Xiang Chemical Co., Ltd.|Director|1 Apr. 2007||No|
|Ai Qiuhong|Xiangtan University|Professor|1 Jan. 2003||Yes|
||Zhongnan University of Economics and|Vice||||
|Zhang Huide|||1 Oct. 2002||Yes|
||Law|Professor||||
|||Independent||||
|Zhang Huide|Wuhan Golden Laser Co.,Ltd.||1 Apr. 2009||Yes|
|||director||||
|||Independent||||
|Zhang Huide|Hubei Fubon Technology Co., Ltd.||1 Feb. 2011||Yes|
|||director||||
|||Independent||||
|Zhang Huide|TECH Semiconductors Co., Ltd||6 Jan. 2015||Yes|
|||director||||
||The Economic System Reform Institute of|Secretary-gen||||
|Li Dejun|||1 Dec. 2009||No|
||Hubei Province|eral||||
|||Independent||||
|Li Dejun|Angel Yeast Co., Ltd.||18 Apr. 201||Yes|
|||director||||
|||Independent||||
|Li Dejun|Chutian Expressway Co., Ltd.||1 Jun. 2010||Yes|
|||director||||
|Notes to||||||
|post-holding in||||||
||No|||||
|shareholder’s||||||
|unit||||||

III. Remuneration for directors, supervisors and senior management staffs
Decision-making procedure, determining basis and actual payment for the remuneration of directors, supervisors and senior management staffs
In 2013 the second temporary shareholders' meeting the Company considered and approved The Appraisal Scheme for Implementing Remuneration of Directors, Supervisors and Senior Management Staffs drew up standing principle of the remuneration of senior management staffs, meanwhile, the appraisal index of operation achievements or management duties for senior management is in accordance with the annual operating target, while at the end of the year, the Board appraised Senior management staffs based on the work report and business
achievement of Senior management staffs.
2014 Annual Report of Hubei Sanonda Co., Ltd. Independent directors would not enjoy salary in the Company while the Company would drop annual allowance (after tax) of RMB 50,000 to independent directors respectively. Independent directors would present relevant meetings, perform responsibilities according to Articles of Association and apply for allowance factually. Annual salary for supervisors was paid according to their posts.
Remuneration of the directors, supervisors and senior management staffs of the Company during the reporting period
Unit: RMB Ten thousand Yuan
|||||||||
|-|-|-|-|-|-|-|-|
|||||||Total||
||||||Total||Actual|
|||||||remuneration||
||||||remuneration||remuneration|
|Name|Position|Sex|Age|Tenure status||gained from||
||||||gained from the||gained at the|
|||||||shareholder’s||
||||||Company||period-end|
|||||||unit||
||Chairman of|||||||
|Li Zuorong||Male|64|Current|38|0|38|
||the Board|||||||
|Liu Anping|Director, GM|Male|47|Current|34|0|34|
|He Xuesong|Director, CFO|Male|59|Current|31|0|31|
||Director,|||||||
|Yin Hong||Male|47|Current|31|0|31|
||Deputy GM|||||||
||Director,|||||||
|Xie Chengli||Male|47|Current|31|0|31|
||Deputy GM|||||||
||Independent|||||||
|Ai Qiuhong||Male|46|Current|5|0|5|
||Director|||||||
||Independent|||||||
|Zhang Huide||Female|50|Current|5|0|5|
||Director|||||||
||Independent|||||||
|Li Dejun||Male|57|Current|5|0|5|
||Director|||||||
||Assistant to|||||||
|Liu Jianhua||Male|36|Current|26|0|26|
||GM|||||||
||Assistant to|||||||
|Liu Zhiming||Male|39|Current|26|0|26|
||GM|||||||
|Jiang|Chief of the|||||||
|||Male|40|Current|26|0|26|
|Chenggang|Supervisor|||||||
|Liu Jun|Supervisor|Female|53|Current|13|0|13|
|Zhou Cheng|Supervisor|Male|45|Current|13|0|13|
|Fu Liping|Supervisor|Male|49|Current|13|0|13|
|Ding Shaojun|Supervisor|Male|52|Current|13|0|13|
||Secretary to the|||||||
|Li Zhongxi||Male|44|Current|24|0|24|
||Board|||||||
|Total|--|--|--|--|334|0|334|

Particulars about the equity incentives awarded for the directors, supervisors and senior management of the Company
2014 Annual Report of Hubei Sanonda Co., Ltd. IV. There was no change in Directors, Supervisors and Senior Executives in reporting period V. Particulars about changes in core technical team or key technicians during the reporting period (not directors, supervisors or senior management staffs)
□ Applicable√ Inapplicable
VI. About employees
(I) As at 31 Dec. 2014, the Company totally had 2056 employees in service, and has to undertake partial expenses for 1290 retired workers. The Company executed overall labor contract system, and carried out relevant provisions stipulated by the state as well as local laws and statutes. Expenses for retirees were all paid by society.
(II) Specialty classification of employees:
|||
|-|-|
|Specialty category|Number|
|Production personnel|1501|
|Technical personnel|260|
|Financial personnel|23|
|Sales personnel|58|
|Administrative personnel|214|

Pie chart of specialty classification of employees
||
|-|
|Production personnel|
|Technical personnel|

Financial personnel
||
|-|
|Sale personnel|
|Administrative personnel|

(III) Education classification of employees:
|||
|-|-|
|Education|Number|
|Master|15|
|Bachelor|385|
|Junior college|529|
|Other|1127|

2014 Annual Report of Hubei Sanonda Co., Ltd. Pie chart of education classification of employees
||
|-|
|Master|
|Bachelor|

Junior college
Other
(IV)Employee’s remuneration policy
The Company firstly reset the positions and personnel as well as adjusted the wage structure, set up
Salary Management Regulations of 2014 and strengthenedstaffs’ position performance appraisal. Secondly, adjust the basic wage and post performance salary. Thirdly, established legal holiday overtime management regulations, according to the standard prescribed by the national legal holiday overtime pay.
(V)Employee’s training plan and relevant situation
According to the needs of production and operation, the Company promulgated the annual training plan, held the new “three rules” training for production personnel, training for chemical analysts, pre-post training for new employees and remote training for team leader as well as started up the “S.H.E” training work; besides, it strengthened the education on safety& environmental protection for the teams of workshop and training for key position& special position, and required all the personnel in special position or operating hazardous chemicals to work with relevant certificate, so as to ensure the normal operation of the production and operation of the Company.
2014 Annual Report of Hubei Sanonda Co., Ltd. Section IX. Corporate Governance
I. Basic information of corporate governance
During the reporting period, the Company continuously improved the awareness of corporate governance and corporate governance structure and perfected the corporate system as well as standardized the operation of the Company, promoted internal control activities, and constantly improve the Company's management levels stringently according to requirements of relevant laws and regulations like the Company Law, Securities Law, and Corporate Governance Principle of Listed Company, as well as Rules for Listing Shares in Shenzhen Stock Exchange. During the reporting period, the Company set up “Management System of Change of Share Holding in Directors, Supervisors and Senior Managers "and" Media Questioned Response System of the Company”, and Revised the Remuneration and Appraisal Plan of Directors and Senior Management, and Perfected the Management System of Related transaction, etc according to announcement On Further Strengthening the Disclose Internal Management. During reporting period, the Company set up “Response System to Media Question” According to "Listed Company's Articles of Association Guidelines (Revised in 2014) and the Rules of the General Meeting of Shareholders of Listing Company (Revised in 2014)" issued by the China Securities Regulatory Commission. During the preparation of the report, “the Articles of Association” of the Company, "the Rules of Procedure of the Shareholders' General Meeting" was revised
Whether it exists any difference between the corporate governance and the Company Law and relevant rules of CSRC or not?□ Yes√ No
There is no difference between the corporate governance and the Company Law and relevant rules of CSRC.
Progress of corporate governance activities, promulgation and implementation of Registration System for Information Insiders During the reporting period, the Company actively take part in Standard operation, internal control, information disclosure etc. training activities organized by Securities Regulatory Bureau of Hubei Province, Association of Listed Company and SZSE, and continuously strengthen the learning of Directors, Supervisors and Senior Managers and information disclosure staffs, timely follow up new laws and regulations related to standardized operation of listed company, In the operation of the Company, and transaction with related parties, the Company seriously in line with the related regulations of standard operation instructions of listed company, the Company strictly enforce vindicate the independence of listed company . as for the inevitable related transactions, the Company strictly implemented relevant decision-makingprocesses，ensured the fairness of the related transactions, and implemented the information disclosureobligation，ensure standard operation of the Company. According to rules about the listed company establish the management system of the insider information source registration (SFC announcement No.[2011]30) issued by CSRC, the Company held the 10th Meeting of the Sixth Session of Board of Director, the meeting reviewed and approved the revision of Insider Information Source Registration Management System on 14 Mar. 2012, for details, refer to www.cninfo.com.cn on 16Mar. 2012 During the reporting period, while the Company planning significant asset reorganization and preparing periodical reports. It actively organized its directors, supervisors and senior management staffs to attend relevant trainings of CSRC Hubei Bureau, meanwhile, standardized relevant behaviors regarding reporting relevant information to the outside and external information users using theCompany’s information. After self-examination, no information insider was found to trade theCompany’s shares by using the insider information or during the sensitive period, no been investigated and rectified by the supervision department.
II. Particulars about annualshareholders’ general meeting and specialshareholders’ general meeting held during the reporting period
1. Particulars about annualshareholders’ general meeting held during the reporting period
|||||||
|-|-|-|-|-|-|
|Session|Convening date|Name of proposal|Resolution|Disclosure date|Disclosure index|

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||||
|-|-|-|-|-|-|
|||1. Annual Work Report of||||
|||the Board 2013; 2. Annual||||
|||Work Report of the||||
|||Supervisory Board 2013; 3.||||
|||Annual Financial||||
|||Statement Report 2013; 4.||||
|||Annual Report and Its||||
|||Abstract 2013; 5. Annual||||
|||Profit Distribution Plan||||
|||2013;|||Announcement on|
|||6. Proposal of 2014 the|||Resolutions Made at|
|||Company Apply to the|||the 201 3 Annual|
|2013 Annual||Bank Credit For Working|All the proposals||Shareholders’|
|Shareholders’|28 Mar. 2014|Capital Loans of Rmb 1.59|were approved at|29 Mar. 2014|General Meeting|
|General Meeting||Billion (Including Bank|the session||(Announcement No.:|
|||Acceptance) and Authorize|||2014-12) was|
|||the Chairman of the Board|||published on|
|||of Directors of the|||www.cninfo.com.cn|
|||Company Approval Within||||
|||Credit Line During the||||
|||Year.7. Proposal of the||||
|||wholly owned subsidiary||||
|||Hubei Sanonda Foreign||||
|||Trade Co., Ltd., providing||||
|||RMB 349 million||||
|||maximum amount||||
|||guarantee||||

2. Particulars about specialshareholders’ general meeting held during the reporting period
|||||||
|-|-|-|-|-|-|
|Session|Convening date|Name of proposal|Resolution|Disclosure date|Disclosure index|
|||1. Proposal of 2014||||
|||Daily Related||||
|||Transaction Plan|||Announcement on|
|||2. Proposal of the|||Resolutions Made at|
|||Company increase|||the First Special|
|The First Special|||The second bill was|||
|||deposit limit in|||Shareholders’|
|Shareholders’|||defeated, others were|||
||30 Jun. 2014|related party||1 Jul. 2014|General Meeting for|
|General Meeting for|||approved at the|||
|||China National|||2014(Announcement|
|2014|||session|||
|||Chemical|||No.: 2014-24) was|
|||Financial Co.,|||published on|
|||Ltd., 3. Proposal|||www.cninfo.com.cn|
|||of the shareholder||||
|||celsius property||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||||
|-|-|-|-|-|-|
|||B.V. propose||||
|||hiring Rui Hua||||
|||Certified Public||||
|||Accountants||||
|||(LLP) to audit and||||
|||review||||
|||Company's 2014||||
|||Quarter Report||||
|||Financial||||
|||Statements and||||
|||2014 Annual||||
|||Report||||
|||1. Proposal About||||
|||Hiring Rui Hua|||Announcement on|
|||Certified Public|||Resolutions Made at|
|||Accountants (LLP)|||the Second Special|
|The Second Special||||||
|||As the Company's|All the proposals||Shareholders’|
|Shareholders’||||||
||31 Dec. 2014|2014 Annual|were approved at the|5 Jan. 2015|General Meeting for|
|General Meeting for||||||
|||Financial Statements|session||2014(Announcement|
|2014||||||
|||Audit Institutions|||No.: 2014-40) was|
|||and the Internal|||published on|
|||Control Audit|||www.cninfo.com.cn|
|||Institutions||||

3. Preferred shareholders with the recovery of voting right request for an special shareholders' meeting□ Applicable√ Inapplicable
III. Performance of the Independent Directors during the Reporting Period
1. Particulars about the independent directors attending the board sessions and theshareholders’ general meetings
||||||||
|-|-|-|-|-|-|-|
|Particulars about the independent directors attending the board sessions|||||||
|||||||Failing to present|
||||Presence by||||
|Name of independent|Due presence|Presence in||Entrusted||in person for two|
||||telecommunicati||Absence (times)||
|directors|(times)|person (times)||presence (times)||consecutive|
||||on (times)||||
|||||||sessions or not|
|Ai Qiuhong|9|6|3|0|0|No|
|Zhang Huide|9|6|3|0|0|No|
|Li Dejun|9|6|3|0|0|No|
|Presence of independent directors in||3|||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||
|-|
|shareholders’ general meeting (times)|

Explanation on failing to present in person for two consecutive sessions
Inapplicable
2. Particulars about independent directors propose objection on relevant events
Whether independent directors propose objection on relevant events or not?
□ Yes√ No
The independent directorsdidn’t propose objection on relevant events during the reporting period.
3. Other explanation on performance of independent directors
Whether the advices of independent directors for the Company were adopted or not?
√ Yes□ No
Explanation on the advices of independent directors for the Company being adopted or not adopted
During the reporting period, the Company independent director according to the Company Law, the Listed Corporate Governance Standards, "Articles of Association" and "Company of the Independent Director System” focused on the Company operation actively, independently perform their duties, put forward lot of valuable professional suggestions to the company's information disclosure, complete system and daily management decision-making, etc. issue the independent and impartial advice to related transaction, hiring annual audit institutions, guaranty matters and other events need advice of the independent director, play a proper role in improving the supervision of company safeguard the legitimate rights and interests of company and all shareholders.
IV. Performance of the Special Committees under the Board during the reporting period (I) Duty performance of the Audit Committee under the Board:
According to regulations of CSRC and Shenzhen Stock Exchange, The Annual Work System of Independent Director and Detailed Rules for the Implementation of the Audit Committee of the Board of the Company, and based on the principle of faithfulness, the Company give full play to the supervisory function, during the reporting period mainly fulfill the following duties:
1. Daily work: A. Supervise and review the Company's financial information and its disclosure. B. Supervise the Company's internal audit system and its implementation. C. Review whether theCompany’s establish a sound internal control system and its implementation. D. Supervise the communication between internal audit and external audit:
2. Related work of the annual report in 2013
In theCompany’s 2013 annual report audit process, the Audit Committee of the Board according to the requirements of Procedure for Audit Committee Concerning Annual Audit Work, do the following works: A. Before the entry of the accountants, the Audit Committee of the Company reviewed the Company's financial and accounting reports which formed a preliminary examination opinion, the Audit Committee of the Company conducted full communication with the annual auditor on the audit schedule and the audit tips, etc
B. After the entry of the accountants, Audit Committee of the Company conducted the on-site communication with the certified public accountants on the audit plan and problems discovered in auditing significant events, supervise and urge them to submit audit report within the prescribed time. After the initial audit opinions issued by certified public accountants of the Company, the Audit Committee review the 2013 Annual Financial and Accounting.
C. Certified public accountants issued the standard without reservations opinions of theCompany’s 2013 Annual Audit Report, the
Audit Committee review the audit report and held meeting again, after carefully examined, all of the Audit Committee approved the
Company’s 2013 Annual Financial and Accounting Report and submitted to the Company's board of directors.
2014 Annual Report of Hubei Sanonda Co., Ltd. (II) Duty performance of the Remuneration& Appraisal Committee under the Board:
During the reporting period, the Remuneration& Appraisal Committee of the Company examined Proposal of the Remuneration of the Directors, Supervisors and Senior Management Staffs of the Company in 2013, evaluate annual performance of their duties of the directors, supervisors and senior management staffs of the Company, put forward the Company senior management staffs performance incentives and submitted to the board of directors of the Company.
(III) Duty performance of the Nomination Committee under the Board:
In accordance with theCompany’s Articles of Association and Rules for Nomination Committee under the Board, theCompany’s Nomination Committee carefully examined the senior management staffs engaged during the reporting period, further perfecting the corporate governance structure; standardize the Company directors and managers hiring procedure.
(IV) Duty performance of Strategy Committee under the Board:
During the reporting period, Strategy committee, in accordance with the Company the implementation details the strategy committee of the board to perform his duties; to enhance the competitiveness; the Strategy Committee studied long-term development strategic planning and put forward suggestions for the Company.
Notes: the Company shall disclose the significant opinions and advices provided by special committee of the board of directors. V. Performance of the Supervisory Committee
Whether the Supervisory Committee finds the Company existing risks or not in the supervisory activities during the reporting period?□ Yes√ No
The Supervisory Committee has no objection on the supervised events during the reporting period
VI. Particulars about theCompany’s “five-separation” from the controlling shareholder in respect of business, personnel, assets, organization and financing
The Company and controlling shareholder in the business, finance, personnel, assets and institutions did completely separate, has the independent business and independent operating ability.
1. In the aspect of personnel: the Company and controlling shareholder are mutually independent in the labor, personnel and salary management, the Company general manager, deputy general manager and other senior management personnel get the salary in the Company, and not perform administrative work in the controlling shareholder unit.
2. In the aspect of assets: the Company's production system, auxiliary systems and facilities property rights belong to the Company and have registered trademark and other intangible assets in law; the Company has independent procurement and sales system, The Company's assets relationship between the controlling shareholder and the Company was clear, there was no such thing as a free possession or usage.
3. In the aspect of finance: the Company was equipped with independent financial department, the Company set up independent accounting system, the system of financial management and independent bank account.
4. In the aspect of institution: the Company set up independent controlling shareholder of the organization, the Company's board of directors, board of supervisors and internal management institutions operated independently.
5. In the aspect of business: the Company had a complete business system and independent operation. There was no competition between the controlling shareholders.
Notes: the Company shall explain those can't guarantee independence or keep independent operation with the controlling shareholder in the business, finance, personnel, assets, organizations.
2014 Annual Report of Hubei Sanonda Co., Ltd. VII. Particulars on horizontal competition
The Company has horizontal competition against the related parties under the same control of China National AgrochemicalCorporation—Shandong Dacheng Pesticide Co., Ltd. and Jiangsu Anpon Electrochemical Co., Ltd on the sales of DDVP, paraquat and chlor-alkali, etc., which amount involved accounted for a low proportion to operating revenue of the Company. Meanwhile, target sales regions of the Company differed from them, and then there was no important influence on the Company due to apparent competition.
In 2013, Celsius Property B.V.（purchaser）implement tender offer to Sanonda B, The Company and its indirect controlling shareholders Makhteshim-Agan Industries Ltd. and China National Chemical Corporation made corresponding commitments upon events like avoiding horizontal competition and standardizing related transactions. Details are in section 5 Important Events of the report.
VIII. Performance appraisal and incentive system for senior management staffs
In respect of the appraisal for senior management staffs, the Company is mainly in accordance with the annual business performance and performance of personal duties to realize annual remuneration to senior management staffs. And the Companyhasn’t conducted any equity incentive plan recently. The Company will, in line with market-oriented principles, constantly perfect appraisal and incentive mechanism, closely link remuneration of senior management staffs with administration level and business performance, fully arouse and motivate enthusiasm and creativity of senior management staffs, and maximizeshareholder’s value as a result.
2014 Annual Report of Hubei Sanonda Co., Ltd. Section X. Internal Control
I. Construction of internal control of the Company
Since 2007 the Company began to establish internal control system; since 2009 continue to release the internal control evaluation report. In 2011, the Company hired a specialized intermediary institution and set up internal control team, formulated and published the "Standard of Internal Control Implementation Plan" (had examined and passed by the 8th Meeting of the Sixth Session of the Board of Directors). In 2012, the Company issued and implemented “the System of Internal Control Assembly "and" Internal Control Management Manual" examined and passed by the 16th Meeting of the Sixth Session of the Board of Directors. In 2013 the Company began to hire auditors to audit the Company internal control and issue the Internal Control Auditing Report. With the increasingly perfect of the internal control system of the Company, the Company has formed all aspects of the complete system strict internal control system of the corporate governance, internal audit, management of finance, production, supply, human resources and so on.
During the reporting period, the Company in accordance with the "Internal Control Manual" proceed with the implementation of internal control and completed 2013 annual internal control self-assessment. Aim at the reflection of internal control problems business level, completed the 22 rectifications, revised and perfected the relevant internal control system.
II. Announcement from the Board to the responsibility of internal control
The Board of the Company and all directors guaranteed that the Self-appraise Report of Internal Control for 2013 does not contain any false or misleading statements or omit any material facts and hereby accept, individually and collectively, responsibility for the truth, accuracy and completeness of the contents of this report.
In accordance with the provisions of the system of internal control, it is the responsibility of the Board of the Company to establish, to perfect as well as to effective conduct internal control. Managers shall be responsible for the organization of the leading daily operation ofCompany’s internal control.
III. Basis on establishing the internal control for financial report
The Company established the internal control for financial report according to the Enterprise Accounting Standards, Internal Control System and relevant regulations of the regulatory authorities. Besides,it’s also in accordance with the regulations and requirements of the Basic Rules for Enterprise Internal Control and Supporting Guidelines, Guideline on Internal Control for Listed Companies of Shenzhen Stock Exchange as well as the Internal Control Brochure of the Company and relevant supporting management systems and documents.
IV. Self-appraisal report on internal control
|||
|-|-|
|Particulars about significant defects of internal control found during the reporting period in the self-appraisal report on internal||
|control||
|According to the affirmation of material weakness in internal control of financial report, no material or significant weakness exists||
|in financial report. In reporting period. According to the affirmation of material weakness in internal control of non-financial report,||
|no material or significant weakness exists in non-financial report.||
|Disclosure date of the|12 Mar. 2015|

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||
|-|-|
|Self-appraisal Report on Internal||
|Control||
|Disclosure index of the||
|Self-appraisal Report on Internal|http://www.cninfo.com.cn|
|Control||

V.Auditor’s report on internal control or verification
Auditor’s report on internal control
|||
|-|-|
|Audit opinion paragraph in the Auditor’s Report for the Internal Control||
|We believe that the Company has maintained effective internal control on financial report in all significant respects according to the||
|Basic Rules for Enterprise Internal Control and relevant regulations on 31 Dec. 2014.||
|Disclosure date of the Auditor’s||
||12 Mar. 2015|
|Report on Internal Control||
|Disclosure index of the Auditor’s||
||http://www.cninfo.com.cn|
|Report on Internal Control||

Whether the CPAs firm issues anAuditor’s Report on Internal Control with non-standard opinion or not?
□ Yes√ No
Whether theAuditor’s Report on Internal Control from the CPAs firm is in consistent with the Self-appraisal Report from the Board or not?
√ Yes□ No
VI. Establishment and execution of rules of accountability for significant mistakes in annual report information disclosure
The Company has established Rules of Accountability for Significant Mistakes in Annual Report Information Disclosure (reviewed and approved on the 24th Session of the 5th Board of Directors), continued to enforced training ofemployee’s business knowledge and awareness of responsibility, improved information transfer, review and inspection, disclosure procedure, ensured the authenticity, accuracy and completeness of disclosed information, prevented material omissions, faulty events from happening. In the reporting period, there was no particular about correction of significant accounting errors or supplementation of significant information omission or correction on prediction of business earnings.
Section XI. Financial Report
I.Auditor’s report
|||
|-|-|
|Type of audit opinion|Standard unqualified audit opinion|
|Date for signing the auditor’s report|10 Mar. 2015|
|Name of the audit firm|Rui Hua China Certified Public Accountants (LLP)|
|Document Number of the auditor’s report|11|

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||
|-|-|
|Name of the CPA.|Kuang Xiaochang, Liu Hongping|

Text of theAuditor’s Report
Auditor’s Report
RUIHUAZi[201X]No. XXXXXX TO THE SHAREHOLDERS OF HUBEI SANONDA CO., LTD.
We have audited the accompanying financial statements of Hubei Sanonda Co., Ltd. (the “Company” or “Sanonda”) and its subsidiaries (hereinafter jointly referred to as “the Group”), which comprise the consolidated and theCompany’s balance sheets as at 31 Dec. 2014, the consolidated and theCompany’s income statements, the consolidated and theCompany’s statements of change in equity, the consolidated and theCompany’s cash flow statements for the year then ended, and notes to the financial statements. I. The managementlevel’s responsibility for the financial statements
The management of the Company is responsible for the preparation of these financial statements and fair presentation. These responsibilities include: (1) preparing financial statements according to the Accounting Standards for Business Enterprises and make them a fair presentation; and (2) designing, implementing and maintaining internal control relevant to the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
II.Auditor’s responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audit in accordance with Auditing Standards for CICPA. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit includes performing audit procedures, so as to obtain audit evidence to support the amounts and disclosures in the financial statements. Audit procedures are relied on theauditors’ judgments, including assessment on the risk of material misstatement of these financial statements arising from fraud or error. In risk assessment procedures, we consider internal controls relating to the preparation of these financial statements to design appropriate audit procedures. An audit also includes assessing the reasonability of accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statements presentation.
We believe that the audit evidence we have obtained is sufficient and effective, providing a reasonable basis for our opinion. III. Audit opinion
In our opinion, the financial statements comply with the Accounting Standards for Business Enterprises in all material respects and present fairly theGroup’s consolidated financial position as at 31 Dec. 2014 and its consolidated business results and cash flows for the year then ended, as well as theCompany’s financial position as at 31 Dec. 2014 and its business results and cash flows for the year then ended.
Rui Hua China Certified Public Accountants (LLP) CPA ofChina：Liu Hongping
Beijing·China CPA ofChina：Kuang Xiaochang
12 Mar. 2015
2014 Annual Report of Hubei Sanonda Co., Ltd. II. Financial statements
Monetary unit of notes to financial statements: RMB Yuan
1. Consolidated balance sheet
Prepared by Hubei Sanonda Co., Ltd.
31 Dec. 2014
Unit: RMB Yuan
||||
|-|-|-|
|Item|31 Dec. 2014|31 Dec. 2013|
|Current Assets:|||
|Monetary funds|423,347,736.46|414,065,921.21|
|Settlement reserves|||
|Intra-group lendings|||
|Financial assets measured at fair|||
|value of which changes are recorded in|||
|current profits and losses|||
|Derivative financial assets|||
|Notes receivable|2,874,466.50|41,103,985.15|
|Accounts receivable|195,635,912.75|209,166,447.16|
|Accounts paid in advance|19,444,766.16|43,042,028.26|
|Premiums receivable|||
|Reinsurance premiums receivable|||
|Receivable reinsurance contract|||
|reserves|||
|Interest receivable|||
|Dividend receivable|||
|Other accounts receivable|19,679,596.65|7,224,391.05|
|Financial assets purchased under|||
|agreements to resell|||
|Inventories|330,541,606.05|258,274,457.88|
|Assets held for sale|||
|Non-current assets due within 1 year|||
|Other current assets|||
|Total current assets|991,524,084.57|972,877,230.71|
|Non-current assets:|||
|Loans by mandate and advances|||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|granted|||
|Available-for-sale financial assets|9,153,782.63|9,153,782.63|
|Held-to-maturity investments|||
|Long-term accounts receivable|||
|Long-term equity investment|||
|Investing real estate|5,363,928.28|4,154,412.50|
|Fixed assets|1,248,826,394.76|1,324,222,385.03|
|Construction in progress|423,857,021.70|234,487,866.23|
|Engineering materials|88,970,010.63||
|Disposal of fixed assets|||
|Production biological assets|||
|Oil-gas assets|||
|Intangible assets|140,020,897.12|137,371,149.10|
|R&D expense|||
|Goodwill|||
|Long-term deferred expenses|||
|Deferred income tax assets|13,199,137.78|12,619,948.14|
|Other non-current assets|13,384,400.00|13,384,400.00|
|Total of non-current assets|1,942,775,572.90|1,735,393,943.63|
|Total assets|2,934,299,657.47|2,708,271,174.34|
|Current liabilities:|||
|Short-term borrowings|75,000,000.00|359,220,205.55|
|Borrowings from Central Bank|||
|Customer bank deposits and due to|||
|banks and other financial institutions|||
|Intra-group borrowings|||
|Financial liabilities measured at fair|||
|value of which changes are recorded in|||
|current profits and losses|||
|Derivative financial liabilities|||
|Notes payable|15,000,000.00|40,000,000.00|
|Accounts payable|216,786,274.77|156,037,973.10|
|Accounts received in advance|34,830,464.65|79,437,442.04|
|Financial assets sold for repurchase|||
|Handling charges and commissions|||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|payable|||
|Payroll payable|25,740,973.02|25,332,986.86|
|Tax payable|72,051,904.29|73,337,138.50|
|Interest payable|||
|Dividend payable|250,000.00|250,000.00|
|Other accounts payable|31,749,791.93|34,544,608.36|
|Reinsurance premiums payable|||
|Insurance contract reserves|||
|Payables for acting trading of|||
|securities|||
|Payables for acting underwriting of|||
|securities|||
|Liabilities held for sale|||
|Non-current liabilities due within 1|||
||500,000.00|77,390,000.00|
|year|||
|Other current liabilities|||
|Total current liabilities|471,909,408.66|845,550,354.41|
|Non-current liabilities:|||
|Long-term borrowings|431,590,000.00|296,090,000.00|
|Bonds payable|||
|Of which: preferred shares|||
|Perpetual bonds|||
|Long-term payables|650,000.00|650,000.00|
|Long-term payroll payables|||
|Specific payables|||
|Estimated liabilities|||
|Deferred income|22,754,814.82|19,538,888.89|
|Deferred income tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|454,994,814.82|316,278,888.89|
|Total liabilities|926,904,223.48|1,161,829,243.30|
|Owners’ equity:|||
|Share capital|593,923,220.00|593,923,220.00|
|Other equity instruments|||
|Of which: preferred shares|||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Perpetual bonds|||
|Capital reserves|263,184,043.66|263,184,043.66|
|Less: Treasury stock|||
|Other comprehensive income|||
|Specific reserves|15,425,099.43|16,059,288.71|
|Surplus reserves|178,048,385.86|126,334,248.31|
|Provisions for general risks|||
|Retained profits|957,050,401.65|546,688,770.98|
|Total equity attributable to owners of|||
||2,007,631,150.60|1,546,189,571.66|
|the Company|||
|Minority interests|-235,716.61|252,359.38|
|Total owners’ equity|2,007,395,433.99|1,546,441,931.04|
|Total liabilities and owners’ equity|2,934,299,657.47|2,708,271,174.34|

 Legal representative: Li Zuorong Person-in-charge of the accounting work: He Xuesong Chief of the accounting division: He Xuesong
2. Balance sheet of the Company
Unit: RMB Yuan
||||
|-|-|-|
|Item|31 Dec. 2014|31 Dec. 2013|
|Current Assets:|||
|Monetary funds|349,250,284.42|329,849,120.35|
|Financial assets measured at fair|||
|value of which changes are recorded in|||
|current profits and losses|||
|Derivative financial assets|||
|Notes receivable|2,874,466.50|41,103,985.15|
|Accounts receivable|360,573,034.99|193,013,915.85|
|Accounts paid in advance|18,069,109.19|42,670,595.78|
|Interest receivable|||
|Dividend receivable|||
|Other accounts receivable|76,252,385.90|144,872,701.27|
|Inventories|319,798,378.74|254,766,534.37|
|Assets held for sale|||
|Non-current assets due within 1 year|||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Other current assets|||
|Total current assets|1,126,817,659.74|1,006,276,852.77|
|Non-current assets:|||
|Available-for-sale financial assets|9,153,782.63|9,153,782.63|
|Held-to-maturity investments|||
|Long-term accounts receivable|||
|Long-term equity investment|55,526,635.41|55,526,635.41|
|Investing real estate|5,363,928.28|4,154,412.50|
|Fixed assets|1,091,620,961.82|1,153,224,118.73|
|Construction in progress|423,857,021.70|234,487,866.23|
|Engineering materials|88,970,010.63||
|Disposal of fixed assets|||
|Production biological assets|||
|Oil-gas assets|||
|Intangible assets|127,725,897.93|125,275,394.07|
|R&D expense|||
|Goodwill|||
|Long-term deferred expenses|||
|Deferred income tax assets|10,510,039.23|7,587,719.43|
|Other non-current assets|13,384,400.00|13,384,400.00|
|Total of non-current assets|1,826,112,677.63|1,602,794,329.00|
|Total assets|2,952,930,337.37|2,609,071,181.77|
|Current liabilities:|||
|Short-term borrowings|75,000,000.00|283,000,000.00|
|Financial liabilities measured at fair|||
|value of which changes are recorded in|||
|current profits and losses|||
|Derivative financial liabilities|||
|Notes payable|15,000,000.00|40,000,000.00|
|Accounts payable|210,008,050.11|151,132,431.37|
|Accounts received in advance|22,676,046.39|49,176,997.90|
|Payroll payable|22,596,483.36|22,813,584.24|
|Tax payable|85,567,106.10|87,016,104.58|
|Interest payable|||
|Dividend payable|250,000.00|250,000.00|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Other accounts payable|30,090,888.88|33,560,585.60|
|Liabilities held for sale|||
|Non-current liabilities due within 1|||
||500,000.00|77,390,000.00|
|year|||
|Other current liabilities|||
|Total current liabilities|461,688,574.84|744,339,703.69|
|Non-current liabilities:|||
|Long-term borrowings|431,590,000.00|296,090,000.00|
|Bonds payable|||
|Of which: preferred shares|||
|Perpetual bonds|||
|Long-term payables|650,000.00|650,000.00|
|Long-term payroll payables|||
|Specific payables|||
|Estimated liabilities|||
|Deferred income|14,888,148.15|10,688,888.89|
|Deferred income tax liabilities|||
|Other non-current liabilities|||
|Total non-current liabilities|447,128,148.15|307,428,888.89|
|Total liabilities|908,816,722.99|1,051,768,592.58|
|Owners’ equity:|||
|Share capital|593,923,220.00|593,923,220.00|
|Other equity instruments|||
|Of which: preferred shares|||
|Perpetual bonds|||
|Capital reserves|263,799,837.18|263,799,837.18|
|Less: Treasury stock|||
|Other comprehensive income|||
|Specific reserves|10,455,987.12|11,090,176.40|
|Surplus reserves|178,048,385.86|126,334,248.31|
|Retained profits|997,886,184.22|562,155,107.30|
|Total owners’ equity|2,044,113,614.38|1,557,302,589.19|
|Total liabilities and owners’ equity|2,952,930,337.37|2,609,071,181.77|

2014 Annual Report of Hubei Sanonda Co., Ltd. 3. Consolidated income statement
Unit: RMB Yuan
||||
|-|-|-|
|Item|2014|2013|
|I. Total operating revenues|3,131,186,300.05|3,078,467,310.53|
|Including: Sales income|3,131,186,300.05|3,078,467,310.53|
|Interest income|||
|Premium income|||
|Handling charge and commission|||
|income|||
|II. Total operating costs|2,465,984,036.81|2,640,952,274.78|
|Including: Cost of sales|2,192,274,088.19|2,346,340,331.58|
|Interest expenses|||
|Handling charge and commission|||
|expenses|||
|Surrenders|||
|Net claims paid|||
|Net amount withdrawn for the|||
|insurance contract reserve|||
|Expenditure on policy dividends|||
|Reinsurance premium|||
|Taxes and associate charges|6,606,935.80|12,668,549.20|
|Selling and distribution expenses|97,828,145.48|94,995,306.85|
|Administrative expenses|125,293,281.02|113,149,064.68|
|Financial expenses|27,161,121.43|65,649,400.32|
|Asset impairment loss|16,820,464.89|8,149,622.15|
|Add: Gain/(loss) from change in fair|||
|value (“-” means loss)|||
|Gain/(loss) from investment (“-”|||
||1,716,466.00|4,656,748.75|
|means loss)|||
|Including: share of profits in|||
|associates and joint ventures|||
|Foreign exchange gains (“-” means|||
|loss)|||
|III. Business profit (“-” means loss)|666,918,729.24|442,171,784.50|
|Add: non-operating income|4,823,907.57|3,871,274.30|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Including: Gains on disposal of|||
||76,490.60|33,778.34|
|non-current assets|||
|Less: non-operating expense|3,076,652.52|11,672,742.17|
|Including: Losses on disposal of|||
||21,677.41|11,450,885.91|
|non-current assets|||
|IV. Total profit (“-” means loss)|668,665,984.29|434,370,316.63|
|Less: Income tax expense|177,382,131.06|114,390,148.66|
|V. Net profit (“-” means loss)|491,283,853.23|319,980,167.97|
|Net profit attributable to owners of|||
||491,771,929.22|320,811,958.67|
|the Company|||
|Minority shareholders’ income|-488,075.99|-831,790.70|
|VI. After-tax net amount of other|||
|comprehensive incomes|||
|After-tax net amount of other|||
|comprehensive incomes attributable to|||
|owners of the Company|||
|(I) Other comprehensive incomes|||
|that will not be reclassified into gains and|||
|losses|||
|1. Changes in net liabilities or|||
|assets with a defined benefit plan upon|||
|re-measurement|||
|2. Enjoyable shares in other|||
|comprehensive incomes in investees that|||
|cannot be reclassified into gains and|||
|losses under the equity method|||
|(II) Other comprehensive incomes|||
|that will be reclassified into gains and|||
|losses|||
|1. Enjoyable shares in other|||
|comprehensive incomes in investees that|||
|will be reclassified into gains and losses|||
|under the equity method|||
|2. Gains and losses on fair|||
|value changes of available-for-sale|||
|financial assets|||
|3. Gains and losses on|||
|reclassifying held-to-maturity|||
|investments into available-for-sale|||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|financial assets|||
|4. Effective hedging gains and|||
|losses on cash flows|||
|5. Foreign-currency financia|l||
|statement translation difference|||
|6. Other|||
|After-tax net amount of other|||
|comprehensive incomes attributable to|||
|minority shareholders|||
|VII. Total comprehensive incomes|491,283,853.23|319,980,167.97|
|Attributable to owners of the|491,771,929.22||
|||320,811,958.67|
|Company|||
|Attributable to minority|-488,075.99||
|||-831,790.70|
|shareholders|||
|VIII. Earnings per share|||
|(I) Basic earnings per share|0.8280|0.5402|
|(II) Diluted earnings per share|0.8280|0.5402|

 Where business mergers under the same control occurred in this reporting period, the net profit achieved by the merged parties before the business mergers was RMB XXX, with the corresponding amount for the last period being RMB XXX.
Legal representative: Li Zuorong Person-in-charge of the accounting work: He Xuesong
Chief of the accounting division: He Xuesong
4. Income statement of the Company
Unit: RMB Yuan
||||
|-|-|-|
|Item|2014|2013|
|I. Total sales|3,138,163,705.20|3,007,040,491.10|
|Less: cost of sales|2,207,188,868.64|2,300,277,619.49|
|Business taxes and surcharges|6,418,266.63|12,223,695.58|
|Distribution expenses|89,534,392.89|84,677,333.60|
|Administrative expenses|105,405,163.52|91,214,212.09|
|Financial costs|27,979,173.45|64,768,782.39|
|Impairment loss|16,183,866.12|3,389,750.48|
|Add: gain/(loss) from change in fairvalue (“-” means loss)|||
|Gain/(loss) from investment (“-”|1,716,466.00|7,479,160.05|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|means loss)|||
|Including: income form investment|||
|on associates and joint ventures|||
|II. Business profit (“-” means loss)|687,170,439.95|457,968,257.52|
|Add: non-operating income|3,838,468.58|3,266,305.06|
|Including: Gains on disposal of|||
||74,384.94|33,778.34|
|non-current assets|||
|Less: non-operating expense|1,900,607.83|10,604,441.91|
|Including: Losses on disposal of|||
||21,677.41|10,599,867.26|
|non-current assets|||
|III. Total profit (“-” means loss)|689,108,300.70|450,630,120.67|
|Less: Income tax expense|171,966,925.23|114,088,028.98|
|IV. Net profit (“-” means loss)|517,141,375.47|336,542,091.69|
|V. After-tax net amount of other|||
|comprehensive incomes|||
|(I) Other comprehensive incomes that|||
|will not be reclassified into gains and|||
|losses|||
|1. Changes in net liabilities or|||
|assets with a defined benefit plan upon|||
|re-measurement|||
|2. Enjoyable shares in other|||
|comprehensive incomes in investees|||
|that cannot be reclassified into gains|||
|and losses under the equity method|||
|(II) Other comprehensive incomes|||
|that will be reclassified into gains and|||
|losses|||
|1. Enjoyable shares in other|||
|comprehensive incomes in investees|||
|that will be reclassified into gains and|||
|losses under the equity method|||
|2. Gains and losses on fair value|||
|changes of available-for-sale financial|||
|assets|||
|3. Gains and losses on|||
|reclassifying held-to-maturity|||
|investments into available-for-sale|||
|financial assets|||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|4. Effective hedging gains and|||
|losses on cash flows|||
|5. Foreign-currency financial|||
|statement translation difference|||
|6. Other|||
|VI. Total comprehensive incomes|517,141,375.47|336,542,091.69|
|VII. Earnings per share|||
|(I) Basic earnings per share|0.8707|0.5666|
|(II) Diluted earnings per share|0.8707|0.5666|

 5. Consolidated cash flow statement
Unit: RMB Yuan
||||
|-|-|-|
|Item|2014|2013|
|I. Cash flows from operating activities:|||
|Cash received from sale of|||
||2,956,964,032.36|2,691,050,197.90|
|commodities and rendering of service|||
|Net increase of deposits from|||
|customers and dues from banks|||
|Net increase of loans from the central|||
|bank|||
|Net increase of funds borrowed from|||
|other financial institutions|||
|Cash received from premium of|||
|original insurance contracts|||
|Net cash received from reinsurance|||
|business|||
|Net increase of deposits of policy|||
|holders and investment fund|||
|Net increase of disposal of financial|||
|assets measured at fair value of which|||
|changes are recorded into current gains|||
|and losses|||
|Cash received from interest, handling|||
|charges and commissions|||
|Net increase of intra-group|||
|borrowings|||
|Net increase of funds in repurchase|||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|business|||
|Tax refunds received|30,957,390.54|58,313,337.23|
|Other cash received relating to|||
||23,365,727.14|33,119,249.36|
|operating activities|||
|Subtotal of cash inflows from operating|||
||3,011,287,150.04|2,782,482,784.49|
|activities|||
|Cash paid for goods and services|1,743,544,298.07|1,613,232,068.36|
|Net increase of customer lendings|||
|and advances|||
|Net increase of funds deposited in the|||
|central bank and amount due from|||
|banks|||
|Cash for paying claims of the original|||
|insurance contracts|||
|Cash for paying interest, handling|||
|charges and commissions|||
|Cash for paying policy dividends|||
|Cash paid to and for employees|207,427,145.93|153,583,613.11|
|Various taxes paid|225,801,242.06|91,706,538.73|
|Other cash payment relating to|||
||135,340,608.06|124,258,975.25|
|operating activities|||
|Subtotal of cash outflows from|||
||2,312,113,294.12|1,982,781,195.45|
|operating activities|||
|Net cash flows from operating activities|699,173,855.92|799,701,589.04|
|II. Cash flows from investing activities:|||
|Cash received from withdrawal of|||
|investments|||
|Cash received from return on|||
||1,716,466.00|4,062,224.59|
|investments|||
|Net cash received from disposal of|||
|fixed assets, intangible assets and other|1,350.00|271,413.59|
|long-term assets|||
|Net cash received from disposal of|||
|||6,607,762.75|
|subsidiaries or other business units|||
|Other cash received relating to|||
|investing activities|||
|Subtotal of cash inflows from investing|||
||1,717,816.00|10,941,400.93|
|activities|||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Cash paid to acquire fixed assets,|||
|intangible assets and other long-term|394,819,264.29|354,430,049.71|
|assets|||
|Cash paid for investment|||
|Net increase of pledged loans|||
|Net cash paid to acquire subsidiaries|||
|and other business units|||
|Other cash payments relating to|||
|investing activities|||
|Subtotal of cash outflows from|||
||394,819,264.29|354,430,049.71|
|investing activities|||
|Net cash flows from investing activities|-393,101,448.29|-343,488,648.78|
|III. Cash Flows from Financing|||
|Activities:|||
|Cash received from capital|||
|contributions|||
|Including: Cash received from|||
|minority shareholder investments by|||
|subsidiaries|||
|Cash received from borrowings|479,659,359.80|1,320,595,618.49|
|Cash received from issuance of|||
|bonds|||
|Other cash received relating to|||
|||12,000,000.00|
|financing activities|||
|Subtotal of cash inflows from financing|||
||479,659,359.80|1,332,595,618.49|
|activities|||
|Repayment of borrowings|705,269,565.35|1,433,154,014.64|
|Cash paid for interest expenses and|||
||71,088,591.71|89,221,557.28|
|distribution of dividends or profit|||
|Including: dividends or profit paid|||
|||350,000.00|
|by subsidiaries to minority shareholders|||
|Other cash payments relating to|||
||2,070,000.00|33,081,730.00|
|financing activities|||
|Sub-total of cash outflows from|||
||778,428,157.06|1,555,457,301.92|
|financing activities|||
|Net cash flows from financing activities|-298,768,797.26|-222,861,683.43|
|IV. Effect of foreign exchange rate|||
||1,478,204.88|1,533,298.61|
|changes on cash and cash equivalents|||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|V. Net increase in cash and cash|||
||8,781,815.25|234,884,555.44|
|equivalents|||
|Add: Opening balance of cash and|||
||410,065,921.21|175,181,365.77|
|cash equivalents|||
|VI. Closing balance of cash and cash|||
||418,847,736.46|410,065,921.21|
|equivalents|||

6. Cash flow statement of the Company
Unit: RMB Yuan
||||
|-|-|-|
|Item|2014|2013|
|I. Cash flows from operating activities:|||
|Cash received from sale of|||
||2,721,769,889.28|2,638,952,260.66|
|commodities and rendering of service|||
|Tax refunds received|23,083,897.73|32,941,659.93|
|Other cash received relating to|||
||92,468,682.36|20,600,832.97|
|operating activities|||
|Subtotal of cash inflows from operating|||
||2,837,322,469.37|2,692,494,753.56|
|activities|||
|Cash paid for goods and services|1,663,650,870.84|1,583,654,948.22|
|Cash paid to and for employees|198,112,066.92|138,377,629.21|
|Various taxes paid|223,837,271.44|86,634,370.77|
|Other cash payment relating to|||
||118,306,489.22|122,211,560.29|
|operating activities|||
|Subtotal of cash outflows from|||
||2,203,906,698.42|1,930,878,508.49|
|operating activities|||
|Net cash flows from operating activities|633,415,770.95|761,616,245.07|
|II. Cash flows from investing activities:|||
|Cash received from retraction of|||
|||24,313,258.78|
|investments|||
|Cash received from return on|||
||1,716,466.00|4,712,224.59|
|investments|||
|Net cash received from disposal of|||
|fixed assets, intangible assets and other|1,350.00|271,413.59|
|long-term assets|||
|Net cash received from disposal of|||
|subsidiaries or other business units|||
|Other cash received relating to|||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|investing activities|||
|Subtotal of cash inflows from investing|||
||1,717,816.00|29,296,896.96|
|activities|||
|Cash paid to acquire fixed assets,|||
|intangible assets and other long-term|393,505,156.18|351,384,766.77|
|assets|||
|Cash paid for investment||5,906,730.00|
|Net cash paid to acquire subsidiaries|||
|and other business units|||
|Other cash payments relating to|||
|investing activities|||
|Subtotal of cash outflows from|||
||393,505,156.18|357,291,496.77|
|investing activities|||
|Net cash flows from investing activities|-391,787,340.18|-327,994,599.81|
|III. Cash Flows from Financing|||
|Activities:|||
|Cash received from capital|||
|contributions|||
|Cash received from borrowings|411,000,000.00|939,590,000.00|
|Cash received from issuance of|||
|bonds|||
|Other cash received relating to|||
|||12,000,000.00|
|financing activities|||
|Subtotal of cash inflows from financing|||
||411,000,000.00|951,590,000.00|
|activities|||
|Repayment of borrowings|560,390,000.00|1,097,410,000.00|
|Cash paid for interest expenses and|||
||71,088,591.71|84,215,236.42|
|distribution of dividends or profit|||
|Other cash payments relating to|||
||2,070,000.00|27,175,000.00|
|financing activities|||
|Sub-total of cash outflows from|||
||633,548,591.71|1,208,800,236.42|
|financing activities|||
|Net cash flows from financing activities|-222,548,591.71|-257,210,236.42|
|IV. Effect of foreign exchange rate|||
||-178,674.99|-47,540.50|
|changes on cash and cash equivalents|||
|V. Net increase in cash and cash|||
||18,901,164.07|176,363,868.34|
|equivalents|||
|Add: Opening balance of cash and|325,849,120.35|149,485,252.01|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|cash equivalents|||
|VI. Closing balance of cash and cashequivalents|||
||344,750,284.42|325,849,120.35|

7. Consolidated statement of changes inowners’ equity
2014
Unit: RMB Yuan
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||2014|||||||||||||
||Equity attributable to owners of the Company|||||||||||||
|||Other equity||||||||||||
||||||||Other|||||Minorit|Total|
|Item||||||||||||||
|||instruments||||Less:||||General||||
||Share||||Capital||compre|Specific|Surplus||Retaine|y|owners’|
|||Prefer|Perpet|||treasury||||risk||||
||capital||||reserve||hensive|reserve|reserve||d profit|interests|equity|
|||red|ual|Other||stock||||reserve||||
||||||||incomes|||||||
|||shares|bonds|||||||||||
|I. Balance at the|593,92||||||||||||1,546,4|
||||||263,184|||16,059,|126,334||546,688|252,359||
|end of the|3,220.||||||||||||41,931.|
||||||,043.66|||288.71|,248.31||,770.98|.38||
|previous year|00||||||||||||04|
|Add: change of||||||||||||||
|accounting policy||||||||||||||
|Correction of||||||||||||||
|errors in previous||||||||||||||
|periods||||||||||||||
|Business||||||||||||||
|mergers under the||||||||||||||
|same control||||||||||||||
|Other||||||||||||||
|II. Balance at the|593,92||||||||||||1,546,4|
||||||263,184|||16,059,|126,334||546,688|252,359||
|beginning of the|3,220.||||||||||||41,931.|
||||||,043.66|||288.71|,248.31||,770.98|.38||
|year|00||||||||||||04|
|III. Increase/||||||||||||||
|decrease in the||||||||-634,18|51,714,||410,361|-488,07|460,953|
|period (“-” means||||||||9.28|137.55||,630.67|5.99|,502.95|
|decrease)||||||||||||||
|(I) Total||||||||||||||
||||||||||||491,771|-488,07|491,283|
|comprehensive||||||||||||||
||||||||||||,929.22|5.99|,853.23|
|incomes||||||||||||||
|(II) Capital||||||||||||||
|increased and||||||||||||||
|reduced by owners||||||||||||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||
|-|-|-|-|
|1. Common||||
|shares increased||||
|by shareholders||||
|2. Capital||||
|increased by||||
|holders of other||||
|equity instruments||||
|3. Amounts||||
|of share-based||||
|payments||||
|recognized in||||
|owners’ equity||||
|4. Other||||
|(III) Profit|51,714,|-81,410,|-29,696,|
|distribution|137.55|298.55|161.00|
|1.||||
||51,714,|-51,714,||
|Appropriations to||||
||137.55|137.55||
|surplus reserves||||
|2.||||
|Appropriations to||||
|general risk||||
|provisions||||
|3.||||
|Appropriations to||-29,696,|-29,696,|
|owners (or||161.00|161.00|
|shareholders)||||
|4. Other||||
|(IV) Internal||||
|carry-forward of||||
|owners’ equity||||
|1. New||||
|increase of capital||||
|(or share capital)||||
|from capital public||||
|reserves||||
|2. New||||
|increase of capital||||
|(or share capital)||||
|from surplus||||
|reserves||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|3. Surplus||||||||
|reserves for||||||||
|making up losses||||||||
|4. Other||||||||
|(V) Specific|||-634,18||||-634,18|
|reserve|||9.28||||9.28|
|1. Withdrawn|||11,062,||||11,062,|
|for the period|||407.36||||407.36|
|2. Used in the|||11,696,||||11,696,|
|period|||596.64||||596.64|
|(VI) Other||||||||
||593,92||||||2,007,395,433.99|
|IV. Closing||263,184|15,425,|178,048|957,050|-235,71||
||3,220.|||||||
|balance||,043.66|099.43|,385.86|,401.65|6.61||
||00|||||||

 2013
Unit: RMB Yuan
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||2013|||||||||||||
||Equity attributable to owners of the Company|||||||||||||
|||Other equity||||||||||Minorit||
||||||||Other||||||Total|
|Item||||||||||||||
|||instruments||||Less:||||General||y||
||Share||||Capital||compre|Specific|Surplus||Retaine||owners’|
|||Prefer|Perpet|||treasury||||risk||interest||
||capital||||reserve||hensive|reserve|reserve||d profit||equity|
|||red|ual|Other||stock||||reserve||s||
||||||||incomes|||||||
|||shares|bonds|||||||||||
|I. Balance at the|593,92||||||||||||1,264,8|
||||||266,090|||13,825,|92,680,||289,017|9,318,9||
|end of the|3,220.||||||||||||55,720.|
||||||,773.02|||364.46|039.14||,364.90|59.09||
|previous year|00||||||||||||61|
|Add: change of||||||||||||||
|accounting policy||||||||||||||
|Correction of||||||||||||||
|errors in previous||||||||||||||
|periods||||||||||||||
|Business||||||||||||||
|mergers under the||||||||||||||
|same control||||||||||||||
|Other||||||||||||||
|II. Balance at the|593,92||||||||||||1,264,8|
||||||266,090|||13,825,|92,680,||289,017|9,318,9||
|beginning of the|3,220.||||||||||||55,720.|
||||||,773.02|||364.46|039.14||,364.90|59.09||
|year|00||||||||||||61|
|III. Increase/|||||-2,906,7|||2,233,9|33,654,||257,671|-9,066,|281,586|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|decrease in the|29.36|24.25|209.17|,406.08|599.71|,210.43|
|period (“-” means|||||||
|decrease)|||||||
|(I) Total|||||||
|||||320,811|-831,79|319,980|
|comprehensive|||||||
|||||,958.67|0.70|,167.97|
|incomes|||||||
|(II) Capital|||||||
||-2,906,7||||-7,495,|-10,401,|
|increased and|||||||
||29.36||||166.09|895.45|
|reduced by owners|||||||
|1. Common|||||||
|shares increased|||||||
|by shareholders|||||||
|2. Capital|||||||
|increased by|||||||
|holders of other|||||||
|equity instruments|||||||
|3. Amounts|||||||
|of share-based|||||||
|payments|||||||
|recognized in|||||||
|owners’ equity|||||||
||-2,906,7||||-7,495,|-10,401,|
|4. Other|||||||
||29.36||||166.09|895.45|
|(III) Profit|||33,654,|-63,140,|-350,00|-29,836,|
|distribution|||209.17|552.59|0.00|343.42|
|1.|||||||
||||33,654,|-33,654,|||
|Appropriations to|||||||
||||209.17|209.17|||
|surplus reserves|||||||
|2.|||||||
|Appropriations to|||||||
|general risk|||||||
|provisions|||||||
|3.|||||||
|Appropriations to||||-29,486,|-350,00|-29,836,|
|owners (or||||343.42|0.00|343.42|
|shareholders)|||||||
|4. Other|||||||
|(IV) Internal|||||||
|carry-forward of|||||||
|owners’ equity|||||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|1. New||||||||
|increase of capital||||||||
|(or share capital)||||||||
|from capital public||||||||
|reserves||||||||
|2. New||||||||
|increase of capital||||||||
|(or share capital)||||||||
|from surplus||||||||
|reserves||||||||
|3. Surplus||||||||
|reserves for||||||||
|making up losses||||||||
|4. Other||||||||
|(V) Specific|||2,233,9|||-389,64|1,844,2|
|reserve|||24.25|||2.92|81.33|
|1. Withdrawn|||10,036,|||326,627|10,363,|
|for the period|||579.50|||.89|207.39|
|2. Used in the|||7,802,6|||716,270|8,518,9|
|period|||55.25|||.81|26.06|
|(VI) Other||||||||
||593,92||||||1,546,4|
|IV. Closing||263,184|16,059,|126,334|546,688|252,359||
||3,220.||||||41,931.|
|balance||,043.66|288.71|,248.31|,770.98|.38||
||00||||||04|

 8. Statement of changes inowners’ equity of the Company
2014
Unit: RMB Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||2014|||||||||||
|||Other equity instruments|||||Other|||||
|||||||Less:|||||Total|
|Item|Share||||Capital||comprehe|Specific|Surplus|Retaine||
|||Preferre|Perpetu|||treasury|||||owners’|
||capital|||Other|reserve||nsive|reserve|reserve|d profit||
|||d shares|al bonds|||stock|||||equity|
||||||||incomes|||||
|I. Balance at the||||||||||||
||593,923,||||263,799,8|||11,090,17|126,334,2|562,155|1,557,302|
|end of the previous||||||||||||
||220.00||||37.18|||6.40|48.31|,107.30|,589.19|
|year||||||||||||
|Add: change of||||||||||||
|accounting policy||||||||||||
|Correction of||||||||||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|errors in previous|||||||
|periods|||||||
|Other|||||||
|II. Balance at the|||||||
||593,923,|263,799,8|11,090,17|126,334,2|562,155|1,557,302|
|beginning of the|||||||
||220.00|37.18|6.40|48.31|,107.30|,589.19|
|year|||||||
|III. Increase/|||||||
|decrease in the|||-634,189.|51,714,13|435,731|486,811,0|
|period (“-” means|||28|7.55|,076.92|25.19|
|decrease)|||||||
|(I) Total|||||||
||||||517,141|517,141,3|
|comprehensive|||||||
||||||,375.47|75.47|
|incomes|||||||
|(II) Capital|||||||
|increased and|||||||
|reduced by owners|||||||
|1. Common|||||||
|shares increased|||||||
|by shareholders|||||||
|2. Capital|||||||
|increased by|||||||
|holders of other|||||||
|equity instruments|||||||
|3. Amounts|||||||
|of share-based|||||||
|payments|||||||
|recognized in|||||||
|owners’ equity|||||||
|4. Other|||||||
|(III) Profit||||51,714,13|-81,410,|-29,696,1|
|distribution||||7.55|298.55|61.00|
|1.|||||||
|||||51,714,13|-51,714,||
|Appropriations to|||||||
|||||7.55|137.55||
|surplus reserves|||||||
|2.|||||||
|Appropriations to|||||-29,696,|-29,696,1|
|owners (or|||||161.00|61.00|
|shareholders)|||||||
|3. Other|||||||
|(IV) Internal|||||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|carry-forward of|||||||
|owners’ equity|||||||
|1. New|||||||
|increase of capital|||||||
|(or share capital)|||||||
|from capital public|||||||
|reserves|||||||
|2. New|||||||
|increase of capital|||||||
|(or share capital)|||||||
|from surplus|||||||
|reserves|||||||
|3. Surplus|||||||
|reserves for|||||||
|making up losses|||||||
|4. Other|||||||
|(V) Specific|||-634,189.|||-634,189.|
|reserve|||28|||28|
|1. Withdrawn|||11,062,40|||11,062,40|
|for the period|||7.36|||7.36|
|2. Used in the|||11,696,59|||11,696,59|
|period|||6.64|||6.64|
|(VI) Other|||||||
|IV. Closing|593,923,|263,799,8|10,455,98|178,048,3|997,886|2,044,113,614.38|
|balance|220.00|37.18|7.12|85.86|,184.22||

 2013
Unit: RMB Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||2013|||||||||||
|||Other equity instruments|||||Other|||||
|||||||Less:|||||Total|
|Item|Share||||Capital||comprehe|Specific|Surplus|Retaine||
|||Preferre|Perpetu|||treasury|||||owners’|
||capital|||Other|reserve||nsive|reserve|reserve|d profit||
|||d shares|al bonds|||stock|||||equity|
||||||||incomes|||||
|I. Balance at the||||||||||||
||593,923,||||263,799,8|||8,127,543|92,680,03|288,753|1,247,284|
|end of the previous||||||||||||
||220.00||||37.18|||.89|9.14|,568.20|,208.41|
|year||||||||||||
|Add: change of||||||||||||
|accounting policy||||||||||||
|Correction of||||||||||||
|errors in previous||||||||||||
|periods||||||||||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|Other|||||||
|II. Balance at the|||||||
||593,923,|263,799,8|8,127,543|92,680,03|288,753|1,247,284|
|beginning of the|||||||
||220.00|37.18|.89|9.14|,568.20|,208.41|
|year|||||||
|III. Increase/|||||||
|decrease in the|||2,962,632|33,654,20|273,401|310,018,3|
|period (“-” means|||.51|9.17|,539.10|80.78|
|decrease)|||||||
|(I) Total|||||||
||||||336,542|336,542,0|
|comprehensive|||||||
||||||,091.69|91.69|
|incomes|||||||
|(II) Capital|||||||
|increased and|||||||
|reduced by owners|||||||
|1. Common|||||||
|shares increased|||||||
|by shareholders|||||||
|2. Capital|||||||
|increased by|||||||
|holders of other|||||||
|equity instruments|||||||
|3. Amounts|||||||
|of share-based|||||||
|payments|||||||
|recognized in|||||||
|owners’ equity|||||||
|4. Other|||||||
|(III) Profit||||33,654,20|-63,140,|-29,486,3|
|distribution||||9.17|552.59|43.42|
|1.|||||||
|||||33,654,20|-33,654,||
|Appropriations to|||||||
|||||9.17|209.17||
|surplus reserves|||||||
|2.|||||||
|Appropriations to|||||-29,486,|-29,486,3|
|owners (or|||||343.42|43.42|
|shareholders)|||||||
|3. Other|||||||
|(IV) Internal|||||||
|carry-forward of|||||||
|owners’ equity|||||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|1. New|||||||
|increase of capital|||||||
|(or share capital)|||||||
|from capital public|||||||
|reserves|||||||
|2. New|||||||
|increase of capital|||||||
|(or share capital)|||||||
|from surplus|||||||
|reserves|||||||
|3. Surplus|||||||
|reserves for|||||||
|making up losses|||||||
|4. Other|||||||
|(V) Specific|||2,962,632|||2,962,632|
|reserve|||.51|||.51|
|1. Withdrawn|||9,429,984|||9,429,984|
|for the period|||.84|||.84|
|2. Used in the|||6,467,352|||6,467,352|
|period|||.33|||.33|
|(VI) Other|||||||
|IV. Closing|593,923,|263,799,8|11,090,17|126,334,2|562,155|1,557,302|
|balance|220.00|37.18|6.40|48.31|,107.30|,589.19|

 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 markedHubei’s first large state-run industrial enterprise to adopt the stock system. On 8 Sept. 1992, upon the said reorganization, the Company was formally established. Later, as approved by the People's Government of Hubei Province and the China Securities Regulatory Commission (“CSRC”), the Company issued 30,000,000 RMB-denominated ordinary shares ("A shares") to the public in Nov. 1993. And the total share capital of the Company was 104,933,900 shares after the public offering. The Sha City Bureau for State-owned Assets Supervision and Administration is the first majority shareholder of the Company, with a capital contribution of RMB 57,467,900, accounting for54.77% of theCompany’s total share capital. On 3 Dec. 1993, shares of the Company were listed in the Shenzhen Stock Exchange.
In Apr. 1994, a dividend distribution plan was reviewed and approved at the 1993 AnnualShareholders’ General Meeting. RMB 2.00 was distributed in cash for every 10 shares held by the state and two bonus shares for every 10 shares held by individuals. The bonus
shares were listed in 3 May 1994. And theCompany’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 for50.42% of theCompany’s total shares.
2014 Annual Report of Hubei Sanonda Co., Ltd. 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, the50.42% and1.93% 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 held52.35% of theCompany’s total shares.
On 9 Aug. 1995, as approved at theCompany’s 1994 AnnualShareholders’ 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 theCompany’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 (theCompany’s first majority shareholder) held50.21% of theCompany’s total shares.
In Jul. 1995, the Company held the 1994 AnnualShareholders’ 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, theCompany’s total number of shares rose to 139,970,500, with the Jingsha City Bureau for State-owned Assets Supervision and Administration holding44.66%.
In Nov. 1996, as approved by the “Document Zheng-Jian-Shang-Zi[1996] No.13” issued by CSRC, the Company carried out the share allotment plan (three shares being allotted for every ten shares) for the year 1996. A total of 41,991,100 shares of the Company were allotted, of which 19,552,900 shares were allotted for state-held shares and 22,438,200 shares for individual-held shares. After the said share allotment, theCompany’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 ofPeople’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 theCompany’s equity interests it held to Sanonda Group. As such, Sanonda Group became theCompany’s first majority shareholder, holding44.66% of theCompany’s total shares.
From 29 Apr. to 5 May 1997, as approved by the “Zheng-Fa (1997) No.23 Document” issued by the Securities Commission under the State Council, the Company issued 0.1 billion domestically-listed foreign shares (B shares) of RMB 1.00 par value, which were listed in the Shenzhen Stock Exchange for trading on 15 May 1997. And the Company exercised the over-allotment options of 15 million shares from 15 May to 21 May in the same year. After issuance of the said B shares, theCompany’s total number of shares rose to 296,961,600 shares, and the shareholding ratio of SanondaGroup—theCompany’s first majorityshareholder—was changed to27.52%.
On 20 May 2005, the Jingzhou City Bureau for State-owned Assets Supervision and Administration and China National Agrochemical Corporation (a wholly-owned subsidiary under China National Chemical Corporation) signed the “Agreement on Transferring Assets of Sanonda Group”. The State-Owned Assets Supervision and Administration Commission of thePeople’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, thePeople’s Government of Jingzhou City was approved to transfer all state-owned assets of Sanonda Group to China National Agrochemical Corporation with compensation, with the transfer base date on 31 Dec. 2004. After the said transfer, Sanonda Group became a wholly-owned subsidiary under China National Agrochemical Corporation. 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 theshareholders’ general meeting held on 8 Jul. 2006. And the share reform
2014 Annual Report of Hubei Sanonda Co., Ltd. was completed in Aug. 2006. With the base of 296,961,600 tradable shares, 2.2 shares were paid to tradable A-share holders by non-tradable share holders as consideration for every 10 tradable A-shares, with the total number of shares paid by non-tradable share holders to tradable share holders reaching 21,391,100,000 shares. After the share reform, the total number of theCompany’s shares remained unchanged, of which Sanonda Group held 61093,600 shares, accounting for20.57% of theCompany’s total shares. In Nov. 2006 and Mar. 2007, due to a dispute case concerning the provision of a loan guarantee by theCompany’s first majorityshareholder—SanondaGroup—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 for20.02% of theCompany’s total shares.
In May 2007, the Company held the 2006 AnnualShareholders’ General Meeting, at which the plan for turning capital reserve to share capital was reviewed and approved. As a result, 10 shares were increased for every 10 shares held by all shareholders in Jul. 2007. After the increase, theCompany’s total number of shares rose to 593,923,200 shares. The first majorityshareholder—SanondaGroup—held 118,887,200 shares, accounting for20.02% of theCompany’s total shares.
On 16 Nov. 2012, Sanonda Group Co., Ltd. acquired 800,000 shares of the Company held by the to-be-cancelledsubsidiary—Jingzhou Sanonda Advertising Co., Ltd. through the block trading market, then it held a total of 119,687,200 shares of the Company, accounting for20.15% of theCompany’s total share capital, and up to 31 Dec. 2012, the share capital of the Company remained unchanged. On 8 Apr. 2014, Sanonda Group Co., Ltd. changed its name into “Jingzhou Sanonda Holdings Co., Ltd.” As at the balance sheet date, Legal representative of the Company: Li Zuorong; Business license No.: 420000400004491; Registered address: No.93, Beijing East Road, Jingzhou, Hubei Province, PRC; Stock abbreviation: Sanonda A/ Sanonda B; and Stock code: 000553/ 200553.
The Company and its subsidiaries (hereinafter referred to as “the Group”) is principally engaged in pesticide products such as triazophos, methomyl, paraquat, DDVP, acephate, glyphosate, dipterex and imidacloprid; and chemical products such as liquid caustic soda, ionic membrane caustic soda, spermine, PMIDA and trimethyl hydrochloric acid. The Company has the rights of handling import and export business. And the Company has passed ISO9002 Quality System Certification and ISO14001 Environment Management System Certification.
The parent company of the Group is Jingzhou Sanonda Holdings Co., Ltd. and the ultimate controller is China National Chemical Corporation.
The financial statements for 2014 have been authorized for issuance by the Board of Directors of the Group on 12 Mar. 2015. No change occurred to the consolidation scope for the financial statements for 2014.
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 Group prepared financial statements in accordance with<The Accounting Standards for BusinessEnterprises—BasicStandard> 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.
2014 Annual Report of Hubei Sanonda Co., Ltd. In accordance with relevant provisions of the Accounting Standards for Business Enterprises, the Group adopted the accrual basis in accounting. Except for some financial instruments, where impairment occurred on an asset, an impairment reserve was withdrawn accordingly pursuant to relevant requirements.
2. 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. Important accounting policies and estimations
Indication of specific accounting policies and estimations:
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Group are in compliance with in compliance with the Accounting Standards for Business Enterprises, which factually and completely present theCompany’s and theGroup’s financial positions as at 31 Dec. 2014, business results and cash flows for the year of 2014, and other relevant information. In addition, theCompany’s and theGroup’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
TheGroup’s fiscal periods include fiscal years and fiscal periods shorter than a complete fiscal year. TheGroup’s fiscal year starts on 1 Jan. and ends on 31 Dec. of every year according to the Gregorian calendar.
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 is also the classification critera for the liquidity of its assets and liabilities. 4. Recording currency
Renminbi is the dominant currency used in the economic circumstances where the Group and its domestic subsidiaries are involved. Therefore, the Group and its domestic subsidiaries use Renminbi as their bookkeeping base currency. And the Group adopted Renminbi as the bookkeeping base currency when preparing the financial statements for the reporting year.
5. Accounting treatment methods for business combinations under the same control or not under the same control
Business combinations, it is refer to two or more separate enterprises merge to form a reporting entity transactions or events. Business combination is divided into under the same control and those non under the same control.
(1) Business combinations under the same control
2014 Annual Report of Hubei Sanonda Co., Ltd. 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 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 5th 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
2014 Annual Report of Hubei Sanonda Co., Ltd. paragraphs described in this section and note 4, 10 “long term equity investment transaction” and conduct accounting treatment, those not belong to the "package deal" distinguish between the individual financial statements and the consolidated financial statements and conduct relevant accounting treatment.
In the individual financial statements, the sum of the book value and new investment cost of the Group holds in the acquiree before the acquiring date shall be considered as initial cost of the investment. Other related comprehensive gains in relation to the equity interests that the Group holds in the acquiree before the acquiring date shall be treated on the same basis as the acquiree directly disposes the related assets or liabilities when disposing the investment (that is, except for the corresponding share in the changes in the net liabilities or assets with a defined benefit plan measured at the equity method arising from theacquiree’s re-measurement, the others shall be transferred into current investment gains).
In theGroup’s consolidated financial statements, as for the equity interests that the Group holds in the acquiree before the acquiring date, they shall be re-measured according to their fair values at the acquiring date; the positive difference between their fair values and carrying amounts shall be recorded into the investment gains for the period including the acquiring date. Other related comprehensive gains in relation to the equity interests that the Group holds in the acquiree before the acquiring date shall be treated on the same basis as the acquiree directly disposes the related assets or liabilities when disposing the investment (that is, except for the corresponding share in the changes in the net liabilities or assets with a defined benefit plan measured at the equity method arising from theacquiree’s re-measurement, the others shall be transferred into current investment gains on the acquiring date). 6. Methods for preparing consolidated financial statements
(1) Principle for determining the consolidation scope
The consolidation scope for financial statements is determined on the basis of control. The term “control” is the power of the Group upon an investee, with which it can take part in relevant activities of the investee to obtain variable returns and is able to influence the amount of returns. The consolidated financial statements comprise the financial statements of the Group and its subsidiaries. A subsidiary is an enterprise or entity controlled by the Group.
(2) Methods for preparing the consolidated financial statements
Subsidiaries are fully consolidated from the date on which the Group obtains control on their net assets and operation decision-making and are de-consolidated from the date when such control ceases. As for a disposed subsidiary, its operating results and cash flows before the disposal date has been appropriately included in the consolidated income statement and cash flow statement; and as for subsidiaries disposed in the current period, the opening items in the consolidated balance sheet are not adjusted. For a subsidiary acquired in a business combination not under the same control, its operating results and cash flows after the acquiring date have been appropriately included in the consolidated income statement and cash flow statement, and the opening items and comparative items in the consolidated financial statements are not adjusted. For a subsidiary acquired in a business combination under the same control or a combined party obtained in a takeover, its operating results and cash flows from the beginning of the reporting period of the combination to the combination date have been appropriately included in the consolidated income statement and cash flow statement, and the comparative items in the consolidated financial statements are adjusted at the same time.
The financial statements of subsidiaries are adjusted in accordance with the accounting policies and accounting period of the Group during the preparation of the consolidated financial statements, where the accounting policies and the accounting periods are inconsistent between the Group and subsidiaries. For a subsidiary acquired from a business combination not under the same control, the individual financial statements of the subsidiary are adjusted based on the fair value of the identifiable net assets at the acquisition date.
All significant inter-group balances, transactions and unrealized profits are offset in the consolidated financial statements.
2014 Annual Report of Hubei Sanonda Co., Ltd. The portion of asubsidiary’sshareholders’ equity and the portion of asubsidiary’s net profits and losses for the period not held by the Group are recognized as minority interests and minority shareholder profits and losses respectively and presented separately undershareholders’ equity and net profits in the consolidation financial statements. The portion of asubsidiary’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 thesubsidiary’s openingowners’ equity, minority interests are offset. Where the Group losses control on its original subsidiaries due to disposal of some equity investments or other reasons, the residual equity interests are re-measured according to the fair value on the date when such control ceases. The summation of the consideration obtained from the disposal of equity interests and the fair value of the residual equity interests, minus the portion in the originalsubsidiary’s net assets measured on a continuous basis from the acquisition date that is enjoyable by the Group according to the original shareholding percentage in the subsidiary, is recorded in investment gains for the period when theGroup’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 BusinessEnterprises—Recognition and Measurement of Financial Instruments. For details, see note IV, 13“long term equity investment” or 9 “financial instruments”.
Where the Group losses control on its original subsidiaries due to step by step disposal of equity investments through multiple transactions, it need to distinguish the Group losses control on its subsidiaries due to disposal of equity investments whether belongs to a package deal. All the transaction terms, conditions and economic impact of the disposal ofsubsidiaries’ 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.①These deals are at the same time or under the condition of considering the influence of each other toconcluded;② These transactions only be as a whole can achieve a complete businessresult;③ The occurrence of a deal depends on at least one othertransactions；④A deal alone is not economical, it is economical with other trading together. Those not belong to a package deal, each of them a deal depends on circumstances respectively conduct accounting treatment in accordance with the applicable principles of " part disposal of subsidiaries of a long-term equity investment under the condition of not losing control on its subsidiaries " ( see note IV13,（2）④) and “Where the Group losses control on its original subsidiaries due to disposal of some equity investments or otherreasons”（ See the frontparagraph）relevant transactions of the Group losses control on its subsidiaries due to disposal of equity investments belonging to a package deal, considered as a transaction and conduct accounting treatment. However, Before losing control, every disposal cost and corresponding net assets balance of subsidiary of disposal investment are confirmed as other comprehensive income in consolidated financial statements, which together transferred into the current profits and losses in the lose of control , when the Group losing control on its subsidiary.
7. Classification of joint arrangements and accounting treatment of joint operations
A joint arrangement refers to an arrangemnt jointly controlled by two participants or above. The Group classifies joint arrangements into joint operations and joint ventures according to its rights and duties in the joint arrangements. A joint operation refers to a joint arrangement where the Group enjoys assets and has to bear liabilities related to the arrangement. A joint venture refers to a joint arrangement where the Group is only entitled to the net assets of the arrangement.
TheGroup’s investments in joint ventures are measured at the equity method according to the accounting policies mentioned in Note IV. 13 (2)② “Long-term equity investments measured at the equity method”.
For a joint operation, the Group, as a joint operator, recognizes the assets and liabilities that it holds and bears in the joint operation,
and recognizes the jointly-held assets and jointly-borne liabilites according to theGroup’s stake in the joint operation; recognizes the
2014 Annual Report of Hubei Sanonda Co., Ltd. income from sale of theGroup’s share in the output of the joint operation; recognizes the income from sale of the jointoperation’s outputs accoridng to theGroup’s stake in it; and recognizes the expense solely incurred to the Group and the expense incurred to the joint operation according to theGroup’s stake in it.
When the Group, as a joint operator, transfers or sells assets (the assets not constituing business, the same below) to the joint operation, or purchases assets from the joint operation, before the assets are sold to a third party, the Group only recognizes the share of the other joint operators in the gains and losses arising from the sale. Where impairment occurs to the assets as prescribed in<The Accounting Standard No. 8 for BusinessEnterprises—AssetImpairment>, the Group shall fully recognizes the loss for a transfer or sale of assets to a joint operation; and shall recognize the loss according to its stake in the joint operation for a purchase of assets from the joint operation.
8. Recognition standard for cash and cash equivalents
In theGroup’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 thePeople’s Bank of China, the same below) of the transaction date, while as for such transactions as foreign exchange or involving in foreign exchange, the Company shall converted into amount in the bookkeeping base currency at actual exchange rate the transaction is occurred.
(2) Accounting treatments for translation of foreign currency monetary items and non-monetary items
On the balance sheet date, the foreign currency monetary items shall be translated at the spot exchange rate on the balance sheet date. The exchange difference arising from the difference between the spot exchange rate on the balance sheet date and the spot exchange rate at the time of initial recognition or prior to the balance sheet date shall be recorded in the profits and losses in the current period, excluding the following situations:① the exchange difference arising from foreign currency loans related to acquisition of fixed assets shall be treated at the principle of capitalization of borrowing costs;② the exchange difference arising from the hedging instruments used for effective hedging of net overseas operation investments shall be recorded into other comprehensive incomes, and shall be recognized into current gains and losses when the net investments are disposed; and③ 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 theowners’ equity; and be recorded into disposal gains
2014 Annual Report of Hubei Sanonda Co., Ltd. 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 theowner’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 andowners’ 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 theowner’s equities in the balance sheet and which arises from the translation of foreign currency financial statements relating to this overseas business, into the disposal profits and losses of the current period by all or proportion of the disposed overseas business.
Foreign cash flow shall be translated at the spot exchange rate of the date of cash flow incurred. The influence of exchange rate on the cash flow shall be adjustment item and individually listed in the cash flow statement.
And the opening balance and the actual balance of last year shall be listed at the amounts after translation of foreign currency financial statement in last year.
Where the control of the Group over an overseas operation ceases due to disposal of all or some of theGroup’sowner’s equity in the overseas operation or other reasons, the foreign-currency statement translation difference belonging to the parentcompany’sowner’s equity in relation to the overseas operation which is stated under theshareholders’ equity in the balance sheet shall be all restated as gains and losses of the disposal period.
Where theGroup’s equity in an overseas operation decreases due to disposal of some equity investment or other reasons but the Group still has control over the overseas operation, the foreign-currency statement translation difference in relation to the disposed part of the overseas operation shall be recorded into minority interests instead of current gains and losses. Ifwhat’s disposed is some equity in an overseas associated enterprise or joint venture, the foreign-currency statement translation difference related to the overseas operation shall be recorded into the gains and losses of the current period of the disposal according to the disposal ratio. 10. Financial instruments
The Group recognizes a financial asset or liability when it becomes a party of the relevant financial instrument contract. Financial assets and liabilities are measured at fair value in initial recognition. As for the financial assets and liabilities measured at fair value of which changes are recorded into current gains and losses, the relevant dealing expenses are directly recorded into gains and losses; and the dealing expenses on other kinds of financial assets and liabilites 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
2014 Annual Report of Hubei Sanonda Co., Ltd. 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 financial assets meeting any of the following requirements shall be classified as transactional financialassets：A. The purpose to acquire the said financial assets is mainly for selling them in the near future; B. Forming a part of the identifiable combination of financial instruments which are managed in a centralized way and for which there are objective evidences proving that the enterprise may manage the combination by way of short-term profit making in the near future; C. Being a derivative instrument, excluding the designated derivative instruments which are effective hedging instruments, or derivative instruments to financial guarantee contracts, and the derivative instruments which are connected with the equity instrument investments for which there is no quoted price in the active market, whose fair value cannot be reliably measured, and which shall be settled by delivering the said equity instruments. The financial assets meeting any of the following requirements shall be designated as financial assets which are measured at their fair values and the variation of which is recorded into the profits and losses of the current period for initial recognition: A. the designation can eliminate or significantly reduce the difference of relevant gains and losses between recognition and measurement causing from different bases for measurement of financial assets; B. The official written documents for risk management and investment strategies of the enterprise have clearly stated that it shall ,manage, evaluate and report to important management personnel based on the fair value, about the financial assets group or the group of financial assets& liabilities which the financial assets are belong to.
For the financial assets which are measured at their fair values and the variation of which is recorded into the profits and losses of the current period shall continue to be measured by fair value, gains and losses of change in fair value, dividends and interest related with these financial assets should be recorded into gains and losses of current period.
② Held-to-maturity investment
The term "held-to-maturity investment" refers to a non-derivative financial asset with a fixed date of maturity, a fixed or determinable amount of repo price and which the enterprise holds for a definite purpose or the enterprise is able to hold until its maturity.
For the held-to-maturity investment adopting actual interest rate method, which is measured at the post-amortization costs, the profits and losses that arise when such financial assets or financial liabilities are terminated from recognition, or are impaired or amortized, shall be recorded into the profits and losses of the current period.
The actual interest rate method refers to the method by which the post-amortization costs and the interest incomes of different installments or interest expenses are calculated in light of the actual interest rates of the financial assets or financial liabilities (including a set of financial assets or financial liabilities). The actual interest rate refers to the interest rate adopted to cash the future cash flow of a financial asset or financial liability within the predicted term of existence or within a shorter applicable term into the current carrying amount of the financial asset or financial liability.
When the actual interest rate is determined, the future cash flow shall be predicted on the basis of taking into account all the contractual provisions concerning the financial asset or financial liability (the future credit losses shall not be taken into account).and also the various fee charges, trading expenses, premiums or reduced values, etc., which are paid or collected by the parties to a financial asset or financial liability contract and which form a part of the actual interest rate.
③ Loans and the accounts receivables
Loans and the accounts receivables refer to non-derivative financial assets, which there is no quotation in the active market, with
2014 Annual Report of Hubei Sanonda Co., Ltd. fixed recovery cost or recognizable.
Financial assets that are defined as loans and the accounts receivables by the Group including notes receivables, accounts receivables, interest receivable, dividends receivable and other receivables etc..
Loans and the accounts receivables are made follow-up measurement on the basis of post-amortization costs employing the effective 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 comprehensiveincome，and be carried forward when the said financial assets stopped recognition, then it shall be recorded into the profits and losses of the current period. But, the equity instrument investment which neither have quotation in the active market nor its fair value could not be reliable measured, as well as the derivative financial assets that concern with the equity instruments and should be settled through handing over to its equity instruments, should take the follow-up measurement according to the cost.
Interest receive during the holding of assets available for sales and cash dividends with distribution announcement by invested companies, it shall be recorded into the profits and losses of the current period.
(3) Impairment of financial assets
The Group assesses at the balance sheet date the carrying amount of every financial asset except for the financial assets that measured by the fair value. If there is objective evidence indicating a financial asset may be impaired, a provision is provided for the impairment.
The Group carries out a separate impairment test for every financial asset which is individually significant. As for a financial asset which is individually insignificant, an impairment test is carried out separately or in the financial asset group with similar credit risk. Where the financial asset (individually significant or insignificant) is found not impaired after the separate impairment test, it is included in the financial asset group with similar credit risk and tested again on the group basis. Where the impairment loss is recognized for an individual financial asset, it is not included in the financial asset group with similar credit risk for an impairment test.
① Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying value by the estimated present value of future cash flow. The difference is recorded as impairment loss. If there is objective evidence to indicate the recovery of value of financial assets after impairment, and it is related with subsequent event after recognition of loss, the impairment loss recorded originally can be reversed. The carrying value of financial assets after impairment loss reversed shall not exceed the amortized cost of the financial assets without provisions of impairment loss on the reserving date.
② Impairment of available-for-sale financial assets
When it judged that the decrease of fair value of the available-for-sale equity instrument investment is serious and not temporarily after comprehensive considering relevant factors, it reflected that the available-for-sale equity instrument investment occurred
impairment. Of which, the “serious decline” refers to the accumulative decline range of the fair value over20%; while the
2014 Annual Report of Hubei Sanonda Co., Ltd. “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; or③ The said financial asset has been transferred. And the Group has ceased its control on the said financial asset though it neither transfers nor retains nearly all of the risks and rewards related to the ownership of the financial asset.
Where the Group neither transfers nor retains nearly all of the risks and rewards related to the ownership of a financial asset, and it does not cease its control on the said financial asset, it recognizes the relevant financial asset and liability accordingly according to the extent of its continuous involvement in the transferred financial asset. The term "continuous involvement in the transferred financial asset" refers to the risk level that the enterprise faces resulting from the change of the value of the financial asset.
If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the difference between the amounts of the following 2 items is recorded in the profits and losses of the current period: (1) The book value of the transferred financial asset; and (2) The sum of consideration received from the transfer, and the accumulative amount of the changes of the fair value originally recorded in other comprehensive incomes.
If the transfer of partial financial asset satisfies the conditions to stop the recognition, the book value of the transferred financial asset is apportioned between the portion whose recognition has been stopped and the portion whose recognition has not been stopped according to their respective relative fair value, and the difference between the amounts of the following 2 items is included into the profits and losses of the current period: (1) The summation of the consideration received from the transfer and the portion of the accumulative amount of changes in the fair value originally recorded in other comprehensive incomes which corresponds to the portion whose recognition has been stopped; and (2) The amortized carrying amounts of the aforesaid amounts.
In respect of the assets using recourse to sell or using endorsement to transfer, the Group needs to determine whether almost all of the risks and rewards of the financial asset ownership are transferred. If almost all of the risks and rewards of the financial asset ownership had been transferred to the transferee, derecognize the financial assets. For almost all of the risks and rewards of the financial asset ownership retained, do not end to recognize the financial assets. For which neither transfer or retain almost all of the risks and rewards of the financial asset ownership, continuously judge whether the Company retain the control of the assets, and conduct accounting treatment according to the principle of mentioned in the previous paragraphs.
(5) Classification and measurement of financial liabilities
In the initial recognition, financial liabilities are divided into the financial liabilities measured at fair values and whose changes are
2014 Annual Report of Hubei Sanonda Co., Ltd. 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 Group (debtor) enters into an agreement with a creditor so as to substitute the existing financial liabilities by way of any new financial liability, and if the contractual stipulations regarding the new financial liability is substantially different from that regarding the existing financial liability, it terminates the recognition of the existing financial liability, and at the same time recognizes the new financial liability.
Where the recognition of a financial liability is totally or partially terminated, the enterprise concerned shall include into the profits and losses of the current period for the gap between the book value which has been terminated from recognition and the considerations it has paid (including the non-cash assets it has transferred out and the new financial liabilities it has assumed) (7) Derivatives and embedded derivatives
Derivative financial instruments include derivatives are initially measured at fair value at the date when the derivative contracts are entered into and are substantially re-measured at fair value. The resulting gain and loss is recognized in profit or loss.
An embedded derivative is separated from the hybrid instrument, where the hybrid instrument is not designated as a financial asset or financial liability at fair value though profit or loss, and the treated as a standalone derivative if (a) the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract; and (b) a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative. If the Company is unable to measure the embedded derivative separately either at acquisition or at a subsequent balance sheet date, it designates the
2014 Annual Report of Hubei Sanonda Co., Ltd. entire hybrid instrument as a financial asset or financial liability at fair value through profit or loss.
(8) Offsetting financial assets and financial liabilities
When the Group has a legal right that is currently enforceable to set off the recognized financial assets and financial liabilities, and intends either to settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously, a financial asset and a financial liability shall be offset and the net amount is presented in the balance sheet. Except for the above circumstances, financial assets and financial liabilities shall be presented separately in the balance sheet and shall not be offset.
(9) Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. The Group issues (including refinancing), re-purchases, sells or written-offs the equity instrument as the disposing of the changes of the equity. The Group not recognized the changes of the fair value of the equity instrument. The transaction expenses related to the equity transaction would be deducted from the equity.
All types of distribution (excluding stock dividends) made by the Group to holders of equity instruments are deducted fromshareholders’ equity. The Group does not recognize any changes in the fair value of equity instruments.
11. Receivables
(1) Accounts receivable with significant single amount for which the bad debt provision is made individually
|||
|-|-|
||Receivables with the amount of RMB 5 million or more than|
|Judgement basis or monetary standards of provision for bad||
||RMB 5 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|Other method|

In the groups, adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Inapplicable
||||
|-|-|-|
||Withdrawal proportion for accounts|Withdrawal proportion for other accounts|
|Age|||
||receivable (%)|receivable (%)|
|Within 1 year (including 1 year)|5.00%|5.00%|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|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√ Inapplicable
In the groups, adopting other methods to withdraw bad debt provision:
□ Applicable√ Inapplicable
(3) Accounts receivable with an insignificant single amount but for which the bad debt provision is made individually
|||
|-|-|
||The Group made independent impairment test on receivables|
||with insignificant amount but with the following characteristics|
||(for example: receivables have dispute with the other parties or|
|Reason of individually withdrawing bad debt provision||
||involving lawsuit and arbitration; receivables have obvious|
||indication showing that the debtors are likely to fail to perform|
||the duty of repayment, etc.).|
||The Group made independent impairment test on receivables|
||with insignificant amount but with the following characteristics,|
||if any objective evidence shows that the accounts receivable has|
||been impaired, impairment loss shall be recognized on the basis|
||of the gap between the current values of the future cash flow|
|Withdrawal method for bad debt provision||
||lower than its book value so as to withdraw provision for bad|
||debts (for example: receivables have dispute with the other|
||parties or involving lawsuit and arbitration; receivables have|
||obvious indication showing that the debtors are likely to fail to|
||perform the duty of repayment, etc.).|

12. Inventory
(1) Classification
Inventories mainly include raw materials, work-in-progress and self-made semi-manufactured goods, revolving materials, finished products as well as stock products etc.
(2) Valuation method of inventories acquiring and issuing
The inventories should be measured by the actual cost when acquired, and the cost of the inventories including the procurement cost, processing cost and other cost. Bulk chemical raw materials, work-in-progress goods and finished products should be measured by the actual cost and should carry forward the cost by weighted average method when issuing; auxiliary materials, packing materials
should be measured by actual cost and adopt the planned cost for accounting as well as included the difference between the actual
cost and the planned cost into the material cost variance and according the material cost variance rate, work out the material cost
variance which should be shared at the end of the month, and to adjust the planned cost that had issued the materials as the actual cost;
2014 Annual Report of Hubei Sanonda Co., Ltd. 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 Group has made a decision on disposing a non-current asset, entered into an irreversible transfer agreement with the transferee and the transfer is likely to be completed within one year, the non-current asset is measured as a non-current asset held for sale, which shall not be depreciated or amortized since the date held for sale but shall be measured at the lower one of the net amounts of the book value and the fair value after deducting the disposal expense. Non-current assets held for sale include single-item assets and disposal groups. Where a disposal group is an asset group and the goodwill obtained in the business combination is apportioned to the asset group according to the “Accounting Standard No. 8 for BusinessEnterprises—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 itcouldn’t meet the recognition conditions for held-for-sale non-current asset later, the Company shall cease to classify it as held for sale, and measure it by the lower amount of the followings: (1) its carrying amount before the asset (or disposal group) was classified as held for sale, adjusted for any depreciation, amortization or impairment before the asset (or disposal group) being classified as held for sale; or (2) its recoverable amount on the date of the subsequent decision not to sell.
14. Long-term equity investments
The long-term equity investments of this part refer to the long-term equity investments that the Group has control, joint control or significant influence over the investees. The long-term equity investment that the Group does not have control, joint control or significant influence over the investees, should be recognized as available-for-sale financial assets or be measured by fair value with
the changes should be included in the financial assets accounting of the current gains and losses, and please refer the details of the
2014 Annual Report of Hubei Sanonda Co., Ltd. accounting polices to Notes IV 9 “financial instrument”.
Joint control, refers to the control jointly owned according to the relevant agreement on an arrangement by the Group and the relevant activities of the arrangement should be decided only after the participants which share the control right make consensus. Significant influence refers to the power of the Group which could anticipate in the finance and the operation polices of the investees, but could not control or jointly control the formulation of the policies with the other parties.
(1) Recognition of investment costs
As for long-term equity investments acquired by enterprise merger, if the merger is under the same control, the share of the book value of theowner’s equity of the merged enterprise, on the date of merger, is regarded as the initial cost of the long-term equity investment. The difference between the initial cost of the long-term equity investment and the payment in cash, non-cash assets transferred as well as the book value of the debts borne by the merging party shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. If the consideration of the merging enterprise is that it issues equity securities, it shall, on the date of merger, regard the share of the book value of the shareholder's equity of the merged enterprise on the consolidated financial statement of the ultimate control party as the initial cost of the long-term equity investment. The total face value of the stocks issued shall be regarded as the capital stock, while the difference between the initial cost of the long-term equity investment and total face value of the shares issued shall offset against the capital reserve. If the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. The equities of the combined party which respectively acquired through multiple transaction under the same control that ultimately form into the combination of the enterprises under the same control, should be disposed according whether belongs to package deal; if belongs to package deal, each transaction would be executed accounting treatment by the Company as a transaction of acquiring the control right. If not belongs to package deal, it shall, on the date of merger, regard the enjoyed share of the book value of the shareholder's equity of the merged enterprise on the consolidated financial statement of the ultimate control party as the initial cost of the long-term equity investment, and as for the difference between the initial investment cost of the long-term equity investment and sum of the book value of the long-term equity investment before the combination and the book value of the consideration of the new payment that further required on the combination date, should adjust the capital reserve; if the capital reserve is insufficient to dilute, the retained earnings shall be adjusted. The equity investment held before the combination date which adopted the equity method for accounting, or the other comprehensive income confirmed for the available-for-sale financial assets, should not have any accounting disposal for the moment.
For the long-term investment required from the business combination under different control, the initial investment cost regarded as long-term equity investment on the purchasing date according to the combination cost, the combination costs shall be the sum of the fair values of the assets paid, the liabilities incurred or assumed and the equity securities issued by the Company. The equities of the acquirees which respectively acquired through multiple transaction that ultimately form into the combination of the enterprises under the different control, should be disposed according whether belongs to package deal; if belongs to package deal, each transaction would be executed accounting treatment by the Company as a transaction of acquiring the control right. If not belongs to package deal, the sum of the book value of the original held equity investment of the acquirees and the newly added investment cost should be regarded as the initial investment cost of the long-term equity investment that changed to be accounted by cost method. If the original held equity is calculated by cost method, the other relevant comprehensive income would not have any accounting disposal for the moment. If the original held equity investment is the financial assets available for sale, its difference between the fair value and the book value as well as the accumulative changes of the fair value that include in the other comprehensive income, should transfer into the current gains and losses.
The commission fees for audit, law services, assessment and consultancy services and other relevant expenses occurred in the business combination by the combining party or the purchase party, shall be recorded into current profits and losses upon their occurrence; the transaction expense from the issuance of equity securities or bonds securities which are as consideration for combination by the combining party, should be recorded as the initial amount of equity securities and bonds securities.
Besides the long-term equity investments formed by business combination, the other long-term equity investments shall be initially
measured by cost, the cost is fixed in accordance with the ways of gaining, such as actual cash payment paid by the Group, the fair
2014 Annual Report of Hubei Sanonda Co., Ltd. value of equity securities issued by the Group, the agreed value of the investment contract or agreement, the fair value or original carrying amount of exchanged assets from non-monetary assets exchange transaction, the fair value of the long-term equity investments, etc. The expenses, taxes and other necessary expenditures directly related with gaining the long-term equity investments 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 BusinessEnterprises—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 theowners’ 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 Group, should be adjusted according to the accounting policies of the Group and the financial statement of the investees during the accounting period and according which to recognize the investment income as well as other comprehensive income. For the transaction happened between the Group and associated enterprises as well as joint ventures, if the assets launched or sold not form into business, the portion of the unrealized gains and losses of the internal transaction, which belongs to the Group according to the calculation of the enjoyed proportion, should recognize the investment gains and losses on the basis. But the losses of the unrealized internal transaction happened between the Group and the investees which belongs to the impairment losses of the transferred assets, should not be neutralized. The assets launched by the Group to the associated enterprises or the joint ventures if could form into business, the long-term equity investment without control right which acquired by the investors, should regard the fair value of the launched business as the initial investment cost the newly added long-term equity investment, and for the difference between the initial investment cost and the book value of the launched business, should be included into the current gains and losses with full amount. The assets sold by the Group to the associated enterprises or the joint ventures if could form into business, the difference between the acquired consideration and the book value of the business should be included in the current gains and losses with full
amount. The assets purchased by the Group to the associated enterprises or the joint ventures if could form into business, should be
2014 Annual Report of Hubei Sanonda Co., Ltd. accounting disposed according to the regulations of No. 20 ofASBE—Business Combination, and should be recognized gains or losses related to the transaction with full amount.
The Group shall recognize the net losses of the invested enterprise until the book value of the long-term equity investment and other long-term rights and interests which substantially form the net investment made to the invested entity are reduced to zero. However, if the Group has the obligation to undertake extra losses, it shall be recognized as the estimated liabilities in accordance with the estimated duties and then recorded into investment losses at current period. If the invested entity realizes any net profits later, the Group shall, after the amount of its attributable share of profits offsets against its attributable share of the un-recognized losses, resume recognizing its attributable share of profits.
For the long-term equity investment held by the Group before the first execution of the new accounting criterion on 1 Jan. 2008 of the associated enterprises and joint ventures, if there is debit difference of the equity investment related to the investment, should be included in the current gains and losses according to the amount of the straight-line amortization during the original remained period.③ Acquiring shares of minority interest
In the preparation for the financial statements, the balance existed between the long-term equity investment increased by acquiring shares of minority interest and the attributable net assets on the subsidiary calculated by the increased shares held since the purchase date (or combination date), the capital reserves shall be adjusted, if the capital reserves are not sufficient to offset, the retained profits shall be adjusted.
④ Disposal of long-term equity investment
In the preparation of financial statements, the Company disposed part of the long-term equity investment on subsidiaries without losing its controlling right on them, the balance between the disposed price and attributable net assets of subsidiaries by disposing the long-term equity investment shall be recorded intoowners’ 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 Note IV. 5 (2)— Method on preparation of combined financial statements.
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 intoowners’ 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. Theowners’ equity recognized owning to the changes of the otherowners’equity except for the net gains and losses, other comprehensive income and the profits distribution of the investees, should be transferred into the current gains and losses according to the proportion.
For the long-term equity investment which adopts the cost method of measurement, if the remained equity still adopt the cost method, the other comprehensive income recognized owning to adopting the equity method for measurement or the recognition and measurement standards of financial instrument before acquiring the control of the investees, should adopt the same basis of the accounting disposal of the relevant assets or liabilities directly disposed by the investees and should be carried forward into the current gains and losses according to the proportion; the changes of the otherowners’equity except for the net gains and losses, other comprehensive income and the profits distribution among the net assets of the investees which recognized by adopting the equity method for measurement, should be carried forward into the current gains and losses according to the proportion.
For those the Group lost the control of the investees by disposing part of the equity investment as well as the remained equity after disposal could execute joint control or significant influences on the investees, should change to measure by equity method when compiling the individual financial statement and should adjust the measurement of the remained equity to equity method as adopted since the time acquired; if the remained equity after disposal could not execute joint control or significant influences on the investees, should change the accounting disposal according to the relevant regulations of the recognition and measurement standards of financial instrument, and its difference between the fair value and book value on the date lose the control right should be included in
2014 Annual Report of Hubei Sanonda Co., Ltd. the current gains and losses. For the other comprehensive income recognized by adopting equith method for measurement or the recognition and measurement standards of financial instrument before the Group acquired the control of the investees, should execute the accounting disposal by adopting the same basis of the accounting disposal of the relevant assets or liabilities directly disposed by the investees when lose the control of them, while the changes of the otherowners’ equity except for the net gains and losses, other comprehensive income and the profits distribution among the net assets of the investees which recognized by adopting the equity method for measurement, should be carried forward into the current gains and losses according to the proportion. Of which, for the disposed remained equity which adopted the equity method for measurement, the other comprehensive income and the otherowners’ equity should be carried forward according to the proportion; for the disposed remained equity which changed to execute the accounting disposal according to the recognition and measurement standards of financial instrument, the other comprehensive income and the otherowners’ equity should be carried forward in full amount.
For those the Group lost the control of the investees by disposing part of the equity investment, the disposed remained equity should change to calculate according to the recognition and measurement standards of financial instrument, and difference between the fair value and book value on the date lose the control right should be included in the current gains and losses. For the other comprehensive income recognized from the original equity investment by adopting the equity method, should execute the accounting disposal by adopting the same basis of the accounting disposal of the relevant assets or liabilities directly disposed by the investees when terminate the equity method for measurement, while for theowners’ equity recognized owning to the changes of the otherowner’s equity except for the net gains and losses, other comprehensive income and the profits distribution of the investees, should be transferred into the current investment income with full amount when terminate adopting the equity method.
The Group respectively disposes the equity investment of the subsidiaries through multiple transactions until lose the control right, if the above transactions belongs to the package deal, should execute the accounting disposal by regarding each transaction as a deal of disposing the equity investment of the subsidiaries until lose the control right, while the difference between each expenses of the disposal and the book value of the long-term equity investment in accord with the disposed equity before losing the control right, should firstly be recognized as other comprehensive income then be transferred into the current gains and losses of losing the control right along until the time when lose it.
15. Investment real estates
Measurement mode of investment real estates
Measurement of cost method
Depreciation or amortization method
The term "investment real estates" refers to the real estates held for generating rent and/or capital appreciation. Investment real estates of the Group include the right to use any land which has already been rented; the right to use any land which is held and prepared for transfer after appreciation; and the right to use any building which has already been rented.
The initial measurement of the investment real estate shall be made at its cost. Subsequent expenditures incurred for an investment real estate is included in the cost of the investment real estate when it is probable that economic benefits associated with the investment real estate will flow to the Group and the cost can be reliably measured, otherwise the expenditure is recognized in profit or loss in the period in which they are incurred.
The Group shall make a follow-up measurement to the investment real estates by employing the cost pattern on the date of the balance sheet. An accrual depreciation or amortization shall be made for the investment real estates in the light of the accounting policies of the use right of buildings or lands.
For details of impairment test method and withdrawal method of impairment provision of investment real estates, please refer to Note IV. 16. Impairment of Non-current Non-financial Assets.
When owner-occupied real estate or inventories are changed into investment real estate or investment real estate is changed into
2014 Annual Report of Hubei Sanonda Co., Ltd. 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 Group and its cost could be reliable measured. The fixed assets should take the initial measurement according to the cost and at the same time consider the influences of the factors of the estimated discard expenses.
(2) Depreciation methods
||||||
|-|-|-|-|-|
||||Expected net salvage||
|Category of fixed assets|Method|Useful life||Annual deprecation|
||||value||
||Average method of||||
|Housing and building||15-24||4--6.53|
||useful life||||
||Average method of||||
|Special equipment||3-15||6.4--32.67|
||useful life||||
||Average method of||||
|General equipment||9-18|4.00%|5.33--10.67|
||useful life||||
||Average method of||||
|Transportation vehicle||9|2.00%|10.89|
||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.
2014 Annual Report of Hubei Sanonda Co., Ltd. 17. Construction in progress
Construction in process is measured at actual cost. Actual cost comprises construction costs, borrowing costs that are eligible for capitalization before the fixed assets being ready for their intended us and other relevant costs. Construction in process is transferred to fixed assets when the assets are ready for their intended use.
18. Borrowing costs
The borrowing costs shall include interest on borrowings, amortization of discounts or premiums on borrowings, ancillary expenses, and exchange balance on foreign currency borrowings. When the borrowing costs can be directly attributable to the construction or production of assets eligible for capitalization, and the asset disbursements or the borrowing costs have already incurred, and the construction or production activities which are necessary to prepare the asset for its intended use or sale have already started, the capitalization of borrowing costs begins. When the asset eligible for capitalization under acquisition and construction or production is ready for the intended use or sale, the capitalization of the borrowing costs shall be ceased. Other borrowing costs shall be recognized as expenses when incurred.
The to-be-capitalized amount of interests shall be determined in light of the actual interests incurred of the specially borrowed loan at the present period minus the income of interests earned on the unused borrowing loans as a deposit in the bank or as a temporary investment; the enterprise shall calculate and determine the to-be-capitalized amount on the general borrowing by multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements minus the general borrowing by the capitalization rate of the general borrowing used. The capitalization rate shall be calculated and determined in light of the weighted average interest rate of the general borrowing.
During the period of capitalization, the exchange balance on foreign currency special borrowings shall be capitalized; the exchange balance on foreign currency general borrowings shall be recorded into current profits and losses.
The term “assets eligible for capitalization” refers to the fixed assets, investment real estate, inventories and other assets, of which the acquisition and construction or production may take quite a long time to get ready for its intended use or for sale.
Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended.
19. Biological assets
20. Oil-gas assets
21. Intangible assets
(1) Pricing method, useful life and impairment test
The term "intangible asset" refers to the identifiable non-monetary assets possessed or controlled by enterprises which have no physical shape.
The intangible assets shall be initially measured according to its cost. The costs related with the intangible assets, if the economic benefits related to intangible assets are likely to flow into the enterprise and the cost of intangible assets can be measured reliably, shall be recorded into the costs of intangible assets; otherwise, it shall be recorded into current profits and losses upon the occurrence. The use right of land gained is usually measured as intangible assets. For the self-developed and constructed factories and other constructions, the related expenditures on use right of land and construction costs shall be respectively measured as intangible assets and fixed assets. For the purchased houses and buildings, the related payment shall be distributed into the payment for use right of
2014 Annual Report of Hubei Sanonda Co., Ltd. land and the payment for buildings, if it is difficult to be distributed, the whole payment shall be treated as fixed assets.
For intangible assets with a finite service life, from the time when it is available for use, the cost after deducting the sum of the expected salvage value and the accumulated impairment provision shall be amortized by straight line method during the service life. While the intangible assets without certain service life shall not be amortized.
At the end of period, the Group shall check the service life and amortization method of intangible assets with finite service life, if there is any change, it shall be regarded as a change of the accounting estimates. Besides, the Group shall check the service life of intangible assets without certain service life, if there is any evidence showing that the period of intangible assets to bring the economic benefits to the enterprise can be prospected, it shall be estimated the service life and amortized in accordance with the amortization policies for intangible assets with finite service life.
(2) Accounting polices 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 theydon’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 thatcan’t be identified as research expenditures or development expenditures, the occurred R& D expenses shall be all included in current profits and losses.
22. Impairment of long-term assets
For non-current financial Assets of fixed Assets, projects under construction, intangible Assets with limited service life, investing real estate with cost model, long-term equity investment of subsidiaries, cooperative enterprises and joint ventures, the Group should judge whether decrease in value exists on the date of balance sheet. Recoverable amounts should be tested for decrease in value if it exists. Other intangible Assets of reputation and uncertain service life and other non-accessible intangible assets should be tested for decrease in value no matter whether it exists.
If the recoverable amount is less than book value in impairment test results, the provision for impairment of differences should include in impairment loss. Recoverable amounts would be the higher of net value of asset fair value deducting disposal charges or present value of predicted cash flow. Asset fair value should be determined according to negotiated sales price of fair trade. If no sales agreement exists but with asset active market, fair value should be determined according to theBuyer’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
2014 Annual Report of Hubei Sanonda Co., Ltd. amounts for single Assets, recoverable amounts should be determined according to the belonging asset group. Asset group is the minimum asset combination producing cash flow independently.
In impairment test, book value of the business reputation in financial report should be shared to beneficial asset group and asset group combination in collaboration of business merger. It is shown in the test that if recoverable amounts of shared business reputation asset group or asset group combination are lower than book value, it should determine the impairment loss. Impairment loss amount should firstly be deducted and shared to the book value of business reputation of asset group or asset group combination, then deduct book value of all assets according to proportions of other book value of above assets in asset group or asset group combination except business reputation.
After the asset impairment loss is determined, recoverable value amounts would not be returned in future.
23. Amortization method of long-term deferred expenses
Long-term deferred expenses refer to general expenses with the apportioned period over one year (one year excluded) that have occurred but attributable to the current and future periods.
24. Payroll
(1) Accounting treatment of short-term compensation
Short-term compensation mainly including salary, bonus, allowances and subsidies, employee services and benefits, medical insurance premiums, birth insurance premium, industrial injury insurance premium, housing fund, labor union expenditure and personnel education fund, non-monetary benefits etc. The short-term compensation actually happened during the accounting period when the active staff offering the service for the Group should be recognized as liabilities and is included in the current gains and losses or relevant assets cost. Of which the non-monetary benefits should be measured according to the fair value.
(2) Accounting treatment of the welfare after demission
Welfare after demission mainly includes setting drawing plan. Of which setting the drawing plan mainly includes basic endowment insurance, unemployment insurance and annuity etc, and the corresponding payable and deposit amount should be included into the relevant assets cost or the current gains and losses when happen.
If an enterprise cancels the labor relationship with any employee prior to the expiration of the relevant labor contract or brings forward any compensation proposal for the purpose of encouraging the employee to accept a layoff, and should recognize the payroll liabilities occurred from the demission welfare base on the earlier date between the time when the Group could not one-sided withdraw the demission welfare which offered by the plan or layoff proposal owning to relieve the labor relationship and the date the Group recognizes the cost related to the reorganization of the payment of the demission welfare and at the same time includes which into the current gains and losses. But if the demission welfare is estimated that could not totally pay after the end of the annual report within 12 months, should be disposed according to other long-term payroll payment.
(3) Accounting treatment of the demission welfare
The inside employee retirement plan is treated by adopting the same principle with the above dismiss ion welfare. The group would recorded the salary and the social security insurance fees paid and so on from theemployee’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.
2014 Annual Report of Hubei Sanonda Co., Ltd. (4) Accounting treatment of the welfare of other long-term staffs
The other long-term welfare that the Group offers to the staffs, if met with the setting drawing plan, should be accounting disposed according to the setting drawing plan, while the rest should be disposed according to the setting revenue plan.
25. Estimated liabilities
The company should recognize the related obligation as a provision for liability when the obligation meets the following conditions: (1) That obligation is a present obligation of the enterprise; (2) It is probable that an outflow of economic benefits from the enterprise will be required to settle the obligation; (3) A reliable estimate can be made of the amount of the obligation.
On the balance sheet date, an enterprise shall take into full consideration of the risks, uncertainty, time value of money, and other factors pertinent to the Contingencies to measure the estimated liabilities in accordance with the best estimate of the necessary expenses for the performance of the current obligation.
When all or some of the expenses necessary for the liquidation of an estimated liabilities of an enterprise is expected to be compensated by a third party, the compensation should be separately recognized as an asset only when it is virtually certain that the reimbursement will be obtained. Besides, the amount recognized for the reimbursement should not exceed the book value of the estimated liabilities.
(1) Loss contract
The term "loss contract" refers to a contract whose performance of the contractual obligations will inevitably incur costs in excess of the expected economic benefits. Where an executory contract turns to be a loss contract, and the obligations occur from the loss contact meet with the above recognition conditions of the estimated liabilities, should recognize the confirmed part of the impairment losses (if any) which estimated to loss exceed the underlying assets of the contract as the estimated liabilities.
(2) Reorganization obligations
For the reorganization plan which is specific, formal as well as had been public announced, if meet with the above recognition conditions of the estimated liabilities, should recognize the amount of the estimated liabilities according to the direct expense related to the reorganization. For the reorganization obligations of the selling business, only when the Group commits to sell partly of the business (the time signed the restricted selling agreement), could recognize the relevant business of the reorganization.
26. Share-based payment
(1) Accounting treatment of share-based payment
Share-based payment refers to the transaction in order to require the service offered by the employees and other parties that grants the equity instruments or responsible for the liabilities recognized on the basis of the equity instruments. Share-based payment divided into equity-settled share-based payment and cash-settled share-based payment.
①Equity-settled share-based payment
It is a share-based payment settled by equity used for exchange the service offered by the staffs and be measured by the fair value on the grant date of granting the equity instrument for the staffs. When the services are fully rendered during vesting period or specified performance targets are met, based on the best estimate of the number of the vesting equity instruments during vesting period and according to the straight-line method to calculate and to include into the relevant cost or expenses/when using the vesting power immediately after the granting, should include the relevant cost or expenses on the grant date and correspondingly increase the capital reserve.
On each balance sheet date within the vesting period, the Group makes the best estimate base on the subsequent information newly required such as the changes of the vestingstaffs’ number to modify the number of the estimated vesting equity instrument. The
2014 Annual Report of Hubei Sanonda Co., Ltd. above influences of the estimation should be included into the current relevant cost or expenses and correspondingly adjust the capital surplus.
For equity-settled share-based payment made in return of other parties' services and the fair value of the other parties' services can be reliably measured, it will be measured based on the fair value of the other parties' services on the date of grant; if the fair value of the other parties' services cannot be reliably measured but the fair value of equity instruments can be reliably measured, it will be recognized in relevant costs or expenses and the capital reserves shall be adjusted accordingly at the fair value of such instruments on the date of the grant.
② Cash-settled share-based payment
The cash-settled share-based payment should be measured according to the fair value of the liabilities recognized based on the shares or other equity instrument undertaken by the Group. For the cash-settled share-based payment made in return for the rendering of employee services that may be exercised immediately after the grant, the fair value of the liability incurred by the Group shall, on the date of the grant, be recognized in relevant costs or expenses and the liabilities shall be increased accordingly. For cash-settled share-based payment made in return for the rendering of employee services that cannot be exercised until the services are fully provided during the vesting period or specified performance targets are met, on each balance sheet date within the vesting period, the services acquired in the current period shall, based on the best estimate of the number of exercisable instruments, be recognized in relevant costs or expenses and the corresponding liabilities at the fair value of the liability incurred by the Group.
On each balance sheet date and the settlement date before the settlement of the relevant liabilities, the Group should re-measure the fair value of the liabilities and its changes should be included in the current gains and losses.
(2) Relevant accounting treatment about revision and termination of share-based payment plans
As to the revision on the share-based payment plan made by the Group, if the fair value of the granted equity instrument increases after the revision, it shall recognize the increase of the service gained according to the increase of the fair value of equity instrument. The increase of the fair value of equity instrument refers to the balance between the fair value on the revising date of the equity instruments before and after the revision. If the total fair value of share-base payment decreases after the revision or adopting other ways against the staffs in the revision, it shall continue to conduct accounting treatment on the service gained as if the revision never happens, only if the Group cancel partial or total granted equity instrument.
During the vesting period, if the Group cancels the granted equity instrument, the Group shall treat the cancel of granted equity instrument as accelerating the vesting, and includes the amount shall be recognized during the remained vesting period into current profit and loss, and also recognize the capital reserves. If staffs or other party can choose to meet the non-vesting conditions but not meets with them during the vesting period, which will be treated as the cancel of granted equity instrument by the Group.
(3) Accounting treatment of the share-based payment transactions involved with the Group, the shareholders of the Group or the actual controllers
The share-based equity payment transaction which involved with the Group, the shareholders or actual controllers of the Group, if one between the settlement enterprises and the service accepted enterprises are within the Group and the others are not, should be accounting disposed according to the following regulations in the consolidation financial statement of the Group:
① For the settlement enterprises settle by the equity instruments of itself, should dispose the share-based payment transaction as the share payment of the equity settlement; besides the rest should be disposed as the cash-settled share-based payment.
If the settlement enterprises accept the investor of the service enterprise, should recognize as the long-term equity investment on the enterprises which accept service according to the fair value of the equity instruments on the granted date or the fair value which should undertake the liabilities and at the same time be recognized as capital reserve (other capital reserve) or liabilities.
② For the enterprises accept the service without settlement obligations or the equity instruments granted for the staffs of the enterprises are its own instruments, the share-based payment transaction should be disposed as the equity-settled share-based payment; for the enterprises accept the service with the settlement obligations and the equity instruments are not its own instruments, the share-based payment transaction should be disposed as the cash-settled share-based payment.
2014 Annual Report of Hubei Sanonda Co., Ltd. The share-based payment transaction occur among each enterprise of the Group, if the enterprises accept service and the settlement enterprises are not the same enterprises, the recognition and the measurement of the share-based payment transaction among each individual financial statement of the service accepting enterprises and the settlement enterprises according to the above principles. 27. Other financial instruments such as preferred shares and perpetual capital securities
(1) Distinguish between perpetual capital securities and preferred shares etc.
The financial instruments such as perpetual capital securities and preferred shares issued by the Group that meet with the following conditions at the same time are regarded as equity instruments:
① the financial instruments not including the contact obligations such as pay for the cash or other financial assets to other parties, or to exchange the financial assets or financial liabilities under the potential disadvantages;
② if in the future have to use or could use the own equity instruments of the enterprises to settle the financial instruments, for example, the financial instruments are non-derivative instruments, there would be no contact obligations for delivering the variable own equity instruments for settlement; if they are derivative instruments, the Group could only settle the financial instruments through exchange its own equity instruments with a fixed number for the cash or other financial assets with fixed amount.
The other financial instruments issued by the Group should be classified into financial liabilities except for the financial instruments which could be classified into equity instruments according to the above conditions.
For the financial instruments issued by the Group which are complex financial instruments, should be recognized as an item of liabilities according to the fair value of the liabilities and at the same time be recognized as “other equity instruments” according to the amount that the actual received amount deduct the fair value of the liabilities. The transaction expenses occur when issuing the complex financial instruments should be shared according each proportion of the total issue price between the liabilities and the equities.
(2) Accounting treatment of perpetual capital securities and preferred shares etc.
The financial instruments such as the perpetual capital securities and preferred shares which be classified as financial liabilities, its relevant interests, dividends (or stock dividends), profits or losses, and the profits or losses occur from the redemption or the re-financing, should both be included in the current gains and losses except for the borrowing expenses that meet with the capitalization conditions (see details to Notes VI 17 “Borrowing expenses”).
For the financial instruments such as the perpetual capital securities and preferred shares which be classified as equity instruments, their issuance (including re-financing), re-purchase, selling or logout, the Group dispose them as the changes of the equities and the relevant transaction expenses are also minus from the equities. The Group disposes the distribution of the holder of the equity instruments as the profits distribution.
The Group not confirms the changes of the fair value of the equity instruments.
28. Revenue
No revenue from selling goods may be recognized unless the following conditions are met simultaneously: the significant risks and rewards of ownership of the goods have been transferred to the buyer by the enterprise; the enterprise retains neither continuous management right that usually keeps relation with the ownership nor effective control over the sold goods; the relevant amount of revenue can be measured in a reliable way; the relevant economic benefits may flow into the enterprise; and the relevant costs incurred or to be incurred can be measured in a reliable way.
(2) Providing labor services
If the Group can reliably estimate the outcome of a transaction concerning the labor services it provides, it shall recognize the revenue from providing services employing the percentage-of-completion method on the date of the balance sheet. The completed
2014 Annual Report of Hubei Sanonda Co., Ltd. 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; and④ 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 incurredcouldn’t be compensated, thus no revenue shall be recognized.
Where a contract or agreement signed between Group and other enterprises concerns selling goods and providing of labor services, if the part of sale of goods and the part of providing labor services can be distinguished from each other and can be measured respectively, the part of sale of goods and the part of providing labor services shall be treated respectively. If the part of selling goods and the part of providing labor services can not be distinguished from each other, or if the part of sale of goods and the part of providing labor services can be distinguished from each other but can not be measured respectively, both parts shall be conducted as selling goods.
(3) Construction contract revenue
If the Group can reliably estimate the outcome of a construction contact, the contact revenue and the expenses should be recognized according to the percentage of completion method on the balance sheet date. The completion progress of the contact should be recognized according to the proportion of the accumulative actual occurred contact cost among the estimated total cost of the contact. If the result of the construction contact is reliable for estimate refers to meet the following conditions at the same time:① the total revenue of the contact could be reliable measured;② the economic benefits related to the contact probably flow into the enterprises;③ the contact cost actual occurred could be clearly distinguish as well as reliable measured;④ the completion progress of the contact and cost which would still occur for completing the contact could be reliable confirmed.
If the result of the construction contact could not be reliable estimated while the contact cost could be returned, the contact revenue should be recognized according to the returnable actual contact cost, and the contact cost should be recognized as contact expenses as the period it occurs; if the contact cost could not be returned, should recognized as contact expenses immediately when it occurs and not be confirmed as contact revenue. For the disadvantage factor no longer exist which lead the result of the construction contact could not be reliable estimated, the revenue and expenses related to the construction contact should be recognized according to the completion percentage method.
If the estimated total cost of the contact exceeds the total revenue, the estimated losses should be recognized as current expenses. The accumulatively occurred cost of the contact under construction and the accumulative confirmed gross margin (losses) as well as the settled price should be listed as the written-off net amount among the balance sheet. The amount the sum of the accumulatively occurred cost of the contact under construction and the accumulative confirmed gross margin (losses) which exceed the settled price should be listed as inventory; the part the settled price of the contact under construction exceeds the sum of the accumulatively occurred cost of the contact under construction and the accumulative confirmed gross margin (losses) should be listed as prepayments.
(4) Royalty revenue
In accordance with relevant contract or agreement, the amount of royalty revenue should be recognized as revenue on accrual basis. (5) Interest revenue
The amount of interest revenue should be measured and confirmed in accordance with the length of time for which theGroup’s monetary fund is used by others and the agreed interest rate.
2014 Annual Report of Hubei Sanonda Co., Ltd. 29. Government subsidies
(1) Judgment basis and accounting treatment of government subsidies related to assets
The government subsidies pertinent to assets shall be recognized as deferred income, equally distributed within the useful lives of the relevant assets, and included in the current profits and losses.
(2) Judgment basis and accounting treatment of government subsidies related to profits
The government subsidies pertinent to incomes shall be treated respectively in accordance with the circumstances as follows: those subsidies used for compensating the related future expenses or losses of the enterprise shall be recognized as deferred income and shall included in the current profits and losses during the period when the relevant expenses are recognized; or those subsidies used for compensating the related expenses or losses incurred to the enterprise shall be directly included in the current profits 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 2014 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 Group 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
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.
2014 Annual Report of Hubei Sanonda Co., Ltd. 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 theshareholders’ equity which should be included in other comprehensive income orshareholders’ 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 Group 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 Group should be listed as written-off net amount when having the legal rights of settling the current income tax assets and liabilities by net amount and the deferred income tax and liabilities is relevant to the income tax which be collected from the same taxpaying bodies by the same tax collection and administration department or is relevant to the different taxpaying bodies but during each period which there is significant reverse of the deferred income assets and liabilities in the future and among which the involved taxpaying bodies intend to settle the current income tax and liabilities by net amount or are at the same time acquire the asset as well as liquidate the liabilities.
31. Lease
(1) Accounting treatment of operating lease
Business of operating leases recorded by the Group as the lessee
The rent expenses from operating leases shall be recorded by the lessee in the relevant asset costs or the profits and losses of the current period by using the straight-line method over each period of the lease term. The initial direct costs shall be recognized as the profits and losses of the current period. The contingent rents shall be recorded into the profits and losses of the current period in which they actually arise.
Business of operating leases recorded by the Group as the lessor
The rent incomes from operating leases shall be recognized as the profits and losses of the current period by using the straight-line method over each period of the lease term. The initial direct costs of great amount shall be capitalized when incurred, and be recorded into current profits and losses in accordance with the same basis for recognition of rent incomes over the whole lease term. The initial direct costs of small amount shall be recorded into current profits and losses when incurred. The contingent rents shall be recorded into the profits and losses of the current period in which they actually arise.
(2) Accounting treatments of financial lease
Business of finance leases recorded by the Group as the lessee
On the lease beginning date, the Group shall record the lower one of the fair value of the leased asset and the present value of the
2014 Annual Report of Hubei Sanonda Co., Ltd. minimum lease payments on the lease beginning date as the entering value in an account, recognize the amount of the minimum lease payments as the entering value in an account of long-term account payable, and treat the balance between the recorded amount of the leased asset and the long-term account payable as unrecognized financing charges. Besides, the initial direct costs directly attributable to the leased item incurred during the process of lease negotiating and signing the leasing agreement shall be recorded in the asset value of the current period. The balance through deducting unrecognized financing charges from the minimum lease payments shall be respectively stated in long-term liabilities and long-term liabilities due within 1 year.
Unrecognized financing charges shall be adopted by the effective interest rate method in the lease term, so as to calculate and recognize current financing charges. The contingent rents shall be recorded into the profits and losses of the current period in which they actually arise.
Business of finance leases recorded by the Group as the lessor
On the beginning date of the lease term, the Group shall recognize the sum of the minimum lease receipts on the lease beginning date and the initial direct costs as the entering value in an account of the financing lease values receivable, and record the unguaranteed residual value at the same time. The balance between the sum of the minimum lease receipts, the initial direct costs and the unguaranteed residual value and the sum of their present values shall be recognized as unrealized financing income. The balance through deducting unrealized financing incomes from the finance lease accounts receivable shall be respectively stated in long-term claims and long-term claims due within 1 year.
Unrecognized financing incomes shall be adopted by the effective interest rate method in the lease term, so as to calculate and recognize current financing revenues. The contingent rents shall be recorded into the profits and losses of the current period in which they actually arise.
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 Group 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 Notes IV. 12 “Divided as held-to-sold assets”
33. Changes in main accounting policies and estimates
(1) Change of accounting policies
√ Applicable□ Inapplicable
||||
|-|-|-|
|Content and reason|Vetting process|Notes|
|The Group had no joint control or|||
|significant influences on the investees|||
|before executing the No.2 of ASBE|||
||New criterions issued by Execution||
|–Long-term Equity Investment (revised in|||
||Treasury Department||
|2014), and the equity investment which|||
|had no quotation in the active market as|||
|well as its fair value could be not reliable|||

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||
|-|-|-|-|
|measured should be measured as long-term||||
|equity investment by cost method. After||||
|executed the No.2 of ASBE –Long-term||||
|Equity Investment (revised in 2014), the||||
|Group measured the equity investment||||
|which didn’t have joint control or||||
|significant influences on the investees and||||
|had no quotation in the active market as||||
|well as its fair value could not be reliable||||
|measured as available-for-sale financial||||
|assets. The Group executed the accounting||||
|treatment of the above changes of||||
|accounting policies by retrospective||||
|application.||||
|Name of criterions|Notes of the content and the influences|The affected amount of the relevantfinancial statement items on 1 Jan. 2014/ofY2013||
|||Name of items|Affected amountIncrease+/Decrease-|
|No.2 of ASBE–Long-term EquityInvestment|The Group had no joint control or significant influenceson the investees before executing the No.2 of ASBE–Long-term Equity Investment (revised in 2014), and theequity investment which had no quotation in the activemarket as well as its fair value could be not reliablemeasured should be measured as long-term equityinvestment by cost method. After executed the No.2 ofASBE –Long-term Equity Investment (revised in 2014),the Group measured the equity investment which didn’thave joint control or significant influences on theinvestees and had no quotation in the active market aswell as its fair value could not be reliable measured asavailable-for-sale financial assets. The Group executed theaccounting treatment of the above changes of accountingpolicies by retrospective application.|Available-for-salefinancial assets|+9,153,782.63|
|||Long-term equityinvestment|-9,153,782.63|

(2) Change of main accounting estimates
□ Applicable√ Inapplicable
2014 Annual Report of Hubei Sanonda Co., Ltd. 34. Other
VI. Taxation
1. Main taxes and tax rate
||||
|-|-|-|
|Category of taxes|Tax basis|Tax rate|
|VAT|Taxable income|13% 17%|
|Business tax|Taxable income|5%|
|Urban maintenance and construction tax|Turnover tax payable|5% 7%|
|Enterprise income tax|Income tax payable|25%|
|Education surtax|Turnover tax payable||

Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
|||
|-|-|
|Name|Income tax rate|

2. Tax preference
3. Other
VII. Notes on major items in consolidated financial statements of the Company
1. Monetary funds
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Cash on hand||1,229.00|
|Bank deposits|418,847,736.46|410,064,692.21|
|Other monetary funds|4,500,000.00|4,000,000.00|
|Total|423,347,736.46|414,065,921.21|

 Other notes
Other monetary funds is the cash deposit of issuing the bank deposit and exchange bill.
2. Financial assets measured by fair value and the changes be included in the current gains and losses Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

Other notes:
2014 Annual Report of Hubei Sanonda Co., Ltd. 3. Derivative financial assets
□ Applicable√ Inapplicable
4. Notes receivable
(1) Notes receivable listed by category
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Bank acceptance bill|2,874,466.50|41,103,985.15|
|Total|2,874,466.50|41,103,985.15|

 (2) Notes receivable pledged by the Company at the period-end
Unit: RMB Yuan
|||
|-|-|
|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 Yuan
||||
|-|-|-|
||Amount of recognition termination at the|Amount of not terminated recognition at|
|Item|||
||period-end|the period-end|
|Bank acceptance bill|220,961,098.16||
|Total|220,961,098.16||

(4) Notes transferred to accounts receivable because drawer of the notes fails to executed the contract or agreement
Unit: RMB Yuan
|||
|-|-|
||Amount of the notes transferred to accounts receivable at the|
|Item||
||period-end|
|Commercial acceptance bill|0.00|
|Total|0.00|

 Other notes
2014 Annual Report of Hubei Sanonda Co., Ltd. 5. Accounts receivable
(1) Accounts receivable disclosed by category
Unit: RMB Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|||||Withdrawalproportion|||||||
|Category|||||Book||||||
|||Proportio|||||Proportio||Withdrawal|Book value|
||Amount||Amount||value|Amount||Amount|||
|||n|||||n||proportion||
|Accounts receivable||||8.83%|||||||
|withdrawn bad debt|||||||||||
||214,581,||18,946,0||195,635,9|244,582||35,415,63||209,166,44|
|provision according||99.73%|||||99.88%||14.48%||
||941.01||28.26||12.75|,081.41||4.25||7.16|
|to credit risks|||||||||||
|characteristics|||||||||||
|Accounts receivable|||||||||||
|with insignificant|||||||||||
|single amount for|584,457.||584,457.|||302,796||302,796.5|||
|||0.27%||100.00%|||0.12%||100.00%||
|which bad debt|52||52|||.52||2|||
|provision separately|||||||||||
|accrued|||||||||||
||215,166,||19,530,4|9.08%|195,635,912.75|244,884||35,718,43||209,166,447.16|
|Total||100.00%|||||100.00%||14.59%||
||398.53||85.78|||,877.93||0.77|||

 Accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end
□ Applicable√ Inapplicable
In the groups, accounts receivable adopting aging analysis method to accrue bad debt provision:
√Applicable□ Inapplicable
Unit: RMB Yuan
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Accounts receivable|Bad debt provision|Withdrawal proportion|
|Subitem within 1 year||||
|Within 1 year|205,795,081.66|10,289,754.09|5.00%|
|Subtotal within 1 year|205,795,081.66|10,289,754.09|5.00%|
|1 to 2 years|0.46|0.05|10.00%|
|2 to 3 years|110,148.25|33,044.48|30.00%|
|Over 3 years|8,676,710.64|8,623,229.64|99.38%|
|3 to 4 years|102,747.00|51,373.50|50.00%|
|4 to 5 years|4,215.00|2,107.50|50.00%|

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||
|-|-|-|-|
|Over 5 years|8,569,748.64|8,569,748.64|100.00%|
|Total|214,581,941.01|18,946,028.26|8.83%|

 Notes of the basis of recognizing the group:
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable√ Inapplicable
In the groups, accounts receivable adopting other methods to accrue bad debt provision:
Accounts receivable with insignificant single amount for which bad debt provision separately accrued at the year-end
||||||
|-|-|-|-|-|
|Accounts receivble(classfied by units)|Year end balance||||
||Accountsreceivable|Bad debtprovision|Withdrawproportion|Withdraw reason|
|Jiangxi Nanchang Red Valley Plant Protection Center|584,457.52|584,457.52|100.00%|No result after multiple collectionand estimate to be unable to takeback|
|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 131,016.13; the amount of the reversed or collected part during the reporting period was of RMB 000.
Of which the significant amount of the reversed or collected part during the reporting period was of RMB 000:
Unit: RMB Yuan
||||
|-|-|-|
|Name of the units|Reversed or collected amount|Method|

(3) The actual write-off accounts receivable
Unit: RMB Yuan
|||
|-|-|
|Item|Amount|
|Actual write-off accounts receivable|16,318,961.12|

 Of which the significant actual write-off accounts receivable:
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||||||Whether occurred|
|Name of the units|Nature|Amount|Reason|Process|from the related|
||||||transactions|
|||||Final notice and||
|Mexico Tekchem|||Bankrupted and no|||
||Goods payment|7,874,358.80||resolution of Board|No|
|Company|||asset for pay|||
|||||of Directors||
||||Over 5 years and had|External||
|Fujian Fu’an||||||
||Goods payment|516,899.55|no result of|authentication and|No|
|Pesticide Factory||||||
||||collection|resolution of Board||

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||||
|-|-|-|-|-|-|
|||||of Directors||
||||Over 5 years and had|Final notice and||
|Sanonda Qichun||||||
||Goods payment|338,120.00|no result of|resolution of Board|No|
|Pesticide Factory||||||
||||collection|of Directors||
|Fujian Minhou East|||Over 5 years and had|Final notice and||
|Asia Chemical|Goods payment|289,584.90|no result of|resolution of Board|No|
|Factory|||collection|of Directors||
||||Over 5 years and had|Final notice and||
|Hainan Jiaheda Co.,||||||
||Goods payment|280,974.10|no result of|resolution of Board|No|
|Ltd.||||||
||||collection|of Directors||
|Jiangsu Huai’an|||Over 5 years and had|Final notice and||
|Sanonda Agricultural|Goods payment|256,929.00|no result of|resolution of Board|No|
|Materials Co., Ltd.|||collection|of Directors||
|Guangdong|||Over 5 years and had|Final notice and||
|Guangzhou Jindeda|Goods payment|255,695.80|no result of|resolution of Board|No|
|Chemical Co., Ltd.|||collection|of Directors||
|Mianyang Company||||||
|of Jiangsu Nanjing|||Over 5 years and had|Final notice and||
|Supply and|Goods payment|244,500.00|no result of|resolution of Board|No|
|Marketing|||collection|of Directors||
|Cooperatives||||||
||||Over 5 years and had|Final notice and||
|Wangjing Mountain|Goods payment|210,985.37|no result of|resolution of Board|No|
||||collection|of Directors||
|Guangdong||||||
|Zhanjiang|||Over 5 years and had|Final notice and||
|Agriculture, Rural|Goods payment|193,888.08|no result of|resolution of Board|No|
|Areas and Farmers|||collection|of Directors||
|service Co., Ltd.||||||
|Total|--|10,461,935.60|--|--|--|

Notes of the write-off the accounts receivable:
(4) Top 5 of the closing balance of the accounts receivable colleted according to the arrears party
||||||
|-|-|-|-|-|
|Name of units|Year end balance|Aging|Proportion of thetotal year end balance ofthe accounts receivable(%)|Bad debt provision|
|Customerreceivable A|23,204,165.85|Within 1 year|10.78|1,160,208.29|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
|Customerreceivable B|20,109,257.16|Within 1 year|9.35|1,005,462.86|
|Customerreceivable C|13,511,850.00|Within 1 year|6.28|675,592.50|
|Customerreceivable D|12,915,740.44|Within 1 year|6.00|645,787.02|
|Customerreceivable E|12,650,400.00|Within 1 year|5.88|632,520.00|
|Total|82,391,413.45||38.29|4,119,570.67|

(5) Account receivable which terminate the recognition owning to the transfer of the financial assets
||||
|-|-|-|
|Method|Amount|Gains or losses related to the recognitiontermination|
|Outright sale of accounts receivable|7,598,431.27|-1,139,764.69|
|Toal|7,598,431.27|-1,139,764.69|

Notes: In 2004, the Company transferred the default accounts receivable of RMB 7,598,431.27 of the foreign customer KEMTRADE CO., LTD by the way of no attaching the recourse right to SINOSURE, and had took back85% of the goods payment which SINOSURE compensated according to the agreement while the remained15% relevant losses recognized was of RMB 1,139,764.69. (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 Yuan
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Aging|||||
||Amount|Proportion|Amount|Proportion|
|Within 1 year|19,334,348.47|99.43%|42,978,528.26|99.85%|
|1 to 2 years|60,417.69|0.31%|63,500.00|0.15%|
|2 to 3 years|50,000.00|0.26%|||
|Total|19,444,766.16|--|43,042,028.26|--|

Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in time:
2014 Annual Report of Hubei Sanonda Co., Ltd. (2) Top 5 of the closing balance of the prepayment colleted according to the prepayment target
||||||
|-|-|-|-|-|
|Name of the units|Relationship|Amount|Time|Reason|
|Supplier A|Non-related party|5,400,000.00|Within 1 year|Goods had not arrived|
|Supplier B|Non-related party|5,399,795.84|Within 1 year|Goods had not arrived|
|Supplier C|Non-related party|1,027,366.63|Within 1 year|Goods had not arrived|
|Supplier D|Non-related party|2,614,661.60|Within 1 year|Goods had not arrived|
|Supplier E|Non-related party|1,913,915.53|Within 1 year|Goods had not arrived|
|Total|--|16,355,739.60|--|--|

Other notes:
7. Interest receivable
(1) Category of interest receivable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

(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 Yuan
||||
|-|-|-|
|Item (or investees)|Closing balance|Opening balance|

(2) Significant dividend receivable aged over 1 year
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|||||Whether occurred|
|Item (or investees)|Closing balance|Aging|Reason|impairment and its|
|||||judgment basis|

Other notes:
2014 Annual Report of Hubei Sanonda Co., Ltd. 9. Other accounts receivable
(1) Other accounts receivable disclosed by category
Unit: RMB Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provisionWithdrawalAmountproportion|||Book balance||Bad debt provision|||
|Category|||||Book||||||
|||Proportio|||||Proportio||Withdrawal|Book value|
||Amount||Amount||value|Amount||Amount|||
|||n|||||n||proportion||
|Other accounts||||21.36%|||||||
|receivable withdrawn|||||||||||
||25,024,1||5,344,60||19,679,59|13,151,||5,927,070||7,224,391.0|
|bad debt provision||100.00%|||||100.00%||45.07%||
||98.47||1.82||6.65|461.32||.27||5|
|according to credit|||||||||||
|risks characteristics|||||||||||
||25,024,1||5,344,60|21.36%|19,679,596.65|13,151,||5,927,070||7,224,391.05|
|Total||100.00%|||||100.00%||45.07%||
||98.47||1.82|||461.32||.27|||

 Other accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end□ Applicable√ Inapplicable
In the groups, other accounts receivable adopting aging analysis method to accrue bad debt provision:
√Applicable□ Inapplicable
Unit: RMB Yuan
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Other accounts receivable|Bad debt provision|Withdrawal proportion|
|Subitem within 1 year||||
|Within 1 year|809,419.01|40,470.96|5.00%|
|Subtotal within 1 year|809,419.01|40,470.96|5.00%|
|1 to 2 years|212,000.00|21,200.00|10.00%|
|2 to 3 years|330,784.57|99,235.37|30.00%|
|Over 3 years|5,205,888.31|5,183,695.49|99.57%|
|3 to 4 years|10,000.00|5,000.00|50.00%|
|4 to 5 years|34,385.65|17,192.83|50.00%|
|Over 5 years|5,161,502.66|5,161,502.66|100.00%|
|Total|6,558,091.89|5,344,601.82|81.50%|

 Notes of the basis of recognizing the group:
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable√ Inapplicable
2014 Annual Report of Hubei Sanonda Co., Ltd. In the groups, other accounts receivable adopting other methods to accrue bad debt provision:
√ Applicable□ Inapplicable
||||
|-|-|-|
|Name of group|||
||Other accounts receivable|Bad debt provision|
|Non-risk group|18,466,106.58||
|Total|18,466,106.58||

Notes: the content of the non-risk group is the export tax refunds receivable.
(2) Accounts receivable withdraw, reversed or collected during the reporting period
The withdrawal amount of the bad debt provision during the reporting period was of RMB 000; the amount of the reversed or collected part during the reporting period was of RMB 243,239.95.
Of which the significant amount of the reversed or collected part during the reporting period was of RMB 000:
Unit: RMB Yuan
||||
|-|-|-|
|Name of units|Reversed or collected amount|Method|

(3) The actual write-off other accounts receivable
Unit: RMB Yuan
|||
|-|-|
|Item|Amount|
|Actual write-off other accounts receivable|339,228.50|

 Of which the significant write-off other accounts receivable:
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||||||Whether occurred|
|Name of units|Nature|Amount|Reason|Process|from the related|
||||||transactions|
|||||External||
||||Over 5 years and had|||
|||||authentication and||
|Ximen distribution|Pretty cash|295,307.95|no result of||No|
|||||resolution of Board||
||||collection|||
|||||of Directors||
|||||External||
||||Over 5 years and had|||
|||||authentication and||
|Special schools|Pretty cash|20,729.20|no result of||No|
|||||resolution of Board||
||||collection|||
|||||of Directors||
|||||External||
||||Over 5 years and had|||
|||||authentication and||
|Jin Daomao|Pretty cash|15,900.00|no result of||No|
|||||resolution of Board||
||||collection|||
|||||of Directors||
|Guan Yuping|Pretty cash|5,380.09|Over 5 years and had|External|No|

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||||
|-|-|-|-|-|-|
||||no result of|authentication and||
||||collection|resolution of Board||
|||||of Directors||
|||||External||
||||Over 5 years and had|||
|||||authentication and||
|Deng Chao|Pretty cash|1,911.26|no result of||No|
|||||resolution of Board||
||||collection|||
|||||of Directors||
|Total|--|339,228.50|--|--|--|

Notes of write-off other accounts receivable:
(4) Other accounts receivable classified by the nature of accounts
Unit: RMB Yuan
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Export tax refunds|18,466,106.58|2,762,341.35|
|Liquidation amount of investment fund|3,398,275.80|3,398,275.80|
|Cash pledge|1,029,784.57|1,029,784.57|
|Pretty cash|714,696.62|1,980,794.63|
|Accounts receivable of transfer the shares|||
|||3,000,000.00|
|of the subsidiaries|||
|Liquidation amount of goods payment|548,500.00|548,500.00|
|Freight|317,788.09|66,751.99|
|Margin|100,000.00|100,000.00|
|Other|449,046.81|265,012.98|
|Total|25,024,198.47|13,151,461.32|

 (5) Top 5 of the closing balance of the other accounts receivable colleted according to the arrears party Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|||||Proportion of the|Closing balance of|
|||||total year end|bad debt provision|
|Name of units|Nature|Closing balance|Aging|balance of the||
|||||accounts receivable||
|||||(%)||
|Jingzhou Center||||||
||Export rebates recei|||||
|Subtreasury of State||18,466,106.58|Within 1 year|73.79%||
||vable|||||
|Treasury||||||
|Shantou Biyue|Settlement payment|||||
|||3,125,000.00|Over 5 years|12.49%|3,125,000.00|
|Plastic Co., Ltd.|for unreturned|||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||||
|-|-|-|-|-|-|
||investment accounts|||||
|Hubei Jingzhou||||||
|Shashi Agricultural|Settlement payment|||||
|||548,500.00|Over 5 years|2.19%|548,500.00|
|Production Materials|for goods|||||
|Co., Ltd.||||||
|Jingzhou Local||||||
||Advanced freight|317,788.09|Within 1 year|1.27%|15,889.40|
|railway Co., Ltd.||||||
|Jingzhou Production||||||
|Safety Supervision|Cash pledge|300,000.00|Over 5 years|1.20%|300,000.00|
|Bureau||||||
|Total|--|22,757,394.67|--|90.94%|3,989,389.40|

 (6) Accounts receivable involved with government subsidies
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||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
(1) Category of inventory
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Falling price|||Falling price||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Raw materials|34,032,778.64|1,215,718.28|32,817,060.36|57,168,007.21|145,674.50|57,022,332.71|
|Goods in process|74,264,991.68|2,102,897.22|72,162,094.46|66,802,557.42|552,451.70|66,250,105.72|
|Inventory goods|237,121,880.01|12,537,290.76|224,584,589.25|134,237,472.95|2,831,097.35|131,406,375.60|
|Turnover|||||||
||977,861.98||977,861.98|3,595,643.85||3,595,643.85|
|materials|||||||
|Total|346,397,512.31|15,855,906.26|330,541,606.05|261,803,681.43|3,529,223.55|258,274,457.88|

2014 Annual Report of Hubei Sanonda Co., Ltd. (2) Falling price reserves of inventory
Unit: RMB Yuan
|||||||||
|-|-|-|-|-|-|-|-|
||||Increased amount||Decreased amount|||
|Item|Opening balance||||Reverse or||Closing balance|
||||Withdrawal|Other||Other||
||||||write-off|||
|Raw materials|145,674.50||1,215,718.28||145,674.50||1,215,718.28|
|Goods in process|552,451.70||2,102,897.22||552,451.70||2,102,897.22|
|Inventory goods|2,831,097.35||13,614,073.21||3,907,879.80||12,537,290.76|
|Total|3,529,223.55||16,932,688.71||4,606,006.00||15,855,906.26|
|Item||Specific basis of withdrawal of falling pricereserves of inventory|||Reasons for reversal|||
|Raw materials||Inventory cost larger than its variable netamount||||||
|Goods in process||Inventory cost larger than its variable netamount||||||
|Inventory goods||Inventory cost larger than its variable netamount||||||
|Turnover materials||||||||
|Consumable biologicalassets||||||||

(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 Yuan
|||
|-|-|
|Item|Amount|

Other notes:
11. Assets divided as held-to-sold
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||||Estimated disposal||
|Item|Closing book value|Fair value||Estimated disposal time|
||||expense||

Other notes:
2014 Annual Report of Hubei Sanonda Co., Ltd. 12. Non-current assets due within 1 year
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

Other notes:
13. Other current assets
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

Other notes:
14. Available-for-sale financial assets
(1) List of available-for-sale financial assets
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Depreciation|||Depreciation||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Available-for-sale equity|||||||
||9,153,782.63||9,153,782.63|9,153,782.63||9,153,782.63|
|instruments|||||||
|Measured by cost|9,153,782.63||9,153,782.63|9,153,782.63||9,153,782.63|
|Total|9,153,782.63||9,153,782.63|9,153,782.63||9,153,782.63|

 (2) Available-for-sale financial assets measured by fair value at the period-end
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Category|Cost of the equity||Changed amount of the||
||instruments/amortized||fair value accumulatively|Withdrawn impairment|
|||Fair value|||
||cost of the liabilities||included in other|amount|
||instruments||comprehensive income||

(3) Available-for-sale financial assets measured by cost at the period-end
Unit: RMB Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||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|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
|Hubei|8,008,982.|8,008,982.||1,716,466.|
||||0.71%||
|Bank|63|63||00|
|Hubei|||||
|Shendian|||||
|Auto|564,000.00|564,000.00|0.60%||
|Motor Co.,|||||
|Ltd.|||||
|Guangxi|||||
|Zhongding|580,800.00|580,800.00|1.41%||
|Co., Ltd.|||||
||9,153,782.|9,153,782.||1,716,466.|
|Total|||--||
||63|63||00|

 (4) Changes of the impairment of the available-for-sale financial assets during the reporting period
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|||Withdrawalamount|Of which:|Decreasedamount|Of which:||
||Balance of the|||||Balance of the|
||||transferred from||recovered and||
||withdrawn|||||withdrawn|
|Category|||other||reversed after the||
||impairment at the|||||impairment at the|
||||comprehensive||period of the fair||
||period-begin|||||period-end|
||||income||value||

(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 Yuan
||||||||
|-|-|-|-|-|-|-|
|Item of|||Falling range ofthe fair valueagainst the cost|Continued fallingtime (month)|||
||||||Withdrawn|Reason of not|
|available-for-sale||Fair value of the|||||
||Investment cost||||amount of|withdrawn the|
|equity||period-end|||||
||||||impairment|impairment|
|instruments|||||||

Other notes
15. Investment held-to-maturity
(1) List of investment held-to-maturity
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Impairment||Book balance|Impairment||
||Book balance||Book value|||Book value|
|||provision|||provision||

2014 Annual Report of Hubei Sanonda Co., Ltd. (2) Significant held-to-maturity investment at the period-end
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Bond item|Par value|Nominal interest rate|Actual interest rate|Due date|

 (3) Re-classified held-to-maturity investment during the reporting period
Other notes
16. Long-term accounts receivable
(1) List of long-term accounts receivable
Unit: RMB Yuan
|||||||||
|-|-|-|-|-|-|-|-|
||Closing balance|||Opening balance||||
||||||||Discount rate|
|Item||Bad debtprovision|||Bad debt|Book value||
||Book balance||Book value|Book balance|||range|
||||||provision|||

(2) Long-term accounts receivable which terminate the recognition owning to the transfer of the financial assets
(3) The amount of the assets and liabilities formed by the transfer and the continues involvement of long-term accounts receivable
Other notes
17. Long-term equity investment
Unit: RMB Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||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
2014 Annual Report of Hubei Sanonda Co., Ltd. 18. Investment property
(1) Investment property adopted the cost measurement mode
√ Applicable□ Inapplicable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Houses and buildings|Land use right|construction in progress|Total|
|1. Opening balance|6,010,000.00|||6,010,000.00|
|2. Increased amount|||||
||1,924,843.00|||1,924,843.00|
|of the period|||||
|(2) Transfer of|||||
|inventory\fixed|||||
||1,924,843.00|||1,924,843.00|
|assets\project under|||||
|construction|||||
|4. Closing balance|7,934,843.00|||7,934,843.00|
|1.Opening balance|1,855,587.50|||1,855,587.50|
|2. Increased amount|||||
||715,327.22|||715,327.22|
|of the period|||||
|(1) Withdrawal or|||||
||240,400.00|||240,400.00|
|amortization|||||
|(2) Transfer of fixed|||||
||474,927.22|||474,927.22|
|assets|||||
|4. Closing balance|2,570,914.72|||2,570,914.72|
|1. Closing book||||5,363,928.28|
||5,363,928.28||||
|value|||||
|2. Opening book||||4,154,412.50|
||4,154,412.50||||
|value|||||

(2) Investment property adopted fair value measurement mode
□ Applicable√ Inapplicable
(3) Details of investment property failed to accomplish certification of property
Unit: RMB Yuan
||||
|-|-|-|
|Item|Book value|Reason|

Other notes
2014 Annual Report of Hubei Sanonda Co., Ltd. 19. Fixed assets
(1) List of fixed assets
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Houses and|Machinery|Electronic|Transportation|||
|Item|||||Other|Total|
||buildings|equipment|equipment|equipment|||
|||1,428,877,957.|||||
|1. Opening balance|683,773,706.22|||11,920,626.51||2,124,572,290.46|
|||73|||||
|2. Increased amount of|||||||
||35,101,793.77|64,593,798.16||861,887.18||100,557,479.11|
|the period|||||||
|(1) Purchase||17,328,498.07||861,887.18||18,190,385.25|
|(2) Transfer of project|||||||
||35,101,793.77|47,265,300.09||||82,367,093.86|
|under construction|||||||
|3. Decreased amount of|||||||
||3,155,155.67|32,199,756.82||1,640,376.52||36,995,289.01|
|the period|||||||
|(1) Disposal or Scrap|1,230,312.67|32,199,756.82||1,640,376.52||35,070,446.01|
|(2) Re-classified as|||||||
||1,924,843.00|||||1,924,843.00|
|investment property|||||||
|||1,461,271,999.|||||
|4. Closing balance|715,720,344.32|||11,142,137.17||2,188,134,480.56|
|||07|||||
|1.Opening balance|172,101,069.18|605,502,571.04||7,935,514.55||785,539,154.77|
|2. Increased amount of|||||||
||30,053,238.63|144,185,900.47||31,276.65||174,270,415.75|
|the period|||||||
|(1) Withdrawal|30,053,238.63|144,185,900.47||31,276.65||174,270,415.75|
|3. Decreased amount of|||||||
||1,705,239.89|32,071,901.86||1,535,093.63||35,312,235.38|
|the period|||||||
|(1) Disposal or Scrap|1,230,312.67|32,071,901.86||1,535,093.63||34,837,308.16|
|(2) Re-classified as|||||||
||474,927.22|||||474,927.22|
|investment property|||||||
|4. Closing balance|200,449,067.92|717,616,569.65||6,431,697.57||924,497,335.14|
|1.Opening balance|2,848,203.34|11,962,547.32||||14,810,750.66|
|4. Closing balance|2,848,203.34|11,962,547.32||||14,810,750.66|
|1. Closing book value|512,423,073.06|731,692,882.10||4,710,439.60||1,248,826,394.76|
|2. Opening book value|508,824,433.70|811,412,839.37||3,985,111.96||1,324,222,385.03|

(2) List of temporarily idle fixed assets
Unit: RMB Yuan
2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||||
|-|-|-|-|-|-|
|||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 Yuan
||||||
|-|-|-|-|-|
|||Accumulative|||
|Item|Original book value||Impairment provision|Book value|
|||depreciation|||

(4) Fixed assets leased out from operation lease
Unit: RMB Yuan
|||
|-|-|
|Item|Closing book value|
|Houses and buildings|5,363,928.28|

 (5) Details of fixed assets failed to accomplish certification of property
Unit: RMB Yuan
||||
|-|-|-|
|Item|Book value|Reason|

Other notes
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Impairment||2014 An|nual Report of HubImpairment|ei Sanonda Co., Lt|
||Book balance||Book value|Book balance||Book value|
|||provision|||provision||
|Ionic membrane|||||||
||222,497,321.45||222,497,321.45|159,083,425.12||159,083,425.12|
|project (Zone B)|||||||
|Salt mine and|||||||
|sodium nitrate|136,688,326.31||136,688,326.31|42,660,410.65||42,660,410.65|
|(Zone A)|||||||
|110KV|||||||
|transformer|||||||
|substation and|47,436,445.22||47,436,445.22|10,645,849.06||10,645,849.06|
|exterior line|||||||
|(Zone A)|||||||
|Pesticide Plant I|||||||
|spermine|||||||
|amination|7,114,614.90||7,114,614.90||||
|wastewater|||||||
|treatment project|||||||
|Dynamic 110KV|||||||
|ionic membrane|||||||
||3,787,115.96||3,787,115.96||||
|substation access|||||||
|system|||||||
|Pesticide Plant III|||||||
|glyphosphate|||||||
|environmental||||18,207,615.67||18,207,615.67|
|optimization|||||||
|project|||||||
|Pesticide Plant II|||||||
|dichloromethane|||||||
|||||2,148,232.29||2,148,232.29|
|exhaust recycling|||||||
|project|||||||
|Pesticide Plant II|||||||
|acephate process|||||||
|||||604,338.30||604,338.30|
|optimization|||||||
|project|||||||
|Pesticide Plant II|||||||
|trimethyl|||||||
|||||524,354.85||524,354.85|
|technical|||||||
|transformation|||||||
|Sewage refined|||||||
|salt water||||506,802.67||506,802.67|
|transportation|||||||
|Newly-built|||||||
||106,837.62||106,837.62|106,837.62||106,837.62|
|clean-water|||||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
|reservoir project|||||
|of sewage|||||
|treatment plant|||||
|Other|6,226,360.24|6,226,360.24|||
|Total|423,857,021.70|423,857,021.70|234,487,866.23|234,487,866.23|

 20. Construction in progress
(1) List of construction in progress
Unit: RMB Yuan (2) Changes of significant construction in progress
Unit: RMB Yuan
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||Of|||
|||||Amount|||Proporti|||which:|||
||||||||||Accumul||||
|||||that|||on|||the|Capitaliz||
||||||Other||||ative||||
||||Increase|transferr|||estimate|||amount|ation rate||
||Estimate||||decrease||||amount||||
|Name o f||Opening|d amount|ed to||Closing|d of the|Project||of the|of the|Capital|
||d||||d amount||||of||||
|item||balance|of the|fixed||balance|project|progress||capitaliz|interests|resources|
||number||||of the||||capitaliz||||
||||period|assets of|||accumul|||ed|of the||
||||||period||||ed||||
|||||the|||ative|||interests|period||
||||||||||interests||||
|||||period|||input|||of the|||
|||||||||||period|||
|Pesticide|||||||||||||
|Plant III|||||||||||||
|glyphosp|||||||||||||
|||||||||||||Loans to|
|hate|||||||||||||
||28,800,0|18,207,6|11,973,3|30,180,9|||||121,174.|||financia|
|environ|||||||104.80%|100.00|||||
||00.00|15.67|66.20|81.87|||||54|||l institut|
|mental|||||||||||||
|||||||||||||ions|
|optimiza|||||||||||||
|tion|||||||||||||
|project|||||||||||||
|Pesticide|||||||||||||
|Plant II|||||||||||||
|||||||||||||Loans to|
|dichloro|||||||||||||
||2,450,00|2,148,23|329,554.|2,477,78|||||11,349.2|||financial|
|methane|||||||101.13%|100.00|||||
||0.00|2.29|71|7.00|||||0|||institutio|
|exhaust|||||||||||||
|||||||||||||ns|
|recycling|||||||||||||
|project|||||||||||||
|Pesticide|3,300,00|604,338.|2,825,72|3,430,06|||103.94%|100.00||||Other|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|Plant II|0.00|30|8.04|6.34|||||
|acephate|||||||||
|process|||||||||
|optimiza|||||||||
|tion|||||||||
|project|||||||||
|Pesticide|||||||||
|Plant II|||||||||
|trimethyl|1,360,00|524,354.|833,684.|1,358,03|||||
|||||||99.86%|100.00|Other|
|technical|0.00|85|12|8.97|||||
|transfor|||||||||
|mation|||||||||
|Sewage|||||||||
|refined|||||||||
|salt|3,450,00|506,802.|2,907,23|3,414,03|||||
|||||||98.96%|100.00|Other|
|water|0.00|67|6.31|8.98|||||
|transport|||||||||
|ation|||||||||
|Dynamic|||||||||
|110KV|||||||||
|ionic|||||||||
|membra|4,900,00||3,787,11||3,787,11||||
|||||||77.29%|77.29|Other|
|ne|0.00||5.96||5.96||||
|substatio|||||||||
|n access|||||||||
|system|||||||||
|Pesticide|||||||||
|Plant I|||||||||
|spermine|||||||||
|aminatio|||||||||
||9,200,00||7,114,61||7,114,61||||
|n||||||77.33%|77.33|Other|
||0.00||4.90||4.90||||
|wastewat|||||||||
|er|||||||||
|treatmen|||||||||
|t project|||||||||
|110KV|||||||||
|transfor|||||||||
|mer|||||||||
|substatio|89,365,8|10,645,8|36,790,5||47,436,4||||
|||||||53.08%|53.08|Other|
|n and|00.00|49.06|96.16||45.22||||
|exterior|||||||||
|line|||||||||
|(Zone A)|||||||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|Salt||||||||||||
||||||||||||Loans to|
|mine and||||||||||||
||247,021,|42,660,4|94,027,9||136,688,|||7,782,54|7,782,54||financial|
|sodium||||||55.33%|55.33|||6.40%||
||100.00|10.65|15.66||326.31|||4.54|4.54||institutio|
|nitrate||||||||||||
||||||||||||ns|
|(Zone A)||||||||||||
|Ionic||||||||||||
||||||||||||Loans to|
|membra||||||||||||
||374,599,|159,083,|63,413,8||222,497,|||8,775,16|7,256,01||financial|
|ne||||||59.40%|59.40|||6.40%||
||000.00|425.12|96.33||321.45|||8.26|9.38||institutio|
|project||||||||||||
||||||||||||ns|
|(Zone B)||||||||||||
||764,445,|234,381,|224,003,|40,860,9|417,523,|||16,690,2|15,038,5|||
|Total||||||--|--||||--|
||900.00|028.61|708.39|13.16|823.84|||36.54|63.92|||

(3) List of the withdrawal of the impairment provision of the construction in progress
Unit: RMB Yuan
||||
|-|-|-|
|Item|Withdrawn amount|Reason|

Other notes
21. Engineering material
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Special-purpose material|88,970,010.63||
|Total|88,970,010.63||

Other notes:
The balance of the engineering material at the year-end is the special-purpose external-purchased for the items such as ionic membrane.
22. Liquidation of fixed assets
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

Other notes:
23. Productive biological assets
(1) Productive biological assets adopted cost measurement mode
□ Applicable√ Inapplicable
2014 Annual Report of Hubei Sanonda Co., Ltd. (2) Productive biological assets adopted fair value measurement mode
□ Applicable√ Inapplicable
24. Oil and gas assets
□ Applicable√ Inapplicable
25. Intangible assets
(1) List of intangible assets
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|Item|Land use right|Patent right|Non-patent right|Other|Total|
|1. Opening balance|198,611,007.07||14,043,699.96|2,500.00|212,657,207.03|
|2. Increased amount of the||||||
||6,254,432.00||900,000.00||7,154,432.00|
|period||||||
|(1) Purchase|6,254,432.00||900,000.00||7,154,432.00|
|4. Closing balance|204,865,439.07||14,943,699.96|2,500.00|219,811,639.03|
|1. Opening balance|37,163,431.19||6,048,033.21|2,500.00|43,213,964.40|
|2. Increased amount of the||||||
||3,403,683.98||1,101,000.00||4,504,683.98|
|period||||||
|(1) Withdrawal|3,403,683.98||1,101,000.00||4,504,683.98|
|4. Closing balance|40,567,115.17||7,149,033.21|2,500.00|47,718,648.38|
|1. Opening balance|32,072,093.53||||32,072,093.53|
|4. Closing balance|32,072,093.53||||32,072,093.53|
|1. Book value of the|||||140,020,897.12|
||132,226,230.37||7,794,666.75|||
|period-end||||||
|2. Book value of the|||||137,371,149.10|
||129,375,482.35||7,995,666.75|||
|period-begin||||||

The proportion the intangible assets formed from the internalR&D through the Company amount the balance of the intangible assets at the period-end.
(2) Details of fixed assets failed to accomplish certification of land use right
Unit: RMB Yuan
||||
|-|-|-|
|Item|Book value|Reason|

Other notes:
2014 Annual Report of Hubei Sanonda Co., Ltd. 26.R&D expenses
Unit: RMB Yuan
|||||||||
|-|-|-|-|-|-|-|-|
|||Increase||Decrease||||
||Opening|||Recognized as|Transferred in||Closing|
|Item||Internal R&D||||||
||balance||Other|intangible|current gains|Other|balance|
|||expenses||||||
|||||assets|and losses|||

Other notes
27. Goodwill
(1) Original book value of goodwill
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|Name of the||Increase||Decrease|||
|investees or the||Formed from the|||||
||Opening balance|||||Closing balance|
|events formed||business|Other|Dispose|Other||
|goodwill||combination|||||

(2) Impairment provision of goodwill
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|Name of the||Increase||Decrease|||
|investees or the|||||||
||Opening balance|||||Closing balance|
|events formed||Withdrawal|Other|Dispose|Other||
|goodwill|||||||

Notes of the testing process of goodwill impairment, parameters and the recognition method of goodwill impairment losses: Other notes
28. Long-term unamortized expenses
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||||Amortization|||
|Item|Opening balance|Increase||Decrease|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 Yuan
2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Item|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|assets|difference|assets|
|Assets impairment|||||
||52,796,551.11|13,199,137.78|50,479,792.56|12,619,948.14|
|provision|||||
|Total|52,796,551.11|13,199,137.78|50,479,792.56|12,619,948.14|

 (2) Deferred income tax liabilities had not been off-set
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Item|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|liabilities|difference|liabilities|

 (3) Deferred income tax assets or liabilities listed by net amount after off-set
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Mutual set-off amount of|Amount of deferred|Mutual set-off amount of|Amount of deferred|
||deferred income tax|income tax assets or|deferred income tax|income tax assets or|
|Item|||||
||assets and liabilities at|liabilities after off-set at|assets and liabilities at|liabilities after off-set at|
||the period-end|the period-end|the period-begin|the period-begin|
|Deferred income tax||13,199,137.78||12,619,948.14|
|assets|||||

(4) List of unrecognized deferred income tax assets
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing amount|Opening amount|
|Deductible temporary difference|71,308,304.31|78,068,793.59|
|Deductible losses|51,356,774.22|19,333,550.66|
|Total|122,665,078.53|97,402,344.25|

 (5) Deductible losses of unrecognized deferred income tax assets will due the following years
Unit: RMB Yuan
|||||
|-|-|-|-|
|Years|Closing amount|Opening amount|Note|
|Y 2015|117,087.68|117,087.68||
|Y 2016|2,296,001.70|2,296,001.70||
|Y 2017|4,936,338.43|4,936,338.43||

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||
|-|-|-|-|
|Y 2018|11,984,122.85|11,984,122.85||
|Y 2019|32,023,223.56|||
|Total|51,356,774.22|19,333,550.66|--|

Other notes:
30. Other non-current assets
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Item|||
|Land purchase and compensation shall|13,384,400.00|13,384,400.00|
|Total|13,384,400.00|13,384,400.00|

 Other notes:
31. Short-term loans
(1) Category of short-term loans
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Pledge loan||76,220,205.55|
|Mortgage loan|75,000,000.00|105,000,000.00|
|Guaranteed loan||178,000,000.00|
|Total|75,000,000.00|359,220,205.55|

 Notes of short-term loans category
The pledge loans of the Company mainly was the loans acquired from the pledge of the accounts receivable.
The mortgage loans of the Company mainly was the loans acquired from the mortgage of the houses and buildings as well as lands. The guaranteed loans of the Company mainly was the loans acquired from the gurantee from the Jingzhou Sanonda Shareholding Co., Ltd., China National Agrochemical Company and China National Chemical Corporation for the Company.
On 31 Dec. 2014, the land use right with the book value about RMB 35,737,545.56 (original amount of RMB 45,957,505.00) was regarded as short-term loans which was of RMB 75,000,000.00.
(2) List of the short-term loans overdue but not return
The total amount of the overdue but not return short-term borrowings at the period-end was of RMB 000, of which the situation of the significant overdue but not return short-term borrowings as follows:
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Borrower|Closing balance|Borrowing rate|Overdue time|Overdue rate|

Other notes:
2014 Annual Report of Hubei Sanonda Co., Ltd. 32. Financial liabilities measured by fair value and the changes included in the current gains and losses Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

Other notes:
33. Derivative financial liabilities
□ Applicable√ Inapplicable
34. Notes payable
Unit: RMB Yuan
||||
|-|-|-|
|Category|Closing balance|Opening balance|
|Bank acceptance bill|15,000,000.00|40,000,000.00|
|Total|15,000,000.00|40,000,000.00|

 The total amount of the due but not pay notes payable at the period-end was of RMB 000.
35. Accounts payable
(1) List of accounts payable
Unit: RMB Yuan
||||
|-|-|-|
|Category|Closing balance|Opening balance|
|Within 1 year (including 1 year)|203,899,132.32|149,164,478.71|
|1 to 2 years (including 2 years)|10,223,689.60|3,284,355.24|
|2 to 3 years (including 3 years)|84,199.83|1,001,773.87|
|Over 3 years|2,579,253.02|2,587,365.28|
|Total|216,786,274.77|156,037,973.10|

 (2) Notes of the accounts payable aging over one year
Unit: RMB Yuan
||||
|-|-|-|
|Name of creditor|Amount|Unpaid reason|
|Shanghai Yu Long Mo Separation|||
||2,192,000.00|Unsettled|
|Equipment Co., Ltd.|||
|Jiangsu Leke Reli Technology Co., Ltd.|1,990,000.00|Unsettled|
|Sichuan Jinglei Pressure Container|||
||1,294,200.00|Unsettled|
|Manufacturing Co., Ltd.|||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Wuhan Aixue Weisi Mechanical|||
||578,160.00|Unsettled|
|Equipment Co., Ltd.|||
|Shanxi DHE Co., Ltd.|115,560.00|Unsettled|
|Total|6,169,920.00|--|

Notes:
36. Advance from customers
(1) List of advance from customers
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Within 1 year (including 1 year)|32,985,625.10|77,557,371.54|
|1 to 2 years (including 2 years)|1,844,839.55|1,880,070.50|
|Total|34,830,464.65|79,437,442.04|

 (2) Significant advance from customers aging over one year
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Unpaid/ Un-carry-over reason|
|Retailer A|129,250.00|Unsettled|
|Retailer B|111,800.00|Unsettled|
|Retailer C|100,000.00|Unsettled|
|Retailer D|100,000.00|Unsettled|
|Total|441,050.00|--|

(3) Particulars of settled but unfinished projects formed by construction contract at period-end.
Unit: RMB Yuan
|||
|-|-|
|Item|Amount|

Notes:
37. Payroll payable
(1) List of Payroll payable
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|I. Short-term salary|25,332,986.86|208,244,384.09|207,836,397.93|25,740,973.02|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
|III. Termination benefits||190,980.00|190,980.00||
|Total|25,332,986.86|208,435,364.09|208,027,377.93|25,740,973.02|

 (2) List of Short-term salary
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|1. Salary, bonus,|||||
||17,050,050.00|137,191,623.18|136,216,257.71|18,025,415.47|
|allowance, subsidy|||||
|2. Employee welfare||7,391,535.26|7,391,535.26||
|3. Social insurance|8,263,534.24|43,583,046.61|44,150,425.92|7,696,154.93|
|Including: 1. Medical|||||
|||9,002,699.24|7,487,026.29|1,515,672.95|
|insurance premiums|||||
|Work-related injury|||||
|||1,712,684.72|1,405,859.88|306,824.84|
|insurance|||||
|Maternity insurance|511.05|441,054.31|355,277.32|86,288.04|
|Basic pension benefits||24,626,491.40|20,044,659.82|4,581,831.58|
|Annuity|8,263,023.19|5,171,091.06|12,745,105.98|689,008.27|
|Unemployment insurance||2,629,025.88|2,112,496.63|516,529.25|
|4. Housing fund|19,402.62|17,677,973.00|17,677,973.00|19,402.62|
|5. Labor union budget|||||
|and employee education||720,427.00|720,427.00||
|budget|||||
|8. Other||1,679,779.04|1,679,779.04||
|Total|25,332,986.86|208,244,384.09|207,836,397.93|25,740,973.02|

 (3) List of drawing scheme
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|

 Notes:
Payroll payable was including: Mid-level leadership bonuses RMB 4,553,403.69 and will be distributed at the end of Feb. 2015.Executives’ performance award which was of RMB 6,960,000.00 will be distributed before Sep. in 2015. Sales cash honor was of RMB 2,335,000.00 will be distributed before Mar. 2015.
38. Taxes payable
Unit: RMB Yuan
2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|VAT|10,548,434.36|-16,594,848.55|
|Resource tax|7,216.92|21,642.79|
|Business tax|57,100,869.86|81,062,067.94|
|Corporate income tax|355,234.25|285,147.61|
|Personal income tax|833,195.31|2,955,798.06|
|Urban maintenance and construction tax|48,112.29|52,102.45|
|Property tax|471,205.11|3,588,774.80|
|Land use tax|171,385.78|31,682.42|
|Education Surcharge|2,210,912.83|1,259,224.44|
|Other|305,337.58|675,546.54|
|Total|72,051,904.29|73,337,138.50|

 Notes:
39. Interest payable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

Particulars of significant overdue unpaid interest:
Unit: RMB Yuan
||||
|-|-|-|
|Entity|Overdue amount|Overdue reason|

Notes:
40. Dividends payable
Unit: RMB Yuan
||||
|-|-|-|
|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 Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Carriage|11,705,414.25|11,609,441.12|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Energy charge|5,286,764.80|6,000,000.00|
|Local charge|3,429,939.32|4,319,152.59|
|Commission|1,592,490.41|2,556,595.88|
|Cash pledge|1,390,763.11|945,743.11|
|Export price difference|1,153,378.24|1,058,162.05|
|Other|7,191,041.80|8,055,513.61|
|Total|31,749,791.93|34,544,608.36|

 (2) Other significant accounts payable with aging over one year
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Unpaid/ Un-carry-over reason|
|Jingzhou ShunTai Logistics Co., Ltd.|600,000.00|Margin|
|Qichun County Bureau for State-owned|||
||300,270.90|Unsettled|
|Assets|||
|Total|900,270.90|--|

Notes:
42. Liabilities classified as holding for sale
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

Notes:
43. Non-current liabilities due within 1 year
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Long-term loans due within 1 year|500,000.00|70,400,000.00|
|Long-term account payable due within 1|||
|||6,990,000.00|
|year|||
|Total|500,000.00|77,390,000.00|

 Note: Balance of non-current liabilities due within 1 year was reduced99.35% when compared to the year-begin, mainly because the decrease of the long-term loans due within 1 year and long-term account payable due within 1 year
44. Other current-liabilities
Unit: RMB Yuan
2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Item|Closing balance|Opening balance|

Changes on short term bonds payable:
Unit: RMB Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Overflow||||
|||||||The|Withdraw||Pay in|||
|Name of|Book|||Issue|Opening|||discount|||Closing|
|||Issue date|Period|||current|interest at||current|Other||
|the bond|value|||amount|balance|||amortizati|||period|
|||||||issue|par||period|||
|||||||||on||||

Notes:
45. Long-term loan
(1) Category of long-term loan
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Guaranteed loans|432,090,000.00|366,490,000.00|
|Less: Long-term loans due within 1 year|-500,000.00|-70,400,000.00|
|Total|431,590,000.00|296,090,000.00|

 Notes: Balance of long-term at the year-end increased45.76%, when compared to the year-begin, and mainly because the special loan for Ionic membrane project was increased.
Other notes including interest rate range:
Guaranteed loans
||||
|-|-|-|
|Entity|Loan balance|Guarantee|
|Ex-im Bank|149,000,000.00|China National AgrochemicalCorporation|
|Ex-im Bank|96,590,000.00|China National ChemicalCorporation|
|CCB|186,000,000.00|China National ChemicalCorporation|
|Total|431,590,000.00|—|

46. Bonds payable
(1) Bonds payable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

2014 Annual Report of Hubei Sanonda Co., Ltd. (2) Changes on bonds payable (not including other financial instrument classified as preferred stock and perpetual capital securities of financial liabilities)
Unit: RMB Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Overflow||||
|||||||The|Withdraw||Pay in|||
|Name of|Book|||Issue|Opening|||discount|||Closing|
|||Issue date|Period|||current|interest at||current|Other||
|the bond|value|||amount|balance|||amortizati|||period|
|||||||issue|par||period|||
|||||||||on||||

(3) Note to conditions and time of share transfer of convertible bonds
(4) Note to other financial instrument classified as financial liabilities
Basic information of preferred stock, perpetual capital securities and other financial instruments outstanding issued at period-begin Change list of preferred stock, perpetual capital securities and other financial instruments outstanding issued at period-begin Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Financial|Opening period||increase||decrease||Closing period||
|instruments|||||||||
|outstanding|Amount|Bok value|Amount|Bok value|Amount|Bok value|Amount|Bok value|
|issued|||||||||

Notes to the basis of other financial instrument classified as financial liabilities
Notes:
47. Long-term payable
(1) Long-term payable listed by nature of the account
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Loan for highly toxic pesticides|||
|transferring project of Jingzhou Finance||6,990,000.00|
|Bureau|||
|Loan for glyphosate project|490,000.00|490,000.00|
|Borrowing for the cooperation project with|||
|Guangzhou Chemical Industry Research|160,000.00|160,000.00|
|Institute|||
|Less: Expired part due within 1 year||-6,990,000.00|
|Total|650,000.00|650,000.00|

Notes:
2014 Annual Report of Hubei Sanonda Co., Ltd. 48. Long term payroll payable
(1) List of long term payroll payable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

(2) Changes of defined benefit plans
Present worth of defined benefit plans obligation:
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Last period|

Plan assets:
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Last period|

Net liabilities (net assets) of defined benefit plans
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Last period|

Notes to the influence of the content and related risk of defined benefit plans to the future cash flows, time and uncertainty of the Company:
Notes to analysis results of major actuarial assumptions and sensibility of defined benefit plans
Other notes:
49. Special payable
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|Formation reasons|

 Other notes:
50. Accrued liabilities
Unit: RMB Yuan
|||||
|-|-|-|-|
|Item|Closing balance|Opening balance|Formation reasons|

 Other notes, including related important assumptions and estimates of accrued liabilities:
51. Deferred income
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|Formation reasons|
|Government|19,538,888.89|7,000,000.00|3,784,074.07|22,754,814.82||

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||||
|-|-|-|-|-|-|
|subsidies||||||
|Total|19,538,888.89|7,000,000.00|3,784,074.07|22,754,814.82|--|

 Items involved in government subsidies:
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||||Amount accrued||||
|||Amount of newly||||Related to the|
|Item|Opening balance||in non-business|Other changes|Closing balance||
|||subsidy||||assets/ income|
||||income||||
|||||||Related to the|
|Pyridine project|8,850,000.00||983,333.33||7,866,666.67||
|||||||assets|
|Government|||||||
|Subsidy for||||||Related to the|
||3,883,333.34||776,666.67||3,106,666.67||
|Highly toxic||||||assets|
|pesticide|||||||
|Special fund for|||||||
|management of||||||Related to the|
||1,222,222.21||244,444.45||977,777.76||
|source||||||assets|
|of pollution|||||||
|Special fund for|||||||
|transferring|||||||
|||||||Related to the|
|environmental|666,666.67||66,666.66||600,000.01||
|||||||assets|
|protection|||||||
|deferred|||||||
|Appropriation for|||||||
|CTC consuming|||||||
|||||||Related to the|
|and|4,916,666.67||1,000,000.00||3,916,666.67||
|||||||assets|
|eliminating|||||||
|project|||||||
|Special fund for|||||||
|||||||Related to the|
|industry clean||7,000,000.00|712,962.96||6,287,037.04||
|||||||assets|
|production|||||||
|Total|19,538,888.89|7,000,000.00|3,784,074.07||22,754,814.82|--|

 Notes:
52. Other non-current liabilities
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|

Notes:
2014 Annual Report of Hubei Sanonda Co., Ltd. 53. Share capital
Unit: RMB Yuan
|||||||||
|-|-|-|-|-|-|-|-|
|||Increase/decrease (+/-)||||||
||Opening|||Capitalization|||Closing|
|||Newly issue||||||
||balance||Bonus shares|of public|Other|Subtotal|balance|
|||share||||||
|||||reserves||||
|The sum of|593,923,220.00||||||593,923,220.00|
|shares||||||||

Notes:
54. Other equity instruments
(1) Basic information of preferred stock, perpetual capital securities and other financial instruments outstanding issued at period-begin
(2) Change list of preferred stock, perpetual capital securities and other financial instruments outstanding issued at period-begin
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Financial|Opening period||Increase||Decrease||Closing period||
|instruments|||||||||
|outstanding|Amount|Book value|Amount|Book value|Amount|Book value|Amount|Book value|
|issued|||||||||

Changes, reason of change and basis of relevant accounting treatment of other equity instruments in reporting period:
Notes:
55. Capital reserves
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|Capital premium|254,688,951.94|||254,688,951.94|
|Other capital reserves|8,495,091.72|||8,495,091.72|
|Total|263,184,043.66|||263,184,043.66|

 Other notes, including changes and reason of change:
56. Treasury stock
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|

Other notes, including changes and reason of change:
2014 Annual Report of Hubei Sanonda Co., Ltd. 57. Other comprehensive income
Unit: RMB Yuan
|||||||||
|-|-|-|-|-|-|-|-|
|||Reporting period||||||
|||Amountincurredbeforeincome tax|Less: Amount|||||
||||transferred into|||||
||||profit and loss|||||
|||||||After-tax||
||||in the current||After-tax|||
||Opening|||Less:||attribute to|Closing|
|Item||||||||
||||period that||attribute to|||
||balance|||income tax||minority|balance|
||||recognized||the parent|||
|||||expense||shareholde||
||||into other||company|||
|||||||r||
||||comprehensive|||||
||||income in|||||
||||prior period|||||

Other notes, including the adjustment of the recognition of initial amount of effective part of the cash flow hedging gains and losses transfer into arbitraged items:
58. Special reserves
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|Safety production cost|16,059,288.71|11,062,407.36|11,696,596.64|15,425,099.43|
|Total|16,059,288.71|11,062,407.36|11,696,596.64|15,425,099.43|

 Other notes, including changes and reason of change:
59. Surplus reserves
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|Statutory surplus|||||
||122,519,162.66|51,714,137.55||174,233,300.21|
|reserves|||||
|Discretional surplus|||||
||3,815,085.65|||3,815,085.65|
|reserves|||||
|Total|126,334,248.31|51,714,137.55||178,048,385.86|

 Other note, including changes and reason of change
Notes: Based on the regulations of the Corporation Law and Constitution, the Company should withdraw10% of the statutory surplus reserves according tot the net profits. If the accumulated amount of the statutory surplus reserves exceeded the50% of the registered capital, the Company
could no more withdraw.
2014 Annual Report of Hubei Sanonda Co., Ltd. 60. Retained profits
Unit: RMB Yuan
||||
|-|-|-|
|Item|Amount|Withdrawal or distributed proportion|
|Opening balance of retained profits beforeadjustments|||
||546,688,770.98|289,017,364.90|
|Opening balance of retained profits afteradjustments|546,688,770.98||
|||289,017,364.90|
|Add: Net profit attributable to owners of theCompany|||
||491,771,929.22|320,811,958.67|
|Less: Withdrawal of statutory surplusreserves|||
||51,714,137.55|33,654,209.17|
|Dividend of common stock payable|29,696,161.00|29,486,343.42|
|Closing retained profits|957,050,401.65|546,688,770.98|

 List of adjustment of opening retained profits:
1) RMB 000 opening retained profits was affected by retrospective adjustment conducted according to the Accounting Standards for Business Enterprises and relevant new regulations.
2) RMB 000 opening retained profits was affected by changes on accounting policies.
3) RMB 000 opening retained profits was affected by correction of significant accounting errors.
4) RMB 000 opening retained profits was affected by changes in combination scope arising from same control.
5) RMB 000 opening retained profits was affected totally by other adjustments.
61. Revenue and Cost of Sales
(1) Revenue, Cost of Sales
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||2014||2013||
|Item|||||
||Revenue|Cost|Revenue|Cost|
|Main operation|3,103,955,333.69|2,177,467,206.31|3,032,932,276.15|2,311,453,750.97|
|Other operation|27,230,966.36|14,806,881.88|45,535,034.38|34,886,580.61|
|Total|3,131,186,300.05|2,192,274,088.19|3,078,467,310.53|2,346,340,331.58|

 62. Business tax and surcharges
Unit: RMB Yuan
||||
|-|-|-|
|Item|2014|2013|
|Business tax|262,154.25|472,305.69|
|Urban maintenance and construction tax|2,693,160.15|8,227,401.98|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Education surtax|1,154,211.51|3,523,172.25|
|Local education surtax|2,497,409.89|445,669.28|
|Total|6,606,935.80|12,668,549.20|

 Notes:
63. Sales expenses
Unit: RMB Yuan
||||
|-|-|-|
|Item|2014|2013|
|Transport fees|36,695,479.80|29,024,172.86|
|Export fees|42,315,968.58|42,081,166.51|
|Employee’s remuneration|4,225,823.56|6,304,043.33|
|Packing charges|120,618.94|2,080,664.76|
|Handling charges|2,252,469.67|3,248,286.08|
|Business travel charges|977,216.00|1,806,953.90|
|Conference service fees|1,669,674.92|1,365,840.57|
|Operational funds|519,779.90|1,432,456.89|
|Advertising and general publicity expense|899,492.53|1,185,583.30|
|Other|8,151,621.58|6,466,138.65|
|Total|97,828,145.48|94,995,306.85|

 Notes:
64. Administrative expenses
Unit: RMB Yuan
||||
|-|-|-|
|Item|2014|2013|
|Employee’s remuneration|59,492,609.66|45,587,206.09|
|Loss on work stoppages|12,675,218.60|13,318,036.21|
|Tax expenses|10,239,707.95|10,444,840.90|
|Depreciation charge|5,923,354.12|5,672,977.41|
|Amortization of intangible assets|4,504,699.29|4,031,144.18|
|Water & electricity fees|2,558,162.97|3,036,476.66|
|Business entertainment fees|2,420,196.72|2,970,799.43|
|Labor protection fees|1,210,300.21|2,220,264.67|
|Office expenses|1,786,381.70|2,183,522.30|
|Business travel charges|1,131,958.43|2,066,216.29|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Amortization of low-price consumables|2,532,105.81|2,058,207.95|
|Premium|1,879,150.39|1,774,028.41|
|Security charge|881,926.55|1,860,557.94|
|Other|18,057,508.62|15,924,786.24|
|Total|125,293,281.02|113,149,064.68|

 Notes:
65. Financial expenses
Unit: RMB Yuan
||||
|-|-|-|
|Item|2014|2013|
|Interest expenses|41,392,430.71|59,285,750.56|
|Less: Interest income|-5,467,128.58|-5,165,866.71|
|Less: Amount of capitalized interest|-15,038,563.92|-5,905,449.90|
|Exchange gains and losses|-3,123,253.13|7,654,208.24|
|Other|9,397,636.35|9,780,758.13|
|Total|27,161,121.43|65,649,400.32|

 Notes: the financial expense decreased58.63% when compared to that in last year, mainly because the decrease of loan and the interest decreased. There was a big change in exchange gain or loss which was influenced by exchange rate.
66. Asset impairment loss
Unit: RMB Yuan
||||
|-|-|-|
|Item|2014|2013|
|I. Bad debt loss|-112,223.82|4,789,057.53|
|II. Inventory falling price loss|16,932,688.71|3,360,564.62|
|Total|16,820,464.89|8,149,622.15|

 Notes: the asset impairment loss increased106.40%, when compared to that in last year, mainly because the part of the finished goods withdrawing inventory falling price loss increased.
67. Gains on the changes in the fair value
Unit: RMB Yuan
||||
|-|-|-|
|Source|2014|2013|

Notes:
68. Investment income
Unit: RMB Yuan
2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Item|2014|2013|
|Investment income from the disposal of|||
|||594,524.16|
|long-term equity investment|||
|Investment income during the period of the|||
||1,716,466.00|4,062,224.59|
|held of available for sale financial assets|||
|Total|1,716,466.00|4,656,748.75|

 Notes:
69. Non-operating gains
Unit: RMB Yuan
|||||
|-|-|-|-|
||||Recorded in the amount of the|
|Item|2014|2013||
||||non-recurring gains and losses|
|Total gains from disposal of|76,490.60|33,778.34||
||||76,490.60|
|non-current assets||||
|Including: Gains from disposal||||
||76,490.60|33,778.34|76,490.60|
|of fixed assets||||
|Government grants|4,574,874.07|3,270,500.35|4,574,874.07|
|Other|172,542.90|566,995.61|172,542.90|
|Total|4,823,907.57|3,871,274.30|4,823,907.57|

 Government subsidies recorded into current profits and losses
Unit: RMB Yuan
|||||
|-|-|-|-|
|Item|2014|2013|Related to the assets/ income|
|Government Subsidy for Highly||||
||776,666.67|776,666.67|Related to the assets|
|toxic pesticide||||
|Special fund for management of||||
|source|244,444.45|244,444.45|Related to the assets|
|of pollution||||
|Special fund for transferring||||
|environmental protection|66,666.66|66,666.66|Related to the assets|
|deferred||||
|Subsidies for 2012||||
|unemployment and stable||672,000.00|Related to the assets|
|position||||
|Special funds of mineral||||
|resource||||
|conservation and|1,000,000.00|83,333.33|Related to the assets|
|comprehensive||||
|utilization||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||
|-|-|-|-|
|Interests subsidies reserves in||||
|||828,300.00|Related to the income|
|winter||||
|The subsidies income of||||
|pesticides federal reserve of|790,800.00||Related to the income|
|2013||||
|Special fund for industry clean||||
||712,962.96||Related to the assets|
|production||||
|Appropriation for CTC||||
|consuming and eliminating||599,089.24|Related to the assets|
|project||||
|Pyridine project|983,333.33||Related to the assets|
|Total|4,574,874.07|3,270,500.35|--|

Notes:
70. Non-operating expenses
Unit: RMB Yuan
|||||
|-|-|-|-|
||||The amount included in the|
|Item|2014|2013|current non-recurring gains and|
||||losses|
|Loss on disposal of non-current|21,677.41|11,450,885.91||
||||21,677.41|
|assets||||
|Including: Loss on disposal of||||
||21,677.41|11,450,885.91|21,677.41|
|fixed assets||||
|Loss on debt reconstruction|6,000.00|152,001.61|6,000.00|
|Penalty|160,000.00||160,000.00|
|Vehicle casualty|1,718,930.42||1,718,930.42|
|Other|1,170,044.69|69,854.65|1,170,044.69|
|Total|3,076,652.52|11,672,742.17||

Notes: non-operating expenses decreased73.64% compared to that in last year, mainly because there was more fixed assets disposal. 71. Income tax expense
(1) Lists of income tax expense
Unit: RMB Yuan
||||
|-|-|-|
|Item|2014|2013|
|Current income tax expense|177,961,320.70|112,562,615.47|
|Deferred income tax expense|-579,189.64|1,827,533.19|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Total|177,382,131.06|114,390,148.66|

 (2) Adjustment process of accounting profit and income tax expense
Unit: RMB Yuan
|||
|-|-|
|Item|2014|
|Total profits|668,665,984.29|
|Current income tax expense accounted by tax and relevant||
||167,166,496.07|
|regulations||
|Influence of income tax before adjustment|-11,509.52|
|Influence of non taxable income|-429,116.50|
|Influence of not deductable costs, expenses and losses|2,709,592.14|
|Influence of not paying income tax due to subsidiary losses|8,525,858.51|
|Influence of deferred income tax assets|-579,189.64|
|Income tax expense|177,382,131.06|

 Notes:
72. Other comprehensive income
Refer to the notes
73. Supplementary information to cash flow statement
(1) Other cash received relevant to operating activities
Unit: RMB Yuan
||||
|-|-|-|
|Item|2014|2013|
|Government grants|7,790,800.00|6,500,300.00|
|Interest income|5,467,128.58|5,165,866.71|
|Turnover accounts of Huaxiang Company||11,000,000.00|
|Collect A/B shares withholding individual|||
||1,895,263.56|1,629,349.42|
|income tax|||
|Allowance for payment and others, etc.|8,212,535.00|8,823,733.23|
|Total|23,365,727.14|33,119,249.36|

 Notes:
(2) Other cash paid relevant to operating activities
Unit: RMB Yuan
2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Item|2014|2013|
|Transport fees|42,659,379.71|38,539,213.75|
|Export fees|40,135,942.33|32,310,391.38|
|Handling charges|2,342,434.89|3,248,286.08|
|Entertainment expenses|3,021,672.79|3,165,201.85|
|Utilities fees|2,958,732.21|3,036,476.66|
|Office expense|2,386,321.07|2,377,924.72|
|Packing charges|120,618.94|2,080,664.76|
|Business travel charges|3,129,321.43|2,066,216.29|
|Asset insurance fees|1,310,300.21|1,857,638.01|
|Advertising and general publicity expense|899,492.53|1,185,583.30|
|Other|36,376,391.95|34,391,378.45|
|Total|135,340,608.06|124,258,975.25|

 Notes:
(3) Other cash received relevant to investment activity
Unit: RMB Yuan
||||
|-|-|-|
|Item|2014|2013|

Notes:
(4) Other cash paid relevant to investment activity
Unit: RMB Yuan
||||
|-|-|-|
|Item|2014|2013|

Notes:
(5) Other cash received relevant to financing activities
Unit: RMB Yuan
||||
|-|-|-|
|Item|2014|2013|
|Unfreeze reversal of margin notes||12,000,000.00|
|Total||12,000,000.00|

 Notes:
(6) Other cash paid relevant to financing activities
Unit: RMB Yuan
2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Item|2014|2013|
|Freeze of margin notes|500,000.00|16,000,000.00|
|Loan guarantee fees paying for Sanonda|||
||420,000.00|2,880,000.00|
|Co., Ltd.|||
|Loan guarantee fees paying for China|||
||1,150,000.00|6,000,000.00|
|National Agrochemical Corporation|||
|Loan guarantee fees paying for ionic|||
|membrane project of China National||2,295,000.00|
|Chemical Corporation|||
|Payment of the price purchasing the|||
|||5,906,730.00|
|minority equities|||
|Total|2,070,000.00|33,081,730.00|

 Notes:
74. Supplementary information to cash flow statement
(1) Information of net profit to net cash flows generated from operating activities
Unit: RMB Yuan
||||
|-|-|-|
|Item|2014|2013|
|1. Reconciliation of net profit to net cash|||
||--|--|
|flows generated from operating activities|||
|Net profit|491,283,853.23|319,980,167.97|
|Add: Provision for impairment of assets|16,820,464.89|8,149,622.15|
|Depreciation of fixed assets, of oil-gas|||
||174,510,815.75|161,514,097.00|
|assets, of productive biological assets|||
|Amortization of intangible assets|4,504,683.98|4,031,144.18|
|Losses on disposal of fixed assets, intangible|||
|assets and other|-54,813.19|11,417,107.57|
|long-term assets (gains: negative)|||
|Financial cost (gains: negative)|26,353,866.79|60,727,002.05|
|Investment loss (gains: negative)|-1,716,466.00|-4,656,748.75|
|Decrease in deferred income tax assets|||
||-579,189.64|1,827,533.19|
|(gains: negative)|||
|Decrease in inventory (gains: negative)|-89,199,836.88|105,415,584.90|
|Decrease in accounts receivable from|||
||56,075,260.90|30,732,677.66|
|operating activities (gains: negative)|||
|Increase in payables from operating|21,175,216.09|100,563,401.12|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|activities (decrease: negative)|||
|Net cash flows generated from operating|699,173,855.92|799,701,589.04|
|activities|||
|2. Investing and financing activities that do|||
||--|--|
|not involving cash receipts and payment:|||
|3. Net increase in cash and cash equivalents|--|--|
|Closing balance of cash|418,847,736.46|410,065,921.21|
|Less: Opening balance of cash|410,065,921.21|175,181,365.77|
|Net increase in cash and cash equivalents|8,781,815.25|234,884,555.44|

 (2) Net Cash paid of obtaining the subsidiary
Unit: RMB Yuan
|||
|-|-|
||Amount|
|Of which:|--|
|Of which:|--|
|Of which:|--|

Notes:
(3) Net Cash receive of disposal of the subsidiary
Unit: RMB Yuan
|||
|-|-|
||Amount|
|Of which:|--|
|Of which:|--|
|Of which:|--|

Notes:
(4) Cash and cash equivalents
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|I. Cash|418,847,736.46|410,065,921.21|
|Including: Cash on hand||1,229.00|
|Bank deposit on demand|418,847,736.46|410,064,692.21|
|III. Closing balance of cash and cash|418,847,736.46|410,065,921.21|
|equivalents|||

Notes:
2014 Annual Report of Hubei Sanonda Co., Ltd. 75. Note of statement of changes in the owner's equity
Explain "other" project name and adjustment amount of the adjustment of closing balance in previous year, etc.:
76. The assets with the ownership or use right restricted
Unit: RMB Yuan
||||
|-|-|-|
|Item|Closing book value|Restricted reason|
|Monetary capital|4,500,000.00|Cash deposit of bank acceptance|
|Fix assets|68,172,618.46|pledge|
|Intangible assets|35,737,545.56|pledge|
|Total|108,410,164.02|--|

Notes:
77. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB Yuan
|||||
|-|-|-|-|
||Closing foreign currency||Closing convert to RMB|
|Item||Exchange rate||
||balance||balance|
|Monetary capital|--|--|13,007,955.37|
|Including: USD|2,125,830.26|6.1190|13,007,955.37|
|Account receivable|--|--|153,982,834.48|
|Including: USD|25,164,705.75|6.1190|153,982,834.48|

 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√ inapplicable
78. Arbitrage
According to arbitrage category to disclose arbitrage item, relevant arbitrage tools and the been arbitraged risk qualitative and quantitative information:
2014 Annual Report of Hubei Sanonda Co., Ltd. 79. Other
VIII. Changes of merge scope
1. Business merger not under same control
(1) Business merger not under same control in reporting period
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||||||||Income of|Net profits of|
||Time and||||||||
|||Cost of||Way to gain||Recognition|acquiree|acquiree|
|Name of|place of||Proportion of||||||
|||gaining the||the stock|Purchase date|basis of|during the|during the|
|acquiree|gaining the||stock rights||||||
|||stock rights||rights||purchase date|purchase date|purchase date|
||stock rights||||||||
||||||||to period-end|to period-end|

 Notes:
(2) Combined cost and goodwill
Note to determination method, consideration and changes of fair value of combined cost:
The main formation reason for the large goodwill:
Other notes:
(3) The identifiable assets and liabilities of acquiree at purchase date
The recognition method of the fair value of identifiable assets and liabilities
Contingent liability of acquiree undertaken by business merger
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
□ Yes√ No
2014 Annual Report of Hubei Sanonda Co., Ltd. (5) Note to merger could not be determined reasonable consideration or Identifiable assets, Fair value of liabilities of the acquiree at acquisition date or closing period of the merge
(6) Other notes:
2. Business combination under the same control
(1) Business combination under the same control during the reporting period
Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||||||Income from|Net profits|||
||||||the|from the|||
|||||Recognition|||Income|Net profits|
||||||period-begin|reporting|||
|Combined|Proportion of||Combination|basis of|||during the|during the|
|||Basis|||to the|period to the|||
|party|the profits||date|combination|||period of|period of|
||||||combination|combination|||
|||||date|||comparison|comparison|
||||||date of the|date of the|||
||||||combination|combination|||

Notes:
(2) Combination cost
Note to contingent consideration or other changes:
Other notes:
(3) The book value of the assets and liabilities of the combined party at combining date
Contingent liabilities of the combined party undertaken in combination
Other notes:
3. Counter purchase
Basic information of trading, the basis of transactions constitute counter purchase, the retain assets , liabilities of the listed companies whether constituted a business and its basis, the determination of the combination costs, the amount and calculation of adjusted rights and interests in accordance with the equity transaction process.
4. The disposal of subsidiary
Whether there is a single disposal of the investment to subsidiary and lost control
□ Yes√ No
Whether there are multiple transactions step by step dispose the investment to subsidiary and lost control in reporting period□ Yes√ No
2014 Annual Report of Hubei Sanonda Co., Ltd. 5. Other reasons for the changes in combination scope
Note to reasons for the changes in combination scope (Newly established subsidiary and subsidiary of liquidation) and relevant information:
6. Other
IX. Equity in other entities
1. Equity in subsidiary
(1) The structure of the enterprise group
||||||||
|-|-|-|-|-|-|-|
|Name of the|Main operating|Registration|Nature of|Proportion of shareholding|||
|||||||Way of gaining|
|subsidiary|place|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|
|Huaxiang|||Manufacturing||||
||Jingzhou|Jingzhou||98.50%||control business|
|Chemical Co.,|||industry||||
|||||||combination|
|Ltd.|||||||

Notes: holding proportion in subsidiary different from voting proportion:
Basis of holding half or less voting rights but still been controlled investee and holding more than half of the voting rights not been controlled investee:
Significant structure entities and controlling basis in the scope of combination:
Basis of determine whether the Company is the agent or the principal:
Other notes:
(2) Significant not wholly owned subsidiary
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Shareholding|The profits and losses|Declaring dividends|Balance of minority|
|Name|proportion of minority|arbitrate to the|distribute to minority|shareholder at closing|
||shareholder|minority shareholders|shareholder|period|
|Jingzhou Huaxiang|||||
||1.50%|-488,075.99||-235,716.61|
|Chemical Co., Ltd.|||||

2014 Annual Report of Hubei Sanonda Co., Ltd. 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 Yuan
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance||||||Opening balance||||||
|||Non-curr|Totalassets||Non-curr|||Non-curr|||Non-curr||
|Name|current|||Current||Total|current||Total|Current||Total|
|||ent|||ent|||ent|||ent||
||assets|||liabilities||liability|assets||assets|liabilities||liability|
|||assets|||liability|||assets|||liability||
|Jingzhou|||||||||||||
|Huaxian|||||||||||||
|g|31,797,0|166,838,|198,635,|206,482,|7,866,66|214,349,|12,245,2|180,117,|192,362,|166,688,|8,850,00|175,538,|
|Chemica|18.03|012.26|030.29|804.08|6.67|470.75|16.25|445.13|661.38|702.52|0.00|702.52|
|l Co.,|||||||||||||
|Ltd.|||||||||||||

Unit: RMB Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
||2014||||2013||||
||Operationrevenue||Total||||Total||
|Name||||Operating|Operation|||Operating|
|||Net profit|comprehensi|||Net profit|comprehensi||
|||||cash flow|revenue|||cash flow|
||||ve income||||ve income||
|Jingzhou|||||||||
|Huaxiang|61,497,174.8|-32,538,399.3|-32,538,399.3||13,479,620.2||||
|||||-4,996,058.45||-9,234,064.24|-9,234,064.24|8,252,812.64|
|Chemical|2|2|2||7||||
|Co., Ltd.|||||||||

Other notes:
(4) Significant restrictions of using enterprise group assets and pay 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 itsowner’s equity share changed but still controlling the subsidiary (1) Note toowner’s equity share changed in subsidiary
(2) Thetransaction’s influence to equity of minority shareholders and attributable to the owner's equity of
the parent company
Other notes:
2014 Annual Report of Hubei Sanonda Co., Ltd. 3. Equity in joint venture arrangement or associated enterprise
(1) Significant joint venture arrangement or associated enterprise
||||||||
|-|-|-|-|-|-|-|
|||||Proportion||Accounting|
|||||||treatment of the|
||Main operating|Registration||||investment of|
|Name|||Business nature||||
||place|place||Directly|Indirectly|joint venture or|
|||||||associated|
|||||||enterprise|

 Notes to holding proportion of joint venture or associated enterprise different from voting proportion:
Basis of holding less than20% of the voting rights but has a significant impact or holding20% or more voting rights but does not have a significant impact:
(2) Main financial information of significant joint venture
Other notes:
(3) Main financial information of significant associated enterprise
Other notes:
(4) Summary financial information of insignificant joint venture or associated enterprise
Unit: RMB Yuan
||||
|-|-|-|
||Closing balance/ 2014|Opening balance /2013|
|Joint venture:|--|--|
|The total of following items according to the|||
||--|--|
|shareholding proportions|||
|Associated enterprise:|--|--|
|The total of following items according to the|||
||--|--|
|shareholding proportions|||

Other notes:
(5) Note to the significant restrictions of the ability of joint venture or associated enterprise transfer funds to the Company
(6) The excess loss of joint venture or associated enterprise
Unit: RMB Yuan
|||||
|-|-|-|-|
||The cumulative recognized|The derecognized losses or the|The noncumulative|
|Name||||
||losses in previous|share of net profit in reporting|unrecognized losses in reporting|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|accumulatively derecognized|period|period|

Other notes:
(7) The unrecognized commitment related to joint venture investment
(8) Contingent liabilities related to joint venture or associated enterprise investment
4. Significant common operation
|||||||
|-|-|-|-|-|-|
||Main operating|Registration||Proportion /share portion||
|Name|||Business nature|||
||place|place||Directly|Indirectly|

 Note to holding proportion or share portion in common operation different from voting proportion:
Basis of common operation as a single entity, classify as common operation
Other notes:
5. Equity of structure entity not including in the scope of consolidated financial statements
Related notes to structure entity not including in the scope of consolidated financial statements
6. Other
X. The risk related financial instruments
XI. The disclosure of the fair value
1. Closing fair value of assets and liabilities calculated by fair value
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Closing fair value||||
|Item|Fair value measurement|Fair value measurement|Fair value measurement||
|||||Total|
||items at level 1|items at level 2|items at level 3||
|I. Consistent fair value|||||
||--|--|--|--|
|measurement|||||
|II. Inconsistent fair value|||||
||--|--|--|--|
|measurement|||||

2014 Annual Report of Hubei Sanonda Co., Ltd. 2. Market price recognition basis for consistent and inconsistent fair value measurement items at level 1 3. Valuation technique adopted and nature and amount determination of important parameters for consistent and inconsistent fair value measurement items at level 2
4. Valuation technique adopted and nature and amount determination of important parameters for consistent and inconsistent fair value measurement items at level 3
5. Sensitiveness analysis on unobservable parameters and adjustment information between opening and closing book value of consistent fair value measurement items at level 3
6. Explain the reason for conversion and the policy governing when the conversion happens if conversion happens among consistent fair value measurement items at different levels
7. Changes in the valuation technique in the current period and the reason for change
8. Fair value of financial assets and 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||
||Registered place|Business scope|Registered capital||parent company|
|company||||company against the||
||||||against the Company|
|||||Company (%)||
||||||(%)|
|||Production and||||
|||operation of||||
|Sanonda Co,. Ltd|Jingzhou, Hubei||240,661,000.00|20.15%|20.15%|
|||pesticide and||||
|||chemicals products||||

Notes: Information on the parent company: China National Chemical Corporation (hereinafter referred to as Chemical Corporation) held100.00% equity of China National Agrochemical Corporation, while China National Agrochemical Corporation held100.00% 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:
2014 Annual Report of Hubei Sanonda Co., Ltd. 2. Subsidiaries of the Company
See details to Notes IV.
3. Information on the joint ventures and associated enterprises of the Company
The details of significant joint venture and associated enterprise of the Company
Information on other joint venture and associated enterprise of occurring related party transactions with the Company in reporting period, or form balance due to related party transactions in previous period:
|||
|-|-|
|Name|Relationship|

Notes:
4. Information on other related parties of the Company
|||
|-|-|
|Name|Relationship|
|Bluestar (Beijing) Chemical Machinery Co., Ltd.|Under the same control of China National Chemical Corporation|
|Hubei Jingzhou Huaxiang Chemical Co., Ltd.|Joint venture of the parent company|
|Anhui Chemical Design Institute|Under the same control of China National Chemical Corporation|
|Haohua Engineering Co., Ltd.|Under the same control of China National Chemical Corporation|
|Makhteshim Chemical Works Ltd.|Under the same control of China National Chemical Corporation|
|Jiamusi Heilong Agrochemicals 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|
|FARMOZ PTY LTD|Under the same control of China National Chemical Corporation|
|Shangdong Dacheng Agrochemical Co., Ltd.|Under the same control of China National Chemical Corporation|
|China National Agrochemical Corporation|Under the same control of China National Chemical Corporation|
|Bluestar Environmental Engineering Co., Ltd.|Under the same control of China National Chemical Corporation|
|Sichuan Bluestar Machinery Co., Ltd.|Under the same control of China National Chemical Corporation|

 Notes:
5. List of related-party transactions
(1) Information on acquisition of goods and reception of labor service (unit: ten thousand Yuan)
Unit: RMB Yuan
|||||
|-|-|-|-|
|Related-party|Content|2014|2013|
|Bluestar (Beijing) Chemical||||
||Equipment|4,948,119.66|109,145.30|
|Machinery Co., Ltd.||||
|Bluestar (Beijing) Chemical||||
||Engineering material|47,692,307.69|47,692,307.69|
|Machinery Co., Ltd.||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||
|-|-|-|-|
|Jingzhou Sanonda||||
||Raw materials& package|1,131,882.05|4,192,244.36|
|Co., Ltd.||||
|Jingzhou Huaxiang Chemical||||
||Low consumption goods||1,310,908.16|
|Co., Ltd.||||
|Anhui Chemical Design||||
||Accepting labor services||188,679.24|
|Institute||||
|Haohua Engineering Co., Ltd.|Equipment and services|41,753,812.56|8,906,627.96|

 Information of sales of goods and provision of labor service
Unit: RMB Yuan
|||||
|-|-|-|-|
|Related-party|Content|2014|2013|
|Makhteshim Chemical Works||||
||Sales of pesticides|43,770,184.02|13,169,180.24|
|Ltd.||||
|Jiamusi Heilong Agrochemicals||||
||Sales of pesticides|1,817,699.12|4,434,955.75|
|Co., Ltd.||||
|Jiangsu Anpon Electrochemical||||
||Sales of pesticides|3,119,469.03|2,513,274.34|
|Co., Ltd.||||
|Jingzhou Sanonda||||
||Raw materials||2,842,658.10|
|Co., Ltd.||||
|Jingzhou Huaxiang Chemical|Chemical industry and power|||
||||12,474,379.26|
|Co., Ltd.|products|||
|FARMOZ PTY LTD|Sales of pesticides|7,334,103.40|15,352,590.42|
|Shangdong Dacheng||||
||Sales of pesticides|14,758,849.56|3,726,548.67|
|Agrochemical Co., Ltd.||||
|Jingzhou Huaxiang Chemical||||
||Render service||3,160,268.07|
|Co., Ltd.||||

Notes:
(2) Related trusteeship/contract
Lists of related trusteeship/contract:
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|Name of the|Name of the|||||Income|
|entruster/contract|entrustee/|Type|Initial date|Due date|Pricing basis|recognized in the|
|ee|contractor|||||reporting period|

 Notes:
2014 Annual Report of Hubei Sanonda Co., Ltd. Lists of entrust/contractee
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|Name of the|Name of the|||||Charge|
|entruster/contract|entrustee/|Type|Initial date|Due date|Pricing basis|recognized in the|
|ee|contractor|||||reporting period|

 Notes:
(3) Information of related lease
The Company was lessor:
Unit: RMB Yuan
|||||
|-|-|-|-|
|||The lease income confirmed in|The lease income confirmed in|
|Name of lessee|Category of leased assets|||
|||this year|last year|
||7/F of the office|||
|Jingzhou Sanonda Co., Ltd.||120,000.00|120,000.00|
||building|||

The Company was lessee:
Unit: RMB Yuan
|||||
|-|-|-|-|
|||The lease income confirmed in||
|lessor|Category of leased assets||Category of leased assets|
|||this year||

Notes:
(4) Related-party guarantee
The Company was
guarantor:
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|||||Execution accomplished|
|Secured party|Guarantee amount|Start date|End date||
|||||or not|
|Hubei Sanonda Foreign|||||
|Trading|61,200,000.00|2013/01/21|2016/01/21|Yes|
|Co., Ltd.|||||
|Hubei Sanonda Foreign|||||
|Trading|120,000,000.00|2013/06/23|2017/06/22|No|
|Co., Ltd.|||||
|Hubei Sanonda Foreign|||||
|Trading|34,000,000.00|2010/12/10|2015/12/10|Yes|
|Co., Ltd.|||||
|Hubei Sanonda Foreign|||||
|Trading|30,000,000.00|2009/12/04|2016/12/04|Yes|
|Co., Ltd.|||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
|Hubei Sanonda Foreign|||||
|Trading|30,000,000.00|2011/03/09|2016/03/08|Yes|
|Co., Ltd.|||||
|Hubei Sanonda Foreign|||||
|Trading|50,000,000.00|2013/01/22|2017/01/21|No|
|Co., Ltd.|||||
|Hubei Sanonda Foreign|||||
|Trading|30,000,000.00|2013/03/12|2016/03/12|Yes|
|Co., Ltd.|||||
|Hubei Sanonda Foreign|||||
|Trading|60,000,000.00|2014/04/29|2017/04/28|No|
|Co., Ltd.|||||
|Hubei Sanonda Foreign|||||
|Trading|64,000,000.00|2013/12/11|2018/12/10|No|
|Co., Ltd.|||||
|Hubei Sanonda Foreign|||||
|Trading|65,000,000.00|2014/01/26|2017/01/26|No|
|Co., Ltd.|||||

The Company was Secured party
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|||||Execution accomplished|
|guarantor:|Guarantee amount|Start date|End date||
|||||or not|
|Jingzhou Sanonda|||||
||50,000,000.00|2014/01/02|2015/01/01|Yes|
|Co., Ltd.|||||
|Jingzhou Sanonda|||||
||98,000,000.00|2012/12/25|2017/12/24|No|
|Co., Ltd.|||||
|Jingzhou Sanonda|||||
||170,000,000.00|2013/12/19|2016/12/18|Yes|
|Co., Ltd.|||||
|Jingzhou Sanonda|||||
||140,000,000.00|2014/02/01|2015/01/31|Yes|
|Co., Ltd.|||||
|China National|||||
|Agrochemical|100,000,000.00|2012/03/14|2015/03/14|Yes|
|Corporation|||||
|China National|||||
|Agrochemical|300,000,000.00|2013/09/09|2016/09/09|Yes|
|Corporation|||||
|China National|||||
||100,000,000.00|2012/12/20|2016/12/20|Yes|
|Agrochemical|||||

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
|Corporation|||||
|China National|||||
|Agrochemical|50,000,000.00|2013/01/30|2016/07/30|Yes|
|Corporation|||||
|China National|||||
|Agrochemical|150,000,000.00|2013/09/10|2018/09/10|No|
|Corporation|||||
|China National Chemical|||||
||100,000,000.00|2008/07/28|2016/02/09|Yes|
|Corporation|||||
|China National Chemical|||||
||200,000,000.00|2013/09/25|2020/09/25|No|
|Corporation|||||
|China National Chemical|||||
||150,000,000.00|2013/10/14|2020/10/13|No|
|Corporation|||||
|China National Chemical|||||
||160,000,000.00|2014/06/10|2021/06/09|No|
|Corporation|||||

Notes: the Company provided maximum amount guarantee of L/C, such as documentary trade financing behavior for Hubei Sanonda Foreign Trading.
The Company was as secured party, Jingzhou Sanonda Co., Ltd., China National Agrochemical Corporation and China National Chemical Corporation provided guarantee for the Company.
(5) Inter-bank lending of capital of relatedparties：
Unit: RMB Yuan
||||||
|-|-|-|-|-|
||Amount borrowed and||||
|Related party||Initial date|Due date|Explanation|
||loaned||||
|Borrowed|||||
|loaned|||||

(6) Related party asset transfer and debt restructuring
Unit: RMB Yuan
|||||
|-|-|-|-|
|Related party|Content|2014|2013|

(7) Rewards for the key management personnel
Unit: RMB Yuan
||||
|-|-|-|
|Item|2014|2013|
|Rewards for the key management|||
||3,040,000.00|2,890,000.00|
|personnel|||

2014 Annual Report of Hubei Sanonda Co., Ltd. (8) Other related-party transactions
1. The parent company of theGroup—Sanonda Group Corporation paid& gained wages and social security through the Group with a total of RMB1, 235,680.46.
2. Balance of bank deposit of Chemchina Finance Co., Ltd. of the Group at the period- begin was of RMB 68,573,515.18, period-end was of RMB 82,266,671.62, and balance of short-term loan at the period- begin was of RMB 130,000,000.00, period-end was of RMB 0.00; Interest of bank deposit of this year was of RMB 1,686,475.07, and interest of the paid of short-term loan of this year was of RMB 278,500.00.
3. Guaranteed fees
|||||
|-|-|-|-|
|Name|Type|Content|2014|
||||Amount|
|Jingzhou Sanonda Co., Ltd.|Guarantee|Payment ofguaranteed fees|420,000.00|
|China National AgrochemicalCorporation|Guarantee|Payment ofguaranteed fees|1,150,000.00|
|China National ChemicalCorporation|Guarantee|Payment ofguaranteed fees||

6. Receivables and payables of related parties
(1) Receivables
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|||Closing period||Opening period||
|Item|Related party|||||
|||Book balance|Bad debt provision|Book balance|Bad debt provision|
||Makhteshim|||||
|Account receivable||20,109,257.16|1,005,462.86|3,866,800.31|193,340.02|
||Chemical Works Ltd.|||||
|Account receivable|FARMOZ PTY LTD|||4,419,508.68|220,975.43|
||Jingzhou Huaxiang|||||
|Account receivable||||18,200.00|910.00|
||Chemical Co., Ltd.|||||
||Sichuan Bluestar|||||
|Prepayment||||63,000.00||
||Machinery Co., Ltd.|||||
||Bluestar|||||
||Environmental|||||
|Prepayment||||80,609.00||
||Engineering Co.,|||||
||Ltd.|||||
||Haohua Engineering|||||
|Prepayment||||17,760,000.00||
||Co., Ltd.|||||

2014 Annual Report of Hubei Sanonda Co., Ltd. (2) Payables
Unit: RMB Yuan
|||||
|-|-|-|-|
|Item|Related party|Closing book value|Opening book value|
||Bluestar (Beijing) Chemical|||
|Accounts payable||9,225,000.00|105,700.00|
||Machinery Co., Ltd.|||
|Accounts payable|Haohua Engineering Co., Ltd.|961,417.30||
||Shangdong Dacheng|||
|account receivable in advance||1,500.00|2,549,000.00|
||Agrochemical Co., Ltd.|||
||Jiamusi Heilong Agrochemicals|||
|account receivable in advance||10,000.00||
||Co., Ltd.|||

7. Related party commitment
8. Other
XIII. Stock payment
1. The Stock payment overall situation
□ Applicable√ Inapplicable
2. The Stock payment settled by equity
□ Applicable√ Inapplicable
3. The Stock payment settled by cash
□ Applicable√ Inapplicable
4. Modification and termination of the stock payment
5. Other
XIV. Commitments
1. Significant commitments
Significant commitments at balance sheet date
As of 31 Dec. 2014, there was no significant commitment or contingency in the Group.
2014 Annual Report of Hubei Sanonda Co., Ltd. 2. Contingency
(1) Significant contingency at balance sheet date
(2) The Company have no significant contingency to disclose, also should be stated
There was no significant contingency in the Company.
3. Other
XV. Events after balance sheet date
1. Significant events had not adjusted
Unit: RMB Yuan
|||||
|-|-|-|-|
|||Influence number to the||
||||Reason of unable to estimate|
|Item|Content|financial position and operating||
||||influence number|
|||results||

2. Profit distribution
Unit: RMB Yuan
|||
|-|-|
|Planning allocation of profits or dividends|59,392,322.00|
|Profits or dividends approved, reviewed and issue by the||
||59,392,322.00|
|declaration||

3. Sales return
4. Notes of other significant events
As of 31 Dec. 2014, there was no other significant event after balance sheet date.
XVI. Other significant events
1. The accounting errors correction in previous period
(1) Retrospective restatement
Unit: RMB Yuan
|||||
|-|-|-|-|
|||Name of the influenced||
|Content|Processing program|report items during|Cumulative impact|
|||comparison period||

2014 Annual Report of Hubei Sanonda Co., Ltd. (2) Prospective application
||||
|-|-|-|
|Content|Processing program|Reason of adopting prospective application|

 2. Debt restructuring
3. Replacement of assets
(1) Non-monetary assets exchange
(2) Other assets replacement
4. Pension plan
5. Discontinuing operation
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
|||||||Termination of|
|||||||the business|
|||||Income tax||profits|
|Item|Income|Expense|Total profits||Net profit||
|||||expense||attributable to the|
|||||||parent company|
|||||||owner|

 Other notes:
6. Segment information
(1) Recognition basis and accounting policies of reportable segment
(2) The financial information of reportable segment
(3) There was no reportable segment, or the total amount of assets and liabilities of each part of reportable segment, shall disclose the reason.
(4) Other notes
7. Other important transactions and events have an impact on investors decision-making
8. Other
On 8 Oct. 2014, the Company received a notice from China National Agrochemical Corporation (“CNAC”) that its fully-funded
subsidiary CNAC International Co., Ltd. (“CNAC International”) had signed<The Equity TransferAgreement> with ADAMA
Celsius B.V. (“Celsius”), intending to transfer the100% equity of Jingzhou Sanonda Holdings Co., Ltd. (“Sanonda Holdings”, the
controlling shareholder of the Company) it held to Celsius. This would enable Celsius to indirectly obtain20.15% common A-shares
2014 Annual Report of Hubei Sanonda Co., Ltd. in the Company, which were formerly held by Sanonda Holdings. Plus the original holding of10.6% B-shares in the Company, Celsius would directly and indirectly hold a total stake of30.75% in the Company.
Incorporated in the Netherlands according to the local law, Celsius specializes in wholesale of basic and industrial and agricultural chemical products. Its indirect controlling shareholder is ADAMA Agricultural Solutions Ltd., in which CNAC indirectly holds a stake of60%.
According to the notice, the deal would be concluded in the first half of 2015. The deal will not change theCompany’s ultimate actual controller (the State-owned Assets Supervision and Administration Commission of the State Council) or direct controlling shareholder (Sanonda Holdings).
The equity transfer still awaits approval of relevant government organizations. In addition, further due diligence from intermediaries may still be needed for the deal.
XVII. Notes of main items in the financial statements of the Company
1. Accounts receivable
(1) Accounts receivable classified by category
Unit: RMB Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||||Provision for bad||||||||
||Book balance|||||Book balance||Provision for bad debts|||
|Category|||debts||Book||||||
|||||||||||Book value|
|||Proportio|||||Proportio||||
||Amount||Amount|Amount|value|Amount||Amount|Amount||
|||n (%)|||||n (%)||||
|Accounts receivable|||||||||||
|withdrawal of bad|||||||||||
||368,860,||8,287,41||360,573,0|200,451||7,437,478||193,013,91|
|debt provision of by||99.84%||2.25%|||99.85%||3.71%||
||445.78||0.79||34.99|,394.50||.65||5.85|
|credit risks|||||||||||
|characteristics:|||||||||||
|Accounts receivable|||||||||||
|with insignificant|||||||||||
|single amount but|||||||||||
||584,457.||584,457.|||302,796||302,796.5|||
|large risks of groups||0.16%||100.00%|||0.15%||100.00%||
||52||52|||.52||2|||
|after grouping by|||||||||||
|credit risks|||||||||||
|characteristics|||||||||||
||369,444,||8,871,86||360,573,034.99|200,754||7,740,275||193,013,915.85|
|Total||100.00%||2.40%|||100.00%||3.86%||
||903.30||8.31|||,191.02||.17|||

 Accounts receivable with insignificant single amount but large risks of groups after grouping by credit risks characteristics at the end of reporting period.
□ Applicable√ Inapplicable
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√Applicable□ Inapplicable
2014 Annual Report of Hubei Sanonda Co., Ltd. Unit: RMB Yuan
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Accounts receivable|Provision for bad debts|Proportion (%)|
|Subentry within 1 year||||
|Within 1 year|19,540,724.36|977,036.22|5.00%|
|Subtotal of within 1 year|19,540,724.36|977,036.22|5.00%|
|1-2 years|0.46|0.05|10.00%|
|2-3 years|110,148.25|33,044.48|30.00%|
|Over 3 years|7,330,811.04|7,277,330.04||
|3-4 years|102,747.00|51,373.50|50.00%|
|4-5 years|4,215.00|2,107.50|50.00%|
|Over 5 years|7,223,849.04|7,223,849.04|100.00%|
|Total|26,981,684.11|8,287,410.79||

Notes:
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable√ Inapplicable
In the groups, accounts receivable adopting other methods to withdraw bad debt provision:
|||||
|-|-|-|-|
|Name of the group|Balance at year-end|||
||Accounts receivable|Bad debt provision|Withdrawal reason|
|Risk-free groups|341,878,761.67||Internal funds of the group|
|Total|341,878,761.67|||

Accounts receivable with significant single amount and individually withdrawn bad debt provision at the end of the year
||||||
|-|-|-|-|-|
|Accounts receivable (entity)|Balance at year-endAccounts Bad debt Withdraw Accounts receivablereceivable provision al reason||||
|||Bad debtprovision|Withdrawal reason|Accounts receivable|
|Jiangxi Nanchang Red ValleyPlant Protection Center|584,457.52|584,457.52|100.00%|Multiple collection failed, notexpected to recover|
|Total|584,457.52|584,457.52|—|—|

(2) Bad debt provision withdrawal, reversed or recovered in the report period
The amount of bad debt provision was RMB 1,131,593.14; the amount of reversed or recovered bad debt provision in the report period was of RMB 000.
Significant amount of reversed or recovered bad debt provision
Unit: RMB Yuan
2014 Annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Entity|Amount|Method|

(3) Particulars of the actual verification of accounts receivable during the reporting period
Unit: RMB Yuan
|||
|-|-|
|Item|Amount|

Of which: significant actual verification of accounts receivable
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||||||Whether occurred|
|Name of the entity|Nature|Amount|Reason|Procedure|because of related|
||||||party transactions|

 Notes:
(4) Top five of account receivable of closing balance collected by arrears party
||||||
|-|-|-|-|-|
|Name of the entity|Relationship|Amount|Year|Proportion (%)|
|Hubei Sanonda ForeignTrading Co., Ltd.|Subsidiary of theCompany|208,438,446.96|Within 1 year|56.42|
|Jingzhou HongxiangChemicals Co., Ltd.|Subsidiary of theCompany|133,440,314.71|Within 1 year|36.12|
|Chongqing Ziguang ChemicalCo., Ltd.|Non-related party|12,650,400.00|Within 1 year|3.42|
|Chongqing Yukai AgriculturalDevelopment Co., Ltd.|Non-related party|1,473,343.97|Over 5 years|0.40|
|Yunnan Kunming PesticideCo., Ltd.|Non-related party|1,291,250.00|Within 1 year|0.35|
|Total||357,293,755.64|--|96.71|

 (5) Derecogniziton of account receivable due to the transfer of financial assets
Other notes:
2. Other account receivable
(1) Other account receivable classified by category
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Category|||||||
||Book balance|Provision for bad|Book|Book balance|Provision for bad debts|Book value|

2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||||debts||value||||||
||Amount|Proportio|||||Proportio||||
||||Amount|Amount||Amount||Amount|Amount||
|||n (%)|||||n (%)||||
|Accounts receivable|81,481,416.37|||6.42%|||||||
|withdrawal of bad|||||||||||
||||5,229,03||76,252,38|150,345||5,472,766||144,872,70|
|debt provision of by||100.00%|||||100.00%||3.64%||
||||0.47||5.90|,467.32||.05||1.27|
|credit risks|||||||||||
|characteristics:|||||||||||
||81,481,416.37||5,229,03|6.42%|76,252,385.90|150,345||5,472,766||144,872,701.27|
|Total||100.00%|||||100.00%||3.64%||
||||0.47|||,467.32||.05|||

 Other accounts receivable with insignificant single amount but large risks of groups after grouping by credit risks characteristics at the end of reporting period
□ Applicable√ Inapplicable
In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√Applicable□ Inapplicable
Unit: RMB Yuan
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Other account receivable|Provision for bad debts|Proportion (%)|
|Subentry within 1 year||||
|Within 1 year|599,506.51|29,975.33|5.00%|
|Subtotal of within 1 year|599,506.51|29,975.33|5.00%|
|1-2 years|212,000.00|21,200.00|10.00%|
|2-3 years|330,784.57|99,235.37|30.00%|
|Over 3 years|5,100,812.59|5,078,619.77||
|3-4 years|10,000.00|5,000.00|50.00%|
|4-5 years|34,385.65|17,192.83|50.00%|
|Over 5 years|5,056,426.94|5,056,426.94|100.00%|
|Total|6,243,103.67|5,229,030.47||

Notes:
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable√ Inapplicable
In the groups, other accounts receivable adopting other methods to withdraw bad debt provision:
√Applicable□ Inapplicable
|||||
|-|-|-|-|
|Name of the group|Balance at year- endAccount receivable Bad debt provision Withdrawal reason|||
|||Bad debt provision|Withdrawal reason|
|Sanonda Jingzhou Agrochemicals Co., Ltd|660,146.36||Internal funds of the group|
|Jingzhou Hongxiang Chemicals Co., Ltd.|70,000,000.00||Internal funds of the group|

2014 Annual Report of Hubei Sanonda Co., Ltd. Export rebates 4,578,166.34 Risk-free
|||
|-|-|
|Total|75,238,312.70|

(2) Bad debt provision withdrawal, reversed or recovered in the report period
The amount of bad debt provision was RMB 243,735.58, the amount of reversed or recovered bad debt provision in the report period RMB Yuan
Significant amount of reversed or recovered bad debt provision
Unit: RMB Yuan
||||
|-|-|-|
|Entity|Amount|Method|

(3) Particulars of the actual verification of other accounts receivable during the reporting period
Unit: RMB Yuan
|||
|-|-|
|Item|Amount|

Of which: significant actual verification of other accounts receivable
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
||||||Whether occurred|
|Name of the entity|Nature|Amount|Reason|Procedure|because of related|
||||||party transactions|

 Notes:
(4) Other account receivable classified by account nature
Unit: RMB Yuan
||||
|-|-|-|
|Nature|Closing book value|Opening book value|
|Turnover accounts with Jingzhou Hongxiang|70,000,000.00||
|||140,000,000.00|
|Chemicals Co., Ltd.|||
|Export rebates|4,578,166.34|5,000.00|
|Investment|3,398,275.80|3,398,275.80|
|Cash pledge|1,029,784.57|1,029,784.57|
|Pretty cash|690,874.23|1,938,693.39|
|Other|1,784,315.43|3,973,713.56|
|Total|81,481,416.37|150,345,467.32|

 (5) The top five other account receivable classified by debtor at period end
Unit: RMB Yuan
|||||||
|-|-|-|-|-|-|
|Entity|Nature|Closing balance|Aging|Proportion%|Closing balance of|

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||||
|-|-|-|-|-|-|
||||||bad debt provision|
|Jingzhou Hongxiang|Turnover accounts|||||
|||70,000,000.00|2-3years|85.91%||
|Chemicals Co., Ltd.|with the subsidiary|||||
|Directly under the||||||
|Branch of National|Refund of tax for|||||
|||4,578,166.34|Within 1 year|5.62%||
|Tax Bureau of|export receivable|||||
|Jingzhou||||||
||Investment not|||||
|Shantou Biyue Plastic||||||
||recovered or|3,125,000.00|Over 5 years|3.84%|3,125,000.00|
|Co., Ltd.||||||
||liquidated|||||
|Sanonda (Jingzhou)||||||
||Turnover accounts||Within 1 year|||
|Pesticide Chemical||660,146.36||0.81%||
||with the subsidiary||/1-2years|||
|Co., Ltd.||||||
|Hubei Jingzhou||||||
|Shashi Agricultural||||||
||Purchase house|548,500.00|Over 5 years|0.67%|548,500.00|
|Production Materials||||||
|Co., Ltd.||||||
|Total|--|78,911,812.70|--||3,673,500.00|

 (6) Account receivable involving government subsidies
Unit: RMB Yuan
||||||
|-|-|-|-|-|
|||||Estimated recovering|
|Name of entity|Item|Closing balance|Closing aging||
|||||time, amount and basis|

 (7) Other account receivable derecognized due to the transfer of financial assets
(8) Amount of transfer other account receivable and assets and liabilities formed by its continuous involvement
Other notes:
3. Other equity investment
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||bad debt|||bad debt||
||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|

2014 Annual Report of Hubei Sanonda Co., Ltd. (1) Investment to the subsidiary
Unit: RMB Yuan
||||||||
|-|-|-|-|-|-|-|
||||||Withdrawn||
|||||||Closing balance|
||||||impairment||
|Entity|Opening balance|Increase|Decrease|Closing balance||of impairment|
||||||provision in the||
|||||||provision|
||||||reporting period||
|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.|||||||
|Jingzhou|||||||
|Hongxiang|||||||
||37,619,905.41|||37,619,905.41|||
|Chemicals Co.,|||||||
|Ltd.|||||||
|Total|80,026,635.41|||80,026,635.41||24,500,000.00|

 (2) Investment to joint ventures and associated enterprises
Unit: RMB Yuan
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
|||Increase/decrease in reporting period||||||||||
|||||Investme|||||||Closing|
||||||Adjustme|||||||
|||||nt profit||||Withdraw|||balance|
|||Additiona|||nt of||Declarati|||||
|Name of|Opening||Negative|and loss||Other||n||Closing|of|
|||l|||other||on of cash|||||
|investee|balance||investmen|recognize||equity||impairme|Other|balance|impairme|
|||investmen|||comprehe||dividends|||||
||||t|d under||changes||nt|||nt|
|||t|||nsive||or profits|||||
|||||the equity||||provision|||provision|
||||||income|||||||
|||||method||||||||
|I. Joint ventures||||||||||||
|II. Associated enterprises||||||||||||

(3) Other notes
4. Revenues and operating costs
Unit: RMB Yuan
2014 Annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
||Reporting period||Same period of last year||
|Item|||||
||Revenues|Operating costs|Revenues|Operating costs|
|Main operations|3,044,864,870.25|2,122,938,073.28|2,947,049,466.39|2,250,434,591.10|
|Other operations|93,298,834.95|84,250,795.36|59,991,024.71|49,843,028.39|
|Total|3,138,163,705.20|2,207,188,868.64|3,007,040,491.10|2,300,277,619.49|

 Other notes:
5. Investment income
Unit: RMB Yuan
||||
|-|-|-|
|Item|Reporting period|Same period of last year|
|Long-term equity investment income|||
|||650,000.00|
|accounted by cost method|||
|Investment income arising from disposal of|||
|||2,766,935.46|
|long-term equity investments|||
|Investment income received from holding of|||
||1,716,466.00|4,062,224.59|
|available-for-sale financial assets|||
|Total|1,716,466.00|7,479,160.05|

 6. Other
XVIII. Supplementary materials
1. Items and amounts of extraordinary gains and losses
√ Applicable□ Inapplicable
Unit: RMB Yuan
||||
|-|-|-|
|Item|Amount|Note|
|Gains/losses on the disposal of non-current|||
||54,813.19||
|assets|||
|Tax rebates, reductions or exemptions due to|||
|approval beyond authority or the lack of|4,574,874.07||
|official approval documents|||
|Gains and losses from debt restructuring|-6,000.00||
|Other non-operating income and expenses|||
||-2,876,432.21||
|other than the above|||
|Less: Income tax effects|199,524.02||
|Minority interests effects|14,300.00||
|Total|1,533,431.03|--|

2014 Annual Report of Hubei Sanonda Co., Ltd. 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 thePublic—Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item□ Applicable√ Inapplicable
2. Return on equity (ROE) and earnings per share (EPS)
|||||
|-|-|-|-|
|||EPS（Yuan/share）||
|Profit as of reporting period|Weighted average ROE (%)|||
|||EPS-basic|EPS-diluted|
|Net profit attributable to common||0.8280|0.8280|
||27.68%|||
|shareholders of the Company||||
|Net profit attributable to common||||
|shareholders of the Company after||||
||27.59%|0.8254|0.8254|
|deduction of non-recurring profit||||
|and loss||||

3. Differences between accounting data under domestic and overseas accounting standards
(1) Differences of net profit and net assets disclosed in financial reports prepared under international and Chinese accounting standards
□ Applicable√ Inapplicable
(2) Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards
□ Applicable√ Inapplicable
(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. Supplementary materials of changes in accounting policies
√ Applicable□ Inapplicable
The Company according to such eight accounting rules of Accounting Standards for Enterprises No.2—Long Term Equity Investment released in 2014 by Ministry of Finance change related accounting policies and retroactive restate the comparative financial statements, after restatement, the consolidated balance sheet of 1 Jan. 2013 and 31 Dec. 2013:
Unit: RMB Yuan
|||||
|-|-|-|-|
|Item|1 Jan. 2013|31 Dec. 2013|31 Dec. 2014|
|Current Assets:||||
|Monetary funds|175,181,365.77|414,065,921.21|423,347,736.46|

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||
|-|-|-|-|
|Notes receivable|23,690,345.75|41,103,985.15|2,874,466.50|
|Accounts receivable|180,964,377.73|209,166,447.16|195,635,912.75|
|Accounts paid in advance|37,505,796.88|43,042,028.26|19,444,766.16|
|Other account receivable|18,815,365.79|7,224,391.05|19,679,596.65|
|Inventories|366,759,772.17|258,274,457.88|330,541,606.05|
|Total current assets|802,917,024.09|972,877,230.71|991,524,084.57|
|Non-current assets:||||
|Available-for-sale financial|||9,153,782.63|
||9,153,782.63|9,153,782.63||
|assets||||
|Investment property|4,394,812.50|4,154,412.50|5,363,928.28|
|Fixed assets|1,308,629,352.60|1,324,222,385.03|1,248,826,394.76|
|Construction in progress|121,263,645.49|234,487,866.23|423,857,021.70|
|Engineering materials|||88,970,010.63|
|Intangible assets|143,904,010.68|137,371,149.10|140,020,897.12|
|Deferred income tax assets|15,231,757.10|12,619,948.14|13,199,137.78|
|Other non-current assets||13,384,400.00|13,384,400.00|
|Total non-current assets|1,602,577,361.00|1,735,393,943.63|1,942,775,572.90|
|Total assets|2,405,494,385.09|2,708,271,174.34|2,934,299,657.47|
|Current liabilities:||||
|Short-term loans|355,708,601.70|359,220,205.55|75,000,000.00|
|Notes payable||40,000,000.00|15,000,000.00|
|Accounts payable|198,994,327.26|156,037,973.10|216,786,274.77|
|Accounts received in|||34,830,464.65|
||59,448,030.30|79,437,442.04||
|advance||||
|Payroll payable|7,364,901.89|25,332,986.86|25,740,973.02|
|Tax payable|-19,105,426.98|73,337,138.50|72,051,904.29|
|Dividends payable|349,463.30|250,000.00|250,000.00|
|Other account payable|31,369,677.77|34,544,608.36|31,749,791.93|
|Non-current liabilities due|||500,000.00|
||409,550,000.00|77,390,000.00||
|within 1 year||||
|Total current liability|1,043,679,575.24|845,550,354.41|471,909,408.66|
|Non-current liabilities:||||
|Long-term borrowings|80,000,000.00|296,090,000.00|431,590,000.00|
|Long-term payables|650,000.00|650,000.00|650,000.00|
|Deferred income|16,309,089.24|19,538,888.89|22,754,814.82|

2014 Annual Report of Hubei Sanonda Co., Ltd.
|||||
|-|-|-|-|
|Total non-current liabilities|96,959,089.24|316,278,888.89|454,994,814.82|
|Total liabilities|1,140,638,664.48|1,161,829,243.30|926,904,223.48|
|Owners’ equity (or||||
|shareholders’ equity)||||
|Paid-up capital (or share|||593,923,220.00|
||593,923,220.00|593,923,220.00||
|capital)||||
|Capital reserves|266,090,773.02|263,184,043.66|263,184,043.66|
|Specific reserves|13,825,364.46|16,059,288.71|15,425,099.43|
|Surplus reserves|92,680,039.14|126,334,248.31|178,048,385.86|
|Retained profits|289,017,364.90|546,688,770.98|957,050,401.65|
|Total equity attributable to|||2,007,631,150.60|
||1,255,536,761.52|1,546,189,571.66||
|owners of the Company||||
|Minority interests|9,318,959.09|252,359.38|-235,716.61|
|Total owners’ (or||1,546,441,931.04|2,007,395,433.99|
||1,264,855,720.61|||
|shareholders’) equity||||
|Total liabilities and owners’|||2,934,299,657.47|
||2,405,494,385.09|2,708,271,174.34||
|(or shareholders’) equity||||

5. Other
2014 Annual Report of Hubei Sanonda Co., Ltd. Section XII. Documents Available For Reference
(I) Financial Statements carried with signatures and seals of Legal Representative and Accounting Principal, as well as Head of the Accounting Organ;
(II) Original of theAuditor’s Report with the seals of accounting firm and the signatures and seals of certified public accountants; (III) In the reporting period, originals of all documents of the Company ever disclosed publicly in media designated by China Securities Regulatory Commission as well as the originals of all the public notices were deposited in the office of the Company. Hubei Sanonda Co., Ltd.
Legal representative: Mr. Li Zuorong
12 March 2015