Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018 HUBEI SANONDA CO., LTD.
THIRD QUARTER REPORT 2018
Adama Agricultural Solutions Ltd., one of the world's leading crop protection companies, and Hubei Sanonda Co., Ltd. have combined, creating the only integrated, publicly traded Global-China crop protection company.
At ADAMA, we strive to Create Simplicity in Agriculture– offering farmers effective products and services that simplify their lives and help them grow. With one of the most comprehensive and diversified portfolios of differentiated, quality products, our 6,600 strong team reaches farmers in over 100 countries, providing them with solutions to control weeds, insects and disease, and improve their yields.
Please see key additional information and further details included in the Annex.
October 2018
Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018 Section I Important Notice
TheCompany’s Board of Directors, Board of Supervisors, directors, supervisors and senior managers confirm that the content of the Report is true, accurate and complete and contains no false statement, misleading presentation or material omissions, and assume joint and several legal liability arising therefrom.
Chen Lichtenstein, the person in charge of the Company as well as its legal representative, and Aviram Lahav, the person in charge of the accounting function (Chief Financial Officer), hereby state and ensure the truthfulness, accuracy and completeness of the Financial Report.
All theCompany’s directors attended the board meeting for the review of this Report.
This Report has been prepared in both Chinese and English. Should there be any discrepancies between the two versions, the Chinese version shall prevail.
Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018 Section II Financial Highlights& Shareholder Changes
I Highlights of accounting data and financial indicators
Whether the Company performs any retroactive adjustments to or restatements of its accounting data of last year due to change in accounting policies or correction of accounting errors
□Yes√ No
Unit:RMB’000
|||||
|-|-|-|-|
||End of Reporting Period|End of last year|+/- (%)|
|Total assets|42,628,220|39,685,756 Note 1|7.41%|
|Net assets attributable to shareholders of|22,423,162|18,849,847 Note 1||
|the Company|||18.96%|

Unit:RMB’000
||||||||
|-|-|-|-|-|-|-|
||July - September|||January - September|||
||||+/- (%)|||+/- (%)|
||2018|2017||2018|2017||
|Operating revenues|5,928,627|5,624,175|5.41%|18,954,885|18,394,239|3.05%|
|Net profit attributable to shareholders of|179,661|282,520|(36.41%)|2,542,442|1,599,514||
|the Company||||||58.95%|
|Net profit attributable to shareholders of||270,892|||||
|the Company excluding non-recurring|||||||
|profit and loss|175,718||(35.13%)|966,014|436,359|121.38%|
|Net cash flow from operating activities||||1,454,557|2,521,540|(42.31%)|
|Basic EPS (RMB/share)|0.0734|0.1206|(39.14%)|1.0392|0.6830|52.15%|
|Diluted EPS (RMB/share)|N/A|N/A|-|N/A|N/A|-|
|Weighted average return on net assets|0.82%|1.61%|(49.10%)|12.31%|9.28%|32.70%|

 Note 1:
The amounts specified are 2018 opening balance amounts rather than 2017 closing balance amounts. As of January 1, 2018, the Company began to adopt the revised Accounting Standards for Business Enterprises (“ASBE”) regarding financial instruments and revenues, promulgated by Ministry of Finance in 2017. According to the transitional requirements of relevant revised ASBEs, the opening balances of total assets and net assets attributable to the shareholders of the Company have been adjusted. The total assets and net assets attributable to the shareholders of the Company as at December 31, 2017 wereRMB’000 39,613,922 andRMB’000 18,778,013, respectively.
Please see key additional information and further details included in the Annex.
Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018 Non-Recurring profit/loss
√ Applicable□ Not applicable
Unit:RMB’000
||||
|-|-|-|
|Item|Reporting Period|Note|
|Gains/losses on the disposal of non-current assets (including||Divestment in Europe, related|
||1,996,244||
|the offset part of asset impairment provisions)||to the Syngenta Transaction.|
|Government grants recognized through profit or loss|||
|(excluding government grants closely related to business of|||
||16,667|--|
|the Company and given at a fixed quota or amount in|||
|accordance with government’s uniform standards)|||
|Recovery or reversal of provision for bad debts which is|||
||17,027|--|
|assessed individually during the years|||
|Other non-operating income and expenses other than the|||
||(4,134)|--|
|above|||
|Less: Income tax effects|449,376|--|
|Total|1,576,428|--|

Explanation of why the Company classified an item as exceptional profit/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to thePublic—Exceptional Profit and Loss, or reclassified any exceptional profit/loss item given as an example in the said explanatory announcement to recurrent profit/loss
□ Applicable√ Not applicable
No such cases in the Reporting Period.
II Total number of shareholders and shareholdings of top 10 shareholders at the period- end
1. Total number of ordinary shareholders and preference shareholders who had resumed their voting right& shareholdings of top 10 shareholders at the period-end
Unit: share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||52,055|||Total number of preference|||||
|Total number of ordinary||||||||||
|||(including|||shareholders who had resumed their|||||
|shareholders at the end of the||||||||0||
|||35,817 for A shares and|||voting right at the end of the|||||
|Reporting Period||||||||||
|||16,238 for B shares)|||Reporting Period (if any)|||||
|Shareholdings of top 10 shareholders||||||||||
|||||||Number of|Pledged or frozen shares|||
||Nature of||Shareholding|Number of||||||
|Name of shareholder||||||restricted||||
||shareholder||percentage|shares held|||Status||Number|
|||||||shares held||||
|China NationalAgrochemicalCorporation (CNAC)|State-ownedlegal person||74.02%|1,810,883,039||1,810,883,039||||
||||||||-||-|
|Jingzhou SanondaHolding Co., Ltd.|State-ownedlegal person||4.89%|119,687,202||-||||
||||||||-||-|
|China Cinda AssetManagement Co., Ltd.|State-ownedlegal person||1.37%|33,557,046||33,557,046|-||-|
|China StructuralReform Fund Co., Ltd.|State-ownedlegal person||1.37%|33,557,046||33,557,046|-||-|

Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
|||||||||
|-|-|-|-|-|-|-|-|
|CCB Principal-ICBC-Avic Trust, Trust Planof Pooled Funds ofCCB Principal PrivatePlacementInvestment, Tianqi(2016) No. 293 ofAvic Trust|Others|0.53%|12,885,906||12,885,906|||
|||||||-|-|
|Industrial Bank Co.,Ltd, Mixed SecuritiesInvestment Fund,Aegon-IndustrialTrend Investment(LOF)|Others|0.33%|8,053,736||8,053,736|||
|||||||-|-|
|Portfolio No.503 ofNational SocialSecurity Fund|Others|0.25%|5,999,921||-|||
|||||||-|-|
|Jiang Yun|Domesticnatural person|0.21%|5,200,173||-|-|-|
|Portfolio No.118 ofNational SocialSecurity Fund|Others|0.21%|5,065,684||-|||
|||||||-|-|
|GUOTAI JUNANSECURITIES(HONGKONG) LIMITED|Foreign legalperson|0.20%|4,838,044||-|||
|||||||-|-|
|Shareholdings of top 10 non-restricted shareholders||||||||
|||||Number of non-restricted||Type of shares||
|Name of shareholder||||||||
|||||shares held at the period-end||Type|Number|
|Jingzhou Sanonda Holding Co., Ltd.||||119,687,202||RMB ordinary||
||||||||119,687,202|
|||||||share||
|Portfolio No.503 of National Social Security Fund||||5,999,921||RMB ordinary||
||||||||5,999,921|
|||||||share||
|Jiang Yun||||5,200,173||RMB ordinary||
||||||||5,200,173|
|||||||share||
|Portfolio No.118 of National Social Security Fund||||5,065,684||RMB ordinary||
||||||||5,065,684|
|||||||share||
|GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED||||4,838,044||Domestically||
|||||||listed foreign|4,838,044|
|||||||share||
|Qichun County State-owned Assets Administration||||4,169,266||RMB ordinary||
||||||||4,169,266|
|||||||share||
|Agricultural Bank of China Limited - CSI 500 ExchangeTraded Fund||||4,034,562||RMB ordinary||
||||||||4,034,562|
|||||||share||
|Wu Feng||||2,980,237||RMB ordinary||
||||||||2,980,237|
|||||||share||
|Xie Qingjun||||2,500,000||Domestically||
|||||||listed foreign|2,500,000|
|||||||share||
|Aegon-Industrial Fund – Agricultural Bank of China –||||2,493,609||RMB ordinary|2,493,609|

Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
||||
|-|-|-|
|China Pacific Life Insurance –Entrusted Investment byPrivate Placement Strategic Product (Assured AmountBonus)||share|
||Jingzhou Sanonda Holdings Co., Ltd. and CNAC are related parties, and are acting-||
||in-concert parties as prescribed in the Administrative Methods for Acquisition of||
|Related or act-in-concert parties|Listed Companies. Sanonda Holding is a wholly-controlled subsidiary of CNAC. It is||
|among the shareholders above|unknown whether the other shareholders are related parties or acting-in-concert||
||parties as prescribed in the Administrative Methods for Acquisition of Listed||
||Companies.||
||Shareholder Wu Feng held 775,726 shares of the Company through a credit||
|Top 10 ordinary shareholders|||
||collateral securities trading account and held 2,204,511shares of the Company||
|conducting securities margin|||
||through a common securities account, who thus held 2,980,237shares of the||
|trading (if any)|||
||Company in total.||

Did any of the top 10 ordinary shareholders or the top 10 non-restricted ordinary shareholders of the Company conduct any promissory repo during the Reporting Period?
□ Yes√ No
No such cases in the Reporting Period.
2. Total number of preference shareholders and shareholdings of the top 10 of them at the period-end
□ Applicable√ Not applicable
Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018 Section III Significant Events
I Changes in main accounting statement items and financial indicators in the Reporting
Period, as well as reasons for the changes
√ Applicable□ Not applicable
Unit:RMB’000
||||||
|-|-|-|-|-|
|Assets and liabilities|September 30, 2018|January 1, 2018|+/- (%)|Main reason for change|
|Financial assets held for|47,528|23,000|107%|Additional investment|
|trading|||||
|Derivative financial assets|677,223|455,153|49%|Revaluation ofderivatives|
|Assets held for sale|-|403,297|(100%)|Divestment transactioncompleted|
|Other current assets|533,834|765,028|(30%)|Decrease in bankacceptance bills|
|Long term receivables|134,984|192,968|(30%)|Mainly collection anddevaluation of a foreigncurrency|
||433,350|803,421|(46%)|CIP transferred to fixedassets|
|Construction in progress|||||
||5,900,418|4,036,588|46%|Mainly purchase ofintangible from SyngentaAG|
|Intangible assets|||||
||452,729|2,280,912|(80%)|Repayment of short termloans|
|Short term loans|||||
||1,045,164|789,050|32%|Revaluation ofderivatives|
|Derivative financial liabilities|||||
||140,211|226,711|(38%)|Decrease in advancesfrom customers|
|Advances from customers|||||
||2,201,178|1,422,734|55%|Mainly increase inliabilities for discounts,accrued expenses andliability in respect ofsecuritization transaction|
|Other payables|||||
|Taxes and fares payable|630,084|431,275|46%|Mainly due to increase incorporate income tax dueto increase in taxableprofit|
|Long-term loans|304,549|514,320|(41%)|Mainly due to repaymentof loans|
|Deferred tax liabilities|431,346|224,613|92%|Mainly due to utilizationof losses carry forwarddue to gain from disposalof intangible assets.|
|Provisions|102,337|163,913|(38%)|Decrease in provision inrespect of contingenciesand law suits|
|Deferred income|34,485|-|100%|Deferred income relatedto divestment transaction|
|Other comprehensive income|1,108,221|(104,080)|1165%|Mainly due to revaluationof hedge transaction andtranslation effect offoreign operations|
||16,255|9,349|74%|Additions to safetyproduction reserve|
|Special reserves (China)|||||

Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
||||||
|-|-|-|-|-|
|Retained earnings|5,671,403|3,307,924|71%|Mainly net profit|
|Profit and losses|January-September|January-September|||
||||+/- (%)|Main reason for change|
||2018|2017|||
|Taxes and surcharges|63,870|48,661|31%|Increase in revenues|
|Research and Development|262,581|196,579|34%|Increase in investmentsin R&D projects|
|expenses|||||
|Credit impairment loss|14,096|-|100%|Adoption of ASBE 22|
||(344,673)|170,228|(302%)|Mainly due to change inthe fair value ofderivatives|
|Gains (Losses) from changes|||||
|in fair value|||||
||355,813|28,088|1167%|Mainly due to realizationof derivatives|
|Investment income (loss)|||||
|Gain (Loss) from disposal of|1,996,242|55,761|3480%|Gain from disposal ofintangible assets|
|assets|||||
||30,407|22,763|34%|Increase in non-recurringincome|
|Non-operating income|||||
||787,319|259,358|204%|Mainly due to gain fromdisposal of intangibleassets and devaluationof the Brazilian Realwhich resulted in adecrease in the local taxassets|
|Income tax expenses|||||

II Progress on significant events, as well as the influence and solutions
□ Applicable√ Not applicable
III None completion of Commitments that should have been completed in the reporting period by the Company, actual controller, shareholders, related parties, acquirer, and other committed parties.
□ Applicable√ Not applicable
No such cases in the Reporting Period.
IV Performance forecast for Y2018
Warning of possible loss or considerable YoY change in the accumulative net profit made during the year-beginning to the end of the next reporting period, as well as the reasons
□ Applicable√ Not applicable
V Securities investment
□ Applicable√ Not applicable
No such cases in the Reporting Period.
VI Wealth management entrustment
□ Applicable√ Not applicable
No such cases in the Reporting Period.
VII Investment in derivative financial instruments
√ Applicable□ Not applicable
Unit:RMB’000
Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||||Percentage of||
|||||||||Amount||||||
|The party||Related|||||Investment||Amount sold||Investment|investment|Gain/loss|
||Relation|||Initial||||purchased||Impairment||||
|that||party|||Starting|Expiring|amount at||during the||amount at|amount divided|during the|
||with the||Type|investment||||during the||accrued (if||||
|operates the||transaction|||date|date|beginning of||reporting||end of the|by net asset at|reporting|
||Company|||amount||||reporting||any)||||
|investment||or not?|||||the period||period||period|end of the|period|
|||||||||period||||||
|||||||||||||period||
|Banks|No|No|Option|52,274|03/06/2018|09/03/2019|52,274|6,097,265|(2,547,865)|No|3,601,674|16.06%|(229,646)|
|Banks|No|No|Forward|15,911,923|28/05/2018|11/01/2019|15,911,923|20,962,417|(23,768,719)|No|13,105,621|58.45%|(35,845)|
|Total||||15,964,197|--|--|15,964,197|27,059,682|(26,316,584)||16,707,295|74.51%|(265,491)|
|Source of fund for the investment||||Internal||||||||||
|litigation-related situations (if applicable)||||N/A||||||||||
|Date of disclosure of Board approval (if any)||||December 30, 2017||||||||||
|Date of disclosure of Shareholders’ approval (if||||||||||||||
|||||N/A||||||||||
|any)||||||||||||||
|||||The aforesaid refers to short term hedging currency transactions made with banks.||||||||||
|||||The Group’s transactions are not traded in the market. The transactions are between the applicable company in the Group and the applicable||||||||||
|||||bank until the expiration date of the transaction, therefore no market risk is involved.||||||||||
|||||Regarding credit and liquidity risk, the Group is working with large and substantial banks only and with some of them the Group has ISDA||||||||||
|||||agreements.||||||||||
|||||As to operational risk, the Group is working with approved software for all transactions.||||||||||
|||||No legal risk is involved.||||||||||
|Risk and control analysis for the reporting||||The controls taken in order to further reduce said risks are:||||||||||
|period (including but not limited to market risk,|||| The relevant subsidiaries have specific guidelines, under the Group’s policy, which were approved by the subsidiaries' Financial||||||||||
|liquidity risk, credit risk, operational risk, legal||||Statements Committee of the Board, which specifies, inter alia, the hedging policy, the persons that have the authorization to||||||||||
|risk, etc.)||||deal with hedging, the tools, ranges etc. The only subsidiary that has hedging positions in the Group in the period was Adama||||||||||
|||||Solutions and its subsidiaries.||||||||||
||||| The relevant subsidiaries apply local SOX audits that audit the working process and the controls of the hedging transactions,||||||||||
|||||in addition to the quarterly audit.||||||||||
||||| The controllers of the relevant subsidiaries are involved and monitor the hedging accounting treatment.||||||||||
|||||Every 2-3 years the internal audit of the relevant subsidiaries department is auditing the entire procedure.||||||||||
|Market price or fair value change of investments||||The aforesaid refers to short term hedging currency transactions made by the relevant subsidiary with banks.||||||||||
|during the reporting period.||||Segregation of duties as follows:||||||||||
|Specific methodology and assumptions should||||For the fair value evaluation, the relevant subsidiary is using external experts. The relevant subsidiary hedges currencies only; the relevant||||||||||
|be disclosed in the analysis of fair value of the||||transactions are simple (options and forwards) for up to 1.5 years. Therefore, the valuation is straightforward, and the exchange rates are||||||||||
|investments||||provided by the accounting department of the relevant subsidiary and all other parameters are provided by the external experts.||||||||||
|Explanation for any significant changes in||||||||||||||
|accounting policies and principles, compared||||N/A||||||||||
|with last reporting period||||||||||||||
|||||The derivative investments carried by the Company are for hedging and avoiding the risk of market fluctuations. The investments respond to||||||||||
|Independent Directors’ opinion on the||||||||||||||
|||||the Company’s routine business demands and are in accordance with the relevant laws and regulations. Additionally, the Company has||||||||||
|investment in derivative financial instruments||||||||||||||
|||||adopted Currency Risk Hedging Policy to strengthen the risk management and control which benefit the Company’s ability to protect against||||||||||
|and related risk controls||||||||||||||
|||||market risk. The derivative investments do not harm the interests of the Company and its shareholders.||||||||||

VIII Visits paid to the Company for purposes of research, communication, interview, etc. during the Reporting Period
√ Applicable□ Not applicable
|||||
|-|-|-|-|
|Date of visit|Way of visit|Type of visitor|About|
||||Introduced the Company's overall|
|July 10, 2018|Call (One to Many)|Institutional Investors||
||||situation and business development.|
||||Introduced the Company's overall|
|July 11, 2018|On Site Research|Institutional Investors||
||||situation and business development.|
||||Introduced the global overall situation|
||Public Day of Capital||of Agrochemical industry, and the|
|July 17, 2018||Institutional Investors||
||Market||business of each function of the|
||||Company.|
||||Introduced the global overall situation|
||Public Day of Capital||of Agrochemical industry, and the|
|July 19, 2018||Institutional Investors||
||Market||business of each function of the|
||||Company.|
||||Communication on the Q2 and the|
|August 27, 2018|Call (One to Many)|Institutional Investors|first half year performances of the|
||||Company.|

Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018
|||||
|-|-|-|-|
|Date of visit|Way of visit|Type of visitor|About|
||||Communication on the Q2 and the|
|August 28, 2018|Roadshow (One to Many)|Institutional Investors|first half year performances of the|
||||Company.|
||||Communication on the Q2 and the|
|August 29, 2018|Roadshow (One to Many)|Institutional Investors|first half year performances of the|
||||Company.|
||||Communication on the Q2 and the|
|August 30, 2018|Roadshow (One to Many)|Institutional Investors|first half year performances of the|
||||Company.|
||||Introduced the Company's overall|
||||situation, business development, and|
|September 4, 2018|Brokers’ Strategy Meeting|Institutional Investors||
||||the Q2 and the first half year|
||||performances of the Company.|
||||Communication on the Q2 and the|
|September 6, 2018|Brokers’ Strategy Meeting|Institutional Investors|first half year performances of the|
||||Company.|

IX Illegal provision of guarantees for external parties
□ Applicable√ Not applicable
No such cases in the Reporting Period.
X Utilization of theCompany’s capital by the controlling shareholder or its related parties for non-operating purposes
□ Applicable√ Not applicable
No such cases in the Reporting Period.
Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018 Section IV Financial Statements
I Financial statements
1. Consolidated balance sheet
Prepared by Hubei Sanonda Co., Ltd.
30 September 2018
Unit:RMB’000
|||||
|-|-|-|-|
||September 30,|January 1,|December 31,|
|Item||||
||2018|2018|2017|
|Current assets:||||
|Cash at bank and on hand|6,415,839|7,868,858|7,868,858|
|Financial assets held for trading|47,528|23,000|23,000|
|Derivative financial assets|677,223|455,153|455,153|
|Notes and accounts receivable|6,455,077|5,115,838|5,236,880|
|Including: Notes receivable|38,572|29,927|180,030|
|Accounts receivable|6,416,505|5,085,911|5,056,850|
|Prepayments|219,279|202,111|202,111|
|Other receivables|929,709|1,029,557|1,037,836|
|Inventories|8,918,250|7,488,238|7,488,238|
|Assets held for sale|-|403,297|403,297|
|Non-current assets due within one year|48|46|46|
|Other current assets|533,834|765,028|614,925|
|Total current assets|24,196,787|23,351,126|23,330,344|
|Non-current assets:||||
|Available for sale financial assets|N/A|N/A|19,544|
|Long-term accounts receivable|134,984|192,968|192,968|
|Long-term equity investments|125,573|102,383|102,383|
|Other equity investments|91,572|91,090|N/A|
|Investment property|4,173|4,408|4,408|
|Fixed assets|6,803,806|6,141,490|6,141,490|
|Construction in progress|433,350|803,421|803,421|
|Intangible assets|5,900,418|4,036,588|4,036,588|
|Goodwill|4,095,490|3,890,097|3,890,097|
|Deferred tax assets|672,921|870,518|891,012|
|Other non-current assets|169,146|201,667|201,667|
|Total non-current assets|18,431,433|16,334,630|16,283,578|
|Total assets|42,628,220|39,685,756|39,613,922|

Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018 Unit:RMB’000
|||||
|-|-|-|-|
||September 30,|January 1,|December 31,|
|Item||||
||2018|2018|2017|
|Current liabilities:||||
|Short-term loans|452,729|2,280,912|2,280,912|
|Derivative financial liabilities|1,045,164|789,050|789,050|
|Notes and accounts payable|4,194,748|4,218,038|4,218,038|
|Advances from customers|140,211|226,711|226,711|
|Employee benefits payable|865,466|995,637|995,637|
|Taxes payable|630,084|431,275|431,275|
|Other payables|2,201,178|1,422,734|1,422,734|
|Non-current liabilities due within one year|483,646|448,504|448,504|
|Other current liabilities|561,007|482,583|482,583|
|Total current liabilities|10,574,233|11,295,444|11,295,444|
|Non-current liabilities:||||
|Long-term loans|304,549|514,320|514,320|
|Debentures payable|7,914,671|7,777,410|7,777,410|
|Long-term accounts payable|24,297|24,203|24,203|
|Long-term employee benefits payables|636,748|610,714|610,714|
|Provisions|102,337|163,913|163,913|
|Deferred income|34,485|-|-|
|Deferred tax liabilities|431,346|224,613|224,613|
|Other non-current liabilities|182,392|225,292|225,292|
|Total non-current liabilities|9,630,825|9,540,465|9,540,465|
|Total liabilities|20,205,058|20,835,909|20,835,909|
|Owners’ equity:||||
|Share capital|2,446,554|2,446,554|2,446,554|
|Capital reserves|12,972,906|12,982,277|12,982,277|
|Other comprehensive income|1,108,221|(104,080)|(154,701)|
|Special reserves|16,255|9,349|9,349|
|Surplus reserves|207,823|207,823|207,823|
|Retained earnings|5,671,403|3,307,924|3,286,711|
|Total owners’ equity|22,423,162|18,849,847|18,778,013|
|Total liabilities and owners’ equity|42,628,220|39,685,756|39,613,922|

 Legal representative: Chen Lichtenstein;
Chief of the accounting work: Aviram Lahav;
Chief of the accounting organ: Aviram Lahav.
Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018 2. Balance sheet of the Company
Unit:RMB’000
|||||
|-|-|-|-|
||September 30,|January 1,|December 31,|
|Item||||
||2018|2018|2017|
|Current Assets:||01.01.2018|31.12.17|
|Cash at bank and on hand|1,978,000|1,868,603|1,868,603|
|Notes and accounts receivable|846,085|850,034|1,001,641|
|Including: Notes receivable|-|-|146,525|
|Accounts receivable|846,085|850,034|855,116|
|Prepayments|45,492|24,019|24,019|
|Other receivables|3,546|1,140|1,140|
|Inventories|147,933|177,402|177,402|
|Other current assets|23,651|147,931|1,406|
|Total current assets|3,044,707|3,069,129|3,074,211|
|Non-current assets:||||
|Available for sale financial assets|N/A|N/A|8,573|
|Long-term equity investments|15,939,826|15,939,826|15,939,826|
|Other equity investments|80,119|80,119|N/A|
|Investment property|4,173|4,408|4,408|
|Fixed assets|1,167,567|1,262,330|1,262,330|
|Construction in progress|163,094|81,993|81,993|
|Intangible assets|205,108|183,920|183,920|
|Deferred tax assets|19,452|26,892|35,064|
|Other non-current assets|11,000|11,000|11,000|
|Total non-current assets|17,590,339|17,590,488|17,527,114|
|Total assets|20,635,046|20,659,617|20,601,325|
|Current liabilities:||||
|Short-term loans|20,000|70,000|70,000|
|Notes and accounts payable|363,444|257,615|257,615|
|Advances from customers|16,195|63,904|63,904|
|Employee benefits payable|33,298|30,491|30,491|
|Taxes payable|85,677|19,301|19,301|
|Other payables|137,800|482,858|482,858|
|Non-current liabilities due within one year|152,000|126,590|126,590|
|Total current liabilities|808,414|1,050,759|1,050,759|
|Non-current liabilities:||||
|Long-term loans|-|72,000|72,000|
|Long-term employee benefits payables|89,869|93,025|93,025|
|Provisions|16,258|15,671|15,671|
|Other non-current liabilities|171,770|171,770|171,770|
|Total non-current liabilities|277,897|352,466|352,466|
|Total liabilities|1,086,311|1,403,225|1,403,225|
|Owners’ equity:||||
|Share capital|2,446,554|2,446,554|2,446,554|
|Capital reserves|15,413,663|15,423,034|15,423,034|
|Other comprehensive income|50,162|50,621|-|
|Special reserves|14,993|10,040|10,040|
|Surplus reserves|207,823|207,823|207,823|
|Retained earnings|1,415,540|1,118,320|1,110,649|
|Total owners’ equity|19,548,735|19,256,392|19,198,100|
|Total liabilities and owners’ equity|20,635,046|20,659,617|20,601,325|

Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018 3. Consolidated income statement for the Reporting Period
Unit:RMB’000
||||
|-|-|-|
||July-September|July-September|
|Item|||
||2018|2017|
|1. Total operating Income|5,928,627|5,624,175|
|Including: Operating income|5,928,627|5,624,175|
|2. Total operating cost|5,791,546|4,936,710|
|Including: Cost of sales|4,019,117|3,627,507|
|Taxes and surcharges|12,297|16,148|
|Selling and Distribution expenses|1,127,606|1,011,162|
|General and Administrative expenses|188,175|269,140|
|Research and Development expenses|106,304|64,745|
|Financial expenses:|310,703|(67,847)|
|Including: Interest expense|146,541|158,312|
|Interest income|18,184|38,127|
|Asset impairment loss|19,345|15,855|
|Credit impairment loss|7,999|N/A|
|Add: Other income|-|-|
|Investment income (loss), net|208,759|(241,361)|
|Including: Income (loss) from investment in associates|||
|and joint ventures|992|2,820|
|Gain (loss) from changes in fair value|(101,297)|(52,048)|
|Gain (loss) from disposal of assets|(929)|(1,996)|
|3. Operating profit|243,614|392,060|
|Add: Non-operating income|1,404|12,414|
|Less: Non-operating expense|5,302|4,853|
|4. Total profit|239,716|399,621|
|Less: income tax expenses|60,055|117,101|
|5. Net profit|179,661|282,520|
|5.1 Classified by nature of operations|||
|5.1.1 Continuing operations|179,661|282,520|
|5.1.2 Discontinued operations|-|-|
|5.2 Classified by ownership|||
|5.2.1 Shareholders of the Company|179,661|282,520|
|5.2.2 Non-controlling interests|-|-|
|6. Other comprehensive income net of tax|706,883|(393,748)|
|Other comprehensive income net of tax attributable to shareholders|||
|of the Company|706,883|(393,748)|
|6.1 Items that will not be reclassified into profit/loss|(1,346)|(4,207)|
|6.1.1 Re-measurement of defined benefit plan liability|(1,346)|(4,207)|
|6.2 Items that were or will be reclassified to profit or loss|708,229|(389,541)|
|6.2.1 Effective portion of gains or loss of cash flow hedge|7,609|(96,034)|
|6.2.2 Translation differences of foreign financial statements|700,620|(293,507)|
|7. Total comprehensive income for the period|886,544|(111,228)|
|7.1 Attributable to shareholders of the Company|886,544|(111,228)|
|8. Earnings per share|||
|8.1 Basic earnings per share (RMB/ share)|0.0734|0.1206|
|8.2 Diluted earnings per share (RMB/ share)|N/A|N/A|

 Legal representative: Chen Lichtenstein;
Chief of the accounting work: Aviram Lahav;
Chief of the accounting organ: Aviram Lahav.
Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018 4. Income statement of the Company for the Reporting Period
Unit:RMB’000
||||
|-|-|-|
||July-September|July-September|
|Item|||
||2018|2017|
|1. Operating income|760,590|688,042|
|Less: Operating costs|468,749|509,865|
|Taxes and surcharges|2,323|7,969|
|Selling and Distribution expenses|30,248|22,085|
|General and Administrative expenses|43,487|26,300|
|Research and Development expenses|23,433|1,003|
|Financial expenses|(23,294)|10,154|
|Including: Interest expense|2,032|4,049|
|Interest income|6,061|143|
|Asset Impairment loss|401|(987)|
|Credit impairment loss|1,781|N/A|
|Add: Other income|-|-|
|Investment income (loss), net|-|548|
|Gain (loss) from disposal of assets|-|410|
|2. Operating profit|213,462|112,611|
|Add: Non-operating income|-|815|
|Less: Non-operating expenses|844|1,619|
|3. Total profit|212,618|111,807|
|Less: Income tax expense|43,648|27,921|
|4. Net profit|168,970|83,886|
|4.1 Net profit from continuing operations|168,970|83,886|
|4.2 Net profit from discontinued operations|-|-|
|5. Other comprehensive income net of tax|(68)|-|
|5.1 Items that will not be reclassified into profit/loss|(68)|-|
|5.1.1 Re-measurement of defined benefit plan liability|(68)||
|5.2 Items that were or will be reclassified to profit or loss|-|-|
|6. Total comprehensive income|168,902|83,886|

Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018 5. Consolidated income statement for the period from the year-beginning to the end of the Reporting Period Unit:RMB’000
||||
|-|-|-|
||January-September|January-September|
|Item|||
||2018|2017|
|1. Total operating Income|18,954,885|18,394,239|
|Including: Operating income|18,954,885|18,394,239|
|2. Total operating cost|17,649,498|16,799,093|
|Including: Cost of sales|12,590,534|11,807,201|
|Taxes and surcharges|63,870|48,661|
|Selling and Distribution expenses|3,351,540|3,134,052|
|General and Administrative expenses|669,029|705,420|
|Research and Development expenses|262,581|196,579|
|Financial expenses:|640,721|844,069|
|Including: Interest expense|412,488|487,987|
|Interest income|59,403|167,714|
|Asset impairment loss|57,127|63,111|
|Credit impairment loss|14,096|N/A|
|Add: Other income|||
|Investment income (loss), net|355,813|28,088|
|Including: Income (loss) from investment in|||
|associates and joint ventures|13,750|4,906|
|Gain (loss) from changes in fair value|(344,673)|170,228|
|Gain (loss) from disposal of assets|1,996,242|55,761|
|3. Operating profit|3,312,769|1,849,223|
|Add: Non-operating income|30,407|22,763|
|Less: Non-operating expense|13,415|13,114|
|4. Total profit|3,329,761|1,858,872|
|Less: income tax expenses|787,319|259,358|
|5. Net profit|2,542,442|1,599,514|
|5.1 Classified by nature of operations|||
|5.1.1 Continuing operations|2,542,442|1,599,514|
|5.1.2 Discontinued operations|-|-|
|5.2 Classified by ownership|||
|5.2.1 Shareholders of the Company|2,542,442|1,599,514|
|5.2.2 Non-controlling interests|-|-|
|6. Other comprehensive income net of tax|1,212,301|(979,765)|
|Other comprehensive income net of tax attributable to shareholders|||
|of the Company|1,212,301|(979,765)|
|6.1 Items that will not be reclassified into profit/loss|9,760|(10,663)|
|6.1.1 Re-measurement of defined benefit plan liability|9,760|(10,663)|
|6.2 Items that were or will be reclassified to profit or loss|1,202,541|(969,102)|
|6.2.1 Effective portion of gains or loss of cash flow hedge|301,082|(449,236)|
|6.2.2 Translation differences of foreign financial statements|901,459|(519,866)|
|7. Total comprehensive income for the period|3,754,743|619,749|
|Attributable to shareholders of the Company|3,754,743|619,749|
|8. Earnings per share|||
|8.1 Basic earnings per share (RMB/ share)|1.0392|0.6830|
|8.2 Diluted earnings per share (RMB/ share)|N/A|N/A|

Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018 6. Income statement of the Company for the period from the year-beginning to the end of the Reporting
Period
Unit:RMB’000
||||
|-|-|-|
||January-September|January-September|
|Item|||
||2018|2017|
|1. Operating income|2,427,162|2,130,107|
|Less: Cost of sale|1,638,505|1,626,813|
|Taxes and surcharges|23,534|16,535|
|Selling and Distribution expenses|99,782|68,335|
|General and Administrative expenses|129,163|76,565|
|Research and Development expenses|25,863|5,208|
|Financial expenses:|(43,731)|22,346|
|Including: Interest expense|6,950|12,327|
|Interest income|19,096|687|
|Asset Impairment loss|1,306|7,065|
|Credit impairment loss|4,854|N/A|
|Add: Other income|-|-|
|Investment income (loss), net|-|548|
|Gain (loss) from changes in fair value|-|(206)|
|Gain (loss) from disposal of assets|-|-|
|2. Operating profit|547,886|307,582|
|Add: Non-operating income|428|4,087|
|Less: Non-operating expense|420|2,286|
|3. Total profit|547,894|309,383|
|Less: Income tax expense|96,542|77,684|
|4. Net profit|451,352|231,699|
|4.1 Net profit from continuing operations|451,352|231,699|
|4.2 Net profit from discontinued operations|-|-|
|5. Other comprehensive income net of tax|(459)|-|
|5.1 Items that will not be reclassified into profit/loss|(459)|-|
|5.1.1 Re-measurement of defined benefit plan liability|(459)||
|5.2 Items that were or will be reclassified to profit or loss|-|-|
|6. Total comprehensive income|450,893|231,699|

Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018 7. Consolidated cash flow statement for the period from the year-beginning to the end of the Reporting
Period
Unit:RMB’000
||||
|-|-|-|
||January-September|January-September|
|Item|||
||2018|2017|
|1. Cash flows from operating activities:|||
|Cash received from sale of goods and rendering of services|17,806,561|17,306,144|
|Refund of taxes and surcharges|33,600|35,662|
|Cash received relating to other operating activities|556,751|838,300|
|Sub-total of cash inflows from operating activities|18,396,912|18,180,106|
|Cash paid for goods and services|12,154,122|10,884,588|
|Cash paid to and on behalf of employees|2,387,942|2,318,685|
|Payments of taxes and surcharges|356,287|293,826|
|Cash paid relating to other operating activities|2,044,004|2,161,467|
|Sub-total of cash outflows from operating activities|16,942,355|15,658,566|
|Net cash flows from operating activities|1,454,557|2,521,540|
|2. Cash flows from investing activities:|||
|Cash received from disposal of investments|9,792|20,544|
|Net cash received from disposal of fixed assets, intangible assets and|||
|other long-term assets|2,413,446|95,750|
|Net cash received from disposal of subsidiaries or other business units|-|100,139|
|Cash received from other investing activities|57|29,253|
|Sub-total of cash inflows from investing activities|2,423,295|245,686|
|Cash paid to acquire fixed assets, intangible assets and other|||
|long-term assets|2,966,066|1,061,206|
|Cash paid for acquisition of investments|6,566|-|
|Net cash received from acquisition of subsidiaries and other|||
|operating units|13,213|-|
|Cash paid for other investing activities|14|31,958|
|Sub-total of cash outflows from investing activities|2,985,859|1,093,164|
|Net cash flows from investing activities|(562,564)|(847,478)|
|3. Cash flows from financing activities:|||
|Cash received from borrowings|84,953|181,108|
|Cash received relating to other financing activities|-|7,800|
|Sub-total of cash inflows from financing activities|84,953|188,908|
|Cash repayment of borrowings|2,116,235|675,900|
|Cash payment for dividends, profit distributions or interest|464,425|384,802|
|Including: dividends or profit paid by subsidiaries to|||
|minority interests|24,830|32,556|
|Cash paid relating to other financing activities|61,526|110,820|
|Sub-total of cash outflows from financing activities|2,642,186|1,171,522|
|Net cash flows from financing activities|(2,557,233)|(982,614)|
|4. Effect of foreign exchange rate changes on cash and cash|||
|equivalents|172,121|(188,686)|
|5. Net increase (decrease) in cash and cash equivalents|(1,493,119)|502,762|
|Add: Cash and cash equivalents at the beginning of the period|7,864,258|3,833,747|
|6. Cash and cash equivalents at the end of the period|6,371,139|4,336,509|

Hubei Sanonda Co., Ltd. Full Content of the Third Quarter Report 2018 8. Cash flow statement of the Company for the period from the year-beginning to the end of the Reporting Period
Unit:RMB’000
||||
|-|-|-|
||January-September|January-September|
|Item|||
||2018|2017|
|1. Cash flows from operating activities:|||
|Cash received from sale of goods and rendering of services|2,006,704|984,714|
|Refund of taxes and surcharges|12,981|2,884|
|Cash received relating to other operating activities|24,141|4,649|
|Sub-total of cash inflows from operating activities|2,043,826|992,247|
|Cash paid for goods and services|844,221|643,788|
|Cash paid to and on behalf of employees|134,483|135,282|
|Payments of taxes and surcharges|75,128|85,185|
|Cash paid relating to other operating activities|126,968|108,998|
|Sub-total of cash outflows from operating activities|1,180,800|973,253|
|Net cash flows from operating activities|863,026|18,994|
|2. Cash flows from investing activities:|||
|Net cash received from disposal of fixed assets, intangible assets and|||
|other long-term assets|-|701|
|Sub-total of cash inflows from investing activities|-|701|
|Cash paid to acquire fixed assets, intangible assets and other|||
|long-term assets|72,571|83,573|
|Sub-total of cash outflows from investing activities|72,571|83,573|
|Net cash flows from investing activities|(72,571)|(82,872)|
|3. Cash flows from financing activities:|||
|Cash received from borrowings|20,000|75,000|
|Cash received relating to other financing activities|-|7,800|
|Sub-total of cash inflows from financing activities|20,000|82,800|
|Cash repayment of borrowings|116,590|52,500|
|Cash payment for dividends, profit distributions or interest|161,188|12,530|
|Cash paid relating to other financing activities|454,551|110,820|
|Sub-total of cash outflows from financing activities|732,329|175,850|
|Net cash flows from financing activities|(712,329)|(93,050)|
|4. Effect of foreign exchange rate changes on cash and cash|||
|equivalents|(8,829)|44|
|5. Net increase (decrease) in cash and cash equivalents|69,297|(156,884)|
|Add: cash and cash equivalents at the beginning of the period|1,864,003|249,741|
|6. Cash and cash equivalents at the end of the period|1,933,300|92,857|

 IIAuditor’s report
Is this Report audited?
□ Yes√ No
This Report is unaudited.
Hubei Sanonda Co., Ltd. 30 October 2018