2016 Semi-annual Report of Hubei Sanonda Co., Ltd. HUBEI SANONDA CO., LTD.
2016 SEMI-ANNUAL REPORT
August 2016
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. Section I. Important Reminders, Contents& Explanation
The Board of Directors, the Supervisory Committee as well as all directors, supervisors and senior management staff of Hubei Sanonda Co., Ltd. (hereinafter referred to as “the Company”) warrant that this report is factual, accurate and complete without any false record, misleading statement or material omission. And they shall be jointly and severally liable for that.
All directors attended the board session for reviewing this report.
The Company plans not to distribute cash dividends or bonus shares or turn capital reserve into share capital.
An Liru, company principal, Liu Anping, chief of the accounting work, and Tu Zhiwen, chief of the accounting organ (chief of accounting), hereby confirm that the Financial Report enclosed in this report is factual, accurate and complete. This Report is prepared in both Chinese and English. Should there be any discrepancy between the two versions, the Chinese version shall prevail.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. Contents
Section I. Important Reminders, Contents& Explanation ............................................................ 2 Section II. Company Profile .............................................................................................................. 5 Section III. Highlights of Accounting Data& Financial Indicators .............................................. 7 Section IV. Report of the Board of Directors ................................................................................... 9 Section V. Significant Events ........................................................................................................... 18 Section VI. Change in Shares& Shareholders .............................................................................. 30 Section VII. Preferrence Shares ...................................................................................................... 34 Section VIII. Directors, Supervisors& Senior Management Staff .............................................. 35 Section IX. Financial Report ........................................................................................................... 36 Section X. Documents Available for Reference ........................................................................... 150
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. Explanation
||||
|-|-|-|
||Refers||
|Term||Contents|
||to||
|Company/the Company|Refers|Hubei Sanonda Co., Ltd.|
||to||
||Refers||
|CSRC Hubei||The Hubei bureau of China Securities Regulatory Commission|
||to||
||Refers||
|CSRC||China Securities Regulatory Commission|
||to||
||Refers||
|SSE||Shenzhen Stock Exchange|
||to||
||Refers||
|Reporting Period/the Reporting Period||1 Jan. 2016-30 Jun. 2016|
||to||
||Refers|China National Agrochemical Corporation (holding 100% equity of|
|CNAC|||
||to|Sanonda Group, the Company’s controlling shareholder)|
||Refers|ADAMA Celsius B.V., a company incorporated in the Netherlands|
|Celsius|to|according to its law, once called Celsius Property B.V., holding a stake of|
|||10.6% in the Company|
||Refers|ADAMA Agricultural Solutions LTD., a subsidiary indirectly controlled|
||to|by CNAC, once called Makhteshim-Agan Industries Ltd., a company|
|ADAMA|||
|||incorporated in Israel according to its law, indirectly holding the 100%|
|||equity of Celsius|
||Refers|Jingzhou Sanonda Holdings Co., Ltd., once called Sanonda Group Co.,|
|Sanonda Holdings|||
||to|Ltd., the controlling shareholder of the Company|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd. Section II. Company Profile
I. Basic information of the Company
|||||
|-|-|-|-|
|Stock abbreviation|Sanonda A (Sanonda B)|Stock code|000553 (200553)|
|Stock exchange listed with|Shenzhen Stock Exchange|||
|Chinese name of the Company|湖北沙隆达股份有限公司|||
|Abbr. of the Chinese name of||||
||沙隆达|||
|the Company (if any)||||
|English name of the Company||||
||HUBEI SANONDA CO., LTD.|||
|(if any)||||
|Abbr. of the English name of||||
||SANONDA|||
|the Company (if any)||||
|Legal representative of the|An Liru|||
|Company||||

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

III. Other information
1. Ways to contact the Company
Did any change occur to the registered address, office address and their postal codes, website address and email address of the Company during the Reporting Period?
□ Applicable√ Not applicable
The registered address, office address and their postal codes, website address and email address of the Company did not change during the Reporting Period. The said information can be found in the 2015 Annual Report.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 2. About information disclosure and where this report is placed
Did any change occur to information disclosure media and where this report is placed during the Reporting Period?
□ Applicable√ Not applicable
The newspapers designated by the Company for information disclosure, the website designated by CSRC for disclosing this report and the location where this report is placed did not change during the Reporting Period. The said information can be found in the 2015 Annual Report.
3. Change of the registered information
Did any change occur to the registered information during the Reporting Period?
√ Applicable□ Not applicable
|||||||
|-|-|-|-|-|-|
||||Registration|||
|||||Tax registration||
||Registration date|Registration place|number of the||Organization code|
|||||number||
||||business license|||
|||Hubei||||
|||Administration for||||
|Registered at the period-begin|3 Aug. 2015||420000400004491|421001706962287|70696228-7|
|||Industry &||||
|||Commerce||||
|||Hubei||||
|||Administration for|914200007069622|914200007069622|914200007069622|
|Registered at the period-end|29 Mar. 2016|||||
|||Industry &|87Q|87Q|87Q|
|||Commerce||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd. Section III. Highlights of Accounting Data& Financial Indicators I. Major accounting data and financial indicators
Does the Company adjust retrospectively or restate accounting data of previous years due to change of the accounting policy or correction of any accounting error?
□ Yes√ No
|||||
|-|-|-|-|
||Reporting Period|Same period of last year|YoY +/- (%)|
|Operating revenues (RMB)|1,005,697,157.50|1,235,251,682.81|-18.58%|
|Net profit attributable to shareholders of|16,807,555.50|117,678,175.59||
||||-85.72%|
|the Company (RMB)||||
|Net profit attributable to shareholders of||||
||6,397,955.00|115,491,779.81|-94.46%|
|the Company after excluding extraordinary||||
|gains and losses (RMB)||||
|Net cash flows from operating activities|46,718,918.62|-19,276,749.38||
||||342.36%|
|(RMB)||||
|Basic EPS (RMB/share)|0.0283|0.1981|-85.71%|
|Diluted EPS (RMB/share)|0.0283|0.1981|-85.71%|
|Weighted average ROE (%)|0.80%|5.74%|-4.94%|
||As at the end of the|||
|||As at the end of last year|YoY +/- (%)|
||Reporting Period|||
|Total assets (RMB)|3,043,794,012.40|2,977,268,169.32|2.23%|
|Net assets attributable to shareholders of|2,102,588,613.57|2,097,382,469.60||
||||0.25%|
|the Company (RMB)||||

II. Differences between accounting data under domestic and overseas accounting standards 1. Differences of net profit and net assets disclosed in financial reports prepared under international and Chinese accounting standards
□ Applicable√ Not applicable
No difference.
2. Differences of net profit and net assets disclosed in financial reports prepared under overseas and Chinese accounting standards
□ Applicable√ Not applicable
No difference.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. III. Items and amounts of extraordinary gains and losses
√ Applicable□ Not applicable
Unit: RMB
||||
|-|-|-|
|Item|Amount|Explanation|
|Gains/losses on the disposal of non-current assets (including the|10,210,811.11||
|offset part of asset impairment provisions)|||
|Government grants recognized in the current period, except for|2,756,200.44||
|those acquired in the ordinary course of business or granted at|||
|certain quotas or amounts according to the country’s unified|||
|standards|||
|Other non-operating income and expenses other than the above|912,455.78||
|Less: Income tax effects|3,469,866.83||
|Total|10,409,600.50|--|

Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to 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√ Not applicable
No such cases.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. Section IV. Report of the Board of Directors
I. Overview
In the first half of 2016, the pesticide market was still weak with severe overcapacity and cut-throat competition. Demand for the major products of the Company was sluggish and the selling prices maintained at a low level, which greatly affected the production and operation of the Company.
During the Reporting Period, the Company tightly embraced the center of “saving and potential tapping, cost decreasing and benefit increasing” to develop work, made great efforts to internal work practice, controlled the cost by all manner of means, reduced the expenses and optimized the operation. Solidified the progress, improve the mechanism, strengthened the assessment, consolidated the basis, deeply developed the energy saving and resources reducing as well as the benchmarking, extruded the improvement of the special projects and promoted the comprehensive level of the enterprise management. And the Company developed the energy saving and cost reducing, quality increasing and efficiency enhancing on the aspects such as the safety production, marketing sales, material logistics, scientific research and technical renovation, funds management and control as well as the human resources. , saving by every bit and reduced the cost with efficiency increased, which all of the above steps made the overall production and operation met with the anticipation basically.
For the Reporting Period, the Company achieved operating revenues of RMB1.006 billion, decreasing18.58% over the same period of last year; total profit of RMB23.11 million, representing a drop of85.61% from a year earlier. The main reasons: during the Reporting Period, the pesticide market was still weak, demand for the major products of the Company was sluggish and the selling prices maintained at a low level, resulting in a considerable fall in the gross profit margin, as well as a decrease in the sales revenue, on a year-on-year basis.
II. Main business analysis
YoY change of major financial data:
Unit: RMB
||||||
|-|-|-|-|-|
||Reporting Period|Same period of last year|YoY +/-%|Main reasons for change|
|Operating revenues|1,005,697,157.50|1,235,251,682.81|-18.58%||
|Operating costs|859,188,101.99|941,767,629.71|-8.77%||
|Selling expenses|45,242,941.76|36,541,875.51|23.81%||
||69,143,939.29|48,923,908.29||Mainly due to the YoY|
|||||increase of the factory|
|Administrative expenses|||41.33%||
|||||shutdown losses of the|
|||||Reporting Period.|
||3,943,997.08|13,893,016.49||Mainly due to the YoY|
|||||increase of the exchange|
|Financial expenses|||-71.61%||
|||||revenues of the|
|||||Reporting Period.|
|Income tax expenses|6,298,975.02|42,899,361.41|-85.32%|Mainly due to the YoY|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
|||||decrease of the total|
|||||profits of the Reporting|
|||||Period.|
|R&D input|1,497,874.56|1,349,295.92|11.01%||
||46,718,918.62|-19,276,749.38||Mainly due to the YoY|
|||||decrease of the cash of|
|Net cash flows from||||the taxes payment and|
||||342.36%||
|operating activities||||that paid for the|
|||||merchandises purchase|
|||||of the Reporting Period.|
||-35,779,852.86|-152,808,985.39||Mainly due to the YoY|
|Net cash flows from||||decrease of the projects|
||||76.59%||
|investing activities||||investment of the|
|||||Reporting Period.|
||19,473,916.83|181,047,673.31||Mainly due to the YoY|
|Net cash flows from||||decrease of the|
||||-89.24%||
|financing activities||||borrowings of the|
|||||Reporting Period.|
||31,952,006.72|8,999,355.64||Mainly due to the YoY|
|Net increase in cash and||||increase of the net|
||||255.05%||
|cash equivalents||||operating activities of the|
|||||Reporting Period.|
|||||Mainly due to the|
|||||decrease of the|
|||||withdrawn urban|
|Business tax and||||construction taxes and|
||3,853,275.19|8,887,120.84|-56.64%||
|surcharges||||the surcharges owning to|
|||||the YoY decline of the|
|||||revenues of the|
|||||Reporting Period.|
|||||Mainly due to the YoY|
|||||decrease of the inventory|
|Asset impairment loss|15,173,343.00|27,616,991.95|-45.06%||
|||||falling price reserves of|
|||||the Reporting Period.|
|||||Mainly due to the YoY|
|||||increase of the disposed|
|Non-operating income|13,882,859.98|2,937,379.44|372.63%|intangible assets|
|||||revenues of the|
|||||Reporting Period.|
|||||Mainly due to the YoY|
|Net profits attributed to|||||
||16,807,555.50|117,678,175.59|-85.72%|decrease of the sales|
|the owners’ of the|||||
|||||revenues and the gross|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
|Company||||margin of the Reporting|
|||||Period.|
|||||Mainly due to the|
|||||increase of the goods|
|Notes receivable|14,785,699.71|34,433,010.97|-57.06%||
|||||payment by the notes of|
|||||the Reporting Period.|
|||||Mainly due to the|
|||||decrease of the sales|
|Accounts receivable|400,197,459.56|180,450,531.93|121.78%||
|||||outstanding of the|
|||||Reporting Period.|
|||||Mainly due to the|
|||||increase of the accounts|
|Prepayments|28,224,389.49|20,413,365.68|38.26%||
|||||of the raw materials paid|
|||||in advance.|
|||||Mainly due to the|
|Other accounts||||increase of the land|
||14,228,948.02|9,847,451.35|44.49%||
|receivable||||amount receivable of the|
|||||Reporting Period.|
|||||Mainly due to the|
|||||decrease of the|
|Inventories|190,399,721.64|287,824,164.30|-33.85%||
|||||merchandise inventory of|
|||||the Reporting Period.|
|||||Mainly due to the|
|||||payment of the|
|Short-term loans|0.00|20,000,000.00|-100.00%||
|||||borrowings of the|
|||||Reporting Period.|
|||||Mainly due to the newly|
|||||increase of the managed|
|Notes payable|30,000,000.00|0.00|||
|||||bank acceptance of the|
|||||Reporting Period.|
|||||Mainly due to the|
|||||decrease of the|
|||||customers’ goods|
|Deposit received|8,077,224.97|26,666,138.22|-69.71%||
|||||payment received in|
|||||advance of the Reporting|
|||||Period.|
|||||Mainly due to the|
|||||payment of the pending|
|Payroll payment|14,552,544.21|30,308,341.73|-51.99%|payments of the last|
|||||period of the Reporting|
|||||Period.|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
|||||Mainly due to the|
|||||payment of part of the|
|Interests payable|753,198.89|1,123,849.31|-32.98%|long-term loans interests|
|||||from the bank of the|
|||||Reporting Period.|
|||||Mainly due to the|
|Long-term accounts|||||
||0.00|650,000.00|-100.00%|disposal of part of funds|
|payable|||||
|||||of the Reporting Period.|
|||||Mainly due to the newly|
|Other non-current|||||
||120,800,000.00|0.00||increased funds of the|
|liabilities|||||
|||||Reporting Period.|

 Major changes to the profit structure or sources of the Company during the Reporting Period:
□ Applicable√ Not applicable
No major changes occurred to the profit structure or sources of the Company during the Reporting Period.
Reporting Period progress of the future development planning in the disclosed documents of the Company such as share-soliciting prospectuses, offering prospectuses, asset reorganization reports, etc.:
□ Applicable√ Not applicable
The Company did not mention any future planning for the Reporting Period in its disclosed documents such as share-soliciting prospectuses, offering prospectuses, asset reorganization reports, etc.
Review the progress of the previously disclosed business plan in the Reporting Period:
The operating revenue goal of the Company for 2016 is RMB2.15 billion. And RMB1.006 billion has been accomplished for the Reporting Period,46.77%% of the goal.
III. Breakdown of main business
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
|||||Increase/decrease||Increase/decrease|
||||||Increase/decrease||
|||||of operating||of gross profit|
||Operating||||of operating costs||
|||Operating costs|Gross profit rate|revenues over the||rate over the|
||revenues||||over the same||
|||||same period of||same period of|
||||||period of last year||
|||||last year||last year|
|Classified by industry|||||||
|Industry of|||||||
|manufacturing|||||||
|chemical raw|||||||
||988,076,337.88|843,037,392.01|14.68%|-19.53%|-10.12%|-8.93%|
|materials and|||||||
|chemical|||||||
|products|||||||
|Classified by product|||||||
|New chemical|||||||
||11,224,423.36|5,872,211.49|47.68%|-10.62%|-19.29%|5.62%|
|materials and|||||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|special chemicals|||||||
|Basic|||||||
|(chlor-alkali)|||||||
||172,426,086.80|160,569,547.98|6.88%|66.41%|61.91%|2.59%|
|chemical|||||||
|products|||||||
|Agriculture-appli|||||||
|ed chemicals,|||||||
||804,425,827.72|676,595,632.54|15.89%|-27.64%|-18.63%|-9.32%|
|such as fertilizer|||||||
|and pesticide|||||||
|Classified by region|||||||
|Domestic|474,368,316.48|418,058,248.48|11.87%|-13.04%|-4.33%|-8.03%|
|Overseas|513,708,021.40|424,979,143.53|17.27%|-24.72%|-15.17%|-9.32%|

 IV. Core competitiveness analysis
No significant changes occurred to the core competitiveness of the Company in the Reporting Period.
V. Investment analysis
1. Investments in equities of external parties
(1) Foreign investment
□ Applicable√ Not applicable
There was no foreign investment of the Company in the Reporting Period.
(2) Equity-holdings in financial enterprises
√ Applicable□ Not applicable
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Gain/loss|||
|||Initial|Opening||Closing||||||
|||||Opening||Closing|Closing|in the|||
|Enterprise|Enterprise|investment|equity-hol||equity-hol||||Accountin|Equity|
|||||equity-hol||equity-hol|book value|Reporting|||
|name|variety|cost|dings||dings||||g title|source|
|||||ding ratio||ding ratio|(RMB)|Period|||
|||(RMB)|(share)||(share)||||||
|||||||||(RMB)|||
||||||||||Available-f|Purchase|
|Hubei|Commerci|20,000,000.00|||||8,008,982.||or-sale|of|
||||23,481,067|0.71%|23,481,067|0.71%|||||
|Bank|al bank||||||63||financial|corporate|
||||||||||assets|stock|
|||20,000,000.00|||||8,008,982.||||
|Total|||23,481,067|--|23,481,067|--||0.00|--|--|
||||||||63||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd. (3) Investment in securities
□ Applicable√ Not applicable
There was no investment in securities by the Company in the Reporting Period.
(4) Shareholdings in other listed companies
□ Applicable√ Not applicable
No such cases in the Reporting Period.
2. Information of trust management, derivative investment and entrusted loan
(1) Trust management
□ Applicable√ Not applicable
There was no trust management of the Company in the Reporting Period.
(2) Derivative investment
□ Applicable√ Not applicable
There was no derivative investment of the Company in the Reporting Period.
(3) Entrusted loan
□ Applicable√ Not applicable
There was no entrusted loan of the Company in the Reporting Period.
3. Use of raised funds
□ Applicable√ Not applicable
No such cases in the Reporting Period.
4. Analysis to main subsidiaries and stock-participating companies
√ Applicable□ Not applicable
Main subsidiaries and stock-participating companies:
Unit: RMB
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||Main|||||||
|Company|Company|||Registered|||Operating|Operating||
|||Industry|||Total assets|Net assets|||Net profit|
||||products/ser|||||||
|name|variety|||capital|||revenues|profit||
||||vices|||||||
|Sanonda||Chemical|Production|30000000.0|11,068,868.|6,284,975.3||-646,370.||
||Subsidiary||||||||8,203,633.06|
|(Jingzhou)||raw|of|0|75|7||33||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Pesticides||material|pesticides|||||||
|and||and|and|||||||
|Chemicals||chemical|intermediat|||||||
|Co., Ltd.||product|es|||||||
|||manufacturi||||||||
|||ng industry||||||||
||||Import &|||||||
|Hubei||||||||||
||||export of|||||||
|Sanonda||||||||||
|||Trade|pesticides|10000000.0|364,112,99|43,530,082.|102,702,05|-1,018,27||
|Foreign|Subsidiary||||||||-764,152.77|
|||industry|and|0|3.81|39|8.14|4.55||
|Trading||||||||||
||||intermediat|||||||
|Co., Ltd.||||||||||
||||es|||||||
|||Chemical||||||||
|||raw||||||||
||||Production|||||||
|Jingzhou||material||||||||
||||and sale of|||||||
|Hongxiang||and||40000000.0|211,876,71|-10,100,402|77,937,723.|-2,491,92||
||Subsidiary||chemical||||||-1,980,255.31|
|Chemical||chemical||0|5.27|.34|36|1.97||
||||raw|||||||
|Co., Ltd.||product||||||||
||||materials|||||||
|||manufacturi||||||||
|||ng industry||||||||

5. Significant projects of investments with non-raised funds
□ Applicable√ Not applicable
No such cases in the Reporting Period.
VI. Predict the operating results of January-September 2016
Warning of possible loss or considerable YoY change of the accumulated net profit made during the period-begin to the end of the next Reporting Period according to prediction, as well as explanations on the reasons:
□ Applicable√ Not applicable
VII. Explanation by the Board of Directors and the Supervisory Committee about the “non-standard audit report” issued by the CPAs firm for the Reporting Period
□ Applicable√ Not applicable
VIII. Explanation by the Board of Directors about the relevant situation of the “non-standard audit report” of the first half year
□ Applicable√ Not applicable
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. IX. Implementation of profit allocation during the Reporting Period
Profit allocation plan implemented during the Reporting Period, especially execution and adjustment of the cash dividend plan and the plan for turning capital reserve into share capital:
|||
|-|-|
|√ Applicable □ Not applicable||
|On 16 March 2016, the Company held the 8th Session of the 7th Board of Directors, which reviewed and approved the Preplan of the||
|2015 Profits Distribution that had reviewed and approved by the 2015 Annual General Meeting on 18 April. 2016. The 2015 profits||
|distribution plan was: based on the total share capital of the Company on 31 December 2015, distributed the cash bonus of RMB0.25||
|(tax included) of every 10 shares for the whole shareholders with 0 shares of the bonus shares (tax included) and without any turning||
|capital reserve into share capital. On 7 June 2016, the Company disclosed the Announcement on the Execution of the 2015 Equities||
|Distribution on the appointed information disclosure media and the above cash bonus had completed the execution on 17 June 2016.||
|Special statement about the cash dividend policy||
|In compliance with the Company’s Articles of Association and|Yes|
|the resolution of the general meeting||
||Yes. No. 155 of the Articles of Association explicitly stipulatedthe profits distribution policies, decision-making process as wellas the conditions and proportion of the dividends and so on.|
|Specific and clear dividend standard and ratio||
|Complete decision-making procedure and mechanism|Yes|
|Independent directors fulfilled their responsibilities and played|Yes|
|their due role.||
|Minority shareholders have the chance to fully express their|Yes|
|opinion and desire and their legal rights and interests were fully||
|protected.||
|In adjustment or alteration of the cash dividend policy, the|Not applicable.|
|conditions and procedure were in compliance with regulations||
|and transparent.||

X. Preplan for profit distribution and turning capital reserve into share capital in the Reporting Period
□ Applicable√ Not applicable
The Company planed that no to distribute cash dividend, bonus shares and there was no turning of capital reserve into share capital. XI. Particulars about researches, visits and interviews received in this Reporting Period√ Applicable□ Not applicable
|||||||
|-|-|-|-|-|-|
||||||Main discussion and|
|Time|Place|Way of reception|Visitor type|Visitor|materials provided by the|
||||||Company|
|||Telephone||Medium and small|When will the Company’s|
|25 Mar. 2016|Jingzhou||Individual|||
|||communication||investors|stocks resume listing?|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||||
|-|-|-|-|-|-|
||||||Materials offered:|
||||||Announcement on the|
||||||Progress of the|
||||||Reorganization of the|
||||||Significant Assets.|
||||||When will the Company’s|
||||||stocks resume listing?|
||||||Materials offered:|
|||Telephone||Medium and small||
|28 Mar. 2016|Jingzhouv||Individual||Announcement on the|
|||communication||investors||
||||||Progress of the|
||||||Reorganization of the|
||||||Significant Assets.|
||||||When will the Company’s|
||||||stocks resume listing?|
||||||Materials offered:|
|||Telephone||Medium and small||
|18 Apr. 2016|Jingzhou||Individual||Announcement on the|
|||communication||investors||
||||||Progress of the|
||||||Reorganization of the|
||||||Significant Assets.|
||||||When will the Company’s|
||||||stocks resume listing?|
||||||Materials offered:|
|||Telephone||Medium and small||
|7 Jun. 2016|Jingzhou||Individual||Announcement on the|
|||communication||investors||
||||||Progress of the|
||||||Reorganization of the|
||||||Significant Assets.|
||||||When will the Company’s|
||||||stocks resume listing?|
||||||Materials offered:|
|||Telephone||Medium and small||
|8 Jun. 2016|Jingzhou||Individual||Announcement on the|
|||communication||investors||
||||||Progress of the|
||||||Reorganization of the|
||||||Significant Assets.|
||||||When will the Company’s|
||||||stocks resume listing?|
||||||Materials offered:|
|||Telephone||Medium and small||
|29 Jun. 2016|Jingzhou||Individual||Announcement on the|
|||communication||investors||
||||||Progress of the|
||||||Reorganization of the|
||||||Significant Assets.。|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd. Section V. Significant Events
I. Corporate governance
The situation of theCompany’s governance did not differ in principle from the Company Law and the relevant CSRC requirements in the Reporting Period.
II. Litigations
Significant litigations and arbitrations
□ Applicable√ Not applicable
No such cases in the Reporting Period.
Other litigations
□ Applicable√ Not applicable
III. Media query
□Applicable√Not applicable
The Company was not involved in any media query in the Reporting Period.
IV. Bankruptcy or Reorganization Events
□ Applicable√ Not applicable
There Company was not involved in any bankruptcy or reorganization events in the Reporting Period.
V. Transaction in Assets
1. Purchase of assets
□ Applicable√ Not applicable
There is no purchase of assets in the Company during the Reporting Period.
2. Sale of assets
□ Applicable√ Not applicable
There is no sale of assets in the Company during the Reporting Period.
3. Business combination
√ Applicable□ Not applicable
The Company had held the 12th Session of the 7th Board of Directros of the Company on 28 June 2016, which reviewed and approved
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. the Proposal on Absorbing and Combining Jingzhou Hongxiang Chemical Co., Ltd. and the Proposal on Absorbing and Combining Sanonda (Jingzhou) Pesticides and Chemicals Co., Ltd.. Please refer to the www.cninfo.com.cn for the detailed content that disclosed on 29 June 2016. As for the above events about the merger were still waiting for the approval from Annual General Meeting for execution.
VI. Implementation and Influence of Equity Incentive Plan of the Company
□ Applicable√ Not applicable
There is no equity incentive plan and its implementation in the Company during the Reporting Period.
VII. Significant related-party transactions
1. Related-party transactions concerning routine operation
√ Applicable□ Not applicable
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||Type||||||||||||
|||||||||Approve||Settleme|Simila|||
|||of||Pricing||Transact||||||||
||||Content||||Proporti|d||nt|r|||
|||the||principl||ion||||||||
||||of the||||on in|transacti|Over|method|Transa|||
|||relate||e of the||amount||||||||
|Related|Relation||related-||Transact||same|on line|approve|of the|ction|Disclosu|Disclosure|
|||d-par||related-||(RMB||||||||
|party|ship||party||ion price||kind of|(RMB|d line or|related-|marke|re date|index|
|||ty||party||Ten||||||||
||||transacti||||transacti|Ten|not|party|t price|||
|||trans||transacti||thousan||||||||
||||on||||ons|thousan||transacti|receiv|||
|||actio||on||d)||||||||
|||||||||d)||on|able|||
|||n||||||||||||
||||||||||||||Announcement|
||||||||||||||No.: 2016-20|
||||||||||||||and the|
|Bluestar|||||Bluestar||||||||Announcement|
|(Beijing|||||(Beijing||||||||name:|
||Under|||||||||||||
|)|||Equipm||)||||||||Announcement|
||the same|||||||||Telegrap||||
|Chemic||Purc|ent|Market|Chemic|||||||18 Mar.|on Expected|
||ultimate|||||0.3||100|No|hic|0.3|||
|al||hase|expense|price|al|||||||2016|Routine|
||controll|||||||||transfer||||
|Machine|||s||Machine||||||||Related-party|
||er|||||||||||||
|ry Co.,|||||ry Co.,||||||||Transactions|
|Ltd.|||||Ltd.||||||||for 2016;|
||||||||||||||disclosed on|
||||||||||||||http://www.cnin|
||||||||||||||fo.com.cn|
|Beijing|Under|||||||||||||
||||Purchas|||||||||||
|Guangy|the same|||||||||Telegrap||||
|||Purc|e of raw|Market|Market|||||||18 Mar.||
|uan|ultimate|||||609||800|No|hic|609||Ditto|
|||hase|material|price|price|||||||2016||
|AgroSci|controll|||||||||transfer||||
||||s|||||||||||
|ences|er|||||||||||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Chemic||||||||||||||
|al Co.,||||||||||||||
|Ltd.||||||||||||||
|ADAM||||||||||||||
||Under|||||||||||||
|A||||||||||||||
||the same||Sales of|||||||Telegrap||||
|Agricult||||Market|Market|||||||18 Mar.||
||ultimate|Sales|pesticid|||8,739||23,790|No|hic|8,739||Ditto|
|ural||||price|price|||||||2016||
||controll||e|||||||transfer||||
|Solution||||||||||||||
||er|||||||||||||
|s LTD.||||||||||||||
|Jiangsu||||||||||||||
||Under|||||||||||||
|Anpon||||||||||||||
||the same||Sales of|||||||Telegrap||||
|Electroc||||Market|Market|||||||18 Mar.||
||ultimate|Sales|pesticid|||22||300|No|hic|22||Ditto|
|hemical||||price|price|||||||2016||
||controll||e|||||||transfer||||
|Co. Ltd.||||||||||||||
||er|||||||||||||
|China||||||||||||||
|Total||||--|--|9,370.3|--|24,990|--|--|--|--|--|
|Details about return of||||||||||||||
|||||N/A||||||||||
|large-amount sales||||||||||||||
|Where the Company classifies||||||||||||||
|||||The Company expected of the total amount of RMB250 million of the 2016 routine related||||||||||
|and estimates the total amount of||||||||||||||
|routine related-party transactions||||transaction with the actual occurred amount of RMB83.703 million that had not exceeded the||||||||||
|for the Reporting Period, explain||||||||||||||
|the actual implementation during||||expected limit.||||||||||
|the Reporting Period (if any)||||||||||||||
|||||The company’s related transactions with related party shall be carried out in accordance with the||||||||||
|Explain why the transaction price||||||||||||||
|is greatly different from the||||principle of voluntary, equality and mutual benefit, fair, and will not harm the interests of the||||||||||
|market price (if applicable)||||company.||||||||||

2. Related-party transactions arising from asset acquisition or sale
□ Applicable√ Not applicable
The Company was not involved in any related-party transactions arising from asset acquisition or sale during the Reporting Period. 3. Related-party transitions with joint investments
□ Applicable√ Not applicable
The Company was not involved in any related-party transaction with joint investments during the Reporting Period.
4. Credits and liabilities with related parties
√ Applicable□ Not applicable
Whether there were any non-current credits liabilities with related parties
□ Yes√ No
No such cases in the Reporting Period.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 5. Other significant related-party transactions
√ Applicable□ Not applicable
1. The parent company of theGroup—Jingzhou Sanonda Holdings Co.,Ltd.—paid& gained wages and social security through the Company with a total of RMB148,392.6.
2. Balance of bank deposit of Chemchina Finance Co., Ltd. of the Company at the year-begin was of RMB140,000,000.00, period-end of the Period was of RMB100,958,989.89, and balance of short-term loan at the period- begin was of RMB0, period-end was of RMB0; Interest of bank deposit of this year was of RMB958,989.89.
3. In Reporting Period, the 7th floor of theCompany’s office building had rented to Jingzhou Sanonda Holdings Co., Ltd. for business operation in the Reporting Period with the annual rent of RMB120,000.
The website to disclose the interim announcements on significant related-party transactions
||||
|-|-|-|
||Disclosure date of the interim||
|Name of the interim announcement||Website to disclose the interim announcement|
||announcement||
|Announcement on Expected RoutineRelated-party Transactions for 2016|||
||18 Mar. 2016|www.cninfo.com.cn|

VIII. Particulars about the non-operating occupation of funds by the controlling shareholder and other related parties of the Company
□ Applicable√ Not applicable
The Company was not involved in the non-operating occupation of funds by the controlling shareholder and other related parties during the Reporting Period.
IX. Particulars about significant contracts and their fulfillment
1. Particulars about trusteeship, contract and lease
(1) Trusteeship
□ Applicable√ Not applicable
There was no any trusteeship of the Company in the Reporting Period.
(2) Contract
□ Applicable√ Not applicable
There was no any contract of the Company in the Reporting Period.
(3) Lease
√ Applicable□ Not applicable
Explanation on the lease
The 7th floor of theCompany’s office building had rented to Jingzhou Sanonda Holdings Co., Ltd. for business operation in the
Reporting Period with the annual rent of RMB120,000.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. The lease whose profits reaching more than10% of the total profits of the Company in the Reporting Period
□ Applicable√ Not applicable
There was no any lease whose profits reaching more than10% of the total profits of the Company in the Reporting Period.
2. Guarantees provided by the company
√ Applicable□ Not applicable
Unit:RMB’0,000
||||||||||
|-|-|-|-|-|-|-|-|-|
|Guarantees provided by the Company for external parties (excluding those for subsidiaries)|||||||||
||Disclosure||||||||
||date on|||||||Guarante|
||||Actual||||||
||relevant|||Actual||||e for a|
|||Amount for|occurrence date||Type of|Period of|Executed||
|Guaranteed party|announcem|||guarantee||||related|
|||guarantee|(date of||guarantee|guarantee|or not||
||ent of|||amount||||party or|
||||agreement)||||||
||guaranteed|||||||not|
||amount||||||||
|Guarantees provided by the Company for its subsidiaries|||||||||
||Disclosure||||||||
||date on|||||||Guarante|
||||Actual||||||
||relevant|||Actual||||e for a|
|||Amount for|occurrence date||Type of|Period of|Executed||
|Guaranteed party|announcem|||guarantee||||related|
|||guarantee|(date of||guarantee|guarantee|or not||
||ent of|||amount||||party or|
||||agreement)||||||
||guaranteed|||||||not|
||amount||||||||
|Hubei Sanonda|||||||||
||18 Mar.||||Joint liability||||
|Foreign Trading||30,900|18 Mar. 2016|6,400||1 year|No|Yes|
||2016||||guarantee||||
|Co., Ltd.|||||||||
|||||Total actual occurred amount|||||
|Total guarantee line approved|||||||||
|||||of guarantee for the|||||
|for the subsidiaries during the||30,900||||6,400|||
|||||subsidiaries during the|||||
|Reporting Period (B1)|||||||||
|||||Reporting Period (B2)|||||
|Total guarantee line that has|||||||||
|||||Total actual guarantee balance|||||
|been approved for the|||||||||
|||30,900||for the subsidiaries at the end||6,400|||
|subsidiaries at the end of the|||||||||
|||||of the Reporting Period (B4)|||||
|Reporting Period (B3)|||||||||
|Guarantees provided by subsidiaries for subsidiaries|||||||||
||Disclosure|||||||Guarante|
||||Actual||||||
||date on|||Actual||||e for a|
|||Amount for|occurrence date||Type of|Period of|Executed||
|Guaranteed party|relevant|||guarantee||||related|
|||guarantee|(date of||guarantee|guarantee|or not||
||announcem|||amount||||party or|
||||agreement)||||||
||ent of|||||||not|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
||guaranteed||||
||amount||||
|Total guarantee amount provided by the Company (total of the above-mentioned three kinds of guarantees)|||||
|Total guarantee line approved|||Total actual occurred amount||
|during the Reporting Period||30,900|of guarantee during the|6,400|
|(A1+B1+C1)|||Reporting Period (A2+B2+C2)||
|Total guarantee line that has|||Total actual guarantee balance||
|been approved at the end of the||30,900|at the end of the Reporting|6,400|
|Reporting Period (A3+B3+C3)|||Period (A4+B4+C4)||
|Proportion of total guarantee amount (A4+B4+C4) to the net|||||
||||3.04%||
|assets of the Company|||||
|Of which:|||||
|Amount of debt guarantee provided for the guaranteed party|||||
|whose asset-liability ratio is not less than 70% directly or|||6,400||
|indirectly (E)|||||
|Total amount of the above three guarantees (D+E+F)|||6,400||
|Notes to the undue guarantee which may burden the related|||||
||||N/A||
|discharge duty (if any)|||||
|Notes to the external guarantee by violating the established|||||
||||N/A||
|procedures (if any)|||||

Explanation on guarantee that adopts complex method
(1) Particulars about illegal external guarantee
□ Applicable√ Not applicable
There was no particular about illegal external guarantee of the Company in the Reporting Period.
3. Other significant contracts
□ Applicable√ Not applicable
There was no other significant contract of the Company in the Reporting Period.
4. Other significant transactions
□ Applicable√ Not applicable
There was no other significant transaction of the Company in the Reporting Period.
X. Commitments made by the Company or shareholders holding over5% of theCompany’s shares in the Reporting Period or such commitments carried down into the Reporting Period
√ Applicable□ Not applicable
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||||
|-|-|-|-|-|-|
||Commitment||Time of|Term of||
|Type of commitment||Commitment contents|||Execution|
||maker||commitment|commitment||
|Commitment on share||||||
||-|-|-|-|-|
|reform||||||
|||I. Commitments on avoiding||||
|||horizontal competition: 1. except for||||
|||the Company proposed conducting||||
|||transaction may lead to competition in||||
|||domestic trade with Shenzhen||||
|||NOPOSION Agrochemical Co., Ltd.||||
|||disclosed in the B Shares Offer||||
|||Acquisition Report of Hubei Sanonda||||
|||CO., Ltd. The Company will take||||
|||effective measures to avoid the||||
|||Company and its controlling||||
|||subsidiaries engaged in the same or||||
|||similar business with Hubei Sanonda||||
|||CO., Ltd. within the territory.2. If the||||
|||Company or its controlling||||
|||subsidiaries domestically conduct||||
||||||The|
|||related business which form||||
||||||commitments|
||ADAMA|horizontal competition with Hubei||||
||||||were being|
|Commitment in the|Celsius|Sanonda CO., Ltd. in future||||
||||||carried out and|
|acquisition report or the|B.V.;ADAMA|(including related business of the|2013-09-07|2020-09-06||
||||||the commitment|
|report on equity changes|Agricultural|Company proposed conducting||||
||||||makers abided|
||Solutions Ltd.|transaction may lead to competition in||||
||||||by the above|
|||domestic trade with Shenzhen||||
||||||commitments.|
|||NOPOSION Agrochemical Co., Ltd.||||
|||disclosed in the B Shares Offer||||
|||Acquisition Report of Hubei Sanonda||||
|||CO., Ltd.) The Company will||||
|||according to the securities laws and||||
|||regulations and industry policy within||||
|||7 years or when the management||||
|||think the condition is ripe to actively||||
|||take steps, gradually eliminate the||||
|||competition, the concrete measures||||
|||including but not limited to the||||
|||following one or more: fight for||||
|||internal assets reconstruction,||||
|||(including putting the business into||||
|||Hubei Sanonda CO., Ltd. or operated||||
|||through Hubei Sanonda CO., Ltd. ) to||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
||adjust the industrial plan and business||||
||structure, to transform technology and||||
||to upgrade products, to divide the||||
||market so as to make each corporation||||
||differ in the products and its ultimate||||
||users, thus to avoid and eliminate the||||
||current domestic horizontal||||
||competition between the Company’s||||
||controlling subsidiaries and Sanonda.||||
||II. Commitments on maintaining the||||
||Company’s operation independence||||
||and specify the related transaction: 1.||||
||After the complement of the tender||||
||offer, Sanonda will continue to||||
||maintain complete purchase,||||
||production and sales system, and to||||
||gain the independent intellectual||||
||property. The Company and its direct||||
||or indirect controlling shareholders||||
||and Sanonda of which the personnel,||||
||assets, finance, business and||||
||institutions will be completely||||
||separated, and at the same time||||
|||||The|
||maintain the operation ability of||||
|||||commitments|
|ADAMA|Sanonda that independently face to||||
|||||were being|
|Celsius|the China agrochemical industry||||
|||||carried out and|
|B.V.;ADAMA|market. 2. The Company will avoid|2013-09-07|9999-12-31||
|||||the commitment|
|Agricultural|and reduce the related transactions||||
|||||makers abided|
|Solutions Ltd.|with Sanonda according to the||||
|||||by the above|
||requirements stipulated by the laws,||||
|||||commitments.|
||regulations and other normative||||
||documents; but for those related||||
||transactions that are inevitable or||||
||occur with reasonable cause, will have||||
||to obey the just, fair and open market||||
||principles. And to sign the agreement||||
||according to the law and to carry out||||
||legal program, and to make sure not to||||
||harm the legal interest of Sanonda and||||
||other shareholders by related||||
||transaction according to the Articles||||
||of Association of Sanonda, the||||
||relevant system about related||||
||transaction and to conduct the duty of||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
||information disclosure as well as the||||
||approval process which stipulated by||||
||the relevant regulations."||||
||I. Commitments on avoiding||||
||horizontal competition: 1. The||||
||business of the Company’s||||
||subsidiaries-- Jiangsu Anpon||||
||Electrochemical Co., Ltd., Anhui||||
||Petroleum Chemical Group Co., Ltd.,||||
||Shandong Dacheng Agrochemical||||
||Co., Ltd. and Jiamusi Heilong||||
||Agrochemicals Co., Ltd., and Hunan||||
||Haohua Chemical Co., Ltd. and its||||
||subsidiary had the same or similar||||
||situations with the main business of||||
||Sanonda, and aimed at the domestic||||
||horizontal competition, the Company||||
||committed to gradually eliminate such||||
||kind of horizontal competition in the||||
||future and to fight for the internal||||
|||||The|
||assets reconstruction, to adjust the||||
|||||commitments|
||industrial plan and business structure,||||
|||||were being|
|China National|to transform technology and to||||
|||||carried out and|
|Chemical|upgrade products, to divide the market|2013-09-07|2020-09-06||
|||||the commitment|
|Corporation|so as to make each corporation differ||||
|||||maker abided by|
||in the products and its ultimate users||||
|||||the above|
||according to the securities laws and||||
|||||commitments.|
||regulations and industry policy within||||
||7 years, thus to eliminate the current||||
||domestic horizontal competition||||
||between the Company’s controlling||||
||subsidiaries and Sanonda. 2.||||
||Excepting the competition situation||||
||disclosed in the offer acquisition||||
||report, the Company take effective||||
||measures to avoid the Company and||||
||its controlling subsidiaries ( excepting||||
||Commitments respectively made in||||
||acquisition report by Celsius Property||||
||B.V. and MAI )’ new increased||||
||business engaged in the same or||||
||similar business with Hubei Sanonda||||
||CO., Ltd. within the territory in||||
||future. 3. If the Company or its||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
||controlling subsidiaries (excepting||||
||Commitments respectively made in||||
||acquisition report by Celsius Property||||
||B.V. and MAI) domestically conduct||||
||related business which form||||
||horizontal competition with Hubei||||
||Sanonda CO., Ltd. in future, the||||
||Company will actively take steps,||||
||gradually eliminate the competition,||||
||the concrete measures including but||||
||not limited to fight for internal assets||||
||reconstruction, (including putting the||||
||business into Hubei Sanonda CO.,||||
||Ltd. or operated through Hubei||||
||Sanonda CO., Ltd.) to adjust the||||
||industrial plan and business structure,||||
||to transform technology and to||||
||upgrade products, to divide the market||||
||so as to make each corporation differ||||
||in the products and its ultimate users,||||
||thus to avoid and eliminate the current||||
||domestic horizontal competition||||
||between the Company’s controlling||||
||subsidiaries and Sanonda.||||
||II. Commitments on maintaining the||||
||Company’s operation independence||||
||and specify the related transaction: 1.||||
||After the complement of the tender||||
||offer, Sanonda will continue to||||
||maintain complete purchase,||||
||production and sales system, and to|||The|
||gain the independent intellectual|||commitments|
||property. The Company and its direct|||were being|
|China National|||||
||or indirect controlling shareholders|||carried out and|
|Chemical||2013-09-07|9999-12-31||
||and Sanonda of which the personnel,|||the commitment|
|Corporation|||||
||assets, finance, business and|||maker abided by|
||institutions will be completely|||the above|
||separated, and at the same time|||commitments.|
||maintain the operation ability of||||
||Sanonda that independently face to||||
||the China agrochemical industry||||
||market. 2. The Company will avoid||||
||and reduce the related transactions||||
||with Sanonda according to the||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||||
|-|-|-|-|-|-|
|||requirements stipulated by the laws,||||
|||regulations and other normative||||
|||documents; but for those related||||
|||transactions that are inevitable or||||
|||occur with reasonable cause, will have||||
|||to obey the just, fair and open market||||
|||principles. And to sign the agreement||||
|||according to the law and to carry out||||
|||legal program, and to make sure not to||||
|||harm the legal interest of Sanonda and||||
|||other shareholders by related||||
|||transaction according to the Articles||||
|||of Association of Sanonda, the||||
|||relevant system about related||||
|||transaction and to conduct the duty of||||
|||information disclosure as well as the||||
|||approval process which stipulated by||||
|||the relevant regulations.||||
|Commitments made at||||||
|the time of assets||||||
|reorganization||||||
|Commitments made in||||||
|the initial public||||||
|offering or refinancing||||||
||||||Mr. Jiang|
||||||Chenggang had|
||||||completed the|
|||“1. The Supervisory Board Chairman||||
||||||execution of the|
|||of the Company Mr. Jiang Chenggang||||
||||||commitments|
|||planed to purchase the shares of the||||
||||||while owning to|
|||Company of over 5000 shares through||||
||||||the suspension|
|||the secondary market by the||||
||||||of the|
|Other commitments|Mr. Jiang|self-rising funds in the future 6||||
||||||Company’s|
|made to minority|Chenggang; Mr.|months (2015.7.13-2016.1.12); 2. The|13 Jul. 2015|2016-01-12||
||||||shares from 5|
|shareholders|Li Zhongxi|Board Secretary Mr. Li Zhongxi||||
||||||August 2015 to|
|||planed to purchase the shares of the||||
||||||the disclosure|
|||Company of over 5000 shares through||||
||||||date, Mr. Li|
|||the secondary market by the||||
||||||Zhongxi could|
|||self-rising funds in the future 6||||
||||||not execute the|
|||months (2015.7.13-2016.1.12)”.||||
||||||commitments on|
||||||increasing the|
||||||shareholding.|
|Executed timely or not?|Yes|||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||
|-|-|
|If the commitments||
|failed to complete the||
|execution when expired,||
|should specifically||
||Not applicable.|
|explain the reasons of||
|unfulfillment and the net||
|stage of the working||
|plan||

XI. Particulars about engagement and disengagement of CPAs firm
Whether the semi-annual financial report had been audited?
□ Yes√ No
This semi-annual report is un-audited.
XII. Punishment and Rectification
□ Applicable√ Not applicable
There was no any punishment and rectification of the Company in the Reporting Period.
XIII. Reveal of the delisting risks of illegal or violation
□ Applicable√ Not applicable
There was no any delisting risk of illegal or violation of the Company in the Reporting Period.
XIV. Explanation about other significant matters
√ Applicable□ Not applicable
Owning to the Company was planning the significant events reorganization project, theCompany’s stocks delist since the market opening on 5 Aug. 2015. During the Reporting Period, the details of the progress of the reorganization events was on the Announcement on the Progress of the Significant Assets Reorganization all previously disclosed.
XV. Related situation of the corporate bonds
Whether there was any public issuance of the corporate bonds which listed on the securities exchange that had not due on the approved presentation date of the half-annual report or failed to pay in full amount.
No
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. Section VI. Change in Shares& Shareholders
I. Changes in share capital
Unit: Share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before this change||Increase/decrease (+, -)|||||After the change||
||||||Capitalizat|||||
||||Issuance||ion of|||||
|||||Bonus|||||Proportio|
||Amount|Proportion|o f new||public|Other|Subtotal|Amount||
|||||share|||||n|
||||shares||reserve|||||
||||||fund|||||
|I. Shares subject to trading||||||||||
||20,531|0.00%||||||20,531|0.00%|
|moratorium||||||||||
|3. Other domestic shares|20,531|0.00%||||||20,531|0.00%|
|Shares held by||||||||||
||20,531|0.00%||||||20,531|0.00%|
|domestic individuals||||||||||
|II. Shares not subject to|593,902,6|||||||593,902,6||
|||100.00%|||||||100.00%|
|trading moratorium|89|||||||89||
|1. Ordinary shares|363,902,6|||||||363,902,6||
|||61.27%|||||||61.27%|
|denominated in RMB|89|||||||89||
|2. Domestically listed|230,000,0|||||||230,000,0||
|||38.73%|||||||38.73%|
|foreign shares|00|||||||00||
||593,923,2|||||||593,923,2||
|III. Total of shares||100.00%|||||||100.00%|
||20|||||||20||

Reasons for changes in share
□ Applicable√ Not applicable
Approval of share changes
□ Applicable√ Not applicable
Transfers in share changes
□ Applicable√ Not applicable
Influence of share changes towards financial indexes in the latest year and latest period such as basic EPS and diluted EPS, and net assets per share belonging to shareholder with ordinary share
□ Applicable√ Not applicable
Other contents that the Company thinks necessary or is asked by securities regulators to be disclosed
□ Applicable√ Not applicable
Explanation of the changes in the sum of the shares and the structure of the shareholders and the structure of the assets as well as the
liabilities of the Company
□ Applicable√ Not applicable
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. II. Number of shareholders and shareholding
Unit: Share
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||Total number of preferred|||||
|Total number of common||||||shareholders that had restored|||||
|||63,170 (of which the Share A|||||||||
|shareholders at the end of the||||||the voting right at the end of|||0||
|||shareholders were of 44,474)|||||||||
|Reporting Period||||||the Reporting Period (if any)|||||
|||||||(note 8)|||||
|Shareholding of common shareholders holding more than 5% shares or the top 10 of common shareholders|||||||||||
||||||Increase||Number||Pledged or frozen shares||
|||||Number of||||Number of|||
||||||and||of shares||||
|||||shareholding||||shares held|||
||||Holding||decrease of||held||||
|Name of|Nature of|||at the end of||||not subject|||
||||percentage||shares||subject to||Status of|Number of|
|shareholder|shareholder|||the||||to trading|||
||||(%)||during||trading||shares|shares|
|||||Reporting||||moratoriu|||
||||||Reporting||moratoriu||||
|||||Period||||m|||
||||||Period||m||||
|Jingzhou SanondaShareholding Co.,Ltd.|State-owned legalperson||20.15%|119,687,202|-||-|-|||
||||||||||-|-|
|ADAMA CelsiusB.V.|Foreign legalperson||10.60%|62,950,659|-||-|-|||
||||||||||-|-|
|Chen Lichun|Domestic naturalperson||1.14%|6,790,954|-||-|-|||
||||||||||-|-|
|State-owned AssetsAdministrationBureau of QichunCounty|State||0.70%|4,169,266|-||-|-|||
||||||||||-|-|
|Jiang Jian|Domestic naturalperson||0.61%|3,595,123|-||-|-|||
||||||||||-|-|
|China SecuritiesFinance CorporationLimited|Other||0.47%|2,817,300|-||-|-|||
||||||||||-|-|
|NORGES BANK|Foreign legalperson||0.44%|2,634,504|-||-|-|||
||||||||||-|-|
|ICBC - LionMedium-and-small-cap Selected StockSecuritiesInvestment Fund|Other||0.42%|2,480,384|-||-|-|||
||||||||||-|-|
|Bank of ChinaLimited －|Other||0.38%|2,252,947|-||-|-|||
||||||||||-|-|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Manulife Teda JiliDebt SecuritiesInvestment Funds|||||||||||
|ICBC - JT TianfuReform New PowerFlexibleConfiguration ofHybrid SecuritiesInvestment Funds|Other|0.36%|2,160,078|-|-|-|||||
|||||||||-|-||
|Strategic investors or the general legal|||||||||||
|person due to the placement of new|||||||||||
|||Not applicable|||||||||
|shares become the top 10 shareholders|||||||||||
|(if any) (note 3)|||||||||||
|||Jingzhou Sanonda Shareholding Co., Ltd. and ADAMA Celsius B.V. are related parties,|||||||||
|||and under the same control of China National Chemical Agrochemical Corporation, and|||||||||
|Explanation on associated relationship||are acting-in-concert parties as prescribed in the Administrative Methods for Acquisition|||||||||
|or/and persons||of Listed Companies. It is unknown whether the other shareholders are related parties or|||||||||
|||acting-in-concert parties as prescribed in the Administrative Methods for Acquisition of|||||||||
|||Listed Companies.|||||||||
|Particulars about shares held by top 10 common shareholders not subject to trading moratorium|||||||||||
|||Number of shares held not subject to trading moratorium|||||Type of share||||
|Name of shareholder|||||||||||
|||at the end of the Period|||||Type of share|||Number|
|Jingzhou Sanonda Shareholding Co.,Ltd.||119,687,202|||||RMB ordinary|||119,687,20|
||||||||share|||2|
|ADAMA Celsius B.V.||62,950,659|||||Domestically||||
||||||||listed foreign|||62,950,659|
||||||||share||||
|Chen Lichun||6,790,954|||||RMB ordinary||||
|||||||||||6,790,954|
||||||||share||||
|State-owned Assets AdministrationBureau of Qichun County||4,169,266|||||RMB ordinary||||
|||||||||||4,169,266|
||||||||share||||
|Jiang Jian||3,595,123|||||RMB ordinary||||
|||||||||||3,595,123|
||||||||share||||
|China Securities Finance CorporationLimited||2,817,300|||||RMB ordinary||||
|||||||||||2,817,300|
||||||||share||||
|NORGES BANK||2,634,504|||||Domestically||||
||||||||listed foreign|||2,634,504|
||||||||share||||
|ICBC - Lion Medium-and-small-CapSelected Stock Securities Investment||2,480,384|||||RMB ordinary||||
|||||||||||2,480,384|
||||||||share||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||
|-|-|-|-|
|Fund||||
|Bank of China Limited － ManulifeTeda Jili Debt Securities InvestmentFunds|2,252,947|||
|||RMB ordinary||
||||2,252,947|
|||share||
|ICBC - JT Tianfu Reform New PowerFlexible Configuration of HybridSecurities Investment Funds|2,160,078|||
|||RMB ordinary||
||||2,160,078|
|||share||
|Explanation on associated relationship|STATE-OWNED ASSETS ADMINISTRATION BUREAU OF QICHUN COUNTY|||
|among the top ten shareholders of|held the shares of the Company on behalf of the country. Jingzhou Sanonda|||
|tradable share not subject to trading|Shareholding Co., Ltd. and ADAMA Celsius B.V. are related parties, and under the same|||
|moratorium, as well as among the top|control of China National Chemical Agrochemical Corporation, and are|||
|ten shareholders of tradable share not|acting-in-concert parties as prescribed in the Administrative Methods for Acquisition of|||
|subject to trading moratorium and top|Listed Companies. It is unknown whether the other shareholders are related parties or|||
|ten shareholders, or explanation on|acting-in-concert parties as prescribed in the Administrative Methods for Acquisition of|||
|acting-in-concert|Listed Companies.|||
||1. Shareholder Chen Lichun held 6,309,732 shares of the Company through a credit|||
||collateral securities trading account and held shares of the Company through a common|||
|Particular about shareholder participate||||
||securities account, who thus held 6,790,954 shares of the Company in total. 2.|||
|in the securities lending and borrowing||||
||Shareholder Jiang Jian held 3,415,123 shares of the Company through a credit collateral|||
|business (if any) (note 4)||||
||securities trading account and held 180,000 shares of the Company through a common|||
||securities account, who thus held 3,595,123 shares of the Company in total.|||

Did any top 10 common shareholders or the top 10 common shareholders not subject to trading moratorium of the Company carry out an agreed buy-back in the Reporting Period?
□ Yes√ No
The top 10 common shareholders or the top 10 common shareholders not subject to trading moratorium of the Company had not carried out any agreed buy-back in the Reporting Period.
III. Change of the controlling shareholder or the actual controller
Change of the controlling shareholder in the Reporting Period
□ Applicable√ Not applicable
There was no any change of the controlling shareholder of the Company in the Reporting Period.
Change of the actual controller in the Reporting Period
□ Applicable√ Not applicable
There was no any change of the actual controller of the Company in the Reporting Period.
IV. Particulars on shareholding increase scheme during the Reporting Period proposed or implemented by the shareholders and act-in-concert persons
□ Applicable√ Not applicable
Within the scope known to the Company, there was no any shareholding increase scheme during the Reporting Period proposed or
implemented by the shareholders and act-in-concert persons.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. Section VII. Preferred Shares
□ Applicable√ Not applicable
There was no any preferred share of the Company during the Reporting Period.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. Section VIII. Directors, Supervisors, Senior Management Staffs I. Changes in shareholding of Directors, Supervisors and Senior Management Staffs
□ Applicable√ Not applicable
There was no change in shareholding of Directors, Supervisors and Senior Management staffs, for the specific information please refer to the 2015 Annual Report.
II. Changes in Directors, Supervisors and Senior Management Staffs
□ Applicable√ Not applicable
There was no change in Directors, Supervisors and Senior Management staffs, for the specific information please refer to the 2015 Annual Report.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. IX. Financial Report
I. Audit report
Has this semi-annual report been audited?
□ Yes√ No
The semi-annual financial report has not been audited.
II. Financial statements
Currency unit for the statements in the notes to these financial statements: RMB
1. Consolidated balance sheet
Prepared by Hubei Sanonda Co., Ltd.
30 June 2016
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current Assets:|||
|Monetary funds|447,050,215.44|406,098,208.72|
|Settlement reserves|||
|Intra-group lendings|||
|Financial assets measured by fair|||
|value with the changes be included in|||
|the current gains and losses|||
|Derivative financial assets|||
|Notes receivable|14,785,699.71|34,433,010.97|
|Accounts receivable|400,197,459.56|180,450,531.93|
|Accounts paid in advance|28,224,389.49|20,413,365.68|
|Premiums receivable|||
|Reinsurance premiums receivable|||
|Receivable reinsurance contract|||
|reserves|||
|Interest receivable|||
|Dividend receivable|||
|Other accounts receivable|14,228,948.02|9,847,451.35|
|Financial assets purchased under|||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|agreements to resell|||
|Inventories|190,399,721.64|287,824,164.30|
|Assets divided available for sale|||
|Non-current assets due within 1 year|||
|Other current assets|11,406,283.03|14,685,220.14|
|Total current assets|1,106,292,716.89|953,751,953.09|
|Non-current assets:|||
|Loans by mandate and advances|||
|granted|||
|Available-for-sale financial assets|9,153,782.63|9,153,782.63|
|Held-to-maturity investments|||
|Long-term accounts receivable|||
|Long-term equity investment|||
|Investing property|4,879,635.66|5,036,745.54|
|Fixed assets|1,573,495,793.14|1,684,051,200.09|
|Construction in progress|171,601,549.18|143,683,545.15|
|Engineering materials|||
|Disposal of fixed assets|||
|Production biological assets|||
|Oil-gas assets|||
|Intangible assets|160,317,671.35|165,569,924.44|
|R&D expense|||
|Goodwill|||
|Long-term deferred expenses|||
|Deferred income tax assets|13,052,863.55|11,021,018.38|
|Other non-current assets|5,000,000.00|5,000,000.00|
|Total of non-current assets|1,937,501,295.51|2,023,516,216.23|
|Total assets|3,043,794,012.40|2,977,268,169.32|
|Current liabilities:|||
|Short-term borrowings|0.00|20,000,000.00|
|Borrowings from Central Bank|||
|Customer bank deposits and due to|||
|banks and other financial institutions|||
|Intra-group borrowings|||
|Financial liabilities measured by fair|||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|value with the changes be included in|||
|the current gains and losses|||
|Derivative financial liabilities|||
|Notes payable|30,000,000.00|0.00|
|Accounts payable|144,021,775.40|134,357,481.77|
|Accounts received in advance|8,077,224.97|26,666,138.22|
|Financial assets sold for repurchase|||
|Handling charges and commissions|||
|payable|||
|Employee’s compensation payable|14,552,544.21|30,308,341.73|
|Tax payable|22,141,868.93|26,858,466.27|
|Interest payable|753,198.89|1,123,849.31|
|Dividend payable|250,000.00|250,000.00|
|Other accounts payable|31,950,298.26|25,511,333.81|
|Reinsurance premiums payable|||
|Insurance contract reserves|||
|Payables for acting trading of|||
|securities|||
|Payables for acting underwriting of|||
|securities|||
|Liabilities divided available for sale|||
|Non-current liabilities due within 1|||
||254,000,000.00|244,000,000.00|
|year|||
|Other current liabilities|||
|Total current liabilities|505,746,910.66|509,075,611.11|
|Non-current liabilities:|||
|Long-term borrowings|290,090,000.00|343,590,000.00|
|Bonds payable|||
|Of which: preferred shares|||
|Perpetual capital securities|||
|Long-term payables|0.00|650,000.00|
|Long-term payroll payables|||
|Specific payables|||
|Estimated liabilities|||
|Deferred income|24,568,488.17|26,570,088.61|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Deferred income tax liabilities|||
|Other non-current liabilities|120,800,000.00||
|Total non-current liabilities|435,458,488.17|370,810,088.61|
|Total liabilities|941,205,398.83|879,885,699.72|
|Owners’ equity|||
|Share capital|593,923,220.00|593,923,220.00|
|Other equity instruments|||
|Of which: preferred shares|||
|Perpetual capital securities|||
|Capital reserves|263,063,461.97|263,063,461.97|
|Less: Treasury stock|||
|Other comprehensive income|||
|Specific reserves|26,095,528.12|22,848,859.15|
|Surplus reserves|190,699,248.11|190,699,248.11|
|Provisions for general risks|||
|Retained profits|1,028,807,155.37|1,026,847,680.37|
|Total equity attributable to owners of|||
||2,102,588,613.57|2,097,382,469.60|
|the Company|||
|Minority interests|||
|Total owners’ equity|2,102,588,613.57|2,097,382,469.60|
|Total liabilities and owners’ equity|3,043,794,012.40|2,977,268,169.32|

 Legal representative: An Liru Person-in-charge of the accounting work: Liu Anping
Chief of the accounting division: Tu Zhiwen
2. Balance sheet of the Company
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Current Assets:|||
|Monetary funds|358,933,954.44|378,450,204.94|
|Financial assets measured by fair|||
|value with the changes be included in|||
|the current gains and losses|||
|Derivative financial assets|||
|Notes receivable|12,665,699.71|32,331,010.97|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Accounts receivable|618,514,974.18|352,274,073.40|
|Accounts paid in advance|24,421,745.06|19,218,775.50|
|Interest receivable|||
|Dividend receivable|||
|Other accounts receivable|745,265.13|1,535,805.55|
|Inventories|178,346,271.24|275,057,647.64|
|Assets divided available for sale|||
|Non-current assets due within 1 year|||
|Other current assets|0.00|387,633.86|
|Total current assets|1,193,627,909.76|1,059,255,151.86|
|Non-current assets:|||
|Available-for-sale financial assets|9,153,782.63|9,153,782.63|
|Held-to-maturity investments|||
|Long-term accounts receivable|||
|Long-term equity investment|55,526,635.41|55,526,635.41|
|Investing property|4,879,635.66|5,036,745.54|
|Fixed assets|1,440,503,812.01|1,543,099,613.97|
|Construction in progress|166,343,880.83|139,297,997.97|
|Engineering materials|||
|Disposal of fixed assets|||
|Production biological assets|||
|Oil-gas assets|||
|Intangible assets|148,108,007.83|150,253,232.11|
|R&D expense|||
|Goodwill|||
|Long-term deferred expenses|||
|Deferred income tax assets|9,156,073.08|8,855,180.95|
|Other non-current assets|5,000,000.00|5,000,000.00|
|Total of non-current assets|1,838,671,827.45|1,916,223,188.58|
|Total assets|3,032,299,737.21|2,975,478,340.44|
|Current liabilities:|||
|Short-term borrowings|0.00|20,000,000.00|
|Financial liabilities measured by fair|||
|value with the changes be included in|||
|the current gains and losses|||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Derivative financial liabilities|||
|Notes payable|30,000,000.00|0.00|
|Accounts payable|133,698,895.59|129,017,385.70|
|Accounts received in advance|5,958,025.00|24,885,411.49|
|Employee’s compensation payable|13,102,544.21|28,311,263.93|
|Tax payable|16,348,734.19|21,773,193.24|
|Interest payable|753,198.89|1,123,849.31|
|Dividend payable|250,000.00|250,000.00|
|Other accounts payable|30,720,924.29|23,536,806.94|
|Liabilities divided available for sale|||
|Non-current liabilities due within 1|||
||254,000,000.00|244,000,000.00|
|year|||
|Other current liabilities|||
|Total current liabilities|484,832,322.17|492,897,910.61|
|Non-current liabilities:|||
|Long-term borrowings|290,090,000.00|343,590,000.00|
|Bonds payable|||
|Of which: preferred shares|||
|Perpetual capital securities|||
|Long-term payables|0.00|650,000.00|
|Long-term payroll payables|||
|Specific payables|||
|Estimated liabilities|||
|Deferred income|18,176,821.48|19,686,755.26|
|Deferred income tax liabilities|||
|Other non-current liabilities|120,800,000.00||
|Total non-current liabilities|429,066,821.48|363,926,755.26|
|Total liabilities|913,899,143.65|856,824,665.87|
|Owners’ equity:|||
|Share capital|593,923,220.00|593,923,220.00|
|Other equity instruments|||
|Of which: preferred shares|||
|Perpetual capital securities|||
|Capital reserves|263,799,837.18|263,799,837.18|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Less: Treasury stock|||
|Other comprehensive income|||
|Specific reserves|21,126,415.81|17,879,746.84|
|Surplus reserves|190,699,248.11|190,699,248.11|
|Retained profits|1,048,851,872.46|1,052,351,622.44|
|Total owners’ equity|2,118,400,593.56|2,118,653,674.57|
|Total liabilities and owners’ equity|3,032,299,737.21|2,975,478,340.44|

 3. Consolidated income statement
Unit: RMB
||||
|-|-|-|
|Item|Jan.-Jun. 2016|Jan.-Jun 2015|
|I. Total operating revenues|1,005,697,157.50|1,235,251,682.81|
|Including: Sales income|1,005,697,157.50|1,235,251,682.81|
|Interest income|||
|Premium income|||
|Handling charge and commission|||
|income|||
|II. Total operating cost|996,545,598.31|1,077,630,542.79|
|Including: Cost of sales|859,188,101.99|941,767,629.71|
|Interest expenses|||
|Handling charge and commission|||
|expenses|||
|Surrenders|||
|Net claims paid|||
|Net amount withdrawn for the|||
|insurance contract reserve|||
|Expenditure on policy dividends|||
|Reinsurance premium|||
|Taxes and associate charges|3,853,275.19|8,887,120.84|
|Selling and distribution expenses|45,242,941.76|36,541,875.51|
|Administrative expenses|69,143,939.29|48,923,908.29|
|Financial expenses|3,943,997.08|13,893,016.49|
|Asset impairment loss|15,173,343.00|27,616,991.95|
|Add: Gain/(loss) from change in fair|||
|value (“-” means loss)|||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Gain/(loss) from investment (“-”|||
||75,504.00||
|means loss)|||
|Including: share of profits in associates|||
|and joint ventures|||
|Foreign exchange gains (“-” means loss)|||
|III. Business profit (“-” means loss)|9,227,063.19|157,621,140.02|
|Add: non-operating income|13,882,859.98|2,937,379.44|
|Of which: gains from non-current|||
||10,214,203.76||
|asset disposal|||
|Less: non-operating expense|3,392.65|14,810.07|
|Of which: losses from non-current|||
||3,392.65|7,689.72|
|asset disposal|||
|IV. Total profit (“-” means loss)|23,106,530.52|160,543,709.39|
|Less: Income tax expense|6,298,975.02|42,899,361.41|
|V. Net profit (“-” means loss)|16,807,555.50|117,644,347.98|
|Attributable to owners of the|||
||16,807,555.50|117,678,175.59|
|Company|||
|Minority shareholders’ income||-33,827.61|
|VI. After-tax net amount of other|||
|comprehensive incomes|||
|After-tax net amount of other|||
|comprehensive incomes attributable to|||
|owners of the Company|||
|(I) Other comprehensive incomes|||
|that will not be reclassified into gains and|||
|losses|||
|1. Changes in net liabilities or|||
|assets with a defined benefit plan upon|||
|re-measurement|||
|2. Enjoyable shares in other|||
|comprehensive incomes in investees that|||
|cannot be reclassified into gains and|||
|losses under the equity method|||
|(II) Other comprehensive incomes|||
|that will be reclassified into gains and|||
|losses|||
|1. Enjoyable shares in other|||
|comprehensive incomes in investees that|||
|will be reclassified into gains and losses|||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|under the equity method|||
|2. Gains and losses on fair|||
|value changes of available-for-sale|||
|financial assets|||
|3. Gains and losses on|||
|reclassifying held-to-maturity|||
|investments into available-for-sale|||
|financial assets|||
|4. Effective hedging gains and|||
|losses on cash flows|||
|5. Foreign-currency financial|||
|statement translation difference|||
|6. Other|||
|After-tax net amount of other|||
|comprehensive incomes attributable to|||
|minority shareholders|||
|VII. Total comprehensive incomes|16,807,555.50|117,644,347.98|
|Attributable to owners of the|||
||16,807,555.50|117,678,175.59|
|Company|||
|Attributable to minority|||
|||-33,827.61|
|shareholders|||
|VIII. Earnings per share|||
|(I) Basic earnings per share|0.0283|0.1981|
|(II) Diluted earnings per share|0.0283|0.1981|

 For the business combination under the same control of the current period, the net profits realized before the combination of the combined party were of RMB000 and the net profits realized of the combined party of the last period were of RMB000.
Legal representative: An Liru Person-in-charge of the accounting work: Liu Anping
Chief of the accounting division: Tu Zhiwen
4. Income statement of the Company
Unit: RMB
||||
|-|-|-|
|Item|Jan.-Jun. 2016|Jan.-Jun 2015|
|I. Total sales|996,889,002.00|1,259,980,812.07|
|Less: cost of sales|856,424,336.31|971,392,111.37|
|Business taxes and surcharges|3,825,486.63|8,814,691.54|
|Distribution expenses|42,430,625.01|35,037,747.08|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Administrative expenses|66,110,552.46|45,633,925.73|
|Financial costs|7,357,642.37|14,472,806.78|
|Impairment loss|7,432,233.18|22,368,460.63|
|Add: gain/(loss) from change in|||
|fair value (“-” means loss)|||
|Gain/(loss) from investment (“-”|||
||75,504.00||
|means loss)|||
|Of which: income form investment|||
|on associates and joint ventures|||
|II. Business profit (“-” means loss)|13,383,630.04|162,261,068.94|
|Add: non-business income|2,989,711.67|2,445,712.78|
|Of which: gains from non-current|||
||22,722.11||
|asset disposal|||
|Less: non-business expense|3,392.65|14,810.07|
|Of which: losses from non-current|||
||3,392.65|7,689.72|
|asset disposal|||
|III. Total profit (“-” means loss)|16,369,949.06|164,691,971.65|
|Less: income tax expense|5,021,618.54|43,289,877.98|
|IV. Net profit (“-” means loss)|11,348,330.52|121,402,093.67|
|V. After-tax net amount of other|||
|comprehensive incomes|||
|(I) Other comprehensive|||
|incomes that will not be reclassified|||
|into gains and losses|||
|1. Changes in net liabilities or|||
|assets with a defined benefit plan upon|||
|re-measurement|||
|2. Enjoyable shares in other|||
|comprehensive incomes in investees|||
|that cannot be reclassified into gains|||
|and losses under the equity method|||
|(II) Other comprehensive|||
|incomes that will be reclassified into|||
|gains and losses|||
|1. Enjoyable shares in other|||
|comprehensive incomes in investees|||
|that will be reclassified into gains and|||
|losses under the equity method|||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|2. Gains and losses on fair|||
|value changes of available-for-sale|||
|financial assets|||
|3. Gains and losses on|||
|reclassifying held-to-maturity|||
|investments into available-for-sale|||
|financial assets|||
|4. Effective hedging gains|||
|and losses on cash flows|||
|5. Foreign-currency financial|||
|statement translation difference|||
|6. Other|||
|VI. Total comprehensive incomes|11,348,330.52|121,402,093.67|
|VII. Earnings per share|||
|(I) Basic earnings per share|||
|(II) Diluted earnings per share|||

5. Consolidated cash flow statement
Unit: RMB
||||
|-|-|-|
|Item|Jan.-Jun. 2016|Jan.-Jun 2015|
|I. Cash flows from operating activities:|||
|Cash received from sale of|||
||635,526,388.02|869,451,160.69|
|commodities and rendering of service|||
|Net increase of deposits from|||
|customers and dues from banks|||
|Net increase of loans from the|||
|central bank|||
|Net increase of funds borrowed|||
|from other financial institutions|||
|Cash received from premium of|||
|original insurance contracts|||
|Net cash received from reinsurance|||
|business|||
|Net increase of deposits of policy|||
|holders and investment fund|||
|Net increase of dispose of the|||
|financial assets measured by fair value|||
|with the changes be included in the|||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|current gains and losses|||
|Cash received from interest,|||
|handling charges and commissions|||
|Net increase of intra-group|||
|borrowings|||
|Net increase of funds in repurchase|||
|business|||
|Tax refunds received|12,746,757.98|32,330,521.58|
|Other cash received relating to|||
||4,535,590.18|10,268,808.84|
|operating activities|||
|Subtotal of cash inflows from operating|||
||652,808,736.18|912,050,491.11|
|activities|||
|Cash paid for goods and services|416,655,530.64|673,264,052.99|
|Net increase of customer lendings|||
|and advances|||
|Net increase of funds deposited in|||
|the central bank and amount due from|||
|banks|||
|Cash for paying claims of the|||
|original insurance contracts|||
|Cash for paying interest, handling|||
|charges and commissions|||
|Cash for paying policy dividends|||
|Cash paid to and for employees|101,289,757.17|114,545,148.43|
|Various taxes paid|42,706,274.95|110,521,878.34|
|Other cash payment relating to|||
||45,438,254.80|32,996,160.73|
|operating activities|||
|Subtotal of cash outflows from|||
||606,089,817.56|931,327,240.49|
|operating activities|||
|Net cash flows from operating activities|46,718,918.62|-19,276,749.38|
|II. Cash flows from investing activities:|||
|Cash received from withdrawal of|||
|investments|||
|Cash received from return on|||
||75,504.00||
|investments|||
|Net cash received from disposal of|||
|fixed assets, intangible assets and other|4,021,964.00||
|long-term assets|||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Net cash received from disposal of|||
|subsidiaries or other business units|||
|Other cash received relating to|||
|investing activities|||
|Subtotal of cash inflows from investing|||
||4,097,468.00||
|activities|||
|Cash paid to acquire fixed assets,|||
|intangible assets and other long-term|39,877,320.86|152,808,985.39|
|assets|||
|Cash paid for investment|||
|Net increase of pledged loans|||
|Net cash paid to acquire|||
|subsidiaries and other business units|||
|Other cash payments relating to|||
|investing activities|||
|Subtotal of cash outflows from|||
||39,877,320.86|152,808,985.39|
|investing activities|||
|Net cash flows from investing activities|-35,779,852.86|-152,808,985.39|
|III. Cash Flows from Financing|||
|Activities:|||
|Cash received from capital|||
|contributions|||
|Including: Cash received from|||
|minority shareholder investments by|||
|subsidiaries|||
|Cash received from borrowings||309,340,800.00|
|Cash received from issuance of|||
|bonds|||
|Other cash received relating to|||
||120,800,000.00||
|financing activities|||
|Subtotal of cash inflows from financing|||
||120,800,000.00|309,340,800.00|
|activities|||
|Repayment of borrowings|63,500,000.00|50,500,000.00|
|Cash paid for interest expenses and|||
||28,826,083.17|76,293,126.69|
|distribution of dividends or profit|||
|Including: dividends or profit paid|||
|by subsidiaries to minority shareholders|||
|Other cash payments relating to|9,000,000.00|1,500,000.00|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|financing activities|||
|Sub-total of cash outflows from|||
||101,326,083.17|128,293,126.69|
|financing activities|||
|Net cash flows from financing activities|19,473,916.83|181,047,673.31|
|IV. Effect of foreign exchange rate|||
||1,539,024.13|37,417.10|
|changes on cash and cash equivalents|||
|V. Net increase in cash and cash|||
||31,952,006.72|8,999,355.64|
|equivalents|||
|Add: Opening balance of cash and|||
||406,098,208.72|418,847,736.46|
|cash equivalents|||
|VI. Closing balance of cash and cash|||
||438,050,215.44|427,847,092.10|
|equivalents|||

6. Cash flow statement of the Company
Unit: RMB
||||
|-|-|-|
|Item|Jan.-Jun. 2016|Jan.-Jun 2015|
|I. Cash flows from operating activities:|||
|Cash received from sale of|||
||539,504,213.22|846,655,883.96|
|commodities and rendering of service|||
|Tax refunds received|168,260.60|16,386,842.52|
|Other cash received relating to|||
||5,693,015.46|10,191,599.35|
|operating activities|||
|Subtotal of cash inflows from operating|||
||545,365,489.28|873,234,325.83|
|activities|||
|Cash paid for goods and services|380,402,622.34|592,571,978.73|
|Cash paid to and for employees|97,588,936.88|105,873,091.71|
|Various taxes paid|36,133,647.98|107,107,308.86|
|Other cash payment relating to|||
||40,373,743.83|29,470,327.61|
|operating activities|||
|Subtotal of cash outflows from|||
||554,498,951.03|835,022,706.91|
|operating activities|||
|Net cash flows from operating activities|-9,133,461.75|38,211,618.92|
|II. Cash flows from investing activities:|||
|Cash received from retraction of|||
|investments|||
|Cash received from return on|||
||75,504.00||
|investments|||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Net cash received from disposal of|||
|fixed assets, intangible assets and other|221,964.00||
|long-term assets|||
|Net cash received from disposal of|||
|subsidiaries or other business units|||
|Other cash received relating to|||
|investing activities|||
|Subtotal of cash inflows from investing|||
||297,468.00||
|activities|||
|Cash paid to acquire fixed assets,|||
|intangible assets and other long-term|39,164,697.86|152,808,985.39|
|assets|||
|Cash paid for investment|||
|Net cash paid to acquire|||
|subsidiaries and other business units|||
|Other cash payments relating to|||
|investing activities|||
|Subtotal of cash outflows from|||
||39,164,697.86|152,808,985.39|
|investing activities|||
|Net cash flows from investing activities|-38,867,229.86|-152,808,985.39|
|III. Cash Flows from Financing|||
|Activities:|||
|Cash received from capital|||
|contributions|||
|Cash received from borrowings||291,000,000.00|
|Cash received from issuance of|||
|bonds|||
|Other cash received relating to|||
||120,800,000.00||
|financing activities|||
|Subtotal of cash inflows from financing|||
||120,800,000.00|291,000,000.00|
|activities|||
|Repayment of borrowings|63,500,000.00|50,500,000.00|
|Cash paid for interest expenses|||
||28,826,083.17|76,293,126.69|
|and distribution of dividends or profit|||
|Other cash payments relating to|||
||9,000,000.00|1,500,000.00|
|financing activities|||
|Sub-total of cash outflows from|||
||101,326,083.17|128,293,126.69|
|financing activities|||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Net cash flows from financing activities|19,473,916.83|162,706,873.31|
|IV. Effect of foreign exchange ratechanges on cash and cash equivalents|||
||10,524.28|-278,150.43|
|V. Net increase in cash and cashequivalents|||
||-28,516,250.50|47,831,356.41|
|Add: Opening balance of cash andcash equivalents|||
||378,450,204.94|344,750,284.42|
|VI. Closing balance of cash and cashequivalents|||
||349,933,954.44|392,581,640.83|

7. Consolidated Statement of Changes inOwners’ Equity
January-June 2016
Unit: RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Jan.-Jun. 2016|||||||||||||
||Equity attributable to owners of the Company|||||||||||||
|||Other equity||||||||||||
|||instruments||||||||||||
|Item|||Perpet||||Other|||||Minorit|Total|
|||||||Less:||||General||||
||Share|Prefer|ual||Capital|treasury|compre|Specific|Surplus|risk|Retaine|y|owners’|
||capital||capita||reserve||hensive|reserve|reserve||d profit|interests|equity|
|||red||Other||stock||||reserve||||
||||l||||income|||||||
|||shares||||||||||||
||||securi|||||||||||
||||ties|||||||||||
|I. Balance at the|593,92||||||||||1,026,8||2,097,3|
||||||263,063|||22,848,|190,699|||||
|end of the|3,220.||||||||||47,680.||82,469.|
||||||,461.97|||859.15|,248.11|||||
|previous year|00||||||||||37||60|
|Add: change of||||||||||||||
|accounting policy||||||||||||||
|Correction of||||||||||||||
|errors in previous||||||||||||||
|periods||||||||||||||
|Business||||||||||||||
|combination under||||||||||||||
|the same control||||||||||||||
|Other||||||||||||||
||593,92||||||||||1,026,8||2,097,3|
|II. Balance at the|||||263,063|||22,848,|190,699|||||
||3,220.||||||||||47,680.||82,469.|
|period-begin|||||,461.97|||859.15|,248.11|||||
||00||||||||||37||60|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||
|-|-|-|-|
|III. Increase/||||
|decrease in the|3,246,6|1,959,4|5,206,1|
|period (“-” means|68.97|75.00|43.97|
|decrease)||||
|(I) Total amount||||
|of the||16,807,|16,807,|
|comprehensive||555.50|555.50|
|income||||
|(II) Capital paid||||
|in and reduced by||||
|owners||||
|1. Common shares||||
|invested by the||||
|shareholders||||
|2. Capital invested||||
|by the owners of||||
|other equity||||
|instruments||||
|3. Amounts of||||
|share-based||||
|payments||||
|recognized in||||
|owners’ equity||||
|4. Others||||
|(III) Profit||-14,848,|-14,848,|
|distribution||080.50|080.50|
|1. Appropriations||||
|to surplus reserves||||
|2. Appropriations||||
|to general risk||||
|provisions||||
|3. Appropriations||||
|||-14,848,|-14,848,|
|to owners (or||||
|||080.50|080.50|
|shareholders)||||
|4. Other||||
|(IV) Internal||||
|carry-forward of||||
|owners’ equity||||
|1. New increase of||||
|capital (or share||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|capital) from|||||||
|capital public|||||||
|reserves|||||||
|2. New increase of|||||||
|capital (or share|||||||
|capital) from|||||||
|surplus reserves|||||||
|3. Surplus reserves|||||||
|for making up|||||||
|losses|||||||
|4. Other|||||||
|(V) Specific|||3,246,6|||3,246,6|
|reserve|||68.97|||68.97|
|1. Withdrawn for|||4,403,5|||4,403,5|
|the period|||80.42|||80.42|
|2. Used in the|||1,156,9|||1,156,9|
|period|||11.45|||11.45|
|(VI) Other|||||||
||593,92||||1,028,8|2,102,588,613.57|
|IV. Closing||263,063|26,095,|190,699|||
||3,220.||||07,155.||
|balance||,461.97|528.12|,248.11|||
||00||||37||

 January-June 2015
Unit: RMB
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
||Jan.-Jun. 2015|||||||||||||
||Equity attributable to owners of the Company|||||||||||||
|||Other equity||||||||||||
|||instruments||||||||||||
|||||||||||||Minorit||
|Item|||Perpet||||Other||||||Total|
|||||||Less:||||General||y||
||Share||ual||Capital||compre|Specific|Surplus||Retaine||owners’|
|||Prefer||||treasury||||risk||interest||
||capital||capita||reserve||hensive|reserve|reserve||d profit||equity|
|||red||Other||stock||||reserve||s||
||||l||||income|||||||
|||shares||||||||||||
||||securi|||||||||||
||||ties|||||||||||
|I. Balance at the|593,92||||||||||||2,007,3|
||||||263,184|||15,425,|178,048||957,050|-235,71||
|end of the|3,220.||||||||||||95,433.|
||||||,043.66|||099.43|,385.86||,401.65|6.61||
|previous year|00||||||||||||99|
|Add: change of||||||||||||||
|accounting policy||||||||||||||
|Correction of||||||||||||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|errors in previous||||||||
|periods||||||||
|Business||||||||
|combination under||||||||
|the same control||||||||
|Other||||||||
||593,92||||||2,007,3|
|II. Balance at the||263,184|15,425,|178,048|957,050|-235,71||
||3,220.||||||95,433.|
|period-begin||,043.66|099.43|,385.86|,401.65|6.61||
||00||||||99|
|III. Increase/||||||||
|decrease in the|||5,198,7||58,285,|-33,827|63,450,|
|period (“-” means|||34.41||853.59|.61|760.39|
|decrease)||||||||
|(I) Total amount||||||||
|of the|||||117,678|-33,827|117,644|
|comprehensive|||||,175.59|.61|,347.98|
|income||||||||
|(II) Capital paid||||||||
|in and reduced by||||||||
|owners||||||||
|1. Common shares||||||||
|invested by the||||||||
|shareholders||||||||
|2. Capital invested||||||||
|by the owners of||||||||
|other equity||||||||
|instruments||||||||
|3. Amounts of||||||||
|share-based||||||||
|payments||||||||
|recognized in||||||||
|owners’ equity||||||||
|4. Others||||||||
|(III) Profit|||||-59,392,||-59,392,|
|distribution|||||322.00||322.00|
|1. Appropriations||||||||
|to surplus reserves||||||||
|2. Appropriations||||||||
|to general risk||||||||
|provisions||||||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|3. Appropriations||||||||
||||||-59,392,||-59,392,|
|to owners (or||||||||
||||||322.00||322.00|
|shareholders)||||||||
|4. Other||||||||
|(IV) Internal||||||||
|carry-forward of||||||||
|owners’ equity||||||||
|1. New increase of||||||||
|capital (or share||||||||
|capital) from||||||||
|capital public||||||||
|reserves||||||||
|2. New increase of||||||||
|capital (or share||||||||
|capital) from||||||||
|surplus reserves||||||||
|3. Surplus reserves||||||||
|for making up||||||||
|losses||||||||
|4. Other||||||||
|(V) Specific|||5,198,7||||5,198,7|
|reserve|||34.41||||34.41|
|1. Withdrawn for|||5,396,8||||5,396,8|
|the period|||47.50||||47.50|
|2. Used in the|||198,113||||198,113|
|period|||.09||||.09|
|(VI) Other||||||||
||593,92||||1,015,3||2,070,8|
|IV. Closing||263,184|20,623,|178,048||-269,54||
||3,220.||||36,255.||46,194.|
|balance||,043.66|833.84|,385.86||4.22||
||00||||24||38|

 8. Statement of changes inowners’ equity of the Company
January-June 2016
Unit: RMB
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||Jan.-Jun. 2016|||||||||||
|||Other equity instruments|||||Other|||||
|||||||Less:|||||Total|
|Item|Share||Perpetu||Capital||comprehe|Specific|Surplus|Retaine||
|||Preferre||||treasury|||||owners’|
||capital||al|Other|reserve||nsive|reserve|reserve|d profit||
|||d shares||||stock|||||equity|
||||capital||||income|||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|||securiti||||||
|||es||||||
|I. Balance at the||||||1,052,3||
||593,923,||263,799,8|17,879,74|190,699,2||2,118,653|
|end of the previous||||||51,622.||
||220.00||37.18|6.84|48.11||,674.57|
|year||||||44||
|Add: change of||||||||
|accounting policy||||||||
|Correction of||||||||
|errors in previous||||||||
|periods||||||||
|Other||||||||
|||||||1,052,3||
|II. Balance at the|593,923,||263,799,8|17,879,74|190,699,2||2,118,653|
|||||||51,622.||
|period-begin|220.00||37.18|6.84|48.11||,674.57|
|||||||44||
|III. Increase/||||||||
|decrease in the||||3,246,668||-3,499,7|-253,081.|
|period (“-” means||||.97||49.98|01|
|decrease)||||||||
|(I) Total amount||||||||
|of the||||||11,348,|11,348,33|
|comprehensive||||||330.52|0.52|
|income||||||||
|(II) Capital paid||||||||
|in and reduced by||||||||
|owners||||||||
|1. Common shares||||||||
|invested by the||||||||
|shareholders||||||||
|2. Capital invested||||||||
|by the owners of||||||||
|other equity||||||||
|instruments||||||||
|3. Amounts of||||||||
|share-based||||||||
|payments||||||||
|recognized in||||||||
|owners’ equity||||||||
|4. Others||||||||
|(III) Profit||||||-14,848,|-14,848,0|
|distribution||||||080.50|80.50|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|1. Appropriations|||||||
|to surplus reserves|||||||
|2. Appropriations|||||||
||||||-14,848,|-14,848,0|
|to general risk|||||||
||||||080.50|80.50|
|provisions|||||||
|3. Appropriations|||||||
|to owners (or|||||||
|shareholders)|||||||
|4. Other|||||||
|(IV) Internal|||||||
|carry-forward of|||||||
|owners’ equity|||||||
|1. New increase of|||||||
|capital (or share|||||||
|capital) from|||||||
|capital public|||||||
|reserves|||||||
|2. New increase of|||||||
|capital (or share|||||||
|capital) from|||||||
|surplus reserves|||||||
|3. Surplus reserves|||||||
|for making up|||||||
|losses|||||||
||||3,246,668|||3,246,668|
|4. Other|||||||
||||.97|||.97|
|(V) Specific|||4,403,580|||4,403,580|
|reserve|||.42|||.42|
|1. Withdrawn for|||1,156,911|||1,156,911|
|the period|||.45|||.45|
|2. Used in the|||||||
|period|||||||
||||||1,048,8|2,118,400,593.56|
||593,923,|263,799,8|21,126,41|190,699,2|||
|(VI) Other|||||51,872.||
||220.00|37.18|5.81|48.11|||
||||||46||

January-June 2015
Unit: RMB
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Jan.-Jun. 2015|||||||||
|Item||||||||||
||Share|Other equity instruments|Capital|Less:|Other|Specific|Surplus|Retaine|Total|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|
||capital||Perpetu||reserve|treasury|comprehe|reserve|reserve|d profit|owners’|
||||al|||stock|nsive||||equity|
|||Preferre||||||||||
||||capital|Other|||income|||||
|||d shares||||||||||
||||securiti|||||||||
||||es|||||||||
|I. Balance at the||||||||||||
||593,923,||||263,799,8|||10,455,98|178,048,3|997,886|2,044,113|
|end of the previous||||||||||||
||220.00||||37.18|||7.12|85.86|,184.22|,614.38|
|year||||||||||||
|Add: change of||||||||||||
|accounting policy||||||||||||
|Correction of||||||||||||
|errors in previous||||||||||||
|periods||||||||||||
|Other||||||||||||
|II. Balance at the|593,923,||||263,799,8|||10,455,98|178,048,3|997,886|2,044,113|
|period-begin|220.00||||37.18|||7.12|85.86|,184.22|,614.38|
|III. Increase/||||||||||||
|decrease in the||||||||5,198,734||62,009,|67,208,50|
|period (“-” means||||||||.41||771.67|6.08|
|decrease)||||||||||||
|(I) Total amount||||||||||||
|of the||||||||||121,402|121,402,0|
|comprehensive||||||||||,093.67|93.67|
|income||||||||||||
|(II) Capital paid||||||||||||
|in and reduced by||||||||||||
|owners||||||||||||
|1. Common shares||||||||||||
|invested by the||||||||||||
|shareholders||||||||||||
|2. Capital invested||||||||||||
|by the owners of||||||||||||
|other equity||||||||||||
|instruments||||||||||||
|3. Amounts of||||||||||||
|share-based||||||||||||
|payments||||||||||||
|recognized in||||||||||||
|owners’ equity||||||||||||
|4. Others||||||||||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|(III) Profit|||||-59,392,|-59,392,3|
|distribution|||||322.00|22.00|
|1. Appropriations|||||||
|to surplus reserves|||||||
|2. Appropriations|||||||
||||||-59,392,|-59,392,3|
|to general risk|||||||
||||||322.00|22.00|
|provisions|||||||
|3. Appropriations|||||||
|to owners (or|||||||
|shareholders)|||||||
|4. Other|||||||
|(IV) Internal|||||||
|carry-forward of|||||||
|owners’ equity|||||||
|1. New increase of|||||||
|capital (or share|||||||
|capital) from|||||||
|capital public|||||||
|reserves|||||||
|2. New increase of|||||||
|capital (or share|||||||
|capital) from|||||||
|surplus reserves|||||||
|3. Surplus reserves|||||||
|for making up|||||||
|losses|||||||
||||5,198,734|||5,198,734|
|4. Other|||||||
||||.41|||.41|
|(V) Specific|||5,396,847|||5,396,847|
|reserve|||.50|||.50|
|1. Withdrawn for|||198,113.0|||198,113.0|
|the period|||9|||9|
|2. Used in the|||||||
|period|||||||
||||||1,059,8||
||593,923,|263,799,8|15,654,72|178,048,3||2,111,322|
|(VI) Other|||||95,955.||
||220.00|37.18|1.53|85.86||,120.46|
||||||89||

III. Company profile
Hubei Sanonda Co., Ltd. (hereinafter referred to as “Company” or “the Company”) is formerly known as Hubei Sha City Pesticides
Factory, a state-run enterprise set up in 1958. As approved by the Hubei Commission for Economic System Reformation and other
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 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 September 1992, upon the said reorganization, the Company was formally established. Later, as approved by the People's Government of Hubei Province and the China Securities Regulatory Commission (“CSRC”), the Company issued 30,000,000 RMB-denominated ordinary shares (“A shares”) to the public in November 1993. And the total share capital of the Company was 104,933,900 shares after the public offering. The Sha City Bureau for State-owned Assets Supervision and Administration is the first majority shareholder of the Company, with a capital contribution of RMB57,467,900, accounting for54.77% of theCompany’s total share capital. On 3 December 1993, shares of the Company were listed in the Shenzhen Stock Exchange.
In April 1994, a dividend distribution plan was reviewed and approved at the 1993 AnnualShareholders’ General Meeting. RMB2.00 was distributed in cash for every 10 shares held by the state and two bonus shares for every 10 shares held by individuals. The bonus shares were listed in 3 May 1994. And 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.
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 August 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 November 1996, as approved by the “Document Zheng-Jian-Shang-Zi[1996] No.13” issued by CSRC, the Company carried out the share allotment plan (three shares being allotted for every ten shares) for the year 1996. A total of 41,991,100 shares of the Company were allotted, of which 19,552,900 shares were allotted for state-held shares and 22,438,200 shares for individual-held shares. After the said share allotment, 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 April to 5 May 1997, as approved by the “Zheng-Fa (1997) No.23 Document” issued by the Securities Commission under the State Council, the Company issued 0.1 billion domestically-listed foreign shares (B shares) of RMB1.00 par value, which were listed in the Shenzhen Stock Exchange for trading on 15 May 1997. And the Company exercised the over-allotment options of 15 million shares from 15 May to 21 May in the same year. After issuance of the said B shares, theCompany’s total number of shares rose to 296,961,600 shares, and the shareholding ratio of Sanonda Group-theCompany’s first majority shareholder-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 December 2004. After the said transfer, Sanonda Group became a wholly-owned subsidiary under China National Agrochemical Corporation.
In 2006, pursuant to the “Guo-Zi-Chan-Quan[2006] No.767 Reply of State-owned Assets Supervision and Administration Commission under the State Council on Affairs Related to Share Reform of Hubei Sanonda Co., Ltd.”, the “Share Reform Plan of Hubei Sanonda Co., Ltd.” was reviewed and approved at theshareholders’ general meeting held on 8 Jul. 2006. And the share reform was completed in Aug. 2006. With the base of 296,961,600 tradable shares, 2.2 shares were paid to tradable A-share holders by non-tradable share holders as consideration for every 10 tradable A-shares, with the total number of shares paid by non-tradable share holders to tradable share holders reaching 21,391,100,000 shares. After the share reform, the total number of theCompany’s shares remained unchanged, of which Sanonda Group held 61093,600 shares, accounting for20.57% of theCompany’s total shares. In November 2006 and March 2007, due to a dispute case concerning the provision of a loan guarantee by theCompany’s first
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. majority shareholder-Sanonda Group-for an other company, 1.25 million and 0.40 million state-owned corporate shares of the Company held by Sanonda Group were forcibly transferred and auctioned by the court. After the auctions, shares of the Company held by Sanonda Group were reduced to 59,443,600 shares, accounting 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 majority shareholder-Sanonda Group-held 118,887,200 shares, which accounting for20.02% of theCompany’s total shares. And for the period up to 30 June 2012, the share capital of the Company remained unchanged.
On 16 November 2012, Sanonda Group Co., Ltd. acquired 800,000 shares of the Company held by the to-be-cancelled subsidiary-Jingzhou Sanonda Advertising Co., Ltd. through the block trading market, then it held a total of 119,687,200 shares of the Company, accounting for20.15% of theCompany’s total share capital, and up to 31 December 2013, the share capital of the Company remained unchanged. On 8 April 2014, Sanonda Group renamed as Jingzhou Sanonda Shareholding Co., Ltd.
As at the balance sheet date, Legal representative of the Company: An Liru; business license registration number 420000400004491; registered address: No.93, Beijing East Road, Jingzhou, Hubei Province, PRC; Stock abbreviation: Sanonda A/Sanonda B; and Stock code: 000553/200553.
The main pesticide products of the Company and its subsidiaries (were called by a joint name as “the Company”) are triazophos, methomyl, paraquate, DDVP, orthene, glyphosate, trichlorphon, imidacloprid; chemical products such as liquid caustic soda, ionic membrane caustic soda, spermine, pmida, pyridine, trimethyl and hydrochloric acid. The Company has the rights of handling import and export business. And the Company has passed ISO9002 Quality System Certification and ISO14001 Environment Management System Certification.
The parent company of the Company is Jingzhou Sanonda Holdings Co., Ltd. and the ultimate control party is China National Chemical Corporation.
The financial statements for the six months ended 30 June 2016 have been authorized for issue by a resolution made by the Board of Directors of the Company on 17 August 2016.
There was 3 subsidiaries included in the consolidated scope at the month-end of July in 2016 while the consolidated scops of the Company remained unchanged over the last period during the Reporting Period.
IV. Basis for the preparation of financial statements
1. Basis for the preparation
With the going-concern assumption as the basis and based on transactions and other events that actually occurred, the Company prepared financial statements in accordance with the ASBE-Basic Standard (No. 33 issued decreed by Ministry of Finance and No. 76 revised decreed by Ministry of Finance), the 41 specific standards of Accounting Standards for Business Enterprises issued by Ministry of Finance of the PRC on 15 Feb 2006 and revised thereafter, Application Guidance of Accounting Standard for Business Enterprises, Interpretation of Accounting Standards for Business Enterprises and other regulations(hereinafter referred to as “the Accounting Standards for Business Enterprises”, “China Accounting Standards” or “CAS”), Rules for Preparation Convention of Disclosure of Public Offering Companies No.15– General Regulations for Financial Reporting (revised in 2014) by China Securities Regulatory Commission.
In accordance with relevant provisions of the Accounting Standards for Business Enterprises, the Company adopted the accrual basis in accounting. Except for some financial instruments, where impairment occurred on an asset, an impairment reserve was withdrawn accordingly pursuant to relevant requirements.
2. Continuing operations
There was no any event or situation caused major concerns on the continuing operation ability of the Company within 12 months from the period-end.
V. Significant accounting policies and estimates
Reminder of the specific accounting policies and estimates:
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. Naught
1. Statement of Compliance with the Accounting Standards for Business Enterprises
The financial statements prepared by the Company are in compliance with in compliance with the Accounting Standards for Business Enterprises, which factually and completely present theCompany’s, and theCompany’s financial positions as at 30 June 2016, business results and cash flows for the first half year of 2016, and other relevant information. In addition, theCompany’s and theCompany’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 January and ends on 31 December of every year according to the Gregorian calendar. The fiscal period of Reporting Period was from 1 January to 30 June.
3. Operating cycle
A normal operating cycle refers to a period from the Group purchasing assets for processing to realizing cash or cash equivalents. An operating cycle for the Group is 12 months, which are also the classification criteria for the liquidity of its assets and liabilities. 4. Recording currency
Renminbi is the dominant currency used in the economic circumstances where the Group and its domestic subsidiaries are involved. Therefore, the Group and its domestic subsidiaries use Renminbi as their bookkeeping base currency. And the Group adopted Renminbi as the bookkeeping base currency when preparing the financial statements for the reporting year.
5. Accounting treatment methods for business combinations under the same control or not under the same control
Business combinations, it is refer to two or more separate enterprises merge to form a reporting entity transactions or events. Business combination is divided into under the same control and those non under the same control.
(1) Business combinations under the same control
A business combination under the same control is a business combination in which all of the combining enterprises are ultimately controlled by the same party or the same parties both before and after the business combination and on which the control is not temporary. In a business combination under the same control, the party which obtains control of other combining enterprise(s) on the combining date is the combining party, the other combining enterprise(s) is (are) the combined party. The “combining date” refers to the date on which the combining party actually obtains control on the combined party.
The assets and liabilities that the combining party obtains in a business combination shall be measured on the basis of their carrying amount in the combined party on the combining date. As for the balance between the carrying amount of the net assets obtained by the combining party and the carrying amount of the consideration paid by it (or the total par value of the shares issued), the additional
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. paid-in capital (share premium) shall be adjusted. If the additional paid-in capital (share premium) is not sufficient to be offset, the retained earnings shall be adjusted.
The direct cost for the business combination of the combining party shall be recorded into the profits and losses at the current period. (2) Business combinations not under the same control
A business combination not under the same control is a business combination in which the combining enterprises are not ultimately controlled by the same party or the same parties both before and after the business combination. In a business combination not under the same control, the party which obtains the control on other combining enterprise(s) on the purchase date is the acquirer, and other combining enterprise(s) is (are) the acquiree.
For a business combination not under the same control, the combination costs shall include the fair values, on the acquisition date, of the assets paid, the liabilities incurred or assumed and the equity securities issued by the acquirer in exchange for the control on the acquiree, the expenses for audit, legal services and assessment, and other administrative expenses, which are recorded into the profits and losses in the current period. The trading expenses for the equity securities or debt securities issued by the acquirer as the combination consideration shall be recorded into the amount of initial measurement of the equity securities or debt securities. The involved contingent consideration shall be recorded into the combination costs at its fair value on the acquiring date. Where new or further evidences emerge, within 12 months since the acquiring date, against the existing circumstances on the acquiring date and the contingent consideration thus needs to be adjusted, the combined goodwill shall be adjusted accordingly. The combination costs of the acquirer and the identifiable net assets obtained by it in the combination shall be measured according to their fair values at the acquiring date. The acquirer shall recognize the positive balance between the combination costs and the fair value of the identifiable net assets it obtains from the acquiree as business reputation. Where the combination costs are less then the fair value of the identifiable net assets it obtains from the acquiree, the acquirer shall re-examine the measurement of the fair values of the identifiable assets, liabilities and contingent liabilities it obtains from the acquiree as well as the combination costs. If, after the reexamination, the combination costs are still less than the fair value of the identifiable net assets it obtains from the acquiree, the acquirer shall record the balance into the profits and losses of the current period.
As for the deductible temporary differences the acquirer obtains from the acquiree which are not recognized into deferred income tax liabilities due to their not meeting the recognition standards, if new or further information shows that the relevant situation has existed on the acquiring date and the economic benefits brought by the deductible temporary differences the acquirer obtains from the acquiree on the acquiring date can be realized, they shall be recognized into deferred income tax assets and the relevant goodwill shall be reduced. Where the goodwill is not sufficient to be offset, the difference shall be recognized into the profits and losses in the current period. In other circumstances than the above, where the deductible temporary differences are recognized into deferred income tax assets on the acquiring date, they shall be recorded into the profits and losses in the current period.
In a business combination not under same control realized by two or more transactions of exchange, according to about the 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 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
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. the net liabilities or assets with a defined benefit plan measured at the equity method arising from 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.
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.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. Where the Group losses control on its original subsidiaries due to disposal of some equity investments or other reasons, the residual equity interests are re-measured according to the fair value on the date when such control ceases. The summation of the consideration obtained from the disposal of equity interests and the fair value of the residual equity interests, minus the portion in the 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 the “long term equity investment” or “financial instruments” of this note.
Where the Group losses control on its original subsidiaries due to step by step disposal of equity investments through multiple transactions, it need to distinguish the Group losses control on its subsidiaries due to disposal of equity investments whether belongs to a package deal. All the transaction terms, conditions and economic impact of the disposal 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.① These deals are at the same time or under the condition of considering the influence of each other to concluded;② These transactions only be as a whole can achieve a complete business result;③ The occurrence of a deal depends on at least one other transactions;④ A deal alone is not economical, it is economical with other trading together. Those not belong to a package deal, each of them a deal depends on circumstances respectively conduct accounting treatment in accordance with the applicable principles of “part disposal of subsidiaries of a long-term equity investment under the condition of not losing control on its subsidiaries” and “Where the Group losses control on its original subsidiaries due to disposal of some equity investments or other reasons” (See the front paragraph) relevant transactions of the Group losses control on its subsidiaries due to disposal of equity investments belonging to a package deal, considered as a transaction and conduct accounting treatment. However, Before losing control, every disposal cost and corresponding net assets balance of subsidiary of disposal investment are confirmed as other comprehensive income in consolidated financial statements, which together transferred into the current profits and losses in the loss of control , when the Group losing control on its subsidiary.
7. Classification of joint arrangements and accounting treatment of joint operations
A joint arrangement refers to an arrangement jointly controlled by two participants or above. The Group classifies joint arrangements into joint operations and joint ventures according to its rights and duties in the joint arrangements. A joint operation refers to a joint arrangement where the Group enjoys assets and has to bear liabilities related to the arrangement. A joint venture refers to a joint arrangement where the Group is only entitled to the net assets of the arrangement.
TheGroup’s investments in joint ventures are measured at the equity method according to the accounting policies mentioned in “Long-term equity investments measured at the equity method” of this note.
For a joint operation, the Group, as a joint operator, recognizes the assets and liabilities that it holds and bears in the joint operation, and recognizes the jointly-held assets and jointly-borne liabilities according to theGroup’s stake in the joint operation; recognizes the income from sale of theGroup’s share in the output of the joint operation; recognizes the income from sale of the jointoperation’s outputs according 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 constituting business, the same below) to the joint operation, or purchases assets from the joint operation, before the assets are sold to a third party, the Group only recognizes the share
of the other joint operators in the gains and losses arising from the sale. Where impairment occurs to the assets as prescribed in<The
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 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 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
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. rate at the time when they are incurred. The income and expense items in the profit statements shall be translated at the spot exchange rate of the transaction date. The undistributed profits at year-begin is the undistributed profits at the end of last year after the translation; undistributed profits at year-end shall be listed as various distribution items after the translation; after the translation, the balance between assets and the sum of liabilities 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 liabilities are included in the amounts initially recognized.
(1) Determination of the fair value of main financial assets and financial liabilities
Fair value refers to the price that a market participant shall receive for selling an asset or shall pay for transferring a liability in an orderly transaction on the measurement date. As for the financial assets or financial liabilities for which there is an active market, the quoted prices in the active market shall be used to determine the fair values thereof. The quoted prices in the active market refers to the prices available from stock exchange,broker’s agencies, guilds, pricing organization and etc., which represent the actual trading price under equal transaction. Where there is no active market for a financial instrument, the enterprise concerned shall adopt value appraisal techniques, including the prices adopted by the parties, who are familiar with the condition, in the latest market transaction upon their own free will, the current fair value obtained by referring to other financial instruments of the same essential nature, the cash flow capitalization method and the option pricing model, etc., to determine its fair value.
(2) Classification, recognition and measurement of financial assets
The purchase and sale of financial assets under the normal ways shall be recognized and stopped to be recognized respectively at the price of transaction date. Financial assets shall be classified into the following four categories when they are initially recognized: (a) the financial assets which are measured at their fair values and the variation of which is recorded into the profits and losses of the current period, (b) the investments which will be held to their maturity; (c) loans and the account receivables; and (d) financial assets available for sale.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.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 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
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. interest method. Gains or loss arising from the termination recognition, impairment occurs or amortization shall be recorded into the profits and losses of the current period.
④ Assets available for sales
Assets available for sales including non-derivative financial asset that has been assigned as assets available for sales on the initial recognition and financial assets excluded those measured at fair value and of which the variation into profits and losses of the current period, they are some financial assets, loans and accounts receivables, held-to-maturity investment.
The cost at the period-end of the available-for-sale liabilities instruments should be confirmed according to its amortized cost method, that is the initially recognized amount which deduct the principal that had been repaid, to plus or minus the accumulative amortization amount formed by the amortization between the difference of the initially recognized amount and the amount on the due date that adopted the actual interest rate method, and at the same time deduct the amount after the impairment loss happened. The cost at the period-end of the available-for-sale liabilities instruments is its initial cost.
Financial assets available-for-trade are subsequently measured at fair value, and gains or losses arising from changes in the fair value are recognized as other comprehensive income, and be carried forward when the said financial assets stopped recognition, then it shall be recorded into the profits and losses of the current period. But, the equity instrument investment which neither have quotation in the active market nor its fair value could not be reliable measured, as well as the derivative financial assets that concern with the equity instruments and should be settled through handing over to its equity instruments, should take the follow-up measurement according to the cost.
Interest receive during the holding of assets available for sales and cash dividends with distribution announcement by invested companies, it shall be recorded into the profits and losses of the current period.
(3) Impairment of financial assets
The Group assesses at the balance sheet date the carrying amount of every financial asset except for the financial assets that measured by the fair value. If there is objective evidence indicating a financial asset may be impaired, a provision is provided for the impairment.
The Group carries out a separate impairment test for every financial asset which is individually significant. As for a financial asset which is individually insignificant, an impairment test is carried out separately or in the financial asset group with similar credit risk. Where the financial asset (individually significant or insignificant) is found not impaired after the separate impairment test, it is included in the financial asset group with similar credit risk and tested again on the group basis. Where the impairment loss is recognized for an individual financial asset, it is not included in the financial asset group with similar credit risk for an impairment test.
① Impairment on held-to maturity investment, loans and receivables
The financial assets measured by cost or amortized cost write down their carrying value by the estimated present value of future cash flow. The difference is recorded as impairment loss. If there is objective evidence to indicate the recovery of value of financial assets after impairment, and it is related with subsequent event after recognition of loss, the impairment loss recorded originally can be reversed. The carrying value of financial assets after impairment loss reversed shall not exceed the amortized cost of the financial assets without provisions of impairment loss on the reserving date.
② Impairment of available-for-sale financial assets
When it judged that the decrease of fair value of the available-for-sale equity instrument investment is serious and not temporarily after comprehensive considering relevant factors, it reflected that the available-for-sale equity instrument investment occurred impairment. Of which, the “serious decline” refers to the accumulative decline range of the fair value over20%; while the “non-temporary decline” refers to the consecutive decline time of the fair value over 12 months.
Where an available-for-sale financial asset is impaired, the accumulative losses arising from the decrease of the fair value of the capital reserve which is directly included are transferred out and recorded in the profits and losses for the current period. The accumulative losses transferred out are the balance obtained from the initially obtained cost of the said financial asset after deducting
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 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 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.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.① Financial liabilities measured at fair values and whose changes are recorded in current gains and losses
Such financial liabilities are divided into transactional financial liabilities and financial liabilities designated to be measured at fair values and whose changes are recorded in current gains and losses in the initial recognition under the same conditions where such financial assets are divided into transactional financial assets and financial assets designated to be measured at fair values and whose changes are recorded in current gains and losses in the initial recognition.
Financial liabilities measured at fair values and whose changes are recorded in current gains and losses are subsequently measured at their fair values. Gains or losses arising from the fair value changes, as well as the dividend and interest expenses in relation to the said financial liabilities, are recorded in the profits and losses for the current period.
② Other financial liabilities
As for a derivative financial liability connected to an equity instrument for which there is not quoted price in an active market and whose fair value cannot be reliably measured and which must be settled by delivering the equity instrument, it is subsequently measured on the basis of costs. Other financial liabilities are subsequently measured according to the amortized cost using the actual interest rate method. Gains or losses arising from de-recognition or amortization of the said financial liabilities is recorded in the profits and losses for the current period.
③ Financial guarantee contract and loan commitment
For the financial guarantee contracts which are not designated as a financial liability measured at its fair value and the variation thereof is recorded into the profits and losses of the current period, or the loan commitment which is not designated as a financial liability measured at its fair value and the variation thereof is recorded into the gains and losses that will be loaned lower than the market interest rate, which shall be initially recognized by fair value, and the subsequent measurement shall be made after they are initially recognized according to the higher one of the following: a. the amount as determined according to the Accounting Standards for Enterprises No. 13– Contingencies; b. the surplus after accumulative amortization as determined according to the principles of the Accounting Standards for Enterprises No. 14 - Revenues is subtracted from the initially recognized amount. (6) De-recognition of financial liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of the financial liability be terminated in all or partly. Where the Group (debtor) enters into an agreement with a creditor so as to substitute the existing financial liabilities by way of any new financial liability, and if the contractual stipulations regarding the new financial liability is substantially different from that regarding the existing financial liability, it terminates the recognition of the existing financial liability, and at the same time recognizes the new financial liability.
Where the recognition of a financial liability is totally or partially terminated, the enterprise concerned shall include into the profits and losses of the current period for the gap between the book value which has been terminated from recognition and the considerations it has paid (including the non-cash assets it has transferred out and the new financial liabilities it has assumed) (7) Derivatives and embedded derivatives
Derivative financial instruments include derivatives are initially measured at fair value at the date when the derivative contracts are entered into and are substantially re-measured at fair value. The resulting gain and loss is recognized in profit or loss.
An embedded derivative is separated from the hybrid instrument, where the hybrid instrument is not designated as a financial asset or financial liability at fair value though profit or loss, and the treated as a standalone derivative if (a) the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristics and risks of the host contract; and (b) a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative. If the Company is unable to measure the embedded derivative separately either at acquisition or at a subsequent balance sheet date, it designates the entire hybrid instrument as a financial asset or financial liability at fair value through profit or loss.
(8) Offsetting financial assets and financial liabilities
When the Group has a legal right that is currently enforceable to set off the recognized financial assets and financial liabilities, and
intends either to settle on a net basis, or to realize the financial asset and settle the financial liability simultaneously, a financial asset
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 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 RMB5 million or more than|
|Judgment basis or monetary standards of provision for bad debts||
||RMB5 million should recognize as the receivables with|
|of the individually significant accounts receivable||
||significant single amount.|
||The Company made an independent impairment test on|
||receivables with significant single amounts; the financial assets|
||without impairment by independent impairment test should be|
|Method of individual provision for bad debts of the individually||
||included in financial assets portfolio with similar credit risk to|
|significant accounts receivable||
||take the impairment test. Receivables was recognized with|
||impairment should no longer be included in receivables portfolio|
||with similar credit risk to take the impairment test.|

(2) Accounts receivable which the bad debt provision is withdrawn by credit risk characteristics
|||
|-|-|
|Name of portfolios|Bad debt provision method|
|Related party portfolios|Other method|
|Risk-free portfolios|Other method|
|Age portfolios|Aging analysis|

In the groups, adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
||||
|-|-|-|
||Withdrawal proportion for accounts|Withdrawal proportion for other accounts|
|Age|||
||receivable (%)|receivable (%)|
|Within 1 year (including 1 year)|5.00%|5.00%|
|1-2 years|10.00%|10.00%|
|2-3 years|30.00%|30.00%|
|3-4 years|50.00%|50.00%|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|4-5 years|50.00%|50.00%|
|Over 5 years|100.00%|100.00%|

 In the groups, adopting balance percentage method to withdraw bad debt provision:
□ Applicable√ Not applicable
In the groups, adopting other methods to withdraw bad debt provision:
□ Applicable√ Not applicable
(3) Accounts receivable with an insignificant single amount but for which the bad debt provision is made individually
|||
|-|-|
||The Group made independent impairment test on receivables|
||with insignificant amount but with the following characteristics|
||(for example: receivables have dispute with the other parties or|
|Reason of individually withdrawing bad debt provision||
||involving lawsuit and arbitration; receivables have obvious|
||indication showing that the debtors are likely to fail to perform|
||the duty of repayment, etc.).|
||The Group made independent impairment test on receivables|
||with insignificant amount but with the following characteristics,|
||if any objective evidence shows that the accounts receivable has|
||been impaired, impairment loss shall be recognized on the basis|
||of the gap between the current values of the future cash flow|
|Withdrawal method for bad debt provision||
||lower than its book value so as to withdraw provision for bad|
||debts (for example: receivables have dispute with the other|
||parties or involving lawsuit and arbitration; receivables have|
||obvious indication showing that the debtors are likely to fail to|
||perform the duty of repayment, etc.).|

12. Inventory
(1) Classification
Inventories mainly include raw materials, work-in-progress and self-made semi-manufactured goods, revolving materials, finished products as well as stock products etc.
(2) Valuation method of inventories acquiring and issuing
The inventories should be measured by the actual cost when acquired, and the cost of the inventories including the procurement cost, processing cost and other cost. Bulk chemical raw materials, work-in-progress goods and finished products should be measured by the actual cost and should carry forward the cost by weighted average method when issuing; auxiliary materials, packing materials should be measured by actual cost and adopt the planned cost for accounting as well as included the difference between the actual cost and the planned cost into the material cost variance and according the material cost variance rate, work out the material cost variance which should be shared at the end of the month, and to adjust the planned cost that had issued the materials as the actual cost; low priced and easily worn articles should be recorded by actual cost and should adopt the one-time amortization method for
accounting when consuming.
(3) Basis for determining net realizable value of inventories and provision methods for decline in value of inventories
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 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 accounting policies to “financial instrument” of this note.
Joint control, refers to the control jointly owned according to the relevant agreement on an arrangement by the Group and the relevant activities of the arrangement should be decided only after the participants which share the control right make consensus.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 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 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
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. shall also be recorded into investment cost. The long-term equity investment cost for those could execute significant influences on the investees because of appending the investment or could execute joint control but not form as control, should be as the sum of the fair value of the original held equity investment and the newly added investment cost recognized according to the No.22 of Accounting Standards for 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.② Long-term equity investment measured by adopting equity method
If the initial cost of a long-term equity investment is more than the Company's attributable share of the fair value of the invested entity's identifiable net assets for the investment, the initial cost of the long-term equity investment may not be adjusted. If the initial cost of a long-term equity investment is less than the Company's attributable share of the fair value of the invested entity's identifiable net assets for the investment, the difference shall be included in the current profits and losses and the cost of the long-term equity investment shall be adjusted simultaneously.
When measured by adopting equity method, respectively recognize investment income and other comprehensive income according to the net gains and losses as well as the portion of other comprehensive income which should be enjoyed or be shared, and at the same time adjust the book value of the long-term equity investment; corresponding reduce the book value of the long-term equity investment according to profits which be declared to distribute by the investees or the portion of the calculation of cash dividends which should be enjoyed; for the other changes except for the net gains and losses, other comprehensive income and 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 policies adopted by the investees are not accord with that of the Group, should be adjusted according to the accounting policies of the Group and the financial statement of the investees during the accounting period and according which to recognize the investment income as well as other comprehensive income. For the transaction happened between the Group and associated enterprises as well as joint ventures, if the assets launched or sold not form into business, the portion of the unrealized gains and losses of the internal transaction, which belongs to the Group according to the calculation of the enjoyed proportion, should recognize the investment gains and losses on the basis. But the losses of the unrealized internal transaction happened between the Group and the investees which belongs to the impairment losses of the transferred assets, should not be neutralized. The assets launched by the Group to the associated enterprises or the joint ventures if could form into business, the long-term equity investment without control right which acquired by the investors, should regard the fair value of the launched business as the initial investment cost the newly added long-term equity investment, and for the difference between the initial investment cost and the book value of the launched business, should be included into the current gains and losses with full amount. The assets sold by the Group to the associated enterprises or the joint ventures if could form into business, the difference between the acquired consideration and the book value of the business should be included in the current gains and losses with full amount. The assets purchased by the Group to the associated enterprises or the joint ventures if could form into business, should be accounting disposed according to the regulations of No. 20 ofASBE—Business Combination, and should be recognized gains or losses related to the transaction with full amount.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 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 Method on preparation of combined financial statements of this note.
For other ways on disposal of long-term equity investment, the balance between the book value of the disposed equity and its actual payment gained shall be recorded into current profits and losses.
For the long-term equity investment measured by adopting equity method, if the remained equity after disposal still adopts the equity method for measurement, the other comprehensive income originally recorded 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 the current gains and losses. For the other comprehensive income recognized by adopting equity method for measurement or the recognition and measurement standards of financial instrument before the Group acquired the control of the investees, should execute
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 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 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
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. assets at the date of such change. When an owner-occupied real estate is changed to be held to earn rental or for capital appreciation, the fixed asset or intangible asset is transferred to investment real estate at the date of such change. If the fixed asset or intangible asset is changed into investment real estate measured by adopting the cost pattern, whose book value prior to the change shall be the entry value after the change; if the fixed asset or intangible asset is changed into investment real estate measured by adopting the fair value pattern, whose fair value on the date of such change shall be the entry value after the change
An investment real estate is derecognized on disposal or when the investment real estate is permanently withdrawn from use and no future economic benefits are expected from its disposal. The amount of proceeds on sale, transfer, retirement or damage of an investment real estate less its carrying amount and related taxes and expenses is recognized in profit or loss in the period in which it is incurred.
16. Fixed assets
(1) Conditions for recognition
The term “fixed assets” refers to the tangible assets that simultaneously possess the features as follows: (a) they are held for the sake of producing commodities, rendering labor service, renting or business management; and (b) their useful life is in excess of one fiscal year. The fixed assets are only recognized when the relevant economic benefits probably flow in the Group and its cost could be reliable measured. The fixed assets should take the initial measurement according to the cost and at the same time consider the influences of the factors of the estimated discard expenses.
(2) Depreciation methods
||||||
|-|-|-|-|-|
||||Expected net salvage||
|Category of fixed assets|Method|Useful life||Annual deprecation|
||||value||
||Average method of||||
|Housing and building||15-24|2%-4%|4%--6.53%|
||useful life||||
||Average method of||||
|Machinery equipment||3-15|2%-4%|6.4%--32.67%|
||useful life||||
||Average method of||||
|Electronic equipment||9-18|4.00%|5.33%--10.67%|
||useful life||||
|Transportation|Average method of||||
|||9|2.00%|10.89%|
|equipment|useful life||||

(3) Recognition basis, pricing and depreciation method of fixed assets by finance lease
The "finance lease" shall refer to a lease that has transferred in substance all the risks and rewards related to the ownership of an asset. Its ownership may or may not eventually be transferred. The fixed assets by finance lease shall adopt the same depreciation policy for self-owned fixed assets. If it is reasonable to be certain that the lessee will obtain the ownership of the leased asset when the lease term expires, the leased asset shall be fully depreciated over its useful life. If it is not reasonable to be certain that the lessee will obtain the ownership of the leased asset at the expiry of the lease term, the leased asset shall be fully depreciated over the shorter one
of the lease term or its useful life.
2016 Semi-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
2016 Semi-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 policies of internal R& D expenses
The expenditures for internal research and development projects of an enterprise shall be classified into research expenditures and development expenditures.
The research expenditures shall be recorded into the profit or loss for the current period.
The development expenditures shall be confirmed as intangible assets when they satisfy the following conditions simultaneously, and shall be recorded into profit or loss for the current period when 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
2016 Semi-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.
2016 Semi-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
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. required such as the changes of the vestingstaffs’ number to modify the number of the estimated vesting equity instrument. The above influences of the estimation should be included into the current relevant cost or expenses and correspondingly adjust the capital surplus.
For equity-settled share-based payment made in return of other parties' services and the fair value of the other parties' services can be reliably measured, it will be measured based on the fair value of the other parties' services on the date of grant; if the fair value of the other parties' services cannot be reliably measured but the fair value of equity instruments can be reliably measured, it will be recognized in relevant costs or expenses and the capital reserves shall be adjusted accordingly at the fair value of such instruments on the date of the grant.
② Cash-settled share-based payment
The cash-settled share-based payment should be measured according to the fair value of the liabilities recognized based on the shares or other equity instrument undertaken by the Group. For the cash-settled share-based payment made in return for the rendering of employee services that may be exercised immediately after the grant, the fair value of the liability incurred by the Group shall, on the date of the grant, be recognized in relevant costs or expenses and the liabilities shall be increased accordingly. For cash-settled share-based payment made in return for the rendering of employee services that cannot be exercised until the services are fully provided during the vesting period or specified performance targets are met, on each balance sheet date within the vesting period, the services acquired in the current period shall, based on the best estimate of the number of exercisable instruments, be recognized in relevant costs or expenses and the corresponding liabilities at the fair value of the liability incurred by the Group.
On each balance sheet date and the settlement date before the settlement of the relevant liabilities, the Group should re-measure the fair value of the liabilities and its changes should be included in the current gains and losses.
(2) Relevant accounting treatment about revision and termination of share-based payment plans
As to the revision on the share-based payment plan made by the Group, if the fair value of the granted equity instrument increases after the revision, it shall recognize the increase of the service gained according to the increase of the fair value of equity instrument. The increase of the fair value of equity instrument refers to the balance between the fair value on the revising date of the equity instruments before and after the revision. If the total fair value of share-base payment decreases after the revision or adopting other ways against the staffs in the revision, it shall continue to conduct accounting treatment on the service gained as if the revision never happens, only if the Group cancel partial or total granted equity instrument.
During the vesting period, if the Group cancels the granted equity instrument, the Group shall treat the cancel of granted equity instrument as accelerating the vesting, and includes the amount shall be recognized during the remained vesting period into current profit and loss, and also recognize the capital reserves. If staffs or other party can choose to meet the non-vesting conditions but not meets with them during the vesting period, which will be treated as the cancel of granted equity instrument by the Group.
(3) Accounting treatment of the share-based payment transactions involved with the Group, the shareholders of the Group or the actual controllers
The share-based equity payment transaction which involved with the Group, the shareholders or actual controllers of the Group, if one between the settlement enterprises and the service accepted enterprises are within the Group and the others are not, should be accounting disposed according to the following regulations in the consolidation financial statement of the Group:
① For the settlement enterprises settle by the equity instruments of itself, should dispose the share-based payment transaction as the share payment of the equity settlement; besides the rest should be disposed as the cash-settled share-based payment.
If the settlement enterprises accept the investor of the service enterprise, should recognize as the long-term equity investment on the enterprises which accept service according to the fair value of the equity instruments on the granted date or the fair value which should undertake the liabilities and at the same time be recognized as capital reserve (other capital reserve) or liabilities.
② For the enterprises accept the service without settlement obligations or the equity instruments granted for the staffs of the enterprises are its own instruments, the share-based payment transaction should be disposed as the equity-settled share-based payment; for the enterprises accept the service with the settlement obligations and the equity instruments are not its own instruments,
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. the share-based payment transaction should be disposed as the cash-settled share-based payment.
The share-based payment transaction occur among each enterprise of the Group, if the enterprises accept service and the settlement enterprises are not the same enterprises, the recognition and the measurement of the share-based payment transaction among each individual financial statement of the service accepting enterprises and the settlement enterprises according to the above principles. 27. Other financial instruments such as preferred shares and perpetual capital securities
(1) Distinguish between perpetual capital securities and preferred shares etc.
The financial instruments such as perpetual capital securities and preferred shares issued by the Group that meet with the following conditions at the same time are regarded as equity instruments:
① the financial instruments not including the contact obligations such as pay for the cash or other financial assets to other parties, or to exchange the financial assets or financial liabilities under the potential disadvantages;
② if in the future have to use or could use the own equity instruments of the enterprises to settle the financial instruments, for example, the financial instruments are non-derivative instruments, there would be no contact obligations for delivering the variable own equity instruments for settlement; if they are derivative instruments, the Group could only settle the financial instruments through exchange its own equity instruments with a fixed number for the cash or other financial assets with fixed amount.
The other financial instruments issued by the Group should be classified into financial liabilities except for the financial instruments which could be classified into equity instruments according to the above conditions.
For the financial instruments issued by the Group which are complex financial instruments, should be recognized as an item of liabilities according to the fair value of the liabilities and at the same time be recognized as “other equity instruments” according to the amount that the actual received amount deduct the fair value of the liabilities. The transaction expenses occur when issuing the complex financial instruments should be shared according each proportion of the total issue price between the liabilities and the equities.
(2) Accounting treatment of perpetual capital securities and preferred shares etc.
The financial instruments such as the perpetual capital securities and preferred shares which be classified as financial liabilities, its relevant interests, dividends (or stock dividends), profits or losses, and the profits or losses occur from the redemption or the re-financing, should both be included in the current gains and losses except for the borrowing expenses that meet with the capitalization conditions (see details to Notes VI 17 “Borrowing expenses”).
For the financial instruments such as the perpetual capital securities and preferred shares which be classified as equity instruments, their issuance (including re-financing), re-purchase, selling or logout, the Group dispose them as the changes of the equities and the relevant transaction expenses are also minus from the equities. The Group disposes the distribution of the holder of the equity instruments as the profits distribution.
The Group not confirms the changes of the fair value of the equity instruments.
28. Revenue
No revenue from selling goods may be recognized unless the following conditions are met simultaneously: the significant risks and rewards of ownership of the goods have been transferred to the buyer by the enterprise; the enterprise retains neither continuous management right that usually keeps relation with the ownership nor effective control over the sold goods; the relevant amount of revenue can be measured in a reliable way; the relevant economic benefits may flow into the enterprise; and the relevant costs incurred or to be incurred can be measured in a reliable way.
(2) Providing labor services
If the Group can reliably estimate the outcome of a transaction concerning the labor services it provides, it shall recognize the
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. revenue from providing services employing the percentage-of-completion method on the date of the balance sheet. The completed proportion of a transaction concerning the providing of labor services shall be decided by the proportion of the labor service already provided to the total labor service to provide.
The outcome of a transaction concerning the providing of labor services can be measured in a reliable way, means that the following conditions shall be met simultaneously:① The amount of revenue can be measured in a reliable way;② The relevant economic benefits are likely to flow into the enterprise;③ The schedule of completion under the transaction can be confirmed in a reliable way; 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 theenterprises;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.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 29. Government subsidies
(1) Judgment basis and accounting treatment of government subsidies related to assets
The Company defines the government subsidies formed as the long-term assets which acquired for purchasing and constructing or by other methods as the government subsidies related to assets and confirms which as the deferred income and executes the average distribution as well as includes in the current gains and losses within the service life of the relevant assets.
(2) Judgment basis and accounting treatment of government subsidies related to profits
The Company defines the government subsidies formed as the long-term assets which acquired for purchasing and constructing or by other methods as the government subsidies related to assets while the rest of which as the government subsidies related to profits. The government subsidies related to profits used for supplementing the relevant expenses and losses during the follow-up period should be regarded as the deferred income, and be included in the current gains and losses during the period of confirming the related expenses; as those used for supplementing the occurred relevant expenses and losses, should be directly included in the current gains and losses.
30. Deferred income tax assets/deferred income tax liabilities
(1) Income tax of the current period
On the balance sheet date, for the current income tax liabilities (or assets) of the current period as well as the part formed during the previous period, should be measured by the income tax of the estimated payable (returnable) amount which be calculated according to the regulations of the tax law. The amount of the income tax payable which is based by the calculation of the current income tax expenses, are according to the result measured from the corresponding adjustment of the pre-tax accounting profit of 2015 which in accord to the relevant regulations of the tax law.
(2) Deferred income tax assets and deferred income tax liabilities
The difference between the book value of certain assets and liabilities and their tax assessment basis, as well as the temporary difference occurs from the difference between the book value of the items which not be recognized as assets and liabilities but could confirm their tax assessment basis according to the regulations of the tax law, the deferred income tax assets and the deferred income tax liabilities should be recognized by adopting liabilities law of the balance sheet.
No deferred tax liability is recognized for a temporary difference arising from the initial recognition of goodwill, the initial recognition of assets or liabilities due to a transaction other than a business combination, which affects neither accounting profit nor taxable profit (or deductible loss). Besides, no deferred tax assets is recognized for the taxable temporary differences related to the investments of subsidiary companies, associated enterprises and joint enterprises, and the investing enterprise can control the time of the reverse of temporary differences as well as the temporary differences are unlikely to be reversed in the excepted future. Otherwise, the Company should recognize the deferred income tax liabilities arising form other taxable temporary difference.
No deferred taxable assets should be recognized for the deductible temporary difference of initial recognition of assets and liabilities arising from the transaction which is not business combination, the accounting profits will not be affected, nor will the taxable amount or deductible loss be affected at the time of transaction. Besides, no deferred taxable assets should be recognized for the deductible temporary difference related to the investments of the subsidiary companies, associated enterprises and joint enterprises, which are not likely to be reversed in the expected future or is not likely to acquire any amount of taxable income tax that may be used for making up such deductible temporary differences. Otherwise, the Company shall recognize the deferred income tax assets arising from a deductible temporary difference basing on the extent of the amount of the taxable income that is likely to be acquired
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. to make up such deductible temporary differences
For any deductible loss or tax deduction that can be carried forward to the next year, the corresponding deferred income tax asset shall be determined to the extent that the amount of future taxable income to be offset by the deductible loss or tax deduction to be likely obtained.
On the balance sheet date, the deferred income tax assets and the deferred income tax liabilities shall be measured at the tax rate applicable to the period during which the assets are expected to be recovered or the liabilities are expected to be settled.
The book value of deferred income tax assets shall be reviewed at each balance sheet date. If it is unlikely to obtain sufficient taxable income to offset against the benefit of the deferred income tax asset, the book value of the deferred income tax assets shall be written down. Any such write-down should be subsequently reversed where it becomes probable that sufficient taxable income will be available.
(3) Income tax expenses
Income tax expenses include current income tax and deferred income tax.
The rest current income tax and the deferred income tax expenses or revenue should be included into current gains and losses except for the current income tax and the deferred income tax related to the transaction and events that be confirmed as other comprehensive income or be directly included in 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 Company should be listed by the written-off net amount which intend to executes the net amount settlement as well as the assets acquiring and liabilities liquidation at the same time while owns the legal rights of settling the net amount.
The deferred income tax assets and liabilities of the Company should be listed as written-off net amount when having the legal rights of settling the current income tax assets and liabilities by net amount and the deferred income tax and liabilities is relevant to the income tax which be collected from the same taxpaying bodies by the same tax collection and administration department or is relevant to the different taxpaying bodies but during each period which there is significant reverse of the deferred income assets and liabilities in the future and among which the involved taxpaying bodies intend to settle the current income tax and liabilities by net amount or are at the same time acquire the asset as well as liquidate the liabilities.
31. Lease
(1) Accounting treatment of operating lease
Business of operating leases recorded by the Group as the lessee
The rent expenses from operating leases shall be recorded by the lessee in the relevant asset costs or the profits and losses of the current period by using the straight-line method over each period of the lease term. The initial direct costs shall be recognized as the profits and losses of the current period. The contingent rents shall be recorded into the profits and losses of the current period in which they actually arise.
Business of operating leases recorded by the Company as the lessor
The rent incomes from operating leases shall be recognized as the profits and losses of the current period by using the straight-line method over each period of the lease term. The initial direct costs of great amount shall be capitalized when incurred, and be recorded into current profits and losses in accordance with the same basis for recognition of rent incomes over the whole lease term. The initial direct costs of small amount shall be recorded into current profits and losses when incurred. The contingent rents shall be recorded into the profits and losses of the current period in which they actually arise.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. (2) Accounting treatments of financial lease
Business of finance leases recorded by the Company as the lessee
On the lease beginning date, the Company shall record the lower one of the fair value of the leased asset and the present value of the minimum lease payments on the lease beginning date as the entering value in an account, recognize the amount of the minimum lease payments as the entering value in an account of long-term account payable, and treat the balance between the recorded amount of the leased asset and the long-term account payable as unrecognized financing charges. Besides, the initial direct costs directly attributable to the leased item incurred during the process of lease negotiating and signing the leasing agreement shall be recorded in the asset value of the current period. The balance through deducting unrecognized financing charges from the minimum lease payments shall be respectively stated in long-term liabilities and long-term liabilities due within 1 year.
Unrecognized financing charges shall be adopted by the effective interest rate method in the lease term, so as to calculate and recognize current financing charges. The contingent rents shall be recorded into the profits and losses of the current period in which they actually arise.
Business of finance leases recorded by the Company as the lessor
On the beginning date of the lease term, the Company shall recognize the sum of the minimum lease receipts on the lease beginning date and the initial direct costs as the entering value in an account of the financing lease values receivable, and record the unguaranteed residual value at the same time. The balance between the sum of the minimum lease receipts, the initial direct costs and the unguaranteed residual value and the sum of their present values shall be recognized as unrealized financing income. The balance through deducting unrealized financing incomes from the finance lease accounts receivable shall be respectively stated in long-term claims and long-term claims due within 1 year.
Unrecognized financing incomes shall be adopted by the effective interest rate method in the lease term, so as to calculate and recognize current financing revenues. The contingent rents shall be recorded into the profits and losses of the current period in which they actually arise.
32. Other significant accounting policies and estimates
Operation termination refers to the compose part that meet with one of the following conditions which had been disposed by the Company or be classified to held-to-sold as well as could be individually distinguished in operating and compiling the financial statement:① the compose part represents an individual main business or a main operation area;② the compose part is a part intends to dispose and plan an individual main business or a main operation area;③ the compose part is a subsidiary which be acquired only for resold.
For the details of the accounting treatment of the operation termination, please refer to the relevant description in “Divided as held-to-sold assets” of this note.
33. Changes in main accounting policies and estimates
(1) Change of accounting policies
□ Applicable√ Not applicable
(2) Change of main accounting estimates
□ Applicable√ Not applicable
2016 Semi-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|7%|
|Enterprise income tax|Income tax payable|25%|
|Education surtax|Turnover tax payable|3%|

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

2. Tax preference
3. Other
VII. Notes on major items in consolidated financial statements of the Company
1. Monetary funds
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Bank deposits|438,050,215.44|406,098,208.72|
|Other monetary funds|9,000,000.00||
|Total|447,050,215.44|406,098,208.72|

 Other notes
Other monetary fund was the guarantee fund of bank acceptance.
2. Financial assets measured by fair value and the changes be included in the current gains and losses Naught
3. Derivative financial assets
□ Applicable√ Not applicable
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 4. Notes receivable
(1) Notes receivable listed by category
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Bank acceptance bill|14,785,699.71|34,433,010.97|
|Total|14,785,699.71|34,433,010.97|

 (2) Notes receivable pledged by the Company at the period-end
Not applicable
(3) Notes receivable which had endorsed by the Company or had discounted and had not due on the balance sheet date at the period-end
Unit: RMB
||||
|-|-|-|
||Amount of recognition termination at the|Amount of not terminated recognition at|
|Item|||
||period-end|the period-end|
|Bank acceptance bill|51,205,793.98||
|Total|51,205,793.98||

(4) Notes transferred to accounts receivable because drawer of the notes fails to executed the contract or agreement
Not applicable
5. Accounts receivable
(1) Accounts receivable disclosed by category
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|||||Withdra|||||||
|Category|||||Book||||||
|||Proportio||wal|||Proportio||Withdrawal|Book value|
||Amount||Amount||value|Amount||Amount|||
|||n||proportio|||n||proportion||
|||||n|||||||
|Accounts receivable|||||||||||
||430,330,||30,133,4||400,197,4|198,651||18,200,60||180,450,53|
|withdrawn bad debt||99.86%||7.00%|||99.71%||9.16%||
||911.35||51.79||59.56|,132.62||0.69||1.93|
|provision according|||||||||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|to credit risks|||||||||||
|characteristics|||||||||||
|Accounts receivable|||||||||||
|with insignificant|||||||||||
|single amount for|584,457.||584,457.|||584,457||584,457.5|||
|||0.14%||100.00%|||0.29%||100.00%||
|which bad debt|52||52|||.52||2|||
|provision separately|||||||||||
|accrued|||||||||||
||430,915,||30,717,9||400,197,459.56|199,235||18,785,05||180,450,531.93|
|Total||100.00%|||||100.00%||||
||368.87||09.31|||,590.14||8.21|||

 Accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end
□ Applicable√ Not applicable
In the groups, accounts receivable adopting aging analysis method to accrue bad debt provision:
√ Applicable□ Not applicable
Unit: RMB
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Accounts receivable|Bad debt provision|Withdrawal proportion|
|Subitem within 1 year||||
|Within 1 year|417,212,733.32|20,860,636.67|5.00%|
|Subtotal within 1 year|417,212,733.32|20,860,636.67|5.00%|
|1 to 2 years|3,791,826.94|379,182.69|10.00%|
|Over 3 years|539,492.20|161,847.66|30.00%|
|3 to 4 years|8,786,858.89|8,731,784.77|99.37%|
|4 to 5 years|110,148.25|55,074.13|50.00%|
|Over 5 years|8,676,710.64|8,676,710.64|100.00%|
|Total|430,330,911.35|30,133,451.79|7.00%|

 Notes of the basis of recognizing the group:
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable√ Not applicable
In the groups, accounts receivable adopting other methods to accrue bad debt provision:
||||||
|-|-|-|-|-|
|Accounts receivable (classified byunits)|Year end balance||||
|Total|584,457.52|584,457.52|—|—|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd. (2) Accounts receivable withdraw, reversed or collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB11, 932,851.10; the amount of the reversed or collected part during the Reporting Period was of RMB0.00.
Of which the significant amount of the reversed or collected part during the Reporting Period
Not applicable
(3) The actual write-off accounts receivable
Not applicable
(4) Top 5 of the closing balance of the accounts receivable collected according to the arrears party
||||||
|-|-|-|-|-|
|Name of units|Year end balance|Aging|Proportion of the total year endbalance of the accountsreceivable (%)|Bad debt provision|
|Customerreceivable A|63,422,060.48|Within 1year|14.72%|3,171,103.02|
|Customerreceivable B|33,146,112.29|Within 1year|7.69%|1,657,305.61|
|Customerreceivable C|32,964,089.18|Within 1year|7.65%|1,648,204.46|
|Customerreceivable D|22,068,647.76|Within 1year|5.12%|1,103,432.39|
|Customerreceivable E|17,555,700.00|Within 1year|4.07%|877,785.00|
|Total|169,156,609.71||39.25%|8,457,830.48|

(5) Account receivable which terminate the recognition owning to the transfer of the financial assets (6) The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts receivable
Not applicable
6. Prepayment
(1) List by aging analysis:
Unit: RMB
||||
|-|-|-|
|Aging|Closing balance|Opening balance|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
||Amount|Proportion|Amount|Proportion|
|Within 1 year|27,493,117.65|97.41%|19,657,116.96|96.30%|
|1 to 2 years|670,854.15|2.38%|695,831.03|3.40%|
|2 to 3 years|||60,417.69|0.30%|
|Over 3 years|60,417.69|0.21%|||
|Total|28,224,389.49|--|20,413,365.68|--|

Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in time:
(2) Top 5 of the closing balance of the prepayment collected according to the prepayment target
|||||
|-|-|-|-|
|Name of units|Year end balance|Aging|Proportion of the total year end balance ofthe accounts receivable (%)|
|Supplier A|15,309,738.9|2 Within 1 year|54.24%|
|Supplier B|2,133,008.7|3 Within 1 year|7.56%|
|Supplier C|1,399,200.0|0 Within 1 year|4.96%|
|Supplier D|1,320,000.0|0 Within 1 year|4.68%|
|Supplier E|1,257,144.4|3 Within 1 year|4.45%|
|Total|21,419,092.0|8|75.89%|

 Other notes:
7. Interest receivable
Not applicable
8. Dividend receivable
Not applicable
9. Other accounts receivable
(1) Other accounts receivable disclosed by category
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|||||Withdrawalproportion|||||||
|Category|||||Book||||||
|||Proportio|||||Proportio||Withdrawalproportion|Book value|
||Amount||Amount||value|Amount||Amount|||
|||n|||||n||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|Other accounts||||29.10%|||||||
|receivable withdrawn|||||||||||
||20,068,4||5,839,51||14,228,94|15,211,||5,363,991||9,847,451.3|
|bad debt provision||100.00%|||||100.00%||35.26%||
||60.17||2.15||8.02|442.84||.49||5|
|according to credit|||||||||||
|risks characteristics|||||||||||
||20,068,4||5,839,51|29.10%|14,228,948.02|15,211,||5,363,991||9,847,451.35|
|Total||100.00%|||||100.00%||35.26%||
||60.17||2.15|||442.84||.49|||

 Other accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end□ Applicable√ Not applicable
In the groups, other accounts receivable adopting aging analysis method to accrue bad debt provision:
√Applicable□ Not applicable
Unit: RMB
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Other accounts receivable|Bad debt provision|Withdrawal proportion|
|Subitem within 1 year||||
|Within 1 year|9,796,103.68|489,805.18|5.00%|
|Subtotal within 1 year|9,796,103.68|489,805.18|5.00%|
|2 to 3 years|29,513.72|2,951.37|10.00%|
|Over 3 years|5,490,647.88|5,346,755.60|97.38%|
|3 to 4 years|20,000.00|10,000.00|50.00%|
|4 to 5 years|267,784.57|133,892.29|50.00%|
|Over 5 years|5,202,863.31|5,202,863.31|100.00%|
|Total|15,316,265.28|5,839,512.15|38.13%|

 Notes of the basis of recognizing the group:
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable√ Not applicable
In the groups, other accounts receivable adopting other methods to accrue bad debt provision:
√ Applicable□ Not applicable
|||
|-|-|
|Name of group|Year end balance|
|Total|4,752,194.89|

Notes: the content of the non-risk group is the export tax refunds receivable.
(2) Accounts receivable withdraw, reversed or collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB475, 520.66; the amount of the reversed
or collected part during the Reporting Period was of RMB000.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. Of which the significant amount of the reversed or collected part during the Reporting Period
Not applicable.
(3) The actual write-off other accounts receivable
Not applicable.
(4) Other account receivable classified by account nature
Unit: RMB
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Export rebates|4,752,194.89|9,241,792.16|
|Liquidation amount of investment fund|3,398,275.80|3,398,275.80|
|Cash pledge|720,000.00|700,000.00|
|Pretty cash|830,635.53|728,854.26|
|Liquidation amount of goods payment|548,500.00|548,500.00|
|Payment for land|8,945,000.00||
|Others|873,853.95|594,020.62|
|Total|20,068,460.17|15,211,442.84|

 (5) Top 5 of the closing balance of the other accounts receivable collected according to the arrears party Unit: RMB
|||||||
|-|-|-|-|-|-|
||||||Closing balance of|
|Name of the entity|Nature|Closing balance|Aging|Proportion%||
||||||bad debt provision|
|Jingzhou Urban||||||
|Construction||||||
|Investment|Payment for land|8,945,000.00|Below1 year|44.57%|447,250.00|
|Development Co.,||||||
|Ltd.||||||
|Jingzhou Center||||||
|Subtreasury of State|Export rebates|4,752,194.89|Below1 year|23.68%||
|Treasury||||||
|Shantou Biyue|Liquidation amount|||||
|||3,125,000.00|Over 5 years|15.57%|3,125,000.00|
|Plastic Co., Ltd.|of investment fund|||||
|Hubei Jingzhou||||||
|Shashi Agricultural|Liquidation amount|||||
|||548,500.00|Over 5 years|2.73%|548,500.00|
|Production Materials|of goods payment|||||
|Co., Ltd.||||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||||
|-|-|-|-|-|-|
|Jingzhou Production||||||
|Safety Supervision|Cash pledge|300,000.00|Over 5 years|1.50%|300,000.00|
|Bureau||||||
|Total|--|17,670,694.89|--|88.05%|4,420,750.00|

 (6) Account receivable involving government subsidies
Not applicable
(7) Other account receivable derecognized due to the transfer of financial assets
(8) Amount of transfer other account receivable and assets and liabilities formed by its continuous involvement
Other notes:
10. Inventory
(1) Category of inventory
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Falling price|||Falling price||
||Book balance||Book value|Book balance||Book value|
|||reserves|||reserves||
|Raw materials|27,653,903.21|88,820.89|27,565,082.32|39,185,122.07|941,716.73|38,243,405.34|
|Goods in process|56,875,884.18|181,539.41|56,694,344.77|60,066,222.32|687,819.54|59,378,402.78|
|Inventory goods|108,634,905.49|2,494,610.94|106,140,294.55|194,848,529.59|4,646,173.41|190,202,356.18|
|Total|193,164,692.88|2,764,971.24|190,399,721.64|294,099,873.98|6,275,709.68|287,824,164.30|

 (2) Impairment of inventories
Unit: RMB
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||Increase|||Decrease||||
|Item|Opening balance|||||Reverse or|||Closing balance|
||||Withdrawal|Others|||Others|||
|||||||write-off||||
|Raw materials|941,716.73||88,820.89|||941,716.73|||88,820.89|
|Goods in process|687,819.54||181,539.41|||687,819.54|||181,539.41|
|Inventory goods|4,646,173.41||2,494,610.94|||4,646,173.41|||2,494,610.94|
|Total|6,275,709.68||2,764,971.24|||6,275,709.68|||2,764,971.24|
|Item||Specific basis of withdrawal of falling|||Reasons for reversal|||Reasons for write-off||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
||price reserves of inventory||
|Raw materials|The realizable net value was lower thanthe cost|Consumed|
|Goods in process|The realizable net value was lower thanthe cost|Consumed|
|Inventory goods|The realizable net value was lower thanthe cost|Sold|
|Turnover materials|||

(3) Notes of the closing balance of the inventory which includes capitalized borrowing expenses
(4) Completed unsettled assets formed from the construction contact at the period-end
Not applicable
11. Assets divided as held-to-sold
Not applicable
12. Non-current assets due within 1 year
Not applicable
13. Other current assets
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Input tax to be deducted|11,406,283.03|14,297,586.28|
|Tax prepayments||387,633.86|
|Total|11,406,283.03|14,685,220.14|

 Other notes:
14. Available-for-sale financial assets
(1) List of available-for-sale financial assets
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Impairment|||Impairment||
||Book balance||Book value|Book balance||Book value|
|||provision|||provision||
|Available-for-sale equity|21,144,800.00|11,991,017.37|9,153,782.63|21,144,800.00|11,991,017.37|9,153,782.63|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||||
|-|-|-|-|-|-|-|
|instruments|||||||
|Measured by cost|21,144,800.00|11,991,017.37|9,153,782.6|3 21,144,800.00|11,991,017.37|9,153,782.63|
|Total|21,144,800.00|11,991,017.37|9,153,782.6|3 21,144,800.00|11,991,017.37|9,153,782.63|

 (2) Available-for-sale financial assets measured by fair value at the period-end
Not applicable
(3) Available-for-sale financial assets measured by cost at the period-end
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Book balance||||Impairment provision||||Shareholdi|Cash|
||||||||||ng|bonus of|
|Investee|Opening||||Opening||Decrea||proportion|the|
|||Increase|Decrease|Closing period||Increase||Closing period|||
||period||||period||se||among the|Reporting|
||||||||||investees|Period|
|Hubei|20,000,000||||||||||
|||||20,000,000.00|11,991,017.37|||11,991,017.37|0.71%||
|Bank|.00||||||||||
|Guangxi|||||||||||
|Zhongding|580,800.00|||580,800.00|||||1.41%|75,504.00|
|Co., Ltd.|||||||||||
|Hubei|||||||||||
|Shendian|||||||||||
|Auto|564,000.00|||564,000.00|||||0.60%||
|Motor Co.,|||||||||||
|Ltd.|||||||||||
||21,144,800||||||||||
|Total||||21,144,800.00|11,991,017.37|||11,991,017.37|--|75,504.00|
||.00||||||||||

(4) Changes of the impairment of the available-for-sale financial assets during the Reporting Period Not applicable
(5) Relevant notes of the fair value of the available-for-sale equity instruments which seriously fell or temporarily fell but not withdrawn the impairment provision
Not applicable
15. Investment held-to-maturity
Not applicable
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 16. Long-term accounts receivable
Not applicable
17. Long-term equity investment
Not applicable
18. Investment property
(1) Investment property adopted the cost measurement mode
√ Applicable□ Not applicable
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Houses and buildings|Land use right|Construction in progress|Total|
|I. Original book value|||||
|1. Opening balance|7,934,843.00|||7,934,843.00|
|2. Increased amount|||||
|of the period|||||
|(1) Outsourcing|||||
|(2) Transfer of|||||
|inventory\fixed|||||
|assets\project under|||||
|construction|||||
|(3) Increased from|||||
|enterprise merger|||||
|3. Decreased|||||
|amount of the period|||||
|(1) Disposal|||||
|(2) Other transfer|||||
|4. Closing balance|7,934,843.00|||7,934,843.00|
|II. Accumulative|||||
|depreciation and|||||
|accumulative|||||
|amortization|||||
|1. Opening balance|2,898,097.46|||2,898,097.46|
|2. Increased amount|||||
||157,109.88|||157,109.88|
|of the period|||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|(1) Withdrawal or|||
||157,109.88|157,109.88|
|amortization|||
|3. Decreased|||
|amount of the period|||
|(1) Disposal|||
|(2) Other transfer|||
|4. Closing balance|3,055,207.34|3,055,207.34|
|III. Depreciation reserves|||
|1. Opening balance|||
|2. Increased amount|||
|of the period|||
|(1) Withdrawal|||
|3. Decreased|||
|amount of the period|||
|(1) Disposal|||
|(2) Other transfer|||
|4. Closing balance|||
|IV. Book value|||
|1. Closing book||4,879,635.66|
||4,879,635.66||
|value|||
|2. Opening book||5,036,745.54|
||5,036,745.54||
|value|||

(2) Investment property adopted fair value measurement mode
□ Applicable√ Not applicable
(3) Details of investment property failed to accomplish certification of property
Not applicable
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 19. Fixed assets
(1) List of fixed assets
Unit: RMB
||||||
|-|-|-|-|-|
||||Transportation||
|Item|Houses and buildings|Machinery equipment||Total|
||||equipment||
|I. Original book value|||||
|1. Opening balance|843,883,536.24|1,962,958,375.53|10,815,874.17|2,817,657,785.94|
|2. Increased amount of|||||
||125,827.00|5,547,677.62|244,628.21|5,918,132.83|
|the period|||||
|(1) Purchase||4,954,048.60|244,628.21|5,198,676.81|
|(2) Transfer of|||||
|project under|125,827.00|593,629.02||719,456.02|
|construction|||||
|(3) Increased from|||||
|enterprise merger|||||
|3. Decreased amount|||||
||0.00|151,992.86|2,541,149.79|2,693,142.65|
|of the period|||||
|(1) Disposal or|||||
|||151,992.86|2,541,149.79|2,693,142.65|
|Scrap|||||
|4. Closing balance|844,009,363.24|1,968,354,060.29|8,519,352.59|2,820,882,776.12|
|II. Accumulative|||||
|depreciation|||||
|1. Opening balance|236,818,332.30|875,850,494.55|6,127,008.34|1,118,795,835.19|
|2. Increased amount of|||||
||17,768,569.74|98,063,160.43|444,707.27|116,276,437.44|
|the period|||||
|(1) Withdrawal|17,768,569.74|98,063,160.43|444,707.27|116,276,437.44|
|3. Decreased amount|||||
|||148,600.21|2,347,440.10|2,496,040.31|
|of the period|||||
|(1) Disposal or|||||
|||148,600.21|2,347,440.10|2,496,040.31|
|Scrap|||||
|4. Closing balance|254,586,902.04|973,765,054.77|4,224,275.51|1,232,576,232.32|
|III. Depreciation reserves|||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
|1. Opening balance|2,848,203.34|11,962,547.32||14,810,750.66|
|2. Increased amount of|||||
|the period|||||
|(1) Withdrawal|||||
|3. Decreased amount|||||
|of the period|||||
|(1) Disposal or|||||
|Scrap|||||
|4. Closing balance|2,848,203.34|11,962,547.32||14,810,750.66|
|IV. Book value|||||
|1. Closing book value|586,574,257.86|982,626,458.20|4,295,077.08|1,573,495,793.14|
|2. Opening book value|604,217,000.60|1,075,145,333.66|4,688,865.83|1,684,051,200.09|

 (2) List of temporarily idle fixed assets
Unit: RMB
|||||||
|-|-|-|-|-|-|
|||Accumulative|Impairment|||
|Item|Original book value|||Book value|Notes|
|||depreciation|provision|||
|Houses and||||||
||8,736,063.10|6,927,877.30|1,757,484.71|50,701.09||
|buildings||||||
|Machinery||||||
||813,358.79|813,358.79||||
|equipment||||||

(3) Fixed assets leased in from financing lease
Not applicable
(4) Fixed assets leased out from operation lease
Not applicable
(5) Details of fixed assets failed to accomplish certification of property
Not applicable
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 20. Construction in progress
(1) List of construction in progress
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Impairment|||Impairment||
||Book balance||Book value|Book balance||Book value|
|||provision|||provision||
|Mating Sewage|||||||
||78,332,353.28||78,332,353.28|66,464,190.24||66,464,190.24|
|Treatment Project|||||||
|Modification of|||||||
|the 110KV|||||||
||38,133,049.11||38,133,049.11|38,133,049.11||38,133,049.11|
|transformer|||||||
|substation|||||||
|Saline wastewater|||||||
|incineration|||||||
|project such as|||||||
|sewage|||||||
||35,047,476.15||35,047,476.15|27,058,639.76||27,058,639.76|
|N-phosphonomet|||||||
|hyliminadiacetic|||||||
|acid and|||||||
|glyphosate|||||||
|Optimization of|||||||
|the pyridine|||||||
|engineering|||||||
||5,257,668.35||5,257,668.35|4,385,547.18||4,385,547.18|
|technology and|||||||
|the safety|||||||
|modification|||||||
|Dynamic 110KV|||||||
|ionic membrane|||||||
||4,241,328.73||4,241,328.73|4,240,933.05||4,240,933.05|
|substation access|||||||
|system|||||||
|116 acres public|||||||
|engineering|||||||
|projects in|3,481,331.13||3,481,331.13|2,289,680.28||2,289,680.28|
|Sanonda new area|||||||
|southeast corner|||||||
|Pesticide Plant II|||||||
|III|||||||
|chloroacetaldehy|1,843,108.85||1,843,108.85|181,715.29||181,715.29|
|de stepwise|||||||
|chloride|||||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
|technologicalupgradingprojects|||||
|Dynamic Sha city|||||
|farm heating|||430,536.15|430,536.15|
|pipeline projects|||||
|Chlor-alkalilogisticXinxiangrui outertube projects|||||
||1,163,214.36|1,163,214.36|499,254.09|499,254.09|
|Herbicide factoryPMIDA Alkaline|||||
|hydrolysis|1,105,898.47|1,105,898.47|||
|continuous pilotproject|||||
|Others|2,996,120.75|2,996,120.75|||
|Total|171,601,549.18|171,601,549.18|143,683,545.15|143,683,545.15|

 (2) Changes of significant construction in progress
Unit: RMB
||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|
|||Openingbalance||||||||Ofwhich:|||
|||||Amount|||Proporti||||||
||||||||||Accumul||||
|||||that|||on|||the|Capitaliz||
||||||Other||||ative||||
|||||transferr|||estimate|||amount|ation rate||
||Estimate||||decrease||||amount||||
|Name o f||||ed to||Closing|d of the|Project||of the|of the|Capital|
||d||Increase||d amount||||of||||
|item||||fixed||balance|project|progress||capitaliz|interests|resources|
||number||||of the||||capitaliz||||
|||||assets of|||accumul|||ed|of the||
||||||period||||ed||||
|||||the|||ative|||interests|period||
||||||||||interests||||
|||||period|||input|||of theperiod|||
|Mating|||||||||||||
|Sewage|||||||||||||
||108,500|, 66,464,1|11,868,1|||78,332,3|||||||
|Treatme|||||||72.20%|72.20%||||Others|
||000.00|90.24|63.04|||53.28|||||||
|nt|||||||||||||
|Project|||||||||||||
|Modifica|||||||||||||
|tion of|||||||||||||
|the|45,000,0|38,133,0||||38,133,0|||||||
||||||||86.55%|86.55%||||Others|
|110KV|00.00|49.11||||49.11|||||||
|transfor|||||||||||||
|mer|||||||||||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|substatio||||||||
|n||||||||
|Saline||||||||
|wastewat||||||||
|er||||||||
|incinerat||||||||
|ion||||||||
|project||||||||
|such as||||||||
||35,300,0|27,058,6|7,988,83|35,047,4||||
|sewage|||||99.28%|99.28%|Others|
||00.00|39.76|6.39|76.15||||
|N-phosp||||||||
|honomet||||||||
|hylimina||||||||
|diacetic||||||||
|acid and||||||||
|glyphosa||||||||
|te||||||||
|Optimiza||||||||
|tion of||||||||
|the||||||||
|pyridine||||||||
|engineeri||||||||
|ng|3,910,00|4,385,54|872,121.|5,257,66||||
||||||134.47%|99%|Others|
|technolo|0.00|7.18|17|8.35||||
|gy and||||||||
|the||||||||
|safety||||||||
|modifica||||||||
|tion||||||||
|Dynamic||||||||
|110KV||||||||
|ionic||||||||
|membra|4,900,00|4,240,93||4,241,32||||
||||395.68||86.56%|86.56%|Others|
|ne|0.00|3.05||8.73||||
|substatio||||||||
|n access||||||||
|system||||||||
|116||||||||
|acres||||||||
|public|6,500,00|2,289,68|1,191,65|3,481,33||||
||||||53.56%|53.56%|Others|
|engineeri|0.00|0.28|0.85|1.13||||
|ng||||||||
|projects||||||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||||||
|-|-|-|-|-|-|-|-|
|in||||||||
|Sanonda||||||||
|new area||||||||
|southeast||||||||
|corner||||||||
||204,110,|142,572,|21,921,1|164,493,||||
|Total|||||--|--|--|
||000.00|039.62|67.13|206.75||||

(3) List of the withdrawal of the impairment provision of the construction in progress
Not applicable
21. Engineering material
Not applicable
22. Liquidation of fixed assets
Not applicable
23. Productive biological assets
(1) Productive biological assets adopted cost measurement mode
□ Applicable√ Not applicable
(2) Productive biological assets adopted fair value measurement mode
□ Applicable√ Not applicable
24. Oil and gas assets
□ Applicable√ Not applicable
25. Intangible assets
(1) List of intangible assets
Unit: RMB
|||||||
|-|-|-|-|-|-|
|Item|Land use right|Patent right|Non-patent right|Others|Total|
|I. Original book||||||
|value||||||
|1. Opening|231,343,514.07||18,743,699.96|2,500.00|250,089,714.03|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
|balance|||||
|2. Increased|||||
|amount of the period|||||
|(1) Purchase|||||
|(2) Internal R|||||
|&D|||||
|(3) Increased|||||
|from enterprise|||||
|merger|||||
|3. Decreased|||||
||4,428,080.00|||4,428,080.00|
|amount of the period|||||
|(1) Disposal|4,428,080.00|||4,428,080.00|
|4. Closing|||||
||226,915,434.07|18,743,699.96|2,500.00|245,661,634.03|
|balance|||||
|II. Total accrued|||||
|amortization|||||
|1. Opening|||||
||44,212,611.83|8,232,584.23|2,500.00|52,447,696.06|
|balance|||||
|2. Increased|||||
||1,969,748.30|728,986.44||2,698,734.74|
|amount of the period|||||
|(1)|||||
||1,969,748.30|728,986.44||2,698,734.74|
|Withdrawal|||||
|3. Decreased|||||
||1,874,561.65|||1,874,561.65|
|amount of the period|||||
|(1) Disposal|1,874,561.65|||1,874,561.65|
|4. Closing|||||
||44,307,798.48|8,961,570.67|2,500.00|53,271,869.15|
|balance|||||
|III. Depreciation|||||
|reserves|||||
|1. Opening|||||
||32,072,093.53|||32,072,093.53|
|balance|||||
|2. Increased|||||
|amount of the period|||||
|(1)|||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||
|-|-|-|-|
|Withdrawal||||
|3. Decreased||||
|amount of the period||||
|(1) Disposal||||
|4. Closing||||
||32,072,093.53||32,072,093.53|
|balance||||
|IV. Book value||||
|1. Closing book||||
||150,535,542.06|9,782,129.29|160,317,671.35|
|value||||
|2. Opening||||
||155,058,808.71|10,511,115.73|165,569,924.44|
|book value||||

The proportion the intangible assets formed from the 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
Not applicable
26.R&D expenses
Not applicable
27. Goodwill
Not applicable
28. Long-term unamortized expenses
Not applicable
29. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets had not been off-set
Unit: RMB
||||||
|-|-|-|-|-|
||Closing balance||Opening balance||
|Item|Deductible temporary|Deferred income tax|Deductible temporary|Deferred income tax|
||difference|assets|difference|assets|
|Assets impairment|52,211,454.19|13,052,863.55|44,084,073.52|11,021,018.38|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
|provision|||||
|Total|52,211,454.19|13,052,863.55|44,084,073.52|11,021,018.38|

 (2) Deferred income tax liabilities had not been off-set
Not applicable
(3) Deferred income tax assets or liabilities listed by net amount after off-set
Unit: RMB
||||||
|-|-|-|-|-|
||Mutual set-off amount of|Amount of deferred||Amount of deferred|
||||Mutual set-off amount of||
||deferred income tax|income tax assets or||income tax assets or|
|Item|||deferred income tax||
||assets and liabilities at|liabilities after off-set at||liabilities after off-set at|
||||assets and liabilities||
||the period-end|the period-end||the period-begin|
|Deferred income tax||13,052,863.55||11,021,018.38|
|assets|||||

(4) List of unrecognized deferred income tax assets
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Deductible temporary difference|45,984,800.07|45,214,547.42|
|Deductible losses|38,692,159.11|43,388,031.90|
|Total|84,676,959.18|88,602,579.32|

 (5) Deductible losses of unrecognized deferred income tax assets will due the following years
Unit: RMB
|||||
|-|-|-|-|
|Years|Closing balance|Opening balance|Notes|
|Y 2016|0.00|0.00||
|Y 2017|0.00|615,390.77||
|Y 2018|7,866,998.43|10,520,149.83||
|Y 2019|30,825,160.68|31,712,691.47||
|Y 2020|0.00|539,799.83||
|Total|38,692,159.11|43,388,031.90|--|

Other notes:
30. Other non-current assets
Unit: RMB
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Land compensation prepayments|5,000,000.00|5,000,000.00|
|Total|5,000,000.00|5,000,000.00|

 Other notes:
31. Short-term loans
(1) Category of short-term loans
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Guaranteed loan||20,000,000.00|
|Total|0.00|20,000,000.00|

 Notes of short-term loans category
(2) List of the short-term loans overdue but not return
Not applicable
32. Financial liabilities measured by fair value and the changes included in the current gains and losses Not applicable
33. Derivative financial liabilities
□ Applicable√ Not applicable
34. Notes payable
Unit: RMB
||||
|-|-|-|
|Category|Closing balance|Opening balance|
|Bank acceptance bill|30,000,000.00||
|Total|30,000,000.00|0.00|

 The total amount of the due but not pay notes payable at the period-end was of RMB000.
35. Accounts payable
(1) List of accounts payable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Within 1 year (including 1 year)|129,957,898.50|95,743,429.46|
|1 to 2 years (including 2 years)|7,878,699.46|32,840,902.38|
|2-3years (including 3 years)|1,902,808.47|3,416,655.30|
|Over 3 years|4,282,368.97|2,356,494.63|
|Total|144,021,775.40|134,357,481.77|

 (2) Notes of the accounts payable aging over one year
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Unpaid/ Un-carry-over reason|
|Bluestar (Beijing) Chemical Machinery|||
||2,580,000.00|Unsettled|
|Co., Ltd.|||
|Jiangsu Leke Energy-saving Technology|||
||1,990,000.00|Unsettled|
|Co., Ltd.|||
|Jizhou Zhongyi Composite Material Co.,|||
||531,600.00|Unsettled|
|Ltd|||
|Shanghai Yu Long Mo Separation|||
||448,000.00|Unsettled|
|Equipment Co., Ltd.|||
|Wuxi Haichang Machinery Equipment|||
||340,000.00|Unsettled|
|Co., Ltd.|||
|Total|5,889,600.00|--|

Other notes:
36. Advance from customers
(1) List of advance from customers
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Within 1 year (including 1 year)|5,924,160.52|24,854,970.29|
|1 to 2 years (including 2 years)|390,663.88|99,517.70|
|2-3years (including 3 years)|95,073.84|58,832.56|
|Over 3 years|1,667,326.73|1,652,817.67|
|Total|8,077,224.97|26,666,138.22|

 (2) Significant advance from customers aging over one year
Unit: RMB
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Item|Closing balance|Unpaid/ Un-carry-over reason|
|Retailer A|129,250.00|Unsettled|
|Retailer B|111,800.00|Unsettled|
|Retailer C|100,000.00|Unsettled|
|Retailer D|100,000.00|Unsettled|
|Retailer E|93,720.00|Unsettled|
|Total|534,770.00|--|

(3) Particulars of settled but unfinished projects formed by construction contract at period-end.
Not applicable
37. Payroll payable
(1) List of Payroll payable
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|I. Short-term salary|23,608,851.88|79,148,067.43|94,588,841.12|8,168,078.19|
|II. Post-employment|||||
|benefit-defined|6,699,489.85|18,894,465.61|19,209,489.44|6,384,466.02|
|contribution plans|||||
|III. Termination benefits||199,170.00|199,170.00||
|Total|30,308,341.73|98,241,703.04|113,997,500.56|14,552,544.21|

 (2) List of Short-term salary
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|1. Salary, bonus,|||||
||15,945,567.00|56,403,256.20|67,384,407.56|4,964,415.64|
|allowance, subsidy|||||
|2. Employee welfare||3,211,670.50|3,211,670.50|0.00|
|3. Social insurance|1,434,398.33|6,355,811.23|6,503,979.47|1,286,230.09|
|Of which: 1. Medical|||||
||1,034,297.19|5,095,888.80|5,568,923.84|561,262.15|
|insurance premiums|||||
|Work-related injury|||||
||311,868.39|1,004,557.78|725,725.36|590,700.81|
|insurance|||||
|Maternity insurance|88,232.75|255,364.65|209,330.27|134,267.13|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
|4. Housing fund|6,228,886.55|12,835,373.00|17,246,827.09|1,817,432.46|
|5. Labor union budget|||||
|and employee education||341,956.50|241,956.50|100,000.00|
|budget|||||
|Total|23,608,851.88|79,148,067.43|94,588,841.12|8,168,078.19|

 (3) List of drawing scheme
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|1. Basic pension benefits|4,654,726.30|14,258,501.06|14,919,563.26|3,993,664.10|
|2. Unemployment|||||
||1,176,207.24|1,517,740.28|1,089,333.03|1,604,614.49|
|insurance|||||
|Annuity|868,556.31|3,118,224.27|3,200,593.15|786,187.43|
|Total|6,699,489.85|18,894,465.61|19,209,489.44|6,384,466.02|

 Other notes:
38. Taxes payable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|VAT|15,016,332.53|9,039,619.15|
|Business tax||12,430.71|
|Corporate income tax|5,942,688.41|13,798,269.67|
|Personal income tax|302,489.61|265,402.33|
|Urban maintenance and construction tax|9,712.61|1,995,399.58|
|Resource tax|87,506.59|86,809.90|
|Property tax|417,742.34|67,652.33|
|Land use tax|201,682.42|31,682.42|
|Education Surcharge|4,162.57|1,022,110.33|
|Others|159,551.85|539,089.85|
|Total|22,141,868.93|26,858,466.27|

 Other notes:
39. Interest payable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Long-term loan interest of installment|||
|payment of interest and repay the due|753,198.89|1,123,849.31|
|capital|||
|Total|753,198.89|1,123,849.31|

 Particulars of significant overdue unpaid interest:
Not applicable
40. Dividends payable
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Common stock dividends|250,000.00|250,000.00|
|Total|250,000.00|250,000.00|

 Note: Including significant unpaid dividends payable over one year, the unpaid reason shall be disclosed:
41. Other accounts payable
(1) Other accounts payable listed by nature of the account
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Carriage|10,557,275.48|6,835,291.65|
|Energy charge||4,080,486.80|
|Commission|747,013.63|2,340,403.65|
|Sewage charge|5,299,186.00|1,763,989.00|
|Local charge|3,623,874.70|1,430,886.11|
|Cash pledge|1,919,163.11|1,338,163.11|
|Export price difference|969,501.53|1,028,363.50|
|Margin|812,500.00|835,800.00|
|Repair charge|1,101,275.73|527,757.71|
|Others|6,920,508.08|5,330,192.28|
|Total|31,950,298.26|25,511,333.81|

 (2) Other significant accounts payable with aging over one year
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Unpaid/ Un-carry-over reason|
|Hubei Haozhou Yunsheng Co., Ltd.|600,000.00|Cash pledge|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Qichun County Bureau for State-owned|||
||300,270.90|Unsettled|
|Assets|||
|Jingzhou Xintaida Logistics Co., Ltd.|300,000.00|Cash pledge|
|Total|1,200,270.90|--|

Other notes:
42. Liabilities classified as holding for sale
Not applicable
43. Non-current liabilities due within 1 year
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Long-term loans due within 1 year|254,000,000.00|244,000,000.00|
|Total|254,000,000.00|244,000,000.00|

 Other notes:
44. Other current-liabilities
Not applicable
45. Long-term loan
(1) Category of long-term loan
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Guaranteed loan|544,090,000.00|587,590,000.00|
|Less: Long-term loans due within 1 year|-254,000,000.00|-244,000,000.00|
|Total|290,090,000.00|343,590,000.00|

 Notes of short-term loans category:
Other notes including interest rate range:
46. Bonds payable
Not applicable
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 47. Long-term payable
(1) Long-term payable listed by nature of the account
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Loan for glyphosate project|0.00|490,000.00|
|Borrowing for the cooperation project with|||
|Guangzhou Chemical Industry Research|0.00|160,000.00|
|Institute|||
|Total|0.00|650,000.00|

 Other notes:
48. Long-term payroll payable
Not applicable
49. Payable
Not applicable
50. Estimated liabilities
Not applicable
51. Deferred revenue
Unit: RMB
|||||||
|-|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|Formed reason|
|Government||||||
||26,570,088.61||2,001,600.44|24,568,488.17||
|subsidies||||||
|Total|26,570,088.61||2,001,600.44|24,568,488.17|--|

Item involving government subsidies:
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||||Amount recorded||||
||||into|||Related to|
|||Amount of newly|||||
|Item|Opening balance||non-operating|Other changes|Closing balance|assets/related|
|||subsidy|||||
||||income in report|||income|
||||period||||
|Pyridine project||||||Related to the|
||6,883,333.35||491,666.66||6,391,666.69||
|subsidies||||||assets|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
|Special fund for|||||
|||||Related to the|
|industry clean|5,509,259.26|388,888.88|5,120,370.38||
|||||assets|
|production|||||
|Appropriation for|||||
|CTC consuming||||Related to the|
||2,916,666.67|500,000.00|2,416,666.67||
|and eliminating||||assets|
|project|||||
|Government|||||
|Subsidy for||||Related to the|
||2,330,000.00|388,333.34|1,941,666.66||
|Highly toxic||||assets|
|pesticide|||||
|Special fund for|||||
|management of||||Related to the|
||733,333.31|122,222.22|611,111.09||
|source of||||assets|
|pollution|||||
|Special fund for|||||
|transferring|||||
|||||Related to the|
|environmental|533,333.35|33,333.34|500,000.01||
|||||assets|
|protection|||||
|deferred|||||
|Land||||Related to the|
||7,664,162.67|77,156.00|7,587,006.67||
|compensates||||assets|
|Total|26,570,088.61|2,001,600.44|24,568,488.17|--|

 Other notes:
52. Other non-current liabilities
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|Agricultural Development Bank New|||
||120,800,000.00||
|District Construction Funds|||
|Total|120,800,000.00||

Other notes:
53. Share capital
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Increase/decrease (+/-)||||||
|Opening||||||Closing|
||New shares||Capitalized||||
|balance||Bonus shares||Others|Subtotal|balance|
||issued||Capital||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||
|-|-|-|-|
|||reserves||
|The sum of|593,923,220.00||593,923,220.00|
|shares||||

Other notes:
54. Other equity instruments
Not applicable
55. Capital surplus
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|Capital premium|254,568,370.25|||254,568,370.25|
|Other capital reserves|8,495,091.72|||8,495,091.72|
|Total|263,063,461.97|||263,063,461.97|

 Other notes, including changes and reason of change:
56. Treasury stock
Not applicable
57. Other comprehensive income
Not applicable
58. Special reserves
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|Safety production cost|22,848,859.15|4,403,580.42|1,156,911.45|26,095,528.12|
|Total|22,848,859.15|4,403,580.42|1,156,911.45|26,095,528.12|

 Other notes, including changes and reason of change:
59. Surplus reserves
Unit: RMB
||||||
|-|-|-|-|-|
|Item|Opening balance|Increase|Decrease|Closing balance|
|Statutory surplus|||||
||186,884,162.46|||186,884,162.46|
|reserves|||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Discretionary surplus|||
||3,815,085.65|3,815,085.65|
|reserves|||
|Total|190,699,248.11|190,699,248.11|

 Other note, including changes and reason of change
60. Retained earnings
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Last period|
|Opening balance of retained profits beforeadjustments|||
||1,026,847,680.37|957,050,401.65|
|Opening balance of retained profits afteradjustments|1,026,847,680.37||
|||957,050,401.65|
|Add: Net profit attributable to owners of theCompany|||
||16,807,555.50|117,678,175.59|
|Dividend of common stock payable|14,848,080.50|59,392,322.00|
|Closing retained profits|1,028,807,155.37|1,015,336,255.24|

 List of adjustment of opening retained profits:
1) RMB0 opening retained profits was affected by retrospective adjustment conducted according to the Accounting Standards for Business Enterprises and relevant new regulations.
2) RMB0 opening retained profits was affected by changes on accounting policies.
3) RMB0 opening retained profits was affected by correction of significant accounting errors.
4) RMB0 opening retained profits was affected by changes in combination scope arising from same control.
5) RMB0 opening retained profits was affected totally by other adjustments.
61. Revenues and operating costs
Unit: RMB
||||||
|-|-|-|-|-|
||Reporting Period||Same period of last year||
|Item|||||
||Sales revenue|Cost of sales|Sales revenue|Cost of sales|
|Main operations|988,076,337.88|843,037,392.01|1,227,923,283.93|937,967,817.10|
|Other operations|17,620,819.62|16,150,709.98|7,328,398.88|3,799,812.61|
|Total|1,005,697,157.50|859,188,101.99|1,235,251,682.81|941,767,629.71|

 62. Business tax and surcharges
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Business tax|33,784.15|70,084.09|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Urban maintenance and construction tax|2,228,193.13|4,834,274.92|
|Education Surcharge|955,073.55|2,071,832.10|
|Local education surtax|636,224.36|1,381,221.42|
|Others||529,708.31|
|Total|3,853,275.19|8,887,120.84|

 Other notes:
63. Sale expenses
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Transport fees|22,966,420.71|14,734,431.08|
|Export fees|14,602,368.29|13,559,127.57|
|Employee’s remuneration|1,441,738.11|3,340,894.15|
|Business travel charges|429,631.00|527,680.10|
|Handling charges|2,333,120.54|1,309,472.58|
|Advertising and general publicity expense|263,118.74|265,010.60|
|Premium|282,610.60|146,304.81|
|Others|2,923,933.77|2,658,954.62|
|Total|45,242,941.76|36,541,875.51|

 Other notes:
64. Administration expenses
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Employee’s remuneration|22,260,863.72|21,524,335.60|
|Tax expenses|3,663,047.81|4,800,588.89|
|Depreciation charge|3,772,945.90|3,383,428.40|
|Amortization of intangible assets|2,698,734.74|2,237,488.08|
|Business entertainment fees|786,854.26|930,935.70|
|Asset insurance fees|1,889,026.78|1,650,150.85|
|Water & electricity fees|783,891.98|1,010,581.92|
|Office expenses|935,883.71|849,115.95|
|Amortization of low-price consumables|964,702.64|1,362,828.63|
|Business travel charges|492,985.72|322,395.70|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Vehicle costs|149,420.39|198,507.31|
|Repair charge|573,175.06|537,629.99|
|Rental fee|550,048.00|433,548.00|
|Loss on work stoppages|26,150,123.83|6,241,343.86|
|Others|3,472,234.75|3,441,029.41|
|Total|69,143,939.29|48,923,908.29|

 Other notes:
65. Financial expenses
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Interest expenses|13,239,292.71|12,148,231.97|
|Interest income|-2,195,939.30|-2,421,475.63|
|Exchange gains and losses|-8,178,880.68|2,332,330.66|
|Others|1,079,524.35|1,833,929.49|
|Total|3,943,997.08|13,893,016.49|

 Other notes:
The financial expenses had a YOY decrease of71.61%, mainly was the influence of exchange rate, the exchange rate revenue had a YOY increase in the Reporting Period
66. Asset impairment loss
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|I. Bad debt loss|12,408,371.76|9,103,636.37|
|II. Inventory falling price loss|2,764,971.24|18,513,355.58|
|Total|15,173,343.00|27,616,991.95|

 Other notes:
67. Gains and losses from changes in fair value
Not applicable
68. Investment income
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||
|-|-|
|Investment income received from holding of||
||75,504.00|
|available-for-sale financial assets||
|Total|75,504.00|

Other notes:
69. Non-operating gains
Unit: RMB
|||||
|-|-|-|-|
||||Recorded in the amount of the|
|Item|Reporting Period|Same period of last year||
||||non-recurring gains and losses|
|Total gains from disposal of|10,214,203.76|||
||||10,214,203.76|
|non-current assets||||
|Including: Gains from disposal||||
||22,722.11||22,722.11|
|of fixed assets||||
|Gains from disposal of||||
||10,191,481.65||10,191,481.65|
|intangible assets||||
|Government subsidies|2,756,200.44|2,909,544.44|2,756,200.44|
|Others|912,455.78|27,835.00|912,455.78|
|Total|13,882,859.98|2,937,379.44|13,882,859.98|

 Government subsidies recorded into current profits and losses
Unit: RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|||||Whether|||||
|||||subsidies|||||
|||||influence|Special|||Related to|
||Distribution|Distributio||||Reporting|Same period||
|Item|||Nature|the current|subsidy|||assets/related|
||entity|n reason||||Period|of last year||
|||||profits and|or not|||income|
|||||losses or|||||
|||||not|||||
||||Due to engaged in||||||
||||special industry that||||||
||||the state encouraged||||||
|Government|||||||||
||Hubei||and supported,||||||
|Subsidy for||||||||Related to the|
||Department|Subsidy|gained subsidy|Yes|No|388,333.34|388,333.34||
|Highly toxic||||||||assets|
||of Finance||(obtaining in line||||||
|pesticide|||||||||
||||with the law and the||||||
||||regulations of||||||
||||national policy)||||||
|Special fund|Jingzhou||Subsidy gained due||||||
|||||||||Related to the|
|for|Environment|Subsidy|to confirming with|Yes|No|122,222.22|122,222.22||
|||||||||assets|
|management|al Protection||local government||||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
|of source of|Agency||attracting||||||
|pollution|||investment and local||||||
||||supportive policy||||||
||||etc.||||||
||||Subsidy gained due||||||
||||to confirming with||||||
||Jingzhou||||||||
|Sewage|||local government||||||
||Environment|||||||Related to the|
|disposal||Subsidy|attracting|Yes|No|33,333.34|33,333.34||
||al Protection|||||||assets|
|subsidy|||investment and local||||||
||Agency||||||||
||||supportive policy||||||
||||etc.||||||
||China||Subsidy gained due||||||
|The subsidies|National||to undertaking the||||||
|income of|Agricultural||state protecting one||||||
|||||||||Related to the|
|pesticides|Means of|Award|public utility or|Yes|No|654,600.00|785,100.00||
|||||||||income|
|federal|Production||social necessary||||||
|reserve|Group Co.,||products supply or||||||
||Ltd.||price controlling||||||
||||Due to engaged in||||||
||||special industry that||||||
|Appropriatio|||||||||
||||the state encouraged||||||
|n for CTC|China||||||||
||||and supported,||||||
|consuming|National|||||||Related to the|
|||Subsidy|gained subsidy|Yes|No|500,000.00|500,000.00||
|and|Chemical|||||||assets|
||||(obtaining in line||||||
|eliminating|Corporation||||||||
||||with the law and the||||||
|project|||||||||
||||regulations of||||||
||||national policy)||||||
||||Due to engaged in||||||
||||special industry that||||||
||||the state encouraged||||||
|Special fund|China||||||||
||||and supported,||||||
|for industry|National|||||||Related to the|
|||Subsidy|gained subsidy|Yes|No|388,888.88|388,888.88||
|clean|Chemical|||||||assets|
||||(obtaining in line||||||
|production|Corporation||||||||
||||with the law and the||||||
||||regulations of||||||
||||national policy)||||||
||||Due to engaged in||||||
||||special industry that||||||
||China||||||||
||||the state encouraged||||||
|Pyridine|National|||||||Related to the|
|||Subsidy|and supported,|Yes|No|491,666.66|491,666.66||
|project|Chemical|||||||assets|
||||gained subsidy||||||
||Corporation||||||||
||||(obtaining in line||||||
||||with the law and the||||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||||||
|-|-|-|-|-|-|-|-|-|
||||regulations of||||||
||||national policy)||||||
|Special fund|||||||||
|appropriation|||||||||
|for safety|||Subsidy from R&D||||||
||FINANCE||||||||
|production of|||Technical updating|||||Related to the|
||BUREAU|Award||Yes|No||200,000.00||
|2014|||and transformation,|||||income|
||OF WUXI||||||||
|received from|||etc.||||||
|Jingzhou|||||||||
|city|||||||||
||||Subsidy gained due||||||
||Financial||to confirming with||||||
||Bureau||local government||||||
|Land||||||||Related to the|
||development|Subsidy|attracting|Yes|No|77,156.00|||
|compensates||||||||assets|
||zone of||investment and local||||||
||Jingzhou||supportive policy||||||
||||etc.||||||
||Financial||||||||
|Industrial|Bureau||||||||
|||||||||Related to the|
|enterprise|development|Award||Yes|No|100,000.00|||
|||||||||income|
|award capital|zone of||||||||
||Jingzhou||||||||
|Total|--|--|--|--|--|2,756,200.44|2,909,544.44|--|

 Other notes:
70. Non-operating expenses
Unit: RMB
|||||
|-|-|-|-|
||||Recorded in the amount of the|
|Item|Reporting Period|Same period of last year||
||||non-recurring gains and losses|
|Loss on disposal of non-current|3,392.65|7,689.72||
||||3,392.65|
|assets||||
|Including: Loss on disposal of||||
||3,392.65|7,689.72|3,392.65|
|fixed assets||||
|Others||7,120.35||
|Total|3,392.65|14,810.07|3,392.65|

 Other notes:
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 71. Income tax expense
(1) Lists of income tax expense
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Current income tax expense|8,330,820.19|44,300,841.29|
|Deferred income tax expense|-2,031,845.17|-1,401,479.88|
|Total|6,298,975.02|42,899,361.41|

 (2) Adjustment process of accounting profit and income tax expense
Unit: RMB
|||
|-|-|
|Item|Reporting Period|
|Total profits|23,106,530.52|
|Current income tax expense accounted by tax and relevant||
||5,776,632.63|
|regulations||
|Influence of income tax before adjustment|134,955.00|
|Influence of not deductable costs, expenses and losses|1,049,037.13|
|Influence of deductible losses of unrecognized deferred income||
||-1,156,713.57|
|tax assets used in previous years||
|Influence of deductible temporary difference or deductible losses||
||495,063.83|
|of deferred income tax assets derecognized in Reporting Period.||
|Income tax expense|6,298,975.02|

 Other notes:
72. Other comprehensive income
See note.
73. Supplementary information to cash flow statement
(1) Other cash received relevant to operating activities:
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Interest income|2,195,939.30|2,421,475.63|
|Finance subsidies|754,600.00|985,100.00|
|Allowance for payment and others, etc.|1,370,463.47|2,651,426.93|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|Collect A/B shares withholding individual|||
||214,587.41|4,210,806.28|
|income tax|||
|Total|4,535,590.18|10,268,808.84|

 Note to other cash received relevant to operating activities:
(2) Other cash paid relevant to operating activities:
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Transport fees|22,966,420.71|14,734,431.08|
|Export fees|11,335,628.67|8,496,297.26|
|Handling charges|2,333,120.54|1,309,472.58|
|Business entertainment fees|1,291,244.83|930,935.70|
|Water & electricity fees|810,719.18|1,010,581.92|
|Office expenses|1,436,928.17|849,115.95|
|Premium|2,171,637.38|1,796,455.66|
|Business travel charges|954,517.82|875,240.56|
|Advertising and general publicity expense|263,118.74|265,010.60|
|Others|1,874,918.76|2,728,619.42|
|Total|45,438,254.80|32,996,160.73|

 Note to other cash paid relevant to operating activities:
(3) Other cash received relevant to investment activities
Not applicable
(4) Other cash paid relevant to investment activity
Not applicable
(5) Other cash received relevant to financing activities
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Agricultural Development Bank New|||
||120,800,000.00||
|District Construction Funds|||
|Total|120,800,000.00||

Note to other cash received relevant to financing activities:
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. (6) Other cash paid relevant to financing activities
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Freeze of margin notes|9,000,000.00|1,500,000.00|
|Total|9,000,000.00|1,500,000.00|

 Note to other cash paid relevant to financing activities:
74. Supplemental information for Cash Flow Statement
(1) Supplemental information for Cash Flow Statement
Unit: RMB
||||
|-|-|-|
|Supplemental information|Reporting Period|Same period of last year|
|1. Reconciliation of net profit to net cash|||
||--|--|
|flows generated from operating activities|||
|Net profit|16,807,555.50|117,644,347.98|
|Add: Provision for impairment of assets|15,173,343.00|27,616,991.95|
|Depreciation of fixed assets, of oil-gas|||
||116,433,547.32|94,263,333.78|
|assets, of productive biological assets|||
|Amortization of intangible assets|2,698,734.74|2,237,488.08|
|Losses on disposal of fixed assets, intangible|||
|assets and other long-term assets (gains:|-10,210,811.11|7,689.72|
|negative)|||
|Financial cost (gains: negative)|13,239,292.71|12,148,231.97|
|Investment loss (gains: negative)|-75,504.00||
|Decrease in deferred income tax assets|||
||-2,031,845.17|-1,401,479.88|
|(gains: negative)|||
|Decrease in inventory (gains: negative)|100,935,181.10|-31,611,280.98|
|Decrease in accounts receivable from|||
||-212,292,136.85|-195,550,207.80|
|operating activities (gains: negative)|||
|Increase in payables from operating|||
||6,041,561.38|-44,631,864.20|
|activities (decrease: negative)|||
|Net cash flows generated from operating|46,718,918.62|-19,276,749.38|
|activities|||
|2. Significant investing and financing|||
|activities without involvement of cash|--|--|
|receipts and payments|||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||
|-|-|-|
|3. Net increase in cash and cash equivalents:|--|--|
|Closing balance of cash|438,050,215.44|427,847,092.10|
|Less: Opening balance of cash|406,098,208.72|418,847,736.46|
|Net increase in cash and cash equivalents|31,952,006.72|8,999,355.64|

 (2) Net Cash paid of obtaining the subsidiary
Not applicable
(3) Net Cash receive from disposal of the subsidiary
Not applicable
(4) Cash and cash equivalents
Unit: RMB
||||
|-|-|-|
|Item|Closing balance|Opening balance|
|I. Cash|438,050,215.44|406,098,208.72|
|Bank deposit on demand|438,050,215.44|406,098,208.72|
|III. Closing balance of cash and cash|438,050,215.44|406,098,208.72|
|equivalents|||

Other notes:
75. Notes to items of changes in owner's equity
Not applicable
76. The assets with the ownership or use right restricted
Unit: RMB
||||
|-|-|-|
|Item|Closing book value|Restricted reason|
|Monetary capital|9,000,000.00|Cash deposit of bank acceptance|
|Total|9,000,000.00|--|

Other notes:
77. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||
|-|-|-|-|
||Closing foreign currency||Closing convert to RMB|
|Item||Exchange rate||
||balance||balance|
|Monetary capital|--|--|64,929,986.32|
|Including: USD|9,789,817.61|6.6324|64,929,986.32|
|Account receivable|--|--|277,408,823.09|
|Including: USD|41,826,310.70|6.6324|277,408,823.09|

 Other notes:
(2) Note to oversea entities including: for significant oversea entities, shall disclose main operating place, recording currency and selection basis, if there are changes into recording currency, shall also disclose the reason.
□ Applicable√ Not applicable
78. Arbitrage
Not applicable.
79. Other
VIII. Changes of merge scope
1. Business combination not under the same control
(1) Business combination under the same control during the Reporting Period
Not applicable.
(2) Combination cost and goodwill
Not applicable.
(3) The identifiable assets and liabilities of acquiree at purchase date
Not applicable.
(4) The profit or loss from equity held by the date before acquisition in accordance with the fair value measured again
Whether there is a transaction that through multiple transaction step by step to realize enterprises merger and gaining the control
during the Reporting Period
□ Yes√ No
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. (5) Note to merger could not be determined reasonable consideration or Identifiable assets, Fair value of liabilities of the acquiree at acquisition date or closing period of the merge
Not applicable.
(6) Other notes
2. Business combination under the same control
(1) Business combination under the same control during the Reporting Period
Not applicable.
(2) Combination cost
Not applicable.
(3) The book value of the assets and liabilities of the combined party at combining date
Not applicable.
3. Counter purchase
Not applicable.
4. The disposal of subsidiary
Whether there is a single disposal of the investment to subsidiary and lost control
□ Yes√ No
Whether there are multiple transactions step by step dispose the investment to subsidiary and lost control in Reporting Period□ Yes√ No
5. Other reasons for the changes in combination scope
Not applicable.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 6. Other
IX. Equity in other entities
1. Equity in subsidiary
(1) The structure of the enterprise group
||||||||
|-|-|-|-|-|-|-|
||Main operating||Nature of|Holding percentage (%)|||
|Name||Registration place||||Way of gaining|
||place||business|Directly|Indirectly||
|Sanonda|||||||
|(Jingzhou)|||||||
||||Manufacturing||||
|Pesticide|Jingzhou|Jingzhou||100.00%||Investment|
||||industry||||
|Chemical Co.,|||||||
|Ltd.|||||||
|Hubei Sanonda|||||||
|Foreign Trading|Jingzhou|Jingzhou|Trading|100.00%||Investment|
|Co., Ltd.|||||||
|Jingzhou|||||||
|||||||Under the same|
|Hongxiang|||Manufacturing||||
||Jingzhou|Jingzhou||100.00%||control business|
|Chemicals Co.,|||industry||||
|||||||combination|
|Ltd.|||||||

Notes: holding proportion in subsidiary different from voting proportion:
Basis of holding half or less voting rights but still been controlled investee and holding more than half of the voting rights not been controlled investee:
Significant structure entities and controlling basis in the scope of combination:
Basis of determine whether the Company is the agent or the principal:
Other notes:
(2) Significant not wholly owned subsidiary
Not applicable.
(3) The main financial information of significant not wholly owned subsidiary
Not applicable.
(4) Significant restrictions of using enterprise group assets and pay off enterprise group debt
Not applicable.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. (5) Provide financial support or other support for structure entities incorporate into the scope of consolidated financial statements
Not applicable.
2. The transaction of the Company with itsowner’s equity share changed but still controlling the subsidiary Not applicable.
3. Equity in joint venture arrangement or associated enterprise
Not applicable.
4. Significant common operation
Not applicable.
5. Equity of structure entity not including in the scope of consolidated financial statements
Not applicable.
6. Other
X. The risk related financial instruments
Main financial instruments of the Company included: Equity investment, loans, accounts receivable, accounts payable, etc., all the details of the financial instruments, see related projects of “Note.VI". Risks related to financial instruments and risk management policies to reduce risks are as follows. The management should control and monitor the risk exposure to ensure all risks within defined scope.
The Company use sensitivity analysis technology to analyze the reasonable of risk variables, influence of probable changes to the current profits and Stockholders' equity. Because rarely any risk variables change in isolation, and the correlation between variables for the eventual impact of the change of a risk variables will have a significant effect, thus, the aforesaid content was processing under the assumption of the change of each variable was conducted independently.
(I) Risk management objectives and policies
The goals of Company engaged in the risk management is to achieve the proper balance between the risks and benefits, reduced the negative impact to the Company operating performance risk to a minimum, maximized the profits of shareholders and other equity investors. Based on the risk management goal, the basic strategy of the Company's risk management is determine and analyze the various risks faced by the Company, set up the bottom line of risk and conducted appropriate risk management, and timely supervised various risks in a reliable way and controlled the risk within the range of limit.
1. Market risk
(1) Foreign exchange risk
Foreign exchange risk is referred to the risk incurred due to loss of changes in exchange rate. TheCompany’s foreign exchange risk was mainly related to USD, excepting theCompany’s export sale business settled by USD, in USD, the other main business settled by RMB. On 30 June 2016, in addition to the following assets or liabilities in statement was USD, theCompany’s assets or liabilities
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. was RMB balance. The foreign exchange risk incurred by assets and liabilities of foreign balance may have impact to the operation results of the Company.
||||
|-|-|-|
|Item|Closing amount|Opening amount|
|Cash and cash equivalents|64,929,986.32|11,972,040.83|
|Account receivable|277,408,823.09|139,665,775.45|

Sensitive analysis of foreign exchange risk:
Assumption of sensitive analysis of foreign exchange risk: all net investment arbitrage in overseas operation and cash flow arbitrage were highly effective. Base on the aforesaid assumption and remain no change in other variables, influence of change of exchange rate to current profits and losses and equity of shareholders was followed:
|||||
|-|-|-|-|
|Item|Change|Reporting Period|Same period of last year|

The Company pay close attention to influence of change in exchange rate to the foreign exchange rate of the Company The Company recently is according to the Forex Sale and Purchase Business Management and Operation Method of China National Chemical Financial Corporation issued by the Financial Assets Company authorized by China National Chemical Corporation.
(2) Interest rate risk- cash flow change risk
Cash flow change risk caused by financial instruments due to interest rate change is related to floating interest rate of bank loan. The policy of the Company is to maintain the floating rate of the loan
Sensitive analysis of interest rate risk:
Sensitive analysis of interest rate risk basing on the following assumption: the change of market interest rate influences interest income and cost of variable rate of financial instruments;
Base on the aforesaid assumption and remain no change in other variables, influence of change of interest rate to current profits and losses and equity of shareholders was followed:
|||||
|-|-|-|-|
|Item|Change|Reporting Period|Same period of last year|

2. Credit risk
On 30 June 2016, the largest credit risk exposure what may lead to the financial losses was the other party of the contract failed to
fulfill the obligations and causes loss of theCompany’s financial assets and financial guarantee, which including:
book value of financial assets recognized in consolidated balance sheet; as for the financial instruments measured at fair value, the
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. book value reflect its risk exposure, but not the largest one, the largest risk exposure will change when the future fair value changed. In order the reduce the credit risk, the Company establish credit assessment group response for recognizing line of credit, conducting credit approval and other monitor procedures to ensure that the necessary measures were used to recycle expired claims. In addition, the Company at each balance sheet date, review every single receivables recycling situation, to ensure that the money unable to recycle withdrawn provision for bad debt fully. Thus, the Company management believed that have assume the credit risk the Company shouldered had been greatly reduced.
The company's working capital was in bank with higher credit rating, so credit risk of working capital was low.
On balance sheet date, the single recognition of impairment, the amount of Jiangxi Nanchang Red Valley Plant Protection Center, through multiple collection failed, the Company had fully withrawn bad debt provision,
Due to the risk exposure of the Company distributed at multiple contract parties and multiple clients, there was no significant concentration of credit risk in the Company.
3. Liquidity Risk
When managing liquidity risk, the Company maintained themanagement’s believe that supervising the sufficient cash and cash equivalents to meet the operating demand of the Company and reduce the influence of the fluctuation of cash flow. The management of the Company supervises the usage situation of the bank loan and ensures the loan agreement.
The Company considered the bank loan as the capital resource. On 30 June 2016, the unused bank loan of the Company was RMB1295.91 million.
The analysis of financial liabilities according to the maturity of un-discounted remaining contract obligation was as following:
||||||
|-|-|-|-|-|
|Item|Within 1 year(including 1 year)|1-3years (including 3years)|3-5years (including 5years)|Over 5 years|
|Short-term loans|||||
|Long-term borrowings|254,000,000.00|290,090,000.00|||

(II) Financial assets transfer
No such cases during Reporting Period.
XI. The disclosure of the fair value
Not applicable.
XII. Related party and related Transaction
1. Information related to parent company of the Company
|||||||
|-|-|-|-|-|-|
||||||Proportion of voting|
|||||Proportion of share||
||||||rights owned by|
|Name of parent||||held by parent||
||Registration place|Nature of business|Registered capital||parent company|
|company||||company against the||
||||||against the Company|
|||||Company (%)||
||||||(%)|
|||Production and||||
|Jingzhou Sanonda||operation of||||
||Jingzhou, Hubei||240,661,000.00|20.15%|20.15%|
|Co., Ltd.||pesticide and||||
|||chemicals products||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd. Notes: Information on the parent company:
Note: The finial control of the Company was China National Chemical Corporation China National Chemical Corporation (hereinafter referred to as Chemical Corporation) 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:
2. Subsidiaries of the Company
See details to Notes IV.
3. Information on the joint ventures and associated enterprises of the Company
The details of significant joint venture and associated enterprise of the Company
4. Information on other related parties of the Company
|||
|-|-|
|Name|Relationship|
|China National Chemical Corporation|The finial control party|
|Jiamusi Heilong Agrochemicals Co., Ltd.|Under the same control of China National Chemical Corporation|
|Beijing Grand AgroChem., Ltd.|Under the same control of China National Chemical Corporation|
|Bluestar (Beijing) Chemical Machinery Co., Ltd.|Under the same control of China National Chemical Corporation|
|China National Agrochemical Corporation|Under the same control of China National Chemical Corporation|
|Jiangsu Anpon Electrochemical Co., Ltd.|Under the same control of China National Chemical Corporation|
|Shangdong Dacheng Agrochemical Co., Ltd.|Under the same control of China National Chemical Corporation|
|China National Chemical Financial Corporation|Under the same control of China National Chemical Corporation|
|Bluestar Environmental Engineering Co., Ltd.|Under the same control of China National Chemical Corporation|
|Haohua Engineering Co., Ltd.|Under the same control of China National Chemical Corporation|
|ADAMA Agricultural Solutions Ltd.|Under the same control of China National Chemical Corporation|

 Other notes:
5. List of related-party transactions
(1) Information on acquisition of goods and reception of labor service (unit: ten thousand Yuan)
Information on acquisition of goods and reception of labor service
Unit: RMB
2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||||
|-|-|-|-|-|-|
||||The approval trade|Whether exceed trade|Same period of last|
|Related-party|Content|Reporting Period||||
||||credit|credit or not|year|
|Bluestar (Beijing)||||||
|Chemical|Equipment cost|2,777.78||No|31,538.46|
|Machinery Co., Ltd.||||||
|Beijing Grand|Purchase of raw|||||
|||6,094,017.09||No||
|AgroChem.,Ltd.|material|||||
|Haohua|Engineering|||||
|Engineering Co.,|materials and||||2,586,371.59|
|Ltd.|services|||||

Information of sales of goods and provision of labor service
Unit: RMB
|||||
|-|-|-|-|
|Related-party|Content|Reporting Period|Same period of last year|
|ADAMA Agricultural Solutions||||
||Sales of pesticides|87,387,039.04|56,580,674.73|
|LTD.||||
|Jiangsu Anpon Electrochemical||||
||Sales of pesticides|223,008.85||
|Co., Ltd.||||

Notes:
(2) Related trusteeship/contract
Not applicable.
(3) Information of related lease
Not applicable.
(4) Related-party guarantee
The Company was guarantor:
Unit: RMB
||||||
|-|-|-|-|-|
|||||Execution accomplished|
|Secured party|Guarantee amount|Start date|End date||
|||||or not|
|Hubei Sanonda Foreign|||||
||120,000,000.00|23 June2013|22 June 2017|Yes|
|Trading Co., Ltd.|||||
|Hubei Sanonda Foreign|||||
||65,000,000.00|26 January 2014|26 January 2017|Yes|
|Trading Co., Ltd.|||||
|Hubei Sanonda Foreign|||||
||64,000,000.00|11 December 2013|10 December 2018|No|
|Trading Co., Ltd.|||||
|Hubei Sanonda Foreign|60,000,000.00|29 April 2014|28 April 2017|Yes|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||||||
|-|-|-|-|-|
|Trading Co., Ltd.|||||
|Hubei Sanonda Foreign|||||
||60,000,000.00|29 April 2015|28 April 2018|Yes|
|Trading Co., Ltd.|||||
|Hubei Sanonda Foreign|||||
||50,000,000.00|22 January 2013|21 January 2017|Yes|
|Trading Co., Ltd.|||||

The Company was Secured party
Unit: RMB
||||||
|-|-|-|-|-|
|||||Execution accomplished|
|Guarantor:|Guarantee amount|Start date|End date||
|||||or not|
|Jingzhou Sanonda Co.,|||||
||170,000,000.00|26 December 2014|25 December 2019|No|
|Ltd.|||||
|Jingzhou Sanonda Co.,|||||
||140,000,000.00|1 February 2015|1 January 2018|Yes|
|Ltd.|||||
|Jingzhou Sanonda Co.,|||||
||140,000,000.00|1 February 2016|31 January 2019|No|
|Ltd.|||||
|Jingzhou Sanonda Co.,|||||
||50,000,000.00|13 March 2015|13 March 2018|Yes|
|Ltd.|||||
|China National|||||
|Agrochemical|300,000,000.00|19 November 2014|17 November 2019|No|
|Corporation|||||
|China National|||||
|Agrochemical|150,000,000.00|10 September 2013|10 September 2018|No|
|Corporation|||||
|China National|||||
|Agrochemical|50,000,000.00|19 March 2015|19 March 2019|No|
|Corporation|||||
|China National Chemical|||||
||200,000,000.00|25 September 2013|25 September 2020|No|
|Corporation|||||
|China National Chemical|||||
||160,000,000.00|10 June 2014|9 June 2021|No|
|Corporation|||||
|China National Chemical|||||
||150,000,000.00|14 October 2013|13 October 2020|No|
|Corporation|||||

Notes:
(5) Inter-bank lending of capital of relatedparties：
Not applicable.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. (6) Related party asset transfer and debt restructuring
Not applicable.
(7) Rewards for the key management personnel
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Rewards for the key management|||
||850,000.00|840,791.00|
|personnel|||

(8) Other related-party transactions
1. The parent company of theGroup—Sanonda Group Corporation paid& gained wages and social security through the Group with a total of RMB148, 392.6
2. Balance of bank deposit of Chemchina Finance Co., Ltd. of the Group at the period- begin was of RMB140,000,000.00, period-end was of RMB 100,958,989.89, and balance of short-term loan at the period-begin was of RMB 0, period-end was of RMB0; Interest of bank deposit of this year was of RMB958,989.89.
6. Receivables and payables of related parties
(1) Receivables
Unit: RMB
|||||||
|-|-|-|-|-|-|
|||Closing balance||Opening balance||
|Name o f item|Related-party|||||
|||Book balance|Bad debt provision|Book balance|Bad debt provision|
||ADAMA|||||
|Account receivable|Agricultural|63,422,060.48|3,171,103.02|19,683,913.31|984,195.67|
||Solutions Ltd|||||

(2) Payables
Unit: RMB
|||||
|-|-|-|-|
|Name o f item|Related-party|Closing book balance|Opening book balance|
||Bluestar (Beijing) Chemical|||
|Accounts payable||2,580,000.00|6,094,350.00|
||Machinery Co., Ltd.|||
|Accounts payable|Haohua Engineering Co., Ltd.|0.00|171,940.88|
|Accounts payable|Beijing Grand AgroChem.,Ltd.|709,260.00|79,260.00|
||Jiamusi Heilong Agrochemicals|||
|Accounts received in advance||10,020.00|10,020.00|
||Co., Ltd.|||
|Accounts received in advance|Shangdong Dacheng|1,500.00|1,500.00|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
||
|-|
|Agrochemical Co., Ltd.|

7. Related party commitment
Not applicable.
8. Other
XIII. Stock payment
1. The Stock payment overall situation
□ Applicable√ Not applicable
2. The Stock payment settled by equity
□ Applicable√ Not applicable
3. The Stock payment settled by cash
□ Applicable√ Not applicable
4. Modification and termination of the stock payment
Not applicable.
5. Other
XIV. Commitments
1. Significant commitments
As of 30 June 2016, there were no significant commitments to be disclosed.
2. Contingency
(1) Significant contingency at balance sheet date
As of 30 June 2016, there were no significant contingency to be disclosed.
(2) The Company have no significant contingency to disclose, also should be stated
There was no significant contingency in the Company.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 3. Other
XV. Events after balance sheet date
1. Significant events had not adjusted
Not applicable.
2. Profit distribution
Not applicable.
3. Sales return
Not applicable.
4. Notes of other significant events
As of 30 June 2016, there was no other significant event after balance sheet date.
XVI. Other significant events
1. The accounting errors correction in previous period
Not applicable.
2. Debt restructuring
Not applicable.
3. Replacement of assets
Not applicable.
4. Pension plan
Not applicable.
5. Discontinuing operation
Not applicable.
6. Segment information
Not applicable.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 7. Other important transactions and events have an impact on investors decision-making
Not applicable.
XVII. Notes of main items in the financial statements of the Company
1. Accounts receivable
(1) Accounts receivable classified by category
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provision|||Book balance||Bad debt provision|||
|||||Withdra|||||||
|Category|||||Book||||||
|||Proportio||wal|||Proportio||Withdrawal|Book value|
||Amount||Amount||value|Amount||Amount|||
|||n||proportio|||n||proportion||
|||||n|||||||
|Accounts receivable|||||||||||
|withdrawal of bad|||||||||||
||633,023,385.70||14,508,4||618,514,9|361,912||9,638,653||352,274,07|
|debt provision of by||99.91%||2.29%|||99.84%||2.66%||
||||11.52||74.18|,727.20||.80||3.40|
|credit risks|||||||||||
|characteristics:|||||||||||
|Accounts receivable|||||||||||
|with insignificant|||||||||||
|single amount for|584,457.52||584,457.|||584,457||584,457.5|||
|||0.09%||100.00%|||0.16%||100.00%||
|which bad debt|||52|||.52||2|||
|provision separately|||||||||||
|accrued|||||||||||
||633,607,843.22||15,092,8||618,514,974.18|362,497||10,223,11||352,274,073.40|
|Total||100.00%||2.38%|||100.00%||2.82%||
||||69.04|||,184.72||1.32|||

 Accounts receivable with single significant amount and withdrawal bad debt provision separately at end of period
□ Applicable√ Not applicable
In the groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
Unit: RMB
|||||
|-|-|-|-|
||Closing balanceAccount receivable Bad debt provision Withdrawal proportion|||
|Aging||||
|||Bad debt provision|Withdrawal proportion|
|Subentry within 1 year||||
|Within 1 year|131,629,920.0|4 6,581,496.00|5.00%|
|Subtotal of within 1 year|131,629,920.0|4 6,581,496.00|5.00%|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||
|-|-|-|-|
|1 to 2 years|3,791,826.94|379,182.69|10.00%|
|2 to 3 years|539,492.20|161,847.66|30.00%|
|Over 3 years|7,440,959.29|7,385,885.17|99.26%|
|4 to 5 years|110,148.25|55,074.13|50.00%|
|Over 5 years|7,330,811.04|7,330,811.04|100.00%|
|Total|143,402,198.47|14,508,411.52||

Notes:
In the groups, accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable√ Not applicable
In the groups, accounts receivable adopting other methods to withdraw bad debt provision:
|||
|-|-|
|Name of the group|Closing balance|

Accounts receivable with significant single amount and individually withdrawn bad debt provision at the end of the year
|||
|-|-|
|Account receivable|Closing balance|

(2) Accounts receivable withdraw, reversed or collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB4,869,757.72; the amount of the reversed or collected part during the Reporting Period was of RMB000.
Significant amount of reversed or recovered bad debt provision: not applicable.
(3) Particulars of the actual verification of accounts receivable during the Reporting Period
Not applicable.
(4) Top five of account receivable of closing balance collected by arrears party
The total amount of top five of account receivable of closing balance collected by arrears party was RMB547,242,999.52,86.37% of total closing balance of account receivable, the relevant closing balance of bad debt provision withdrawn was RMB2,881,090.61.
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. (5) Derecogniziton of account receivable due to the transfer of financial assets
(6) The amount of the assets and liabilities formed by the transfer and the continues involvement of accounts receivable
Not applicable.
2. Other accounts receivable
(1) Other account receivable classified by category
Unit: RMB
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Closing balance|||||Opening balance|||||
||Book balance||Bad debt provisionWithdrawalAmountproportion|||Book balance||Bad debt provision|||
||Amount||||||||||
|Category|||||Book||||||
|||Proportio|||||Proportio||Withdrawal|Book value|
||||Amount||value|Amount||Amount|||
|||n|||||n||proportion||
|Other accounts|6,020,149.56|||87.62%|||||||
|receivable withdrawn|||||||||||
||||5,274,88||745,265.1|6,784,7||5,248,915||1,535,805.5|
|bad debt provision||100.00%|||||100.00%||77.36%||
||||4.43||3|21.32||.77||5|
|according to credit|||||||||||
|risks characteristics|||||||||||
||6,020,149.56||5,274,88|87.62%|745,265.13|6,784,7||5,248,915||1,535,805.55|
|Total||100.00%|||||100.00%||77.36%||
||||4.43|||21.32||.77|||

 Other receivable with single significant amount and withdrawal bad debt provision separately at end ofperiod：
□ Applicable√ Not applicable
In the groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable□ Not applicable
Unit: RMB
|||||
|-|-|-|-|
||Closing balance|||
|Aging||||
||Other accounts receivable|Bad debt provision|Withdrawal proportion|
|Subentry within 1 year||||
|Within 1 year|605,063.68|30,253.18|5.00%|
|Subtotal of within 1 year|605,063.68|30,253.18|5.00%|
|1 to 2 years|29,513.72|2,951.37|10.00%|
|Over 3 years|5,385,572.16|5,241,679.88|97.33%|
|3 to 4 years|20,000.00|10,000.00|50.00%|
|4 to 5 years|267,784.57|133,892.29|50.00%|

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||
|-|-|-|-|
|Over 5 years|5,097,787.59|5,097,787.59|100.00%|
|Total|6,020,149.56|5,274,884.43||

Notes:
In the groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable√ Not applicable
In the groups, other accounts receivable adopting other methods to withdraw bad debt provision:
□ Applicable√ Not applicable
(2) Accounts receivable withdraw, reversed or collected during the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB25,968.66; the amount of the reversed or collected part during the Reporting Period was of RMB000.
Of which the significant amount of the reversed or collected part during the Reporting Period: not applicable.
(3) Particulars of the actual verification of other accounts receivable during the Reporting Period
(4) Other account receivable classified by account nature
Unit: RMB
||||
|-|-|-|
|Nature|Closing book balance|Opening book balance|
|Liquidation amount of investment fund|3,398,275.80|3,398,275.80|
|Turnover accounts with the subsidiary|0.00|1,120,146.36|
|Pretty cash|771,957.64|714,944.37|
|Cash pledge|520,000.00|500,000.00|
|Liquidation amount of goods payment|548,500.00|548,500.00|
|Others|781,416.12|502,854.79|
|Total|6,020,149.56|6,784,721.32|

 (5) The top five other account receivable classified by debtor at period-end
Unit: RMB
|||||||
|-|-|-|-|-|-|
||||||Closing balance of|
|Name of the entity|Nature|Closing balance|Aging|Proportion%||
||||||bad debt provision|
|Shantou Biyue Plastic|Liquidation amount|||||
|||3,125,000.00|Over 5 years|51.91%|3,125,000.00|
|Co., Ltd.|of investment fund|||||
|Hubei Jingzhou||||||
|Shashi Agricultural|Liquidation amount|||||
|||548,500.00|Over 5 years|9.11%|548,500.00|
|Production Materials|of goods payment|||||
|Co., Ltd.||||||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||||
|-|-|-|-|-|-|
|Jingzhou Production||||||
|Safety Supervision|Cash pledge|300,000.00|Over 5 years|4.98%|300,000.00|
|Bureau||||||
|Jingzhou Real||||||
||House renewal fund|237,784.57|4-5 years|3.95%|118,892.29|
|Estate Administration||||||
|Zhuhai Chuchang||||||
|International|Liquidation amount|||||
|||144,288.80|Over 5 years|2.40%|144,288.80|
|Development Co.,|of investment fund|||||
|Ltd.||||||
|Total|--|4,355,573.37|--|72.35%|4,236,681.09|

 (6) Account receivable involving government subsidies
Not applicable.
(7) Other account receivable derecognized due to the transfer of financial assets
Not applicable.
(8) Amount of transfer other account receivable and assets and liabilities formed by its continuous involvement
Not applicable.
3. Long-term equity investment
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||Closing balance|||Opening balance|||
|Item||Impairment|||Impairment||
||Book balance||Book value|Book balance||Book value|
|||provision|||provision||
|Investment to the|||||||
||80,026,635.41|24,500,000.00|55,526,635.41|80,026,635.41|24,500,000.00|55,526,635.41|
|subsidiary|||||||
|Total|80,026,635.41|24,500,000.00|55,526,635.41|80,026,635.41|24,500,000.00|55,526,635.41|

 (1) Investment to the subsidiary
Unit: RMB
||||||||
|-|-|-|-|-|-|-|
||||||Withdrawn||
|||||||Closing balance|
||||||impairment||
|Investee|Opening balance|Increase|Decrease|Closing balance||of impairment|
||||||provision in the||
|||||||provision|
||||||Reporting Period||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd.
|||||
|-|-|-|-|
|Jingzhou||||
|Hongxiang||||
||37,619,905.41|37,619,905.41||
|Chemicals Co.,||||
|Ltd.||||
|Sanonda||||
|(Jingzhou)||||
||30,413,700.00|30,413,700.00|24,500,000.00|
|Pesticide Chemical||||
|Co., Ltd.||||
|Hubei Sanonda||||
|Foreign Trading|11,993,030.00|11,993,030.00||
|Co., Ltd.||||
|Total|80,026,635.41|80,026,635.41|24,500,000.00|

 (2) Investment to joint ventures and associated enterprises
Not applicable.
(3) Other notes
4. Revenues and operating costs
Unit: RMB
||||||
|-|-|-|-|-|
||Reporting Period||Same period of last year||
|Item|||||
||Sales revenue|Cost of sales|Sales revenue|Cost of sales|
|Main operations|917,457,017.85|778,462,461.80|1,189,551,459.81|903,197,965.34|
|Other operations|79,431,984.15|77,961,874.51|70,429,352.26|68,194,146.03|
|Total|996,889,002.00|856,424,336.31|1,259,980,812.07|971,392,111.37|

 Other notes:
5. Investment income
Unit: RMB
||||
|-|-|-|
|Item|Reporting Period|Same period of last year|
|Investment income received from holding of|||
||75,504.00||
|available-for-sale financial assets|||
|Total|75,504.00||

2016 Semi-annual Report of Hubei Sanonda Co., Ltd. 6. Other
XVIII. Supplementary materials
1. Items and amounts of extraordinary gains and losses
√ Applicable□ Not applicable
Unit: RMB
||||
|-|-|-|
|Item|Amount|Explanation|
|Gains/losses on the disposal of non-current|||
||10,210,811.11||
|assets|||
|Tax rebates, reductions or exemptions due to|||
|approval beyond authority or the lack of|2,756,200.44||
|official approval documents|||
|Other non-operating income and expenses|||
||912,455.78||
|other than the above|||
|Less: Income tax effects|3,469,866.83||
|Total|10,409,600.50|--|

Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to 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√ Not applicable
2. Return on equity and earnings per share
|||||
|-|-|-|-|
|||EPS（Yuan/share）||
|Profit as of Reporting Period|Weighted average ROE (%)|||
|||EPS-basic|EPS-diluted|
|Net profit attributable to common||0.0283|0.0283|
||0.80%|||
|shareholders of the Company||||
|Net profit attributable to common||||
|shareholders of the Company after||||
||0.30%|0.0108|0.0108|
|deduction of non-recurring profit||||
|and loss||||

3. Differences between accounting data under domestic and overseas accounting standards
(1) Differences of net profit and net assets disclosed in financial reports prepared under international and Chinese accounting standards
□ Applicable√ Not applicable
2016 Semi-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√ Not applicable
(3) Explain reasons for the differences between accounting data under domestic and overseas accounting standards, for audit data adjusting differences had been foreign audited, should indicate the name of the foreign institutions
4. Other
2016 Semi-annual Report of Hubei Sanonda Co., Ltd. Section X. Documents Available For Reference
(I) Financial Statements carried with signatures and seals of Legal Representative and Accounting Principal, as well as Head of the Accounting Organ;
(II) In the Reporting Period, originals of all documents of the Company ever disclosed publicly in media designated by China Securities Regulatory Commission as well as the originals of all the public notices were deposited in the office of the Company. Hubei Sanonda Co., Ltd. Legal Representative: An Liru 17 August 2016