Hubei Sanonda Co., Ltd. 2013 Annual Report
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2013 Annual Report of Hubei Sanonda Co., Ltd. Hubei Sanonda Co., Ltd. 2013 Annual Report March 2014 1 2013 Annual Report of Hubei Sanonda Co., Ltd. Catalogue 2013 Annual Report ............................................................................................................................. Section I. Important Reminders, Catalogue & Explanation .......................................................... 3 Section II. Company Profile .............................................................................................................. 5 Section III. Accouonting & Business Highlights ............................................................................. 7 Section IV. Report of the Board of Directors ................................................................................... 9 Section V. Significant Events ........................................................................................................... 29 Section VI. Change in Shares & Shareholders .............................................................................. 44 Section VII. Directors, Supervisors, Senior Management Staff & Employees ........................... 52 Section VIII. Corporate Governance ............................................................................................. 59 Section IX. Internal Control ........................................................................................................... 67 Section X. Financial Report ............................................................................................................ 69 Section XI. Documents Available for Reference .......................................................................... 185 2 2013 Annual Report of Hubei Sanonda Co., Ltd. Section I. Important Reminders, Catalogue & Explanation The Board of Directors, the Supervisory Committee, as well as all directors, supervisors and senior management staff of Hubei Sanonda Co., Ltd. (hereinafter referred to as “the Company”) warrant that this report is factual, accurate and complete without any false record, misleading statement or material omission. And they shall be jointly and severally liable for that. All directors attended the board session for reviewing this report. The Company’s profit distribution preplan upon review and approval of this board session: Based on the total shares of the Company as at 31 Dec. 2013, a cash dividend of RMB 0.50 (tax included) will be distributed for every 10 shares held by shareholders. No bonus shares will be granted and no capital reserve will be turned into share capital. Mr. Li Zuorong, person in charge of the Company, Mr. He Xuesong, person in charge of the accounting work and the accounting organization (chief of accounting), hereby confirm that the Financial Report enclosed in this report is factual, accurate and complete. Please note that the future development strategies, the work plan for 2014 and possible risks in the future are described in “Section IV. Report of the Board of Directors”—“Outlook of the Company’s future development”. The media designated for information disclosure in 2013 were China Securities Journal, Securities Times, Ta Kung Pao (HK) and www.cninfo.com.cn. And all information about the Company shall be subject to the information disclosed by the Company on the aforesaid designated media. Investors are kindly reminded to pay attention to possible investment risks. This report is prepared in both Chinese and English. Should there be any discrepancy between the two versions, the Chinese version shall prevail. 3 2013 Annual Report of Hubei Sanonda Co., Ltd. Explanation Refers Term Contents to Company, the Company Refers Hubei Sanonda Co., Ltd. to Refers CSRC Hubei The Hubei bureau of China Securities Regulatory Commission to Refers CSRC China Securities Regulatory Commission to Refers SSE Shenzhen Stock Exchange to Refers Reporting period, this period, current year Year 2013 to Refers China National Agrochemical Corporation (holding 100% equity of CNAC to Sanonda Group, the Company’s controlling shareholder) Refers MAI Makhteshim-Agan Industries Ltd.——a subsidiary controlled by CNAC to 4 2013 Annual Report of Hubei Sanonda Co., Ltd. Section II. Company Profile I. Basic information of the Company Stock abbreviation SLDA, SLDB Stock code 000553, 200553 Stock exchange listed with Shenzhen Stock Exchange Chinese name of the Company 湖北沙隆达股份有限公司 Abbr. of the Chinese name of 沙隆达 the Company English name of the Company HUBEI SANONDA CO., LTD. (if any) Abbr. of the English name of SANONDA the Company (if any) Legal representative of the Li Zuorong Company Registered address No. 93, Beijing East Road, Jingzhou, Hubei Postal code for the registered 434000 address Office address No. 93, Beijing East Road, Jingzhou, Hubei Postal code for the office 434000 address Internet website of the http://www.sanonda.cn Company Email address [email protected] II. Contact us Company Secretary Securities Affairs Representative Name Li Zhongxi Liang Jiqin No. 93, Beijing East Road, Jingzhou, No. 93, Beijing East Road, Jingzhou, Contact address Hubei Hubei Tel. 0716-8208632 0716-8208232 Fax 0716-8321099 0716-8321099 E-mail [email protected] [email protected] 5 2013 Annual Report of Hubei Sanonda Co., Ltd. III. About information disclosure and where this report is placed Newspapers designated by the Company for China Securities Journal, Securities Times, and Ta Kung Pao information disclosure Internet website designated by CSRC for http://www.cninfo.com.cn disclosing this report Where this report is placed Office of the Company IV. Change of the registered information Registration code of Registration date Registration place Business license No. Organizational code taxation Hubei Administration for Initial registration 30 Nov. 1993 420000400004491 421001706962287 70696228-7 Industry & Commerce At the end of the 23 May 2013 Unchanged Unchanged Unchanged Unchanged reporting period Changes of the main business since listing Unchanged (if any) Changes of the controlling shareholder (if Unchanged any) V. Other information The CPAs firm hired by the Company: Name Ruihua Certified Public Accountants (LLP) 5-11F, West Tower, China Overseas Property Plaza, Building No. 7, Compound No. 8, Xibinhe Office address Road, Yongding Men, Dongcheng District, Beijing, P.R.C. Signing accountants Hao Guomin, Kuang Xiaochang Sponsor engaged by the Company to conduct sustained supervision during the reporting period □ Applicable √ Inapplicable Financial consultant engaged by the Company to conduct sustained supervision during the reporting period □ Applicable √ Inapplicable 6 2013 Annual Report of Hubei Sanonda Co., Ltd. Section III. Accounting & Business Highlights I. Major accounting data and financial indicators Does the Company adjust retrospectively or restate accounting data of previous years due to change of the accounting policy or correction of any accounting error? □ Yes √ No Increase or decrease of 2013 2012 this year over last year 2011 (%) Operating revenue (RMB Yuan) 3,078,467,310.53 2,345,146,528.97 31.27% 1,901,075,791.57 Net profit attributable to shareholders of the Company 320,811,958.67 103,768,969.35 209.16% 52,863,980.46 (RMB Yuan) Net profit attributable to shareholders of the Company after 326,183,175.01 106,185,400.70 207.18% 50,567,266.69 extraordinary gains and losses (RMB Yuan) Net cash flows from operating 799,701,589.04 233,590,424.82 242.35% 175,416,106.94 activities (RMB Yuan) Basic EPS (RMB Yuan/share) 0.5402 0.1747 209.22% 0.089 Diluted EPS (RMB Yuan/share) 0.5402 0.1747 209.22% 0.089 Weighted average ROE (%) 22.88% 8.62% 14.26% 4.67% Increase or decrease of As at 31 Dec. 2013 As at 31 Dec. 2012 this year-end than last As at 31 Dec. 2011 year-end (%) Total assets (RMB Yuan) 2,708,271,174.34 2,405,494,385.09 12.59% 2,292,650,234.81 Net assets attributable to shareholders of the Company 1,546,189,571.66 1,255,536,761.52 23.15% 1,156,347,732.27 (RMB Yuan) II. Items and amounts of extraordinary gains and losses Unit: RMB Yuan Item 2013 2012 2011 Note Gain/loss on the disposal of non-current assets (including the offset part of the asset -10,822,583.41 -3,329,557.24 561,890.24 impairment provisions) Government grants recognized in the current 3,270,500.35 3,650,934.78 3,053,885.18 7 2013 Annual Report of Hubei Sanonda Co., Ltd. period, except for those acquired in the ordinary course of business or granted at certain quotas or amounts according to the government’s unified standards Gain/loss on debt restructuring -152,001.61 -694,017.10 Current net gains and losses of subsidiaries acquired in business combination under the -10,395.14 same control from period-begin to combination date Non-operating income and expense other 497,140.96 -2,834,030.14 -448,237.69 than the above Less: Income tax effects -1,801,735.93 -801,667.43 791,884.43 Minority interests effects (after tax) -33,991.44 11,429.08 68,544.39 Total -5,371,216.34 -2,416,431.35 2,296,713.77 -- Explain the reasons if the Company classifies an item as an extraordinary gain/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Extraordinary Gains and Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item □ Applicable √ Inapplicable 8 2013 Annual Report of Hubei Sanonda Co., Ltd. Section IV. Report of the Board of Directors I. Overview In an extremely complex macro-economic