Hubei Sanonda Co., Ltd. Third Quarter Report 2017
HUBEI SANONDA CO., LTD.
THIRD QUARTER REPORT 2017
Adama Agricultural Solutions Ltd., one of the world's leading crop protection companies, and Hubei Sanonda Ltd. have combined, creating the only integrated, publicly traded Global-China crop protection company.
At ADAMA, we strive to Create Simplicity in Agriculture – offering farmers effective products and services that simplify their lives and help them grow. With one of the most comprehensive and diversified portfolios of differentiated, quality products, our 6,600 strong team reaches farmers in over 100 countries, providing them with solutions to control weeds, insects and disease, and improve their yields
October 2017
1 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Section I Important Statements
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.
Chen Lichtenstein, company legal representative, Aviram Lahav, Chief
Financial Officer & Chief of the accounting organ, 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.
2 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Section II Financial Highlights & Shareholder Changes
I Highlights of accounting data and financial indicators
Whether the Company performs any retroactive adjustments to or restatements of its accounting data of last year due to change in accounting policies or correction of accounting errors √ Yes □No Unit: RMB’000
31 December 2016 +/- (%) 30 September After 2017 Before adjustment After adjustment adjustment
Total assets 37,271,636 2,984,884 36,492,514 2.14%
Net assets attributable to 17,505,476 2,005,058 16,917,794 3.47% shareholders of the Company
January-September July-September 2016 +/- (%) January- +/- (%) July-September 2016 September 2017 Before After After Before After After 2017 adjustment adjustment adjustment adjustment adjustment adjustment
Operating revenue 5,624,175 431,963 5,332,441 5.47% 18,394,239 1,437,660 17,105,727 7.53%
Net profit attributable to 282,520 3,693 98,142 187.87% 1,599,514 20,500 666,460 140.00% shareholders of the Company
Net profit attributable to shareholders of the Company 270,892 2,872 2,772 9,672.44% 436,359 9,269 8,506 5,030.13% excluding exceptional profit and loss
Net cash flows from operating 2,521,540 180,099 2,930,134 (13.94%) activities
Basic EPS 0.1206 0.0062 0.0607 98.83% 0.6830 0.0345 0.4120 65.76% (RMB/share)
Diluted EPS 0.1206 0.0062 0.0607 98.83% 0.6830 0.0345 0.4120 65.76% (RMB/share)
3 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Weighted average return on net 1.61% 0.17% 0.80% 101.09% 9.28% 0.97% 5.58% 66.31% assets
Please see key additional information and further details included in the Annex. Unit: RMB’000
Item January-September 2017 Note
Gains/losses on the disposal of non-current assets (1,697) (including the offset part of asset impairment provisions)
Government grants recognized in the current period, except for those acquired in the ordinary course of business or 9,092 granted at certain quotas or amounts according to the country’s unified standards
Profit or loss of subsidiaries generated before combination date of a business combination involving enterprises under 1,243,340 common control
Other non-operating income and expenses other than the 5,349 above
Less: Income tax effects 92,929
Total 1,163,155 --
Explanation of why the Company classified an item as exceptional profit/loss according to the definition in the Explanatory Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Profit and Loss, or reclassified any exceptional profit/loss item given as an example in the said explanatory announcement to recurrent profit/loss □ Applicable √ Not applicable No such cases in the Reporting Period.
II Total number of shareholders and shareholdings of top 10 shareholders at the period-end
1. Total number of ordinary shareholders and preference shareholders who had resumed their voting right & shareholdings of top 10 shareholders at the period-end Unit: share
Total number of preference 55,895 Total number of ordinary shareholders who had (including shareholders at the end of the resumed their voting right 0 A and B shares) Reporting Period at the end of the Reporting
Period (if any)
Shareholdings of top 10 shareholders
Number of Pledged or frozen shares Name of Nature of Shareholding Number of restricted shareholder shareholder percentage shares held Status Number shares held
4 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
China National
Agrochemical State-owned 75.30% 1,810,883,039 1,810,883,039 Corporation legal person
(CNAC)
Jingzhou Please refer to Sanonda State-owned 4.98% 119,687,202 the note under - - Holding Co., legal person the table. Ltd.
ADAMA Celsius Foreign legal 2.62% 62,950,659 - - - B.V. person
Portfolio 118, National Social Others 0.23% 5,599,856 - - - Security Fund
Domestic Xie Qingjun 0.19% 4,490,033 natural person
State-owned Assets Administration State 0.17% 4,169,266 - - - Bureau of Qichun County
GUOTAI JUNAN Foreign legal SECURITIES(H 0.16% 3,888,862 person ONGKONG) LIMITED
Domestic Shi Yun 0.12% 2,830,000 - - - natural person
Domestic Zhou Qiping 0.09% 2,093,045 natural person
Bank of China Limited--- Yinhua Quality Growth Hybrid Others 0.08% 1,996,240 - - - Securities Investment Funds
Shareholdings of top 10 non-restricted shareholders
Number of non-restricted shares held at the Type of shares Name of shareholder period-end Type Number
Jingzhou Sanonda Holding Co., 119,687,202 RMB ordinary 119,687,202
5 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Ltd. Please refer to the note under the table. share
Domestically ADAMA Celsius B.V. 62,950,659 listed foreign 62,950,659 share
Portfolio 118, National Social RMB ordinary 5,599,856 5,599,856 Security Fund share
Domestically Xie Qingjun 4,490,033 listed foreign 4,490,033 share
State-owned Assets RMB ordinary Administration Bureau of Qichun 4,169,266 4,169,266 share County
Domestically GUOTAI JUNAN SECURITIES 3,888,862 listed foreign 3,888,862 (HONGKONG) LIMITED share
RMB ordinary Shi Yun 2,830,000 2,830,000 share
RMB ordinary Zhou Qiping 2,093,045 2,093,045 share
Bank of China Limited--- Yinhua RMB ordinary Quality Growth Hybrid Securities 1,996,240 1,996,240 share Investment Funds
Zhongjiang International Trust RMB ordinary 1,820,000 1,820,000 Co., Ltd share
China National Agrochemcial Corporation, Jingzhou Sanonda Shareholding Co., Ltd. and ADAMA Celsius B.V. are related parties. The latter two are under the same control of China National Chemical Agrochemical Corporation and acting-in-concert Related or act-in-concert parties parties as prescribed in the Administrative Methods for Acquisition of Listed among the shareholders above 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. STATE-OWNED ASSETS ADMINISTRATION BUREAU OF QICHUN COUNTY holds 4,169,266 A-shares of the Company on behalf of the country.
1. Shareholder Shi Yun holds 2,830,000 shares of the Company through credit collateral securities trading account and no share of the Company through common Top 10 ordinary shareholders securities account, thus holding 2,830,000 shares of the Company in total. 2. conducting securities margin Shareholder Zhou Qiping holds 100 shares of the Company through credit collateral trading (if any) securities trading account and 2,092,945 shares of the Company through common securities account, thus holding 2,093,045 shares of the Company in total.
Note: The shares held by Jingzhou Sanonda Holding Ltd. (119,687,202 shares) are subject to voluntary restriction from transfer within 12 months after the date of 2 August 2017, in the terms specified in section VI Shares Issuance of the
6 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Report of the Company on Share Insurance for Assets Purchase and Supporting Funds Raise & Connected Transactions dated 5 July 2017.
Did any of the top 10 ordinary shareholders or the top 10 non-restricted ordinary shareholders of the Company conduct any promissory repo during the Reporting Period? □ Yes √ No No such cases in the Reporting Period.
2. Total number of preference shareholders and shareholdings of the top 10 of them at the period-end □ Applicable √ Not applicable
7 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Section III Significant Events
I Changes in main accounting statement items and financial indicators in the Reporting Period, as well as reasons for the changes
√ Applicable □ Not applicable Unit: RMB’000
January - September January - September +/- (%) Main reason for 2017 2016 change
Other accounts 1,502,849 983,912 53% Mainly due to increase receivable in the securitization transaction.
Other non-current 115,555 181,735 (36%) Mainly decrease of assets prepayments to long term assets suppliers and decrease in long term loans to affiliate.
Available-for-sale 89,624 26,636 236% Mainly Additional financial assets investment at the end of 2016.
Non-current liabilities 741,922 1,340,992 (45%) Mainly payment of due within one year current maturities of debentures in a subsidiary.
Accounts received in 125,983 60,138 109% Increase in advances advance from customers.
Long-term borrowings 469,468 1,217,176 (61%) Repayment of long term loans.
Estimated liabilities 152,843 220,127 (31%) Mainly due to realization of a provision and classification of provisions to short term liabilities.
Other non-current 233,746 162,308 44% Additional agricultural liabilities development funds.
Share capital 2,404,806 593,923 305% Issue of new shares during the third quarter of 2017.
8 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
January - September January - September +/- (%) Main reason for 2017 2016 change
Other comprehensive 47,344 279,526 (83%) Mainly unrealized loss income of derivatives transactions and translation effect of foreign operations.
Retained profit 3,351,808 2,082,189 61% Mainly net profit
Minority interests 0 4,553,617 (100%) Change in the holding percentage in a significant subsidiary to 100%.
Taxes and surcharges 48,661 33,593 45% Mainly due to increase in operation.
Finance costs 844,069 388,760 117% Mainly due to exchange rate differences.
Profit on fair value 170,228 109,795 55% Mainly due to change in changes the fair value of derivatives.
Return on investment 28,088 (418,527) (107%) Mainly due to realization of derivatives.
Non-operating 17,260 10,158 70% Mainly due to disposal expenses of long term assets.
Corporate income tax 259,358 55,118 371% Mainly due to increase in profit before tax and a result of the strengthening of the Brazilian Real against the US dollar during the corresponding period.
Minority interests’ 450,305 (100%) Change in the holding income percentage in a significant subsidiary to 100%.
II Progress on significant events, as well as the influence and solutions √ Applicable □ Not applicable The Company disclosed a preplan for significant asset reorganization on 14 September 2016 and the reply to an inquiry of
9 Hubei Sanonda Co., Ltd. Third Quarter Report 2017 the Shenzhen Stock Exchange about the preplan on 15 October 2016. Meanwhile, the stock of the Company has resumed trading since 17 October 2016. The combination of Adama Agricultural Solutions Ltd. ("Solutions") and the Company was successfully completed, whereby on 4 July 2017, the entire share capital of Solutions was transferred from CNAC to the Company, in return for the issuance of new shares in the Company to CNAC and their registration for trade on the Shenzhen Stock Exchange, which was completed on 2 August 2017. Subsequently, the Company is consolidating the financial statements of Solutions in its financial statements. The combination transaction was accounted as a business combination under common control and the financial statements for prior periods to the combination date have been restated accordingly to include the financial position, results of operation and cash flow of Solutions. Please see key additional information and further details included in the Annex.
III Commitments of the Company, its shareholders, actual controller, acquirer, directors, supervisors, senior management or other related parties fulfilled in the Reporting Period or ongoing at the period-end √ Applicable □ Not applicable
Cause of Commit Expir Commit By Category Contents ment ing Progress ments date date
Share
Reform
1. Except for the transaction with Noposion that may lead to horizontal competition in the local market as disclosed in the Report on Tender Offer of B-shares of Hubei Sanonda Co., Ltd, the company will take effective measures to try to prevent the company and its controlled subsidiaries from being in the same or similar business to Sanonda in China. 2. If in the future the company or its controlled subsidiaries will be On-goin engaged in the business in China that constitutes horizontal competition g. The against Sanonda, including business related the transaction with Noposion committ as disclosed in the Report on Tender Offer of B-shares, the company will ADAM Sep ed th Acquisiti Horizontal take active actions to solve such horizontal competition step-by-step Sep 7 , A & 6th, parties on Report competition within 7 years after completion of the transaction or when the 2013 Celsius 2020 comply or Equity management of the company thinks that the conditions are mature, in with the Change accordance with securities laws, regulations and sector policies. Such commit Report measures include but are not limited to, reorganizing internal assets ments. (including injecting such business into Sanonda or having it run through Sanonda), adjusting sector planning and business structure, upgrading technologies and products and making market segmentation so that each company will differentiate its products and end users to avoid and eliminate horizontal competition between the company, its controlled subsidiaries and Sanonda.
ADAM Independenc 1. After completion of this transaction, Sanonda will continue to keep Long On-goin Sep 7th, A & e of the complete procurement, production and sales systems and to possess term g. The 2013 Celsius listed independent intellectual properties. The company and its affiliated parties com committ
10 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Cause of Commit Expir Commit By Category Contents ment ing Progress ments date date company will be completely independent from Sanonda in terms of staff, assets, mitm ed and finance, business and organization. Sanonda will have full capacity of ent* parties related-party operation in Chinese agricultural chemical market. comply transaction 2. The company will comply with laws, regulations and other regulatory with the documents to avoid and reduce replated-party transactions with Sanonda. commit However, for related-party transactions that are inevitable or based on ments. reasonable grounds, the company will follow the market principles of just, fairness and openness, enter into agreement(s) legally and go through lawful procedures. The company will honor its disclosure obligations and apply for relevant approvals according to the AoA of Sanonda, rules regarding related-party transactions and relevant regulations, not damaging the lawful rights and interest of Sanonda and its shareholders by related-party transactions. 1. The subsidiaries controlled by the company, namely Anpon, Anhui Petrochemical, Shandong Dacheng, Heilong, Hunan Haohua and their subsidiaries are in similar or the same business as Sanonda. For the horizontal competition in China, the company is committed to solving the horizontal competition between its subsidiaries and Sanonda step-by-step in the future. The company will try to reorganize internal assets, adjust sector planning and business structure, upgrade technologies and products and make market segmentation in the next 7 years in accordance with securities laws, regulations and sector policies, so that each company will On-goin differentiate its products and end users to eliminate horizontal competition g. The between the controlled subsidiaries and Sanonda. committ 2. Except for the horizontal competition disclosed in the report on the Sep ChemC Horizontal Sep 7th, ed party tender offer, the company will take effective measures to try to prevent 6th, hina competition 2013 complies the company and its controlled subsidiaries from adding new business the 2020 with the same or similar to Sanonda, apart from relevant commitments in the commit commitment letters signed by MAI and Celsius. ments. 3. If the company or its controlled subsidiaries, apart from the commitments in the commitment letters signed by MAI and Celsius, are in the future engaged in the business in China that constitute horizontal competition against Sanonda, the company will take active actions, including but not limited to, reorganizing internal assets, adjusting sector planning and business structure, upgrading technologies and products and making market segmentation so that each company will differentiate its products and end users to avoid and eliminate horizontal competition between the company, its controlled subsidiaries and Sanonda.
Independenc The company will continue to avoid and reduce related-party transactions Long On-goin ChemC Sep 7th, e of the with Sanonda as required by laws, regulations and other regulatory term g. The hina 2013 listed documents. However, for the related-party transactions that are inevitable com committ
11 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Cause of Commit Expir Commit By Category Contents ment ing Progress ments date date company or based on reasonable grounds, the company will follow the market mitm ed party and principles of just, fairness and openness and enter into agreement(s) by ent* complies related-party law and go through lawful procedures. The company will honor its with the transaction disclosure obligations and apply for relevant approvals according to the commit AoA of Sanonda, rules regarding related-party transactions and relevant ment. regulations, not damaging the lawful rights and interest of Sanonda and its shareholders by related-party transactions. After completion of this transaction, Sanonda will continue to keep complete procurement, production and sales systems and to possess independent intellectual properties. The company and its affiliated parties will be completely independent from Sanonda in terms of staff, assets, finance, business and organization. Sanonda will have full capacity of operation in the agricultural chemical market in China. In accordance with the Corporate Law and the Securities Law, the company will prevent any practice that will affect independent operation of Sanonda. CNAC is committed that all the new shares of the listed company obtained through the share issuance for asset purchase shall be prohibited from transfer in whatever forms within 36 months after the date of listing, including but not limited to public transfer via securities market or transfer by agreements. The company will not have such shares of the listed company managed by any other person entrusted, except that such transfer is required and made between ChemChina and its subsidiaries as a result of state-owned asset reorganization, consolidation or free transfer of stock equity, in which case the transferee must keep such shares Oct Aug Lock-up On-goin CNAC obtained locked up until the lock-up period expires. According to 12th, 1st, period g regulations in Article 48 of the Administrative Measures for the Material 2016 2020 Asset Reorganizations of Listed Companies, if within a period of 6 Asset months after completion of this transaction, the closing price of the listed restructur company is lower than the offering price for 20 consecutive trading days, ing or the closing price at the end of such 6-month period is lower than the offering price, then the lock-up period of shares held will be extended automatically by at least 6 months. Upon expiry of the lock-up period, such shares shall be subject to applicable laws, regulations and CSRC and SZSE rules. Sanonda Holding is committed that all the shares of the listed company held by Sanonda Holding before this transaction shall be prohibited from Sanond transfer within 12 months after date of listing of the new shares issued Oct Aug Lock-up On-goin a under this transaction, including but not limited to public transfer via 12th, 1st, period g Holding securities market or transfer by agreements. Sanonda Holding will not 2016 2018 have such shares of the listed company managed by any other person entrusted, except that such transfer is required and made between
12 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Cause of Commit Expir Commit By Category Contents ment ing Progress ments date date ChemChina and its subsidiaries as a result of state-owned asset reorganization, consolidation or free transfer of stock equity, in which case the transferee must keep such shares obtained locked up until the lock-up period expires. The company will honor its performance compensation obligations in accordance with the Performance Compensation Agreement signed between the company and the listed company, related laws and regulations. In case any performance compensation obligation arises, the company will make compensation first with Sanonda shares it holds and the gap (if any) will be compensated in cash. According to the Performance Compensation Agreement and the Supplementary Agreement to Performance Compensation Agreement Sep Dec Performance On-goin CNAC signed between the listed company and the counterparty CNAC, CNAC 13th, 31st, commitment g has promised that within 3 years after the completion of this major asset 2016 2019 reorganization (including the year of completion), namely if the major asset reorganization is completed in 2017, the compensation period shall be 3 years after the completion of this major asset reorganization, namely 2017, 2018 and 2019, ADAMA’s net profit attributable to the parent company after deducting extraordinary gains and losses in 2017, 2018 and 2019 will be no less than USD147,675,000, USD173,321,900 and USD222,416,800 respectively.
1. The company will complete repurchase of 62,950,659 B-shares held by ADAMA Celsius B.V. and have them revoked no later than January 4th, 2018 and lisiting of the new shares for co-financing, whichever is earlier. 2. During the period between July 4th 2017 and completion of repurchase July Jan Sanond Repurchase and cancellation of B-shares, Celsius, the subsidiary indirectly controlled On-goin 20th, 4th, a of B shares by the company, shall not exercise its right to request, call for, host, g 2017 2018 participate or designate a shareholder representative to participate the shareholder meetings. Nor shall it exercise the right of voting. 3. The company promised that it will not distribute dividends before having aforementioned B-shares repurchased and revoked.
I. Apart from Sanonda and ADAMA as the target to be injected into the listed company, other subsidiaries that are controlled by ChemChina, in
the agrochemical business and have horizontal competition against the Long listed company (Hubei Sanonda Co., Ltd.) are as follows, Oct term ChemC Horizontal Potenti On-goin 12th, com hina competition al g Horizon 2016 mitm Major tal Compa Busine Major Categ Custom Formulat Compet ent* ny ss AIs ory ers ions ition against Sanond a
13 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Cause of Commit Expir Commit By Category Contents ment ing Progress ments date date Cinosulfu ron, Quinclora c, Glyphosa te, Acetachlo r, Bensulfur on-methy l, Pymetroz ine, Buprofen zin, Herbic Monosult Produc Pymetro ide, AIs: ap, tion zine, insecti other Bisultap, and Buprofe cide, agroche DDVP, distrib nzin, fungic mical Herbicid Maidao, Triclorfon ution Endosul ide supplier e and Anpon Endosulfa of crop fan, and s insectici and HH n, protect Carbend plant Formula de Imidaclop ion azim, growt tions: rid, produc Ethepho h distribut Dinotefur ts n regula ors an, tor Carbenda zim, Triadimef on, Tricyclaz ole, Benomyl, Azoxystr obin, Ethephon , Thidiazur on, Oxyenade nine Oxadiazo n, Nicosulfu ron, Produc Clodinafo tion p-proparg Herbic and yl, AIs: ide, distrib Oxadiaz Butachlor self-use Herbicid Anhui insecti ution on, , Formula e and Petroche cide of crop Nicosulf Abamecti tions: insectici mical and protect uron n, distribut de fungic ion Lambda-c ors ide produc yhalothri ts n, Beta-cype rmethrin, Azoxystr obin Produc 2,4-D, tion MCPA, and Acetachlo distrib r, Formula ution Oxadiazo Herbic tions: Herbicid Heilong None of crop n, ide distribut e protect Fomesafe ors ion n, produc Quizalofo ts p,
14 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Cause of Commit Expir Commit By Category Contents ment ing Progress ments date date Imazetha pyr, Bentazon e, Prometry ne
Shandong Dacheng mentioned in the reorganization draft has transferred its agrochemical business to a third party, which is not a subsidiary of ChemChina. At present, Shandong Dacheng is not in the same or similar business to Sanonda.
II. Commitments and Time Schedule to Address Horizontal Competitions as Mentioned Above
The subsidiaries controlled by ChemChina, namely Anpon, HH, Maidao, Anhui Petrochemical and Heilong as well as their subsidiaries are in similar or the same business as Sanonda. For the horizontal competition in China, ChemChina is committed to solving the horizontal competition between its subsidiaries and Sanonda step-by-step in an appropriate way within 4 years after completion of the reorganization, in accordance with securities laws, regulations and sector policies.
The means by which ChemChina addresses the horizontal competition include but are not limited to the following,
Sanonda acquires crop protection-related assets under ChemChina. Sanonda holds or controlls other crop protection-related assets of ChemChina in line with national laws and by reasonable commercial means such as entrusted operation. ChemChina divests other crop protection-related assets or transfers the control power of such subsidiaries to external parties. ChemChina reorganizes internal assets, adjusts sector planning and business structure, upgrades technologies and products and makes market segmentation so that each company will differentiate its products and end users to eliminate horizontal competition between the subsidiaries controlled by ChemChina and Sanonda.
III. ChemChina’s Commitments on Potential Horizontal Competition in the Future Development of Agrochemical Business
ChemChina will take effective actions to avoid adding new business in China same or similar to Sanonda by itself and its controlled subsidiaries.
If ChemChina or its controlled subsidiaries are in the future engaged in the business in China that constitute horizontal competition against Sanonda, ChemChina will take active actions, including but not limited to reorganizing internal assets, adjusting sector planning and business structure, upgrading technologies and products and making market
15 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Cause of Commit Expir Commit By Category Contents ment ing Progress ments date date segmentation so that each company will differentiate its products and end users to eliminate horizontal competition between the subsidiaries controlled by ChemChina and Sanonda.
IV. Other Commitments to Avoid Horizontal Competition
Except for what is mentioned above, ChemChina and its other controlled subsidiaries are not in the same or similar business as Sanonda.
If ChemChina violates its aforementioned commitments as from the date when the Commitment Letter takes effect, it will compensate Sanonda for all its losses or expenses incurred as a result of such violation. The Commitment Letter will enter into force on the transaction day of the major asset reorganization as approved by CSRC. The Commitment Letter shall remain valid, unalterable and irrevocable throughout the period when ChemChina is the controlling shareholder of Sanonda. The company will continue to avoid and reduce related-party transactions with Sanonda, as required by laws, regulations and other regulatory documents. However, for the related-party transactions that are inevitable Long or based on reasonable grounds, the company will follow the market Related-part term ChemC principles of just, fairness and openness, enter into agreement(s) legally Aug 4th, On-goin y com hina and go through lawful procedures. The company will perform its 2016 g transactions mitm disclosure obligations and approval procedures according to the rules on ent* related-party transactions and relevant policies, not damaging the lawful rights and interest of Sanonda and its shareholders by related-party transactions. The company hereby is committed that all information that the company provided for and in relation to this transaction is true, accurate and Truthfulness, complete and free from any misstatement, misleading statement or Long accuracy and material omission. The company is committed that all the data the Sep term On-goin CNAC completenes Company provided to all the agencies are true, accurate and complete 13th, com g s of originals or duplicates. The duplicates or photo copies are identical to the 2016 mitm information originals. The signatures and chops on all documents are authentic. The ent* company takes legal liabilities for the truthfulness, accuracy and completeness of such information provided. The company hereby is committed that all information required from and provided by the company to Sanonda for and in relation to this transaction Truthfulness, Long is true, accurate and complete and free from any misstatement, misleading accuracy and term ADAM statement or material omission. The company is committed that all the Aug 3rd, On-goin completenes com A data the Company provided to all the agencies are true, accurate and 2016 g s of mitm complete originals or duplicates. The duplicates or photo copies are information ent* identical to the originals. The signatures and chops on all documents are authentic. The company takes legal liabilities for the truthfulness,
16 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Cause of Commit Expir Commit By Category Contents ment ing Progress ments date date accuracy and completeness of such information provided. After completion of this transaction, Sanonda will continue to keep complete procurement, production and sales systems and to possess independent intellectual properties. The company and its affiliated parties Long Independenc will be completely independent from Sanonda in terms of staff, assets, term ChemC e of the Aug 4th, On-goin finance, business and organization. Sanonda will have full capacity of com hina listed 2016 g operation in Chinese agricultural chemical market. The Company will mitm company follow related regulations in Company Law and Securities Law, and avoid ent* engagement in any action that impairs the operating independence of Sanonda.
IPO or Secondar y Offering
Stock-bas ed
Compens ation
Other commitm ents to non-contr olling interest
Are the commitments honored Yes. on time?
If there are overdue commitments, please elaborate and present future plans.
IV Performance forecast for Y2017
Warning of possible loss or considerable YoY change in the accumulative net profit made during the year-beginning to the end of the next reporting period, as well as the reasons □ Applicable √ Not applicable
17 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
V Securities investment □ Applicable √ Not applicable No such cases in the Reporting Period.
VI Investment in derivative financial instruments √ Applicable □Not applicable Unit: RMB’000
Percentage
The party of Investment Amount Amount that Relation Related Investment investment Gain/loss Initial amount at purchased sold Impairment operates with the party Starting Expiring amount at amount during the Type investment beginning during the during the accrued (if the Compan transactio date date end of the divided by reporting amount of the reporting reporting any) investmen y n or not? period net asset at period period period period t end of the
period
Banks No No Option 1,875,145 30.7.2017 27.10.2017 1,875,145 79,186 No 1,954,331 11.16% (26,960)
Banks No No Forward 11,893,378 23.5.2017 10.12.2017 11,893,378 462,446 No 11,430,932 65.30% (254,794)
Total 13,768,523 -- -- 13,768,523 79,186 462,446 13,385,263 76.46% (281,754)
Source of fund for the investment Internal litigation-related situations (if N/A applicable)
Date of disclosure of Board approval N/A (if any)
Date of disclosure of Shareholders’ N/A approval (if any)
The aforesaid refers to short term hedging currency transactions made with banks.
The transactions we do are not traded in the market. The Transactions are between the company and the bank until the expiration, so no market risk is involved.
Regarding credit and liquidity risk, we're working with big strong banks only and with some we have ISDA Risk and control analysis for the agreement. reporting period (including but not Operational risk, we're working with an approved software, which is our back office for all the transactions. limited to market risk, liquidity risk, No legal risk is involved. credit risk, operational risk, legal risk, etc.) The Controls in order to reduce the risks are: The relevant subsidiaries have specific guidelines, which were approved by the subsidiaries' financial statements committee of the board, which specified all the hedging policy, the persons that approved to deal with hedging, tools, range and more. In the third quarter, the only subsidiary that has hedge positions in the Company is Solutions.
18 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
The relevant subsidiaries apply local SOX audits that audit the working process and the controls of the hedging that is in addition to the quarterly audit.
The controllers of the relevant subsidiaries are involved and monitor the hedging accounting treatment.
Every 2-3 years the internal audit of the relevant subsidiaries department is auditing all the procedure.
Market price or fair value change of The aforesaid refers to short time hedging currency transactions made by the relevant subsidiary with banks. investments during the reporting Segregation of duties as follows: period. For the fair value evaluation, the relevant subsidiary is using external experts. The relevant subsidiary hedges Specific methodology and currencies only; the relevant transactions are simple (Options and forwards) for up to 1.5 years. Therefore, assumptions should be disclosed in the valuation is straight forward, the exchange rates are provided by the accounting department of the the analysis of fair value of the relevant subsidiary and all other parameters are provided by the experts. investments
Explanation for any significant changes in accounting policies and N/A principles, compared with last reporting period
Independent Directors’ opinion on the investment in derivative financial N/A instruments and related risk controls
Notes: 1. Non-financial companies should fill in above table. “Investment in derivative financial instruments” in above table is transaction within which the investment value is based on the value of the underlying asset. Investment in derivative financial instruments include: futures, forwards, options, swaps and combinations. Underlying assets include: securities, index, interest rates, exchange rates, currencies, commodities, other assets, and their combinations. 2. The Company may classify investments by the underlying assets and types of contracts, and disclose investments in categories, but method and standards for the classification should also be disclosed. 3. “The party that operates the investment” means the party that is in the transaction other than the Company. 4. “Investment amount” means the contract amount.
VII Visits paid to the Company for purposes of research, communication, interview, etc. during the Reporting Period √ Applicable □ Not applicable
Date of visit Way of visit Type of visitor About
Does the half-year report of 2017 disclose combined financial Aug 10, 2017 Phone call Individual statements including ADAMA? No written information was provided.
19 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Date of visit Way of visit Type of visitor About
How is the co-financing progressing? Aug 30, 2017 Phone call Individual No written information was provided.
Will the Q3 report of 2017 disclose combined financial statements Sep 20, 2017 Phone call Individual including ADAMA? No written information was provided.
VIII Illegal provision of guarantees for external parties □ Applicable √ Not applicable No such cases in the Reporting Period. IX Occupation of the Company’s funds by the controlling shareholder or its related parties for non-operating purposes □ Applicable √ Not applicable No such cases in the Reporting Period. X Responsibilities for Precise Poverty Alleviation 1. Summary of Precise Poverty Alleviation during Q3 2. Breakdown of Precise Poverty Alleviation by the Listed Company during Q3
Indicator Unit Quantities/Description
I. General Description —— ——
II. Breakdowns —— ——
1. Industry Development —— ——
2. Labor Transfer by Employment —— ——
3. Movement to a Different Place —— ——
4. Education —— ——
5. Health Care —— ——
6. Ecological Conservation —— ——
7. Bottom Line Safeguards —— ——
8. Social Poverty Alleviation —— ——
9. Others —— ——
III. Relevant Awards (Contents and Category) —— ——
3. Future Plan The company will continue to follow the requirements of the Leading Group of Poverty Alleviation of Jinzhou Disciplinary Committee and Municipality, to steadily promote poverty alleviation with corresponding entities.
20 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Section IV Financial Statements
I Financial statements
1. Consolidated balance sheet Prepared by Hubei Sanonda Co., Ltd. 30 September 2017 Unit: RMB’000
Item Closing balance Opening balance
Current assets:
Monetary funds 4,347,329 3,841,547
Settlement reserves
Lendings to banks and other financial institutions
Financial assets measured at fair value with fair value changes included in 40,366 35,594 the profit and loss for the Reporting Period
Derivative financial assets 367,436 637,449
Notes receivable 162,770 108,226
Accounts receivable 5,926,108 5,465,258
Accounts paid in advance 204,574 219,218
Premiums receivable
Reinsurance premiums receivable
Receivable reinsurance contract reserves
Interest receivable
Dividends receivable
Other accounts receivable 1,502,849 633,375
Financial assets purchased under agreement to resell
Inventories 7,412,717 7,463,957
Assets held for sale 359,924
Non-current assets due within one year 46 49
Other current assets 533,630 510,165
Total current assets 20,857,749 18,914,838
Non-current assets:
Loans and advances to customers
Available-for-sale financial assets 89,624 90,908
Held-to-maturity investments
21 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Item Closing balance Opening balance
Long-term accounts receivable 185,756 185,648
Long-term equity investments 106,331 104,284
Investment property 4,487 4,723
Fixed assets 6,466,169 6,797,890
Construction in progress 651,898 483,888
Engineering materials
Disposal of fixed assets
Productive living assets
Oil-gas assets
Intangible assets 4,212,298 5,056,200
R&D expense
Goodwill 3,911,018 4,064,312
Long-term deferred expenses
Deferred income tax assets 670,751 646,797
Other non-current assets 115,555 143,026
Total non-current assets 16,413,887 17,577,676
Total assets 37,271,636 36,492,514
Current liabilities:
Short-term borrowings 599,672 748,162
Borrowings from the Central Bank
Money deposits accepted and inter-bank deposits
Loans from banks and other financial institutions
Financial liabilities measured at fair value with fair value changes included in the profit and loss for the Reporting Period
Derivative financial liabilities 785,974 785,013
Notes payable 223,602 317,403
Accounts payable 3,411,463 3,462,280
Accounts received in advance 125,983 106,774
Financial assets sold for repurchase
Handling charges and commissions payable
Payroll payable 906,906 975,391
Taxes and fares payable 484,542 344,112
Interest payable 153,560 73,407
Dividends payable 144,552 151,074
22 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Item Closing balance Opening balance
Other accounts payable 2,322,992 1,769,174
Reinsurance premiums payable
Insurance contract reserves
Payables for acting trading of securities
Payables for acting underwriting of securities
Liabilities held for sale
Non-current liabilities due within one year 741,922 634,740
Other current liabilities 384,720 406,432
Total current liabilities 10,285,888 9,773,962
Non-current liabilities:
Long-term borrowings 469,468 1,002,177
Bonds payable 7,751,996 7,417,408
Of which: Preference shares
Perpetual bonds
Long-term accounts payable 23,634 21,810
Long-term employee benefits 456,201 511,063
Special payables
Estimated liabilities 152,843 166,439
Deferred income 157,587 167,252
Deferred income tax liabilities 234,797 295,765
Other non-current liabilities 233,746 218,844
Total non-current liabilities 9,480,272 9,800,758
Total liabilities 19,766,160 19,574,720
Owners’ equity:
Share capital 2,404,806 593,923
Other equity instruments
Of which: Preference shares
Perpetual bonds
Capital reserves 11,849,946 13,660,829
Less: Treasury stock 359,431 359,431
Other comprehensive income 47,344 1,027,109
Special reserves 20,304 19,862
Surplus reserves 190,699 190,699
23 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Item Closing balance Opening balance
Provisions for general risks
Retained profit 3, 351,808 1,784,803
Total equity attributable to owners of the Company 17,505,476 16,917,794
Minority interests
Total owners’ equity 17,505,476 16,917,794
Total liabilities and owners’ equity 37,271,636 36,492,514
Legal representative: Chen Lichtenstein Chief of the accounting work: Aviram Lahav Chief of the accounting organ: Aviram Lahav
2. Balance sheet of the Company Unit: RMB’000
Item Closing balance Opening balance
Current Assets:
Monetary funds 103,677 257,541
Financial assets measured at fair value with fair value changes included in the profit and loss for the Reporting Period
Derivative financial assets
Notes receivable 93,114 88,457
Accounts receivable 1,120,841 611,495
Accounts paid in advance 47,368 35,685
Interest receivable
Dividends receivable
Other accounts receivable 663 3,083
Inventories 160,528 168,497
Assets held for sale
Non-current assets due within one year
Other current assets 490 5,738
Total current assets 1,526,681 1,170,496
Non-current assets:
Available-for-sale financial assets 8,573 8,573
Held-to-maturity investments
Long-term accounts receivable
Long-term equity investments 15,945,739 55,527
24 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Item Closing balance Opening balance
Investment property 4,487 4,723
Fixed assets 1,355,024 1,475,229
Construction in progress 48,880 21,225
Engineering materials
Disposal of fixed assets
Productive living assets
Oil-gas assets
Intangible assets 192,573 196,093
R&D expense
Goodwill
Long-term deferred expenses
Deferred income tax assets 21,166 36,981
Other non-current assets 13,823 7,123
Total non-current assets 17,590,265 1,805,474
Total assets 19,116,946 2,975,970
Current liabilities:
Short-term borrowings 70,000 0
Financial liabilities measured at fair value with fair value changes included in the profit and loss for the Reporting Period
Derivative financial liabilities
Notes payable 54,100 26,000
Accounts payable 193,377 162,151
Accounts received in advance 32,462 26,358
Payroll payable 13,357 26,353
Taxes and fares payable 46,318 10,662
Interest payable
Dividends payable 250 250
Other accounts payable 87,622 172,325
Liabilities held for sale
Non-current liabilities due within one year 139,090 147,000
Other current liabilities
Total current liabilities 636,576 571,099
Non-current liabilities:
Long-term borrowings 152,000 196,590
25 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Item Closing balance Opening balance
Bonds payable
Of which: Preference shares
Perpetual bonds
Long-term payables
Long-term employee benefits
Special payables
Estimated liabilities
Deferred income 14,402 16,666
Deferred income tax liabilities
Other non-current liabilities 171,771 171,771
Total non-current liabilities 338,173 385,027
Total liabilities 974,749 956,126
Owners’ equity:
Share capital 2,404,806 593,923
Other equity instruments
Of which: Preference shares
Perpetual bonds
Capital reserves 14,343,129 263,800
Less: Treasury stock
Other composite income
Special reserves 15,335 14,893
Surplus reserves 190,699 190,699
Retained profit 1,188,228 956,529
Total owners’ equity 18,142,197 2,019,844
Total liabilities and owners’ equity 19,116,946 2,975,970
3. Consolidated income statement for the Reporting Period Unit: RMB’000
July-September July-September Item 2017 2016
1. Operating revenues 5,624,175 5,332,441
Including: Sales income 5,624,175 5,332,441
Interest income
Premium income
26 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
July-September July-September Item 2017 2016
Fee and commission income
2. Operating costs 4,936,710 5,217,611
Including: Cost of sales 3,627,507 3,526,479
Interest expenses
Fee and commission expenses
Surrenders
Net claims paid
Net amount provided as insurance contract reserve
Expenditure on policy dividends
Reinsurance premium
Taxes and surcharges 16,148 6,330
Selling expenses 1,011,162 1,011,379
Administrative expenses 333,885 260,146
Finance costs (67,847) 376,432
Asset impairment loss 15,855 36,845
Add: Profit on fair value changes (“-” means loss) (52,048) 339,012
Return on investment (“-” means loss) (241,361) (228,832)
Including: Share of profit/loss of associates and joint ventures (2,820) 6,913
Exchange gains (“-” means loss)
3. Operating profit (“-” means loss) 394,056 225,010
Add: Non-operating revenue 13,168 9,528
Including: Profit on disposal of non-current assets 753 213
Less: Non-operating expense 7,603 1,796
Including: Loss on disposal of non-current assets 2,751 (705)
4. Total profit (“-” means loss) 399,621 232,742
Less: Corporate income tax 117,101 71,173
5. Net profit (“-” means loss) 282,520 161,569
Net profit attributable to owners of the Company 282,520 98,142
Minority interests’ income 63,427
6. Other comprehensive income net of tax (393,748) 120,640
Other comprehensive income net of tax attributable to owners of the (393,748) 82,228 Company
6.1 Other comprehensive income that will not be reclassified into (4,207) 5,475
27 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
July-September July-September Item 2017 2016 profit/loss 6.1.1 Changes in net liabilities or assets with a defined benefit plan (4,207) 5,475 upon re-measurement 6.1.2 Share of other comprehensive income of investees that cannot be reclassified into profit/loss under the equity method 6.2 Other comprehensive income to be subsequently reclassified into (389,541) 76,753 profit/loss 6.2.1 Share of other comprehensive income of investees that will be reclassified into profit/loss under the equity method 6.2.2 Profit/loss on fair value changes of available-for-sale financial assets 6.2.3 Profit/loss on reclassifying held-to-maturity investments into available-for-sale financial assets
6.2.4 Effective profit/loss on cash flow hedges (96,034) (4,249)
6.2.5 Currency translation differences (293,507) 81,002
6.2.6 Other
Other comprehensive income net of tax attributable to minority interests 38,412
7. Total comprehensive income (111,228) 282,209
Attributable to owners of the Company (111,228) 180,370
Attributable to minority interests 101,839
8. Earnings per share
8.1 Basic earnings per share (RMB/ share) 0.1206 0.0607
8.2 Diluted earnings per share (RMB/ share) 0.1206 0.0607
Where business mergers under the same control occurred in the Reporting Period, net profit attributable to the owners of the company achieved by the merged parties before the business mergers was RMB’000 0 with the corresponding amount for the same period (July – September) of last year being RMB’000 94,549.
Legal representative: Chen Lichtenstein Chief of the accounting work: Aviram Lahav Chief of the accounting organ: Aviram Lahav
4. Income statement of the Company for the Reporting Period Unit: RMB’000
Item July-September 2017 July-September 2016
1. Operating revenues 688,042 431,162
Less: Operating costs 509,865 367,795
Business tax and surtaxes 7,969 142
Selling expenses 22,085 20,059
28 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Administrative expenses 27,303 36,467
Finance costs 10,154 3,755
Asset impairment loss (987) 1,462
Add: profit on fair value changes (“-” means loss)
Return on investment (“-” means loss) 548
Including: Share of profit/loss of associates and joint ventures
2. Operating profit (“-” means loss) 112,201 1,482
Add: Non-operating revenue 815 851
Including: Profit on disposal of non-current assets
Less: Non-operating expense 1,209 2
Including: Loss on disposal of non-current assets 1,137 2
3. Total profit (“-” means loss) 111,807 2,331
Less: Corporate income tax 27,921 549
4. Net profit (“-” means loss) 83,886 1,782
5. Other comprehensive income net of tax
5.1 Other comprehensive income that will not be reclassified into profit and loss 5.1.1 Changes in net liabilities or assets with a defined benefit plan upon re-measurement 5.1.2 Share of other comprehensive income of investees that cannot be reclassified into profit/loss under the equity method 5.2 Other comprehensive income to be subsequently reclassified into profit/loss 5.2.1 Share of other comprehensive income of investees that will be reclassified into profit/loss under the equity method 5.2.2 Profit/loss on fair value changes of available-for-sale financial assets 5.2.3 Profit/loss on reclassifying held-to-maturity investments into available-for-sale financial assets
5.2.4 Effective profit/loss on cash flow hedges
5.2.5 Currency translation differences
5.2.6 Other
6. Total comprehensive income 83,886 1,782
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
29 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
5. Consolidated income statement for the period from the year-beginning to the end of the Reporting Period Unit: RMB’000
January-September January-Septemb Item 2017 er 2016
1. Operating revenues 18,394,239 17,105,727
Including: Sales income 18,394,239 17,105,727
Interest income
Premium income
Fee and commission income
2. Operating costs 16,799,093 15,681,254
Including: Cost of sales 11,807,201 11,447,191
Interest expenses
Fee and commission expenses
Surrenders
Net claims paid
Net amount provided as insurance contract reserve
Expenditure on policy dividends
Reinsurance premium
Taxes and surcharges 48,661 33,593
Selling expenses 3,134,052 2,966,717
Administrative expenses 901,999 765,802
Finance costs 844,069 388,760
Asset impairment loss 63,111 79,191
Add: Profit on fair value changes (“-” means loss) 170,228 109,795
Return on investment (“-” means loss) 28,088 (418,527)
Including: Share of profit/loss of associates and joint ventures (4,906) 4,104
Exchange gains (“-” means loss)
3. Operating profit (“-” means loss) 1,793,462 1,115,741
Add: Non-operating revenue 82,670 66,300
Including: Profit on disposal of non-current assets 59,906 47,988
Less: Non-operating expense 17,260 10,158
Including: Loss on disposal of non-current assets 4,145 281
4. Total profit (“-” means loss) 1,858,872 1,171,883
Less: Corporate income tax 259,358 55,118
5. Net profit (“-” means loss) 1,599,514 1,116,765
30 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
January-September January-Septemb Item 2017 er 2016
Net profit attributable to owners of the Company 1,599,514 666,460
Minority interests’ income 450,305
6. Other comprehensive income net of tax (979,765) 232,458
Other comprehensive income net of tax attributable to owners of the (979,765) 178,036 Company 6.1 Other comprehensive income that will not be reclassified into (10,663) (8,850) profit/loss 6.1.1 Changes in net liabilities or assets with a defined benefit plan (10,663) (8,850) upon re-measurement 6.1.2 Share of other comprehensive income of investees that cannot be reclassified into profit/loss under the equity method 6.2 Other comprehensive income to be subsequently reclassified into (969,102) 186,886 profit/loss 6.2.1 Share of other comprehensive income of investees that will be reclassified into profit/loss under the equity method 6.2.2 Profit/loss on fair value changes of available-for-sale financial assets 6.2.3 Profit/loss on reclassifying held-to-maturity investments into available-for-sale financial assets
6.2.4 Effective profit/loss on cash flow hedges (449,236) (105,005)
6.2.5 Currency translation differences (519,866) 291,891
6.2.6 Other
Other comprehensive income net of tax attributable to minority interests 54,422
7. Total comprehensive income 619,749 1,349,223
Attributable to owners of the Company 619,749 844,497
Attributable to minority interests 504,726
8. Earnings per share
8.1 Basic earnings per share (RMB/ share) 0.6830 0.4120
8.2 Diluted earnings per share (RMB/ share) 0.6830 0.4120
Where business mergers under the same control occurred in the Reporting Period, net profit attributable to the owners of the company achieved by the merged parties before the business mergers (January – June) was RMB’000 1,149,390, with the corresponding amount for the same period (January – September) of last year being RMB’000 646,724. 6. Income statement of the Company for the period from the year-beginning to the end of the Reporting Period Unit: RMB’000
Item January-September 2017 January-September 2016
1. Operating revenues 2,130,107 1,428,051
Less: Operating costs 1,626,813 1,224,219
31 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Business tax and surtaxes 16,535 3,968
Selling expenses 68,335 62,489
Administrative expenses 81,773 102,578
Finance costs 22,346 11,112
Asset impairment loss 7,065 8,895
Add: profit on fair value changes (206) (“-” means loss) Return on investment (“-” 548 76 means loss) Including: Share of profit/loss of associates and joint ventures
2. Operating profit (“-” means loss) 307,582 14,866
Add: Non-operating revenue 4,087 3,839
Including: Profit on disposal of non-current assets
Less: Non-operating expense 2,286 5
Including: Loss on disposal of 1,547 5 non-current assets
3. Total profit (“-” means loss) 309,383 18,700
Less: Corporate income tax 77,684 5,570
4. Net profit (“-” means loss) 231,699 13,130
5. Other comprehensive income net of tax 5.1 Other comprehensive income that will not be reclassified into profit and loss 5.1.1 Changes in net liabilities or assets with a defined benefit plan upon re-measurement 5.1.2 Share of other comprehensive income of investees that cannot be reclassified into profit/loss under the equity method 5.2 Other comprehensive income to be subsequently reclassified into profit/loss 5.2.1 Share of other comprehensive income of investees that will be reclassified into profit/loss under the equity method
32 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
5.2.2 Profit/loss on fair value changes of available-for-sale financial assets 5.2.3 Profit/loss on reclassifying held-to-maturity investments into available-for-sale financial assets 5.2.4 Effective profit/loss on cash flow hedges 5.2.5 Currency translation differences
5.2.6 Other
6. Total comprehensive income 231,699 13,130
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
7. Consolidated cash flow statement for the period from the year-beginning to the end of the Reporting Period Unit: RMB’000
Item January-September 2017 January-September 2016
1. Cash flows from operating activities: Cash received from sale of commodities and rendering of 17,306,144 16,107,843 service Net increase in money deposits from customers and interbank placements Net increase in loans from the Central Bank Net increase in funds borrowed from other financial institutions Cash received from premium of original insurance contracts Net cash received from reinsurance business Net increase in deposits of policy holders and investment fund Net increase in disposal of financial assets at fair value through profit/loss Interest, fees and commissions received
33 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Net increase in interbank borrowings Net increase in funds in repurchase business
Tax refunds received 35,662 41,655
Cash received from other 838,300 570,473 operating activities Subtotal of cash inflows from 18,180,106 16,719,971 operating activities
Cash paid for goods and services 12,385,431 10,941,529
Net increase in loans and advances to customers Net increase in funds deposited in the Central Bank and interbank placements Cash paid for claims of original insurance contracts Interest, fees and commissions paid
Cash paid as policy dividends
Cash paid to and for employees 2,318,685 1,908,054
Taxes and fares paid 293,826 296,727
Cash paid for other operating 660,624 643,527 activities
Subtotal of cash outflows from 15,658,566 13,789,837 operating activities
Net cash flows from operating 2,521,540 2,930,134 activities 2. Cash flows from investing activities: Cash received from disposal of 20,544 investments Cash received as return on 2,037 investments
Net cash received from disposal 95,750 65,388 of fixed assets, intangible assets and other long-term assets
Net cash received from disposal 100,139 of subsidiaries or other business units
Cash received from other 29,253 8,806 investing activities
34 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Subtotal of cash inflows from 245,686 76,231 investing activities
Cash paid to acquire fixed assets, 1,061,206 938,586 intangible assets and other long-term assets
Cash paid for investment
Net increase in pledged loans
Net cash paid to acquire 62,296 subsidiaries and other business units
Cash paid for other investing 31,958 4,234 activities
Subtotal of cash outflows from 1,093,164 1,005,116 investing activities
Net cash flows from investing (847,478) (928,885) activities 3. Cash flows from financing activities: Cash received from capital contributions Including: Cash received from minority shareholder investments by subsidiaries
Cash received as borrowings 181,108 501,994
Cash received from issuance of bonds
Cash received from other 7,800 226,722 financing activities
Subtotal of cash inflows from 728,716 188,908 financing activities
Repayment of borrowings 675,900 1,236,808
Cash paid for interest expenses 384,802 537,450 and distribution of dividends or profit
Including: dividends or profit 32,556 134,414 paid by subsidiaries to minority interests
Cash paid for other financing 110,820 13,800 activities
Sub-total of cash outflows from 1,788,058 1,171,522 financing activities Net cash flows from financing (982,614) (1,059,342) activities
35 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
4. Effect of foreign exchange rate (188,686) 94,585 changes on cash and cash equivalents
5. Net increase in cash and cash 502,762 1,036,492 equivalents
Add: Opening balance of cash 3,833,747 2,973,356 and cash equivalents
6. Closing balance of cash and cash 4,336,509 4,009,848 equivalents
8. Cash flow statement of the Company for the period from the year-beginning to the end of the Reporting Period Unit: RMB’000
Item January-September 2017 January-September 2016
1. Cash flows from operating activities: Cash received from sale of commodities and rendering of 984,714 816,435 service
Tax refunds received 2,884 168
Cash received from other 4,649 10,973 operating activities Subtotal of cash inflows from 992,247 827,576 operating activities
Cash paid for goods and services 643,788 560,625
Cash paid to and for employees 135,282 138,231
Taxes and fares paid 85,185 38,186
Cash paid for other operating 108,998 78,055 activities Subtotal of cash outflows from 973,253 815,097 operating activities Net cash flows from operating 18,994 12,479 activities 2. Cash flows from investing activities: Cash received from retraction of investments Cash received as return on 76 investments Net cash received from disposal of fixed assets, intangible assets 701 10,622 and other long-term assets
36 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
Net cash received from disposal of subsidiaries or other business - units Cash received from other - investing activities Subtotal of cash inflows from 701 10,698 investing activities Cash paid to acquire fixed assets, intangible assets and other 83,573 59,750 long-term assets
Cash paid for investment -
Net cash paid to acquire subsidiaries and other business - units Cash paid for other investing - activities Subtotal of cash outflows from 83,573 59,750 investing activities Net cash flows from investing (82,872) (49,052) activities 3. Cash flows from financing activities: Cash received from capital contributions
Cash received as borrowings 75,000
Cash received from issuance of - bonds Cash received from other 7,800 226,723 financing activities
Subtotal of cash inflows from 226,723 82,800 financing activities
Repayment of borrowings 52,500 211,500
Cash paid for interest expenses 34,556 12,530 and distribution of dividends or profit
Cash paid for other financing 13,800 110,820 activities Sub-total of cash outflows from 175,850 259,856 financing activities Net cash flows from financing (93,050) (33,133) activities 4. Effect of foreign exchange rate changes on cash and cash 44 10 equivalents
37 Hubei Sanonda Co., Ltd. Third Quarter Report 2017
5. Net increase in cash and cash (156,884) (69,696) equivalents Add: Opening balance of cash 249,741 378,450 and cash equivalents 6. Closing balance of cash and cash 92,857 308,754 equivalents
II Auditor’s report Is this Report audited?
□ Yes √ No
This Report is unaudited.
Hubei Sanonda Co., Ltd. 30 October 2017
38