LHG(SH:600186)2016-09-21 16:00Financial Performance - The company's operating income for the first half of 2016 was ¥872,353,550.21, a decrease of 0.90% compared to ¥880,290,780.92 in the same period last year[18]. - The net profit attributable to shareholders was -¥5,582,363.33, showing a significant improvement from -¥500,826,344.85 in the previous year[18]. - The net cash flow from operating activities was ¥12,088,821.72, a recovery from -¥7,290,314.12 in the same period last year[18]. - The total assets increased by 7.58% to ¥2,415,685,065.41 from ¥2,245,535,861.15 at the end of the previous year[18]. - The net assets attributable to shareholders decreased by 6.11% to ¥85,771,706.03 from ¥91,354,069.36 at the end of the previous year[18]. - The basic earnings per share for the first half of 2016 was -¥0.0053, an improvement from -¥0.4716 in the same period last year[19]. - The company's operating revenue for the current period is ¥872,353,550.21, a decrease of 0.90% compared to the same period last year[24]. - Operating costs decreased by 12.89% to ¥758,542,819.87, resulting in improved profitability[24]. - The net cash flow from operating activities increased by 265.82% to ¥12,088,821.72, indicating enhanced operational efficiency[24]. - The company reported a significant increase in cash and cash equivalents, rising by 272.66% to ¥255,101,949.53, primarily due to increased shareholder loans[24]. Legal Issues - The company is involved in multiple lawsuits, with total amounts involved in disputes exceeding RMB 136.5 million, including a significant case with Shanghai Pudong Development Bank for RMB 136.5 million[39]. - The company has ongoing litigation related to various contracts, with amounts ranging from RMB 35,264 to RMB 18.25 million[39]. - The company is involved in multiple lawsuits, with a total amount of approximately ¥69,000,000.00 related to a loan contract dispute with the Industrial and Commercial Bank of China, which is currently in negotiation for settlement[40]. - The company has ongoing litigation concerning a sales contract with Henan Xiangcheng National Grain Reserve Bureau, amounting to ¥8,753,967.02, which is under negotiation for settlement[40]. - The company faces a total of ¥40,737,564.52 in liabilities from a loan contract dispute with China Great Wall Asset Management Corporation, with the company bearing the responsibility for repayment[40]. - The company has a total of 45 ongoing lawsuits related to securities false statements, with amounts ranging from ¥2,994.00 to ¥145,615.98, indicating significant legal exposure[42]. - The company is currently negotiating settlements for several loan disputes, including amounts of ¥51,341,027.00 and ¥145,211,656.00, both with the Industrial and Commercial Bank of China[40]. - The company has a pending lawsuit involving a sales contract with Lianhua Health, with an amount of ¥2,133,940.00, which is still awaiting judgment[42]. - The company has reported a total of ¥1,110,000.00 in litigation related to an advertising contract dispute, which is currently being handled by law enforcement[40]. - The company is actively pursuing negotiations for settlements in multiple disputes, reflecting a strategy to mitigate legal risks and liabilities[41]. Corporate Governance and Structure - The company has a strong brand advantage, recognized as a "Chinese famous brand" and a "national key enterprise" by the government[29]. - The company has a national marketing network, ensuring high customer loyalty and a stable sales channel[29]. - The company has a total of 45 ongoing lawsuits related to securities false statements, with amounts ranging from ¥2,994.00 to ¥145,615.98, indicating significant legal exposure[42]. - The company has not disclosed any significant changes in fundraising projects[33]. - The company has not reported any major changes in its financial forecasts or significant losses compared to the previous year[36]. - The company has not implemented any stock incentive plans or significant related party transactions recently[47]. - The total amount of related party transactions reached CNY 13,093,875.35, with the purchase of goods from Tianan Food Industry accounting for CNY 10,830,148.00, representing 2.52% of similar transactions[48]. - The company provided guarantees totaling CNY 47,400,000.00 to its subsidiaries, which constitutes 55.26% of the company's net assets[51]. - The company has a total of CNY 355,135,498.00 in related party debts, with CNY 235,135,498.00 owed to the controlling shareholder, Ruikang Investment[50]. - The company has a total of 1,062,024,311 shares, with Zhejiang Ruikang Investment Co., Ltd. holding 10.82% of the shares[102]. Cash Flow and Liquidity - The company's cash and cash equivalents increased to ¥255,101,949.53 from ¥68,454,438.69, representing a growth of approximately 272.5%[64]. - Total current assets rose to ¥959,056,079.30 from ¥726,035,529.84, indicating an increase of around 32.0%[64]. - The company reported a total cash inflow from operating activities of CNY 1,083,620,333.59, while cash outflow was CNY 1,071,531,511.87, resulting in a net increase of CNY 186,647,510.84 in cash and cash equivalents[81]. - Cash inflow from financing activities was CNY 233,135,498.00, primarily from borrowings, compared to CNY 30,000,000.00 in the previous year[81]. - The company reported a net cash outflow from investing activities of CNY 942,709.58, an improvement from a net outflow of CNY 2,079,122.84 in the previous year[80]. - The total cash and cash equivalents at the end of the period reached CNY 210,094,081.54, up from CNY 23,518,746.23 at the end of the previous period[81]. - The company received CNY 1,064,446,653.97 from sales of goods and services, an increase from CNY 939,484,183.93 in the prior year[82]. - Cash paid for purchasing goods and services was CNY 885,711,260.89, a decrease from CNY 920,967,543.96 in the same period last year[80]. - The company paid CNY 103,509,183.82 to employees, which is an increase from CNY 95,211,241.89 in the previous year[80]. - The cash flow from financing activities showed a net increase of CNY 175,527,386.31, compared to a net outflow of CNY 3,350,973.61 in the previous year[81]. Asset Management - The total assets of Canon Thermal Power Co., Ltd. reached RMB 209.11 million, with a net profit of RMB -1.75 million[33]. - Henan Lianhua Food Co., Ltd. reported a total revenue of RMB 579.11 million, resulting in a net loss of RMB -21.07 million[33]. - Henan Lianhua Flour Co., Ltd. achieved a revenue of RMB 134.62 million, with a net profit of RMB -7.73 million[33]. - Henan Tianan Sugar Industry Co., Ltd. generated revenue of RMB 988.47 million, but reported a net loss of RMB -1.41 million[33]. - The company has established several subsidiaries, including Henan Lianhua Smart Fertilizer Co., Ltd., with an investment of ¥800,000, representing 80% ownership[30]. - The company has a total of 10 subsidiaries included in the consolidated financial statements, with 100% ownership in several key subsidiaries such as Henan Xiangcheng Canon Pure Water Co., Ltd.[103]. - The company has established new subsidiaries in May-June 2016, which are now included in the consolidated financial statements[105]. - The company’s consolidated financial statements include all subsidiaries under its control, ensuring comprehensive financial reporting[113]. Accounting Policies - The company has not made any changes to its accounting policies during the reporting period[93]. - The company adheres to the accounting standards, ensuring that the financial statements accurately reflect its financial position and operating results[108]. - The financial statements are prepared based on the assumption of going concern, reflecting the company's commitment to improving operational conditions[107]. - The company’s financial statements reflect a robust accounting policy framework, with no significant changes in accounting estimates reported for the period[171]. - The company classifies joint arrangements into joint operations and joint ventures based on structure, legal form, and contractual terms[116]. - In joint operations, the company recognizes its share of assets and liabilities, as well as income from the sale of its share of outputs[117]. - Cash equivalents are defined as short-term, highly liquid investments that are easily convertible to known amounts of cash[118]. - Foreign currency transactions are translated at the spot exchange rate on the transaction date, with differences recognized in the current period's profit or loss[119]. - Financial instruments are classified into categories based on contractual terms and economic substance, including those measured at fair value with changes recognized in profit or loss[120]. - Held-to-maturity investments are measured at amortized cost using the effective interest method, with gains or losses recognized in the current period's profit or loss[122]. Revenue Recognition - The company recognizes revenue from product sales when the ownership risks and rewards are transferred to the buyer, ensuring reliable measurement of revenue and associated costs[165]. - The company benefits from a 90% reduction in income tax for revenue generated from organic-inorganic compound fertilizer production, as recognized by local tax authorities[173]. - The company has a deferred tax asset and liability system in place, measuring them based on the applicable tax rate expected to be recovered or settled in future periods[170]. - The company has received government subsidies related to assets, which are recognized as deferred income and amortized over the useful life of the assets[167]. - The company confirms service revenue based on the percentage of completion method when the outcome of the service transaction can be reliably estimated[166]. - The company has established a clear policy for recognizing government subsidies related to income, which are recorded as deferred income and recognized in the period when related expenses are incurred[168]. Inventory and Receivables - The total balance of other receivables is CNY 456,219,251.05, with a bad debt provision of CNY 347,859,221.82, representing a provision ratio of approximately 76.3%[191]. - The largest other receivable is from Henan Huanghuai Packaging Co., amounting to CNY 48,942,330.89, which accounts for 9.69% of the total other receivables[193]. - The inventory total is CNY 156,738,916, with a provision for inventory depreciation of CNY 1,042,445.91[195]. - The total amount of receivables over five years is CNY 331,811,303.01, with a 100% provision rate[191]. - The provision for bad debts for receivables within one year is CNY 4,201,500.21, which is about 5% of the total[191]. - The total balance of other receivables from non-related parties is CNY 131,252,897.90, representing 28.97% of the total[193]. - The total amount of bank acceptance bills not yet terminated at the end of the period was ¥195,305,050.76[179]. - The accounts receivable at the end of the period amounted to ¥830,100,482.13, with a bad debt provision of ¥627,356,311.89, indicating a provision ratio of approximately 75.6%[182]. - The accounts receivable aging analysis shows that 1 year or less accounts for ¥113,717,365.91, with a bad debt provision of ¥5,685,868.30, representing a provision ratio of 5%[181]. - The total prepayments at the end of the period were ¥176,031,338.40, up from ¥171,320,871.61 at the beginning, reflecting an increase of 2.08%[184].