NNCI(SH:600301)2014-04-15 16:00Financial Performance - The company reported a net profit of CNY 37,163,047.23 for the year 2013, with a year-end undistributed profit of CNY -897,838,127.16, leading to no profit distribution for the year [4]. - The company's operating revenue for 2013 was CNY 678.02 million, a decrease of 15.93% compared to CNY 806.53 million in 2012 [18]. - The net profit attributable to shareholders was CNY 47.71 million, a significant improvement from a net loss of CNY 284.82 million in 2012 [18]. - The total revenue for 2013 was CNY 440,132,674.66, a decrease of 41.81% compared to the previous year [34]. - The gross margin for the company was -16.10%, down by 4.28 percentage points from the previous year [34]. - The company reported a significant decrease in short-term borrowings, with a reduction of 74.70% to CNY 14,826,720.00 [30]. - The company reported a net cash flow from operating activities of -CNY 23.03 million, an improvement from -CNY 70.18 million in the previous year [18]. - The company received government subsidies amounting to CNY 326.05 million, which contributed to the positive net profit for the year [20]. - The company reported a total of CNY 10,144,555.51 in undistributed profits at year-end [148]. - The company reported a net profit loss of CNY 322,518,458.82 for the year 2013, indicating a significant decline in performance [151]. Operational Changes - The company’s main business has not changed since its listing, maintaining its focus on chemical production [15]. - The company is undergoing a policy-mandated shutdown and relocation of its production facility, which was completed by September 15, 2013 [48]. - The company has implemented a policy of production suspension and relocation, with the factory at 26 Nanjian Road ceasing operations on September 15, 2013 [78]. - The production and sales volume of polyvinyl chloride (PVC) significantly decreased due to the company's decision to halt production to reduce losses [24]. - The company plans to maintain its main business income through the procurement of chemical products like caustic soda and strong chlorine before resuming production at the new site [52]. - The company plans to accelerate the overall relocation project post-suspension, focusing on product structure adjustment and technological upgrades [43]. Governance and Compliance - The company’s financial report has been audited by Ruihua Certified Public Accountants, which issued an unqualified opinion with emphasis on certain matters [4]. - The company’s board of directors and supervisory board members have all attended the board meeting, ensuring governance compliance [4]. - The company has not violated decision-making procedures in providing guarantees to external parties [5]. - The company has not engaged in any non-operating fund occupation by controlling shareholders or their related parties during the reporting period [5]. - The company has acknowledged the significant uncertainty regarding its ability to continue as a going concern due to ongoing losses and the impact of the relocation [51]. - The company has received a non-standard audit report due to its continuous losses and the potential impact on its operational viability [46]. Financial Position - The total assets decreased by 8.37% to CNY 2.18 billion from CNY 2.38 billion in 2012 [18]. - The company’s total liabilities reached CNY 897,838,127.16, indicating a significant financial obligation [148]. - The company’s retained earnings were reported at CNY 57,005,751.71, showing stability in profit retention [148]. - The company’s total equity shifted from CNY 289,881,108.67 to CNY -19,007,326.73, indicating a significant decline in shareholder equity [128]. - The company’s financial position reflects a total equity of CNY -40,192,566.69, highlighting challenges in equity management [148]. Legal and Regulatory Matters - The company has been involved in litigation regarding a contract dispute, with a total claim amount of CNY 30,737,737.38, which includes penalties [59]. - The company has actively managed its legal disputes, with some cases reaching settlements [60]. - The company has a total of 41 million yuan in outstanding payments related to various litigation cases, with some payments already made [62]. - The company has reported a total guarantee amount of RMB 74 million, including RMB 16 million for a subsidiary's bank loan [66]. - The company has no bankruptcy reorganization matters during the reporting period [63]. Risk Management - The company has detailed the risks it faces in the annual report, which investors are advised to review [8]. - The company has emphasized the need for effective management of receivables and the arrangement of payments to improve cash flow and financial stability [52]. - The company has faced ongoing operational risks as highlighted in the audit report by Ruihua Certified Public Accountants [54]. - The company reported a high bad debt provision rate of 53.75% for accounts receivable and 40.32% for other receivables, indicating significant financial risk [112]. Employee and Management Information - The total number of employees in the parent company is 1,727, with 225 in major subsidiaries, totaling 1,952 employees [104]. - The company has a total of 820 retired employees who incur costs for the parent company and major subsidiaries [104]. - The company has established a salary policy and management evaluation plan for the economic targets of 2013 [104]. - The company’s management team has been in place since 2009, ensuring continuity in leadership and strategic direction [95]. - The company has implemented training for 2,347 personnel, with 1,117 of those being frontline employees, accounting for 47.60% of total training [104]. Investment and Capital Management - The company’s investment cash outflow increased by 46.44% to CNY 1,091,000,000.00 [30]. - The company has a long-term investment cost of RMB 60,830,260.00 in its subsidiary Guizhou Anlong Huahong Chemical Co., Ltd., which has a net asset value of -RMB 102,366,643.59 as of December 31, 2013 [79]. - The company plans to dispose of underperforming subsidiaries to reduce losses and improve its main business operations [82]. - The company has signed a rental contract for cement grinding station equipment with an annual rent of RMB 2,400,000, effective from November 16, 2012, to November 15, 2013 [82]. Accounting and Financial Reporting - The company has not made any changes to accounting policies or estimates during the reporting period [54]. - The financial statements were prepared based on the going concern assumption, despite the significant uncertainties regarding the company's ability to continue operations [157]. - The company’s financial reports comply with the relevant accounting standards and regulations, ensuring transparency and accuracy in financial reporting [158]. - The company recognizes financial assets when almost all risks and rewards of ownership have been transferred to the transferee [178].