CS&S(SH:600536)2014-03-24 16:00Financial Performance - The company achieved operating revenue of CNY 2.98 billion in 2013, representing a year-on-year growth of 11.19%[14]. - The net profit attributable to shareholders was CNY 63.73 million, an increase of 9.79% compared to the previous year[14]. - Total assets reached CNY 4.52 billion, reflecting a 29.55% increase from the end of 2012[14]. - The company's net assets attributable to shareholders amounted to CNY 1.90 billion, up 49.57% year-on-year[14]. - The company recorded a net profit of CNY -19.13 million excluding non-recurring gains and losses, an improvement from the previous year's loss[14]. - The company's main business revenue for 2013 was approximately ¥2.95 billion, representing a year-on-year increase of 10.76% compared to ¥2.66 billion in 2012[30]. - The company's net profit for the year 2013 reached RMB 23,500,798.14, an increase from RMB 10,098,588.12 in 2011, reflecting a significant growth[94]. - The net profit of ChinaSoft System Engineering increased by 43.55% year-on-year, reaching 14,993,088.98 RMB, attributed to the expansion of its operational scale[57]. - The net profit of ChinaSoft Software decreased by 40.39% year-on-year to 14,920,410.30 RMB, primarily due to intensified industry competition and reduced government subsidies[59]. - The total comprehensive income of the company was RMB 50,917,872.75, a substantial increase from RMB 15,679,692.04 in the previous year[199]. Cash Flow and Investments - The company reported a negative cash flow from operating activities of CNY -221.51 million[14]. - Net cash flow from operating activities was CNY -221,510,347.62, while net cash flow from investing activities improved to CNY 86,147,567.04, and net cash flow from financing activities surged to CNY 594,306,338.28, a 711.63% increase year-on-year[36]. - The company completed the sale of 50,315,173 shares of Zhongsoft International, generating an investment income of RMB 58,078,400, which will help focus resources on core software products and services[101]. - The company raised a net amount of 637,048,399.08 RMB from a private placement of 21,587,512 A-shares in December 2013, with a total fundraising amount of 63,704.84 million RMB[52][53]. - The company has not utilized any of the raised funds as of the reporting period, with a total planned investment of 65,000 million RMB across various projects[54]. Shareholder and Capital Structure - The company plans to increase its total share capital to 494,562,782 shares through a capital reserve transfer, doubling the shares for every 10 held[4]. - The total number of shares increased by 21,587,512 shares, bringing the total shares to 247,281,391[127]. - The largest shareholder, China Electronics, holds 51.51% of the company, with an increase of 4,925,273 shares from the recent issuance[135]. - The company's shareholding structure includes 91.27% of unrestricted shares, totaling 225,693,879 shares[127]. - The company has no changes in its shareholder structure due to stock splits, mergers, or other reasons during the reporting period[133]. Strategic Initiatives and Market Position - The company emphasized resource integration and cost reduction as key strategies for business transformation in 2013[17]. - The company is actively exploring the construction of an enterprise tax service platform, leveraging the internet to expand its service market[18]. - The company aims to implement a "one-two-three-five" development strategy focusing on customer needs and major engineering projects[82]. - The company plans to achieve stable revenue in 2014, with R&D investment ratio around 18%[84]. - The company aims to strengthen its leading position in the information security market by leveraging national strategies[84]. Research and Development - Total R&D expenditure for the period reached CNY 613,767,179.90, accounting for 20.59% of operating revenue and 26.60% of net assets[35]. - The company has made significant progress in the information security sector, launching new data security solutions for various market segments, including state-owned enterprises and SMEs[21]. - The company has successfully developed and launched new versions of its software products, leading to significant sales growth in various sectors, including auditing and government[21]. - The company is committed to ongoing research and development in software and technology services to maintain competitive advantage[148]. Operational Efficiency - The company achieved a reduction in management expenses by 19.67% in 2013, primarily due to decreased R&D investments[34]. - The company has established a profit distribution policy prioritizing cash dividends, with a minimum of 10% of distributable profits allocated to shareholders annually[91]. - The company has implemented a governance structure that complies with national laws and regulations, ensuring clear responsibilities among decision-making and supervisory bodies[163]. Risk Management - The company faces technology risks due to the rapid development of new technologies like cloud computing and big data, which may impact traditional software services[88]. - The company recognizes talent risks as rising labor costs could affect profit growth, and it plans to optimize its talent structure[89]. - The company will implement an active acquisition strategy to expand its information security business, while being aware of the associated risks[90]. Employee and Management Structure - The total number of employees in the company is 5,705, with 1,652 in the parent company and 4,053 in major subsidiaries[155]. - The company has 3,155 R&D personnel, 1,115 technical support staff, 495 sales personnel, and 660 management staff[156]. - The employee education level shows that there are 687 with a master's degree or above, 3,677 with a bachelor's degree, and 1,156 with a college diploma[157]. - The company has a stable management team with extensive experience in the technology sector, which is crucial for future growth[148]. Internal Control and Governance - The board of directors evaluated the internal control system related to financial reporting and deemed it effective as of December 31, 2013[177]. - The company implemented 14 new internal control systems and revised 7 existing ones, creating a robust internal control framework[177]. - The company did not report any significant errors in its annual report disclosures during the reporting period[179].