天邦食品(002124) - 2015 Q4 - 年度财报

Important Notice, Table of Contents, and Definitions Major Risk Warnings The company identifies five core operational risks: raw material price volatility, cyclical hog market price fluctuations, disease risks in farming, management and capital pressures from full industrial chain integration, and increased costs due to stricter environmental policies, with preliminary response strategies developed - The company faces major operational risks including: - Raw material price risk: Prices of key agricultural raw materials fluctuate significantly due to climate, planting preferences, and exchange rates. The company addresses this through centralized procurement, seeking alternative materials, and strategic supplier partnerships[4] - Hog price fluctuation risk: Cyclical fluctuations in market hog prices may cause volatility in farming gross margins, posing a risk to company performance if prices fall or increases do not cover costs. The company ensures profitability through standardized management and cost control[5][6] - Farming disease risk: Both aquaculture and hog farming face disease risks, potentially harming profits and consumer confidence. The company controls this by strengthening biosecurity management and establishing an animal health management company[7] - Industrial chain integration risk: Integration leads to increased investment, significant capital pressure, and potential reduction in innovation capacity. The company mitigates investment through "company + family farm" cooperation models and introduces market-oriented management mechanisms[8] - Environmental policy change risk: Stricter national environmental standards would require increased investment in environmental facilities, thereby raising production costs[9] Profit Distribution Plan The company's board of directors approved the 2015 profit distribution plan, proposing a cash dividend of 2 Yuan (tax inclusive) per 10 shares and a capital reserve transfer of 12 shares per 10 shares to all shareholders Profit Distribution Plan Details | Distribution Item | Specific Plan | | :--- | :--- | | Cash Dividend | 2 Yuan (tax inclusive) cash dividend per 10 shares | | Capital Reserve Transfer | 12 shares transferred from capital reserve per 10 shares | | Bonus Shares | 0 shares | | Base Share Capital | 289,399,941 shares | Company Profile and Key Financial Indicators Company Basic Information Ningbo Tech-Bank Co, Ltd (Stock Abbreviation: Tech-Bank, Code: 002124) is a company listed on the Shenzhen Stock Exchange, with Zhang Banghui as its legal representative, and no changes in its main business or controlling shareholder since listing Company Information | Item | Content | | :--- | :--- | | Stock Abbreviation | Tech-Bank | | Stock Code | 002124 | | Listing Exchange | Shenzhen Stock Exchange | | Legal Representative | Zhang Banghui | | Main Business Change | No Change | | Controlling Shareholder Change | No Change | Key Accounting Data and Financial Indicators In 2015, the company's operating revenue was 2,141.29 million Yuan, a 17.75% year-on-year decrease, while net profit attributable to shareholders significantly increased by 239.62% to 110.26 million Yuan, and net profit after non-recurring items surged by 2,991.77% to 45.33 million Yuan, indicating improved operational quality and steady growth in total assets and net assets Key Financial Indicators | Key Financial Indicator | 2015 | 2014 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Operating Revenue (Yuan) | 2,141,293,716.15 | 2,603,349,676.94 | -17.75% | | Net Profit Attributable to Parent (Yuan) | 110,264,908.87 | 32,466,874.38 | 239.62% | | Net Profit Attributable to Parent (Excl. Non-recurring Items) (Yuan) | 45,330,763.30 | 1,466,176.38 | 2,991.77% | | Net Cash Flow from Operating Activities (Yuan) | 220,548,411.25 | 85,228,225.53 | 158.77% | | Basic Earnings Per Share (Yuan/share) | 0.51 | 0.16 | 218.75% | | Weighted Average Return on Net Assets | 17.19% | 6.14% | 11.05% | | Total Assets (Yuan) | 1,967,302,260.76 | 1,884,564,818.22 | 4.39% | | Net Assets Attributable to Parent (Yuan) | 1,089,365,150.75 | 554,425,780.45 | 96.49% | Quarterly Key Financial Indicators The company's 2015 performance showed a quarter-on-quarter improvement, moving from a first-quarter loss to profitability in the second quarter, with significant profit growth in the third and fourth quarters, and the third quarter's net profit attributable to the parent reaching its annual peak Quarterly Financial Indicators | Financial Indicator (Yuan) | Q1 | Q2 | Q3 | Q4 | | :--- | :--- | :--- | :--- | :--- | | Operating Revenue | 404,096,378.85 | 615,868,105.93 | 659,041,346.56 | 462,287,884.81 | | Net Profit Attributable to Parent | -25,370,724.79 | 4,170,614.08 | 73,456,475.96 | 58,008,543.62 | Non-recurring Gains and Losses Items and Amounts In 2015, the company's total non-recurring gains and losses amounted to 64.93 million Yuan, significantly impacting current net profit, primarily driven by 52.37 million Yuan from disposal of non-current assets (mainly subsidiary disposals) and 19.42 million Yuan from government subsidies Non-recurring Gains and Losses | Item | 2015 Amount (Yuan) | Description | | :--- | :--- | :--- | | Disposal gains/losses of non-current assets | 52,366,949.39 | Primarily gains from disposal of subsidiaries | | Government grants recognized in current profit/loss | 19,418,588.39 | Primarily government subsidy income | | Net other non-operating income and expenses | -5,503,030.68 | Primarily property losses from natural disaster in Dahua, Guangxi | | Total | 64,934,145.57 | - | Company Business Overview Main Business and Operational Overview During the reporting period, the company focused on core businesses and adjusted its strategy, resulting in a 17.75% year-on-year decrease in operating revenue to 2,141 million Yuan, but a significant 239.62% increase in net profit to 110 million Yuan, primarily driven by market-oriented sales of biological products (vaccines), cost control, and rising hog prices in the farming segment, further focusing on its main business by disposing of non-core assets - The company's business segments performed as follows during the reporting period: - Feed business: Total sales volume was 379.3 thousand tons, largely flat. Aquaculture feed sales decreased by 16.78%, while livestock and poultry feed sales increased by 10.73%. The decline in some aquaculture feed volume was to ensure internal farming supply and control accounts receivable risk[33] - Biological products business: Sales revenue was 151 million Yuan, a slight decrease of 2.23% year-on-year, but net profit increased by 22.07%. The company strengthened market-oriented vaccine sales, compensating for the shortfall in tender vaccine sales and improving profitability[33] - Hog farming business: Sold 414.8 thousand heads of hogs. Despite a decrease in sow inventory due to natural disasters and farm renovations, which affected output scale, profitability significantly increased year-on-year through cost control and rising hog prices[34] Significant Changes in Major Assets During the reporting period, the company's major asset structure changed, with long-term equity investments increasing by 30.62% due to fair value measurement of remaining equity after subsidiary disposal, construction in progress significantly decreasing by 32.65% as projects were completed and transferred to fixed assets, and intangible assets decreasing by 13.63% due to subsidiary disposals Significant Changes in Major Assets | Major Asset | Significant Change Description | | :--- | :--- | | Long-term Equity Investments | Increased by 30.62% year-on-year, primarily due to the fair value measurement of remaining equity after losing control of subsidiary Inner Mongolia Caoyuan Tianbang following its disposal | | Construction in Progress | Decreased by 32.65% year-on-year, mainly due to projects being completed and transferred to fixed assets | | Intangible Assets | Decreased by 13.63% year-on-year, primarily due to the disposal of some subsidiaries | Core Competitiveness Analysis The company's core competitiveness is built upon a technology-innovation-driven full industrial chain model, encompassing leading R&D capabilities, internationally advanced production processes, safe and environmentally friendly products, a high-caliber talent team, and international cooperation and M&A capabilities, maintaining industry leadership in animal vaccines, specialized aquatic feed, and hog breeding through collaborations with research institutes, investments in international breeding companies, and introduction of advanced production lines - R&D and Technology: Possesses provincial-level engineering technology centers and postdoctoral workstations, with close cooperation with institutions like the Chinese Academy of Fishery Sciences. Achieved multiple technological breakthroughs in animal vaccines, pig breeding (investment in Choice Genetics), and aquaculture (establishment of academician workstation)[37] - Production Process: Owns international-grade extruded aquatic feed production lines and domestically advanced vaccine microcarrier suspension culture workshops, ensuring high product quality and production efficiency[38] - Product Safety: Products are certified as green food production materials and have passed multiple domestic and international quality system certifications, with a commitment to not adding any antibiotics in feed production to ensure food safety[39] - Talent Strategy: Built a high-caliber employee team through internal training systems like Tianbang Business School and external recruitment, with 32 mid-to-senior level talents and 156 various talents introduced during the reporting period[41] - Internationalization Capability: Successfully acquired the China business of AgFeed Industries, a NASDAQ-listed company, and strategically invested in the French pig breeding company Choice Genetics, accumulating rich experience in cross-border M&A and post-investment management[42] Management Discussion and Analysis Overview During the reporting period, the company adjusted and clarified its new strategic plan, adopting "Bio-Tech-Bank + Smart Tech-Bank" as its overall business strategy, focusing on pig breeding, animal health, and farming management to become a leading animal-derived food supplier, implementing organizational restructuring to strengthen headquarters management, actively pursuing international M&A and cooperation for external expansion, and divesting non-core businesses to concentrate resources on its main operations - New Strategic Positioning: Proposed a new mission of "Food for Heaven, Harmony for Nation" and established the "Bio-Tech-Bank + Smart Tech-Bank" overall business strategy, focusing on integrating high-end resources across the pig industrial chain[45] - Organizational Structure Adjustment: To implement the strategy, the company reorganized and established new departments such as the Strategic Management and Investment Department and Chief Smart Officer, clarifying responsibilities for each business segment[46] - Business Adjustment: Adopted a "plus-minus" strategy, on one hand vigorously developing the pig industry and rapidly expanding its hog farming footprint, and on the other hand disposing of businesses less aligned with the strategy to concentrate resources on core operations[46] Main Business Analysis In 2015, the company's main business developed amidst adjustments: the feed segment maintained stable sales focusing on high-end aquatic feed; the biological products segment achieved a 22.07% profit growth through market-oriented sales despite a decline in tender vaccine sales; the hog farming segment had a successful year, selling 414.8 thousand heads and continuously improving production efficiency; and the food segment launched its "Shifen Weidao" brand, completing its full industrial chain layout Revenue and Costs In 2015, total revenue was 2,141 million Yuan, a 17.75% year-on-year decrease. By industry, hog farming revenue significantly grew by 61.24%, becoming a key growth driver, while biodiesel and chemical grease business revenue sharply declined by 78.39%. Feed and feed raw materials remained the largest revenue source, accounting for 75.93% of total revenue. In terms of operating costs, raw material and labor costs in the farming business both increased significantly by 36.23% and 41.52% respectively, reflecting the expansion of farming scale Operating Revenue by Industry | Operating Revenue by Industry (Yuan) | 2015 | Proportion of Operating Revenue | 2014 | Year-on-Year Change | | :--- | :--- | :--- | :--- | :--- | | Feed and Feed Raw Materials | 1,625,974,322.65 | 75.93% | 1,951,445,852.42 | -16.68% | | Hog Farming | 651,899,363.08 | 30.44% | 404,299,008.64 | 61.24% | | Biological Products | 151,397,519.11 | 7.07% | 154,834,810.44 | -2.22% | | Biodiesel and Chemical Grease | 86,817,358.18 | 4.05% | 401,807,859.75 | -78.39% | - Physical Sales: Feed sales were 379.3 thousand tons, a slight decrease of 0.32% year-on-year; hog sales were 415 thousand heads, a decrease of 9.78% year-on-year[53] - Cost Structure: Raw material costs for the farming business increased by 36.23% year-on-year, and labor wages increased by 41.52% year-on-year, but depreciation significantly decreased by 52.01% year-on-year[55] - During the reporting period, the company's consolidation scope changed, with the addition of Zhejiang Tongdian Biotechnology Co, Ltd through a non-common control business combination, and the disposal of several subsidiaries including Gansu Tianbang and Sichuan Jindei due to strategic focus[56][57][58] Expenses During the reporting period, the company's selling expenses decreased by 14.78% year-on-year, mainly due to increased internal sales and cost control. Administrative expenses increased by 10.61% year-on-year due to increased investment by subsidiary Han Shiwei and the addition of new subsidiaries. Financial expenses remained largely stable Expense Items | Expense Item | 2015 (Yuan) | 2014 (Yuan) | Year-on-Year Change | Main Change Explanation | | :--- | :--- | :--- | :--- | :--- | | Selling Expenses | 115,359,626.59 | 135,371,675.87 | -14.78% | Increased internal sales, overall cost control | | Administrative Expenses | 200,206,422.11 | 181,001,654.90 | 10.61% | Increased investment by subsidiary Han Shiwei, new subsidiaries and personnel | | Financial Expenses | 52,098,786.49 | 52,368,030.38 | -0.51% | Largely stable | Research and Development Investment In 2015, the company's total R&D investment was 54.37 million Yuan, a 12.03% year-on-year decrease, but its proportion of operating revenue slightly increased to 2.54%. R&D investment was not capitalized. The company conducted 47 R&D projects, applied for 13 invention patents, and was granted 15 utility model patents R&D Investment Indicators | R&D Investment Indicator | 2015 | 2014 | Change Percentage | | :--- | :--- | :--- | :--- | | R&D Investment Amount (Yuan) | 54,366,629.17 | 61,797,958.53 | -12.03% | | R&D Investment as % of Revenue | 2.54% | 2.37% | 0.17% | | Capitalized R&D Investment Amount (Yuan) | 0.00 | 0.00 | 0.00% | Cash Flow The company's cash flow significantly improved, with net cash flow from operating activities reaching 220.55 million Yuan, a substantial 158.77% year-on-year increase primarily due to reduced cash payments for goods. Net cash outflow from investing activities narrowed significantly by 61.09%, mainly due to increased cash recovery from asset disposals and reduced fixed asset investments. Cash flow from financing activities turned from positive to negative, primarily due to non-public offering proceeds and increased repayment of bank loans, resulting in a net increase of 106.18 million Yuan in cash and cash equivalents Cash Flow Items | Cash Flow Item (Yuan) | 2015 | 2014 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Net Cash Flow from Operating Activities | 220,548,411.25 | 85,228,225.53 | 158.77% | | Net Cash Flow from Investing Activities | -86,183,478.67 | -221,519,215.38 | 61.09% | | Net Cash Flow from Financing Activities | -28,201,098.78 | 118,161,654.23 | -123.87% | | Net Increase in Cash and Cash Equivalents | 106,184,628.69 | -18,300,042.84 | 680.24% | Analysis of Assets and Liabilities As of the end of 2015, the company's asset and liability structure was optimized, with a significant increase in monetary funds due to cash collection from credit sales, a decrease in accounts receivable and inventory due to timely collections and subsidiary disposals, and a substantial reduction in short-term borrowings from 49.91% to 27.40% of total assets due to proceeds from non-public offering used to repay loans, significantly alleviating short-term debt pressure Assets and Liabilities Status | Item | 2015 Year-end Amount (Yuan) | % of Total Assets | 2014 Year-end Amount (Yuan) | % of Total Assets | Change Explanation | | :--- | :--- | :--- | :--- | :--- | :--- | | Monetary Funds | 318,401,305.18 | 16.18% | 208,044,482.78 | 11.04% | Cash collection from credit sales | | Accounts Receivable | 44,859,533.97 | 2.28% | 80,888,824.87 | 4.29% | Timely collection and subsidiary disposal | | Inventories | 346,830,060.17 | 17.63% | 420,978,380.42 | 22.34% | Subsidiary disposal and reduced raw material stocking | | Short-term Borrowings | 539,014,459.22 | 27.40% | 940,618,728.25 | 49.91% | Non-public offering proceeds used to repay loans | Investment Analysis During the reporting period, the company completed a non-public stock offering, raising a total of 438.3 million Yuan, primarily used for the acquisition of 100% equity in AgFeed Industries and supplementing working capital, with all raised funds utilized as planned. The company also planned to participate in a cooperative investment in an industrial investment fund focused on overseas agricultural technology equity investments, but no actual investment had been made as of the reporting period - The company raised 438.3 million Yuan through a non-public stock offering in 2015, which has been fully utilized[76] Use of Raised Funds | Committed Project for Raised Funds | Committed Investment Amount (Ten Thousand Yuan) | Cumulative Investment Amount as of Period-end (Ten Thousand Yuan) | Profit Achieved in Current Period (Ten Thousand Yuan) | | :--- | :--- | :--- | :--- | | Acquisition of 100% equity in AgFeed Industries | 28,862.2 | 28,862.2 | 5,830.32 | | Supplementing working capital | 14,967.8 | 14,967.8 | 0 | - The company plans to participate in a cooperative industrial investment fund, focusing on equity investments in overseas agricultural technology-related fields, but no actual investment had been made as of the end of the reporting period[73] Company's Future Development Outlook The company anticipates uneven development across agricultural sub-sectors, with significant growth potential remaining in specialized aquatic feed, scaled hog farming, high-quality animal vaccines, and fresh food markets. The company will adhere to its vision of "Beautiful Food, Creating a Happy Life," building a green and healthy full industrial chain from breeding, feed, and vaccines to food terminals through technological innovation and international M&A. Specific operational plans include deepening biological product R&D, enhancing profitability of specialized aquatic feed, expanding hog farming scale, and improving food segment operations - Industry Trends: The company identifies specialized aquatic feed, scaled hog farming, market-oriented vaccines, and high-quality fresh food as future growth points[88][89] - Company Strategy: Positioned as a leading animal-derived food supplier, building a healthy food full industrial chain through technological innovation and global resource integration[89] - 2016 Operational Plan: - Biological Products: Increase technological investment, deepen cooperation with Nanjing Agricultural University, and seek M&A opportunities[90] - Aquatic Feed: Strengthen service marketing and increase sales of high-margin products[90] - Hog Farming: Promote regional construction, expand farming scale, and popularize the "company + family farm" model[91] - Fresh Food: Establish processing centers and traceability systems, develop multi-level sales channels, and build an O2O marketing model[91] - Smart Tech-Bank: Integrate information systems, promote pig farm management software, and achieve internal and external collaboration[92] Significant Events Profit Distribution and Capital Reserve Transfer The company announced its dividend distribution plans for the past three years. The 2015 proposal includes a cash dividend of 2 Yuan per 10 shares and a transfer of 12 shares from capital reserve per 10 shares, totaling 57.88 million Yuan in cash dividends, representing 52.49% of the net profit attributable to the parent for the year. Cash dividends were also distributed in 2014 and 2013, with payout ratios of 64.16% and 17.59% respectively, demonstrating the company's consistent shareholder return policy Ordinary Share Profit Distribution and Capital Reserve to Share Capital Transfer | Dividend Year | Cash Dividend Plan | Total Cash Dividend (Yuan) | Ratio to Net Profit Attributable to Parent | | :--- | :--- | :--- | :--- | | 2015 (Proposal) | 2 Yuan per 10 shares, 12 shares transferred | 57,879,988.20 | 52.49% | | 2014 | 0.998561 Yuan per 10 shares | 20,831,000.00 | 64.16% | | 2013 | 1.00 Yuan per 10 shares | 20,550,000.00 | 17.59% | Fulfillment of Commitments During the reporting period, the company and its actual controllers, Wu Tianxing and Zhang Banghui, strictly fulfilled commitments made during initial public offerings and refinancing activities, including those regarding avoiding horizontal competition and regulating related-party transactions. Additionally, the company's acquisition of AgFeed Industries exceeded its 2015 performance forecast, achieving 58.30 million Yuan against a target of 42.97 million Yuan - The company and its actual controllers, Wu Tianxing and Zhang Banghui, strictly fulfilled long-term effective commitments to avoid horizontal competition and regulate related-party transactions[104][105] Profit Forecast Fulfillment for AgFeed Industries | Profit Forecast Project | Forecast Period | Predicted Performance for Current Period (Ten Thousand Yuan) | Actual Performance for Current Period (Ten Thousand Yuan) | Achieved Forecast | | :--- | :--- | :--- | :--- | :--- | | AgFeed Industries | 2014/08/01 - 2015/12/31 | 4,297.49 | 5,830.32 | Yes (Exceeded Forecast) | Changes in Consolidation Scope In 2015, the company's consolidation scope significantly changed: it acquired 100% equity in Zhejiang Tongdian Biotechnology Co, Ltd for 9.75 million Yuan through a non-common control business combination, and to focus on its main business, it sold all or part of its equity in several subsidiaries including Gansu Tianbang, Sichuan Jindei, and Hainan Hejie, with the disposal of Inner Mongolia Caoyuan Tianbang resulting in loss of control. Additionally, subsidiary Han Shiwei Food established six new subsidiaries in Jiangsu, Hubei, Jiangxi, and other regions, further expanding its farming business footprint - New Consolidation: Acquired 100% equity in Zhejiang Tongdian Biotechnology Co, Ltd for 9.75 million Yuan, adding 0.1104 million Yuan in goodwill[110][111] - Subsidiary Disposals: Sold 100% equity in several subsidiaries including Gansu Tianbang, Sichuan Jindei, Anhui Jindei, and Hainan Hejie[113] - Loss of Control: Lost control over Inner Mongolia Caoyuan Tianbang Feed Co, Ltd through phased disposal of equity, with the remaining 46% equity re-measured at a fair value of 41.40 million Yuan, resulting in a gain of 33.01 million Yuan[114] - New Subsidiaries: Subsidiary Han Shiwei Food established new wholly-owned subsidiaries in Jiangsu, Hubei, Jiangxi, Bengbu, Guangxi, and Hunan[115][116] Implementation of Equity Incentive Plan During the reporting period, the first exercise period of the company's initial stock option incentive plan was completed, with a cumulative exercise of 3.11 million shares. However, due to not meeting performance targets in 2014, both the second exercise period and the first exercise period of the reserved options did not meet exercise conditions, leading to the cancellation of a total of 2.8075 million stock options. Additionally, unexercised options of some incentive recipients were canceled due to their departure - Exercise Status: The first exercise period of the initial incentive plan was completed, with 106 incentive recipients cumulatively exercising 3,110,000 shares[123] - Cancellation Status: Due to not meeting the exercise conditions for 2014 performance, the company canceled 2,332,500 shares of options from the second exercise period and 475,000 shares of reserved options[124] - Departure Cancellation: Due to the departure of 16 incentive recipients, their unexercised 532,500 shares of stock options were canceled[125] - Subsequent Termination: As 2015 performance also did not meet targets, stock options for the third exercise period and the second exercise period of reserved options were also resolved to be canceled after the reporting date[125] Share Changes and Shareholder Information Share Changes During the reporting period, the company's total share capital increased from 208 million shares to 289 million shares, primarily due to two events: an increase of 3.11 million shares from equity incentive exercises and an increase of 80.79 million shares from a non-public stock offering, resulting in the proportion of restricted shares rising from 29.26% to 49.29% - Reasons for Share Increase: 1. Equity Incentive Exercise: Completed exercise of 3,110,000 shares[153] 2. Non-public Offering: Added 80,789,941 shares for public circulation[154] - Share Capital Structure Change: Total share capital increased from 208,310,000 shares to 289,399,941 shares. The proportion of unrestricted shares decreased from 70.74% to 50.71%[153] - The company's actual controllers, Wu Tianxing and Zhang Banghui, and other senior executives increased their shareholdings through secondary market purchases and subscription of non-public offering shares, committing to corresponding lock-up periods[157][158] Shareholder and Actual Controller Information As of the end of the reporting period, the company had 10,574 common shareholders. The actual controllers, Zhang Banghui and Wu Tianxing, were the top two shareholders, holding a combined 47.65% of shares. The top ten shareholders also included two National Social Security Fund portfolios. Some shares held by actual controllers Zhang Banghui and Wu Tianxing were pledged Top Shareholders | Shareholder Name | Shareholder Nature | Shareholding Percentage | Shares Held at Period-end (shares) | Pledge or Freeze Status | | :--- | :--- | :--- | :--- | :--- | | Zhang Banghui | Domestic Natural Person | 29.73% | 86,046,642 | Pledged 85,400,000 | | Wu Tianxing | Domestic Natural Person | 17.92% | 51,871,485 | Pledged 33,500,300 | | National Social Security Fund 401 Portfolio | Other | 4.15% | 12,000,010 | - | | National Social Security Fund 104 Portfolio | Other | 4.00% | 11,588,960 | - | | Chen Nengxing | Domestic Natural Person | 3.73% | 10,791,992 | Pledged 9,000,000 | - The company's controlling shareholders and actual controllers are natural persons Zhang Banghui and Wu Tianxing, with no changes during the reporting period[167][168] Directors, Supervisors, Senior Management, and Employees Changes in Shareholdings and Remuneration of Directors, Supervisors, and Senior Management During the reporting period, several directors, supervisors, and senior management increased their shareholdings through non-public offering subscriptions, including Chairman Wu Tianxing (approx. 21.87 million shares) and Vice Chairman and President Zhang Banghui (approx. 36.55 million shares). In 2015, the total pre-tax remuneration paid to directors, supervisors, and senior management was 5.6375 million Yuan. Chief Operating Officer Zhao Qiongying resigned on December 31, 2015, due to personal reasons - Company Chairman Wu Tianxing, Vice Chairman Zhang Banghui, Supervisor Board Chairman Hu Laigen, and several other directors, supervisors, and senior management increased their shareholdings during this period[173][174] Remuneration of Directors, Supervisors, and Senior Management | Name | Position | Total Pre-tax Remuneration from Company (Ten Thousand Yuan) | | :--- | :--- | :--- | | Wu Tianxing | Chairman | 36.17 | | Zhang Banghui | Vice Chairman, President | 13.13 | | Hong Jianping | Director, Vice President | 47.17 | | Su Lirong | Vice President | 88.67 | | Total | - | 563.75 | - Chief Operating Officer Zhao Qiongying resigned on December 31, 2015, due to personal reasons[175] Employee Information As of the end of the reporting period, the company had a total of 2,041 active employees. Production personnel constituted the largest group with 1,032 employees. In terms of education, employees with college degrees or higher totaled 908, accounting for 44.5% of the total workforce. The company established a performance-linked compensation system and provides systematic employee training through Tianbang Business School Employee Structure | Category | Number of People | | :--- | :--- | | Total Active Employees | 2,041 | | Professional Composition | | | Production Personnel | 1,032 | | Sales Personnel | 398 | | Technical Personnel | 189 | | Education Level | | | PhD | 10 | | Postgraduate | 81 | | Bachelor's Degree | 363 | | Associate Degree | 454 | | Other | 1,133 | Corporate Governance Overview of Corporate Governance During the reporting period, the company strictly adhered to laws and regulations such as the Company Law and Securities Law, continuously improving its corporate governance structure and maintaining independence from its controlling shareholder in business, personnel, assets, organization, and finance. The actual corporate governance status complied with the requirements of relevant normative documents issued by the China Securities Regulatory Commission, with no significant discrepancies found or rectification requests received from regulatory authorities - The company's corporate governance structure is sound, operating strictly in accordance with regulatory requirements, ensuring the standardized operation of the general meeting of shareholders, board of directors, supervisory board, and management[199][200][201] - The company maintains independence from its controlling shareholder, actual controller, and other controlled entities in five aspects: business, personnel, assets, organization, and finance, possessing a complete business system and independent operating capabilities oriented towards the market[209][210][211] Internal Control Evaluation The company conducted a self-evaluation of its internal controls for 2015, concluding that it has established and effectively operated a sound internal control system for financial reporting in accordance with enterprise internal control standards. No material or significant deficiencies in financial or non-financial reporting were identified during the reporting period. The accounting firm also issued a standard unqualified opinion on the effectiveness of internal controls, consistent with the board's self-evaluation Internal Control Deficiencies | Internal Control Deficiency Status | Number (Units) | | :--- | :--- | | Material Deficiencies in Financial Reporting | 0 | | Material Deficiencies in Non-Financial Reporting | 0 | | Significant Deficiencies in Financial Reporting | 0 | | Significant Deficiencies in Non-Financial Reporting | 0 | - The accounting firm (Tianzhi International) issued a standard unqualified attestation report on the effectiveness of the company's internal controls, stating that the company maintained effective internal controls over financial reporting in all material respects as of December 31, 2015[230] Financial Report Audit Report Tianzhi International Certified Public Accountants (Special General Partnership) audited the company's 2015 financial statements and issued a standard unqualified audit opinion, affirming that the financial statements were prepared in all material respects in accordance with enterprise accounting standards, fairly reflecting the company's financial position as of December 31, 2015, and its operating results and cash flows for the year 2015 Audit Report Information | Item | Content | | :--- | :--- | | Type of Audit Opinion | Standard Unqualified Audit Opinion | | Audit Firm Name | Tianzhi International Certified Public Accountants (Special General Partnership) | | Audit Report Signing Date | April 10, 2016 | Main Financial Statements As of the end of 2015, the company's total assets were 1,967.30 million Yuan, total liabilities were 841.83 million Yuan, and owner's equity attributable to the parent company was 1,089.37 million Yuan. For the 2015 fiscal year, the company achieved operating revenue of 2,141.29 million Yuan, total profit of 125.79 million Yuan, and net profit of 107.60 million Yuan. Net cash flow from operating activities was 220.55 million Yuan, and cash and cash equivalents at year-end amounted to 314.23 million Yuan Consolidated Balance Sheet Key Items (2015-12-31) | Item | Amount (Yuan) | | :--- | :--- | | Total Assets | 1,967,302,260.76 | | Total Current Assets | 874,598,256.55 | | Total Non-current Assets | 1,092,704,004.21 | | Total Liabilities | 841,834,676.42 | | Total Current Liabilities | 828,602,735.93 | | Total Owner's Equity | 1,125,467,584.34 | | Owner's Equity Attributable to Parent Company | 1,089,365,150.75 | Consolidated Income Statement Key Items (2015) | Item | Amount (Yuan) | | :--- | :--- | | Total Operating Revenue | 2,141,293,716.15 | | Operating Profit | 108,202,760.83 | | Total Profit | 125,789,247.39 | | Net Profit | 107,602,966.74 | | Net Profit Attributable to Parent Company Owners | 110,264,908.87 | Consolidated Cash Flow Statement Key Items (2015) | Item | Amount (Yuan) | | :--- | :--- | | Net Cash Flow from Operating Activities | 220,548,411.25 | | Net Cash Flow from Investing Activities | -86,183,478.67 | | Net Cash Flow from Financing Activities | -28,201,098.78 | | Cash and Cash Equivalents at Period-end | 314,229,111.47 | Notes to Consolidated Financial Statements The notes to the financial statements provide detailed explanations of the composition and changes in each accounting item, including key information such as accounts receivable from the top five customers accounting for 21.57%, consumable biological assets (mainly hogs) in inventory valued at 206 million Yuan, goodwill with an original value of 207 million Yuan primarily from the acquisition of AgFeed Industries and Chengdu Tianbang, a significant decrease in short-term borrowings from the beginning of the period, and a high proportion of main business revenue in total operating revenue with minimal other business income - Accounts Receivable: The top five customers' year-end balances collectively accounted for 21.57% of the total[390] - Inventories: Year-end book value was 346.83 million Yuan, with consumable biological assets (piglets, nursery pigs, fattening pigs, etc.) amounting to 206 million Yuan, representing the most significant component of inventories[414] - Long-term Equity Investments: Investment in associate Choice Genetics had a book value of 74.27 million Yuan, with an investment loss of 11.65 million Yuan recognized in the current period[417] - Fixed Assets: Original book value was 1,058 million Yuan, accumulated depreciation was 336 million Yuan, and net value was 687 million Yuan, with buildings and structures accounting for the highest proportion[421][422] - Goodwill: Year-end original book value was 207 million Yuan, primarily from the acquisition of AgFeed Industries (149 million Yuan) and Chengdu Tianbang (47.51 million Yuan)[438] - Short-term Borrowings: Year-end balance was 539 million Yuan, a significant decrease from 941 million Yuan at the beginning of the period[451] - Operating Revenue: Main business revenue was 2,136 million Yuan, accounting for 99.75% of total revenue[490]