UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 20-F/A
(Amendment No. 1)
(Mark One)
¨ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended September 30, 2012
OR
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
¨ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission file number: 000-51576
Origin Agritech Limited
(Exact name of Registrant as specified in its charter)
Not Applicable
(Translation of Registrant’s name into English)
British Virgin Islands
(Jurisdiction of incorporation or organization)
No. 21 Sheng Ming Yuan Road, Changping District, Beijing 102206, China
(Address of principal executive offices)
Dr. Han Gengchen
No. 21 Sheng Ming Yuan Road, Changping District, Beijing 102206, China
Tel: (86-10) 5890-7588
Fax: (86-10) 5890-7577
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act.
Title of each class | Name of each exchange on which registered | |
Ordinary Shares | The NASDAQ Global Select Market |
Securities registered or to be registered pursuant to Section 12(g) of the Act.
None
(Title of Class)
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report: 23,382,812 ordinary shares.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
¨Yes xNo
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
¨Yes xNo
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
xYes ¨No
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 c) Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
x Yes ¨ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer.
¨Large accelerated filer | xAccelerated filer | ¨Non-accelerated filer |
Indicate by a check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
U.S. GAAP x | International Financial Reporting Standard as | Other ¨ |
Issued by the International Accounting Standards | ||
Board ¨ |
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.
¨Item 17 ¨ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
¨Yes xNo
EXPLANATORY NOTE
This Amendment No. 1 (“Amendment”) to the Annual Report on Form 20-F for the year ended September 30, 2012, (“Form 20-F”) of Origin Agritech Limited, is being filed for the sole purpose of furnishing Exhibit 101 to the Form 20-F in accordance with Rule 405 of Regulation S-T. Exhibit 101 to this report provides the consolidated financial statements and related notes from the Form 20-F formatted in eXtensible Business Reporting Language (“XBRL”).
Pursuant to Rule 406T of Regulation S-T, the interactive data files of Exhibit 101 hereto are deemed not filed as part of the registration statement or any prospectus that incorporates those exhibits for purposes of Sections 11 and 12 of the Securities Act of 1933 and are deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934 and otherwise are not subject to liability under those sections.
This Amendment does not reflect events occurring after the filing of the Form 20-F or modify or update those disclosures that may be or have been affected by subsequent events. Such sub sequent matters will be addressed, as required, in subsequent reports filed by the registration with the SEC. Accordingly, this Amendment should be read in conjunction with the Form 20-F and the registrant’s other filings with the SEC.
ITEM 19. EXHIBITS
Index to Exhibits
Exhibit | ||
Number | Description | |
1.1 | Memorandum and Articles of Association of Origin Agritech Limited re-registered under the new Business Companies Act of the British Virgin Islands as of July 10, 2006 (Incorporated by reference to Exhibit 1.1 of our Annual Report 20-F (file no. 000-51576) filed with the Securities and Exchange Commission on July 14, 2006. | |
4.1 | 2005 Performance Equity Plan (Incorporated by reference to Annex D of the proxy statement/prospectus included in our Registration Statement S-4/A (file no. 333-124709) filed with the Securities and Exchange Commission on September 27, 2005). | |
4.2 | 2009 Performance Equity Plan (Incorporated by reference to Exhibit 4.1 of our Registration Statement on Form S-8 (file no. 333-166226) filed with the Securities and Exchange Commission on April 22, 2010). | |
4.3 | Technical Service Agreement between Origin Biotechnology and Beijing Origin (Incorporated by reference to Exhibit 10.14 of our Registration Statement S-4/A (file no. 333-124709) filed with the Securities and Exchange Commission on August 22, 2005). | |
4.4 | Technical Service Agreement between Origin Biotechnology and Henan Origin (Incorporated by reference to Exhibit 10.15 of our Registration Statement S-4/A (file no. 333-124709) filed with the Securities and Exchange Commission on August 22, 2005). | |
4.5 | Technical Service Agreement between Origin Biotechnology and Changchun Origin (Incorporated by reference to Exhibit 10.16 of our Registration Statement S-4/A (file no. 333-124709) filed with the Securities and Exchange Commission on August 22, 2005). | |
4.6 | Form of Stock Consignment Agreement (Incorporated by reference to Exhibit 10.17 of our Registration Statement S-4/A (file no. 333-124709) filed with the Securities and Exchange Commission on August 22, 2005). | |
4.7 | Technology Transfer Agreement between Henan Agriculture University and Beijing Origin (YuYu22) (Incorporated by reference to Exhibit 10.27 of our Registration Statement S-4/A (file no. 333-124709) filed with the Securities and Exchange Commission on August 22, 2005). | |
4.8 | Joint Development agreement with Corn Research Institute of Li County (1st Agreement) (Incorporated by reference to Exhibit 10.28 of our Registration Statement S-4/A (file no. 333-124709) filed with the Securities and Exchange Commission on August 22, 2005). | |
4.9 | Joint Development Agreement with Corn Research Institute of Li County (2nd Agreement) (Incorporated by reference to Exhibit 10.29 of our Registration Statement S-4/A (file no. 333-124709) filed with the Securities and Exchange Commission on September 16, 2005). | |
4.10 | Form Equity Transfer Agreement between Beijing Origin and shareholders of Denong Zhengcheng Seed Co., Ltd. pursuant to which Beijing Origin acquired 52.21% equity interest in Denong Zhengcheng Seed Co., Ltd. dated as of January 16, 2006 (Incorporated by reference to Exhibit 4.16 of our Annual Report 20-F (file no. 000-51576 ) filed with the Securities and Exchange Commission on July 14, 2006), |
Exhibit | ||
Number | Description | |
4.11 | Equity Transfer Agreement between Beijing Origin and Jilin Academy of Agriculture Science dated as of December 6, 2005 (Incorporated by reference to Exhibit 4.17 of our Annual Report 20-F (file no. 000-51576) filed with the Securities and Exchange Commission on July 14, 2006). | |
4.12 | Equity Transfer Agreement between Beijing Origin and China National Center for Biotechnology Development dated as of December 28, 2004 (Incorporated by reference to Exhibit 4.18 of our Annual Report 20-F (file no. 000-51576 ) filed with the Securities and Exchange Commission on July 14, 2006) | |
4.13 | New Corn Seed Liyu 35 Joint Development Agreement between Beijing Origin and Shijiazhuang Liyu Technology Development Co., Ltd. dated as of March 30, 2006 (Incorporated by reference to Exhibit 4.20 of our Annual Report 20-F (file no. 000-51576 ) filed with the Securities and Exchange Commission on July 14, 2006). | |
4.14 | Joint Development Agreement between Beijing Origin and Corn Research Institute of Li County dated January 31, 2002 (Incorporated by reference to Exhibit 4.21 of our Annual Report 20-F (file no. 000-51576) filed with the Securities and Exchange Commission on July 14, 2006). | |
4.15 | Joint Development Agreement between Beijing Origin and Corn Research Institute of Li County dated January 9, 2003 (Incorporated by reference to Exhibit 4.22 of our Annual Report 20-F (file no. 000-51576) filed with the Securities and Exchange Commission on July 14, 2006). | |
8.1* | List of Subsidiaries | |
11.1 | Code of Ethics (Incorporated by reference to Exhibit 11.1 of our Annual Report 20-F (file no. 000-51576) filed with the Securities and Exchange Commission on February 15, 2007). | |
11.2 | Code of Conduct (Incorporated by reference to Exhibit 11.2 of our Annual Report 20-F (file no. 000-51576) filed with the Securities and Exchange Commission on February 15, 2007). | |
12.1** | CEO Certification Pursuant to Rule 13a-14(a) (17 CFR 240.13a-14(a)) (17 CFR 240.13a-14(a)) or Rule 15d-1(a) (17 CFR 240.15d-14(a)) | |
12.2** | CFO Certification Pursuant to Rule 13a-14(a) (17 CFR 240.13a-14(a)) or Rule 15d-1(a) (17 CFR 240.15d-14(a)) | |
13.1** | CEO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
13.2** | CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
15.1* | Consent of BDO China Shu Lun Pan Certified Public Accountants LLP Limited to incorporation of its report on the Registrant's consolidated financial statements for fiscal years ended 2011 and 2012 into Registrant's Registration Statements on Forms S-8 (#333-145865 and #333-166226) and Form F-3 (#333-166236) | |
15.2* | Consent of BDO Limited to incorporation of its report on the Registrant's consolidated financial statements for fiscal year ended 2010 into Registrant's Registration Statements on Forms S-8 (#333-145865 and # 333-166226) and Form F-3 (#333-166236) | |
101.INS** | XBRL Instant Document | |
101.SCH** | XBRL Taxonomy Extension Schema Document | |
101.CAL** | XBRL Taxonomy Extension Calculation Linkbase Document |
Exhibit | ||
Number | Description | |
101.DEF** | XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB** | XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE** | XBRL Taxonomy Extension Presentation Linkbase Document |
* | Filed on January 10, 2013 |
** | Filed herewith |
SIGNATURE
The registrant hereby certifies that it meets all of the requirements for filing this amendment on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
Date: January 18, 2013
ORIGIN AGRITECH LIMITED
/s/ Gengchen Han
Name: Gengchen Han
Title: Chief Executive Officer
EXHIBIT 12.1
CERTIFICATION
I, Gengchen Han, certify that:
1. I have reviewed this annual report on Form 20-F/A of Origin Agritech Limited;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and
5. The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.
Date: January 18, 2013
/s/ Gengchen Han
Name: Gengchen Han
Title: Chief Executive Officer
EXHIBIT 12.2
CERTIFICATION
I, James Chen, certify that:
1. I have reviewed this annual report on Form 20-F/A of Origin Agritech Limited;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. The company's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company's internal control over financial reporting; and
5. The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.
Date: January 18, 2013
/s/ James Chen
Name: James Chen
Title: Chief Financial Officer
EXHIBIT 13.1
ORIGIN AGRITECH LIMITED
Certification
Pursuant to 18 U.S.C. Section 1350, the undersigned, Gengchen Han, Chief Executive Officer of Origin Agritech Limited (the “Company”), hereby certifies, to his knowledge, that the Company's annual report on Form 20-F/A for the year ended September 30, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: January 18, 2013
/s/ Gengchen Han
Name: Gengchen Han
Title: Chief Executive Officer
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
The foregoing certification is being furnished with the Company’s Report pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and it is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
EXHIBIT 13.2
ORIGIN AGRITECH LIMITED
Certification
Pursuant to 18 U.S.C. Section 1350, the undersigned, James Chen, Chief Financial Officer of Origin Agritech Limited (the “Company”), hereby certifies, to his knowledge, that the Company's annual report on Form 20-F/A for the year ended September 30, 2011 (the “Report”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: January 18, 2013
/s/ James Chen
Name: James Chen
Title: Chief Financial Officer
A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.
The foregoing certification is being furnished with the Company’s Report pursuant to 18 U.S.C. Section 1350. It is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and it is not to be incorporated by reference into any filing of the Company, whether made before or after the date hereof, regardless of any general incorporation language in such filing.
INVENTORIES (Tables)
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Sep. 30, 2012
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Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory, Current [Table Text Block] | Inventories consist of the following:
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Schedule Of Provision For Inventories [Table Text Block] | Provision for inventories is as below:
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ORGANIZATION AND PRINCIPAL ACTIVITIES (Details 1) (CNY)
In Thousands, unless otherwise specified |
Sep. 30, 2012
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Net assets acquired: | |
Cash | 163,517 |
Other current assets | 6,201 |
Due to State Harvest Shareholders and their designee | (2,022) |
Other payables and accrued expenses | (965) |
Business Acquisition, Cost of Acquired Entity, Purchase Price | 166,731 |
Less: Transaction costs paid in cash | (14,430) |
Tax effect of the Share Exchange Transaction | (39,060) |
Business Acquisition, Purchase Price Allocation, Assets Acquired (Liabilities Assumed), Net | 113,241 |
SHARE OPTION PLANS (Tables)
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Sep. 30, 2012
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Disclosure Of Compensation Related Costs, Share-Based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block] | A summary of the share option activity under the 2005 and 2009 Plans is as follows:
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Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block] | The fair value of each option granted is estimated on the date of grant using the Black-Scholes Option Pricing Model:
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LAND USE RIGHTS, NET (Details)
In Thousands, unless otherwise specified |
Sep. 30, 2012
USD ($)
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Sep. 30, 2012
CNY
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Sep. 30, 2011
CNY
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Land use rights | 36,399 | 36,569 | |
Accumulated amortization | (4,081) | (3,475) | |
Total | $ 5,097 | 32,318 | 33,094 |
ORGANIZATION AND PRINCIPAL ACTIVITIES (Details 2) (USD $)
In Thousands, unless otherwise specified |
12 Months Ended |
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Sep. 30, 2012
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Year 2006 [Member]
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Business Acquisition Additional Purchase Price Profit After Tax | $ 11,000 |
Year 2007 [Member]
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Business Acquisition Additional Purchase Price Profit After Tax | 16,000 |
Year 2008 [Member]
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Business Acquisition Additional Purchase Price Profit After Tax | 21,000 |
Year 2009 [Member]
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Business Acquisition Additional Purchase Price Profit After Tax | $ 29,000 |
ACQUIRED INTANGIBLE ASSETS, NET (Details Textual) (CNY)
In Thousands, unless otherwise specified |
12 Months Ended | ||
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Sep. 30, 2012
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Sep. 30, 2011
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Sep. 30, 2010
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Amortization of Intangible Assets | 5,846 | 8,870 | 9,692 |
BORROWINGS (Tables)
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Sep. 30, 2012
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Borrowings Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt [Table Text Block] |
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)
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Sep. 30, 2012
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Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Consolidation, Policy [Policy Text Block] | Principles of consolidation
The consolidated financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”); include the assets, liabilities, revenues, expenses and cash flows of all subsidiaries and variable interest entities. Intercompany balances, transactions and cash flows are eliminated on consolidation. |
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Convenience Translation [Policy Text Block] | Convenience translation into United States dollars
The consolidated financial statements are presented in Renminbi. The translation of Renminbi amounts into United States dollar amounts has been made for the convenience of the reader and has been made at the exchange rate quoted by the middle rate by the State Administration of Foreign Exchange in China on September 30, 2012 of RMB6.3410 to US$1.00. Such translation amounts should not be construed as representations that the Renminbi amounts could be readily converted into United States dollar amounts at that rate or any other rate. |
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Use of Estimates, Policy [Policy Text Block] | Use of estimates
The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are adjusted to reflect actual experience when necessary. Significant accounting estimates reflected in the Company’s consolidated financial statements include inventory valuation, useful lives of plant and equipment and acquired intangible assets, the valuation allowance for deferred income tax assets and the valuation of embedded derivatives of the convertible notes. Actual results could differ from those estimates. |
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Cash and Cash Equivalents, Policy [Policy Text Block] | Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, cash accounts, interest bearing savings accounts, time certificates of deposit and debt securities with a maturities of three months or less when purchased. |
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Inventory, Policy [Policy Text Block] | Inventories
Inventories are stated at the lower of cost, determined by weighted-average method, or market. Work-in-progress and finished goods inventories consist of raw materials, direct labor and overhead associated with the manufacturing process. |
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Land Use Rights [Policy Text Block] | Land use rights, net
Land use rights are recorded at cost less accumulated amortization. Amortization is provided over the term of the land use right agreements on a straight-line basis for the beneficial period. |
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Property, Plant and Equipment, Policy [Policy Text Block] | Plant and equipment, net
Plant and equipment are recorded at cost less accumulated depreciation and amortization. Maintenance and repairs are charged to expense as incurred. Depreciation is calculated on a straight-line basis over the following estimated useful lives:
The Company constructs certain of its facilities. In addition to costs under construction contracts, external costs directly related to the construction of such facilities, including duty and tariff, and equipment installation and shipping costs, are capitalized. Depreciation is recorded at the time assets are placed in service |
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Lease, Policy [Policy Text Block] | Leases
Leases are classified at the inception date as either a capital lease or an operating lease. For the lessee, a lease is a capital lease if any of the following conditions exist: a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property’s estimated remaining economic life or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases. The Company has no capital leases for any of the periods presented. |
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Goodwill and Intangible Assets, Goodwill, Policy [Policy Text Block] | Goodwill
Goodwill represents the excess of aggregate purchase price over the fair value of net assets acquired in a business combination. Goodwill is not amortized, but instead tested for impairment at least annually or more frequently if certain circumstances indicate a possible impairment may exist. The Company adopted FASB ASC 350-10 and performs its annual impairment review of goodwill on September 30 of each year. Management evaluates the recoverability of goodwill using a two-step impairment test approach at the reporting unit level, which is determined to be the enterprise level. In the first step, the fair value of the reporting unit is compared to its carrying value including goodwill. Second, if the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of the goodwill over the implied fair value of the goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a business combination.
The carrying amount of the goodwill at September 30, 2011 and 2012 represents the cost arising from the business combinations in previous years and no impairment on goodwill was recognized for any of the periods presented for the Company. The movement for goodwill is as follow:
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Goodwill and Intangible Assets, Intangible Assets, Policy [Policy Text Block] | Acquired intangible assets, net
Acquired intangible assets primarily consist of purchased technology rights and distribution network and are stated at cost less accumulated amortization. Amortization is calculated on a straight-line basis over the estimated useful lives of these assets and recorded in operating expenses. Amortization is calculated on a straight-line basis over the following estimated useful lives for the main acquired intangible assets:
Trademarks, which have indefinite live, are not amortized, but are reviewed for impairment at least annually, at year end date, or earlier upon the occurrence of certain triggering events. |
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Valuation Of Long Lived Assets [Policy Text Block] | Valuation of long-lived asset
The Company reviews the carrying value of long-lived assets to be held and used, including other intangible assets subject to amortization, when events and circumstances warrants such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset and intangible assets. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets and intangible assets to be disposed are determined in a similar manner, except that fair market values are reduced for the cost to dispose. |
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Revenue Recognition, Policy [Policy Text Block] | Revenue recognition
The Company derives its revenues primarily from the sale of various branded conventional seeds and branded seeds with biotechnology traits.
Revenue is recognized when pervasive evidence of an arrangement exists, products have been delivered, the price is fixed or determinable, collectability is reasonably assured and the right of return has expired. The Company generally determines the final selling price after a period the goods are delivered to the customers. Accordingly, the Company defers revenues recognition until the selling price has been finalized with the customers.
The estimated amounts of revenues billed in excess of revenues recognized are recorded as deferred revenues. |
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Government Subsidies [Policy Text Block] | Government subsidies
A government subsidy is not recognized until there is reasonable assurance that: (a) the enterprise will comply with the conditions attached to the grant; and (b) the grant will be received.
When the Company received the government subsidies but the conditions attached to the grants have not been fulfilled, such government subsidies are deferred and recorded under other payables and accrued expenses, and other long-term liability. The reclassification of short-term or long-term liabilities is depended on the management’s expectation of when the conditions attached to the grant can be fulfilled.
The Company received several financial supports from various levels of the government. In fiscal years 2011 and 2012, the Company received government subsidies of RMB nil and RMB14,000 respectively for plant and equipment projects; RMB nil and RMB10,900 respectively for land use right; and RMB nil and RMB3,640 for R&D and others. Government subsidies recognized as other income in the statement of income for the year ended September 30, 2010, 2011 and 2012, were RMB1,362, RMB nil and RMB3,846, respectively. |
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Cost of Sales, Policy [Policy Text Block] | Cost of revenues
Cost of revenues consists of expenses directly related to sales, including the purchase prices and development costs for seeds and, during the fiscal years ended September 30, 2011 and 2012, agricultural chemical products, depreciation and amortization, impairment of inventory, shipping and handling costs, salary and compensation, supplies, license fees, and rent. |
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Research and Development Expense, Policy [Policy Text Block] | Research and development costs
Research and development costs relating to the development of new products and processes, including significant improvements and refinements to existing products, are expensed as incurred. |
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Advertising Costs, Policy [Policy Text Block] | Advertising costs
Advertising costs are expensed when incurred and included in selling and marketing expenses. For the years ended September 30, 2010, 2011 and 2012, advertising costs were RMB1,560, RMB1,126 and RMB3,215, respectively. |
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Shipping and Handling Cost, Policy [Policy Text Block] | Shipping and handling cost
The Company includes shipping and handling costs as either cost of goods sold or selling and administrative expenses depending on the nature of the expenses. Shipping and handling costs which relate to transportation of products to customers’ locations is charged to selling and marketing expenses and shipping and handling which relate to the transportation of goods to factories from suppliers and from one factory to another is charged to cost of revenues.
For the years ended September 30, 2010, 2011 and 2012, shipping and handling cost included in selling and marketing expenses were RMB12,164, RMB10,503, and RMB11,446 respectively. |
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Allowance For Doubtful Account [Policy Text Block] | Allowance for doubtful account
The Company regularly monitors and assesses the risk of not collecting amounts owed to the Company by customers. This evaluation is based upon a variety of factors including: an analysis of amounts current and past due along with relevant history and facts particular to the customer. Based upon the results of this analysis, the Company records an allowance for uncollectible accounts for this risk. |
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Income Tax, Policy [Policy Text Block] | Income taxes
Deferred income taxes are recognized for the future tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements, net of operating loss carry forwards and credits. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant tax authorities.
The Company adopted FASB ASC 740-10. The Company’s policy on classification of all interest and penalties related to unrecognized tax benefits, if any, as a component of income tax provisions. |
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Foreign Currency Transactions and Translations Policy [Policy Text Block] | Foreign currency translation
The functional currency of the Company excluding Agritech and State Harvest is Renminbi. Monetary assets and liabilities denominated in currencies other than Renminbi are translated into Renminbi at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than Renminbi are converted into Renminbi at the applicable rates of exchange prevailing the transactions occurred. Transaction gains and losses are recognized in the consolidated statements of income and comprehensive income.
The functional currency of Agritech and State Harvest are maintained in United State dollars. Assets and liabilities are translated at the exchange rates at the balance sheet date, equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the period. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of other comprehensive (loss)/income. The Company has chosen Renminbi as its reporting currency. |
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Comprehensive Income, Policy [Policy Text Block] | Comprehensive income
Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Comprehensive income for the years has been disclosed within the consolidated statements of income and comprehensive income for presentational purpose of the disclosure of comprehensive income attributable to Agritech and the non-controlling interests respectively. |
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Earnings Per Share, Policy [Policy Text Block] | Income per share
Basic income per share is computed by dividing net income by the weighted average number of common shares outstanding during the years. Diluted income per share gives effect to all dilutive potential common shares outstanding during the years. The weighted average number of common shares outstanding is adjusted to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued. In computing the dilutive effect of potential common shares, the average stock price for the period is used in determining the number of treasury shares assumed to be purchased with the proceeds from the exercise of options. |
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Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | Share-based compensation
The Company adopts FASB ASC 718-10. ASC 718-10 requires that share-based payment transactions with employees, such as share options, be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period, with a corresponding addition to equity. Under this method, compensation cost related to employee share options or similar equity instruments is measured at the grant date based on the fair value of the award and is recognized over the period during which an employee is required to provide service in exchange for the award, which generally is the vesting period. |
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Fair Value Measurement, Policy [Policy Text Block] | Fair value measurement
The Company adopted FASB ASC 820-10, and which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. ASC 820-10 does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information.
ASC 820-10 establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include the following:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement. |
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New Accounting Pronouncements, Policy [Policy Text Block] | Recently issued accounting pronouncements
In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. This pronouncement is an authoritative guidance to amend certain measurement and disclosure requirements related to fair value measurements to improve consistency with international reporting standards. This guidance is effective prospectively for public entities for interim and annual reporting periods beginning after December 15, 2011, with early adoption prohibited. The Company is currently evaluating the effect of ASU No. 2011-04, but does not expect its adoption will have a material effect on its consolidated financial statements.
In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, which is a new guidance on the presentation of comprehensive income that will require a company to present components of net income and other comprehensive income in one continuous statement or in two separate, but consecutive statements. There are no changes to the components that are recognized in net income or other comprehensive income under current GAAP. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011, with early adoption permitted. It is applicable to the Company’s fiscal year beginning January 1, 2012. Currently, the Company evaluated the effect of ASU 2011-05 on its financial statements and does not expect its adoption will have a material effect on its consolidated financial statements.
In September 2011, the FASB issued ASU No. 2011-08, Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment, which specifies that an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. However, if an entity concludes otherwise, then it is required to perform the first step of the two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit, as described in FASB ASC 350-20-35-4. If the carrying amount of a reporting unit exceeds its fair value, then the entity is required to perform the second step of the goodwill impairment test to measure the amount of the impairment loss, if any, as described in FASB ASC 350-20-35-9. Under the amendments in ASU No. 2011-08, an entity has the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the first step of the two-step goodwill impairment test. An entity may resume performing the qualitative assessment in any subsequent period. ASU No. 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. The adoption of ASU No. 2010-28 is not expected to have any impact on the Company’s financial position, results of operations and cash flows.
In December 2011, the FASB issued ASU 2011-11, Balance Sheet (Topic 210): disclosures about Offsetting Assets and Liabilities, which requires entities to disclose both gross and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting agreement. The objective of the disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of International Financial Reporting Standards (“IFRS”). This ASU is effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. Retrospective presentation for all comparative periods presented is required. Its adoption of ASU 2011-11 is not expected to have material impact on its consolidated financial statements.
ASU 2011-05 was modified by the issuance of ASU 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 in December 2011, which indefinitely deferred certain provisions of ASU 2011-05, including the requirement to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net income is presented and the statement in which other comprehensive income is presented. This amendment is effective for both annual and interim financial statements beginning after December 15, 2011. The Company believes that its adoption of ASU 2011-12 will not have any material impact on its consolidated financial statements.
In July 2012, the FASB issued ASU 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment, which allows companies to perform a qualitative assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar in approach to the goodwill impairment test. The new guidance allows an entity the option to first assess qualitatively whether it is more likely than not (that is, a likelihood of more than 50 percent) that an indefinite-lived intangible asset is impaired, thus necessitating that it perform the quantitative impairment test. An entity is not required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative impairment test unless the entity determines that it is more likely than not that the asset is impaired. The new guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted for annual and interim impairment tests performed as of a date before July 27, 2012, if the financial statements for the most recent annual or interim period have not yet been issued. The Company will adopt the provisions of this new guidance on October 1, 2012. The Company believes that its adoption of ASU 2012-02 will not have any material impact on its consolidated financial statements.
In October 2012, the FASB issued ASU 2012-04, Technical Corrections and Improvements, which makes certain technical corrections and “conforming fair value amendments” to the FASB Accounting Standards Codification. The amendments affect various codification topics and apply to all reporting entities within the scope of those topics. These provisions of the amendment are effective upon issuance, except for amendments that are subject to transition guidance, which will be effective for fiscal periods beginning after December 15, 2012. The Company believes that its adoption of ASU 2012-04 will not have any material impact on its consolidated financial statements. |
OTHER ASSETS (Details)
In Thousands, unless otherwise specified |
Sep. 30, 2012
USD ($)
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Sep. 30, 2012
CNY
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Sep. 30, 2011
CNY
|
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Prepaid lease | 2,232 | 1,510 | |
Deposits for purchase of acquired intangible assets | 0 | 1,280 | |
Deposits for purchase of plant and equipment | 2,977 | 16,568 | |
Others | 37 | 282 | |
Other Assets, Noncurrent, Total | $ 827 | 5,246 | 19,640 |
PLANT AND EQUIPMENT, NET (Details Textual) (CNY)
In Thousands, unless otherwise specified |
12 Months Ended | ||
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Sep. 30, 2012
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Sep. 30, 2011
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Sep. 30, 2010
|
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Buildings and Improvements Gross Collateral To Bank Loan | 35,570 | 6,882 | |
Depreciation | 12,803 | 16,235 | 11,531 |
INCOME TAXES (Details 1)
In Thousands, unless otherwise specified |
Sep. 30, 2012
USD ($)
|
Sep. 30, 2012
CNY
|
Sep. 30, 2011
CNY
|
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Non-current deferred tax assets: | |||
Net operating loss carry forward | 33,265 | 20,928 | |
Impairment on inventory | 5,772 | 3,634 | |
Others | 6,929 | 3,498 | |
Non-current deferred income tax assets | 45,966 | 28,060 | |
Valuation allowances | (44,211) | (25,032) | |
Net non-current deferred income tax assets | $ 277 | 1,755 | 3,028 |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - GOODWILL (Details)
In Thousands, unless otherwise specified |
12 Months Ended | |||
---|---|---|---|---|
Sep. 30, 2012
CNY
|
Sep. 30, 2011
CNY
|
Sep. 30, 2010
CNY
|
Sep. 30, 2012
USD ($)
|
|
Balance | 11,973 | 16,665 | 16,665 | $ 1,888 |
Additions | 0 | 0 | 0 | |
Written off | 0 | (4,692) | 0 | |
Balance | 11,973 | 11,973 | 16,665 | $ 1,888 |
ACQUIRED INTANGIBLE ASSETS, NET (Details)
In Thousands, unless otherwise specified |
Sep. 30, 2012
USD ($)
|
Sep. 30, 2012
CNY
|
Sep. 30, 2011
CNY
|
Sep. 30, 2012
Technology Rights [Member]
CNY
|
Sep. 30, 2011
Technology Rights [Member]
CNY
|
Sep. 30, 2012
Distribution Rights [Member]
CNY
|
Sep. 30, 2011
Distribution Rights [Member]
CNY
|
Sep. 30, 2012
Trademarks [Member]
CNY
|
Sep. 30, 2011
Trademarks [Member]
CNY
|
Sep. 30, 2012
Other Intangible Assets [Member]
CNY
|
Sep. 30, 2011
Other Intangible Assets [Member]
CNY
|
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Acquired Finite Lived Intangible Asset Gross | 89,825 | 87,912 | 78,323 | 74,723 | 6,739 | 6,739 | 0 | 1,687 | 4,763 | 4,763 | |
Accumulated amortization | (59,926) | (54,366) | |||||||||
Impairment provision | (4,314) | (4,314) | |||||||||
Acquired intangible assets, net | $ 4,035 | 25,585 | 29,232 |
SHARE OPTION PLANS (Details Textual)
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12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | 12 Months Ended | 1 Months Ended | 12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
USD ($)
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Sep. 30, 2012
CNY
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Sep. 30, 2011
CNY
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Sep. 30, 2010
CNY
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Sep. 30, 2011
USD ($)
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Sep. 30, 2012
Tranche 1 [Member]
USD ($)
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Sep. 30, 2011
Tranche 1 [Member]
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Sep. 30, 2010
Tranche 1 [Member]
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Sep. 30, 2012
Tranche 2 [Member]
USD ($)
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Sep. 30, 2011
Tranche 2 [Member]
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Sep. 30, 2010
Tranche 2 [Member]
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Sep. 30, 2012
Tranche 3 [Member]
USD ($)
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Sep. 30, 2011
Tranche 3 [Member]
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Sep. 30, 2010
Tranche 3 [Member]
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Sep. 30, 2012
Tranche 4 [Member]
USD ($)
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Sep. 30, 2011
Tranche 4 [Member]
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Sep. 30, 2010
Tranche 4 [Member]
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Sep. 30, 2012
Tranche 5 [Member]
USD ($)
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Sep. 30, 2011
Tranche 5 [Member]
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Sep. 30, 2010
Tranche 5 [Member]
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Sep. 30, 2012
Tranche 6 [Member]
USD ($)
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Sep. 30, 2011
Tranche 6 [Member]
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Sep. 30, 2010
Tranche 6 [Member]
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Sep. 30, 2012
Tranche 7 [Member]
USD ($)
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Sep. 30, 2011
Tranche 7 [Member]
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Sep. 30, 2010
Tranche 7 [Member]
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Sep. 14, 2009
2005 Performance Equity Plan [Member]
USD ($)
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Nov. 08, 2005
2005 Performance Equity Plan [Member]
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Nov. 30, 2005
2005 Performance Equity Plan [Member]
Tranche 1 [Member]
USD ($)
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Oct. 31, 2007
2005 Performance Equity Plan [Member]
Tranche 2 [Member]
USD ($)
|
Mar. 31, 2008
2005 Performance Equity Plan [Member]
Tranche 3 [Member]
USD ($)
|
Jun. 30, 2008
2005 Performance Equity Plan [Member]
Tranche 4 [Member]
USD ($)
|
Jan. 31, 2010
2005 Performance Equity Plan [Member]
Tranche 5 [Member]
USD ($)
|
Jan. 31, 2011
2005 Performance Equity Plan [Member]
Tranche 6 [Member]
USD ($)
|
Jan. 31, 2012
2005 Performance Equity Plan [Member]
Tranche 7 [Member]
USD ($)
|
Apr. 22, 2010
2009 Performance Equity Plan [Member]
|
Sep. 30, 2012
Before Adjustment [Member]
|
Sep. 30, 2012
Before Adjustment [Member]
2005 Performance Equity Plan [Member]
|
Sep. 30, 2012
Before Adjustment [Member]
2009 Performance Equity Plan [Member]
|
Sep. 30, 2012
After Adjustment [Member]
|
Sep. 30, 2011
After Adjustment [Member]
|
Sep. 14, 2009
After Adjustment [Member]
|
Sep. 30, 2009
After Adjustment [Member]
2005 Performance Equity Plan [Member]
Tranche 1 [Member]
USD ($)
|
Sep. 14, 2009
After Adjustment [Member]
2005 Performance Equity Plan [Member]
Tranche 1 [Member]
USD ($)
|
Sep. 14, 2009
After Adjustment [Member]
Restricted Stock [Member]
|
Sep. 30, 2012
Minimum [Member]
Before Adjustment [Member]
|
Sep. 30, 2012
Minimum [Member]
After Adjustment [Member]
USD ($)
|
Sep. 30, 2012
Maximum [Member]
Before Adjustment [Member]
|
Sep. 30, 2012
Maximum [Member]
After Adjustment [Member]
USD ($)
|
|||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,500,000 | 1,500,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Number of options granted | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 120,000 | 0 | 0 | 974,000 | 20,000 | 381,000 | 10,000 | 125,000 | 120,000 | 365,000 | ||||||||||||||||||||||||||||||||||
Exercise price (USD) | $ 8.75 | [1] | $ 9.27 | $ 5.30 | [2] | $ 6.64 | $ 12.23 | $ 10.84 | $ 2.55 | $ 8.75 | $ 9.27 | $ 5.30 | $ 6.64 | $ 12.23 | $ 10.84 | $ 2.55 | $ 4.00 | $ 4.00 | $ 12.23 | ||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Date | Nov. 08, 2010 | Oct. 22, 2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award Award Expiration Period | 5 years | 5 years | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | 1 year | 1 year | 5 years | 5 years | |||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 259,500 | 480,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Share Based Compensation Arrangement By Share Based Payment Award Weighted Average Fair Value | $ 2.66 | $ 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 0 | 0 | 64,400 | 5,000 | 5,000 | 5,000 | 0 | 130,167 | 156,167 | 10,000 | 10,000 | 10,000 | 120,000 | 120,000 | 125,000 | 115,000 | 120,000 | 0 | 365,000 | 0 | 0 | 214,120 | 89,300 | ||||||||||||||||||||||||||||||||
Issuance of common stock upon exercise of share options (in shares) | 0 | 64,400 | 0 | 0 | 0 | (26,000) | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 90,400 | |||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Remaining Contractual Term | 3 years 25 days | 3 years 25 days | 2 years 10 months 28 days | ||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Intrinsic Value | $ 0 | $ 0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based compensation expense | 525,000 | 3,327,000 | 4,638,000 | 4,868,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Stock Options | 769,000 | 942,000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Service Share-based Compensation, Nonvested Awards, Total Compensation Cost Not yet Recognized, Period for Recognition | 3 months 4 days | 3 months 4 days | |||||||||||||||||||||||||||||||||||||||||||||||||||||
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BORROWINGS (Details Textual)
In Thousands, unless otherwise specified |
12 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
CNY
|
Sep. 30, 2011
CNY
|
Sep. 30, 2010
CNY
|
Sep. 30, 2012
USD ($)
|
Sep. 30, 2012
Beijing Origin Seed Limited [Member]
CNY
|
Sep. 30, 2012
Linze Origin Seed Limited [Member]
|
Sep. 30, 2011
Linze Origin Seed Limited [Member]
CNY
|
Sep. 30, 2012
Xinjiang Originbo Seed Company Limited [Member]
Maximum [Member]
|
Sep. 30, 2012
Xinjiang Originbo Seed Company Limited [Member]
Minimum [Member]
|
|
Short Term Debt Secured | 5,000 | 5,000 | 20,000 | ||||||
Short Term Debt Unsecured | 30,000 | ||||||||
Finite Lived Intangible Assets Collateral To Bank Loan | 2,546 | 453 | |||||||
Plant and Equipment Gross Collateral To Bank Loan | 35,570 | 6,882 | |||||||
Short Term Debt Instrument Annual Interest Rate | 6.888% | 6.56% | |||||||
Long Term Debt Instrument Annual Interest Rate | 7.216% | 7.315% | 7.04% | ||||||
Long-term Debt, Excluding Current Maturities | 35,000 | 0 | 5,520 | ||||||
Current portion of long-term borrowings (note 13) | 4,000 | 0 | 630 | ||||||
Interest Expense, Debt | 4,092 | 1,469 | 8,539 | ||||||
Debt, Weighted Average Interest Rate | 6.56% | 5.70% | 7.04% |
TREASURY STOCK (Details Textual) (CNY)
In Thousands, except Share data, unless otherwise specified |
12 Months Ended |
---|---|
Sep. 30, 2007
|
|
Stock Repurchased During Period, Shares (in shares) | 498,851 |
Stock Repurchased During Period, Value | 29,377 |
ACQUIRED INTANGIBLE ASSETS, NET (Details 1)
In Thousands, unless otherwise specified |
Sep. 30, 2012
USD ($)
|
Sep. 30, 2012
CNY
|
Sep. 30, 2011
CNY
|
---|---|---|---|
2013 | 4,619 | ||
2014 | 3,786 | ||
2015 | 3,108 | ||
2016 | 2,645 | ||
2017 | 1,616 | ||
Total | $ 5,097 | 32,318 | 33,094 |
LAND USE RIGHTS, NET (Details Textual)
In Thousands, unless otherwise specified |
12 Months Ended | 12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
CNY
|
Sep. 30, 2011
CNY
|
Sep. 30, 2010
CNY
|
Sep. 30, 2012
USD ($)
|
Sep. 30, 2012
Use Rights [Member]
CNY
|
Sep. 30, 2011
Use Rights [Member]
CNY
|
Sep. 30, 2010
Use Rights [Member]
CNY
|
Sep. 30, 2012
Asset Pledged As Collateral [Member]
CNY
|
Sep. 30, 2011
Asset Pledged As Collateral [Member]
CNY
|
|
Land use rights, net | 32,318 | 33,094 | $ 5,097 | 2,546 | 453 | ||||
Amortization of Intangible Assets | 5,846 | 8,870 | 9,692 | 892 | 502 | 489 |
INCOME TAXES
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
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Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Text Block] | 18. INCOME TAXES
Agritech and its subsidiary, State Harvest are incorporated in the British Virgin Islands and are subject to taxation under the laws of the British Virgin Islands. State Harvest’s subsidiary and State Harvest’s variable interest entity, Beijing Origin and its majority owned subsidiaries (together, the “PRC entities”) were incorporated in the PRC and governed by the PRC laws.
The applicable tax rate of the PRC Enterprise Income Tax (“EIT”) was changed from 33% to 25% on January 1, 2008, according to the Corporate Income Tax Law. The preferential tax rate previously enjoyed by the PRC entities is gradually transitioned to the new standard rate of 25% over a five-year transitional period. In addition, article 28 of the new tax law stated that the income tax rate of a “high technology” company (high-tech status) is to remain at 15%.
Preferential tax treatment of Beijing Origin as “high technology” company (High-tech Status) has been agreed with the relevant tax authorities. Beijing Origin is entitled to a preferential tax rate of 15% which is subject to annual review. As a result of these preferential tax treatments, the reduced tax rates applicable to Beijing Origin Seed Limited for 2010, 2011 and 2012 are 15%.
Had all the above tax holidays and concessions not been available, the tax charges would have been higher by RMB7,648, RMB5,226 and RMB2,012, and the basic net income (loss) per share would have been lower (higher) by RMB0.33, RMB(0.23) and RMB(0.16) for the years ended September 30, 2010, 2011 and 2012, respectively. The diluted net income (loss) per share for the years ended September 30, 2010, 2011 and 2012 would have been lower (higher) by RMB0.33, RMB(0.23) and RMB(0.16), respectively.
The Company’s liability for income taxes includes the liability for unrecognized tax benefits, interest and penalties which relate to tax years still subject to review by taxing authorities. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to the Company’s liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. Until September 30, 2012, the management considered that the Company had no uncertain tax positions affected its consolidated financial position and results of operations or cash flow other than for the contingent US tax liabilities mentioned under note 21. The Company will continue to evaluate for the uncertain position in future. The estimated interest costs have been provided in the Company’s financial statements up to the year ended September 30, 2012. The Company’s uncertain tax positions are related to tax years that remain subject to examination by the relevant tax authorities and the major one is the China tax authority. The open tax years for examinations in China are 5 years.
The provision for income taxes expenses consists of the following:
The principal components of the deferred income tax assets are as follows:
The Company did not have any significant temporary differences relating to deferred tax liabilities as of September 30, 2011 and 2012.
A significant portion of the deferred tax assets recognized relates to net operating loss and credit carry forwards. The Company operates through the PRC entities and the valuation allowance is considered on each individual basis.
The net operating loss attributable to those PRC entities can only be carried forward for a maximum period of five years. Tax losses of non-PRC entities can be carried forward indefinitely. The expiration period of unused tax losses is as follows:
Reconciliation between total income tax expenses and the amount computed by applying the statutory income tax rate to income before taxes is as follows:
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INCOME (LOSS) PER SHARE (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | The following table sets forth the computation of basic and diluted income (loss) per share for the years indicated:
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PLANT AND EQUIPMENT, NET (Tables)
|
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
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Property, Plant and Equipment [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Table Text Block] | Plant and equipment, net consist of the following:
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EQUITY INVESTMENTS (Details Textual) (CNY)
In Thousands, unless otherwise specified |
12 Months Ended | ||
---|---|---|---|
Sep. 30, 2012
|
Sep. 30, 2011
|
Sep. 30, 2010
|
|
Liyu [Member]
|
|||
Equity Method Investment, Ownership Percentage | 30.00% | ||
Equity Method Investment, Summarized Financial Information, Net Income (Loss) | 4,030 | 2,954 | 497 |
Proceeds from Equity Method Investment, Dividends or Distributions | 2,100 | 2,467 | 1,200 |
Jinong [Member]
|
|||
Equity Method Investment, Ownership Percentage | 17.94% | 23.00% | |
Equity Method Investment, Summarized Financial Information, Net Income (Loss) | 0 | (1,345) | 1,215 |
COMMITMENTS AND CONTINGENCIES (Details Textual)
In Thousands, unless otherwise specified |
12 Months Ended | |||||||
---|---|---|---|---|---|---|---|---|
Sep. 30, 2012
CNY
|
Sep. 30, 2011
CNY
|
Sep. 30, 2010
CNY
|
Sep. 30, 2012
USD ($)
|
Sep. 30, 2012
Maximum [Member]
CNY
|
Sep. 30, 2012
Minimum [Member]
CNY
|
Sep. 30, 2012
Contingent Tax Liabilities [Member]
CNY
|
Sep. 30, 2011
Contingent Tax Liabilities [Member]
CNY
|
|
Operating Leases, Rent Expense | 3,773 | 5,310 | 3,614 | |||||
Income tax payable (note 18; note 21) | 39,060 | 39,060 | 6,160 | 39,059 | 39,059 | |||
Contingent Tax Liabilities Range Of Tax Liabilities | 64,218 | 39,059 |
ACCOUNTS RECEIVABLE (Tables)
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12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
|
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Accounts Receivable [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | Allowance for doubtful account is as follows:
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CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Tables)
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Sep. 30, 2012
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Condensed Financial Information Of Parent Company Only Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Condensed Balance Sheet [Table Text Block] | CONDENSED BALANCE SHEET
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Schedule of Comprehensive Income (Loss) [Table Text Block] | CONDENSED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
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Schedule of Condensed Cash Flow Statement [Table Text Block] | CONDENSED STATEMENT OF CASH FLOWS
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INVENTORIES (Details Textual) (CNY)
In Thousands, unless otherwise specified |
Sep. 30, 2012
|
Sep. 30, 2011
|
---|---|---|
Finished goods | 43,459 | 34,961 |
Debtor [Member]
|
||
Finished goods | 10,959 | 10,200 |
RELATED PARTY BALANCES AND TRANSACTIONS (Details 2)
In Thousands, unless otherwise specified |
Sep. 30, 2012
USD ($)
|
Sep. 30, 2012
CNY
|
Sep. 30, 2011
CNY
|
Sep. 30, 2012
Non-Controlling Interests Of Denong [Member]
CNY
|
Sep. 30, 2011
Non-Controlling Interests Of Denong [Member]
CNY
|
Sep. 30, 2012
Xinjiang Jinbo Seed Limited [Member]
CNY
|
Sep. 30, 2011
Xinjiang Jinbo Seed Limited [Member]
CNY
|
Sep. 30, 2012
Directors Controlled Companies [Member]
CNY
|
Sep. 30, 2011
Directors Controlled Companies [Member]
CNY
|
Sep. 30, 2012
Ex-Shareholders Of State Harvest [Member]
CNY
|
Sep. 30, 2011
Ex-Shareholders Of State Harvest [Member]
CNY
|
Sep. 30, 2012
Liyu [Member]
CNY
|
Sep. 30, 2011
Liyu [Member]
CNY
|
---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Due to related parties (note 3) | $ 437 | 2,769 | 1,728 | 0 | 113 | 950 | 0 | 1,366 | 1,385 | 156 | 140 | 297 | 90 |
OTHER PAYABLES AND ACCRUED EXPENSES (Tables)
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Sep. 30, 2012
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Payables and Accruals [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accounts Payable and Accrued Liabilities [Table Text Block] | Other payables and accrued expenses consist of:
Note (i): Salaries and bonus payable increased in fiscal year 2012 due to our bonus payment timing change after our corporate-wide restructuring and the introduction of pay-for-performance contracts with employees.
Note (ii): RMB310 were borrowed from employees of Denong with interest free, unsecured and have no fixed repayment terms at the years ended September 30, 2011 and 2012, respectively.
Note (iii): RMB3,600 was borrowed from third party companies with interest free, unsecured and have no fixed repayment terms at the years ended September 30, 2011 and 2012, respectively. |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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Sep. 30, 2012
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Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Significant Accounting Policies [Text Block] |
Principles of consolidation
The consolidated financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”); include the assets, liabilities, revenues, expenses and cash flows of all subsidiaries and variable interest entities. Intercompany balances, transactions and cash flows are eliminated on consolidation.
Convenience translation into United States dollars
The consolidated financial statements are presented in Renminbi. The translation of Renminbi amounts into United States dollar amounts has been made for the convenience of the reader and has been made at the exchange rate quoted by the middle rate by the State Administration of Foreign Exchange in China on September 30, 2012 of RMB6.3410 to US$1.00. Such translation amounts should not be construed as representations that the Renminbi amounts could be readily converted into United States dollar amounts at that rate or any other rate.
Use of estimates
The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Estimates are adjusted to reflect actual experience when necessary. Significant accounting estimates reflected in the Company’s consolidated financial statements include inventory valuation, useful lives of plant and equipment and acquired intangible assets, the valuation allowance for deferred income tax assets and the valuation of embedded derivatives of the convertible notes. Actual results could differ from those estimates.
Cash and cash equivalents
Cash and cash equivalents consist of cash on hand, cash accounts, interest bearing savings accounts, time certificates of deposit and debt securities with a maturities of three months or less when purchased.
Inventories
Inventories are stated at the lower of cost, determined by weighted-average method, or market. Work-in-progress and finished goods inventories consist of raw materials, direct labor and overhead associated with the manufacturing process.
Land use rights, net
Land use rights are recorded at cost less accumulated amortization. Amortization is provided over the term of the land use right agreements on a straight-line basis for the beneficial period.
Plant and equipment, net
Plant and equipment are recorded at cost less accumulated depreciation and amortization. Maintenance and repairs are charged to expense as incurred. Depreciation is calculated on a straight-line basis over the following estimated useful lives:
The Company constructs certain of its facilities. In addition to costs under construction contracts, external costs directly related to the construction of such facilities, including duty and tariff, and equipment installation and shipping costs, are capitalized. Depreciation is recorded at the time assets are placed in service.
Leases
Leases are classified at the inception date as either a capital lease or an operating lease. For the lessee, a lease is a capital lease if any of the following conditions exist: a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property’s estimated remaining economic life or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. A capital lease is accounted for as if there was an acquisition of an asset and an incurrence of an obligation at the inception of the lease. All other leases are accounted for as operating leases. The Company has no capital leases for any of the periods presented.
Goodwill
Goodwill represents the excess of aggregate purchase price over the fair value of net assets acquired in a business combination. Goodwill is not amortized, but instead tested for impairment at least annually or more frequently if certain circumstances indicate a possible impairment may exist. The Company adopted FASB ASC 350-10 and performs its annual impairment review of goodwill on September 30 of each year. Management evaluates the recoverability of goodwill using a two-step impairment test approach at the reporting unit level, which is determined to be the enterprise level. In the first step, the fair value of the reporting unit is compared to its carrying value including goodwill. Second, if the carrying amount of the reporting unit exceeds its fair value, an impairment loss is recognized for any excess of the carrying amount of the goodwill over the implied fair value of the goodwill. The implied fair value of goodwill is determined by allocating the fair value of the reporting unit in a manner similar to a business combination.
The carrying amount of the goodwill at September 30, 2011 and 2012 represents the cost arising from the business combinations in previous years and no impairment on goodwill was recognized for any of the periods presented for the Company. The movement for goodwill is as follow:
Acquired intangible assets, net
Acquired intangible assets primarily consist of purchased technology rights and distribution network and are stated at cost less accumulated amortization. Amortization is calculated on a straight-line basis over the estimated useful lives of these assets and recorded in operating expenses. Amortization is calculated on a straight-line basis over the following estimated useful lives for the main acquired intangible assets:
Trademarks, which have indefinite live, are not amortized, but are reviewed for impairment at least annually, at year end date, or earlier upon the occurrence of certain triggering events.
Valuation of long-lived asset
The Company reviews the carrying value of long-lived assets to be held and used, including other intangible assets subject to amortization, when events and circumstances warrants such a review. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset and intangible assets. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets and intangible assets to be disposed are determined in a similar manner, except that fair market values are reduced for the cost to dispose.
Revenue recognition
The Company derives its revenues primarily from the sale of various branded conventional seeds and branded seeds with biotechnology traits.
Revenue is recognized when pervasive evidence of an arrangement exists, products have been delivered, the price is fixed or determinable, collectability is reasonably assured and the right of return has expired. The Company generally determines the final selling price after a period the goods are delivered to the customers. Accordingly, the Company defers revenues recognition until the selling price has been finalized with the customers.
The estimated amounts of revenues billed in excess of revenues recognized are recorded as deferred revenues.
Government subsidies
A government subsidy is not recognized until there is reasonable assurance that: (a) the enterprise will comply with the conditions attached to the grant; and (b) the grant will be received.
When the Company received the government subsidies but the conditions attached to the grants have not been fulfilled, such government subsidies are deferred and recorded under other payables and accrued expenses, and other long-term liability. The reclassification of short-term or long-term liabilities is depended on the management’s expectation of when the conditions attached to the grant can be fulfilled.
The Company received several financial supports from various levels of the government. In fiscal years 2011 and 2012, the Company received government subsidies of RMB nil and RMB14,000 respectively for plant and equipment projects; RMB nil and RMB10,900 respectively for land use right; and RMB nil and RMB3,640 for R&D and others. Government subsidies recognized as other income in the statement of income for the year ended September 30, 2010, 2011 and 2012, were RMB1,362, RMB nil and RMB3,846, respectively.
Cost of revenues
Cost of revenues consists of expenses directly related to sales, including the purchase prices and development costs for seeds and, during the fiscal years ended September 30, 2011 and 2012, agricultural chemical products, depreciation and amortization, impairment of inventory, shipping and handling costs, salary and compensation, supplies, license fees, and rent.
Research and development costs
Research and development costs relating to the development of new products and processes, including significant improvements and refinements to existing products, are expensed as incurred.
Advertising costs
Advertising costs are expensed when incurred and included in selling and marketing expenses. For the years ended September 30, 2010, 2011 and 2012, advertising costs were RMB1,560, RMB1,126 and RMB3,215, respectively.
Shipping and handling cost
The Company includes shipping and handling costs as either cost of goods sold or selling and administrative expenses depending on the nature of the expenses. Shipping and handling costs which relate to transportation of products to customers’ locations is charged to selling and marketing expenses and shipping and handling which relate to the transportation of goods to factories from suppliers and from one factory to another is charged to cost of revenues.
For the years ended September 30, 2010, 2011 and 2012, shipping and handling cost included in selling and marketing expenses were RMB12,164, RMB10,503, and RMB11,446 respectively.
Allowance for doubtful account
The Company regularly monitors and assesses the risk of not collecting amounts owed to the Company by customers. This evaluation is based upon a variety of factors including: an analysis of amounts current and past due along with relevant history and facts particular to the customer. Based upon the results of this analysis, the Company records an allowance for uncollectible accounts for this risk.
Income taxes
Deferred income taxes are recognized for the future tax consequences of temporary differences between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements, net of operating loss carry forwards and credits. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant tax authorities.
The Company adopted FASB ASC 740-10. The Company’s policy on classification of all interest and penalties related to unrecognized tax benefits, if any, as a component of income tax provisions.
Foreign currency translation
The functional currency of the Company excluding Agritech and State Harvest is Renminbi. Monetary assets and liabilities denominated in currencies other than Renminbi are translated into Renminbi at the rates of exchange ruling at the balance sheet date. Transactions in currencies other than Renminbi are converted into Renminbi at the applicable rates of exchange prevailing the transactions occurred. Transaction gains and losses are recognized in the consolidated statements of income and comprehensive income.
The functional currency of Agritech and State Harvest are maintained in United State dollars. Assets and liabilities are translated at the exchange rates at the balance sheet date, equity accounts are translated at historical exchange rates and revenues, expenses, gains and losses are translated using the average rate for the period. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of other comprehensive (loss)/income. The Company has chosen Renminbi as its reporting currency.
Comprehensive income
Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Comprehensive income for the years has been disclosed within the consolidated statements of income and comprehensive income for presentational purpose of the disclosure of comprehensive income attributable to Agritech and the non-controlling interests respectively.
Income per share
Basic income per share is computed by dividing net income by the weighted average number of common shares outstanding during the years. Diluted income per share gives effect to all dilutive potential common shares outstanding during the years. The weighted average number of common shares outstanding is adjusted to include the number of additional common shares that would have been outstanding if the dilutive potential common shares had been issued. In computing the dilutive effect of potential common shares, the average stock price for the period is used in determining the number of treasury shares assumed to be purchased with the proceeds from the exercise of options.
Share-based compensation
The Company adopts FASB ASC 718-10. ASC 718-10 requires that share-based payment transactions with employees, such as share options, be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period, with a corresponding addition to equity. Under this method, compensation cost related to employee share options or similar equity instruments is measured at the grant date based on the fair value of the award and is recognized over the period during which an employee is required to provide service in exchange for the award, which generally is the vesting period.
Fair value measurement
The Company adopted FASB ASC 820-10, and which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. ASC 820-10 does not require any new fair value measurements, but provides guidance on how to measure fair value by providing a fair value hierarchy used to classify the source of the information.
ASC 820-10 establishes a three-level valuation hierarchy of valuation techniques based on observable and unobservable inputs, which may be used to measure fair value and include the following:
Level 1 - Quoted prices in active markets for identical assets or liabilities.
Level 2 - Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
Classification within the hierarchy is determined based on the lowest level of input that is significant to the fair value measurement.
Recently issued accounting pronouncements
In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. This pronouncement is an authoritative guidance to amend certain measurement and disclosure requirements related to fair value measurements to improve consistency with international reporting standards. This guidance is effective prospectively for public entities for interim and annual reporting periods beginning after December 15, 2011, with early adoption prohibited. The Company is currently evaluating the effect of ASU No. 2011-04, but does not expect its adoption will have a material effect on its consolidated financial statements.
In June 2011, the FASB issued ASU 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, which is a new guidance on the presentation of comprehensive income that will require a company to present components of net income and other comprehensive income in one continuous statement or in two separate, but consecutive statements. There are no changes to the components that are recognized in net income or other comprehensive income under current GAAP. This guidance is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2011, with early adoption permitted. It is applicable to the Company’s fiscal year beginning January 1, 2012. Currently, the Company evaluated the effect of ASU 2011-05 on its financial statements and does not expect its adoption will have a material effect on its consolidated financial statements.
In September 2011, the FASB issued ASU No. 2011-08, Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment, which specifies that an entity has the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, an entity determines it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. However, if an entity concludes otherwise, then it is required to perform the first step of the two-step impairment test by calculating the fair value of the reporting unit and comparing the fair value with the carrying amount of the reporting unit, as described in FASB ASC 350-20-35-4. If the carrying amount of a reporting unit exceeds its fair value, then the entity is required to perform the second step of the goodwill impairment test to measure the amount of the impairment loss, if any, as described in FASB ASC 350-20-35-9. Under the amendments in ASU No. 2011-08, an entity has the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the first step of the two-step goodwill impairment test. An entity may resume performing the qualitative assessment in any subsequent period. ASU No. 2011-08 is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted. The adoption of ASU No. 2010-28 is not expected to have any impact on the Company’s financial position, results of operations and cash flows.
In December 2011, the FASB issued ASU 2011-11, Balance Sheet (Topic 210): disclosures about Offsetting Assets and Liabilities, which requires entities to disclose both gross and net information about both instruments and transactions eligible for offset in the statement of financial position and instruments and transactions subject to an agreement similar to a master netting agreement. The objective of the disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of International Financial Reporting Standards (“IFRS”). This ASU is effective for fiscal years, and interim periods within those years, beginning on or after January 1, 2013. Retrospective presentation for all comparative periods presented is required. Its adoption of ASU 2011-11 is not expected to have material impact on its consolidated financial statements.
ASU 2011-05 was modified by the issuance of ASU 2011-12, Comprehensive Income (Topic 220): Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 in December 2011, which indefinitely deferred certain provisions of ASU 2011-05, including the requirement to present reclassification adjustments out of accumulated other comprehensive income by component in both the statement in which net income is presented and the statement in which other comprehensive income is presented. This amendment is effective for both annual and interim financial statements beginning after December 15, 2011. The Company believes that its adoption of ASU 2011-12 will not have any material impact on its consolidated financial statements.
In July 2012, the FASB issued ASU 2012-02, Testing Indefinite-Lived Intangible Assets for Impairment, which allows companies to perform a qualitative assessment to determine whether further impairment testing of indefinite-lived intangible assets is necessary, similar in approach to the goodwill impairment test. The new guidance allows an entity the option to first assess qualitatively whether it is more likely than not (that is, a likelihood of more than 50 percent) that an indefinite-lived intangible asset is impaired, thus necessitating that it perform the quantitative impairment test. An entity is not required to calculate the fair value of an indefinite-lived intangible asset and perform the quantitative impairment test unless the entity determines that it is more likely than not that the asset is impaired. The new guidance is effective for annual and interim impairment tests performed for fiscal years beginning after September 15, 2012. Early adoption is permitted for annual and interim impairment tests performed as of a date before July 27, 2012, if the financial statements for the most recent annual or interim period have not yet been issued. The Company will adopt the provisions of this new guidance on October 1, 2012. The Company believes that its adoption of ASU 2012-02 will not have any material impact on its consolidated financial statements.
In October 2012, the FASB issued ASU 2012-04, Technical Corrections and Improvements, which makes certain technical corrections and “conforming fair value amendments” to the FASB Accounting Standards Codification. The amendments affect various codification topics and apply to all reporting entities within the scope of those topics. These provisions of the amendment are effective upon issuance, except for amendments that are subject to transition guidance, which will be effective for fiscal periods beginning after December 15, 2012. The Company believes that its adoption of ASU 2012-04 will not have any material impact on its consolidated financial statements. |
RELATED PARTY BALANCES AND TRANSACTIONS (Details 3)
In Thousands, unless otherwise specified |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2012
Purchases [Member]
CNY
|
Sep. 30, 2011
Purchases [Member]
CNY
|
Sep. 30, 2010
Purchases [Member]
CNY
|
Sep. 30, 2012
Technology Usage Fees [Member]
CNY
|
Sep. 30, 2011
Technology Usage Fees [Member]
CNY
|
Sep. 30, 2010
Technology Usage Fees [Member]
CNY
|
Sep. 30, 2012
Sale Of Plant and Equipment [Member]
CNY
|
Sep. 30, 2011
Sale Of Plant and Equipment [Member]
CNY
|
Sep. 30, 2012
Jinong [Member]
Dividend Paid [Member]
CNY
|
Sep. 30, 2011
Jinong [Member]
Dividend Paid [Member]
CNY
|
Sep. 30, 2010
Jinong [Member]
Dividend Paid [Member]
CNY
|
Sep. 30, 2012
Jinong [Member]
Rental Expense Paid For Plant and Equipment [Member]
CNY
|
Sep. 30, 2011
Jinong [Member]
Rental Expense Paid For Plant and Equipment [Member]
CNY
|
Sep. 30, 2010
Jinong [Member]
Rental Expense Paid For Plant and Equipment [Member]
CNY
|
Sep. 30, 2012
Jinong [Member]
Sales [Member]
CNY
|
Sep. 30, 2011
Jinong [Member]
Sales [Member]
CNY
|
Sep. 30, 2010
Jinong [Member]
Sales [Member]
CNY
|
Sep. 30, 2012
Jinong [Member]
Purchases [Member]
CNY
|
Sep. 30, 2011
Jinong [Member]
Purchases [Member]
CNY
|
Sep. 30, 2010
Jinong [Member]
Purchases [Member]
CNY
|
Sep. 30, 2012
Jinong [Member]
Purchase Of Plant and Equipment [Member]
USD ($)
|
Sep. 30, 2011
Jinong [Member]
Purchase Of Plant and Equipment [Member]
CNY
|
Sep. 30, 2010
Jinong [Member]
Purchase Of Plant and Equipment [Member]
CNY
|
Sep. 30, 2012
Biocentury [Member]
Purchases [Member]
CNY
|
Sep. 30, 2011
Biocentury [Member]
Purchases [Member]
CNY
|
Sep. 30, 2010
Biocentury [Member]
Purchases [Member]
CNY
|
Sep. 30, 2012
Biocentury [Member]
Technology Usage Fees [Member]
CNY
|
Sep. 30, 2011
Biocentury [Member]
Technology Usage Fees [Member]
CNY
|
Sep. 30, 2010
Biocentury [Member]
Technology Usage Fees [Member]
CNY
|
Sep. 30, 2012
Liyu [Member]
Dividend Income [Member]
CNY
|
Sep. 30, 2011
Liyu [Member]
Dividend Income [Member]
CNY
|
Sep. 30, 2010
Liyu [Member]
Dividend Income [Member]
CNY
|
Sep. 30, 2012
Liyu [Member]
Purchases [Member]
CNY
|
Sep. 30, 2011
Liyu [Member]
Purchases [Member]
CNY
|
Sep. 30, 2010
Liyu [Member]
Purchases [Member]
CNY
|
Sep. 30, 2012
Liyu [Member]
Technology Usage Fees [Member]
CNY
|
Sep. 30, 2011
Liyu [Member]
Technology Usage Fees [Member]
CNY
|
Sep. 30, 2010
Liyu [Member]
Technology Usage Fees [Member]
CNY
|
Sep. 30, 2012
Xinjiang Jinbo Seed Limited [Member]
Purchases [Member]
CNY
|
Sep. 30, 2011
Xinjiang Jinbo Seed Limited [Member]
Purchases [Member]
CNY
|
Sep. 30, 2010
Xinjiang Jinbo Seed Limited [Member]
Purchases [Member]
CNY
|
Sep. 30, 2012
Henan Agriculture University [Member]
Technology Usage Fees [Member]
CNY
|
Sep. 30, 2011
Henan Agriculture University [Member]
Technology Usage Fees [Member]
CNY
|
Sep. 30, 2010
Henan Agriculture University [Member]
Technology Usage Fees [Member]
CNY
|
Sep. 30, 2012
Non-Controlling Interests Of Denong [Member]
Technology Usage Fees [Member]
CNY
|
Sep. 30, 2011
Non-Controlling Interests Of Denong [Member]
Technology Usage Fees [Member]
CNY
|
Sep. 30, 2010
Non-Controlling Interests Of Denong [Member]
Technology Usage Fees [Member]
CNY
|
Sep. 30, 2012
Holding Company Of Jinong [Member]
Research and Development Expense [Member]
CNY
|
Sep. 30, 2011
Holding Company Of Jinong [Member]
Research and Development Expense [Member]
CNY
|
Sep. 30, 2010
Holding Company Of Jinong [Member]
Research and Development Expense [Member]
CNY
|
|
Related Party Transaction, Amounts of Transaction | 28,772 | 90 | 362 | 9,541 | 6,555 | 6,444 | 0 | 0 | 0 | 10,050 | 5,025 | 0 | 468 | 935 | 8,319 | 2,000 | 0 | 25,984 | 0 | 6 | $ 0 | 0 | 150 | 0 | 0 | 116 | 0 | 0 | 306 | 2,100 | 2,467 | 1,200 | 0 | 90 | 240 | 9,541 | 5,953 | 5,471 | 2,788 | 0 | 0 | 0 | 0 | 68 | 0 | 602 | 599 | 0 | 5,000 | 5,000 |