Section I Important Notice, Contents and DefinitionsThe Board of Directors and the Board of Supervisors of the Company and its directors,supervisors and senior management warrant that the information contained in this semi-annualreport is true, accurate and complete without any false and misleading statements or materialomissions, and severally and jointly accept legal liability thereof.Liu Peng, the person in charge of the Company, Dong Ye, the person in charge of accounting ofthe Company, and Xu Xianjing, the person in charge of the accounting department of theCompany, have declared that they warrant the truthfulness, accuracy and completeness of thefinancial statements set out in this semi-annual report.All directors of the Company attended the Board meeting on which this report was reviewed.Discrepancies in the sum of decimals in this report are caused by rounding.The forward-looking statements in this report, including future plans and developmentstrategies, do not constitute substantive commitments of the Company to investors. Investorsshould be aware of the investment risks.The Company has described potential risk factors and countermeasures that may exist in itsoperations in detail in Section III Discussion and Analysis of the Management and Section XRisks Faced by the Company and Countermeasures. Investors are advised to pay attention tothe relevant contents.The Company plans not to distribute cash dividend, issue bonus share, or transfer capitalreserve into share capital.
Contents
Section I Important Notice, Contents and Definitions ...... 2
Section II Company Profile and Key Financial Indicators ...... 6
Section III Discussion and Analysis of the Management ...... 9
Section IV Corporate Governance ...... 27
Section V Environmental and Social Responsibilities ...... 30
Section VI Significant Events ...... 36
Section VII Changes in Shareholding and Information of Shareholders ...... 46
Section VIII Particulars of Preference Shares ...... 55
Section IX Corporate Bonds ...... 56
Section X Financial Report ...... 57
Documents Available for Inspection
1. The Semi-annual Report 2023 affixed with the signature of the Company’s legal representative.
2. Financial statements affixed with the signatures and stamps of the legal representative of theCompany, person in charge of accounting, and person in charge of accounting department of theCompany.
3. All original copies of the Company’s documents and the original drafts of the Company’sannouncements as disclosed during the reporting period.
4. Place for document inspection: Office of the Board of Directors.
Terms and Definitions
| Term | Definition | |
| The Company, Company, C&S | C&S Paper Co., Ltd. | |
| Zhongshun Group | Guangdong Zhongshun Paper Group Co., Ltd. | |
| Chung Shun Co. | Chung Shun Co., a Hong Kong-based company | |
| Zhongshan Trading | Zhongshan Zhongshun Trading Co., Ltd. | |
| Zhong Shun International | Zhong Shun International Co., Ltd., a Hong Kong-based company | |
| C&S Hong Kong | C&S Hong Kong Co., Ltd., a Hong Kong-based company | |
| Macao C&S | C&S (Macao) Co., Ltd. | |
| Beijing Trading | Beijing C&S Paper Co., Ltd. | |
| Xiaogan Trading | Xiaogan C&S Trading Co., Ltd. | |
| Chengdu Trading | Chengdu Zhongshun Paper Co., Ltd. | |
| Hangzhou Trading | Hangzhou Jie Rou Trading Co., Ltd. | |
| Shanghai Trading | Shanghai Huicong Paper Co., Ltd. | |
| Yunfu Trading | Yunfu Hengtai Trading Co., Ltd., formerly known as C&S (Yunfu) Trading Co., Ltd. | |
| Sichuan C&S | C&S (Sichuan) Paper Co., Ltd., formerly known as Chengdu Tiantian Paper Co., Ltd. | |
| Jiangmen C&S | Jiangmen Zhongshun Paper Co., Ltd. | |
| Zhejiang C&S | Zhejiang Zhongshun Paper Co., Ltd. | |
| Hubei C&S | C&S (Hubei) Paper Co., Ltd., formerly known as Hubei Zhongshun Hongchang Paper Co., Ltd. | |
| Yunfu C&S | C&S (Yunfu) Paper Co., Ltd. | |
| Tangshan C&S, Tangshan subsidiary | C&S Paper Co., Ltd. Tangshan Branch | |
| Dazhou C&S | C&S (Dazhou) Paper Co., Ltd. | |
| Jiangsu C&S | C&S (Jiangsu) Paper Co., Ltd. | |
| Zhongshan Paper | C&S (Zhongshan) Paper Co., Ltd., formerly known as Zhongshan Tongfu Trade Co., Ltd. | |
| Sun C&S | Sun Daily Necessities Co., Ltd. | |
| Dolemi | Dolemi Sanitary Products Co., Ltd. | |
| Zhengzhou Dolemi | Zhengzhou Dolemi Sanitary Products Co., Ltd. | |
| Xi’an Dolemi | Xi’an Dolemi Sanitary Products Co., Ltd. | |
| Bloomage Jierou | Beijing Bloomage Jierou Biotechnology Co., Ltd. | |
| Zhongshun Health | Zhongshun Health Life Technology (Shenzhen)Co.,Ltd. | |
| Huashun Technology | Guangdong Huashun Material Technology Co., Ltd | |
| Quxian Jiezhu | Quxian Jiezhu Construction and Development Co., Ltd | |
| Laotongxue | Guangdong Laotongxue Information Technology Co., Ltd | |
| Mazars | Mazars Certified Public Accountants (LLP) |
Section II Company Profile and Key Financial IndicatorsI. Company Profile
| Stock name | C&S | Stock code | 002511 |
| Stock exchange on which the shares are listed | Shenzhen Stock Exchange | ||
| Chinese name of the Company | 中顺洁柔纸业股份有限公司 | ||
| Abbreviation of Chinese name of the Company (if any) | 中顺洁柔 | ||
| English name of the Company (if any) | C&S Paper Co., Ltd. | ||
| Abbreviation of English name of the company (if any) | C&S | ||
| Legal representative of the Company | Liu Peng | ||
II. Contact Persons and Contact Methods
| Sectary to the Board | Representative of securities affairs | |
| Name | Zhang Haijun | Zhang Xia |
| Address | No. 136 Caihong Avenue, West District, Zhongshan City | No. 136 Caihong Avenue, West District, Zhongshan City |
| Tel | 0760-87885678 | 0760-87885678 |
| Fax | 0760-87885669 | 0760-87885669 |
| dsh@zsjr.com | dsh@zsjr.com |
III. Other Information
1. Contact information of the Company
Whether there are changes in the Company’s registered address, office address and postal code, website, and emailaddress during the reporting period
□ Applicable √ Not applicable
The registered and office addresses and their post codes, official website, and email of the Company were notchanged during the reporting period. See the Annual Report 2022 for details.
2. Information disclosure and location for inspection of documents
Where there are changes in information disclosure and location for inspection of documents during the reportingperiod
□ Applicable √ Not applicable
There are no changes in the name of the newspaper selected by the Company for information disclosure, websitedesignated by CSRC for publicizing the semi-annual report, and the location for inspection of the semi-annual reportduring the reporting period. Please refer to the Annual Report 2022 for details.
3. Other Relevant Information
Where there are changes in other relevant information
□ Applicable √ Not applicable
IV. Main Accounting Data and Financial Indicators
Whether the Company needs to perform retrospective adjustment or restatement of accounting data for previousyears
□ Yes √ No
| Current period | Same period of previous year | Changes over same period of previous year | |
| Operating income (RMB) | 4,685,080,565.59 | 4,367,618,113.61 | 7.27% |
| Net profit attributable to shareholders of the listed company (RMB) | 84,490,174.46 | 227,639,705.35 | -62.88% |
| Net profit attributable to shareholders of the listed company after deducting non-recurring profit and loss (RMB) | 73,693,887.58 | 220,565,031.66 | -66.59% |
| Net cash flow from operating activities (RMB) | 773,446,258.06 | 699,549,725.75 | 10.56% |
| Basic earnings per share (RMB/share) | 0.06 | 0.17 | -64.71% |
| Diluted earnings per share (RMB/share) | 0.06 | 0.17 | -64.71% |
| Weighted average return on net assets | 1.61% | 4.53% | -2.92% |
| End of current period | End of previous year | Changes over end of previous year | |
| Total assets (RMB) | 8,914,091,494.79 | 8,335,107,691.71 | 6.95% |
| Net assets attributable to shareholders of the listed company (RMB) | 5,217,274,700.43 | 5,178,060,378.48 | 0.76% |
V. Difference in Accounting Data under Domestic and International Accounting Standards
1. Net profit and net asset differences under International Financial Reporting Standards (IFRS) and ChineseAccounting Standards (CAS)
□ Applicable √ Not applicable
No such differences for the reporting period
2. Net profit and net asset differences under foreign accounting standards and Chinese Accounting Standards(CAS)
□ Applicable √ Not applicable
No such differences for the reporting period
VI. Non-recurring Items and Amounts
√ Applicable □ Not applicable
Unit: RMB
| Item | Amount | Description |
| Profits/losses from the disposal of non-current asset (including the write-off that accrued for impairment of assets) | -2,960,777.02 |
Governmental grants reckoned into current profits/losses (not including grantsenjoyed in quota or ration according to national standards, which are closely relevantto the company’s normal business)
| 11,874,320.21 | ||
| Profits/losses from assets entrusted to others for investment or management | 990,155.36 | |
| Except for effective hedging business related to the normal operation of the company, fair value gains and losses from holding trading financial assets and trading financial liabilities, as well as investment income from disposing of trading financial assets, trading financial liabilities, and available for sale financial assets | 968,000.00 | |
| Other non-operating income and expenses except for the aforementioned items | 2,680,646.89 | |
| Less: Influence of income tax | 2,756,058.56 | |
| Total | 10,796,286.88 |
Details of other profit and loss items that meet the definition of non-recurring profit and loss:
□ Applicable √ Not applicable
The Company has no other profit and loss items that meet the definition of non-recurring profit and loss.Descriptions where the Company defines any non-recurring profit and loss items listed in the No. 1 ExplanatoryAnnouncement on Information Disclosure of Companies Offering Securities to the Public—Non-recurring Profitand Loss as recurring profit and loss items during the reporting period
□ Applicable √ Not applicable
The Company did not define any non-recurring profit and loss items listed in the No. 1 ExplanatoryAnnouncement on Information Disclosure of Companies Offering Securities to the Public—Non-recurring Profitand Loss as recurring profit and loss items during the reporting period.
Section III Discussion and Analysis of the Management
I. Principal Businesses of the Company during the Reporting PeriodMain ProductsMr. Deng Yingzhong, founder of the Company, initiated his entrepreneurial process in 1979. Starting from intensivepaper processing, the Company has developed into a diversified group company integrating R&D, production andsales after forty plus years of striving. It is among the first batch of household paper companies listed on China A-shares. The Company, with an adherence to the business philosophy of “building product, enterprise andprofessional brands”, practices the “All We Care Is You” value proposition and continues to provide consumers withhealthy, safe, environmental-friendly, comfortable and convenient products and services.Currently the Company features three major brands, namely C&S, Sun and Dolemi. Main products include toiletpaper, facial tissues, paper handkerchiefs, napkins, wet wipes, kitchen tissues, personal care products (sanitary pads),facial towels, etc. Specifics are given in the following:
(I) Household paperLotion series: Specially developed for female and infant consumers, the products contain moisturizing cream. Withselected high-quality 100% virgin wood pulp and quality moisturizing cream, the paper is soft, delicate and smooth.It is the professional moisturizing facial tissue brand trusted by consumers.Face series: Face series are soft, delicate and pliable. Being wettable, the products can be used as face towels.Among them, the oil painting series combine quality and artistry and are therefore praised as “artwork of papertissues”.Cotton Series: Soft like cloud, the series adopt new air cushion technologies. After multiple times of independentembossing, there form countless light and small air cushions inside, making the tissue thicker, softer and more skin-friendly. Using pure physical compound techniques, the products feature beautiful embossing while giving a soft,cotton-like touch.Gilt Series: As a high-end tissue line, the series were launched in 2023, with both exquisite interior and exterior.The appearance is the work of a well-known design master. The black and gilt colors have a luxurious texture,giving a high-quality feeling and appealing to the eyes of consumers.Sun series: Preferred raw material. Targeting at the youth market, the brand serves as a powerful supplement to theCompany’s primary brand “C&S”.
Kitchen towel series: Using 100% virgin wood pulp, the kitchen paper towels boast stronger oil-absorption andwater-absorption power and are up to the EU and U.S. Requirements for food contact material testing, thereby bettersatisfying the multi-functional wiping needs of households. Meanwhile, the kitchen wet wipes boast expeditedecontamination power without hurting hands. Cloth is super absorbent without leaving marks, strong oil removalwithout locking oil.Quick Dissolving and Easy to Pull Toilet Paper Series: As toilet paper in tissue boxes, the series are designed forpeople who pursue a quality life. Consumers can pull out the paper easily with one hand. In addition, the products,selecting 100% virgin wood pulp, dissolve easily and hence do not block the toilet. Being hygienic, clean and noteasy to be affected by moisture, the series can address the needs of delicate people in the toilet scenario.(II) Personal care productsThe Company launched the new VI series for Dolemi pads in 2022, which includes two product series of TrueSuction and Zero Feeling. The products are available through all channels to achieve omni retail. In addition, theCompany upgraded the Fantasy Maiden series to enhance the Dolemi brand.(III) Quality health productsClean and Soft Cleansing Towel Series: Dedicated to skin care, the products select quality plant fibers withupgraded processes. They feature double-sided texture design, with one side for cleaning and one side for skin care,thereby giving the skin a new and comfortable cleansing experience.Ultra Soft Face Towel Series: Teaming up with world-renowned quality fiber manufacturers, the seriescarefully select quality plant fibers imported from Brazil and Indonesia. Targeting Gen Z female users for theremoval of makeups, the silk-like face towels are soft, thick, instant absorbent, resilient and washable. Theproducts have passed third-party skin irritation tests with supreme care for the skin. Co-branded with cutting-edge artistic IPs, the series feature appealing pop art packaging, which could help increase the awareness andexposure of the brands and products.Business travel series: With the change of lifestyle, the Company understands that people are increasinglyconcerned about the hygiene problem during business travels. In view of this, it has developed the business travelseries such as disposable compressed towels, rinse-free antibacterial hand sanitizers, alcohol sanitary pads, etc.These products are easy to carry, clean and hygienic and can guard the health of consumers anytime, anywhere.Among them, disposable compressed towels, disposable bath towels, etc. are made of plant fibers that are natural,environmental friendly and degradable. They really make travel easy.Basic Wet Wipe Series: The products can address the pain points of different groups of people and differentpurposes and can be used in various scenarios such as before or after meal, during trips, after exercise, outdoor, etc.
The plasma pure water is filtered by 8 processes, so it is skin-friendly and non-irritating. The products can removethe sickness feeling of the skin and keep the skin clean and healthy.Disinfection Wet Wipe Series: With 99.9% sterilization rate with physical sterilization, the products are skin-friendly so that consumers can enjoy a healthy life. By adopting face-care grade fabric, the products can create asafe and comfortable environment for the skin.Maternal and Infant Wet Wipe Series: Along with the change of seasons, the Company finds that mothers becomemore and more concerned about the hygiene problem of infants and children when going out. As a result, theCompany developed the hand and mouth cleansing wipes for babies. With the non-toxic and non-irritating formula,moms can feel assured about the safety of their children.Wet Toilet Paper Series: To address the pain points of users for the pursuit of comfort when going to the toilet,the Company launched the series to solve the issue from multiple dimensions on the basis of ensuringcleanliness. Products include wet toilet paper that has a sterilization rate of 99.9%, wet toilet paper speciallydesigned for female, wet toilet paper cross-branded with MAYINGLONG PHARM for special care in the toiletscenario, etc. The series allow consumers to have a refreshing and comfortable feeling while going to the toilet.(IV) Commercial channel productsCommercial channel products are also constantly upgraded and enriched along with market changes. Inaddition to paper towels, small plate paper and napkins for traditional scenarios such as property cleaning,restaurants and hotels, and high-traffic places, the Company also added series of products and supportingperipherals such as toilet fragrances, hand sanitizers, disposable towels and bath towels and compressed towels.Moreover, the Company is developing multi-functional paper towels. By focusing on optimizing customerexperience and meeting customer demands, the Company will continue to introduce cleaning and sanitationproducts with higher quality. Considering the increasing needs of government departments, pubic institutionsand enterprises for daily necessities as welfare to employees, the Company also launched differentiated group-buying products through online and offline channels, to meet market demands in an all-round manner.Development Trends of the IndustryThe household paper industry to which the Company belongs has maintained an upward trend in recent years,with room for continued growth in the long run. The wood pulp, which is the main raw material of theCompany’s products, relies highly on import. Affected by various factors, the price of imported pulp hit a newhigh in 2022. Coupled with rising energy prices, the production costs of household paper companies rosesignificantly. Therefore, the Company faced enormous operating pressure. As the pulp price has beendemonstrating a downward trend in the first half of 2023, the pressure of production costs will gradually ease.
The competition in China’s household paper industry is still fierce and industry concentration will be furtherstrengthened. With enhanced awareness on the concept of healthy living, consumers pay increasing attention tobrands. Product quality is still a prominent concern in the industry.Market PositionThe Company has become one of the representative brands of high-end household paper in the market throughcontinuous brand building and quality assurance as well as robust production capacity layout and channel expansion.It is ranked among the first echelon in the household paper industry and is well recognized by consumers and themarket. In addition, with an adherence to the value concept of “All We Care Is You”, the Company continues to tapconsumer needs and constantly upgrades and optimizes products with leverage on its strong R&D and innovationcapabilities. The Company is committed to providing consumers with products of better quality, more comfort, andmore tailored to their individual needs. The Company aims to achieve national product coverage which isunderpinned by continuously improving product reputation among consumes and consolidating brand awareness.Key Performance DriversThe Company always adheres to its core strategies and business objectives, and strives to promote the growth ofrevenue and the sales of high-end, high-margin products by continuously optimizing product categories, adjustingand refining channels, and stepping up efforts for key products. During the reporting period, the Company recordedtotal revenue of RMB 4,685,080,565.59, up by 7.27%. Under the influence of high-priced pulp inventory and risingenergy prices, production costs of the Company rose sharply compared to the same period of the previous year.Coupled with factors such as fierce market competition, the gross profit margin also declined year-on-year.Moreover, the implementation of the 2022 Stock Option and Restricted Stock Incentive Plan increased theamortization of incentive costs, while the Company also increased R&D investments. During the reporting period,the Company posted a net profit attributable to shareholders of the listed company of RMB 84,490,174.46, a YoYdecrease of 62.88%.The price of imported pulp hit a record high again in 2022. As the pulp price has been demonstrating a downwardtrend in the first half of 2023, the pressure of production costs has been gradually eased. In the future, the Companywill continue to adhere to its development strategies and business plans, i.e. driving the continuous growth of high-end, high-margin products, improving IT and digital construction, refining management, increasing revenue andreducing expenditure, and reducing costs and increasing efficiency. All these will help lay the foundation for theCompany’s long-term healthy development.
II. Analysis of Core Competitiveness
1. Belonging to the first echelon of the domestic household paper industry
The Company is a top-performing enterprise in the first echelon of the domestic household paper industry withproducts available at all channels and both at home and abroad. In addition, it actively taps overseas marketsincluding Southeast Asia, Northeast Asia, Oceania and North America. According to the 2022 China ConsumerSatisfaction Index for Household Paper prepared by the third-party agency CHNBRAND, C&S has ranked the firstfor three consecutive years.
2. Constantly optimized product structure and continuously improved product competitivenessAs consumers pay more attention to own health protection, the demand for household paper takes on a differentiatedand high-end trend. The Company quickly grasped the market changes and introduced the antibacterial series ofnon-traditional dry towel products such as wet wipes, wet toilet paper, and portable products for business and travelin various usage scenarios.The Company continued to optimize product structure and has positioned high-end, high-margin non-traditional drywipes as a strategic category that will be prioritized in the future. Efforts have been stepped up for the terminal salesof the Oil Painting, Koi Fish, Face, Lotion and other high-end, high-margin series. Precise brand marketing strategycombined with multi-channel sales layout will help improve the distribution and penetration of high-end, high-margin products, drive the growth of their shares, and hence steadily improve the profit margin and profitability ofthe company.
3. Professional and effective management team
The R&D, production, procurement, quality control, marketing and sales teams have successively introducedexcellent professionals since 2014. At present, the Company boasts the most outstanding R&D, production,branding and marketing teams in the industry. As such, its new product R&D, product quality, branding, sales andmarketing have been effectively solidified. Most of the mid-level and high-level managers of the marketing teamare core, backbone employees who have served in the Company for more than five years, with high sense of loyaltyand strong professional competence. They can lead sales teams to work hard according to the strategic goals of theCompany and promote the healthy and stable development of various business indicators. The management teamof the Company has formulated long-term and strategic plans in line with actual situation of the Company, industrydevelopment level, and market demands. Moreover, the management team is capable of making reasonabledecisions on operation management issues with relation to R&D, production, marketing, investment and financing,and effectively implementing such decisions. The excellent management team fundamentally guarantees theCompany’s competitiveness and sustainable development in the future.
4. Nationwide marketing network
The Company has been building and improving its marketing networks with reasonable layout based on its keen
and strategic insights. It has guaranteed its profitability by expanding its channels from a single dealer channel in2015 to five channels at present, i.e. GT (General Trade), KA (Key Account), AFH (Away From Home), EC (E-Commerce), and RC (Retail Consumer). Its current marketing network covers most of the prefecture-level (andcounty-level) cities. Products are directly sold to counties and then distributed to towns. This helps achievesegmented and flat market operation and expand the dealer network.Additionally, while ensuring the smooth operation of other channels, the Company has established a professional e-commerce operation team, devoted more resources to e-commerce platforms, built and strengthened thecorresponding supply chain system, and intensified its routine operation management. At present, it has cementedlong-term strategic cooperation with mainstream well-known platforms. The Company has strengthened the layoutof emerging business models such as new retail, O2O and content marketing, while efforts have been stepped upfor livestream shopping and community group buying. In addition, it has developed an AFH service team for AFHchannels and customer bases to match the growing AFH market. In response to the market changes of modern KAchannels, the Company actively adjusts strategies and strives to improve efficiency and effectiveness of resourceinputs.Attributable to a robust sales network plus quality and diversified products, the Company is able to constantlyconsolidate its market basis, improve consumer experience, and enhance brand reputation, which can help achievesustainable and stable growth in the future.
5. Nationwide layout of production bases
The Company has developed a production layout covering East China, South China, West China, North China, andCentral China, through its subsidiaries including Jiangmen C&S, Yunfu C&S, Sichuan C&S, Zhejiang C&S, HubeiC&S, Tangshan Subsidiary and Dazhou C&S (under construction, not yet in production). Thanks to the nationwidelayout of production bases, the Company has narrowed the distance to customers, reduced transportation costs, andenhanced transportation efficiency.
6. Product quality at an international level
The Company has always regarded product quality as its lifeline of survival and development ever since itsincorporation. First-class quality derives from first-class raw materials. The Company has implemented strictincoming quality control (IQC) procedures for raw materials to control the hygiene and quality of products fromthe source. Moreover, manufacturing companies have passed the ISO9001 quality management system certificationand have set up the strictest inspection system for product quality. They have also adopted advanced processes,formulas, and control procedures in production to effectively guarantee technical indicators.
7. Good R&D capabilities
The Company is equipped with a complete product development system and the R&D department boasts strongindependent R&D capabilities and excellent product formula technologies. In recent years, the Company hascontinuously upgraded and optimized its products, in a bid to provide consumers with products that are of better
quality, more comfortable and more aligned with their individual needs. Products of the Company have extendedfrom household paper to cross-category household daily necessities including cleansing towel series, sanitary wipes,baby diapers, etc. The Company’s speed of bringing forth new products is at the forefront of the industry.
8. Advanced production equipment
The Company drives development with technological progress and has introduced advanced papermakingequipment and processing equipment from Austria, Germany, Italy, Japan and other countries. The diversifiedequipment can produce a variety of products that can meet the differentiated needs of consumers. As a first-tierenterprise, the Company occupies a leading position in the industry when it comes to the scale and automation ofproduction equipment. Advanced technology and highly automated equipment have strengthened the Company’sefficiency, further satisfied ever-growing market demands, and served as an unstoppable driving force todevelopment.
9. Outstanding environmental protection awareness and technology
Along with the deepening of industrialization, the concept of environmental protection has been deeply rootedamong the people. The Company has adhered to the concept of "seeking green benefits and fulfilling corporatesocial responsibilities", and utilized advanced environmental protection technologies to pursue its objective ofenvironmental protection. Its waste water and gas emissions are superior to the national standards. The Companyactively fulfills its corporate social responsibilities and actively responds to China’s strategic goals of “carbonpeaking” and “carbon neutrality” by fully supporting and enforcing various environmental protection requirementsof the government. In the future, the advantages and anti-risk capabilities of C&S in energy conservation andemission reduction will be further highlighted.III. Analysis of Principal BusinessesOverviewPlease refer to relevant contents in “I. Principal Businesses of the Company during the Reporting Period”.YoY changes in major financial data
Unit: RMB
| Current period | Same period of previous year | YoY changes | Reason of change | |
| Operating income | 4,685,080,565.59 | 4,367,618,113.61 | 7.27% | |
| Operating cost | 3,352,956,520.74 | 2,929,313,606.05 | 14.46% | |
| Selling expenses | 937,125,533.37 | 874,040,563.35 | 7.22% | |
| Administrative expenses | 188,774,711.51 | 180,176,434.40 | 4.77% | |
| Finance expenses | -16,470,784.30 | -1,467,050.22 | -1,022.71% | Finance expenses: This item recorded a decrease of RMB 15,003,734.08 or 1,022.71% in the reporting period compared with the same period of 2022, mainly due to the decrease in gains and losses on exchange during this reporting period. |
| Income tax | -1,857,299.09 | 33,733,447.46 | -105.51% | Income tax expenses: This item recorded a |
| expenses | decrease of RMB 35,590,746.55 or 105.51% in the reporting period compared with the same period of 2022, mainly due to the decrease in total profit during this reporting period. | |||
| R&D investment | 120,281,401.12 | 105,182,287.61 | 14.36% | |
| Net cash flow from operating activities | 773,446,258.06 | 699,549,725.75 | 10.56% | |
| Net cash flow from investing activities | -1,012,025,728.54 | -247,770,733.81 | -308.45% | Net cash flow from investing activities: This item recorded a decrease of RMB 764,254,994.73 or 308.45% in the reporting period compared with the same period of 2022, mainly due to the increase in principal paid for purchasing financial products during this reporting period. |
| Net cash flow from financing activities | 613,352,827.68 | 53,218,634.40 | 1,052.52% | Net cash flow from financing activities: This item recorded an increase of RMB 560,134,193.28 or 1052.52% in the reporting period compared with the same period of 2022, mainly due to an increase in cash received from borrowings during this reporting period. |
| Net increase in cash and cash equivalents | 401,022,115.70 | 517,377,489.31 | -22.49% |
Whether there are significant changes in the profit composition or source of profits of the Company during thereporting period
□ Applicable √ Not applicable
There were no significant changes in the profit composition or source of profits of the Company during the reportingperiod.Composition of operating income
Unit: RMB
| Current period | Same period of previous year | YoY changes | |||
| Amount | Proportion in operating income | Amount | Proportion in operating income | ||
| Total operating income | 4,685,080,565.59 | 100% | 4,367,618,113.61 | 100% | 7.27% |
| By industry | |||||
| Household paper | 4,623,891,020.45 | 98.69% | 4,310,541,117.61 | 98.69% | 7.27% |
| Personal care and others | 61,189,545.14 | 1.31% | 57,076,996.00 | 1.31% | 7.21% |
| By product | |||||
| Finished products | 4,605,804,022.70 | 98.31% | 4,268,648,501.31 | 97.73% | 7.90% |
| Semi-finished products | 79,276,542.89 | 1.69% | 98,969,612.30 | 2.27% | -19.90% |
| By region | |||||
| Domestic | 4,589,885,969.35 | 97.97% | 4,269,777,280.85 | 97.76% | 7.50% |
| Overseas | 95,194,596.24 | 2.03% | 97,840,832.76 | 2.24% | -2.70% |
Industries, products, or regions that accounted for over 10% of the Company’s operating income or operatingprofit
√ Applicable □ Not applicable
Unit: RMB
| Operating income | Operating cost | Gross | YoY changes | YoY changes of | YoY changes of |
| profit margin | of operating income | operating cost | operating gross profit margin | |||
| By industry | ||||||
| Household paper | 4,623,891,020.45 | 3,316,391,889.48 | 28.28% | 7.27% | 14.82% | -4.71% |
| By product | ||||||
| Finished products | 4,605,804,022.70 | 3,276,082,027.19 | 28.87% | 7.90% | 15.32% | -4.58% |
| By industry | ||||||
| Household paper | 4,589,885,969.35 | 3,281,461,615.63 | 28.51% | 7.50% | 14.52% | -4.38% |
Where the statistical standards for the Company’s principal business data were adjusted in the reporting period,whether principal business data of the Company in the recent period were adjusted as per statistical standards at theend of the reporting period
□ Applicable √ Not applicable
IV. Analysis of Non-principal Businesses
√ Applicable □ Not applicable
Unit: RMB
| Amount | Proportion in total profit | Explanation of reason | Is it consistently applied? | |
| Investment income | 1,958,155.36 | 2.39% | Mainly for the purchase of forward settlement and sales of foreign exchange, and the maturity income of financial products | No |
| Asset impairment | -1,417,159.06 | -1.73% | Provision for impairment of inventories | No |
| Non-operating income | 3,592,734.66 | 4.38% | Income from fine and compensation and others | No |
| Non-operating expense | 3,821,260.22 | 4.65% | Losses from damage and scrapping of fixed assets and others | No |
| Credit impairment losses | -1,764,899.61 | -2.15% | Provision for bad debts of accounts receivable and other receivables | No |
V. Analysis of Assets and Liabilities
1. Significant changes in the composition of assets
Unit: RMB
| End of current period | End of previous year | Proportion changes Amount | Explanation of significant changes Proportion in total assets | |||
| Amount | Proportion in total assets | Amount | Proportion in total assets | |||
| Monetary funds | 1,720,158,431.51 | 19.30% | 1,324,787,541.49 | 15.89% | 3.41% | |
| Accounts receivable | 1,173,731,203.91 | 13.17% | 1,084,130,138.51 | 13.01% | 0.16% | |
| Inventory | 1,241,142,975.60 | 13.92% | 1,911,630,723.55 | 22.93% | -9.01% | Inventory: This item recorded a decrease of RMB670,487,747.95 or 35.07% in the reporting period compared with the end of 2022, mainly owing to the decrease in |
| raw material during the reporting period. | ||||||
| Investment property | 30,983,155.44 | 0.35% | 31,701,597.54 | 0.38% | -0.03% | |
| Fixed assets | 2,848,133,013.46 | 31.95% | 3,013,559,312.97 | 36.16% | -4.21% | |
| Construction work in progress | 167,569,837.60 | 1.88% | 142,627,123.42 | 1.71% | 0.17% | |
| Right-of-use assets | 15,812,608.61 | 0.18% | 9,758,283.42 | 0.12% | 0.06% | Right-of-use assets: This item recorded an increase of RMB 6,054,325.19 or 62.04% in the reporting period compared with the end of 2022, mainly owing to the increase in lease contracts under the new leasing standards during the reporting period. |
| Short-term borrowing | 1,166,297,275.02 | 13.08% | 607,799,222.62 | 7.29% | 5.79% | Short-term borrowing: This item recorded an increase of RMB 558,498,052.40 or 91.89% in the reporting period compared with the end of 2022, mainly owing to the increase in short-term loans from bank during the reporting period. |
| Contract liabilities | 55,853,584.65 | 0.63% | 96,581,944.94 | 1.16% | -0.53% | Contract liabilities: This item recorded a decrease of RMB 40,728,360.29 or 42.17% in the reporting period compared with the end of 2022, mainly owing to the decrease in advances received from customers during the reporting period. |
| Lease liabilities | 8,675,066.94 | 0.10% | 803,879.30 | 0.01% | 0.09% | Lease liabilities: This item recorded an increase of RMB 7, 871,187.64 or 979.15% in the reporting period compared with the end of 2022, mainly owing to the increase in rented houses and buildings during the reporting period. |
2. Main overseas assets
□ Applicable √ Not applicable
3. Assets and liabilities measured at fair value
□ Applicable √ Not applicable
4. Restriction of asset rights as at the end of the reporting period
| Item | Book value at the end of the period (RMB) | Reason for restriction |
| Monetary funds | 70,238,291.22 | Security deposits for issuing letter of credit and notes |
| Total | 70,238,291.22 |
VI. Analysis of Investment
1. Overview
√ Applicable □ Not applicable
| Investment amount during the reporting period (RMB) | Investment amount of previous year (RMB) | Changes |
| 1,108,556,413.00 | 298,095,067.10 | 271.88% |
2. Major equity investment during the reporting period
□ Applicable √ Not applicable
3. Major non-equity investment during the reporting period
□ Applicable √ Not applicable
4. Financial asset investment
(1) Security investment
□ Applicable √ Not applicable
The Company did not invest in securities during the reporting period.
(2) Derivative investment
√ Applicable □ Not applicable
1） Derivatives investments for hedging purposes during the reporting period
√ Applicable □ Not applicable
Unit: RMB10,000
| Type | Initial | Profit or loss from | Accumu | Amount | Amount | Investment | Proportion of the |
| investment amount | changes in fair value of the period | lated changes in fair value included in equity | bought in during the period | sold during the period | amount at the end of the period | investment amount at the end of the period in the Company’s net assets at the end of the period | |
| Structural Forward Exchange Purchase | 5,428 | 96.8 | 0 | 5,428 | 5,428 | 0 | 0.00% |
| Total | 5,428 | 96.8 | 0 | 5,428 | 5,428 | 0 | 0.00% |
| Whether there are significant changes to the accounting policies and specific accounting principles for derivatives during the reporting period compared with previous reporting period | None | ||||||
| Explanation on actual profit or loss during the period | The Company’s forward foreign exchange sale and purchase business recorded an actual profit of RMB968,000 during the reporting period. | ||||||
| Explanation on the effects of hedging | To avoid the exchange rate and interest rate risks faced in daily operations, the company hedges its actual risk exposure by operating financial derivatives. The gains and losses of financial derivative contracts to some extent hedge the value changes of assets or liabilities caused by changes in exchange rates and interest rates, and the overall hedging effect meets expectations. | ||||||
| Source of fund | Self-owned fund | ||||||
| Risk analysis and control measures of derivative positions during the reporting period (including but not limited to market risks, liquidity risks, credit risks, operational risks and legal risks) | Risk analysis: 1. Price fluctuation risk: Price fluctuations of underlying interest rates and exchange rates may lead to price changes of the financial derivatives, thereby causing losses; 2. Internal control risk: Derivative trading is highly specialized and complicated, which may result in risks arising from poor internal control; 3. Liquidity risk: Transaction may become unable to be completed due to insufficient market liquidity; 4. Performance risk: The derivative contract may become unable to be fulfilled at maturity, thereby leading to default risk; 5. Legal risk: Relevant laws and regulations may be changed or the counterparty may violate relevant laws and regulations such that the contract cannot be normally executed, causing losses to the Company. Control measures: 1. Select financial derivatives with strong liquidity and controllable risks for trading; 2. Derivative trading should follow the primary principle of hedging for risks caused by exchange rate fluctuations to the greatest extent; operation strategies will be adjusted in a timely manner according to market conditions, to better hedge risks; 3. Carefully choose the counterparty of the derivative trading; 4. Assign specified personnel to continuously monitor the derivative contracts who will report cases of great market fluctuations or increased risks or significant floating profits or losses to the management of the Company timely, so as to respond actively; 5. Only conduct derivative trading with qualified financial institutions such as large commercial risks, to avoid possible legal risks. | ||||||
| Changes in market price or fair value of invested derivatives during the reporting period; analysis on fair value of derivatives should disclose the specific methods used as well as the setting of relevant assumptions and parameters | Given that the subject of the Company's hedging transactions is forward foreign exchange settlement, the fair value is determined based on foreign exchange rate. | ||||||
| Litigation involved (if applicable) | None | ||||||
| Disclosure date of the announcement regarding the Board’s approval of derivative investment (if any) | Novermber 23, 2022 | ||||||
| Opinions of independent directors on the Company’s derivative investment and risk control | The Company and its subsidiaries use foreign currency to pay for raw material purchases, so when the exchange rate fluctuates, exchange gains and losses will have a certain impact on the Company’s business performance. Therefore, it is reasonable for the Company and subsidiaries | ||||||
to use financial tools to hedge exchange rate and interest rate risks. Moreover, the Companyhas formulated the Management System on Financial Derivative Trading to effectively regulatederivative investment and control derivative trading risks. There is no situation that damagesthe interests of shareholders of the Company.
2） Derivatives investments for speculative purposes during the reporting period
□ Applicable √ Not applicable
The Company did not engage in any derivatives investments for speculative purposes during the reporting period.
5. Use of raised funds
□ Applicable √ Not applicable
No raised funds were used by the Company during the reporting period.VII. Major Asset and Equity Sales
1. Sales of major assets
□ Applicable √ Not applicable
The Company did not sell major assets during the reporting period.
2. Sales of major equity
□ Applicable √ Not applicable
VIII. Analysis of Main Holding and Joint-stock Companies
√ Applicable □ Not applicable
Description of main subsidiaries and of joint-stock companies which have influence on the Company’s net profit by over 10%
Unit: RMB10,000
| Company name | Company type | Principal businesses | Registered capital | Total assets | Net assets | Operating income | Operating profit | Net profit |
| Jiangmen C&S | Subsidiary | R&D, production, and sales (including online sales): household paper, maternal and infant products, cosmetics, wipes, non-woven products, daily necessities, and cleaning supplies; sales (including online sales) of Class I and II medical devices. (The above items do not involve special management measures for the foreign access). (For items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments.) | 34,598.5032 | 230,136.91 | 150,052.68 | 92,801.89 | 5,072.93 | 4,369.52 |
| Yunfu C&S | Subsidiary | R&D, production, wholesale, retail and online sales: household paper, sanitary products, maternal and infant products, daily necessities, cosmetics, medical devices, sanitary materials, non-woven fabrics and products, polymer materials and products, daily sundries, and disinfection supplies (excluding hazardous chemicals); wholesale, retail and online sales: food; import and export of goods and technologies (excluding the import and export of goods and technologies prohibited by the State or involving administrative approval); warehousing services (limited to warehouses qualified in fire protection without hazardous chemicals). (For items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments.) | 65,000 | 268,464.14 | 126,374.97 | 170,043.29 | 6,773.72 | 5,588.46 |
| Sichuan C&S | Subsidiary | Licensed items: production of sanitary products and disposable medical supplies; import and export of goods (for items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments, and the specific business items are subject to the approval document or the permit issued by relevant department). General items: sales of sanitary products and disposable medical supplies; sales of personal hygiene products; sales of daily necessities; manufacture of paper products; sales of paper products; manufacture of paper; manufacture of daily chemical products; sales of daily chemical products; sales of Class II medical devices; sales of Class I medical devices; manufacture of industrial textile products; sales of industrial textile products; manufacture of maternal and infant products; sales of maternal and infant products. (The company may carry out business operations independently according to the law based on the business license, except for items that must be licensed according to the law.) | 10,000 | 92,485.64 | 48,751.05 | 103,220.03 | 2,512.11 | 2,044.14 |
| Hubei C&S | Subsidiary | General items: manufacture of paper; manufacture of paper products; sales of paper products; sales of sanitary products and disposable medical supplies; retail of cosmetics; | 20,000 | 177,784.67 | 46,472.72 | 119,295.28 | 5,063.22 | 3,780.53 |
wholesale of cosmetics; sales of personal hygiene products; sales of knitwear; manufactureof maternal and infant products; sales of maternal and infant products; sales of dailynecessities; sales of daily chemical products; sales of disinfectants (excluding hazardouschemicals); sales of Class I medical devices; sales of Class II medical devices; export ofgoods; export of technologies; Internet sales (excluding the sales of commodities requiring apermit); information technology consulting services (The company may carry out businessoperations independently according to the law based on the business license, except for itemsthat must be licensed according to the law.) Licensed items: production of cosmetics;production of sanitary products and disposable medical supplies(for items that must beapproved in accordance with the law, companies may carry out business operations uponapproval by relevant departments, and the specific business items are subject to the approvaldocument or the permit issued by competent department).( The above business activities donot involve prohibited items in the Negative list of foreign investment in China)
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
Description of main holding and joint-stock companiesNone
IX. Structured Entities Controlled by the Company
□ Applicable √ Not applicable
X. Risks Faced by the Company and Countermeasures
1. Risk of great fluctuations in pulp prices
Pulp is an international bulk raw material and its price is obviously affected by the world economic cycle. The pulpprice has surged in 2022 under the impact of major international events such as the conflict between Russia andUkraine, the European energy crisis, and volatile geopolitical relations. Pulp is the primary raw material of theCompany’s production, accounting for 40%-60% of the total production costs. Therefore, substantial fluctuationsin pulp prices pose a risk to the Company.The Company is equipped with a professional procurement team which, on the premise of ensuring normalproduction inventory, adjusts the purchase rhythm by professionally evaluating the future trend of pump boards andcoordinating the market conditions of international pulp prices. The Company has cemented long-term supplycontracts with pulp suppliers that have large production scale, abundant forest resources and advanced productiontechnologies to ensure stable raw material procurement. It has established a global procurement network withpurchases in Europe, North America, South America, etc.
2. Risk of exchange rate fluctuation
The import of machinery equipment and pulp and the export of products to overseas market of the Company aremainly settled in USD, HKD, and EUR. Since exchange rates fluctuate under the impact of the internationaleconomic situation, the Company faces exchange rate risks.The Company pays close attention to changes in the foreign exchange market on a daily basis and hedges againstexchange losses brought by RMB depreciation or two-way fluctuations by adjusting the structure of foreigncurrency assets and liabilities and reducing overall foreign currency liabilities. In addition, the Company started toadopt the spot selling rate accounting for foreign currency transactions since 2015 in accordance with its actualneeds and in compliance with foreign exchange requirements. In this way, the Company may choose to buy foreigncurrency and pay for the goods at a rate favorable to the Company at an appropriate time. Furthermore, the Companyhedges against and avoids exchange rate risks via centralized management of foreign exchange funds, purchasepayment hedging, etc. based on changes in the foreign exchange market and actual development of the Company.With regard to exchange rate risk exposure, the Company also uses hedging and other financial tools to conductreasonable risk management.
3. Risk of regional market competition
Household paper is a vast market in China in terms of both geography and market space. Given the low unit value,transportation expenses taking up a large part of the sales price, and limitations of the transportation radius, the maincompetition in the household paper industry lies in regional markets. High-end, mid-end, and low-end productscompete in regional markets, with the influence of spending power and consumption habit. Judging from thedevelopment trend of the industry, mid- and high-end household paper of national brands has more competitiveedge. However, at present, some regional brands have an advantage in some regional markets. Compared withoverseas counterparts, China’s household paper industry requires continued integration. The Company embracesproduction bases and a sales network across the country and offers mid- and high-end products under national brands.Nevertheless, it is inescapable from the risk of regional market competition.After years of development, the Company has become one of the leading companies in the domestic householdpaper industry. It has built a marketing network covering most prefecture (county) level cities and a production basewith national presence. As a result, transportation costs can be effectively reduced and transportation efficiencyeffectively improved by shorting the distance with consumers. As the Company continues to deepen and expandsales channels, it will gradually cover untapped outlets. In the future, in response to market competition, theCompany will strengthen channel sinking, increase market penetration, further expand its scale, and further improveits overall market competitiveness and shares.
4. Risk of industrial policies
Stricter requirements have been raised for the papermaking industry in the aspects of scale, technology, equipment,and environmental protection, as multiple industry plans and supporting policies have been successively issued byrelevant departments, including the Papermaking Industry Development Policy, the Notice on the Management ofElevated Source Pollution Discharge Permits in Thermal Power and Papermaking Industries and Pilot Cities ofBeijing-Tianjin-Hebei Region, and the Opinions of China Paper Association on Fourteenth Five-year Plan for thePapermaking Industry. Particularly, a number of measures have been introduced through environmental protectionpolicies to drive the all-round, coordinated, and sustainable development of the household paper industry, including
1) optimizing the industrial distribution to reasonably allocate resources and promoting clean production to preservethe ecological environment; 2) pushing energy conservation and emission reduction to shut down outdatedproduction facilities, and adjusting product structure and improving product quality; 3) developing resource-savingmodels to advocate green consumption; and 4) optimizing enterprise structure and driving M&A and restructuring.These policies are designated to strengthen household paper industry concentration, close backward productionfacilities, and optimize resource allocation. The Company, as an enterprise in the first echelon of the domestichousehold paper industry, is underpinned by national policies related to the sustainable development of thehousehold paper industry. Precisely because of this, industrial policy adjustment, if any, will impact the productionand operations of the Company to some extent.
In the face of increasing stringent environmental protection policies, as a responsible domestic enterprise in thehousehold paper industry, the Company and its subsidiaries strictly abide by environmental protection laws andregulations of the state and local governments. Production bases are equipped with state-of-the-art papermakingequipment, processing equipment and environmental protection treatment equipment and facilities, and adoptadvanced environmental protection technologies. With continuous capital and technological inputs andimprovement in pollution control of the production process, the Company strives to reduce environmental pollutionand ensure green production. The Company will continue to optimize production efficiency in response torequirements of national industrial policies.
5. Risk of safe production
Most of the materials involved in the household paper industry are flammable, including the main raw material ofpulp, the main packing materials of plastic-film packing bags and cartons, the semi-finished product of body paper,and finished products. Due to the characteristics of low unit value and large market consumption, household papermanufacturers have to keep a mass of pulp, packing materials, and semi-finished and finished products from theentry of raw materials into the plant to the delivery of products to the market. Thus, fire can cause enormous lossesto such manufacturers. In addition, a large number of production lines have been put into use, which may posecertain occupational health hazard and cause harm to the occupational health of employees.In view of this, the Company has formulated strict fire management regulations, established a full-time safetymanagement department, equipped delicated safety management personnel, equipped adequate safety protectionand fire protection equipment in production areas, and bought full insurance for risky properties. As such, theCompany’s fire safety risk is low. The Company has always adhered to the concept of intrinsic safety, continuouslyimproved mechanical safety protection, improved equipment safety, and reduced safety risks during the operationprocess. In response to possible occupational health hazards, the Company, at the equipment design and procurementstages, requires suppliers to carry out intrinsic safety design and fulfill the protection measures during theinstallation process. At the same time, the Company has passed the ISO45001 occupational health and safety (OHS)management system and continues to maintain its effective operations to reduce the occupational health and safetyrisks of employees.
Section IV Corporate GovernanceI. Annual General Meeting and Extraordinary General Meetings Held during the ReportingPeriod
1. Shareholder meetings during the reporting period
| Session of meeting | Type | Ratio of investor participation | Date of convening | Date of disclosure | Resolutions of the meeting |
| 2023 First Extraordinary General Meeting | Extraordinary general meeting of shareholders | 53.69% | January 10,2023 | January 11,2023 | Details can be found in the Announcement on the Resolution of the 2023 First Extraordinary General Meeting of Shareholders (Announcement No.: 2023-02) on CNINFO (http://www.cninfo.com.cn) . |
| 2023 Second Extraordinary General Meeting | Extraordinary general meeting of shareholders | 52.97% | April 3,2023 | April 4,2023 | Details can be found in the Announcement on the Resolution of the 2023 Second Extraordinary General Meeting of Shareholders (Announcement No.: 2023-18) on CNINFO (http://www.cninfo.com.cn) . |
| 2022 Annual General Meeting of Shareholders | Annual general meeting | 52.89% | May 11,2023 | May 12,2023 | Details can be found in the Announcement on the Resolution of the 2022 Annual General Meeting of Shareholders (Announcement No.: 2023-31) on CNINFO (http://www.cninfo.com.cn) . |
2. Extraordinary general meetings of shareholders proposed to be convened by preferred shareholders whosevoting rights were resumed
□ Applicable √ Not applicable
II. Changes in Directors, Supervisors and Senior Management of the Company
√ Applicable □ Not applicable
| Name | Position | Type | Date | Reason |
| He Haidi | Independent Director | Resigned | April 3, 2023 | Served as an independent director of the Company for six consecutive years |
| Ge Guangrui | Independent Director | Elected | April 3, 2023 | Elected by the general meeting of shareholders |
III. Profit Distribution and Conversion of Capital Reserve to Share Capital during theReporting Period
□ Applicable √ Not applicable
The Company plans not to distribute cash dividend, issue bonus share, or transfer capital reserve into share capitalfor the half year.
IV. Implementation of the Stock Incentive Plan, Employee Stock Ownership Plan, and OtherEmployee Incentives of the Company
√ Applicable □ Not applicable
1. Equity incentive
Implementation of the 2018 Stock Option and Restricted Stock Incentive Plan during the reporting period:
(1) During the third unlock period for the reserved restricted shares, a total of 178,536 restricted shares needed tobe repurchased and canceled. The repurchase and cancellation procedures for the above granted but not unlockedrestricted shares were completed at the Shenzhen Branch of China Securities Depository and Clearing CorporationLimited on February 9, 2023.
(2) On March 15, 2023, the Company convened the 20th meeting of the Fifth Board of Directors and the 15thmeeting of the Fifth Board of Supervisors, which reviewed and approved the Proposal on the Deregistration ofStock Options Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock IncentivePlan That Have Not Been Exercised in the Third Exercise Period. During the third exercise period of the first-granted stock options (i.e. June 29, 2022 to March 03, 2023), nine recipients did not exercise the stock optionswithin the period, so 6,082 shares needed to be canceled. The cancellation procedures for the aforementioned 6,082shares were completed on April 6, 2023 under the review and confirmation of the Shenzhen Branch of ChinaSecurities Depository and Clearing Corporation Limited.
Implementation of the 2022 Stock Option and Restricted Stock Incentive Plan during the reporting period:
(1) On December 20, 2022, the Company convened the 18th meeting of the Fifth Board of Directors, the 13thmeeting of the Fifth Board of Supervisors, and the 2023 First Extraordinary General Meeting of Shareholders, whichdeliberated and approved the Proposal on the 2022 Stock Option and Restricted Stock Incentive Plan (Draft) andIts Summary. For details, please refer to the Company's relevant announcements on CNINFO.
(2) On January 4, 2023, the Company's Board of Supervisors issued an explanation and the audit opinions on thelist of incentive recipients under the 2022 Stock Option and Restricted Stock Incentive Plan. At the same time, theCompany issued a self-inspection report on the buying and selling of corporate shares by insiders and incentiverecipients of the 2022 Stock Option and Restricted Stock Incentive Plan.
(3) On January 31, 2023, the Company held the 19th meeting of the Fifth Board of Directors and the 14th meetingof the Fifth Board of Supervisors, which reviewed and approved the Proposal on Granting Stock Options andRestricted Shares to Incentive Recipients for the First Time. The Board believed that the granting conditionsstipulated in the incentive plan were fulfilled and thereby agreed to, with January 31, 2023 as the first-grant date,grant a total of 15.665 million stock options to 686 incentive recipients who met the granting conditions with anexercise price of RMB9.48/share, and a total of 21.765 million restricted shares to 694 incentive recipients who metthe granting conditions with a grant price of RMB6.32/share.
(4) The registration procedures for the first-granted stock options under the 2022 Stock Option and Restricted StockIncentive Plan were completed on February 24, 2023, with a quantity of 15.48 million, number of recipients 654,
stock option abbreviation C&S JLC3, and stock option code 037336. In addition, the registration procedures for thefirst-granted restricted shares under the 2022 Stock Option and Restricted Stock Incentive Plan were completed onMarch 6, 2023, with a quantity of 20.9615 million, number of recipients 617, and stock listing date March 7, 2023.
2. Implementation of the employee stock ownership plan
□ Applicable √ Not applicable
3. Other employee incentives
□ Applicable √ Not applicable
Section V Environmental and Social ResponsibilitiesI. Main Environmental Protection IssuesWhether the listed company and its subsidiaries are the key pollution discharge units published by theenvironmental protection department
√ Yes □ No
The Company and its subsidiaries and branches strictly complied with national and local environmental laws andregulations, including the Environmental Protection Law of the People's Republic of China, the EnvironmentalImpact Assessment Law of the People's Republic of China, the Law of the People's Republic of China on thePrevention and Control of Water Pollution, the Law of the People's Republic of China on the Prevention and Controlof Atmospheric Pollution, the Law of the People's Republic of China on the Prevention and Control ofEnvironmental Pollution by Solid Waste, the Regulation on the Safety Management of Hazardous Chemicals, andthe Interim Provisions on the Supervision and Management of Major Hazard Sources of Dangerous Chemicals, aswell as national and industry standards on environmental protection including the Wastewater quality standards fordischarge to municipal sewers (GB/T31962-2015), the Discharge standard of water pollutants for pulp and paperindustry (GB3544-2008), the Emission standard of air pollutants for boiler (GB13271-2014), and the Dischargestandard of pollutants for municipal wastewater treatment plant (GB18918-2002).Environmental protection administrative permits
1. Jiangmen C&S obtained the Pollutant Discharge Permit (No. 91440700758324965B001P) on July 9, 2020, witha valid period from June 15, 2020 to June 14, 2025.
2. Sichuan C&S obtained the Pollutant Discharge Permit (No. 9151018270925944X0001P) on June 26, 2020, witha valid period from June 27, 2020 to June 26, 2025.
3. Zhejiang C&S obtained the Pollutant Discharge Permit (No. 91330400793360582E001P) on December 6, 2022,with a valid period from December 6, 2022 to December 5, 2027.
4. Tangshan C&S obtained the Pollutant Discharge Permit (No. 91130200689262827L001P) on August 7, 2022,with a valid period from June 23, 2020 to June 22, 2025.
5. Yunfu C&S obtained the Pollutant Discharge Permit (No. 91445381053735377Y001P) on June 22, 2020, with avalid period from June 2, 2019 to June 1, 2024.
6. Hubei C&S obtained the Pollutant Discharge Permit (No. 91420900764132820H002P) on April 10, 2023, witha valid period from May 21, 2023 to May 20, 2025.Construction projects: The Company has always been strictly in accordance with environmental laws andregulations to implement the control of construction projects. Environmental impact assessment was carried out forall construction projects and environmental protection project construction was arranged according to constructionplan, to ensure that the environmental protection facilities and the main project are designed, constructed and putinto use at the same time. At present, all construction projects put into production have completed environmentalimpact assessment and acceptance and approval.
Industry discharge standards and specifics of pollutant discharge in production and operation activities:
| Name of company or subsidiary | Category of main pollutants and particular pollutants | Main pollutants and particular pollutants | Ways of discharge | Number of discharge outlets | Distribution of discharge outlets | Concentration of discharge | Implemented pollutant discharge standards | Total discharge | Total approved discharge | Excessive discharge |
| Jiangmen C&S | Waste water | COD | Discharge directly to the centralized sewage treatment plant | 1 | Centralized processing facilities in the factory | 102mg/L | 200mg/L | 31.62t | 335.600 t/a | None |
| Ammonium nitrate | Discharge directly to the centralized sewage treatment plant | 1 | Centralized processing facilities in the factory | 3.71mg/L | 8mg/L | 1.33t | 13.4 t/a | None | ||
| Sichuan C&S | Waste water | COD | Discharge to the water purification station through urban sewage pipeline after treatment | 1 | Production waste water discharge (DW001) flows through the channel into the main outlet DW002 (confluent with domestic waste water) | 50.3 mg/L | 80mg/L | 24.87t | 96 t/a | None |
| Ammonium nitrate | Discharge to the water purification station through urban sewage pipeline after treatment | 1 | Production waste water discharge (DW001) flows through the channel into the main outlet DW002 (confluent with domestic waste water) | 0.51 mg/L | 8mg/L | 0.27t | 9.6 t/a | None | ||
| Waste gas | PM (particulate matter) | Discharge directly through the flue | 3 | Three chimneys (2# boiler is the standby boiler, monitoring when being used) | 1# boiler 2mg/m? 2# boiler 0 mg/m? 3# boiler 2.3 mg/m? | 10mg/m? | 0.17t | / | None | |
| Nitrogen oxide | Discharge directly through the flue | 3 | Three chimneys (2# boiler is the standby boiler, monitoring when being used) | 1# boiler 24 mg/m? 2# boiler 0 mg/m? 3# boiler 28 mg/m? | 30mg/m? | 2.04t | 10.454t/a | None | ||
| Sulfur dioxide | Discharge directly through the flue | 3 | Three chimneys (2# boiler is the standby boiler, monitoring when being used) | 0 | 10mg/m? | 0 | / | None | ||
| Zhejiang C&S | Waste water | COD | Discharge to Jiaxing Industrial Sewage Treatment Plant through municipal pipe after treatment | 1 | Centralized processing facilities in the factory | 76.74mg/L | 500mg/L | 7.12t | 13.97t/a | None |
| Ammonium nitrate | Discharge to Jiaxing Industrial Sewage Treatment Plant through municipal pipe after treatment | 1 | Centralized processing facilities in the factory | 3.91mg/L | 35mg/L | 0.37t | 9.78t/a | None | ||
| Tangshan C&S | Waste water | COD | Discharge to the Lvyuan Sewage Treatment Plant in the zone after being treated by the plant sewage treatment station | 1 | Main outlet of the zone (Lvyuan Sewage Treatment Plant) | 22.72mg/L | ≤50mg/L | 3.76t | 26.068 t/a | None |
| Ammonium nitrate | Discharge to the Lvyuan Sewage Treatment Plant in the zone after being treated by the plant sewage treatment station | 1 | Main outlet of the zone (Lvyuan Sewage Treatment Plant) | 2.98mg/L | ≤5mg/L | 0.58t | 2.55t/a | None | ||
| Waste gas | Nitrogen oxide | Discharge directly through the flue | 1 | One chimney | 21.68mg/m? | ≤30mg/m? | 1.3t | 6.97t/a | None | |
| Yunfu C&S | Waste water | COD | Discharge directly | 1 | Sewage treatment station in the factory | 30.64mg/L | 80mg/L | 30.58t | 197.71t/a | None |
| Ammonium nitrate | Discharge directly | 1 | Sewage treatment station in the factory | 0.72mg/L | 8mg/L | 0.72t | 19.76t/a | None | ||
| Hubei C&S | Waste water | COD | Discharge indirectly (discharge to Biquan Sewage Treatment Plant through municipal pipe after treatment) | 1 | Discharge to Biquan Sewage Treatment Plant after pre-processing with centralized processing facilities in the factory, | 126.33mg/L | ≤400mg/L | 18.09t | 152.25t/a | None |
| Ammonium nitrate | Discharge indirectly (discharge to Biquan Sewage Treatment Plant through municipal pipe after treatment) | 1 | Discharge to Biquan Sewage Treatment Plant after pre-processing with centralized processing facilities in the factory, | 3.07mg/L | ≤30 mg/L | 0.23t | 15.25t/a | None | ||
| Waste gas | PM (particulate matter) | Organized discharge (dedusting by bag filter, desulfurization by limestone-gypsum and denitration by SNCR) | 1 | One chimney | 3.82mg/m? | ≤30mg/m? | 2.71 t | 28.63t/a | None | |
| Sulfur dioxide | Organized discharge (dedusting by bag filter, desulfurization by limestone-gypsum and denitration by SNCR) | 1 | One chimney | 56mg/m? | ≤200mg/m? | 46.27 t | 203.87t/a | None | ||
| Nitrogen oxide | Organized discharge (dedusting by bag filter, desulfurization by limestone-gypsum and denitration by SNCR) | 1 | One chimney | 74.83mg/m? | ≤200mg/m? | 58.14t | 239.85t/a | None |
Treatment of pollution
(1) Duty toward compliance: The Company and its subsidiaries and branches strictly abide by national and localenvironmental laws and regulations. All new projects strictly implement the environmental impact assessmentsystem and "three simultaneous" system. All production activities strictly comply with the Environmental ProtectionLaw of the People’s Republic of China, the Law of the People’s Republic of China on the Prevention and Controlof Water Pollution, the Law of the People’s Republic of China on the Prevention and Control of AtmosphericPollution, the Law of the People’s Republic of China on the Prevention and Control of Environmental Pollution bySolid Waste and the Action Plan for Prevention and Control of Water Pollution, and ensure that all pollutanttreatment and discharge are in line with the requirements of laws and regulations.
(2) Configuration and operation of water treatment equipment and facilities: Each subsidiary or branch has acomplete array of environmental protection treatment equipment and facilities. The main sewage treatmentprocesses are anaerobic, aerobic and subsequent deep treatment processes, which can achieve the dischargestandards of various sewage indicators. In addition, each subsidiary or branch is equipped with a recycling watersystem in which the reclaimed water that meets the usage standard is used for re-production to reduce the dischargeof sewage as far as possible. The sewage of Jiangmen C&S, Sichuan C&S, Zhejiang C&S, Hubei C&S and TangshanC&S is discharged after centralized treatment in the company and treated by the local sewage treatment plants. Aftercentralized treatment in the company, the sewage of Sichuan C&S enters water purification station through urbansewage pipeline. The sewage of Yunfu C&S, after treated by the company’s sewage treatment station and reachingthe standard, is discharged in an organized manner.
(3) Online monitoring and operation of water treatment facilities: Six subsidiaries or branches in Jiangmen, Sichuan,Zhejiang, Tangshan, Yunfu and Hubei have all installed on-line sewage monitoring facilities, which are directlysupervised by local environmental protection bureau. The sewage of Tangshan C&S, after centralized treatment inthe subsidiary, is discharged to the sewage plant of the local paper industry base without any other sewage outlet.The company has its own monitoring facilities for internal control reference. After the centralized treatment withinthe company, the sewage of Jiangmen C&S is discharged to the sewage plant of the local paper industry base; thereis no other sewage outlet and no online monitoring facilities. The environmental protection bureau goes to thecompany regularly every quarter to compare the on-line monitoring data, which all meet the requirements.
(4) Boiler waste gas emission: Sichuan C&S and Tangshan C&S are equipped with natural gas boilers. Hubei C&Sis equipped with a coal-fired boiler, and waste gas is emitted uniformly after desulfurization and denitrification.Boiler waste gas emission conforms to GB13271-2014 Emission Standard of Air Pollutants for Boiler.Emergency plan for sudden environmental events
(1) Preparation and reporting of emergency plan for sudden environmental events: The Company strictlyimplements emergency response rules for sudden environmental events, and, in accordance with the technicalrequirements in the Technical Guidelines for Preparation of Emergency Plans for Environmental PollutionAccidents, employs a professional advisory and guidance organization to formulate the Emergency Plan for SuddenEnvironmental Events, which has been reviewed by and filed with the Environmental Protection Bureau.
(2) Emergency response supplies, training and drill: The Company has matched the corresponding emergencyresponse supplies according to the requirements of the Emergency Plan for Sudden Environmental Events.
Emergency response measures for hazardous chemicals have been prepared according to environmental protectionrequirements, and necessary labor protection supplies and emergency response supplies have been provided inaccordance with safety technical instructions, and checked and updated regularly. The Company regularly carriesout emergency training and drill and suitability assessment of the emergency plan to ensure the effectiveness andenforceability of the emergency plan.Investment in environmental governance and protection and payment of environmental protection taxesDuring the reporting period, the Company and its subsidiaries and branches invested a total of RMB3.8952 millionin environmental governance and protection, including testing costs, sludge disposal costs, hazardous waste disposalcosts and online operation and maintenance costs, and paid a total of RMB422,300 in environmental protectiontaxes.Environmental self-monitoring program
(1) Self-monitoring ledger: The Company strictly abides by laws and regulations, carries out self-monitoring workin accordance with environmental protection requirements, establishes environmental management ledger and data,and constantly improves it.
(2) Waste water monitoring: At present, self-monitoring is a combination of manual monitoring and automaticmonitoring, and qualified units are entrusted to carry out monitoring regularly. Automatic monitoring items: maindischarge outlet of waste water (COD, ammonium nitrate, flow rate, PH, total nitrogen); Manual monitoring items:
BOD, SS and chroma indicators are monitored daily or weekly; for other sewage monitoring items, uncontrolledemissions, solid waste and factory boundary noise, each subsidiary entrusts qualified units to carry out monitoringwork monthly or quarterly according to the local environmental protection requirements.
(3) Waste gas monitoring: The main testing items are nitrogen oxide, ringelman emittance, sulfur dioxide, soot,mercury and their compounds. The testing frequency is in compliance with the requirements of regulations.
(4) The self-monitoring data of pollutant discharge and environmental monitoring plans are disclosed on provincialdisclosure websites for key pollution source information while paper reports are submitted to the EnvironmentalProtection Bureau for archival.Administrative penalties due to environmental issues during the reporting period
| Name of company or subsidiary | Reason of penalty | Violation | Penalty result | Impact on production and operation of the listed company | Rectification measures of the Company |
| Not applicable | Not applicable | Not applicable | Not applicable | Not applicable | Not applicable |
Other environmental information that should be disclosed
(1) Emission permit information and environmental protection information related to emission permit requirementsare available on national emission permit management information platform; in the event that competentgovernment departments in the localities of the subsidiaries and branches have additional requirements, suchinformation is published on the platform for environmental information reporting prescribed by the localgovernment authority.
(2) Other environmental protection-related information is available in the "News" section of the Company’s website.Measures taken to reduce carbon emissions during the reporting period and their effects
√ Applicable □ Not applicable
1. Sichuan C&S renovated the gas hood, which reduced the natural gas consumption per ton of paper.
2. In order to further reduce pollution, improve resource utilization efficiency and decrease production costs as wellas heat consumption and emission, Zhejiang C&S, under the advocacy of competent local government departments,implemented several cleaner production programs, which achieved tangible results and attained the expected goalsfor cleaner production and carbon reduction.
3. Tangshan C&S performed the energy-saving upgrade for TT dryer cylinders, to ensure product quality, reduceproduction costs, and decrease the natural gas consumption per ton of paper.
4. The Group changed to use magnetic levitation vacuum pumps in all production areas to reduce the powerconsumption of papermaking.Other relevant information on environmental protection: None
II. Social ResponsibilitiesDuring the reporting period, the Company actively fulfills corporate social responsibilities (CSR). Abiding by theprinciple of integrity and its commitments, it strives to safeguard the legitimate rights and interests of allstakeholders including shareholders, employees, consumers, partners and the society at large and thereby makesdue contribution to sustainable development of the society and the environment. Meanwhile, as a national enterprisewith important social influence and a leading enterprise in the household paper industry, the Company has activelycarried out poverty alleviation and rural revitalization work. Specifics are as follows:
1. The Company has donated medical surgical masks, children's masks, sanitary wipes, sanitary pads, paper tissuesand other materials to a number of regions, with a total market value of about RMB1.6 million.
2. The Company donated RMB80,000 to poverty-stricken areas to support for education, the elderly, those inpoverty, medical, families of the military, sports, culture and other causes.
3. Jiangmen C&S paid regular visits to veteran party members and local households in need in Shuangshui Town,donating funds and paper tissues to them; it also signed an employment cooperation agreement with the localVeterans Affairs Bureau and was awarded the honorary title of “Enterprise of Army Supporting and Caring”.
4. Hubei C&S organized activities to help needy families, and held the “Xiaogan Carving and Paper-cutting”activity to carry forward the intangible cultural heritage, thereby promoting excellent traditional Chinese culture.
Section VI Significant EventsI. Commitments Completed by Actual Controllers, Shareholders, Related parties, Purchaserswithin the Reporting Period, or Commitments Not Fulfilled by the End of the Reporting Period
□ Applicable√ Not applicable
During the reporting periods, the Company did not have commitments completed by actual controllers,shareholders, related parties, purchasers during the reporting period, or commitments not fulfilled by the end ofthe reporting period.II. Appropriation of Funds for Non-Operating Purposes by Controlling Shareholder and ItsRelated Parties
□ Applicable √ Not applicable
During the reporting period, the Company did not have any funds appropriated for non-operating purposes by thecontrolling shareholder and its related parties.III. External Guarantee in Violation of Prescribed Procedures
□ Applicable √ Not applicable
During the reporting period, there was no external guarantee in violation of prescribed procedures.
IV. Engagement and Dismissal of Accounting FirmWhether the Semi-annual Report has been audited
□ Yes √ No
The Semi-annual Report of the Company has not been audited.V. Explanation by the Board of Directors of the “Non-standard Audit Report” for theReporting Period Issued by the Accounting Firm
□ Applicable √ Not applicable
VI. Explanation by the Board of Directors of the “Non-standard Audit Report” of the PreviousYear
□ Applicable √ Not applicable
VII. Matters relating to Bankruptcy and Restructuring
□ Applicable √ Not applicable
No bankruptcy and restructuring-related matters of the Company happened during the reporting period.VIII. LitigationsMaterial litigations and arbitrations
□ Applicable √ Not applicable
There were no material litigations or arbitrations during the reporting period.Other litigations
√ Applicable □ Not applicable
| Basic information of the litigation (arbitration) | Amount involved (RMB 10,000) | Whether projected liabilities were incurred | Litigation (arbitration) progress | Hearing results and influences of the litigation (arbitration) | Execution of judgment of the litigation (arbitration) | Date of disclosure | Index of disclosure |
| Summary of closed litigation and arbitration | 4,311.03 | Projected liabilities of RMB30,300 | Case closed | Case closed | Case closed | / | / |
| Summary of unclosed litigation and arbitration | 6,265.34 | No | In execution | In execution | In execution | / | / |
IX. Penalty and Rectification
□ Applicable √ Not applicable
X. Integrity Records of the Company and its Controlling Shareholder and Actual Controller
□ Applicable √ Not applicable
XI. Material Related Party Transaction
1. Related party transactions relating to daily operations
√ Applicable □ Not applicable
| Party of related party transaction | Related relationship | Type of related party transaction | Content of related party transaction | Pricing rules of related party transaction | Price of related party transactions | Amount of related party transaction (RMB10,000) | Proportion in the amount of similar transactions | Approved transaction limit (RMB10,000) | Whether to outstrip the approved limit | Settlement of related party transaction | Available market prices for similar transactions | Date of disclosure | Index of disclosure |
| Deng Yingzhong, Deng Guanbiao, Deng Guanjie | Actual controller of the Company | Lease | Rental | Market fair price | Market fair price | 175．79 | 14.84% | 175.79 | No | Transfer settlement | Market fair price | December 1,2021 | 2021-145 |
| Deng Yingzhong, | Actual controller of | Lease | Rental | Market fair price | Market fair | 0.65 | 0.05% | Yes | Transfer settlement | Market fair price |
| Deng Guanbiao, Deng Guanjie | the Company | price | ||||||||||
| Total | -- | -- | 176.44 | -- | 175.79 | -- | -- | -- | -- | -- | ||
| Details of returns of large sales | Not applicable | |||||||||||
| Where the total amount of daily related-party transactions occurred in the current period is estimated by category, actual performance during the reporting period (if any) | Among the excessive amounts of related party transactions in the reporting period, RMB 6,500 is for renting properties from the related party. They fall within the authority of the Chairman of the Company and can be implemented without the approval of the Board of Directors. | |||||||||||
| Reason(s) for a large difference between the transaction price and the market reference price (if applicable) | Exercise at fair price | |||||||||||
2. Related party transactions relating to acquisition and sale of assets or equity
□ Applicable √ Not applicable
During the reporting period, there was no related party transaction relating to acquisition and sale of assets or equity.
3. Related party transactions relating to joint outbound investment
□ Applicable √ Not applicable
During the reporting period, there was no related party transaction relating to joint outbound investment.
4. Related party transactions relating to creditor’s rights and debts
□ Applicable √ Not applicable
During the reporting period, there was no related party transactions relating to creditor’s rights and debts.
5. Transactions with related party financial companies
□ Applicable √ Not applicable
The Company did not have deposit, loan, credit or other financial business transactions with financial companiesthat have related relationship and the associated related parties.
6. Transactions between financial companies controlled by the Company and related parties
□ Applicable √ Not applicable
Financial companies controlled by the Company did not have deposit, loan, credit or other financial businesstransactions with related parties.
7. Other significant related party transactions
□ Applicable √ Not applicable
During the reporting period, there were no other significant related party transactions.
XII. Significant Contracts and Their Performance
1. Custody, contracting and leasing matters
(1) Custody
□ Applicable √ Not applicable
During the reporting period, there was no custody.
(2) Contracting
□ Applicable √ Not applicable
During the reporting period, there was no contracting.
(3) Leasing
√ Applicable □ Not applicable
Description of leasing mattersOn November 30, 2021, the Company convened the 12th meeting of the fifth session of the Board of Directors andthe 7th meeting of the fifth session of the Board of Supervisors, on which the Proposal on Daily Related PartyTransactions was reviewed and approved. The Board of Directors of the Company agreed that the Company and itswholly-owned subsidiary, Zhongshan Zhongshun Trading Co., Ltd., leased the real estate jointly owned by Mr.Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie, the actual controllers of the Company. The lease termis from January 1, 2022 to December 31, 2023, and the total rent involved is RMB 7,031,600. During the deliberationof this proposal, the Company’s three related directors, Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. DengGuanjie, withdrew from voting, while the remaining six attending directors unanimously approved this related partytransaction. The three independent directors of the Company respectively issued Prior Approval Opinions andOpinions of Independent Directors on the proposal, agreeing to submit the proposal to the Board of Directors fordeliberation and agreeing to the related party transaction.Projects whose profits or losses brought to the Company reached more than 10% of the total profits of the Companyduring the reporting period
□ Applicable √ Not applicable
During the reporting period, there were no leasing projects whose profits or losses brought to the Company reachedmore than 10% of the total profits of the Company during the reporting period.
2. Material guarantee
√ Applicable □ Not applicable
Unit: RMB10,000
| External guarantee of the Company and subsidiaries (excluding guarantee for subsidiaries) | ||||||||||
| Name of guarantee object | Disclosure date of relevant announcement on guarantee limit | Guarantee limit | Actual date of occurrence | Actual guarantee amount | Guarantee type | Collateral (if any) | Counter guarantee (if any) | Guarantee period | Whether it has been completed | Whether it is related party guarantee |
| Wuhan Jie Rou E-commerce Co., Ltd. | November 30,2021 | 15,000 | September 26,2022 | 8,860 | Joint and several liability guarantee | None | Joint and several liability guarantee | 2022.9.26-2023.11.3 | No | No |
| Shanghai Junmeng E-commerce Co., Ltd. | November 30,2021 | 23,500 | September 27,2022 | 9,000 | Joint and several liability guarantee | None | Joint and several liability guarantee | 2022.9.27-2023.11.4 | No | No |
| Total approved amount of external guarantee during the reporting period (A1) | 0 | Total actual amount of external guarantee during the reporting period (A2) | 17,860 | |||||||
| Total approved amount of external guarantee at the end of the reporting period (A3) | 38,500 | Total actual guarantee balance at the end of the reporting period (A4) | 17,860 | |||||||
| Guarantee of the Company for subsidiaries | ||||||||||
| Name of guarantee object | Disclosure date of relevant announcement on guarantee limit | Guarantee limit | Actual date of occurrence | Actual guarantee amount | Guarantee type | Collateral (if any) | Counter guarantee (if any) | Guarantee period | Whether it has been completed | Whether it is related party guarantee |
| Zhongshan Trading | November 30, 2021 | 15,000 | November 23, 2022 | 4,984.15 | Joint and several liability guarantee | None | None | 2022.11.23-2026.11.9 | No | No |
| Zhongshan Trading | November 23, 2022 | 20,000 | Janurary 30, 2023 | 17,159.41 | Joint and several liability | None | None | 2023.1.30-2029.1.29 | No | No |
| guarantee | ||||||||||
| Zhongshan Trading | November 23, 2022 | 20,000 | June 14, 2023 | 0 | Joint and several liability guarantee | None | None | 2023.6.14-2027.4.19 | No | No |
| Zhongshan Trading | November 23, 2022 | 10,000 | May 25, 2023 | 0 | Joint and several liability guarantee | None | None | 2023.5.25-2027.4.18 | No | No |
| Zhongshan Trading | November 23, 2022 | 50,000 | April 26, 2023 | 6,000 | Joint and several liability guarantee | None | None | 2023.4.26-2028.12.31 | No | No |
| Zhongshan Trading | November 23, 2022 | 5,000 | April 27, 2023 | 5,000 | Joint and several liability guarantee | None | None | 2023.4.27-2027.4.27 | No | No |
| Zhongshan Trading | November 30, 2021 | 30,000 | December 8, 2022 | 13,000 | Joint and several liability guarantee | None | None | 2022.12.8-2025.12.31 | No | No |
| Zhongshan Trading | November 30, 2021 | 15,000 | December 23, 2022 | 8,472.38 | Joint and several liability guarantee | None | None | 2022.12.23-2026.9.22 | No | No |
| Zhongshan Trading | November 30, 2021 | 20,000 | May 17, 2022 | 20,000 | Joint and several liability guarantee | None | None | 2022.5.17-2030.2.27 | No | No |
| Zhongshan Trading | November 30, 2021 | 20,000 | August 18, 2022 | 1,000 | Joint and several liability guarantee | None | None | 2022.8.18-2030.12.31 | No | No |
| Jiangmen C&S | November 30, 2021 | 12,000 | November 23, 2022 | 11,770.75 | Joint and several liability guarantee | None | None | 2022.11.23-2026.11.7 | No | No |
| Jiangmen | November | 15,000 | January | 3,339. | Joint | None | None | 2023.1.17- | No | No |
| C&S | 23, 2022 | 17, 2023 | 59 | and several liability guarantee | 2026.11.29 | |||||
| Jiangmen C&S | November 23, 2022 | 15,000 | June 14, 2023 | 0 | Joint and several liability guarantee | None | None | 2023.6.14-2027.4.19 | No | No |
| Jiangmen C&S | November 23, 2022 | 10,000 | May 25, 2023 | 2,376.87 | Joint and several liability guarantee | None | None | 2023.5.25-2027.4.18 | No | No |
| Jiangmen C&S | December 5, 2019 | 5,000 | December 23, 2020 | 0 | Joint and several liability guarantee | None | None | 2020.12.23-2025.12.23 | No | No |
| Yunfu C&S | December 05, 2019 | 8,000 | April 14, 2020 | 0 | Joint and several liability guarantee | None | None | 2020.4.14-2028.4.14 | No | No |
| Yunfu C&S | November 30, 2022 | 15,000 | June 15, 2023 | 3,600 | Joint and several liability guarantee | None | None | 2023.6.15-2027.4.19 | No | No |
| Yunfu C&S | November 30, 2021 | 20,000 | November 23, 2022 | 20,000 | Joint and several liability guarantee | None | None | 2022.11.23-2026.11.7 | No | No |
| Yunfu C&S | November 23, 2022 | 7,000 | January 17, 2023 | 4,477.55 | Joint and several liability guarantee | None | None | 2023.1.17-2026.11.29 | No | No |
| Yunfu C&S | November 23, 2022 | 10,000 | May 25, 2023 | 1,530.37 | Joint and several liability guarantee | None | None | 2023.5.25-2027.4.18 | No | No |
| Hubei C&S | November 23, 2022 | 10,000 | February 13, 2023 | 0 | Joint and several liability | None | None | 2023.2.13-2030.11.2 | No | No |
| guarantee | ||||||||||
| Dazhou C&S | November 23, 2022 | 10,000 | February 13, 2023 | 0 | Joint and several liability guarantee | None | None | 2023.2.13-2029.11.2 | No | No |
| Jiangmen C&S, Yunfu C&S and Hubei C&S | November 30, 2021 | 22,000 | January 17, 2022 | 0 | Joint and several liability guarantee | None | None | 2022.1.17-2026.1.17 | No | No |
| C&S Hong Kong, Zhong Shun International, Macao C&S | November 30, 2021 | 36,377 | November14, 2022 | 6,829.59 | Joint and several liability guarantee | None | None | 2022.11.14-2027.7.31 | No | No |
| C&S Hong Kong and Zhong Shun International | November 20, 2020 | 18,844.49 | September8, 2021 | 0 | Joint and several liability guarantee | None | None | 2021.9.8-2024.9.8 | No | No |
| C&S Hong Kong and Macao C&S | November 20, 2020 | 37,132 | March 17, 2021 | 2,578.25 | Joint and several liability guarantee | None | None | 2021.3.17-2025.12.31 | No | No |
| C&S Hong Kong, Zhong Shun International, Macao C&S | November 23, 2022 | 46,198.79 | January 20, 2023 | 24,298.11 | Joint and several liability guarantee | None | None | 2023.1.20-2026.1.20 | No | No |
| C&S Hong Kong | November 30, 2021 | 7,275.4 | November 17, 2022 | 0 | Joint and several liability guarantee | None | None | 2022.11.17-2029.10.28 | No | No |
| Macao C&S | November 30, 2021 | 7,275.4 | November 17, 2022 | 0 | Joint and several liability guarantee | None | None | 2022.11.17-2029.10.28 | No | No |
| C&S Hong Kong and Macao C&S | December 5, 2019 | 17,460.96 | March 27, 2020 | 0 | Joint and several liability guarantee | None | None | 2020.3.27-2025.8.22 | No | No |
| C&S Hong | November | 21,826.2 | March 29, | 2,122. | Joint | None | None | 2023.3.29- | No | No |
| Kong and Zhong Shun International | 23, 2022 | 2023 | 87 | and several liability guarantee | 2026.3.29 | |||||
| Macao C&S | December 15, 2017 | 8,002.94 | March 23, 2018 | 1,202.74 | Joint and several liability guarantee | None | None | 2018.3.23-2024.9.23 | No | No |
| Macao C&S | December 15, 2017 | 7,000 | August 15, 2018 | 1,499.84 | Joint and several liability guarantee | None | None | 2018.8.15-2025.8.15 | No | No |
| Macao C&S | November 20, 2020 | 21,826.2 | November 12, 2021 | 13,601.25 | Joint and several liability guarantee | None | None | 2021.11.12-2024.10.20 | No | No |
| C&S Hong Kong | November 30, 2021 | 14,550.8 | September 1, 2022 | 3,321.47 | Joint and several liability guarantee | None | None | 2022.9.1-2024.9.1 | No | No |
| C&S Hong Kong and Zhong Shun International | November 23, 2022 | 21,826.2 | April 24, 2023 | 0 | Joint and several liability guarantee | None | None | 2023.4.24-2026.2.22 | No | No |
| Total approved amount of guarantee for subsidiaries during the reporting period (B1) | 286,851.19 | Total actual amount of guarantee for subsidiaries during the reporting period (B2) | 69,904.77 | |||||||
| Total approved amount of guarantee for subsidiaries at the end of the reporting period (B3) | 629,596.38 | Total actual guarantee balance to subsidiaries at the end of the reporting period (B4) | 178,165.19 | |||||||
| Guarantee of subsidiaries to subsidiaries | ||||||||||
| Name of guarantee object | Disclosure date of relevant announcement on guarantee limit | Guarantee limit | Actual date of occurrence | Actual guarantee amount | Guarantee type | Collateral (if any) | Counter guarantee (if any) | Guarantee period | Whether it has been completed | Whether it is related party guar |
| antee | ||||
| Total amount of the Company’s guarantee (the sum of the first three items) | ||||
| Total approved amount of guarantee during the reporting period (A1 + B1 + C1) | 286,851.19 | Total actual amount of guarantee during the reporting period (A2 + B2 + C2) | 87,764.77 | |
| Total approved amount of guarantee at the end of the reporting period (A3 + B3 + C3) | 668,096.38 | Total actual guarantee balance at the end of the reporting period (A4+B4+C4) | 196,025.19 | |
| Proportion of the total actual amount of guarantee (A4 + B4 + C4) in the net assets of the Company | 37.57% | |||
| Wherein: | ||||
| Balance of guarantee for shareholders, actual controllers and their related parties (D) | 0 | |||
| Balance of debt guarantee provided directly or indirectly for objects whose asset-liability ratio exceeds 70% (E) | 75,615.94 | |||
| Amount of guarantees in excess of 50% of net assets (F) | 0 | |||
| Total amount of the above three guarantees (D + E + F) | 75,615.94 | |||
| Description of situations that the guarantee liability has occurred or there is evidence showing that the Company may be jointly and severally liable for undue guarantee contracts during the reporting period (if any) | None | |||
| Proportion of the total actual amount of guarantee (A4 + B4 + C4) in the net assets of the Company | No | |||
Detailed description on the guarantees with different types: None
3. Entrusted wealth management
√ Applicable □ Not applicable
Unit: RMB10,000
| Specific type | Source of entrusted wealth management funds | Incurred amount of entrusted wealth management | Undue balance | Amount overdue but not recovered | Amount overdue but not recovered with impairment having been accrued |
| Wealth management product of securities company | Self-owned fund | 54,060 | 53,060.7 | 0 | 0 |
| Total | 4,500 | 53,060.7 | 0 | 0 | |
Explanation of high-risk entrusted wealth management with large individual amount or low safety, poor liquidityand no principal guarantee
□ Applicable √ Not applicable
Entrusted wealth management is expected to fail to recover the principal or there are other circumstances that maylead to impairment
□ Applicable √ Not applicable
4.Other significant contracts
□ Applicable √ Not applicable
There were no other significant contracts during the reporting period.XIII. Other Significant Events
□ Applicable √ Not applicable
XIV. Significant Events of Subsidiaries of the Company
√ Applicable □ Not applicable
1. External investments
(1) In February 2023, in order to further advance the construction and operation of Sichuan Dazhou project, C&S(Dazhou) Paper Co., Ltd., a subsidiary of the Company, acquired 100% equities of Quxian Jiezhu Construction andDevelopment Co., Ltd. Quxian Jiezhu Construction and Development Co., Ltd. completed the change registrationwith the industrial and commercial department in March 2023, with a registered capital of RMB10 million after thechange.
(2) In June 2023, the Company set up the Guangdong Laotongxue Information Technology Co., Ltd. in Zhongshan，Guangdong.
2. Changes of industrial and commercial registration
(1) The subsidiaries Hubei C&S, Dazhou C&S, and Yunfu C&S changed their respective legal representatives dueto business development needs. The subsidiaries completed the change procedures with relevant industrial andcommercial departments and obtained the new business licenses during the reporting period.
(2) In April 2023, the subsidiary Zhongshun Healthy Life completed the cancellation procedures due to businessdevelopment needs
(3) In June 2023, the subsidiary Hubei C&S changed its business scope due to business development needs.
Section VII Changes in Shareholding and Information of
ShareholdersI. Changes in Share Capital
1. Changes in shares
Unit: share
| Before change | Increase/decrease (+, -) of this change | After change | |||||||
| Number | Percentage | New shares issued | Bonus shares | Shares transferred from surplus reserve | Others | Subtotal | Number | Percentage | |
| I. Shares subject to selling restrictions | 19,726,128 | 1.50% | 20,961,500 | -1,793,172 | 19,168,328 | 38,894,456 | 2.91% | ||
| 1. Shares held by the state | |||||||||
| 2. Shares held by state-owned legal person | |||||||||
| 3. Shares held by other domestic shareholders | 19,394,703 | 1.47% | 20,861,500 | -1,710,316 | 19,151,184 | 38,545,887 | 2.89% | ||
| Including: Shares held by domestic legal persons | |||||||||
| Shares held by domestic natural persons | 19,394,703 | 1.47% | 20,861,500 | -1,710,316 | 19,151,184 | 38,545,887 | 2.89% | ||
| 4. Shares held by foreign shareholders | 331,425 | 0.03% | 100,000 | -82,856 | 17,144 | 348,569 | 0.03% | ||
| Including: Shares held by foreign legal persons | |||||||||
| Shares held by foreign natural persons | 331,425 | 0.03% | 100,000 | -82,856 | 17,144 | 348,569 | 0.03% | ||
| II. Shares without selling restrictions | 1,295,184,477 | 98.50% | 752,631 | -281,264 | 471,367 | 1,295,655,844 | 97.09% | ||
| 1. RMB-denominated ordinary shares | 1,295,184,477 | 98.50% | 752,631 | -281,264 | 471,367 | 1,295,655,844 | 97.09% | ||
| 2. Domestic listed foreign shares | |||||||||
| 3. Overseas listed foreign shares | |||||||||
| 4. Others | |||||||||
| III. Total number of shares | 1,314,910,605 | 100.00% | 21,714,131 | -2,074,436 | 19,639,695 | 1,334,550,300 | 100.00% |
Explanation on changes in shares
√ Applicable □ Not applicable
1. During the reporting period, vesting incentive recipients of first-granted stock options under the 2018 StockOption and Restricted Stock Incentive Plan exercised the rights of 752,630 shares, and recipients of reserved stockoptions exercised the rights of 1 share; a total of 752,631 shares were exercised. As a result, the Company’s totalshare capital increased by 752,631 shares.
2. During the reporting period, in the third unlock period for the reserved restricted shares awarded under the 2018Stock Option and Restricted Stock Incentive Plan, eight incentive recipients lost the incentive qualification sincethey left the Company prior to the unlock; meanwhile, seven incentive recipients could only unlock a proportion ofthe shares since they passed the performance appraisal but failed to get a full mark. For the involved 15 incentiverecipients due to the foregoing reasons, a total of 178,536 restricted shares needed to be repurchased and canceled.As of February 2023, the repurchase and cancellation procedures had been completed for the aforesaid restrictedshares. As a result, the Company’s total share capital decreased by 178,536 shares.
3. In March 2023, the Company completed the registration procedures for the first-granted restricted shares underthe 2022 Stock Option and Restricted Stock Incentive Plan under the review and confirmation of the Shenzhen StockExchange and Shenzhen Branch of China Securities Depository and Clearing Corporation Limited. A total of20,961,500 shares were awarded to 617 recipients. After the registration was completed, the Company’s total sharecapital increased by 20,961,500 shares.
4. In May 2023, the Company deregistered 1,895,900 shares in its specialized repurchase securities account,accounting for 0.14% of its total share capital before the deregistration. Upon the completion of this deregistration,there are 24,863,087 shares in its specialized repurchase securities account, and the Company’s total share capitaldecreased by 1,895,900 shares accordingly.Approval of changes in shares
√ Applicable □ Not applicable
1. The Board of Directors’ handling of the exercise matters for the third exercise period of first-granted and restrictedstock options under the 2018 Stock Option and Restricted Stock Incentive Plan has been authorized by the 2019First Extraordinary General Meeting, and reviewed and approved by the 14th meeting of the Fifth Board of Directors,the 9th meeting of the Fifth Board of Supervisors, the 17th meeting of the Fifth Board of Directors, and the 12thmeeting of the Fifth Board of Supervisors.
2. The Board of Directors’ handling of the repurchase and deregistration matters for the third unlock of reservedrestricted shares under the 2018 Stock Option and Restricted Stock Incentive Plan has been reviewed and approved
by the 17th meeting of the Fifth Board of Directors, the 12th meeting of the Fifth Board of Supervisors, and the2022 Fourth Extraordinary General Meeting.
3. The Board of Directors’ handling of the registration matters for the first-granted restricted shares under the 2022Stock Option and Restricted Stock Incentive Plan has been authorized by the 2023 First Extraordinary GeneralMeeting and reviewed and approved by the 19th meeting of the Fifth Board of Directors and 14th meeting of theFifth Board of Supervisors.
4. The Board of Directors’ handling of the cancellation matters for partial shares in the specialized repurchasesecurities account has been reviewed and approved by the 21st meeting of the Fifth Board of Directors, the 16thmeeting of the Fifth Board of Supervisors, and 2022 Annual General Meeting of Shareholders.Transfer of title of changed shares
√ Applicable □ Not applicable
Refer to “Explanation on changes in shares”.Implementation of share repurchase
□ Applicable √ Not applicable
Implementation of share repurchase by centralized bidding
□ Applicable √ Not applicable
Impact of share changes on basic earnings per share and diluted earnings per share, net assets per share attributableto ordinary shareholders of the Company, and other financial indicators in last year and the latest period
√ Applicable □ Not applicable
Given that the Company's total share capital has changed during the reporting period, the basic earnings per shareand diluted earnings per share, net assets per share attributable to ordinary shareholders of the Company, and otherfinancial indicators in last year and the latest period were diluted accordingly.Other contents considered necessary by the Company or required to be disclosed by the securities regulatoryauthority
□ Applicable √ Not applicable
2. Changes in shares subject to selling restrictions
√ Applicable □ Not applicable
Unit: share
| Shareholder’s name | Number of shares subject to selling restrictions at the beginning of the period | Number of shares released from selling restrictions during the period | Increase in shares subject to selling restrictions during the period | Number of shares subject to selling restrictions at the end of the year | Reason for Selling restrictions | Date of release from selling restrictions |
| Deng Yingzhong | 5,064,608 | 5,064,608 | Lock-up shares of senior management | Selling restrictions were released according to relevant regulations on the shareholding of directors, supervisors and senior management. | ||
| Liu Peng | 45,975 | 45,975 | Lock-up shares of senior management | |||
| Deng Guanbiao | 3,718,105 | 929,526 | 2,788,579 | Lock-up shares of senior management | ||
| Deng Guanjie | 900,730 | 225,183 | 675,547 | Lock-up shares of senior management | ||
| Zhang Yang | 157,500 | 157,500 | Lock-up shares of senior management | |||
| Yue Yong | 7,248,930 | 7,248,930 | Lock-up shares of senior management | |||
| Zhao Ming | 26,250 | 26,250 | Lock-up shares of senior management | |||
| Lin Tiande | 238,141 | 238,141 | Lock-up shares of senior management | |||
| Dong Ye | 197,794 | 197,794 | Lock-up shares of senior management | |||
| Chen Haiyuan | 12,675 | 12,675 | Lock-up shares of senior management | |||
| Zhang Gao | 32,000 | 5,500 | 37,500 | Lock-up shares of senior management | ||
| Other shareholders | 1,904,884 | 465,427 | 1,439,457 | Lock-up shares of senior management; the increase in restricted shares is due to the locking of shares upon resignation. | Selling restrictions were released according to relevant regulations on the shareholding of directors, supervisors and senior management. | |
| Equity incentive recipients | 178,536 | 178,536 | 20,961,500 | 20,961,500 | The Company awarded 20,961,500 restricted shares to incentive recipients under the first grant in accordance with the 2022 Stock Option and Restricted Stock Incentive Plan, which will be unlocked in three periods. | The Company handled and completed the cancellation procedures in February 2023 since they did not meet the unlocking conditions prescribed in the 2018 Stock Option and Restricted Stock Incentive Plan. The unlocking is implemented according to 2022 Stock Option and Restricted Stock Incentive Plan. |
| Total | 19,726,128 | 1,798,672 | 20,967,000 | 38,894,456 | -- | -- |
II. Issuance and Listing of Securities
□ Applicable √ Not applicable
III. Total Number of Shareholders and Shareholding
Unit: share
| Total number of ordinary shareholders as at the end of the reporting period | 113,490 | Total number of preferred shareholders whose voting rights were resumed at the end of the reporting period (if any) (see Note VIII) | 0 | |||||
| Shareholdings of ordinary shareholders with more than 5% or the top 10 ordinary shareholders | ||||||||
| Name of shareholder | Nature of shareholder | Shareholding percentage (%) | Number of ordinary shares held at the end of the reporting period | Increase/decrease during the reporting period | Number of ordinary shares held subject to selling restrictions | Number of ordinary shares held without selling restrictions | Pledged, marked or frozen | |
| Share status | Number of shares | |||||||
| Guangdong Zhongshun Paper Group Co., Ltd. | Domestic non-state-owned legal person | 28.26% | 377,195,570 | 377,195,570 | ||||
| Chung Shun Co. | Foreign legal person | 19.97% | 266,504,789 | 266,504,789 | ||||
| Hong Kong Securities Clearing Co., Ltd. | Foreign legal person | 3.83% | 51,148,846 | Share increase | 51,148,846 | |||
| Ernest Partners LLC — Client funds | Foreign legal person | 0.90% | 11,991,400 | Share increase | 11,991,400 | |||
| Yue Yong | Domestic natural person | 0.81% | 10,765,241 | Share increase | 8,348,930 | 2,416,311 | ||
| Deng Yingzhong | Domestic natural person | 0.51% | 6,752,811 | 5,064,608 | 1,688,203 | |||
| Guohua Life — Xingyi Traditional No.2 | Others | 0.47% | 6,224,600 | Share increase | 6,224,600 | |||
| # Zhongshan Xinda Investment Management Co., Ltd. | Domestic non-state-owned legal person | 0.46% | 6,123,636 | 6,123,636 | ||||
| ICBC — CSI Main Consumer Staples ETF | Others | 0.38% | 5,019,699 | Share increase | 5,019,699 | |||
| ABC — CSI Smallcap 500 ETF | Others | 0.33% | 4,436,889 | Share reduction | 4,436,889 | ||||
| Strategic investors or general legal persons becoming top ten shareholders due to private placement of new shares (if any) (see Note 3) | Not applicable | ||||||||
| Description on the related relationship or parties acting-in-concert arrangements among the above shareholders | 1. Among the top ten shareholders mentioned above, Mr. Deng Yingzhong is among the actual controllers of the Company; Guangdong Zhongshun Paper Group Co., Ltd. and Chung Shun Co. are the enterprises controlled by actual controllers of the Company, i.e. Mr. Deng Yingzhong, Deng Guanbiao and Deng Guanjie. That is, Guangdong Zhongshun Paper Group Co., Ltd. and Chung Shun Co. are related parties. Mr. Yue Yong is an incumbent senior manager of the Company. 2. Except for the above situation, it is unknown to the Company whether there is related party relationship among other shareholders, or whether there is acting-in-concert among other shareholders. | ||||||||
| Description on entrusting/being entrusted with voting rights and waver of voting rights by the aforementioned shareholders: | Not applicable | ||||||||
| Description on special repurchase account among top 10 shareholders (if any) (see note 10) | There is a special repurchase account “C&S Paper Special Repurchase Securities Account” among the top 10 shareholders. As of the end of the reporting period, this repurchase account held 24,863,087 shares, with a shareholding ratio of 1.86%. Pursuant to relevant regulations, it is not included in the list of top 10 shareholders. | ||||||||
| Shareholdings of top 10 shareholders not subject to selling restrictions | |||||||||
| Name of shareholder | Number of shares held not subject to selling restrictions | Type of shares | |||||||
| Type of shares | Number | ||||||||
| Guangdong Zhongshun Paper Group Co., Ltd. | 377,195,570 | RMB-denominated ordinary shares | 377,195,570 | ||||||
| Chung Shun Co. | 266,504,789 | RMB-denominated ordinary shares | 266,504,789 | ||||||
| Hong Kong Securities Clearing Co., Ltd. | 51,148,846 | RMB-denominated ordinary shares | 51,148,846 | ||||||
| Ernest Partners LLC — Client funds | 11,991,400 | RMB-denominated ordinary shares | 11,991,400 | ||||||
| Guohua Life — Xingyi Traditional No.2 | 6,224,600 | RMB-denominated ordinary shares | 6,224,600 | ||||||
| # Zhongshan Xinda Investment Management Co., Ltd. | 6,123,636 | RMB-denominated ordinary shares | 6,123,636 | ||||||
| ICBC — CSI Main Consumer Staples ETF | 5,019,699 | RMB-denominated ordinary shares | 5,019,699 | ||||||
| ABC — CSI Smallcap 500 ETF | 4,436,889 | RMB-denominated ordinary shares | 4,436,889 | ||||||
| # Chen Ruiqiang | 3,667,600 | RMB-denominated ordinary shares | 3,667,600 | ||||||
| Yuan Xuemei | 3,592,000 | RMB-denominated ordinary shares | 3,592,000 | ||||||
| Description on the related relationship or parties | 1. Among the top ten shareholders mentioned above, Guangdong Zhongshun Paper Group Co., Ltd. and Chung Shun Co. are the enterprises controlled by actual controllers of the Company, i.e. Mr. Deng Yingzhong, Mr. Deng | ||||||||
| acting-in-concert among the top ten ordinary shareholders without selling restrictions and between the top ten ordinary shareholders without selling restrictions and the top ten ordinary shareholders | Guanbiao and Mr. Deng Guanjie. That is, Guangdong Zhongshun Paper Group Co., Ltd. and Chung Shun Co. are related parties. 2. Except for the above situation, it is unknown to the Company whether there is related party relationship among other shareholders, or whether there is acting-in-concert among other shareholders. |
| Description on the top 10 ordinary shareholders’ participation in margin trading and securities lending business (if any) (see Note 4) | 1. Shareholder Zhongshan Xinda Investment Management Co., Ltd. holds 6,120,602 shares through a client credit transaction guarantee securities account. 2. Shareholder Chen Ruiqiang holds 843, 500 shares through a client credit transaction guarantee securities account. |
Whether the top ten ordinary shareholders and the top ten shareholders without selling restrictions conducted theagreed repurchase transaction during the reporting period
□ Yes √ No
The Company’s top ten ordinary shareholders and top ten ordinary shareholders without selling restrictions didnot conduct agreed repurchase transactions during the reporting period.
IV. Changes in Shareholding of Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
| Name | Position | Position status | Number of shares held at the beginning of the year | Increase of shares during the year | Decrease of shares during the year | Number of shares held at the end of the year | Number of shares subject to selling restrictions granted at the beginning of the period | Number of shares subject to selling restrictions granted in the period | Number of shares subject to selling restrictions granted at the end of the period |
| Deng Yingzhong | Director | Incumbent | 6,752,811 | 6,752,811 | |||||
| Liu Peng | Chairman, President | Incumbent | 61,300 | 1,500,000 | 1,561,300 | 1,500,000 | 1,500,000 | ||
| Deng Guanbiao | Vice Chairman | Incumbent | 3,718,105 | 3,718,105 | |||||
| Deng Guanjie | Vice Chairman | Incumbent | 900,730 | 900,730 | |||||
| Zhang Yang | Director, Vice President | Incumbent | 210,000 | 1,500,000 | 1,710,000 | 1,500,000 | 1,500,000 | ||
| Yu Ep. Rachel Jing | Director | Incumbent | |||||||
| Ge Guangrui | Independent Director | Incumbent |
| He Guoquan | Independent Director | Incumbent | |||||||
| Liu Die | Independent Director | Incumbent | |||||||
| Yue Yong | Vice President | Incumbent | 9,665,241 | 1,100,000 | 10,765,241 | 1,100,000 | 1,100,000 | ||
| Zhao Ming | Vice President | Incumbent | 35,000 | 300,000 | 335,000 | 300,000 | 300,000 | ||
| Lin Tiande | Vice President | Incumbent | 317,521 | 500,000 | 817,521 | 500,000 | 500,000 | ||
| Zhang Haijun | Board Secretary, Vice President | Incumbent | 400,000 | 400,000 | 400,000 | 400,000 | |||
| Dong Ye | Chief Financial Officer | Incumbent | 263,725 | 300,000 | 563,725 | 300,000 | 300,000 | ||
| Chen Haiyuan | Chairman of the Board of Supervisors | Incumbent | 16,900 | 16,900 | |||||
| Liang Yongliang | Supervisor | Incumbent | |||||||
| Zhang Gao | Supervisor | Incumbent | 50,000 | 50,000 | |||||
| He Haidi | Independent Director | Resigned | |||||||
| 合计 | -- | -- | 21,991,333 | 5,600,000 | 0 | 27,591,333 | 0 | 5,600,000 | 5,600,000 |
V. Changes of Shareholders and Actual ControllersChanges of controlling shareholders during the reporting period
□ Applicable √ Not applicable
There was no change of the Company’s controlling shareholder during the reporting period.Changes of actual controllers during the reporting period
□ Applicable √ Not applicable
There was no change of the Company’s actual controllers during the reporting period.
Section VIII Particulars of Preference Shares
□ Applicable √ Not applicable
The Company had no preference shares during the reporting period.
Section IX Corporate Bonds
□ Applicable √ Not applicable
Section X Financial Report
I. Audit Report
Whether the Semi-annual Report has been audited
□ Yes √ No
The Semi-annual Report of the Company has not been audited.
II. Financial Statements
Unit of financial statements: RMB
1. Consolidated balance sheet
Prepared by: C&S Paper Co., Ltd.
June 30，2023
Unit: RMB
| Item | June 30, 2023 | January 01, 2023 |
| Current assets: | ||
| Monetary funds | 1,720,158,431.51 | 1,324,787,541.49 |
| Settlement reserve | ||
| Lending to banks and other financial institutions | ||
| Tradable financial assets | ||
| Derivative financial assets | ||
| Notes receivable | 11,389,001.93 | 11,371,092.80 |
| Accounts receivable | 1,173,731,203.91 | 1,084,130,138.51 |
| Accounts receivable financing | ||
| Prepayments | 15,250,103.86 | 15,291,351.73 |
| Premium receivable | ||
| Reinsurance payables | ||
| Reinsurance contract reserves receivable | ||
| Other receivables | 15,877,583.96 | 16,915,272.60 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Financial assets held under resale agreements | ||
| Inventory | 1,241,142,975.60 | 1,911,630,723.55 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 1,157,947,360.89 | 334,959,353.91 |
| Total current assets | 5,335,496,661.66 | 4,699,085,474.59 |
| Non-current assets: | ||
| Loans and advances to customers | ||
| Investments in creditor’s rights | ||
| Investments in other creditor’s rights | ||
| Long-term receivable | ||
| Long-term equity investment | ||
| Investment in other equity instruments | ||
| Other non-current financial assets | ||
| Investment property | 30,983,155.44 | 31,701,597.54 |
| Fixed assets | 2,848,133,013.46 | 3,013,559,312.97 |
| Construction work in progress | 167,569,837.60 | 142,627,123.42 |
| Productive biological assets | ||
| Oil & gas assets | ||
| Right-of-use assets | 15,812,608.61 | 9,758,283.42 |
| Intangible assets | 217,157,292.86 | 214,243,938.48 |
| Development expenses | ||
| Goodwill | 697,790.49 | 64,654.15 |
| Long-term deferred expenses | 12,857,646.13 | 11,771,615.74 |
| Deferred income tax assets | 243,248,809.65 | 206,456,657.06 |
| Other non-current assets | 42,134,678.89 | 5,839,034.34 |
| Total non-current assets | 3,578,594,833.13 | 3,636,022,217.12 |
| Total assets | 8,914,091,494.79 | 8,335,107,691.71 |
| Current liabilities: | ||
| Short-term borrowings | 1,166,297,275.02 | 607,799,222.62 |
| Borrowings from PBC | ||
| Placements from banks and other financial institutions | ||
| Tradable financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 326,437,678.21 | 340,335,111.30 |
| Accounts payable | 809,845,342.70 | 948,550,430.61 |
| Payments received in advance | ||
| Contract liabilities | 55,853,584.65 | 96,581,944.94 |
| Proceeds from financial assets sold under repo | ||
| Customer bank deposits and due to banks and other financial institutions | ||
| Funds from securities trading agency | ||
| Funds from securities underwriting agency | ||
| Employee remuneration payable | 110,494,448.39 | 131,641,447.65 |
| Tax and fees payable | 126,820,329.67 | 53,457,966.35 |
| Other payables | 950,315,173.71 | 807,423,814.13 |
| Including: Interests payable | ||
| Dividends payable | 1,299,613.00 | |
| Transaction fee and commission receivable | ||
| Reinsurance payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 8,708,819.36 | 9,833,661.30 |
| Other current liabilities | 7,191,894.60 | 12,440,147.55 |
| Total current liabilities | 3,561,964,546.31 | 3,008,063,746.45 |
| Non-current liabilities: | ||
| Insurance contract reserves | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preference shares | ||
| Perpetual bonds | ||
| Lease liabilities | 8,675,066.94 | 803,879.30 |
| Long-term payable | ||
| Long-term employee remuneration payable | ||
| Provision | ||
| Deferred income | 90,477,103.14 | 98,419,983.82 |
| Deferred income tax liabilities | 28,007,494.21 | 47,131,368.70 |
| Other non-current liabilities | ||
| Total non-current liabilities | 127,159,664.29 | 146,355,231.82 |
| Total liabilities | 3,689,124,210.60 | 3,154,418,978.27 |
| Owner’s equity: | ||
| Share capital | 1,334,550,300.00 | 1,314,739,745.00 |
| Other equity instruments | ||
| Including: Preference shares | ||
| Perpetual bonds | ||
| Capital reserve | 1,079,098,155.93 | 958,187,997.99 |
| Less: Treasury shares | 793,726,652.23 | 688,930,693.99 |
| Other comprehensive income | ||
| Special reserves | ||
| Surplus reserves | 145,882,689.86 | 145,882,689.86 |
| General reserves | ||
| Retained earnings | 3,451,470,206.87 | 3,448,180,639.62 |
| Total equity attributable to owners of the parent company | 5,217,274,700.43 | 5,178,060,378.48 |
| Equities of minority shareholders | 7,692,583.76 | 2,628,334.96 |
| Total owner’s equity | 5,224,967,284.19 | 5,180,688,713.44 |
| Total liabilities and owners’ equities | 8,914,091,494.79 | 8,335,107,691.71 |
Legal representative: Liu Peng Person in charge of accounting: Dong Ye Person in charge of accountingdepartment: Xu Xianjing
2. Balance sheet of the Parent Company
Unit: RMB
| Item | June 30, 2023 | January 01, 2023 |
| Current assets: | ||
| Monetary funds | 248,234,112.29 | 178,834,482.59 |
| Tradable financial assets | ||
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 100,492,759.26 | 138,731,752.81 |
| Accounts receivable financing | ||
| Prepayments | 3,443,680.59 | 3,400,385.20 |
| Other receivables | 101,551,635.79 | 226,320,859.44 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Inventory | 106,400,059.82 | 230,991,334.76 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 607,900,660.78 | 44,612,167.11 |
| Total current assets | 1,168,022,908.53 | 822,890,981.91 |
| Non-current assets: | ||
| Investments in creditor’s rights | ||
| Investments in other creditor’s rights | ||
| Long-term receivable | ||
| Long-term equity investment | 2,063,642,700.23 | 2,007,893,370.09 |
| Investment in other equity instruments | ||
| Other non-current financial assets | ||
| Investment property | 15,992,500.81 | 16,381,866.55 |
| Fixed assets | 364,026,178.37 | 370,818,585.12 |
| Construction work in progress | 99,460,591.37 | 106,508,939.88 |
| Productive biological assets | ||
| Oil & gas assets | ||
| Right-of-use assets | 6,035,863.64 | 1,870,924.32 |
| Intangible assets | 24,757,576.36 | 24,849,828.82 |
| Development expenses | ||
| Goodwill | ||
| Long-term deferred expenses | 229,008.85 | 286,261.03 |
| Deferred income tax assets | 111,944,828.60 | 103,318,801.75 |
| Other non-current assets | 1,950,184.45 | 2,615,866.30 |
| Total non-current assets | 2,688,039,432.68 | 2,634,544,443.86 |
| Total assets | 3,856,062,341.21 | 3,457,435,425.77 |
| Current liabilities: | ||
| Short-term borrowings | 150,109,375.00 | |
| Tradable financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 45,000,000.00 | 45,000,000.00 |
| Accounts payable | 611,653,864.27 | 830,007,886.80 |
| Payments received in advance | ||
| Contract liabilities | 130,085,518.13 | 117,155,526.88 |
| Employee remuneration payable | 31,262,433.35 | 45,625,887.77 |
| Tax and fees payable | 8,107,054.87 | 2,218,640.09 |
| Other payables | 197,536,171.30 | 69,251,084.96 |
| Including: Interests payable | ||
| Dividends payable | 1,299,613.00 | |
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 2,339,301.07 | 1,745,137.58 |
| Other current liabilities | 16,911,117.36 | 15,230,218.49 |
| Total current liabilities | 1,193,004,835.35 | 1,126,234,382.57 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preference shares | ||
| Perpetual bonds | ||
| Lease liabilities | 4,307,197.55 | 324,786.03 |
| Long-term payable | ||
| Long-term employee remuneration payable |
| Provision | ||
| Deferred income | 2,837,088.65 | 3,440,764.37 |
| Deferred income tax liabilities | 13,991,614.43 | |
| Other non-current liabilities | ||
| Total non-current liabilities | 7,144,286.20 | 17,757,164.83 |
| Total liabilities | 1,200,149,121.55 | 1,143,991,547.40 |
| Owner’s equity: | ||
| Share capital | 1,334,550,300.00 | 1,314,739,745.00 |
| Other equity instruments | ||
| Including: Preference shares | ||
| Perpetual bonds | ||
| Capital reserve | 1,002,791,189.93 | 881,881,031.99 |
| Less: Treasury shares | 793,726,652.23 | 688,930,693.99 |
| Other comprehensive income | ||
| Special reserves | ||
| Surplus reserves | 145,761,355.58 | 145,761,355.58 |
| Retained earnings | 966,537,026.38 | 659,992,439.79 |
| Total owner’s equity | 2,655,913,219.66 | 2,313,443,878.37 |
| Total liabilities and owners’ equities | 3,856,062,341.21 | 3,457,435,425.77 |
3. Consolidated income statement
Unit: RMB
| Item | Half-Year of 2023 | Half-Year of 2022 |
| I. Total Operating Income | 4,685,080,565.59 | 4,367,618,113.61 |
| Including: Operating income | 4,685,080,565.59 | 4,367,618,113.61 |
| Interest income | ||
| Gross earned premiums | ||
| Service charge and commission income | ||
| II. Total Operating Cost | 4,613,353,728.19 | 4,116,050,602.19 |
| Including: Operating costs | 3,352,956,520.74 | 2,929,313,606.05 |
| Interest expenses | ||
| Service charge and commission expenses | ||
| Surrender value | ||
| Net compensation expenses | ||
| Net appropriation of insurance reserve | ||
| Policy dividends expenses | ||
| Reinsurance costs | ||
| Tax and surcharges | 30,686,345.75 | 28,804,761.00 |
| Selling expenses | 937,125,533.37 | 874,040,563.35 |
| Administrative expenses | 188,774,711.51 | 180,176,434.40 |
| R&D expenses | 120,281,401.12 | 105,182,287.61 |
| Finance expenses | -16,470,784.30 | -1,467,050.22 |
| Including: Interest fees | 14,597,955.07 | 1,730,495.87 |
| Interest income | 16,545,337.34 | 5,594,433.94 |
| Plus: Other income | 12,741,933.39 | 13,819,921.40 |
| Return on investment (“-” indicates loss) | 1,958,155.36 | 183,493.42 |
| Including: Return on investment in associates and joint ventures |
| Income from the derecognition of financial assets measured at amortized cost | ||
| Exchange gains (“-” indicates loss) | ||
| Gains from net exposure hedging (“-” indicates loss) | ||
| Gains from changes in fair value (“-” indicates loss) | -2,538.48 | |
| Credit impairment losses (“-” indicates loss) | -1,764,899.61 | 1,833,293.54 |
| Asset impairment losses (“-” indicates loss) | -1,417,159.06 | -1,026,689.87 |
| Return on disposal of assets (“-” indicates loss) | -919,217.75 | -1,085,279.69 |
| III. Operating Profit (“-” indicates loss) | 82,325,649.73 | 265,289,711.74 |
| Plus: Non-operating income | 3,592,734.66 | 1,914,737.14 |
| Less: Non-operating expenditure | 3,821,260.22 | 5,989,215.49 |
| IV. Total Profit (“-” indicates total loss) | 82,097,124.17 | 261,215,233.39 |
| Less: Income tax expense | -1,857,299.09 | 33,733,447.46 |
| V. Net Profit (“-” indicates net loss) | 83,954,423.26 | 227,481,785.93 |
| i. Classified by operation continuity | ||
| 1. Net profit from continued operation (“-” indicates net loss) | 83,954,423.26 | 227,481,785.93 |
| 2. Net profit from discontinued operation (“-” indicates net loss) | ||
| ii. Classified by attribution of ownership | ||
| 1. Net profit attributable to owners of the parent company | 84,490,174.46 | 227,639,705.35 |
| 2. Minority shareholders’ profits and losses | -535,751.20 | -157,919.42 |
| VI. Net Amount of Other Comprehensive Income after Tax | ||
| Total other comprehensive after-tax net income attributable to owners of the parent company | ||
| i. Other comprehensive income not able to be reclassified into the profit or loss | ||
| 1. Changes of re-measurement of the defined benefit plan | ||
| 2. Other comprehensive income that cannot be transferred into the profit or loss under equity method | ||
| 3. Changes in fair value of investment in other equity instruments | ||
| 4. Changes in fair value of credit risk of the enterprise | ||
| 5. Others | ||
| ii. Other comprehensive income reclassified into the profit or loss | ||
| 1. Other comprehensive income to be transferred into the profit or loss under equity method | ||
| 2. Changes in fair value of |
| investment in other creditor’s rights | ||
| 3. Financial assets reclassified into other comprehensive income | ||
| 4. Impairment provision for credit of investment in other creditor’s rights | ||
| 5. Reserve of cash flow hedge | ||
| 6. Converted difference in foreign currency financial statements | ||
| 7. Others | ||
| Total other comprehensive after-tax net income attributable to minority shareholders | ||
| VII. Total Comprehensive Income | 83,954,423.26 | 227,481,785.93 |
| Total comprehensive income attributable to owners of the parent company | 84,490,174.46 | 227,639,705.35 |
| Total comprehensive income attributable to minority shareholders | -535,751.20 | -157,919.42 |
| VIII. Earnings per Share: | ||
| i. Basic earnings per share | 0.06 | 0.17 |
| ii. Diluted earnings per share | 0.06 | 0.17 |
For business combinations of the current period under common control, the net profit realized by the combined party before thecombination is: RMB0.00; the net profit realized by the combined party in last period is: RMB0.00.Legal representative: Liu Peng Person in charge of accounting: Dong Ye Person in charge of accountingdepartment: Xu Xianjing
4. Income statement of the Parent Company
Unit: RMB
| Item | Half-Year of 2023 | Half-Year of 2022 |
| I. Operating Income | 787,073,336.16 | 1,040,228,094.53 |
| Less: Operating cost | 728,588,036.18 | 934,724,115.97 |
| Tax and surcharges | 2,754,473.46 | 1,444,145.77 |
| Selling expenses | 73,233,967.35 | 83,355,103.02 |
| Administrative expenses | 77,316,608.59 | 78,567,987.49 |
| R&D expenses | ||
| Finance expenses | -2,290,196.59 | 13,198,563.52 |
| Including: Interest fees | 1,793,163.37 | 372,903.68 |
| Interest income | 2,263,219.06 | 748,450.43 |
| Plus: Other income | 2,521,192.69 | 4,064,729.62 |
| Return on investment (“-” indicates loss) | 456,658,155.36 | 491,911,145.00 |
| Including: Return on investment in associates and joint ventures | ||
| Profits from derecognition of financial assets at amortized cost | ||
| Gains from net exposure hedging (“-” indicates loss) |
| Gains from changes in fair value (“-” indicates loss) | ||
| Credit impairment losses (“-” indicates loss) | -272,095.97 | -513,297.02 |
| Asset impairment losses (“-” indicates loss) | -344,503.16 | -351,354.84 |
| Return on disposal of assets (“-” indicates loss) | -822,150.21 | 136,016.06 |
| II. Operating Profit (“-” indicates loss) | 365,211,045.88 | 424,185,417.58 |
| Plus: Non-operating income | 555,371.30 | 352,230.92 |
| Less: Non-operating expenditure | 638,864.66 | 339,798.68 |
| III. Total Profit (“-” indicates total loss) | 365,127,552.52 | 424,197,849.82 |
| Less: Income tax expense | -22,617,641.28 | -17,504,601.41 |
| IV. Net Profit (“-” indicates net loss) | 387,745,193.80 | 441,702,451.23 |
| i. Net profit from continued operation (“-” indicates net loss) | 387,745,193.80 | 441,702,451.23 |
| ii. Net profit from discontinued operation (“-” indicates net loss) | ||
| V. Net Amount of Other Comprehensive Income after Tax | ||
| i. Other comprehensive income not able to be reclassified into the profit or loss | ||
| 1. Changes of re-measurement of the defined benefit plan | ||
| 2. Other comprehensive income that cannot be transferred into the profit or loss under equity method | ||
| 3. Changes in fair value of investment in other equity instruments | ||
| 4. Changes in fair value of credit risk of the enterprise | ||
| 5. Others | ||
| ii. Other comprehensive income reclassified into the profit or loss | ||
| 1. Other comprehensive income to be transferred into the profit or loss under equity method | ||
| 2. Changes in fair value of investment in other creditor’s rights | ||
| 3. Financial assets reclassified into other comprehensive income | ||
| 4. Impairment provision for credit of investment in other creditor’s rights | ||
| 5. Reserve of cash flow hedge | ||
| 6. Converted difference in foreign currency financial statements | ||
| 7. Others | ||
| VI. Total Comprehensive Income | 387,745,193.80 | 441,702,451.23 |
| VII. Earnings per Share: | ||
| i. Basic earnings per share | ||
| ii. Diluted earnings per share |
5. Consolidated cash flow statement
Unit: RMB
| Item | Half-Year of 2023 | Half-Year of 2022 |
| I. Cash Flows from Operating Activities: | ||
| Cash received from sale of goods or rendering of services | 4,568,336,033.72 | 4,390,764,748.02 |
| Net increase in deposits from customers, banks and non-bank financial institutions | ||
| Net increase in due to central banks | ||
| Net increase in placements from other financial institutions | ||
| Net cash from reinsurance business | ||
| Net increase in deposits and investment of the insured | ||
| Cash obtained from interest, net fee and commission | ||
| Net cash from reinsurance business | ||
| Net increase in placements from banks and other financial institutions | ||
| Net increase in repo service fund | ||
| Net cash from agent securities trading | ||
| Tax rebates | 34,111,023.87 | 9,662,927.59 |
| Cash received related to other operating activities | 60,894,122.70 | 52,109,531.96 |
| Sub-total of cash inflow from operating activities | 4,663,341,180.29 | 4,452,537,207.57 |
| Cash paid for goods purchased and services rendered | 2,737,521,266.54 | 2,526,209,791.30 |
| Net loans and advances to customers | ||
| Net increase in deposits with the central bank, banks and non-bank financial institutions | ||
| Cash paid for claims of direct insurance contracts | ||
| Net increase in placements with banks and non-bank financial institutions | ||
| Cash paid for interest, fee and commission | ||
| Cash paid for dividends of the insured | ||
| Cash paid to and on behalf of employees | 468,248,404.47 | 487,529,479.85 |
| Tax payments | 223,017,991.16 | 268,061,564.38 |
| Cash payments related to other operating activities | 461,107,260.06 | 471,186,646.29 |
| Sub-total of cash outflow from operating activities | 3,889,894,922.23 | 3,752,987,481.82 |
| Net cash flows from operating activities | 773,446,258.06 | 699,549,725.75 |
| II. Cash Flows from Investing Activities: | ||
| Cash from realization of investment | ||
| Cash received from the return on | 1,958,155.36 | 188,274.88 |
| investments | ||
| Net cash received from the disposal of fixed assets, intangible assets, and other long-term assets | 1,571,529.10 | 8,896,516.73 |
| Net amount of cash received from the disposal of subsidiaries and other operating organizations | ||
| Cash received related to other investing activities | 93,001,000.00 | 41,239,541.68 |
| Sub-total of cash inflow from investing activities | 96,530,684.46 | 50,324,333.29 |
| Cash paid for the acquisition and construction of fixed assets, intangible assets, and other long-term assets | 111,139,413.00 | 158,095,067.10 |
| Cash paid for investments | ||
| Net increase in pledged loans | ||
| Net amount of cash paid for acquisition of subsidiaries and other operating organizations | 5,810,000.00 | |
| Cash payments related to other investing activities | 991,607,000.00 | 140,000,000.00 |
| Sub-total of cash outflow from investing activities | 1,108,556,413.00 | 298,095,067.10 |
| Net cash flows from investing activities | -1,012,025,728.54 | -247,770,733.81 |
| III. Cash Flows from Financing Activities: | ||
| Cash received from capital contribution | 141,373,794.42 | 5,345,461.64 |
| Including: Proceeds received by subsidiaries from minority shareholders’ investment | ||
| Cash received from borrowings | 1,277,682,621.27 | 280,500,000.00 |
| Cash received related to other financing activities | 5,651,225.68 | |
| Sub-total of cash inflow from financing activities | 1,424,707,641.37 | 285,845,461.64 |
| Cash paid for repayments of borrowings | 711,767,720.66 | 38,500,000.00 |
| Cash payment for interest expenses and distribution of dividends or profits | 93,781,130.44 | 130,888,041.74 |
| Including: Dividend and profit paid by subsidiaries to minority shareholders | ||
| Cash payments related to other financing activities | 5,805,962.59 | 63,238,785.50 |
| Sub-total of cash outflow from financing activities | 811,354,813.69 | 232,626,827.24 |
| Net cash flows from financing activities | 613,352,827.68 | 53,218,634.40 |
| IV. Effect of Exchange Rate Changes on Cash and Cash Equivalents | 26,248,758.50 | 12,379,862.97 |
| V. Net Increase in Cash and Cash Equivalents | 401,022,115.70 | 517,377,489.31 |
| Plus: Opening balance of cash and cash equivalents | 1,248,898,024.59 | 797,797,675.70 |
| VI. Closing Balance of Cash and Cash Equivalents | 1,649,920,140.29 | 1,315,175,165.01 |
6. Cash flow statement of the Parent Company
Unit: RMB
| Item | Half-Year of 2023 | Half-Year of 2022 |
| I. Cash Flows from Operating Activities: | ||
| Cash received from sale of goods or rendering of services | 978,479,087.94 | 887,041,490.22 |
| Tax rebates | 2,925,548.55 | |
| Cash received related to other operating activities | 683,421,411.07 | 172,267,914.07 |
| Sub-total of cash inflow from operating activities | 1,661,900,499.01 | 1,062,234,952.84 |
| Cash paid for goods purchased and services rendered | 771,865,862.19 | 829,387,529.96 |
| Cash paid to and on behalf of employees | 113,659,917.46 | 121,130,410.24 |
| Tax payments | 12,786,412.51 | 7,266,606.51 |
| Cash payments related to other operating activities | 726,907,864.89 | 293,808,313.12 |
| Sub-total of cash outflow from operating activities | 1,625,220,057.05 | 1,251,592,859.83 |
| Net cash flows from operating activities | 36,680,441.96 | -189,357,906.99 |
| II. Cash Flows from Investing Activities: | ||
| Cash from realization of investment | ||
| Cash received from the return on investments | 456,658,155.36 | 491,911,145.00 |
| Net cash received from the disposal of fixed assets, intangible assets, and other long-term assets | 238,000.00 | 2,780.00 |
| Net amount of cash received from the disposal of subsidiaries and other operating organizations | ||
| Cash received related to other investing activities | 23,001,000.00 | 10,000,000.00 |
| Sub-total of cash inflow from investing activities | 479,897,155.36 | 501,913,925.00 |
| Cash paid for the acquisition and construction of fixed assets, intangible assets, and other long-term assets | 19,855,136.87 | 75,347,277.57 |
| Cash paid for investments | 39,000,000.00 | 500,000.00 |
| Net amount of cash paid for acquisition of subsidiaries and other operating organizations | ||
| Cash payments related to other investing activities | 601,607,000.00 | |
| Sub-total of cash outflow from investing activities | 660,462,136.87 | 75,847,277.57 |
| Net cash flows from investing activities | -180,564,981.51 | 426,066,647.43 |
| III. Cash Flows from Financing Activities: | ||
| Cash received from capital contribution | 141,373,794.42 | 5,347,319.15 |
| Cash received from borrowings | 302,158,073.91 | |
| Cash received related to other financing activities |
| Sub-total of cash inflow from financing activities | 443,531,868.33 | 5,347,319.15 |
| Cash paid for repayments of borrowings | 151,171,765.52 | |
| Cash payment for interest expenses and distribution of dividends or profits | 81,362,154.79 | 129,825,291.73 |
| Cash payments related to other financing activities | 5,154,951.72 | 24,740,404.55 |
| Sub-total of cash outflow from financing activities | 237,688,872.03 | 154,565,696.28 |
| Net cash flows from financing activities | 205,842,996.30 | -149,218,377.13 |
| IV. Effect of Exchange Rate Changes on Cash and Cash Equivalents | 3,144,664.45 | 3,308.96 |
| V. Net Increase in Cash and Cash Equivalents | 65,103,121.20 | 87,493,672.27 |
| Plus: Opening balance of cash and cash equivalents | 178,827,650.10 | 54,273,414.25 |
| VI. Closing Balance of Cash and Cash Equivalents | 243,930,771.30 | 141,767,086.52 |
7. Consolidated statement of changes in owner’s equity
Amount of the current period
Unit: RMB
| Item | Half-Year of 2023 | ||||||||||||||
| Owner’s equity attributable to the Parent Company | Equity of minority shareholders | Total owner’s equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | General reserves | Retained earnings | Others | Subtotal | |||||
| Preference shares | Perpetual bonds | Others | |||||||||||||
| I. Balance at the End of | 1,314,739,745.00 | 958,187,997.99 | 688,930,693.99 | 145,882,689.86 | 3,448,180,639.62 | 5,178,060,378.48 | 2,628,334.96 | 5,180,688,713.44 | |||||||
| Last Year | |||||||||||||||
| Plus: Alternation to accounting policies | |||||||||||||||
| Correction to previous errors | |||||||||||||||
| Business combinations involving enterprises under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Balance at the Beginning of the Year | 1,314,739,745.00 | 958,187,997.99 | 688,930,693.99 | 145,882,689.86 | 3,448,180,639.62 | 5,178,060,378.48 | 2,628,334.96 | 5,180,688,713.44 | |||||||
| III. Changes in the Period (“-” Indicates Decrease) | 19,810,555.00 | 120,910,157.94 | 104,795,958.24 | 3,289,567.25 | 39,214,321.95 | 5,064,248.80 | 44,278,570.75 | ||||||||
| i. Total comprehensive income | 84,490,174.46 | 84,490,174.46 | -535,751.20 | 83,954,423.26 | |||||||||||
| ii. Capital contributed or decreased by owner | 19,810,555.00 | 120,910,157.94 | 104,795,958.24 | 35,924,754.70 | 5,600,000.00 | 41,524,754.70 |
| 1 Ordinary shares contributed by owners | 21,706,455.00 | 119,137,564.99 | 140,844,019.99 | 5,600,000.00 | 146,444,019.99 | ||||||||||
| 2 Capital contributed by owners of other equity instruments | |||||||||||||||
| 3 Share based payments recognized as owner’s equity | 27,557,414.71 | 132,476,680.00 | -104,919,265.29 | -104,919,265.29 | |||||||||||
| 4 Others | -1,895,900.00 | -25,784,821.76 | -27,680,721.76 | ||||||||||||
| iii. Profit distribution | -81,200,607.21 | -81,200,607.21 | -81,200,607.21 | ||||||||||||
| 1 Appropriation of surplus reserves | |||||||||||||||
| 2 Appropriation of general risk reserves | |||||||||||||||
| 3 Distribution to owners (or shareholders) | -81,200,607.21 | -81,200,607.21 | -81,200,607.21 | ||||||||||||
| 4 Others | |||||||||||||||
| iv. Interior balance from owner’s equity |
| 1 Added capital (or share capital) from capital reserves | |||||||||||||||
| 2 Added capital (or share capital) from surplus reserves | |||||||||||||||
| 3 Compensation of loss with surplus reserves | |||||||||||||||
| 4 Retained earnings of carry-over of the defined benefit plan | |||||||||||||||
| 5 Retained earnings of carry-over of other comprehensive income | |||||||||||||||
| 6 Others | |||||||||||||||
| v. Special reserves | |||||||||||||||
| 1 Appropriation for the period | |||||||||||||||
| 2 Use for the |
| period | |||||||||||||||
| vi. Others | |||||||||||||||
| IV. Closing Balance of the Period | 1,334,550,300.00 | 1,079,098,155.93 | 793,726,652.23 | 145,882,689.86 | 3,451,470,206.87 | 5,217,274,700.43 | 7,692,583.76 | 5,224,967,284.19 |
Amount of last period
Unit: RMB
| Item | Half-Year of 2022 | ||||||||||||||
| Owner’s equity attributable to the Parent Company | Equity of minority shareholders | Total owner’s equity | |||||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive incom | Special reserves | Surplus reserves | General reserves | Retained earnings | Others | Subtotal | |||||
| Preference shares | Perpetual bonds | Others | |||||||||||||
| e | |||||||||||||||
| I. Balance at the End of Last Year | 1,312,457,555.00 | 940,742,686.19 | 722,243,283.39 | 106,984,275.42 | 3,265,611,428.36 | 4,903,552,661.58 | 3,246,050.97 | 4,906,798,712.55 | |||||||
| Plus: Alternation to accounting policies | |||||||||||||||
| Correction to previous errors | |||||||||||||||
| Business combinations involving enterprises under common control | |||||||||||||||
| Others | |||||||||||||||
| II. Balance at the Beginning of the Year | 1,312,457,555.00 | 940,742,686.19 | 722,243,283.39 | 106,984,275.42 | 3,265,611,428.36 | 4,903,552,661.58 | 3,246,050.97 | 4,906,798,712.55 | |||||||
| III. Changes in the Period (“-” Indicates Decrease) | 1,324,358.00 | 7,752,941.45 | -24,859,711.16 | 99,029,994.75 | 132,967,005.36 | -556,662.42 | 132,410,342.94 | ||||||||
| i. Total comprehensive income | 227,639,705.35 | 227,639,705.35 | -157,919.42 | 227,481,785.93 | |||||||||||
| ii. Capital | 1,324,358.00 | 7,752,941.45 | -24,859,711.16 | 33,937,010.61 | -398,743.00 | 33,538,267.61 |
| contributed or decreased by owner | |||||||||||||||
| 1 Ordinary shares contributed by owners | 1,324,358.00 | 13,460,603.24 | 14,784,961.24 | -400,000.00 | 14,384,961.24 | ||||||||||
| 2 Capital contributed by owners of other equity instruments | |||||||||||||||
| 3 Share based payments recognized as owner’s equity | -5,707,661.79 | -24,859,711.16 | 19,152,049.37 | 19,152,049.37 | |||||||||||
| 4 Others | 1,257.00 | 1,257.00 | |||||||||||||
| iii. Profit distribution | -128,609,710.60 | -128,609,710.60 | -128,609,710.60 | ||||||||||||
| 1 Appropriation of surplus reserves | |||||||||||||||
| 2 Appropriation of general risk reserves | |||||||||||||||
| 3 Distribution to owners (or shareholders) | -128,609,710.60 | -128,609,710.60 | -128,609,710.60 | ||||||||||||
| 4 Others | |||||||||||||||
| iv. Interior |
| balance from owner’s equity | |||||||||||||||
| 1 Added capital (or share capital) from capital reserves | |||||||||||||||
| 2 Added capital (or share capital) from surplus reserves | |||||||||||||||
| 3 Compensation of loss with surplus reserves | |||||||||||||||
| 4 Retained earnings of carry-over of the defined benefit plan | |||||||||||||||
| 5 Retained earnings of carry-over of other comprehensive income | |||||||||||||||
| 6 Others | |||||||||||||||
| v. Special reserves | |||||||||||||||
| 1 |
| Appropriation for the period | |||||||||||||||
| 2 Use for the period | |||||||||||||||
| vi. Others | |||||||||||||||
| IV. Closing Balance of the Period | 1,313,781,913.00 | 948,495,627.64 | 697,383,572.23 | 106,984,275.42 | 3,364,641,423.11 | 5,036,519,666.94 | 2,689,388.55 | 5,039,209,055.49 |
8. Statement of changes in owner’s equity of the Parent Company
Amount of the current period
Unit: RMB
| Item | Half-Year of 2023 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | Retained earnings | Others | Total owner’s equity | |||
| Preference shares | Perpetual bonds | Others | ||||||||||
| I. Balance at the End of Last Year | 1,314,739,745.00 | 881,881,031.99 | 688,930,693.99 | 145,761,355.58 | 659,992,439.79 | 2,313,443,878.37 | ||||||
| Plus: Alternation to accounting policies | ||||||||||||
| Correction to previous errors | ||||||||||||
| Others | ||||||||||||
| II. Balance at the Beginning of the Year | 1,314,739,745.00 | 881,881,031.99 | 688,930,693.99 | 145,761,355.58 | 659,992,439.79 | 2,313,443,878.37 | ||||||
| III. Changes in the Period (“-” Indicates Decrease) | 19,810,555.00 | 120,910,157.94 | 104,795,958.24 | 306,544,586.59 | 342,469,341.29 | |||||||
| i. Total comprehensive income | 387,745,193.80 | 387,745,193.80 | ||||||||||
| ii. Capital contributed or decreased by owner | 19,810,555.00 | 120,910,157.94 | 104,795,958.24 | 35,924,754.70 | ||||||||
| 1 Ordinary shares contributed by owners | 21,706,455.00 | 119,137,564.99 | 140,844,019.99 | |||||||||
| 2 Capital contributed by owners of other equity instruments | ||||||||||||
| 3 Share based payments recognized as owner’s equity | 27,557,414.71 | 132,476,680.00 | -104,919,265.29 | |||||||||
| 4 Others | -1,895,900.00 | -25,784,821.76 | -27,680,721.76 | |||||||||
| iii. Profit distribution | -81,200,607.21 | -81,200,607.21 | ||||||||||
| 1 Appropriation |
| of surplus reserves | ||||||||||||
| 2 Distribution to owners (or shareholders) | -81,200,607.21 | -81,200,607.21 | ||||||||||
| 3 Others | ||||||||||||
| iv. Interior balance from owner’s equity | ||||||||||||
| 1 Added capital (or share capital) from capital reserves | ||||||||||||
| 2 Added capital (or share capital) from surplus reserves | ||||||||||||
| 3 Compensation of loss with surplus reserves | ||||||||||||
| 4 Retained earnings of carry-over of the defined benefit plan | ||||||||||||
| 5 Retained earnings of carry-over of |
| other comprehensive income | ||||||||||||
| 6 Others | ||||||||||||
| v. Special reserves | ||||||||||||
| 1 Appropriation for the period | ||||||||||||
| 2 Use for the period | ||||||||||||
| vi. Others | ||||||||||||
| IV. Closing Balance of the Period | 1,334,550,300.00 | 1,002,791,189.93 | 793,726,652.23 | 145,761,355.58 | 966,537,026.38 | 2,655,913,219.66 |
Amount of last period
Unit: RMB
| Item | Half-Year of 2022 | |||||||||||
| Share capital | Other equity instruments | Capital reserve | Less: Treasury shares | Other comprehensive income | Special reserves | Surplus reserves | Retained earnings | Others | Total owner’s equity | |||
| Preference shares | Perpetual bonds | Others | ||||||||||
| I. Balance at the End of Last Year | 1,312,457,555.00 | 863,078,990.57 | 722,243,283.39 | 106,862,941.14 | 438,410,203.56 | 1,998,566,406.88 | ||||||
| Plus: Alternation to accounting policies | ||||||||||||
| Correction to previous | ||||||||||||
| errors | ||||||||||||
| Others | ||||||||||||
| II. Balance at the Beginning of the Year | 1,312,457,555.00 | 863,078,990.57 | 722,243,283.39 | 106,862,941.14 | 438,410,203.56 | 1,998,566,406.88 | ||||||
| III. Changes in the Period (“-” Indicates Decrease) | 1,324,358.00 | 9,114,208.93 | -24,859,711.16 | 313,092,740.63 | 348,391,018.72 | |||||||
| i. Total comprehensive income | 441,702,451.23 | 441,702,451.23 | ||||||||||
| ii. Capital contributed or decreased by owner | 1,324,358.00 | 9,114,208.93 | -24,859,711.16 | 35,298,278.09 | ||||||||
| 1 Ordinary shares contributed by owners | 1,324,358.00 | 13,460,603.24 | 14,784,961.24 | |||||||||
| 2 Capital contributed by owners of other equity instruments | ||||||||||||
| 3 Share based payments recognized as owner’s equity | -4,346,394.31 | -24,859,711.16 | 20,513,316.85 | |||||||||
| 4 Others |
| iii. Profit distribution | -128,609,710.60 | -128,609,710.60 | ||||||||||
| 1 Appropriation of surplus reserves | ||||||||||||
| 2 Distribution to owners (or shareholders) | -128,609,710.60 | -128,609,710.60 | ||||||||||
| 3 Others | ||||||||||||
| iv. Interior balance from owner’s equity | ||||||||||||
| 1 Added capital (or share capital) from capital reserves | ||||||||||||
| 2 Added capital (or share capital) from surplus reserves | ||||||||||||
| 3 Compensation of loss with surplus reserves |
| 4 Retained earnings of carry-over of the defined benefit plan | ||||||||||||
| 5 Retained earnings of carry-over of other comprehensive income | ||||||||||||
| 6 Others | ||||||||||||
| v. Special reserves | ||||||||||||
| 1 Appropriation for the period | ||||||||||||
| 2 Use for the period | ||||||||||||
| vi. Others | ||||||||||||
| IV. Closing Balance of the Period | 1,313,781,913.00 | 872,193,199.50 | 697,383,572.23 | 106,862,941.14 | 751,502,944.19 | 2,346,957,425.60 |
III. Basic Information of the CompanyC&S Paper Co., Ltd. (hereinafter referred to as “the Company”) is a joint stock limited company restructured fromZhongshan Zhongshun Paper Manufacturing Co., Ltd., with all shareholders of the original company as its initiators.The Company has obtained a business license of enterprise legal person with the registration number of442000400013713 issued by Guangdong Province Administration for Industry and Commerce on December 31,2008.As of June 30, 2023, the registered capital of the company is RMB 1,334,550,300.00, share capital is RMB1,334,550,300.00.
1. Registered address, form of organization, and headquarters of the Company
Form of organization: Company limited by sharesRegistered address: No. 1 Longcheng Road, Dongsheng Town, Zhongshan CityOffice address of the headquarters of the Company: No. 136 Caihong Avenue, West District, Zhongshan City
2. Business nature and main business activities of the Company
C&S Paper Co., Ltd. and its subsidiaries (hereafter generally referred to as “the Company”) are in the householdpaper industry. The Company mainly engages in the following: R&D, production, processing and sales (includingonline sales): high-end household paper series products, tissue boxes, sanitary products, cosmetics, non-wovenproducts, daily necessities (limited to daily plastic products, daily metal products, daily rubber products, and dailyceramic products), daily chemical products (excluding hazardous chemicals), and Class I medical devices; operationand production of Class II and Class III medical devices.
3. Actual controller of the Company
The actual controllers of the Company are Deng Yingzhong, Deng Guanbiao, and Deng Guanjie (Deng Yingzhongis the other two’s father).
4. Approver for the issue of the financial statements and date of approval
The financial statements were approved for issue by the Board of Directors of the Company on August 25, 2023.
5. Scope of the consolidation of financial statements
As of June 30, 2023, the Company has 26 subsidiaries which are included in the consolidated scope, as detailed in“Note IX. Equities in Other Entities”. Compared with last year, two subsidiaries have been newly added into whileone subsidiary has been deleted from the consolidated scope during the reporting period. For details, see “NoteVIII. Changes in Consolidated Scope”.
IV. Preparation Basis for Financial Statements
1. Basis of preparation
The financial statements of the Company have been prepared on a going concern basis based on actual transactionsand events and according to the Accounting Standards for Business Enterprises - Basic Standards promulgated bythe Ministry of Finance (MOF No. 33 Document and No. 76 Revision), the 41 accounting standards, Guidelines forthe Application of the Accounting Standards for Business Enterprises, interpretation to the accounting standards forbusiness enterprises and other relevant regulations that are successively promulgated on or after February 15, 2006(hereinafter collectively referred to as “Accounting Standards for Business Enterprises”), and rules set out in No.15 Preparation and Reporting Rules of Information Disclosure of Public Offering Companies - General Rules forFinancial Statements (2014 Revision) issued by China Securities Regulatory Commission based on actualtransactions and events.In accordance with the relevant rules of Accounting Standards for Business Enterprises, the financial accounting ofthe Company is based on accrual basis. Apart from some financial tools, the accounting measurement of the financialstatements is based on historical cost method. Provision for impairment of asset is set aside if it is recognized.
2. Going concern
The Company shall be a going concern for at least 12 months following the end of the reporting period. There areno major events that will affect the Company’s operational ability; therefore, the assumption on which the financialstatements are based is reasonable.
V. Significant Accounting Policies and Accounting EstimatesSpecific accounting policies and accounting estimates:
C&S Paper Co., Ltd. and all its subsidiaries have set out several specific accounting policies and accountingestimates for transactions and events with relation to the recognition of incomes and income taxes in accordancewith the Accounting Standards for Business Enterprises and their own operational characteristics. Please refer to“Note V (39) Revenue” for details. As for explanations of significant accounting judgments and estimates made bythe management, please refer to “Note V (44) Significant changes of accounting policies and accounting estimates”.
1. Statement of compliance with the accounting standards for business enterprisesThe financial statements of the Company conform to the requirements set out in the Accounting Standards forBusiness Enterprises. The statements truthfully and completely reflect the financial status, operating results, cashflow, and other relevant information of the Company. In addition, the financial statements of the Company are alsoin accordance with disclosure requirements for financial statements and notes in No. 15 Preparation and ReportingRules of Information Disclosure of Public Offering Companies - General Rules for Financial Statements of theChina Securities Regulatory Commission (2014 Revision) in all material aspects.
2. Accounting period
The accounting period of the Company is divided into annual and interim periods. The interim period refers to thereporting period shorter than a complete accounting year.The accounting year of the Company is from January 1 toDecember 31 of each calendar year.
3. Operating cycle
The operating cycle of the Company normally refers to the periods during which the Company purchases assets forprocessing and then gets cash or cash equivalents from the processed items. The Company sets 12 months as a fulloperating cycle and uses the 12-month period as a standard for the liquidity of assets and liabilities.
4. Standard currency for accounting
RMB is the main currency in the main economic environments in which the Company and its domestic subsidiariesoperate. Therefore, the Company and its subsidiaries use RMB as the standard currency for bookkeeping. Thecurrency for accounting used in the Company’s financial statements is RMB.
5. Accounting treatment measures of business combinations involving enterprises under common control andbusiness combinations involving enterprises not under common controlBusiness combinations refer to the combination of two or more independent enterprises to form a reporting entityof transactions or events. Business combination can be classified as business combinations involving enterprisesunder common control and business combinations involving enterprises not under common control.
(1) Business combinations involving enterprises under common control
Business combinations under common control means enterprises involved in the business combination are underultimate control by one party or the same multi-parties before and after combination, and such control is nottemporary. For business combinations under common control, those who obtain control of enterprises involved inthe business combination on the combination date are the acquirer while other enterprises involved in the businesscombination are the acquiree. Combination date is the date that the combining party actually obtains control of thecombined party.Assets and liabilities that the acquirer gets from the acquiree are calculated and measured at the book values on thecombination date. If there are differences between the book values of the net assets the acquirer receives and thebook values of the combination consideration it pays (or the face values of the issued shares), the differences willbe used to adjust capital reserves (share premium). Where capital reserves (share premium) are insufficient to offset,retained earnings shall be adjusted.All direct expenses related to the business combinations paid by the acquirer shall be included in current profits andlosses upon occurrence.
(2) Business combinations involving enterprises not under common control
Business combinations not under common control means enterprises involved in the business combination are notunder ultimate control by one party or the same multi-parties before and after combination. For businesscombinations not under common control, those who obtain control of enterprises involved in the businesscombination on the acquisition date are the acquirer, while other enterprises involved in the business combination
are the acquiree. Acquisition date is the date that the acquirer actually obtains control of the acquiree.For business combinations not under common control, the costs of combination include the assets the acquirer pays,liabilities the acquirer bears, and the fair value of the equity securities issued on the date of combination for theacquisition of control over the acquiree. The costs of auditing, legal services, evaluation consulting, otherintermediary expenses and other management fees incurred for business combination shall be included in currentprofits and losses. The transaction costs of the equity securities and debt securities issued by the acquirer shall beincluded in the initially confirmed amounts of equity securities and debt securities. The contingent considerationinvolved shall be included in the costs of business combination based on its fair value at the acquisition date. If,within 12 months after the acquisition, there is new or further evidence for conditions that have already existed onthe acquisition date and the contingent consideration shall be re-adjusted, the combination goodwill shall be adjustedaccordingly. The acquirer’s costs of business combinations and its identifiable net assets obtained from businesscombinations shall be assessed at the fair values on the acquisition date. If the costs of business combinations arehigher than the identifiable net assets of the acquiree on the acquisition date, the gap between them shall beconfirmed as goodwill. If the costs of business combinations are lower than the fair values of the identifiable netassets of the acquiree on the acquisition date, the fair values of identifiable assets, liabilities and continent liabilitiesas well as the measurement of combination costs shall be reassessed; if, upon reassessment, the businesscombination costs are still lower than the fair values of the identifiable net assets of the acquiree, the differenceshall be included in profits and losses of the current period.If the deductible temporary differences the acquirer gets from the acquiree are not eligible to be confirmed asdeferred tax asset on the acquisition date, and within 12 months of the acquisition, there are new or further evidencefor the conditions that have already existed on the acquisition date that the economic profits brought by thedeductible temporary differences of the acquiree could be achieved, such differences shall be confirmed as deferredtax asset. At the same time, the goodwill shall be reduced. Where the goodwill is insufficient to be deducted, thegap between them shall be included in current profits and losses. Apart from the aforementioned situations, alldeductible temporary differences confirmed to be relevant to the business combination shall be recorded in currentprofits and losses.For business combinations not under common control that are achieved through multiple steps, whether they can beregarded as package deals shall be judged in accordance with Notice No.5 of the Interpretation of AccountingStandards for Business Enterprises of the Ministry of Finance (C.K. [2012] No.19), and the standards of “packagedeals” set out in Article 51 of the Accounting Standard for Business Enterprises No. 33 – Consolidated FinancialStatements (please refer to Note V (6) “methods for preparation of consolidated financial statements” (2)). In theevent that the combination is regarded as “package deals”, accounting treatment shall be done by referring to thedescriptions in previous paragraphs of this section and “Note V (22) Long-term equity investments” herein; if not,accounting treatment shall be done by distinguishing individual financial statements from consolidated financialstatements:
In individual financial statements, the initial investment costs shall be the sum of the book value of the equityinvestment of the acquiree held before the acquisition date and the new investment costs on the acquisition date; ifother comprehensive income is involved in the equities of the acquiree before the acquisition date, accountingprocessing shall be done for the comprehensive income related to this investment by adopting the same basis fordirectly disposing of relevant assets or liabilities of the acquiree during the disposal of this investment (that is,except for the corresponding shares of the changes caused by re-measurement of the net liabilities or net assets ofthe defined benefit plan by the acquiree, which are accounted by the equity method, others shall be transferred tothe return on investment of the current period).
In consolidated financial statements, the equities of the acquiree held before the acquisition date shall be re-measured at the fair value of the equities on the acquisition date, and the difference between the fair value and thebook value shall be recognized as the return on investment of the current period; if other comprehensive income isinvolved in the equities of the acquiree before the acquisition date, accounting processing shall be done for thecomprehensive income related to this investment by adopting the same basis for directly disposing of relevant assetsor liabilities of the acquiree .
6. Methods for preparation of consolidated financial statements
(1) Principles of determining the scope of consolidated financial statements
The scope of consolidation of consolidated financial statements shall be subject to the basis of control. Controlrefers to the power the investor owns against the investee, which allows the investor to enjoy the variable return byattending relevant activities held by the investee, and to be capable of using such power to affect the amount ofreturn. The scope of consolidation is the Company and all of its subsidiaries. Subsidiaries refer to entities controlledby the Company.The Company shall reassess whether it controls an investee if facts and circumstances indicate that there are changesto the relevant elements of control as defined above.
(2) Methods for preparation of consolidated financial statements
The Company shall include the subsidiaries in the scope of consolidation from the date it acquires the actual controlover the net assets and the decision-making of production and operations of such subsidiaries; accordingly, theCompany shall terminate including them in the scope of consolidation from the date it loses the actual control. Interms of subsidiaries already disposed of, the operating results and cash flows before the disposal date have beenincluded in the consolidated income statements and the consolidated cash flow statements appropriately; as forsubsidiaries disposed in the current period, the opening balance in the consolidated balance sheet shall not beadjusted. In case of subsidiaries added through business combinations not under the same control, the operatingresults and cash flows after the acquisition date have been included in the consolidated income statements and theconsolidated cash flow statements appropriately, and the opening and comparative balance in the consolidatedbalance sheet shall not be adjusted. In case of subsidiaries added through business combinations under the samecontrol, the operating results and cash flows of the combined party from the beginning of the period in which thecombination happens to the combination date have been included in the consolidated income statements and theconsolidated cash flow statements appropriately, and the comparative balance in the consolidated balance sheet shallbe adjusted simultaneously.In case of inconsistencies in the accounting policies or periods between subsidiaries and the Company duringpreparation of consolidated financial statements, financial statements of subsidiaries shall be adjusted according tothe accounting policies and periods adopted by the Company. For subsidiaries acquired by business combinationsnot under the same control, their financial statements shall be adjusted based on the fair value of the identifiable netassets on the acquisition date.All major business transaction balance, transactions, and unrealized profit of the Company shall be offset duringpreparation of consolidated financial statements.Shareholders’ equities of subsidiaries and the part of the net profit and loss of the current period not attributable tothe Company shall be presented separately under the shareholders’ equities and the net profit in the consolidatedfinancial statements as equities of minority shareholders and minority shareholders’ profits and losses. Shares ofequities of minority shareholders in the net profit and loss of the current period of subsidiaries shall be presented
under the “minority shareholders’ profits and losses” in the consolidated income statement. If the loss of a subsidiarywhich is shared by its minority shareholders exceeds the minority shareholders’ share in the opening balance of thesubsidiary, the minority interest shall be reduced.If the Parent Company loses control of a subsidiary due to partial disposal of equity investment or other reasons, itshall re-measure the remaining equity at fair value on the date of loss of control. The sum of consideration obtainedfrom equity disposal and fair value of the remaining equity, minus the difference between the Parent Company’sshare of the subsidiary’s net assets that is continuously calculated from the acquisition date, shall be recognized asinvestment income for the reporting period when the loss of control takes place. Accounting processing shall bedone for the other comprehensive income related to this investment in the subsidiary’s equities by adopting the samebasis for directly disposing of relevant assets or liabilities of the acquiree during the loss of control (that is, exceptfor the changes caused by re-measurement of the net liabilities or net assets of the defined benefit plan by theprevious subsidiary, others shall be transferred to the return on investment of the current period). After that,subsequent measurement shall be done for the remaining equity of this part as per relevant provisions in theAccounting Standards for Business Enterprises No. 2 - Long-term Equity Investment or the Accounting Standardsfor Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments. See “Note V (22) Long-term equity investments” or “Note V (10) Financial instruments” for details.If the Company disposes of investments in a subsidiary’s equities by steps via transactions until it loses control, itshall check whether these transactions from disposal of the investments in the subsidiary’s equities to the loss ofcontrol are package deals. If the terms, conditions, and economic effects of transactions on disposing of equityinvestment in the subsidiary conform to one or more of the following circumstances, that means these multipletransactions should be treated as package deals in accounting processing: 1) Those transactions are reached at thesame time or after taking into consideration the influence of each other; 2) those transactions together produce acomplete commercial outcome; 3) the occurrence of one transaction depends on the occurrence of at least one othertransaction; 4) one transaction alone does not seem to be economical, but all those transactions are economical whenare considered as a whole. If those transactions are package deals, each transaction shall be treated as a transactionthat results in loss of control of the subsidiary in accounting processing. However, the difference between eachdisposal price before loss of control and the Parent Company’s share of the subsidiary’s net assets corresponding tothe disposal investment shall be recognized as other comprehensive income in the consolidated financial statementsand, upon loss of control, transferred to the profit and loss of the current reporting period.
7. Classification of joint operation arrangements and accounting treatment methods for joint operationsNone.
8. Criteria for recognition of cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits that can be used for payment at any time, and short-term(due within three months from the acquisition date) investment held by the Company with high liquidity, easy toconvert to cash in a known amount, and small risk of value changes.
9. Translation of transactions and financial statements denominated in foreign currencies
(1) Methods for translation of transactions denominated in foreign currencies
At the initial recognition of foreign currency transactions of the Company, foreign currency will be translated into the
amount of standard currency for accounting at the spot exchange rate or its approximate exchange rate on the transactiondate. However, the business of exchange of foreign currencies or transactions related to the exchange of foreign currencies,foreign currency will be translated into the amount of standard currency for accounting at the exchange rate actuallyadopted.
(2) Methods for translation of monetary and non-monetary items in foreign currenciesOn the balance sheet date, the foreign currency monetary items are translated at the spot exchange rate on that date.Exchange difference resulting from the difference between the spot exchange rate on the balance sheet date and thatat the initial recognition or on the previous balance sheet date shall be recognized as the profit and loss of the currentperiod.Non-monetary items that are measured at historical cost in foreign currencies shall still be converted at the spotexchange rate on the transaction date with the amount of standard currency for accounting unchanged. Non-monetary items that are measured at fair value in foreign currencies are translated using the foreign exchange rateat the date the fair value is recognized. The difference between the amount of standard currency for accounting aftertranslation and the original amount of the standard currency for accounting shall be treated as a change in fair value(including the change in the exchange rate) and recognized as the profit and loss of the current period or othercomprehensive income.
(3) Methods for translation of foreign-currency financial statements
Foreign-currency financial statements of overseas operations shall be translated into RMB financial statements by thefollowing methods: The assets and liabilities in the balance sheet shall be converted at the spot exchange rate on thebalance sheet date; except “undistributed profits”, all the other owner’s equity items are converted at the spot exchangerate at the time of occurrence. Income and expense items in the income statement shall be translated using the foreignexchange rates ruling at the dates of the transactions. The undistributed profit at the beginning of the year is theundistributed profit at the end of the year after the conversion of the previous year; The undistributed profits at the end ofthe period are calculated and listed according to the profit distribution items after conversion; The difference between thetotal amount of assets, liabilities and shareholders' equity after translation is recognized as other comprehensive incomeas the translation difference of foreign currency statements.Translation of comparative financial statements shall besubject to the above provisions.
10. Financial instruments
When the Company becomes a party to a financial instrument contract, the financial instrument is confirmed to beeither financial assets or financial liabilities.
(1) Classification, recognition, and measurement of financial assets
According to the business model of managing financial assets and the contractual cash flow characteristics offinancial assets, the Company classified financial assets into the following categories: financial assets measured atthe amortized cost, financial assets measured at fair value through other comprehensive income and financial assetsmeasured at fair value through profit and loss of the current period.Financial assets are measured at fair value upon initial recognition. For financial assets measured at fair valuethrough profit and loss of the current period, transaction costs are directly included in profit and loss of the currentperiod. For other types of financial assets, related transaction costs are included in their initial recognized amounts.In terms of the accounts receivable or notes receivable arising from selling products or providing labor servicewithout or not considering major financing component, the Company shall regard the expected considerationamount that it has rights to charge as the initial recognition amount.
1) Financial assets measured at amortized cost
For the business model where the Company manages the financial assets carried at amortized cost, the Companyaims to charge the contract cash flows, and the characteristics of the contract cash flows of this kind of financialassets are consistent with the basic lending arrangements. That is, cash flows generated on specified dates are solelypayments of principal and interest on the principal amount outstanding. This kind of financial assets aresubsequently measured at amortized cost using the effective interest method. Gain or loss arising from amortizationor impairment is recognized in profit and loss of the current period.
2) Financial assets measured at fair value through other comprehensive income
The business model for the Company to manage this type of financial assets aims at both obtaining the contract cashflows and selling the financial assets, and the characteristics of the contract cash flows of this kind of financial assetsare consistent with the basic lending arrangements. The Company measures this kind of financial assets at fair valuethrough other comprehensive income, but recognizes the impairment losses or gains, exchange profit and loss, andinterest income calculated by the effective interest method as the profit and loss of the current period.Additionally, the Company designates some non-tradable equity instruments as financial assets at fair value throughother comprehensive income. The Company recognizes relevant dividend income from such financial assets as theprofit and loss of the current period, and changes in fair value as other comprehensive income. When such financialassets are derecognized, the accumulated gains or losses previously recognized as other comprehensive income shallbe transferred from other comprehensive income to retained earnings and not recognized as the profit and loss ofthe current period.
3) Financial assets measured at fair value through profit and loss of the current periodAll financial assets other than the other two preceding types are classified as financial assets measured at fair valuethrough profit and loss of the current period. Moreover, at initial recognition, to eliminate or significantly reduceaccounting mismatches, the Company may designate some financial assets as financial assets measured at fair valuethrough profit and loss of the current period. Such financial assets shall be measured at fair value, and changes infair value are recognized as the profit and loss of the current period.
(2) Classification, recognition, and measurement of financial liabilities
At initial recognition, financial liabilities are classified into financial liabilities measured at fair value through profitor loss and other financial liabilities. For financial liabilities at fair value through profit and loss of the current period,transaction costs are directly included in profit and loss of the current period. For other types of financial liabilities,related transaction costs are included in their initial recognized amounts.
1) Financial liabilities measured at fair value through profit and loss of the current periodFinancial liabilities measured at fair value through profit and loss of the current period include tradable financialliabilities (including derivatives belonging to financial liabilities) and financial liabilities designated to be measuredat fair value through profit and loss of the current period at initial recognition.Tradable financial liabilities (including derivatives that are financial liabilities) are subsequently measured at fairvalue, and changes in fair value -- except for those related to hedging accounting -- are recognized as profit and lossof the current period.For those that are designated as financial liabilities measured at fair value through profit or loss, the changes in fairvalue resulting from changes in the credit risk of the Company shall be recognized as other comprehensive income;besides, when such liabilities are derecognized, the amount of accumulative changes in fair value resulting fromcredit risk changes that are recognized as other comprehensive income shall be transferred to retained earnings.Other changes in fair value shall be recognized as the profit and loss of the current period. If the treatment of thecredit risk changes in such financial liabilities by the above methods will result in expansion of the accountingmismatch in the profit and loss, the Company shall recognize all gains or losses in such financial liabilities(including the amount subject to the credit risk changes of the Company) as the profit and loss of the current period.
2) Other financial liabilities
Except for financial liabilities resulting from financial asset transfers not meeting the conditions for derecognitionor the continuous involvement in the transferred financial asset, or financial guarantee contracts, other financialliabilities shall be classified into the financial liabilities measured at amortized cost, which shall be subsequentlymeasured at amortized cost, and the gains or losses resulting from derecognition or amortization shall be recognizedas the profit and loss of the current period.
(3) Recognition basis and measurement method of financial asset transfer
Once one of the following conditions is met, the financial assets shall be derecognized: 1) The contract right tocharge the cash flows of the financial assets is terminated; 2) the financial assets have been transferred, and almostall the risks and rewards of the ownership of the financial assets are transferred to the transferee; 3) the financialassets have been transferred, and the Company has given up the control over the financial assets although it doesnot transfer or retain almost all the risks and rewards of the ownership of the financial assets.If the Company has neither transferred nor retained almost all the risks and rewards of the ownership of the financialassets, and the Company does not waive its control of the financial assets, it shall recognize the relevant financialassets within the extent of its continuous involvement in the transferred financial assets and recognize the relevantliabilities. The continuous involvement in the transferred financial assets refers to the level of risk with which theCompany is faced due to changes in the financial asset values.When overall transfer of financial assets meets the conditions for derecognization, the book value of the transferredfinancial assets and the difference between the consideration received due to transfer and the accumulative changesin fair value that is originally recognized as other comprehensive income shall be recognized as the profit and lossof the current period.When partial transfer of financial assets meets the conditions for derecognization, the book value of the transferredfinancial assets shall be apportioned to the fair value between the derecognized part and the recognized part, andthe consideration received due to transfer and the difference between the accumulative changes in fair value that isoriginally recognized as other comprehensive income, which shall be apportioned to the derecognized part, and theapportioned book value as mentioned above shall be recognized as the profit and loss of the current period.When the Company sells financial assets with additional recourse or transfers the endorsed financial assets held, itshall check whether almost all the risks and rewards of the ownership of the financial assets are transferred. If theCompany has transferred almost all the risks and rewards of the ownership of the financial assets to the transferee,it shall derecognize the financial assets; if the Company retains almost all the risks and rewards of the ownership ofthe financial assets, it shall not derecognize the financial assets; if the Company neither transfers nor retains almostall the risks and rewards of the ownership of the financial assets, it shall judge whether it has retained control overthe assets and conduct accounting processing following the principles described in previous paragraphs.
(4) Derecognition of financial liabilities
If current obligations of the financial liabilities (or some of the liabilities) have been released, the Company shallderecognize the financial liabilities (or some of the liabilities). Where the Company (borrower) and a lender sign anagreement to replace the existing financial liability by way of assumption of new financial liability with the termsof the new financial liability substantially different from those of the existing financial liability, it derecognizes theexisting financial liability while recognizing the new financial liability. If the contract terms of the existing financialliability are materially changed in whole (or in part), the existing financial liability will be derecognized, and thefinancial liability after changes of terms will be recognized as a new financial liability.If a financial liability is derecognized in whole (or in part), the difference between the book value of thederecognized portion and the consideration paid (including the non-cash assets transferred out or the new financialliability assumed) is recognized as the profit and loss of the current period.
(5) Offsetting financial assets and financial liabilities
When the Company has the statutory right to offset the recognized amount of financial assets and financial liabilities,and this statutory right is currently enforceable, and the Company plans to net the financial assets or simultaneouslyrealize the financial assets and pay off the financial liabilities, the financial assets and financial liabilities arepresented in the balance sheet at the net amount after offsetting each other. Otherwise, financial assets and financialliabilities are presented separately in the balance sheet and are not offset against each other.
(6) Methods for determining the fair value of financial assets and financial liabilitiesThe fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transactionbetween market participants at the measurement date. If there are active markets for a financial instrument, theCompany establishes its fair value by using quotes in the active markets. Quotes in active markets refer to pricesthat are readily available on a regular basis from exchanges, brokers, trade associations, pricing service institutions,etc., and represent the prices of market transactions that actually occur in a fair trade. If there is no active market,the Company establishes fair value by using valuation techniques.Valuation techniques include reference to price used in recent market transactions between knowledgeable, willingparties, reference to the current fair value of other financial instruments that are substantially the same, discountedcash flow analysis, option pricing models, etc. During valuation, the Company adopts the valuation techniques thatare applicable under current circumstances and supported by sufficient available data and other information, selectsthe input values that are consistent with the characteristics of the assets or liabilities considered by the marketparticipants in the transaction of the relevant assets or liabilities, and preferentially uses the relevant observableinputs. Unobservable input values are used where the relevant observable input values are not available or are notpracticable.
(7) Equity instruments
An equity instrument refers to a contract that can prove the Company owns the remaining equity in the assets afterdeducting all liabilities. The Company’s issuance (including refinancing), repurchase, sales or cancellation of equityinstruments are treated as changes in equities, and transaction costs related to equity transactions are deducted fromequities. The Company does not recognize changes in the fair value of equity instruments.The distribution of dividends by equity instruments (including “interests” generated by instruments that areclassified as equity instruments) during their period existence shall be treated as profit distribution.
(8) Impairment of financial assets
The financial assets for which the Company needs to recognize impairment losses are financial assets measured atamortized cost, debt instrument investments measured at fair value through other comprehensive income, and leasereceivables, mainly including notes receivable, accounts receivable, and other receivables. In addition, for somecontract assets and financial guarantee contracts, impairment reserves are set aside and credit impairment losses arerecognized as per the accounting policies described in this section.
1) Methods for recognizing impairment reserves
Based on the expected credit loss, the Company sets aside provisions for impairment of the above items by methods(general method or simplified method) for measuring expected credit loss applicable to them and recognizes creditimpairment loss.Credit loss refers to the difference between all contract cash flow receivables discounted at the original effectiveinterest rate under the contract and all expected cash flow receivables, i.e., the present value of all cash shortages.Specifically, for financial assets that have been credit-impaired at the time of purchase or origin, the Companydiscounts the financial assets at the credit-adjusted actual interest rate.The general method for measuring expected credit loss means that the Company assesses on each balance sheet datewhether the credit risk of financial assets has increased significantly since the initial recognition. If yes, the
Company measures loss reserves at an amount equivalent to the expected credit loss in the entire duration; if not,the Company measures loss reserves at an amount equivalent to the expected credit loss in the next 12 months. TheCompany considers all reasonable and evidence-based information, including forward-looking information, whenassessing expected credit loss;As for financial instruments with low credit risk on the balance sheet date, the Company measures the loss reservesaccording to the expected credit loss in the future 12 months, assuming that its credit risk has had no significantincrease since its initial recognition. The Company chooses to measure loss reserves according to the expected creditloss in the next 12 months or in the entire duration based on whether the credit risk has increased significantly sinceinitial recognition.
2) Standards for judging whether credit risk has increased significantly since initial recognitionIf the probability of default (PD) of a financial asset in the expected duration recognized on the balance sheet dateis significantly higher than that in the expected duration recognized at the time of initial recognition, the credit riskof the financial asset has increased significantly. Except for special circumstances, the Company determines whethercredit risk has increased significantly since initial recognition by reasonably assessing the changes in the PD in theentire duration with the changes in the coming 12 months.
3) Portfolio method for assessing expected credit risk based on portfolios
The Company assesses individual credit risk of financial assets with significantly different credit risks. Examplesinclude the following: receivables from related parties; receivables that have disputes with counterparties or thoseinvolved in litigation or arbitration; there are obvious signs that the debtor is very unlikely to fulfill the repaymentobligation.In addition to financial assets whose individual credit risk is assessed, the Company divides financial assets intodifferent groups based on common risk characteristics, and assesses credit risk on a portfolio basis.
4) Accounting treatment methods for impairment of financial assets
At the end of the reporting period, the Company calculates the expected credit loss of financial assets. If the expectedcredit loss is greater than the book value of its current impairment provisions, the difference is recognized as animpairment loss; if it is less than the current book value of the impairment provisions, the difference is recognizedas impairment gains.
5) Methods for recognizing credit losses of financial assets
a. Notes receivableThe Company measures loss reserves for notes receivable at an amount equivalent to expected credit loss in theentire duration. The Company divides notes receivable into different portfolios based on their credit riskcharacteristics:
| Item | Basis for determining the portfolio |
| Banker’s acceptance | Acceptors are banks with low credit risks. |
| Trade acceptance | The aging of trade acceptance is used as credit risk characteristics. |
b. Accounts receivableThe Company measures loss reserves for accounts receivable without major financing component at an amountequivalent to expected credit loss in the entire duration.The Company measures loss reserves for accounts receivable and lease receivables with major financing componentat an amount equivalent to expected credit loss in the duration.Except for accounts receivable whose individual credit risk is assessed, the Company divides accounts receivableinto different portfolios based on their credit risk characteristics:
| Item | Basis for determining the portfolio |
| Aging portfolio | This portfolio uses aging of accounts receivable as credit risk characteristics. |
| Related party portfolio | This portfolio comprises amounts of related parties within the consolidated scope. |
c. Other receivablesThe Company adopts the amount equivalent to the expected credit loss in the coming 12 months or in the entireduration to measure impairment losses based on whether the credit risk of other receivables has increasedsignificantly since initial recognition. Except for other receivables whose individual credit risk is assessed, theCompany divides other receivables into different portfolios based on their credit risk characteristics:
| Item | Basis for determining the portfolio |
| Aging portfolio | This portfolio uses aging of other receivables as credit risk characteristics. |
Related party portfolio
| Related party portfolio | This portfolio comprises amounts of related parties within the consolidated scope. |
11. Notes receivable
For details, please refer to 10. Financial instruments in V. Significant Accounting Policies and Accounting Estimatesof Section X.
12. Accounts receivable
For details, please refer to 10. Financial instruments in V. Significant Accounting Policies and Accounting Estimatesof Section X.
13. Accounts receivable financing: None
14. Other receivables
Recognition methods and accounting treatment methods for expected credit loss in other receivablesFor details, please refer to 10. Financial instruments in V. Significant Accounting Policies and Accounting Estimatesof Section X.
15. Inventories
(1) Classification of inventories
Inventories mainly include raw materials, goods in process, materials for consigned processing, commodity stocks,packages, and low-value consumables.
(2) Pricing methods for inventory acquisition and delivery
Inventories are priced at actual cost when they are acquired. Inventory costs include procurement costs, processingcost, and other costs. Inventories are priced by the weighted average method during receipt and delivery.
(3) Methods for recognition of the net realizable value of inventories and the provisions for impairment ofinventoriesThe net realizable value refers to the amount of the estimated selling price of the inventory minus the estimated cost,estimated selling expenses, and related taxes and fees at the time of completion in daily activities. When recognizingthe net realizable value of inventories based on the substantial evidence obtained, the Company also considers thepurpose of holding the inventories and the impact on matters after the balance sheet date.On the balance sheet date, inventories are measured at the lower of costs and the net realizable value. When the netrealizable value is lower than costs, the Company sets aside provisions for inventory impairment. Provisions for
inventory impairment are set aside based on the difference between the cost of individual inventory item and its netrealizable value. For inventories with a large quantity but a low unit value, provisions for inventory impairment areset aside according to inventory category.After provisions for the inventory impairment are set aside, if the influencing factors in previous write-down of theinventory value disappear, causing the net realizable value of the inventory to be higher than its book value, it shallbe reversed within the amount of the provisions for inventory impairment that have been set aside and recognizedas the profit and loss of the current period.
(4) The perpetual inventory system is adopted for the inventories.
(5) Amortization method for low-value consumables and packages
The one-time amortization method is adopted for low-value consumables and packages upon receipt.
16. Contract assets
The Company recognizes the contract amounts where the customer has not paid the consideration but the Companyhas fulfilled its contractual obligation while the claim to the amount from the customer is not unconditional (i.e.Only dependent on the passage of time) as contract assets in the balance sheet. Contract assets and contract liabilitiesunder the same contract are presented on a net basis; contract assets and contract liabilities under different contractsare not offset.
17. Contract costs
If the incremental cost incurred by the Company for obtaining a contract is expected to be recovered, the cost ofobtaining the contract is recognized as an asset. However, if the amortization period of the asset does not exceedone year, it is included into the profit and loss of the period as it occurs.If the contract cost does not fall within other enterprise accounting standards than the Accounting Standards forBusiness Enterprises No. 14 -- Revenue and meet the following conditions at the same time, it is considered ascontract performance cost and recognized as asset: 1) the cost is directly related to an existing or expected contractincluding direct labor, direct material or manufacturing overhead (or similar expenses), or the cost has beenexpressly defined as borne by the customer, or the cost is incurred solely as a result of the contract; 2) the costincreases the Company’s future resources to perform contractual obligations; and 3) the cost is expected to berecovered.Contract cost-related assets are amortized on the same basis of goods revenue recognition relating to the asset andincluded in the profit and loss of the current period.
18. Assets held for sale
The Company classifies non-current assets or a disposal group as held for sale (including exchange of non-monetaryassets with commercial substance, the same below) if their book values are recovered principally through disposalrather than through continuing use. Specifically, the following conditions shall be met simultaneously: A certainnon-current asset or disposal group can be sold immediately under the current conditions according to the practiceof selling such assets or disposal groups in similar transactions; the Company has made a resolution of an offer andobtained the purchase commitment; the sale is expected to be completed within one year. Among them, the disposalgroup refers to a group of assets that are disposed of as a whole through sale or other means in a transaction, andthe liabilities directly related to these assets that are transferred in the transaction. If the asset group or the
combination of asset groups to which the goodwill (obtained from business combination) has been allocated inaccordance with the Accounting Standards for Business Enterprises No. 8 -- Impairment of Assets, the disposalgroup shall include the goodwill allocated to it.During initial measurement or re-measurement of the non-current assets and disposal groups classified into held-for-sale assets on the balance sheet date, if the book value of such assets is higher than the net value deducting thecost of offer, the book value is written down to the recoverable amount by the Company, the written-down amountis recognized as profit and loss of the current period and impairment provisions are set aside at the same time. Forthe disposal group, the recognized asset impairment loss is first deducted from the book value of the goodwill in thedisposal group, and then deducted in proportion from the book value of non-current assets specified in the applicableAccounting Standards for Business Enterprises No. 42 - Non-Current Assets and Disposal Groups Held for Saleand Discontinued Operations (hereinafter referred to as the “Standards for Assets Held for Sale”). If the fair valueof the disposal group held for sale on the subsequent balance sheet date increases after deducting the selling expenses,the previously written down amount shall be restored, and reversed within the amount of the asset impairment lossesrecognized for non-current assets as per the Standards for Assets Held for Sale applicable after the assets areclassified into those held for sale, and the reversed amount shall be recognized as the profit and loss of the currentperiod. Besides, the book value of the reversed amount shall be increased in proportion according to the proportionof the book value of the non-current assets specified in the Standards for Assets Held for Sale applicable to thoseexcept for the goodwill in the disposal group. The book value of the goodwill that has been deducted, and the assetimpairment losses recognized before the non-current assets are classified into assets held for sale as per theStandards for Assets Held for Sale shall not be reversed.Non-current assets held for sale and non-current assets in the disposal group are not subject to depreciation oramortization. Interest and other expenses on liabilities in the disposal group held for sale continue to be recognized.When the non-current assets or disposal group no longer meets the conditions for classification into the assets heldfor sale, the Company no longer classifies them into the category or removes the non-current assets from the disposalgroup held for sale, and measures them at the lower of the following two: (1) in terms of the book value beforeclassification into assets held for sale, for which the measurement standard is the amount after adjustment accordingto the depreciation, amortization, or impairment that should have been recognized under the assumption that theyare not classified into assets held for sale; and (2) the recoverable amount.
19. Investments in creditor’s rights: None
20. Other investments in creditor’s rights: None
21. Long-term receivables: None
22. Long-term equity investments
The long-term equity investments herein refer to the long-term equity investments in which the Company has control,joint control, or significant influence on the investee. Long-term equity investments where the Company has nocontrol, joint control, or significant influence on the investee are accounted as financial assets measured at fair valuethrough profit and loss of the current period. Among them, for those that are non-tradable, the Company may chooseto designate them as the financial assets measured at fair value through other comprehensive income for accountingduring initial recognition. See “Note V (10) Financial instruments” for their detailed accounting policies.Joint control refers to the common control over a particular arrangement according to relevant agreement, and that
the decisions on relevant activities under such arrangement are subject to the unanimous consent from the partiessharing the joint control. Significant influence means having the power to participate in the financial and operatingpolicy decision-making of the investee, but cannot control or, together with other parties, jointly control theformulation of these policies.
(1) Determination of investment cost
For long-term equity investments obtained from combination of enterprises under common control, the share of thecombined party’s owner’s equity in the book value of the consolidated financial statements of the final controllingparty which is acquired on the combination date shall be regarded as the initial investment cost for long-term equityinvestments. The capital reserves shall be adjusted if there is difference between the initial investment cost of long-term equity investment and the cash paid, the transferred non-cash assets, and the book value of the debts assumed;if the capital reserve is insufficient to offset, the retained earnings shall be adjusted. If the equity securities issuedare used as the combination consideration, the share of the combined party’s owner’s equity in the book value ofthe consolidated financial statements of the final controlling party which is acquired on the combination date shallbe regarded as the initial investment cost for long-term equity investments; the total book value of the shares issuedshall be the share capital; the capital reserves shall be adjusted if there is difference between the initial investmentcost of long-term equity investments and the total book value of the shares issued; if the capital reserves areinsufficient to balance the difference, retained earnings shall be adjusted.For long-term equity investments obtained from combination of enterprises under different control, the combinationcosts on the acquisition date shall be used as the initial investment costs of the long-term equity investment; thecombination costs include the sum of the assets paid by the acquirer, the liabilities incurred or assumed, and the fairvalue of the equity securities issued.Intermediary expenses such as auditing, legal services, assessment and consulting and other related managementexpenses incurred by the combining party or acquirer for the business combination shall be recognized as the profitand loss of the current period.Other equity investments except for long-term equity investments formed via business combination are initiallymeasured at cost. Subject to the way the long-term equity investments are obtained, the costs shall be recognizedbased on the cash actually paid by the Company for acquisition, the fair value of the equity securities issued by theCompany, the value agreed in the investment contract or agreement, the fair value or original book value of theassets swapped out in a non-monetary asset exchange transaction, and the fair value of the long-term equityinvestment itself. Expenses, taxes, and other necessary expenditures directly related to acquisition of long-termequity investments are also recognized as investment costs.
(2) Subsequent measurement and recognition of profit and loss
If the Company has common control or significant influence over the investee (except for constituting co-proprietors), the long-term equity investment shall be accounted for by using the equity method. Additionally, theCompany’s financial statements apply the cost method for long-term equity investments that can make control inthe investee
1) Long-term equity investments accounted for using the cost method
When the cost method is used, the long-term equity investments are calculated according to the initial investmentcost. In the event that the investment is added or recovered, the cost of the long-term equity investments shall beadjusted. With the exception of the price actually paid at the acquisition of investment or cash dividends or profitsincluded in consideration, declared but not issued yet, the return on investment of the current period shall berecognized according to the cash dividends or profits declared to be issued by the investee.
2) Long-term equity investments accounted for using the equity method
When using equity method, if the initial investment cost of long-term equity investments is greater than the fair
value share of the identifiable net assets entitled of the investee at the time of investment, the initial investment ofthe long-term equity investments shall not be adjusted. If the initial investment cost of long-term equity investmentsis lower than the fair value share of the identifiable net assets entitled of the investee at the time of investment, thedifference shall be recognized as profit and loss of the current period and the cost of the long-term equity investmentsshall be adjusted at the same time.When the equity method is used, return on investment and other comprehensive income shall be respectivelydetermined based on the share of net profit or loss and other comprehensive income realized by the investee thatshall be attributable or assumed, and the book value of long-term equity investments shall be adjusted at the sametime. Attributable share shall be calculated based on the profit or cash dividends declared by the investee and thebook value of long-term equity investments shall be accordingly decreased. In respect to other changes of owner’sequity of the investee in addition to net profit or loss, other comprehensive income and profit distribution, the bookvalue of long-term equity investments shall be adjusted and recognized as capital surplus. When confirming theshare of the investee’s net profit and loss, the Company shall confirm the investee’s net profit after adjustment basedon the fair value of the identifiable net assets of the investee at the acquisition of the investment. Where theaccounting policy and accounting period adopted by the investee differs from those of the Company, the investee’sfinancial statements shall be adjusted according to the Company’s accounting policy and accounting period, and thereturn on investment and other comprehensive income shall be recognized accordingly. Where the transactions arebetween the Company and the associates and joint ventures, and the assets that are invested or sold do not constitutebusiness, unrealized internal transaction profits and losses incurred between the Company and the associates andjoint ventures shall be offset with the part attributable to the Company which is calculated on a due pro-rata basis,and the return on investment shall be recognized on this basis. However, unrealized internal transaction lossesincurred between the Company and the investees shall not be offset if they fall under the impairment losses on assetstransferred.When confirming the limit of net loss incurred by the investee, the limit is the extent that the book value of the long-term equity investments and other long-term equity that substantially constitutes a net investment in the investmenttarget is written down to zero. Additionally, if the Company has obligations to assume additional losses of theinvestee, provisions are recognized according to the expected obligation, and recognized as investment losses forthe period. Where the investee records net profit in the future, the Company resumes and recognizes the profit-sharing amount after such amount makes up the unrecognized loss-sharing amount.
23. Investment property
Measurement model for investment propertyMeasurement by the cost methodDepreciation or amortization methodInvestment properties are real estate held to generate rental income or earn capital gains or both. Investmentproperties include land use rights leased out, land use rights held for transfer after appreciation, buildings leasedout, etc.Investment property is initially measured at cost. Subsequent costs are included in the investment property’s costonly when it is probable that future economic benefits associated with the item will flow to the Company and thecost of the item can be measured reliably. Other subsequent costs are recognized as profit and loss of the currentperiod when incurred.The Company adopts the cost model for subsequent measurement of investment property, and depreciates oramortizes it according to policies consistent with those for buildings or land use rights.
Impairment test method and impairment provision method for investment property are detailed in “Note V (31)Long-term asset impairment”.Investment properties are derecognized when they are disposed of or permanently withdrawn from use and it isexpected that no economic benefit can be generated from its disposal. The income from selling, transferring, writingoff or destroying investment property, less its book value and relevant taxes and fees, is recognized as profit andloss of the current period.
24. Fixed assets
(1) Recognition conditions
Fixed assets are tangible assets with a useful life of more than one accounting year that are held for production orsupply of goods or labor services, for rental to third parties, or for use in the organizations. Fixed assets shall onlybe recognized when relevant economic interest may flow into the Company and costs thereof can be reliablymeasured. Fixed assets shall be initially measured at cost and by taking into account the impact of estimated disposalexpense.
(2) Depreciation method
| Type | Depreciation method | Depreciation life | Residual value rate | Annual depreciation rate |
| Properties and buildings | Straight-line depreciation | 10 to 30 years | 5%. 10% | 3.00%, 3.17% to 9.00%, 9.50% |
| Equipment | Straight-line depreciation | 2 to 20 years | 5%. 10% | 4.50%, 4.75% to 45.00%, 47.50% |
| Motor vehicles | Straight-line depreciation | 5 to 14 years | 5%. 10% | 6.43%, 6.79% to 18.00%, 19.00% |
| Office equipment | Straight-line depreciation | 3 to 8 years | 5%. 10% | 11.25%, 11.88% to 30.00%, 31.67% |
| Production equipment | Straight-line depreciation | 2 to 5 years | 5%. 10% | 18.00%, 19.00% to 45.00%, 47.50% |
Estimated residual value refers to the current amount where, supposed the service life of a fixed asset has expiredand it is in the expected status of such expiration, the Company obtains from the disposal of such asset after theestimated disposal expense is deducted.
(3) Determination basis, pricing method and depreciation method of fixed assets acquired under financeleases：Not applicable
25. Construction work in process
Construction work in progress is measured at actual project expenditure, comprising project expenditure incurredduring construction and other necessary cost incurred.The Company’s Construction work in progress is transferred to fixed assets when the assets are ready for theirintended use. If the fixed assets under construction have reached the expected usable status but have not yetcompleted the final account for completed project, they shall be recognized as fixed assets according to theestimated value, and accrue depreciation. After the completion of the final account for completed project, the
original estimated value is adjusted according to the actual cost, but the original accrued depreciation amount isnot adjusted.Impairment test method and impairment provision method for Construction work in progress are detailed in “NoteV (31) Long-term asset impairment”.
26. Borrowing costs
Borrowing costs include interest on borrowings, amortizations of discounts or premiums, incidental expenses,exchange difference resulting from foreign-currency borrowings, etc. The borrowing costs that can be directlyattributable to the acquisition, construction or production of an asset eligible for capitalization shall be capitalizedif the capital expenditures have been incurred, the borrowing costs have been incurred, or the necessary purchase,construction or production activities to make the asset reach the expected available or marketable state have begun.When the assets with the purchase, construction or production meeting the capitalization conditions reach theexpected available or marketable state, they cease to be capitalized. Any other borrowing costs are recognized as anexpense in the period when they are incurred.The amount of interest that shall be capitalized is determined based on the interest expenses incurred in the periodwhen a specifically borrowed fund is obtained less any income earned on the unused borrowing fund as a depositin a bank or as a temporary investment. Where funds are borrowed for a general purpose, the amount of interest thatshall be capitalized is determined by multiplying the part of the accumulative asset disbursements in excess of theweighted average asset disbursement for the specifically borrowed fund by the capitalization rate of the generalborrowing used. The capitalization rate is the weighted average interest rates applicable to the general-purposeborrowings.During the capitalization, all exchange differences arising from earmarked foreign-currency borrowings shall becapitalized; exchange differences arising from general-purpose foreign-currency borrowings shall be recognized asprofit and loss of the current period.Assets eligible for capitalization refer to assets such as fixed assets, investment real estates and inventories that canreach the expected available or marketable status after a long period of purchase, construction or productionactivities.If the acquisition, construction or production of an asset eligible for capitalization is continuously suspended forover three months for abnormal reasons, capitalization of the borrowing costs shall be suspended, until theacquisition, construction or production of the asset is resumed.
27. Biological assets: None
28. Oil & gas assets: None
29. Right-of-use assets
Impairment test method and impairment provision method for right-of-use assets are detailed in "Note V (42)Leases".
30. Intangible assets
(1) Pricing method, service life, and impairment test
Intangible assets refer to identifiable non-monetary assets without physical substance owned or controlled by theCompany.Intangible assets are initially measured at cost. Costs of intangible assets are included in intangible assets’ bookvalue, only when it is probable that future economic benefits associated with the item will flow to the Company andthe cost of the item can be measured reliably. Other costs of intangible assets are recognized as profit and loss ofthe current period when incurred.Land use rights acquired are generally accounted for as intangible assets. With respect to self-built buildingsincluding plants, the relevant land use right expenses and buildings’ construction costs are accounted for asintangible assets and fixed assets, respectively. For purchased houses and buildings, the price paid is distributedbetween the land use right and the building. If it is difficult to distribute, it shall all be included in fixed assets.From the beginning of use of intangible assets with finite service life, the accumulated amount of the original valueless estimated net residual value and the provisions for asset impairment set aside shall be amortized evenly in stagesby straight-line method over their service life. Intangible assets with uncertain service lives are not amortized.The Company reviews the service life and amortization method of intangible asset with finite service life at the endof the reporting period, and a change therein (if any) shall be accounted for as a change in accounting estimates.Additionally, the Company reviews the service life and amortization method of intangible asset with uncertainservice life. If there is evidence that the period when it brings economic benefits to the enterprise is foreseeable, itsservice life shall be estimated and it is amortized according to the amortization policy for intangible assets withfinite service life.Impairment test method and impairment provision method for intangible assets are detailed in “Note V (31)”.
(2) Accounting policy for expenditure on internal research and developmentThe Company classifies the expenditure on an internal research and development project into expenditure on theresearch phase and expenditure on the development phase.Expenditure on the research phase is recognized as profit and loss of the current period when incurred.Expenditure on the development phase is recognized as intangible asset when all the following criteria are met,while expenditure in the development phase that does not meet the following criteria is recognized as profit and lossof the current period when incurred:
1) technically feasible to complete the intangible asset so that it will be available for use or sale;
2) the intention to complete the intangible asset and use or sell it;
3) how the intangible asset will generate probable future economic benefits. Among other things, the Company candemonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is tobe used internally, the usefulness of the intangible asset;
4) the availability of adequate technical, financial and other resources to complete the development and the abilityto use or sell the intangible asset;
5) the ability to measure reliably the expenditure attributable to the intangible asset during the development.Where the expenditure on research and development incurred cannot be classified into the expenditure on researchphase or the expenditure on development phase, it shall be recognized as profit and loss of the current period whenincurred.
31. Long-term asset impairment
The Company determines on the balance sheet date whether there is any indication that the non-current and non-financial assets may have been impaired, including fixed assets, construction work in progress, intangible assetswith limited service life, and investment properties measured using the cost model, and long-term equityinvestments in subsidiaries, joint ventures and associates. If there is any indication that the asset is likely to beimpaired, the Company will estimate the recoverable amount and carry out the impairment test. Impairment testsshall be conducted each year for goodwill and intangible assets with uncertain service life and not yet in use, whetheror not there is any indication of impairment.If an impairment test shows that the recoverable amount of an asset is lower than its book value, the difference isrecognized as a provision for impairment and recognized as the impairment loss. The recoverable amount isdetermined based on the higher of the net amount of the fair value of the asset minus the disposal expenses and thepresent value of the expected future cash flow of the asset. The fair value of asset is determined according to theprice of the sales agreement in fair trade. If there is no sales agreement but an active market for the asset, the fairvalue is determined according to the price offered by the buyer for the asset. If there is neither sales agreement noractive market for the asset, the fair value of the asset shall be estimated based on the best information available. Thedisposal costs include legal fees, relevant taxes and fees, as well as handling fees related to the disposal of asset,and the direct costs incurred to ensure the asset reaches the marketable state. The present value of the expectedfuture cash flow of an asset shall be determined by the discounted cash at an appropriate discount rate, on the basisof the expected future cash flow generated during the continuous use or final disposal of an asset. Provisions forasset impairment are calculated and recognized on an individual basis. If it is difficult to estimate the recoverableamount of individual assets, the Company will determine the recoverable amount of the asset group on the basis ofthe asset group to which the asset belongs. Asset group refers to the smallest asset portfolio which can independentlygenerate cash inflows.When an impairment test is performed on the goodwill separately listed in the financial statement, book value ofsuch goodwill is apportioned to the asset group or combination of asset groups that can benefit from the synergyeffect of business combination. If the test result shows that the recoverable amount of the asset group or combinationof asset groups is lower than their book value, corresponding impairment losses on goodwill will be recognized.The impairment loss shall first offset against the book value of goodwill that is apportioned to asset group or acombination of asset groups, and then offset against the book value of assets excluding goodwill in the asset groupor the combination of asset groups on a pro-rata basis according to the proportion of their book value.Once the aforementioned asset impairment loss is recognized, it will not be reversed in subsequent accountingperiods even if the value can be recovered.
32. Long-term unamortized expenses
Long-term unamortized expenses are expenses which have been incurred but shall be amortized over a period longerthan one year, including the reporting period and the future periods. Long-term unamortized expenses of theCompany mainly include office building decoration costs, sewage use rights and electricity use rights. Long-termunamortized expenses shall be amortized based on the straight-line method over the expected benefit period.
33. Contract liabilities
A contract liability is the Company’s obligation to transfer goods to a customer for which the Company has received
consideration from the customer. If the customer has paid contract consideration or the Company has obtained theunconditional right of collection before the Company transfer goods to the customer, the amount received or thereceivable is recognized as contract liability at the earlier of the time when the customer actual pays the amount andwhen the amount becomes due. Contract assets and contract liabilities under the same contract are presented on anet basis; contract assets and contract liabilities under different contracts are not offset.
34. Employee remuneration
(1) Accounting treatment method for short-term remuneration
Short-term remuneration includes salaries, bonuses, allowances and subsidies, employee welfare, medical insurancefees, maternity insurance fees, employment injury insurance fees, housing provident funds, labor union fees, staffeducation funds, and non-monetary welfare. The Company shall, within the accounting period when its employeesprovide service, recognize actual short-term remuneration as liabilities which shall be recognized as profit and lossof the current period or relevant asset costs. Wherein, non-monetary benefits are measured at fair value.
(2) Accounting treatment method for post-employment benefits
Post-employment benefit includes basic endowment insurance, unemployment insurance, etc. It also includesdefined contribution plans. Where defined contribution plans are adopted, the corresponding amount payable shallbe recognized as profit and loss of the current period or relevant asset costs in which it is incurred.
(3) Accounting treatment method for dismissal benefits
If the Company terminates the labor relationship with an employee before the employee’s labor contract expires, orproposes to give the employee compensation for encouraging the employee to voluntarily accept dismissal, theliabilities arising from the compensation giving to the employee for the termination of the labor relationship withthe employee shall be recognized as profit and loss of the current period, when the Company cannot unilaterallywithdraw the termination of the labor relationship plan or the dismissal proposal, or when it recognizes the costsrelated to the restructuring of the payment of the dismissal benefits, whichever is earlier. However, if it is expectedthat the dismissal benefits cannot be paid in full within twelve months after the end of the annual reporting period,they shall be accounted for according to other long-term employee remunerations.Internal retirement schemes for employees shall be accounted for following the same principles of the abovedismissal benefits. Where the salaries and social insurance fees of early retirees to be paid by the Company fromthe date when employees stop providing services to the normal retirement date meet the recognition conditions forprojected liabilities, they shall be recognized as profit and loss of the current period.
(4) Accounting treatment method for other long-term employee benefits
Other long-term benefits provided by the Company to employees that meet the conditions of the defined contributionplan are accounted for in accordance with the defined contribution plan; other long-term benefits are accounted forin accordance with the defined benefit plan.
35. Lease liabilities
Recognition and accounting treatment methods of lease liabilities are detailed in "Note V (42) Leases".
36. Provision
An obligation related to contingent issues and meeting the following conditions shall be deemed a provision: (1)such an obligation is a current one assumed by the Company; (2) fulfilling such an obligation might cause economicbenefits to flow out of the Company; and (3) the amount of such an obligation is measurable reliably.On the balance sheet date, a provision is measured at the best estimate of the expenditure required to settle therelated present obligation, with comprehensive consideration of factors such as the risks, uncertainty and time valueof money relating to a contingency.A provision is separately recognized as an asset and the recognized compensation amount shall not exceed the bookvalue of the provision, when all or part of the expenses required to pay off the provision are expected to becompensated by a third party and the amount of compensation is basically determined to be receivable.
37. Share-based payment
Share-based payment is the transaction made through granting equity instruments or bearing the liabilitiesrecognized based on such instruments in exchange for services rendered by employees or other parties. TheCompany’s share-based payment includes equity-settled share-based payment and cash-settled share-basedpayment.
(1) Equity-settled share-based payment
Where the share payment is settled through equity for acquisition of service from employees, it shall be measuredat the fair value of the equity instruments granted to the employees. If the right cannot be exercised until the vestingperiod ends or until the prescribed performance conditions are met, the amount of such fair value shall, based onthe best estimate of the number of vested equity instruments, be recognized as the relevant costs or expenses bystraight-line method; if the right can be exercised immediately following the grant, the amount of such fair valueshall be recognized as the relevant costs or expenses on the grant date, and the capital reserve shall be increasedaccordingly.On each balance sheet date within the vesting period, the Company carries out the best estimation based on suchfollow-up information such as the variation of the number of vested staff acquired recently, and revises the numberof estimated vested equity instruments. The impact of the above estimates shall be recognized as the relevant costsor expenses of the current period, and the capital reserve shall be adjusted accordingly.For an equity-settled share-based payment in return for the service of any other party, if the fair value of the serviceof any other party can be reliably measured, it shall be measured at the fair value of the service of any other partyon the acquisition date; if the fair value of the service of any other party cannot be reliably measured, but the fairvalue of the equity instruments can be reliably measured, it shall be measured at the fair value of the equityinstruments on the acquisition date and included in the relevant costs or expenses, and the shareholders’ equity shallbe increased correspondingly.
(2) Cash-settled share payment
The cash-settled share-based payment shall be measured at the fair value of the Company’s liabilities determinedbased on shares or other equity instruments. If the right may be exercised immediately after the grant, relevant costsor expenses shall be recognized the grant date, and the liabilities shall be increased accordingly. If the right may notbe exercised until the vesting period ends or until the specified performance conditions are met, on each balancesheet date within the vesting period, the services obtained in the current period shall, based on the best estimate ofthe information about the exercisable right, be recognized as the relevant costs or expenses at the fair value of theliability undertaken by the Company, and liabilities shall be increased accordingly.The fair value of liabilities is re-measured and any change thereto is recognized as profit and loss of the currentperiod on each balance sheet date and settlement date prior to settlement of the relevant liabilities.
38. Preference shares, perpetual bonds and other financial instruments: None
39. Revenue
Accounting policy for recognition and measurement of revenue
Revenue is the total inflow of economic benefits unrelated to the capital invested by the shareholders which areformed in the daily activities of the Company and can lead to an increase in shareholders’ equity. The revenue isrecognized when the customers take control of the relevant goods (including services, same for below) if the contractbetween the Company and the customers meet all the following conditions: 1) the parties to the contract haveapproved such contract and undertake to perform their respective obligations; 2) the contract has specified the rightsand obligations of the parties thereto and in connection with the transfer of goods or provision of labor services; 3)the contract sets out clear payment terms related to the transfer of goods; 4) the contract has commercial substance,meaning that the performance thereof will change the risk, time distribution or amount of the Company’s futurecash flow; 5) the Company is very likely to recover the consideration obtained by transferring goods to customers.Wherein, taking control of relevant goods means being able to control the use of the goods and obtain almost alleconomic benefits therefrom.On the enforcing date of the contract, the Company identifies all individual performance obligations in the contract,and apportions the transaction price to each individual performance obligation according to the relative proportionof the individual selling price of the goods. When determining the transaction price, the Company has consideredthe impact of such factors including variable consideration, major financing component of the contract, non-cashconsideration, and consideration payable to the customer.With respect to each individual performance obligation of the contract, the Company will recognize the transactionprice apportioned to such obligation as revenue based on the progress of performance during the relevantperformance periods, if any of the following conditions is met: 1) the customer obtains and consumes the economicbenefits brought by the Company’s performance during such performance; 2) the customer can control the goodsin progress during the Company’s performance; 3) the goods produced from the Company’s performance hasirreplaceable use, and in respect of the portion of revenue arising from the Company’s performance completed todate, the Company is entitled to collect revenue during the entire validity period of the contract. The progress ofperformance is determined according to the nature of the transferred goods using the input or output method. Whensuch progress cannot be reasonably determined, if the costs incurred are expected to be compensated, the Companyrecognizes revenue based on the amount of costs incurred, until the progress of performance can be reasonablydetermined.
If none of the aforesaid conditions is met, the Company will recognize the transaction price apportioned to suchindividual performance obligation when the customer obtains the control over relevant goods. To decide whetherthe customer has obtained the control over goods, the Company takes into account the following indications: 1) theenterprise has the present right to collection for the goods, meaning the customer bears the present obligation topayment for the goods; 2) the enterprise has passed the legal title to the goods to the customer, meaning the customerhas had the legal title to the goods; 3) the enterprise has transferred the physical possession of the goods to thecustomer, meaning the customer has had the physical possession of the goods; 4) the enterprise has transferred themajor risks and remunerations concerning the title to the goods to the customer, meaning the customer has obtainedthe major risks and remunerations concerning the title to the goods; 5) the customer has accepted the goods; 6) otherindications to show that the customer has obtained the control over the goods.Generally, the Company’s business of goods selling only comprises the performance obligation of transferring thegoods. The control of the goods is transferred when they are sent out and the Company receives the signed receiptand other documents from the customer, so the Company confirms the realization of revenue at that point in time.The discounts, rewards and other arrangements in some contracts between the Company and customers constitutevariable consideration. The Company uses the expected value method or the most likely amount to determine thebest estimates for variable consideration, but the transaction price containing variable consideration shall not exceedthe amount of cumulatively recognized revenue that is unlikely to have major reversals when the relevantuncertainties are eliminated.Different business models are adopted for different businesses, which may lead to the differences in the accountingpolicy for recognition of revenue.None
40. Government grants
Government grants are monetary or non-monetary assets acquired by the Company from the government free ofcharge, excluding the capital invested by the government as an investor and granted corresponding owner’s equity.Government grants are classified into government grants related to assets and government grants related to income.The Company defines the government grants for purchasing or constructing or otherwise forming long-term assetsas asset-related government grants; other government grants are defined as the income-related government grants.Government grants shall be measured at the amount received or receivable if they are monetary assets. Non-monetary government grants shall be measured at fair value; if the fair value cannot be reliably obtained, they shallbe measured at the nominal amount. The government grants measured at the nominal amount shall be directlyrecognized as the profit and loss of the current period.Asset-related government grants are recognized as deferred income, and included in the profit and loss of the currentperiod in stages according to a reasonable and systematic method over the service life of the relevant assets. Theincome-related government grants shall be recognized as deferred income if they are used to compensate relevantexpenses or losses in subsequent periods, and shall be recognized as profit and loss of the current period during therecognition of related expenses; the grants used to compensate related expenses or losses already incurred shall bedirectly recognized as profit and loss of the current period.The government grants related to both assets and income shall be accounted for by distinguishing different parts; ifit is difficult to distinguish, they shall be, as a whole, classified as income-related government grants.Government grants related to the Company’s daily activities shall be recognized as other profit and loss or writedown relevant costs according to the essence of economic business; those unrelated to the Company’s daily activities
shall be recognized as non-operating income and expenditure.If the recognized government grants need to be returned and there is relevant deferred income balance, the bookbalance of relevant deferred income shall be written off, and the excess shall be recognized as profit and loss of thecurrent period; otherwise, government grants shall be directly recognized as profit and loss of the current period.
41. Deferred income tax assets/deferred income tax liabilities
(1) Current income tax
On the balance sheet date, the Company measures a current tax liability (or asset) arising from the current and priorperiods based on the amount of income tax expected to be paid by the Company (or returned by tax authority)calculated by related tax laws. The taxable income which is the basis for calculation of the current income tax iscalculated after appropriate adjustments to the pretax accounting profits for the reporting period.
(2) Deferred income tax assets and deferred income tax liabilities
For the difference between the book value of certain assets and liabilities and their tax bases, and the temporarydifferences between the book values and the tax bases of items, of which the tax bases can be determined for taxpurposes according to the tax laws but which have not been recognized as assets and liabilities, the Companyrecognizes deferred income tax assets and deferred income tax liabilities using the balance sheet debt method.Where the taxable temporary differences arise from the initial recognition of goodwill and the initial recognition ofan asset or liability arising from the transaction that is not a business combination, nor, at the time of the transaction,affects neither accounting profit and taxable profit (or deductible loss), the relevant deferred income tax liabilityshall not be recognized. Additionally, in respect of taxable temporary difference associated with investments insubsidiaries, joint ventures and associates, where the Company can control the timing of the reversal of thetemporary differences and it is probable that the temporary differences will not be reversed in the foreseeable future,the relevant deferred income tax liability shall not be recognized. Other than the above exceptions, the Companyshall recognize deferred income tax liabilities arising out from all other taxable temporary differences.Where the deductible temporary differences arise from the initial recognition of an asset or liability arising from thetransaction that is not a business combination, nor, at the time of the transaction, affects neither accounting profitand taxable profit (or deductible loss), the relevant deferred income tax liability shall not be recognized. Additionally,in respect of deductible temporary difference associated with investments in subsidiaries, joint ventures andassociates, where it is probable that the temporary differences will not be reversed in the foreseeable future ortaxable profit will not be available against which the deductible temporary differences can be utilized in the future,the relevant deferred income tax liability shall not be recognized. Other than the above exceptions, the Companyrecognizes a deferred tax asset for other deductible temporary differences, to the extent that it is probable that futuretaxable profit will be available against which the deductible temporary differences can be utilized.The tax effects of deductible losses and taxes available for carrying over are recognized as an asset when it isprobable that future taxable profits would be available against which these losses can be utilized.At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates that are expected to applyto the period when the asset is realized or the liability is settled, according to the requirements of tax laws.The book value of deferred tax assets is reviewed at the balance sheet date and written down to the extent that it isno longer probable that sufficient taxable profit will be available in future periods to allow the deferred tax assetsto be utilized. Such write-down is reversed when it becomes probable that sufficient taxable profits will be available.
(3) Income tax expenses
Income taxes comprise current income tax and deferred income tax.The current income tax and deferred income tax expense or income is recognized as the profit and loss of the currentperiod except that the current income tax and deferred income tax is related to transactions or events, which arerecognized as other comprehensive income or directly recognized as shareholders’ equity, and thus recognized asother comprehensive income or shareholders’ equity, and that the book value of goodwill is adjusted due to deferredincome tax arising from business combination.
42. Leases
A lease is a contract whereby the Company assigns or acquires the right to control the use of one or more identifiedassets for a specified period in exchange for or with payment of consideration. The Company evaluates whether acontract is a lease or contains a lease at its inception date.
(1) The Company as the lessee
Main types of assets leased by the Company are properties and buildings.
① Initial measurement
Except for short-term leases or low-value asset leases, the Company recognizes the right to use the leased assetduring the lease term as a right-of-use asset and recognizes the present value of unpaid lease payments as a leaseliability. When calculating the present value of lease payments, the Company adopts the interest rate implicit in thelease as the discount rate; if the interest rate implicit in the lease cannot be determined, the lessee’s incrementalborrowing rate is used as the discount rate.
② Follow-up measurement
The Company depreciates the right-of-use assets with reference to relevant depreciation provisions specified in theAccounting Standards for Business Enterprises No. 4 - Fixed Assets (see "Note V ((24) Fixed Assets"). If it isreasonably ascertained that the ownership of the asset will be transferred to the lessee at the end of the lease term,then depreciation period runs to the end of the useful life of the lease asset. If it cannot be reasonably ascertainedthat the ownership of the leased asset will be transferred to the lessee at the end of the lease term, then depreciationperiod runs to the earlier of the end of the useful life of the asset or the end of the lease term.For lease liabilities, the Company calculates its interest expenses in each period of the lease term at a fixed periodicinterest rate which is included in the profit and loss of the current period. Variable lease payments that are notincluded in the measurement of lease liabilities are included in the current profit and loss when they are actuallyincurredAfter the commencement date of the lease term, when there is a change in the actual fixed payment amount, achange in the estimated payable amount of the guaranteed residual value, a change in the index or ratio used todetermine the lease payment amount, or a change in the evaluation results or actual exercise of the purchase option,renewal option or termination option, the Company re-measures the lease liability according to the present value ofthe changed lease payments and adjusts the book value of the right-of-use asset accordingly. If the book value ofthe right-of-use asset has been reduced to zero but the lease liability still needs to be further reduced, the Companyincludes the remaining amount in the profit and loss of the current period.
③ Short-term leases and low-value asset leases
For short-term leases (leases with a term of not more than 12 months since the lease commencement date) and low-
value asset leases Lease liabilities, the Company adopts a simplified approach, i.e. Not recognizing as right-of-useassets but as the cost of the related asset or as profit and loss of the current period in accordance with the straight-line method or other systematically reasonable methods during each period of the lease.
(2) The Company as the lessor
On the lease commencement date, the company divides leases into finance leases and operating leases based on thesubstance of the transaction. Leases of assets where substantially all the risks and rewards of ownership have beentransferred are classified as finance leases. Other leases than the finance leases are classified as operating leases.i. Operating leaseThe Company adopts the straight-line method to recognize lease receipts from operating leases as rental income foreach period of the lease term. Variable lease payments related to operating leases that are not included in leasereceipts are included in the current profit and loss when they are actually incurred.ii. Finance leaseThe company recognizes the finance lease receivables and derecognizes the finance lease assets on thecommencement date of the lease term. The financial lease receivables are initially measured by the net investmentin the lease (the sum of the unguaranteed residual value and the present value of the lease receipts not yet receivedat the beginning of the lease term, discounted at the interest rate implicit in the lease), while interest income iscalculated and recognized according to the fixed periodic interest rate in each period of the lease term. Variablelease payments obtained by the Company that are not included in the measurement of the net value of lease liabilitiesare included in the current profit and loss when they are actually incurred.
(1) Accounting treatment method for operating lease: Not applicable
(2) Accounting treatment method for finance lease: Not applicable
43. Other important accounting policies and accounting estimates
None
44. Significant changes of accounting policies and accounting estimates
(1) Significant changes of accounting policies
√ Applicable □ Not applicable
| Contents and reasons for changes to accounting policies | Approval procedure | Remarks |
| In December 13, 2022, the Ministry of Finance issued the Interpretation No. 16 to Accounting Standards for Business Enterprises (hereinafter referred to as the “Interpretation No. 16”), which stipulated that contents regarding “accounting treatment when the deferred tax related to assets or liabilities arising from a single transaction does not apply the initial recognition exemption”, “accounting treatment for the dividends of financial instruments classified as equity instruments by the issuer” and “accounting treatment for the change of cash-settled share-based payment transaction to equity-settled shared-based payment transaction”. | On August 25, 2023, the Company convened the 23th meeting of the fifth session of the Board of Directors and the 18th meeting of the fifth session of the Board of Supervisors, and approved the Proposal on Changes to Accounting Policies. | Details can be found in the Announcement on Changes to Accounting Policies dated August 28, 2023 on CNINFO (http://www.cninfo.com.cn) . |
(2) Significant changes of accounting estimates
□ Applicable √ Not applicable
45. Others: None
VI. Taxes
1. Main tax types and tax rates
| Tax | Tax basis | Tax rate |
| Value-added tax | Taxable VAT (calculated based on the difference of deducting the amount of input tax which is allowed to be deducted in the current period from the result of multiplying taxable sales by applicable tax rate) | 13%, 9%,6%,5% |
| City construction and maintenance tax | Turnover tax paid | 5%, 7% |
| Corporate income tax | Taxable income | 15%, 16.5%, 20%, 25%, progressive rate |
| Education surcharges | Turnover tax paid | 3% |
| Local education surcharges | Turnover tax paid | 2% |
Description of disclosure if different income tax rates apply to different corporate taxpayers
| Name of taxpayer | Income tax rate |
| C&S Paper Co., Ltd., Zhongshan Zhongshun Trading Co., Ltd., C&S (Hubei) Paper Co., Ltd., Zhejiang Zhongshun Paper Co., Ltd., Chengdu Zhongshun Paper Co., Ltd., Hangzhou Jie Rou Trading Co., Ltd., Beijing C&S Paper Co., Ltd., Sun Daily Necessities Co., Ltd., C&S (Dazhou) Paper Co., Ltd., Shanghai Huicong Paper Co., Ltd., Yunfu Hengtai Trading Co., Ltd., C&S (Jiangsu) Paper Co., Ltd., Xiaogan C&S Trading Co., Ltd. and Quxian Jiezhu Construction and Development Co., Ltd. | 25% |
| C&S (Zhongshan) Paper Co., Ltd., Beijing Bloomage Jierou Biotechnology Co., Ltd., Dolemi Sanitary Products Co., Ltd., Zhengzhou Dolemi Sanitary Products Co., Ltd., Xi’an Dolemi Sanitary Products Co., Ltd, Guangdong Huashun Material Technology Co., Ltd and Guangdong Laotongxue Information Technology Co., Ltd. | 20% |
| Zhong Shun International Co., Ltd., and C&S Hong Kong Co., Ltd. (Note 1) | 16.50% |
| Jiangmen Zhongshun Paper Co., Ltd., C&S (Sichuan) Paper Co., Ltd., and C&S (Yunfu) Paper Co., Ltd. | 15% |
| C&S (Macao) Co., Ltd. (Note 2) | Progressive rate |
2. Tax incentive
C&S (Sichuan) Paper Co., Ltd. was certified as a high-tech enterprise of Sichuan Province in 2020 and was awardedthe Certificate of High-tech Enterprise (No. GR202051001193) in September, 2020, with a valid term of three years.Therefore, the corporate income tax is calculated at a tax rate of 15% in 2021.C&S (Yunfu) Paper Co., Ltd. was certified as a high-tech enterprise of Guangdong Province in 2020 and wasawarded the Certificate of High-tech Enterprise (No. GR202044006774) in December, 2020, with a valid term ofthree years. Therefore, the corporate income tax is calculated at a tax rate of 15% in 2021.Jiangmen Zhongshun Paper Co., Ltd. was certified as a high-tech enterprise of Guangdong Province in 2021 andwas awarded the Certificate of High-tech Enterprise (No. GR202144006582) in December 2021, with a valid termof three years. Therefore, the corporate income tax is calculated at a tax rate of 15% in 2021.According to Interpretation No. 16 and in combination of its own conditions, the Company started to implement thecontent regarding “accounting treatment when the deferred tax related to assets or liabilities arising from a singletransaction does not apply the initial recognition exemption” from January 1, 2023. In accordance with relevant
provisions of the Announcement of the State Administration of Taxation on Issues Concerning the Implementationof the Inclusive Income Tax Deduction and Exemption Policies for Small Low-profit Enterprises (STA Doc. [2022]No. 13), the policy on inclusive income tax deduction and exemption for small low-profit enterprises is applicableto C&S (Zhongshan) Paper Co., Ltd., Beijing Bloomage Jierou Biotechnology Co., Ltd., Dolemi Sanitary ProductsCo., Ltd., Zhengzhou Dolemi Sanitary Products Co., Ltd., Xi’an Dolemi Sanitary Products Co., Ltd, GuangdongHuashun Material Technology Co., Ltd and Guangdong Laotongxue Information Technology Co., Ltd in 2023. Tobe specific, the annual taxable income of these enterprises that is not more than RMB3 million shall be included intheir taxable income at the reduced rate of 25%, with the applicable corporate income tax rate of 20%.
3. Others
Note 1: C&S Hong Kong Co., Ltd. is a Hong Kong-based company incorporated according to the laws of HongKong, and adopts the tax laws thereof. The tax rate for its income tax is 16.50%.Note 2: C&S (Macao) Co., Ltd. is a Macao-based company incorporated according to the laws of Macao. Itscomplementary tax adopts a progressive rate (tax on taxable income that is less than MOP300,000 is exempted, andthe taxable income that is more than MOP 300,000 is taxed at 12%).
VII. Notes to Items of the Consolidated Financial Statements
1. Monetary fund
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Cash on hand | 41,732.13 | 20,309.66 |
| Bank deposits | 1,640,753,819.23 | 1,231,680,951.11 |
| Other monetary funds | 79,362,880.15 | 93,086,280.72 |
| Total | 1,720,158,431.51 | 1,324,787,541.49 |
| Including: Total deposits in overseas banks | 290,901,965.21 | 165,068,426.96 |
| The total amount of funds with restrictions on use due to mortgage, pledge, or freezing | 70,238,291.22 | 75,889,516.90 |
Other description
Balance of other monetary funds at the end of the reporting period is the security deposit for issuing letters of creditand bank acceptance bill and balance of Alipay. Refer to "Note VII (81)" for circumstances where ownership ofmonetary funds is restricted.
2. Tradable financial assets: None
3. Derivative financial assets: None
4. Notes receivable
(1) Notes receivable presentation by category
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Bank acceptance bill | 11,389,001.93 | 9,871,092.80 |
| Trade acceptance bill | 1,500,000.00 | |
| Total | 11,389,001.93 | 11,371,092.80 |
If the bad debt reserve of notes receivable is set aside according to general model of expected credit loss, pleaserefer to the disclosure method of other receivables to disclose relevant information on bad debt reserve:
□ Applicable √ Not applicable
(2) Bad debt reserve that is set aside, recovered or transferred back in the reporting period: NoneWherein, the amount of recovered or transferred back bad debt reserve in the reporting period is important:
□ Applicable √ Not applicable
(3) Notes receivable that the Company has pledged at the end of the reporting period: None
(4) Notes receivable that the Company has endorsed or discounted at the end of the reporting period and arenot due on the balance sheet date: None
(5) Notes that are transferred to notes receivable because the drawer does not perform the contract at theend of the reporting period: NoneOther description
1.As of June 30, 2023, the Company has no pledged notes receivable as at the end of the year.
2.As of June 30, 2023, the Company has no derecognized notes receivable that are endorsed or discounted but notdue as at the end of the year.
3.As of June 30, 2023, the Company has no notes that are transferred to notes receivable because the drawer doesnot perform the contract as at the end of the year.
(6) Notes receivable actually written off in the reporting period: None
5. Accounts receivable
(1) Accounts receivable disclosure by category
Unit: RMB
| Category | Balance at the end of the period | Balance at the beginning of the period | ||||||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |||||
| Amount | Percentage | Amount | Provision ratio | Amount | Percentage | Amount | Provision ratio | |||
| Accounts receivable for which bad debt reserve is set | 34,992,417.09 | 2.87% | 15,136,103.86 | 43.26% | 19,856,313.23 | 34,992,417.09 | 3.10% | 15,136,103.86 | 43.26% | 19,856,313.23 |
| aside individually | ||||||||||
| Including: | ||||||||||
| Accounts receivable for which bad debt reserve is set aside in portfolios | 1,183,559,651.60 | 97.13% | 29,684,760.92 | 2.51% | 1,153,874,890.68 | 1,092,720,726.79 | 96.90% | 28,446,901.51 | 2.60% | 1,064,273,825.28 |
| Including: | ||||||||||
| Portfolio based on aging | 1,183,559,651.60 | 97.13% | 29,684,760.92 | 2.51% | 1,153,874,890.68 | 1,092,720,726.79 | 96.90% | 28,446,901.51 | 2.60% | 1,064,273,825.28 |
| Total | 1,218,552,068.69 | 100.00% | 44,820,864.78 | 3.68% | 1,173,731,203.91 | 1,127,713,143.88 | 100.00% | 43,583,005.37 | 3.86% | 1,084,130,138.51 |
Bad debt reserve set aside individually: 15,136,103.86
Unit: RMB
| Name | Balance at the end of the period | |||
| Book balance | Impairment provision | Ratio of provision | Reason for provision | |
| Institution 1 | 22,180,045.16 | 8,218,072.46 | 37.05% | It is difficult to recover all goods payments due to the poor business performance of the customer. |
| Institution 2 | 6,695,735.27 | 4,455,035.27 | 66.54% | It is difficult to recover all goods payments due to the poor business performance of the customer. |
| Institution 3 | 6,116,636.66 | 2,462,996.13 | 40.27% | It is difficult to recover all goods payments due to the poor business performance of the customer. |
| 合计 | 34,992,417.09 | 15,136,103.86 | ||
Bad debt reserve set aside in portfolios: 29,684,760.92
Unit: RMB
| Name | Balance at the end of the period | ||
| Book balance | Impairment provision | Ratio of provision | |
| Within the credit period | 1,066,099,812.77 | 21,321,996.26 | 2.00% |
| Credit period - 1 year | 108,280,836.21 | 5,414,041.81 | 5.00% |
| 1 to 2 years | 4,070,310.96 | 610,546.64 | 15.00% |
| 2 to 3 years | 1,080,848.11 | 324,254.43 | 30.00% |
| 3 to 5 years | 4,027,843.55 | 2,013,921.78 | 50.00% |
| Over 5 years | 1,183,559,651.60 | 29,684,760.92 | |
Description of reason for the portfolio:
Accounts receivable with the same aging have similar credit risk characteristics.If the bad debt reserve of accounts receivable is set aside according to general model of expected credit loss,
please refer to the disclosure method of other receivables to disclose relevant information on bad debt reserve:
□ Applicable √ Not applicable
Disclose by aging
Unit: RMB
| Aging | Book balance |
| Within 1 year (inclusive) | 1,174,380,648.98 |
| 1 to 2 years | 10,766,046.23 |
| 2 to 3 years | 1,080,848.11 |
| Over 3 years | 32,324,525.37 |
| 3 to 4 years | 49,897.62 |
| 4 to 5 years | 3,977,945.93 |
| Over 5 years | 28,296,681.82 |
| Total | 1,218,552,068.69 |
(2) Bad debt reserve that is set aside, recovered or transferred back in the reporting periodProvision of bad debt reserve of the reporting period:
Unit: RMB
| Category | Balance at the beginning of the period | Amount of change in the reporting period | Balance at the end of the period | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Accounts receivable | 43,583,005.37 | 1,237,859.41 | 44,820,864.78 | |||
| Total | 43,583,005.37 | 1,237,859.41 | 44,820,864.78 | |||
Wherein, the amount of recovered or transferred back bad debt reserve in the reporting period is important: None
(3) Accounts receivable actually written off in the reporting period: None
(4) Top five debtors in closing balance of accounts receivable
Unit: RMB
| Name of institution | Balance of accounts receivable at the end of the period | Percentage in total balance of accounts receivable at the end of the period | Balance for bad debt reserve at the end of the period |
| 1st | 424,294,485.50 | 34.82% | 8,493,895.37 |
| 2nd | 103,051,042.06 | 8.46% | 3,228,781.62 |
| 3rd | 48,829,431.30 | 4.01% | 976,588.63 |
| 4th | 33,947,269.76 | 2.79% | 695,730.59 |
| 5th | 25,692,973.85 | 2.11% | 513,859.48 |
| Total | 635,815,202.47 | 52.19% |
(5) Amounts of assets and liabilities that are formed by the transfer and ongoing involvement of accountsreceivableThe Company has no amounts of assets and liabilities that are formed by the transfer and ongoing involvement ofaccounts receivable as at the end of the reporting period.
(6) Accounts receivable derecognized due to transfer of financial assets
The Company has no accounts receivable derecognized due to the transfer of financial assets as at the end of thereporting period.Other description: None.
6. Accounts receivable financing
Increase and decrease of accounts receivable financing and changes in fair value in the reporting period
□ Applicable √ Not applicable
If the provisions for asset impairment of accounts receivable financing are set aside according to general model ofexpected credit loss, please refer to the disclosure method of other receivables to disclose relevant information onprovisions for asset impairment:
□ Applicable √ Not applicable
7. Prepayments
(1) Prepayments presentation by aging
Unit: RMB
| Aging | Balance at the end of the period | Balance at the beginning of the period | ||
| Amount | Percentage | Amount | Percentage | |
| Within 1 year | 15,250,103.86 | 100.00% | 15,291,351.73 | 100.00% |
| Total | 15,250,103.86 | 15,291,351.73 | ||
Explanation on the reason of untimely settlement of prepayments whose age exceeds one year with significantamount: None
(2) Top five payees in closing balance of prepayment
The Company’s total prepayment amount of the top five payees in closing balance of prepayment is RMB11,089,368.68, accounting for 72.72% of closing balance of prepayment.
8. Other receivables
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Other receivables | 15,877,583.96 | 16,915,272.60 |
| Total | 15,877,583.96 | 16,915,272.60 |
(1) Interest receivable
1) Classification of interest receivable: None
2) Significant overdue interest: None
3) Provision of bad debt reserve
□ Applicable √ Not applicable
(2) Dividends receivable
1) Classification of dividends receivable: None
2) Significant dividends receivable exceeding one year: None
3) Provision of bad debt reserve
□ Applicable √ Not applicable
Other description: None
(3) Other receivables
1) Classification of other receivables by nature
Unit: RMB
| Nature | Book balance at the end of the period | Book balance at the beginning of the period |
| Current accounts | 7,787,922.39 | 7,890,771.57 |
| Margins and deposits | 8,062,298.78 | 6,069,070.04 |
| Reserve | 2,446,003.40 | 2,691,372.66 |
| Others | 713,840.99 | 2,869,499.74 |
| Total | 19,010,065.56 | 19,520,714.01 |
2) Provision of bad debt reserve
Unit: RMB
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit loss in the next 12 months | Expected credit losses in the whole duration (without credit impairment) | Expected credit losses in the whole duration (with credit impairment) | ||
| Balance as at January 1, 2023 | 2,605,441.41 | 2,605,441.41 | ||
| Balance as at January 1, 2023 in the reporting period | ||||
| Provision in the | 527,040.19 | 527,040.19 |
| reporting period | ||||
| Balance as at June 30, 2023 | 3,132,481.60 | 3,132,481.60 |
Description of changes in the book balance where there are significant changes in provision for the current period
□ Applicable √ Not applicable
Disclose by aging
Unit: RMB
| Aging | Balance at the end of the period |
| Within 1 year (inclusive) | 14,461,160.13 |
| 1 to 2 years | 382,317.36 |
| 2 to 3 years | 1,071,090.67 |
| Over 3 years | 3,095,497.40 |
| 3 to 4 years | 487,250.00 |
| 4 to 5 years | 1,642,247.22 |
| Over 5 years | 966,000.18 |
| Total | 19,010,065.56 |
3) Bad debt reserve that is set aside, recovered or transferred back in the reporting periodProvision of bad debt reserve of the reporting period:
Unit: RMB
| Type | Balance at the beginning of the period | Amount of change in the reporting period | Balance at the end of the period | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Other receivables | 2,605,441.41 | 527,040.19 | 3,132,481.60 | |||
| Total | 2,605,441.41 | 527,040.19 | 3,132,481.60 | |||
4) Other receivables actually written off in the reporting period: None
5) Top five debtors in closing balance of other accounts receivable
Unit: RMB
| Name of institution | Nature of the amount | Balance at the end of the period | Aging | Percentage in total balance of other receivables at the end of the period | Balance of bad debt reserve at the end of the period |
| 1st | Current accounts | 1,002,000.00 | Within 1 year | 5.27% | 50,100.00 |
| 2nd | Margins and deposits | 900,500.00 | 4-5 years | 4.74% | 450,250.00 |
| 3rd | Margins and deposits | 900,000.00 | Within 1 year, 1-2 years, 2- 3 years, 3-4 years, over 5 years | 4.73% | 655,000.00 |
| 4th | Margins and deposits | 645,500.00 | Within 1 year, 1-2 years, 2- 3 years, 3-4 years, 4-5 years， over 5 years | 3.40% | 326,025.00 |
| 5th | Current accounts | 629,891.67 | Within 1 year | 3.31% | 31,494.58 |
| Total | 4,077,891.67 | 21.45% | 1,512,869.58 |
6) Receivables involving government grants: None
7) Other receivables derecognized due to the transfer of financial assets: None
8) Amount of assets and liabilities that are formed by the transfer and ongoing involvement of otherreceivables: None
9. Inventory
Whether the Company needs to comply with requirements for disclosure in the real estate industry: No
(1) Classification of inventories
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period | ||||
| Book balance | Provision for impairment of inventories or provision for contract performance cost | Book value | Book balance | Provision for impairment of inventories or provision for contract performance cost | Book value | |
| Raw materials | 498,099,743.91 | 3,930,313.13 | 494,169,430.78 | 1,120,294,078.05 | 3,958,483.30 | 1,116,335,594.75 |
| Work-in-process products | 87,256,007.12 | 1,375,287.67 | 85,880,719.45 | 108,420,732.66 | 858,734.39 | 107,561,998.27 |
| Commodity stocks | 602,180,835.14 | 9,842,173.05 | 592,338,662.09 | 619,274,397.98 | 10,309,137.57 | 608,965,260.41 |
| Packages | 31,830,600.64 | 484,291.64 | 31,346,309.00 | 37,055,688.67 | 416,133.78 | 36,639,554.89 |
| Low-value consumables | 21,931,177.76 | 3,110,711.23 | 18,820,466.53 | 20,499,334.30 | 2,540,724.48 | 17,958,609.82 |
| Materials for consigned processing | 18,587,387.75 | 18,587,387.75 | 24,169,705.41 | 24,169,705.41 | ||
| Total | 1,259,885,752.32 | 18,742,776.72 | 1,241,142,975.60 | 1,929,713,937.07 | 18,083,213.52 | 1,911,630,723.55 |
(2) Provision for impairment of inventories or provision for contract performance cost
Unit: RMB
| Item | Balance at the beginning of the period | Increase in the current period | Decrease in the current period | Balance at the end of the period | ||
| Provision | Others | Reversal or written off | Others | |||
| Raw materials | 3,958,483.30 | 554,386.19 | 582,556.36 | 3,930,313.13 | ||
| Work-in-process products | 858,734.39 | 1,241,360.11 | 724,806.83 | 1,375,287.67 | ||
| Commodity stocks | 10,309,137.57 | 4,869,241.11 | 5,336,205.63 | 9,842,173.05 | ||
| Packages | 416,133.78 | 291,636.17 | 223,478.31 | 484,291.64 | ||
| Low-value consumables | 2,540,724.48 | 700,148.02 | 130,161.27 | 3,110,711.23 | ||
| Total | 18,083,213.52 | 7,656,771.60 | 6,997,208.40 | 18,742,776.72 |
(3) Explanation that balance of inventory at the end of the reporting period includes amount of capitalizationof borrowing costs: None
(4) Explanation on amortized amount of contract performance cost in the reporting period: None
10. Contract assets: None
11. Assets held for sale: None
12. Non-current assets due within one year: None
13. Other current assets
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Large-denomination Certificate of Deposit | 601,000,000.00 | 210,000,000.00 |
| Wealth management products | 520,600,000.00 | |
| Input VAT to be deducted | 26,340,360.89 | 101,907,351.54 |
| Treasury bond reverse repurchase | 10,007,000.00 | 23,001,000.00 |
| Prepaid corporate income tax | 51,002.37 | |
| Total | 1,157,947,360.89 | 334,959,353.91 |
14. Investments in creditor’s rights: None
15. Other investments in creditor’s rights: None
16. Long-term receivables
(1) Long-term receivables: None
(2) Long-term receivables derecognized due to the transfer of financial assets: None
(3) Amounts of assets and liabilities that are formed by the transfer and ongoing involvement of long-termreceivables: None
17. Long-term equity investment: None
18. Investment in other equity instruments: None
19. Other non-current financial assets: None
20. Investment property
(1) Investment property measured at cost
√ Applicable □ Not applicable
Unit: RMB
| Item | Properties and buildings | Land use rights | Construction work in progress | Total |
| I. Original Book Value | ||||
| 1. Balance at the beginning of the period | 31,072,632.92 | 21,661,131.29 | 52,733,764.21 | |
| 2. Increase in the current period | ||||
| (1) External purchase | ||||
| (2) Inventory\fixed assets\transfer from construction work in progress | ||||
| (3) Increase in business combination | ||||
| 3. Decrease in the current period | ||||
| (1) Disposal | ||||
| (2) Other transfers out | ||||
| 4. Balance at the end of the period | 31,072,632.92 | 21,661,131.29 | 52,733,764.21 | |
| II. Accumulated Depreciation and |
| Amortization | ||||
| 1. Balance at the beginning of the period | 15,193,533.87 | 5,838,632.80 | 21,032,166.67 | |
| 2. Increase in the current period | 549,514.14 | 168,927.96 | 718,442.10 | |
| (1) Provision or amortization | 549,514.14 | 168,927.96 | 718,442.10 | |
| 3. Decrease in the current period | ||||
| (1) Disposal | ||||
| (2) Other transfers out | ||||
| 4. Balance at the end of the period | 15,743,048.01 | 6,007,560.76 | 21,750,608.77 | |
| III. Impairment Provision | ||||
| 1. Balance at the beginning of the period | ||||
| 2. Increase in the current period | ||||
| (1) Provision | ||||
| 3. Decrease in the current period | ||||
| (1) Disposal | ||||
| (2) Other transfers out | ||||
| 4. Balance at the end of the period | ||||
| IV. Book Value | ||||
| 1. Book value at the end of the period | 15,329,584.91 | 15,653,570.53 | 30,983,155.44 | |
| 2. Book value at the beginning of the period | 15,879,099.05 | 15,822,498.49 | 31,701,597.54 |
(2) Investment property measured at fair value
□ Applicable √ Not applicable
(3) Investment property that the certificate of title has not been issued
The Company does not have investment property that the certificate of title has not been issued as at June 30,2023.
21. Fixed assets
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Fixed assets | 2,848,133,013.46 | 3,013,559,312.97 |
| Total | 2,848,133,013.46 | 3,013,559,312.97 |
(1) Information on fixed assets
Unit: RMB
| Item | Properties and buildings | Equipment | Office equipment | Motor vehicles | Production equipment | Total |
| I. Original Book Value | ||||||
| 1. Balance at the beginning of the period | 1,371,576,825.01 | 3,605,484,997.77 | 72,239,295.93 | 22,748,342.43 | 107,478,826.39 | 5,179,528,287.53 |
| 2. Increase in the current period | 2,837,554.28 | 63,442,027.73 | 1,351,559.07 | 1,271,175.01 | 68,902,316.09 | |
| (1) Purchase | 235,819.40 | 842,709.51 | 664,778.76 | 1,743,307.67 | ||
| (2) Inventory\fixed assets\transfer from construction work in progress | 2,837,554.28 | 63,206,208.33 | 508,849.56 | 606,396.25 | 67,159,008.42 | |
| (3) Increase in business combination | ||||||
| 3. Decrease in the current period | 68,000.00 | 91,298,975.80 | 1,160,786.85 | 4,751,043.81 | 3,141,234.95 | 100,420,041.41 |
| (1) Disposal or scrap | 68,000.00 | 20,886,221.43 | 1,160,786.85 | 4,751,043.81 | 3,141,234.95 | 30,007,287.04 |
| (2) Other transfers out | 70,412,754.37 | 70,412,754.37 | ||||
| 4. Balance at the end of the period | 1,374,346,379.29 | 3,577,628,049.70 | 72,430,068.15 | 17,997,298.62 | 105,608,766.45 | 5,148,010,562.21 |
| II. Accumulated Depreciation | ||||||
| 1. Balance at the beginning of the period | 328,463,784.70 | 1,698,804,701.37 | 42,106,720.32 | 12,317,156.27 | 66,497,929.43 | 2,148,190,292.09 |
| 2. Increase in the current period | 25,781,093.27 | 158,197,563.96 | 4,504,432.58 | 1,105,097.69 | 7,198,254.23 | 196,786,441.73 |
| (1) Provision | 25,781,093.27 | 158,197,563.96 | 4,504,432.58 | 1,105,097.69 | 7,198,254.23 | 196,786,441.73 |
| 3. Decrease in the current period | 50,745.00 | 50,778,542.34 | 664,205.37 | 3,458,380.37 | 1,866,599.68 | 56,818,472.76 |
| (1) Disposal or scrap | 50,745.00 | 16,027,319.31 | 664,205.37 | 3,458,380.37 | 1,866,599.68 | 22,067,249.73 |
| (2) Other transfers out | 34,751,223.03 | 34,751,223.03 | ||||
| 4. Balance at | 354,194,132.97 | 1,806,223,722. | 45,946,947.53 | 9,963,873.59 | 71,829,583.98 | 2,288,158,261. |
| the end of the period | 99 | 06 | ||||
| III. Impairment Provision | ||||||
| 1. Balance at the beginning of the period | 16,829,830.13 | 479,291.06 | 469,561.28 | 17,778,682.47 | ||
| 2. Increase in the current period | ||||||
| (1) Provision | ||||||
| 3. Decrease in the current period | 6,049,870.14 | 214.65 | 9,309.99 | 6,059,394.78 | ||
| (1) Disposal or scrap | 6,049,870.14 | 214.65 | 9,309.99 | 6,059,394.78 | ||
| 4. Balance at the end of the period | 10,779,959.99 | 479,076.41 | 460,251.29 | 11,719,287.69 | ||
| IV. Book Value | ||||||
| 1. Book value at the end of the period | 1,020,152,246.32 | 1,760,624,366.72 | 26,004,044.21 | 8,033,425.03 | 33,318,931.18 | 2,848,133,013.46 |
| 2. Book value at the beginning of the period | 1,043,113,040.31 | 1,889,850,466.27 | 29,653,284.55 | 10,431,186.16 | 40,511,335.68 | 3,013,559,312.97 |
(2) Information on temporarily idle fixed assets
Unit: RMB
| Item | Original book value | Accumulated depreciation | Impairment provision | Book value | Remarks |
| Equipment | 45,812,663.29 | 25,194,370.56 | 10,779,959.99 | 9,838,332.74 | |
| Office equipment | 1,722,353.66 | 1,183,029.74 | 479,076.41 | 60,247.51 | |
| Production equipment | 1,035,975.24 | 544,516.97 | 460,251.29 | 31,206.98 | |
| Total | 48,570,992.19 | 26,921,917.27 | 11,719,287.69 | 9,929,787.23 |
(3) Fixed assets leased through operating: None
(4) Fixed assets that the certificate of title has not been issued
Unit: RMB
| Item | Book value | Reasons for the certificate of title having not been issued |
| Plants and warehouses of Tangshan Branch | 47,303,948.59 | Processing |
| Total | 47,303,948.59 |
(5) Disposal of fixed assets: None
22. Construction work in process
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Construction work in process | 167,569,837.60 | 142,627,123.42 |
| Total | 167,569,837.60 | 142,627,123.42 |
(1) Construction work in progress
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Construction work of C&S Paper | 69,093,093.64 | 69,093,093.64 | 66,109,020.18 | 66,109,020.18 | ||
| Construction work of Jiangmen C&S | 8,720,992.62 | 8,720,992.62 | 6,474,001.68 | 6,474,001.68 | ||
| Construction work of Zhejiang C&S | 172,655.37 | 172,655.37 | ||||
| Construction work of Tangshan Branch | 30,367,497.73 | 30,367,497.73 | 40,399,919.70 | 40,399,919.70 | ||
| Construction work of Hubei C&S | 2,425,369.89 | 2,425,369.89 | 586,622.06 | 586,622.06 | ||
| Construction work of Yunfu C&S | 26,144,656.24 | 26,144,656.24 | 25,882,040.96 | 25,882,040.96 | ||
| Construction work of Jiangsu C&S | 530,582.07 | 530,582.07 | 530,582.07 | 530,582.07 | ||
| Construction work of Dazhou C&S | 29,554,801.81 | 29,554,801.81 | 2,644,936.77 | 2,644,936.77 | ||
| Construction work of Huashun Technology | 560,188.23 | 560,188.23 | ||||
| Total | 167,569,837.60 | 167,569,837.60 | 142,627,123.42 | 142,627,123.42 | ||
(2) Changes of significant construction work in progress in the current period
Unit: RMB
| Project | Budget number | Balance at the beginning of the period | Increase in the current period | Amount of fixed assets transferred in the current period | Decrease in the current period | Balance at the end of the period | Proportion of the cumulative construction input in budget | Construction progress | Accumulative amount of interest capitalization | Including: Amount of interest capitalization in the period | Interest capitalization rate in the current period | Source of fund |
| Construction work of C&S Paper | 76,780,225.47 | 66,109,020.18 | 2,984,073.46 | 69,093,093.64 | 89.99% | 89.99% | Others | |||||
| Constr | 11,835 | 6,474, | 3,648, | 1,401, | 8,720, | 85.53 | 85.53 | Others |
| uction work of Jiangmen C&S | ,573.28 | 001.68 | 413.80 | 422.86 | 992.62 | % | % | |||||
| Construction work of Zhejiang C&S | 1,737,490.09 | 1,715,044.89 | 1,542,389.52 | 172,655.37 | 98.71% | 98.71% | Others | |||||
| Construction work of Sichuan C&S | 6,298,365.36 | 6,298,365.36 | 6,298,365.36 | 100.00% | 100.00% | Others | ||||||
| Construction work of Tangshan Branch | 305,674,862.31 | 40,399,919.70 | 35,609,224.91 | 45,641,646.88 | 30,367,497.73 | 95.42% | 95.42% | Others | ||||
| Construction work of Hubei C&S | 12,913,491.51 | 586,622.06 | 12,011,571.37 | 10,172,823.54 | 2,425,369.89 | 97.56% | 97.56% | Others | ||||
| Construction work of Yunfu C&S | 31,645,821.82 | 25,882,040.96 | 2,364,975.55 | 2,102,360.27 | 26,144,656.24 | 89.26% | 89.26% | Others | ||||
| Construction work of Jiangsu C&S | 695,600,000.00 | 530,582.07 | 530,582.07 | 0.08% | 0.08% | Others | ||||||
| Construction work of Dazhou C&S | 825,000,000.00 | 2,644,936.77 | 26,909,865.04 | 29,554,801.81 | 3.58% | 3.58% | Others | |||||
| Construction work of Huashun Technology | 7,270,465.21 | 560,188.23 | 560,188.23 | 7.70% | 7.70% | Others | ||||||
| Total | 1,974,756,295.05 | 142,627,123.42 | 92,101,722.61 | 67,159,008.43 | 167,569,837.60 |
(3) Construction-in-progress provision set aside in the current period: NoneOther description
There was no situation where the recoverable amount of the construction work in progress is lower than the bookvalue which required provisions in the Company in the reporting period.
(4) Construction materials: None
23. Productive biological assets
(1) Productive biological assets measured at cost
□ Applicable √ Not applicable
(2) Productive biological assets measured at fair value
□ Applicable √ Not applicable
24. Oil & gas assets
□ Applicable √ Not applicable
25. Right-of-use assets
Unit: RMB
| Item | Properties and buildings | Total |
| I. Original Book Value | ||
| 1. Balance at the beginning of the period | 24,157,728.10 | 24,157,728.10 |
| 2. Increase in the current period | 13,501,317.24 | 13,501,317.24 |
| 3. Decrease in the current period | 4,432,933.36 | 4,432,933.36 |
| 4. Balance at the end of the period | 33,226,111.98 | 33,226,111.98 |
| II. Accumulated Depreciation | ||
| 1. Balance at the beginning of the period | 14,399,444.68 | 14,399,444.68 |
| 2. Increase in the current period | 7,383,463.33 | 7,383,463.33 |
| (1) Provision | 7,383,463.33 | 7,383,463.33 |
| 3. Decrease in the current period | 4,369,404.64 | 4,369,404.64 |
| (1) Disposal | 4,369,404.64 | 4,369,404.64 |
| 4. Balance at the end of the period | 17,413,503.37 | 17,413,503.37 |
| III. Impairment Provision | ||
| 1. Balance at the beginning of the period | ||
| 2. Increase in the current period | ||
| (1) Provision | ||
| 3. Decrease in the current period | ||
| (1) Disposal | ||
| 4. Balance at the end of the period | ||
| IV. Book Value | ||
| 1. Book value at the end of the period | 15,812,608.61 | 15,812,608.61 |
| 2. Book value at the beginning of the period | 9,758,283.42 | 9,758,283.42 |
26. Intangible assets
(1) Intangible assets
Unit: RMB
| Item | Land use right | Patent right | Non-patented technology | Application software | Trademark right | Total |
| I. Original Book Value | ||||||
| 1. Balance at the beginning of the period | 241,594,322.15 | 1,733,287.88 | 25,875,086.67 | 168,370.83 | 269,371,067.53 | |
| 2. Increase in the current period | 5,600,000.00 | 2,087,306.44 | 7,687,306.44 | |||
| (1) Purchase | 5,600,000.00 | 2,087,306.44 | 7,687,306.44 | |||
| (2) Internal R&D | ||||||
| (3) Increase in business combination | ||||||
| 3. Decrease in the current period | ||||||
| (1) Disposal | ||||||
| 4. Balance at the end of the period | 241,594,322.15 | 7,333,287.88 | 27,962,393.11 | 168,370.83 | 277,058,373.97 | |
| II. Accumulated Amortization | ||||||
| 1. Balance at the beginning of the period | 37,570,867.18 | 1,134,314.77 | 16,253,576.27 | 168,370.83 | 55,127,129.05 | |
| 2. Increase in the current period | 2,423,951.76 | 346,663.32 | 2,003,336.98 | 4,773,952.06 | ||
| (1) Provision | 2,423,951.76 | 346,663.32 | 2,003,336.98 | 4,773,952.06 | ||
| 3. Decrease in the current period | ||||||
| (1) Disposal | ||||||
| 4. Balance at the end of the period | 39,994,818.94 | 1,480,978.09 | 18,256,913.25 | 168,370.83 | 59,901,081.11 | |
| III. Impairment Provision | ||||||
| 1. Balance at the beginning of the period | ||||||
| 2. Increase in the current period | ||||||
| (1) Provision |
| 3. Decrease in the current period | ||||||
| (1) Disposal | ||||||
| 4. Balance at the end of the period | ||||||
| IV. Book Value | ||||||
| 1. Book value at the end of the period | 201,599,503.21 | 5,852,309.79 | 9,705,479.86 | 217,157,292.86 | ||
| 2. Book value at the beginning of the period | 204,023,454.97 | 598,973.11 | 9,621,510.40 | 214,243,938.48 |
The intangible assets generated other than internal R&D of the Company at the end of the period occupy 0.00% of the balance ofintangible assets.
(2) Information on the land use rights that the certificate of title has not been issued: None
27. Development expenses: None
28. Goodwill
(1) Original book value of goodwill
Unit: RMB
| Name of investee or the matters forming goodwill | Balance at the beginning of the period | Increase in the current period | Decrease in the current period | Balance at the end of the period | ||
| Formed by business combination | Disposal | |||||
| Merger of Zhongshan Paper involving enterprises not under common control | 64,654.15 | 64,654.15 | ||||
| Merger of Quxian Jiezhu involving enterprises not under common control | 633,136.34 | 633,136.34 | ||||
| Total | 64,654.15 | 633,136.34 | 697,790.49 | |||
(2) Provision for impairment of goodwill
Relevant information on the asset group or asset group portfolio in which the goodwill is locatedExplain the method to confirm the process of goodwill impairment test, key parameters (e.g. the growth rate in thepredictive period when predicting the present value of future cash flow, the growth rate in the stable period, profitrate, discount rate, and predictive period), and the goodwill impairment loss:
After conducting the asset impairment test by combining the goodwill with corresponding asset groups, there wasno impairment as at June 30, 2023, and provisions at the end of the reporting period were not set aside.Influence of the goodwill impairment test
29. Long-term unamortized expenses
Unit: RMB
| Item | Balance at the beginning of the period | Increase in the current period | Amortized amount of the current period | Other decreases | Balance at the end of the period |
| Use rights of sewage discharge | 251,447.96 | 41,908.02 | 209,539.94 | ||
| Decoration fees of office buildings | 9,598,356.75 | 137,999.75 | 3,647,360.70 | 6,088,995.80 | |
| Electricity use rights | 1,635,550.00 | 309,750.00 | 1,325,800.00 | ||
| Energy indicators | 286,261.03 | 5,176,863.66 | 229,814.30 | 5,233,310.39 | |
| Total | 11,771,615.74 | 5,314,863.41 | 4,228,833.02 | 12,857,646.13 |
30. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets that were not offset
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period | ||
| Deductible temporary differences | Deferred income tax assets | Deductible temporary differences | Deferred income tax assets | |
| Provision for asset impairment | 50,785,336.77 | 10,315,647.00 | 44,842,165.10 | 9,748,898.84 |
| Unrealized profit in internal transaction | 21,209,221.12 | 4,332,327.23 | 45,044,696.11 | 9,641,645.08 |
| Deductible loss | 724,519,823.16 | 180,196,946.51 | 567,079,521.21 | 140,749,809.49 |
| Accrued expenses | 18,742,776.72 | 3,412,418.83 | 18,083,213.52 | 3,328,793.96 |
| Provision for impairment of fixed assets | 11,719,287.69 | 2,269,795.90 | 17,778,682.47 | 3,294,136.72 |
| Provision for impairment of inventories | 18,370,084.29 | 4,502,112.60 | 1,251,162.68 | 264,199.53 |
| Equity incentive cost | 89,060,568.76 | 22,265,142.19 | 89,060,568.74 | 22,265,142.19 |
| Deferred income | 81,465,785.53 | 15,954,419.39 | 87,700,783.44 | 17,164,031.25 |
| Total | 1,015,872,884.04 | 243,248,809.65 | 870,840,793.27 | 206,456,657.06 |
(2) Deferred income tax liabilities that were not offset
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period | ||
| Taxable temporary differences | Deferred income tax liabilities | Taxable temporary differences | Deferred income tax liabilities | |
| Pre-tax deduction of fixed assets at one time as stipulated in the tax law | 153,023,160.79 | 28,007,494.21 | 238,373,819.49 | 47,131,368.70 |
| Total | 153,023,160.79 | 28,007,494.21 | 238,373,819.49 | 47,131,368.70 |
(3) Presentation of deferred income tax assets or liabilities by the net amount after offset
Unit: RMB
| Item | Offset amount of the | Balance of the deferred | Offset amount of the | Balance of the deferred |
| deferred income tax assets and liabilities at the end of the reporting period | income tax assets or liabilities after offset at the end of the reporting period | deferred income tax assets and liabilities at the beginning of the reporting period | income tax assets or liabilities after offset at the beginning of the reporting period | |
| Deferred income tax assets | 243,248,809.65 | 206,456,657.06 | ||
| Deferred income tax liabilities | 28,007,494.21 | 47,131,368.70 |
(4) Breakdown of unconfirmed deferred income tax assets
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Deductible temporary differences | 1,018,132.38 | 1,346,281.63 |
| Total | 1,018,132.38 | 1,346,281.63 |
(5) Deductible losses of the unconfirmed deferred income tax assets due in the next year: None
31. Other non-current assets
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Prepayment for engineering equipment | 17,444,577.73 | 17,444,577.73 | 3,096,668.04 | 3,096,668.04 | ||
| Prepayment for software | 2,460,101.16 | 2,460,101.16 | 2,742,366.30 | 2,742,366.30 | ||
| Prepayment for land | 22,230,000.00 | 22,230,000.00 | ||||
| Total | 42,134,678.89 | 42,134,678.89 | 5,839,034.34 | 5,839,034.34 | ||
32. Short-term borrowings
(1) Classification of short-term borrowings
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Guaranteed borrowings | 1,016,297,275.02 | 606,299,222.62 |
| Credit loans | 150,000,000.00 | |
| Discounting of unrecognized notes receivable | 1,500,000.00 | |
| Total | 1,166,297,275.02 | 607,799,222.62 |
Description of classification of short-term borrowings:
The guaranteed loans are all guaranteed loans between related parties within the scope of the Company merger.
(2) Short-term borrowings overdue but unpaid: None
There were no short-term borrowings overdue but unpaid in the Company at the end of the reporting period.
33. Tradable financial liabilities: None
34. Derivative financial liabilities: None
35. Notes payable
Unit: RMB
| Category | Balance at the end of the period | Balance at the beginning of the period |
| Banker’s acceptance | 326,437,678.21 | 340,335,111.30 |
| Total | 326,437,678.21 | 340,335,111.30 |
The total amount of the notes payable due but unpaid at the end of the reporting period is RMB0.00.
36. Accounts payable
(1) List of accounts payable
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Accounts payable | 809,845,342.70 | 948,550,430.61 |
| Total | 809,845,342.70 | 948,550,430.61 |
(2) Significant accounts payable with aging over one year
The Company has no significant accounts payable with aging over one year at the end of the reporting period.
37. Payments received in advance
(1) List of payments received in advance: None
(2) Significant payments received in advance with aging over one year: None
38. Contract liabilities
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Advances on sales | 55,853,584.65 | 96,581,944.94 |
| Total | 55,853,584.65 | 96,581,944.94 |
39. Employee remuneration payable
(1) List of employee remuneration payable
Unit: RMB
| Item | Balance at the beginning of the period | Increase in the current period | Decrease in the current period | Balance at the end of the period |
| I. Short-term Compensation | 125,641,302.46 | 419,645,167.08 | 435,205,661.72 | 110,080,807.82 |
| II. Post-employment Benefits - Defined Contribution Plan | 3,000,145.19 | 29,568,638.65 | 32,155,143.27 | 413,640.57 |
| III. Dismissal Benefits | 3,000,000.00 | 1,434,557.17 | 4,434,557.17 | |
| Total | 131,641,447.65 | 450,648,362.90 | 471,795,362.16 | 110,494,448.39 |
(2) List of short-term remuneration
Unit: RMB
| Item | Balance at the beginning of the period | Increase in the current period | Decrease in the current period | Balance at the end of the period |
| 1. Salary, bonus and subsidy | 124,624,901.23 | 378,301,918.61 | 394,224,207.25 | 108,702,612.59 |
| 2. Employee welfare | 12,821,420.07 | 12,821,420.07 | ||
| 3. Social insurance premiums | 380,431.33 | 15,212,188.41 | 15,342,374.92 | 250,244.82 |
| Including: Medical insurance | 152,356.90 | 13,378,017.25 | 13,306,651.58 | 223,722.57 |
| Employment injury insurance | 226,233.91 | 1,564,071.76 | 1,765,766.64 | 24,539.03 |
| Maternity insurance | 1,840.52 | 270,099.40 | 269,956.70 | 1,983.22 |
| 4. Housing provident fund | 184,800.00 | 11,134,609.49 | 10,992,729.29 | 326,680.20 |
| 5. Labor union fee and staff education fee | 451,169.90 | 2,175,030.50 | 1,824,930.19 | 801,270.21 |
| Total | 125,641,302.46 | 419,645,167.08 | 435,205,661.72 | 110,080,807.82 |
(3) List of defined contribution plans
Unit: RMB
| Item | Balance at the beginning of the period | Increase in the current period | Decrease in the current period | Balance at the end of the period |
| 1. Basic endowment insurance | 2,930,653.01 | 28,433,807.06 | 30,965,273.69 | 399,186.38 |
| 2. Unemployment insurance | 69,492.18 | 1,134,831.59 | 1,189,869.58 | 14,454.19 |
| Total | 3,000,145.19 | 29,568,638.65 | 32,155,143.27 | 413,640.57 |
Other description:
There was no delinquency of employee remuneration payable by the Company at the end of the reporting period.
40. Tax and fees payable
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Value-added tax | 60,292,193.38 | 11,926,192.62 |
| Corporate income tax | 49,229,609.44 | 30,255,024.65 |
| Individual income tax | 2,291,369.06 | 2,200,055.48 |
| City construction and maintenance tax | 3,504,941.68 | 1,756,304.79 |
| Property tax | 4,061,766.19 | 1,403,446.94 |
| Education surcharges | 1,785,292.91 | 923,674.57 |
| Local education surcharges | 1,190,195.26 | 615,783.03 |
| Land use tax | 753,980.97 | 778,111.47 |
| Stamp tax | 2,291,295.45 | 2,599,126.99 |
| Security fund for the disabled | 998,211.85 | 672,176.96 |
| Environmental protection tax | 294,908.67 | 256,939.83 |
| Resource tax | 126,564.81 | 71,129.02 |
| Total | 126,820,329.67 | 53,457,966.35 |
41. Other payables
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Dividend payable | 1,299,613.00 | |
| Other payables | 949,015,560.71 | 807,423,814.13 |
| Total | 950,315,173.71 | 807,423,814.13 |
(1) Interest payable: None
(2) Dividends payable
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Dividends for restricted shares | 1,299,613.00 | |
| Total | 1,299,613.00 |
Other descriptions, including important dividends payable exceeding one year, and the reasons for non-payment that should bedisclosed: None
(3) Other payables
1) Other payables based on amount nature
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Unpaid fees | 776,232,605.21 | 772,151,144.55 |
| Repurchase obligation of restricted shares | 132,476,680.00 | |
| Margins and deposits | 37,745,699.72 | 29,983,785.18 |
| Others | 2,107,095.12 | 1,249,487.75 |
| Authorized collection and payment of individual income tax under the equity incentive | 453,480.66 | 4,039,396.65 |
| Total | 949,015,560.71 | 807,423,814.13 |
2) Other important payables with aging exceeding one year
Unit: RMB
| Item | Balance at the end of the period | Reason for unsettlement or not carry-over |
| 1st | 6,323,465.21 | Not yet settled |
| Total | 6,323,465.21 | -- |
42. Liabilities held for sale: None
43. Non-current liabilities due within one year
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Lease liabilities due within one year | 8,708,819.36 | 9,833,661.30 |
| Total | 8,708,819.36 | 9,833,661.30 |
44. Other current liabilities
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Tax pending changeover | 7,191,894.60 | 12,440,147.55 |
| Total | 7,191,894.60 | 12,440,147.55 |
45. Long-term borrowings: None
46. Bonds payable: None
47. Lease liabilities
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Properties and buildings | 17,383,886.30 | 10,637,540.60 |
| Lease liabilities due within one year | -8,708,819.36 | -9,833,661.30 |
| Total | 8,675,066.94 | 803,879.30 |
48. Long-term payables: None
49. Long-term employee remuneration payable
50. Projected liabilities: None
51. Deferred income
Unit: RMB
| Item | Balance at the beginning of the period | Increase in the current period | Decrease in the current period | Balance at the end of the period | Reason |
| Government grants | 98,419,983.82 | 7,942,880.68 | 90,477,103.14 | Related to asset |
| Government grants | |||||
| Total | 98,419,983.82 | 7,942,880.68 | 90,477,103.14 | -- |
Projects involving government grants:
Unit: RMB
| Liability item | Balance at the beginning of the period | Increased amount of grants in the current period | Amount included in non-operating income in the current period | Amount included in other income in the current period | Amount of offset costs in the current period | Other changes | Balance at the end of the period | Related to asset/income |
| Subsidies for the infrastructure construction of new factory in Hubei | 28,393,061.36 | 535,718.16 | 27,857,343.20 | Related to asset | ||||
| Support funds for the construction of Automated Storage & Retrieval System | 18,065,441.14 | 780,882.36 | 17,284,558.78 | Related to asset | ||||
| Support funds for the transformation of Phase I project | 11,669,812.69 | 1,125,711.24 | 10,544,101.45 | Related to asset | ||||
| Financial support funds for construction expansion of 25,000-ton high-grade household paper project | 6,202,358.15 | 312,723.90 | 5,889,634.25 | Related to asset | ||||
| Support funds for equipment of Phase II project | 5,641,078.07 | 935,595.60 | 4,705,482.47 | Related to asset | ||||
| Provincial-level special subsidies for high-quality development | 4,682,727.20 | 275,454.60 | 4,407,272.60 | Related to asset | ||||
| Subsidy funds for the smart factory project | 4,831,637.53 | 1,676,863.85 | 3,154,773.68 | Related to asset | ||||
| Ex-post funds awarded to the first batch of the union enterprises for technical transformation in 2017 | 2,846,909.86 | 265,537.56 | 2,581,372.30 | Related to asset | ||||
| Support funds for the construction of environmental protection facilities | 2,394,444.59 | 159,523.80 | 2,234,920.79 | Related to asset |
| Discount interest funds for imported equipment | 2,051,843.75 | 96,937.50 | 1,954,906.25 | Related to asset | ||||
| Support funds for the technical transformation of equipment production line | 2,055,541.64 | 392,201.70 | 1,663,339.94 | Related to asset | ||||
| Subsidies for the expansion of the high-grade household paper project with an annual output of 25,000 tons | 1,586,666.91 | 79,999.98 | 1,506,666.93 | Related to asset | ||||
| Subsidies for sewage treatment station | 1,710,227.15 | 238,636.38 | 1,471,590.77 | Related to asset | ||||
| Support funds for enterprise technical upgrading | 1,646,984.51 | 385,718.69 | 1,261,265.82 | Related to asset | ||||
| Subsidies for construction of the water treatment project | 1,059,704.08 | 77,539.32 | 982,164.76 | Related to asset | ||||
| District-level support funds for technical transportation | 879,310.34 | 103,448.28 | 775,862.06 | Related to asset | ||||
| Support funds for sewage centralized water treatment project | 729,000.00 | 60,750.00 | 668,250.00 | Related to asset | ||||
| Provincial funds for traditional industry transformation projects | 696,428.62 | 53,571.42 | 642,857.20 | Related to asset | ||||
| Subsidies for technical transformation with “zero land increase” | 605,973.09 | 98,566.32 | 507,406.77 | Related to asset | ||||
| Special funds for capacity expansion of 25,000-ton high-grade household paper project | 670,833.14 | 287,500.02 | 383,333.12 | Related to asset | ||||
| Total | 98,419,983.82 | 7,942,880.68 | 90,477,103.14 |
Other description: None
52. Other non-current liabilities: None
53. Share capital
Unit: RMB
| Balance at the beginning of the period | Increase and decrease of this change (+ and -) | Balance at the end of the period | |||||
| Issuance of new shares | Bonus shares | Shares transferred from surplus reserve | Others | Subtotal | |||
| Total number of shares | 1,314,739,745.00 | 21,706,455.00 | -1,895,900.00 | 19,810,555.00 | 1,334,550,300.00 | ||
Other description:
（1）According to the Proposal on Achieving the Exercise Conditions of the Third Exercise Period for StockOptions Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Planapproved at the 14th meeting of the fifth session of the Board of Directors, the number of stock options that had metexercise conditions was 3,314,312 and the number of incentive recipients in conformity with the exercise conditionsreached 2,000. The exercise period was from June 29, 2022 to March 3, 2023. According to the Proposal onAchieving the Exercise Conditions of the Third Exercise Period for Reserved Stock Options under the Company’s2018 Stock Option and Restricted Stock Incentive Plan approved at the 17th meeting of the fifth session of the Boardof Directors, the number of stock options that have met exercise conditions was 569,340 and the number of incentiverecipients in conformity with the exercise conditions reached 55. The exercise period is from December 8, 2022 toOctomber 27, 2023. As of June 30, 2023, the incentive recipients who had met the above exercise conditions havesuccessively begun to exercise their rights, and a total of 744,955 shares have been subscribed.
(2) According to the resolutions of the 18th meeting of the Fifth Board of Directors, the 13th meeting of the FifthBoard of Supervisors, the 2023 First Extraordinary General Meeting and the 19th meeting of the Fifth Board ofDirectors, the Company awarded 21,765,000 restricted shares to 694 incentive recipients, with a par value of RMB1per share and a grant price of RMB6.32 per share. Among them, 17 incentive recipients are no longer qualifiedsince they have resigned due to personal reasons and 78 recipients have voluntarily given up all or partial rights dueto personal reasons, so the actual number of recipients is 617 with 20,961,500 shares awarded.
(3) The Company completed the cancellation procedures for 1,895,900 shares in its specialized repurchase securitiesaccount in May 2023.
54. Other equity instruments: None
55. Capital reserve
Unit: RMB
| Item | Balance at the beginning of the period | Increase in the current period | Decrease in the current period | Balance at the end of the period |
| Capital premium (share premium) | 677,865,067.00 | 119,137,564.99 | 797,002,631.99 | |
| Other capital reserve | 280,322,930.99 | 29,687,986.01 | 27,915,393.06 | 282,095,523.94 |
| Total | 958,187,997.99 | 148,825,551.00 | 27,915,393.06 | 1,079,098,155.93 |
Other descriptions, including increase/decrease in the reporting period and reasons of change:
(1) The grant of restricted shares according to the 2022 Stock Option and Restricted Stock Incentive Plan increased“capital reserve-share premium” by RMB111,515,180.00.
(2) The exercise of stock options awarded in the first grant and the exercise of reserved stock options as per the2018 Stock Option and Restricted Stock Incentive Plan increased “capital reserve-share premium” byRMB7,622,384.99 and decreased “capital reserve-other capital reserve” by RMB 2,130,571.30.
(3) The Company set aside provision for equity incentive costs and fees in the reporting period, which increased“capital reserve-other capital reserve” by RMB29,687,986.01.
(4) The cancellation of repurchased shares decreased “capital reserve-other capital reserve” by RMB25,784,821.76.
56. Treasury shares
Unit: RMB
| Item | Balance at the beginning of the period | Increase in the current period | Decrease in the current period | Balance at the end of the period |
| Restricted shares | 132,476,680.00 | 132,476,680.00 | ||
| Ordinary shares | 688,930,693.99 | 27,680,721.76 | 661,249,972.23 | |
| Total | 688,930,693.99 | 132,476,680.00 | 27,680,721.76 | 793,726,652.23 |
Other descriptions, including increase/decrease in the reporting period and reasons of change:
(1) The Company awarded 20,961,500.00 restricted shares under the first grant at a price of RMB6.32 per share inaccordance with the 2022 Stock Option and Restricted Stock Incentive Plan, which increased “treasury shares-restrictedshares” by RMB132,476,680.00.
(2) The Company’s cancellation of repurchased shares decreased “treasury shares-ordinary shares” byRMB27,680,721.76.
57. Other comprehensive income: None
58. Special reserves: None
59. Surplus reserve
Unit: RMB
| Item | Balance at the beginning of the period | Increase in the current period | Decrease in the current period | Balance at the end of the period |
| Statutory surplus reserve | 145,882,689.86 | 145,882,689.86 | ||
| Total | 145,882,689.86 | 145,882,689.86 |
Explanation of surplus reserves, including increase/decrease in the reporting period and reasons of change:None
60. Retained earnings
Unit: RMB
| Item | Current period | Last period |
| Retained earnings before adjustment at the end of the last period | 3,448,180,639.62 | 3,265,611,428.36 |
| Retained earnings at the beginning of the period after adjustment | 3,448,180,639.62 | 3,265,611,428.36 |
| Plus: Net profit attributable to owners of the parent company of the current period | 84,490,174.46 | 227,639,705.35 |
| Dividends on ordinary shares payable | 81,200,607.21 | 128,609,710.60 |
| Retained earnings at the end of the period | 3,451,470,206.87 | 3,364,641,423.11 |
Details on adjusting retained earnings at the beginning of the period:
(1) As a result of retrospective adjustments according to the Accounting Standards for Business Enterprises and itsrelated new provisions, the impact on retained earnings at the beginning of the period was RMB0.00.
(2) Due to the changes in accounting policies, the impact on retained earnings at the beginning of the period wasRMB0.00.
(3) Due to the correction of material accounting errors, the impact on retained earnings at the beginning of the periodwas RMB0.00.
(4) Due to the changes in the scope of combination caused by the same control, the impact on retained earnings atthe beginning of the period was RMB0.00.
(5) Other adjustments affected retained earnings at the beginning of the period by a total of RMB0.00.
61. Operating income and operating cost
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period | ||
| Income | Cost | Income | Cost | |
| Principal business | 4,685,080,565.59 | 3,352,956,520.74 | 4,367,618,113.61 | 2,929,313,606.05 |
| Total | 4,685,080,565.59 | 3,352,956,520.74 | 4,367,618,113.61 | 2,929,313,606.05 |
Information related to income:
Unit: RMB
| Contract classification | Branch 1 | Branch 2 | Total | |
| By product type | 4,685,080,565.59 | 4,685,080,565.59 | ||
| Including: | ||||
| Household paper | 4,623,891,020.45 | 4,623,891,020.45 | ||
| Personal care and others | 61,189,545.14 | 61,189,545.14 | ||
| By operating region | 4,685,080,565.59 | 4,685,080,565.59 | ||
| Including: | ||||
| Domestic | 4,589,885,969.35 | 4,589,885,969.35 | ||
| Abroad | 95,194,596.24 | 95,194,596.24 | ||
| By market or customer type | ||||
| Including: | ||||
| Contract type | ||||
| Including: | ||||
| By the time of goods transfer |
| Including: | ||||
| By contract term | ||||
| Including: | ||||
| By sales channel | 4,685,080,565.59 | 4,685,080,565.59 | ||
| Including: | ||||
| Traditional | 2,148,756,056.09 | 2,148,756,056.09 | ||
| Non-traditional | 2,536,324,509.50 | 2,536,324,509.50 | ||
| Total | 4,685,080,565.59 | 4,685,080,565.59 |
Information related to performance obligation: NoneInformation related to the transaction price apportioned to the remaining performance obligation:
The amount of income corresponding to the obligations of contract performance with an executed contract that is not performed orfully performed at the end of the reporting period is RMB 10,684,304.73, of which the income of RMB 10,684,304.73 is expected tobe confirmed as income in the year of 2023.
62. Tax and surcharges
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| City construction and maintenance tax | 10,556,379.34 | 10,114,833.70 |
| Education surcharges | 5,131,744.47 | 4,692,198.88 |
| Resource tax | 65,442.75 | 59,687.49 |
| Property tax | 5,614,288.26 | 5,340,991.61 |
| Land use tax | 1,304,877.08 | 1,177,751.78 |
| Vehicle and vessel tax | 5,030.00 | |
| Stamp tax | 4,129,350.82 | 3,793,856.69 |
| Local education surcharges | 3,424,022.70 | 3,128,132.57 |
| Environmental protection tax | 460,240.33 | 492,278.28 |
| Total | 30,686,345.75 | 28,804,761.00 |
63. Selling expenses
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Employee remuneration | 208,045,817.91 | 215,826,656.37 |
| Product promotion fees | 560,851,603.84 | 478,680,276.28 |
| Transportation expenses | 35,983,051.68 | 38,605,993.98 |
| Advertising expenses | 64,271,873.21 | 78,819,182.16 |
| Shopping mall management fees | 43,161,557.10 | 41,890,271.35 |
| Traveling expenses | 12,211,545.38 | 9,946,888.53 |
| Rental fees | 6,116,103.25 | 4,118,619.21 |
| Depreciation of use right assets | 1,859,083.38 | 1,613,750.38 |
| Business entertainment expenses | 1,413,630.50 | 1,735,211.16 |
| Others | 3,211,267.12 | 2,803,713.93 |
| Total | 937,125,533.37 | 874,040,563.35 |
64. Administrative expenses
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Employee remuneration | 73,641,882.22 | 80,051,121.32 |
| Equity incentive cost | 29,687,986.01 | 2,691,873.06 |
| Depreciation and amortization fees | 38,667,688.72 | 39,110,201.78 |
| Office allowance | 11,728,656.65 | 14,202,117.04 |
| Consulting service fees | 4,365,378.01 | 9,814,899.14 |
| Outsourcing warehouse management fees | 12,362,144.43 | 14,769,362.63 |
| Business entertainment expenses | 2,996,003.24 | 3,161,028.12 |
| Traveling expenses | 1,389,106.94 | 1,093,846.41 |
| Environmental protection fees | 1,551,570.61 | 1,482,429.20 |
| Rental fees | 3,205,715.79 | 1,917,577.82 |
| Depreciation of use right assets | 5,408,400.86 | 5,039,222.82 |
| Others | 3,770,178.03 | 6,842,755.06 |
| Total | 188,774,711.51 | 180,176,434.40 |
65. R&D expenses
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Employee remuneration | 22,124,267.15 | 18,993,635.08 |
| Direct investment | 81,883,493.27 | 72,375,500.71 |
| Depreciation and amortization fees | 14,546,606.28 | 12,333,210.15 |
| Others | 1,727,034.42 | 1,479,941.67 |
| Total | 120,281,401.12 | 105,182,287.61 |
66. Finance expenses
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Interest fees | 14,597,955.07 | 1,730,495.87 |
| Less: Interest income | 16,545,337.34 | 5,594,433.94 |
| Exchange profit and loss | -18,928,998.16 | 282,584.01 |
| Transaction fee and others | 4,390,150.44 | 2,114,303.84 |
| Total | 15,445.69 |
67. Other income
Unit: RMB
| Sources of other income | Incurred in the current period | Incurred in the prior period |
| Refund of individual income tax | 867,613.18 | 1,478,746.93 |
| Subsidy funds for the smart factory project | 1,676,863.85 | 1,485,927.20 |
| Support funds for the transformation of Phase I project | 1,125,711.24 | 1,125,711.24 |
| Support funds for equipment of Phase II project | 935,595.60 | 935,595.60 |
| Special funds for development and reform | 889,508.80 | |
| Subsidies for internship, employment, job stabilization and training | 845,075.63 | 1,267,492.81 |
| Support funds for the construction of Automated Storage & Retrieval System | 780,882.36 | 780,882.36 |
| Subsidies for Hubei C&S’s new factory infrastructure construction | 535,718.16 | 535,718.16 |
| Special award funds for the restructuring of industrial enterprises | 500,000.00 | 150,000.00 |
| Subsidies for foreign trade stabilization | 487,500.00 | 10,000.00 |
| Subsidies for social insurance premiums | 450,005.10 | 82,871.51 |
| Support funds for the technical transformation of equipment | 392,201.70 | 392,201.70 |
| Support funds for enterprise technical upgrading | 385,718.69 | 396,187.14 |
| 2013-2017 financial support funds of the Management Committee of Pengzhou Industrial Development Zone, Sichuan Province | 312,723.90 | 312,723.90 |
| 25,000 tons capacity expansion project of Tangshan Subsidiary | 287,500.02 | 287,500.02 |
| Provincial-level special subsidies for high-quality development | 275,454.60 | 91,818.20 |
| Ex-post funds awarded to the first batch of the union enterprises for the technical transformation in 2017 | 265,537.56 | 317,293.32 |
| Financial support for the sewage treatment station project of Tangshan Subsidiary | 238,636.38 | 238,636.38 |
| District-level rewards for green factory | 200,000.00 | |
| VAT exemption for employment of retired soldiers and poor population | 160,850.00 | 73,950.00 |
| Enterprise support funds for the third level tax conference | 160,000.00 | |
| Support funds for the construction of environmental protection facilities | 159,523.80 | 159,523.80 |
| Subsidies for boiler renovation | 157,500.00 | |
| District-level support funds for technical transportation | 103,448.28 | 17,241.38 |
| Subsidies for technical transformation with “zero land increase” | 98,566.32 | |
| Import interest discounts on imported equipment in 2014 | 96,937.50 | 96,937.50 |
| Special subsidy for the construction expansion of the 25,000-ton household paper project | 79,999.98 | 79,999.98 |
| Subsidies for construction of the water treatment project | 77,539.32 | 77,539.32 |
| Special funding for the implementation of standardization strategy in Zhongshan City | 75,000.00 | |
| Financial support for sewage centralized water treatment project | 60,750.00 | 60,750.00 |
| Provincial funds for traditional industry transformation projects | 53,571.42 | 53,571.42 |
| Job increase subsidy | 6,000.00 | |
| Subsidies for new-generation IT and industrial development projects | 1,980,000.00 | |
| Automatic payment of Xinhui District for enterprise awards under the “Ten Golden Rules” 2021 | 500,000.00 | |
| Funds for reconstruction project of automatic production lines | 368,766.67 | |
| Tax contribution reward | 200,000.00 | |
| One-off job retention subsidy | 185,000.00 | |
| Rewards for creation of odor-free enterprise | 41,834.86 | |
| Industrial comprehensive policy fulfillment fund 2020; Special subsidy for high-tech enterprise identification 2020 | 30,000.00 | |
| Subsidies for employees’ training while working | 4,000.00 | |
| Energy review fee from the reform and development department's special business fee | 1,500.00 | |
| Total | 12,741,933.39 | 13,819,921.40 |
68. Return on investment
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Investment income from disposal of trading financial assets | 968,000.00 | |
| Others | 990,155.36 | 183,493.42 |
| Total | 1,958,155.36 | 183,493.42 |
Other description:
"Others" refer to returns on principal-protected wealth management products at maturity.
69. Profit of net exposure hedging: None
70. Income from changes in fair value
Unit: RMB
| Sources of income from changes in fair value | Incurred in the current period | Incurred in the prior period |
| Stock | -2,538.48 | |
| Total | -2,538.48 |
71. Credit impairment loss
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Bad debt loss from other receivables | -527,040.20 | -691,163.04 |
| Bad debt loss from accounts receivable | -1,237,859.41 | 2,524,456.58 |
| Total | -1,764,899.61 | 1,833,293.54 |
72. Asset impairment loss
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| II. Impairment Loss of Inventories and Contract Performance Cost | -1,417,159.06 | -1,026,689.87 |
| Total | -1,417,159.06 | -1,026,689.87 |
73. Return on disposal of assets
Unit: RMB
| Source | Incurred in the current period | Incurred in the prior period |
| Disposal of fixed assets | -919,217.75 | -1,085,279.69 |
| Total | -919,217.75 | -1,085,279.69 |
74. Non-operating income
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period | Amount recognized as profit or loss of the current period |
| Government grants | 10,000.00 | ||
| Profit from damage and retirement of non-current assets | 480,254.78 | 561.25 | 480,254.78 |
| Including: Fixed assets | 480,254.78 | 561.25 | 480,254.78 |
| Income from fine and compensation | 1,191,770.08 | 1,038,029.70 | 1,191,770.08 |
| Others | 1,920,709.80 | 866,146.19 | 1,920,709.80 |
| Total | 3,592,734.66 | 1,914,737.14 | 3,592,734.66 |
Government grants recognized as profit and loss of the current period:
Unit: RMB
| Grants | Issuer | Reason | Nature and type | Whether the grant affected the profit and loss of the year | Whether a special grant | Amount incurred in the current period | Amount incurred in the last period | Related to asset/income |
| Municipal party building funds for demonstrative new economic organizations and new social organizations | Party Building Work Office of Xiaolan Town Committee, Zhongshan City | Grant | Grants received for the performance of the State’s function of ensuring the supply or price control of a public utility or socially necessary product | No | No | 10,000.00 | Related to income | |
| Total | 10,000.00 |
Other description: None
75. Non-operating expenses
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period | Amount recognized as profit or loss of the current period |
| External donations | 458,392.14 | 4,397,406.24 | 458,392.14 |
| Loss from damage and retirement of non-current assets | 2,521,814.05 | 1,238,583.11 | 2,521,814.05 |
| Including: Fixed assets | 2,521,814.05 | 1,238,583.11 | 2,521,814.05 |
| Others | 841,054.03 | 353,226.14 | 841,054.03 |
| Total | 3,821,260.22 | 5,989,215.49 | 3,821,260.22 |
76. Income tax expenses
(1) Table of income tax expenses
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Current income tax expense | 54,135,092.50 | 57,586,968.04 |
| Deferred income tax expense | -55,992,391.59 | -23,853,520.58 |
| Total | -1,857,299.09 | 33,733,447.46 |
(2) Adjustment process of accounting profits and income tax expenses
Unit: RMB
| Item | Incurred in the current period |
| Total profit | 82,097,124.17 |
| Income tax expenses calculated at the statutory/applicable tax rate | 20,524,281.04 |
| Impacts of different tax rates applied to subsidiaries | -23,561,960.88 |
| Impacts of adjustments to income taxes during the prior period | -1,322,432.94 |
| Impacts of non-deductible costs, expenses and losses | 2,502,813.69 |
| Income tax expenses | -1,857,299.09 |
77. Other comprehensive income
Please refer to the notes for details.
78. Items of the cash flow statement
(1) Cash received related to other operating activities
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Current accounts | 34,583,102.62 | 25,466,487.76 |
| Interest income | 16,545,304.21 | 5,595,579.89 |
| Government grants | 3,770,589.53 | 13,512,699.18 |
| Others | 4,486,825.55 | 4,425,363.57 |
| Authorized collection of individual income tax under the equity incentive | 1,508,300.79 | 3,109,401.56 |
| Total | 60,894,122.70 | 52,109,531.96 |
(2) Cash payments related to other operating activities
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Expenses paid | 435,245,537.99 | 451,722,872.22 |
| Current accounts | 17,784,310.26 | 7,036,365.56 |
| Authorized payment of individual income tax under the equity incentive | 7,829,593.69 | 12,239,910.53 |
| Others | 247,818.12 | 187,497.98 |
| Total | 461,107,260.06 | 471,186,646.29 |
(3) Cash received related to other investing activities
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Principal repayment on maturity of large-denomination certificate of deposit | 70,000,000.00 | |
| Principal repayment on maturity of treasury bonds reverse repo | 23,001,000.00 | |
| Principal repayment on maturity of wealth management products | 41,239,541.68 | |
| Total | 93,001,000.00 | 41,239,541.68 |
(4) Cash payments related to other investing activities
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Purchasing large-denomination Certificate of Deposit | 461,000,000.00 | 140,000,000.00 |
| Purchasing treasury bonds reverse repo | 520,600,000.00 | |
| Purchasing wealth management products | 10,007,000.00 | |
| Total | 991,607,000.00 | 140,000,000.00 |
(5) Cash received related to other financing activities
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Recovery of bills and letter of credit deposits | 5,651,225.68 | |
| Total | 5,651,225.68 |
(6) Cash payments related to other financing activities
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Cash paid for lease liabilities | 5,805,962.59 | 4,878,971.53 |
| Deposits of security deposits for bills, letters of guarantee and letters of credit | 58,359,813.97 | |
| Total | 5,805,962.59 | 63,238,785.50 |
79. Supplementary information to cash flow statement
(1) Supplementary information to cash flow statement
Unit: RMB
| Supplementary information | Amount of the current period | Amount of last period |
| 1 Reconciliation of net profit to cash flows from operating activities: | ||
| Net Profit | 83,954,423.26 | 227,481,785.93 |
| Plus: Provisions for asset impairment | 3,182,058.67 | -806,603.67 |
| Depreciation of fixed assets, oil and gas assets and productive biological assets | 197,504,883.83 | 187,248,981.01 |
| Depreciation of use right assets | 7,383,463.33 | 6,768,952.23 |
| Intangible asset amortization | 4,773,952.06 | 3,769,673.22 |
| Long-term unamortized expenses | 4,228,833.02 | 6,623,087.00 |
| Losses from disposal of fixed assets, intangible assets and other long-term assets ("-" indicates income) | 919,217.75 | 1,085,279.69 |
| Losses from fixed assets write-off ("-" indicates income) | 2,041,559.27 | 1,238,021.86 |
| Losses from changes in fair value ("-" indicates income) | 2,538.48 | |
| Finance expenses ("-" indicates income) | -11,650,803.43 | -10,649,367.10 |
| Investment losses ("-" indicates income) | -1,958,155.36 | -183,493.42 |
| Decrease in deferred income tax assets ("-" indicates increase) | -36,792,152.59 | -23,688,607.42 |
| Increase in deferred income tax liabilities ("-" indicates decrease) | -19,123,874.49 | -164,913.16 |
| Decrease in inventories ("-" indicates increase) | 670,487,747.95 | 273,929,611.30 |
| Decrease in operating receivables ("-" indicates increase) | -129,309,646.18 | -99,226,492.95 |
| Increase in operating payables ("-" indicates decrease) | -2,195,249.03 | 126,121,272.75 |
| Others | ||
| Net cash flow from operating activities | 773,446,258.06 | 699,549,725.75 |
| 2 Significant investment and financing activities not involving cash: | ||
| Conversion of debt to capital | ||
| Convertible corporate bonds due within one year | ||
| Fixed assets acquired under finance lease | ||
| 3 Net changes in cash and cash equivalents: | ||
| Balance of cash at the end of the period | 1,649,920,140.29 | 1,315,175,165.01 |
| Less: Balance of cash at the beginning of the period | 1,248,898,024.59 | 797,797,675.70 |
| Plus: Balance of cash equivalents at the end of the period | ||
| Less: Balance of cash equivalents at the beginning of the period | ||
| Net increase in cash and cash equivalents | 401,022,115.70 | 517,377,489.31 |
(2) Net cash paid to acquire subsidiaries during the period: None
(3) Net cash received from the disposal of subsidiaries during the period: None
(4) Constitution of cash and cash equivalents
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| I. Cash | 1,649,920,140.29 | 1,248,898,024.59 |
| Including: Cash on hand | 41,732.13 | 20,309.66 |
| Bank deposits always available for payment | 1,640,753,819.23 | 1,231,680,951.11 |
| Other monetary funds always | 9,124,588.93 | 17,196,763.82 |
| available for payment | ||
| III. Balance of Cash and Cash Equivalents at the End of the Period | 1,649,920,140.29 | 1,248,898,024.59 |
80. Notes to items in the statement of changes in owner’s equity: None
81. Assets with restricted right to use or ownership
Unit: RMB
| Item | Book value at the end of the period | Reason for restriction |
| Other monetary funds | 70,238,291.22 | Security deposits for issuing letter of credit and notes |
| Total | 70,238,291.22 | -- |
82. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
| Item | Balance of foreign currency at the end of the period | Conversion rate | Balance of converted RMB at the end of the period |
| Monetary funds | 623,548,852.01 | ||
| Including: USD | 84,986,255.46 | 7.2754 | 618,309,002.97 |
| EUR | |||
| HKD | 5,644,467.28 | 0.9283 | 5,239,758.98 |
| Mop | 100.00 | 0.9006 | 90.06 |
| Accounts receivable | 50,444,122.10 | ||
| Including: USD | 3,348,035.75 | 7.2754 | 24,358,299.30 |
| EUR | |||
| HKD | 28,100,638.59 | 0.9283 | 26,085,822.80 |
| Long-term borrowings | |||
| Including: USD | |||
| EUR | |||
| HKD | |||
| Other receivables | 167,361.26 | ||
| Including: HKD | 180,287.90 | 0.9283 | 167,361.26 |
| Accounts payable | 331,517,765.33 | ||
| Including: USD | 45,566,946.88 | 7.2754 | 331,517,765.33 |
| Other payables | 3,970,792.71 | ||
| Including: HKD | 4,277,488.65 | 0.9283 | 3,970,792.71 |
(2) For overseas business entities, especially important ones, disclose their main overseas business address,the standard currency for accounting and selection basis. If there are changes in the standard currency foraccounting, reasons shall be also provided.
√ Applicable □ Not applicable
| Overseas business entity | Business address | Standard currency for accounting |
| Zhong Shun International Co., Ltd. | Hong Kong | RMB |
| C&S Hong Kong Co., Ltd. | Hong Kong | RMB |
| C&S (Macao) Co., Ltd. | Macao | RMB |
83. Hedges: None
84. Government grants
(1) Basic information on government grants
Unit: RMB
| Category | Amount | Reporting items | Amount recognized as profit or loss for the current period |
| Related to income | 3,931,439.53 | Other income | 3,931,439.53 |
| Total | 3,931,439.53 | 3,931,439.53 |
(2) Return of government grants
□ Applicable √ Not applicable
Other description:
Please refer to Note VII (51), (67) and (74) for details.
85. Others: None
VIII. Changes in the Consolidated Scope
1. Business combinations of enterprises not under common control
(1) Business combinations of enterprises not under common control in the reporting period
Unit: RMB
| Name of acquiree | Equity acquisition time | Equity acquisition cost | Proportion of acquired equity | Equity acquisition method | Acquisition date | Basis for determining the acquisition date | Revenue of the acquiree from the acquisition date to the end of the reporting period | Net profit of the acquiree from the acquisition date to the end of the reporting period |
| Quxian Jiezhu Construction and Development Co., Ltd. | March 17, 2023 | 5,810,000.00 | 100.00% | Acquisition | March 17, 2023 | Constitute substantive control over the acquiree | -116,381.94 |
Other descriptions:
C&S (Dazhou) Paper Co., Ltd., a subsidiary of C&S Paper Co., Ltd., used its own funds and acquired 100% ofQuxian Jiezhu Construction and Development Co., Ltd. through the auction of Quxian Public Resource ExchangeService Center, with a strike price of RMB5,810,000.00.
(2) Combination costs and goodwill
Unit: RMB
| Combination cost | |
| --Cash | 5,810,000.00 |
| -- Fair value of non-cash assets | |
| -- Fair value of debts assumed or issued | |
| -- Fair value of equity securities issued | |
| -- Fair value of contingent consideration | |
| -- Fair value of equities held before the acquisition date on the acquisition date | |
| --Others | |
| Total combination cost | 5,810,000.00 |
| Less: Fair value of identifiable net assets acquired | 5,176,863.66 |
| Difference between the goodwill/combination cost and the fair value of identifiable net assets acquired | 633,136.34 |
Method of determining the fair value of combination costs and descriptions of contingent consideration and its changes: NoneMain reasons for the formation of huge goodwill: None
(3) Acquiree’s identifiable assets and liabilities on the acquisition date
Method for determining the fair value of identifiable assets and liabilities:
According to the appraisal report "Sichuan Tianyuan Appraisal Report [2022] No. 012" issued by the asset appraisalagency engaged by Quxian Zunxian Human Resources Development Co., Ltd., the fair value of the acquiree on theappraisal base date is estimated to be RMB5,176,863.66 by the cost method.Acquiree's contingent liabilities assumed in the business combination: None
(4) Profit or loss arising from the recalculation based on fair value of equities held before the acquisition dateWhether there are transactions through which business combination is achieved in stages while control is obtained within thereporting period
□ Yes √ No
(5) Descriptions of being unable to determine the consideration or the fair value of acquiree’s identifiableassets and liabilities on the acquisition date or at the end of the current period of combination: None
(6) Other description: None
2. Business combinations of enterprises under common control
(1) Business combinations of enterprises under common control in the current period: None
(2) Combination costs: None
(3) Book value of assets and liabilities of the combined party on the date of combination: None
3. Reverse purchase: None
4. Disposal of subsidiaries
Whether there is situation that one disposal of investment in a subsidiary results in a loss of control
□ Yes √ No
Whether there is situation that the disposal of investment in a subsidiary is achieved in stages through multipletransactions while the control is lost in the reporting period
□ Yes √ No
5. Changes in the scope of consolidation due to other reasons
Description of changes in the scope of combination due to other reasons (establishment or liquidation ofsubsidiaries, etc.) and related situations:
In February 2023, the subsidiary C&S (Dazhou) Paper Co., Ltd. acquired 100% equities of Quxian JiezhuConstruction and Development Co., Ltd. In March 2023, Quxian Jiezhu Construction and Development Co., Ltd.completed the change registration with the industrial and commercial department, with a registered capital ofRMB10 million after the change. The Company has incorporated Quxian Jiezhu Construction and DevelopmentCo., Ltd. into the scope of its consolidated statements since March 2023. Currently, Quxian Jiezhu has not startedoperating activities.Zhongshun Healthy Life Technology (Shenzhen) Co., Ltd. was dissolved and canceled in April 2023, and theCompany no longer incorporated it into the scope of consolidated statements from the date of cancellation.Zhongshun Healthy Life Technology (Shenzhen) Co., Ltd. was established under the joint investment of theCompany and its wholly-owned subsidiary Zhongshan Zhongshun Trading Co., Ltd. in May 2022, with a registeredcapital of RM10 million. The Company held 60% of the shares while Zhongshan Zhongshun Trading held 40% ofthe shares.In June 2023, the Company used its own funds and established a wholly-owned subsidiary Guangdong LaotongxueInformation Technology Co., Ltd. in Zhongshan City, Guangdong Province, with a registered capital of RMB5
million. The Company has incorporated Guangdong Laotongxue Information Technology Co., Ltd. into the scopeof its consolidated statements since June 2023. Currently, Guangdong Laotongxue has not started operatingactivities.
6. Others: None
IX. Equities in Other Entities
1. Equities in subsidiaries
(1) Composition of the enterprise group
| Name of subsidiary | Main business address | Registered address | Principal businesses | Shareholding percentage | Obtaining method | |
| Direct | Indirect | |||||
| Jiangmen Zhongshun Paper Co., Ltd. | Jiangmen, Guangdong | Jiangmen, Guangdong | R&D, production, and sales (including online sales): household paper, maternal and infant products, cosmetics, wipes, non-woven products, daily necessities, and cleaning supplies; sales (including online sales) of Class I and II medical devices. (The above items do not involve special management measures for the foreign access). (For items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments.) | 88.25% | 11.75% | Capital contribution for establishment |
| Zhejiang Zhongshun Paper Co., Ltd. | Jiaxing, Zhejiang | Jiaxing, Zhejiang | General items: manufacture of paper products; sales of paper products; sales of paper pulp; sales of personal hygiene products; sales of hygiene products and disposable medical products; sales of disinfectants (excluding hazardous chemicals); sales of Class I medical devices; retail of Class I medical devices; sales of Class II medical devices; retail of class II medical devices; wholesale of medical face masks; retail of medical face masks; sales of general merchandise; retail of daily necessities; sales of maternal and infant products; wholesale of kitchenware, sanitary ware and daily sundries; wholesale of cosmetics; retail of cosmetics; wholesale of needle textiles and raw materials; sales of needle textiles; sales of chemical industry products (excluding chemical products that need to be licensed); Internet sales (excluding the sales of commodities requiring a permit) (The company may carry out business operations independently according to the law based on the business license, except for items that must be licensed according to the law.) (For items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments.) | 75.00% | 25.00% | Capital contribution for establishment |
| C&S Hong Kong Co., Ltd. | Hong Kong | Hong Kong | Purchase of pulp | 100.00% | Capital contribution for establishment | |
| C&S (Yunfu) Paper Co., Ltd. | Yunfu, Guangdong | Yunfu, Guangdong | R&D, production, wholesale, retail and online sales: household paper, sanitary products, maternal and infant products, daily necessities, cosmetics, medical devices, sanitary materials, non-woven fabrics and products, polymer materials and products, daily | 100.00% | Capital contribution for establishment | |
| sundries, and disinfectant products (excluding hazardous chemicals); wholesale, retail and online sales: food; import and export of goods and technologies (excluding the import and export of goods and technologies prohibited by the State or involving administrative approval); warehousing services (limited to warehouses qualified in fire protection without hazardous chemicals). (For items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments.) | ||||||
| Yunfu Hengtai Trading Co., Ltd. | Yunfu, Guangdong | Yunfu, Guangdong | Wholesale, retain and online sales: paper, wood pulp, sanitary products, maternal and infant products, cosmetics, daily necessities, medical equipment, daily sundries, disinfection supplies (excluding dangerous chemicals); import and export of goods or technologies (excluding the import and export of goods and technologies prohibited by the State or involving administrative approval). (For items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments.) | 100.00% | Capital contribution for establishment | |
| C&S (Macao) Co., Ltd. | Macao | Macao | Wholesale, trade | 100.00% | Capital contribution for establishment | |
| Zhongshan Zhongshun Trading Co., Ltd. | Zhongshan, Guangdong | Zhongshan, Guangdong | Wholesale, retail and online sales (sales only on third-party platforms) of paper supplies, paper products (excluding printing products), wood pulp, general merchandise, hygiene products, cosmetics, nonwoven products, chemical products for daily use, Class I medical devices and food; warehousing (excluding hazardous chemicals and precursor chemicals); import and export of goods and technologies; operations of Class II and Class III medical devices. (The above business scope involves food operations, import and export of goods, and import and export of technologies.) (Exclude items prohibited by laws and administrative regulations; items whose operations are restricted by laws and administrative regulations shall not be carried out unless the permit has been obtained.) (For items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments.) | 100.00% | Business combinations involving enterprises under common control | |
| Xiaogan C&S Trading Co., Ltd. | Xiaogan, Hubei | Xiaogan, Hubei | Import, export and sales of paper products, general merchandise and pulp boards; sales of cosmetics, shower gel and sanitary pads; sales of baby products (excluding food). (For items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments.) | 100.00% | Business combinations involving enterprises under common control | |
| Beijing C&S Paper Co., Ltd. | Beijing | Beijing | Sales of paper products, daily necessities, paper pulp, and pulp boards; import and export of goods. (The company may independently select business items and carry out business activities in accordance with the law; for items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments based on contents of the approval; it is prohibited to engage in business activities of items prohibited and restricted by the city’s industrial policies.) | 100.00% | Business combinations involving enterprises under common control | |
| Chengdu Zhongshun | Pengzhou, Sichuan | Pengzhou, Sichuan | Sales of household paper, cleaning products, general merchandise, hygiene products, baby products, | 100.00% | Business combinations |
| Paper Co., Ltd. | cosmetics, nonwoven products, feminine hygiene products, chemical products for daily use, daily necessities, medical devices, medical supplies and disinfectant products (excluding hazardous chemicals); e-commerce [For items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments.] | involving enterprises under common control | ||||
| Hangzhou Jie Rou Trading Co., Ltd. | Hangzhou, Zhejiang | Hangzhou, Zhejiang | Wholesale, retail: paper products, paper pulp, general merchandise; import and export of goods and technologies (exclude items prohibited by laws and administrative regulations; items whose operations are restricted by laws and administrative regulations shall not be carried out unless the permit has been obtained); other legitimate items that do not need approval according to the law) (for items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments) | 100.00% | Business combinations involving enterprises under common control | |
| Shanghai Huicong Paper Co., Ltd. | Shanghai | Shanghai | Household paper, paper pulp, pulp boards, import and export of goods and technologies. (For items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments.) | 100.00% | Business combinations involving enterprises under common control | |
| C&S (Hubei) Paper Co., Ltd. | Xiaogan, Hubei | Xiaogan, Hubei | General items: manufacture of paper; manufacture of paper products; sales of paper products; sales of sanitary products and disposable medical supplies; retail of cosmetics; wholesale of cosmetics; sales of personal hygiene products; sales of knitwear; manufacture of maternal and infant products; sales of maternal and infant products; sales of daily necessities; sales of daily chemical products; sales of disinfectants (excluding hazardous chemicals); sales of Class I medical devices; sales of Class II medical devices; export of goods; export of technologies; Internet sales (excluding the sales of commodities requiring a permit); information technology consulting services (The company may carry out business operations independently according to the law based on the business license, except for items that must be licensed according to the law.) Licensed items: production of cosmetics; production of sanitary products and disposable medical supplies(for items that must be approved in accordance with the law, companies may carry out business operations upon approval by relevant departments, and the specific business items are subject to the approval document or the permit issued by competent department).( The above business activities do not involve prohibited items in the Negative list of foreign investment in China) | 93.375% | 6.625% | Business combinations involving enterprises under common control |
| Zhong Shun International Co., Ltd. | Hong Kong, China | Hong Kong, China | Sales of paper products | 100.00% | Business combinations involving enterprises under common control | |
| C&S (Sichuan) Paper Co., Ltd. | Pengzhou, Sichuan | Pengzhou, Sichuan | Licensed items: production of sanitary products and disposable medical supplies; import and export of goods (for items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments, | 100.00% | Business combinations involving enterprises under |
| and the specific business items are subject to the approval document or the permit issued by relevant department). General items: sales of sanitary products and disposable medical supplies; sales of personal hygiene products; sales of daily necessities; manufacture of paper products; sales of paper products; manufacture of paper; manufacture of daily chemical products; sales of daily chemical products; sales of Class II medical devices; sales of Class I medical devices; manufacture of industrial textile products; sales of industrial textile products; manufacture of maternal and infant products; sales of maternal and infant products. (The company may carry out business operations independently according to the law based on the business license, except for items that must be licensed according to the law.) | common control | |||||
| C&S (Zhongshan) Paper Co., Ltd. | Zhongshan, Guangdong | Zhongshan, Guangdong | Production, processing and sales: high-class household paper products (excluding printing process); import and export of pulp boards (exclude items prohibited by laws and administrative regulations; items whose operations are restricted by laws and administrative regulations shall not be carried out unless the permit has been obtained). (For items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments.) | 100.00% | Business combinations involving enterprises under common control | |
| C&S (Dazhou) Paper Co., Ltd. | Dazhou, Sichuan | Dazhou, Sichuan | R&D, production, processing, and sales (including online sales): household paper, tissue boxes, hygiene products, cosmetics, non-woven products, plastic products, metalware, rubber products, ceramics, baby products, feminine hygiene products and daily necessities; bamboo and forest trees planting; acquisition of raw materials of bamboo and wood for paper making; R&D, production and sales of bamboo pulp, wood pulp, bamboo chips and wood chips; combined heat and power and sales; warehouse leasing; processing and sales of lime and limestone; processing of industrial wastewater and gray water reuse; general import and export business; sales of construction materials, hardware and electrical products, and chemical products (excluding hazardous products). (For items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments.) | 100.00% | Capital contribution for establishment | |
| Sun Daily Necessities Co., Ltd. | Yunfu, Guangdong | Yunfu, Guangdong | R&D, production, processing, and online sales: paper products, hygiene products, cosmetics, nonwoven products, plastic products for daily use, chemical products for daily use, metalware for daily use, rubber products for daily use, and ceramics for daily use; import and export of goods or technologies (excluding the import and export of goods and technologies prohibited by the State or involving administrative approval). (For items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments.) | 50.00% | 50.00% | Capital contribution for establishment |
| Dolemi Sanitary Products Co., Ltd. | Zhongshan, Guangdong | Zhongshan, Guangdong | General items: manufacture of paper products; Internet sales (sales only on third-party platforms) (excluding the sales of commodities requiring a permit); sales of personal hygiene products; sales of household products, sales of hygiene products and disposable medical products; retail of cosmetics; sales of general merchandise; sales of plastic products; sales of metal products; sales of rubber products; | 60.00% | 40.00% | Capital contribution for establishment |
| manufacture of daily-use ceramic products. (The company may carry out business operations independently according to the law based on the business license, except for items that must be licensed according to the law.) (For items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments.) | ||||||
| C&S (Jiangsu) Paper Co., Ltd. | Suqian, Jiangsu | Suqian, Jiangsu | Licensed items: manufacture of Class II medical devices; import and export of goods; import and export of technologies; manufacture of Class III medical devices; operation of Class III medical devices (for items that must be approved in accordance with the law, companies may carry out business operations upon approval by relevant departments, and the specific business items are subject to approval result). General items: manufacture of paper products; sales of plastic products; sales of paper products; Internet sales (excluding the sales of commodities requiring a permit); sales of daily necessities; sales of personal hygiene products; sales of household products; sales of sanitary products and disposable medical products; retail of cosmetics; wholesale of cosmetics; sales of knitwear; wholesale of kitchen utensils and daily groceries; sales of metal products; sales of rubber products; manufacture of daily-sue ceramic products; R&D of kitchen utensils and daily groceries; retail of kitchen utensils and daily groceries; sewage treatment and recycling; manufacture of Class I medical devices; sales of Class I medical devices; sales of Class II medical devices; sales of disinfectants (excluding hazardous chemicals). (The company may carry out business operations independently according to the law based on the business license, except for items that must be licensed according to the law) | 100.00% | Capital contribution for establishment | |
| Beijing Bloomage Jierou Biotechnology Co., Ltd. | Beijing | Beijing | Technology development, technology consultation, technology transfer, technology promotion, and technical services; sales of paper products, daily necessities, hygiene products, cosmetics, chemical products (excluding hazardous chemicals), Class I medical devices, Class II medical devices, disinfection products and non-medical masks. (The market entity may independently select business items and carry out business activities in accordance with the law; for items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments based on contents of the approval; it is prohibited to engage in business activities of items prohibited and restricted by national and municipal industrial policies.) | 51.00% | Capital contribution for establishment | |
| Zhengzhou Dolemi Sanitary Products Co., Ltd. | Zhengzhou, Henan | Zhengzhou, Henan | General items: sales of personal hygiene products; sales of household products; sales of sanitary products and disposable medical products; retail of cosmetics; sales of daily necessities; sales of plastic products; sales of paper products; sales of metal products; sales of rubber products; manufacture of daily-use ceramic products (the company may carry out business operations independently according to the law based on the business license, except for items that must be licensed according to the law). | 60.00% | Capital contribution for establishment | |
| Xi’an Dolemi Sanitary Products Co., | Xi’an, Shaanxi | Xi’an, Shaanxi | General items: sales of daily necessities; retail of cosmetics; sales of household goods; sales of office supplies; sales of arts and crafts and etiquette | 60.00% | Capital contribution for |
| Ltd. | products (except ivory and its products); sales of building decoration materials; sales of knitwear; sales of machinery and equipment; sales of instruments and meters; retail of clothes and apparels; retail of shoes and hats; sales of foods (only pre-packaged foods); sales of sundries; sales of electronic products; landscaping engineering construction; advertising design and agency; network technology services; marketing planning; convention and exhibition services; etiquette services. (The company may carry out business operations independently according to the law based on the business license, except for items that must be licensed according to the law) | establishment | ||||
| Guangdong Huashun Material Technology Co., Ltd | Jiagnmen Guangdong | Jiagnmen Guangdong | Technology services, development, consultation, exchange, transfer, and promotion; paper manufacturing; paper product manufacturing; paper product sales. (For items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments.) | 51% | Capital contribution for establishment | |
| Quxian Jiezhu Construction Development Co., Ltd | Dazhou Sichuan | Dazhou Sichuan | Licensed items: engineering construction; tap water production and supply. (For items that must be approved in accordance with the law, companies may carry out business operations upon approval by relevant departments, and the specific business items are subject to the approval document or the permit issued by competent department) General items: sewage treatment and recycling; heat production and supply; solid waste treatment; paper product manufacturing; paper product sales. (The company may carry out business operations independently according to the law based on the business license, except for items that must be licensed according to the law) | 100% | Business combinations involving enterprises under common control | |
| Guangdong Laotongxue Information Technology Co., Ltd | Zhongshan Guangdong | Zhongshan Guangdong | General items: technical services, technology development, technical consultation, technical exchange, technology transfer, technology promotion; educational consulting services (excluding educational and training activities that need to be licensed); organization of cultural and artistic exchange activities; fitness and leisure activities; institutional nursing services (excluding medical services); health consultation services (excluding diagnosis and treatment services); elderly care services; healthcare services (non-medical); traditional Chinese medicine healthcare services (non-medical); sales of health food (prepackaged); retail of household appliances; sales of sundries for daily use; sales of spare parts of household appliances; sales of household items; sales of paper products; sales of Class I medical devices; sales of Class II medical devices. (The company may carry out business operations independently according to the law based on the business license, except for items that must be licensed according to the law.) Licensed items: operation of Class III medical devices. (For items that must be approved in accordance with the law, companies may carry out | 100% | Capital contribution for establishment |
business operations upon approval by relevantdepartments, and the specific business items aresubject to the approval document or the permit issuedby competent department)
Description of the difference between the percentage of shares held in a subsidiary and the percentage of voting rights: NoneBasis for holding 50% or less than of the voting rights but controlling the investee, or holding 50% or more of the voting rights butnot controlling the investee: NoneBasis for controlling the important consolidated structured entities: NoneBasis for determining whether the Company is an agent or a principal: NoneOther descriptions: All shares held indirectly belong to the shares held by wholly-owned subsidiaries of the Company
(2) Important non-wholly-owned subsidiaries: None
The Company does not have important non-wholly-owned subsidiaries.
(3) Main financial information of important non-wholly-owned subsidiaries: None
(4) Significant restrictions on the use of the assets and the repayment of the debts of the enterprise group:
None
(5) Financial or other support provided to consolidated structured entities: None
2. Transactions in which the share of owner’s equity in a subsidiary change while control of the subsidiary isstill retained
(1) Description of changes in the share of owner’s equity in the subsidiary: None
(2) Impact of the transaction on the equity of minority shareholders and the equity attributable to owners ofthe Parent Company: NoneThere are no transactions of the Company in which the share of owner’s equity in a subsidiary changes andcontrol of the subsidiary is retained.
3. Interests in joint arrangements or associates
(1) Important joint ventures or associates: None
(2) Main financial information of important joint ventures: None
(3) Main financial information of important associates: None
(4) Summary financial information of unimportant joint ventures and associates: None
(5) Description of significant restrictions on the ability of joint ventures or associates to transfer funds to theCompany: None
(6) Excess losses incurred by joint ventures or associates: None
(7) Unconfirmed commitments related to the investment in joint ventures: None
(8) Contingent liabilities related to the investment in joint ventures or associates: None
4. Important joint operation: None
The Company does not have important joint operations.
5. Interests in unconsolidated structured entities: None
The Company does not have interests in unconsolidated structured entities.
6. Others: None
X. Risks Associated with Financial InstrumentsThe main financial instruments of the Company include monetary funds, notes receivable, accounts receivable,notes payable, accounts payable, other payables, loans, etc. Please refer to relevant items of "Note VII" for detailedinformation of all financial instruments. The risks associated with these financial instruments and the riskmanagement policies adopted by the Company to reduce these risks are as follows. The management of theCompany manages and monitors these risk exposures to ensure that the above risks are kept within control.The Company adopts the sensitivity analysis method to analyze the possible impact of reasonable and possiblechanges in risk variables on the profit and loss or shareholder equities in the current period. Since any risk variablerarely changes in isolation and the correlation between the variables will have a significant effect on the ultimatefinancial impact of changes in a certain risk variable, the following contents are under the consumption that changesof a variable are independent.The goal of the Company’s risk management is to strike a proper balance between risks and gains and to minimizethe negative impact of risks on the business performance of the Company while maximizing the interests ofshareholders and other equity investors. Based on this risk management goal, the basic strategy of the Company’s
risk management is to determine and analyze all kinds of risks faced by the Company, clarify the minimum of riskacceptance and conduct risk management, and monitor risks of all kinds in a timely and reliable manner to controlrisks within the limits.
1. Credit risk
Credit risk refers to the risk of financial losses of one party caused by the failure of the other party to perform itsobligations. As of June 30, 2023, the largest credit exposure that may cause financial losses to the Company mainlycomes from the losses of the Company’s financial assets due to failure of the other contractual party to perform itsobligations.In order to reduce credit risk, the Company only conducts transactions with recognized customers with good creditstatus, and continuously monitors the accounts receivable through credit monitoring of existing customers and aginganalysis to ensure that the Company does not face the risk of bad debts and keep the overall credit risk within control.Liquid funds of the Company are deposited in banks with high credit ratings, so the credit risk of liquid funds islow.
2. Interest rate risk
Interest rate risk refers to the risk of fluctuations in the fair value or future cash flow of financial instruments due tochanges in market interest rates. The interest rate risk faced by the Company mainly comes from bank borrowings.By developing a good relationship with banks and carrying out proper design of credit lines, types of credits, andcredit terms, the Company ensures sufficient bank credit lines to meet its various financing needs. The risk of interestrate fluctuation can be reasonably reduced by shortening the term of a single loan and specially stipulating earlyprepayment terms.
3. Foreign exchange risk
Foreign exchange risk refers to the risk of fluctuations in the fair value or future cash flow of financial instrumentsdue to changes in foreign exchange rates. The Company tries its best to match foreign currency income with foreigncurrency expenditure to reduce foreign exchange risks.Foreign exchange risks borne by the Company are mainly related to USD and HKD. Except for purchasing andselling in USD and HKD by its overseas subsidiaries, other major business activities of the Company are priced andsettled in RMB. See "Note VII (82)" for the conversion of foreign currency financial assets and liabilities into RMBas of June 30, 2023. During the reporting period, the Company generated exchange profit and loss of RMB-18,928,998.16.Sensitivity analysis of foreign exchange risk:
Analysis assumption: On the basis that all other variables remain constant on the balance sheet date, the possible,reasonable changes of foreign exchange rate will have the following pre-tax effects on the Company’s profit andloss and shareholders’ equity in the current period:
Unit：RMB
| Item | End of year | |
| Impact on profit | Impact on shareholders’ equity | |
| Appreciation of RMB against foreign currency by 1.00% | -3,386,717.77 | -3,386,717.77 |
| Depreciation of RMB against foreign currency by 1.00% | 3,386,717.77 | 3,386,717.77 |
4. Liquidity risk
Liquidity risk refers to the risk of capital shortage when an enterprise fulfills its obligation to settle accounts bydelivering cash or other financial assets. The Company’s policy is to ensure that it has sufficient cash to repaymature debts. Liquidity risk is centrally controlled by the financial departments of the Company. The financialdepartments monitor cash balances, negotiable securities that can be cashed in at any time, and carry out rolling
forecasts on cash flows in the next six months to ensure that the Company has sufficient funds to repay debts underall reasonable forecasts.Financial liabilities held by the Company as of June 30, 2023 analyzed based on the maturity period of undiscountedremaining contractual obligations are as follows:
Unit：RMB
| Item | Within 1 year | Over 1 year | Total |
| Notes payable | 326,437,678.21 | 326,437,678.21 | |
| Accounts payable | 807,906,958.92 | 1,938,383.78 | 809,845,342.70 |
| Other payables | 946,901,905.18 | 3,413,268.53 | 950,315,173.71 |
| Non-current liabilities due within one year | 8,708,819.36 | 8,708,819.36 | |
| Lease liabilities | 8,675,066.94 | 8,675,066.94 | |
| Total | 2,089,955,361.67 | 14,026,719.25 | 2,103,982,080.92 |
XI. Disclosure of Fair Value
1. Fair value of assets and liabilities measured at fair value at the end of the reporting period: None
2. Basis for determining the market price of recurring and non-recurring fair value measurement items inLevel 1: None
3. Qualitative and quantitative information on important parameters and valuation techniques used forrecurring and non-recurring fair value measurement items in Level 2: None
4. Qualitative and quantitative information on important parameters and valuation techniques used forrecurring and non-recurring fair value measurement items in Level 3: None
5. Adjustment information and sensitivity analysis of unobservable parameters between the opening andclosing book values of recurring fair value measurement items of Level 3: None
6. For recurring fair value measurement items with transfer between different levels, reasons for suchtransfer and policies for determining the time of conversion: None
7. Changes in valuation techniques within the reporting period and reasons for such changes: None
8. Fair value of financial assets and financial liabilities not measured at fair value: None
9. Others: None
XII. Related Parties and Related Party Transactions
1. Information on the Parent Company of the Company
| Name of Parent Company | Registered address | Principal businesses | Registered capital | Shareholding percentage of the Parent Company to the Company | Percentage of voting right of the Parent Company to the Company |
| Guangdong Zhongshun Paper Group Co., Ltd. | Zhongshan, Guangdong | External investment; consulting of information on commodities circulation (exclusive of real estate, labor services, financial futures, and studying abroad) | RMB30 million | 28.60% | 28.60% |
Information on the Company’s Parent CompanyThe ultimate controller of the Company is Mr. Deng Yingzhong, the father, and Mr. Deng Guanbiao and Mr. Deng Guanjie, whosetwo sons.
2. Information on subsidiaries of the Company
See Note IX Equities in Other Entities for detailed information on the subsidiaries of the Company.
3. Information on the joint ventures and associates of the Company
For important joint ventures or associates, please refer to the notes for details.Other descriptionThe Company does not have interests in joint venture arrangements or associates.
4. Information on other related parties
| Name of other related parties | Relationship between other related parties and the Company |
| Chung Shun Co. | A company controlled by the Company’s actual controller/other shareholder holding 5% or more of shares |
| Guangzhou Zhongshun Trade Co., Ltd. | A company controlled by the nephew and the husband of the niece of Mr. Deng Yingzhong, the Company’s actual controller Mr. Deng Yingzhong |
| Bama Zhongshun Health Products Co., Ltd. | A company in which the Company’s actual controller Mr. Deng Yingzhong serves as a director |
| Yantai Zhongshun Network Technology Co., Ltd. | A company controlled by the Company’s controlling shareholders in the past 12 months |
| Shenzhen Zhongshun Caizhi Investment Co., Ltd. | A company jointly controlled by the Company’s actual controllers Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie |
| Pengzhou Enjoying Life Trading Co., Ltd. | A company in which the son of the Company’s Vice President Yue Yong holds 50% equity |
| Sichuan West Enjoying Life Trading Co., Ltd. | A company where the son of the Company’s Vice President Yue Yong holds 50% equity |
| Chongqing Qinyue Trading Co., Ltd. (Former: Chongqing Fuling District Qinyue Household Necessities Co., Ltd.) | A company in which the spouse of the brother of the Company’s Vice President Yue Yong controls and serves as the executive director, manager, and legal representative of the company |
| Shenzhen Jinju Investment Co., Ltd. | A company in which the Company’s actual controller Mr. Deng Guanbiao serves as a director |
| Zhongshan Zhongshun Caizhi Trading Co., Ltd. | A company in which the Company’s actual controller Mr. Deng Guanjie serves as the manager and executive director |
| Zhongshan Qianlai Network Technology Co., Ltd. | A company controlled by the Company’s independent director Mr. Liu Die |
| Foshan Yingfang Jiayu Consulting Services Co., Ltd. | A company controlled by the Company’s supervisor Liang Yongliang and serves as the executive director, manager, and legal representative of the company |
| Foshan Shunde District Taogang Trading Co., Ltd | A company where the brother of Deng Yingzhong, an actual controller of the company, holds 50% of the shares and serves as the legal representative |
| Meizhou Xinhong Electronics Co., Ltd. | A company in which the mother-in-law of the Company’s actual controller Mr. Deng Guanbiao serves as the General Manager, executive director and the legal representative |
| Guangzhou Chenhui Paper Co., Ltd. | A company in which the sibling-in-laws of the Company’s supervisor Zhang Gao act as the legal representative |
| Guangzhou Jiahui Enterprise Management Co., Ltd. | A company in which the sibling-in-laws of the Company’s supervisor Zhang Gao controls and acts as the legal representative while Mr. Zhang’s spouse serves as the executive director |
| China Paper Investment Co., Ltd. | A company in which the sibling-in-laws of the Company’s supervisor Zhang Gao serve as directors in the past 12 months |
| Zhejiang FTZ Xinjiachang Trading Co., Ltd. | A company in which the sibling-in-laws of the Company’s supervisor Zhang Gao acts as directors |
| Zhuhai High-tech Zone Shengda Engineering Consulting Service Center | A company in which the son of the Company’s CFO Dong Ye serves as the legal representative |
| Zhongshan Jufengbao Trading Co., Ltd. | A company in which the Company’s Board Secretary and Vice President serves as the executive director, manager and legal representative |
| Guangdong Huichuang Zhiyuan Enterprise Management Co., Ltd | A company controlled by Chairman Liu Peng and served as the legal representative, manager, and executive director of the company |
| Jiangmen Yutongda Trading Co., Ltd | A company controlled by Vice President Lin Tiande and served as the legal representative and executive director |
| Yingtan Dongwu Technology Co., Ltd | A company in which the Company’s director Yu Ep. Rachel Jing acts as Chairman |
Other descriptionNote: The Company’s directors, supervisors, senior managers and their close family members are related parties ofthe Company.
5. Information on related party transactions
(1) Related party transactions for purchase and sale of goods, and provision and acceptance of labor servicesPurchase of goods/acceptance of labor services：NoneTable of sale of goods/provision of labor services
Unit: RMB
| Related party | Content of related party transaction | Incurred in the current period | Incurred in the prior period |
| Pengzhou Enjoying Life Trading Co., Ltd. | Sale of goods | 8,288.50 | |
| Sichuan West Enjoying Life Trading Co., Ltd. | Sale of goods | 111.50 |
Explanation of the related party transactions for purchase and sale of goods, and provision and acceptance of labor services：None
(2) Related entrusted management/contracting and entrusting management/contracting out: None
(3) Related lease
The Company as the lessor: NoneThe Company as the lessee:
Unit: RMB
| Name of lessor | Type of leased assets | Rental costs for simplified short-term leases and low value asset leases (if applicable) | Variable lease payments not included in the measurement of lease liabilities (if applicable) | Rent paid | Interest expense of lease liabilities undertaken | Increased use right assets | |||||
| Incurred in the current period | Incurred in the prior period | Incurred in the current period | Incurred in the prior period | Incurred in the current period | Incurred in the prior period | Incurred in the current period | Incurred in the prior period | Incurred in the current period | Incurred in the prior period | ||
| Mr. Deng | Housing lease | 1,400,323.75 | 1,473,925.82 | 61,859.28 | 136,797.37 | 1,029,607.91 | |||||
Yingzhong,Mr.DengGuanbiao andMr.DengGuanjie
Explanation of related lease: None
(4) Related guarantee: None
(5) Interbank borrowing between related parties: None
(6) Asset transfer and debt reorganization between related parties: None
(7) Remuneration for key managers
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Remuneration for key managers | 9,939,572.23 | 13,310,774.14 |
(8) Other related party transactions
6. Receivables from and payables to related parties
(1) Receivables：None
(2) Payables
Unit: RMB
| Project | Related party | Book balance at the end of the period | Book balance at the beginning of the period |
| Contract liabilities | Sichuan West Enjoying Life Trading Co., Ltd. | 0.90 | 0.90 |
| Contract liabilities | Pengzhou Enjoying Life Trading Co., Ltd. | 8.37 | 8.37 |
7. Commitments of related parties: None
8. Others: None
XIII. Share-based Payment
1. Overall information on share-based payment
√ Applicable □ Not applicable
Unit: RMB
| The Company’s total amount of all equity instruments granted in the current period | 36,441,500.00 |
| The Company’s total amount of all equity instruments exercised in the current period | 744,955.00 |
| The Company’s total amount of all equity instruments expired in the current period | 6,082.00 |
| Scope of exercise prices and remaining contractual term of the Company’ stock options issued as at the end of the reporting period | 1. The exercise price for reserved stock options awarded by the Company under the 2018 Stock Option and Restricted Stock Incentive Plan as at the end of reporting period is RMB13.703/share; the validity period is from the grant date of the stock options to the date when all stock options are exercised or canceled, with a maximum period of 60 months. 2. The grant price for restricted shares awarded by the Company in the first grant under the 2022 Stock Option and Restricted Stock Incentive Plan as at the end of reporting period is RMB6.32/share, and the validity period is from the registration completion date of the first-granted restricted shares to the date when all the shares are unlocked or repurchased and canceled, with a maximum period of 60 months. The exercise price for stock options awarded in the first grant is RMB9.48 per share, and the validity period is from the registration completion date of the first-granted stock opinions to the date when all the options are exercised or canceled, with a maximum period of 60 months. |
2. Equity-settled share-based payment
√ Applicable □ Not applicable
Unit: RMB
| Method of determining the fair value of equity instruments at the grant date | Restricted shares: the stock closing prices at the grant date Stock options: Black-Scholes model for option pricing |
| Basis for determining the number of vested equity instruments | Upon approval of the general meeting of shareholders |
| Reasons for significant differences between current estimates and previous estimates | None |
| Cumulative amount of equity-settled share-based payments recognized as capital surplus | 148,368,269.99 |
| Total fees confirmed by the equity-settled share-based payment in the current period | 29,687,986.01 |
3. Cash-settled share-based payment
□ Applicable √ Not applicable
4. Revision and termination of share-based payment
There was no revision and termination of share-based payment of the Company during the reporting period.
5. Others: None
XIV. Commitments and Contingencies
1. Significant commitments
Significant commitments on the balance sheet date
As at June 30, 2023, the Company had no significant commitments that should have been disclosed but are notdisclosed.
2. Contingencies
(1) Significant contingent matters on the balance sheet date
The situation of our company providing guarantees for subsidiaries:
| Guaranteed party | Currency | Guarantee amount | Starting date of guarantee | Guarantee expiration date | Whether it is related party guarantee? |
| C&S Hong Kong、Macao C&S、Zhong Shun International | USD | 50,000,000.00 | 2022.11.14 | 2027.7.31 | No |
| Zhongshan Trading | RMB | 150,000,000.00 | 2022.11.23 | 2026.11.9 | No |
| Zhongshan Trading | RMB | 200,000,000.00 | 2023.1.30 | 2029.1.29 | No |
| Zhongshan Trading | RMB | 200,000,000.00 | 2023.6.14 | 2027.4.19 | No |
| Zhongshan Trading | RMB | 100,000,000.00 | 2023.5.25 | 2027.4.18 | No |
| Zhongshan Trading | RMB | 500,000,000.00 | 2023.4.26 | 2028.12.31 | No |
| Zhongshan Trading | RMB | 50,000,000.00 | 2023.4.27 | 2027.4.27 | No |
| Zhongshan Trading | RMB | 300,000,000.00 | 2022.12.8 | 2025.12.31 | No |
| Zhongshan Trading | RMB | 150,000,000.00 | 2022.12.23 | 2026.9.22 | No |
| Zhongshan Trading | RMB | 200,000,000.00 | 2022.5.17 | 2030.2.27 | No |
| Zhongshan Trading | RMB | 200,000,000.00 | 2022.8.18 | 2030.12.31 | No |
| Jiangmen C&S | RMB | 120,000,000.00 | 2022.11.23 | 2026.11.7 | No |
| Jiangmen C&S | RMB | 150,000,000.00 | 2023.1.17 | 2026.11.29 | No |
| Jiangmen C&S | RMB | 150,000,000.00 | 2023.6.14 | 2027.4.19 | No |
| Jiangmen C&S | RMB | 100,000,000.00 | 2023.5.25 | 2027.4.18 | No |
| Jiangmen C&S | RMB | 50,000,000.00 | 2020.12.23 | 2025.12.23 | No |
| Yunfu Trading | RMB | 200,000,000.00 | 2022.11.23 | 2026.11.7 | No |
| Yunfu Trading | RMB | 80,000,000.00 | 2020.4.14 | 2028.4.14 | No |
| Yunfu Trading | RMB | 150,000,000.00 | 2023.6.15 | 2027.4.19 | No |
| Yunfu Trading | RMB | 70,000,000.00 | 2023.1.17 | 2026.11.29 | No |
| Yunfu Trading | RMB | 100,000,000.00 | 2023.5.25 | 2027.4.18 | No |
| Hubei C&S | RMB | 100,000,000.00 | 2023.2.13 | 2030.11.2 | No |
| Dazhou C&S | RMB | 100,000,000.00 | 2023.2.13 | 2029.11.2 | No |
| Jiangmen C&S、Yunfu Trading、Hubei C&S | RMB | 220,000,000.00 | 2022.1.17 | 2026.1.17 | No |
| C&S Hong Kong、Zhong Shun International | HKD | 203,000,000.00 | 2021.9.8 | 2024.9.8 | No |
| C&S Hong Kong、Macao C&S | HKD | 400,000,000.00 | 2021.3.17 | 2025.12.31 | No |
| C&S Hong Kong、Macao C&S | USD | 24,000,000.00 | 2020.3.27 | 2025.8..22 | No |
| C&S Hong Kong、Zhong Shun International、Macao C&S | USD | 30,000,000.00 | 2023.3.29 | 2026.3.29 | No |
| Guaranteed party | Currency | Guarantee amount | Starting date of guarantee | Guarantee expiration date | Whether it is related party guarantee? |
| C&S Hong Kong、Zhong Shun International、Macao C&S | USD | 63,500,000.00 | 2023.1.20 | 2026.1.20 | No |
| C&S Hong Kong、Zhong Shun International | USD | 30,000,000.00 | 2023.4.24 | 2026.2.22 | No |
| C&S Hong Kong | USD | 20,000,000.00 | 2022.9.1 | 2024.9.1 | No |
| C&S Hong Kong | USD | 10,000,000.00 | 2022.11.17 | 2029.10.28 | No |
| Macao C&S | USD | 11,000,000.00 | 2018.3.23 | 2024.9.23 | No |
| Macao C&S | USD | 10,000,000.00 | 2022.11.17 | 2029.10.28 | No |
| Macao C&S | USD | 30,000,000.00 | 2021.11.12 | 2024.10.20 | No |
| Macao C&S | RMB | 70,000,000.00 | 2018.8.15 | 2025.8.15 | No |
(2) Explanations are also necessary if the Company has no significant contingent matters to be disclosedThere are no significant contingent matters to be disclosed in the Company.
3. Others: None
XV. Events after Balance Sheet Date
1. Significant non-adjusting events: None
2. Profit distribution: None
3. Sales return: None
4. Explanation on other events after the balance sheet date: None
XVI. Other Significant Matters
1. Corrections to previous accounting errors
2. Debt restructuring: None
3. Assets replacing
4. Annuities plan: None
5. Operation discontinuation: None
6. Segment information
(1) Determination basis and accounting policies of reporting segments
The Company does not have operating segments with different economic features and hence has not identifiedoperating segments according to internal organization structure, management requirements and internal reportingpolicies. Therefore, there was no information on reporting segments based on operating segments to be disclosed.
(2) Financial information on reporting segments: None
(3) Explanation on reasons if the Company has no reporting segments or is unable to disclose the total assetsand liabilities of the reporting segments: None
(4) Other description: None
7. Other important transactions and matters that may affect the decisions of investors: None
8. Others
External guarantees of the Company
In 2022, the Company signed the XIAOYIDA Business Cooperation Agreement with Bank of China LimitedZhongshan Branch and Shanghai Junmeng E-commerce Co., Ltd. (No. 2022-XYDXY-33725001), under which thebank offers a credit line of XIAOYIDA service up to RMB235 million to Shanghai Junmeng and the Companyprovides a joint and several liabilities guarantee. The line of credit is valid from September 27, 2022 to August 4,2023. As of June 30, 2023, Shanghai Junmeng E-commerce Co., Ltd. has a financing balance of RMB 90 millionin sales of XIAOYIDA business.
In 2022, Zhongshan Zhongshun Trading Co., Ltd., a subsidiary of the Company, signed the XIAOYIDA BusinessCooperation Agreement with Bank of China Limited Zhongshan Branch and Wuhan Jie Rou E-commerce Co., Ltd.(No. 2022-XYDXY-33725002), under which the bank offers a credit line of XIAOYIDA service up to RMB150million to Wuhan Jie Rou and the Company provides a joint and several liabilities guarantee. The line of credit isvalid from September 26, 2022 to August 3, 2023. As of June 30, 2023, Wuhan Jie Rou E-commerce Co., Ltd. hasa financing balance of RMB 88.6 million in sales of XIAOYIDA business.
XVII. Notes to Major Items of Financial Statements of the Parent Company
1. Accounts receivable
(1) Accounts receivable disclosure by category
Unit: RMB
| Category | Balance at the end of the period | Balance at the beginning of the period | ||||||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |||||
| Amount | Percentage | Amount | Provision ratio | Amount | Percentage | Amount | Provision ratio | |||
| Including: | ||||||||||
| Accounts receivable for which bad debt reserve is set aside in portfolios | 102,751,123.49 | 100.00% | 2,258,364.23 | 2.20% | 100,492,759.26 | 140,697,770.14 | 100.00% | 1,966,017.33 | 1.40% | 138,731,752.81 |
| Including: | ||||||||||
| Portfolio based on aging | 73,836,825.99 | 71.86% | 2,258,364.23 | 3.06% | 71,578,461.76 | 61,917,499.22 | 44.01% | 1,966,017.33 | 3.18% | 59,951,481.89 |
| Portfolio based on related parties | 28,914,297.50 | 28.14% | 28,914,297.50 | 78,780,270.92 | 55.99% | 78,780,270.92 | ||||
| Total | 102,751,123.49 | 100.00% | 2,258,364.23 | 2.20% | 100,492,759.26 | 140,697,770.14 | 100.00% | 1,966,017.33 | 1.40% | 138,731,752.81 |
Bad debt reserve set aside in portfolios: 2,258,364.23
Unit: RMB
| Name | Balance at the end of the period | ||
| Book balance | Impairment provision | Ratio of provision | |
| Within the credit period | 61,071,930.68 | 1,221,438.61 | 2.00% |
| Credit period - 1 year | 9,505,875.50 | 475,293.79 | 5.00% |
| 1 to 2 years | 2,930,657.31 | 439,598.60 | 15.00% |
| 2 to 3 years | 210,740.10 | 63,222.03 | 30.00% |
| 3 to 5 years | 117,622.40 | 58,811.20 | 50.00% |
| Total | 73,836,825.99 | 2,258,364.23 |
Description of reason for the portfolio:
Accounts receivable with the same aging have similar credit risk characteristics.Description of reason for the portfolio:
If the bad debt reserve of accounts receivable is set aside according to general model of expected credit loss, please refer to thedisclosure method of other receivables to disclose relevant information on bad debt reserve:
□ Applicable √ Not applicable
Disclose by aging
Unit: RMB
| Aging | Book balance |
| Within 1 year (inclusive) | 99,492,103.68 |
| 1 to 2 years | 2,930,657.31 |
| 2 to 3 years | 210,740.10 |
| Over 3 years | 117,622.40 |
| 3 to 4 years | 117,622.40 |
| Total | 102,751,123.49 |
(2) Bad debt reserve that is set aside, recovered or transferred back in the reporting periodProvision of bad debt reserve of the reporting period:
Unit: RMB
| Category | Balance at the beginning of the period | Amount of change in the reporting period | Balance at the end of the period | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Accounts receivable | 1,966,017.33 | 292,346.90 | 2,258,364.23 | |||
| Total | 1,966,017.33 | 292,346.90 | 2,258,364.23 | |||
(3) Accounts receivable actually written off in the reporting period
The Company did not have written-off accounts receivable in the reporting period.
(4) Top five debtors in closing balance of accounts receivable
Unit: RMB
| Name of institution | Balance of accounts receivable at the end of the period | Percentage in total balance of accounts receivable at the end of the period | Balance for bad debt reserve at the end of the period |
| 1st | 31,443,340.61 | 30.60% | 645,652.01 |
| 2nd | 28,296,177.06 | 27.54% | |
| 3rd | 4,242,977.08 | 4.13% | 116,436.57 |
| 4th | 3,657,504.03 | 3.56% | 81,155.74 |
| 5th | 2,759,915.64 | 2.69% | 55,198.31 |
| Total | 70,399,914.42 | 68.52% |
(5) Amounts of assets and liabilities that are formed by the transfer and ongoing involvement of accountsreceivableThe Company has no accounts receivable derecognized due to the transfer of financial assets as at the end of thereporting period.
(6) Accounts receivable derecognized due to transfer of financial assets
The Company has no accounts receivable derecognized due to transfer of financial assets.
2. Other receivables
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Other receivables | 101,551,635.79 | 226,320,859.44 |
| Total | 101,551,635.79 | 226,320,859.44 |
(1) Interest receivable
1) Classification of interest receivable: None
2) Significant overdue interest: None
3) Provision of bad debt reserve
□ Applicable √ Not applicable
(2) Dividends receivable
1) Classification of dividends receivable: None
2) Significant dividends receivable exceeding one year: None
3) Provision of bad debt reserve
□ Applicable √ Not applicable
Other description: None
(3) Other receivables
1) Classification of other receivables by nature
Unit: RMB
| Nature | Book balance at the end of the period | Book balance at the beginning of the period |
| Current accounts | 99,440,532.11 | 223,230,988.36 |
| Margins and deposits | 573,671.00 | 345,165.60 |
| Reserve | 1,359,974.52 | 436,792.35 |
| Others | 512,657.58 | 2,663,363.48 |
| Total | 101,886,835.21 | 226,676,309.79 |
2) Provision of bad debt reserve
Unit: RMB
| Bad debt provision | Phase I | Phase II | Phase III | Total |
| Expected credit loss in the next 12 months | Expected credit losses in the whole duration (without credit impairment) | Expected credit losses in the whole duration (with credit impairment) | ||
| Balance as at January 1, 2021 | 355,450.35 | 355,450.35 | ||
| Balance as at January 1, 2021 in the reporting period | ||||
| Transferred-back in the reporting period | -20,250.93 | -20,250.93 | ||
| Balance as at December 31, 2021 | 335,199.42 | 335,199.42 |
Description of changes in the book balance where there are significant changes in provision for the current period
□ Applicable √ Not applicable
Disclose by aging
Unit: RMB
| Aging | Book balance |
| Within 1 year (inclusive) | 101,741,744.50 |
| 1 to 2 years | 90,490.71 |
| 2 to 3 years | 28,600.00 |
| Over 3 years | 26,000.00 |
| Over 5 years | 26,000.00 |
| Total | 101,886,835.21 |
3) Bad debt reserve that is set aside, recovered or transferred back in the reporting periodProvision of bad debt reserve of the reporting period:
Unit: RMB
| Category | Balance at the beginning of the period | Amount of change in the reporting period | Balance at the end of the period | |||
| Provision | Recovery or reversal | Write-off | Others | |||
| Other receivables | 355,450.35 | -20,250.93 | 335,199.42 | |||
| Total | 355,450.35 | -20,250.93 | 335,199.42 | |||
4) Other receivables actually written off in the reporting period: None
5) Top five debtors in closing balance of other accounts receivable
Unit: RMB
| Name of | Nature of the | Balance at the end | Aging | Percentage in total balance | Balance of bad |
| institution | amount | of the period | of other receivables at the end of the period | debt reserve at the end of the period | |
| 1st | Current accounts | 50,000,000.00 | Within 1 year | 49.07% | |
| 2nd | Current accounts | 45,675,960.94 | Within 1 year | 44.83% | |
| 3rd | Current accounts | 1,002,000.00 | Within 1 year | 0.98% | 50,100.00 |
| 4th | Current accounts | 629,891.67 | Within 1 year | 0.62% | 31,494.58 |
| 5th | Others | 398,499.92 | Within 1 year | 0.39% | 19,925.00 |
| Total | 97,706,352.53 | 95.89% | 101,519.58 |
6) Receivables involving government grants: None
7) Other receivables derecognized due to the transfer of financial assets: None
8) Amount of assets and liabilities that are formed by the transfer and ongoing involvement of otherreceivables: None
3. Long-term equity investments
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period | ||||
| Book balance | Impairment provision | Book value | Book balance | Impairment provision | Book value | |
| Investment in subsidiaries | 2,063,642,700.23 | 2,063,642,700.23 | 2,007,893,370.09 | 2,007,893,370.09 | ||
| Total | 2,063,642,700.23 | 2,063,642,700.23 | 2,007,893,370.09 | 2,007,893,370.09 | ||
(1) Investment in subsidiaries
Unit: RMB
| Investee | Balance at the beginning of the period (Book value) | Increase/decrease in the period | Closing balance (book value) | Closing balance of impairment provision | |||
| Increase in investment | Decrease in investment | Impairment Provision | Others | ||||
| Jiangmen Zhongshun Paper Co., Ltd. | 699,279,941.09 | 418,173.42 | 699,698,114.51 | ||||
| Zhongshan Zhongshun Trading Co., Ltd. | 97,017,154.32 | 3,762,092.33 | 100,779,246.65 | ||||
| Yunfu Hengtai Trading Co., Ltd. | 30,201,334.69 | 30,201,334.69 | |||||
| C&S (Yunfu) Paper Co., Ltd. | 658,739,470.31 | 1,191,459.81 | 659,930,930.12 | ||||
| C&S (Zhongshan) Paper Co., Ltd. | 12,683,100.00 | 12,683,100.00 | |||||
| Sun Daily Necessities Co., Ltd. | 200,000.00 | 200,000.00 | |||||
| C&S (Sichuan) Paper Co., Ltd. | 177,190,962.29 | 6,094,059.24 | 183,285,021.53 | ||||
| C&S (Dazhou) Paper Co., Ltd. | 61,000,000.00 | 39,000,000.00 | 117,026.34 | 100,117,026.34 | |||
| C&S (Hubei) Paper Co., Ltd. | 197,773,603.11 | 3,276,897.18 | 201,050,500.29 | ||||
| Zhejiang Zhongshun Paper Co., Ltd. | 58,324,220.72 | 1,616,562.91 | 59,940,783.63 | ||||
| C&S (Jiangsu) Paper Co., Ltd. | 6,302,118.41 | 6,302,118.41 | |||||
| Zhong Shun International Co., Ltd. | 900,563.53 | 156,032.58 | 1,056,596.11 | ||||
| Dolemi Sanitary Products Co., Ltd. | 1,060.18 | 1,060.18 | |||||
| Chengdu Zhongshun Paper Co., Ltd. | 678,315.22 | 54,611.97 | 732,927.19 | ||||
| Xiaogan C&S Trading Co., Ltd. | 322,149.62 | 322,149.62 | |||||
| Hangzhou Jie Rou Trading Co., Ltd. | 130,799.98 | 62,414.36 | 193,214.34 | ||||
| Shanghai Huicong Paper Co., Ltd. | 8,576.62 | 8,576.62 | |||||
| Beijing Bloomage Jierou Biotechnology Co., Ltd. | 2,040,000.00 | 2,040,000.00 | |||||
| Guangdong Huashun Material Technology Co., Ltd | 5,100,000.00 | 5,100,000.00 | |||||
| 合计 | 2,007,893,370.09 | 39,000,000. | 16,749,330.1 | 2,063,642,700.2 |
| 00 | 4 | 3 |
(2) Investment in associates and joint ventures: None
(3) Other description: None
4. Operating income and operating cost
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period | ||
| Income | Cost | Income | Cost | |
| Principal business | 787,073,336.16 | 728,588,036.18 | 1,040,228,094.53 | 934,724,115.97 |
| Total | 787,073,336.16 | 728,588,036.18 | 1,040,228,094.53 | 934,724,115.97 |
Information related to income:
Unit: RMB
| Contract classification | Branch 1 | Branch 2 | Total | |
| By product type | 787,073,336.16 | 787,073,336.16 | ||
| Including: | ||||
| Household paper | 776,465,513.84 | 776,465,513.84 | ||
| Personal care and others | 10,607,822.32 | 10,607,822.32 | ||
| By operating region | 787,073,336.16 | 787,073,336.16 | ||
| Including: | ||||
| Domestic | 787,073,336.16 | 787,073,336.16 | ||
| Abroad | ||||
| By market or customer type | ||||
| Including: | ||||
| Contract type | ||||
| Including: | ||||
| By the time of goods transfer | ||||
| Including: | ||||
| By contract term | ||||
| Including: | ||||
| By sales channel | 787,073,336.16 | 787,073,336.16 | ||
| Including: | ||||
| Traditional | 476,881,334.83 | 476,881,334.83 | ||
| Non-traditional | 310,192,001.33 | 310,192,001.33 | ||
| Total | 787,073,336.16 | 787,073,336.16 |
Information related to performance obligation: NoneInformation related to the transaction price apportioned to the remaining performance obligation:
The amount of income corresponding to the obligations of contract performance with an executed contract that is not performed orfully performed at the end of the reporting period is RMB1,788,737.74, of which the income of RMB1,788,737.74 is expected to beconfirmed as income in the year of 2023.
5. Return on investment
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Income from long-term equity-based investment accounted for using the cost method | 454,700,000.00 | 491,775,000.00 |
| Investment income from disposal of trading financial assets | 968,000.00 | |
| Others | 990,155.36 | 136,145.00 |
| Total | 456,658,155.36 | 491,911,145.00 |
6. Others: None
XVIII. Supplementary Information
1.List of non-recurring profits and losses of the reporting period
√ Applicable □ Not applicable
Unit: RMB
| Item | Amount | Description |
| Profits/losses from the disposal of non-current asset | -2,960,777.02 |
Governmental grants reckoned into current profits/losses (not includinggrants enjoyed in quota or ration according to national standards, which areclosely relevant to the company’s normal business)
| 11,874,320.21 | ||
| Profits/losses from assets entrusted to others for investment or management | 990,155.36 | |
| Except for effective hedging business related to the normal operation of the company, fair value gains and losses arising from holding trading financial assets and trading financial liabilities, as well as investment income obtained from disposal of trading financial assets, trading financial liabilities, and available for sale financial assets | 968,000.00 | |
| Other non-operating income and expenses except for the aforementioned items | 2,680,646.89 | |
| Less: Influence of income tax | 2,756,058.56 | |
| Total | 10,796,286.88 | -- |
Details of other profit and loss items that meet the definition of non-recurring profit and loss:
□ Applicable √ Not applicable
The Company has no other profit and loss items that meet the definition of non-recurring profit and loss.Descriptions where the Company defines any non-recurring profit and loss items listed in the No. 1 Explanatory Announcement onInformation Disclosure of Companies Offering Securities to the Public—Non-recurring Profit and Loss as recurring profit and lossitems during the reporting period
□ Applicable √ Not applicable
2. Return on net assets and earnings per share
| Profit in the reporting period | Weighted average return on net assets | Earnings per share | |
| Basic earnings per share (RMB/share) | Diluted earnings per share (RMB/share) | ||
| Net profit attributable to the ordinary shareholders of the Company | 1.61% | 0.06 | 0.06 |
| Net profit attributable to the ordinary shareholders of the Company after excluding non-recurring profit and loss | 1.40% | 0.06 | 0.06 |
3. Difference in accounting data under domestic and international accounting standards
(1) Net profit and net asset differences under International Financial Reporting Standards (IFRS) andChinese Accounting Standards (CAS)
□ Applicable √ Not applicable
(2) Net profit and net asset differences under foreign accounting standards and Chinese AccountingStandards (CAS)
□ Applicable √ Not applicable
(3) Explanation of reasons for the differences between accounting data disclosed under domestic and overseasaccounting standards. If differences are adjusted based on data audited by overseas audit institutions, thename of the institution should be noted.
4. Others: None
If there are any ambiguities, the Chinese version shall prevail.