C&S Paper Co., Ltd.Semi-Annual Report 2021
August 2021
Section I Important Notice, Contents and Definitions
The Board of Directors and the Board of Supervisors of the Company and itsdirectors, supervisors and senior management warrant that the informationcontained in this semi-annual report is true, accurate and complete without anyfalse and misleading statements or material omissions, and severally and jointlyaccept legal liability thereof.Liu Peng, the person in charge of the Company, Dong Ye, the person in charge ofaccounting of the Company, and Xu Xianjing, the person in charge of theaccounting department of the Company, have declared that they warrant thetruthfulness, accuracy and completeness of the financial statements set out inthis semi-annual report.All directors of the Company attended the Board meeting on which this reportwas reviewed.Discrepancies in the sum of decimals in this report are caused by rounding.The forward-looking statements in this report, including future plans anddevelopment strategies, do not constitute substantive commitments of theCompany to investors. Investors should be aware of the investment risks.The Company has described potential risk factors and countermeasures thatmay exist in its operations in detail in Section III Discussion and Analysis of theManagement and Section X Risks Faced by the Company and Countermeasures.
Investors are advised to pay attention to the relevant contents.The Company plans not to distribute cash dividend, issue bonus share, ortransfer capital reserve into share capital.
Contents
Section I Important Notice, Contents and Definitions ...... 1
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 ...... 31
Section VI Significant Events ...... 40
Section VII Changes in Shareholding and Information of Shareholders ...... 60
Section VIII Particulars of Preference Shares ...... 69
Section IX Corporate Bonds ...... 70
Section X Financial Report ...... 71
Documents Available for Inspection
1. The Semi-annual Report 2021 affixed with the signature of Mr. Liu Peng, theCompany’s legal representative
2. Financial statements affixed with the signatures and stamps of Mr. Liu Peng, thelegal representative of the Company, Mr. Dong Ye, person in charge of accounting,and Ms. Xu Xianjing, person in charge of accounting department of the Company
3. All original copies of the Company’s documents and the original drafts of theCompany’s announcements as disclosed in the newspaper designated by the CSRCduring the reporting period
4. Place for document inspection: Office of the Board of Directors
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 | |
| 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. | |
| 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. | |
| Yunfu Trading | Yunfu Hengtai Trading Co., Ltd., formerly known as C&S (Yunfu) Trading Co., Ltd. | |
| Tangshan C&S, Tangshan subsidiary | C&S Paper Co., Ltd. Tangshan Branch | |
| Zhongshan Paper | C&S (Zhongshan) Paper Co., Ltd., formerly known as Zhongshan Tongfu Trade Co., Ltd. | |
| Macao C&S | C&S (Macao) Co., Ltd. | |
| Dazhou C&S | C&S (Dazhou) Paper Co., Ltd. | |
| Sun C&S | Sun Daily Necessities Co., Ltd. | |
| Dolemi | Dolemi Sanitary Products Co., Ltd. | |
| Jiangsu C&S | C&S (Jiangsu) Paper Co., Ltd. | |
| Yunnan Dolemi | Yunnan Dolemi Trading Co., Ltd. | |
| Luzhou Dolemi | Luzhou Dolemi Sanitary Products Co., Ltd. | |
| Mianyang Dolemi | Mianyang Dolemi Sanitary Products Co., Ltd. | |
| Mazars | Mazars CPA Limited (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 | Liang Yao |
| Address | No. 136 Caihong Avenue, West District, Zhongshan City | No. 136 Caihong Avenue, West District, Zhongshan City |
| Tel | 0760-87883333 | 0760-87883333 |
| Fax | 0760-23886886 | 0760-23886886 |
| Zhhaijun003@163.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
| Registered address | No. 1 Longcheng Road, Dongsheng Town, Zhongshan City |
| Postal code of registered address | 528414 |
| Office address | No. 136 Caihong Avenue, West District, Zhongshan City |
| Postal code of office address | 528401 |
| Company website | https://www.zsjr.com/ |
| dsh@zsjr.com | |
| Disclosure date on the website on which the temporary announcements are publicized (if any) | April 29, 2021 |
Search index on the website on which thetemporary announcements are publicized (ifany)Announcement on Resolutions of the 4th Meeting of the Fifth Session of theBoard of Directors, Articles of Association of the Company (April 2021); fordetails, please refer to http://www.cninfo.com.cn
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-annualreport during the reporting period. Please refer to the Annual Report 2020 for details.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) | 4,247,641,836.38 | 3,616,201,399.80 | 17.46% |
| Net profit attributable to shareholders of the listed company (RMB) | 407,161,317.15 | 452,699,484.61 | -10.06% |
| Net profit attributable to shareholders of the listed company after deducting non-recurring profit and loss (RMB) | 398,988,234.69 | 446,535,737.96 | -10.65% |
| Net cash flow from operating activities (RMB) | 737,865,788.19 | 504,558,588.33 | 46.24% |
| Basic earnings per share (RMB/share) | 0.3140 | 0.3519 | -10.77% |
| Diluted earnings per share (RMB/share) | 0.3109 | 0.3462 | -10.20% |
| Weighted average return on net assets | 7.98% | 10.46% | -2.48% |
| End of current period | End of previous year | Changes over end of previous year | |
| Total assets (RMB) | 7,138,935,102.92 | 7,478,439,747.77 | -4.54% |
| Net assets attributable to shareholders of the listed company (RMB) | 4,851,858,577.42 | 5,042,146,076.42 | -3.77% |
V. 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
No such differences for the reporting period
2. Net profit and net asset differences under foreign accounting standards and Chinese AccountingStandards (CAS)
□ Applicable √ Not applicable
No such differences for the reporting periodVI. 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) | -887,044.27 | |
| Governmental grants reckoned into current profits/losses (not including grants enjoyed in quota or ration according to national standards, which are closely relevant to the company’s business) | 10,556,600.31 | |
| Profits/losses from assets entrusted to others for investment or management | 358,473.15 | Returns on principal-protected wealth management products at maturity and reverse repo of treasury bonds |
| Other non-operating income and expenses except for the aforementioned items | -187,907.30 | |
| Less: Influence of income tax | 1,667,039.43 | |
| Total | 8,173,082.46 | -- |
Reason shall be provided if the company defines non-recurring profit and loss items as defined or listed in the No.1 Explanatory Announcement on Information Disclosure for Companies Offering their Securities to the Public—Non-recurring Profit and Loss as recurring profit and loss items.
□ Applicable √ Not applicable
The Company did not define any non-recurring profit and loss items defined or 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 PeriodMr. Deng Yingzhong, founder of the Company, initiated his entrepreneurial process in 1978. Starting fromintensive paper processing, the Company has developed into a leading household paper enterprise integratingR&D, production and sales after forty-three years of striving. With an adherence to its corporate values of“products need brands, enterprises need brands, and people need brands”, the Company has extended its productsfrom household paper to cross-category household daily necessities including cotton series products, sanitarywipes, baby diapers, etc.Currently, the Company features three major brands, namely, Jie Rou, Sun, and Dolemi. Main products includepaper rolls, coreless rolls, facial tissues, tissue handkerchiefs, wipes, personal care products, baby diapers, cottontissues, etc. Product series involve Face series, Lotion series, Natural Wood series, Antibacterial Paper series, JinZun series, wipes, Sun series, Dolemi series, OKBEBE series, and Cotton Tissue series. Specifics are given in thefollowing:
1. Household paper (Jie Rou brand + Sun brand)
Face Series: Face wettable facial tissue is a feature product of the Company. Through constant quality upgrading,the newly developed four-layer thick facial tissues remain pliable and thick even when they are wet. One piece ofthis facial tissue is as thick as two pieces of average tissues, which optimizes the products’ user experience andfashion sense. In 2020, in order to better reflect the brand’s image and high-end style, the Company incorporatedoil painting elements into its packaging and launched Face oil painting series products, which is called the“artwork of paper tissues”.Lotion Series: Lotion water retention facial tissues are characterized by the skin-friendly lotion and moisturizingfactor. They feel soft and smooth, thanks to the water retention factors. This product is especially suitable fordelicate skin and applicable to mothers and infants, people with nasal allergy, and people wearing makeup.Natural Wood Series: The Company launched the first noble yellow tissues (with low whiteness), “Jie RouNatural Wood Series” in 2017, based on the consumption concepts of health and safety. Its soft and pliable textureis attributable to 100% imported raw wood pulp. Quality of the whole series is superb.Antibacterial Series: With the advent of the post-pandemic era in China, the Company introduced the antibacterial
series products in early 2021 in line with changes in consumption habits of consumers. The products containantibacterial factors and have been proved with experiments to effectively reduce the growth of more than 99% ofbacteria on paper tissues. They can effectively inhibit bacteria such as E. coli and staphylococcus aureus, therebyprotecting the health of consumers.Jin Zun Series: Made from 100% imported raw wood pulp, Jin Zun products are thick, pliable, and cost-effective.Wipes: Wipe products of the Company are diversified, including mother and baby wipes, disinfection wipes,personal care wipes, kitchen wipes, and pure water wipes, which can meet the needs of consumers in differentscenarios.Sun Series: The Company launched the new brand Sun in 2019 in conjunction with the 300,000-ton bamboo-pulp-paper integration project in order to accelerate the coverage of high-, mid- and low-end household paper marketsin China and satisfy consumption needs at different levels. This initiated the Company’s “dual brand” businessstrategy. Sun is positioned to be a highly cost-effective product that has good quality yet lower prices. It is the keyto raise the market share of the Company in the future.
2. Personal care products (Dolemi brand)
Dolemi Series: In 2019, the Company launched a new personal care brand, Dolemi, to cater for upgradingconsumption. The surface of Dolemi pads is made from natural cotton. The products feature two-way aircirculation and are elastic, soft, and fit. Thanks to the good air circulation, consumers will feel at ease. Theyenable women pursuing better quality of life to experience “thin pads and get rid of side leakage”.OKBEBE Series: This care brand for newborn babies was rolled out in early 2021. Products include baby diapersand pull-up pants. With medical level high standards, the products are skin-friendly, breathable, dry and easy toabsorb. They are dedicated to providing babies with safer and more comfortable growth experience, having passedthe surveillance on six product performance indicators including allergenic microbial inspection and productionenvironment bacteria.
3. Quality health products
Cotton Tissue Series: In 2018, the Company stepped out of the household paper field and introduced the “CottonTissue“ products. The products feature 100% fresh cotton, complete physical processes, and unbleached. As beingnatural, healthy, soft, skin-friendly, and dry-wet dual use, they can be used for personal cleaning and care as cottonpads and face towels, especially by infants and women.Medical surgical masks: In response to the government’s call, the Company quickly initiated medical maskproduction and rolled out medical surgical mask products. The products are characterized by “high efficiency
filtration, low breathing resistance, and comfortable wearing”, and have passed the EU CE and US FDAcertifications. Third-party laboratory testing from US, EU and Japan proves the products to have reached thehighest quality standards of their kind.Other quality health products: In line with the Company’s strategic planning and market needs, the Companysuccessively launched personalized products that are fit with consumer needs since 2020, including makeupremoval wipes, feminine care wipes, alcohol disinfectant wipes, mouthwashes, disinfectant hand sanitizers, facewash towels, disposable sweat-absorbent wipes, insoles, etc. This enables the Company to form a diversifieddevelopment pattern on the basis of pursuing high quality and individualization.Currently, the competition in China’s household paper industry is still fierce and industry concentration isincreasing. With strengthened awareness on the concept of healthy living, consumers pay increasing attention tobrands. Product quality is still a prominent concern in the industry. Amid all these, the Company has become oneof the representative brands of high-end household paper in the market through continuous brand building andquality assurance, and robust production capacity layout and channel expansion. It is ranked among the firstechelon in the household paper industry and is well recognized by consumers and capital markets. In addition,with an adherence to the value concept of “Only Care About You”, the Company continues to tap consumer needsand constantly upgrades and optimizes products with leverage on its strong R&D and innovation capabilities. TheCompany is committed to providing consumers with products of better quality, more comfort, and more tailored totheir individual needs. The Company aims to achieve national product coverage which is underpinned bycontinuously improved product reputation among consumes and strengthened and consolidated brand awareness.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. Itsproducts are sold at home and abroad including Southeast Asia, the Middle East, Europe and United States.
2. Constantly optimized product structure
The Company boasts three major brands, namely, Jie Rou, Sun, and Dolemi. Main products include paper rolls,coreless rolls, facial tissues, tissue handkerchiefs, wipes, personal care products, baby diapers, cotton tissues, etc.The Company continuously optimizes its product structure and raises the sales proportion of high-end products,high-gross profit products and non-roll categories. In addition, it has strengthened the sales of major series likeFace, Lotion, and Natural Wood, formulated distribution standards for each major channel, raised the market share
in each channel, and continuously improved the gross profit and profitability of products.
3. Stable and effective management team
The R&D, production, procurement, sales, quality control, and operation teams have successively introducedexcellent professionals since 2014. At present, the Company boasts the most outstanding R&D, production andsales teams in the industry, and has gradually established the professional manager management system. Excellentand professional management teams have effectively reinforced and improved the Company’s new product R&D,product quality and marketing management. The management team of the Company has formulated long-term andstrategic plans in line with actual situation of the Company, industry development level, and market demands.Moreover, the management team is capable of making reasonable decisions on operation management issues withrelation to R&D, production, marketing, investment, and financing, and effectively implementing such decisions.The excellent management team fundamentally guarantees the Company’s competitiveness and sustainabledevelopment in the future.
4. Nationwide marketing network
The Company has been building and improving its marketing networks based on its keen and strategic insightsand reasonable layout. The Company has enhanced its profitability by expanding its channels from a single dealerchannel in 2015 to six channels at present, namely, GT (general trade channels), KA (key account channels), AFH(away from home channels), EC (e-commerce channels), RC (new retail channels), and SC (maternal and infantchannels). Its current marketing network covers most of the prefecture-level (and county-level) cities. Products aredirectly sold to counties and then distributed to towns. This helps achieve segmented and flat market operationand expand the dealer network.Furthermore, while ensuring the smooth operation of other channels, the Company has established a professionale-commerce operation team, devoted more resources to e-commerce platforms, built and improved thecorresponding supply chain system, and intensified its routine operation management. At present, it has reachedcooperation with renowned platforms such as Tmall, JD, and Pinduoduo. In addition, it has developed an AFHservice team for AFH channels and customer bases to match the growing AFH market. Attributable to a robustsales network plus quality and diversified products, the Company is able to constantly consolidate its market basis,improve consumer experience, and enhance brand reputation, which can help achieve sustainable and stablegrowth 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,
and Central China, through its subsidiaries including Jiangmen C&S, Yunfu C&S, Sichuan C&S, Zhejiang C&S,Hubei C&S, and Tangshan Branch. Thanks to the nationwide layout of production bases, the Company hasnarrowed the distance to customers, reduced transportation costs, and enhanced 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. Raw materials of the Company havepassed the ISO quality management system certification. Besides strict feed inspection procedures, it hasintroduced HACCP food hygiene and safety management system to control the hygiene and quality of productsfrom the source. Moreover, its products have passed ISO9001 quality management system certification which isthe strictest detecting system for product quality. The Company has observed internationally-advanced qualitymanagement system standards and utilized advanced processes, formulas, and control procedures in production toensure each technical performance indicator.
7. Good R&D capabilities
The Company is equipped with a complete product development system and the subordinate R&D departmentboasts strong independent R&D capabilities and excellent product formula technologies. In recent years, theCompany has continuously upgraded and optimized its products, in a bid to provide consumers with products ofbetter quality, more comfort, and more aligned with their individual needs. Products of the Company haveextended from household paper to cross-category household daily necessities including cotton series products,sanitary wipes, baby diapers, etc. The Company’s speed of bringing forth new products is at the forefront of theindustry.
8. First-class production equipment
The Company drives development via technology and has introduced cutting-edge papermaking and processingequipment. Advanced technology and highly automatic equipment have strengthened the Company’s efficiency,further satisfied the ever-growing market demands, and served as an unstoppable driving force to development.
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 and industry-leading.
III. Analysis of Principal BusinessesPlease 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 | 4,247,641,836.38 | 3,616,201,399.80 | 17.46% | |
| Operating cost | 2,562,244,166.21 | 1,931,406,918.16 | 32.66% | An increase of RMB630,837,248.05 or 32.66% was recorded in the reporting period over the same period of 2020, mainly owing to 1) increase in operating income; and 2) adjusting transportation expenses of the selling expenses to operating cost as per the New Revenue Standards during the reporting period. |
| Selling expenses | 915,478,651.72 | 848,071,082.60 | 7.95% | |
| Administrative expenses | 165,200,078.38 | 185,701,854.01 | -11.04% | |
| Finance expenses | -1,803,144.04 | -1,022,002.23 | -76.43% | A reduction of RMB781,141.81 or 76.43% was witnessed in the reporting period compared with the same period of 2020, mainly due to the increase in bank interest income during the reporting period.. |
| Income tax expenses | 81,099,520.72 | 85,783,253.92 | -5.46% | |
| R&D investment | 97,414,812.32 | 90,860,828.24 | 7.21% | |
| Net cash flow from operating activities | 737,865,788.19 | 504,558,588.33 | 46.24% | Net cash flow from operating activities: This item recorded an increase of RMB233,307,199.86 or 46.24% in the reporting period compared with the same period of 2020, mainly due to the increase in sales revenue during the reporting period. |
| Net cash flow from investing activities | -267,293,095.91 | -241,861,919.70 | -10.51% | |
| Net cash flow from financing activities | -815,627,674.59 | -45,815,658.83 | -1680.24% | Net cash flow from financing activities: This item recorded a decrease of RMB769,812,015.76 or 1680.24% in the reporting period compared with the same period of 2020, mainly due to the decrease in cash received from borrowings and the payment of repurchased shares during the reporting period. |
| Net increase in cash and cash equivalents | -348,809,933.39 | 220,436,993.67 | -258.24% |
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 thereporting period.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 | 4,247,641,836.38 | 100% | 3,616,201,399.80 | 100% | 17.46% |
| By industry | |||||
| Household paper | 4,082,881,792.19 | 96.12% | 3,533,490,254.91 | 97.71% | 15.55% |
| Personal care | 40,295,818.30 | 0.95% | 67,214,587.03 | 1.86% | -40.05% |
| Others | 124,464,225.89 | 2.93% | 15,496,557.86 | 0.43% | 703.17% |
| By product | |||||
| Finished products | 4,116,080,985.46 | 96.90% | 3,595,014,915.99 | 99.41% | 14.49% |
| Semi-finished products | 7,096,625.03 | 0.17% | 5,689,925.95 | 0.16% | 24.72% |
| Others | 124,464,225.89 | 2.93% | 15,496,557.86 | 0.43% | 703.17% |
| By region | |||||
| Domestic | 4,149,892,689.00 | 97.70% | 3,522,252,149.36 | 97.40% | 17.82% |
| Overseas | 97,749,147.38 | 2.30% | 93,949,250.44 | 2.60% | 4.04% |
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 profit margin | YoY changes of operating income | YoY changes of operating cost | YoY changes of operating gross profit margin | |
| By industry | ||||||
| Household paper | 4,082,881,792.19 | 2,438,970,899.44 | 40.26% | 15.55% | 28.26% | -5.93% |
| By product | ||||||
| Finished products | 4,116,080,985.46 | 2,456,914,117.77 | 40.31% | 14.49% | 28.40% | -6.46% |
| By region | ||||||
| Domestic | 4,149,892,689.00 | 2,505,260,432.09 | 39.63% | 17.82% | 33.05% | -6.91% |
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 atthe end of the reporting period
□ Applicable √ Not applicable
Reasons for YoY changes of relevant data over 30%
□ 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 | 358,473.15 | 0.07% | Returns on principal-protected wealth management products at maturity and reverse repo of treasury bonds | No |
| Asset impairment | -2,753,828.11 | -0.56% | Provision for impairment of inventories | No |
| Non-operating income | 1,708,366.54 | 0.35% | Government grants, income from fine and compensation, and others | No |
| Non-operating expense | 3,638,183.86 | 0.75% | External donations and others | 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 | Explanation of significant changes | |||
| Amount | Proportion in total assets | Amount | Proportion in total assets | |||
| Monetary funds | 788,702,136.99 | 11.05% | 1,125,196,199.56 | 15.05% | -4.00% | |
| Accounts receivable | 933,313,137.98 | 13.07% | 1,051,423,939.59 | 14.06% | -0.99% | |
| Inventory | 1,624,309,444.82 | 22.75% | 1,661,274,495.32 | 22.21% | 0.54% | |
| Investment property | 33,856,923.84 | 0.47% | 34,575,365.94 | 0.46% | 0.01% | |
| Fixed assets | 3,182,792,165.52 | 44.58% | 2,792,587,302.21 | 37.34% | 7.24% | |
| Construction work in progress | 55,534,528.69 | 0.78% | 275,904,617.95 | 3.69% | -2.91% | Construction work in progress: This item recorded a decrease of RMB220,370,089.26 or 79.87% in the reporting period compared with the end of 2020, mainly owing to the fact that certain construction work in progress reached the usable state and were thereby transferred to fixed assets during the reporting period. |
| Right-of-use assets | 11,151,372.57 | 0.16% | 0.16% | Right-of-use assets: This item recorded an increase of RMB11,151,372.57 or 100.00% in the reporting period compared with the end of 2020, mainly owing to the fact that leased assets were confirmed as right-of-use assets upon the adoption of the new lease standards during the reporting period. | ||
| Short-term borrowing | 142,942,941.34 | 1.91% | -1.91% | Short-term borrowing: This item recorded a decrease of RMB142,942,941.34 or 100.00% in the reporting period compared with the end of 2020, mainly owing to the decrease in short-term loans from banks during the reporting period. | ||
| Contract liabilities | 103,501,369.49 | 1.45% | 137,333,617.40 | 1.84% | -0.39% | |
| Lease liabilities | 5,526,106.56 | 0.08% | 0.08% | Lease liabilities: This item recorded an increase of RMB5,526,106.56 or 100.00% in the reporting period compared with the end of 2020, mainly owing to the confirmation of lease liabilities upon the adoption of the new lease standards 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 | 87,477,934.66 | Security deposits for issuing letter of credit and |
| notes | ||
| Total | 87,477,934.66 |
VI. Analysis of Investment
1. Overview
√ Applicable □ Not applicable
| Investment amount during the reporting period (RMB) | Investment amount of previous year (RMB) | Changes |
| 328,193,755.53 | 401,314,982.57 | -18.22% |
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
The Company did not invest in derivatives 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 profitby over 10%
Unit: RMB
| 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.) | RMB345,985,031 | 1,778,554,306.27 | 1,452,371,161.76 | 747,241,439.87 | 115,039,007.95 | 97,876,239.26 |
| 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 | RMB650 million | 2,126,862,446.83 | 1,244,184,883.95 | 1,460,190,589.00 | 157,532,303.17 | 133,746,121.37 |
| competent departments.) | ||||||||
| 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.) | RMB100 million | 1,138,234,120.55 | 834,215,732.60 | 964,018,416.58 | 93,193,559.94 | 78,591,624.35 |
| Hubei C&S | Subsidiary | Licensed items: production of sanitary products and disposable medical supplies; production of cosmetics (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: | RMB200 million | 1,689,435,694.57 | 444,177,395.36 | 742,844,886.22 | 91,690,308.10 | 69,303,869.68 |
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. Pulp isthe primary raw material of the Company’s production, accounting for 40%-60% of the total production costs.Therefore, substantial fluctuations in 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 boardsand coordinating 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
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 buyforeign currency and pay for the goods at a rate favorable to the Company at an appropriate time.
Furthermore, the Company hedges against and avoids exchange rate risks via centralized management of foreignexchange funds, purchase payment hedging, etc. based on changes in the foreign exchange market and actualdevelopment of the Company. With regard to exchange rate risk exposure, the Company also uses hedging andother financial tools to conduct reasonable 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, themain competition in the household paper industry lies in regional markets. High-end, mid-end, and low-endproducts compete in regional markets, with the influence of spending power and consumption habit. Judging fromthe development trend of the industry, mid- and high-end household paper of national brands has morecompetitive edge. However, at present, some regional brands have an advantage in some regional markets.Compared with overseas counterparts, China’s household paper industry requires continued integration. TheCompany embraces production bases and a sales network across the country and offers mid- and high-endproducts 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 productionbase with national presence. As a result, transportation costs can be effectively reduced and transportationefficiency effectively improved by shorting the distance with consumers. As the Company continues to deepenand expand sales channels, it will gradually cover untapped outlets. In the future, in response to marketcompetition, the Company will strengthen channel sinking, increase market penetration, further expand its scale,and further improve its 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 “Thirteenth Five-year”Development Plan of the Papermaking Industry. Particularly, a number of measures have been introduced throughenvironmental protection policies to drive the all-round, coordinated, and sustainable development of thehousehold paper industry, including 1) optimizing the industrial distribution to reasonably allocate resources and
promoting clean production to preserve the ecological environment; 2) pushing energy conservation and emissionreduction to shut down outdated production facilities, and adjusting product structure and improving productquality; 3) developing resource-saving models to advocate green consumption; and 4) optimizing enterprisestructure and driving M&A and restructuring. These policies are designated to strengthen household paperindustry concentration, close backward production facilities, and optimize resource allocation. The Company, asan enterprise in the first echelon of the domestic household paper industry, is underpinned by national policiesrelated to the sustainable development of the household paper industry. Precisely because of this, industrial policyadjustment, if any, will impact the production and 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 environmentalpollution and ensure green production. The Company will continue to optimize production efficiency in responseto requirements 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 enormouslosses to such manufacturers. In addition, a large number of production lines have been put into use, which maypose certain occupational health hazard and cause harm to the occupational health of employees. Even though theoverall safe production risk of the Company is controllable, it still faces certain safe production risks.In view of this, the Company has formulated strict fire management regulations for raw materials and semi-finished and finished products, established a full-time safety management department, equipped adequate fireprotection equipment in production areas, and bought full insurance for risky properties. As such, the Company’sfire safety risk is low.In response to possible occupational health hazards, the Company, at the equipment design and procurement
stages, 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 healthand safety risks of employees.
6. Risk of logistics transportation
The spread of the COVID-19 pandemic in 2020 has hindered domestic and foreign logistics transportation by seaand land to varying degrees, affecting both the Company’s procurement and sales and upstream suppliers anddownstream dealers. In other words, the Company has suffered from multiple dimensions. Though impacts of thepandemic are phased and temporary, risks are unavoidable for the Company as being at the mid- and downstreamof the household paper industry chain.The Company has quickly formulated response strategies during the pandemic and actively coordinated supplychain allocation. In terms of supply, the Company flexibly adjusts supply area based on the optimal principle toguarantee adequate goods supply to customers. In terms of logistics, the Company implements integratedmanagement for logistics and warehouses as well as production and sales under the premise of well taking safetyprecautions. Personnel in all positions are asked to stick to their posts and maintain close communication withsales to assure smooth logistics to the greatest extent.
Section IV Corporate Governance
I. 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 |
| 2021 First Extraordinary General Meeting | Extraordinary general meeting of shareholders | 53.68% | January 21, 2021 | January 22, 2021 | Announcement on Resolutions of 2021 First Extraordinary General Meeting of Shareholders (Announcement No.: 2021-18). See Securities Times, Securities Daily, China Securities Journal and CNINFO (www.cninfo.com.cn) for details. |
| 2021 Second Extraordinary General Meeting | Extraordinary general meeting of shareholders | 54.85% | January 29, 2021 | January 30, 2021 | Announcement on Resolutions of 2021 Second Extraordinary General Meeting of Shareholders (Announcement No.: 2021-26). See Securities Times, Securities Daily, China Securities Journal and CNINFO (www.cninfo.com.cn) for details. |
| 2021 Third Extraordinary General Meeting | Extraordinary general meeting of shareholders | 54.72% | April 07, 2021 | April 08, 2021 | Announcement on Resolutions of 2021 Third Extraordinary General Meeting of Shareholders (Announcement No.: 2021-49). See Securities Times, Securities Daily, China Securities Journal and CNINFO (www.cninfo.com.cn) for details. |
| 2020 Annual General Meeting of Shareholders | Annual general meeting | 54.78% | May 19, 2021 | May 20, 2021 | Announcement on Resolutions of 2020 Annual General Meeting of Shareholders (Announcement No.: 2021-72). See Securities Times, Securities Daily, China Securities Journal and CNINFO |
| (www.cninfo.com.cn) for details. | |||||
| 2021 Fourth Extraordinary General Meeting | Extraordinary general meeting of shareholders | 57.22% | June 07, 2021 | June 08, 2021 | Announcement on Resolutions of 2021 Fourth Extraordinary General Meeting of Shareholders (Announcement No.: 2021-89). See Securities Times, Securities Daily, China Securities Journal and CNINFO (www.cninfo.com.cn) for details. |
2. Extraordinary general meetings of shareholders proposed to be convened by preferred shareholderswhose voting 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 |
| Zeng Yi | Director | Resigned upon expiry of term of office | January 21, 2021 | Expiry of term of office |
| Huang Hongyan | Independent Director | Resigned upon expiry of term of office | January 21, 2021 | Expiry of term of office |
| Ge Guangrui | Independent Director | Resigned upon expiry of term of office | January 21, 2021 | Expiry of term of office |
| He Guoquan | Independent Director | Elected | January 21, 2021 | Elected upon the change of board of directors |
| Liu Die | Independent Director | Elected | January 21, 2021 | Elected upon the change of board of directors |
| Yue Yong | Director | Resigned | March 18, 2021 | Voluntary resign |
| Deng Guanbiao | President | Resigned | March 19, 2021 | Voluntary resign |
| Liu Peng | President | Appointed | March 22, 2021 | Appointed by the board of directors |
| Deng Yingzhong | Chairman | Resigned | April 09, 2021 | Voluntary resign |
| Liu Peng | Chairman | Elected | April 12, 2021 | Elected by the board of directors |
| Li Zhaojin | Vice President | Appointed | April 12, 2021 | Appointed by the board of directors |
| Deng Wenxi | Vice President | Appointed | April 27, 2021 | Appointed by the board of directors |
| Dai Zhenji | Director, Joint President | Resigned | April 28, 2021 | Voluntary resign |
| Li Youquan | Supervisor | Resigned | July 12, 2021 | Voluntary resign |
| Zhang Yang | Vice President | Appointed | July 12, 2021 | Appointed by the board of directors |
| Zhou Qichao | Board Secretary, | Resigned | July 29, 2021 | Voluntary resign |
| Vice President | ||||
| Zhang Haijun | Vice President, Board Secretary | Appointed | August 23,2021 | Appointed by the board of directors |
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. Implementation of the Phase II stock incentive plan
On May 22, 2021, the Company convened the 5th meeting of the fifth session of the Board of Directors and the3rd meeting of the fifth session of the Board of Supervisors, which considered and approved the Proposal onAchieving the Unlock Conditions of the Second Unlock Period for Restricted Stocks Awarded in the First Grantunder the Company’s 2018 Stock Option and Restricted Stock Incentive Plan. There were 499 holders of restrictedstocks meeting the unlock conditions, and the number of stocks that could be unlocked was 4,809,045. The unlockdate of these restricted stocks was June 30, 2021. The above meetings also reviewed and approved the Proposalon the Repurchase and Deregistration of Partial Restricted Stocks Awarded in the First Grant under theCompany’s 2018 Stock Option and Restricted Stock Incentive Plan. The Board of Directors of the Companyapproved to repurchase and deregister a total of 2,021,305 restricted shares that had been granted but not unlocked.In addition, the aforesaid meetings also deliberated and approved the Proposal on Achieving the ExerciseConditions of the Second Exercise Period for Stock Options Awarded in the First Grant under the Company’s2018 Stock Option and Restricted Stock Incentive Plan. There were 2,274 holders of stock options meeting theexercise conditions, and the number of options that could be exercised was 2,948,559. The Proposal on theRepurchase and Deregistration of Partial Stock Options Awarded in the First Grant under the Company’s 2018Stock Option and Restricted Stock Incentive Plan was also considered and approved. The Board agreed toderegister 1,294,091 options that had been granted but not exercised.On May 28, 2021, the Company held the 6th meeting of the fifth session of the Board of Directors and the 4th
meeting of the fifth session of the Board of Supervisors, which reviewed and approved the Proposal on Adjustingthe Exercise Price of Stock Options under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan.Pursuant to the Company’s profit distribution plan in 2020 and relevant provisions of the 2018 Stock Option andRestricted Stock Incentive Plan (Draft), the Company adjusted the exercise price of first-granted stock optionsfrom RMB8.572/share to RMB8.472/share, and adjusted the exercise price of reserved stock options fromRMB13.965/share to RMB13.865/share.On July 6, 2021, the cancellation procedures for 1,294,091 first-granted stock options that had been granted butnot exercised were completed at the Shenzhen Branch of China Securities Depository and Clearing CorporationLimited.Please continue to pay attention to the Company’s information disclosure for subsequent implementation progressor changes.
2. Implementation of the Phase II employee stock ownership plan
As of January 5, 2021, all stocks held under the Company’s Phase II Employee Stock Ownership Plan, i.e.11,709,583 shares, had been sold out. As per relevant provisions of the Phase II Employee Stock Ownership Plan,the implementation of the Plan is completed and thus the Plan is terminated.
3. Implementation of the Phase III employee stock ownership plan
On May 22, 2021, the Company held the 5th meeting of the fifth session of the Board of Directors and the 3rdmeeting of the fifth session of the Board of Supervisors, which considered and approved the Proposal on PhaseIII Employee Stock Ownership Plan (Draft) and Its Summary. In order to improve employee cohesion andcorporate competitiveness and ensure the attainment of the Company’s future development strategies and businessgoals, the Company plans to roll out Phase III Employee Stock Ownership Plan; preferred shares and deferredshares are set at a leverage ratio of 1:1, with a cap of 400 million shares and 200 participants.On June 7, 2021, the Company convened the 2021 Fourth Extraordinary General Meeting, which considered andapproved proposals relevant to Phase III Employee Stock Ownership Plan. In order to ensure the Plan’s smoothimplementation, the shareholders’ meeting authorized the Board of Directors to fully handle matters relevant tothe Plan.Please continue to pay attention to the Company’s information disclosure for subsequent implementation progressor changes.
Section V Environmental and Social Responsibilities
I. Main Environmental Protection IssuesWhether the listed company and its subsidiaries are the key pollution discharge units published by theenvironmental protection department
√ Yes □ No
| Name of company or subsidiary | 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 Zhongshun Paper Co., Ltd. | Waste water - COD | After treatment, it is discharged to the sewage treatment plant | 1 | Centralized processing facilities in the factory | 80mg/L | 200mg/L | 158.95t | 335.6 t/a | None |
| Jiangmen Zhongshun Paper Co., Ltd. | Waste water - Ammonia nitrogen | After treatment, it is discharged to the sewage treatment plant | 1 | Centralized processing facilities in the factory | 1.76mg/L | 8mg/L | 3.497t | 13.4 t/a | None |
| C&S (Sichuan) Paper Co., Ltd. | Waste water - COD | After treatment, it enters the water purification station through urban sewage pipeline | 1 | Production waste water discharge (DW001) flows through the channel into the main outlet DW002 (confluent with domestic waste water) | 48mg/L | 80mg/L | 19.6168t | 96 t/a | None |
| C&S (Sichuan) Paper Co., Ltd. | Waste water - Ammonia nitrogen | After treatment, it enters the water purification station through urban sewage pipeline | 1 | Production waste water discharge (DW001) flows through the channel into the main outlet DW002 (confluent with | 0.203mg/L | 8mg/L | 0.083t | 9.6 t/a | None |
| domestic waste water) | |||||||||
| C&S (Sichuan) Paper Co., Ltd. | 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 2.5 mg/m? 2# boiler 0 mg/m? 3# boiler 2.7 mg/m? | 20 mg/Nm3 | 0.156t | / | None |
| C&S (Sichuan) Paper Co., Ltd. | Waste gas - Nitrogen oxide | Discharge directly through the flue | 3 | Three chimneys (2# boiler is the standby boiler, monitoring when being used) | 1# boiler 27 mg/m? 2# boiler 0 mg/m? 3# boiler 29 mg/m? | 150 mg/Nm3 | 1.8886t | 31.35 t/a | None |
| C&S (Sichuan) Paper Co., Ltd. | Waste gas - Sulfur dioxide | Discharge directly through the flue | 3 | Three chimneys (2# boiler is the standby boiler, monitoring when being used) | 0 | 50 mg/Nm3 | 0 | / | None |
| Zhejiang Zhongshun Paper Co., Ltd. | Waste water - COD | After treatment, it is discharged to Jiaxing Industrial Sewage Treatment Plant through municipal pipe | 1 | Centralized processing facilities in the factory | 37.2mg/L | 500mg/L | 7.7875t | 139.7 t/a | None |
| Zhejiang Zhongshun Paper Co., Ltd. | Waste water - Ammonia nitrogen | After treatment, it is discharged to Jiaxing Industrial Sewage Treatment Plant through municipal pipe | 1 | Centralized processing facilities in the factory | 0.4529mg/L | 35mg/L | 0.1t | 9.78 t/a | None |
| C&S (Hubei) Paper Co., Ltd. | Waste water - COD | After treatment, it is discharged to Biquan Sewage Treatment Plant through municipal pipe | 1 | After centralized processing facilities in the factory, it is discharged to Biquan Sewage Treatment Plant | 109mg/L | 400mg/L | 45.25t | 152.25 t/a | None |
| C&S (Hubei) | Waste water - Ammonia | After treatment, it | 1 | After centralized | 6.913mg/L | 30mg/L | 4.52t | 15.25 t/a | None |
| Paper Co., Ltd. | nitrogen | is discharged to Biquan Sewage Treatment Plant through municipal pipe | processing facilities in the factory, it is discharged to Biquan Sewage Treatment Plant | ||||||
| C&S (Hubei) Paper Co., Ltd. | Waste gas - PM (particulate matter) | Dedusting by bag filter, desulfurization by limestone-gypsum and denitration by SNCR | 1 | One chimney | 13.1 mg/Nm3 | 30 mg/Nm3 | 6.95t | 28.63 t/a | None |
| C&S (Hubei) Paper Co., Ltd. | Waste gas - Sulfur dioxide | Dedusting by bag filter, desulfurization by limestone-gypsum and denitration by SNCR | 1 | One chimney | 58 mg/Nm3 | 200 mg/Nm3 | 33.79t | 203.87 t/a | None |
| C&S (Hubei) Paper Co., Ltd. | Waste gas - Nitrogen oxide | Dedusting by bag filter, desulfurization by limestone-gypsum and denitration by SNCR | 1 | One chimney | 109 mg/Nm3 | 200 mg/Nm3 | 52.26t | 239.85 t/a | None |
| C&S (Yunfu) Paper Co., Ltd. | Waste water - COD | Continuous discharge | 1 | Sewage treatment station in the factory | 32.16mg/L | 80mg/L | 35.605t | 197.1 t/a | None |
| C&S (Yunfu) Paper Co., Ltd. | Waste water - Ammonia nitrogen | Continuous discharge | 1 | Sewage treatment station in the factory | 1.98mg/L | 8mg/L | 2.185t | 19.76 t/a | None |
| C&S Paper Co., Ltd. Tangshan Branch | Waste water - COD | After being treated by the plant sewage treatment station, it is discharged to the Lvyuan Sewage Treatment Plant in the zone | 1 | The main outlet of the zone (Lvyuan Sewage Treatment Plant) | 29.19mg/L | 50mg/L | 3.76t | 16.5 t/a | None |
| C&S Paper Co., Ltd. Tangshan Branch | Waste water - Ammonia nitrogen | After being treated by the plant sewage treatment station, it is discharged | 1 | The main outlet of the zone (Lvyuan Sewage Treatment Plant) | 0.576mg/L | 5mg/L | 0.078t | 1.65 t/a | None |
| to the Lvyuan Sewage Treatment Plant in the zone | |||||||||
| C&S Paper Co., Ltd. Tangshan Branch | Waste gas - PM (particulate matter) | Discharge directly through the flue | 1 | One chimney | 2.75 mg/Nm3 | 5 mg/Nm3 | 0.22t | 2.46 t/a | None |
| C&S Paper Co., Ltd. Tangshan Branch | Waste gas - Nitrogen oxide | Discharge directly through the flue | 1 | One chimney | 19.22 mg/Nm3 | 30 mg/Nm3 | 0.705t | 18.46 t/a | None |
| C&S Paper Co., Ltd. Tangshan Branch | Waste gas - Sulfur dioxide | Discharge directly through the flue | 1 | One chimney | ND (not detected) | 10 mg/Nm3 | 0 | 6.15 t/a | None |
Construction and operation of pollution prevention and control facilities
(1) Compliance obligation fulfillment: The Company and its subsidiaries 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 EnvironmentalProtection Law of the People’s Republic of China, the Law of the People’s Republic of China on the Preventionand Control of Water Pollution, the Law of the People’s Republic of China on the Prevention and Control ofAtmospheric Pollution, the Law of the People’s Republic of China on the Prevention and Control ofEnvironmental Pollution by Solid Waste and the Action Plan for Prevention and Control of Water Pollution, andensure that all pollutant treatment and discharge are in line with the requirements of laws and regulations.
(2) Configuration and operation of water treatment equipment and facilities: Each subsidiary has a complete set ofenvironmental protection treatment equipment and facilities. The main sewage treatment processes are anaerobic,aerobic and subsequent deep treatment processes, which can achieve the discharge standards of various sewageindicators. In addition, each subsidiary is equipped with a recycling water system, in which the reclaimed waterthat meets the usage standard is used for re-production to reduce the discharge of sewage as far as possible. Thesewage of Jiangmen, Zhejiang, Hubei and Tangshan companies is discharged after centralized treatment in thecompany and treated by the local sewage treatment plants. After centralized treatment in the company, the sewageof Sichuan Company enters water purification station through urban sewage pipeline; the sewage of YunfuCompany, after treated by the company’s sewage treatment station and reaching the standard, is discharged in anorganized manner.
(3) Online monitoring and operation of water treatment facilities: Five subsidiaries in Yunfu, Sichuan, Zhejiang,Hubei and Tangshan have all installed online sewage monitoring facilities, which are directly supervised by localenvironmental protection bureau. For Jiangmen Company, after the centralized treatment within the company, thesewage is discharged to the sewage plant of the local paper industry base; there is no other sewage outlet and noonline monitoring facilities; third-party agencies have been invited to conduct monitoring each quarter, and thetest data meet all requirements.
(4) Boiler waste gas emission: Sichuan Branch and Tangshan Branch are equipped with natural gas boilers. HubeiBranch is equipped with a coal-fired boiler, and waste gas is emitted uniformly after desulfurization anddenitrification. Boiler waste gas emission conforms to GB13271-2014 Emission Standard of Air Pollutants forBoiler.Environmental impact assessment of construction projects and other administrative permits for environmentalprotection
(1) Administrative permits: According to the Measures for the Administration of Pollutant Discharge Permit of theMinistry of Environmental Protection of the People’s Republic of China, the applications were submitted to theEnvironmental Protection Bureau. All the subsidiaries attained the new pollutant discharge permit in 2017, andcompleted its renewal and change in May 2020.
(2) 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 outfor all construction projects and environmental protection project construction was arranged according toconstruction plan, to ensure that the environmental protection facilities and the main project are designed,constructed and put into use at the same time. At present, all construction projects put into production havecompleted environmental impact assessment and acceptance and approval.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 forSudden Environmental 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 emergency
response 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.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 anddata, 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 projects:
main discharge outlet of waste water (COD, ammonia nitrogen, flow rate, PH, total nitrogen); Manual monitoringprojects: COD, BOD, ammonia nitrogen, SS, chroma, PH, total phosphorus and total nitrogen indicators aremonitored daily; for other sewage monitoring items, uncontrolled emissions, solid waste and factory boundarynoise, each subsidiary entrusts qualified units to carry out monitoring work monthly or quarterly according to thelocal environmental protection requirements.
(3) Waste gas monitoring: The main testing items are nitrogen oxide, ringelman emittance, sulfur dioxide and soot.The testing frequency is in compliance with the requirements of regulations.
(4) The self-monitoring data of pollutant discharge and environmental monitoring plans of each subsidiary aredisclosed on the national key pollution source information disclosure website and the provincial key pollutionsource information disclosure website.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 |
| None | None | None | None | None | None |
Other environmental information that should be disclosedNoneOther relevant information on environmental protection
(1) Energy saving and emission reduction
The Company has always adhered to the concept of green and low-carbon development and integratesenvironmental protection into corporate development. In the process of production, the Company continuouslymodifies equipment and innovates in technologies, with power and steam consumption per ton of paperdecreasing year by year. This could maximize energy saving and emission reduction on the basis of reducing costs,thereby realizing the win-win of economic and social benefits.
| YoY reductions in standard coal conversed from power/steam consumption per ton of paper 2017 - 2021 H1 | |||||
| Item | January-June 2021 | 2020 | 2019 | 2018 | 2017 |
| Standard coal reduction conversed from power consumption per ton of paper | 4 | 9 | 7 | 4 | 6 |
| Standard coal reduction conversed from steam consumption per ton of paper | 7 | 16 | 20 | 11 | 20 |
(2) Carbon emission right trading
China’s first emissions trading scheme (ETS) was launched in Shenzhen on June 18, 2013. Since then, Beijing,Tianjin, Shanghai, Guangdong, Hubei, Chongqing and other provinces and cities have rolled out pilot projects forcarbon emission trading. Among the seven pilot regions, most of the provinces and cities issue quota to emissioncontrol enterprises free of charge. As a result, the primary market for quota trading adopts the method ofadministrative allocation. Wherein, Guangdong, Shenzhen and Hubei issue certain quotas to emission controlenterprises through bidding.As of December 31, 2020, Jiangmen production base and Yunfu production base have carbon emission quota.Hubei production base conducted budgeting and opened an account in 2020 and is expected to initiate quota andaccounting in 2021. The provinces where other subsidiaries are located have not yet started to issue carbonemission quota and accounting.
| Carbon trading status of Jiangmen and Yunfu production bases (Unit: 10,000 tons) | ||||
| Item | 2019 | 2018 | 2017 | 2016 |
| Actual emission of Jiangmen base | 13.60 | 15.30 | 16.28 | 15.10 |
| Emission quota of Jiangmen base | 16.46 | 16.24 | 16.69 | 13.81 |
| Actual emission of Yunfu base | 20.43 | 14.86 | 12.13 | / |
| Emission quota of Yunfu base | 23.11 | 14.68 | 12.02 | / |
| Note: The actual carbon emissions in 2020 will be announced after the audit agency completes calculation; according to actual energy control in production, it is expected that the actual emissions of Jiangmen and Yunfu production bases will be below the quota in 2020. | ||||
The actual emission of Jiangmen production base in 2016 was higher than the emission quota. Through
continuous energy saving and emission reduction measures, the base has continuously reduced power, steam andpulp consumption in production. As a result, the actual emissions in 2017, 2018 and 2019 were all below the quota.The actual emission of Yunfu production base in 2017 and 2018 was higher than the emission quota. Throughcontinuous energy saving and emission reduction measures, the base has continuously reduced power, steam andpulp consumption in production. As a result, the actual emission in 2019 was below the quota.The Company will continue to devote itself to energy-saving, emission-reduction and consumption-reductionactions and implement them simultaneously across the entire group, to fulfill its corporate social responsibilitiesfor environmental protection.II. Corporate Social ResponsibilitiesAs a nation enterprise with important social influence and a leading enterprise in the household paper industry, theCompany has actively fulfilled its corporate social responsibilities. Specifics are as follows:
1. In January 2021, Jiangmen C&S organized party members to visit local elderly in need and donated suppliesworth RMB3,200.
2. In February 2021, the Company contributed materials worth more than RMB1 million to front-line pandemiccontrol personnel in Shijiazhuang, Hebei Province. Hubei C&S donated C&S paper products equivalent to a valueof RMB10,440 to Xiaonan District Fire Rescue Brigade as a way of respect to fire officers.
3. In March 2021, the Company helped international fight against the pandemic by giving 4 million pieces ofmedical masks to Russia, Pakistan, Myanmar and other “Belt and Road” countries. Party members of JiangmenC&S volunteered in the afforestation activities of Yuqian Village and donated 3,000 saplings and supplies worthRMB8,200.
4. In April 2021, in joint efforts with Guangzhou Yuexiu District Center for Disease Control and Prevention,Guangzhou Emergency Broadcast of Guangzhou Traffic Radio FM106.1, and Guangzhou Charity Association, theCompany donated 120,000 anti-pandemic kits (medical surgical masks + sterilization sanitary wipes) toGuangzhou.
5. In June 2021, Jiangmen C&S organized party members and visited local widows and lonely elderlies before theDragon Boat Festival and donated a total of RMB4,182 in supplies. In addition, in order to support the educationdevelopment of Shuangshui Town, Jiangmen C&S contributed RMB50,000 to Shuangshui Dr. Huang KejingSchool for the purchase of smart blackboards.
6. During the period from January to June 2021, charitable funds of the Company provided assistance up toRMB250,000 to employees and people from the society, which helped 21 needy families and individuals.
7. In July 2021, the Company teamed up with several charitable organizations and contributed more than RMB1.6
million to disaster-stricken areas in Henan.
Section VI Significant EventsI. Commitments Completed by Actual Controllers, Shareholders, Related parties, Purchasers,or the Company within the Reporting Period and Commitments Not Fulfilled by the End ofthe Reporting Period
√ Applicable □ Not applicable
| Cause of Commitment | Undertaking Party | Type of commitment | Content of commitment | Time of commitment | Term of commitment | Fulfillment of commitment |
| Share reform commitment | ||||||
| Commitments in the acquisition report or the equity change report | ||||||
| Commitments made during asset restructuring | ||||||
| Commitments made during the initial public offering or refinancing | Directors, supervisors, and senior management | Directors, supervisors, and senior management promise that they will not transfer more than 25% of the total shares of the Company they hold each year during the term of office. If they leave office before the expiry of the term of office, they promise not to transfer more than 25% of the total shares of the Company they hold each year within the term of office and within six months after the term of office expires (which is agreed when they took office). Moreover, they will not transfer their shares of the Company within half a year after they leave office. | November 25, 2010 | Long-term | Strictly observed | |
| Equity incentive commitments | Liu Jinfeng | They promise not to sell all their shares (including shares obtained from exercise and other shares) within six months after the end of the exercise of the last stock options. Besides, they promise to strictly conform to stock trading-related laws and regulations. | November 12, 2020 | During the implementation of the equity incentive plan | Strictly observed | |
| Dong Ye, Ye Longfang | They promise not to sell all their shares (including shares obtained from exercise and other shares) | June 25, 2021 | During the implementation of the | Strictly observed |
| within six months after the end of the exercise of the last stock options. Besides, they promise to strictly conform to stock trading-related laws and regulations. | equity incentive plan | |||||
| Other commitments to minority shareholders | Deng Yingzhong, Deng Guanbiao, Deng Guanjie, and Guangdong Zhongshun Paper Group Co., Ltd. | They promise not to compete with the Company in the same business. | January 1, 2009 | Long-term | Strictly observed | |
| C&S Paper Co., Ltd. | Cash dividends shall be distributed when dividend conditions are met. The Board of Directors of the Company shall comprehensively consider industry characteristics, development stage, business model, profitability, and major capital spending (if any), distinguish the following circumstances, and propose differentiated cash dividend policies in compliance with the procedures stipulated in the Articles of Association. | August 28, 2014 | Long-term | Strictly observed | ||
| C&S Paper Co., Ltd. | The 2019 repurchase plan was terminated due to objective reasons. The Company will perform the necessary procedures and immediately restart the repurchase work upon the end of the exercise period. | May 21, 2020 | Between the end of the repurchase plan and the start of the next repurchase plan (the Company reviewed and passed the share repurchase plan on January 5, 2021, and will continue the share repurchase plan) | Strictly observed | ||
| Deng Yingzhong | He promises not to reduce any shares of the Company he holds within six months upon the completion of the share increase plan, not to engage in insider trading and short-term trading, and not to trade shares of the Company during sensitive | November 04, 2020 | Within six months from the completion of the share increase plan | Strictly observed |
| periods. | |||||
| Deng Yingzhong | For all employees who purchase C&S Paper stocks (no less than 1,000 shares) between May 10 and May 31, 2021 and hold them continuously until May 30, 2022 while still serving in the Company by then, any losses incurred from the aforesaid stocks will be fully compensated by Mr. Deng Yingzhong while any profits generated will entirely belong to the employee. | May 07, 2021 | May 10, 2021 - June 30, 2022 | Strictly observed | |
| Deng Yingzhong, Deng Guanbiao, Deng Guanjie | They promise not to reduce or pledge any shares they hold directly or indirectly in the Company in any way from May 9, 2021 to May 30, 2022, including new shares added due to the transfer of capital reserve into share capital or distribution of stock dividends for the aforementioned shares during the commitment period. For any violation of the above commitment, all the incurred earnings will belong to the Company. | May 09, 2021 | May 09, 2021 - May 30, 2022 | Strictly observed | |
| Liu Peng, Chen Haiyuan, Liang Yongliang, Li Youquan, Yue Yong, Zhou Qichao, Ye Longfang, Dong Ye, Li Zhaojin, and Deng Wenxi | They promise not to reduce or pledge any shares they hold directly or indirectly in the Company from the date when the Letter of Commitment is signed (i.e. May 14, 2021) to December 31, 2021, including new shares added due to the transfer of capital reserve into share capital or distribution of stock dividends for the aforementioned shares during the commitment period. For any violation of the above commitment, all the incurred earnings will belong to the Company. | May 14, 2021 | May 14, 2021 - December 31, 2021 | Strictly observed | |
| Zhou Qichao | He promises not to reduce any shares he or his parents, spouse or children hold in the Company directly or indirectly in the Company in any way within 12 months from the last reduction of the Company’s shares in 2021 (i.e. February 5, 2021), including new shares added due to the transfer of capital reserve into share capital or distribution of stock dividends for the aforementioned shares during the commitment period. | July 10, 2021 | February 05, 2021 - February 4, 2022 | Strictly observed |
| For any violation of the above commitment, all the incurred earnings will belong to the Company. | |||
| Whether commitments are fulfilled on time | Yes | ||
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 and the Board of Supervisors of the “Non-standardAudit Report” for the Reporting Period Issued by the Accounting Firm
□ Applicable √ Not applicable
VI. Explanation by the Board of Directors of the “Non-standard Audit Report” of thePrevious Year
□ 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 |
| Zhongshan Trading sued Shenzhen Yongxinghua Trading Co., Ltd., Feng, & Liang for a sales contract dispute | 660.37 | No | Both the first instance and the second instance ruled that Zhongshan Trading won the case. | The verdict of second instance came into force. Zhongshan Trading has applied for execution. | Ongoing | ||
| Zhongshan Trading sued Guangzhou Yingjing Trade Co., Ltd. for a sales contract dispute | 31.36 | No | The first instance supported all the claims by Zhongshan Trading. | The verdict of first instance came into force. Zhongshan Trading has applied for execution. | The first round of execution ended. No properties have been recovered. | ||
| Zhongshan Trading sued Shaoyang Jiahe Trading Co., Ltd. for a sales contract dispute | 33.64 | No | The first instance supported all the claims by Zhongshan Trading. | The verdict of first instance came into force. Zhongshan Trading has applied for execution. | The execution has been completed. All the payment has been recovered. | ||
| Zhongshan Trading sued Shanghai Tongli Trading Co., Ltd. and eight natural person defendants including Liu for a sales contract dispute | 2,932.01 | No | Both the first instance and the second instance ruled that Zhongshan Trading won the case. | The verdict of second instance came into force. Zhongshan Trading has applied for execution. | The execution is in progress. RMB71,500 was recovered in June. | ||
| Yin sued C&S Paper for a dispute over the right to health | 30.25 | No (Note: Whether projected liabilities will be incurred | The first instance ruled that C&S won the case. | Wait for the verdict of the first instance. | Not applicable |
| cannot be determined prior to the verdict.) | The second instance sent the case back to the first instance court for a retrial. The first instance retrial has been opened. C&S is waiting for the verdict. | ||||||
| Sichuan C&S sued Xi’an Minsheng Department Store Management Co., Ltd. for a contract dispute | 5.65 | No | The case was mediated and closed in the first instance. | Xi’an Minsheng has not fulfilled the repayment obligation in line with the paper of civil mediation. Sichuan C&S has applied for legal enforcement. | The first round of enforcement ended; RMB5,000 were recovered. | ||
| Zhongshan Trading sued Guangzhou Jv Se Mai Ke Internet Service Co., Ltd. for a sales contract dispute | 28.55 | No | The verdict of first instance came into force. | The verdict of first instance came into force. Zhongshan Trading has applied for execution.. | First round of execution ended. No fund was recovered. | ||
| Xiaogan C&S sued Wuhan Xincheng Tongda Trading Co., Ltd. for a sales contract dispute | 525.16 | No | The case was mediated and closed in the first instance (with a mediation amount of RMB4,496,05235). | Xincheng Tongda has not fulfilled obligation in line with the paper of civil mediation. Xiaogan C&S has applied for legal enforcement.. | Ongoing | ||
| Sales contract dispute with Yu | 31.08 | No | The first instance has ruled in favor of the company. | Wait for the verdict to be served to the defendant. After the verdict comes into force, the company will apply for legal enforcement. | Not applicable |
IX. Penalty and Rectification
□ Applicable √ Not applicable
No penalties and rectifications of the Company occurred during the reporting period.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 | 147.4 | 25.49% | 294.81 | No | Transfer settlement | Market fair price | December 06, 2019 | 2019-93 |
| Deng Yingzhong, Deng Guanbiao, Deng Guanjie | Actual controller of the Company | Lease | Rental | Market fair price | Market fair price | 16.68 | 2.88% | 33.36 | No | Transfer settlement | Market fair price | October 30, 2020 | 2020-82 |
| Deng Yingzhong, Deng Guanbiao, Deng Guanjie | Actual controller of the Company | Lease | Rental | Market fair price | Market fair price | 0.65 | 0.11% | Yes | Transfer settlement | Market fair price | |||
| Pengzhou Lexiangshenghuo Trading Co., Ltd. | A company where the senior manager Yue Yong’s son | Daily operation transaction | Sale of goods | Market fair price | Market fair price | 79.64 | 0.02% | 150 | No | Transfer settlement | Market fair price | December 16, 2020 | 2020-99 |
| holds shares and serves as a supervisor | |||||||||||||
| Sichuan West Lexiangshenghuo Trading Co., Ltd. | A company where the senior manager Yue Yong’s son holds shares and serves as a supervisor | Daily operation transaction | Sale of goods | Market fair price | Market fair price | 28.91 | 0.01% | 50 | No | Transfer settlement | Market fair price | December 16, 2020 | 2020-99 |
| Chongqing Qinyue Trading Co., Ltd. | A company where the senior manager Yue Yong’s brother holds shares and serves as a supervisor | Daily operation transaction | Sale of goods | Market fair price | Market fair price | 0.00% | 100 | No | Transfer settlement | Market fair price | December 16, 2020 | 2020-99 | |
| Total | -- | -- | 273.28 | -- | 628.17 | -- | -- | -- | -- | -- | |||
| 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) | The excessive amounts of related party transaction of RMB6,500 in the reporting period is renting properties from related parties. It falls 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 orequity.
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
Whether there was non-operating related party transaction relating to creditor’s rights and debts
□ Yes √ No
During the reporting period, there was no non-operating related party transaction relating to creditor’s rights anddebts.
5. Transactions with related party financial companies or financial companies controlled by the Company
□ Applicable √ Not applicable
The Company did not have deposit, loan, credit or other financial business transactions with financial companiesthat have related relationship, financial companies controlled by the Company and related parties.
6. 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 December 5, 2019, the Company convened the 19th meeting of the fourth session of the Board of Directorsand the 16th meeting of the fourth session of the Board of Supervisors, on which the Proposal on Daily RelatedParty Transactions in 2021 was reviewed and approved. Due to the needs of operation and business, the Board ofDirectors of the Company agreed that the Company and its wholly-owned subsidiary, Zhongshan ZhongshunTrading Co., Ltd., leased the real estate jointly owned by Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. DengGuanjie, the actual controllers of the Company. The lease term is from January 1, 2020 to December 31, 2021, andthe total rent involved is RMB5,896,200. During the deliberation of this proposal, the Company’s three relateddirectors, Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie, withdrew from voting, while theremaining six attending directors unanimously approved this related party transaction. The three independentdirectors of the Company respectively issued Prior Approval Opinions and Opinions of Independent Directors onthe proposal, agreeing to submit the proposal to the Board of Directors for deliberation and agreeing to the relatedparty transaction.On October 29, 2020, the Company convened the 28th meeting of the fourth session of the Board of Directors andthe 22nd meeting of the fourth session of the Board of Supervisors, on which the Proposal on Adding to Related-Party Leasing Transactions was reviewed and approved. The Board of Directors of the Company agreed that theCompany’s wholly-owned subsidiary, C&S (Yunfu) Paper Co., Ltd., leased the real estate jointly owned by theactual controllers of the Company Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie to be used asits R&D center. The lease term is from November 1, 2020 to December 31, 2021, and the total rent involved isRMB389,300. During the deliberation of this proposal, the Company’s three related directors, Mr. DengYingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie, withdrew from voting, while the remaining six attendingdirectors unanimously approved this related party transaction. The three independent directors of the Companyrespectively issued Prior Approval Opinions and Opinions of Independent Directors on the proposal, agreeing tosubmit the proposal to the Board of Directors for deliberation and agreeing to the related party transaction.The Company’s holding subsidiary, Dolemi Sanitary Products Co., Ltd., leased the real estate jointly owned by
actual controllers of the Company Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie to be used asresidence. The lease term is from December 1, 2020 to December 31, 2021, and the total rent involved isRMB14,100. The amount of this related party transaction falls within the approval authority of the Company’sChairman and has been approved by the Chairman.Projects whose profits or losses brought to the Company reached more than 10% of the total profits of theCompany during the reporting period
□ Applicable √ Not applicable
During the reporting period, there were no leasing projects whose profits or losses brought to the Companyreached more 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. | December 06, 2019 | 8,000 | September 23, 2020 | 4,610 | Joint and several liability guarantee | None | Joint and several liability guarantee | 2020.9.23-2021.9.4 | No | No |
| Shanghai Junmeng E-commerce Co., Ltd. | December 06, 2019 | 13,000 | October 16, 2020 | 4,480 | Joint and several liability guarantee | None | Joint and several liability guarantee | 2020.10.16-2021.9.4 | 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) | 0 | |||||||
| Total approved amount of external guarantee at the end of the reporting period (A3) | 21,000 | Total actual guarantee balance at the end of the reporting period (A4) | 9,090 | |||||||
| Guarantee of the Company for subsidiaries | ||||||||||
| Name of | Disclosure | Guarantee | Actual date | Actual | Guarantee | Collateral | Counter | Guarantee | Whether | Whether |
| guarantee object | date of relevant announcement on guarantee limit | limit | of occurrence | guarantee amount | type | (if any) | guarantee (if any) | period | it has been completed | it is related party guarantee |
| Zhongshan Trading | December 05, 2019 | 15,000 | September 15, 2020 | 12,385.56 | Joint and several liability guarantee | None | None | 2020.9.15-2023.8.31 | No | No |
| Zhongshan Trading | December 15, 2020 | 13,600 | March 02, 2021 | 0 | Joint and several liability guarantee | None | None | 2021.3.2-2026.3.1 | No | No |
| Zhongshan Trading | December 05, 2019 | 3,000 | December 30, 2020 | 0 | Joint and several liability guarantee | None | None | 2020.12.30-2024.12.31 | No | No |
| Zhongshan Trading | December 05, 2019 | 25,000 | December 15, 2020 | 0 | Joint and several liability guarantee | None | None | 2020.12.15-2024.12.9 | No | No |
| Zhongshan Trading | December 19, 2018 | 9,000 | July 12, 2019 | 4,610 | Joint and several liability guarantee | None | None | 2019.7.12-2024.12.31 | No | No |
| Jiangmen C&S | December 05, 2019 | 12,000 | October 15, 2020 | 1,943.18 | Joint and several liability guarantee | None | None | 2020.10.15-2023.8.31 | No | No |
| Jiangmen C&S | December 15, 2017 | 10,000 | March 27, 2018 | 0 | Joint and several liability guarantee | None | None | 2018.3.27-2023.12.31 | No | No |
| Jiangmen C&S | December 15, 2020 | 12,000 | January 04, 2021 | 4,648.97 | Joint and several liability guarantee | None | None | 2021.1.4-2023.11.01 | No | No |
| Jiangmen C&S | December 05, 2019 | 10,000 | November 16, 2020 | 1,382.68 | Joint and several liability guarantee | None | None | 2020.11.26-2023.11.25 | No | No |
| Jiangmen C&S | December 15, 2020 | 15,000 | May 13, 2021 | 0 | Joint and several liability guarantee | None | None | 2021.5.13-2024.3.30 | No | No |
| Jiangmen C&S | December 05, 2019 | 5,000 | December 23, 2020 | 0 | Joint and several liability guarantee | None | None | 2020.12.23-2025.12.23 | No | No |
| Jiangmen C&S | December 15, 2017 | 16,000 | May 30, 2018 | 0 | Joint and several liability | None | None | 2018.5.30-2023.5.30 | No | No |
| guarantee | ||||||||||
| 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 | December 05, 2019 | 5,000 | November 20, 2020 | 800 | Joint and several liability guarantee | None | None | 2020.11.20-2023.12.31 | No | No |
| Yunfu C&S | December 05, 2019 | 10,000 | October 15, 2020 | 4,076.71 | Joint and several liability guarantee | None | None | 2020.10.15-2023.8.31 | No | No |
| Yunfu C&S | December 05, 2019 | 10,000 | October 15, 2020 | 1,160.02 | Joint and several liability guarantee | None | None | 2020.11.16-2023.11.15 | No | No |
| Yunfu C&S | December 15, 2020 | 15,000 | May 13, 2021 | 0 | Joint and several liability guarantee | None | None | 2021.5.13-2024.3.30 | No | No |
| Yunfu C&S | December 15, 2020 | 7,000 | January 04, 2021 | 1,722.39 | Joint and several liability guarantee | None | None | 2021.1.4-2023.11.01 | No | No |
| Hubei C&S | December 05, 2019 | 10,000 | February 25, 2020 | 0 | Joint and several liability guarantee | None | None | 2020.2.25-2025.12.4 | No | No |
| Zhongshan Trading, Hubei C&S, and Macao C&S | December 15, 2020 | 9,705.6 | June 01, 2021 | 4,906.41 | Joint and several liability guarantee | None | None | 2021.6.1-2023.4.22 | No | No |
| Jiangmen C&S, Yunfu C&S, Hubei C&S | December 19, 2018 | 25,000 | January 08, 2019 | 19.18 | Joint and several liability guarantee | None | None | 2019.1.8-2022.1.8 | No | No |
| C&S Hong Kong, Zhong Shun International, Macao C&S | December 05, 2019 | 32,352 | July 08, 2020 | 482.57 | Joint and several liability guarantee | None | None | 2020.7.8-2024.7.31 | No | No |
| C&S Hong Kong, Zhong Shun International | December 05, 2019 | 16,913.96 | March 20, 2020 | 1,341.23 | Joint and several liability guarantee | None | None | 2020.3.20-2022.9.19 | No | No |
| C&S Hong Kong,, Macao C&S | December 15, 2020 | 33,328 | March 17, 2021 | 2,523.47 | 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 | December 05, 2019 | 41,087.04 | February 12, 2020 | 11,396.07 | Joint and several liability guarantee | None | None | 2020.2.12-2022.2.12 | No | No |
| C&S Hong Kong, Macao C&S | December 05, 2019 | 12,940.8 | February 25, 2020 | 2,463.14 | Joint and several liability guarantee | None | None | 2020.2.25-2022.2.25 | No | No |
| C&S Hong Kong,, Macao C&S | December 05, 2019 | 6,470.4 | November 12, 2020 | 0 | Joint and several liability guarantee | None | None | 2020.11.12-2024.3.1 | No | No |
| C&S Hong Kong,, Macao C&S | December 05, 2019 | 15,528.96 | March 27, 2020 | 1,110.43 | Joint and several liability guarantee | None | None | 2020.3.27-2023.2.19 | No | No |
| C&S Hong Kong, Zhong Shun International, Macao C&S | December 15, 2017 | 17,997.12 | September 28, 2018 | 0 | Joint and several liability guarantee | None | None | 2018.9.28-2022.8.31 | No | No |
| C&S Hong Kong, Zhong Shun International, Macao C&S | December 05, 2019 | 19,411.2 | January 30, 2020 | 609.5 | Joint and several liability guarantee | None | None | 2020.1.30-2023.1.30 | No | No |
| Macao C&S | December 15, 2017 | 7,117.44 | March 23, 2018 | 1,553.22 | Joint and several liability guarantee | None | None | 2018.3.23-2022.9.23 | No | No |
| Macao C&S | December 15, 2017 | 7,000 | August 15, 2018 | 794.98 | Joint and several liability guarantee | None | None | 2018.8.15-2025.8.15 | No | No |
| Macao C&S | December 15, 2020 | 6,470.4 | March 30, 2021 | 1,009.38 | Joint and several liability guarantee | None | None | 2021.3.30-2024.3.30 | No | No |
| C&S Hong Kong, Zhong Shun Internationa | December 05, 2019 | 22,646.4 | September 01, 2020 | 2,690.1 | Joint and several liability guarantee | None | None | 2020.9.1-2022.7.9 | No | No |
| l, Macao C&S | |||||||||||
| C&S Hong Kong | December 05, 2019 | 14,105.47 | July 01, 2020 | 11,376.24 | Joint and several liability guarantee | None | None | 2020.7.1-2022.6.30 | No | No | |
| Macao C&S | December 05, 2019 | 27,046.27 | July 01, 2020 | 8,717.77 | Joint and several liability guarantee | None | None | 2020.7.1-2022.6.30 | No | No | |
| Total approved amount of guarantee for subsidiaries during the reporting period (B1) | 112,104 | Total actual amount of guarantee for subsidiaries during the reporting period (B2) | 14,810.62 | ||||||||
| Total approved amount of guarantee for subsidiaries at the end of the reporting period (B3) | 525,721.06 | Total actual guarantee balance to subsidiaries at the end of the reporting period (B4) | 83,723.2 | ||||||||
| 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 guarantee | |
| 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) | 112,104 | Total actual amount of guarantee during the reporting period (A2 + B2 + C2) | 14,810.62 | ||||||||
| Total approved amount of guarantee at the end of the reporting period (A3 + B3 + C3) | 546,721.06 | Total actual guarantee balance at the end of the reporting period (A4+B4+C4) | 92,813.2 | ||||||||
| Proportion of the total actual amount of guarantee (A4 + B4 + C4) in the net assets of the Company | 19.13% | ||||||||||
| 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) | 0 | ||||||||||
| Amount of guarantees in excess of 50% of net assets (F) | 31,011.15 | ||||||||||
| Total amount of the above three guarantees (D + E + F) | 31,011.15 | ||||||||||
| 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 | ||||||||||
| Description of providing external guarantee in violation of prescribed procedures (if any) | 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 bank | Self-owned fund | 1,000 | 0 | 0 | 0 |
| Wealth management product of securities company | Self-owned fund | 9,500 | 0 | 0 | 0 |
| Total | 10,500 | 0 | 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. Significant contracts for daily operation
□ Applicable √ Not applicable
5. Other significant contracts
□ Applicable √ Not applicable
There were no other significant contracts during the reporting period.
XIII. Other Significant Events
√ Applicable □ Not applicable
| No. | Announcement time | Announcement name | Announcement | Disclosure media |
| number | ||||
| 1 | January 06, 2021 | Announcement on Resolutions of the 30th Meeting of the Fourth Session of the Board of Directors | 2021-01 | Securities Times, Securities Daily, China Securities Journal, and CNINF |
| 2 | January 06, 2021 | Announcement on Resolutions of the 24th Meeting of the Fourth Session of the Board of Supervisors | 2021-02 | |
| 3 | January 06, 2021 | Announcement on the Re-election of the Board of Directors | 2021-03 | |
| 4 | January 06, 2021 | Announcement on the Re-election of the Board of Supervisor | 2021-04 | |
| 5 | January 06, 2021 | Plan of the Company for Repurchasing Partial Public Shares | 2021-05 | |
| 6 | January 06, 2021 | Notice on Convening 2021 First Extraordinary General Meeting | 2021-06 | |
| 7 | January 06, 2021 | Announcement on Completion of Stock Sales and Termination of Phase II Employee Stock Ownership Plan | 2021-07 | |
| 8 | January 06, 2021 | Announcement on Pre-disclosure of the Share Reduction Plan by Senior Management of the Company | 2021-08 | |
| 9 | January 09, 2021 | Announcement on Shareholding Information of the Top Ten Shareholders in Matters Relevant to Share Repurchase | 2021-09 | |
| 10 | January 09, 2021 | Share Repurchase Report | 2021-10 | |
| 11 | January 14, 2021 | Announcement on Resolutions of the 31st Meeting of the Fourth Session of the Board of Directors | 2021-11 | |
| 12 | January 14, 2021 | Announcement on Resolutions of the 25th Meeting of the Fourth Session of the Board of Supervisors | 2021-12 | |
| 13 | January 14, 2021 | Announcement of the Company on Building a New 400,000-ton High-grade Household Paper Project | 2021-13 | |
| 14 | January 14, 2021 | Announcement on Use of Self-owned Idle Funds for Reverse Repo of Treasury Bonds in 2021 | 2021-14 | |
| 15 | January 14, 2021 | Notice on Convening 2021 Second Extraordinary General Meeting | 2021-15 | |
| 16 | January 14, 2021 | Announcement on the Re-election of the Employee Representative Supervisors | 2021-16 | |
| 17 | January 15, 2021 | Announcement on Wholly-owned Subsidiary Obtaining the High-tech Enterprise Certificate (Renewal) | 2021-17 | |
| 18 | January 22, 2021 | Announcement on Resolutions of 2021 First Extraordinary General Meeting of Shareholders | 2021-18 | |
| 19 | January 22, 2021 | Announcement on Resolutions of the 1st Meeting of the Fifth Session of the Board of Directors | 2021-19 | |
| 20 | January 22, 2021 | Announcement on Resolutions of the 1st Meeting of the Fifth Session of the Board of Supervisors | 2021-20 | |
| 21 | January 22, 2021 | Announcement on the Appointment of Senior Managers | 2021-21 | |
| 22 | January 22, 2021 | Announcement on the Appointment of the Person in Charge of the Audit Dept. and the Representative of Securities Affairs | 2021-22 | |
| 23 | January 22, 2021 | Announcement on the Completion of Industrial and Commercial Registration Amendment of Subsidiaries | 2021-23 | |
| 24 | January 28, 2021 | Announcement on the First Repurchase of Company Shares | 2021-24 | |
| 25 | January 29, 2021 | Announcement on Progress of Repurchase of Company Shares | 2021-25 | |
| 26 | January 30, 2021 | Announcement on Resolutions of 2021 Second Extraordinary General Meeting of Shareholders | 2021-26 | |
| 27 | January 30, 2021 | Announcement on Progress of Repurchase of Company Shares | 2021-27 | |
| 28 | February 03, 2021 | Announcement on Progress of Repurchase of Company Shares | 2021-28 | |
| 29 | February 05, 2021 | Announcement on Progress of Repurchase of Company Shares | 2021-29 | |
| 30 | February 06, 2021 | Announcement on Completion of the Share Reduction Plan by Senior Management of the Company | 2021-30 | |
| 31 | February 27, 2021 | Announcement on Investment and Establishment of a Wholly-owned | 2021-31 |
| Subsidiary and Completion of Industrial and Commercial Registration | |||
| 32 | February 27, 2021 | Annual Performance Bulletin 2020 | 2021-32 |
| 33 | March 03, 2021 | Announcement on Progress of Repurchase of Company Shares | 2021-33 |
| 34 | March 04, 2021 | Announcement on Completion of the Industrial and Commercial Registration Amendment of the Company | 2021-34 |
| 35 | March 04, 2021 | Announcement on the Repurchase and Deregistration Completion of Reserved Restricted Stocks Awarded in the First Grant under the 2018 Stock Option and Restricted Stock Incentive Plan | 2021-35 |
| 36 | March 06, 2021 | Announcement on Independent Directors Obtaining the Qualification Certificate for Independent Directors | 2021-36 |
| 37 | March 06, 2021 | Announcement on the Early Termination of the Share Reduction Plan by Directors and Senior Management of the Company | 2021-37 |
| 38 | March 10, 2021 | Announcement on the Completion of Industrial and Commercial Registration Amendment of Wholly-owned Subsidiary | 2021-38 |
| 39 | March 16, 2021 | Announcement on the Progress of the New 400,000-ton High-grade Household Paper Project | 2021-39 |
| 40 | March 19, 2021 | Announcement on Resignation of the Company’s Director | 2021-40 |
| 41 | March 23, 2021 | Announcement on Resolutions of the 2nd Meeting of the Fifth Session of the Board of Directors | 2021-41 |
| 42 | March 23, 2021 | Announcement on By-election of Non-Independent Directors of the Fifth Session of the Board of Directors | 2021-42 |
| 43 | March 23, 2021 | Announcement on Change of President of the Company | 2021-43 |
| 44 | March 23, 2021 | Announcement on the Additional Appointment of the Representative of Securities Affairs | 2021-44 |
| 45 | March 23, 2021 | Notice on Convening the 2021 Third Extraordinary General Meeting | 2021-45 |
| 46 | March 24, 2021 | Announcement on Progress of Repurchase of Company Shares | 2021-46 |
| 47 | March 25, 2021 | Announcement on Progress of Repurchase of Company Shares | 2021-47 |
| 48 | April 06, 2021 | Announcement on Progress of Repurchase of Company Shares | 2021-48 |
| 49 | April 08, 2021 | Announcement on Resolutions of the 2021 Third Extraordinary General Meeting | 2021-49 |
| 50 | April 10, 2021 | Announcement on Acceptance Completion of Phase II of Hubei New Project | 2021-50 |
| 51 | April 13, 2021 | Announcement on Resolutions of 3rd Meeting of the Fifth Session of the Board of Directors | 2021-51 |
| 52 | April 13, 2021 | Announcement on Change of Chairman of the Company | 2021-52 |
| 53 | April 13, 2021 | Announcement on Appointment of the Vice President of the Company | 2021-53 |
| 54 | April 29, 2021 | Announcement on Resolutions of the 4th Meeting of the Fifth Session of the Board of Directors | 2021-54 |
| 55 | April 29, 2021 | Announcement on Resolutions of the 2nd Meeting of the Fifth Session of the Board of Supervisors | 2021-55 |
| 56 | April 29, 2021 | Summary of Annual Report 2020 | 2021-56 |
| 57 | April 29, 2021 | Announcement on the Proposal on 2020 Profit Distribution Plan | 2021-57 |
| 58 | April 29, 2021 | Announcement on Appointment of the Vice President of the Company | 2021-58 |
| 59 | April 29, 2021 | Notice on Convening 2020 Annual General Meeting | 2021-59 |
| 60 | April 29, 2021 | Notice on Convening the Online Performance Presentation for Annual Report 2020 | 2021-60 |
| 61 | April 29, 2021 | Text of the First Quarter Report 2021 | 2021-61 |
| 62 | April 29, 2021 | Announcement on Resignation of the Director and Co-president of the | 2021-62 |
| Company | |||
| 63 | May 06, 2021 | Announcement on Progress of Repurchase of Company Shares | 2021-63 |
| 64 | May 07, 2021 | Announcement on Wholly-owned Subsidiary Obtaining the High-tech Enterprise Certificate (Renewal) | 2021-64 |
| 65 | May 08, 2021 | Announcement on Progress of Repurchase of Company Shares | 2021-65 |
| 66 | May 10, 2021 | Announcement on the Issuance of a Proposal by Chairman and Actual Controllers of the Company to All Employees for Increasing Shareholding of the Company | 2021-66 |
| 67 | May 10, 2021 | Announcement on Commitments by Actual Controllers of the Company of Not Reducing or Pledging Shares of the Company | 2021-67 |
| 68 | May 13, 2021 | Announcement on Increase of Company Shares by Senior Management and Supervisors of the Company | 2021-68 |
| 69 | May 14, 2021 | Announcement on Increase of Company Shares by Chairman and Senior Management of the Company | 2021-69 |
| 70 | May 19, 2021 | Announcement on Increase of Company Shares by Senior Management and Supervisors of the Company | 2021-70 |
| 71 | May 19, 2021 | Reply to the Letter of Concern from Shenzhen Stock Exchange | 2021-71 |
| 72 | May 20, 2021 | Announcement on Resolutions of 2020 Annual General Meeting of Shareholders | 2021-72 |
| 73 | May 22, 2021 | Announcement on Resolutions of the 5th Meeting of the Fifth Session of the Board of Directors | 2021-73 |
| 74 | May 22, 2021 | Announcement on Resolutions of the 3rd Meeting of the Fifth Session of the Board of Supervisors | 2021-74 |
| 75 | May 22, 2021 | Announcement on Adjusting the Price and Amount of the Company’s Share Repurchase | 2021-75 |
| 76 | May 22, 2021 | Announcement on Changes to Accounting Policies | 2021-76 |
| 77 | May 22, 2021 | Announcement on Change of the Person in Charge of the Audit Dept. of the Company | 2021-77 |
| 78 | May 22, 2021 | Announcement on Continued Engagement of the Accounting Firm | 2021-78 |
| 79 | May 22, 2021 | Announcement on Amending the Articles of Association of the Company | 2021-79 |
| 80 | May 22, 2021 | Announcement on Achieving the Unlock Conditions of the Second Unlock Period for Restricted Stocks Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan | 2021-80 |
| 81 | May 22, 2021 | Announcement on Achieving the Exercise Conditions of the Second Exercise Period for Stock Options Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan | 2021-81 |
| 82 | May 22, 2021 | Announcement on the Repurchase and Deregistration of Partial Restricted Stocks Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan | 2021-82 |
| 83 | May 22, 2021 | Announcement on the Deregistration of Partial Stock Options Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan | 2021-83 |
| 84 | May 22, 2021 | Notice on Convening the 2021 Fourth Extraordinary General Meeting | 2021-84 |
| 85 | May 29, 2021 | Announcement on Increase of Company Shares by Supervisors of the Company | 2021-85 |
| 86 | June 02, 2021 | Announcement on Progress of Repurchase of Company Shares | 2021-86 |
| 87 | June 03, 2021 | Indicative Announcement on Convening the 2021 Fourth Extraordinary General Meeting | 2021-87 |
| 88 | June 05, 2021 | Announcement on Completion of the Industrial and Commercial Registration Amendment of the Company | 2021-88 |
| 89 | June 08, 2021 | Announcement on Resolutions of the 2021 Fourth Extraordinary | 2021-89 |
| General Meeting | |||
| 90 | June 08, 2021 | Announcement on Capital Reduction | 2021-90 |
| 91 | June 08, 2021 | Announcement on Progress of Repurchase of Company Shares | 2021-91 |
| 92 | June 08, 2021 | Announcement on Progress of Repurchase of Company Shares | 2021-92 |
| 93 | June 11, 2021 | Announcement on Implementation of 2020 Annual Equity Allocation | 2021-93 |
| 94 | June 19, 2021 | Announcement on Resolutions of the 6th Meeting of the Fifth Session of the Board of Directors | 2021-94 |
| 95 | June 19, 2021 | Announcement on Resolutions of the 4th Meeting of the Fifth Session of the Board of Supervisors | 2021-95 |
| 96 | June 19, 2021 | Announcement on Adjusting the Exercise Price of Stock Options under 2018 Stock Option and Restricted Stock Incentive Plan | 2021-96 |
| 97 | June 28, 2021 | Indicative Announcement on Adopting the Autonomous Exercise Mode in the Second Exercise Period for Stock Options Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan | 2021-97 |
| 98 | June 28, 2021 | Indicative Announcement on Lifting the Sales Restrictions in the Second Unlock Period for Restricted Stocks Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan | 2021-98 |
XIV. Significant Events of Subsidiaries of the Company
√ Applicable □ Not applicable
| No. | Announcement time | Announcement name | Announcement number | Disclosure media |
| 1 | January 15, 2021 | Announcement on Wholly-owned Subsidiary Obtaining the High-tech Enterprise Certificate (Renewal) | 2021-17 | Securities Times, Securities Daily, China Securities Journal, and CNINF |
| 2 | January 22, 2021 | Announcement on the Completion of Industrial and Commercial Registration Amendment of Subsidiaries | 2021-23 | |
| 3 | February 27, 2021 | Announcement on Investment and Establishment of a Wholly-owned Subsidiary and Completion of Industrial and Commercial Registration | 2021-31 | |
| 4 | March 10, 2021 | Announcement on the Completion of Industrial and Commercial Registration Amendment of Wholly-owned Subsidiary | 2021-38 | |
| 5 | May 07, 2021 | Announcement on Wholly-owned Subsidiary Obtaining the High-tech Enterprise Certificate (Renewal) | 2021-64 |
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 | 36,858,323 | 2.81% | 75,000 | -7,165,895 | -7,090,895 | 29,767,428 | 2.27% | ||
| 1. Shares held by the state | |||||||||
| 2. Shares held by state-owned legal person | |||||||||
| 3. Shares held by other domestic shareholders | 34,906,289 | 2.66% | -7,283,961 | -7,283,961 | 27,622,328 | 2.11% | |||
| Including: Shares held by domestic legal persons | |||||||||
| Shares held by domestic natural persons | 34,906,289 | 2.66% | -7,283,961 | -7,283,961 | 27,622,328 | 2.11% | |||
| 4. Shares held by foreign shareholders | 1,952,034 | 0.15% | 75,000 | 118,066 | 193,066 | 2,145,100 | 0.16% | ||
| Including: Shares held by foreign legal persons | |||||||||
| Shares held by foreign natural persons | 1,952,034 | 0.15% | 75,000 | 118,066 | 193,066 | 2,145,100 | 0.16% | ||
| II. Shares without selling restrictions | 1,274,840,644 | 97.19% | 386,478 | 6,954,005 | 7,340,483 | 1,282,181,127 | 97.73% | ||
| 1. RMB-denominated ordinary shares | 1,274,840,644 | 97.19% | 386,478 | 6,954,005 | 7,340,483 | 1,282,181,127 | 97.73% | ||
| 2. Domestic listed foreign shares | |||||||||
| 3. Overseas listed foreign shares | |||||||||
| 4. Others | |||||||||
| III. Total number of | 1,311,698,967 | 100.00% | 461,478 | -211,890 | 249,588 | 1,311,948,555 | 100.00% | ||
Explanation on changes in shares
√ Applicable □ Not applicable
1. During January 1, 2021 and February 28, 2021, vesting incentive recipients of stock options awarded in the firstgrant and reserved stock options under the 2018 Stock Option and Restricted Stock Incentive Plan exercised theright of 461,478 shares. As a result, the Company’s total share capital increased by 461,478 shares.
2. During the first unlock period for restricted shares awarded in the first grant under the 2018 Stock Option andRestricted Stock Incentive Plan, 24 incentive recipients were unable to unlock the shares since they left theCompany or failed to pass performance appraisal or unable to unlock all the shares since they passed theperformance appraisal but failed to get a full mark and therefore could only unlock shares proportioned to theirmark. As a result, the Company had to repurchase and cancel a total of 211,890 restricted shares that had beengranted but not unlocked. The deregistration procedures for the aforementioned restricted shares had beencompleted at the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited as at March3, 2021. As a result, the Company’s total share capital decreased by 211,890 shares.Approval of changes in shares
√ Applicable □ Not applicable
1. The Board of Directors’ disposition of the repurchase and deregistration matters for the first unlocking ofreserved restricted shares under the 2018 Stock Option and Restricted Stock Incentive Plan had been authorized bythe 2019 First Extraordinary General Meeting and reviewed and approved by the 28th meeting of the fourthsession of the Board of Directors and 22nd meeting of the fourth session of the Board of Supervisors.
2. The Board of Directors’ disposition of the exercise matters for the first exercise period of restricted stockoptions awarded in the first grant and reserved stock options under the 2018 Stock Option and Restricted StockIncentive Plan had been authorized by the 2019 First Extraordinary General Meeting and reviewed and approvedby the 23rd meeting of the fourth session of the Board of Directors, the 19th meeting of the fourth session of theBoard of Supervisors, the 28th meeting of the fourth session of the Board of Directors, and the 22nd meeting ofthe fourth session of the Board of Supervisors.Transfer of title of changed shares
□ Applicable √ Not applicable
Implementation of share repurchase
√ Applicable □ Not applicable
On January 5, 2021, the Company held the 30th meeting of the fourth session of the Board of Directors whichreviewed and passed the Proposal on Share Repurchase of the Company. The Company plans to repurchase sharesof the Company via centralized bidding transaction, with a total amount of RMB180million (inclusive) toRMB360 million (inclusive). The repurchase price shall not outstrip RMB31.515/share (inclusive). All shares tobe repurchased will be used for equity incentives or employee stock ownership plans.On May 21, 2021, the Company held the fifth meeting of the fifth session of the Board of Directors whichreviewed and passed the Proposal on Adjusting the Price and Amount of the Company’s Share Repurchase. Takinginto account positive changes in the capital market and the Company’s share price and based on confidence inoperations and future business development, the Company adjusts the upper price limit of the share repurchasefrom RMB31.515/share (inclusive) to RMB45/share (inclusive) and the amount range from RMB180-360 millionto RMB330-660 million. This could ensure the smooth implementation of the share repurchase and relevantincentive matters in the future.From January 27 to June 30, 2021, the Company repurchased a total of 18,535,177 shares through its specialrepurchase securities account, accounting for 1.4128% of its total share capital at the time. The highest and lowesttransaction price was RMB34.50/share and RMB23.27/share, respectively, and the total transaction amount wasRMB532,605,631.96 (excluding transaction fee).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 shareattributable to ordinary shareholders of the Company, and other financial indicators in last year and the latestperiod
□ Applicable √ Not applicable
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 | Long-term | ||
| Deng Guanbiao | 3,718,105 | 3,718,105 | Lock-up shares of senior management | Long-term | ||
| Deng Guanjie | 900,730 | 900,730 | Lock-up shares of senior management | Long-term | ||
| Liu Peng | 45,975 | 45,975 | Lock-up shares of senior management; the increase in restricted shares is due to the proportional locking of shareholding increase | Long-term | ||
| Liu Jinfeng | 1,579,475 | 527,563 | 1,051,912 | Lock-up shares of senior management | Long-term | |
| Chen Haiyuan | 12,675 | 12,675 | Lock-up shares of senior management; the increase in restricted shares is due to the proportional locking of shareholding increase | Long-term | ||
| Li Youquan | 33,300 | 33,300 | Lock-up shares of senior management | Long-term | ||
| Yue Yong | 9,261,243 | 2,127,937 | 330,000 | 7,463,305 | Lock-up shares of senior management; the increase in restricted shares is due to the proportional locking of unlocked restricted shares | Long-term |
| Zhou QichaoZhou Qichao | 497,754 | 123,750 | 374,004 | Lock-up shares of senior management | Long-term | |
| Ye LongfangYe Longfang | 112,500 | 112,500 | Lock-up shares of senior management | Long-term | ||
| Dong Ye | 119,794 | 53,250 | 45,000 | 111,544 | Lock-up shares of senior management; the increase in restricted shares is due to the proportional locking of unlocked restricted shares | Long-term |
| Li Zhaojin | 8,100 | 8,100 | Lock-up shares of senior management; the increase in | Long-term |
| restricted shares is due to the proportional locking of shareholding increase | ||||||
| Deng Wenxi | 15,825 | 15,825 | Lock-up shares of senior management; the increase in restricted shares is due to the proportional locking of shareholding increase | Long-term | ||
| Dai Zhenji | 265,034 | 304,966 | 570,000 | Lock-up shares of senior management; no share reduction within 6 months upon leaving the post, with all shares being locked | Release of selling restrictions in accordance with relevant regulations | |
| Equity incentive recipients | 15,305,780 | 5,020,935 | 10,284,845 | In accordance with 2018 Stock Option and Restricted Stock Incentive Plan (Draft), the second unlocking was conducted for restricted stocks of some incentive recipients awarded in the first grant, with an unlocking ratio of 30%. The second and third unlocking for reserved stocks has not been conducted. | Pursuant to 2018 Stock Option and Restricted Stock Incentive Plan (Draft) | |
| Total | 36,858,323 | 7,853,435 | 762,541 | 29,767,428 | -- | -- |
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 | 75,430 | 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 | 28.63% | 375,655,958 | 375,655,958 | ||||
| Chung Shun Co. | Foreign legal person | 20.31% | 266,504,789 | 266,504,789 | ||||
| Hong Kong Securities Clearing Co., Ltd. | Foreign legal person | 7.12% | 93,436,636 | 93,436,636 | ||||
| National Social Security Fund Portfolio 406 | Others | 1.00% | 13,112,327 | 13,112,327 | ||||
| ICBC - Fuguo Tianhui Select Growth Hybrid Securities Investment Fund (LOF) | Others | 0.79% | 10,303,557 | 10,303,557 | ||||
| Yue Yong | Domestic natural person | 0.74% | 9,665,241 | 7,903,305 | 1,761,936 | |||
| CCB - Fuguo Value Creation Hybrid Securities Investment Fund | Others | 0.74% | 9,664,807 | 9,664,807 | ||||
| CITIC Securities - CITIC Bank - CITIC Securities Outstanding Growth Two-Year Holding Period Hybrid Collective Asset Management Plan | Others | 0.68% | 8,958,645 | 8,958,645 | ||||
| Taikang Life Insurance - Unit-linked - Innovation Power | Others | 0.67% | 8,773,968 | 8,773,968 | ||||
| National Social Security Fund Portfolio 101 | Others | 0.59% | 7,749,378 | 7,749,378 | ||||
| Description on the related relationship or parties acting-in-concert arrangements among the above shareholders | 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. 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. 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 as stipulated in the Administrative Measures for the Disclosure of Information on Changes | |||||||
| in Shareholders’ Shareholding of Listed Companies. | ||||
| Description on entrusting/being entrusted with voting rights and waver of voting rights by the aforementioned shareholders: | None | |||
| Description on special repurchase account among top 10 shareholders (if any) (see note 11) | 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 20,431,077 shares, with a shareholding ratio of 1.56%. Pursuant to relevant regulations, it is not included in the list of top 10 shareholders. | |||
| Shareholdings of top 10 ordinary shareholders not subject to selling restrictions | ||||
| Name of shareholder | Number of ordinary shares held at the end of the reporting period not subject to selling restrictions | Type of shares | ||
| Type of shares | Number of shares | |||
| Guangdong Zhongshun Paper Group Co., Ltd. | 375,655,958 | RMB-denominated ordinary shares | 375,655,958 | |
| Chung Shun Co. | 266,504,789 | RMB-denominated ordinary shares | 266,504,789 | |
| Hong Kong Securities Clearing Co., Ltd. | 93,436,636 | RMB-denominated ordinary shares | 93,436,636 | |
| National Social Security Fund Portfolio 406 | 13,112,327 | RMB-denominated ordinary shares | 13,112,327 | |
| ICBC - Fuguo Tianhui Select Growth Hybrid Securities Investment Fund (LOF) | 10,303,557 | RMB-denominated ordinary shares | 10,303,557 | |
| CCB - Fuguo Value Creation Hybrid Securities Investment Fund | 9,664,807 | RMB-denominated ordinary shares | 9,664,807 | |
| CITIC Securities - CITIC Bank - CITIC Securities Outstanding Growth Two-Year Holding Period Hybrid Collective Asset Management Plan | 8,958,645 | RMB-denominated ordinary shares | 8,958,645 | |
| Taikang Life Insurance - Unit-linked - Innovation Power | 8,773,968 | RMB-denominated ordinary shares | 8,773,968 | |
| National Social Security Fund Portfolio 101 | 7,749,378 | RMB-denominated ordinary shares | 7,749,378 | |
| Yue Yong | 1,761,936 | RMB-denominated ordinary shares | 1,761,936 | |
| Description on the related relationship or parties 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 | 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. 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. 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 as stipulated in the Administrative Measures for the Disclosure of Information on Changes | |||
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
in Shareholders’ Shareholding of Listed Companies.
Name
| 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 | 61,300 | |||||
| Deng Guanbiao | Vice Chairman | Incumbent | 4,957,473 | 4,957,473 | |||||
| Deng Guanjie | Vice Chairman | Incumbent | 1,200,974 | 1,200,974 | |||||
| Liu Jinfeng | Director, Vice President | Incumbent | 2,410,550 | 601,200 | 1,809,350 | ||||
| He Haidi | Independent Director | Incumbent | |||||||
| He Guoquan | Independent Director | Incumbent | |||||||
| Liu Die | Independent Director | Incumbent | |||||||
| Yue Yong | Vice President | Incumbent | 10,537,741 | 872,500 | 9,665,241 | ||||
| Ye Longfang | Vice President | Incumbent | 150,000 | 150,000 | |||||
| Li Zhaojin | Vice President | Incumbent | 10,800 | 10,800 | |||||
| Deng Wenxi | Vice President | Incumbent | 21,100 | 21,100 | |||||
| Zhang Yang | Vice President | Incumbent | |||||||
| Dong Ye | Chief | Incumbent | 228,725 | 228,725 |
| Financial Officer | |||||||||
| Chen Haiyuan | Chairman of the Board of Supervisors | Incumbent | 5,000 | 5,000 | |||||
| Liang Yongliang | Supervisor | Incumbent | |||||||
| Li Youquan | Supervisor | Resigned | 62,280 | 3,000 | 65,280 | ||||
| Dai Zhenji | Director, Joint President | Resigned | 1,670,000 | 300,000 | 1,970,000 | ||||
| Deng Yingzhong | Chairman | Resigned | |||||||
| Deng Guanbiao | President | Resigned | |||||||
| Zhou Qichao | Board Secretary, Vice President | Resigned | 498,672 | 124,600 | 374,072 | ||||
| Yue Yong | Director | Resigned | |||||||
| Zeng Yi | Director | Resigned | |||||||
| Huang Hongyan | Independent Director | Resigned | |||||||
| Ge Guangrui | Independent Director | Resigned | |||||||
| Total | -- | -- | 28,469,226 | 401,200 | 1,598,300 | 27,272,126 | 0 | 0 | 0 |
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 ReportWhether 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, 2021
Unit: RMB
| Item | June 30, 2021 | December 31, 2020 |
| Current assets: | ||
| Monetary funds | 788,702,136.99 | 1,125,196,199.56 |
| Settlement reserve | ||
| Lending to banks and other financial institutions | ||
| Tradable financial assets | ||
| Derivative financial assets | ||
| Notes receivable | 1,513,142.38 | 724,419.74 |
| Accounts receivable | 933,313,137.98 | 1,051,423,939.59 |
| Accounts receivable financing | ||
| Prepayments | 12,834,587.00 | 26,819,108.57 |
| Premium receivable | ||
| Reinsurance payables | ||
| Reinsurance contract reserves receivable | ||
| Other receivables | 21,117,810.56 | 15,824,945.56 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Financial assets held under resale agreements | ||
| Inventory | 1,624,309,444.82 | 1,661,274,495.32 |
| Contract assets | ||
| Assets held for sale | 57,073,059.69 | 57,073,059.69 |
| Non-current assets due within one year | ||
| Other current assets | 34,666,236.56 | 101,584,569.30 |
| Total current assets | 3,473,529,555.98 | 4,039,920,737.33 |
| 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 | 33,856,923.84 | 34,575,365.94 |
| Fixed assets | 3,182,792,165.52 | 2,792,587,302.21 |
| Construction work in progress | 55,534,528.69 | 275,904,617.95 |
| Productive biological assets | ||
| Oil & gas assets | ||
| Right-of-use assets | 11,151,372.57 | |
| Intangible assets | 169,199,442.04 | 169,355,772.24 |
| Development expenses | ||
| Goodwill | 64,654.15 | 64,654.15 |
| Long-term deferred expenses | 22,695,522.53 | 26,635,983.14 |
| Deferred income tax assets | 145,176,431.76 | 111,367,362.66 |
| Other non-current assets | 44,934,505.84 | 28,027,952.15 |
| Total non-current assets | 3,665,405,546.94 | 3,438,519,010.44 |
| Total assets | 7,138,935,102.92 | 7,478,439,747.77 |
| Current liabilities: | ||
| Short-term borrowings | 142,942,941.34 | |
| Borrowings from PBC | ||
| Placements from banks and other financial institutions | ||
| Tradable financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | 289,707,176.43 | 234,887,563.22 |
| Accounts payable | 723,033,087.39 | 761,519,389.26 |
| Payments received in advance | ||
| Contract liabilities | 103,501,369.49 | 137,333,617.40 |
| 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 | 111,500,389.45 | 123,524,627.11 |
| Tax and fees payable | 77,697,704.37 | 112,608,054.87 |
| Other payables | 796,391,000.45 | 754,844,580.09 |
| Including: Interests payable | ||
| Dividends payable | 1,594,446.41 | 1,437,466.77 |
| Transaction fee and commission receivable | ||
| Reinsurance payable | ||
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 6,038,594.62 | |
| Other current liabilities | 13,400,882.00 | 17,628,086.63 |
| Total current liabilities | 2,121,270,204.20 | 2,285,288,859.92 |
| Non-current liabilities: | ||
| Insurance contract reserves | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preference shares | ||
| Perpetual bonds | ||
| Lease liabilities | 5,526,106.56 | |
| Long-term payable | ||
| Long-term employee remuneration payable | ||
| Provision | ||
| Deferred income | 112,092,990.63 | 115,101,158.13 |
| Deferred income tax liabilities | 47,103,893.91 | 35,903,653.30 |
| Other non-current liabilities | ||
| Total non-current liabilities | 164,722,991.10 | 151,004,811.43 |
| Total liabilities | 2,285,993,195.30 | 2,436,293,671.35 |
| Owner’s equity: | ||
| Share capital | 1,311,043,971.00 | 1,311,487,077.00 |
| Other equity instruments | ||
| Including: Preference shares | ||
| Perpetual bonds | ||
| Capital reserve | 941,625,561.08 | 907,006,505.05 |
| Less: Treasury shares | 599,354,148.06 | 96,480,911.29 |
| Other comprehensive income | ||
| Special reserves |
| Surplus reserves | 61,469,258.27 | 61,469,258.27 |
| General reserves | ||
| Retained earnings | 3,137,073,935.13 | 2,858,664,147.39 |
| Total equity attributable to owners of the parent company | 4,851,858,577.42 | 5,042,146,076.42 |
| Equities of minority shareholders | 1,083,330.20 | |
| Total owner’s equity | 4,852,941,907.62 | 5,042,146,076.42 |
| Total liabilities and owners’ equities | 7,138,935,102.92 | 7,478,439,747.77 |
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, 2021 | December 31, 2020 |
| Current assets: | ||
| Monetary funds | 83,716,953.94 | 170,229,178.13 |
| Tradable financial assets | ||
| Derivative financial assets | ||
| Notes receivable | ||
| Accounts receivable | 180,374,886.52 | 92,647,372.33 |
| Accounts receivable financing | ||
| Prepayments | 9,452,593.95 | 7,940,396.34 |
| Other receivables | 114,345,050.47 | 136,987,584.64 |
| Including: Interest receivable | ||
| Dividends receivable | ||
| Inventory | 172,205,617.01 | 156,605,546.36 |
| Contract assets | ||
| Assets held for sale | ||
| Non-current assets due within one year | ||
| Other current assets | 2,287,198.40 | 52,517,725.87 |
| Total current assets | 562,382,300.29 | 616,927,803.67 |
| Non-current assets: | ||
| Investments in creditor’s rights | ||
| Investments in other creditor’s rights | ||
| Long-term receivable | ||
| Long-term equity investment | 1,939,122,205.28 | 1,928,113,219.50 |
| Investment in other equity instruments | ||
| Other non-current financial assets |
| Investment property | 17,549,963.77 | 17,939,329.51 |
| Fixed assets | 248,258,276.83 | 257,354,688.59 |
| Construction work in progress | 544,254.89 | |
| Productive biological assets | ||
| Oil & gas assets | ||
| Right-of-use assets | 2,054,171.93 | |
| Intangible assets | 26,626,212.20 | 25,205,232.21 |
| Development expenses | ||
| Goodwill | ||
| Long-term deferred expenses | ||
| Deferred income tax assets | 65,222,700.02 | 46,811,106.77 |
| Other non-current assets | 16,107,417.95 | 2,619,959.27 |
| Total non-current assets | 2,315,485,202.87 | 2,278,043,535.85 |
| Total assets | 2,877,867,503.16 | 2,894,971,339.52 |
| Current liabilities: | ||
| Short-term borrowings | ||
| Tradable financial liabilities | ||
| Derivative financial liabilities | ||
| Notes payable | ||
| Accounts payable | 552,768,863.59 | 420,061,168.44 |
| Payments received in advance | ||
| Contract liabilities | 43,205,322.20 | 17,388,431.01 |
| Employee remuneration payable | 37,443,890.70 | 44,678,713.21 |
| Tax and fees payable | 5,413,588.15 | 5,995,417.05 |
| Other payables | 93,744,117.45 | 126,072,040.24 |
| Including: Interests payable | ||
| Dividends payable | 1,594,446.41 | 1,437,466.77 |
| Liabilities held for sale | ||
| Non-current liabilities due within one year | 733,541.13 | |
| Other current liabilities | 5,616,691.89 | 2,260,496.03 |
| Total current liabilities | 738,926,015.11 | 616,456,265.98 |
| Non-current liabilities: | ||
| Long-term borrowings | ||
| Bonds payable | ||
| Including: Preference shares | ||
| Perpetual bonds | ||
| Lease liabilities | 1,331,461.99 | |
| Long-term payable | ||
| Long-term employee remuneration payable | ||
| Provision | ||
| Deferred income | 5,251,791.53 | 5,855,467.25 |
| Deferred income tax liabilities | 7,250,149.26 | 7,202,336.33 |
| Other non-current liabilities | ||
| Total non-current liabilities | 13,833,402.78 | 13,057,803.58 |
| Total liabilities | 752,759,417.89 | 629,514,069.56 |
| Owner’s equity: | ||
| Share capital | 1,311,043,971.00 | 1,311,487,077.00 |
| Other equity instruments | ||
| Including: Preference shares | ||
| Perpetual bonds | ||
| Capital reserve | 861,277,099.91 | 831,693,206.19 |
| Less: Treasury shares | 599,354,148.06 | 96,480,911.29 |
| Other comprehensive income | ||
| Special reserves | ||
| Surplus reserves | 61,347,923.99 | 61,347,923.99 |
| Retained earnings | 490,793,238.43 | 157,409,974.07 |
| Total owner’s equity | 2,125,108,085.27 | 2,265,457,269.96 |
| Total liabilities and owners’ equities | 2,877,867,503.16 | 2,894,971,339.52 |
3. Consolidated income statement
Unit: RMB
| Item | Half-Year of 2021 | Half-Year of 2020 |
| I. Total Operating Income | 4,247,641,836.38 | 3,616,201,399.80 |
| Including: Operating income | 4,247,641,836.38 | 3,616,201,399.80 |
| Interest income | ||
| Gross earned premiums | ||
| Service charge and commission income | ||
| II. Total Operating Cost | 3,767,785,569.02 | 3,081,938,688.14 |
| Including: Operating costs | 2,562,244,166.21 | 1,931,406,918.16 |
| 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 | 29,251,004.43 | 26,920,007.36 |
| Selling expenses | 915,478,651.72 | 848,071,082.60 |
| Administrative expenses | 165,200,078.38 | 185,701,854.01 |
| R&D expenses | 97,414,812.32 | 90,860,828.24 |
| Finance expenses | -1,803,144.04 | -1,022,002.23 |
| Including: Interest fees | 975,546.01 | 1,140,788.29 |
| Interest income | 6,623,270.61 | 4,060,998.02 |
| Plus: Other income | 11,671,362.52 | 15,174,645.20 |
| Return on investment (“-” indicates loss) | 358,473.15 | 2,287,274.87 |
| 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) | ||
| Credit impairment losses (“-” indicates loss) | 1,301,606.93 | -1,423,699.75 |
| Asset impairment losses (“-” indicates loss) | -2,753,828.11 | -850,381.40 |
| Return on disposal of assets (“-” indicates loss) | -259,896.46 | -896,870.05 |
| III. Operating Profit (“-” indicates loss) | 490,173,985.39 | 548,553,680.53 |
| Plus: Non-operating income | 1,708,366.54 | 3,169,241.16 |
| Less: Non-operating expenditure | 3,638,183.86 | 13,240,183.16 |
| IV. Total Profit (“-” indicates total loss) | 488,244,168.07 | 538,482,738.53 |
| Less: Income tax expense | 81,099,520.72 | 85,783,253.92 |
| V. Net Profit (“-” indicates net loss) | 407,144,647.35 | 452,699,484.61 |
| i. Classified by operation continuity | ||
| 1. Net profit from continued operation (“-” indicates net loss) | 407,144,647.35 | 452,699,484.61 |
| 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 | 407,161,317.15 | 452,699,484.61 |
| 2. Minority shareholders’ profits and losses | -16,669.80 | |
| 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 | 407,144,647.35 | 452,699,484.61 |
| Total comprehensive income attributable to owners of the parent company | 407,161,317.15 | 452,699,484.61 |
| Total comprehensive income attributable to minority shareholders | -16,669.80 | |
| VIII. Earnings per Share: | ||
| i. Basic earnings per share | 0.3140 | 0.3519 |
| ii. Diluted earnings per share | 0.3109 | 0.3462 |
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 2021 | Half-Year of 2020 |
| I. Operating Income | 916,066,342.46 | 853,891,264.03 |
| Less: Operating cost | 788,799,370.03 | 712,614,977.74 |
| Tax and surcharges | 2,176,306.49 | 2,631,659.04 |
| Selling expenses | 87,176,883.65 | 66,501,515.28 |
| Administrative expenses | 65,964,350.45 | 91,173,785.60 |
| R&D expenses | ||
| Finance expenses | -884,099.85 | 672,377.63 |
| Including: Interest fees | 26,220.26 | |
| Interest income | 809,358.94 | 1,722,164.19 |
| Plus: Other income | 1,516,457.89 | 1,098,835.80 |
| Return on investment (“-” indicates loss) | 482,704,072.79 | 142,109,515.77 |
| 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) | -573,774.23 | -1,477,826.65 |
| Asset impairment losses (“-” indicates loss) | -15,126.42 | -235,210.66 |
| Return on disposal of assets (“-” indicates loss) | -613,479.84 | |
| II. Operating Profit (“-” indicates loss) | 456,465,161.72 | 121,178,783.16 |
| Plus: Non-operating income | 204,390.14 | 367,540.33 |
| Less: Non-operating expenditure | 1,457,600.53 | 11,762,151.77 |
| III. Total Profit (“-” indicates total loss) | 455,211,951.33 | 109,784,171.72 |
| Less: Income tax expense | -6,922,842.44 | -3,727,647.46 |
| IV. Net Profit (“-” indicates net loss) | 462,134,793.77 | 113,511,819.18 |
| i. Net profit from continued operation (“-” indicates net loss) | 462,134,793.77 | 113,511,819.18 |
| 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 | 462,134,793.77 | 113,511,819.18 |
| 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 2021 | Half-Year of 2020 |
| I. Cash Flows from Operating Activities: | ||
| Cash received from sale of goods or rendering of services | 4,360,141,241.09 | 3,613,430,926.28 |
| 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 |
| Cash received from the premium of direct insurance contracts | ||
| Net cash from reinsurance business | ||
| Net increase in deposits and investment of the insured | ||
| Cash obtained from interest, net fee and commission | ||
| Net increase in placements from banks and other financial institutions | ||
| Net increase in repo service fund | ||
| Net cash from agent securities trading | ||
| Tax rebates | 120,214.00 | |
| Cash received related to other operating activities | 38,362,676.67 | 76,989,647.10 |
| Sub-total of cash inflow from operating activities | 4,398,503,917.76 | 3,690,540,787.38 |
| Cash paid for goods purchased and services rendered | 2,487,866,757.79 | 2,226,834,895.97 |
| 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 | 435,057,207.01 | 340,957,388.41 |
| Tax payments | 310,071,504.86 | 259,738,653.85 |
| Cash payments related to other operating activities | 427,642,659.91 | 358,451,260.82 |
| Sub-total of cash outflow from operating activities | 3,660,638,129.57 | 3,185,982,199.05 |
| Net cash flows from operating activities | 737,865,788.19 | 504,558,588.33 |
| II. Cash Flows from Investing Activities: | ||
| Cash from realization of investment | ||
| Cash received from the return on investments | 358,473.15 | 2,287,274.87 |
| Net cash received from the disposal of fixed assets, intangible assets, and other long-term assets | 10,542,186.47 | 30,060,788.00 |
| Net amount of cash received from the disposal of subsidiaries and other operating organizations | ||
| Cash received related to other | 50,000,000.00 | 127,105,000.00 |
| investing activities | ||
| Sub-total of cash inflow from investing activities | 60,900,659.62 | 159,453,062.87 |
| Cash paid for the acquisition and construction of fixed assets, intangible assets, and other long-term assets | 328,193,755.53 | 188,914,982.57 |
| Cash paid for investments | ||
| Net increase in pledged loans | ||
| Net amount of cash paid for acquisition of subsidiaries and other operating organizations | ||
| Cash payments related to other investing activities | 212,400,000.00 | |
| Sub-total of cash outflow from investing activities | 328,193,755.53 | 401,314,982.57 |
| Net cash flows from investing activities | -267,293,095.91 | -241,861,919.70 |
| III. Cash Flows from Financing Activities: | ||
| Cash received from capital contribution | 11,355,276.29 | |
| Including: Proceeds received by subsidiaries from minority shareholders’ investment | ||
| Cash received from borrowings | 13,042,460.23 | 257,722,148.28 |
| Cash received related to other financing activities | ||
| Sub-total of cash inflow from financing activities | 24,397,736.52 | 257,722,148.28 |
| Cash paid for repayments of borrowings | 155,939,151.58 | 164,917,045.18 |
| Cash payment for interest expenses and distribution of dividends or profits | 129,388,592.82 | 98,173,895.03 |
| Including: Dividend and profit paid by subsidiaries to minority shareholders | ||
| Cash payments related to other financing activities | 554,697,666.71 | 40,446,866.90 |
| Sub-total of cash outflow from financing activities | 840,025,411.11 | 303,537,807.11 |
| Net cash flows from financing activities | -815,627,674.59 | -45,815,658.83 |
| IV. Effect of Exchange Rate Changes on Cash and Cash Equivalents | -3,754,951.08 | 3,555,983.87 |
| V. Net Increase in Cash and Cash Equivalents | -348,809,933.39 | 220,436,993.67 |
| Plus: Opening balance of cash and cash equivalents | 1,050,034,135.72 | 675,996,852.97 |
| VI. Closing Balance of Cash and Cash Equivalents | 701,224,202.33 | 896,433,846.64 |
6. Cash flow statement of the Parent Company
Unit: RMB
| Item | Half-Year of 2021 | Half-Year of 2020 |
| I. Cash Flows from Operating Activities: | ||
| Cash received from sale of goods or rendering of services | 825,204,668.76 | 746,412,698.39 |
| Tax rebates | 120,214.00 | |
| Cash received related to other operating activities | 350,780,128.27 | 987,204,013.79 |
| Sub-total of cash inflow from operating activities | 1,175,984,797.03 | 1,733,736,926.18 |
| Cash paid for goods purchased and services rendered | 628,652,955.42 | 491,197,761.73 |
| Cash paid to and on behalf of employees | 105,969,767.52 | 66,675,479.70 |
| Tax payments | 12,714,786.96 | 21,863,845.36 |
| Cash payments related to other operating activities | 361,078,648.58 | 428,397,315.97 |
| Sub-total of cash outflow from operating activities | 1,108,416,158.48 | 1,008,134,402.76 |
| Net cash flows from operating activities | 67,568,638.55 | 725,602,523.42 |
| II. Cash Flows from Investing Activities: | ||
| Cash from realization of investment | ||
| Cash received from the return on investments | 482,704,072.79 | 141,992,629.47 |
| Net cash received from the disposal of fixed assets, intangible assets, and other long-term assets | ||
| Net amount of cash received from the disposal of subsidiaries and other operating organizations | ||
| Cash received related to other investing activities | 50,000,000.00 | 127,105,000.00 |
| Sub-total of cash inflow from investing activities | 532,704,072.79 | 269,097,629.47 |
| Cash paid for the acquisition and construction of fixed assets, intangible assets, and other long-term assets | 21,866,189.95 | 18,608,797.77 |
| Cash paid for investments | 5,000,000.00 | 665,600,000.00 |
| Net amount of cash paid for acquisition of subsidiaries and other operating organizations | ||
| Cash payments related to other investing activities | 152,400,000.00 | |
| Sub-total of cash outflow from investing activities | 26,866,189.95 | 836,608,797.77 |
| Net cash flows from investing activities | 505,837,882.84 | -567,511,168.30 |
| III. Cash Flows from Financing Activities: |
| Cash received from capital contribution | 10,255,276.29 | |
| Cash received from borrowings | ||
| Cash received related to other financing activities | ||
| Sub-total of cash inflow from financing activities | 10,255,276.29 | |
| Cash paid for repayments of borrowings | ||
| Cash payment for interest expenses and distribution of dividends or profits | 128,594,549.77 | 96,955,934.28 |
| Cash payments related to other financing activities | 574,898,356.02 | 31,482,661.04 |
| Sub-total of cash outflow from financing activities | 703,492,905.79 | 128,438,595.32 |
| Net cash flows from financing activities | -693,237,629.50 | -128,438,595.32 |
| IV. Effect of Exchange Rate Changes on Cash and Cash Equivalents | -783.27 | 259,845.46 |
| V. Net Increase in Cash and Cash Equivalents | -119,831,891.38 | 29,912,605.26 |
| Plus: Opening balance of cash and cash equivalents | 169,851,203.76 | 156,151,560.82 |
| VI. Closing Balance of Cash and Cash Equivalents | 50,019,312.38 | 186,064,166.08 |
7. Consolidated statement of changes in owner’s equity
Amount of the current period
Unit: RMB
| Item | Half-Year of 2021 | ||||||||||||||
| 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 Last Year | 1,311,487,077.00 | 907,006,505.05 | 96,480,911.29 | 61,469,258.27 | 2,858,664,147.39 | 5,042,146,076.42 | 5,042,146,076.42 | ||||||||
| 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 | 1,311,487,077.00 | 907,006,505.05 | 96,480,911.29 | 61,469,258.27 | 2,858,664,147.39 | 5,042,146,076.42 | 5,042,146,076.42 | ||||||||
| III. Changes in the Period (“-” Indicates Decrease) | -443,106.00 | 34,619,056.03 | 502,873,236.77 | 278,409,787.74 | -190,287,499.00 | 1,083,330.20 | -189,204,168.80 | ||||||||
| i. Total comprehensive income | 407,161,317.15 | 407,161,317.15 | -16,669.80 | 407,144,647.35 | |||||||||||
| ii. Capital contributed or decreased by owner | -443,106.00 | 34,619,056.03 | 502,873,236.77 | -468,697,286.74 | 1,100,000.00 | -467,597,286.74 | |||||||||
| 1 Ordinary shares contributed by owners | 1,578,199.00 | 15,730,354.61 | 17,308,553.61 | 1,100,000.00 | 18,408,553.61 | ||||||||||
| 2 Capital contributed by owners of other equity instruments | |||||||||||||||
| 3 Share based payments recognized as owner’s equity | -2,021,305.00 | 18,888,701.42 | -29,732,395.14 | 46,599,791.56 | 46,599,791.56 | ||||||||||
| 4 Others | 532,605,631.91 | -532,605,631.91 | -532,605,631.91 |
| iii. Profit distribution | -128,751,529.41 | -128,751,529.41 | -128,751,529.41 | ||||||||||||
| 1 Appropriation of surplus reserves | |||||||||||||||
| 2 Appropriation of general risk reserves | |||||||||||||||
| 3 Distribution to owners (or shareholders) | -128,751,529.41 | -128,751,529.41 | -128,751,529.41 | ||||||||||||
| 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 | 1,311,043,971.00 | 941,625,561.08 | 599,354,148.06 | 61,469,258.27 | 3,137,073,935.13 | 4,851,858,577.42 | 1,083,330.20 | 4,852,941,907.62 |
Amount of last period
Unit: RMB
| Item | Half-Year of 2020 | ||||||||||||||
| 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 Last Year | 1,308,891,273.00 | 760,731,416.57 | 104,792,649.00 | 53,205,582.86 | 2,058,968,835.80 | 4,077,004,459.23 | 4,077,004,459.23 | ||||||||
| 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 | 1,308,891,273.00 | 760,731,416.57 | 104,792,649.00 | 53,205,582.86 | 2,058,968,835.80 | 4,077,004,459.23 | 4,077,004,459.23 | ||||||||
| III. Changes in the Period (“-” Indicates Decrease) | 1,788,786.00 | 97,621,072.22 | -1,072,825.04 | 354,753,498.45 | 455,236,181.71 | 455,236,181.71 | |||||||||
| i. Total comprehensive income | 452,699,484.61 | 452,699,484.61 | 452,699,484.61 | ||||||||||||
| ii. Capital contributed or decreased by owner | 1,788,786.00 | 97,621,072.22 | -1,072,825.04 | 100,482,683.26 | 100,482,683.26 | ||||||||||
| 1 Ordinary shares contributed by owners | 2,591,508.00 | 19,622,899.06 | 22,214,407.06 | 22,214,407.06 | |||||||||||
| 2 Capital contributed by owners of other equity instruments | |||||||||||||||
| 3 Share based payments recognized as owner’s equity | -802,722.00 | 77,998,173.16 | -28,753,546.80 | 105,948,997.96 | 105,948,997.96 | ||||||||||
| 4 Others | 27,680,721.76 | -27,680,721.76 | -27,680,721.76 | ||||||||||||
| iii. Profit distribution | -97,945,986.16 | -97,945,986.16 | -97,945,986.16 | ||||||||||||
| 1 |
| Appropriation of surplus reserves | |||||||||||||||
| 2 Appropriation of general risk reserves | |||||||||||||||
| 3 Distribution to owners (or shareholders) | -97,945,986.16 | -97,945,986.16 | -97,945,986.16 | ||||||||||||
| 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 | 1,310,680,059.00 | 858,352,488.79 | 103,719,823.96 | 53,205,582.86 | 2,413,722,334.25 | 4,532,240,640.94 | 4,532,240,640.94 |
8. Statement of changes in owner’s equity of the Parent Company
Amount of the current period
Unit: RMB
| Item | Half-Year of 2021 | |||||||||||
| 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 | Perpetual bonds | Others | ||||||||||
| shares | ||||||||||||
| I. Balance at the End of Last Year | 1,311,487,077.00 | 831,693,206.19 | 96,480,911.29 | 61,347,923.99 | 157,409,974.07 | 2,265,457,269.96 | ||||||
| Plus: Alternation to accounting policies | ||||||||||||
| Correction to previous errors | ||||||||||||
| Others | ||||||||||||
| II. Balance at the Beginning of the Year | 1,311,487,077.00 | 831,693,206.19 | 96,480,911.29 | 61,347,923.99 | 157,409,974.07 | 2,265,457,269.96 | ||||||
| III. Changes in the Period (“-” Indicates Decrease) | -443,106.00 | 29,583,893.72 | 502,873,236.77 | 333,383,264.36 | -140,349,184.69 | |||||||
| i. Total comprehensive income | 462,134,793.77 | 462,134,793.77 | ||||||||||
| ii. Capital contributed or decreased by owner | -443,106.00 | 29,583,893.72 | 502,873,236.77 | -473,732,449.05 | ||||||||
| 1 Ordinary shares contributed by owners | 1,578,199.00 | 15,730,354.61 | 17,308,553.61 | |||||||||
| 2 Capital contributed by owners of other equity instruments | ||||||||||||
| 3 Share based payments recognized as owner’s equity | -2,021,305.00 | 13,853,539.11 | -29,732,395.14 | 41,564,629.25 | ||||||||
| 4 Others | 532,605,631.91 | -532,605,631.91 | ||||||||||
| iii. Profit distribution | -128,751,529.41 | -128,751,529.41 | ||||||||||
| 1 Appropriation of surplus reserves | ||||||||||||
| 2 Distribution to owners (or shareholders) | -128,751,529.41 | -128,751,529.41 |
| 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 | 1,311,043,971.00 | 861,277,099.91 | 599,354,148.06 | 61,347,923.99 | 490,793,238.43 | 2,125,108,085.27 |
Amount of last period
Unit: RMB
| Item | Half-Year of 2020 | |||||||||||
| 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 | 1,308,891,273.00 | 690,241,724.38 | 104,792,649.00 | 53,084,248.58 | 180,966,989.79 | 2,128,391,586.75 | ||||||
| Plus: Alternation to accounting policies | ||||||||||||
| Correction to previous errors | ||||||||||||
| Others | ||||||||||||
| II. Balance at the Beginning of the Year | 1,308,891,273.00 | 690,241,724.38 | 104,792,649.00 | 53,084,248.58 | 180,966,989.79 | 2,128,391,586.75 | ||||||
| III. Changes in the Period (“-” Indicates Decrease) | 1,788,786.00 | 91,049,055.52 | -1,072,825.04 | 15,565,833.02 | 109,476,499.58 | |||||||
| i. Total comprehensive income | 113,511,819.18 | 113,511,819.18 | ||||||||||
| ii. Capital contributed or decreased by owner | 1,788,786.00 | 91,049,055.52 | -1,072,825.04 | 93,910,666.56 | ||||||||
| 1 Ordinary shares contributed by owners | 2,591,508.00 | 19,622,899.06 | 22,214,407.06 | |||||||||
| 2 Capital contributed by owners of other equity instruments | ||||||||||||
| 3 Share based payments recognized as owner’s equity | -802,722.00 | 71,426,156.46 | -28,753,546.80 | 99,376,981.26 | ||||||||
| 4 Others | 27,680,721.76 | -27,680,721.76 | ||||||||||
| iii. Profit distribution | -97,945,986.16 | -97,945,986.16 | ||||||||||
| 1 Appropriation of surplus reserves | ||||||||||||
| 2 Distribution to owners (or shareholders) | -97,945,986.16 | -97,945,986.16 | ||||||||||
| 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 | 1,310,680,059.00 | 781,290,779.90 | 103,719,823.96 | 53,084,248.58 | 196,532,822.81 | 2,237,868,086.33 |
III. Basic Information of the Company
1. Development history of the Company
C&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 itsinitiators. 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.In November 2010, under the approval of the Notice on the Approval of the Initial Public Offering of Shares ofC&S Paper Co., Ltd. (CSRC Xu Ke [2010] No. 1539) issued by China Securities Regulatory Commission, theCompany issued 40,000,000 RMB-denominated ordinary shares (A shares) to the public, each having a par valueof RMB1. The share capital after the public offering was RMB160,000,000.00.On May 22, 2012, the Company held the 2011 Annual General Meeting of Shareholders and approved theProposal on the 2011 Profit Distribution Plan, applying for an increase of registered capital byRMB48,000,000.00. With the base number of 160,000,000.00 total shares as at the end of 2011, the Companyplanned to convert capital reserve into new shares on the basis of three shares for every ten existing shares. Theregistered capital after the change was RMB208,000,000.00.On June 3, 2013, the Company held the 2012 Annual General Meeting of Shareholders and approved the Proposalon the 2012 Profit Distribution Plan, applying for an increase of registered capital by RMB104,000,000.00. Withthe base number of 208,000,000.00 total shares as at the end of 2012, the Company planned to convert capitalreserve into new shares on the basis of five shares for every ten existing shares. The registered capital after thechange was RMB312,000,000.00.On May 8, 2014, the Company held the 2013 Annual General Meeting of Shareholders and approved the Proposalon the 2013 Profit Distribution Plan, applying for an increase of registered capital by RMB93,600,000.00. Withthe base number of 312,000,000.00 total shares as at the end of 2013, the Company planned to convert capitalreserve into new shares on the basis of three shares for every ten existing shares. The registered capital after thechange was RMB405,600,000.00.On May 8, 2015, the Company held the 2014 Annual General Meeting of Shareholders and approved the Proposalon the 2014 Profit Distribution Plan, applying for an increase of registered capital by RMB81,120,000.00. Withthe base number of 405,600,000 total shares as at the end of 2014, the Company planned to convert capital reserve
into new shares on the basis of two shares for every ten existing shares. The registered capital after the change wasRMB486,720,000.00.Pursuant to the resolutions of the 7th meeting of the third session of the Board of Directors, the 9th meeting of thethird session of the Board of Directors, the third extraordinary general meeting of 2015 and the 10th meeting ofthe third session of the Board of Directors, the Company planned to grant 17,133,000 restricted RMB-denominated ordinary shares (A shares) to 242 incentive recipients including Liu Jinfeng through privateplacement, with a par value of RMB1 per share and a grant price of RMB4.25 per share. Upon completion,16,957,000 restricted RMB-denominated ordinary shares (A shares) were actually granted to a total of 199incentive recipients with 43 employees withdrawing from the plan. The registered capital after the change wasRMB503,677,000.00.Pursuant to the resolutions of the third extraordinary general meeting of 2015, the 11th meeting of the thirdsession of the Board of Directors and the 9th meeting of the third session of the Board of Supervisors, theCompany planned to grant 1,867,000 restricted RMB-denominated ordinary shares (A shares) to 68 incentiverecipients including Duan Xianglei through private placement, with a par value of RMB1 per share and a grantprice of RMB4.80 per share. Upon completion, 1,847,000 restricted RMB-denominated ordinary shares (A shares)were granted to a total of 54 incentive recipients with 14 employees withdrawing from the plan. The registeredcapital after the change was RMB505,524,000.00.On October 24, 2016, at the 15th meeting of the third session of the Board of Directors, the Proposal on theRepurchase and Deregistration of Partial Restricted Stocks under the Company’s Restricted Stock Incentive Planand Proposal on Changing the Registered Capital and Amending the Articles of Association of the Company werereviewed and approved. Pursuant to the resolution of the meeting of the Board of Directors, the Company appliedfor the repurchase and deregistration of 266,000 restricted stocks. Among them, the repurchase price of restrictedstocks awarded in the first grant was RMB4.25 per share, the repurchase price of reserved restricted stocks wasRMB4.80 per share, and the registered capital after the change was RMB505,258,000.00.On May 10, 2017, the Company held the 2016 Annual General Meeting of Shareholders and approved theProposal on the 2016 Profit Distribution Plan, applying for an increase of registered capital byRMB252,629,000.00. With the base number of 505,258,000 total shares as at the end of 2016, the Companyplanned to convert capital reserve into new shares on the basis of five shares for every ten existing shares. Theregistered capital after the change was RMB757,887,000.00.Pursuant to the resolutions of the 22nd and 24th meeting of the third session of the Board of Directors in 2017, as
some incentive recipients were disqualified to hold incentive stocks after leaving the Company or failing theappraisal, the Company planned to repurchase and deregister the restricted stocks of 35 incentive recipients.Among them, 25 incentive recipients were granted in the first period with 382,462.50 restricted stocks and tenincentive recipients were granted with 39,997.50 reserved restricted stocks. A total of 422,460 shares wererepurchased and deregistered. The registered capital after the reduction was RMB757,464,540.00.On May 8, 2018, the Company held the 2017 Annual General Meeting of Shareholders and approved the Proposalon the 2017 Profit Distribution Plan, applying for an increase of registered capital by RMB530,225,178.00. Withthe base number of 757,464,540 total shares as at the end of 2016, the Company planned to convert capital reserveinto new shares on the basis of seven shares for every ten existing shares. The registered capital after the changewas RMB1,287,689,718.00.Pursuant to the resolution of the 5th meeting of the fourth session of the Board of Directors in 2018, as someincentive recipients were disqualified to hold incentive stocks after leaving the Company or failing the appraisal atthe second unlocking period under the Restricted Stock Incentive Plan, the Company planned to repurchase andderegister the restricted stocks of 46 incentive recipients. Among them, 38 incentive recipients were granted in thefirst period with 985,426 restricted stocks and ten incentive recipients were granted with 11,551 reservedrestricted stocks. A total of 996,977 shares were repurchased and deregistered. The registered capital after thereduction was RMB1,286,692,741.00.Pursuant to the resolutions of the 9th meeting of the fourth session of the Board of Directors and the firstextraordinary general meeting in 2019, the Company planned to grant 21,717,500 restricted RMB-denominatedordinary shares (A shares) to 671 incentive recipients including Dong Ye through private placement, with a parvalue of RMB1 per share. Wherein, 19,675,500 restricted RMB-denominated ordinary shares (A shares) weregranted to a total of 569 incentive recipients at the price of RMB4.33, with 102 employees withdrawing from theplan. The registered capital after the change was RMB1,306,368,241.00.Pursuant to the resolutions of the 12th and 13th meeting of the fourth session of the Board of Directors, as someincentive recipients were disqualified to hold incentive stocks after leaving the Company or failing the appraisal,the Company planned to repurchase and deregister the restricted stocks of 32 incentive recipients. Among them,22 incentive recipients were granted in the first period with 211,803 restricted stocks and ten incentive recipientswere granted with 56,865 reserved restricted stocks. A total of 268,668 shares were repurchased and deregistered.The registered capital after the reduction was RMB1,306,099,573.00.Pursuant to the Proposal on Granting Reserved Stock Options and Restricted Stocks to Incentive Recipients
reviewed and approved at the 16th meeting of the fourth session of the Board of Directors in 2019, the Companyplanned to grant 64 incentive recipients with 3,500,000 restricted stocks with a grant price of RMB7.02 per share.The incentive plan actually granted 46 incentive recipients with 2,791,700 restricted ordinary shares as 18incentive recipients did not subscribe for the restricted stocks due to resignation or voluntary abandonment and 13incentive recipients did not fully pay for the subscribed restricted stocks. The registered capital after the grant wasRMB1,308,891,273.00.The 23rd meeting of the fourth session of the Board of Directors and the second extraordinary general meeting of2020 reviewed and approved the Proposal on the Repurchase and Deregistration of Partial Restricted StocksAwarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan. Pursuantto the proposal, as some incentive recipients were disqualified to hold incentive stocks after leaving the Companyor failing the appraisal or some recipients passed the appraisal but did not attain a full score and hence could notunlock all the stocks, the Company decided to repurchase and deregister total 802,722 restricted shares of 241incentive recipients. The registered capital after the reduction was RMB1,308,088,551.00.The 28th meeting of the fourth session of the Board of Directors and the fifth extraordinary general meeting of2020 reviewed and approved the Proposal on the Repurchase and Deregistration of Partial Reserved RestrictedStocks under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan. Pursuant to the proposal, assome incentive recipients were disqualified to hold incentive stocks after leaving the Company or failing theappraisal or some recipients passed the appraisal but did not attain a full score and hence could not unlock all thestocks, the Company decided to repurchase and deregister total 211,890 restricted shares of 24 incentive recipients.The registered capital after the reduction was RMB1,307,876,661.00.At the 23rd meeting of the fourth session of the Board of Directors, the Proposal on Achieving the ExerciseConditions of the First Exercise Period for Stock Options Awarded in the First Grant under the Company’s 2018Stock Option and Restricted Stock Incentive Plan was reviewed and approved. The proposal agreed that theexercise conditions under the first exercise period for the stock options awarded in the first grant had been met asset out in the 2018 Stock Option and Restricted Stock Incentive Plan (Draft), and the exercise method wasindependent exercise. The number of incentive recipients in conformity with the exercise conditions reached2,522 and the number of stock options that had met exercise conditions was 3,431,505. The exercise period wasfrom June 10, 2020 to February 26, 2021. At the 28th meeting of the fourth session of the Board of Directors, theProposal on Achieving the Exercise Conditions of the First Exercise Period for Reserved Stock Options under theCompany’s 2018 Stock Option and Restricted Stock Incentive Plan was reviewed and approved. The proposal
agreed that the exercise conditions under the first exercise period for the reserved stock options had been met asset out in the 2018 Stock Option and Restricted Stock Incentive Plan (Draft), and the exercise method wasindependent exercise. The number of incentive recipients in conformity with the exercise conditions reached 88and the number of stock options that have met exercise conditions was 640,389. The exercise period was fromNovember 17, 2020 to September 10, 2021. As of December 31, 2020, the incentive recipients who had met theabove exercise conditions have successively begun to exercise their rights, and a total of 3,610,416 shares havebeen subscribed.As at December 31, 2020, the Company has had a registered capital of RMB1,311,487,077.00 and a share capitalof RMB1,311,487,077.00.At the 5th meeting of the fifth session of the Board of Directors and the third meeting of the fifth session of theBoard of Supervisors, the Proposal on Achieving the Exercise Conditions of the Second Exercise Period for StockOptions Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Planwas reviewed and approved. The proposal agreed that the exercise conditions under the second exercise period forthe stock options awarded in the first grant had been met as set out in the 2018 Stock Option and Restricted StockIncentive Plan (Draft), and the exercise method was independent exercise. The number of incentive recipients inconformity with the exercise conditions reached 2,274 and the number of stock options that had met exerciseconditions was 2,948,559. The exercise period was from June 30, 2021 to February 28, 2022. As of December 31,2021, the incentive recipients who had met the above exercise conditions have successively begun to exercisetheir rights, and a total of 1,578,199 shares have been subscribed.The 5th meeting of the fifth session of the Board of Directors and the fourth extraordinary general meeting of2021 reviewed and approved the Proposal on the Repurchase and Deregistration of Partial Restricted StocksAwarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan. At thesecond unlock period for restricted shares awarded in the first grant under the 2018 Stock Option and RestrictedStock Incentive Plan, 35 incentive recipients were disqualified since they left the Company before the unlock,with 1,993,600 restricted shares that had been granted but unlocked; 61 incentive recipients passed the personalappraisal but did not attain a full score and hence could not unlock all the stocks, with 27,705 shares unable to belocked. In June 2021, repurchase and deregistration payments were made to relevant personnel whose sharesneeded to be repurchased and deregistered, and the follow-up repurchase and deregistration procedures andprocedures for changing with the industrial and commercial department are in process.
2. Registered address, form of organization, and headquarters of the CompanyForm 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
3. 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;operation and production of Class II and Class III medical devices.
4. 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).
5. 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 30, 2021.
6. Scope of the consolidation of financial statements
As of June 30, 2021, the Company has 23 subsidiaries which are included in the consolidated scope, as detailed in“Note IX. Equities in Other Entities”. Compared with last year, four subsidiaries have been newly added into theconsolidated scope during the reporting period. For details, see “Note VIII. 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 actualtransactions and events and according to the Accounting Standards for Business Enterprises - Basic Standards
promulgated by the Ministry of Finance (MOF No. 33 Document and No. 76 Revision), the 42 accountingstandards, Guidelines for the Application of the Accounting Standards for Business Enterprises, interpretation tothe accounting standards for business enterprises and other relevant regulations that are successively promulgatedon or after February 15, 2006 (hereinafter collectively referred to as “Accounting Standards for BusinessEnterprises”), and rules set out in No. 15 Preparation and Reporting Rules of Information Disclosure of PublicOffering Companies - General Rules for Financial Statements (2014 Revision) issued by China SecuritiesRegulatory Commission based on actual transactions and events.In accordance with the relevant rules of Accounting Standards for Business Enterprises, the financial accountingof the Company is based on accrual basis. Apart from some financial tools, the accounting measurement of thefinancial statements is based on historical cost method. Provision for impairment of asset is set aside if it isrecognized.
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 madeby the management, please refer to “Note V (44) Significant changes of accounting policies and accountingestimates”.
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, cash
flow, and other relevant information of the Company. In addition, the financial statements of the Company arealso in accordance with disclosure requirements for financial statements and notes in No. 15 Preparation andReporting Rules of Information Disclosure of Public Offering Companies - General Rules for FinancialStatements of the China Securities Regulatory Commission (2014 Revision) in all material aspects
2. Accounting period
The accounting year of the Company is from January 1 to December 31 of each calendar year.
3. Operating cycle
The operating cycle of the Company normally refers to the periods during which the Company purchases assetsfor processing and then gets cash or cash equivalents from the processed items. Normally, the operating cycle of acompany is shorter than a year. The Company sets 12 months as a full operating cycle and uses the 12-monthperiod 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 domesticsubsidiaries operate. Therefore, the Company and its subsidiaries use RMB as the standard currency forbookkeeping. The currency for accounting used in the Company’s financial statements is RMB.
5. Accounting treatment measures of business combinations involving enterprises under common controland business 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 the
combined party.Assets and liabilities that the acquirer gets from the acquiree are calculated and measured at the book values onthe combination date. If there are differences between the book values of the net assets the acquirer receives andthe book values of the combination consideration it pays (or the face values of the issued shares), the differenceswill be used to adjust capital reserves (share premium). Where capital reserves (share premium) are insufficient tooffset, retained earnings shall be adjusted.All direct expenses related to the business combinations paid by the acquirer shall be included in current profitsand losses 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 combinationare 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 acquirerpays, liabilities the acquirer bears, and the fair value of the equity securities issued on the date of combination forthe acquisition 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 beadjusted accordingly. The acquirer’s costs of business combinations and its identifiable net assets obtained frombusiness combinations shall be assessed at the fair values on the acquisition date. If the costs of businesscombinations are higher than the identifiable net assets of the acquiree on the acquisition date, the gap betweenthem shall be confirmed as goodwill. If the costs of business combinations are lower than the fair values of theidentifiable net assets of the acquiree on the acquisition date, the fair values of identifiable assets, liabilities andcontinent liabilities as well as the measurement of combination costs shall be reassessed; if, upon reassessment,
the business combination costs are still lower than the fair values of the identifiable net assets of the acquiree, thedifference shall 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 furtherevidence for the conditions that have already existed on the acquisition date that the economic profits brought bythe deductible temporary differences of the acquiree could be achieved, such differences shall be confirmed asdeferred tax asset. At the same time, the goodwill shall be reduced. Where the goodwill is insufficient to bededucted, the gap between them shall be included in current profits and losses. Apart from the aforementionedsituations, all deductible temporary differences confirmed to be relevant to the business combination shall berecorded in current profits and losses.For business combinations not under common control that are achieved through multiple steps, whether they canbe regarded 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 the
book 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 relevantassets or liabilities of the acquiree (that is, except for the corresponding shares of the changes caused by re-measurement of the net liabilities or net assets of the defined benefit plan by the acquiree, which are accounted bythe equity method, others shall be transferred to the return on investment of the current period).
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 returnby attending 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 entitiescontrolled by the Company.The Company shall reassess whether it controls an investee if facts and circumstances indicate that there arechanges to 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 actualcontrol over the net assets and the decision-making of production and operations of such subsidiaries; accordingly,the Company shall terminate including them in the scope of consolidation from the date it loses the actual control.In terms of subsidiaries already disposed of, the operating results and cash flows before the disposal date havebeen included in the consolidated income statements and the consolidated cash flow statements appropriately; asfor subsidiaries 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 among which the Company absorbs the combined party, the operating results and cash flows of thecombined party from the beginning of the period in which the combination happens to the combination date have
been included in the consolidated income statements and the consolidated cash flow statements appropriately, andthe comparative balance in the consolidated balance sheet shall be 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 identifiablenet assets 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 presentedunder the “minority shareholders’ profits and losses” in the consolidated income statement. If the loss of asubsidiary which is shared by its minority shareholders exceeds the minority shareholders’ share in the openingbalance of the subsidiary, 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 considerationobtained from equity disposal and fair value of the remaining equity, minus the difference between the ParentCompany’s share of the subsidiary’s net assets that is continuously calculated from the acquisition date, shall berecognized as investment income for the reporting period when the loss of control takes place. Accountingprocessing shall be done for the other comprehensive income related to this investment in the subsidiary’s equitiesby adopting the same basis for directly disposing of relevant assets or liabilities of the acquiree during the loss ofcontrol (that is, except for the changes caused by re-measurement of the net liabilities or net assets of the definedbenefit plan by the previous subsidiary, others shall be transferred to the return on investment of the currentperiod). After that, subsequent measurement shall be done for the remaining equity of this part as per relevantprovisions in the Accounting Standards for Business Enterprises No. 2 - Long-term Equity Investment or theAccounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments.See “Note V (22)” or “Note V (10)” 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 oneother transaction; 4) one transaction alone does not seem to be economical, but all those transactions areeconomical when are considered as a whole. If those transactions are package deals, each transaction shall betreated as a transaction that results in loss of control of the subsidiary in accounting processing. However, thedifference between each disposal price before loss of control and the Parent Company’s share of the subsidiary’snet assets corresponding to the disposal investment shall be recognized as other comprehensive income in theconsolidated financial statements and, upon loss of control, transferred to the profit and loss of the currentreporting period.
7. Classification of joint operation arrangements and accounting treatment methods for joint operations:
None
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 theamount of standard currency for accounting at the spot exchange rate or its approximate exchange rate on thetransaction date. However, the business of exchange of foreign currencies or transactions related to the exchange offoreign currencies, foreign currency will be translated into the amount of standard currency for accounting at theexchange rate actually adopted.
(2) Methods for translation of monetary and non-monetary items in foreign currencies
On the balance sheet date, the foreign currency monetary items are translated at the spot exchange rate on thatdate. Exchange difference resulting from the difference between the spot exchange rate on the balance sheet dateand that at the initial recognition or on the previous balance sheet date shall be recognized as the profit and loss ofthe current period.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 accountingafter translation and the original amount of the standard currency for accounting shall be treated as a change infair value (including the change in the exchange rate) and recognized as the profit and loss of the current period orother comprehensive 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. Difference resulting from translation of foreign-currency financialstatements by the above methods shall be recognized as other comprehensive income. Translation of comparativefinancial statements shall be subject 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 financialassets measured 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 current
period. 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 aresolely payments 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 fromamortization or 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 contractcash flows and selling the financial assets, and the characteristics of the contract cash flows of this kind offinancial assets are consistent with the basic lending arrangements. The Company measures this kind of financialassets at fair value through other comprehensive income, but recognizes the impairment losses or gains, exchangeprofit and loss, and interest income calculated by the effective interest method as the profit and loss of the currentperiod.Additionally, the Company designates some non-tradable equity instruments as financial assets at fair valuethrough other comprehensive income. The Company recognizes relevant dividend income from such financialassets as the profit and loss of the current period, and changes in fair value as other comprehensive income. Whensuch financial assets are derecognized, the accumulated gains or losses previously recognized as othercomprehensive income shall be transferred from other comprehensive income to retained earnings and notrecognized as the profit and loss of the 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 fairvalue through profit and loss of the current period. Moreover, at initial recognition, to eliminate or significantlyreduce accounting mismatches, the Company may designate some financial assets as financial assets measured atfair value through profit and loss of the current period.Such financial assets shall be measured at fair value, and changes in fair 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 throughprofit or loss and other financial liabilities. For financial liabilities at fair value through profit and loss of thecurrent period, transaction costs are directly included in profit and loss of the current period. For other types offinancial 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 bemeasured at 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 andloss of the current period.For those that are designated as financial liabilities measured at fair value through profit or loss, the changes infair value resulting from changes in the credit risk of the Company shall be recognized as other comprehensiveincome; besides, when such liabilities are derecognized, the amount of accumulative changes in fair valueresulting from credit risk changes that are recognized as other comprehensive income shall be transferred toretained earnings. Other changes in fair value shall be recognized as the profit and loss of the current period. If thetreatment of the credit risk changes in such financial liabilities by the above methods will result in expansion ofthe accounting mismatch in the profit and loss, the Company shall recognize all gains or losses in such financialliabilities (including the amount subject to the credit risk changes of the Company) as the profit and loss of thecurrent 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 berecognized as 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 to charge the cash flows of the financial assets is terminated; 2) the financial assets have beentransferred, and almost all the risks and rewards of the ownership of the financial assets are transferred to thetransferee; 3) the financial assets have been transferred, and the Company has given up the control over thefinancial assets although it does not transfer or retain almost all the risks and rewards of the ownership of thefinancial assets.If the Company has neither transferred nor retained almost all the risks and rewards of the ownership of thefinancial assets, and the Company does not waive its control of the financial assets, it shall recognize the relevantfinancial assets within the extent of its continuous involvement in the transferred financial assets and recognizethe relevant liabilities. The continuous involvement in the transferred financial assets refers to the level of riskwith which the Company 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 thetransferred financial assets and the difference between the consideration received due to transfer and theaccumulative changes in fair value that is originally recognized as other comprehensive income shall berecognized as the profit and loss of the current period.When partial transfer of financial assets meets the conditions for derecognization, the book value of thetransferred financial assets shall be apportioned to the fair value between the derecognized part and the recognizedpart, and the consideration received due to transfer and the difference between the accumulative changes in fairvalue that is originally recognized as other comprehensive income, which shall be apportioned to the derecognizedpart, and the apportioned book value as mentioned above shall be recognized as the profit and loss of the currentperiod.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 ownershipof the financial assets, it shall not derecognize the financial assets; if the Company neither transfers nor retainsalmost all the risks and rewards of the ownership of the financial assets, it shall judge whether it has retainedcontrol over the assets and conduct accounting processing following the principles described in previousparagraphs.
(4) Derecognition of financial liabilities
If current obligations of the financial liabilities (or some of the liabilities) have been released, the Company shall
derecognize the financial liabilities (or some of the liabilities). Where the Company (borrower) and a lender signan agreement to replace the existing financial liability by way of assumption of new financial liability with theterms of the new financial liability substantially different from those of the existing financial liability, itderecognizes the existing financial liability while recognizing the new financial liability. If the contract terms ofthe existing financial liability are materially changed in whole (or in part), the existing financial liability will bederecognized, and the financial 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 financialliabilities, and this statutory right is currently enforceable, and the Company plans to net the financial assets orsimultaneously realize the financial assets and pay off the financial liabilities, the financial assets and financialliabilities are presented in the balance sheet at the net amount after offsetting each other. Otherwise, financialassets and financial liabilities 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 orderlytransaction between market participants at the measurement date. If there are active markets for a financialinstrument, the Company establishes its fair value by using quotes in the active markets. Quotes in active marketsrefer to prices that are readily available on a regular basis from exchanges, brokers, trade associations, pricingservice institutions, etc., and represent the prices of market transactions that actually occur in a fair trade. If thereis 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 techniquesthat are applicable under current circumstances and supported by sufficient available data and other information,selects the input values that are consistent with the characteristics of the assets or liabilities considered by themarket participants in the transaction of the relevant assets or liabilities, and preferentially uses the relevantobservable inputs. Unobservable input values are used where the relevant observable input values are notavailable or are not practicable.
(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 ofequity instruments are treated as changes in equities, and transaction costs related to equity transactions arededucted from equities. 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, andlease receivables, mainly including notes receivable, accounts receivable, and other receivables. In addition, forsome financial guarantee contracts, impairment reserves are set aside and credit impairment losses are recognizedas 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 bymethods (general method or simplified method) for measuring expected credit loss applicable to them andrecognizes credit impairment 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 sheetdate whether the credit risk of financial assets has increased significantly since the initial recognition. If yes, theCompany 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.The Company considers all reasonable and evidence-based information, including forward-looking information,when assessing expected credit loss;As for financial instruments with low credit risk on the balance sheet date, the Company measures the lossreserves according to the expected credit loss in the future 12 months, assuming that its credit risk has had nosignificant increase since its initial recognition. The Company chooses to measure loss reserves according to the
expected credit loss in the next 12 months or in the entire duration based on whether the credit risk has increasedsignificantly since initial 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 creditrisk of the financial asset has increased significantly. Except for special circumstances, the Company determineswhether credit risk has increased significantly since initial recognition by reasonably assessing the changes in thePD in the entire 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 theexpected credit loss is greater than the book value of its current impairment provisions, the difference isrecognized as an impairment loss; if it is less than the current book value of the impairment provisions, thedifference is recognized as 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 financingcomponent at 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 | 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 AccountingEstimates of Section X.
12. Accounts receivable
For details, please refer to 10. Financial instruments in V. Significant Accounting Policies and AccountingEstimates of 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 AccountingEstimates of 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,processing cost, and other costs. Inventories are priced by the weighted average method during receipt anddelivery.
(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 estimatedcost, estimated selling expenses, and related taxes and fees at the time of completion in daily activities. Whenrecognizing the net realizable value of inventories based on the substantial evidence obtained, the Company alsoconsiders the purpose 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 thenet realizable value is lower than costs, the Company sets aside provisions for inventory impairment. Provisionsfor inventory impairment are set aside based on the difference between the cost of individual inventory item andits net realizable value.After provisions for the inventory impairment are set aside, if the influencing factors in previous write-down ofthe inventory value disappear, causing the net realizable value of the inventory to be higher than its book value, itshall be reversed within the amount of the provisions for inventory impairment that have been set aside andrecognized as 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: None
17. Contract costs: None
18. Assets held for sale
The Company classifies non-current assets or a disposal group as held for sale (including exchange of non-monetary assets with commercial substance, the same below) if their book values are recovered principally
through disposal rather than through continuing use. Specifically, the following conditions shall be metsimultaneously: A certain non-current asset or disposal group can be sold immediately under the currentconditions according to the practice of selling such assets or disposal groups in similar transactions; the Companyhas made a resolution of an offer and obtained the purchase commitment; the sale is expected to be completedwithin one year. Among them, the disposal group refers to a group of assets that are disposed of as a wholethrough sale or other means in a transaction, and the liabilities directly related to these assets that are transferred inthe transaction. If the asset group or the combination of asset groups to which the goodwill (obtained frombusiness combination) has been allocated in accordance with the Accounting Standards for Business EnterprisesNo. 8 -- Impairment of Assets, the disposal group 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 inthe disposal group, and then deducted in proportion from the book value of non-current assets specified in theapplicable Accounting Standards for Business Enterprises No. 42 - Non-Current Assets and Disposal Groups Heldfor Sale and Discontinued Operations (hereinafter referred to as the “Standards for Assets Held for Sale”). If thefair value of the disposal group held for sale on the subsequent balance sheet date increases after deducting theselling expenses, the previously written down amount shall be restored, and reversed within the amount of theasset impairment losses recognized for non-current assets as per the Standards for Assets Held for Sale applicableafter the assets are classified into those held for sale, and the reversed amount shall be recognized as the profit andloss of the current period. Besides, the book value of the reversed amount shall be increased in proportionaccording to the proportion of the book value of the non-current assets specified in the Standards for Assets Heldfor Sale applicable to those except for the goodwill in the disposal group. The book value of the goodwill that hasbeen deducted, and the asset impairment losses recognized before the non-current assets are classified into assetsheld for sale as per the Standards 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 berecognized.When the non-current assets or disposal group no longer meets the conditions for classification into the assets held
for sale, the Company no longer classifies them into the category or removes the non-current assets from thedisposal group held for sale, and measures them at the lower of the following two: (1) in terms of the book valuebefore classification into assets held for sale, for which the measurement standard is the amount after adjustmentaccording to the depreciation, amortization, or impairment that should have been recognized under the assumptionthat they are 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 hascontrol, joint control, or significant influence on the investee. Long-term equity investments where the Companyhas no control, joint control, or significant influence on the investee are accounted as financial assets measured atfair value through profit and loss of the current period. Among them, for those that are non-tradable, the Companymay choose to designate them as the financial assets measured at fair value through other comprehensive incomefor accounting during initial recognition. See “Note V (10)” for their detailed accounting policies.Joint control refers to the common control over a particular arrangement according to relevant agreement, and thatthe 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 andoperating policy decision-making of the investee, but cannot control or, together with other parties, jointly controlthe formulation of these policies.
(1) Determination of investment cost
For long-term equity investments obtained from combination of enterprises under common control, the share ofthe combined party’s owner’s equity in the book value of the consolidated financial statements of the finalcontrolling party which is acquired on the combination date shall be regarded as the initial investment cost forlong-term equity investments. The capital reserves shall be adjusted if there is difference between the initialinvestment cost of long-term equity investment and the cash paid, the transferred non-cash assets, and the bookvalue of the debts assumed; if the capital reserve is insufficient to offset, the retained earnings shall be adjusted. Ifthe equity securities issued are used as the combination consideration, the share of the combined party’s owner’s
equity in the book value of the consolidated financial statements of the final controlling party which is acquired onthe combination date shall be regarded as the initial investment cost for long-term equity investments; the totalbook value of the shares issued shall be the share capital; the capital reserves shall be adjusted if there isdifference between the initial investment cost of long-term equity investments and the total book value of theshares issued; if the capital reserves are insufficient to balance the difference, retained earnings shall be adjusted.For long-term equity investments obtained from combination of enterprises under different control, thecombination costs on the acquisition date shall be used as the initial investment costs of the long-term equityinvestment; the combination costs include the sum of the assets paid by the acquirer, the liabilities incurred orassumed, and the fair value 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 theprofit and 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 bythe Company, 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 fairvalue 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 equityinvestments is lower than the fair value share of the identifiable net assets entitled of the investee at the time ofinvestment, the difference shall be recognized as profit and loss of the current period and the cost of the long-termequity investments shall 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, thebook value of long-term equity investments shall be adjusted and recognized as capital surplus. When confirmingthe share of the investee’s net profit and loss, the Company shall confirm the investee’s net profit after adjustmentbased on 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, andthe return on investment and other comprehensive income shall be recognized accordingly. Where the transactionsare between the Company and the associates and joint ventures, and the assets that are invested or sold do notconstitute business, unrealized internal transaction profits and losses incurred between the Company and theassociates and joint ventures shall be offset with the part attributable to the Company which is calculated on a duepro-rata basis, and the return on investment shall be recognized on this basis. However, unrealized internaltransaction losses incurred between the Company and the investees shall not be offset if they fall under theimpairment losses on assets transferred.When confirming the limit of net loss incurred by the investee, the limit is the extent that the book value of thelong-term equity investments and other long-term equity that substantially constitutes a net investment in theinvestment target is written down to zero. Additionally, if the Company has obligations to assume additionallosses of the investee, provisions are recognized according to the expected obligation, and recognized asinvestment losses for the 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)”.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,writing off or destroying investment property, less its book value and relevant taxes and fees, is recognized asprofit and loss 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 estimateddisposal expense.
(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 financeleasesLeases of assets where substantially all the risks and rewards of ownership have been transferred are classified asfinance leases. Title may or may not eventually be transferred. The fixed asset leased in through finance leasesadopts the same depreciation policy self-owned fixed assets. If it can be reasonably ascertained that the ownershipof the asset leased can be obtained by the expiration of the tenancy, the asset is depreciated over its service life; ifnot, the asset is depreciated over the shorter of the tenancy and the service life of the leased asset.
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, theoriginal 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)”.
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 asan expense 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 interestthat shall be capitalized is determined by multiplying the part of the accumulative asset disbursements in excess ofthe weighted average asset disbursement for the specifically borrowed fund by the capitalization rate of thegeneral borrowing used. The capitalization rate is the weighted average interest rates applicable to the general-purpose borrowings.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 recognizedas profit and loss of the current period.Assets eligible for capitalization refer to assets such as fixed assets, investment real estates and inventories thatcan reach 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
(1) Recognition methods
Under the new lease standards, except for short-term leases and low-value asset leases, the lessee will no longerdistinguish financial leases and operating leases. All leases adopt the same accounting methods, and right-of-useassets and lease liabilities need to be recognized.Right-of-use assets refer to the right of the Company as the lessee to use the leased assets during the term of lease.
(2) Accounting treatment methods
The right-of-use asset is measured at cost at the commencement date. The cost of right-of-use asset comprises: theamount equal to the lease liability at its initial recognition; lease payments made at or before the commencementof the lease, less any lease incentives received; any initial direct costs incurred by the lessee; an estimate of coststo be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it islocated or restoring the underlying asset to the condition required by the terms and conditions of the lease. TheCompany as the lessee recognizes and measures the aforementioned dismantling, restoration and other costs inaccordance with Accounting Standard for Business Enterprises No. 13 - Contingencies. Subsequent adjustmentsare made for any remeasurement of lease liabilities.The straight-line method is used to accrue depreciation. For right-of-use assets, if it is reasonably ascertained thatthe ownership of the asset will be transferred to the lessee at the end of the lease term, then depreciation periodruns to the end of the useful life of the lease asset. If it cannot be reasonably ascertain that the ownership of theasset leased will be transferred to the lessee at the end of the lease term, then depreciation period runs to theearlier of the end of the useful life of the asset or the end of the lease term.Impairment test method and impairment provision method for right-of-use assets are detailed in “Note V (31)”.For short-term leases and low-value asset leases, the Company may choose not to recognize as right-of-use assetsbut as the cost of the related asset or as profit and loss of the current period in accordance with the straight-linemethod or other systematically reasonable methods during each period of the lease.
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 Companyand the cost of the item can be measured reliably. Other costs of intangible assets are recognized as profit and lossof the 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 as
intangible 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 originalvalue less estimated net residual value and the provisions for asset impairment set aside shall be amortized evenlyin stages by straight-line method over their service life. Intangible assets with uncertain service lives are notamortized.The Company reviews the service life and amortization method of intangible asset with finite service life at theend of the reporting period, and a change therein (if any) shall be accounted for as a change in accountingestimates. Additionally, the Company reviews the service life and amortization method of intangible asset withuncertain service life. If there is evidence that the period when it brings economic benefits to the enterprise isforeseeable, its service life shall be estimated and it is amortized according to the amortization policy forintangible assets with finite 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 andloss of 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 Companycan demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if itis to be 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 research
phase or the expenditure on development phase, it shall be recognized as profit and loss of the current periodwhen incurred.
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,whether or 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 andthe present value of the expected future cash flow of the asset. The fair value of asset is determined according tothe price of the sales agreement in fair trade. If there is no sales agreement but an active market for the asset, thefair value is determined according to the price offered by the buyer for the asset. If there is neither sales agreementnor active market for the asset, the fair value of the asset shall be estimated based on the best informationavailable. The disposal costs include legal fees, relevant taxes and fees, as well as handling fees related to thedisposal of asset, and the direct costs incurred to ensure the asset reaches the marketable state. The present valueof the expected future cash flow of an asset shall be determined by the discounted cash at an appropriate discountrate, on the basis of the expected future cash flow generated during the continuous use or final disposal of an asset.Provisions for asset impairment are calculated and recognized on an individual basis. If it is difficult to estimatethe recoverable amount of individual assets, the Company will determine the recoverable amount of the assetgroup on the basis of the asset group to which the asset belongs. Asset group refers to the smallest asset portfoliowhich can independently generate 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 orcombination of 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 assetgroup or a combination of asset groups, and then offset against the book value of assets excluding goodwill in theasset group or 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 periodlonger than one year, including the reporting period and the future periods. Long-term unamortized expenses shallbe amortized based on the straight-line method over the expected benefit period.
33. Contract liabilities
A contract liability is the Group’s obligation to transfer goods or services to a customer for which the Group hasreceived consideration from the customer.Contract assets and liabilities within a single contract should be presented on a net basis. If the net amount is debitbalance, it shall be presented in the item of “contract assets” or “other non-current assets” based on its liquidity. Ifthe net amount is credit balance, it shall be presented in the item of “contract liabilities” or “other non-currentliabilities” based on its liquidity.
34. Employee remuneration
(1) Accounting treatment method for short-term remuneration
Short-term remuneration includes salaries, bonuses, allowances and subsidies, employee welfare, medicalinsurance fees, maternity insurance fees, employment injury insurance fees, housing provident funds, labor unionfees, staff education funds, and non-monetary welfare. The Company shall, within the accounting period when itsemployees provide service, recognize actual short-term remuneration as liabilities which shall be recognized asprofit and loss of the current period or relevant asset costs. Wherein, non-monetary benefits are measured at fairvalue.
(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,or proposes 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 definedcontribution plan are accounted for in accordance with the defined contribution plan; other long-term benefits areaccounted for in accordance with the defined benefit plan.
35. Lease liabilities
(1) Recognition methods
Under the new lease standards, except for short-term leases and low-value asset leases, the lessee will no longerdistinguish financial leases and operating leases. All leases adopt the same accounting methods, and right-of-use
assets and lease liabilities need to be recognized.
(2) Accounting treatment methods
1) The lessee shall calculate the interest expenses of the lease liability in each period of the lease term and includethem in the profit and loss of the current period.
2) For short-term leases and low-value asset leases, the lessee may choose not to recognize as right-of-use assetsbut as the cost of the related asset or as profit and loss of the current period in accordance with the straight-linemethod or other systematically reasonable methods during each period of the lease term;Pursuant to requirements of the new lease standards, the Company recognizes lease liabilities for all leased assetsbased on the present value of the minimum lease payment of future rent payable (except for short-term leases andlow-value asset leases that have been handled with the simplified method), and confirm depreciation andunrecognized financing expenses separately from January 1, 2021. Information of the comparable period is notadjusted.
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 causeeconomic benefits 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 timevalue of money relating to a contingency.A provision is separately recognized as an asset and the recognized compensation amount shall not exceed thebook value 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 thevesting period ends or until the prescribed performance conditions are met, the amount of such fair value shall,based on the best estimate of the number of vested equity instruments, be recognized as the relevant costs orexpenses by straight-line method; if the right can be exercised immediately following the grant, the amount ofsuch fair value shall be recognized as the relevant costs or expenses on the grant date, and the capital reserve shallbe increased accordingly.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 thenumber of estimated vested equity instruments. The impact of the above estimates shall be recognized as therelevant costs or 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 theservice of any other party can be reliably measured, it shall be measured at the fair value of the service of anyother party on the acquisition date; if the fair value of the service of any other party cannot be reliably measured,but the fair value of the equity instruments can be reliably measured, it shall be measured at the fair value of theequity instruments on the acquisition date and included in the relevant costs or expenses, and the shareholders’equity shall be 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, relevantcosts or expenses shall be recognized the grant date, and the liabilities shall be increased accordingly. If the rightmay not be exercised until the vesting period ends or until the specified performance conditions are met, on eachbalance sheet date within the vesting period, the services obtained in the current period shall, based on the bestestimate of the information about the exercisable right, be recognized as the relevant costs or expenses at the fairvalue of the liability 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 revenueThe revenue is recognized when the customers take control of the relevant goods or services 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 therights and obligations of the parties thereto and in connection with the transfer of goods or provision of laborservices; 3) the contract sets out clear payment terms related to the transfer of goods; 4) the contract hascommercial substance, meaning that the performance thereof will change the risk, time distribution or amount ofthe Company’s future cash flow; 5) the Company is very likely to recover the consideration obtained bytransferring goods to customers.On the enforcing date of the contract, the Company identifies all individual performance obligations in thecontract, and apportions the transaction price to each individual performance obligation according to the relativeproportion of the individual selling price of the goods. When determining the transaction price, the Company hasconsidered the impact of such factors including variable consideration, major financing component of the contract,non-cash consideration, and consideration payable to the customer.With respect to each individual performance obligation of the contract, the Company will recognize thetransaction price apportioned to such obligation as revenue based on the progress of performance during therelevant performance periods, if any of the following conditions is met: 1) the customer obtains and consumes theeconomic benefits brought by the Company’s performance during such performance; 2) the customer can controlthe goods in progress during the Company’s performance; 3) the goods produced from the Company’sperformance has irreplaceable use, and in respect of the portion of revenue arising from the Company’sperformance completed to date, the Company is entitled to collect revenue during the entire validity period of thecontract. The progress of performance is determined according to the nature of the transferred goods using theinput or output method. When such progress cannot be reasonably determined, if the costs incurred are expectedto be compensated, the Company recognizes revenue based on the amount of costs incurred, until the progress ofperformance can be reasonably determined.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 whether
the customer has obtained the control over goods, the Company takes into account the following indications: 1)the enterprise has the present right to collection for the goods, meaning the customer bears the present obligationto payment for the goods; 2) the enterprise has passed the legal title to the goods to the customer, meaning thecustomer has had the legal title to the goods; 3) the enterprise has transferred the physical possession of the goodsto the customer, meaning the customer has had the physical possession of the goods; 4) the enterprise hastransferred the major risks and remunerations concerning the title to the goods to the customer, meaning thecustomer has obtained the major risks and remunerations concerning the title to the goods; 5) the customer hasaccepted the goods; 6) other indications 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 notexceed the amount of cumulatively recognized revenue that is unlikely to have major reversals when the relevantuncertainties are eliminated.Situations where different business models are adopted for different businesses, which may lead to the differencesin the accounting policy 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 toincome. The Company defines the government grants for purchasing or constructing or otherwise forming long-term assets as asset-related government grants; other government grants are defined as the income-relatedgovernment grants. Government grants shall be measured at the amount received or receivable if they aremonetary assets. Non-monetary government grants shall be measured at fair value; if the fair value cannot bereliably obtained, they shall be measured at the nominal amount. The government grants measured at the nominalamount shall be directly recognized 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
current period in stages according to a reasonable and systematic method over the service life of the relevantassets. The income-related government grants shall be recognized as deferred income if they are used tocompensate relevant expenses or losses in subsequent periods, and shall be recognized as profit and loss of thecurrent period during the recognition of related expenses; the grants used to compensate related expenses or lossesalready incurred shall be directly 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;if it 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 dailyactivities 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 ofthe current period; otherwise, government grants shall be directly recognized as profit and loss of the currentperiod.
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 andprior periods 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 recognitionof an 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 incometax liability shall not be recognized. Additionally, in respect of taxable temporary difference associated withinvestments in subsidiaries, joint ventures and associates, where the Company can control the timing of thereversal of the temporary differences and it is probable that the temporary differences will not be reversed in theforeseeable future, the relevant deferred income tax liability shall not be recognized. Other than the aboveexceptions, the Company shall recognize deferred income tax liabilities arising out from all other taxabletemporary differences.Where the deductible temporary differences arise from the initial recognition of an asset or liability arising fromthe transaction that is not a business combination, nor, at the time of the transaction, affects neither accountingprofit and 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, jointventures and associates, where it is probable that the temporary differences will not be reversed in the foreseeablefuture or taxable profit will not be available against which the deductible temporary differences can be utilized inthe future, the relevant deferred income tax liability shall not be recognized. Other than the above exceptions, theCompany recognizes a deferred tax asset for other deductible temporary differences, to the extent that it isprobable that future taxable profit will be available against which the deductible temporary differences can beutilized.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 beavailable.
(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
current period except that the current income tax and deferred income tax is related to transactions or events,which are recognized as other comprehensive income or directly recognized as shareholders’ equity, and thusrecognized as other comprehensive income or shareholders’ equity, and that the book value of goodwill is adjusteddue to deferred income tax arising from business combination.
42. Leases
(1) Accounting treatment method for operating lease
1) Assets rented through operating lease
Under the new lease standards, except for short-term leases and low-value asset leases, the lessee will no longerdistinguish financial leases and operating leases. All leases adopt the same accounting methods, and right-of-useassets and lease liabilities need to be recognized.For right-of-use assets, if it is reasonably ascertained that the ownership of the asset will be transferred to thelessee at the end of the lease term, then depreciation period runs to the end of the useful life of the lease asset. If itcannot be reasonably ascertained that the ownership of the leased asset will be transferred to the lessee at the endof the lease term, then depreciation period runs to the earlier of the end of the useful life of the asset or the end ofthe lease term. Meanwhile, the lessee needs to determine whether the right-of-use asset is impaired and accountfor the identified impairment loss.For short-term leases and low-value asset leases, the Company may choose not to recognize as right-of-use assetsbut as the cost of the related asset or as profit and loss of the current period in accordance with the straight-linemethod or other systematically reasonable methods during each period of the lease.
2) Assets leased out through operating lease
Lease payments collected by the Company for leasing out assets are amortized on a straight-line basis during theentire lease term without deducting the rent-free period and recognized as lease income. The initial direct costspaid by the Company relevant to the lease transaction shall be included in the current expenses; if the amount islarge, it shall be capitalized, and recognized as profit and loss of the current period on the same basis as therecognized lease income over the lease term.For lease-related expenses that should be borne by the lessee but borne by the Company instead, the Companyshould deduct them from the total rental income, and the amount after deduction is allocated within the lease term.
(2) Accounting treatment method for finance lease
1) Assets rented through finance lease
The Company takes the lower of the fair value of the rented asset and the present value of the minimum leasepayments as the entry value of the rented asset, the minimum lease payments as the entry value of the long-termpayable, and the difference as unrecognized financing cost.For details on the determination basis, pricing method and depreciation method of assets rented through financeleases, please refer to “Note V (24)”.The Company uses the effective interest method to amortize unrecognized financing cost during the lease term ofthe asset and include them in finance expenses.
2) Assets leased out through finance lease
The Company recognizes the difference between the sum of financing lease receivable and unguaranteed residualvalue and their present value as unrealized financing income on the lease start date, and recognizes as leaseincome during each period when the rent is received in the future. Initial direct costs incurred to the Companyrelevant to the lease transaction are included in the initial measurement of the financing lease receivable, and theamount of revenue recognized during the lease period is reduced at the same time.
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 |
| On December 12, 2018, the Ministry of Finance issued the revised Accounting Standards for Business Enterprises No. 21 -- Leases (C.K. [2018] No. 35) (hereinafter referred to as the “New Lease Standards”), requiring that enterprises listed both within the borders and abroad as well as enterprises listed abroad and adopting IFRS or Accounting Standards for Business Enterprises to prepare financial statements should implement these revised Standards from January 1, 2019; other enterprises listed within China shall implement these revised Standards from | On May 21, 2021, the Company convened the 5th meeting of the fifth session of the Board of Directors and the 3rd 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 (Announcement No.: 2021-76) dated May 22, 2021 on CNINFO (http://www.cninfo.com.cn) . |
(2) Significant changes of accounting estimates
□ Applicable √ Not applicable
(3) Description on the adjustment of relevant items in the financial statements at the beginning of the yearfor the first time adoption of the new leasing standards since 2021ApplicableWhether to adjust the subjects of the balance sheet at the beginning of the year
√ Yes □ No
Consolidated balance sheet
Unit: RMB
January 1, 2021.Item
| Item | December 31, 2020 | January 01, 2021 | Adjustment number |
| Current assets: | |||
| Monetary funds | 1,125,196,199.56 | 1,125,196,199.56 | |
| Settlement reserve | |||
| Lending to banks and other financial institutions | |||
| Tradable financial assets | |||
| Derivative financial assets | |||
| Notes receivable | 724,419.74 | 724,419.74 | |
| Accounts receivable | 1,051,423,939.59 | 1,051,423,939.59 | |
| Accounts receivable financing | |||
| Prepayments | 26,819,108.57 | 26,819,108.57 | |
| Premium receivable | |||
| Reinsurance payables | |||
| Reinsurance contract reserves receivable | |||
| Other receivables | 15,824,945.56 | 15,824,945.56 | |
| Including: Interest receivable | |||
| Dividends receivable | |||
| Financial assets held under resale agreements | |||
| Inventory | 1,661,274,495.32 | 1,661,274,495.32 | |
| Contract assets | |||
| Assets held for sale | 57,073,059.69 | 57,073,059.69 | |
| Non-current assets due |
| within one year | |||
| Other current assets | 101,584,569.30 | 101,584,569.30 | |
| Total current assets | 4,039,920,737.33 | 4,039,920,737.33 | |
| 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 | 34,575,365.94 | 34,575,365.94 | |
| Fixed assets | 2,792,587,302.21 | 2,792,587,302.21 | |
| Construction work in progress | 275,904,617.95 | 275,904,617.95 | |
| Productive biological assets | |||
| Oil & gas assets | |||
| Right-of-use assets | 10,611,654.31 | 10,611,654.31 | |
| Intangible assets | 169,355,772.24 | 169,355,772.24 | |
| Development expenses | |||
| Goodwill | 64,654.15 | 64,654.15 | |
| Long-term deferred expenses | 26,635,983.14 | 26,635,983.14 | |
| Deferred income tax assets | 111,367,362.66 | 111,367,362.66 | |
| Other non-current assets | 28,027,952.15 | 28,027,952.15 | |
| Total non-current assets | 3,438,519,010.44 | 3,449,130,664.75 | 10,611,654.31 |
| Total assets | 7,478,439,747.77 | 7,489,051,402.08 | 10,611,654.31 |
| Current liabilities: | |||
| Short-term borrowings | 142,942,941.34 | 142,942,941.34 | |
| Borrowings from PBC | |||
| Placements from banks and other financial institutions | |||
| Tradable financial liabilities | |||
| Derivative financial liabilities | |||
| Notes payable | 234,887,563.22 | 234,887,563.22 |
| Accounts payable | 761,519,389.26 | 761,519,389.26 | |
| Payments received in advance | |||
| Contract liabilities | 137,333,617.40 | 137,333,617.40 | |
| 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 | 123,524,627.11 | 123,524,627.11 | |
| Tax and fees payable | 112,608,054.87 | 112,608,054.87 | |
| Other payables | 754,844,580.09 | 754,844,580.09 | |
| Including: Interests payable | |||
| Dividends payable | 1,437,466.77 | 1,437,466.77 | |
| Transaction fee and commission receivable | |||
| Reinsurance payable | |||
| Liabilities held for sale | |||
| Non-current liabilities due within one year | 3,472,854.73 | 3,472,854.73 | |
| Other current liabilities | 17,628,086.63 | 17,628,086.63 | |
| Total current liabilities | 2,285,288,859.92 | 2,288,761,714.65 | 3,472,854.73 |
| Non-current liabilities: | |||
| Insurance contract reserves | |||
| Long-term borrowings | |||
| Bonds payable | |||
| Including: Preference shares | |||
| Perpetual bonds | |||
| Lease liabilities | 7,138,799.58 | 7,138,799.58 | |
| Long-term payable | |||
| Long-term employee remuneration payable | |||
| Provision | |||
| Deferred income | 115,101,158.13 | 115,101,158.13 | |
| Deferred income tax liabilities | 35,903,653.30 | 35,903,653.30 |
| Other non-current liabilities | |||
| Total non-current liabilities | 151,004,811.43 | 158,143,611.01 | 7,138,799.58 |
| Total liabilities | 2,436,293,671.35 | 2,446,905,325.66 | 10,611,654.31 |
| Owner’s equity: | |||
| Share capital | 1,311,487,077.00 | 1,311,487,077.00 | |
| Other equity instruments | |||
| Including: Preference shares | |||
| Perpetual bonds | |||
| Capital reserve | 907,006,505.05 | 907,006,505.05 | |
| Less: Treasury shares | 96,480,911.29 | 96,480,911.29 | |
| Other comprehensive income | |||
| Special reserves | |||
| Surplus reserves | 61,469,258.27 | 61,469,258.27 | |
| General reserves | |||
| Retained earnings | 2,858,664,147.39 | 2,858,664,147.39 | |
| Total equity attributable to owners of the parent company | 5,042,146,076.42 | 5,042,146,076.42 | |
| Equities of minority shareholders | |||
| Total owner’s equity | 5,042,146,076.42 | 5,042,146,076.42 | |
| Total liabilities and owners’ equities | 7,478,439,747.77 | 7,489,051,402.08 | 10,611,654.31 |
Explanation of adjustmentThe Company started to adopt the New Lease Standards from January 1, 2021.Balance sheet of the Parent Company
Unit: RMB
| Item | December 31, 2020 | January 01, 2021 | Adjustment number |
| Current assets: | |||
| Monetary funds | 170,229,178.13 | 170,229,178.13 | |
| Tradable financial assets | |||
| Derivative financial assets | |||
| Notes receivable | |||
| Accounts receivable | 92,647,372.33 | 92,647,372.33 | |
| Accounts receivable financing | |||
| Prepayments | 7,940,396.34 | 7,940,396.34 | |
| Other receivables | 136,987,584.64 | 136,987,584.64 |
| Including: Interest receivable | |||
| Dividends receivable | |||
| Inventory | 156,605,546.36 | 156,605,546.36 | |
| Contract assets | |||
| Assets held for sale | |||
| Non-current assets due within one year | |||
| Other current assets | 52,517,725.87 | 52,517,725.87 | |
| Total current assets | 616,927,803.67 | 616,927,803.67 | |
| Non-current assets: | |||
| Investments in creditor’s rights | |||
| Investments in other creditor’s rights | |||
| Long-term receivable | |||
| Long-term equity investment | 1,928,113,219.50 | 1,928,113,219.50 | |
| Investment in other equity instruments | |||
| Other non-current financial assets | |||
| Investment property | 17,939,329.51 | 17,939,329.51 | |
| Fixed assets | 257,354,688.59 | 257,354,688.59 | |
| Construction work in progress | |||
| Productive biological assets | |||
| Oil & gas assets | |||
| Right-of-use assets | 2,649,675.09 | 2,649,675.09 | |
| Intangible assets | 25,205,232.21 | 25,205,232.21 | |
| Development expenses | |||
| Goodwill | |||
| Long-term deferred expenses | |||
| Deferred income tax assets | 46,811,106.77 | 46,811,106.77 | |
| Other non-current assets | 2,619,959.27 | 2,619,959.27 | |
| Total non-current assets | 2,278,043,535.85 | 2,280,693,210.94 | 2,649,675.09 |
| Total assets | 2,894,971,339.52 | 2,897,621,014.61 | 2,649,675.09 |
| Current liabilities: | |||
| Short-term borrowings | |||
| Tradable financial liabilities | |||
| Derivative financial |
| liabilities | |||
| Notes payable | |||
| Accounts payable | 420,061,168.44 | 420,061,168.44 | |
| Payments received in advance | |||
| Contract liabilities | 17,388,431.01 | 17,388,431.01 | |
| Employee remuneration payable | 44,678,713.21 | 44,678,713.21 | |
| Tax and fees payable | 5,995,417.05 | 5,995,417.05 | |
| Other payables | 126,072,040.24 | 126,072,040.24 | |
| Including: Interests payable | |||
| Dividends payable | 1,437,466.77 | 1,437,466.77 | |
| Liabilities held for sale | |||
| Non-current liabilities due within one year | 967,707.49 | 967,707.49 | |
| Other current liabilities | 2,260,496.03 | 2,260,496.03 | |
| Total current liabilities | 616,456,265.98 | 617,423,973.47 | 967,707.49 |
| Non-current liabilities: | |||
| Long-term borrowings | |||
| Bonds payable | |||
| Including: Preference shares | |||
| Perpetual bonds | |||
| Lease liabilities | 1,681,967.60 | 1,681,967.60 | |
| Long-term payable | |||
| Long-term employee remuneration payable | |||
| Provision | |||
| Deferred income | 5,855,467.25 | 5,855,467.25 | |
| Deferred income tax liabilities | 7,202,336.33 | 7,202,336.33 | |
| Other non-current liabilities | |||
| Total non-current liabilities | 13,057,803.58 | 14,739,771.18 | 1,681,967.60 |
| Total liabilities | 629,514,069.56 | 632,163,744.65 | 2,649,675.09 |
| Owner’s equity: | |||
| Share capital | 1,311,487,077.00 | 1,311,487,077.00 | |
| Other equity instruments | |||
| Including: Preference shares | |||
| Perpetual bonds |
| Capital reserve | 831,693,206.19 | 831,693,206.19 | |
| Less: Treasury shares | 96,480,911.29 | 96,480,911.29 | |
| Other comprehensive income | |||
| Special reserves | |||
| Surplus reserves | 61,347,923.99 | 61,347,923.99 | |
| Retained earnings | 157,409,974.07 | 157,409,974.07 | |
| Total owner’s equity | 2,265,457,269.96 | 2,265,457,269.96 | |
| Total liabilities and owners’ equities | 2,894,971,339.52 | 2,897,621,014.61 | 2,649,675.09 |
Explanation of adjustmentThe Company started to adopt the New Lease Standards from January 1, 2021.
(4) Description on the retrospective adjustment of previous comparable data at the first time adoption ofthe new leasing standards in 2021
□ 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% |
| 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., Xiaogan C&S Trading 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., Shanghai Huicong Paper Co., Ltd., Yunfu Hengtai Trading Co., Ltd., C&S (Dazhou) Paper Co., Ltd., Dolemi Sanitary Products Co., Ltd., | 25% |
| C&S (Jiangsu) Paper Co., Ltd., Yunnan Dolemi Trading Co., Ltd., Luzhou Dolemi Sanitary Products Co., Ltd., and Mianyang Dolemi Sanitary Products Co., Ltd. | |
| C&S (Zhongshan) Paper 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
Jiangmen Zhongshun Paper Co., Ltd. was certified as a high-tech enterprise of Guangdong Province in 2018, andwas awarded the Certificate of High-tech Enterprise (No. GR201844008474) on November 28, 2018, with a validterm of three years. Therefore, the corporate income tax is calculated at a tax rate of 15% during the reportingperiod.C&S (Sichuan) Paper Co., Ltd. was certified as a high-tech enterprise of Sichuan Province in 2020, and wasawarded the Certificate of High-tech Enterprise (No. GR202051001193) on September 11, 2020, with a validterm of three years. Therefore, the corporate income tax is calculated at a tax rate of 15% during the reportingperiod.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) on December 9, 2020, with a valid termof three years. Therefore, the corporate income tax is calculated at a tax rate of 15% during the reporting period.Pursuant to relevant provisions of the Announcement of the State Administration of Taxation and the Ministry ofFinance on the Implementation of Preferential Income Tax Policies for Small and Micro Enterprises andIndividual Industrial and Commercial Households (MOF and SAT Doc. No. 2021 [012]) and the Announcementof the State Administration of Taxation on Issues Concerning the Implementation of Inclusive Income TaxReduction and Exemption Policies for Small and Low-profit Enterprises (SAT Doc. No. 2019 [002]), C&S(Zhongshan) Paper Co., Ltd. is entitled to the inclusive income tax reduction and exemption policy for small andlow-profit enterprises in 2021. Specifically, if the annual taxable income does not exceed RMB1 million, thetaxable income is calculated at a reduced rate of 12.5% with a corporate income tax rate of 20%; if the annualtaxable income is over RMB1 million but less than RMB3 million, the taxable income is calculated at a reducedrate of 50% while the corporate income tax rate is levied at 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,and the taxable income that is more than MOP300,000 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 | 56,626.99 | 36,349.55 |
| Bank deposits | 694,226,698.05 | 1,047,785,634.71 |
| Other monetary funds | 94,418,811.95 | 77,374,215.30 |
| Total | 788,702,136.99 | 1,125,196,199.56 |
| Including: Total deposits in overseas banks | 30,091,357.87 | 99,311,423.25 |
Other descriptionBalance of other monetary funds at the end of the reporting period is the security deposit for issuing letters ofcredit and bank acceptance bill and balance of Alipay. Refer to “Note VII (81)” for circumstances whereownership of monetary funds is restricted.
2. Transactional 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 | 190,080.00 | 724,419.74 |
| Trade acceptance bill | 1,323,062.38 | 0.00 |
| Total | 1,513,142.38 | 724,419.74 |
Provision of bad debt reserve by portfolio: NoneProvision of bad debt reserve by portfolio: NoneProvision of bad debt reserve by portfolioDescription of reason for the portfolio:
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: None
(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 andare not 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 descriptions:
(1) The Company has no pledged notes receivable as at June 30, 2021.
(2) The Company has no derecognized notes receivable that are endorsed or discounted but not due as at June30, 2021.
(3) The Company has no notes that are transferred to notes receivable because the drawer does not performthe contract as at June 30, 2021.
(6) Notes receivable actually written off in the reporting period: None
5. Accounts receivable
(1) Accounts receivable disclosure by category
Unit: RMB
| Type | Balance at the end of the year | Balance at the beginning of the year | ||||||||
| 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 aside individually | 34,324,676.68 | 3.54% | 10,681,068.59 | 31.12% | 23,643,608.09 | 34,567,651.21 | 3.17% | 10,681,068.59 | 30.90% | 23,886,582.62 |
| Including: | ||||||||||
| Accounts receivable for which bad debt reserve is set aside in portfolios | 935,319,040.34 | 96.46% | 25,649,510.45 | 2.74% | 909,669,529.89 | 1,054,953,298.93 | 96.83% | 27,415,941.96 | 2.60% | 1,027,537,356.97 |
| Including: | ||||||||||
| Portfolio based on aging | 935,319,040.34 | 96.46% | 25,649,510.45 | 2.74% | 909,669,529.89 | 1,054,953,298.93 | 96.83% | 27,415,941.96 | 2.60% | 1,027,537,356.97 |
| Total | 969,643,717.02 | 100.00% | 36,330,579.04 | 3.75% | 933,313,137.98 | 1,089,520,950.14 | 100.00% | 38,097,010.55 | 3.50% | 1,051,423,939.59 |
Bad debt reserve set aside individually: 10,681,068.59
Unit: RMB
| Name | Balance at the end of the period | |||
| Book balance | Impairment provision | Ratio of provision | Reason for provision | |
| Institution 1 | 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. |
| Institution 2 | 28,208,040.02 | 8,218,072.46 | 29.13% | It is difficult to recover all goods payments due to the poor business performance of the customer. |
| Total | 34,324,676.68 | 10,681,068.59 | -- | -- |
Bad debt reserve set aside in portfolios: 25,649,510.45
Unit: RMB
| Name | Balance at the end of the period | ||
| Book balance | Impairment provision | Ratio of provision | |
| Within the credit period | 760,706,754.96 | 15,214,135.10 | 2.00% |
| Credit period - 1 year | 168,688,133.48 | 8,434,406.67 | 5.00% |
| Subtotal of those within 1 year | 929,394,888.44 | 23,648,541.77 | 2.54% |
| 1 to 2 years | 563,198.16 | 84,479.72 | 15.00% |
| 2 to 3 years | 4,732,949.69 | 1,419,884.91 | 30.00% |
| Over 3 years | 628,004.05 | 496,604.05 | 79.08% |
| Total | 935,319,040.34 | 25,649,510.45 | -- |
Description of reason for the portfolio: Accounts receivable with the same aging have similar credit riskcharacteristics.Provision of bad debt reserve by portfolio: NoneDescription 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 the disclosure method of other receivables to disclose relevant information on bad debt reserve:
□ Applicable √ Not applicable
Disclose by aging
Unit: RMB
| Aging | Balance at the end of the period |
| Within 1 year (inclusive) | 929,394,888.44 |
| 1 to 2 years | 563,198.16 |
| 2 to 3 years | 4,732,949.69 |
| Over 3 years | 34,952,680.73 |
| 3 to 4 years | 14,481,101.38 |
| 4 to 5 years | 13,989,738.64 |
| Over 5 years | 6,481,840.71 |
| Total | 969,643,717.02 |
(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
| 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 | |||
| Accounts receivable | 38,097,010.55 | -1,766,431.51 | 36,330,579.04 | |||
| Total | 38,097,010.55 | -1,766,431.51 | 36,330,579.04 | |||
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 | 240,902,755.98 | 24.84% | 4,819,486.05 |
| 2nd | 101,975,148.19 | 10.52% | 3,063,592.00 |
| 3rd | 54,259,924.13 | 5.60% | 1,325,376.26 |
| 4th | 31,518,078.02 | 3.25% | 972,258.60 |
| 5th | 28,969,449.44 | 2.99% | 1,184,244.29 |
| Total | 457,625,355.76 | 47.20% |
(5) 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
(6) 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.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
Other description: None
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 | 12,804,377.00 | 99.76% | 26,819,108.57 | 100.00% |
| 1 to 2 years | 30,210.00 | 0.24% | ||
| Total | 12,834,587.00 | -- | 26,819,108.57 | -- |
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
RMB8,196,395.68, accounting for 63.86% of closing balance of prepayment.Other description: None
8. Other receivables
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Other receivables | 21,117,810.56 | 15,824,945.56 |
| Total | 21,117,810.56 | 15,824,945.56 |
(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 |
| Margins and deposits | 4,398,979.17 | 4,621,457.93 |
| Current accounts | 5,255,892.23 | 5,350,546.55 |
| Reserve | 1,778,041.01 | 1,704,120.13 |
| Others | 12,000,234.22 | 5,999,332.44 |
| Total | 23,433,146.63 | 17,675,457.05 |
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 | 1,850,511.49 | 1,850,511.49 | ||
| Balance as at January 1, 2021 in the reporting period | —— | —— | —— | —— |
| Provision in the reporting period | 464,824.58 | 464,824.58 | ||
| Balance as at June 30, 2021 | 2,315,336.07 | 2,315,336.07 |
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) | 19,339,617.17 |
| 1 to 2 years | 852,567.91 |
| 2 to 3 years | 2,110,636.86 |
| Over 3 years | 1,130,324.69 |
| 3 to 4 years | 1,058,637.44 |
| 4 to 5 years | 27,454.05 |
| Over 5 years | 44,233.20 |
| Total | 23,433,146.63 |
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 | 1,850,511.49 | 464,824.58 | 2,315,336.07 | |||
| Total | 1,850,511.49 | 464,824.58 | 2,315,336.07 | |||
Where the amount of recovered or reversed bad debt reserve in the reporting period is important: None
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 | Others | 9,460,860.30 | Within 1 year | 40.37% | 473,043.02 |
| 2nd | Margins and deposits | 1,100,000.00 | 2-3 years | 4.69% | 330,000.00 |
| 3rd | Margins and deposits | 600,000.00 | 2-3 years | 2.56% | 180,000.00 |
| 4th | Margins and deposits | 600,000.00 | 3-4 years | 2.56% | 300,000.00 |
| 5th | Margins and deposits | 560,000.00 | Within 1 year, 1-2 years, 2- 3 years, 3-4 years | 2.39% | 162,500.00 |
| Total | -- | 12,320,860.30 | -- | 52.57% | 1,445,543.02 |
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 | 1,070,227,399.23 | 185,609.86 | 1,070,041,789.37 | 1,148,312,808.05 | 133,039.11 | 1,148,179,768.94 |
| Work-in-process products | 49,416,644.06 | 422,448.32 | 48,994,195.74 | 40,777,441.76 | 306,847.08 | 40,470,594.68 |
| Commodity | 435,922,026.80 | 2,524,005.70 | 433,398,021.10 | 410,313,722.29 | 2,738,280.52 | 407,575,441.77 |
| stocks | ||||||
| Packages | 33,282,071.36 | 284,363.42 | 32,997,707.94 | 32,644,525.84 | 145,489.07 | 32,499,036.77 |
| Low-value consumables | 23,001,401.72 | 617,506.21 | 22,383,895.51 | 13,889,922.62 | 529,767.94 | 13,360,154.68 |
| Materials for consigned processing | 16,493,835.16 | 0.00 | 16,493,835.16 | 19,189,498.48 | 19,189,498.48 | |
| Total | 1,628,343,378.33 | 4,033,933.51 | 1,624,309,444.82 | 1,665,127,919.04 | 3,853,423.72 | 1,661,274,495.32 |
(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 | 133,039.11 | 208,273.26 | 155,702.51 | 185,609.86 | ||
| Work-in-process products | 306,847.08 | 288,779.68 | 173,178.44 | 422,448.32 | ||
| Commodity stocks | 2,738,280.52 | 997,462.20 | 1,211,737.02 | 2,524,005.70 | ||
| Packages | 145,489.07 | 210,502.25 | 71,627.90 | 284,363.42 | ||
| Low-value consumables | 529,767.94 | 313,992.36 | 226,254.09 | 617,506.21 | ||
| Total | 3,853,423.72 | 2,019,009.75 | 1,838,499.96 | 4,033,933.51 | ||
(3) Explanation that balance of inventory at the end of the reporting period includes amount ofcapitalization of borrowing costs: None
(4) Explanation on amortized amount of contract performance cost in the reporting period: None
10. Contract assets
If the bad debt reserve of contrast assets 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
Provision for impairment of contract assets in the reporting period: None
11. Assets held for sale
Unit: RMB
| Item | Book balance at the end of the period | Impairment provision | Book value at the end of the period | Fair value | Estimated disposal fee | Estimated disposal time |
| Immovable assets of the old factory | 57,073,059.69 | 57,073,059.69 | 66,285,118.00 | December 31, 2021 |
| of Hubei C&S (including land use rights) | ||||||
| Total | 57,073,059.69 | 57,073,059.69 | 66,285,118.00 | -- |
Other description:
In December 2019, in order to boost the investment and construction of Phase II of the high-end household paperproject in the industrial zone in the Economic Development Area of Xiaonan District, Xiaogan City, the Companysigned an agreement on the acquisition of the immovable assets in the old factory of Hubei C&S (including landuse rights) upon consultation with Xiaonan District People’s Government of Xiaogan City. The Company believedthat the immovable assets of the old factory of Hubei C&S (including land use rights) could be sold immediatelyin the current situation, according to similar transactions where such assets were sold. The Company signed abinding purchase agreement with Xiaogan Changxing Investment Co., Ltd. and Xiaonan District People’sGovernment of Xiaogan City regarding the transfer of such assets in December 2019. The Agreement containedimportant terms and conditions including the price and time of the transaction as well as penalty for breach ofcontract that was strict enough. Therefore, there is little possibility for the agreement to be significantly changedor canceled. The Company originally estimated that the ultimate transfer would be completed before December2020. However, under the impact of the Covid-19 pandemic in 2020, the government shifted its focus to anti-pandemic work with people’s interests above everything else. Especially, Xiaogan City of Hubei Province was oneof the hardest-hit areas, so the government has put all efforts in the fight against the virus and post-pandemiceconomic rejuvenation. As a result, it was unable to pay all asset transfer amount within the agreed period. TheCompany has received most of the asset transfer payment as of the reporting date (RMB58.14 million).
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 |
| Wealth management products | 50,000,000.00 | |
| Input VAT to be deducted | 33,611,344.77 | 51,550,834.13 |
| Prepaid corporate income tax | 1,054,891.79 | 33,735.17 |
| Total | 34,666,236.56 | 101,584,569.30 |
Other description: None
14. Investments in creditor’s rights
Description of changes in the book balance where there are significant changes in provision for the current period
□ Applicable √ Not applicable
Other description: None
15. Other investments in creditor’s rights
Description of changes in the book balance where there are significant changes in provision for the current period
□ Applicable √ Not applicable
Other description: None
16. Long-term receivables
(1) Long-term receivables
Description of changes in the book balance where there are significant changes in provision for the current period
□ Applicable √ Not applicable
(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 | 12,995,477.31 | 5,162,920.96 | 18,158,398.27 | |
| 2. Increase in the current period | 486,421.32 | 232,020.78 | 718,442.10 | |
| (1) Provision or amortization | 486,421.32 | 232,020.78 | 718,442.10 | |
| 3. Decrease in the current period | ||||
| (1) Disposal | ||||
| (2) Other transfers out | ||||
| 4. Balance at the end of the period | 13,481,898.63 | 5,394,941.74 | 18,876,840.37 | |
| 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 | ||||
| (2) Other transfers out | ||||
| 4. Balance at the end of the period | ||||
| IV. Book Value | ||||
| 1. Book value at the end of the period | 17,590,734.29 | 16,266,189.55 | 33,856,923.84 | |
| 2. Book value at the | 18,077,155.61 | 16,498,210.33 | 34,575,365.94 |
(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 30,2021.
21. Fixed assets
Unit: RMB
beginning of the period
Item
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Fixed assets | 3,182,792,165.52 | 2,792,587,302.21 |
| Total | 3,182,792,165.52 | 2,792,587,302.21 |
(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 | 1,120,022,374.29 | 3,014,753,086.43 | 54,682,544.73 | 17,187,070.95 | 79,292,109.05 | 4,285,937,185.45 |
| 2. Increase in the current period | 212,097,885.51 | 330,616,989.41 | 3,206,098.62 | 2,207,607.08 | 14,719,985.94 | 562,848,566.56 |
| (1) Purchase | 207,340.70 | 2,356,163.74 | 2,207,607.08 | 5,605,888.51 | 10,377,000.03 | |
| (2) Inventory\fixed assets\transfer from construction work in progress | 212,097,885.51 | 330,409,648.71 | 849,934.88 | 9,114,097.43 | 552,471,566.53 | |
| (3) Increase in business combination | ||||||
| 3. Decrease in the current period | 6,500.00 | 24,662,638.49 | 151,431.82 | 498,872.65 | 25,319,442.96 | |
| (1) Disposal | 6,500.00 | 24,662,638.49 | 151,431.82 | 498,872.65 | 25,319,442.96 |
| or scrap | ||||||
| 4. Balance at the end of the period | 1,332,113,759.80 | 3,320,707,437.35 | 57,737,211.53 | 19,394,678.03 | 93,513,222.34 | 4,823,466,309.05 |
| II. Accumulated Depreciation | ||||||
| 1. Balance at the beginning of the period | 230,627,030.94 | 1,170,141,702.77 | 26,023,963.29 | 8,459,387.08 | 41,628,743.42 | 1,476,880,827.50 |
| 2. Increase in the current period | 23,017,434.76 | 128,699,060.47 | 4,229,425.08 | 833,983.50 | 5,604,732.32 | 162,384,636.13 |
| (1) Provision | 23,017,434.76 | 128,699,060.47 | 4,229,425.08 | 833,983.50 | 5,604,732.32 | 162,384,636.13 |
| 3. Decrease in the current period | 5,850.00 | 11,822,474.99 | 132,384.81 | 310,523.79 | 12,271,233.59 | |
| (1) Disposal or scrap | 5,850.00 | 11,822,474.99 | 132,384.81 | 310,523.79 | 12,271,233.59 | |
| 4. Balance at the end of the period | 253,638,615.70 | 1,287,018,288.25 | 30,121,003.56 | 9,293,370.58 | 46,922,951.95 | 1,626,994,230.04 |
| III. Impairment Provision | ||||||
| 1. Balance at the beginning of the period | 16,415,970.27 | 1,219.51 | 51,865.96 | 16,469,055.74 | ||
| 2. Increase in the current period | 2,285,297.81 | 2,285,297.81 | ||||
| (1) Provision | 2,285,297.81 | 2,285,297.81 | ||||
| 3. Decrease in the current period | 5,021,354.59 | 1,219.51 | 51,865.96 | 5,074,440.06 | ||
| (1) Disposal or scrap | 5,021,354.59 | 1,219.51 | 51,865.96 | 5,074,440.06 | ||
| 4. Balance at the end of the period | 13,679,913.49 | 13,679,913.49 | ||||
| IV. Book Value | ||||||
| 1. Book value at the end of the period | 1,078,475,144.10 | 2,020,009,235.61 | 27,616,207.97 | 10,101,307.45 | 46,590,270.39 | 3,182,792,165.52 |
| 2. Book value at the beginning of the period | 889,395,343.35 | 1,828,195,413.39 | 28,657,361.93 | 8,727,683.87 | 37,611,499.67 | 2,792,587,302.21 |
(2) Information on temporarily idle fixed assets
Unit: RMB
| Item | Original book value | Accumulated depreciation | Impairment provision | Book value | Remarks |
| Equipment | 25,446,420.81 | 10,971,916.85 | 13,679,913.49 | 794,590.47 | |
| Total | 25,446,420.81 | 10,971,916.85 | 13,679,913.49 | 794,590.47 |
(3) Fixed assets leased through operating
Unit: RMB
| Item | Book value at the end of the period |
| Machinery and equipment leased out through operating lease | 574,633.12 |
| Total | 574,633.12 |
(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 |
| Workshops of Zhejiang C&S | 3,680,024.54 | Processing |
| Plants and warehouses of Tangshan Branch | 46,484,957.02 | Processing |
| Workshops, warehouses, dormitories and boilers of Hubei C&S Phase II project | 155,491,394.59 | Processing |
| Warehouse of Yunfu C&S | 21,164,864.85 | Processing |
| Total | 226,821,241.00 |
Other description: There was no limitation on the ownership of fixed assets of the Company at the end of thereporting period.
(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 | 55,534,528.69 | 275,904,617.95 |
| Total | 55,534,528.69 | 275,904,617.95 |
(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 | 443,396.21 | 443,396.21 | ||||
| Construction work of Jiangmen C&S | 5,431,119.88 | 5,431,119.88 | 1,028,646.43 | 1,028,646.43 | ||
| Construction work of Zhejiang C&S | 5,309,309.84 | 5,309,309.84 | 249,608.17 | 249,608.17 | ||
| Construction work of Sichuan C&S | 5,760,144.05 | 5,760,144.05 | ||||
| Construction work of Tangshan Branch | 100,858.68 | 100,858.68 | ||||
| Construction work of Hubei C&S | 38,447,658.15 | 38,447,658.15 | 244,523,934.15 | 244,523,934.15 | ||
| Construction work of Yunfu C&S | 5,271,603.86 | 5,271,603.86 | 24,342,285.15 | 24,342,285.15 | ||
| Construction work of Jiangsu C&S | 530,582.07 | 530,582.07 | ||||
| Total | 55,534,528.69 | 55,534,528.69 | 275,904,617.95 | 275,904,617.95 | ||
(2) Changes of significant construction work in progress in the current period
Unit: RMB
| Item | Budget number | Balance at the beginning of the year | 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 year | 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 | 470,000.00 | 443,396.21 | 443,396.21 | 95.00% | 95.00% | Others | ||||||
| Construction | 22,376,5 | 1,028,64 | 20,641,8 | 16,239,3 | 5,431,11 | 96.84% | 96.84% | Others |
| work of Jiangmen C&S | 05.11 | 6.43 | 13.10 | 39.65 | 9.88 | |||||||
| Construction work of Zhejiang C&S | 10,980,543.94 | 249,608.17 | 10,040,725.49 | 4,981,023.82 | 5,309,309.84 | 93.71% | 93.71% | Others | ||||
| Construction work of Sichuan C&S | 13,386,563.41 | 5,760,144.05 | 6,086,372.24 | 11,846,516.29 | 100.00% | 100.00% | Others | |||||
| Construction work of Tangshan Branch | 306,200,000.00 | 3,122,520.35 | 3,021,661.67 | 100,858.68 | 19.80% | 19.80% | Others | |||||
| Construction work of Hubei C&S | 1,353,000,000.00 | 244,523,934.15 | 273,668,529.01 | 479,744,805.01 | 38,447,658.15 | 94.24% | 94.24% | Others | ||||
| Construction work of Yunfu C&S | 60,035,157.05 | 24,342,285.15 | 17,567,538.80 | 36,638,220.09 | 5,271,603.86 | 85.59% | 85.59% | Others | ||||
| Construction work of Jiangsu C&S | 695,600,000.00 | 530,582.07 | 530,582.07 | 0.08% | 0.08% | Others | ||||||
| Total | 2,462,048,769.51 | 275,904,617.95 | 332,101,477.27 | 552,471,566.53 | 55,534,528.69 | -- | -- | -- |
(3) Construction-in-progress provision set aside in the current period
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 | Housing | Total |
| I. Original Book Value | - | |
| 1. Balance at the beginning of the period | 10,611,654.31 | 10,611,654.31 |
| 2. Increase in the current period | 2,720,964.20 | 2,720,964.20 |
| 3. Decrease in the current period | - | |
| 4. Balance at the end of the period | 13,332,618.51 | 13,332,618.51 |
| II. Accumulated Depreciation | - | |
| 1. Balance at the beginning of the period | - | |
| 2. Increase in the current period | 2,181,245.94 | 2,181,245.94 |
| (1) Provision | 2,181,245.94 | 2,181,245.94 |
| 3. Decrease in the current period | - | |
| (1) Disposal | - | |
| 4. Balance at the end of the period | 2,181,245.94 | 2,181,245.94 |
| IV. Book Value | - | |
| 1. Book value at the end of the period | 11,151,372.57 | 11,151,372.57 |
| 2. Book value at the beginning of the period | 10,611,654.31 | 10,611,654.31 |
Other description: None
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 | 189,064,322.15 | 1,342,721.84 | 18,819,434.67 | 168,370.83 | 209,394,849.49 | |
| 2. Increase in the current | 208,301.89 | 2,961,517.07 | 3,169,818.96 |
| period | ||||||
| (1) Purchase | 208,301.89 | 2,961,517.07 | 3,169,818.96 | |||
| (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 | 189,064,322.15 | 1,551,023.73 | 21,780,951.74 | 168,370.83 | 212,564,668.45 | |
| II. Accumulated Amortization | ||||||
| 1. Balance at the beginning of the period | 29,450,960.14 | 885,237.05 | 9,534,509.23 | 168,370.83 | 40,039,077.25 | |
| 2. Increase in the current period | 1,898,651.76 | 52,125.56 | 1,375,371.84 | 3,326,149.16 | ||
| (1) Provision | 1,898,651.76 | 52,125.56 | 1,375,371.84 | 3,326,149.16 | ||
| 3. Decrease in the current period | ||||||
| (1) Disposal | ||||||
| 4. Balance at the end of the period | 31,349,611.90 | 937,362.61 | 10,909,881.07 | 168,370.83 | 43,365,226.41 | |
| 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 | 157,714,710.25 | 613,661.12 | 10,871,070.67 | 169,199,442.04 | ||
| 2. Book value at the beginning of the period | 159,613,362.01 | 457,484.79 | 9,284,925.44 | 169,355,772.24 |
The intangible assets generated other than internal R&D of the Company at the end of the period occupy 0.00% ofthe balance of intangible 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 | ||||
| Total | 64,654.15 | 64,654.15 | ||||
(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, profit
rate, 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, 2021, and provisions at the end of the reporting period were not set aside.Influence of the goodwill impairment testOther description: None
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 | 2,308,598.93 | 692,579.70 | 1,616,019.23 | ||
| Decoration fees of office buildings | 22,365,634.21 | 996,330.31 | 4,847,261.22 | 18,514,703.30 | |
| Electricity use rights | 1,961,750.00 | 855,750.00 | 252,700.00 | 2,564,800.00 | |
| Total | 26,635,983.14 | 1,852,080.31 | 5,792,540.92 | 22,695,522.53 |
Other description: None
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 | 37,974,366.81 | 8,317,385.82 | 37,236,661.77 | 8,048,641.53 |
| Unrealized profit in internal transaction | 57,005,616.36 | 11,349,710.74 | 59,038,241.84 | 11,427,908.55 |
| Deductible loss | 189,732,725.24 | 47,433,181.31 | 157,221,067.56 | 39,305,266.89 |
| Accrued expenses | 60,267,582.48 | 15,066,895.62 | 60,267,582.48 | 15,066,895.62 |
| Provision for impairment of fixed assets | 13,679,913.49 | 2,339,937.78 | 16,469,055.74 | 2,795,038.08 |
| Provision for impairment of inventories | 4,033,933.51 | 723,165.58 | 3,853,423.72 | 702,165.91 |
| Equity incentive cost | 212,634,286.41 | 51,669,774.75 | 136,647,479.87 | 33,312,991.30 |
| Deferred income | 33,105,520.64 | 8,276,380.16 | 2,833,819.12 | 708,454.78 |
| Total | 608,433,944.94 | 145,176,431.76 | 473,567,332.10 | 111,367,362.66 |
(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 | 242,603,626.84 | 47,103,893.91 | 190,069,258.27 | 35,903,653.30 |
| Total | 242,603,626.84 | 47,103,893.91 | 190,069,258.27 | 35,903,653.30 |
(3) Presentation of deferred income tax assets or liabilities by the net amount after offset
Unit: RMB
| Item | Offset amount of the deferred income tax assets and liabilities at the end of the reporting period | Balance of the deferred income tax assets or liabilities after offset at the end of the reporting period | Offset amount of the deferred income tax assets and liabilities at the beginning of the reporting period | Balance of the deferred income tax assets or liabilities after offset at the beginning of the reporting period |
| Deferred income tax assets | 145,176,431.76 | 111,367,362.66 | ||
| Deferred income tax liabilities | 47,103,893.91 | 35,903,653.30 |
(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 | 671,548.30 | 2,710,860.27 |
| Total | 671,548.30 | 2,710,860.27 |
(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 software | 1,192,660.18 | 1,192,660.18 | 2,027,042.24 | 2,027,042.24 | ||
| Prepayment for engineering equipment | 43,741,845.66 | 43,741,845.66 | 26,000,909.91 | 26,000,909.91 | ||
| Total | 44,934,505.84 | 44,934,505.84 | 28,027,952.15 | 28,027,952.15 | ||
Other description: None
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 | 142,942,941.34 | |
| Total | 142,942,941.34 |
Description of classification of short-term borrowings: None
(2) Short-term borrowings overdue but unpaid
Other description: There were no short-term borrowings overdue but unpaid in the Company at the end of thereporting 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 | 289,707,176.43 | 234,887,563.22 |
| Total | 289,707,176.43 | 234,887,563.22 |
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 | 723,033,087.39 | 761,519,389.26 |
| Total | 723,033,087.39 | 761,519,389.26 |
(2) Significant accounts payable with aging over one year
Other description: The Company has no significant accounts payable with aging over one year at the end of thereporting 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
The Company has no significant payments received in advance with aging over one year at the end of thereporting period.
38. Contract liabilities
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Advances on sales | 103,501,369.49 | 137,333,617.40 |
| Total | 103,501,369.49 | 137,333,617.40 |
Amount with significant changes in book value during the reporting period and reason: None
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 | 123,506,119.43 | 397,444,239.77 | 409,820,099.96 | 111,130,259.24 |
| II. Post-employment Benefits - Defined Contribution Plan | 18,507.68 | 25,494,529.67 | 25,142,907.14 | 370,130.21 |
| III. Dismissal Benefits | 156,259.98 | 156,259.98 | ||
| Total | 123,524,627.11 | 423,095,029.42 | 435,119,267.08 | 111,500,389.45 |
(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 | 122,595,782.24 | 361,113,483.15 | 375,743,596.02 | 107,965,669.37 |
| 2. Employee welfare | 13,078,772.04 | 11,949,297.53 | 1,129,474.51 | |
| 3. Social insurance premiums | 252,766.51 | 12,926,746.92 | 12,344,203.08 | 835,310.35 |
| Including: Medical | 250,105.53 | 10,975,075.83 | 10,409,117.65 | 816,063.71 |
| insurance | ||||
| Employment injury insurance | 167.06 | 1,142,952.97 | 1,125,343.83 | 17,776.20 |
| Maternity insurance | 2,493.92 | 808,718.12 | 809,741.60 | 1,470.44 |
| 4. Housing provident fund | 374,311.00 | 8,527,072.24 | 8,542,073.24 | 359,310.00 |
| 5. Labor union fee and staff education fee | 283,259.68 | 1,798,165.42 | 1,240,930.09 | 840,495.01 |
| Total | 123,506,119.43 | 397,444,239.77 | 409,820,099.96 | 111,130,259.24 |
(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 | 17,927.54 | 24,671,585.74 | 24,331,167.43 | 358,345.85 |
| 2. Unemployment insurance | 580.14 | 822,943.93 | 811,739.71 | 11,784.36 |
| Total | 18,507.68 | 25,494,529.67 | 25,142,907.14 | 370,130.21 |
Other description: There was no delinquency of employee remuneration payable in the Company at the end of thereporting 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 | 29,179,356.47 | 25,574,167.63 |
| Corporate income tax | 36,669,532.30 | 79,266,423.94 |
| Individual income tax | 2,196,145.64 | 1,840,329.83 |
| City construction and maintenance tax | 1,837,733.39 | 1,593,768.94 |
| Property tax | 3,958,770.37 | 1,087,129.90 |
| Education surcharges | 877,842.66 | 829,794.94 |
| Local education surcharges | 585,228.48 | 524,068.91 |
| Land use tax | 821,151.63 | 796,430.89 |
| Stamp tax | 692,502.21 | 596,629.80 |
| Security fund for the disabled | 680,567.93 | 334,989.76 |
| Environmental protection tax | 132,841.63 | 97,465.13 |
| Resource tax | 66,031.66 | 66,855.20 |
| Total | 77,697,704.37 | 112,608,054.87 |
Other description: None
41. Other payables
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Dividend payable | 1,594,446.41 | 1,437,466.77 |
| Other payables | 794,796,554.04 | 753,407,113.32 |
| Total | 796,391,000.45 | 754,844,580.09 |
(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 | 1,594,446.41 | 1,437,466.77 |
| Total | 1,594,446.41 | 1,437,466.77 |
Other descriptions, including important dividends payable exceeding one year, and the reasons for non-paymentthat should be disclosed: 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 |
| Margins and deposits | 22,073,998.74 | 20,964,424.40 |
| Unpaid fees | 731,510,591.33 | 658,391,225.24 |
| Others | 2,144,169.58 | 2,373,791.75 |
| Repurchase obligation of restricted shares | 39,067,794.39 | 68,800,189.53 |
| Authorized collection and payment of individual income tax under the equity incentive | 2,877,482.40 | |
| Total | 794,796,554.04 | 753,407,113.32 |
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 | -- |
Other description: None
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 | 6,038,594.62 | 3,472,854.73 |
| Total | 6,038,594.62 | 3,472,854.73 |
Other description: None
44. Other current liabilities
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Tax pending changeover | 13,400,882.00 | 17,628,086.63 |
| Total | 13,400,882.00 | 17,628,086.63 |
Changes in short-term bonds payable: None
45. Long-term borrowings
(1) List of long-term borrowings
Description of classification of long-term borrowings: NoneOther descriptions, including the interval of interest rate: None
46. Bonds payable
(1) Bonds payable: None
(2) Changes in the increase and decrease of the bonds payable (excluding other financial instruments suchas preference shares and perpetual bonds that are divided into financial liabilities): None
(3) Descriptions of the conditions for converting conditions and time of converting bonds: None
(4) Descriptions of other financial instruments that are divided into financial liabilities: NoneBasic information on other financial instruments in issue at the end of the reporting period, such as the preferenceshares and perpetual bonds: None
Table of changes in other financial instruments in issue at the end of the reporting period, such as the preferenceshares and perpetual bonds: None
47. Lease liabilities
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Housing rent | 5,526,106.56 | 7,138,799.58 |
| Total | 5,526,106.56 | 7,138,799.58 |
Other description: None
48. Long-term payables: None
(1) Long-term payables listed based on amount nature: None
(2) Special payables: None
49. Long-term employee remuneration payable
(1) Table of long-term employee remuneration payable: None
(2) Changes of the defined benefit plan
Description of content and associated risk of defined benefit plan and the impact on the Company’s future cashflow, time and uncertainty: NoneDescription of major actuarial assumptions and sensitivity analysis results of defined benefit plan: NoneOther description: None
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 | 115,101,158.13 | 4,000,000.00 | 7,008,167.50 | 112,092,990.63 | Government grants related to assets |
| Total | 115,101,158.13 | 4,000,000.00 | 7,008,167.50 | 112,092,990.63 | -- |
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 |
| Support funds for sewage centralized water treatment project | 972,000.00 | 60,750.00 | 911,250.00 | Related to asset | ||||
| Ex-post funds awarded to the first batch of the union enterprises for technical transformation in 2017 | 4,081,579.34 | 317,293.32 | 3,764,286.02 | Related to asset | ||||
| Support funds for the technical transformation of equipment production line | 3,640,736.00 | 403,311.72 | 3,237,424.28 | Related to asset | ||||
| Support funds for enterprise technical upgrading | 3,219,688.10 | 396,187.14 | 2,823,500.96 | Related to asset | ||||
| Subsidies for the infrastructure construction of new factory in Hubei | 30,535,934.00 | 535,718.16 | 30,000,215.84 | Related to asset | ||||
| Provincial funds for traditional industry transformation projects | 910,714.30 | 53,571.42 | 857,142.88 | Related to asset | ||||
| Subsidies for the expansion of the high-grade household paper project with an annual output of 25,000 tons | 1,906,666.83 | 79,999.98 | 1,826,666.85 | Related to asset | ||||
| Discount interest funds for imported | 2,439,593.75 | 96,937.50 | 2,342,656.25 | Related to asset |
| equipment | ||||||||
| Financial support funds for construction expansion of 25,000-ton high-grade household paper project | 7,453,253.75 | 312,723.90 | 7,140,529.85 | Related to asset | ||||
| Subsidies for construction of the water treatment project | 1,369,861.36 | 77,539.32 | 1,292,322.04 | Related to asset | ||||
| Subsidies for sewage treatment station | 2,664,772.67 | 238,636.38 | 2,426,136.29 | Related to asset | ||||
| Special funds for capacity expansion of 25,000-ton high-grade household paper project | 1,820,833.22 | 287,500.02 | 1,533,333.20 | Related to asset | ||||
| Support funds for the construction of environmental protection facilities | 3,032,539.79 | 159,523.80 | 2,873,015.99 | Related to asset | ||||
| Support funds for equipment of Phase II project | 9,467,571.00 | 985,624.08 | 8,481,946.92 | Related to asset | ||||
| Support funds for the transformation of Phase I project | 16,172,657.65 | 1,125,711.24 | 15,046,946.41 | Related to asset | ||||
| Support funds for the construction of Automated Storage & Retrieval System | 21,188,970.58 | 780,882.36 | 20,408,088.22 | Related to asset | ||||
| Funds for reconstruction project of automatic production lines | 1,389,966.67 | 510,600.00 | 879,366.67 | Related to asset | ||||
| Subsidy funds for the smart factory project | 2,833,819.12 | 4,000,000.00 | 585,657.16 | 6,248,161.96 | Related to asset | |||
| Total | 115,101,158.13 | 4,000,000.00 | 7,008,167.50 | 112,092,990.63 |
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 additional shares | Bonus shares | Shares transferred from surplus reserve | Others | Subtotal | |||
| Total number of shares | 1,311,487,077.00 | 1,578,199.00 | -2,021,305.00 | -443,106.00 | 1,311,043,971.00 | ||
Other description: For details about changes in the Company’s share capital in the reporting period, please refer to“1. Development history of the Company in III. Basic Information of the Company of Section X” for details.
54. Other equity instruments
(1) Basic information on other financial instruments in issue at the end of the reporting period, such as thepreference shares and perpetual bonds: None
(2) Table of changes in other financial instruments in issue at the end of the reporting period, such as thepreference shares and perpetual bondsDescription of increase/decrease of other equity instruments in the reporting period, reasons of change, andaccounting basis: NoneOther description: 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) | 626,797,181.97 | 15,730,354.61 | 6,730,945.65 | 635,796,590.93 |
| Other capital reserve | 280,209,323.08 | 28,643,935.91 | 3,024,288.84 | 305,828,970.15 |
| Total | 907,006,505.05 | 44,374,290.52 | 9,755,234.49 | 941,625,561.08 |
Other descriptions, including increase/decrease in the reporting period and reasons of change:
(1) 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” byRMB15,730,354.61 and decreased “capital reserve-other capital reserve” by RMB3,024,288.84. The repurchaseand deregistration of incentive stocks decreased “capital reserve-other capital reserve” by RMB6,730,945.65.
(2) The Company set aside provision for equity incentive costs and fees in the reporting period andRMB12,167,835.66 was included in “capital reserve - other capital reserve”. Difference between the deductibleamount before tax under the 2018 Stock Option and Restricted Stock Incentive Plan and recognized book expensewas confirmed as deferred income tax asset and RMB16,476,100.25 was included in “capital reserve - othercapital reserve”.
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 | 68,800,189.53 | 1,352,409.36 | 31,084,804.50 | 39,067,794.39 |
| Ordinary shares | 27,680,721.76 | 532,605,631.91 | 560,286,353.67 | |
| Total | 96,480,911.29 | 533,958,041.27 | 31,084,804.50 | 599,354,148.06 |
Other descriptions, including increase/decrease in the reporting period and reasons of change:
Notes: (1) The second unlock period unlocked 4,809,045 shares of first-grant stock options at RMB4.33/sharegranted under the 2018 Stock Option and Restricted Stock Incentive Plan. Totally RMB20,823,164.85 wasincluded in the decrease of the current period. As some incentive recipients for stocks awarded in the first grantleft the Company or failed to pass the appraisal, the Company repurchased and deregistered 2,021,305 shares withRMB4.33 per share and a total amount of RMB8,752,250.65, which was included in the decrease of the currentperiod. Cash dividends waiting to be issued to holders of restricted shares can be withdrawn. For holders ofrestricted shares that are expected to be unlocked in the future, RMB1,509,389.00 was included in the decrease ofthe current period.
(2) A cash dividend of RMB400,218.39 was withdrawn for shares originally held by repurchase and deregistrationrecipients and therefore included in the increase of the current period; a cash dividend of RMB952,190.97 forshares unlocked in the second unlock period was included in the increase of the current period.
(3) The Company has carried out share repurchase with a special securities repurchase account via centralizedbidding, with a total transaction amount of RMB532,605,631.91.
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 | 61,469,258.27 | 61,469,258.27 | ||
| Total | 61,469,258.27 | 61,469,258.27 |
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 | 2,858,664,147.39 | 2,058,968,835.80 |
| Retained earnings at the beginning of the period after adjustment | 2,858,664,147.39 | 2,058,968,835.80 |
| Plus: Net profit attributable to owners of the parent company of the current period | 407,161,317.15 | 452,699,484.61 |
| Dividends on ordinary shares payable | 128,751,529.41 | 97,945,986.16 |
| Retained earnings at the end of the period | 3,137,073,935.13 | 2,413,722,334.25 |
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 theperiod was 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 | 4,123,177,610.49 | 2,462,562,811.28 | 3,600,704,841.94 | 1,918,216,266.98 |
| Other businesses | 124,464,225.89 | 99,681,354.93 | 15,496,557.86 | 13,190,651.18 |
| Total | 4,247,641,836.38 | 2,562,244,166.21 | 3,616,201,399.80 | 1,931,406,918.16 |
Information related to income:
Unit: RMB
| Contract classification | Branch 1 | Branch 2 | Total | |
| By product type | 4,247,641,836.38 | 4,247,641,836.38 | ||
| Including: | ||||
| Household paper | 4,082,881,792.19 | 4,082,881,792.19 | ||
| Personal care | 40,295,818.30 | 40,295,818.30 | ||
| Others | 124,464,225.89 | 124,464,225.89 | ||
| By operating region | 4,247,641,836.38 | 4,247,641,836.38 | ||
| Including: | ||||
| Domestic | 4,149,892,689.00 | 4,149,892,689.00 | ||
| Abroad | 97,749,147.38 | 97,749,147.38 | ||
| Including: | ||||
| Including: | ||||
| Including: | ||||
| Including: | ||||
| Including: | ||||
| Total | 4,247,641,836.38 | 4,247,641,836.38 |
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 isnot performed or fully performed at the end of the reporting period is RMB10,852,118.31, of which the income ofRMB10,852,118.31 is expected to be confirmed as income in the year of 2021.Other description: None
62. Tax and surcharges
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| City construction and maintenance tax | 10,406,083.91 | 9,361,201.41 |
| Education surcharges | 4,922,998.46 | 4,706,053.57 |
| Resource tax | 55,344.16 | |
| Property tax | 5,361,355.73 | 4,767,707.05 |
| Land use tax | 1,364,954.29 | 1,746,360.26 |
| Vehicle and vessel tax | 9,030.00 | 12,360.00 |
| Stamp tax | 3,544,054.89 | 3,007,283.02 |
| Local education surcharges | 3,281,999.30 | 3,137,369.06 |
| Environmental protection tax | 305,183.69 | 181,672.99 |
| Total | 29,251,004.43 | 26,920,007.36 |
Other description: None
63. Selling expenses
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Employee remuneration | 188,440,219.32 | 134,986,732.37 |
| Advertising expenses | 136,856,089.50 | 74,270,803.62 |
| Product promotion fees | 486,488,574.50 | 411,196,541.39 |
| Shopping mall management fees | 42,603,638.54 | 48,753,624.04 |
| Transportation expenses | 44,766,089.36 | 165,690,045.64 |
| Traveling expenses | 9,543,610.64 | 4,940,998.20 |
| Business entertainment expenses | 899,984.09 | 436,080.12 |
| Rental fees | 4,279,089.03 | 3,183,544.55 |
| Others | 1,601,356.74 | 4,612,712.67 |
| Total | 915,478,651.72 | 848,071,082.60 |
Other description: None
64. Administrative expenses
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Employee remuneration | 74,061,162.35 | 70,379,157.38 |
| Equity incentive cost | 12,167,835.66 | 52,983,211.08 |
| Depreciation and amortization fees | 34,639,880.19 | 31,544,768.00 |
| Office allowance | 12,660,998.77 | 10,475,476.21 |
| Consulting service fees | 8,688,604.92 | 4,773,171.55 |
| Outsourcing warehouse management fees | 8,791,106.82 | 5,349,303.92 |
| Business entertainment expenses | 2,582,730.40 | 1,580,927.02 |
| Traveling expenses | 950,329.72 | 393,381.65 |
| Environmental protection fees | 1,244,274.84 | 1,251,298.69 |
| Rental fees | 3,679,190.64 | 1,475,930.22 |
| Others | 5,733,964.07 | 5,495,228.29 |
| Total | 165,200,078.38 | 185,701,854.01 |
Other description: None
65. R&D expenses
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Employee remuneration | 18,956,073.80 | 17,174,899.12 |
| Direct investment | 62,873,043.34 | 59,534,214.24 |
| Depreciation and amortization fees | 13,685,779.13 | 12,202,630.08 |
| Others | 1,899,916.05 | 1,949,084.80 |
| Total | 97,414,812.32 | 90,860,828.24 |
Other description: None
66. Finance expenses
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Interest fees | 975,546.01 | 1,140,788.29 |
| Less: Interest income | 6,623,270.61 | 4,060,998.02 |
| Exchange profit and loss | 1,346,250.22 | -993,705.23 |
| Plus: Transaction fee | 2,498,330.34 | 2,891,912.73 |
| Total | -1,803,144.04 | -1,022,002.23 |
Other description: None
67. Other income
Unit: RMB
| Sources of other income | Incurred in the current period | Incurred in the prior period |
| Refund of individual income tax | 1,137,762.21 | 696,845.15 |
| Support funds for the transformation of Phase I project | 1,125,711.24 | 224,780.22 |
| Subsidies for R&D, famous-brand and high-quality products, and income/efficiency increase | 1,020,000.00 | |
| Support funds for equipment of Phase II project | 985,624.08 | 985,624.08 |
| Support funds for the construction of Automated Storage & Retrieval System | 780,882.36 | 192,647.06 |
| Support funds for technical upgrading project 2020 | 700,000.00 | |
| Subsidy funds for the smart factory project | 585,657.16 |
| Subsidies for the infrastructure construction of new factory in Hubei | 535,718.16 | 535,718.16 |
| Funds for reconstruction project of automatic production lines | 510,600.00 | |
| Subsidies for internship, employment, job stabilization and training | 489,780.86 | |
| VAT exemption for employment of retired soldiers and poor population | 411,700.00 | 438,350.00 |
| Support funds for the technical transformation of equipment production line | 403,311.72 | 403,311.72 |
| Provincial support funds for enterprise technical upgrading | 396,187.14 | 264,124.76 |
| Ex-post funds awarded to the first batch of the union enterprises for the technical transformation in 2017 | 317,293.32 | 317,293.32 |
| Financial support funds for construction expansion of 25,000-ton high-grade household paper project | 312,723.90 | 312,723.90 |
| Special funds for capacity expansion of 25,000-ton high-grade household paper project | 287,500.02 | 287,500.02 |
| Technical demonstration fee for water intake points | 280,000.00 | |
| Subsidies for sewage treatment station | 238,636.38 | 238,636.38 |
| Special award funds for the restructuring of industrial enterprises | 210,900.00 | |
| Support funds for the construction of environmental protection facilities | 159,523.80 | 159,523.80 |
| Tax contribution reward | 100,000.00 | |
| Subsidies for job creation for the poor | 97,995.00 | |
| Discount interest funds for imported equipment | 96,937.50 | 96,937.50 |
| Subsidies for the expansion of the high-grade household paper project with an annual output of 25,000 tons | 79,999.98 | 79,999.98 |
| Subsidies for construction of the water treatment project | 77,539.32 | 77,539.32 |
| Rewards for creation of odor-free enterprise | 62,752.29 | |
| Support funds for sewage centralized water treatment project | 60,750.00 | 60,750.00 |
| Provincial funds for traditional industry transformation projects | 53,571.42 | 35,714.28 |
| Financial rewards for cleaner production transformation | 50,000.00 | |
| Rewards for demonstration enterprise of informatization and industrialization integration | 50,000.00 |
| Subsidies for employment and entrepreneurship | 31,604.66 | |
| Subsidies for encouraging scaled development of enterprises | 20,000.00 | |
| Subsidies for new exports of exporting enterprises | 700.00 | |
| Awards for breakthroughs with increases in business revenues | 300,000.00 | |
| Subsidies for photovoltaic power rooftop | 224,640.00 | |
| Financial support funds for industry collaboration | 7,892,985.55 | |
| Support policy rewards of 2018 from the Bureau of Economy and Information Technology Pengzhou City | 1,310,000.00 | |
| Energy efficiency special fund 2019 of the Science, Industry and Commerce Bureau (cleaner production enterprise) | 20,000.00 | |
| Management system certification rewards 2018 of Pengzhou Administration for Market Regulation | 10,000.00 | |
| Subsidies for pandemic prevention system construction of enterprises by Bureau of Economy and Information Technology Pengzhou City | 9,000.00 | |
| Total | 11,671,362.52 | 15,174,645.20 |
68. Return on investment
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Others | 358,473.15 | 2,287,274.87 |
| Total | 358,473.15 | 2,287,274.87 |
Other description: “Others” refer to returns on principal-protected wealth management products at maturity andreverse repo of treasury bonds of the Company.
69. Profit of net exposure hedging: None
70. Income from changes in fair value: None
71. Credit impairment loss
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Bad debt loss from other receivables | -464,824.58 | -1,502,718.88 |
| Bad debt loss from accounts receivable | 1,766,431.51 | 79,019.13 |
| Total | 1,301,606.93 | -1,423,699.75 |
Other description: None
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 | -468,530.30 | -850,381.40 |
| V. Impairment Loss of Fixed Assets | -2,285,297.81 | |
| Total | -2,753,828.11 | -850,381.40 |
Other description: None
73. Return on disposal of assets
Unit: RMB
| Source | Incurred in the current period | Incurred in the prior period |
| Disposal of fixed assets | -259,896.46 | -896,870.05 |
| Total | -259,896.46 | -896,870.05 |
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 | 23,000.00 | 1,997,067.57 | 23,000.00 |
| Income from fine and compensation | 907,005.44 | 640,155.42 | 907,005.44 |
| Profit from damage and retirement of non-current assets | 98,166.07 | 1,758.21 | 98,166.07 |
| Including: Fixed assets | 98,166.07 | 1,758.21 | 98,166.07 |
| Others | 680,195.03 | 530,259.96 | 680,195.03 |
| Total | 1,708,366.54 | 3,169,241.16 | 1,708,366.54 |
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 |
| Rewards for advanced party organizations and | People’s Government of Shuangshui Town, Xinhui | Grant | Grants received for the performance of the State’s | No | No | 2,000.00 | Related to income |
| individuals 2020 | District, Jiangmen City | function of ensuring the supply or price control of a public utility or socially necessary product | ||||||
| Subsidies for enterprises’ employee training for job adaptation | Human Resources and Social Security Bureau of Yunfu 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 | 21,000.00 | Related to income | |
| Subsidies for job stabilization | Labor and Employment Administration of Xiaonan District, Xiaogan 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 | 291,200.00 | Related to income | |
| Subsidies for job stabilization | Labor and Employment Administration of Xiaonan District, Xiaogan 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 | 27,200.00 | Related to income | |
| Social security subsidies for enterprises | Labor and Employment Administration of Xiaonan District, | Grant | Grants received for the performance of the State’s function of | No | No | 37,332.00 | Related to income |
| Xiaogan City | ensuring the supply or price control of a public utility or socially necessary product | |||||||
| Special award funds for the restructuring of industrial enterprises | Central Treasury Payment Center of Xiaogan City, Xiaonan District | Reward | Grants received as a result of compliance with local government policies such as investment attraction and other local support policies | No | No | 410,000.00 | Related to income | |
| Subsidies for job stabilization | Labor and Employment Administration of Pengzhou 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 | 29,142.57 | Related to income | |
| Job stabilization subsidy from the Unemployment Insurance Fund | Hangzhou Municipal Employment Service Center | 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 | 887.00 | Related to income | |
| Job stabilization subsidy from the Unemployment Insurance Fund | Employment Management Service Office of Pinghu City | Grant | Grants received for the performance of the State’s function of ensuring the supply or price control | No | No | 389,857.30 | Related to income |
| of a public utility or socially necessary product | ||||||||
| Subsidies for job stabilization | Social Insurance Fund Administration of Chengdu 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 | 245,515.30 | Related to income | |
| One-off employment subsidy | Human Resources and Social Security Bureau of Luoding 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 | 238,317.87 | Related to income | |
| Subsidies for job stabilization | Social Insurance Bureau of Yutian County | 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 | 87,935.77 | Related to income | |
| Job stabilization subsidy from the Unemployment Insurance Fund | Human Resources and Social Security Bureau of Yunfu City | Grant | Grants received for the performance of the State’s function of ensuring the supply or price control of a public | No | No | 72,684.00 | Related to income |
| utility or socially necessary product | ||||||||
| Job stabilization subsidy from the Unemployment Insurance Fund | Social Insurance Fund Administration of 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 | 50,801.57 | Related to income | |
| Employee subsidies for enterprises with work and production resumption | Dongsheng Branch of the Human Resources and Social Security Bureau of 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 | 40,400.00 | Related to income | |
| Enterprise training subsidy from the Fourth Technical School of Xiaogan City | Fourth Technical School of Xiaogan 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 | 33,000.00 | Related to income | |
| Subsidies for Covid-19 prevention and control | Financial Payment (Accounting) Center of Jiaxing Port District | Grant | Grants received for the performance of the State’s function of ensuring the supply or price control of a public utility or | No | No | 19,750.00 | Related to income |
| socially necessary product | ||||||||
| Job stabilization subsidy from the Unemployment Insurance Fund | Social Insurance Fund Administration of Yunfu 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 | 16,343.00 | Related to income | |
| Security social services | Development and Construction Management Committee of Port District, Jiaxing City | Grant | Grants received as a result of compliance with local government policies such as investment attraction and other local support policies | No | No | 5,000.00 | Related to income | |
| Job stabilization subsidy from the Unemployment Insurance Fund | Human Resources and Social Security Bureau of Luoding 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 | 1,500.00 | Related to income | |
| Job stabilization subsidy from the Unemployment Insurance Fund | Dongsheng Branch of the Human Resources and Social Security Bureau of 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 | No | No | 118.16 | Related to income |
| product | ||||||||
| Funds for promoting industrial development | Finance Bureau of Yunfu City | Grant | Grants received as a result of compliance with local government policies such as investment attraction and other local support policies | No | No | 83.03 | Related to income | |
| Total | 23,000.00 | 1,997,067.57 |
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 | 1,760,851.30 | 11,952,705.59 | 1,760,851.30 |
| Others | 1,152,018.68 | 1,267,171.07 | 1,152,018.68 |
| Loss from damage and retirement of non-current assets | 725,313.88 | 20,306.50 | 725,313.88 |
| Including: Fixed assets | 725,313.88 | 20,306.50 | 725,313.88 |
| Total | 3,638,183.86 | 13,240,183.16 | 3,638,183.86 |
Other description: None
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 | 87,232,248.96 | 76,953,980.75 |
| Deferred income tax expense | -6,132,728.24 | 8,829,273.17 |
| Total | 81,099,520.72 | 85,783,253.92 |
(2) Adjustment process of accounting profits and income tax expenses
Unit: RMB
| Item | Incurred in the current period |
| Total profit | 488,244,168.07 |
| Income tax expenses calculated at the statutory/applicable tax | 122,061,042.02 |
| rate | |
| Impacts of different tax rates applied to subsidiaries | -40,492,083.06 |
| Impacts of adjustments to income taxes during the prior period | -1,905,505.90 |
| Impacts of non-deductible costs, expenses and losses | 1,436,067.66 |
| Income tax expenses | 81,099,520.72 |
Other description: None
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 | 10,003,853.92 | 12,564,390.63 |
| Fiscal appropriation | 7,136,732.81 | 36,365,077.82 |
| Interest income | 6,623,270.61 | 4,060,998.02 |
| Authorized collection of individual income tax under the equity incentive | 9,395,040.46 | 17,943,967.78 |
| Others | 5,203,778.87 | 6,055,212.85 |
| Total | 38,362,676.67 | 76,989,647.10 |
Explanation of cash received related to other operating activities: None
(2) Cash payments related to other operating activities
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Expenses paid | 409,369,512.68 | 316,942,453.60 |
| Current accounts | 6,431,125.10 | 2,335,741.67 |
| Authorized payment of individual income tax under the equity incentive | 10,715,472.44 | 28,191,169.72 |
| Others | 1,126,549.69 | 10,981,895.83 |
| Total | 427,642,659.91 | 358,451,260.82 |
Explanation of cash paid related to other operating activities: None
(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 wealth management products | 50,000,000.00 | 40,000,000.00 |
| Principal repayment on maturity of treasury bonds reverse repo | 87,105,000.00 | |
| Total | 50,000,000.00 | 127,105,000.00 |
Explanation of cash received related to other investment activities: None
(4) Cash payments related to other investing activities
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Purchasing wealth management products | 212,400,000.00 | |
| Total | 212,400,000.00 |
Explanation of cash paid related to other investment activities: None
(5) Cash received related to other financing activities: None
(6) Cash payments related to other financing activities
Unit: RMB
| Item | Incurred in the current period | Incurred in the prior period |
| Repurchase and deregistration of equity incentives | 8,752,250.65 | 3,475,786.26 |
| Share repurchase | 532,605,631.91 | 27,680,721.76 |
| Deposits of security deposits for bills, letters of guarantee and letters of credit | 12,315,870.82 | 9,290,358.88 |
| Repayment of principal and interests of lease liabilities under the new lease standards | 1,023,913.33 | |
| Total | 554,697,666.71 | 40,446,866.90 |
Explanation of cash paid related to other financing activities: None
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 | 407,144,647.35 | 452,699,484.61 |
| Plus: Provisions for asset impairment | 1,452,221.18 | 2,274,081.15 |
| Depreciation of fixed assets, oil and gas assets and productive biological assets | 163,103,078.23 | 145,151,634.15 |
| Depreciation of use right assets | 2,181,245.94 | |
| Intangible asset amortization | 3,326,149.16 | 2,901,377.36 |
| Long-term unamortized expenses | 5,792,540.92 | 3,200,058.79 |
| Losses from disposal of fixed assets, intangible assets and other long-term assets (“-” indicates income) | 259,896.46 | 896,870.05 |
| Losses from fixed assets write-off (“-” indicates income) | 627,147.81 | 18,548.29 |
| Losses from changes in fair value (“-” indicates income) | ||
| Finance expenses (“-” indicates income) | 4,730,497.09 | -2,415,195.58 |
| Investment losses (“-” indicates income) | -358,473.15 | -2,287,274.87 |
| Decrease in deferred income tax assets (“-” indicates increase) | -17,332,968.85 | 1,306,113.02 |
| Increase in deferred income tax liabilities (“-” indicates decrease) | 11,200,240.61 | 7,523,160.15 |
| Decrease in inventories (“-” indicates increase) | 36,965,050.50 | -192,512,816.22 |
| Decrease in operating receivables (“-” indicates increase) | 78,196,966.06 | -100,988,107.49 |
| Increase in operating payables (“-” indicates decrease) | 40,577,548.88 | 186,790,654.92 |
| Others | ||
| Net cash flows from operating activities | 737,865,788.19 | 504,558,588.33 |
| 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 | 701,224,202.33 | 896,433,846.64 |
| Less: Balance of cash at the beginning of the period | 1,050,034,135.72 | 675,996,852.97 |
| 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 | -348,809,933.39 | 220,436,993.67 |
(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 | 701,224,202.33 | 1,050,034,135.72 |
| Including: Cash on hand | 56,626.99 | 36,349.55 |
| Bank deposits always available for payment | 694,226,698.05 | 1,047,785,634.71 |
| Other monetary funds always available for payment | 6,940,877.29 | 2,212,151.46 |
| III. Balance of Cash and Cash Equivalents at the End of the Period | 701,224,202.33 | 1,050,034,135.72 |
Other description: None
80. Notes to items in the statement of changes in owner’s equity
Description on the name and amount of items under “Others” whose closing balance in last year was adjusted andother relevant issues: 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 | 87,477,934.66 | Security deposits for issuing letter of credit and notes |
| Total | 87,477,934.66 | -- |
Other description: None
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 | -- | -- | 170,188,998.60 |
| Including: USD | 25,368,909.56 | 6.4704 | 164,146,992.42 |
| EUR | |||
| HKD | 7,251,567.67 | 0.8332 | 6,042,006.18 |
| Accounts receivable | -- | -- | 29,765,127.44 |
| Including: USD | 1,052.88 | 6.4704 | 6,812.55 |
| EUR | |||
| HKD | 35,715,692.38 | 0.8332 | 29,758,314.89 |
| Long-term borrowings | -- | -- | |
| Including: USD | |||
| EUR | |||
| HKD | |||
| Other receivables | 1,509,084.28 | ||
| Including: HKD | 1,811,190.93 | 0.8332 | 1,509,084.28 |
| Accounts payable | 173,342,875.75 | ||
| Including: USD | 26,774,200.70 | 6.4704 | 173,239,788.21 |
| EUR | 13,400.00 | 7.6931 | 103,087.54 |
| Other payables | 5,664,414.41 | ||
| Including: HKD | 6,790,466.58 | 0.8332 | 5,657,816.75 |
| USD | 1,013.42 | 6.4704 | 6,557.23 |
| MOP | 50.00 | 0.8086 | 40.43 |
Other description: None
(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
Disclosure of hedged items and related hedging instruments and qualitative and quantitative information abouthedged risks according to the type of hedging: 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 asset | 4,000,000.00 | Deferred income |
| Related to asset | 7,008,167.50 | Other income | 7,008,167.50 |
| Related to income | 3,525,432.81 | Other income | 3,525,432.81 |
| Related to income | 23,000.00 | Non-operating income | 23,000.00 |
| Total | 14,556,600.31 | 10,556,600.31 |
(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: None
(2) Combination costs and goodwill
Method of determining the fair value of combination costs and descriptions of contingent consideration and itschanges: NoneMain reasons for the formation of huge goodwill: NoneOther description: None
(3) Acquiree’s identifiable assets and liabilities on the acquisition date
Method of determining the fair value of identifiable assets and liabilities: NoneAcquiree’s contingent liabilities assumed in a business combination: NoneOther description: None
(4) Profit or loss arising from the recalculation based on fair value of equities held before the acquisitiondateWhether there are transactions through which business combination is achieved in stages while control is obtainedwithin the reporting 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 combinationNone
(6) Other descriptions
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
Description on contingent consideration and its changes: NoneOther description: None
(3) Book value of assets and liabilities of the combined party on the date of combinationContingent liabilities of the combined party assumed in a business combination: NoneOther description: None
3. Reverse purchase
Basic information of transactions, basis for transactions constituting reverse purchase, whether assets andliabilities retained by listed companies constitute a business and its basis, determination of combination costs,adjustment of equity amount and calculation when dealing as equity transactions: 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:
The Company invested and founded C&S (Jiangsu) Paper Co., Ltd. on February 25, 2021, with a registeredcapital of RMB200 million. C&S Paper Co., Ltd. holds 100% of its stakes. C&S (Jiangsu) Paper Co., Ltd. wasincorporated into the scope of consolidated statements from February. Currently, C&S (Jiangsu) Paper has startedoperating activities.On May 19, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and YunnanJiaqu Trading Co., Ltd. jointly invested and established Yunnan Dolemi Trading Co., Ltd., with a registeredcapital of RMB4 million. Dolemi Sanitary Products holds 60% of the shares while Yunnan Jiaqu holds 40% of theshares. The Company has incorporated Yunnan Dolemi Trading Co., Ltd. into the scope of its consolidatedstatements since May 2021. Currently, Yunnan Dolemi has started operating activities.On May 20, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and LuzhouLongmatan District Jisheng Trading Co., Ltd. jointly invested and established Luzhou Dolemi Sanitary ProductsCo., Ltd., with a registered capital of RMB1.5 million. Dolemi Sanitary Products holds 60% of the shares whileJisheng Trading holds 40% of the shares. The Company has incorporated Luzhou Dolemi Sanitary Products Co.,Ltd. into the scope of its consolidated statements since May 2021. Currently, Luzhou Dolemi has started operatingactivities.On June 08, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and SichuanZhong’en Liancheng Technology Co., Ltd. jointly invested and established Mianyang Dolemi Sanitary ProductsCo., Ltd., with a registered capital of RMB1.5 million. Dolemi Sanitary Products holds 60% of the shares whileZhong’en Liancheng holds 40% of the shares. The Company has incorporated Mianyang Dolemi SanitaryProducts Co., Ltd. into the scope of its consolidated statements since May 2021. Currently, Mianyang Dolemi hasno operating activities.
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 access of foreign investment.) (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 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 | 100.00% | Capital contribution for establishment | |
| 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. (note) | 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 Paper Co., Ltd. | Pengzhou, Sichuan | Pengzhou, Sichuan | Sales of household paper, cleaning products, general merchandise, hygiene products, baby products, 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.) | 100.00% | Business combinations 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 | Licensed items: production of sanitary products and disposable medical supplies; production of cosmetics (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: sales of sanitary products and disposable medical supplies; retail of cosmetics; wholesale of cosmetics; manufacture of paper; sales of personal hygiene products; sales of knitwear; manufacture of maternal and infant products; sales of maternal and infant products; sales of paper products; manufacture of paper products; sales of daily necessities; sales of daily chemical products; sales of disinfectants (excluding hazardous chemicals); Internet sales (excluding the sales of commodities requiring a permit); sales of Class I medical devices; sales of Class II medical devices; import and export of goods and 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.) | 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, 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.) | 100.00% | Business combinations involving enterprises under 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 | Yunfu, | Yunfu, | R&D, production, processing, and online sales: paper products, hygiene products, cosmetics, | 50.00% | 50.00% | Capital |
| Necessities Co., Ltd. | Guangdong | Guangdong | 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.) | 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; 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.) | 60.00% | 40.00% | Capital contribution for establishment |
| Yunnan Dolemi Trading Co., Ltd. | Kunming, Yunnan | Kunming, Yunnan | Sales of hygiene products, household products, cosmetics, daily necessities, plastic products, metal products, and rubber products; manufacture of ceramic products and paper products (For items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments.) | 60.00% | Capital contribution for establishment | |
| Luzhou Dolemi Sanitary Products Co., Ltd. | Luzhou, Sichuan | Luzhou, Sichuan | General items: sales of personal hygiene products; sales of paper products; Internet sales (excluding the sales of commodities requiring a permit); sales of household products; sales of sanitary products and disposable medical products; sales of daily necessities; sales of plastic 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 | |
| Mianyang Dolemi Sanitary Products Co., Ltd. | Mianyang, Sichuan | Mianyang, Sichuan | General items: wholesale of cosmetics; sales of personal hygiene products; manufacture of paper products; Internet sales (excluding the sales of commodities requiring a permit); 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 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 | |
| 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; | 100.00% | Capital contribution for establishment |
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 but not controlling the investee: NoneBasis for controlling the important consolidated structured entities: None Basis 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
Description that the percentage of shares held by minority shareholders in a subsidiary is different from thepercentage of their voting rights: NoneOther description: 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: NoneOther description:
Note: C&S (Yunfu) Co., Ltd. was changed to Yunfu Hengtai Trading Co., Ltd. in March 2021.
2. Transactions in which the share of owner’s equity in a subsidiary changes while control of the subsidiaryis still 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 ownersof the Parent CompanyOther description: There are no transactions of the Company in which the share of owner’s equity in a subsidiarychanges and control of the subsidiary is retained.
3. Interests in joint arrangements or associates
(1) Important joint ventures or associates
Description that the percentage of shares in joint ventures or associates is different from the percentage of votingrights: NoneBasis for holding less than 20% of the voting rights but with significant influence, or holding 20% or more of thevoting rights but without significant influence: 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 tothe Company: 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
The Company does not have important joint operations.
5. Interests in unconsolidated structured entities
Description of unconsolidated structured entities:
The Company does not have interests in unconsolidated structured entities.
6. Others: None
X. Risks Associated with Financial Instruments
The 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” fordetailed information 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 riskvariable rarely changes in isolation and the correlation between the variables will have a significant effect on theultimate financial impact of changes in a certain risk variable, the following contents are under the consumptionthat changes of 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’srisk 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, 2021, the largest credit exposure that may cause financial losses to the Companymainly comes from the losses of the Company’s financial assets due to failure of the other contractual party toperform its obligations.In order to reduce credit risk, the Company only conducts transactions with recognized customers with goodcredit status, and continuously monitors the accounts receivable through credit monitoring of existing customersand aging analysis to ensure that the Company does not face the risk of bad debts and keep the overall credit riskwithin 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 dueto changes in market interest rates. The interest rate risk faced by the Company mainly comes from bankborrowings (please refer to “Note VII (32), (43) and (45)” for details). By developing a good relationship withbanks and carrying out proper design of credit lines, types of credits, and credit terms, the Company ensuressufficient bank credit lines to meet its various financing needs. The risk of interest rate fluctuation can bereasonably reduced by shortening the term of a single loan and specially stipulating early prepayment 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 withforeign currency 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
and settled in RMB. See “Note VII (82)” for the conversion of foreign currency financial assets and liabilities intoRMB as of June 30, 2021. During the reporting period, the Company generated exchange profit and loss ofRMB1,346,250.22.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 | Current period | |
| Impact on profit | Impact on shareholders’ equity | |
| Depreciation of RMB against foreign currency by 1.00% | -214073.94 | -214073.94 |
| Appreciation of RMB against foreign currency by 1.00% | 214073.94 | 214073.94 |
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 rollingforecasts on cash flows in the next six months to ensure that the Company has sufficient funds to repay debtsunder all reasonable forecasts.Financial liabilities held by the Company as of June 30, 2021 analyzed based on the maturity period ofundiscounted remaining contractual obligations are as follows:
Unit: RMB
| Item | Within 1 year | Over 1 year | Total |
| Notes payable | 289,707,176.43 | 289,707,176.43 | |
| Accounts payable | 711,941,179.23 | 11,091,908.16 | 723,033,087.39 |
| Other payables | 784,298,181.50 | 12,092,818.95 | 796,391,000.45 |
| Total | 1,785,946,537.16 | 23,184,727.11 | 1,809,131,264.27 |
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 | 28.63% | 28.63% |
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, whose two sons.Other description: None
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 description: The 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. | The second-largest shareholder of the Company, with 20.31% of the Company’s shares |
| Guangzhou Zhongshun Trade Co., Ltd. | A company controlled by the nephew and the husband of the niece of Mr. Deng Yingzhong, director of the Company |
| Bama Zhongshun Health Products Co., Ltd. | A company controlled by Guangdong Zhongshun Paper Group Co., Ltd., the Company’s controlling shareholder |
| Yantai Zhongshun Network Technology Co., Ltd. | The partially-owned subsidiary of Bama Zhongshun Health Products Co., Ltd. controlled by the Company’s controlling shareholders |
| Shenzhen Zhongshun Caizhi Investment Co., Ltd. | Formerly known as Zhongshun Industrial Investment (Shenzhen) Co., Ltd., a company controlled by the Company’s actually controllers, i.e. Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie |
| Pengzhou Lexiangshenghuo Trading Co., Ltd. | A company where the senior manager Yue Yong’s son holds shares and serves as a supervisor |
| Sichuan West Lexiangshenghuo Trading Co., Ltd. | A company where the senior manager Yue Yong’s son holds shares and serves as a supervisor |
| Chongqing Qinyue Trading Co., Ltd. | A company where the senior manager Yue Yong’s brother holds shares and serves as a supervisor |
Other description: The Company’s directors, supervisors, senior managers and their close family members arerelated parties of the company.
5. Information on related party transactions
(1) Related party transactions for purchase and sale of goods, and provision and acceptance of laborservices: NoneTable of sale of goods/provision of labor services
Unit: RMB
| Related party | Content of related party | Incurred in the current period | Incurred in the prior period |
| transactions | |||
| Pengzhou Lexiangshenghuo Trading Co., Ltd. | Sale of goods | 796,449.56 | 828,658.05 |
| Sichuan West Lexiangshenghuo Trading Co., Ltd. | Sale of goods | 289,094.73 | 180,809.75 |
| Chongqing Qinyue Trading Co., Ltd. | Sale of goods | 247,979.83 | |
| Guangdong Zhongshun Paper Group Co., Ltd. | Sale of goods | 56,637.17 |
Explanation of the related party transactions for purchase and sale of goods, and provision and acceptance of laborservices: None
(2) Related entrusted management/contracting and entrusting management/contracting out: None
(3) Related lease
The Company as the lessee: NoneThe Company as the lessee:
Unit: RMB
| Name of lessor | Type of leased assets | Lease fee confirmed in the current period | Lease fee confirmed in the last period |
| Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie | Housing lease | 1,459,590.68 | 1,474,047.18 |
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 | 11,500,854.16 | 8,140,753.70 |
(8) Other related party transactions: None
6. Receivables from and payables to related parties
(1) Receivables
Unit: RMB
| Item | Related party | Balance at the end of the period | Balance at the beginning of the period | ||
| Book balance | Impairment provision | Book balance | Impairment provision | ||
| Accounts receivable | Chongqing Qinyue Trading Co., Ltd. | 60,876.03 | 3,043.80 | ||
| Other receivables | Chongqing Qinyue Trading Co., Ltd. | 44.63 | 2.23 | ||
(2) Payables
Unit: RMB
| Item | Related party | Book balance at the end of the period | Book balance at the beginning of the period |
| Contract liabilities | Sichuan West Lexiangshenghuo Trading Co., Ltd. | 23,518.90 | 195.90 |
| Contract liabilities | Pengzhou Lexiangshenghuo Trading Co., Ltd. | 13.67 | 1.67 |
| Other payables | Chongqing Qinyue Trading Co., Ltd. | 0.77 |
7. Commitments of related parties: None
8. Others
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 | 0.00 |
| The Company’s total amount of all equity instruments exercised in the current period | 6,387,244.00 |
| The Company’s total amount of all equity instruments expired in the current period | 3,315,396.00 |
| Scope of exercise prices and remaining contractual term of the Company’ stock options issued as at the end of the reporting period | The exercise price in the first exercise period for stock options awarded by the Company in the first grant period as at the end of reporting period is RMB8.572/share, the exercise price in the first exercise period for reserved stock options is RMB13.965/share, |
Other description: None
2. Equity-settled share-based payment
√ Applicable □ Not applicable
Unit: RMB
and the exercise price in the second exercise period forfirst-grant stock options is RMB8.472/share. Thevalidity period is from the grant date of the stockoptions to the date when all stock options are exercisedor canceled, with a maximum period of 60 months.Method of determining the fair value of equity instruments at thegrant date
| Method of determining the fair value of equity instruments at the grant date | 1. Restricted shares: the stock closing prices at the grant date 2. Stock options: Black-Scholes model for option pricing 3. Employee stock ownership plan: the stock closing prices at the grant date |
| 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 | 171,552,833.56 |
| Total fees confirmed by the equity-settled share-based payment in the current period | 12,167,835.66 |
Other description: None
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 dateAs at June 30, 2021, 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
As at June 30, 2021, the Company had no significant contingent matters that should have been disclosed but arenot disclosed.
(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
(1) Retroactive restatement approach: None
(2) Prospective approach: None
2. Debt restructuring: None
3. Assets replacing
(1) Exchange of non-monetary assets: None
(2) Other asset replacing: None
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 totalassets and 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
In 2020, the Company signed the XIAOYIDA Business Cooperation Agreement with Bank of China LimitedZhongshan Branch and Shanghai Junmeng E-commerce Co., Ltd. (No. 2020-XYDXY-33725001), under whichthe bank offers a credit line of XIAOYIDA service up to RMB130 million to Shanghai Junmeng and the Companyprovides a joint and several liability guarantee. The line of credit is valid until June 4, 2021 and the financingperiod does not exceed 90 days. As of June 30, 2021, Shanghai Junmeng had a financing balance of theXIAOYIDA service at RMB44.8 million.In 2020, 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. 2020-XYDXY-33725002), under which the bank offers a credit line of XIAOYIDA service up toRMB80 million to Wuhan Jie Rou and the Company provides a joint and several liability guarantee. The line of
credit is valid until June 4, 2021 and the financing period does not exceed 90 days. As of June 30, 2021, WuhanJie Rou had a financing balance of the XIAOYIDA service at RMB46.1 million.XVII. Notes to Major Items of Financial Statements of the Parent Company
1. Accounts receivable
(1) Accounts receivable disclosure by category
Unit: RMB
| Type | Balance at the end of the year | Balance at the beginning of the year | ||||||||
| 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 | 182,140,196.12 | 100.00% | 1,765,309.60 | 0.97% | 180,374,886.52 | 94,047,365.99 | 100.00% | 1,399,993.66 | 1.49% | 92,647,372.33 |
| Including: | ||||||||||
| Portfolio based on aging | 69,802,798.34 | 38.32% | 1,765,309.60 | 2.53% | 68,037,488.74 | 56,099,681.03 | 59.65% | 1,399,993.66 | 2.50% | 54,699,687.37 |
| Portfolio based on related parties | 112,337,397.78 | 61.68% | 112,337,397.78 | 37,947,684.96 | 40.35% | 37,947,684.96 | ||||
| Total | 182,140,196.12 | 100.00% | 1,765,309.60 | 0.97% | 180,374,886.52 | 94,047,365.99 | 100.00% | 1,399,993.66 | 1.49% | 92,647,372.33 |
Bad debt reserve set aside individually: NoneBad debt reserve set aside individually: NoneBad debt reserve set aside individually: NoneBad debt reserve set aside in portfolios: 1,765,309.60
Unit: RMB
| Name | Balance at the end of the period | ||
| Book balance | Impairment provision | Ratio of provision | |
| Within the credit period | 58,724,778.36 | 1,174,495.57 | 2.00% |
| Credit period - 1 year | 10,925,833.41 | 546,291.67 | 5.00% |
| Subtotal of those within 1 year | 69,650,611.77 | 1,720,787.24 | 2.47% |
| 1 to 2 years | 7,557.36 | 1,133.60 | 15.00% |
| 2 to 3 years | 144,629.21 | 43,388.76 | 30.00% |
| 3 to 5 years | 50.00% | ||
| Over 5 years | 100.00% | ||
| Total | 69,802,798.34 | 1,765,309.60 | -- |
Description of reason for the portfolio:
Accounts receivable with the same aging have similar credit risk characteristics.Provision of bad debt reserve by portfolio: NoneDescription of reason for the portfolio: NoneProvision of bad debt reserve by portfolio: NoneDescription of reason for the portfolio: NoneProvision of bad debt reserve by portfolio: NoneDescription 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 the disclosure method of other receivables to disclose relevant information on bad debt reserve:
□ Applicable √ Not applicable
Disclose by aging
Unit: RMB
| Aging | Balance at the end of the period |
| Within 1 year (inclusive) | 181,988,009.55 |
| 1 to 2 years | 7,557.36 |
| 2 to 3 years | 144,629.21 |
| Total | 182,140,196.12 |
(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
| 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 | |||
| Accounts receivable | 1,399,993.66 | 365,315.94 | 1,765,309.60 | |||
| Total | 1,399,993.66 | 365,315.94 | 1,765,309.60 | |||
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
Description of write-offs of important accounts receivable: None
Description on the write-offs of accounts receivables:
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 | 112,301,902.68 | 61.66% | |
| 2nd | 12,935,492.71 | 7.10% | 258,709.85 |
| 3rd | 10,164,016.37 | 5.58% | 305,546.90 |
| 4th | 7,919,065.93 | 4.35% | 220,220.10 |
| 5th | 7,534,401.58 | 4.14% | |
| Total | 150,854,879.27 | 82.83% |
(5) 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.
(6) 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.Other description: None
2. Other receivables
Unit: RMB
| Item | Balance at the end of the period | Balance at the beginning of the period |
| Other receivables | 114,345,050.47 | 136,987,584.64 |
| Total | 114,345,050.47 | 136,987,584.64 |
(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 |
| Margins and deposits | 261,812.00 | 113,606.00 |
| Current accounts | 103,687,258.75 | 131,125,900.41 |
| Reserve | 950,342.06 | 639,681.19 |
| Others | 10,040,119.85 | 5,494,420.94 |
| Total | 114,939,532.66 | 137,373,608.54 |
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 | 386,023.90 | 386,023.90 | ||
| Balance as at January 1, | —— | —— | —— | —— |
| 2021 in the reporting period | ||||
| Provision in the reporting period | 208,458.29 | 208,458.29 | ||
| Balance as at June 30, 2021 | 594,482.19 | 594,482.19 |
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) | 114,903,178.61 |
| 1 to 2 years | 28,000.00 |
| Over 3 years | 8,354.05 |
| 4 to 5 years | 8,354.05 |
| Total | 114,939,532.66 |
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 | 386,023.90 | 208,458.29 | 594,482.19 | |||
| Total | 386,023.90 | 208,458.29 | 594,482.19 | |||
The Company did not have other receivables that were not written off in the reporting period.Where the amount of recovered or reversed bad debt reserve in the reporting period is important: None
4) Other receivables actually written off in the reporting period: None
Description of write-offs of important other receivables: NoneDescription on the write-offs of other receivables: 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 | Balance of bad debt reserve at the end of |
| of the period | the period | ||||
| 1st | Current accounts | 103,243,400.98 | Within 1 year | 89.82% | |
| 2nd | Current accounts | 9,460,860.30 | Within 1 year | 8.23% | 473,043.02 |
| 3rd | Current accounts | 163,112.43 | Within 1 year | 0.14% | 8,155.62 |
| 4th | Current accounts | 88,661.21 | Within 1 year | 0.08% | |
| 5th | Current accounts | 50,000.00 | Within 1 year | 0.04% | 2,500.00 |
| Total | -- | 113,006,034.92 | -- | 98.31% | 483,698.64 |
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 investment
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 | 1,939,122,205.28 | 1,939,122,205.28 | 1,928,113,219.50 | 1,928,113,219.50 | ||
| Total | 1,939,122,205.28 | 1,939,122,205.28 | 1,928,113,219.50 | 1,928,113,219.50 | ||
(1) Investment in subsidiaries
Unit: RMB
| Investee | Opening balance (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 | ||||
| Zhongshan Zhongshun Trading Co., Ltd. | 94,817,296.68 | 1,159,775.82 | 95,977,072.50 | ||||
| C&S (Sichuan) Paper Co., Ltd. | 173,385,439.98 | 1,761,963.00 | 175,147,402.98 | ||||
| Zhejiang Zhongshun Paper Co., Ltd. | 56,524,520.15 | 802,495.02 | 57,327,015.17 | ||||
| C&S (Zhongshan) Paper Co., Ltd. | 12,683,100.00 | 12,683,100.00 | |||||
| Jiangmen Zhongshun Paper Co., Ltd. | 698,614,821.47 | 340,178.52 | 698,954,999.99 | ||||
| C&S (Hubei) Paper Co., Ltd. | 196,016,245.13 | 951,367.92 | 196,967,613.05 | ||||
| C&S (Yunfu) Paper Co., Ltd. | 657,837,465.42 | 791,191.08 | 658,628,656.50 | ||||
| Yunfu Hengtai Trading Co., Ltd. | 30,200,274.51 | 30,200,274.51 | |||||
| Chengdu Zhongshun Paper Co., Ltd. | 627,524.58 | 21,634.32 | 649,158.90 | ||||
| Xiaogan C&S Trading Co., Ltd. | 311,467.66 | 119,344.02 | 430,811.68 | ||||
| Huicong Paper Co., Ltd. | 5,926.18 | 1,086.90 | 7,013.08 | ||||
| Hangzhou Jie Rou Trading Co., Ltd. | 104,095.00 | 11,326.26 | 115,421.26 | ||||
| Zhong Shun International Co., Ltd. | 785,042.74 | 48,622.92 | 833,665.66 | ||||
| Sun Daily Necessities Co., Ltd. | 200,000.00 | 200,000.00 | |||||
| C&S (Dazhou) Paper Co., Ltd. | 6,000,000.00 | 6,000,000.00 | |||||
| C&S (Jiangsu) Paper Co., Ltd. | 5,000,000.00 | 5,000,000.00 | |||||
| Total | 1,928,113,219.50 | 5,000,000.00 | 6,008,985.78 | 1,939,122,205.28 |
(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 | 506,782,115.67 | 414,158,999.43 | 493,288,414.96 | 377,715,003.73 |
| Other businesses | 409,284,226.79 | 374,640,370.60 | 360,602,849.07 | 334,899,974.01 |
| Total | 916,066,342.46 | 788,799,370.03 | 853,891,264.03 | 712,614,977.74 |
Information related to income:
Unit: RMB
| Contract classification | Branch 1 | Branch 2 | Total | |
| By product type | 916,066,342.46 | 916,066,342.46 |
| Household paper | 502,779,375.26 | 502,779,375.26 | ||
| Personal care | 4,002,740.41 | 4,002,740.41 | ||
| Others | 409,284,226.79 | 409,284,226.79 | ||
| By operating region | 916,066,342.46 | 916,066,342.46 | ||
| Domestic | 916,066,342.46 | 916,066,342.46 | ||
| Total | 916,066,342.46 | 916,066,342.46 |
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 isnot performed or fully performed at the end of the reporting period is RMB1,063,051.14, of which the income ofRMB1,063,051.14 is expected to be confirmed as income in the year of 2021.Other description: None
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 | 482,375,000.00 | 140,000,000.00 |
| Others | 329,072.79 | 2,109,515.77 |
| Total | 482,704,072.79 | 142,109,515.77 |
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 | -887,044.27 | |
| Governmental grants reckoned into current profits/losses (not including grants enjoyed in quota or ration according to national standards, which are closely relevant to the company’s business) | 10,556,600.31 | |
| Profits/losses from assets entrusted to others for investment or management | 358,473.15 | Returns on principal-protected wealth management products at maturity and |
| reverse repo of treasury bonds | ||
| Other non-operating income and expenses except for the aforementioned items | -187,907.30 | |
| Less: Influence of income tax | 1,667,039.43 | |
| Total | 8,173,082.46 | -- |
Reason shall be provided if the company defines non-recurring profit and loss items as defined or listed in the No.1 Explanatory Announcement on Information Disclosure for Companies Offering their Securities to the Public—Non-recurring Profit and Loss as recurring profit and loss items.
□ 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 | 7.98% | 0.3140 | 0.3109 |
| Net profit attributable to the ordinary shareholders of the Company after excluding non-recurring profit and loss | 7.82% | 0.3077 | 0.3046 |
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 andoverseas accounting standards. If differences are adjusted based on data audited by overseas auditinstitutions, the name of the institution should be noted.
4. Others
If there are any ambiguities, the Chinese version shall prevail.