Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
FOSHAN HUAXIN PACKAGING CO., LTD.
INTERIM REPORT 2020
August 2020
1
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,
supervisors and senior management of Foshan Huaxin Packaging Co., Ltd. (hereinafter
referred to as the “Company”) hereby guarantee the factuality, accuracy and completeness of
the contents of this Report and its summary, and shall be jointly and severally liable for any
misrepresentations, misleading statements or material omissions therein.
Ren Xiaoping, the Company’s legal representative, Ding Guoqiang, the Company’s Chief
Financial Officer, and Luo Jing, the Company’s Financial Manager hereby guarantee that the
Financial Statements carried in this Report are factual, accurate and complete.
All the Company’s directors have attended the Board meeting for the review of this Report
and its summary.
Any plans for the future and other forward-looking statements mentioned in this Report and
its summary shall NOT be considered as absolute promises of the Company to investors.
Therefore, investors are reminded to exercise caution when making investment decisions.
The Company has no interim dividend plan, either in the form of cash or stock.
This Report and its summary have been prepared in both Chinese and English. Should there
be any discrepancies or misunderstandings between the two versions, the Chinese versions
shall prevail.
2
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Table of Contents
Interim Report 2020........................................................................................................................... 1
Part I Important Notes, Table of Contents and Definitions ........................................................... 2
Part II Corporate Information and Key Financial Information ................................................... 5
Part III Business Summary ............................................................................................................... 8
Part IV Operating Performance Discussion and Analysis ........................................................... 12
Part V Significant Events ................................................................................................................ 20
Part VI Share Changes and Shareholder Information ................................................................. 40
Part VII Preferred Shares ............................................................................................................... 45
Part VIII Convertible Corporate Bonds ........................................................................................ 46
Part IX Directors, Supervisors and Senior Management............................................................. 47
Part X Corporate Bonds .................................................................................................................. 49
Part XI Financial Statements .......................................................................................................... 50
Part XII Documents Available for Reference .............................................................................. 184
3
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Definitions
Term Definition
Foshan Huaxin Packaging Co., Ltd. and its consolidated subsidiaries, except
The “Company”, “FSHXP” or “we”
where the context otherwise requires
China Chengtong China Chengtong Holdings Group Ltd. (the ultimate controller of the Company)
China Paper China Paper Corporation (the actual controller of the Company)
Foshan Huaxin Development Co., Ltd. (the controlling shareholder of the
Huaxin Development
Company)
Hongta Renheng Zhuhai Hongta Renheng Packaging Co., Ltd.
Huaxin Color Printing Huaxin (Foshan) Color Printing Co., Ltd.
Zhuhai Huafeng Zhuhai Huafeng Paper Co., Ltd.
Golden Pheasant Chemical Zhuhai Golden Pheasant Chemical Co., Ltd.
Chengtong Finance China Chengtong Finance Corporation Ltd.
4
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Part II Corporate Information and Key Financial Information
I Corporate Information
Stock name Huaxin Packaging-B Stock code 200986
Stock exchange for stock
Shenzhen Stock Exchange
listing
Company name in Chinese 佛山华新包装股份有限公司
Abbr. (if any) 华新包装
Company name in English (if
Foshan Huaxin Packaging Co. , Ltd
any)
Abbr. (if any) FSHXP
Legal representative Ren Xiaoping
II Contact Information
Board Secretary Securities Representative
Name Ding Guoqiang Shi Hui
2/F, Block 7, 3 Keyang Road, Luoge Park, 2/F, Block 7, 3 Keyang Road, Luoge Park,
Chancheng Economic Development Zone, Chancheng Economic Development Zone,
Address
Nanzhuang Town, Chancheng District, Nanzhuang Town, Chancheng District,
Foshan, Guangdong Province, P.R.China Foshan, Guangdong Province, P.R.China
Tel. 0756-8666629 0756-8666978
Fax 0756-8666922 0756-8666922
Email address dinggq@htrh-paper.com shih@htrh-paper.com
III Other Information
1. Contact Information of the Company
Indicate by tick mark whether any change occurred to the registered address, office address and their zip codes, website address and
email address of the Company in the Reporting Period.
□ Applicable √ Not applicable
No change occurred to the said information in the Reporting Period, which can be found in the 2019 Annual Report.
5
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
2. Media for Information Disclosure and Place where this Report is Kept
Indicate by tick mark whether any change occurred to the information disclosure media and the place for keeping the Company’s
periodic reports in the Reporting Period.
□ Applicable √ Not applicable
The newspapers designated by the Company for information disclosure, the website designated by the CSRC for disclosing the
Company’s periodic reports and the place for keeping such reports did not change in the Reporting Period. The said information can
be found in the 2019 Annual Report.
IV Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
H1 2020 H1 2019 Change (%)
Operating revenue (RMB) 1,849,582,374.70 1,733,126,237.68 6.72%
Net profit attributable to the listed
47,569,827.49 10,489,265.80 353.51%
company’s shareholders (RMB)
Net profit attributable to the listed
company’s shareholders before exceptional 42,274,052.09 8,813,571.35 379.65%
gains and losses (RMB)
Net cash generated from/used in operating
547,232,009.55 -349,160,799.79 -
activities (RMB)
Basic earnings per share (RMB/share) 0.0941 0.0208 352.40%
Diluted earnings per share (RMB/share) 0.0941 0.0208 352.40%
Up by 1.82 percentage po
Weighted average return on equity (%) 2.35% 0.53%
ints
30 June 2020 31 December 2019 Change (%)
Total assets (RMB) 5,817,684,697.84 5,591,643,310.38 4.04%
Equity attributable to the listed company’s
2,046,639,944.00 2,006,651,491.51 1.99%
shareholders (RMB)
V Accounting Data Differences under China’s Accounting Standards for Business Enterprises
(CAS) and International Financial Reporting Standards (IFRS) and Foreign Accounting
Standards
1. Net Profit and Equity Differences under CAS and IFRS
□ Applicable √ Not applicable
6
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
No such differences for the Reporting Period.
2. Net Profit and Equity Differences under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No such differences for the Reporting Period.
XI Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item Reporting Period Note
Gain or loss on disposal of non-current assets (inclusive of
-69,442.59
impairment allowance write-offs)
Government subsidies charged to current profit or loss (exclusive
of government subsidies given in the Company’s ordinary course
10,070,822.18
of business at fixed quotas or amounts as per the government’s
uniform standards)
Non-operating income and expense other than the above 2,347,635.43
Less: Income tax effects 393,751.73
Non-controlling interests effects (net of tax) 6,659,487.89
Total 5,295,775.40 --
Explanation of why the Company reclassifies as recurrent an exceptional gain/loss item defined or listed in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss
Items:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
7
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Part III Business Summary
I Principal Activity of the Company in the Reporting Period
The Company specializes in the R&D, production and sales of high-end coated ivory board, chemicals for paper making and color
printing products. The businesses are described as follows:
(I) High-end coated ivory board
High-end coated ivory board is the primary product of the Company. As a category of white paperboard, it is applied in various fields
such as cigarette packaging, food packaging, medicine packaging, cosmetic packaging and living supplies packaging, which
represent the core business of the Company. The R&D, production and sales of the ivory board is mainly undertaken by Zhuhai
Hongta Renheng Packaging Co., Ltd. and Zhuhai Huafeng Paper Co., Ltd. Based in domestic and overseas high-end packaging
markets of cigarette and food, this business provides "personalized" products and services for customers with "differentiation"
business strategy and is in a competitive position industry-wide. The Company now has three coated ivory board production lines,
and the annual production capacity around 600,000 tons. The Company's products can be divided into the following categories:
1. Coated ivory board for cigarette packaging, the primary product of the Company, is used in the high-end cigarette packaging
market. The coated ivory board for cigarette packaging produced by Hongta Renheng takes up a dominant position in the domestic
cigarette packaging field. It represents the highest level of coated ivory board quality in China. It has won a Golden Award at China’s
International Paper & Paper Product Brands Exhibition, and the top award of the Chinese science and technology community—the
first-class State Science and Technology Advancement Award. The anti-counterfeit coated ivory board with color fiber and
true-color fiber etc.—a technology that is independently developed by the Company and has been granted the national invention
patent of China—has been successfully applied in the packaging of a series of cigarettes in the “Hongta Group” and
“HongyunHonghe Group" brands to combat counterfeiting from the packaging materials, reaching the significant anti-counterfeit
results of “easily identifiable but difficult to copy”. The “tobacco fiber ivory board”, a new product of the Company that pursues the
recycling philosophy of “Coming from Tobacco, Used for Tobacco”, is being tested on the market. And the “black cardboard for
cigarette packaging” newly launched to the market is well-received among customers with stable hue in printing.
2. In terms of ivory board for liquid and food packaging, the Company is the first to break the foreign technological monopoly with
its ivory board for liquid packaging. The Company’s homegrown sterile paperboard for packaging of liquid milk, fruit juice, herbal
tea and other drinks has effectively substituted imported products. The ivory board series for food packaging such as anti-oil food
grade coated board and high-end paper cup have been recognized by well-known catering groups after they are put into the market.
Upholding the philosophy of sustainable development, Hongta Renheng has successfully developed the “plastic-free coated board for
food packaging” and the “PE-free paper for paper cups”, which is an effective alternative to plastic package and can help reduce the
use of plastic.
3. The high-end commercial ivory board is applied in the segmented packaging market fields like the high-end medicine, cosmetics,
and daily necessities. The anti-counterfeit coated ivory paper with personalized identification code independently developed by the
Company and for which it has been granted the invention patent has been successfully applied in the anti-counterfeit packaging of the
8
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
high-end products like high-end medicine and cosmetics, which does not only solve the difficulties posed by impact from counterfeit
and shoddy products for customers at the source, but also effectively reduces the customer’s anti-counterfeit costs and fake product
crackdown expanses and win high trust from the market. Meanwhile, the “paper for cluster packaging” launched by Hongta Renheng
in 2019 can cater to various sorts of packaging needs and excels as a green material.
(II) Chemicals for paper making
Chemicals for paper making represent an upstream extension of the Company’s business of the paper-making industrial chain. The
R&D, production and sales of which are mainly undertaken by Golden Pheasant Chemical, a subsidiary of the Company, which
mainly supplies carboxylic butadiene-styrene latex, styrene-acrylic latex, calcium carbonate and auxiliary chemicals for paper
making. With these products of domestically first-class quality, Golden Pheasant Chemical is considered a well-known papermaking
latex producer in China.
(III) Color printing products
Color printing represents a downstream extension of the Company’s business of the paper-making industrial chain, which covers
designing and manufacturing packaging materials and providing one-stop packaging solutions for customers. This business is mainly
undertaken by Huaxin (Foshan) Color Printing Co., Ltd., which owns offset, flexo and intaglio printing workshops. Main products
include color boxes, various labels (paper label, in-mold label and sticker), barcode printing, brochures and books, and variable data
printing is also available, which cater to various fields of end consumer goods, including medicine, condiments and beverages. The
most outstanding advantage is customization from the material end, providing greener, more economical and individualized
packaging materials for customers.
II Significant Changes in Major Assets
1. Significant Changes in Major Assets
Major assets Main reason for significant changes
2. Major Assets Overseas
□ Applicable √ Not applicable
III Core Competitiveness Analysis
(I) Backed by a central government-owned enterprise
The ultimate controller of the Company, China Chengtong Holdings Group Ltd. (China Chengtong), authorized by the State-owned
Assets Supervision and Administration Commission of the State Council to perform relevant duties of the investor on behalf of the
State Council, is listed among the first batch of pilot enterprises by the State-owned Assets Supervision and Administration
Commission to construct the standard board of directors and the first pilot state-owned asset management Company. In 2016, China
Chengtong was approved to be the pilot state-owned capital operation Company, and its main business includes equity operation,
9
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
financial services, asset management, integrated logistics services, production materials trading, forestry-pulp paper production
development and utilization etc.. It is also the only large-scale central enterprise approved by the State-owned Assets Supervision and
Administration Commission of the State Council to focus on production, development and utilization of forestry, wood pulp and
paper. As a pilot enterprise of the state-owned asset management companies, China Chengtong has built a platform for the
state-owned assets restructuring and capital operation in accordance with prevailing market principles, explored the central
enterprise’s non-main business and a special path for the NPA’s market-oriented specialized operations and disposal, and reorganized
and integrated a number of subsidiaries subordinated to central enterprises by means of trusteeship and the transfer of state-owned
property rights. In 2016, China Chengtong was entrusted by the State-owned Assets Supervision and Administration Commission of
the State Council to participate in the diversification reform of Sinopec International Petroleum Exploration and Production
Corporation, managed China Railway Materials Co., Ltd. in the form of trusteeship, and invested Guoyuan Coal Asset Management
Co., Ltd.. As approved by the State Council and entrusted by the State-owned Assets Supervision and Administration Commission,
China Chengtong, as the main sponsor, cooperated with nine central enterprises, local state-owned enterprises and financial
institutions to jointly set up the largest domestic private equity investment fund with a total investment of RMB 350 billion Yuan --
The China State-Owned Enterprise Restructuring Fund. Meanwhile, Chengtong Fund Management Co., Ltd. was also established to
take responsibility for the implementation of relevant fund management affairs. China Chengtong is aiming at improving the
state-owned capital’s operation efficiency, serving the national strategy, abiding by the law of the market, and building a state-owned
capital operation platform featuring the market-oriented operation and professional management. In addition, it will promote the
rational flow and optimized of the state-owned capital and optimizing the configuration through equity operation, value management,
and flexible transfer etc.. so as to form an institutional mechanism and operational model that meet various functional requirements
for corresponding state-owned capital operation.
(II) Technological innovation advantage
The Company always sticks to taking “innovation” as the core motivation of enterprise development while upholding the
“market-oriented and customer-centric” philosophy. Aiming for high-quality development, the Company adheres to its future product
positioning and takes the initiative to overcome difficulties. In recent years, the Company has researched and developed many new
products, and launched them to the market, such as non plastic coated food packaging board, black cigarette packaging board ,
tobacco fiber ivory board, special paper for cluster bag, etc., actively practiced environmental protection conception, developed
recycling economy, promoted “replacing plastic with paper” and individualized products. The Company can provide customized
solution from material end and provide more environmental friendly, more economical and more individualized packaging materials
for customers. Currently, several new technologies are in reserve, R&D and promotion. In recent years, the Company continuously
promote the affiliated enterprises to complete R&D system construction:
1. Hongta Renheng has constantly adjusted and integrated relevant functions of R&D, and reformed system and mechanism. R&D
combines with market closely, and the New Material Development and Industrial Technology Research Institute has established.
Relying on Enterprise Technology Center of Guangdong Province, Engineering Technology R&D Center of Guangdong Province,
National Hi-Tech Enterprise, and other technology platforms, the Company undertakes the R&D of new product, new process, new
technology, and new raw and auxiliary materials. Meanwhile, the Company undertakes product R&D and technology service of
external paper making and chemical industry enterprises, as well as the scientific research projects of new materials of national,
10
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
provincial and municipal strategic emerging industries. Huaxin Color Printing strengthens R&D input, meets the needs of variable
data printing, and provides solution of customized package printing for customers from material end.
2. Hongta Renheng has established a professional R&D team led by doctoral holders in relevant fields and comprising seasoned
technical staff, which means it is capable of independent product development. In the first half of 2020, it participated in the
formulation of the group standard—The Looseness Requirements for Foldable Cartons for Cigarette Packaging and Testing Methods
and a printing-industry standard—The Control Requirements for the Production Process of Green Printing Paper for Food Packaging.
By the end of the Reporting Period, Hongta Renheng has led and participated in formulation and revision of 24 national and
industrial standards (the most in the industry), built leading industrial brand while leading the development of the industry. Huaxin
Color Printing was evaluated as Technology Center of Excellent Enterprises of Guangdong. The Company constantly creates and
develops new technologies, and enterprise technology center becomes an important carrier for technological fruits conversion.
3. Hongta Renheng, Zhuhai Huafeng, Golden Pheasant Chemical, and Huaxin Color Printing which are affiliated companies of the
Company have all passed the review recognition of “National Hi-Tech Enterprise” and enjoyed the preferential policy of reduction or
exemption of enterprise income tax.
4. The Company has obtained various patents, providing the most important technical support and guarantee for the advancement of
product competitiveness. As of the end of the Reporting Period, the Company had been granted 56 duly authorized patents, including
26 invention patents and 30 utility models. There are 27 pending patents, including 11 invention patents and 16 utility models.
(III) Quality and brand advantage
Hongta Renheng has the top award of the Chinese science and technology community—the first-class State Science and Technology
Advancement Award. The high-end coated ivory board produced by Hongta Renheng has excellent printing performance. Dominant
product—coated ivory board for tobacco packaging, setting the quality standard for China’s coated ivory board, takes up a dominant
position in high-end tobacco packaging field with a close to 1/4 market share. "Hongta" coated ivory board takes up a leading
position in quality in domestic and overseas ivory board industry. "Hongta" coated ivory board represents the highest level of
production, technology and product of coated ivory board in China, with a high reputation at home and abroad.
(IV) Management advantage
With so many years of experience accumulation, the Company cultivates a lot of excellent innovative talents of technology
innovation and operation management, established operation management and decision-making team of strong ability, high level,
wide vision and advanced conception. The Company practices a corporate culture of “Help Build Civilization, Promote Humanity in
Business, Fight against Headwinds and Stay Ambitious”, and forms management team advantage integrating enterprise culture and
core talents gradually. Meanwhile, the Company powerfully introduces talent introduction through market. Operation and
management have reached a new level. Supported by the operation and management resources of the Company as the parent, the
Company’s subsidiaries have achieved excellent growth in market share and earnings.
(V) Industry chain advantage
The Company owns a large paper-making industrial chain characteristic of complementary strengths and great synergy. At the
procurement end, the Company has effectively reduced procurement costs of certain raw materials, fast and effective matching of
raw materials, as well as improvement in production adaptability. At the marketing end, the Company adopts a more direct approach
in respect of supplying for customers, which streamlines the industry chain and improves the Company’s overall profitability.
11
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Part IV Operating Performance Discussion and Analysis
I Overview
(I) Market Environment
In the first half of 2020, the sudden outbreak of COVID-19 and the complex external economic environment brought various
uncertainties and challenges to the Company’s business divisions. Sinarmas Paper (China) Investment Co., Ltd. (hereinafter,
“Sinamas Paper”) passed the anti-trust review unconditionally on its acquisition of 100% of Shandong Bohui Group Co., Ltd.
(hereinafter, “Bohui Group”), marking substantial progress on the acquisition. The ivory board industry sees faster integration, more
concentration, improving trends and expectedly higher market prices. The increasingly strict policies of environmental protection and
plastic bag restriction across the world provide a boost to demand for ivory board. However, the spreading of the pandemic overseas
has produced a great impact on ivory board exports both directly and indirectly. But market demand for color printing, which goes
with the ivory board industry, is in gradual recovery as the pandemic is under control domestically.
(II) Operating Results of the Reporting Period
In the first half of 2020, the Company followed the leadership of the governing party, promoted deep integration of party committee
building and business operations, promoted high-quality development through high-quality party committee building, gave play to
the “controlling directions, managing the overall situation and ensuring implementation” roles of the party committee and the role of
party organizations of all levels as fighting bastions, proactively responded to the uncertainties and challenges brought by the
pandemic, and ensured stable production and operation. Meanwhile, it actively expanded external markets, deepened organizational
reform, increased investment in R&D and innovation, improved internal management and strengthened risk control. As a result, the
Company achieved significant improvement in internal management and a significant year-on-year improvement in operating
performance.
For the Reporting Period, the Company recorded operating revenue of RMB1,849,582,374.70, a gross profit of RMB93,959,067.49,
and a net profit attributable to the listed company’s shareholders of RMB47,569,827.49. As at the end of the Reporting Period, the
total assets of the Company amounted to RMB5,817,684,697.84, with a debt/asset ratio of 37.81%.
(III) Management Measures in the Reporting Period
1. Persisting in the guidance of Party building and strengthening the integration of Party building and operation
In the first half year of 2020, the Company persisted in the guidelines of Xi Jinping Thought on Socialism with Chinese
Characteristics for a New Era, and conscientiously implemented the decisions and arrangements of the Party Central Committee.
With “three integrations with internationalization” and “double integrations” as the focus, the Company integrated Party building
with production, operation, corporate culture, team building, and the work of different societies and associations, and gave full play
to the role of its Party committee in “controlling directions, managing the overall situation and ensuring implementation”. During the
epidemic, the Company conducted the education themed “Enforcing Strict Discipline over the Party and Strengthening the
Awareness for Political Responsibilities”, so as to convert the unique political advantages of the Party into strengths in fighting
against the epidemic, resuming work and production, and managing production and operation, promote production and operation
12
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
towards continuous improvements, and achieve growth in all business segments in all respects.
2. Reinforcing the internal mechanism reform and enhancing operation efficiency
In the first half of 2020, the Company continued to improve its organizational structure and at the same time stepped up effort in the
recruitment of marketized mature talents, and introduced professionals to inject new impetus into the Company for its development.
Furthermore, the Company promoted the new appraisal model focusing on the maximization of “efficiency and profits” to boost the
morale of employees. It carried out a reform on its existing remuneration system based on the principle of linking performance with
salary, which “values performance, rewards the diligent, punishes the lazy, encourages creation, and increases profits”. The Company
established promotion channels comprising five hierarchies to conduct annual comprehensive review of technical, skilled and
management talents at each hierarchy in a specific proportion, thus satisfying the development needs of both itself and its employees,
improving the core competitiveness of both, and guiding employees to focus on improving their skills and abilities.
3. Increasing spending on R&D and innovation and improving the incentive mechanism
In 2020, the Company continued to improve R&D spending and pursued “differentiation” in the increasingly homogeneous market.
Its newly founded New Material Development and Industrial Technology Research Institute integrates paper manufacturing,
chemical engineering, printing and packaging technologies of the paper-making industrial chain, extends research into the “new
materials+” in emerging industries, and engages in the R&D of new products, new processes, new technologies and new raw and
auxiliary materials in businesses. In addition, the Research Institute undertakes the product R&D and technical services to external
companies in paper manufacturing and chemical industry, and engages in the scientific research projects on new materials in national
and provincial strategic emerging industries. New Material Development and Industrial Technology Research Institute has set up a
flexible and market-oriented new incentive mechanism to inspire the technological innovation ability of scientific and technological
personnel, and fully exert and mobilize their creativity and activity.
4. Advancing the marketing system reform and promoting synergy in the internal management system
The Company has established a market-oriented system in its marketing department to optimize “value marketing”. It appraises sales
performance by measuring the growth of sales volume, forming a competitive remuneration and incentive mechanism. Moreover,
based on its product characteristics and the market status quo, the Company has continued to improve its marketing structure towards
better allocation and use of marketing resources. It has made improvement to various supply chain links to enhance its overall
business capacity.
II Analysis of Core Businesses
See “I Overview” above.
Year-on-year changes in key financial data:
Unit: RMB
H1 2020 H1 2019 Change (%) Main reason for change
Operating revenue 1,849,582,374.70 1,733,126,237.68 6.72%
Cost of sales 1,512,306,706.55 1,539,779,030.57 -1.78%
Selling expense 89,364,894.20 69,402,517.15 28.76%
13
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Administrative expense 48,672,339.16 50,498,247.03 -3.62%
Finance costs 29,098,291.29 30,524,905.51 -4.67%
Income tax expense 3,159,251.49 3,245,990.34 -2.67%
Increase in R&D expense
for the purpose of
R&D expense 90,479,878.01 52,474,320.32 72.43%
strengthening the R&D
team
Improvement in
operating efficiency, as
Net cash generated
well as significant
from/used in operating 547,232,009.55 -349,160,799.79 256.73%
year-on-year increase in
activities
unit sales and cash
inflow
Net cash generated
Year-on-year increase in
from/used in investing -591,332,114.48 117,440,126.03 -603.52%
term deposits
activities
Adjusting the financing
Net cash generated
structure through
from/used in financing -53,787,345.33 303,563,076.57 -117.72%
reducing interest-bearing
activities
liabilities
Net increase in cash and
-90,071,819.73 72,841,617.85 -223.65% Debt restructuring
cash equivalents
Material changes to the profit structure or sources of the Company in the Reporting Period:
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Breakdown of operating revenue:
Unit: RMB
H1 2020 H1 2019
As % of total As % of total
Change (%)
Operating revenue operating revenue Operating revenue operating revenue
(%) (%)
Total 1,849,582,374.70 100% 1,733,126,237.68 100% 6.72%
By operating division
Manufacturing 1,829,581,089.37 98.92% 1,717,953,710.89 99.12% 6.50%
Other 20,001,285.33 1.08% 15,172,526.79 0.88% 31.83%
By product category
Ivory board 1,519,363,493.84 82.15% 1,430,522,018.99 82.54% 6.21%
Presswork 154,484,467.81 8.35% 153,273,410.57 8.84% 0.79%
14
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Chemicals 155,733,127.72 8.42% 134,158,281.33 7.74% 16.08%
Other 20,001,285.33 1.08% 15,172,526.79 0.88% 31.83%
By operating segment
Domestic 1,680,221,326.19 90.84% 1,491,509,672.76 86.06% 12.65%
Overseas 169,361,048.51 9.16% 241,616,564.92 13.94% -29.91%
Operating Division, Product Category or Operating Segment Contributing over 10% of Operating Revenue or Operating Profit
√ Applicable □ Not applicable
Unit: RMB
YoY change in YoY change in
Operating Gross profit YoY change in
Cost of sales operating revenue gross profit
revenue margin cost of sales (%)
(%) margin (%)
By operating division
Manufacturing 1,829,581,089.37 1,497,681,444.57 18.14% 6.50% -2.08% 7.17%
By product category
Ivory board 1,519,363,493.84 1,260,199,014.84 17.06% 6.21% -3.94% 8.77%
Presswork 154,484,467.81 121,001,605.63 21.67% 0.79% 4.39% -2.70%
Chemicals 155,733,127.72 116,480,824.10 25.20% 16.08% 14.60% 0.96%
By operating segment
Domestic 1,660,220,040.86 1,358,313,475.72 18.18% 11.31% 4.89% 5.00%
Overseas 169,361,048.51 139,367,968.85 17.71% -29.91% -43.07% 19.04%
Core business data of the prior year restated according to the changed statistical caliber for the Reporting Period:
□ Applicable √ Not applicable
Any over 30% YoY movements in the data above and why:
□ Applicable √ Not applicable
III Analysis of Non-Core Businesses
√ Applicable □ Not applicable
Unit: RMB
Amount As % of total profit Reason for formation Exceptional or recurrent
Long-term equity investment
Return on
14,188,831.36 15.10% income calculated by equity Recurrent
investment
method (associate)
Non-operating Income from disposal of
3,426,822.06 3.65% Exceptional
income scrap waste
Non-operating 1,079,186.63 1.15% Loss on disposal of current Exceptional
15
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
expense assets, fine expense, etc.
Credit impairment Loss on impairment of other
-465,085.02 -0.49% Exceptional
loss receivables
Asset disposal Gain/loss on disposal of
-69,442.59 -0.07% Exceptional
income non-current assets
Other income 10,070,822.18 10.72% Government subsidy Exceptional
IV Analysis of Assets and Liabilities
1. Material Changes in Asset Composition
Unit: RMB
30 June 2020 30 June 2019 Change in
As % of total As % of total percentag Reason for material change
Amount Amount
assets assets e (%)
685,828,177.5
Monetary assets 11.79% 217,327,217.75 3.74% 8.05%
7
Accounts 604,995,966.2
10.40% 739,406,369.07 12.71% -2.31%
receivable 3
649,651,989.9
Inventories 11.17% 784,520,862.49 13.48% -2.31%
0
Investment
28,777,952.24 0.49% 30,425,974.11 0.52% -0.03%
property
Long-term equity 669,501,198.9
11.51% 669,365,148.13 11.51% 0.00%
investments 1
2,000,531,709. 2,111,243,885.
Fixed assets 34.39% 36.29% -1.90%
38 87
Construction in
59,082,753.75 1.02% 44,969,165.79 0.77% 0.25%
progress
Short-term 879,070,896.8 1,441,879,613.
15.11% 24.78% -9.67%
borrowings 2 49
Long-term
0.00% 100,000,000.00 1.72% -1.72%
borrowings
2. Assets and Liabilities at Fair Value
□ Applicable √ Not applicable
16
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
3. Restricted Asset Rights as at the Period-End
The restricted assets of the Company totaled RMB782,157,000, including RMB550,000,000 of term deposit as the pledge for notes,
RMB220,000,000 of structured deposits and RMB12,157,000 of security deposits for banker’s acceptance bills.
V Investments Made
1. Total Investment Amount
□ Applicable √ Not applicable
2. Major Equity Investments Made in the Reporting Period
□ Applicable √ Not applicable
3. Major Non-Equity Investments Ongoing in the Reporting Period
□ Applicable √ Not applicable
4. Financial Assets at Fair Value
□ Applicable √ Not applicable
5. Financial Investments
(1) Securities Investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VI Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
17
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
2. Sale of Major Equity Interests
□ Applicable √ Not applicable
VII Main Controlled and Joint Stock Companies
√ Applicable □ Not applicable
Main subsidiaries and joint stock companies with an over 10% influence on the Company’s net profit
Unit: RMB
Relationship Principal Registered Operating Operating
Name with the activity Total assets Net assets Net profit
capital revenue profit
Company
Zhuhai Ivory board,
Hongta original
600,000,000. 3,916,365,66 2,593,681,75 1,222,528,79 21,705,173
Renheng Subsidiary paper of 21,973,476.27
00 4.37 1.06 3.30 .04
Packaging liquid food
Co., Ltd. packaging
Ivory board,
Zhuhai
original
Huafeng 984,559,331. 2,753,597,23 1,029,600,79 953,945,651. 27,599,257
Subsidiary paper of 28,581,051.15
Paper Co., 06 5.66 2.74 03 .36
liquid food
Ltd.
packaging
Zhuhai
Golden latex and
69,271,940.0 270,125,760. 198,179,711. 209,219,897. 17,752,391
Pheasant Subsidiary calcium 17,673,317.05
0 46 75 64 .02
Chemical carbonate
Co., Ltd.
Huaxin
Color
(Foshan)
packaging 96,895,605.1 413,400,731. 263,048,035. 163,425,857. 12,828,008
Color Subsidiary 10,845,369.80
and label 4 03 88 89 .91
Printing Co.,
printing
Ltd.
Subsidiaries obtained or disposed in the Reporting Period:
□ Applicable √ Not applicable
Information about major majority- and minority-owned subsidiaries:
VIII Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
18
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
IX Performance Forecast for January-September 2020
Warning of possible loss or considerable YoY change in the accumulative net profit made during the period-beginning to the end of
the next reporting period, as well as the reasons:
□ Applicable √ Not applicable
X Risks Facing the Company and Countermeasures
1. Market risk
High-end coated ivory board is the primary product of the Company. However, affected by the concentrated release of the new
production capacity for various ivory boards in China in the past two years, the domestic demands didn’t increase greatly. The more
fierce market competition of the ivory boards in China has brought a great impact on the market of the Company’s products. Meanwhile,
with faster integration and more concentration in the industry, ivory board prices may encounter fluctuations. Additionally, the
pandemic situation overseas poses uncertain risk to the export of the Company’s ivory board.
Countermeasure: intensify product structure adjustment, and strengthen the efforts in developing new products and expanding new
market.
2. Risk of short supply of raw materials
The Company obtains its primary raw material, wood pulp, mainly through import. The pandemic situation overseas may affect the
related transportation and shipment. Meanwhile, fluctuations of international wood pulp prices and of the RMB exchange rate against
the US dollar may have an impact on the Company.
Countermeasures: look for more sourcing channels to adjust the structure of wood pulp sourcing and ensure stable production and
operation.
3. Safety and Environmental Protection Risk
The Company is specialized in manufacturing with large mechanical equipment. Due to complicated production and manufacturing
environment, safety production and environmental requirements become much more stringent.
Countermeasures: strengthen the recognition and management of safety and environmental protection hazards; improve the
management of production & manufacturing machines and pollution discharge equipment/facilities; clearly define personnel
responsibilities of front-line production workers; enhance the supervision and inspection of safety operation on the production site;
reinforce corresponding publicity and education and create possible safety production atmosphere; consolidate job responsibilities for
staffs in environmental protection department; strictly implement environmental protection and emission standards; eliminate possible
risks of safety and environmental protection accidents.
19
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Part V Significant Events
I Annual and Extraordinary General Meeting Convened during the Reporting Period
1. General Meetings Convened during the Reporting Period
Investor Index to disclosed
Meeting Type Convened date Disclosure date
participation ratio information
Announcement on
Resolutions of the
2019 Annual
General Meeting of
Foshan Huaxin
The 2019 Annual Annual General Packing Co., Ltd.
65.72% 14 April 2020 15 April 2020
General Meeting Meeting (Announcement No.:
2020-022) disclosed
on Securities Times,
Hong Kong Pao and
http://www.cninfo.co
m.cn.
Announcement on
Resolutions of the
First Extraordinary
General Meeting of
2020 of Foshan
The First Extraordinary Huaxin Packing Co.,
Extraordinary
General Meeting of 0.29% 15 July 2020 16 July 2020 Ltd. (Announcement
General Meeting
2020 No.: 2020-037)
disclosed on
Securities Times,
Hong Kong Pao and
http://www.cninfo.co
m.cn.
2. Extraordinary General Meetings Convened at the Request of Preference Shareholders with Resumed
Voting Rights
□ Applicable √ Not applicable
20
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
II Interim Dividend Plan
□ Applicable √ Not applicable
The Company has no interim dividend plan, either in the form of cash or stock.
III Commitments of the Company’s De Facto Controller, Shareholders, Related Parties and
Acquirers, as well as the Company Itself and Other Entities Fulfilled in the Reporting Period
or Ongoing at the Period-End
□ Applicable √ Not applicable
No such cases in the Reporting Period.
IV Engagement and Disengagement of Independent Auditor
Are the interim financial statements audited?
□ Yes √ No
The interim financial statements have not been audited.
V Explanations Given by the Board of Directors and the Supervisory Committee Regarding
the Independent Auditor's “Modified Opinion” on the Financial Statements of the Reporting
Period
□ Applicable √ Not applicable
VI Explanations Given by the Board of Directors Regarding the Independent Auditor's
“Modified Opinion” on the Financial Statements of Last Year
□ Applicable √ Not applicable
VII Insolvency and Reorganization
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII Legal Matters
Significant lawsuits and arbitrations:
√ Applicable □ Not applicable
Situation of
Lawsuit Trial results and
Whether form Process of execution of
Basic situation of amount influences of Disclosure Disclosure
into estimated lawsuit judgment of
lawsuit (arbitration) (RMB lawsuit date index
liabilities (arbitration) lawsuit
‘0,000) (arbitration)
(arbitration)
21
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
A major production
safety accident was
caused by a flash burn
when Jiangsu
Tianxing
High-Altitude
Anti-Corrosion
Engineering Co., Ltd.
(hereinafter referred to
as "Jiangsu Tianxing")
and Wuhan Kedio
Electric Power
Technology Co., Ltd. The judgment has
(hereinafter referred to been made that
as "Wuhan Kedio") one fifth of
The case enters
carried out the As of the responsibility of
the execution
maintenance of 120m end of the RMB2.232
phase and
chimney Reporting million of
Zhuhai Huafeng http://www.
anti-corrosion project Period, the compensation is
is claiming cninfo.com.
for Zhuhai Huafeng, final respectively born
compensation cn/new/disc
the holding subsidiary judgment by Zhuhai
from other losure/detail
of the company, on 4 for the civil Huafeng and other
1,116 None defendants. 6 March 2017 ?orgId=gssz
March 2017. Six compensatio four defendants.
Zhuhai Huafeng 0200986&a
construction workers n case has At present, Zhuhai
is applying for nnounceme
of the construction been made, Huafeng has
legal ntId=12031
company died in the and the case received the
enforcement to 32688&ann
accident. Zhuhai enters the compensation of
Zhuhai Jinwan
Huafeng paid a total execution RMB2.23 million
District People’s
compensation of RMB phase. from defendants.
Court.
11.16 million to RMB6.7 million is
relatives of the victims still to be
on 7 March 2017 for recovered.
Jiangsu Tianxing and
Wuhan Kedio in
accordance with the
requirements and
under the supervision
of the government.
Zhuhai Huafeng
applied to Zhuhai
Jinwan District
People's Court for
property preservation
before litigation on 14
22
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
March 2017. Zhuhai
Huafeng applied to
Zhuhai Jinwan
District People's Court
for recovery action in
which Jiangsu
Tianxing and Wuhan
Kedio were taken as
joint defendants on 16
March 2017. Then
Wuhan Kedio applied
to add Yancheng
Xinda High-Altitude
Anti-Corrosion Co.,
Ltd. (hereinafter
referred to as
YanchengXinda) as a
defendant and
YanchengXinda
applied to add Liu
Jiechun as a
defendant. It is a
dispute case over the
right of recourse of
the subsidiary of the
Company.
Other legal matters:
□ Applicable √ Not applicable
IX Doubts from Media
□ Applicable √ Not applicable
The Company had no issues about which media generally raised doubts in the Reporting Period.
X Punishments and Rectifications
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XI Credit Quality of the Company as well as its Controlling Shareholder and De Facto
Controller
□ Applicable √ Not applicable
23
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
XII Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures
for Employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIII Major Related-Party Transactions
1. Continuing Related-Party Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Related-Party Transactions Regarding Purchase or Disposal of Assets or Equity Investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Related-Party Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Amounts Due to and from Related Parties
√Applicable □ Not applicable
Indicate by tick mark whether there were any credits and liabilities with related parties for non-operating purposes.
□ Yes √ No
No such cases in the Reporting Period.
5. Other Major Related-Party Transactions
√Applicable □ Not applicable
Has disclosed on current announcements
Index to the current announcements about the said major related-party transactions disclosed:
Title of announcement Disclosure date Disclosure website
Announcement on Increase of Expected
25 April 2020 www.cninfo.com.cn
Amount of Routine Related-party Transactions
Announcement on Borrowings from De Facto
30 June 2020 www.cninfo.com.cn
Controller and Related-party Transactions
24
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
XIV Occupation of the Company’s Capital by the Controlling Shareholder or any of Its
Related Parties for Non-Operating Purposes
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XV Major Contracts and Execution thereof
1. Entrustment, Contracting and Leases
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leases
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Major Guarantees
√ Applicable □ Not applicable
(1) Guarantees
Unit: RMB'0,000
Guarantees provided by the Company as the parent and its subsidiaries for external parties (exclusive of those for subsidiaries)
Guarante
Disclosure
Actual Having e for a
date of the Line of Actual Type of Term of
Obligor guarantee expired or related
guarantee line guarantee occurrence date guarantee guarantee
amount not party or
announcement
not
Guarantees provided by the Company as the parent for its subsidiaries
Disclosure Guarante
Actual Having
date of the Line of Actual Type of Term of e for a
Obligor guarantee expired or
guarantee line guarantee occurrence date guarantee guarantee related
amount not
announcement party or
25
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
not
From 25
Zhuhai Hongta
December
Renheng 25 December 25 December
7,000 7,000 Joint-liability 2019 to 25 Not Yes
Packaging Co., 2019 2019
December
Ltd.
2024
Zhuhai Hongta From 31
Renheng 31 August August 2019
33,000 31 August 2019 30,000 Joint-liability Not Yes
Packaging Co., 2019 to 30 August
Ltd. 2020
From 20
Zhuhai Hongta
December
Renheng 20 December 20 December
20,000 20,000 Joint-liability 2019 to 20 Not Yes
Packaging Co., 2019 2019
December
Ltd.
2020
Zhuhai Hongta From 15
Renheng 15 August August 2019
10,000 15 August 2019 10,000 Joint-liability Not Yes
Packaging Co., 2019 to 31 July
Ltd. 2020
Zhuhai Hongta
From 28 May
Renheng
28 May 2020 10,000 28 May 2020 10,000 Joint-liability 2020 to 11 Not Yes
Packaging Co.,
March 2021
Ltd.
Zhuhai Hongta
From 25
Renheng
25 April 2019 20,000 25 April 2019 20,000 Joint-liability April 2019 to Not Yes
Packaging Co.,
25 April 2020
Ltd.
Zhuhai Hongta
From 30 June
Renheng
30 June 2020 30,000 30 June 2020 30,000 Joint-liability 2020 to 1 Not Yes
Packaging Co.,
May 2021
Ltd.
Zhuhai Hongta From 15
Renheng 15 January January 2020
13,000 15 January 2020 10,000 Joint-liability Not Yes
Packaging Co., 2020 to 15 January
Ltd. 2021
From 25
Zhuhai Hongta
March 2020
Renheng 25 March
10,000 25 March 2020 10,000 Joint-liability to 26 Not Yes
Packaging Co., 2020
September
Ltd.
2020
Zhuhai Hongta 30 June 2020 17,000 30 June 2020 17,000 Joint-liability From 30 June Not Yes
26
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Renheng 2020 to 30
Packaging Co., June 2021
Ltd.
From 28
Zhuhai Huafeng 28 February 28 February February
5,000 5,000 Joint-liability Not Yes
Paper Co., Ltd. 2020 2020 2020 to 28
August 2020
From 9
September
Zhuhai Huafeng 9 September 9 September
35,000 30,000 Joint-liability 2019 to 9 Not Yes
Paper Co., Ltd. 2019 2019
September
2020
From 11
Zhuhai Huafeng 11 September 11 September September
10,000 10,000 Joint-liability Not Yes
Paper Co., Ltd. 2019 2019 2019 to 31
July 2020
From 12
Huaxin
September
(Foshan) Color 12 September 12 September
4,000 4,000 Joint-liability 2019 to 11 Not Yes
Printing Co., 2019 2019
September
Ltd.
2020
From 26
Huaxin
February
(Foshan) Color 26 February 26 February
3,000 3,000 Joint-liability 2020 to 19 Not Yes
Printing Co., 2020 2020
February
Ltd.
2022
From 24
Huaxin
December
(Foshan) Color 24 December 24 December
8,100 8,100 Joint-liability 2019 to 23 Not Yes
Printing Co., 2019 2019
December
Ltd.
2022
Huaxin
From 25 May
(Foshan) Color
25 May 2020 10,000 25 May 2020 10,000 Joint-liability 2020 to 24 Not Yes
Printing Co.,
May 2021
Ltd.
Huaxin
From 22 July
(Foshan) Color
22 July 2019 5,000 22 July 2019 5,000 Joint-liability 2019 to 21 Not Yes
Printing Co.,
July 2020
Ltd.
Total approved line for such Total actual amount of such
320,000 239,100
guarantees in the Reporting guarantees in the Reporting
27
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Period (B1) Period (B2)
Total approved line for such Total actual balance of such
guarantees at the end of the 320,000 guarantees at the end of the 239,100
Reporting Period (B3) Reporting Period (B4)
Guarantees provided between subsidiaries
Guarante
Disclosure
Actual Having e for a
date of the Line of Actual Type of Term of
Obligor guarantee expired or related
guarantee line guarantee occurrence date guarantee guarantee
amount not party or
announcement
not
Zhuhai Golden
From 18
Pheasant 18 March
12,000 18 March 2020 3,500 Joint-liability March 2020 Not Yes
Chemical Co., 2020
to 17 March
Ltd.
2021
Total approved line for such Total actual amount of such
guarantees in the Reporting 20,000 guarantees in the Reporting 3,500
Period (C1) Period (C2)
Total approved line for such Total actual balance of such
guarantees at the end of the 20,000 guarantees at the end of the 3,500
Reporting Period (C3) Reporting Period (C4)
Total guarantee amount (total of the three kinds of guarantees above)
Total guarantee line approved in Total actual guarantee amount
the Reporting Period 340,000 in the Reporting Period 242,600
(A1+B1+C1) (A2+B2+C2)
Total approved guarantee line at Total actual guarantee balance
the end of the Reporting Period 340,000 at the end of the Reporting 242,600
(A3+B3+C3) Period (A4+B4+C4)
Total actual guarantee amount (A4+B4+C4) as % of the
118.54%
Company’s net assets
Of which:
Balance of guarantees provided for shareholders, actual
0
controller and their related parties (D)
Balance of debt guarantees provided directly or indirectly for
0
obligors with an over 70% debt/asset ratio (E)
Amount by which the total guarantee amount exceeds 50% of
0
the Company’s net assets (F)
Total of the three amounts above (D+E+F) 0
Compound guarantees:
28
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
(2) Irregularities in the Provision of Guarantees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Cash Entrusted for Wealth Management
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Other Significant Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVI Corporate Social Responsibility (CSR)
1. Major Environmental Issues
Indicate by tick mark whether the Company or any of its subsidiaries is a heavily polluting business identified by the environmental
protection authorities of China
Yes
Discharge
Name of Number of Distribution Discharge Approved
Name of Way of standards Total Excessive
major discharge of discharge concentratio total
polluter discharge implemente discharge discharge
pollutants outlets outlets n discharge
d
Sulfur Chemical Chemical
Discharged Sulfur
dioxide, oxygen oxygen
Chemical into water dioxide,
nitrogen demand, demand,
oxygen quality Sewage nitrogen
Hongta oxide, and and
demand, purification 1 disposal oxide, Naught
Renheng smoke are ammonia ammonia
ammonia plant after center smoke are
29.67mg/l nitrogen nitrogen are
nitrogen being 39.62t and
and are≤80mg/l 294.4t and
disposed 0.14t
0.11mg/l and ≤8mg/l 29.44t
Sulfur
Sulfur Sulfur
dioxide, Sulfur
dioxide, dioxide,
Sulfur nitrogen dioxide,
Power nitrogen nitrogen
dioxide, oxide, nitrogen
Hongta Organized boiler of oxide, oxide,
nitrogen 1 smoke are oxide, Naught
Renheng discharge Power smoke are smoke are
oxide, 0.48mg/m3, smoke are
Department ≤50mg/m3, 34.04t,
smoke 53.85mg/m 0.27t, 29.4t
≤100mg/m3 136.15t and
3 and and 3.98t
≤20mg/m3 20.42t
7.47mg/m3
29
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Emissions
Chemical trading and
Chemical Chemical
Discharged oxygen the
oxygen oxygen
Chemical into water demand, chemical
demand, demand,
oxygen quality Sewage and oxygen
Zhuhai and and
demand, purification 1 disposal ammonia demand, Naught
Huafeng ammonia ammonia
ammonia plant after center nitrogen are and
nitrogen are nitrogen are
nitrogen being 31.27mg/l ammonia
≤80mg/l 17.482t and
disposed and nitrogen are
and 8mg/l 0.084t
0.24mg/l 180t and
22.5t
Sulfur
Sulfur
dioxide, Sulfur
dioxide, Sulfur
nitrogen dioxide,
Sulfur nitrogen dioxide,
Power oxide, nitrogen
dioxide, oxide, nitrogen
Zhuhai Organized boiler of smoke are oxide,
nitrogen 1 smoke are oxide, Naught
Huafeng discharge Power 13.67mg/m smoke are
oxide, 50mg/m3, smoke are
Department 3, 10.013t,
smoke 100mg/m3 68t, 142t
58.55mg/m 33.086t and
and and 26t
3, 2.648t
20mg/m3
5.81mg/m3
Secondary
standard of
Phase II of
Emission
Limit for
20m Air
Non-methan Upper-air
Golden discharge Pollution
e emissions
Pheasant 1 outlet after 8.89mg/m (DB44/27-2 3.2004t 22.464t Naught
hydrocarbo after being
Chemical the disposal 001) and
n disposed
of RCO Emission
Limit for
Odor
Pollutants
(GB14554-
1993)
Chemical Chemical Chemical Chemical
Chemical oxygen oxygen oxygen oxygen
Discharged
Golden oxygen Sewage demand, demand, demand, demand,
to sewage
Pheasant demand, 1 disposal and and and and Naught
discharge
Chemical ammonia center ammonia ammonia ammonia ammonia
outlet
nitrogen nitrogen are nitrogen are nitrogen are nitrogen are
4mg/l and ≤350mg/l 0.2016t and 3.528t and
30
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
0.551mg/l and 0.0278t 0.252t
≤25mg/l
First level
standard of
Phase II for
maximum
emission Chemical
Chemical Chemical
concentratio oxygen
oxygen oxygen
Chemical n of Class II demand,
Discharged demand, demand,
Huaxin oxygen Nanzhuang pollutant in and
to sewage and and
Color demand, 1 Jili Sewage Guangdong ammonia Naught
discharge ammonia ammonia
Printing ammonia Surge local nitrogen are
outlet nitrogen are nitrogen are
nitrogen standard- 0.00697t
10mg/l and 0.178t and
Discharge and
0.05mg/l 0.026t
Limit of 0.000035t
Water
Pollutants
(DB44/26-2
001)
II time
period of
lithographic
printing
(excluding
those taking
metal,
Benzene:
ceramic and
0.01L total
glass as the
of
printing
Benzene, methylbenz
Huaxin stock) in
methylbenz Organized Workshop ene and
Color 3 Guangdong / / Naught
ene, xylene, discharge of Phase III xylene :
Printing local
total VOCs 0.13mg/ltot
standard-E
al
mission
VOCs:9.53
Standard for
mg/m3
Volatile
Organic
Compounds
in Printing
Industry
(DB44/815-
2010）
Construction and operation of facilities for preventing pollution:
31
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Hongta Renheng
The Sewage Station and Boiler were all built and operated by the third party. As for sewage, Hongta Renheng belongs to State key
monitoring enterprise; as for smoke, Hongta Renheng belongs to Zhuhai key monitoring enterprise.
1. The company established a Sewage Station whose maximum processing capacity was 12000m3/d, and it was put into service on 1
April 2013 with the investment of RMB14 million through applying A/O technology. The quality of water after such processing could
meet relevant national discharge standards stated in Discharge Standard of Water Pollutants for Pulp & Paper Industry (GB3544-2008),
and waste water (after processing) reaching corresponding standards would be discharged into Qianshan Water Quality Purification
Plant via the municipal sewage pipeline network of Xiangzhou District.
Meanwhile, corresponding COD, ammonia nitrogen, total phosphorus, and total nitrogen, and PH values auto monitoring system would
be installed at the discharge outlet, and the qualified unit would be in charge of its operation management and 24-hour auto online
detection and monitoring of COD, ammonia nitrogen, total phosphorus, and total nitrogen, and PH values.
2. The company established 2 biomass briquette boilers with the operating capacity of 40 tons per hour were installed in association
with relevant dust removal measures. As ceramic multi-tube cyclone dust collector and bag-type dust removal technology were applied
to dispose flue gas, all discharged smoke pollutants, SO2 and nitric oxides via the 25m chimney would meet corresponding discharge
limit standard stated in Emission Standard of Air Pollutants for Boilers (DB44/765-2010). From 1 July 2019 onwards, the emission of
pollutants smoke, sulphur dioxide and nitrogen oxides must comply with the limit requirements of the Emission Standard of Air
Pollutants for Boilers (DB44/765/2019). To meet the requirements for the emission of nitrogen oxides, the Company introduced a set of
SNCR denitration equipment to carry out denitration.
Moreover, corresponding flue gas auto monitoring system would be installed at the discharge outlet, and the qualified unit would be in
charge of its operation management and 24-hour auto online detection and monitoring of discharged SO2, nitric oxides and smoke dust.
Zhuhai Huafeng
The sewage station starts to entrust the third party to operate in 2020. Businesses engaged in waste water and gases are under key
monitoring of the state.
1. The Company established a Sewage Station whose maximum processing capacity was 22000m3/d, and it was put into service on
28 September 2006 with the floor space 21,358m2 and the investment of RMB38 million through applying flocculation precipitation
+ SBR technology. In addition, SBR biochemical system applied Canada ADI company’ s SBR technology, and key devices were all
introduced from foreign countries. The quality of water after such processing could meet relevant national discharge standards stated
in Discharge Standard of Water Pollutants for Pulp & Paper Industry (GB3544-2008), and waste water (after processing) reaching
corresponding standards would be discharged into Nanshui Water Quality Purification Plant via the municipal sewage pipeline
network of Gaolan Port District.
Meanwhile, corresponding COD, ammonia nitrogen, total phosphorus, and total nitrogen, and PH values auto monitoring system
would be installed at the discharge outlet, and the qualified unit would be in charge of its operation management and 24-hour auto
online detection and monitoring of COD, ammonia nitrogen, total phosphorus, and total nitrogen, and PH values.
2. The Company established two self-supplied fire coal CFBs were installed with the operating capacity of 75t per hour in association
with relevant sulphur and dust removal measures. As out-of-furnace alkaline-mode wet desulphurization technology, bag-type dust
remover and wet ESP, low-temperature and low-nitrogen combustion technology + SNCR were applied to dispose flue gas, the
desulfurizationrate is over 90%, the dust removal efficiency would exceed 99.9% and the denitration efficiency over 85%. All
discharged smoke pollutants, SO2 and nitric oxides via the 120m chimney would meet special discharge limit standard stated in
Emission Standard of Air Pollutants for Thermal Power Plants (GB13223-2011).
Moreover, corresponding flue gas auto monitoring system would be installed at the discharge outlet, and the qualified unit would be
in charge of its operation management and 24-hour auto online detection and monitoring of discharged SO2, nitric oxides and smoke
dust.
Note: Companies and their subsidiaries which are classified as key pollutant discharging entities by the environmental protection
32
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
department shall disclose the environmental information pursuant to laws, regulations and department rules, including the names of
major pollutants and characteristic pollutants, discharge methods, quantity and distribution of discharge outlets, discharge
concentration and total volume, excess discharge, pollutant discharge standards adopted, approved total volume of discharge, and
construction and operation of pollution control facilities. Companies that are not classified as key pollutant discharging entities may
disclose their environmental information by reference to the aforementioned requirements. They are encouraged to voluntarily
disclose information that is beneficial to ecological protection, pollution control and the fulfillment of environmental responsibilities.
Golden Pheasant Chemical
Exhaust processing system and sewage station are in normal operation.
1. The company established a Sewage Station whose maximum processing capacity was 70m3/d, and the actual processing capacity was
about 20m3 per day through applying biochemistry, fenton and MBR membrane technology. Sewage disposal facility is running
normally, and waste water (after processing) reaching corresponding standards would be discharged into Nanshui Sewage Disposal
Plant in Zhuhai City via the municipal sewage pipeline network of Gaolan Port District, Zhuhai City. When all industrial waste water
after disposal in sewage station can reach Class 3 Standard during the second period stated in Discharge Limits of Water Pollutants
(DB44/26-2001) and the water entry standard designed by Nanshui Quality Purification Plant, it will be disposed after being discharged
into Nanshui Sewage Disposal Plant in Zhuhai City via the municipal sewage pipeline network of Gaolan Port District, Zhuhai City.
The sewage station has been enclosed.
2. The Company built a new set of regenerative catalytic oxidizer (RCO) exhaust processors, and induced the original Phase I and Phase
II exhaust to that set of system for processing after the pre-treatment by the original filter. Meanwhile, the exhaust after enclosing the
sewage station was sent to this system for treatment. The capacity is 30,000 m3 per hour, and the exhaust will be discharged in an
organized manner once reaching the emission standards after being processed by the processors. Secondary standard of Phase II of
Emission Limit for Air Pollution (DB44/27-2001) and Emission Limit for Odor Pollutants (GB14554-1993) were reached.
Both the unit of waste water devices and the unit of waste gas treatment devices are in normal operations.
Huaxin Color Printing
1. The company has appointed Foshan Green Leaf Environmental Protection Center to operate and maintain its waste water processing
pool, which has been in normal operations since the beginning. The pool adopts the “coagulative precipitation - contact oxidation”
process and has a maximum capacity of 48m3/d. When industrial waste water reaches the primary standard of the second time interval
in Guangdong’s local standard Discharge Limits of Water Pollutants (DB44/26-2001) after being processed by the processing pool, the
reclaimed water will be used to flush toilets (complying with the Water Quality Standard for Urban Miscellaneous Water
Consumption).
2. The company’s organic waste gas is discharged when reaching the second time interval of lithography (excluding the lithography
with metals, ceramics and glass as printing substrates) in Guangdong’s local standard Emission Standard of Volatile Organic
Compounds for Printing Industry (DB44/815-2010) after being processed by three units of secondary low-temperature plasma purifiers.
The devices are in normal operations.
Appraisal of environment influences for construction project and other administrative licensing of environment protection
Hongta Renheng
1. In September 1998, passed the environmental impact assessment for the 150,000-ton high-grade packaging cardboard project by the
State Environmental Protection Administration and Guangdong Province Environmental Protection Bureau respectively (HF [1998]
No. 321 and YHH [1998] No. 208);
2. In 2010, passed the environmental impact assessment for the MBF technical renovation project (ZHJ [2010] No. 5) and the test run
of the renovation project (ZHS [2010] No. 6) by the Environmental Protection Bureau of Zhuhai Municipality;
3. In 2012, obtained the approval for the environmental impact report on the clean production of paper machines and the
comprehensive waste water treatment technology renovation project (ZXHJB [2012] No. 155) by the Environmental Protection Bureau
33
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
of Xiangzhou District;
4. In December 2003, passed the environmental acceptance for the completion of the 150,000-ton high-grade packaging cardboard
project (YHH [2003] No. 969);
5. In 2013, completed the acceptance of the MBF technical renovation project (ZHY [2013] No. 5);
6. In 2014, completed the acceptance of the biochemical treatment of waste water project (ZXHY [2014] No. 10)
7. In 2017, obtained the approval for the environmental impact report on the sludge resource utilization technical project (ZXHJB
[2017] No. 63)
Pollutant discharge permit, No. 91440400617502107U001P; validity period: from 7 June 2020 to 6 June 2025; issued by: Zhuihai
Ecological Environment Bureau-Xiangzhou Branch.
Zhuhai Huafeng
1. The reply letter of review opinions of the State Environmental Protection Administration on the environmental impact report for
the capital increase of Foshan Huafeng Paper Co., Ltd. for building a new project with the annual capacity of 300,000-ton high-grade
coating ivory board (HS [2005] No. 156)
2. The reply letter of opinions on the environmental protection acceptance for the completion of the autonomous MBF environmental
upgrading and technical renovation project of Zhuhai Huafeng Paper Co., Ltd. (ZHY [2015] No. 3)
3. The reply on the environmental assessment for the new annual 60,000-ton ivory board film processing construction project of
Zhuhai Huafeng Paper Co., Ltd. (ZGHJ [2012] No. 115)
4. The review opinions on the environmental impact report for the reuse of reclaimed water project of Zhuhai Huafeng Paper Co.,
Ltd. (ZGHJ [2013] No. 54)
5. The reply on the environmental assessment for the sludge burning project of Zhuhai Huafeng Paper (ZGHJ [2008] No. 69)
6. The review opinions of the Environmental Protection Bureau of Gaolangang District of Zhuhai Municipality on the environmental
assessment report for the expansion of the annual 180,000-ton ivory board production line project of Zhuhai Huafeng Paper Co., Ltd.
(ZGHJ [2014] No. 67)
7. The review opinions on the environmental impact registration for the garbage concentration center of Zhuhai Huafeng Paper Co.,
Ltd. (ZGHJ [2016] No. 58)
8. The approval on the environmental assessment for the waste water treatment renovation project of Zhuhai Huafeng Paper Co., Ltd.
(ZGHJ [2016] No. 106)
Pollution discharge permit, No. 914404006176214217001P; validity period: from 7 June 2020 to 6 June 2025; issued by: Zhuhai
Ecological Environment Bureau-Gaolan Port Branch.
Golden Pheasant Chemical
1. Acceptance inspection of Phase I environmental assessment: ZGHJY[2017] –No.007
2. Acceptance inspection of Phase II environmental assessment: ZGHJY[2016] –No.20
Pollution discharge permit, No. 4404062010000030 renewed on 28 December 2018, and it is valid until 31 July 2021; issued by:
Planning and Construction Environmental Protection Bureau of ZHUHAI GAOLAN PORT ECONOMIC ZONE.
Huaxin Color Printing
1. In August 2004, the project was approved by the Environmental Protection Bureau of Chancheng District of Foshan City through the
document Approval on the Report of the Environmental Impact of the Relocation and Expansion Project of Huaxin (Foshan) Color
Printing Co., Ltd. (No. B2004-0393). In October 2006, the relocation and expansion project of Huaxin (Foshan) Color Printing Co., Ltd.
passed the evaluation on environmental protection, as it was officially approved in the Application for Evaluation on Environmental
Protection of Construction Projects (CHY [2006] No. 149);
2. In May 2008, Chancheng Branch of the Planning Bureau of Foshan City approved the Company’s construction of waste water pool
through the document Opinions on the Planning Conditions of Construction Projects (FG (C) LGZ [2007] No. J223). In September
34
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
2008, the construction project passed the evaluation on environmental protection, as it was officially approved in the Application for
Evaluation on Environmental Protection of Construction Projects (CHY [2008] No. 136);
3. In June 2012, the project was approved by the Environmental Protection Bureau of Chancheng District of Foshan City through the
document Approval on the Report of the Environmental Impact of the Phase III Production Workshop Expansion Project of Huaxin
(Foshan) Color Printing Co., Ltd. (No. CB2012-1-028). In December 2018, evaluation on the environmental protection of the Phase III
production workshop expansion project of Huaxin (Foshan) Color Printing Co., Ltd. was conducted in the form of independent
evaluation.
4. In December 2019, approval was given to the project construction through the Approval of Foshan Municipal Bureau of Ecology
and Environment on the Reconstruction and Expansion of Phase IV Project of Huaxin Color Printing Co., Ltd. and on the
Environmental Impact Assessment Report for the Conversion into a Corporate Project (Foshan Municipal Bureau of Ecology and
Environment FCH (N) S [2019] No. 082).
5. Renewing the pollution discharge permit, No. 4406042010231001; validity period: from 17 October 2018 to 16 October 2021;
issued by: Environmental Protection Bureau of Chancheng District of Foshan City. Currently, the company is applying for the
national pollution discharge permit.
Emergency plan for abrupt environment affairs
Hongta Renheng
Hongta Renheng prepared the Emergency Plan for Environmental Pollution and filed it with Zhuhai Environmental Protection
Bureau Environment Monitoring Branch on 17 December 2015; Filing No.: 44040120150P-L Emergency Plan for Abrupt
Environment Affairs of Zhuhai S.E.Z. Hongta Renheng Paper Co., Ltd. and the Risk Assessment Report for Abrupt Environment
Affairs of Zhuhai S.E.Z. Hongta Renheng Paper Co., Ltd. A new round of filing with Xiangzhou Branch of Zhuhai Environmental
Protection Bureau on 21 March 2019; Filing No.: 440402-2019-016-L Emergency Plan for Abrupt Environment Affairs of Zhuhai
Hongta Renheng Packaging Co., Ltd. and the Risk Assessment Report for Abrupt Environment Affairs of Zhuhai Hongta Renheng
Packaging Co., Ltd.
Zhuhai Huafeng
Zhuhai Huafeng prepared the Emergency Plan for Environmental Pollution and filed it with Environmental Protection Bureau of
ZHUHAI GAOLAN PORT ECONOMIC ZONE on 24 October 2013; and filed the Emergency Plan for Abrupt Environment Affairs
of Zhuhai Huafeng Paper Co., Ltd. (“Zhuhai Huafeng”) and the Risk Assessment Report for Abrupt Environment Affairs of Zhuhai
Huafeng Paper Co., Ltd. (“Zhuhai Huafeng”) with Environmental Emergency Management Office of Department of Environmental
Protection of Guangdong Province on 23 January 23 2015. Reassessment of emergency plan was completed on December 2018, and
it was filed on Environmental Protection Bureau of ZHUHAI GAOLAN PORT.
Golden Pheasant Chemical
Golden Pheasant Chemical prepared the Investigation Report for Environmental Emergency Resources, Time Risk Assessment
Report for Abrupt Environment, and Comprehensive Emergency Plan for Abrupt Environment Affairs and filed them with
Environmental Protection Bureau of ZHUHAI GAOLAN PORT ECONOMIC ZONE on October 2018.
Huaxin Color Printing
Huaxin Color Printing prepared the Emergency Plan for Abrupt Environment Affairs and the Risk Assessment Report for Abrupt
Environment Affairs. Filing No.: 440604-2017-034-L. Currently, the company is renewing the Emergency Plan for Abrupt
Environment Affairs for filing in 2020.
Environment self-monitoring scheme
Hongta Renheng
35
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Hongta Renheng prepared self-monitoring scheme, annual self-monitoring report and self-monitoring result information and
disclosed the same on the Platform for Disclosure of Self-Monitoring Information of State-Controlled Enterprises at the Provincial
Level in Guangdong and the National Pollutant Sources Monitoring Data Management System Platform according to the
requirements of the Measures for the Self-Monitoring and Information Disclosure by the Enterprises subject to Intensive Monitoring
and Control of the State (for Trial Implementation) (HF[2013] No. 81) and the Work Scheme for the Self-Monitoring and Information
Disclosure by the Enterprises subject to Intensive Monitoring and Control of the State. The enterprise self-monitoring content
includes: air pollutant emission monitoring at main exhaust emission outlets, water pollutant emission monitoring at main wastewater
discharge outlets, and factory boundary noise monitoring, as follows:
1. Chemical oxygen demand and ammonia nitrogen shall be monitored every two hours every day and the values monitored shall be
disclosed by monitoring value; biochemical oxygen demand, total phosphorus and total nitrogen shall be monitored once a week and
the values monitored shall be disclosed; other pollutants in the wastewater shall be monitored once a month at least;
2. Sulfur dioxide, nitrogen oxides and particles shall be monitored every hour every day and the values monitored shall be disclosed;
other pollutants in the exhaust shall be monitored once a season at least;
3. Factory boundary noise shall be monitored once a season at least;
4. Factory boundary odor concentration shall be monitored once a season.
If the self-monitoring shall be carried out by an entrusted institution, a social testing institution that is certified by the competent
department of environmental protection at the provincial level or an environment monitoring institution to which the competent
department of environmental protection belongs shall be entrusted to carry out the monitoring task. The environment monitoring
institution to which the competent department of environmental protection belongs that has undertaken a supervisory monitoring task
shall not undertake the self-monitoring entrustment business of the enterprise monitored.
The enterprise has an online monitoring system of chemical oxygen demand, an online monitoring system of ammonia-nitrogen
containing wastewater and an online monitoring system of flue gas. The data of online monitoring systems of chemical oxygen
demand, ammonia-nitrogen, sulfur dioxide, nitrogen oxides and particles shall be disclosed on the Integrated Management Platform
of Key Pollution Sources in Guangdong Province every day; other pollutants shall be monitored by a qualified third party testing
institution that is entrusted according to relevant requirements and then monitoring data shall be disclosed on the Integrated
Management Platform of Key Pollution Sources in Guangdong Province and the Management System Platform of National Pollutant
Sources Monitoring Data.
Zhuhai Huafeng
Zhuhai Huafeng prepared self-monitoring scheme, annual self-monitoring report and self-monitoring result information and disclosed
the same on the Platform for Disclosure of Self-Monitoring Information of State-Controlled Enterprises at the Provincial Level in
Guangdong and the National Pollutant Sources Monitoring Data Management System Platform according to the requirements of the
Measures for the Self-Monitoring and Information Disclosure by the Enterprises subject to Intensive Monitoring and Control of the
State (for Trial Implementation) (HF[2013] No. 81) and the Work Scheme for the Self-Monitoring and Information Disclosure by the
Enterprises subject to Intensive Monitoring and Control of the State. The enterprise self-monitoring content includes: air pollutant
emission monitoring at main exhaust emission outlets, water pollutant emission monitoring at main wastewater discharge outlets, and
factory boundary noise monitoring, as follows:
1. Chemical oxygen demand and ammonia nitrogen shall be monitored every hour every day and the average values shall be
disclosed; other pollutants in the wastewater shall be monitored once a month at least;
2. Sulfur dioxide, nitrogen oxides and particles shall be monitored every hour every day and the average values shall be disclosed;
other pollutants in the exhaust shall be monitored once a season at least;
3. Factory boundary noise shall be monitored once a season at least;
4. Factory boundary odor concentration shall be monitored once a season.
5 The daily monitoring data of PH value, chroma and suspended solids in the wastewater and the weekly monitoring data of total
36
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
phosphorus and total nitrogen shall be disclosed on the Management System Platform of National Pollutant Sources Monitoring
Data.
If the self-monitoring shall be carried out by an entrusted institution, a social testing institution that is certified by the competent
department of environmental protection at the provincial level or an environment monitoring institution to which the competent
department of environmental protection belongs shall be entrusted to carry out the monitoring task. The environment monitoring
institution to which the competent department of environmental protection belongs that has undertaken a supervisory monitoring task
shall not undertake the self-monitoring entrustment business of the enterprise monitored.
The enterprise has an online monitoring system of chemical oxygen demand, an online monitoring system of ammonia-nitrogen
containing wastewater and an online monitoring system of flue gas. The data of online monitoring systems of chemical oxygen
demand, ammonia-nitrogen, sulfur dioxide, nitrogen oxides and particles shall be disclosed on the Integrated Management Platform
of Key Pollution Sources in Guangdong Province every day; other pollutants shall be monitored by a qualified third party institution
that is entrusted according to relevant requirements and then monitoring data shall be disclosed on the Integrated Management
Platform of Key Pollution Sources in Guangdong Province and the Management System Platform of National Pollutant Sources
Monitoring Data.
Golden Pheasant Chemical
In accordance with the requirements of the Work Scheme for the Self-Monitoring and Information Disclosure by the Enterprises
subject to Intensive Monitoring and Control of the State, Golden Pheasant Chemical entrusts a qualified third party testing institution
to conduct wastewater and factory boundary noise test every year, as follows:
1. Biochemical oxygen demand, ammonia nitrogen, suspended solids and chemical oxygen demand test shall be conducted four times
a year at least;
2. Factory boundary noise test shall be conducted once a year at least.
3. LDAR test shall be conducted once a quarter.
Huaxin Color Printing
Huaxin Color Printing entrusts a qualified third party testing institution to conduct wastewater, exhaust and factory boundary noise
test every year, as follows:
(1) Industrial wastewater (PH value, ammonia nitrogen, suspended solids, chemical oxygen demand, biochemical oxygen demand,
chroma, sulfides, total nitrogen and total phosphorus) test shall be conducted twice a year at least;
(2) Organized organic waste gases (Benzene, toluene, xylene and total VOCs) test shall be conducted twice a year at least;
(3) Unorganized organic waste gases (Benzene, toluene, xylene and total VOCs) test shall be conducted once a year at least;
(4) Factory boundary noise test shall be conducted four times a year at least.
Other environment-related information that should be disclosed:
None
Other information about environment protection
None
2. Measures Taken for Targeted Poverty Alleviation
(1) Plans
The Company will carry out the targeted poverty alleviation according to the poverty alleviation plan and arrangements of China
Paper Corporation.
37
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
(2) Summary of the Related Work Done in the Reporting Period
The Company conscientiously implemented the strategic plans of the central government for poverty alleviation, and followed the
arrangements of China Paper. First, it actively participated in the donation of anti-epidemic supplies to Yiyang County, including
RMB40,000 in total on buying masks and protective clothing to assist in the epidemic prevention of the hospitals and government in
Yiyang. Second, it arranged to appropriate poverty alleviation fund of RMB50,000 to the National Treasury Center of Yiyang
County in Henan Province. Third, it organized to buy characteristic agricultural products worth of RMB61761 from targeted poverty
alleviation areas.
(3) Results
Measurement
Indicator Quantity/Progress
unit
1. General results —— ——
Of which: 1.1 Funds Ten thousand 9
1.2 Money converted from materials Ten thousand 6.18
1.3 Number of poor persons with filing achieving poverty alleviation Person 0
2. Itemized results —— ——
2.1 Out of poverty by industrial development —— ——
2.1.2 Number of industrial development programs for
Piece 0
poverty alleviation
2.2.3 Input in industrial development programs for poverty
Ten thousand 6.18
alleviation
2.2.4 Number of poor persons with filing achieving poverty
Person 0
alleviation
2.2 Out of poverty by transferring employment —— ——
Of which: 2.2.1 Input in vocational training Ten thousand 0
2.2.2 Number of persons with vocational training Person 0
2.2.3 Number of poor persons with filing finding jobs with
Person 0
help
2.3 Out of poverty by relocation —— ——
Of which: 2.3.1 Number of relocation persons finding jobs with help Person 0
2.4 Out of poverty by education —— ——
Of which: 2.4.1 Amount for funding poor students Ten thousand 0
2.4.2 Number of poor students funded Person 0
2.4.3 Input in improving education resources in poor regions Ten thousand 0
2.5 Out of poverty by improving health —— ——
Of which: 2.5.1 Input in health resources in poor regions Ten thousand 0
38
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
2.6 Out of poverty by protecting ecological environment —— ——
Of which: 2.6.2 Input amount Ten thousand 0
2.7 Subsidy for the poorest —— ——
Of which: 2.7.1 Input in left-behind elderly, women and children Ten thousand 0
2.7.2 Number of helped left-behind elderly, women and
Person 0
children
2.7.3 Input in poor persons with disabilities Ten thousand 0
2.7.4 Number of poor persons with disabilities helped Person 0
2.8 Social poverty alleviation —— ——
Of which: 2.8.1 Amount of input through East-West Poor Alleviation
Ten thousand 0
Cooperation
2.8.2 Input in targeted poverty alleviation Ten thousand 9
2.8.3 Input in public welfare fund for poverty alleviation Ten thousand 0
2.9 Other items —— ——
Of which: 2.9.1 Number of items Piece 0
2.9.2 Input amount Ten thousand 0
2.9.3. Number of poor persons with filing achieving poverty
Person 0
alleviation
3. Accolades received (for what and at what level) —— ——
(4) Subsequent Plans
The Company will continuously carry out the targeted poverty-relief work with China Paper Corporation according to the
implementation plan of poverty alleviation project of China Paper Corporation, and continuously carry out the subsequent targeted
poverty alleviation plan.
XVII Other Significant Events
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XVIII Significant Events of Subsidiaries
□ Applicable √ Not applicable
39
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Part VI Share Changes and Shareholder Information
I Share Changes
1. Share Changes
Unit: share
Before Increase/decrease in the Reporting Period (+/-) After
Shares as
Shares as
dividend
dividend
Percentag New converted Percentag
Shares converted Other Subtotal Shares
e (%) issues from e (%)
from
capital
profit
reserves
333,500,0 333,500,0
1. Private shares 65.98% 65.98%
00 00
333,500,0 333,500,0
1.1 Promoter’s shares 65.98% 65.98%
00 00
Of which: such shares held
0 0.00% 0 0.00%
by state
Such shares held 332,930,2 332,930,2
65.87% 65.87%
by domestic legal persons 90 90
Such shares held
0 0.00% 0 0.00%
by foreign legal persons
Other 569,710 0.11% 569,710 0.11%
1.2. Legal persons’
0 0.00% 0 0.00%
shares raised
1.3 Staff-held shares 0 0.00% 0 0.00%
1.4 Preferred shares or
0 0.00% 0 0.00%
others
171,925,0 171,925,0
2. Public shares 34.02% 34.02%
00 00
2.1 RMB ordinary
0 0.00% 0 0.00%
shares
2.2 Domestically listed 171,925,0 171,925,0
34.02% 34.02%
foreign shares 00 00
2.3 Overseas listed
0 0.00% 0 0.00%
foreign shares
40
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
2.4 Other 0 0.00% 0 0.00%
505,425,0 505,425,0
3. Total shares 100.00% 100.00%
00 00
Reasons for share changes:
□ Applicable √ Not applicable
Approval of share changes:
□ Applicable √ Not applicable
Transfer of share ownership:
□ Applicable √ Not applicable
Progress on any share repurchase:
□ Applicable √ Not applicable
Progress on reducing the repurchased shares by means of centralized bidding:
□ Applicable √ Not applicable
Effects of share changes on the basic and diluted earnings per share, equity per share attributable to the Company’s ordinary
shareholders and other financial indicators of the prior year and the prior accounting period, respectively:
□ Applicable √ Not applicable
Other information that the Company considers necessary or is required by the securities regulator to be disclosed:
□ Applicable √ Not applicable
2. Changes in Restricted Shares
□ Applicable √ Not applicable
II Issuance and Listing of Securities
□ Applicable √ Not applicable
III Shareholders and Their Holdings as at the Period-End
Unit: share
Number of preferred
Number of ordinary shareholders with resumed
12,553 0
shareholders voting rights (if any) (see note
8)
5% or greater ordinary shareholders or top 10 ordinary shareholders
Total Increase Shares in pledge or frozen
Private Public
ordinary /decreas
Name of Nature of Shareholdin ordinary ordinary
shares held e in the
shareholder shareholder g percentage shares shares Status Shares
at the Reportin
held held
period-end g Period
FOSHAN State-owned legal 65.20% 329,512,030 0 329,512,
41
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
HUAXIN person 030
DEVELOPME
NT CO., LTD.
WU Foreign natural 3,127,29
0.62% 3,127,291 0
HAOYUAN person 1
GUOTAI
JUNAN
Foreign legal -104720 2,156,80
SECURITIES( 0.43% 2,156,804
person 6 4
HONGKONG)
LIMITED
ZHAI Domestic natural 2,066,80
0.41% 2,066,800 12600
YUZHEN person 0
Domestic natural 1,940,40
CAI YUJIU 0.38% 1,940,400 -29200
person 0
Domestic natural 1,512,90
MIU JUN 0.30% 1,512,900 -39500
person 0
NORGES Foreign legal 1,352,72
0.27% 1,352,720 0
BANK person 0
ESSENCE
INTERNATIO
NAL
Foreign legal 1,205,25
SECURITIES 0.24% 1,205,252 0
person 2
(HONG
KONG) CO.,
LTD.
FOSHAN
CHAN BEN
State-owned legal 1,139,42
DE ASSET 0.23% 1,139,420 0
person 0
MANAGEME
NT CO., LTD
Domestic natural 1,011,30
ZHANG LI 0.20% 1,011,300 0
person 0
Related or acting-in-concert parties It is unknown whether there is among the above shareholders any related or acting-in-concert
among the shareholders above party as defined in the Administrative Measures for the Acquisition of Listed Companies
Top 10 public ordinary shareholders
Shares by type
Name of shareholder Public ordinary shares held at the period-end
Type Shares
Domestically
WU HAOYUAN 3,127,291 listed foreign 3,127,291
stock
42
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
GUOTAI JUNAN Domestically
SECURITIES(HONGKONG) 2,156,804 listed foreign 2,156,804
LIMITED stock
Domestically
ZHAI YUZHEN 2,066,800 listed foreign 2,066,800
stock
Domestically
CAI YUJIU 1,940,400 listed foreign 1,940,400
stock
Domestically
MIU JUN 1,512,900 listed foreign 1,512,900
stock
Domestically
NORGES BANK 1,352,720 listed foreign 1,352,720
stock
ESSENCE INTERNATIONAL Domestically
SECURITIES (HONG KONG) 1,205,252 listed foreign 1,205,252
CO., LTD. stock
Domestically
ZHANG LI 1,011,300 listed foreign 1,011,300
stock
Domestically
HE WEI 986,103 listed foreign 986,103
stock
Domestically
MA ZEQI 959,762 listed foreign 959,762
stock
Related or acting-in-concert parties
among the top 10 unrestricted
ordinary shareholders, as well as It is unknown whether there is among the above shareholders any related or acting-in-concert
between the top 10 unrestricted party as defined in the Administrative Measures for the Acquisition of Listed Companies.
ordinary shareholders and the top 10
ordinary shareholders
Top 10 ordinary shareholders
involved in securities margin None
trading (if any) (see note 4)
Indicate by tick mark whether any of the top 10 ordinary shareholders or the top 10 unrestricted ordinary shareholders of the Company
conducted any promissory repo during the Reporting Period.
□ Yes √ No
No such cases in the Reporting Period.
43
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
IV Change of the Controlling Shareholder or the De Facto Controller
Change of the controlling shareholder in the Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
Change of the de facto controller in the Reporting Period
□ Applicable √ Not applicable
No such cases in the Reporting Period.
44
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Part VII Preference Shares
□ Applicable √ Not applicable
No preference shares in the Reporting Period.
45
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Part VIII Convertible Corporate Bonds
□ Applicable √ Not applicable
No convertible corporate bonds in the Reporting Period.
46
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Part IX Directors, Supervisors and Senior Management
I Change in Shareholdings of Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
Restricted Restricted
Increase in Decrease
shares shares Restricted shares
Beginning the in the Ending
Incumbent granted at the granted in the granted at the
Name Office title shareholdi Reporting Reporting shareholdi
/Former beginning of Reporting end of the period
ng (share) Period Period ng (share)
the period Period (share)
(share) (share)
(share) (share)
Huang Chairman of
Former
Xin the Board
Zhong Chairman of
Incumbent
Tianqi the Board
Vice
Ren
Chairman of
Xiaopin Incumbent
the Board,
g
GM
Zhang
Director Former
Qiang
Ye
Director Incumbent
Meng
Director,
Li Fei Incumbent
Vice GM
Zhou
Director Incumbent
Gaosong
Zhang Independent
Incumbent
Wenjing Director
Independent
Li Jun Incumbent
Director
Lu Independent
Incumbent
Guihua Director
Chairman of
Ren
the
Xiaomin Incumbent
Supervisory
g
Committee
Zhang
Supervisor Incumbent 14,600 0 0 14,600
Hong
Zhao Employee Incumbent
47
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Yaxing supervisor
Vice GM,
Ding
CFO, and
Guoqian Incumbent
Board
g
Secretary
Wu
Vice GM Incumbent 0 28,200 0 28,200
Yirong
Zhang
Vice GM Incumbent
Chunhua
Total -- -- 14,600 28,200 0 42,800 0 0 0
II Change of Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
Name Office title Type of change Date of change Reason for change
Chairman of the
Huang Xin Left 10 March 2020 Resignation and arrangement from the Party
Board
Chairman of the
Zhong Tianqi Elected 24 March 2020 Elected by general meeting
Board
Zhang Qiang Director Left 24 April 2020 Resignation and arrangement from the Party
48
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Part X Corporate Bonds
Does the Company have any corporate bonds publicly offered on the stock exchange, which were outstanding before the date of this
Report’s approval or were due but could not be redeemed in full?
No.
49
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Part XI Financial Statements
I Independent Auditor’s Report
Are these interim financial statements audited by an independent auditor?
□Yes √ No
These interim financial statements have not been audited by an independent auditor.
II Financial Statements
Currency unit for the financial statements and the notes thereto: RMB
1. Consolidated Balance Sheet
Prepared by Foshan Huaxin Packaging Co., Ltd.
Unit: RMB
Item 30 June 2020 31 December 2019
Current assets:
Monetary assets 685,828,177.57 213,743,010.81
Settlement reserve
Interbank loans granted
Held-for-trading financial assets
Derivative financial assets
Notes receivable 1,101,664.07
Accounts receivable 604,995,966.23 861,496,771.58
Accounts receivable financing 561,162,410.89 573,333,722.20
Prepayments 93,568,865.59 31,443,452.10
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract
reserve
Other receivables 63,463,113.64 41,390,516.58
Including: Interest receivable 20,206,542.99
Dividends receivable 28,000,000.00 28,000,000.00
Financial assets purchased under
resale agreements
50
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Inventories 649,651,989.90 660,926,072.21
Contract assets
Assets held for sale
Current portion of non-current assets
Other current assets 229,498,035.35 237,644,272.39
Total current assets 2,888,168,559.17 2,621,079,481.94
Non-current assets:
Loans and advances to customers
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 669,501,198.91 655,312,367.55
Investments in other equity
instruments
Other non-current financial assets 288,700.00 288,700.00
Investment property 28,777,952.24 29,115,661.86
Fixed assets 2,000,531,709.38 2,067,109,815.77
Construction in progress 59,082,753.75 33,321,697.05
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 120,470,102.64 127,168,024.42
Development costs 3,552,425.84 3,550,832.92
Goodwill 11,547,305.29 11,547,305.29
Long-term prepaid expense 4,500,441.92 3,478,736.33
Deferred income tax assets 31,250,198.70 31,250,198.70
Other non-current assets 13,350.00 8,420,488.55
Total non-current assets 2,929,516,138.67 2,970,563,828.44
Total assets 5,817,684,697.84 5,591,643,310.38
Current liabilities:
Short-term borrowings 879,070,896.82 1,163,487,459.95
Borrowings from the central bank
Interbank loans obtained
Held-for-trading financial liabilities
51
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Derivative financial liabilities
Notes payable 698,959,029.44 312,234,422.87
Accounts payable 347,362,009.93 321,955,510.64
Advances from customers 16,944,581.70 23,303,552.10
Contract liabilities 16,680,827.04
Financial assets sold under
repurchase agreements
Customer deposits and interbank
deposits
Payables for acting trading of
securities
Payables for underwriting of
securities
Employee benefits payable 29,777,438.93 42,342,384.19
Taxes payable 17,476,292.94 13,467,917.06
Other payables 164,120,140.91 49,222,655.01
Including: Interest payable 255,713.64
Dividends payable 238,138.78 229,593.13
Handling charges and commissions
payable
Reinsurance payables
Liabilities directly associated with
assets held for sale
Current portion of non-current
100,229,305.56
liabilities
Other current liabilities
Total current liabilities 2,170,391,217.71 2,026,243,207.38
Non-current liabilities:
Insurance contract reserve
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits
payable
Provisions 1,696,811.00 1,696,811.00
52
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Deferred income 25,279,299.24 26,604,363.11
Deferred income tax liabilities 2,180,826.02 2,180,826.02
Other non-current liabilities
Total non-current liabilities 29,156,936.26 30,482,000.13
Total liabilities 2,199,548,153.97 2,056,725,207.51
Owners’ equity:
Share capital 505,425,000.00 505,425,000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 256,822,373.42 256,822,373.42
Less: Treasury stock
Other comprehensive income 169,714.39 169,714.39
Specific reserve
Surplus reserves 199,022,513.20 199,022,513.20
General reserve
Retained earnings 1,085,200,342.99 1,045,211,890.50
Total equity attributable to owners of
2,046,639,944.00 2,006,651,491.51
the Company as the parent
Non-controlling interests 1,571,496,599.87 1,528,266,611.36
Total owners’ equity 3,618,136,543.87 3,534,918,102.87
Total liabilities and owners’ equity 5,817,684,697.84 5,591,643,310.38
Legal representative: Ren Xiaoping Chief Financial Officer: Ding Guoqiang Financial Manager: Luo Jing
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item 30 June 2020 31 December 2019
Current assets:
Monetary assets 53,851,374.37 5,342,379.55
Held-for-trading financial assets
Derivative financial assets
Notes receivable
Accounts receivable 750.37
Accounts receivable financing 4,245,280.00
53
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Prepayments 1,520,171.41
Other receivables 29,861,865.51 53,371,168.86
Including: Interest receivable 584,375.00
Dividends receivable 28,000,000.00 28,000,000.00
Inventories 10,568,258.89
Contract assets
Assets held for sale
Current portion of non-current assets
Other current assets 1,511,607.58 135,661.98
Total current assets 101,559,308.13 58,849,210.39
Non-current assets:
Investments in debt obligations
Investments in other debt obligations
Long-term receivables
Long-term equity investments 1,711,281,509.46 1,696,777,505.79
Investments in other equity
instruments
Other non-current financial assets 288,700.00 288,700.00
Investment property
Fixed assets 60,873.21 69,775.81
Construction in progress
Productive living assets
Oil and gas assets
Right-of-use assets
Intangible assets 61,581.69 72,990.24
Development costs
Goodwill
Long-term prepaid expense 101,046.81 123,501.67
Deferred income tax assets
Other non-current assets
Total non-current assets 1,711,793,711.17 1,697,332,473.51
Total assets 1,813,353,019.30 1,756,181,683.90
Current liabilities:
Short-term borrowings 50,000,000.00
54
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Held-for-trading financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 1,338,907.20
Advances from customers 1,699,834.29
Contract liabilities
Employee benefits payable 20,758.25 114,646.21
Taxes payable 38,168.90 4,685.50
Other payables 328,073.50 280,301.76
Including: Interest payable
Dividends payable 238,138.78 229,593.13
Liabilities directly associated with
assets held for sale
Current portion of non-current
liabilities
Other current liabilities
Total current liabilities 53,425,742.14 399,633.47
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Lease liabilities
Long-term payables
Long-term employee benefits
payable
Provisions
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities 53,425,742.14 399,633.47
Owners’ equity:
Share capital 505,425,000.00 505,425,000.00
Other equity instruments
55
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Including: Preferred shares
Perpetual bonds
Capital reserves 250,531,482.00 250,531,482.00
Less: Treasury stock
Other comprehensive income
Specific reserve
Surplus reserves 199,022,513.20 199,022,513.20
Retained earnings 804,948,281.96 800,803,055.23
Total owners’ equity 1,759,927,277.16 1,755,782,050.43
Total liabilities and owners’ equity 1,813,353,019.30 1,756,181,683.90
3. Consolidated Income Statement
Unit: RMB
Item H1 2020 H1 2019
1. Revenue 1,849,582,374.70 1,733,126,237.68
Including: Operating revenue 1,849,582,374.70 1,733,126,237.68
Interest income
Insurance premium income
Handling charge and
commission income
2. Costs and expenses 1,781,696,068.57 1,752,775,592.86
Including: Cost of sales 1,512,306,706.55 1,539,779,030.57
Interest expense
Handling charge and
commission expense
Surrenders
Net insurance claims paid
Net amount provided as
insurance contract reserve
Expenditure on policy
dividends
Reinsurance premium
expense
Taxes and surcharges 11,773,959.36 10,096,572.28
Selling expense 89,364,894.20 69,402,517.15
Administrative expense 48,672,339.16 50,498,247.03
56
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
R&D expense 90,479,878.01 52,474,320.32
Finance costs 29,098,291.29 30,524,905.51
Including: Interest
37,938,735.50 36,967,366.21
expense
Interest
11,469,676.77 8,948,675.02
income
Add: Other income 10,070,822.18 3,936,321.35
Return on investment (“-” for loss) 14,188,831.36 16,774,990.13
Including: Share of profit or loss
14,188,831.36 16,774,990.13
of joint ventures and associates
Income from the
derecognition of financial assets at
amortized cost (“-” for loss)
Exchange gain (“-” for loss)
Net gain on exposure hedges (“-”
for loss)
Gain on changes in fair value (“-”
for loss)
Credit impairment loss (“-” for
-465,085.02
loss)
Asset impairment loss (“-” for loss) -44,711.85
Asset disposal income (“-” for
-69,442.59 -16,367.16
loss)
3. Operating profit (“-” for loss) 91,611,432.06 1,000,877.29
Add: Non-operating income 3,426,822.06 1,010,381.90
Less: Non-operating expense 1,079,186.63 873,583.84
4. Profit before tax (“-” for loss) 93,959,067.49 1,137,675.35
Less: Income tax expense 3,159,251.49 3,245,990.34
5. Net profit (“-” for net loss) 90,799,816.00 -2,108,314.99
5.1 By operating continuity
5.1.1 Net profit from continuing
90,799,816.00 -2,108,314.99
operations (“-” for net loss)
5.1.2 Net profit from discontinued
operations (“-” for net loss)
5.2 By ownership
5.2.1 Net profit attributable to
47,569,827.49 10,489,265.80
owners of the Company as the parent
5.2.1 Net profit attributable to
43,229,988.51 -12,597,580.79
non-controlling interests
57
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
6. Other comprehensive income, net of
tax
Attributable to owners of the Company
as the parent
6.1 Items that will not be
reclassified to profit or loss
6.1.1 Changes caused by
remeasurements on defined benefit
schemes
6.1.2 Other comprehensive
income that will not be reclassified to
profit or loss under the equity method
6.1.3 Changes in the fair value of
investments in other equity instruments
6.1.4 Changes in the fair value
arising from changes in own credit risk
6.1.5 Other
6.2 Items that will be reclassified to
profit or loss
6.2.1 Other comprehensive
income that will be reclassified to profit
or loss under the equity method
6.2.2 Changes in the fair value of
investments in other debt obligations
6.2.3 Other comprehensive
income arising from the reclassification
of financial assets
6.2.4 Credit impairment
allowance for investments in other debt
obligations
6.2.5 Reserve for cash flow
hedges
6.2.6 Differences arising from the
translation of foreign
currency-denominated financial
statements
6.2.7 Other
Attributable to non-controlling
interests
7. Total comprehensive income 90,799,816.00 -2,108,314.99
Attributable to owners of the Company
47,569,827.49 10,489,265.80
as the parent
Attributable to non-controlling 43,229,988.51 -12,597,580.79
58
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
interests
8. Earnings per share
8.1 Basic earnings per share 0.0941 0.0208
8.2 Diluted earnings per share 0.0941 0.0208
Where business combinations under common control occurred in the current period, the net profit achieved by the acquirees before
the combinations was RMB0.00, with the amount for last year being RMB0.00.
Legal representative: Ren Xiaoping Chief Financial Officer: Ding Guoqiang Financial Manager: Luo Jing
4. Income Statement of the Company as the Parent
Unit: RMB
Item H1 2020 H1 2019
1. Operating revenue 15,327,349.86 0.00
Less: Cost of sales 15,122,657.95 0.00
Taxes and surcharges
Selling expense 189,514.86
Administrative expense 2,916,376.08 1,666,382.33
R&D expense
Finance costs -121,415.60 -449,112.53
Including: Interest expense 526,763.89 361,440.69
Interest income 689,987.84 815,925.83
Add: Other income 50,000.00
Return on investment (“-” for
14,504,003.67 16,714,852.01
loss)
Including: Share of profit or
14,504,003.67 16,714,852.01
loss of joint ventures and associates
Income from the
derecognition of financial assets at
amortized cost (“-” for loss)
Net gain on exposure hedges (“-”
for loss)
Gain on changes in fair value (“-”
for loss)
Credit impairment loss (“-” for
2,381.49
loss)
Asset impairment loss (“-” for
7,369.57
loss)
Asset disposal income (“-” for
59
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
loss)
2. Operating profit (“-” for loss) 11,726,601.73 15,554,951.78
Add: Non-operating income
Less: Non-operating expense
3. Profit before tax (“-” for loss) 11,726,601.73 15,554,951.78
Less: Income tax expense
4. Net profit (“-” for net loss) 11,726,601.73 15,554,951.78
4.1 Net profit from continuing
11,726,601.73 15,554,951.78
operations (“-” for net loss)
4.2 Net profit from discontinued
operations (“-” for net loss)
5. Other comprehensive income, net of
tax
5.1 Items that will not be reclassified
to profit or loss
5.1.1 Changes caused by
remeasurements on defined benefit
schemes
5.1.2 Other comprehensive income
that will not be reclassified to profit or
loss under the equity method
5.1.3 Changes in the fair value of
investments in other equity instruments
5.1.4 Changes in the fair value
arising from changes in own credit risk
5.1.5 Other
5.2 Items that will be reclassified to
profit or loss
5.2.1 Other comprehensive income
that will be reclassified to profit or loss
under the equity method
5.2.2 Changes in the fair value of
investments in other debt obligations
5.2.3 Other comprehensive income
arising from the reclassification of
financial assets
5.2.4 Credit impairment allowance
for investments in other debt
obligations
5.2.5 Reserve for cash flow hedges
5.2.6 Differences arising from the
60
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
translation of foreign
currency-denominated financial
statements
5.2.7 Other
6. Total comprehensive income 11,726,601.73 15,554,951.78
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
5. Consolidated Cash Flow Statement
Unit: RMB
Item H1 2020 H1 2019
1. Cash flows from operating activities:
Proceeds from sale of commodities
2,027,279,698.26 1,420,153,927.58
and rendering of services
Net increase in customer deposits and
interbank deposits
Net increase in borrowings from the
central bank
Net increase in loans from other
financial institutions
Premiums received on original
insurance contracts
Net proceeds from reinsurance
Net increase in deposits and
investments of policy holders
Interest, handling charges and
commissions received
Net increase in interbank loans
obtained
Net increase in proceeds from
repurchase transactions
Net proceeds from acting trading of
securities
Tax rebates 250,005.75
Cash generated from other operating
21,463,578.42 17,859,351.29
activities
Subtotal of cash generated from
2,048,993,282.43 1,438,013,278.87
operating activities
Payments for commodities and 1,287,519,715.20 1,439,403,589.85
61
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
services
Net increase in loans and advances to
customers
Net increase in deposits in the central
bank and in interbank loans granted
Payments for claims on original
insurance contracts
Net increase in interbank loans
granted
Interest, handling charges and
commissions paid
Policy dividends paid
Cash paid to and for employees 106,682,764.90 103,603,715.32
Taxes paid 57,223,710.64 35,598,899.66
Cash used in other operating
50,335,082.14 208,567,873.83
activities
Subtotal of cash used in operating
1,501,761,272.88 1,787,174,078.66
activities
Net cash generated from/used in
547,232,009.55 -349,160,799.79
operating activities
2. Cash flows from investing activities:
Proceeds from disinvestment
Return on investment 10,000,000.00
Net proceeds from the disposal of
fixed assets, intangible assets and other
long-lived assets
Net proceeds from the disposal of
subsidiaries and other business units
Cash generated from other investing
116,700,000.00 132,200,000.00
activities
Subtotal of cash generated from
116,700,000.00 142,200,000.00
investing activities
Payments for the acquisition of fixed
assets, intangible assets and other 35,332,114.48 9,759,873.97
long-lived assets
Payments for investments
Net increase in pledged loans granted
Net payments for the acquisition of
subsidiaries and other business units
Cash used in other investing
672,700,000.00 15,000,000.00
activities
62
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Subtotal of cash used in investing
708,032,114.48 24,759,873.97
activities
Net cash generated from/used in
-591,332,114.48 117,440,126.03
investing activities
3. Cash flows from financing activities:
Capital contributions received
Including: Capital contributions by
non-controlling interests to subsidiaries
Borrowings raised 721,433,076.78 1,278,585,742.47
Cash generated from other financing
400,000,000.00
activities
Subtotal of cash generated from
1,121,433,076.78 1,278,585,742.47
financing activities
Repayment of borrowings 1,114,322,009.71 901,879,065.08
Interest and dividends paid 28,833,648.15 46,641,940.65
Including: Dividends paid by
subsidiaries to non-controlling interests
Cash used in other financing
32,064,764.25 26,501,660.17
activities
Subtotal of cash used in financing
1,175,220,422.11 975,022,665.90
activities
Net cash generated from/used in
-53,787,345.33 303,563,076.57
financing activities
4. Effect of foreign exchange rates
7,815,630.53 999,215.04
changes on cash and cash equivalents
5. Net increase in cash and cash
-90,071,819.73 72,841,617.85
equivalents
Add: Cash and cash equivalents,
213,743,010.81 133,983,939.73
beginning of the period
6. Cash and cash equivalents, end of the
123,671,191.08 206,825,557.58
period
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item H1 2020 H1 2019
1. Cash flows from operating activities:
Proceeds from sale of commodities
14,723,709.34
and rendering of services
Tax rebates
Cash generated from other operating 142,449.73 46,286,613.99
63
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
activities
Subtotal of cash generated from
14,866,159.07 46,286,613.99
operating activities
Payments for commodities and
29,212,000.29
services
Cash paid to and for employees 1,087,150.21 652,205.17
Taxes paid -18,316.37
Cash used in other operating
2,214,368.84 40,031,650.81
activities
Subtotal of cash used in operating
32,513,519.34 40,665,539.61
activities
Net cash generated from/used in
-17,647,360.27 5,621,074.38
operating activities
2. Cash flows from investing activities:
Proceeds from disinvestment
Return on investment 10,000,000.00
Net proceeds from the disposal of
fixed assets, intangible assets and other
long-lived assets
Net proceeds from the disposal of
subsidiaries and other business units
Cash generated from other investing
24,258,390.01
activities
Subtotal of cash generated from
24,258,390.01 10,000,000.00
investing activities
Payments for the acquisition of fixed
assets, intangible assets and other
long-lived assets
Payments for investments
Net payments for the acquisition of
subsidiaries and other business units
Cash used in other investing
50,000,000.00
activities
Subtotal of cash used in investing
50,000,000.00
activities
Net cash generated from/used in
-25,741,609.99 10,000,000.00
investing activities
3. Cash flows from financing activities:
Capital contributions received
Borrowings raised 50,000,000.00
Cash generated from other financing
64
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
activities
Subtotal of cash generated from
50,000,000.00
financing activities
Repayment of borrowings
Interest and dividends paid 8,134,433.16 221,339.99
Cash used in other financing
activities
Subtotal of cash used in financing
8,134,433.16 221,339.99
activities
Net cash generated from/used in
41,865,566.84 -221,339.99
financing activities
4. Effect of foreign exchange rates
changes on cash and cash equivalents
5. Net increase in cash and cash
-1,523,403.42 15,399,734.39
equivalents
Add: Cash and cash equivalents,
5,374,777.79 357,681.85
beginning of the period
6. Cash and cash equivalents, end of the
3,851,374.37 15,757,416.24
period
7. Consolidated Statements of Changes in Owners’ Equity
H1 2020
Unit: RMB
H1 2020
Equity attributable to owners of the Company as the parent
Other equity Other Non-c
Total
instruments Less: compr Surplu Retain ontroll
Item Capital Specifi Genera owners
Share
Prefe Perpe Treasu ehensi s ed Subtot ing
capita reserve c l Other ’
rred tual ry ve reserve earnin al interes
l Other s reserve reserve equity
share bond stock incom s gs ts
s s e
1. Balance as at 505,4 256,82 199,02 1,045, 2,006, 1,528, 3,534,
169,71
the end of the 25,00 2,373. 2,513. 211,89 651,49 266,61 918,10
4.39
prior year 0.00 42 20 0.50 1.51 1.36 2.87
Add:
Adjustment for
change in
accounting
policy
Adjustment
for correction of
65
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
previous error
Adjustment
for business
combination
under common
control
Other
adjustments
2. Balance as at 505,4 256,82 199,02 1,045, 2,006, 1,528, 3,534,
169,71
the beginning of 25,00 2,373. 2,513. 211,89 651,49 266,61 918,10
4.39
the year 0.00 42 20 0.50 1.51 1.36 2.87
3. Increase/
39,988 39,988 43,229 83,218
decrease in the
,452.4 ,452.4 ,988.5 ,441.0
period (“-” for
9 9 1 0
decrease)
3.1 Total 47,569 47,569 43,229 90,799
comprehensive ,827.4 ,827.4 ,988.5 ,816.0
income 9 9 1 0
3.2 Capital
increased and
reduced by
owners
3.2.1
Ordinary shares
increased by
owners
3.2.2
Capital
increased by
holders of other
equity
instruments
3.2.3
Share-based
payments
included in
owners’ equity
3.2.4 Other
3.3 Profit -7,581, -7,581, -7,581,
distribution 375.00 375.00 375.00
3.3.1
Appropriation
to surplus
66
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
reserves
3.3.2
Appropriation
to general
reserve
3.3.3
Appropriation -7,581, -7,581, -7,581,
to owners (or 375.00 375.00 375.00
shareholders)
3.3.4 Other
3.4 Transfers
within owners’
equity
3.4.1
Increase in
capital (or share
capital) from
capital reserves
3.4.2
Increase in
capital (or share
capital) from
surplus reserves
3.4.3 Loss
offset by surplus
reserves
3.4.4
Changes in
defined benefit
schemes
transferred to
retained
earnings
3.4.5 Other
comprehensive
income
transferred to
retained
earnings
3.4.6 Other
3.5 Specific
reserve
3.5.1
67
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Increase in the
period
3.5.2 Used
in the period
3.6 Other
4. Balance as at 505,4 256,82 199,02 1,085, 2,046, 1,571, 3,618,
169,71
the end of the 25,00 2,373. 2,513. 200,34 639,94 496,59 136,54
4.39
period 0.00 42 20 2.99 4.00 9.87 3.87
H1 2019
Unit: RMB
H1 2019
Equity attributable to owners of the Company as the parent
Other equity Other Non-co
instruments Less: compr Surplu Retain ntrollin Total
Item Capital Specifi Genera
Share
Prefe Perp Treasu ehensi s ed Subtot g owners’
capita reserve c l Other
rred etual ry ve reserve earnin al interest equity
l Other s reserve reserve
share bond stock incom s gs s
s s e
1. Balance as at 505,4 256,82 196,39 1,012, 1,970, 1,552,5 3,523,4
169,71
the end of the 25,00 2,373. 9,250. 130,48 946,82 05,499. 52,319.
4.39
prior year 0.00 42 80 1.68 0.29 55 84
Add:
Adjustment for
change in
accounting
policy
Adjustment
for correction
of previous
error
Adjustment
for business
combination
under common
control
Other 18,316 18,316 18,316.
adjustments .37 .37 37
2. Balance as at 505,4 256,82 196,39 1,012, 1,970, 1,552,5 3,523,4
169,71
the beginning 25,00 2,373. 9,250. 148,79 965,13 05,499. 70,636.
4.39
of the year 0.00 42 80 8.05 6.66 55 21
3. Increase/ -2,229, -2,229, -12,597 -14,827
68
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
decrease in the 516.12 516.12 ,580.79 ,096.91
period (“-” for
decrease)
3.1 Total 10,489 10,489
-12,597 -2,108,
comprehensive ,265.8 ,265.8
,580.79 314.99
income 0 0
3.2 Capital
increased and
reduced by
owners
3.2.1
Ordinary shares
increased by
owners
3.2.2
Capital
increased by
holders of other
equity
instruments
3.2.3
Share-based
payments
included in
owners’ equity
3.2.4
Other
-12,71 -12,71
3.3 Profit -12,718
8,781. 8,781.
distribution ,781.92
92 92
3.3.1
Appropriation
to surplus
reserves
3.3.2
Appropriation
to general
reserve
3.3.3
-12,71 -12,71
Appropriation -12,718
8,781. 8,781.
to owners (or ,781.92
92 92
shareholders)
3.3.4
69
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Other
3.4 Transfers
within owners’
equity
3.4.1
Increase in
capital (or
share capital)
from capital
reserves
3.4.2
Increase in
capital (or
share capital)
from surplus
reserves
3.4.3 Loss
offset by
surplus reserves
3.4.4
Changes in
defined benefit
schemes
transferred to
retained
earnings
3.4.5
Other
comprehensive
income
transferred to
retained
earnings
3.4.6
Other
3.5 Specific
reserve
3.5.1
Increase in the
period
3.5.2 Used
in the period
3.6 Other
70
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
4. Balance as at 505,4 256,82 196,39 1,009, 1,968, 1,539,9 3,508,6
169,71
the end of the 25,00 2,373. 9,250. 919,28 735,62 07,918. 43,539.
4.39
period 0.00 42 80 1.93 0.54 76 30
8. Statements of Changes in Owners’ Equity of the Company as the Parent
H1 2020
Unit: RMB
H1 2020
Other equity
Other Retaine
instruments Less: Total
Item Share Capital compreh Specific Surplus d
Preferr Perpet Treasury Other owners’
capital reserves ensive reserve reserves earning
ed ual Other stock equity
income s
shares bonds
1. Balance as at 505,42 800,80
250,531, 199,022, 1,755,782,
the end of the 5,000.0 3,055.2
482.00 513.20 050.43
prior year 0 3
Add: Adjustment
for change in
accounting
policy
Adjustment
for correction of
previous error
Other
adjustments
2. Balance as at 505,42 800,80
250,531, 199,022, 1,755,782,
the beginning of 5,000.0 3,055.2
482.00 513.20 050.43
the year 0 3
3. Increase/
decrease in the 4,145,2 4,145,226.
period (“-” for 26.73 73
decrease)
3.1 Total
11,726, 11,726,601
comprehensive
601.73 .73
income
3.2 Capital
increased and
reduced by
owners
3.2.1
Ordinary shares
71
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
increased by
owners
3.2.2
Capital increased
by holders of
other equity
instruments
3.2.3
Share-based
payments
included in
owners’ equity
3.2.4 Other
3.3 Profit -7,581, -7,581,375
distribution 375.00 .00
3.3.1
Appropriation to
surplus reserves
3.3.2
Appropriation to -7,581, -7,581,375
owners (or 375.00 .00
shareholders)
3.3.3 Other
3.4 Transfers
within owners’
equity
3.4.1
Increase in
capital (or share
capital) from
capital reserves
3.4.2
Increase in
capital (or share
capital) from
surplus reserves
3.4.3 Loss
offset by surplus
reserves
3.4.4
Changes in
defined benefit
schemes
72
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
transferred to
retained earnings
3.4.5 Other
comprehensive
income
transferred to
retained earnings
3.4.6 Other
3.5 Specific
reserve
3.5.1
Increase in the
period
3.5.2 Used
in the period
3.6 Other
4. Balance as at 505,42 804,94
250,531, 199,022, 1,759,927,
the end of the 5,000.0 8,281.9
482.00 513.20 277.16
period 0 6
H1 2019
Unit: RMB
H1 2019
Other equity
Other
instruments Less: Total
Item Share Capital compre Specific Surplus Retained
Preferr Perpet Treasur Other owners’
capital reserves hensive reserve reserves earnings
ed ual Other y stock equity
income
shares bonds
1. Balance as at 505,42
250,531 196,399 777,193,6 1,729,549,4
the end of the 5,000.
,482.00 ,250.80 93.64 26.44
prior year 00
Add:
Adjustment for
change in
accounting
policy
Adjustment
for correction
of previous
error
Other
18,316.37 18,316.37
adjustments
73
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
2. Balance as at 505,42
250,531 196,399 777,212,0 1,729,567,7
the beginning 5,000.
,482.00 ,250.80 10.01 42.81
of the year 00
3. Increase/
decrease in the 15,554,95 15,554,951.
period (“-” for 1.78 78
decrease)
3.1 Total
15,554,95 15,554,951.
comprehensive
1.78 78
income
3.2 Capital
increased and
reduced by
owners
3.2.1
Ordinary shares
increased by
owners
3.2.2
Capital
increased by
holders of other
equity
instruments
3.2.3
Share-based
payments
included in
owners’ equity
3.2.4 Other
3.3 Profit
distribution
3.3.1
Appropriation
to surplus
reserves
3.3.2
Appropriation
to owners (or
shareholders)
3.3.3 Other
3.4 Transfers
within owners’
74
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
equity
3.4.1
Increase in
capital (or share
capital) from
capital reserves
3.4.2
Increase in
capital (or share
capital) from
surplus reserves
3.4.3 Loss
offset by
surplus reserves
3.4.4
Changes in
defined benefit
schemes
transferred to
retained
earnings
3.4.5 Other
comprehensive
income
transferred to
retained
earnings
3.4.6 Other
3.5 Specific
reserve
3.5.1
Increase in the
period
3.5.2 Used
in the period
3.6 Other
4. Balance as at 505,42
250,531 196,399 792,766,9 1,745,122,6
the end of the 5,000.
,482.00 ,250.80 61.79 94.59
period 00
III Company Profile
Foshan Huaxin Packaging Co., Ltd. (hereinafter referred to as the Company) was sponsored and set by Foshan
75
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Huaxin Development Co., Ltd., Foshan Municipal Investment General Corporation, Foshan Xinhui Industrial
Development Co., Ltd., China Packaging General Corporation, China Material Development & Investment
General Corporation, Guangdong Technical Reforming & Investment Co., Ltd., China Chemistry & Light
Industry General Corporation, and Foshan Light Industry Company under approval of People’s Government of
Guangdong Province with YBH (1999) No. 297 document and Economic System Reform Committee of
Guangdong Province with YTG (1999) No. 032 document, and was registered in Administration Bureau for
Commerce & Industry of Guangdong Province on 21 June 1999. The Company holds the business license with the
unified social credit code of 914406007076822793. And its registered capital is RMB505,425,000.00 with total
505,425,000.00 shares (RMB1 per share), among which, there are unrestricted public 171,925,000.00 B shares
and unrestricted private 333,500,000.00 B shares. The Company’s stocks were listed in Shenzhen Stock Exchange
for trade in 2000.
The Company is in the industry of papermaking, paper packaging and printing. Main business scope: mainly
manufactures (operated by subsidiary companies under the Company) and sells packaging materials, and
packaging products, materials for decoration and aluminum and plastic compound materials; sells and maintains
package machinery; invests in industry in terms of package and printing. Main products or services include
high-grade coated white cardboard and color packages printing products, and etc.
The Company included four subsidiaries, Zhuhai Hongta Renheng Packaging Co., Ltd (hereinafter referred to as
Hongta Renheng), Zhuhai Huafeng Paper Co., Ltd (hereinafter referred to as Huafeng Paper), Zhuhai Golden
Pheasant Chemical Co., Ltd (hereinafter referred to as Golden Pheasant Chemical), and Huaxin (Foshan) Color
Printing Co., Ltd. (hereinafter referred to as Foshan Color Printing) into the scope of consolidated financial
statement in the Reporting Period. For details, see changes in consolidation scope of the notes to financial
statement and the explanation for equities in other entities.
IV. Basis for the Preparation of Financial Statements
1. Preparation Basis
The financial statement of the Company was prepared on the base of the assumption of continuation.
2. Continuation
There was no such case where the sustainable operation ability within 12 months since the end of the Reporting
Period was highly doubted.
V. Important Accounting Policies and Estimations
Indication of specific accounting policies and estimations:
Naught
1. Statement for Complying with the Accounting Standard for Business Enterprise
The financial statements for the Reporting Period prepared by the Company are in compliance with the
requirements of the accounting standard for business enterprise, and have reflected the Company’s financial status,
operating results and cash flows in an accurate and complete way.
76
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
2. Fiscal Period
The fiscal year of the Company is a solar calendar year, which is from 1 January to 31 December.
3. Operating Cycle
The operating cycle of the Company’s business is comparatively short with 12 months as the classification
standard for the mobility of assets and liabilities.
4. Standard Currency of Accounts
The Company adopts Renminbi as a standard currency of accounts.
5. Accounting Process of Business Combinations under the Same Control and not under the Same Control
1. Accounting Process of Business Combinations under the Same Control
The assets and liabilities that the Company obtains in a business combination shall be measured on the basis of
their carrying amount combined party in the consolidated financial statements of the final controller on the
combining date. As for the balance between the carrying amount of combined party’s owners equities in the
consolidated financial statements of the final controller and the carrying amount of the consideration paid by it or
the total par value of the shares issued), the additional paid-in capital shall be adjusted. If the additional paid-in
capital is not sufficient to be offset, the retained earnings shall be adjusted.
2. Accounting Process of Business Combinations not under the Same Control
The Company shall recognize the positive balance between the combination costs and the fair value of the
identifiable net assets obtained from the acquiree on purchase date as goodwill. If the combination costs are less
than the fair value of the identifiable net assets obtained from the acquire, the Company shall recheck the various
identifiable assets and liabilities obtained from the acquire, fair value with liabilities, and measurement of
combination costs. If the combination costs are less than the fair value of the identifiable net assets obtained from
the acquire after recheck, the Company shall the record the balance into the profit and loss of the current period.
6. Methods for Preparing Consolidated Financial Statements
The Company as the parent included its all subsidiaries into the consolidation scope of consolidated financial
statements. Based on the financial statements of the Company as the parent and its subsidiaries and other related
materials, the consolidated financial statements were prepared by the Company as the parent according to
Accounting Standards for Enterprises No. 33 –Consolidated Financial Statements.
7. Classification of Joint arrangements and Accounting Treatment of Joint Operations
1. Joint arrangement is classified into joint operation and joint ventures.
2. When the Company is a party of a joint operation, recognize the following items related to the profits in the
joint operation:
(1) Recognize the assets held independently, and recognize the assets held jointly in the holding portion;
(2) Recognize the liabilities borne independently, and recognize the liabilities held jointly in the holding portion;
(3) Recognize the revenue generated from the output portion of joint operation shared for selling the Company;
77
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
(4) Recognize the revenue generated from the sale of assets in joint operation in the holding portion of the
Company;
(5) Recognize the expenses incurred independently, and recognize the expenses incurred in joint operation in the
holding portion of the Company.
8. Recognition Standard for Cash and Cash Equivalents
The term “cash” listed and presented in the cash flow statement refers to cash on hand and deposits that are
available for payment at any time. The term “cash equivalents” refers to short-term and highly liquid investments
that are readily convertible to known amounts of cash and which are subject to an insignificant risk of change in
value.
9. Foreign Currency Businesses and Translation of Foreign Currency Financial Statements
As for a foreign currency transaction in its initial recognition, the amount in the foreign currency shall be
translated into the amount in the Renminbi at the spot exchange rate of the transaction date. On balance sheet date,
the foreign currency monetary items shall be translated as the spot exchange rate on the balance sheet date, the
balance occurred thereof shall be recorded into the profits and losses at the current period except that the balance
of exchange arising from the principal and interests of foreign currency borrowings for the purchase and
construction or production of assets eligible for capitalization. The foreign currency non-monetary items measured
at the historical cost shall still be translated at the spot exchange rate on the transaction date, of which the amount
of functional currency shall not be changed. The foreign currency non-monetary items measured at the fair value
shall be translated at the spot exchange rate on the confirming date of fair value, of which the balance of exchange
shall be included into the profit and loss of the current period or other comprehensive income.
10. Financial Instruments
1. Classification of Financial Assets and Financial Liabilities
Financial assets shall be classified into the following three categories when they are initially recognized: (1)
financial assets measured at amortized cost; (2) financial assets at fair value through other comprehensive income;
(3) financial assets at fair value through profit or loss.
Financial liabilities shall be classified into the following four categories when they are initially recognized: (1)
financial liabilities at fair value through profit or loss; (2) financial liabilities generated from transfer of financial
assets not conforming to requirements of derecognition or continuous involvement of transferred financial assets;
(3) financial guarantee contracts not belonging to above (1) or (2), and loan commitments not belonging to above
(1) and at lower interest rate than the market interest rate; (4) financial liabilities measured at amortized cost.
2. Recognition Basis, Calculation Method, and Termination of Recognition of Financial Assets and
Liabilities
(1) Recognition basis and initial calculation method of financial assets and liabilities
When the Company becomes a party to a financial instrument, it shall recognize a financial asset or financial
liability. The financial assets and financial liabilities initially recognized shall be measured at their fair values. For
the financial assets and liabilities measured at their fair values and of which the variation is recorded into the
profits and losses of the current period, the transaction expenses thereof shall be directly recorded into the profits
and losses of the current period; for other categories of financial assets and financial liabilities, the transaction
expenses thereof shall be included into the initially recognized amount. However, when the accounts receivable
78
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
initially recognized by the Company do not include significant financing or the Company does not consider the
financing in contracts not over one year, it shall be initially calculated at the transaction price.
(2) Subsequent calculation method of financial assets
1) Financial assets at amortized cost
The Company shall make subsequent measurement on its financial assets at amortized cost by adopting the actual
interest rate method. The gains or losses generated from the financial assets at amortized cost and not belonging to
any hedging relationship shall be recorded into the current profit of loss when derecognized, reclassified,
amortized with the actual interest rate method or recognizing impairments.
2) Investments in debt instruments at fair value through other comprehensive income
The Company shall make subsequent measurement at fair value. The interest calculated by adopting the actual
interest rate method, impairment losses or profits and foreign exchange gains shall be recorded into the current
profit or loss, and other profits or losses shall be recorded into other comprehensive income. When derecognized,
the accumulative profits or losses thereof originally recorded into other comprehensive income shall be transferred
out and then recorded into the current profit or loss.
3) Investments in equity instruments at fair value through other comprehensive income
The Company shall make subsequent measurement at fair value. The dividends obtained (exclude those belong to
recovery of investment cost) shall be recorded into the current profit or loss, and other gains or losses recorded
into other comprehensive income. When derecognized, the accumulative gains or losses thereof originally
recorded into other comprehensive income shall be transferred out and then recorded into the retained earnings.
4) Financial assets at fair value through profit or loss
The Company shall make subsequent measurement at fair value. The gains or losses generated (include interest
and dividend income) shall be recorded into the current profit or loss, unless the financial asset is one part of a
hedging relationship.
(3) Subsequent calculation method of financial liabilities
1) Financial liabilities at fair value through profit or loss
Such financial liabilities include trading financial liabilities (include derivative instruments belonging to financial
liabilities) and those designated as financial liabilities at fair value through profit or loss. For such financial
liabilities, the subsequent measurement shall be conducted at fair value. The amount of changes in fair value of
designated financial liabilities at fair value through profit or loss due to the Company’s credit risk changes shall be
recorded into other comprehensive income, unless this treatment will result in or enlarge accounting mismatch of
the profit or loss. The other gains or losses generated from such financial liabilities (including interest expense,
changes of fair value not caused by the Company’s credit risk changes) shall be recorded into the current profit or
loss, unless the they are one part of a hedging relationship. And when derecognized, the accumulative gains or
losses thereof originally recorded into other comprehensive income shall be transferred out and then recorded into
the retained earnings.
2) Financial liabilities generated from financial assets transfer not conforming to derecognition conditions or
continuous involvement of transferred financial assets
They shall be measured in accordance with regulations of Accounting Standards for Business Enterprises
No.23-Transfer of Financial Assets
3) financial guarantee contracts not belonging to above (1) or (2), and loan commitments not belonging to above
(1) and at lower interest rate than the market interest rate;
The subsequent measurement shall be conducted according to the higher of the following two amounts after initial
recognition: ① amount of allowance for impairments recognized in accordance with the impairment provisions
of financial instruments; ② the residual of initial recognized amount after deducted accumulative amortized
79
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
amount recognized as relevant regulations.
4) Financial liabilities at amortized cost
The Company shall measure at amortized cost by adopting actual interest rate method. The gains or losses
generated from financial liabilities at amortized cost and not belonging to any hedging relationship shall be
recorded into the current profit or loss when derecognized or amortized with actual interest rate method.
(4) Derecognition of financial assets and financial liabilities
1) Derecognize financial assets when meeting one of the following conditions:
① The contract rights for collecting cash flow of financial assets have terminated;
② Financial asset has been transferred and the transfer meets the provisions of Accounting Standards for
Business Enterprises No.23-Transfer of Financial Assets governing the derecognition of financial assets.
2) When the current obligation of the financial liability (or some of it) has been relieved, the financial liability (or
some of it) shall be accordingly derecognized.
3. Recognition Basis and Measurement of Transfer of Financial Assets
Where the Company has transferred nearly all of the risks and rewards related to the ownership of the financial
asset to the transferee, it shall stop recognizing the financial asset and separately recognize the rights and
obligations generated retained from the transfer as assets or liabilities. If it retained nearly all of the risks and
rewards related to the ownership of the financial asset, it shall continue to recognize the transferred financial asset.
Where the Company does not transfer or retain nearly all of the risks and rewards related to the ownership of a
financial asset, it shall deal with it according to the circumstances as follows, respectively: (1) If it gives up its
control over the financial asset, it shall stop recognizing the financial asset and separately recognize the rights and
obligations generated retained from the transfer as assets or liabilities; (2) If it does not give up its control over the
financial asset, it shall, according to the extent of its continuous involvement in the transferred financial asset,
recognize the related financial asset and recognize the relevant liability accordingly.
If the transfer of an entire financial asset satisfies the conditions for stopping recognition, the difference between
the amounts of the following 2 items shall be recorded in the profits and losses of the current period: (1) The
carrying value of the transferred financial asset on the derecognition date; (2) The sum of consideration received
from the transfer of financial assets, and derecognition amount among the accumulative amount of the changes of
the fair value originally recorded in the other comprehensive income (the financial assets involve transfer are
investments in debt instruments at fair value through other comprehensive income. If the transfer of partial
financial asset satisfies the conditions to stop the recognition, the entire carrying value of the transferred financial
asset shall, between the portion whose recognition has been stopped and the portion whose recognition has not
been stopped, be apportioned according to their respective relative fair value on the transfer date, and the
difference between the amounts of the following two items shall be included into the profits and losses of the
current period: (1)The carrying value of the portion whose recognition has been stopped; (2)The sum of
consideration of the portion whose recognition has been stopped, and derecognition amount among the
accumulative amount of the changes of the fair value originally recorded in the other comprehensive income (the
financial assets involve transfer are investments in debt instruments at fair value through other comprehensive
income.
4. Recognition Method of Financial Assets and Financial Liabilities’ Fair Value
The Company adopts the valuation technique with sufficient useful data and supported by other information
which is suitable for the current situation to recognize the fair value of related financial assets and liabilities. The
Company classifies the input value used in the valuation technique into the following levels and uses them in
sequence:
(1) The first level of input value is the non-adjustable offer of the same assets or liabilities in the active market on
80
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
the calculation date;
(2) The second level of input value is the directly or indirectly observable input value of related assets or liabilities
except the input value on the first level, including: offer of similar assets or liabilities in the active market; offer of
identical or similar assets or liabilities in the non-active market; other observable input value except offer,
including the observable interest rate during the interval period of common offer, profit rate curve, etc.; the input
value for market verification etc..
(3) The third level of input value is the non-observable input value of related assets or liabilities, including interest
rates that cannot be observed directly or verified by the data of observable market, stock fluctuation rate, future
cash flow of the disposal obligation borne in corporate mergers, financial forecast based on self-data, etc..
5. Impairment of financial instrument
(1) Impairment measurement and accounting handling of financial instrument
Based on expected credit loss, the Company conducts impairment handling and confirms loss reserve for financial
assets which is measured by amortized cost, debt instrument investment which is measured by fair value and whose
change is calculated into other comprehensive profits, accounts receivable of rental, loan commitment which is
beyond financial debt classified as the one which is measured by fair value and whose change is calculated into
current profits and losses, financial debt which does not belong to the one which is measured by fair value and
whose change is calculated into current profits or losses, or financial guarantee contract of financial debt which is
formed when it does not belong to financial asset transfer and doesn’t conform to confirmation condition of
termination or keeps on being involved in transferred financial asset.
Expected credit loss refers to weighted average of credit loss of financial instrument which takes the risk of contract
breach occurrence as the weight. Credit loss refers to the difference between all contract cash flow which is
converted into cash according to actual interest rate and receivable according to contract and all cash flow which to
be charged as expected, i.e. current value of all cash shortage. Among it, as for financial asset purchased or original
which has had credit impairment, it should be converted into cash according actual interest rate of this financial
asset after credit adjustment.
As for financial asset purchased or original which has had credit impairment, the Company only confirms
cumulative change of expected credit loss within the whole duration after initial confirmation on the balance sheet
date as loss reserve.
As for accounts receivable which don’t include major financing contents or the Company does not consider
financing contents in contract which is less than one year, the Company applies simplified measurement method,
and measures loss reserve according to amount of expected credit loss within the whole duration.
As for account receivable of rental and accounts receivable including major financing contents, the Company
applies simplified measurement method, and measure loss reserve according to amount of expected credit loss
within the whole duration.
As for financial asset beyond above mentioned measurement methods, the Company evaluates whether its credit
risk has increased obviously since the initial confirmation on each balance sheet date. In case credit risk has
increased obviously, the Company measures the loss reserve according to amount of expected credit loss within the
whole duration; in case the credit risk does not increase obviously, the Company measures loss reserve according to
the amount of expected credit loss in next 12 months.
By utilizing obtainable rational and well grounded information, including forward-looking information, comparing
the risk of contract breach on balance sheet date and risk of contract breach on initial confirmation date, the
Company confirms whether the credit risk of financial instrument has increased obviously from initial confirmation.
On balance sheet date, in case the Company judges that the financial instrument just has relatively low credit risk,
then it will be assumed that credit risk of the financial instrument has not increased obviously.
81
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Based on single financial instrument or financial portfolio, the Company evaluates expected credit risk and
measures expected credit loss. When based on financial instrument portfolio, the Company takes common risk
characteristics as the basis, and divides financial instruments into different portfolios.
The Company measures expected credit loss again on each balance sheet date, the increase of loss reserve or amount
which is transfer back generated by it is calculated into current profits and losses as impairment profits or losses. As
for financial asset which is measured by amortized cost, loss reserve offsets the carrying value of the financial asset
listed in the balance sheet; as for debt investment which is measured by fair value and whose change is calculated
into other comprehensive profits, the Company confirms its loss reserve in other comprehensive profits and does not
offset the carrying value of the financial asset.
(2) Financial instruments assessing expected credit risk by groups and measuring expected credit losses
Item Recognition basis Method of measuring expected credit
losses
Other receivables-intercourse funds Consulting historical experience in
Related party within the combination
among related party group within the credit losses, combining actual
scope
consolidation scope situation and prediction for future
economic situation, the group’s
other receivables-dividends receivable
Accounts nature expected credit loss rate shall be 0%
group
through exposure at default and the
Other receivables-interest receivable expected credit loss rate within the
Accounts nature
group entire life
Other receivables-margin and cash Consulting historical experience in
deposits group credit losses, combining actual
Other receivables-petty cash situation and prediction for future
economic situation, the group’s
Other receivables-suspense payment Accounts nature expected credit loss rate shall be
group accounted through exposure at default
Other receivables-advance and the expected credit loss rate within
compensation group the next 12 months or the entire life
(3) Accounts receivable with expected credit losses measured by groups
1) Specific groups and method of measuring expected credit loss
Item Recognition basis Method of measuring expected credit
losses
Bank’s acceptance bills receivable Bill type Consulting historical experience in
credit losses, combining actual
situation and prediction for future
economic situation, the group’s
expected credit loss rate is 0% through
exposure at default and the expected
credit loss rate over the entire life
Trade acceptance bills receivable Bill type Prepare the comparative list between
aging of accounts receivable and
expected credit loss rate over the entire
life and account the expected credit
82
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
losses by consulting historical
experience in credit losses, combining
actual situation and prediction for
future economic situation
Accounts receivable-related party Related party within the consolidation Consulting historical experience in
within the consolidation scope group scope credit losses, combining actual
situation and prediction for future
economic situation, the group’s
expected credit loss rate is 0% through
exposure at default and the expected
credit loss rate over the entire life
Accounts receivable-credit risk Aging group Prepare the comparative list between
characteristics group aging of accounts receivable and
expected credit loss rate over the entire
life by consulting historical experience
in credit losses, combining actual
situation and prediction for future
economic situation
2) Accounts receivable-the comparative list between aging of common customer group and expected credit loss
rate over the entire life
Aging Expected credit loss rate of accounts receivable and
note receivable (%)
1 to 3 months (inclusive, the same below)
4 to 12 months 5.00
1 to 2 years 10.00
2 to 3 years 20.00
Over 3 years 50.00
6. Offset between financial asset and financial debt
Financial asset and financial debt are listed in the balance sheet separately and don’t offset each other. However,
when the following conditions are met at the same time, the Company will list the net amount after mutual offset
in the balance sheet: (1) The Company has the legal right to offset the confirmed amount, and the legal right is
executable currently; (2) The Company plans to settle by net amount, or monetize the financial asset and liquidate
the financial debt at the same time.
For those transfers of financial assets not meeting the derecognition conditions, the Company does not offset the
transferred financial assets and relative liabilities.
83
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
11. Notes Receivable
12. Accounts Receivable
13. Accounts Receivable Financing
14. Other Receivables
Recognition and accounting treatment methods regarding expected credit losses of other receivables
15. Inventory
1. Category
Inventory was referred to the finished goods or commodities for sale, products in the process, materials in
production or providing services in daily activities, etc.
2. Pricing Method for Outgoing Inventories
Adopting the weighted average method for pricing at the end of the month at a time
3. Recognition basis of Net Realizable Value of Inventory
On the balance sheet date, inventory shall be measured at the lower of cost or net realizable value, and provision
shall be made for falling price of inventories on the ground of the difference between the cost of each item of
inventories and the net realizable value. Inventories directly for sale, under normal producing process, to the
amount after deducting the estimated sale expense and relevant taxes from the estimated sell price of the inventory,
the net realizable value has been recognized; inventories which need to be processed, under normal producing
process, to the amount after deducting the estimated cost of completion, estimated sale expense and relevant taxes
from the estimated sale price of produced finished goods, the net realizable value has been recognized; on the
balance sheet date, in the same item of inventories, if some have contractual price agreement while others do not,
the net realizable value shall be recognized respectively and compared with their cost, and the amount of
provision withdrawal or reversal for falling price of inventories shall be recognized respectively.
4. Inventory System for Inventories:
Inventory system: Perpetual inventory system
5. Amortization Method of the Low-value Consumption Goods and Packing Articles
(1) Low-value Consumption Goods
One-off amortization method
(2) Packing Articles
One-off amortization method
16. Contractual Assets
17. Contractual Costs
18. Assets Held for Sale
1. Classification of Non-current assets or disposal group Held for Sale
Non-current assets or disposal group are confirmed to be the components held for sale when the following
conditions are simultaneously satisfied: (1) According to the convention of similar transactions selling this kind of
84
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
assets or disposal group, they can be sold instantly in such conditions. (2) Sale is extremely likely to happen, that
is, the Company has made the decision of a sale plan, and got the confirmed purchase commitment. It is estimated
that the sale will be finished within 1 year.
Non-current assets or disposal groups specifically obtained by the Company for resale will be classified as
held-for-sale on the acquisition date when they meet the stipulated conditions of “expected to be sold within one
year” on the acquisition date, and may well satisfy the category of held-for-sale within a short time (which is
usually 3 months).
If any transaction between non-related parties fails to complete within one year due to one of the following
reasons outside the Company’s control, and the Company still commits to sell non-current assets or disposal
groups, the non-current assets or disposal groups shall be still classified as the held-for-sale category: (1) For
conditions of sale delay resulting from the accidental setting by the buyer or another party, the Company has duly
taken actions against those conditions and it is expected that the delay factors can be smoothly solved within one
year since the conditions of sale delay resulting from the setting; (2) Non-current assets or disposal groups held
for sale fail to be sold within one year due to rare circumstances, and the Company has taken necessary measures
against those new situations within the first year and re-satisfied the conditions for classifying them into the
held-for-sale category.
2. Measurement of held-for-sale non-current assets or disposal groups
(1) Initial measurement and subsequent measurement
For the initial measurement and the re-measurement of held-for-sale non-current assets or disposal groups on the
balance sheet date, if the carrying value is higher than the net amount of the fair value deducting the selling
expenses, the carrying value shall be written down to the net amount of the fair value deducting the selling
expenses. The written down amount shall be recognized as asset impairment losses and recorded into current
profits or losses, and at the same time, the held-for-sale asset impairment provision shall be withdrawn.
In respect of non-current assets or disposal groups classified into the held-for-sale category on the date of
obtainment, when initially measuring them, compare the initially measured amount supposing that they are not
classified into the held-for-sale category and the amount of the fair value deducting the selling expenses, and
measure them at the lower amount. Other than the non-current assets or disposal groups obtained in corporate
mergers, the difference generated from the net amount of the fair value of non-current assets or disposal groups
deducting the selling expenses as the initially measured amount shall be recorded into current profits or losses.
For the amount of asset impairment losses recognized in respect of held-for-sale disposal groups, first write off the
carrying value of goodwill in the disposal groups, and then write off their carrying value in proportion according
to the percentage of the carrying value of each non-current asset in the disposal groups.
Depreciation or amortization shall not be withdrawn for held-for-sale non-current assets or the non-current assets
in disposal groups, while the interests of liabilities and other expenses in held-for-sale disposal groups shall still
be recognized.
(2) Accounting Methods for the Recovery of Assets Impairment Losses
If the net amount that the fair value of the non-current assets held for sale on the follow-up balance sheet date
minus the sale costs increases, the previous written-down amount will be restored, and reversed to the asset
impairment loss confirmed after the assets being classified as held-for-sale. The reversed amount will be included
in the current profit or loss. Impairment losses on assets recognized prior to classification as held for sale are not
reversed.
If the net amount that the fair value of the disposal groups held for sale on the follow-up balance sheet date minus
the sale costs increases, the previous written-down amount will be restored, and reversed to the asset impairment
loss confirmed after the assets being classified as held-for-sale. The reversed amount will be included in the
85
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
current profit or loss. The carrying value of deducted goodwill and the non-current assets applicable to the
measurement of held-for-sale categories will not be reversed if the asset impairment loss is recognized before it is
classified as held for sale.
For the subsequent reversal amount of the asset impairment loss recognized by the disposal group held for sale, its
carrying value shall be increased proportionately to the proportion of the carrying value of various non-current
assets measured by the disposal group in addition to goodwill.
(3) Accounting Methods for Ceasing to be classified as held-for-sale and Termination of Recognition
When a non-current asset or disposal group ceases to be classified as held-for-sale or a non-current asset is
removed out from the held-for-sale disposal group due to failure in meeting the classification conditions for the
category of held-for-sale, it will be measured by one of the followings whichever is lower: ① The carrying value
before being classified as held for sale will be adjusted according to the depreciation, amortization or impairment
that would have been recognized under the assumption that it was not classified as held for sale; ② The
recoverable amount.
When terminating the recognition of non-current assets or disposal group held for sale, the unconfirmed gains or
losses shall be recorded into the current profits and losses.
19. Investments in Debt Obligations
20. Investments in other Debt Obligations
21. Long-term Accounts Receivable
22. Long-term Equity Investments
1. Judgment of Joint Control and Significant Influences
The term "joint control" refers to the joint control over an arrangement in accordance with the related agreements,
which does not exist unless the participants sharing the control power agree with each other about the related
arranged activity. The term "significant influences" refers to the power to participate in making decisions on the
financial and operating policies of an enterprise, but not to control or do joint control together with other parties
over the formulation of these policies.
2. Recognition of Investment Cost
(1) If the business combination is under the common control and the acquirer obtains long-term equity investment
in the consideration of cash, non-monetary asset exchange, bearing acquiree’s liabilities, or the issuance of equity
securities, the initial cost is the carrying amount of the proportion of the acquiree’s owner’s equity at the
acquisition date. The difference between the initial cost of the long-term equity investment and the carrying
amount of the paid combination or the total amount of the issued shares should be adjusted to capital surplus. If
the capital surplus is not sufficient for adjustment, retained earnings are adjusted respectively.
When a long-term equity investment is formed from the business combination under common control through the
Company’s multiple transactions step by step, the treatment shall be carried out based on whether the transactions
constitute the “package deal”. If they do, the accounting treatment shall be carried out on the basis of assuming all
transactions as one transaction with the acquisition of control. If they do not, the initial investment cost shall be
the portion of the carrying value of acquiree’s net assets entitled in the consolidated financial statements of the
final controller after the consolidation. The difference between the initial investment cost of the long-term equity
86
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
investment on the combination date and the carrying value of the investment before the combination plus the
carrying value of the newly-paid consideration for the acquisition of the shares on the consolidation date shall be
adjusted to capital reserve; if the capital reserve is insufficient for the adjustment, retained earnings should be
adjusted accordingly.
(2) For those formed from the business combination under different control, the initial investment cost is the fair
value of the combination consideration paid on the acquisition date.
When a long-term equity investment is formed from the business combination under different control through the
Company’s multiple transactions step by step, the accounting treatment shall be carried out based on whether the
financial statements are individual or consolidated:
1) In individual financial statements, the initial investment cost accounted in cost method is the sum of the
carrying value of the equity investment originally held and the cost of new investment.
2) In consolidate financial statements, judge whether the transactions constitute the “package deal”. If they do, the
accounting treatment shall be carried out on the basis of assuming all transactions as one transaction with the
acquisition of control. If they do not, for the acquiree’s equity held before the acquisition date, re-measurement
shall be carried out according to the fair value of the equity on the acquisition date and the difference between the
fair value and the carrying value shall be recorded into current investment income; if the acquiree’s equity held
before the acquisition date involves other comprehensive income accounted in equity method, other
comprehensive income related to it shall be transferred into the income for the period in which the acquisition date
falls, with the exception of the other comprehensive incomes occurred because of the changes of net liabilities or
net assets of the defined benefit pension plans be re-measured for setting by the investees.
3) For those formed other than from business combination: If they are acquired in cash payment, the initial
investment cost is the purchase price actually paid; if they are acquired in the issue of equity securities, the initial
investment cost is the fair value of the issued equity securities; if they are acquired in debt restructuring, the initial
investment cost shall be recognized according to the Accounting Standards for Enterprises No. 12 - Debt
Restructuring; if they are acquired in the exchange of non-monetary assets, the initial investment shall be
recognized according to the Accounting Standards for Enterprises No. 7 - Exchange of Non-Monetary Assets.
3. Method of subsequent measurement and recognition of profits and losses
Long-term equity investment with control over investees shall be accounted in cost method; long-term equity
investment on associated enterprises and joint ventures shall be accounted in equity method.
4. Method of treating the disposal of the investment in a subsidiary stem by step through multiple transactions
until the loss of the controlling right
(1) Individual financial statements
For the disposed equity, the difference between its fair value and the actually obtained price shall be recorded into
current profits or losses. For the residual equity, the part that still has significant effects on investees or with
common control jointly with other parties shall be accounted in equity method; the part that has no more control,
common control or significant effects on investees shall be accounted in accordance with the relevant regulation
of the Accounting Standards for Enterprises No. 22 - Recognition and Measurement of Financial Instruments.
(2) Consolidated financial statements
87
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
1) For the disposal of the investment in subsidiaries step by step until the loss of the controlling right through
multiple transactions, which do not constitute the “package deal”
Before the loss of the controlling right, for the balance between the disposal remuneration and the shares of net
assets in the subsidiaries that have been calculated since the acquisition date or combination date corresponding to
the disposal of long-term equity investment, capital reserve (capital premium) shall be adjusted, and if the capital
premium is not sufficient for the write-down, the retained earnings shall be written down.
At the loss of the controlling right over the original subsidiaries, the residual equity shall be re-measured at its fair
value on the date of losing the controlling right. The difference between the consideration obtained in the equity
disposal, plus the fair value of the remaining equities, less the Company’s share of net assets enjoyed of the
former subsidiary that has been calculated since the acquisition date or combination date according to the former
shareholding ratio, shall be recorded into the investment gains for the period when the control ceases; meanwhile,
goodwill shall be written down. Other comprehensive income related to former subsidiary's equity investment
shall be transferred into current investment income when the control ceases.
2) For the disposal of the investment in subsidiaries step by step until the loss of the controlling right through
multiple transactions, which constitute the “package deal”
The accounting treatment shall be carried out on the basis of considering each transaction as a transaction of
disposing the subsidiary and losing control. However, before losing control, the difference between each disposal
price before losing the control, and the corresponding net assets share enjoyed of subsidiary when disposing
long-term equity investment, shall be recognized as other comprehensive income in the consolidated financial
statements and when the control ceases, transferred into current profits or losses of the period of losing control.
23. Investment Property
Measurement mode of investment real estates
Measurement of cost method
Depreciation or amortization method
1. The term "investment real estate" includes the right to use any land which has already been rented, the right to
use any land which is held and prepared for transfer after appreciation, and the right to use any building which has
already been rented.
2. The Company initially measures the investment property according to the costs, and adopts the cost method in
the subsequent measurement of investment property, and adopts the same methods with fixed assets and
intangible assets to withdraw depreciation or amortization.
24. Fixed Assets
(1) Recognized Standard of Fixed Assets
The term "fixed assets" refers to the tangible assets that simultaneously possess the features as follows: they are held for the sake of
producing commodities, rendering labor service, renting or business management; and their useful life is in excess of one fiscal year.
No fixed asset may be recognized unless it simultaneously meets the conditions as follows: (1) The economic benefits are likely to flow
into the enterprise; (2) The cost of the fixed asset can be measured reliably.
88
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
(2) Depreciation Method
Expected net salvage
Category Depreciation method Useful life Annual deprecation
value
Houses and buildings Straight-line depreciation 30-40 5% 2.375%-3.17%
Machinery equipment Straight-line depreciation 25 October 5% 3.8%-9.5%
Transportation Straight-line depreciation 5 5% 19%
Electronic equipment and
Straight-line depreciation 10 May 5% 9.5%-19%
other
(3) Recognition Basis and Pricing Method of Fixed Assets by Finance Lease
Where one of the following provisions is regulated in the rental agreement, it shall be recognized as an asset acquired under finance
leases: (1) the ownership of the leased asset is transferred to the lessee after the term of lease expires; (2) the lessee has the option to buy
the asset at a price which is far lower than the fair value of the asset at the date when the option becomes exercisable; (3) the lease term
covers the major part of the use life of the leased asset [usually accounting for 75%(75% inclusive) of the use life of the leased asset]; (4)
in the case of the lessee, the present value of the minimum lease payments on the lease beginning date amounts to substantially all of the
fair value of the leased asset [above 90% (90% inclusive)]; in the case of the lessor, the present value of the minimum lease payments on
the lease beginning date amounts to substantially all of the fair value of the leased asset [above 90% (90% inclusive)] (5) When nature
of the leased asset is special, if there is no great transform, only the Company can use it, As for the fixed assets by finance lease, the
Company shall record the lower one of the fair value of the leased asset and the present value of the minimum lease payments as the
entering value in an account, and make provision for depreciation according to the depreciation policy of self-owned fixed assets.
25. Construction in Progress
1. No construction in progress may be recognized unless it simultaneously meets the conditions as follows: (1) The
economic benefits are likely to flow into the enterprise; (2) The cost of the fixed asset can be measured reliably.
Construction in progress shall be measured according to the occurred actual costs before the assets available for the
intended use.
2. When the construction in progress is available for the intended use, it shall be transferred to fixed assets according
to the actual cost of the project. For construction in progress available for the intended use but not dealing with final
accounts of completed project, it shall be transferred to fixed assets according to the estimated value first, and then
adjust original temporarily estimated value based on the actual costs after the final accounts of completed project,
but not adjust the depreciation that was already calculated.
26. Borrowing Costs
1. Recognition Principle of Capitalization of Borrowing Costs
Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and
construction or production of assets eligible for capitalization, it shall be capitalized and recorded into the costs of
relevant assets. Other borrowing costs shall be recognized as expenses when it occurred, and shall be recorded
into the current profits and losses.
2. Capitalization Period of Borrowings Costs
89
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
(1) The borrowing costs shall not be capitalized unless they simultaneously meet the following requirements: 1)
The asset disbursements have already incurred; 2) The borrowing costs have already incurred; 3) The acquisition
and construction or production activities which are necessary to prepare the asset for its intended use or sale have
already started.
(2) Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the
interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended. The
borrowing costs incurred during such period shall be recognized as expenses, and shall be recorded into the profits
and losses of the current period, till the acquisition and construction or production of the asset restarts.
(3) When the acquisition and construction or production of a qualified asset eligible for capitalization are
available for its intended use or sale, the capitalization of borrowing costs shall be stopped.
3. Capitalized rate and amount of borrowing costs
To the extent that funds are borrowed specifically for the purpose of acquiring or constructing a qualifying asset,
the amount of borrowing costs eligible for capitalization on that asset is determined as the actual interest costs
(including amortization of discount and premium confirmed according to effective interest method) incurred on
that borrowing during the period less any investment income on the temporary investment of the borrowing. To
the extent that funds are borrowed generally and used for the purpose of acquiring or constructing a qualifying
asset, the amount of borrowing costs eligible for capitalization shall be determined by applying a capitalization
rate to the weighted average of excess of accumulated expenditures on qualifying asset over that on specific
purpose borrowing.
27. Biological Assets
28. Oil and Gas Assets
29. Right-of-Use Assets
30. Intangible Assets
(1) Pricing Method, Useful Life and Impairment Test
1. Intangible assets include right to use land sites, non-patented right, software and others, and conduct the initial
measurement according to the costs.
2. With regard to intangible assets with limited service life, it shall be amortized systematically and reasonably
within their service life according to the expected implementation of economic interests related to the intangible
assets. If it can’t recognize the expected implementation reliably, it shall be amortized by straight-line method. The
specific useful lives are as follows:
Items Useful life for amortization (years)
Right to use land sites 50
Non-patented technology 10
Software and others 2-10
The intangible assets with uncertain service life shall not be amortized, and the Company rechecks the service life
of the intangible assets in every accounting period.
90
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
(2) Accounting Policies of Internal R&D Expenses
The expenses in research stage for its internal research and development projects shall be recorded into the current
profits and losses when it occurred. The expenses in development stage for its internal research and development
projects of the Company may be capitalized when they satisfy the following conditions simultaneously: (1) It is
feasible technically to finish intangible assets for use or sale; (2) It is intended to finish and use or sell the
intangible assets; (3) The usefulness of methods for intangible assets to generate economic benefits shall be
proved, including being able to prove that there is a potential market for the products manufactured by applying
the intangible assets or there is a potential market for the intangible assets itself or the intangible assets will be
used internally; (4) It is able to finish the development of the intangible assets, and able to use or sell the
intangible assets, with the support of sufficient technologies, financial resources and other resources; and (5) The
development expenditures of the intangible assets can be reliably measured.
Standard for Classifying the Expenses of Research Phase and Development Phase of the Company’s R&D
Projects
The term “research” refers to the creative and planned investigation to acquire and understand new scientific or
technological knowledge.
The term "development" refers to the application of research achievements and other knowledge to a certain plan
or design, prior to the commercial production or use, so as to produce any new material, device or product, or
substantially improved material, device and product.
The expenditures of R&D stage in internal R&D project, was recorded into current profits or losses.
31. Impairment of Long-term Assets
For long-term assets, such as long-term equity investment, investment property measured by cost model, fixed
assets, construction in progress, and intangible assets with limited service life, the Company shall estimate the
recoverable amount if there are signs of impairment on balance sheet date. For intangible assets with uncertain
goodwill or service life formed by enterprise combination, whether or not there is sign of impairment, impairment
test shall be conducted every year. Goodwill combination and its related assets group or combination of assets
group shall be conducted the impairment test.
If the recoverable amount of the above-mentioned long-term assets is lower than its carrying value, it shall make
the preparation for assets impairment based on its balance and be recorded into current profits and losses.
32. Long-term Prepaid Expenses
Long-term deferred expenses refer to general expenses with the amortized period over one year (one year
excluded) that have occurred. Long-term prepaid expense shall be recorded into the account according to the
actual accrual. Long-term prepaid expense shall be amortized averagely within benefit period or specified period.
In case of no benefit in the future accounting period, the amortized value of such project that fails to be amortized
shall be transferred into the profits and losses of the current period.
91
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
33. Contractual Liabilities
34. Payroll
(1) Accounting Treatment of Short-term Compensation
During the accounting period when the employees providing the service for the Company, the actual short-term
compensation shall be recognized as liabilities, and be recorded into the current profits and losses or related assets
costs.
(2) Accounting Treatment of the Welfare after Demission
The Company's welfare after demission plans is divided into defined contribution plans and defined benefit plans
(1) During the accounting period when the employee providing service for the Company, the amount paid in line
with the setting drawing plan will be recognized as liabilities and recorded into current profits or losses or cost of
relevant assets.
(2) The accounting treatment of defined benefit plans usually consists of the following steps:
1) According to the expected cumulative welfare unit method, adopt unbiased and mutually consistent actuarial
assumptions to evaluate related demographic variables and financial variables, measure the obligations generated
from defined benefit plans and recognize the period in respect of related obligations. Meanwhile, discount the
obligations generated from defined benefit plans to recognize their present value and the current service costs;
2) If there are any assets in a defined benefit plan, the deficit or surplus formed from the present value of the
defined benefit plan obligations less the fair value of the defined benefit plan assets shall be recognized as net
liabilities or net assets of a defined benefit plan. If there is any surplus in a defined benefit plan, the net assets of
the plan shall be measured at the lower of the surplus or the upper asset limit;
3) At the end of the period, the staff remuneration costs generated from a defined benefit plan shall be recognized
as services costs, net interests of the net liabilities or net assets of the plan and changes from the re-measurement
of the net liabilities or net assets of the plan. Service costs and net interests of the net liabilities or net assets of the
plan shall be recorded into the current profits or losses or related asset costs, while changes from the
re-measurement of the net liabilities or net assets of the plan shall be recorded into other comprehensive income
and shall not be transferred back to profits or losses in subsequent accounting periods. But the amounts recognized
in other comprehensive income may be transferred within the equity scope.
(3) Accounting Treatment of Demission Welfare
When the Company is unable to unilaterally withdraw the plan on the cancellation of labor relationship or the layoff
proposal, or when recognizing the costs or expenses (the earlier one between the two) related to the reorganization
of paying the demission welfare, should recognize the payroll liabilities from the demission welfare and include in
the current gains and losses.
(4) Accounting Treatment of other Welfare of the Long-term Employees
The Company provides the other long-term employee benefits for the employees, and for those met with the defined
contribution plans, accounting treatment should be conducted according to the related regulations of the defined
contribution plans; the for the others long-term employee benefits except for the former, accounting treatment
92
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
should be conducted according to the related regulations of the defined benefit plans. In order to simplify the
related accounting treatment, the payrolls shall be recognized as service costs, the net amount of interest of net
liabilities and net assets of other welfare of the long-term employees. The total net amounts made up from the
changes of measuring the net liabilities and net assets of other welfare of the long-term employees again shall be
recorded into the current profits and losses or related assets costs.
35. Lease Liabilities
36. Provisions
1. The obligation such as external guaranty, litigation or arbitration, product quality assurance, loss contract,
pertinent to a contingencies shall be recognized as the provisions when the following conditions are satisfied
simultaneously: ① That obligation is a current obligation of the enterprise; ② It is likely to cause any economic
benefit to flow out of the enterprise as a result of performance of the obligation; and ③ The amount of the
obligation can be measured in a reliable way.
2. The Company shall conduct the initial measurement to provisions according to the best estimate number needed
for performing the related current obligation and recheck the carrying value of accrued liabilities on balance sheet
date.
37. Share-based Payment
38. Other Financial Instruments such as Preferred Shares and Perpetual Bonds
39. Revenue
Accounting policy adopted for recognition and measurement of revenue
1. Revenue Recognition Principle
(1) Sale of goods
No revenue from selling goods may be recognized unless the following conditions are met simultaneously: 1) The
significant risks and rewards of ownership of the goods have been transferred to the buyer by the Company; 2)The
Company retains neither continuous management right that usually keeps relation with the ownership nor effective
control over the sold goods; 3) The revenue amount could be reliably measured; 4) The relevant economic benefits
may flow into the Company; and 5) the relevant cost which had occurred or will occur could be reliably measured.
(2) Providing labor services
If the provision of labor services can be reliably estimated (all the following conditions are met: ① The amount of
income can be measured reliably; ②The relevant economic benefits are likely to inflow to the Company; ③ The
progress of the transaction can be reliably determined; ④ The cost incurred and to be incurred in the transaction
can be measured reliably), it shall recognize the revenue from providing services employing the
percentage-of-completion method, and confirm the completion of labor service according to the costs incurred as
a percentage of the total estimated costs. If the Company can’t, on the date of the balance sheet, reliably estimate
the outcome of a transaction concerning the labor services it provides, it shall be handled under the following
conditions: If the cost of labor services incurred is expected to be compensated, the revenue from the providing of
labor services shall be recognized in accordance with the amount of the cost of labor services incurred, and the
cost of labor services shall be carried forward at the same amount; If the cost of labor services incurred is not
93
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
expected to compensate, the cost incurred should be included in the current profits and losses, and no revenue
from the providing of labor services may be recognized.
(3) Transferring the Right to Use Assets
The revenue of transferring the right to use assets may not be recognized unless the following conditions are both
met: the relevant economic benefits are likely to inflow to the Company; and the revenue can be reliably measured.
The interest income shall be recognized according to the time and actual interest rate in which other people use
the Company’s monetary funds. Royalty revenue shall be recognized according to the chargeable time and method
stipulated in related contracts and agreements.
2. Confirmation methods of sales revenues
(1) Confirmation methods of domestic sales revenue
Shall satisfy following conditions: products should be delivered according to customer’s requirements and signed
by customers; amount of sales revenues is determined, received or respected to receive; sales slip should be
invoiced; costs of sold products should be calculated;
(2) Confirmation methods of export sales revenue
Shall satisfy following conditions: products should be produced according to export sales agreement signed with
customers, received export declaration and obtained bill of lading (waybill); amount of sales revenues is
determined, received or respected to receive; sales slip should be invoiced; costs of sold products should be
calculated.
If the collection of the price as stipulated in the contract or agreement is delayed and if it has the financing nature,
the revenue incurred by selling goods shall be ascertained in accordance with the fair value of the receivable price
as stipulated in the contract or agreement.
Differences in accounting policies for the recognition of revenue caused by different business models for the same type of business
40. Government Subsidies
1. If the government subsidies meet with the following conditions at the same, it should be recognized: (1) The
entity will comply with the condition attaching to them; (2) The grants will be received from government. If a
government subsidy is a monetary asset, it shall be measured according to the amount received or receivable. If a
government subsidy is a non-monetary asset, it shall be measured at its fair value, and shall be measured at a
nominal amount when the fair value cannot be obtained reliably.
2. Judgment basis and accounting methods of government subsidies related to assets
The government subsidies that are acquired for construction or form long-term assets in other ways according to
government documents shall be defined as asset-related government subsidies. For those not specified in
government documents, the judgment shall be made based on the compulsory fundamental conditions for
acquiring the subsidies. If the subsidies are acquired with construction or the formation of long-term assets in
other ways as fundamental conditions, they shall be recognized as asset-related government subsidies. For
asset-related government subsidies, the carrying value of related assets shall be written down or recognized as
deferred income. If asset-related government subsidies are recognized as deferred income, it shall be recorded into
profits or losses by period in a reasonable and systemic manner within the life of related assets. Government
subsidies measured at the nominal amount shall be directly recorded into current profits or losses. If related assets
are sold, transferred, disposed of or destroyed before the end of their life, the undistributed balance of related
deferred income shall be transferred into the profits or losses for the period of the asset disposal.
3. Judgment basis and accounting treatment of profits-related government subsidies
Government subsidies other than asset-related government subsidies shall be defined as profits-related
94
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
government subsidies. For government subsidies consisting of both asset-related parts and profits-related parts,
which is difficult to judge whether they are related to assets or profits, the entirety shall be classified as
profits-related government subsidies. Profits-related government subsidies that are used to compensate the related
future expenses or losses shall be recognized as deferred income and shall be included into the current
profit/losses or write down related costs during the period when the relevant expenses or losses are recognized;
those subsidies used to compensate the related expenses or losses incurred shall be directly included into the
current profits/losses or write down related costs.
4. Government subsidies related to the Company’s routine operating activities shall be included into other income
or write down related costs according to the economic business nature. Government subsidies not related to the
Company’s routine activities shall be included into non-operating income and expenditure.
41. Deferred Income Tax Assets/Deferred Income Tax Liabilities
1. In accordance with the balance (the item not recognized as assets and liabilities can confirm their tax bases
according to the tax law, the balance between the tax bases and its carrying amount) between the carrying amount
of assets or liabilities and their tax bases, deferred tax assets and deferred tax liabilities should be recognized at
the tax rates that are expected to apply to the period when the asset is realized or the liability is settled.
2. A deferred tax asset shall be recognized within the limit of taxable income that is likely to be obtained to offset
the deductible temporary differences. At the balance sheet date, where there is strong evidence showing that
sufficient taxable profit will be available against which the deductible temporary difference can be utilized, the
deferred tax asset unrecognized in prior period shall be recognized.
3. The Company assesses the carrying amount of deferred tax asset at the balance sheet date. If it’s probable that
sufficient taxable profit will not be available against which the deductible temporary difference can be utilized,
the Company shall write down the carrying amount of deferred tax asset, or reverse the amount written down later
when it’s probable that sufficient taxable profit will be available.
4. The current income tax and deferred income tax of the Company are recorded into the current gains and losses
as income tax expenses or revenue, except in the following circumstances:
(1) Business combination
(2) The transaction or event directly included in owner’ equity
42. Lease
(1) Accounting Treatment of Operating Lease
As a Lessee, the Company shall record the rent into relevant assets cost or recognize it as the current profit or loss
on a straight-line basis over the lease term. The initial direct costs incurred shall be recognized as the current
profit or loss; Contingent rents shall be charged into the current profit or loss when they are incurred.
As a lessor, the Company shall recognize the rent as the current profit or loss on a straight-line basis over the lease
term. Initial direct costs incurred by the lessor shall be directly recognized as the current profit or loss except that
costs with larger amounts shall be capitalized and recorded into the current profit and loss by stages; Contingent
rents shall be charged into the current profit or loss when they are incurred.
(2) Accounting Treatments of Financial Lease
For the lessee, a fixed asset acquired under finance lease shall be valued at the lower of the fair value of the leased
95
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
asset and the present value of the minimum lease payments at the inception of lease. The minimum lease
payments as the entering value in long-term account payable, the difference as unrecognized financing charges;
the initial direct costs shall be directly recorded into leasing asset value. At each period during the lease term, the
effective interest rate method shall be adopted to calculate and confirm the current financing charge.
On the initial date of financial lease, lessee of the financial lease shall record the sum of the minimum lease
payments and initial direct costs as the financing lease accounts receivable, and also record the non-guaranteed
residual value; recognize the difference between the total minimum lease payments, initial direct costs,
non-guaranteed residual value and sum of the present value as the unrealized financing income; At each period
during the lease term, the effective interest rate method shall be adopted to calculate and confirm the current
financing income.
43. Other Important Accounting Policies and Accounting Estimations
1. Confirmation standard and accounting handling method for operation termination
Components which meet one of the following conditions, have been disposed or divided as held for sale category
and can be distinguished separately are confirmed as operation termination.
(1) The component represents one important independent main business or one single main operation area.
(2) The component is one part of a related plan which plans to dispose one independent main business or one single
main operation area.
(3) The component is a subsidiary which is obtained for resale specially.
Refer to description of operation termination of other important affairs in notes of the financial statement for
detailed situation of the Company operation termination.
2. Basis and accounting handling method of adopting hedging accounting
(1) Hedging includes fair value hedging, cash flow hedging, and overseas operation net investment hedging.
(2) Adopt hedging accounting method to dispose for hedging meeting the following conditions: 1) hedging
relationship is just composed by hedging instruments and hedged instruments; 2) when the hedging starts, the
Company designates the hedging instruments and hedged projects, and prepares written documents about hedging
relationship, risk management strategy for hedging of the Company, and risk management objective; 3) the hedging
relationship meets the validity requirements of hedging.
When the hedging meets all the following conditions, the Company will confirm that hedging relationship meets the
validity requirements of hedging: 1) There is economic relationship between the hedged project and hedging
instrument; 2) In value change generated by the hedged project and hedging instrument, credit risk does not take a
dominant position; 3) Hedging rate of the hedging relationship equals to the ratio between quantity of hedged
projects of actual hedging of the Company and actual quantity of hedging instrument of hedging for it, but not
reflects the imbalance between the hedged projects and relative weight of hedging instrument.
The Company will constantly evaluate whether the hedging relationship meets validity requirements of hedging
from hedging start date on. In case hedging relationship does not meet the validity requirements of hedging because
of hedging ratio, but the risk management objective of the designated hedging relationship does not change, the
Company will re-balance the hedging relationship.
(3) Accounting handling of hedging
1) Fair value hedging
① Profit or loss generated by hedging instrument will be calculated into current profits and losses. In case hedging
instrument conducts hedging for non transaction equity instrument (or its components) which selects to measure by
fair value and whose change is calculated into other comprehensive profits, profits or losses generated by hedging
96
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
instrument is calculated into other comprehensive profits.
② Profits or losses of hedged projects generated by risk exposure is calculated into current profits and losses,
meanwhile confirmed carrying value of hedged projects which is not measured by fair value will be adjusted. In
case the hedged project is financial asset which is measured by fair value and its change is calculated into other
comprehensive profits according to Article XVIII of NO.22 of Enterprise Accounting Codes--Confirmation of
Financial instrument and Measurement, because the profits or losses generated by hedged risk exposure is
calculated into current profits and losses, its carrying value has been measured according to fair value, it will not be
adjusted again. In case the Company selects non-transaction equity instrument investment (or its components)
which measures by fair value and whose change is calculated into other comprehensive profits, because the profits
or losses generated by hedged risk exposure is calculated into current profits and losses and its carrying value has
been measured according to fair value, it will not be adjusted any more.
In case the hedged project is firm commitment (or its components ) which has not been confirmed, its cumulative
change of fair value generated by hedging risk after the hedging relationship is designated is confirmed as one asset
or one debt, and relevant profits or losses are calculated into profits or losses of corresponding period. When asset is
obtained or debt is undertaken in firm commitment fulfillment, initial confirmation amount of the asset or debt
needs to be adjusted to include cumulative change value of fair value of the hedged project.
In case the hedged project is financial instrument (or its components) measured by amortized cost, adjustment to
carrying value of the hedged project made by the Company will be amortized according to actual interest rate which
is re-calculated on amortization start date and will be calculated into current profits and losses. In case the hedged
project is financial asset (or its components) which is measured by fair value and its change is calculated into other
comprehensive profits according to Article XVIII of NO.22 of Enterprise Accounting Codes--Confirmation of
Financial Instrument and Measurement, cumulative confirmed profits or losses will be amortized in the same way
and be calculated into current profits and losses, but carrying value of financial asset (or its components) will not be
adjusted.
2) Cash flow hedging
① Valid hedging part in profits or losses of hedging instrument is calculated into other comprehensive profits as
cash flow hedging reserve, and the invalid part is calculated into current profits and losses. The amount of cash flow
hedging reserve is confirmed according to the lower one of absolute amount of the following two items: A.
Cumulative profits or losses of the hedging instrument since the hedging start; B. Cumulative change amount of
current value of estimated future cash flow of the hedged project since the hedging start.
② In case the hedged project is forecast transaction, and the forecast transaction enables the Company to confirm
one non-financial asset or non-financial debt later, or forecast transaction of non-financial asset or non-financial
debt forms a firm commitment which is applicable for hedging accounting of fair value, the transfer-out of reserve
amount of cash flow hedging confirmed in other comprehensive profits is calculated into initial confirmation
amount of the asset or debt.
③ As for other cash flow hedging and reserve amount of cash flow hedging which was originally calculated into
other comprehensive profits and losses, transfer out during the same period of influence of transaction on profits and
losses is calculated into current profits and losses.
3) Overseas operation net investment hedging
Valid hedging part in profits or losses of hedging instrument is confirmed as other comprehensive profits , and its
transfer out is calculated into current profits and losses in disposing overseas operation; invalid hedging part in
profits or losses of hedging instrument is calculated into current profits and losses.
3. Accounting handling method relating to stocks repurchasing of the Company
In case of stock purchasing of the Company because of registration capital reduction or employee reward, it will be
97
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
handled as treasury stock according to actual paid amount and it will be registered for future reference at the same
time. In case the repurchased stocks are canceled, the difference between total face value of carrying value of
canceled stocks and stock face value calculated by canceled stock quantity and the actual paid amount for
repurchasing will offset capital reserve; in case the capital reserve is insufficient to offset, it will offset the retained
earnings. In case the repurchased stocks awarded to the Company employees, they are stock payment settled by
equity; while the employee exercises the right to purchase the Company stocks and the payment is received, charge
off the cumulative amount of the cost of treasury stocks delivered to the employee and capital reserve (other capital
reserve) in waiting period, and capital reserve (share premium) is adjusted by referring to the difference.
44. Changes in Main Accounting Policies and Estimates
(1) Change of Accounting Policies
□ Applicable √ Not applicable
(2) Changes in Accounting Estimates
□ Applicable √ Not applicable
(3) Adjustments to the Financial Statements at the Beginning of the First Execution Year of any New
Standards Governing Revenue or Leases since 2020
Applicable
Whether items of balance sheets at the beginning of the year need to be adjusted
□ Yes √ No
Reason why items of balance sheets at the beginning of the year do not need to be adjusted
No changes
(4) Retroactive Adjustments to Comparative Data of Prior Years when First Execution of any New
Standards Governing Revenue or Leases since 2020
□ Applicable √ Not applicable
45. Other
VI. Taxation
1. Main Taxes and Tax Rate
Category of taxes Tax basis Tax rate
VAT Sale of goods or rendering taxable services 5%、6%、9%、10%、13%、16%
Urban maintenance and construction tax Turnover tax actually paid 7%、5%
Enterprise income tax Taxable income 25%、15%
98
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
For taxation according to price, it shall pay
1.2% of the residual value of original
Property tax property value subtracting 30%; for 1.2%、12%
taxation according to rent, it shall pay 12%
of rental income
Education surcharge Turnover tax actually paid 3%
Local education surcharge Turnover tax actually paid 2%
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
Name Income tax rate
The Company 25%
Hongta Renheng 15%
Zhuhai Huafeng 15%
Golden Pheasant Chemical 15%
Huaxin Color Printing 15%
2. Tax Preference
(1) According to the Notice on Issuing the First Name List of Proposed Hi-tech Enterprise in Guangdong Province
for Y2018 published issued by Science & Technology Department of Guangdong Province, Hongta Renheng, the
Company’s subsidiary, passed the reaffirmation of First Batch of Hi-tech Enterprise in Guangdong Province for
Y2018, and gained Certificate for Hi-tech Enterprise (Certificate No.: GR201844005432, with three years of
validity). Hongta Renheng shall pay the corporate income tax according to the corporate income tax rate of 15%
in 2020.
(2) According to the First Name List of Proposed Hi-tech Enterprise in Guangdong Province for Y2019 published
by the National Leading Group Office for the Management of High-tech Enterprises Recognition, Zhuhai
Huafeng Paper, the Company’s subsidiary, passed the affirmation of First Batch of Proposed Hi-tech Enterprise in
Guangdong Province for Y2019, and gained Certificate for Hi-tech Enterprise (Certificate No.: GR201944002868,
with three years of validity). Zhuhai Huafeng Paper shall pay the corporate income tax according to the corporate
income tax rate of 15% in 2020.
(3) According to the Notice on Issuing the First Name List of Proposed Hi-tech Enterprise in Guangdong Province
for Y2019 published by the National Leading Group Office for the Management of High-tech Enterprises
Recognition, Golden Pheasant Chemical, the Company’s subsidiary, passed the reaffirmation of Hi-tech
Enterprise, and gained Certificate for Hi-tech Enterprise (Certificate No.: GR201944000753, with three years of
validity). Golden Pheasant Chemical shall pay the corporate income tax according to the corporate income tax rate
of 15% in 2020.
(4) According to the Notice on Issuing the Second Name List of Proposed Hi-tech Enterprise in Guangdong
Province for Y2018 jointly issued by Science & Technology Department of Guangdong Province, Department of
Finance of Guangdong Province, Guangdong Provincial Office, SAT, Guangdong Local Taxation Bureau, the
subsidiary of the Company Huaxin (Foshan) Color Printing, passed the reaffirmation of high-tech enterprise of
2018 and the gained the Certification of Hi-tech Enterprise (Certificate No.: GR201844009816, with three years
of validity). Thus Huaxin (Foshan) Color Printing shall pay the corporate income tax according to the corporate
income tax rate of 15% in 2020.
99
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
3. Other
VII. Notes to Major Items in the Consolidated Financial Statements of the Company
1. Monetary Assets
Unit: RMB
Item Ending balance Beginning balance
Cash on hand 157,267.74 215,289.12
Bank deposits 673,513,923.34 211,843,857.53
Other monetary assets 12,156,986.49 1,683,864.16
Total 685,828,177.57 213,743,010.81
Other notes:
The Company pledged the fixed time deposit of RMB550 million in bank deposits to open the bank acceptance
bill, and other monetary assets at the period-end were cash deposits for bank acceptance bill of
RMB12,156,986.49. For the money with restriction on usage, the Company has already gotten rid of it from the
cash and cash equivalents at the period-end when prepared the cash flow statement.
2. Trading Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Of which:
Of which:
Other notes:
3. Derivative Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Other notes:
4. Notes Receivable
(1) Notes Receivable Listed by Category
Unit: RMB
Item Ending balance Beginning balance
100
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Commercial acceptance bill 1,101,664.07
Total 1,101,664.07
Unit: RMB
Ending balance Beginning balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Category Withdra Withdraw
Carrying Carrying
Proportio wal Proportio al
Amount Amount value Amount Amount value
n proportio n proportio
n n
Of which:
Notes receivable with
bad debt provision 1,101,664 1,101,664
100.00%
withdrawn by .07 .07
groups:
Of which:
Commercial 1,101,664 1,101,664
100.00%
acceptance bill .07 .07
1,101,664 1,101,664
Total 100.00%
.07 .07
Bad debt provision separately accrued: 0
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion Withdrawal reason
Bad debt provision separately accrued: 0
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion Withdrawal reason
Bad debt provision separately accrued: 0
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion Withdrawal reason
Bad debt provision separately accrued: 0
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion Withdrawal reason
Bad debt provision separately accrued: 0
Unit: RMB
101
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion Withdrawal reason
Bad debt provision separately accrued: 0
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion Withdrawal reason
Bad debt provision separately accrued: 0
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion Withdrawal reason
Bad debt provision separately accrued: 0
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion Withdrawal reason
Bad debt provision withdrawn according to groups: 0
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion
Commercial acceptance bill 1,101,664.07
Total 1,101,664.07 --
Notes of the basis of recognizing the group:
Bad debt provision withdrawn according to groups:
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion
Notes of the basis of recognizing the group:
If the bad debt provision for notes receivable was withdrawn in accordance with the general model of expected credit losses,
information related to bad debt provision shall be disclosed by reference to the disclosure method of other receivables:
□ Applicable √ Not applicable
(2) Bad Debt Provision Withdrawn, Reversed or Collected during the Reporting Period
Bad debt provision withdrawn in the Reporting Period:
Unit: RMB
Increase/decrease
Beginning
Category Reversed or Ending balance
balance Withdrawn Verified Other
collected
102
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Of which, bad debt provision collected or reversed with significant amount:
□ Applicable √ Not applicable
(3) Notes Receivable Pledged by the Company at the Period-end
Unit: RMB
Item Amount pledged
(4) Notes Receivable which Had Endorsed by the Company or had Discounted and had not Due on the
Balance Sheet Date at the Period-end
Unit: RMB
Amount of recognition termination at the Amount of not terminated recognition at
Item
period-end the period-end
(5) Notes Transferred to Accounts Receivable because Drawer of the Notes Failed to Execute the Contract
or Agreement
Unit: RMB
Amount of the notes transferred to accounts receivable at the
Item
period-end
Other notes
(6) Notes Receivable with Actual Verification for the Reporting Period
Unit: RMB
Item Amount verified
Of which, verification of significant notes receivable:
Unit: RMB
Whether occurred
Reason for because of
Name of the entity Nature Amount verified Procedure
verification related-party
transactions
Notes of the verification of notes receivable:
5. Accounts Receivable
(1) Accounts Receivable Classified by Category
Unit: RMB
Category Ending balance Beginning balance
103
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Carrying amount Bad debt provision Carrying amount Bad debt provision
Withdra Withdraw
Carrying Carrying
Proportio wal Proportio al
Amount Amount value Amount Amount value
n proportio n proportio
n n
Accounts receivable
for which bad debt 41,085,8 41,085,8 40,889,59 40,889,59
6.32% 100.00% 4.51% 1.00%
provision accrued 50.41 50.41 3.47 3.47
separately
Of which:
Accounts receivable
609,473, 4,477,08 604,995,9 865,968,4 4,471,698 861,496,77
withdrawn bad debt 93.68% 0.73% 95.49% 0.01%
048.46 2.23 66.23 70.25 .67 1.58
provision by group
Of which:
650,558, 45,562,9 604,995,9 906,858,0 45,361,29 861,496,77
Total 100.00% 7.00% 100.00% 5.00%
898.87 32.64 66.23 63.72 2.14 1.58
Accounts receivable for which bad debt provision accrued separately: RMB41,085,850.41
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion Reason for withdrawal
Guangdong Yuejing
9,919,562.58 9,919,562.58 100.00% Expected unrecoverable
Group Co., Ltd.
HONG KONG C&K
DEVELOPMENT 5,240,432.66 5,240,432.66 100.00% Expected unrecoverable
LIMITED
Shenzhen Xieji Industrial Expected unrecoverable
3,760,350.10 3,760,350.10 100.00%
Co., Ltd.
Foshan Jiahe Paper Expected unrecoverable
3,152,239.70 3,152,239.70 100.00%
Trading Co., Ltd.
Foshan Nanhai Expected unrecoverable
1,225,359.43 1,225,359.43 100.00%
Gurunxuan Co., Ltd.
Shenzhen Yutong Expected unrecoverable
Packing & Printing Co., 1,087,171.61 1,087,171.61 100.00%
Ltd.
Guangdong Jiangnan Expected unrecoverable
1,070,324.24 1,070,324.24 100.00%
Paper Co., Ltd.
Zhuhai Gongbei Ronghui Expected unrecoverable
1,016,655.73 1,016,655.73 100.00%
Trading Co., Ltd.
Kaifeng Bokai Printing 922,328.60 922,328.60 100.00% Expected unrecoverable
104
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Co., Ltd.
Hongta Tobacco (Group) Expected unrecoverable
760,608.54 760,608.54 100.00%
Co., Ltd.
Shaanxi Annie Paper Co., Expected unrecoverable
720,710.90 720,710.90 100.00%
Ltd.
Dongguan Mainchoice Expected unrecoverable
718,639.99 718,639.99 100.00%
Paper Co., Ltd.
Nanjing Rende Paper Expected unrecoverable
660,577.18 660,577.18 100.00%
Co., Ltd.
Chongqing Jiufa Packing Expected unrecoverable
626,717.90 626,717.90 100.00%
& Printing Co., Ltd.
Chengdu Mingrong Expected unrecoverable
546,824.90 546,824.90 100.00%
Paper Co., Ltd.
Other 9,657,346.35 9,657,346.35 100.00% Expected unrecoverable
Total 41,085,850.41 41,085,850.41 -- --
Accounts receivable for which bad debt provision accrued separately:
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion Reason for withdrawal
Accounts receivable withdrawal of bad debt provision by groups: RMB4,477,082.23
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion
Aging group 609,473,048.46 4,477,082.23 0.73%
Total 609,473,048.46 4,477,082.23 --
Notes of the basis of recognizing the group:
Withdrawal of bad debt provision by group:
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion
Notes of the basis of recognizing the group:
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if adopting the general mode
of expected credit loss to withdraw bad debt provision of accounts receivable.
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Ending balance
105
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Within 1 year (including 1 year) 606,333,886.83
1-3 months 522,551,513.10
4-12 months 83,782,373.73
1 to 2 years 1,303,539.26
2 to 3 years 1,796,073.68
Over 3 years 41,125,399.10
3 to 4 years 39,548.69
Over 5 years 41,085,850.41
Total 650,558,898.87
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
Information of withdrawal of bad debt provision:
Unit: RMB
Changes in the Reporting Period
Beginning
Category Reversal or Ending balance
balance Withdrawal Write-off Other
recovery
Bad debt
provision
40,889,593.47 196,256.94 41,085,850.41
withdrawn
separately
Bad debt
provision
4,471,698.67 5,383.56 4,477,082.23
withdrawn by
groups
Total 45,361,292.14 201,640.50 45,562,932.64
Of which bad debt provision recovered or reversed with significant amount:
Unit: RMB
Name of the entity Amount Method
(3) Particulars of the Actual Verification of Accounts Receivable during the Reporting Period
Unit: RMB
Item Amount
Of which significant actual verification of accounts receivable
Unit: RMB
Whether occurred
Name of the entity Nature Amount Reason Procedure
because of
106
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
related-party
transactions
Notes of the verification of accounts receivable:
(4) Top 5 of Account Receivable of Ending Balance Collected by Arrears Party
Unit: RMB
Proportion to total balance of Ending balance of bad debt
Name of the entity Ending balance
accounts receivable (%) provision
No.1 34,028,533.43 5.62%
No.2 25,110,742.35 4.15%
No.3 22,064,918.84 3.65%
No.4 17,581,586.55 2.91%
No.5 16,522,190.06 2.73%
Total 115,307,971.23 19.06%
(5) Derecognition of Account Receivable due to the Transfer of Financial Assets
(6) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of
Accounts Receivable
Other notes:
6. Accounts Receivable Financing
Unit: RMB
Item Ending balance Beginning balance
Notes receivable 561,162,410.89 573,333,722.20
Total 561,162,410.89 573,333,722.20
Changes in accounts receivable financing and fair value in the Reporting Period
□ Applicable √ Not applicable
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if adopting the general mode
of expected credit loss to withdraw bad debt provision of accounts receivable financing.
□ Applicable √ Not applicable
Other notes:
7. Prepayment
(1) List by Aging Analysis
Unit: RMB
107
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Ending balance Beginning balance
Aging
Amount Proportion Amount Proportion
Within 1 year 91,502,040.02 97.79% 28,122,703.79 89.44%
1 to 2 years 1,346,027.54 1.44% 2,766,586.31 8.80%
2 to 3 years 333,733.00 0.36% 430,705.50 1.37%
Over 3 years 387,065.03 0.41% 123,456.50 0.39%
Total 93,568,865.59 -- 31,443,452.10 --
Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in time:
(2) Top 5 of the Ending Balance of the Prepayment Collected according to the Prepayment Target
Name of the entity Ending balance Proportion to the Time Reason for
balance of unsettlement
prepayments (%)
No.1 26,248,083.83 28.05% Within 1year Not reaching the
settlement date
No.2 9,735,253.49 10.40% Within 1year Not reaching the
settlement date
No.3 5,472,456.69 5.85% Within 1year Not reaching the
settlement date
No.4 4,140,818.02 4.43% Within 1year Not reaching the
settlement date
No.5 3,646,372.16 3.90% Within 1year Not reaching the
settlement date
Total 49,242,984.19 52.63%
Other notes:
8. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Interest receivable 20,206,542.99
Dividends receivable 28,000,000.00 28,000,000.00
Other receivables 15,256,570.65 13,390,516.58
Total 63,463,113.64 41,390,516.58
108
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
(1) Interest Receivable
1) Category of Interest Receivable
Unit: RMB
Item Ending balance Beginning balance
Fixed time deposits 20,206,542.99
Total 20,206,542.99
2) Significant Overdue Interest
Unit: RMB
Whether occurred
Entity Ending balance Overdue time Overdue reason impairment and the
judgment basis
Other notes:
3) Withdrawal of Bad Debt Provision
□ Applicable √ Not applicable
(2) Dividends Receivable
1) Category of Dividends Receivable
Unit: RMB
Item (or investees) Ending balance Beginning balance
Dividends receivable 28,000,000.00 28,000,000.00
Total 28,000,000.00 28,000,000.00
2) Significant Dividend Receivable Aged over 1 Year
Unit: RMB
Whether occurred
Item (or investees) Ending balance Aging Reason impairment and its
judgment basis
3) Withdrawal of Bad Debt Provision
□ Applicable √ Not applicable
Other notes:
109
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
(3) Other Receivables
1) Other Receivables Classified by Nature
Unit: RMB
Nature Ending carrying amount Beginning carrying amount
Margin 2,134,018.49 2,557,766.50
Petty cash 1,637,524.67 549,296.72
Freight and miscellaneous charges on
113,941.24
behalf
Compensation for victim’s families on
6,513,995.15 6,696,000.00
behalf
Other intercourse funds 33,035,923.95 31,274,959.21
Total 43,321,462.26 41,191,963.67
2) Withdrawal of Bad Debt Provision
Unit: RMB
First stage Second stage Third stage
Expected loss in the Expected loss in the
Bad debt provision Expected credit loss Total
duration (credit impairment duration (credit impairment
of the next 12 months
not occurred) occurred)
Balance of 1 January
169,121.91 1,925,536.86 25,706,788.32 27,801,447.09
2020
Balance of 1 January
2020 in the Current —— —— —— ——
Period
Withdrawal of the
-4,762.98 265,826.01 261,063.03
Current Period
Balance of 30 June 2020 169,121.91 1,920,773.88 25,972,614.33 28,062,510.12
Changes of carrying amount with significant amount changed of loss provision in the Current Period
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Ending balance
Within 1 year (including 1 year) 7,289,991.53
1 to 3 months 4,061,311.27
4 to 12 months 3,228,680.26
110
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
1 to 2 years 1,935,227.10
2 to 3 years 7,600,086.98
Over 3 years 26,496,156.65
3 to 4 years 523,542.32
Over 5 years 25,972,614.33
Total 43,321,462.26
3) Bad Debt Provision Withdrawal, Reversed or Recovered in the Reporting Period
Withdrawal of Bad Debt Provision:
Unit: RMB
Changes in the Reporting Period
Beginning
Category Reversal or Ending balance
balance Withdrawal Write-off Other
recovery
Bad debt
provision of other 27,801,447.09 261,063.03 28,062,510.12
receivables
Total 27,801,447.09 261,063.03 28,062,510.12
Of which bad debt provision reversed or recovered with significant amount during the Reporting Period:
Unit: RMB
Name of the entity Reversed or collected amount Method
4) Particulars of the Actual Verification of Other Receivables during the Reporting Period
Unit: RMB
Item Amount
Of which the verification of other receivables:
Unit: RMB
Whether occurred
because of
Name of the entity Nature Amount Reason Procedure
related-party
transactions
Notes of verification of other receivables:
5) Top 5 of the Ending Balance of the Other Receivables Collected according to the Arrears Party
Unit: RMB
Proportion to ending Ending balance of
Name of the entity Nature Ending balance Aging
balance of other bad debt provision
111
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
receivables (%)
No.1 Other intercourse
13,749,496.51 Over 3 years 31.74% 13,749,496.51
funds
No.2 Borrowings 6,000,000.00 Over 3 years 13.85% 6,000,000.00
No.3 Payment of
compensation on 2,232,000.00 2 to 3 yeas 5.15% 446,400.00
behalf
No.4 Payment of
compensation on 2,232,000.00 2 to 3 years 5.15% 446,400.00
behalf
No.5 Payment of
compensation on 2,049,995.15 2 to 3 years 4.73% 409,999.03
behalf
Total -- 26,263,491.66 -- 60.62% 21,052,295.54
6) Accounts Receivable Involving Government Subsidies
Unit: RMB
Project of government Estimated recovering
Name of the entity Ending balance Aging at the period-end
subsidies time, amount and basis
7) Derecognition of Other Receivables due to the Transfer of Financial Assets
8) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of
Other Receivables
Other notes:
9. Inventory
Whether the Company needs to comply with the disclosure requirements for real estate industry
No
(1) Category of Inventory
Unit: RMB
Ending balance Beginning balance
Falling price Falling price
Item reserves of reserves of
Carrying amount Carrying value Carrying amount Carrying value
inventory or inventory or
depreciation depreciation
112
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
reserves of reserves of
contract contract
performance cost performance cost
Raw materials 277,025,310.36 4,159,204.71 272,866,105.65 329,199,695.38 4,159,204.71 325,040,490.67
Goods in process 25,790,906.05 25,790,906.05 42,393,859.68 42,393,859.68
Inventory goods 312,620,099.27 2,169,737.93 310,450,361.34 266,701,629.28 2,169,737.93 264,531,891.35
Goods in transit 40,544,616.86 40,544,616.86 28,959,830.51 28,959,830.51
Total 655,980,932.54 6,328,942.64 649,651,989.90 667,255,014.85 6,328,942.64 660,926,072.21
(2) Falling Price Reserves of Inventory and Depreciation Reserves of Contract Performance Cost
Unit: RMB
Increase Decrease
Beginning
Item Reverse or Ending balance
balance Withdrawal Other Other
write-off
Raw materials 4,159,204.71 4,159,204.71
Inventory goods 2,169,737.93 2,169,737.93
Total 6,328,942.64 6,328,942.64
Particular basis of net realizable value and reason for reversal or write-off of falling price reserves of inventory:
Item Particular basis of net realizable Reason for reversal of Reason for write-off of
value falling price reserves of falling price reserves
inventory of inventory
Raw materials Net realizable value shall be the Net realizable value of The inventory
amount after the estimated sale inventory withdrawn withdrawn falling
price of relevant finished goods falling price reserves of price reserves of
minus the cost estimated to be inventory in prior period inventory at the
incurred till completion and increased period-beginning has
estimated selling expenses and been sold
relevant taxes
Inventory Net realizable value shall be the Net realizable value of The inventory
goods/goods in amount after the estimated sale inventory withdrawn withdrawn falling
transit price or contract price of relevant falling price reserves of price reserves of
finished goods minus estimated inventory in prior period inventory at the
selling expenses and relevant taxes increased period-beginning has
been sold
113
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
(3) Notes to the Ending Balance of Inventory Including Capitalized Borrowing Expense
(4) Notes to Amortization of the Contract Performance Cost
10. Contract Assets
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciation Carrying Depreciation
Carrying value Carrying value
amount reserve amount reserve
Significant changes in amount of carrying value of contract assets and reason in the Reporting Period:
Unit: RMB
Item Amount changed Reason
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if adopting the general mode
of expected credit loss to withdraw bad debt provision of contract assets.
□ Applicable √ Not applicable
Information of impairment provision withdrawn of contract assets:
Unit: RMB
Item Withdrawal Reversal Write-off Reason
Other notes:
11. Held-for-sale Assets
Unit: RMB
Ending carrying Depreciation Ending carrying Estimated Estimated
Item Fair value
amount reserve value disposal expense disposal time
Other notes:
12. Current Portion of Non-current Assets
Unit: RMB
Item Ending balance Beginning balance
Significant creditors’ investment/other creditors’ investment
Unit: RMB
Ending balance Beginning balance
Item
Par value Coupon rate Actual rate Due date Par value Coupon rate Actual rate Due date
Other notes:
114
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
13. Other Current Assets
Unit: RMB
Item Ending balance Beginning balance
The VAT deduction 9,498,035.35 8,216,317.40
Structured deposits 220,000,000.00 214,000,000.00
Accrued interests 4,453,333.32
Prepaid expense 10,974,621.67
Total 229,498,035.35 237,644,272.39
Other notes:
14. Creditors’ Investment
Unit: RMB
Ending balance Beginning balance
Item Depreciation Depreciation
Carrying amount Carrying value Carrying amount Carrying value
reserves reserves
Significant creditors’ investment
Unit: RMB
Ending balance Beginning balance
Item
Par value Coupon rate Actual rate Due date Par value Coupon rate Actual rate Due date
Withdrawal of impairment provision
Unit: RMB
First stage Second stage Third stage
Expected loss in the Expected loss in the
Bad debt provision Expected credit loss Total
duration (credit impairment duration (credit impairment
of the next 12 months
not occurred) occurred)
Balance of 1 January
2020 in the Current —— —— —— ——
Period
Changes of carrying amount with significant amount changed of loss provision in the Current Period
□ Applicable √ Not applicable
Other notes:
15. Other Creditors’ Investment
Unit: RMB
Beginning Accrued Changes in Ending Accumulativ Accumulativ
Item Cost Notes
balance interest fair value balance e changes in e loss
115
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
fair value provision
recognized in
other
comprehensi
ve income
Significant other creditors’ investment
Unit: RMB
Ending balance Beginning balance
Item
Par value Coupon rate Actual rate Due date Par value Coupon rate Actual rate Due date
Information of withdrawal of impairment provision
Unit: RMB
First stage Second stage Third stage
Expected loss in the Expected loss in the
Bad debt provision Expected credit loss Total
duration (credit impairment duration (credit impairment
of the next 12 months
not occurred) occurred)
Balance of 1 January
2020 in the Current —— —— —— ——
Period
Changes of carrying amount with significant amount changed of loss provision in the Current Period
□ Applicable √ Not applicable
Other notes:
16. Long-term Receivables
(1) List of Long-term Receivables
Unit: RMB
Ending balance Beginning balance
Interval of
Item Carrying Bad debt Carrying Bad debt
Carrying value Carrying value discount rate
amount provision amount provision
Impairment of bad debt provision
Unit: RMB
First stage Second stage Third stage
Expected loss in the Expected loss in the
Bad debt provision Expected credit loss Total
duration (credit impairment duration (credit impairment
of the next 12 months
not occurred) occurred)
Balance of 1 January
2020 in the Current —— —— —— ——
Period
Changes of carrying amount with significant amount changed of loss provision in the current period
116
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
□ Applicable √ Not applicable
(2) Derecognition of Long-term Receivables due to the Transfer of Financial Assets
(3) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of
Long-term Receivables
Other notes
17. Long-term Equity Investment
Unit: RMB
Increase/decrease
Ending
Gains and Adjustme
Beginnin Cash Withdraw Ending balance
Additiona losses nt of
g balance Reduced Changes bonus or al of balance of
Investees l recognize other
(carrying investmen of other profits depreciati Other (carrying depreciati
investmen d under comprehe
value) t equity announce on value) on
t the equity nsive
d to issue reserves reserves
method income
I. Joint ventures
II. Associated enterprises
Guangdo
ng
Chengton 8,642,303 -315,172. 8,327,131
g .90 31 .59
Logistics
Co., Ltd.
China
Chengton
646,670,0 14,504,00 661,174,0
g Finance
63.65 3.67 67.32
Corporati
on Ltd.
655,312,3 14,188,83 669,501,1
Subtotal
67.55 1.36 98.91
655,312,3 14,188,83 669,501,1
Total
67.55 1.36 98.91
Other notes
18. Other Equity Instrument Investment
Unit: RMB
117
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Item Ending balance Beginning balance
Non-trading equity instrument investment in the Reporting Period disclosed by items
Unit: RMB
Reason for
assigning to
Amount of other Reason for other
measure in fair
comprehensive comprehensive
Dividend income Accumulative Accumulative value of which
Item income income
recognized gains losses changes included
transferred to transferred to
other
retained earnings retained earnings
comprehensive
income
Other notes:
19. Other Non-current Financial Assets
Unit: RMB
Item Ending balance Beginning balance
Classified to financial assets measured by
288,700.00 288,700.00
fair value through profit or loss
Total 288,700.00 288,700.00
Other notes:
20. Investment Property
(1) Investment Property Adopting the Cost Measurement Mode
√ Applicable □ Not applicable
Unit: RMB
Item Houses and buildings Land use right Construction in progress Total
I. Original carrying value
1. Beginning balance 46,541,207.59 46,541,207.59
2. Increased amount of
the period
(1) Outsourcing
(2)Transfer from
inventories/fixed
assets/construction in
progress
(3)Enterprise
combination increase
118
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
3. Decreased amount of
the period
(1) Disposal
(2) Other transfer
4. Ending balance 46,541,207.59 46,541,207.59
II.Accumulative
depreciation and
accumulative
amortization
1. Beginning balance 17,425,545.73 17,425,545.73
2. Increased amount of
337,709.62 337,709.62
the period
(1)Withdrawal or
337,709.62 337,709.62
amortization
3.Decreased amount of
the period
(1) Disposal
(2) Other transfer
4. Ending balance 17,763,255.35 17,763,255.35
III. Depreciation reserves
1. Beginning balance
2.Increased amount of
the period
(1) Withdrawal
3.Decreased amount of
the period
(1) Disposal
(2) Other transfer
4. Ending balance
IV. Carrying value
119
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
1. Ending carrying value 28,777,952.24 28,777,952.24
2.Beginning carrying
29,115,661.86 29,115,661.86
value
(2) Investment Property Adopting the Fair Value Measurement Mode
□ Applicable √ Not applicable
(3) Investment Property Failed to Accomplish Certification of Property
Unit: RMB
Item Carrying value Reason
Other notes
21. Fixed Assets
Unit: RMB
Item Ending balance Beginning balance
Fixed assets 2,000,531,709.38 2,067,109,815.77
Total 2,000,531,709.38 2,067,109,815.77
(1) List of Fixed Assets
Unit: RMB
Electronic
Houses and Machinery
Item Transportation equipment and Total
buildings equipment
others
I. Original carrying
value
1. Beginning
1,167,028,654.32 2,871,770,577.46 45,322,148.01 144,118,405.59 4,228,239,785.38
balance
2. Increased
378,817.99 7,388,023.70 235,459.36 2,641,073.69 10,643,374.74
amount of the period
(1) Purchase 378,817.99 4,115,390.28 235,459.36 2,641,073.69 7,370,741.32
(2) Transfer
from construction in 3,272,633.42 3,272,633.42
progress
(3) Enterprise
combination increase
120
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
3. Decreased
1,073,003.87 967,773.19 1,471.52 2,042,248.58
amount of the period
(1) Disposal or
1,073,003.87 967,773.19 1,471.52 2,042,248.58
scrap
4. Ending balance 1,166,334,468.44 2,878,190,827.97 45,557,607.37 146,758,007.76 4,236,840,911.54
II. Accumulative
depreciation
1. Beginning
466,945,628.57 1,464,896,139.69 39,472,399.77 113,136,044.58 2,084,450,212.61
balance
2. Increased
17,473,936.12 54,294,922.34 635,002.17 3,412,523.79 75,816,384.42
amount of the period
(1) Withdrawal 17,473,936.12 54,294,922.34 635,002.17 3,412,523.79 75,816,384.42
3. Decreased
455,289.47 180,464.46 1,397.94 637,151.87
amount of the period
(1) Disposal or
455,289.47 180,464.46 1,397.94 637,151.87
scrap
4. Ending balance 483,964,275.22 1,519,010,597.57 40,107,401.94 116,547,170.43 2,159,629,445.16
III. Depreciation
reserves
1. Beginning
76,679,757.00 76,679,757.00
balance
2. Increased
amount of the period
(1) Withdrawal
3. Decreased
amount of the period
(1) Disposal or
scrap
4. Ending balance 76,679,757.00 76,679,757.00
IV. Carrying value
1. Ending carrying
682,370,193.22 1,282,500,473.40 5,450,205.43 30,210,837.33 2,000,531,709.38
value
121
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
2. Beginning
700,083,025.75 1,330,194,680.77 5,849,748.24 30,982,361.01 2,067,109,815.77
carrying value
(2) List of Temporarily Idle Fixed Assets
Unit: RMB
Original carrying Accumulative Depreciation
Item Carrying value Note
value depreciation reserves
(3) Fixed Assets Leased in by Financing Lease
Unit: RMB
Accumulative
Item Original carrying value Depreciation reserves Carrying value
depreciation
Houses and buildings 12,212,610.00 11,601,979.50 610,630.50
Machinery equipment 3,160,000.00 3,002,000.00 158,000.00
Total 15,372,610.00 14,603,979.50 768,630.50
(4) Fixed Assets Leased out by Operation Lease
Unit: RMB
Item Ending carrying value
(5) Fixed Assets Failed to Accomplish Certification of Property
Unit: RMB
Item Carrying value Reason
Property right certificate was under
Houses and buildings 93,639,423.89
process
Total 93,639,423.89
Other notes
(6) Proceeds from Disposal of Fixed Assets
Unit: RMB
Item Ending balance Beginning balance
Other notes
22. Construction in Progress
Unit: RMB
122
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Item Ending balance Beginning balance
Construction in progress 59,082,753.75 33,321,697.05
Total 59,082,753.75 33,321,697.05
(1) List of Construction in Progress
Unit: RMB
Ending balance Beginning balance
Item Depreciation Depreciation
Carrying amount Carrying value Carrying amount Carrying value
reserves reserves
Latex phase II
matching raw
17,953,703.52 17,953,703.52 17,621,170.82 17,621,170.82
material tank
farm project
Heidelberg
six-color offset 10,958,970.75 10,958,970.75
press
Treatment system
for industrial 4,746,736.94 4,746,736.94 3,723,869.66 3,723,869.66
waste gas
Capping and
deodorization
4,033,997.11 4,033,997.11
project for
sewage pool
Protection and
treatment
2,830,000.00 2,830,000.00
equipment for
waste gas
Advanced
waste-water
treatment and 2,477,929.63 2,477,929.63 2,477,929.63 2,477,929.63
water reuse
project
Equipment
renovation of
BM3 bag 2,322,438.15 2,322,438.15
ventilation
system
Ink-jet printing
1,964,601.72 1,964,601.72
equipment
123
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Other 11,794,375.93 11,794,375.93 9,498,726.94 9,498,726.94
Total 59,082,753.75 59,082,753.75 33,321,697.05 33,321,697.05
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB
Of
Proporti
which:
on of Accumul Capitaliz
Amount
accumul ated ation rate
Transferr of
Beginnin Other ated amount of
Increase ed in Ending Job capitaliz Capital
Item Budget g decrease investme of interests
d amount fixed balance schedule ed resources
balance d amount nt in interest for the
assets interests
construct capitaliz Reportin
for the
ions to ation g Period
Reportin
budget
g Period
Latex
phase II
matching
raw 20,000,0 17,621,1 332,532. 17,953,7
89.77% 89.77% Other
material 00.00 70.82 70 03.52
tank
farm
project
Heidelbe
rg
13,000,0 10,958,9 10,958,9
six-color 84.30% 84.30% Other
00.00 70.75 70.75
offset
press
Treatme
nt
system
6,020,00 3,723,86 1,022,86 4,746,73
for 78.85% 78.85% Other
0.00 9.66 7.28 6.94
industria
l waste
gas
Capping
and
deodoriz 6,305,00 4,033,99 4,033,99
63.98% 63.98% Other
ation 0.00 7.11 7.11
project
for
124
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
sewage
pool
Protectio
n and
treatmen
t 5,220,00 2,830,00 2,830,00
54.21% 54.21% Other
equipme 0.00 0.00 0.00
nt for
waste
gas
Advance
d
waste-w
ater
18,000,0 2,477,92 2,477,92
treatmen 13.77% 13.77% Other
00.00 9.63 9.63
t and
water
reuse
project
Equipme
nt
renovati
on of 3,000,00 2,322,43 2,322,43
77.41% 77.41% Other
BM3 bag 0.00 8.15 8.15
ventilati
on
system
Ink-jet
printing 1,400,00 1,964,60 1,964,60
140.33% 140.33% Other
equipme 0.00 1.72 1.72
nt
9,498,72 5,568,28 3,272,63 11,794,3
Other Other
6.94 2.41 3.42 75.93
72,945,0 33,321,6 29,033,6 3,272,63 59,082,7
Total -- -- --
00.00 97.05 90.12 3.42 53.75
(3) List of the Withdrawal of the Depreciation Reserves for Construction in Progress
Unit: RMB
Item Amount withdrawn Reason for withdrawal
Other notes
125
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
(4) Engineering Materials
Unit: RMB
Ending balance Beginning balance
Item Depreciation Carrying Depreciation
Carrying amount Carrying value Carrying value
reserves amount reserves
Other notes:
23. Productive Living Assets
(1) Productive Living Assets Adopting Cost Measurement Mode
□ Applicable √ Not applicable
(2) Productive Living Assets Adopting Fair Value Measurement Mode
□ Applicable √ Not applicable
24. Oil and Gas Assets
□ Applicable √ Not applicable
25. Right-of-use Assets
Unit: RMB
Item Total
Other notes:
26. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
Non-patent
Item Land use right Patent right Software and other Total
technology
I. Original carrying
value
1. Beginning
132,437,333.89 70,829,002.85 15,323,772.53 218,590,109.27
balance
2. Increased
447,153.14 447,153.14
amount of the period
(1) Purchase 447,153.14 447,153.14
126
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
(2) Internal
R&D
(3) Business
combination increase
3. Decreased
amount of the period
(1) Disposal
4. Ending balance 132,437,333.89 70,829,002.85 15,770,925.67 219,037,262.41
II. Accumulated
amortization
1. Beginning
54,371,141.70 30,065,283.17 6,985,659.98 91,422,084.85
balance
2. Increased
3,184,380.78 2,849,751.18 1,110,942.96 7,145,074.92
amount of the period
(1) Withdrawal 3,184,380.78 2,849,751.18 1,110,942.96 7,145,074.92
3. Decreased
amount of the period
(1) Disposal
4. Ending balance 57,555,522.48 32,915,034.35 8,096,602.94 98,567,159.77
III. Depreciation
reserves
1. Beginning
balance
2. Increased
amount of the period
(1) Withdrawal
3. Decreased
amount of the period
(1) Disposal
4. Ending balance
IV. Carrying value
127
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
1. Ending carrying
74,881,811.41 37,913,968.50 7,674,322.73 120,470,102.64
value
2. Beginning
78,066,192.19 40,763,719.68 8,338,112.55 127,168,024.42
carrying value
The proportion of intangible assets formed from the internal R&D of the Company at the Period-end to the ending balance of
intangible assets was 0.00%.
(2) Land Use Right with Certificate of Title Uncompleted
Unit: RMB
Item Carrying value Reason
Other notes:
27. Development Costs
Unit: RMB
Increase Decrease
Beginning Recognized Transfer to Ending
Item Internal
balance Other as intangible current gains balance
development
assets and losses
R&D of
tobacco stem 2,799,715.49 2,799,715.49
board
Renovation
and R&D of
503,329.83 1,592.92 504,922.75
BM1 product
line
Microporous
patterns test 247,787.60 247,787.60
roll
Total 3,550,832.92 1,592.92 3,552,425.84
Other notes
28. Goodwill
(1) Original Carrying Value of Goodwill
Unit: RMB
Name of the Increase Decrease
Beginning
invested units or Formed by Ending balance
balance Disposal
events generating business
128
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
goodwill combination
Zhuhai Hongta
Renheng Paper 9,129,025.01 9,129,025.01
Co., Ltd.
Zhuhai Golden
Pheasant
2,418,280.28 2,418,280.28
Chemicals Co.,
Ltd.
Total 11,547,305.29 11,547,305.29
(2) Depreciation Reserves of Goodwill
Unit: RMB
Name of the Increase Decrease
invested units or Beginning
Ending balance
events generating balance Withdrawal Disposal
goodwill
Total
Information on the assets group or combination of assets groups which goodwill belongs to
Notes of the testing process of goodwill impairment, parameters (such as growth rate of the forecast period, growth rate of stable
period, rate of profit, discount rate, forecast period and so on for prediction of future present value of cash flows) and the recognition
method of goodwill impairment losses:
Influence of goodwill impairment testing
Other notes
29. Long-term Prepaid Expense
Unit: RMB
Amortization Other decreased
Item Beginning balance Increased amount Ending balance
amount of the period amount
Decoration expense
123,501.67 1,035,088.17 31,080.59 1,127,509.25
for rent-in plant
Fee for technical
58,201.56 43,651.32 14,550.24
service
Maintaining
renovation of
3,297,033.10 800,000.00 738,650.67 3,358,382.43
construction
project
Total 3,478,736.33 1,835,088.17 813,382.58 4,500,441.92
129
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Other notes
30. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets that Had not Been Off-set
Unit: RMB
Ending balance Beginning balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Provision for impairment
155,967,724.07 23,395,158.61 155,967,724.07 23,395,158.61
of assets
Unrealized profit of
2,681,803.60 402,270.54 2,681,803.60 402,270.54
internal transactions
Accrued expenses 49,685,130.33 7,452,769.55 49,685,130.33 7,452,769.55
Total 208,334,658.00 31,250,198.70 208,334,658.00 31,250,198.70
(2) Deferred Income Tax Liabilities Had Not Been Off-set
Unit: RMB
Ending balance Beginning balance
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
difference liabilities difference liabilities
Assets evaluation
appreciation in the
14,538,840.13 2,180,826.02 14,538,840.13 2,180,826.02
business combination not
under the same control
Total 14,538,840.13 2,180,826.02 14,538,840.13 2,180,826.02
(3) Deferred Income Tax Assets or Liabilities Listed by Net Amount after Off-set
Unit: RMB
Mutual set-off amount of Ending balance of Mutual set-off amount of Beginning balance of
deferred income tax deferred income tax deferred income tax deferred income tax
Item
assets and liabilities at assets or liabilities after assets and liabilities at assets or liabilities after
the period-end off-set the period-begin off-set
Deferred income tax
31,250,198.70 31,250,198.70
assets
Deferred income tax
2,180,826.02 2,180,826.02
liabilities
130
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
(4) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
Item Ending balance Beginning balance
Deductible losses 260,851,721.46 260,851,721.46
Provision for impairment of assets 203,714.86 203,714.86
Total 261,055,436.32 261,055,436.32
(5) Deductible Losses of Unrecognized Deferred Income Tax Assets will Due in the Following Years
Unit: RMB
Years Ending amount Beginning amount Notes
Y2020 72,934,938.44 72,934,938.44
Y2021 1,734,170.90 1,734,170.90
Y2022 9,996,774.57 9,996,774.57
Y2023 114,385,480.74 114,385,480.74
Y2024 61,800,356.81 61,800,356.81
Total 260,851,721.46 260,851,721.46 --
Other notes:
31. Other Non-current Assets
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciation Carrying Carrying Depreciation Carrying
amount reserve value amount reserve value
Prepayment of equipment 13,350.00 13,350.00 8,420,488.55 8,420,488.55
Total 13,350.00 13,350.00 8,420,488.55 8,420,488.55
Other notes:
32. Short-term Borrowings
(1) Category of Short-term Borrowings
Unit: RMB
Item Ending balance Beginning balance
Guaranteed borrowings 879,070,896.82 933,181,293.29
Credit borrowings 230,306,166.66
131
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Total 879,070,896.82 1,163,487,459.95
Notes of short-term loans category:
(2) List of the Short-term Borrowings Overdue but Not Returned
The amount of the overdue unpaid short-term borrowings at the period-end was of RMBXXX, of which the significant overdue
unpaid short-term borrowings are as follows:
Unit: RMB
Borrower Ending balance Interest rate Overdue time Overdue charge rate
Other notes:
33. Trading Financial Liabilities
Unit: RMB
Item Ending balance Beginning balance
Of which:
Of which:
Other notes:
34. Derivative Financial Liabilities
Unit: RMB
Item Ending balance Beginning balance
Other notes:
35. Notes Payable
Unit: RMB
Category Ending balance Beginning balance
Trade acceptance bill 50,000,000.00
Bank acceptance bill 648,959,029.44 312,234,422.87
Total 698,959,029.44 312,234,422.87
The total amount of the due but not paid notes payable at the end of the period was of RMB0.00.
36. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
Item Ending balance Beginning balance
132
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Payment of materials 286,025,171.75 272,330,279.37
Payment of equipment 2,540,630.26 4,126,064.70
Payment of freight 41,130,818.27 44,252,556.51
Other 17,665,389.65 1,246,610.06
Total 347,362,009.93 321,955,510.64
(2) Significant Accounts Payable Aging over One Year
Unit: RMB
Item Ending balance Unpaid/ Un-carry-over reason
Other notes:
37. Advances from Customers
(1) List of Advances from Customers
Unit: RMB
Item Ending balance Beginning balance
Advances on sales 16,944,581.70 23,303,552.10
Total 16,944,581.70 23,303,552.10
(2) Significant Advances from Customers Aging over One Year
Unit: RMB
Item Ending balance Unpaid/ Un-carry-over reason
Other notes：
38. Contract Liabilities
Unit: RMB
Item Ending balance Beginning balance
Contract liabilities 16,680,827.04
Total 16,680,827.04
Significant changes in amount of carrying value and the reason in the Reporting Period
Unit: RMB
Item Amount changed Reason
133
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
39. Payroll Payable
(1) List of Payroll Payable
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
I. Short-term salary 42,209,286.31 89,232,324.66 102,107,424.71 29,334,186.26
II. Post-employment
benefit-defined 133,097.88 1,547,689.71 1,237,534.92 443,252.67
contribution plans
III. Termination benefits 2,634,825.00 2,634,825.00
Total 42,342,384.19 93,414,839.37 105,979,784.63 29,777,438.93
(2) List of Short-term Salary
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
1. Salary, bonus,
31,673,430.59 81,082,979.54 94,297,900.38 18,458,509.75
allowance, subsidy
2. Employee welfare 2,707,255.10 2,707,255.10
3. Social insurance 1,765,797.40 1,765,797.40
Of which: Medical
1,473,448.02 1,473,448.02
insurance premiums
Work-re
25,691.59 25,691.59
lated injury insurance
Materni
266,657.79 266,657.79
ty insurance
4. Housing fund 2,197,722.68 2,197,722.68
5. Labor union budget
and employee education 10,535,855.72 1,478,569.94 1,138,749.15 10,875,676.51
budget
Total 42,209,286.31 89,232,324.66 102,107,424.71 29,334,186.26
(3) List of Defined Contribution Plans
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
1. Basic pension benefits 999,984.78 999,984.78
2. Unemployment 32,561.04 32,561.04
134
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
insurance
3. Annuity 133,097.88 515,143.89 204,989.10 443,252.67
Total 133,097.88 1,547,689.71 1,237,534.92 443,252.67
Other notes:
40. Taxes Payable
Unit: RMB
Item Ending balance Beginning balance
VAT 8,431,505.53 7,708,757.58
Corporate income tax 2,680,073.99 3,974,465.87
Personal income tax 644,729.87 263,130.54
Urban maintenance and construction tax 542,158.47 641,488.51
Property tax 3,321,155.13 55,672.21
Land use tax 1,176,365.42
Education surcharge 232,353.63 274,923.65
Local education surcharge 154,902.42 183,282.43
Stamp tax 193,422.31 325,271.46
Other 99,626.17 40,924.81
Total 17,476,292.94 13,467,917.06
Other notes:
41. Other Payables
Unit: RMB
Item Ending balance Beginning balance
Interest payable 255,713.64
Dividends payable 238,138.78 229,593.13
Other payables 163,626,288.49 48,993,061.88
Total 164,120,140.91 49,222,655.01
(1) Interest Payable
Unit: RMB
Item Ending balance Beginning balance
Interest payable of short-term borrowings 255,713.64
Total 255,713.64
135
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
List of the significant overdue unpaid interest:
Unit: RMB
Borrower Overdue amount Overdue reasons
Other notes:
(2) Dividends Payable
Unit: RMB
Item Ending balance Beginning balance
Ordinary share dividends 238,138.78 229,593.13
Total 238,138.78 229,593.13
Other notes, including significant dividends payable unpaid for over one year, the unpaid reason shall be disclosed:
(3) Other Payables
1) Other Payables Listed by Nature
Unit: RMB
Item Ending balance Beginning balance
Pledged and margin 18,512,440.56 16,008,042.64
Prepayment 21,415,190.22 12,283,948.35
Capital of related parties 103,271,947.85 15,266,830.85
Final payment of engineering 472,704.26 442,889.51
Other 19,954,005.60 4,991,350.53
Total 163,626,288.49 48,993,061.88
2) Significant Other Payables Aging over One Year
Unit: RMB
Item Ending balance Unpaid/Un-carry-over reason
Other notes
42. Liabilities Held for Sale
Unit: RMB
Item Ending balance Beginning balance
Other notes:
136
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
43. Current Portion of Non-current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Current portion of long-term borrowings 100,229,305.56
Total 100,229,305.56
Other notes:
44. Other Current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Increase/decrease of the short-term bonds payable:
Unit: RMB
Amortizat
Withdraw
ion of Repayme
The al of
Bonds Issuing Issuing Beginnin premium nt in the Ending
Par value Duration current interest
name date amount g balance and Reporting balance
issue by par
depreciati Period
value
on
Other notes:
45. Long-term Borrowings
(1) Category of Long-term Borrowings
Unit: RMB
Item Ending balance Beginning balance
Notes to the category of long-term borrowings:
Other notes, including the interval of interest rate:
46. Bonds Payable
(1) List of Bonds Payable
Unit: RMB
Item Ending balance Beginning balance
137
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
(2) Increase/Decrease of Bonds Payable (Excluding Other Financial Instrument Classified as Financial
Liabilities such as Preferred Shares and Perpetual Bonds)
Unit: RMB
Amortizat
Withdraw
ion of Repayme
The al of
Bonds Issuing Issuing Beginnin premium nt in the Ending
Par value Duration current interest
name date amount g balance and Reporting balance
issue by par
depreciati Period
value
on
Total -- -- --
(3) Notes to the Conditions and Time of the Shares Transfer of the Convertible Corporate Bonds
(4) Notes to Other Financial Instruments Classified as Financial Liabilities
Basic situation of other financial instruments such as preferred shares and perpetual bonds outstanding at the period-end
Changes in financial instruments such as preferred shares and perpetual bonds outstanding at the period-end
Unit: RMB
Outstanding Period-beginning Increase Decrease Period-end
financial Carrying Carrying Carrying Carrying
Amount Amount Amount Amount
instrument value value value value
Notes to basis for the classification of other financial instruments as financial liabilities
Other notes
47. Lease Liabilities
Unit: RMB
Item Ending balance Beginning balance
Other notes
48. Long-term Payables
Unit: RMB
Item Ending balance Beginning balance
(1) Long-term Payables Listed by Nature
Unit: RMB
Item Ending balance Beginning balance
138
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Other notes:
(2) Specific Payables
Unit: RMB
Reason for
Item Beginning balance Increase Decrease Ending balance
formation
Other notes:
49. Long-term Payroll Payable
(1) List of Long-term Payroll Payable
Unit: RMB
Item Ending balance Beginning balance
(2) Changes in Defined Benefit Plans
Obligation present value of defined benefit plans:
Unit: RMB
Item Reporting Period Same period of last year
Plan assets:
Unit: RMB
Item Reporting Period Same period of last year
Net liabilities (net assets) of defined benefit plans:
Unit: RMB
Item Reporting Period Same period of last year
Notes of influence of content of defined benefit plans and its relevant risks to the future cash flow, time and uncertainty of the
Company:
Notes to the results of significant actuarial assumptions and sensitivity analysis of defined benefit plans:
Other notes:
50. Provision
Unit: RMB
Item Ending balance Beginning balance Reason for formation
Predicted losses resulting from
Product quality guarantee 1,696,811.00 1,696,811.00
any product quality problem
Total 1,696,811.00 1,696,811.00 --
Other notes, including notes to related significant assumptions and evaluation of significant provisions:
139
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
51. Deferred Income
Unit: RMB
Reason for
Item Beginning balance Increase Decrease Ending balance
formation
Government grants 26,604,363.11 1,325,063.87 25,279,299.24
Total 26,604,363.11 1,325,063.87 25,279,299.24 --
Item involving government grants:
Unit: RMB
Amount Amount
recorded into recorded into Amount
Amount of Related to
Beginning non-operatin other income offset cost in Other Ending
Item newly assets/related
balance g income in in the the Reporting changes balance
subsidy to income
the Reporting Reporting Period
Period Period
Renovation
project of the
information
system of
Related to
paper-making 656,000.00 16,000.00 640,000.00
assets
enterprise
energy
management
center
No. 1 paper
machine
Related to
update & 204,800.00 4,800.00 200,000.00
assets
renovation
project
Liquid paper
Related to
renovation 163,333.12 17,500.02 145,833.10
assets
project
Renovation
project of the
information
Related to
system of 536,666.79 139,999.98 396,666.81
assets
energy
management
center
Steam Related to
768,000.00 192,000.00 576,000.00
condensation assets
140
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
water
recycling and
energy saving
projects
BM1 ink-jet
printer
system and
drive system
Related to
upgrade 9,136,612.59 223,753.78 8,912,858.81
assets
synthesis
technique
transformatio
n project
Zhuhai
Gaolan Port
national
treasury
equipment Related to
877,066.36 20,799.87 856,266.49
renewal assets
(Robot
Application)
special fund
subsidies
Energy
management
center
energy-savin Related to
436,386.79 113,839.98 322,546.81
g assets
technological
innovation
support fund
Post-awarded
subsidies of
Automatic Related to
3,910,150.04 89,502.84 3,820,647.20
packaging assets
line technical
innovation
Post-awarded
subsidies of
HCB-Turn Related to
1,608,435.89 36,417.42 1,572,018.47
Nozzle assets
optimization
and
141
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
technological
transformatio
n project
Post-awarded
subsidies of
TP liquid
food packing
Related to
board 4,921,289.50 98,754.96 4,822,534.54
assets
synthesis
technique
transformatio
n project
Post-awarded
subsidies of
MES
technical
renovation Related to
594,970.91 324,529.62 270,441.29
project of assets
Zhuhai
Huafeng
Paper Co.,
Ltd.
Subsidy for
migration of Related to
2,224,599.79 47,165.40 2,177,434.39
high voltage assets
cable
Specific
project
subsidy for a
new round of
technical Related to
295,151.33 295,151.33
renovation in assets
Finance
Bureau of
Chancheng
District
2017
provincial
industrial and
Related to
information 270,900.00 270,900.00
assets
specific funds
of Foshan
Finance
142
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Bureau
(technical
renovation)
26,604,363.1 25,279,299.2
Total 1,325,063.87
1 4
Other notes:
52. Other Non-current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Other notes:
53. Share Capital
Unit: RMB
Increase/decrease (+/-)
Beginning
New shares Bonus issue Ending balance
balance Bonus shares Other Subtotal
issued from profit
The sum of
505,425,000.00 505,425,000.00
shares
Other notes:
54. Other Equity Instruments
(1) The Basic Information of Other Financial Instruments such as Preferred Stock and Perpetual Bond
Outstanding at the End of the Period
(2) Changes in Financial Instruments such as Preferred Stock and Perpetual Bond Outstanding at the End
of the Period
Unit: RMB
Outstanding Period-beginning Increase Decrease Period-end
financial Carrying Carrying Carrying Carrying
Amount Amount Amount Amount
instruments value value value value
The current changes in other equity instruments and the corresponding reasons and the basis of the relevant accounting treatment:
Other notes:
55. Capital Reserves
Unit: RMB
143
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Item Beginning balance Increase Decrease Ending balance
Capital premium
256,362,525.38 256,362,525.38
(premium on stock)
Other capital reserves 459,848.04 459,848.04
Total 256,822,373.42 256,822,373.42
Other notes, including changes and reason of change:
56. Treasury Shares
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Other notes, including changes and reason of change:
57. Other Comprehensive Income
Unit: RMB
Reporting Period
Less:
Less: Recorded
Recorded in in other
other comprehe Attributabl
Income comprehensi nsive e to Attributabl
before ve income in income in Less: owners of e to
Beginning Ending
Item taxation in prior period prior Income the non-contro
balance balance
the and period and tax Company lling
Current transferred in transferred expense as the interests
Period profit or loss to retained parent after tax
in the earnings in after tax
Current the
Period Current
Period
II. Other comprehensive income
169,714.
that may subsequently be 169,714.39
39
reclassified to profit or loss
Of which: Share of other
comprehensive income of
169,714.
investees that will be reclassified 169,714.39
39
to profit or loss under equity
method
Total of other comprehensive 169,714.
169,714.39
income 39
144
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Other notes, including the adjustment of the effective gain/loss on cash flow hedges to the initial recognized amount:
58. Specific Reserve
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Other notes, including changes and reason of change:
59. Surplus Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Statutory surplus
199,022,513.20 199,022,513.20
reserves
Total 199,022,513.20 199,022,513.20
Notes, including changes and reason of change:
60. Retained Earnings
Unit: RMB
Item Reporting Period Same period of last year
Beginning balance of retained earnings before
1,045,211,890.50 1,012,130,481.68
adjustments
Total beginning balance of retained earnings
18,316.37
before adjustment (increase+, decrease-)
Beginning balance of retained earnings after
1,045,211,890.50 1,012,148,798.05
adjustments
Add: Net profit attributable to owners of the
47,569,827.49 10,489,265.80
Company as the parent
Dividend of ordinary shares payable 7,581,375.00 12,718,781.92
Ending retained earnings 1,085,200,342.99 1,009,919,281.93
List of adjustment of beginning retained earnings:
(1) RMB0.00 beginning retained earnings was affected by retrospective adjustment conducted according to the Accounting Standards
for Business Enterprises and relevant new regulations.
(2) RMB0.00 beginning retained earnings was affected by changes in accounting policies.
(3) RMB0.00 beginning retained earnings was affected by correction of significant accounting errors.
(4) RMB0.00 beginning retained earnings was affected by changes in combination scope arising from same control.
(5) RMB0.00 beginning retained earnings was affected totally by other adjustments.
145
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
61. Operating Revenue and Cost of Sales
Unit: RMB
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 1,829,581,089.37 1,497,681,444.57 1,717,953,710.89 1,529,428,697.30
Other operations 20,001,285.33 14,625,261.98 15,172,526.79 10,350,333.27
Total 1,849,582,374.70 1,512,306,706.55 1,733,126,237.68 1,539,779,030.57
Relevant information of revenue:
Unit: RMB
Category of
Segment 1 Segment 2 Segment 3 Other Internal offset Total
contracts
Type of products 1,507,925,688.07 154,484,467.81 207,482,570.21 15,327,349.86 -55,638,986.58 1,829,581,089.37
Of which:
Ivory board 1,507,925,688.07 15,327,349.86 -3,889,544.09 1,519,363,493.84
Presswork 154,484,467.81 154,484,467.81
Chemical
207,482,570.21 -51,749,442.49 155,733,127.72
industry
Of which:
Of which:
Of which:
Of which:
Of which:
Of which:
Information related to performance obligations:
None
Information related to transaction value assigned to residual performance obligations:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or not fully performed yet
was RMB0.00 at the period-end, among which RMB0.00 was expected to be recognized in the year, RMB0.00 in the year and
RMB0.00 in the year.
Other notes
62. Taxes and Surtaxes
Unit: RMB
Item Reporting Period Same period of last year
Urban maintenance and construction tax 3,460,447.25 1,508,336.46
146
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Education surcharge 2,471,748.04 1,077,315.27
Property tax 3,358,948.67 5,065,418.19
Land use tax 1,176,365.42 1,176,365.41
Vehicle and vessel use tax 14,233.88 9,979.92
Stamp duty 1,155,625.65 1,143,510.07
Environmental tariff 136,590.45 115,646.96
Total 11,773,959.36 10,096,572.28
Other notes:
63. Selling Expense
Unit: RMB
Item Reporting Period Same period of last year
Salary and benefits 9,806,704.48 7,366,815.16
Freight and miscellaneous charges 61,072,870.40 48,262,353.07
Business entertainment fees 2,890,896.82 1,836,962.11
Warehousing fees/rental fees 2,422,312.21 5,096,953.57
Packing charges 5,712,946.78 4,504,350.08
Other 7,459,163.51 2,335,083.16
Total 89,364,894.20 69,402,517.15
Other notes:
64. Administrative Expense
Unit: RMB
Item Reporting Period Same period of last year
Salary and benefits 17,528,753.72 12,615,979.27
Social insurance 1,094,771.81 2,112,371.73
Taxation
Depreciation 7,680,536.47 10,526,421.84
Office expenses 8,282,548.08 9,103,954.42
Business entertainment fees 785,608.71 1,327,451.32
Other 13,300,120.37 14,812,068.45
Total 48,672,339.16 50,498,247.03
Other notes:
147
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
65. Development Costs
Unit: RMB
Item Reporting Period Same period of last year
Labor charges 16,546,112.87 4,403,748.04
Direct input expense 69,295,245.53 44,018,181.80
Depreciation and long-term amortization 3,978,889.33 3,764,946.64
Amortization of intangible assets 47,844.50 50,636.17
Other expanses 611,785.78 236,807.67
Total 90,479,878.01 52,474,320.32
Other notes:
66. Finance Costs
Unit: RMB
Item Reporting Period Same period of last year
Interest expense 38,058,626.34 36,967,366.21
Less: Interest income 11,589,567.61 8,948,675.02
Foreign exchange gains or losses -445,411.55 294,385.55
Other 3,074,644.11 2,211,828.77
Total 29,098,291.29 30,524,905.51
Other notes:
67. Other Income
Unit: RMB
Sources Reporting Period Same period of last year
Government grant related to assets 1,325,063.87 1,576,007.68
Government grant related to income 8,745,758.31 2,360,313.67
Total 10,070,822.18 3,936,321.35
68. Investment Income
Unit: RMB
Item Reporting Period Same period of last year
Long-term equity investment income
14,188,831.36 16,774,990.13
accounted by equity method
Total 14,188,831.36 16,774,990.13
148
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Other notes:
69. Net Gains on Exposure Hedges
Unit: RMB
Item Reporting Period Same period of last year
Other notes:
70. Gain on Changes in Fair Value
Unit: RMB
Sources Reporting Period Same period of last year
Other notes:
71. Credit Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
Bad debt loss of other receivables -465,085.02
Total -465,085.02
Other notes:
72. Assets Impairment Loss
Unit: RMB
Item Reporting Period Same period of last year
I. Bad debt loss -44,711.85
Total -44,711.85
Other notes:
73. Asset Disposal Income
Unit: RMB
Sources Reporting Period Same period of last year
Gain on disposal of fixed assets -69,442.59 -16,367.16
Total -69,442.59 -16,367.16
74. Non-operating Income
Unit: RMB
149
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Amount recorded in the current
Item Reporting Period Same period of last year
non-recurring profit or loss
Other 3,426,822.06 1,010,381.90 3,426,822.06
Total 3,426,822.06 1,010,381.90 3,426,822.06
Government grants recorded into current profit or loss
Unit: RMB
Whether
influence the Special Related to
Distribution Distribution Reporting Same period
Item Nature profits or subsidy or assets/related
entity reason Period of last year
losses of the not to income
year or not
Other notes:
75. Non-operating Expense
Unit: RMB
Amount recorded in the current
Item Reporting Period Same period of last year
non-recurring profit or loss
Donations 95,000.00 95,000.00
Other 984,186.63 873,583.84 984,186.63
Total 1,079,186.63 873,583.84 1,079,186.63
Other notes:
76. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
Item Reporting Period Same period of last year
Current income tax expense 3,159,251.49 3,245,990.34
Total 3,159,251.49 3,245,990.34
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
Item Reporting Period
Profit before taxation 93,959,067.49
Current income tax expense accounted at statutory/applicable tax
23,558,133.91
rate
150
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Influence of applying different tax rates by subsidiaries -8,223,246.58
Influence of adjusting prior income tax -1,592,439.26
Influence of deductible temporary difference or deductible losses
-10,583,196.58
of unrecognized deferred income tax in the Reporting Period
Income tax expense 3,159,251.49
Other notes
77. Other Comprehensive Income
Refer to Note 57 for details.
78. Cash Flow Statement
(1) Cash Generated from Other Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Government grants 8,919,466.34 4,596,222.43
Interest income from deposits in banks 2,555,455.52 5,696,016.77
Cash pledge 2,171,000.00 2,048,398.35
Intercourse funds 5,358,804.55 2,763,480.33
Insurance indemnity 148,466.75 418,862.33
Other 2,310,385.26 2,336,371.08
Total 21,463,578.42 17,859,351.29
Notes:
(2) Cash Used in Other Operating Activities
Unit: RMB
Item Reporting Period Same period of last year
Utilities 1,006,751.10 1,161.07
Repair charge 525,648.46 844,795.51
Transport charge 117,784.26 60,564.00
Business entertainment expenses 3,321,731.39 3,099,479.30
Rental fees 2,893,127.05 3,068,354.58
Business travel charge 2,710,047.70 2,597,471.04
Emission charges 4,097,059.38 4,680,416.02
Handling charge for banks 3,260,184.89 2,208,131.81
151
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Premium 333,899.68 383,015.68
Charge for the agency 4,277,366.99 1,830,675.38
Intercourse funds 11,527,772.60 176,201,527.91
Correspondence 779,531.26 661,127.22
Vehicle charge 780,574.83 1,067,817.82
Other 14,703,602.55 11,863,336.49
Total 50,335,082.14 208,567,873.83
Notes:
(3) Cash Generated from Other Investing Activities
Unit: RMB
Item Reporting Period Same period of last year
Principal of structural deposits 116,700,000.00 132,200,000.00
Total 116,700,000.00 132,200,000.00
Notes:
(4) Cash Used in Other Investing Activities
Unit: RMB
Item Reporting Period Same period of last year
Principal of structural deposits, etc. 672,700,000.00 15,000,000.00
Total 672,700,000.00 15,000,000.00
Notes:
(5) Cash Generated from Other Financing Activities
Unit: RMB
Item Reporting Period Same period of last year
Note financing 300,000,000.00
Internal current account 100,000,000.00
Total 400,000,000.00
Notes:
(6) Cash Used in Other Financing Activities
Unit: RMB
Item Reporting Period Same period of last year
152
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Restricted monetary capital as margin or
12,156,986.49 10,501,660.17
pledge
Repayment for borrowings from external
12,600,000.00 16,000,000.00
parties
Note financing and commission charges 7,307,777.76
Total 32,064,764.25 26,501,660.17
Notes:
79. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
Supplemental information Reporting Period Same period of last year
1. Reconciliation of net profit to net cash
-- --
flows generated from operating activities
Net profit 90,799,816.00 -2,108,314.99
Add: Provision for impairment of assets 465,085.02 44,711.85
Depreciation of fixed assets, oil and gas
75,816,384.42 75,489,459.11
assets, and productive living assets
Amortization of intangible assets 7,145,074.92 6,885,243.83
Amortization of long-term prepaid expenses 813,382.58 875,824.12
Losses from disposal of fixed assets,
intangible assets and other long-lived assets 69,442.59 16,367.16
(gains: negative)
Finance costs (gains: negative) 29,098,291.29 30,524,905.51
Investment loss (gains: negative) -14,188,831.36 -16,774,990.13
Decrease in inventories (increase: negative) 11,274,082.31 237,646,511.02
Decrease in accounts receivable generated
203,870,009.33 -229,865,830.03
from operating activities (gains: negative)
Increase in accounts payable used in
142,069,272.45 -451,894,687.24
operating activities (decrease: negative)
Net cash generated from/used in operating
547,232,009.55 -349,160,799.79
activities
2. Significant investing and financing
activities without involvement of cash -- --
receipts and payments
3. Net increase/decrease of cash and cash -- --
153
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
equivalent:
Ending balance of cash 123,671,191.08 206,825,557.58
Less: Beginning balance of cash 213,743,010.81 133,983,939.73
Net increase in cash and cash equivalents -90,071,819.73 72,841,617.85
(2) Net Cash Paid For Acquisition of Subsidiaries
Unit: RMB
Amount
Of which: --
Of which: --
Of which: --
Other notes:
(3) Net Cash Received from Disposal of the Subsidiaries
Unit: RMB
Amount
Of which: --
Of which: --
Of which: --
Other notes：
(4) Cash and Cash Equivalents
Unit: RMB
Item Ending balance Beginning balance
I. Cash 123,671,191.08 213,743,010.81
Including: Cash on hand 157,267.74 215,289.12
Bank deposit on demand 673,513,923.34 111,843,857.53
III. Ending balance of cash and cash
123,671,191.08 213,743,010.81
equivalents
Other notes:
80. Notes to Items of the Statements of Changes in Owners’ Equity
Notes to the name of “Other” of ending balance of the same period of last year adjusted and the amount adjusted:
154
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
81. Assets with Restricted Ownership or Right of Use
Unit: RMB
Item Ending carrying value Reason for restriction
Deposit for fixed time deposit and bank
Monetary assets 562,156,986.49
acceptance bill
Other current assets 220,000,000.00 Structural deposit
Total 782,156,986.49 --
Other notes:
82. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RMB
Ending foreign currency Ending balance converted to
Item Exchange rate
balance RMB
Monetary assets -- --
Of which: USD 3,158,608.95 7.08 22,361,372.09
EUR
HKD 12,016.72 0.91 10,976.56
GBP 11.72 8.71 102.13
Accounts receivable -- --
Of which: USD 6,563,520.35 7.08 46,466,442.31
EUR
HKD 2,982,178.46 0.91 2,724,041.09
Long-term borrowings -- --
Of which: USD
EUR
HKD
Short-term borrowings --
Of which: USD 23,758,580.18 7.08 168,198,868.39
Prepayment --
Of which: USD 16,040,080.36 7.08 113,555,748.90
EUR 131,241.00 7.96 1,044,809.60
Other receivables --
155
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Of which: HKD 15,052,435.31 0.91 13,749,496.51
Accounts payable --
Of which: USD 89,493.00 7.08 633,565.69
Other notes:
(2) Notes to Overseas Entities Including: for Significant Oversea Entities, Main Operating Place, Recording
Currency and Selection Basis Shall Be Disclosed; if there Are Changes in Recording Currency, Relevant
Reasons Shall Be Disclosed.
□ Applicable √ Not applicable
83. Arbitrage
Qualitative and quantitative information of relevant arbitrage instruments, hedged risk in line with the type of arbitrage to disclose:
84. Government Grants
(1) Basic Information on Government Grants
Unit: RMB
Amount recorded in the current
Category Amount Listed items
profit or loss
Government grant related to
1,325,063.87 Other income 1,325,063.87
assets
Government grant, related to
income, and used to compensate
8,745,758.31 Other income 8,745,758.31
accrual cost expense or losses
of the Company
Total 10,070,822.18 10,070,822.18
(2) Return of Government Grants
□ Applicable √ Not applicable
Other notes:
156
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
85. Other
VIII. Changes of Consolidation Scope
1. Business Combination Not under the Same Control
(1) Business Combination Not under the Same Control during the Reporting Period
Unit: RMB
Income of Net profits of
Time and
Cost of Recognition acquiree from acquiree from
Name of place of Proportion of Way to gain
gaining the Purchase date basis of the purchase the purchase
acquiree gaining the equity the equity
equity purchase date date to date to
equity
period-end period-end
Other notes:
(2) Combination Cost and Goodwill
Unit: RMB
Combination cost
Note to determination method of the fair value of the combination cost, consideration and changes:
The main formation reason for the large goodwill:
Other notes:
(3) The Identifiable Assets and Liabilities of Acquiree on Purchase Date
Unit: RMB
Fair value on purchase date Carrying value on purchase date
The determination method of the fair value of identifiable assets and liabilities
Contingent liability of acquiree undertaken in the business combination
Other notes:
(4) Gains or losses from Re-measurement of Equity Held before the Purchase Date at Fair Value
Whether there is a transaction that through multiple transaction step by step to realize business combination and gaining the control
during the Reporting Period
□ Yes √ No
157
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
(5) Notes to Reasonable Consideration or Fair Value of Identifiable Assets and Liabilities of the Acquiree
that Cannot Be Determined on the Acquisition Date or during the Period-end of the Merger
(6) Other Notes
2. Business Combination under the Same Control
(1) Business Combination under the Same Control during the Reporting Period
Unit: RMB
Income from Net profits
the from the Income of the Net profits of
Recognition
period-begin period-begin acquiree the acquiree
Combined Proportion of Combination basis of
Basis ning to the ning to the during the during the
party the equity date combination
combination combination period of period of
date
date of the date of the comparison comparison
acquiree acquiree
Other notes:
(2) Combination Cost
Unit: RMB
Combination cost
Note to contingent consideration and the changes:
Other notes:
(3) The Carrying Value of Assets and Liabilities of the Combined Party on the Combination Date
Unit: RMB
Combination date Period-end of the last period
Contingent liabilities of the combined party undertaken in the business combination
Other notes:
3. Counter Purchase
Basic information of trading, the basis of transactions constitute counter purchase, the retain assets , liabilities of the listed companies
whether constituted a business and its basis, the determination of the combination costs, the amount and calculation of adjusted rights
and interests in accordance with the equity transaction process:
4. Disposal of Subsidiary
Whether there is a single disposal of the investment to the subsidiary and lost control?
158
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
□ Yes √ No
Whether there are several disposals of the investment to the subsidiary and lost controls?
□ Yes √ No
5. Changes in Combination Scope for Other Reasons
Note to changes in combination scope for other reasons (such as new establishment or liquidation of subsidiaries, etc.) and relevant
information:
6. Other
IX. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
Main operating Nature of Holding percentage (%)
Name Registration place Way of gaining
place business Directly Indirectly
Business
Zhuhai Hongta
Manufacturing combination not
Renheng Paper Zhuhai Zhuhai 41.97%
industry under the same
Co., Ltd.
control
Business
Zhuhai Huafeng Manufacturing combination
Zhuhai Zhuhai 100.00%
Paper Co., Ltd. industry under the same
control
Zhuhai Golden Business
Pheasant Manufacturing combination not
Zhuhai Zhuhai 51.00%
Chemical Co., industry under the same
Ltd. control
Huaxin (Foshan)
Manufacturing
Color Printing Foshan Foshan 100.00% Establishment
industry
Co., Ltd.
Notes: Holding proportion in subsidiary different from voting proportion:
Basis of holding half or less voting rights but still controlling the investee and holding more than half of the voting rights but not
controlling the investee:
The Company holds 41.9653% shares of Hongta Renheng, and in accordance with the contract and articles, there
is seven directors in Hongta Renheng, of which four directors are sent by the Company, two sent by Yunnan
Hongta Group Co., Ltd. (now renamed to Yunnan Hehe (Group) Co., Ltd.) and one sent by Renheng Industrial Co.,
Ltd. Dragon State International Limited didn’t send any director. The Company still controls Hongta Renheng,
and will continue to include it into the consolidated financial statements of the Company in this year.
159
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Significant structural entities and controlling basis in the scope of combination:
Basis of determining whether the Company is the agent or the principal:
Other notes:
(2) Significant Non-wholly-owned Subsidiary
Unit: RMB
Shareholding proportion The profit or loss Declaring dividends Balance of
Name of non-controlling attributable to the distributed to non-controlling interests
interests non-controlling interests non-controlling interests at the period-end
Zhuhai Hongta Renheng
58.03% 8,659,925.35 103,376,055.13
Packaging Co., Ltd.
Holding proportion of non-controlling interests in subsidiary different from voting proportion:
Other notes:
(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary
Unit: RMB
Ending balance Beginning balance
Non-curr Non-curr Non-curr Non-curr
Name Current Total Current Total Current Total Current Total
ent ent ent ent
assets assets liabilities liabilities assets assets liabilities liabilities
assets liability assets liability
Zhuhai
Hongta
Renheng 2,639,68 2,075,63 4,715,32 1,869,98 149,350, 2,019,33 2,461,92 2,141,70 4,603,63 1,925,20 50,675,5 1,975,87
Packagin 9,852.79 6,054.41 5,907.20 7,838.70 522.66 8,361.36 6,612.57 9,928.17 6,540.74 1,252.84 86.53 6,839.37
g Co.,
Ltd.
Unit: RMB
Reporting Period Same period of last year
Cash flows Cash flows
Total Total
Name Operating from Operating from
Net profit comprehensi Net profit comprehensi
revenue operating revenue operating
ve income ve income
activities activities
Zhuhai
Hongta
1,676,028,76 68,227,844.4 68,227,844.4 547,127,849. 1,580,350,48 -25,461,242.3 -25,461,242.3 -346,508,511.
Renheng
5.27 7 7 96 1.08 0 0 07
Packaging
Co., Ltd.
Other notes:
160
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
(4) Significant Restrictions on Using the Assets and Liquidating the Liabilities of the Company
(5) Financial Support or Other Supports Provided to Structural Entities Incorporated into the Scope of
Consolidated Financial Statements
Other notes:
2. The Transaction of the Company with Its Owner’s Equity Share Changed but Still Controlling the
Subsidiary
(1) Note to the Owner’s Equity Share Changed in Subsidiary
(2) The Transaction’s Influence on the Equity of Non-controlling Interests and the Owner's Equity
Attributable to the Company as the Parent
Unit: RMB
Other notes
3. Equity in Joint Ventures or Associated Enterprises
(1) Significant Joint Ventures or Associated Enterprises
Holding percentage (%) Accounting
treatment of the
Main operating Nature of investment to
Name Registration place
place business Directly Indirectly joint venture or
associated
enterprise
China Chengtong
Accounted by
Finance Beijing Beijing Financial industry 10.00%
equity method
Corporation Ltd.
Notes to holding proportion of joint venture or associated enterprise different from voting proportion:
Basis of holding less than 20% of the voting rights but has a significant impact or holding 20% or more voting rights but does not
have a significant impact:
During the Reporting Period, the voting proportion in China Chengtong Finance Corporation Ltd. enjoyed by the
Company is less than 20%. Since the Company has sent directors to participate in its operation and
decision-making, the Company still has significant influence on it.
(2) Main Financial Information of Significant Joint Ventures
Unit: RMB
161
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Beginning balance/The same period of last
Ending balance/Reporting Period
year
Other notes
(3) Main Financial Information of Significant Associated Enterprise
Unit: RMB
Beginning balance/The same period of last
Ending balance/Reporting Period
year
China Chengtong Finance Corporation China Chengtong Finance Corporation
Ltd. Ltd.
Current assets 15,820,908,479.35 12,200,783,753.87
Non-current assets 5,967,565,016.26 10,740,612,707.36
Total assets 21,788,473,495.61 22,941,396,461.23
Current liabilities 15,176,732,822.38 16,474,695,824.73
Total liabilities 15,176,732,822.38 16,474,695,824.73
Equity attributable to owners of the
6,611,740,673.23 6,466,700,636.51
Company as the parent
Portion of net assets calculated according
661,174,067.32 646,670,063.65
to proportion of shareholdings
Carrying value of equity investment to
661,174,067.32 646,670,063.65
associated enterprise
Operating revenue 219,013,940.57 274,100,890.45
Net profit 145,037,968.00 167,148,315.55
Total comprehensive income 145,037,968.00 167,148,315.55
Dividend received from associated
10,000,000.00
enterprises in the current year
Other notes
(4) Summary Financial Information of Insignificant Joint Ventures or Associated Enterprise
Unit: RMB
Beginning balance/The same period of last
Ending balance/Reporting Period
year
Joint ventures: -- --
The total of following items according to the
-- --
shareholding proportions
162
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Associated enterprises: -- --
Total carrying value of investment 8,327,131.59 8,642,303.90
The total of following items according to the
-- --
shareholding proportions
--Net profit 862,163.18 187,931.62
--Total comprehensive income 862,163.18 187,931.62
Other notes
(5) Note to the Significant Restrictions on the Ability of Joint Ventures or Associated Enterprises to
Transfer Funds to the Company
(6) The Excess Loss of Joint Ventures or Associated Enterprises
Unit: RMB
The cumulative recognized The derecognized losses (or the
The accumulative unrecognized
Name losses in previous share of net profit) in Reporting
losses in Reporting Period
accumulatively derecognized Period
Other notes
(7) The Unrecognized Commitment Related to Investment to Joint Ventures
(8) Contingent Liabilities Related to Investment to Joint Ventures or Associated Enterprises
4. Significant Common Operation
Proportion /share portion
Name Main operating place Registration place Nature of business
Directly Indirectly
Notes to holding proportion or share portion in common operation different from voting proportion:
For common operation as a single entity, basis of classifying as common operation
Other notes
5. Equity in the Structured Entity Excluded in the Scope of Consolidated Financial Statements
Notes to the structured entity excluded in the scope of consolidated financial statements:
6. Other
X. The Risk Related to Financial Instruments
The Company is engaged in risk management to achieve balance between risks and returns, minimizing the
negative effects of risks on its operation performance and maximizing the interests of its shareholders and other
equity investors. Based on that risk management goal, the fundamental strategy of its risk management is to
163
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
identify and analyze various risks facing the Company, establish an appropriate risk bottom line, carry out risk
management and monitor various risks in a timely and reliable manner to control them within a restricted scope.
The Company faces various risks related to financial instruments in its routine activities, mainly including credit
risk, liquidity risk market risk. The management has reviewed and approved the policies of managing those risks,
which are summarized as follows.
(I) Credit Risk
Credit risk means the risk of financial losses incurred to the other party when one party of a financial instrument is
unable to fulfill its obligations.
The Company’s credit risk mainly comes from bank deposits and accounts receivable. To control the
aforementioned relevant risks, the Company has adopted the following measures.
1. Bank deposits
The Company places its bank deposits with financial institutions of high credit ratings. Thus, its credit risk is low.
2. Accounts receivable
The Company conducts credit assessment on the customers trading in the mode of credit on a regular basis. Based
on the credit assessment result, the Company chooses to trade with recognized customers with good credit and
monitor the balance of the accounts receivable from them to ensure that the Company will not face any significant
bad debt risk.
(II) Liquidity Risk
Liquidity risk refers to the risk of fund shortage occurring when the Company fulfills the settlement obligation in
the mode of cash delivery or other financial assets. Liquidity risk may originate from the failure to sell financial
assets at fair value as soon as possible; or from the other party’s failure to pay off its contractual debts; or from the
earlier maturity of debts; or from the failure to generate the expected cash flow.
To control the risk, the Company comprehensively adopts multiple financing approaches including notes clearing
and bank loans, appropriately combine long-term and short-term financing modes and optimize the financing
structure to maintain the balance between financing sustainability and flexibility. The Company has obtained the
line of credit from a number of commercial banks to satisfy its operation fund needs and capital expenditure.
(III) Market Risk
Market risk means the fluctuation risk of the fair value of financial instruments or the future cash flow due to
market price changes.
1. Interest rate risk
Interest rate risk means the fluctuation risk of the fair value of financial instruments or the future cash flow due to
changes of market interest rate. The risk of changes of market interest rate facing the Company is mainly related
to its borrowings with interests calculated in floating interest rates.
2. Foreign exchange risk
XI. The Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
Ending fair value
Item Fair value measurement Fair value measurement Fair value measurement
Total
items at level 1 items at level 2 items at level 3
164
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
I. Consistent fair value
-- -- -- --
measurement
II. Inconsistent fair value
-- -- -- --
measurement
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level
1
3. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for
Consistent and Inconsistent Fair Value Measurement Items at Level 2
4. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for
Consistent and Inconsistent Fair Value Measurement Items at Level 3
5. Sensitiveness Analysis on Unobservable Parameters and Adjustment Information between Beginning and
Ending Carrying Value of Consistent Fair Value Measurement Items at Level 3
6. Explain the Reason for Conversion and the Governing Policy when the Conversion Happens if
Conversion Happens among Consistent Fair Value Measurement Items at Different Levels
7. Changes in the Valuation Technique in the Current Period and the Reason for Such Changes
8. Fair Value of Financial Assets and Liabilities Not Measured at Fair Value
9. Other
XII. Related Party and Related-party Transactions
1. Information Related to the Company as the Parent of the Company
Proportion of share Proportion of voting
held by the rights owned by the
Name Registration place Nature of business Registered capital Company as the Company as the
parent against the parent against the
Company (%) Company (%)
Foshan Huaxin
Manufacturing
Development Co., Foshan RMB457.93 million 65.20% 65.20%
industry
Ltd.
Notes: Information on the Company as the parent
China Paper Corporation, the actual controller of the Company, directly holds 0.11% shares of the Company. The
total shares of the Company directly held by China Paper Corporation and indirectly held through Foshan Huaxin
Development Co., Ltd. are 65.31%. China Chengtong Holdings Group Co., Ltd., the ultimate controller of the
Company, enjoys all shares of China Paper Corporation.
165
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
The ultimate controller of the Company is China Chengtong Holdings Group Co., Ltd.
Other notes:
2. Subsidiaries of the Company
Refer to Note IX for details of subsidiaries of the Company.
3. Information on the Joint Ventures and Associated Enterprises of the Company
Refer to Note IX for details of significant joint ventures or associated enterprises of the Company.
Information on other joint venture or associated enterprise of occurring related-party transactions with the Company in Reporting
Period, or forming balance due to related-party transactions made in previous period:
Name Relationship with the Company
Guangdong Chengtong Logistics Co., Ltd. Associated enterprise
Other notes
4. Information on Other Related Parties
Name Relationship with the Company
Foshan Huaxin Import & Export Co., Ltd. Under the control of the same actual controller
Guangdong Guanhao High-tech Co., Ltd. Under the control of the same actual controller
Dragon State International Limited Under the control of the same actual controller
Yueyang Forest & Paper Co., Ltd. Under the control of the same actual controller
Yueyang Antai industrial Co., Ltd Under the control of the same actual controller
Zhejiang Guanhao Advanced Materials Co., Ltd. Under the control of the same actual controller
Guangdong Guanhao High-tech Industrial Co., Ltd. Under the control of the same actual controller
Dragon State Investment Development Co., Ltd. Under the control of the same actual controller
Zhanjiang Guanhao Paper Co., Ltd. Under the control of the same actual controller
Tianjin CMST Chuangshi Logistics Co., Ltd. Under the control of the same actual controller
Other notes
5. List of Related-party Transactions
(1) Information on Acquisition of Goods and Reception of Labor Service
Information on acquisition of goods and reception of labor service
Unit: RMB
Related party Content Reporting Period The approval trade Whether exceed trade Same period of last
166
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
credit credit or not year
China Paper Purchase of raw
4,378,629.35 218,000,000.00 No 126,507,408.64
Corporation material
Yueyang Forest & Purchase of raw
6,584,644.32 26,000,000.00 No 177,773.88
Paper Co., Ltd. material
Zhejiang Guanhao
Purchase of raw
Advanced Materials 236,880.08 Yes 177,467.34
material
Co., Ltd.
Tianjin CMST
Providing logistics
Chuangshi Logistics 24,647,532.18 50,000,000.00 No 25,831,228.51
service
Co., Ltd.
Total 35,847,685.93 294,000,000.00 152,693,878.37
Information of sales of goods and provision of labor service
Unit: RMB
Related party Content Reporting Period Same period of last year
Zhuhai Guanhao Barcode
Sales of products 111,910.30
Technology Co., Ltd.
Yueyang Forest & Paper Co.,
Sales of products 5,286,421.67 9,773,533.31
Ltd.
Guangdong Guanhao High-tech
Sales of products 3,047,497.36 3,913,339.14
Co., Ltd.
Total 8,445,829.33 13,686,872.45
Information of sales/purchase of goods and provision/reception of labor service
(2) Information on Related-party Trusteeship/Contract
Lists of trusteeship/contract:
Unit: RMB
Name of the Name of the Income
entruster/contract entrustee/ Type Start date Due date Pricing basis recognized in this
ee contractor Reporting Period
Notes:
Lists of entrust/contractee
Unit: RMB
Name of the Name of the Charge
entruster/contract entrustee/ Type Start date Due date Pricing basis recognized in this
ee contractor Reporting Period
Notes
167
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
(3) Information on Related-party Lease
The Company was lessor:
Unit: RMB
The lease income confirmed in The lease income confirmed in
Name of lessee Category of leased assets
the Reporting Period the same period of last year
The Company was lessee:
Unit: RMB
The lease fee confirmed in the The lease fee confirmed in the
Name of lessor Category of leased assets
Reporting Period same period of last year
Notes
(4) Information on Related-party Guarantee
The Company was guarantor
Unit: RMB
Execution accomplished
Secured party Guarantee amount Start date End date
or not
The Company was secured party
Unit: RMB
Execution accomplished
Guarantor Guarantee amount Start date End date
or not
Notes
(5) Information on Inter-bank Lending of Capital of Related Parties
Unit: RMB
Related party Amount Start date End date Note
Borrowing
China Chengtong
200,000,000.00 15 October 2019 13 March 2020
Finance Corporation Ltd.
Lending
(6) Information on Assets Transfer and Debt Restructuring by Related Party
Unit: RMB
Related party Content Reporting period Same period of last year
168
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
(7) Information on Remuneration for Key Management Personnel
Unit: RMB
Item Reporting period Same period of last year
(8) Other Related-party Transactions
6. Accounts Receivable and Payable of Related Party
(1) Accounts Receivable
Unit: RMB
Ending balance Beginning balance
Item Related party
Carrying amount Bad debt provision Carrying amount Bad debt provision
Foshan Huaxin
Accounts receivable Import & Export 549,882.60 549,882.60 549,882.60 549,882.60
Co., Ltd.
Guangdong Guanhao
Accounts receivable 1,763,056.03 2,427.75 2,708,860.03 2,427.75
High-tech Co., Ltd.
Yueyang Forest &
Accounts receivable 1,191,761.78 3,018,105.34
Paper Co., Ltd.
China Paper
Accounts receivable 3,824,037.81 191,201.89 3,824,037.81 191,201.89
Corporation
Yueyang Antai
Accounts receivable 5,302.10 5,302.10 5,302.10 5,302.10
Industrial Co., Ltd
Zhanjiang Guanhao
Accounts receivable 75,977.76 416.64
Paper Co., Ltd.
Zhuhai Guanhao
Accounts receivable Barcode Technology 126,458.64
Co., Ltd.
Subtotal 7,460,498.96 748,814.34 10,182,165.64 749,230.98
China Paper
Prepayments 24,037.26 2,861,546.97
Corporation
Subtotal 24,037.26 2,861,546.97
Guangdong
Other accounts
Chengtong Logistics 515,666.66 51,519.74 515,666.66 51,519.74
receivable
Co., Ltd.
Other accounts Yueyang Forest &
37,934.00 2,381.49 63,297.98 2,381.49
receivable Paper Co., Ltd.
169
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Tianjin CMST
Other accounts
Chuangshi Logistics 69,579.49
receivable
Co., Ltd.
Subtotal 623,180.15 53,901.23 578,964.64 53,901.23
(2) Accounts Payable
Unit: RMB
Item Related party Ending carrying amount Beginning carrying amount
Guangdong Chengtong
Accounts payable 656,380.63 611,068.48
Logistics Co., Ltd.
Accounts payable China Paper Corporation 2,308,149.01 280,461.45
Zhejiang Guanhao Advanced
Accounts payable 99,011.04 26,491.26
Materials Co., Ltd.
Tianjin CMST Chuangshi
Accounts payable 19,161,520.70 19,714,358.38
Logistics Co., Ltd.
Yueyang Forest & Paper Co.,
Accounts payable 208,180.00
Ltd.
Subtotal 22,225,061.38 20,840,559.57
Other payables China Paper Corporation 100,000,000.00
Foshan Huaxin Development
Other accounts payable 665,332.50 13,155,712.50
Co., Ltd.
Guangdong Chengtong
Other accounts payable 170,384.98 170,384.98
Logistics Co., Ltd.
Tianjin CMST Chuangshi
Other accounts payable 4,900,000.00 2,100,000.00
Logistics Co., Ltd.
Foshan Huaxin Import &
Other accounts payable 545,090.67
Export Co., Ltd.
Subtotal 106,280,808.15 15,426,097.48
7. Commitments of Related Party
8. Other
XIII. Stock Payment
1. The Overall Situation of Stock Payment
□ Applicable √ Not applicable
170
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
2. The Stock Payment Settled in Equity
□ Applicable √ Not applicable
3. The Stock Payment Settled in Cash
□ Applicable √ Not applicable
4. Modification and Termination of the Stock Payment
5. Other
XIV. Commitments and Contingency
1. Significant Commitments
Significant Contingency on Balance Sheet Date
As of 30 June 2020, there was no significant commitment for the Company to disclose.
2. Contingency
(1) Significant Contingency on Balance Sheet Date
As of 30 June 2020, there was no significant contingency for the Company to disclose.
(2) In Despite of no Significant Contingency to Disclose, the Company Shall Also Make Relevant
Statements
There was no significant contingency in the Company.
3. Other
XV. Events after Balance Sheet Date
1. Significant Non-adjusted Events
Unit: RMB
Influence number to the
Reason of inability to estimate
Item Content financial position and operating
influence number
results
171
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
2. Profit Distribution
Unit: RMB
3. Sales Return
4. Notes to Other Events after Balance Sheet Date
XVI. Other Significant Events
1. The Accounting Errors Correction in Previous Period
(1) Retrospective Restatement
Unit: RMB
Name of the influenced report
Content Processing program Accumulative impact
items during comparison period
(2) Prospective Application
Reason for adopting prospective
Content Processing program
application
2. Debt Restructuring
3. Assets Replacement
(1) Non-monetary Assets Exchange
(2) Other Assets Replacement
4. Pension Plan
Approved in the 9th Meeting of the 6th of Board of Directors in 2016, the Company could participate in the
corporate pension plan of China Chengtong Holdings Co., Ltd., and formulate its own pension plan
implementation rules under the framework of China Chengtong Holdings Co., Ltd. in line with China National
Paper Industry Investment Corp. Pension Plan Implementation Rules and the actual situation. Annuity payment is
divided into enterprise contribution and individual contribution. The total annual contribution of the enterprise is
5% of the total salary of the previous year, the individual contribution of the employee is 25% of the contribution
of the enterprise, and the employee who is in service before 1 January 2017 of the Company can volunteer to
participation in the annuity plan.
172
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
5. Discontinued Operations
Unit: RMB
Profit from
discontinued
operations
Income tax
Item Income Expense Total profit Net profit attributable to
expense
owners of the
Company as the
parent
Other notes
6. Segment Information
(1) Determination Basis and Accounting Policies of Reportable Segment
In accordance with the internal organization structure, management requirements and internal report system, the
Company identified the reportable segments based on the product segment and assessed the operational
performance of ivory business, printing business and latex business. The assets and liabilities sharing with other
segments shall be proportionally distributed among segments by scales.
(2) The Financial Information of Reportable Segment
Unit: RMB
Item Chemical industry Offset among segments Total
Main business revenue 207,482,570.21 -55,638,986.58 1,829,581,089.37
(3) If there Was no Reportable Segment, or the Total Amount of Assets and Liabilities of Each Reportable
Segment Could not Be Reported, Relevant Reasons Shall Be Clearly Stated
(4) Other Notes
7. Other Significant Transactions and Events with Influence on Investors’ Decision-making
8. Other
XVII. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable
(1) Accounts Receivable Disclosed by Category
Unit: RMB
173
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Ending balance Beginning balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Category Withdra Withdraw
Carrying Carrying
Proportio wal Proportio al
Amount Amount value Amount Amount value
n proportio n proportio
n n
Of which:
Accounts receivable
for which bad debt
750.37 100.00% 750.37
provision accrued by
group
Of which:
Total 750.37 100.00% 750.37
Accounts receivable for which bad debt provision accrued separately
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion Reason for withdrawal
Accounts receivable for which bad debt provision accrued by group: RMB0
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion
Aging group 750.37
Total 750.37 --
Notes of the basis of recognizing the group:
Accounts receivable for which bad debt provision accrued by group:
Unit: RMB
Ending balance
Name
Carrying amount Bad debt provision Withdrawal proportion
Notes of the basis of recognizing the group:
Please refer to the relevant information of disclosure of bad debt provision of other accounts receivable if adopting the general mode
of expected credit loss to withdraw bad debt provision of accounts receivable.
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Ending balance
Within 1 year (including 1 year) 750.37
Within 3 months 750.37
174
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Total 750.37
(2) Bad Debt Provision Withdrawal, Reversed or Recovered in the Reporting Period
Information of withdrawal of bad debt provision:
Unit: RMB
Changes in the Reporting Period
Beginning
Category Reversal or Ending balance
balance Withdrawal Write-off Other
recovery
Significant amount of reversed or recovered bad debt provision:
Unit: RMB
Name of the entity Reversed or collected amount Method
(3) Particulars of the Actual Verification of Accounts Receivable during the Reporting Period
Unit: RMB
Item Amount
Of which the verification of significant accounts receivable:
Unit: RMB
Whether occurred
because of
Name of the entity Nature Amount Reason Procedure
related-party
transactions
Notes to the verification of accounts receivable:
(4) Top 5 of the Ending Balance of Accounts Receivable Collected according to the Arrears Party
Unit: RMB
Ending balance of accounts Proportion to total ending Ending balance of bad debt
Name of the entity
receivable balance of accounts receivable provision
Dongguan Qiwen Paper Co.,
750.17 99.97%
Ltd.
Shenzhen Huasong Paper Co.,
0.20 0.03%
Ltd.
Total 750.37 100.00%
175
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
(5) Derecognition of Accounts Receivable due to the Transfer of Financial Assets
(6) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of
Accounts Receivable
Other notes:
2. Other Receivables
Unit: RMB
Item Ending balance Beginning balance
Interest receivable 584,375.00
Dividends receivable 28,000,000.00 28,000,000.00
Other receivables 1,277,490.51 25,371,168.86
Total 29,861,865.51 53,371,168.86
(1) Interest Receivable
1) Category of Interest Receivable
Unit: RMB
Item Ending balance Beginning balance
Fixed time deposit 584,375.00
Total 584,375.00
2) Significant Overdue Interest
Whether occurred
Entity Ending balance Overdue time Overdue reason impairment and its
judgment basis
Other notes:
3) Information of Withdrawal of Bad Debt Provision
□ Applicable √ Not applicable
(2) Dividends Receivable
1) Category of Dividends Receivable
Unit: RMB
176
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Item (or investees) Ending balance Beginning balance
Dividends receivable 28,000,000.00 28,000,000.00
Total 28,000,000.00 28,000,000.00
2) Significant Dividends Receivable Aged over One Year
Unit: RMB
Whether occurred
Item (or investees) Ending balance Aging Reason impairment and its
judgment basis
3) Information of Withdrawal of Bad Debt Provision
□ Applicable √ Not applicable
Other notes:
(3) Other Receivables
1) Other Receivables Disclosed by Accounts Nature
Unit: RMB
Nature Ending carrying amount Beginning carrying amount
Accounts of related party within the scope
1,130,589.96 25,301,487.37
of combination
Petty cash 111,245.55
Other intercourse funds 35,655.00 72,062.98
Total 1,277,490.51 25,373,550.35
2) Information of Withdrawal of Bad Debt Provision
Unit: RMB
First stage Second stage Third stage
Expected loss in the Expected loss in the
Bad debt provision Expected credit loss Total
duration (credit impairment duration (credit impairment
of the next 12 months
not occurred) occurred)
Balance of 1 January
2,381.49 2,381.49
2020
Balance of 1 January
2020 in the Current —— —— —— ——
Period
177
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Reversal of the Current
2,381.49 2,381.49
Period
Balance of 30 June 2020 0.00 0.00
Changes of carrying amount with significant amount changed of loss provision in the current period
□ Applicable √ Not applicable
Disclosure by aging
Unit: RMB
Aging Ending balance
Within 1 year (including 1 year) 1,277,490.51
Within 3 months 1,277,490.51
Total 1,277,490.51
3) Bad Debt Provision Withdrawal, Reversed or Recovered in the Reporting Period
Information of Withdrawal of Bad Debt Provision
Unit: RMB
Changes in the Reporting Period
Beginning
Category Reversal or Ending balance
balance Withdrawal Write-off Other
recovery
Bad debt
provision of other 2,381.49 2,381.49 0.00
receivables
Total 2,381.49 2,381.49
Of which bad debt provision recovered or reversed with significant amount during the Reporting Period:
Unit: RMB
Name of the entity Reversed or collected amount Method
4) Particulars of the Actual Verification of Other Receivables during the Reporting Period
Unit: RMB
Item Amount
Of which the verification of significant other receivables:
Unit: RMB
Whether occurred
because of
Name of the entity Nature Amount Reason Procedure
related-party
transactions
Notes to the verification of other receivables:
178
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
5) Top 5 of the Ending Balance of Other Receivables Collected according to the Arrears Party
Unit: RMB
Proportion to ending
Ending balance of
Name of the entity Nature Ending balance Aging balance of total other
bad debt provision
receivables%
Huaxin Color Printing Interests 1,130,589.96 Within 1 year 88.50%
Petty cash Petty cash 111,245.55 Within 1 year 8.71%
Guangdong Youde
Tendering Purchase Deposit 20,000.00 Within 1 year 1.57%
Co. , Ltd.
Deductible housing Deductible housing
13,655.00 Within 1 year 1.07%
fund fund
The People’s Printing
Plant of Guangzhou Deposit 2,000.00 Within 1 year 0.16%
Co., Ltd.
Total -- 1,277,490.51 -- 100.00%
6) Accounts Receivable Involving Government Grants
Unit: RMB
Project of government Estimated recovering
Name of the entity Ending balance Ending aging
grants time, amount and basis
7) Derecognition of Other Receivables due to the Transfer of Financial Assets
8) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of
Other Receivables
Other notes:
3. Long-term Equity Investment
Unit: RMB
Ending balance Beginning balance
Item Depreciation Depreciation
Carrying amount Carrying value Carrying amount Carrying value
reserve reserve
Investment to
1,050,107,442.14 1,050,107,442.14 1,050,107,442.14 1,050,107,442.14
subsidiaries
Investment to
661,174,067.32 661,174,067.32 646,670,063.65 646,670,063.65
joint ventures and
179
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
associated
enterprises
Total 1,711,281,509.46 1,711,281,509.46 1,696,777,505.79 1,696,777,505.79
(1) Investment to Subsidiaries
Unit: RMB
Beginning Increase/decrease
Ending balance
balance Withdrawal of Ending balance
Investee Additional Reduced of depreciation
(carrying impairment Other (carrying value)
investment investment reserve
value) provision
Hongta 927,570,697.1
927,570,697.11
Renheng 1
Huaxin
(Foshan) Color 122,536,745.0
122,536,745.03
Printing Co., 3
Ltd.
1,050,107,442. 1,050,107,442.
Total
14 14
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
Increase/decrease
Ending
Gains and Adjustme
Beginnin Cash Withdraw Ending balance
Additiona losses nt of
g balance Reduced Changes bonus or al of balance of
Investee l recognize other
(carrying investmen of other profits impairme Other (carrying depreciati
investmen d under comprehe
value) t equity announce nt value) on
t the equity nsive
d to issue provision reserve
method income
I. Joint ventures
II. Associated enterprises
China
Chengton
646,670,0 14,504,00 661,174,0
g Finance
63.65 3.67 67.32
Corporati
on Ltd.
646,670,0 14,504,00 661,174,0
Subtotal
63.65 3.67 67.32
Total 646,670,0 14,504,00 661,174,0
180
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
63.65 3.67 67.32
(3) Other Notes
4. Operating Revenue and Cost of Sale
Unit: RMB
Reporting Period Same period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 15,327,349.86 15,122,657.95
Total 15,327,349.86 15,122,657.95
Relevant information of revenue:
Unit: RMB
Category of contracts Segment 1 Segment 2 Total
Type of products 15,327,349.86 15,327,349.86
Of which:
Other 15,327,349.86 15,327,349.86
Of which:
Of which:
Of which:
Of which:
Of which:
Of which:
Information related to performance obligations:
None
Information related to transaction value assigned to residual performance obligations:
The amount of revenue corresponding to performance obligations of contracts signed but not performed or not fully performed yet
was RMB0.00 at the period-end, among which RMB0.00 was expected to be recognized in the year, RMB0.00 in the year and
RMB0.00 in the year.
Other notes:
5. Investment Income
Unit: RMB
Item Reporting Period Same period of last year
Long-term equity investment income
14,504,003.67 16,714,852.01
accounted by equity method
Total 14,504,003.67 16,714,852.01
181
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
6. Other
XVIII. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
√ Applicable □ Not applicable
Unit: RMB
Item Amount Note
Gains/losses on the disposal of non-current
-69,442.59
assets
Government grants recognized in the current
period, except for those acquired in the
ordinary course of business or granted at 10,070,822.18
certain quotas or amounts according to the
government’s unified standards
Other non-operating income and expense
2,347,635.43
other than the above
Less: Income tax effects 393,751.73
Non-controlling interests effects 6,659,487.89
Total 5,295,775.40 --
Explain the reasons if the Company classifies an item as an non-recurring gain/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Non-recurring Gains and
Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item
□ Applicable √Not applicable
2. Return on Equity and Earnings Per Share
EPS (Yuan/share)
Profit as of Reporting Period Weighted average ROE (%)
EPS-basic EPS-diluted
Net profit attributable to ordinary
2.35% 0.0941 0.0941
shareholders of the Company
Net profit attributable to ordinary
shareholders of the Company after
2.09% 0.0836 0.0836
deduction of non-recurring profit or
loss
182
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
3. Differences between Accounting Data under Domestic and Overseas Accounting Standards
(1) Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under International
and Chinese Accounting Standards
□ Applicable √ Not applicable
(2) Differences of Net profit and Net assets Disclosed in Financial Reports Prepared under Overseas and
Chinese Accounting Standards
□ Applicable √ Not applicable
(3) Explain Reasons for the Differences between Accounting Data under Domestic and Overseas
Accounting Standards; for any Adjustment Made to the Difference Existing in the Data Audited by the
Foreign Auditing Agent, Such Foreign Auditing Agent’s Name Shall Be Clearly Stated
4. Other
183
Foshan Huaxin Packaging Co., Ltd. Interim Report 2020
Part XII Documents Available for Reference
1. The financial statements signed and stamped by the Company’s legal representative, General Manager and Chief Financial Officer.
2. The originals of all the Company’s announcements and documents disclosed to the public during the Reporting Period on the media
designated by the CSRC for information disclosure.
3. The 2020 Interim Report signed by the legal representative with the seal of the Company.
184
