山东晨鸣纸业集团股份有限公司
SHANDONG CHENMING PAPER HOLDINGS LIMITED*
(a joint stock company incorporated in the People’s Republic of China with limited liability)
Three Quarter Report 2011
§1 Important
1.1 The board of directors (the “Board”), the supervisory committee (the “Supervisory
Committee”) and the directors (the “Directors”), supervisors (the “Supervisors”) and
senior management (the “Senior Management”) of Shandong Chenming Paper
Holdings Limited (the “Company”, “us”, and “we”) hereby warrant that there are no
false representations, misleading statements or material omissions contained in this
report (the “Report”), and jointly and severally accept full responsibility for the
truthfulness, accuracy and completeness of its contents. This Report has been
prepared in both Chinese and English. For any discrepancies, the Chinese version
shall prevail.
1.2 None of the Directors, Supervisors and Senior Management is unable to warrant the
truthfulness, accuracy and completeness of the contents of this report or holds any
dissenting views.
1.3 This quarterly report was considered and approved by the eighth meeting of the
sixth session of the Board of the Company with all directors present by means of
communication.
1.4 The third quarter financial statements of the Company and its subsidiaries
(collectively referred to as the “Group”) prepared in accordance with Accounting
Standards for Business Enterprises issued by the Ministry of Finance of PRC have
not been audited.
1.5 Chen Hongguo, the person in charge of the Company, Wang Chunfang, the financial
controller of the Company, and Li Dong, head of accounting department (the person
in charge of accounting) hereby declare their assurance of the truthfulness and
completeness of the financial report contained in the quarterly report.
§2 Company Information
2.1 Major financial data and indicators
Unit: RMB
1
2011.9.30 2010.12.31 Change (%)
Total assets (RMB) 42,839,764,456.93 35,077,132,129.98 22.13%
Equity attributable to
shareholders of the Company 13,554,181,720.13 13,535,785,794.54 0.14%
(RMB)
Share capital (share) 2,062,045,941.00 2,062,045,941.00 0.00%
Net assets per share attributable
to shareholders of the Company 6.57 6.56 0.15%
(RMB/share)
Comparison with the Comparison with the
January - September
July - September 2011 corresponding period of corresponding period of
2011
last year (%) last year (%)
Total operating revenue
4,427,243,847.48 1.93% 13,344,699,202.62 6.59%
(RMB)
Net profit attributable to
shareholders of the 149,251,843.22 - 35.58% 632,801,534.62 - 24.63%
Company (RMB)
Net cash flows from
operating activities — — 688,041,679.45 - 44.84%
(RMB)
Net cash flows per share
from operating activities — — 0.33 - 45.00%
(RMB/share)
Basic earnings per share
0.08 - 33.33% 0.31 - 24.39%
(RMB/share)
Diluted earnings per
N/A N/A N/A N/A
share (RMB/share)
Weighted average return
1.11% -0.66% 4.53% -1.86%
on net assets (%)
Weighted average return
on net assets after
0.76% -0.86% 3.56% -2.42%
extraordinary gains or
losses (%)
2
Extraordinary gain or loss items
√ Applicable Not Applicable
Unit: RMB
Note (if
Extraordinary gain or loss items Amounts
applicable)
Gain or loss on disposal of non-current assets 1,082,564.38
Government grants recognised in profit or loss during the current
period, except for government grants closely related to the course
129,987,899.80
of ordinary operation of the Company that were given constantly
at a fixed standard amount or quantity as stipulated by the State
Gain or loss on debt restructuring -19,889,572.60
Other gain or loss items within the definition of extraordinary
13,309,163.37
gain or loss
Profit arising from investment costs for acquisition of a
subsidiary, an associate and a joint venture by the corporation
44,188,866.15
being less than its share of fair value of identifiable net assets of
the investee on acquisition
Other non-operating income and expenses other than the above
3,922,684.36
items
Effect of minority interests -9,374,132.08
Effect of income tax -14,139,197.89
Total 149,088,275.49 —
Note: Other gain or loss items within the definition of extraordinary gain or loss refer to the gain or
loss on disposal of subsidiaries.
3
2.2 Total number of shareholders and the shareholding of the top ten shareholders
of non-restricted shares as at the end of the reporting period
Unit: share
Total number of shareholders as at The total number of shareholders was
the end of the reporting period 168,448, of which 137,314 were holders of A
shares, 30,522 were holders of B shares and
612 were holders of H shares
Shareholding of the top ten shareholders of non-restricted tradable shares
Number of
non-restricted tradable
Name of shareholders (Full Name) shares held as at the Class
end of the reporting
period
Overseas listed
HKSCC NOMINEES LIMITED 389,641,000 foreign shares
(H Shares)
Domestic listed
PLATINUM ASIA FUND 43,480,377 foreign shares
(B Shares)
BBH BOS S/A FIDELITY FD - Domestic listed
CHINA FOCUS FD 25,319,602 foreign shares
(B Shares)
BILL & MELINDA GATES 24,036,202 RMB ordinary shares
FOUNDATION TRUST (A Shares)
HTHK-MANULIFE CHINA Domestic listed
VALUE FUND 22,892,182 foreign shares
(B Shares)
Domestic listed
MANULIFE GLOBAL FUND 20,324,321 foreign shares
(B Shares)
China Life Insurance Company RMB ordinary shares
Limtied-Dividend-Individual 18,819,737 (A Shares)
Dividend-005L-FH002 Shenzhen
VALUE PARTNERS CLASSIC Domestic listed
FUND 8,143,633 foreign shares
(B Shares)
DRAGON BILLION CHINA Domestic listed
MASTER FUND 7,078,618 foreign shares
(B Shares)
LSV EMERGING MARKETS Domestic listed
EQUITY FUND,L.P. 6,102,800 foreign shares
(B Shares)
4
§3 Material matters
3.1 Details of and reasons for significant changes in major accounting statement
items and financial indicators of the Company
√ Applicable Not Applicable
1. Analysis of the assets and liabilities of the Company
Unit: RMB
Item 30 September 2011 31 December 2010 Change (%) Reason for change
Other receivables 294,160,701.79 117,634,380.52 150.06% (1)
Inventory 5,305,879,711.46 3,047,078,215.01 74.13% (2)
Other current assets 1,503,751,621.26 658,572,125.34 128.34% (3)
Long-term equity
46,606,279.25 67,201,931.89 -30.65% (4)
investments
Construction in
11,482,374,854.56 7,871,512,563.84 45.87% (5)
progress
Short-term
7,396,818,293.32 3,594,157,220.47 105.80% (6)
borrowings
Bills payable 1,031,424,755.69 218,757,186.75 371.49% (7)
Accounts payable 4,548,937,740.17 2,708,064,676.44 67.98% (8)
Other payables 1,058,287,800.61 582,052,511.43 81.82% (9)
Other current
124,134,189.27 3,412,493,915.88 -96.36% (10)
liabilities
Deferred income tax
- 1,340,281.66 -100.00% (11)
liabilities
Explanation on the main reasons leading to the changes:
(1) Other receivables increased by 150.06% primarily due to the increase in guarantee
deposits for land amounting to RMB108 million by Wuhan Chenming Wan Xing Real
Estate Co., Ltd., a subsidiary of the Company.
(2) Inventory increased by 74.13% as compared to the beginning of the year primarily
due to changes in market conditions and stocks for commencement of operation of the
Company’s projects. Raw materials increased by RMB1.5 billion, and commodity stocks
increased by RMB 0.8 billion.
(3) Other current assets increased by 128.34% as compared to the beginning of the year
primarily due to an increase of the value-added tax to be deducted during the period.
5
(4) Long-term equity investments decreased by 30.65% primarily due to Shouguang
Liben Paper Making Co., Ltd., an associate, being incorporated into the scope of the
consolidation.
(5) Construction in progress increased by 45.87% as compared to the beginning of the
year primarily due to the investments made in the Zhanjiang pulp project, and the project
of copperplate paper of production capacity of 800,000 tonnes.
(6) Short-term borrowings increased by 105.8% primarily due to increase in short-term
borrowings for the repayment of expired short-term debentures in the current period.
(7) Bills payable increased by 371.49% as compared to the beginning of the year
primarily due to more bills made by the Company during the period.
(8) Accounts payable increased by 67.98% as compared to the beginning of the year
primarily due an increase in the purchase of raw materials and expansion of the
Company.
(9) Other payables increased by 81.82% primarily due to an increase in bank balances
with the holding company resulting from the raising of some project funds through the
holding company by the Company.
(10) Other current liabilities decreased by 96.36% as compared to the beginning of
the year primarily due to expiry the Company’s short-term debentures .
(11) Deferred income tax liabilities decreased by 100% as compared to the beginning of
the year primarily due to disposal of subsidiaries during the year with deferred income
tax liabilities incurred on acquisition of subsidiaries during prior years reversed.
2. Explanation on significant change of income statement compared with the
corresponding period of last year
Unit: RMB
Reason for
Item 30 September 2011 30 September 2010 Change (%)
change
Business taxes
and surcharges 53,921,873.74 15,563,122.29 246.47% (1)
Finance
expenses 256,102,491.65 188,855,201.11 35.61% (2)
Loss on
impairment of -53,783,332.39 49,427,434.69 -208.81% (3)
assets
6
Gain on change
3,715,429.62 8,488,094.03 -56.23% (4)
in fair value
Investment
8,722,923.82 -3,985,835.17 318.85% (5)
income
Non-operating
207,761,300.22 106,355,284.49 95.35% (6)
income
Non-operating
36,418,089.15 9,006,476.98 304.35% (7)
expenses
Total profit 767,630,385.29 1,153,135,395.89 -33.43% (8)
Income tax
129,064,975.60 204,613,818.00 -36.92% (8)
expenses
Net profit
attributable to
632,801,534.62 839,568,874.95 -24.63% (8)
equity holders
of the Company
Minority
5,763,875.07 108,952,702.94 -94.71% (8)
interests
Explanation on the main reasons leading to the changes:
(1) Business taxes and surcharges increased by 246.47% as compared to the
corresponding period of the prior year mainly due to the payment of the urban
maintenance and construction tax and education surcharges by foreign-invested
enterprises since December 2010.
(2) Finance expenses increased by 35.61% as compared to the corresponding period of
the prior year mainly due to an increase in lending interest rate and an increase of
loans.
(3) Loss on impairment of assets decreased by 208.81% as compared to the
corresponding period of the prior year mainly because the Company made greater
efforts to clear open account receivables outstanding for a long period and
eliminated bad debt provisions during the period.
(4) Gain on change in fair value decreased by 56.23% as compared to the corresponding
period of the prior year mainly due to change in fair value of timber assets.
(5) Investment income increased by 318.85% as compared to the corresponding period
of the prior year mainly due to investment income on disposal of subsidiaries,
namely Heze Chenming Panels Co., Ltd. and Shandong Lin Dun Wood Industry Co.,
Ltd., during the period.
(6) Non-operating income increased by 95.35% mainly due to an increase of
government grants received and an increase in non-operating income through
acquisition of the equity interests of Shouguang Liben Paper Making Co., Ltd., an
7
associate, at nil consideration during the period.
(7) Non-operating expenses increased by 304.35% as compared to the corresponding
period of the prior year mainly due to loss from credit assignment arising from
disposal of Heze Chenming Panels Co., Ltd., a subsidiary, during the period.
(8) Total profit, income tax, net profit attributable to the Company and minority
interests decreased as compared to the corresponding period of the prior year by
33.43%, 36.92%, 24.63% and 94.71% respectively mainly due to factors such as a
rise in the price of raw materials, with a decrease in the gross profit margin as
compared to the corresponding period of the prior year, and a decrease in minority
interests arising from acquisition of the minority interests of a subsidiary, namely
Yanbian Chenming Paper Co., Ltd.
3. Cash flows during the reporting period
The reporting The
corresponding
period Change
Item
period of last (%)
year
Net cash flows from operating activities 688,041,679.45 1,247,283,449.67 -44.84
Net cash flows from investing activities -3,371,371,938.68 -3,565,098,861.83 5.43
Net cash flows from financing activities 2,757,199,394.35 1,541,312,029.27 78.89
Explanation on the main reasons leading to the changes:
(1) Net cash flows from operating activities decreased by 44.84% as compared to the
corresponding period of the prior year primarily due to an increase in outstanding
bills during the period, and an increase in the cash payment for purchasing
commodities arising from an increase in the price of raw materials and expansion of
the Company.
(2) Net cash flows from investing activities increased by 5.43% as compared to the
corresponding period of the prior year primarily due to the changes in the
investments made in the Zhanjiang pulp project, the high-end culture paper project
of production capacity of 450,000 tonnes, the tissue paper project of Meilun Paper
of production capacity of 98,000 tonnes, the copperplate paper project of production
capacity of 800,000 tonnes and the white coated linerboard project of production
capacity of 600,000 tonnes.
(3) Net cash flows from financing activities increased by 78.89% as compared to the
corresponding period of the prior year primarily due to an increase of banking loans
made by the Company.
8
3.2 The progress of significant events and analysis of their impact and solutions
3.2.1 Non-standard opinion
Applicable √ Not Applicable
3.2.2 Provision of capital to the controlling shareholder or its related parties or
provision of guarantee in favour of any external party in violation of the
prescribed procedures by the Company
Applicable √ Not Applicable
3.2.3 Execution of material contracts in the ordinary course of business and
their performance
Applicable √ Not Applicable
3.2.4 Others
Applicable √ Not Applicable
3.3 Performance of undertakings by the Company, shareholders and beneficial
controllers
The following undertakings by the Company, and its related parties such as its directors,
supervisors and senior management, shareholders interested in 5% or more of the shares
of the Company and its beneficial controllers made in the reporting period or subsisting
to the reporting period
Applicable √ Not Applicable
3.4 Warning of cumulative net profit for the period between the beginning of the
year to end of next reporting period being projected to be losses or expected
material change as compared to the same period last year and its explanation
Applicable √ Not Applicable
3.5 Other significant events that require explanation
3.5.1 Securities investment
Applicable √ Not Applicable
3.5.2 Reception of research investigations, communications and interviews
during the reporting period
9
Main topics of
Place of Manner of Parties discussion and
Date of reception
reception reception accommodated information
provided
Matters including
recent development
of the industry and
Shouguang, Telephone development trend in
30 August 2011 Comaurum Capital
Shandong communication the future, production
and operation of the
Company, as well as
strategic development
Matters including
recent development
of the industry and
Shouguang, On-site research and development trend in
1 September 2011 Haitong Securities
Shandong investigation the future, production
and operation of the
Company, as well as
strategic development
Matters including
recent development
of the industry and
Shouguang, Telephone development trend in
14 September 2011 Fidelity Investments
Shandong communication the future, production
and operation of the
Company, as well as
strategic development
Matters including
recent development
of the industry and
Shouguang, On-site research and Fubon Securities, development trend in
21 September 2011
Shandong investigation 香港高觀基 the future, production
and operation of the
Company, as well as
strategic development
3.6 Investment in derivatives
□Applicable √Not Applicable
3.6.1 Positions in investment in derivatives as at the end of the reporting period
□Applicable √Not Applicable
§4 Appendices
4.1 Balance sheet
Prepared by: Shandong Chenming Paper Holdings Limited
10
As at 30 September 2011 Unit: RMB
Closing balance Opening balance
Items
Consolidated Parent company Consolidated Parent company
CURRENT ASSETS:
Monetary funds 2,118,585,548.54 522,602,208.97 1,951,854,940.72 704,109,173.25
Balances with clearing companies
Loans to banks and other financial
institutions
Held-for-trading financial assets
Bills receivable 3,002,711,188.46 1,065,748,317.64 2,762,389,909.89 1,527,349,378.06
Accounts receivable 2,328,088,982.42 776,602,318.93 2,122,578,824.27 1,621,939,553.18
Prepayments 849,904,848.20 830,204,603.10 924,354,545.55 919,638,465.71
Premium receivable
Receivables from reinsurers
Reinsurance contract reserves receivable
Interest receivable
Dividend receivable 16,530,024.40 25,500,000.00
Other receivables 294,160,701.79 5,340,911,879.34 117,634,380.52 4,773,074,610.91
Financial assets purchased under
agreements to resell
Inventory 5,305,879,711.46 1,111,407,894.34 3,047,078,215.01 798,447,611.57
Non-current assets due within one year
Entrusted loans due within one year 1,362,690,971.94 1,799,625,759.18
Other current assets 1,503,751,621.26 7,737,307.56 658,572,125.34
Total current assets 15,403,082,602.13 11,034,435,526.22 11,584,462,941.30 12,169,684,551.86
NON-CURRENT ASSETS:
Entrusted loans and advances to
customers
Available-for-sale financial assets
Entrusted loans 500,000,000.00 500,000,000.00
Held-to-maturity investments
Long-term receivables
Long-term equity investments 46,606,279.25 7,929,709,996.29 67,201,931.89 5,957,887,739.77
Investment properties 23,384,520.04 23,384,520.04 24,688,212.07 24,688,212.07
Fixed assets 13,090,846,859.38 5,288,576,999.38 12,882,358,381.56 5,162,505,904.23
Construction in progress 11,482,374,854.56 500,254,198.69 7,871,512,563.84 377,881,973.00
Construction materials 102,217,341.40 2,246,511.01 116,481,086.12 18,789,838.50
Disposal of fixed assets
Productive biological assets
Oil and gas assets
Consumable biological assets 913,181,844.67 726,742,568.44
Intangible assets 1,410,190,135.88 323,571,975.44 1,459,453,227.94 329,934,823.01
Development expenditure
Goodwill 20,283,787.17 20,283,787.17
Long-term prepaid expenses 191,929,045.65 176,436,950.42
Deferred income tax assets 155,667,186.80 41,715,935.99 147,510,479.23 60,305,230.74
Other non-current assets
Total non-current assets 27,436,681,854.80 14,609,460,136.84 23,492,669,188.68 12,431,993,721.32
TOTAL ASSETS 42,839,764,456.93 25,643,895,663.06 35,077,132,129.98 24,601,678,273.18
CURRENT LIABILITIES:
Short-term borrowings 7,396,818,293.32 3,724,402,574.92 3,594,157,220.47 2,177,183,475.78
11
Borrowings from the central bank
Customer bank deposits and due to banks
and other financial institutions
Placements from banks and other
financial institutions
Held-for-trading financial liabilities
Bills payable 1,031,424,755.69 871,365,868.11 218,757,186.75 124,145,654.66
Accounts payable 4,548,937,740.17 1,182,557,275.68 2,708,064,676.44 995,425,830.59
Advance receipts 328,274,008.20 253,063,610.68 410,243,554.75 284,808,123.90
Assets sold under agreements to
repurchase
Handling charges and commission
payable
Staff remuneration payables 148,131,811.87 88,546,285.00 169,426,660.41 106,040,498.15
Taxes payable 110,842,456.40 19,597,996.08 134,029,387.82 36,899,207.08
Interest payable
Dividend payable
Other payables 1,058,287,800.61 217,977,125.95 582,052,511.43 248,170,250.32
Due to reinsurers
Insurance contract reserves
Customer brokerage deposits
Securities underwriting brokerage
deposits
Non-current liabilities due within one 1,605,091,887.64 1,488,392,000.00 1,432,841,463.15 1,360,951,000.00
year
Other current liabilities 124,134,189.27 109,972,205.02 3,412,493,915.88 3,405,958,538.39
Total current liabilities 16,351,942,943.17 7,955,874,941.44 12,662,066,577.10 8,739,582,578.87
NON-CURRENT LIABILITIES:
Long-term borrowings 5,733,936,935.79 651,889,935.94 4,725,628,719.05 852,222,735.94
Bonds payable 2,464,645,357.64 1,982,663,053.79
Long-term payables
Special payables
Estimated liabilities
Deferred income tax liabilities 1,340,281.66
Other non-current liabilities 3,091,300,710.94 2,313,209,429.95 2,427,897,545.67 2,309,355,287.42
Total non-current liabilities 11,289,883,004.37 4,947,762,419.68 7,154,866,546.38 3,161,578,023.36
TOTAL LIABILITIES 27,641,825,947.54 12,903,637,361.12 19,816,933,123.48 11,901,160,602.23
OWNERS’ EQUITY (OR
SHAREHOLDERS’ EQUITY):
Paid-up capital(or share capital) 2,062,045,941.00 2,062,045,941.00 2,062,045,941.00 2,062,045,941.00
Capital reserves 6,098,201,035.99 6,184,215,988.77 6,093,493,004.71 6,184,215,988.77
Less: Treasury shares
Special reserves
Surplus reserves 1,046,510,680.99 1,034,321,099.08 1,046,510,680.99 1,034,321,099.08
General risk provisions
Retained profit 4,347,919,700.28 3,459,675,273.09 4,333,731,947.96 3,419,934,642.10
Foreign currency translation differences -495,638.13 4,219.88
Total equity attributable to equity holders 13,554,181,720.13 12,740,258,301.94 13,535,785,794.54 12,700,517,670.95
of the company
Minority interests 1,643,756,789.26 1,724,413,211.96
Total owners’ equity 15,197,938,509.39 12,740,258,301.94 15,260,199,006.50 12,700,517,670.95
TOTAL LIABILITIES AND OWNERS’ 42,839,764,456.93 25,643,895,663.06 35,077,132,129.98 24,601,678,273.18
EQUITY
12
4.2 Income statement for the reporting period
Prepared by: Shandong Chenming Paper Holdings Limited
July to September 2011 Unit: RMB
Amounts for the current period Amounts for the prior period
Items
Consolidated Parent company Consolidated Parent company
I. Total operating revenue 4,427,243,847.48 2,308,083,129.44 4,343,250,079.02 3,823,699,983.39
Including:Operating revenue 4,427,243,847.48 2,308,083,129.44 4,343,250,079.02 3,823,699,983.39
Interest income
Earned premium
Handling charges and commission
income
II. Total operating costs 4,304,054,582.51 2,181,884,929.86 4,056,636,234.66 3,563,528,799.15
Including:Operating costs 3,749,052,925.15 1,976,030,855.76 3,527,120,440.28 3,282,867,167.75
Interest expenses
Handling charges and commission
expenses
Surrenders
Net claims paid
Net change in insurance contract reserves
Policyholder dividend expenses
Expenses for reinsurance accepted
Business taxes and surcharges 21,808,604.16 10,393,419.11 5,165,394.55 489,447.02
Selling and distribution expenses 232,687,936.82 74,958,425.18 204,837,721.64 90,558,199.13
General and administrative expenses 230,352,669.46 99,158,139.57 227,766,185.51 111,421,335.35
Finance expenses 102,510,313.15 49,330,991.09 63,115,545.25 51,732,917.83
Loss on impairment of assets -32,357,866.23 -27,986,900.85 28,630,947.43 26,459,732.07
Add:Gain on change in fair value (“-” 0.00 0.00 130,000.00 11,230,000.00
denotes loss)
Investment income (“-” denotes loss) -830,738.16 62,017,948.38 -8,310,329.95 189,528,925.13
Including: Investment income from -989,797.08 -989,797.08 -8,410,715.79 -8,410,715.79
associates and joint ventures
Foreign exchange gains (“-” denotes
loss)
III. Operating profit (“-” denotes loss) 122,358,526.81 188,216,147.96 278,433,514.41 460,930,109.37
Add:Non-operating income 61,813,937.33 1,612,798.83 38,941,481.91 17,830,024.15
Less:Non-operating expenses 10,080,971.90 3,549,889.06 2,798,010.19 1,855,891.37
Including: Loss on disposal of 4,500,203.40 3,549,889.06 2,018,551.34 1,412,237.62
non-current assets
IV. Total profit (“-” denotes total loss) 174,091,492.24 186,279,057.73 314,576,986.13 476,904,242.15
Less:Income tax expenses 32,341,077.28 25,263,910.13 62,134,495.70 48,107,616.55
V. Net profit (“-” denotes net loss) 141,750,414.96 161,015,147.60 252,442,490.43 428,796,625.60
Net profit attributable to equity holders 149,251,843.22 161,015,147.60 231,699,904.71 428,796,625.60
of the Company
Minority interests -7,501,428.26 20,742,585.72
VI. Earnings per share:
(I) Basic earnings per share 0.08 0.08 0.12 0.21
(II) Diluted earnings per share N/A N/A N/A N/A
13
VII. Other comprehensive income -221,981.71 -22,991.41
VIII. Total comprehensive income 141,528,433.25 161,015,147.60 252,419,499.02 428,796,625.60
Total comprehensive income attributable 149,029,861.51 161,015,147.60 231,676,913.30 428,796,625.60
to equity holders of the Company
Total comprehensive income attributable -7,501,428.26 20,742,585.72
to minority interests
For the business combination under common control for the current period, the acquiree
realised net profit of RMB nil before the combination.
4.3 Income statement for the period from the beginning of the year to the end of
the reporting period
Prepared by: Shandong Chenming Paper Holdings Limited
January to September 2011 Unit: RMB
Amounts for the current period Amounts for the prior period
Items
Consolidated Parent company Consolidated Parent company
I. Total operating revenue 13,344,699,202.62 6,418,942,841.59 12,519,891,756.01 10,927,142,027.44
Including:Operating revenue 13,344,699,202.62 6,418,942,841.59 12,519,891,756.01 10,927,142,027.44
Interest income
Earned premium
Handling charges and commission
income
II. Total operating costs 12,760,850,381.84 5,955,481,527.63 11,468,607,426.49 10,169,276,727.38
Including:Operating costs 11,131,812,049.64 5,301,705,953.22 9,923,520,620.42 9,300,013,302.72
Interest expenses
Handling charges and commission
expenses
Surrenders
Net claims paid
Net change in insurance contract reserves
Policyholder dividend expenses
Expenses for reinsurance accepted
Business taxes and surcharges 53,921,873.74 24,305,510.12 15,563,122.29 2,235,915.36
Selling and distribution expenses 671,206,065.44 210,487,833.62 646,339,601.61 320,066,219.93
General and administrative expenses 701,591,233.76 310,690,627.65 644,901,446.37 321,848,082.91
Finance expenses 256,102,491.65 174,744,007.91 188,855,201.11 163,703,865.64
Loss on impairment of assets -53,783,332.39 -66,452,404.89 49,427,434.69 61,409,340.82
Add:Gain on change in fair value 3,715,429.62 8,488,094.03 15,100,000.00
(“-” denotes loss)
Investment income (“-” denotes loss) 8,722,923.82 202,425,925.53 -3,985,835.17 439,226,306.03
Including: Investment income from -4,745,298.47 -4,745,298.47 -4,086,221.01 -4,086,221.01
associates and joint ventures
Foreign exchange gains (“-” denotes
loss)
III. Operating profit (“-” denotes loss) 596,287,174.22 665,887,239.49 1,055,786,588.38 1,212,191,606.09
Add:Non-operating income 207,761,300.22 102,461,065.93 106,355,284.49 50,088,706.80
Less:Non-operating expenses 36,418,089.15 26,277,619.53 9,006,476.98 5,849,645.04
14
Including: Loss on disposal of 5,423,591.19 3,993,160.29 5,149,136.56 3,316,386.29
non-current assets
IV. Total profit (“-” denotes total loss) 767,630,385.29 742,070,685.89 1,153,135,395.89 1,256,430,667.85
Less:Income tax expenses 129,064,975.60 83,716,272.60 204,613,818.00 144,439,629.04
V. Net profit (“-” denotes net loss) 638,565,409.69 658,354,413.29 948,521,577.89 1,111,991,038.81
Net profit attributable to equity holders 632,801,534.62 658,354,413.29 839,568,874.95 1,111,991,038.81
of the Company
Minority interests 5,763,875.07 108,952,702.94
VI. Earnings per share:
(I) Basic earnings per share 0.31 0.32 0.41 0.54
(II) Diluted earnings per share N/A. N/A N/A. N/A
VII. Other comprehensive income -499,858.01 -147,058.73
VIII. Total comprehensive income 638,065,551.68 658,354,413.29 948,374,519.16 1,111,991,038.81
Total comprehensive income attributable 632,301,676.61 658,354,413.29 839,421,816.22 1,111,991,038.81
to equity holders of the Company
Total comprehensive income attributable 5,763,875.07 108,952,702.94
to minority interests
For the business combination under common control from the beginning of the year to
the end of the reporting period, the acquiree realised net profit of RMB nil before the
combination.
4.4 Cash flow statements for the period from the beginning of the year to the end of
the reporting period
Prepared by: Shandong Chenming Paper Holdings Limited
January to September 2011 Unit: RMB
Amounts for the current period Amounts for the prior period
Items
Consolidated Parent company Consolidated Parent company
I.Cash flows from operating activities:
Cash received from sales of goods and 13,633,847,368.78 7,484,468,241.21 11,145,975,371.06 8,767,983,457.44
rendering of services
Net increase in customer bank deposits
and due to banks and other financial
institutions
Net increase in borrowings from the
central bank
Net increase in placements from other
financial institutions
Cash received from premiums under
original insurance contracts
Net cash received from reinsurance
business
Net increase in deposits from
policyholders
Net increase from disposal of
held-for-trading financial assets
Cash received from interest, handling
15
charges and commissions
Net increase in placements from banks
and other financial institutions
Net capital increase of repurchase
business
Tax rebates received 20,277,735.18 28,905,078.65
Cash received relating to other operating 1,365,688,962.58 156,272,009.26 246,712,641.49 53,297,994.69
activities
Subtotal of cash inflows from operating 15,019,814,066.54 7,640,740,250.47 11,421,593,091.20 8,821,281,452.13
activities
Cash paid for goods and services 11,987,614,159.94 5,139,166,584.95 8,023,925,874.22 6,554,179,930.27
Net increase in loans and advances to
customers
Net increase in deposits with the central
bank and other financial institutions
Cash paid for claims under original
insurance contracts
Cash paid for interest, handling charges
and commission
Cash paid for policyholder dividend
Cash paid to and for employees 633,462,833.10 221,240,444.53 618,691,882.22 213,708,684.24
Payments of taxes and surcharges 1,076,812,938.70 498,987,569.27 1,014,459,093.46 600,782,601.18
Cash paid relating to other operating 633,882,455.35 -502,872,485.56 517,232,791.63 1,296,466,795.61
activities
Subtotal of cash outflows from operating 14,331,772,387.09 5,356,522,113.19 10,174,309,641.53 8,665,138,011.30
activities
Net cash flows from operating activities 688,041,679.45 2,284,218,137.28 1,247,283,449.67 156,143,440.83
II.Cash flows from investing activities:
Cash received from investments 381,522,705.39 1,020,000.00 352,020,000.00
Cash received from investment income 204,893,213.11 475,992,163.36
Net cash received from disposal of fixed 61,320,247.70 507,487.28 20,164,036.66 19,004,765.80
assets, intangible assets and other
long-term assets
Net cash received from disposal of 3,467,152.31
subsidiaries and other business units
Cash received relating to other investing 5,754,188.06 13,001,000.00
activities
Subtotal of cash inflows from investing 70,541,588.07 586,923,405.78 34,185,036.66 847,016,929.16
activities
Cash paid for purchase of fixed assets, 3,385,207,926.75 309,575,411.78 3,598,273,898.49 111,217,430.65
intangible assets and other long-term
assets
Cash paid on investments 56,705,600.00 1,976,239,025.00 1,010,000.00 2,251,000,000.00
Net increase in pledged loans
Net cash paid for acquisition of
subsidiaries and other business units
Cash paid relating to other investing
activities
Subtotal of cash outflows from investing 3,441,913,526.75 2,285,814,436.78 3,599,283,898.49 2,362,217,430.65
activities
Net cash flows from investing activities -3,371,371,938.68 -1,698,891,031.00 -3,565,098,861.83 -1,515,200,501.49
III.Cash flows from financing
activities:
Cash received from capital contribution
16
Including:Cash received from
minority interest contribution to
subsidiaries
Cash received from borrowings 11,456,606,231.94 5,615,596,650.32 3,428,816,218.11 1,718,533,919.48
Cash received from bond issue
Cash received relating to other financing 2,473,756,944.44 1,982,006,944.44 4,796,892,009.11 4,738,673,645.04
activities
Subtotal of cash inflows from financing 13,930,363,176.38 7,597,603,594.76 8,225,708,227.22 6,457,207,564.52
activities
Cash repayments of amounts borrowed 6,617,449,196.47 4,138,935,958.83 5,805,887,581.27 5,107,736,193.29
Cash paid for dividend and profit 1,036,114,508.24 817,822,372.38 878,508,616.68 721,925,905.78
distribution or interest payment
Including:Dividend and profit paid 28,219,978.44 89,984,050.90
to minority interests by subsidiaries
Cash paid relating to other financing 3,519,600,077.32 3,506,636,496.04
activities
Subtotal of cash outflows from financing 11,173,163,782.03 8,463,394,827.25 6,684,396,197.95 5,829,662,099.07
activities
Net cash flows from financing activities 2,757,199,394.35 -865,791,232.49 1,541,312,029.27 627,545,465.45
IV.Effect of foreign exchange rate -21,288,604.62 -2,229,334.11 -11,435,599.15 -11,265,864.81
changes on cash and cash equivalents
V.Net increase in cash and cash 52,580,530.50 -282,693,460.32 -787,938,982.04 -742,777,460.02
equivalents
Add: Balance of cash and cash 1,855,235,979.80 662,209,607.29 2,367,334,202.50 1,586,045,998.83
equivalents as at the beginning of the
period
VI.Balance of cash and cash 1,907,816,510.30 379,516,146.97 1,579,395,220.46 843,268,538.81
equivalents as at the end of the period
17
4.5 Audit report
Audit opinion: unaudited
By Order of the Board
CHEN HONGGUO
Chairman
Shandong, the PRC, 27 October 2011
As at the date of this announcement, the executive Directors are Mr. Chen Hongguo, Mr. Yin Tongyuan,
Mr. Li Feng, Mr. Geng Guanglin, Mr. Tan Daocheng, Mr. Hou Huancai and Mr. Zhou Shaohua, the
non-executive Directors are Mr. Cui Youping, Ms. Wang Fengrong and Mr. Wang Xiaoqun and the
independent non-executive Directors are Mr. Wang Aiguo, Mr. Zhang Zhiyuan, Mr. Wang Xiangfei, Ms.
Wang Yumei and Ms. Zhang Hong.
* For identification purposes only
18
