2012 Third Quarter Report
I. Important
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.
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.
3、 This quarterly report was considered and approved by the fifteenth meeting of the sixth session
of the Board of the Company with all Directors present by means of communication.
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.
5、 Chen Hongguo, the person in charge of the Company, Wang Chunfang, the financial controller
of the Company, and Liu Jun, 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.
II. Company overview
(I) Major accounting data and financial indicators
Retrospective adjustments to the financial statements of prior reporting periods
□ Yes √ No □ Not applicable
Unit: RMB
Increase/decrease as at the end of the
2012.9.30 2011.12.31 reporting period compared to the end of the
prior year (%)
Total assets (RMB) 47,184,097,928.45 45,630,828,967.03 3.40
1
Equity attributable to shareholders of the
13,352,474,002.67 13,528,622,319.91 -1.30
Company (RMB)
Share capital (shares) 2,062,045,941.00 2,062,045,941.00 0
Net assets per share attributable to
shareholders of the Company 6.48 6.56 -1.30
(RMB/share)
Increase/decrease
Increase/decrease
compared to the
July — compared to the January —
corresponding
September 2012 corresponding period September 2012
period of the prior
of the prior year (%)
year (%)
Total revenue (RMB) 5,001,125,623.43 12.96 14,965,577,158.47 12.15
Net profit attributable to shareholders of
38,909,228.41 -73.93 133,154,191.26 -78.96
the Company (RMB)
Net cash flows from operating activities
— — 337,787,337.65 -50.91
(RMB)
Net cash flows per share from operating
— — 0.16 -50.91
activities (RMB/share)
Basic earnings per share (RMB/share) 0.02 -73.93 0.06 -78.96
Diluted earnings per share (RMB/share) 0.02 -73.93 0.06 -78.96
Weighted average return on net assets (%) 0.29% -0.82 0.99% -3.54
Weighted average return on net assets
after deducting extraordinary gains or -0.40% -1.16 -1.16% -4.72
losses (%)
Less the amounts for extraordinary gain or loss items
√ Applicable □ Not applicable
Unit: RMB
Amounts from the
beginning of the year to
Item Note
the end of the reporting
period (RMB)
Gain or loss on disposal of non-current assets 4,276,203.08
Tax rebate or tax concessions with unauthorised approval or
without official approval documents
Government grants recognised in profit or loss for the current
period (except for government grants closely related to the
215,857,588.70
corporate business that were given under at a fixed standard
amount or quantity as stipulated by the State)
Fees charged to profit or loss for the current period received from
non-financial institutions for utilisation of funds
Gain arising from investment costs for acquisition of subsidiaries,
2
Amounts from the
beginning of the year to
Item Note
the end of the reporting
period (RMB)
associates and joint-ventures by the corporation being less than
its share of fair value of identifiable net assets of the investees on
acquisition
Gain or loss on non-monetary asset swap
Gain or loss on assets invested or managed under entrustment
Impairment provisions for various assets due to force majeure such
as natural disasters
Gain or loss on debt restructuring 7,653,776.59
Corporate restructuring fees such as expenses for severance
payments for staff and consolidation fees
Profit or loss in excess of the fair value portion arising from
transactions with obvious unfair transaction prices
Net gain or loss for the period arising from subsidiaries formed
from business merger under common control from the beginning
of the year to the merger date
Gain or loss arising from contingent items unrelated to the ordinary
course of business of the Company
Except for effective hedging business conducted in the ordinary
course of business of the Company, gain or loss arising from the
change in fair value of financial assets held for trading and
financial liabilities held for trading, as well as investment gains
from disposal of financial assets held for trading and financial
liabilities held for trading and available-for-sale financial assets
Reversal of impairment provision on receivables tested for
impairment on individual basis
Gain or loss on external entrusted loans
Gain or loss from the change in fair value of investment property by
adopting fair value method for subsequent measurements
Effect on profit or loss for the current period from one-off
adjustments to profit or loss for the current period made pursuant
to taxation and accounting laws and regulations, etc.
Entrustment fees received from entrusted business
Non-operating income and expenses other than the above items 88,770,404.99
Gain or loss from the
Other gain or loss items within the definition of extraordinary gain change in fair value of
15,457,198.72
or loss timber assets measured
at fair value
Effect of minority shareholders interests -33,817,343.75
Effect of income tax -8,310,194.92
Total 289,887,633.41 —
3
Note on “other gain or loss items within the definition of extraordinary gain or loss” and
extraordinary gain or loss items defined as recurring income or loss items by the Company based on
the nature and features of its ordinary course of business
Item Amount (RMB) Note
Gain or loss from the change in fair value of Gain or loss from the change in fair value
15,457,198.72
timber assets measured at fair value of timber assets measured at fair value
(II) Total number of shareholders and the shareholding of the top ten shareholders as at the
end of the reporting period
The total number of shareholders was 159,715, of which 126,979 were
Total number of shareholders as at the end holders of A shares, 32,144 were holders of B shares and 592 were holders
of the reporting period of H shares.
Shareholding of the top ten shareholders of non-restricted tradable shares
Number of non-restricted
Class and number of shares
Name of shareholders tradable shares held as at the
end of the reporting period Class Number
Overseas listed foreign
HKSCC NOMINEES LIMITED 389,724,500 389,724,500
shares
Domestic listed foreign
PLATINUM ASIA FUND 43,480,377 43,480,377
shares
TAIFOOK SECURITIES COMPANY Domestic listed foreign
35,436,403 35,436,403
LIMITED —ACCOUNT CLIENT shares
BILL & MELINDA GATES
23,701,666 RMB ordinary shares 23,701,666
FOUNDATION TRUST
CHINA LIFE INSURANCE COMPANY
LIMITED - DIVIDEND —
17,819,798 RMB ordinary shares 17,819,798
INDIVIDUAL DIVIDEND -
005L-FH002 SHENZHEN
RMB ordinary shares 2,091,600
Jin Xing 7,969,000
Domestic listed foreign
5,877,400
shares
LSV EMERGING MARKETS EQUITY Domestic listed foreign
6,102,800 6,102,800
FUND,L.P. shares
VICTORIAN FUNDS MANAGEMENT
Domestic listed foreign
CORPORATION ATF VFM EMG 6,086,106 6,086,106
shares
MKTS TRT
MORGAN STANLEY & CO.
5,459,125 RMB ordinary shares 5,459,125
INTERNATIONAL PLC
4
BEIJING XINDA YONGCHANG
INVESTMENT CONSULTANT CO., 4,682,000 RMB ordinary shares 4,682,000
LTD.
Note on shareholders Nil
III. Material matters
(I) 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 Company’s assets and liabilities
Unit: RMB
Reason for
Item 2012.9.30 2011.12.31 Change (%)
the change
Bills receivable 3,235,491,016.03 2,444,508,997.74 32.36 (1)
Prepayments 1,140,905,133.75 764,880,237.90 49.16 (2)
Other receivables 181,683,839.58 325,550,913.72 -44.19 (3)
Long-term equity investments 351,462,993.11 77,434,005.49 353.89 (4)
Construction in progress 4,843,165,411.42 2,618,039,624.85 84.99 (5)
Deferred income tax assets 277,987,949.14 174,026,534.27 59.74 (6)
Other non-current assets 0 10,000,000.00 -100.00 (7)
Bills payable 1,614,095,834.78 615,327,402.85 162.31 (8)
Advance receipts 441,026,277.53 231,428,013.45 90.57 (9)
Staff remuneration payables 227,820,006.70 147,063,891.65 54.91 (10)
Non-current liabilities due within one year 1,678,152,501.36 1,203,616,858.22 39.43 (11)
Special items payables 1,266,147,401.51 660,000,000.00 91.84 (12)
Other non-current liabilities 3,539,077,022.47 2,444,093,897.14 44.80 (13)
Explanation of the reasons leading to the major changes:
(1) Bills receivable increased by 32.36% mainly due to an increase in bank acceptance bills received for
payment for goods during the reporting period.
(2) Prepayments increased by 49.16% mainly due to an increase in the advance payment for materials made by
the Company.
(3) Other receivables decreased by 44.19% mainly due to receipt of proceeds from disposal of Chibi Chenming
and Xianning Chenming in the year 2011 in accordance with the provisions of the contracts by the Company.
5
(4) Long-term equity investments increased by 353.89% mainly due to the external investment made by
Shanghai Runchen Equity Investment Fund Co., Ltd., a subsidiary of the Company.
(5) Construction in progress increased by 84.99% mainly due to the investments in the white coated linerboard
project and the jilin relocation project by the Company.
(6) Deferred income tax assets increased by 59.74% mainly due to a market downturn at the macroeconomic
level and in the paper making industry, from which some companies generated deferred income tax assets
that could be used to offset losses.
(7) Other non-current assets decreased by 100% mainly due to the change of registration of the investment in
Weifeng Xinye Capital Investment Co., Ltd. by the Company.
(8) Bills payable increased by 162.31% mainly due to an increase in bank acceptance bills issued by the
Company for payment for goods.
(9) Advance receipts increased by 90.57% mainly due to an increase in advance receipts for goods by the
Company during the reporting period.
(10) Staff remuneration payables increased by 54.91% mainly due to the expansion of the Company’s scale
resulting in an increase in unpaid staff remuneration payables.
(11) Non-current liabilities due within one year increased by 39.43% mainly due to an increase in long-term
borrowings due within one year by the Company.
(12) Special payables increased by 91.84% mainly due to the removal compensation of RMB660 million received
by Jilin Chenming Paper Co., Ltd., a subsidiary of the Company.
(13) Other non-current liabilities increased by 44.8% mainly due to the issue of medium-term notes of RMB1,100
million during the reporting period.
2. Analysis and explanation of the major changes in the profit and loss indicators during the
reporting period as compared to the corresponding period of the prior year
Unit: RMB
Reason for
Item 2012.9.30 2011.9.30 Change (%)
the change
Finance expenses 785,696,377.13 256,102,491.65 206.79 (1)
Loss on impairment of assets 12,594,933.70 -53,783,332.39 123.42 (2)
Gain on change in fair value 15,457,198.72 3,715,429.62 316.03 (3)
Investment income -5,971,012.39 8,722,923.82 -168.45 (4)
Non-operating income 331,966,255.18 207,761,300.22 59.78 (5)
Non-operating expenses 10,063,384.59 36,418,089.15 -72.37 (6)
Total profit 37,326,123.85 767,630,385.29 -95.14 (7)
6
Income tax 329,703.66 129,064,975.60 -99.74 (8)
Net profit attributable to shareholders of the
133,154,191.26 632,801,534.62 -78.96 (9)
Company
Minority shareholders’ interests -96,157,771.07 5,763,875.07 -1768.28 (10)
Explanation of the reasons leading to the major changes:
(1) Finance expenses increased by 206.79% as compared to the corresponding period of the prior year mainly due
to an increase in the capitalised interest of the original loan being expensed and an increase in loans upon
completion of the project.
(2) Loss on impairment of assets increased by 123.42% as compared to the corresponding period of the prior year
mainly due to an increase in the bad debt provisions during the reporting period as compared to the
corresponding period of the prior year as a result of a change in the accounts receivable.
(3) Gain on change in fair value increased by 316.03% as compared to the corresponding period of the prior year
mainly due to a change in the fair value of timber assets.
(4) Investment income decreased by 168.45% as compared to the corresponding period of the prior year mainly
due to the income of RMB13.31 million arising from disposal of Heze Chenming Panels and Lindun Forestry
for the prior period.
(5) Non-operating income increased by 59.78% as compared to the corresponding period of the prior year mainly
due to receipt of more government grants during the reporting period.
(6) Non-operating expenses decreased by 72.37% as compared to the corresponding period of the prior year
mainly due to a debt restructuring loss of RMB19.89 million on disposal of Heze Chenming Panels.
(7) Total profit, income tax, net profit attributable to shareholders of the Company and minority interests
decreased by 95.14%, 99.74%, 78.96%, and 1768.28% respectively as compared to the corresponding period
of the prior year mainly due to the lower gross profit margin of the Company’s products as a result of a
market downturn in the paper making industry, and an increase in finance expenses as a result of change in
registration of projects.
3. Analysis of the cash flow during the reporting period
Corresponding prior
Item Current period Change (%)
period
Net cash flow generated from operating
337,787,337.65 688,041,679.45 -50.91
activities
Net cash generated from investment activities -1,092,774,164.32 -3,371,371,938.68 67.59
Net cash flow generated from financial activities -44,022,893.49 2,757,199,394.35 -101.60
7
Explanation of the reasons leading to the major changes:
(1) Net cash flow generated from operating activities decreased by 50.91% as compared to the corresponding
period of the prior year mainly due to more cash being received from operating activities during the
corresponding period of the prior year.
(2) Net cash flow generated from investment activities increased by 67.59% as compared to the corresponding
period of the prior year mainly due to fewer project investments made during the reporting period upon
completion of the Zhanjiang pulp project, the 450,000-tonne high-end culture paper project and the
800,000-tonne coated paper project.
(3) Net cash flow generated from financial activities decreased by 101.6% as compared to the corresponding
period of the prior year mainly due to an increase in borrowings during the corresponding period of the prior
year as a result of project investment.
(II) The progress of significant events and analysis of their impact and solutions
1. Non-standard opinion
□ Applicable √ Not applicable
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. Execution of material contracts in the ordinary course of business and their performance
□ Applicable √ Not applicable
4. Others
□ Applicable √ Not applicable
(III) Undertakings by the Company or shareholders interested in 5% or more of the shares of
the Company made during the reporting period or subsisting to the reporting period
√ Applicable □ Not applicable
Time of Duration of Implemen
Undertaking Undertaker Contents of undertaking undertaking undertaking tation
Undertaking
on share
reform
Undertakingsmad
8
e in the
Acquisition
report or
equity change
report
Undertaking
made on asset
swap
(1) According to the plan on defective
properties of the Company, Shouguang
Chenming Holdings Company Limited
guaranteed and undertook that: according
to the application of the Company, for
defective property(ies) owned by the
Company and its holding company
whichsituated in the administrative area of
Shouguang city, Shouguang Chenming
Holdings will purchase it(them) and have
it(them) being transferred to itself pursuant
to the law in accordance with the result of
the related asset valuation if the Company
decides to transfer and dispose of it(them)
and there is no other transferee;
(2) before the Company transfers and No stated
16 January
disposes of the defective properties duration for Strictl
2008 and
pursuant to the law,, if the defects cause the performance implement
20 January
Company to incur any economic losses since H share ed
2008
(including but not limited to damages, issue
penalties and relocation costs), Shouguang
Chenming Holdings will bear such
economic losses;
Shouguang (3) during the corrective activities taken to
Chenming the defective properties of buildings and
Holdings land of subsidiaries of the Company
Company situated outside the local areas (including
Undertaking on
Limited, the the administrative area of Shouguang city),
new issue
controlling the economic losses such as penalties or
shareholder relocation costs implemented by competent
of the administrative authorities and borne by the
Company subsidiaries arising from
defects of insufficient title documents shall
be paid pursuant to the law by Shouguang
Chenming Holdings after verification..
(1) Shouguang Chenming Holdings shall
not engage, whether solely, jointly, or by
representing itself or any other persons or
companies, and shall not procure its
associates (as defined in The Listing Rules
of Hong Kong Stock Exchange) to engage,
in any business which competes with the
business of the Company and its
No stated
subsidiaries (“Chenming Group” or “we”)
duration for Strictly
directly or indirectly, in any country and 22 May
performance implement
region which our business exists (or any 2008
since H share ed
part of the world if in any form of
issue
electronics business), or in any business
that directly or indirectly competes with
Chenming Group’s business which we
operate from time to time (including but
not limited to any business in the form of
sole proprietorship, joint ventures or
acquisitions, or holding interests directly or
indirectly in such enterprises, or by any
9
other means);
(2) in the event that Shouguang Chenming
Holdings is required by its business to,
whether solely, jointly, or by representing
itself or any other persons or companies,
engage in business which directly or
indirectly competes against Chenming
Group’s business, or obtain any business
opportunity which directly or indirectly
competes against Chenming Group’s
business, it shall endeavour to procure that
Chenming Group shall have priority to
obtain the right to operate such business or
to obtain such business opportunity;
(3) if Shouguang Chenming Holdings is in
breach of the abovementioned
undertakings, it shall indemnify us for any
loss caused by such breach and the
Company shall have the right to acquire all
businesses of Shouguang Chenming
Holdings, which directly or indirectly
compete with the businesses of our
Group, at market price or cost price
(whichever price is lower);
(4) Shouguang Chenming Holdings shall
not make use of its position as the
controlling shareholder (as defined in The
Listing Rules of Hong Kong Stock
Exchange) of our Group (or jointly or
representing other persons or companies)
jeopardize the legal interests of our Group
and our Group’s shareholders.
Other
undertakings
towards medium
and
minority
shareholders of
the
Company
Whether
undertakings
have been √ Yes □ No □ Not applicable
fulfilled timely?
Reason for
failure to fulfil
the undertakings
and the plan
ahead
Any undertaking
made in
respect of
issues arising
from business √ Yes □ No □ Not applicable
competition and
connected
transactions?
Duration to
implement the
undertakings
Solution
Implementation Strictly implemented
10
of undertakings
(IV) Estimate of the operating results for 2012
Warning and explanation of cumulative net profit for the period from the beginning of the year
to the end of the next reporting period being projected to be at a loss or expected to have
material changes as compared to the corresponding year
□ Applicable √ Not applicable
(V) Other significant events that required explanation
1. Securities investment
□ Applicable √ Not applicable
2. Investment in derivatives
□ Applicable √ Not applicable
3. Positions of investment in derivatives as at the end of the reporting period
□ Applicable √ Not applicable
4. Register of reception of research investigations, communications and interviews during
the reporting period
Class of the Main topics of
Date of Place of Manner of
parties Parties accommodated discussion and
reception reception reception
accommodated information provided
Production and
Shouguang, On-site research
9 January 2012 Institution Everbright Securities operation of the
Shandong investigation
Company
Galaxy A M C, Production and
Shouguang, On-site research
8 February 2012 Institution Zheshang Securities operation of the
Shandong investigation
and Huatai Securities Company
Guotai Junan and Production and
Shouguang, On-site research
30 March 2012 Institution Bosera Asset operation of the
Shandong investigation
Management Company
Atlantis Investment Production and
Shouguang, On-site research
27 April 2012 Institution Management (Hong operation of the
Shandong investigation
Kong) Limited Company
Production and
Shouguang, On-site research Dongxing Securities
15 May 2012 Institution operation of the
Shandong investigation Co., Ltd.
Company
Production and
Shouguang, FIL Investment
18 May 2012 Conference Call Institution operation of the
Shandong Management
Company
11
Class of the Main topics of
Date of Place of Manner of
parties Parties accommodated discussion and
reception reception reception
accommodated information provided
Production and
Shouguang, On-site research Daiwa Securities of
21 June 2012 Institution operation of the
Shandong investigation Japan
Company
Atlantis Investment Production and
Shouguang,
26 June 2012 Conference Call Institution Management (Hong operation of the
Shandong
Kong) Limited Company
Bank of America
Production and
Shouguang, On-site research Merrill Lynch and
28 June 2012 Institution operation of the
Shandong investigation Prime Capital
Company
Management
Production and
Shouguang, Invesco Hong Kong
5 July 2012 Conference Call Institution operation of the
Shandong Limited
Company
5. Particulars of corporate bond issue
Whether corporate bonds are issued or not?
√ Yes □ No
The Company was approved to issue corporate bonds of a total face value of not more than
RMB2.0 billion to the public by the document “Zheng Jian Xu Ke [2011] No. 1019” issued by
China Securities Regulatory Commission on 27 June 2011. The bonds are fixed interest
corporate bonds with a tenor of 5 years. Their coupon rate is 5.95% and their interest is
accrued per annum using simple interest instead of compound interest. The value date was 6
July 2011. Interest is payable on 6 July of each of the year 2012 to 2016 for the previous
interest-bearing year. The principal and last interest payment will be paid on these days. The
Company had disclosed “Announcement on 2012 Interest Payment of 2011 Corporate Bonds”
on 30 June 2012 and completed the payment.
12
IV. Appendices
(I) Financial statements
Consolidated financial statements need to be prepared:
√ Yes □ No □ Not applicable
Unless stated otherwise, the unit of the financial statements in the financial report: RMB
1. Consolidated balance sheet
Prepared by: Shandong Chenming Paper Holdings Limited
Unit: RMB
Item Closing balance Opening balance
CURRENT ASSETS
Monetary funds 2,572,144,340.59 3,529,938,211.47
Balances with clearing companies
Loans to banks and other financial institutions
Held-for-trading financial assets
Bills receivable 3,235,491,016.03 2,444,508,997.74
Accounts receivable 3,468,045,533.71 2,886,437,754.69
Prepayments 1,140,905,133.75 764,880,237.90
Premium receivable
Receivables from reinsurers
Reinsurance contract reserves receivable
Interest receivable
Dividend receivable
Other receivables 181,683,839.58 325,550,913.72
Financial assets purchased under agreements to resell
Inventory 5,100,879,919.80 5,586,472,121.37
Non-current assets due within one year
Other current assets 1,836,447,671.69 1,698,362,261.63
Total current assets 17,535,597,455.15 17,236,150,498.52
NON-CURRENT ASSETS:
Entrusted loans and advances to customers
Available-for-sale financial assets
Held-to-maturity investments
Long-term receivables
Long-term equity investments 351,462,993.11 77,434,005.49
Investment properties 21,646,264.00 22,949,956.03
Fixed assets 20,380,147,282.05 22,740,904,031.02
13
Item Closing balance Opening balance
Construction in progress 4,843,165,411.42 2,618,039,624.85
Construction materials 78,101,448.12 61,924,581.85
Disposal of fixed assets 903,261,704.37
Consumable biological assets 1,095,435,087.97 959,061,500.85
Oil and gas assets
Intangible assets 1,488,623,199.62 1,517,137,201.36
Development expenditure
Goodwill 20,283,787.17 20,283,787.17
Long-term prepaid expenses 188,385,346.33 192,917,245.62
Deferred income tax assets 277,987,949.14 174,026,534.27
Other non-current assets 10,000,000.00
Total non-current assets 29,648,500,473.30 28,394,678,468.51
TOTAL ASSETS 47,184,097,928.45 45,630,828,967.03
CURRENT LIABILITIES:
Short-term borrowings 12,266,606,765.49 12,086,984,606.69
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 1,614,095,834.78 615,327,402.85
Accounts payable 3,677,170,706.01 4,685,585,997.60
Advance receipt 441,026,277.53 231,428,013.45
Assets sold under agreements to repurchase
Handling charges and commission payable
Staff remuneration payables 227,820,006.70 147,063,891.65
Taxes payable 85,993,834.18 68,240,005.91
Interest payable 127,794,737.27 106,854,702.74
Dividend payable
Other payables 829,437,594.69 763,621,538.95
Due to reinsurers
Insurance contract reserves
Customer brokerage deposits
Securities underwriting brokerage deposits
Non-current liabilities due within one year 1,678,152,501.36 1,203,616,858.22
Other current liabilities 11,943,381.96 10,227,001.60
Total current liabilities 20,960,041,639.97 19,918,950,019.66
NON-CURRENT LIABILITIES:
Long-term borrowings 4,251,384,448.75 5,143,067,496.05
Bonds payable 2,481,324,542.36 2,476,942,694.79
Long-term payables
Special payables 1,266,147,401.51 660,000,000.00
Estimated liabilities
14
Item Closing balance Opening balance
Deferred income tax liabilities
Other non-current liabilities 3,539,077,022.47 2,444,093,897.14
Total non-current liabilities 11,537,933,415.09 10,724,104,087.98
TOTAL LIABILITIES 32,497,975,055.06 30,643,054,107.64
OWNERS’ EQUITY (OR SHAREHOLDERS’ EQUITY):
Paid-up capital (or share capital) 2,062,045,941.00 2,062,045,941.00
Capital reserves 6,098,264,836.00 6,098,264,836.00
Less: treasury shares
Special reserves
Surplus reserves 1,132,116,106.40 1,132,116,106.40
General risk provisions
Retained profit 4,061,631,296.60 4,237,783,996.54
Difference in Foreign currency conversion -1,584,177.33 -1,588,560.03
Total equity attributable to equity holders of the Company 13,352,474,002.67 13,528,622,319.91
Minority shareholders’ interests 1,333,648,870.72 1,459,152,539.48
Total owners’ equity (shareholders’ equity) 14,686,122,873.39 14,987,774,859.39
TOTAL LIABILITIES AND OWNERS’ EQUITY (SHAREHOLDERS
47,184,097,928.45 45,630,828,967.03
EQUITY)
Legal Representative: Financial controller: Head of the
financial department:
Chen Hongguo Wang Chunfang Liu Jun
2. Balance sheet of the Company
Prepared by: Shandong Chenming Paper Holdings Limited
Unit: RMB
Item Closing balance Opening balance
CURRENT ASSETS:
Monetary funds 1,137,698,522.80 1,747,384,563.57
Held-for-trading financial assets
Bills receivable 2,900,452,328.07 1,432,408,267.82
Accounts receivable 181,504,127.74 1,743,034,281.97
Prepayments 1,570,791,726.07 664,693,619.26
Interest receivable
Dividend receivable 518,703,203.89
Other receivables 7,668,209,359.48 6,928,079,845.18
Inventory 1,185,816,296.24 1,173,839,484.91
Entrusted loan due within one year 200,000,000.00 50,000,000.00
Other current assets 51,314,659.16 15,216,230.82
Total current assets 15,414,490,223.45 13,754,656,293.53
15
Item Closing balance Opening balance
NON-CURRENT ASSETS:
Available-for-sale financial assets
Entrusted loans 300,000,000.00 500,000,000.00
Long-term receivables
Long-term equity investments 9,342,038,800.44 8,748,703,461.63
Investment properties 21,646,264.00 22,949,956.03
Fixed assets 5,074,748,536.85 5,264,187,852.03
Construction in progress 485,539,225.69 422,232,622.40
Construction materials 2,346,121.31 3,589,906.68
Disposal of fixed assets
Productive biological assets
Oil and gas assets
Intangible assets 315,891,315.72 322,623,412.83
Development expenses
Goodwill
Long-term prepaid expenses
Deferred income tax assets 43,095,833.27 41,388,325.93
Other non-current assets 10,000,000.00
Total non-current assets 15,585,306,097.28 15,335,675,537.53
TOTAL ASSETS 30,999,796,320.73 29,090,331,831.06
CURRENT LIABILITIES:
Short-term borrowings 7,171,131,079.54 8,080,716,020.88
Held-for-trading financial liabilities
Bills payable 1,419,725,165.71 346,418,281.23
Accounts payable 1,143,658,278.17 1,698,958,458.63
Advance receipts 914,699,765.96 119,723,590.83
Staff remuneration payables 125,798,958.30 79,433,205.74
Taxes payable 24,894,802.66 21,270,847.19
Interest payable 120,940,277.78 103,910,194.44
Dividend payable
Other payables 411,775,081.85 211,491,763.93
Non-current liabilities due within one year 455,096,000.00 543,009,000.00
Other current liabilities 1,813,538.40 1,345,288.40
Total current liabilities 11,789,532,948.37 11,206,276,651.27
NON-CURRENT LIABILITIES:
Long-term borrowings 417,742,035.94 648,055,935.94
Bonds payable 1,985,901,722.53 1,983,425,123.62
Long-term payables
Special payables
Estimated liabilities
Deferred income tax liabilities
Other non-current liabilities 3,407,513,356.51 2,314,615,977.46
Total non-current liabilities 5,811,157,114.98 4,946,097,037.02
16
Item Closing balance Opening balance
TOTAL LIABILITIES 17,600,690,063.35 16,152,373,688.29
OWNERS’ EQUITY (OR SHAREHOLDERS’ EQUITY):
Paid-up capital (or share capital) 2,062,045,941.00 2,062,045,941.00
Capital reserves 6,184,215,988.77 6,184,215,988.77
Less: treasury shares
Special reserves
Surplus reserves 1,119,926,524.49 1,119,926,524.49
General risk provisions
Retained profit 4,032,917,803.12 3,571,769,688.51
Foreign currency translation differences
Total owners’ equity (shareholders’ equity) 13,399,106,257.38 12,937,958,142.77
TOTAL LIABILITIES AND OWNERS’ EQUITY
30,999,796,320.73 29,090,331,831.06
(SHAREHOLDERS’S EQUITY)
Legal Representative: Financial controller: Head of the financial
department:
Chen Hongguo Wang Chunfang Liu Jun
3. Consolidated income statement for the reporting period
Prepared by: Shandong Chenming Paper Holdings Limited
Unit: RMB
Amounts for the Amounts for the prior
Item
reporting period period
I. Total operating revenue 5,001,125,623.43 4,427,243,847.48
Including: revenue 5,001,125,623.43 4,427,243,847.48
Interest income
Earned premium
Handling charges and commission income
II. Total operating costs 5,073,803,940.65 4,304,054,582.51
Including: operating costs 4,227,112,334.26 3,749,052,925.15
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 19,309,873.62 21,808,604.16
Selling and distribution expenses 296,850,216.78 232,687,936.82
General and administrative expenses 286,962,632.78 230,352,669.46
17
Amounts for the Amounts for the prior
Item
reporting period period
Finance expenses 244,410,722.68 102,510,313.15
Loss on impairment of assets -841,839.47 -32,357,866.23
Plus: gain on change in fair value (“-” denotes loss)
Investment income (“-” denotes loss) -3,254,483.08 -830,738.16
Including: investment income from associates and
-3,254,483.08 -989,797.08
joint ventures
Foreign exchange gains (“-” denotes loss)
III. Operating profit (“-” denotes loss) -75,932,800.30 122,358,526.81
Plus:non-operating income 108,498,523.28 61,813,937.33
Less: non-operating expenses 7,758,366.15 10,080,971.90
Including: loss on disposal of non-current assets 680,539.97 4,500,203.40
IV. Total profit (“-” denotes total loss) 24,807,356.83 174,091,492.24
Less: income tax expenses 13,196,636.89 32,341,077.28
V. Net profit (“-” denotes net loss) 11,610,719.94 141,750,414.96
Including: net profit achieved by the acquiree before business
combination
Net profit attributable to shareholders of the Company 38,909,228.41 149,251,843.22
Minority shareholders’ interests -27,298,508.47 -7,501,428.26
VI. Earnings per share: — —
(I) Basic earnings per share 0.02 0.08
(II) Diluted earnings per share 0.02 0.08
VII. Other comprehensive income 156,769.51 -221,981.71
VIII. Total comprehensive income 11,767,489.45 141,528,433.25
Total comprehensive income attributable to shareholders of the
39,065,997.92 149,029,861.51
Company
Total comprehensive income attributable to minority
-27,298,508.47 -7,501,428.26
shareholders’ interests
For the business merger under common control during the reporting period, the net profit achieved
by the acquiree before business merger was RMB0.00.
Legal Representative: Financial controller: Head of the
financial department:
Chen Hongguo Wang Chunfang Liu Jun
4. Income statement of the Company for the reporting period
Prepared by: Shandong Chenming Paper Holdings Limited
Unit: RMB
Item Amounts for the Amounts for the prior
18
reporting period period
I. Revenue 2,214,888,925.36 2,308,083,129.44
Less:operating costs 1,821,831,768.94 1,976,030,855.76
Business taxes and surcharges 13,494,701.80 10,393,419.11
Selling and distribution expenses 79,071,376.54 74,958,425.18
General and administrative expenses 135,877,788.66 99,158,139.57
Finance expenses 110,588,252.99 49,330,991.09
Loss on impairment of assets -1,103,338.31 -27,986,900.85
Plus:gain on change in fair value (“-” denotes loss)
Investment income (“-” denotes loss) 517,459,957.05 62,017,948.38
Including: investment income from associates and joint
-3,254,483.08 -989,797.08
ventures
II. Operating profit (“-” denotes loss) 572,588,331.79 188,216,147.96
Plus:non-operating income 32,616,098.51 1,612,798.83
Less:non-operating expenses 628,871.11 3,549,889.06
Including: loss on disposal of non-current assets 28,871.11 3,549,889.06
III. Total profit (“-” denotes total loss) 604,575,559.19 186,279,057.73
Less: income tax expenses 9,564,284.26 25,263,910.13
IV. Net profit (“-” denotes net loss) 595,011,274.93 161,015,147.60
V. Earnings per share: — —
(I) Basic earnings per share 0.29 0.08
(II) Diluted earnings per share 0.29 0.08
VI. Other comprehensive income
VII. Total comprehensive income 595,011,274.93 161,015,147.60
Legal Representative: Financial controller: Head of the
financial department:
Chen Hongguo Wang Chunfang Liu Jun
5. Consolidated 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
Unit: RMB
Amounts for the current Amounts for the prior
Item
period period
I. Total operating revenue 14,965,577,158.47 13,344,699,202.62
Including:revenue 14,965,577,158.47 13,344,699,202.62
Interest income
Earned premium
Handling charges and commission income
II. Total operating costs 15,259,640,091.54 12,760,850,381.84
19
Amounts for the current Amounts for the prior
Item
period period
Including: operating costs 12,727,625,270.29 11,131,812,049.64
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 51,156,658.73 53,921,873.74
Selling and distribution expenses 832,809,505.31 671,206,065.44
General and administrative expenses 849,757,346.38 701,591,233.76
Finance expenses 785,696,377.13 256,102,491.65
Loss on impairment of assets 12,594,933.70 -53,783,332.39
Plus: gain on change in fair value (“-” denotes loss) 15,457,198.72 3,715,429.62
Investment income (“-” denotes loss) -5,971,012.39 8,722,923.82
Including: investment income from associates and
-5,971,012.39 -4,745,298.47
joint ventures
Foreign exchange gains (“-” denotes loss)
III. Operating profit (“-” denotes loss) -284,576,746.74 596,287,174.22
Plus:non-operating income 331,966,255.18 207,761,300.22
Less:non-operating expenses 10,063,384.59 36,418,089.15
Including: loss on disposal of non-current assets 1,589,886.96 5,423,591.19
IV. Total profit (“-” denotes total loss) 37,326,123.85 767,630,385.29
Less: income tax expenses 329,703.66 129,064,975.60
V. Net profit (“-” denotes net loss) 36,996,420.19 638,565,409.69
Including: Net profit achieved by the acquiree before business
combination
Net profit attributable to shareholders of the Company 133,154,191.26 632,801,534.62
Minority interests -96,157,771.07 5,763,875.07
VI. Earnings per share: — —
(I) Basic earnings per share 0.06 0.31
(II) Diluted earnings per share 0.06 0.31
VIII.Other comprehensive income 4,382.70 -499,858.01
VIII.Total comprehensive income 37,000,802.89 638,065,551.68
Total comprehensive income attributable to shareholders of the
133,158,573.96 632,301,676.61
Company
Total comprehensive income attributable to minority
-96,157,771.07 5,763,875.07
shareholders’ interests
For the business merger under common control during the period from the beginning of the year to
the reporting period, the net profit achieved by the acquiree before business merger was RMB0.00.
20
Legal Representative: Financial controller: Head of the financial
department:
Chen Hongguo Wang Chunfang Liu Jun
6. Income statement of the Company for the period from the beginning of the year to the
end of the reporting period
Prepared by: Shandong Chenming Paper Holdings Limited
Unit: RMB
Amounts for the current Amounts for the prior
Item
period period
I. Revenue 6,302,112,568.48 6,418,942,841.59
Less:operating costs 5,270,075,278.08 5,301,705,953.22
Business taxes and surcharges 30,160,356.01 24,305,510.12
Selling and distribution expenses 204,102,324.10 210,487,833.62
General and administrative expenses 400,662,713.06 310,690,627.65
Finance expenses 355,580,685.74 174,744,007.91
Loss on impairment of assets -8,148,207.54 -66,452,404.89
Plus:gain on change in fair value (“-” denotes loss)
Investment income (“-” denotes loss) 560,252,364.96 202,425,925.53
Including: investment income from associates and joint -5,971,012.39 -4,745,298.47
ventures
II. Operating profit (“-” denotes loss) 609,931,783.99 665,887,239.49
Plus:non-operating income 185,227,909.33 102,461,065.93
Less:non-operating expenses 780,003.59 26,277,619.53
Including: loss on disposal of non-current assets 155,357.49 3,993,160.29
III. Total profit (“-” denotes total loss) 794,379,689.73 742,070,685.89
Less:income tax expenses 23,924,683.92 83,716,272.60
IV. Net profit (“-” denotes net loss) 770,455,005.81 658,354,413.29
V. Earnings per share: — —
(I) Basic earnings per share 0.37 0.32
(II) Diluted earnings per share 0.37 0.32
VI. Other comprehensive income
VII. Total comprehensive income 770,455,005.81 658,354,413.29
Legal Representative: Financial controller: Head of the financial
department:
Chen Hongguo Wang Chunfang Liu Jun
7. Consolidated cash flow statement for the period from the beginning of the year to the end
of the reporting period
21
Prepared by: Shandong Chenming Paper Holdings Limited
Unit: RMB
Amounts for the current Amounts for the prior
Item
period period
I. Cash flows from operating activities:
Cash received from sales of goods and rendering of services 14,135,299,123.22 13,633,847,368.78
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 charges and commissions
Net increase in placements from banks and other financial
institutions
Net capital increase of repurchase business
Tax rebates received 5,344,897.23 20,277,735.18
Cash received relating to other operating activities 280,983,695.76 1,365,688,962.58
Subtotal of cash inflows from operating activities 14,421,627,716.21 15,019,814,066.54
Cash paid for goods and services 11,723,218,508.93 11,987,614,159.94
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 647,767,716.18 633,462,833.10
Payments of taxes and surcharges 933,311,776.56 1,076,812,938.70
Cash paid relating to other operating activities 779,542,376.89 633,882,455.35
Subtotal of cash outflows from operating activities 14,083,840,378.56 14,331,772,387.09
Net cash flows from operating activities 337,787,337.65 688,041,679.45
II. Cash flows from investing activities:
Cash received from investments
Cash received from investment income
Net cash received from disposal of fixed assets, intangible assets
830,503.45 61,320,247.70
and other long-term assets
Net cash received from disposal of subsidiaries and other
3,467,152.31
business units
Cash received relating to other investing activities 680,982,210.00 5,754,188.06
Subtotal of cash inflows from investing activities 681,812,713.45 70,541,588.07
Cash paid for purchase of fixed assets, intangible assets and
1,504,586,877.77 3,385,207,926.75
other long-term assets
Cash paid on investments 270,000,000.00 56,705,600.00
22
Amounts for the current Amounts for the prior
Item
period period
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 activities 1,774,586,877.77 3,441,913,526.75
Net cash flows from investing activities -1,092,774,164.32 -3,371,371,938.68
III. Cash flows from financing activities:
Cash received from capital contribution
Including: cash received from minority interest contribution to
subsidiaries
Cash received from borrowings 17,627,355,217.24 11,456,606,231.94
Cash received from bond issue
Cash received relating to other financing activities 1,245,088,422.26 2,473,756,944.44
Subtotal of cash inflows from financing activities 18,872,443,639.50 13,930,363,176.38
Cash repayments of amounts borrowed 17,872,124,984.70 6,617,449,196.47
Cash paid for dividend and profit distribution or interest
1,044,341,548.29 1,036,114,508.24
payment
Including: dividend and profit paid to minority interests by
12,420,240.00 28,219,978.44
subsidiaries
Cash paid relating to other financing activities 3,519,600,077.32
Subtotal of cash outflows from financing activities 18,916,466,532.99 11,173,163,782.03
Net cash flows from financing activities -44,022,893.49 2,757,199,394.35
IV. Effect of foreign exchange rate changes on cash and cash
2,804,271.54 -21,288,604.62
equivalents
V. Net increase in cash and cash equivalents -796,205,448.62 52,580,530.50
Plus: balance of cash and cash equivalents as at the beginning of
2,317,048,619.53 1,855,235,979.80
the period
VI. Balance of cash and cash equivalents as at the end of the period 1,520,843,170.91 1,907,816,510.30
Legal Representative: Financial controller: Head of the
financial department:
Chen Hongguo Wang Chunfang Liu Jun
8. Cash flow statement of the Company for the period from the beginning of the year to the
end of the reporting period
Prepared by: Shandong Chenming Paper Holdings Limited
Unit: RMB
Amounts for the current Amounts for the prior
Item
period period
I. Cash flows from operating activities:
Cash received from sales of goods and rendering of services 6,504,753,641.17 7,484,468,241.21
Tax rebates received
23
Amounts for the current Amounts for the prior
Item
period period
Cash received relating to other operating activities 207,176,266.39 156,272,009.26
Subtotal of cash inflows from operating activities 6,711,929,907.56 7,640,740,250.47
Cash paid for goods and services 4,781,250,038.82 5,139,166,584.95
Cash paid to and for employees 210,593,080.77 221,240,444.53
Payments of taxes and surcharges 472,353,682.65 498,987,569.27
Cash paid relating to other operating activities 260,594,132.82 -502,872,485.56
Subtotal of cash outflows from operating activities 5,724,790,935.06 5,356,522,113.19
Net cash flows from operating activities 987,138,972.50 2,284,218,137.28
II. Cash flows from investing activities:
Cash received from investments 50,000,000.00 381,522,705.39
Cash received from investment income 47,520,173.46 204,893,213.11
Net cash received from disposal of fixed assets, intangible assets
49,702.28 507,487.28
and other long-term assets
Net cash received from disposal of subsidiaries and other
business units
Cash received relating to other investing activities
Subtotal of cash inflows from investing activities 97,569,875.74 586,923,405.78
Cash paid for purchase of fixed assets, intangible assets and
147,808,785.14 309,575,411.78
other long-term assets
Cash paid on investments 589,465,450.00 1,976,239,025.00
Net cash paid for acquisition of subsidiaries and other business
units
Cash paid relating to other investing activities
Subtotal of cash outflows from investing activities 737,274,235.14 2,285,814,436.78
Net cash flows from investing activities -639,704,359.40 -1,698,891,031.00
III. Cash flows from financing activities:
Cash received from capital contribution
Cash received from borrowings 10,474,339,673.89 5,615,596,650.32
Cash received from bond issue
Cash received relating to other financing activities 1,083,500,000.00 1,982,006,944.44
Subtotal of cash inflows from financing activities 11,557,839,673.89 7,597,603,594.76
Cash repayments of amounts borrowed 11,702,151,515.23 4,138,935,958.83
Cash paid for dividend and profit distribution or interest
818,971,968.37 817,822,372.38
payment
Cash paid relating to other financing activities 551,472,065.16 3,506,636,496.04
Subtotal of cash outflows from financing activities 13,072,595,548.76 8,463,394,827.25
Net cash flows from financing activities -1,514,755,874.87 -865,791,232.49
IV. Effect of foreign exchange rate changes on cash and cash
6,163,155.84 -2,229,334.11
equivalents
V. Net increase in cash and cash equivalents -1,161,158,105.93 -282,693,460.32
Plus: balance of cash and cash equivalents as at the beginning of
1,290,039,078.57 662,209,607.29
the period
24
Amounts for the current Amounts for the prior
Item
period period
VI. Balance of cash and cash equivalents as at the end of the period 128,880,972.64 379,516,146.97
Legal Representative: Financial controller: Head of the financial
department:
Chen Hongguo Wang Chunfang Liu Jun
(II) Audit report
Audit opinion Unaudited
25
