SHANDONG CHENMING PAPER HOLDINGS
LIMITED
2014 First Quarter Report
April 2014
1
I Important Notice
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 the
Company hereby warrant that the contents of the quarter report (“Quarter
Report”) are true, accurate and complete and there are no false representations,
misleading statements or material omissions, and jointly and severally accept
liability.
All Directors were present at the Board meeting to consider and approve this
quarterly report.
Chen Hongguo, head of the Company, Li Dong, head in charge of accounting and
Liu J u n, head of the accounting department (Accounting Officer), declare that
they warrant the truthfulness, accuracy and completeness of the financial
statements in the Quarter Report.
2
II Major financial data and change of shareholders
1. Major accounting data and financial indicators
Retrospective adjustment to or restatement of the accounting data for prior years
by the Company due to change of accounting policies and correction of
accounting errors
□ Yes √No
Increase/decrease
compared to the
corresponding
This reporting Corresponding period of the
period period of prior year prior year
Revenue (RMB) 4,078,069,314.47 4,923,810,623.61 -17.18%
Net profit attributable
to shareholders of the
Company (RMB) 81,273,928.14 71,411,642.71 13.81%
Net profit after
extraordinary gains or
losses attributable to
shareholders of the
Company (RMB) -48,792,027.97 14,781,161.08 -430.10%
Net cash flows from
operating activities
(RMB) 631,844,125.85 280,787,686.38 125.03%
Basic earnings per
share (RMB per
share) 0.04 0.03 33.33%
Diluted earnings per
share (RMB per
share) 0.04 0.03 33.33%
Rate of return on net
assets on weighted
average basis (%) 0.58% 0.52% 0.06%
Increase/decrease
compared to the
corresponding
As at the end of the As at the end period of the
reporting period of prior year prior year
Total assets (RMB) 48,284,558,080.95 47,521,883,569.18 1.60%
Net assets attributable
to shareholders of the
Company (RMB) 14,067,211,811.15 14,039,888,226.11 0.19%
3
Items and amounts of extraordinary gains or losses
√ Applicable □Not applicable
Unit: RMB
Am ounts for the
period from the
beginning of the
year to the end of
the reporting
Item period Note
Gain or loss from disposal of
non-current assets (including
write-off of provision for assets
impairment) 63,617,955.54
Government grants (except for the
government grants closely related to
the normal operation of the company
and granted constantly at a fixed
amount or quantity in accordance
with a certain standard based on state
policies) accounted for in profit or
loss for the current period 64,362,305.48
Non-operating gains and losses other
than the above items 40,121,304.22
Less: Effect of income tax 31,426,178.16
Effect of minority interests (after tax) 6,609,430.97
Total 130,065,956.11 —
Notes for the Company‘s extraordinary gain or loss items as defined in the
Explanatory Announcement on Information Disclosure for Companies Offering
Their Securities to the Public No.1 - Extraordinary Gains or Losses and the
extraordinary gain or loss items as illustrated in the Explanatory Announcement
on Information Disclosure for Companies Offering Their Securities to the Public
No.1 - Extraordinary Gains or Losses defined as its recurring gain or loss items
□ Applicable √Not applicable
4
2. Total number of shareholders and the shareholding of the top ten
shareholders as at the end of the reporting period
Unit: share
Total number of shareholders as at the end of 134,276, of which 104,964 were holders of A shares,
the reporting period 28,757 holders of B shares and 555 holders of H shares
Shareholding of the top ten shareholders
Share pledged
Percentage Number of or locked-up
of Number restricted Status
Nature of shareholding of shares shares of
Name of shareholders shareholders held held shares Number
HKSCC NOMINEES Overseas legal 19.73% 389,814,500 0 0
LIMITED person
SHOUGUANG CHENMING State-owned 14.83% 293,003,657 0 0
HOLDINGS COMPANY legal person
LIMITED
ZHONGRONG Others 1.85% 36,620,302 0 0
INTERNATIONAL TRUST
CO., LTD. —HAITONG
UMBRELLA BAO NO. 1
SECURITIES
INVESTMENT
ASSEMBLED FUNDS
TRUST
PLATINUM ASIA FUND Overseas legal 1.64% 32,341,052 0 0
person
CAITONG FUND - Others 1.47% 29,056,556 0 0
EVERBRIGHT BANK —
CAITONG FUND —YUAN
MEINO. 2 ASSETS
MANAGEMENT
PROGRAMME
CAITONG FUND Others 1.47% 28,948,049 0 0
—EVERBRIGHT BANK —
YUAN MEI NO. 1
ASSETS MANAGEMENT
PROGRAMME
YUNNAN INTERNATIONAL Others 0.73% 14,377,397 0 0
TRUST CO., LTD. —
YUNNAN TRUST
GROWTH 2013 —NO. 2
ASSEMBLED FUNDS
TRUST PROGRAMME
BBH A/C VANGUARD Overseas legal 0.61% 12,036,985 0 0
EMERGING MARKETS person
STOCK INDEX FUND
BILL & MELINDA GATES Overseas legal 0.51% 10,033,077 0 0
FOUNDATION TRUST person
Jin Xing Domestic natural 0.41% 8,078,300 0 0
person
5
Shareholding of the top ten shareholders of non-restricted shares
Number of
non-restricted Class of shares
Name of shareholders shares held Class of shares Number
HKSCC NOMINEES LIMITED 389,814,500 Overseas listed 389,814,500
foreign shares
SHOUGUANG CHENMING 293,003,657 RMB ordinary 293,003,657
HOLDINGS COMPANY LIMITED shares
ZHONGRONG INTERNATIONAL 36,620,302 RMB ordinary 36,620,302
TRUST CO., LTD. —HAITONG shares
UMBRELLA BAO NO. 1 SECURITIES
INVESTMENT ASSEMBLED FUNDS
TRUST
PLATINUM ASIA FUND 32,341,052 Domestic listed 32,341,052
foreign shares
CAITONG FUND - EVERBRIGHT 29,056,556 RMB ordinary 29,056,556
BANK — CAITONG FUND —YUAN shares
MEINO. 2 ASSETS MANAGEMENT
PROGRAMME
CAITONG FUND —EVERBRIGHT 28,948,049 RMB ordinary 28,948,049
BANK — YUAN MEI NO. 1 ASSETS shares
MANAGEMENT PROGRAMME
YUNNAN INTERNATIONAL TRUST 14,377,397 RMB ordinary 14,377,397
CO., LTD. — YUNNAN TRUST shares
GROWTH 2013 —NO. 2 ASSEMBLED
FUNDS TRUST PROGRAMME
BBH A/C VANGUARD EMERGING 12,036,985 Domestic listed 12,036,985
MARKETS STOCK INDEX FUND foreign shares
BILL & MELINDA GATES 10,033,077 RMB ordinary 10,033,077
FOUNDATION TRUST shares
Jin Xing 8,078,300 RMB ordinary 2,096,600
shares
Domestic listed 5,981,700
foreign shares
Connected relationship or concert-party Shouguang Chenming Holdings Company Limited, a
relationship among the above state-owned legal person shareholder, is not connected with any
shareholders of the shareholders in the above. It is not a person acting in
concert under Administration of Disclosure of Information on
the Change of Shareholdings in Listed Companies Procedures.
Both Caitong Fund - Everbright Bank - Caitong Fund - Yuan
Mei No. 2 Assets Management Programme and Caitong Fund -
Everbright Bank - Yuan Mei No. 1 Assets Management
Programme are funds managed by Caitong Fund Management
Co., Ltd. Save for the above, it is not aware of any other
shareholders of tradable shares are persons acting in concert
and is also not aware of any other shareholders of tradable
shares are connected with each others.
6
Whether an agreed repurchase transaction was entered during the reporting period
by the shareholders of the Company
√ Yes □No
On 20 January 2014, Shouguang Chenming Holdings Limited, a shareholder
holding more than 5% interest of the Company, disposed of 86,600,000 shares
through agreed repurchase type securities trading, the number of shares held by
the Company before and after the transaction are set out below:
Unit: Share
Before transaction After transaction
Percentage of Percentage of
the total the total
Number of share capital Number of share capital
shares held of the shares held of the
Name of by the Company by the Company
shareholders Company Company
Shouguang Chenming 206,403,657 10.45% 293,003,657 14.83%
Holdings Company
Limited
7
III Material matters
I. Details and reasons for significant changes of major accounting statement
items and financial indicators during the reporting period
(I) Analysis of the assets and liabilities of the Company
Unit: RMB
Reasons
Item 31 March 2014 31 December 2013 Change for change
Construction in
progress 2,962,938,369.71 5,266,031,817.60 -43.73% (1)
Disposal of fixed
assets 333,378,731.42 588,181,647.53 -43.32% (2)
Bills payable 198,840,000.00 290,403,790.59 -31.53% (3)
Advance receipts 218,750,535.23 442,432,261.58 -50.56% (4)
Interest payable 268,757,445.94 153,189,860.42 75.44% (5)
Long-term payables 128,000,000.00 60,000,000.00 113.33% (6)
Treasury shares 92,333,379.10 30,954,891.40 198.28% (7)
Explanation of the reasons leading to the major changes:
(1) Construction in progress decreased by 43.73% mainly due to the
reclassification of the construction in progress into fixed assets upon the
completion of Jilin Chenming’s environment protection relocation
project, Meilun’s paper additives project and Wuhan’s household paper
project.
(2) Disposal of fixed assets decreased by 43.32% mainly due to the completion
of Jilin Chenming’s environment protection relocation project and disposal
of old plants.
(3) Bills payable decreased by 31.53% mainly due to the decrease in acceptance
bills issued by the Company for payment of goods.
(4) Advance receipts decreased by 50.56% mainly due to the increase in letter of
credit issued by the Company for payment of goods and a shorter time for
goods delivery.
8
(5) Interest payable increased by 75.44% mainly due to the interest payment on
corporate bonds and medium-term notes by the Company.
(6) Long-term payables increased by 113.33% mainly due to the increase in
borrowings from the Management Committee of Nanchang Economic and
Technological Development Zone to Jiangxi Chenming for promotion of the
smooth commencement of its phase II project.
(7) Treasury shares increased by 198.28% mainly due to the repurchase of H
shares by the Company during the first quarter.
(II) Reasons for significant year on year changes of income statement items
during the reporting period
Unit: RMB
Reasons
Item January - March 2014 January - March 2013 Change for change
Loss on impairment of
assets -9,028,147.99 -5,070,294.78 -78.06% (1)
Investment income -3,377,138.33 -61,544.44 -5,387.32% (2)
Operating profit -73,970,004.17 9,797,160.75 -855.01% (3)
Non-operating income 176,033,614.08 75,195,949.69 134.10% (4)
Income tax expenses 21,288,605.27 12,445,693.81 71.05% (5)
Other comprehensive
income -3,614,222.32 388,992.69 -1,029.12% (6)
Explanation of the reasons leading to the major changes:
(1) Loss on impairment of assets by 78.06% mainly due to fewer bad debts
provisions as compared to the corresponding period of the prior year as a
result of an increase in the accounts receivable managed by the Company.
(2) Investment loss increased by 5,387.32% mainly due to the increase in loss
on disposal of subsidiaries and investment loss from associates.
(3) Operating profit decreased by 855.01% mainly due to the decrease in sales
of the Company during Chinese New Year and suspension of production of certain
subsidiaries due to annual inspection.
(4) Non-operating income increased by 134.10% mainly due to the increase in
net income from disposal of assets.
9
(5) Income tax expenses increased by 71.05% mainly due to the increase in total
profit of the Company for the current period.
(6) Other comprehensive income decreased by 1,029.12% mainly due to the
decrease in foreign currency translation differences arising from RMB
depreciation.
(III) Analysis of cash flows during the reporting perio d
Unit: RMB
Am ounts for the
corresponding
Am ounts for the period of
Item period the prior year Change
Net cash flows from
operating activities 631,844,125.85 280,787,686.38 125.03%
Net cash flows from
investment activities -722,180,627.88 -235,926,556.72 -206.10%
Net cash flows
generated from
financial activities 225,246,123.67 -1,277,205,415.73 117.64%
Explanation of the reasons leading to the major changes:
(1) Net cash flows from operating activities increased by 125.03% mainly due
the increase in proportion of payment for goods by bills and letter of credit and the
decrease in cash payment through fully utilize the overseas market to expand
financing channels.
(2) Net cash flows from investment activities decreased by 206.10% mainly due
the increase in external entrusted loans during the year.
(3) Net cash flows from financial activities increased by 117.64% mainly due to
the settlement of medium-term notes due for repayment during the
corresponding period of the prior year.
10
II. Progress in respect to material matters and analysis of the related effects
and solutions
1. Repurchase of H shares
On 27 June 2013, the First Extraordinary Meeting of the Seventh Session of the
Board approved the proposal concerning the granting of a general mandate to the
Board for repurchase of part of H shares of the Company.
On 21 August 2013, the Company convened the 2013 First extraordinary general
meeting, Class Meeting for Holders of Domestic Listed Shares (A shares and B
shares) and Class Meeting for Holders of Overseas Listed Shares (H shares), at
which proposals concerning the repurchase of H shares of the Company were
approved. On the next day, the Company disclosed an announcement in respect
of H shares repurchase and capital reduction.
On 10 October 2013, Shandong Province Commerce Department issued a
Preliminary Reply to Capital Reduction by Shandong Chenming Paper Holdings
Limited (Lu Shang Wu Wai Zi Zi [2013] No. 705), which intended to agree that
the Company repurchased not more than 39.127 million issued overseas listed
foreign shares (H shares). The number of repurchased shares will be determined
by the actual amount of shares repurchased and the registered capital should be
reduced accordingly.
The Company commenced the repurchase of H shares since 11 December 2013.
As at 31 March 2014, the accumulated number of H shares repurchased by the
Company in Hong Kong Stock Exchange was 34,097,500 shares, representing
1.7260% of the total share capital of the Company. The highest and lowest
repurchase prices were HK$3.53 per share and HK$3.17 per share, respectively.
The total amount paid was HK$116,044,580. The repurchased shares have not
been cancelled yet.
11
2. Disposal of 51% equity interest in Xinli Power by our controlling subsidiary,
Chenming Power
On 15 November 2013, the Company convened the third extraordinary meeting
of the seventh session of the Board and approved “the resolution on disposal of
equity interest in Xinli Power”, which agreed to dispose of 51% equity interest in
Shandong Chenming Xinli Power Co., Ltd by Shandong Chenming Power Supply
Holdings Co., Ltd .On 4 March 2014, Chenming Power Supply entered into
an equity transfer contract with Guangdong Dejun Investment Co., Ltd., at a
consideration of RMB76.1940 million, to transfer its 51% equity interest in Xinli
Power to Guangdong Dejun Investment Co., Ltd.. Upon the completion of the
above equity transfer, the Company will no longer hold any equity interest in
Xinli Power.
Due to the prolonged use of Xinli Power equipment as well as higher operational
costs arising from greater investments in environmental protection equipment
relating to desulfurisation and denitration, the Company disposed of its equity
interest in Xinli Power to increase its cash flow, which allowed the Company to
centralise its resources for developing high-end niche products to further
improve its results.
For more details, please refer to the related announcements disclosed by
the Company on http://www.cninfo.com.cn/ on 16 November 2013 and 5
March 2014, respectively.
III. Undertakings made by the Company and shareholders interested in 5%
or m ore of the shares of the Company made in the reporting period or
subsisting to the reporting period
Party Particulars on
involved in Undertaking the
Undertaking undertaking Details of undertaking date Term performance
Undertaking on
shareholding structure
reformation
Undertaking made in
offering documents or
shareholding
alternation documents
Undertaking made during
asset reconstruction
12
Party Particulars on
involved in Undertaking the
Undertaking undertaking Details of undertaking date Term performance
Undertaking made on Shouguang (1) According to the plan on 16 January 2008 During the Strictly
initial public offering Chenming defective properties of the period when implemented
or refinancing Holdings Company, Shouguang Chenming
Company Chenming Holdings Holdings was
Limited, the Company Limited has the substantial
controlling guaranteed and undertaken shareholder of
shareholder that: according to the the Company
of the application of the Company,
Company for defective property(ies)
owned by the Company and
its holding company which
situated 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
disposes of the defective
properties pursuant to the
law, if the defects cause the
Company to incur any
economic losses (including
but not limited to damages,
penalties and relocation
costs), Shouguang Chenming
Holdings will bear such
economic losses; (3) during
the corrective activities taken
to the defective properties of
buildings and land of
subsidiaries of the Company
situated outside the local
areas (including the
administrative area of
Shouguang city), the
economic losses such as
penalties or relocation costs
implemented by competent
administrative authorities
and borne by the subsidiaries
arising from defects of
insufficient title documents
shall be paid pursuant to the
law by Shouguang Chenming
Holdings after verification.
13
Party Particulars on
involved in Undertaking the
Undertaking undertaking Details of undertaking date Term performance
Shouguang (1) Shouguang Chenming 22 May 2008 During the Strictly
Chenming Holdings shall not engage, period when implemented
Holdings whether solely, jointly, or by Chenming
Company representing itself or any Holdings was
Limited, the other persons or companies, the substantial
controlling and shall not procure its shareholder of
shareholder associates (as defined in The the Company
of the Listing Rules of Hong Kong
Company Stock Exchange) to engage,
in any business which
competes with the business
of the Company and its
subsidiaries (“Chenming
Group” or “we”) directly or
indirectly, in any country
and region which our
business exists (or any part
of the world if in any form
of 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 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
14
Party Particulars on
involved in Undertaking the
Undertaking undertaking Details of undertaking date Term performance
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)
jeopardise the legal interests
of Chenming Group and its
shareholders.
Other undertakings made
to minority
shareholders of the
Company
Does the undertaking Yes
performed timely?
15
IV. Estimate of the operating results for January - June 2014
Warning 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 year on year and its explanation
□ Applicable √Not applicable
V. Registration report on reception of research investigations,
communications and interviews during the reporting period
Main topics of
Class of discussion and
Date of Place of Manner of Parties Parties information
reception reception reception accommodated accommodated provided
11 February The Company’s On-site Institution E Fund Recent
2014 conference research Management production and
room investigation Co., Ltd. operation of
the Company
and
development of
the industry
27 March 2014 The Company’s Conference call Institution First Beijing Recent
conference Investment production and
room Limited operation of
the Company
and
development of
the industry
28 March 2014 The Company’s On-site Institution Taikang Asset Recent
conference research Management production and
room investigation Company operation of
Limited the Company
and
development of
the industry
16
IV Financial statements
I. Financial statements
1. Consolidated balance sheet
Prepared by: Shandong Chenming Paper Holdings Limited
Unit: RMB
Item Closing Opening
CURRENT ASSETS:
Monetary funds 2,664,566,533.78 2,547,729,794.24
Balances with clearing companies
Loans to banks and other financial
institutions
Held-for-trading financial assets
Bills receivable 2,453,509,542.54 2,870,443,681.49
Accounts receivable 2,741,686,700.08 3,102,643,083.54
Prepayments 1,292,315,291.18 1,589,021,331.24
Insurance premium receivable
Receivables from reinsurers
Reinsurance contract reserves
Interest receivable
Dividend receivable
Other receivables 1,444,876,991.18 1,331,900,749.84
Financial assets purchased under
agreements to resell
Inventories 4,241,449,446.65 3,725,809,877.25
Non-current assets due within one
Other current assets 1,811,848,085.50 1,740,520,586.37
Total current assets 16,650,252,590.91 16,908,069,103.97
NON-CURRENT ASSETS:
Entrusted loans and advances
to customers
Available-for-sale financial assets
Held-to-maturity investments 500,000,000.00
Long-term receivables
Long-term equity investments 114,603,949.53 115,477,214.86
Investment properties 19,038,879.94 19,473,443.95
Fixed assets 24,264,099,675.82 21,181,647,488.39
Construction in progress 2,962,938,369.71 5,266,031,817.60
Construction materials 46,782,525.87 63,968,067.62
17
Item Closing Opening
Disposal of fixed assets 333,378,731.42 588,181,647.53
Consumable biological assets 1,327,911,384.93 1,317,141,123.77
Oil and gas assets
Intangible assets 1,331,285,676.62 1,365,418,002.26
Development expenditure
Goodwill 20,283,787.17 20,283,787.17
Long-term prepaid expenses 167,470,543.11 168,538,483.68
Deferred income tax assets 546,511,965.92 507,653,388.38
Other non-current assets
Total non-current assets 31,634,305,490.04 30,613,814,465.21
Total assets 48,284,558,080.95 47,521,883,569.18
CURRENT LIABILITIES:
Short-term borrowings 10,881,009,086.26 9,818,885,237.85
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 198,840,000.00 290,403,790.59
Accounts payable 2,776,093,583.82 2,695,169,927.14
Advance receipts 218,750,535.23 442,432,261.58
Assets sold under agreements
to repurchase
Handling charges and
commission payable
Staff remuneration payables 119,068,383.07 130,271,812.18
Taxes payable 114,349,006.61 130,192,936.87
Interest payable 268,757,445.94 153,189,860.42
Dividend payable
Other payables 562,418,152.44 486,836,595.89
Due to reinsurers
Insurance contract reserves
Customer brokerage deposits
Securities underwriting
brokerage deposits
Non-current liabilities due within
one year 1,153,813,900.00 1,287,804,452.66
Other current liabilities 3,928,065,388.95 3,878,735,536.52
Total current liabilities 20,221,165,482.32 19,313,922,411.70
18
Item Closing Opening
NON-CURRENT LIABILITIES:
Long-term borrowings 3,708,919,007.90 3,723,865,807.90
Bonds payable 5,770,596,786.55 5,768,418,612.73
Long-term payable 128,000,000.00 60,000,000.00
Special payable 866,694,854.09 971,805,561.39
Estimated liabilities
Deferred income tax liabilities
Other non-current liabilities 3,051,344,371.93 3,045,517,642.57
Total non-current liabilities 13,525,555,020.47 13,569,607,624.59
TOTAL LIABILITIES 33,746,720,502.79 32,883,530,036.29
OWNERS’ EQUITY (OR
SHAREHOLDERS’ EQUITY):
Paid-up capital (or share capital) 1,975,471,967.00 1,975,471,967.00
Capital reserves 6,215,724,395.86 6,204,682,028.94
Less: treasury shares 92,333,379.10 30,954,891.40
Special reserves
Surplus reserves 1,132,116,106.40 1,132,116,106.40
General risk provisions
Retained profit 4,822,912,869.72 4,741,638,941.58
Differences in foreign
currency conversion 13,319,851.27 16,934,073.59
Total equity attributable to equity
holders of the Company 14,067,211,811.15 14,039,888,226.11
Minority interests 470,625,767.01 598,465,306.78
Total owners’ equity (or
shareholders’ equity) 14,537,837,578.16 14,638,353,532.89
TOTAL LIABILITIES AND
OWNERS’ EQUITY (OR
SHAREHOLDERS’ 48,284,558,080.95 47,521,883,569.18
Legal Representative: Head in charge of Head of the financial
Chen Hongguo accounting: department:
Li Dong Liu J u n
19
2. Balance sheet of the parent company
Prepared by: Shandong Chenming Paper Holdings Limited
Unit: RMB
Item Closing balance Opening balance
CURRENT ASSETS:
Monetary funds 1,547,286,909.62 1,454,242,620.40
Held-for-trading financial assets
Bills receivable 634,479,863.22 945,832,396.01
Accounts receivable 3,947,352,842.30 3,814,654,532.05
Prepayments 633,384,208.30 762,470,888.60
Interest receivable
Dividend receivable 191,300,102.21 191,300,102.21
Other receivables 11,614,007,456.76 11,051,622,177.96
Inventories 982,271,737.09 857,030,449.25
Non-current assets due within one year 20,000,000.00 200,000,000.00
Other current assets 102,803,089.97 103,214,843.26
Total current assets 19,672,886,209.47 19,380,368,009.74
NON-CURRENT ASSETS:
Available-for-sale financial assets
Held-to-maturity investments 500,000,000.00
Long-term receivable
Long-term equity investments 8,984,627,938.68 8,863,738,003.45
Investment property 19,038,879.94 19,473,443.95
Fixed assets 5,064,568,277.02 5,170,770,619.87
Construction in progress 333,679,281.78 127,095,105.63
Construction materials 1,725,793.23 1,813,442.43
Disposal of fixed assets
Productive biological assets
Oil and gas assets
Intangible assets 305,525,599.88 308,163,298.83
Development expenses
Goodwill
Long-term prepaid expenses
Deferred income tax assets 17,159,739.53 17,082,162.53
Other non-current assets
Total non-current assets 15,226,325,510.06 14,508,136,076.69
TOTAL ASSETS 34,899,211,719.53 33,888,504,086.43
20
Item Closing balance Opening balance
CURRENT LIABILITIES:
Short-term borrowings 5,278,652,653.51 5,119,632,573.69
Held-for-trading financial liabilities
Bills payable 500,000.00 500,000.00
Accounts payable 803,959,310.42 891,996,724.44
Advance receipts 105,140,465.43 185,524,508.71
Staff remuneration payables 64,021,625.87 62,091,273.25
Taxes payable 13,077,255.66 8,949,746.01
Interest payable 268,724,805.54 150,047,305.56
Dividend payable
Other payables 1,099,032,162.52 431,217,791.18
Non-current liabilities due within one
year 346,084,000.00 343,876,000.00
Other current liabilities 3,911,939,467.95 3,856,239,467.95
Total current liabilities 11,891,131,746.90 11,050,075,390.79
NON-CURRENT LIABILITIES:
Long-term borrowings 796,776,035.94 594,568,035.94
Bonds payable 5,770,596,786.55 5,768,418,612.73
Long-term payables
Special payables
Estimated liabilities
Deferred income tax liabilities
Other non-current liabilities 2,607,744,061.93 2,607,180,511.28
Total non-current liabilities 9,175,116,884.42 8,970,167,159.95
Total liabilities 21,066,248,631.32 20,020,242,550.74
OWNERS’ EQUITY (OR
SHAREHOLDERS’ EQUITY):
Paid-up capital (or share capital) 1,975,471,967.00 1,975,471,967.00
Capital reserves 6,005,426,779.17 6,005,426,779.17
Less: treasury shares 92,333,379.10 30,954,891.40
Special reserves
Surplus reserves 1,119,926,524.49 1,119,926,524.49
General risk provisions
Retained profit 4,824,471,196.65 4,798,391,156.43
Differences in foreign currency
conversion
Total owners’ equity (or Shareholders’
equity) 13,832,963,088.21 13,868,261,535.69
TOTAL LIABILITIES AND OWNERS’
EQUITY (OR SHAREHOLDERS’
EQUITY) 34,899,211,719.53 33,888,504,086.43
Legal Representative: Head in charge of Head of the financial
Chen Hongguo accounting: department:
Li Dong Liu J u n
21
3. Consolidated income statement
Prepared by: Shandong Chenming Paper Holdings Limited
Unit: RMB
Am ounts for the Am ounts for the
Item current period prior period
I. Total operating revenue 4,078,069,314.47 4,923,810,623.61
Including: Revenue 4,078,069,314.47 4,923,810,623.61
Interest income
Earned insurance
premium
Handling charges and
commission income
II. Total operating costs 4,148,662,180.31 4,913,951,918.42
Including: Operating costs 3,344,912,892.71 4,128,552,799.42
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 12,633,196.68 17,772,499.02
Selling and distribution
expenses 225,061,937.13 258,765,041.02
General and
administrative expenses 242,648,227.81 247,016,598.02
Finance expenses 332,434,073.98 266,915,275.72
Loss on impairment of
assets -9,028,147.99 -5,070,294.78
Plus: Gain on change in fair
value (“-” denotes loss)
Investment income (“-”
denotes loss) -3,377,138.33 -61,544.44
Including: Investment
income from associates
and joint ventures -873,265.33 -61,544.44
Foreign exchange gains
(“-” denotes loss)
22
Am ounts for the Am ounts for the
Item current period prior period
III. Operating profit (“-” denotes loss) -73,970,004.17 9,797,160.75
Plus: Non-operating income 176,033,614.08 75,195,949.69
Less: Non-operating expenses 7,932,048.84 8,033,514.35
Including: Loss on
disposal of non-current
assets 7,846,801.90 6,384,949.31
IV. Total profit (“-” denotes total loss) 94,131,561.07 76,959,596.09
Less: Income tax expenses 21,288,605.27 12,445,693.81
V. Net profit (“-” denotes net loss) 72,842,955.80 64,513,902.28
Including: Net profit achieved by the
acquiree before business
combination
Net profit attributable to
shareholders of the Company 81,273,928.14 71,411,642.71
Minority interests -8,430,972.34 -6,897,740.43
VI. Earnings per share: — —
(I) Basic earnings per share 0.04 0.03
(II) Diluted earnings per share 0.04 0.03
VII. Other comprehensive income -3,614,222.32 388,992.69
VIII.Total comprehensive income 69,228,733.48 64,902,894.97
Total comprehensive income
attributable to shareholders of the
Company 77,659,705.82 71,800,635.40
Total comprehensive income
attributable to minority interests -8,430,972.34 -6,897,740.43
Legal Representative: Head in charge of Head of the financial
Chen Hongguo accounting: department:
Li Dong Liu J u n
23
4. Income statement of the parent company
Prepared by: Shandong Chenming Paper Holdings Limited
Unit: RMB
Am ounts for the Am ounts for the
Item current period prior period
I. Revenue 1,903,584,305.09 2,501,866,894.08
Less: Operating costs 1,513,584,658.28 2,074,927,777.28
Business taxes and surcharges 7,907,580.86 10,986,327.88
Selling and distribution
expenses 64,359,201.62 73,221,035.04
General and administrative
expenses 129,561,706.59 138,614,841.83
Finance expenses 206,460,474.81 146,183,864.33
Loss on impairment of assets 297,314.42 2,114,559.70
Plus: Gain on change in fair value
(“-” denotes loss)
Investment income (“-”
denotes loss) 11,097,565.47 38,468,626.91
Including: Investment income
from associates and joint
ventures 343.23 -61,544.44
II. Operating profit (“-” denotes loss) -7,489,066.02 94,287,114.93
Plus: Non-operating income 32,419,650.20 21,413,134.01
Less: Non-operating expenses 181,032.31 19,104.24
Including: Loss on disposal of
non-current assets
III. Total profit (“-” denotes total loss) 24,749,551.87 115,681,144.70
Less: Income tax expenses -1,330,488.35 7,767,162.94
IV. Net profit (“-” denotes net loss) 26,080,040.22 107,913,981.76
V.Earnings per share: — —
(I) Basic earnings per share 0.01 0.05
(II) Diluted earnings per share 0.01 0.05
VI. Other comprehensive income
VII. Total comprehensive income 26,080,040.22 107,913,981.76
Legal Representative: Head in charge of Head of the financial
Chen Hongguo accounting: department:
Li Dong Liu J u n
24
5. Consolidated cash flow statement
Prepared by: Shandong Chenming Paper Holdings Limited
Unit: RMB
Am ounts for the Am ounts for the
Item current period prior period
I. Cash flows from operating activities:
Cash received from sales of goods
and rendering of services 3,254,244,610.20 3,745,148,352.92
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 6,507,666.33
Cash received relating to other
operating activities 54,267,362.88 135,101,295.02
Subtotal of cash inflows from operating
activities 3,308,511,973.08 3,886,757,314.27
Cash paid for goods and services 2,198,868,884.22 3,025,224,912.12
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
25
Am ounts for the Am ounts for the
Item current period prior period
Cash paid for interest, handling charges
and commission
Cash paid for policyholder dividend
Cash paid to and for employees 210,850,810.31 211,241,085.50
Payments of taxes and surcharges 212,537,359.84 243,282,874.32
Cash paid relating to other operating
activities 54,410,792.86 126,220,755.95
Subtotal of cash outflows from
operating activities 2,676,667,847.23 3,605,969,627.89
Net cash flows from operating
activities 631,844,125.85 280,787,686.38
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 and
other long-term assets 107,087,245.8 87,447.58
Net cash received from disposal of
subsidiaries and other business
units 38,097,000.00
Cash received relating to other
investment activities 230,778,041.00
Subtotal of cash inflows from investment
activities 375,962,286.87 87,447.58
Cash paid for purchase of fixed assets,
intangible assets and other long-term
assets 596,984,126.16 236,014,004.30
Cash paid on investments
Net increase in pledged loans
Net cash paid for acquisition of
subsidiaries and other business units
Cash paid relating to other investment
activities 501,158,788.59
Subtotal of cash outflows from
investment activities 1,098,142,914.75 236,014,004.30
Net cash flows from investment activities -722,180,627.88 -235,926,556.72
26
Am ounts for the Am ounts for the
Item current period prior period
III. Cash flows from financial activities:
Cash received from capital
contribution 66,000,000.00
Including: cash received from
minority interest contribution to
subsidiaries
Cash received from borrowings 4,163,220,000.91 5,225,613,469.09
Cash received from bond issue
Cash received relating to other
financial activities 117,626,757.04
Subtotal of cash inflows from
financial activities 4,280,846,757.95 5,291,613,469.09
Cash repayments of borrowings 3,592,001,541.79 4,756,587,751.21
Cash paid for dividend and profit
distribution or interest payment 271,198,731.49 126,163,715.81
Including: dividend and profit paid
to minority interests by
subsidiaries
Cash paid relating to other financial
activities 192,400,361.00 1,686,067,417.80
Subtotal of cash outflows from financial
activities 4,055,600,634.28 6,568,818,884.82
Net cash flows from financial activities 225,246,123.67 -1,277,205,415.73
IV. Effect of foreign exchange rate
changes on cash and cash
equivalents -8,617,565.75 -1,856,368.64
V. Net increase in cash and cash
equivalents 126,292,055.89 -1,234,200,654.71
Plus: Balance of cash and cash
equivalents as at the
beginning of the period 726,532,928.95 2,343,550,185.45
VI. Balance of cash and cash equivalents
as at the end of the period 852,824,984.84 1,109,349,530.74
Legal Representative: Head in charge of Head of the financial
Chen Hongguo accounting: department:
Li Dong Liu J u n
27
6. Cash flow statement of the parent company
Prepared by: Shandong Chenming Paper Holdings Limited
Unit: RMB
Am ounts for the Am ounts for the
Item current period prior period
I. Cash flows from operating activities:
Cash received from sales of goods
and rendering of services 1,554,908,976.13 2,278,102,776.22
Tax rebates received
Cash received relating to other
operating activities 42,325,614.38 34,113,690.48
Subtotal of cash inflows from operating
activities 1,597,234,590.51 2,312,216,466.70
Cash paid for goods and services 1,742,167,010.96 1,341,433,481.16
Cash paid to and for employees 101,860,522.50 73,609,876.19
Payments of taxes and surcharges 96,035,474.74 128,754,932.37
Cash paid relating to other operating
activities -643,175,490.68 1,493,746,466.45
Subtotal of cash outflows from operating
activities 1,296,887,517.52 3,037,544,756.17
Net cash outflows from operating
activities 300,347,072.99 -725,328,289.47
II. Cash flows from investment
activities:
Cash received from investments 280,000,000.00
Cash received from investment
income 1,375,000.00 20,612,500.00
Net cash received from disposal of
fixed assets, intangible assets and
other long-term assets 120.00 86,922.24
Net cash received from disposal of
subsidiaries and other business
units
Cash received relating to other
investment activities
Subtotal of cash inflows from investment
activities 281,375,120.00 20,699,422.24
Cash paid for purchase of fixed
assets, intangible assets and other
long-term assets 154,880,130.57 10,516,416.19
Cash paid on investments 220,889,592.00 78,083,235.00
28
Am ounts for the Am ounts for the
Item current period prior period
Net cash paid for acquisition of
subsidiaries and other business
units
Cash paid relating to other
investment activities 500,000,000.00
Subtotal of cash outflows from
investment activities 875,769,722.57 88,599,651.19
Net cash flows from investment
activities -594,394,602.57 -67,900,228.95
III. Cash flows from financial activities:
Cash received from capital
contribution
Cash received from borrowings 2,966,288,013.90 3,821,613,974.44
Cash received from bond issue
Cash received relating to other
financial activities
Subtotal of cash inflows from
financial activities 2,966,288,013.90 3,821,613,974.44
Cash repayments of borrowings 2,497,163,624.96 2,654,354,114.96
Cash paid for dividend and profit
distribution or interest payment 78,238,444.72 104,193,154.63
Cash paid relating to other financial
activities 108,171,440.69 1,827,433,967.31
Subtotal of cash outflows from financial
activities 2,683,573,510.37 4,585,981,236.90
Net cash flows from financial activities 282,714,503.53 -764,367,262.46
IV. Effect of foreign exchange rate
changes on cash and cash
equivalents -3,794,125.42 1,635,633.50
V. Net increase in cash and cash
equivalents -15,127,151.47 -1,555,960,147.38
Plus: Balance of cash and cash
equivalents as at the
beginning of the period 64,392,029.09 1,786,622,854.08
VI. Balance of cash and cash equivalents
as at the end of the period 49,264,877.62 230,662,706.70
Legal Representative: Head in charge of Head of the financial
Chen Hongguo accounting: department:
Li Dong Liu J u n
29
II. Audit report
Whether or not the first quarter report is audited
□ Yes √No
The first quarter report of the Company is unaudited.
SHANDONG CHENMING PAPER HOLDINGS LIMITED
29 April 2014
30