C&S Paper Co., Ltd. Semi-annual Report 2021
C&S Paper Co., Ltd.
Semi-Annual Report 2021
August 2021
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C&S Paper Co., Ltd. Semi-annual Report 2021
Section I Important Notice, Contents and Definitions
The Board of Directors and the Board of Supervisors of the Company and its
directors, supervisors and senior management warrant that the information
contained in this semi-annual report is true, accurate and complete without any
false and misleading statements or material omissions, and severally and jointly
accept legal liability thereof.
Liu Peng, the person in charge of the Company, Dong Ye, the person in charge of
accounting of the Company, and Xu Xianjing, the person in charge of the
accounting department of the Company, have declared that they warrant the
truthfulness, accuracy and completeness of the financial statements set out in
this semi-annual report.
All directors of the Company attended the Board meeting on which this report
was reviewed.
Discrepancies in the sum of decimals in this report are caused by rounding.
The forward-looking statements in this report, including future plans and
development strategies, do not constitute substantive commitments of the
Company to investors. Investors should be aware of the investment risks.
The Company has described potential risk factors and countermeasures that
may exist in its operations in detail in Section III Discussion and Analysis of the
Management and Section X Risks Faced by the Company and Countermeasures.
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C&S Paper Co., Ltd. Semi-annual Report 2021
Investors are advised to pay attention to the relevant contents.
The Company plans not to distribute cash dividend, issue bonus share, or
transfer capital reserve into share capital.
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C&S Paper Co., Ltd. Semi-annual Report 2021
Contents
Section I Important Notice, Contents and Definitions .............................................................................................................................1
Section II Company Profile and Key Financial Indicators ......................................................................................................................6
Section III Discussion and Analysis of the Management .........................................................................................................................9
Section IV Corporate Governance .........................................................................................................................................................27
Section V Environmental and Social Responsibilities ...........................................................................................................................31
Section VI Significant Events ................................................................................................................................................................40
Section VII Changes in Shareholding and Information of Shareholders ...............................................................................................60
Section VIII Particulars of Preference Shares........................................................................................................................................69
Section IX Corporate Bonds ..................................................................................................................................................................70
Section X Financial Report....................................................................................................................................................................71
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C&S Paper Co., Ltd. Semi-annual Report 2021
Documents Available for Inspection
1. The Semi-annual Report 2021 affixed with the signature of Mr. Liu Peng, the
Company’s legal representative
2. Financial statements affixed with the signatures and stamps of Mr. Liu Peng, the
legal representative of the Company, Mr. Dong Ye, person in charge of accounting,
and Ms. Xu Xianjing, person in charge of accounting department of the Company
3. All original copies of the Company’s documents and the original drafts of the
Company’s announcements as disclosed in the newspaper designated by the CSRC
during the reporting period
4. Place for document inspection: Office of the Board of Directors
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C&S Paper Co., Ltd. Semi-annual Report 2021
Definitions
Term Definition
The Company, Company, C&S C&S Paper Co., Ltd.
Zhongshun Group Guangdong Zhongshun Paper Group Co., Ltd.
Chung Shun Co. Chung Shun Co., a Hong Kong-based company
Zhongshan Trading Zhongshan Zhongshun Trading Co., Ltd.
Zhong Shun International Zhong Shun International Co., Ltd., a Hong Kong-based company
C&S Hong Kong C&S Hong Kong Co., Ltd., a Hong Kong-based company
Beijing Trading Beijing C&S Paper Co., Ltd.
Xiaogan Trading Xiaogan C&S Trading Co., Ltd.
Chengdu Trading Chengdu Zhongshun Paper Co., Ltd.
Hangzhou Trading Hangzhou Jie Rou Trading Co., Ltd.
Shanghai Trading Shanghai Huicong Paper Co., Ltd.
C&S (Sichuan) Paper Co., Ltd., formerly known as Chengdu Tiantian
Sichuan C&S
Paper Co., Ltd.
Jiangmen C&S Jiangmen Zhongshun Paper Co., Ltd.
Zhejiang C&S Zhejiang Zhongshun Paper Co., Ltd.
C&S (Hubei) Paper Co., Ltd., formerly known as Hubei Zhongshun
Hubei C&S
Hongchang Paper Co., Ltd.
Yunfu C&S C&S (Yunfu) Paper Co., Ltd.
Yunfu Hengtai Trading Co., Ltd., formerly known as C&S (Yunfu)
Yunfu Trading
Trading Co., Ltd.
Tangshan C&S, Tangshan subsidiary C&S Paper Co., Ltd. Tangshan Branch
C&S (Zhongshan) Paper Co., Ltd., formerly known as Zhongshan Tongfu
Zhongshan Paper
Trade Co., Ltd.
Macao C&S C&S (Macao) Co., Ltd.
Dazhou C&S C&S (Dazhou) Paper Co., Ltd.
Sun C&S Sun Daily Necessities Co., Ltd.
Dolemi Dolemi Sanitary Products Co., Ltd.
Jiangsu C&S C&S (Jiangsu) Paper Co., Ltd.
Yunnan Dolemi Yunnan Dolemi Trading Co., Ltd.
Luzhou Dolemi Luzhou Dolemi Sanitary Products Co., Ltd.
Mianyang Dolemi Mianyang Dolemi Sanitary Products Co., Ltd.
Mazars Mazars CPA Limited (LLP)
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C&S Paper Co., Ltd. Semi-annual Report 2021
Section II Company Profile and Key Financial Indicators
I. Company Profile
Stock name C&S Stock code 002511
Stock exchange on which the
Shenzhen Stock Exchange
shares are listed
Chinese name of the Company 中顺洁柔纸业股份有限公司
Abbreviation of Chinese name of
中顺洁柔
the Company (if any)
English name of the Company (if
C&S Paper Co., Ltd.
any)
Abbreviation of English name of
C&S
the company (if any)
Legal representative of the
Liu Peng
Company
II. Contact Persons and Contact Methods
Sectary to the Board Representative of securities affairs
Name Zhang Haijun Liang Yao
No. 136 Caihong Avenue, West District, No. 136 Caihong Avenue, West District,
Address
Zhongshan City Zhongshan City
Tel 0760-87883333 0760-87883333
Fax 0760-23886886 0760-23886886
Email Zhhaijun003@163.com dsh@zsjr.com
III. Other Information
1. Contact information of the Company
Whether there are changes in the Company’s registered address, office address and postal code, website, and email
address during the reporting period
√ Applicable □ Not applicable
Registered address No. 1 Longcheng Road, Dongsheng Town, Zhongshan City
Postal code of registered address 528414
Office address No. 136 Caihong Avenue, West District, Zhongshan City
Postal code of office address 528401
Company website https://www.zsjr.com/
Email dsh@zsjr.com
Disclosure date on the website on which the
temporary announcements are publicized (if April 29, 2021
any)
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C&S Paper Co., Ltd. Semi-annual Report 2021
Search index on the website on which the Announcement on Resolutions of the 4th Meeting of the Fifth Session of the
temporary announcements are publicized (if Board of Directors, Articles of Association of the Company (April 2021); for
any) details, please refer to http://www.cninfo.com.cn
2. Information disclosure and location for inspection of documents
Where there are changes in information disclosure and location for inspection of documents during the reporting
period
□ Applicable √ Not applicable
There are no changes in the name of the newspaper selected by the Company for information disclosure, website
designated by CSRC for publicizing the semi-annual report, and the location for inspection of the semi-annual
report during the reporting period. Please refer to the Annual Report 2020 for details.
IV. Main Accounting Data and Financial Indicators
Whether the Company needs to perform retrospective adjustment or restatement of accounting data for previous
years
□ Yes √ No
Same period of previous Changes over same period of
Current period
year previous year
Operating income (RMB) 4,247,641,836.38 3,616,201,399.80 17.46%
Net profit attributable to shareholders of
407,161,317.15 452,699,484.61 -10.06%
the listed company (RMB)
Net profit attributable to shareholders of
the listed company after deducting non- 398,988,234.69 446,535,737.96 -10.65%
recurring profit and loss (RMB)
Net cash flow from operating activities
737,865,788.19 504,558,588.33 46.24%
(RMB)
Basic earnings per share (RMB/share) 0.3140 0.3519 -10.77%
Diluted earnings per share (RMB/share) 0.3109 0.3462 -10.20%
Weighted average return on net assets 7.98% 10.46% -2.48%
Changes over end of previous
End of current period End of previous year
year
Total assets (RMB) 7,138,935,102.92 7,478,439,747.77 -4.54%
Net assets attributable to shareholders of
4,851,858,577.42 5,042,146,076.42 -3.77%
the listed company (RMB)
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C&S Paper Co., Ltd. Semi-annual Report 2021
V. Difference in Accounting Data under Domestic and International Accounting Standards
1. Net profit and net asset differences under International Financial Reporting Standards (IFRS) and
Chinese Accounting Standards (CAS)
□ Applicable √ Not applicable
No such differences for the reporting period
2. Net profit and net asset differences under foreign accounting standards and Chinese Accounting
Standards (CAS)
□ Applicable √ Not applicable
No such differences for the reporting period
VI. Non-recurring Items and Amounts
√ Applicable □ Not applicable
Unit: RMB
Item Amount Description
Profits/losses from the disposal of non-current asset (including
-887,044.27
the write-off that accrued for impairment of assets)
Governmental grants reckoned into current profits/losses (not
including grants enjoyed in quota or ration according to national 10,556,600.31
standards, which are closely relevant to the company’s business)
Returns on principal-protected
Profits/losses from assets entrusted to others for investment or wealth management products at
358,473.15
management maturity and reverse repo of
treasury bonds
Other non-operating income and expenses except for the
-187,907.30
aforementioned items
Less: Influence of income tax 1,667,039.43
Total 8,173,082.46 --
Reason shall be provided if the company defines non-recurring profit and loss items as defined or listed in the No.
1 Explanatory Announcement on Information Disclosure for Companies Offering their Securities to the Public—
Non-recurring Profit and Loss as recurring profit and loss items.
□ Applicable √ Not applicable
The Company did not define any non-recurring profit and loss items defined or listed in the No. 1 Explanatory
Announcement on Information Disclosure of Companies Offering Securities to the Public—Non-recurring Profit
and Loss as recurring profit and loss items during the reporting period.
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C&S Paper Co., Ltd. Semi-annual Report 2021
Section III Discussion and Analysis of the Management
I. Principal Businesses of the Company during the Reporting Period
Mr. Deng Yingzhong, founder of the Company, initiated his entrepreneurial process in 1978. Starting from
intensive paper processing, the Company has developed into a leading household paper enterprise integrating
R&D, production and sales after forty-three years of striving. With an adherence to its corporate values of
“products need brands, enterprises need brands, and people need brands”, the Company has extended its products
from household paper to cross-category household daily necessities including cotton series products, sanitary
wipes, baby diapers, etc.
Currently, the Company features three major brands, namely, Jie Rou, Sun, and Dolemi. Main products include
paper rolls, coreless rolls, facial tissues, tissue handkerchiefs, wipes, personal care products, baby diapers, cotton
tissues, etc. Product series involve Face series, Lotion series, Natural Wood series, Antibacterial Paper series, Jin
Zun series, wipes, Sun series, Dolemi series, OKBEBE series, and Cotton Tissue series. Specifics are given in the
following:
1. Household paper (Jie Rou brand + Sun brand)
Face Series: Face wettable facial tissue is a feature product of the Company. Through constant quality upgrading,
the newly developed four-layer thick facial tissues remain pliable and thick even when they are wet. One piece of
this facial tissue is as thick as two pieces of average tissues, which optimizes the products’ user experience and
fashion sense. In 2020, in order to better reflect the brand’s image and high-end style, the Company incorporated
oil painting elements into its packaging and launched Face oil painting series products, which is called the
“artwork of paper tissues”.
Lotion Series: Lotion water retention facial tissues are characterized by the skin-friendly lotion and moisturizing
factor. They feel soft and smooth, thanks to the water retention factors. This product is especially suitable for
delicate skin and applicable to mothers and infants, people with nasal allergy, and people wearing makeup.
Natural Wood Series: The Company launched the first noble yellow tissues (with low whiteness), “Jie Rou
Natural Wood Series” in 2017, based on the consumption concepts of health and safety. Its soft and pliable texture
is attributable to 100% imported raw wood pulp. Quality of the whole series is superb.
Antibacterial Series: With the advent of the post-pandemic era in China, the Company introduced the antibacterial
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C&S Paper Co., Ltd. Semi-annual Report 2021
series products in early 2021 in line with changes in consumption habits of consumers. The products contain
antibacterial factors and have been proved with experiments to effectively reduce the growth of more than 99% of
bacteria on paper tissues. They can effectively inhibit bacteria such as E. coli and staphylococcus aureus, thereby
protecting the health of consumers.
Jin Zun Series: Made from 100% imported raw wood pulp, Jin Zun products are thick, pliable, and cost-effective.
Wipes: Wipe products of the Company are diversified, including mother and baby wipes, disinfection wipes,
personal care wipes, kitchen wipes, and pure water wipes, which can meet the needs of consumers in different
scenarios.
Sun Series: The Company launched the new brand Sun in 2019 in conjunction with the 300,000-ton bamboo-pulp-
paper integration project in order to accelerate the coverage of high-, mid- and low-end household paper markets
in China and satisfy consumption needs at different levels. This initiated the Company’s “dual brand” business
strategy. Sun is positioned to be a highly cost-effective product that has good quality yet lower prices. It is the key
to raise the market share of the Company in the future.
2. Personal care products (Dolemi brand)
Dolemi Series: In 2019, the Company launched a new personal care brand, Dolemi, to cater for upgrading
consumption. The surface of Dolemi pads is made from natural cotton. The products feature two-way air
circulation and are elastic, soft, and fit. Thanks to the good air circulation, consumers will feel at ease. They
enable women pursuing better quality of life to experience “thin pads and get rid of side leakage”.
OKBEBE Series: This care brand for newborn babies was rolled out in early 2021. Products include baby diapers
and pull-up pants. With medical level high standards, the products are skin-friendly, breathable, dry and easy to
absorb. They are dedicated to providing babies with safer and more comfortable growth experience, having passed
the surveillance on six product performance indicators including allergenic microbial inspection and production
environment bacteria.
3. Quality health products
Cotton Tissue Series: In 2018, the Company stepped out of the household paper field and introduced the “Cotton
Tissue“ products. The products feature 100% fresh cotton, complete physical processes, and unbleached. As being
natural, healthy, soft, skin-friendly, and dry-wet dual use, they can be used for personal cleaning and care as cotton
pads and face towels, especially by infants and women.
Medical surgical masks: In response to the government’s call, the Company quickly initiated medical mask
production and rolled out medical surgical mask products. The products are characterized by “high efficiency
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C&S Paper Co., Ltd. Semi-annual Report 2021
filtration, low breathing resistance, and comfortable wearing”, and have passed the EU CE and US FDA
certifications. Third-party laboratory testing from US, EU and Japan proves the products to have reached the
highest quality standards of their kind.
Other quality health products: In line with the Company’s strategic planning and market needs, the Company
successively launched personalized products that are fit with consumer needs since 2020, including makeup
removal wipes, feminine care wipes, alcohol disinfectant wipes, mouthwashes, disinfectant hand sanitizers, face
wash towels, disposable sweat-absorbent wipes, insoles, etc. This enables the Company to form a diversified
development pattern on the basis of pursuing high quality and individualization.
Currently, the competition in China’s household paper industry is still fierce and industry concentration is
increasing. With strengthened awareness on the concept of healthy living, consumers pay increasing attention to
brands. Product quality is still a prominent concern in the industry. Amid all these, the Company has become one
of the representative brands of high-end household paper in the market through continuous brand building and
quality assurance, and robust production capacity layout and channel expansion. It is ranked among the first
echelon in the household paper industry and is well recognized by consumers and capital markets. In addition,
with an adherence to the value concept of “Only Care About You”, the Company continues to tap consumer needs
and constantly upgrades and optimizes products with leverage on its strong R&D and innovation capabilities. The
Company is committed to providing consumers with products of better quality, more comfort, and more tailored to
their individual needs. The Company aims to achieve national product coverage which is underpinned by
continuously improved product reputation among consumes and strengthened and consolidated brand awareness.
II. Analysis of Core Competitiveness
1. Belonging to the first echelon of the domestic household paper industry
The Company is a top-performing enterprise in the first echelon of the domestic household paper industry. Its
products are sold at home and abroad including Southeast Asia, the Middle East, Europe and United States.
2. Constantly optimized product structure
The Company boasts three major brands, namely, Jie Rou, Sun, and Dolemi. Main products include paper rolls,
coreless rolls, facial tissues, tissue handkerchiefs, wipes, personal care products, baby diapers, cotton tissues, etc.
The Company continuously optimizes its product structure and raises the sales proportion of high-end products,
high-gross profit products and non-roll categories. In addition, it has strengthened the sales of major series like
Face, Lotion, and Natural Wood, formulated distribution standards for each major channel, raised the market share
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C&S Paper Co., Ltd. Semi-annual Report 2021
in each channel, and continuously improved the gross profit and profitability of products.
3. Stable and effective management team
The R&D, production, procurement, sales, quality control, and operation teams have successively introduced
excellent professionals since 2014. At present, the Company boasts the most outstanding R&D, production and
sales teams in the industry, and has gradually established the professional manager management system. Excellent
and professional management teams have effectively reinforced and improved the Company’s new product R&D,
product quality and marketing management. The management team of the Company has formulated long-term and
strategic plans in line with actual situation of the Company, industry development level, and market demands.
Moreover, the management team is capable of making reasonable decisions on operation management issues with
relation to R&D, production, marketing, investment, and financing, and effectively implementing such decisions.
The excellent management team fundamentally guarantees the Company’s competitiveness and sustainable
development in the future.
4. Nationwide marketing network
The Company has been building and improving its marketing networks based on its keen and strategic insights
and reasonable layout. The Company has enhanced its profitability by expanding its channels from a single dealer
channel in 2015 to six channels at present, namely, GT (general trade channels), KA (key account channels), AFH
(away from home channels), EC (e-commerce channels), RC (new retail channels), and SC (maternal and infant
channels). Its current marketing network covers most of the prefecture-level (and county-level) cities. Products are
directly sold to counties and then distributed to towns. This helps achieve segmented and flat market operation
and expand the dealer network.
Furthermore, while ensuring the smooth operation of other channels, the Company has established a professional
e-commerce operation team, devoted more resources to e-commerce platforms, built and improved the
corresponding supply chain system, and intensified its routine operation management. At present, it has reached
cooperation with renowned platforms such as Tmall, JD, and Pinduoduo. In addition, it has developed an AFH
service team for AFH channels and customer bases to match the growing AFH market. Attributable to a robust
sales network plus quality and diversified products, the Company is able to constantly consolidate its market basis,
improve consumer experience, and enhance brand reputation, which can help achieve sustainable and stable
growth in the future.
5. Nationwide layout of production bases
The Company has developed a production layout covering East China, South China, West China, North China,
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C&S Paper Co., Ltd. Semi-annual Report 2021
and Central China, through its subsidiaries including Jiangmen C&S, Yunfu C&S, Sichuan C&S, Zhejiang C&S,
Hubei C&S, and Tangshan Branch. Thanks to the nationwide layout of production bases, the Company has
narrowed the distance to customers, reduced transportation costs, and enhanced transportation efficiency.
6. Product quality at an international level
The Company has always regarded product quality as its lifeline of survival and development ever since its
incorporation. First-class quality derives from first-class raw materials. Raw materials of the Company have
passed the ISO quality management system certification. Besides strict feed inspection procedures, it has
introduced HACCP food hygiene and safety management system to control the hygiene and quality of products
from the source. Moreover, its products have passed ISO9001 quality management system certification which is
the strictest detecting system for product quality. The Company has observed internationally-advanced quality
management system standards and utilized advanced processes, formulas, and control procedures in production to
ensure each technical performance indicator.
7. Good R&D capabilities
The Company is equipped with a complete product development system and the subordinate R&D department
boasts strong independent R&D capabilities and excellent product formula technologies. In recent years, the
Company has continuously upgraded and optimized its products, in a bid to provide consumers with products of
better quality, more comfort, and more aligned with their individual needs. Products of the Company have
extended from household paper to cross-category household daily necessities including cotton series products,
sanitary wipes, baby diapers, etc. The Company’s speed of bringing forth new products is at the forefront of the
industry.
8. First-class production equipment
The Company drives development via technology and has introduced cutting-edge papermaking and processing
equipment. Advanced technology and highly automatic equipment have strengthened the Company’s efficiency,
further satisfied the ever-growing market demands, and served as an unstoppable driving force to development.
9. Outstanding environmental protection awareness and technology
Along with the deepening of industrialization, the concept of environmental protection has been deeply rooted
among the people. The Company has adhered to the concept of “seeking green benefits and fulfilling corporate
social responsibilities”, and utilized advanced environmental protection technologies to pursue its objective of
environmental protection. Its waste water and gas emissions are superior to the national standards and industry-
leading.
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C&S Paper Co., Ltd. Semi-annual Report 2021
III. Analysis of Principal Businesses
Please refer to relevant contents in “I. Principal Businesses of the Company during the Reporting Period”.
YoY changes in major financial data
Unit: RMB
Same period of
Current period YoY changes Reason of change
previous year
Operating income 4,247,641,836.38 3,616,201,399.80 17.46%
An increase of RMB630,837,248.05 or
32.66% was recorded in the reporting
period over the same period of 2020,
mainly owing to 1) increase in operating
Operating cost 2,562,244,166.21 1,931,406,918.16 32.66%
income; and 2) adjusting transportation
expenses of the selling expenses to
operating cost as per the New Revenue
Standards during the reporting period.
Selling expenses 915,478,651.72 848,071,082.60 7.95%
Administrative
165,200,078.38 185,701,854.01 -11.04%
expenses
A reduction of RMB781,141.81 or
76.43% was witnessed in the reporting
period compared with the same period of
Finance expenses -1,803,144.04 -1,022,002.23 -76.43%
2020, mainly due to the increase in bank
interest income during the reporting
period..
Income tax
81,099,520.72 85,783,253.92 -5.46%
expenses
R&D investment 97,414,812.32 90,860,828.24 7.21%
Net cash flow from operating activities:
This item recorded an increase of
Net cash flow RMB233,307,199.86 or 46.24% in the
from operating 737,865,788.19 504,558,588.33 46.24% reporting period compared with the same
activities period of 2020, mainly due to the
increase in sales revenue during the
reporting period.
Net cash flow
from investing -267,293,095.91 -241,861,919.70 -10.51%
activities
Net cash flow from financing activities:
This item recorded a decrease of
RMB769,812,015.76 or 1680.24% in the
Net cash flow reporting period compared with the same
from financing -815,627,674.59 -45,815,658.83 -1680.24% period of 2020, mainly due to the
activities decrease in cash received from
borrowings and the payment of
repurchased shares during the reporting
period.
Net increase in
cash and cash -348,809,933.39 220,436,993.67 -258.24%
equivalents
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C&S Paper Co., Ltd. Semi-annual Report 2021
Whether there are significant changes in the profit composition or source of profits of the Company during the
reporting period
□ Applicable √ Not applicable
There were no significant changes in the profit composition or source of profits of the Company during the
reporting period.
Composition of operating income
Unit: RMB
Current period Same period of previous year
Proportion in Proportion in YoY changes
Amount Amount
operating income operating income
Total operating
4,247,641,836.38 100% 3,616,201,399.80 100% 17.46%
income
By industry
Household paper 4,082,881,792.19 96.12% 3,533,490,254.91 97.71% 15.55%
Personal care 40,295,818.30 0.95% 67,214,587.03 1.86% -40.05%
Others 124,464,225.89 2.93% 15,496,557.86 0.43% 703.17%
By product
Finished products 4,116,080,985.46 96.90% 3,595,014,915.99 99.41% 14.49%
Semi-finished
7,096,625.03 0.17% 5,689,925.95 0.16% 24.72%
products
Others 124,464,225.89 2.93% 15,496,557.86 0.43% 703.17%
By region
Domestic 4,149,892,689.00 97.70% 3,522,252,149.36 97.40% 17.82%
Overseas 97,749,147.38 2.30% 93,949,250.44 2.60% 4.04%
Industries, products, or regions that accounted for over 10% of the Company’s operating income or operating
profit
√ Applicable □ Not applicable
Unit: RMB
YoY changes of
Gross profit YoY changes of YoY changes of
Operating income Operating cost operating gross
margin operating income operating cost
profit margin
By industry
Household paper 4,082,881,792.19 2,438,970,899.44 40.26% 15.55% 28.26% -5.93%
By product
Finished products 4,116,080,985.46 2,456,914,117.77 40.31% 14.49% 28.40% -6.46%
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C&S Paper Co., Ltd. Semi-annual Report 2021
By region
Domestic 4,149,892,689.00 2,505,260,432.09 39.63% 17.82% 33.05% -6.91%
Where the statistical standards for the Company’s principal business data were adjusted in the reporting period,
whether principal business data of the Company in the recent period were adjusted as per statistical standards at
the end of the reporting period
□ Applicable √ Not applicable
Reasons for YoY changes of relevant data over 30%
□ Applicable √ Not applicable
IV. Analysis of Non-principal Businesses
√ Applicable □ Not applicable
Unit: RMB
Proportion in total
Amount Explanation of reason Is it consistently applied?
profit
Returns on principal-
protected wealth
Investment income 358,473.15 0.07% management products at No
maturity and reverse repo of
treasury bonds
Provision for impairment of
Asset impairment -2,753,828.11 -0.56% No
inventories
Government grants, income
Non-operating
1,708,366.54 0.35% from fine and compensation, No
income
and others
Non-operating External donations and
3,638,183.86 0.75% No
expense others
V. Analysis of Assets and Liabilities
1. Significant changes in the composition of assets
Unit: RMB
End of current period End of previous year
Proportion Proportio
Proportion in n changes Explanation of significant changes
Amount in total Amount
total assets
assets
1,125,196,199.
Monetary funds 788,702,136.99 11.05% 15.05% -4.00%
56
Accounts 1,051,423,939.
933,313,137.98 13.07% 14.06% -0.99%
receivable 59
1,661,274,495.
Inventory 1,624,309,444.82 22.75% 22.21% 0.54%
32
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C&S Paper Co., Ltd. Semi-annual Report 2021
Investment
33,856,923.84 0.47% 34,575,365.94 0.46% 0.01%
property
2,792,587,302.
Fixed assets 3,182,792,165.52 44.58% 37.34% 7.24%
21
Construction work in progress: This
item recorded a decrease of
RMB220,370,089.26 or 79.87% in the
Construction reporting period compared with the end
work in 55,534,528.69 0.78% 275,904,617.95 3.69% -2.91% of 2020, mainly owing to the fact that
progress certain construction work in progress
reached the usable state and were
thereby transferred to fixed assets
during the reporting period.
Right-of-use assets: This item recorded
an increase of RMB11,151,372.57 or
100.00% in the reporting period
Right-of-use compared with the end of 2020, mainly
11,151,372.57 0.16% 0.16%
assets owing to the fact that leased assets
were confirmed as right-of-use assets
upon the adoption of the new lease
standards during the reporting period.
Short-term borrowing: This item
recorded a decrease of
RMB142,942,941.34 or 100.00% in the
Short-term
142,942,941.34 1.91% -1.91% reporting period compared with the end
borrowing
of 2020, mainly owing to the decrease
in short-term loans from banks during
the reporting period.
Contract
103,501,369.49 1.45% 137,333,617.40 1.84% -0.39%
liabilities
Lease liabilities: This item recorded an
increase of RMB5,526,106.56 or
100.00% in the reporting period
compared with the end of 2020, mainly
Lease liabilities 5,526,106.56 0.08% 0.08%
owing to the confirmation of lease
liabilities upon the adoption of the new
lease standards during the reporting
period.
2. Main overseas assets
□ Applicable √ Not applicable
3. Assets and liabilities measured at fair value
□ Applicable √ Not applicable
4. Restriction of asset rights as at the end of the reporting period
Item Book value at the end of the period (RMB) Reason for restriction
Monetary funds 87,477,934.66 Security deposits for issuing letter of credit and
17
C&S Paper Co., Ltd. Semi-annual Report 2021
notes
Total 87,477,934.66
VI. Analysis of Investment
1. Overview
√ Applicable □ Not applicable
Investment amount during the reporting Investment amount of previous year
Changes
period (RMB) (RMB)
328,193,755.53 401,314,982.57 -18.22%
2. Major equity investment during the reporting period
□ Applicable √ Not applicable
3. Major non-equity investment during the reporting period
□ Applicable √ Not applicable
4. Financial asset investment
(1) Security investment
□ Applicable √ Not applicable
The Company did not invest in securities during the reporting period.
(2) Derivative investment
□ Applicable √ Not applicable
The Company did not invest in derivatives during the reporting period.
VII. Major Asset and Equity Sales
1. Sales of major assets
□ Applicable √ Not applicable
The Company did not sell major assets during the reporting period.
18
C&S Paper Co., Ltd. Semi-annual Report 2021
2. Sales of major equity
□ Applicable √ Not applicable
VIII. Analysis of Main Holding and Joint-stock Companies
√ Applicable □ Not applicable
Description of main subsidiaries and of joint-stock companies which have influence on the Company’s net profit
by over 10%
19
C&S Paper Co., Ltd. Semi-annual Report 2021
Unit: RMB
Company
Company type Principal businesses Registered capital Total assets Net assets Operating income Operating profit Net profit
name
R&D, production, and sales (including
online sales): household paper, maternal
and infant products, cosmetics, wipes,
non-woven products, daily necessities,
and cleaning supplies; sales (including
online sales) of Class I and II medical
Jiangmen
Subsidiary devices. (The above items do not involve RMB345,985,031 1,778,554,306.27 1,452,371,161.76 747,241,439.87 115,039,007.95 97,876,239.26
C&S
special management measures for the
foreign access). (For items that must be
approved in accordance with the law, the
company may carry out business
operations upon approval by competent
departments.)
R&D, production, wholesale, retail and
online sales: household paper, sanitary
products, maternal and infant products,
daily necessities, cosmetics, medical
devices, sanitary materials, non-woven
fabrics and products, polymer materials
and products, daily sundries, and
disinfection supplies (excluding
hazardous chemicals); wholesale, retail
and online sales: food; import and export
Yunfu C&S Subsidiary RMB650 million 2,126,862,446.83 1,244,184,883.95 1,460,190,589.00 157,532,303.17 133,746,121.37
of goods and technologies (excluding the
import and export of goods and
technologies prohibited by the State or
involving administrative approval);
warehousing services (limited to
warehouses qualified in fire protection
without hazardous chemicals). (For items
that must be approved in accordance with
the law, the company may carry out
business operations upon approval by
20
C&S Paper Co., Ltd. Semi-annual Report 2021
competent departments.)
Licensed items: production of sanitary
products and disposable medical supplies;
import and export of goods (for items that
must be approved in accordance with the
law, the company may carry out business
operations upon approval by competent
departments, and the specific business
items are subject to the approval
document or the permit issued by relevant
department). General items: sales of
sanitary products and disposable medical
supplies; sales of personal hygiene
products; sales of daily necessities;
manufacture of paper products; sales of
Sichuan C&S Subsidiary RMB100 million 1,138,234,120.55 834,215,732.60 964,018,416.58 93,193,559.94 78,591,624.35
paper products; manufacture of paper;
manufacture of daily chemical products;
sales of daily chemical products; sales of
Class II medical devices; sales of Class I
medical devices; manufacture of
industrial textile products; sales of
industrial textile products; manufacture of
maternal and infant products; sales of
maternal and infant products. (The
company may carry out business
operations independently according to the
law based on the business license, except
for items that must be licensed according
to the law.)
Licensed items: production of sanitary
products and disposable medical supplies;
production of cosmetics (for items that
must be approved in accordance with the
law, companies may carry out business
Hubei C&S Subsidiary RMB200 million 1,689,435,694.57 444,177,395.36 742,844,886.22 91,690,308.10 69,303,869.68
operations upon approval by relevant
departments, and the specific business
items are subject to the approval
document or the permit issued by
competent department). General items:
21
C&S Paper Co., Ltd. Semi-annual Report 2021
sales of sanitary products and disposable
medical supplies; retail of cosmetics;
wholesale of cosmetics; manufacture of
paper; sales of personal hygiene products;
sales of knitwear; manufacture of
maternal and infant products; sales of
maternal and infant products; sales of
paper products; manufacture of paper
products; sales of daily necessities; sales
of daily chemical products; sales of
disinfectants (excluding hazardous
chemicals); Internet sales (excluding the
sales of commodities requiring a permit);
sales of Class I medical devices; sales of
Class II medical devices; import and
export of goods and technologies
(excluding the import and export of goods
and technologies prohibited by the State
or involving administrative approval).
(For items that must be approved in
accordance with the law, the company
may carry out business operations upon
approval by competent departments.)
22
C&S Paper Co., Ltd. Semi-annual Report 2021
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
Description of main holding and joint-stock companies
None
IX. Structured Entities Controlled by the Company
□ Applicable √ Not applicable
X. Risks Faced by the Company and Countermeasures
1. Risk of great fluctuations in pulp prices
Pulp is an international bulk raw material and its price is obviously affected by the world economic cycle. Pulp is
the primary raw material of the Company’s production, accounting for 40%-60% of the total production costs.
Therefore, substantial fluctuations in pulp prices pose a risk to the Company.
The Company is equipped with a professional procurement team which, on the premise of ensuring normal
production inventory, adjusts the purchase rhythm by professionally evaluating the future trend of pump boards
and coordinating the market conditions of international pulp prices. The Company has cemented long-term supply
contracts with pulp suppliers that have large production scale, abundant forest resources and advanced production
technologies to ensure stable raw material procurement. It has established a global procurement network with
purchases in Europe, North America, South America, etc.
2. Risk of exchange rate
The import of machinery equipment and pulp and the export of products to overseas market of the Company are
mainly settled in USD, HKD, and EUR. Since exchange rates fluctuate under the impact of the international
economic situation, the Company faces exchange rate risks.
The Company pays close attention to changes in the foreign exchange market on a daily basis and hedges against
exchange losses brought by RMB depreciation or two-way fluctuations by adjusting the structure of foreign
currency assets and liabilities and reducing overall foreign currency liabilities. In addition, the Company started to
adopt the spot selling rate accounting for foreign currency transactions since 2015 in accordance with its actual
needs and in compliance with foreign exchange requirements. In this way, the Company may choose to buy
foreign currency and pay for the goods at a rate favorable to the Company at an appropriate time.
23
C&S Paper Co., Ltd. Semi-annual Report 2021
Furthermore, the Company hedges against and avoids exchange rate risks via centralized management of foreign
exchange funds, purchase payment hedging, etc. based on changes in the foreign exchange market and actual
development of the Company. With regard to exchange rate risk exposure, the Company also uses hedging and
other financial tools to conduct reasonable risk management.
3. Risk of regional market competition
Household paper is a vast market in China in terms of both geography and market space. Given the low unit value,
transportation expenses taking up a large part of the sales price, and limitations of the transportation radius, the
main competition in the household paper industry lies in regional markets. High-end, mid-end, and low-end
products compete in regional markets, with the influence of spending power and consumption habit. Judging from
the development trend of the industry, mid- and high-end household paper of national brands has more
competitive edge. However, at present, some regional brands have an advantage in some regional markets.
Compared with overseas counterparts, China’s household paper industry requires continued integration. The
Company embraces production bases and a sales network across the country and offers mid- and high-end
products under national brands. Nevertheless, it is inescapable from the risk of regional market competition.
After years of development, the Company has become one of the leading companies in the domestic household
paper industry. It has built a marketing network covering most prefecture (county) level cities and a production
base with national presence. As a result, transportation costs can be effectively reduced and transportation
efficiency effectively improved by shorting the distance with consumers. As the Company continues to deepen
and expand sales channels, it will gradually cover untapped outlets. In the future, in response to market
competition, the Company will strengthen channel sinking, increase market penetration, further expand its scale,
and further improve its overall market competitiveness and shares.
4. Risk of industrial policies
Stricter requirements have been raised for the papermaking industry in the aspects of scale, technology, equipment,
and environmental protection, as multiple industry plans and supporting policies have been successively issued by
relevant departments, including the Papermaking Industry Development Policy, the Notice on the Management of
Elevated Source Pollution Discharge Permits in Thermal Power and Papermaking Industries and Pilot Cities of
Beijing-Tianjin-Hebei Region, and the Opinions of China Paper Association on “Thirteenth Five-year”
Development Plan of the Papermaking Industry. Particularly, a number of measures have been introduced through
environmental protection policies to drive the all-round, coordinated, and sustainable development of the
household paper industry, including 1) optimizing the industrial distribution to reasonably allocate resources and
24
C&S Paper Co., Ltd. Semi-annual Report 2021
promoting clean production to preserve the ecological environment; 2) pushing energy conservation and emission
reduction to shut down outdated production facilities, and adjusting product structure and improving product
quality; 3) developing resource-saving models to advocate green consumption; and 4) optimizing enterprise
structure and driving M&A and restructuring. These policies are designated to strengthen household paper
industry concentration, close backward production facilities, and optimize resource allocation. The Company, as
an enterprise in the first echelon of the domestic household paper industry, is underpinned by national policies
related to the sustainable development of the household paper industry. Precisely because of this, industrial policy
adjustment, if any, will impact the production and operations of the Company to some extent.
In the face of increasing stringent environmental protection policies, as a responsible domestic enterprise in the
household paper industry, the Company and its subsidiaries strictly abide by environmental protection laws and
regulations of the state and local governments. Production bases are equipped with state-of-the-art papermaking
equipment, processing equipment and environmental protection treatment equipment and facilities, and adopt
advanced environmental protection technologies. With continuous capital and technological inputs and
improvement in pollution control of the production process, the Company strives to reduce environmental
pollution and ensure green production. The Company will continue to optimize production efficiency in response
to requirements of national industrial policies.
5. Risk of safe production
Most of the materials involved in the household paper industry are flammable, including the main raw material of
pulp, the main packing materials of plastic-film packing bags and cartons, the semi-finished product of body paper,
and finished products. Due to the characteristics of low unit value and large market consumption, household paper
manufacturers have to keep a mass of pulp, packing materials, and semi-finished and finished products from the
entry of raw materials into the plant to the delivery of products to the market. Thus, fire can cause enormous
losses to such manufacturers. In addition, a large number of production lines have been put into use, which may
pose certain occupational health hazard and cause harm to the occupational health of employees. Even though the
overall safe production risk of the Company is controllable, it still faces certain safe production risks.
In view of this, the Company has formulated strict fire management regulations for raw materials and semi-
finished and finished products, established a full-time safety management department, equipped adequate fire
protection equipment in production areas, and bought full insurance for risky properties. As such, the Company’s
fire safety risk is low.
In response to possible occupational health hazards, the Company, at the equipment design and procurement
25
C&S Paper Co., Ltd. Semi-annual Report 2021
stages, requires suppliers to carry out intrinsic safety design and fulfill the protection measures during the
installation process. At the same time, the Company has passed the ISO45001 occupational health and safety
(OHS) management system and continues to maintain its effective operations to reduce the occupational health
and safety risks of employees.
6. Risk of logistics transportation
The spread of the COVID-19 pandemic in 2020 has hindered domestic and foreign logistics transportation by sea
and land to varying degrees, affecting both the Company’s procurement and sales and upstream suppliers and
downstream dealers. In other words, the Company has suffered from multiple dimensions. Though impacts of the
pandemic are phased and temporary, risks are unavoidable for the Company as being at the mid- and downstream
of the household paper industry chain.
The Company has quickly formulated response strategies during the pandemic and actively coordinated supply
chain allocation. In terms of supply, the Company flexibly adjusts supply area based on the optimal principle to
guarantee adequate goods supply to customers. In terms of logistics, the Company implements integrated
management for logistics and warehouses as well as production and sales under the premise of well taking safety
precautions. Personnel in all positions are asked to stick to their posts and maintain close communication with
sales to assure smooth logistics to the greatest extent.
26
C&S Paper Co., Ltd. Semi-annual Report 2021
Section IV Corporate Governance
I. Annual General Meeting and Extraordinary General Meetings Held during the Reporting
Period
1. Shareholder meetings during the reporting period
Ratio of investor
Session of meeting Type Date of convening Date of disclosure Resolutions of the meeting
participation
Announcement on
Resolutions of 2021 First
Extraordinary General
Meeting of Shareholders
2021 First Extraordinary (Announcement No.: 2021-
Extraordinary general meeting 53.68% January 21, 2021 January 22, 2021 18). See Securities Times,
General Meeting of shareholders Securities Daily, China
Securities Journal and
CNINFO
(www.cninfo.com.cn) for
details.
Announcement on
Resolutions of 2021 Second
Extraordinary General
Meeting of Shareholders
2021 Second Extraordinary (Announcement No.: 2021-
Extraordinary general meeting 54.85% January 29, 2021 January 30, 2021 26). See Securities Times,
General Meeting of shareholders Securities Daily, China
Securities Journal and
CNINFO
(www.cninfo.com.cn) for
details.
Announcement on
Resolutions of 2021 Third
Extraordinary General
Meeting of Shareholders
2021 Third Extraordinary (Announcement No.: 2021-
Extraordinary general meeting 54.72% April 07, 2021 April 08, 2021 49). See Securities Times,
General Meeting of shareholders Securities Daily, China
Securities Journal and
CNINFO
(www.cninfo.com.cn) for
details.
Announcement on
Resolutions of 2020 Annual
General Meeting of
2020 Annual General Shareholders
Annual general
Meeting of 54.78% May 19, 2021 May 20, 2021 (Announcement No.: 2021-
meeting
Shareholders 72). See Securities Times,
Securities Daily, China
Securities Journal and
CNINFO
27
C&S Paper Co., Ltd. Semi-annual Report 2021
(www.cninfo.com.cn) for
details.
Announcement on
Resolutions of 2021 Fourth
Extraordinary General
Meeting of Shareholders
2021 Fourth Extraordinary (Announcement No.: 2021-
Extraordinary general meeting 57.22% June 07, 2021 June 08, 2021 89). See Securities Times,
General Meeting of shareholders Securities Daily, China
Securities Journal and
CNINFO
(www.cninfo.com.cn) for
details.
2. Extraordinary general meetings of shareholders proposed to be convened by preferred shareholders
whose voting rights were resumed
□ Applicable √ Not applicable
II. Changes in Directors, Supervisors and Senior Management of the Company
√ Applicable □ Not applicable
Name Position Type Date Reason
Resigned upon
Zeng Yi Director expiry of term of January 21, 2021 Expiry of term of office
office
Resigned upon
Independent
Huang Hongyan expiry of term of January 21, 2021 Expiry of term of office
Director
office
Resigned upon
Independent
Ge Guangrui expiry of term of January 21, 2021 Expiry of term of office
Director
office
Independent
He Guoquan Elected January 21, 2021 Elected upon the change of board of directors
Director
Independent
Liu Die Elected January 21, 2021 Elected upon the change of board of directors
Director
Yue Yong Director Resigned March 18, 2021 Voluntary resign
Deng Guanbiao President Resigned March 19, 2021 Voluntary resign
Liu Peng President Appointed March 22, 2021 Appointed by the board of directors
Deng Yingzhong Chairman Resigned April 09, 2021 Voluntary resign
Liu Peng Chairman Elected April 12, 2021 Elected by the board of directors
Li Zhaojin Vice President Appointed April 12, 2021 Appointed by the board of directors
Deng Wenxi Vice President Appointed April 27, 2021 Appointed by the board of directors
Director, Joint
Dai Zhenji Resigned April 28, 2021 Voluntary resign
President
Li Youquan Supervisor Resigned July 12, 2021 Voluntary resign
Zhang Yang Vice President Appointed July 12, 2021 Appointed by the board of directors
Zhou Qichao Board Secretary, Resigned July 29, 2021 Voluntary resign
28
C&S Paper Co., Ltd. Semi-annual Report 2021
Vice President
Vice President,
Zhang Haijun Appointed August 23,2021 Appointed by the board of directors
Board Secretary
III. Profit Distribution and Conversion of Capital Reserve to Share Capital during the
Reporting Period
□ Applicable √ Not applicable
The Company plans not to distribute cash dividend, issue bonus share, or transfer capital reserve into share capital
for the half year.
IV. Implementation of the Stock Incentive Plan, Employee Stock Ownership Plan, and Other
Employee Incentives of the Company
√ Applicable □ Not applicable
1. Implementation of the Phase II stock incentive plan
On May 22, 2021, the Company convened the 5th meeting of the fifth session of the Board of Directors and the
3rd meeting of the fifth session of the Board of Supervisors, which considered and approved the Proposal on
Achieving the Unlock Conditions of the Second Unlock Period for Restricted Stocks Awarded in the First Grant
under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan. There were 499 holders of restricted
stocks meeting the unlock conditions, and the number of stocks that could be unlocked was 4,809,045. The unlock
date of these restricted stocks was June 30, 2021. The above meetings also reviewed and approved the Proposal
on the Repurchase and Deregistration of Partial Restricted Stocks Awarded in the First Grant under the
Company’s 2018 Stock Option and Restricted Stock Incentive Plan. The Board of Directors of the Company
approved to repurchase and deregister a total of 2,021,305 restricted shares that had been granted but not unlocked.
In addition, the aforesaid meetings also deliberated and approved the Proposal on Achieving the Exercise
Conditions of the Second Exercise Period for Stock Options Awarded in the First Grant under the Company’s
2018 Stock Option and Restricted Stock Incentive Plan. There were 2,274 holders of stock options meeting the
exercise conditions, and the number of options that could be exercised was 2,948,559. The Proposal on the
Repurchase and Deregistration of Partial Stock Options Awarded in the First Grant under the Company’s 2018
Stock Option and Restricted Stock Incentive Plan was also considered and approved. The Board agreed to
deregister 1,294,091 options that had been granted but not exercised.
On May 28, 2021, the Company held the 6th meeting of the fifth session of the Board of Directors and the 4th
29
C&S Paper Co., Ltd. Semi-annual Report 2021
meeting of the fifth session of the Board of Supervisors, which reviewed and approved the Proposal on Adjusting
the Exercise Price of Stock Options under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan.
Pursuant to the Company’s profit distribution plan in 2020 and relevant provisions of the 2018 Stock Option and
Restricted Stock Incentive Plan (Draft), the Company adjusted the exercise price of first-granted stock options
from RMB8.572/share to RMB8.472/share, and adjusted the exercise price of reserved stock options from
RMB13.965/share to RMB13.865/share.
On July 6, 2021, the cancellation procedures for 1,294,091 first-granted stock options that had been granted but
not exercised were completed at the Shenzhen Branch of China Securities Depository and Clearing Corporation
Limited.
Please continue to pay attention to the Company’s information disclosure for subsequent implementation progress
or changes.
2. Implementation of the Phase II employee stock ownership plan
As of January 5, 2021, all stocks held under the Company’s Phase II Employee Stock Ownership Plan, i.e.
11,709,583 shares, had been sold out. As per relevant provisions of the Phase II Employee Stock Ownership Plan,
the implementation of the Plan is completed and thus the Plan is terminated.
3. Implementation of the Phase III employee stock ownership plan
On May 22, 2021, the Company held the 5th meeting of the fifth session of the Board of Directors and the 3rd
meeting of the fifth session of the Board of Supervisors, which considered and approved the Proposal on Phase
III Employee Stock Ownership Plan (Draft) and Its Summary. In order to improve employee cohesion and
corporate competitiveness and ensure the attainment of the Company’s future development strategies and business
goals, the Company plans to roll out Phase III Employee Stock Ownership Plan; preferred shares and deferred
shares are set at a leverage ratio of 1:1, with a cap of 400 million shares and 200 participants.
On June 7, 2021, the Company convened the 2021 Fourth Extraordinary General Meeting, which considered and
approved proposals relevant to Phase III Employee Stock Ownership Plan. In order to ensure the Plan’s smooth
implementation, the shareholders’ meeting authorized the Board of Directors to fully handle matters relevant to
the Plan.
Please continue to pay attention to the Company’s information disclosure for subsequent implementation progress
or changes.
30
C&S Paper Co., Ltd. Semi-annual Report 2021
Section V Environmental and Social Responsibilities
I. Main Environmental Protection Issues
Whether the listed company and its subsidiaries are the key pollution discharge units published by the
environmental protection department
√ Yes □ No
Main
Implemente
Name of pollutants Number of Distribution Concentrati Total
Ways of d pollutant Total Excessive
company or and discharge of discharge on of approved
discharge discharge discharge discharge
subsidiary particular outlets outlets discharge discharge
standards
pollutants
After
treatment, it
Jiangmen is Centralized
Zhongshun Waste water discharged processing
1 80mg/L 200mg/L 158.95t 335.6 t/a None
Paper Co., - COD to the facilities in
Ltd. sewage the factory
treatment
plant
After
treatment, it
Jiangmen is Centralized
Waste water
Zhongshun discharged processing
- Ammonia 1 1.76mg/L 8mg/L 3.497t 13.4 t/a None
Paper Co., to the facilities in
nitrogen
Ltd. sewage the factory
treatment
plant
Production
waste water
discharge
After
(DW001)
treatment, it
flows
enters the
through the
C&S water
channel into
(Sichuan) Waste water purification
1 the main 48mg/L 80mg/L 19.6168t 96 t/a None
Paper Co., - COD station
outlet
Ltd. through
DW002
urban
(confluent
sewage
with
pipeline
domestic
waste
water)
Production
After waste water
treatment, it discharge
enters the (DW001)
C&S water flows
Waste water
(Sichuan) purification through the 0.203mg/L 8mg/L
- Ammonia 1 0.083t 9.6 t/a None
Paper Co., station channel into
nitrogen
Ltd. through the main
urban outlet
sewage DW002
pipeline (confluent
with
31
C&S Paper Co., Ltd. Semi-annual Report 2021
domestic
waste
water)
Three
chimneys 1# boiler
C&S Waste gas - Discharge (2# boiler is 2.5 mg/m
(Sichuan) PM directly the standby 2# boiler 0
3 20 mg/Nm3 0.156t / None
Paper Co., (particulate through the boiler, mg/m 3#
Ltd. matter) flue monitoring boiler 2.7
when being mg/m
used)
Three
chimneys 1# boiler 27
C&S Discharge (2# boiler is mg/m
Waste gas -
(Sichuan) directly the standby 2# boiler 0 150
Nitrogen 3 1.8886t 31.35 t/a None
Paper Co., through the boiler, mg/m 3# mg/Nm3
oxide
Ltd. flue monitoring boiler 29
when being mg/m
used)
Three
chimneys
C&S Discharge (2# boiler is
Waste gas -
(Sichuan) directly the standby
Sulfur 3 0 50 mg/Nm3 0 / None
Paper Co., through the boiler,
dioxide
Ltd. flue monitoring
when being
used)
After
treatment, it
is
discharged
Zhejiang to Jiaxing Centralized
Zhongshun Waste water Industrial processing
1 37.2mg/L 500mg/L 7.7875t 139.7 t/a None
Paper Co., - COD Sewage facilities in
Ltd. Treatment the factory
Plant
through
municipal
pipe
After
treatment, it
is
discharged
Zhejiang to Jiaxing Centralized
Waste water
Zhongshun Industrial processing
- Ammonia 1 0.4529mg/L 35mg/L 0.1t 9.78 t/a None
Paper Co., Sewage facilities in
nitrogen
Ltd. Treatment the factory
Plant
through
municipal
pipe
After After
treatment, it centralized
is processing
discharged facilities in
C&S
to Biquan the factory,
(Hubei) Waste water
Sewage 1 it is 109mg/L 400mg/L 45.25t 152.25 t/a None
Paper Co., - COD
Treatment discharged
Ltd.
Plant to Biquan
through Sewage
municipal Treatment
pipe Plant
C&S Waste water After 1 After 6.913mg/L 30mg/L 4.52t 15.25 t/a None
(Hubei) - Ammonia treatment, it centralized
32
C&S Paper Co., Ltd. Semi-annual Report 2021
Paper Co., nitrogen is processing
Ltd. discharged facilities in
to Biquan the factory,
Sewage it is
Treatment discharged
Plant to Biquan
through Sewage
municipal Treatment
pipe Plant
Dedusting
by bag
filter,
C&S Waste gas -
desulfurizati
(Hubei) PM One 13.1
on by 1 30 mg/Nm3 6.95t 28.63 t/a None
Paper Co., (particulate chimney mg/Nm3
limestone-
Ltd. matter)
gypsum and
denitration
by SNCR
Dedusting
by bag
filter,
C&S
Waste gas - desulfurizati
(Hubei) One 200
Sulfur on by 1 58 mg/Nm3 33.79t 203.87 t/a None
Paper Co., chimney mg/Nm3
dioxide limestone-
Ltd.
gypsum and
denitration
by SNCR
Dedusting
by bag
filter,
C&S
Waste gas - desulfurizati
(Hubei) One 109 200
Nitrogen on by 1 52.26t 239.85 t/a None
Paper Co., chimney mg/Nm3 mg/Nm3
oxide limestone-
Ltd.
gypsum and
denitration
by SNCR
C&S Sewage
(Yunfu) Waste water Continuous treatment
1 32.16mg/L 80mg/L 35.605t 197.1 t/a None
Paper Co., - COD discharge station in
Ltd. the factory
C&S Sewage
Waste water
(Yunfu) Continuous treatment
- Ammonia 1 1.98mg/L 8mg/L 2.185t 19.76 t/a None
Paper Co., discharge station in
nitrogen
Ltd. the factory
After being
treated by
the plant
sewage The main
treatment outlet of the
C&S Paper
station, it is zone
Co., Ltd. Waste water
discharged 1 (Lvyuan 29.19mg/L 50mg/L 3.76t 16.5 t/a None
Tangshan - COD
to the Sewage
Branch
Lvyuan Treatment
Sewage Plant)
Treatment
Plant in the
zone
After being The main
treated by outlet of the
C&S Paper
Waste water the plant zone
Co., Ltd.
- Ammonia sewage 1 (Lvyuan 0.576mg/L 5mg/L 0.078t 1.65 t/a None
Tangshan
nitrogen treatment Sewage
Branch
station, it is Treatment
discharged Plant)
33
C&S Paper Co., Ltd. Semi-annual Report 2021
to the
Lvyuan
Sewage
Treatment
Plant in the
zone
C&S Paper Waste gas - Discharge
Co., Ltd. PM directly One 2.75
1 5 mg/Nm3 0.22t 2.46 t/a None
Tangshan (particulate through the chimney mg/Nm3
Branch matter) flue
C&S Paper Discharge
Waste gas -
Co., Ltd. directly One 19.22
Nitrogen 1 30 mg/Nm3 0.705t 18.46 t/a None
Tangshan through the chimney mg/Nm3
oxide
Branch flue
C&S Paper Discharge
Waste gas -
Co., Ltd. directly One ND (not
Sulfur 1 10 mg/Nm3 0 6.15 t/a None
Tangshan through the chimney detected)
dioxide
Branch flue
Construction and operation of pollution prevention and control facilities
(1) Compliance obligation fulfillment: The Company and its subsidiaries strictly abide by national and local
environmental laws and regulations; all new projects strictly implement the environmental impact assessment
system and “three simultaneous” system; all production activities strictly comply with the Environmental
Protection Law of the People’s Republic of China, the Law of the People’s Republic of China on the Prevention
and Control of Water Pollution, the Law of the People’s Republic of China on the Prevention and Control of
Atmospheric Pollution, the Law of the People’s Republic of China on the Prevention and Control of
Environmental Pollution by Solid Waste and the Action Plan for Prevention and Control of Water Pollution, and
ensure that all pollutant treatment and discharge are in line with the requirements of laws and regulations.
(2) Configuration and operation of water treatment equipment and facilities: Each subsidiary has a complete set of
environmental protection treatment equipment and facilities. The main sewage treatment processes are anaerobic,
aerobic and subsequent deep treatment processes, which can achieve the discharge standards of various sewage
indicators. In addition, each subsidiary is equipped with a recycling water system, in which the reclaimed water
that meets the usage standard is used for re-production to reduce the discharge of sewage as far as possible. The
sewage of Jiangmen, Zhejiang, Hubei and Tangshan companies is discharged after centralized treatment in the
company and treated by the local sewage treatment plants. After centralized treatment in the company, the sewage
of Sichuan Company enters water purification station through urban sewage pipeline; the sewage of Yunfu
Company, after treated by the company’s sewage treatment station and reaching the standard, is discharged in an
organized manner.
34
C&S Paper Co., Ltd. Semi-annual Report 2021
(3) Online monitoring and operation of water treatment facilities: Five subsidiaries in Yunfu, Sichuan, Zhejiang,
Hubei and Tangshan have all installed online sewage monitoring facilities, which are directly supervised by local
environmental protection bureau. For Jiangmen Company, after the centralized treatment within the company, the
sewage is discharged to the sewage plant of the local paper industry base; there is no other sewage outlet and no
online monitoring facilities; third-party agencies have been invited to conduct monitoring each quarter, and the
test data meet all requirements.
(4) Boiler waste gas emission: Sichuan Branch and Tangshan Branch are equipped with natural gas boilers. Hubei
Branch is equipped with a coal-fired boiler, and waste gas is emitted uniformly after desulfurization and
denitrification. Boiler waste gas emission conforms to GB13271-2014 Emission Standard of Air Pollutants for
Boiler.
Environmental impact assessment of construction projects and other administrative permits for environmental
protection
(1) Administrative permits: According to the Measures for the Administration of Pollutant Discharge Permit of the
Ministry of Environmental Protection of the People’s Republic of China, the applications were submitted to the
Environmental Protection Bureau. All the subsidiaries attained the new pollutant discharge permit in 2017, and
completed its renewal and change in May 2020.
(2) Construction projects: the Company has always been strictly in accordance with environmental laws and
regulations to implement the control of construction projects. Environmental impact assessment was carried out
for all construction projects and environmental protection project construction was arranged according to
construction plan, to ensure that the environmental protection facilities and the main project are designed,
constructed and put into use at the same time. At present, all construction projects put into production have
completed environmental impact assessment and acceptance and approval.
Emergency plan for sudden environmental events
(1) Preparation and reporting of emergency plan for sudden environmental events: The Company strictly
implements emergency response rules for sudden environmental events, and, in accordance with the technical
requirements in the Technical Guidelines for Preparation of Emergency Plans for Environmental Pollution
Accidents, employs a professional advisory and guidance organization to formulate the Emergency Plan for
Sudden Environmental Events, which has been reviewed by and filed with the Environmental Protection Bureau.
(2) Emergency response supplies, training and drill: The Company has matched the corresponding emergency
35
C&S Paper Co., Ltd. Semi-annual Report 2021
response supplies according to the requirements of the Emergency Plan for Sudden Environmental Events.
Emergency response measures for hazardous chemicals have been prepared according to environmental protection
requirements, and necessary labor protection supplies and emergency response supplies have been provided in
accordance with safety technical instructions, and checked and updated regularly. The Company regularly carries
out emergency training and drill and suitability assessment of the emergency plan to ensure the effectiveness and
enforceability of the emergency plan.
Environmental self-monitoring program
(1) Self-monitoring ledger: The Company strictly abides by laws and regulations, carries out self-monitoring work
in accordance with environmental protection requirements, establishes environmental management ledger and
data, and constantly improves it.
(2) Waste water monitoring: At present, self-monitoring is a combination of manual monitoring and automatic
monitoring, and qualified units are entrusted to carry out monitoring regularly. Automatic monitoring projects:
main discharge outlet of waste water (COD, ammonia nitrogen, flow rate, PH, total nitrogen); Manual monitoring
projects: COD, BOD, ammonia nitrogen, SS, chroma, PH, total phosphorus and total nitrogen indicators are
monitored daily; for other sewage monitoring items, uncontrolled emissions, solid waste and factory boundary
noise, each subsidiary entrusts qualified units to carry out monitoring work monthly or quarterly according to the
local environmental protection requirements.
(3) Waste gas monitoring: The main testing items are nitrogen oxide, ringelman emittance, sulfur dioxide and soot.
The testing frequency is in compliance with the requirements of regulations.
(4) The self-monitoring data of pollutant discharge and environmental monitoring plans of each subsidiary are
disclosed on the national key pollution source information disclosure website and the provincial key pollution
source information disclosure website.
Administrative penalties due to environmental issues during the reporting period
Impact on
Rectification
Name of company or production and
Reason of penalty Violation Penalty result measures of the
subsidiary operation of the
Company
listed company
None None None None None None
Other environmental information that should be disclosed
None
Other relevant information on environmental protection
36
C&S Paper Co., Ltd. Semi-annual Report 2021
(1) Energy saving and emission reduction
The Company has always adhered to the concept of green and low-carbon development and integrates
environmental protection into corporate development. In the process of production, the Company continuously
modifies equipment and innovates in technologies, with power and steam consumption per ton of paper
decreasing year by year. This could maximize energy saving and emission reduction on the basis of reducing costs,
thereby realizing the win-win of economic and social benefits.
YoY reductions in standard coal conversed from power/steam consumption per ton of paper 2017 - 2021 H1
Item January-June 2021 2020 2019 2018 2017
Standard coal reduction conversed from power 4 9 7 4 6
consumption per ton of paper
Standard coal reduction conversed from steam 7 16 20 11 20
consumption per ton of paper
(2) Carbon emission right trading
China’s first emissions trading scheme (ETS) was launched in Shenzhen on June 18, 2013. Since then, Beijing,
Tianjin, Shanghai, Guangdong, Hubei, Chongqing and other provinces and cities have rolled out pilot projects for
carbon emission trading. Among the seven pilot regions, most of the provinces and cities issue quota to emission
control enterprises free of charge. As a result, the primary market for quota trading adopts the method of
administrative allocation. Wherein, Guangdong, Shenzhen and Hubei issue certain quotas to emission control
enterprises through bidding.
As of December 31, 2020, Jiangmen production base and Yunfu production base have carbon emission quota.
Hubei production base conducted budgeting and opened an account in 2020 and is expected to initiate quota and
accounting in 2021. The provinces where other subsidiaries are located have not yet started to issue carbon
emission quota and accounting.
Carbon trading status of Jiangmen and Yunfu production bases (Unit: 10,000 tons)
Item 2019 2018 2017 2016
Actual emission of Jiangmen 13.60 15.30 16.28 15.10
base
Emission quota of Jiangmen 16.46 16.24 16.69 13.81
base
Actual emission of Yunfu base 20.43 14.86 12.13 /
Emission quota of Yunfu base 23.11 14.68 12.02 /
Note: The actual carbon emissions in 2020 will be announced after the audit agency completes calculation; according to actual
energy control in production, it is expected that the actual emissions of Jiangmen and Yunfu production bases will be below the
quota in 2020.
The actual emission of Jiangmen production base in 2016 was higher than the emission quota. Through
37
C&S Paper Co., Ltd. Semi-annual Report 2021
continuous energy saving and emission reduction measures, the base has continuously reduced power, steam and
pulp consumption in production. As a result, the actual emissions in 2017, 2018 and 2019 were all below the quota.
The actual emission of Yunfu production base in 2017 and 2018 was higher than the emission quota. Through
continuous energy saving and emission reduction measures, the base has continuously reduced power, steam and
pulp consumption in production. As a result, the actual emission in 2019 was below the quota.
The Company will continue to devote itself to energy-saving, emission-reduction and consumption-reduction
actions and implement them simultaneously across the entire group, to fulfill its corporate social responsibilities
for environmental protection.
II. Corporate Social Responsibilities
As a nation enterprise with important social influence and a leading enterprise in the household paper industry, the
Company has actively fulfilled its corporate social responsibilities. Specifics are as follows:
1. In January 2021, Jiangmen C&S organized party members to visit local elderly in need and donated supplies
worth RMB3,200.
2. In February 2021, the Company contributed materials worth more than RMB1 million to front-line pandemic
control personnel in Shijiazhuang, Hebei Province. Hubei C&S donated C&S paper products equivalent to a value
of RMB10,440 to Xiaonan District Fire Rescue Brigade as a way of respect to fire officers.
3. In March 2021, the Company helped international fight against the pandemic by giving 4 million pieces of
medical masks to Russia, Pakistan, Myanmar and other “Belt and Road” countries. Party members of Jiangmen
C&S volunteered in the afforestation activities of Yuqian Village and donated 3,000 saplings and supplies worth
RMB8,200.
4. In April 2021, in joint efforts with Guangzhou Yuexiu District Center for Disease Control and Prevention,
Guangzhou Emergency Broadcast of Guangzhou Traffic Radio FM106.1, and Guangzhou Charity Association, the
Company donated 120,000 anti-pandemic kits (medical surgical masks + sterilization sanitary wipes) to
Guangzhou.
5. In June 2021, Jiangmen C&S organized party members and visited local widows and lonely elderlies before the
Dragon Boat Festival and donated a total of RMB4,182 in supplies. In addition, in order to support the education
development of Shuangshui Town, Jiangmen C&S contributed RMB50,000 to Shuangshui Dr. Huang Kejing
School for the purchase of smart blackboards.
6. During the period from January to June 2021, charitable funds of the Company provided assistance up to
RMB250,000 to employees and people from the society, which helped 21 needy families and individuals.
7. In July 2021, the Company teamed up with several charitable organizations and contributed more than RMB1.6
38
C&S Paper Co., Ltd. Semi-annual Report 2021
million to disaster-stricken areas in Henan.
39
C&S Paper Co., Ltd. Semi-annual Report 2021
Section VI Significant Events
I. Commitments Completed by Actual Controllers, Shareholders, Related parties, Purchasers,
or the Company within the Reporting Period and Commitments Not Fulfilled by the End of
the Reporting Period
√ Applicable □ Not applicable
Fulfillment
Cause of Undertaking Type of Time of Term of of
Content of commitment
Commitment Party commitment commitment commitment commitmen
t
Share reform
commitment
Commitments in the
acquisition report or
the equity change
report
Commitments made
during asset
restructuring
Directors, supervisors, and senior
management promise that they
will not transfer more than 25% of
the total shares of the Company
they hold each year during the
term of office. If they leave office
before the expiry of the term of
Commitments made Directors,
office, they promise not to transfer
during the initial supervisors, and November 25, Strictly
more than 25% of the total shares Long-term
public offering or senior 2010 observed
of the Company they hold each
refinancing management
year within the term of office and
within six months after the term
of office expires (which is agreed
when they took office). Moreover,
they will not transfer their shares
of the Company within half a year
after they leave office.
They promise not to sell all their
shares (including shares obtained During the
from exercise and other shares) implementat
within six months after the end of November 12, ion of the Strictly
Liu Jinfeng
the exercise of the last stock 2020 equity observed
Equity incentive
options. Besides, they promise to incentive
commitments
strictly conform to stock trading- plan
related laws and regulations.
They promise not to sell all their During the
Dong Ye, Ye Strictly
shares (including shares obtained June 25, 2021 implementat
Longfang observed
from exercise and other shares) ion of the
40
C&S Paper Co., Ltd. Semi-annual Report 2021
within six months after the end of equity
the exercise of the last stock incentive
options. Besides, they promise to plan
strictly conform to stock trading-
related laws and regulations.
Deng
Yingzhong,
Deng Guanbiao,
They promise not to compete with
Deng Guanjie, January 1, Strictly
the Company in the same Long-term
and Guangdong 2009 observed
business.
Zhongshun
Paper Group
Co., Ltd.
Cash dividends shall be
distributed when dividend
conditions are met. The Board of
Directors of the Company shall
comprehensively consider
industry characteristics,
development stage, business
C&S Paper Co., August 28, Strictly
model, profitability, and major Long-term
Ltd. 2014 observed
capital spending (if any),
distinguish the following
circumstances, and propose
differentiated cash dividend
policies in compliance with the
procedures stipulated in the
Articles of Association.
Between the
Other commitments end of the
to minority repurchase
shareholders plan and the
start of the
next
repurchase
The 2019 repurchase plan was plan (the
terminated due to objective Company
reasons. The Company will reviewed
C&S Paper Co., Strictly
perform the necessary procedures May 21, 2020 and passed
Ltd. observed
and immediately restart the the share
repurchase work upon the end of repurchase
the exercise period. plan on
January 5,
2021, and
will
continue the
share
repurchase
plan)
He promises not to reduce any
Within six
shares of the Company he holds
months from
within six months upon the
the
completion of the share increase November 04, Strictly
Deng Yingzhong completion
plan, not to engage in insider 2020 observed
of the share
trading and short-term trading,
increase
and not to trade shares of the
plan
Company during sensitive
41
C&S Paper Co., Ltd. Semi-annual Report 2021
periods.
For all employees who purchase
C&S Paper stocks (no less than
1,000 shares) between May 10
and May 31, 2021 and hold them
continuously until May 30, 2022
May 10,
while still serving in the Company Strictly
Deng Yingzhong May 07, 2021 2021 - June
by then, any losses incurred from observed
30, 2022
the aforesaid stocks will be fully
compensated by Mr. Deng
Yingzhong while any profits
generated will entirely belong to
the employee.
They promise not to reduce or
pledge any shares they hold
directly or indirectly in the
Company in any way from May 9,
2021 to May 30, 2022, including
new shares added due to the
Deng
transfer of capital reserve into May 09,
Yingzhong, Strictly
share capital or distribution of May 09, 2021 2021 - May
Deng Guanbiao, observed
stock dividends for the 30, 2022
Deng Guanjie
aforementioned shares during the
commitment period. For any
violation of the above
commitment, all the incurred
earnings will belong to the
Company.
They promise not to reduce or
pledge any shares they hold
directly or indirectly in the
Company from the date when the
Liu Peng, Chen
Letter of Commitment is signed
Haiyuan, Liang
(i.e. May 14, 2021) to December
Yongliang, Li
31, 2021, including new shares May 14,
Youquan, Yue
added due to the transfer of 2021 - Strictly
Yong, Zhou May 14, 2021
capital reserve into share capital December observed
Qichao, Ye
or distribution of stock dividends 31, 2021
Longfang, Dong
for the aforementioned shares
Ye, Li Zhaojin,
during the commitment period.
and Deng Wenxi
For any violation of the above
commitment, all the incurred
earnings will belong to the
Company.
He promises not to reduce any
shares he or his parents, spouse or
children hold in the Company
directly or indirectly in the
Company in any way within 12
February 05,
months from the last reduction of
2021 - Strictly
Zhou Qichao the Company’s shares in 2021 (i.e. July 10, 2021
February 4, observed
February 5, 2021), including new
2022
shares added due to the transfer of
capital reserve into share capital
or distribution of stock dividends
for the aforementioned shares
during the commitment period.
42
C&S Paper Co., Ltd. Semi-annual Report 2021
For any violation of the above
commitment, all the incurred
earnings will belong to the
Company.
Whether
commitments are Yes
fulfilled on time
II. Appropriation of Funds for Non-operating Purposes by Controlling Shareholder and Its
Related Parties
□ Applicable √ Not applicable
During the reporting period, the Company did not have any funds appropriated for non-operating purposes by the
controlling shareholder and its related parties.
III. External Guarantee in Violation of Prescribed Procedures
□ Applicable √ Not applicable
During the reporting period, there was no external guarantee in violation of prescribed procedures.
IV. Engagement and Dismissal of Accounting Firm
Whether the Semi-annual Report has been audited
□ Yes √ No
The Semi-annual Report of the Company has not been audited.
V. Explanation by the Board of Directors and the Board of Supervisors of the “Non-standard
Audit Report” for the Reporting Period Issued by the Accounting Firm
□ Applicable √ Not applicable
VI. Explanation by the Board of Directors of the “Non-standard Audit Report” of the
Previous Year
□ Applicable √ Not applicable
VII. Matters relating to Bankruptcy and Restructuring
□ Applicable √ Not applicable
No bankruptcy and restructuring-related matters of the Company happened during the reporting period.
43
C&S Paper Co., Ltd. Semi-annual Report 2021
VIII. Litigations
Material litigations and arbitrations
□ Applicable √ Not applicable
There were no material litigations or arbitrations during the reporting period.
Other litigations
√ Applicable □ Not applicable
Amount Whether Hearing results Execution of
Basic information Litigation
involved projected and influences of judgment of the Date of Index of
of the litigation (arbitration)
(RMB liabilities were the litigation litigation disclosure disclosure
(arbitration) progress
10,000) incurred (arbitration) (arbitration)
Both the
Zhongshan first
The verdict of
Trading sued instance and
second instance
Shenzhen the second
came into force.
Yongxinghua instance
660.37 No Zhongshan Ongoing
Trading Co., Ltd., ruled that
Trading has
Feng, & Liang for Zhongshan
applied for
a sales contract Trading
execution.
dispute won the
case.
Zhongshan The first The verdict of
Trading sued instance first instance The first round
Guangzhou supported came into force. of execution
Yingjing Trade 31.36 No all the Zhongshan ended. No
Co., Ltd. for a claims by Trading has properties have
sales contract Zhongshan applied for been recovered.
dispute Trading. execution.
The first The verdict of
Zhongshan
instance first instance The execution
Trading sued
supported came into force. has been
Shaoyang Jiahe
33.64 No all the Zhongshan completed. All
Trading Co., Ltd.
claims by Trading has the payment has
for a sales contract
Zhongshan applied for been recovered.
dispute
Trading. execution.
Both the
Zhongshan
first
Trading sued The verdict of
instance and
Shanghai Tongli second instance The execution is
the second
Trading Co., Ltd. came into force. in progress.
instance
and eight natural 2,932.01 No Zhongshan RMB71,500
ruled that
person defendants Trading has was recovered
Zhongshan
including Liu for a applied for in June.
Trading
sales contract execution.
won the
dispute
case.
No (Note: The first
Yin sued C&S
Whether instance Wait for the
Paper for a dispute
30.25 projected ruled that verdict of the first Not applicable
over the right to
liabilities will C&S won instance.
health
be incurred the case.
44
C&S Paper Co., Ltd. Semi-annual Report 2021
cannot be The second
determined prior instance
to the verdict.) sent the
case back to
the first
instance
court for a
retrial. The
first
instance
retrial has
been
opened.
C&S is
waiting for
the verdict.
Xi’an Minsheng
has not fulfilled
Sichuan C&S sued The case
the repayment The first round
Xi’an Minsheng was
obligation in line of enforcement
Department Store mediated
5.65 No with the paper of ended;
Management Co., and closed
civil mediation. RMB5,000 were
Ltd. for a contract in the first
Sichuan C&S has recovered.
dispute instance.
applied for legal
enforcement.
Zhongshan The verdict of
Trading sued The verdict first instance
First round of
Guangzhou Jv Se of first came into force.
execution
Mai Ke Internet 28.55 No instance Zhongshan
ended. No fund
Service Co., Ltd. came into Trading has
was recovered.
for a sales contract force. applied for
dispute execution..
The case
was
Xincheng Tongda
mediated
Xiaogan C&S sued has not fulfilled
and closed
Wuhan Xincheng obligation in line
in the first
Tongda Trading with the paper of
525.16 No instance Ongoing
Co., Ltd. for a civil mediation.
(with a
sales contract Xiaogan C&S has
mediation
dispute applied for legal
amount of
enforcement..
RMB4,496,
05235).
Wait for the
verdict to be
The first served to the
instance has defendant. After
Sales contract
31.08 No ruled in the verdict comes Not applicable
dispute with Yu
favor of the into force, the
company. company will
apply for legal
enforcement.
45
C&S Paper Co., Ltd. Semi-annual Report 2021
IX. Penalty and Rectification
□ Applicable √ Not applicable
No penalties and rectifications of the Company occurred during the reporting period.
X. Integrity Records of the Company and its Controlling Shareholder and Actual Controller
□ Applicable √ Not applicable
XI. Material Related Party Transaction
1. Related party transactions relating to daily operations
√ Applicable □ Not applicable
Amount
Proporti Availabl
Content Pricing of Approve Whether Settleme
Party of Type of Price of on in the e market
of rules of related d to nt of Index
related Related related related amount prices Date of
related related party transacti outstrip related of
party relations party party of for disclosu
party party transacti on limit the party disclos
transacti hip transacti transacti similar similar re
transacti transacti on (RMB1 approve transacti ure
on on ons transacti transacti
on on (RMB1 0,000) d limit on
ons ons
0,000)
Deng
Yingzho Actual
ng, controll Market Market Transfer Market Decemb
2019-
Deng er of the Lease Rental fair fair 147.4 25.49% 294.81 No settleme fair er 06,
93
Guanbia Compan price price nt price 2019
o, Deng y
Guanjie
Deng
Yingzho Actual
ng, controll Market Market Transfer Market
October 2020-
Deng er of the Lease Rental fair fair 16.68 2.88% 33.36 No settleme fair
30, 2020 82
Guanbia Compan price price nt price
o, Deng y
Guanjie
Deng
Yingzho Actual
ng, controll Market Market Transfer Market
Deng er of the Lease Rental fair fair 0.65 0.11% Yes settleme fair
Guanbia Compan price price nt price
o, Deng y
Guanjie
Pengzho A
u compan
y where Daily
Lexiang
the operatio Market Market Transfer Market Decemb
shenghu Sale of 2020-
senior n fair fair 79.64 0.02% 150 No settleme fair er 16,
o goods 99
manager transacti price price nt price 2020
Trading
Yue on
Co.,
Ltd. Yong’s
son
46
C&S Paper Co., Ltd. Semi-annual Report 2021
holds
shares
and
serves
as a
supervis
or
A
compan
y where
the
Sichuan senior
West manager
Daily
Lexiang Yue
operatio Market Market Transfer Market Decemb
shenghu Yong’s Sale of 2020-
n fair fair 28.91 0.01% 50 No settleme fair er 16,
o son goods 99
transacti price price nt price 2020
Trading holds
on
Co., shares
Ltd. and
serves
as a
supervis
or
A
compan
y where
the
senior
Chongqi manager
Daily
ng Yue
operatio Market Market Transfer Market Decemb
Qinyue Yong’s Sale of 2020-
n fair fair 0.00% 100 No settleme fair er 16,
Trading brother goods 99
transacti price price nt price 2020
Co., holds
on
Ltd. shares
and
serves
as a
supervis
or
Total -- -- 273.28 -- 628.17 -- -- -- -- --
Details of returns of large sales Not applicable
Where the total amount of daily
The excessive amounts of related party transaction of RMB6,500 in the reporting period is
related-party transactions occurred in
renting properties from related parties. It falls within the authority of the Chairman of the
the current period is estimated by
Company and can be implemented without the approval of the Board of Directors.
category, actual performance during
the reporting period (if any)
Reason(s) for a large difference
between the transaction price and the Exercise at fair price
market reference price (if applicable)
2. Related party transactions relating to acquisition and sale of assets or equity
□ Applicable √ Not applicable
During the reporting period, there was no related party transaction relating to acquisition and sale of assets or
equity.
47
C&S Paper Co., Ltd. Semi-annual Report 2021
3. Related party transactions relating to joint outbound investment
□ Applicable √ Not applicable
During the reporting period, there was no related party transaction relating to joint outbound investment.
4. Related party transactions relating to creditor’s rights and debts
√ Applicable □ Not applicable
Whether there was non-operating related party transaction relating to creditor’s rights and debts
□ Yes √ No
During the reporting period, there was no non-operating related party transaction relating to creditor’s rights and
debts.
5. Transactions with related party financial companies or financial companies controlled by the Company
□ Applicable √ Not applicable
The Company did not have deposit, loan, credit or other financial business transactions with financial companies
that have related relationship, financial companies controlled by the Company and related parties.
6. Other significant related party transactions
□ Applicable √ Not applicable
During the reporting period, there were no other significant related party transactions.
XII. Significant Contracts and Their Performance
1. Custody, contracting and leasing matters
(1) Custody
□ Applicable √ Not applicable
During the reporting period, there was no custody.
(2) Contracting
□ Applicable √ Not applicable
48
C&S Paper Co., Ltd. Semi-annual Report 2021
During the reporting period, there was no contracting.
(3) Leasing
√ Applicable □ Not applicable
Description of leasing matters
On December 5, 2019, the Company convened the 19th meeting of the fourth session of the Board of Directors
and the 16th meeting of the fourth session of the Board of Supervisors, on which the Proposal on Daily Related
Party Transactions in 2021 was reviewed and approved. Due to the needs of operation and business, the Board of
Directors of the Company agreed that the Company and its wholly-owned subsidiary, Zhongshan Zhongshun
Trading Co., Ltd., leased the real estate jointly owned by Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng
Guanjie, the actual controllers of the Company. The lease term is from January 1, 2020 to December 31, 2021, and
the total rent involved is RMB5,896,200. During the deliberation of this proposal, the Company’s three related
directors, Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie, withdrew from voting, while the
remaining six attending directors unanimously approved this related party transaction. The three independent
directors of the Company respectively issued Prior Approval Opinions and Opinions of Independent Directors on
the proposal, agreeing to submit the proposal to the Board of Directors for deliberation and agreeing to the related
party transaction.
On October 29, 2020, the Company convened the 28th meeting of the fourth session of the Board of Directors and
the 22nd meeting of the fourth session of the Board of Supervisors, on which the Proposal on Adding to Related-
Party Leasing Transactions was reviewed and approved. The Board of Directors of the Company agreed that the
Company’s wholly-owned subsidiary, C&S (Yunfu) Paper Co., Ltd., leased the real estate jointly owned by the
actual controllers of the Company Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie to be used as
its R&D center. The lease term is from November 1, 2020 to December 31, 2021, and the total rent involved is
RMB389,300. During the deliberation of this proposal, the Company’s three related directors, Mr. Deng
Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie, withdrew from voting, while the remaining six attending
directors unanimously approved this related party transaction. The three independent directors of the Company
respectively issued Prior Approval Opinions and Opinions of Independent Directors on the proposal, agreeing to
submit the proposal to the Board of Directors for deliberation and agreeing to the related party transaction.
The Company’s holding subsidiary, Dolemi Sanitary Products Co., Ltd., leased the real estate jointly owned by
49
C&S Paper Co., Ltd. Semi-annual Report 2021
actual controllers of the Company Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie to be used as
residence. The lease term is from December 1, 2020 to December 31, 2021, and the total rent involved is
RMB14,100. The amount of this related party transaction falls within the approval authority of the Company’s
Chairman and has been approved by the Chairman.
Projects whose profits or losses brought to the Company reached more than 10% of the total profits of the
Company during the reporting period
□ Applicable √ Not applicable
During the reporting period, there were no leasing projects whose profits or losses brought to the Company
reached more than 10% of the total profits of the Company during the reporting period.
2. Material guarantee
√ Applicable □ Not applicable
Unit: RMB10,000
External guarantee of the Company and subsidiaries (excluding guarantee for subsidiaries)
Disclosure
date of Whether Whether
Counter
Name of relevant Actual date Actual it has it is
Guarantee Guarantee Collateral guarant Guarantee
guarantee announcem of guarantee been related
limit type (if any) ee (if period
object ent on occurrence amount complete party
any)
guarantee d guarantee
limit
Joint
Wuhan Jie Joint and and
Rou E- December September several several 2020.9.23
8,000 4,610 None No No
commerce 06, 2019 23, 2020 liability liability -2021.9.4
Co., Ltd. guarantee guarant
ee
Joint
Shanghai Joint and and
2020.10.1
Junmeng E- December October 16, several several
13,000 4,480 None 6- No No
commerce 06, 2019 2020 liability liability
2021.9.4
Co., Ltd. guarantee guarant
ee
Total approved amount Total actual amount of
of external guarantee external guarantee
0 0
during the reporting during the reporting
period (A1) period (A2)
Total approved amount
Total actual guarantee
of external guarantee at
21,000 balance at the end of the 9,090
the end of the reporting
reporting period (A4)
period (A3)
Guarantee of the Company for subsidiaries
Name of Disclosure Guarantee Actual date Actual Guarantee Collateral Counter Guarantee Whether Whether
50
C&S Paper Co., Ltd. Semi-annual Report 2021
guarantee date of limit of guarantee type (if any) guarant period it has it is
object relevant occurrence amount ee (if been related
announcem any) complete party
ent on d guarantee
guarantee
limit
Joint and
2020.9.15
Zhongshan December September several
15,000 12,385.56 None None - No No
Trading 05, 2019 15, 2020 liability
2023.8.31
guarantee
Joint and
Zhongshan December March 02, several 2021.3.2-
13,600 0 None None No No
Trading 15, 2020 2021 liability 2026.3.1
guarantee
Joint and 2020.12.3
Zhongshan December December several 0-
3,000 0 None None No No
Trading 05, 2019 30, 2020 liability 2024.12.3
guarantee 1
Joint and
2020.12.1
Zhongshan December December several
25,000 0 None None 5- No No
Trading 05, 2019 15, 2020 liability
2024.12.9
guarantee
Joint and 2019.7.12
Zhongshan December July 12, several -
9,000 4,610 None None No No
Trading 19, 2018 2019 liability 2024.12.3
guarantee 1
Joint and
2020.10.1
Jiangmen December October 15, several
12,000 1,943.18 None None 5- No No
C&S 05, 2019 2020 liability
2023.8.31
guarantee
Joint and 2018.3.27
Jiangmen December March 27, several -
10,000 0 None None No No
C&S 15, 2017 2018 liability 2023.12.3
guarantee 1
Joint and
2021.1.4-
Jiangmen December January 04, several
12,000 4,648.97 None None 2023.11.0 No No
C&S 15, 2020 2021 liability
1
guarantee
Joint and 2020.11.2
Jiangmen December November several 6-
10,000 1,382.68 None None No No
C&S 05, 2019 16, 2020 liability 2023.11.2
guarantee 5
Joint and
2021.5.13
Jiangmen December May 13, several
15,000 0 None None - No No
C&S 15, 2020 2021 liability
2024.3.30
guarantee
Joint and 2020.12.2
Jiangmen December December several 3-
5,000 0 None None No No
C&S 05, 2019 23, 2020 liability 2025.12.2
guarantee 3
Joint and 2018.5.30
Jiangmen December May 30,
16,000 0 several None None - No No
C&S 15, 2017 2018
liability 2023.5.30
51
C&S Paper Co., Ltd. Semi-annual Report 2021
guarantee
Joint and
2020.4.14
December April 14, several
Yunfu C&S 8,000 0 None None - No No
05, 2019 2020 liability
2028.4.14
guarantee
Joint and 2020.11.2
December November several 0-
Yunfu C&S 5,000 800 None None No No
05, 2019 20, 2020 liability 2023.12.3
guarantee 1
Joint and
2020.10.1
December October 15, several
Yunfu C&S 10,000 4,076.71 None None 5- No No
05, 2019 2020 liability
2023.8.31
guarantee
Joint and 2020.11.1
December October 15, several 6-
Yunfu C&S 10,000 1,160.02 None None No No
05, 2019 2020 liability 2023.11.1
guarantee 5
Joint and
2021.5.13
December May 13, several
Yunfu C&S 15,000 0 None None - No No
15, 2020 2021 liability
2024.3.30
guarantee
Joint and
2021.1.4-
December January 04, several
Yunfu C&S 7,000 1,722.39 None None 2023.11.0 No No
15, 2020 2021 liability
1
guarantee
Joint and
2020.2.25
December February several
Hubei C&S 10,000 0 None None - No No
05, 2019 25, 2020 liability
2025.12.4
guarantee
Zhongshan
Trading, Joint and
Hubei December June 01, several 2021.6.1-
9,705.6 4,906.41 None None No No
C&S, and 15, 2020 2021 liability 2023.4.22
Macao guarantee
C&S
Jiangmen
Joint and
C&S,
December January 08, several 2019.1.8-
Yunfu 25,000 19.18 None None No No
19, 2018 2019 liability 2022.1.8
C&S,
guarantee
Hubei C&S
C&S Hong
Kong,
Joint and
Zhong
December July 08, several 2020.7.8-
Shun 32,352 482.57 None None No No
05, 2019 2020 liability 2024.7.31
Internationa
guarantee
l, Macao
C&S
C&S Hong
Kong, Joint and
2020.3.20
Zhong December March 20, several
16,913.96 1,341.23 None None - No No
Shun 05, 2019 2020 liability
2022.9.19
Internationa guarantee
l
52
C&S Paper Co., Ltd. Semi-annual Report 2021
C&S Hong Joint and 2021.3.17
Kong,, December March 17, several -
33,328 2,523.47 None None No No
Macao 15, 2020 2021 liability 2025.12.3
C&S guarantee 1
C&S Hong
Kong,
Joint and
Zhong 2020.2.12
December February several
Shun 41,087.04 11,396.07 None None - No No
05, 2019 12, 2020 liability
Internationa 2022.2.12
guarantee
l, Macao
C&S
C&S Hong Joint and
2020.2.25
Kong, December February several
12,940.8 2,463.14 None None - No No
Macao 05, 2019 25, 2020 liability
2022.2.25
C&S guarantee
C&S Hong Joint and
2020.11.1
Kong,, December November several
6,470.4 0 None None 2- No No
Macao 05, 2019 12, 2020 liability
2024.3.1
C&S guarantee
C&S Hong Joint and
2020.3.27
Kong,, December March 27, several
15,528.96 1,110.43 None None - No No
Macao 05, 2019 2020 liability
2023.2.19
C&S guarantee
C&S Hong
Kong,
Joint and
Zhong 2018.9.28
December September several
Shun 17,997.12 0 None None - No No
15, 2017 28, 2018 liability
Internationa 2022.8.31
guarantee
l, Macao
C&S
C&S Hong
Kong,
Joint and
Zhong 2020.1.30
December January 30, several
Shun 19,411.2 609.5 None None - No No
05, 2019 2020 liability
Internationa 2023.1.30
guarantee
l, Macao
C&S
Joint and
2018.3.23
Macao December March 23, several
7,117.44 1,553.22 None None - No No
C&S 15, 2017 2018 liability
2022.9.23
guarantee
Joint and
2018.8.15
Macao December August 15, several
7,000 794.98 None None - No No
C&S 15, 2017 2018 liability
2025.8.15
guarantee
Joint and
2021.3.30
Macao December March 30, several
6,470.4 1,009.38 None None - No No
C&S 15, 2020 2021 liability
2024.3.30
guarantee
C&S Hong
Joint and
Kong,
December September several 2020.9.1-
Zhong 22,646.4 2,690.1 None None No No
05, 2019 01, 2020 liability 2022.7.9
Shun
guarantee
Internationa
53
C&S Paper Co., Ltd. Semi-annual Report 2021
l, Macao
C&S
Joint and
C&S Hong December July 01, several 2020.7.1-
14,105.47 11,376.24 None None No No
Kong 05, 2019 2020 liability 2022.6.30
guarantee
Joint and
Macao December July 01, several 2020.7.1-
27,046.27 8,717.77 None None No No
C&S 05, 2019 2020 liability 2022.6.30
guarantee
Total approved amount Total actual amount of
of guarantee for guarantee for
112,104 14,810.62
subsidiaries during the subsidiaries during the
reporting period (B1) reporting period (B2)
Total approved amount Total actual guarantee
of guarantee for balance to subsidiaries at
525,721.06 83,723.2
subsidiaries at the end of the end of the reporting
the reporting period (B3) period (B4)
Guarantee of subsidiaries to subsidiaries
Disclosure
date of Whether Whether
Counter
Name of relevant Actual date Actual it has it is
Guarantee Guarantee Collateral guarant Guarantee
guarantee announcem of guarantee been related
limit type (if any) ee (if period
object ent on occurrence amount complete party
any)
guarantee d guarantee
limit
Total amount of the Company’s guarantee (the sum of the first three items)
Total actual amount of
Total approved amount of
guarantee during the
guarantee during the reporting 112,104 14,810.62
reporting period (A2 +
period (A1 + B1 + C1)
B2 + C2)
Total actual guarantee
Total approved amount of
balance at the end of the
guarantee at the end of the 546,721.06 92,813.2
reporting period
reporting period (A3 + B3 + C3)
(A4+B4+C4)
Proportion of the total actual amount of guarantee
19.13%
(A4 + B4 + C4) in the net assets of the Company
Wherein:
Balance of guarantee for shareholders, actual
0
controllers and their related parties (D)
Balance of debt guarantee provided directly or
indirectly for objects whose asset-liability ratio 0
exceeds 70% (E)
Amount of guarantees in excess of 50% of net
31,011.15
assets (F)
Total amount of the above three guarantees (D + E
31,011.15
+ F)
Description of situations that the guarantee
liability has occurred or there is evidence showing
that the Company may be jointly and severally None
liable for undue guarantee contracts during the
reporting period (if any)
54
C&S Paper Co., Ltd. Semi-annual Report 2021
Description of providing external guarantee in
No
violation of prescribed procedures (if any)
Detailed description on the guarantees with different types: None
3. Entrusted wealth management
√ Applicable □ Not applicable
Unit: RMB10,000
Amount overdue but
Source of entrusted Incurred amount of
Amount overdue but not recovered with
Specific type wealth management entrusted wealth Undue balance
not recovered impairment having
funds management
been accrued
Wealth management
Self-owned fund 1,000 0 0 0
product of bank
Wealth management
product of securities Self-owned fund 9,500 0 0 0
company
Total 10,500 0 0 0
Explanation of high-risk entrusted wealth management with large individual amount or low safety, poor liquidity
and no principal guarantee
□ Applicable √ Not applicable
Entrusted wealth management is expected to fail to recover the principal or there are other circumstances that may
lead to impairment
□ Applicable √ Not applicable
4. Significant contracts for daily operation
□ Applicable √ Not applicable
5. Other significant contracts
□ Applicable √ Not applicable
There were no other significant contracts during the reporting period.
XIII. Other Significant Events
√ Applicable □ Not applicable
Announcement Announce Disclosure media
No. Announcement name
time ment
55
C&S Paper Co., Ltd. Semi-annual Report 2021
number
Announcement on Resolutions of the 30th Meeting of the Fourth
1 January 06, 2021 2021-01
Session of the Board of Directors
Announcement on Resolutions of the 24th Meeting of the Fourth
2 January 06, 2021 2021-02
Session of the Board of Supervisors
3 January 06, 2021 Announcement on the Re-election of the Board of Directors 2021-03
4 January 06, 2021 Announcement on the Re-election of the Board of Supervisor 2021-04
5 January 06, 2021 Plan of the Company for Repurchasing Partial Public Shares 2021-05
6 January 06, 2021 Notice on Convening 2021 First Extraordinary General Meeting 2021-06
Announcement on Completion of Stock Sales and Termination of
7 January 06, 2021 2021-07
Phase II Employee Stock Ownership Plan Securities Times,
Announcement on Pre-disclosure of the Share Reduction Plan by Securities Daily,
8 January 06, 2021 2021-08
Senior Management of the Company China Securities
Announcement on Shareholding Information of the Top Ten Journal, and CNINF
9 January 09, 2021 2021-09
Shareholders in Matters Relevant to Share Repurchase
10 January 09, 2021 Share Repurchase Report 2021-10
Announcement on Resolutions of the 31st Meeting of the Fourth
11 January 14, 2021 2021-11
Session of the Board of Directors
Announcement on Resolutions of the 25th Meeting of the Fourth
12 January 14, 2021 2021-12
Session of the Board of Supervisors
Announcement of the Company on Building a New 400,000-ton High-
13 January 14, 2021 2021-13
grade Household Paper Project
Announcement on Use of Self-owned Idle Funds for Reverse Repo of
14 January 14, 2021 2021-14
Treasury Bonds in 2021
15 January 14, 2021 Notice on Convening 2021 Second Extraordinary General Meeting 2021-15
Announcement on the Re-election of the Employee Representative
16 January 14, 2021 2021-16
Supervisors
Announcement on Wholly-owned Subsidiary Obtaining the High-tech
17 January 15, 2021 2021-17
Enterprise Certificate (Renewal)
Announcement on Resolutions of 2021 First Extraordinary General
18 January 22, 2021 2021-18
Meeting of Shareholders
Announcement on Resolutions of the 1st Meeting of the Fifth Session
19 January 22, 2021 2021-19
of the Board of Directors
Announcement on Resolutions of the 1st Meeting of the Fifth Session
20 January 22, 2021 2021-20
of the Board of Supervisors
21 January 22, 2021 Announcement on the Appointment of Senior Managers 2021-21
Announcement on the Appointment of the Person in Charge of the
22 January 22, 2021 2021-22
Audit Dept. and the Representative of Securities Affairs
Announcement on the Completion of Industrial and Commercial
23 January 22, 2021 2021-23
Registration Amendment of Subsidiaries
24 January 28, 2021 Announcement on the First Repurchase of Company Shares 2021-24
25 January 29, 2021 Announcement on Progress of Repurchase of Company Shares 2021-25
Announcement on Resolutions of 2021 Second Extraordinary General
26 January 30, 2021 2021-26
Meeting of Shareholders
27 January 30, 2021 Announcement on Progress of Repurchase of Company Shares 2021-27
28 February 03, 2021 Announcement on Progress of Repurchase of Company Shares 2021-28
29 February 05, 2021 Announcement on Progress of Repurchase of Company Shares 2021-29
Announcement on Completion of the Share Reduction Plan by Senior
30 February 06, 2021 2021-30
Management of the Company
31 February 27, 2021 Announcement on Investment and Establishment of a Wholly-owned 2021-31
56
C&S Paper Co., Ltd. Semi-annual Report 2021
Subsidiary and Completion of Industrial and Commercial
Registration
32 February 27, 2021 Annual Performance Bulletin 2020 2021-32
33 March 03, 2021 Announcement on Progress of Repurchase of Company Shares 2021-33
Announcement on Completion of the Industrial and Commercial
34 March 04, 2021 2021-34
Registration Amendment of the Company
Announcement on the Repurchase and Deregistration Completion of
35 March 04, 2021 Reserved Restricted Stocks Awarded in the First Grant under the 2018 2021-35
Stock Option and Restricted Stock Incentive Plan
Announcement on Independent Directors Obtaining the Qualification
36 March 06, 2021 2021-36
Certificate for Independent Directors
Announcement on the Early Termination of the Share Reduction Plan
37 March 06, 2021 2021-37
by Directors and Senior Management of the Company
Announcement on the Completion of Industrial and Commercial
38 March 10, 2021 2021-38
Registration Amendment of Wholly-owned Subsidiary
Announcement on the Progress of the New 400,000-ton High-grade
39 March 16, 2021 2021-39
Household Paper Project
40 March 19, 2021 Announcement on Resignation of the Company’s Director 2021-40
Announcement on Resolutions of the 2nd Meeting of the Fifth Session
41 March 23, 2021 2021-41
of the Board of Directors
Announcement on By-election of Non-Independent Directors of the
42 March 23, 2021 2021-42
Fifth Session of the Board of Directors
43 March 23, 2021 Announcement on Change of President of the Company 2021-43
Announcement on the Additional Appointment of the Representative of
44 March 23, 2021 2021-44
Securities Affairs
45 March 23, 2021 Notice on Convening the 2021 Third Extraordinary General Meeting 2021-45
46 March 24, 2021 Announcement on Progress of Repurchase of Company Shares 2021-46
47 March 25, 2021 Announcement on Progress of Repurchase of Company Shares 2021-47
48 April 06, 2021 Announcement on Progress of Repurchase of Company Shares 2021-48
Announcement on Resolutions of the 2021 Third Extraordinary
49 April 08, 2021 2021-49
General Meeting
Announcement on Acceptance Completion of Phase II of Hubei New
50 April 10, 2021 2021-50
Project
Announcement on Resolutions of 3rd Meeting of the Fifth Session of
51 April 13, 2021 2021-51
the Board of Directors
52 April 13, 2021 Announcement on Change of Chairman of the Company 2021-52
53 April 13, 2021 Announcement on Appointment of the Vice President of the Company 2021-53
Announcement on Resolutions of the 4th Meeting of the Fifth Session
54 April 29, 2021 2021-54
of the Board of Directors
Announcement on Resolutions of the 2nd Meeting of the Fifth Session
55 April 29, 2021 2021-55
of the Board of Supervisors
56 April 29, 2021 Summary of Annual Report 2020 2021-56
57 April 29, 2021 Announcement on the Proposal on 2020 Profit Distribution Plan 2021-57
58 April 29, 2021 Announcement on Appointment of the Vice President of the Company 2021-58
59 April 29, 2021 Notice on Convening 2020 Annual General Meeting 2021-59
Notice on Convening the Online Performance Presentation for Annual
60 April 29, 2021 2021-60
Report 2020
61 April 29, 2021 Text of the First Quarter Report 2021 2021-61
62 April 29, 2021 Announcement on Resignation of the Director and Co-president of the 2021-62
57
C&S Paper Co., Ltd. Semi-annual Report 2021
Company
63 May 06, 2021 Announcement on Progress of Repurchase of Company Shares 2021-63
Announcement on Wholly-owned Subsidiary Obtaining the High-tech
64 May 07, 2021 2021-64
Enterprise Certificate (Renewal)
65 May 08, 2021 Announcement on Progress of Repurchase of Company Shares 2021-65
Announcement on the Issuance of a Proposal by Chairman and Actual
66 May 10, 2021 Controllers of the Company to All Employees for Increasing 2021-66
Shareholding of the Company
Announcement on Commitments by Actual Controllers of the
67 May 10, 2021 2021-67
Company of Not Reducing or Pledging Shares of the Company
Announcement on Increase of Company Shares by Senior
68 May 13, 2021 2021-68
Management and Supervisors of the Company
Announcement on Increase of Company Shares by Chairman and
69 May 14, 2021 2021-69
Senior Management of the Company
Announcement on Increase of Company Shares by Senior
70 May 19, 2021 2021-70
Management and Supervisors of the Company
71 May 19, 2021 Reply to the Letter of Concern from Shenzhen Stock Exchange 2021-71
Announcement on Resolutions of 2020 Annual General Meeting of
72 May 20, 2021 2021-72
Shareholders
Announcement on Resolutions of the 5th Meeting of the Fifth Session
73 May 22, 2021 2021-73
of the Board of Directors
Announcement on Resolutions of the 3rd Meeting of the Fifth Session
74 May 22, 2021 2021-74
of the Board of Supervisors
Announcement on Adjusting the Price and Amount of the Company’s
75 May 22, 2021 2021-75
Share Repurchase
76 May 22, 2021 Announcement on Changes to Accounting Policies 2021-76
Announcement on Change of the Person in Charge of the Audit Dept.
77 May 22, 2021 2021-77
of the Company
78 May 22, 2021 Announcement on Continued Engagement of the Accounting Firm 2021-78
Announcement on Amending the Articles of Association of the
79 May 22, 2021 2021-79
Company
Announcement on Achieving the Unlock Conditions of the Second
80 May 22, 2021 Unlock Period for Restricted Stocks Awarded in the First Grant under 2021-80
the Company’s 2018 Stock Option and Restricted Stock Incentive Plan
Announcement on Achieving the Exercise Conditions of the Second
81 May 22, 2021 Exercise Period for Stock Options Awarded in the First Grant under 2021-81
the Company’s 2018 Stock Option and Restricted Stock Incentive Plan
Announcement on the Repurchase and Deregistration of Partial
82 May 22, 2021 Restricted Stocks Awarded in the First Grant under the Company’s 2021-82
2018 Stock Option and Restricted Stock Incentive Plan
Announcement on the Deregistration of Partial Stock Options
83 May 22, 2021 Awarded in the First Grant under the Company’s 2018 Stock Option 2021-83
and Restricted Stock Incentive Plan
84 May 22, 2021 Notice on Convening the 2021 Fourth Extraordinary General Meeting 2021-84
Announcement on Increase of Company Shares by Supervisors of the
85 May 29, 2021 2021-85
Company
86 June 02, 2021 Announcement on Progress of Repurchase of Company Shares 2021-86
Indicative Announcement on Convening the 2021 Fourth
87 June 03, 2021 2021-87
Extraordinary General Meeting
Announcement on Completion of the Industrial and Commercial
88 June 05, 2021 2021-88
Registration Amendment of the Company
89 June 08, 2021 Announcement on Resolutions of the 2021 Fourth Extraordinary 2021-89
58
C&S Paper Co., Ltd. Semi-annual Report 2021
General Meeting
90 June 08, 2021 Announcement on Capital Reduction 2021-90
91 June 08, 2021 Announcement on Progress of Repurchase of Company Shares 2021-91
92 June 08, 2021 Announcement on Progress of Repurchase of Company Shares 2021-92
93 June 11, 2021 Announcement on Implementation of 2020 Annual Equity Allocation 2021-93
Announcement on Resolutions of the 6th Meeting of the Fifth Session
94 June 19, 2021 2021-94
of the Board of Directors
Announcement on Resolutions of the 4th Meeting of the Fifth Session
95 June 19, 2021 2021-95
of the Board of Supervisors
Announcement on Adjusting the Exercise Price of Stock Options
96 June 19, 2021 2021-96
under 2018 Stock Option and Restricted Stock Incentive Plan
Indicative Announcement on Adopting the Autonomous Exercise Mode
in the Second Exercise Period for Stock Options Awarded in the First
97 June 28, 2021 2021-97
Grant under the Company’s 2018 Stock Option and Restricted Stock
Incentive Plan
Indicative Announcement on Lifting the Sales Restrictions in the
Second Unlock Period for Restricted Stocks Awarded in the First
98 June 28, 2021 2021-98
Grant under the Company’s 2018 Stock Option and Restricted Stock
Incentive Plan
XIV. Significant Events of Subsidiaries of the Company
√ Applicable □ Not applicable
Announcement Announcement
No. Announcement name Disclosure media
time number
Announcement on Wholly-owned Subsidiary Obtaining the
1 January 15, 2021 2021-17
High-tech Enterprise Certificate (Renewal)
Announcement on the Completion of Industrial and Commercial
2 January 22, 2021 2021-23
Registration Amendment of Subsidiaries
Securities Times,
Announcement on Investment and Establishment of a Wholly-
Securities Daily,
3 February 27, 2021 owned Subsidiary and Completion of Industrial and 2021-31
China Securities
Commercial Registration
Journal, and CNINF
Announcement on the Completion of Industrial and Commercial
4 March 10, 2021 2021-38
Registration Amendment of Wholly-owned Subsidiary
Announcement on Wholly-owned Subsidiary Obtaining the
5 May 07, 2021 2021-64
High-tech Enterprise Certificate (Renewal)
59
C&S Paper Co., Ltd. Semi-annual Report 2021
Section VII Changes in Shareholding and Information of Shareholders
I. Changes in Share Capital
1. Changes in shares
Unit: share
Before change Increase/decrease (+, -) of this change After change
Shares
New transferr
Percentag Bonus Percentag
Number shares ed from Others Subtotal Number
e shares e
issued surplus
reserve
I. Shares subject to
36,858,323 2.81% 75,000 -7,165,895 -7,090,895 29,767,428 2.27%
selling restrictions
1. Shares held by the
state
2. Shares held by
state-owned legal
person
3. Shares held by
other domestic 34,906,289 2.66% -7,283,961 -7,283,961 27,622,328 2.11%
shareholders
Including: Shares
held by domestic legal
persons
Shares held by
domestic natural 34,906,289 2.66% -7,283,961 -7,283,961 27,622,328 2.11%
persons
4. Shares held by
1,952,034 0.15% 75,000 118,066 193,066 2,145,100 0.16%
foreign shareholders
Including: Shares
held by foreign legal
persons
Shares held by
1,952,034 0.15% 75,000 118,066 193,066 2,145,100 0.16%
foreign natural persons
II. Shares without
1,274,840,644 97.19% 386,478 6,954,005 7,340,483 1,282,181,127 97.73%
selling restrictions
1. RMB-denominated
1,274,840,644 97.19% 386,478 6,954,005 7,340,483 1,282,181,127 97.73%
ordinary shares
2. Domestic listed
foreign shares
3. Overseas listed
foreign shares
4. Others
III. Total number of 1,311,698,967 100.00% 461,478 -211,890 249,588 1,311,948,555 100.00%
60
C&S Paper Co., Ltd. Semi-annual Report 2021
shares
Explanation on changes in shares
√ Applicable □ Not applicable
1. During January 1, 2021 and February 28, 2021, vesting incentive recipients of stock options awarded in the first
grant and reserved stock options under the 2018 Stock Option and Restricted Stock Incentive Plan exercised the
right of 461,478 shares. As a result, the Company’s total share capital increased by 461,478 shares.
2. During the first unlock period for restricted shares awarded in the first grant under the 2018 Stock Option and
Restricted Stock Incentive Plan, 24 incentive recipients were unable to unlock the shares since they left the
Company or failed to pass performance appraisal or unable to unlock all the shares since they passed the
performance appraisal but failed to get a full mark and therefore could only unlock shares proportioned to their
mark. As a result, the Company had to repurchase and cancel a total of 211,890 restricted shares that had been
granted but not unlocked. The deregistration procedures for the aforementioned restricted shares had been
completed at the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited as at March
3, 2021. As a result, the Company’s total share capital decreased by 211,890 shares.
Approval of changes in shares
√ Applicable □ Not applicable
1. The Board of Directors’ disposition of the repurchase and deregistration matters for the first unlocking of
reserved restricted shares under the 2018 Stock Option and Restricted Stock Incentive Plan had been authorized by
the 2019 First Extraordinary General Meeting and reviewed and approved by the 28th meeting of the fourth
session of the Board of Directors and 22nd meeting of the fourth session of the Board of Supervisors.
2. The Board of Directors’ disposition of the exercise matters for the first exercise period of restricted stock
options awarded in the first grant and reserved stock options under the 2018 Stock Option and Restricted Stock
Incentive Plan had been authorized by the 2019 First Extraordinary General Meeting and reviewed and approved
by the 23rd meeting of the fourth session of the Board of Directors, the 19th meeting of the fourth session of the
Board of Supervisors, the 28th meeting of the fourth session of the Board of Directors, and the 22nd meeting of
the fourth session of the Board of Supervisors.
Transfer of title of changed shares
□ Applicable √ Not applicable
Implementation of share repurchase
61
C&S Paper Co., Ltd. Semi-annual Report 2021
√ Applicable □ Not applicable
On January 5, 2021, the Company held the 30th meeting of the fourth session of the Board of Directors which
reviewed and passed the Proposal on Share Repurchase of the Company. The Company plans to repurchase shares
of the Company via centralized bidding transaction, with a total amount of RMB180million (inclusive) to
RMB360 million (inclusive). The repurchase price shall not outstrip RMB31.515/share (inclusive). All shares to
be repurchased will be used for equity incentives or employee stock ownership plans.
On May 21, 2021, the Company held the fifth meeting of the fifth session of the Board of Directors which
reviewed and passed the Proposal on Adjusting the Price and Amount of the Company’s Share Repurchase. Taking
into account positive changes in the capital market and the Company’s share price and based on confidence in
operations and future business development, the Company adjusts the upper price limit of the share repurchase
from RMB31.515/share (inclusive) to RMB45/share (inclusive) and the amount range from RMB180-360 million
to RMB330-660 million. This could ensure the smooth implementation of the share repurchase and relevant
incentive matters in the future.
From January 27 to June 30, 2021, the Company repurchased a total of 18,535,177 shares through its special
repurchase securities account, accounting for 1.4128% of its total share capital at the time. The highest and lowest
transaction price was RMB34.50/share and RMB23.27/share, respectively, and the total transaction amount was
RMB532,605,631.96 (excluding transaction fee).
Implementation of share repurchase by centralized bidding
□ Applicable √ Not applicable
Impact of share changes on basic earnings per share and diluted earnings per share, net assets per share
attributable to ordinary shareholders of the Company, and other financial indicators in last year and the latest
period
□ Applicable √ Not applicable
Other contents considered necessary by the Company or required to be disclosed by the securities regulatory
authority
□ Applicable √ Not applicable
2. Changes in shares subject to selling restrictions
√ Applicable □ Not applicable
62
C&S Paper Co., Ltd. Semi-annual Report 2021
Unit: share
Number of Increase in Number of
Number of shares
shares released shares subject to shares subject to
subject to selling Date of release
Shareholder’s from selling selling selling Reason for Selling
restrictions at the from selling
name restrictions restrictions restrictions at restrictions
beginning of the restrictions
during the during the the end of the
period
period period year
Lock-up shares of
Deng Yingzhong 5,064,608 5,064,608 Long-term
senior management
Lock-up shares of
Deng Guanbiao 3,718,105 3,718,105 Long-term
senior management
Lock-up shares of
Deng Guanjie 900,730 900,730 Long-term
senior management
Lock-up shares of
senior management;
the increase in
Liu Peng 45,975 45,975 restricted shares is due Long-term
to the proportional
locking of
shareholding increase
Lock-up shares of
Liu Jinfeng 1,579,475 527,563 1,051,912 Long-term
senior management
Lock-up shares of
senior management;
the increase in
Chen Haiyuan 12,675 12,675 restricted shares is due Long-term
to the proportional
locking of
shareholding increase
Lock-up shares of
Li Youquan 33,300 33,300 Long-term
senior management
Lock-up shares of
senior management;
the increase in
Yue Yong 9,261,243 2,127,937 330,000 7,463,305 restricted shares is due Long-term
to the proportional
locking of unlocked
restricted shares
Zhou
Lock-up shares of
QichaoZhou 497,754 123,750 374,004 Long-term
senior management
Qichao
Ye LongfangYe Lock-up shares of
112,500 112,500 Long-term
Longfang senior management
Lock-up shares of
senior management;
the increase in
Dong Ye 119,794 53,250 45,000 111,544 restricted shares is due Long-term
to the proportional
locking of unlocked
restricted shares
Lock-up shares of
Li Zhaojin 8,100 8,100 senior management; Long-term
the increase in
63
C&S Paper Co., Ltd. Semi-annual Report 2021
restricted shares is due
to the proportional
locking of
shareholding increase
Lock-up shares of
senior management;
the increase in
Deng Wenxi 15,825 15,825 restricted shares is due Long-term
to the proportional
locking of
shareholding increase
Lock-up shares of
Release of selling
senior management;
restrictions in
no share reduction
Dai Zhenji 265,034 304,966 570,000 accordance with
within 6 months upon
relevant
leaving the post, with
regulations
all shares being locked
In accordance with
2018 Stock Option and
Restricted Stock
Incentive Plan (Draft),
the second unlocking
was conducted for Pursuant to 2018
restricted stocks of Stock Option and
Equity incentive
15,305,780 5,020,935 10,284,845 some incentive Restricted Stock
recipients
recipients awarded in Incentive Plan
the first grant, with an (Draft)
unlocking ratio of
30%. The second and
third unlocking for
reserved stocks has
not been conducted.
Total 36,858,323 7,853,435 762,541 29,767,428 -- --
II. Issuance and Listing of Securities
□ Applicable √ Not applicable
III. Total Number of Shareholders and Shareholding
Unit: share
Total number of preferred
Total number of ordinary shareholders whose voting
shareholders as at the end of 75,430 rights were resumed at the end 0
the reporting period of the reporting period (if any)
(see Note VIII)
Shareholdings of ordinary shareholders with more than 5% or the top 10 ordinary shareholders
Share Number of Number of Pledged, marked or
Number of
holdin ordinary Increase/dec ordinary frozen
ordinary shares
Name of g shares held at rease during shares held
Nature of shareholder held without Number
shareholder percen the end of the the reporting subject to Share
selling of
tage reporting period selling status
restrictions shares
(%) period restrictions
64
C&S Paper Co., Ltd. Semi-annual Report 2021
Guangdong
Zhongshun Domestic non-state- 28.63
375,655,958 375,655,958
Paper Group owned legal person %
Co., Ltd.
Chung Shun 20.31
Foreign legal person 266,504,789 266,504,789
Co. %
Hong Kong
Securities
Foreign legal person 7.12% 93,436,636 93,436,636
Clearing Co.,
Ltd.
National Social
Security Fund Others 1.00% 13,112,327 13,112,327
Portfolio 406
ICBC - Fuguo
Tianhui Select
Growth Hybrid
Others 0.79% 10,303,557 10,303,557
Securities
Investment
Fund (LOF)
Yue Yong Domestic natural person 0.74% 9,665,241 7,903,305 1,761,936
CCB - Fuguo
Value Creation
Hybrid
Others 0.74% 9,664,807 9,664,807
Securities
Investment
Fund
CITIC
Securities -
CITIC Bank -
CITIC
Securities
Outstanding
Others 0.68% 8,958,645 8,958,645
Growth Two-
Year Holding
Period Hybrid
Collective Asset
Management
Plan
Taikang Life
Insurance -
Unit-linked - Others 0.67% 8,773,968 8,773,968
Innovation
Power
National Social
Security Fund Others 0.59% 7,749,378 7,749,378
Portfolio 101
1. Among the top ten shareholders mentioned above, Guangdong Zhongshun Paper
Group Co., Ltd. and Chung Shun Co. are the enterprises controlled by actual controllers
of the Company, i.e. Deng Yingzhong, Deng Guanbiao and Deng Guanjie. That is,
Description on the related relationship or
Guangdong Zhongshun Paper Group Co., Ltd. and Chung Shun Co. are related parties.
parties acting-in-concert arrangements
Mr. Yue Yong is an incumbent senior manager of the Company.
among the above shareholders
2. It is unknown to the Company whether there is related party relationship among other
shareholders, or whether there is acting-in-concert among other shareholders as
stipulated in the Administrative Measures for the Disclosure of Information on Changes
65
C&S Paper Co., Ltd. Semi-annual Report 2021
in Shareholders’ Shareholding of Listed Companies.
Description on entrusting/being entrusted
with voting rights and waver of voting
None
rights by the aforementioned
shareholders:
There is a special repurchase account “C&S Paper Special Repurchase Securities
Description on special repurchase
Account” among the top 10 shareholders. As of the end of the reporting period, this
account among top 10 shareholders (if
repurchase account held 20,431,077 shares, with a shareholding ratio of 1.56%. Pursuant
any) (see note 11)
to relevant regulations, it is not included in the list of top 10 shareholders.
Shareholdings of top 10 ordinary shareholders not subject to selling restrictions
Number of ordinary shares held at the end of the Type of shares
Name of shareholder reporting period not subject to selling
restrictions Type of shares Number of shares
RMB-
Guangdong Zhongshun Paper Group Co.,
375,655,958 denominated 375,655,958
Ltd.
ordinary shares
RMB-
Chung Shun Co. 266,504,789 denominated 266,504,789
ordinary shares
RMB-
Hong Kong Securities Clearing Co., Ltd. 93,436,636 denominated 93,436,636
ordinary shares
RMB-
National Social Security Fund Portfolio
13,112,327 denominated 13,112,327
406
ordinary shares
RMB-
ICBC - Fuguo Tianhui Select Growth
10,303,557 denominated 10,303,557
Hybrid Securities Investment Fund (LOF)
ordinary shares
RMB-
CCB - Fuguo Value Creation Hybrid
9,664,807 denominated 9,664,807
Securities Investment Fund
ordinary shares
CITIC Securities - CITIC Bank - CITIC
RMB-
Securities Outstanding Growth Two-Year
8,958,645 denominated 8,958,645
Holding Period Hybrid Collective Asset
ordinary shares
Management Plan
RMB-
Taikang Life Insurance - Unit-linked -
8,773,968 denominated 8,773,968
Innovation Power
ordinary shares
RMB-
National Social Security Fund Portfolio
7,749,378 denominated 7,749,378
101
ordinary shares
RMB-
Yue Yong 1,761,936 denominated 1,761,936
ordinary shares
1. Among the top ten shareholders mentioned above, Guangdong Zhongshun Paper
Description on the related relationship or
Group Co., Ltd. and Chung Shun Co. are the enterprises controlled by actual controllers
parties acting-in-concert among the top
of the Company, i.e. Deng Yingzhong, Deng Guanbiao and Deng Guanjie. That is,
ten ordinary shareholders without selling
Guangdong Zhongshun Paper Group Co., Ltd. and Chung Shun Co. are related parties.
restrictions and between the top ten
Mr. Yue Yong is an incumbent senior manager of the Company.
ordinary shareholders without selling
restrictions and the top ten ordinary 2. It is unknown to the Company whether there is related party relationship among other
shareholders shareholders, or whether there is acting-in-concert among other shareholders as
stipulated in the Administrative Measures for the Disclosure of Information on Changes
66
C&S Paper Co., Ltd. Semi-annual Report 2021
in Shareholders’ Shareholding of Listed Companies.
Whether the top ten ordinary shareholders and the top ten shareholders without selling restrictions conducted the
agreed repurchase transaction during the reporting period
□ Yes √ No
The Company’s top ten ordinary shareholders and top ten ordinary shareholders without selling restrictions did
not conduct agreed repurchase transactions during the reporting period.
IV. Changes in Shareholding of Directors, Supervisors and Senior Management
√ Applicable □ Not applicable
Number of
Number of Number of
Number of shares subject
Increase of Decrease Number of shares subject shares subject to
shares held to selling
Position shares of shares shares held to selling selling
Name Position at the restrictions
status during the during the at the end restrictions restrictions
beginning granted at the
year year of the year granted in the granted at the
of the year beginning of
period end of the period
the period
Deng
Director Incumbent 6,752,811 6,752,811
Yingzhong
Chairman,
Liu Peng Incumbent 61,300 61,300
President
Deng Vice
Incumbent 4,957,473 4,957,473
Guanbiao Chairman
Deng Vice
Incumbent 1,200,974 1,200,974
Guanjie Chairman
Director,
Liu
Vice Incumbent 2,410,550 601,200 1,809,350
Jinfeng
President
Independe
He Haidi Incumbent
nt Director
He Independe
Incumbent
Guoquan nt Director
Independe
Liu Die Incumbent
nt Director
Vice
Yue Yong Incumbent 10,537,741 872,500 9,665,241
President
Ye Vice
Incumbent 150,000 150,000
Longfang President
Vice
Li Zhaojin Incumbent 10,800 10,800
President
Deng Vice
Incumbent 21,100 21,100
Wenxi President
Zhang Vice
Incumbent
Yang President
Dong Ye Chief Incumbent 228,725 228,725
67
C&S Paper Co., Ltd. Semi-annual Report 2021
Financial
Officer
Chairman
of the
Chen
Board of Incumbent 5,000 5,000
Haiyuan
Supervisor
s
Liang
Supervisor Incumbent
Yongliang
Li
Supervisor Resigned 62,280 3,000 65,280
Youquan
Director,
Dai Zhenji Joint Resigned 1,670,000 300,000 1,970,000
President
Deng
Chairman Resigned
Yingzhong
Deng
President Resigned
Guanbiao
Board
Zhou Secretary,
Resigned 498,672 124,600 374,072
Qichao Vice
President
Yue Yong Director Resigned
Zeng Yi Director Resigned
Huang Independe
Resigned
Hongyan nt Director
Ge Independe
Resigned
Guangrui nt Director
Total -- -- 28,469,226 401,200 1,598,300 27,272,126 0 0 0
V. Changes of Shareholders and Actual Controllers
Changes of controlling shareholders during the reporting period
□ Applicable √ Not applicable
There was no change of the Company’s controlling shareholder during the reporting period.
Changes of actual controllers during the reporting period
□ Applicable √ Not applicable
There was no change of the Company’s actual controllers during the reporting period.
68
C&S Paper Co., Ltd. Semi-annual Report 2021
Section VIII Particulars of Preference Shares
□ Applicable √ Not applicable
The Company had no preference shares during the reporting period.
69
C&S Paper Co., Ltd. Semi-annual Report 2021
Section IX Corporate Bonds
□ Applicable √ Not applicable
70
C&S Paper Co., Ltd. Semi-annual Report 2021
Section X Financial Report
I. Audit Report
Whether the Semi-annual Report has been audited
□ Yes √ No
The Semi-annual Report of the Company has not been audited.
II. Financial Statements
Unit of financial statements: RMB
1. Consolidated balance sheet
Prepared by: C&S Paper Co., Ltd.
June 30, 2021
Unit: RMB
Item June 30, 2021 December 31, 2020
Current assets:
Monetary funds 788,702,136.99 1,125,196,199.56
Settlement reserve
Lending to banks and other
financial institutions
Tradable financial assets
Derivative financial assets
Notes receivable 1,513,142.38 724,419.74
Accounts receivable 933,313,137.98 1,051,423,939.59
Accounts receivable financing
Prepayments 12,834,587.00 26,819,108.57
Premium receivable
Reinsurance payables
Reinsurance contract reserves
receivable
Other receivables 21,117,810.56 15,824,945.56
Including: Interest receivable
Dividends receivable
Financial assets held under resale
agreements
Inventory 1,624,309,444.82 1,661,274,495.32
71
C&S Paper Co., Ltd. Semi-annual Report 2021
Contract assets
Assets held for sale 57,073,059.69 57,073,059.69
Non-current assets due within one
year
Other current assets 34,666,236.56 101,584,569.30
Total current assets 3,473,529,555.98 4,039,920,737.33
Non-current assets:
Loans and advances to customers
Investments in creditor’s rights
Investments in other creditor’s
rights
Long-term receivable
Long-term equity investment
Investment in other equity
instruments
Other non-current financial assets
Investment property 33,856,923.84 34,575,365.94
Fixed assets 3,182,792,165.52 2,792,587,302.21
Construction work in progress 55,534,528.69 275,904,617.95
Productive biological assets
Oil & gas assets
Right-of-use assets 11,151,372.57
Intangible assets 169,199,442.04 169,355,772.24
Development expenses
Goodwill 64,654.15 64,654.15
Long-term deferred expenses 22,695,522.53 26,635,983.14
Deferred income tax assets 145,176,431.76 111,367,362.66
Other non-current assets 44,934,505.84 28,027,952.15
Total non-current assets 3,665,405,546.94 3,438,519,010.44
Total assets 7,138,935,102.92 7,478,439,747.77
Current liabilities:
Short-term borrowings 142,942,941.34
Borrowings from PBC
Placements from banks and other
financial institutions
Tradable financial liabilities
Derivative financial liabilities
Notes payable 289,707,176.43 234,887,563.22
Accounts payable 723,033,087.39 761,519,389.26
Payments received in advance
Contract liabilities 103,501,369.49 137,333,617.40
Proceeds from financial assets sold
under repo
72
C&S Paper Co., Ltd. Semi-annual Report 2021
Customer bank deposits and due to
banks and other financial institutions
Funds from securities trading
agency
Funds from securities underwriting
agency
Employee remuneration payable 111,500,389.45 123,524,627.11
Tax and fees payable 77,697,704.37 112,608,054.87
Other payables 796,391,000.45 754,844,580.09
Including: Interests payable
Dividends payable 1,594,446.41 1,437,466.77
Transaction fee and commission
receivable
Reinsurance payable
Liabilities held for sale
Non-current liabilities due within
6,038,594.62
one year
Other current liabilities 13,400,882.00 17,628,086.63
Total current liabilities 2,121,270,204.20 2,285,288,859.92
Non-current liabilities:
Insurance contract reserves
Long-term borrowings
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities 5,526,106.56
Long-term payable
Long-term employee remuneration
payable
Provision
Deferred income 112,092,990.63 115,101,158.13
Deferred income tax liabilities 47,103,893.91 35,903,653.30
Other non-current liabilities
Total non-current liabilities 164,722,991.10 151,004,811.43
Total liabilities 2,285,993,195.30 2,436,293,671.35
Owner’s equity:
Share capital 1,311,043,971.00 1,311,487,077.00
Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserve 941,625,561.08 907,006,505.05
Less: Treasury shares 599,354,148.06 96,480,911.29
Other comprehensive income
Special reserves
73
C&S Paper Co., Ltd. Semi-annual Report 2021
Surplus reserves 61,469,258.27 61,469,258.27
General reserves
Retained earnings 3,137,073,935.13 2,858,664,147.39
Total equity attributable to owners of
4,851,858,577.42 5,042,146,076.42
the parent company
Equities of minority shareholders 1,083,330.20
Total owner’s equity 4,852,941,907.62 5,042,146,076.42
Total liabilities and owners’ equities 7,138,935,102.92 7,478,439,747.77
Legal representative: Liu Peng Person in charge of accounting: Dong Ye Person in charge of accounting
department: Xu Xianjing
2. Balance sheet of the Parent Company
Unit: RMB
Item June 30, 2021 December 31, 2020
Current assets:
Monetary funds 83,716,953.94 170,229,178.13
Tradable financial assets
Derivative financial assets
Notes receivable
Accounts receivable 180,374,886.52 92,647,372.33
Accounts receivable financing
Prepayments 9,452,593.95 7,940,396.34
Other receivables 114,345,050.47 136,987,584.64
Including: Interest receivable
Dividends receivable
Inventory 172,205,617.01 156,605,546.36
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 2,287,198.40 52,517,725.87
Total current assets 562,382,300.29 616,927,803.67
Non-current assets:
Investments in creditor’s rights
Investments in other creditor’s
rights
Long-term receivable
Long-term equity investment 1,939,122,205.28 1,928,113,219.50
Investment in other equity
instruments
Other non-current financial assets
74
C&S Paper Co., Ltd. Semi-annual Report 2021
Investment property 17,549,963.77 17,939,329.51
Fixed assets 248,258,276.83 257,354,688.59
Construction work in progress 544,254.89
Productive biological assets
Oil & gas assets
Right-of-use assets 2,054,171.93
Intangible assets 26,626,212.20 25,205,232.21
Development expenses
Goodwill
Long-term deferred expenses
Deferred income tax assets 65,222,700.02 46,811,106.77
Other non-current assets 16,107,417.95 2,619,959.27
Total non-current assets 2,315,485,202.87 2,278,043,535.85
Total assets 2,877,867,503.16 2,894,971,339.52
Current liabilities:
Short-term borrowings
Tradable financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable 552,768,863.59 420,061,168.44
Payments received in advance
Contract liabilities 43,205,322.20 17,388,431.01
Employee remuneration payable 37,443,890.70 44,678,713.21
Tax and fees payable 5,413,588.15 5,995,417.05
Other payables 93,744,117.45 126,072,040.24
Including: Interests payable
Dividends payable 1,594,446.41 1,437,466.77
Liabilities held for sale
Non-current liabilities due within
733,541.13
one year
Other current liabilities 5,616,691.89 2,260,496.03
Total current liabilities 738,926,015.11 616,456,265.98
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities 1,331,461.99
Long-term payable
Long-term employee remuneration
payable
Provision
Deferred income 5,251,791.53 5,855,467.25
75
C&S Paper Co., Ltd. Semi-annual Report 2021
Deferred income tax liabilities 7,250,149.26 7,202,336.33
Other non-current liabilities
Total non-current liabilities 13,833,402.78 13,057,803.58
Total liabilities 752,759,417.89 629,514,069.56
Owner’s equity:
Share capital 1,311,043,971.00 1,311,487,077.00
Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserve 861,277,099.91 831,693,206.19
Less: Treasury shares 599,354,148.06 96,480,911.29
Other comprehensive income
Special reserves
Surplus reserves 61,347,923.99 61,347,923.99
Retained earnings 490,793,238.43 157,409,974.07
Total owner’s equity 2,125,108,085.27 2,265,457,269.96
Total liabilities and owners’ equities 2,877,867,503.16 2,894,971,339.52
3. Consolidated income statement
Unit: RMB
Item Half-Year of 2021 Half-Year of 2020
I. Total Operating Income 4,247,641,836.38 3,616,201,399.80
Including: Operating income 4,247,641,836.38 3,616,201,399.80
Interest income
Gross earned premiums
Service charge and
commission income
II. Total Operating Cost 3,767,785,569.02 3,081,938,688.14
Including: Operating costs 2,562,244,166.21 1,931,406,918.16
Interest expenses
Service charge and
commission expenses
Surrender value
Net compensation expenses
Net appropriation of
insurance reserve
Policy dividends expenses
Reinsurance costs
Tax and surcharges 29,251,004.43 26,920,007.36
Selling expenses 915,478,651.72 848,071,082.60
Administrative expenses 165,200,078.38 185,701,854.01
R&D expenses 97,414,812.32 90,860,828.24
76
C&S Paper Co., Ltd. Semi-annual Report 2021
Finance expenses -1,803,144.04 -1,022,002.23
Including: Interest fees 975,546.01 1,140,788.29
Interest income 6,623,270.61 4,060,998.02
Plus: Other income 11,671,362.52 15,174,645.20
Return on investment (“-”
358,473.15 2,287,274.87
indicates loss)
Including: Return on
investment in associates and joint
ventures
Income from the
derecognition of financial assets
measured at amortized cost
Exchange gains (“-” indicates
loss)
Gains from net exposure
hedging (“-” indicates loss)
Gains from changes in fair
value (“-” indicates loss)
Credit impairment losses (“-”
1,301,606.93 -1,423,699.75
indicates loss)
Asset impairment losses (“-”
-2,753,828.11 -850,381.40
indicates loss)
Return on disposal of assets (“-
-259,896.46 -896,870.05
” indicates loss)
III. Operating Profit (“-” indicates loss) 490,173,985.39 548,553,680.53
Plus: Non-operating income 1,708,366.54 3,169,241.16
Less: Non-operating expenditure 3,638,183.86 13,240,183.16
IV. Total Profit (“-” indicates total loss) 488,244,168.07 538,482,738.53
Less: Income tax expense 81,099,520.72 85,783,253.92
V. Net Profit (“-” indicates net loss) 407,144,647.35 452,699,484.61
i. Classified by operation continuity
1. Net profit from continued
407,144,647.35 452,699,484.61
operation (“-” indicates net loss)
2. Net profit from discontinued
operation (“-” indicates net loss)
ii. Classified by attribution of
ownership
1. Net profit attributable to owners
407,161,317.15 452,699,484.61
of the parent company
2. Minority shareholders’ profits and
-16,669.80
losses
VI. Net Amount of Other Comprehensive
Income after Tax
Total other comprehensive after-tax net
income attributable to owners of the
parent company
i. Other comprehensive income not
able to be reclassified into the profit or
77
C&S Paper Co., Ltd. Semi-annual Report 2021
loss
1. Changes of re-
measurement of the defined benefit plan
2. Other comprehensive
income that cannot be transferred into the
profit or loss under equity method
3. Changes in fair value of
investment in other equity instruments
4. Changes in fair value of
credit risk of the enterprise
5. Others
ii. Other comprehensive income
reclassified into the profit or loss
1. Other comprehensive
income to be transferred into the profit or
loss under equity method
2. Changes in fair value of
investment in other creditor’s rights
3. Financial assets
reclassified into other comprehensive
income
4. Impairment provision for
credit of investment in other creditor’s
rights
5. Reserve of cash flow
hedge
6. Converted difference in
foreign currency financial statements
7. Others
Total other comprehensive after-tax net
income attributable to minority
shareholders
VII. Total Comprehensive Income 407,144,647.35 452,699,484.61
Total comprehensive income
attributable to owners of the parent 407,161,317.15 452,699,484.61
company
Total comprehensive income
-16,669.80
attributable to minority shareholders
VIII. Earnings per Share:
i. Basic earnings per share 0.3140 0.3519
ii. Diluted earnings per share 0.3109 0.3462
For business combinations of the current period under common control, the net profit realized by the combined party before the
combination is: RMB0.00; the net profit realized by the combined party in last period is: RMB0.00.
Legal representative: Liu Peng Person in charge of accounting: Dong Ye Person in charge of accounting
department: Xu Xianjing
78
C&S Paper Co., Ltd. Semi-annual Report 2021
4. Income statement of the Parent Company
Unit: RMB
Item Half-Year of 2021 Half-Year of 2020
I. Operating Income 916,066,342.46 853,891,264.03
Less: Operating cost 788,799,370.03 712,614,977.74
Tax and surcharges 2,176,306.49 2,631,659.04
Selling expenses 87,176,883.65 66,501,515.28
Administrative expenses 65,964,350.45 91,173,785.60
R&D expenses
Finance expenses -884,099.85 672,377.63
Including: Interest fees 26,220.26
Interest income 809,358.94 1,722,164.19
Plus: Other income 1,516,457.89 1,098,835.80
Return on investment (“-”
482,704,072.79 142,109,515.77
indicates loss)
Including: Return on
investment in associates and joint
ventures
Profits from
derecognition of financial assets at
amortized cost
Gains from net exposure
hedging (“-” indicates loss)
Gains from changes in fair
value (“-” indicates loss)
Credit impairment losses (“-”
-573,774.23 -1,477,826.65
indicates loss)
Asset impairment losses (“-”
-15,126.42 -235,210.66
indicates loss)
Return on disposal of assets
-613,479.84
(“-” indicates loss)
II. Operating Profit (“-” indicates loss) 456,465,161.72 121,178,783.16
Plus: Non-operating income 204,390.14 367,540.33
Less: Non-operating expenditure 1,457,600.53 11,762,151.77
III. Total Profit (“-” indicates total loss) 455,211,951.33 109,784,171.72
Less: Income tax expense -6,922,842.44 -3,727,647.46
IV. Net Profit (“-” indicates net loss) 462,134,793.77 113,511,819.18
i. Net profit from continued
462,134,793.77 113,511,819.18
operation (“-” indicates net loss)
ii. Net profit from discontinued
operation (“-” indicates net loss)
V. Net Amount of Other Comprehensive
Income after Tax
i. Other comprehensive income not
able to be reclassified into the profit or
79
C&S Paper Co., Ltd. Semi-annual Report 2021
loss
1. Changes of re-
measurement of the defined benefit plan
2. Other comprehensive
income that cannot be transferred into
the profit or loss under equity method
3. Changes in fair value of
investment in other equity instruments
4. Changes in fair value of
credit risk of the enterprise
5. Others
ii. Other comprehensive income
reclassified into the profit or loss
1. Other comprehensive
income to be transferred into the profit
or loss under equity method
2. Changes in fair value of
investment in other creditor’s rights
3. Financial assets
reclassified into other comprehensive
income
4. Impairment provision for
credit of investment in other creditor’s
rights
5. Reserve of cash flow
hedge
6. Converted difference in
foreign currency financial statements
7. Others
VI. Total Comprehensive Income 462,134,793.77 113,511,819.18
VII. Earnings per Share:
i. Basic earnings per share
ii. Diluted earnings per share
5. Consolidated cash flow statement
Unit: RMB
Item Half-Year of 2021 Half-Year of 2020
I. Cash Flows from Operating Activities:
Cash received from sale of goods or
4,360,141,241.09 3,613,430,926.28
rendering of services
Net increase in deposits from
customers, banks and non-bank financial
institutions
Net increase in due to central banks
Net increase in placements from other
financial institutions
80
C&S Paper Co., Ltd. Semi-annual Report 2021
Cash received from the premium of
direct insurance contracts
Net cash from reinsurance business
Net increase in deposits and
investment of the insured
Cash obtained from interest, net fee
and commission
Net increase in placements from banks
and other financial institutions
Net increase in repo service fund
Net cash from agent securities trading
Tax rebates 120,214.00
Cash received related to other
38,362,676.67 76,989,647.10
operating activities
Sub-total of cash inflow from operating
4,398,503,917.76 3,690,540,787.38
activities
Cash paid for goods purchased and
2,487,866,757.79 2,226,834,895.97
services rendered
Net loans and advances to customers
Net increase in deposits with the
central bank, banks and non-bank financial
institutions
Cash paid for claims of direct
insurance contracts
Net increase in placements with banks
and non-bank financial institutions
Cash paid for interest, fee and
commission
Cash paid for dividends of the insured
Cash paid to and on behalf of
435,057,207.01 340,957,388.41
employees
Tax payments 310,071,504.86 259,738,653.85
Cash payments related to other
427,642,659.91 358,451,260.82
operating activities
Sub-total of cash outflow from operating
3,660,638,129.57 3,185,982,199.05
activities
Net cash flows from operating activities 737,865,788.19 504,558,588.33
II. Cash Flows from Investing Activities:
Cash from realization of investment
Cash received from the return on
358,473.15 2,287,274.87
investments
Net cash received from the disposal of
fixed assets, intangible assets, and other 10,542,186.47 30,060,788.00
long-term assets
Net amount of cash received from the
disposal of subsidiaries and other operating
organizations
Cash received related to other 50,000,000.00 127,105,000.00
81
C&S Paper Co., Ltd. Semi-annual Report 2021
investing activities
Sub-total of cash inflow from investing
60,900,659.62 159,453,062.87
activities
Cash paid for the acquisition and
construction of fixed assets, intangible 328,193,755.53 188,914,982.57
assets, and other long-term assets
Cash paid for investments
Net increase in pledged loans
Net amount of cash paid for
acquisition of subsidiaries and other
operating organizations
Cash payments related to other
212,400,000.00
investing activities
Sub-total of cash outflow from investing
328,193,755.53 401,314,982.57
activities
Net cash flows from investing activities -267,293,095.91 -241,861,919.70
III. Cash Flows from Financing Activities:
Cash received from capital
11,355,276.29
contribution
Including: Proceeds received by
subsidiaries from minority shareholders’
investment
Cash received from borrowings 13,042,460.23 257,722,148.28
Cash received related to other
financing activities
Sub-total of cash inflow from financing
24,397,736.52 257,722,148.28
activities
Cash paid for repayments of
155,939,151.58 164,917,045.18
borrowings
Cash payment for interest expenses
129,388,592.82 98,173,895.03
and distribution of dividends or profits
Including: Dividend and profit paid by
subsidiaries to minority shareholders
Cash payments related to other
554,697,666.71 40,446,866.90
financing activities
Sub-total of cash outflow from financing
840,025,411.11 303,537,807.11
activities
Net cash flows from financing activities -815,627,674.59 -45,815,658.83
IV. Effect of Exchange Rate Changes on
-3,754,951.08 3,555,983.87
Cash and Cash Equivalents
V. Net Increase in Cash and Cash
-348,809,933.39 220,436,993.67
Equivalents
Plus: Opening balance of cash and
1,050,034,135.72 675,996,852.97
cash equivalents
VI. Closing Balance of Cash and Cash
701,224,202.33 896,433,846.64
Equivalents
82
C&S Paper Co., Ltd. Semi-annual Report 2021
6. Cash flow statement of the Parent Company
Unit: RMB
Item Half-Year of 2021 Half-Year of 2020
I. Cash Flows from Operating Activities:
Cash received from sale of goods or
825,204,668.76 746,412,698.39
rendering of services
Tax rebates 120,214.00
Cash received related to other operating
350,780,128.27 987,204,013.79
activities
Sub-total of cash inflow from operating
1,175,984,797.03 1,733,736,926.18
activities
Cash paid for goods purchased and
628,652,955.42 491,197,761.73
services rendered
Cash paid to and on behalf of employees 105,969,767.52 66,675,479.70
Tax payments 12,714,786.96 21,863,845.36
Cash payments related to other operating
361,078,648.58 428,397,315.97
activities
Sub-total of cash outflow from operating
1,108,416,158.48 1,008,134,402.76
activities
Net cash flows from operating activities 67,568,638.55 725,602,523.42
II. Cash Flows from Investing Activities:
Cash from realization of investment
Cash received from the return on
482,704,072.79 141,992,629.47
investments
Net cash received from the disposal of
fixed assets, intangible assets, and other long-
term assets
Net amount of cash received from the
disposal of subsidiaries and other operating
organizations
Cash received related to other investing
50,000,000.00 127,105,000.00
activities
Sub-total of cash inflow from investing
532,704,072.79 269,097,629.47
activities
Cash paid for the acquisition and
construction of fixed assets, intangible assets, 21,866,189.95 18,608,797.77
and other long-term assets
Cash paid for investments 5,000,000.00 665,600,000.00
Net amount of cash paid for acquisition of
subsidiaries and other operating organizations
Cash payments related to other investing
152,400,000.00
activities
Sub-total of cash outflow from investing
26,866,189.95 836,608,797.77
activities
Net cash flows from investing activities 505,837,882.84 -567,511,168.30
III. Cash Flows from Financing Activities:
83
C&S Paper Co., Ltd. Semi-annual Report 2021
Cash received from capital contribution 10,255,276.29
Cash received from borrowings
Cash received related to other financing
activities
Sub-total of cash inflow from financing
10,255,276.29
activities
Cash paid for repayments of borrowings
Cash payment for interest expenses and
128,594,549.77 96,955,934.28
distribution of dividends or profits
Cash payments related to other financing
574,898,356.02 31,482,661.04
activities
Sub-total of cash outflow from financing
703,492,905.79 128,438,595.32
activities
Net cash flows from financing activities -693,237,629.50 -128,438,595.32
IV. Effect of Exchange Rate Changes on Cash
-783.27 259,845.46
and Cash Equivalents
V. Net Increase in Cash and Cash Equivalents -119,831,891.38 29,912,605.26
Plus: Opening balance of cash and cash
169,851,203.76 156,151,560.82
equivalents
VI. Closing Balance of Cash and Cash
50,019,312.38 186,064,166.08
Equivalents
84
C&S Paper Co., Ltd. Semi-annual Report 2021
7. Consolidated statement of changes in owner’s equity
Amount of the current period
Unit: RMB
Half-Year of 2021
Owner’s equity attributable to the Parent Company
Other equity
instruments Other
Item compr Specia Gener Equity of
Pref Total owner’s
Perp Less: Treasury ehensi l Surplus al minority
Share capital Capital reserve Retained earnings Others Subtotal equity
eren shares reserves shareholders
etual Othe ve reserv reserv
ce
bond rs incom es es
shar e
s
es
I. Balance at
the End of 1,311,487,077.00 907,006,505.05 96,480,911.29 61,469,258.27 2,858,664,147.39 5,042,146,076.42 5,042,146,076.42
Last Year
Plus:
Alternation to
accounting
policies
Correction to
previous
errors
Business
combinations
involving
enterprises
under
common
85
C&S Paper Co., Ltd. Semi-annual Report 2021
control
Others
II. Balance at
the Beginning 1,311,487,077.00 907,006,505.05 96,480,911.29 61,469,258.27 2,858,664,147.39 5,042,146,076.42 5,042,146,076.42
of the Year
III. Changes in
the Period (“-”
-443,106.00 34,619,056.03 502,873,236.77 278,409,787.74 -190,287,499.00 1,083,330.20 -189,204,168.80
Indicates
Decrease)
i. Total
comprehensiv 407,161,317.15 407,161,317.15 -16,669.80 407,144,647.35
e income
ii. Capital
contributed or
-443,106.00 34,619,056.03 502,873,236.77 -468,697,286.74 1,100,000.00 -467,597,286.74
decreased by
owner
1 Ordinary
shares
1,578,199.00 15,730,354.61 17,308,553.61 1,100,000.00 18,408,553.61
contributed by
owners
2 Capital
contributed by
owners of
other equity
instruments
3 Share based
payments
-2,021,305.00 18,888,701.42 -29,732,395.14 46,599,791.56 46,599,791.56
recognized as
owner’s equity
4 Others 532,605,631.91 -532,605,631.91 -532,605,631.91
86
C&S Paper Co., Ltd. Semi-annual Report 2021
iii. Profit
-128,751,529.41 -128,751,529.41 -128,751,529.41
distribution
1
Appropriation
of surplus
reserves
2
Appropriation
of general risk
reserves
3 Distribution
to owners (or -128,751,529.41 -128,751,529.41 -128,751,529.41
shareholders)
4 Others
iv. Interior
balance from
owner’s equity
1 Added
capital (or
share capital)
from capital
reserves
2 Added
capital (or
share capital)
from surplus
reserves
3
Compensation
of loss with
surplus
reserves
87
C&S Paper Co., Ltd. Semi-annual Report 2021
4 Retained
earnings of
carry-over of
the defined
benefit plan
5 Retained
earnings of
carry-over of
other
comprehensiv
e income
6 Others
v. Special
reserves
1
Appropriation
for the period
2 Use for the
period
vi. Others
IV. Closing
Balance of the 1,311,043,971.00 941,625,561.08 599,354,148.06 61,469,258.27 3,137,073,935.13 4,851,858,577.42 1,083,330.20 4,852,941,907.62
Period
88
C&S Paper Co., Ltd. Semi-annual Report 2021
Amount of last period
Unit: RMB
Half-Year of 2020
Owner’s equity attributable to the Parent Company
Other equity
Capital reserve Other
instruments
compr Specia Gener Equity of
Item Total owner’s
Pref Less: Treasury ehensi Surplus minority
Perp l al equity
Share capital eren Retained earnings Others Subtotal shareholders
etual Othe shares ve reserv reserves reserv
ce incom es es
bond rs
shar e
s
es
I. Balance at
the End of 1,308,891,273.00 760,731,416.57 104,792,649.00 53,205,582.86 2,058,968,835.80 4,077,004,459.23 4,077,004,459.23
Last Year
Plus:
Alternation to
accounting
policies
Correction to
previous
errors
Business
combinations
involving
enterprises
under
common
control
89
C&S Paper Co., Ltd. Semi-annual Report 2021
Others
II. Balance at
the Beginning 1,308,891,273.00 760,731,416.57 104,792,649.00 53,205,582.86 2,058,968,835.80 4,077,004,459.23 4,077,004,459.23
of the Year
III. Changes in
the Period (“-”
1,788,786.00 97,621,072.22 -1,072,825.04 354,753,498.45 455,236,181.71 455,236,181.71
Indicates
Decrease)
i. Total
comprehensiv 452,699,484.61 452,699,484.61 452,699,484.61
e income
ii. Capital
contributed or
1,788,786.00 97,621,072.22 -1,072,825.04 100,482,683.26 100,482,683.26
decreased by
owner
1 Ordinary
shares
2,591,508.00 19,622,899.06 22,214,407.06 22,214,407.06
contributed by
owners
2 Capital
contributed by
owners of
other equity
instruments
3 Share based
payments
-802,722.00 77,998,173.16 -28,753,546.80 105,948,997.96 105,948,997.96
recognized as
owner’s equity
4 Others 27,680,721.76 -27,680,721.76 -27,680,721.76
iii. Profit
-97,945,986.16 -97,945,986.16 -97,945,986.16
distribution
1
90
C&S Paper Co., Ltd. Semi-annual Report 2021
Appropriation
of surplus
reserves
2
Appropriation
of general risk
reserves
3 Distribution
to owners (or -97,945,986.16 -97,945,986.16 -97,945,986.16
shareholders)
4 Others
iv. Interior
balance from
owner’s equity
1 Added
capital (or
share capital)
from capital
reserves
2 Added
capital (or
share capital)
from surplus
reserves
3
Compensation
of loss with
surplus
reserves
4 Retained
earnings of
carry-over of
91
C&S Paper Co., Ltd. Semi-annual Report 2021
the defined
benefit plan
5 Retained
earnings of
carry-over of
other
comprehensiv
e income
6 Others
v. Special
reserves
1
Appropriation
for the period
2 Use for the
period
vi. Others
IV. Closing
Balance of the 1,310,680,059.00 858,352,488.79 103,719,823.96 53,205,582.86 2,413,722,334.25 4,532,240,640.94 4,532,240,640.94
Period
8. Statement of changes in owner’s equity of the Parent Company
Amount of the current period
Unit: RMB
Half-Year of 2021
Other equity instruments Other
Item Less: Treasury Special Retained Total owner’s
Share capital Preferen Perpetua Capital reserve comprehensive Surplus reserves Others
Others shares reserves earnings equity
ce l bonds income
92
C&S Paper Co., Ltd. Semi-annual Report 2021
shares
I. Balance at the End of
1,311,487,077.00 831,693,206.19 96,480,911.29 61,347,923.99 157,409,974.07 2,265,457,269.96
Last Year
Plus: Alternation to
accounting policies
Correction to
previous errors
Others
II. Balance at the
1,311,487,077.00 831,693,206.19 96,480,911.29 61,347,923.99 157,409,974.07 2,265,457,269.96
Beginning of the Year
III. Changes in the Period
-443,106.00 29,583,893.72 502,873,236.77 333,383,264.36 -140,349,184.69
(“-” Indicates Decrease)
i. Total comprehensive
462,134,793.77 462,134,793.77
income
ii. Capital contributed or
-443,106.00 29,583,893.72 502,873,236.77 -473,732,449.05
decreased by owner
1 Ordinary shares
1,578,199.00 15,730,354.61 17,308,553.61
contributed by owners
2 Capital contributed by
owners of other equity
instruments
3 Share based payments
recognized as owner’s -2,021,305.00 13,853,539.11 -29,732,395.14 41,564,629.25
equity
4 Others 532,605,631.91 -532,605,631.91
iii. Profit distribution -128,751,529.41 -128,751,529.41
1 Appropriation of
surplus reserves
2 Distribution to owners
-128,751,529.41 -128,751,529.41
(or shareholders)
93
C&S Paper Co., Ltd. Semi-annual Report 2021
3 Others
iv. Interior balance from
owner’s equity
1 Added capital (or share
capital) from capital
reserves
2 Added capital (or share
capital) from surplus
reserves
3 Compensation of loss
with surplus reserves
4 Retained earnings of
carry-over of the defined
benefit plan
5 Retained earnings of
carry-over of other
comprehensive income
6 Others
v. Special reserves
1 Appropriation for the
period
2 Use for the period
vi. Others
IV. Closing Balance of
1,311,043,971.00 861,277,099.91 599,354,148.06 61,347,923.99 490,793,238.43 2,125,108,085.27
the Period
94
C&S Paper Co., Ltd. Semi-annual Report 2021
Amount of last period
Unit: RMB
Half-Year of 2020
Other equity instruments
Item Other
Preferen Less: Treasury Special Surplus Retained Total owner’s
Share capital Perpetua Capital reserve comprehensive Others
ce Others shares reserves reserves earnings equity
l bonds income
shares
I. Balance at the
1,308,891,273.00 690,241,724.38 104,792,649.00 53,084,248.58 180,966,989.79 2,128,391,586.75
End of Last Year
Plus:
Alternation to
accounting policies
Correction
to previous errors
Others
II. Balance at the
Beginning of the 1,308,891,273.00 690,241,724.38 104,792,649.00 53,084,248.58 180,966,989.79 2,128,391,586.75
Year
III. Changes in the
Period (“-” Indicates 1,788,786.00 91,049,055.52 -1,072,825.04 15,565,833.02 109,476,499.58
Decrease)
i. Total
comprehensive 113,511,819.18 113,511,819.18
income
ii. Capital
contributed or 1,788,786.00 91,049,055.52 -1,072,825.04 93,910,666.56
decreased by owner
1 Ordinary shares
contributed by 2,591,508.00 19,622,899.06 22,214,407.06
owners
95
C&S Paper Co., Ltd. Semi-annual Report 2021
2 Capital
contributed by
owners of other
equity instruments
3 Share based
payments
-802,722.00 71,426,156.46 -28,753,546.80 99,376,981.26
recognized as
owner’s equity
4 Others 27,680,721.76 -27,680,721.76
iii. Profit
-97,945,986.16 -97,945,986.16
distribution
1 Appropriation of
surplus reserves
2 Distribution to
owners (or -97,945,986.16 -97,945,986.16
shareholders)
3 Others
iv. Interior balance
from owner’s equity
1 Added capital (or
share capital) from
capital reserves
2 Added capital (or
share capital) from
surplus reserves
3 Compensation of
loss with surplus
reserves
4 Retained earnings
of carry-over of the
defined benefit plan
5 Retained earnings
of carry-over of
96
C&S Paper Co., Ltd. Semi-annual Report 2021
other
comprehensive
income
6 Others
v. Special reserves
1 Appropriation for
the period
2 Use for the period
vi. Others
IV. Closing Balance
1,310,680,059.00 781,290,779.90 103,719,823.96 53,084,248.58 196,532,822.81 2,237,868,086.33
of the Period
97
C&S Paper Co., Ltd. Semi-annual Report 2021
III. Basic Information of the Company
1. Development history of the Company
C&S Paper Co., Ltd. (hereinafter referred to as “the Company”) is a joint stock limited company restructured from
Zhongshan Zhongshun Paper Manufacturing Co., Ltd., with all shareholders of the original company as its
initiators. The Company has obtained a business license of enterprise legal person with the registration number of
442000400013713 issued by Guangdong Province Administration for Industry and Commerce on December 31,
2008.
In November 2010, under the approval of the Notice on the Approval of the Initial Public Offering of Shares of
C&S Paper Co., Ltd. (CSRC Xu Ke [2010] No. 1539) issued by China Securities Regulatory Commission, the
Company issued 40,000,000 RMB-denominated ordinary shares (A shares) to the public, each having a par value
of RMB1. The share capital after the public offering was RMB160,000,000.00.
On May 22, 2012, the Company held the 2011 Annual General Meeting of Shareholders and approved the
Proposal on the 2011 Profit Distribution Plan, applying for an increase of registered capital by
RMB48,000,000.00. With the base number of 160,000,000.00 total shares as at the end of 2011, the Company
planned to convert capital reserve into new shares on the basis of three shares for every ten existing shares. The
registered capital after the change was RMB208,000,000.00.
On June 3, 2013, the Company held the 2012 Annual General Meeting of Shareholders and approved the Proposal
on the 2012 Profit Distribution Plan, applying for an increase of registered capital by RMB104,000,000.00. With
the base number of 208,000,000.00 total shares as at the end of 2012, the Company planned to convert capital
reserve into new shares on the basis of five shares for every ten existing shares. The registered capital after the
change was RMB312,000,000.00.
On May 8, 2014, the Company held the 2013 Annual General Meeting of Shareholders and approved the Proposal
on the 2013 Profit Distribution Plan, applying for an increase of registered capital by RMB93,600,000.00. With
the base number of 312,000,000.00 total shares as at the end of 2013, the Company planned to convert capital
reserve into new shares on the basis of three shares for every ten existing shares. The registered capital after the
change was RMB405,600,000.00.
On May 8, 2015, the Company held the 2014 Annual General Meeting of Shareholders and approved the Proposal
on the 2014 Profit Distribution Plan, applying for an increase of registered capital by RMB81,120,000.00. With
the base number of 405,600,000 total shares as at the end of 2014, the Company planned to convert capital reserve
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into new shares on the basis of two shares for every ten existing shares. The registered capital after the change was
RMB486,720,000.00.
Pursuant to the resolutions of the 7th meeting of the third session of the Board of Directors, the 9th meeting of the
third session of the Board of Directors, the third extraordinary general meeting of 2015 and the 10th meeting of
the third session of the Board of Directors, the Company planned to grant 17,133,000 restricted RMB-
denominated ordinary shares (A shares) to 242 incentive recipients including Liu Jinfeng through private
placement, with a par value of RMB1 per share and a grant price of RMB4.25 per share. Upon completion,
16,957,000 restricted RMB-denominated ordinary shares (A shares) were actually granted to a total of 199
incentive recipients with 43 employees withdrawing from the plan. The registered capital after the change was
RMB503,677,000.00.
Pursuant to the resolutions of the third extraordinary general meeting of 2015, the 11th meeting of the third
session of the Board of Directors and the 9th meeting of the third session of the Board of Supervisors, the
Company planned to grant 1,867,000 restricted RMB-denominated ordinary shares (A shares) to 68 incentive
recipients including Duan Xianglei through private placement, with a par value of RMB1 per share and a grant
price of RMB4.80 per share. Upon completion, 1,847,000 restricted RMB-denominated ordinary shares (A shares)
were granted to a total of 54 incentive recipients with 14 employees withdrawing from the plan. The registered
capital after the change was RMB505,524,000.00.
On October 24, 2016, at the 15th meeting of the third session of the Board of Directors, the Proposal on the
Repurchase and Deregistration of Partial Restricted Stocks under the Company’s Restricted Stock Incentive Plan
and Proposal on Changing the Registered Capital and Amending the Articles of Association of the Company were
reviewed and approved. Pursuant to the resolution of the meeting of the Board of Directors, the Company applied
for the repurchase and deregistration of 266,000 restricted stocks. Among them, the repurchase price of restricted
stocks awarded in the first grant was RMB4.25 per share, the repurchase price of reserved restricted stocks was
RMB4.80 per share, and the registered capital after the change was RMB505,258,000.00.
On May 10, 2017, the Company held the 2016 Annual General Meeting of Shareholders and approved the
Proposal on the 2016 Profit Distribution Plan, applying for an increase of registered capital by
RMB252,629,000.00. With the base number of 505,258,000 total shares as at the end of 2016, the Company
planned to convert capital reserve into new shares on the basis of five shares for every ten existing shares. The
registered capital after the change was RMB757,887,000.00.
Pursuant to the resolutions of the 22nd and 24th meeting of the third session of the Board of Directors in 2017, as
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some incentive recipients were disqualified to hold incentive stocks after leaving the Company or failing the
appraisal, the Company planned to repurchase and deregister the restricted stocks of 35 incentive recipients.
Among them, 25 incentive recipients were granted in the first period with 382,462.50 restricted stocks and ten
incentive recipients were granted with 39,997.50 reserved restricted stocks. A total of 422,460 shares were
repurchased and deregistered. The registered capital after the reduction was RMB757,464,540.00.
On May 8, 2018, the Company held the 2017 Annual General Meeting of Shareholders and approved the Proposal
on the 2017 Profit Distribution Plan, applying for an increase of registered capital by RMB530,225,178.00. With
the base number of 757,464,540 total shares as at the end of 2016, the Company planned to convert capital reserve
into new shares on the basis of seven shares for every ten existing shares. The registered capital after the change
was RMB1,287,689,718.00.
Pursuant to the resolution of the 5th meeting of the fourth session of the Board of Directors in 2018, as some
incentive recipients were disqualified to hold incentive stocks after leaving the Company or failing the appraisal at
the second unlocking period under the Restricted Stock Incentive Plan, the Company planned to repurchase and
deregister the restricted stocks of 46 incentive recipients. Among them, 38 incentive recipients were granted in the
first period with 985,426 restricted stocks and ten incentive recipients were granted with 11,551 reserved
restricted stocks. A total of 996,977 shares were repurchased and deregistered. The registered capital after the
reduction was RMB1,286,692,741.00.
Pursuant to the resolutions of the 9th meeting of the fourth session of the Board of Directors and the first
extraordinary general meeting in 2019, the Company planned to grant 21,717,500 restricted RMB-denominated
ordinary shares (A shares) to 671 incentive recipients including Dong Ye through private placement, with a par
value of RMB1 per share. Wherein, 19,675,500 restricted RMB-denominated ordinary shares (A shares) were
granted to a total of 569 incentive recipients at the price of RMB4.33, with 102 employees withdrawing from the
plan. The registered capital after the change was RMB1,306,368,241.00.
Pursuant to the resolutions of the 12th and 13th meeting of the fourth session of the Board of Directors, as some
incentive recipients were disqualified to hold incentive stocks after leaving the Company or failing the appraisal,
the Company planned to repurchase and deregister the restricted stocks of 32 incentive recipients. Among them,
22 incentive recipients were granted in the first period with 211,803 restricted stocks and ten incentive recipients
were granted with 56,865 reserved restricted stocks. A total of 268,668 shares were repurchased and deregistered.
The registered capital after the reduction was RMB1,306,099,573.00.
Pursuant to the Proposal on Granting Reserved Stock Options and Restricted Stocks to Incentive Recipients
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reviewed and approved at the 16th meeting of the fourth session of the Board of Directors in 2019, the Company
planned to grant 64 incentive recipients with 3,500,000 restricted stocks with a grant price of RMB7.02 per share.
The incentive plan actually granted 46 incentive recipients with 2,791,700 restricted ordinary shares as 18
incentive recipients did not subscribe for the restricted stocks due to resignation or voluntary abandonment and 13
incentive recipients did not fully pay for the subscribed restricted stocks. The registered capital after the grant was
RMB1,308,891,273.00.
The 23rd meeting of the fourth session of the Board of Directors and the second extraordinary general meeting of
2020 reviewed and approved the Proposal on the Repurchase and Deregistration of Partial Restricted Stocks
Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan. Pursuant
to the proposal, as some incentive recipients were disqualified to hold incentive stocks after leaving the Company
or failing the appraisal or some recipients passed the appraisal but did not attain a full score and hence could not
unlock all the stocks, the Company decided to repurchase and deregister total 802,722 restricted shares of 241
incentive recipients. The registered capital after the reduction was RMB1,308,088,551.00.
The 28th meeting of the fourth session of the Board of Directors and the fifth extraordinary general meeting of
2020 reviewed and approved the Proposal on the Repurchase and Deregistration of Partial Reserved Restricted
Stocks under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan. Pursuant to the proposal, as
some incentive recipients were disqualified to hold incentive stocks after leaving the Company or failing the
appraisal or some recipients passed the appraisal but did not attain a full score and hence could not unlock all the
stocks, the Company decided to repurchase and deregister total 211,890 restricted shares of 24 incentive recipients.
The registered capital after the reduction was RMB1,307,876,661.00.
At the 23rd meeting of the fourth session of the Board of Directors, the Proposal on Achieving the Exercise
Conditions of the First Exercise Period for Stock Options Awarded in the First Grant under the Company’s 2018
Stock Option and Restricted Stock Incentive Plan was reviewed and approved. The proposal agreed that the
exercise conditions under the first exercise period for the stock options awarded in the first grant had been met as
set out in the 2018 Stock Option and Restricted Stock Incentive Plan (Draft), and the exercise method was
independent exercise. The number of incentive recipients in conformity with the exercise conditions reached
2,522 and the number of stock options that had met exercise conditions was 3,431,505. The exercise period was
from June 10, 2020 to February 26, 2021. At the 28th meeting of the fourth session of the Board of Directors, the
Proposal on Achieving the Exercise Conditions of the First Exercise Period for Reserved Stock Options under the
Company’s 2018 Stock Option and Restricted Stock Incentive Plan was reviewed and approved. The proposal
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agreed that the exercise conditions under the first exercise period for the reserved stock options had been met as
set out in the 2018 Stock Option and Restricted Stock Incentive Plan (Draft), and the exercise method was
independent exercise. The number of incentive recipients in conformity with the exercise conditions reached 88
and the number of stock options that have met exercise conditions was 640,389. The exercise period was from
November 17, 2020 to September 10, 2021. As of December 31, 2020, the incentive recipients who had met the
above exercise conditions have successively begun to exercise their rights, and a total of 3,610,416 shares have
been subscribed.
As at December 31, 2020, the Company has had a registered capital of RMB1,311,487,077.00 and a share capital
of RMB1,311,487,077.00.
At the 5th meeting of the fifth session of the Board of Directors and the third meeting of the fifth session of the
Board of Supervisors, the Proposal on Achieving the Exercise Conditions of the Second Exercise Period for Stock
Options Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan
was reviewed and approved. The proposal agreed that the exercise conditions under the second exercise period for
the stock options awarded in the first grant had been met as set out in the 2018 Stock Option and Restricted Stock
Incentive Plan (Draft), and the exercise method was independent exercise. The number of incentive recipients in
conformity with the exercise conditions reached 2,274 and the number of stock options that had met exercise
conditions was 2,948,559. The exercise period was from June 30, 2021 to February 28, 2022. As of December 31,
2021, the incentive recipients who had met the above exercise conditions have successively begun to exercise
their rights, and a total of 1,578,199 shares have been subscribed.
The 5th meeting of the fifth session of the Board of Directors and the fourth extraordinary general meeting of
2021 reviewed and approved the Proposal on the Repurchase and Deregistration of Partial Restricted Stocks
Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan. At the
second unlock period for restricted shares awarded in the first grant under the 2018 Stock Option and Restricted
Stock Incentive Plan, 35 incentive recipients were disqualified since they left the Company before the unlock,
with 1,993,600 restricted shares that had been granted but unlocked; 61 incentive recipients passed the personal
appraisal but did not attain a full score and hence could not unlock all the stocks, with 27,705 shares unable to be
locked. In June 2021, repurchase and deregistration payments were made to relevant personnel whose shares
needed to be repurchased and deregistered, and the follow-up repurchase and deregistration procedures and
procedures for changing with the industrial and commercial department are in process.
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2. Registered address, form of organization, and headquarters of the Company
Form of organization: Company limited by shares
Registered address: No. 1 Longcheng Road, Dongsheng Town, Zhongshan City
Office address of the headquarters of the Company: No. 136 Caihong Avenue, West District, Zhongshan City
3. Business nature and main business activities of the Company
C&S Paper Co., Ltd. and its subsidiaries (hereafter generally referred to as “the Company”) are in the household
paper industry. The Company mainly engages in the following: R&D, production, processing and sales (including
online sales): high-end household paper series products, tissue boxes, sanitary products, cosmetics, non-woven
products, daily necessities (limited to daily plastic products, daily metal products, daily rubber products, and daily
ceramic products), daily chemical products (excluding hazardous chemicals), and Class I medical devices;
operation and production of Class II and Class III medical devices.
4. Actual controller of the Company
The actual controllers of the Company are Deng Yingzhong, Deng Guanbiao, and Deng Guanjie (Deng Yingzhong
is the other two’s father).
5. Approver for the issue of the financial statements and date of approval
The financial statements were approved for issue by the Board of Directors of the Company on August 30, 2021.
6. Scope of the consolidation of financial statements
As of June 30, 2021, the Company has 23 subsidiaries which are included in the consolidated scope, as detailed in
“Note IX. Equities in Other Entities”. Compared with last year, four subsidiaries have been newly added into the
consolidated scope during the reporting period. For details, see “Note VIII. Changes in Consolidated Scope”.
IV. Preparation Basis for Financial Statements
1. Basis of preparation
The financial statements of the Company have been prepared on a going concern basis based on actual
transactions and events and according to the Accounting Standards for Business Enterprises - Basic Standards
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promulgated by the Ministry of Finance (MOF No. 33 Document and No. 76 Revision), the 42 accounting
standards, Guidelines for the Application of the Accounting Standards for Business Enterprises, interpretation to
the accounting standards for business enterprises and other relevant regulations that are successively promulgated
on or after February 15, 2006 (hereinafter collectively referred to as “Accounting Standards for Business
Enterprises”), and rules set out in No. 15 Preparation and Reporting Rules of Information Disclosure of Public
Offering Companies - General Rules for Financial Statements (2014 Revision) issued by China Securities
Regulatory Commission based on actual transactions and events.
In accordance with the relevant rules of Accounting Standards for Business Enterprises, the financial accounting
of the Company is based on accrual basis. Apart from some financial tools, the accounting measurement of the
financial statements is based on historical cost method. Provision for impairment of asset is set aside if it is
recognized.
2. Going concern
The Company shall be a going concern for at least 12 months following the end of the reporting period. There are
no major events that will affect the Company’s operational ability; therefore the assumption on which the financial
statements are based is reasonable.
V. Significant Accounting Policies and Accounting Estimates
Specific accounting policies and accounting estimates:
C&S Paper Co., Ltd. and all its subsidiaries have set out several specific accounting policies and accounting
estimates for transactions and events with relation to the recognition of incomes and income taxes in accordance
with the Accounting Standards for Business Enterprises and their own operational characteristics. Please refer to
“Note V (39) Revenue” for details. As for explanations of significant accounting judgments and estimates made
by the management, please refer to “Note V (44) Significant changes of accounting policies and accounting
estimates”.
1. Statement of compliance with the accounting standards for business enterprises
The financial statements of the Company conform to the requirements set out in the Accounting Standards for
Business Enterprises. The statements truthfully and completely reflect the financial status, operating results, cash
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flow, and other relevant information of the Company. In addition, the financial statements of the Company are
also in accordance with disclosure requirements for financial statements and notes in No. 15 Preparation and
Reporting Rules of Information Disclosure of Public Offering Companies - General Rules for Financial
Statements of the China Securities Regulatory Commission (2014 Revision) in all material aspects
2. Accounting period
The accounting year of the Company is from January 1 to December 31 of each calendar year.
3. Operating cycle
The operating cycle of the Company normally refers to the periods during which the Company purchases assets
for processing and then gets cash or cash equivalents from the processed items. Normally, the operating cycle of a
company is shorter than a year. The Company sets 12 months as a full operating cycle and uses the 12-month
period as a standard for the liquidity of assets and liabilities.
4. Standard currency for accounting
RMB is the main currency in the main economic environments in which the Company and its domestic
subsidiaries operate. Therefore, the Company and its subsidiaries use RMB as the standard currency for
bookkeeping. The currency for accounting used in the Company’s financial statements is RMB.
5. Accounting treatment measures of business combinations involving enterprises under common control
and business combinations involving enterprises not under common control
Business combinations refer to the combination of two or more independent enterprises to form a reporting entity
of transactions or events. Business combination can be classified as business combinations involving enterprises
under common control and business combinations involving enterprises not under common control.
(1) Business combinations involving enterprises under common control
Business combinations under common control means enterprises involved in the business combination are under
ultimate control by one party or the same multi-parties before and after combination, and such control is not
temporary. For business combinations under common control, those who obtain control of enterprises involved in
the business combination on the combination date are the acquirer while other enterprises involved in the business
combination are the acquiree. Combination date is the date that the combining party actually obtains control of the
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combined party.
Assets and liabilities that the acquirer gets from the acquiree are calculated and measured at the book values on
the combination date. If there are differences between the book values of the net assets the acquirer receives and
the book values of the combination consideration it pays (or the face values of the issued shares), the differences
will be used to adjust capital reserves (share premium). Where capital reserves (share premium) are insufficient to
offset, retained earnings shall be adjusted.
All direct expenses related to the business combinations paid by the acquirer shall be included in current profits
and losses upon occurrence.
(2) Business combinations involving enterprises not under common control
Business combinations not under common control means enterprises involved in the business combination are not
under ultimate control by one party or the same multi-parties before and after combination. For business
combinations not under common control, those who obtain control of enterprises involved in the business
combination on the acquisition date are the acquirer, while other enterprises involved in the business combination
are the acquiree. Acquisition date is the date that the acquirer actually obtains control of the acquiree.
For business combinations not under common control, the costs of combination include the assets the acquirer
pays, liabilities the acquirer bears, and the fair value of the equity securities issued on the date of combination for
the acquisition of control over the acquiree. The costs of auditing, legal services, evaluation consulting, other
intermediary expenses and other management fees incurred for business combination shall be included in current
profits and losses. The transaction costs of the equity securities and debt securities issued by the acquirer shall be
included in the initially confirmed amounts of equity securities and debt securities. The contingent consideration
involved shall be included in the costs of business combination based on its fair value at the acquisition date. If,
within 12 months after the acquisition, there is new or further evidence for conditions that have already existed on
the acquisition date and the contingent consideration shall be re-adjusted, the combination goodwill shall be
adjusted accordingly. The acquirer’s costs of business combinations and its identifiable net assets obtained from
business combinations shall be assessed at the fair values on the acquisition date. If the costs of business
combinations are higher than the identifiable net assets of the acquiree on the acquisition date, the gap between
them shall be confirmed as goodwill. If the costs of business combinations are lower than the fair values of the
identifiable net assets of the acquiree on the acquisition date, the fair values of identifiable assets, liabilities and
continent liabilities as well as the measurement of combination costs shall be reassessed; if, upon reassessment,
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the business combination costs are still lower than the fair values of the identifiable net assets of the acquiree, the
difference shall be included in profits and losses of the current period.
If the deductible temporary differences the acquirer gets from the acquiree are not eligible to be confirmed as
deferred tax asset on the acquisition date, and within 12 months of the acquisition, there are new or further
evidence for the conditions that have already existed on the acquisition date that the economic profits brought by
the deductible temporary differences of the acquiree could be achieved, such differences shall be confirmed as
deferred tax asset. At the same time, the goodwill shall be reduced. Where the goodwill is insufficient to be
deducted, the gap between them shall be included in current profits and losses. Apart from the aforementioned
situations, all deductible temporary differences confirmed to be relevant to the business combination shall be
recorded in current profits and losses.
For business combinations not under common control that are achieved through multiple steps, whether they can
be regarded as package deals shall be judged in accordance with Notice No.5 of the Interpretation of Accounting
Standards for Business Enterprises of the Ministry of Finance (C.K. [2012] No.19), and the standards of “package
deals” set out in Article 51 of the Accounting Standard for Business Enterprises No. 33 – Consolidated Financial
Statements (please refer to Note V (6) “methods for preparation of consolidated financial statements” (2)). In the
event that the combination is regarded as “package deals”, accounting treatment shall be done by referring to the
descriptions in previous paragraphs of this section and “Note V (22) Long-term equity investments” herein; if not,
accounting treatment shall be done by distinguishing individual financial statements from consolidated financial
statements::
In individual financial statements, the initial investment costs shall be the sum of the book value of the equity
investment of the acquiree held before the acquisition date and the new investment costs on the acquisition date; if
other comprehensive income is involved in the equities of the acquiree before the acquisition date, accounting
processing shall be done for the comprehensive income related to this investment by adopting the same basis for
directly disposing of relevant assets or liabilities of the acquiree during the disposal of this investment (that is,
except for the corresponding shares of the changes caused by re-measurement of the net liabilities or net assets of
the defined benefit plan by the acquiree, which are accounted by the equity method, others shall be transferred to
the return on investment of the current period).
In consolidated financial statements, the equities of the acquiree held before the acquisition date shall be re-
measured at the fair value of the equities on the acquisition date, and the difference between the fair value and the
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book value shall be recognized as the return on investment of the current period; if other comprehensive income is
involved in the equities of the acquiree before the acquisition date, accounting processing shall be done for the
comprehensive income related to this investment by adopting the same basis for directly disposing of relevant
assets or liabilities of the acquiree (that is, except for the corresponding shares of the changes caused by re-
measurement of the net liabilities or net assets of the defined benefit plan by the acquiree, which are accounted by
the equity method, others shall be transferred to the return on investment of the current period).
6. Methods for preparation of consolidated financial statements
(1) Principles of determining the scope of consolidated financial statements
The scope of consolidation of consolidated financial statements shall be subject to the basis of control. Control
refers to the power the investor owns against the investee, which allows the investor to enjoy the variable return
by attending relevant activities held by the investee, and to be capable of using such power to affect the amount of
return. The scope of consolidation is the Company and all of its subsidiaries. Subsidiaries refer to entities
controlled by the Company.
The Company shall reassess whether it controls an investee if facts and circumstances indicate that there are
changes to the relevant elements of control as defined above.
(2) Methods for preparation of consolidated financial statements
The Company shall include the subsidiaries in the scope of consolidation from the date it acquires the actual
control over the net assets and the decision-making of production and operations of such subsidiaries; accordingly,
the Company shall terminate including them in the scope of consolidation from the date it loses the actual control.
In terms of subsidiaries already disposed of, the operating results and cash flows before the disposal date have
been included in the consolidated income statements and the consolidated cash flow statements appropriately; as
for subsidiaries disposed in the current period, the opening balance in the consolidated balance sheet shall not be
adjusted. In case of subsidiaries added through business combinations not under the same control, the operating
results and cash flows after the acquisition date have been included in the consolidated income statements and the
consolidated cash flow statements appropriately, and the opening and comparative balance in the consolidated
balance sheet shall not be adjusted. In case of subsidiaries added through business combinations under the same
control among which the Company absorbs the combined party, the operating results and cash flows of the
combined party from the beginning of the period in which the combination happens to the combination date have
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been included in the consolidated income statements and the consolidated cash flow statements appropriately, and
the comparative balance in the consolidated balance sheet shall be adjusted simultaneously.
In case of inconsistencies in the accounting policies or periods between subsidiaries and the Company during
preparation of consolidated financial statements, financial statements of subsidiaries shall be adjusted according to
the accounting policies and periods adopted by the Company. For subsidiaries acquired by business combinations
not under the same control, their financial statements shall be adjusted based on the fair value of the identifiable
net assets on the acquisition date.
All major business transaction balance, transactions, and unrealized profit of the Company shall be offset during
preparation of consolidated financial statements.
Shareholders’ equities of subsidiaries and the part of the net profit and loss of the current period not attributable to
the Company shall be presented separately under the shareholders’ equities and the net profit in the consolidated
financial statements as equities of minority shareholders and minority shareholders’ profits and losses. Shares of
equities of minority shareholders in the net profit and loss of the current period of subsidiaries shall be presented
under the “minority shareholders’ profits and losses” in the consolidated income statement. If the loss of a
subsidiary which is shared by its minority shareholders exceeds the minority shareholders’ share in the opening
balance of the subsidiary, the minority interest shall be reduced.
If the Parent Company loses control of a subsidiary due to partial disposal of equity investment or other reasons, it
shall re-measure the remaining equity at fair value on the date of loss of control. The sum of consideration
obtained from equity disposal and fair value of the remaining equity, minus the difference between the Parent
Company’s share of the subsidiary’s net assets that is continuously calculated from the acquisition date, shall be
recognized as investment income for the reporting period when the loss of control takes place. Accounting
processing shall be done for the other comprehensive income related to this investment in the subsidiary’s equities
by adopting the same basis for directly disposing of relevant assets or liabilities of the acquiree during the loss of
control (that is, except for the changes caused by re-measurement of the net liabilities or net assets of the defined
benefit plan by the previous subsidiary, others shall be transferred to the return on investment of the current
period). After that, subsequent measurement shall be done for the remaining equity of this part as per relevant
provisions in the Accounting Standards for Business Enterprises No. 2 - Long-term Equity Investment or the
Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments.
See “Note V (22)” or “Note V (10)” for details.
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If the Company disposes of investments in a subsidiary’s equities by steps via transactions until it loses control, it
shall check whether these transactions from disposal of the investments in the subsidiary’s equities to the loss of
control are package deals. If the terms, conditions, and economic effects of transactions on disposing of equity
investment in the subsidiary conform to one or more of the following circumstances, that means these multiple
transactions should be treated as package deals in accounting processing: 1) Those transactions are reached at the
same time or after taking into consideration the influence of each other; 2) those transactions together produce a
complete commercial outcome; 3) the occurrence of one transaction depends on the occurrence of at least one
other transaction; 4) one transaction alone does not seem to be economical, but all those transactions are
economical when are considered as a whole. If those transactions are package deals, each transaction shall be
treated as a transaction that results in loss of control of the subsidiary in accounting processing. However, the
difference between each disposal price before loss of control and the Parent Company’s share of the subsidiary’s
net assets corresponding to the disposal investment shall be recognized as other comprehensive income in the
consolidated financial statements and, upon loss of control, transferred to the profit and loss of the current
reporting period.
7. Classification of joint operation arrangements and accounting treatment methods for joint operations:
None
8. Criteria for recognition of cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits that can be used for payment at any time, and short-term
(due within three months from the acquisition date) investment held by the Company with high liquidity, easy to
convert to cash in a known amount, and small risk of value changes.
9. Translation of transactions and financial statements denominated in foreign currencies
(1) Methods for translation of transactions denominated in foreign currencies
At the initial recognition of foreign currency transactions of the Company, foreign currency will be translated into the
amount of standard currency for accounting at the spot exchange rate or its approximate exchange rate on the
transaction date. However, the business of exchange of foreign currencies or transactions related to the exchange of
foreign currencies, foreign currency will be translated into the amount of standard currency for accounting at the
exchange rate actually adopted.
(2) Methods for translation of monetary and non-monetary items in foreign currencies
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On the balance sheet date, the foreign currency monetary items are translated at the spot exchange rate on that
date. Exchange difference resulting from the difference between the spot exchange rate on the balance sheet date
and that at the initial recognition or on the previous balance sheet date shall be recognized as the profit and loss of
the current period.
Non-monetary items that are measured at historical cost in foreign currencies shall still be converted at the spot
exchange rate on the transaction date with the amount of standard currency for accounting unchanged. Non-
monetary items that are measured at fair value in foreign currencies are translated using the foreign exchange rate
at the date the fair value is recognized. The difference between the amount of standard currency for accounting
after translation and the original amount of the standard currency for accounting shall be treated as a change in
fair value (including the change in the exchange rate) and recognized as the profit and loss of the current period or
other comprehensive income.
(3) Methods for translation of foreign-currency financial statements
Foreign-currency financial statements of overseas operations shall be translated into RMB financial statements by the
following methods: The assets and liabilities in the balance sheet shall be converted at the spot exchange rate on the
balance sheet date; except “undistributed profits”, all the other owner’s equity items are converted at the spot exchange
rate at the time of occurrence. Income and expense items in the income statement shall be translated using the foreign
exchange rates ruling at the dates of the transactions. Difference resulting from translation of foreign-currency financial
statements by the above methods shall be recognized as other comprehensive income. Translation of comparative
financial statements shall be subject to the above provisions.
10. Financial instruments
When the Company becomes a party to a financial instrument contract, the financial instrument is confirmed to be
either financial assets or financial liabilities.
(1) Classification, recognition, and measurement of financial assets
According to the business model of managing financial assets and the contractual cash flow characteristics of
financial assets, the Company classified financial assets into the following categories: financial assets measured at
the amortized cost, financial assets measured at fair value through other comprehensive income and financial
assets measured at fair value through profit and loss of the current period.
Financial assets are measured at fair value upon initial recognition. For financial assets measured at fair value
through profit and loss of the current period, transaction costs are directly included in profit and loss of the current
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period. For other types of financial assets, related transaction costs are included in their initial recognized amounts.
In terms of the accounts receivable or notes receivable arising from selling products or providing labor service
without or not considering major financing component, the Company shall regard the expected consideration
amount that it has rights to charge as the initial recognition amount.
1) Financial assets measured at amortized cost
For the business model where the Company manages the financial assets carried at amortized cost, the Company
aims to charge the contract cash flows, and the characteristics of the contract cash flows of this kind of financial
assets are consistent with the basic lending arrangements. That is, cash flows generated on specified dates are
solely payments of principal and interest on the principal amount outstanding. This kind of financial assets are
subsequently measured at amortized cost using the effective interest method. Gain or loss arising from
amortization or impairment is recognized in profit and loss of the current period.
2) Financial assets measured at fair value through other comprehensive income
The business model for the Company to manage this type of financial assets aims at both obtaining the contract
cash flows and selling the financial assets, and the characteristics of the contract cash flows of this kind of
financial assets are consistent with the basic lending arrangements. The Company measures this kind of financial
assets at fair value through other comprehensive income, but recognizes the impairment losses or gains, exchange
profit and loss, and interest income calculated by the effective interest method as the profit and loss of the current
period.
Additionally, the Company designates some non-tradable equity instruments as financial assets at fair value
through other comprehensive income. The Company recognizes relevant dividend income from such financial
assets as the profit and loss of the current period, and changes in fair value as other comprehensive income. When
such financial assets are derecognized, the accumulated gains or losses previously recognized as other
comprehensive income shall be transferred from other comprehensive income to retained earnings and not
recognized as the profit and loss of the current period.
3) Financial assets measured at fair value through profit and loss of the current period
All financial assets other than the other two preceding types are classified as financial assets measured at fair
value through profit and loss of the current period. Moreover, at initial recognition, to eliminate or significantly
reduce accounting mismatches, the Company may designate some financial assets as financial assets measured at
fair value through profit and loss of the current period.
Such financial assets shall be measured at fair value, and changes in fair value are recognized as the profit and
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loss of the current period.
(2) Classification, recognition, and measurement of financial liabilities
At initial recognition, financial liabilities are classified into financial liabilities measured at fair value through
profit or loss and other financial liabilities. For financial liabilities at fair value through profit and loss of the
current period, transaction costs are directly included in profit and loss of the current period. For other types of
financial liabilities, related transaction costs are included in their initial recognized amounts.
1) Financial liabilities measured at fair value through profit and loss of the current period
Financial liabilities measured at fair value through profit and loss of the current period include tradable financial
liabilities (including derivatives belonging to financial liabilities) and financial liabilities designated to be
measured at fair value through profit and loss of the current period at initial recognition.
Tradable financial liabilities (including derivatives that are financial liabilities) are subsequently measured at fair
value, and changes in fair value -- except for those related to hedging accounting -- are recognized as profit and
loss of the current period.
For those that are designated as financial liabilities measured at fair value through profit or loss, the changes in
fair value resulting from changes in the credit risk of the Company shall be recognized as other comprehensive
income; besides, when such liabilities are derecognized, the amount of accumulative changes in fair value
resulting from credit risk changes that are recognized as other comprehensive income shall be transferred to
retained earnings. Other changes in fair value shall be recognized as the profit and loss of the current period. If the
treatment of the credit risk changes in such financial liabilities by the above methods will result in expansion of
the accounting mismatch in the profit and loss, the Company shall recognize all gains or losses in such financial
liabilities (including the amount subject to the credit risk changes of the Company) as the profit and loss of the
current period.
2) Other financial liabilities
Except for financial liabilities resulting from financial asset transfers not meeting the conditions for derecognition
or the continuous involvement in the transferred financial asset, or financial guarantee contracts, other financial
liabilities shall be classified into the financial liabilities measured at amortized cost, which shall be subsequently
measured at amortized cost, and the gains or losses resulting from derecognition or amortization shall be
recognized as the profit and loss of the current period.
(3) Recognition basis and measurement method of financial asset transfer
Once one of the following conditions is met, the financial assets shall be derecognized:
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1) The contract right to charge the cash flows of the financial assets is terminated; 2) the financial assets have been
transferred, and almost all the risks and rewards of the ownership of the financial assets are transferred to the
transferee; 3) the financial assets have been transferred, and the Company has given up the control over the
financial assets although it does not transfer or retain almost all the risks and rewards of the ownership of the
financial assets.
If the Company has neither transferred nor retained almost all the risks and rewards of the ownership of the
financial assets, and the Company does not waive its control of the financial assets, it shall recognize the relevant
financial assets within the extent of its continuous involvement in the transferred financial assets and recognize
the relevant liabilities. The continuous involvement in the transferred financial assets refers to the level of risk
with which the Company is faced due to changes in the financial asset values.
When overall transfer of financial assets meets the conditions for derecognization, the book value of the
transferred financial assets and the difference between the consideration received due to transfer and the
accumulative changes in fair value that is originally recognized as other comprehensive income shall be
recognized as the profit and loss of the current period.
When partial transfer of financial assets meets the conditions for derecognization, the book value of the
transferred financial assets shall be apportioned to the fair value between the derecognized part and the recognized
part, and the consideration received due to transfer and the difference between the accumulative changes in fair
value that is originally recognized as other comprehensive income, which shall be apportioned to the derecognized
part, and the apportioned book value as mentioned above shall be recognized as the profit and loss of the current
period.
When the Company sells financial assets with additional recourse or transfers the endorsed financial assets held, it
shall check whether almost all the risks and rewards of the ownership of the financial assets are transferred. If the
Company has transferred almost all the risks and rewards of the ownership of the financial assets to the transferee,
it shall derecognize the financial assets; if the Company retains almost all the risks and rewards of the ownership
of the financial assets, it shall not derecognize the financial assets; if the Company neither transfers nor retains
almost all the risks and rewards of the ownership of the financial assets, it shall judge whether it has retained
control over the assets and conduct accounting processing following the principles described in previous
paragraphs.
(4) Derecognition of financial liabilities
If current obligations of the financial liabilities (or some of the liabilities) have been released, the Company shall
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derecognize the financial liabilities (or some of the liabilities). Where the Company (borrower) and a lender sign
an agreement to replace the existing financial liability by way of assumption of new financial liability with the
terms of the new financial liability substantially different from those of the existing financial liability, it
derecognizes the existing financial liability while recognizing the new financial liability. If the contract terms of
the existing financial liability are materially changed in whole (or in part), the existing financial liability will be
derecognized, and the financial liability after changes of terms will be recognized as a new financial liability.
If a financial liability is derecognized in whole (or in part), the difference between the book value of the
derecognized portion and the consideration paid (including the non-cash assets transferred out or the new financial
liability assumed) is recognized as the profit and loss of the current period.
(5) Offsetting financial assets and financial liabilities
When the Company has the statutory right to offset the recognized amount of financial assets and financial
liabilities, and this statutory right is currently enforceable, and the Company plans to net the financial assets or
simultaneously realize the financial assets and pay off the financial liabilities, the financial assets and financial
liabilities are presented in the balance sheet at the net amount after offsetting each other. Otherwise, financial
assets and financial liabilities are presented separately in the balance sheet and are not offset against each other.
(6) Methods for determining the fair value of financial assets and financial liabilities
The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date. If there are active markets for a financial
instrument, the Company establishes its fair value by using quotes in the active markets. Quotes in active markets
refer to prices that are readily available on a regular basis from exchanges, brokers, trade associations, pricing
service institutions, etc., and represent the prices of market transactions that actually occur in a fair trade. If there
is no active market, the Company establishes fair value by using valuation techniques.
Valuation techniques include reference to price used in recent market transactions between knowledgeable, willing
parties, reference to the current fair value of other financial instruments that are substantially the same, discounted
cash flow analysis, option pricing models, etc. During valuation, the Company adopts the valuation techniques
that are applicable under current circumstances and supported by sufficient available data and other information,
selects the input values that are consistent with the characteristics of the assets or liabilities considered by the
market participants in the transaction of the relevant assets or liabilities, and preferentially uses the relevant
observable inputs. Unobservable input values are used where the relevant observable input values are not
available or are not practicable.
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(7) Equity instruments
An equity instrument refers to a contract that can prove the Company owns the remaining equity in the assets after
deducting all liabilities. The Company’s issuance (including refinancing), repurchase, sales or cancellation of
equity instruments are treated as changes in equities, and transaction costs related to equity transactions are
deducted from equities. The Company does not recognize changes in the fair value of equity instruments.
The distribution of dividends by equity instruments (including “interests” generated by instruments that are
classified as equity instruments) during their period existence shall be treated as profit distribution.
(8) Impairment of financial assets
The financial assets for which the Company needs to recognize impairment losses are financial assets measured at
amortized cost, debt instrument investments measured at fair value through other comprehensive income, and
lease receivables, mainly including notes receivable, accounts receivable, and other receivables. In addition, for
some financial guarantee contracts, impairment reserves are set aside and credit impairment losses are recognized
as per the accounting policies described in this section.
1) Methods for recognizing impairment reserves
Based on the expected credit loss, the Company sets aside provisions for impairment of the above items by
methods (general method or simplified method) for measuring expected credit loss applicable to them and
recognizes credit impairment loss.
Credit loss refers to the difference between all contract cash flow receivables discounted at the original effective
interest rate under the contract and all expected cash flow receivables, i.e., the present value of all cash shortages.
Specifically, for financial assets that have been credit-impaired at the time of purchase or origin, the Company
discounts the financial assets at the credit-adjusted actual interest rate.
The general method for measuring expected credit loss means that the Company assesses on each balance sheet
date whether the credit risk of financial assets has increased significantly since the initial recognition. If yes, the
Company measures loss reserves at an amount equivalent to the expected credit loss in the entire duration; if not,
the Company measures loss reserves at an amount equivalent to the expected credit loss in the next 12 months.
The Company considers all reasonable and evidence-based information, including forward-looking information,
when assessing expected credit loss;
As for financial instruments with low credit risk on the balance sheet date, the Company measures the loss
reserves according to the expected credit loss in the future 12 months, assuming that its credit risk has had no
significant increase since its initial recognition. The Company chooses to measure loss reserves according to the
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expected credit loss in the next 12 months or in the entire duration based on whether the credit risk has increased
significantly since initial recognition.
2) Standards for judging whether credit risk has increased significantly since initial recognition
If the probability of default (PD) of a financial asset in the expected duration recognized on the balance sheet date
is significantly higher than that in the expected duration recognized at the time of initial recognition, the credit
risk of the financial asset has increased significantly. Except for special circumstances, the Company determines
whether credit risk has increased significantly since initial recognition by reasonably assessing the changes in the
PD in the entire duration with the changes in the coming 12 months.
3) Portfolio method for assessing expected credit risk based on portfolios
The Company assesses individual credit risk of financial assets with significantly different credit risks. Examples
include the following: receivables from related parties; receivables that have disputes with counterparties or those
involved in litigation or arbitration; there are obvious signs that the debtor is very unlikely to fulfill the repayment
obligation.
In addition to financial assets whose individual credit risk is assessed, the Company divides financial assets into
different groups based on common risk characteristics, and assesses credit risk on a portfolio basis.
4) Accounting treatment methods for impairment of financial assets
At the end of the reporting period, the Company calculates the expected credit loss of financial assets. If the
expected credit loss is greater than the book value of its current impairment provisions, the difference is
recognized as an impairment loss; if it is less than the current book value of the impairment provisions, the
difference is recognized as impairment gains.
5) Methods for recognizing credit losses of financial assets
a. Notes receivable
The Company measures loss reserves for notes receivable at an amount equivalent to expected credit loss in the
entire duration. The Company divides notes receivable into different portfolios based on their credit risk
characteristics:
Item Basis for determining the portfolio
Banker’s acceptance Acceptors are banks with low credit risks.
Trade acceptance The aging of trade acceptance is used as credit risk characteristics.
b. Accounts receivable
The Company measures loss reserves for accounts receivable without major financing component at an amount
equivalent to expected credit loss in the entire duration.
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The Company measures loss reserves for accounts receivable and lease receivables with major financing
component at an amount equivalent to expected credit loss in the duration.
Except for accounts receivable whose individual credit risk is assessed, the Company divides accounts receivable
into different portfolios based on their credit risk characteristics:
Item Basis for determining the portfolio
Aging portfolio This portfolio uses aging of accounts receivable as credit risk characteristics.
Related party portfolio This portfolio comprises amounts of related parties within the consolidated scope.
c. Other receivables
The Company adopts the amount equivalent to the expected credit loss in the coming 12 months or in the entire
duration to measure impairment losses based on whether the credit risk of other receivables has increased
significantly since initial recognition. Except for other receivables whose individual credit risk is assessed, the
Company divides other receivables into different portfolios based on their credit risk characteristics:
Item Basis for determining the portfolio
Aging portfolio This portfolio uses aging of other receivables as credit risk characteristics.
Related party portfolio This portfolio comprises amounts of related parties within the consolidated scope.
11. Notes receivable
For details, please refer to 10. Financial instruments in V. Significant Accounting Policies and Accounting
Estimates of Section X.
12. Accounts receivable
For details, please refer to 10. Financial instruments in V. Significant Accounting Policies and Accounting
Estimates of Section X.
13. Accounts receivable financing: None
14. Other receivables
Recognition methods and accounting treatment methods for expected credit loss in other receivables
For details, please refer to 10. Financial instruments in V. Significant Accounting Policies and Accounting
Estimates of Section X.
15. Inventories
(1) Classification of inventories
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Inventories mainly include raw materials, goods in process, materials for consigned processing, commodity stocks,
packages, and low-value consumables.
(2) Pricing methods for inventory acquisition and delivery
Inventories are priced at actual cost when they are acquired. Inventory costs include procurement costs,
processing cost, and other costs. Inventories are priced by the weighted average method during receipt and
delivery.
(3) Methods for recognition of the net realizable value of inventories and the provisions for impairment of
inventories
The net realizable value refers to the amount of the estimated selling price of the inventory minus the estimated
cost, estimated selling expenses, and related taxes and fees at the time of completion in daily activities. When
recognizing the net realizable value of inventories based on the substantial evidence obtained, the Company also
considers the purpose of holding the inventories and the impact on matters after the balance sheet date.
On the balance sheet date, inventories are measured at the lower of costs and the net realizable value. When the
net realizable value is lower than costs, the Company sets aside provisions for inventory impairment. Provisions
for inventory impairment are set aside based on the difference between the cost of individual inventory item and
its net realizable value.
After provisions for the inventory impairment are set aside, if the influencing factors in previous write-down of
the inventory value disappear, causing the net realizable value of the inventory to be higher than its book value, it
shall be reversed within the amount of the provisions for inventory impairment that have been set aside and
recognized as the profit and loss of the current period.
(4) The perpetual inventory system is adopted for the inventories.
(5) Amortization method for low-value consumables and packages
The one-time amortization method is adopted for low-value consumables and packages upon receipt.
16. Contract assets: None
17. Contract costs: None
18. Assets held for sale
The Company classifies non-current assets or a disposal group as held for sale (including exchange of non-
monetary assets with commercial substance, the same below) if their book values are recovered principally
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through disposal rather than through continuing use. Specifically, the following conditions shall be met
simultaneously: A certain non-current asset or disposal group can be sold immediately under the current
conditions according to the practice of selling such assets or disposal groups in similar transactions; the Company
has made a resolution of an offer and obtained the purchase commitment; the sale is expected to be completed
within one year. Among them, the disposal group refers to a group of assets that are disposed of as a whole
through sale or other means in a transaction, and the liabilities directly related to these assets that are transferred in
the transaction. If the asset group or the combination of asset groups to which the goodwill (obtained from
business combination) has been allocated in accordance with the Accounting Standards for Business Enterprises
No. 8 -- Impairment of Assets, the disposal group shall include the goodwill allocated to it.
During initial measurement or re-measurement of the non-current assets and disposal groups classified into held-
for-sale assets on the balance sheet date, if the book value of such assets is higher than the net value deducting the
cost of offer, the book value is written down to the recoverable amount by the Company, the written-down amount
is recognized as profit and loss of the current period and impairment provisions are set aside at the same time. For
the disposal group, the recognized asset impairment loss is first deducted from the book value of the goodwill in
the disposal group, and then deducted in proportion from the book value of non-current assets specified in the
applicable Accounting Standards for Business Enterprises No. 42 - Non-Current Assets and Disposal Groups Held
for Sale and Discontinued Operations (hereinafter referred to as the “Standards for Assets Held for Sale”). If the
fair value of the disposal group held for sale on the subsequent balance sheet date increases after deducting the
selling expenses, the previously written down amount shall be restored, and reversed within the amount of the
asset impairment losses recognized for non-current assets as per the Standards for Assets Held for Sale applicable
after the assets are classified into those held for sale, and the reversed amount shall be recognized as the profit and
loss of the current period. Besides, the book value of the reversed amount shall be increased in proportion
according to the proportion of the book value of the non-current assets specified in the Standards for Assets Held
for Sale applicable to those except for the goodwill in the disposal group. The book value of the goodwill that has
been deducted, and the asset impairment losses recognized before the non-current assets are classified into assets
held for sale as per the Standards for Assets Held for Sale shall not be reversed.
Non-current assets held for sale and non-current assets in the disposal group are not subject to depreciation or
amortization. Interest and other expenses on liabilities in the disposal group held for sale continue to be
recognized.
When the non-current assets or disposal group no longer meets the conditions for classification into the assets held
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for sale, the Company no longer classifies them into the category or removes the non-current assets from the
disposal group held for sale, and measures them at the lower of the following two: (1) in terms of the book value
before classification into assets held for sale, for which the measurement standard is the amount after adjustment
according to the depreciation, amortization, or impairment that should have been recognized under the assumption
that they are not classified into assets held for sale; and (2) the recoverable amount.
19. Investments in creditor’s rights: None
20. Other investments in creditor’s rights: None
21. Long-term receivables: None
22. Long-term equity investments
The long-term equity investments herein refer to the long-term equity investments in which the Company has
control, joint control, or significant influence on the investee. Long-term equity investments where the Company
has no control, joint control, or significant influence on the investee are accounted as financial assets measured at
fair value through profit and loss of the current period. Among them, for those that are non-tradable, the Company
may choose to designate them as the financial assets measured at fair value through other comprehensive income
for accounting during initial recognition. See “Note V (10)” for their detailed accounting policies.
Joint control refers to the common control over a particular arrangement according to relevant agreement, and that
the decisions on relevant activities under such arrangement are subject to the unanimous consent from the parties
sharing the joint control. Significant influence means having the power to participate in the financial and
operating policy decision-making of the investee, but cannot control or, together with other parties, jointly control
the formulation of these policies.
(1) Determination of investment cost
For long-term equity investments obtained from combination of enterprises under common control, the share of
the combined party’s owner’s equity in the book value of the consolidated financial statements of the final
controlling party which is acquired on the combination date shall be regarded as the initial investment cost for
long-term equity investments. The capital reserves shall be adjusted if there is difference between the initial
investment cost of long-term equity investment and the cash paid, the transferred non-cash assets, and the book
value of the debts assumed; if the capital reserve is insufficient to offset, the retained earnings shall be adjusted. If
the equity securities issued are used as the combination consideration, the share of the combined party’s owner’s
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equity in the book value of the consolidated financial statements of the final controlling party which is acquired on
the combination date shall be regarded as the initial investment cost for long-term equity investments; the total
book value of the shares issued shall be the share capital; the capital reserves shall be adjusted if there is
difference between the initial investment cost of long-term equity investments and the total book value of the
shares issued; if the capital reserves are insufficient to balance the difference, retained earnings shall be adjusted.
For long-term equity investments obtained from combination of enterprises under different control, the
combination costs on the acquisition date shall be used as the initial investment costs of the long-term equity
investment; the combination costs include the sum of the assets paid by the acquirer, the liabilities incurred or
assumed, and the fair value of the equity securities issued.
Intermediary expenses such as auditing, legal services, assessment and consulting and other related management
expenses incurred by the combining party or acquirer for the business combination shall be recognized as the
profit and loss of the current period.
Other equity investments except for long-term equity investments formed via business combination are initially
measured at cost. Subject to the way the long-term equity investments are obtained, the costs shall be recognized
based on the cash actually paid by the Company for acquisition, the fair value of the equity securities issued by
the Company, the value agreed in the investment contract or agreement, the fair value or original book value of the
assets swapped out in a non-monetary asset exchange transaction, and the fair value of the long-term equity
investment itself. Expenses, taxes, and other necessary expenditures directly related to acquisition of long-term
equity investments are also recognized as investment costs.
(2) Subsequent measurement and recognition of profit and loss
If the Company has common control or significant influence over the investee (except for constituting co-
proprietors), the long-term equity investment shall be accounted for by using the equity method. Additionally, the
Company’s financial statements apply the cost method for long-term equity investments that can make control in
the investee
1) Long-term equity investments accounted for using the cost method
When the cost method is used, the long-term equity investments are calculated according to the initial investment
cost. In the event that the investment is added or recovered, the cost of the long-term equity investments shall be
adjusted. With the exception of the price actually paid at the acquisition of investment or cash dividends or profits
included in consideration, declared but not issued yet, the return on investment of the current period shall be
recognized according to the cash dividends or profits declared to be issued by the investee.
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2) Long-term equity investments accounted for using the equity method
When using equity method, if the initial investment cost of long-term equity investments is greater than the fair
value share of the identifiable net assets entitled of the investee at the time of investment, the initial investment of
the long-term equity investments shall not be adjusted. If the initial investment cost of long-term equity
investments is lower than the fair value share of the identifiable net assets entitled of the investee at the time of
investment, the difference shall be recognized as profit and loss of the current period and the cost of the long-term
equity investments shall be adjusted at the same time.
When the equity method is used, return on investment and other comprehensive income shall be respectively
determined based on the share of net profit or loss and other comprehensive income realized by the investee that
shall be attributable or assumed, and the book value of long-term equity investments shall be adjusted at the same
time. Attributable share shall be calculated based on the profit or cash dividends declared by the investee and the
book value of long-term equity investments shall be accordingly decreased. In respect to other changes of owner’s
equity of the investee in addition to net profit or loss, other comprehensive income and profit distribution, the
book value of long-term equity investments shall be adjusted and recognized as capital surplus. When confirming
the share of the investee’s net profit and loss, the Company shall confirm the investee’s net profit after adjustment
based on the fair value of the identifiable net assets of the investee at the acquisition of the investment. Where the
accounting policy and accounting period adopted by the investee differs from those of the Company, the investee’s
financial statements shall be adjusted according to the Company’s accounting policy and accounting period, and
the return on investment and other comprehensive income shall be recognized accordingly. Where the transactions
are between the Company and the associates and joint ventures, and the assets that are invested or sold do not
constitute business, unrealized internal transaction profits and losses incurred between the Company and the
associates and joint ventures shall be offset with the part attributable to the Company which is calculated on a due
pro-rata basis, and the return on investment shall be recognized on this basis. However, unrealized internal
transaction losses incurred between the Company and the investees shall not be offset if they fall under the
impairment losses on assets transferred.
When confirming the limit of net loss incurred by the investee, the limit is the extent that the book value of the
long-term equity investments and other long-term equity that substantially constitutes a net investment in the
investment target is written down to zero. Additionally, if the Company has obligations to assume additional
losses of the investee, provisions are recognized according to the expected obligation, and recognized as
investment losses for the period. Where the investee records net profit in the future, the Company resumes and
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recognizes the profit-sharing amount after such amount makes up the unrecognized loss-sharing amount.
23. Investment property
Measurement model for investment property
Measurement by the cost method
Depreciation or amortization method
Investment properties are real estate held to generate rental income or earn capital gains or both. Investment
properties include land use rights leased out, land use rights held for transfer after appreciation, buildings leased
out, etc.
Investment property is initially measured at cost. Subsequent costs are included in the investment property’s cost
only when it is probable that future economic benefits associated with the item will flow to the Company and the
cost of the item can be measured reliably. Other subsequent costs are recognized as profit and loss of the current
period when incurred.
The Company adopts the cost model for subsequent measurement of investment property, and depreciates or
amortizes it according to policies consistent with those for buildings or land use rights.
Impairment test method and impairment provision method for investment property are detailed in “Note V (31)”.
Investment properties are derecognized when they are disposed of or permanently withdrawn from use and it is
expected that no economic benefit can be generated from its disposal. The income from selling, transferring,
writing off or destroying investment property, less its book value and relevant taxes and fees, is recognized as
profit and loss of the current period.
24. Fixed assets
(1) Recognition conditions
Fixed assets are tangible assets with a useful life of more than one accounting year that are held for production or
supply of goods or labor services, for rental to third parties, or for use in the organizations. Fixed assets shall only
be recognized when relevant economic interest may flow into the Company and costs thereof can be reliably
measured. Fixed assets shall be initially measured at cost and by taking into account the impact of estimated
disposal expense.
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(2) Depreciation method
Type Depreciation method Depreciation life Residual value rate Annual depreciation rate
3.00%, 3.17% to 9.00%,
Properties and buildings Straight-line depreciation 10 to 30 years 5%. 10%
9.50%
4.50%, 4.75% to 45.00%,
Equipment Straight-line depreciation 2 to 20 years 5%. 10%
47.50%
6.43%, 6.79% to 18.00%,
Motor vehicles Straight-line depreciation 5 to 14 years 5%. 10%
19.00%
11.25%, 11.88% to
Office equipment Straight-line depreciation 3 to 8 years 5%. 10%
30.00%, 31.67%
18.00%, 19.00% to
Production equipment Straight-line depreciation 2 to 5 years 5%. 10%
45.00%, 47.50%
Estimated residual value refers to the current amount where, supposed the service life of a fixed asset has expired
and it is in the expected status of such expiration, the Company obtains from the disposal of such asset after the
estimated disposal expense is deducted.
(3) Determination basis, pricing method and depreciation method of fixed assets acquired under finance
leases
Leases of assets where substantially all the risks and rewards of ownership have been transferred are classified as
finance leases. Title may or may not eventually be transferred. The fixed asset leased in through finance leases
adopts the same depreciation policy self-owned fixed assets. If it can be reasonably ascertained that the ownership
of the asset leased can be obtained by the expiration of the tenancy, the asset is depreciated over its service life; if
not, the asset is depreciated over the shorter of the tenancy and the service life of the leased asset.
25. Construction work in process
Construction work in progress is measured at actual project expenditure, comprising project expenditure incurred
during construction and other necessary cost incurred.
The Company’s Construction work in progress is transferred to fixed assets when the assets are ready for their
intended use. If the fixed assets under construction have reached the expected usable status but have not yet
completed the final account for completed project, they shall be recognized as fixed assets according to the
estimated value, and accrue depreciation. After the completion of the final account for completed project, the
original estimated value is adjusted according to the actual cost, but the original accrued depreciation amount is
not adjusted.
Impairment test method and impairment provision method for Construction work in progress are detailed in “Note
V (31)”.
26. Borrowing costs
Borrowing costs include interest on borrowings, amortizations of discounts or premiums, incidental expenses,
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exchange difference resulting from foreign-currency borrowings, etc. The borrowing costs that can be directly
attributable to the acquisition, construction or production of an asset eligible for capitalization shall be capitalized
if the capital expenditures have been incurred, the borrowing costs have been incurred, or the necessary purchase,
construction or production activities to make the asset reach the expected available or marketable state have begun.
When the assets with the purchase, construction or production meeting the capitalization conditions reach the
expected available or marketable state, they cease to be capitalized. Any other borrowing costs are recognized as
an expense in the period when they are incurred.
The amount of interest that shall be capitalized is determined based on the interest expenses incurred in the period
when a specifically borrowed fund is obtained less any income earned on the unused borrowing fund as a deposit
in a bank or as a temporary investment. Where funds are borrowed for a general purpose, the amount of interest
that shall be capitalized is determined by multiplying the part of the accumulative asset disbursements in excess of
the weighted average asset disbursement for the specifically borrowed fund by the capitalization rate of the
general borrowing used. The capitalization rate is the weighted average interest rates applicable to the general-
purpose borrowings.
During the capitalization, all exchange differences arising from earmarked foreign-currency borrowings shall be
capitalized; exchange differences arising from general-purpose foreign-currency borrowings shall be recognized
as profit and loss of the current period.
Assets eligible for capitalization refer to assets such as fixed assets, investment real estates and inventories that
can reach the expected available or marketable status after a long period of purchase, construction or production
activities.
If the acquisition, construction or production of an asset eligible for capitalization is continuously suspended for
over three months for abnormal reasons, capitalization of the borrowing costs shall be suspended, until the
acquisition, construction or production of the asset is resumed.
27. Biological assets: None
28. Oil & gas assets: None
29. Right-of-use assets
(1) Recognition methods
Under the new lease standards, except for short-term leases and low-value asset leases, the lessee will no longer
distinguish financial leases and operating leases. All leases adopt the same accounting methods, and right-of-use
assets and lease liabilities need to be recognized.
Right-of-use assets refer to the right of the Company as the lessee to use the leased assets during the term of lease.
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(2) Accounting treatment methods
The right-of-use asset is measured at cost at the commencement date. The cost of right-of-use asset comprises: the
amount equal to the lease liability at its initial recognition; lease payments made at or before the commencement
of the lease, less any lease incentives received; any initial direct costs incurred by the lessee; an estimate of costs
to be incurred by the lessee in dismantling and removing the underlying asset, restoring the site on which it is
located or restoring the underlying asset to the condition required by the terms and conditions of the lease. The
Company as the lessee recognizes and measures the aforementioned dismantling, restoration and other costs in
accordance with Accounting Standard for Business Enterprises No. 13 - Contingencies. Subsequent adjustments
are made for any remeasurement of lease liabilities.
The straight-line method is used to accrue depreciation. For right-of-use assets, if it is reasonably ascertained that
the ownership of the asset will be transferred to the lessee at the end of the lease term, then depreciation period
runs to the end of the useful life of the lease asset. If it cannot be reasonably ascertain that the ownership of the
asset leased will be transferred to the lessee at the end of the lease term, then depreciation period runs to the
earlier of the end of the useful life of the asset or the end of the lease term.
Impairment test method and impairment provision method for right-of-use assets are detailed in “Note V (31)”.
For short-term leases and low-value asset leases, the Company may choose not to recognize as right-of-use assets
but as the cost of the related asset or as profit and loss of the current period in accordance with the straight-line
method or other systematically reasonable methods during each period of the lease.
30. Intangible assets
(1) Pricing method, service life, and impairment test
Intangible assets refer to identifiable non-monetary assets without physical substance owned or controlled by the
Company.
Intangible assets are initially measured at cost. Costs of intangible assets are included in intangible assets’ book
value, only when it is probable that future economic benefits associated with the item will flow to the Company
and the cost of the item can be measured reliably. Other costs of intangible assets are recognized as profit and loss
of the current period when incurred.
Land use rights acquired are generally accounted for as intangible assets. With respect to self-built buildings
including plants, the relevant land use right expenses and buildings’ construction costs are accounted for as
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intangible assets and fixed assets, respectively. For purchased houses and buildings, the price paid is distributed
between the land use right and the building. If it is difficult to distribute, it shall all be included in fixed assets.
From the beginning of use of intangible assets with finite service life, the accumulated amount of the original
value less estimated net residual value and the provisions for asset impairment set aside shall be amortized evenly
in stages by straight-line method over their service life. Intangible assets with uncertain service lives are not
amortized.
The Company reviews the service life and amortization method of intangible asset with finite service life at the
end of the reporting period, and a change therein (if any) shall be accounted for as a change in accounting
estimates. Additionally, the Company reviews the service life and amortization method of intangible asset with
uncertain service life. If there is evidence that the period when it brings economic benefits to the enterprise is
foreseeable, its service life shall be estimated and it is amortized according to the amortization policy for
intangible assets with finite service life.
Impairment test method and impairment provision method for intangible assets are detailed in “Note V (31)”.
(2) Accounting policy for expenditure on internal research and development
The Company classifies the expenditure on an internal research and development project into expenditure on the
research phase and expenditure on the development phase.
Expenditure on the research phase is recognized as profit and loss of the current period when incurred.
Expenditure on the development phase is recognized as intangible asset when all the following criteria are met,
while expenditure in the development phase that does not meet the following criteria is recognized as profit and
loss of the current period when incurred:
1) technically feasible to complete the intangible asset so that it will be available for use or sale;
2) the intention to complete the intangible asset and use or sell it;
3) how the intangible asset will generate probable future economic benefits. Among other things, the Company
can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it
is to be used internally, the usefulness of the intangible asset;
4) the availability of adequate technical, financial and other resources to complete the development and the ability
to use or sell the intangible asset;
5) the ability to measure reliably the expenditure attributable to the intangible asset during the development.
Where the expenditure on research and development incurred cannot be classified into the expenditure on research
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phase or the expenditure on development phase, it shall be recognized as profit and loss of the current period
when incurred.
31. Long-term asset impairment
The Company determines on the balance sheet date whether there is any indication that the non-current and non-
financial assets may have been impaired, including fixed assets, construction work in progress, intangible assets
with limited service life, and investment properties measured using the cost model, and long-term equity
investments in subsidiaries, joint ventures and associates. If there is any indication that the asset is likely to be
impaired, the Company will estimate the recoverable amount and carry out the impairment test. Impairment tests
shall be conducted each year for goodwill and intangible assets with uncertain service life and not yet in use,
whether or not there is any indication of impairment.
If an impairment test shows that the recoverable amount of an asset is lower than its book value, the difference is
recognized as a provision for impairment and recognized as the impairment loss. The recoverable amount is
determined based on the higher of the net amount of the fair value of the asset minus the disposal expenses and
the present value of the expected future cash flow of the asset. The fair value of asset is determined according to
the price of the sales agreement in fair trade. If there is no sales agreement but an active market for the asset, the
fair value is determined according to the price offered by the buyer for the asset. If there is neither sales agreement
nor active market for the asset, the fair value of the asset shall be estimated based on the best information
available. The disposal costs include legal fees, relevant taxes and fees, as well as handling fees related to the
disposal of asset, and the direct costs incurred to ensure the asset reaches the marketable state. The present value
of the expected future cash flow of an asset shall be determined by the discounted cash at an appropriate discount
rate, on the basis of the expected future cash flow generated during the continuous use or final disposal of an asset.
Provisions for asset impairment are calculated and recognized on an individual basis. If it is difficult to estimate
the recoverable amount of individual assets, the Company will determine the recoverable amount of the asset
group on the basis of the asset group to which the asset belongs. Asset group refers to the smallest asset portfolio
which can independently generate cash inflows.
When an impairment test is performed on the goodwill separately listed in the financial statement, book value of
such goodwill is apportioned to the asset group or combination of asset groups that can benefit from the synergy
effect of business combination. If the test result shows that the recoverable amount of the asset group or
combination of asset groups is lower than their book value, corresponding impairment losses on goodwill will be
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recognized. The impairment loss shall first offset against the book value of goodwill that is apportioned to asset
group or a combination of asset groups, and then offset against the book value of assets excluding goodwill in the
asset group or the combination of asset groups on a pro-rata basis according to the proportion of their book value.
Once the aforementioned asset impairment loss is recognized, it will not be reversed in subsequent accounting
periods even if the value can be recovered.
32. Long-term unamortized expenses
Long-term unamortized expenses are expenses which have been incurred but shall be amortized over a period
longer than one year, including the reporting period and the future periods. Long-term unamortized expenses shall
be amortized based on the straight-line method over the expected benefit period.
33. Contract liabilities
A contract liability is the Group’s obligation to transfer goods or services to a customer for which the Group has
received consideration from the customer.
Contract assets and liabilities within a single contract should be presented on a net basis. If the net amount is debit
balance, it shall be presented in the item of “contract assets” or “other non-current assets” based on its liquidity. If
the net amount is credit balance, it shall be presented in the item of “contract liabilities” or “other non-current
liabilities” based on its liquidity.
34. Employee remuneration
(1) Accounting treatment method for short-term remuneration
Short-term remuneration includes salaries, bonuses, allowances and subsidies, employee welfare, medical
insurance fees, maternity insurance fees, employment injury insurance fees, housing provident funds, labor union
fees, staff education funds, and non-monetary welfare. The Company shall, within the accounting period when its
employees provide service, recognize actual short-term remuneration as liabilities which shall be recognized as
profit and loss of the current period or relevant asset costs. Wherein, non-monetary benefits are measured at fair
value.
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(2) Accounting treatment method for post-employment benefits
Post-employment benefit includes basic endowment insurance, unemployment insurance, etc. It also includes
defined contribution plans. Where defined contribution plans are adopted, the corresponding amount payable shall
be recognized as profit and loss of the current period or relevant asset costs in which it is incurred.
(3) Accounting treatment method for dismissal benefits
If the Company terminates the labor relationship with an employee before the employee’s labor contract expires,
or proposes to give the employee compensation for encouraging the employee to voluntarily accept dismissal, the
liabilities arising from the compensation giving to the employee for the termination of the labor relationship with
the employee shall be recognized as profit and loss of the current period, when the Company cannot unilaterally
withdraw the termination of the labor relationship plan or the dismissal proposal, or when it recognizes the costs
related to the restructuring of the payment of the dismissal benefits, whichever is earlier. However, if it is expected
that the dismissal benefits cannot be paid in full within twelve months after the end of the annual reporting period,
they shall be accounted for according to other long-term employee remunerations.
Internal retirement schemes for employees shall be accounted for following the same principles of the above
dismissal benefits. Where the salaries and social insurance fees of early retirees to be paid by the Company from
the date when employees stop providing services to the normal retirement date meet the recognition conditions for
projected liabilities, they shall be recognized as profit and loss of the current period.
(4) Accounting treatment method for other long-term employee benefits
Other long-term benefits provided by the Company to employees that meet the conditions of the defined
contribution plan are accounted for in accordance with the defined contribution plan; other long-term benefits are
accounted for in accordance with the defined benefit plan.
35. Lease liabilities
(1) Recognition methods
Under the new lease standards, except for short-term leases and low-value asset leases, the lessee will no longer
distinguish financial leases and operating leases. All leases adopt the same accounting methods, and right-of-use
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assets and lease liabilities need to be recognized.
(2) Accounting treatment methods
1) The lessee shall calculate the interest expenses of the lease liability in each period of the lease term and include
them in the profit and loss of the current period.
2) For short-term leases and low-value asset leases, the lessee may choose not to recognize as right-of-use assets
but as the cost of the related asset or as profit and loss of the current period in accordance with the straight-line
method or other systematically reasonable methods during each period of the lease term;
Pursuant to requirements of the new lease standards, the Company recognizes lease liabilities for all leased assets
based on the present value of the minimum lease payment of future rent payable (except for short-term leases and
low-value asset leases that have been handled with the simplified method), and confirm depreciation and
unrecognized financing expenses separately from January 1, 2021. Information of the comparable period is not
adjusted.
36. Provision
An obligation related to contingent issues and meeting the following conditions shall be deemed a provision: (1)
such an obligation is a current one assumed by the Company; (2) fulfilling such an obligation might cause
economic benefits to flow out of the Company; and (3) the amount of such an obligation is measurable reliably.
On the balance sheet date, a provision is measured at the best estimate of the expenditure required to settle the
related present obligation, with comprehensive consideration of factors such as the risks, uncertainty and time
value of money relating to a contingency.
A provision is separately recognized as an asset and the recognized compensation amount shall not exceed the
book value of the provision, when all or part of the expenses required to pay off the provision are expected to be
compensated by a third party and the amount of compensation is basically determined to be receivable.
37. Share-based payment
Share-based payment is the transaction made through granting equity instruments or bearing the liabilities
recognized based on such instruments in exchange for services rendered by employees or other parties. The
Company’s share-based payment includes equity-settled share-based payment and cash-settled share-based
payment.
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(1) Equity-settled share-based payment
Where the share payment is settled through equity for acquisition of service from employees, it shall be measured
at the fair value of the equity instruments granted to the employees. If the right cannot be exercised until the
vesting period ends or until the prescribed performance conditions are met, the amount of such fair value shall,
based on the best estimate of the number of vested equity instruments, be recognized as the relevant costs or
expenses by straight-line method; if the right can be exercised immediately following the grant, the amount of
such fair value shall be recognized as the relevant costs or expenses on the grant date, and the capital reserve shall
be increased accordingly.
On each balance sheet date within the vesting period, the Company carries out the best estimation based on such
follow-up information such as the variation of the number of vested staff acquired recently, and revises the
number of estimated vested equity instruments. The impact of the above estimates shall be recognized as the
relevant costs or expenses of the current period, and the capital reserve shall be adjusted accordingly.
For an equity-settled share-based payment in return for the service of any other party, if the fair value of the
service of any other party can be reliably measured, it shall be measured at the fair value of the service of any
other party on the acquisition date; if the fair value of the service of any other party cannot be reliably measured,
but the fair value of the equity instruments can be reliably measured, it shall be measured at the fair value of the
equity instruments on the acquisition date and included in the relevant costs or expenses, and the shareholders’
equity shall be increased correspondingly.
(2) Cash-settled share payment
The cash-settled share-based payment shall be measured at the fair value of the Company’s liabilities determined
based on shares or other equity instruments. If the right may be exercised immediately after the grant, relevant
costs or expenses shall be recognized the grant date, and the liabilities shall be increased accordingly. If the right
may not be exercised until the vesting period ends or until the specified performance conditions are met, on each
balance sheet date within the vesting period, the services obtained in the current period shall, based on the best
estimate of the information about the exercisable right, be recognized as the relevant costs or expenses at the fair
value of the liability undertaken by the Company, and liabilities shall be increased accordingly.
The fair value of liabilities is re-measured and any change thereto is recognized as profit and loss of the current
period on each balance sheet date and settlement date prior to settlement of the relevant liabilities.
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38. Preference shares, perpetual bonds and other financial instruments: None
39. Revenue
Accounting policy for recognition and measurement of revenue
The revenue is recognized when the customers take control of the relevant goods or services if the contract
between the Company and the customers meet all the following conditions: 1) the parties to the contract have
approved such contract and undertake to perform their respective obligations; 2) the contract has specified the
rights and obligations of the parties thereto and in connection with the transfer of goods or provision of labor
services; 3) the contract sets out clear payment terms related to the transfer of goods; 4) the contract has
commercial substance, meaning that the performance thereof will change the risk, time distribution or amount of
the Company’s future cash flow; 5) the Company is very likely to recover the consideration obtained by
transferring goods to customers.
On the enforcing date of the contract, the Company identifies all individual performance obligations in the
contract, and apportions the transaction price to each individual performance obligation according to the relative
proportion of the individual selling price of the goods. When determining the transaction price, the Company has
considered the impact of such factors including variable consideration, major financing component of the contract,
non-cash consideration, and consideration payable to the customer.
With respect to each individual performance obligation of the contract, the Company will recognize the
transaction price apportioned to such obligation as revenue based on the progress of performance during the
relevant performance periods, if any of the following conditions is met: 1) the customer obtains and consumes the
economic benefits brought by the Company’s performance during such performance; 2) the customer can control
the goods in progress during the Company’s performance; 3) the goods produced from the Company’s
performance has irreplaceable use, and in respect of the portion of revenue arising from the Company’s
performance completed to date, the Company is entitled to collect revenue during the entire validity period of the
contract. The progress of performance is determined according to the nature of the transferred goods using the
input or output method. When such progress cannot be reasonably determined, if the costs incurred are expected
to be compensated, the Company recognizes revenue based on the amount of costs incurred, until the progress of
performance can be reasonably determined.
If none of the aforesaid conditions is met, the Company will recognize the transaction price apportioned to such
individual performance obligation when the customer obtains the control over relevant goods. To decide whether
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the customer has obtained the control over goods, the Company takes into account the following indications: 1)
the enterprise has the present right to collection for the goods, meaning the customer bears the present obligation
to payment for the goods; 2) the enterprise has passed the legal title to the goods to the customer, meaning the
customer has had the legal title to the goods; 3) the enterprise has transferred the physical possession of the goods
to the customer, meaning the customer has had the physical possession of the goods; 4) the enterprise has
transferred the major risks and remunerations concerning the title to the goods to the customer, meaning the
customer has obtained the major risks and remunerations concerning the title to the goods; 5) the customer has
accepted the goods; 6) other indications to show that the customer has obtained the control over the goods.
Generally, the Company’s business of goods selling only comprises the performance obligation of transferring the
goods. The control of the goods is transferred when they are sent out and the Company receives the signed receipt
and other documents from the customer, so the Company confirms the realization of revenue at that point in time.
The discounts, rewards and other arrangements in some contracts between the Company and customers constitute
variable consideration. The Company uses the expected value method or the most likely amount to determine the
best estimates for variable consideration, but the transaction price containing variable consideration shall not
exceed the amount of cumulatively recognized revenue that is unlikely to have major reversals when the relevant
uncertainties are eliminated.
Situations where different business models are adopted for different businesses, which may lead to the differences
in the accounting policy for recognition of revenue: None
40. Government grants
Government grants are monetary or non-monetary assets acquired by the Company from the government free of
charge, excluding the capital invested by the government as an investor and granted corresponding owner’s equity.
Government grants are classified into government grants related to assets and government grants related to
income. The Company defines the government grants for purchasing or constructing or otherwise forming long-
term assets as asset-related government grants; other government grants are defined as the income-related
government grants. Government grants shall be measured at the amount received or receivable if they are
monetary assets. Non-monetary government grants shall be measured at fair value; if the fair value cannot be
reliably obtained, they shall be measured at the nominal amount. The government grants measured at the nominal
amount shall be directly recognized as the profit and loss of the current period.
Asset-related government grants are recognized as deferred income, and included in the profit and loss of the
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current period in stages according to a reasonable and systematic method over the service life of the relevant
assets. The income-related government grants shall be recognized as deferred income if they are used to
compensate relevant expenses or losses in subsequent periods, and shall be recognized as profit and loss of the
current period during the recognition of related expenses; the grants used to compensate related expenses or losses
already incurred shall be directly recognized as profit and loss of the current period.
The government grants related to both assets and income shall be accounted for by distinguishing different parts;
if it is difficult to distinguish, they shall be, as a whole, classified as income-related government grants.
Government grants related to the Company’s daily activities shall be recognized as other profit and loss or write
down relevant costs according to the essence of economic business; those unrelated to the Company’s daily
activities shall be recognized as non-operating income and expenditure.
If the recognized government grants need to be returned and there is relevant deferred income balance, the book
balance of relevant deferred income shall be written off, and the excess shall be recognized as profit and loss of
the current period; otherwise, government grants shall be directly recognized as profit and loss of the current
period.
41. Deferred income tax assets/deferred income tax liabilities
(1) Current income tax
On the balance sheet date, the Company measures a current tax liability (or asset) arising from the current and
prior periods based on the amount of income tax expected to be paid by the Company (or returned by tax authority)
calculated by related tax laws. The taxable income which is the basis for calculation of the current income tax is
calculated after appropriate adjustments to the pretax accounting profits for the reporting period.
(2) Deferred income tax assets and deferred income tax liabilities
For the difference between the book value of certain assets and liabilities and their tax bases, and the temporary
differences between the book values and the tax bases of items, of which the tax bases can be determined for tax
purposes according to the tax laws but which have not been recognized as assets and liabilities, the Company
recognizes deferred income tax assets and deferred income tax liabilities using the balance sheet debt method.
Where the taxable temporary differences arise from the initial recognition of goodwill and the initial recognition
of an asset or liability arising from the transaction that is not a business combination, nor, at the time of the
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transaction, affects neither accounting profit and taxable profit (or deductible loss), the relevant deferred income
tax liability shall not be recognized. Additionally, in respect of taxable temporary difference associated with
investments in subsidiaries, joint ventures and associates, where the Company can control the timing of the
reversal of the temporary differences and it is probable that the temporary differences will not be reversed in the
foreseeable future, the relevant deferred income tax liability shall not be recognized. Other than the above
exceptions, the Company shall recognize deferred income tax liabilities arising out from all other taxable
temporary differences.
Where the deductible temporary differences arise from the initial recognition of an asset or liability arising from
the transaction that is not a business combination, nor, at the time of the transaction, affects neither accounting
profit and taxable profit (or deductible loss), the relevant deferred income tax liability shall not be recognized.
Additionally, in respect of deductible temporary difference associated with investments in subsidiaries, joint
ventures and associates, where it is probable that the temporary differences will not be reversed in the foreseeable
future or taxable profit will not be available against which the deductible temporary differences can be utilized in
the future, the relevant deferred income tax liability shall not be recognized. Other than the above exceptions, the
Company recognizes a deferred tax asset for other deductible temporary differences, to the extent that it is
probable that future taxable profit will be available against which the deductible temporary differences can be
utilized.
The tax effects of deductible losses and taxes available for carrying over are recognized as an asset when it is
probable that future taxable profits would be available against which these losses can be utilized.
At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates that are expected to apply
to the period when the asset is realized or the liability is settled, according to the requirements of tax laws.
The book value of deferred tax assets is reviewed at the balance sheet date and written down to the extent that it is
no longer probable that sufficient taxable profit will be available in future periods to allow the deferred tax assets
to be utilized. Such write-down is reversed when it becomes probable that sufficient taxable profits will be
available.
(3) Income tax expenses
Income taxes comprise current income tax and deferred income tax.
The current income tax and deferred income tax expense or income is recognized as the profit and loss of the
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current period except that the current income tax and deferred income tax is related to transactions or events,
which are recognized as other comprehensive income or directly recognized as shareholders’ equity, and thus
recognized as other comprehensive income or shareholders’ equity, and that the book value of goodwill is adjusted
due to deferred income tax arising from business combination.
42. Leases
(1) Accounting treatment method for operating lease
1) Assets rented through operating lease
Under the new lease standards, except for short-term leases and low-value asset leases, the lessee will no longer
distinguish financial leases and operating leases. All leases adopt the same accounting methods, and right-of-use
assets and lease liabilities need to be recognized.
For right-of-use assets, if it is reasonably ascertained that the ownership of the asset will be transferred to the
lessee at the end of the lease term, then depreciation period runs to the end of the useful life of the lease asset. If it
cannot be reasonably ascertained that the ownership of the leased asset will be transferred to the lessee at the end
of the lease term, then depreciation period runs to the earlier of the end of the useful life of the asset or the end of
the lease term. Meanwhile, the lessee needs to determine whether the right-of-use asset is impaired and account
for the identified impairment loss.
For short-term leases and low-value asset leases, the Company may choose not to recognize as right-of-use assets
but as the cost of the related asset or as profit and loss of the current period in accordance with the straight-line
method or other systematically reasonable methods during each period of the lease.
2) Assets leased out through operating lease
Lease payments collected by the Company for leasing out assets are amortized on a straight-line basis during the
entire lease term without deducting the rent-free period and recognized as lease income. The initial direct costs
paid by the Company relevant to the lease transaction shall be included in the current expenses; if the amount is
large, it shall be capitalized, and recognized as profit and loss of the current period on the same basis as the
recognized lease income over the lease term.
For lease-related expenses that should be borne by the lessee but borne by the Company instead, the Company
should deduct them from the total rental income, and the amount after deduction is allocated within the lease term.
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(2) Accounting treatment method for finance lease
1) Assets rented through finance lease
The Company takes the lower of the fair value of the rented asset and the present value of the minimum lease
payments as the entry value of the rented asset, the minimum lease payments as the entry value of the long-term
payable, and the difference as unrecognized financing cost.
For details on the determination basis, pricing method and depreciation method of assets rented through finance
leases, please refer to “Note V (24)”.
The Company uses the effective interest method to amortize unrecognized financing cost during the lease term of
the asset and include them in finance expenses.
2) Assets leased out through finance lease
The Company recognizes the difference between the sum of financing lease receivable and unguaranteed residual
value and their present value as unrealized financing income on the lease start date, and recognizes as lease
income during each period when the rent is received in the future. Initial direct costs incurred to the Company
relevant to the lease transaction are included in the initial measurement of the financing lease receivable, and the
amount of revenue recognized during the lease period is reduced at the same time.
43. Other important accounting policies and accounting estimates: None
44. Significant changes of accounting policies and accounting estimates
(1) Significant changes of accounting policies
√ Applicable □ Not applicable
Contents and reasons for changes to
Approval procedure Remarks
accounting policies
On December 12, 2018, the Ministry of
Finance issued the revised Accounting
Standards for Business Enterprises No. 21
-- Leases (C.K. [2018] No. 35) (hereinafter
referred to as the “New Lease Standards”), On May 21, 2021, the Company convened
Details can be found in the Announcement
requiring that enterprises listed both within the 5th meeting of the fifth session of the
on Changes to Accounting Policies
the borders and abroad as well as Board of Directors and the 3rd meeting of
(Announcement No.: 2021-76) dated May
enterprises listed abroad and adopting the fifth session of the Board of
22, 2021 on CNINFO
IFRS or Accounting Standards for Supervisors, and approved the Proposal on
(http://www.cninfo.com.cn) .
Business Enterprises to prepare financial Changes to Accounting Policies.
statements should implement these revised
Standards from January 1, 2019; other
enterprises listed within China shall
implement these revised Standards from
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C&S Paper Co., Ltd. Semi-annual Report 2021
January 1, 2021.
(2) Significant changes of accounting estimates
□ Applicable √ Not applicable
(3) Description on the adjustment of relevant items in the financial statements at the beginning of the year
for the first time adoption of the new leasing standards since 2021
Applicable
Whether to adjust the subjects of the balance sheet at the beginning of the year
√ Yes □ No
Consolidated balance sheet
Unit: RMB
Item December 31, 2020 January 01, 2021 Adjustment number
Current assets:
Monetary funds 1,125,196,199.56 1,125,196,199.56
Settlement reserve
Lending to banks and
other financial institutions
Tradable financial assets
Derivative financial
assets
Notes receivable 724,419.74 724,419.74
Accounts receivable 1,051,423,939.59 1,051,423,939.59
Accounts receivable
financing
Prepayments 26,819,108.57 26,819,108.57
Premium receivable
Reinsurance payables
Reinsurance contract
reserves receivable
Other receivables 15,824,945.56 15,824,945.56
Including: Interest
receivable
Dividends
receivable
Financial assets held
under resale agreements
Inventory 1,661,274,495.32 1,661,274,495.32
Contract assets
Assets held for sale 57,073,059.69 57,073,059.69
Non-current assets due
140
C&S Paper Co., Ltd. Semi-annual Report 2021
within one year
Other current assets 101,584,569.30 101,584,569.30
Total current assets 4,039,920,737.33 4,039,920,737.33
Non-current assets:
Loans and advances to
customers
Investments in creditor’s
rights
Investments in other
creditor’s rights
Long-term receivable
Long-term equity
investment
Investment in other
equity instruments
Other non-current
financial assets
Investment property 34,575,365.94 34,575,365.94
Fixed assets 2,792,587,302.21 2,792,587,302.21
Construction work in
275,904,617.95 275,904,617.95
progress
Productive biological
assets
Oil & gas assets
Right-of-use assets 10,611,654.31 10,611,654.31
Intangible assets 169,355,772.24 169,355,772.24
Development expenses
Goodwill 64,654.15 64,654.15
Long-term deferred
26,635,983.14 26,635,983.14
expenses
Deferred income tax
111,367,362.66 111,367,362.66
assets
Other non-current assets 28,027,952.15 28,027,952.15
Total non-current assets 3,438,519,010.44 3,449,130,664.75 10,611,654.31
Total assets 7,478,439,747.77 7,489,051,402.08 10,611,654.31
Current liabilities:
Short-term borrowings 142,942,941.34 142,942,941.34
Borrowings from PBC
Placements from banks
and other financial
institutions
Tradable financial
liabilities
Derivative financial
liabilities
Notes payable 234,887,563.22 234,887,563.22
141
C&S Paper Co., Ltd. Semi-annual Report 2021
Accounts payable 761,519,389.26 761,519,389.26
Payments received in
advance
Contract liabilities 137,333,617.40 137,333,617.40
Proceeds from financial
assets sold under repo
Customer bank deposits
and due to banks and other
financial institutions
Funds from securities
trading agency
Funds from securities
underwriting agency
Employee remuneration
123,524,627.11 123,524,627.11
payable
Tax and fees payable 112,608,054.87 112,608,054.87
Other payables 754,844,580.09 754,844,580.09
Including: Interests
payable
Dividends
1,437,466.77 1,437,466.77
payable
Transaction fee and
commission receivable
Reinsurance payable
Liabilities held for sale
Non-current liabilities
3,472,854.73 3,472,854.73
due within one year
Other current liabilities 17,628,086.63 17,628,086.63
Total current liabilities 2,285,288,859.92 2,288,761,714.65 3,472,854.73
Non-current liabilities:
Insurance contract
reserves
Long-term borrowings
Bonds payable
Including: Preference
shares
Perpetual
bonds
Lease liabilities 7,138,799.58 7,138,799.58
Long-term payable
Long-term employee
remuneration payable
Provision
Deferred income 115,101,158.13 115,101,158.13
Deferred income tax
35,903,653.30 35,903,653.30
liabilities
142
C&S Paper Co., Ltd. Semi-annual Report 2021
Other non-current
liabilities
Total non-current liabilities 151,004,811.43 158,143,611.01 7,138,799.58
Total liabilities 2,436,293,671.35 2,446,905,325.66 10,611,654.31
Owner’s equity:
Share capital 1,311,487,077.00 1,311,487,077.00
Other equity instruments
Including: Preference
shares
Perpetual
bonds
Capital reserve 907,006,505.05 907,006,505.05
Less: Treasury shares 96,480,911.29 96,480,911.29
Other comprehensive
income
Special reserves
Surplus reserves 61,469,258.27 61,469,258.27
General reserves
Retained earnings 2,858,664,147.39 2,858,664,147.39
Total equity attributable to
owners of the parent 5,042,146,076.42 5,042,146,076.42
company
Equities of minority
shareholders
Total owner’s equity 5,042,146,076.42 5,042,146,076.42
Total liabilities and owners’
7,478,439,747.77 7,489,051,402.08 10,611,654.31
equities
Explanation of adjustment
The Company started to adopt the New Lease Standards from January 1, 2021.
Balance sheet of the Parent Company
Unit: RMB
Item December 31, 2020 January 01, 2021 Adjustment number
Current assets:
Monetary funds 170,229,178.13 170,229,178.13
Tradable financial assets
Derivative financial
assets
Notes receivable
Accounts receivable 92,647,372.33 92,647,372.33
Accounts receivable
financing
Prepayments 7,940,396.34 7,940,396.34
Other receivables 136,987,584.64 136,987,584.64
143
C&S Paper Co., Ltd. Semi-annual Report 2021
Including: Interest
receivable
Dividends
receivable
Inventory 156,605,546.36 156,605,546.36
Contract assets
Assets held for sale
Non-current assets due
within one year
Other current assets 52,517,725.87 52,517,725.87
Total current assets 616,927,803.67 616,927,803.67
Non-current assets:
Investments in creditor’s
rights
Investments in other
creditor’s rights
Long-term receivable
Long-term equity
1,928,113,219.50 1,928,113,219.50
investment
Investment in other
equity instruments
Other non-current
financial assets
Investment property 17,939,329.51 17,939,329.51
Fixed assets 257,354,688.59 257,354,688.59
Construction work in
progress
Productive biological
assets
Oil & gas assets
Right-of-use assets 2,649,675.09 2,649,675.09
Intangible assets 25,205,232.21 25,205,232.21
Development expenses
Goodwill
Long-term deferred
expenses
Deferred income tax
46,811,106.77 46,811,106.77
assets
Other non-current assets 2,619,959.27 2,619,959.27
Total non-current assets 2,278,043,535.85 2,280,693,210.94 2,649,675.09
Total assets 2,894,971,339.52 2,897,621,014.61 2,649,675.09
Current liabilities:
Short-term borrowings
Tradable financial
liabilities
Derivative financial
144
C&S Paper Co., Ltd. Semi-annual Report 2021
liabilities
Notes payable
Accounts payable 420,061,168.44 420,061,168.44
Payments received in
advance
Contract liabilities 17,388,431.01 17,388,431.01
Employee remuneration
44,678,713.21 44,678,713.21
payable
Tax and fees payable 5,995,417.05 5,995,417.05
Other payables 126,072,040.24 126,072,040.24
Including: Interests
payable
Dividends
1,437,466.77 1,437,466.77
payable
Liabilities held for sale
Non-current liabilities
967,707.49 967,707.49
due within one year
Other current liabilities 2,260,496.03 2,260,496.03
Total current liabilities 616,456,265.98 617,423,973.47 967,707.49
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preference
shares
Perpetual
bonds
Lease liabilities 1,681,967.60 1,681,967.60
Long-term payable
Long-term employee
remuneration payable
Provision
Deferred income 5,855,467.25 5,855,467.25
Deferred income tax
7,202,336.33 7,202,336.33
liabilities
Other non-current
liabilities
Total non-current liabilities 13,057,803.58 14,739,771.18 1,681,967.60
Total liabilities 629,514,069.56 632,163,744.65 2,649,675.09
Owner’s equity:
Share capital 1,311,487,077.00 1,311,487,077.00
Other equity instruments
Including: Preference
shares
Perpetual
bonds
145
C&S Paper Co., Ltd. Semi-annual Report 2021
Capital reserve 831,693,206.19 831,693,206.19
Less: Treasury shares 96,480,911.29 96,480,911.29
Other comprehensive
income
Special reserves
Surplus reserves 61,347,923.99 61,347,923.99
Retained earnings 157,409,974.07 157,409,974.07
Total owner’s equity 2,265,457,269.96 2,265,457,269.96
Total liabilities and owners’
2,894,971,339.52 2,897,621,014.61 2,649,675.09
equities
Explanation of adjustment
The Company started to adopt the New Lease Standards from January 1, 2021.
(4) Description on the retrospective adjustment of previous comparable data at the first time adoption of
the new leasing standards in 2021
□ Applicable √ Not applicable
45. Others: None
VI. Taxes
1. Main tax types and tax rates
Tax Tax basis Tax rate
Taxable VAT (calculated based on the
difference of deducting the amount of
input tax which is allowed to be deducted
Value-added tax 13%
in the current period from the result of
multiplying taxable sales by applicable tax
rate)
City construction and maintenance tax Turnover tax paid 5%. 7%
Corporate income tax Taxable income 15%, 16.5%, 20%, 25%, progressive rate
Education surcharges Turnover tax paid 3%
Local education surcharges Turnover tax paid 2%
Description of disclosure if different income tax rates apply to different corporate taxpayers
Name of taxpayer Income tax rate
C&S Paper Co., Ltd., Zhongshan Zhongshun Trading Co., Ltd.,
C&S (Hubei) Paper Co., Ltd., Xiaogan C&S Trading Co., Ltd.,
Zhejiang Zhongshun Paper Co., Ltd., Chengdu Zhongshun Paper
Co., Ltd., Hangzhou Jie Rou Trading Co., Ltd., Beijing C&S 25%
Paper Co., Ltd., Sun Daily Necessities Co., Ltd., Shanghai
Huicong Paper Co., Ltd., Yunfu Hengtai Trading Co., Ltd., C&S
(Dazhou) Paper Co., Ltd., Dolemi Sanitary Products Co., Ltd.,
146
C&S Paper Co., Ltd. Semi-annual Report 2021
C&S (Jiangsu) Paper Co., Ltd., Yunnan Dolemi Trading Co.,
Ltd., Luzhou Dolemi Sanitary Products Co., Ltd., and Mianyang
Dolemi Sanitary Products Co., Ltd.
C&S (Zhongshan) Paper Co., Ltd. 20%
Zhong Shun International Co., Ltd., and C&S Hong Kong Co.,
16.50%
Ltd. (Note 1)
Jiangmen Zhongshun Paper Co., Ltd., C&S (Sichuan) Paper Co.,
15%
Ltd., and C&S (Yunfu) Paper Co., Ltd.
C&S (Macao) Co., Ltd. (Note 2) Progressive rate
2. Tax incentive
Jiangmen Zhongshun Paper Co., Ltd. was certified as a high-tech enterprise of Guangdong Province in 2018, and
was awarded the Certificate of High-tech Enterprise (No. GR201844008474) on November 28, 2018, with a valid
term of three years. Therefore, the corporate income tax is calculated at a tax rate of 15% during the reporting
period.
C&S (Sichuan) Paper Co., Ltd. was certified as a high-tech enterprise of Sichuan Province in 2020, and was
awarded the Certificate of High-tech Enterprise (No. GR202051001193) on September 11, 2020, with a valid
term of three years. Therefore, the corporate income tax is calculated at a tax rate of 15% during the reporting
period.
C&S (Yunfu) Paper Co., Ltd. was certified as a high-tech enterprise of Guangdong Province in 2020, and was
awarded the Certificate of High-tech Enterprise (No. GR202044006774) on December 9, 2020, with a valid term
of three years. Therefore, the corporate income tax is calculated at a tax rate of 15% during the reporting period.
Pursuant to relevant provisions of the Announcement of the State Administration of Taxation and the Ministry of
Finance on the Implementation of Preferential Income Tax Policies for Small and Micro Enterprises and
Individual Industrial and Commercial Households (MOF and SAT Doc. No. 2021 [012]) and the Announcement
of the State Administration of Taxation on Issues Concerning the Implementation of Inclusive Income Tax
Reduction and Exemption Policies for Small and Low-profit Enterprises (SAT Doc. No. 2019 [002]), C&S
(Zhongshan) Paper Co., Ltd. is entitled to the inclusive income tax reduction and exemption policy for small and
low-profit enterprises in 2021. Specifically, if the annual taxable income does not exceed RMB1 million, the
taxable income is calculated at a reduced rate of 12.5% with a corporate income tax rate of 20%; if the annual
taxable income is over RMB1 million but less than RMB3 million, the taxable income is calculated at a reduced
rate of 50% while the corporate income tax rate is levied at 20%.
147
C&S Paper Co., Ltd. Semi-annual Report 2021
3. Others
Note 1: C&S Hong Kong Co., Ltd. is a Hong Kong-based company incorporated according to the laws of Hong
Kong, and adopts the tax laws thereof. The tax rate for its income tax is 16.50%;
Note 2: C&S (Macao) Co., Ltd. is a Macao-based company incorporated according to the laws of Macao. Its
complementary tax adopts a progressive rate (tax on taxable income that is less than MOP300,000 is exempted,
and the taxable income that is more than MOP300,000 is taxed at 12%).
VII. Notes to Items of the Consolidated Financial Statements
1. Monetary fund
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Cash on hand 56,626.99 36,349.55
Bank deposits 694,226,698.05 1,047,785,634.71
Other monetary funds 94,418,811.95 77,374,215.30
Total 788,702,136.99 1,125,196,199.56
Including: Total deposits in overseas
30,091,357.87 99,311,423.25
banks
Other description
Balance of other monetary funds at the end of the reporting period is the security deposit for issuing letters of
credit and bank acceptance bill and balance of Alipay. Refer to “Note VII (81)” for circumstances where
ownership of monetary funds is restricted.
2. Transactional financial assets: None
3. Derivative financial assets: None
4. Notes receivable
(1) Notes receivable presentation by category
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Bank acceptance bill 190,080.00 724,419.74
Trade acceptance bill 1,323,062.38 0.00
Total 1,513,142.38 724,419.74
148
C&S Paper Co., Ltd. Semi-annual Report 2021
Provision of bad debt reserve by portfolio: None
Provision of bad debt reserve by portfolio: None
Provision of bad debt reserve by portfolio
Description of reason for the portfolio:
If the bad debt reserve of notes receivable is set aside according to general model of expected credit loss, please
refer to the disclosure method of other receivables to disclose relevant information on bad debt reserve:
□ Applicable √ Not applicable
(2) Bad debt reserve that is set aside, recovered or transferred back in the reporting period: None
(3) Notes receivable that the Company has pledged at the end of the reporting period: None
(4) Notes receivable that the Company has endorsed or discounted at the end of the reporting period and
are not due on the balance sheet date: None
(5) Notes that are transferred to notes receivable because the drawer does not perform the contract at the
end of the reporting period: None
Other descriptions:
(1) The Company has no pledged notes receivable as at June 30, 2021.
(2) The Company has no derecognized notes receivable that are endorsed or discounted but not due as at June
30, 2021.
(3) The Company has no notes that are transferred to notes receivable because the drawer does not perform
the contract as at June 30, 2021.
(6) Notes receivable actually written off in the reporting period: None
5. Accounts receivable
(1) Accounts receivable disclosure by category
Unit: RMB
Balance at the end of the year Balance at the beginning of the year
Impairment Impairment
Book balance Book balance
Type provision Book provision
Book value
Percenta Provision value Percentag Provision
Amount Amount Amount Amount
ge ratio e ratio
149
C&S Paper Co., Ltd. Semi-annual Report 2021
Accounts receivable
for which bad debt 34,324,6 10,681,0 23,643,60 34,567,65 10,681,06 23,886,582.
3.54% 31.12% 3.17% 30.90%
reserve is set aside 76.68 68.59 8.09 1.21 8.59 62
individually
Including:
Accounts receivable
for which bad debt 935,319, 25,649,5 909,669,5 1,054,953 27,415,94 1,027,537,3
96.46% 2.74% 96.83% 2.60%
reserve is set aside in 040.34 10.45 29.89 ,298.93 1.96 56.97
portfolios
Including:
Portfolio based on 935,319, 25,649,5 909,669,5 1,054,953 27,415,94 1,027,537,3
96.46% 2.74% 96.83% 2.60%
aging 040.34 10.45 29.89 ,298.93 1.96 56.97
969,643, 36,330,5 933,313,1 1,089,520 38,097,01 1,051,423,9
Total 100.00% 3.75% 100.00% 3.50%
717.02 79.04 37.98 ,950.14 0.55 39.59
Bad debt reserve set aside individually: 10,681,068.59
Unit: RMB
Balance at the end of the period
Name
Book balance Impairment provision Ratio of provision Reason for provision
It is difficult to recover
all goods payments due
Institution 1 6,116,636.66 2,462,996.13 40.27% to the poor business
performance of the
customer.
It is difficult to recover
all goods payments due
Institution 2 28,208,040.02 8,218,072.46 29.13% to the poor business
performance of the
customer.
Total 34,324,676.68 10,681,068.59 -- --
Bad debt reserve set aside in portfolios: 25,649,510.45
Unit: RMB
Balance at the end of the period
Name
Book balance Impairment provision Ratio of provision
Within the credit period 760,706,754.96 15,214,135.10 2.00%
Credit period - 1 year 168,688,133.48 8,434,406.67 5.00%
Subtotal of those within 1 year 929,394,888.44 23,648,541.77 2.54%
1 to 2 years 563,198.16 84,479.72 15.00%
2 to 3 years 4,732,949.69 1,419,884.91 30.00%
Over 3 years 628,004.05 496,604.05 79.08%
Total 935,319,040.34 25,649,510.45 --
Description of reason for the portfolio: Accounts receivable with the same aging have similar credit risk
characteristics.
Provision of bad debt reserve by portfolio: None
Description of reason for the portfolio:
If the bad debt reserve of accounts receivable is set aside according to general model of expected credit loss,
150
C&S Paper Co., Ltd. Semi-annual Report 2021
please refer to the disclosure method of other receivables to disclose relevant information on bad debt reserve:
□ Applicable √ Not applicable
Disclose by aging
Unit: RMB
Aging Balance at the end of the period
Within 1 year (inclusive) 929,394,888.44
1 to 2 years 563,198.16
2 to 3 years 4,732,949.69
Over 3 years 34,952,680.73
3 to 4 years 14,481,101.38
4 to 5 years 13,989,738.64
Over 5 years 6,481,840.71
Total 969,643,717.02
(2) Bad debt reserve that is set aside, recovered or transferred back in the reporting period
Provision of bad debt reserve of the reporting period:
Unit: RMB
Balance at the Amount of change in the reporting period
Balance at the
Type beginning of the Recovery or
Provision Write-off Others end of the period
period reversal
Accounts
38,097,010.55 -1,766,431.51 36,330,579.04
receivable
Total 38,097,010.55 -1,766,431.51 36,330,579.04
Wherein, the amount of recovered or transferred back bad debt reserve in the reporting period is important: None
(3) Accounts receivable actually written off in the reporting period: None
(4) Top five debtors in closing balance of accounts receivable
Unit: RMB
Percentage in total balance of
Balance of accounts receivable at Balance for bad debt reserve at
Name of institution accounts receivable at the end of
the end of the period the end of the period
the period
1st 240,902,755.98 24.84% 4,819,486.05
2nd 101,975,148.19 10.52% 3,063,592.00
3rd 54,259,924.13 5.60% 1,325,376.26
4th 31,518,078.02 3.25% 972,258.60
5th 28,969,449.44 2.99% 1,184,244.29
Total 457,625,355.76 47.20%
151
C&S Paper Co., Ltd. Semi-annual Report 2021
(5) Accounts receivable derecognized due to transfer of financial assets
The Company has no accounts receivable derecognized due to the transfer of financial assets as at the end of the
reporting period
(6) Amounts of assets and liabilities that are formed by the transfer and ongoing involvement of accounts
receivable
The Company has no amounts of assets and liabilities that are formed by the transfer and ongoing involvement of
accounts receivable as at the end of the reporting period.
Other description: None
6. Accounts receivable financing
Increase and decrease of accounts receivable financing and changes in fair value in the reporting period
□ Applicable √ Not applicable
If the provisions for asset impairment of accounts receivable financing are set aside according to general model of
expected credit loss, please refer to the disclosure method of other receivables to disclose relevant information on
provisions for asset impairment:
□ Applicable √ Not applicable
Other description: None
7. Prepayments
(1) Prepayments presentation by aging
Unit: RMB
Balance at the end of the period Balance at the beginning of the period
Aging
Amount Percentage Amount Percentage
Within 1 year 12,804,377.00 99.76% 26,819,108.57 100.00%
1 to 2 years 30,210.00 0.24%
Total 12,834,587.00 -- 26,819,108.57 --
Explanation on the reason of untimely settlement of prepayments whose age exceeds one year with significant
amount: None
(2) Top five payees in closing balance of prepayment
The Company’s total prepayment amount of the top five payees in closing balance of prepayment is
152
C&S Paper Co., Ltd. Semi-annual Report 2021
RMB8,196,395.68, accounting for 63.86% of closing balance of prepayment.
Other description: None
8. Other receivables
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Other receivables 21,117,810.56 15,824,945.56
Total 21,117,810.56 15,824,945.56
(1) Interest receivable
1) Classification of interest receivable: None
2) Significant overdue interest: None
3) Provision of bad debt reserve
□ Applicable √ Not applicable
(2) Dividends receivable
1) Classification of dividends receivable: None
2) Significant dividends receivable exceeding one year: None
3) Provision of bad debt reserve
□ Applicable √ Not applicable
Other description: None
(3) Other receivables
1) Classification of other receivables by nature
Unit: RMB
Book balance at the beginning of the
Nature Book balance at the end of the period
period
Margins and deposits 4,398,979.17 4,621,457.93
Current accounts 5,255,892.23 5,350,546.55
Reserve 1,778,041.01 1,704,120.13
Others 12,000,234.22 5,999,332.44
153
C&S Paper Co., Ltd. Semi-annual Report 2021
Total 23,433,146.63 17,675,457.05
2) Provision of bad debt reserve
Unit: RMB
Phase I Phase II Phase III
Bad debt provision Expected credit losses in Expected credit losses in Total
Expected credit loss
the whole duration (without the whole duration (with
in the next 12 months
credit impairment) credit impairment)
Balance as at January 1,
1,850,511.49 1,850,511.49
2021
Balance as at January 1,
2021 in the reporting —— —— —— ——
period
Provision in the reporting
464,824.58 464,824.58
period
Balance as at June 30,
2,315,336.07 2,315,336.07
2021
Description of changes in the book balance where there are significant changes in provision for the current period
□ Applicable √ Not applicable
Disclose by aging
Unit: RMB
Aging Balance at the end of the period
Within 1 year (inclusive) 19,339,617.17
1 to 2 years 852,567.91
2 to 3 years 2,110,636.86
Over 3 years 1,130,324.69
3 to 4 years 1,058,637.44
4 to 5 years 27,454.05
Over 5 years 44,233.20
Total 23,433,146.63
3) Bad debt reserve that is set aside, recovered or transferred back in the reporting period
Provision of bad debt reserve of the reporting period:
Unit: RMB
Balance at the Amount of change in the reporting period
Balance at the
Type beginning of the Recovery or
Provision Write-off Others end of the period
period reversal
Other receivables 1,850,511.49 464,824.58 2,315,336.07
Total 1,850,511.49 464,824.58 2,315,336.07
154
C&S Paper Co., Ltd. Semi-annual Report 2021
Where the amount of recovered or reversed bad debt reserve in the reporting period is important: None
4) Other receivables actually written off in the reporting period: None
5) Top five debtors in closing balance of other accounts receivable
Unit: RMB
Percentage in total
Balance of bad debt
Balance at the end of balance of other
Name of institution Nature of the amount Aging reserve at the end of
the period receivables at the
the period
end of the period
1st Others 9,460,860.30 Within 1 year 40.37% 473,043.02
2nd Margins and deposits 1,100,000.00 2-3 years 4.69% 330,000.00
3rd Margins and deposits 600,000.00 2-3 years 2.56% 180,000.00
4th Margins and deposits 600,000.00 3-4 years 2.56% 300,000.00
Within 1 year, 1-2
5th Margins and deposits 560,000.00 years, 2- 3 years, 3-4 2.39% 162,500.00
years
Total -- 12,320,860.30 -- 52.57% 1,445,543.02
6) Receivables involving government grants: None
7) Other receivables derecognized due to the transfer of financial assets: None
8) Amount of assets and liabilities that are formed by the transfer and ongoing involvement of other
receivables: None
9. Inventory
Whether the Company needs to comply with requirements for disclosure in the real estate industry: No
(1) Classification of inventories
Unit: RMB
Balance at the end of the period Balance at the beginning of the period
Provision for Provision for
impairment of impairment of
Item inventories or inventories or
Book balance Book value Book balance Book value
provision for provision for
contract contract
performance cost performance cost
Raw materials 1,070,227,399.23 185,609.86 1,070,041,789.37 1,148,312,808.05 133,039.11 1,148,179,768.94
Work-in-process
49,416,644.06 422,448.32 48,994,195.74 40,777,441.76 306,847.08 40,470,594.68
products
Commodity 435,922,026.80 2,524,005.70 433,398,021.10 410,313,722.29 2,738,280.52 407,575,441.77
155
C&S Paper Co., Ltd. Semi-annual Report 2021
stocks
Packages 33,282,071.36 284,363.42 32,997,707.94 32,644,525.84 145,489.07 32,499,036.77
Low-value
23,001,401.72 617,506.21 22,383,895.51 13,889,922.62 529,767.94 13,360,154.68
consumables
Materials for
consigned 16,493,835.16 0.00 16,493,835.16 19,189,498.48 19,189,498.48
processing
Total 1,628,343,378.33 4,033,933.51 1,624,309,444.82 1,665,127,919.04 3,853,423.72 1,661,274,495.32
(2) Provision for impairment of inventories or provision for contract performance cost
Unit: RMB
Balance at the Increase in the current period Decrease in the current period
Balance at the
Item beginning of the Reversal or
Provision Others Others end of the period
period written off
Raw materials 133,039.11 208,273.26 155,702.51 185,609.86
Work-in-process
306,847.08 288,779.68 173,178.44 422,448.32
products
Commodity
2,738,280.52 997,462.20 1,211,737.02 2,524,005.70
stocks
Packages 145,489.07 210,502.25 71,627.90 284,363.42
Low-value
529,767.94 313,992.36 226,254.09 617,506.21
consumables
Total 3,853,423.72 2,019,009.75 1,838,499.96 4,033,933.51
(3) Explanation that balance of inventory at the end of the reporting period includes amount of
capitalization of borrowing costs: None
(4) Explanation on amortized amount of contract performance cost in the reporting period: None
10. Contract assets
If the bad debt reserve of contrast assets is set aside according to general model of expected credit loss, please
refer to the disclosure method of other receivables to disclose relevant information on bad debt reserve:
□ Applicable √ Not applicable
Provision for impairment of contract assets in the reporting period: None
11. Assets held for sale
Unit: RMB
Book balance at
Impairment Book value at the Estimated Estimated
Item the end of the Fair value
provision end of the period disposal fee disposal time
period
Immovable assets December 31,
57,073,059.69 57,073,059.69 66,285,118.00
of the old factory 2021
156
C&S Paper Co., Ltd. Semi-annual Report 2021
of Hubei C&S
(including land
use rights)
Total 57,073,059.69 57,073,059.69 66,285,118.00 --
Other description:
In December 2019, in order to boost the investment and construction of Phase II of the high-end household paper
project in the industrial zone in the Economic Development Area of Xiaonan District, Xiaogan City, the Company
signed an agreement on the acquisition of the immovable assets in the old factory of Hubei C&S (including land
use rights) upon consultation with Xiaonan District People’s Government of Xiaogan City. The Company believed
that the immovable assets of the old factory of Hubei C&S (including land use rights) could be sold immediately
in the current situation, according to similar transactions where such assets were sold. The Company signed a
binding purchase agreement with Xiaogan Changxing Investment Co., Ltd. and Xiaonan District People’s
Government of Xiaogan City regarding the transfer of such assets in December 2019. The Agreement contained
important terms and conditions including the price and time of the transaction as well as penalty for breach of
contract that was strict enough. Therefore, there is little possibility for the agreement to be significantly changed
or canceled. The Company originally estimated that the ultimate transfer would be completed before December
2020. However, under the impact of the Covid-19 pandemic in 2020, the government shifted its focus to anti-
pandemic work with people’s interests above everything else. Especially, Xiaogan City of Hubei Province was one
of the hardest-hit areas, so the government has put all efforts in the fight against the virus and post-pandemic
economic rejuvenation. As a result, it was unable to pay all asset transfer amount within the agreed period. The
Company has received most of the asset transfer payment as of the reporting date (RMB58.14 million).
12. Non-current assets due within one year: None
13. Other current assets
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Wealth management products 50,000,000.00
Input VAT to be deducted 33,611,344.77 51,550,834.13
Prepaid corporate income tax 1,054,891.79 33,735.17
Total 34,666,236.56 101,584,569.30
Other description: None
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C&S Paper Co., Ltd. Semi-annual Report 2021
14. Investments in creditor’s rights
Description of changes in the book balance where there are significant changes in provision for the current period
□ Applicable √ Not applicable
Other description: None
15. Other investments in creditor’s rights
Description of changes in the book balance where there are significant changes in provision for the current period
□ Applicable √ Not applicable
Other description: None
16. Long-term receivables
(1) Long-term receivables
Description of changes in the book balance where there are significant changes in provision for the current period
□ Applicable √ Not applicable
(2) Long-term receivables derecognized due to the transfer of financial assets: None
(3) Amounts of assets and liabilities that are formed by the transfer and ongoing involvement of long-term
receivables: None
17. Long-term equity investment: None
18. Investment in other equity instruments: None
19. Other non-current financial assets: None
20. Investment property
(1) Investment property measured at cost
√ Applicable □ Not applicable
Unit: RMB
Construction work in
Item Properties and buildings Land use rights Total
progress
I. Original Book Value
158
C&S Paper Co., Ltd. Semi-annual Report 2021
1. Balance at the
31,072,632.92 21,661,131.29 52,733,764.21
beginning of the period
2. Increase in the current
period
(1) External purchase
(2) Inventory\fixed
assets\transfer from
construction work in
progress
(3) Increase in business
combination
3. Decrease in the current
period
(1) Disposal
(2) Other transfers out
4. Balance at the end of
31,072,632.92 21,661,131.29 52,733,764.21
the period
II. Accumulated
Depreciation and
Amortization
1. Balance at the
12,995,477.31 5,162,920.96 18,158,398.27
beginning of the period
2. Increase in the current
486,421.32 232,020.78 718,442.10
period
(1) Provision or
486,421.32 232,020.78 718,442.10
amortization
3. Decrease in the current
period
(1) Disposal
(2) Other transfers out
4. Balance at the end of
13,481,898.63 5,394,941.74 18,876,840.37
the period
III. Impairment Provision
1. Balance at the
beginning of the period
2. Increase in the current
period
(1) Provision
3. Decrease in the current
period
(1) Disposal
(2) Other transfers out
4. Balance at the end of
the period
IV. Book Value
1. Book value at the end
17,590,734.29 16,266,189.55 33,856,923.84
of the period
2. Book value at the 18,077,155.61 16,498,210.33 34,575,365.94
159
C&S Paper Co., Ltd. Semi-annual Report 2021
beginning of the period
(2) Investment property measured at fair value
□ Applicable √ Not applicable
(3) Investment property that the certificate of title has not been issued
The Company does not have investment property that the certificate of title has not been issued as at June 30,
2021.
21. Fixed assets
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Fixed assets 3,182,792,165.52 2,792,587,302.21
Total 3,182,792,165.52 2,792,587,302.21
(1) Information on fixed assets
Unit: RMB
Properties and Production
Item Equipment Office equipment Motor vehicles Total
buildings equipment
I. Original Book
Value
1. Balance at
the beginning of 1,120,022,374.29 3,014,753,086.43 54,682,544.73 17,187,070.95 79,292,109.05 4,285,937,185.45
the period
2. Increase in
212,097,885.51 330,616,989.41 3,206,098.62 2,207,607.08 14,719,985.94 562,848,566.56
the current period
(1) Purchase 207,340.70 2,356,163.74 2,207,607.08 5,605,888.51 10,377,000.03
(2)
Inventory\fixed
assets\transfer 212,097,885.51 330,409,648.71 849,934.88 9,114,097.43 552,471,566.53
from construction
work in progress
(3) Increase
in business
combination
3. Decrease in
6,500.00 24,662,638.49 151,431.82 498,872.65 25,319,442.96
the current period
(1) Disposal 6,500.00 24,662,638.49 151,431.82 498,872.65 25,319,442.96
160
C&S Paper Co., Ltd. Semi-annual Report 2021
or scrap
4. Balance at
the end of the 1,332,113,759.80 3,320,707,437.35 57,737,211.53 19,394,678.03 93,513,222.34 4,823,466,309.05
period
II. Accumulated
Depreciation
1. Balance at
the beginning of 230,627,030.94 1,170,141,702.77 26,023,963.29 8,459,387.08 41,628,743.42 1,476,880,827.50
the period
2. Increase in
23,017,434.76 128,699,060.47 4,229,425.08 833,983.50 5,604,732.32 162,384,636.13
the current period
(1) Provision 23,017,434.76 128,699,060.47 4,229,425.08 833,983.50 5,604,732.32 162,384,636.13
3. Decrease in
5,850.00 11,822,474.99 132,384.81 310,523.79 12,271,233.59
the current period
(1) Disposal
5,850.00 11,822,474.99 132,384.81 310,523.79 12,271,233.59
or scrap
4. Balance at
the end of the 253,638,615.70 1,287,018,288.25 30,121,003.56 9,293,370.58 46,922,951.95 1,626,994,230.04
period
III. Impairment
Provision
1. Balance at
the beginning of 16,415,970.27 1,219.51 51,865.96 16,469,055.74
the period
2. Increase in
2,285,297.81 2,285,297.81
the current period
(1) Provision 2,285,297.81 2,285,297.81
3. Decrease in
5,021,354.59 1,219.51 51,865.96 5,074,440.06
the current period
(1) Disposal
5,021,354.59 1,219.51 51,865.96 5,074,440.06
or scrap
4. Balance at
the end of the 13,679,913.49 13,679,913.49
period
IV. Book Value
1. Book value
at the end of the 1,078,475,144.10 2,020,009,235.61 27,616,207.97 10,101,307.45 46,590,270.39 3,182,792,165.52
period
2. Book value
at the beginning 889,395,343.35 1,828,195,413.39 28,657,361.93 8,727,683.87 37,611,499.67 2,792,587,302.21
of the period
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(2) Information on temporarily idle fixed assets
Unit: RMB
Accumulated Impairment
Item Original book value Book value Remarks
depreciation provision
Equipment 25,446,420.81 10,971,916.85 13,679,913.49 794,590.47
Total 25,446,420.81 10,971,916.85 13,679,913.49 794,590.47
(3) Fixed assets leased through operating
Unit: RMB
Item Book value at the end of the period
Machinery and equipment leased out through operating lease 574,633.12
Total 574,633.12
(4) Fixed assets that the certificate of title has not been issued
Unit: RMB
Reasons for the certificate of title having
Item Book value
not been issued
Workshops of Zhejiang C&S 3,680,024.54 Processing
Plants and warehouses of Tangshan Branch 46,484,957.02 Processing
Workshops, warehouses, dormitories and
155,491,394.59 Processing
boilers of Hubei C&S Phase II project
Warehouse of Yunfu C&S 21,164,864.85 Processing
Total 226,821,241.00
Other description: There was no limitation on the ownership of fixed assets of the Company at the end of the
reporting period.
(5) Disposal of fixed assets: None
22. Construction work in process
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Construction work in process 55,534,528.69 275,904,617.95
Total 55,534,528.69 275,904,617.95
162
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(1) Construction work in progress
Unit: RMB
Balance at the end of the period Balance at the beginning of the period
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Construction
work of C&S 443,396.21 443,396.21
Paper
Construction
work of Jiangmen 5,431,119.88 5,431,119.88 1,028,646.43 1,028,646.43
C&S
Construction
work of Zhejiang 5,309,309.84 5,309,309.84 249,608.17 249,608.17
C&S
Construction
work of Sichuan 5,760,144.05 5,760,144.05
C&S
Construction
work of Tangshan 100,858.68 100,858.68
Branch
Construction
work of Hubei 38,447,658.15 38,447,658.15 244,523,934.15 244,523,934.15
C&S
Construction
work of Yunfu 5,271,603.86 5,271,603.86 24,342,285.15 24,342,285.15
C&S
Construction
work of Jiangsu 530,582.07 530,582.07
C&S
Total 55,534,528.69 55,534,528.69 275,904,617.95 275,904,617.95
(2) Changes of significant construction work in progress in the current period
Unit: RMB
Includin
Amount Proporti Accumul g:
Interest
Balance of fixed on of the ative Amount
Increase Decrease Balance capitaliz
at the assets cumulati Construc amount of
Budget in the in the at the ation rate Source
Item beginnin transferr ve tion of interest
number current current end of in the of fund
g of the ed in the construct progress interest capitaliz
period period the year current
year current ion input capitaliz ation in
period
period in budget ation the
period
Construc
tion
470,000. 443,396. 443,396.
work of 95.00% 95.00% Others
00 21 21
C&S
Paper
Construc
22,376,5 1,028,64 20,641,8 16,239,3 5,431,11 96.84% 96.84% Others
tion
163
C&S Paper Co., Ltd. Semi-annual Report 2021
work of 05.11 6.43 13.10 39.65 9.88
Jiangme
n C&S
Construc
tion
10,980,5 249,608. 10,040,7 4,981,02 5,309,30
work of 93.71% 93.71% Others
43.94 17 25.49 3.82 9.84
Zhejiang
C&S
Construc
tion
13,386,5 5,760,14 6,086,37 11,846,5
work of 100.00% 100.00% Others
63.41 4.05 2.24 16.29
Sichuan
C&S
Construc
tion
306,200, 3,122,52 3,021,66 100,858.
work of 19.80% 19.80% Others
000.00 0.35 1.67 68
Tangsha
n Branch
Construc
tion
1,353,00 244,523, 273,668, 479,744, 38,447,6
work of 94.24% 94.24% Others
0,000.00 934.15 529.01 805.01 58.15
Hubei
C&S
Construc
tion
60,035,1 24,342,2 17,567,5 36,638,2 5,271,60
work of 85.59% 85.59% Others
57.05 85.15 38.80 20.09 3.86
Yunfu
C&S
Construc
tion
695,600, 530,582. 530,582.
work of 0.08% 0.08% Others
000.00 07 07
Jiangsu
C&S
2,462,04 275,904, 332,101, 552,471, 55,534,5
Total -- -- --
8,769.51 617.95 477.27 566.53 28.69
(3) Construction-in-progress provision set aside in the current period
There was no situation where the recoverable amount of the construction work in progress is lower than the book
value which required provisions in the Company in the reporting period.
(4) Construction materials: None
23. Productive biological assets
(1) Productive biological assets measured at cost
□ Applicable √ Not applicable
164
C&S Paper Co., Ltd. Semi-annual Report 2021
(2) Productive biological assets measured at fair value
□ Applicable √ Not applicable
24. Oil & gas assets
□ Applicable √ Not applicable
25. Right-of-use assets
Unit: RMB
Item Housing Total
I. Original Book Value -
1. Balance at the beginning of the period 10,611,654.31 10,611,654.31
2. Increase in the current period 2,720,964.20 2,720,964.20
3. Decrease in the current period -
4. Balance at the end of the period 13,332,618.51 13,332,618.51
II. Accumulated Depreciation -
1. Balance at the beginning of the period -
2. Increase in the current period 2,181,245.94 2,181,245.94
(1) Provision 2,181,245.94 2,181,245.94
3. Decrease in the current period -
(1) Disposal -
4. Balance at the end of the period 2,181,245.94 2,181,245.94
IV. Book Value -
1. Book value at the end of the period 11,151,372.57 11,151,372.57
2. Book value at the beginning of the
10,611,654.31 10,611,654.31
period
Other description: None
26. Intangible assets
(1) Intangible assets
Unit: RMB
Non-patented Application
Item Land use right Patent right Trademark right Total
technology software
I. Original Book
Value
1. Balance at
the beginning of 189,064,322.15 1,342,721.84 18,819,434.67 168,370.83 209,394,849.49
the period
2. Increase
208,301.89 2,961,517.07 3,169,818.96
in the current
165
C&S Paper Co., Ltd. Semi-annual Report 2021
period
(1)
208,301.89 2,961,517.07 3,169,818.96
Purchase
(2)
Internal R&D
(3)
Increase in
business
combination
3. Decrease in
the current period
(1)
Disposal
4. Balance at
the end of the 189,064,322.15 1,551,023.73 21,780,951.74 168,370.83 212,564,668.45
period
II. Accumulated
Amortization
1. Balance at
the beginning of 29,450,960.14 885,237.05 9,534,509.23 168,370.83 40,039,077.25
the period
2. Increase
in the current 1,898,651.76 52,125.56 1,375,371.84 3,326,149.16
period
(1)
1,898,651.76 52,125.56 1,375,371.84 3,326,149.16
Provision
3. Decrease
in the current
period
(1)
Disposal
4. Balance at
the end of the 31,349,611.90 937,362.61 10,909,881.07 168,370.83 43,365,226.41
period
III. Impairment
Provision
1. Balance at
the beginning of
the period
2. Increase
in the current
period
(1)
Provision
166
C&S Paper Co., Ltd. Semi-annual Report 2021
3. Decrease
in the current
period
(1) Disposal
4. Balance at
the end of the
period
IV. Book Value
1. Book
value at the end 157,714,710.25 613,661.12 10,871,070.67 169,199,442.04
of the period
2. Book
value at the
159,613,362.01 457,484.79 9,284,925.44 169,355,772.24
beginning of the
period
The intangible assets generated other than internal R&D of the Company at the end of the period occupy 0.00% of
the balance of intangible assets.
(2) Information on the land use rights that the certificate of title has not been issued: None
27. Development expenses: None
28. Goodwill
(1) Original book value of goodwill
Unit: RMB
Increase in the current period Decrease in the current period
Name of investee Balance at the
Formed by Balance at the
or the matters beginning of the
business Disposal end of the period
forming goodwill period
combination
Merger of
Zhongshan Paper
involving
64,654.15 64,654.15
enterprises not
under common
control
Total 64,654.15 64,654.15
(2) Provision for impairment of goodwill
Relevant information on the asset group or asset group portfolio in which the goodwill is located
Explain the method to confirm the process of goodwill impairment test, key parameters (e.g. the growth rate in the
predictive period when predicting the present value of future cash flow, the growth rate in the stable period, profit
167
C&S Paper Co., Ltd. Semi-annual Report 2021
rate, discount rate, and predictive period), and the goodwill impairment loss:
After conducting the asset impairment test by combining the goodwill with corresponding asset groups, there was
no impairment as at June 30, 2021, and provisions at the end of the reporting period were not set aside.
Influence of the goodwill impairment test
Other description: None
29. Long-term unamortized expenses
Unit: RMB
Balance at the
Increase in the Amortized amount Balance at the end of
Item beginning of the Other decreases
current period of the current period the period
period
Use rights of sewage
2,308,598.93 692,579.70 1,616,019.23
discharge
Decoration fees of
22,365,634.21 996,330.31 4,847,261.22 18,514,703.30
office buildings
Electricity use rights 1,961,750.00 855,750.00 252,700.00 2,564,800.00
Total 26,635,983.14 1,852,080.31 5,792,540.92 22,695,522.53
Other description: None
30. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets that were not offset
Unit: RMB
Balance at the end of the period Balance at the beginning of the period
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
differences assets differences assets
Provision for asset
37,974,366.81 8,317,385.82 37,236,661.77 8,048,641.53
impairment
Unrealized profit in
57,005,616.36 11,349,710.74 59,038,241.84 11,427,908.55
internal transaction
Deductible loss 189,732,725.24 47,433,181.31 157,221,067.56 39,305,266.89
Accrued expenses 60,267,582.48 15,066,895.62 60,267,582.48 15,066,895.62
Provision for impairment
13,679,913.49 2,339,937.78 16,469,055.74 2,795,038.08
of fixed assets
Provision for impairment
4,033,933.51 723,165.58 3,853,423.72 702,165.91
of inventories
Equity incentive cost 212,634,286.41 51,669,774.75 136,647,479.87 33,312,991.30
Deferred income 33,105,520.64 8,276,380.16 2,833,819.12 708,454.78
Total 608,433,944.94 145,176,431.76 473,567,332.10 111,367,362.66
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C&S Paper Co., Ltd. Semi-annual Report 2021
(2) Deferred income tax liabilities that were not offset
Unit: RMB
Balance at the end of the period Balance at the beginning of the period
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
differences liabilities differences liabilities
Pre-tax deduction of
fixed assets at one time
242,603,626.84 47,103,893.91 190,069,258.27 35,903,653.30
as stipulated in the tax
law
Total 242,603,626.84 47,103,893.91 190,069,258.27 35,903,653.30
(3) Presentation of deferred income tax assets or liabilities by the net amount after offset
Unit: RMB
Offset amount of the Balance of the deferred Offset amount of the Balance of the deferred
deferred income tax income tax assets or deferred income tax income tax assets or
Item assets and liabilities at liabilities after offset at assets and liabilities at liabilities after offset at
the end of the reporting the end of the reporting the beginning of the the beginning of the
period period reporting period reporting period
Deferred income tax
145,176,431.76 111,367,362.66
assets
Deferred income tax
47,103,893.91 35,903,653.30
liabilities
(4) Breakdown of unconfirmed deferred income tax assets
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Deductible temporary differences 671,548.30 2,710,860.27
Total 671,548.30 2,710,860.27
(5) Deductible losses of the unconfirmed deferred income tax assets due in the next year: None
31. Other non-current assets
Unit: RMB
Balance at the end of the period Balance at the beginning of the period
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Prepayment for software 1,192,660.18 1,192,660.18 2,027,042.24 2,027,042.24
43,741,845.6 43,741,845.6 26,000,909.9 26,000,909.9
Prepayment for engineering equipment
6 6 1 1
44,934,505.8 44,934,505.8 28,027,952.1 28,027,952.1
Total
4 4 5 5
Other description: None
169
C&S Paper Co., Ltd. Semi-annual Report 2021
32. Short-term borrowings
(1) Classification of short-term borrowings
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Guaranteed borrowings 142,942,941.34
Total 142,942,941.34
Description of classification of short-term borrowings: None
(2) Short-term borrowings overdue but unpaid
Other description: There were no short-term borrowings overdue but unpaid in the Company at the end of the
reporting period.
33. Tradable financial liabilities: None
34. Derivative financial liabilities: None
35. Notes payable
Unit: RMB
Category Balance at the end of the period Balance at the beginning of the period
Banker’s acceptance 289,707,176.43 234,887,563.22
Total 289,707,176.43 234,887,563.22
The total amount of the notes payable due but unpaid at the end of the reporting period is RMB0.00.
36. Accounts payable
(1) List of accounts payable
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Accounts payable 723,033,087.39 761,519,389.26
Total 723,033,087.39 761,519,389.26
(2) Significant accounts payable with aging over one year
Other description: The Company has no significant accounts payable with aging over one year at the end of the
reporting period.
170
C&S Paper Co., Ltd. Semi-annual Report 2021
37. Payments received in advance
(1) List of payments received in advance: None
(2) Significant payments received in advance with aging over one year
The Company has no significant payments received in advance with aging over one year at the end of the
reporting period.
38. Contract liabilities
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Advances on sales 103,501,369.49 137,333,617.40
Total 103,501,369.49 137,333,617.40
Amount with significant changes in book value during the reporting period and reason: None
39. Employee remuneration payable
(1) List of employee remuneration payable
Unit: RMB
Balance at the beginning Increase in the current Decrease in the current Balance at the end of the
Item
of the period period period period
I. Short-term
123,506,119.43 397,444,239.77 409,820,099.96 111,130,259.24
Compensation
II. Post-employment
Benefits - Defined 18,507.68 25,494,529.67 25,142,907.14 370,130.21
Contribution Plan
III. Dismissal Benefits 156,259.98 156,259.98
Total 123,524,627.11 423,095,029.42 435,119,267.08 111,500,389.45
(2) List of short-term remuneration
Unit: RMB
Balance at the beginning Increase in the current Decrease in the current Balance at the end of the
Item
of the period period period period
1. Salary, bonus and
122,595,782.24 361,113,483.15 375,743,596.02 107,965,669.37
subsidy
2. Employee welfare 13,078,772.04 11,949,297.53 1,129,474.51
3. Social insurance
252,766.51 12,926,746.92 12,344,203.08 835,310.35
premiums
Including: Medical 250,105.53 10,975,075.83 10,409,117.65 816,063.71
171
C&S Paper Co., Ltd. Semi-annual Report 2021
insurance
Employment
167.06 1,142,952.97 1,125,343.83 17,776.20
injury insurance
Maternity
2,493.92 808,718.12 809,741.60 1,470.44
insurance
4. Housing provident
374,311.00 8,527,072.24 8,542,073.24 359,310.00
fund
5. Labor union fee and
283,259.68 1,798,165.42 1,240,930.09 840,495.01
staff education fee
Total 123,506,119.43 397,444,239.77 409,820,099.96 111,130,259.24
(3) List of defined contribution plans
Unit: RMB
Balance at the beginning Increase in the current Decrease in the current Balance at the end of the
Item
of the period period period period
1. Basic endowment
17,927.54 24,671,585.74 24,331,167.43 358,345.85
insurance
2. Unemployment
580.14 822,943.93 811,739.71 11,784.36
insurance
Total 18,507.68 25,494,529.67 25,142,907.14 370,130.21
Other description: There was no delinquency of employee remuneration payable in the Company at the end of the
reporting period.
40. Tax and fees payable
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Value-added tax 29,179,356.47 25,574,167.63
Corporate income tax 36,669,532.30 79,266,423.94
Individual income tax 2,196,145.64 1,840,329.83
City construction and maintenance tax 1,837,733.39 1,593,768.94
Property tax 3,958,770.37 1,087,129.90
Education surcharges 877,842.66 829,794.94
Local education surcharges 585,228.48 524,068.91
Land use tax 821,151.63 796,430.89
Stamp tax 692,502.21 596,629.80
Security fund for the disabled 680,567.93 334,989.76
Environmental protection tax 132,841.63 97,465.13
Resource tax 66,031.66 66,855.20
Total 77,697,704.37 112,608,054.87
172
C&S Paper Co., Ltd. Semi-annual Report 2021
Other description: None
41. Other payables
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Dividend payable 1,594,446.41 1,437,466.77
Other payables 794,796,554.04 753,407,113.32
Total 796,391,000.45 754,844,580.09
(1) Interest payable: None
(2) Dividends payable
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Dividends for restricted shares 1,594,446.41 1,437,466.77
Total 1,594,446.41 1,437,466.77
Other descriptions, including important dividends payable exceeding one year, and the reasons for non-payment
that should be disclosed: None
(3) Other payables
1) Other payables based on amount nature
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Margins and deposits 22,073,998.74 20,964,424.40
Unpaid fees 731,510,591.33 658,391,225.24
Others 2,144,169.58 2,373,791.75
Repurchase obligation of restricted shares 39,067,794.39 68,800,189.53
Authorized collection and payment of
individual income tax under the equity 2,877,482.40
incentive
Total 794,796,554.04 753,407,113.32
2) Other important payables with aging exceeding one year
Unit: RMB
Item Balance at the end of the period Reason for unsettlement or not carry-over
1st 6,323,465.21 Not yet settled
173
C&S Paper Co., Ltd. Semi-annual Report 2021
Total 6,323,465.21 --
Other description: None
42. Liabilities held for sale: None
43. Non-current liabilities due within one year
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Lease liabilities due within one year 6,038,594.62 3,472,854.73
Total 6,038,594.62 3,472,854.73
Other description: None
44. Other current liabilities
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Tax pending changeover 13,400,882.00 17,628,086.63
Total 13,400,882.00 17,628,086.63
Changes in short-term bonds payable: None
45. Long-term borrowings
(1) List of long-term borrowings
Description of classification of long-term borrowings: None
Other descriptions, including the interval of interest rate: None
46. Bonds payable
(1) Bonds payable: None
(2) Changes in the increase and decrease of the bonds payable (excluding other financial instruments such
as preference shares and perpetual bonds that are divided into financial liabilities): None
(3) Descriptions of the conditions for converting conditions and time of converting bonds: None
(4) Descriptions of other financial instruments that are divided into financial liabilities: None
Basic information on other financial instruments in issue at the end of the reporting period, such as the preference
shares and perpetual bonds: None
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C&S Paper Co., Ltd. Semi-annual Report 2021
Table of changes in other financial instruments in issue at the end of the reporting period, such as the preference
shares and perpetual bonds: None
47. Lease liabilities
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Housing rent 5,526,106.56 7,138,799.58
Total 5,526,106.56 7,138,799.58
Other description: None
48. Long-term payables: None
(1) Long-term payables listed based on amount nature: None
(2) Special payables: None
49. Long-term employee remuneration payable
(1) Table of long-term employee remuneration payable: None
(2) Changes of the defined benefit plan
Description of content and associated risk of defined benefit plan and the impact on the Company’s future cash
flow, time and uncertainty: None
Description of major actuarial assumptions and sensitivity analysis results of defined benefit plan: None
Other description: None
50. Projected liabilities: None
51. Deferred income
Unit: RMB
Balance at the
Increase in the Decrease in the Balance at the end of
Item beginning of the Reason
current period current period the period
period
Government grants
Government grants 115,101,158.13 4,000,000.00 7,008,167.50 112,092,990.63
related to assets
Total 115,101,158.13 4,000,000.00 7,008,167.50 112,092,990.63 --
Projects involving government grants:
175
C&S Paper Co., Ltd. Semi-annual Report 2021
Unit: RMB
Amount
Increased included in Amount
Amount of
Balance at amount of non- included in Balance at
offset costs in Other Related to
Liability item the beginning grants in the operating other income the end of the
the current changes asset/income
of the period current income in the in the current period
period
period current period
period
Support
funds for
sewage
Related to
centralized 972,000.00 60,750.00 911,250.00
asset
water
treatment
project
Ex-post funds
awarded to
the first batch
of the union Related to
4,081,579.34 317,293.32 3,764,286.02
enterprises asset
for technical
transformatio
n in 2017
Support
funds for the
technical
transformatio Related to
3,640,736.00 403,311.72 3,237,424.28
n of asset
equipment
production
line
Support
funds for
Related to
enterprise 3,219,688.10 396,187.14 2,823,500.96
asset
technical
upgrading
Subsidies for
the
infrastructure
30,535,934.0 30,000,215.8 Related to
construction 535,718.16
0 4 asset
of new
factory in
Hubei
Provincial
funds for
traditional Related to
910,714.30 53,571.42 857,142.88
industry asset
transformatio
n projects
Subsidies for
the expansion
of the high-
grade
household Related to
1,906,666.83 79,999.98 1,826,666.85
paper project asset
with an
annual output
of 25,000
tons
Discount Related to
interest funds 2,439,593.75 96,937.50 2,342,656.25
asset
for imported
176
C&S Paper Co., Ltd. Semi-annual Report 2021
equipment
Financial
support funds
for
construction
Related to
expansion of 7,453,253.75 312,723.90 7,140,529.85
asset
25,000-ton
high-grade
household
paper project
Subsidies for
construction
Related to
of the water 1,369,861.36 77,539.32 1,292,322.04
asset
treatment
project
Subsidies for
sewage Related to
2,664,772.67 238,636.38 2,426,136.29
treatment asset
station
Special funds
for capacity
expansion of
Related to
25,000-ton 1,820,833.22 287,500.02 1,533,333.20
asset
high-grade
household
paper project
Support
funds for the
construction
Related to
of 3,032,539.79 159,523.80 2,873,015.99
asset
environmenta
l protection
facilities
Support
funds for
Related to
equipment of 9,467,571.00 985,624.08 8,481,946.92
asset
Phase II
project
Support
funds for the
16,172,657.6 15,046,946.4 Related to
transformatio 1,125,711.24
5 1 asset
n of Phase I
project
Support
funds for the
construction
21,188,970.5 20,408,088.2 Related to
of Automated 780,882.36
8 2 asset
Storage &
Retrieval
System
Funds for
reconstructio
n project of Related to
1,389,966.67 510,600.00 879,366.67
automatic asset
production
lines
Subsidy
funds for the Related to
2,833,819.12 4,000,000.00 585,657.16 6,248,161.96
smart factory asset
project
115,101,158. 112,092,990.
Total 4,000,000.00 7,008,167.50
13 63
177
C&S Paper Co., Ltd. Semi-annual Report 2021
52. Other non-current liabilities: None
53. Share capital
Unit: RMB
Increase and decrease of this change (+ and -)
Balance at the Shares Balance at the
beginning of the Issuance of end of the
Bonus transferred
period additional Others Subtotal period
shares from surplus
shares
reserve
Total number 1,311,043,971.
1,311,487,077.00 1,578,199.00 -2,021,305.00 -443,106.00
of shares 00
Other description: For details about changes in the Company’s share capital in the reporting period, please refer to
“1. Development history of the Company in III. Basic Information of the Company of Section X” for details.
54. Other equity instruments
(1) Basic information on other financial instruments in issue at the end of the reporting period, such as the
preference shares and perpetual bonds: None
(2) Table of changes in other financial instruments in issue at the end of the reporting period, such as the
preference shares and perpetual bonds
Description of increase/decrease of other equity instruments in the reporting period, reasons of change, and
accounting basis: None
Other description: None
55. Capital reserve
Unit: RMB
Balance at the beginning Increase in the current Decrease in the current Balance at the end of the
Item
of the period period period period
Capital premium (share
626,797,181.97 15,730,354.61 6,730,945.65 635,796,590.93
premium)
Other capital reserve 280,209,323.08 28,643,935.91 3,024,288.84 305,828,970.15
Total 907,006,505.05 44,374,290.52 9,755,234.49 941,625,561.08
Other descriptions, including increase/decrease in the reporting period and reasons of change:
(1) The exercise of stock options awarded in the first grant and the exercise of reserved stock options as per the
2018 Stock Option and Restricted Stock Incentive Plan increased “capital reserve-share premium” by
RMB15,730,354.61 and decreased “capital reserve-other capital reserve” by RMB3,024,288.84. The repurchase
and deregistration of incentive stocks decreased “capital reserve-other capital reserve” by RMB6,730,945.65.
178
C&S Paper Co., Ltd. Semi-annual Report 2021
(2) The Company set aside provision for equity incentive costs and fees in the reporting period and
RMB12,167,835.66 was included in “capital reserve - other capital reserve”. Difference between the deductible
amount before tax under the 2018 Stock Option and Restricted Stock Incentive Plan and recognized book expense
was confirmed as deferred income tax asset and RMB16,476,100.25 was included in “capital reserve - other
capital reserve”.
56. Treasury shares
Unit: RMB
Balance at the beginning Increase in the current Decrease in the current Balance at the end of the
Item
of the period period period period
Restricted shares 68,800,189.53 1,352,409.36 31,084,804.50 39,067,794.39
Ordinary shares 27,680,721.76 532,605,631.91 560,286,353.67
Total 96,480,911.29 533,958,041.27 31,084,804.50 599,354,148.06
Other descriptions, including increase/decrease in the reporting period and reasons of change:
Notes: (1) The second unlock period unlocked 4,809,045 shares of first-grant stock options at RMB4.33/share
granted under the 2018 Stock Option and Restricted Stock Incentive Plan. Totally RMB20,823,164.85 was
included in the decrease of the current period. As some incentive recipients for stocks awarded in the first grant
left the Company or failed to pass the appraisal, the Company repurchased and deregistered 2,021,305 shares with
RMB4.33 per share and a total amount of RMB8,752,250.65, which was included in the decrease of the current
period. Cash dividends waiting to be issued to holders of restricted shares can be withdrawn. For holders of
restricted shares that are expected to be unlocked in the future, RMB1,509,389.00 was included in the decrease of
the current period.
(2) A cash dividend of RMB400,218.39 was withdrawn for shares originally held by repurchase and deregistration
recipients and therefore included in the increase of the current period; a cash dividend of RMB952,190.97 for
shares unlocked in the second unlock period was included in the increase of the current period.
(3) The Company has carried out share repurchase with a special securities repurchase account via centralized
bidding, with a total transaction amount of RMB532,605,631.91.
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C&S Paper Co., Ltd. Semi-annual Report 2021
57. Other comprehensive income: None
58. Special reserves: None
59. Surplus reserve
Unit: RMB
Balance at the beginning Increase in the current Decrease in the current Balance at the end of the
Item
of the period period period period
Statutory surplus reserve 61,469,258.27 61,469,258.27
Total 61,469,258.27 61,469,258.27
Explanation of surplus reserves, including increase/decrease in the reporting period and reasons of change: None
60. Retained earnings
Unit: RMB
Item Current period Last period
Retained earnings before adjustment at the end of
2,858,664,147.39 2,058,968,835.80
the last period
Retained earnings at the beginning of the period
2,858,664,147.39 2,058,968,835.80
after adjustment
Plus: Net profit attributable to owners of the
407,161,317.15 452,699,484.61
parent company of the current period
Dividends on ordinary shares payable 128,751,529.41 97,945,986.16
Retained earnings at the end of the period 3,137,073,935.13 2,413,722,334.25
Details on adjusting retained earnings at the beginning of the period:
(1) As a result of retrospective adjustments according to the Accounting Standards for Business Enterprises and its
related new provisions, the impact on retained earnings at the beginning of the period was RMB0.00.
(2) Due to the changes in accounting policies, the impact on retained earnings at the beginning of the period was
RMB0.00.
(3) Due to the correction of material accounting errors, the impact on retained earnings at the beginning of the
period was RMB0.00.
(4) Due to the changes in the scope of combination caused by the same control, the impact on retained earnings at
the beginning of the period was RMB0.00.
(5) Other adjustments affected retained earnings at the beginning of the period by a total of RMB0.00.
180
C&S Paper Co., Ltd. Semi-annual Report 2021
61. Operating income and operating cost
Unit: RMB
Incurred in the current period Incurred in the prior period
Item
Income Cost Income Cost
Principal business 4,123,177,610.49 2,462,562,811.28 3,600,704,841.94 1,918,216,266.98
Other businesses 124,464,225.89 99,681,354.93 15,496,557.86 13,190,651.18
Total 4,247,641,836.38 2,562,244,166.21 3,616,201,399.80 1,931,406,918.16
Information related to income:
Unit: RMB
Contract classification Branch 1 Branch 2 Total
By product type 4,247,641,836.38 4,247,641,836.38
Including:
Household paper 4,082,881,792.19 4,082,881,792.19
Personal care 40,295,818.30 40,295,818.30
Others 124,464,225.89 124,464,225.89
By operating region 4,247,641,836.38 4,247,641,836.38
Including:
Domestic 4,149,892,689.00 4,149,892,689.00
Abroad 97,749,147.38 97,749,147.38
Including:
Including:
Including:
Including:
Including:
Total 4,247,641,836.38 4,247,641,836.38
Information related to performance obligation: None
Information related to the transaction price apportioned to the remaining performance obligation:
The amount of income corresponding to the obligations of contract performance with an executed contract that is
not performed or fully performed at the end of the reporting period is RMB10,852,118.31, of which the income of
RMB10,852,118.31 is expected to be confirmed as income in the year of 2021.
Other description: None
62. Tax and surcharges
Unit: RMB
Item Incurred in the current period Incurred in the prior period
City construction and maintenance tax 10,406,083.91 9,361,201.41
181
C&S Paper Co., Ltd. Semi-annual Report 2021
Education surcharges 4,922,998.46 4,706,053.57
Resource tax 55,344.16
Property tax 5,361,355.73 4,767,707.05
Land use tax 1,364,954.29 1,746,360.26
Vehicle and vessel tax 9,030.00 12,360.00
Stamp tax 3,544,054.89 3,007,283.02
Local education surcharges 3,281,999.30 3,137,369.06
Environmental protection tax 305,183.69 181,672.99
Total 29,251,004.43 26,920,007.36
Other description: None
63. Selling expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Employee remuneration 188,440,219.32 134,986,732.37
Advertising expenses 136,856,089.50 74,270,803.62
Product promotion fees 486,488,574.50 411,196,541.39
Shopping mall management fees 42,603,638.54 48,753,624.04
Transportation expenses 44,766,089.36 165,690,045.64
Traveling expenses 9,543,610.64 4,940,998.20
Business entertainment expenses 899,984.09 436,080.12
Rental fees 4,279,089.03 3,183,544.55
Others 1,601,356.74 4,612,712.67
Total 915,478,651.72 848,071,082.60
Other description: None
64. Administrative expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Employee remuneration 74,061,162.35 70,379,157.38
Equity incentive cost 12,167,835.66 52,983,211.08
Depreciation and amortization fees 34,639,880.19 31,544,768.00
Office allowance 12,660,998.77 10,475,476.21
Consulting service fees 8,688,604.92 4,773,171.55
Outsourcing warehouse management fees 8,791,106.82 5,349,303.92
Business entertainment expenses 2,582,730.40 1,580,927.02
Traveling expenses 950,329.72 393,381.65
Environmental protection fees 1,244,274.84 1,251,298.69
Rental fees 3,679,190.64 1,475,930.22
182
C&S Paper Co., Ltd. Semi-annual Report 2021
Others 5,733,964.07 5,495,228.29
Total 165,200,078.38 185,701,854.01
Other description: None
65. R&D expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Employee remuneration 18,956,073.80 17,174,899.12
Direct investment 62,873,043.34 59,534,214.24
Depreciation and amortization fees 13,685,779.13 12,202,630.08
Others 1,899,916.05 1,949,084.80
Total 97,414,812.32 90,860,828.24
Other description: None
66. Finance expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Interest fees 975,546.01 1,140,788.29
Less: Interest income 6,623,270.61 4,060,998.02
Exchange profit and loss 1,346,250.22 -993,705.23
Plus: Transaction fee 2,498,330.34 2,891,912.73
Total -1,803,144.04 -1,022,002.23
Other description: None
67. Other income
Unit: RMB
Sources of other income Incurred in the current period Incurred in the prior period
Refund of individual income tax 1,137,762.21 696,845.15
Support funds for the transformation of
1,125,711.24 224,780.22
Phase I project
Subsidies for R&D, famous-brand and
high-quality products, and 1,020,000.00
income/efficiency increase
Support funds for equipment of Phase II
985,624.08 985,624.08
project
Support funds for the construction of
780,882.36 192,647.06
Automated Storage & Retrieval System
Support funds for technical upgrading
700,000.00
project 2020
Subsidy funds for the smart factory project 585,657.16
183
C&S Paper Co., Ltd. Semi-annual Report 2021
Subsidies for the infrastructure
535,718.16 535,718.16
construction of new factory in Hubei
Funds for reconstruction project of
510,600.00
automatic production lines
Subsidies for internship, employment, job
489,780.86
stabilization and training
VAT exemption for employment of retired
411,700.00 438,350.00
soldiers and poor population
Support funds for the technical
transformation of equipment production 403,311.72 403,311.72
line
Provincial support funds for enterprise
396,187.14 264,124.76
technical upgrading
Ex-post funds awarded to the first batch of
the union enterprises for the technical 317,293.32 317,293.32
transformation in 2017
Financial support funds for construction
expansion of 25,000-ton high-grade 312,723.90 312,723.90
household paper project
Special funds for capacity expansion of
25,000-ton high-grade household paper 287,500.02 287,500.02
project
Technical demonstration fee for water
280,000.00
intake points
Subsidies for sewage treatment station 238,636.38 238,636.38
Special award funds for the restructuring
210,900.00
of industrial enterprises
Support funds for the construction of
159,523.80 159,523.80
environmental protection facilities
Tax contribution reward 100,000.00
Subsidies for job creation for the poor 97,995.00
Discount interest funds for imported
96,937.50 96,937.50
equipment
Subsidies for the expansion of the high-
grade household paper project with an 79,999.98 79,999.98
annual output of 25,000 tons
Subsidies for construction of the water
77,539.32 77,539.32
treatment project
Rewards for creation of odor-free
62,752.29
enterprise
Support funds for sewage centralized water
60,750.00 60,750.00
treatment project
Provincial funds for traditional industry
53,571.42 35,714.28
transformation projects
Financial rewards for cleaner production
50,000.00
transformation
Rewards for demonstration enterprise of
informatization and industrialization 50,000.00
integration
184
C&S Paper Co., Ltd. Semi-annual Report 2021
Subsidies for employment and
31,604.66
entrepreneurship
Subsidies for encouraging scaled
20,000.00
development of enterprises
Subsidies for new exports of exporting
700.00
enterprises
Awards for breakthroughs with increases in
300,000.00
business revenues
Subsidies for photovoltaic power rooftop 224,640.00
Financial support funds for industry
7,892,985.55
collaboration
Support policy rewards of 2018 from the
Bureau of Economy and Information 1,310,000.00
Technology Pengzhou City
Energy efficiency special fund 2019 of the
Science, Industry and Commerce Bureau 20,000.00
(cleaner production enterprise)
Management system certification rewards
2018 of Pengzhou Administration for 10,000.00
Market Regulation
Subsidies for pandemic prevention system
construction of enterprises by Bureau of
9,000.00
Economy and Information Technology
Pengzhou City
Total 11,671,362.52 15,174,645.20
68. Return on investment
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Others 358,473.15 2,287,274.87
Total 358,473.15 2,287,274.87
Other description: “Others” refer to returns on principal-protected wealth management products at maturity and
reverse repo of treasury bonds of the Company.
69. Profit of net exposure hedging: None
70. Income from changes in fair value: None
71. Credit impairment loss
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Bad debt loss from other receivables -464,824.58 -1,502,718.88
Bad debt loss from accounts receivable 1,766,431.51 79,019.13
185
C&S Paper Co., Ltd. Semi-annual Report 2021
Total 1,301,606.93 -1,423,699.75
Other description: None
72. Asset impairment loss
Unit: RMB
Item Incurred in the current period Incurred in the prior period
II. Impairment Loss of Inventories and
-468,530.30 -850,381.40
Contract Performance Cost
V. Impairment Loss of Fixed Assets -2,285,297.81
Total -2,753,828.11 -850,381.40
Other description: None
73. Return on disposal of assets
Unit: RMB
Source Incurred in the current period Incurred in the prior period
Disposal of fixed assets -259,896.46 -896,870.05
Total -259,896.46 -896,870.05
74. Non-operating income
Unit: RMB
Amount recognized as profit or
Item Incurred in the current period Incurred in the prior period
loss of the current period
Government grants 23,000.00 1,997,067.57 23,000.00
Income from fine and
907,005.44 640,155.42 907,005.44
compensation
Profit from damage and
98,166.07 1,758.21 98,166.07
retirement of non-current assets
Including: Fixed assets 98,166.07 1,758.21 98,166.07
Others 680,195.03 530,259.96 680,195.03
Total 1,708,366.54 3,169,241.16 1,708,366.54
Government grants recognized as profit and loss of the current period:
Unit: RMB
Whether the
Amount Amount
grant affected
Nature and Whether a incurred in incurred in Related to
Grants Issuer Reason the profit and
type special grant the current the last asset/income
loss of the
period period
year
Rewards for People’s Grants
advanced Government received for
Related to
party of Grant the No No 2,000.00
income
organizations Shuangshui performance
and Town, Xinhui of the State’s
186
C&S Paper Co., Ltd. Semi-annual Report 2021
individuals District, function of
2020 Jiangmen ensuring the
City supply or
price control
of a public
utility or
socially
necessary
product
Grants
received for
the
performance
Subsidies for Human of the State’s
enterprises’ Resources function of
employee and Social ensuring the Related to
Grant No No 21,000.00
training for Security supply or income
job Bureau of price control
adaptation Yunfu City of a public
utility or
socially
necessary
product
Grants
received for
the
performance
Labor and of the State’s
Employment function of
Subsidies for
Administratio ensuring the Related to
job Grant No No 291,200.00
n of Xiaonan supply or income
stabilization
District, price control
Xiaogan City of a public
utility or
socially
necessary
product
Grants
received for
the
performance
Labor and of the State’s
Employment function of
Subsidies for
Administratio ensuring the Related to
job Grant No No 27,200.00
n of Xiaonan supply or income
stabilization
District, price control
Xiaogan City of a public
utility or
socially
necessary
product
Grants
Labor and
Social received for
Employment
security the Related to
Administratio Grant No No 37,332.00
subsidies for performance income
n of Xiaonan
enterprises of the State’s
District,
function of
187
C&S Paper Co., Ltd. Semi-annual Report 2021
Xiaogan City ensuring the
supply or
price control
of a public
utility or
socially
necessary
product
Grants
received as a
result of
Central
Special compliance
Treasury
award funds with local
Payment
for the government Related to
Center of Reward No No 410,000.00
restructuring policies such income
Xiaogan City,
of industrial as investment
Xiaonan
enterprises attraction and
District
other local
support
policies
Grants
received for
the
performance
Labor and of the State’s
Employment function of
Subsidies for
Administratio ensuring the Related to
job Grant No No 29,142.57
n of supply or income
stabilization
Pengzhou price control
City of a public
utility or
socially
necessary
product
Grants
received for
the
performance
Job
of the State’s
stabilization Hangzhou
function of
subsidy from Municipal
ensuring the Related to
the Employment Grant No No 887.00
supply or income
Unemployme Service
price control
nt Insurance Center
of a public
Fund
utility or
socially
necessary
product
Grants
Job received for
stabilization Employment the
subsidy from Management performance
Related to
the Service Grant of the State’s No No 389,857.30
income
Unemployme Office of function of
nt Insurance Pinghu City ensuring the
Fund supply or
price control
188
C&S Paper Co., Ltd. Semi-annual Report 2021
of a public
utility or
socially
necessary
product
Grants
received for
the
performance
Social of the State’s
Insurance function of
Subsidies for
Fund ensuring the Related to
job Grant No No 245,515.30
Administratio supply or income
stabilization
n of Chengdu price control
City of a public
utility or
socially
necessary
product
Grants
received for
the
performance
Human of the State’s
Resources function of
One-off
and Social ensuring the Related to
employment Grant No No 238,317.87
Security supply or income
subsidy
Bureau of price control
Luoding City of a public
utility or
socially
necessary
product
Grants
received for
the
performance
of the State’s
Social
function of
Subsidies for Insurance
ensuring the Related to
job Bureau of Grant No No 87,935.77
supply or income
stabilization Yutian
price control
County
of a public
utility or
socially
necessary
product
Grants
received for
Job
Human the
stabilization
Resources performance
subsidy from
and Social of the State’s Related to
the Grant No No 72,684.00
Security function of income
Unemployme
Bureau of ensuring the
nt Insurance
Yunfu City supply or
Fund
price control
of a public
189
C&S Paper Co., Ltd. Semi-annual Report 2021
utility or
socially
necessary
product
Grants
received for
the
performance
Job Social
of the State’s
stabilization Insurance
function of
subsidy from Fund
ensuring the Related to
the Administratio Grant No No 50,801.57
supply or income
Unemployme n of
price control
nt Insurance Zhongshan
of a public
Fund City
utility or
socially
necessary
product
Grants
received for
the
Dongsheng
performance
Employee Branch of the
of the State’s
subsidies for Human
function of
enterprises Resources
ensuring the Related to
with work and Social Grant No No 40,400.00
supply or income
and Security
price control
production Bureau of
of a public
resumption Zhongshan
utility or
City
socially
necessary
product
Grants
received for
the
performance
Enterprise
of the State’s
training
Fourth function of
subsidy from
Technical ensuring the Related to
the Fourth Grant No No 33,000.00
School of supply or income
Technical
Xiaogan City price control
School of
of a public
Xiaogan City
utility or
socially
necessary
product
Grants
received for
the
Financial
performance
Subsidies for Payment
of the State’s
Covid-19 (Accounting) Related to
Grant function of No No 19,750.00
prevention Center of income
ensuring the
and control Jiaxing Port
supply or
District
price control
of a public
utility or
190
C&S Paper Co., Ltd. Semi-annual Report 2021
socially
necessary
product
Grants
received for
the
performance
Job
Social of the State’s
stabilization
Insurance function of
subsidy from
Fund ensuring the Related to
the Grant No No 16,343.00
Administratio supply or income
Unemployme
n of Yunfu price control
nt Insurance
City of a public
Fund
utility or
socially
necessary
product
Grants
received as a
result of
Development
compliance
and
with local
Security Construction
government Related to
social Management Grant No No 5,000.00
policies such income
services Committee of
as investment
Port District,
attraction and
Jiaxing City
other local
support
policies
Grants
received for
the
performance
Job
Human of the State’s
stabilization
Resources function of
subsidy from
and Social ensuring the Related to
the Grant No No 1,500.00
Security supply or income
Unemployme
Bureau of price control
nt Insurance
Luoding City of a public
Fund
utility or
socially
necessary
product
Grants
received for
Dongsheng the
Job Branch of the performance
stabilization Human of the State’s
subsidy from Resources function of
Related to
the and Social Grant ensuring the No No 118.16
income
Unemployme Security supply or
nt Insurance Bureau of price control
Fund Zhongshan of a public
City utility or
socially
necessary
191
C&S Paper Co., Ltd. Semi-annual Report 2021
product
Grants
received as a
result of
compliance
Funds for with local
Finance
promoting government Related to
Bureau of Grant No No 83.03
industrial policies such income
Yunfu City
development as investment
attraction and
other local
support
policies
Total 23,000.00 1,997,067.57
Other description: None
75. Non-operating expenses
Unit: RMB
Amount recognized as profit or
Item Incurred in the current period Incurred in the prior period
loss of the current period
External donations 1,760,851.30 11,952,705.59 1,760,851.30
Others 1,152,018.68 1,267,171.07 1,152,018.68
Loss from damage and
725,313.88 20,306.50 725,313.88
retirement of non-current assets
Including: Fixed assets 725,313.88 20,306.50 725,313.88
Total 3,638,183.86 13,240,183.16 3,638,183.86
Other description: None
76. Income tax expenses
(1) Table of income tax expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Current income tax expense 87,232,248.96 76,953,980.75
Deferred income tax expense -6,132,728.24 8,829,273.17
Total 81,099,520.72 85,783,253.92
(2) Adjustment process of accounting profits and income tax expenses
Unit: RMB
Item Incurred in the current period
Total profit 488,244,168.07
Income tax expenses calculated at the statutory/applicable tax 122,061,042.02
192
C&S Paper Co., Ltd. Semi-annual Report 2021
rate
Impacts of different tax rates applied to subsidiaries -40,492,083.06
Impacts of adjustments to income taxes during the prior period -1,905,505.90
Impacts of non-deductible costs, expenses and losses 1,436,067.66
Income tax expenses 81,099,520.72
Other description: None
77. Other comprehensive income
Please refer to the notes for details.
78. Items of the cash flow statement
(1) Cash received related to other operating activities
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Current accounts 10,003,853.92 12,564,390.63
Fiscal appropriation 7,136,732.81 36,365,077.82
Interest income 6,623,270.61 4,060,998.02
Authorized collection of individual income
9,395,040.46 17,943,967.78
tax under the equity incentive
Others 5,203,778.87 6,055,212.85
Total 38,362,676.67 76,989,647.10
Explanation of cash received related to other operating activities: None
(2) Cash payments related to other operating activities
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Expenses paid 409,369,512.68 316,942,453.60
Current accounts 6,431,125.10 2,335,741.67
Authorized payment of individual income
10,715,472.44 28,191,169.72
tax under the equity incentive
Others 1,126,549.69 10,981,895.83
Total 427,642,659.91 358,451,260.82
Explanation of cash paid related to other operating activities: None
(3) Cash received related to other investing activities
Unit: RMB
193
C&S Paper Co., Ltd. Semi-annual Report 2021
Item Incurred in the current period Incurred in the prior period
Principal repayment on maturity of wealth
50,000,000.00 40,000,000.00
management products
Principal repayment on maturity of
87,105,000.00
treasury bonds reverse repo
Total 50,000,000.00 127,105,000.00
Explanation of cash received related to other investment activities: None
(4) Cash payments related to other investing activities
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Purchasing wealth management products 212,400,000.00
Total 212,400,000.00
Explanation of cash paid related to other investment activities: None
(5) Cash received related to other financing activities: None
(6) Cash payments related to other financing activities
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Repurchase and deregistration of equity
8,752,250.65 3,475,786.26
incentives
Share repurchase 532,605,631.91 27,680,721.76
Deposits of security deposits for bills,
12,315,870.82 9,290,358.88
letters of guarantee and letters of credit
Repayment of principal and interests of
lease liabilities under the new lease 1,023,913.33
standards
Total 554,697,666.71 40,446,866.90
Explanation of cash paid related to other financing activities: None
79. Supplementary information to cash flow statement
(1) Supplementary information to cash flow statement
Unit: RMB
Supplementary information Amount of the current period Amount of last period
1 Reconciliation of net profit to cash flows
-- --
from operating activities:
Net Profit 407,144,647.35 452,699,484.61
Plus: Provisions for asset impairment 1,452,221.18 2,274,081.15
194
C&S Paper Co., Ltd. Semi-annual Report 2021
Depreciation of fixed assets, oil
and gas assets and productive biological 163,103,078.23 145,151,634.15
assets
Depreciation of use right assets 2,181,245.94
Intangible asset amortization 3,326,149.16 2,901,377.36
Long-term unamortized expenses 5,792,540.92 3,200,058.79
Losses from disposal of fixed
assets, intangible assets and other long-term 259,896.46 896,870.05
assets (“-” indicates income)
Losses from fixed assets write-off
627,147.81 18,548.29
(“-” indicates income)
Losses from changes in fair value
(“-” indicates income)
Finance expenses (“-” indicates
4,730,497.09 -2,415,195.58
income)
Investment losses (“-” indicates
-358,473.15 -2,287,274.87
income)
Decrease in deferred income tax
-17,332,968.85 1,306,113.02
assets (“-” indicates increase)
Increase in deferred income tax
11,200,240.61 7,523,160.15
liabilities (“-” indicates decrease)
Decrease in inventories (“-”
36,965,050.50 -192,512,816.22
indicates increase)
Decrease in operating receivables
78,196,966.06 -100,988,107.49
(“-” indicates increase)
Increase in operating payables (“-”
40,577,548.88 186,790,654.92
indicates decrease)
Others
Net cash flows from operating
737,865,788.19 504,558,588.33
activities
2 Significant investment and financing
-- --
activities not involving cash:
Conversion of debt to capital
Convertible corporate bonds due within
one year
Fixed assets acquired under finance
lease
3 Net changes in cash and cash equivalents: -- --
Balance of cash at the end of the period 701,224,202.33 896,433,846.64
Less: Balance of cash at the beginning
1,050,034,135.72 675,996,852.97
of the period
Plus: Balance of cash equivalents at the
end of the period
Less: Balance of cash equivalents at the
beginning of the period
Net increase in cash and cash
-348,809,933.39 220,436,993.67
equivalents
195
C&S Paper Co., Ltd. Semi-annual Report 2021
(2) Net cash paid to acquire subsidiaries during the period: None
(3) Net cash received from the disposal of subsidiaries during the period: None
(4) Constitution of cash and cash equivalents
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
I. Cash 701,224,202.33 1,050,034,135.72
Including: Cash on hand 56,626.99 36,349.55
Bank deposits always available for
694,226,698.05 1,047,785,634.71
payment
Other monetary funds always
6,940,877.29 2,212,151.46
available for payment
III. Balance of Cash and Cash Equivalents at
701,224,202.33 1,050,034,135.72
the End of the Period
Other description: None
80. Notes to items in the statement of changes in owner’s equity
Description on the name and amount of items under “Others” whose closing balance in last year was adjusted and
other relevant issues: None
81. Assets with restricted right to use or ownership
Unit: RMB
Item Book value at the end of the period Reason for restriction
Security deposits for issuing letter of credit
Other monetary funds 87,477,934.66
and notes
Total 87,477,934.66 --
Other description: None
82. Foreign currency monetary items
(1) Foreign currency monetary items
Unit: RMB
Balance of foreign currency at Balance of converted RMB at
Item Conversion rate
the end of the period the end of the period
Monetary funds -- -- 170,188,998.60
Including: USD 25,368,909.56 6.4704 164,146,992.42
EUR
HKD 7,251,567.67 0.8332 6,042,006.18
196
C&S Paper Co., Ltd. Semi-annual Report 2021
Accounts receivable -- -- 29,765,127.44
Including: USD 1,052.88 6.4704 6,812.55
EUR
HKD 35,715,692.38 0.8332 29,758,314.89
Long-term borrowings -- --
Including: USD
EUR
HKD
Other receivables 1,509,084.28
Including: HKD 1,811,190.93 0.8332 1,509,084.28
Accounts payable 173,342,875.75
Including: USD 26,774,200.70 6.4704 173,239,788.21
EUR 13,400.00 7.6931 103,087.54
Other payables 5,664,414.41
Including: HKD 6,790,466.58 0.8332 5,657,816.75
USD 1,013.42 6.4704 6,557.23
MOP 50.00 0.8086 40.43
Other description: None
(2) For overseas business entities, especially important ones, disclose their main overseas business address,
the standard currency for accounting and selection basis. If there are changes in the standard currency for
accounting, reasons shall be also provided
√ Applicable □ Not applicable
Overseas business entity Business address Standard currency for accounting
Zhong Shun International Co., Ltd. Hong Kong RMB
C&S Hong Kong Co., Ltd. Hong Kong RMB
C&S (Macao) Co., Ltd. Macao RMB
83. Hedges
Disclosure of hedged items and related hedging instruments and qualitative and quantitative information about
hedged risks according to the type of hedging: None
84. Government grants
(1) Basic information on government grants
Unit: RMB
Amount recognized as profit or
Category Amount Reporting items
loss for the current period
Related to asset 4,000,000.00 Deferred income
197
C&S Paper Co., Ltd. Semi-annual Report 2021
Related to asset 7,008,167.50 Other income 7,008,167.50
Related to income 3,525,432.81 Other income 3,525,432.81
Related to income 23,000.00 Non-operating income 23,000.00
Total 14,556,600.31 10,556,600.31
(2) Return of government grants
□ Applicable √ Not applicable
Other description:
Please refer to Note VII (51), (67) and (74) for details.
85. Others: None
VIII. Changes in the Consolidated Scope
1. Business combinations of enterprises not under common control
(1) Business combinations of enterprises not under common control in the reporting period: None
(2) Combination costs and goodwill
Method of determining the fair value of combination costs and descriptions of contingent consideration and its
changes: None
Main reasons for the formation of huge goodwill: None
Other description: None
(3) Acquiree’s identifiable assets and liabilities on the acquisition date
Method of determining the fair value of identifiable assets and liabilities: None
Acquiree’s contingent liabilities assumed in a business combination: None
Other description: None
(4) Profit or loss arising from the recalculation based on fair value of equities held before the acquisition
date
Whether there are transactions through which business combination is achieved in stages while control is obtained
within the reporting period
198
C&S Paper Co., Ltd. Semi-annual Report 2021
□ Yes √ No
(5) Descriptions of being unable to determine the consideration or the fair value of acquiree’s identifiable
assets and liabilities on the acquisition date or at the end of the current period of combination
None
(6) Other descriptions
None
2. Business combinations of enterprises under common control
(1) Business combinations of enterprises under common control in the current period: None
(2) Combination costs
Description on contingent consideration and its changes: None
Other description: None
(3) Book value of assets and liabilities of the combined party on the date of combination
Contingent liabilities of the combined party assumed in a business combination: None
Other description: None
3. Reverse purchase
Basic information of transactions, basis for transactions constituting reverse purchase, whether assets and
liabilities retained by listed companies constitute a business and its basis, determination of combination costs,
adjustment of equity amount and calculation when dealing as equity transactions: None
4. Disposal of subsidiaries
Whether there is situation that one disposal of investment in a subsidiary results in a loss of control
□ Yes √ No
Whether there is situation that the disposal of investment in a subsidiary is achieved in stages through multiple
transactions while the control is lost in the reporting period
□ Yes √ No
199
C&S Paper Co., Ltd. Semi-annual Report 2021
5. Changes in the scope of consolidation due to other reasons
Description of changes in the scope of combination due to other reasons (establishment or liquidation of
subsidiaries, etc.) and related situations:
The Company invested and founded C&S (Jiangsu) Paper Co., Ltd. on February 25, 2021, with a registered
capital of RMB200 million. C&S Paper Co., Ltd. holds 100% of its stakes. C&S (Jiangsu) Paper Co., Ltd. was
incorporated into the scope of consolidated statements from February. Currently, C&S (Jiangsu) Paper has started
operating activities.
On May 19, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and Yunnan
Jiaqu Trading Co., Ltd. jointly invested and established Yunnan Dolemi Trading Co., Ltd., with a registered
capital of RMB4 million. Dolemi Sanitary Products holds 60% of the shares while Yunnan Jiaqu holds 40% of the
shares. The Company has incorporated Yunnan Dolemi Trading Co., Ltd. into the scope of its consolidated
statements since May 2021. Currently, Yunnan Dolemi has started operating activities.
On May 20, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and Luzhou
Longmatan District Jisheng Trading Co., Ltd. jointly invested and established Luzhou Dolemi Sanitary Products
Co., Ltd., with a registered capital of RMB1.5 million. Dolemi Sanitary Products holds 60% of the shares while
Jisheng Trading holds 40% of the shares. The Company has incorporated Luzhou Dolemi Sanitary Products Co.,
Ltd. into the scope of its consolidated statements since May 2021. Currently, Luzhou Dolemi has started operating
activities.
On June 08, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and Sichuan
Zhong’en Liancheng Technology Co., Ltd. jointly invested and established Mianyang Dolemi Sanitary Products
Co., Ltd., with a registered capital of RMB1.5 million. Dolemi Sanitary Products holds 60% of the shares while
Zhong’en Liancheng holds 40% of the shares. The Company has incorporated Mianyang Dolemi Sanitary
Products Co., Ltd. into the scope of its consolidated statements since May 2021. Currently, Mianyang Dolemi has
no operating activities.
6. Others: None
IX. Equities in Other Entities
1. Equities in subsidiaries
200
C&S Paper Co., Ltd. Semi-annual Report 2021
(1) Composition of the enterprise group
Shareholding
Name of Main business Registered percentage Obtaining
Principal businesses
subsidiary address address method
Direct Indirect
R&D, production, and sales (including online sales): household paper, maternal and infant products, Capital
Jiangmen cosmetics, wipes, non-woven products, daily necessities, and cleaning supplies; sales (including online contributio
Jiangmen, Jiangmen,
Zhongshun Paper sales) of Class I and II medical devices. (The above items do not involve special management 88.25% 11.75% n for
Guangdong Guangdong
Co., Ltd. measures for the access of foreign investment.) (For items that must be approved in accordance with establishm
the law, the company may carry out business operations upon approval by competent departments.) ent
General items: manufacture of paper products; sales of paper products; sales of paper pulp; sales of
personal hygiene products; sales of hygiene products and disposable medical products; sales of
disinfectants (excluding hazardous chemicals); sales of Class I medical devices; retail of Class I
medical devices; sales of Class II medical devices; retail of class II medical devices; wholesale of
medical face masks; retail of medical face masks; sales of general merchandise; retail of daily Capital
Zhejiang necessities; sales of maternal and infant products; wholesale of kitchenware, sanitary ware and daily contributio
Zhongshun Paper Jiaxing, Zhejiang Jiaxing, Zhejiang sundries; wholesale of cosmetics; retail of cosmetics; wholesale of needle textiles and raw materials; 75.00% 25.00% n for
Co., Ltd. sales of needle textiles; sales of chemical industry products (excluding chemical products that need to establishm
be licensed); Internet sales (excluding the sales of commodities requiring a permit) (The company may ent
carry out business operations independently according to the law based on the business license, except
for items that must be licensed according to the law.) (For items that must be approved in accordance
with the law, the company may carry out business operations upon approval by competent
departments.)
Capital
contributio
C&S Hong Kong
Hong Kong Hong Kong Purchase of pulp 100.00% n for
Co., Ltd.
establishm
ent
R&D, production, wholesale, retail and online sales: household paper, sanitary products, maternal and
Capital
infant products, daily necessities, cosmetics, medical devices, sanitary materials, non-woven fabrics
contributio
C&S (Yunfu) Yunfu, Yunfu, and products, polymer materials and products, daily sundries, and disinfectant products (excluding
100.00% n for
Paper Co., Ltd. Guangdong Guangdong hazardous chemicals); wholesale, retail and online sales: food; import and export of goods and
establishm
technologies (excluding the import and export of goods and technologies prohibited by the State or
ent
involving administrative approval); warehousing services (limited to warehouses qualified in fire
201
C&S Paper Co., Ltd. Semi-annual Report 2021
protection without hazardous chemicals). (For items that must be approved in accordance with the law,
the company may carry out business operations upon approval by competent departments.)
Wholesale, retain and online sales: paper, wood pulp, sanitary products, maternal and infant products,
Capital
cosmetics, daily necessities, medical equipment, daily sundries, disinfection supplies (excluding
Yunfu Hengtai contributio
Yunfu, Yunfu, dangerous chemicals); import and export of goods or technologies (excluding the import and export of
Trading Co., Ltd. 100.00% n for
Guangdong Guangdong goods and technologies prohibited by the State or involving administrative approval). (For items that
(note) establishm
must be approved in accordance with the law, the company may carry out business operations upon
ent
approval by competent departments.)
Capital
contributio
C&S (Macao)
Macao Macao Wholesale, trade 100.00% n for
Co., Ltd.
establishm
ent
Wholesale, retail and online sales (sales only on third-party platforms) of paper supplies, paper
products (excluding printing products), wood pulp, general merchandise, hygiene products, cosmetics, Business
nonwoven products, chemical products for daily use, Class I medical devices and food; warehousing combinati
(excluding hazardous chemicals and precursor chemicals); import and export of goods and ons
Zhongshan
Zhongshan, Zhongshan, technologies; operations of Class II and Class III medical devices. (The above business scope involves involving
Zhongshun 100.00%
Guangdong Guangdong food operations, import and export of goods, and import and export of technologies.) (Exclude items enterprises
Trading Co., Ltd.
prohibited by laws and administrative regulations; items whose operations are restricted by laws and under
administrative regulations shall not be carried out unless the permit has been obtained.) (For items that common
must be approved in accordance with the law, the company may carry out business operations upon control
approval by competent departments.)
Business
combinati
Import, export and sales of paper products, general merchandise and pulp boards; sales of cosmetics, ons
Xiaogan C&S shower gel and sanitary pads; sales of baby products (excluding food). (For items that must be involving
Xiaogan, Hubei Xiaogan, Hubei 100.00%
Trading Co., Ltd. approved in accordance with the law, the company may carry out business operations upon approval enterprises
by competent departments.) under
common
control
Business
Sales of paper products, daily necessities, paper pulp, and pulp boards; import and export of goods.
combinati
(The company may independently select business items and carry out business activities in accordance
ons
Beijing C&S with the law; for items that must be approved in accordance with the law, the company may carry out
Beijing Beijing 100.00% involving
Paper Co., Ltd. business operations upon approval by competent departments based on contents of the approval; it is
enterprises
prohibited to engage in business activities of items prohibited and restricted by the city’s industrial
under
policies.)
common
202
C&S Paper Co., Ltd. Semi-annual Report 2021
control
Business
combinati
Sales of household paper, cleaning products, general merchandise, hygiene products, baby products,
ons
Chengdu cosmetics, nonwoven products, feminine hygiene products, chemical products for daily use, daily
Pengzhou, Pengzhou, involving
Zhongshun Paper necessities, medical devices, medical supplies and disinfectant products (excluding hazardous 100.00%
Sichuan Sichuan enterprises
Co., Ltd. chemicals); e-commerce (For items that must be approved in accordance with the law, the company
under
may carry out business operations upon approval by competent departments.)
common
control
Business
Wholesale, retail: paper products, paper pulp, general merchandise; import and export of goods and combinati
technologies (exclude items prohibited by laws and administrative regulations; items whose operations ons
Hangzhou Jie
Hangzhou, Hangzhou, are restricted by laws and administrative regulations shall not be carried out unless the permit has been involving
Rou Trading Co., 100.00%
Zhejiang Zhejiang obtained); other legitimate items that do not need approval according to the law) (for items that must enterprises
Ltd.
be approved in accordance with the law, the company may carry out business operations upon under
approval by competent departments) common
control
Business
combinati
ons
Shanghai Household paper, paper pulp, pulp boards, import and export of goods and technologies. (For items
involving
Huicong Paper Shanghai Shanghai that must be approved in accordance with the law, the company may carry out business operations 100.00%
enterprises
Co., Ltd. upon approval by competent departments.)
under
common
control
Licensed items: production of sanitary products and disposable medical supplies; production of
cosmetics (for items that must be approved in accordance with the law, companies may carry out
business operations upon approval by relevant departments, and the specific business items are subject
Business
to the approval document or the permit issued by competent department). General items: sales of
combinati
sanitary products and disposable medical supplies; retail of cosmetics; wholesale of cosmetics;
ons
manufacture of paper; sales of personal hygiene products; sales of knitwear; manufacture of maternal
C&S (Hubei) involving
Xiaogan, Hubei Xiaogan, Hubei and infant products; sales of maternal and infant products; sales of paper products; manufacture of 93.375% 6.625%
Paper Co., Ltd. enterprises
paper products; sales of daily necessities; sales of daily chemical products; sales of disinfectants
under
(excluding hazardous chemicals); Internet sales (excluding the sales of commodities requiring a
common
permit); sales of Class I medical devices; sales of Class II medical devices; import and export of goods
control
and technologies (excluding the import and export of goods and technologies prohibited by the State
or involving administrative approval). (For items that must be approved in accordance with the law,
the company may carry out business operations upon approval by competent departments.)
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C&S Paper Co., Ltd. Semi-annual Report 2021
Business
combinati
ons
Zhong Shun
Hong Kong, Hong Kong, involving
International Co., Sales of paper products 100.00%
China China enterprises
Ltd.
under
common
control
Licensed items: production of sanitary products and disposable medical supplies; import and export of
goods (for items that must be approved in accordance with the law, the company may carry out
Business
business operations upon approval by competent departments, and the specific business items are
combinati
subject to the approval document or the permit issued by relevant department). General items: sales of
ons
sanitary products and disposable medical supplies; sales of personal hygiene products; sales of daily
C&S (Sichuan) Pengzhou, Pengzhou, involving
necessities; manufacture of paper products; sales of paper products; manufacture of paper; 100.00%
Paper Co., Ltd. Sichuan Sichuan enterprises
manufacture of daily chemical products; sales of daily chemical products; sales of Class II medical
under
devices; sales of Class I medical devices; manufacture of industrial textile products; sales of industrial
common
textile products; manufacture of maternal and infant products; sales of maternal and infant products.
control
(The company may carry out business operations independently according to the law based on the
business license, except for items that must be licensed according to the law.)
Business
combinati
Production, processing and sales: high-class household paper products (excluding printing process);
ons
C&S import and export of pulp boards (exclude items prohibited by laws and administrative regulations;
Zhongshan, Zhongshan, involving
(Zhongshan) items whose operations are restricted by laws and administrative regulations shall not be carried out 100.00%
Guangdong Guangdong enterprises
Paper Co., Ltd. unless the permit has been obtained). (For items that must be approved in accordance with the law, the
under
company may carry out business operations upon approval by competent departments.)
common
control
R&D, production, processing, and sales (including online sales): household paper, tissue boxes,
hygiene products, cosmetics, non-woven products, plastic products, metalware, rubber products,
ceramics, baby products, feminine hygiene products and daily necessities; bamboo and forest trees
Capital
planting; acquisition of raw materials of bamboo and wood for paper making; R&D, production and
contributio
C&S (Dazhou) sales of bamboo pulp, wood pulp, bamboo chips and wood chips; combined heat and power and sales;
Dazhou, Sichuan Dazhou, Sichuan 100.00% n for
Paper Co., Ltd. warehouse leasing; processing and sales of lime and limestone; processing of industrial wastewater
establishm
and gray water reuse; general import and export business; sales of construction materials, hardware
ent
and electrical products, and chemical products (excluding hazardous products). (For items that must be
approved in accordance with the law, the company may carry out business operations upon approval
by competent departments.)
Sun Daily Yunfu, Yunfu, R&D, production, processing, and online sales: paper products, hygiene products, cosmetics, 50.00% 50.00% Capital
204
C&S Paper Co., Ltd. Semi-annual Report 2021
Necessities Co., Guangdong Guangdong nonwoven products, plastic products for daily use, chemical products for daily use, metalware for contributio
Ltd. daily use, rubber products for daily use, and ceramics for daily use; import and export of goods or n for
technologies (excluding the import and export of goods and technologies prohibited by the State or establishm
involving administrative approval). (For items that must be approved in accordance with the law, the ent
company may carry out business operations upon approval by competent departments.)
General items: manufacture of paper products; Internet sales (sales only on third-party platforms)
(excluding the sales of commodities requiring a permit); sales of personal hygiene products; sales of
Capital
household products, sales of hygiene products and disposable medical products; retail of cosmetics;
Dolemi Sanitary contributio
Zhongshan, Zhongshan, sales of general merchandise; sales of plastic products; sales of metal products; sales of rubber
Products Co., 60.00% 40.00% n for
Guangdong Guangdong products; manufacture of daily-use ceramic products. (The company may carry out business operations
Ltd. establishm
independently according to the law based on the business license, except for items that must be
ent
licensed according to the law.) (For items that must be approved in accordance with the law, the
company may carry out business operations upon approval by competent departments.)
Capital
Sales of hygiene products, household products, cosmetics, daily necessities, plastic products, metal
contributio
Yunnan Dolemi Kunming, Kunming, products, and rubber products; manufacture of ceramic products and paper products (For items that
60.00% n for
Trading Co., Ltd. Yunnan Yunnan must be approved in accordance with the law, the company may carry out business operations upon
establishm
approval by competent departments.)
ent
General items: sales of personal hygiene products; sales of paper products; Internet sales (excluding
Capital
the sales of commodities requiring a permit); sales of household products; sales of sanitary products
Luzhou Dolemi contributio
and disposable medical products; sales of daily necessities; sales of plastic products; sales of metal
Sanitary Products Luzhou, Sichuan Luzhou, Sichuan 60.00% n for
products; sales of rubber products; manufacture of daily-use ceramic products (the company may carry
Co., Ltd. establishm
out business operations independently according to the law based on the business license, except for
ent
items that must be licensed according to the law)
General items: wholesale of cosmetics; sales of personal hygiene products; manufacture of paper
Capital
products; Internet sales (excluding the sales of commodities requiring a permit); sales of household
Mianyang Dolemi contributio
Mianyang, Mianyang, products; sales of sanitary products and disposable medical products; retail of cosmetics; sales of daily
Sanitary Products 60.00% n for
Sichuan Sichuan necessities; sales of plastic products; sales of metal products; sales of rubber products; manufacture of
Co., Ltd. establishm
daily-use ceramic products (the company may carry out business operations independently according
ent
to the law based on the business license, except for items that must be licensed according to the law).
Licensed items: manufacture of Class II medical devices; import and export of goods; import and
export of technologies; manufacture of Class III medical devices; operation of Class III medical
Capital
devices (for items that must be approved in accordance with the law, companies may carry out
contributio
C&S (Jiangsu) business operations upon approval by relevant departments, and the specific business items are subject
Suqian, Jiangsu Suqian, Jiangsu 100.00% n for
Paper Co., Ltd. to approval result). General items: manufacture of paper products; sales of plastic products; sales of
establishm
paper products; Internet sales (excluding the sales of commodities requiring a permit); sales of daily
ent
necessities; sales of personal hygiene products; sales of household products; sales of sanitary products
and disposable medical products; retail of cosmetics; wholesale of cosmetics; sales of knitwear;
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C&S Paper Co., Ltd. Semi-annual Report 2021
wholesale of kitchen utensils and daily groceries; sales of metal products; sales of rubber products;
manufacture of daily-sue ceramic products; R&D of kitchen utensils and daily groceries; retail of
kitchen utensils and daily groceries; sewage treatment and recycling; manufacture of Class I medical
devices; sales of Class I medical devices; sales of Class II medical devices; sales of disinfectants
(excluding hazardous chemicals). (The company may carry out business operations independently
according to the law based on the business license, except for items that must be licensed according to
the law)
Description of the difference between the percentage of shares held in a subsidiary and the percentage of voting rights: None
Basis for holding 50% or less than of the voting rights but controlling the investee, or holding 50% or more of the voting rights but not controlling the investee: None
Basis for controlling the important consolidated structured entities: None Basis for determining whether the Company is an agent or a principal: None
Other descriptions: All shares held indirectly belong to the shares held by wholly-owned subsidiaries of the Company.
206
C&S Paper Co., Ltd. Semi-annual Report 2021
(2) Important non-wholly-owned subsidiaries
Description that the percentage of shares held by minority shareholders in a subsidiary is different from the
percentage of their voting rights: None
Other description: The Company does not have important non-wholly-owned subsidiaries.
(3) Main financial information of important non-wholly-owned subsidiaries: None
(4) Significant restrictions on the use of the assets and the repayment of the debts of the enterprise group:
None
(5) Financial or other support provided to consolidated structured entities: None
Other description:
Note: C&S (Yunfu) Co., Ltd. was changed to Yunfu Hengtai Trading Co., Ltd. in March 2021.
2. Transactions in which the share of owner’s equity in a subsidiary changes while control of the subsidiary
is still retained
(1) Description of changes in the share of owner’s equity in the subsidiary: None
(2) Impact of the transaction on the equity of minority shareholders and the equity attributable to owners
of the Parent Company
Other description: There are no transactions of the Company in which the share of owner’s equity in a subsidiary
changes and control of the subsidiary is retained.
3. Interests in joint arrangements or associates
(1) Important joint ventures or associates
Description that the percentage of shares in joint ventures or associates is different from the percentage of voting
rights: None
Basis for holding less than 20% of the voting rights but with significant influence, or holding 20% or more of the
voting rights but without significant influence: None
207
C&S Paper Co., Ltd. Semi-annual Report 2021
(2) Main financial information of important joint ventures: None
(3) Main financial information of important associates: None
(4) Summary financial information of unimportant joint ventures and associates: None
(5) Description of significant restrictions on the ability of joint ventures or associates to transfer funds to
the Company: None
(6) Excess losses incurred by joint ventures or associates: None
(7) Unconfirmed commitments related to the investment in joint ventures: None
(8) Contingent liabilities related to the investment in joint ventures or associates: None
4. Important joint operation
The Company does not have important joint operations.
5. Interests in unconsolidated structured entities
Description of unconsolidated structured entities:
The Company does not have interests in unconsolidated structured entities.
6. Others: None
X. Risks Associated with Financial Instruments
The main financial instruments of the Company include monetary funds, notes receivable, accounts receivable,
notes payable, accounts payable, other payables, loans, etc. Please refer to relevant items of “Note VII” for
detailed information of all financial instruments. The risks associated with these financial instruments and the risk
management policies adopted by the Company to reduce these risks are as follows. The management of the
Company manages and monitors these risk exposures to ensure that the above risks are kept within control.
The Company adopts the sensitivity analysis method to analyze the possible impact of reasonable and possible
changes in risk variables on the profit and loss or shareholder equities in the current period. Since any risk
variable rarely changes in isolation and the correlation between the variables will have a significant effect on the
ultimate financial impact of changes in a certain risk variable, the following contents are under the consumption
that changes of a variable are independent.
208
C&S Paper Co., Ltd. Semi-annual Report 2021
The goal of the Company’s risk management is to strike a proper balance between risks and gains and to minimize
the negative impact of risks on the business performance of the Company while maximizing the interests of
shareholders and other equity investors. Based on this risk management goal, the basic strategy of the Company’s
risk management is to determine and analyze all kinds of risks faced by the Company, clarify the minimum of risk
acceptance and conduct risk management, and monitor risks of all kinds in a timely and reliable manner to control
risks within the limits.
1. Credit risk
Credit risk refers to the risk of financial losses of one party caused by the failure of the other party to perform its
obligations. As of June 30, 2021, the largest credit exposure that may cause financial losses to the Company
mainly comes from the losses of the Company’s financial assets due to failure of the other contractual party to
perform its obligations.
In order to reduce credit risk, the Company only conducts transactions with recognized customers with good
credit status, and continuously monitors the accounts receivable through credit monitoring of existing customers
and aging analysis to ensure that the Company does not face the risk of bad debts and keep the overall credit risk
within control.
Liquid funds of the Company are deposited in banks with high credit ratings, so the credit risk of liquid funds is
low.
2. Interest rate risk
Interest rate risk refers to the risk of fluctuations in the fair value or future cash flow of financial instruments due
to changes in market interest rates. The interest rate risk faced by the Company mainly comes from bank
borrowings (please refer to “Note VII (32), (43) and (45)” for details). By developing a good relationship with
banks and carrying out proper design of credit lines, types of credits, and credit terms, the Company ensures
sufficient bank credit lines to meet its various financing needs. The risk of interest rate fluctuation can be
reasonably reduced by shortening the term of a single loan and specially stipulating early prepayment terms.
3. Foreign exchange risk
Foreign exchange risk refers to the risk of fluctuations in the fair value or future cash flow of financial instruments
due to changes in foreign exchange rates. The Company tries its best to match foreign currency income with
foreign currency expenditure to reduce foreign exchange risks.
Foreign exchange risks borne by the Company are mainly related to USD and HKD. Except for purchasing and
selling in USD and HKD by its overseas subsidiaries, other major business activities of the Company are priced
209
C&S Paper Co., Ltd. Semi-annual Report 2021
and settled in RMB. See “Note VII (82)” for the conversion of foreign currency financial assets and liabilities into
RMB as of June 30, 2021. During the reporting period, the Company generated exchange profit and loss of
RMB1,346,250.22.
Sensitivity analysis of foreign exchange risk:
Analysis assumption: On the basis that all other variables remain constant on the balance sheet date, the possible,
reasonable changes of foreign exchange rate will have the following pre-tax effects on the Company’s profit and
loss and shareholders’ equity in the current period:
Unit: RMB
Current period
Item
Impact on profit Impact on shareholders’ equity
Depreciation of RMB against foreign currency by 1.00% -214073.94 -214073.94
Appreciation of RMB against foreign currency by 1.00% 214073.94 214073.94
4. Liquidity risk
Liquidity risk refers to the risk of capital shortage when an enterprise fulfills its obligation to settle accounts by
delivering cash or other financial assets. The Company’s policy is to ensure that it has sufficient cash to repay
mature debts. Liquidity risk is centrally controlled by the financial departments of the Company. The financial
departments monitor cash balances, negotiable securities that can be cashed in at any time, and carry out rolling
forecasts on cash flows in the next six months to ensure that the Company has sufficient funds to repay debts
under all reasonable forecasts.
Financial liabilities held by the Company as of June 30, 2021 analyzed based on the maturity period of
undiscounted remaining contractual obligations are as follows:
Unit: RMB
Item Within 1 year Over 1 year Total
Notes payable 289,707,176.43
289,707,176.43
Accounts payable 723,033,087.39
711,941,179.23 11,091,908.16
Other payables 796,391,000.45
784,298,181.50 12,092,818.95
Total 1,809,131,264.27
1,785,946,537.16 23,184,727.11
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C&S Paper Co., Ltd. Semi-annual Report 2021
XI. Disclosure of Fair Value
1. Fair value of assets and liabilities measured at fair value at the end of the reporting period: None
2. Basis for determining the market price of recurring and non-recurring fair value measurement items in
Level 1: None
3. Qualitative and quantitative information on important parameters and valuation techniques used for
recurring and non-recurring fair value measurement items in Level 2: None
4. Qualitative and quantitative information on important parameters and valuation techniques used for
recurring and non-recurring fair value measurement items in Level 3: None
5. Adjustment information and sensitivity analysis of unobservable parameters between the opening and
closing book values of recurring fair value measurement items of Level 3: None
6. For recurring fair value measurement items with transfer between different levels, reasons for such
transfer and policies for determining the time of conversion: None
7. Changes in valuation techniques within the reporting period and reasons for such changes: None
8. Fair value of financial assets and financial liabilities not measured at fair value: None
9. Others: None
XII. Related Parties and Related Party Transactions
1. Information on the Parent Company of the Company
Shareholding Percentage of voting
Name of Parent percentage of the right of the Parent
Registered address Principal businesses Registered capital
Company Parent Company to Company to the
the Company Company
External investment;
consulting of
information on
commodities
Guangdong
Zhongshan, circulation
Zhongshun Paper RMB30 million 28.63% 28.63%
Guangdong (exclusive of real
Group Co., Ltd.
estate, labor
services, financial
futures, and studying
abroad)
Information on the Company’s Parent Company
The ultimate controller of the Company is Mr. Deng Yingzhong, the father, and Mr. Deng Guanbiao and Mr. Deng
211
C&S Paper Co., Ltd. Semi-annual Report 2021
Guanjie, whose two sons.
Other description: None
2. Information on subsidiaries of the Company
See Note IX Equities in Other Entities for detailed information on the subsidiaries of the Company.
3. Information on the joint ventures and associates of the Company
For important joint ventures or associates, please refer to the notes for details.
Other description: The Company does not have interests in joint venture arrangements or associates.
4. Information on other related parties
Name of other related parties Relationship between other related parties and the Company
Chung Shun Co. The second-largest shareholder of the Company, with 20.31% of the
Company’s shares
Guangzhou Zhongshun Trade Co., Ltd. A company controlled by the nephew and the husband of the niece
of Mr. Deng Yingzhong, director of the Company
Bama Zhongshun Health Products Co., Ltd. A company controlled by Guangdong Zhongshun Paper Group Co.,
Ltd., the Company’s controlling shareholder
The partially-owned subsidiary of Bama Zhongshun Health
Yantai Zhongshun Network Technology Co., Ltd. Products Co., Ltd. controlled by the Company’s controlling
shareholders
Formerly known as Zhongshun Industrial Investment (Shenzhen)
Shenzhen Zhongshun Caizhi Investment Co., Ltd. Co., Ltd., a company controlled by the Company’s actually
controllers, i.e. Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr.
Deng Guanjie
Pengzhou Lexiangshenghuo Trading Co., Ltd. A company where the senior manager Yue Yong’s son holds shares
and serves as a supervisor
Sichuan West Lexiangshenghuo Trading Co., Ltd. A company where the senior manager Yue Yong’s son holds shares
and serves as a supervisor
Chongqing Qinyue Trading Co., Ltd. A company where the senior manager Yue Yong’s brother holds
shares and serves as a supervisor
Other description: The Company’s directors, supervisors, senior managers and their close family members are
related parties of the company.
5. Information on related party transactions
(1) Related party transactions for purchase and sale of goods, and provision and acceptance of labor
services: None
Table of sale of goods/provision of labor services
Unit: RMB
Related party Content of related party Incurred in the current period Incurred in the prior period
212
C&S Paper Co., Ltd. Semi-annual Report 2021
transactions
Pengzhou Lexiangshenghuo
Sale of goods 796,449.56 828,658.05
Trading Co., Ltd.
Sichuan West Lexiangshenghuo
Sale of goods 289,094.73 180,809.75
Trading Co., Ltd.
Chongqing Qinyue Trading Co.,
Sale of goods 247,979.83
Ltd.
Guangdong Zhongshun Paper
Sale of goods 56,637.17
Group Co., Ltd.
Explanation of the related party transactions for purchase and sale of goods, and provision and acceptance of labor
services: None
(2) Related entrusted management/contracting and entrusting management/contracting out: None
(3) Related lease
The Company as the lessee: None
The Company as the lessee:
Unit: RMB
Name of lessor Lease fee confirmed in the Lease fee confirmed in the last
Type of leased assets
current period period
Mr. Deng Yingzhong, Mr. Deng
Guanbiao and Mr. Deng Housing lease 1,459,590.68 1,474,047.18
Guanjie
Explanation of related lease: None
(4) Related guarantee: None
(5) Interbank borrowing between related parties: None
(6) Asset transfer and debt reorganization between related parties: None
(7) Remuneration for key managers
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Remuneration for key managers 11,500,854.16 8,140,753.70
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C&S Paper Co., Ltd. Semi-annual Report 2021
(8) Other related party transactions: None
6. Receivables from and payables to related parties
(1) Receivables
Unit: RMB
Balance at the end of the period Balance at the beginning of the period
Item Related party Impairment Impairment
Book balance Book balance
provision provision
Chongqing Qinyue
Accounts receivable 60,876.03 3,043.80
Trading Co., Ltd.
Chongqing Qinyue
Other receivables 44.63 2.23
Trading Co., Ltd.
(2) Payables
Unit: RMB
Book balance at the end of the Book balance at the beginning
Item Related party
period of the period
Sichuan West Lexiangshenghuo
Contract liabilities 23,518.90 195.90
Trading Co., Ltd.
Pengzhou Lexiangshenghuo
Contract liabilities 13.67 1.67
Trading Co., Ltd.
Chongqing Qinyue Trading Co.,
Other payables 0.77
Ltd.
7. Commitments of related parties: None
8. Others
XIII. Share-based Payment
1. Overall information on share-based payment
√ Applicable □ Not applicable
Unit: RMB
The Company’s total amount of all equity instruments granted in the
0.00
current period
The Company’s total amount of all equity instruments exercised in the
6,387,244.00
current period
The Company’s total amount of all equity instruments expired in the
3,315,396.00
current period
The exercise price in the first exercise period for stock
Scope of exercise prices and remaining contractual term of the Company’ options awarded by the Company in the first grant
stock options issued as at the end of the reporting period period as at the end of reporting period is
RMB8.572/share, the exercise price in the first exercise
period for reserved stock options is RMB13.965/share,
214
C&S Paper Co., Ltd. Semi-annual Report 2021
and the exercise price in the second exercise period for
first-grant stock options is RMB8.472/share. The
validity period is from the grant date of the stock
options to the date when all stock options are exercised
or canceled, with a maximum period of 60 months.
Other description: None
2. Equity-settled share-based payment
√ Applicable □ Not applicable
Unit: RMB
1. Restricted shares: the stock closing prices at the grant date
Method of determining the fair value of equity instruments at the 2. Stock options: Black-Scholes model for option pricing
grant date 3. Employee stock ownership plan: the stock closing prices at
the grant date
Basis for determining the number of vested equity instruments Upon approval of the general meeting of shareholders
Reasons for significant differences between current estimates and
None
previous estimates
Cumulative amount of equity-settled share-based payments
171,552,833.56
recognized as capital surplus
Total fees confirmed by the equity-settled share-based payment in
12,167,835.66
the current period
Other description: None
3. Cash-settled share-based payment
□ Applicable √ Not applicable
4. Revision and termination of share-based payment
There was no revision and termination of share-based payment of the Company during the reporting period.
5. Others: None
XIV. Commitments and Contingencies
1. Significant commitments
Significant commitments on the balance sheet date
As at June 30, 2021, the Company had no significant commitments that should have been disclosed but are not
disclosed.
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C&S Paper Co., Ltd. Semi-annual Report 2021
2. Contingencies
(1) Significant contingent matters on the balance sheet date
As at June 30, 2021, the Company had no significant contingent matters that should have been disclosed but are
not disclosed.
(2) Explanations are also necessary if the Company has no significant contingent matters to be disclosed
There are no significant contingent matters to be disclosed in the Company.
3. Others: None
XV. Events after Balance Sheet Date
1. Significant non-adjusting events: None
2. Profit distribution: None
3. Sales return: None
4. Explanation on other events after the balance sheet date: None
XVI. Other Significant Matters
1. Corrections to previous accounting errors
(1) Retroactive restatement approach: None
(2) Prospective approach: None
2. Debt restructuring: None
216
C&S Paper Co., Ltd. Semi-annual Report 2021
3. Assets replacing
(1) Exchange of non-monetary assets: None
(2) Other asset replacing: None
4. Annuities plan: None
5. Operation discontinuation: None
6. Segment information
(1) Determination basis and accounting policies of reporting segments
The Company does not have operating segments with different economic features and hence has not identified
operating segments according to internal organization structure, management requirements and internal reporting
policies. Therefore, there was no information on reporting segments based on operating segments to be disclosed.
(2) Financial information on reporting segments: None
(3) Explanation on reasons if the Company has no reporting segments or is unable to disclose the total
assets and liabilities of the reporting segments: None
(4) Other description: None
7. Other important transactions and matters that may affect the decisions of investors: None
8. Others
In 2020, the Company signed the XIAOYIDA Business Cooperation Agreement with Bank of China Limited
Zhongshan Branch and Shanghai Junmeng E-commerce Co., Ltd. (No. 2020-XYDXY-33725001), under which
the bank offers a credit line of XIAOYIDA service up to RMB130 million to Shanghai Junmeng and the Company
provides a joint and several liability guarantee. The line of credit is valid until June 4, 2021 and the financing
period does not exceed 90 days. As of June 30, 2021, Shanghai Junmeng had a financing balance of the
XIAOYIDA service at RMB44.8 million.
In 2020, Zhongshan Zhongshun Trading Co., Ltd., a subsidiary of the Company, signed the XIAOYIDA Business
Cooperation Agreement with Bank of China Limited Zhongshan Branch and Wuhan Jie Rou E-commerce Co.,
Ltd. (No. 2020-XYDXY-33725002), under which the bank offers a credit line of XIAOYIDA service up to
RMB80 million to Wuhan Jie Rou and the Company provides a joint and several liability guarantee. The line of
217
C&S Paper Co., Ltd. Semi-annual Report 2021
credit is valid until June 4, 2021 and the financing period does not exceed 90 days. As of June 30, 2021, Wuhan
Jie Rou had a financing balance of the XIAOYIDA service at RMB46.1 million.
XVII. Notes to Major Items of Financial Statements of the Parent Company
1. Accounts receivable
(1) Accounts receivable disclosure by category
Unit: RMB
Balance at the end of the year Balance at the beginning of the year
Impairment Impairment
Book balance Book balance
Type provision Book provision
Book value
Percenta Provision value Percentag Provision
Amount Amount Amount Amount
ge ratio e ratio
Including:
Accounts receivable
for which bad debt 182,140, 1,765,30 180,374,8 94,047,36 1,399,993 92,647,372.
100.00% 0.97% 100.00% 1.49%
reserve is set aside in 196.12 9.60 86.52 5.99 .66 33
portfolios
Including:
Portfolio based on 69,802,7 1,765,30 68,037,48 56,099,68 1,399,993 54,699,687.
38.32% 2.53% 59.65% 2.50%
aging 98.34 9.60 8.74 1.03 .66 37
Portfolio based on 112,337, 112,337,3 37,947,68 37,947,684.
61.68% 40.35%
related parties 397.78 97.78 4.96 96
182,140, 1,765,30 180,374,8 94,047,36 1,399,993 92,647,372.
Total 100.00% 0.97% 100.00% 1.49%
196.12 9.60 86.52 5.99 .66 33
Bad debt reserve set aside individually: None
Bad debt reserve set aside individually: None
Bad debt reserve set aside individually: None
Bad debt reserve set aside in portfolios: 1,765,309.60
Unit: RMB
Balance at the end of the period
Name
Book balance Impairment provision Ratio of provision
Within the credit period 58,724,778.36 1,174,495.57 2.00%
Credit period - 1 year 10,925,833.41 546,291.67 5.00%
Subtotal of those within 1 year 69,650,611.77 1,720,787.24 2.47%
1 to 2 years 7,557.36 1,133.60 15.00%
2 to 3 years 144,629.21 43,388.76 30.00%
3 to 5 years 50.00%
Over 5 years 100.00%
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Total 69,802,798.34 1,765,309.60 --
Description of reason for the portfolio:
Accounts receivable with the same aging have similar credit risk characteristics.
Provision of bad debt reserve by portfolio: None
Description of reason for the portfolio: None
Provision of bad debt reserve by portfolio: None
Description of reason for the portfolio: None
Provision of bad debt reserve by portfolio: None
Description of reason for the portfolio:
If the bad debt reserve of accounts receivable is set aside according to general model of expected credit loss,
please refer to the disclosure method of other receivables to disclose relevant information on bad debt reserve:
□ Applicable √ Not applicable
Disclose by aging
Unit: RMB
Aging Balance at the end of the period
Within 1 year (inclusive) 181,988,009.55
1 to 2 years 7,557.36
2 to 3 years 144,629.21
Total 182,140,196.12
(2) Bad debt reserve that is set aside, recovered or transferred back in the reporting period
Provision of bad debt reserve of the reporting period:
Unit: RMB
Balance at the Amount of change in the reporting period
Balance at the
Type beginning of the Recovery or
Provision Write-off Others end of the period
period reversal
Accounts
1,399,993.66 365,315.94 1,765,309.60
receivable
Total 1,399,993.66 365,315.94 1,765,309.60
Wherein, the amount of recovered or transferred back bad debt reserve in the reporting period is important: None
(3) Accounts receivable actually written off in the reporting period: None
Description of write-offs of important accounts receivable: None
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C&S Paper Co., Ltd. Semi-annual Report 2021
Description on the write-offs of accounts receivables:
The Company did not have written-off accounts receivable in the reporting period.
(4) Top five debtors in closing balance of accounts receivable
Unit: RMB
Percentage in total balance of
Balance of accounts receivable Balance for bad debt reserve at
Name of institution accounts receivable at the end
at the end of the period the end of the period
of the period
1st 112,301,902.68 61.66%
2nd 12,935,492.71 7.10% 258,709.85
3rd 10,164,016.37 5.58% 305,546.90
4th 7,919,065.93 4.35% 220,220.10
5th 7,534,401.58 4.14%
Total 150,854,879.27 82.83%
(5) Accounts receivable derecognized due to transfer of financial assets
The Company has no accounts receivable derecognized due to the transfer of financial assets as at the end of the
reporting period.
(6) Amounts of assets and liabilities that are formed by the transfer and ongoing involvement of accounts
receivable
The Company has no amounts of assets and liabilities that are formed by the transfer and ongoing involvement of
accounts receivable as at the end of the reporting period.
Other description: None
2. Other receivables
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Other receivables 114,345,050.47 136,987,584.64
Total 114,345,050.47 136,987,584.64
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C&S Paper Co., Ltd. Semi-annual Report 2021
(1) Interest receivable
1) Classification of interest receivable: None
2) Significant overdue interest: None
3) Provision of bad debt reserve
□ Applicable √ Not applicable
(2) Dividends receivable
1) Classification of dividends receivable: None
2) Significant dividends receivable exceeding one year: None
3) Provision of bad debt reserve
□ Applicable √ Not applicable
Other description: None
(3) Other receivables
1) Classification of other receivables by nature
Unit: RMB
Book balance at the beginning of the
Nature Book balance at the end of the period
period
Margins and deposits 261,812.00 113,606.00
Current accounts 103,687,258.75 131,125,900.41
Reserve 950,342.06 639,681.19
Others 10,040,119.85 5,494,420.94
Total 114,939,532.66 137,373,608.54
2) Provision of bad debt reserve
Unit: RMB
Phase I Phase II Phase III
Bad debt provision Expected credit losses in Expected credit losses in Total
Expected credit loss
the whole duration (without the whole duration (with
in the next 12 months
credit impairment) credit impairment)
Balance as at January 1,
386,023.90 386,023.90
2021
Balance as at January 1, —— —— —— ——
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C&S Paper Co., Ltd. Semi-annual Report 2021
2021 in the reporting
period
Provision in the reporting
208,458.29 208,458.29
period
Balance as at June 30,
594,482.19 594,482.19
2021
Description of changes in the book balance where there are significant changes in provision for the current period
□ Applicable √ Not applicable
Disclose by aging
Unit: RMB
Aging Balance at the end of the period
Within 1 year (inclusive) 114,903,178.61
1 to 2 years 28,000.00
Over 3 years 8,354.05
4 to 5 years 8,354.05
Total 114,939,532.66
3) Bad debt reserve that is set aside, recovered or transferred back in the reporting period
Provision of bad debt reserve of the reporting period:
Unit: RMB
Balance at the Amount of change in the reporting period
Balance at the
Type beginning of the Recovery or
Provision Write-off Others end of the period
period reversal
Other receivables 386,023.90 208,458.29 594,482.19
Total 386,023.90 208,458.29 594,482.19
The Company did not have other receivables that were not written off in the reporting period.
Where the amount of recovered or reversed bad debt reserve in the reporting period is important: None
4) Other receivables actually written off in the reporting period: None
Description of write-offs of important other receivables: None
Description on the write-offs of other receivables: None
5) Top five debtors in closing balance of other accounts receivable
Unit: RMB
Percentage in total
Nature of the Balance at the end Balance of bad debt
Name of institution Aging balance of other
amount of the period reserve at the end of
receivables at the end
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C&S Paper Co., Ltd. Semi-annual Report 2021
of the period the period
1st Current accounts 103,243,400.98 Within 1 year 89.82%
2nd Current accounts 9,460,860.30 Within 1 year 8.23% 473,043.02
3rd Current accounts 163,112.43 Within 1 year 0.14% 8,155.62
4th Current accounts 88,661.21 Within 1 year 0.08%
5th Current accounts 50,000.00 Within 1 year 0.04% 2,500.00
Total -- 113,006,034.92 -- 98.31% 483,698.64
6) Receivables involving government grants: None
7) Other receivables derecognized due to the transfer of financial assets: None
8) Amount of assets and liabilities that are formed by the transfer and ongoing involvement of other
receivables: None
3. Long-term equity investment
Unit: RMB
Balance at the end of the period Balance at the beginning of the period
Item Impairment Impairment
Book balance Book value Book balance Book value
provision provision
Investment in
1,939,122,205.28 1,939,122,205.28 1,928,113,219.50 1,928,113,219.50
subsidiaries
Total 1,939,122,205.28 1,939,122,205.28 1,928,113,219.50 1,928,113,219.50
(1) Investment in subsidiaries
Unit: RMB
Opening Increase/decrease in the period Closing balance
Closing balance
Investee balance (book Increase in Decrease in Impairment of impairment
Others (book value)
value) investment investment Provision provision
Zhongshan
Zhongshun
94,817,296.68 1,159,775.82 95,977,072.50
Trading Co.,
Ltd.
C&S (Sichuan) 173,385,439.9
1,761,963.00 175,147,402.98
Paper Co., Ltd. 8
Zhejiang
Zhongshun 56,524,520.15 802,495.02 57,327,015.17
Paper Co., Ltd.
C&S
(Zhongshan) 12,683,100.00 12,683,100.00
Paper Co., Ltd.
Jiangmen
698,614,821.4
Zhongshun 340,178.52 698,954,999.99
7
Paper Co., Ltd.
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C&S Paper Co., Ltd. Semi-annual Report 2021
C&S (Hubei) 196,016,245.1
951,367.92 196,967,613.05
Paper Co., Ltd. 3
C&S (Yunfu) 657,837,465.4
791,191.08 658,628,656.50
Paper Co., Ltd. 2
Yunfu Hengtai
Trading Co., 30,200,274.51 30,200,274.51
Ltd.
Chengdu
Zhongshun 627,524.58 21,634.32 649,158.90
Paper Co., Ltd.
Xiaogan C&S
Trading Co., 311,467.66 119,344.02 430,811.68
Ltd.
Huicong Paper
5,926.18 1,086.90 7,013.08
Co., Ltd.
Hangzhou Jie
Rou Trading 104,095.00 11,326.26 115,421.26
Co., Ltd.
Zhong Shun
International 785,042.74 48,622.92 833,665.66
Co., Ltd.
Sun Daily
Necessities Co., 200,000.00 200,000.00
Ltd.
C&S (Dazhou)
6,000,000.00 6,000,000.00
Paper Co., Ltd.
C&S (Jiangsu)
5,000,000.00 5,000,000.00
Paper Co., Ltd.
1,928,113,219. 1,939,122,205.
Total 5,000,000.00 6,008,985.78
50 28
(2) Investment in associates and joint ventures: None
(3) Other description: None
4. Operating income and operating cost
Unit: RMB
Incurred in the current period Incurred in the prior period
Item
Income Cost Income Cost
Principal business 506,782,115.67 414,158,999.43 493,288,414.96 377,715,003.73
Other businesses 409,284,226.79 374,640,370.60 360,602,849.07 334,899,974.01
Total 916,066,342.46 788,799,370.03 853,891,264.03 712,614,977.74
Information related to income:
Unit: RMB
Contract classification Branch 1 Branch 2 Total
By product type 916,066,342.46 916,066,342.46
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C&S Paper Co., Ltd. Semi-annual Report 2021
Household paper 502,779,375.26 502,779,375.26
Personal care 4,002,740.41 4,002,740.41
Others 409,284,226.79 409,284,226.79
By operating region 916,066,342.46 916,066,342.46
Domestic 916,066,342.46 916,066,342.46
Total 916,066,342.46 916,066,342.46
Information related to performance obligation: None
Information related to the transaction price apportioned to the remaining performance obligation:
The amount of income corresponding to the obligations of contract performance with an executed contract that is
not performed or fully performed at the end of the reporting period is RMB1,063,051.14, of which the income of
RMB1,063,051.14 is expected to be confirmed as income in the year of 2021.
Other description: None
5. Return on investment
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Income from long-term equity-based
investment accounted for using the cost 482,375,000.00 140,000,000.00
method
Others 329,072.79 2,109,515.77
Total 482,704,072.79 142,109,515.77
6. Others: None
XVIII. Supplementary Information
1. List of non-recurring profits and losses of the reporting period
√ Applicable □ Not applicable
Unit: RMB
Item Amount Description
Profits/losses from the disposal of non-
-887,044.27
current asset
Governmental grants reckoned into current
profits/losses (not including grants enjoyed
in quota or ration according to national 10,556,600.31
standards, which are closely relevant to the
company’s business)
Profits/losses from assets entrusted to others Returns on principal-protected wealth
358,473.15
for investment or management management products at maturity and
225
C&S Paper Co., Ltd. Semi-annual Report 2021
reverse repo of treasury bonds
Other non-operating income and expenses
-187,907.30
except for the aforementioned items
Less: Influence of income tax 1,667,039.43
Total 8,173,082.46 --
Reason shall be provided if the company defines non-recurring profit and loss items as defined or listed in the No.
1 Explanatory Announcement on Information Disclosure for Companies Offering their Securities to the Public—
Non-recurring Profit and Loss as recurring profit and loss items.
□ Applicable √ Not applicable
2. Return on net assets and earnings per share
Earnings per share
Profit in the reporting period Weighted average return on net assets Basic earnings per share Diluted earnings per
(RMB/share) share (RMB/share)
Net profit attributable to the
ordinary shareholders of the 7.98% 0.3140 0.3109
Company
Net profit attributable to the
ordinary shareholders of the
7.82% 0.3077 0.3046
Company after excluding non-
recurring profit and loss
3. Difference in accounting data under domestic and international accounting standards
(1) Net profit and net asset differences under International Financial Reporting Standards (IFRS) and
Chinese Accounting Standards (CAS)
□ Applicable √ Not applicable
(2) Net profit and net asset differences under foreign accounting standards and Chinese Accounting
Standards (CAS)
□ Applicable √ Not applicable
(3) Explanation of reasons for the differences between accounting data disclosed under domestic and
overseas accounting standards. If differences are adjusted based on data audited by overseas audit
institutions, the name of the institution should be noted.
4. Others
If there are any ambiguities, the Chinese version shall prevail.
226
