C&S Paper Co., Ltd. 2021 Annual Report
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 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 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 annual 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 Section III Discussion and Analysis of the Management and Section XI Future
Development Prospects of the Company. Investors are advised to pay attention to the relevant
contents.
The Board meeting has deliberated and approved the following profit distribution proposal:
distribute a cash dividend of RMB 1.0 (tax included) for every 10 shares to all shareholders
and issue 0 bonus shares (tax included) based on the Company’s total share capital minus the
number of repurchased shares as of the equity registration date of the Company’s
implementation of the profit distribution plan; meanwhile, no capital reserve will be
converted into share capital.
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C&S Paper Co., Ltd. 2021 Annual Report
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 .................................................................. 11
Section IV Corporate Governance ..................................................................................................... 47
Section V Environmental and Social Responsibilities ....................................................................... 89
Section VI Significant Events ............................................................................................................ 97
Section VII Changes in Shareholding and Information of Shareholders ......................................... 123
Section VIII Particulars of Preference Shares .................................................................................. 135
Section IX Corporate Bonds ............................................................................................................ 136
Section X Financial Report .............................................................................................................. 137
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C&S Paper Co., Ltd. 2021 Annual Report
Documents Available for Inspection
1. The 2021 Annual Report affixed with the signature of the Company’s Legal Representative
2. Financial statements affixed with official stamps and the signatures of the Company’s Legal Representative, the
person in charge of accounting, and the person in charge of accounting department of the Company
3. Original of the audit report affixed with the stamp of the accounting firm as well as stamps and signatures of the
certified public accountants
4. 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
5. Place for document inspection: Office of the Board of Directors
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C&S Paper Co., Ltd. 2021 Annual Report
Terms and 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.
Jiangsu C&S C&S (Jiangsu) Paper Co., Ltd.
Dolemi Dolemi Sanitary Products Co., Ltd.
Luzhou Dolemi Luzhou Dolemi Sanitary Products Co., Ltd.
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C&S Paper Co., Ltd. 2021 Annual Report
Mianyang Dolemi Mianyang Dolemi Sanitary Products Co., Ltd.
Dazhou Dolemi Dazhou Dolemi Sanitary Products Co., Ltd.
Guiyang Dolemi Guiyang Dolemi Sanitary Products Co., Ltd.
Zhengzhou Dolemi Zhengzhou Dolemi Sanitary Products Co., Ltd.
Xi’an Dolemi Xi’an Dolemi Sanitary Products Co., Ltd.
Zhanjiang Dolemi Zhanjiang Dolemi Sanitary Products Co., Ltd.
Yunnan Dolemi Yunnan Dolemi Trading Co., Ltd.
Bloomage Jierou Beijing Bloomage Jierou Biotechnology Co., Ltd.
Mazars Mazars Certified Public Accountants (LLP)
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C&S Paper Co., Ltd. 2021 Annual Report
Section II Company Profile and Key Financial Indicators
I. Company Information
Stock abbreviation ZSJR 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
中顺洁柔
of the Company
English name of the Company
C&S Paper Co., Ltd.
(if any)
Abbreviation of English name
C&S
of the company (if any)
Legal Representative of the
Liu Peng
Company
No. 1 Longcheng Road, Dongsheng Town, Zhongshan City; an additional business premise is
Registered address added: No. 136 Caihong Avenue, West District, Zhongshan City (F3, F4 F5 and stairwells of
Building B1) (one business license and multiple business premises)
Postal code of registered
528414
address
In order to optimize information of the specific registered address, the Company’s registered
Historical changes of the
address has been changed from “Shenglong Village, Tanbei, Dongsheng Town, Zhongshan City” to
Company’s registered address
“No. 1 Longcheng Road, Dongsheng Town, Zhongshan City”; the actual address is not changed.
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
II. Contact Persons and Contact Methods
Sectary to the Board Representative of securities affairs
Name Zhang Haijun Zhang Xia
No. 136 Caihong Avenue, West District, No. 136 Caihong Avenue, West District,
Address
Zhongshan City Zhongshan City
Tel 0760-87885678 0760-87885678
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C&S Paper Co., Ltd. 2021 Annual Report
Fax 0760-87885669 0760-87885669
Email dsh@zsjr.com dsh@zsjr.com
III. Information Disclosure and Location for Inspection of Documents
Websites on which the annual report is published as
Shenzhen Stock Exchange (http://www.szse.cn)
required by the stock exchange
China Securities Journal, Shanghai Securities News, Securities Times,
Media on which the annual report is published
Securities Daily and http://www.cninfo.com.cn
Location for inspection of the annual report Office of the Board of Directors
IV. Historical changes of the Company’s Registration Information
Organization Code 914420007123239244
The Company’s business scope was changed FROM “production and sales of
high-class household paper products (excluding printing process); products being sold
both at home and abroad” at the listing of the Company in 2010.” TO “General items:
manufacture of paper products; sales of paper products; Internet sales (excluding the
sales of commodities requiring a permit); sales of daily 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; sales of plastic products; sales of metal products; sales of rubber products;
manufacture of daily-sue ceramic products; wholesale of kitchen utensils and daily
groceries; R&D of kitchen utensils and daily groceries; retail of kitchen utensils and
daily groceries; sales of Class I medical devices; manufacture of Class I medical
devices; sales of Class II medical devices; sales of disinfectants (excluding hazardous
Changes in the Company’s main
chemicals). (The company may carry out business operations independently according
businesses since listing (if any)
to the law based on the business license, except for items that must be licensed
according to the law) Licensed items: import and export of goods or technologies
(excluding the import and export of goods and technologies prohibited by the State or
involving administrative approval); manufacture of Class II medical devices; operation
of Class III medical devices; manufacture of Class III medical devices. (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 to the approval document or the permit issued by competent department) (Such
items as involved in the business scope of the Company are: import and export of
goods; import and export of technologies; operation of Class II and Class III medical
devices; manufacture of Class II and Class III medical devices.) (The above items do
not involve special management measures for the access of foreign investment.)”
Changes of controlling shareholder (if any) None
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C&S Paper Co., Ltd. 2021 Annual Report
V. Other Relevant Information
Accounting firm engaged by the Company
Name Mazars Certified Public Accountants (LLP)
Office address Zhongshen Zhonghuan Building, No. 169 Donghu Road, Wuchang District, Wuhan
Name of signing accountants Wang Bing, Pan Guiquan
Sponsor engaged by the Company to fulfill continuous supervision obligation during the reporting period
□ Applicable √ Not applicable
Financial advisor engaged by the Company to fulfill continuous supervision obligation during the reporting period
□ Applicable √ Not applicable
VI. Main Accounting Data and Financial Indicators
Whether the Company needs to perform retrospective adjustment or restatement of accounting data for previous years
□ Yes √ No
2021 2020 Changes over last year 2019
Operating income (RMB) 9,149,870,464.80 7,823,528,416.32 16.95% 6,634,914,352.68
Net profit attributable to
shareholders of the listed company 581,097,222.93 905,889,081.41 -35.85% 603,832,650.83
(RMB)
Net profit attributable to
shareholders of the listed company
567,912,188.04 891,552,986.81 -36.30% 588,728,468.59
after deducting non-recurring profit
and loss (RMB)
Net cash flow from operating
1,319,579,606.83 828,200,862.25 59.33% 1,360,374,901.86
activities (RMB)
Basic earnings per share
0.45 0.70 -35.71% 0.47
(RMB/share)
Diluted earnings per share
0.44 0.69 -36.23% 0.46
(RMB/share)
Weighted average return on net
11.82% 19.86% -8.04% 16.42%
assets
Changes over end of
End of 2021 End of 2020 End of 2019
last year
Total assets (RMB) 7,523,281,973.84 7,478,439,747.77 0.60% 6,026,271,823.64
Net assets attributable to
shareholders of the listed company 4,903,552,661.58 5,042,146,076.42 -2.75% 4,077,004,459.23
(RMB)
The lower of the net profits before and after deducting the non-recurring profit and loss in the most recent three accounting years is
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C&S Paper Co., Ltd. 2021 Annual Report
all negative, and the audit report of the most recent year shows that the Company’s ability to continue operations is uncertain.
□ Yes √ No
The lower of the net profits before and after deducting the non-recurring profit and loss is negative.
□ Yes √ No
VII. 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
VIII. Major Financial Indicators by Quarter
Unit: RMB
Q1 Q2 Q3 Q4
Operating income 2,102,126,213.63 2,145,515,622.75 2,027,210,890.87 2,875,017,737.55
Net profit attributable to
271,122,802.99 136,038,514.16 77,263,562.65 96,672,343.13
shareholders of the listed company
Net profit attributable to
shareholders of the listed company
267,298,568.37 131,689,666.32 77,203,406.36 91,720,546.99
after deducting non-recurring profit
and loss
Net cash flow from operating
334,905,166.23 402,960,621.96 141,257,300.73 440,456,517.91
activities
Whether there are significant differences between the above-mentioned financial indicators or its total number and the relevant
financial indicators disclosed in the Company’s quarterly reports and semi-annual report
□ Yes √ No
IX. Non-recurring Items and Amounts
√ Applicable □ Not applicable
Unit: RMB
Item Amount in 2021 Amount in 2020 Amount in 2019 Description
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C&S Paper Co., Ltd. 2021 Annual Report
Profits/losses from the disposal of
non-current asset (including the write-off -2,054,550.41 -2,980,604.57 -2,002,045.02
that accrued for impairment of assets)
Governmental grants reckoned into current
profits/losses (not including grants enjoyed
in quota or ration according to national 22,379,246.83 28,533,162.96 18,422,795.06
standards, which are closely relevant to the
company’s normal business)
Returns on
principal-protected
Profits/losses from assets entrusted to others wealth management
365,973.72 3,868,134.28 333,745.61
for investment or management products at maturity
and reverse repo of
treasury bonds
Other non-operating income and expenses
-4,941,142.49 -13,442,144.41 1,320,617.95
except for the aforementioned items
Less: Influence of income tax 2,564,492.76 1,642,453.66 2,970,931.36
Total 13,185,034.89 14,336,094.60 15,104,182.24 --
Details of other profit and loss items that meet the definition of non-recurring profit and loss:
□ Applicable √ Not applicable
The Company has no other profit and loss items that meet the definition of non-recurring profit and loss.
Descriptions where the Company defines any non-recurring profit and loss items 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
□ Applicable √ Not applicable
The Company did not define any non-recurring profit and loss items 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. 2021 Annual Report
Section III Discussion and Analysis of the Management
I. Status of the Industry in Which the Company Is Located during the Reporting Period
(I) Analysis of industry status quo
Under the influence of the pandemic, the economy at large encountered great downward pressure in 2021.
Meanwhile, the household paper industry faced a certain degree of operating pressure due to multiple factors such
as rising raw material prices, fierce market competition, and unsmooth global supply chain and power
cuts/production restrictions in some regions. The excess capacity formed by the rapid growth in recent years and
the large production capacity base of the entire industry have slowed down its pace of growth. Despite so, the
growth rate in China will still surpass the global average.
(II) Development trends of the industry
1. Elimination of outdated production capacity will give more market opportunities to first-tier enterprises.
Competent government departments at all levels have strengthened supervision, administration and enforcement
of the household paper industry and promulgated a series of regulations and policies, including the Development
Policy of the Paper Industry, the Notice of the State Council on Printing and Distributing the Comprehensive
Work Plan for Energy Conservation and Emission Reduction, the Discharge Standard of Water Pollutants for the
Pulp and Water Industry, the Norm of Water Intake for Paper Products, The Twelfth Five-Year Plan for Paper
Industry Development, and the Catalogs for the Management of Imported Wastes. Companies with unreasonable
economic scale, high energy and water consumption or not up to discharge standards were shut down or ordered
for rectification within a time frame. Thus, a large number of backward production capacities have been
eliminated. With increasingly stringent environmental protection polices, backward capacities and SMEs with
poor anti-risk capabilities will be phased out at an accelerated speed, and the industry concentration level is
expected to further increase.
2. Operating models are continually innovated and product structures are constantly optimized. With regard to the
marketing of the household paper industry, except for traditional distributors and modern supermarkets,
e-commerce channels are continuously expanded while their shares are rapidly growing. Some leading companies
have been promoting social media marketing such as WeChat public accounts, Weibo, and live webcasting, and
have increased inputs in the development of e-commerce channels. At the same time, in order to cater to the
rapidly growing demands of consumers, companies continue to carry out product innovations, upgrade product
specifications and packaging designs, optimize product structures, and develop new products by capturing in time
changes in the consumption concepts of consumers. Diversified operating models emerge in the industry and
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C&S Paper Co., Ltd. 2021 Annual Report
product structures are further optimized.
3. Efforts are stepped up for equipment upgrading and product R&D. People’s demand for household paper is
bound to rise along with the improvement of living standards, requiring constant product capacity expansion in
the household paper industry. As such, it is inevitable for production companies of the industry to choose
large-scale and automated production equipment, which can also meet the demands for low energy consumption,
low water consumption, and low pulp consumption as specified in the overall requirements of the State’s
industrial policies for energy conservation, consumption reduction and pollution reduction. In recent years,
imports of household paper equipment have been trending up in China, with a focus on the imports of body paper
machines. Meanwhile, some large-scale domestic equipment is also constantly optimized and improved. It is
foreseeable that large scale and automation of production equipment will be the development direction of the
household paper industry in the future.
4. Competitiveness of China’s household paper production companies in the international market will be further
intensified. With the rapid development of the household paper industry in China, local enterprises occupy most of
the domestic market shares. On the basis of meeting domestic demands, household paper produced in China has
been exported to a range of countries and regions around the world with certain competitive advantages. In the
future, the competitiveness of Chinese household paper production enterprises in the international market will be
steadily enhanced.
II. Principal Businesses of the Company during the Reporting Period
Mr. Deng Yingzhong, founder of the Company, initiated his entrepreneurial process in 1979. Starting from
intensive paper processing, the Company has developed into a diversified group company integrating R&D,
production and sales after forty plus years of striving. It is among the first batch of household paper companies
listed on China A-shares. The Company, with an adherence to the business philosophy of “building product,
enterprise and professional brands”, practices the “All We Care Is You” value proposition and continues to provide
consumers with healthy, safe, environmental-friendly, comfortable and convenient products and services.
Currently the Company features three major brands, namely C&S, Sun and Dolemi. Main products include toilet
paper, facial tissues, paper handkerchiefs, napkins, wet wipes, kitchen tissues, personal care products (sanitary
pads), baby diapers, facial towels, etc. Specifics are given in the following:
(I) Household paper
Face series: Face series are soft, delicate and pliable. Being wettable, the products can be used as face towels.
Among them, the oil painting series combine quality and artistry and are therefore praised as “artwork of paper
tissues”.
Lotion series: Specially developed for female and infant consumers, the products contain moisturizing cream.
With selected high-quality 100% virgin wood pulp and quality moisturizing cream, the paper is soft, delicate and
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C&S Paper Co., Ltd. 2021 Annual Report
smooth. It is the professional moisturizing facial tissue brand trusted by consumers.
Natural Wood series: Made of 100% imported virgin wood pulp, the products are soft and pliable and meet the EU
and U.S. requirements for food contact material testing. Consumers can feel rest assured for its high quality.
C&S Jin Zun series: The products are made from 100% imported raw wood pulp and the paper is thick, pliable,
and reliable.
Sun series: The products use 100% virgin wood pulp. Targeting at the youth market, the brand serves as a
powerful supplement to the Company’s primary brand “C&S”.
Wipe series: The Company offers a variety of wet wipe products catering to different user groups (including but
not limited to adults, children and infants) and different purposes (including but not limited to c leasing wipes, wet
toilet paper and wet wipes for equipment use). From basic skin cleansing to advanced care, the series can meet
increasingly segmented demands and provide a better experience to consumers.
Kitchen towel series: Using 100% virgin wood pulp, the kitchen paper towels boast stronger oil-absorption and
water-absorption power and are up to the EU and U.S. Requirements for food contact material testing, thereby
better satisfying the multi-functional wiping needs of households. Meanwhile, the kitchen wet wipes boast
expedite decontamination power without hurting hands.
(II) Personal care products
The Company streamlined the personal care product business and anchored a new track for business development.
It is committed to offering healthy life solutions with products + services for the whole family and all life
scenarios. Revolving around the “Healthy Life” brand matrix, the Company hopes to re-create brand values. In
addition, the Company has built self-operated online sales channels for care products based on e-commerce
platforms to achieve omni retail.
(III) Quality health products
Cleansing towel series: To address user pain points, the products make constant innovations in technology,
materials and craftsmanship and select 100% plant cellulose fibers. The thicker 100g Cleaning Towel series have
been introduced, which are committed to offering the optimal experience to consumers.
Business travel series: With the change of lifestyle, the Company understands that people are increasingly
concerned about the hygiene problem during business travels. In view of this, it has developed the business travel
series such as disposable compressed towels, rinse-free antibacterial hand sanitizers, alcohol sanitary pads, etc.
These products are easy to carry, clean and hygienic and can guard the health of consumers anytime, anywhere.
Among them, disposable compressed towels, disposable bath towels, etc. are made of plant fibers that are natural,
environmental friendly and degradable. They really make travel easy.
Household series: The kitchen towels adopt advanced ultrasonic non-adhesive composite technology and
double-sided texture design, with stronger water and oil absorption. With an ultra-high volume of 140 g/m2, the
products are strong, tough, scrub-resistant, and not easy to flocculate and deform. In addition, the products are up
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C&S Paper Co., Ltd. 2021 Annual Report
to EU and U.S. requirements for food contact material testing.
Mask series: Since the outbreak of the pandemic in 2020, in response to the call of the government, the Company
started to produce masks to meet the demands for anti-pandemic materials. Its medical surgical masks feature
“efficient filtration, low breathing resistance and comfortable wearing”. In the future, C&S will continue to escort
the breathing health of consumers.
(IV) Commercial channel products
In addition to home use, the commercial channel products target at wider use scenarios such as office buildings,
government departments, enterprises and institutions, factories, airports, hotels, restaurants, entertainment venues,
department stores, etc. We offer a full range of cleansing and sanitation solutions and may customize products and
services according to customer needs.
The competition in China’s household paper industry is still fierce and industry concentration will be further
strengthened. With enhanced 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 as well as 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 the market. In addition, with an
adherence to the value concept of “All We Care Is 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 improving product reputation among consumes and consolidating brand awareness.
III. 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 with
products available at all channels and both at home and abroad. In addition, it actively taps overseas markets
including Southeast Asia, North Asia, Australia, the Middle East, and North America.
2. Constantly optimized product structure and continuously improved product competitiveness
The Company boasts three major brands, namely C&S, Sun and Dolemi. Main products include paper rolls,
coreless rolls, facial tissues, tissue handkerchiefs, wipes (including wet toilet paper), personal care products, baby
diapers, face towels, kitchen towels, etc.
The Company continues to optimize product structure and increase the sales proportion of high-end, high-margin
products and non-roll categories. Efforts have been stepped up for the terminal sales of the Oil Painting, Face,
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C&S Paper Co., Ltd. 2021 Annual Report
Lotion and other high-end, high-margin series. Precise brand marketing strategy combined with multi-channel
sales layout will help improve the distribution and penetration of high-end, high-margin products, drive the
growth of their shares, and hence steadily improve the profit margin and profitability of products.
In the context of COVID-19, consumers become increasingly concerned of health protection, which has driven
their differentiated demands for high-end tissue paper. In view of this, C&S has grasped the changing trend of the
market and precisely developed alcohol wet wipes, sanitary wipes, facial cleansing towel, compressed towel,
disposable bath towel, mouthwash, mask and other non-traditional dry wipe products. In addition, high-end,
high-margin non-traditional dry wipes have been positioned as a strategic category that will be prioritized in the
future.
3. Professional and effective management team
The R&D, production, procurement, quality control, marketing and sales teams have successively introduced
excellent professionals since 2014. At present, the Company boasts the most outstanding R&D, production,
branding and marketing teams in the industry. As such, its new product R&D, product quality, branding, sales and
marketing have been effectively solidified. Most of the mid-level managers of the marketing team are core,
backbone employees who have served in the Company for more than five years, with high sense of loyalty and
strong professional competence. They can lead sales teams to work hard according to the strategic goals of the
Company and promote the healthy and stable development of various business indicators. 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 with reasonable layout based on its keen
and strategic insights. It has guaranteed its profitability by expanding its channels from a single dealer channel in
2015 to five channels at present, i.e. GT (General Trade), KA (Key Account), AFH (Away From Home), EC
(E-Commerce), and RC (Retail Consumer). 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.
Additionally, 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 strengthened the
corresponding supply chain system, and intensified its routine operation management. At present, it has cemented
long-term strategic cooperation with mainstream well-known platforms. The Company has strengthened the
layout of emerging business models such as new retail, O2O and content marketing, while efforts have been
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C&S Paper Co., Ltd. 2021 Annual Report
stepped up for livestream shopping and community group buying. In addition, it has developed an AFH service
team for AFH channels and customer bases to match the growing AFH market. In response to the market changes
of modern KA channels, the Company actively adjusts strategies and strives to improve efficiency and
effectiveness of resource inputs.
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,
and Central China, through its subsidiaries including Jiangmen C&S, Yunfu C&S, Sichuan C&S, Zhejiang C&S,
Hubei C&S, and Tangshan Subsidiary. 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 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 that are of better
quality, more comfortable and more aligned with their individual needs. Products of the Company have extended
from household paper to cross-category household daily necessities including cleansing towel series, sanitary
wipes, baby diapers, etc. The Company’s speed of bringing forth new products is at the forefront of the industry.
8. Advanced production equipment
The Company drives development with technological progress and has introduced advanced papermaking
equipment and processing equipment from Austria, Germany, Italy, Japan and other countries. The diversified
equipment can produce a variety of products that can meet the differentiated needs of consumers. As a first-tier
enterprise, the Company occupies a leading position in the industry when it comes to the scale and automation of
production equipment. Advanced technology and highly automated equipment have strengthened the Company’s
16
C&S Paper Co., Ltd. 2021 Annual Report
efficiency, further satisfied 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. The Company
actively fulfills its corporate social responsibilities and actively responds to China’s strategic goals of “carbon
peaking” in 2030 and “carbon neutrality” in 2060 by fully supporting and enforcing various environmental
protection requirements of the government. In the future, the advantages and anti-risk capabilities of C&S in
energy conservation and emission reduction will be further highlighted.
IV. Analysis of Principal Businesses
1. Overview
The situation of pandemic prevention and control was still challenging while international politics and economy
remained complex during 2021. Under the influence of factors such as continual rise in material and energy prices,
increasingly intensified market competition, consumers’ more sensitivity to prices and more cautious consumption
attitude, the household paper industry faces certain pressure and challenges in the short run. The management of
the Company actively responds to such a severe situation through a series of effective actions like continued
optimization of category structure, product innovation and upgrading, brand building and intensive channel
cultivation, to promote the stable growth of sales. In 2021, the Company registered an operating income of
RMB9.150 billion, up by 16.95% over the previous year. Lower-than-expected sales prices of major products and
rising material and energy prices led to the increase of production costs. Meanwhile, the Company actively
expanded and developed channels and increased strategic investment in brand promotion. As a result, the
profitability has declined. The net profit attributable to shareholders of the Company was RMB581 million in
2021, a year-on-year decrease of 35.85%.
(1) Continuously optimizing category structure and building channels in a deep and meticulous manner to
promote steady sales growth
During the reporting period, the Company continued to develop new products through innovations while adjusting
the structure of existing categories. With a focus on brand building, C&S has accelerated the introduction and
improved coverage of high-margin products, which has increased the sales shares of high-end, high-margin
products and non-roll paper categories. Moreover, in order to adapt to changes in the consumption patterns of
consumers, while ensuring the smooth operation of other channels, C&S has strengthened the layout and
17
C&S Paper Co., Ltd. 2021 Annual Report
development of new retail channels such as e-commerce and community group buying. Efforts have been stepped
up in the construction of online distribution network and the upgrading of online operation and management
system. The Company actively embraces livestream shopping and community group buying and explores more
effective ways of traffic attraction. All these have enabled better market performances of high-margin and
innovative products.
(2) Keeping up with new trends of consumption and establishing a standardized brand matrix through
brand upgrading
In 2021, the Company optimized its three business segments of household paper, personal care products and
quality health products around the three scenarios of household care, personal care and travel care. In the
household paper sector, driven by the dual brands of C&S and Sun, the Company continues to strengthen its
high-end and young-oriented features and consolidate the influence of the parent brand on the sub-brand.
Diversified professionals with rich experience in paper products and in beauty and skin care categories have been
introduced, while the operation team for the Sun brand was re-organized with independent accounting, flat
operation and flexible innovation. A clearer product positioning and hierarchical sequence have been defined after
sorting out existing products, to create a more competitive product matrix. In addition, the Company also
improved the high-end product line, launched a new brand strategy and effectively integrated resources. All these
efforts have facilitated the quality development of the Company and its brands.
(3) Enhance product competitiveness with innovation and upgrading
Product quality is always put at the forefront of development. The Company boasts a complete product
development system as well as strong independent R&D capabilities and excellent product formula technologies.
In 2021, in line with market developments and consumers’ increasingly diversified product needs, the Company
initiated innovative product development in household paper, quality health products and other business sectors
for different usage scenarios and user groups. Efforts have been stepped up in the construction of internal R&D
teams and cooperation with external scientific research institutions. Product matrix and sequence in various
sectors were upgraded and optimized, with a focus on improving product quality and user experience. Design and
innovation iterations have better satisfied consumer needs which are well received by consumers. This further
increases user stickiness and consolidates product competitiveness.
(4) Improving organizational structure and building a talent development system to stimulate the vitality of
corporate development
2021 is an important year for the Company’s reform and strategic development. Talent team building is of crucial
importance to corporate development. Valuing and respecting employees and giving full play to their talents have
been an eternal theme of the Company in the course of development. As such, C&S further improved its
organizational structure, rank system and remuneration system and put in place diversified incentive mechanisms,
to ensure the sound and standardized operation and management of the Company on one hand and fully stimulate
18
C&S Paper Co., Ltd. 2021 Annual Report
the vitality of employees and teams on the other. The Company attaches great importance to the cultivation of
employees and always puts talent at the focal point of corporate development. Therefore, it constantly improves
the talent management and development system and offers fair development channels and diverse education and
training opportunities for employees. For this purpose, the Learning and Talent Development Center was officially
established. The Company will establish a comprehensive internal talent pool for all levels, formulate an efficient
talent echelon training mechanism and actively transform learning outcomes. All these will help build a future-
and learning-oriented team and activate the new engine of corporate development. A priority of the Company is
team cohesion and humanized care and management of employees. In order to enhance employees’ sense of
belonging and happiness, C&S has built simple and efficient communication channels and adopted a series of
measures.
(5) Successfully completing second phase unlocking/exercise of the stock incentive plan, thereby stimulating
employees’ enthusiasm for work
During the reporting period, the Company successfully completed the unlocking of first-grant and reserved
restricted shares in the second unlock period as well as the exercise of stock options in the second exercise period
under the 2018 Stock Option and Restricted Stock Incentive Plan. In this way employees could share the fruits of
corporate development, which is conducive to stimulating their continual enthusiasm for work, tapping the value
of all employees and laying a solid foundation for the long-term stable development of the Company.
(6) Fulfilling corporate social responsibilities by supporting each other and passing on love
As a national enterprise, C&S has never forgotten its original intention while forging ahead. The Company is
enthusiastic about charity and actively fulfills corporate social responsibilities. In 2021, C&S was actively
involved in pandemic prevention and control, flood relief, poverty alleviation, and other causes of promoting
social, economic and cultural development. In joint efforts with the China Charity Federation, Guangzhou Charity
Association, Zhongshan Charity Association and other charity organizations of various regions, the Company
donated cash and materials with a cumulative worth over RMB14 million. Wherein, facing the severe flood in
Zhengzhou and other regions in July 2021, the Company, in cooperation with several charity organizations
including the Red Cross Society of China Zhengzhou Branch, quickly donated disaster relief materials with a total
value of more than RMB2.5 million to disaster-stricken areas. As such, it has been awarded titles of “2021 Top
500 Chinese Corporate Philanthropists” and “2021 Top 500 Chinese Companies of Flood Relief Donations”. In
addition, the Company teamed up with the Chinese Dance Sport Federation and the China Ballroom Dance
Federation and organized the “C&S Cup” dance competition. Meanwhile, C&S and Shenzhen Media Foundation
jointly established the “Learning Fund” to actively promote the educational public welfare undertaking. Moreover,
the Company carried out in-depth cooperation with Zhongshan Women and Children’s Federation and jointly
established the “Women’s Home”, with a purpose of promoting the entrepreneurship of moms, conducting welfare
activities for children, caring for the health of women, and protecting the rights and interests of women and
children.
Item 2021 (RMB) 2020 (RMB) YoY changes (%) 2019 (RMB)
19
C&S Paper Co., Ltd. 2021 Annual Report
Operating income 9,149,870,464.80 7,823,528,416.32 16.95% 6,634,914,352.68
Operating cost 5,863,049,104.38 4,590,904,040.35 27.71% 4,005,421,052.70
Selling expenses 1,986,544,514.02 1,544,562,244.71 28.62% 1,369,553,843.95
Administrative expenses 341,144,204.30 364,914,344.30 -6.51% 294,516,937.35
Finance expenses -7,261,174.19 -18,001,546.24 59.66% 21,476,411.75
Net cash flow from operating 1,319,579,606.83 828,200,862.25 1,360,374,901.86
59.33%
activities
2. Operating income and cost
(1) Composition of operating income
Unit: RMB
2021 2020
Proportion in Proportion in YoY changes
Amount Amount
operating income operating income
Total operating
9,149,870,464.80 100% 7,823,528,416.32 100% 16.95%
income
By industry
Household paper 8,658,308,172.33 94.63% 7,499,908,172.64 95.86% 15.45%
Personal care 76,965,968.19 0.84% 100,000,774.38 1.28% -23.03%
Others 414,596,324.28 4.53% 223,619,469.30 2.86% 85.40%
By product
Finished products 8,713,110,024.38 95.23% 7,585,449,858.45 96.96% 14.87%
Semi-finished
22,164,116.14 0.24% 14,459,088.57 0.18% 53.29%
products
Others 414,596,324.28 4.53% 223,619,469.30 2.86% 85.40%
By region
Domestic 8,950,419,612.11 97.82% 7,652,670,691.06 97.82% 16.96%
Overseas 199,450,852.69 2.18% 170,857,725.26 2.18% 16.74%
By sales model
Traditional 4,391,370,600.48 47.99% 4,245,105,604.08 54.26% 3.45%
Non-traditional 4,343,903,540.04 47.48% 3,354,803,342.94 42.88% 29.48%
Others 414,596,324.28 4.53% 223,619,469.30 2.86% 85.40%
20
C&S Paper Co., Ltd. 2021 Annual Report
(2) Industries, products, regions or sales models 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 8,658,308,172.33 5,455,519,068.17 36.99% 15.45% 25.63% -5.11%
By product
Finished products 8,713,110,024.38 5,481,370,370.28 37.09% 14.87% 25.51% -5.34%
By region
Domestic 8,950,419,612.11 5,740,188,110.38 35.87% 16.96% 27.57% -5.33%
By sales model
Traditional 4,391,370,600.48 2,858,854,536.20 34.90% 3.45% 14.65% -6.36%
Non-traditional 4,343,903,540.04 2,642,267,718.22 39.17% 29.48% 40.11% -4.62%
Where the statistical standards for the Company’s principal business data were adjusted in the reporting period, principal business
data of the Company in the recent year adjusted as per statistical standards at the end of the reporting period
□ Applicable √ Not applicable
(3) Whether the Company’s goods sales income is greater than the labor service income
√ Yes □ No
Industry Item Unit 2021 2020 YoY changes
Sales volume “0000” boxes 14,758.23 11,691.68 26.23%
Household paper Production volume “0000” boxes 14,982.63 11,691.94 28.14%
Inventory “0000” boxes 977.36 882.65 10.73%
Reasons for YoY changes of relevant data over 30%
□ Applicable √ Not applicable
(4) Performance of major sales contracts and major procurement contracts already signed by the Company
as of the end of the reporting period
□ Applicable √ Not applicable
(5) Composition of operating costs
By industry and product
Unit: RMB
21
C&S Paper Co., Ltd. 2021 Annual Report
2021 2020
Industry Item Proportion in Proportion in YoY changes
Amount Amount
operating cost operating cost
Principal business
Household paper 5,455,519,068.17 93.05% 4,342,663,520.12 94.59% 25.63%
cost
Principal business
Personal care 45,603,186.25 0.78% 36,713,107.52 0.80% 24.21%
cost
Other business
Others 361,926,849.96 6.17% 211,527,412.71 4.61% 71.10%
cost
Unit: RMB
2021 2020
Product Item Proportion in Proportion in YoY changes
Amount Amount
operating cost operating cost
Principal business
Finished products 5,481,370,370.28 93.49% 4,367,115,588.55 95.13% 25.51%
cost
Semi-finished Principal business
19,751,884.14 0.34% 12,261,039.09 0.27% 61.09%
products cost
Other business
Others 361,926,849.96 6.17% 211,527,412.71 4.61% 71.10%
cost
Description: None
(6) Whether there are changes to the consolidated scope during the reporting period
√ Yes □ No
As of December 31, 2021, the Company has 28 subsidiaries that are included in the consolidated scope, as
detailed in “Note IX. Equities in Other Entities”. Compared with last year, ten subsidiaries have been newly added
into while one subsidiary has been deleted from the consolidated scope during the reporting period. For details,
see “Note VIII. Changes in Consolidated Scope”.
(7) Whether there are significant changes or adjustments to the Company’s businesses, products or services
during the reporting period
□ Applicable √ Not applicable
(8) Major customers and suppliers
Major customers of the Company
Total sales to the top five customers (RMB) 2,837,641,647.30
Proportion of sales to top five customers in total annual
31.01%
sales
22
C&S Paper Co., Ltd. 2021 Annual Report
Proportion of sales to related party among the top five
0.00%
customers in total annual sales
Information of the top five customers of the Company
No. Name of customer Sales amount (RMB) Proportion in total annual sales
1 1st 1,077,211,583.41 11.77%
2 2nd 760,468,402.80 8.31%
3 3rd 532,628,247.02 5.82%
4 4th 269,613,897.11 2.95%
5 5th 197,719,516.96 2.16%
Total -- 2,837,641,647.30 31.01%
Other description of major customers
√ Applicable □ Not applicable
There is no related party relationship between the top five customers and the Company.
Major suppliers of the Company
Total purchase amount from the top five suppliers (RMB) 2,394,581,210.24
Proportion of the total purchase amount from the top five
46.60%
suppliers in total annual purchase amount
Proportion of purchase amount from related parties
among the top five suppliers in total annual purchase 0.00%
amount
Information of the top five suppliers of the Company
Proportion in total annual purchase
No. Name of supplier Purchase amount (RMB)
amount
1 1st 1,075,003,945.68 20.92%
2 2nd 562,316,616.08 10.94%
3 3rd 341,035,034.55 6.64%
4 4th 217,354,596.68 4.23%
5 5th 198,871,017.25 3.87%
Total -- 2,394,581,210.24 46.60%
Other description of major suppliers
√ Applicable □ Not applicable
There is no related party relationship between the top five suppliers and the Company.
3. Expenses
Unit: RMB
2021 2020 YoY changes Description of significant changes
23
C&S Paper Co., Ltd. 2021 Annual Report
Selling expenses 1,986,544,514.02 1,544,562,244.71 28.62%
Administrative expenses 341,144,204.30 364,914,344.30 -6.51%
Financial expenses: This item recorded
an increase of RMB10,740,372.05 or
59.66% in the reporting period
Finance expenses -7,261,174.19 -18,001,546.24 59.66% compared with the same period in
2020, mainly owing to the increase in
exchange losses and gains during the
reporting period.
R&D expenses 211,964,212.18 190,298,633.61 11.39%
4. R&D investment
√ Applicable □ Not applicable
Name of main R&D Expected impact on the future
Project purpose Project progress Intended goals
project development of the Company
The natural wood kitchen
paper series have been
developed and launched. The
Use high-yield pulp to All performance indicators series advocate environmental
Development and
improve paper are up to design requirements protection and have enriched
launch of the
performance and Completed and better than national the kitchen paper category of
natural wood
advocate the concept of standards; new products are the Company. In addition, the
kitchen paper
environmental protection. unveiled. series have helped tap the
natural wood high-absorbent
paper towel markets in
overseas such as South Korea.
With the raging of the
The antibacterial series (tissue
pandemic, offer personal
handkerchiefs, soft-packaged
cleansing products to
and box-packaged facial
Development of consumers. The product
The antibacterial rate of the tissues, paper rolls and paper
antibacterial tissue can remain bacteriostatic
Completed tissue reaches 90%; new towels) have been developed,
paper and toilet and clean after wiping,
products are unveiled. which have enriched product
paper products while the discarded
categories and improved
objects are environmental
product competitiveness in
friendly and can inhibit
the context of the pandemic.
the growth of bacteria.
The oil painting mini tissue
Development of the Further improve product In progress handkerchiefs have become
water-in-oil tissue quality on the basis of the Progress within the Water locking + wettable one of the Company’s
handkerchief series oil painting series. planned timeline highest-end and best-selling
products.
24
C&S Paper Co., Ltd. 2021 Annual Report
Use shea butter and The Lotion series (portable
Prinsepia utilis Royle oil facial tissue and facial tissue
Improve the skin feeling of
Development of the in the Lotion series, to products) contain shea butter
Completed consumers and ensure stable
Lotion series add to the selling points and Prinsepia utilis Royle oil,
formulation compatibility.
of and upgrade the level which has improved product
of products. competitiveness.
Pursue green development
and fulfill corporate social
responsibilities. Use paper to
Replacing plastic Respond to the replace plastic and achieve
Obtain export orders and
packaging with “dual-carbon” policy and mass production and sales of
gradually promote such
paper packaging for meet the environmental Completed paper rolls, tissues, paper
replacement in the packaging
commercial channel protection requirements towels and napkins sold in
of other domestic products.
products for product export. commercial channels, to
improve product
competitiveness in the
international market.
Develop a face towel that
The 100g Cleansing Towel
uses pure plant fiber
series feature plant fiber and
Launch of the 100g while completely They are well liked by
cool diamond pattern. The
Cleansing Towel surpassing traditional Completed consumers with sales having
products are stylish with
series towels in terms of doubled.
strong cleansing effect but yet
performance and
soft.
experience.
Information on R&D personnel of the Company
2021 2020 Change ratio
Number of R&D personnel 409 397 3.02%
Proportion of R&D personnel 5.81% 6.00% -0.19%
Educational structure of R&D
—— —— ——
personnel
Bachelor 69 67 2.99%
Master 1 1 0.00%
Associate degree and lower 339 329 3.04%
Age structure of R&D
—— —— ——
personnel
Under 30 95 89 6.74%
30~ 40 190 193 -1.55%
Above 40 124 115 7.83%
R&D investment of the Company
25
C&S Paper Co., Ltd. 2021 Annual Report
2021 2020 Change ratio
Amount of R&D investment
211,964,212.18 190,298,633.61 11.39%
(RMB)
Proportion of R&D investment
2.32% 2.43% -0.11%
in total operating income
Amount of capitalized R&D
0.00 0.00 0.00%
investment (RMB)
Proportion of capitalized R&D
investment in total R&D 0.00% 0.00% 0.00%
investment
Reason for and impact of marked changes in the composition of the Company’s R&D personnel
□ Applicable √ Not applicable
Reason for marked changes in the proportion of R&D investment in total operating income over the last year
□ Applicable √ Not applicable
Reason for marked changes in the proportion of capitalized R&D investment and its reasonable explanation
□ Applicable √ Not applicable
5. Cash flow
Unit: RMB
Item 2021 2020 YoY changes
Sub-total of cash inflow from
9,097,936,828.93 7,802,290,765.25 16.61%
operating activities
Sub-total of cash outflow from
7,778,357,222.10 6,974,089,903.00 11.53%
operating activities
Net cash flow from operating
1,319,579,606.83 828,200,862.25 59.33%
activities
Sub-total of cash inflow from
61,466,670.02 179,801,840.88 -65.81%
investing activities
Sub-total of cash outflow from
708,619,852.14 561,677,417.02 26.16%
investing activities
Net cash flow from investing
-647,153,182.12 -381,875,576.14 -69.47%
activities
Sub-total of cash inflow from
222,066,759.33 411,994,677.00 -46.10%
financing activities
Sub-total of cash outflow from
1,141,254,963.40 481,103,146.23 137.22%
financing activities
Net cash flow from financing
-919,188,204.07 -69,108,469.23 -1230.07%
activities
26
C&S Paper Co., Ltd. 2021 Annual Report
Net increase in cash and cash
-252,236,460.02 374,037,282.75 -167.44%
equivalents
Major influencing factors for significant YoY changes in relevant data
√ Applicable □ Not applicable
1. Net cash flow from operating activities: This item recorded an increase of RMB491,378,744.58 or 59.33% in
the reporting period compared with 2020, mainly owing to the increase in sales revenue during the reporting
period.
2. Net cash flow from investing activities: This item recorded a decrease of RMB265,277,605.98 or 69.47% in the
reporting period compared with 2020, mainly owing to the decrease in the received principal of wealth
management products and the increase in payment for engineering equipment during the reporting period.
3. Net cash flow from financing activities: This item recorded a decrease of RMB850,079,734.84 or 1230.07% in
the reporting period compared with 2020, mainly owing to the decrease in cash received from borrowings and the
increase in repurchased shares during the reporting period.
Reason for significant differences between the net cash flow from operating activities and the net profit of the year during the
reporting period
□ Applicable √ Not applicable
V. Analysis of Non-principal Businesses
√ Applicable □ Not applicable
Unit: RMB
Is it
Proportion in total
Amount Explanation of reason consistently
profit
applied?
Returns on principal-protected wealth management
Investment income 365,973.72 0.05% products at maturity and reverse repo of treasury No
bonds
Profit and loss from
changes in fair 0.00%
value
Provision for impairment of inventories or fixed
Asset impairment -27,791,339.98 -4.16% No
assets
Non-operating Income from fine and compensation, others, and
3,810,360.34 0.57% No
income government grants
Non-operating
12,059,080.49 1.81% External donations and others No
expense
27
C&S Paper Co., Ltd. 2021 Annual Report
VI. Analysis of Assets and Liabilities
1. Significant changes in the composition of assets
Unit: RMB
End of 2021 Beginning of 2021
Proportion Proportion Proportio
Description of significant changes
Amount in total Amount in total n changes
assets assets
Monetary funds 875,052,493.12 11.63% 1,125,196,199.56 15.02% -3.39%
Accounts
1,177,831,399.28 15.66% 1,051,423,939.59 14.04% 1.62%
receivable
Contract assets 0.00% 0.00% 0.00%
Inventory 1,467,631,516.95 19.51% 1,661,274,495.32 22.18% -2.67%
Investment
33,138,481.74 0.44% 34,575,365.94 0.46% -0.02%
property
Long-term equity
0.00% 0.00% 0.00%
investment
Fixed assets 3,129,371,506.40 41.60% 2,792,587,302.21 37.28% 4.32%
Construction work in progress: This
item recorded a decrease of
RMB141,028,921.01 or 51.12% in the
reporting period compared with the
Construction
134,875,696.94 1.79% 275,904,617.95 3.68% -1.89% beginning of 2021, mainly owing to the
work in progress
fact that certain construction work in
progress reached the usable state and
was thereby transferred to fixed assets
during the reporting period.
Right-of-use
14,300,520.77 0.19% 12,852,715.53 0.17% 0.02%
assets
Short-term borrowings: This item
recorded a decrease of
RMB142,942,941.34 or 100.00% in the
Short-term
0.00% 142,942,941.34 1.91% -1.91% reporting period compared with the
borrowings
beginning of 2021, mainly owing to the
decrease in short-term loans from
banks during the reporting period.
Contract
164,360,443.34 2.18% 137,333,617.40 1.83% 0.35%
liabilities
Long-term 0.00% 0.00% 0.00%
28
C&S Paper Co., Ltd. 2021 Annual Report
borrowings
Lease liabilities: This item recorded an
increase of RMB2,523,891.53 or
31.20% in the reporting period
compared with the beginning of 2021,
Lease liabilities 5,565,928.14 0.07% 8,089,819.67 0.11% -0.04%
mainly owing to the increase in lease
liabilities that are reclassified as due
within one year that during the
reporting period.
High proportion of overseas assets
□ Applicable √ Not applicable
2. Assets and liabilities measured at fair value
□ Applicable √ Not applicable
3. Restriction of asset rights as at the end of the reporting period
Item December 31, 2021 Reason for restriction
Monetary funds (RMB) 77,254,817.42 Security deposits for issuing letter of credit and notes
Total (RMB) 77,254,817.42
VII. Analysis of Investment
1. Overview
√ Applicable □ Not applicable
Investment amount during the reporting Investment amount of previous year
Changes
period (RMB) (RMB)
708,619,852.14 561,677,417.02 26.16%
2. Major equity investment during the reporting period
□ Applicable √ Not applicable
3. Major non-equity investment during the reporting period
□ Applicable √ Not applicable
29
C&S Paper Co., Ltd. 2021 Annual Report
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
Unit: RMB10,000
Proporti
on of
the
investm
ent
Investm Amount Investm amount Actual
Amount
Whether ent Amount of ent at the profit or
Name of the Initial bought
Related related amount sold impairm amount end of loss
operator for investm Start in
relations party Type End date at the during ent at the the amount
derivative ent date during
hip transacti beginnin the provisio end of period during
investment amount the
on g of the period n (if the in the the
period
period any) period Compan period
y’s net
assets at
the end
of the
period
Sell Novemb Novemb
Industrial
None No USD put 584.39 er 22, er 30, 0 584.39 584.39 0 0 0.00% 1.43
Bank
option 2021 2021
Total 584.39 -- -- 0 584.39 584.39 0 0 0.00% 1.43
Source of fund Self-owned fund
Litigation involved (if applicable) Not applicable
Disclosure date of the announcement
regarding the Board’s approval of December 15, 2020
derivative investment (if any)
Disclosure date of the announcement
regarding the shareholder meeting’s None
approval of derivative investment (if any)
Risk analysis and control measures of Risk analysis: 1. Price fluctuation risk: Price fluctuations of underlying interest rates and
derivative positions during the reporting exchange rates may lead to price changes of the financial derivatives, thereby causing losses; 2.
30
C&S Paper Co., Ltd. 2021 Annual Report
period (including but not limited to Internal control risk: Derivative trading is highly specialized and complicated, which may
market risks, liquidity risks, credit risks, result in risks arising from poor internal control; 3. Liquidity risk: Transaction may become
operational risks and legal risks) unable to be completed due to insufficient market liquidity; 4. Performance risk: The derivative
contract may become unable to be fulfilled at maturity, thereby leading to default risk; 5. Legal
risk: Relevant laws and regulations may be changed or the counterparty may violate relevant
laws and regulations such that the contract cannot be normally executed, causing losses to the
Company.
Control measures: 1. Select financial derivatives with strong liquidity and controllable risks for
trading; 2. Derivative trading should follow the primary principle of hedging for risks caused
by exchange rate fluctuations to the greatest extent; operation strategies will be adjusted in a
timely manner according to market conditions, to better hedge risks; 3. Carefully choose the
counterparty of the derivative trading; 4. Assign specified personnel to continuously monitor
the derivative contracts who will report cases of great market fluctuations or increased risks or
significant floating profits or losses to the management of the Company timely, so as to
respond actively; 5. Only conduct derivative trading with qualified financial institutions such as
large commercial risks, to avoid possible legal risks.
Changes in market price or fair value of
invested derivatives during the reporting
period; analysis on fair value of
None
derivatives should disclose the specific
methods used as well as the setting of
relevant assumptions and parameters
Whether there are significant changes to
the accounting policies and specific
accounting principles for derivatives No
during the reporting period compared
with previous reporting period
The Company and its subsidiaries use foreign currency to pay for raw material purchases, so
when the exchange rate fluctuates, exchange gains and losses will have a certain impact on the
Opinions of independent directors on the Company’s business performance. Therefore, it is reasonable for the Company and subsidiaries
Company’s derivative investment and risk to use financial tools to hedge exchange rate and interest rate risks. Moreover, the Company
control has formulated the Management System on Financial Derivative Trading to effectively regulate
derivative investment and control derivative trading risks. There is no situation that damages
the interests of shareholders of the Company.
5. Use of raised funds
□ Applicable √ Not applicable
No raised funds were used by the Company during the reporting period.
31
C&S Paper Co., Ltd. 2021 Annual Report
VIII. Major Asset and Equity Sales
1. Sales of major assets
□ Applicable √ Not applicable
The Company did not sell major assets during the reporting period.
2. Sales of major equity
□ Applicable √ Not applicable
32
C&S Paper Co., Ltd. 2021 Annual Report
IX. 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%
Unit: RMB
Company Company
Principal businesses Registered capital Total assets Net assets Operating income Operating profit Net profit
name type
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 special RMB345,985,032 1,780,552,592.09 1,480,447,512.18 1,549,237,057.08 147,293,548.73 126,564,846.03
C&S
management measures for the access of foreign
investment) (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
Yunfu
Subsidiary materials and products, daily sundries, and RMB650 million 2,203,509,133.31 1,356,504,806.54 3,184,105,149.86 287,089,326.26 246,098,218.58
C&S
disinfection supplies (excluding hazardous
chemicals); wholesale, retail and online sales:
food; import and export of goods and
technologies (excluding the import and export of
goods and technologies prohibited by the State or
33
C&S Paper Co., Ltd. 2021 Annual Report
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 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
Sichuan
Subsidiary of paper products; sales of paper products; RMB100 million 1,187,672,569.40 868,180,562.01 2,023,676,110.69 130,603,235.26 111,230,529.50
C&S
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.)
34
C&S Paper Co., Ltd. 2021 Annual Report
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 to the approval document or the permit
issued by competent department). General items:
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;
Hubei
Subsidiary sales of maternal and infant products; sales of RMB200 million 1,781,450,251.71 460,785,928.00 1,782,485,499.79 113,996,786.97 85,403,378.15
C&S
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.)
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
Description of main holding and joint-stock companies
35
C&S Paper Co., Ltd. 2021 Annual Report
X. Structured Entities Controlled by the Company
□ Applicable √ Not applicable
36
C&S Paper Co., Ltd. 2021 Annual Report
XI. Outlook of the Company’s Future Development
(I) Development strategy and planning of the Company
Adhering to the goal of “building a century-old enterprise and creating a market value of hundred billion”, the
Company practices the “targeted, people-oriented” action principle by bearing consumers, partners and employees
in mind. It will continue to improve shareholder returns, optimize the experience of and reputation among
consumers, and elevate the sense of belonging and happiness of employees.
The Company has defined the goal of strengthening basic management from 2022 to 2024. Specifically, it will
comprehensively streamline and optimize the business processes, management system and structure of each
operation and management sector including sales, marketing, finance, production, procurement and supply chain,
gradually improve IT and data construction, and gradually enhance HR management and talent training and
cultivation mechanism. In addition, it will gradually establish driven financial management and supply chain
management systems, gradually set up an open, fair, efficient and professional procurement system, and
comprehensively strengthen product quality and safe production management. Moreover, the Company will step
up efforts for audit supervision, comprehensively enhance basic management capabilities and improve the refined
management level, while reducing costs and increasing efficiency. All these will help consolidate the foundation
for its long-term, healthy development.
The Company will always adhere to the core business of household paper and continuously solidify product
layout and market competitiveness in the industry. Meanwhile, related diversified categories will be tried out as
supplements.
As a member of the first echelon in China’s household paper industry, the Company always puts product quality
in the first place as it firmly believes that product is the lifeline of an enterprise. That is why it has been insisting
on using advanced equipment and first-class raw materials to produce high-quality products. The Company will
continue to improve its independent research and development capabilities and strengthen cooperation with
external research and development institutions to enrich product formulas, optimize production processes and
meet multi-level and differentiated market demands.
The Company will continue to optimize product structure and consolidate the coordinated management of
traditional paper tissue, personal health care and quality health products. Moreover, high-end, high-margin
non-traditional dry wipes have been positioned as a strategic category that will be prioritized in the future.
Resources have been integrated to promote high-end, high-margin products such as the Oil Painting series, Lotion
series, kitchen towels, wet toilet paper, facial tissues, Dolemi sanitary pads, and disposal products, which intends
to drive the continual growth of their shares and steadily improve the Company’s gross profit margin and
37
C&S Paper Co., Ltd. 2021 Annual Report
profitability.
The Company will continue to enforce the management requirements of building first-class brands, systems and
staff team. Under the guiding marketing idea of “progressing through multiple channels, improving both volume
and profit, transforming way of thinking while maintaining the correct and evolving the new”, the Company
strives to a build a marketing team and marketing concept featuring co-existence, co-prosperity, co-construction
and co-development. By comprehensively optimizing product power, channel power and organizational power
and consolidating basic business functions and marketing standardization, it has improved the execution and
organizational strengthen of the marketing team in an all-round manner. Moreover, the Company constantly
enhances its data-driven management ability and continuously improves and enriches incentive mechanisms for
sales teams to seize channel network and terminal resources.
In line with market environment and sales progress, the Company will deploy production capacity in an orderly
manner to achieve a dynamic balance between production and sales.
Horizontal integration and strategic alliance with key customers and leading enterprises will be continued by the
Company.
(II) Major risks faced by the Company
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. With
the repeated outbreak of the pandemic in early 2021, pulp imports encountered unstable shipping schedules and
blocked transportation. Coupled with factors such as RMB appreciation, buying inflation and mismatch between
supply and demand, pulp prices first surged and then eased back. 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.
2. Risk of exchange rate fluctuation
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.
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
38
C&S Paper Co., Ltd. 2021 Annual Report
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.
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 Fourteenth Five-year Plan for 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 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.
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 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 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.
39
C&S Paper Co., Ltd. 2021 Annual Report
In response to possible occupational health hazards, the Company, at the equipment design and procurement
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. Even though the execution of all these measures has enabled the overall safe
production risk to be controllable, the Company still faces certain safe production risks.
6. Risk of logistics transportation
In 2021, the COVID-19 pandemic 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.
40
C&S Paper Co., Ltd. 2021 Annual Report
XII. Reception of Researches, Communications, Interviews and Other Activities
√ Applicable □ Not applicable
Type of
Reception Reception Main content discussed and Index of the basic
Reception time reception Reception object
location method information provided situation of the survey
object
Aviva-COFCO Life Insurance, CITIC Securities, China Securities, ZTF
Securities, Zhongtai Securities self-owned equity investment, CS Richland
Asset, CICC Asset Management, Zheshang Securities, Topassets
Management, CMS Asset Management, China Merchants Fund,
Changsheng Fund Management, Changjun Capital Management
(Shenzhen) Co., Ltd., Changjiang Securities, Changjiang Pension Insurance
Co., Ltd., Great Wall Securities, Chang’an Assets, Chang’an International
Trust, Golden Trust Sinopac Fund Management Co., Ltd., Genesis Capital,
Yinhua Fund Management, Galaxy AMC, Symbol Investment (Shanghai)
Co., Ltd., Industrial Securities, Xingtai Capital Management Limited, New
Silk Road Investment, New China Fund, Atlantis Investment Management, Please refer to the
Status quo and future
Telephone Southwest Securities, Longwin Investment, Wanlian Securities, TF record sheet of IR
April 28, 2021 / Institution development plan of the
communication Securities, First-Trust Fund Management, Manulife Teda Fund activities disclosed on
Company
Management, Taida Dingsheng Investment Management, Shenzhen Minsen CNINFO for details.
Investment, Shenwan Hongyuan Securities, Shanghai Aerovelocity Asset
Management CO., Ltd., Shanghai Yijinghui Asset, Shanghai Xianhu
Investment Management Co., Ltd., Shanghai Qinyuan Investment,
Shanghai Jujin Investment Co., Ltd., Perseverance Asset Management
L.L.P., Orient Securities Asset Management Company Limited, Shanghai
Chongshan Investment Co., Ltd., Shanghai CR Assets Investment
Management Co., Ltd., Pinpoint Asset Management Limited, Taihang
Capital Management, Qian Hai Life Insurance Co., Ltd., First Seafront
Fund, AXA SPDB Investment Managers, Ping’an Asset Management Co.,
Ltd., Penghua Fund Management Co., Ltd., Ningbo High-Flyer Quant
41
C&S Paper Co., Ltd. 2021 Annual Report
Investment Management Partnership (Limited Partnership), China Southern
Asset Management Co., Ltd., Morgan Stanley Fund, Orchid Asia,
Commando Capital, Kaiyuan Securities, First Seafront Fund, Jingheng
Investment, Invesco Great Wall Fund, Invesco Investment, Harvest Fund
Management Co., Ltd., CoStone Capital, China Universal Asset
Management, HSBC Bank, HSBC Qianhai Securities Limited, China
Everwin Asset, Huaxi Securities, Huatai Securities, Huarong Securities
Fund Department, Huachuang Securities, HuaAn Securities, HuaAn Fund
Management Co., Ltd., Citibank, Hongde Fund Management Co., Ltd.,
Hongta Securities, Haitong Securities, Sinolink Securities, GH Shining
Asset Management, Sealand Securities Asset Management Subsidiary,
GuoDu Securities, GF Securities, GF Fund, JH Investment Management
Co., Ltd., Everbright PGIM Fund Management Co., Ltd., Granford Capital,
Gaozhi (Shanghai) Investment Management Co., Ltd., Goldman Sachs
Asset Management, Crown Nice Investments, Huarong Securities Fund
Department, Hua Chuang Securities, HuaAn Securities, HuaAn Funds,
Hongde Fund, Founder Securities self-trading, FountainCap Research &
Investment, Northeast Ronghui Securities Asset Management Co., Ltd.,
Aistar Ventures, Bohai Life Insurance Co., Ltd., Bin Yuan Capital,
AceCamp International Limited, Beijing ZhiKai Investment Management
Co., Ltd., Beijing Keywise Capital Management Limited, Kendall Square
Capital, Beijing Hongcheng Capital Co., Ltd., Essence Securities, Shanghai
Ivy Assets Management Co., Ltd., WT Asset Management Limited,
Vontobel Asset Management Asia Pacific Limited, TORQ, Tiger Pacific
Capital L.P., Schonfeld, Point72 Asset Management, Oasis Fund, Morgan
Stanley, Millennium Capital, LYGH Capital, JK Capital, Golden Nest
LyGH Capital, R-Rock Investment, Fujian Haoshan Asset Management Please refer to the
Status quo and future
Telephone Co., Ltd., Orchid Asia Investment Group, Goldman Sachs Investment record sheet of IR
April 29, 2021 / Institution development plan of the
communication Management, Yijinghui Asset, Ningbo High-Flyer Quant Investment activities disclosed on
Company
Management Partnership (Limited Partnership), CSFG Asset Management CNINFO for details.
42
C&S Paper Co., Ltd. 2021 Annual Report
Limited, Jinshi Tongfang Technology Development Co., Ltd., Kadensa
Capital, Tourmaline Asset, Optimas Capital, Ninety One Investment,
Capital Fund, DAPU Asset Management, Zheshang Fund, Zheshang
Securities, Rencent International Asset Management Company Limited,
Cayman Asset, BOCHK Asset Management, Banyan Partners, ICBC Credit
Suisse Fund, Ruihe Investment, Pinpoint Investment, BoYuan Investment,
Cinda Australia Bank Fund, Guotai Junan Securities, OP Capital, Tianfeng
Tiancheng Asset, Xinghua Asset Management, Shoreline Capital, Huapu
Asset, CITIC Securities, Xinran Investment, Ivy Assets, Shanghai Senjin
Investment, Sunflower Investment, Goldman Sachs Asset, Shanghai
Luyong Asset, Yude Capital, CP Capital, Sumitomo Mitsui DS Asset
Management, CICC, Foresight Investment, Rising Asset Management,
Wukong Investment, West Lead Fund, Kendall Square Capital, JRL Assets,
Cathay Securities Investment Trust, Chase Cloud Asset, Mars Asset, CCB
Fund, Ganyuan Trading Co., Ltd., Hua Xi Securities, Dingfeng Asset,
Changxin Fund, Springs Capital, KS Fund, Debon Securities, Lead House
Investment, Hanhe Capital, Cranford Capital, Guosen Securities Asset
Management, Windsor Capital, Shenzhen Finest Asset Management,
PinPoint Investment, Tianhong Fund, New China Asset, China Merchants
Securities, Upright Asset, CICC AMD, Anxin Asset Management, Xijing
Investment, Shanghai Q.M. Fortune Management Partnership (Limited
Partnership), Purest Assets, Founder Securities Equity Investment
Department, Shanghai Minghe Investment Management Co., Ltd., Dajia
Asset Management, Minsheng Wealth Investment Management Co., Ltd.,
BOC Wealth Management, Fangyuan Fund, BOC International Securities
Asset Management Department, Platina Capital Management Limited
(HK) , FountainCap Research & Investment (Hong Kong) Co., Ltd.,
Shenghua Wealth Investment Management Co., Ltd., Chengyi Capital,
Dongguan Securities, Guotai Junan Securities, China Life Franklin, TEDA
Manulife Fund Management Co., Ltd., Zhongtai Innovation Capital
43
C&S Paper Co., Ltd. 2021 Annual Report
Management Co., Ltd., Rorschach Capital, Virtue First Investment, Banyan
Partners, Beijing Aotianqi Investment Management Co., Ltd., Shining
Stone Capital, Bank of China Investment Management, Shelwood Fund,
Orchid Asia, Balings Fund, Lide Investment Holding, Pinebridge
Investment, Eurizon Capital, TX Capital, Ankaa Capital, HSZ Investment,
SPQ Asia Capital, Bosheng, Sunshine Insurance, Fidelity, Golden Nest,
ROC, Knight Investment, Pinpoint, Dongxing Securities, Point72,
DymonAsia Capital, Dawn Capital, Destination Capital, Manulife, EFG
Asset Management, Golden Nest, Orchid Asia, ICBCI Investment
Management, Citibank, Oberweis, Fuh Hwa Trust, Fountain Cap, WT,
Macquarie Investment Management Business Trust, Athena Capital,
Kenrich Partners, Bran Asset Management, Millennium Capital
Management (Hong Kong) Limited, Goldman Sachs Asset Management,
Tiger Pacific Capital LP, JK Capital Management Ltd., Citi Private Bank,
Everest 8 capital
Please refer to the
Status quo and future
record sheet of IR
May 07, 2021 / Others Others Investors attending the online meeting of 2020 annual report briefing development plan of the
activities disclosed on
Company
CNINFO for details.
Southern Asset Management, E Fund, Springs Capital, Harvest Fund,
Invesco Great Wall Fund, Bank of Communications Schroders, Wells Fargo
Fund, Dongfanghong Asset Management, Rongtong Capital, BOSC Asset,
TEDA Manulife, Essence Securities, CICC Asset Management, China Post
Please refer to the
Life Insurance, China Life Security Fund, Zheshang Fund, Wanjia Fund, Status quo and future
Telephone record sheet of IR
August 31, 2021 / Institution Jiahe Fund, China Europe Fund, Australia Bank Capital, Bin Yuan Capital, development plan of the
communication activities disclosed on
Bohai Huijin Asset Management Co., Ltd., Goldman Sachs Assets, Huabao Company
CNINFO for details.
Captial Fund, Huili Assets, Jiulian Assets, Liger Capital, Morgan Stanley
Fund, Changxin Fund, Changsheng Fund, HuaAn Funds, Lion Fund, Koike
Capital, New Silkroutes, ICBC Credit Suisse, Galaxy Fund, Zheshang
Securities self-trading unit, Rabbit Fund, Centennial Asset, CS Richland
44
C&S Paper Co., Ltd. 2021 Annual Report
Asset, Red Elephant Investment, Gao Yi Assets, Magic Square Investment,
Guohai Asset Management, First Seafront Fund, SWS MU Fund
Management, Everbright Prudential, Qinyuan Investment, CITIC Asset
Management, East Money Fund, Chengan Assets, Caitong Asset
Management, Yijinghui, Bohai Huijin Securities, Haitong Securities
self-trading unit, Kaiyuan Light Industry, Kaiyuan Securities, Guojin
Securities, Guotai Junan Securities, Huatai Securities, HSBC Qianhai
Securities, ZTF Securities, Debon Securities, China Merchants Securities,
Zheshang Securities, Hualin Securities, Golden Nest Capital, Alliance
Bernstein, Lazard, Wfund, Greencourt, Goldennest, Anatole, Pinpoint,
Point72, Y2 Capital
Wisdomshire, Jiufu Fund, Essence Securities self-trading unit, Xiangsheng
Asset, Guolian Life, Chengsheng Investment, ICBC Credit Suisse, Galaxy
Fund, Wanjia Fund, Industrial Securities Global, E Fund, Great Wall
Wealth Asset Management, Mingyu Asset, United Vision Asset
Management, China Asset Management, Qiyao Investment, Century
Securities, CS Richland Asset, Soochow Securities, China Merchants
Securities, Southern Asset Management, Caitong Asset Management,
Zheshang Securities self-trading unit, Magic Square Quantitative, Danyi
Please refer to the
Investment, Xinhua Asset, Goldman Sachs, Red Elephant Investment, Status quo and future
October 27, Telephone record sheet of IR
/ Institution Everbright Securities Asset Management, Generali China, Wanlian development plan of the
2021 communication activities disclosed on
Securities, Chengan Assets, CCB Pension, Taikang Asset Management, Company
CNINFO for details.
Huatai Assets, China Europe Fund, China Life Security Fund, Chongyun
Investment, HSBC Jintrust, Xingyin Wealth Management, Morgan Stanley,
Ping An Asset Management, Huaan Securities self-trading, Bank of China
Securities Asset Management, Ruiyang Investment, Huashang Fund,
Morgan Stanley Huaxin Fund Management, China Post Life Insurance,
Zheshang Fund, Everbright Prudential, Debon Fund, Honest Asset
Management Co., Ltd., Minsheng Royal Fund Management, Shanghai
Guandao Asset Management Co., Ltd., CICC Asset Management
45
C&S Paper Co., Ltd. 2021 Annual Report
Department, Cinda Australia Bank Fund, Golden Eagle Fund, Qianhai Life
Insurance, Hengfu Investment, Huabao Fund, Aijian self-trading, Essence
Asset Management, Tianhong Fund, China Overseas Fund Management
Co., Ltd., Jinglin Asset, Shenzhen Dadao Zhicheng Investment
Management Partnership, Invesco Great Wall Fund, Essence Fund, China
Universal Fund, CICC Asset Management, Nord Fund, SPDB Security
Sheng, Ping An Pension, Cathay Pacific Fund, GH Shining Asset
Management, China Life Asset Management, CITIC Asset Management,
Guangdong Huizheng Investment Management Co., Ltd., AIA Asset
Management Co., Ltd., Soochow Fund, Morgan Stanley, King tower Asset
Management, Anatole, Value Partner
46
C&S Paper Co., Ltd. 2021 Annual Report
Section IV Corporate Governance
I. Basic Situation of Corporate Governance
1. Basic situation of corporate governance
During the reporting period, the Company has been operating in strict compliance with requirements of the
Company Law, the Securities Law, the Code of Corporate Governance for Listed Companies, the Rules
Governing the Listing of Shares on Shenzhen Stock Exchange, and other normative documents promulgated by
China Securities Regulatory Commission (CSRC) and Shenzhen Stock Exchange (SZSE). To standardize actions,
the Company has developed the Articles of Association, constantly improved its corporate governance structure,
and optimized its internal management systems. Its corporate governance structure meets requirements set out in
relevant normative documents of CSRC on the governance of listed companies.
(1) In respect of shareholders and general meetings
During the reporting period, the convening, holding, and voting procedures of shareholder meetings were
standardized and in strict compliance with provisions and requirements of the Rules of Procedure of the General
Meetings of Shareholders and the Articles of Association. All shareholders were treated equally and were able to
fully exercise their rights. The general shareholder meetings during the reporting period were convened by the
Board of Directors and lawyers were invited to the site for witnessing.
(2) In respect of shareholders and the Company
The Company’s controlling shareholder strictly regulated its behaviors in accordance with the Code of Corporate
Governance for Listed Companies, the Rules Governing the Listing of Shares on Shenzhen Stock Exchange, and
the Articles of Association. The controlling shareholder exercised its shareholder rights through the general
meeting of shareholders, and there were no actions of the controlling shareholder of bypassing the general
meeting and directly or indirectly interfering with the Company’s operations and decision making.
(3) In respect of the directors and the Board of Directors
The Board of Directors of the Company currently comprises 9 directors, among which 3 are independent directors.
The number and composition of the Board of Directors meet requirements of laws and regulations. The Company
conducts the selection of directors in strict accordance with provisions of the Company Law and the Articles of
Association, to ensure open, fair, just and independent engagement of directors. All directors are able to carry out
work as per requirements set out in the Rules of Procedure of the Board of Directors and other regulations. They
attend Board meetings and shareholder meetings, actively participate in relevant knowledge training to familiarize
with and acquire relevant laws and regulations, and earnestly perform their duties as directors of being honest and
trustworthy, diligent and conscientious.
(4) In respect of supervisors and the Board of Supervisors
The Board of Supervisors of the Company currently comprises 3 directors, among which one is employee
supervisor. The Company conducts the selection of supervisors in strict accordance with provisions of the
Company Law and the Articles of Association, and the number and composition of the Board of Supervisors meet
47
C&S Paper Co., Ltd. 2021 Annual Report
requirements of laws and regulations. All supervisors earnestly perform their duties as per requirements of the
Rules of Procedure of the Board of Supervisors and other relevant regulations, to supervise the decision-making
procedures and resolutions of the Board of Directors and the Company’s legal operations and to effectively
oversee the legality and compliance of directors, managers and other senior executives of the Company in their
duty performance.
(5) In respect of performance appraisal and incentive restriction mechanism
The Company’s appointment of senior management is open and transparent and in compliance with relevant laws
and regulations. The Company has established a sound performance appraisal mechanism under which the
remuneration of the senior management is linked to the Company’s business performance indicators.
(6) In respect of investor relations (IR) management
The Sectary of the Board of Directors of the Company is responsible for IR management while the Office of the
Board of Directors carries out daily affairs of IR management. In order to further strengthen and improve IR
management, the Company has formulated the Investor Relations Management System, the Investor Compliant
Management System, and the Administrative Measures for the Reception of Institutional Investors. IR activities
must be conducted in strict accordance with relevant provisions and it is strictly forbidden to disclose any
undisclosed information of the Company. Personnel from the Office of the Board of Directors are dedicated to
answering calls of investors, replying their emails, and responding to questions raised by investors on relevant
interaction platforms, to maintain smooth and sound communication with investors. Response of investors has
been positive.
The Office of the Board of Directors is responsible for the reception of investors and archival of relevant
documents. Dedicated personnel are arranged to well receive investor visits. The Company properly arranges
individual investors, analysts and fund managers who come to the Company for onsite research to visit the sites of
the Company, discuss with them and sign the Letter of Commitment with them for information confidentiality.
Records are well documented for each visit and the IR activity form is submitted to Shenzhen Stock Exchange
within two trading days. On the basis of not violating relevant provisions of CSRC, Shenzhen Stock Exchange and
the Company’s Information Disclosure Management System, situations of the Company are presented in an
objective, true, accurate and complete manner. The Company attaches great importance to IR management in its
daily work by actively communicating with investors, understanding relevant situations, and listing to relevant
suggestions. Attention is also paid to the cultivation of healthy long-term investors.
The Company will continue the good work in information disclosure and IR management, and ensure true,
accurate, timely and complete information disclosure and smooth, convenient, fair and effective communication
channels with investors.
(7) In respect of information disclosure and transparency
The Company has set up the Office of Board of Directors which is equipped with professionals, and discloses
information of the Company in a true, accurate, timely and complete manner in strict compliance with relevant
laws and regulations as well as systems of the Company including the Information Disclosure Management
System, the Management System for External Information Users, the Accountability System for Significant Errors
in Information Disclosure of Annual Reports, and the Internal Reporting System for Significant Events. This
ensures that all shareholders of the Company could obtain information with equal opportunities.
48
C&S Paper Co., Ltd. 2021 Annual Report
(8) In respect of stakeholders
The Company fully respects and safeguards the legitimate rights and interests of relevant stakeholders and
actively cooperates with them. In order to coordinate and balance the interests of shareholders, employees, society
and other parties, the Company strengthens communication and exchange with all parties, to jointly promote its
sustainable and healthy development.
2. Corporate governance regulations established or revised by the Company during the reporting period
During the reporting period, the Company revised the Rules of Procedure of the Board of Directors, the Rules of
Procedure of the General Meeting of Shareholders, the Rules of Procedure of the Board of Supervisors, the
Working Rules of the Audit Committee, the Working Rules of the Nomination Committee, the Working Rules of the
Remuneration and Appraisal Committee, the Working Rules of the Strategy Committee, the Working Rules of the
General Manager, and the Articles of Association based on its operating conditions and relevant provisions. These
have timely improved its governance and internal control management system.
Whether there are significant differences between the Company’s actual status of corporate governance and laws, administrative
regulations and CSRC normative documents on the governance of listed companies
□ Yes √ No
There were no significant differences between the Company’s actual conditions and laws, administrative regulations and CSRC
normative documents on listed company governance.
II. The Company’s Independence from Its Controlling Shareholders in terms of Business,
Personnel, Finance, Organization, Business, etc.
The Company operates in strict compliance with the Company Law and the Articles of Association. It is
independent from the controlling shareholder in terms of business, personnel, assets, institution, finance, etc. and
has independent and complete business systems and independent management capabilities.
1. In respect of business: The Company has independent and complete supply, R&D, production and sales systems
as well as the ability to operate independently in the market. It can independently conduct business, accounting
and decision making and independently assume responsibilities and risks, without any reliance on the controlling
shareholder or any other related party.
2. In respect of personnel: The Company has formed a complete system in terms of labor, personnel and salary
management and has established an independent HR department to manage labor, personnel and salary
independently of the controlling shareholder. It owns an independent workforce while its directors, supervisors
and senior management have been created legally in accordance with the Company Law, the Articles of
Association and other relevant laws and regulations. All senior managers work in the Company and collect salary
without holding any position other than the director or supervisor in the controlling shareholder/its subsidiaries.
3. In respect of asset: The property relationship between the Company and the controlling shareholder is clear. The
Company possesses independent legal person assets as well as production systems, auxiliary production systems
and supporting facilities relating to production and operation. In addition, it independently owns lands, plants,
equipment and machinery relating to production and operation. The Company completely controls all assets.
49
C&S Paper Co., Ltd. 2021 Annual Report
There is no situation in which assets and funds are appropriated by the controlling shareholder, thereby impairing
interests of the Company.
4. In respect of institution: The Company has set up a sound organizational system aligned to its own production
and operation needs. It functions independently and well without any subordination relationship with functional
departments of the controlling shareholder.
5. In respect of finance: The Company has set up an independent financial and accounting department equipped
with full-time financial personnel. It has also established an independent accounting system and a standardized
financial management system and is able to make decisions relating to financial matters independently. The
Company opens independent bank accounts and files for tax returns and performs taxation obligations
independently. There is no shared bank account or mixed tax payment with the controlling shareholder.
III. Horizontal Competition
□ Applicable √ Not applicable
IV. 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
Deliberated and approved: 1.
Proposal on Election of
Non-Independent Directors
of the Fifth Session of the
Board of Directors; 2.
Proposal on Election of
Independent Directors of the
2021 First Extraordinary Fifth Session of the Board of
Extraordinary general meeting 53.68% January 21, 2021 January 22, 2021 Directors; 3. Proposal on
General Meeting of shareholders Election of Shareholder
Representative Supervisors
of the Fifth Session of the
Board of Supervisors; 4.
Proposal on Changing the
Business Scope and
Amending the Articles of
Association of the Company
2021 Second Extraordinary Deliberated and passed: 1.
Extraordinary general meeting 54.85% January 29, 2021 January 30, 2021 Proposal on Building a New
General Meeting of shareholders 400,000-ton Household
50
C&S Paper Co., Ltd. 2021 Annual Report
Paper Project; 2. Proposal
on Use of Self-owned Idle
Funds for Reverse Repo of
Treasury Bonds in 2021;
Deliberated and approved: 1.
Proposal on By-election of
Non-Independent Directors
2021 Third Extraordinary
of the Fifth Session of the
Extraordinary general meeting 54.72% April 07, 2021 April 08, 2021
Board of Directors; 2.
General Meeting of shareholders
Proposal on Amending the
Articles of Association of the
Company
Deliberated and approved: 1.
Proposal on the 2020 Annual
Report and Its Summary; 2.
Proposal on the 2020 Work
Report of the Board of
Directors; 3. Proposal on the
2020 Work Report of the
Board of Supervisor; 4.
Proposal on the 2020 Final
2020 Annual General Financial Accounts; 5.
Annual general
Meeting of 54.78% May 19, 2021 May 20, 2021 Proposal on 2020 Profit
meeting
Shareholders Distribution Plan; 6.
Proposal on the
Remuneration of Directors in
2020; 7. Proposal on the
Remuneration of Supervisor
in 2020; 8. Proposal on
Changing the Business
Premise and Amending the
Articles of Association of the
Company
Deliberated and approved: 1.
Phase III Employee Stock
Ownership Plan (Draft) and
Its Summary; 2.
2021 Fourth Extraordinary
Administrative Measures for
Extraordinary general meeting 57.22% June 07, 2021 June 08, 2021
the Phase III Employee Stock
General Meeting of shareholders
Ownership Plan; 3. Proposal
on Requesting the General
Meeting of Shareholders to
Authorize the Board of
51
C&S Paper Co., Ltd. 2021 Annual Report
Directors to Handle Matters
Relating to the Phase III
Employee Stock Ownership
Plan; 4. Proposal on
Continued Engagement of
the Accounting Firm; 5.
Proposal on Amending the
Articles of Association of the
Company; 6. Proposal on
Amending the Rules of
Procedure of the General
Meeting of Shareholders; 7.
Proposal on Amending the
Rules of Procedure of the
Board of Directors; 8.
Proposal on Amending the
Rules of Procedure of the
Board of Supervisors; 9.
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
Deliberated and approved: 1.
2021 Fifth Extraordinary Proposal on By-election of
Extraordinary general meeting 52.87% November 17, 2021 November 18, 2021 Non-Independent Directors
General Meeting of shareholders of the Fifth Session of the
Board of Directors
Deliberated and approved: 1.
Proposal on the Repurchase
and Deregistration of Partial
Reserved Restricted Stocks
under the 2018 Stock Option
and Restricted Stock
2021 Sixth Extraordinary
Incentive Plan; 2. Proposal
Extraordinary general meeting 53.86% December 20, 2021 December 21, 2021
on Amending the Articles of
General Meeting of shareholders
Association of the Company;
3. Proposal on the
Company’s Application for
Credit Lines from Banks in
2022; 4. Proposal on the
Company’s Provision of
52
C&S Paper Co., Ltd. 2021 Annual Report
Guarantee to Subsidiaries in
2022; 5. Proposal on Use of
Self-owned Idle Funds for
Reverse Repo of Treasury
Bonds in 2022; 6. Proposal
on the Company’s Provision
of Credit Guarantee to
Dealers in 2022; 7. Proposal
on By-election of
Shareholder Representative
Supervisors of the Fifth
Session of the Board of
Supervisors
2. Extraordinary general meetings of shareholders proposed to be convened by preferred shareholders
whose voting rights were resumed
□ Applicable √ Not applicable
V. Particulars of Directors, Supervisors and Senior Management
1. Basic information
Number of
Increase Number of
Start shares Decrease
Position End date of shares Other shares
Gende date of held at the of shares Reason for
Name Position status Age of term during changes held at the
r term of beginning during the change
of office the (shares) end of the
office of the period
period period
period
Decemb
Deng January
Director Incumbent Male 71 er 12, 6,752,811 6,752,811
Yingzhong 20, 2024
2008
April 12, January Share
Liu Peng Chairman Incumbent Male 42 61,300 61,300
2021 20, 2024 increase
March January
Liu Peng President Incumbent Male 42
22, 2021 20, 2024
Decemb
Deng Vice January
Incumbent Male 44 er 12, 4,957,473 4,957,473
Guanbiao Chairman 20, 2024
2011
Deng Vice June 22, January
Incumbent Male 38 1,200,974 1,200,974
Guanjie Chairman 2020 20, 2024
53
C&S Paper Co., Ltd. 2021 Annual Report
Novemb
Zhang January
Director Incumbent Male 45 er 17, 210,000
Yang 20, 2024
2021
Zhang Vice July 12, January
Incumbent Male 45
Yang President 2021 20, 2024
Independe March March
He Haidi Incumbent Male 54
nt Director 10, 2017 09, 2023
He Independe January January
Incumbent Male 46
Guoquan nt Director 21, 2021 20, 2024
Independe January January
Liu Die Incumbent Male 44
nt Director 21, 2021 20, 2024
Vice July 09, January 10,537,74 Share
Yue Yong Incumbent Male 56 872,500 9,665,241
President 2019 20, 2024 1 decrease
Vice April 12, January Share
Li Zhaojin Incumbent Male 59 10,800 10,800
President 2021 20, 2024 increase
Deng Vice Femal April 27, January Share
Incumbent 48 21,100 21,100
Wenxi President e 2021 20, 2024 increase
Novemb
Zhao Vice January
Incumbent Male 44 er 30, 35,000
Ming President 20, 2024
2021
Novemb
Vice January
Lin Tiande Incumbent Male 42 er 30, 317,521
President 20, 2024
2021
Board
Zhang Secretary, August January
Incumbent Male 48
Haijun Vice 23, 2021 20, 2024
President
Chief Decemb Exercise of
January
Dong Ye Financial Incumbent Male 58 er 12, 228,725 15,000 243,725 stock
20, 2024
Officer 2011 operations
Chairman
of the Septemb
Chen January Share
Board of Incumbent Male 68 er 22, 16,900 16,900
Haiyuan 20, 2024 increase
Supervisor 2015
s
Decemb
Liang January
Supervisor Incumbent Male 43 er 12,
Yongliang 20, 2024
2011
Zhang Decemb January
Supervisor Incumbent Male 48 72,000
Gao er 20, 20, 2024
54
C&S Paper Co., Ltd. 2021 Annual Report
2021
Femal January January
Zeng Yi Director Resigned 46
e 31, 2018 21, 2021
Huang Independe January January
Resigned Male 52
Hongyan nt Director 06, 2015 21, 2021
Ge Independe Femal January January
Resigned 55
Guangrui nt Director e 06, 2015 21, 2021
January March
Yue Yong Director Resigned Male 56
21, 2021 18, 2021
Deng January March
President Resigned Male 44
Guanbiao 06, 2015 09, 2021
Decemb
Deng April 09,
Chairman Resigned Male 71 er 12,
Yingzhong 2021
2008
Cancellation
of restricted
shares due
June 15, April 28, -1,100,0 to
Dai Zhenji Director Resigned Male 56 1,670,000 142,500 427,500
2020 2021 00 resignation;
exercise of
stock
options
Joint June 22, April 28,
Dai Zhenji Resigned Male 56
President 2020 2021
Li January July 12, Share
Supervisor Resigned Male 43 62,280 3,000 65,280
Youquan 31, 2018 2021 increase
Zhou Vice June 30, July 29, Share
Resigned Male 42 498,672 124,600 374,072
Qichao President 2017 2021 decrease
Zhou Board August July 29,
Resigned Male 42
Qichao Secretary 16, 2017 2021
Ye Vice July 09, October
Resigned Male 46 150,000 150,000
Longfang President 2019 27, 2021
Septemb
Liu March Share
Director Resigned Male 46 er 11, 2,410,550 601,200 1,809,350
Jinfeng 23, 2022 decrease
2015
Liu Vice January March
Resigned Male 46
Jinfeng President 31, 2018 23, 2022
28,469,22 -1,085,0 26,391,04
Total -- -- -- -- -- -- 113,100 1,740,800 --
6 00 7
Whether there is any resignation of directors and supervisors or dismissal of senior management within their term of office during the
55
C&S Paper Co., Ltd. 2021 Annual Report
reporting period
√ Yes □ No
1. On March 18, 2021, Mr. Yue Yong resigned from the position of Director; after resignation, he still serves as the
Vice President of the Company.
2. On March 19, 2021, Mr. Deng Guanbiao resigned from the position of President; after resignation, he still
serves as the Vice Chairman and member of the Strategy Committee of the Company.
3. On April 9, 2021, Mr. Deng Yingzhong resigned from the position of Chairman; after resignation, he still serves
as the Director and Chairman of the Strategy Committee of the Company.
4. On April 28, 2021, Mr. Dai Zhenji resigned from the position of Director and Joint President; after resignation,
he no longer holds any position in the Company.
5. On July 12, 2021, Mr. Li Youquan resigned from the position of Supervisor; after resignation, he no longer
holds any position in the Company.
6. On July 29, 2021, Mr. Zhou Qichao resigned from the position of Board Secretary and Vice President; after
resignation, he no longer holds any position in the Company.
7. On October 27, 2021, Mr. Ye Longfang resigned from the position of Vice President; after resignation, he no
longer holds any position in the Company.
8. On March 23, 2022, Mr. Liu Jinfeng resigned from the position of Director and Vice President; after resignation,
he still holds other positions in the Company.
Changes in directors, supervisors and senior management of the Company
√ Applicable □ Not applicable
Name Position Type Date Reason
Resigned upon expiry
Zeng Yi Director January 21, 2021 Expiry of term of office
of term of office
Resigned upon expiry
Huang Hongyan Independent Director January 21, 2021 Expiry of term of office
of term of office
Resigned upon expiry
Ge Guangrui Independent Director January 21, 2021 Expiry of term of office
of term of office
Elected upon the change of board
He Guoquan Independent Director Elected January 21, 2021
of directors
Elected upon the change of board
Liu Die Independent Director Elected January 21, 2021
of directors
Yue Yong Director Resigned March 18, 2021 Voluntary resign
Deng Guanbiao President Dismissed March 09, 2021 Voluntary resign
Appointed by the board of
Liu Peng President Appointed March 22, 2021
directors
Deng Yingzhong Chairman Resigned April 09, 2021 Voluntary resign
Liu Peng Chairman Elected April 12, 2021 Elected by the board of directors
Appointed by the board of
Li Zhaojin Vice President Appointed April 12, 2021
directors
56
C&S Paper Co., Ltd. 2021 Annual Report
Appointed by the board of
Deng Wenxi Vice President Appointed April 27, 2021
directors
Director, Joint
Dai Zhenji Resigned April 28, 2021 Voluntary resign
President
Li Youquan Supervisor Resigned July 12, 2021 Voluntary resign
Appointed by the board of
Zhang Yang Vice President Appointed July 12, 2021
directors
Board Secretary, Vice
Zhou Qichao Dismissed July 29, 2021 Voluntary resign
President
Board Secretary, Vice Appointed by the board of
Zhang Haijun Appointed August 23, 2021
President directors
Ye Longfang Vice President Dismissed October 27, 2021 Voluntary resign
Elected by the general meeting
Zhang Yang Director Elected November 17, 2021
of shareholders
Appointed by the board of
Lin Tiande Vice President Appointed November 30, 2021
directors
Appointed by the board of
Zhao Ming Vice President Appointed November 30, 2021
directors
Elected by the general meeting
Zhang Gao Supervisor Elected December 20, 2021
of shareholders
Liu Jinfeng Director, Vice President Resigned March 23, 2022 Voluntary resign
2. Main working experience
Professional background, main working experience and main current responsibilities of the Company’s in-service
directors, supervisors and senior management
Mr. Deng Yingzhong, male and born in 1951, is the founder of the Company. Mr. Deng started to engage in the
paper industry in 1979 and thereby has more than 40 years of industry experience. He served as the Chairman of
Zhongshan Zhongshun Paper Manufacturing Co., Ltd. from 1992 to 1999, the Chairman and Legal Representative
of that company from 1999 to 2005, and a director of that company from 2005 and 2008. He was the Chairman of
the Company from 2008 to April 2021 and is currently a director and Chairman of the Strategy Committee of the
Company. He has been rewarded titles like “National Township Entrepreneur”, “China Excellent Private
Entrepreneurs of Technology Firms”, “Excellent Private Entrepreneur of Guangdong Province”, “Excellent
Manager of Quality Work of Guangdong Province”, “Excellent Entrepreneur of Zhongshan City”, etc.
Liu Peng, male, has a bachelor’s degree and is a CPC member and of Chinese nationality. He successively served
as the President of Industrial Bank Jiangmen Branch and Zhongshan Branch. He acts as the Chairman of the
Company from March 2021 and the President of the Company from April 2021.
Deng Guanbiao, male and born in 1978, is of Chinese nationality and has the permanent residency in Republic of
Gambia and the permanent resident status in Macao Special Administrative Region. He holds a bachelor’s degree.
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C&S Paper Co., Ltd. 2021 Annual Report
Starting to work in Zhongshan Zhongshun Paper Manufacturing Co., Ltd. in 1999, he was once a director and
Deputy General Manager of that company and a director and General Manager of the Company. He served as the
General Manager of the Company from 2015 to March 2021 and has been the Vice Chairman of the Company
since 2011.
Deng Guanjie, male and born in 1984, studied at Oxford Brookes University in England from 2004 to 2007 and
obtained a bachelor’s degree. He acted as the Assistant to the Chairman of Zhongshan Zhongshun Paper
Manufacturing Co., Ltd. from 2005 to 2007 and the Assistant to the Chairman of the Company from 2008 to
February 2011. Afterwards, he was the Assistant to the Chairman and the HR Director from March 2011 to
January 2012 and the Assistant to the Chairman of the Company from February 2012 to March 2013. He has been
a director of the Company ever since December 2011 and served as the Vice President of the Company from April
2013 to June 2006 and as the Vice Chairman of the Company from June 2020.
Zhang Yang, male and born in 1977, is of Chinese nationality and has no permanent residency abroad. He worked
as the Sales Manager of Sichuan C&S from 2006 to September 2009 and successively as the Sales Manager,
General Sales Manager and General Trade Manager of Chengdu C&S from October 2007 to June 2014.
Afterwards, he served as the Deputy General Manager of the Company from January 2015 to January 2018 and as
a director of the Company from December 2015 to January 2018. From July 2014 to June 2021, he was the
General Manager of the Southwest Region of the Company. He acts as the Vice President of the Company from
July 2021 and the director of the Company from November 2021.
He Haidi, male and born in September 1968, is of Chinese nationality and has no permanent residency abroad. He
graduated from the Library Science of Wuhan University and was awarded a bachelor’s degree in arts, and then
received a master’s degree in management from Wuhan University in 2006. Mr. He possesses the technical title of
associate researcher and is a CPC member. Currently, he works in the University of Electronic Science and
Technology of China, Zhongshan Institute, engaging in the teaching and research of information consulting,
services, analysis, retrieval, etc. He has presided over and been involved in a dozen of scientific research projects
at the provincial level of Guangdong Province and the municipal level of Zhongshan City, and has published more
than twenty academic papers in major core journals of the professional field. He has been hired as an expert for
the Review Committee of Medium-Grade Professional Title for Book Information of Zhongshan City and a
review expert for government procurements of Zhongshan City. He also part-times in Zhongshan Information
Research Institute and provides information consulting, information analysis, technology novelty search,
development and support for IPR and technological innovation projects, and other services to enterprises. He has
been an independent director of the Company since March 2017.
He Guoquan, male and born in 1976, is of Chinese nationality and has no permanent residency abroad. He has a
bachelor’s degree and is a senior certified public accountant in China and Australia, an international certified
internal auditor, and national accounting leading talent as ascertained by the Ministry of Finance. He once served
as a non-independent director of Singapore-listed Debao Property Group and resigned in 2018. From 1997 to
January 2022, he worked as a partner in GP Certified Public Accountants (Limited Liability Partnership). In
January 2022, he joined the Guangdong Sinong Certified Public Accountants LLP and has been working there
ever since. He has been as an independent director of the Company since January 2021.
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C&S Paper Co., Ltd. 2021 Annual Report
Liu Die, male and born in 1978, is of Chinese nationality and has no permanent residency abroad. He graduated
from South-Central University for Nationalities in 2005 with a master’s degree in law theory. He passed the
national judicial examination and obtained the lawyer’s qualification certificate in 2004. From 2007 to 2018, he
successively served as a lawyer in Guangdong Yashang Law Firm, Guangdong Hengyun Law Firm, and
Guangdong Xiangshan Law Firm. Currently, he is the lead lawyer in Guangdong Liu Zhi Jun Law Firm. He acts
as an independent director of the Company since January 2021.
Yue Yong, male and born in 1966, is of Chinese nationality. He joined Zhongshan Zhongshun Paper
Manufacturing Co., Ltd. in 1993 and successively served as the Production Manager of Zhongshan Zhongshun
and the General Manager of C&S (Sichuan) Paper Co., Ltd. He was a director and Deputy General Manager of
Zhongshan Zhongshun between 2005 and 2008. Afterwards, he became a director and Vice President of the
Company from 2009 to 2015. He has been the Procurement President since 2015 and the Vice President of the
Company since July 2019.
Li Zhaojin, male and born in April 1962, is from Taiwan China and has a bachelor’s degree. He joined the Gold
Hongye Paper Group in 2005 and successively served as the Production Manager, Papermaking (Pre-production)
General Manager, Manufacturing General Manager, etc. Mr. Li started to work for the Company since November
2019 and acts as the Vice President of the Company since April 2021.
Deng Wenxi, female and born in 1974, graduated from the University of Hong Kong with a master’s degree. She
worked as the General Branding Manager of Hengan International Group from April 2009 to May 2018. From
June 2018 to December 2020, she served successively as the General Manager of the Marketing Center of
Dongguan DeRucci Bedding Co., Ltd. and CEO of Guangdong DD-Generc, an entity invested by DeRucci’s
subordinate investment platform. She has been the Vice President of the Company from April 2021.
Zhao Ming, male and born in 1978, is of Chinese nationality and has a college degree. From 2005 to 2019, he
successively worked in Hengan Group, Mengniu Dairy, Hulling Group, and Taison Group. From September 2019
to October 2021, he served as the General Manager of the North China Region of the Company. He has been the
Vice President of the Company from November 2021.
Lin Tiande, male and born in 1980, is of Chinese nationality and has a college degree. Mr. Lin joined the
Company in March 2003 and successively held positions of Director of the Engineering Department, Project
Manager, General Manager of Jiangmen C&S, General Manager of Zhongshan C&S, Deputy General Production
Manager, Production Director, and General Production Manager. He was the General Manager of the Technology
Center from March 2020 and October 2021. He has been the Vice President of the Company from November
2021.
Zhang Haijun, male, was born in 1974 and has a bachelor’s degree. From 1997 to 2001, he was engaged in
financial work in Jiaozuo Coal Group. Later, he joined Zhongshan Zhongshun Paper Manufacturing Co., Ltd.,
first responsible for the financial and auditing work in 2004 and 2005 and then as the Manger of the Investment
Management Department from 2006 to November 2008. He acted as the Board Secretary of the Company from
December 2008 to December 2011 and then as the Vice President and Board Secretary from December 2011 to
August 2017. From 2012 to 2018, he concurrently served as the independent director of Guangdong Fuxin
Technology Co., Ltd. He has been the Vice President and Board Secretary of the Company since August 2021.
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C&S Paper Co., Ltd. 2021 Annual Report
Dong Ye, male and born in 1964, is of Chinese nationality and has no permanent residency abroad. He has a
college degree and is an assistant accountant. He joined Zhongshan Zhongshun Paper Manufacturing Co., Ltd. in
2006 and successively served as its finance supervisor, Finance Manager, and Deputy Finance Director. He is the
person responsible for the accounting department of the Company, and acted as a director of the Company
between 2011 and 2014 and became the Chief Financial Officer of the Company since 2011.
Chen Haiyuan, male, was born in 1954. He served as the party branch secretary and director of the village
committee of Shenglong Village, Tanbei Town, Zhongshan City between 1991 and 1999 and the village’s party
branch secretary between 1999 and 2005. He was the Deputy Director and Assistant to Director of the Dongsheng
Township Water Authority from 2005 to 2014, and retired in July 2014. Afterwards, he worked as the Company’s
supervision specialist since March 2015, a supervisor since April 2015 and the Chairman of the Board of
Supervisors since September 2015.
Liang Yongliang, male and born in 1979, is of Chinese nationality and has no permanent residency abroad. Mr.
Liang has a college degree. He joined Zhongshan Zhongshun Paper Manufacturing Co., Ltd. in 2002 and
successively served as the Assistant to Finance President of Zhongshan Zhongshun and the General Manager of
the Investment Management Department and head of the Audit Department of C&S Paper. He started to serve as a
supervisor of the Company since 2011.
Zhao Gao, male and born in 1974, is of Chinese nationality and has a bachelor’s degree. He worked in Jianglu
Machinery Factory from July 1997 to May 2005. Afterwards, he joined Zhongshan Zhongshun Paper
Manufacturing Co., Ltd. and served as an engineer in the project department from May 2005 to September 2006.
From September 2006 to October 2010, he was the Engineering Department Manager and Procurement
Department Manager of Zhejiang C&S. Since October 2010, he has been serving in the Company as the
Equipment Manager of the Engineering Department, Vice President of Equipment and Engineering Director of the
Technology Center in succession. He has been a supervisor of the Company since December 2021.
Positions in shareholder entities
√ Applicable □ Not applicable
Position held Whether receiving
in Start date of End date of term remuneration and
Name Name of shareholder entity
shareholder term of office of office allowance from
entity shareholder entity
Legal
Deng Guangdong Zhongshun Paper Group Co., representative
May 28, 1999 No
Yingzhong Ltd. and executive
director
Deng Legal
Chung Shun Co. June 01, 1996 No
Yingzhong representative
Guangdong Zhongshun Paper Group Co.,
Deng Guanbiao Supervisor May 28, 1999 No
Ltd.
Description on
None
position held in
60
C&S Paper Co., Ltd. 2021 Annual Report
shareholder
entity
Positions in other entities
√ Applicable □ Not applicable
Whether
receiving
Position held in Start date of End date of term
Name Name of other entity remuneration and
other entity term of office of office
allowance from
other entity
Deng Shenzhen Zhongshun Caizhi Investment General
No
Yingzhong Co., Ltd. Manager
Deng Bama Zhongshun Health Products Co.,
Director No
Yingzhong Ltd.
Deng Guangdong Zhongshun Paper Group Co., Executive
No
Yingzhong Ltd. Director
Shenzhen Zhongshun Caizhi Investment
Deng Guanbiao Supervisor No
Co., Ltd.
Deng Guanbiao Shenzhen Jinju Investment Co., Ltd. Director No
Zhongshan Zhongshun Caizhi Trading
Deng Guanbiao Supervisor No
Co., Ltd.
Guangdong Zhongshun Paper Group Co.,
Deng Guanbiao Supervisor No
Ltd.
Household Paper and Paperboard
Subcommittee of the National Paper
Deng Guanbiao Member No
Industry Standardization Technical
Committee
Deng Guanjie Shenzhen Jinju Investment Co., Ltd. Supervisor No
Manager and
Zhongshan Zhongshun Caizhi Trading
Deng Guanjie Executive No
Co., Ltd.
Director
Shenzhen Zhongshun Caizhi Investment Executive
Deng Guanjie No
Co., Ltd. Director
China National Household Paper Industry
Liu Peng Deputy Director No
Association
University of Electronic Science and Associate
He Haidi Yes
Technology of China, Zhongshan Institute Researcher
Guangdong Sinong Certified Public
He Guoquan Partner Yes
Accountants LLP
Liu Die Guangdong Liu Zhi Jun Law Firm Lead Lawyer Yes
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C&S Paper Co., Ltd. 2021 Annual Report
Manager,
Executive
Zhang Haijun Zhongshan Jufengbao Trading Co., Ltd. Director and Yes
Legal
Representative
Description on
position held in None
other entity
Penalties by regulatory authorities on the Company’s directors, supervisors and senior management both incumbent and resigned
during the reporting period in the last three years
□ Applicable √ Not applicable
3. Remuneration of directors, supervisors and senior management
Procedures and basis for determining the remuneration of directors, supervisors and senior management and actual payment
1. Procedure for determining the remuneration of directors, supervisors and senior management:
Remunerations of directors and senior management are determined by the Remuneration and Review Committee
under the Board of Directors. Wherein, remunerations of senior management are executed after being approved by
the Board of Directors, while those of directors should be first deliberated and approved by the Board of Directors
and then submitted to the general meeting of shareholders for approval. Remunerations of supervisors should be
first deliberated and approved by the Board of Supervisors and then submitted to the general meeting of
shareholders for approval.
2. Basis for determining the remuneration of directors, supervisors and senior management:
Remunerations of directors, supervisors and senior management are determined based on the Company’s
Remuneration Management System for Directors, Supervisors and Senior Management (April 2019) as well as
their performance appraisal results and the operational results of the Company, with reference to the remuneration
level of the industry.
3. Actual payment of remuneration to directors, supervisors and senior management
Remuneration of the Company’s incumbent non-independent directors, supervisors and senior management
comprises two parts of fixed salary and annual performance salary. Wherein, the fixed salary has been distributed
monthly based on performance appraisal results; annual performance salary will be distributed after the annual
performance appraisal of the aforementioned personnel upon the end of the business year. Independent directors
receive a fixed annual salary from the Company.
Remuneration of directors, supervisors and senior management of the Company during the reporting period
Unit: RMB10,000
Total Whether
remuneration receiving
Name Position Gender Age Position status before tax remuneration
received from the from related
Company parties of the
62
C&S Paper Co., Ltd. 2021 Annual Report
Company
Deng Yingzhong Director Male 71 Incumbent 501.64 No
Liu Peng Chairman, President Male 42 Incumbent 608.17 No
Deng Guanbiao Vice Chairman Male 44 Incumbent 102.75 No
Deng Guanjie Vice Chairman Male 38 Incumbent 153.63 No
Director, Vice
Zhang Yang Male 45 Incumbent 334.53 No
President
He Haidi Independent Director Male 54 Incumbent 10 No
He Guoquan Independent Director Male 48 Incumbent 8.8 No
Liu Die Independent Director Male 44 Incumbent 8.8 No
Yue Yong Vice President Male 56 Incumbent 303.7 No
Li Zhaojin Vice President Male 59 Incumbent 242.18 No
Deng Wenxi Vice President Female 48 Incumbent 161.56 No
Zhao Ming Vice President Male 44 Incumbent 164.17 No
Lin Tiande Vice President Male 42 Incumbent 103.75 No
Zhang Haijun Board Secretary Male 48 Incumbent 79.53 No
Dong Ye Chief Financial Officer Male 58 Incumbent 103.7 No
Chairman of the Board
Chen Haiyuan Male 68 Incumbent 5.75 No
of Supervisors
Liang Yongliang Supervisor Male 43 Incumbent 40.5 No
Zhang Gao Supervisor Male 48 Incumbent 44.39 No
Zeng Yi Director Female 46 Resigned 1.5 No
Huang Hongyan Independent Director Male 52 Resigned 0.8 No
Ge Guangrui Independent Director Female 55 Resigned 0.8 No
Director, Joint
Dai Zhenji Male 56 Resigned 136.81 No
President
Vice President,
Zhou Qichao Secretary of the Board Male 42 Resigned 67.46 No
of Directors
Li Youquan Supervisor Male 43 Resigned 14.2 No
Ye Longfang Vice President Male 46 Resigned 83.17 No
Director, Vice
Liu Jinfeng Male 46 Resigned 410.02 No
President
Total -- -- -- -- 3,692.31 --
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C&S Paper Co., Ltd. 2021 Annual Report
VI. Performance of Duties by Directors during the Reporting Period
1. Board meetings during the reporting period
Session of meeting Date of convening Date of disclosure Resolutions of the meeting
Deliberated and approved: 1. Proposal on Election of
Non-Independent Directors of the Fifth Session of the
Board of Directors; 2. Proposal on Election of
Independent Directors of the Fifth Session of the
30th Meeting of the Fourth
Board of Directors; 3. Proposal of the Company on
Session of the Board of January 05, 2021 January 06, 2021
Share Repurchase; 4. Proposal on Increasing the
Directors
Business Scope and Amending the Articles of
Association of the Company 5. Proposal of the Board
of Directors on Convening 2021 First Extraordinary
General Meeting
Deliberated and passed: 1. Proposal on Building a
New 400,000-ton Household Paper Project; 2.
31st Meeting of the Fourth
Proposal on Use of Self-owned Idle Funds for Reverse
Session of the Board of January 13, 2021 January 14, 2021
Repo of Treasury Bonds in 2021; 3. Proposal of the
Directors
Board of Directors on Convening 2021 Second
Extraordinary General Meeting
Deliberated and approved: 1. Proposal on Election of
Chairman of the Fifth Session of the Board of
Directors; 2. Proposal on Election of Vice Chairman
of the Fifth Session of the Board of Directors; 3.
Proposal on Election of Members of Special
Committees of the Fifth Session of the Board of
Directors; 4. Proposal on Appointing the President
1st Meeting of the Fifth Session
January 21, 2021 January 22, 2021 and Joint President of the Company; 5. Proposal on
of the Board of Directors
Appointing the Vice President of the Company; 6.
Proposal on Appointing the Sectary to the Board of the
Company; 7. Proposal on Appointing the Chief
Financial Officer of the Company; 8. Proposal on
Appointing the Person in Charge of the Audit
Department; 9. Proposal on Appointing the
Representative of Securities Affairs
Deliberated and approved: 1. Proposal on Appointing
the President of the Company; 2. Proposal on
Second Meeting of the Fifth By-election of Non-Independent Directors of the Fifth
Session of the Board of March 22, 2021 March 23, 2021 Session of the Board of Directors; 3. Proposal on
Directors Appointing the Additional Representative of Securities
Affairs; 4. Proposal on Amending the Working Rules of
the Strategy Committee; 5. Proposal on Amending the
64
C&S Paper Co., Ltd. 2021 Annual Report
Articles of Association of the Company; 6. Proposal of
the Board of Directors on Convening 2021 Third
Extraordinary General Meeting
Deliberated and approved: 1. Proposal on Election of
Third Meeting of the Fifth Chairman of the Fifth Session of the Board of
Session of the Board of April 12, 2021 April 13, 2021 Directors; 2. Proposal on Appointing the Vice
Directors President of the Company; 3. Proposal on By-election
of Members of the Strategy Committee
Deliberated and approved: 1. Proposal on the 2020
Annual Report and Its Summary; 2. Proposal on the
2020 Work Report of the General Manager; 3.
Proposal on the 2020 Work Report of the Board of
Directors; 4. Proposal on the 2020 Environmental,
Social and Governance (ESG) Report; 5. Proposal on
the 2020 Internal Control Assessment Report; 6.
Proposal on the 2020 Final Financial Accounts; 7.
Fourth Meeting of the Fifth
Proposal on 2020 Profit Distribution Plan; 8.
Session of the Board of April 27, 2021 April 29, 2021
Proposal on the Remuneration of Senior Management
Directors
in 2020; 9. Proposal on the Remuneration of Directors
in 2020; 10. Proposal on Appointing the Vice President
of the Company; 11. Proposal on Changing the
Business Premise and Amending the Articles of
Association of the Company; 12. Proposal of the
Board of Directors on Convening 2020 Annual
General Meeting; 13. Proposal on the Full Text and
Main Body of the First Quarter Report 2021
Deliberated and approved: 1. Deliberated the Proposal
on Adjusting the Price and Cap Amount of the
Company’s Share Repurchase; 2. Deliberated the
Proposal on Changes to Accounting Policies; 3.
Deliberated the Proposal on Appointing the Person in
Charge of the Audit Department; 4. Deliberated the
Proposal on the Phase III Employee Stock Ownership
Fifth Meeting of the Fifth Plan (Draft) and Its Summary; 5. Deliberated the
Session of the Board of May 21, 2021 May 22, 2021 Administrative Measures for the Phase III Employee
Directors Stock Ownership Plan; 6. Deliberated the Proposal on
Requesting the General Meeting of Shareholders to
Authorize the Board of Directors to Handle Matters
Relating to the Phase III Employee Stock Ownership
Plan; 7. Deliberated the Proposal on Continued
Engagement of the Accounting Firm; 8. Deliberated
the Proposal on Amending the Articles of Association
of the Company; 9. Deliberated the Proposal on
65
C&S Paper Co., Ltd. 2021 Annual Report
Amending the Rules of Procedure of the Board of
Directors; 10. Deliberated the Proposal on Amending
the Rules of Procedure of the General Meeting of
Shareholders; 11. Deliberated the Proposal on
Amending the Working Rules of the General Manager;
12. Deliberated the Proposal on Amending the Working
Rules of the Audit Committee; 13. Deliberated the
Proposal on Amending the Working Rules of the
Remuneration and Review Committee; 14. Deliberated
the Proposal on Amending the Working Rules of the
Nomination Committee; 15. Deliberated the Proposal
on Amending the Working Rules of the Strategy
Committee; 16. 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; 17. 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; 18. 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; 19.
Proposal on the Deregistration of Partial Stock
Options Awarded in the First Grant under the
Company’s 2018 Stock Option and Restricted Stock
Incentive Plan; 20. Proposal of the Board of Directors
on Convening 2021 Fourth Extraordinary General
Meeting
Sixth Meeting of the Fifth Deliberated and approved: Proposal on Adjusting the
Session of the Board of June 18, 2021 June 19, 2021 Exercise Price of Stock Options under 2018 Stock
Directors Option and Restricted Stock Incentive Plan
Seventh Meeting of the Fifth
Deliberated and approved: Proposal on Appointing the
Session of the Board of July 12, 2021 July 13, 2021
Vice President of the Company
Directors
Eighth Meeting of the Fifth
Deliberated and approved: Proposal on Adjusting the
Session of the Board of July 29, 2021 July 30, 2021
Price of the Company’s Share Repurchase
Directors
Ninth Meeting of the Fifth Deliberated and approved: Proposal on Appointing the
Session of the Board of August 23, 2021 August 24, 2021 Vice President and the Secretary to the Board of the
Directors Company
Tenth Meeting of the Fifth August 30, 2021 August 31, 2021 Deliberated and approved: Proposal on the Company’s
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C&S Paper Co., Ltd. 2021 Annual Report
Session of the Board of 2021 Semi-annual Report and Its Summary
Directors
Deliberated and approved: 1. Proposal on the
Company’s Third Quarter Report 2021 and Its
Summary; 2. Proposal on By-election of
Eleventh Meeting of the Fifth
Non-Independent Directors of the Fifth Session of the
Session of the Board of October 27, 2021 October 28, 2021
Board of Directors; 3. Proposal on Appointing the
Directors
Representative of Securities Affairs. 4. Proposal of the
Board of Directors on Convening 2021 Fifth
Extraordinary General Meeting
Deliberated and approved: 1. Proposal on By-election
of Members of the Audit Committee; 2. Proposal on
Terminating the Phase III Employee Stock Ownership
Plan; 3. Proposal on Appointing the Vice President of
the Company; 4. Proposal on Achieving the Unlock
Conditions of the Second Unlock Period for Reserved
Restricted Stocks under the Company’s 2018 Stock
Option and Restricted Stock Incentive Plan; 5.
Proposal on Achieving the Exercise Conditions of the
Second Exercise Period for Reserved Stock Options
under the Company’s 2018 Stock Option and
Restricted Stock Incentive Plan; 6. Proposal on the
Repurchase and Deregistration of Partial Reserved
Restricted Stocks under the 2018 Stock Option and
Restricted Stock Incentive Plan; 7. Proposal on the
Twelfth Meeting of the Fifth
Deregistration of Partial Reserved Stock Options
Session of the Board of November 30, 2021 December 01, 2021
under the Company’s 2018 Stock Option and
Directors
Restricted Stock Incentive Plan; 8. Proposal on
Amending the Articles of Association of the Company;
9. Proposal on the Company’s Application for Credit
Lines from Banks in 2022; 10. Proposal on the
Company’s Provision of Guarantee to Subsidiaries in
2022; 11. Proposal on Carrying Out Derivative
Trading in 2022 12. Proposal on Use of Self-owned
Idle Funds to Purchase Wealth Management Products
in 2022; 13. Proposal on Use of Self-owned Idle Funds
for Reverse Repo of Treasury Bonds in 2022; 14.
Proposal on the Company’s Provision of Credit
Guarantee to Dealers in 2022; 15. Proposal on
Routine Related Party Transactions; 16. Proposal of
the Board of Directors on Convening 2021 Sixth
Extraordinary General Meeting
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C&S Paper Co., Ltd. 2021 Annual Report
2. Directors’ attendance to Board meetings and general meetings of shareholders
Directors’ attendance to Board meetings and general meetings of shareholders
Number of
Number of
Board Number of Number of Any failure in Number of
Board
meetings Board Board attending in general
meetings Number of
Name of director required to meetings meetings person for two shareholder
attended via absence
attend during attended in attended by consecutive meetings
communicatio
the reporting person proxy meetings attended
n methods
period
Deng Yingzhong 14 5 9 0 0 No 4
Liu Peng 10 5 5 0 0 No 4
Deng Guanbiao 14 5 9 0 0 No 4
Deng Guanjie 14 5 9 0 0 No 7
Zhang Yang 1 1 0 0 0 No 1
He Haidi 14 7 7 0 0 No 6
He Guoquan 12 4 8 0 0 No 6
Liu Die 12 4 8 0 0 No 6
Ge Guangrui
2 1 1 0 0 No 1
(resigned)
Huang Hongyan
2 1 1 0 0 No 1
(resigned)
Zeng Yi (resigned) 2 0 2 0 0 No 0
Dai Zhenji
6 4 2 0 0 No 2
(resigned)
Yue Yong
3 3 0 0 0 No 1
(resigned)
Liu Jinfeng
14 3 11 0 0 No 4
(resigned)
Explanation of failure in attending in person for two consecutive meetings
There were no situations where the Company’s directors did not attend Board meetings in person for two consecutive times during
the reporting period.
3. Objections by directors to the Company’s relevant matters
Whether directors raised objections to relevant matters of the Company
□ Yes √ No
Directors did not raise objections to relevant matters of the Company during the reporting period.
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C&S Paper Co., Ltd. 2021 Annual Report
4. Other descriptions on directors’ performance of duty
Whether opinions from directors were adopted
√ Yes □ No
Description on whether opinions from directors were adopted
During the reporting period, all the directors of the Company performed their duties faithfully and diligently in
strict accordance with relevant regulations of the China Securities Regulatory Commission and Shenzhen Stock
Exchange as well as relevant provisions of the Articles of Association of the Company. They actively attended
relevant meetings on time, carefully reviewed various proposals, paid attention to the Company’s production,
operation and financial status at all times, and put forward valuable, professional opinions to the Company’s
development strategies and corporate governance improvement. All these have effectively strengthened the
Company’s standardized operation and improved its scientific decision-making level. Moreover, independent
directors of the Company have presented impartial independent opinions with regard to the Company’s share
repurchase, equity incentive plan, employee stock ownership plan, annual profit distribution, external guarantee,
estimation of routine related-party transactions, etc., which has effectively safeguarded the legitimate rights and
interests of investors especially the small and medium investors.
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C&S Paper Co., Ltd. 2021 Annual Report
VII. Particulars of the Special Committees under the Board of Directors during the Reporting Period
Number
of Other situations Specifics of
Name of
Members meetings Date of convening Contents Important opinions and suggestions raised of duty objections (if
committee
convene performance any)
d
The Strategy Committee carried out work
Strategy Deng diligently and responsibly in strict
Committee Yingzhong, Deliberated: Matters Concerning the Election accordance with relevant regulatory
under the Deng 1 January 21, 2021 of the Chairman of the Strategy Committee of requirements as well as provisions of the None None
Board of Guanbiao, Yue the Fifth Session of the Board of Directors; Articles of Association and the Working
Directors Yong, He Haidi Rules of the Strategy Committee; the
proposal was passed unanimously.
Deliberated:
1. Proposal on Appointing the President and The Nomination Committee carried out
Joint President of the Company; work diligently and responsibly in strict
2. Proposal on Appointing the Vice President accordance with relevant regulatory
of the Company; requirements as well as provisions of the
Nomination 3. Proposal on Appointing the Sectary to the Articles of Association and the Working
January 21, 2021 None None
Committee He Haidi, He Board of the Company; Rules of the Nomination Committee. The
under the Guoquan, Liu 8 4. Proposal on Appointing the Chief Financial Committee reviewed and fully discussed the
Board of Jinfeng Officer of the Company; proposals according to the actual situation
Directors of the Company; all proposals were
5. Matters Concerning the Election of the
unanimously passed.
Chairman of the Nomination Committee of the
Fifth Session of the Board of Directors;
The Nomination Committee carried out
Deliberated: Proposal on Appointing the
March 18, 2021 work diligently and responsibly in strict None None
President of the Company;
accordance with relevant regulatory
70
C&S Paper Co., Ltd. 2021 Annual Report
requirements as well as provisions of the
Articles of Association and the Working
Rules of the Nomination Committee. The
Committee reviewed and fully discussed the
proposal according to the actual situation of
the Company; the proposal was
unanimously passed.
The Nomination Committee carried out
work diligently and responsibly in strict
accordance with relevant regulatory
requirements as well as provisions of the
Deliberated: Proposal on Appointing the Vice Articles of Association and the Working
April 02, 2021 None None
President of the Company; Rules of the Nomination Committee. The
Committee reviewed and fully discussed the
proposal according to the actual situation of
the Company; the proposal was
unanimously passed.
The Nomination Committee carried out
work diligently and responsibly in strict
accordance with relevant regulatory
requirements as well as provisions of the
Deliberated: Proposal on Appointing the Vice Articles of Association and the Working
April 16, 2021 None None
President of the Company; Rules of the Nomination Committee. The
Committee reviewed and fully discussed the
proposal according to the actual situation of
the Company; the proposal was
unanimously passed.
Deliberated: Proposal on Appointing the Vice The Nomination Committee carried out
July 05, 2021 None None
President of the Company; work diligently and responsibly in strict
71
C&S Paper Co., Ltd. 2021 Annual Report
accordance with relevant regulatory
requirements as well as provisions of the
Articles of Association and the Working
Rules of the Nomination Committee. The
Committee reviewed and fully discussed the
proposal according to the actual situation of
the Company; the proposal was
unanimously passed.
The Nomination Committee carried out
work diligently and responsibly in strict
accordance with relevant regulatory
requirements as well as provisions of the
Deliberated: Proposal on Appointing the Vice
Articles of Association and the Working
August 17, 2021 President and the Secretary to the Board of the None None
Rules of the Nomination Committee. The
Company;
Committee reviewed and fully discussed the
proposal according to the actual situation of
the Company; the proposal was
unanimously passed.
The Nomination Committee carried out
work diligently and responsibly in strict
accordance with relevant regulatory
requirements as well as provisions of the
Deliberated: Proposal on By-election of
Articles of Association and the Working
October 20, 2021 Non-Independent Directors of the Fifth None None
Rules of the Nomination Committee. The
Session of the Board of Directors;
Committee reviewed and fully discussed the
proposal according to the actual situation of
the Company; the proposal was
unanimously passed.
November 12, 2021 Deliberated: Proposal on Appointing the Vice The Nomination Committee carried out None None
72
C&S Paper Co., Ltd. 2021 Annual Report
President of the Company; work diligently and responsibly in strict
accordance with relevant regulatory
requirements as well as provisions of the
Articles of Association and the Working
Rules of the Nomination Committee. The
Committee reviewed and fully discussed the
proposal according to the actual situation of
the Company; the proposal was
unanimously passed.
The Remuneration and Review Committee
carried out work diligently and responsibly
in strict accordance with relevant regulatory
Deliberated: Matters Concerning the Election requirements as well as provisions of the
of the Chairman of the Remuneration and Articles of Association and the Working
January 21, 2021 None None
Review Committee of the Fifth Session of the Rules of the Remuneration and Review
Board of Directors; Committee. The Committee reviewed and
Remuneration fully discussed the proposal according to
and Review the actual situation of the Company; the
Liu Die, He
Committee proposal was unanimously passed.
Haidi, Deng 4
under the The Remuneration and Review Committee
Guanjie
Board of carried out work diligently and responsibly
Directors in strict accordance with relevant regulatory
Deliberated:
requirements as well as provisions of the
1. Proposal on the Remuneration of Senior
Articles of Association and the Working
April 12, 2021 Management in 2020; None None
Rules of the Remuneration and Review
2. Proposal on the Remuneration of Directors
Committee. The Committee reviewed and
in 2020;
fully discussed the proposals according to
the actual situation of the Company; all
proposals were unanimously passed.
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C&S Paper Co., Ltd. 2021 Annual Report
Deliberated:
The Remuneration and Review Committee
1. Proposal on Achieving the Unlock
carried out work diligently and responsibly
Conditions of the Second Unlock Period for
in strict accordance with relevant regulatory
Restricted Stocks Awarded in the First Grant
requirements as well as provisions of the
under the Company’s 2018 Stock Option and
Articles of Association and the Working
May 18, 2021 Restricted Stock Incentive Plan; None None
Rules of the Remuneration and Review
2. Proposal on Achieving the Exercise
Committee. The Committee reviewed and
Conditions of the Second Exercise Period for
fully discussed the proposals according to
Stock Options Awarded in the First Grant
the actual situation of the Company; all
under the Company’s 2018 Stock Option and
proposals were unanimously passed.
Restricted Stock Incentive Plan;
Deliberated:
The Remuneration and Review Committee
1. Proposal on Achieving the Unlock
carried out work diligently and responsibly
Conditions of the Second Unlock Period for
in strict accordance with relevant regulatory
Reserved Restricted Stocks under the
requirements as well as provisions of the
Company’s 2018 Stock Option and Restricted
Articles of Association and the Working
November 26, 2021 Stock Incentive Plan; None None
Rules of the Remuneration and Review
2. Proposal on Achieving the Exercise
Committee. The Committee reviewed and
Conditions of the Second Exercise Period for
fully discussed the proposals according to
Reserved Stock Options under the Company’s
the actual situation of the Company; all
2018 Stock Option and Restricted Stock
proposals were unanimously passed.
Incentive Plan;
He Guoquan, The Audit Committee carried out work
Deliberated:
Audit Liu Die, Dai diligently and responsibly in strict
1. Second-time communication between the
Committee Zhenji accordance with relevant regulatory
governance layer and Mazars Certified Public
under the (resigned on 4 April 23, 2021 requirements as well as provisions of the None None
Accountants (LLP) regarding the audit of the
Board of April 28, Articles of Association and the Working
2020 financial statements;
Directors 2021), Zhang Rules of the Audit Committee. The
2. Audit Report of Q1 2021
Yang Committee reviewed and fully discussed the
74
C&S Paper Co., Ltd. 2021 Annual Report
(by-election on 3. Work Plan for Q3 2021 proposals according to the actual situation
November 30, 4. Audit Report on External Guarantees in Q1 of the Company; all proposals were
2021) 2021; Audit Report on External Investments in unanimously passed.
Q1 2021; Audit Report on the Purchase and
Sales of Assets in Q1 2021; Audit Report on
Related Party Transactions in Q1 2021; Audit
Report on the Appropriation of Funds by
Controlling Shareholder and Its Related
Parties in Q1 2021
The Audit Committee carried out work
diligently and responsibly in strict
accordance with relevant regulatory
requirements as well as provisions of the
Deliberated the proposal on engaging Mazars
Articles of Association and the Working
May 20, 2021 Certified Public Accountants (LLP) as the None None
Rules of the Audit Committee. The
audit institution for 2021 financial statements
Committee reviewed and fully discussed the
proposal according to the actual situation of
the Company; the proposal was
unanimously passed.
Deliberated: The Audit Committee carried out work
1. Report on main audit items in Q2 and Q3 diligently and responsibly in strict
2021 accordance with relevant regulatory
2. Report on the audit results regarding requirements as well as provisions of the
financial information disclosure of 2021 Articles of Association and the Working
October 27, 2021 None None
Semi-annual Report Rules of the Audit Committee. The
3. Report on supervision work in Q2 and Q3 Committee reviewed and fully discussed the
2021 proposals according to the actual situation
4. Report on supervision of bidding in Q2 and of the Company; all proposals were
Q3 2021 unanimously passed.
75
C&S Paper Co., Ltd. 2021 Annual Report
5. Audit work plan for Q4 2021
The Audit Committee carried out work
diligently and responsibly in strict
accordance with relevant regulatory
requirements as well as provisions of the
Mazars Certified Public Accountants (LLP)’s
Articles of Association and the Working
November 30, 2021 inclusion of operating income and selling None None
Rules of the Audit Committee. The
expense as the key matter of this audit
Committee reviewed and fully discussed the
proposal according to the actual situation of
the Company; the proposal was
unanimously passed.
VIII. Work of the Board of Supervisors
Whether the Board of Supervisors discovered risks in supervisory activities during the reporting period
□ Yes √ No
The Board of Supervisors had no objections to supervised events during the reporting period.
76
C&S Paper Co., Ltd. 2021 Annual Report
IX. Employees of the Company
1. Number, profession composition and education level of employees
Number of in-service employees of the Parent Company at the
1,063
end of the reporting period
Number of in-service employees of the major subsidiaries at the
5,977
end of the reporting period
Total number of in-service employees at the end of the reporting
7,040
period
Total number of employees receiving remuneration in the
7,227
reporting period
Number of retired employees whose expenses are borne by the
4
Parent Company and its major subsidiaries
Composition of professions
Type of professions Number of staff in the profession
Production staff 2,565
Sales staff 3,050
Technical staff 615
Finance staff 131
Administrative staff 679
Total 7,040
Education level
Type of education level Number of persons
University graduates or above 698
College graduates 1,609
High school graduates or below 4,733
Total 7,040
2. Remuneration policy
The Company has established the following reward and incentive policies:
1. Bonus Package Program for Marketing Team 2021 (including the remuneration program for sales management)
2. Reward Program for Team Breakthroughs of the Marketing Department 2021—Business Team
3. Indicator Competition Program of the Marketing Department 2021—Business Team
4. Reward Program for Production Team 2021
5. Indicator Competition Program of the Production Department 2021
6. Reward Program for Accounting Team 2021
77
C&S Paper Co., Ltd. 2021 Annual Report
7. Reward Program for Finance Team 2021
8. Reward Program for Supply Chain Team 2021
9. Management System of C&S Paper for Marketing Staff Promotion 2021
10. Procurement Reward Program 2021
3. Training program
Training programs carried out by the Company in 2021 are as follows:
1. 2021 Mentorship Program: Amoeba operation to achieve optimal performance; advanced coaching, downward
management (guidance and empowerment, motivation and training of subordinates) + upward management.
2. 2021 Voyage Program: Plan formulation in 2021 to achieve optimal performance; leadership, downward
management (guidance and empowerment, motivation and training of subordinates) + upward management.
3. 2021 Starter Program: Becoming effective managers, five obstacles to team collaboration, workplace
communication, seven major QC techniques, organizational planning and execution.
4. 2021 Meet Program: Corporate culture, selling points + display principles of major products, five obstacles to
team collaboration, manager role cognition and growth, establishment of efficient workplace interpersonal
relations, factory internship and factory management knowledge.
5. 2021 Commander Program: Five obstacles to team collaboration, Lead to Excellence workshop,
communication essentials (management direction).
6. 2021 Lighthouse Program: 13 online courses + 2 days offline on teaching skills and course development.
4. Labor outsourcing
□ Applicable √ Not applicable
X. Profit Distribution of the Ordinary Shares and Conversion of Capital Reserve to Share
Capital of the Company
Formulation, implementation or adjustment of profit distribution policies of ordinary shares especially the cash dividend plan in the
reporting period
√ Applicable □ Not applicable
During the reporting period, the Company strictly implemented the Articles of Association, the Dividend
Management Regulations, and the Shareholder Return Plan for the Next Three Years (2020-2022), which specified
the Company’s dividend distribution standards, ratio and decision-making procedures. This could guarantee the
continuity and stability of dividend distribution policies from an institutional perspective and fully protect the
legitimate rights and interests of minority investors.
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C&S Paper Co., Ltd. 2021 Annual Report
Special explanation on cash dividend policy
Whether the policy complies with provisions of the Articles of
Association or requirements of the resolutions made on the Yes
shareholders’ general meeting:
Whether dividend standards and ratio are definite and clear: Yes
Whether relevant decision-making procedure and mechanism are
Yes
well-established:
Whether independent directors have performed duties and played
Yes
their roles properly:
Whether minority shareholders have sufficient opportunities to
express opinions and requests, and whether their legitimate rights Yes
and interests were sufficiently protected:
Where the cash dividend policy undergoes any adjustment or
change, whether the conditions and procedures are compliant and Not applicable
transparent:
The Company gained profits in the reporting period and the retained profit of the Parent Company for holders of ordinary shares is
positive, but no plan of cash dividend is proposed
□ Applicable √ Not applicable
Profit distribution and conversion of capital reserve to share capital during the reporting period
√ Applicable □ Not applicable
Number of bonus shares for every 10 shares 0
Amount of dividend for every 10 shares (tax included)
1.00
(RMB)
Basis of the shares for distribution proposal 1,286,097,106
Amount of cash dividends (RMB) (tax included) 128,609,710.60
Cash dividend amount in other ways (such as share
661,249,972.28
repurchase) (RMB)
Total amount of cash dividends (including other ways)
789,859,682.88
(RMB)
Distributable profit (RMB) 438,410,203.56
Proportion of total cash dividends (including other
100%
ways) in distributable profit
Cash dividend of the reporting period
If the Company is in the growth period and there are major capital expenditure arrangements, when the profit is distributed, the
proportion of cash dividends in this profit distribution should be at least 20%.
Details of the profit distribution proposal or share conversion proposal from capital reserve
1. Profit distribution plan in 2019: Based on the number of shares of the Company’s total share capital minus the number of
repurchased shares as at the equity registration date of the implementation of this profit distribution plan, distribute a cash dividend
79
C&S Paper Co., Ltd. 2021 Annual Report
of RMB0.75 (tax included) for every 10 shares to all shareholders; no bonus shares will be issued and no capital reserve will be
converted into share capital.
2. Profit distribution plan in 2020: Based on the number of shares of the Company’s total share capital minus the number of
repurchased shares as at the equity registration date of the implementation of this profit distribution plan, distribute a cash dividend
of RMB1.00 (tax included) for every 10 shares to all shareholders; no bonus shares will be issued and no capital reserve will be
converted into share capital.
In addition, the Company conducted share repurchase in 2020 and ended the share repurchase plan on May 21, 2020. A total of
1,895,900 shares were repurchased, with a total amount of RMB27,680,721.76. Article 7 of the SZSE Guidelines No. 9 for the
Self-discipline and Supervision of Listed Companies—Repurchase of Shares stipulates that “Where a listed company uses cash as
the consideration and repurchases shares through offer or centralized bidding, the amount paid for share repurchase shall be deemed
as cash dividend, which shall be included in the calculation of relevant cash dividend ratios of the year”. Therefore, the amount
paid by the Company for share repurchase, i.e. RMB27,680,721.76, is considered as cash dividend.
3. Profit distribution proposal in 2021: Based on the number of shares of the Company’s total share capital minus the number of
repurchased shares as at the equity registration date of the implementation of this profit distribution plan, distribute a cash dividend
of RMB1.00 (tax included) for every 10 shares to all shareholders; no bonus shares will be issued and no capital reserve will be
converted into share capital.
In addition, the Company conducted share repurchase in 2021 and repurchased a total of 24,863,087 shares from January 27, 2021
to November 24, 2021, with a total amount of RMB661,249,972.28. Article 7 of the SZSE Guidelines No. 9 for the Self-discipline
and Supervision of Listed Companies—Repurchase of Shares stipulates that “Where a listed company uses cash as the consideration
and repurchases shares through offer or centralized bidding, the amount paid for share repurchase shall be deemed as cash dividend,
which shall be included in the calculation of relevant cash dividend ratios of the year”. Therefore, the amount paid by the Company
for share repurchase, i.e. RMB661,249,972.28, is considered as cash dividend.
Note: The above table uses the total share capital as of March 31, 2022 minus the number of shares repurchased by the Company as
the basis for calculation. According to the principle of distribution ration remaining unchanged, the number at implementation will
be adjusted based on the total share capital as at the equity registration date of the implementation of the profit distribution plan,
and the specific amount shall be subject to the actual distribution.
XI. Implementation of the Stock Incentive Plan, Employee Stock Ownership Plan, and Other
Employee Incentives of the Company
√ Applicable □ Not applicable
1. Equity incentive
On May 21, 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
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C&S Paper Co., Ltd. 2021 Annual Report
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 June 18, 2021, the Company held the 6th meeting of the fifth session of the Board of Directors and the 4th
meeting of the fifth session of the Board of Supervisors, which reviewed and approved the Proposal on Adjusting
the Exercise Price of Stock Options. 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.
On October 27, 2021, the repurchase and cancellation procedures for 2,021,305 first-granted restricted shares that
had been granted but not unlocked were completed at the Shenzhen Branch of China Securities Depository and
Clearing Corporation Limited.
On November 30, 2021, the Company convened the 12th meeting of the fifth session of the Board of Directors
and the 7th 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 Reserved Restricted Stocks under the
Company’s 2018 Stock Option and Restricted Stock Incentive Plan. A total of 37 incentive recipients of the
reserved restricted stocks met the unlock conditions of the second unlock period, and the number of stocks that
could be applied for unlock was 714,832. The unlock date was December 14, 2021. The above meetings also
reviewed and approved the Proposal on Achieving the Exercise Conditions of the Second Exercise Period for
Reserved Stock Options under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan. A total of 70
incentive recipients of the reserved stock options met the exercise conditions of the second exercise period, and
the number of options that could be exercised was 609,375. In addition, the Proposal on the Repurchase and
Deregistration of Partial Reserved Restricted Stocks under the Company’s 2018 Stock Option and Restricted Stock
Incentive Plan was also reviewed and approved. The Company agreed to repurchase and deregister 139,428
restricted shares that had been granted but not unlocked. In addition, the Proposal on the Repurchase and
Deregistration of Partial Reserved Stock Options under the Company’s 2018 Stock Option and Restricted Stock
Incentive Plan was also considered and approved. The Company agreed to deregister 105,525 stock options that
had been granted but not exercised.
On December 7, 2021, the cancellation procedures for 105,525 reserved stock options that had been granted but
not exercised were completed at the Shenzhen Branch of China Securities Depository and Clearing Corporation
Limited.
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C&S Paper Co., Ltd. 2021 Annual Report
On March 15, 2022, the cancellation procedures for 139,428 reserved restricted shares that had been granted but
not unlocked were completed at the Shenzhen Branch of China Securities Depository and Clearing Corporation
Limited.
Please continue to pay attention to the Company’s relevant announcements for subsequent implementation
progress or changes.
Equity incentives granted to directors and senior management during the reporting period
√ Applicable □ Not applicable
Unit: share
Number
Number
of Number
of
shares of
Numbe Number shares Grant
Number of Number Exercise Number subject Number shares
r of of Market subject price of
stock of price of of stock to of subject
stock shares price at to shares
options shares shares options selling shares to
options exercisa the end selling subject
Name Position held at the exercise exercise held at restricti unlocke selling
newly ble of the restricti to
beginning d during d during the end ons at d during restricti
granted during reportin ons selling
of the the the of the the the ons at
in the the g period newly restricti
period period period period beginni period the end
period period granted ons
ng of of the
in the
the period
period
period
Director,
Zhang
Vice 210,000 90,000 120,000
Yang
President
Vice
Yue Yong 770,000 330,000 440,000
President
Chief
Dong Ye Financial 35,000 15,000 15,000 8.472 20,000 16.71 105,000 45,000 60,000
Officer
Vice
Lin Tiande 45,500 19,500 26,000
President
Zhao Vice
35,000 15,000 20,000
Ming President
Zhang
Supervisor 38,500 16,500 22,000
Gao
Ye
Vice
Longfang 350,000 150,000 350,000 16.71
President
(resigned)
Dai Zhenji Director, 1,400,0
700,000 300,000 300,000 8.572 0 16.71 0 0
(resigned) Joint 00
82
C&S Paper Co., Ltd. 2021 Annual Report
President
Liu Director,
Jinfeng Vice 700,000 300,000 700,000 16.71 756,000 324,000 432,000
(resigned) President
1,070,0 3,360,0 1,120,0
Total -- 1,785,000 0 765,000 315,000 -- -- 840,000 0 --
00 00 00
1. During the second exercise period for stock options awarded in the first grant and reserved stock options
under the 2018 Stock Option and Restricted Stock Incentive Plan, the exercise ratio was 30% and the start dates
for exercise was June 30, 2021 and December 14, 2021, respectively. Mr. Dong Ye and Mr. Dai Zhenji exercised
the rights during the reporting period while Mr. Liu Jinfeng and Ye Longfang did not exercise the rights during
the reporting period.
2. During the second unlocking period for restricted stocks awarded in the first grant and reserved restricted
stocks under the 2018 Stock Option and Restricted Stock Incentive Plan, the unlocking ratio was 30% and the
Remarks (if any)
dates of releasing from sales restrictions were June 30, 2021 and December 14, 2021, respectively. The restricted
shares held by the above staff at the beginning of the period have been unlocked as per 30%.
3. Mr. Dai Zhenji resigned on April 28, 2021. As of the end of the reporting period, the Company has
repurchased and deregistered the restricted shares and stock options awarded to him but not yet unlocked.
4. Mr. Ye Longfang resigned on October 27, 2021. Stock options awarded to him but not yet exercised will be
deregistered in accordance with relevant regulations.
5. Mr. Liu Jinfeng resigned his positions of director and Vice President on March 23, 2022.
Performance appraisal and incentives of senior management
The Company comprehensively appraises the performance of senior executives in compliance with provisions of
the Remuneration Management System for Directors, Supervisors and Senior Management and in combination
with annual financial budgets, production and operation indicators and the attainment of management objectives.
Their individual incomes are linked with the business performance of the Company. During the reporting period,
incentives to the Company’s senior management mainly included remuneration incentive, equity incentive plan
and employee stock ownership plan, with a purpose of effectively stimulating the work enthusiasm of the senior
management, promoting the steady improvement of the Company’s performance, achieving its development
strategies and business objectives, and maintaining a steady and sound development.
The Company rolled out the second phase equity incentive plan in December 2018 under which employees were
motived in the form of restricted shares + stock options. The unlocking/exercise for the second phase was
completed during the reporting period.
The Company introduced the second phase employee stock ownership plan in 2019 to motivate directors, senior
executives and backbone employees. The liquidation and distribution of the plan were completed in January 2021.
2. Implementation of the employee stock ownership plan
√ Applicable □ Not applicable
All valid employee stock ownership plans during the reporting period
Scope of employees Number of Total shares held Changes Proportion to Source of
83
C&S Paper Co., Ltd. 2021 Annual Report
entitled the total share funds for
employees capital of the implementing
listed company the plan
The Company convened the 18th meeting Employees’
of the fourth session of the Board of legitimate
Directors on November 11, 2019, which remuneration,
reviewed and approved the Proposal on the self-raised
Directors, senior
Phase II Employee Stock Ownership Plan funds and
executives and
66 11,709,583 (Draft) and Its Summary. In accordance 0.91% other
backbone employees
with market conditions, the Company methods
of the Company
canceled financing from banks, with all permitted by
funds being raised by participants laws and
themselves. Relevant terms and provisions administrativ
were revised at the same time. e regulations
Shareholdings of directors, supervisors and senior management in the Employee Stock Ownership Plan during the reporting period
Number of shares held at Number of shares held at Proportion to the total
Name Position the beginning of the the end of the reporting share capital of the listed
reporting period period company
Deng Yingzhong Director 1,810,402 0 0.00%
Deng Guanbiao Vice Chairman 724,161 0 0.00%
Deng Guanjie Vice Chairman 724,161 0 0.00%
Zhang Yang Director, Vice President 460,083 0 0.00%
Yue Yong Vice President 724,161 0 0.00%
Lin Tiande Vice President 12,069 0 0.00%
Dong Ye Chief Financial Officer 241,387 0 0.00%
Dai Zhenji (resigned) Director, Joint President 724,161 0 0.00%
Board Secretary, Vice
Zhou Qichao (resigned) 724,161 0 0.00%
President
Ye Longfang (resigned) Vice President 362,080 0 0.00%
Liu Jinfeng (resigned) Director, Vice President 724,161 0 0.00%
Changes in asset management institution during the reporting period
□ Applicable √ Not applicable
Changes in equity due to disposal of shares by holders during the reporting period
□ Applicable √ Not applicable
Exercise of shareholder rights during the reporting period
None
Other situations of the employee stock ownership plan during the reporting period and explanation
√ Applicable □ Not applicable
The lockup period for the Phase II Employee Stock Ownership Plan expired on November 28, 2020. As of
84
C&S Paper Co., Ltd. 2021 Annual Report
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, the implementation of the Phase II Employee Stock
Ownership Plan is completed and thus terminated
Changes in the members of the management committee of the employee stock ownership plan
□ Applicable √ Not applicable
Financial impact of the employee stock ownership plan on the listed company during the reporting period and related accounting
treatment
□ Applicable √ Not applicable
Termination of employee stock ownership plan during the reporting period
√ Applicable □ Not applicable
The Company held the 5th meeting of the fifth session of the Board of Directors and the Fourth Extraordinary
General Meeting on May 21 and June 7, 2021, respectively, which considered and approved the Proposal on the
Phase III Employee Stock Ownership Plan (Draft) and Its Summary and other relevant proposals. As such, the
implementation of the Phase III Employee Ownership Plan was approved.
On November 30, 2021, the Company convened the 12th meeting of the fifth Session of the Board of Directors
and the 7th meeting of the fifth Session of the Board of Supervisors, which reviewed and approved the Proposal
on Terminating the Phase III Employee Stock Ownership Plan. Ever since review procedures for the Phase III plan
were complement, the management of the Company has been actively promoting its implementation and has
communicated with employee representatives many times regarding its specific implementation. Employees
participating in this Plan fully recognize the original intention of the Plan. The Company has held internal
communication meetings and actively communicated with financial institutions to carry out financing work.
However, considering changes in relevant financial policies plus market reasons, it is difficult to continue pushing
forward the Plan. To better safeguard the interests of the Company, shareholders and employees, the Company has
decided to terminate the Phase III Employee Stock Ownership Plan upon careful consideration in accordance with
relevant regulations.
Other description: None
3. Other employee incentives
□ Applicable √ Not applicable
XII. Construction and Implementation of Internal Control Systems during the Reporting
Period
1. Internal control construction and implementation
During the reporting period, the Company continued to improve its internal control system and strengthen the
supervision function of internal audit. It streamlined and improved the functions and responsibilities of the Audit
Committee and internal audit departments and solidified the supervision power under the leadership of the Board
of Directors. Supervision was strengthened with regard to internal audit department’s implementation of the
85
C&S Paper Co., Ltd. 2021 Annual Report
internal control system, while the depth and breadth of internal audit work were enhanced. In addition, the
Company continued to strengthen the internal control awareness and responsibilities of executives and employees,
so that they fully understand the importance of a complete internal control system in improving corporate
management, enhancing risk prevention and control and facilitating the high-quality quality of enterprises. The
Company also solidified the compliance operation awareness to ensure the effective enforcement of the internal
control system, improve standardized operation level and enable healthy and sustainable corporate development.
Based on the identification of material internal control defects of the financial report category, the Company has
no material internal control defect of financial reports as at the base date of the internal control assessment report.
The Company has maintained effective internal control over financial reporting in accordance with requirements
of the enterprise internal control standard system and other relevant regulations. Based on the identification of
material internal control defects of the non-financial report category, the Company has no material internal control
defect of non-financial reports as at the base date of the internal control assessment report.
2. Particulars of material internal control defects detected during the reporting period
□ Yes √ No
XIII. Management and Control of the Company for Subsidiaries during the Reporting Period
Name of Integration Solution Subsequent
Integration plan Problems in integration Solutions taken
company progress progress solution plan
Not
Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable
applicable
XIV. Self-assessment Report on Internal Control or Internal Control Audit Report
1. Self-assessment report on internal control
Date of disclosure of the full text of
the internal control assessment April 28, 2022
report
Disclosure index of full text of the Please refer to the 2021 Self-assessment Report on Internal Control of C&S Paper Co., Ltd.
internal control assessment report published on CNINFO (http://www.cninfo.com.cn) for details.
Percentage of total assets of units
included in the assessment scope to
99.73%
the total assets in the Company’s
consolidated financial statements
Percentage of total operating
income of units included in the
99.96%
assessment scope to the operating
income in the Company’s
86
C&S Paper Co., Ltd. 2021 Annual Report
consolidated financial statements
Defect identification criteria
Category Financial report Non-financial report
Material defect: refers to one or a combination of
control defects that may cause the Company to
materially deviate from the objectives of internal
control. When there are one or several material
defects in internal control, it should be concluded
that the internal control is invalid in the internal
control assessment report.
(1) Directors, supervisors and senior management
Non-financial report defects are
have committed fraud and caused serious losses and
identified mainly based on their degree
severe adverse impacts to the company.
of impact on business processes and their
(2) Corrections were made to published financial
probability of occurrence.
reports due to significant accounting errors.
A defect is termed as a general defect if
(3) Significant errors in the current financial reports
its probability of occurrence is low or the
were identified by the certified public accountants
defect reduces work efficiency or
but not by internal control.
effectiveness, or increases the
(4) The internal control and supervision by the
uncertainty of effects or causes
company’s audit committee and internal audit were
deviations from expected objectives.
invalid, or significant problems were found but not
A defect is termed as a major defect if its
corrected.
probability of occurrence is relatively
Qualitative criteria Major defect: refers to one or a combination of
high or the defect significantly reduces
defects in internal control that is with less severity
work efficiency or effectiveness, or
than a material defect, but may still cause the
significantly increases the uncertainty of
Company to deviate from the objectives of internal
effects or causes obvious deviations from
control. A major defect is less severe than a material
expected objectives.
defect and would not seriously endanger the overall
A defect is termed as a material defect if
effectiveness of internal control, but should arouse
its probability of occurrence is high or
the sufficient attention of the board of directors and
the defect severely reduces work
mangers.
efficiency or effectiveness, or severely
(1) Failure to select and apply accounting policies
increases the uncertainty of effects or
based on generally accepted accounting standards;
causes severe deviations from expected
(2) There were one or multiple defects in the
objectives.
financial reports of the current period that did not
meet the criteria for material defect.
(3) There were one or multiple defects in the
control of the financial reporting process at the end
of the period such that the authenticity and
completeness of the prepared financial reports
could not be reasonably guaranteed.
General defect: refers to defects other than material
87
C&S Paper Co., Ltd. 2021 Annual Report
defect or major defect.
General defect: The direct property
losses are less than 0.5% of operating
General defect: The misstated amount is less than
income.
0.5% of operating income.
Major defect: The direct property losses
Major defect: The misstated amount is between
Quantitative criteria are between 0.5% (inclusive) and 1.5%
0.5% (inclusive) and 1.5% of the operating income.
of operating income.
Material defect: The misstated amount is more than
Material defect: The direct property
1.5% (inclusive) of operating income.
losses are more than 1.5% (inclusive) of
operating income.
Number of material defects in
0
financial reports
Number of material defects in
0
non-financial reports
Number of major defects in
0
financial reports
Number of major defects in
0
non-financial reports
2. Internal control audit report
□ Applicable √ Not applicable
XV. Rectification of Detected Problems in the Corporate Governance Special Action of Listed
Companies
Not applicable
88
C&S Paper Co., Ltd. 2021 Annual Report
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
Implemente
Name of Main pollutants Number of Total
Concentration of d pollutant Total Excessive
company or and particular Ways of discharge discharge Distribution of discharge outlets approved
discharge discharge discharge discharge
subsidiary pollutants outlets discharge
standards
Discharge directly to the
Waste water - Centralized processing facilities in the
Jiangmen C&S centralized sewage treatment 1 31.873 mg/L 200 mg/L 13.751t 335.600 t/a None
COD factory
plant
Waste water - Discharge directly to the
Centralized processing facilities in the
Jiangmen C&S Ammonium centralized sewage treatment 1 2.576 mg/L 8 mg/L 1.111t 13.4 t/a None
factory
nitrate plant
Discharge directly to the
Waste water - Centralized processing facilities in the
Jiangmen C&S centralized sewage treatment 1 7.949 mg/L 12 mg/L 3.43t / None
Total nitrogen factory
plant
Discharge directly to the
Waste water - Centralized processing facilities in the
Jiangmen C&S centralized sewage treatment 1 0.045 mg/L 0.8 mg/L 0.019t / None
Total phosphorus factory
plant
Discharge to the water Production waste water discharge
Waste water - purification station through (DW001) flows through the channel
Sichuan C&S 1 48 mg/L 80 mg/L 50.188t 96 t/a None
COD urban sewage pipeline after into the main outlet DW002 (confluent
treatment with domestic waste water)
89
C&S Paper Co., Ltd. 2021 Annual Report
Discharge to the water Production waste water discharge
Waste water -
purification station through (DW001) flows through the channel
Sichuan C&S Ammonium 1 0.203 mg/L 8 mg/L 0.2121t 9.6 t/a None
urban sewage pipeline after into the main outlet DW002 (confluent
nitrate
treatment with domestic waste water)
1# boiler 2.5
Waste gas - PM Three chimneys (2# boiler is the mg/m
Discharge directly through the
Sichuan C&S (particulate 3 standby boiler, monitoring when being 2# boiler 0 mg/m 20 mg/Nm3 0.2738t / None
flue
matter) used) 3# boiler 2.7
mg/m
1# boiler 27
Three chimneys (2# boiler is the mg/m
Waste gas - Discharge directly through the
Sichuan C&S 3 standby boiler, monitoring when being 2# boiler 0 mg/m 150 mg/Nm3 5.0359t 31.35 t/a None
Nitrogen oxide flue
used) 3# boiler 29
mg/m
Three chimneys (2# boiler is the
Waste gas - Sulfur Discharge directly through the
Sichuan C&S 3 standby boiler, monitoring when being 0 50 mg/Nm3 0 / None
dioxide flue
used)
Discharge to Jiaxing Industrial
Waste water - Sewage Treatment Plant Centralized processing facilities in the 9.7551
Zhejiang C&S 1 49.02 mg/L 500 mg/L 13.97 t/a None
COD through municipal pipe after factory mg/L
treatment
Discharge to Jiaxing Industrial
Waste water -
Sewage Treatment Plant Centralized processing facilities in the
Zhejiang C&S Ammonium 1 2.069 mg/L 35 mg/L 0.43 mg/L 9.78 t/a None
through municipal pipe after factory
nitrate
treatment
Discharge to the Lvyuan
Waste water - Main outlet of the zone (Lvyuan
Tangshan C&S Sewage Treatment Plant in the 1 28.3 mg/L ≤ 50mg/L 7.4t 16.5 t/a None
COD Sewage Treatment Plant)
zone after being treated by the
90
C&S Paper Co., Ltd. 2021 Annual Report
plant sewage treatment station
Discharge to the Lvyuan
Waste water -
Sewage Treatment Plant in the Main outlet of the zone (Lvyuan
Tangshan C&S Ammonium 1 0.466 mg/L ≤ 5mg/L 0.124t 1.65 t/a None
zone after being treated by the Sewage Treatment Plant)
nitrate
plant sewage treatment station
Waste gas - PM
Discharge directly through the
Tangshan C&S (particulate 1 One chimney 2.2 mg/m3 ≤ 5 mg/m3 0.17t 2.46 t/a None
flue
matter)
Waste gas - Discharge directly through the
Tangshan C&S 1 One chimney 20.54 mg/m3 ≤ 30 mg/m3 1.6t 18.46 t/a None
Nitrogen oxide flue
Waste gas - Sulfur Discharge directly through the
Tangshan C&S 1 One chimney 0 mg/m3 ≤ 10 mg/m3 0 6.15 t/a None
dioxide flue
Discharge indirectly
Discharge to Biquan Sewage Treatment
(discharge to Biquan Sewage
Waste water - Plant after pre-processing with
Hubei C&S Treatment Plant through 1 133 mg/L ≤ 400mg/L 51.33 t/a 152.25 t/a None
COD centralized processing facilities in the
municipal pipe after
factory,
treatment)
Discharge indirectly
Discharge to Biquan Sewage Treatment
Waste water - (discharge to Biquan Sewage
Plant after pre-processing with
Hubei C&S Ammonium Treatment Plant through 1 7.13 mg/L ≤ 30mg/L 3.55 t/a 15.25 t/a None
centralized processing facilities in the
nitrate municipal pipe after
factory,
treatment)
Organized discharge
Waste gas - PM (dedusting by bag filter,
Hubei C&S (particulate desulfurization by 1 One chimney 9.69 mg/m3 ≤ 30 mg/m3 10.09 t/a 28.63 t/a None
matter) limestone-gypsum and
denitration by SNCR)
Hubei C&S Waste gas - Sulfur Organized discharge 1 One chimney 56 mg/m3 ≤ 200 63.87 t/a 203.87 t/a None
91
C&S Paper Co., Ltd. 2021 Annual Report
dioxide (dedusting by bag filter, mg/m3
desulfurization by
limestone-gypsum and
denitration by SNCR)
Organized discharge
(dedusting by bag filter,
Waste gas - ≤ 200
Hubei C&S desulfurization by 1 One chimney 86 mg/m3 86.49 t/a 239.85 t/a None
Nitrogen oxide mg/m3
limestone-gypsum and
denitration by SNCR)
Waste water -
Yunfu C&S Discharge directly 1 Sewage treatment station in the factory ≦80 mg/l 80 mg/L 70.66 t/a 197.71 t/a None
COD
Waste water -
Yunfu C&S Ammonium Discharge directly 1 Sewage treatment station in the factory ≦8 mg/l 8 mg/L 7.01 t/a 19.76 t/a None
nitrate
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C&S Paper Co., Ltd. 2021 Annual Report
Construction and operation of pollution prevention and control facilities
(1) Duty toward compliance: The Company and its subsidiaries and branches 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 or branch has a
complete array 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 or branch 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 C&S, Zhejiang C&S, Hubei C&S and Tangshan
C&S 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 C&S enters water purification station through
urban sewage pipeline. The sewage of Yunfu C&S, after treated by the company’s sewage treatment station and
reaching the standard, is discharged in an organized manner.
(3) Online monitoring and operation of water treatment facilities: Five subsidiaries or branches in Sichuan,
Zhejiang, Tangshan, Yunfu and Hubei have all installed on-line sewage monitoring facilities, which are directly
supervised by local environmental protection bureau. The sewage of Tangshan C&S, after centralized treatment in
the subsidiary, is discharged to the sewage plant of the local paper industry base without any other sewage outlet.
The company has its own monitoring facilities for internal control reference. After the centralized treatment within
the company, the sewage of Jiangmen C&S is discharged to the sewage plant of the local paper industry base;
there is no other sewage outlet and no online monitoring facilities. The environmental protection bureau goes to
the company regularly every quarter to compare the on-line monitoring data, which all meet the requirements.
(4) Boiler waste gas emission: Sichuan C&S and Tangshan C&S are equipped with natural gas boilers. Hubei
C&S 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 and branches completed the renewal and change of the
pollutant discharge permit in June 2021.
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C&S Paper Co., Ltd. 2021 Annual Report
(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
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 items: main
discharge outlet of waste water (COD, ammonium nitrate, flow rate, PH, total nitrogen); Manual monitoring items:
BOD, SS and chroma indicators are monitored daily or weekly; 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, soot,
mercury and their compounds. The testing frequency is in compliance with the requirements of regulations.
(4) The self-monitoring data of pollutant discharge and environmental monitoring plans are disclosed on
provincial disclosure websites for key pollution source information while paper reports are submitted to the
Environmental Protection Bureau for archival.
Administrative penalties due to environmental issues during the reporting period
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C&S Paper Co., Ltd. 2021 Annual Report
Impact on production and Rectification
Name of company or Reason of
Violation Penalty result operation of the listed measures of the
subsidiary penalty
company Company
Not applicable Not applicable Not applicable Not applicable Not applicable Not applicable
Other environmental information that should be disclosed
(1) Emission permit information and environmental protection information related to emission permit
requirements are available on national emission permit management information platform; in the event that
competent government departments in the localities of the subsidiaries and branches have additional requirements,
such information is published on the platform for environmental information reporting prescribed by the local
government authority.
(2) Other environmental protection-related information is available in the "News" section of the Company’s
website.
Measures taken to reduce carbon emissions during the reporting period and their effects
√ Applicable □ Not applicable
In order to further reduce pollution, improve resource utilization efficiency and reduce production costs as well as
heat consumption and emission, Zhejiang C&S, under the advocacy of competent local government departments,
implemented 19 cleaner production programs, which achieved tangible results and attained the expected goals for
cleaner production and carbon reduction.
Other relevant information on environmental protection: None
II. Corporate Social Responsibilities
The Company actively fulfills and discloses corporate social responsibilities (CSR). Abiding by the principle of
integrity and its commitments, it strives to safeguard the legitimate rights and interests of all stakeholders
including shareholders, employees, consumers, partners and the society at large and thereby makes due
contribution to sustainable development of the society and the environment. For details on CSR fulfillment, please
refer to the Company’s 2021 Environmental, Social and Governance (ESG) Report published on the designated
information disclosure media www.cninfo.com.cn.
III. Efforts Regarding Poverty Alleviation and Rural Revitalization
As a nation enterprise with important social influence and a leading enterprise in the household paper industry, the
Company actively responds to the call of national policies to consolidate and expand poverty alleviation and rural
revitalization work. 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 June 2021, Jiangmen C&S organized party members to visit 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 participated in the fundraising activity of “Dr. Huang Kejing
School Smart Blackboard Program” organized by the local education promotion association and contributed
RMB50,000.
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C&S Paper Co., Ltd. 2021 Annual Report
3. In November 2021, Jiangmen C&S donated RMB30,000 to support the road construction project of the Yaqian
Villagers Committee, Shuangshui Town.
4. In December 2021, Sichuan C&S participated in the “Ten Thousand Enterprises Aiding Ten Thousand Villages”
– Heishui County Revitalization Project organized by Pengzhou Municipal Federation of Industry and Commerce
and donated RMB5,000.
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C&S Paper Co., Ltd. 2021 Annual Report
Section VI Significant Events
I. Implementation of Commitments
1. 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
Type of Time of Term of Fulfillment of
Cause of Commitment Undertaking Party Content of commitment
commitment commitment commitment commitment
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
Commitments transfer more than 25% of the total shares of the Company they hold each year
Commitments made Directors,
of shares during the term of office. If they leave office before the expiry of the term of
during the initial supervisors, and Strictly
subject to office, they promise not to transfer more than 25% of the total shares of the November 25, 2010 Long-term
public offering or senior observed
selling Company they hold each year within the term of office and within six months
refinancing management
restrictions 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
97
C&S Paper Co., Ltd. 2021 Annual Report
after they leave office.
He promises not to sell all their shares (including shares obtained from exercise During the
Other and other shares) within six months after the end of the exercise of the last implementation Strictly
Liu Jinfeng November 12, 2020
commitments stock options. Besides, they promise to strictly conform to stock trading-related of the equity observed
Equity incentive laws and regulations. incentive plan
commitments They promise not to sell all their shares (including shares obtained from During the
Dong Ye, Ye Other exercise and other shares) within six months after the end of the exercise of the implementation Strictly
June 25, 2021
Longfang commitments last stock options. Besides, they promise to strictly conform to stock of the equity observed
trading-related laws and regulations. incentive plan
Deng Yingzhong,
Deng Guanbiao,
Not-to-compet
Deng Guanjie, and Strictly
e They promise not to compete with the Company in the same business. January 01, 2009 Long-term
Guangdong observed
commitments
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
C&S Paper Co., Cash dividend characteristics, development stage, business model, profitability, and major Strictly
August 28, 2014 Long-term
Other commitments to Ltd. commitments capital spending (if any), distinguish the following circumstances, and propose observed
minority shareholders differentiated cash dividend policies in compliance with the procedures
stipulated in the Articles of Association.
The Company
reviewed and
passed the share
The 2019 repurchase plan was terminated due to objective reasons. The
C&S Paper Co., Other repurchase plan
Company will perform the necessary procedures and immediately restart the May 21, 2020 Completed
Ltd. commitments on January 5,
repurchase work upon the end of the exercise period.
2021, and will
continue the
share repurchase
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C&S Paper Co., Ltd. 2021 Annual Report
plan/
Within six
months from the
He promises not to reduce any shares of the Company he holds within six completion of
Other months upon the completion of the share increase plan, not to engage in insider the share
Deng Yingzhong November 04, 2020 Completed
commitments trading and short-term trading, and not to trade shares of the Company during increase plan
sensitive periods in strict accordance with relevant laws and regulations. (November 05,
2020 - May 04,
2021)
Within six
months from the
He promises not to reduce any shares of the Company he holds within six completion of
Other months upon the completion of the share increase plan, not to engage in insider the share
Chen Haiyuan May 18, 2021 Completed
commitments trading and short-term trading, and not to trade shares of the Company during increase plan
sensitive periods in strict accordance with relevant laws and regulations. (May 29, 2021 -
November 28,
2021)
Within six
months from the
He promises not to reduce any shares of the Company he holds within six completion of
Other months upon the completion of the share increase plan, not to engage in insider the share
Li Zhaojin May 12, 2021 Completed
commitments trading and short-term trading, and not to trade shares of the Company during increase plan
sensitive periods in strict accordance with relevant laws and regulations. (May 19, 2021 -
November 18,
2021)
He promises not to reduce any shares of the Company he holds within six Within six
Other months upon the completion of the share increase plan, not to engage in insider months from the
Liu Peng May 13, 2021 Completed
commitments trading and short-term trading, and not to trade shares of the Company during completion of
sensitive periods in strict accordance with relevant laws and regulations. the share
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C&S Paper Co., Ltd. 2021 Annual Report
increase plan
(May 14, 2021 -
November 13,
2021)
Within six
months from the
He promises not to reduce any shares of the Company he holds within six completion of
Other months upon the completion of the share increase plan, not to engage in insider the share
Li Youquan May 11, 2021 Completed
commitments trading and short-term trading, and not to trade shares of the Company during increase plan
sensitive periods in strict accordance with relevant laws and regulations. (May 12, 2021 -
November 11,
2021)
Within six
months from the
She promises not to reduce any shares of the Company he holds within six completion of
Other months upon the completion of the share increase plan, not to engage in insider the share
Deng Wenxi May 11, 2021 Completed
commitments trading and short-term trading, and not to trade shares of the Company during increase plan
sensitive periods in strict accordance with relevant laws and regulations. (May 13, 2021 -
November 12,
2021)
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,
Other May 10, 2021 - Strictly
Deng Yingzhong 2022 while still serving in the Company by then, any losses incurred from the May 07, 2021
commitments June 30, 2022 observed
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
Deng Yingzhong,
Other in the Company in any way from May 9, 2021 to May 30, 2022, including new May 10, 2021 - Strictly
Deng Guanbiao, May 09, 2021
commitments shares added due to the transfer of capital reserve into share capital or May 30, 2022 observed
Deng Guanjie
distribution of stock dividends for the aforementioned shares during the
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C&S Paper Co., Ltd. 2021 Annual Report
commitment period. For any violation of the above commitment, all the
incurred earnings will belong to the Company.
Liu Peng, Chen
Haiyuan, Liang They promise not to reduce or pledge any shares they hold directly or indirectly
Yongliang, Li in the Company from the date when the Letter of Commitment is signed (i.e.
Youquan, Yue May 14, 2021) to December 31, 2021, including new shares added due to the May 14, 2021 -
Other
Yong, Zhou transfer of capital reserve into share capital or distribution of stock dividends May 14, 2021 December 31, Completed
commitments
Qichao, Ye for the aforementioned shares during the commitment period. For any violation 2021
Longfang, Dong of the above commitment, all the incurred earnings will belong to the
Ye, Li Zhaojin, Company.
and Deng Wenxi
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
months from the last reduction of the Company’s shares in 2021 (i.e. February February 05,
Other Strictly
Zhou Qichao 5, 2021), including new shares added due to the transfer of capital reserve into July 10, 2021 2021 - February
commitments observed
share capital or distribution of stock dividends for the aforementioned shares 4, 2022
during the commitment period. For any violation of the above commitment, all
the incurred earnings will belong to the Company.
Whether commitments
Yes
are fulfilled on time
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C&S Paper Co., Ltd. 2021 Annual Report
2. If there are assets or projects of the Company which have profit forecast while the reporting period is
still in the forecast period, the Company should state whether the assets or projects have attained the profit
forecast and explain reasons
□ Applicable √ Not applicable
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.
VI. Explanation by the Board of Directors of the “Non-standard Audit Report” of the Latest
Period
□ Applicable √ Not applicable
V. Explanation by the Board of Directors, the Board of Supervisors, and Independent
Directors (if any) of the "Non-standard Audit Report" for the Reporting Period Issued by the
Accounting Firm
□ Applicable √ Not applicable
VI. Explanation of Changes in Accounting Policies and Estimates or Correction of Significant
Accounting Errors Compared with the Financial Report of Last Fiscal Year
√ Applicable □ Not applicable
1. Accounting policy changes
1) Accounting policy changes resulted from the execution of the New Revenue Standards
On December 7, 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”). As passed under a
resolution at the 5th meeting of the fifth session of the Board of Directors on May 21, 2021, the Company started
to enforce the aforesaid New Lease Standards from January 1, 2021 and adjusted related accounting policies
accordingly.
Pursuant to the New Lease Standards, for contracts that already exist prior to the enforcement of the new
standards, the Company chooses not to re-evaluate whether they are a lease or contain a lease.
The Company only adjusts the cumulative impact number for lease contracts that have been yet been completed as
of January 1, 2021. The amounts of retained earnings and other relevant items in the financial statements at the
102
C&S Paper Co., Ltd. 2021 Annual Report
beginning of the period for the first time adoption of the new standards (i.e. January 1, 2021) are adjusted based
on the accumulative impact amount at the first time adoption, while comparative financial information for the
previous accounting periods is not adjusted.
The Company’s specific processing and its impact on the date of fist-time adoption of the new standards (i.e.
January 1, 2021) are as follows:
A The Company as the lessee:
For finance leases on the adoption date of the new standards, if the Company is the lessee, it measures the
right-of-use assets and lease liabilities according to the original book value of the financial leased assets and the
financial lease payables. For operating leases on the adoption date of the new standards, the Company, as the
lessee, measures lease liabilities according to the present value of the remaining lease payments discounted at the
incremental borrowing rate on the adoption date of the new standards; the unpaid rent accrued on an accrual basis
under the original lease standards is included in the remaining lease payments.
For operating leases prior to the adoption date of the new standards, the Company measures the right-of-use asset
based on the amount equal to the lease liability and makes necessary adjustments based on prepaid rents. The
Company conducts an impairment test on the right-of-use assets on the adoption date and adjusts the book value
of the right-of-use assets.
For operating leases where the leased assets belong to low-value assets prior to the adoption date, the Company
does not recognize as right-of-use assets and lease liabilities For operating leases other than low-value asset leases
at the adoption date, the Company applies one or more of the following simplified treatments for each lease:
Leases to be completed within 12 months of the adoption date are treated as short-term leases;
When measuring lease liabilities, the same discount rate is used for leases with similar characteristics;
The measurement of the right-of-use assets excludes initial direct costs;
If there is an option to renew or terminate the lease, the Company determines the lease term based on the
actual exercise of the option before the adoption date and other latest conditions;
If there is a lease change before the adoption date, the company will carry out accounting treatment
according to the final arrangement of the lease change.
B. Main changes and impacts of the implementation of the New Lease Standards
The houses and buildings leased by the company were originally treated as operating leases. According to the new
standards, on January 1, 2021, the Company recognized right-of-use assets of RMB 12,852,715.53, lease
liabilities of RMB 8,089,819.67, and non-current liabilities due within one year of RMB 4,762,895.86.
Impacts on the financial statements dated January 1, 2021 are listed in the following:
Statement item Amount on December 31, 2020 (prior to Amount on January 1, 2021 (after change)
change)
Consolidated Parent Company’s Consolidated Parent Company’s
statement statement statement statement
Right-of-use assets 12,852,715.53 3,161,008.25
Lease liabilities 8,089,819.67 1,858,811.04
Non-current liabilities due 4,762,895.86 1,302,197.21
within one year
The weighted average of the incremental borrowing rate used by the Company on its lease liabilities in its balance
sheet dated January 1, 2021 is 4.75%.
The adjustment process for the difference between the unpaid minimum lease payments for major operating leases
at the end of 2020 as disclosed in its 2020 annual financial statements and those included in lease liabilities on
January 1, 2021 is as follows:
103
C&S Paper Co., Ltd. 2021 Annual Report
Item Consolidated statement Parent Company’s
statement
Minimum lease payments of major operating leases at December 14,874,019.59 3,189,784.64
31, 2020
Less: Lease payments with simplified treatment 1,295,863.18
Including: Short-term lease 1,295,863.18
Low-value asset lease
Adjusted minimum lease payments of major operating leases at 13,578,156.41 3,189,784.64
January 1, 2021
Weighted average of incremental borrowing rates 4.75% 4.75%
Balance of lease liabilities on January 1, 2021 12,852,715.53 3,161,008.25
Including: Lease liabilities due within one year 4,762,895.86 1,302,197.21
2. Changes of accounting estimates
There were no changes of accounting estimates within the reporting period.
VII. Description of Changes in the Scope of Consolidated Statements Compared with the
Financial Report of Last Year
√ Applicable □ Not applicable
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 holds 100% of its equity. C&S (Jiangsu) Paper Co., Ltd. was incorporated
into the scope of consolidated statements from February 2021. 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. Yunnan Dolemi Trading Co., Ltd. was dissolved and canceled on October 19, 2021, and the
Company no longer incorporated it into the scope of consolidated statements from the date of cancellation.
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
104
C&S Paper Co., Ltd. 2021 Annual Report
Products Co., Ltd. into the scope of its consolidated statements since June 2021. Currently, Mianyang Dolemi has
started operating activities.
On July 12, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and Henan
Duoxian Trading Co., Ltd. jointly invested and established Zhengzhou Dolemi Sanitary Products Co., Ltd., with a
registered capital of RMB1 million. Dolemi Sanitary Products holds 60% of the shares while Duoxian Trading
holds 40% of the shares. The Company has incorporated Zhengzhou Dolemi Sanitary Products Co., Ltd. into the
scope of its consolidated statements since July 2021. Currently, Zhengzhou Dolemi has not started operating
activities.
On July 14, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and Dazhou
Jiatai Trading Co., Ltd. jointly invested and established Dazhou Dolemi Sanitary Products Co., Ltd., with a
registered capital of RMB1.5 million. Dolemi Sanitary Products holds 60% of the shares while Jiatai Trading
holds 40% of the shares. The Company has incorporated Dazhou Dolemi Sanitary Products Co., Ltd. into the
scope of its consolidated statements since July 2021. Currently, Dazhou Dolemi has started operating activities.
On August 6, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and Guizhou
Fangsheng Trading Co., Ltd. jointly invested and established Guiyang Dolemi Sanitary Products Co., Ltd., with a
registered capital of RMB2 million. Dolemi Sanitary Products holds 60% of the shares while Guizhou Fangsheng
Trading holds 40% of the shares. The Company has incorporated Guiyang Dolemi Sanitary Products Co., Ltd. into
the scope of its consolidated statements since August 2021. Currently, Guiyang Dolemi has started operating
activities.
On August 18, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and
Zhanjiang Wei’s Trading Co., Ltd. jointly invested and established Zhanjiang Dolemi Sanitary Products Co., Ltd.,
with a registered capital of RMB1 million. Dolemi Sanitary Products holds 60% of the shares while Zhanjiang
Wei’s Trading holds 40% of the shares. The Company has incorporated Zhanjiang Dolemi Sanitary Products Co.,
Ltd. into the scope of its consolidated statements since August 2021. Currently, Zhanjiang Dolemi has not started
operating activities.
On September 01, 2021, the Company and Bloomage Biotechnology Corporation Limited jointly invested and
established Beijing Bloomage Jierou Biotechnology Co., Ltd., with a registered capital of RMB10 million. The
Company holds 51% of the shares while Bloomage Biotechnology holds 49% of the shares. The Company has
incorporated Beijing Bloomage Jierou Biotechnology Co., Ltd. into the scope of its consolidated statements since
September 2021. Currently, Bloomage Jierou has started operating activities.
On September 02, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and
Xi’an Boyu Hengchang Trading Co., Ltd. jointly invested and established Xi’an Dolemi Sanitary Products Co.,
Ltd., with a registered capital of RMB1 million. Dolemi Sanitary Products holds 60% of the shares while Boyu
Hengchang Trading holds 40% of the shares. The Company has incorporated Xi’an Dolemi Sanitary Products Co.,
Ltd. into the scope of its consolidated statements since September 2021. Currently, Xi’an Dolemi has not started
operating activities.
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C&S Paper Co., Ltd. 2021 Annual Report
VIII. Engagement and Dismissal of Accounting Firm
Accounting firm engaged
Name of the domestic accounting firm Mazars Certified Public Accountants (LLP)
Remuneration for the domestic accounting firm (RMB 10,000) 156
Consecutive years of auditing service provided by the domestic
3
accounting firm
Name of domestic certified public accountants Wang Bing, Pan Guiquan
Consecutive years of auditing service provided by domestic
3
certified public accountants
Whether the accounting firm was changed in the reporting period
□ Yes √ No
Appointment of accounting firm, financial advisor or sponsor for internal control audit
□ Applicable √ Not applicable
IX. The Company Facing Delisting after the Disclosure of the Annual Report
□ Applicable √ Not applicable
X. Matters relating to Bankruptcy and Restructuring
□ Applicable √ Not applicable
No bankruptcy and restructuring-related matters of the Company happened during the reporting period.
XI. Material Litigations and Arbitrations
□ Applicable √ Not applicable
There were no material litigations or arbitrations during the reporting period. Other litigations of the Company are
as follows:
Amount Execution of
Basic information of Whether projected
involved Litigation (arbitration) Hearing results and influences of judgment of the
the litigation liabilities were
(RMB progress the litigation (arbitration) litigation
(arbitration) incurred
10,000) (arbitration)
Zhongshan Trading
v. Shenzhen Both the first instance
Yongxinghua and the second The verdict of second instance
Trading Co., Ltd., 660.37 No instance ruled that came into force. Zhongshan In execution
Feng, & Liang over Zhongshan Trading Trading has applied for execution.
sales contract won the case.
dispute
106
C&S Paper Co., Ltd. 2021 Annual Report
Zhongshan Trading The first round of
The first instance
v. Guangzhou The verdict of first instance came execution ended.
supported all the
Yingjing Trade Co., 31.36 No into force. Zhongshan Trading has No properties
claims by Zhongshan
Ltd. over sales applied for execution. have been
Trading.
contract dispute recovered.
Zhongshan Trading
v. Shanghai Tongli
Both the first instance
Trading Co., Ltd.
and the second The verdict of second instance
and eight natural
2,932.01 No instance ruled that came into force. Zhongshan In execution
person defendants
Zhongshan Trading Trading has applied for execution.
including Liu over
won the case.
sales contract
dispute
The first instance
ruled that C&S won
No (Note: Whether the case. The second
projected liabilities instance sent the case
Yin v. C&S Paper The second instance accepted the
will be incurred back to the first
over the right to 30.25 appeal; pending trial and Not applicable
cannot be instance court for a
health dispute judgment.
determined prior to retrial. The first
the verdict.) instance retrial has
made a verdict. C&S
has filed an appeal.
Sichuan C&S v.
Xi’an Minsheng has not fulfilled The first round of
Xi’an Minsheng
The case was the repayment obligation in line enforcement
Department Store
5.65 No mediated and closed with the paper of civil mediation. ended;
Management Co.,
in the first instance. Sichuan C&S has applied for legal RMB15,000 were
Ltd. over contract
enforcement. recovered
dispute
Zhongshan Trading
v. Guangzhou Jv Se The first instance First round of
The verdict came into force.
Mai Ke Internet supported all the execution ended.
28.55 No Zhongshan Trading has applied
Service Co., Ltd. claims by Zhongshan No fund was
for execution.
over sales contract Trading. recovered.
dispute
The case was
Xiaogan C&S v. The counterparty has not fulfilled
mediated and closed
Wuhan Xincheng obligation in line with the paper
in the first instance
Tongda Trading Co., 525.16 No of civil mediation; Xiaogan C&S In execution
(with a mediation
Ltd. over sales has applied for legal
amount of
contract dispute enforcement..
RMB4.4961 million).
Yunfu C&S v. Yu 31.08 No The first instance has The verdict came into force. In execution
107
C&S Paper Co., Ltd. 2021 Annual Report
over sales contract ruled in favor of the Yunfu C&S has applied for
dispute company. execution.
Zhongshan Trading
v. Hefei Suning
The first instance has
Fresh Food
accepted the case; The first instance has accepted the
Supermarket 475.27 No Not applicable
pending trial and case; pending trial and judgment
Procurement Co.,
judgment
Ltd. over right to
claims of bills
Chongqing
No (Note: Whether
Xianshida Human
projected liabilities
Resources The first instance is
will be incurred The first instance is being heard;
Management Co., 30 being heard; pending Not applicable
cannot be pending judgment
Ltd. v. C&S Paper judgment
determined prior to
over service contract
the verdict.)
dispute
Main arbitration claims of the
Yan v. Yunfu C&S counterparty were rejected; the
Labor arbitration has Execution
over labor 4.85 No counterparty did not file for
made a ruling completed
arbitration distribute lawsuit, so execution has been
completed.
Main arbitration claims of the
Qiu v. Yunfu C&S counterparty were rejected; the
Labor arbitration has Execution
over labor 16.53 No counterparty did not file for
made a ruling completed
arbitration distribute lawsuit, so execution has been
completed.
Tangshan C&S v.
Huangshan The first instance
Tangshan C&S will apply for
Langshuo Hotel supported all the
7.97 No legal enforcement after the first Not applicable
Management Co., claims by Tangshan
instance verdict comes into effect.
Ltd. over arrear C&S.
dispute
Tangshan C&S v.
The first instance has
Lijiang Yile Hotel
accepted the case; The first instance has accepted the
Management Co., 3.1 No Not applicable
pending trial and case; pending trial and judgment
Ltd. over arrear
judgment
dispute
No (Note: Whether
Fan v. Yunfu C&S projected liabilities Labor arbitration has Labor arbitration has accepted the
over labor 17.36 will be incurred accepted the case; case; pending hearing and Not applicable
arbitration distribute cannot be pending hearing judgment
determined prior to
108
C&S Paper Co., Ltd. 2021 Annual Report
the verdict.)
No (Note: Whether
The first instance has
projected liabilities
Zhang v. Jiangmen made a ruling, with all
will be incurred The counterparty appealed;
C&S over labor 84.92 claims against the Not applicable
cannot be pending trial and judgment
arbitration distribute company being
determined prior to
dismissed.
the verdict.)
No (Note: Whether
The first instance has
projected liabilities
Lu v. Jiangmen made a ruling, with all
will be incurred The counterparty appealed;
C&S over labor 62.71 claims against the Not applicable
cannot be pending trial and judgment
arbitration distribute company being
determined prior to
dismissed.
the verdict.)
No (Note: Whether
The first instance has
projected liabilities
Tan v. Jiangmen made a ruling, with all
will be incurred The counterparty appealed;
C&S over labor 121.39 claims against the Not applicable
cannot be pending trial and judgment
arbitration distribute company being
determined prior to
dismissed.
the verdict.)
XII. Penalties and Rectifications
□ Applicable √ Not applicable
No penalties and rectifications of the Company occurred during the reporting period.
XIII. Integrity Records of the Company and its Controlling Shareholder and Actual
Controller
□ Applicable √ Not applicable
XIV. Material Related Party Transactions
1. Related party transactions relating to daily operations
√ Applicable □ Not applicable
Amount Proporti Availa
Content Pricing of on in Approv Whether Settleme ble
Type of Price of
Party of of rules of related the ed to nt of market
Related related related Date of Index of
related related related party amount transacti outstrip related prices
relations party party disclosu disclosur
party party party transacti of on limit the party for
hip transacti transacti re e
transaction transacti transacti on similar (RMB1 approve transacti similar
on ons
on on (RMB1 transacti 0,000) d limit on transac
0,000) ons tions
109
C&S Paper Co., Ltd. 2021 Annual Report
Deng
Actual
Yingzhong,
controll Market Market Transfer Marke Decemb
Deng
er of the Lease Rental fair fair 294.81 22.05% 294.81 No settleme t fair er 06, 2019-93
Guanbiao,
Compan price price nt price 2019
Deng
y
Guanjie
Deng
Actual
Yingzhong,
controll Market Market Transfer Marke
Deng October
er of the Lease Rental fair fair 33.36 2.50% 33.36 No settleme t fair 2020-82
Guanbiao, 30, 2020
Compan price price nt price
Deng
y
Guanjie
Deng
Actual
Yingzhong,
controll Market Market Transfer Marke
Deng
er of the Lease Rental fair fair 1.3 0.10% Yes settleme t fair
Guanbiao,
Compan price price nt price
Deng
y
Guanjie
A
compan
y in
which
the son
of the
Compan
Pengzhou y’s Vice Daily
Enjoying Presiden operatio Market Market Transfer Marke Decemb
Sale of
Life t Yue n fair fair 237.22 0.03% 150 Yes settleme t fair er 16, 2020-99
goods
Trading Yong transacti price price nt price 2020
Co., Ltd. holds on
50%
equity
and
serves
as a
supervis
or
Sichuan A
Daily Sale of
West compan
operatio goods Market Market Transfer Marke Decemb
Enjoying y in
n and fair fair 56.53 0.02% 50 Yes settleme t fair er 16, 2020-99
Life which
transacti promoti price price nt price 2020
Trading the son
on on fee
Co., Ltd. of the
110
C&S Paper Co., Ltd. 2021 Annual Report
Compan
y’s Vice
Presiden
t Yue
Yong
holds
50%
equity
and
serves
as a
supervis
or
A
compan
y in
which
the
spouse
of the Daily
Chongqing
brother operatio Market Market Transfer Marke Decemb
Qinyue Sale of
of the n fair fair 0.00% 100 No settleme t fair er 16, 2020-99
Trading goods
Compan transacti price price nt price 2020
Co., Ltd.
y’s Vice on
Presiden
t Yue
Yong
holds
99%
equity
Total -- -- 623.22 -- 628.17 -- -- -- -- --
Details of returns of large sales Not applicable
Among the excessive amounts of related party transactions in the reporting period,
Where the total amount of daily
RMB13,000 is for renting properties from the related party, RMB872,200 is for the sales of
related-party transactions occurred in
goods to the related party, and RMB65,300 is for the related party’s provision of services to
the current period is estimated by
the Company and the Company’s sales of goods to the related party. They fall within the
category, actual performance during the
authority of the Chairman of the Company and can be implemented without the approval of
reporting period (if any)
the Board of Directors.
Reason(s) for a large difference between
the transaction price and the market Exercise at fair price
reference price (if applicable)
111
C&S Paper Co., Ltd. 2021 Annual Report
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.
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
During the reporting period, there was no related party transaction relating to creditor’s rights and debts.
5. Transactions with related party financial companies
□ Applicable √ Not applicable
The Company did not have deposit, loan, credit or other financial business transactions with financial companies that have related
relationship and the associated related parties.
6. Transactions between financial companies controlled by the Company and related parties
□ Applicable √ Not applicable
Financial companies controlled by the Company did not have deposit, loan, credit or other financial business transactions with related
parties.
7. Other significant related party transactions
□ Applicable √ Not applicable
During the reporting period, there were no other significant related party transactions.
XV. 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
112
C&S Paper Co., Ltd. 2021 Annual Report
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
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%
113
C&S Paper Co., Ltd. 2021 Annual Report
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
Guarantee of the Company 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 and
2021.10.1
Zhongshan December October 18, several
15,000 2,858.85 None None 8-2024.9. No No
Trading 15, 2020 2021 liability
7
guarantee
Joint and
Zhongshan December March 02, several 2021.3.2-
13,600 11,696.66 None None No No
Trading 15, 2020 2021 liability 2026.3.1
guarantee
Joint and
2020.12.1
Zhongshan December December several
25,000 0 None None 5-2024.12 No No
Trading 05, 2019 15, 2020 liability
.9
guarantee
Joint and
Zhongshan December September several 2021.9.24
15,000 4,609.26 None None No No
Trading 15, 2020 24, 2021 liability -2024.7.7
guarantee
Joint and 2021.8.21
Zhongshan December August 21,
50,000 2,270.46 several None None -2025.5.1 No No
Trading 15, 2020 2021
liability 1
114
C&S Paper Co., Ltd. 2021 Annual Report
guarantee
Joint and
2021.9.15
Zhongshan December September several
16,000 500 None None -2024.12. No No
Trading 15, 2020 15, 2021 liability
31
guarantee
Joint and
2021.10.2
Jiangmen December October 26, several
12,000 3,043.37 None None 6-2024.9. No No
C&S 15, 2020 2021 liability
12
guarantee
Joint and
2020.11.2
Jiangmen December November several
10,000 3,954.7 None None 6-2023.11 No No
C&S 05, 2019 16, 2020 liability
.25
guarantee
Joint and
2021.5.13
Jiangmen December May 13, several
15,000 0 None None -2024.3.3 No No
C&S 15, 2020 2021 liability
0
guarantee
Joint and
2020.12.2
Jiangmen December December several
5,000 1,258.97 None None 3-2025.12 No No
C&S 05, 2019 23, 2020 liability
.23
guarantee
Joint and
2020.4.14
December April 14, several
Yunfu C&S 8,000 0 None None -2028.4.1 No No
05, 2019 2020 liability
4
guarantee
Joint and
2020.11.2
December November several
Yunfu C&S 5,000 800 None None 0-2023.12 No No
05, 2019 20, 2020 liability
.31
guarantee
Joint and
2021.10.2
December October 26, several
Yunfu C&S 20,000 2,906.39 None None 6-2024.9. No No
15, 2020 2021 liability
12
guarantee
Joint and
2021.5.13
December May 13, several
Yunfu C&S 15,000 0 None None -2024.3.3 No No
15, 2020 2021 liability
0
guarantee
Joint and
2021.9.27
December September several
Yunfu C&S 5,000 1,399.33 None None -2023.12. No No
15, 2020 27, 2021 liability
16
guarantee
115
C&S Paper Co., Ltd. 2021 Annual Report
Joint and
2021.12.3
December December several
Hubei C&S 10,000 0 None None -2026.9.2 No No
15, 2020 03, 2021 liability
9
guarantee
Zhongshan
Trading, Joint and
Hubei December June 01, several 2021.6.1-
9,560.7 1,395.56 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 0 None None No No
19, 2018 2019 liability 2022.1.8
C&S,
guarantee
Hubei C&S
C&S Hong
Kong,
Joint and
Zhong 2021.11.4
December November several
Shun 31,869 4,802.72 None None -2025.7.3 No No
15, 2020 04, 2021 liability
Internationa 1
guarantee
l, Macao
C&S
C&S Hong
Kong, Joint and
Zhong December September several 2021.9.8-
16,593.22 0 None None No No
Shun 15, 2020 08, 2021 liability 2023.9.8
Internationa guarantee
l
C&S Hong Joint and
2021.3.17
Kong, December March 17, several
32,696 1,375.12 None None -2025.12. No No
Macao 15, 2020 2021 liability
31
C&S guarantee
C&S Hong
Kong,
Joint and
Zhong 2020.2.12
December February several
Shun 40,473.63 6,612.2 None None -2022.2.1 No No
05, 2019 12, 2020 liability
Internationa 2
guarantee
l, Macao
C&S
C&S Hong Joint and 2020.2.25
December February
Kong, 12,747.6 0 several None None -2022.2.2 No No
05, 2019 25, 2020
Macao liability 5
116
C&S Paper Co., Ltd. 2021 Annual Report
C&S guarantee
C&S Hong Joint and
2021.12.3
Kong, December December several
6,373.8 0 None None -2025.9.2 No No
Macao 15, 2020 03, 2021 liability
4
C&S guarantee
C&S Hong Joint and
2020.3.27
Kong, December March 27, several
15,297.12 1,300.26 None None -2023.2.1 No No
Macao 05, 2019 2020 liability
9
C&S guarantee
C&S Hong
Kong,
Joint and
Zhong 2018.9.28
December September several
Shun 17,655.84 0 None None -2022.8.3 No No
15, 2017 28, 2018 liability
Internationa 1
guarantee
l, Macao
C&S
C&S Hong
Kong,
Joint and
Zhong 2020.1.30
December January 30, several
Shun 19,121.4 710.29 None None -2023.1.3 No No
05, 2019 2020 liability
Internationa 0
guarantee
l, Macao
C&S
Joint and
2018.3.23
Macao December March 23, several
7,011.18 0 None None -2022.9.2 No No
C&S 15, 2017 2018 liability
3
guarantee
Joint and
2018.8.15
Macao December August 15, several
7,000 0 None None -2025.8.1 No No
C&S 15, 2017 2018 liability
5
guarantee
Joint and
2021.11.1
Macao December November several
19,121.4 6,392.92 None None 2-2024.10 No No
C&S 15, 2020 12, 2021 liability
.20
guarantee
C&S Hong
Kong,
Joint and
Zhong
December September several 2020.9.1-
Shun 22,308.3 2,244.48 None None No No
05, 2019 01, 2020 liability 2022.7.9
Internationa
guarantee
l, Macao
C&S
117
C&S Paper Co., Ltd. 2021 Annual Report
Total approved amount Total actual amount of
of guarantee for guarantee for
302,814.12 43,250.64
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
522,429.19 60,131.54
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 302,814.12 43,250.64
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 522,429.19 60,131.54
reporting period
reporting period (A3 + B3 + C3)
(A4+B4+C4)
Proportion of the total actual amount of guarantee
12.26%
(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 23,330.79
exceeds 70% (E)
Amount of guarantees in excess of 50% of net
0
assets (F)
Total amount of the above three guarantees (D + E
23,330.79
+ F)
Description of situations that the guarantee
liability has occurred or there is evidence showing None
that the Company may be jointly and severally
118
C&S Paper Co., Ltd. 2021 Annual Report
liable for undue guarantee contracts during the
reporting period (if any)
Description of providing external guarantee in
None
violation of prescribed procedures (if any)
Detailed description on the guarantees with different types: None
3. Entrusting others to manage cash assets
(1) Entrusted wealth management
√ Applicable □ Not applicable
Overview of entrusted wealth management during the reporting period
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
product of securities Self-owned fund 9,500 1,000 0 0
company
Wealth management
Self-owned fund 1,000 0 0 0
product of bank
Total 10,500 1,000 0 0
Explanation of high-risk entrusted wealth management with large individual amount or low safety and poor liquidity
□ 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
(2) Entrusted loans
□ Applicable √ Not applicable
There were no entrusted loans during the reporting period.
4. Other significant contracts
□ Applicable √ Not applicable
There were no other significant contracts during the reporting period.
XVI. Other Significant Events
√ Applicable □ Not applicable
1. Reelection of directors and supervisors
119
C&S Paper Co., Ltd. 2021 Annual Report
The Company convened the 30th meeting of the fourth session of the Board of Directors and the 24th meeting of
the fourth session of the Board of Supervisors on January 5, 2021 and the 2021 First Extraordinary General
Meeting on January 21, 2021, which elected non-independent directors and independent directors of the fifth
session of the Board of Directors and non-employee-representative supervisors. On January 12, 2021, the
Company convened the employee representative meeting and elected employee representative supervisors. For
details, please refer to the relevant announcement released by the Company on www.cninfo.com.cn.
2. New 400,000-ton high-grade household paper project
The Company convened the 31st meeting of the fourth session of the Board of Directors on January 13, 2021,
which reviewed and adopted the Proposal on Building a New 400,000-ton High-grade Household Paper Project.
The new project aims to promote the Company to further expand its production capacity, meet the demands for
future sales growth in East China market, and create new profit growth points for the Company. With a total
projected investment of RMB2.55 billion and a planned capacity of 400,000 tons, the project will be implemented
in phases. The first phase is planned to have an investment of RMB600 million and an output of 100,000 tons of
high grade household paper. For details, please refer to the relevant announcement released by the Company on
www.cninfo.com.cn.
3. Share repurchase
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, and the shares to be repurchased will be used for equity
incentives or employee stock ownership plans. The share repurchase expired on January 5, 2022. The Company
repurchased a total of 24,863,087 shares, accounting for 1.8942% of its total share capital. The highest and lowest
transaction price was RMB34.50/share and RMB16.48/share, respectively, and the total transaction amount was
RMB 661,249,972.28 (excluding transaction fee). For details, please refer to the relevant announcement released
by the Company on www.cninfo.com.cn.
4. Phase III Employee Stock Ownership Plan
The Company held the 5th meeting of the fifth session of the Board of Directors and the Fourth Extraordinary
General Meeting on May 21 and June 7, 2021, respectively, which considered and approved the Proposal on the
Phase III Employee Stock Ownership Plan (Draft) and Its Summary and other relevant proposals. As such, the
implementation of the Phase III Employee Ownership Plan was approved.
On November 30, 2021, the Company convened the 12th meeting of the fifth Session of the Board of Directors
and the 7th meeting of the fifth Session of the Board of Supervisors, which reviewed and approved the Proposal
on Terminating the Phase III Employee Stock Ownership Plan. Ever since review procedures for the Phase III plan
were complement, the management of the Company has been actively promoting its implementation and has
communicated with employee representatives many times regarding its specific implementation. Employees
participating in this Plan fully recognize the original intention of the Plan. The Company has held internal
communication meetings and actively communicated with financial institutions to carry out financing work.
However, considering changes in relevant financial policies plus market reasons, it is difficult to continue pushing
forward the Plan. To better safeguard the interests of the Company, shareholders and employees, the Company has
decided to terminate the Phase III Employee Stock Ownership Plan upon careful consideration in accordance with
120
C&S Paper Co., Ltd. 2021 Annual Report
relevant regulations. For details, please refer to the relevant announcement released by the Company on
www.cninfo.com.cn.
5. Proposal of the actual controller for employees to increase shareholding of the Company
On May 9, 2021, the Company received the Letter on Proposing All Employees to Increase Shareholding of the
Company from the director and actual controller of the Company Mr. Deng Yingzhong. Based on his confidence
in the Company’s sustained development in the future, Mr. Deng called on employees of the Company and
subsidiaries to actively buy in stock of the Company. He also promised: “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 while still serving in the Company by then, any losses incurred from the aforesaid stocks will be
fully compensated by Mr. Deng Yingzhong while any profits generated will entirely belong to the employee.”
The commitment hereof is not due yet as of the end of the reporting period. For details, please refer to the relevant
announcement released by the Company on www.cninfo.com.cn.
XVII. Significant Events of Subsidiaries of the Company
√ Applicable □ Not applicable
1. High-tech enterprise certification
The Certificate of High-tech Enterprise of C&S (Yunfu) Paper Co., Ltd. and C&S (Sichuan) Paper Co., Ltd., two
wholly-owned subsidiaries of the Company, was re-certified upon expiration. Within three years after certification
and archival, the two subsidiaries can enjoy a preferential rate of corporate income tax at 15%.
2. Changes of industrial and commercial registration
(1) C&S (Sichuan) Paper Co., Ltd., C&S (Yunfu) Paper Co., Ltd., Jiangmen Zhongshun Paper Co., Ltd., C&S
(Hubei) Paper Co., Ltd. and C&S (Yunfu) Trading Co., Ltd. expanded their scope of business, and have completed
the change registration with the industrial and commercial department and collected the new business licenses.
(2) The Company’s wholly-owned subsidiary C&S (Yunfu) Trading Co., Ltd. was changed to “Yunfu Hengtai
Trading Co., Ltd.”.
3. Newly established/joint stock companies
(1) The Company established a wholly-owned subsidiary, C&S (Jiangsu) Paper Co., Ltd., as the entity to
implement the 400,000-ton high-grade household paper project.
(2) Out of business development needs, the Company invested and established 8 joint-stock companies in 2021:
Luzhou Dolemi Sanitary Products Co., Ltd. (the Company subscribed RMB900,000 through its wholly-owned
subsidiary Dolemi Sanitary Products Co., Ltd. and holds 60% of the shares); Mianyang Dolemi Sanitary Products
Co., Ltd. (the Company subscribed RMB900,000 through its wholly-owned subsidiary Dolemi Sanitary Products
Co., Ltd. and holds 60% of the shares); Dazhou Dolemi Sanitary Products Co., Ltd. (the Company subscribed
RMB900,000 through its wholly-owned subsidiary Dolemi Sanitary Products Co., Ltd. and holds 60% of the
shares); Guiyang Dolemi Sanitary Products Co., Ltd. (the Company subscribed RMB1.2 million through its
wholly-owned subsidiary Dolemi Sanitary Products Co., Ltd. and holds 60% of the shares); Zhengzhou Dolemi
Sanitary Products Co., Ltd. (the Company subscribed RMB600,000 through its wholly-owned subsidiary Dolemi
Sanitary Products Co., Ltd. and holds 60% of the shares); Xi’an Dolemi Sanitary Products Co., Ltd. (the Company
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C&S Paper Co., Ltd. 2021 Annual Report
subscribed RMB600,000 through its wholly-owned subsidiary Dolemi Sanitary Products Co., Ltd. and holds 60%
of the shares); Zhanjiang Dolemi Sanitary Products Co., Ltd. (the Company subscribed RMB600,000 through its
wholly-owned subsidiary Dolemi Sanitary Products Co., Ltd. and holds 60% of the shares); Beijing Bloomage
Jierou Biotechnology Co., Ltd. (the Company subscribed RMB5.1 million and holds 51% of the shares)
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C&S Paper Co., Ltd. 2021 Annual Report
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
Bonus
Number Percentage shares ed from Others Subtotal Number Percentage
shares
issued surplus
reserve
I. Shares subject to selling
36,858,323 2.81% 236,250 -9,533,973 -9,297,723 27,560,600 2.10%
restrictions
1. Shares held by the state
2. Shares held by
state-owned legal person
3. Shares held by other
34,906,289 2.66% 11,250 -7,952,539 -7,941,289 26,965,000 2.05%
domestic shareholders
Including: Shares held by
domestic legal persons
Shares held by
34,906,289 2.66% 11,250 -7,952,539 -7,941,289 26,965,000 2.05%
domestic natural persons
4. Shares held by foreign
1,952,034 0.15% 225,000 -1,581,434 -1,356,434 595,600 0.05%
shareholders
Including: Shares held by
foreign legal persons
Shares held by
1,952,034 0.15% 225,000 -1,581,434 -1,356,434 595,600 0.05%
foreign natural persons
II. Shares without selling
1,274,840,644 97.19% 2,888,811 7,300,778 10,189,589 1,285,030,233 97.90%
restrictions
1. RMB-denominated
1,274,840,644 97.19% 2,888,811 7,300,778 10,189,589 1,285,030,233 97.90%
ordinary shares
2. Domestic listed foreign
shares
3. Overseas listed foreign
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C&S Paper Co., Ltd. 2021 Annual Report
shares
4. Others
III. Total number of shares 1,311,698,967 100.00% 3,125,061 -2,233,195 891,866 1,312,590,833 100.00%
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 in the first exercisable period. 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.
3. During the second unlock period for restricted shares awarded in the first grant under the 2018 Stock Option
and Restricted Stock Incentive Plan, 96 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 2,021,305 restricted shares that had been
granted but not unlocked. The repurchase and deregistration procedures for the aforementioned restricted shares
had been completed at the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited as
at October 27, 2021. As a result, the Company’s total share capital decreased by 2,021,305 shares.
4. During June 30, 2021 and December 31, 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 2,663,583 shares in the second exercisable period. As a result, the Company’s total share capital increased
by 2,663,583 shares.
Approval of changes in shares
√ Applicable □ Not applicable
1. 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.
2. 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.
3. The Board of Directors’ disposition of the repurchase and deregistration matters for the second unlocking of
first-grant restricted shares under the 2018 Stock Option and Restricted Stock Incentive Plan had been authorized
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C&S Paper Co., Ltd. 2021 Annual Report
by the 2019 First Extraordinary General Meeting and reviewed and approved by the 5th meeting of the fifth
session of the Board of Directors and 3rd meeting of the fifth session of the Board of Supervisors.
4. The Board of Directors’ disposition of the exercise matters for the second 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 5th meeting of the fifth session of the Board of Directors, the 3rd meeting of the fifth session of the Board
of Supervisors, the 12th meeting of the fifth session of the Board of Directors, and the 7th meeting of the fifth
session of the Board of Supervisors.
Transfer of title of changed shares
□ 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
Unit: share
Number of
shares
Increase in Number of Number of
subject to
shares subject to shares released shares subject to
selling Date of release
Shareholder’s selling from selling selling Reason for Selling
restrictions from selling
name restrictions restrictions restrictions at restrictions
at the restrictions
during the during the the end of the
beginning
period period year
of the
period
Lock-up shares of senior
Deng Yingzhong 5,064,608 5,064,608 Long-term
management
Lock-up shares of senior
management; the increase
Liu Peng 45,975 45,975 in restricted shares is due Long-term
to the proportional locking
of shareholding increase.
Lock-up shares of senior
Deng Guanbiao 3,718,105 3,718,105 Long-term
management
Lock-up shares of senior
Deng Guanjie 900,730 900,730 Long-term
management
Lock-up shares of senior
Zhang Yang 37,500 37,500 Long-term
management; the increase
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C&S Paper Co., Ltd. 2021 Annual Report
in restricted shares is due
to the locking of shares
proportional to the
position of the senior
management.
Lock-up shares of senior
management; the increase
in restricted shares is due
to the locking of unlocked
Yue Yong 9,261,243 247,500 2,045,438 7,463,305 Long-term
restricted shares
proportional to the
position of the senior
management.
Lock-up shares of senior
management; the increase
Li Zhaojin 8,100 8,100 in restricted shares is due Long-term
to the proportional locking
of shareholding increase.
Lock-up shares of senior
management; the increase
Deng Wenxi 15,825 15,825 in restricted shares is due Long-term
to the proportional locking
of shareholding increase.
Lock-up shares of senior
management; the increase
in restricted shares is due
Zhao Ming 6,250 6,250 to the locking of shares Long-term
proportional to the
position of the senior
management.
Lock-up shares of senior
management; the increase
in restricted shares is due
Lin Tiande 212,141 212,141 to the locking of shares Long-term
proportional to the
position of the senior
management.
Lock-up shares of senior
management; the increase
Dong Ye 119,794 45,000 42,000 122,794 in restricted shares is due Long-term
to the locking of unlocked
restricted shares and
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C&S Paper Co., Ltd. 2021 Annual Report
exercised stock options
proportional to the
position of the senior
management.
Lock-up shares of senior
management; the increase
Chen Haiyuan 12,675 12,675 in restricted shares is due Long-term
to the proportional locking
of shareholding increase.
Lock-up shares of senior
management; the increase
in restricted shares is due
Zhang Gao 32,000 32,000 Long-term
to the locking of shares
proportional to the
position of the supervisor.
Lock-up shares of senior Release of selling
management; the increase restrictions in
Li Youquan
33,300 11,100 44,400 in restricted shares is due accordance with
(resigned)
to the locking of shares relevant
upon resignation. regulations
Lock-up shares of senior Release of selling
management; the increase restrictions in
Zhou Qichao
497,754 123,682 374,072 in restricted shares is due accordance with
(resigned)
to the locking of shares relevant
upon resignation. regulations
Lock-up shares of senior Release of selling
management; the increase restrictions in
Ye Longfang
112,500 37,500 150,000 in restricted shares is due accordance with
(resigned)
to the locking of shares relevant
upon resignation. regulations
Lock-up shares of senior
management; the increase Release of selling
in restricted shares is due restrictions in
Dai Zhenji
265,034 225,000 62,534 427,500 to the locking of exercised accordance with
(resigned)
stock options proportional relevant
to the position of the regulations
senior management.
Lock-up shares of senior Release of selling
management; the increase restrictions in
Liu Jinfeng
1,579,475 243,000 446,563 1,375,912 in restricted shares is due accordance with
(resigned)
to the locking of unlocked relevant
restricted shares regulations
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C&S Paper Co., Ltd. 2021 Annual Report
proportional to the
position of the senior
management.
In accordance with 2018
Stock Option and
Restricted Stock Incentive
Plan (Draft), the second
Pursuant to 2018
unlocking was conducted
Stock Option and
Equity incentive for partial restricted stocks
15,305,780 7,757,072 7,548,708 Restricted Stock
recipients awarded in the first grant
Incentive Plan
and partial reserved stocks
(Draft)
in 2021; 30% of the shares
were unlocked; 40% of
the shares of the third
phase were still locked.
Total 36,858,323 1,179,566 10,477,289 27,560,600 -- --
II. Issuance and Listing of Securities
1. Issuance of securities (excluding preference shares) during the reporting period
□ Applicable √ Not applicable
2. Changes in total shares and shareholder structure as well as changes in asset and liability structure of the
Company
√ 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 in the first exercisable period. 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.
3. During the second unlock period for restricted shares awarded in the first grant under the 2018 Stock Option
and Restricted Stock Incentive Plan, 96 incentive recipients were unable to unlock the shares since they left the
128
C&S Paper Co., Ltd. 2021 Annual Report
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 2,021,305 restricted shares that had been
granted but not unlocked. The repurchase and deregistration procedures for the aforementioned restricted shares
had been completed at the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited as
at October 27, 2021. As a result, the Company’s total share capital decreased by 2,021,305 shares.
4. During June 30, 2021 and December 31, 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 2,663,583 shares in the second exercisable period. As a result, the Company’s total share capital increased
by 2,663,583 shares.
3. Internal employee shares
□ Applicable √ Not applicable
III. Information of Shareholders and Actual Controllers
1. Total number of shareholders
Unit: share
Total number of
preferred
Total number of
Total number of shareholders
preferred
Total number ordinary whose voting
shareholders
of ordinary shareholders at rights were
whose voting
shareholders as the end of the resumed at the
151,879 141,508 rights were 0 0
at the end of month preceding end of the month
resumed at the end
the reporting the disclosure preceding the
of the reporting
period date of the disclosure date of
period (if any) (see
annual report the annual report
Note VIII)
(if any) (see Note
VIII)
Shareholdings of shareholders with more than 5% or the top 10 shareholders
Sharehold Shares held Increase/dec Number of Number of Pledged, marked or
Name of Nature of ing at the end of rease during shares subject shares without frozen
shareholder shareholder percentag the reporting the reporting to selling selling Share
Number
e (%) period period restrictions restrictions status
Guangdong Domestic
Zhongshun Paper non-state-owned 28.62% 375,655,958 375,655,958
Group Co., Ltd. legal person
Chung Shun Co. Foreign legal 20.30% 266,504,789 266,504,789
129
C&S Paper Co., Ltd. 2021 Annual Report
person
Hong Kong
Foreign legal Share
Securities Clearing 4.58% 60,108,758 60,108,758
person reduction
Co., Ltd.
Ernest Partners
Foreign legal
LLC — Client 0.79% 10,402,100 New 10,402,100
person
funds
Domestic natural Share
Yue Yong 0.74% 9,665,241 7,903,305 1,761,936
person reduction
Domestic natural
# Lin Zuohua 0.63% 8,217,510 New 8,217,510
person
Domestic natural
Deng Yingzhong 0.51% 6,752,811 5,064,608 1,688,203
person
# Zhongshan
Domestic
Xinda Investment Share
non-state-owned 0.47% 6,123,636 6,123,636
Management Co., increase
legal person
Ltd.
Domestic natural
Deng Guanbiao 0.38% 4,957,473 3,718,105 1,239,368
person
Hua Life Insurance
Share
Co., Ltd. - Others 0.36% 4,692,263 4,692,263
increase
Self-owned funds
Strategic investors or general legal
persons becoming top ten shareholders
Not applicable
due to private placement of new shares
(if any) (see Note 3)
1. Among the top ten shareholders mentioned above, Mr. Deng Yingzhong and Mr. Deng
Guanbiao are among the actual controllers of the Company; Guangdong Zhongshun Paper
Group Co., Ltd. and Chung Shun Co. are the enterprises controlled by actual controllers of
Description on the related relationship the Company, i.e. Mr. Deng Yingzhong, Deng Guanbiao and Deng Guanjie. That is,
or parties acting-in-concert Guangdong Zhongshun Paper Group Co., Ltd. and Chung Shun Co. are related parties. Mr.
arrangements among the above Yue Yong is an incumbent senior manager of the Company.
shareholders 2. Except for the above situation, 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 in Shareholders’ Shareholding of Listed Companies.
Description on entrusting/being
entrusted with voting rights and waver
Not applicable
of voting rights by the aforementioned
shareholders:
Description on special repurchase There is a special repurchase account “C&S Paper Special Repurchase Securities Account”
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C&S Paper Co., Ltd. 2021 Annual Report
account among top 10 shareholders (if among the top 10 shareholders. As of the end of the reporting period, this repurchase
any) (see note 10) account held 26,758,987 shares, with a shareholding ratio of 2.04%. Pursuant to relevant
regulations, it is not included in the list of top 10 shareholders.
Shareholdings of top 10 shareholders not subject to selling restrictions
Number of shares held not subject to selling Type of shares
Name of shareholder
restrictions Type of shares Number
Guangdong Zhongshun Paper Group RMB-denominated
375,655,958 375,655,958
Co., Ltd. ordinary shares
RMB-denominated
Chung Shun Co. 266,504,789 266,504,789
ordinary shares
Hong Kong Securities Clearing Co., RMB-denominated
60,108,758 60,108,758
Ltd. ordinary shares
RMB-denominated
Ernest Partners LLC — Client funds 10,402,100 10,402,100
ordinary shares
RMB-denominated
# Lin Zuohua 8,217,510 8,217,510
ordinary shares
# Zhongshan Xinda Investment RMB-denominated
6,123,636 6,123,636
Management Co., Ltd. ordinary shares
Hua Life Insurance Co., Ltd. - RMB-denominated
4,692,263 4,692,263
Self-owned funds ordinary shares
Cheng’an Asset Management Co., Ltd.
— Cheng’an 99 Chuancheng No. 1 RMB-denominated
4,499,913 4,499,913
Private Equity Securities Investment ordinary shares
Fund
RMB-denominated
Li Hong 4,297,300 4,297,300
ordinary shares
RMB-denominated
ABC — CSI Smallcap 500 ETF 4,170,889 4,170,889
ordinary shares
1. Among the top ten shareholders mentioned above, Guangdong Zhongshun Paper Group
Description on the related relationship
Co., Ltd. and Chung Shun Co. are the enterprises controlled by actual controllers of the
or parties acting-in-concert among the
Company, i.e. Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie. That is,
top ten ordinary shareholders without
Guangdong Zhongshun Paper Group Co., Ltd. and Chung Shun Co. are related parties.
selling restrictions and between the top
2. Except for the above situation, it is unknown to the Company whether there is related
ten ordinary shareholders without
party relationship among other shareholders, or whether there is acting-in-concert among
selling restrictions and the top ten
other shareholders as stipulated in the Administrative Measures for the Disclosure of
ordinary shareholders
Information on Changes in Shareholders’ Shareholding of Listed Companies.
Description on the top 10 ordinary
1. Shareholder Lin Zuohua holds 8,217,510 shares through a client credit transaction
shareholders’ participation in margin
guarantee securities account;
trading and securities lending business
2. Shareholder Zhongshan Xinda Investment Management Co., Ltd. holds 6,120,602 shares
(if any) (see Note 4)
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C&S Paper Co., Ltd. 2021 Annual Report
through a client credit transaction guarantee securities account.
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.
2. Controlling shareholder of the Company
Nature of controlling shareholder: Natural person holding
Type of controlling shareholder: Legal person
Legal representative or
Principal
Name of controlling shareholder person in charge of the Date of establishment Organization code
businesses
institution
Guangdong Zhongshun Paper Investment
Deng Yingzhong November 21, 1997 91442000617775375D
Group Co., Ltd. management
Equity interests in other controlled
and invested companies whose
None
shares were listed in the PRC or
overseas during the reporting period
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.
3. Actual controller and person acting in concert
Nature of actual controller: Domestic natural person
Type of actual controller: Natural person
Relationship with Whether having obtained the right of
Name Nationality
actual controller abode in other countries or regions
Deng Yingzhong Self Chinese No
Deng Guanbiao Self Chinese Yes
Deng Guanjie Self Chinese No
Refer to Section IV. “Corporate Governance” --> “Particulars of Directors,
Main occupation and position
Supervisors and Senior Management” --> “Main working experience” for details.
Holding of domestic and overseas listed
None
companies over the past ten years
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.
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C&S Paper Co., Ltd. 2021 Annual Report
Diagram on equity and control relationship between the Company and actual controllers
Actual controller controls the Company by entrust or other asset management methods
□ Applicable √ Not applicable
4. Share pledge by controlling shareholder or largest shareholder and person acting in concert reaching
80% of shareholding
□ Applicable √ Not applicable
5. Other legal person shareholders holding 10% or more of shares
√ Applicable □ Not applicable
Name of legal
Legal representative or person Principal activities or
person Date of establishment Registered capital
in charge of the institution management activities
shareholder
No engagement in any
specific business except for
Chung Shun Co. Deng Yingzhong June 01, 1996 HKD10,000
holding the Company’s
equities
6. Restrictions on share reductions of controlling shareholder, actual controller, restructuring parties and
other commitment subjects
□ Applicable √ Not applicable
IV. Implementation of Share Repurchase during the Reporting Period
Implementation progress of share repurchase
√ Applicable □ Not applicable
133
C&S Paper Co., Ltd. 2021 Annual Report
Proportion of
repurchased
shares to the
Number of Proportion to Expected Expected Purpose of Number of
Disclosure time underlying
shares to be total share repurchase repurchase repurchase shares
of the plan stock involved
repurchased capital amount time shares repurchased
in equity
incentive plan
(if any)
1.12%-1.69%
shares
14,666,667 - (calculated
22,222,222 based on the
Within the 12
shares share range
months from
(estimated that can be
the date of Stock incentive
based on the repurchased RMB660
January 06, approval by the plan or
cap repurchase estimated as million - 24,863,087 1.89%
2021 Board (January employee stock
price per cap RMB1 billion
6, 2021 - ownership plan
RMB45/share repurchase
January 5,
as reviewed price
2022)
and approved RMB45/share
by the Board) as reviewed
and approved
by the Board)
Implementation of share repurchase by centralized bidding
□ Applicable √ Not applicable
134
C&S Paper Co., Ltd. 2021 Annual Report
Section VIII Particulars of Preference Shares
□ Applicable √ Not applicable
The Company had no preference shares during the reporting period.
135
C&S Paper Co., Ltd. 2021 Annual Report
Section IX Corporate Bonds
□ Applicable √ Not applicable
136
C&S Paper Co., Ltd. 2021 Annual Report
Section X Financial Report
I. Audit Report
Type of auditor’s opinion Standard unqualified
Signing date of the Audit Report April 26, 2022
Name of auditing organization Mazars Certified Public Accountants (LLP)
Reference number of the Audit Report Zhong-Huan-Shen-Zi (2022) No. 0510117
Name of certified public accountants Wang Bing, Pan Guiquan
Audit Report
To all shareholders of C&S Paper Co., Ltd.,
I. Opinion
We have audited the accompanying financial statements of C&S Paper Co., Ltd. (hereinafter “the Company”),
which comprise the consolidated and the Parent Company’s balance sheet as at December 31, 2021, the
consolidated and the Parent Company’s income statement, the consolidated and the Parent Company’s cash flow
statement, and the consolidated and the Parent Company’s statement of the changes in equity for 2021, and notes
to the financial statements.
In our opinion, the accompanying financial statements have been prepared in accordance with the Accounting
Standards for Business Enterprises in all material aspects, and they fairly present the consolidated and the Parent
Company’s financial position as of December 31, 2021, and the consolidated and the Parent Company’s operating
results and cash flows for 2021.
II. Basis of Opinion
We conducted our audit in accordance with the Auditing Standards for PRC Certified Public Accountants. Our
responsibilities under those standards are further described in the “Certified Public Accountants’ Responsibilities
for the Audit of the Financial Statements” section of our report. We are independent of the Company in
accordance with the Code of Ethics for Chinese Certified Public Accountants (the “Code”), and we have fulfilled
our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
III. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters. We determine the followings are key audit matters in need of communication in our report.
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C&S Paper Co., Ltd. 2021 Annual Report
(I) Recognition of operating income
Key audit matter How the matter was addressed in our audit
Our audit procedures included:
(1) We obtained an understanding of and evaluated the internal control design over the
recognition of operating income and its operating effectiveness;
(2) We obtained an understanding and evaluated whether policies for recognizing
operating income were in compliance with requirements of accounting standards for
business enterprises via interviewing the management, consulting the Company’s
accounting policies, etc.;
As stated in Note VI (34) in the Company’s (3) We checked whether there were any abnormalities in the operations of the
financial statements, the Company recorded an Company’s major customers and whether there was related relationship between such
operating income of RMB9,149,870,464.80 in customers and the Company or its related parties by checking the business registration
2021. Since the amount of operating income is information of the customers and contracts with them;
significant and a key performance indicator, (4) We adopted the sampling method to select some customers and send them the
there is a relatively high inherent risk, so we confirmation letter to verify the balance of accounts receivable, the balance of
identify the recognition of operating income as prepayment, and the amount of sales income;
a key audit matter. (5) In respect of domestic sales, we adopted the sampling method to check the
large-value contracts and sales orders as well as their corresponding invoices,
outbound orders, delivery orders, customer receipts, etc.; for export sales, we used the
sampling method to check large-value contracts and sales orders as well as their
corresponding invoices, customs declarations, freight bills of lading, customer
receipts, etc.;
(6) We conducted cutoff test for operating income to assess whether operating income
was recognized in an appropriate period.
(II) Recognition of selling expenses
Key audit matter How the matter was addressed in our audit
As stated in Note VI(36) in the Company’s Our audit procedures included:
financial statements, the Company recorded a (1) We obtained an understanding of and evaluated the internal control design over the
selling expense of RMB1,986,544,514.02 in recognition of selling expense and its operating effectiveness;
2021, accounting for 21.71% of operating (2) We obtained the detailed list of selling expenses, and analyzed the reasonableness
income. Since selling expense has a great of each expense item based on features of the Company’s businesses; we also analyzed
impact on the Company’s financial results, the proportion of main expense items in the main business income and whether the
which may cause a major misstatement risk, we change trend of selling expense consistent with that of income;
identify the recognition of selling expense as a (3) We conducted a spot check of main items under selling expense and selected and
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C&S Paper Co., Ltd. 2021 Annual Report
key audit matter. checked some selling expense vouchers against corresponding contracts, invoices,
bank receipts and other original documents, as well as the Company’s sales promotion
policies, remuneration policies, etc.;
(4) We conducted cutoff test for selling expense to assess whether selling expense was
recognized across periods.
IV. Other information
The Company’s management is responsible for other information. Other information includes the information
included in the Company’s 2021 Annual Report, but excludes the financial statements and our audit report.
Our audit opinion on the financial statements does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our
knowledge obtained in the audit process or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that if there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
V. Responsibilities of Management and Governance Layer for Financial Statements
The management of C&S Paper Co., Ltd. (hereinafter the “Management”) is responsible for preparing financial
statements in accordance with the Accounting Standards for Business Enterprises, and fairly presenting them; the
Management also needs to design, implement and maintain necessary internal control to enable that the financial
statements are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the Management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing matters in relation to going concern (if applicable) and applying the
going-concern assumption unless the Management intends to liquidate the Company, cease operations, or have no
realistic alternative but to do so.
The governance layer is responsible for overseeing the financial reporting process of the Company.
VI. Certified Public Accountants’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether these financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an audit report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with CSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
As part of an audit work in accordance with CSAs, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
(I) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
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C&S Paper Co., Ltd. 2021 Annual Report
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
(II) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances.
(III) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
(IV) Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to drawing attention in our audit report to the related disclosures in these
financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause
the Company to cease to continue as a going concern.
(V) Evaluate the overall presentation, structure and content of the financial statements, and whether the financial
statements represent the underlying transactions and events in a manner that achieves fair presentation.
(VI) Obtain sufficient and appropriate audit evidence regarding the financial information of the entities or
business activities within the Company to express an opinion on the financial statements. We are responsible for
the direction, supervision and performance of the group audit, and remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide those charged with governance with a statement that we comply with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and related safeguards (if applicable).
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the period and are therefore the key audit matters. We
describe these matters in our audit report unless law or regulation precludes public disclosure about the matter or
when, in tiny minority circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Mazars Certified Public Accountants (LLP) Chinese Certified Public Accountant: Wang Bing
Chinese Certified Public Accountant: Pan Guiquan
Wuhan, PRC
April 26, 2022
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C&S Paper Co., Ltd. 2021 Annual Report
II. Financial Statements
Unit of financial statements: RMB
1. Consolidated balance sheet
Prepared by: C&S Paper Co., Ltd.
December 31, 2021
Unit: RMB
Item December 31, 2021 December 31, 2020
Current assets:
Monetary funds 875,052,493.12 1,125,196,199.56
Settlement reserve
Lending to banks and other
financial institutions
Tradable financial assets
Derivative financial assets
Notes receivable 2,327,060.20 724,419.74
Accounts receivable 1,177,831,399.28 1,051,423,939.59
Accounts receivable financing
Prepayments 36,685,769.73 26,819,108.57
Premium receivable
Reinsurance payables
Reinsurance contract reserves
receivable
Other receivables 12,353,794.41 15,824,945.56
Including: Interest receivable
Dividends receivable
Financial assets held under resale
agreements
Inventory 1,467,631,516.95 1,661,274,495.32
Contract assets
Assets held for sale 57,073,059.69 57,073,059.69
Non-current assets due within one
year
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C&S Paper Co., Ltd. 2021 Annual Report
Other current assets 123,530,879.96 101,584,569.30
Total current assets 3,752,485,973.34 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 33,138,481.74 34,575,365.94
Fixed assets 3,129,371,506.40 2,792,587,302.21
Construction work in progress 134,875,696.94 275,904,617.95
Productive biological assets
Oil & gas assets
Right-of-use assets 14,300,520.77
Intangible assets 168,453,928.11 169,355,772.24
Development expenses
Goodwill 64,654.15 64,654.15
Long-term deferred expenses 16,762,904.09 26,635,983.14
Deferred income tax assets 182,185,944.85 111,367,362.66
Other non-current assets 91,642,363.45 28,027,952.15
Total non-current assets 3,770,796,000.50 3,438,519,010.44
Total assets 7,523,281,973.84 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 334,969,632.58 234,887,563.22
Accounts payable 829,113,780.31 761,519,389.26
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C&S Paper Co., Ltd. 2021 Annual Report
Payments received in advance
Contract liabilities 164,360,443.34 137,333,617.40
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 payable 139,551,406.46 123,524,627.11
Tax and fees payable 107,184,810.97 112,608,054.87
Other payables 854,872,178.78 754,844,580.09
Including: Interests payable
Dividends payable 1,352,746.20 1,437,466.77
Transaction fee and commission
receivable
Reinsurance payable
Liabilities held for sale
Non-current liabilities due within
8,616,487.38
one year
Other current liabilities 21,250,613.29 17,628,086.63
Total current liabilities 2,459,919,353.11 2,285,288,859.92
Non-current liabilities:
Insurance contract reserves
Long-term borrowings
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities 5,565,928.14
Long-term payable
Long-term employee remuneration
payable
Provision
Deferred income 104,483,429.54 115,101,158.13
Deferred income tax liabilities 46,514,550.50 35,903,653.30
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C&S Paper Co., Ltd. 2021 Annual Report
Other non-current liabilities
Total non-current liabilities 156,563,908.18 151,004,811.43
Total liabilities 2,616,483,261.29 2,436,293,671.35
Owner’s equity:
Share capital 1,312,457,555.00 1,311,487,077.00
Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserve 940,742,686.19 907,006,505.05
Less: Treasury shares 722,243,283.39 96,480,911.29
Other comprehensive income
Special reserves
Surplus reserves 106,984,275.42 61,469,258.27
General reserves
Retained earnings 3,265,611,428.36 2,858,664,147.39
Total equity attributable to owners of
4,903,552,661.58 5,042,146,076.42
the parent company
Equities of minority shareholders 3,246,050.97
Total owner’s equity 4,906,798,712.55 5,042,146,076.42
Total liabilities and owners’ equities 7,523,281,973.84 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 December 31, 2021 December 31, 2020
Current assets:
Monetary funds 58,690,877.05 170,229,178.13
Tradable financial assets
Derivative financial assets
Notes receivable 10,185.51
Accounts receivable 171,055,039.37 92,647,372.33
Accounts receivable financing
Prepayments 3,867,904.95 7,940,396.34
Other receivables 128,580,102.05 136,987,584.64
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C&S Paper Co., Ltd. 2021 Annual Report
Including: Interest receivable
Dividends receivable
Inventory 120,747,222.55 156,605,546.36
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 23,545,158.50 52,517,725.87
Total current assets 506,496,489.98 616,927,803.67
Non-current assets:
Investments in creditor’s rights
Investments in other creditor’s
rights
Long-term receivable
Long-term equity investment 1,945,421,378.56 1,928,113,219.50
Investment in other equity
instruments
Other non-current financial assets
Investment property 17,160,598.03 17,939,329.51
Fixed assets 238,119,182.14 257,354,688.59
Construction work in progress 114,301,119.02
Productive biological assets
Oil & gas assets
Right-of-use assets 2,207,428.16
Intangible assets 27,486,332.17 25,205,232.21
Development expenses
Goodwill
Long-term deferred expenses
Deferred income tax assets 68,572,899.42 46,811,106.77
Other non-current assets 82,852,575.28 2,619,959.27
Total non-current assets 2,496,121,512.78 2,278,043,535.85
Total assets 3,002,618,002.76 2,894,971,339.52
Current liabilities:
Short-term borrowings
Tradable financial liabilities
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C&S Paper Co., Ltd. 2021 Annual Report
Derivative financial liabilities
Notes payable
Accounts payable 792,444,139.83 420,061,168.44
Payments received in advance
Contract liabilities 38,166,115.55 17,388,431.01
Employee remuneration payable 42,822,592.18 44,678,713.21
Tax and fees payable 7,119,037.16 5,995,417.05
Other payables 103,779,839.13 126,072,040.24
Including: Interests payable
Dividends payable 1,352,746.20 1,437,466.77
Liabilities held for sale
Non-current liabilities due within
1,125,486.62
one year
Other current liabilities 5,334,195.60 2,260,496.03
Total current liabilities 990,791,406.07 616,456,265.98
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities 1,083,172.96
Long-term payable
Long-term employee remuneration
payable
Provision
Deferred income 4,648,115.81 5,855,467.25
Deferred income tax liabilities 7,528,901.04 7,202,336.33
Other non-current liabilities
Total non-current liabilities 13,260,189.81 13,057,803.58
Total liabilities 1,004,051,595.88 629,514,069.56
Owner’s equity:
Share capital 1,312,457,555.00 1,311,487,077.00
Other equity instruments
Including: Preference shares
Perpetual bonds
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C&S Paper Co., Ltd. 2021 Annual Report
Capital reserve 863,078,990.57 831,693,206.19
Less: Treasury shares 722,243,283.39 96,480,911.29
Other comprehensive income
Special reserves
Surplus reserves 106,862,941.14 61,347,923.99
Retained earnings 438,410,203.56 157,409,974.07
Total owner’s equity 1,998,566,406.88 2,265,457,269.96
Total liabilities and owners’ equities 3,002,618,002.76 2,894,971,339.52
3. Consolidated income statement
Unit: RMB
Item 2021 2020
I. Total Operating Income 9,149,870,464.80 7,823,528,416.32
Including: Operating income 9,149,870,464.80 7,823,528,416.32
Interest income
Gross earned premiums
Service charge and
commission income
II. Total Operating Cost 8,460,986,513.10 6,728,790,634.82
Including: Operating costs 5,863,049,104.38 4,590,904,040.35
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 65,545,652.41 56,112,918.09
Selling expenses 1,986,544,514.02 1,544,562,244.71
Administrative expenses 341,144,204.30 364,914,344.30
R&D expenses 211,964,212.18 190,298,633.61
Finance expenses -7,261,174.19 -18,001,546.24
Including: Interest fees 1,872,913.37 2,903,635.12
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C&S Paper Co., Ltd. 2021 Annual Report
Interest income 10,512,490.53 8,202,097.37
Plus: Other income 24,094,502.50 29,224,284.70
Return on investment ("-"
365,973.72 3,868,134.28
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 ("-"
-9,360,485.52 -6,462,152.71
indicates loss)
Asset impairment losses ("-"
-27,791,339.98 -15,863,724.17
indicates loss)
Return on disposal of assets
-462,228.42 -1,630,681.60
("-" indicates loss)
III. Operating Profit ("-" indicates loss) 675,730,374.00 1,103,873,642.00
Plus: Non-operating income 3,810,360.34 5,429,670.00
Less: Non-operating expenditure 12,059,080.49 20,912,859.12
IV. Total Profit ("-" indicates total loss) 667,481,653.85 1,088,390,452.88
Less: Income tax expense 86,436,599.78 182,501,371.47
V. Net Profit ("-" indicates net loss) 581,045,054.07 905,889,081.41
i. Classified by operation continuity
1. Net profit from continued
581,045,054.07 905,889,081.41
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
581,097,222.93 905,889,081.41
of the parent company
2. Minority shareholders’ profits and -52,168.86
148
C&S Paper Co., Ltd. 2021 Annual Report
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
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
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C&S Paper Co., Ltd. 2021 Annual Report
income attributable to minority
shareholders
VII. Total Comprehensive Income 581,045,054.07 905,889,081.41
Total comprehensive income
attributable to owners of the parent 581,097,222.93 905,889,081.41
company
Total comprehensive income
-52,168.86
attributable to minority shareholders
VIII. Earnings per Share:
i. Basic earnings per share 0.45 0.70
ii. Diluted earnings per share 0.44 0.69
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
4. Income statement of the Parent Company
Unit: RMB
Item 2021 2020
I. Operating Income 2,383,117,016.30 1,632,515,354.88
Less: Operating cost 2,116,546,576.95 1,377,798,965.81
Tax and surcharges 6,699,681.18 5,201,738.09
Selling expenses 173,898,463.88 127,888,051.22
Administrative expenses 135,461,184.59 179,278,540.50
R&D expenses
Finance expenses -7,098,965.55 -5,095,985.70
Including: Interest fees 134,353.98
Interest income 1,173,475.32 2,906,543.07
Plus: Other income 4,353,161.48 1,988,938.21
Return on investment ("-"
482,704,072.79 143,256,231.99
indicates loss)
Including: Return on
investment in associates and joint
ventures
Profits from
derecognition of financial assets at
amortized cost
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C&S Paper Co., Ltd. 2021 Annual Report
Gains from net exposure
hedging ("-" indicates loss)
Gains from changes in fair
value ("-" indicates loss)
Credit impairment losses ("-"
-628,473.64 -457,064.44
indicates loss)
Asset impairment losses ("-"
-2,273,866.23 -572,411.86
indicates loss)
Return on disposal of assets
-613,479.84
("-" indicates loss)
II. Operating Profit ("-" indicates loss) 441,764,969.65 91,046,259.02
Plus: Non-operating income 737,533.42 393,442.74
Less: Non-operating expenditure 7,335,396.44 15,848,705.74
III. Total Profit ("-" indicates total loss) 435,167,106.63 75,590,996.02
Less: Income tax expense -19,983,064.82 -7,045,758.08
IV. Net Profit ("-" indicates net loss) 455,150,171.45 82,636,754.10
i. Net profit from continued
455,150,171.45 82,636,754.10
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
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
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C&S Paper Co., Ltd. 2021 Annual Report
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 455,150,171.45 82,636,754.10
VII. Earnings per Share:
i. Basic earnings per share
ii. Diluted earnings per share
5. Consolidated cash flow statement
Unit: RMB
Item 2021 2020
I. Cash Flows from Operating
Activities:
Cash received from sale of goods
9,026,736,956.62 7,641,541,541.60
or 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
Cash received from the premium
of direct insurance contracts
Net cash from reinsurance business
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C&S Paper Co., Ltd. 2021 Annual Report
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 868,062.36 8,043,686.95
Cash received related to other
70,331,809.95 152,705,536.70
operating activities
Sub-total of cash inflow from operating
9,097,936,828.93 7,802,290,765.25
activities
Cash paid for goods purchased and
5,434,415,226.04 4,999,555,647.15
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
838,638,770.81 665,109,162.40
employees
Tax payments 584,815,507.83 534,941,400.79
Cash payments related to other
920,487,717.42 774,483,692.66
operating activities
Sub-total of cash outflow from
7,778,357,222.10 6,974,089,903.00
operating activities
Net cash flow from operating activities 1,319,579,606.83 828,200,862.25
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C&S Paper Co., Ltd. 2021 Annual Report
II. Cash Flows from Investing
Activities:
Cash from realization of
investment
Cash received from the return on
365,973.72 3,868,134.28
investments
Net cash received from the
disposal of fixed assets, intangible 11,062,476.47 48,828,706.60
assets, and other long-term assets
Net amount of cash received from
the disposal of subsidiaries and other 38,219.83
operating organizations
Cash received related to other
50,000,000.00 127,105,000.00
investing activities
Sub-total of cash inflow from investing
61,466,670.02 179,801,840.88
activities
Cash paid for the acquisition and
construction of fixed assets, intangible 636,140,768.78 511,677,417.02
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
72,479,083.36 50,000,000.00
investing activities
Sub-total of cash outflow from
708,619,852.14 561,677,417.02
investing activities
Net cash flows from investing activities -647,153,182.12 -381,875,576.14
III. Cash Flows from Financing
Activities:
Cash received from capital
34,820,899.15 28,101,700.23
contribution
Including: Proceeds received by
subsidiaries from minority
shareholders’ investment
Cash received from borrowings 187,245,860.18 383,892,976.77
Cash received related to other
financing activities
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C&S Paper Co., Ltd. 2021 Annual Report
Sub-total of cash inflow from financing
222,066,759.33 411,994,677.00
activities
Cash paid for repayments of
328,879,098.49 301,057,260.06
borrowings
Cash payment for interest expenses
129,946,347.96 99,989,760.28
and distribution of dividends or profits
Including: Dividend and profit
paid by subsidiaries to minority
shareholders
Cash payments related to other
682,429,516.95 80,056,125.89
financing activities
Sub-total of cash outflow from
1,141,254,963.40 481,103,146.23
financing activities
Net cash flows from financing activities -919,188,204.07 -69,108,469.23
IV. Effect of Exchange Rate Changes on
-5,474,680.66 -3,179,534.13
Cash and Cash Equivalents
V. Net Increase in Cash and Cash
-252,236,460.02 374,037,282.75
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
797,797,675.70 1,050,034,135.72
Equivalents
6. Cash flow statement of the Parent Company
Unit: RMB
Item 2021 2020
I. Cash Flows from Operating
Activities:
Cash received from sale of goods
2,271,872,550.53 1,317,396,402.58
or rendering of services
Tax rebates 120,214.00
Cash received related to other
807,061,207.28 1,834,396,504.14
operating activities
Sub-total of cash inflow from operating
3,078,933,757.81 3,151,913,120.72
activities
Cash paid for goods purchased and
1,619,835,759.07 985,895,534.46
services rendered
Cash paid to and on behalf of 186,144,361.74 127,413,062.62
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C&S Paper Co., Ltd. 2021 Annual Report
employees
Tax payments 44,702,981.48 31,053,247.68
Cash payments related to other
897,857,291.76 1,414,912,983.81
operating activities
Sub-total of cash outflow from
2,748,540,394.05 2,559,274,828.57
operating activities
Net cash flow from operating activities 330,393,363.76 592,638,292.15
II. Cash Flows from Investing
Activities:
Cash from realization of
investment
Cash received from the return on
482,704,072.79 143,256,231.99
investments
Net cash received from the
disposal of fixed assets, intangible 10,290.00 48,336.80
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
50,000,000.00 127,105,000.00
investing activities
Sub-total of cash inflow from investing
532,714,362.79 270,409,568.79
activities
Cash paid for the acquisition and
construction of fixed assets, intangible 177,904,868.68 32,119,334.97
assets, and other long-term assets
Cash paid for investments 7,740,000.00 665,600,000.00
Net amount of cash paid for
acquisition of subsidiaries and other
operating organizations
Cash payments related to other
10,000,000.00 50,000,000.00
investing activities
Sub-total of cash outflow from
195,644,868.68 747,719,334.97
investing activities
Net cash flows from investing activities 337,069,494.11 -477,309,766.18
III. Cash Flows from Financing
Activities:
Cash received from capital
31,560,899.15 28,101,700.23
contribution
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C&S Paper Co., Ltd. 2021 Annual Report
Cash received from borrowings
Cash received related to other
financing activities
Sub-total of cash inflow from financing
31,560,899.15 28,101,700.23
activities
Cash paid for repayments of
9,477,423.45
borrowings
Cash payment for interest expenses
128,727,133.02 97,014,306.99
and distribution of dividends or profits
Cash payments related to other
676,395,258.62 32,970,709.24
financing activities
Sub-total of cash outflow from
814,599,815.09 129,985,016.23
financing activities
Net cash flows from financing activities -783,038,915.94 -101,883,316.00
IV. Effect of Exchange Rate Changes on
-1,731.44 254,432.97
Cash and Cash Equivalents
V. Net Increase in Cash and Cash
-115,577,789.51 13,699,642.94
Equivalents
Plus: Opening balance of cash and
169,851,203.76 156,151,560.82
cash equivalents
VI. Closing Balance of Cash and Cash
54,273,414.25 169,851,203.76
Equivalents
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7. Consolidated statement of changes in owner’s equity
Amount of the current period
Unit: RMB
2021
Owner’s equity attributable to the Parent Company
Other equity
instruments
Equity of
Pe
Item Other Spec Gener
minority
Pref rp Total owner’s equity
Less: Treasury compreh ial al Othe
Share capital shareholders
eren etu Ot Capital reserve Surplus reserves Retained earnings Subtotal
shares ensive reser reserv rs
ce al he
income ves es
shar bo rs
es nd
s
I. Balance at the End of Last 1,311,487,077.0
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
Year 0
Plus: Alternation to
accounting policies
Correction to previous
errors
Business
combinations involving
enterprises under common
control
Others
II. Balance at the Beginning of 1,311,487,077.0 907,006,505.05 96,480,911.29 61,469,258.27 2,858,664,147.39 5,042,146,076.42 5,042,146,076.42
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C&S Paper Co., Ltd. 2021 Annual Report
the Year 0
III. Changes in the Period ("-"
970,478.00 33,736,181.14 625,762,372.10 45,515,017.15 406,947,280.97 -138,593,414.84 3,246,050.97 -135,347,363.87
Indicates Decrease)
i. Total comprehensive income 581,097,222.93 581,097,222.93 -52,168.86 581,045,054.07
ii. Capital contributed or
970,478.00 33,736,181.14 625,762,372.10 -591,055,712.96 3,298,219.83 -587,757,493.13
decreased by owner
1 Ordinary shares contributed
3,131,211.00 31,164,564.50 34,295,775.50 3,260,000.00 37,555,775.50
by owners
2 Capital contributed by owners
of other equity instruments
3 Share based payments
-2,160,733.00 2,571,616.64 -35,487,600.13 35,898,483.77 35,898,483.77
recognized as owner’s equity
4 Others 661,249,972.23 -661,249,972.23 38,219.83 -661,211,752.40
iii. Profit distribution 45,515,017.15 -174,149,941.96 -128,634,924.81 -128,634,924.81
1 Appropriation of surplus
45,515,017.15 -45,515,017.15
reserves
2 Appropriation of general risk
reserves
3 Distribution to owners (or
-128,634,924.81 -128,634,924.81 -128,634,924.81
shareholders)
4 Others
iv. Interior balance from
owner’s equity
1 Added capital (or share
capital) from capital reserves
2 Added capital (or share
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C&S Paper Co., Ltd. 2021 Annual Report
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 the 1,312,457,555.0
940,742,686.19 722,243,283.39 106,984,275.42 3,265,611,428.36 4,903,552,661.58 3,246,050.97 4,906,798,712.55
Period 0
Amount of last period
Unit: RMB
2020
Owner’s equity attributable to the Parent Company
Other
Equity of
equity Other Spec Gener
Item minority
instrument Less: Treasury compreh ial al Othe Total owner’s equity
Share capital Capital reserve Surplus reserves Retained earnings Subtotal shareholders
s shares ensive reser reserv rs
Pr Pe Ot income ves es
efe rp he
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C&S Paper Co., Ltd. 2021 Annual Report
re etu rs
nc al
e bo
sh nd
are s
s
I. Balance at the End of Last
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
Year
Plus: Alternation to
accounting policies
Correction to previous
errors
Business
combinations involving
enterprises under common
control
Others
II. Balance at the Beginning 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
the Year
III. Changes in the Period ("-"
2,595,804.00 146,275,088.48 -8,311,737.71 8,263,675.41 799,695,311.59 965,141,617.19 965,141,617.19
Indicates Decrease)
i. Total comprehensive income 905,889,081.41 905,889,081.41 905,889,081.41
ii. Capital contributed or
2,595,804.00 146,275,088.48 -8,311,737.71 157,182,630.19 157,182,630.19
decreased by owner
1 Ordinary shares contributed
3,610,416.00 34,809,136.79 38,419,552.79 38,419,552.79
by owners
2 Capital contributed by owners
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C&S Paper Co., Ltd. 2021 Annual Report
of other equity instruments
3 Share based payments
-1,014,612.00 111,465,951.69 -35,992,459.47 146,443,799.16 146,443,799.16
recognized as owner’s equity
4 Others 27,680,721.76 -27,680,721.76 -27,680,721.76
iii. Profit distribution 8,263,675.41 -106,193,769.82 -97,930,094.41 -97,930,094.41
1 Appropriation of surplus
8,263,675.41 -8,263,675.41
reserves
2 Appropriation of general risk
reserves
3 Distribution to owners (or
-97,930,094.41 -97,930,094.41 -97,930,094.41
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
4 Retained earnings of
carry-over of the defined benefit
plan
5 Retained earnings of
carry-over of other
comprehensive income
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C&S Paper Co., Ltd. 2021 Annual Report
6 Others
v. Special reserves
1 Appropriation for the period
2 Use for the period
vi. Others
IV. Closing Balance of the
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
Period
8. Statement of changes in owner’s equity of the Parent Company
Amount of the current period
Unit: RMB
2021
Other equity instruments Other Spec
Item Less: Treasury compreh ial Othe
Preferen
Share capital Perpetua Capital reserve Surplus reserves Retained earnings Total owner’s equity
ce Others shares ensive reser rs
l bonds
shares income ves
I. Balance at the End of Last Year 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
Plus: Alternation to accounting
policies
Correction to previous
errors
Others
II. Balance at the Beginning of 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
Year
III. Changes in the Period ("-" 970,478.00 31,385,784.38 625,762,372.10 45,515,017.15 281,000,229.49 -266,890,863.08
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C&S Paper Co., Ltd. 2021 Annual Report
Indicates Decrease)
i. Total comprehensive income 455,150,171.45 455,150,171.45
ii. Capital contributed or decreased by
970,478.00 31,385,784.38 625,762,372.10 -593,406,109.72
owner
1 Ordinary shares contributed by
3,131,211.00 31,164,564.50 34,295,775.50
owners
2 Capital contributed by owners of
other equity instruments
3 Share based payments recognized as
-2,160,733.00 221,219.88 -35,487,600.13 33,548,087.01
owner’s equity
4 Others 661,249,972.23 -661,249,972.23
iii. Profit distribution 45,515,017.15 -174,149,941.96 -128,634,924.81
1 Appropriation of surplus reserves 45,515,017.15 -45,515,017.15
2 Distribution to owners (or
-128,634,924.81 -128,634,924.81
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
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C&S Paper Co., Ltd. 2021 Annual Report
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 the Period 1,312,457,555.00 863,078,990.57 722,243,283.39 106,862,941.14 438,410,203.56 1,998,566,406.88
Amount of last period
Unit: RMB
2020
Other equity
instruments Specia
Item Perp Less: Treasury Other comprehensive l Othe
Share capital Prefer Capital reserve Surplus reserves Retained earnings Total owner’s equity
etual shares income reserv rs
ence Others
bond es
shares
s
I. Balance at the End of Last Year 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
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
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C&S Paper Co., Ltd. 2021 Annual Report
III. Changes in the Period ("-"
2,595,804.00 141,451,481.81 -8,311,737.71 8,263,675.41 -23,557,015.72 137,065,683.21
Indicates Decrease)
i. Total comprehensive income 82,636,754.10 82,636,754.10
ii. Capital contributed or decreased by
2,595,804.00 141,451,481.81 -8,311,737.71 152,359,023.52
owner
1 Ordinary shares contributed by
3,610,416.00 34,809,136.79 38,419,552.79
owners
2 Capital contributed by owners of
other equity instruments
3 Share based payments recognized as
-1,014,612.00 106,642,345.02 -35,992,459.47 141,620,192.49
owner’s equity
4 Others 27,680,721.76 -27,680,721.76
iii. Profit distribution 8,263,675.41 -106,193,769.82 -97,930,094.41
1 Appropriation of surplus reserves 8,263,675.41 -8,263,675.41
2 Distribution to owners (or
-97,930,094.41 -97,930,094.41
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
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C&S Paper Co., Ltd. 2021 Annual Report
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 the Period 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
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C&S Paper Co., Ltd. 2021 Annual Report
III. Basic Information 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.
As at December 31, 2021, the Company has had a registered capital of RMB1,312,457,555.00 and a share capital
of RMB1,312,457,555.00.
1. 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
2. Business nature and main business activities of the Company
C&S Paper Co., Ltd. and its subsidiaries (hereafter collectively 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.
3. 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).
4. 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 April 26,
2022.
5. Consolidation scope of financial statements
As of December 31, 2021, the Company has 28 subsidiaries that are included in the consolidated scope, as
detailed in “Note IX. Equities in Other Entities”. Compared with last year, ten subsidiaries have been newly added
into while one subsidiary has been deleted from 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
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
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C&S Paper Co., Ltd. 2021 Annual Report
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) Important accounting judgments and 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 of the Company as of
December 31, 2021 as well as its operating results, cash flow, and other relevant information during 2021. 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 period of the Company is divided into annual and interim periods. Interim periods refer to any
reporting period shorter than a full accounting year. 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. 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.
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C&S Paper Co., Ltd. 2021 Annual Report
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
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
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C&S Paper Co., Ltd. 2021 Annual Report
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,
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.
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 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.
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.
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C&S Paper Co., Ltd. 2021 Annual Report
(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, 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 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) Long-term equity investments" or "Note V (10) Financial instruments" for details.
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
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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
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
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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. The undistributed profit at the
beginning of the year is the previous year’s undistributed profit at the end of the year after conversion; the
undistributed profit at the end of the period is allocated and recognized to each item according to the converted
profits; the difference between the total of asset and liability items and shareholders’ equity items after conversion
is considered as foreign currency translation difference and 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
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
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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 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: 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
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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
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
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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.
(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
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
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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 Acceptors are banks with low credit risks.
acceptance
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.
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 This portfolio comprises amounts of related parties within the consolidated
portfolio 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.
Portfolio based on This portfolio comprises amounts of related parties within the consolidated
related parties scope.
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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
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. For inventories with a large quantity but a low unit value, provisions for inventory
impairment are set aside according to inventory category.
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.
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16. Contract assets
The Company recognizes the contract amounts where the customer has not paid the consideration but the
Company has fulfilled its contractual obligation while the claim to the amount from the customer is not
unconditional (i.e. Only dependent on the passage of time) as contract assets in the balance sheet. Contract assets
and contract liabilities under the same contract are presented on a net basis; contract assets and contract liabilities
under different contracts are not offset.
17. Contract costs
If the incremental cost incurred by the Company for obtaining a contract is expected to be recovered, the cost of
obtaining the contract is recognized as an asset. However, if the amortization period of the asset does not exceed
one year, it is included into the profit and loss of the period as it occurs.
If the contract cost does not fall within other enterprise accounting standards than the Accounting Standards for
Business Enterprises No. 14 -- Revenue and meet the following conditions at the same time, it is considered as
contract performance cost and recognized as asset: 1) the cost is directly related to an existing or expected contract
including direct labor, direct material or manufacturing overhead (or similar expenses), or the cost has been
expressly defined as borne by the customer, or the cost is incurred solely as a result of the contract; 2) the cost
increases the Company’s future resources to perform contractual obligations; and 3) the cost is expected to be
recovered.
Contract cost-related assets are amortized on the same basis of goods revenue recognition relating to the asset and
included in the profit and loss of the current period.
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
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
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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
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
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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
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.
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
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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
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)
Long-term asset impairment".
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.
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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.
(2) Depreciation method
Category 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: Not applicable
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) Long-term asset impairment".
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26. Borrowing costs
Borrowing costs include interest on borrowings, amortizations of discounts or premiums, incidental expenses,
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
Impairment test method and impairment provision method for right-of-use assets are detailed in "Note V (42)
Leases".
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
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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
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.
(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
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
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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
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 of
the Company mainly include office building decoration costs, sewage use rights and electricity use rights.
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 Company’s obligation to transfer goods to a customer for which the Company has
received consideration from the customer. If the customer has paid contract consideration or the Company has
obtained the unconditional right of collection before the Company transfer goods to the customer, the amount
received or the receivable is recognized as contract liability at the earlier of the time when the customer actual
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pays the amount and when the amount becomes due. Contract assets and contract liabilities under the same
contract are presented on a net basis; contract assets and contract liabilities under different contracts are not offset.
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.
(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
Recognition and accounting treatment methods of lease liabilities are detailed in "Note V (42) Leases".
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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.
(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.
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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.
38. Preference shares, perpetual bonds and other financial instruments
None
39. Revenue
Accounting policy for recognition and measurement of revenue
Revenue is the total inflow of economic benefits unrelated to the capital invested by the shareholders which are
formed in the daily activities of the Company and can lead to an increase in shareholders’ equity. The revenue is
recognized when the customers take control of the relevant goods (including services, same for below) 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. Wherein, taking control of relevant goods means being able to control the use of
the goods and obtain almost all economic benefits therefrom.
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
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
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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.
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
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.
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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
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
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
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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
A lease is a contract whereby the Company assigns or acquires the right to control the use of one or more
identified assets for a specified period in exchange for or with payment of consideration. The Company evaluates
whether a contract is a lease or contains a lease at its inception date.
(1) The Company as the lessee
Main types of assets leased by the Company are properties and buildings.
i. Initial measurement
Except for short-term leases or low-value asset leases, the Company recognizes the right to use the leased asset
during the lease term as a right-of-use asset and recognizes the present value of unpaid lease payments as a lease
liability. When calculating the present value of lease payments, the Company adopts the interest rate implicit in
the lease as the discount rate; if the interest rate implicit in the lease cannot be determined, the lessee’s
incremental borrowing rate is used as the discount rate.
ii. Follow-up measurement
The Company depreciates the right-of-use assets with reference to relevant depreciation provisions specified in
the Accounting Standards for Business Enterprises No. 4 - Fixed Assets (see "Note IV ((15) Fixed 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.
For lease liabilities, the Company calculates its interest expenses in each period of the lease term at a fixed
periodic interest rate which is included in the profit and loss of the current period. Variable lease payments that are
not included in the measurement of lease liabilities are included in the current profit and loss when they are
actually incurred
After the commencement date of the lease term, when there is a change in the actual fixed payment amount, a
change in the estimated payable amount of the guaranteed residual value, a change in the index or ratio used to
determine the lease payment amount, or a change in the evaluation results or actual exercise of the purchase
option, renewal option or termination option, the Company re-measures the lease liability according to the present
value of the changed lease payments and adjusts the book value of the right-of-use asset accordingly. If the book
value of the right-of-use asset has been reduced to zero but the lease liability still needs to be further reduced, the
Company includes the remaining amount in the profit and loss of the current period.
iii. Short-term leases and low-value asset leases
For short-term leases (leases with a term of not more than 12 months since the lease commencement date) and
low-value asset leases Lease liabilities, the Company adopts a simplified approach, i.e. Not recognizing 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) The Company as the lessor
On the lease commencement date, the company divides leases into finance leases and operating leases based on
the substance of the transaction. Leases of assets where substantially all the risks and rewards of ownership have
been transferred are classified as finance leases. Other leases than the finance leases are classified as operating
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C&S Paper Co., Ltd. 2021 Annual Report
leases.
i. Operating lease
The Company adopts the straight-line method to recognize lease receipts from operating leases as rental income
for each period of the lease term. Variable lease payments related to operating leases that are not included in lease
receipts are included in the current profit and loss when they are actually incurred.
ii. Finance lease
The company recognizes the finance lease receivables and derecognizes the finance lease assets on the
commencement date of the lease term. The financial lease receivables are initially measured by the net investment
in the lease (the sum of the unguaranteed residual value and the present value of the lease receipts not yet received
at the beginning of the lease term, discounted at the interest rate implicit in the lease), while interest income is
calculated and recognized according to the fixed periodic interest rate in each period of the lease term. Variable
lease payments obtained by the Company that are not included in the measurement of the net value of lease
liabilities are included in the current profit and loss when they are actually incurred.
(1) Accounting treatment method for operating lease: Not applicable
(2) Accounting treatment method for finance lease: Not applicable
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 accounting policies Approval procedure Remarks
On December 12, 2018, the Ministry of Finance issued
the revised Accounting Standards for Business
On May 21, 2021, the Company
Enterprises No. 21 -- Leases (C.K. [2018] No. 35)
convened the 5th meeting of the Details can be found in the
(hereinafter referred to as the “New Lease Standards”),
fifth session of the Board of Announcement on Changes to
requiring that enterprises listed both within the borders
Directors and the 3rd meeting of the Accounting Policies
and abroad as well as enterprises listed abroad and
fifth session of the Board of (Announcement No.: 2021-76)
adopting IFRS or Accounting Standards for Business
Supervisors, and approved the dated May 22, 2021 on CNINFO
Enterprises to prepare financial statements should
Proposal on Changes to Accounting (http://www.cninfo.com.cn) .
implement these revised Standards from January 1, 2019;
Policies.
other enterprises listed within China shall implement
these revised Standards from January 1, 2021.
1) Accounting policy changes resulted from the execution of the New Revenue Standards
On December 7, 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”). As passed under a
resolution at the 5th meeting of the fifth session of the Board of Directors on May 21, 2021, the Company started
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C&S Paper Co., Ltd. 2021 Annual Report
to enforce the aforesaid New Lease Standards from January 1, 2021 and adjusted related accounting policies
accordingly.
Pursuant to the New Lease Standards, for contracts that already exist prior to the enforcement of the new
standards, the Company chooses not to re-evaluate whether they are a lease or contain a lease.
The Company only adjusts the cumulative impact number for lease contracts that have been yet been completed as
of January 1, 2021. The amounts of retained earnings and other relevant items in the financial statements at the
beginning of the period for the first time adoption of the new standards (i.e. January 1, 2021) are adjusted based
on the accumulative impact amount at the first time adoption, while comparative financial information for the
previous accounting periods is not adjusted.
The Company’s specific processing and its impact on the date of fist-time adoption of the new standards (i.e.
January 1, 2021) are as follows:
A. The Company as the lessee:
For finance leases on the adoption date of the new standards, if the Company is the lessee, it measures the
right-of-use assets and lease liabilities according to the original book value of the financial leased assets and the
financial lease payables. For operating leases on the adoption date of the new standards, the Company, as the
lessee, measures lease liabilities according to the present value of the remaining lease payments discounted at the
incremental borrowing rate on the adoption date of the new standards; the unpaid rent accrued on an accrual basis
under the original lease standards is included in the remaining lease payments.
For operating leases prior to the adoption date of the new standards, the Company measures the right-of-use asset
based on the amount equal to the lease liability and makes necessary adjustments based on prepaid rents. The
Company conducts an impairment test on the right-of-use assets on the adoption date and adjusts the book value
of the right-of-use assets.
For operating leases where the leased assets belong to low-value assets prior to the adoption date, the Company
does not recognize as right-of-use assets and lease liabilities For operating leases other than low-value asset leases
at the adoption date, the Company applies one or more of the following simplified treatments for each lease:
Leases to be completed within 12 months of the adoption date are treated as short-term leases;
When measuring lease liabilities, the same discount rate is used for leases with similar characteristics;
The measurement of the right-of-use assets excludes initial direct costs;
If there is an option to renew or terminate the lease, the Company determines the lease term based on the
actual exercise of the option before the adoption date and other latest conditions;
If there is a lease change before the adoption date, the company will carry out accounting treatment
according to the final arrangement of the lease change.
B. Main changes and impacts of the implementation of the New Lease Standards
The houses and buildings leased by the company were originally treated as operating leases. According to the new
standards, on January 1, 2021, the Company recognized right-of-use assets of RMB 12,852,715.53, lease
liabilities of RMB 8,089,819.67, and non-current liabilities due within one year of RMB 4,762,895.86.
Impacts on the financial statements dated January 1, 2021 are listed in the following:
Statement item Amount on December 31, 2020 (prior to Amount on January 1, 2021 (after change)
change)
Consolidated Parent Company’s Consolidated Parent Company’s
statement statement statement statement
Right-of-use assets 12,852,715.53 3,161,008.25
Lease liabilities 8,089,819.67 1,858,811.04
Non-current liabilities due 4,762,895.86 1,302,197.21
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C&S Paper Co., Ltd. 2021 Annual Report
within one year
The weighted average of the incremental borrowing rate used by the Company on its lease liabilities in its balance
sheet dated January 1, 2021 is 4.75%.
The adjustment process for the difference between the unpaid minimum lease payments for major operating leases
at the end of 2020 as disclosed in its 2020 annual financial statements and those included in lease liabilities on
January 1, 2021 is as follows:
Item Consolidated statement Parent Company’s
statement
Minimum lease payments of major operating leases at December 14,874,019.59 3,189,784.64
31, 2020
Less: Lease payments with simplified treatment 1,295,863.18
Including: Short-term lease 1,295,863.18
Low-value asset lease
Adjusted minimum lease payments of major operating leases at 13,578,156.41 3,189,784.64
January 1, 2021
Weighted average of incremental borrowing rates 4.75% 4.75%
Balance of lease liabilities on January 1, 2021 12,852,715.53 3,161,008.25
Including: Lease liabilities due within one year 4,762,895.86 1,302,197.21
(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 □ Not 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
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C&S Paper Co., Ltd. 2021 Annual Report
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
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
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C&S Paper Co., Ltd. 2021 Annual Report
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 12,852,715.53 12,852,715.53
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 3,451,371,725.97 12,852,715.53
Total assets 7,478,439,747.77 7,491,292,463.30 12,852,715.53
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
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
198
C&S Paper Co., Ltd. 2021 Annual Report
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
4,762,895.86 4,762,895.86
due within one year
Other current liabilities 17,628,086.63 17,628,086.63
Total current liabilities 2,285,288,859.92 2,290,051,755.78 4,762,895.86
Non-current liabilities:
Insurance contract
reserves
Long-term borrowings
Bonds payable
Including: Preference
shares
Perpetual
bonds
Lease liabilities 8,089,819.67 8,089,819.67
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
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C&S Paper Co., Ltd. 2021 Annual Report
liabilities
Other non-current
liabilities
Total non-current liabilities 151,004,811.43 159,094,631.10 8,089,819.67
Total liabilities 2,436,293,671.35 2,449,146,386.88 12,852,715.53
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 7,491,292,463.30 12,852,715.53
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
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C&S Paper Co., Ltd. 2021 Annual Report
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
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
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C&S Paper Co., Ltd. 2021 Annual Report
Oil & gas assets
Right-of-use assets 3,161,008.25 3,161,008.25
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 2,281,204,544.10 3,161,008.25
Total assets 2,894,971,339.52 2,898,132,347.77 3,161,008.25
Current liabilities:
Short-term borrowings
Tradable financial
liabilities
Derivative financial
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
1,302,197.21 1,302,197.21
due within one year
Other current liabilities 2,260,496.03 2,260,496.03
Total current liabilities 616,456,265.98 617,758,463.19 1,302,197.21
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C&S Paper Co., Ltd. 2021 Annual Report
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preference
shares
Perpetual
bonds
Lease liabilities 1,858,811.04 1,858,811.04
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 14,916,614.62 1,858,811.04
Total liabilities 629,514,069.56 632,675,077.81 3,161,008.25
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 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 2,898,132,347.77 3,161,008.25
equities
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C&S Paper Co., Ltd. 2021 Annual Report
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%, 9%
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
Income tax
Name of taxpayer
rate
C&S Paper Co., Ltd., Zhongshan Zhongshun Trading Co., Ltd., C&S (Hubei) Paper Co., Ltd., Zhejiang Zhongshun
Paper Co., Ltd., Chengdu Zhongshun Paper Co., Ltd., Hangzhou Jie Rou Trading Co., Ltd., Beijing C&S Paper Co.,
25%
Ltd., Sun Daily Necessities Co., Ltd., C&S (Dazhou) Paper Co., Ltd., Shanghai Huicong Paper Co., Ltd., Yunfu
Hengtai Trading Co., Ltd., and C&S (Jiangsu) Paper Co., Ltd.
C&S (Zhongshan) Paper Co., Ltd., Xiaogan C&S Trading Co., Ltd., Beijing Bloomage Jierou Biotechnology Co.,
Ltd., Dolemi Sanitary Products Co., Ltd., Luzhou Dolemi Sanitary Products Co., Ltd., Mianyang Dolemi Sanitary
Products Co., Ltd., Zhengzhou Dolemi Sanitary Products Co., Ltd., Dazhou Dolemi Sanitary Products Co., Ltd., 20%
Guiyang Dolemi Sanitary Products Co., Ltd., Zhanjiang Dolemi Sanitary Products Co., Ltd., and Xi’an Dolemi
Sanitary Products Co., Ltd.
Zhong Shun International Co., Ltd., and C&S Hong Kong Co., Ltd. (Note 1) 16.50%
Jiangmen Zhongshun Paper Co., Ltd., C&S (Sichuan) Paper Co., Ltd., and C&S (Yunfu) Paper Co., Ltd. 15%
204
C&S Paper Co., Ltd. 2021 Annual Report
Progressive
C&S (Macao) Co., Ltd. (Note 2)
rate
2. Tax incentive
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) in September, 2020, with a valid term of
three years. Therefore, the corporate income tax is calculated at a tax rate of 15% in 2021.
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) in December, 2020, with a valid term of
three years. Therefore, the corporate income tax is calculated at a tax rate of 15% in 2021.
Jiangmen Zhongshun Paper Co., Ltd. was certified as a high-tech enterprise of Guangdong Province in 2021 and
was awarded the Certificate of High-tech Enterprise (No. GR202144006582) in December 2021, with a valid
term of three years. Therefore, the corporate income tax is calculated at a tax rate of 15% in 2021.
In accordance with relevant provisions of the Announcement of the State Administration of Taxation on Issues
Concerning the Implementation of the Inclusive Income Tax Deduction and Exemption Policies for Small
Low-profit Enterprises (STA Doc. [2019] No. 2), the policy on inclusive income tax deduction and exemption for
small low-profit enterprises is applicable to C&S (Zhongshan) Paper Co., Ltd., Xiaogan C&S Trading Co., Ltd.,
Beijing Bloomage Jierou Biotechnology Co., Ltd., Dolemi Sanitary Products Co., Ltd., Luzhou Dolemi Sanitary
Products Co., Ltd., Mianyang Dolemi Sanitary Products Co., Ltd., Zhengzhou Dolemi Sanitary Products Co., Ltd.,
Dazhou Dolemi Sanitary Products Co., Ltd., Guiyang Dolemi Sanitary Products Co., Ltd., Zhanjiang Dolemi
Sanitary Products Co., Ltd., and Xi’an Dolemi Sanitary Products Co., Ltd. in 2021. To be specific, the annual
taxable income of these enterprises that is not more than RMB1 million shall be included in their taxable income
at the reduced rate of 25%, with the applicable corporate income tax rate of 20%; and the annual taxable income
that is not less than RMB1 million nor more than RMB3 million shall be included in their taxable income at the
reduced rate of 50%, with the applicable enterprise income tax rate of 20%.
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 46,249.83 36,349.55
Bank deposits 795,982,835.01 1,047,785,634.71
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C&S Paper Co., Ltd. 2021 Annual Report
Other monetary funds 79,023,408.28 77,374,215.30
Total 875,052,493.12 1,125,196,199.56
Including: Total deposits in overseas
187,577,086.41 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. Tradable 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 2,327,060.20 724,419.74
Total 2,327,060.20 724,419.74
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
Wherein, the amount of recovered or transferred back bad debt reserve in the reporting period is important:
□ Applicable √ Not applicable
(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 description
1. The Company has no pledged notes receivable as at the end of the year.
2. The Company has no derecognized notes receivable that are endorsed or discounted but not due as at the end
206
C&S Paper Co., Ltd. 2021 Annual Report
of the year.
3. The Company has no notes that are transferred to notes receivable because the drawer does not perform the
contract as at the end of the year.
(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 period Balance at the beginning of the period
Impairment Impairment
Book balance Book balance
Category provision Book provision
Book value
Percenta Provision value Percentag Provision
Amount Amount Amount Amount
ge ratio e ratio
Accounts receivable
for which bad debt 41,279,7 15,136,1 26,143,60 34,567,65 10,681,06 23,886,582.
3.37% 36.67% 3.17% 30.90%
reserve is set aside 11.95 03.86 8.09 1.21 8.59 62
individually
Including:
Accounts receivable
for which bad debt 1,183,69 32,012,0 1,151,687 1,054,953 27,415,94 1,027,537,3
96.63% 2.70% 96.83% 2.60%
reserve is set aside in 9,791.69 00.50 ,791.19 ,298.93 1.96 56.97
portfolios
Including:
Portfolio based on 1,183,69 32,012,0 1,151,687 1,054,953 27,415,94 1,027,537,3
96.63% 2.70% 96.83% 2.60%
aging 9,791.69 00.50 ,791.19 ,298.93 1.96 56.97
1,224,97 47,148,1 1,177,831 1,089,520 38,097,01 1,051,423,9
Total 100.00% 3.85% 100.00% 3.50%
9,503.64 04.36 ,399.28 ,950.14 0.55 39.59
Bad debt reserve set aside individually: 15,136,103.86
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 28,208,040.02 8,218,072.46 29.13% to the poor business
performance of the
customer.
Institution 2 6,955,035.27 4,455,035.27 64.05% It is difficult to recover
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C&S Paper Co., Ltd. 2021 Annual Report
all goods payments due
to the poor business
performance of the
customer.
It is difficult to recover
all goods payments due
Institution 3 6,116,636.66 2,462,996.13 40.27% to the poor business
performance of the
customer.
Total 41,279,711.95 15,136,103.86 -- --
Bad debt reserve set aside individually: None
Bad debt reserve set aside in portfolios: 32,012,000.50
Unit: RMB
Balance at the end of the period
Name
Book balance Impairment provision Ratio of provision
Within the credit period 975,238,842.10 19,504,776.82 2.00%
Credit period - 1 year 202,205,978.40 10,110,298.92 5.00%
1 to 2 years 1,392,680.29 208,902.04 15.00%
2 to 3 years 1,807,523.87 542,257.16 30.00%
3 to 5 years 2,818,002.94 1,409,001.47 50.00%
Over 5 years 236,764.09 236,764.09 100.00%
Total 1,183,699,791.69 32,012,000.50 --
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, 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 Book balance
Within 1 year (inclusive) 1,184,399,855.77
1 to 2 years 1,392,680.29
2 to 3 years 1,807,523.87
Over 3 years 37,379,443.71
3 to 4 years 2,555,202.94
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4 to 5 years 28,470,840.02
Over 5 years 6,353,400.75
Total 1,224,979,503.64
(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
Category beginning of the Recovery or
Provision Write-off Others end of the period
period reversal
Accounts
38,097,010.55 9,051,093.81 47,148,104.36
receivable
Total 38,097,010.55 9,051,093.81 47,148,104.36
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 406,560,913.28 33.19% 8,139,345.16
2nd 122,362,632.61 9.99% 4,359,565.43
3rd 69,572,677.96 5.68% 2,101,950.42
4th 37,571,182.23 3.07% 781,787.42
5th 31,175,720.24 2.54% 967,121.33
Total 667,243,126.32 54.47%
(5) 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
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(6) 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. 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
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 36,685,769.73 100.00% 26,819,108.57 100.00%
Total 36,685,769.73 -- 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 RMB29,191,661.23, accounting
for 79.57% 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 12,353,794.41 15,824,945.56
Total 12,353,794.41 15,824,945.56
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C&S Paper Co., Ltd. 2021 Annual Report
(1) Interest receivable
1) Classification of interest receivable: None
2) Significant overdue interest: None
Other description: 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 4,555,486.30 4,621,457.93
Current accounts 5,834,746.14 5,350,546.55
Reserve 2,167,837.76 1,704,120.13
Others 1,937,176.46 5,999,332.44
Total 14,495,246.66 17,675,457.05
2) Provision of bad debt reserve
Unit: RMB
Phase I Phase II Phase III
Bad debt provision Expected credit loss Expected credit losses in Expected credit losses in Total
in the next 12 months the whole duration (without the whole duration (with
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C&S Paper Co., Ltd. 2021 Annual Report
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
309,391.71 309,391.71
period
Write-off in the reporting
18,450.95 18,450.95
period
Balance as at December
2,141,452.25 2,141,452.25
31, 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 Book balance
Within 1 year (inclusive) 10,295,793.71
1 to 2 years 735,665.88
2 to 3 years 1,213,448.00
Over 3 years 2,250,339.07
3 to 4 years 2,113,667.62
4 to 5 years 82,454.05
Over 5 years 54,217.40
Total 14,495,246.66
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 end of
Category beginning of Recovery or
Provision Write-off Others the period
the period reversal
Other receivables 1,850,511.49 309,391.71 18,450.95 2,141,452.25
Total 1,850,511.49 309,391.71 18,450.95 2,141,452.25
Where the amount of recovered or reversed bad debt reserve in the reporting period is important: None
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4) Other receivables actually written off in the reporting period
Unit: RMB
Item Write-off amount
Other receivables actually written off 18,450.95
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
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 1,817,447.37 Within 1 year 12.54% 90,872.37
2nd Margins and deposits 1,100,000.00 3-4 years 7.59% 550,000.00
Within 1 year, 2-3
3rd Margins and deposits 750,000.00 5.17% 320,000.00
years, 3-4 years
4th Margins and deposits 600,000.00 2-3 years 4.14% 180,000.00
Within 1 year, 1-2
5th Margins and deposits 600,000.00 years, 2- 3 years, 3-4 4.14% 171,750.00
years
Total -- 4,867,447.37 -- 33.58% 1,312,622.37
6) Receivables involving government grants
Unit: RMB
Name of government Balance at the end of the Aging at the end of the Expected collection time,
Name of institution
grant project period period amount and basis
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. Inventories
Whether the Company needs to comply with requirements for disclosure in the real estate industry
No
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C&S Paper Co., Ltd. 2021 Annual Report
(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 886,711,194.32 5,050,118.51 881,661,075.81 1,148,312,808.05 133,039.11 1,148,179,768.94
Work-in-process
50,455,115.89 188,464.55 50,266,651.34 40,777,441.76 306,847.08 40,470,594.68
products
Commodity
458,467,589.59 4,792,993.52 453,674,596.07 410,313,722.29 2,738,280.52 407,575,441.77
stocks
Packages 43,288,272.57 465,044.89 42,823,227.68 32,644,525.84 145,489.07 32,499,036.77
Low-value
24,525,776.59 820,943.23 23,704,833.36 13,889,922.62 529,767.94 13,360,154.68
consumables
Materials for
consigned 15,501,132.69 15,501,132.69 19,189,498.48 19,189,498.48
processing
Total 1,478,949,081.65 11,317,564.70 1,467,631,516.95 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 5,215,689.41 298,610.01 5,050,118.51
Work-in-process
306,847.08 420,587.93 538,970.46 188,464.55
products
Commodity
2,738,280.52 5,205,761.61 3,151,048.61 4,792,993.52
stocks
Packages 145,489.07 621,507.19 301,951.37 465,044.89
Low-value
529,767.94 704,166.06 412,990.77 820,943.23
consumables
Total 3,853,423.72 12,167,712.20 4,703,571.22 11,317,564.70
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C&S Paper Co., Ltd. 2021 Annual Report
(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: None
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
Other description: 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
of the old factory
of Hubei C&S 57,073,059.69 57,073,059.69 66,285,118.00 March 31, 2022
(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.
In 2021, the Company actively communicated with Xiaogan Changxing Investment Co., Ltd. and Xiaonan District
215
C&S Paper Co., Ltd. 2021 Annual Report
People’s Government of Xiaogan City regarding asset delivery matters. However, the delivery was not completed
at the end of 2021. The Company expects to finally complete the asset delivery in 2022.
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 10,000,000.00 50,000,000.00
Input VAT to be deducted 46,011,229.37 51,550,834.13
Large-denomination Certificate of Deposit 62,479,083.36
Prepaid corporate income tax 5,040,567.23 33,735.17
Total 123,530,879.96 101,584,569.30
Other description: None
14. Investments in creditor’s rights: None
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
216
C&S Paper Co., Ltd. 2021 Annual Report
(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
process
I. Original Book Value
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 31,072,632.92 21,661,131.29 52,733,764.21
217
C&S Paper Co., Ltd. 2021 Annual Report
end of 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
1,099,028.28 337,855.92 1,436,884.20
current period
(1) Provision or
1,099,028.28 337,855.92 1,436,884.20
amortization
3. Decrease in the
current period
(1) Disposal
(2) Other transfers
out
4. Balance at the
14,094,505.59 5,500,776.88 19,595,282.47
end of 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
16,978,127.33 16,160,354.41 33,138,481.74
end of the period
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C&S Paper Co., Ltd. 2021 Annual Report
2. Book value at the
18,077,155.61 16,498,210.33 34,575,365.94
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
Other description
The Company does not have investment property that the certificate of title has not been issued as at the end of the
reporting period.
21. Fixed assets
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Fixed assets 3,129,371,506.40 2,792,587,302.21
Total 3,129,371,506.40 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
221,540,475.10 462,760,491.66 6,801,127.34 5,512,453.21 16,296,410.71 712,910,958.02
the current period
(1) Purchase 357,457.51 5,660,378.30 5,512,453.21 5,963,410.63 17,493,699.65
(2)
Inventory\fixed
assets\transfer 221,540,475.10 462,403,034.15 1,140,749.04 10,333,000.08 695,417,258.37
from construction
work in progress
(3) Increase
in business
combination
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C&S Paper Co., Ltd. 2021 Annual Report
3. Decrease in
222,162.15 31,607,659.05 385,452.39 707,005.81 1,141,249.87 34,063,529.27
the current period
(1) Disposal
222,162.15 31,607,659.05 385,452.39 707,005.81 1,141,249.87 34,063,529.27
or scrap
4. Balance at
the end of the 1,341,340,687.24 3,445,905,919.04 61,098,219.68 21,992,518.35 94,447,269.89 4,964,784,614.20
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
47,902,864.38 273,681,898.27 8,599,848.62 1,785,655.14 12,062,059.01 344,032,325.42
the current period
(1) Provision 47,902,864.38 273,681,898.27 8,599,848.62 1,785,655.14 12,062,059.01 344,032,325.42
3. Decrease in
63,072.68 14,150,091.09 345,766.68 145,574.55 874,526.63 15,579,031.63
the current period
(1) Disposal
63,072.68 14,150,091.09 345,766.68 145,574.55 874,526.63 15,579,031.63
or scrap
4. Balance at
the end of the 278,466,822.64 1,429,673,509.95 34,278,045.23 10,099,467.67 52,816,275.80 1,805,334,121.29
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
271,024.32 18,934,167.77 58,221.32 69,358.14 19,332,771.55
the current period
(1) Provision 271,024.32 18,934,167.77 58,221.32 69,358.14 19,332,771.55
3. Decrease in
5,669,755.31 1,219.51 51,865.96 5,722,840.78
the current period
(1) Disposal 5,669,755.31 1,219.51 51,865.96 5,722,840.78
220
C&S Paper Co., Ltd. 2021 Annual Report
or scrap
4. Balance at
the end of the 271,024.32 29,680,382.73 58,221.32 69,358.14 30,078,986.51
period
IV. Book Value
1. Book value
at the end of the 1,062,602,840.28 1,986,552,026.36 26,761,953.13 11,893,050.68 41,561,635.95 3,129,371,506.40
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
(2) Information on temporarily idle fixed assets
Unit: RMB
Accumulated Impairment
Item Original book value Book value Remarks
depreciation provision
Equipment 65,694,545.99 33,818,928.73 29,951,407.05 1,924,210.21
Office equipment 418,027.75 358,726.43 58,221.32 1,080.00
Production
147,951.48 68,293.34 69,358.14 10,300.00
equipment
Total 66,260,525.22 34,245,948.50 30,078,986.51 1,935,590.21
(3) Fixed assets leased through operating lease: None
(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, warehouses, and dormitories
157,047,508.26 Processing
of Hubei C&S
Plants and warehouses of Tangshan Branch 45,719,124.58 Processing
Workshops of Zhejiang C&S 3,618,339.02 Processing
Total 206,384,971.86
Other description: None
221
C&S Paper Co., Ltd. 2021 Annual Report
(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 134,875,696.94 275,904,617.95
Total 134,875,696.94 275,904,617.95
(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 10,160,431.64 10,160,431.64
Paper
Construction
work of Jiangmen 3,894,339.75 3,894,339.75 1,028,646.43 1,028,646.43
C&S
Construction
work of Zhejiang 1,136,260.16 1,136,260.16 249,608.17 249,608.17
C&S
Construction
work of Sichuan 4,628,355.84 4,628,355.84 5,760,144.05 5,760,144.05
C&S
Construction
work of Tangshan 104,140,687.38 104,140,687.38
Branch
Construction
work of Hubei 4,347,806.26 4,347,806.26 244,523,934.15 244,523,934.15
C&S
Construction
work of Yunfu 6,037,233.84 6,037,233.84 24,342,285.15 24,342,285.15
C&S
Construction
work of Jiangsu 530,582.07 530,582.07
C&S
Total 134,875,696.94 134,875,696.94 275,904,617.95 275,904,617.95
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C&S Paper Co., Ltd. 2021 Annual Report
(2) Changes of significant construction work in progress in the current period
Unit: RMB
Includin
Amount Proporti Accumul g:
Interest
Balance of fixed Balance on of the ative Amount
Increase Decrease capitaliz
at the assets at the cumulati Construc amount of
Budget in the in the ation rate Source
Project beginnin transferr end of ve tion of interest
number current current in the of fund
g of the ed in the the construct progress interest capitaliz
period period current
period current period ion input capitaliz ation in
period
period in budget ation the
period
Construc
tion
15,715,0 10,160,4 10,160,4
work of 64.65% 64.65% Others
00.00 31.64 31.64
C&S
Paper
Construc
tion
34,436,5 1,028,64 32,901,6 30,035,9 3,894,33
work of 98.53% 98.53% Others
14.00 6.43 03.40 10.08 9.75
Jiangme
n C&S
Construc
tion
12,621,3 249,608. 12,224,0 11,337,3 1,136,26
work of 98.83% 98.83% Others
62.34 17 40.35 88.36 0.16
Zhejiang
C&S
Construc
tion
20,392,2 5,760,14 14,030,3 15,162,1 4,628,35
work of 97.05% 97.05% Others
01.82 4.05 71.51 59.72 5.84
Sichuan
C&S
Construc
tion
314,192, 110,280, 6,139,94 104,140,
work of 54.11% 54.11% Others
854.86 631.73 4.35 687.38
Tangsha
n Branch
Construc
tion
683,700, 244,523, 348,998, 589,174, 4,347,80
work of 95.96% 95.96% Others
000.00 934.15 663.44 791.33 6.26
Hubei
C&S
223
C&S Paper Co., Ltd. 2021 Annual Report
Construc
tion
58,280,0 24,342,2 25,262,0 43,567,0 6,037,23
work of 85.60% 85.60% Others
00.00 85.15 13.22 64.53 3.84
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
1,834,93 275,904, 554,388, 695,417, 134,875,
Total -- -- --
7,933.02 617.95 337.36 258.37 696.94
(3) Construction-in-progress provision set aside in the current period
Other description
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
(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 Properties and buildings Total
I. Original Book Value
1. Balance at the beginning of the period 12,852,715.53 12,852,715.53
2. Increase in the current period 10,276,053.63 10,276,053.63
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C&S Paper Co., Ltd. 2021 Annual Report
3. Decrease in the current period
4. Balance at the end of the period 23,128,769.16 23,128,769.16
II. Accumulated Depreciation
1. Balance at the beginning of the period
2. Increase in the current period 8,828,248.39 8,828,248.39
(1) Provision 8,828,248.39 8,828,248.39
3. Decrease in the current period
(1) Disposal
4. Balance at the end of the period 8,828,248.39 8,828,248.39
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
4. Balance at the end of the period
IV. Book Value
1. Book value at the end of the period 14,300,520.77 14,300,520.77
2. Book value at the beginning of the
12,852,715.53 12,852,715.53
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
225
C&S Paper Co., Ltd. 2021 Annual Report
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
in the current 390,566.04 5,654,345.39 6,044,911.43
period
(1)
390,566.04 5,654,345.39 6,044,911.43
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 1,733,287.88 24,473,780.06 168,370.83 215,439,760.92
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 3,797,303.52 115,751.12 3,033,700.92 6,946,755.56
period
(1)
3,797,303.52 115,751.12 3,033,700.92 6,946,755.56
Provision
3. Decrease
in the current
period
(1)
226
C&S Paper Co., Ltd. 2021 Annual Report
Disposal
4. Balance at
the end of the 33,248,263.66 1,000,988.17 12,568,210.15 168,370.83 46,985,832.81
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
4. Balance at
the end of the
period
IV. Book Value
1. Book
value at the end 155,816,058.49 732,299.71 11,905,569.91 168,453,928.11
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.
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C&S Paper Co., Ltd. 2021 Annual Report
(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
Unit: RMB
Name of investee Balance at the Increase in the current period Decrease in the current period
Balance at the
or the matters beginning of the
Provision Disposal end of the period
forming goodwill period
Total
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 rate, discount rate, and predictive
period), and the goodwill impairment loss:
Note: After conducting the asset impairment test by combining the goodwill with corresponding asset groups,
there was no impairment as at December 31, 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
228
C&S Paper Co., Ltd. 2021 Annual Report
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 1,385,159.40 923,439.53
discharge
Decoration fees of
22,365,634.21 996,330.31 9,777,549.96 13,584,414.56
office buildings
Electricity use rights 1,961,750.00 855,750.00 562,450.00 2,255,050.00
Total 26,635,983.14 1,852,080.31 11,725,159.36 16,762,904.09
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
48,619,359.11 10,491,437.82 37,236,661.77 8,048,641.53
impairment
Unrealized profit in
48,456,053.79 10,181,650.08 59,038,241.84 11,427,908.55
internal transaction
Deductible loss 396,983,644.42 99,145,338.70 157,221,067.56 39,305,266.89
Provision for impairment
11,317,564.70 1,862,027.54 3,853,423.72 702,165.91
of inventories
Provision for impairment
30,078,986.51 5,111,314.51 16,469,055.74 2,795,038.08
of fixed assets
Equity incentive cost 57,965,133.83 14,145,915.91 136,647,479.87 33,312,991.30
Accrued expenses 96,707,743.24 24,176,935.81 60,267,582.48 15,066,895.62
Deferred income 90,270,562.19 17,071,324.48 2,833,819.12 708,454.78
Total 780,399,047.79 182,185,944.85 473,567,332.10 111,367,362.66
(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
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C&S Paper Co., Ltd. 2021 Annual Report
Pre-tax deduction of
fixed assets at one time
240,560,367.15 46,514,550.50 190,069,258.27 35,903,653.30
as stipulated in the tax
law
Total 240,560,367.15 46,514,550.50 190,069,258.27 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
182,185,944.85 111,367,362.66
assets
Deferred income tax
46,514,550.50 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 2,710,860.27
Total 2,710,860.27
(5) Deductible losses of the unconfirmed deferred income tax assets due in the next year: None
Other description: 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
56,147,845.0 56,147,845.0
Prepayment for property purchase
0 0
34,786,139.7 34,786,139.7 26,000,909.9 26,000,909.9
Prepayment for engineering equipment
9 9 1 1
230
C&S Paper Co., Ltd. 2021 Annual Report
Prepayment for software 708,378.66 708,378.66 2,027,042.24 2,027,042.24
91,642,363.4 91,642,363.4 28,027,952.1 28,027,952.1
Total
5 5 5 5
Other description: None
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 0.00 142,942,941.34
Total 142,942,941.34
Description of classification of short-term borrowings: None
(2) Short-term borrowings overdue but unpaid: None
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 334,969,632.58 234,887,563.22
Total 334,969,632.58 234,887,563.22
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 829,113,780.31 761,519,389.26
Total 829,113,780.31 761,519,389.26
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C&S Paper Co., Ltd. 2021 Annual Report
(2) Significant accounts payable with aging over one year
The Company has no significant accounts payable with aging over one year at the end of the reporting period.
37. Payments received in advance
(1) List of payments received in advance: None
(2) Significant payments received in advance with aging over one year: None
38. Contract liabilities
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Advances on sales 164,360,443.34 137,333,617.40
Total 164,360,443.34 137,333,617.40
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
123,506,119.43 803,282,369.61 787,575,751.49 139,212,737.55
Compensation
II. Post-employment
Benefits - Defined 18,507.68 55,186,747.36 54,866,586.13 338,668.91
Contribution Plan
III. Dismissal Benefits 419,395.38 419,395.38
Total 123,524,627.11 858,888,512.35 842,861,733.00 139,551,406.46
(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
122,595,782.24 725,396,870.89 709,736,379.31 138,256,273.82
subsidy
2. Employee welfare 27,611,513.61 27,611,513.61
3. Social insurance 252,766.51 27,731,765.83 27,728,427.43 256,104.91
232
C&S Paper Co., Ltd. 2021 Annual Report
premiums
Including: Medical
250,105.53 23,770,884.37 23,786,710.42 234,279.48
insurance
Employment
167.06 2,401,347.23 2,381,298.38 20,215.91
injury insurance
Maternity
2,493.92 1,559,534.23 1,560,418.63 1,609.52
insurance
4. Housing provident
374,311.00 19,114,920.87 19,059,822.14 429,409.73
fund
5. Labor union fee and
283,259.68 3,427,298.41 3,439,609.00 270,949.09
staff education fee
Total 123,506,119.43 803,282,369.61 787,575,751.49 139,212,737.55
(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 53,333,775.03 53,024,526.19 327,176.38
insurance
2. Unemployment
580.14 1,852,972.33 1,842,059.94 11,492.53
insurance
Total 18,507.68 55,186,747.36 54,866,586.13 338,668.91
Other description:
There was no delinquency of employee remuneration payable by 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 47,434,141.38 25,574,167.63
Corporate income tax 47,999,180.89 79,266,423.94
Individual income tax 2,282,034.20 1,840,329.83
City construction and maintenance tax 3,157,814.56 1,593,768.94
Property tax 1,479,897.22 1,087,129.90
Education surcharges 1,525,822.40 829,794.94
Local education surcharges 1,017,214.96 524,068.91
Land use tax 845,611.47 796,430.89
233
C&S Paper Co., Ltd. 2021 Annual Report
Stamp tax 794,985.81 596,629.80
Security fund for the disabled 380,114.13 334,989.76
Environmental protection tax 183,923.63 97,465.13
Resource tax 84,070.32 66,855.20
Total 107,184,810.97 112,608,054.87
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 1,352,746.20 1,437,466.77
Other payables 853,519,432.58 753,407,113.32
Total 854,872,178.78 754,844,580.09
(1) Interest payable: None
(2) Dividends payable: None
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Dividends for restricted shares 1,352,746.20 1,437,466.77
Total 1,352,746.20 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
Unpaid fees 791,690,297.01 658,391,225.24
Repurchase obligation of restricted shares 33,312,589.40 68,800,189.53
Margins and deposits 17,980,073.86 20,964,424.40
Authorized collection and payment of
individual income tax under the equity 8,360,156.40 2,877,482.40
incentive
Others 2,176,315.91 2,373,791.75
234
C&S Paper Co., Ltd. 2021 Annual Report
Total 853,519,432.58 753,407,113.32
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
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 8,616,487.38 4,762,895.86
Total 8,616,487.38 4,762,895.86
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 21,250,613.29 17,628,086.63
Total 21,250,613.29 17,628,086.63
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C&S Paper Co., Ltd. 2021 Annual Report
45. Long-term borrowings: None
(1) List of long-term borrowings: 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
47. Lease liabilities
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Properties and buildings 14,182,415.52 12,852,715.53
Lease liabilities due within one year -8,616,487.38 -4,762,895.86
Total 5,565,928.14 8,089,819.67
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: 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 Reason
beginning of the current period current period the period
236
C&S Paper Co., Ltd. 2021 Annual Report
period
Related to asset
Government grants 115,101,158.13 4,000,000.00 14,617,728.59 104,483,429.54
Government grants
Total 115,101,158.13 4,000,000.00 14,617,728.59 104,483,429.54 --
Projects involving government grants:
Unit: RMB
Amount Amount
Increased Amount of
included in included in
Balance at the amount of offset costs Balance at the
Liability non-operatin other income Other Related to
beginning of the grants in the in the end of the
item g income in in the changes asset/income
period current current period
the current current
period period
period period
Subsidies for
the
infrastructur
e Related to
30,535,934.00 1,071,436.32 29,464,497.68
construction asset
of new
factory in
Hubei
Support
funds for the
construction
of Related to
21,188,970.58 1,561,764.72 19,627,205.86
Automated asset
Storage &
Retrieval
System
Support
funds for the
Related to
transformati 16,172,657.65 2,251,422.48 13,921,235.17
asset
on of Phase I
project
Support
funds for
Related to
equipment of 9,467,571.00 1,955,301.73 7,512,269.27
asset
Phase II
project
Financial
Related to
support 7,453,253.75 625,447.80 6,827,805.95
asset
funds for
237
C&S Paper Co., Ltd. 2021 Annual Report
construction
expansion of
25,000-ton
high-grade
household
paper project
Subsidy
funds for the Related to
2,833,819.12 4,000,000.00 1,794,486.82 5,039,332.30
smart factory asset
project
Ex-post
funds
awarded to
the first
batch of the Related to
4,081,579.34 634,586.64 3,446,992.70
union asset
enterprises
for technical
transformati
on in 2017
Support
funds for the
technical
transformati Related to
3,640,736.00 800,790.96 2,839,945.04
on of asset
equipment
production
line
Support
funds for the
construction
Related to
of 3,032,539.79 319,047.60 2,713,492.19
asset
environment
al protection
facilities
Support
funds for
Related to
enterprise 3,219,688.10 792,374.28 2,427,313.82
asset
technical
upgrading
Discount Related to
2,439,593.75 193,875.00 2,245,718.75
interest asset
238
C&S Paper Co., Ltd. 2021 Annual Report
funds for
imported
equipment
Subsidies for
sewage Related to
2,664,772.67 477,272.76 2,187,499.91
treatment asset
station
Subsidies for
the
expansion of
the
high-grade
Related to
household 1,906,666.83 159,999.96 1,746,666.87
asset
paper project
with an
annual
output of
25,000 tons
Special
funds for
capacity
expansion of Related to
1,820,833.22 575,000.04 1,245,833.18
25,000-ton asset
high-grade
household
paper project
Subsidies for
construction
Related to
of the water 1,369,861.36 155,078.64 1,214,782.72
asset
treatment
project
Support
funds for
sewage
Related to
centralized 972,000.00 121,500.00 850,500.00
asset
water
treatment
project
Provincial
funds for Related to
910,714.30 107,142.84 803,571.46
traditional asset
industry
239
C&S Paper Co., Ltd. 2021 Annual Report
transformati
on projects
Funds for
reconstructio
n project of Related to
1,389,966.67 1,021,200.00 368,766.67
automatic asset
production
lines
14,617,728.5
Total 115,101,158.13 4,000,000.00 104,483,429.54
9
Other description: None
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 Bonus transferred
Others Subtotal end of the period
period new shares shares from surplus
reserve
Total number
1,311,487,077.00 3,131,211.00 -2,160,733.00 970,478.00 1,312,457,555.00
of shares
Other description:
Changes in the Company’s share capital during the year:
According to 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 approved
at the 23rd meeting of the fourth session of the Board of Directors, the number of stock options that had met
exercise conditions was 3,431,505 and the number of incentive recipients in conformity with the exercise
conditions reached 2,522. The exercise period was from June 10, 2020 to February 26, 2021. According to 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 approved at the 28th meeting of the fourth
session of the Board of Directors, the number of stock options that have met exercise conditions was 640,389 and
the number of incentive recipients in conformity with the exercise conditions reached 88. The exercise period was
from November 17, 2020 to September 10, 2021. As of February 26, 2021, all the incentive recipients who had
met the above exercise conditions have exercise their rights, and a total of 4,071,894 shares have been subscribed,
of which 461,478 shares were subscribed in 2021.
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. Pursuant
to the proposal, as some incentive recipients were disqualified to hold incentive stocks after leaving the Company
240
C&S Paper Co., Ltd. 2021 Annual Report
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 2,021,305 restricted shares of 96
incentive recipients.
The 12th meeting of the fifth session of the Board of Directors and the sixth extraordinary general meeting of
2021 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 139,428 restricted shares of 17 incentive
recipients.
According to 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 approved
at the 6th meeting of the fifth session of the Board of Directors, the number of stock options that had met exercise
conditions was 2,948,559 and the number of incentive recipients in conformity with the exercise conditions
reached 2,274. The exercise period was from June 30, 2021 to February 28, 2022. According to the Proposal on
Achieving the Exercise Conditions of the Second Exercise Period for Reserved Stock Options under the Company’s
2018 Stock Option and Restricted Stock Incentive Plan approved at the 12th meeting of the fifth session of the
Board of Directors, the number of stock options that have met exercise conditions was 609,375 and the number of
incentive recipients in conformity with the exercise conditions reached 70. The exercise period is from December
14, 2021 to September 9, 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 2,669,733 shares have been subscribed.
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: 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 31,164,564.50 7,570,302.21 650,391,444.26
premium)
Other capital reserve 280,209,323.08 16,491,219.65 6,349,300.80 290,351,241.93
Total 907,006,505.05 47,655,784.15 13,919,603.01 940,742,686.19
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
241
C&S Paper Co., Ltd. 2021 Annual Report
and deregistration of incentive stocks decreased “capital reserve-other capital reserve” by RMB6,730,945.65.
(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 84,720.57 35,572,320.70 33,312,589.40
Ordinary shares 27,680,721.76 661,249,972.23 688,930,693.99
Total 96,480,911.29 661,334,692.80 35,572,320.70 722,243,283.39
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 and
714,832 shares of reserved stock options at RMB7.02/share granted under the 2018 Stock Option and Restricted
Stock Incentive Plan. Totally RMB25,841,285.49 was included in the decrease of the current period; the
withdrawable cash dividend of RMB84,720.57 was included in the increase of the current period.
(2) 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. As some
incentive recipients for reserved stocks left the Company or failed to pass the appraisal, the Company repurchased
and deregistered 139,428 shares with RMB7.02 per share. Totally 2,160,733 shares were repurchased with an
amount of RMB9,731,035.21, which was included in the decrease of the current period.
(3) The repurchased shares with a total value of RMB661,249,972.23 was included in the increase of the current
period.
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 45,515,017.15 106,984,275.42
Total 61,469,258.27 45,515,017.15 106,984,275.42
Explanation of surplus reserves, including increase/decrease in the reporting period and reasons of change:
In accordance with provisions of the Company Law and the Articles of Association, the Company appropriates
10% of the net profit as statutory surplus reserve. The appropriation will stop if the accumulated amount of
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C&S Paper Co., Ltd. 2021 Annual Report
statutory surplus reserve reaches more than 50% of the Company’s registered capital.
After the appropriation of the statutory surplus reserve, discretionary surplus reserve may be withdrawn. Upon
approval, the discretionary surplus reserve may be used to make up for losses in previous years or to increase the
share capital.
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
581,097,222.93 905,889,081.41
parent company of the current period
Less: Appropriated statutory surplus reserve 45,515,017.15 8,263,675.41
Dividends on ordinary shares payable 128,634,924.81 97,930,094.41
Retained earnings at the end of the period 3,265,611,428.36 2,858,664,147.39
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.
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 8,735,274,140.52 5,501,122,254.42 7,599,908,947.02 4,379,376,627.64
Other businesses 414,596,324.28 361,926,849.96 223,619,469.30 211,527,412.71
Total 9,149,870,464.80 5,863,049,104.38 7,823,528,416.32 4,590,904,040.35
Whether lower of the audited net profits before and after deducting the non-recurring profit and loss is negative
□ Yes √ No
Information related to income:
243
C&S Paper Co., Ltd. 2021 Annual Report
Unit: RMB
Contract classification Branch 1 Branch 2 Total
By product type 9,149,870,464.80 9,149,870,464.80
Including:
Household paper 8,658,308,172.33 8,658,308,172.33
Personal care 76,965,968.19 76,965,968.19
Others 414,596,324.28 414,596,324.28
By operating region 9,149,870,464.80 9,149,870,464.80
Including:
Domestic 8,950,419,612.11 8,950,419,612.11
Abroad 199,450,852.69 199,450,852.69
By market or customer
type
Including:
Contract type
Including:
By the time of goods
transfer
Including:
By contract term
Including:
By sales channel 9,149,870,464.80 9,149,870,464.80
Including:
Traditional 4,391,370,600.48 4,391,370,600.48
Non-traditional 4,343,903,540.04 4,343,903,540.04
Others 414,596,324.28 414,596,324.28
Total 9,149,870,464.80 9,149,870,464.80
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 RMB54,001,894.59, of which the income of RMB54,001,894.59 is expected to
be confirmed as income in the year of 2022.
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C&S Paper Co., Ltd. 2021 Annual Report
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 23,259,197.19 20,149,751.80
Education surcharges 11,299,182.73 9,597,106.24
Resource tax 108,953.60 107,367.57
Property tax 11,076,937.04 9,604,943.14
Land use tax 3,209,808.34 3,492,720.58
Vehicle and vessel tax 11,340.00 18,240.00
Stamp tax 8,115,643.88 6,425,868.35
Local education surcharges 7,766,237.20 6,368,693.14
Environmental protection tax 698,352.43 348,227.27
Total 65,545,652.41 56,112,918.09
Other description: None
63. Selling expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Employee remuneration 392,220,286.40 289,793,524.85
Product promotion fees 1,178,898,284.39 891,673,851.97
Transportation expenses 101,585,932.85 90,696,221.79
Advertising expenses 164,748,600.16 117,926,339.81
Shopping mall management fees 91,587,702.20 101,261,590.30
Traveling expenses 28,835,492.13 24,141,592.40
Rental fees 14,115,005.94 17,791,905.46
Depreciation of use right assets 2,970,607.66
Business entertainment expenses 3,862,187.81 2,004,195.01
Others 7,720,414.48 9,273,023.12
Total 1,986,544,514.02 1,544,562,244.71
Other description: None
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C&S Paper Co., Ltd. 2021 Annual Report
64. Administrative expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Employee remuneration 139,371,643.54 123,787,011.29
Equity incentive cost 12,688,659.70 95,705,148.72
Depreciation and amortization fees 72,707,033.97 64,793,200.48
Office allowance 32,926,203.90 28,815,372.03
Consulting service fees 18,499,710.79 11,152,882.86
Outsourcing warehouse management fees 25,599,685.04 13,476,942.90
Business entertainment expenses 6,017,041.93 4,250,313.01
Traveling expenses 2,922,435.63 2,007,217.94
Environmental protection fees 3,080,326.43 2,920,486.57
Rental fees 4,916,595.12 4,972,311.62
Depreciation of use right assets 5,562,026.99
Others 16,852,841.26 13,033,456.88
Total 341,144,204.30 364,914,344.30
Other description: None
65. R&D expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Employee remuneration 38,282,563.30 35,421,883.98
Direct investment 141,887,483.28 123,888,034.21
Depreciation and amortization fees 26,981,304.24 26,261,981.44
Others 4,812,861.36 4,726,733.98
Total 211,964,212.18 190,298,633.61
Other description: None
66. Finance expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Interest fees 1,872,913.37 2,903,635.12
Less: Interest income 10,512,490.53 8,202,097.37
Exchange profit and loss -3,248,733.35 -18,603,312.21
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C&S Paper Co., Ltd. 2021 Annual Report
Transaction fee 4,627,217.45 5,954,447.70
Others -81.13 -54,219.48
Total -7,261,174.19 -18,001,546.24
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 1,715,525.67 702,121.74
Support funds for the transformation of
2,251,422.48 599,715.61
Phase I project
Support funds for equipment of Phase II
1,955,301.73 1,971,248.16
project
Subsidy funds for the smart factory project 1,794,486.82 166,180.88
Enterprise operation contribution award 1,708,500.00
Support funds for the construction of
1,561,764.72 973,529.42
Automated Storage & Retrieval System
Subsidies for Hubei C&S’s new factory
1,071,436.32 1,071,436.32
infrastructure construction
Funds for reconstruction project of
1,021,200.00 652,433.33
automatic production lines
Subsidies for R&D, famous-brand and
high-quality products, and 1,020,000.00
income/efficiency increase
VAT exemption for employment of retired
934,150.00 961,750.00
soldiers and poor population
Subsidies for internship, employment, job
920,646.29 6,168,474.94
stabilization and training
Support funds for the technical
800,790.96 806,623.44
transformation of equipment
Special funds for business development 800,000.00
Support funds for enterprise technical
792,374.28 660,311.90
upgrading
Subsidies for renovation 700,000.00
Ex-post funds awarded to the first batch of
the union enterprises for the technical 634,586.64 634,586.64
transformation in 2017
247
C&S Paper Co., Ltd. 2021 Annual Report
2013-2017 financial support funds of the
Management Committee of Pengzhou
625,447.80 625,447.80
Industrial Development Zone, Sichuan
Province
25,000 tons capacity expansion project of
575,000.04 575,000.04
Tangshan Subsidiary
Financial support for the sewage treatment
477,272.76 477,272.76
station project of Tangshan Subsidiary
Support funds for the construction of
319,047.60 319,047.60
environmental protection facilities
Subsidies for employees’ training while
297,000.00
working
Technical demonstration subsidies for
280,000.00
water intake points
Social security subsidies from the labor
234,000.00 53,532.00
and employment administration
Special award funds for the restructuring
210,900.00 410,000.00
of industrial enterprises
Subsidies for foreign trade stabilization 200,000.00
Import interest discounts on imported
193,875.00 193,875.00
equipment in 2014
Special subsidy for the construction
expansion of the 25,000-ton household 159,999.96 159,999.96
paper project
Subsidies for construction of the water
155,078.64 155,078.64
treatment project
Financial support for sewage centralized
121,500.00 121,500.00
water treatment project
Provincial funds for traditional industry
107,142.84 89,285.70
transformation projects
Tax contribution reward 100,000.00
Subsidies for job creation for the poor 97,995.00
Rewards for creation of odor-free
62,752.29
enterprise
Enterprise support funds 50,000.00
Financial rewards for cleaner production
50,000.00
transformation
Subsidies for social insurance premiums 31,604.66
248
C&S Paper Co., Ltd. 2021 Annual Report
Government’s quality award 2020 30,000.00
Subsidies for encouraging scaled
20,000.00
development of enterprises
Rewards to “two outstanding and one
advanced” recipients (outstanding party
affair worker, outstanding party member, 10,000.00
and advanced grass-root party
organization)
Subsidies for renovating old projects with
3,000.00
new technologies and techniques
Subsidies for supporting enterprises to
700.00 257,200.00
expand import and export scale
Financial support funds allocated by the
7,892,985.55
bureau of finance
Support policy rewards of the bureau of
economy, science and information 1,310,000.00
technology
Subsidies for production resumption under
320,000.00
COVID-19
Award for breakthroughs with increases in
300,000.00
businesses
Subsidies for photovoltaic power rooftop 224,640.00
Wage subsidiaries of Hong Kong 126,835.56
Employment subsidies from the pandemic
73,156.71
prevention and control fund
Enterprise assistance funding plan of the
66,525.00
ten billion anti-pandemic fund
Support fund for advanced energy
conservation and cleaner production in 30,000.00
2020
Subsidies for pandemic prevention and
24,750.00
control
Energy efficiency special fund 2019 20,000.00
Management system certification rewards
10,000.00
2018
Subsidies for pandemic prevention system
building of enterprises by the bureau of
9,000.00
economy, science, and information
technology
249
C&S Paper Co., Ltd. 2021 Annual Report
One-off subsidy for delayed resumption of
7,440.00
work
Subsidies for industrial patents 3,300.00
Total 24,094,502.50 29,224,284.70
68. Return on investment
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Others 365,973.72 3,868,134.28
Total 365,973.72 3,868,134.28
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 -309,391.71 -727,073.31
Bad debt loss from accounts receivable -9,051,093.81 -5,735,079.40
Total -9,360,485.52 -6,462,152.71
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
-3,442,595.01 -1,623,983.68
Contract Performance Cost
V. Impairment Loss of Fixed Assets -24,348,744.97 -14,239,740.49
Total -27,791,339.98 -15,863,724.17
Other description: None
250
C&S Paper Co., Ltd. 2021 Annual Report
73. Return on disposal of assets
Unit: RMB
Source Incurred in the current period Incurred in the prior period
Disposal of fixed assets -462,228.42 -1,630,681.60
Total -462,228.42 -1,630,681.60
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
Profit from damage and
98,166.07 147,882.19 98,166.07
retirement of non-current assets
Including: Fixed assets 98,166.07 147,882.19 98,166.07
Intangible assets
Government grants not related
270.00 11,000.00 270.00
to the company’s daily activities
Income from fine and
1,954,623.83 3,993,312.79 1,954,623.83
compensation
Amounts with no payments
614,936.63
required
Others 1,757,300.44 662,538.39 1,757,300.44
Total 3,810,360.34 5,429,670.00 3,810,360.34
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
Wage survey Grants
subsidies of Human received for
the Human Resources the
Resources and Social performance
Related to
and Social Security Grant of the State’s No No 270.00
income
Security Bureau of function of
Bureau of Zhongshan ensuring the
Zhongshan City supply or
City price control
251
C&S Paper Co., Ltd. 2021 Annual Report
of a public
utility or
socially
necessary
product
Party
building
funds for new Grants
economic received for
organizations the
Mobile Party
and new performance
Member
social of the State’s
Management
organizations function of
Service
from the ensuring the Related to
Center of Grant No No 10,000.00
Mobile Party supply or income
Dongsheng
Member price control
Town,
Management of a public
Zhongshan
Service utility or
City
Center of socially
Dongsheng necessary
Town, product
Zhongshan
City
Grants
received for
Subsidies for the
west district performance
Human
from the of the State’s
Resources
Human function of
and Social
Resources ensuring the Related to
Security Grant No No 1,000.00
and Social supply or income
Bureau of
Security price control
Zhongshan
Bureau of of a public
City
Zhongshan utility or
City socially
necessary
product
Total 270.00 11,000.00
Other description: None
75. Non-operating expenses
Unit: RMB
252
C&S Paper Co., Ltd. 2021 Annual Report
Amount recognized as profit or
Item Incurred in the current period Incurred in the prior period
loss of the current period
External donations 8,284,411.07 15,470,536.45 8,284,411.07
Loss from damage and
1,690,488.06 1,497,805.16 1,690,488.06
retirement of non-current assets
Including: Fixed assets 1,690,488.06 1,497,805.16 1,690,488.06
Intangible assets
Others 2,084,181.36 3,944,517.51 2,084,181.36
Total 12,059,080.49 20,912,859.12 12,059,080.49
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 143,551,604.93 181,314,018.95
Deferred income tax expense -57,115,005.15 1,187,352.52
Total 86,436,599.78 182,501,371.47
(2) Adjustment process of accounting profits and income tax expenses
Unit: RMB
Item Incurred in the current period
Total profit 667,481,653.85
Income tax expenses calculated at the statutory/applicable tax
166,870,413.46
rate
Impacts of different tax rates applied to subsidiaries -66,272,007.79
Impacts of adjustments to income taxes during the prior period -18,685,392.50
Impacts of non-deductible costs, expenses and losses 4,523,586.61
Income tax expenses 86,436,599.78
Other description: None
77. Other comprehensive income
Please refer to the notes for details.
253
C&S Paper Co., Ltd. 2021 Annual Report
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 20,953,685.44 49,688,516.72
Government grants 10,830,599.76 60,126,856.61
Interest income 10,512,454.74 8,196,797.10
Authorized collection of individual income
17,793,045.78 22,976,763.21
tax under the equity incentive
Others 10,242,024.23 11,716,603.06
Total 70,331,809.95 152,705,536.70
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 773,465,376.40 550,689,649.13
Current accounts 120,888,965.74 178,777,668.81
Authorized payment of individual income
14,133,649.74 26,757,243.77
tax under the equity incentive
Donation expenditure 2,070,143.19 14,145,244.02
Others 9,929,582.35 4,113,886.93
Total 920,487,717.42 774,483,692.66
Explanation of cash paid related to other operating activities: None
(3) Cash received related to other investing activities
Unit: RMB
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
254
C&S Paper Co., Ltd. 2021 Annual Report
(4) Cash payments related to other investing activities
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Purchasing large-denomination Certificate
62,479,083.36
of Deposit
Purchasing wealth management products 10,000,000.00 50,000,000.00
Total 72,479,083.36 50,000,000.00
Explanation of cash paid related to other investment activities: None
(5) Cash received related to other financing activities
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Explanation of 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
Share repurchase 661,249,972.23 27,680,721.76
Deposits of security deposits for bills,
2,127,733.68 47,412,150.07
letters of guarantee and letters of credit
Repurchase and deregistration of equity
9,731,035.21 4,963,254.06
incentives
Cash paid for lease liabilities 9,320,775.83
Total 682,429,516.95 80,056,125.89
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 581,045,054.07 905,889,081.41
Plus: Provisions for asset impairment 37,151,825.50 22,325,876.88
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C&S Paper Co., Ltd. 2021 Annual Report
Depreciation of fixed assets, oil
and gas assets and productive biological 345,469,209.62 298,227,998.50
assets
Depreciation of use right assets 8,828,248.39
Intangible asset amortization 6,946,755.56 5,761,733.76
Long-term unamortized expenses 11,725,159.36 7,629,304.48
Losses from disposal of fixed
assets, intangible assets and other long-term 462,228.42 1,630,681.60
assets ("-" indicates income)
Losses from fixed assets write-off
1,592,321.99 1,349,922.97
("-" indicates income)
Losses from changes in fair value
("-" indicates income)
Finance expenses ("-" indicates
7,347,594.03 6,083,169.25
income)
Investment losses ("-" indicates
-365,973.72 -3,868,134.28
income)
Decrease in deferred income tax
-67,725,902.35 -4,700,193.35
assets ("-" indicates increase)
Increase in deferred income tax
10,610,897.20 5,887,545.87
liabilities ("-" indicates decrease)
Decrease in inventories ("-"
197,085,573.38 -673,208,087.17
indicates increase)
Decrease in operating receivables
-143,214,872.03 -283,241,489.30
("-" indicates increase)
Increase in operating payables ("-"
309,932,827.71 442,728,302.91
indicates decrease)
Others 12,688,659.70 95,705,148.72
Net cash flow from operating
1,319,579,606.83 828,200,862.25
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: -- --
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C&S Paper Co., Ltd. 2021 Annual Report
Balance of cash at the end of the period 797,797,675.70 1,050,034,135.72
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
-252,236,460.02 374,037,282.75
equivalents
(2) Net cash paid to acquire subsidiaries during the period: None
(3) Net cash received from the disposal of subsidiaries during the period
(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 797,797,675.70 1,050,034,135.72
Including: Cash on hand 46,249.83 36,349.55
Bank deposits always available for
795,982,835.01 1,047,785,634.71
payment
Other monetary funds always
1,768,590.86 2,212,151.46
available for payment
III. Balance of Cash and Cash Equivalents at
797,797,675.70 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 77,254,817.42
and notes
Total 77,254,817.42 --
257
C&S Paper Co., Ltd. 2021 Annual Report
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 -- -- 306,306,577.75
Including: USD 46,310,258.59 6.3738 295,172,326.20
EUR
HKD 13,621,545.82 0.8174 11,134,251.55
Accounts receivable -- -- 33,078,108.23
Including: USD 573,418.81 6.3738 3,654,856.81
EUR
HKD 35,996,148.05 0.8174 29,423,251.42
Long-term borrowings -- --
Including: USD
EUR
HKD
Other receivables 157,176.13
Including: HKD 192,287.90 0.8174 157,176.13
Accounts payable 251,681,464.58
Including: USD 39,038,873.95 6.3738 248,825,974.78
EUR 22,000.00 7.2409 159,299.80
JPY 48,580,000.00 0.0555 2,696,190.00
Other payables 2,302,742.08
Including: HKD 2,813,788.08 0.8174 2,299,990.38
USD 431.72 6.3738 2,751.70
Other description: None
258
C&S Paper Co., Ltd. 2021 Annual Report
(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, other income 872,441.50
Related to income 7,761,248.24 Other income 7,761,248.24
Related to income 270.00 Non-operating income 270.00
Total 11,761,518.24 8,633,959.74
(2) Return of government grants
□ Applicable √ Not applicable
Other description:
Please refer to Note VII (51), (67) and (74) for details.
259
C&S Paper Co., Ltd. 2021 Annual Report
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: None
(3) Acquiree’s identifiable assets and liabilities on the acquisition date: 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
□ 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 description: 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: None
(3) Book value of assets and liabilities of the combined party on the date of combination: None
3. Reverse purchase: 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
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
260
C&S Paper Co., Ltd. 2021 Annual Report
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 holds 100% of its stakes. C&S (Jiangsu) Paper Co., Ltd. was incorporated
into the scope of consolidated statements from February 2021. 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. Yunnan Dolemi Trading Co., Ltd. was dissolved and canceled on October 19, 2021,
and the Company no longer incorporated it into the scope of consolidated statements from the date of cancellation.
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 June 2021. Currently, Mianyang Dolemi has
started operating activities.
On July 12, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and Henan
Duoxian Trading Co., Ltd. jointly invested and established Zhengzhou Dolemi Sanitary Products Co., Ltd., with
a registered capital of RMB1 million. Dolemi Sanitary Products holds 60% of the shares while Duoxian Trading
holds 40% of the shares. The Company has incorporated Zhengzhou Dolemi Sanitary Products Co., Ltd. into the
scope of its consolidated statements since July 2021. Currently, Zhengzhou Dolemi has not started operating
activities.
On July 14, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and Dazhou
Jiatai Trading Co., Ltd. jointly invested and established Dazhou Dolemi Sanitary Products Co., Ltd., with a
registered capital of RMB1.5 million. Dolemi Sanitary Products holds 60% of the shares while Jiatai Trading
holds 40% of the shares. The Company has incorporated Dazhou Dolemi Sanitary Products Co., Ltd. into the
scope of its consolidated statements since July 2021. Currently, Dazhou Dolemi has started operating activities.
On August 6, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and Guizhou
Fangsheng Trading Co., Ltd. jointly invested and established Guiyang Dolemi Sanitary Products Co., Ltd., with
a registered capital of RMB2 million. Dolemi Sanitary Products holds 60% of the shares while Guizhou
Fangsheng Trading holds 40% of the shares. The Company has incorporated Guiyang Dolemi Sanitary Products
Co., Ltd. into the scope of its consolidated statements since August 2021. Currently, Guiyang Dolemi has started
operating activities.
On August 18, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and
Zhanjiang Wei’s Trading Co., Ltd. jointly invested and established Zhanjiang Dolemi Sanitary Products Co.,
Ltd., with a registered capital of RMB1 million. Dolemi Sanitary Products holds 60% of the shares while
Zhanjiang Wei’s Trading holds 40% of the shares. The Company has incorporated Zhanjiang Dolemi Sanitary
261
C&S Paper Co., Ltd. 2021 Annual Report
Products Co., Ltd. into the scope of its consolidated statements since August 2021. Currently, Zhanjiang Dolemi
has not started operating activities.
On September 01, 2021, the Company and Bloomage Biotechnology Corporation Limited jointly invested and
established Beijing Bloomage Jierou Biotechnology Co., Ltd., with a registered capital of RMB10 million. The
Company holds 51% of the shares while Bloomage Biotechnology holds 49% of the shares. The Company has
incorporated Beijing Bloomage Jierou Biotechnology Co., Ltd. into the scope of its consolidated statements since
September 2021. Currently, Bloomage Jierou has started operating activities.
On September 02, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and
Xi’an Boyu Hengchang Trading Co., Ltd. jointly invested and established Xi’an Dolemi Sanitary Products Co.,
Ltd., with a registered capital of RMB1 million. Dolemi Sanitary Products holds 60% of the shares while Boyu
Hengchang Trading holds 40% of the shares. The Company has incorporated Xi’an Dolemi Sanitary Products Co.,
Ltd. into the scope of its consolidated statements since September 2021. Currently, Xi’an Dolemi has not started
operating activities.
6. Others: None
IX. Equities in Other Entities
1. Equities in subsidiaries
(1) Composition of the enterprise group
Shareholding
Name of Main business Registered Obtaining
Principal businesses percentage
subsidiary address address method
Direct Indirect
R&D, production, and sales (including online sales):
household paper, maternal and infant products,
cosmetics, wipes, non-woven products, daily
Capital
Jiangmen necessities, and cleaning supplies; sales (including
Jiangmen, contributio
Zhongshun Jiangmen, online sales) of Class I and II medical devices. (The
Guangdon 88.25% 11.75% n for
Paper Co., Guangdong above items do not involve special management
g establishme
Ltd. measures for the foreign access). (For items that must
nt
be approved in accordance with the law, the company
may carry out business operations upon approval by
competent departments.)
General items: manufacture of paper products; sales of
Capital
Zhejiang paper products; sales of paper pulp; sales of personal
contributio
Zhongshun Jiaxing, Jiaxing, hygiene products; sales of hygiene products and
75.00% 25.00% n for
Paper Co., Zhejiang Zhejiang disposable medical products; sales of disinfectants
establishme
Ltd. (excluding hazardous chemicals); sales of Class I
nt
medical devices; retail of Class I medical devices; sales
262
C&S Paper Co., Ltd. 2021 Annual Report
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 necessities; sales of maternal and infant
products; wholesale of kitchenware, sanitary ware and
daily sundries; wholesale of cosmetics; retail of
cosmetics; wholesale of needle textiles and raw
materials; sales of needle textiles; sales of chemical
industry products (excluding chemical products that
need to be licensed); Internet sales (excluding the sales
of commodities requiring a permit) (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.) (For
items that must be approved in accordance with the law,
the company may carry out business operations upon
approval by competent departments.)
Capital
C&S Hong contributio
Hong
Kong Co., Hong Kong Purchase of pulp 100.00% n for
Kong
Ltd. establishme
nt
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
disinfectant products (excluding hazardous chemicals); Capital
C&S (Yunfu) Yunfu, wholesale, retail and online sales: food; import and contributio
Yunfu,
Paper Co., Guangdon export of goods and technologies (excluding the import 100.00% n for
Guangdong
Ltd. g and export of goods and technologies prohibited by the establishme
State or involving administrative approval); nt
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 competent departments.)
Wholesale, retain and online sales: paper, wood pulp,
Capital
sanitary products, maternal and infant products,
Yunfu Hengtai Yunfu, contributio
Yunfu, cosmetics, daily necessities, medical equipment, daily
Trading Co., Guangdon 100.00% n for
Guangdong sundries, disinfection supplies (excluding dangerous
Ltd. g establishme
chemicals); import and export of goods or technologies
nt
(excluding the import and export of goods and
263
C&S Paper Co., Ltd. 2021 Annual Report
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.)
Capital
contributio
C&S (Macao)
Macao Macao Wholesale, trade 100.00% n for
Co., Ltd.
establishme
nt
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, nonwoven
products, chemical products for daily use, Class I
medical devices and food; warehousing (excluding Business
hazardous chemicals and precursor chemicals); import combinatio
Zhongshan Zhongsha and export of goods and technologies; operations of ns
Zhongshun Zhongshan, n, Class II and Class III medical devices. (The above involving
100.00%
Trading Co., Guangdong Guangdon business scope involves food operations, import and enterprises
Ltd. g export of goods, and import and export of under
technologies.) (Exclude items prohibited by laws and common
administrative regulations; items whose operations are control
restricted by laws and administrative regulations shall
not be carried out unless the permit has been obtained.)
(For items that must be approved in accordance with the
law, the company may carry out business operations
upon approval by competent departments.)
Business
Import, export and sales of paper products, general
combinatio
merchandise and pulp boards; sales of cosmetics,
ns
Xiaogan C&S shower gel and sanitary pads; sales of baby products
Xiaogan, Xiaogan, involving
Trading Co., (excluding food). (For items that must be approved in 100.00%
Hubei Hubei enterprises
Ltd. accordance with the law, the company may carry out
under
business operations upon approval by competent
common
departments.)
control
Sales of paper products, daily necessities, paper pulp, Business
and pulp boards; import and export of goods. (The combinatio
Beijing C&S company may independently select business items and ns
Paper Co., Beijing Beijing carry out business activities in accordance with the law; 100.00% involving
Ltd. for items that must be approved in accordance with the enterprises
law, the company may carry out business operations under
upon approval by competent departments based on common
264
C&S Paper Co., Ltd. 2021 Annual Report
contents of the approval; it is prohibited to engage in control
business activities of items prohibited and restricted by
the city’s industrial policies.)
Sales of household paper, cleaning products, general
merchandise, hygiene products, baby products, Business
cosmetics, nonwoven products, feminine hygiene combinatio
Chengdu products, chemical products for daily use, daily ns
Zhongshun Pengzhou, Pengzhou, necessities, medical devices, medical supplies and involving
100.00%
Paper Co., Sichuan Sichuan disinfectant products (excluding hazardous chemicals); enterprises
Ltd. e-commerce [For items that must be approved in under
accordance with the law, the company may carry out common
business operations upon approval by competent control
departments.]
Wholesale, retail: paper products, paper pulp, general
merchandise; import and export of goods and
Business
technologies (exclude items prohibited by laws and
combinatio
administrative regulations; items whose operations are
ns
Hangzhou Jie restricted by laws and administrative regulations shall
Hangzhou, Hangzhou, involving
Rou Trading not be carried out unless the permit has been obtained); 100.00%
Zhejiang Zhejiang enterprises
Co., Ltd. other legitimate items that do not need approval
under
according to the law) (for items that must be approved
common
in accordance with the law, the company may carry out
control
business operations upon approval by competent
departments)
Business
combinatio
Household paper, paper pulp, pulp boards, import and
ns
Shanghai export of goods and technologies. (For items that must
involving
Huicong Paper Shanghai Shanghai be approved in accordance with the law, the company 100.00%
enterprises
Co., Ltd. may carry out business operations upon approval by
under
competent departments.)
common
control
Licensed items: production of sanitary products and
disposable medical supplies; production of cosmetics
Business
(for items that must be approved in accordance with the
combinatio
law, companies may carry out business operations upon
ns
C&S (Hubei) approval by relevant departments, and the specific
Xiaogan, Xiaogan, involving
Paper Co., business items are subject to the approval document or 93.375% 6.625%
Hubei Hubei enterprises
Ltd. the permit issued by competent department). General
under
items: sales of sanitary products and disposable medical
common
supplies; retail of cosmetics; wholesale of cosmetics;
control
manufacture of paper; sales of personal hygiene
products; sales of knitwear; manufacture of maternal
265
C&S Paper Co., Ltd. 2021 Annual Report
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.)
Business
combinatio
ns
Zhong Shun Hong
Hong Kong, involving
International Kong, Sales of paper products 100.00%
China enterprises
Co., Ltd. China
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
operations upon approval by competent departments,
and the specific business items are subject to the
approval document or the permit issued by relevant
Business
department). General items: sales of sanitary products
combinatio
and disposable medical supplies; sales of personal
C&S ns
hygiene products; sales of daily necessities;
(Sichuan) Pengzhou, Pengzhou, involving
manufacture of paper products; sales of paper products; 100.00%
Paper Co., Sichuan Sichuan enterprises
manufacture of paper; manufacture of daily chemical
Ltd. under
products; sales of daily chemical products; sales of
common
Class II medical devices; sales of Class I medical
control
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.)
266
C&S Paper Co., Ltd. 2021 Annual Report
Production, processing and sales: high-class household
paper products (excluding printing process); import and Business
export of pulp boards (exclude items prohibited by laws combinatio
C&S Zhongsha and administrative regulations; items whose operations ns
(Zhongshan) Zhongshan, n, are restricted by laws and administrative regulations involving
100.00%
Paper Co., Guangdong Guangdon shall not be carried out unless the permit has been enterprises
Ltd. g obtained). (For items that must be approved in under
accordance with the law, the company may carry out common
business operations upon approval by competent control
departments.)
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 planting;
acquisition of raw materials of bamboo and wood for
Capital
C&S paper making; R&D, production and sales of bamboo
contributio
(Dazhou) Dazhou, Dazhou, pulp, wood pulp, bamboo chips and wood chips;
100.00% n for
Paper Co., Sichuan Sichuan combined heat and power and sales; warehouse leasing;
establishme
Ltd. processing and sales of lime and limestone; processing
nt
of industrial wastewater and gray water reuse; general
import and export business; sales of construction
materials, hardware 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.)
R&D, production, processing, and online sales: paper
products, hygiene products, cosmetics, nonwoven
products, plastic products for daily use, chemical
products for daily use, metalware for daily use, rubber
Capital
products for daily use, and ceramics for daily use;
Sun Daily Yunfu, contributio
Yunfu, import and export of goods or technologies (excluding
Necessities Guangdon 50.00% 50.00% n for
Guangdong the import and export of goods and technologies
Co., Ltd. g establishme
prohibited by the State or involving administrative
nt
approval). (For items that must be approved in
accordance with the law, the company may carry out
business operations upon approval by competent
departments.)
Dolemi Zhongsha General items: manufacture of paper products; Internet Capital
Zhongshan,
Sanitary n, sales (sales only on third-party platforms) (excluding 60.00% 40.00% contributio
Guangdong
Products Co., Guangdon the sales of commodities requiring a permit); sales of n for
267
C&S Paper Co., Ltd. 2021 Annual Report
Ltd. g personal hygiene products; sales of household products, establishme
sales of hygiene products and disposable medical nt
products; retail of cosmetics; sales of general
merchandise; sales of plastic products; sales of metal
products; sales of rubber products; manufacture of
daily-use ceramic 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.) (For items that
must be approved in accordance with the law, the
company may carry out business operations upon
approval by competent departments.)
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 devices (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 to approval result). General
items: manufacture of paper products; sales of plastic
products; sales of paper products; Internet sales
(excluding the sales of commodities requiring a permit);
sales of daily necessities; sales of personal hygiene Capital
C&S (Jiangsu) products; sales of household products; sales of sanitary contributio
Suqian, Suqian,
Paper Co., products and disposable medical products; retail of 100.00% n for
Jiangsu Jiangsu
Ltd. cosmetics; wholesale of cosmetics; sales of knitwear; establishme
wholesale of kitchen utensils and daily groceries; nt
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)
Technology development, technology consultation,
Beijing Capital
technology transfer, technology promotion, and
Bloomage contributio
Beijing Beijing technical services; sales of paper products, daily 51.00%
Jierou n for
necessities, hygiene products, cosmetics, chemical
Biotechnology establishme
products (excluding hazardous chemicals), Class I
268
C&S Paper Co., Ltd. 2021 Annual Report
Co., Ltd. medical devices, Class II medical devices, disinfection nt
products and non-medical masks. (The market entity
may independently select business items and carry out
business activities in accordance with 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 based on contents
of the approval; it is prohibited to engage in business
activities of items prohibited and restricted by national
and municipal industrial policies.)
General items: sales of personal hygiene products; sales
of paper products; Internet sales (excluding the sales of
commodities requiring a permit); sales of household
products; sales of sanitary products and disposable
medical products; sales of daily necessities; sales of
Luzhou Capital
plastic products; sales of metal products; sales of rubber
Dolemi contributio
Luzhou, Luzhou, products; manufacture of daily-use ceramic products
Sanitary 60.00% n for
Sichuan Sichuan (the company may carry out business operations
Products Co., establishme
independently according to the law based on the
Ltd. nt
business license, except for items that must be licensed
according to the law) (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.)
General items: wholesale of cosmetics; sales of
personal hygiene products; manufacture of paper
products; Internet sales (excluding the sales of
commodities requiring a permit); sales of household
Mianyang Capital
products; sales of sanitary products and disposable
Dolemi contributio
Mianyang, Mianyang, medical products; retail of cosmetics; sales of daily
Sanitary 60.00% n for
Sichuan Sichuan necessities; sales of plastic products; sales of metal
Products Co., establishme
products; sales of rubber products; manufacture of
Ltd. nt
daily-use ceramic 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).
General items: sales of personal hygiene products; sales
Zhengzhou of household products; sales of sanitary products and Capital
Dolemi disposable medical products; retail of cosmetics; sales contributio
Zhengzhou, Zhengzho
Sanitary of daily necessities; sales of plastic products; sales of 60.00% n for
Henan u, Henan
Products Co., paper products; sales of metal products; sales of rubber establishme
Ltd. products; manufacture of daily-use ceramic products nt
(the company may carry out business operations
269
C&S Paper Co., Ltd. 2021 Annual Report
independently according to the law based on the
business license, except for items that must be licensed
according to the law).
General items: sales of personal hygiene products; sales
of sanitary products and disposable medical products;
sales of paper products; Internet sales (excluding the
sales of commodities requiring a permit); sales of
Dazhou Capital
household products; retail of cosmetics; sales of daily
Dolemi contributio
Dazhou, Dazhou, necessities; sales of plastic products; sales of metal
Sanitary 60.00% n for
Sichuan Sichuan products; sales of rubber products; manufacture of
Products Co., establishme
daily-use ceramic products; convention and exhibition
Ltd. nt
services (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)
Items prohibited by laws, regulations and decisions of
the State Council cannot be engaged; items whose
operation requires permission (approval) as stipulated
by laws, regulations and decisions of the State Council
can be engaged after obtaining the permit (approval)
document; for items requiring no permission (approval)
Guiyang under laws, regulations and decisions of the State Capital
Dolemi Council, market entity may choose whether to engage contributio
Guiyang, Guiyang,
Sanitary independently. Other unspecified retail trade; sales of 60.00% n for
Guizhou Guizhou
Products Co., paper products; sales of daily necessities; retail of establishme
Ltd. cosmetics; sales of sundries; sales of household nt
products; retail of arts and crafts and collectibles
(except ivory and its products); brand management;
convention and exhibition services (for items that must
be approved in accordance with the law, the company
may carry out business operations upon approval by
competent departments)
General items: sales of hygiene products and disposable
medical products; sales of personal hygiene products;
retail of cosmetics; sales of daily necessities; sales of
Zhanjiang Capital
sundries; sales of rubber products; sales of plastic
Dolemi Zhanjiang, contributio
Zhanjiang, products; sales of metal products; sales of paper
Sanitary Guangdon 60.00% n for
Guangdong products; convention and exhibition services. (The
Products Co., g establishme
company may carry out business operations
Ltd. nt
independently according to the law based on the
business license, except for items that must be licensed
according to the law)
Xi’an Dolemi Xi’an, Xi’an, General items: sales of daily necessities; retail of 60.00% Capital
270
C&S Paper Co., Ltd. 2021 Annual Report
Sanitary Shaanxi Shaanxi cosmetics; sales of household goods; sales of office contributio
Products Co., supplies; sales of arts and crafts and etiquette products n for
Ltd. (except ivory and its products); sales of building establishme
decoration materials; sales of knitwear; sales of nt
machinery and equipment; sales of instruments and
meters; retail of clothes and apparels; retail of shoes and
hats; sales of foods (only pre-packaged foods); sales of
sundries; sales of electronic products; landscaping
engineering construction; advertising design and
agency; network technology services; marketing
planning; convention and exhibition services; etiquette
services. (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
(2) Important non-wholly-owned subsidiaries: 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.
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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: None
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: None
(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: None
Other description
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.
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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.
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 December 31, 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. 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
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and settled in RMB. See "Note VII (82)" for the conversion of foreign currency financial assets and liabilities into
RMB as of December 31, 2021. During the reporting period, the Company generated exchange profit and loss of
-RMB3,248,733.35.
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:
Item End of year
Impact on profit Impact on shareholders’
equity
Appreciation of RMB against foreign currency by 1.00% -855,576.55 -855,576.55
Depreciation of RMB against foreign currency by 1.00% 855,576.55 855,576.55
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 December 31, 2021 analyzed based on the maturity period of
undiscounted remaining contractual obligations are as follows:
Item Within 1 year Over 1 year Total
Notes payable 334,969,632.58 334,969,632.58
Accounts payable 825,831,744.94 3,282,035.37 829,113,780.31
Other payables 845,094,973.44 9,777,205.34 854,872,178.78
Non-current liabilities
8,616,487.38 8,616,487.38
due within one year
Lease liabilities 5,565,928.14 5,565,928.14
Total 2,005,896,350.96 13,059,240.71 2,018,955,591.67
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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 28.62% 28.62%
Guangdong (exclusive of real
Group Co., Ltd.
estate, labor
services, financial
futures, and studying
abroad)
Information on the Company’s Parent Company
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The ultimate controller of the Company is Mr. Deng Yingzhong, the father, and Mr. Deng Guanbiao and Mr. Deng 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
A company controlled by the Company’s actual controller/other
Chung Shun Co.
shareholder holding 5% or more of shares
A company controlled by the nephew and the husband of the niece of Mr.
Guangzhou Zhongshun Trade Co., Ltd.
Deng Yingzhong, director of the Company
A company in which the Company’s actual controller Mr. Deng
Bama Zhongshun Health Products Co., Ltd.
Yingzhong serves as a director
The partially-owned subsidiary of Bama Zhongshun Health Products Co.,
Yantai Zhongshun Network Technology Co., Ltd.
Ltd. controlled by the Company’s controlling shareholders
A company jointly controlled by the Company’s actual controllers Mr.
Shenzhen Zhongshun Caizhi Investment Co., Ltd.
Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie
A company in which the son of the Company’s Vice President Yue Yong
Pengzhou Enjoying Life Trading Co., Ltd.
holds 50% equity and serves as a supervisor
A company where the son of the Company’s Vice President Yue Yong
Sichuan West Enjoying Life Trading Co., Ltd.
holds 50% equity and serves as a supervisor
Chongqing Qinyue Trading Co., Ltd.
A company in which the spouse of the brother of the Company’s Vice
(Former: Chongqing Fuling District Qinyue Household
President Yue Yong holds 99% equity
Necessities Co., Ltd.)
A company in which the Company’s actual controller Mr. Deng Guanbiao
Shenzhen Jinju Investment Co., Ltd.
serves as a director and Mr. Deng Guanjie serves as a supervisor
A company in which the Company’s actual controller Mr. Deng Guanjie
Zhongshan Zhongshun Caizhi Trading Co., Ltd. serves as the manager and executive director and Mr. Deng Guanbiao
serves as a supervisor.
Zhongshan Qianlai Network Technology Co., Ltd. A company controlled by the Company’s independent director Mr. Liu Die
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Foshan Yingfang Jiayu Consulting Services Co., Ltd. A company controlled by the Company’s supervisor Liang Yongliang
A company in which the mother-in-law of the Company’s actual controller
Meizhou Xinhong Electronics Co., Ltd. Mr. Deng Guanbiao holds 100% of the shares and serves as the General
Manager and executive director
A company in which the sibling-in-laws of the Company’s supervisor
Guangzhou Xinghui Paper Co., Ltd.
Zhang Gao hold 88% of the shares and act as the legal representative
A company in which the sibling-in-laws of the Company’s supervisor
Zhang Gao hold 99% of the shares and act as the legal representative
Guangzhou Jiahui Enterprise Management Co., Ltd.
while Mr. Zhang’s spouse holds 1% of the shares and serve as the
executive director
A company in which the sibling-in-laws of the Company’s supervisor
China Paper Investment Co., Ltd.
Zhang Gao serve as directors
A company in which the sibling-in-laws of the Company’s supervisor
Zhejiang FTZ Xinjiachang Trading Co., Ltd.
Zhang Gao hold 100% of the shares and act as directors
Zhuhai High-tech Zone Shengda Engineering A company in which the son of the Company’s CFO Dong Ye serves as
Consulting Service Center the legal representative
A company in which the Company’s Board Secretary and Vice President
Zhongshan Jufengbao Trading Co., Ltd. hold 90% of the shares and serve as the executive director and legal
representative
A company in which the brother of the Company’s director and actual
Foshan Shunde Taogang Trading Co., Ltd. controller Mr. Deng Yingzhong holds 50% of the shares and serves as the
legal representative
Other description
Note: 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
Purchase of goods/acceptance of labor services
Unit: RMB
Content of related Incurred in the Approved transaction Whether to outstrip Incurred in the prior
Related party
party transaction current period limit the transaction limit period
Sichuan West
Enjoying Life Promotion fee 255,495.97 500,000.00 No
Trading Co., Ltd.
Table of sale of goods/provision of labor services
Unit: RMB
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Content of related party
Related party Incurred in the current period Incurred in the prior period
transaction
Pengzhou Enjoying Life
Sale of goods 2,372,236.58 1,378,011.50
Trading Co., Ltd.
Sichuan West Enjoying Life
Sale of goods 309,795.62 641,228.34
Trading Co., Ltd.
Chongqing Qinyue Trading Co.,
Sale of goods 330,512.87
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
It is expected that the amount of related party transactions between the Company and Sichuan West Enjoying Life Trading Co., Ltd.
Was RMB500,000 in 2021, including the related party’s provision of services to the Company and the Company’s sales of goods to
the related party.
(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
Lease fee confirmed in the Lease fee confirmed in the last
Name of lessor Type of leased assets
current period period
Mr. Deng Yingzhong, Mr. Deng
Guanbiao and Mr. Deng Housing lease 2,919,181.44 3,004,787.91
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 36,922,924.97 34,173,895.09
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(8) Other related party transactions
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
Project 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
Project Related party
period beginning of the period
Sichuan West Enjoying Life Trading
Other payables 282,242.81
Co., Ltd.
Sichuan West Enjoying Life Trading
Contract liabilities 126.90 195.90
Co., Ltd.
Pengzhou Enjoying Life Trading
Contract liabilities 9,374.37 1.67
Co., Ltd.
7. Commitments of related parties: None
8. Others: None
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
8,655,088.00
current period
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C&S Paper Co., Ltd. 2021 Annual Report
The Company’s total amount of all equity instruments expired in the
3,560,349.00
current period
The grant price for restricted stock options awarded by
the Company in the first grant period as at the end of
reporting period is RMB8.572/share, and that for
Scope of exercise prices and remaining contractual term of the Company’
reserved stock options is RMB13.865/share; the validity
stock options issued as at the end of the reporting period
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
Method of determining the fair value of equity instruments at the Restricted shares: the stock closing prices at the grant date
grant date Stock options: Black-Scholes model for option pricing
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
115,633,467.53
recognized as capital surplus
Total fees confirmed by the equity-settled share-based payment in
12,688,659.70
the current period
Other description
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
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XIV. Commitments and Contingencies
1. Significant commitments
Significant commitments on the balance sheet date
As at December 31, 2021, the Company had no significant commitments that should have been disclosed but are
not disclosed.
2. Contingencies
(1) Significant contingent matters on the balance sheet date
As at December 31, 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:
Pursuant to resolutions made on the 13th meeting of the fifth session of the Board of Directors on April 26, 2022,
the profit distribution proposal in 2021 is as follows: Based on the number of shares of the Company’s total share
capital minus the number of repurchased shares as at the equity registration date of the implementation of this
profit distribution plan, distribute a cash dividend of RMB1.00 (tax included) for every 10 shares to all
shareholders; no bonus shares will be issued and no capital reserve will be converted into share capital. The
Company’s total share capital may change as of the equity registration date for the implementation of this profit
distribution plan in the future due to the repurchase and deregistration of restricted shares, exercise of stock
options, etc. The Company will maintain the profit distribution amount for every 10 shares and change the total
amount of profit distribution accordingly. The proposal can be implemented only after submitting to and being
approved by the general meeting of shareholders.
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C&S Paper Co., Ltd. 2021 Annual Report
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
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.
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C&S Paper Co., Ltd. 2021 Annual Report
(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
External guarantees of the Company
In 2021, the Company signed the XIAOYIDA Business Cooperation Agreement with Bank of China Limited
Zhongshan Branch and Shanghai Junmeng E-commerce Co., Ltd. (No. 2021-XYDXY-33725001), under which
the bank offers a credit line of XIAOYIDA service up to RMB200 million to Shanghai Junmeng and the Company
provides a joint and several liability guarantee. The line of credit is valid until June 22, 2022. As of December 31,
2021, Shanghai Junmeng had no financing balance left of the XIAOYIDA service.
In 2021, 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. 2021-XYDXY-33725002), under which the bank offers a credit line of XIAOYIDA service up to
RMB145 million to Wuhan Jie Rou and the Company provides a joint and several liability guarantee. The line of
credit is valid until August 5, 2022. As of December 31 2021, Wuhan Jie Rou had no financing balance left of the
XIAOYIDA service.
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 period Balance at the beginning of the period
Impairment Impairment
Book balance Book balance
Category 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 173,226, 2,171,65 171,055,0 94,047,36 1,399,993 92,647,372.
100.00% 1.25% 100.00% 1.49%
reserve is set aside in 692.33 2.96 39.37 5.99 .66 33
portfolios
Including:
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C&S Paper Co., Ltd. 2021 Annual Report
Portfolio based on 82,828,5 2,171,65 80,656,88 56,099,68 1,399,993 54,699,687.
47.82% 2.62% 59.65% 2.50%
aging 35.15 2.96 2.19 1.03 .66 37
Portfolio based on 90,398,1 90,398,15 37,947,68 37,947,684.
52.18% 40.35%
related parties 57.18 7.18 4.96 96
173,226, 2,171,65 171,055,0 94,047,36 1,399,993 92,647,372.
Total 100.00% 1.25% 100.00% 1.49%
692.33 2.96 39.37 5.99 .66 33
Bad debt reserve set aside individually: None
Bad debt reserve set aside in portfolios: 2,171,652.96
Unit: RMB
Balance at the end of the period
Name
Book balance Impairment provision Ratio of provision
Within the credit period 67,870,642.71 1,357,412.86 2.00%
Credit period - 1 year 14,632,826.05 731,641.30 5.00%
1 to 2 years 207,443.99 31,116.60 15.00%
2 to 3 years 36,645.00 10,993.50 30.00%
3 to 5 years 80,977.40 40,488.70 50.00%
Over 5 years 100.00%
Total 82,828,535.15 2,171,652.96 --
Description of reason for the portfolio:
Accounts receivable with the same aging have similar credit risk characteristics.
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 Book balance
Within 1 year (inclusive) 172,901,625.94
1 to 2 years 207,443.99
2 to 3 years 36,645.00
Over 3 years 80,977.40
3 to 4 years 80,977.40
Total 173,226,692.33
(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:
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C&S Paper Co., Ltd. 2021 Annual Report
Unit: RMB
Balance at the Amount of change in the reporting period
Balance at the
Category beginning of the Recovery or
Provision Write-off Others end of the period
period reversal
Accounts
1,399,993.66 771,659.30 2,171,652.96
receivable
Total 1,399,993.66 771,659.30 2,171,652.96
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
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 90,398,157.18 52.18%
2nd 19,483,670.07 11.25% 389,673.40
3rd 15,222,369.16 8.79% 350,923.36
4th 7,925,671.37 4.58% 313,013.17
5th 5,731,213.33 3.31% 198,384.52
Total 138,761,081.11 80.11% --
(5) Amounts of assets and liabilities that are formed by the transfer and ongoing involvement of accounts
receivable
The Company has no accounts receivable derecognized due to the transfer of financial assets as at the end of the
reporting period.
(6) Accounts receivable derecognized due to transfer of financial assets: None
2. Other receivables
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Other receivables 128,580,102.05 136,987,584.64
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C&S Paper Co., Ltd. 2021 Annual Report
Total 128,580,102.05 136,987,584.64
(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
Current accounts 125,981,678.74 131,125,900.41
Reserve 724,829.00 639,681.19
Margins and deposits 253,137.00 113,606.00
Others 1,844,844.60 5,494,420.94
Total 128,804,489.34 137,373,608.54
2) Provision of bad debt reserve
Unit: RMB
Phase I Phase II Phase III
Bad debt provision Expected credit loss Expected credit losses in Expected credit losses in Total
in the next 12 months the whole duration (without the whole duration (with
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C&S Paper Co., Ltd. 2021 Annual Report
credit impairment) credit impairment)
Balance as at January 1,
386,023.90 386,023.90
2021
Balance as at January 1,
2021 in the reporting —— —— —— ——
period
Transferred-back in the
143,185.66 143,185.66
reporting period
Write-off in the reporting
18,450.95 18,450.95
period
Balance as at December
224,387.29 224,387.29
31, 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 Book balance
Within 1 year (inclusive) 128,751,535.29
1 to 2 years 44,600.00
Over 3 years 8,354.05
Over 5 years 8,354.05
Total 128,804,489.34
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 end
Category beginning of Recovery or
Provision Write-off Others of the period
the period reversal
Other receivables 386,023.90 143,185.66 18,450.95 224,387.29
Total 386,023.90 143,185.66 18,450.95 224,387.29
The amount of other accounts receivable written-off by the Company in the year was RMB18,450.95.
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
Unit: RMB
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C&S Paper Co., Ltd. 2021 Annual Report
Item Write-off amount
Other receivables actually written off 18,450.95
Description of write-offs of important other receivables: None
5) Top five debtors in closing balance of other accounts receivable
Unit: RMB
Percentage in total
Balance of bad debt
Nature of the Balance at the end balance of other
Name of institution Aging reserve at the end of
amount of the period receivables at the end
the period
of the period
1st Current accounts 98,082,768.08 Within 1 year 76.15%
2nd Current accounts 26,398,361.92 Within 1 year 20.49%
3rd Current accounts 1,817,447.37 Within 1 year 1.41% 90,872.37
Within 1 year, 4-5
4th Others 138,124.39 0.11% 10,665.54
years
5th Others 97,880.60 Within 1 year 0.08% 4,894.03
Total -- 126,534,582.36 -- 98.24% 106,431.94
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 investments
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
1,945,421,378.56 1,945,421,378.56 1,928,113,219.50 1,928,113,219.50
subsidiaries
Total 1,945,421,378.56 1,945,421,378.56 1,928,113,219.50 1,928,113,219.50
(1) Investment in subsidiaries
Unit: RMB
Investee Balance at the Increase/decrease in the period Closing balance Closing
288
C&S Paper Co., Ltd. 2021 Annual Report
beginning of the (book value) balance of
Increase in Decrease in Impairment
period Others impairment
investment investment Provision
(Book value) provision
Jiangmen
Zhongshun 698,614,821.47 559,563.62 699,174,385.09
Paper Co., Ltd.
Zhongshan
Zhongshun
94,817,296.68 1,889,769.88 96,707,066.56
Trading Co.,
Ltd.
Yunfu Hengtai
Trading Co., 30,200,274.51 869.50 30,201,144.01
Ltd.
C&S (Yunfu)
657,837,465.42 759,016.40 658,596,481.82
Paper Co., Ltd.
C&S
(Zhongshan) 12,683,100.00 12,683,100.00
Paper Co., Ltd.
Sun Daily
Necessities Co., 200,000.00 200,000.00
Ltd.
C&S (Sichuan)
173,385,439.98 3,087,887.32 176,473,327.30
Paper Co., Ltd.
C&S (Dazhou)
6,000,000.00 6,000,000.00
Paper Co., Ltd.
C&S (Hubei)
196,016,245.13 1,460,392.03 197,476,637.16
Paper Co., Ltd.
Zhejiang
Zhongshun 56,524,520.15 1,540,752.38 58,065,272.53
Paper Co., Ltd.
C&S (Jiangsu)
5,700,000.00 96,828.33 5,796,828.33
Paper Co., Ltd.
Zhong Shun
International 785,042.74 96,220.83 881,263.57
Co., Ltd.
Dolemi Sanitary
Products Co., 869.50 869.50
Ltd.
Chengdu
627,524.58 42,532.45 670,057.03
Zhongshun
289
C&S Paper Co., Ltd. 2021 Annual Report
Paper Co., Ltd.
Xiaogan C&S
Trading Co., 311,467.66 8,938.00 320,405.66
Ltd.
Hangzhou Jie
Rou Trading 104,095.00 22,345.02 126,440.02
Co., Ltd.
Shanghai
Huicong Paper 5,926.18 2,173.80 8,099.98
Co., Ltd.
Beijing
Bloomage
Jierou 2,040,000.00 2,040,000.00
Biotechnology
Co., Ltd.
Total 1,928,113,219.50 7,740,000.00 9,568,159.06 1,945,421,378.56
(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 1,054,822,665.07 875,587,399.73 1,034,162,235.27 822,204,492.12
Other businesses 1,328,294,351.23 1,240,959,177.22 598,353,119.61 555,594,473.69
Total 2,383,117,016.30 2,116,546,576.95 1,632,515,354.88 1,377,798,965.81
Information related to income:
Unit: RMB
Contract classification Branch 1 Branch 2 Total
By product type 2,383,117,016.30 2,383,117,016.30
Including:
Household paper 1,047,145,308.26 1,047,145,308.26
Personal care 7,677,356.81 7,677,356.81
Others 1,328,294,351.23 1,328,294,351.23
By operating region 2,383,117,016.30 2,383,117,016.30
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C&S Paper Co., Ltd. 2021 Annual Report
Including:
Domestic 2,383,117,016.30 2,383,117,016.30
Abroad 0.00 0.00
By market or customer
type
Including:
Contract type
Including:
By the time of goods
transfer
Including:
By contract term
Including:
By sales channel 2,383,117,016.30 2,383,117,016.30
Including:
Traditional 757,760,827.46 757,760,827.46
Non-traditional 297,061,837.61 297,061,837.61
Others 1,328,294,351.23 1,328,294,351.23
Total 2,383,117,016.30 2,383,117,016.30
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 RMB5,083,475.44, of which the income of RMB5,083,475.44 is expected to be
confirmed as income in the year of 2022.
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
291
C&S Paper Co., Ltd. 2021 Annual Report
Others 329,072.79 3,256,231.99
Total 482,704,072.79 143,256,231.99
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
-2,054,550.41
non-current asset
Governmental grants reckoned into current
profits/losses (not including grants enjoyed
in quota or ration according to national 22,379,246.83
standards, which are closely relevant to the
company’s normal business)
Returns on principal-protected wealth
Profits/losses from assets entrusted to others
365,973.72 management products at maturity and
for investment or management
reverse repo of treasury bonds
Other non-operating income and expenses
-4,941,142.49
except for the aforementioned items
Less: Influence of income tax 2,564,492.76
Total 13,185,034.89 --
Details of other profit and loss items that meet the definition of non-recurring profit and loss:
□ Applicable √ Not applicable
The Company has no other profit and loss items that meet the definition of non-recurring profit and loss.
Descriptions where the Company defines any non-recurring profit and loss items 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
□ 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 11.82% 0.45 0.44
292
C&S Paper Co., Ltd. 2021 Annual Report
ordinary shareholders of the
Company
Net profit attributable to the
ordinary shareholders of the
11.55% 0.44 0.43
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.
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