C&S Paper Co., Ltd. 2022 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 0.62 (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. 2022 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 ..................................................................................................... 46
Section V Environmental and Social Responsibilities ....................................................................... 76
Section VI Significant Events ............................................................................................................ 83
Section VII Changes in Shareholding and Information of Shareholders ......................................... 105
Section VIII Particulars of Preference Shares .................................................................................. 116
Section IX Corporate Bonds ............................................................................................................ 117
Section X Financial Report .............................................................................................................. 118
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C&S Paper Co., Ltd. 2022 Annual Report
Documents Available for Inspection
1. The 2022 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 during the reporting period
5. Place for document inspection: Office of the Board of Directors
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C&S Paper Co., Ltd. 2022 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
Macao C&S C&S (Macao) Co., Ltd.
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.
Yunfu Hengtai Trading Co., Ltd., formerly known as C&S (Yunfu)
Yunfu Trading
Trading 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.
Tangshan C&S, Tangshan subsidiary C&S Paper Co., Ltd. Tangshan Branch
Dazhou C&S C&S (Dazhou) Paper Co., Ltd.
Jiangsu C&S C&S (Jiangsu) Paper Co., Ltd.
C&S (Zhongshan) Paper Co., Ltd., formerly known as Zhongshan Tongfu
Zhongshan Paper
Trade Co., Ltd.
Sun C&S Sun Daily Necessities 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. 2022 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.
Bloomage Jierou Beijing Bloomage Jierou Biotechnology Co., Ltd.
Zhongshun Health Zhongshun Health Life Technology (Shenzhen)Co.,Ltd.
Huashun Technology Guangdong Huashun Material Technology Co., Ltd
Mazars Mazars Certified Public Accountants (LLP)
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C&S Paper Co., Ltd. 2022 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 2021, in order to optimize information of the specific registered address, the Company’s
Historical changes of the registered address has been changed from “Shenglong Village, Tanbei, Dongsheng Town,
Company’s registered address Zhongshan City” to “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 of 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. 2022 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. 2022 Annual Report
V. Other Relevant Information
Accounting firm engaged by the Company
Name Mazars Certified Public Accountants (LLP)
Office address Floor 2-9, No. 169 Donghu Road, Wuchang District, Wuhan
Name of signing accountants Jiang Chaojie, 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
2022 2021 Changes over last year 2020
Operating income (RMB) 8,569,694,360.65 9,149,870,464.80 -6.34% 7,823,528,416.32
Net profit attributable to 349,971,119.46 581,097,222.93 -39.77% 905,889,081.41
shareholders of the listed company
(RMB)
Net profit attributable to 320,414,856.99 567,912,188.04 -43.58% 891,552,986.81
shareholders of the listed company
after deducting non-recurring profit
and loss (RMB)
Net cash flow from operating 391,693,012.37 1,319,579,606.83 -70.32% 828,200,862.25
activities (RMB)
Basic earnings per share 0.27 0.45 -40.00% 0.70
(RMB/share)
Diluted earnings per share 0.27 0.44 -38.64% 0.69
(RMB/share)
Weighted average return on net 6.94% 11.82% -4.88% 19.86%
assets
Changes over end of
End of 2022 End of 2021 End of 2020
last year
Total assets (RMB) 8,335,107,691.71 7,523,281,973.84 10.79% 7,478,439,747.77
Net assets attributable to 5,178,060,378.48 4,903,552,661.58 5.60% 5,042,146,076.42
shareholders of the listed company
(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. 2022 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 1,884,339,300.88 2,483,278,812.73 1,746,327,067.87 2,455,749,179.17
Net profit attributable to 133,346,264.70 94,293,440.65 46,869,615.07 75,461,799.04
shareholders of the listed company
Net profit attributable to 126,963,097.30 93,601,934.36 30,063,247.43 69,786,577.90
shareholders of the listed company
after deducting non-recurring profit
and loss
Net cash flow from operating 247,480,435.23 452,069,290.52 -229,866,994.30 -77,989,719.08
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 2022 Amount in 2021 Amount in 2020 Description
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C&S Paper Co., Ltd. 2022 Annual Report
Profits/losses from the disposal of -1,725,714.34 -2,054,550.41 -2,980,604.57
non-current asset (including the write-off
that accrued for impairment of assets)
Governmental grants reckoned into current 25,847,850.99 22,379,246.83 28,533,162.96
profits/losses (not including grants enjoyed
in quota or ration according to national
standards, which are closely relevant to the
company’s normal business)
Profits/losses from assets entrusted to others 191,076.23 365,973.72 3,868,134.28
for investment or management
Except for effective hedging business -1,039,651.53
related to the normal operation of the
company, fair value gains and losses from
holding trading financial assets and trading
financial liabilities, as well as investment
income from disposing of trading financial
assets, trading financial liabilities, and
available for sale financial assets
Other non-operating income and expenses 12,921,558.41 -4,941,142.49 -13,442,144.41
except for the aforementioned items
Less: Influence of income tax 6,638,857.29 2,564,492.76 1,642,453.66
Total 29,556,262.47 13,185,034.89 14,336,094.60 --
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. 2022 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
The scale of household paper industry to which the Company belongs has maintained an upward trend in recent
years, but the market competition is also fierce. Pursuant to the 2022-2023 China Household Paper Yearbook, the
per capita consumption of China’s household paper, despite continual increase in the past few years, is still far
below the level of developed countries and regions such as U.S., Western Europe and Japan in 2020 as estimated
by Fastmarkets RISI. The industry still has room for continued growth in the long run. However, the relative
overcapacity of the industry at the moment coupled with the enlarged production capacity base has slowed down
its growth rate. As consumers pay more and more attention to health protection, the demand for high-end and
differentiated household paper products has been strengthened, which will contribute to a new round of growth.
The change of consumption patterns will further elevate the percentage of online sales.
(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
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C&S Paper Co., Ltd. 2022 Annual Report
specifications and packaging designs, and develop new products by capturing in time changes in the consumption
concepts of consumers. Diversified operating models emerge in the industry and product structures are further
optimized.
3. Efforts are stepped up for equipment upgrading. 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), facial towels, etc. Specifics are given in the following:
(I) Household paper
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
smooth. It is the professional moisturizing facial tissue brand trusted by consumers.
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C&S Paper Co., Ltd. 2022 Annual Report
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”.
Cotton series: Soft and thick as cotton, the series have a fluffy feeling and are friendly to the skin. Adopting the
new generation of embossing technology, multiple embossing procedures and pure physical compound techniques,
the products feature beautiful embossing while locking air between the layers, which gives a lighter, fluffier and
thicker touch。
Sun series: Preferred raw material. Targeting at the youth market, the brand serves as a powerful supplement to
the Company’s primary brand “C&S”.
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 launched the new VI series for Dolemi pads in 2022, which includes two product series of True
Suction and Zero Feeling. The products are available through all channels to achieve omni retail. In addition, the
Company upgraded the Fantasy Maiden series to enhance the Dolemi brand.
(III) Quality health products
Clean and Soft Cleansing Towel Series: Dedicated to skin care, the products select quality plant fibers with
upgraded processes. They feature double-sided texture design, with one side for cleaning and one side for skin
care, thereby giving the skin a new and comfortable cleansing experience.
Silk Care Cleansing Towel Series: In cooperation with world-renowned quality fiber manufacturer, the products
carefully select quality plant fibers imported from Brazil and Indonesia. The fibers are then extracted into silk
through the wet spinning technique and woven into towels through the spunlace technique, hence giving a super
soft and resilient feeling. The products have passed the third-party skin irritation test with supreme care for the
skin.
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.
Antibacterial Series：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
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C&S Paper Co., Ltd. 2022 Annual Report
resistance and comfortable wearing”. In the future, C&S will continue to escort the breathing health of consumers.
Basic Wet Wipe Series: The products can address the pain points of different groups of people and different
purposes and can be used in various scenarios such as before or after meal, during trips, after exercise, outdoor,
etc. The plasma pure water is filtered by 8 processes, so it is skin-friendly and non-irritating. The products can
remove the sickness feeling of the skin and keep the skin clean and healthy.
Disinfection Wet Wipe Series: With 99.9% sterilization rate with physical sterilization, the products are
skin-friendly so that consumers can enjoy a healthy life. By adopting face-care grade fabric, the products can
create a safe and comfortable environment for the skin.
Maternal and Infant Wet Wipe Series: Along with the change of seasons, the Company finds that mothers
become more and more concerned about the hygiene problem of infants and children when going out. As a result,
the Company developed the hand and mouth cleansing wipes for babies. With the non-toxic and non-irritating
formula, moms can feel assured about the safety of their children.
Wet Toilet Paper Series: To address the pain points of users when going to the toilet, the Company specially
launched the wet toilet paper series that is sterilized against Staphylococcus aureus and Escherichia coli. By
selecting plant cellulose fibers and non-woven fabrics, the products not only do not block the toilet as being
environmental friendly and degradable, but also give a feeling of freshness to consumers.
(IV) Commercial channel products
Commercial channel products are also constantly upgraded and enriched along with market changes. In addition
to paper towels, small plate paper and napkins for traditional scenarios such as property cleaning, restaurants and
hotels, and high-traffic places, the Company also added series of products and supporting peripherals such as
toilet fragrances, hand sanitizers, disposable towels and bath towels and compressed towels. Moreover, the
Company is developing multi-functional paper towels. By focusing on optimizing customer experience and
meeting customer demands, the Company will continue to introduce cleaning and sanitation products with higher
quality. Considering the increasing needs of government departments, pubic institutions and enterprises for daily
necessities as welfare to employees, the Company also launched differentiated group-buying products through
online and offline channels, to meet market demands in an all-round manner.
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
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C&S Paper Co., Ltd. 2022 Annual Report
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, Northeast Asia, Oceania and North America. According to the 2022 China Consumer
Satisfaction Index for Household Paper prepared by the third-party agency CHNBRAND, C&S has ranked the
first for three consecutive years.
2. Constantly optimized product structure and continuously improved product competitiveness
The Company continued to optimize product structure and has positioned high-end, high-margin non-traditional
dry wipes as a strategic category that will be prioritized in the future. Efforts have been stepped up for the
terminal sales of the Oil Painting, Koi Fish, Face, 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.
As consumers pay more attention to own health protection, the demand for household paper takes on a
differentiated and high-end trend. The Company quickly grasped the market changes and introduced the
antibacterial series of masks, wet wipes and non-traditional dry towels such as portable products for business
travels.
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
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C&S Paper Co., Ltd. 2022 Annual Report
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
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, Tangshan Subsidiary and Dazhou C&S (under construction, not yet in production). 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. The Company has implemented strict
incoming quality control (IQC) procedures for raw materials to control the hygiene and quality of products from
the source. Moreover, manufacturing companies have passed the ISO9001 quality management system
certification and have set up the strictest inspection system for product quality. They have also adopted advanced
processes, formulas, and control procedures in production to effectively guarantee technical indicators.
7. Good R&D capabilities
16
C&S Paper Co., Ltd. 2022 Annual Report
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
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” and “carbon neutrality” 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
Given the complicated and ever-changing international and domestic situation coupled with the surge in the prices
of raw materials and the increasingly intensified market competition, the Company faced enormous operating
pressure in 2022. Against such a background, the Company forged ahead with high morale and responded
positively. Through a series of effective measures such as product price increase, category structure optimization,
channel adjustment, cost reduction and efficiency improvement, the operating efficiency was enhanced and the
operating pressure was eased to a certain extent, the Company maintains a competitive profit level. Under the
impact of domestic macroeconomic fluctuations as well as the strategy of product price increase, product category
17
C&S Paper Co., Ltd. 2022 Annual Report
and channel adjustment, sales of the Company would be affected in the short run. During the reporting period, the
Company recorded total revenue of RMB8.57 billion, down by 6.34% over the same period of previous year.
Affected by the rising pulp, packaging material and energy prices in the international market and the increase in
production costs, the net profit attributable to shareholders of the listed company was RMB350 million, a YoY
decrease of 39.77%.
Review of the Company's main operating conditions in 2022:
(1) Resolutely implement the strategy of product price increase and category structure adjustment to
maintain the overall profitability
Facing the sharp rise in the price of the raw material pulp during the reporting period, the Company firmly
implemented the strategy of product price increase and category structure adjustment. In addition, it continued to
increase the shares of high-end and high-margin products and non-roll paper categories by enhancing their
channel coverage and promotion efforts at terminals and improving their distribution and penetration. All these
efforts have maximized efficiency and helped the Company to maintain a competitive profit level.
(2) Adjust channel structure and dig deep into channels to lay a solid foundation for future development.
In order to consolidate the market foundation, the Company moves down to lower-tier markets and deepens the
channel network. During the reporting period, the Company actively optimized the channel structure and adjusted
some inefficient channels and markets with a purpose of improving the efficiency and effectiveness of resource
inputs. Meanwhile, seeing the changing consumer habits, the Company quickly adapted to market demands and
kept pace with the new consumption trend by increasing resource inputs into online channels. Moreover, the
Company continuously created single signature products to drive the continuous growth of high-end and
high-margin products.
(3) Carry out product iteration and make deployment in high-end markets to build the differentiated and
high-end brand image
In line with market developments and increasingly diversified product needs of consumers, the Company
upgraded and optimized product matrix and product sequences in various fields. All product design innovations
and iterations focused on upgrading product quality and user experience, and efforts were made to realize the
differentiated and high-end positioning of brands. In addition, the Company launched the Koi Fish series in 2022
to enrich the art series, and the Gilt series as well as the C&FACE series and derivative products to make layout in
the high-end market. All these have laid the foundation for long-term development.
(4) Optimize the remuneration system and talent development system to activate the new engine of
development.
The Company has carried out comprehensive optimization in 2022. In order to better implement the Company's
strategic goals, effectively activate organizations and individuals and achieve a win-win situation for the
Company and individuals, the Company further optimized the organizational structure and the rank and
18
C&S Paper Co., Ltd. 2022 Annual Report
remuneration system, and created a diversified comprehensive incentive mechanism that balanced fairness and
competition while taking motivation, economical efficiency and legality into consideration. This has fully
stimulated the enthusiasm and vitality of employees. In addition, the Company established an internal talent pool
for all levels and formulated an efficient talent echelon cultivation mechanism, which has helped to build a future-
and learning-oriented team and thereby activate the new engine of corporate development.
(5) Engage in public welfare undertakings and help those in need to fulfill corporate social responsibilities
of a national enterprise
The Company has been pursuing a green and sustainable development path with an adherence to the “seeking
green benefits and fulfilling corporate social responsibilities” philosophy ever since establishment. C&S has never
forgotten its original intention by actively engaging in public welfare undertakings and fulfilling corporate social
responsibilities. In 2022, the Company donated various supplies and materials with cumulative worth of over
RMB8 million to various regions across the country, including masks, household paper, disinfectant wipes,
sanitary pads, etc. The Company continued to sponsor the “C&S Cup” International Standard Dancing Open
Championship, with 21 wonderful events in Guangzhou, Shenzhen, Chongqing, Kunming, Jinan and other cities.
The activity not only facilitated the promotion of international standard dance across China, but also played a
positive role in building a harmonious society, promoting the booming of culture and enriching the cultural and
sports life of the public.
(6) Introduce the equity incentive plan to demonstrate its determination of building an enterprise worth
billions
In order to attract and retain outstanding talents, enable employees to share the achievements of corporate
development and enhance the sense of belonging of employees, the Company introduced the 2022 Stock Option
and Restricted Stock Incentive Plan, with more than 600 recipients. This is conducive to giving play to the core
role and values of employees, effectively combining the interests of shareholders, the Company and employees,
and promoting the continuous improvement of the Company’s performance.
2. Operating income and cost
(1) Composition of operating income
Unit: RMB
2022 2021
Proportion in Proportion in YoY changes
Amount Amount
operating income operating income
Total operating
8,569,694,360.65 100% 9,149,870,464.80 100% -6.34%
income
By industry
19
C&S Paper Co., Ltd. 2022 Annual Report
Household paper 8,350,198,393.95 97.44% 8,658,308,172.33 94.63% -3.56%
Personal care 50,703,281.38 0.59% 76,965,968.19 0.84% -34.12%
Others 168,792,685.32 1.97% 414,596,324.28 4.53% -59.29%
By product
Finished products 8,362,746,261.17 97.59% 8,713,110,024.38 95.23% -4.02%
Semi-finished
38,155,414.16 0.44% 22,164,116.14 0.24% 72.15%
products
Others 168,792,685.32 1.97% 414,596,324.28 4.53% -59.29%
By region
Domestic 8,364,917,807.64 97.61% 8,950,419,612.11 97.82% -6.54%
Overseas 204,776,553.01 2.39% 199,450,852.69 2.18% 2.67%
By sales model
Traditional 4,078,262,777.23 47.59% 4,391,370,600.48 47.99% -7.13%
Non-traditional 4,322,638,898.10 50.44% 4,343,903,540.04 47.48% -0.49%
Others 168,792,685.32 1.97% 414,596,324.28 4.53% -59.29%
(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 8,350,198,393.95 5,650,217,324.42 32.33% -3.56% 3.57% -4.66%
By product
Finished products 8,362,746,261.17 5,641,150,796.45 32.54% -4.02% 2.91% -4.55%
By region
Domestic 8,364,917,807.64 5,689,079,799.53 31.99% -6.54% -0.89% -3.88%
By sales model
Traditional 4,078,262,777.23 2,831,315,042.36 30.58% -7.13% -0.96% -4.32%
Non-traditional 4,322,638,898.10 2,844,002,854.66 34.21% -0.49% 7.63% -4.96%
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
20
C&S Paper Co., Ltd. 2022 Annual Report
(3) Whether the Company’s goods sales income is greater than the labor service income
√ Yes □ No
Industry Item Unit 2022 2021 YoY changes
Sales volume “0000” boxes 12,916.17 14,758.23 -12.48%
Household paper Production volume “0000” boxes 12,919.17 14,982.63 -13.77%
Inventory “0000” boxes 1,100.87 977.36 12.64%
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
2022 2021
Industry Item Proportion in Proportion in YoY changes
Amount Amount
operating cost operating cost
Principal business
Household paper 5,650,217,324.42 96.90% 5,455,519,068.17 93.05% 3.57%
cost
Principal business
Personal care 25,100,572.60 0.43% 45,603,186.25 0.78% -44.96%
cost
Other business
Others 155,734,068.25 2.67% 361,926,849.96 6.17% -56.97%
cost
Unit: RMB
2022 2021
Product Item Proportion in Proportion in YoY changes
Amount Amount
operating cost operating cost
Principal business
Finished products 5,641,150,796.45 96.74% 5,481,370,370.28 93.49% 2.91%
cost
Semi-finished Principal business
34,167,100.57 0.59% 19,751,884.14 0.34% 72.98%
products cost
Other business
Others 155,734,068.25 2.67% 361,926,849.96 6.17% -56.97%
cost
Description: None
21
C&S Paper Co., Ltd. 2022 Annual Report
(6) Whether there are changes to the consolidated scope during the reporting period
√ Yes □ No
As of December 31, 2022, the Company has 25 subsidiaries that are included in the consolidated scope, as
detailed in “Note IX. Equities in Other Entities”. Compared with last year, two subsidiaries have been newly
added into while five subsidiaries have 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) 2,638,321,657.50
Proportion of sales to top five customers in total annual
30.79%
sales
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 1,161,022,000.14 13.55%
2 2nd 657,003,630.89 7.67%
3 3rd 433,972,308.90 5.06%
4 4th 194,168,625.46 2.27%
5 5th 192,155,092.11 2.24%
Total -- 2,638,321,657.50 30.79%
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) 3,048,622,489.75
Proportion of the total purchase amount from the top five
53.81%
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
22
C&S Paper Co., Ltd. 2022 Annual Report
Information of the top five suppliers of the Company
Proportion in total annual purchase
No. Name of supplier Purchase amount (RMB)
amount
1 1st 1,426,670,961.95 25.18%
2 2nd 798,043,111.66 14.08%
3 3rd 458,755,198.51 8.10%
4 4th 217,358,895.17 3.84%
5 5th 147,794,322.46 2.61%
Total -- 3,048,622,489.75 53.81%
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
2022 2021 YoY changes Description of significant changes
Selling expenses 1,748,822,736.00 1,986,544,514.02 -11.97%
Administrative expenses 372,091,457.41 341,144,204.30 9.07%
Financial expenses: This item recorded
a decrease of RMB24,755,214.49 or
340.93% in the reporting period
Finance expenses -32,016,388.68 -7,261,174.19 -340.93% compared with the same period in
2021, mainly owing to the decrease in
exchange losses and gains during the
reporting period.
R&D expenses 203,883,267.90 211,964,212.18 -3.81%
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
Upgrade the product,
The product has been Cotton-like touch, cloud-like Enrich product categories and
R&D of soft cotton enhance consumer
successfully softness, good looking, soft, improve product
rolls/facial tissues experience, and improve
launched. fluffy and skin-friendly competitiveness.
appearance.
The product is R&D has made The product is positioned at As a leading high-end product
R&D of characterized by softness progress and the high-end as it is soft and in the industry, the product
extravagant rolls that can be clearly performance test has extravagant and will be a will lead the consumption
perceived by consumers. been completed. good choice for high-end trend of the roll paper
23
C&S Paper Co., Ltd. 2022 Annual Report
consumers. category.
1. High cost-effective product
is prone to win over
consumers and increase repeat
Adopting unique
R&D has made purchase rate.
processes, the product The use experience reaches
progress and the 2. The energy consumption is
R&D of TAD-like achieves performance 85% of TAD with excellent
performance test and much lower than that of TAD,
kitchen towels indicators and technical physical indicators, quality
consumer test have which is in line with the
requirements close to and cost advantages.
been completed. national guideline of
TAD.
low-carbon policies and
achieves environmental
benefits.
Improve the water
One piece of the product can
R&D of a new absorption speed and The product has been The product is welcomed by
completely dry the hands; the
generation of paper capacity of paper towels successfully consumers, especially
product is thick, comfortable
towels while being skin friendly launched. commercial channels.
and not easy to break.
and comfortable.
R&D has made
Improving the The product features As a high-quality product, it
progress and the The smoothness of the paper
quality of premium smoothness and is expected to become one of
performance test and is further improved while
removable facial softness, with silk-like the Company's high-margin
consumer test have maintaining a soft touch.
towels texture. products.
been completed.
The strength of the
product remains The paper roll
unchanged but the product has been
The paper is thicker and Improve quality, increase
Improve the quality softness and thickness successfully
smoother, hence enhancing efficiency and reduce costs,
of the Oil Painting have been improved; the launched and
the high-end image of the and enhance product
series optimized processes can progress has been
product. competitiveness.
help improve the made in the R&D of
efficiency and reduce paper handkerchiefs.
costs of the product.
With imported moisturizing
Optimize the factors, the softness and
performance indicators skin-friendliness of the The product is specially
Upgrading the
and upgrade the In progress product is upgraded. The customized for mothers and
Lotion series
experience of the water absorption speed infants.
product. becomes 1.5 times, so it can
quickly dry baby's saliva.
The laboratory scale
test and pilot scale The product is extremely
Launch the softest
R&D of silk-like production have been Domestically leading and competitive and has core
spunlace non-woven
technologies completed; invention super soft technologies (invention
products in the industry.
patent is being patent).
applied.
Information on R&D personnel of the Company
2022 2021 Change ratio
Number of R&D personnel 415 409 1.47%
Proportion of R&D personnel 6.26% 5.81% 0.45%
Educational structure of R&D
—— —— ——
personnel
Bachelor 53 69 -23.19%
24
C&S Paper Co., Ltd. 2022 Annual Report
Master 0 1 -100.00%
Associate degree and lower 362 339 6.78%
Age structure of R&D
—— —— ——
personnel
Under 30 87 95 -8.42%
30~ 40 195 190 2.63%
Above 40 133 124 7.26%
R&D investment of the Company
2022 2021 Change ratio
Amount of R&D investment
203,883,267.90 211,964,212.18 -3.81%
(RMB)
Proportion of R&D investment
2.38% 2.32% 0.06%
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 2022 2021 YoY changes
Sub-total of cash inflow from
8,799,986,884.48 9,097,936,828.93 -3.27%
operating activities
Sub-total of cash outflow from
8,408,293,872.11 7,778,357,222.10 8.10%
operating activities
Net cash flow from operating
391,693,012.37 1,319,579,606.83 -70.32%
activities
Sub-total of cash inflow from
84,573,787.30 61,466,670.02 37.59%
investing activities
Sub-total of cash outflow from 559,291,673.55 708,619,852.14 -21.07%
25
C&S Paper Co., Ltd. 2022 Annual Report
investing activities
Net cash flow from investing
-474,717,886.25 -647,153,182.12 26.65%
activities
Sub-total of cash inflow from
1,019,654,678.68 222,066,759.33 359.17%
financing activities
Sub-total of cash outflow from
516,096,786.00 1,141,254,963.40 -54.78%
financing activities
Net cash flow from financing
503,557,892.68 -919,188,204.07 154.78%
activities
Net increase in cash and cash
451,100,348.89 -252,236,460.02 278.84%
equivalents
Major influencing factors for significant YoY changes in relevant data
√ Applicable □ Not applicable
1. Net cash flow from operating activities: This item recorded a decrease of RMB927,886,594.46 or 70.32% in the
reporting period compared with 2021, mainly owing to the increase in material payment during the reporting
period.
2. Net cash flow from financing activities: This item recorded an increase of RMB1,422,746,096.75 or 154.78%
in the reporting period compared with 2021, mainly owing to the increase in cash received from borrowings and
the decrease 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?
Mainly for the purchase of forward settlement and
Investment income -848,575.30 -0.21% sales of foreign exchange, and the maturity income of No
financial products
Profit and loss from
changes in fair 0.00%
value
Provision for impairment of inventories or fixed
Asset impairment -20,244,984.39 -4.95% No
assets
Non-operating 17,028,310.82 4.16% Income from fine and compensation, others, and No
26
C&S Paper Co., Ltd. 2022 Annual Report
income government grants
Non-operating
8,418,061.77 2.06% External donations and others No
expense
VI. Analysis of Assets and Liabilities
1. Significant changes in the composition of assets
Unit: RMB
End of 2022 Beginning of 2022
Proportion Proportion Proportio
Description of significant changes
Amount in total Amount in total n changes
assets assets
Monetary funds: This item recorded an
increase of RMB449,735,048.37 or
51.40% in the reporting period
Monetary funds 1,324,787,541.49 15.89% 875,052,493.12 11.63% 4.26%
compared with the beginning of 2022,
mainly owing to the increase in
borrowings during the reporting period.
Accounts
1,084,130,138.51 13.01% 1,177,831,399.28 15.66% -2.65%
receivable
Inventory: This item recorded an
increase of RMB443,999,206.60 or
30.25% in the reporting period
Inventory 1,911,630,723.55 22.93% 1,467,631,516.95 19.51% 3.42% compared with the beginning of 2022,
mainly owing to the increase in
inventory and raw material during the
reporting period.
Investment
31,701,597.54 0.38% 33,138,481.74 0.44% -0.06%
property
Fixed assets 3,013,559,312.97 36.16% 3,129,371,506.40 41.60% -5.44%
Construction
142,627,123.42 1.71% 134,875,696.94 1.79% -0.08%
work in progress
Right-of-use assets: This item recorded
a decrease of RMB4,542,237.35 or
31.76% in the reporting period
Right-of-use compared with the beginning of 2022,
9,758,283.42 0.12% 14,300,520.77 0.19% -0.07%
assets mainly owing to the decrease in the use
rights assets recognized under the new
leasing standards during the reporting
period.
Short-term borrowings: This item
Short-term 607,799,222.62 7.29% 0.00% 7.29%
recorded an increase of
27
C&S Paper Co., Ltd. 2022 Annual Report
borrowings RMB607,799,222.62 or 100.00% in the
reporting period compared with the
beginning of 2022, mainly owing to the
increase in short-term loans from banks
during the reporting period.
Contract liabilities：This item recorded
a decrease of RMB67,778,498.40 or
41.24% in the reporting period
Contract
96,581,944.94 1.16% 164,360,443.34 2.18% -1.02% compared with the beginning of 2022,
liabilities
mainly owing to the decrease in
advance payments from customers
during this reporting period.
Lease liabilities: This item recorded a
decrease of RMB4,762,048.84 or
85.56% in the reporting period
Lease liabilities 803,879.30 0.01% 5,565,928.14 0.07% -0.06% compared with the beginning of 2022,
mainly owing to the decrease in rented
houses and buildings 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, 2022 Reason for restriction
Monetary funds (RMB) 75,889,516.90 Security deposits for issuing letter of credit and notes
Total (RMB) 75,889,516.90
VII. Analysis of Investment
1. Overview
√ Applicable □ Not applicable
Investment amount during the reporting Investment amount of previous year
Changes
period (RMB) (RMB)
559,291,673.55 708,619,852.14 -21.07%
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C&S Paper Co., Ltd. 2022 Annual Report
2. Major equity investment during the reporting period
□ Applicable √ Not applicable
3. Major non-equity investment during the reporting period
□ Applicable √ Not applicable
4. Financial asset investment
(1) Security investment
□ Applicable √ Not applicable
The Company did not invest in securities during the reporting period.
(2) Derivative investment
√ Applicable □ Not applicable
1） Derivatives investments for hedging purposes during the reporting period
√ Applicable □ Not applicable
Unit: RMB10,000
Accumu Proportion of the
Amount
lated Amount investment
Initial Profit or loss from bought
changes sold Investment amount at the end
investm changes in fair in
Type in fair during amount at the end of the period in
ent value of the during
value the of the period the Company’s net
amount period the
included period assets at the end of
period
in equity the period
Put option 0 -83.45 0 3,567.5 3,567.5 0 0.00%
Total 0 -83.45 0 3,567.5 3,567.5 0 0.00%
Whether there are significant changes to
the accounting policies and specific
accounting principles for derivatives None
during the reporting period compared
with previous reporting period
Explanation on actual profit or loss The Company’s forward foreign exchange sale and purchase business recorded an actual loss of
during the period RMB834,500 during the reporting period.
The Company has carried out the forward foreign exchange sale and purchase business for the
purpose of hedging based on the principles of legal compliance, prudence, security and
effectiveness. It does not engage in speculative and arbitrage trading operations. All derivatives
Explanation on the effects of hedging
investments are based on the normal production and operation of the Company with a view to
locking the exchange rate and reducing the impact of exchange rate fluctuations on the
Company’s business performance. The Company has carried out the hedging business in strict
29
C&S Paper Co., Ltd. 2022 Annual Report
accordance with the foreign exchange amount it holds, so the overall risk is controllable
Source of fund Self-owned fund
Risk analysis: 1. Price fluctuation risk: Price fluctuations of underlying interest rates and
exchange rates may lead to price changes of the financial derivatives, thereby causing losses; 2.
Internal control risk: Derivative trading is highly specialized and complicated, which may
result in risks arising from poor internal control; 3. Liquidity risk: Transaction may become
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
Risk analysis and control measures of
laws and regulations such that the contract cannot be normally executed, causing losses to the
derivative positions during the reporting
Company.
period (including but not limited to
Control measures: 1. Select financial derivatives with strong liquidity and controllable risks for
market risks, liquidity risks, credit risks,
trading; 2. Derivative trading should follow the primary principle of hedging for risks caused
operational risks and legal risks)
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 Given that the subject of the Company's hedging transactions is forward foreign exchange
derivatives should disclose the specific settlement, the fair value is determined based on foreign exchange rate.
methods used as well as the setting of
relevant assumptions and parameters
Litigation involved (if applicable) None
Disclosure date of the announcement
regarding the Board’s approval of December 1, 2021
derivative investment (if any)
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.
2） Derivatives investments for speculative purposes during the reporting period
□ Applicable √ Not applicable
The Company did not engage in any derivatives investments for speculative purposes during the reporting period.
30
C&S Paper Co., Ltd. 2022 Annual Report
5. Use of raised funds
□ Applicable √ Not applicable
No raised funds were used by the Company during the reporting period.
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
31
C&S Paper Co., Ltd. 2022 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: RMB10,000
Company Company Registered Total Operating Operating
Principal businesses Net assets Net profit
name type capital assets income profit
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
Jiangmen (including online sales) of Class I and II medical devices. (The above items do not involve
Subsidiary 34,598.5032 193,854.19 145,641.33 153,503.31 4,744.37 4,609.93
C&S special 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 materials and products, daily sundries, and
disinfection supplies (excluding hazardous chemicals); wholesale, retail and online sales: food;
Yunfu
Subsidiary import and export of goods and technologies (excluding the import and export of goods and 65,000 240,329.42 138,667.37 310,946.44 20,792.38 18,002.59
C&S
technologies prohibited by the State or involving administrative approval); warehousing
services (limited to warehouses qualified in fire protection without hazardous chemicals). (For
items that must be approved in accordance with the law, the company may carry out business
operations upon approval by 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
Sichuan
Subsidiary business items are subject to the approval document or the permit issued by relevant 10,000 110,742.78 66,097.51 196,279.78 8,463.82 7,207.69
C&S
department). General items: sales of sanitary products and disposable medical supplies; sales
of personal hygiene products; sales of daily necessities; manufacture of paper products; sales
of paper products; manufacture of paper; manufacture of daily chemical products; sales of
32
C&S Paper Co., Ltd. 2022 Annual Report
daily chemical products; sales of Class II medical devices; sales of Class I medical devices;
manufacture of industrial textile products; sales of industrial textile products; manufacture of
maternal and infant products; sales of maternal and infant products. (The company may carry
out business operations independently according to the law based on the business license,
except for items that must be licensed according to the law.)
Licensed items: production of sanitary products and disposable medical supplies; production
of cosmetics (for items that must be approved in accordance with the law, companies may
carry out business 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
Hubei knitwear; manufacture of maternal and infant products; sales of maternal and infant products;
Subsidiary 20,000 185,310.08 50,364.50 190,485.18 5,671.71 4,256.21
C&S 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.)
Acquisition and disposal of subsidiaries during the reporting period
□ Applicable √ Not applicable
33
C&S Paper Co., Ltd. 2022 Annual Report
X. Structured Entities Controlled by the Company
□ Applicable √ Not applicable
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.
34
C&S Paper Co., Ltd. 2022 Annual Report
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
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. The
pulp price has surged in 2022 under the impact of major international events such as the conflict between Russia
and Ukraine, the European energy crisis, and volatile geopolitical relations. Pulp is the primary raw material of the
Company’s production, accounting for 40%-60% of the total production costs. Therefore, substantial fluctuations
in pulp prices pose a risk to the Company.
The Company is equipped with a professional procurement team which, on the premise of ensuring normal
production inventory, adjusts the purchase rhythm by professionally evaluating the future trend of pump boards
and coordinating the market conditions of international pulp prices. The Company has cemented long-term supply
contracts with pulp suppliers that have large production scale, abundant forest resources and advanced production
technologies to ensure stable raw material procurement. It has established a global procurement network with
purchases in Europe, North America, South America, etc.
2. Risk of exchange rate fluctuation
The import of machinery equipment and pulp and the export of products to overseas market of the Company are
35
C&S Paper Co., Ltd. 2022 Annual Report
mainly settled in USD, HKD, and EUR. Since exchange rates fluctuate under the impact of the international
economic situation, the Company faces exchange rate risks.
The Company pays close attention to changes in the foreign exchange market on a daily basis and hedges against
exchange losses brought by RMB depreciation or two-way fluctuations by adjusting the structure of foreign
currency assets and liabilities and reducing overall foreign currency liabilities. In addition, the Company started to
adopt the spot selling rate accounting for foreign currency transactions since 2015 in accordance with its actual
needs and in compliance with foreign exchange requirements. In this way, the Company may choose to buy
foreign currency and pay for the goods at a rate favorable to the Company at an appropriate time. Furthermore, the
Company hedges against and avoids exchange rate risks via centralized management of foreign exchange funds,
purchase payment hedging, etc. based on changes in the foreign exchange market and actual development of the
Company. With regard to exchange rate risk exposure, the Company also uses hedging and other financial tools to
conduct reasonable risk management.
3. Risk of regional market competition
Household paper is a vast market in China in terms of both geography and market space. Given the low unit value,
transportation expenses taking up a large part of the sales price, and limitations of the transportation radius, the
main competition in the household paper industry lies in regional markets. High-end, mid-end, and low-end
products compete in regional markets, with the influence of spending power and consumption habit. Judging from
the development trend of the industry, mid- and high-end household paper of national brands has more
competitive edge. However, at present, some regional brands have an advantage in some regional markets.
Compared with overseas counterparts, China’s household paper industry requires continued integration. The
Company embraces production bases and a sales network across the country and offers mid- and high-end
products under national brands. Nevertheless, it is inescapable from the risk of regional market competition.
After years of development, the Company has become one of the leading companies in the domestic household
paper industry. It has built a marketing network covering most prefecture (county) level cities and a production
base with national presence. As a result, transportation costs can be effectively reduced and transportation
efficiency effectively improved by shorting the distance with consumers. As the Company continues to deepen
and expand sales channels, it will gradually cover untapped outlets. In the future, in response to market
competition, the Company will strengthen channel sinking, increase market penetration, further expand its scale,
and further improve its overall market competitiveness and shares.
4. Risk of industrial policies
Stricter requirements have been raised for the papermaking industry in the aspects of scale, technology, equipment,
and environmental protection, as multiple industry plans and supporting policies have been successively issued by
relevant departments, including the Papermaking Industry Development Policy, the Notice on the Management of
36
C&S Paper Co., Ltd. 2022 Annual Report
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.
In the face of increasing stringent environmental protection policies, as a responsible domestic enterprise in the
household paper industry, the Company and its subsidiaries strictly abide by environmental protection laws and
regulations of the state and local governments. Production bases are equipped with state-of-the-art papermaking
equipment, processing equipment and environmental protection treatment equipment and facilities, and adopt
advanced environmental protection technologies. With continuous capital and technological inputs and
improvement in pollution control of the production process, the Company strives to reduce environmental
pollution and ensure green production. The Company will continue to optimize production efficiency in response
to requirements of national industrial policies.
5. Risk of safe production
Most of the materials involved in the household paper industry are flammable, including the main raw material of
pulp, the main packing materials of plastic-film packing bags and cartons, the semi-finished product of body paper,
and finished products. Due to the characteristics of low unit value and large market consumption, household paper
manufacturers have to keep a mass of pulp, packing materials, and semi-finished and finished products from the
entry of raw materials into the plant to the delivery of products to the market. Thus, fire can cause enormous
losses to such manufacturers. In addition, a large number of production lines have been put into use, which may
pose certain occupational health hazard and cause harm to the occupational health of employees.
In view of this, the Company has formulated strict fire management regulations for raw materials and
semi-finished and finished products, established a full-time safety management department, equipped adequate
fire protection equipment in production areas, and bought full insurance for risky properties. As such, the
Company’s fire safety risk is low. In response to possible occupational health hazards, the Company, at the
37
C&S Paper Co., Ltd. 2022 Annual Report
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.
38
C&S Paper Co., Ltd. 2022 Annual Report
XII. Reception of Researches, Communications, Interviews and Other Activities
√ Applicable □ Not applicable
Type of Main content
Reception Reception Reception Index of the basic situation
reception Reception object discussed and
time location method of the survey
object information provided
Changjiang Securities, KingTower AM, Panhou Dynamic, Soochow Fund, Wanjia
Fund, Chengan Assets, Taiping Pension, Changsheng Fund, Xiangcai Fund, Jiangsu
Ruihua, GF Securities, Bank of China Asset Management, Changjiang Pension,
Schroders, Sunshine Insurance, Shanghai Ivy Assets Management, Silver Lake Fund,
DAPU Asset Management, Duoxin, Cinda Australia Bank Fund, Generali China,
Hawthorn Asset Management Center, CITIC Wealth, China Foreign Economy and
Trade Trust, China Capital Management, CMB Wealth Management, Evergrande
Life, Bohai Securities, Focus Bridge, Nord Fund, Rabbit Fund, China Post Life
Insurance, CICC Asset Management, Horizon Asset, Bank of Hangzhou, Ping An
Pension, Wealspring Asset, Guojin Asset Management, Penghua Fund, Guohai Asset
Management, Taikang Pension, Zheshang Securities Self-trading Unit, CITIC Asset
Management, China Securities Self-trading Unit, Shenwan Hongyuan Securities
Asset Management, Yingda Insurance Asset Management, Everbright Securities Details can be found in the
Asset Management, Guohua Life, STAROCK Investment, Tianshan Aluminum, 002511 Zhongshun Jierou
Status quo and future
January 17, Telephone Fupei Investment, Foresight Investment, Yinhua Fund, Essence Securities Asset Research Activity
/ Institution Management, BOC Wealth Management, CITIC Self-trading Unit, China Nature development plan of
2022 communication Information 20220119 on
Asset Management, ICBC-AXA, Shenzhen Daoyi, CCB Asset Management, Yingda the Company
Securities, Hexi Capital, Heju Investment, ICBC Credit Suisse, Taiping Fund, Huatai CNINFO
Baoxing, Dajia Asset Management, Tiger Pacific Capital, Hangzhou Xi’an (http://www.cninfo.com.cn) .
Investment, TF Asset Management, ABC-CA Fund Management, Huafu Fund,
Industrial Securities Asset Management, Chang’an Fund, Xiansheng Investment,
TEDA Manulife, Chaos Investment, Orient Securities Self-trading Unit, AXA SPDB
Investment, CR Yuanta Fund Management, Huatai Asset Management, Bank of
Communications Schroders, Huisheng Fund, Jing’an Investment, TruValue Asset
Management, Sino Life Asset, Eastern Marathon, Dacheng Fund, Shanghai
Securities Self-trading Unit, Essence Securities Self-trading Unit, CoStone Capital,
Ping An Fund, Great Wall Fund, Galaxy Fund, China Asset Management, West Lead
Fund, Shanshi Fund, GF Fund, Changxin Fund, Golden Trust Sinopac Fund
Management, BOSC Asset, PUREKIND Fund, Industrial Securities Global, China
Universal Fund, Southern Asset Management, Luojia Fangyuan AM, CIMF Morgan
Asset Management, Kaiyuan Securities, Caitong Asset Management, Zheshang
39
C&S Paper Co., Ltd. 2022 Annual Report
Securities, Orient Securitie Asset Management, Nanjing Harbour, JT Asset
Management, Capital Securities, Nuochang Investment, China Europe Fund, Ruitian
Capital, First-Trust Fund, Pengshan Partners, Yude Capital, Fidelity, 3W Fund,
Chasing Securities, Zhongrong Fund, Hongcheng Capital, Franklin Templeton,
China Merchants Securities, China Life Pension, HFT Investment Management,
Cinda Australia Bank Fund, Pramerica FOSUN, China Universal Fund, Rongyuan
Investment, East Money Fund, Intewise Capital, Chongyang InvEstment, Jing’an
Investment, Asia Pacific Property Insurance, CICC Asset Management, Kingsun
Investment, Ruiyi Investment, Optimas
Details can be found in the
Fidelity Mgmt Research、Point72、Earnest Partners、Fidelity Mgmt Research、 Status quo and future 002511 Zhongshun Jierou
January 18, Telephone Research Activity
/ Institution Aspoon、Invesco、Springs capital、Polymer Capital、Springs capital、Altazero development plan of
2022 communication Information 20220119 on
Capital、Balyasny、Mighty Divine the Company CNINFO
(http://www.cninfo.com.cn) .
Details can be found in the
CIB Wealth Management, JT Asset Management, Dongxing Asset Management
Status quo and future 002511 Zhongshun Jierou
February Telephone Hong Kong, Orient Securities, Great Wall Securities, Orient Fund, Galaxy Fund, Research Activity
Shanghai Institution development plan of
17, 2022 communication New China Fund, GH Shining Asset Management, Caitong Securities, AEGON Information 20220613 on
the Company CNINFO
Fund, AJ Securities
(http://www.cninfo.com.cn) .
Grandblue Environment, Shanxi Securities Asset Management, Southern Asset
Management, Zheshang Securities Self-trading Unit, Chengan Assets, Point72,
China Europe Fund, Pioneer Fund, Nord Fund, Great Wall Wealth Asset
Management, Xiangcai Fund, China Asset Management, Industrial Bank Wealth
Details can be found in the
Management, CIB Fund, Lion Fund, Broad Fund, Hangzhou Fuxian, Shanghai
Status quo and future 002511 Zhongshun Jierou
April 27, Telephone Guandao Asset Management Co., Ltd., Pinpoint, Manulife, Tian'an Life, Baixi Research Activity
/ Institution development plan of
2022 communication Assets, JT Asset Management, Hawthorn Asset Management Center, Zheshang Information 20220429 on
the Company CNINFO
Securities Asset Management, Zeyuan Capital, CITIC Asset Management, Yellow
(http://www.cninfo.com.cn) .
River Property & Casualty Insurance, Wanjia Fund, Industrial Securities Global,
Kane Investment, Pinpoint Investment, CR Assets Investment, Jianghai Securities,
CS Richland Asset, China Capital Management, Orient Fund, Jiufu Fund, Tongtai
AMC, Baoying Fund
April 28, / Telephone Institution China Merchants Securities, Dacheng Fund, BOSC Asset, Ping An UOB Fund, Status quo and future Details can be found in the
40
C&S Paper Co., Ltd. 2022 Annual Report
2022 communication Guanfu (Beijing) Asset Management Co., Ltd., Jiangsu Dazheng Shifang Equity development plan of 002511 Zhongshun Jierou
Research Activity
Investment Fund Management Co., Ltd., Zhongtai Asset Management, Fosun Group the Company
Information 20220429 on
Investment Department, TCL Fund, Shanghai Shuda Asset Management Co., Ltd., CNINFO
FountainCap Research & Investment Co., Ltd., Yinhua Fund Management, Shenzhen (http://www.cninfo.com.cn) .
Qianhai Hefeng Zhengze Asset Management Co., Ltd., Taikang Pension Insurance
Co., Ltd., AXA SPDB Investment Managers, Hongde Fund, Qian Hai Life Insurance,
Knight Investment, Orchid Asia, Pengtai Investment, Anhe Capital, Yingda
Securities Co., Ltd., Dawning Group, Junhong Asset Management, Yuhui Capital
Management, TruValue Asset Management, Beijing Tengye Capital Management
Co., Ltd., Mbestway (Beijing) Management Softwae Co., Ltd., Banyan Partners,
Shangjin Investment, Industrial Bank Wealth Management, Wangzheng Capital,
Atlantis Investment Management, Xijing Investment, Mars Assets, CS Richland
Asset, Zhongzhi Qixing Investment Management Co., Ltd., GTS Fund, Gopher Asset
Management, Guangdong Wens Investment Co., Ltd., Ruiwen Securities Fund
Management, Changan Assets, CITIC Securities Co., Ltd., Hezhong Assets, Hainan
Xinyan Equity Investment Fund Management Co., Ltd., BOC Investment
Management, Sinosafe Assets, Beijing Chengsheng Investment Management Co.,
Ltd., Aspoon Capital, Xincheng Fund, E Fund, China Resources and Environment
Co., Ltd. (Investment Department), Dongcai Fund , Founder Fubon Fund,
AEGON-Industrial Fund, Finsights Fund, Shenzhen Bright Capital, Beijing Yutian
AMC, BOC International Asset Management Department, Financial Management
Consultant, Guolian Securities (Asset Management), Huizhou Nanfang Ruitai Fund
Management Co., Ltd., Aotianqi Investment, Beijing Dadao Xingye Investment
Management Co., Ltd., China Securities, Shenzhen Shangcheng Assets Co., Ltd.,
Curvet Capital, Xingyun Investment, FT Life
Details can be found in the
Status quo and future 002511 Zhongshun Jierou
May 17,
/ Other Personals Investors attending the online meeting of 2021 annual report briefing development plan of Research Activity
2022
the Company Information 20220119 on
CNINFO
41
C&S Paper Co., Ltd. 2022 Annual Report
(http://www.cninfo.com.cn) .
Details can be found in the
002511 Zhongshun Jierou
PRUDENCE INVESTMENT MANAGEMENT、HD CAPITAL、PARTNERS BAY、Status quo and future Performance Explanation
June
Shenzhen Other Institution DALTON INVESTMENT GROUP、LIBRARY RESEARCH、WT Capital、Infore development plan of Meeting and Roadshow
9,2022
Capital、ZHONGTAI INTERNATIONAL、Morgan Stanley the Company Activity Information
20220518 on CNINFO
(http://www.cninfo.com.cn) .
CITIC Futures, ABC Life, All Asset, Tian An Life, Franklin Templeton Investments,
Comein Finance, Bin Yuan Capital, ZTF Securities, CIB Fund, Zhonggeng Fund,
Zige Investment, Zheshang Securities Self-trading Unit, Soochow Securities, CIB
Wealth Management, Everbright Prudential, Hexi Capital, China Securities
Self-trading Unit, Changjiang Asset Management, C. Fund, Harvest Forever, Essence Details can be found in the
Securities Self-trading Unit, Shanghai Chanceshine Asset Management, Essence 002511 Zhongshun Jierou
Status quo and future
July 14, Telephone Securities Self-trading Unit, Guotai Junan Securities Asset Management, Shanghai Research Activity
/ Institution development plan of
2021 communication Tianyi Investment, Chongyun Investment, Shanghai Guandao Asset Management Information 20220715 on
the Company
Co., Ltd., CITIC Futures, Zhongtai Securities Asset Management, S-Land Asset, WT CNINFO
Asset Management, AJ Securities Self-trading Unit, Zhongzhi Qixing Investment (http://www.cninfo.com.cn) .
Management Co., Ltd., CS Richland Asset, Pinpoint Investment, Huatai Baoxing
Fund Management, Fullerton Investment, GF Shining Asset Management, Western
Securities Self-trading Unit, Horizon Asset, Changjiang Asset Management,
Industrial Securities Global, PV Capital, DEShaw, Granford Capital
Goldman Sachs Gao Hua Securities, China Merchants Securities, Hangzhou Fortune,
Details can be found in the
China Southern Asset Management, Cinda Securities Self-trading Unit, GFUND
002511 Zhongshun Jierou
Wealth, Golden Trust Sinopac Fund Management, CIB Wealth Management, Ping Status quo and future
August 30, Telephone Research Activity
/ Institution An Pension, Founder Fubon, Taikang, HSBC Jintrust, Dongxing Securities, Baijia development plan of
2022 communication Information 20220901 on
Funds, Kaishi Fund, Hua Chuang Securities, Soochow Securities Research Institute, the Company
CNINFO
China Merchants Securities, Zheshang Securities Self-trading Unit, Xiangcai Fund,
(http://www.cninfo.com.cn) .
ZTF Securities Self-trading Unit, CITIC Securities Self-trading Unit, TEDA
42
C&S Paper Co., Ltd. 2022 Annual Report
Manulife, Springs Capital, Great Wall Fund, Xinyuan Asset Management, Bosera
Fund, AJ Securities Self-trading Unit, Huashang Fund, Qian Hai Life Insurance,
Intewise Capital, West Lead Fund, CITIC Prudential, Huian Fund, Western Securities
Self-trading Unit, Shanda Capital, Orient Securities Self-trading Unit, Guohai Asset
Management , CITIC Capital, CS Richland Asset, Hony Vision, CITIC Securities,
Green Fund, BOC Group Investment Limited, Tianhong, Anxin Fund, Everbright
Prudential Fund Management Co., Ltd., Granford Capital, Huishang Bank Wealth
Management, Citibank, Pinpoint Investment, MacroPolo, Teng Yue Partners,
Point72, Fountain Cap, Power Pacific
Zheshang Securities, CIB Fund, Springs Capital, Xiansheng Investment, Ping An
Fund, Zheshang Securities Asset Management, Ren Bridge Assets, TruValue Asset Details can be found in the
Management, Hanchuan Investment, Taiping Fund, Huatai Securities Self-trading 002511 Zhongshun Jierou
Status quo and future
August 31, Telephone Unit, Purest Assets, Panhou Dynamic Capital Management, Tenbagger Capital, Research Activity
/ Institution development plan of
2022 communication Haitong Securities Self-trading Unit, Dajia Asset Management, TF Securities Asset Information 20220901 on
the Company
Management, Mingyu Capital, Pearl River Investment, Huatai Securities Asset CNINFO
Management, Hehe Investment, GH Shining Asset Management, Taikang Asset (http://www.cninfo.com.cn) .
Management, Seastar Asset, Jiufang Intelligent Investment
Details can be found in the
Guosheng Securities, China Merchants Fund, Lion Fund, GH Shining Asset
002511 Zhongshun Jierou
Management, Rongtong Fund, Caitong Fund, Changan Fund, Huisheng Fund, Status quo and future
September Telephone Research Activity
/ Institution Kuantan Capital, Huashang Fund, Pengyang AMC, Taikang Asset Management, development plan of
1, 2022 communication Information 20220901 on
Huamei International, Everbright Asset Management, TEDA Manulife, TruValue the Company
CNINFO
Asset Management, Kaishi Fund
(http://www.cninfo.com.cn) .
Details can be found in the
CITIC Securities, ICBC-AXA, Tenbagger Capital, Wiling Cap, Lazard, Horizon 002511 Zhongshun Jierou
Status quo and future
September Telephone Asset, Sumitomo Mitsui DS, Point72, Neo-Criterion Capital, Fullgoal Fund Research Activity
/ Institution development plan of
6, 2022 communication Management, Power Pacific, WT Asset Management, FountainCap Research & Information 20220909 on
the Company
Investment CNINFO
(http://www.cninfo.com.cn) .
43
C&S Paper Co., Ltd. 2022 Annual Report
Details can be found in the
Status quo and future 002511 Zhongshun Jierou
Changjiang Securities, HFT Fund, Huabao Fund, Everbright Prudential, Dajia
September Telephone Research Activity
/ Institution Assets, ABC-CA Fund Management, China Southern Asset Management, Huashang development plan of
9, 2022 communication Information 20220909 on
Fund, Huian Fund the Company CNINFO
(http://www.cninfo.com.cn) .
Details can be found in the
Status quo and future 002511 Zhongshun Jierou
September Research Activity
/ Other Personals Investors attending the Investor Reception Day development plan of
22, 2022 Information 20220923 on
the Company CNINFO
(http://www.cninfo.com.cn) .
CPE Asset, New China Fund, Everbright Securities, CIMF Morgan Asset
Management, GH Shining Asset Management, Goldman Sachs Gao Hua Securities,
Founder Fubon, Dongxing Securities, Essence Securities, Kaiyuan Securities,
Zheshang Securities Self-trading Unit, Harvest Forever, CITIC Securities, Kaishi
Fund, Huachuang Securities Light Industry, Green Fund, Taikang Asset
Details can be found in the
Management, Industrial Securities Global, Broad Fund, China Post Securities,
Status quo and future 002511 Zhongshun Jierou
October Telephone Everbright Securities Asset Management, Citibank, China Europe Fund, Xinghua Research Activity
/ Institution development plan of
25, 2022 communication Fund, Zhongan Insurance, Jiutai Fund, Guosen Securities, Xinyuan Asset Information 20221027 on
the Company CNINFO
Management, Harford Funds, Kane Investment, Taiping Fund, Huashang Fund,
(http://www.cninfo.com.cn) .
TruValue Asset Management, Great Wall Fund, Yingda Securities Self-trading Unit,
Shanghai Tianyi Investment, BOSC Asset, Furui Jiacheng Investment Management,
Ping An Fund, Sun Life Everbright Life, Guotai Junan Securities, Cinda Securities,
Zhongtai Securities, Minsheng Securities, Pinpoint Investment, Morgan Stanley,
Point72, Teng Yue Partners
Details can be found in the
002511 Zhongshun Jierou
Changjiang Securities, Rongtong Fund, Harvest Fund, Penghua Fund, Dacheng Status quo and future
November Research Activity
Zhongshan Field research Institution Fund, Cinda Australia Bank Fund, China Merchants Fund, Zhongrong Fund, Qianhai development plan of
16, 2022 Information 20221118 on
Alliance Asset Management, Springs Capital the Company
CNINFO
(http://www.cninfo.com.cn) .
44
C&S Paper Co., Ltd. 2022 Annual Report
Dongxing Securities Fund, Debon Fund, Penghua Fund, Orient Securities
Self-trading Unit, Tianhong Fund, CIB Fund, Huashang Fund, Comein Finance, West
Lead Fund, Yingda Insurance Asset Management Co., Ltd., Huashang Fund
Management Co., Ltd., Zhongying Yili AMC, Morgan Stanly Huaxin Funds, China
Nature Asset Management Co., Ltd., Ping An Pension, GH Shining Asset
Management, Hengqin Life, Guotai Junan Asset Management Co., Ltd., Funding
Capital Management (Beijing) Co., Ltd., Guotai, Everbright Pramerica Fund
Management Co., Ltd., Asia Pacific Property & Casualty Insurance, Southern Asset
Details can be found in the
Management, Pengyang AMC, Huatai Baoxing Fund Management Co., Ltd.,
002511 Zhongshun Jierou
Minsheng Securities, Taikang Assets, BOC Self-trading Unit, Xiangcai Fund, CIB Status quo and future
November Telephone Research Activity
/ Institution Fund Management Co., Ltd., River Fund Management Co., Ltd., Industrial Securities development plan of
20, 2022 communication Information 20221122 on
Global Fund Management Co., Ltd., Fortune SG Fund Management Co., Ltd., the Company
CNINFO
Zheshang AMC, JT Fund Management Co., Ltd., Changsheng Fund Management
(http://www.cninfo.com.cn) .
Co., Ltd., Cinda, Zhejiang Jinghe Asset Management Co., Ltd., Changjiang
Securities Self-trading Unit, Baoying Fund, Shanghai Jisheng Investment
Management Co., Ltd., Guohua Life, China Fund, Rongtong Fund, Founder
Securities, CCB Fund, ABC-CA Fund Management, Cherami Private Equity
Securities Investment Management Co., Ltd., ABC-CA, U Capital Co., Ltd.,
Huisheng Fund Management Co., Ltd., CITIC Asset Management, Growth Capital,
Wealspring Asset, GH Shining Asset Management, Q.M. Fortune, Tongben
Investment, Genxi Fund, Sun Life Everbright Life, Taikang
45
C&S Paper Co., Ltd. 2022 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
46
C&S Paper Co., Ltd. 2022 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.
47
C&S Paper Co., Ltd. 2022 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.
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.
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
48
C&S Paper Co., Ltd. 2022 Annual Report
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
Session of Date of Date of
Type investor Resolutions of the meeting
meeting convening disclosure
participation
Details can be found in the Announcement on the
2021 Annual
Annual general May 19, May 20, Resolution of the 2021 Annual General Meeting of
General Meeting 52.75%
meeting 2022 2022 Shareholders (Announcement No.: 2022-20) on
of Shareholders
CNINFO (http://www.cninfo.com.cn) .
Details can be found in the Announcement on the
2022 First Extraordinary
July 5, July 6, Resolution of the 2022 First Extraordinary General
Extraordinary general meeting 51.90%
2022 2022 Meeting of Shareholders (Announcement No.:
General Meeting of shareholders
2022-37) on CNINFO (http://www.cninfo.com.cn) .
Details can be found in the Announcement on the
2022 Second Extraordinary Resolution of the 2022 Second Extraordinary
September September
Extraordinary general meeting 52.95% General Meeting of Shareholders (Announcement
16, 2022 17, 2022
General Meeting of shareholders No.: 2022-47) on CNINFO
(http://www.cninfo.com.cn) .
Details can be found in the Announcement on the
2022 Third Extraordinary
November November Resolution of the 2022 Third Extraordinary General
Extraordinary general meeting 53.04%
11, 2022 12, 2022 Meeting of Shareholders (Announcement No.:
General Meeting of shareholders
2022-61) on CNINFO (http://www.cninfo.com.cn) .
Details can be found in the Announcement on the
2021 Fourth Extraordinary
December December Resolution of the 2022 Forth Extraordinary General
Extraordinary general meeting 53.05%
12, 2022 12, 2022 Meeting of Shareholders (Announcement No.:
General Meeting of shareholders
2022-79) on CNINFO (http://www.cninfo.com.cn) .
2. Extraordinary general meetings of shareholders proposed to be convened by preferred shareholders
whose voting rights were resumed
□ Applicable √ Not applicable
49
C&S Paper Co., Ltd. 2022 Annual Report
V. Particulars of Directors, Supervisors and Senior Management
1. Basic information
Number of Increase
Decrease Number of
shares held of
Position Start date End date of shares Other shares held
at the shares
Name Position status Gender Age of term of of term of during changes at the end Reason for change
beginning during
office office the (shares) of the
of the the
period period
period period
Deng December January
Director Incumbent Male 72 6,752,811 6,752,811
Yingzhong 12, 2008 20, 2024
April 12, January
Chairman Incumbent Male 43 61,300 61,300
2021 20, 2024
Liu Peng
March 22, January
President Incumbent Male 43
2021 20, 2024
For details, please
refer to the
Announcement on
the Completion of
the Transfer of the
Shares from the
Actual Controller
Deng Vice December January to the Controlling
Incumbent Male 45 4,957,473 -1,239,368 3,718,105
Guanbiao Chairman 12, 2011 20, 2024 Shareholder
through Block
Trade
(Announcement
No. 2022-59),
which has been
publicized on
CNINFO.
For details, please
refer to the
Announcement on
the Completion of
the Transfer of the
Shares from the
Actual Controller
Deng Vice June 22, January to the Controlling
Incumbent Male 39 1,200,974 -300,244 900,730
Guanjie Chairman 2020 20, 2024 Shareholder
through Block
Trade
(Announcement
No. 2022-59),
which has been
publicized on
CNINFO.
Zhang Director Incumbent Male 46 November January 210,000 210,000
50
C&S Paper Co., Ltd. 2022 Annual Report
Yang 17, 2021 20, 2024
Vice July 12, January
Incumbent Male 46
President 2021 20, 2024
Yu Ep.
September January
Rachel Director Incumbent Female 52
16, 2022 20, 2024
Jing
Ge Independent April 3, January
Incumbent Female 56
Guangrui Director 2023 20, 2024
He Independent January January
Incumbent Male 47
Guoquan Director 21, 2021 20, 2024
Independent January January
Liu Die Incumbent Male 45
Director 21, 2021 20, 2024
Vice July 09, January
Yue Yong Incumbent Male 57 9,665,241 9,665,241
President 2019 20, 2024
Zhao Vice November January
Incumbent Male 45 35,000 35,000
Ming President 30, 2021 20, 2024
Vice November January
Lin Tiande Incumbent Male 43 317,521 317,521
President 30, 2021 20, 2024
Board
Zhang Secretary, August January
Incumbent Male 49
Haijun Vice 23, 2021 20, 2024
President
Chief
December January Exercise of stock
Dong Ye Financial Incumbent Male 59 243,725 20,000 263,725
12, 2011 20, 2024 operations
Officer
Chairman
Chen of the September January
Incumbent Male 69 16,900 16,900
Haiyuan Board of 22, 2015 20, 2024
Supervisors
Liang December January
Supervisor Incumbent Male 44
Yongliang 12, 2011 20, 2024
After being elected
as a supervisor, he
does not have the
incentive
Zhang December January qualification, his
Supervisor Incumbent Male 49 72,000 -22,000 50,000
Gao 20, 2021 20, 2024 restricted shares
that have not been
unlocked are
repurchased and
deregistered
Li Zhaojin Vice Resigned Male 60 April 12, November 10,800 10,800
51
C&S Paper Co., Ltd. 2022 Annual Report
President 2021 1, 2022
Deng Vice April 27, June 10,
Resigned Female 49 21,100 21,100
Wenxi President 2021 2022
September March 23,
Director Resigned Male 47 1,809,350 790,570 1,018,780 Share decrease
Liu 11, 2015 2022
Jinfeng Vice January March 23,
Resigned Male 47
President 31, 2018 2022
Independent March 10, April 03,
He Haidi Incumbent Male 55
Director 2017 2023
Total -- -- -- -- -- -- 25,374,195 790,570 -1,541,612 23,042,013 --
Whether there is any resignation of directors and supervisors or dismissal of senior management within their term of office during the
reporting period
√ Yes □ No
1. On March 23, 2022, Mr. Liu Jinfeng resigned from the position of Director and Vice President.
2. On June 10, 2022, Mrs. Deng Wenxi resigned from the position of Supervisor; after resignation, she no longer
holds any position in the Company.
3. On November 1, 2022, Mr. Li Zhaojin resigned from the position of Supervisor; after resignation, he no longer
holds any position in the Company.
4. On March 6, 2023, the board of directors received a written resignation report from Mr. He Haiti, an
independent director of the Company. Mr. He Haidi applied to resign from the Independent Director and all
positions in the special committees of the Board due to his continuous tenure for six years. After resignation, he
will no longer hold any position in the Company. Mr. He Haiti's resignation resulted in the number of independent
directors of the company being less than one-third of the board members. Before the new independent director
takes office, Mr. He Haidi will continue to perform his duties as an independent director in accordance with
relevant regulations. On April 3, 2023, Ms. Ge Guangrui was elected as an independent director of the fifth board
of directors at the Second Extraordinary General Meeting of the Company for the year 2023.The resignation of Mr.
He Haidi will be effective.
Changes in directors, supervisors and senior management of the Company
√ Applicable □ Not applicable
Name Position Type Date Reason
Liu Jinfeng Director, Vice President Resigned March 23, 2022 Voluntary resign
Deng Wenxi Vice President Appointed June 10, 2022 Voluntary resign
Yu Ep. Rachel Elected by the general meeting of
Director Elected September 16, 2022
Jing shareholders
Li Zhaojin Vice President Appointed November 11, 2022 Voluntary resign
Resigned upon expiry
He Haidi Independent Director April 3, 2023 Resigned upon expiry of term of office
of term of office
Elected by the general meeting of
Ge Guangrui Independent Director Elected April 3, 2023
shareholders
52
C&S Paper Co., Ltd. 2022 Annual Report
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 and born in 1980, 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 is also the
Vice Director of the Household Paper Professional Committee, China Paper Association. 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.
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.
Yu Ep. Rachel Jing, female and born in 1971, is of French nationality and holds a master’s degree. She served as
the Operations VP of L’Oreal (China) Co., Ltd. from 2007 to 2016 and the CEO of Gold Hongye Paper Group
from 2016 to 2018.
53
C&S Paper Co., Ltd. 2022 Annual Report
Ge Guangrui, female and born in 1967, is of Chinese nationality and has no permanent residency abroad. She is a
senior engineer, a Chinese Certified Public Accountant (CPA), and a Certified Internal Auditor (CIA). Ms. Ge
graduated from the Physics Department of Sun Yat-sen University in 1990 with a Bachelor of Science degree. She
has successively served as the Director of the Science and Technology Association and the Director of the
Meteorology and Testing Department of Guangdong Aide Electric Group Co., Ltd., the Financial Manager of the
Marketing Center of Guangdong Dari Biochemical Pharmaceutical Co., Ltd., the CPA and Audit Project Manager
of Guangdong Xinhua Certified Public Accountants, the Industry Quality Supervisor of Guangdong Institute of
Certified Public Accountants, and the Independent Director of Shenzhen Refond Optoelectronics Co., Ltd.
Currently she is the Independent Director of Shanghai Guangdian Electric Co., Ltd., an expert at the think tank of
the Guangzhou Nansha District Enterprises and Entrepreneurs Confederation, and the Independent Director of
Focus Hotmelt Co., Ltd. She has been an Independent Director of the Company since April 2023.
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.
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.
He Haidi, male and born in September 1968, is of Chinese nationality and has no permanent residency abroad. Mr.
He received a master's degree in 2006. He currently holds the professional and technical title of Associate
Researcher. 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 also
part-times in Zhongshan Information Research Institute and provides information consulting, information analysis,
technology novelty search, support for IPR and technological innovation projects, and other services to enterprises.
He acts as the Independent Director of the Company from March 2017 to April 2023.
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.
Zhao Ming, male and born in 1978, is of Chinese nationality and has a college degree. From 2001 to 2019, he
54
C&S Paper Co., Ltd. 2022 Annual Report
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.
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.
Zhang 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
55
C&S Paper Co., Ltd. 2022 Annual Report
Technology Center in succession. He has been a supervisor of the Company since December 2021.
Positions in shareholder entities
√ Applicable □ Not applicable
Start date of End date of Whether receiving remuneration
Name of shareholder Position held in
Name term of term of and allowance from shareholder
entity shareholder entity
office office entity
Guangdong
Legal representative May 28,
Deng Yingzhong Zhongshun Paper No
and executive director 1999
Group Co., Ltd.
June 01,
Deng Yingzhong Chung Shun Co. Legal representative No
1996
Guangdong
May 28,
Deng Guanbiao Zhongshun Paper Supervisor No
1999
Group Co., Ltd.
Description on position
held in shareholder None
entity
Positions in other entities
√ Applicable □ Not applicable
Whether receiving
End date
Position held in Start date of remuneration and
Name Name of other entity of term
other entity term of office allowance from
of office
other entity
Shenzhen Zhongshun Caizhi Investment Co.,
Deng Yingzhong General Manager No
Ltd.
Bama Zhongshun Health Products Co., Ltd. September 18,
Deng Yingzhong Director No
2017
Guangdong Huichuang Zhiyuan Enterprise Executive Director、
August 11,
Liu Peng Management Co., Ltd Manager and Legal No
2022
representative
China National Household Paper Industry
Liu Peng Deputy Director No
Association
Shenzhen Zhongshun Caizhi Investment Co.,
Deng Guanbiao Supervisor July 17, 2009 No
Ltd.
September 26,
Deng Guanbiao Shenzhen Jinju Investment Co., Ltd. Director No
2021
Zhongshan Zhongshun Caizhi Trading Co.,
Deng Guanbiao Supervisor May 26, 2021 No
Ltd.
Deng Guanbiao Zhongshan Youth Entrepreneurs Association President June 9, 2022 No
56
C&S Paper Co., Ltd. 2022 Annual Report
September 27,
Deng Guanjie Shenzhen Jinju Investment Co., Ltd. Supervisor No
2021
Zhongshan Zhongshun Caizhi Trading Co., Manager and
Deng Guanjie May 26, 2021 No
Ltd. Executive Director
Executive Director
Shenzhen Zhongshun Caizhi Investment Co.,
Deng Guanjie and Legal No
Ltd.
representative
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
Manager, Executive
Zhang Haijun Zhongshan Jufengbao Trading Co., Ltd. Director and Legal April 16, 2019 Yes
Representative
Executive Director
August 16,
Lin Tiande Jiangmen Yutongda Trading Co., Ltd. and Legal
2022
Representative
Yu Ep. Rachel October 21,
Yingtan Dongwu Technology Co., Ltd. Chairman
Jing 2021
Independent
Ge Guangrui Shanghai Guangdian Electric Group Co.,Ltd. May 24, 2017 Yes
Director
Independent August 6,
Ge Guangrui Focus Hotmelt CO., Ltd. Yes
Director 2020
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
57
C&S Paper Co., Ltd. 2022 Annual Report
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. Non-independent
directors who do not hold a position in the Company and 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
Whether
Total
receiving
remuneration
remuneration
Name Position Gender Age Position status before tax
from related
received from the
parties of the
Company
Company
Deng Yingzhong Director Male 72 Incumbent 480.78 No
Liu Peng Chairman, President Male 43 Incumbent 607.53 No
Deng Guanbiao Vice Chairman Male 45 Incumbent 96 No
Deng Guanjie Vice Chairman Male 39 Incumbent 154.82 No
Director, Vice 425.01
Zhang Yang Male 46 Incumbent No
President
Yu Ep. Rachel 101.5
Director Female 52 Incumbent
Jing
He Haidi Independent Director Male 55 Incumbent 10 No
He Guoquan Independent Director Male 47 Incumbent 10 No
Liu Die Independent Director Male 45 Incumbent 10 No
Yue Yong Vice President Male 57 Incumbent 304.82 No
Zhao Ming Vice President Male 45 Incumbent 168.19 No
Lin Tiande Vice President Male 43 Incumbent 86.73 No
Zhang Haijun Board Secretary Male 49 Incumbent 105.33 No
Dong Ye Chief Financial Officer Male 59 Incumbent 107.4 No
58
C&S Paper Co., Ltd. 2022 Annual Report
Chairman of the Board 5.75
Chen Haiyuan Male 69 Incumbent No
of Supervisors
Liang Yongliang Supervisor Male 44 Incumbent 52.91 No
Zhang Gao Supervisor Male 49 Incumbent 57.16 No
Director, Vice 533.36
Liu Jinfeng Male 47 Resigned No
President
Deng Wenxi Vice President Female 49 Resigned 135.38 No
Li Zhaojin Vice President Male 60 Resigned 104.95 No
Total -- -- -- -- 3,557.62 --
VI. Performance of Duties by Directors during the Reporting Period
1. Board meetings during the reporting period
Date of Date of
Session of meeting Resolutions of the meeting
convening disclosure
13th Meeting of the fifth Session of the April 26, April 28, Details can be found in the Announcement of Board Resolution
(Announcement No.: 2022-08) on CNINFO
Board of Directors 2022 2022
(http://www.cninfo.com.cn) .
Details can be found in the Announcement of the Resolution of
14th Meeting of the fifth Session of the June 16, June 17, the 14th Meeting of the 5th Board of Directors
Board of Directors 2022 2022 (Announcement No.: 2022-25) on CNINFO
(http://www.cninfo.com.cn) .
15th Meeting of the fifth Session of the August 29, August 31, Details can be found in the Announcement of resolutions of the
board of directors in the Semi-annual report (Announcement
Board of Directors 2022 2022
No.: 2022-40) on CNINFO (http://www.cninfo.com.cn) .
16th Meeting of the fifth Session of the October 24, October 26, Details can be found in the Announcement of Board Resolution
(Announcement No.: 2022-53) on CNINFO
Board of Directors 2022 2022
(http://www.cninfo.com.cn) .
November November Details can be found in the Announcement of the Resolution of
17th Meeting of the fifth Session of the the 17th Meeting of the 5th Board of Directors
22, 2022 23, 2022
Board of Directors (Announcement No.: 2022-62) on CNINFO
(http://www.cninfo.com.cn) .
Details can be found in the Announcement of the Resolution of
18th Meeting of the fifth Session of the December December the 18th Meeting of the 5th Board of Directors
Board of Directors 20, 2022 20, 2022 (Announcement No.: 2022-82) on CNINFO
(http://www.cninfo.com.cn) .
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 Number of Number of Any failure in Number of
Board Board Board Board Number of attending in general
Name of director
meetings meetings meetings meetings absence person for two shareholder
required to attended in attended via attended by consecutive meetings
59
C&S Paper Co., Ltd. 2022 Annual Report
attend during person communicatio proxy meetings attended
the reporting n methods
period
Deng Yingzhong 6 3 3 0 0 No 5
Liu Peng 6 5 1 0 0 No 5
Deng Guanbiao 6 1 5 0 0 No 5
Deng Guanjie 6 2 4 0 0 No 5
Zhang Yang 6 5 1 0 0 No 5
Yu Ep. Rachel
2 1 1 0 0 No 2
Jing
He Haidi 6 1 5 0 0 No 5
He Guoquan 6 1 5 0 0 No 5
Liu Die 6 1 5 0 0 No 5
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.
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, annual profit distribution, external guarantee, 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. 2022 Annual Report
VII. Particulars of the Special Committees under the Board of Directors during the Reporting Period
Number
Other
of Specifics of
Name of situations of
Members meetings Date of convening Contents Important opinions and suggestions raised objections
committee duty
convene (if any)
performance
d
The Strategy Committee carried out work diligently
Strategy Deng
and responsibly in strict accordance with relevant
Committee Yingzhong, Deliberated: Proposal on Foreign Investment
regulatory requirements as well as provisions of the
under the Deng 1 August 26, 2022 to Establish Holding Subsidiaries and Related None None
Articles of Association and the Working Rules of the
Board of Guanbiao, Yue Party Transactions
Strategy Committee; the proposal was passed
Directors Yong, He Haidi
unanimously.
The Nomination Committee carried out work
diligently and responsibly in strict accordance with
Nomination
relevant regulatory requirements as well as
Committee He Haidi, He Deliberated: Proposal on By-election of
provisions of the Articles of Association and the
under the Guoquan, Liu 1 August 26, 2022 Non-Independent Directors of the Fifth Board None None
Working Rules of the Nomination Committee. The
Board of Jinfeng of Directors
Committee reviewed and fully discussed the
Directors
proposals according to the actual situation of the
Company; all proposals were unanimously passed.
The Remuneration and Review Committee carried
Remuneration out work diligently and responsibly in strict
and Review accordance with relevant regulatory requirements as
Liu Die, He Deliberated: 1. Proposal on the Remuneration
Committee well as provisions of the Articles of Association and
Haidi, Deng 4 April 12, 2022 of Senior Management in 2021; 2. Proposal None None
under the the Working Rules of the Remuneration and Review
Guanjie on the Remuneration of Directors in 2021
Board of Committee. The Committee reviewed and fully
Directors discussed the proposal according to the actual
situation of the Company; the proposal was
61
C&S Paper Co., Ltd. 2022 Annual Report
unanimously passed.
Deliberated: 1. Proposal on Achieving the
The Remuneration and Review Committee carried
Unlock Conditions of the Third Unlock Period
out work diligently and responsibly in strict
for Restricted Stocks Awarded in the First
accordance with relevant regulatory requirements as
Grant under the Company's 2018 Stock
well as provisions of the Articles of Association and
Option and Restricted Stock Incentive Plan; 2.
June 14, 2022 the Working Rules of the Remuneration and Review None None
Proposal on Achieving the Exercise
Committee. The Committee reviewed and fully
Conditions of the Third Exercise Period for
discussed the proposals according to the actual
Stock Options Awarded in the First Grant
situation of the Company; all proposals were
under the Company's 2018 Stock Option and
unanimously passed.
Restricted Stock Incentive Plan
Deliberated: 1. Proposal on Achieving the The Remuneration and Review Committee carried
Unlock Conditions of the Third Unlock Period out work diligently and responsibly in strict
for Reserved Restricted Stocks under the accordance with relevant regulatory requirements as
Company's 2018 Stock Option and Restricted well as provisions of the Articles of Association and
November 17, 2022 Stock Incentive Plan; 2. Proposal on the Working Rules of the Remuneration and Review None None
Achieving the Exercise Conditions of the Third Committee. The Committee reviewed and fully
Exercise Period for Reserved Stock Options discussed the proposals according to the actual
under the Company's 2018 Stock Option and situation of the Company; all proposals were
Restricted Stock Incentive Plan unanimously passed.
The Remuneration and Review Committee carried
Deliberated: 1. Proposal on 2022 Stock out work diligently and responsibly in strict
Option and Restricted Stock Incentive Plan accordance with relevant regulatory requirements as
(Draft) and Its Summary; 2. Proposal on the well as provisions of the Articles of Association and
December 20, 2022 Administrative Measures for the the Working Rules of the Remuneration and Review None None
Implementation and Assessment of the 2022 Committee. The Committee reviewed and fully
Stock Option and Restricted Stock Incentive discussed the proposals according to the actual
Plan situation of the Company; all proposals were
unanimously passed.
62
C&S Paper Co., Ltd. 2022 Annual Report
The Audit Committee carried out work diligently
and responsibly in strict accordance with relevant
Deliberated:
regulatory requirements as well as provisions of the
1. Annual Report of 2021
Articles of Association and the Working Rules of the
April 21, 2022 2. 2022 First Quarter Report None None
Audit Committee. The Committee reviewed and
3. Summary and Work Plan of the Audit
fully discussed the proposals according to the actual
Department for the First Quarter of 2023.
situation of the Company; all proposals were
unanimously passed.
The Audit Committee carried out work diligently
and responsibly in strict accordance with relevant
regulatory requirements as well as provisions of the
Deliberated: 1. Proposal on Continued Articles of Association and the Working Rules of the
May 13, 2022 None None
Audit Engagement of the CPA Firm Audit Committee. The Committee reviewed and
Committee He Guoquan, fully discussed the proposal according to the actual
under the Liu Die, Zhang 5 situation of the Company; the proposal was
Board of Yang unanimously passed.
Directors The Audit Committee carried out work diligently
and responsibly in strict accordance with relevant
Deliberated: 1. Proposal on Changes to
regulatory requirements as well as provisions of the
Accounting Policies; 2. Proposal on the
Articles of Association and the Working Rules of the
August 16, 2022 Company’s 2022 Semi-annual Report; 3. 2022 None None
Audit Committee. The Committee reviewed and
Semi-Annual Work Summary of the Audit
fully discussed the proposals according to the actual
Compliance Department of C&S Paper
situation of the Company; all proposals were
unanimously passed.
The Audit Committee carried out work diligently
Deliberated: 1. 2022 Third Quarter Report; 2. and responsibly in strict accordance with relevant
October 17, 2022 2022 Third Quarter Work Report of the Audit regulatory requirements as well as provisions of the None None
Department Articles of Association and the Working Rules of the
Audit Committee. The Committee reviewed and
63
C&S Paper Co., Ltd. 2022 Annual Report
fully discussed the proposals according to the actual
situation of the Company; all proposals were
unanimously passed.
The Audit Committee carried out work diligently
and responsibly in strict accordance with relevant
Deliberated: 1. Communicate with Mazars
regulatory requirements as well as provisions of the
Certified Public Accounts (LLP) regarding the
Articles of Association and the Working Rules of the
December 15, 2022 audit of the 2022 financial statements; 2. None None
Audit Committee. The Committee reviewed and
Report the results of the 2022 audit work and
fully discussed the proposal according to the actual
the 2023 audit work plan
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.
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C&S Paper Co., Ltd. 2022 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
1,008
end of the reporting period
Number of in-service employees of the major subsidiaries at the
5,625
end of the reporting period
Total number of in-service employees at the end of the reporting
6,633
period
Total number of employees receiving remuneration in the
6,829
reporting period
Number of retired employees whose expenses are borne by the
6
Parent Company and its major subsidiaries
Composition of professions
Type of professions Number of staff in the profession
Production staff 2,292
Sales staff 2,816
Technical staff 708
Finance staff 154
Administrative staff 663
Total 6,633
Education level
Type of education level Number of persons
University graduates or above 777
College graduates 1,620
High school graduates or below 4,236
Total 6,633
2. Remuneration policy
The Company has established the following reward and incentive policies:
1. 2022 marketing management Elite Award Scheme
2. Reward Program for Team Breakthroughs of the Marketing Department 2022—Business Team
3. Indicator Competition Program of the Marketing Department 2022—Business Team
4. Indicator Competition Program of the Production Department 2022
5. Reward Program for Accounting Team 2022
6. Reward Program for Supply Chain Team 2022
65
C&S Paper Co., Ltd. 2022 Annual Report
3. Training program
In order to improve the overall quality of employees and managers and hence elevate the level of corporate
governance and ensure sustainable development, the Company, with regard to the training work, has made the
following layout in 2022:
(1) Establish a three-level training system for the Company and subordinate subsidiaries and branches. Level 1
Training focuses on the Company's culture, development strategy, rules and regulations, management skills, new
technologies, new knowledge and other forward-looking information. The training objects are middle-level and
above managers of the Company. Level 2 Training is those conducted by subsidiaries for their managers, with a
focus on the Company's corporate culture, rules and regulations of the unit and safety operating procedures. Level
3 Training is those performed by each department for subordinate employees, mainly focusing on responsibilities
of the post, operating procedures, safety operating procedures, workflow of the post, professional expertise such
as processes and techniques, work instructions, etc., such that employees could repeatedly learn responsibilities
and safety operating procedures of the post during daily meetings before and after the shift.
(2) Professional skill training: The Company also arranged professional skill trainings, mainly covering three
areas: training on processes and technologies, training on the maintenance and repair of mechanical equipment,
and training on production management. Such trainings were conducted at least once a week, with no less than
one hour for each time.
(3) Professional knowledge training: The head of each functional department also arranged professional
knowledge trainings in various forms. These trainings discussed and exchanged professional problems that arose
in actual work, thereby improving the professional skills and comprehensive quality of the team
(4) Pre-job training for new employees: The HR Department organized centralized training for new employees,
which mainly introduced the Company's profile, development history, strategic goals, corporate culture, product
introduction, general rules and regulations, and general safety operating procedures. Training on job
responsibilities and operating procedures was then conducted after the new employee reported to the department
(or shift/team), such that each employee can clearly understand the duties and operating procedures of respective
post. There was a written test for new employees after the training, and the test result was incorporated into the
appraisal of the probationary period.
(5) Annual training plan: Each subsidiary and department were responsible for formulating respective annual
training plans, which should include training organizers, responsible people, training time, training topics and
content, training forms, trainees, and lecturers. There must be training records and training results must be
evaluated and tracked. The training forms can be varied but should be strictly implemented according to the
training plan. The HR Department should perform inspection and guidance at least once a month.
The above trainings could help managers and employees to understand the connotation of corporate culture and
business knowledge, clarify job responsibilities and work standards, master a variety of business skills, and
improve performances. This could improve the overall quality of managers and employees and the management
level of the Company, thereby achieving a win-win situation for the Company and employees and laying a talent
foundation for the realization of the Company's strategic goals.
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C&S Paper Co., Ltd. 2022 Annual Report
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), and formulate
the Shareholder Return Plan for the Next Three Years (2023-2025), 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.
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)
0.62
(RMB)
Basis of the shares for distribution proposal 1,309,687,213
67
C&S Paper Co., Ltd. 2022 Annual Report
Amount of cash dividends (RMB) (tax included) 81,200,607.21
Cash dividend amount in other ways (such as share
0.00
repurchase) (RMB)
Total amount of cash dividends (including other ways)
81,200,607.21
(RMB)
Distributable profit (RMB) 659,992,439.79
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 proposal in 2022: 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 RMB0.62 (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. 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.
Note: The above table uses the total share capital as of March 31, 2023 minus the number of shares repurchased by the Company as
the basis for calculation. 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
(1) On March 15, 2022, the cancellation procedures for 139,428 reserved restricted shares that had been granted
but not unlocked under the 2018 Stock Option and Restricted Stock Incentive Plan were completed at the
Shenzhen Branch of China Securities Depository and Clearing Corporation Limited.
(2) On April 26, 2022, the Company convened the 13th meeting of the Fifth Board of Directors and the 8th
meeting of the Fifth Board of Supervisors, which reviewed and approved the Proposal on the Deregistration of
Stock Options Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive
Plan That Have Not Been Exercised in the Second Exercise Period. During the second exercise period of the
first-granted stock options (i.e. June 30, 2021 to February 28, 2022), four recipients did not exercise the stock
options within the period, so 2,400 shares need to be deregistered. The deregistration procedures for the
aforementioned 2,400 shares had been completed in May 2022 under the review and confirmation of the
Shenzhen Branch of China Securities Depository and Clearing Corporation Limited.
(3) On June 16, 2022, the Company convened the 14th meeting of the Fifth Board of Directors and the 9th
meeting of the Fifth Board of Supervisors, which deliberated and approved the Proposal on Achieving the Unlock
68
C&S Paper Co., Ltd. 2022 Annual Report
Conditions of the Third Unlock Period for Restricted Stocks Awarded in the First Grant under the Company's
2018 Stock Option and Restricted Stock Incentive Plan. A total of 463 incentive recipients of the restricted stocks
awarded in the first grant met the unlock conditions of the third unlock period, and the number of stocks that
could be applied for unlock was 5,947,912 shares. The unlock date was June 29, 2022. The above meetings also
reviewed and approved the Proposal on Achieving the Exercise Conditions of the Third Exercise Period for Stock
Options Awarded in the First Grant under the Company's 2018 Stock Option and Restricted Stock Incentive Plan.
A total of 2,000 incentive recipients of the stock options awarded in the first grant met the exercise conditions of
the third exercise period, and the number of options that could be exercised was 3,314,312 shares. In addition, the
Proposal on the Repurchase and Deregistration of Partial Reserved Restricted Stocks Awarded in the First Grant
under the Company's 2018 Stock Option and Restricted Stock Incentive Plan was also reviewed and approved.
The Board agreed to repurchase and deregister 501,088 restricted shares that have been granted but unlocked. 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 reviewed and approved. The Board
agreed to deregister 633,088 shares of stock options that had been granted but not exercised. In addition, the
above meetings also reviewed and approved the Proposal on Adjusting the Exercise Price of Stock Options under
the 2018 Stock Option and Restricted Stock Incentive Plan. Pursuant to the Company’s profit distribution plan in
2021 and relevant provisions of the 2018 Stock Option and Restricted Stock Incentive Plan, the Company adjusted
the exercise price of first-granted stock options from RMB8.472/share to RMB8.372/share, and the exercise price
of reserved stock options from RMB13.865/share to RMB13.765/share.
(4) On July 05, 2022, the cancellation procedures for 633,088 shares of first-granted stock options that had been
granted but not exercised were completed. On September 22, 2022, the repurchase and cancellation procedures for
501,088 first-granted restricted shares that had been granted but not unlocked were completed.
(5) The Company convened the 16th meeting of the Fifth Board of Directors and the 11th meeting of the Fifth
Board of Supervisors, which reviewed and approved the Proposal on the Deregistration of Reserved Stock
Options under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan That Have Not Been
Exercised in the Second Exercise Period. During the second exercise period of the reserved stock options (i.e.
December 14, 2021 to September 9, 2022), 37 recipients did not exercise the stock options within the period, so
487,263 shares need to be deregistered. The deregistration procedures for the aforementioned 487,263 shares had
been completed in November 2022 under the review and confirmation of the Shenzhen Branch of China Securities
Depository and Clearing Corporation Limited.
(6) On November 22, 2022, the Company convened the 17th meeting of the Fifth Board of Directors and the 12th
meeting of the Fifth Board of Supervisors, which considered and approved the Proposal on Achieving the Unlock
Conditions of the Third Unlock Period for Reserved Restricted Stocks under the Company's 2018 Stock Option
and Restricted Stock Incentive Plan. A total of 29 incentive recipients of the reserved restricted stocks met the
unlock conditions of the third unlock period, and the number of stocks that could be applied for unlock was
781,144 shares. The unlock date was December 2, 2022. The above meetings also reviewed and approved the
Proposal on Achieving the Exercise Conditions of the Third Exercise Period for Reserved Stock Options under the
Company's 2018 Stock Option and Restricted Stock Incentive Plan. A total of 55 incentive recipients of the
reserved stock options met the exercise conditions of the third exercise period, and the number of options that
69
C&S Paper Co., Ltd. 2022 Annual Report
could be exercised was 569,340 shares. 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 178,536 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 245,260 shares of stock options that had been granted but not
exercised.
(7) The cancellation procedures for 245,260 shares of reserved stock options that had been granted but not
exercised were completed at the Shenzhen Branch of China Securities Depository and Clearing Corporation
Limited on December 7, 2022. The cancellation procedures for 178,536 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 February 9, 2023.
Implementation of the 2022 Stock Option and Restricted Stock Incentive Plan during the reporting period:
(1) On December 20, 2022, the Company convened the 18th meeting of the Fifth Board of Directors, the 13th
meeting of the Fifth Board of Supervisors, and the 2023 First Extraordinary General Meeting of Shareholders,
which deliberated and approved the Proposal on the 2022 Stock Option and Restricted Stock Incentive Plan (Draft)
and Its Summary. For details, please refer to the Company's relevant announcements on CNINFO.
(2) On January 4, 2023, the Company's Board of Supervisors issued an explanation and the audit opinions on the
list of incentive recipients under the 2022 Stock Option and Restricted Stock Incentive Plan. At the same time, the
Company issued a self-inspection report on the buying and selling of corporate shares by insiders and incentive
recipients of the 2022 Stock Option and Restricted Stock Incentive Plan.
(3) On January 31, 2023, the Company held the 19th meeting of the Fifth Board of Directors and the 14th meeting
of the Fifth Board of Supervisors, which reviewed and approved the Proposal on Granting Stock Options and
Restricted Shares to Incentive Recipients for the First Time. The Board believed that the granting conditions
stipulated in the incentive plan were fulfilled and thereby agreed to, with January 31, 2023 as the first-grant date,
grant a total of 15.665 million stock options to 686 incentive recipients who met the granting conditions with an
exercise price of RMB9.48/share, and a total of 21.765 million restricted shares to 694 incentive recipients who
met the granting conditions with a grant price of RMB6.32/share.
(4) The registration procedures for the first-granted stock options under the 2022 Stock Option and Restricted
Stock Incentive Plan were completed on February 24, 2023, with a quantity of 15.48 million, number of recipients
654, stock option abbreviation C&S JLC3, and stock option code 037336. In addition, the registration procedures
for the first-granted restricted shares under the 2022 Stock Option and Restricted Stock Incentive Plan were
completed on March 6, 2023, with a quantity of 20.9615 million, number of recipients 617, and stock listing date
March 7, 2023.
Equity incentives granted to directors and senior management during the reporting period
√ Applicable □ Not applicable
Unit: share
Name Position Number Numbe Number Number Exercise Numbe Market Number Number Number Grant Number
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C&S Paper Co., Ltd. 2022 Annual Report
of stock r of of shares of price of r of price at of shares of shares of shares price of of shares
options stock exercisabl shares shares stock the end subject to unlocked subject to shares subject to
held at options e during exercise exercise options of the selling during selling subject to selling
the newly the period d during d during held at reportin restriction the restriction selling restriction
beginnin granted the the the end g period s at the period s newly restriction s at the
g of the in the period period of the beginning granted in s end of the
period period period of the the period period
period
Director,
Zhang
Vice 120,000 120,000 0
Yang
President
Yue Vice
440,000 440,000 0
Yong President
Chief
Dong Ye Financial 20,000 0 20,000 20,000 8.372 0 13.74 60,000 60,000 0
Officer
Lin Vice
26,000 26,000 0
Tiande President
Zhao Vice
20,000 20,000 0
Ming President
Zhang Supervis
22,000 0 0
Gao or
Liu
Director,
Jinfeng 400,00
Vice 700,000 0 700,000 0 13.74 432,000 432,000 0
(resigne 0
President
d)
1,098,00
Total -- 720,000 0 720,000 20,000 -- 40,000 -- 1,120,000 0 -- 0
0
1. The third exercise period for the first-granted and reserved stock options under the 2018 Stock Option and
Restricted Stock Incentive Plan was initiated, with the starting date of June 29, 2022 and December 8, 2022,
respectively. During the reporting period, Mr. Dong Ye exercised his stock options within the third exercise period.
Mr. Liu Jinfeng did not exercise his stock options during the third exercise period, while his stock options awarded in
the second phase were deregistered by the Company due to failure to exercise the rights during the exercise period.
The Company has cancelled his second option which is not exercised within the exercise period.
2. During the third unlocking period for first-granted and reserved restricted shares under the 2018 Stock Option and
Restricted Stock Incentive Plan, the dates of releasing from sales restrictions were June 29, 2022 and December 2,
Remarks (if any)
2022, respectively. The restricted shares held by the above staff at the beginning of the period have been unlocked.
3. Mr. Liu Jinfeng resigned his positions of director and Vice President on March 23, 2022.
4. The Company held the 2023 First Extraordinary General Meeting on January 10, 2013, which deliberated and
approved the 2022 Stock Option and Restricted Stock Incentive Plan. It then convened the 19th meeting of the Fifth
Board of Directors and the 14th meeting of Fifth Board of Supervisors, which reviewed and approved the Proposal on
Granting Stock Options and Restricted Shares to Incentive Recipients for the First Time. Under the plan, 5,600,000
restricted shares were granted to directors and senior managers, and the registration procedures for first-granted
restricted shares were completed in March 2023.
Performance appraisal and incentives of senior management
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C&S Paper Co., Ltd. 2022 Annual Report
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 Company rolled out the third phase equity incentive plan in December 2022 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. Currently, the registration for the granted shares has been complete.
2. Implementation of the employee stock ownership plan
□ Applicable √ Not applicable
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
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
72
C&S Paper Co., Ltd. 2022 Annual Report
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 20, 2023
report
Disclosure index of full text of the Please refer to the 2022 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
100%
the total assets in the Company’s
consolidated financial statements
Percentage of total operating
income of units included in the
assessment scope to the operating 100%
income in the Company’s
consolidated financial statements
Defect identification criteria
Category Financial report Non-financial report
Material defect: refers to one or a combination of Non-financial report defects are
control defects that may cause the Company to identified mainly based on their degree
Qualitative criteria
materially deviate from the objectives of internal of impact on business processes and their
control. When there are one or several material probability of occurrence.
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C&S Paper Co., Ltd. 2022 Annual Report
defects in internal control, it should be concluded A defect is termed as a general defect if
that the internal control is invalid in the internal its probability of occurrence is low or the
control assessment report. defect reduces work efficiency or
(1) Directors, supervisors and senior management effectiveness, or increases the
have committed fraud and caused serious losses and uncertainty of effects or causes
severe adverse impacts to the company. deviations from expected objectives.
(2) Corrections were made to published financial A defect is termed as a major defect if its
reports due to significant accounting errors. probability of occurrence is relatively
(3) Significant errors in the current financial reports high or the defect significantly reduces
were identified by the certified public accountants work efficiency or effectiveness, or
but not by internal control. significantly increases the uncertainty of
effects or causes obvious deviations from
(4) The internal control and supervision by the
expected objectives.
company’s audit committee and internal audit were
invalid, or significant problems were found but not A defect is termed as a material defect if
corrected. its probability of occurrence is high or
the defect severely reduces work
Major defect: refers to one or a combination of
efficiency or effectiveness, or severely
defects in internal control that is with less severity
increases the uncertainty of effects or
than a material defect, but may still cause the
causes severe deviations from expected
Company to deviate from the objectives of internal
objectives.
control. A major defect is less severe than a material
defect and would not seriously endanger the overall
effectiveness of internal control, but should arouse
the sufficient attention of the board of directors and
mangers.
(1) Failure to select and apply accounting policies
based on generally accepted accounting standards;
(2) There were one or multiple defects in the
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
defect or major defect.
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
Major defect: The misstated amount is between operating income.
Quantitative criteria
0.5% (inclusive) and 1.5% of the operating income. Major defect: The direct property losses
General defect: The misstated amount is less than are between 0.5% (inclusive) and 1.5%
0.5% of operating income. of operating income.
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C&S Paper Co., Ltd. 2022 Annual Report
General defect: The direct property
losses are less than 0.5% 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
Audit Opinions in the Internal Control Audit Report
Mazars Certified Public Accountants (LLP) believes that the Company has maintained effective internal control over financial
reporting in all material aspects in accordance with Basic Norms for the Internal Control of Enterprises and other relevant
regulations as of December 31, 2022.
Disclosure of the Internal Control Audit Report Disclosed
Disclosure date of the Internal Control Audit Report April 20, 2023
Please refer to the 2022 Internal control and audit report of
Disclosure index of the Internal Control Audit Report C&S Paper Co., Ltd. published on CNINFO
(http://www.cninfo.com.cn) for details.
Type of opinion of the Internal Control Audit Report Standard unqualified
Whether there were material defects in non-financial reports No
Whether the CPA firm issued an Internal Control Audit Report with qualified opinions
□ Applicable √ Not applicable
Whether opinions of the Internal Control Audit Report issued by the CPA firm were consistent with the self-assessment report of the
Board
√ Applicable □ Not applicable
XV. Rectification of Detected Problems in the Corporate Governance Special Action of Listed
Companies
Not applicable
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C&S Paper Co., Ltd. 2022 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
The Company and its subsidiaries and branches strictly complied with national and local environmental laws and regulations, including the Environmental Protection
Law of the People's Republic of China, the Environmental Impact Assessment 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, the Regulation on the Safety Management of Hazardous
Chemicals, and the Interim Provisions on the Supervision and Management of Major Hazard Sources of Dangerous Chemicals, as well as national and industry
standards on environmental protection including the Wastewater quality standards for discharge to municipal sewers (GB/T31962-2015), the Discharge standard of
water pollutants for pulp and paper industry (GB3544-2008), the Emission standard of air pollutants for boiler (GB13271-2014), and the Discharge standard of
pollutants for municipal wastewater treatment plant (GB18918-2002).
Environmental protection administrative permits
1. Jiangmen C&S obtained the Pollutant Discharge Permit (No. 91440700758324965B001P) on July 9, 2020, with a valid period from June 15, 2020 to June 14,
2025.
2. Sichuan C&S obtained the Pollutant Discharge Permit (No. 9151018270925944X0001P) on June 26, 2020, with a valid period from June 27, 2020 to June 26,
2025.
3. Zhejiang C&S obtained the Pollutant Discharge Permit (No. 91330400793360582E001P) on December 6, 2022, with a valid period from December 06, 2022 to
December 5, 2027.
4. Tangshan C&S obtained the Pollutant Discharge Permit (No. 91130200689262827L001P) on August 7, 2022, with a valid period from June 23, 2020 to June 22,
2025.
5. Yunfu C&S obtained the Pollutant Discharge Permit (No. 91445381053735377Y001P) on June 22, 2020, with a valid period from June 02, 2019 to June 01, 2024.
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C&S Paper Co., Ltd. 2022 Annual Report
6. Hubei C&S obtained the Pollutant Discharge Permit (No. 91420900764132820H002P) on May 21, 2020, with a valid period from May 21, 2020 to May 20, 2023.
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.
Industry discharge standards and specifics of pollutant discharge in production and operation activities:
Category of Implemente
Name of Main pollutants Number of Total
main pollutants Concentration of d pollutant Total Excessive
company or and particular Ways of discharge discharge Distribution of discharge outlets approved
and particular discharge discharge discharge discharge
subsidiary pollutants outlets discharge
pollutants standards
Discharge directly to the
Centralized processing facilities in
COD centralized sewage treatment 1 32,163mg/L 200mg/L 16,4320t 335.600 t/a None
the factory
plant
Discharge directly to the
Ammonium Centralized processing facilities in
centralized sewage treatment 1 1.241mg/L 8mg/L 0.199t 13.4 t/a None
nitrate the factory
plant
Jiangmen C&S Waste water
Discharge directly to the
Centralized processing facilities in
Total nitrogen centralized sewage treatment 1 5.718mg/L 12mg/L 0.94 / None
the factory
plant
Discharge directly to the
Centralized processing facilities in
Total phosphorus centralized sewage treatment 1 0.011mg/L 0.8mg/L 0.002 / None
the factory
plant
Production waste water discharge
Discharge to the water
(DW001) flows through the
purification station through
Sichuan C&S Waste water COD 1 channel into the main outlet 66 mg/L 80mg/L 42.198t 96 t/a None
urban sewage pipeline after
DW002 (confluent with domestic
treatment
waste water)
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C&S Paper Co., Ltd. 2022 Annual Report
Production waste water discharge
Discharge to the water
(DW001) flows through the
Ammonium purification station through
1 channel into the main outlet 1.52 mg/L 8mg/L 0.32t 9.6 t/a None
nitrate urban sewage pipeline after
DW002 (confluent with domestic
treatment
waste water)
Three chimneys (2# boiler is the 1# boiler 1.9mg/m
PM (particulate Discharge directly through the
3 standby boiler, monitoring when 2# boiler 0 mg/m 10mg/m 0.2304t / None
matter) flue
being used) 3# boiler 1.5 mg/m
Three chimneys (2# boiler is the 1# boiler 28 mg/m
Discharge directly through the
Waste gas Nitrogen oxide 3 standby boiler, monitoring when 2# boiler 0 mg/m 30mg/m 4.1565t 31.35t/a None
flue
being used) 3# boiler 29 mg/m
Three chimneys (2# boiler is the
Discharge directly through the
Sulfur dioxide 3 standby boiler, monitoring when 0 10mg/m 0 / None
flue
being used)
Discharge to Jiaxing Industrial
Centralized processing facilities in
COD Sewage Treatment Plant through 1 79.439mg/L 500mg/L 0.03023t 13.97t/a None
the factory
municipal pipe after treatment
Zhejiang C&S Waste water
Discharge to Jiaxing Industrial
Ammonium Centralized processing facilities in
Sewage Treatment Plant through 1 2.7191mg/L 35mg/L 0.001035t 9.78t/a None
nitrate the factory
municipal pipe after treatment
Discharge to the Lvyuan Sewage
Treatment Plant in the zone after Main outlet of the zone (Lvyuan
COD 1 18mg/L ≤50mg/L 6.21t 26.068 t/a None
being treated by the plant Sewage Treatment Plant)
sewage treatment station
Tangshan C&S Waste water
Discharge to the Lvyuan Sewage
Ammonium Treatment Plant in the zone after Main outlet of the zone (Lvyuan
1 0.188mg/L ≤5mg/L 0.108t 2.55t/a None
nitrate being treated by the plant Sewage Treatment Plant)
sewage treatment station
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C&S Paper Co., Ltd. 2022 Annual Report
Discharge directly through the
Waste gas Nitrogen oxide 1 One chimney 19.6mg/m ≤30mg/m 1.93t 6.97t/a None
flue
Sewage treatment station in the
COD Discharge directly 1 32mg/L 80mg/L 64.138t 197.71t/a None
factory
Yunfu C&S Waste water
Ammonium Sewage treatment station in the
Discharge directly 1 0.092mg/L 8mg/L 5.907t 19.76t/a None
nitrate factory
Discharge indirectly (discharge Discharge to Biquan Sewage
to Biquan Sewage Treatment Treatment Plant after
COD 1 46mg/L ≤400mg/L 41t 152.25t/a None
Plant through municipal pipe pre-processing with centralized
after treatment) processing facilities in the factory,
Waste water
Discharge indirectly (discharge Discharge to Biquan Sewage
Ammonium to Biquan Sewage Treatment Treatment Plant after
1 0.468mg/L ≤30 mg/L 1.06t 15.25t/a None
nitrate Plant through municipal pipe pre-processing with centralized
after treatment) processing facilities in the factory,
Organized discharge (dedusting
PM (particulate by bag filter, desulfurization by
Hubei C&S 1 One chimney 9.2mg/m ≤30mg/m 7.919 t 28.63t/a None
matter) limestone-gypsum and
denitration by SNCR)
Organized discharge (dedusting
by bag filter, desulfurization by
Waste gas Sulfur dioxide 1 One chimney 16mg/m ≤200mg/m 110.217 t 203.87t/a None
limestone-gypsum and
denitration by SNCR)
Organized discharge (dedusting
by bag filter, desulfurization by
Nitrogen oxide 1 One chimney 41mg/m ≤200mg/m 76.22t 239.85t/a None
limestone-gypsum and
denitration by SNCR)
79
C&S Paper Co., Ltd. 2022 Annual Report
Treatment of pollution
(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, Sichuan 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: Six subsidiaries or branches in Jiangmen,
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 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
80
C&S Paper Co., Ltd. 2022 Annual Report
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.
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.
Investment in environmental governance and protection and payment of environmental protection taxes
During the reporting period, the Company and its subsidiaries and branches invested a total of RMB3.1709
million in environmental governance and protection, including testing costs, sludge disposal costs, hazardous
waste disposal costs and online operation and maintenance costs, and paid a total of RMB481,300 in
environmental protection taxes.
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 several cleaner production programs, which achieved tangible results and attained the expected goals
for cleaner production and carbon reduction.
Administrative penalties due to environmental issues during the reporting period
Name of company or Reason of Impact on production and Rectification
Violation Penalty result
subsidiary penalty operation of the listed measures of the
81
C&S Paper Co., Ltd. 2022 Annual Report
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.
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 2022 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 national enterprise with important social influence and a leading enterprise in the household paper industry,
the Company has actively fulfilled poverty alleviation and rural revitalization work during the reporting period.
Specifics are as follows:
1. The Company has donated medical surgical masks, children's masks, sanitary wipes, sanitary pads, paper
tissues and other materials to Yunfu, Jiangmen, Zhongshan, Jilin, Qingdao, Dongguan, Shenzhen, Weihai,
Shanghai and other regions, with a total market value of about RMB8 million.
2. Hubei C&S organized activities involving intangible cultural heritage during the Dragon Boat festival, to
promote the inheritance and protection of intangible cultural heritable. It also timely sent supplies to employees
during the pandemic lockdown period when the supplies were in shortage.
3. Jiangmen C&S donated RMB2,000 to help employees experiencing difficulties, and visited veteran party
members and local households in need in Shuangshui Town, donating funds and paper tissues to them; it also
visited needy families during the Dragon Boat Festival, and participated in the philanthropy activity of the Red
Cross and donated materials to families in difficulty worth RMB22,600.
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C&S Paper Co., Ltd. 2022 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
83
C&S Paper Co., Ltd. 2022 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
June 25, 2021 Completed
Longfang commitments last stock options. Besides, they promise to strictly conform to stock of the equity
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
Other commitments to August 28, 2014 Long-term
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.
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 -
Deng Yingzhong 2022 while still serving in the Company by then, any losses incurred from the May 07, 2021 Completed
commitments June 30, 2022
aforesaid stocks will be fully compensated by Mr. Deng Yingzhong while any
profits generated will entirely belong to the employee.
Deng Yingzhong, Other They promise not to reduce or pledge any shares they hold directly or indirectly May 10, 2021 -
May 09, 2021 Completed
Deng Guanbiao, commitments in the Company in any way from May 9, 2021 to May 30, 2022, including new May 30, 2022
84
C&S Paper Co., Ltd. 2022 Annual Report
Deng Guanjie shares added due to the transfer of capital reserve into share capital or
distribution of stock dividends for the aforementioned shares during the
commitment period. For any violation of the above commitment, all the
incurred earnings will belong to the Company.
He promises not to reduce any shares he or his parents, spouse or children hold
in the Company directly or indirectly in the Company in any way within 12
months from the last reduction of the Company’s shares in 2021 (i.e. February February 05,
Other
Zhou Qichao 5, 2021), including new shares added due to the transfer of capital reserve into July 10, 2021 2021 - February Completed
commitments
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
If there are
commitments not
fulfilled within the
specified period of Not applicable
time, specify reasons
for failure to do so and
follow-up work plans
85
C&S Paper Co., Ltd. 2022 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
VII. Description of Changes in the Scope of Consolidated Statements Compared with the
Financial Report of Last Year
√ Applicable □ Not applicable
On May 20, 2022, the Company and Zhongshan Zhongshun Trading Co., Ltd., a wholly owned subsidiary of the
Company, jointly invested and established Zhongshun Health Life Technology (Shenzhen) Co., Ltd., with a
registered capital of RMB10 million. The Company holds 60% of the shares while Zhongshan Trading holds 40%
of the shares. The Company has incorporated Zhongshun Health into the scope of its consolidated statements
since June 2021. Zhongshun Health has not started operating activities.
On October 13, 2022, the Company and Guangzhou Zhihecheng New Material Technology Co., Ltd., Guangdong
86
C&S Paper Co., Ltd. 2022 Annual Report
Huichuang Zhiyuan Enterprise Management Co., Ltd., Jiangmen Yutongda Trading Co., Ltd. joint invested and
established Guangdong Huashun Material Technology Co., Ltd., with a registered capital of RMB20 million. The
Company holds 51% of the shares, Guangzhou Zhihecheng New Material Technology Co., Ltd. holds 28%,
Guangdong Huichuang Zhiyuan Enterprise Management Co., Ltd. holds 14.50% of the shares while Jiangmen
Yutongda Trading Co., Ltd. holds 6.50% of the shares. The Company has incorporated Guangdong Huashun
Material Technology Co., Ltd. into the scope of its consolidated statements since October 2022. Currently,
Guangdong Huashun Material Technology Co., Ltd. has started operating activities.
In June 2022, the Company withdraw its investment in Guiyang Dolemi Sanitary Products Co., Ltd., and no
longer incorporated it into the scope of consolidated statements. On August 6, 2021, Dolemi Sanitary Products Co.,
Ltd. 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.
In October 2022, the Company withdraw its investment in Luzhou Dolemi Sanitary Products Co., Ltd., and no
longer incorporated it into the scope of consolidated statements. On May 20, 2021, Dolemi Sanitary Products Co.,
Ltd. 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.
In October 2022, the Company withdraw its investment in Mianyang Dolemi Sanitary Products Co., Ltd., and no
longer incorporated it into the scope of consolidated statements. On June 08, 2021, Dolemi Sanitary Products Co.,
Ltd. 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.
In October 2022, the Company withdraw its investment in Dazhou Dolemi Sanitary Products Co., Ltd., and no
longer incorporated it into the scope of consolidated statements. On July 14, 2021, Dolemi Sanitary Products Co.,
Ltd. 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.
In October 2022, the Company withdraw its investment in Zhanjiang Dolemi Sanitary Products Co., Ltd., and no
longer incorporated it into the scope of consolidated statements. On August 18, 2021, Dolemi Sanitary Products
Co., Ltd. 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.
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) 170
87
C&S Paper Co., Ltd. 2022 Annual Report
Consecutive years of auditing service provided by the domestic
4
accounting firm
Name of domestic certified public accountants Jiang Chaojie, Pan Guiquan
Consecutive years of auditing service provided by domestic
Jiang Chaojie (1 year), Pan Guiquan (4 years)
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
Hearing results and
Basic information of the involved Whether projected Litigation (arbitration) judgment of
influences of the
litigation (arbitration) (RMB liabilities were incurred progress the litigation
litigation (arbitration)
10,000) (arbitration)
The verdict of first
Zhongshan Trading v.
The first instance instance came into The first round
Guangzhou Yingjing Trade
31.36 No supported all the claims force. Zhongshan of execution
Co., Ltd. over sales contract
by Zhongshan Trading. Trading has applied ended.
dispute
for execution.
Zhongshan Trading v. The verdict of second
Both the first instance
Shenzhen Yongxinghua instance came into
and the second instance
Trading Co., Ltd., Feng, & 660.37 No force. Zhongshan In execution
ruled that Zhongshan
Liang over sales contract Trading has applied
Trading won the case.
dispute for execution.
Zhongshan Trading v. Both the first instance The verdict of second
Shanghai Tongli Trading 2,932.01 No and the second instance instance came into In execution
Co., Ltd. and eight natural ruled that Zhongshan force. Zhongshan
88
C&S Paper Co., Ltd. 2022 Annual Report
person defendants including Trading won the case. Trading has applied
Liu over sales contract for execution.
dispute
Zhongshan Trading v. The verdict came into
The first instance First round of
Guangzhou Jv Se Mai Ke force. Zhongshan
28.55 No supported all the claims execution
Internet Service Co., Ltd. Trading has applied
by Zhongshan Trading. ended.
over sales contract dispute for execution.
The counterparty has
not fulfilled
The case was mediated
Xiaogan C&S v. Wuhan obligation in line with
and closed in the first
Xincheng Tongda Trading the paper of civil
525.16 No instance (with a In execution
Co., Ltd. over sales contract mediation
mediation amount of
dispute enforcement. Xiaogan
RMB4.4961 million).
C&S has applied for
execution.
The first instance has The verdict came into
Yunfu C&S v. Yu over sales
31.08 No ruled in favor of the force. Yunfu C&S has In execution
contract dispute
company. applied for execution.
Chongqing Xianshida No (Note: Whether
Human Resources projected liabilities will The first instance is The first instance is
Management Co., Ltd. v. 30 be incurred cannot be being heard; pending being heard; pending Not applicable
C&S Paper over service determined prior to the judgment judgment
contract dispute verdict.)
Zhongshan Trading v. Hefei
The first instance has The first instance has
Suning Fresh Food
accepted the case; accepted the case;
Supermarket Procurement 475.27 No Not applicable
pending trial and pending trial and
Co., Ltd. over right to claims
judgment judgment
of bills
The counterparty has
not fulfilled
Tangshan C&S v. Lijiang The case was mediated obligation in line with
Yile Hotel Management Co., 3.1 No and closed in the first the paper of civil In execution
Ltd. over arrear dispute instance mediation, Tangshan
C&S has applied for
execution.
The verdict of first
Tangshan C&S v.
The first instance instance came into First round of
Huangshan Langshuo Hotel
7.97 No supported all the claims force. Tangshan C&S execution
Management Co., Ltd. over
by Tangshan C&S. has applied for ended.
arrear dispute
execution.
Arbitration: awarded;
Chen v. Zhongshan Trading Yes (Note: The final The Company
20.22 First instance: Not applicable
over labor dispute amount is subject to the appealed, pending
adjudicated; Second
89
C&S Paper Co., Ltd. 2022 Annual Report
effective ruling) instance: The Company hearing
appealed, pending
hearing
The labor arbitration
committee has held
hearing and made an
Yes(Note: The final
Yang v. Tangshan C&S over award; the counterparty
18.6 amount is subject to the Pending judgment Not applicable
labor dispute appealed and the first
effective ruling)
instance court has held
hearing, with result
pending
The case was mediated The case was
Ha v. Sichuan C&S over the
14.18 No and closed in the first mediated and case Case closed
right to life, body, and health
instance closed.
No (Note: Whether
projected liabilities will Labor arbitration
Xiao v. Sichuan C&S over
10.76 be incurred cannot be committee has held Pending award Not applicable
labor dispute
determined prior to the hearing
verdict)
Yao v. Sichuan C&S over Yao has withdrawn
Yao has withdrawn the
labor dispute (Determine 0 No the lawsuit and case Case closed
lawsuit.
labor relations) closed.
Yao v. Sichuan C&S over Yao has withdrew the
Yao has withdrawn the
labor dispute (Determine 0 No lawsuit and case Case closed
lawsuit.
labor relations) closed.
Labor arbitration
Chen v. Sichuan C&S over Arbitration award,
14 Yes (Note:RMB4312.58) committee has held Case closed
labor dispute executed
hearing.
Hubei C&S v. BBK
Both parties have
Commercial Chain Co., Ltd. Hubei C&S withdrew
3,018.18 No reached a settlement Case closed
over sales contract dispute the lawsuit.
agreement
(commercial arbitration)
Zhongshan Trading v.
The case was settled and
Guangzhou Xiangxue The deposit had been
2 No the Company withdrew Case closed
Pharmaceutical Co., Ltd. recovered
the lawsuit
over sales contract dispute
Sichuan C&S v. Carrefour
(Shanghai) Supply Chain Arbitration committee
Management Co., Ltd. has accepted the case; Pending hearing and
194.27 No Not applicable
Sichuan Branch over sales pending hearing and judgment
contract dispute judgment
(commercial arbitration)
Tangshan C&S v. Carrefour
Carrefour Shenyang
Shenyang Branch over sales The court withdrew
433 No Branch raised a Case closed
contract dispute (first the lawsuit
jurisdictional objection
instance)
Tangshan C&S v. Carrefour Arbitration committee
Pending hearing and
Shenyang Branch over sales 433 No has accepted the case; Not applicable
judgment
contract dispute pending hearing and
90
C&S Paper Co., Ltd. 2022 Annual Report
(commercial arbitration) judgment
Hubei C&S v. Carrefour
(Shanghai) Supply Chain
Carrefour Shanghai
Management Co., Ltd. The court withdrew
8 No Branch raised a Case closed
Ezhou Branch over sales the lawsuit
jurisdictional objection
contract dispute (first
instance)
Yunfu C&S v. Guangxi
Nancheng Department Store The Company
1,170.29 No The case was settled. Case closed
Co., Ltd. over sales contract withdrew the lawsuit
dispute
Sichuan C&S v. Sichuan
BBK Commercial Co., Ltd. The Company
526.46 No The case was settled. Case closed
over sales contract dispute withdrew the lawsuit
(commercial arbitration)
C&S v. Zhongshan Deyi The first instance court
Enterprise Management has accepted the case; Execute according to
Services Co., Ltd. over 3,899.2 No the two parties have the settlement In execution
property sales contract reached a settlement agreement
dispute agreement.
Sichuan C&S v. Xi'an The mediation
Minsheng Department Store Mediation reached in agreement has come
5.65 No Case closed
Management Co., Ltd over the first instance. into effect and has
contract dispute been executed.
Labor arbitration
committee has held
No (Note: Whether
hearing and made an
projected liabilities will Pending the hearing
Chen v. Zhejiang C&S over award; both parties have
11.18 be incurred cannot be of the first instance Not applicable
labor dispute filed for lawsuit with the
determined prior to the court
court; the court has
verdict)
accepted the case;
pending court hearing
Labor arbitration
committee has held
No (Note: Whether
hearing and made an
projected liabilities will
Yin v. C&S over labor award; the counter party Pending trial of the
8.1 be incurred cannot be Not applicable
dispute has filed for lawsuit first instance court
determined prior to the
with the first instance
verdict)
court; the court has
accepted the case;
The first instance
court has made a
Li v. Tangshan C&S over The first instance court
6.58 Yes(Note: RMB 2697.67) verdict which has Case closed
labor dispute has held hearing.
come into force and
has been executed.
No (Note: Whether
projected liabilities will The labor arbitration
Yan v. Jiangmen C&S over
12.14 be incurred cannot be committee has held Pending award Not applicable
labor dispute
determined prior to the hearing; pending award
verdict)
Liu v. Sichuan C&S over 19.8 No (Note: Whether The labor arbitration The labor arbitration Not applicable
91
C&S Paper Co., Ltd. 2022 Annual Report
labor dispute projected liabilities will committee has held committee has
be incurred cannot be hearing; pending award accepted the case;
determined prior to the pending hearing
verdict)
No (Note: Whether
projected liabilities will The labor arbitration
Xuan v. Sichuan C&S over
28.75 be incurred cannot be committee has held Pending award Not applicable
labor dispute
determined prior to the hearing; pending award
verdict)
Shenzhen Sangtek
Technology Co., Ltd. v. The case was mediated The case was
6.95 No Case closed
C&S Paper over service and closed. mediated and closed.
contract dispute
No (Note: Whether
Jiaxing Jinhui Loading and
projected liabilities will
Unloading Co., Ltd. v. The case is being Pending trial of the
72.77 be incurred cannot be Not applicable
Zhejiang C&S over service mediated before trial. first instance court
determined prior to the
contract dispute
verdict)
C&S v. China National
Intellectual Property
The first instance
Administration over
court has made a
administrative dispute for First instance has made
0 No verdict which has Case closed
reexamination after judgment.
come into force and
trademark application
has been executed.
rejection (trade mark
number 53017615)
C&S v. China National
Intellectual Property
The first instance
Administration over
court has made a
administrative dispute for First instance has made
0 No verdict which has Case closed
reexamination after judgment.
come into force and
trademark application
has been executed.
rejection (trade mark
number 53022896)
Guangxi Zhongxin v. China
National Intellectual The first instance
Property Administration for court has made a
First instance has made
administrative litigation over 0 No verdict which has Case closed
judgment.
trademark invalidation come into force and
(Trademark No.: 8262105) has been executed.
(C&S is the third party)
Guangxi Zhongxin v. China
National Intellectual
The first instance court
Property Administration for
has held hearing, and
administrative litigation over 0 No Pending judgment Not applicable
the Company joined as
trademark invalidation
the third party.
(Trademark No.: 10553966)
(C&S is the third party)
Guangxi Zhongxin v. China
National Intellectual
Property Administration for
The case is being
administrative litigation over 0 No No progress yet Not applicable
mediated before trial
reexamination of trademark
revocation (Trademark No.:
10553966) (C&S is the third
92
C&S Paper Co., Ltd. 2022 Annual Report
party)
C&S v. China National
Intellectual Property
The Company
Administration for
First instance has made appealed
administrative litigation over 0 No Not applicable
judgment. And pending second
reexamination of trademark
trial
application rejection
(Trademark No.: 59641521)
No (Note: Whether
The arbitration
projected liabilities will
Miao v. Tangshan C&S over committee has accepted
0 be incurred cannot be Pending hearing Not applicable
labor dispute the case; pending
determined prior to the
hearing
verdict)
The case was mediated
Peng v. Zhongshan Trading
0.25 No and closed in the Case closed Case closed
over labor dispute
arbitration.
The case was mediated
Chen v. Yunfu C&S over
10.77 No and closed in the Case closed Case closed
labor dispute
arbitration.
Hubei C&S v. BBK The arbitration
Commercial Chain Co., Ltd. committee has accepted Pending hearing and
293.65 No Not applicable
over sales contract dispute the case; pending judgment
(commercial arbitration) hearing and judgment
Jiangmen Lianming Jingyi
Machinery Equipment Co., The case was mediated
144.6 No Case closed Case closed
Ltd. v. Yunfu C&S over and closed.
contract dispute
No (Note: Whether
Zhongshan Haolianhuang
projected liabilities will
Trading Co., Ltd. v. C&S The first instance court
200 be incurred cannot be Pending judgment Not applicable
Paper over confirmation of has held hearing.
determined prior to the
contract validity
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
Party of Related Type of Content Pricing Price of Amount of Proporti Approved Wheth Settlem Availabl Date of Index
93
C&S Paper Co., Ltd. 2022 Annual Report
related relations related of rules of related related on in the transaction er to ent of e market disclos of
party hip party related related party party amount limit outstri related prices ure disclos
transacti transacti party party transacti transaction of (RMB10,0 p the party for ure
on on transacti transacti ons (RMB10,0 similar 00) approv transacti similar
on on 00) transacti ed on transacti
ons limit ons
Deng
Yingzho Actual
ng, controlle Market Transfer Decem
Market Market 2021-1
Deng r of the Lease Rental fair 351.58 14.95% 351.58 No settleme ber 01,
fair price fair price 45
Guanbia Compan price nt 2021
o, Deng y
Guanjie
Deng
Yingzho Actual
ng, controlle Market Transfer
Market Market
Deng r of the Lease Rental fair 1.3 0.06% Yes settleme
fair price fair price
Guanbia Compan price nt
o, Deng y
Guanjie
A
company
in which
the son
Pengzho
of the Daily
u
Compan operatio Market Transfer
Enjoyin Sale of Market Market
y’s Vice n fair 0.83 0.00% Yes settleme
g Life goods fair price fair price
Presiden transacti price nt
Trading
t Yue on
Co., Ltd.
Yong
holds
50%
equity
A
company
Sichuan in which
Daily
West the son
operatio Market Transfer
Enjoyin of the Sale of Market Market
n fair 0.01 0.00% Yes settleme
g Life Compan goods fair price fair price
transacti price nt
Trading y’s Vice
on
Co., Ltd. Presiden
t Yue
Yong
94
C&S Paper Co., Ltd. 2022 Annual Report
holds
50%
equity
Total -- -- 353.72 -- 353.72 -- -- -- -- --
Details of returns of large sales Not applicable
Where the total amount of daily
Among the excessive amounts of related party transactions in the reporting period, RMB13,000
related-party transactions occurred in
is for renting properties from the related party, RMB8,400 is for the sales of goods to the related
the current period is estimated by
party. They fall within the authority of the Chairman of the Company and can be implemented
category, actual performance during
without the approval of the Board of Directors.
the reporting period (if any)
Reason(s) for a large difference
between the transaction price and the Exercise at fair price
market reference price (if applicable)
2. Related party transactions relating to acquisition and sale of assets or equity
□ Applicable √ Not applicable
During the reporting period, there was no related party transaction relating to acquisition and sale of assets or equity.
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.
95
C&S Paper Co., Ltd. 2022 Annual Report
7. Other significant related party transactions
√ Applicable □ Not applicable
The Company, together with Guangzhou Zhihecheng New Material Technology Co., Ltd., Guangdong Huichuang Zhiyuan Enterprise
Management Co., Ltd., and Jiangmen Yutongda Trading Co., Ltd., jointly invested and established "Guangdong Huashun Material
Technology Co., Ltd." (hereinafter referred to as "Huashun Technology"), engaged in the research and development, production, and
sales of low-carbon packaging new paper-based materials. Huashun Technology has a registered capital of RMB20 million, and the
Company invested RMB10.2 million with its own funds, with a shareholding ratio of 51%. Huashun Technology has completed the
industrial and commercial registration procedures in October 2022. For specific details, please refer to the relevant announcement
released by the Company on the designated information disclosure media CNINFO.
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
During the reporting period, there was no contracting.
(3) Leasing
√ Applicable □ Not applicable
Description of leasing matters
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, on which the Proposal on Daily Related
Party Transactions 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, 2022 to December 31, 2023, and
the total rent involved is RMB7,031,600. 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.
Projects whose profits or losses brought to the Company reached more than 10% of the total profits of the Company during the
96
C&S Paper Co., Ltd. 2022 Annual Report
reporting period
□ Applicable √ Not applicable
During the reporting period, there were no leasing projects whose profits or losses brought to the Company reached more than 10%
of the total profits of the Company during the reporting period.
2. Material guarantee
√ Applicable □ Not applicable
Unit: RMB10,000
External guarantee of the Company and subsidiaries (excluding guarantee for subsidiaries)
Disclosure
date of Whether Whether
Counter
Name of relevant Actual date Actual it has it is
Guarantee Guarantee Collateral guarant Guarantee
guarantee announcem of guarantee been related
limit type (if any) ee (if period
object ent on occurrence amount complete party
any)
guarantee d guarantee
limit
Joint
Joint and and
Wuhan
Jierou November September several several 2022.9.26
15,000 6,700 None -2023.11. None None
E-commerc 30, 2021 26,2022 liability liability
3
e Co., Ltd
guarantee guarant
ee
Joint
Joint and and
Shanghai
Junmeng November September several several 2022.9.27
23,500 0 None -2023.11. None None
E-commerc 30, 2021 27,2022 liability liability
4
e Co., Ltd
guarantee guarant
ee
Total approved amount Total actual amount of
of external guarantee external guarantee
38,500 6,700
during the reporting during the reporting
period (A1) period (A2)
Total approved amount
Total actual guarantee
of external guarantee at
38,500 balance at the end of the 6,700
the end of the reporting
reporting period (A4)
period (A3)
Guarantee of the Company for subsidiaries
Disclosure Whether Whether
Counter
Name of date of Actual date Actual it has it is
Guarantee Guarantee Collateral guarant Guarantee
guarantee relevant of guarantee been related
limit type (if any) ee (if period
object announcem occurrence amount complete party
any)
ent on d guarantee
97
C&S Paper Co., Ltd. 2022 Annual Report
guarantee
limit
Joint and
2022.11.2
Zhongshan November November several
15,000 0 None None 3-2026.11 No No
Trading 30, 2021 23, 2022 liability
.9
guarantee
Joint and
Zhongshan December March 02, several 2021.3.2-
13,600 11,394.77 None None No No
Trading 15, 2020 2021 liability 2026.3.1
guarantee
Joint and
Zhongshan November December several 2022.12.8
30,000 0 None None -2025.12. No No
Trading 30, 2021 08, 2022 liability
31
guarantee
Joint and
2022.12.2
Zhongshan November December several
15,000 2,942.58 None None 3-2026.9. No No
Trading 30, 2021 23, 2022 liability
22
guarantee
Joint and
Zhongshan December August 21, several 2021.8.21
50,000 7,313.66 None None -2025.5.1 No No
Trading 15, 2020 2021 liability
1
guarantee
Joint and
Zhongshan November May 17, several 2022.5.17
20,000 10,000 None None -2030.2.2 No No
Trading 30, 2021 2022 liability
7
guarantee
Joint and
Zhongshan November August 18, several 2022.8.18
20,000 7,700 None None -2030.12. No No
Trading 30, 2021 2022 liability
31
guarantee
Joint and
Jiangmen November November several 2022.11.2
12,000 1,862.92 None None 3-2026.11 No No
C&S 30, 2021 23, 2022 liability
.7
guarantee
Joint and
Jiangmen November March 01, several 2022.3.1-
15,000 0 None None No No
C&S 30, 2021 2022 liability 2025.2.13
guarantee
Joint and 2022.3.25
Jiangmen November March 25,
5,000 2,802.24 several None None -2025.12. No No
C&S 30, 2021 2022
liability 31
98
C&S Paper Co., Ltd. 2022 Annual Report
guarantee
Joint and
Jiangmen December December several 2020.12.2
5,000 0 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
November November several 2022.11.2
Yunfu C&S 20,000 1,466.42 None None 3-2026.11 No No
30, 2021 23, 2022 liability
.7
guarantee
Joint and
November March 01, several 2022.3.1-
Yunfu C&S 7,000 0 None None No No
30, 2021 2022 liability 2025.2.13
guarantee
Joint and
November April 24, several 2022.4.24
Yunfu C&S 5,000 1,368.16 None None -2027.2.2 No No
30, 2021 2022 liability
4
guarantee
Joint and
November March 25, several 2022.3.25
Yunfu C&S 8,000 4,786.46 None None -2025.12. No No
30, 2021 2022 liability
31
guarantee
Joint and
December December several 2021.12.3
Hubei C&S 10,000 0 None None -2026.9.2 No No
15, 2020 03, 2021 liability
9
guarantee
Jiangmen
Joint and
C&S, 2022.1.17
November January 17, several
Yunfu C&S 22,000 0 None None -2026.1.1 No No
30, 2021 2022 liability
and Hubei 7
guarantee
C&S
Zhongshan Joint and
November April 06, 2022.4.6-
Trading, 15,000 0 several None None No No
30, 2021 2022 2026.3.2
Sichuan liability
99
C&S Paper Co., Ltd. 2022 Annual Report
C&S, guarantee
Yunfu C&S
and
Jiangmen
C&S
Zhongshan
Joint and
Trading,
December June 01, several 2021.6.1-
Hubei C&S 10,372.5 0 None None No No
315, 2020 2021 liability 2023.4.22
and Macao
guarantee
C&S
C&S Hong
Kong,
Zhong Joint and
Shun November November several 2022.11.1
34,575 16,327.98 None None 4-2027.7. No No
Internationa 30, 2021 14, 2022 liability
31
l and guarantee
Macao
C&S
C&S Hong Joint and
Kong and December September several 2021.9.8-
17,975.65 0 None None No No
Macao 15, 2020 08, 2021 liability 2024.9.8
C&S guarantee
C&S Hong Joint and
Kong and December March 17, several 2021.3.17
35,420 0 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 43,910.25 37,375.93 None None -2024.2.1 No No
05, 2019 12, 2020 liability
Internationa 2
guarantee
l, Macao
C&S
Joint and
2022.11.1
C&S Hong November November several
6,915 6,477.22 None None 7-2029.10 No No
Kong, 30, 2021 17, 2022 liability
.28
guarantee
Joint and
2022.11.1
Macao November November several
6,915 6,738.05 None None 7-2029.10 No No
C&S 30, 2021 17, 2022 liability
.28
guarantee
C&S Hong December 16,596 March 27, 9,253.51 Joint and None None 2020.3.27 No No
100
C&S Paper Co., Ltd. 2022 Annual Report
Kong, 05, 2019 2020 several -2025.8.2
2
Macao liability
C&S guarantee
C&S Hong
Kong,
Joint and
Zhong 2020.1.30
December January 30, several
Shun 20,745 0 None None -2024.1.3 No No
05, 2019 2020 liability
Internationa 0
guarantee
l, Macao
C&S
Joint and
2018.3.23
Macao December March 23, several
7,606.5 3,216.66 None None -2024.9.2 No No
C&S 15, 2017 2018 liability
3
guarantee
Joint and
Macao December August 15, several 2018.8.15
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
20,745 14,203.75 None None 2-2024.10 No No
C&S 15, 2020 12, 2021 liability
.20
guarantee
Joint and
C&S Hong November September several 2022.9.1-
13,830 0 None None No No
Kong 30, 2021 01, 2022 liability 2024.9.1
guarantee
C&S Hong
Kong,
Joint and
Zhong
November September several 2020.9.1-
Shun 24,202.5 820.12 None None No No
30, 2021 01, 2020 liability 2024.7.9
Internationa
guarantee
l, Macao
C&S
Total approved amount Total actual amount of
of guarantee for guarantee for
271,235 62,472.03
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
567,408.4 146,850.43
subsidiaries at the end of the end of the reporting
the reporting period (B3) period (B4)
101
C&S Paper Co., Ltd. 2022 Annual Report
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 309,735 69,172.03
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 605,908.4 153,550.43
reporting period
reporting period (A3 + B3 + C3)
(A4+B4+C4)
Proportion of the total actual amount of guarantee
29.65%
(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 78,666.4
exceeds 70% (E)
Amount of guarantees in excess of 50% of net
0
assets (F)
Total amount of the above three guarantees (D + E
78,666.4
+ F)
Description of situations that the guarantee
liability has occurred or there is evidence showing
that the Company may be jointly and severally None
liable for undue guarantee contracts during the
reporting period (if any)
Description of providing external guarantee in
None
violation of prescribed procedures (if any)
Detailed description on the guarantees with different types: None
102
C&S Paper Co., Ltd. 2022 Annual Report
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
Source of entrusted Incurred amount of Amount overdue but not
Undue Amount overdue
Specific type wealth management entrusted wealth recovered with impairment
balance but not recovered
funds management having been accrued
Wealth management
product of securities Self-owned fund 2,801.1 2,300.1 0 0
company
Wealth management
Self-owned fund 2,000 0 0 0
product of bank
Total 4,801.1 2,300.1 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. 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
103
C&S Paper Co., Ltd. 2022 Annual Report
fully compensated by Mr. Deng Yingzhong while any profits generated will entirely belong to the employee.” As
of June 3, 2022, the commitment has been fulfilled. For details, please refer to the Announcement on the
Completion of the Actual Controller’s Commitment Regarding Employees’ Increase of Company Shares
(Announcement No. 2022-23).
XVII. Significant Events of Subsidiaries of the Company
√ Applicable □ Not applicable
1. High-tech enterprise certification
The Certificate of High-tech Enterprise of Jiangmen C&S Paper Co., Ltd. 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) The subsidiaries Chengdu C&S, Jiangmen C&S, Jiangsu C&S, and Hangzhou Trading changed their
respective legal representatives due to business development needs. The subsidiaries completed relevant industrial
and commercial change registration and obtained the new business license in February, March, June, and July
2022, respectively.
(2) The subsidiary Zhong Shun International changed its business address due to business development needs in
June 2022.
3. Dazhou C&S project
Construction of the first phase of Dazhou C&S’s 100,000-ton household paper production line was initiated in
July 2022.
104
C&S Paper Co., Ltd. 2022 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
Bonus transferred
Number Percentage shares Others Subtotal Number Percentage
shares from surplus
issued
reserve
I. Shares subject to
27,560,600 2.10% 951,000 -8,785,472 -7,834,472 19,726,128 1.50%
selling restrictions
1. Shares held by the
state
2. Shares held by
state-owned legal
person
3. Shares held by
other domestic 26,965,000 2.05% 951,000 -8,521,297 -7,570,297 19,394,703 1.47%
shareholders
Including: Shares
held by domestic legal
persons
Shares held
by domestic natural 26,965,000 2.05% 951,000 -8,521,297 -7,570,297 19,394,703 1.47%
persons
4. Shares held by
595,600 0.05% -264,175 -264,175 331,425 0.03%
foreign shareholders
Including: Shares
held by foreign legal
persons
Shares held
by foreign natural 595,600 0.05% -264,175 -264,175 331,425 0.03%
persons
II. Shares without
1,285,030,233 97.90% 2,009,288 8,144,956 10,154,244 1,295,184,477 98.50%
selling restrictions
105
C&S Paper Co., Ltd. 2022 Annual Report
1.
RMB-denominated 1,285,030,233 97.90% 2,009,288 8,144,956 10,154,244 1,295,184,477 98.50%
ordinary shares
2. Domestic listed
foreign shares
3. Overseas listed
foreign shares
4. Others
III. Total number of
1,312,590,833 100.00% 2,960,288 -640,516 2,319,772 1,314,910,605 100.00%
shares
Explanation on changes in shares
√ Applicable □ Not applicable
1. During the reporting period, vesting incentive recipients of stock options awarded in the first grant under the
2018 Stock Option and Restricted Stock Incentive Plan exercised the rights of 2,929,083 shares, and recipients of
reserved stock options exercised the rights of 31,205 shares; a total of 2,960,288 shares were exercised. As a result,
the Company’s total share capital increased by 2,960,288 shares.
2. During the reporting period, in the second unlock period for the reserved restricted shares awarded under the
2018 Stock Option and Restricted Stock Incentive Plan, six incentive recipients lost the incentive qualification
since they left the Company prior to the unlock; meanwhile, eleven incentive recipients could only unlock a
proportion of the shares since they passed the performance appraisal but failed to get a full mark. For the involved
17 incentive recipients due to the foregoing reasons, a total of 139,428 restricted shares needed to be repurchased
and canceled. As of March 15, 2022, the repurchase and cancellation procedures had been completed for the
aforesaid restricted shares. As a result, the Company’s total share capital decreased by 139,428 shares.
3. During the reporting period, in the third unlock period for the first-granted restricted shares under the 2018
Stock Option and Restricted Stock Incentive Plan, 34 incentive recipients lost the incentive qualification since
they left the Company prior to the unlock; meanwhile, 37 incentive recipients could only unlock a proportion of
the shares since they passed the performance appraisal but failed to get a full mark; one incentive recipient lost the
incentive qualification since he/she failed the performance appraisal while one incentive recipient was no longer
entitled to incentives since he/she had been elected as the supervisor of the Company. For the involved 73
incentive recipients due to the foregoing reasons, a total of 501,088 restricted shares needed to be repurchased and
canceled. As of September 22, 2022, the repurchase and cancellation procedures had been completed for the
aforesaid restricted shares. As a result, the Company’s total share capital decreased by 501,088 shares.
Approval of changes in shares
√ Applicable □ Not applicable
1. 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
106
C&S Paper Co., Ltd. 2022 Annual Report
session of the Board of Supervisors.
2. 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 14th meeting of the fifth session of the Board of Directors, the 9th meeting of the fifth session of the Board
of Supervisors, the 17th meeting of the fifth session of the Board of Directors, and the 12th meeting of the fifth
session of the Board of Supervisors.
3. The Board of Directors’ disposition of the repurchase and deregistration matters for the second 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 12th meeting of the fifth session
of the Board of Directors, 7th meeting of the fifth session of the Board of Supervisors and the 2021 Six
Extraordinary General Meeting.
4. The Board of Directors’ disposition of the repurchase and deregistration matters for the third unlocking of
first-grant 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 14th meeting of the fifth
session of the Board of Directors, 9th meeting of the fifth session of the Board of Supervisors and the 2022 First
Extraordinary General Meeting.
Transfer of title of changed shares
√ Applicable □ Not applicable
Refer to “Explanation on changes in shares”.
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
Given that the Company's total share capital increased from 1,312,590,833 shares to 1,314,910,605 shares during the
reporting period, the 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 were diluted accordingly.
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
Increase in Number of Number of
Number of
shares shares shares
shares subject
subject to released from subject to
Shareholder’s to selling Date of release from
selling selling selling Reason for Selling restrictions
name restrictions at selling restrictions
restrictions restrictions restrictions
the beginning
during the during the at the end of
of the period
period period the year
Deng Lock-up shares of senior Selling restrictions
5,064,608 5,064,608
Yingzhong management were released
107
C&S Paper Co., Ltd. 2022 Annual Report
Lock-up shares of senior according to relevant
Liu Peng 45,975 45,975
management regulations on the
shareholding of
Deng Lock-up shares of senior
3,718,105 3,718,105 directors, supervisors
Guanbiao management
and senior
Lock-up shares of senior
Deng Guanjie 900,730 900,730 management.
management
Lock-up shares of senior
management; the increase in
restricted shares is due to the
Zhang Yang 37,500 120,000 157,500 locking of unlocked restricted
shares proportional to the
position of the senior
management.
Lock-up shares of senior
management; the increase in
restricted shares is due to the
Yue Yong 7,463,305 330,000 544,375 7,248,930 locking of unlocked restricted
shares proportional to the
position of the senior
management.
Lock-up shares of senior
management; the increase in
restricted shares is due to the
Zhao Ming 6,250 20,000 26,250 locking of unlocked restricted
shares proportional to the
position of the senior
management.
Lock-up shares of senior
management; the increase in
restricted shares is due to the
Lin Tiande 212,141 26,000 238,141 locking of unlocked restricted
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 restricted
Dong Ye 122,794 75,000 197,794
shares and exercised stock
options proportional to the
position of the senior
management.
108
C&S Paper Co., Ltd. 2022 Annual Report
Lock-up shares of senior
Chen Haiyuan 12,675 12,675
management
Lock-up shares of senior
Zhang Gao 32,000 32,000
management
Li Lock-up shares of senior
Zhaojin(resign 8,100 2,700 10,800 management
ed)
Liu Jinfeng Lock-up shares of senior
1,375,912 357,132 1,018,780
(resigned) management
Deng Lock-up shares of senior
Wenxi(resigne 15,825 15,825 management
d)
Li Youquan Lock-up shares of senior
44,400 11,100 33,300
(resigned) management
Zhou Qichao Lock-up shares of senior
374,072 93,518 280,554
(resigned) management
Lock-up shares of senior
management; the increase in
restricted shares is due to the
Ye Longfang
150,000 112,500 37,500 225,000 locking of unlocked restricted
(resigned)
shares proportional to the
position of the senior
management.
Dai Zhenji Lock-up shares of senior
427,500 106,875 320,625
(resigned) management
The shares need to be The repurchase and
Equity
repurchased and canceled due to cancellation procedures
incentive 7,548,708 7,370,172 178,536
nonconforming to unlocking were completed in
recipients
conditions. February 2023.
Total 27,560,600 686,200 8,520,672 19,726,128 -- --
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
109
C&S Paper Co., Ltd. 2022 Annual Report
1. During the reporting period, vesting incentive recipients of stock options awarded in the first grant under the
2018 Stock Option and Restricted Stock Incentive Plan exercised the rights of 2,929,083 shares, and recipients of
reserved stock options exercised the rights of 31,205 shares; a total of 2,960,288 shares were exercised. As a result,
the Company’s total share capital increased by 2,960,288 shares.
2. During the reporting period, in the second unlock period for the reserved restricted shares awarded under the
2018 Stock Option and Restricted Stock Incentive Plan, six incentive recipients lost the incentive qualification
since they left the Company prior to the unlock; meanwhile, eleven incentive recipients could only unlock a
proportion of the shares since they passed the performance appraisal but failed to get a full mark. For the involved
17 incentive recipients due to the foregoing reasons, a total of 139,428 restricted shares need to be repurchased
and canceled. As of March 15, 2022, the repurchase and cancellation procedures had been completed for the
aforesaid restricted shares. As a result, the Company’s total share capital decreased by 139,428 shares.
3. During the reporting period, in the third unlock period for the first-granted restricted shares under the 2018
Stock Option and Restricted Stock Incentive Plan, 34 incentive recipients lost the incentive qualification since
they left the Company prior to the unlock; meanwhile, 37 incentive recipients could only unlock a proportion of
the shares since they passed the performance appraisal but failed to get a full mark; one incentive recipient lost the
incentive qualification since he/she failed the performance appraisal while one incentive recipient was no longer
entitled to incentives since he/she had been elected as the supervisor of the Company. For the involved 73
incentive recipients due to the foregoing reasons, a total of 501,088 restricted shares needed to be repurchased and
canceled. As of September 22, 2022, the repurchase and cancellation procedures had been completed for the
aforesaid restricted shares. As a result, the Company’s total share capital decreased by 501,088 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
Total number of preferred
Total number of
preferred shareholders whose
Total number ordinary
shareholders voting rights were
of ordinary shareholders at
whose voting resumed at the end
shareholders as the end of the
121,339 117,225 rights were 0 of the month 0
at the end of month preceding
resumed at the end preceding the
the reporting the disclosure
of the reporting disclosure date of
period date of the
period (if any) (see the annual report
annual report
Note VIII) (if any) (see Note
VIII)
110
C&S Paper Co., Ltd. 2022 Annual Report
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
Share
Zhongshun Paper non-state-owned 28.69% 377,195,570 377,195,570
increase
Group Co., Ltd. legal person
Foreign legal
Chung Shun Co. 20.27% 266,504,789 266,504,789
person
Hong Kong
Foreign legal Share
Securities Clearing 3.71% 48,800,217 48,800,217
person reduction
Co., Ltd.
Ernest Partners
Foreign legal
LLC — Client 0.79% 10,402,100 10,402,100
person
funds
Domestic natural
Yue Yong 0.74% 9,665,241 7,248,930 2,416,311
person
Domestic natural
Deng Yingzhong 0.51% 6,752,811 5,064,608 1,688,203
person
ABC — CSI Share
Others 0.50% 6,522,889 6,522,889
Smallcap 500 ETF increase
# Zhongshan
Domestic
Xinda Investment
non-state-owned 0.47% 6,123,636 6,123,636
Management Co.,
legal person
Ltd.
Domestic natural
# Li Hong 0.33% 4,297,300 4,297,300 Pledged 4200,000
person
Guohua Life —
Xingyi Traditional Others 0.32% 4,211,700 New 4,211,700
No.2
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 is among the
Description on the related relationship
actual controllers of the Company; Guangdong Zhongshun Paper Group Co., Ltd. and
or parties acting-in-concert
Chung Shun Co. are the enterprises controlled by actual controllers of the Company, i.e.
arrangements among the above
Mr. Deng Yingzhong, Deng Guanbiao and Deng Guanjie. That is, Guangdong Zhongshun
shareholders
Paper Group Co., Ltd. and Chung Shun Co. are related parties. Mr. Yue Yong is an
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C&S Paper Co., Ltd. 2022 Annual Report
incumbent senior manager of the Company.
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:
There is a special repurchase account “C&S Paper Special Repurchase Securities Account”
Description on special repurchase
among the top 10 shareholders. As of the end of the reporting period, this repurchase
account among top 10 shareholders (if
account held 26,758,987 shares, with a shareholding ratio of 2.04%. Pursuant to relevant
any) (see note 10)
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
377,195,570 377,195,570
Co., Ltd. ordinary shares
RMB-denominated
Chung Shun Co. 266,504,789 266,504,789
ordinary shares
Hong Kong Securities Clearing Co., RMB-denominated
48,800,217 48,800,217
Ltd. ordinary shares
RMB-denominated
Ernest Partners LLC — Client funds 10,402,100 10,402,100
ordinary shares
RMB-denominated
ABC — CSI Smallcap 500 ETF 6,522,889 6,522,889
ordinary shares
# Zhongshan Xinda Investment RMB-denominated
6,123,636 6,123,636
Management Co., Ltd. ordinary shares
RMB-denominated
# Li Hong 4,297,300 4,297,300
ordinary shares
Guohua Life — Xingyi Traditional RMB-denominated
4,211,700 4,211,700
No.2 ordinary shares
ICBC — CSI Main Consumer Staples RMB-denominated
4,061,984 4,061,984
ETF ordinary shares
RMB-denominated
# Chen Ruiqiang 3,667,600 3,667,600
ordinary shares
Description on the related relationship 1. Among the top ten shareholders mentioned above, Guangdong Zhongshun Paper Group
or parties acting-in-concert among the Co., Ltd. and Chung Shun Co. are the enterprises controlled by actual controllers of the
top ten ordinary shareholders without Company, i.e. Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie. That is,
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C&S Paper Co., Ltd. 2022 Annual Report
selling restrictions and between the top Guangdong Zhongshun Paper Group Co., Ltd. and Chung Shun Co. are related parties.
ten ordinary shareholders without 2. Except for the above situation, it is unknown to the Company whether there is related
selling restrictions and the top ten party relationship among other shareholders, or whether there is acting-in-concert among
ordinary shareholders other shareholders as stipulated in the Administrative Measures for the Disclosure of
Information on Changes in Shareholders’ Shareholding of Listed Companies.
1. Shareholder Zhongshan Xinda Investment Management Co., Ltd. holds 6,120,602 shares
Description on the top 10 ordinary through a client credit transaction guarantee securities account;
shareholders’ participation in margin 2. Shareholder Li Hong holds 97,300 shares through a client credit transaction guarantee
trading and securities lending business securities account;
(if any) (see Note 4) 3. Shareholder Chen Ruiqiang holds 843,500 shares 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
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C&S Paper Co., Ltd. 2022 Annual Report
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.
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 in Date of Registered Principal activities or management
person shareholder charge of the institution establishment capital activities
No engagement in any specific business
Chung Shun Co. Deng Yingzhong June 1, 1996 HKD10,000
except for holding the Company’s equities
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C&S Paper Co., Ltd. 2022 Annual Report
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
Proportion of
repurchased
Disclosure Expected Purpose of Number of shares to the
Number of shares to Proportion to total Expected
time of the repurchase repurchase shares underlying stock
be repurchased share capital repurchase time
plan amount shares repurchased involved in
equity incentive
plan (if any)
1.12%-1.69% shares
14,666,667 - Within the 12
(calculated based on Stock
22,222,222 shares months from
the share range that incentive
(estimated based on RMB660 the date of
can be repurchased plan or
January 06, the cap repurchase million - approval by the
estimated as per cap employee 24,863,087 1.89%
2021 price RMB45/share RMB1 Board (January
repurchase price stock
as reviewed and billion 6, 2021 -
RMB45 per share as ownership
approved by the January 5,
reviewed and approved plan
Board) 2022)
by the Board)
Implementation of share repurchase by centralized bidding
□ Applicable √ Not applicable
115
C&S Paper Co., Ltd. 2022 Annual Report
Section VIII Particulars of Preference Shares
□ Applicable √ Not applicable
The Company had no preference shares during the reporting period.
116
C&S Paper Co., Ltd. 2022 Annual Report
Section IX Corporate Bonds
□ Applicable √ Not applicable
117
C&S Paper Co., Ltd. 2022 Annual Report
Section X Financial Report
I. Audit Report
Type of auditor’s opinion Standard unqualified
Signing date of the Audit Report April 18, 2023
Name of auditing organization Mazars Certified Public Accountants (LLP)
Reference number of the Audit Report Zhong-Huan-Shen-Zi (2023) No. 0500396
Name of certified public accountants Jiang Chaojie, 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, 2022, 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 2022, 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, 2022, and the consolidated and the Parent Company’s operating
results and cash flows for 2022.
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. 2022 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 RMB8,569,694,360.65 in customers and the Company or its related parties by checking the business registration
2022. 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 RMB1,748,822,736.00 in recognition of selling expense and its operating effectiveness;
2022, accounting for 20.41% 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
119
C&S Paper Co., Ltd. 2022 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 2022 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. 2022 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 (Partner): Jiang Chaojie
Chinese Certified Public Accountant: Pan Guiquan
Wuhan, PRC
April 18, 2023
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C&S Paper Co., Ltd. 2022 Annual Report
II. Financial Statements
Unit of financial statements: RMB
1. Consolidated balance sheet
Prepared by: C&S Paper Co., Ltd.
December 31, 2022
Unit: RMB
Item December 31, 2022 December 31, 2021
Current assets:
Monetary funds 1,324,787,541.49 875,052,493.12
Settlement reserve
Lending to banks and other
financial institutions
Tradable financial assets
Derivative financial assets
Notes receivable 11,371,092.80 2,327,060.20
Accounts receivable 1,084,130,138.51 1,177,831,399.28
Accounts receivable financing
Prepayments 15,291,351.73 36,685,769.73
Premium receivable
Reinsurance payables
Reinsurance contract reserves
receivable
Other receivables 16,915,272.60 12,353,794.41
Including: Interest receivable
Dividends receivable
Financial assets held under resale
agreements
Inventory 1,911,630,723.55 1,467,631,516.95
Contract assets
Assets held for sale 57,073,059.69
Non-current assets due within one
year
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C&S Paper Co., Ltd. 2022 Annual Report
Other current assets 334,959,353.91 123,530,879.96
Total current assets 4,699,085,474.59 3,752,485,973.34
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 31,701,597.54 33,138,481.74
Fixed assets 3,013,559,312.97 3,129,371,506.40
Construction work in progress 142,627,123.42 134,875,696.94
Productive biological assets
Oil & gas assets
Right-of-use assets 9,758,283.42 14,300,520.77
Intangible assets 214,243,938.48 168,453,928.11
Development expenses
Goodwill 64,654.15 64,654.15
Long-term deferred expenses 11,771,615.74 16,762,904.09
Deferred income tax assets 206,456,657.06 182,185,944.85
Other non-current assets 5,839,034.34 91,642,363.45
Total non-current assets 3,636,022,217.12 3,770,796,000.50
Total assets 8,335,107,691.71 7,523,281,973.84
Current liabilities:
Short-term borrowings 607,799,222.62
Borrowings from PBC
Placements from banks and other
financial institutions
Tradable financial liabilities
Derivative financial liabilities
Notes payable 340,335,111.30 334,969,632.58
Accounts payable 948,550,430.61 829,113,780.31
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C&S Paper Co., Ltd. 2022 Annual Report
Payments received in advance
Contract liabilities 96,581,944.94 164,360,443.34
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 131,641,447.65 139,551,406.46
Tax and fees payable 53,457,966.35 107,184,810.97
Other payables 807,423,814.13 854,872,178.78
Including: Interests payable
Dividends payable 1,352,746.20
Transaction fee and commission
receivable
Reinsurance payable
Liabilities held for sale
Non-current liabilities due within
9,833,661.30 8,616,487.38
one year
Other current liabilities 12,440,147.55 21,250,613.29
Total current liabilities 3,008,063,746.45 2,459,919,353.11
Non-current liabilities:
Insurance contract reserves
Long-term borrowings
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities 803,879.30 5,565,928.14
Long-term payable
Long-term employee remuneration
payable
Provision
Deferred income 98,419,983.82 104,483,429.54
Deferred income tax liabilities 47,131,368.70 46,514,550.50
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C&S Paper Co., Ltd. 2022 Annual Report
Other non-current liabilities
Total non-current liabilities 146,355,231.82 156,563,908.18
Total liabilities 3,154,418,978.27 2,616,483,261.29
Owner’s equity:
Share capital 1,314,739,745.00 1,312,457,555.00
Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserve 958,187,997.99 940,742,686.19
Less: Treasury shares 688,930,693.99 722,243,283.39
Other comprehensive income
Special reserves
Surplus reserves 145,882,689.86 106,984,275.42
General reserves
Retained earnings 3,448,180,639.62 3,265,611,428.36
Total equity attributable to owners of
5,178,060,378.48 4,903,552,661.58
the parent company
Equities of minority shareholders 2,628,334.96 3,246,050.97
Total owner’s equity 5,180,688,713.44 4,906,798,712.55
Total liabilities and owners’ equities 8,335,107,691.71 7,523,281,973.84
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, 2022 December 31, 2021
Current assets:
Monetary funds 178,834,482.59 58,690,877.05
Tradable financial assets
Derivative financial assets
Notes receivable 10,185.51
Accounts receivable 138,731,752.81 171,055,039.37
Accounts receivable financing
Prepayments 3,400,385.20 3,867,904.95
Other receivables 226,320,859.44 128,580,102.05
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C&S Paper Co., Ltd. 2022 Annual Report
Including: Interest receivable
Dividends receivable
Inventory 230,991,334.76 120,747,222.55
Contract assets
Assets held for sale
Non-current assets due within one
year
Other current assets 44,612,167.11 23,545,158.50
Total current assets 822,890,981.91 506,496,489.98
Non-current assets:
Investments in creditor’s rights
Investments in other creditor’s
rights
Long-term receivable
Long-term equity investment 2,007,893,370.09 1,945,421,378.56
Investment in other equity
instruments
Other non-current financial assets
Investment property 16,381,866.55 17,160,598.03
Fixed assets 370,818,585.12 238,119,182.14
Construction work in progress 106,508,939.88 114,301,119.02
Productive biological assets
Oil & gas assets
Right-of-use assets 1,870,924.32 2,207,428.16
Intangible assets 24,849,828.82 27,486,332.17
Development expenses
Goodwill
Long-term deferred expenses 286,261.03
Deferred income tax assets 103,318,801.75 68,572,899.42
Other non-current assets 2,615,866.30 82,852,575.28
Total non-current assets 2,634,544,443.86 2,496,121,512.78
Total assets 3,457,435,425.77 3,002,618,002.76
Current liabilities:
Short-term borrowings
Tradable financial liabilities
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C&S Paper Co., Ltd. 2022 Annual Report
Derivative financial liabilities
Notes payable 45,000,000.00
Accounts payable 830,007,886.80 792,444,139.83
Payments received in advance
Contract liabilities 117,155,526.88 38,166,115.55
Employee remuneration payable 45,625,887.77 42,822,592.18
Tax and fees payable 2,218,640.09 7,119,037.16
Other payables 69,251,084.96 103,779,839.13
Including: Interests payable
Dividends payable 1,352,746.20
Liabilities held for sale
Non-current liabilities due within
1,745,137.58 1,125,486.62
one year
Other current liabilities 15,230,218.49 5,334,195.60
Total current liabilities 1,126,234,382.57 990,791,406.07
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities 324,786.03 1,083,172.96
Long-term payable
Long-term employee remuneration
payable
Provision
Deferred income 3,440,764.37 4,648,115.81
Deferred income tax liabilities 13,991,614.43 7,528,901.04
Other non-current liabilities
Total non-current liabilities 17,757,164.83 13,260,189.81
Total liabilities 1,143,991,547.40 1,004,051,595.88
Owner’s equity:
Share capital 1,314,739,745.00 1,312,457,555.00
Other equity instruments
Including: Preference shares
Perpetual bonds
127
C&S Paper Co., Ltd. 2022 Annual Report
Capital reserve 881,881,031.99 863,078,990.57
Less: Treasury shares 688,930,693.99 722,243,283.39
Other comprehensive income
Special reserves
Surplus reserves 145,761,355.58 106,862,941.14
Retained earnings 659,992,439.79 438,410,203.56
Total owner’s equity 2,313,443,878.37 1,998,566,406.88
Total liabilities and owners’ equities 3,457,435,425.77 3,002,618,002.76
3. Consolidated income statement
Unit: RMB
Item 2022 2021
I. Total Operating Income 8,569,694,360.65 9,149,870,464.80
Including: Operating income 8,569,694,360.65 9,149,870,464.80
Interest income
Gross earned premiums
Service charge and
commission income
II. Total Operating Cost 8,179,052,402.79 8,460,986,513.10
Including: Operating costs 5,831,051,965.27 5,863,049,104.38
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 55,219,364.89 65,545,652.41
Selling expenses 1,748,822,736.00 1,986,544,514.02
Administrative expenses 372,091,457.41 341,144,204.30
R&D expenses 203,883,267.90 211,964,212.18
Finance expenses -32,016,388.68 -7,261,174.19
Including: Interest fees 6,011,515.38 1,872,913.37
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C&S Paper Co., Ltd. 2022 Annual Report
Interest income 16,625,014.52 10,512,490.53
Plus: Other income 27,299,567.92 24,094,502.50
Return on investment ("-"
-848,575.30 365,973.72
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 ("-"
2,624,896.03 -9,360,485.52
indicates loss)
Asset impairment losses ("-"
-20,244,984.39 -27,791,339.98
indicates loss)
Return on disposal of assets
1,133,878.09 -462,228.42
("-" indicates loss)
III. Operating Profit ("-" indicates loss) 400,606,740.21 675,730,374.00
Plus: Non-operating income 17,028,310.82 3,810,360.34
Less: Non-operating expenditure 8,418,061.77 12,059,080.49
IV. Total Profit ("-" indicates total loss) 409,216,989.26 667,481,653.85
Less: Income tax expense 60,545,164.34 86,436,599.78
V. Net Profit ("-" indicates net loss) 348,671,824.92 581,045,054.07
i. Classified by operation continuity
1. Net profit from continued
348,671,824.92 581,045,054.07
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
349,971,119.46 581,097,222.93
of the parent company
2. Minority shareholders’ profits and -1,299,294.54 -52,168.86
129
C&S Paper Co., Ltd. 2022 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
130
C&S Paper Co., Ltd. 2022 Annual Report
income attributable to minority
shareholders
VII. Total Comprehensive Income 348,671,824.92 581,045,054.07
Total comprehensive income
attributable to owners of the parent 349,971,119.46 581,097,222.93
company
Total comprehensive income
-1,299,294.54 -52,168.86
attributable to minority shareholders
VIII. Earnings per Share:
i. Basic earnings per share 0.27 0.45
ii. Diluted earnings per share 0.27 0.44
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 2022 2021
I. Operating Income 2,218,482,576.93 2,383,117,016.30
Less: Operating cost 2,014,994,490.56 2,116,546,576.95
Tax and surcharges 4,005,565.38 6,699,681.18
Selling expenses 162,821,739.68 173,898,463.88
Administrative expenses 163,751,645.84 135,461,184.59
R&D expenses
Finance expenses 9,060,103.97 -7,098,965.55
Including: Interest fees 1,106,525.54 134,353.98
Interest income 2,341,602.05 1,173,475.32
Plus: Other income 5,490,452.84 4,353,161.48
Return on investment ("-"
491,079,446.35 482,704,072.79
indicates loss)
Including: Return on
investment in associates and joint
ventures
Profits from
derecognition of financial assets at
amortized cost
131
C&S Paper Co., Ltd. 2022 Annual Report
Gains from net exposure
hedging ("-" indicates loss)
Gains from changes in fair
value ("-" indicates loss)
Credit impairment losses ("-"
69,882.23 -628,473.64
indicates loss)
Asset impairment losses ("-"
-3,646,356.28 -2,273,866.23
indicates loss)
Return on disposal of assets
152,339.86
("-" indicates loss)
II. Operating Profit ("-" indicates loss) 356,994,796.50 441,764,969.65
Plus: Non-operating income 1,031,485.26 737,533.42
Less: Non-operating expenditure 856,475.48 7,335,396.44
III. Total Profit ("-" indicates total loss) 357,169,806.28 435,167,106.63
Less: Income tax expense -31,814,338.15 -19,983,064.82
IV. Net Profit ("-" indicates net loss) 388,984,144.43 455,150,171.45
i. Net profit from continued
388,984,144.43 455,150,171.45
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
132
C&S Paper Co., Ltd. 2022 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 388,984,144.43 455,150,171.45
VII. Earnings per Share:
i. Basic earnings per share
ii. Diluted earnings per share
5. Consolidated cash flow statement
Unit: RMB
Item 2022 2021
I. Cash Flows from Operating
Activities:
Cash received from sale of goods
8,635,820,677.52 9,026,736,956.62
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
133
C&S Paper Co., Ltd. 2022 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 28,860,833.73 868,062.36
Cash received related to other
135,305,373.23 70,331,809.95
operating activities
Sub-total of cash inflow from operating
8,799,986,884.48 9,097,936,828.93
activities
Cash paid for goods purchased and
6,079,633,823.31 5,434,415,226.04
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
908,781,252.30 838,638,770.81
employees
Tax payments 490,976,047.68 584,815,507.83
Cash payments related to other
928,902,748.82 920,487,717.42
operating activities
Sub-total of cash outflow from
8,408,293,872.11 7,778,357,222.10
operating activities
Net cash flow from operating activities 391,693,012.37 1,319,579,606.83
134
C&S Paper Co., Ltd. 2022 Annual Report
II. Cash Flows from Investing
Activities:
Cash from realization of
1,271,515.16
investment
Cash received from the return on
200,462.39 365,973.72
investments
Net cash received from the
disposal of fixed assets, intangible 10,622,726.39 11,062,476.47
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
72,479,083.36 50,000,000.00
investing activities
Sub-total of cash inflow from investing
84,573,787.30 61,466,670.02
activities
Cash paid for the acquisition and
construction of fixed assets, intangible 325,456,173.55 636,140,768.78
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
233,835,500.00 72,479,083.36
investing activities
Sub-total of cash outflow from
559,291,673.55 708,619,852.14
investing activities
Net cash flows from investing activities -474,717,886.25 -647,153,182.12
III. Cash Flows from Financing
Activities:
Cash received from capital
25,155,032.61 34,820,899.15
contribution
Including: Proceeds received by
subsidiaries from minority
shareholders’ investment
Cash received from borrowings 993,134,345.55 187,245,860.18
Cash received related to other
1,365,300.52
financing activities
135
C&S Paper Co., Ltd. 2022 Annual Report
Sub-total of cash inflow from financing
1,019,654,678.68 222,066,759.33
activities
Cash paid for repayments of
365,808,379.24 328,879,098.49
borrowings
Cash payment for interest expenses
134,206,157.99 129,946,347.96
and distribution of dividends or profits
Including: Dividend and profit
paid by subsidiaries to minority
shareholders
Cash payments related to other
16,082,248.77 682,429,516.95
financing activities
Sub-total of cash outflow from
516,096,786.00 1,141,254,963.40
financing activities
Net cash flows from financing activities 503,557,892.68 -919,188,204.07
IV. Effect of Exchange Rate Changes on
30,567,330.09 -5,474,680.66
Cash and Cash Equivalents
V. Net Increase in Cash and Cash
451,100,348.89 -252,236,460.02
Equivalents
Plus: Opening balance of cash and
797,797,675.70 1,050,034,135.72
cash equivalents
VI. Closing Balance of Cash and Cash
1,248,898,024.59 797,797,675.70
Equivalents
6. Cash flow statement of the Parent Company
Unit: RMB
Item 2022 2021
I. Cash Flows from Operating
Activities:
Cash received from sale of goods
2,080,326,852.29 2,271,872,550.53
or rendering of services
Tax rebates 2,925,548.55
Cash received related to other
453,281,870.34 807,061,207.28
operating activities
Sub-total of cash inflow from operating
2,536,534,271.18 3,078,933,757.81
activities
Cash paid for goods purchased and
1,725,582,893.01 1,619,835,759.07
services rendered
Cash paid to and on behalf of 222,150,588.23 186,144,361.74
136
C&S Paper Co., Ltd. 2022 Annual Report
employees
Tax payments 22,652,687.50 44,702,981.48
Cash payments related to other
643,756,534.48 897,857,291.76
operating activities
Sub-total of cash outflow from
2,614,142,703.22 2,748,540,394.05
operating activities
Net cash flow from operating activities -77,608,432.04 330,393,363.76
II. Cash Flows from Investing
Activities:
Cash from realization of
investment
Cash received from the return on
491,913,946.35 482,704,072.79
investments
Net cash received from the
disposal of fixed assets, intangible 2,780.00 10,290.00
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
10,000,000.00 50,000,000.00
investing activities
Sub-total of cash inflow from investing
501,916,726.35 532,714,362.79
activities
Cash paid for the acquisition and
construction of fixed assets, intangible 112,469,525.43 177,904,868.68
assets, and other long-term assets
Cash paid for investments 60,600,000.00 7,740,000.00
Net amount of cash paid for
acquisition of subsidiaries and other
operating organizations
Cash payments related to other
23,835,500.00 10,000,000.00
investing activities
Sub-total of cash outflow from
196,905,025.43 195,644,868.68
investing activities
Net cash flows from investing activities 305,011,700.92 337,069,494.11
III. Cash Flows from Financing
Activities:
Cash received from capital
24,147,285.61 31,560,899.15
contribution
137
C&S Paper Co., Ltd. 2022 Annual Report
Cash received from borrowings 67,876,693.39
Cash received related to other
4,410,630.31
financing activities
Sub-total of cash inflow from financing
96,434,609.31 31,560,899.15
activities
Cash paid for repayments of
64,800,323.12 9,477,423.45
borrowings
Cash payment for interest expenses
130,475,295.51 128,727,133.02
and distribution of dividends or profits
Cash payments related to other
4,847,442.07 676,395,258.62
financing activities
Sub-total of cash outflow from
200,123,060.70 814,599,815.09
financing activities
Net cash flows from financing activities -103,688,451.39 -783,038,915.94
IV. Effect of Exchange Rate Changes on
839,418.36 -1,731.44
Cash and Cash Equivalents
V. Net Increase in Cash and Cash
124,554,235.85 -115,577,789.51
Equivalents
Plus: Opening balance of cash and
54,273,414.25 169,851,203.76
cash equivalents
VI. Closing Balance of Cash and Cash
178,827,650.10 54,273,414.25
Equivalents
138
C&S Paper Co., Ltd. 2022 Annual Report
7. Consolidated statement of changes in owner’s equity
Amount of the current period
Unit: RMB
2022
Owner’s equity attributable to the Parent Company
Other
equity
instrument
s
Equity of
Item Pr Other Spec Gener
minority
Pe Total owner’s equity
efe Less: Treasury compreh ial al Othe
Share capital Capital reserve Surplus reserves Retained earnings Subtotal shareholders
rp
re shares ensive reser reserv rs
etu Ot
nc income ves es
al he
e
bo rs
sh
nd
are
s
s
I. Balance at the End of Last
1,312,457,555.00 940,742,686.19 722,243,283.39 106,984,275.42 3,265,611,428.36 4,903,552,661.58 3,246,050.97 4,906,798,712.55
Year
Plus: Alternation to
accounting policies
Correction to previous
errors
Business
combinations involving
enterprises under common
control
139
C&S Paper Co., Ltd. 2022 Annual Report
Others
II. Balance at the Beginning of
1,312,457,555.00 940,742,686.19 722,243,283.39 106,984,275.42 3,265,611,428.36 4,903,552,661.58 3,246,050.97 4,906,798,712.55
the Year
III. Changes in the Period ("-"
2,282,190.00 17,445,311.80 -33,312,589.40 38,898,414.44 182,569,211.26 274,507,716.90 -617,716.01 273,890,000.89
Indicates Decrease)
i. Total comprehensive income 349,971,119.46 349,971,119.46 -1,299,294.54 348,671,824.92
ii. Capital contributed or
2,282,190.00 17,445,311.80 -33,312,589.40 53,040,091.20 681,578.53 53,721,669.73
decreased by owner
1 Ordinary shares contributed
2,961,814.00 22,029,783.94 24,991,597.94 2,100,000.00 27,091,597.94
by owners
2 Capital contributed by owners
of other equity instruments
3 Share based payments
-679,624.00 -4,584,472.14 -33,312,589.40 28,048,493.26 28,048,493.26
recognized as owner’s equity
4 Others -1,418,421.47 -1,418,421.47
iii. Profit distribution 38,898,414.44 -167,401,908.20 -128,503,493.76 -128,503,493.76
1 Appropriation of surplus
38,898,414.44 -38,898,414.44
reserves
2 Appropriation of general risk
reserves
3 Distribution to owners (or
-128,503,493.76 -128,503,493.76 -128,503,493.76
shareholders)
4 Others
iv. Interior balance from
owner’s equity
1 Added capital (or share
140
C&S Paper Co., Ltd. 2022 Annual Report
capital) from capital reserves
2 Added capital (or share
capital) from surplus reserves
3 Compensation of loss with
surplus reserves
4 Retained earnings of
carry-over of the defined benefit
plan
5 Retained earnings of
carry-over of other
comprehensive income
6 Others
v. Special reserves
1 Appropriation for the period
2 Use for the period
vi. Others
IV. Closing Balance of the
1,314,739,745.00 958,187,997.99 688,930,693.99 145,882,689.86 3,448,180,639.62 5,178,060,378.48 2,628,334.96 5,180,688,713.44
Period
Amount of last period
Unit: RMB
2021
Owner’s equity attributable to the Parent Company
Equity of
Item Other Other Spec Gener minority
equity Less: Treasury compreh ial al Othe Total owner’s equity
Share capital Capital reserve Surplus reserves Retained earnings Subtotal shareholders
instrument shares ensive reser reserv rs
s income ves es
141
C&S Paper Co., Ltd. 2022 Annual Report
Pr
Pe
efe
rp
re
etu Ot
nc
al he
e
bo rs
sh
nd
are
s
s
I. Balance at the End of Last
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
Year
Plus: Alternation to
accounting policies
Correction to previous
errors
Business
combinations involving
enterprises under common
control
Others
II. Balance at the Beginning of
1,311,487,077.00 907,006,505.05 96,480,911.29 61,469,258.27 2,858,664,147.39 5,042,146,076.42 5,042,146,076.42
the Year
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
142
C&S Paper Co., Ltd. 2022 Annual Report
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
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
143
C&S Paper Co., Ltd. 2022 Annual Report
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
1,312,457,555.00 940,742,686.19 722,243,283.39 106,984,275.42 3,265,611,428.36 4,903,552,661.58 3,246,050.97 4,906,798,712.55
Period
8. Statement of changes in owner’s equity of the Parent Company
Amount of the current period
Unit: RMB
2022
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 1,312,457,555.00 863,078,990.57 722,243,283.39 106,862,941.14 438,410,203.56 1,998,566,406.88
Plus: Alternation to accounting
policies
Correction to previous
errors
Others
II. Balance at the Beginning of the 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
144
C&S Paper Co., Ltd. 2022 Annual Report
Year
III. Changes in the Period ("-"
2,282,190.00 18,802,041.42 -33,312,589.40 38,898,414.44 221,582,236.23 314,877,471.49
Indicates Decrease)
i. Total comprehensive income 388,984,144.43 388,984,144.43
ii. Capital contributed or decreased by
2,282,190.00 18,802,041.42 -33,312,589.40 54,396,820.82
owner
1 Ordinary shares contributed by
2,961,814.00 22,029,783.94 24,991,597.94
owners
2 Capital contributed by owners of
other equity instruments
3 Share based payments recognized as
-679,624.00 -3,227,742.52 -33,312,589.40 29,405,222.88
owner’s equity
4 Others
iii. Profit distribution 38,898,414.44 -167,401,908.20 -128,503,493.76
1 Appropriation of surplus reserves 38,898,414.44 -38,898,414.44
2 Distribution to owners (or
-128,503,493.76 -128,503,493.76
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
145
C&S Paper Co., Ltd. 2022 Annual Report
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 Period 1,314,739,745.00 881,881,031.99 688,930,693.99 145,761,355.58 659,992,439.79 2,313,443,878.37
Amount of last period
Unit: RMB
2021
Other equity
instruments Specia
Item Less: Treasury Other comprehensive l Othe
Perp
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 1,311,487,077.00 831,693,206.19 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
146
C&S Paper Co., Ltd. 2022 Annual Report
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
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
147
C&S Paper Co., Ltd. 2022 Annual Report
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 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
148
C&S Paper Co., Ltd. 2022 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, 2022, the Company has had a registered capital of RMB1,314,739,745.00 and a share capital
of RMB1,314,739,745.00
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 18,
2023.
5. Consolidation scope of financial statements
As of December 31, 2022, the Company has 25 subsidiaries that are included in the consolidated scope, as
detailed in “Note IX. Equities in Other Entities”. Compared with last year, two subsidiaries have been newly
added into while five subsidiaries have 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 41 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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Regulatory Commission based on actual transactions and events.
In accordance with the relevant rules of Accounting Standards for Business Enterprises, the financial accounting
of the Company is based on accrual basis. Apart from some financial tools, the accounting measurement of the
financial statements is based on historical cost method. Provision for impairment of asset is set aside if it is
recognized.
2. Going concern
The Company shall be a going concern for at least 12 months following the end of the reporting period. There are
no major events that will affect the Company’s operational ability; therefore, the assumption on which the
financial statements are based is reasonable.
V. Significant Accounting Policies and Accounting Estimates
Specific accounting policies and accounting estimates:
C&S Paper Co., Ltd. and all its subsidiaries have set out several specific accounting policies and accounting
estimates for transactions and events with relation to the recognition of incomes and income taxes in accordance
with the Accounting Standards for Business Enterprises and their own operational characteristics. Please refer to
“Note V (39) Revenue” for details. As for explanations of significant accounting judgments and estimates made
by the management, please refer to “Note V (44) Significant changes of accounting policies and accounting
estimates”.
1. Statement of compliance with the accounting standards for business enterprises
The financial statements of the Company conform to the requirements set out in the Accounting Standards for
Business Enterprises. The statements truthfully and completely reflect the financial status of the Company as of
December 31, 2022 as well as its operating results, cash flow, and other relevant information during 2022. 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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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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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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(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 acceptance Acceptors are banks with low credit risks.
Trade acceptance The aging of trade acceptance is used as credit risk characteristics.
b. Accounts receivable
The Company measures loss reserves for accounts receivable without major financing component at an amount
equivalent to expected credit loss in the entire duration.
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 scope.
portfolio
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 scope.
related parties
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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
Properties and buildings Straight-line depreciation 10 to 30 years 5%. 10% 3.00%, 3.17% to 9.00%, 9.50%
Equipment Straight-line depreciation 2 to 20 years 5%. 10% 4.50%, 4.75% to 45.00%, 47.50%
Motor vehicles Straight-line depreciation 5 to 14 years 5%. 10% 6.43%, 6.79% to 18.00%, 19.00%
Office equipment Straight-line depreciation 3 to 8 years 5%. 10% 11.25%, 11.88% to 30.00%, 31.67%
Production equipment Straight-line depreciation 2 to 5 years 5%. 10% 18.00%, 19.00% to 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".
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,
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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
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
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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
assets with limited service life, and investment properties measured using the cost model, and long-term equity
investments in subsidiaries. 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
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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
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.
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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".
36. Provision
An obligation related to contingent issues and meeting the following conditions shall be deemed a provision: (1)
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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.
The fair value of liabilities is re-measured and any change thereto is recognized as profit and loss of the current
period on each balance sheet date and settlement date prior to settlement of the relevant liabilities.
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38. Preference shares, perpetual bonds and other financial instruments
None
39. Revenue
Accounting policy for recognition and measurement of revenue
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
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.
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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.
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)
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C&S Paper Co., Ltd. 2022 Annual Report
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
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.
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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
leases.
i. Operating lease
The Company adopts the straight-line method to recognize lease receipts from operating leases as rental income
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C&S Paper Co., Ltd. 2022 Annual Report
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 31, 2021, the Ministry of Finance issued the
Interpretation No. 15 to Accounting Standards for Business
On August 29, 2022, the
Enterprises (C.K. [2021] No. 35) (hereinafter referred to as the
Company convened the 15th
“Interpretation No. 15”), which stipulated that contents regarding
meeting of the fifth session of Details can be found in the
“accounting methods for the external sales of products or by-products
the Board of Directors and the Announcement on Changes to
before they reach intended use or produced during the research and
10th meeting of the fifth Accounting Policies dated
development process” and “judgment of loss contracts” shall be
session of the Board of August 31, 2022 on CNINFO
implemented from January 1, 2022, and contents regarding
Supervisors, and approved the (http://www.cninfo.com.cn) .
“presentation concerning centralized management of funds” shall be
Proposal on Changes to
adopted from December 31, 2021. According to relevant
Accounting Policies.
requirements, the Company started to implement the Interpretation
No. 15 from January 1, 2022.
(2) Significant changes of accounting estimates
□ Applicable √ Not applicable
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C&S Paper Co., Ltd. 2022 Annual Report
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%、6%、5%
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., and Xiaogan C&S Trading Co., Ltd.,
C&S (Zhongshan) Paper Co., Ltd., Beijing Bloomage Jierou Biotechnology Co., Ltd., Dolemi Sanitary Products Co.,
Ltd., Zhengzhou Dolemi Sanitary Products Co., Ltd., Xi’an Dolemi Sanitary Products Co., Ltd., Zhongshun Health 20%
Life Technology (Shenzhen)Co., Ltd. and Guangdong Huashun Material Technology 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%
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 2022.
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
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C&S Paper Co., Ltd. 2022 Annual Report
three years. Therefore, the corporate income tax is calculated at a tax rate of 15% in 2022.
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 2022.
Pursuant to relevant provisions of the Announcement of the State Administration of Taxation on Matters
Concerning the Implementation of Preferential Income Tax Policies to Support the Development of Small and
Micro Enterprises (SAT Doc. No. 2021 [008]) and the Announcement of the State Administration of Taxation and
the Ministry of Finance on Further Implementation of Preferential Income Tax Policies for Small and Micro
Enterprises (MOF and SAT Doc. No. 2022 [013]), from January 1, 2021 to December 31, 2022, the policy on
inclusive income tax deduction and exemption for small low-profit enterprises is applicable to C&S (Zhongshan)
Paper Co., Ltd., Beijing Bloomage Jierou Biotechnology Co., Ltd., Dolemi Sanitary Products Co., Ltd., Zhengzhou
Dolemi Sanitary Products Co., Ltd., Xi’an Dolemi Sanitary Products Co., Ltd., Zhongshun Health Life
Technology (Shenzhen)Co., Ltd. and Guangdong Huashun Material Technology Co., Ltd. in 2022. 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 12.5%, 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 25%, 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 20,309.66 46,249.83
Bank deposits 1,231,680,951.11 795,982,835.01
Other monetary funds 93,086,280.72 79,023,408.28
Total 1,324,787,541.49 875,052,493.12
Including: Total deposits in overseas
165,068,426.96 187,577,086.41
banks
The total amount of funds with restrictions
75,889,516.90 77,254,817.42
on use due to mortgage, pledge, or freezing
Other description
Balance of other monetary funds at the end of the reporting period is the security deposit for issuing letters of
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C&S Paper Co., Ltd. 2022 Annual Report
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 9,871,092.80 2,327,060.20
Commercial acceptance bill 1,500,000.00
Total 11,371,092.80 2,327,060.20
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
Unit: RMB
Termination of recognition amount at the Unrecognized amount at the end of the
Item
end of the period period
Commercial acceptance bill 1,500,000.00
Total 1,500,000.00
(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
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C&S Paper Co., Ltd. 2022 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 34,992,4 15,136,1 19,856,31 41,279,71 15,136,10 26,143,608.
3.10% 43.26% 3.37% 36.67%
reserve is set aside 17.09 03.86 3.23 1.95 3.86 09
individually
Including:
Accounts receivable
for which bad debt 1,092,72 28,446,9 1,064,273 1,183,699 32,012,00 1,151,687,7
96.90% 2.60% 96.63% 2.70%
reserve is set aside in 0,726.79 01.51 ,825.28 ,791.69 0.50 91.19
portfolios
Including:
Portfolio based on 1,092,72 28,446,9 1,064,273 1,183,699 32,012,00 1,151,687,7
96.90% 2.60% 96.63% 2.70%
aging 0,726.79 01.51 ,825.28 ,791.69 0.50 91.19
1,127,71 43,583,0 1,084,130 1,224,979 47,148,10 1,177,831,3
Total 100.00% 3.86% 100.00% 3.85%
3,143.88 05.37 ,138.51 ,503.64 4.36 99.28
Bad debt reserve set aside individually: 15,136,103.86
Unit: RMB
Balance at the end of the period
Name Impairment Ratio of
Book balance Reason for provision
provision provision
Institution It is difficult to recover all goods payments due to the poor
22,180,045.16 8,218,072.46 37.05%
1 business performance of the customer.
Institution It is difficult to recover all goods payments due to the poor
6,695,735.27 4,455,035.27 66.54%
2 business performance of the customer.
Institution 6,116,636.66 2,462,996.13 40.27% It is difficult to recover all goods payments due to the poor
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C&S Paper Co., Ltd. 2022 Annual Report
3 business performance of the customer.
Total 34,992,417.09 15,136,103.86 --
Bad debt reserve set aside in portfolios: 28,446,901.51
Unit: RMB
Balance at the end of the period
Name
Book balance Impairment provision Ratio of provision
Within the credit period 954,288,664.35 19,085,773.28 2.00%
Credit period - 1 year 129,694,009.09 6,484,700.45 5.00%
1 to 2 years 3,625,774.79 543,866.23 15.00%
2 to 3 years 1,117,888.65 335,366.59 30.00%
3 to 5 years 3,994,389.91 1,997,194.96 50.00%
Total 1,092,720,726.79 28,446,901.51
Description of reason for the portfolio:
Accounts receivable with the same aging have similar credit risk characteristics.
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) 1,083,982,673.44
1 to 2 years 10,321,510.06
2 to 3 years 1,117,888.65
Over 3 years 32,291,071.73
3 to 4 years 1,565,879.81
4 to 5 years 2,428,510.10
Over 5 years 28,296,681.82
Total 1,127,713,143.88
(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
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C&S Paper Co., Ltd. 2022 Annual Report
Accounts
47,148,104.36 -3,093,792.00 452,211.29 -19,095.70 43,583,005.37
receivable
Total 47,148,104.36 -3,093,792.00 452,211.29 -19,095.70 43,583,005.37
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
Unit: RMB
Item Write-off amount
Accounts receivable actually written off 452,211.29
其中重要的应收账款核销情况：无
(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 437,720,163.71 38.81% 8,769,761.84
2nd 83,339,805.67 7.39% 2,833,198.43
3rd 34,758,269.70 3.08% 695,165.39
4th 33,349,528.53 2.96% 742,065.81
5th 27,700,218.76 2.46% 554,004.38
Total 616,867,986.37 54.70%
(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
(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
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C&S Paper Co., Ltd. 2022 Annual Report
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 15,291,351.73 100.00% 36,685,769.73 100.00%
Total 15,291,351.73 -- 36,685,769.73 --
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 RMB 10,987,790.66,
accounting for 71.86% of closing balance of prepayment.
Other description: None
8. Other receivables
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Other receivables 16,915,272.60 12,353,794.41
Total 16,915,272.60 12,353,794.41
(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
182
C&S Paper Co., Ltd. 2022 Annual Report
(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 7,890,771.57 5,834,746.14
Margins and deposits 6,069,070.04 4,555,486.30
Others 2,869,499.74 1,937,176.46
Reserve 2,691,372.66 2,167,837.76
Total 19,520,714.01 14,495,246.66
2) Provision of bad debt reserve
Unit: RMB
Phase I Phase II Phase III
Expected credit losses in the Expected credit losses in the
Bad debt provision Expected credit loss in Total
whole duration (without credit whole duration (with credit
the next 12 months
impairment) impairment)
Balance as at January 1,
2,141,452.25 2,141,452.25
2021
Balance as at January 1,
2021 in the reporting
period
——Moving to the third
-4,690.34 4,690.34
stage
Provision in the reporting
468,895.97 468,895.97
period
Write-off in the reporting 4,690.34 4,690.34
183
C&S Paper Co., Ltd. 2022 Annual Report
period
Other changes -216.47 -216.47
Balance as at December
2,605,441.41 2,605,441.41
31, 2022
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) 14,968,876.87
1 to 2 years 1,049,381.54
2 to 3 years 552,151.00
Over 3 years 2,950,304.60
3 to 4 years 1,007,100.00
4 to 5 years 1,825,619.10
Over 5 years 117,585.50
Total 19,520,714.01
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 2,141,452.25 468,895.97 4,690.34 -216.47 2,605,441.41
Total 2,141,452.25 468,895.97 4,690.34 -216.47 2,605,441.41
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
Item Write-off amount
Other receivables actually written off 4,690.34
Description of write-offs of important other receivables: None
Description on the write-offs of other receivables: None
184
C&S Paper Co., Ltd. 2022 Annual Report
5) Top five debtors in closing balance of other accounts receivable
Unit: RMB
Percentage in total balance of Balance of bad debt
Name of Nature of Balance at the end
Aging other receivables at the end of reserve at the end of the
institution the amount of the period
the period period
1st Others 2,661,408.58 Within 1 year 13.63% 133,070.43
Current
2nd 1,860,806.87 Within 1 year 9.53% 93,040.34
account
Margins and
3rd 900,500.00 4-5 years 4.61% 450,250.00
deposits
Within 1 year, 1-2 years,
Margins and
4th 850,000.00 2- 3 years, 3-4 years,4-5 4.35% 352,500.00
deposits
years.
Within 1 year, 1-2 years,
Margins and
5th 625,500.00 2- 3 years, 3-4 years,4-5 3.20% 179,775.00
deposits
years.
Total -- 6,898,215.45 -- 35.32% 1,208,635.77
6) Receivables involving government grants: None
7) Other receivables derecognized due to the transfer of financial assets: None
8) Amount of assets and liabilities that are formed by the transfer and ongoing involvement of other
receivables: None
9. Inventories
Whether the Company needs to comply with requirements for disclosure in the real estate industry
No
(1) Classification of inventories
Unit: RMB
Balance at the end of the period Balance at the beginning of the period
Provision for Provision for
impairment of impairment of
Item inventories or inventories or
Book balance Book value Book balance Book value
provision for provision for
contract contract
performance cost performance cost
185
C&S Paper Co., Ltd. 2022 Annual Report
Raw materials 1,120,294,078.05 3,958,483.30 1,116,335,594.75 886,711,194.32 5,050,118.51 881,661,075.81
Work-in-process
108,420,732.66 858,734.39 107,561,998.27 50,455,115.89 188,464.55 50,266,651.34
products
Commodity
619,274,397.98 10,309,137.57 608,965,260.41 458,467,589.59 4,792,993.52 453,674,596.07
stocks
Packages 37,055,688.67 416,133.78 36,639,554.89 43,288,272.57 465,044.89 42,823,227.68
Low-value
20,499,334.30 2,540,724.48 17,958,609.82 24,525,776.59 820,943.23 23,704,833.36
consumables
Materials for
consigned 24,169,705.41 24,169,705.41 15,501,132.69 15,501,132.69
processing
Total 1,929,713,937.07 18,083,213.52 1,911,630,723.55 1,478,949,081.65 11,317,564.70 1,467,631,516.95
(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 5,050,118.51 356,610.98 1,448,246.19 3,958,483.30
Work-in-process
188,464.55 868,434.13 198,164.29 858,734.39
products
Commodity
4,792,993.52 11,240,177.08 5,724,033.03 10,309,137.57
stocks
Packages 465,044.89 469,154.49 518,065.60 416,133.78
Low-value
820,943.23 2,053,649.43 333,868.18 2,540,724.48
consumables
Total 11,317,564.70 14,988,026.11 8,222,377.29 18,083,213.52
(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
11. Assets held for sale:
Other description:
186
C&S Paper Co., Ltd. 2022 Annual Report
Balance at the end of the Balance at the beginning of the
Item
period period
Immovable assets (including land use rights) within the old
57,073,059.69
factory in Hubei C&S
Total 57,073,059.69
As of the end of March 2022, the Company and Xiaogan Changxing Investment Co., Ltd. have finally completed
asset delivery.
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
Large-denomination Certificate of Deposit 210,000,000.00 62,479,083.36
Input VAT to be deducted 101,907,351.54 46,011,229.37
Treasury bond reverse repurchase 23,001,000.00
Prepaid corporate income tax 51,002.37 5,040,567.23
Wealth management products 10,000,000.00
Total 334,959,353.91 123,530,879.96
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
187
C&S Paper Co., Ltd. 2022 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
Properties and Land use Construction work in
Item Total
buildings rights process
I. Original Book Value
1. Balance at the beginning of the period 31,072,632.92 21,661,131.29 52,733,764.21
2. Increase in the current period
(1) External purchase
(2) Inventory\fixed assets\transfer from
construction work in progress
(3) Increase in business combination
3. Decrease in the current period
(1) Disposal
(2) Other transfers out
4. Balance at the end of the period 31,072,632.92 21,661,131.29 52,733,764.21
II. Accumulated Depreciation and Amortization
1. Balance at the beginning of the period 14,094,505.59 5,500,776.88 19,595,282.47
2. Increase in the current period 1,099,028.28 337,855.92 1,436,884.20
(1) Provision or amortization 1,099,028.28 337,855.92 1,436,884.20
3. Decrease in the current period
(1) Disposal
(2) Other transfers out
4. Balance at the end of the period 15,193,533.87 5,838,632.80 21,032,166.67
188
C&S Paper Co., Ltd. 2022 Annual Report
III. Impairment Provision
1. Balance at the beginning of the period
2. Increase in the current period
(1) Provision
3. Decrease in the current period
(1) Disposal
(2) Other transfers out
4. Balance at the end of the period
IV. Book Value
1. Book value at the end of the period 15,879,099.05 15,822,498.49 31,701,597.54
2. Book value at the beginning of the period 16,978,127.33 16,160,354.41 33,138,481.74
(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 3,013,559,312.97 3,129,371,506.40
Total 3,013,559,312.97 3,129,371,506.40
(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 1,341,340,687.24 3,445,905,919.04 61,098,219.68 21,992,518.35 94,447,269.89 4,964,784,614.20
the period
189
C&S Paper Co., Ltd. 2022 Annual Report
2. Increase in
31,323,843.38 234,474,408.55 12,747,199.95 1,001,912.57 13,335,088.54 292,882,452.99
the current period
(1) Purchase 160,460.19 7,550,860.05 1,001,912.57 1,965,469.04 10,678,701.85
(2)
Inventory\fixed
assets\transfer 31,323,843.38 234,313,948.36 5,196,339.90 11,369,619.50 282,203,751.14
from construction
work in progress
(3) Increase
in business
combination
3. Decrease in
1,087,705.61 74,895,329.82 1,606,123.70 246,088.49 303,532.04 78,138,779.66
the current period
(1) Disposal
1,087,705.61 74,895,329.82 1,606,123.70 246,088.49 303,532.04 78,138,779.66
or scrap
4. Balance at
the end of the 1,371,576,825.01 3,605,484,997.77 72,239,295.93 22,748,342.43 107,478,826.39 5,179,528,287.53
period
II. Accumulated
Depreciation
1. Balance at
the beginning of 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
the period
2. Increase in
50,684,361.63 307,200,609.67 9,232,559.07 2,279,381.60 13,954,832.47 383,351,744.44
the current period
(1) Provision 50,684,361.63 307,200,609.67 9,232,559.07 2,279,381.60 13,954,832.47 383,351,744.44
3. Decrease in
687,399.57 38,069,418.25 1,403,883.98 61,693.00 273,178.84 40,495,573.64
the current period
(1) Disposal
687,399.57 38,069,418.25 1,403,883.98 61,693.00 273,178.84 40,495,573.64
or scrap
4. Balance at
the end of the 328,463,784.70 1,698,804,701.37 42,106,720.32 12,317,156.27 66,497,929.43 2,148,190,292.09
period
III. Impairment
Provision
1. Balance at
the beginning of 271,024.32 29,680,382.73 58,221.32 69,358.14 30,078,986.51
the period
2. Increase in 11,243,121.98 479,291.06 401,185.19 12,123,598.23
190
C&S Paper Co., Ltd. 2022 Annual Report
the current period
(1) Provision 11,243,121.98 479,291.06 401,185.19 12,123,598.23
3. Decrease in
271,024.32 24,093,674.58 58,221.32 982.05 24,423,902.27
the current period
(1) Disposal
271,024.32 24,093,674.58 58,221.32 982.05 24,423,902.27
or scrap
4. Balance at
the end of the 16,829,830.13 479,291.06 469,561.28 17,778,682.47
period
IV. Book Value
1. Book value
at the end of the 1,043,113,040.31 1,889,850,466.27 29,653,284.55 10,431,186.16 40,511,335.68 3,013,559,312.97
period
2. Book value
at the beginning 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
of the period
(2) Information on temporarily idle fixed assets
Unit: RMB
Accumulated Impairment
Item Original book value Book value Remarks
depreciation provision
Equipment 61,104,828.53 33,816,414.90 16,829,830.13 10,458,583.50
Office equipment 1,727,646.57 1,188,058.00 479,291.06 60,297.51
Production
1,094,351.31 590,790.03 469,561.28 34,000.00
equipment
Total 63,926,826.41 35,595,262.93 17,778,682.47 10,552,881.01
(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
Plants and warehouses of Tangshan Branch 48,149,248.09 Processing
Total 48,149,248.09
Other description: None
191
C&S Paper Co., Ltd. 2022 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 142,627,123.42 134,875,696.94
Total 142,627,123.42 134,875,696.94
(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 66,109,020.18 66,109,020.18 10,160,431.64 10,160,431.64
Paper
Construction
work of Jiangmen 6,474,001.68 6,474,001.68 3,894,339.75 3,894,339.75
C&S
Construction
work of Zhejiang 1,136,260.16 1,136,260.16
C&S
Construction
work of Sichuan 4,628,355.84 4,628,355.84
C&S
Construction
work of Tangshan 40,399,919.70 40,399,919.70 104,140,687.38 104,140,687.38
Branch
Construction
work of Hubei 586,622.06 586,622.06 4,347,806.26 4,347,806.26
C&S
Construction
work of Yunfu 25,882,040.96 25,882,040.96 6,037,233.84 6,037,233.84
C&S
Construction
work of Jiangsu 530,582.07 530,582.07 530,582.07 530,582.07
C&S
Construction 2,644,936.77 2,644,936.77
192
C&S Paper Co., Ltd. 2022 Annual Report
work of Dazhou
C&S
Total 142,627,123.42 142,627,123.42 134,875,696.94 134,875,696.94
(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
75,672,3 10,160,4 62,394,8 6,446,23 66,109,0
work of 95.88% 95.88% Others
31.85 31.64 25.42 6.88 20.18
C&S
Paper
Construc
tion
38,390,5 3,894,33 32,124,3 29,544,6 6,474,00
work of 93.82% 93.82% Others
76.07 9.75 23.12 61.19 1.68
Jiangme
n C&S
Construc
tion
2,850,70 1,136,26 1,714,33 2,850,59
work of 100.00% 100.00% Others
4.89 0.16 9.64 9.80
Zhejiang
C&S
Construc
tion
10,793,4 4,628,35 6,165,12 10,793,4
work of 100.00% 100.00% Others
81.23 5.84 5.39 81.23
Sichuan
C&S
Construc
tion
306,034, 104,140, 102,834, 166,574, 40,399,9
work of 92.50% 92.50% Others
107.30 687.38 081.90 849.58 19.70
Tangsha
n Branch
Construc 32,242,5 4,347,80 26,206,6 29,967,8 586,622. 94.76% 94.76% Others
193
C&S Paper Co., Ltd. 2022 Annual Report
tion 34.25 6.26 76.77 60.97 06
work of
Hubei
C&S
Construc
tion
64,524,3 6,037,23 55,870,8 36,026,0 25,882,0
work of 95.95% 95.95% Others
17.72 3.84 68.61 61.49 40.96
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
Construc
tion
825,000, 2,644,93 2,644,93
work of 0.32% 0.32% Others
000.00 6.77 6.77
Dazhou
C&S
2,051,10 134,875, 289,955, 282,203, 142,627,
Total --
8,053.31 696.94 177.62 751.14 123.42
(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
194
C&S Paper Co., Ltd. 2022 Annual Report
25. Right-of-use assets
Unit: RMB
Item Properties and buildings Total
I. Original Book Value
1. Balance at the beginning of the period 23,128,769.16 23,128,769.16
2. Increase in the current period 12,283,612.08 12,283,612.08
3. Decrease in the current period 11,254,653.14 11,254,653.14
4. Balance at the end of the period 24,157,728.10 24,157,728.10
II. Accumulated Depreciation
1. Balance at the beginning of the period 8,828,248.39 8,828,248.39
2. Increase in the current period 14,260,141.80 14,260,141.80
(1) Provision 14,260,141.80 14,260,141.80
3. Decrease in the current period 8,688,945.51 8,688,945.51
(1) Disposal 8,688,945.51 8,688,945.51
4. Balance at the end of the period 14,399,444.68 14,399,444.68
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 9,758,283.42 9,758,283.42
2. Book value at the beginning of the
14,300,520.77 14,300,520.77
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
195
C&S Paper Co., Ltd. 2022 Annual Report
Value
1. Balance at
the beginning of 189,064,322.15 1,733,287.88 24,473,780.06 168,370.83 215,439,760.92
the period
2. Increase
in the current 52,530,000.00 1,401,306.61 53,931,306.61
period
(1)
52,530,000.00 1,401,306.61 53,931,306.61
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 241,594,322.15 1,733,287.88 25,875,086.67 168,370.83 269,371,067.53
period
II. Accumulated
Amortization
1. Balance at
the beginning of 33,248,263.66 1,000,988.17 12,568,210.15 168,370.83 46,985,832.81
the period
2. Increase
in the current 4,322,603.52 133,326.60 3,685,366.12 8,141,296.24
period
(1)
4,322,603.52 133,326.60 3,685,366.12 8,141,296.24
Provision
3. Decrease
in the current
period
(1)
Disposal
4. Balance at
the end of the 37,570,867.18 1,134,314.77 16,253,576.27 168,370.83 55,127,129.05
period
196
C&S Paper Co., Ltd. 2022 Annual Report
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 204,023,454.97 598,973.11 9,621,510.40 214,243,938.48
of the period
2. Book
value at the
155,816,058.49 732,299.71 11,905,569.91 168,453,928.11
beginning of the
period
The intangible assets generated other than internal R&D of the Company at the end of the period occupy 0.00% of the balance of
intangible assets.
(2) Information on the land use rights that the certificate of title has not been issued: None
27. Development expenses: None
28. Goodwill
(1) Original book value of goodwill
Unit: RMB
Increase in the current Decrease in the
Name of investee or the matters forming Balance at the period current period Balance at the end
goodwill beginning of the period Formed by business of the period
Disposal
combination
197
C&S Paper Co., Ltd. 2022 Annual Report
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
None.
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, 2022, and provisions at the end of the reporting period were not set
aside.
Influence of the goodwill impairment test
Other description: None
29. Long-term unamortized expenses
Unit: RMB
Balance at the beginning Increase in the Amortized amount of the Other Balance at the end of
Item
of the period current period current period decreases the period
Use rights of sewage
923,439.53 419,080.00 1,091,071.57 251,447.96
discharge
Decoration fees of
13,584,414.56 6,793,606.45 10,779,664.26 9,598,356.75
office buildings
Electricity use rights 2,255,050.00 619,500.00 1,635,550.00
Energy indicators 343,513.21 57,252.18 286,261.03
Total 16,762,904.09 7,556,199.66 12,547,488.01 11,771,615.74
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
44,842,165.10 9,748,898.84 48,619,359.11 10,491,437.82
impairment
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C&S Paper Co., Ltd. 2022 Annual Report
Unrealized profit in internal
45,044,696.11 9,641,645.08 48,456,053.79 10,181,650.08
transaction
Deductible loss 567,079,521.21 140,749,809.49 396,983,644.42 99,145,338.70
Provision for impairment of
18,083,213.52 3,328,793.96 11,317,564.70 1,862,027.54
inventories
Provision for impairment of
17,778,682.47 3,294,136.72 30,078,986.51 5,111,314.51
fixed assets
Equity incentive cost 1,251,162.68 264,199.53 57,965,133.83 14,145,915.91
Accrued expenses 89,060,568.74 22,265,142.19 96,707,743.24 24,176,935.81
Deferred income 87,700,783.44 17,164,031.25 90,270,562.19 17,071,324.48
Total 870,840,793.27 206,456,657.06 780,399,047.79 182,185,944.85
(2) Deferred income tax liabilities that were not offset
Unit: RMB
Balance at the end of the period Balance at the beginning of the period
Item Taxable temporary Deferred income tax Taxable temporary Deferred income tax
differences liabilities differences liabilities
Pre-tax deduction of fixed assets at one
238,373,819.49 47,131,368.70 240,560,367.15 46,514,550.50
time as stipulated in the tax law
Total 238,373,819.49 47,131,368.70 240,560,367.15 46,514,550.50
(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
206,456,657.06 182,185,944.85
assets
Deferred income tax
47,131,368.70 46,514,550.50
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
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C&S Paper Co., Ltd. 2022 Annual Report
Deductible temporary differences 1,346,281.63
Total 1,346,281.63
(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 Book Impairment Impairment
Book value Book balance Book value
balance provision provision
Prepayment for engineering
3,096,668.04 3,096,668.04 34,786,139.79 34,786,139.79
equipment
Prepayment for software 2,742,366.30 2,742,366.30 708,378.66 708,378.66
Prepayment for property
56,147,845.00 56,147,845.00
purchase
Total 5,839,034.34 5,839,034.34 91,642,363.45 91,642,363.45
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 606,299,222.62
Discounting of unrecognized notes
1,500,000.00
receivable
Total 607,799,222.62
Description of classification of short-term borrowings:
The guaranteed loans are all guaranteed loans between related parties within the scope of the Company merger.
(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.
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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 340,335,111.30 334,969,632.58
Total 340,335,111.30 334,969,632.58
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 948,550,430.61 829,113,780.31
Total 948,550,430.61 829,113,780.31
(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 96,581,944.94 164,360,443.34
Total 96,581,944.94 164,360,443.34
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39. Employee remuneration payable
(1) List of employee remuneration payable
Unit: RMB
Balance at the beginning Increase in the Decrease in the Balance at the end of
Item
of the period current period current period the period
I. Short-term Compensation 139,212,737.55 832,655,168.45 846,226,603.54 125,641,302.46
II. Post-employment Benefits -
338,668.91 63,375,122.14 60,713,645.86 3,000,145.19
Defined Contribution Plan
III. Dismissal Benefits 12,253,405.79 9,253,405.79 3,000,000.00
Total 139,551,406.46 908,283,696.38 916,193,655.19 131,641,447.65
(2) List of short-term remuneration
Unit: RMB
Balance at the beginning of Increase in the current Decrease in the current Balance at the end of the
Item
the period period period period
1. Salary, bonus and subsidy 138,256,273.82 746,708,052.42 760,339,425.01 124,624,901.23
2. Employee welfare 27,062,443.32 27,062,443.32
3. Social insurance premiums 256,104.91 32,028,542.18 31,904,215.76 380,431.33
Including: Medical
234,279.48 28,293,492.33 28,375,414.91 152,356.90
insurance
Employment
20,215.91 3,026,524.54 2,820,506.54 226,233.91
injury insurance
Maternity
1,609.52 708,525.31 708,294.31 1,840.52
insurance
4. Housing provident fund 429,409.73 22,803,909.42 23,048,519.15 184,800.00
5. Labor union fee and staff
270,949.09 4,052,221.11 3,872,000.30 451,169.90
education fee
Total 139,212,737.55 832,655,168.45 846,226,603.54 125,641,302.46
(3) List of defined contribution plans
Unit: RMB
Balance at the beginning of Increase in the current Decrease in the current Balance at the end of the
Item
the period period period period
1. Basic endowment
327,176.38 61,163,066.29 58,559,589.66 2,930,653.01
insurance
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C&S Paper Co., Ltd. 2022 Annual Report
2. Unemployment
11,492.53 2,212,055.85 2,154,056.20 69,492.18
insurance
Total 338,668.91 63,375,122.14 60,713,645.86 3,000,145.19
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 11,926,192.62 47,434,141.38
Corporate income tax 30,255,024.65 47,999,180.89
Individual income tax 2,200,055.48 2,282,034.20
City construction and maintenance tax 1,756,304.79 3,157,814.56
Property tax 1,403,446.94 1,479,897.22
Education surcharges 923,674.57 1,525,822.40
Local education surcharges 615,783.03 1,017,214.96
Land use tax 778,111.47 845,611.47
Stamp tax 2,599,126.99 794,985.81
Security fund for the disabled 672,176.96 380,114.13
Environmental protection tax 256,939.83 183,923.63
Resource tax 71,129.02 84,070.32
Total 53,457,966.35 107,184,810.97
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
Other payables 807,423,814.13 853,519,432.58
Total 807,423,814.13 854,872,178.78
(1) Interest payable: None
(2) Dividends payable: None
Unit: RMB
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C&S Paper Co., Ltd. 2022 Annual Report
Item Balance at the end of the period Balance at the beginning of the period
Dividends for restricted shares 1,352,746.20
Total 1,352,746.20
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
Balance at the end of the Balance at the beginning of the
Item
period period
Unpaid fees 772,151,144.55 791,690,297.01
Margins and deposits 29,983,785.18 17,980,073.86
Authorized collection and payment of individual income tax under the
4,039,396.65 8,360,156.40
equity incentive
Others 1,249,487.75 2,176,315.91
Repurchase obligation of restricted shares 33,312,589.40
Total 807,423,814.13 853,519,432.58
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
Institution 1 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 9,833,661.30 8,616,487.38
Total 9,833,661.30 8,616,487.38
Other description: None
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C&S Paper Co., Ltd. 2022 Annual Report
44. Other current liabilities
Unit: RMB
Item Balance at the end of the period Balance at the beginning of the period
Tax pending changeover 12,440,147.55 21,250,613.29
Total 12,440,147.55 21,250,613.29
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 10,637,540.60 14,182,415.52
Lease liabilities due within one year -9,833,661.30 -8,616,487.38
Total 803,879.30 5,565,928.14
Other description: None
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C&S Paper Co., Ltd. 2022 Annual Report
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 beginning Increase in the Decrease in the Balance at the end of
Item Reason
of the period current period current period the period
Government Related to asset
104,483,429.54 9,792,782.00 15,856,227.72 98,419,983.82
grants Government grants
Total 104,483,429.54 9,792,782.00 15,856,227.72 98,419,983.82 --
Projects involving government grants:
Unit: RMB
Amount
Amount Amount
Increased of offset
Balance at the included in included in Balance at the
amount of costs in Other Related to
Liability item beginning of the non-operating other income in end of the
grants in the the changes asset/income
period income in the the current period
current period current
current period period
period
Subsidies for the
infrastructure
Related to
construction of 29,464,497.68 1,071,436.32 28,393,061.36
asset
new factory in
Hubei
Support funds for
the construction of
Related to
Automated 19,627,205.86 1,561,764.72 18,065,441.14
asset
Storage &
Retrieval System
Support funds for Related to
13,921,235.17 2,251,422.48 11,669,812.69
the transformation asset
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C&S Paper Co., Ltd. 2022 Annual Report
of Phase I project
Support funds for
Related to
equipment of 7,512,269.27 1,871,191.20 5,641,078.07
asset
Phase II project
Financial support
funds for
construction
expansion of Related to
6,827,805.95 625,447.80 6,202,358.15
25,000-ton asset
high-grade
household paper
project
Subsidy funds for
Related to
the smart factory 5,039,332.30 3,000,000.00 3,207,694.77 4,831,637.53
asset
project
Ex-post funds
awarded to the
first batch of the
Related to
union enterprises 3,446,992.70 600,082.84 2,846,909.86
asset
for technical
transformation in
2017
Support funds for
the technical
Related to
transformation of 2,839,945.04 784,403.40 2,055,541.64
asset
equipment
production line
Support funds for
the construction of
Related to
environmental 2,713,492.19 319,047.60 2,394,444.59
asset
protection
facilities
Support funds for
enterprise Related to
2,427,313.82 780,329.31 1,646,984.51
technical asset
upgrading
Discount interest
Related to
funds for imported 2,245,718.75 193,875.00 2,051,843.75
asset
equipment
Subsidies for Related to
2,187,499.91 477,272.76 1,710,227.15
sewage treatment asset
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C&S Paper Co., Ltd. 2022 Annual Report
station
Subsidies for the
expansion of the
high-grade
Related to
household paper 1,746,666.87 159,999.96 1,586,666.91
asset
project with an
annual output of
25,000 tons
Special funds for
capacity
expansion of
Related to
25,000-ton 1,245,833.18 575,000.04 670,833.14
asset
high-grade
household paper
project
Subsidies for
construction of the Related to
1,214,782.72 155,078.64 1,059,704.08
water treatment asset
project
Support funds for
sewage centralized Related to
850,500.00 121,500.00 729,000.00
water treatment asset
project
Provincial funds
for traditional
Related to
industry 803,571.46 107,142.84 696,428.62
asset
transformation
projects
Provincial-level
special subsidies
for high-quality Related to
5,050,000.00 367,272.80 4,682,727.20
development of asset
the manufacturing
industry
District-level
support funds for Related to
1,000,000.00 120,689.66 879,310.34
technical asset
transformation
Funds for
reconstruction Related to
368,766.67 368,766.67
project of asset
automatic
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C&S Paper Co., Ltd. 2022 Annual Report
production lines
Subsidies for
technical
Related to
transformation 742,782.00 136,808.91 605,973.09
asset
with “zero land
increase”
Total 104,483,429.54 9,792,782.00 15,856,227.72 98,419,983.82
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 transferred Balance at the end of
Issuance of new Bonus
beginning of the period from surplus Others Subtotal the period
shares shares
reserve
Total
number of 1,312,457,555.00 2,961,814.00 -679,624.00 2,282,190.00 1,314,739,745.00
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 Second Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan
approved at the 5th 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 was
from December 14, 2021 to September 9, 2022. As of September 9, 2022, a total of 2,307 incentive recipients who
had met the above exercise conditions have exercise their rights, and a total of 3,068,271 shares have been
subscribed, of which 398,538 shares were subscribed in 2021.
According to the Proposal on Achieving the Exercise Conditions of the Third 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 14th meeting of the fifth session of the Board of Directors, the number of stock options that had met
exercise conditions was 3,314,312 and the number of incentive recipients in conformity with the exercise
conditions reached 2,000. The exercise period was from June 29, 2022 to March 3, 2023. According to the
Proposal on Achieving the Exercise Conditions of the Third Exercise Period for Reserved Stock Options under the
Company’s 2018 Stock Option and Restricted Stock Incentive Plan approved at the 17th meeting of the fifth
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C&S Paper Co., Ltd. 2022 Annual Report
session of the Board of Directors, the number of stock options that have met exercise conditions was 569,340 and
the number of incentive recipients in conformity with the exercise conditions reached 55. The exercise period is
from December 8, 2022 to October 27, 2023. As of December 31, 2022, the incentive recipients who had met the
above exercise conditions have successively begun to exercise their rights, and a total of 2,563,276 shares have
been subscribed.
The 14th meeting of the fifth session of the Board of Directors and the first extraordinary general meeting of 2022
reviewed and approved the Proposal on the Repurchase and Deregistration of Partial Restricted Stocks Awarded
in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan. Pursuant to the
proposal, as some incentive recipients were disqualified to hold incentive stocks after leaving the Company or
failing the appraisal or some recipients passed the appraisal but did not attain a full score and hence could not
unlock all the stocks, the Company decided to repurchase and deregister total 501,088 restricted shares of 73
incentive recipients.
The 17th meeting of the fifth session of the Board of Directors and the forth extraordinary general meeting of
2022 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 178,536 restricted shares of 15 incentive
recipients.
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
650,391,444.26 30,217,032.50 2,743,409.76 677,865,067.00
premium)
Other capital reserve 290,351,241.93 3,046,816.45 13,075,127.39 280,322,930.99
Total 940,742,686.19 33,263,848.95 15,818,537.15 958,187,997.99
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
RMB30,217,032.50 and decreased “capital reserve-other capital reserve” by RMB8,187,248.56. The repurchase
and deregistration of incentive stocks decreased “capital reserve-other capital reserve” by RMB2,743,409.76.
(2) The Company set aside provision for equity incentive costs and fees in the reporting period and
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C&S Paper Co., Ltd. 2022 Annual Report
RMB3,046,816.45 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 RMB4,887,878.83 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 33,312,589.40 1,352,746.20 34,665,335.60
Ordinary shares 688,930,693.99 688,930,693.99
Total 722,243,283.39 1,352,746.20 34,665,335.60 688,930,693.99
Other descriptions, including increase/decrease in the reporting period and reasons of change:
Notes: (1) The third unlock period unlocked 5,947,912 shares of first-grant stock options at RMB4.33 per share
and 781,744 shares of reserved stock options at RMB7.02 per share granted under the 2018 Stock Option and
Restricted Stock Incentive Plan. Totally RMB31,242,301.84 was included in the decrease of the current period; the
withdrawable cash dividend of RMB1,352,746.2 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 501,088 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 178,536 shares with RMB7.02 per share. Totally 679,624 shares were repurchased with an amount of
RMB3,423,033.76, which was included in the decrease 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 106,984,275.42 38,898,414.44 145,882,689.86
Total 106,984,275.42 38,898,414.44 145,882,689.86
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
statutory surplus reserve reaches more than 50% of the Company’s registered capital.
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C&S Paper Co., Ltd. 2022 Annual Report
60. Retained earnings
Unit: RMB
Item Current period Last period
Retained earnings before adjustment at the end of
3,265,611,428.36 2,858,664,147.39
the last period
Retained earnings at the beginning of the period
3,265,611,428.36 2,858,664,147.39
after adjustment
Plus: Net profit attributable to owners of the
349,971,119.46 581,097,222.93
parent company of the current period
Less: Appropriated statutory surplus reserve 38,898,414.44 45,515,017.15
Dividends on ordinary shares payable 128,503,493.76 128,634,924.81
Retained earnings at the end of the period 3,448,180,639.62 3,265,611,428.36
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 8,400,901,675.33 5,675,317,897.02 8,735,274,140.52 5,501,122,254.42
Other businesses 168,792,685.32 155,734,068.25 414,596,324.28 361,926,849.96
Total 8,569,694,360.65 5,831,051,965.27 9,149,870,464.80 5,863,049,104.38
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:
Unit: RMB
Contract classification Branch 1 Branch 2 Total
By product type 8,569,694,360.65 8,569,694,360.65
212
C&S Paper Co., Ltd. 2022 Annual Report
Including:
Household paper 8,350,198,393.95 8,350,198,393.95
Personal care 50,703,281.38 50,703,281.38
Others 168,792,685.32 168,792,685.32
By operating region 8,569,694,360.65 8,569,694,360.65
Including:
Domestic 8,364,917,807.64 8,364,917,807.64
Abroad 204,776,553.01 204,776,553.01
By market or customer
type
Including:
Contract type
Including:
By the time of goods
transfer
Including:
By contract term
Including:
By sales channel 8,569,694,360.65 8,569,694,360.65
Including:
Traditional 4,078,262,777.23 4,078,262,777.23
Non-traditional 4,322,638,898.10 4,322,638,898.10
Others 168,792,685.32 168,792,685.32
Total 8,569,694,360.65 8,569,694,360.65
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 RMB61,058,246.33, of which the income of RMB61,058,246.33 is expected to
be confirmed as income in the year of 2022.
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 17,555,207.48 23,259,197.19
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C&S Paper Co., Ltd. 2022 Annual Report
Education surcharges 8,427,702.15 11,299,182.73
Resource tax 121,441.61 108,953.60
Property tax 10,978,648.02 11,076,937.04
Land use tax 2,949,918.58 3,209,808.34
Vehicle and vessel tax 7,250.00 11,340.00
Stamp tax 8,741,850.05 8,115,643.88
Local education surcharges 5,618,468.03 7,766,237.20
Environmental protection tax 818,878.97 698,352.43
Total 55,219,364.89 65,545,652.41
Other description: None
63. Selling expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Employee remuneration 419,938,114.12 392,220,286.40
Product promotion fees 1,048,872,311.39 1,178,898,284.39
Transportation expenses 71,160,288.97 101,585,932.85
Advertising expenses 71,166,380.81 164,748,600.16
Shopping mall management fees 81,521,562.34 91,587,702.20
Traveling expenses 28,590,301.22 28,835,492.13
Rental fees 11,832,333.16 14,115,005.94
Depreciation of use right assets 3,449,771.10 2,970,607.66
Business entertainment expenses 3,362,428.25 3,862,187.81
Others 8,929,244.64 7,720,414.48
Total 1,748,822,736.00 1,986,544,514.02
Other description: None
64. Administrative expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Employee remuneration 169,481,138.91 139,371,643.54
Equity incentive cost 3,046,816.45 12,688,659.70
Depreciation and amortization fees 78,957,388.92 72,707,033.97
Office allowance 29,947,001.90 32,926,203.90
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Consulting service fees 21,166,052.62 18,499,710.79
Outsourcing warehouse management fees 29,375,315.47 25,599,685.04
Business entertainment expenses 6,466,115.63 6,017,041.93
Traveling expenses 3,063,009.63 2,922,435.63
Environmental protection fees 3,482,412.11 3,080,326.43
Rental fees 6,311,024.01 4,916,595.12
Depreciation of use right assets 10,534,238.07 5,562,026.99
Others 10,260,943.69 16,852,841.26
Total 372,091,457.41 341,144,204.30
Other description: None
65. R&D expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Employee remuneration 37,413,163.98 38,282,563.30
Direct investment 138,775,767.29 141,887,483.28
Depreciation and amortization fees 24,643,095.23 26,981,304.24
Others 3,051,241.40 4,812,861.36
Total 203,883,267.90 211,964,212.18
Other description: None
66. Finance expenses
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Interest fees 6,011,515.38 1,872,913.37
Less: Interest income 16,625,014.52 10,512,490.53
Exchange profit and loss -26,795,486.60 -3,248,733.35
Transaction fee 5,392,597.06 4,627,217.45
Others -81.13
Total -32,016,388.68 -7,261,174.19
Other description: None
67. Other income
Unit: RMB
215
C&S Paper Co., Ltd. 2022 Annual Report
Incurred in the Incurred in the prior
Sources of other income
current period period
Refund of individual income tax 1,478,746.93 1,715,525.67
Subsidy funds for the smart factory project 3,207,694.77 1,794,486.82
Subsidies for internship, employment, job stabilization and training 2,796,359.01 920,646.29
Support funds for the transformation of Phase I project 2,251,422.48 2,251,422.48
Subsidies for new-generation IT and industrial development projects 2,103,200.00
Support funds for equipment of Phase II project 1,871,191.20 1,955,301.73
Support funds for the construction of Automated Storage & Retrieval System 1,561,764.72 1,561,764.72
One-off job retention subsidy 1,118,920.00
Subsidies for Hubei C&S’s new factory infrastructure construction 1,071,436.32 1,071,436.32
Subsidies for R&D, famous-brand and high-quality products, and income/efficiency
1,000,000.00 1,020,000.00
increase
Support funds for the technical transformation of equipment 784,403.40 800,790.96
Support funds for enterprise technical upgrading 780,329.31 792,374.28
2013-2017 financial support funds of the Management Committee of Pengzhou
625,447.80 625,447.80
Industrial Development Zone, Sichuan Province
Ex-post funds awarded to the first batch of the union enterprises for the technical
600,082.84 634,586.64
transformation in 2017
25,000 tons capacity expansion project of Tangshan Subsidiary 575,000.04 575,000.04
Subsidies for social insurance premiums 518,485.24 31,604.66
Special funds for business development 500,000.00 800,000.00
Automatic payment of Xinhui District for first batch of enterprises under the “Ten
500,000.00
Golden Rules” in 2021
Financial support for the sewage treatment station project of Tangshan Subsidiary 477,272.76 477,272.76
Funds for reconstruction project of automatic production lines 368,766.67 1,021,200.00
Provincial-level special subsidies for high-quality development of the manufacturing
367,272.80
industry
Support funds for the construction of environmental protection facilities 319,047.60 319,047.60
VAT exemption for employment of retired soldiers and poor population 317,800.00 934,150.00
Subsidies for boiler renovation 270,000.00
Special award funds for the restructuring of industrial enterprises 250,000.00 210,900.00
Tax contribution reward 200,000.00 100,000.00
Import interest discounts on imported equipment in 2014 193,875.00 193,875.00
Special subsidy for the construction expansion of the 25,000-ton household paper project 159,999.96 159,999.96
Subsidies for construction of the water treatment project 155,078.64 155,078.64
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C&S Paper Co., Ltd. 2022 Annual Report
Subsidies for foreign trade stabilization 140,000.00 200,000.00
Subsidies for technical transformation with “zero land increase” 136,808.91
Financial support for sewage centralized water treatment project 121,500.00 121,500.00
District-level support funds for technical transformation 120,689.66
Provincial funds for traditional industry transformation projects 107,142.84 107,142.84
Government reward for staggering power consumption 53,994.16
Subsidies of the Productivity Promotion Center for high-tech enterprises 50,000.00
Rewards for creation of odor-free enterprise 41,834.86 62,752.29
Job increase subsidy 35,000.00
Special subsidy for high-tech enterprise identification 2020 30,000.00
Reward for Manufacturing Enterprises in Spring 2022 30,000.00
Subsidies for job creation for the poor 5,000.00 97,995.00
Subsidies for employees’ training while working 4,000.00 297,000.00
Enterprise operation contribution award 1,708,500.00
Subsidies for renovation 700,000.00
Technical demonstration subsidies for water intake points 280,000.00
Social security subsidies from the labor and employment administration 234,000.00
Enterprise support funds 50,000.00
Financial rewards for cleaner production transformation 50,000.00
Government’s quality award 2020 30,000.00
Subsidies for encouraging scaled development of enterprises 20,000.00
Rewards to “two outstanding and one advanced” recipients (outstanding party affair
10,000.00
worker, outstanding party member, and advanced grass-root party organization)
Subsidies for renovating old projects with new technologies and techniques 3,000.00
Subsidies for supporting enterprises to expand import and export scale 700.00
Total 27,299,567.92 24,094,502.50
68. Return on investment
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Investment income from disposal of trading
-862,019.34
financial assets
Others 13,444.04 365,973.72
Total -848,575.30 365,973.72
Other description:
"Others" refer to mainly for the purchase of forward settlement and sales of foreign exchange, and the maturity income of financial
products
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C&S Paper Co., Ltd. 2022 Annual Report
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 -468,895.97 -309,391.71
Bad debt loss from accounts receivable 3,093,792.00 -9,051,093.81
Total 2,624,896.03 -9,360,485.52
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
-8,287,334.34 -3,442,595.01
Contract Performance Cost
V. Impairment Loss of Fixed Assets -11,957,650.05 -24,348,744.97
Total -20,244,984.39 -27,791,339.98
Other description: None
73. Return on disposal of assets
Unit: RMB
Source Incurred in the current period Incurred in the prior period
Disposal of fixed assets 1,133,878.09 -462,228.42
Total 1,133,878.09 -462,228.42
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
61,502.99 98,166.07 61,502.99
retirement of non-current assets
Including: Fixed assets 61,502.99 98,166.07 61,502.99
Intangible assets
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C&S Paper Co., Ltd. 2022 Annual Report
Government grants not related
27,030.00 270.00 27,030.00
to the company’s daily activities
Income from fine and
2,912,236.62 1,954,623.83 2,912,236.62
compensation
Others 14,027,541.21 1,757,300.44 14,027,541.21
Total 17,028,310.82 3,810,360.34 17,028,310.82
Government grants recognized as profit and loss of the current period:
Unit: RMB
Whether
the grant Amount Amount
Whether
affected the incurred in incurred Related to
Grants Issuer Reason Nature and type a special
profit and the current in the last asset/income
grant
loss of the period period
year
Grants received for
the performance of
Party Building
the State’s function of
Work Office of
Party building ensuring the supply or Related to
Xiaolan Town Grant No No 11,620.00
funds price control of a income
Committee,
public utility or
Zhongshan City
socially necessary
product
Grants received for
the performance of
Management
Employment the State’s function of
Committee of
subsidies for ensuring the supply or Related to
Jiaxing Port
new employees Grant No No 9,000.00
Economic price control of a income
coming to work
Development Zone
in JPEDZ public utility or
(JPEDZ)
socially necessary
product
Development and Grants received for
Construction the performance of
Management the State’s function of
Party building Committee of ensuring the supply or Related to
Grant No No 4,620.00
funds Jiaxing Port price control of a income
Economic public utility or
Development Zone socially necessary
(JPEDZ) product
Development and Grants received for
Return of the Related to
Construction
energy review Grant the performance of No No 1,500.00
Management income
fee the State’s function of
Committee of
219
C&S Paper Co., Ltd. 2022 Annual Report
Jiaxing Port ensuring the supply or
Economic
price control of a
Development Zone
(JPEDZ) public utility or
socially necessary
product
Grants received for
the performance of
Human Resources the State’s function of
Wage survey and Social Security ensuring the supply or Related to
Grant No No 290.00 270.00
subsidies Bureau of price control of a income
Zhongshan City public utility or
socially necessary
product
Total 27,030.00 270.00
Other description: None
75. Non-operating expenses
Unit: RMB
Amount recognized as profit or
Item Incurred in the current period Incurred in the prior period
loss of the current period
External donations 4,446,968.20 8,284,411.07 4,446,968.20
Loss from damage and
2,921,095.42 1,690,488.06 2,921,095.42
retirement of non-current assets
Including: Fixed assets 2,921,095.42 1,690,488.06 2,921,095.42
Intangible assets
Others 1,049,998.15 2,084,181.36 1,049,998.15
Total 8,418,061.77 12,059,080.49 8,418,061.77
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 89,205,696.14 143,551,604.93
Deferred income tax expense -28,660,531.80 -57,115,005.15
Total 60,545,164.34 86,436,599.78
220
C&S Paper Co., Ltd. 2022 Annual Report
(2) Adjustment process of accounting profits and income tax expenses
Unit: RMB
Item Incurred in the current period
Total profit 409,216,989.26
Income tax expenses calculated at the statutory/applicable tax rate 102,304,247.32
Impacts of different tax rates applied to subsidiaries -45,712,716.25
Impacts of adjustments to income taxes during the prior period -4,807,354.21
Impacts of non-deductible costs, expenses and losses 8,760,987.48
Income tax expenses 60,545,164.34
Other description: None
77. Other comprehensive income
Please refer to the notes for details.
78. Items of the cash flow statement
(1) Cash received related to other operating activities
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Current accounts 64,446,492.14 20,953,685.44
Government grants 19,345,965.45 10,830,599.76
Interest income 16,633,143.74 10,512,454.74
Authorized collection of individual income tax under the equity incentive 11,422,541.53 17,793,045.78
Others 23,457,230.37 10,242,024.23
Total 135,305,373.23 70,331,809.95
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 809,965,552.28 773,465,376.40
Current accounts 100,707,087.43 120,888,965.74
Authorized payment of individual income tax under the equity incentive 12,636,579.77 14,133,649.74
Donation expenditure 107,700.00 2,070,143.19
221
C&S Paper Co., Ltd. 2022 Annual Report
Others 5,485,829.34 9,929,582.35
Total 928,902,748.82 920,487,717.42
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 management products 10,000,000.00 50,000,000.00
Principal repayment on maturity of treasury bonds reverse repo 62,479,083.36
Total 72,479,083.36 50,000,000.00
Explanation of cash received related to other investment activities: None
(4) Cash payments related to other investing activities
Unit: RMB
Item Incurred in the current period Incurred in the prior period
Purchasing large-denomination Certificate
210,000,000.00 62,479,083.36
of Deposit
Purchasing wealth management products 10,000,000.00
Forward settlement and sales of foreign
834,500.00
exchange
Reverse repurchase of treasury bond bonds 23,001,000.00
Total 233,835,500.00 72,479,083.36
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
Recovery of bills and letter of credit deposits 1,365,300.52
Total 1,365,300.52
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
Deposits of security deposits for bills, letters of 2,127,733.68
222
C&S Paper Co., Ltd. 2022 Annual Report
guarantee and letters of credit
Cash paid for lease liabilities 12,659,215.01 9,320,775.83
Repurchase and deregistration of equity incentives 3,423,033.76 9,731,035.21
Share repurchase 661,249,972.23
Total 16,082,248.77 682,429,516.95
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 348,671,824.92 581,045,054.07
Plus: Provisions for asset impairment 17,620,088.36 37,151,825.50
Depreciation of fixed assets, oil
and gas assets and productive biological 384,788,628.64 345,469,209.62
assets
Depreciation of use right assets 14,260,141.80 8,828,248.39
Intangible asset amortization 8,141,296.24 6,946,755.56
Long-term unamortized expenses 12,547,488.01 11,725,159.36
Losses from disposal of fixed
assets, intangible assets and other long-term -1,133,878.09 462,228.42
assets ("-" indicates income)
Losses from fixed assets write-off
2,859,592.43 1,592,321.99
("-" indicates income)
Losses from changes in fair value
("-" indicates income)
Finance expenses ("-" indicates
36,578,845.47 7,347,594.03
income)
Investment losses ("-" indicates
848,575.30 -365,973.72
income)
Decrease in deferred income tax
-29,277,350.00 -67,725,902.35
assets ("-" indicates increase)
Increase in deferred income tax
616,818.20 10,610,897.20
liabilities ("-" indicates decrease)
223
C&S Paper Co., Ltd. 2022 Annual Report
Decrease in inventories ("-"
-452,286,540.94 197,085,573.38
indicates increase)
Decrease in operating receivables
109,580,842.67 -143,214,872.03
("-" indicates increase)
Increase in operating payables ("-"
-65,170,177.09 309,932,827.71
indicates decrease)
Others 3,046,816.45 12,688,659.70
Net cash flow from operating
391,693,012.37 1,319,579,606.83
activities
2 Significant investment and financing
-- --
activities not involving cash:
Conversion of debt to capital
Convertible corporate bonds due within
one year
Fixed assets acquired under finance
lease
3 Net changes in cash and cash equivalents: -- --
Balance of cash at the end of the period 1,248,898,024.59 797,797,675.70
Less: Balance of cash at the beginning
797,797,675.70 1,050,034,135.72
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
451,100,348.89 -252,236,460.02
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
Balance at the end of the Balance at the beginning of the
Item
period period
I. Cash 1,248,898,024.59 797,797,675.70
Including: Cash on hand 20,309.66 46,249.83
Bank deposits always available for payment 1,231,680,951.11 795,982,835.01
224
C&S Paper Co., Ltd. 2022 Annual Report
Other monetary funds always available for payment 17,196,763.82 1,768,590.86
III. Balance of Cash and Cash Equivalents at the End of the
1,248,898,024.59 797,797,675.70
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 75,889,516.90
and notes
Total 75,889,516.90 --
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 261,363,335.33
Including: USD 37,003,390.67 6.9150 255,878,446.48
EUR
HKD 6,194,066.49 0.8855 5,484,845.88
MOP 50.00 0.8594 42.97
Accounts receivable 66,872,908.06
Including: USD 5,158,609.25 6.9150 35,671,782.96
EUR
HKD 35,235,601.47 0.8855 31,201,125.10
Long-term borrowings
Including: USD
EUR
225
C&S Paper Co., Ltd. 2022 Annual Report
HKD
Other receivables 159,644.94
Including: HKD 180,287.90 0.8855 159,644.94
Short-term borrowings 436,299,222.62
Including: USD 63,094,609.20 6.9150 436,299,222.62
Accounts payable 528,439,775.18
Including: USD 75,812,244.15 6.9150 524,241,668.30
JPY 79,509,600.00 0.0528 4,198,106.88
Other payables 2,465,478.08
Including: HKD 2,784,277.90 0.8855 2,465,478.08
Other description: None
(2) For overseas business entities, especially important ones, disclose their main overseas business address,
the standard currency for accounting and selection basis. If there are changes in the standard currency for
accounting, reasons shall be also provided.
√ Applicable □ Not applicable
Overseas business entity Business address Standard currency for accounting
Zhong Shun International Co., Ltd. Hong Kong RMB
C&S Hong Kong Co., Ltd. Hong Kong RMB
C&S (Macao) Co., Ltd. Macao RMB
83. Hedges
Disclosure of hedged items and related hedging instruments and qualitative and quantitative information about hedged risks
according to the type of hedging: None
84. Government grants
(1) Basic information on government grants
Unit: RMB
Amount recognized as profit or
Category Amount Reporting items
loss for the current period
Related to asset 9,792,782.00 Deferred income, other income 1,509,822.83
Related to income 9,964,593.27 Other income 9,964,593.27
Related to income 27,030.00 Non-operating income 27,030.00
Total 19,784,405.27 11,501,446.10
226
C&S Paper Co., Ltd. 2022 Annual Report
(2) Return of government grants
□ Applicable √ Not applicable
Other description:
Please refer to Note VII (51), (67) and (74) for details.
85. Others: None
VIII. Changes in the Consolidated Scope
1. Business combinations of enterprises not under common control
(1) Business combinations of enterprises not under common control in the reporting period: None
(2) Combination costs and goodwill: 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
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C&S Paper Co., Ltd. 2022 Annual Report
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
related situations:
On May 20, 2022, the Company and Zhongshan Zhongshun Trading Co., Ltd., a wholly owned subsidiary of the
Company, jointly invested and established Zhongshun Health Life Technology (Shenzhen) Co., Ltd., with a
registered capital of RMB10 million. The Company holds 60% of the shares while Zhongshan Trading holds 40%
of the shares. The Company has incorporated Zhongshun Health into the scope of its consolidated statements
since June 2021. Zhongshun Health has not started operating activities.
On October 13, 2022, the Company and Guangzhou Zhihecheng New Material Technology Co., Ltd., Guangdong
Huichuang Zhiyuan Enterprise Management Co., Ltd., Jiangmen Yutongda Trading Co., Ltd. joint invested and
established Guangdong Huashun Material Technology Co., Ltd., with a registered capital of RMB20 million. The
Company holds 51% of the shares, Guangzhou Zhihecheng New Material Technology Co., Ltd. holds 28%,
Guangdong Huichuang Zhiyuan Enterprise Management Co., Ltd. holds 14.50% of the shares while Jiangmen
Yutongda Trading Co., Ltd. holds 6.50% of the shares. The Company has incorporated Guangdong Huashun
Material Technology Co., Ltd. into the scope of its consolidated statements since October 2022. Currently,
Guangdong Huashun Material Technology Co., Ltd. has started operating activities.
In June 2022, the Company withdraw its investment in Guiyang Dolemi Sanitary Products Co., Ltd., and no
longer incorporated it into the scope of consolidated statements. On August 6, 2021, Dolemi Sanitary Products Co.,
Ltd. 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.
In October 2022, the Company withdraw its investment in Luzhou Dolemi Sanitary Products Co., Ltd., and no
longer incorporated it into the scope of consolidated statements. On May 20, 2021, Dolemi Sanitary Products Co.,
Ltd. 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.
In October 2022, the Company withdraw its investment in Mianyang Dolemi Sanitary Products Co., Ltd., and no
longer incorporated it into the scope of consolidated statements. On June 08, 2021, Dolemi Sanitary Products Co.,
Ltd. 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.
In October 2022, the Company withdraw its investment in Dazhou Dolemi Sanitary Products Co., Ltd., and no
longer incorporated it into the scope of consolidated statements. On July 14, 2021, Dolemi Sanitary Products Co.,
Ltd. and Dazhou Jiatai Trading Co., Ltd. jointly invested and established Dazhou Dolemi Sanitary Products Co.,
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C&S Paper Co., Ltd. 2022 Annual Report
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.
In October 2022, Zhanjiang Duoleimi Sanitary Products Co., Ltd. is dissolved and cancelled, and the company
will no longer include it in the scope of merger from the date of cancellation. On August 18, 2021, Dolemi
Sanitary Products Co., Ltd. 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.
6. Others: None
IX. Equities in Other Entities
1. Equities in subsidiaries
(1) Composition of the enterprise group
Main Shareholding
Name of Registered Obtaining
business Principal businesses percentage
subsidiary address method
address Direct Indirect
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 Capital
Jiangmen
Jiangmen, Jiangmen, online sales) of Class I and II medical devices. (The contribution
Zhongshun 88.25% 11.75%
Guangdong Guangdong above items do not involve special management for
Paper Co., Ltd.
measures for the foreign access). (For items that must establishment
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 paper products; sales of paper pulp; sales of
personal hygiene products; sales of hygiene products
and disposable medical products; sales of
disinfectants (excluding hazardous chemicals); sales
Capital
Zhejiang of Class I medical devices; retail of Class I medical
Jiaxing, Jiaxing, contribution
Zhongshun devices; sales of Class II medical devices; retail of 75.00% 25.00%
Zhejiang Zhejiang for
Paper Co., Ltd. class II medical devices; wholesale of medical face
establishment
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
229
C&S Paper Co., Ltd. 2022 Annual Report
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 contribution
Hong Kong Hong Kong Purchase of pulp 100.00%
Kong Co., Ltd. for
establishment
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); wholesale, retail and online Capital
C&S (Yunfu) Yunfu, Yunfu, sales: food; import and export of goods and contribution
100.00%
Paper Co., Ltd. Guangdong Guangdong technologies (excluding the import and export of for
goods and technologies prohibited by the State or establishment
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.)
Wholesale, retain and online sales: paper, wood pulp,
sanitary products, maternal and infant products,
cosmetics, daily necessities, medical equipment, daily
sundries, disinfection supplies (excluding dangerous
Capital
Yunfu Hengtai chemicals); import and export of goods or
Yunfu, Yunfu, contribution
Trading Co., technologies (excluding the import and export of 100.00%
Guangdong Guangdong for
Ltd. goods and technologies prohibited by the State or
establishment
involving administrative approval). (For items that
must be approved in accordance with the law, the
company may carry out business operations upon
approval by competent departments.)
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C&S Paper Co., Ltd. 2022 Annual Report
Capital
C&S (Macao) contribution
Macao Macao Wholesale, trade 100.00%
Co., Ltd. for
establishment
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 hazardous chemicals and precursor Business
chemicals); import and export of goods and combinations
Zhongshan
technologies; operations of Class II and Class III involving
Zhongshun Zhongshan, Zhongshan,
medical devices. (The above business scope involves 100.00% enterprises
Trading Co., Guangdong Guangdong
food operations, import and export of goods, and under
Ltd.
import and export of technologies.) (Exclude items common
prohibited by laws and administrative regulations; control
items whose operations are 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.)
Import, export and sales of paper products, general Business
merchandise and pulp boards; sales of cosmetics, combinations
Xiaogan C&S shower gel and sanitary pads; sales of baby products involving
Xiaogan, Xiaogan,
Trading Co., (excluding food). (For items that must be approved in 100.00% enterprises
Hubei Hubei
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,
and pulp boards; import and export of goods. (The
company may independently select business items Business
and carry out business activities in accordance with combinations
the law; for items that must be approved in involving
Beijing C&S
Beijing Beijing accordance with the law, the company may carry out 100.00% enterprises
Paper Co., Ltd.
business operations upon approval by competent under
departments based on contents of the approval; it is common
prohibited to engage in business activities of items control
prohibited and restricted by the city’s industrial
policies.)
Chengdu Pengzhou, Pengzhou, Sales of household paper, cleaning products, general Business
100.00%
Zhongshun Sichuan Sichuan merchandise, hygiene products, baby products, combinations
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C&S Paper Co., Ltd. 2022 Annual Report
Paper Co., Ltd. cosmetics, nonwoven products, feminine hygiene involving
products, chemical products for daily use, daily enterprises
necessities, medical devices, medical supplies and under
disinfectant products (excluding hazardous common
chemicals); e-commerce [For items that must be control
approved in accordance with the law, the company
may carry out business operations upon approval by
competent departments.]
Wholesale, retail: paper products, paper pulp, general
merchandise; import and export of goods and
technologies (exclude items prohibited by laws and Business
administrative regulations; items whose operations combinations
Hangzhou Jie are restricted by laws and administrative regulations involving
Hangzhou, Hangzhou,
Rou Trading shall not be carried out unless the permit has been 100.00% enterprises
Zhejiang Zhejiang
Co., Ltd. obtained); other legitimate items that do not need under
approval according to the law) (for items that must be common
approved in accordance with the law, the company control
may carry out business operations upon approval by
competent departments)
Business
Household paper, paper pulp, pulp boards, import and combinations
Shanghai export of goods and technologies. (For items that involving
Huicong Paper Shanghai Shanghai must be approved in accordance with the law, the 100.00% enterprises
Co., Ltd. company may carry out business operations upon under
approval by competent departments.) common
control
Licensed items: production of sanitary products and
disposable medical supplies; production of cosmetics
(for items that must be approved in accordance with
the law, companies may carry out business operations
upon approval by relevant departments, and the
specific business items are subject to the approval Business
document or the permit issued by competent combinations
department). General items: sales of sanitary products involving
C&S (Hubei) Xiaogan, Xiaogan,
and disposable medical supplies; retail of cosmetics; 93.375% 6.625% enterprises
Paper Co., Ltd. Hubei Hubei
wholesale of cosmetics; manufacture of paper; sales under
of personal hygiene products; sales of knitwear; common
manufacture of maternal and infant products; sales of control
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
232
C&S Paper Co., Ltd. 2022 Annual Report
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
combinations
Zhong Shun involving
Hong Kong, Hong Kong,
International Sales of paper products 100.00% enterprises
China China
Co., Ltd. under
common
control
Licensed items: production of sanitary products and
disposable medical supplies; import and export of
goods (for items that must be approved in accordance
with the law, the company may carry out business
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
Business
and disposable medical supplies; sales of personal
combinations
hygiene products; sales of daily necessities;
involving
C&S (Sichuan) Pengzhou, Pengzhou, manufacture of paper products; sales of paper
100.00% enterprises
Paper Co., Ltd. Sichuan Sichuan products; manufacture of paper; manufacture of daily
under
chemical products; sales of daily chemical products;
common
sales of Class II medical devices; sales of Class I
control
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.)
Production, processing and sales: high-class Business
household paper products (excluding printing combinations
C&S
Zhongshan, Zhongshan, process); import and export of pulp boards (exclude involving
(Zhongshan) 100.00%
Guangdong Guangdong items prohibited by laws and administrative enterprises
Paper Co., Ltd.
regulations; items whose operations are restricted by under
laws and administrative regulations shall not be common
233
C&S Paper Co., Ltd. 2022 Annual Report
carried out unless the permit has been obtained). (For control
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 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
paper making; R&D, production and sales of bamboo
Capital
pulp, wood pulp, bamboo chips and wood chips;
C&S (Dazhou) Dazhou, Dazhou, contribution
combined heat and power and sales; warehouse 100.00%
Paper Co., Ltd. Sichuan Sichuan for
leasing; processing and sales of lime and limestone;
establishment
processing 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 products for daily use, and ceramics for daily Capital
Sun Daily
Yunfu, Yunfu, use; import and export of goods or technologies contribution
Necessities Co., 50.00% 50.00%
Guangdong Guangdong (excluding the import and export of goods and for
Ltd.
technologies prohibited by the State or involving establishment
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.)
General items: manufacture of paper products;
Internet sales (sales only on third-party platforms)
(excluding the sales of commodities requiring a Capital
Dolemi Sanitary
Zhongshan, Zhongshan, permit); sales of personal hygiene products; sales of contribution
Products Co., 60.00% 40.00%
Guangdong Guangdong household products, sales of hygiene products and for
Ltd.
disposable medical products; retail of cosmetics; sales establishment
of general merchandise; sales of plastic products;
sales of metal products; sales of rubber products;
234
C&S Paper Co., Ltd. 2022 Annual Report
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
Capital
hygiene products; sales of household products; sales
C&S (Jiangsu) Suqian, Suqian, contribution
of sanitary products and disposable medical products; 100.00%
Paper Co., Ltd. Jiangsu Jiangsu for
retail of cosmetics; wholesale of cosmetics; sales of
establishment
knitwear; wholesale of kitchen utensils and daily
groceries; sales of metal products; sales of rubber
products; manufacture of daily-sue ceramic products;
R&D of kitchen utensils and daily groceries; retail of
kitchen utensils and daily groceries; sewage treatment
and recycling; manufacture of Class I medical
devices; sales of Class I medical devices; sales of
Class II medical devices; sales of disinfectants
(excluding hazardous chemicals). (The company may
carry out business operations independently
according to the law based on the business license,
except for items that must be licensed according to
the law)
Technology development, technology consultation,
Beijing technology transfer, technology promotion, and
Capital
Bloomage technical services; sales of paper products, daily
contribution
Jierou Beijing Beijing necessities, hygiene products, cosmetics, chemical 51.00%
for
Biotechnology products (excluding hazardous chemicals), Class I
establishment
Co., Ltd. medical devices, Class II medical devices,
disinfection products and non-medical masks. (The
235
C&S Paper Co., Ltd. 2022 Annual Report
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 household products; sales of sanitary
products and disposable medical products; retail of
Zhengzhou cosmetics; sales of daily necessities; sales of plastic Capital
Dolemi Sanitary Zhengzhou, Zhengzhou, products; sales of paper products; sales of metal contribution
60.00%
Products Co., Henan Henan products; sales of rubber products; manufacture of for
Ltd. daily-use ceramic products (the company may carry establishment
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 daily necessities; retail of
cosmetics; sales of household goods; sales of office
supplies; sales of arts and crafts and etiquette
products (except ivory and its products); sales of
building decoration materials; sales of knitwear; sales
of machinery and equipment; sales of instruments and
Xi’an Dolemi meters; retail of clothes and apparels; retail of shoes Capital
Sanitary Xi’an, Xi’an, and hats; sales of foods (only pre-packaged foods); contribution
60.00%
Products Co., Shaanxi Shaanxi sales of sundries; sales of electronic products; for
Ltd. landscaping engineering construction; advertising establishment
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)
Guangdong Technology services, development, consultation,
exchange, transfer, and promotion; paper Capital
Huashun manufacturing; paper product manufacturing; paper
Jiagnmen Jiagnmen contribution
Material product sales. (For items that must be approved in 51%
Guangdong Guangdong for
Technology Co., accordance with the law, the company may carry out
business operations upon approval by competent establishment
Ltd
departments.)
Zhongshun General items: Internet sales (excluding the sales of Capital
Shenzhen Shenzhen
commodities requiring a permit); sales of paper
Health Life 60% 40% contribution
Guangdong Guangdong products; sales of general merchandise; sales of daily
technology(Shen sundries; sales of daily necessities; sales of household for
236
C&S Paper Co., Ltd. 2022 Annual Report
zhen) Co., Ltd products; sales of maternal and infant products, establishment
wholesale of pet food and supplies; retail of pet food
and supplies; sales of knitwear and raw materials;
sales of knitwear; wholesale of cosmetics; retail of
cosmetics; sales of packaging materials and products;
sales of chemical products (excluding chemical
products that need to be licensed); sales of washing
machinery; sales of electronic products; wholesale of
clothing and apparel; retail of clothing and apparel;
sales of leather products; wholesale of shoes and hats;
retail of shoes and hats; sales of household
appliances; sales of toys; sales of animation and
gaming products; consulting and planning services;
marketing planning; project planning and public
relations services; experiential expansion activities
and planning; health consultation services (excluding
diagnosis and treatment services); conference and
exhibition services; brand management; video
shooting and production services; advertising
publishing (not radio stations, TV stations, or
newspaper publishing units); advertising production;
advertising design and agency; business information
consulting (excluding investment consulting);
professional design services; Internet data services;
domestic trade agency; trade agency; organization of
cultural and artistic exchange activities; corporate
image planning; corporate management consulting;
sales of Class I medical devices; sales of veterinary
medical devices. (The company may carry out
business operations independently according to the
law based on the business license, except for items
that must be licensed according to the law) Licensed
items: Sales of Class II medical devices; Internet
information services; import and export of goods.
(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)
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.
237
C&S Paper Co., Ltd. 2022 Annual Report
(3) Main financial information of important non-wholly-owned subsidiaries: None
(4) Significant restrictions on the use of the assets and the repayment of the debts of the enterprise group:
None
(5) Financial or other support provided to consolidated structured entities: None
Other description:
Note: C&S (Yunfu) Co., Ltd. was changed to Yunfu Hengtai Trading Co., Ltd. in March 2021.
2. Transactions in which the share of owner’s equity in a subsidiary changes while control of the subsidiary
is still retained
(1) Description of changes in the share of owner’s equity in the subsidiary: None
(2) Impact of the transaction on the equity of minority shareholders and the equity attributable to owners
of the Parent Company: 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.
238
C&S Paper Co., Ltd. 2022 Annual Report
5. Interests in unconsolidated structured entities
Description of unconsolidated structured entities:
The Company does not have interests in unconsolidated structured entities.
6. Others: None
X. Risks Associated with Financial Instruments
The main financial instruments of the Company include monetary funds, notes receivable, accounts receivable,
notes payable, accounts payable, other payables, loans, etc. Please refer to relevant items of "Note VII" for
detailed information of all financial instruments. The risks associated with these financial instruments and the risk
management policies adopted by the Company to reduce these risks are as follows. The management of the
Company manages and monitors these risk exposures to ensure that the above risks are kept within control.
The Company adopts the sensitivity analysis method to analyze the possible impact of reasonable and possible
changes in risk variables on the profit and loss or shareholder equities in the current period. Since any risk
variable rarely changes in isolation and the correlation between the variables will have a significant effect on the
ultimate financial impact of changes in a certain risk variable, the following contents are under the consumption
that changes of a variable are independent.
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, 2022, 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
239
C&S Paper Co., Ltd. 2022 Annual Report
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
and settled in RMB. See "Note VII (82)" for the conversion of foreign currency financial assets and liabilities into
RMB as of December 31, 2022. During the reporting period, the Company generated exchange profit and loss of
-RMB26,795,486.6.
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:
End of year
Item
Impact on profit Impact on shareholders’ equity
Appreciation of RMB against foreign currency by 1.00% -6,388,085.88 -6,388,085.88
Depreciation of RMB against foreign currency by 1.00% 6,388,085.88 6,388,085.88
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, 2022 analyzed based on the maturity period of
undiscounted remaining contractual obligations are as follows:
Item Within 1 year Over 1 year Total
Notes payable 340,335,111.30 340,335,111.30
Accounts payable 946,432,741.75 2,117,688.86 948,550,430.61
Other payables 782,987,663.49 24,436,150.64 807,423,814.13
Non-current liabilities due within one year 9,833,661.30 9,833,661.30
Lease liabilities 803,879.30 803,879.30
Total 2,079,589,177.84 27,357,718.80 2,106,946,896.64
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C&S Paper Co., Ltd. 2022 Annual Report
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 Registered Registered percentage of the right of the Parent
Principal businesses
Company address capital Parent Company to the Company to the
Company Company
External investment; consulting of
Guangdong
Zhongshan, information on commodities circulation RMB30
Zhongshun Paper 28.69% 28.69%
Guangdong (exclusive of real estate, labor services, million
Group Co., Ltd.
financial futures, and studying abroad)
Information on the Company’s Parent Company
The ultimate controller of the Company is Mr. Deng Yingzhong, the father, and Mr. Deng Guanbiao and Mr. Deng Guanjie, whose
two sons.
Other description: None
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C&S Paper Co., Ltd. 2022 Annual Report
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
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
Yantai Zhongshun Network Technology Co., Ltd. A company 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
A company where the son of the Company’s Vice President Yue Yong
Sichuan West Enjoying Life Trading Co., Ltd.
holds 50% equity
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 controls and serves as the executive director, manager,
Necessities Co., Ltd.) and legal representative of the company
A company in which the Company’s actual controller Mr. Deng Guanbiao
Shenzhen Jinju Investment Co., Ltd.
serves as a director
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
Zhongshan Qianlai Network Technology Co., Ltd. A company controlled by the Company’s independent director Mr. Liu Die
A company controlled by the Company’s supervisor Liang Yongliang and
Foshan Yingfang Jiayu Consulting Services Co., Ltd. serves as the executive director, manager, and legal representative of the
company
A company where the brother of Deng Yingzhong, a director and actual
Foshan Shunde District Taogang Trading Co., Ltd controller of the company, holds 50% of the shares and serves as the legal
representative
Meizhou Xinhong Electronics Co., Ltd. A company in which the mother-in-law of the Company’s actual controller
242
C&S Paper Co., Ltd. 2022 Annual Report
Mr. Deng Guanbiao serves as the General Manager, executive director and
the legal representative
A company in which the sibling-in-laws of the Company’s supervisor
Guangzhou Chenhui Paper Co., Ltd.
Zhang Gao act as the legal representative
A company in which the sibling-in-laws of the Company’s supervisor
Guangzhou Jiahui Enterprise Management Co., Ltd. Zhang Gao controls and acts as the legal representative while Mr. Zhang’s
spouse serves 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 in the past 12 months
A company in which the sibling-in-laws of the Company’s supervisor
Zhejiang FTZ Xinjiachang Trading Co., Ltd.
Zhang Gao acts 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.
serves as the executive director, manager and legal representative
Guangdong Huichuang Zhiyuan Enterprise A company controlled by Chairman Liu Peng and served as the legal
Management Co., Ltd representative, manager, and executive director of the company
A company controlled by Vice President Lin Tiande and served as the
Jiangmen Yutongda Trading Co., Ltd
legal representative and executive director
A company in which the Company’s director Yu Ep. Rachel Jing acts as
Yingtan Dongwu Technology Co., Ltd
Chairman
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 Whether to outstrip the Incurred in the
Related party
party transaction current period transaction limit transaction limit prior period
Sichuan West Enjoying
Promotion fee 255,495.97
Life Trading Co., Ltd.
Table of sale of goods/provision of labor services
Unit: RMB
Content of related party Incurred in the current Incurred in the prior
Related party
transaction period period
243
C&S Paper Co., Ltd. 2022 Annual Report
Pengzhou Enjoying Life Trading Co., Ltd. Sale of goods 8,288.50 2,372,236.58
Sichuan West Enjoying Life Trading Co.,
Sale of goods 111.50 309,795.62
Ltd.
Explanation of the related party transactions for purchase and sale of goods, and provision and acceptance of labor services
None.
(2) Related entrusted management/contracting and entrusting management/contracting out: None
(3) Related lease
The Company as the lessee: None
The Company as the lessee:
Unit: RMB
Simplified
Variable lease
rental fees for
payments not
short-term Interest expense on
included in the Increased use rights
leases and low Rent paid lease liabilities
measurement of assets
value asset assumed
Type lease liabilities
leases (if
Name of of (if applicable)
applicable)
lessor leased
assets Incurr Incurr
Incurr Incurr
ed in ed in Incurred Incurred Incurred Incurred Incurred Incurred
ed in ed in
the the in the in the in the in the in the in the
the the
curren curren current prior current prior current prior
prior prior
t t period period period period period period
period period
period period
Mr.
Deng
Yingzho
ng, Mr.
Housi
Deng 3,360,776 3,137,875 236,569 355,936 1,029,607 8,757,544
ng
Guanbia .96 .25 .76 .65 .91 .17
lease
o and
Mr.
Deng
Guanjie
Explanation of related lease: None
244
C&S Paper Co., Ltd. 2022 Annual Report
(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 35,576,200.62 36,922,924.97
(8) Other related party transactions
6. Receivables from and payables to related parties
(1) Receivables:None
(2) Payables
Unit: RMB
Book balance at the end of the Book balance at the beginning of the
Project Related party
period period
Sichuan West Enjoying Life Trading
Other payables 282,242.81
Co., Ltd.
Contract Sichuan West Enjoying Life Trading
0.90 126.90
liabilities Co., Ltd.
Contract Pengzhou Enjoying Life Trading Co.,
8.37 9,374.37
liabilities 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
245
C&S Paper Co., Ltd. 2022 Annual Report
The Company’s total amount of all equity instruments exercised in the
9,691,470.00
current period
The Company’s total amount of all equity instruments expired in the
2,047,635.00
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 RMB8.372 per share, and that for
Scope of exercise prices and remaining contractual term of the Company’
reserved stock options is RMB13.765 per share; the
stock options issued as at the end of the reporting period
validity period is from the grant date of the stock
options to the date when all stock options are exercised
or canceled, with a maximum period of 60 months.
Other description: None
2. Equity-settled share-based payment
√ Applicable □ Not applicable
Unit: RMB
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
118,680,283.98
recognized as capital surplus
Total fees confirmed by the equity-settled share-based payment in
3,046,816.45
the current period
Other description: none
3. Cash-settled share-based payment
□ Applicable √ Not applicable
4. Revision and termination of share-based payment
There was no revision and termination of share-based payment of the Company during the reporting period.
5. Others
None
246
C&S Paper Co., Ltd. 2022 Annual Report
XIV. Commitments and Contingencies
1. Significant commitments
Significant commitments on the balance sheet date
As at December 31, 2022, 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
The situation of our company providing guarantees for subsidiaries:
Whether it is
Starting date of Guarantee
Guaranteed party Currency Guarantee amount related party
guarantee expiration date
guarantee?
C&S Hong Kong、Macao C&S、Zhong
USD 50,000,000.00 2022.11.14 2027.7.31 No
Shun International
Zhongshan Trading、Sichuan C&S、
RMB 150,000,000.00 2022.4.6 2026.3.2 No
Yunfu Trading、Jiangmen C&S
Zhongshan Trading RMB 150,000,000.00 2022.11.23 2026.11.9 No
Zhongshan Trading RMB 136,000,000.00 2021.3.2 2026.3.1 No
Zhongshan Trading RMB 500,000,000.00 2021.8.21 2025.5.11 No
Zhongshan Trading RMB 300,000,000.00 2022.12.8 2025.12.31 No
Zhongshan Trading RMB 150,000,000.00 2022.12.23 2026.9.22 No
Zhongshan Trading RMB 200,000,000.00 2022.5.17 2030.2.27 No
Zhongshan Trading RMB 200,000,000.00 2022.8.18 2030.12.31 No
Jiangmen C&S RMB 120,000,000.00 2022.11.23 2026.11.7 No
Jiangmen C&S RMB 150,000,000.00 2022.3.1 2025.2.13 No
Jiangmen C&S RMB 50,000,000.00 2022.3.25 2025.12.31 No
Jiangmen C&S RMB 50,000,000.00 2020.12.23 2025.12.23 No
Yunfu Trading RMB 200,000,000.00 2022.11.23 2026.11.7 No
Yunfu Trading RMB 50,000,000.00 2020.11.20 2023.12.31 No
Yunfu Trading RMB 80,000,000.00 2020.4.14 2028.4.14 No
Yunfu Trading RMB 50,000,000.00 2022.4.24 2027.2.24 No
Yunfu Trading Yunfu Trading RMB 70,000,000.00 2022.3.1 2025.2.13 No
Yunfu Trading RMB 80,000,000.00 2022.3.25 2025.12.31 No
247
C&S Paper Co., Ltd. 2022 Annual Report
Whether it is
Starting date of Guarantee
Guaranteed party Currency Guarantee amount related party
guarantee expiration date
guarantee?
Hubei C&S RMB 100,000,000.00 2021.12.3 2026.9.29 No
Zhongshan Trading、Hubei C&S、
USD 15,000,000.00 2021.6.1 2023.4.22 No
Macao C&S
Jiangmen C&S、Yunfu Trading、Hubei
RMB 220,000,000.00 2022.1.17 2026.1.17 No
C&S
C&S Hong Kong、Zhong Shun
HKD 203,000,000.00 2021.9.8 2024.9.8 No
International
C&S Hong Kong、Macao C&S HKD 400,000,000.00 2021.3.17 2025.12.31 No
C&S Hong Kong、Macao C&S USD 24,000,000.00 2020.3.27 2025.8.22 No
C&S Hong Kong、Zhong Shun
USD 30,000,000.00 2020.1.30 2024.1.30 No
International、Macao C&S
C&S Hong Kong、Zhong Shun
USD 63,500,000.00 2020.2.12 2024.2.12 No
International、Macao C&S
C&S Hong Kong、Zhong Shun
USD 35,000,000.00 2020.9.1 2024.7.9 No
International、Macao C&S
C&S Hong Kong USD 20,000,000.00 2022.9.1 2024.9.1 No
C&S Hong Kong USD 10,000,000.00 2022.11.17 2029.10.28 No
Macao C&S USD 11,000,000.00 2018.3.23 2024.9.23 No
Macao C&S USD 10,000,000.00 2022.11.17 2029.10.28 No
Macao C&S USD 30,000,000.00 2021.11.12 2024.10.20 No
Macao C&S RMB 70,000,000.00 2018.8.15 2025.8.15 No
(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:
According to the resolution of the 21st meeting of the 5th Board of Directors held on April 18, 2023, profit
248
C&S Paper Co., Ltd. 2022 Annual Report
distribution proposal of the Company in 2022: 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 RMB0.62 (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. 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.
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.
249
C&S Paper Co., Ltd. 2022 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 2022, the Company signed the XIAOYIDA Business Cooperation Agreement with Bank of China Limited
Zhongshan Branch and Shanghai Junmeng E-commerce Co., Ltd. (No. 2022-XYDXY-33725001), under which
the bank offers a credit line of XIAOYIDA service up to RMB235 million to Shanghai Junmeng and the Company
provides a joint and several liability guarantees. The line of credit is valid from September 27, 2022 until August
04, 2023. As of December 31, 2022, Shanghai Junmeng had no financing balance left of the XIAOYIDA service.
In 2022, 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.2022-XYDXY-33725002), under which the bank offers a credit line of XIAOYIDA service up to
RMB150 million to Wuhan Jie Rou and the Company provides a joint and several liability guarantee. The line of
credit is valid from September 26,2022 until August 3, 2023. As of December 31 2022, Wuhan Jierou had a
financing balance of RMB67 million for the sales of Yida business, which has been fully settled on February 3,
2023.
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 provision
Book value Book value
Percenta Provisio Percenta Provisio
Amount Amount Amount Amount
ge n ratio ge n ratio
Includin
g:
Account
s 140,697,770. 1,966,017. 138,731,752. 173,226,692. 2,171,652. 171,055,039.
100.00% 1.40% 100.00% 1.25%
receivabl 14 33 81 33 96 37
e for
250
C&S Paper Co., Ltd. 2022 Annual Report
which
bad debt
reserve
is set
aside in
portfolio
s
Includin
g:
Portfolio
61,917,499.2 1,966,017. 59,951,481.8 82,828,535.1 2,171,652. 80,656,882.1
based on 44.01% 3.18% 47.82% 2.62%
2 33 9 5 96 9
aging
Portfolio
based on 78,780,270.9 78,780,270.9 90,398,157.1 90,398,157.1
55.99% 52.18%
related 2 2 8 8
parties
140,697,770. 1,966,017. 138,731,752. 173,226,692. 2,171,652. 171,055,039.
Total 100.00% 1.40% 100.00% 1.25%
14 33 81 33 96 37
Bad debt reserve set aside in portfolios: 1,966,017.33
Unit: RMB
Balance at the end of the period
Name
Book balance Impairment provision Ratio of provision
Within the credit period 49,882,518.28 997,650.37 2.00%
Credit period - 1 year 9,091,646.23 454,582.31 5.00%
1 to 2 years 2,618,268.32 392,740.25 15.00%
2 to 3 years 207,443.99 62,233.20 30.00%
3 to 5 years 117,622.40 58,811.20 50.00%
Over 5 years
Total 61,917,499.22 1,966,017.33
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) 137,754,435.43
251
C&S Paper Co., Ltd. 2022 Annual Report
1 to 2 years 2,618,268.32
2 to 3 years 207,443.99
Over 3 years 117,622.40
3 to 4 years 36,645.00
4 to 5 years
Total 140,697,770.14
(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
2,171,652.96 -205,635.63 1,966,017.33
receivable
Total 2,171,652.96 -205,635.63 1,966,017.33
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 34,174,531.87 24.29%
2nd 25,804,989.35 18.34%
3rd 19,630,636.66 13.95% 401,324.08
4th 18,374,959.82 13.06%
5th 4,578,803.55 3.25% 91,576.07
Total 102,563,921.25 72.89%
252
C&S Paper Co., Ltd. 2022 Annual Report
(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 226,320,859.44 128,580,102.05
Total 226,320,859.44 128,580,102.05
(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
253
C&S Paper Co., Ltd. 2022 Annual Report
Current accounts 223,230,988.36 125,981,678.74
Others 2,663,363.48 1,844,844.60
Reserve 436,792.35 724,829.00
Margins and deposits 345,165.60 253,137.00
Total 226,676,309.79 128,804,489.34
2) Provision of bad debt reserve
Unit: RMB
Phase I Phase II Phase III
Expected credit losses in Expected credit losses in
Bad debt provision Expected credit loss Total
the whole duration (without the whole duration (with
in the next 12 months
credit impairment) credit impairment)
Balance as at January 1,
386,023.90 386,023.90
2021
Balance as at January 1,
2021 in the reporting —— —— —— ——
period
--Moving to the third
-4,690.34 4,690.34
stage
Transferred-back in the
135,753.40 135,753.40
reporting period
Write-off in the reporting
4,690.34 4,690.34
period
Balance as at December
355,450.35 355,450.35
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) 226,521,709.79
1 to 2 years 110,000.00
Over 3 years 44,600.00
Total 226,676,309.79
254
C&S Paper Co., Ltd. 2022 Annual Report
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 224,387.29 135,753.40 4,690.34 355,450.35
Total 224,387.29 135,753.40 4,690.34 355,450.35
The amount of other accounts receivable written-off by the Company in the year was RMB4,690.34.
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
Item Write-off amount
Other receivables actually written off 4,690.34
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 127,493,581.92 Within 1 year 56.24%
2nd Current accounts 67,046,363.77 Within 1 year 29.58%
3rd Current accounts 25,470,272.76 Within 1 year 11.24%
Within 1 year, 4-5
4th Others 2,661,408.58 1.17% 133,070.43
years
5th Others 1,860,806.87 Within 1 year 0.82% 93,040.34
Total -- 224,532,433.90 -- 99.05% 226,110.77
255
C&S Paper Co., Ltd. 2022 Annual Report
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
2,007,893,370.09 2,007,893,370.09 1,945,421,378.56 1,945,421,378.56
subsidiaries
Total 2,007,893,370.09 2,007,893,370.09 1,945,421,378.56 1,945,421,378.56
(1) Investment in subsidiaries
Unit: RMB
Balance at the Increase/decrease in the period Closing
beginning of the Closing balance balance of
Investee Increase in Decrease in Impairment
period Others (book value) impairment
investment investment Provision
(Book value) provision
Jiangmen
Zhongshun 699,174,385.09 105,556.00 699,279,941.09
Paper Co., Ltd.
Zhongshan
Zhongshun
96,707,066.56 310,087.76 97,017,154.32
Trading Co.,
Ltd.
Yunfu Hengtai
Trading Co., 30,201,144.01 190.68 30,201,334.69
Ltd.
C&S (Yunfu)
658,596,481.82 142,988.49 658,739,470.31
Paper Co., Ltd.
C&S
(Zhongshan) 12,683,100.00 12,683,100.00
Paper Co., Ltd.
Sun Daily
200,000.00 200,000.00
Necessities Co.,
256
C&S Paper Co., Ltd. 2022 Annual Report
Ltd.
C&S (Sichuan)
176,473,327.30 717,634.99 177,190,962.29
Paper Co., Ltd.
C&S (Dazhou)
6,000,000.00 55,000,000.00 61,000,000.00
Paper Co., Ltd.
C&S (Hubei)
197,476,637.16 296,965.95 197,773,603.11
Paper Co., Ltd.
Zhejiang
Zhongshun 58,065,272.53 258,948.19 58,324,220.72
Paper Co., Ltd.
C&S (Jiangsu)
5,796,828.33 500,000.00 5,290.08 6,302,118.41
Paper Co., Ltd.
Zhong Shun
International 881,263.57 19,299.96 900,563.53
Co., Ltd.
Dolemi Sanitary
Products Co., 869.50 190.68 1,060.18
Ltd.
Chengdu
Zhongshun 670,057.03 8,258.19 678,315.22
Paper Co., Ltd.
Xiaogan C&S
Trading Co., 320,405.66 1,743.96 322,149.62
Ltd.
Hangzhou Jie
Rou Trading 126,440.02 4,359.96 130,799.98
Co., Ltd.
Shanghai
Huicong Paper 8,099.98 476.64 8,576.62
Co., Ltd.
Beijing
Bloomage
Jierou 2,040,000.00 2,040,000.00
Biotechnology
Co., Ltd.
Guangdong
Huashun
Material 5,100,000.00 5,100,000.00
Technology Co.,
Ltd
257
C&S Paper Co., Ltd. 2022 Annual Report
Total 1,945,421,378.56 60,600,000.00 1,871,991.53 2,007,893,370.09
(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 935,114,325.64 807,221,501.75 1,054,822,665.07 875,587,399.73
Other businesses 1,283,368,251.29 1,207,772,988.81 1,328,294,351.23 1,240,959,177.22
Total 2,218,482,576.93 2,014,994,490.56 2,383,117,016.30 2,116,546,576.95
Information related to income:
Unit: RMB
Contract classification Branch 1 Branch 2 Total
By product type 2,218,482,576.93 2,218,482,576.93
Including:
Household paper 928,983,044.77 928,983,044.77
Personal care 6,131,280.87 6,131,280.87
Others 1,283,368,251.29 1,283,368,251.29
By operating region 2,218,482,576.93 2,218,482,576.93
Including:
Domestic 2,218,482,576.93 2,218,482,576.93
Abroad
By sales channel 2,218,482,576.93 2,218,482,576.93
Including:
Traditional 698,838,152.46 698,838,152.46
Non-traditional 236,276,173.18 236,276,173.18
Others 1,283,368,251.29 1,283,368,251.29
Total 2,218,482,576.93 2,218,482,576.93
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 RMB4,907,456.10, of which the income of
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C&S Paper Co., Ltd. 2022 Annual Report
RMB4,907,456.10 is expected to be confirmed as income in the year of 2023.
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 491,775,000.00 482,375,000.00
method
Investment income from disposal of trading
-834,500.00
financial assets
Others 138,946.35 329,072.79
Total 491,079,446.35 482,704,072.79
6. Others: None
XVIII. Supplementary Information
1.List of non-recurring profits and losses of the reporting period
√ Applicable □ Not applicable
Unit: RMB
Item Amount Description
Profits/losses from the disposal of non-current asset -1,725,714.34
Governmental grants reckoned into current profits/losses (not including grants enjoyed in quota or ration
25,847,850.99
according to national standards, which are closely relevant to the company’s normal business)
Profits/losses from assets entrusted to others for investment or management 191,076.23
Except for effective hedging business related to the normal operation of the company, fair value gains
and losses arising from holding trading financial assets and trading financial liabilities, as well as
-1,039,651.53
investment income obtained from disposal of trading financial assets, trading financial liabilities, and
available for sale financial assets
Other non-operating income and expenses except for the aforementioned items 12,921,558.41
Less: Influence of income tax 6,638,857.29
Total 29,556,262.47 --
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
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C&S Paper Co., Ltd. 2022 Annual Report
items during the reporting period
□ Applicable √ Not applicable
2. Return on net assets and earnings per share
Earnings per share
Weighted average
Profit in the reporting period Basic earnings per share Diluted earnings per
return on net assets
(RMB/share) share (RMB/share)
Net profit attributable to the ordinary shareholders of the
6.94% 0.27 0.27
Company
Net profit attributable to the ordinary shareholders of the
6.35% 0.24 0.24
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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