Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
FOSHAN HUAXIN PACKAGING CO., LTD.
INTERIM REPORT 2018
2018-051
August 2018
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Part I Important Notes, Table of Contents and Definitions
The Board of Directors (or the “Board”), the Supervisory Committee as well as the directors,
supervisors and senior management of Foshan Huaxin Packaging Co., Ltd. (hereinafter
referred to as the “Company”) hereby guarantee the factuality, accuracy and completeness of
the contents of this Report and its summary, and shall be jointly and severally liable for any
misrepresentations, misleading statements or material omissions therein.
Ren Xiaoping, the Company’s legal representative, Ding Guoqiang, the Company’s Chief
Financial Officer, and Wen Yan, the Company’s Financial Manager hereby guarantee that the
Financial Statements carried in this Report are factual, accurate and complete.
All the Company’s directors have attended the Board meeting for the review of this Report
and its summary.
Any plans for the future and other forward-looking statements mentioned in this Report and
its summary shall NOT be considered as absolute promises of the Company to investors.
Therefore, investors are reminded to exercise caution when making investment decisions.
The Company has no interim dividend plan, either in the form of cash or stock.
This Report and its summary have been prepared in both Chinese and English. Should there
be any discrepancies or misunderstandings between the two versions, the Chinese versions
shall prevail.
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Table of Contents
Interim Report 2018 .......................................................................................................................... 1
Part I Important Notes, Table of Contents and Definitions ........................................................... 2
Part II Corporate Information and Key Financial Information ................................................... 5
Part III Business Summary ............................................................................................................... 8
Part IV Operating Performance Discussion and Analysis ........................................................... 13
Part V Significant Events ................................................................................................................ 21
Part VI Share Changes and Shareholder Information ................................................................. 41
Part VII Preferred Shares ............................................................................................................... 46
Part VIII Directors, Supervisors and Senior Management.......................................................... 47
Part IX Corporate Bonds ................................................................................................................ 48
Part X Financial Report .................................................................................................................. 49
Part XI Documents Available for Reference ................................................................................ 182
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Definitions
Term Definition
Foshan Huaxin Packaging Co., Ltd. and its consolidated subsidiaries, except
The “Company”, “FSHXP” or “we”
where the context otherwise requires
China Paper China Paper Corporation (the actual controller of the Company)
China Chengtong China Chengtong Holdings Group Ltd. (the ultimate controller of the Company)
Huaxin Development Foshan Huaxin Development Co., Ltd. (the Company’s controlling shareholder)
Hongta Renheng Zhuhai Hongta Renheng Packaging Co., Ltd.
Zhuhai Huafeng Zhuhai Huafeng Paper Co., Ltd.
Golden Pheasant Chemical Zhuhai Golden Pheasant Chemical Co., Ltd.
Huaxin Color Printing Huaxin (Foshan) Color Printing Co., Ltd.
Kunshan Focai Kunshan Focai Packaging & Printing Co., Ltd.
Zhejiang Hongta Zhejiang Hongta Renheng Packaging Technology Co., Ltd.
Chengtong Finance China Chengtong Finance Corporation Ltd.
The “Reporting Period” or “Current Period” The period from 1 January 2018 to 30 June 2018
Expressed in the Chinese currency of Renminbi, expressed in ten thousand
RMB, RMB’0,000
Renminbi
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Part II Corporate Information and Key Financial Information
I Corporate Information
Stock name Huaxin Packaging-B Stock code 200986
Stock exchange for stock
Shenzhen Stock Exchange
listing
Company name in Chinese 佛山华新包装股份有限公司
Abbr. (if any) 华新包装
Company name in English (if
Foshan Huaxin Packaging Co., Ltd.
any)
Abbr. (if any) FSHXP
Legal representative Ren Xiaoping
II Contact Information
Board Secretary Securities Representative
Name Ding Guoqiang Shi Hui
2/F, Block 7, 3 Keyang Road, Luoge Park, 2/F, Block 7, 3 Keyang Road, Luoge Park,
Chancheng Economic Development Zone, Chancheng Economic Development Zone,
Address
Nanzhuang Town, Chancheng District, Nanzhuang Town, Chancheng District,
Foshan, Guangdong Province, P.R.China Foshan, Guangdong Province, P.R.China
Tel. 0756-8666976 0756-8666978
Fax 0756-8666922 0756-8666922
Email address dinggq@htrh-paper.com shih@htrh-paper.com
III Other Information
1. Contact Information of the Company
Indicate by tick mark whether any change occurred to the registered address, office address and their zip codes, website address and
email address of the Company in the Reporting Period.
□ Applicable √ Not applicable
No change occurred to the said information in the Reporting Period, which can be found in the 2017 Annual Report.
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
2. Media for Information Disclosure and Place where this Report is Kept
Indicate by tick mark whether any change occurred to the information disclosure media and the place for keeping the Company’s
periodic reports in the Reporting Period.
□ Applicable √ Not applicable
The newspapers designated by the Company for information disclosure, the website designated by the CSRC for disclosing the
Company’s periodic reports and the place for keeping such reports did not change in the Reporting Period. The said information can
be found in the 2017 Annual Report.
IV Key Financial Information
Indicate by tick mark whether there is any retrospectively restated datum in the table below.
□ Yes √ No
H1 2018 H1 2017 Change (%)
Operating revenue (RMB) 1,747,156,340.92 1,567,199,202.22 11.48%
Net profit attributable to the listed
-15,299,762.79 12,487,648.99 -222.52%
company’s shareholders (RMB)
Net profit attributable to the listed
company’s shareholders before exceptional -19,203,743.87 10,079,841.69 -290.52%
items (RMB)
Net cash generated from/used in operating
68,792,986.11 -607,133,297.57 111.33%
activities (RMB)
Basic earnings per share (RMB/share) -0.0303 0.0247 -222.67%
Diluted earnings per share (RMB/share) -0.0303 0.0247 -222.67%
Weighted average return on equity (%) -0.78% 0.63% -1.41%
30 June 2018 31 December 2017 Change (%)
Total assets (RMB) 5,545,611,825.09 5,426,368,352.69 2.20%
Equity attributable to the listed company’s
1,945,505,839.28 1,982,859,436.21 -1.88%
shareholders (RMB)
V Accounting Data Differences under China’s Accounting Standards for Business Enterprises
(CAS) and International Financial Reporting Standards (IFRS) and Foreign Accounting
Standards
1. Net Profit and Equity Differences under CAS and IFRS
□ Applicable √ Not applicable
No such differences for the Reporting Period.
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
2. Net Profit and Equity Differences under CAS and Foreign Accounting Standards
□ Applicable √ Not applicable
No such differences for the Reporting Period.
XI Exceptional Gains and Losses
√ Applicable □ Not applicable
Unit: RMB
Item Reporting Period Note
Gain or loss on disposal of non-current assets (inclusive of
68,414.74
impairment allowance write-offs)
Government subsidies charged to current profit or loss (exclusive
of government subsidies given in the Company’s ordinary course
9,069,363.42
of business at fixed quotas or amounts as per government’s
uniform standards)
Gain or loss on fair-value changes in trading financial assets and
liabilities & investment income from disposal of trading financial
assets and liabilities and available-for-sale financial assets 1,340,892.01
(exclusive of effective portion of hedges that arise in the
Company’s ordinary course of business)
Non-operating income and expense other than above 670,467.95
Less: Income tax effects 1,669,464.19
Non-controlling interests effects (net of tax) 5,575,692.85
Total 3,903,981.08 --
Explanation of why the Company classifies a gain/loss item as exceptional according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Exceptional Gain/Loss
Items, or reclassifies any exceptional item listed in the said explanatory announcement as recurrent:
□ Applicable √ Not applicable
No such cases for the Reporting Period.
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Part III Business Summary
I Core Business Scope of the Company in Reporting Period
Is the Company subject to any disclosure requirements for special industries?
No.
The Company specializes in the R&D, production and sales of high-end coated ivory board, chemicals for paper making and color
printing products. The businesses are described as follows:
(I) High-end coated ivory board
The ivory board is a product of the Company’s main business, as a category of ivory board, is widely applied in various fields such as
cigarette packaging, food packaging, medicine packaging, cosmetic packaging and living supplies packaging, which is an important
source of the Company's major business income. The R&D, production and sales of the ivory board is mainly undertaken by Zhuhai
HongtaRenheng Packaging Co., Ltd. and Zhuhai Huafeng Paper Co., Ltd. HongtaRenheng is the core high-end packaging board
platform under Huaxin Packaging which is based in domestic and overseas high-end packaging markets of cigarette and food and
provides "personalized" products and services for customers with "differentiation" business strategy. The Company now has three
coated ivory board production lines, and the annual production capacity around 600,000 tons. The Company's products can be
divided into the following categories:
1. Coated ivory board for cigarette packaging of company’s dominant product, is widely used in the high-end cigarette packaging
market. The coated ivory board for cigarette packaging produced by HongtaRenheng takes up a dominant position in the domestic
cigarette packaging field. It represents the highest level of coated ivory board quality in China. It has won a Golden Award at China’s
International Paper & Paper Product Brands Exhibition, and the top award of the Chinese science and technology community—the
first-class State Science and Technology Advancement Award. The anti-counterfeit coated ivory board with color fiber and
true-color fiber etc.—a technology that is independently developed by the Company and has been granted the national invention
patent of China—has been successfully applied in the packaging of a series of cigarettes in the “Hongta Group” and
“HongyunHonghe Group" brands to combat counterfeiting from the packaging materials, reaching the significant anti-counterfeit
results of “easily identifiable but difficult to copy”. Currently, a new type of ivory board for cigarette packaging is being tested for
quality.
2. The ivory boards for liquid food packaging is an important development direction of the Company. HongtaRenheng is the first to
break the foreign technological monopoly, by independently developing the sterile paper for packaging of liquid milk, fruit juice,
herbal tea and other drinks, effectively substituting imported products. The series of food packaging products such as anti-oil food
grade coated board and high-end paper cup have been recognized by well-known catering groups such as McDonald’s after they are
put into the market.
3. The high-end commercial ivory board papers aim to meet the personalized demands of customers. They are widely applied in the
segmented packaging market fields like the high-end medicine, cosmetics, and daily necessities. The anti-counterfeit coated ivory
paper with personalized identification code independently developed by the Company and for which it has been granted the invention
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
patent has been successfully applied in the anti-counterfeit packaging of the high-end products like high-end medicine and cosmetics,
which does not only solve the difficulties posed by impact from counterfeit and shoddy products for customers at the source, but also
effectively reduces the customer’s anti-counterfeit costs and fake product crackdown expanses and win high trust from the market.
(II) Paper making business
Chemicals for paper making is business to extend the paper-making industry chain by the Company, the R&D, production and sales
of which are mainly undertaken by Zhuhai Jinji Chemical Co., Ltd., a subsidiary of the Company, which mainly supplies the
carboxylic butadiene-styrene latex, styrene-acrylic latex and calcium carbonate of domestically first-class quality.
(III) Color printing business
Color printing business is an important industrial linkage supporting business of the Company, which covers designing and
manufacturing packaging materials and providing packaging solutions for customers. This business is mainly undertaken by Huaxin
(Foshan) Color Printing Co., Ltd.. The Company now owns the offset, flexo and intaglio printing workshop. Main products include
color boxes, various labels (paper label, in-mold label and sticker), barcode printing, brochure, books and periodicals involved in
wide terminal consumption industry.
II Material Changes in Major Assets
1. Material Changes in Major Assets
Major assets Main reason for material changes
Equity assets No material change
Fixed assets No material change
Intangible assets No material change
Construction in progress No material change
2. Major Assets Overseas
□ Applicable √ Not applicable
III Core Competitiveness Analysis
Is the Company subject to any disclosure requirements for special industries?
No.
(I) Central government-owned enterprise background
The ultimate controller of the Company, China Chengtong Holdings Group Ltd. (China Chengtong), authorized by the State-owned
Assets Supervision and Administration Commission of the State Council to perform relevant duties of the investor on behalf of the
State Council, is listed among the first batch of pilot enterprises by the State-owned Assets Supervision and Administration
Commission to construct the standard board of directors and the first pilot state-owned asset management Company. In 2016, China
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Chengtong was approved to be the pilot state-owned capital operation Company, and its main business includes equity operation,
financial services, asset management, integrated logistics services, production materials trading, forestry-pulp paper production
development and utilization etc.. It is also the only large-scale central enterprise approved by the State-owned Assets Supervision and
Administration Commission of the State Council to focus on production, development and utilization of forestry, wood pulp and
paper.
As a pilot enterprise of the state-owned asset management companies, China Chengtong has built a platform for the state-owned
assets restructuring and capital operation in accordance with prevailing market principles, explored the central enterprise’s non-main
business and a special path for the NPA’s market-oriented specialized operations and disposal, and reorganized and integrated a
number of subsidiaries subordinated to central enterprises by means of trusteeship and the transfer of state-owned property rights.
In 2016, China Chengtong was entrusted by the State-owned Assets Supervision and Administration Commission of the State
Council to participate in the diversification reform of Sinopec International Petroleum Exploration and Production Corporation,
managed China Railway Materials Co., Ltd. in the form of trusteeship, and invested Guoyuan Coal Asset Management Co., Ltd.. As
approved by the State Council and entrusted by the State-owned Assets Supervision and Administration Commission, China
Chengtong, as the main sponsor, cooperated with nine central enterprises, local state-owned enterprises and financial institutions to
jointly set up the largest domestic private equity investment fund with a total investment of RMB 350 billion Yuan -- The China
State-Owned Enterprise Restructuring Fund. Meanwhile, Chengtong Fund Management Co., Ltd. was also established to take
responsibility for the implementation of relevant fund management affairs.
China Chengtong is aiming at improving the state-owned capital’s operation efficiency, serving the national strategy, abiding by the
law of the market, and building a state-owned capital operation platform featuring the market-oriented operation and professional
management. In addition, it will promote the rational flow and optimized of the state-owned capital and optimizing the configuration
through equity operation, value management, and flexible transfer etc.. so as to form an institutional mechanism and operational
model that meet various functional requirements for corresponding state-owned capital operation.
(II) Technological innovation advantage
The Company persists in taking "scientific and technological innovation" as the core power that drives enterprise development. The
Company has nearly 20 years of technical experience in the production of high-end coated ivory board. Over the years, the Company
has developed anti-counterfeit products such as the coated ivory board with color fiber and true-color fiber and formed strong
anti-counterfeit product innovation capability. Meanwhile, the Company has personalized product technique innovation capability
and has developed the "anti-counterfeit coated ivory paper with personalized identification code" which can attain anti-counterfeiting
according to the customer's personalized demand and solve the difficulties posed by impact from counterfeit and shoddy products for
customers at the source. Additionally, the Company is developing quite a few individualized products with new functions, which
would help solidify and expand its technological superiority in subsectors.
In recent years, the company has made unremitting effort to promote the subordinate’s R&D system construction:
1. HongtaRenheng successfully passed the recognition for "National High-tech Enterprise" in 2015 with the certificate No.
GR201544000238. It has established a technology R&D center equipped with completed devices, and been attested by Provincial
Technology Center, Engineering R&D Center and Guangdong Provincial Innovation Pilot Enterprise; in 2016, the "Nature Color
Packaging Paper Project" of HongtaRenheng won second-class Science and Technology Advancement Award issued by China
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
National Light Industry Council. Meanwhile, the company also participated in formulating corresponding national and industrial
standards including Coated Paper and Board-Coated Ivory Board and Quality Requirements and Test Methods for Intaglio Printed
Matter.
2. In 2016, the subsidiary Zhuhai Huafeng Paper Co., Ltd. successfully passed the recognition for "National High-tech Enterprise"
with the certificate No. GR201644001293. Zhuhai Huafeng passed the recognition of Guangdong Zhuhai Huafeng Paper Engineering
Technology Research Center for Guangdong Provincial Department of Science and Technology.
3. The subsidiary Zhuhai Golden Pheasant Chemical Co., Ltd. passed the review for "National High-tech Enterprise" in 2016 with
the certificate No. GR201644004219. It has also passed the verification by the Zhuhai Engineering Center, the Zhuhai Enterprise
Technology Center and the Emulsion Polymer for Paper Making Engineering Technology Research Center under the Department of
Science and Technology of Guangdong Province.
All the Company’s main subsidiaries have been recognized as "National High-tech Enterprise" and were granted the 10% relief from
income tax in three successive years.
By means of continuous research and development, the Company has obtained various patents, providing the most important
technical support and guarantee for the advancement of product competitiveness. As of the end of the Reporting Period, the
Company had been granted 43 duly authorized patents, including 23 invention patents and 20 utility models. There are 9 pending
patents, including 8 innovation patents and 1 utility model.
(III) Quality brand advantage
HongtaRenheng has the top award of the Chinese science and technology community—the first-class State Science and Technology
Advancement Award. The high-end coated ivory board produced by HongtaRenheng has excellent printing performance. Dominant
product—coated ivory board for tobacco packaging, is widely used in the high-end tobacco packaging market, takes up a dominant
position in high-end tobacco packaging field.
"Hongta" coated ivory board takes up a leading position in domestic and overseas ivory board industry and leads the development of
production and technology of domestic middle and top grade coated ivory board. "Hongta" coated ivory board represents the highest
level of production, technology and product of coated ivory board in China and has becomes a world-famous brand.
(IV) Management advantage
“The fittest survives. That’s why we must be open-minded and innovative for survival and development.” is the Company’s
management philosophy. Upon more than two decades of accumulation, the Company has possessed a large pool of high-quality
talent in technological innovation and management. In recent years, the Company has sought help from a third-party professional
consulting agency to help implement lean production and management across the Company, refreshing its employees’ thinking and
awareness at work, fostering a lean thinking among them and stimulating their enthusiasm at work. Decreasing cost and increasing
efficiency by means of lean production and management, the Company has formulated its own unique corporate culture characteristic
of lean management, which is well accepted by its key personnel.
(V) Superiority in environment protection
Hongta Renheng’s boilers are using biomass molding fuel (BMF). Its emission reduction through BMF program is China’s biggest
biomass boiler program. BMF, a clean energy which releases zero harmful emissions to the environment, is used for 70% of Hongta
Renheng’s energy consumption, which can help bring a nearly 70% reduction in carbon emission during the papermaking process, as
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
well as a reduction of 60,000~100,000 tons of carbon dioxide emission every year. BMF has helped create remarkable superiority in
emission reduction and environment protection.
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Part IV Operating Performance Discussion and Analysis
I Overview
(I) Operating Results of Reporting Period
In the first half of 2018, according to the management direction of “Improve Efficiency through Reform and Increase Earnings
through Cost Reduction”, the Company made great efforts to “Reduce Inventories, Receivables and Expenditure, Improve Efficiency
and Control Costs”. It firmly pushed forward reform on its operational structure to break down barriers inside the Company and
improve its operational efficiency. Meanwhile, it has rebuilt its marketing system towards value creation through bold reforms. In
addition, it spent great effort on reforming its R&D department to strengthen the driving force of technology for the Company’s
continuous growth. However, high price levels of wood pulp and other materials across the globe, as well as the depreciation of the
Chinese yuan caused great pressure on the Company’s cost control.
For the Reporting Period, the Company recorded operating revenue of RMB1,747.1563 million, profit before taxation of
RMB-29.9999 million and net profit attributable to the listed company’s shareholders of RMB-15.2998 million. As at the end of the
Reporting Period, the Company’s total assets stood at RMB5,545.6118 million, with a gearing ratio of 36.03%.
(II) Management Measures during the Reporting Period
1. Implemented the reform of organizational structure and optimized the internal assessment mechanism
In the first half of the year, the Company carried out its organizational restructuring with the goal of “layer reduction, functional
conclusion, and management flattening”, improved the efficiency of the Company’s operation and management, and adjusted the
internal assessment system to improve the work enthusiasm of all employees.
2. Conducted the marketing mechanism reform to stimulate the potential
In accordance with the overall reform thought of New Era and New Marketing, the Company carried out a comprehensive reform of
the marketing system, optimized and highlighted the core function of marketing. The management mode was changed from the
product-based horizontal cross-regional management to the regional-oriented management with the product line playing its
supporting role.
The marketing appraisal system was also optimized and reformed, and a new performance appraisal mechanism was implemented to
stimulate the development of new orders. At the same time, the Company established the marketing mechanism to implement the
lowliest place elimination, reward the diligent and punish the lazy and carry out the flexible promotion system.
3. Finished product logistics business was outsourced to save the logistics fees
In the first half of the year, the Company focused on “Four New” concept -- New Reform Measures, New Management Methods,
New Management Thoughts, and New Activation Mechanism and actively reduced inventories, receivables and expenditure,
improved efficiency and controlled costs. Meanwhile, the finished goods logistics business was also outsourced, which largely
reduced the (per ton) cost of the Company’s paper in the first half of the year.
4. Enhanced the technology’s leading role and improved the performance of R&D
The Company reorganized the organizational structure of the technology center, independently operated the new product R&D
functions and the daily process maintenance functions, and highlighted various core functions of the technology research and
development. At present, more than ten kinds of new products are being researched, and breakthrough has been made in some
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
products.
(III) Management methods for the second half of the year
In the second half of the year, the Company will still focus on reducing inventories, receivables and expenditure, improving
efficiency and controlling costs, proceed from stimulating the potential, improving the data effectiveness and further determining the
subject of responsibility, and vigorously promote PMO in order to internally improve the efficiency and reduce costs, and externally
expand the market (core task) and continuously enhance the management level.
II Analysis of Core Businesses
See “I Overview” above.
Year-on-year changes in key financial data:
Unit: RMB
H1 2018 H1 2017 Change (%) Main reason for change
Operating revenue 1,747,156,340.92 1,567,199,202.22 11.48%
Cost of sales 1,595,138,938.68 1,376,216,644.41 15.91%
Selling expense 69,997,755.68 76,796,056.93 -8.85%
Administrative expense 67,088,679.11 61,449,510.47 9.18%
Finance costs 45,936,448.74 49,469,701.26 -7.14%
Payment of the income
Income tax expense 2,962,396.75 96,393.17 2,973.24%
tax of last year
R&D expense 63,850,496.63 62,687,970.00 1.85%
Net cash generated A rise in unit sales and
from/used in operating 68,792,986.11 -607,133,297.57 111.33% the control over
activities large-amount payments
Net cash generated
A decline in fixed assets
from/used in investing 6,390,378.93 -14,224,303.05 144.93%
acquired and built
activities
Net cash generated
A rise in bank loan
from/used in financing -135,386,780.90 555,386,894.24 -124.38%
repayments
activities
Net increase in cash and
-59,877,113.04 -69,013,755.32 -35.16% Debt restructuring
cash equivalents
Material changes to the profit structure or sources of the Company in the Reporting Period:
√ Applicable □ Not applicable
1. The product cost went up as a result of the continuously, sharply increasing prices of wood pulp and other raw materials used to
produce the Company’s main product, ivory board, as well as driven by exchange rate fluctuations.
2. The Company’s stake in Chengtong Finance has decreased from 20% to 10% upon an increase of capital by the Company in this
joint venture in 2017. The Company no longer has control, joint control or significant influence on the joint venture. Therefore, the
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
measurement of the investment in this joint stock company has been changed from the equity method to the cost method, causing a
considerable decline in the Company’s investment income.
Breakdown of core businesses:
Unit: RMB
YoY change in YoY change in
Operating Gross profit YoY change in
Cost of sales operating revenue gross profit
revenue margin cost of sales (%)
(%) margin (%)
By industry
Manufacturing 1,646,488,580.95 1,500,276,960.43 8.88% 8.10% 11.93% -3.12%
Other 100,667,759.97 94,861,978.25 5.77% 128.34% 164.72% -12.95%
By product category
Ivory board 1,308,708,118.61 1,225,762,793.54 6.34% 10.42% 16.30% -4.73%
Presswork 156,301,420.46 129,875,341.39 16.91% 23.17% 19.51% 2.55%
Chemicals 181,479,041.88 144,638,825.50 20.30% -13.99% -18.61% 4.53%
Other 100,667,759.97 94,861,978.25 5.77% 128.34% 164.72% -12.95%
By operating segment
Domestic 1,494,469,432.88 1,344,249,995.85 10.05% 10.89% 15.21% -3.37%
Overseas 252,686,908.04 250,888,942.83 0.71% 15.11% 19.79% -3.88%
III Analysis of Non-Core Businesses
√ Applicable □ Not applicable
Unit: RMB
Amount As % of total profit Source/Reason Exceptional or recurrent
Income from long-term
equity investments
Investment income -88,375.92 0.29% Exceptional
(associates) measured at the
equity method
Gain/loss on
Fair value changes of
changes in fair 1,340,892.01 -4.47% Exceptional
financial liabilities
value
Accounts receivable
Asset impairments -59,432.48 0.20% Exceptional
impairments
Non-operating Income from disposal of
1,600,770.29 -5.34% Exceptional
income current assets
Non-operating Loss on disposal of current
930,302.34 -3.10% Exceptional
expense assets, penalty expenses, etc.
Asset disposal 68,414.74 -0.23% Disposal of non-current Exceptional
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
income assets
Other income 9,069,363.42 -30.23% Government subsidies Exceptional
IV Analysis of Assets and Liabilities
1. Material Changes in Asset Composition
Unit: RMB
30 June 2018 30 June 2017 Change in
As % of total As % of total percentag Reason for material change
Amount Amount
assets assets e (%)
354,612,863.2
Monetary assets 6.39% 593,999,728.55 9.00% -2.61%
2
Accounts 743,129,178.1
13.40% 785,619,763.27 11.90% 1.50%
receivable 7
741,788,752.2
Inventories 13.38% 652,899,367.52 9.89% 3.49%
6
Investment
31,754,646.67 0.57% 24,256,034.09 0.37% 0.20%
property
Long-term equity
8,205,989.25 0.15% 255,989,913.74 3.88% -3.73%
investments
2,232,204,184. 2,378,310,238.
Fixed assets 40.25% 36.03% 4.22%
15 10
Construction in
49,481,227.93 0.89% 32,414,568.09 0.49% 0.40%
progress
Short-term 776,773,275.1 1,238,404,630.
14.01% 18.76% -4.75%
borrowings 6 23
Long-term 300,000,000.0
5.41% 200,000,000.00 3.03% 2.38%
borrowings 0
2. Assets and Liabilities at Fair Value
√ Applicable □ Not applicable
Unit: RMB
Gain/loss on Cumulative
Impairment
fair-value fair-value Purchased in Sold in
Beginning allowance for
Item changes in changes Reporting Reporting Ending amount
amount Reporting
Reporting charged to Period Period
Period
Period equity
Financial assets
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
3.
Available-for-s
627,643,841.04 627,643,841.04
ale financial
assets
Subtotal of
627,643,841.04 627,643,841.04
financial assets
Total of above 627,643,841.04 627,643,841.04
Financial
2,394,879.25 -1,340,892.01 1,053,987.24
liabilities
Material changes in the measurement attributes of the major assets in the Reporting Period:
□ Yes √ No
3. Restricted Asset Rights as at Period-End
Such restricted monetary assets stood at RMB160.24 million, which were mostly term deposits and security deposits used as
collaterals.
V Investments Made
1. Total Investment Amount
□ Applicable √ Not applicable
2. Significant Equity Investments Made in Reporting Period
□ Applicable √ Not applicable
3. Significant Non-Equity Investments Ongoing in Reporting Period
□ Applicable √ Not applicable
4. Financial Investments
(1) Securities Investments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Investments in Derivative Financial Instruments
□ Applicable √ Not applicable
No such cases in the Reporting Period.
17
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
VI Sale of Major Assets and Equity Interests
1. Sale of Major Assets
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Sale of Major Equity Interests
□ Applicable √ Not applicable
VII Main Controlled and Joint Stock Companies
√ Applicable □ Not applicable
Main subsidiaries and joint stock companies with an over 10% influence on the Company’s net profit
Unit: RMB
Relationship Main
Company business Registered Operating Operating
with the Total assets Net assets Net profit
name scope capital revenues profit
Company
White
Zhuhai cardboard,
Hongta original
Renheng paper of
600,000,000. 4,577,331,01 2,737,664,58 1,598,489,61 -34,515,40
Packaging Subsidiary liquid food -43,685,997.59
00 9.33 2.56 3.06 4.72
Co., Ltd. packaging,
(consolidated latex and
) calcium
carbonate
Zhuhai White
Hongta cardboard,
Renheng original 600,000,000. 3,916,575,94 2,660,603,68 1,032,695,11 -23,811,38
Subsidiary -24,370,210.18
Packaging paper of 00 1.03 4.42 3.68 2.36
Co., Ltd. liquid food
(alone) packaging
White
Zhuhai cardboard,
Huafeng original 984,559,331. 2,431,123,26 1,036,074,31 979,805,486. -14,842,21
Subsidiary -13,835,165.27
Paper Co., paper of 06 1.30 6.39 29 4.09
Ltd. liquid food
packaging
Zhuhai latex and 69,271,940.0 302,421,509. 163,274,782. 237,405,627. 17,623,199
Subsidiary 15,694,874.21
Golden calcium 0 63 48 99 .72
18
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Pheasant carbonate
Chemical
Co., Ltd.
Huaxin
Color
(Foshan)
packaging 96,895,605.1 410,121,165. 219,339,419. 160,091,575. 5,541,340.
Color Subsidiary 4,710,139.80
and label 4 00 08 95 94
Printing Co.,
printing
Ltd.
Subsidiaries obtained or disposed in this Reporting Period
□ Applicable √ Not applicable
Influence on overall production and
Company Name Method
management and performance
The business of the Company was
gradually integrated into Huaxin (Foshan)
Kunshan Focai Packaging & Printing Co., Color Printing Co., Ltd, so the cancellation
Cancelled
Ltd. of the Company didn’t have an impact on
whole business development and
performance.
Information about the main controlled and joint stock companies
Majority-owned subsidiary Hongta Renheng: due to the influences of increased purchasing price of raw material, the net profit
decreased by RMB35.14 million compared with the year earlier. The Company has taken various reform measures of operation and
management to strive to complete annual budget goal.
VIII Structured Bodies Controlled by the Company
□ Applicable √ Not applicable
IX Performance Forecast for January-September 2018
Warning of possible loss or considerable YoY change in the accumulative net profit made during the period-beginning to the end of
the next reporting period, as well as the reasons:
□ Applicable √ Not applicable
X Risks Facing the Company and Countermeasures
1. Market risk
High-end coated ivory board is the dominant product of the Company. However, affected by the concentrated release of the new
production capacity for various ivory boards in China in the past two years, the domestic demands didn’t increase greatly. The more
fierce market competition of the ivory boards in China has brought a great impact on the market of the Company’s products.
Countermeasure: intensify product structure adjustment, and strengthen the efforts in developing new products and expanding new
market.
19
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
2. Raw material price and exchange rate fluctuation risk
Main raw material used by the Company is paper pulp is mainly imported from abroad. Due to the increased price of international
paper pulp during the Reporting Period, and the large fluctuation of exchange rate of RMB against USD, the costs control of the
Company is under great pressure.
Countermeasure: keep a close watch on the paper pulp price change trend and RMB exchange rate tendency, gradually purchase
more paper pulp at home, and meanwhile, strategically purchase paper pulp as reserves when necessary, in order to effectively
control the cost.
3. Safety and Environmental Protection Risk
The company is specialized in manufacturing with large mechanical equipment. Due to complicated production and manufacturing
environment, safety production and environmental requirements become much more stringent.
Countermeasures: strengthen the recognition and management of safety and environmental protection hazards; improve the
management of production & manufacturing machines and pollution discharge equipment/facilities; clearly define personnel
responsibilities of front-line production workers; enhance the supervision and inspection of safety operation on the production site;
reinforce corresponding publicity and education and create possible safety production atmosphere; consolidate job responsibilities for
staffs in environmental protection department; strictly implement environmental protection and emission standards; eliminate
possible risks of safety and environmental protection accidents.
20
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Part V Significant Events
I Annual and Extraordinary General Meeting Convened during the Reporting Period
1. General Meeting Convened during the Reporting Period
Investor Index to disclosed
Meeting Type Convened date Disclosure date
participation ratio information
http://www.cninfo.co
m.cn/cninfo-new/dis
The 1st Extraordinary
Extraordinary closure/szse_main/b
General Meeting of 66.05% 31 January 2018 1 February 2018
General Meeting ulletin_detail/true/12
2018
04379512?announce
Time=2018-02-01
http://www.cninfo.co
m.cn/cninfo-new/dis
The 2017 Annual Annual General closure/szse_main/b
66.09% 17 April 2018 18 April 2018
General Meeting Meeting ulletin_detail/true/12
04646764?announce
Time=2018-04-18
http://www.cninfo.co
nd
The 2 m.cn/cninfo-new/dis
Extraordinary Extraordinary closure/szse_main/b
65.80% 11 May 2018 12 May 2018
General Meeting of General Meeting ulletin_detail/true/12
2018 04933120?announce
Time=2018-05-12
2. Extraordinary General Meeting Convened at Request of Preference Shareholders with Resumed Voting
Rights
□ Applicable √ Not applicable
II Interim Dividend Plan for the Reporting Period
□ Applicable √ Not applicable
The Company has no interim dividend plan.
21
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
III Commitments of the Company’s Actual Controller, Shareholders, Connected Parties and
Acquirer, as well as the Company and Other Commitment Makers, Fulfilled in the Reporting
Period or still Ongoing at Period-End
□ Applicable √ Not applicable
The Company has no interim dividend plan.
IV Engagement and Disengagement of CPAs Firm
Has the Interim financial report been audited?
□Yes √ No
This Interim Report is unaudited.
V Explanations Given by Board of Directors and Supervisory Committee Regarding
“Modified Auditor’s Report” Issued by CPAs Firm for the Reporting Period
□ Applicable √ Not applicable
VI Explanations Given by Board of Directors Regarding “Modified Auditor’s Report” Issued
for Last Year
□ Applicable √ Not applicable
VII Bankruptcy and Restructuring
□ Applicable √ Not applicable
No such cases in the Reporting Period.
VIII Legal Matters
Significant lawsuits or arbitrations:
√Applicable □ Not applicable
Situation of
Trial results and
Basic situation of Lawsuit Whether form Process of execution of
influences of Disclosure Disclosure
lawsuit amount into estimated lawsuit judgment of
lawsuit date index
(arbitration) (RMB’0,000) liabilities (arbitration) lawsuit
(arbitration)
(arbitration)
A major production Waiting for the
First
safety accident was 1,116 No hearing for first No judgment
instance
caused by a flash instance again
22
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
burn when Jiangsu
Tianxing
High-Altitude
Anti-Corrosion
Engineering Co.,
Ltd. (hereinafter
referred to as
"Jiangsu
Tianxing") and
Wuhan Kedio
Electric Power
Technology Co.,
Ltd. (hereinafter
referred to as
"Wuhan Kedio")
carried out the
maintenance of
120m chimney
anti-corrosion
project for Zhuhai
Huafeng, the
holding subsidiary
of the company, on
4 March 2017. Six
construction
workers of the
construction
company died in
the accident.
Zhuhai Huafeng
paid a total
compensation of
RMB11.16 million
to relatives of the
victims on 7 March
2017 for Jiangsu
Tianxing and
Wuhan Kedioin
accordance with
the requirements
and under the
supervision of the
government.
Zhuhai Huafeng
23
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
applied to Zhuhai
Jinwan District
People's Court for
property
preservation before
litigation on 14
March 2017.
Zhuhai Huafeng
applied to Zhuhai
Jinwan District
People's Court for
recovery action in
which Jiangsu
Tianxing and
Wuhan Kedio were
taken as joint
defendants on 16
March 2017. Then
Wuhan Kedio
applied to add
Yancheng Xinda
High-Altitude
Anti-Corrosion
Co., Ltd.
(hereinafter
referred to as
Yancheng Xinda)
as a defendant and
Yancheng Xinda
applied to add Liu
Jiechun as a
defendant. The
hearing was held
for first instance on
20 November
2017, where four
defendants offered
to stop hearing this
case, and the court
agreed to it. As of
the end of the
Reporting Period,
the criminal case of
the personnel
24
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
involved in the
above safety
accidents has been
decided, waiting
for the court to
inform the
follow-up court
proceedings.
Other legal matters:
□ Applicable √ Not applicable
IX Punishments and Rectifications
√Applicable □ Not applicable
Type of survey Conclusion (if Index of
Name Type Reasons Disclosure date
and punishment any) disclosure
11 January 2018,
Not Announcement
implementing on Blacklisting
effective safe of
production Majority-owned
coordination and Subsidiary into
the management, Administrative Joint
illegally department, like Punishments for
Zhuhai Huafeng
approving the Environment Dishonesty of
was fined by
high-place Protection, safety Safety
Zhuhai State
operation, Supervision, Production (No.
Administration of
Zhuhai Huafeng illegally handling Taxation, and etc, 2018-002);
Other Work Safety with 11 January 2018
Paper Co., Ltd. the work permits imposed severe disclosure
administrative
for the people to administrative website and
punishment. The
the factory to punishment, and index:
penalty was paid
implement the Stock Exchange http://www.cnin
on time.
project of publicly censured fo.com.cn/cninf
chimney it. o-new/disclosur
anticorrosion, e/szse_main/bull
responsible for etin_detail/true/
Zhuhai “34” 1204320576?an
production safety nounceTime=20
accident 18-01-11%2011:
48
Notes for rectifications:
√Applicable □ Not applicable
25
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Zhuhai Huafeng made comprehensive rectification to safety production management of the Company in the principle of accidents
“four does not let off”, and employed third-party safety assessment organization to conduct the potential risks identification and
status evaluation for the Company. Effective safe production coordination and the management were implemented with good results
for the rectification work. It also passed the inspection for rectification with serious potential risks by Zhuhai Safety Production
Supervision Authority who ordered to temporarily stop the production and the business. The Company seriously drew lessons from
the accident, comprehensively strengthening the safety management of the subsidiaries, taking resolute and forceful measures and
strengthening the foundation of safety production to prevent similar accidents from happening again.
X Credit Conditions of the Company as well as its Controlling Shareholder and Actual
Controller
√Applicable □ Not applicable
The majority-owned subsidiary of the Company, Zhuhai Huafeng Paper Co., Ltd, was included into the joint punishment blacklist for
dishonesty of safety production on 4 December 2017 with 1 year of joint Punishment, because a larger liability accident of safety
production happened in its factory on 4 March 2017. For details, see Announcement on the controlling subsidiary being included into
the joint punishment blacklist for dishonesty of safety production (No.
2018-002 http://www.cninfo.com.cn/cninfo-new/disclosure/szse_main/bulletin_detail/true/1204320576?announceTime=2018-01-11
%2011:48) disclosed by assigned information disclosure media on 11 January 2018.
XI Equity Incentive Plans, Employee Stock Ownership Plans or Other Incentive Measures for
Employees
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XII Significant Connected Transactions
1. Connected Transactions Relevant to Routine Operations
√Applicable □ Not applicable
Proporti
Obtaina
on in
Approve ble Index
Transact total
Connect Relation Content d Over market to
Type of Pricing ion amounts Mode of
ed with the s of Transact transacti approve price for Disclosu disclos
transacti principl amount of settleme
transacti Compan transacti ion price on line d line or transacti re date ed
on e (RMB’0 transacti nt
on party y on (RMB’0 not on of inform
,000) ons of
,000) the same ation
same
kind
kind
China Routine Purchasi Being http://
Actual 17
Paper connect ng raw decided Market 21,409.4 114,236. www.c
controll 13.83% No Transfer N/A March
Corpora ed material through value 7 03 ninfo.c
er 2018
tion transacti s negotiati om.cn/
26
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
on on based cninfo
on the -new/d
market isclosu
value re/szse
_main/
bulleti
n_deta
il/true/
12044
86654
?anno
unceTi
me=20
18-03-
17
21,409.4 114,236.
Total -- -- -- -- -- -- -- --
7 03
Details of any sales return of a large
N/A
amount
Give the actual situation in this
Reporting Period (if any) where a
forecast had been made for the total
N/A
amounts of routine connected-party
transactions by type to occur in this
Reporting Period
Reason for any significant difference
between the transaction price and the N/A
market reference price (if applicable)
2. Connected Transactions Regarding Purchase or Sales of Assets or Equity Interests
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Connected Transactions Regarding Joint Investments in Third Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
4. Credits and Liabilities with Connected Parties
√Applicable □ Not applicable
27
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Indicate by tick mark whether there were any credits and liabilities with connected parties for non-operating purposes.
√ Yes □ No
Receivable from connected parties:
Recovered
Capital Increase in Interest for
amount in
occupation Beginning this this Ending
Relationship this
Connected for balance Reporting Reporting balance
with the Reason Reporting Interest rate
party non-operatin (RMB’0,00 Period Period (RMB’0,00
Company Period
g purposes 0) (RMB’0,000 (RMB’0,00 0)
(RMB’0,000
(yes/no) ) 0)
)
Payable to connected parties:
Repaid
Increase in Interest for
amount in
Relationship Beginning this this Ending
Connected this
with the Reason balance Reporting Interest rate Reporting balance
party Reporting
Company (RMB’0,000) Period Period (RMB’0,000)
Period
(RMB’0,000) (RMB’0,000)
(RMB’0,000)
Foshan
Huaxin Controlling
Borrowing 700 0 0 4.35% 14.49 700
Development shareholder
Co., Ltd.
China Paper Actual
Borrowing 0 5,000 0 6.00% 65 5,000
Corporation controller
Influence on the Company’s
operating results and No significant influences
financial condition
5. Other Significant Connected Transactions
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XIII. Particulars about the Non-operating Occupation of Funds by the Controlling
Shareholder and Other Connected Parties of the Company
□ Applicable √ Not applicable
The Company was not involved in the non-operating occupation of funds by the controlling shareholder and other connected parties
during the Reporting Period.
28
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
XIV. Significant Contracts and Execution
1. Entrustment, Contracting and Leasing
(1) Entrustment
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(2) Contracting
□ Applicable √ Not applicable
No such cases in the Reporting Period.
(3) Leasing
□ Applicable √ Not applicable
No such cases in the Reporting Period.
2. Significant Guarantees
√Applicable □ Not applicable
(1) Guarantees
Unit: RMB'0,000
Guarantees provided by the Company for external parties (excluding those for subsidiaries)
Disclosure
Actual Guarante
date of the
occurrence date Actual e for a
guarantee Line of Type of Term of Due or
Guaranteed party (date of guarantee connected
line guarantee guarantee guarantee not
agreement amount party or
announcem
signing) not
ent
Guarantees provided by the Company for subsidiaries
Disclosure
Actual Guarante
date of the
occurrence date Actual e for a
guarantee Line of Type of Term of Due or
Guaranteed party (date of guarantee connected
line guarantee guarantee guarantee not
agreement amount party or
announcem
signing) not
ent
29
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Zhuhai Hongta
30 2 January
Renheng
December 7,000 2 January 2018 7,000 Joint-liability 2018 to 13 No Yes
Packaging Co.,
2017 March 2020
Ltd.
Zhuhai Hongta 28 February
Renheng 24 January 28 February 2017 to 28
20,000 20,000 Joint-liability No Yes
Packaging Co., 2017 2017 February
Ltd. 2019
Zhuhai Hongta
29 March
Renheng 24 January
10,000 29 March 2018 10,000 Joint-liability 2018 to 30 No Yes
Packaging Co., 2017
March 2020
Ltd.
Zhuhai Hongta
23 May 2017
Renheng 24 May
33,000 23 May 2017 27,100 Joint-liability to 22 May No Yes
Packaging Co., 2017
2020
Ltd.
Zhuhai Hongta 1 March
Renheng 29 April 2016 to 31
20,000 1 March 2016 2,445 Joint-liability No Yes
Packaging Co., 2016 December
Ltd. 2019
Zhuhai Hongta
15 July 2017
Renheng
5 July 2017 20,000 15 July 2017 9,971 Joint-liability to 15 July No Yes
Packaging Co.,
2019
Ltd.
Zhuhai Hongta
21 September
Renheng 23 June 12 September
10,000 13,750 Joint-liability 2017 to 31 No Yes
Packaging Co., 2017 2017
March 2019
Ltd.
Zhuhai Hongta 10 November
Renheng 24 May 10 November 2017 to 9
10,000 1,700 Joint-liability No Yes
Packaging Co., 2017 2017 November
Ltd. 2019
Zhuhai Hongta 13 November
Renheng 24 May 13 November 2017 to 3
10,000 0 Joint-liability No Yes
Packaging Co., 2017 2017 September
Ltd. 2018
29 October
Zhuhai Huafeng 25 October
35,000 29 October 2016 10,550 Joint-liability 2016 to 28 No Yes
Paper Co., Ltd. 2016
October 2019
Huaxin (Foshan) 24 April 30 March
2,000 1 June 2018 1,642 Joint-liability No Yes
Color Printing Co., 2018 2018 to 29
30
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Ltd. March 2019
1 January
Huaxin (Foshan)
5 August 2016 to 31
Color Printing Co., 6,000 1 June 2016 2,000 Joint-liability No Yes
2016 December
Ltd.
2020
Zhuhai Hongta
28 July 2017
Renheng 23 June
10,000 28 July 2017 10,000 Joint-liability to 14 May No Yes
Packaging Co., 2017
2018
Ltd.
Total guarantee line for Total actual guarantee amount
subsidiaries approved during 300,000 for subsidiaries during the 183,000
the Reporting Period (B1) Reporting Period (B2)
Total approved guarantee line Total actual guarantee balance
for subsidiaries at the end of the 300,000 for subsidiaries at the end of 106,158
Reporting Period (B3) the Reporting Period (B4)
Guarantees between subsidiaries
Disclosure
Actual Guarante
date of the
occurrence date Actual e for a
guarantee Line of Type of Term of Due or
Guaranteed party (date of guarantee connected
line guarantee guarantee guarantee not
agreement amount party or
announcem
signing) not
ent
31 December
Zhuhai Huafeng 31 December
5 July 2017 15,000 11,022 Joint-liability 2017 to 13 No Yes
Paper Co., Ltd. 2017
July 2018
Zhuhai Golden 21 31 August
Pheasant Chemical November 10,000 31 August 2015 3,000 Joint-liability 2015 to 30 No Yes
Co., Ltd. 2015 August 2018
Total guarantee line for Total actual guarantee amount
subsidiaries approved during 40,000 for subsidiaries during the 25,000
the Reporting Period (C1) Reporting Period (C2)
Total approved guarantee line Total actual guarantee balance
for subsidiaries at the end of the 40,000 for subsidiaries at the end of 14,022
Reporting Period (C3) the Reporting Period (C4)
Total guarantee amount (total of the above-mentioned three kinds of guarantees)
Total guarantee line approved Total actual guarantee amount
during the Reporting Period 340,000 during the Reporting Period 208,000
(A1+B1+C1) (A2+B2+C2)
Total approved guarantee line at Total actual guarantee balance
340,000 120,180
the end of the Reporting Period at the end of the Reporting
31
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
(A3+B3+C3) Period (A4+B4+C4)
Proportion of the total actual guarantee amount (A4+B4+C4)
61.77%
in net assets of the Company
Of which:
Amount of guarantees provided for shareholders, the actual
0
controller and their connected parties (D)
Amount of debt guarantees provided directly or indirectly for
0
entities with a liability-to-asset ratio over 70% (E)
Portion of the total guarantee amount in excess of 50% of net
22,905
assets (F)
Total amount of the three kinds of guarantees above (D+E+F) 22,905
Notes for details about guarantee by complex method
(2) Illegal Provision of Guarantees for External Parties
□ Applicable √ Not applicable
No such cases in the Reporting Period.
3. Other Significant Contracts
□ Applicable √ Not applicable
No such cases in the Reporting Period.
XV. Social Responsibilities
1. Significant Environment Protection
Indicate by tick mark whether the Company or any of its subsidiaries is a heavily polluting business identified by the environmental
protection authorities of China
Yes
Name of
Name of the main Carried
Number of Distribution Emission Verified
Company or pollutants Emission emission Total Excessive
discharge of discharge concentratio total
its and method standard of emission emission
outlet outlet n emission
subsidiaries characteristi pollutants
cs
Chemical Sewage Chemical Chemical Chemical Chemical
Hongta Organized
oxygen 1 disposal oxygen oxygen oxygen oxygen Naught
Renheng discharge
demand, center demand is demand≤80 demand is demand is
32
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
ammonia 37.02mg/l, mg/l, and 60.7t, and 294.4t, and
nitrogen and ammonia ammonia ammonia
ammonia nitrogen nitrogen is nitrogen is
nitrogen is ≤8mg/l 0.85t. 29.44t.
0.54mg/l
Sulfur Sulfur
Sulfur Sulfur
dioxide is dioxide is
dioxide is dioxide is
Sulfur 1.03mg/m3, 50mg/m3,
0.37t, 34.04t,
dioxide, nitrogen nitrogen
Hongta Organized Power nitrogen nitrogen
nitrogen 1 oxide is oxide is Naught
Renheng discharge boiler oxide is oxide is
oxide, 54.4mg/m3, 200mg/m3,
19.53t, and 136.15t, and
smoke and smoke and smoke
smoke is smoke is
is is
7.68t 20.42t
21.11mg/m3 30mg/m3
Chemical
Chemical Chemical Chemical
oxygen
Chemical oxygen oxygen oxygen
demand is
oxygen Sewage demand≤80 demand is demand is
Zhuhai Organized 37.5mg/l,
demand, 1 disposal mg/l, and 37.3t, and 180t, and Naught
Huafeng discharge and
ammonia center ammonia ammonia ammonia
ammonia
nitrogen nitrogen nitrogen is nitrogen is
nitrogen is
≤8mg/l 0.55t 22.5t
0.55mg/l
Sulfur Sulfur Sulfur Sulfur
dioxide is dioxide is dioxide is dioxide is
Sulfur 3 3
30mg/m , 50mg/m , 28.55t, 68 t,
dioxide,
Zhuhai Organized Power nitrogen nitrogen nitrogen nitrogen
nitrogen 1 Naught
Huafeng discharge boiler oxide is oxide is oxide is oxide is
oxide,
62mg/m3, 100mg/m3, 61.53t, and 142t, and
smoke
and smoke and smoke smoke is smoke is
3 3
is 11mg/m is 20mg/m 10.51t 26t
Chemical
Chemical Chemical Chemical
oxygen
Chemical oxygen oxygen oxygen
demand is
Golden oxygen Sewage demand≤11 demand is demand is
Organized 68mg/l,
Pheasant demand, 1 disposal 0mg/l, and 0.32t, and 1.1088t, and Naught
discharge and
Chemical ammonia center ammonia ammonia ammonia
ammonia
nitrogen nitrogen nitrogen is nitrogen is
nitrogen is
≤15mg/l 0.036t 0.1512t
7.6mg/l
Plant for Secondary
Non-methan High-altitud
Golden butylbenzen standard of
e e emissions
Pheasant 2 e Phase I 116mg/m Phase II of 1.123t 2.246t Naught
hydrocarbo after being
Chemical and plant Emission
n disposed
for Limit for
33
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
butylbenzen Air
e Phase II Pollution
(DB44/27-
2001) and
Emission
Limit for
Odor
Pollutants
(GB14554
-1993)
Chemical Chemical
Chemical Chemical
oxygen oxygen
oxygen oxygen
demand, demand,
Chemical demand, demand,
Nanzhuang and and
Huaxin oxygen and and
Organized Jili ammonia ammonia
Color demand, 1 ammonia ammonia Naught
discharge Sewage nitrogen are nitrogen are
Printing ammonia nitrogen are nitrogen are
Surge 8.294mg/l ≤110mg/l
nitrogen 0.078t and 0.178t and
and and
0.0105t 0.026t
0.0984mg/l ≤15mg/l
respectively respectively
respectively respectively
Pollution-prevention Facilities Construction and Operation
Hongta Renheng
Pollution-prevention Facilities Construction and Operation: The Sewage Station and Boiler were all built and
operated by the third party in normal operation. As for sewage, Hongta Renheng belongs to State key monitoring
enterprise; as for smoke, Hongta Renheng belongs to Zhuhai key monitoring enterprise.
(1) Establishing a Sewage Station whose maximum processing capacity was 12000m3/d, and it was put into
service on 1 April 2013 with the investment of RMB14 million through applying A/O technology. The quality of
water after such processing could meet relevant national discharge standards stated in Discharge Standard of
Water Pollutants for Pulp & Paper Industry (GB3544-2008), and waste water (after processing) reaching
corresponding standards would be discharged into Gongbei Sewage Disposal Plant via the municipal sewage
pipeline network of Xiangzhou District, Zhuhai City.
Meanwhile, corresponding COD and online ammonia nitrogen auto monitoring system would be installed at the
discharge outlet, and the qualified unit would be in charge of its operation management and 24-hour auto online
detection and monitoring of ammonia nitrogen.
(2) Establishing 2 biomass briquette boilers with the operating capacity of 40 tons per hour were installed in
association with relevant dust removal measures. As ceramic multi-tube cyclone dust collector and bag-type dust
removal technology were applied to dispose flue gas, all discharged smoke pollutants, SO2 and nitric oxides via
the 25m chimney would meet corresponding discharge limit standard stated in Emission Standard of Air
Pollutants for Boilers (DB44/765-2010).
Moreover, corresponding flue gas auto monitoring system would be installed at the discharge outlet, and the
qualified unit would be in charge of its operation management and 24-hour auto online detection and monitoring
of discharged SO2, nitric oxides and smoke dust.
Zhuhai Huafeng:
Pollution-prevention Facilities Construction and Operation: The Sewage Station and Boiler were all built and
34
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
operated by the third party in normal operation. As for sewage and smoke, Hongta Renheng belongs to State key
monitoring enterprise.
(1) Establishing a Sewage Station whose maximum processing capacity was 22000m3/d, and it was put into
service on 28 September 2006 with the floor space 21358m2 and the investment of RMB38 million through
applying flocculation precipitation + SBR technology. In addition, SBR biochemical system applied Canada ADI
company’ s SBR technology, and key devices were all introduced from foreign countries. The quality of water
after such processing could meet relevant national discharge standards stated in Discharge Standard of Water
Pollutants for Pulp & Paper Industry (GB3544-2008), and waste water (after processing) reaching corresponding
standards would be discharged into Nanshui Sewage Disposal Plant in Zhuhai City via the municipal sewage
pipeline network of Gaolan Port District, Zhuhai City.
Meanwhile, corresponding COD and online ammonia nitrogen auto monitoring system would be installed at the
discharge outlet, and the qualified unit would be in charge of its operation management and 24-hour auto online
detection and monitoring of ammonia nitrogen.
(2) Establishing two self-supplied fire coal CFBs were installed with the operating capacity of 75m3 per hour in
association with relevant sulphur and dust removal measures. As out-of-furnace alkaline-mode wet
desulphurization technology, bag-type dust remover, low-temperature and low-nitrogen combustion technology +
SNCR were applied to dispose flue gas, the desulfurization rate is over 90%, the dust removal efficiency would
exceed 99.6% and the denitration efficiency over 85%. All discharged smoke pollutants, SO2 and nitric oxides via
the 120m chimney would meet special discharge limit standard stated in Emission Standard of Air Pollutants for
Thermal Power Plants (GB13223-2011).
Moreover, corresponding flue gas auto monitoring system would be installed at the discharge outlet, and the
qualified unit would be in charge of its operation management and 24-hour auto online detection and monitoring
of discharged SO2, nitric oxides and smoke dust.
Golden Pheasant Chemical
Pollution-prevention Facilities Construction and Operation: exhaust processing system and sewage station are in
normal operation.
(1) Establishing a Sewage Station whose maximum processing capacity was 70m3/d, and the actual processing
capacity was about 20m3 per day through applying biosorption technology. Sewage disposal equipment is running
normally, and waste water (after processing) reaching corresponding standards would be discharged into Nanshui
Sewage Disposal Plant in Zhuhai City via the municipal sewage pipeline network of Gaolan Port District, Zhuhai
City. When all industrial waste water after disposal in sewage station can reach Class 1 Standard during the
second period stated in Discharge Limits of Water Pollutants (DB44/26-2001), it will be disposed after being
discharged into Nanshui Sewage Disposal Plant in Zhuhai City via the municipal sewage pipeline network of
Gaolan Port District, Zhuhai City.
(2) Establishing a exhaust processing system respectively in phase I with 1000m3 per hour processing capacity
and phase II with 2000m3 per hour processing capacity. It adopted the equipment of bio-trickling, activated carbon
adsorption, and photo-catalytic oxidation to discharge orderly after processing and reaching corresponding
standards.
Huaxin Color Printing
Pollution-prevention Facilities Construction and Operation: The Sewage Station is in normal operation.
The company established its own Sewage Station whose maximum processing capacity can reach 20m3/d, and the
qualified environmental protection company has always been involved in disposing waste water. All industrial
waste water after disposal and reaching Class 1 Standard during the second period stated in Discharge Limits of
Water Pollutants (DB44/26-2001) will be discharged into Nanzhuang Sewage Surge.
35
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Appraisal of environment influences for construction project and other administrative licensing of environment protection
Hongta Renheng
(1) Reply on environmental impact report of sludge energy utilization technology project of Zhuhai Hongta
Renheng Packaging Co., Ltd. (“Hongta Renheng”) (ZXHJB [2017] No. 63).
(2) Pollutant discharge permit, No. 91440400617502107U001P; validity period: from 7 June 2017 to 6 June 2020;
issued by: Environmental Protection Bureau of Xiangzhou District of Zhuhai City.
Zhuhai Huafeng
Pollution discharge permit, No. 914404006176214217001P; validity period: from 7 June 2017 to 6 June 2020;
issued by: Environmental Protection Bureau of ZHUHAI GAOLAN PORT ECONOMIC ZONE
MANAGEMENT COMMITTEE.
Golden Pheasant Chemical
Pollution discharge permit, No. 4404062010000030; validity period: from 1 August 2016 to 31 July 2021; issued
by: Environmental Protection Bureau of ZHUHAI GAOLAN PORT ECONOMIC ZONE.
Huaxin Color Printing
Pollution discharge permit, No. 4406042010231001; validity period: from 4 April 2018 to 3 April 2021 issued by:
Environmental Protection Bureau of Chancheng District of Foshan City.
Emergency plan for abrupt environment affairs
Hongta Renheng
Hongta Renheng prepared the Emergency Plan for Environmental Pollution and filed it with Zhuhai
Environmental Protection Bureau Environment Monitoring Branch on 17 December 2015; Filing No.:
44040120150P-L, Filing documents: Emergency Plan for Abrupt Environment Affairs of Zhuhai S.E.Z. Hongta
Renheng Paper Co., Ltd. and the Risk Assessment Report for Abrupt Environment Affairs of Zhuhai S.E.Z.
Hongta Renheng Paper Co., Ltd.
Zhuhai Huafeng
Zhuhai Huafeng prepared the Emergency Plan for Environmental Pollution and filed it with Environmental
Protection Bureau of ZHUHAI GAOLAN PORT ECONOMIC ZONE on 24 October 2013; Filing No.: YHYJB
[2015] No. 17, Filing documents: Emergency Plan for Abrupt Environment Affairs of Zhuhai Huafeng Paper Co.,
Ltd. (“Zhuhai Huafeng”) and the Risk Assessment Report for Abrupt Environment Affairs of Zhuhai Huafeng
Paper Co., Ltd. (“Zhuhai Huafeng”) with Environmental Emergency Management Office of Department of
Environmental Protection of Guangdong Province on 23 January 2015.
Golden Pheasant Chemical
Golden Pheasant Chemical prepared the Emergency Plan for Abrupt Environmental Pollution and filed it with
Environmental Protection Bureau of ZHUHAI GAOLAN PORT ECONOMIC ZONE on 23 November 2015;
Filing No.: 2015076.
Huaxin Color Printing
Huaxin Color Printing prepared the Emergency Plan for Abrupt Environment Affairs and the Risk Assessment
Report for Abrupt Environment Affairs. Filing No.: 440604-2017-034-L.
Environment self-monitoring scheme
Hongta Renheng
Hongta Renheng prepared self-monitoring scheme, annual self-monitoring report and self-monitoring result
information and disclosed the same on the Platform for Disclosure of Self-Monitoring Information of
State-Controlled Enterprises at the Provincial Level in Guangdong and the National Pollutant Sources Monitoring
36
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Data Management System Platform according to the requirements of the Measures for the Self-Monitoring and
Information Disclosure by the Enterprises subject to Intensive Monitoring and Control of the State (for Trial
Implementation) (HF [2013] No. 81) and the Work Scheme for the Self-Monitoring and Information Disclosure
by the Enterprises subject to Intensive Monitoring and Control of the State. The enterprise self-monitoring content
includes: air pollutant emission monitoring at main exhaust emission outlets, water pollutant emission monitoring
at main wastewater discharge outlets, and factory boundary noise monitoring, as follows:
(1) Chemical oxygen demand and ammonia nitrogen shall be monitored every two hours every day and the values
monitored shall be disclosed; biochemical oxygen demand, total phosphorus and total nitrogen shall be monitored
once a week and the values monitored shall be disclosed; other pollutants in the wastewater shall be monitored
once a month at least;
(2) Sulfur dioxide, nitrogen oxides and particles shall be monitored every hour every day and the values
monitored shall be disclosed; other pollutants in the exhaust shall be monitored once a season at least;
(3) Factory boundary noise shall be monitored once a season at least;
(4) Factory boundary odor concentration shall be monitored once a season.
If the self-monitoring shall be carried out by an entrusted institution, a social testing institution that is certified by
the competent department of environmental protection at the provincial level or an environment monitoring
institution to which the competent department of environmental protection belongs shall be entrusted to carry out
the monitoring task. The environment monitoring institution to which the competent department of environmental
protection belongs that has undertaken a supervisory monitoring task shall not undertake the self-monitoring
entrustment business of the enterprise monitored.
The enterprise has an online monitoring system of chemical oxygen demand, an online monitoring system of
ammonia-nitrogen containing wastewater and an online monitoring system of flue gas. The data of online
monitoring systems of chemical oxygen demand, ammonia-nitrogen, sulfur dioxide, nitrogen oxides and particles
shall be disclosed on the Integrated Management Platform of Key Pollution Sources in Guangdong Province every
day; other pollutants shall be monitored by a qualified third party testing institution that is entrusted according to
relevant requirements and then monitoring data shall be disclosed on the Integrated Management Platform of Key
Pollution Sources in Guangdong Province and the Management System Platform of National Pollutant Sources
Monitoring Data.
Zhuhai Huafeng
Zhuhai Huafeng prepared self-monitoring scheme, annual self-monitoring report and self-monitoring result
information and disclosed the same on the Platform for Disclosure of Self-Monitoring Information of
State-Controlled Enterprises at the Provincial Level in Guangdong and the National Pollutant Sources Monitoring
Data Management System Platform according to the requirements of the Measures for the Self-Monitoring and
Information Disclosure by the Enterprises subject to Intensive Monitoring and Control of the State (for Trial
Implementation) (HF[2013] No. 81) and the Work Scheme for the Self-Monitoring and Information Disclosure by
the Enterprises subject to Intensive Monitoring and Control of the State. The enterprise self-monitoring content
includes: air pollutant emission monitoring at main exhaust emission outlets, water pollutant emission monitoring
at main wastewater discharge outlets, and factory boundary noise monitoring, as follows:
(1) Chemical oxygen demand and ammonia nitrogen shall be monitored every hour every day and the average
values shall be disclosed; other pollutants in the wastewater shall be monitored once a month at least;
(2) Sulfur dioxide, nitrogen oxides and particles shall be monitored every hour every day and the average values
shall be disclosed; other pollutants in the exhaust shall be monitored once a season at least;
(3) Factory boundary noise shall be monitored once a season at least;
37
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
(4) Factory boundary odor concentration shall be monitored once a season.
(5) The daily monitoring data of PH value, chroma and suspended solids in the wastewater and the weekly
monitoring data of total phosphorus and total nitrogen shall be disclosed on the Management System Platform of
National Pollutant Sources Monitoring Data.
If the self-monitoring shall be carried out by an entrusted institution, a social testing institution that is certified by
the competent department of environmental protection at the provincial level or an environment monitoring
institution to which the competent department of environmental protection belongs shall be entrusted to carry out
the monitoring task. The environment monitoring institution to which the competent department of environmental
protection belongs that has undertaken a supervisory monitoring task shall not undertake the self-monitoring
entrustment business of the enterprise monitored.
The enterprise has an online monitoring system of chemical oxygen demand, an online monitoring system of
ammonia-nitrogen containing wastewater and an online monitoring system of flue gas. The data of online
monitoring systems of chemical oxygen demand, ammonia-nitrogen, sulfur dioxide, nitrogen oxides and particles
shall be disclosed on the Integrated Management Platform of Key Pollution Sources in Guangdong Province every
day; other pollutants shall be monitored by a qualified third party institution that is entrusted according to relevant
requirements and then monitoring data shall be disclosed on the Integrated Management Platform of Key
Pollution Sources in Guangdong Province and the Management System Platform of National Pollutant Sources
Monitoring Data.
Golden Pheasant Chemical
In accordance with the requirements of the Work Scheme for the Self-Monitoring and Information Disclosure by
the Enterprises subject to Intensive Monitoring and Control of the State, Golden Pheasant Chemical entrusts a
qualified third party testing institution to conduct wastewater and factory boundary noise test every year, as
follows:
(1) Biochemical oxygen demand, ammonia nitrogen, suspended solids and chemical oxygen demand test shall be
conducted once a year at least;
(2) Factory boundary noise test shall be conducted once a year at least.
Huaxin Color Printing
In accordance with the requirements of the Work Scheme for the Self-Monitoring and Information Disclosure by
the Enterprises subject to Intensive Monitoring and Control of the State, Huaxin Color Printing entrusts a
qualified third party testing institution to conduct wastewater, exhaust and factory boundary noise test every year,
as follows:
(1) PH value, ammonia nitrogen, suspended solids, chemical oxygen demand, biochemical oxygen demand,
chroma, sulfides test shall be conducted twice a year at least;
(2) Benzene, toluene and xylene test shall be conducted once a year at least;
(3) Factory boundary noise test shall be conducted once a year at least.
Other environment information that should be disclosed
No
Other related environment protection information
No
38
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
2. Targeted Measures Taken to Help People Lift themselves out of Poverty
(1) Plan for Targeted Measures
The poverty alleviation work was conducted by the Company according to the plan and arrangement of poverty alleviation leading
group of the actual controller China Paper Corporation. The Company didn’t carry out relevant work in the Reporting Period.
(2) Outline of Targeted Measures in the Reporting Period
The Company didn’t carry out relevant work in the Reporting Period.
(3) Results of Targeted Measures
Measurement
Indicator Number/Progress
unit
I. General condition —— ——
II. Itemized investment —— ——
1. Out of poverty by industrial development —— ——
2. Out of poverty by transferring employment —— ——
3. Out of poverty by relocating —— ——
4. Out of poverty by education —— ——
5. Out of poverty by improving health —— ——
6. Out of poverty by protecting ecological environment —— ——
7. Subsidy for the poorest —— ——
8. Social poverty alleviation —— ——
9. Other items —— ——
III. Received awards(contents and rank) —— ——
(4) Subsequent Targeted Measure Plans
The Company would positively cooperate with China Paper Corporation to carry out the targeted measure activities according to the
implementation plan of anti-poverty project from the actual controller China Paper Corporation, continuously conducting the
subsequent targeted measure plans.
XVI. Other Significant Events
□ Applicable √ Not applicable
No such cases in the Reporting Period.
39
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
XVII. Significant Events of Subsidiaries
□ Applicable √ Not applicable
40
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Part VI Share Changes and Shareholder Information
I. Share Changes
1. Share Changes
Unit: share
Before Increase/decrease (+/-) After
Bonus
Percentag New Bonus Percentag
Number issue from Other Subtotal Number
e (%) issues shares e (%)
profit
333,500,0 333,500,0
I. Non-tradable shares 65.98% 65.98%
00 00
333,500,0 333,500,0
1. Sponsor’s shares 65.98% 65.98%
00 00
Shares held by 332,930,2 332,930,2
65.87% 65.87%
domestic corporations 90 90
Other 569,710 0.11% 569,710 0.11%
171,925,0 171,925,0
II. Tradable shares 34.02% 34.02%
00 00
2. Domestically listed 171,925,0 171,925,0
34.02% 34.02%
foreign shares 00 00
505,425,0 505,425,0
III. Total shares 100.00% 100.00%
00 00
Reasons for the share changes
□ Applicable √ Not applicable
Approval of share changes
□ Applicable √ Not applicable
Transfer of share ownership
□ Applicable √ Not applicable
Effects of share changes on the basic EPS, diluted EPS, net assets per share attributable to ordinary shareholders of the Company and
other financial indexes over the prior year and the prior period
□ Applicable √ Not applicable
Other contents that the Company considers necessary or is required by the securities regulatory authorities to disclose
41
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
□ Applicable √ Not applicable
2. Changes in Restricted Shares
□ Applicable √ Not applicable
II. Issuance and Listing of Securities
□ Applicable √ Not applicable
III. Total Number of Shareholders and Their Shareholdings
Unit: share
Total number of preference
Total number of ordinary shareholders with resumed
13,665 0
shareholders at the period-end voting rights at the period-end
(if any) (see Note 8)
5% or greater ordinary shareholders or the top 10 ordinary shareholders
Total Number Pledged or frozen shares
Increase Number
ordinary of
/decreas of
shares non-trad
Name of Nature of Shareholding e during tradable
held at able
shareholder shareholder percentage (%) this ordinary Status Number
the ordinary
Reportin shares
period-e shares
g Period held
nd held
FOSHAN
HUAXIN State-owned legal 329,512, 329,512,
65.20% 0 0
DEVELOPME person 030 030
NT CO., LTD.
GUOTAI
JUNAN
SECURITIES Foreign legal 3,157,45 -129,60 3,157,45
0.62%
(HONG person 30 3
KONG)
LIMITED
WU Domestic natural 2,561,99 2,561,99
0.51% 0
HAOYUAN person 1 1
Domestic natural 1,675,79 1,675,79
CAI YUJIU 0.33% 482,147
person 9 9
MIAO JUN Domestic natural 0.30% 1,522,20 285,900 1,522,20
42
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
person 0 0
NORGES Foreign legal 1,352,72 1,352,72
0.27% 0
BANK person 0 0
ESSENCE
INTERNATIO
NAL
Foreign legal 1,205,25 1,205,25
SECURITIES 0.24% 0
person 2 2
(HONG
KONG) CO.,
LTD.
KGI ASIA Foreign legal 1,161,95 1,161,95
0.23% 0
LIMITED person 9 9
FOSHAN
CHAN BEN
State-owned legal 1,139,42 1,139,42
DE ASSET 0.23% 0
person 0 0
MANAGEME
NT CO., LTD
Domestic natural 1,011,30
ZHANG LI 0.20% 51,300 51,300
person 0
Strategic investors or general
corporations becoming top-ten
Naught
shareholders due to placing of new
shares (if any) (see Note 3)
Connected or acting-in-concert It is unknown whether there is among the above shareholders any connected parties or
parties among the shareholders acting-in-concert parties as defined in the Administrative Measures for the Acquisition of
above Listed Companies.
Shareholdings of the top ten tradable ordinary shareholders
Number of tradable ordinary shares held at the Type of shares
Name of shareholder
period-end Type Number
GUOTAI JUNAN Domestically
SECURITIES(HONGKONG) 3,157,453 listed foreign 3,157,453
LIMITED share
Domestically
WU HAOYUAN 2,561,991 listed foreign 2,561,991
share
Domestically
CAI YUJIU 1,675,799 listed foreign 1,675,799
share
Domestically
MIAO JUN 1,522,200 1,522,200
listed foreign
43
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
share
Domestically
NORGES BANK 1,352,720 listed foreign 1,352,720
share
ESSENCE INTERNATIONAL Domestically
SECURITIES (HONG KONG) 1,205,252 listed foreign 1,205,252
CO., LTD. share
Domestically
KGI ASIA LIMITED 1,161,959 listed foreign 1,161,959
share
Domestically
ZHANG LI 1,011,300 listed foreign 1,011,300
share
Domestically
MA ZEQI 959,762 listed foreign 959,762
share
Domestically
ZHU SHIJIE 800,052 listed foreign 800,052
share
Connected or acting-in-concert
parties among the top ten
It is unknown whether there is among the above shareholders any connected parties or
non-restrictedly tradable share
acting-in-concert parties as defined in the Administrative Measures for the Acquisition of
holders and between the top ten
Listed Companies.
non-restrictedly tradable share
holders and the top ten shareholders
Top ten ordinary shareholders
conducting securities margin trading N/A
(if any) (see Note 4)
Indicate by tick mark whether any of the top ten ordinary shareholders or the top ten non-restricted ordinary shareholders of the
Company conducted any promissory repo during the Reporting Period.
□ Yea √ No
No such cases in the Reporting Period.
IV. Change of the Controlling Shareholder or the Actual Controller
Change of the controlling shareholder in the Reporting Period
□ Applicable √ Not applicable
There was no any change of the controlling shareholder of the Company in the Reporting Period.
44
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Change of the actual controller in the Reporting Period
□ Applicable √ Not applicable
There was no any change of the actual controller of the Company in the Reporting Period.
45
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Part VII Preferred Shares
□ Applicable √ Not applicable
No preferred shares in the Reporting Period.
46
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Part VIII Directors, Supervisors and Senior Management
I Changes in Shareholdings of Directors, Supervisors and Senior Management
□ Applicable √ Not applicable
There were no changes in shareholdings of directors, supervisors, and senior management in the Reporting Period. For details, see
Annual Report of 2017.
II Changes in Directors, Supervisors and Senior Management
√Applicable □ Not applicable
Name Office title Type of change Date Reason
Ren Xiaoping GM Employed 15 January 2018 Employed by Board of Directors
Ren Xiaoping Director Elected 31 January 2018 Elected by Annual General Meeting
Ren Xiaoping Vice President Elected 15 March 2018 Elected by Board of Directors
Vice GM,
Ding Guoqiang Secretary of the Employed 17 July 2018 Employed by Board of Directors
Board, and CFO
Vice President
Ji Xiangdong Left 5 January 2018 Resigned voluntarily
and GM
Chen Zhenran Vice GM Dismissed 17 January 2018 Resigned voluntarily
Vice GM and
Liu Yan Secretary of the Dismissed 26 March 2018 Resigned voluntarily
Board
Yang Chenglin CFO Dismissed 6 July 2018 Job changes
47
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Part IX Corporate Bonds
Are there any corporate bonds publicly offered and listed on the stock exchange, which were undue before the approval date of this
Report or were due but could not be redeemed in full?
No
48
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Part X Financial Report
I. Auditor’s Report
Whether the interim report has been audited?
□Yes √ No
The interim report of the Company has not been audited.
II. Financial Statements
The unit of the financial statements attached: RMB
1. Consolidated Balance Sheet
Prepared by Foshan Huaxin Packaging Co., Ltd.
30 June 2018
Unit: RMB
Item 30 June 2018 31 December 2017
Current assets:
Monetary assets 354,612,863.22 287,652,868.65
Settlement reserve
Interbank loans granted
Financial assets at fair value through
profit or loss
Derivative financial assets
Notes receivable 328,996,564.15 430,699,664.45
Accounts receivable 743,129,178.17 730,130,223.06
Prepayments 213,957,479.64 130,297,310.05
Premiums receivable
Reinsurance receivables
Receivable reinsurance contract
reserve
Interest receivable 633,440.15 141,388.09
Dividends receivable
Other receivables 20,145,275.10 20,108,143.14
49
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Financial assets purchased under
resale agreements
Inventories 741,788,752.26 586,179,348.11
Assets classified as held for sale
Current portion of non-current assets
Other current assets 27,831,329.21 44,160,627.03
Total current assets 2,431,094,881.90 2,229,369,572.58
Non-current assets:
Loans and advances to customers
Available-for-sale financial assets 627,643,841.04 627,643,841.04
Held-to-maturity investments
Long-term receivables
Long-term equity investments 8,205,989.25 8,294,365.17
Investment property 31,754,646.67 32,092,356.29
Fixed assets 2,232,204,184.15 2,302,301,389.40
Construction in progress 49,481,227.93 39,315,774.19
Engineering materials
Proceeds from disposal of fixed
assets
Productive living assets
Oil and gas assets
Intangible assets 119,698,621.70 139,717,215.22
R&D expense 2,778,163.77
Goodwill 11,547,305.29 11,547,305.29
Long-term prepaid expense 2,801,296.74 3,256,890.17
Deferred income tax assets 27,594,599.01 27,594,599.01
Other non-current assets 807,067.64 5,235,044.33
Total non-current assets 3,114,516,943.19 3,196,998,780.11
Total assets 5,545,611,825.09 5,426,368,352.69
Current liabilities:
Short-term borrowings 776,773,275.16 897,426,244.52
Borrowings from central bank
Customer deposits and deposits from
banks and other financial institutions
Interbank loans obtained
50
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Financial liabilities at fair value
1,053,987.24 2,394,879.25
through profit or loss
Derivative financial liabilities
Notes payable 149,811,246.41 8,530,196.41
Accounts payable 310,479,663.79 341,247,162.39
Advances from customers 27,110,691.51 21,769,745.08
Financial assets sold under
repurchase agreements
Handling charges and commissions
payable
Payroll payable 20,899,638.73 29,262,158.33
Taxes payable 18,663,303.42 21,397,103.10
Interest payable 18,751,942.71 7,865,380.83
Dividends payable 29,913,098.67 12,116,789.76
Other payables 93,486,525.48 30,829,181.11
Reinsurance payables
Insurance contract reserve
Payables for acting trading of
securities
Payables for underwriting of
securities
Liabilities directly associated with
assets classified as held for sale
Current portion of non-current
199,985,829.38 199,834,258.85
liabilities
Other current liabilities
Total current liabilities 1,646,929,202.50 1,572,673,099.63
Non-current liabilities:
Long-term borrowings 300,000,000.00 200,000,000.00
Bonds payable
Including: Preferred shares
Perpetual bonds
Long-term payables 16,000,000.00 16,825,912.17
Long-term payroll payable
Specific payables
Provisions 1,366,445.61 1,366,445.61
Deferred income 31,602,968.18 30,773,540.27
51
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Deferred income tax liabilities 2,238,594.61 2,238,594.61
Other non-current liabilities
Total non-current liabilities 351,208,008.40 251,204,492.66
Total liabilities 1,998,137,210.90 1,823,877,592.29
Owners’ equity:
Share capital 505,425,000.00 505,425,000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 256,822,373.42 256,822,373.42
Less: Treasury shares
Other comprehensive income 169,714.39 169,714.39
Specific reserve
Surplus reserves 192,647,450.61 192,647,450.61
General reserve
Retained profits 990,441,300.86 1,027,794,897.79
Total equity attributable to owners of
1,945,505,839.28 1,982,859,436.21
the Company as the parent
Non-controlling interests 1,601,968,774.91 1,619,631,324.19
Total owners’ equity 3,547,474,614.19 3,602,490,760.40
Total liabilities and owners’ equity 5,545,611,825.09 5,426,368,352.69
Legal representative: Ren Xiaoping Accounting head for this Report: Ding Guoqiang
Head of the accounting department: Wen Yan
2. Balance Sheet of the Company as the Parent
Unit: RMB
Item 30 June 2018 31 December 2017
Current assets:
Monetary assets 6,470,626.41 27,448,820.30
Financial assets at fair value through
profit or loss
Derivative financial assets
Notes receivable
Accounts receivable
Prepayments
52
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Interest receivable
Dividends receivable
Other receivables 278,867,133.91 187,029,661.31
Inventories
Assets classified as held for sale
Current portion of non-current assets
Other current assets 24,303.22 18,255.56
Total current assets 285,362,063.54 214,496,737.17
Non-current assets:
Available-for-sale financial assets 627,643,841.04 627,643,841.04
Held-to-maturity investments
Long-term receivables
Long-term equity investments 1,065,107,442.14 1,070,107,442.14
Investment property
Fixed assets 102,029.00 121,857.50
Construction in progress
Engineering materials
Proceeds from disposal of fixed
assets
Productive living assets
Oil and gas assets
Intangible assets 107,217.24 118,626.24
R&D expense
Goodwill
Long-term prepaid expense 190,866.25 213,321.10
Deferred income tax assets
Other non-current assets
Total non-current assets 1,693,151,395.67 1,698,205,088.02
Total assets 1,978,513,459.21 1,912,701,825.19
Current liabilities:
Short-term borrowings
Financial liabilities at fair value
through profit or loss
Derivative financial liabilities
Notes payable
53
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Accounts payable
Advances from customers
Payroll payable 6,856.99 5,701.66
Taxes payable 24,582.32 1,698.89
Interest payable 10,197,616.39 4,511,037.89
Dividends payable 6,160,809.67 219,338.35
Other payables 68,455,418.00 7,000,715.00
Liabilities directly associated with
assets classified as held for sale
Current portion of non-current
199,985,829.38 199,834,258.85
liabilities
Other current liabilities
Total current liabilities 284,831,112.75 211,572,750.64
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preferred shares
Perpetual bonds
Long-term payables
Long-term payroll payable
Specific payables
Provisions
Deferred income
Deferred income tax liabilities
Other non-current liabilities
Total non-current liabilities
Total liabilities 284,831,112.75 211,572,750.64
Owners’ equity:
Share capital 505,425,000.00 505,425,000.00
Other equity instruments
Including: Preferred shares
Perpetual bonds
Capital reserves 250,531,482.00 250,531,482.00
Less: Treasury shares
Other comprehensive income
54
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Specific reserve
Surplus reserves 192,647,450.61 192,647,450.61
Retained profits 745,078,413.85 752,525,141.94
Total owners’ equity 1,693,682,346.46 1,701,129,074.55
Total liabilities and owners’ equity 1,978,513,459.21 1,912,701,825.19
3. Consolidated Income Statement
Unit: RMB
Item H1 2018 H1 2017
1. Revenue 1,747,156,340.92 1,567,199,202.22
Including: Operating revenue 1,747,156,340.92 1,567,199,202.22
Interest income
Premium income
Handling charge and commission
income
2. Operating costs and expenses 1,788,217,018.44 1,574,330,174.45
Including: Cost of sales 1,595,138,938.68 1,376,216,644.41
Interest expense
Handling charge and commission
expense
Surrenders
Net claims paid
Net amount provided as insurance
contract reserve
Expenditure on policy dividends
Reinsurance premium expense
Taxes and surtaxes 10,114,628.71 10,398,261.38
Selling expense 69,997,755.68 76,796,056.93
Administrative expense 67,088,679.11 61,449,510.47
Finance costs 45,936,448.74 49,469,701.26
Asset impairment loss -59,432.48
Add: Gain on changes in fair value (“-”
1,340,892.01
for loss)
Investment income (“-” for loss) -88,375.92 16,267,328.42
Including: Share of profit or loss of
-88,375.92 16,267,328.42
joint ventures and associates
55
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Foreign exchange gain (“-” for loss)
Asset disposal income (“-” for loss) 68,414.74 -23,474.80
Other income 9,069,363.42 4,179,991.97
3. Operating profit (“-” for loss) -30,670,383.27 13,292,873.36
Add: Non-operating income 1,600,770.29 2,077,465.21
Less: Non-operating expense 930,302.34 41,617.20
4. Profit before taxation (“-” for loss) -29,999,915.32 15,328,721.37
Less: Income tax expense 2,962,396.75 96,393.17
5. Net profit (“-” for net loss) -32,962,312.07 15,232,328.20
5.1 Net profit from continuing
-32,962,312.07 15,232,328.20
operations (“-” for net loss)
5.2 Net profit from discontinued
operations (“-” for net loss)
Net profit attributable to owners of the
-15,299,762.79 12,487,648.99
Company as the parent
Net profit attributable to
-17,662,549.28 2,744,679.21
non-controlling interests
6. Other comprehensive income, net of
tax
Attributable to owners of the Company
as the parent
6.1 Items that will not be
reclassified to profit or loss
6.1.1 Changes in net liabilities or
assets caused by remeasurements on
defined benefit pension schemes
6.1.2 Share of other
comprehensive income of investees that
will not be reclassified to profit or loss
under equity method
6.2 Items that may subsequently be
reclassified to profit or loss
6.2.1 Share of other
comprehensive income of investees that
will be reclassified to profit or loss under
equity method
6.2.2 Gain/Loss on changes in fair
value of available-for-sale financial
assets
6.2.3 Gain/Loss arising from
reclassification of held-to-maturity
56
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
investments to available-for-sale financial
assets
6.2.4 Effective gain/loss on cash
flow hedges
6.2.5 Differences arising from
translation of foreign
currency-denominated financial
statements
6.2.6 Other
Attributable to non-controlling
interests
7. Total comprehensive income -32,962,312.07 15,232,328.20
Attributable to owners of the Company
-15,299,762.79 12,487,648.99
as the parent
Attributable to non-controlling
-17,662,549.28 2,744,679.21
interests
8. Earnings per share
8.1 Basic earnings per share -0.0303 0.0247
8.2 Diluted earnings per share -0.0303 0.0247
Where business mergers under the same control occurred in this Reporting Period, the net profit achieved by the merged parties
before the business mergers was RMB0.00, with the corresponding amount for the last period being RMB0.00.
Legal representative: Ren Xiaoping Accounting head for this Report: Ding Guoqiang
Head of the accounting department: Wen Yan
4. Income Statement of the Company as the Parent
Unit: RMB
Item H1 2018 H1 2017
1. Operating revenue 0.00 0.00
Less: Cost of sales 0.00 0.00
Taxes and surtaxes 300.00 3,620.00
Selling expense 0.00 0.00
Administrative expense 1,297,844.72 4,319,154.04
Finance costs 265,114.18 -3,025,613.56
Asset impairment loss
Add: Gain on changes in fair value
(“-” for loss)
Investment income (“-” for loss) 3,214,180.81 21,225,807.70
57
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Including: Share of profit or loss
16,418,417.73
of joint ventures and associates
Asset disposal income (“-” for
-70,809.94
loss)
Other income
2. Operating profit (“-” for loss) 1,650,921.91 19,857,837.28
Add: Non-operating income
Less: Non-operating expense 29,759.34
3. Profit before taxation (“-” for loss) 1,650,921.91 19,828,077.94
Less: Income tax expense
4. Net profit (“-” for net loss) 1,650,921.91 19,828,077.94
4.1 Net profit from continuing
1,650,921.91 19,828,077.94
operations (“-” for net loss)
4.2 Net profit from discontinued
operations (“-” for net loss)
5. Other comprehensive income, net of
tax
5.1 Items that will not be reclassified
to profit or loss
5.1.1 Changes in net liabilities or
assets caused by remeasurements on
defined benefit pension schemes
5.1.2 Share of other
comprehensive income of investees that
will not be reclassified into profit or
loss under equity method
5.2 Items that may subsequently be
reclassified to profit or loss
5.2.1 Share of other
comprehensive income of investees that
will be reclassified into profit or loss
under equity method
5.2.2 Gain/Loss on changes in fair
value of available-for-sale financial
assets
5.2.3 Gain/Loss arising from
reclassification of held-to-maturity
investments to available-for-sale
financial assets
5.2.4 Effective gain/loss on cash
flow hedges
58
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
5.2.5 Differences arising from
translation of foreign
currency-denominated financial
statements
5.2.6 Other
6. Total comprehensive income 1,650,921.91 19,828,077.94
7. Earnings per share
7.1 Basic earnings per share
7.2 Diluted earnings per share
5. Consolidated Cash Flow Statement
Unit: RMB
Item H1 2018 H1 2017
1. Cash flows from operating activities:
Proceeds from sale of commodities
1,724,703,419.00 1,195,168,149.37
and rendering of services
Net increase in customer deposits and
deposits from banks and other financial
institutions
Net increase in loans from central
bank
Net increase in loans from other
financial institutions
Premiums received on original
insurance contracts
Net proceeds from reinsurance
Net increase in deposits and
investments of policy holders
Net increase in proceeds from
disposal of financial assets at fair value
through profit or loss
Interest, handling charges and
commissions received
Net increase in interbank loans
obtained
Net increase in proceeds from
repurchase transactions
Tax rebates 83,274.78 77,562.83
Cash generated from other operating
90,788,801.98 45,235,227.81
activities
59
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Subtotal of cash generated from
1,815,575,495.76 1,240,480,940.01
operating activities
Payments for commodities and
1,550,475,876.47 1,617,327,828.30
services
Net increase in loans and advances to
customers
Net increase in deposits in central
bank and in interbank loans granted
Payments for claims on original
insurance contracts
Interest, handling charges and
commissions paid
Policy dividends paid
Cash paid to and for employees 105,960,255.42 106,197,141.98
Taxes paid 49,419,836.97 78,169,600.34
Cash used in other operating
40,926,540.79 45,919,666.96
activities
Subtotal of cash used in operating
1,746,782,509.65 1,847,614,237.58
activities
Net cash generated from/used in
68,792,986.11 -607,133,297.57
operating activities
2. Cash flows from investing activities:
Proceeds from disinvestments
Investment income 13,053,110.23
Net proceeds from disposal of fixed
assets, intangible assets and other 16,739,630.00 284,755.00
long-lived assets
Net proceeds from disposal of
subsidiaries or other business units
Cash generated from other investing
activities
Subtotal of cash generated from
16,739,630.00 13,337,865.23
investing activities
Payments for acquisition of fixed
assets, intangible assets and other 10,349,251.07 27,562,168.28
long-lived assets
Payments for investments
Net increase in pledged loans granted
Net payments for acquisition of
subsidiaries and other business units
Cash used in other investing
60
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
activities
Subtotal of cash used in investing
10,349,251.07 27,562,168.28
activities
Net cash generated from/used in
6,390,378.93 -14,224,303.05
investing activities
3. Cash flows from financing activities:
Capital contributions received
Including: Capital contributions by
non-controlling interests to subsidiaries
Increase in borrowings obtained 1,251,964,962.71 1,076,579,133.19
Net proceeds from issuance of bonds
Cash generated from other financing
33,400,956.90 109,000,000.00
activities
Subtotal of cash generated from
1,285,365,919.61 1,185,579,133.19
financing activities
Repayment of borrowings 1,238,924,743.47 459,900,000.00
Payments for interest and dividends 22,589,892.53 41,274,221.49
Including: Dividends paid by
subsidiaries to non-controlling interests
Cash used in other financing
159,238,064.51 129,018,017.46
activities
Subtotal of cash used in financing
1,420,752,700.51 630,192,238.95
activities
Net cash generated from/used in
-135,386,780.90 555,386,894.24
financing activities
4. Effect of foreign exchange rate
326,302.82 -3,043,048.94
changes on cash and cash equivalents
5. Net increase in cash and cash
-59,877,113.04 -69,013,755.32
equivalents
Add: Cash and cash equivalents,
254,251,911.75 533,995,466.41
beginning of the period
6. Cash and cash equivalents, end of the
194,374,798.71 464,981,711.09
period
6. Cash Flow Statement of the Company as the Parent
Unit: RMB
Item H1 2018 H1 2017
1. Cash flows from operating activities:
Proceeds from sale of commodities
and rendering of services
61
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Tax rebates
Cash generated from other operating
115,499,945.32 154,225,696.31
activities
Subtotal of cash generated from
115,499,945.32 154,225,696.31
operating activities
Payments for commodities and
services
Cash paid to and for employees 715,331.00 3,019,607.81
Taxes paid 3,260.00
Cash used in other operating
140,718,960.55 39,565,549.57
activities
Subtotal of cash used in operating
141,434,291.55 42,588,417.38
activities
Net cash generated from/used in
-25,934,346.23 111,637,278.93
operating activities
2. Cash flows from investing activities:
Proceeds from disinvestments 5,000,000.00
Investment income 3,214,180.81 13,053,110.23
Net proceeds from disposal of fixed
assets, intangible assets and other 25,300.00
long-lived assets
Net proceeds from disposal of
subsidiaries or other business units
Cash generated from other investing
activities
Subtotal of cash generated from
8,214,180.81 13,078,410.23
investing activities
Payments for acquisition of fixed
assets, intangible assets and other 105,000.00
long-lived assets
Payments for investments
Net payments for acquisition of
subsidiaries and other business units
Cash used in other investing
activities
Subtotal of cash used in investing
105,000.00
activities
Net cash generated from/used in
8,214,180.81 12,973,410.23
investing activities
3. Cash flows from financing activities:
Capital contributions received
62
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Increase in borrowings obtained
Net proceeds from issuance of bonds
Cash generated from other financing
activities
Subtotal of cash generated from
financing activities
Repayment of borrowings 100,000,000.00
Payments for interest and dividends 3,258,028.47 17,546,002.15
Cash used in other financing
activities
Sub-total of cash used in financing
3,258,028.47 117,546,002.15
activities
Net cash generated from/used in
-3,258,028.47 -117,546,002.15
financing activities
4. Effect of foreign exchange rate
changes on cash and cash equivalents
5. Net increase in cash and cash
-20,978,193.89 7,064,687.01
equivalents
Add: Cash and cash equivalents,
27,448,820.30 8,409,271.75
beginning of the period
6. Cash and cash equivalents, end of the
6,470,626.41 15,473,958.76
period
7. Consolidated Statements of Changes in Owners’ Equity
H1 2018
Unit: RMB
H1 2018
Equity attributable to owners of the Company as the parent
Other equity Non-co
Other Total
Item instruments Less: ntrollin
Share Capital compre Specific Surplus General Retaine owners’
Treasur g
Prefer Perpet equity
capital reserves hensive reserve reserves reserve d profits
y shares interests
red ual Other
income
shares bonds
505,42 1,027,7 1,619,6 3,602,4
1. Balances as of 256,822 169,714 192,647
5,000. 94,897. 31,324. 90,760.
end of prior year ,373.42 .39 ,450.61
00 79 19 40
Add: Adjustments
for changed
accounting
policies
63
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Adjustments for
corrections of
previous errors
Adjustments for
business
combinations
involving
enterprises under
common control
Other
adjustments
2. Balances as of 505,42 1,027,7 1,619,6 3,602,4
256,822 169,714 192,647
beginning of the 5,000. 94,897. 31,324. 90,760.
,373.42 .39 ,450.61
year 00 79 19 40
3. Increase/
decrease in the -37,353, -17,662, -55,016,
period (“-” for 596.93 549.28 146.21
decrease)
3.1 Total
-15,299, -17,662, -32,962,
comprehensive
762.79 549.28 312.07
income
3.2 Capital
increased and
reduced by owners
3.2.1
Ordinary shares
increased by
shareholders
3.2.2 Capital
increased by
holders of other
equity instruments
3.2.3
Share-based
payments included
in owners’ equity
3.2.4 Other
3.3 Profit -22,053, -22,053,
distribution 834.14 834.14
3.3.1
Appropriation to
surplus reserves
3.3.2
64
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Appropriation to
general reserve
3.3.3
Appropriation to -22,053, -22,053,
owners (or 834.14 834.14
shareholders)
3.3.4 Other
3.4
Carryforwards
within owners’
equity
3.4.1 Increase
in capital (or share
capital) from
capital reserves
3.4.2 Increase
in capital (or share
capital) from
surplus reserves
3.4.3 Surplus
reserves used to
make up losses
3.4.4 Other
3.5 Specific
reserve
3.5.1
Withdrawn for the
period
3.5.2 Used
during the period
3.6 Other
505,42 1,601,9 3,547,4
4. Balances as of 256,822 169,714 192,647 990,441
5,000. 68,774. 74,614.
end of the period ,373.42 .39 ,450.61 ,300.86
00 91 19
H1 2017
Unit: RMB
H1 2017
Equity attributable to owners of the Company as the parent Non-co
Other equity Other ntrollin Total
Item Less:
Share instruments Capital compre Specific Surplus General Retaine g owners’
Treasur
capital reserves hensive reserve reserves reserve d profits interest equity
Prefer Perpet Other y shares
income s
65
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
red ual
shares bonds
505,42 1,027,7 1,618,3 3,598,7
1. Balances as of 256,822 169,714 190,275
5,000. 03,010. 19,827. 14,997.
end of prior year ,373.42 .39 ,071.84
00 59 16 40
Add: Adjustments
for changed
accounting
policies
Adjustments for
corrections of
previous errors
Adjustments for
business
combinations
involving
enterprises under
common control
Other
adjustments
2. Balances as of 505,42 1,027,7 1,618,3 3,598,7
256,822 169,714 190,275
beginning of the 5,000. 03,010. 19,827. 14,997.
,373.42 .39 ,071.84
year 00 59 16 40
3. Increase/
decrease in the 2,372,3 91,887. 1,311,4 3,775,7
period (“-” for 78.77 20 97.03 63.00
decrease)
3.1 Total
18,637, 16,589, 35,227,
comprehensive
865.97 946.38 812.35
income
3.2 Capital
increased and
reduced by owners
3.2.1
Ordinary shares
increased by
shareholders
3.2.2 Capital
increased by
holders of other
equity instruments
3.2.3
Share-based
66
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
payments included
in owners’ equity
3.2.4 Other
3.3 Profit 2,372,3 -18,545, -15,278 -31,452,
distribution 78.77 978.77 ,449.35 049.35
3.3.1
2,372,3 -2,372,3
Appropriation to
78.77 78.77
surplus reserves
3.3.2
Appropriation to
general reserve
3.3.3
Appropriation to -16,173, -15,278 -31,452,
owners (or 600.00 ,449.35 049.35
shareholders)
3.3.4 Other
3.4
Carryforwards
within owners’
equity
3.4.1 Increase
in capital (or share
capital) from
capital reserves
3.4.2 Increase
in capital (or share
capital) from
surplus reserves
3.4.3 Surplus
reserves used to
make up losses
3.4.4 Other
3.5 Specific
reserve
3.5.1
Withdrawn for the
period
3.5.2 Used
during the period
3.6 Other
4. Balances as of 505,42 256,822 169,714 192,647 1,027,7 1,619,6 3,602,4
end of the period 5,000. ,373.42 .39 ,450.61 94,897. 31,324. 90,760.
67
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
00 79 19 40
8. Statements of Changes in Owners’ Equity of the Company as the Parent
H1 2018
Unit: RMB
H1 2018
Other equity instruments Other
Less: Total
Item Share Capital comprehe Specific Surplus Retaine
Preferre Perpetu Treasury owners’
capital Other reserves nsive reserve reserves d profits
d shares al bonds shares equity
income
1. Balances as of 505,425, 250,531,4 192,647,4 752,525 1,701,129
end of prior year 000.00 82.00 50.61 ,141.94 ,074.55
Add: Adjustments
for changed
accounting
policies
Adjustments for
corrections of
previous errors
Other
adjustments
2. Balances as of
505,425, 250,531,4 192,647,4 752,525 1,701,129
beginning of the
000.00 82.00 50.61 ,141.94 ,074.55
year
3. Increase/
decrease in the -7,446,7 -7,446,72
period (“-” for 28.09 8.09
decrease)
3.1 Total
1,650,9 1,650,921
comprehensive
21.91 .91
income
3.2 Capital
increased and
reduced by owners
3.2.1
Ordinary shares
increased by
shareholders
3.2.2 Capital
increased by
holders of other
equity instruments
68
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
3.2.3
Share-based
payments included
in owners’ equity
3.2.4 Other
3.3 Profit -9,097,6 -9,097,65
distribution 50.00 0.00
3.3.1
Appropriation to
surplus reserves
3.3.2
Appropriation to -9,097,6 -9,097,65
owners (or 50.00 0.00
shareholders)
3.3.3 Other
3.4
Carryforwards
within owners’
equity
3.4.1 Increase
in capital (or share
capital) from
capital reserves
3.4.2 Increase
in capital (or share
capital) from
surplus reserves
3.4.3 Surplus
reserves used to
make up losses
3.4.4 Other
3.5 Specific
reserve
3.5.1
Withdrawn for the
period
3.5.2 Used
during the period
3.6 Other
4. Balances as of 505,425, 250,531,4 192,647,4 745,078 1,693,682
end of the period 000.00 82.00 50.61 ,413.85 ,346.46
H1 2017
69
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Unit: RMB
H1 2017
Other equity instruments Other
Less: Total
Item Share Capital comprehe Specific Surplus Retaine
Preferre Perpetu Treasury owners’
capital Other reserves nsive reserve reserves d profits
d shares al bonds shares equity
income
1. Balances as of 505,425, 250,531,4 190,275,0 747,347 1,693,578
end of prior year 000.00 82.00 71.84 ,332.97 ,886.81
Add: Adjustments
for changed
accounting
policies
Adjustments for
corrections of
previous errors
Other
adjustments
2. Balances as of
505,425, 250,531,4 190,275,0 747,347 1,693,578
beginning of the
000.00 82.00 71.84 ,332.97 ,886.81
year
3. Increase/
decrease in the 2,372,378 5,177,8 7,550,187
period (“-” for .77 08.97 .74
decrease)
3.1 Total
23,723, 23,723,78
comprehensive
787.74 7.74
income
3.2 Capital
increased and
reduced by owners
3.2.1
Ordinary shares
increased by
shareholders
3.2.2 Capital
increased by
holders of other
equity instruments
3.2.3
Share-based
payments included
in owners’ equity
3.2.4 Other
70
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
3.3 Profit 2,372,378 -18,545, -16,173,6
distribution .77 978.77 00.00
3.3.1
2,372,378 -2,372,3
Appropriation to
.77 78.77
surplus reserves
3.3.2
Appropriation to -16,173, -16,173,6
owners (or 600.00 00.00
shareholders)
3.3.3 Other
3.4
Carryforwards
within owners’
equity
3.4.1 Increase
in capital (or share
capital) from
capital reserves
3.4.2 Increase
in capital (or share
capital) from
surplus reserves
3.4.3 Surplus
reserves used to
make up losses
3.4.4 Other
3.5 Specific
reserve
3.5.1
Withdrawn for the
period
3.5.2 Used
during the period
3.6 Other
4. Balances as of 505,425, 250,531,4 192,647,4 752,525 1,701,129
end of the period 000.00 82.00 50.61 ,141.94 ,074.55
III. Company Profiles
Foshan Huaxin Packaging Co., Ltd. (hereinafter referred to as the Company) was promoted by Foshan Huaxin Development Co.,
Ltd., as a main sponsor, under approval of People’s Government of Guangdong Province with YBH (1999) No. 297 document and
Economic System Reform Committee of Guangdong Province with YTG (1999) No. 032 document, and jointly invested by seven
shareholders such as Foshan Municipal Investment General Corporation, Foshan Xinhui Industrial Development Co., Ltd., China
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Packaging General Corporation, China Material Development & Investment General Corporation, Guangdong Technical Reforming
& Investment Co., Ltd., China Chemistry & Light Industry General Corporation, and Foshan Light Industry Company by promotion
with total share capital of RMB290,000,000 at par value of RMB1 per share. The Company is joint-stock company who was
registered in Administration Bureau for Commerce & Industry of Guangdong Province on June 21, 1999. (Business License No.
40000000005147). In the year of 2000, the Company successfully placed domestically listed foreign shares (B shares) amounting to
149,500,000 by mean of private placing, which was listed in Shenzhen Stock Exchange for trade. After offering, the Company’s total
share capital was increased to RMB439,500,000.00. In June 2007, the Company distributed dividends of 65,925,000 shares, thus, the
total share capital was changed into RMB505,425,000.00.
As at 30 June 2018, the Company accumulatively issued 505,425,000 shares in number and the registered capital stood at
RMB505,425,000 and the registered address: 2/F, Block 7, No. 3 Keyang Road, Luoge Park, Chancheng Economic Development
Zone, Nanzhuang Town, Chancheng District, Foshan, Guangdong Province, and the office address of headquarter is 2/F, Block 7, No.
3 Keyang Road, Luoge Park, Chancheng Economic Development Zone, Nanzhuang Town, Chancheng District, Foshan, Guangdong
Province, of which the parent company is Foshan Huaxin Development Co., Ltd. and the ultimate actual controller is China
Chengtong Holding Group Co., Ltd.
The Company is in the industry of papermaking, paper packaging and printing, and mainly manufactures (operated by subsidiary
companies under the Company) and sells packaging materials, and packaging products, materials for decoration and aluminum and
plastic compound materials; sells and maintains package machinery; invests in industry in terms of package and printing. Main
products include high-grade coated white cardboard and color packages printing products.
6 subsidiaries were included in the consolidated financial statements of the current period, which are as follows:
The Company’s
Voting stock
Subsidiary Type Tier shareholding
percentage (%)
percentage (%)
Zhuhai Hongta Renheng Packaging Co., Ltd. Majority-owned Level 1 41.9653% 41.9653%
subsidiary
Zhuhai Huafeng Paper Co., Ltd. Wholly-owned Level 2 100% 100%
subsidiary
Zhuhai Golden Pheasant Chemical Co., Ltd. Majority-owned Level 2 51% 51%
subsidiary
Huaxin (Foshan) Color Printing Co., Ltd. Wholly-owned Level 1 100% 100%
subsidiary
Kunshan Foshan Color Packaging Printing Co., Ltd. Wholly-owned Level 1 100% 100%
subsidiary
Zhejiang Hongta Renheng Packaging Technology Co., Wholly-owned Level 1 100% 100%
Ltd subsidiary
Notes to the controlling executed by the Company on Zhuhai Hongta Renheng Packaging Co., Ltd. (hereinafer
referred to as “Hongta Renheng”):
On 30 June 2009, the Company required 40.176% equities of Hongta Renheng through capital increase and share expansion method.
There were 5 members of the Board of Directors of Hongta Renheng, of which 3 of them were sent by the Company, 1 from Yunnan
Hehe Group Co., Ltd. (before name change: Yunnan Hongta Group Co., Ltd.) and 1 from Renheng Industrial Co., Ltd.. The
Chairman (legal representative) was appointed from the Company with the GM and the CFO were both the expatriate personnel from
the Company. The Company could control the routine production and operating activities of Hongta Renheng and thus from July
2009, Hongta Renheng began to be included in the consolidated financial statement scope of the Company. On 1 February 2010,
Hongta Renheng completed the industrial and commercial alternation procedures of the capital increase with the equities of Hongta
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Renheng that held by the Company increased to 41.9653%, and at the same time according to the resolution of the Board of Directors
held on 25 February 2010 by Hongta Renheng, the contracts, articles of Hongta Renheng had altered with the Board members
changed from 5 to 7 Directors, of which 4 of them (originally were 3) sent by the Company. 2 of them by Yunnan Hehe Group
(orginally was 1), 1 of them by Renheng Industrial Co., Ltd. and none of them by Dragon State International Limited. The Company
still could decide the financial and operating policies of Hongta Renheng as well as could execute the control, thus would continue to
include Hongta Renheng into the consoildated scope of the Company.
IV. Basis for the Preparation of Financial Statements
1. Preparation Basis
With the going-concern assumption as the basis and based on transactions and other events that actually occurred,
the Group prepared financial statements in accordance with issued by the Ministry of Finance and with each specific accounting standard, the
Application Guidance of Accounting Standards for Business Enterprises, the Interpretation of Accounting
Standards for Business Enterprises and other regulations (hereinafter jointly referred to as “the Accounting
Standards for Business Enterprises”, “China Accounting Standards” or “CAS”), as well as the Rules for
Preparation Convention of Disclosure of Public Offering Companies No.15 – General Regulations for Financial
Reporting by China Securities Regulatory Commission (revised in 2014).
2. Continuation
The Company evaluated the processes constantly operation ability with 12 months since the Reporting Period.
There was no significant suspect event to the continuation. Thus, the financial statement was prepared on the base
of the assumption of continuation
V. Important Accounting Policies and Estimations
Indication of specific accounting policies and estimations:
Naught
1. Statement for Complying with the Accounting Standard for Business Enterprise
The financial statements for the Reporting Period prepared by the Company are in compliance with the
requirements of the accounting standard for business enterprise, and have reflected the Company’s financial status,
operating results and cash flows in an accurate and complete way.
2. Fiscal Period
The fiscal year of the Company is a solar calendar year, which is from January 1st to December 31st.
3. Operating Cycle
The operating cycle of the Company is 12 months.
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
4. Standard Currency of Accounts
The Company adopts Renminbi as a standard currency of accounts.
5. Accounting Process of Business Combinations under the Same Control and not under the Same Control
(1) Each Transaction Items, Conditions and Economy Influence in Confirm with the Following One or
Several Conditions, when Realizing Enterprise Combination by Steps. Several Transaction Events were
Considered as a Package Deal and Conducted Accounting Method
1) The transaction was set up in the same time or had considered the influence to each others:
2) The transaction only stand as a whole, a perfect commercial result can be arrived.
3) A transaction incurred depends on at least one transaction occurred;
4) A transaction is not economical, however, together with other transaction are economical.
(2) Business Combination Under the Same Control
The assets and liabilities that the combining party obtains in a business combination shall be measured on the
basis of their carrying amount in the combined party (including goodwill formed from the final control party
purchase combined party) combing party on the combining date. As for the balance between the carrying
amount of the net assets obtained by the combining party and the carrying amount of the consideration paid by it
(or the total par value of the shares issued), the additional paid-in capital shall be adjusted. If the additional paid-in
capital is not sufficient to be offset, the retained earnings shall be adjusted.
In the event that the contingent consideration exists and the accrued liabilities or assets need to be recognized, the
difference between the accrued liabilities or assets and the settlement amount of subsequent contingent
consideration shall adjust the capital surplus (capital premium or stock premium), and if the capital surplus is not
sufficient, adjust the retained earnings.
Where the corporate merger and acquisition is realized through multiple transactions, if these transactions belong
to a package transaction, each transaction shall be accounted as a transaction to obtain the right to control; if these
transactions do not belong to a package transaction, on the date the right to control is obtained, the difference
between the initial investment costs of the long-term equity investment and the carrying value of long-term equity
investment before the M&A plus the carrying value of the new consideration paid to further get the shares on the
date of M&A shall be charged against the capital surplus, and if the capital surplus is insufficient, the difference
shall be charged against the remaining earnings. For the equity investment held before the date of M&A, the other
comprehensive earnings accounted for using the equity method or recognized with the financial tool and
accounted for and recognized using the measurement criteria shall not be accounted, until the investment is
disposed, at which time, the investment shall be accounted on the same basis as the investee directly disposes
related assets or liabilities; the changes to the owner’s equity in the investee’s net assets accounted and recognized
using the equity method other than the net profit or losses, other comprehensive earnings and profit distribution,
shall not be accounted, until the investment is disposed, at which time, it shall be carried over to the current profits
or losses.
(3) Business Combination not Under the Same Control
The “acquisition date” refers to the date on which the Company actually obtains the control on the acquiree, that is,
the date on which acquiree’s net asset or the right of control of production decision are transferred to the
Company. The right of control is thought to be transferred when the following conditions are simultaneously
satisfied:
① The contract or agreement of business combination has been approved by the internal authority of the
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Company.
② The events of business combination in need of the approval of relevant national authorities have been
approved.
③ The necessary property rights transfer has been made.
④ The Company has paid the most of the combination price, and the Company is able to pay the rest of it with
plans.
⑤ The Company actually has controlled the finance and operation policy of the acquire, enjoying the
corresponding benefits and taking corresponding risks.
The Company shall, on the acquisition date, measure the assets given and liabilities incurred or assumed by an
enterprise for a business combination in light of their fair values, and shall record the balances between them and
their carrying amounts into the profits and losses at the current period.
The Company shall recognize the positive balance between the combination costs and the fair value of the
identifiable net assets it obtains from the acquiree as business reputation. The Company shall record, upon recheck,
the negative balance between the combination costs and the fair value of the identifiable net assets it obtains from
the acquiree into the profit and loss of the current period.
Where a merger of enterprises not under the same control is realized through multiple transactions step by step, if
these transactions belong to a package transaction, each transaction shall be accounted as a transaction to obtain
the right to control; if these transactions do not belong to a package transaction, and the equity investment held
before the date of M&A is accounted using the equity method, the sum of the carrying value of the equity
investment in the acquiree held before the date of the acquisition, plus the new investment costs on the date of the
acquisition shall be the initial investment costs of the investment; other comprehensive earnings of the equity
investment held before the date of acquisition accounted and recognized using the equity method shall be
accounted on the same basis as the investee directly disposes relevant assets or liabilities when the investment is
disposed. If the equity investment held before the date of M&A is recognized using the financial tool and
accounted using the measurement criterion, the sum of the fair value of the equity investment on the date of M&A
plus the new investment costs shall be the initial investment costs at the date of M&A. The difference between the
fair value and carrying value of the held equity and changes to the accumulated fair value charged against other
comprehensive earnings shall be fully converted the current investment earnings at the date of M&A.
(4) Relevant Costs Incurred from the Business Combination
The intermediary fees (fees for audit, legal and evaluation & consulting services, etc.) and other relevant
management expenses incurred on the acquirer for the business combination shall be recorded into current gains
and losses when incurred. The trading expenses arising from the acquirer's issuing equity securities or debt
securities as the combination consideration shall be included in the initially recognized amount of the equity
securities or debt securities.
6. Methods for Preparing Consolidated Financial Statements
(1) Consolidation Scope
The scope of consolidated financial statements shall be confirmed based on the control. All subsidiaries (including
individual entities controlled by the Company) of the Company shall be included into the consolidated financial
statement.
(2) Consolidation Process
The Company based on the financial statements of itself and its subsidiaries, in line with other relevant
information, prepare the consolidated financial statements. The consolidated financial statements the Company
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
prepare was considered the whole enterprise group as a accountant entity, in line with the requirement of
presentation, recognition and calculation in ASBE and a uniform accountant policies, reflect the financial situation,
operation results and cash flows of the whole enterprise group.
The accounting policies and accounting period adopted by the subsidiaries that are included into the scope of
consolidated financial statement consistent with those the Company adopts. If the accounting policies and
accounting period adopted by a subsidiary are different from those adopted by the Company, necessary
adjustments shall be made to the financial statements under the accounting policies and accounting period adopted
by the Company.
Consolidated financial statement shall be prepared by the parent company after the effects of the internal
transactions between the Company and its subsidiaries and between its subsidiaries themselves on the
consolidated balance sheets, consolidated income statement, consolidated cash flow and consolidated statement of
change in owners’ equity are offset. If standing at the point of view of enterprise group consolidated financial
statement, and its recognition of common trade differ from the accounting entity of Company or subsidiary, adjust
it from the point of view of the enterprise group.
Minority shareholders’ portions of equities and income in subsidiaries shall be separately stated respectively under
owners’ equity in the consolidated balance sheet and net profit in the consolidated income statement. For the
deficit of current period exceeding the share in the beginning of owner’s equity, the balance shall offset against
the minority shareholder’s equity.
For subsidiary obtained by business combination under same control, adjust the financial statement on the base of
book value of assets, liabilities (including goodwill formed by the financial control party purchasing the
subsidiary) in financial statement of final control party.
For subsidiary obtained by business combination not under same control, adjust the financial statement on the
base of identifiable net assets on purchase date
1.1. Increasing the subsidiaries or business
During the Reporting Period, for the added subsidiary companies for business combination under the same control,
shall adjust the beginning balance of the consolidated balance sheet, and shall involve the incomes, expenses and
profits of the subsidiary companies incurred from the beginning of the current period to the end of reporting year
into consolidated income statement; and shall include the cash flow of the subsidiary companies from the
beginning of the current period to the Reporting Period into the consolidated cash flow statement. Meanwhile,
relevant items in the statements shall be compared and adjusted with the reporting subject after the consolidation
being regarded to have always existed since the control party start to control.
Owning to the reasons such as the additional investment, for the subsidiaries could execute control on the
investees under the same control, should be regard as the individuals participated in the combination that to
execute adjustment by existing as the current state when the ultimate control party began to control. For the equity
investment held before acquiring the control right of the combined parties, the confirmed relevant gains and losses,
other comprehensive income and the changes of other net assets since the date of the earlier one between the date
when acquiring the original equity right and the date when the combine parties and combined ones were under the
same control to the combination date, should be respectively written down and compared with the beginning
balance of retained earnings or the current gains and losses during the statement period.
During the Reporting Period, for the added subsidiary companies for business combination note under the same
control, shall adjust the beginning balance of the consolidated balance sheet, and shall involve the incomes,
expenses and profits of the subsidiary companies incurred from purchase date to the end of reporting year into
consolidated income statement; and shall include the cash flow of the subsidiary companies from purchase date to
the Reporting Period into the consolidated cash flow statement.
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Owning to the reasons such as the additional investment that the subsidiaries could execute the control of the
investees under different control, the Company shall re-measure the equity interests in the acquiree held by it
before the acquisition date according to the equity interests’ fair value on the acquisition date. And the difference
between the fair value and the book value is recorded into current investment gains. Where the equity interests in
the acquiree held by the Company which involved with the other comprehensive profits and changes of the other
owners’ equities except for the net gains and losses, other comprehensive profits as well as the profits distribution
under the measurement of equity method before the acquisition date involves other comprehensive incomes, the
relevant other comprehensive incomes and the changes of the other owners’ equities are restated as investment
gains for the period which the acquisition date belongs to, with the exception of the other comprehensive incomes
occurred because of the changes of net liabilities or net assets of the defined benefit pension plans be re-measured
for setting by the investees.
1.2. Disposal of the subsidiaries or business
1). General disposing method
The consolidated cash flow statement shall include the cash flow from the beginning of the current period to the
settlement date.
Where the Company loses the control over a former subsidiary due to disposal of some equity investments or
other reasons, the Company re-measures the remaining equity investments after the disposal according to the fair
value on the date when the control ceases. The consideration obtained in the equity disposal, plus the fair value
of the remaining equities, less the Company’s share of net assets in the former subsidiary calculated from the
acquisition date according to the former shareholding ratio, is recorded into the investment gains for the period
when the control ceases. Other comprehensive incomes in relation to the equity investments in the former
subsidiary are restated as investment gains for the period when the control ceases. Where the equity interests in
the subsidiary held by the Company which involved with the other comprehensive profits and changes of the other
owners’ equities except for the net gains and losses, other comprehensive profits as well as the profits distribution
when losing control, the relevant other comprehensive incomes and the changes of the other owners’ equities are
restated as investment gains for current period , with the exception of the other comprehensive incomes occurred
because of the changes of net liabilities or net assets of the defined benefit pension plans be re-measured for
setting by the investees.
2). Step by step disposing the subsidiaries
Where the Company losses control on its original subsidiaries due to step by step disposal of equity investments
through multiple transactions, all the transaction terms, conditions and economic impact of the disposal of
subsidiaries’ equity investment are in accordance with one or more of the following conditions, which usually
indicate the multiple transactions should be considered as a package deal for accounting treatment:
A. The transaction was set up in the same time or had considered the influence to each others;
B. The transaction only stand as a whole, a perfect commercial result can be arrived.
C. A transaction incurred depends on at least one transaction occurred;
D. A transaction is not economical, however, together with other transaction are economical.
When disposing each transaction of the Company losses control on its subsidiaries due to disposal of equity
investments belonging to a package deal, should be considered as a transaction and conduct accounting treatment.
However, Before losing control, every disposal cost and corresponding net assets balance of subsidiary of disposal
investment are confirmed as other comprehensive income in consolidated financial statements, which together
transferred into the current profits and losses in the loss of control , when the Company losing control on its
subsidiary.
When disposing each transaction of the Company losses control on its subsidiaries due to disposal of equity
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
investments not belonging to a package deal, before which losing the control right, should execute the accounting
disposal according to the partly dispose the equity investment of the subsidiaries under the situation not losing the
control right; when losing the control right, should execute accounting disposal according to the general disposing
method disposal of the subsidiaries.
3) Purchasing minority equities of the subsidiaries
If there is any difference between the newly obtained long-term equity investment due to the Company’s
acquisition of minority interests and the Company’s share of identifiable net assets which began to be calculated
from the purchase date (or the combination date) in the subsidiary calculated according to the newly increased
shareholding ratio, the stock premium under capital reserve in the balance sheet shall be adjusted according to the
said difference. If the stock premium under capital reserve is not sufficient to be offset, the retained profit is
adjusted.
4) Disposing the equity investment of the subsidiaries under the situation not losing the control right
The differences between the disposal income due to the Company’s disposal of some equity investments in a
subsidiary without losing the control over the subsidiary and the Company’s share of net assets in the subsidiary
calculated according to the disposed long-term equity investments, the stock premium under capital reserve in the
balance sheet shall be adjusted according to the said difference. If the stock premium under capital reserve is not
sufficient to be offset, the retained profit is adjusted.
7. Classification of Joint arrangements and Accounting Treatment of Joint Operations
8. Recognition Standard for Cash and Cash Equivalents
When preparing the cash flow statement, the term “cash” refers to cash on hand and deposits that are available for
payment at any time. The term “cash equivalents” refers to short-term ( within 3 months from the purchase date)
and highly liquid investments that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of change in value.
9. Foreign Currency Businesses and Translation of Foreign Currency Financial Statements
As for a foreign currency transaction, the amount in the foreign currency shall be translated into the amount in the
Renminbi at the spot exchange rate of the transaction date.
On balance sheet date, the foreign currency monetary items shall be translated as the spot exchange rate on the
balance sheet date, the balance occurred thereof shall be recorded into the profits and losses at the current period
except that the balance of exchange arising from foreign currency borrowings for the purchase and construction or
production of assets eligible for capitalization shall be measured in the light of capitalization principle. The
foreign currency non-monetary items measured at the historical cost shall still be translated at the spot exchange
rate on the transaction date, of which the amount of functional currency shall not be changed.
The foreign currency non-monetary items measured at the fair value shall be translated at the spot exchange rate
on the confirming date of fair value, of which the balance of exchange shall be included into the profit and loss of
the current period or capital reserve. If it belongs available for sale foreign currency non-monetary items, the
difference form of exchange record into other comprehensive income.
10. Financial Instruments
Financial instruments include financial assets and liabilities and equity instruments.
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
1. Categorization of Financial Instruments
The Company divides the financial instruments pursuant to the purpose to acquire the said financial assets or
undertake the financial liabilities: the financial assets and liabilities which are measured at their fair values and of
which the variation is included in the current profits and losses, including transactional financial assets and
liabilities and the designated financial assets and liabilities which are measured at their fair values and of which
the variation is included in the current profits and losses; the investments which will be held to their maturity;
accounts receivable; financial assets available for sale; and other financial liabilities.
2. Recognition Basis and Calculation Method of Financial Instrument
2.1. Financial assets (liabilities) measured by fair value and the changes included in the current gains and losses
The financial assets (or financial liabilities) that are measured by fair value with its change s recognized in the
current profits and losses, including the transactional financial assets or financial liability and the financial assets
or financial liabilities that are directly designated to be measured by fair value with its change recognized in the
current losses and profits.
Transactional financial assets or financial liabilities mean the financial assets or financial liabilities that meet any
one of the following conditions:
1). The purpose of obtaining the financial assets or financial liabilities is to sell, repurchase or redeem it in a short
time;
2). It is a part of the identifiable combination of financial instrument that the company manages together and there
is objective evidence of a recent pattern of short-term profit making;
3). It belongs to the derivative financial instrument, but is designated as the derivative instrument of valid
arbitrage instrument or belongs to the derivation instrument of financial guarantee contract, or it is connected to
the equity instrument investment for which there is no quotation in active market and its fair value cannot be
reliably measured, the derivative tool that shall be settled through delivering the equity instrument excluded.
Only if one of the following conditions is met, could the financial assets or financial assets be designated as the
financial assets or financial liability that shall be measured by fair value with changes recognized in profit or loss
in the period:
1). The designation is able to eliminate or obviously reduce the discrepancies in the recognition or measurement
of relevant gains or losses arising from the different basis of measurement of the financial assets or financial
liability;
2). The official written document of risk management or investment strategies of the enterprise concerned have
described that the said combination of financial assets, the combination of financial liabilities, or the combination
of financial assets and financial liabilities will be managed and evaluated on the basis of their fair values and will
be reported to the key management personnel.
3). The mixed instruments include one or more embedded derivative instrument, unless the embedded derivative
instrument does not materially change the cash flow of the mixed instrument, or it is obvious that the embedded
instrument shall not be split from the relevant mixed instrument;
4). The mixed instrument that include the embedded derivative instrument that shall be split but cannot be
separately measured when it is obtained or on the subsequent date of balance sheet.
For the financial assets or financial liabilities that is measured by fair value with its change recognized in the
current profits or losses, the company will use the fair value (deducting the cash dividend that is announced but
not issued, or the bond interest that is due but has not be claimed) as the initially recognized amount, and the
related transaction costs shall be recognized in the current profits and losses. The interest or cash dividend
obtained during the holding period shall be recognized as the investment earning, and at the end of the period, the
change in fair value shall be recognized in the current profits and losses. At the time of disposal, the difference
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
between its fair value and the initially recognized amount shall be recognized as the investment earnings, and at
the same time, the change in fair value shall be recognized as the profit or loss.
2.2. Accounts receivable
Accounts receivable refers to the non-derivative financial assets for which there is no quoted price in the active
market and of which the repo amount is fixed or determinable.
The creditor’s rights arising from selling goods or providing service by the Company and other creditor’s rights to
other enterprises held by the company that are not quoted in an active market, including accounts receivable, notes
receivable, other receivables, long-term receivables, etc., the contract or agreement price should be taken as the
initial recognition amount. If it has the nature of financing, it shall be recognized by present value.
Difference between the amount received and book value of the receivables shall be included into the profit or loss
of the current period upon collection or disposal.
2.3. Held-to-maturity investments
Held-to-maturity investment means those non-derivative financial assets with fixed maturity date and fixed or
determinable recoverable amount and that company has both the positive intention and the ability to hold to
maturity.
When the Company obtains the held-to-maturity investment (less the unpaid interest on bonds which has been
accrued), the sum of the fair value and related transaction costs will be treated as initial confirmation amount.
During the holding period, interest income shall be calculated in accordance with the amortized cost and the actual
interest rate and included in investment income. The actual interest rates are determined upon acquisition and
remain unchanged during the expected holding period or a shorter period if applicable. Difference between the
proceeds received and book value of the investment is charged to investment income.
If the amount of other type of financial assets that are acquired through the disposal or reclassification of
held-to-maturity investments is greater than the total amount of all held-to-maturity investments held by the
Company prior to sales or reclassification, after such disposal or reclassification, the remaining held-to-maturity
investments shall be reclassified into available-for-sale financial assets; on the date of reclassification, the
difference between book value of the investment and the fair value shall be charged to investment income except
the following circumstances:
1). The sales date or reclassification date is close to the maturity date or redemption date (e.g., with three months
prior to the maturity date) and the change of market interest rate didn't exert a great influence on the fair value of
the investment.
2). The enterprise has got back almost all the initial principal in the mode of payment as specified in the contract.
3). The sales or reclassification is resulted from an independent event which is out of the control of the enterprise,
will not occur repeatedly based on the predication and is difficult to estimate reasonably.
2.4. Available-for-sale financial assets
Available-for-sale financial assets were referred to the non-derivative financial assets available for sale, as well as
the financial assets other than the other financial asset classes in the initial recognition.
When available-for-sale financial assets are acquired, its initial amount shall be recognized at the fair value
(excluding cash dividends that have been declared but not yet distributed or bond interests that have matured but
not yet received) plus transaction expense thereof. Interest or cash dividend received in holding period were
recognized as investment income. Profits or losses from the change in fair value of available-for-sale financial
assets except impairment losses and translation balance form foreign monetary financial assets, directly record
into other comprehensive income. When disposing available-for-sale financial assets recorded the difference
between the price and the book value of the financial assets into investment profits or losses, meanwhile, roll out
the disposal part of the accumulative amount of change in fair value originally and directly recorded into other
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
comprehensive income and record into investment profits or losses.
The equity instrument investment without offer and its fair value without reliable calculation, and derivative
financial assets linked to and settled by the equity instruments, measured at cost.
2.5. Other financial liabilities
Other financial liabilities shall be initially recognized at fair value plus transaction costs. The subsequent
measurement shall be made by adopting amortized costs.
3. Recognition and Measurement of Transfer of Financial Assets
Where an enterprise has transferred nearly all of the risks and rewards relating to the ownership of the financial
asset to the transferee, it shall stop recognizing the financial asset. If it retains nearly all of the risks and rewards
relating to the ownership of the financial asset, it shall not stop recognizing the financial asset.
Substance over form philosophy should be adopted to determine whether the transfer of a financial asset can
satisfy the conditions as described in these Standards for de-recognition of a financial asset. An enterprise shall
differentiate the transfer of a financial asset into the entire transfer and the partial transfer of financial assets. If the
transfer of an entire financial asset satisfies the conditions for stop recognition, the difference between the
amounts of the following 2 items shall recorded in the profits and losses of the current period:
(1) The carrying amount of the transferred financial asset;
(2) The aggregate consideration received from the transfer, and the accumulative amount of the changes of the fair
value originally recorded in the owner’s equities (in the event that the financial asset involved in the transfer is a
financial asset available for sale).
If the transfer of partial financial asset satisfies the conditions for stopping recognition, the carrying amount of the
entire financial asset transferred shall be allocated at their respective relevant fair value, between the portion
whose recognition has stopped and the portion whose recognition has not stopped, and the difference between the
amounts of the following 2 items:
(1) The carrying amount of the portion whose recognition has stopped;
(2) The aggregate consideration of the portion whose recognition has stopped, and the portion of the accumulative
amount of the changes in the fair value originally recorded in the owner’s equities which is corresponding to the
portion whose recognition has stopped (in the event that the financial asset involved in the transfer is a financial
asset available for sale).
The transfer of financial assets does not meet the de-recognition condition, the financial assets shall continue to be
recognized, and the consideration received will be recognized as financial liabilities.
4. Termination of Recognition of Financial Liabilities
Only when the prevailing obligations of a financial liability are relieved in all or in part may the recognition of the
financial liability be terminated in all or partly. Where the Company (debtor) enters into an agreement with a
creditor so as to substitute the existing financial liabilities by way of any new financial liability, and if the
contractual stipulations regarding the new financial liability is substantially different from that regarding the
existing financial liability, it shall terminate the recognition of the existing financial liability, and shall at the same
time recognize the new financial liability.
Where the Company makes substantial revisions to some or all of the contractual stipulations of the existing
financial liability, it shall terminated the recognition of the existing financial liability or part of it, and at the same
time recognize the financial liability after revising the contractual stipulations as a new financial liability.
Where the recognition of a financial liability is totally or partially terminated, the Company concerned shall
include into the profits and losses of the current period the gap between the carrying amount which has been
terminated from recognition and the considerations it has paid (including the non-cash assets it has transferred out
and the new financial liabilities it has assumed).
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Where the Company buys back part of its financial liabilities, it shall distribute, on the report day, the carrying
amount of the whole financial liabilities in light of the comparatively fair value of the part that continues to be
recognized and the part whose recognition has already been terminated. The gap between the carrying amount
which is distributed to the part whose recognition has terminated and the considerations it has paid (including the
non-cash assets it has transferred out and the new financial liabilities it has assumed) shall be recorded into the
profits and losses of the current period.
5. Determination of the Fair Value of Financial Assets and Financial Liabilities
As for the financial assets and liabilities in an active market, the closing quoted prices in the active market shall be
used to determine the fair values thereof. The closing quoted prices in the active market includes the quoted prices
of relevant assets and liabilities which are easy to be acquired from exchange, dealer, broker, industrial group,
pricing institution or regulatory institution regularly and which can represent the market trading that occur
actually and frequently on the basis of fair trade.
The fair value of initially obtained or derivative financial assets or borne financial liabilities shall be determined
according to the market transaction price thereof;
Where there is no active market for a financial assets and financial liabilities, the Company concerned shall adopt
value appraisal techniques to determine its fair value. When evaluating, the Company adopt the valuation
technique with sufficient useful data and supported by other information which suitable for the current situation,
choose a input in concern with the characteristics of assets or liabilities considered in relevant assets or liabilities
transaction with the market players, and as much as possible, give prior to using the relevant observable input
under the situation that, the observable input value or it is not feasible to obtain, use unobservable input value.
6. Withdrawal Method of Provision for Impairment on Financial Assets (Excluding Accounts Receivable)
Except for financial assets which are measured at their fair values and of which the variation is included in the
current profits and losses, the Company checks the book values of all other financial assets on the balance sheet
date. If there is objective evidence proving that a financial asset is impaired, an impairment provision is made.
The objective evidences of impairment provision of financial assets include but not limited to:
1. Issuer or debtor had serious financial difficulties:
2. The debtor violates the items of the contact, such as violate a treaty or overdue to repay the interest or principal,
etc;
3. The creditor considering the factors of economy or law makes concession to the debtor who had serious
financial difficulty;
4. The debtor probably may go out of business or had other financial recombination;
5. Due to the issuer had serious financial difficulty; the financial assets cannot continue to trade in the active
market;
6. The cash flow of a kind of asset in a group of financial assets decrease or not was beyond recognition, however,
after conducting the overall evaluation in line with the public data, the estimate cash flow of the group of financial
assets actually decrease and gaugeable since initial recognition, if the repay ability of the debtor steadily worsened,
or the increase of unemployment rate, the decrease in the price of guaranty or the industry downturn that the
district or country the debtor in, etc;
7. The great disadvantage change in technology, market, economy or legal environment that operation place that
issuer of equity instrument locate at, which lead to the irrecoverable of investment cost of the equity instrument
investors;
8. The fair value occurred seriously or non-transient decrease;
The specific impairment provision methods of financial assets were as follows:
(1) Provision for impairment of available-for-sale financial assets:
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On balance sheet date, the Company separately examines each available-for-sale equity instrument investment. If
the fair value of the equity instruments which invests on the balance sheet date is lower than its initial investment
cost for more than 50% (including 50%) or lower than its initial investment cost for the duration time for more
than 1 year (including 1 year), which indicates that it had occurred impairment; if the fair value of the equity
instruments which invests on the balance sheet date is lower than its initial investment cost for more than 20%
(including 20%) but not reaches at 50%, the Company will comprehensively considerate the other relevant factors
such as the price volatility etc. and will judge the equity investment whether had occurred impairment.
The aforesaid "cost" recognized in line with the initial investment cost of available for sale financial instrument
deducting principal recovered, amount amortized and the impairment losses recorded into profits or losses. The
fair value of available-for-sale equity instrument investments that do not exist in active market shall be determined
in accordance with the present value obtained from the discount of future cash flow with the present market return
of similar financial assets; the fair value of available-for-sale equity instrument investment that has provided a
quoted price in active market shall be determined in accordance with the final closing price of stock exchange,
unless the available-for-sale equity instrument investment has a restricted stock trade period. The fair value of
available-for-sale equity instrument investment with a restricted stock trade period shall be determined in
accordance with the final closing price of stock exchange less the compensation claimed by market participants
who have to bear the risk that they can't sale the equity instrument at a public market in the specified period.
Where a sellable financial asset is impaired, even if the recognition of the financial asset has not been terminated,
the accumulative losses arising from the decrease of the fair value of the owner’s equity which was directly
included shall be transferred out of the owners’ equities and recorded into the profits and losses of the current
period. The accumulative losses that are transferred out shall be the balance obtained from the initially obtained
costs of the sold financial asset after deducting the principals as taken back, the current fair value and the
impairment-related losses as was recorded into the profits and losses of the current period.
As for the sellable debt instruments whose impairment-related losses have been recognized, if, within the
accounting period thereafter, the fair value has risen and are objectively related to the subsequent events that occur
after the originally impairment-related losses were recognized, the originally recognized impairment-related losses
shall be reversed and be recorded into the profits and losses of the current period as for the impairment-related
losses incurred to a sellable equity instrument investment, should be reversed by equity when the value raised of
the equity instruments; however, the impairment-related losses incurred to an equity instrument investment for
which there is no quoted price in the active market and whose fair value cannot be reliably measured, or incurred
to a derivative financial asset which is connected with the said equity instrument and which shall be settled by
delivering the said equity instrument, may not be reversed.
(2) Impairment provision for held-to-maturity investments
If any objective evidence shows that a held-to-maturity investment has been impaired, the impairment loss shall
be recognized at the gap between its book value and the present value of its estimated future cash flow; after the
impairment provision is made, if there is any evidence proving that the value of the said held-to-maturity
investment has been restored, the impairment loss as originally recognized may be reversed and be recorded into
the profits and losses of the current period, but the reversed book value shall not be any more than the
post-amortization costs of the said held-to-maturity investment on the day of reverse under the assumption that no
provision is made for the impairment.
7. The Offset of Financial Assets and Financial Liabilities
Financial assets and financial liabilities are shown separately in balance sheet However, if they satisfy the
following conditions, shown the net amount in the balance sheet after the offset;
(1) The Company had legal rights of offsetting the recognition amount, and the legal right is executable in
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recently;
(2) The Company plans to settle at net amount, or meanwhile realize the financial assets and pay off the financial
liabilities.
8. Distinction and Relevant Handling of Financial Liabilities and Equity Instrument
In accordance with the accounting standards of financial instruments, as per the contract terms of and the
economic substance reflected by (rather than by legal form only) financial instruments such as issued preferred
stock and perpetual capital securities, based on the definition of financial liabilities and equity instrument, the
company classified financial instrument or its components as financial liabilities or equity instrument during the
initial confirmation:
1. Any Issued Financial Instrument that Meets one of the Following Conditions shall be Classified as
Financial Liabilities:
(1). Contractual obligation of delivering cash or other financial assets to other party;
(2). Contractual obligation of exchanging financial assets or financial liabilities with other party under any
potential adverse condition;
(3). Non-derivative instrument contract which must or may use the enterprise's own equity instrument for
settlement; and, the enterprise shall deliver a variable number of the enterprise'sown equity instruments pursuant
to the contract;
(4). Derivative instrument contract which must or may use the enterprise's own equity instrument for settlement,
except derivative instrument contracts which substitute a fixed number of own equity instruments for a fixed
amount of cash or other financial assets.
2. Any Issued Financial Instrument that Meets the Following Conditions shall be Classified as Equity
Instrument:
(1). The financial instrument isn't subject to contractual obligation of delivering cash or other financial assets to
other party or exchanging financial assets or financial liabilities with other party under any potential adverse
condition;
(2). Where the financial instrument must or may be settled with the enterprise's own equity instrument, if the
financial instrument is a non-derivative instrument, a contractual obligation of delivering a variable number of the
enterprise's own equity instruments for settlement is not included; if the financial instrument is a derivative
instrument, the enterprise can only settle the financial instrument by exchanging a fixed number of own equity
instruments with a fixed amount of cash or other financial assets.
3. Distinction of Financial Liabilities and Equity Instrument
A contractual obligation, the performance of which by delivering cash or other financial assets can't be avoided
unconditionally, conforms to the definition of financial liabilities. Where a financial instrument must or may use
the enterprise's own equity instrument for settlement, if it is a substitute for cash or other financial assets, it
belongs to financial liabilities; if it is for the holder of the instrument to enjoy the residual equity in the assets after
the issuer deducts all liabilities, it belongs to equity instrument.
4. Accounting Treatment Method
For a financial instrument which is classified as an equity instrument, its interest expenditure or dividend
distribution shall be deemed as the profit distribution of the issuer, its repurchase and cancellation shall be deemed
as the change in equity; transaction costs such as the service charge and commission shall be deducted from the
equity;
For a financial instrument which is classified as financial liabilities, in principle, its interest expenditure or
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
dividend distribution shall be handled as per borrowing costs; gains or losses arising from its repurchase or
redemption shall be included in current profits and losses; transaction costs such as service charge and
commission shall be included in initially measured amount of the instrument issued.
11. Accounts Receivable
(1) Bad Debt Provision for Individually Significant Accounts Receivable
Judgment basis or monetary standards of provision for bad debts An account receivable exceeds RMB10 million (including), or
of the individually significant accounts receivable another account receivable exceeds RMB5 million (including).
An impairment test shall be conducted on the account receivable
and the difference of the present value of expected future cash
flow less than its book value shall be withdrawn as the bad debt
Accounts receivable with significant single amount for which
provision and recorded into current gains/losses. Where an
bad debt provision separately accrued at the period-end
impairment test is conducted on an account receivable and no
impairment occurs, classify into relevant group and withdraw
bad debt provision.
(2) Accounts Receivable which the Bad Debt Provision is Withdrawn by Credit Risk Characteristics
Name of the group Bad debt provision method
Amounts of connected-parties within the scope of consolidation
Aging analysis method group Aging analysis method
In the groups, adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Withdrawal proportion for accounts Withdrawal proportion for other accounts
Aging
receivable receivable
1-3 months 0.00% 0.00%
4-12 months 5.00% 5.00%
1-2 years 10.00% 10.00%
2-3 years 20.00% 20.00%
Over 3 years 50.00% 50.00%
In the groups, adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, adopting other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
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(3) Accounts Receivable with an Insignificant Single Amount but for which the Bad Debt Provision is Made
Individually
There exists evidence that the Company unable to recover the
Reason of individually withdrawing bad debt provision:
account receivable in line with the original items.
At the gap between the carrying amount and the present value of
Withdrawing bad debt provision method
the estimated future cash flow (lower) of the account receivable
12. Inventory
Is the Company subject to any disclosure requirements for special industries?
No.
1. Category
Inventory was referred to the finished goods or commodities for sale, products in the process, materials in
production or providing services, etc. Mainly include: raw materials, revolving materials, merchandise inventory,
goods in process, goods sent out, goods in outside processing and etc.
2. Pricing Method for Outgoing Inventories
When obtaining, the cost was considered as the initial calculation, including purchase cost, conversion cost and
other cost. Adopting the weighted average method for pricing when outgoing inventories according to the end of
the month at a time
3. Inventory System for Inventories:
Inventory system: Perpetual inventory system
4. Amortization Method of the Low-value Consumption Goods and Packing Articles
One-off amortization method for the low-value consumption goods;
One-off amortization method for the packaging articles; and
One-off amortization method for other revolving materials.
5. Recognition of Net Realizable Value and Withdrawal of Provision for Falling Price of Inventory
At the end of every year, the Company shall make an overall checking to inventory, thereafter, the provision for
falling price of inventory shall be measured according to its cost or its net realizable value, whichever is lower.
Finished goods, merchandise inventories, and available for sale materials which are applied directly for sales of
stock inventory, under normal producing process, to the amount after deducting the estimated sale expense and
relevant taxes from the estimated sell price of the inventory, the net realizable value has been recognized. Material
inventories which need to be processed, under normal producing process, to the amount after deducting the
estimated cost of completion, estimated sale expense and relevant taxes from the estimated sale price of produced
finished goods, the net realizable value has been recognized. The net realizable value of inventories held for the
execution of a sales contract or labor contract shall be calculated on the basis of the contract price. If an enterprise
holds more inventories than the quantities subscribed in the sales contract, the net realizable value of the excessive
inventories shall be calculated on the basis of the general sales price.
Ordinarily the Company shall make provision for falling price of inventories on the ground of each item of
inventories. For inventories with large quantity and relatively low unit prices, the provision for falling price of
inventories shall be made on the ground of the categories of inventories. For the inventories related to the series of
products manufactured and sold in the same area, and of which the final use or purpose is identical or similar
thereto, and if it is difficult to measure them by separating them from other items, the provision for falling price of
inventories shall be made on a combination basis.
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If the factors causing any write-down of the inventories have disappeared, the amount of write-down shall be
resumed and be reversed from the provision for the loss on decline in value of inventories that has been made. The
reversed amount shall be included in the current profits and losses.
13. Divided as Assets Held for Sale
Non-current assets or disposal group are confirmed to be the components held for sale when the following
conditions are simultaneously satisfied:
(1) According to the convention of similar transactions selling this kind of assets or disposal group, they can be
sold instantly in such conditions.
(2) Sale is extremely likely to happen, that is, the Company has made the decision of a sale plan, and got the
confirmed purchase commitment. It is estimated that the sale will be finished within 1 year.
The confirmed purchase commitment refers to the purchase agreement with legally binding signed with other
parties, which includes trading price, time, and fairly severe punishment for default to minimize the possibility of
significant adjustment or revocation of the agreement.
14. Long-term Equity Investment
1. The Recognition of Investment Cost
(1) The relevant accounting policy of long term equity investment formed by enterprise combination, please refer
to “Accounting disposal method of the enterprise merger under or not under the same control” under Note 5.
(2) Long-term equity investment gained by other methods
The initial cost of a long-term equity investment obtained by making payment in cash shall be the purchase cost
which is actually paid. The initial cost of a long-term equity investment includes the cost, tax and other necessary
expense directly relevant to gaining long-term equity investment
The initial cost of a long-term equity investment obtained on the basis of issuing equity securities shall be the fair
value of the equity securities issued.
As for a non-monetary assets transaction, under the premise that the transaction is commercial in nature and the
fair value of the assets received or surrendered can be measured reliably, the initial cost of the fair value of the
long-term equity investment received shall be recognized based on the fair value of the assets surrendered, unless
there is any exact evidence showing that the fair value of the assets received is more reliable. Where any
non-monetary assets transaction does not meet the conditions as prescribed in the above premises at the same time,
the book value and relevant payable taxes of the assets surrendered shall be the initial cost of the long-term equity
investment received.
The initial cost of a long-term equity investment obtained by debts restructuring shall be recognized based on the
fair value.
2. Subsequent Measurement and Gain/Loss Recognition Method
(1) Long-term equity investment measured by adopting cost method
The Company adopts cost method for measurement of the long-term equity investment controlled by invested
entities, and shall be calculated at its initial investment cost, add or withdraw investment and adjust the cost of the
long-term equity investment.
The return on investment at current period shall be recognized in accordance with the cash dividend or profit
announced to distribute by the invested entity, except the announced but not distributed cash dividend or profit
included in the actual payment or consideration upon gaining the investment.
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
(2) Long-term equity investment measured by adopting equity method
The Company adopts the equity method to measure the long-term equity investment of the associated enterprises
and joint ventures. for part of equity investment of associated enterprise through risk investment institutions,
mutual funds, trust companies or directly held by including within unit-linked insurance fund similar entities,
adopts fair value method, and its change records into profits or losses.
The long-term equity investment that does joint control or significant influences over the Company shall be
measured by employing the equity method. If the initial cost of a long-term equity investment is more than the
investing enterprise’ attributable share of the fair value of the invested entity’s identifiable net assets for the
investment, the initial cost of the long-term equity investment may not be adjusted. If the initial cost of a
long-term equity investment is less than the investing enterprise' attributable share of the fair value of the invested
entity’s identifiable net assets for the investment, the difference shall be included in the current profits and losses.
The Company should respectively recognize investment income and other comprehensive income according to the
net gains and losses as well as the portion of other comprehensive income which should be enjoyed or be shared,
and at the same time adjust the book value of the long-term equity investment; corresponding reduce the book
value of the long-term equity investment according to profits which be declared to distribute by the investees or
the portion of the calculation of cash dividends which should be enjoyed; for the other changes except for the net
gains and losses, other comprehensive income and the owners’ equity except for the profits distribution of the
investees, should adjust the book value of the long-term equity investment as well as include in the capital reserve.
The investing enterprise shall, on the ground of the fair value of all identifiable assets of the invested entity when
it obtains the investment and according to the accounting policies as well as the accounting period of the
Company, recognize the attributable share of the net profits and losses of the invested entity after it adjusts the net
profits of the invested entity. For the transaction happened between the Company and associated enterprises as
well as joint ventures, the portion of the unrealized gains and losses of the internal transaction, which belongs to
the Company according to the calculation of the enjoyed proportion, should offset and recognized the investment
gains and losses on the basis.
The Company shall handle to the net losses of the invested enterprise recognized by it: A. offset book value of
long-term equity investment; B. if the book value of long-term equity investment is insufficient to dilute,
investment loss shall be recognized based on the book value of other long-term rights and interests (reminder:
should clearly confirm the specific content and the recognition standard of the sort of long-term rights and interest)
which substantially form the net investment made to the invested entity, to offset book value of long-term
receivables items; and C. through the above treatment, where the Company still has the obligation to undertake
extra losses as per investment contracts or agreements, the obligation that is expected to undertake shall be
recognized the project liabilities, and recorded into losses on investment of the current period.
The investee profit in the subsequent periods, the Company after deducting unrecognized share loss amount,
adopts the aforesaid progress. Writes off the book value of estimated liabilities recognized, recovers others actual
form the book value of long term equity and long term equity investment of the net investment of investee, and
recovers the recognition of investment income.
3. The Accounting Method Transfer of Long-term Equity Investment
(1) Fair value calculation transfer to equity method
The Company’s original holding of investee's equity investment that without control, common control or
significant influence recognized at financial tools and accounted at standards of measurement, due to the
additional investment and other reason s that had significant influence to the investee or implement of
common control but not form control of the investee, in line with the Accounting Standards for Business
Enterprises No. 22--Recognition and Measurement of Financial Instruments, recognized the total of original
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
holding of fair value of equity investment plus the newly increase investment cost, which considered as the
initial investment cost changing measurement at equity method.
The difference between the fair value and carrying value of the original held equity investment classify as
available for sale financial assets, and changes to the accumulated fair value charged against other comprehensive
earnings shall be fully converted the current profits or losses change measurement at equity method.
The initial investment cost measured at equity method which smaller than the difference between the fair value of
net identifiable assets on additional date the investee enjoyed recognized in line with the new shareholding
proportion measurement after additional investment, adjust the book value of long term equity investment, and
record into current non-operation income.
(2) Fair value calculation or equity method accounting transfer to cost method
The Company's original holding of investee's equity investment that without control, common control or
significant influence recognized at financial tools and accounted at standards of measurement, or original holding
of long term equity investment to joint venture or associated enterprise, due to the additional investment and other
reasons that control the investee not under same control, When preparing individual financial statement, in line
with the total of the book value of equity investment original held plus the newly increase investment cost, which
considered as the initial investment cost changing measurement at cost method.
The original held of equity investment was recognized as other comprehensive income due to adopting equity
accounting, when disposing the investment adopt accounting treatment on the same basis with that the investee
directly disposing the relevant assets or liabilities.
The equity investment before purchase date, adopt accounting treatment in line with the stipulations of
Accounting Standards for Business Enterprises No. 22--Recognition and Measurement of Financial Instruments,
and the change in fair value originally recorded into other comprehensive income record into current profits or
losses when changing accounting method as cost method .
(3) Equity method transfer into fair value calculation
The remained equity due to the disposal of part of equity and other reason losing common control or significant
influence to the investee, calculated in line with the Accounting Standards for Business Enterprises No.
22--Recognition and Measurement of Financial Instruments after disposal. The difference between the fair value
and book value on the date of losing common control or significant influence was record into current profit or
losses.
The original held of equity investment was recognized as other comprehensive income due to adopting equity
accounting, when terminating adopt equity method, adopt accounting treatment on the same basis with that the
investee directly disposing the relevant assets or liabilities.
(4) Cost method transfer into equity method
The remained equity implementing common control or had significant influence to the investee, due to the
Company's disposal of part of equity investment losing the control to the investee, changes accounting treatment
as equity method, When preparing individual financial statement, adjusts the remained equity adopt equity method
since gained.
(5) Cost method to fair value measurement
The remained equity cannot implementing common control or had significant influence to the investee, due to the
Company's disposal of part of equity investment losing the control to the investee, calculated in line with
stipulation of the Accounting Standards for Business Enterprises No. 22--Recognition and Measurement of
Financial Instruments, when preparing individual financial statement, The difference between the fair value and
book value on the date of losing control was record into current profit or losses.
4. Disposal of Long-term Equity Investment
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
When disposing long term equity investment, the difference between the book value and actual purchase price
shall be record into current profits or losses. The equity investment adopting equity accounting, when disposing
the investment, adopt accounting treatment on the same basis with that the investee directly disposing the relevant
assets or liabilities and conducts accounting treatment to part of them originally recorded into other
comprehensive income in line with relevant proportion.
Each transaction items, conditions and economy influence in confirm with the following one or several conditions,
several transaction events were considered as a package deal and conducted accounting method;
1. The transaction was set up in the same time or had considered the influence to each others;
2. The transaction only stand as a whole, a perfect commercial result can be arrived;
3. A transaction incurred depends on at least one transaction occurred;
4. A transaction is not economical, however, together with other transaction are economical.
For that the Company's disposal of part of equity investment losing the control to the investee and not belonging
to a package deal, conducts accounting treatment to the individual financial statement and consolidated financial
statement respectively:
(1). In the individual financial statement, for the disposal equity, the difference between the book value and actual
purchase price was recorded into current profits or losses. The remained equity cannot implementing common
control or had significant influence to the investee, changes accounting treatment as equity method, when
preparing individual financial statement, adjusts the remained equity adopt equity method since gained, the
remained equity cannot implementing common control or had significant influence to the investee, after disposal,
calculated in line with stipulation of the Accounting Standards for Business Enterprises No. 22--Recognition and
Measurement of Financial Instruments, the difference between the fair value and book value on the date of losing
control was record into current profit or losses.
(2). In consolidated financial statement, for each transaction before losing the control to the subsidiary, the
difference between the disposal price and the corresponding net assets share enjoyed of subsidiary when disposing
long term equity investment since purchase date or start calculation, adjusts capital reserve (stock premium),
capital reserve is insufficient for write-downs, adjusts the retained earnings. The difference between the
consideration obtained in the equity disposal, plus the fair value of the remaining equities, less the Company’s
share of net assets net assets share enjoyed of subsidiary when disposing long term equity investment since
purchase date or start calculation according to the former shareholding ratio, is recorded into the investment gains
for the period when the control ceases, meanwhile, writes down goodwill. Other comprehensive income related to
former subsidiary's equity investment, transfer into current investment income when the control ceases.
When disposing each transaction of the Company losses control on its subsidiaries due to disposal of equity
investments belonging to a package deal, should be considered as a transaction of disposing equity investment of
subsidiary and losing control, conduct accounting treatment, conducts accounting treatment to the individual
financial statement and consolidated financial statement respectively:
(1). In individual financial statement, the difference between each disposal price before losing control and the
book value of corresponding long term equity investment in the disposal of equity, recognized as other
comprehensive income, when the control ceases, transfers into current profits or losses of the period of losing
control.
(2). In consolidated financial statement, the difference between each disposal price before losing the control, and
the corresponding net assets share enjoyed of subsidiary when disposing long term equity investment, recognized
as other comprehensive income, when the control ceases, transfers into current profits or losses of the period of
losing control.
5. Judgment Standard of Joint Control and Significant Influences
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
If the Company implements a collective control arrangement together with other participants in line with relevant
agreement, and the activity decision with significant influence to the reward of the arrangement only exist when
the participants who sharing the control power have a common agreement, which was considered as the Company
and the participants are in control of a arrangement, and the arrangement was belong to the joint venture
arrangement.
The joint venture arrangement arrived at individual entity, in line with the relevant agreements, when judging the
power the Company enjoy the net assets in the individual entity, considers the individual entity as joint venture,
and adopts equity method. If, in line with the relevant agreements, when judging the power the Company does not
enjoy the net assets in the individual entity, considers the individual entity as joint operation, the Company
recognized the relevant items of the profits of joint operation, and conducts accounting treatment in line with the
stipulations of relevant Accounting Standards for Business Enterprises.
The term “significant influence” means having the power to participate in the formulation of financial and
operating policies of an enterprise, but not the power to control or jointly control the formulation of these policies
together with other parties. The Company through the follow one or several situations and comprehensively
consider all the facts and conditions to judge the significant influence to the investee. (1). Have representatives in
the Board of Directors of investee or similar organ of authority; (2). Take part in the establish progress of finance
and operation policies of investee; (3). Have significant transaction with the investee; (4). Send administrators to
the investee; (5). Provide key technology information to investee.
15. Investment Property
Measurement mode of investment real estates
Measurement of cost method
Depreciation or amortization method
The term "investment real estate" refers to the real estate held for generating rent and/or capital appreciation,
including the right to use any land which has already been rented, the right to use any land which is held and
prepared for transfer after appreciation, and the right to use any building which has already been rented. Besides,
the vacant buildings held by the Company for renting are also presented and listed as investment real estate if the
Board of Directors made the written decision to confirm it to be used for renting with no change of the purposes in
the short term.
The investment real estate of the Company is regarded as entry value according to its costs. The cost of an
investment real estate by acquisition consists of the acquisition price, relevant taxes, and other expenses directly
relegated to the asset; the cost of a self-built investment real estate composes of the necessary expenses for
building the asset to the hoped condition for use.
The Company adopts the cost method in the subsequent measurement of investment property. In line with the
estimate useful life and net ratio of remaining value withdrawing depreciation or amortization. The lists of
investment property in line with the estimate useful life and net ratio of remaining value withdrawing depreciation
or amortization are as follows:
Category Estimate useful life Estimate net ratio of The rate of
(year) remaining value depreciation
(amortization)
Houses and buildings 30-40 years 5% 2.38%-3.17%
When the usage of investment real estate is changed for being used for its own, the Company will convert the
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investment real estate into fixed assets or intangible assets from the date of change. When the usage of real estate
used for its own was changed for generating rents or capital appreciation, the Company will convert fixed assets
or intangible assets into investment real estate from the date of change. The book value before converting is taken
as entry value after converting when converted.
If an investment real estate is disposed of, or if it withdraws permanently from use and if no economic benefit will
be obtained from the disposal, the recognition of it as an investment real estate shall be terminated. The disposal
income of investment real estate’s sales, transfer, discards, or damage deducting the book value of the investment
real estate as well as the relevant taxes shall be included the current profits and losses.
16. Fixed Assets
(1) Recognized Standard of Fixed Assets
The term "fixed assets" refers to the tangible assets that simultaneously possess the features as follows: they are
held for the sake of producing commodities, rendering labor service, renting or business management; and their
useful life is in excess of one fiscal year. No fixed asset may be recognized unless it simultaneously meets the
conditions as follows: (1) The economic benefits pertinent to the fixed asset are likely to flow into the enterprise;
(2) The cost of the fixed asset can be measured reliably
(2) Depreciation Method
Expected net salvage
Category Depreciation method Useful life Annual deprecation
value
Houses and buildings Straight-line depreciation 30-40 5% 2.375%-3.17%
Machinery equipment Straight-line depreciation 10-25 5% 3.80%-9.50%
Transportation Straight-line depreciation 5 5% 19.00%
Electronic equipment and
Straight-line depreciation 5-10 5% 9.50%-19.00%
other
(3) Recognition Basis and Pricing Method of Fixed Assets by Finance Lease
Where one of the following provisions is regulated in the rental agreement signed between the Company and the
leaser, is shall be recognized as an asset acquired under finance leases: (1) the ownership of the leased asset is
transferred to the Company after the term of lease expires; (2) the Company has the option to buy the asset at a
price which is far lower than the fair value of the asset at the date when the option becomes exercisable; (3) the
lease term covers the major part of the use life of the leased asset; (4) in the case of the lessee, the present value of
the minimum lease payments on the lease beginning date amounts to substantially all of the fair value of the
leased asset. (5) When nature of the leased asset is special, if there is no great transform, only the Company can
use it, As for the fixed assets by finance lease, the Company shall record the lower one of the fair value of the
leased asset and the present value of the minimum lease payments as the entering value in an account, recognize
the amount of the minimum lease payments as the entering value in an account of long-term account payable,
and treat the balance between the recorded amount of the leased asset and the long-term account payable as
unrecognized financing charges. When the negotiation of lease and signing lease contract occurred simultaneously,
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the handling charge, attorney’s fees and traveling expenses, stamp duty, and other direct cost belonging to the
lease project, recorded into value of leased assets. The unrecognized financing cost was amortized by effective
interest method at each period within the lease term. The Company adopting depreciation policies in concern with
self-owned fixed assets withdraw depreciation of fixed assets under financing lease. The ownership of fixed assets
under financing lease reasonably ensured to obtain the expiration of the lease term, withdraw depreciation within
useful life; The ownership of fixed assets under financing lease cannot reasonably ensured to obtain the expiration
of the lease term, withdraw depreciation within the shorter one of useful life and lease term.
17. Construction in Progress
1. Initial Measurement of Construction in Progress
The valuation of the Company's self-construction of construction in progress is in line with the actual cost which
was formed by all the necessary expenditures that the asset of construction arrived at the expected useful status,
including cost of engineering materials, labor cost, and the relevant cost of tax, the borrowing cost of should being
capitalization and the indirect cost should be amortized.
2. Standard and Time Point of Construction in Progress Transferring into Fixed Assets
All expenditure occurred before the assets are brought to the expected conditions for use shall be recognized as
the entering value of fixed assets. The construction in progress of fixed assets has been reached to the expected
conditions for use but has not yet has handle completion and settlement procedures, the construction in progress
shall be transferred into the fixed assets at the appraisal value in accordance with construction budget, cost or
actual cost since the date that the construction in progress reaches to the expected conditions for use, and the
depreciation of the fixed assets shall withdrawn in the light of the depreciation policy of fixed assets. After
completion and settlement procedures, the Company shall adjust the original provisional estimate price at the
actual cost, but not adjust original depreciation withdrawn.
18. Borrowing Costs
1. Recognition Principle of Capitalization of Borrowing Costs
Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and
construction or production of assets eligible for capitalization, it shall be capitalized and recorded into the costs of
relevant assets. Other borrowing costs shall be recognized as expenses on the basis of the actual amount incurred,
and shall be recorded into the current profits and losses.
The term “assets eligible for capitalization” shall refer to the fixed assets, investment real estate, inventories and
other assets, of which the acquisition and construction or production may take quite a long time to get ready for its
intended use or for sale.
The borrowing costs shall not be capitalized unless they simultaneously meet the following requirements:
(1). The asset disbursements have already incurred, which shall include the cash, transferred non-cash assets or
interest bearing debts paid for the acquisition and construction or production activities for preparing assets eligible
for capitalization;
(2). The borrowing costs have already incurred; and
(3). The acquisition and construction or production activities which are necessary to prepare the asset for its
intended use or sale have already started.
2. Capitalization Period
The capitalization period shall refer to the period from the commencement to the cessation of capitalization of the
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borrowing costs, excluding the period of suspension of capitalization of the borrowing costs.
When the qualified asset under acquisition and construction or production is ready for the intended use or sale, the
capitalization of the borrowing costs shall be ceased.
When the part of projects in the qualified asset under acquisition and construction or production are completed
separately and is ready for use alone, the capitalization of the borrowing costs of such part of assets shall be
ceased.
Where each part of an asset under acquisition and construction or production is completed separately and is ready
for use or sale during the continuing construction of other parts, but it cannot be used or sold until the asset is
entirely completed, the capitalization of the borrowing costs shall be ceased when the asset is completed entirely.
3. The Period of Suspension of Capitalization of the Borrowing Costs
Where the acquisition and construction or production of a qualified asset is interrupted abnormally and the
interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall be suspended. If
the interruption is a necessary step for making the qualified asset under acquisition and construction or production
ready for the intended use or sale, the capitalization of the borrowing costs shall continue. The borrowing costs
incurred during such period shall be recognized as expenses, and shall be recorded into the profits and losses of
the current period, till the acquisition and construction or production of the asset restarts.
4. Calculation Method of Capitalized Amount of Borrowing Costs
Interest of specific loan (deducting interest income of loan capital deposit in the bank or investment income
obtained from temporary investment) and its subsidiary expenses before the construction or production of assets
eligible for capitalization arrived at available for use or sale, capitalized them.
The enterprise shall calculate and determine the to-be-capitalized amount of interests on the general borrowing by
multiplying the weighted average asset disbursement of the part of the accumulative asset disbursements minus
the general borrowing by the capitalization rate of the general borrowing used. The capitalization rate shall be
calculated and determined in light of the weighted average interest rate of the general borrowing.
Where there is any discount or premium, the amount of discounts or premiums that shall be amortized during each
accounting period shall be determined by the real interest rate method, and an adjustment shall be made to the
amount of interests in each period.
19. Biological Assets
20. Oil and Gas Assets
21. Intangible assets
(1) Pricing method, useful life and impairment test
Intangible assets refer to identifiable non-monetary assets that are owned or controlled by the Company without
material state, including right to use land sites, software and non-patented technology.
1) Initial measurement of intangible assets
The cost of outsourcing intangible assets shall include the purchase price, relevant taxes and other necessary
expenditures directly attributable to intangible assets for the expected purpose. Where the payment of purchase
price for intangible assets is delayed beyond the normal credit conditions, which is of financing intention, the cost
of intangible assets shall be determined on the basis of the current value of the purchase price.
For intangible assets obtained through debt restructuring, which are pay a debt by the debtor, its entering value
shall be recognized based on the fair value of such intangible assets. The balance between book value for debt
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restructuring and the fair value of the intangible assets shall be recorded into the profits and losses of the current
period.
As for a non-monetary assets transaction, under the premise that the transaction is commercial in nature and the
fair value of the assets received or surrendered can be measured reliably, the initial cost of the fair value of the
intangible assets received shall be recognized based on the fair value of the assets surrendered, unless there is any
exact evidence showing that the fair value of the assets received is more reliable. Where any non-monetary assets
transaction does not meet the conditions as prescribed in the above premises at the same time, the book value and
relevant payable taxes of the assets surrendered shall be the initial cost of the intangible assets received.
As for intangible assets through business combination under the same control, its entering value shall be
recognized based on the book value of combined party. As for intangible assets through business combination not
under the same control, its entering value shall be recognized at its fair value.
The cost of self-developed intangible assets shall include: materials used, service cost, registration fee when
developing such intangible assets, and amortization expenses of other patent right used in the course of
development and interest expense eligible for capitalization, as well as other direct cost incurred before the
expected purposes of use of such intangible assets are realized.
2) Subsequent measurement
The Company shall analyze and judge the service life of intangible assets, classify as intangible assets with
limited service life and intangible assets with uncertain service life
(1). Intangible assets with limited service life
With regard to intangible assets with limited service life, shall be amortized by the straight-line method within the
period when the intangible asset can bring economic benefits to the Company. Estimated useful life of
intangible assets with limited useful life:
Item Estimated useful life Basis
Software 2-10 years Estimated useful life
Land use right 50 years Property ownership certificate or land use
certificate
Non-patent right 10 years Estimated useful life
The Company shall, at the end of every year, check the useful life and the amortization method of the said
intangible assets with limited service life. If there is any difference between the expected useful life and the
previously estimated data, the expected useful life shall be adjusted.
After check, useful life and the amortization method of the said intangible assets remained the same as the
previous valuation.
(2). Intangible assets with uncertain service life
If it is unable to forecast the period when the intangible asset can bring economic benefits to the enterprise, it shall
be regarded as an intangible asset with uncertain service life.
The Company shall, at the end of every year, check the useful life and does not conduct the amortization method
of the said intangible assets with uncertain service life. If after check, useful life of the said intangible assets
remained in uncertainty, the Company shall make an impairment test at the end of year.
After check, the Company has no intangible assets with uncertain service life.
(2) Accounting policies of internal R&D expenses
1) Standard for classifying research phase and development phase of the Company’s R&D projects
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The term “research” refers to the creative and planned investigation to acquire and understand new scientific or
technological knowledge.
The term "development" refers to the application of research achievements and other knowledge to a certain plan
or design, prior to the commercial production or use, so as to produce any new material, device or product, or
substantially improved material, device and product.
The expenditures of R&D stage in internal R&D project, was recorded into current profits or losses.
2) Standard for capitalization of development expenditures
The expenses in R&D stage for its internal research and development projects of the Company may be capitalized
when they satisfy the following conditions simultaneously:
(1). It is feasible technically to finish intangible assets for use or sale;
(2). It is intended to finish and use or sell the intangible assets;
(3). The usefulness of methods for intangible assets to generate economic benefits shall be proved, including
being able to prove that there is a potential market for the products manufactured by applying the intangible assets
or there is a potential market for the intangible assets itself or the intangible assets will be used internally;
(4). It is able to finish the development of the intangible assets, and able to use or sell the intangible assets, with
the support of sufficient technologies, financial resources and other resources; and
(5). The development expenditures of the intangible assets can be reliably measured.
The expenses not meet the aforesaid conditions, record into current profits or losses. R&D expenses had recorded
into profits or losses in previous period, was derecognized as assets in the subsequent period. The capitalized
expenses in R&D stage had been listed as R&D expenses in the balance sheet; transfer into intangible assets since
the project arrived at the date expected use.
22. Impairment of Long-term Assets
The Company shall, on the day of balance sheet, make a judgment on whether there is any sign of possible assets
impairment. If there are signs of long-term assets impairment, on the basis of single item assets, estimate the
recoverable amount; for it is difficult to estimate the recoverable amount of an individual asset, determines the
recoverable amount of an asset group based on the assets belongs to the group.
The estimation of recoverable amount of assets, recognized according to the higher between the net present value
after its fair value minus the disposal expenses and the present value of expected future cash flow of an asset.
The measurement results of the recoverable amount show that, the recoverable amount lower than the book value,
writes down the book value of long term assets to recoverable amount which recognized as assets impairment
losses, record into current profits or losses. Meanwhile, withdraw relevant assets impairment provision. Once the
assets impairment losses are recognized, it will no longer being switch back in subsequent accounting period.
After the recognition of assets impairment losses, the depreciation and amortization expenses of impairment assets
adjusted in future period, which ensure the assets systematically amortized the book value of assets after the
adjustment ( after deducting estimate net salvage) within the remaining service life.
For intangible assets with uncertain goodwill or service life formed by enterprise combination, whatever there is
sign of impairment conduct impairment test every year.
When conducting impairment test to the goodwill, share the book value of goodwill to the group assets or
combination of group assets estimate benefited from synergistic effect of enterprise combination When
conducting impairment test to the relevant group assets or combination of group assets including goodwill, if there
is sign of impairment, conduct impairment test to those excluding goodwill, calculate recoverable amount and
compare to the relevant book value, recognize the relevant impairment losses. Then, conduct impairment test to
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
the relevant group assets or combination of group assets including goodwill, compare the book value( including
the part of book value of goodwill amortized and its recoverable amount, if the recoverable amount lower than its
book value, recognize the impairment losses of goodwill.
23. Long-term Unamortized Expenses
1. Amortization Method
Long-term deferred expenses refer to general expenses with the apportioned period over one year that have
occurred but attributable to the current and future periods. Long-term deferred expense shall be straight-line
amortized by stage within benefit period.
2. Amortization Period
Type Amortization period Remark
Expenses on decoration of rented 5 years According to actual benefit period
plants
Technical service expenses 5 years According to actual benefit period
Expenses on maintenance and 3-5 years According to actual benefit period
alteration
24. Payroll
(1) Accounting Treatment of Short-term Compensation
Short-term compensation refers to the payroll payment of the employee providing service during the end of
Reporting Period within 12 months that the Company should pay, excepting the welfare after demission and
termination benefits. During the accounting period that the employees providing the service, should be calculated
and recognized the corresponding payroll amount according to the stated withdrawal basic and proportion
(2) Accounting Treatment of the Welfare after Demission
Welfare after demission refers to the Company, in order to obtain services provided by the employees, provide all
kinds of rewards and benefits after the retirement of the employees or cancellation of staff employment contracts,
excepting short-term compensation and retirement benefits.
All the Company's welfare after demission plans are setting drawing plans.
The setting drawing plan of welfare after demission is the social basic pension insurance, unemployment
insurance, etc, which implemented by the local labor and social security offices. In addition to social basic
pension insurance and unemployment insurance, the Company participated in corporation pension scheme of
China Chengtong Holdings Group Ltd. In the framework of Corporation Pension Scheme of China Chengtong
Holdings Group Ltd, employees can voluntarily take part in the pension plan before January 1, 2017 according to
the corporation pension scheme of Implementing Rules for China Paper Corporation Pension Scheme. During the
accounting period that the employee providing service for the Company, the amount should pay in line with the
setting drawing plan will be recognized as liabilities and record into current profits or losses or cost of relevant
assets.
Apart from regularly making the aforesaid payments pursuant to the government’s standards and the annuity fund
plan, the Company bears no responsibility for other payments in this respect.
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(3) Accounting Treatment of Demission Welfare
Demission welfare is refers to the Company's cancellation of the labor relationship with the employees before the
labor contract maturity or compensation for encouraging the employee voluntarily accept reduction, when the
Company is unable to unilaterally withdraw the plan on the cancellation of labor relationship or the layoff
proposal, or when recognizing the costs or expenses (the earlier one between the two) related to the reorganization
of paying the demission welfare, should recognize the payroll liabilities from the demission welfare and include in
the current gains and losses.
(4) Accounting Treatment of other Welfare of the Long-term Employees
Other welfare of the long-term employees refers to other welfares excluding short term compensation, welfare
after demission and demission welfare.
25. Accrued Liabilities
1. Recognition Standard of Estimated Liabilities
The obligation pertinent to the Contingencies shall be recognized as estimated liabilities when the following
conditions are satisfied simultaneously:
The obligation is a current obligation of the company;
It is likely to cause any economic benefit to flow out of the Company as a result of performance of the obligation;
and
The amount of the obligation can be measured in a reliable way.
2. Measurement Method of Estimated Liabilities
The estimated debts shall be initially measured in accordance with the best estimate of the necessary expenses for
the performance of the current obligation.
To determine the best estimate, an enterprise shall take into full consideration of the risks, uncertainty, time value
of money, and other factors pertinent to the Contingencies. If the time value of money is of great significance, the
best estimate shall be determined after discounting the relevant future outflow of cash.
The best estimate shall be conducted in the light of the following situations:
If there is a sequent range for the necessary expenses and if all the outcomes within this range are equally likely to
occur, the best estimate shall be determined in accordance with the middle estimate (average number of bound)
within the range.
If there is not a sequent range for the necessary expenses, or although there is a sequent range for the necessary
expenses but all possible outcomes are not the same within the scope, i.e. If the Contingencies concern a single
item, best estimate shall be determined in the light of the most likely outcome; If the Contingencies concern two
or more items, the best estimate should be calculated and determined in accordance with all possible outcomes
and the relevant probabilities.
When all or some of the expenses necessary for the liquidation of an estimated debts of an enterprise is expected
to be compensated by a third party, the compensation should be separately recognized as an asset only when it is
virtually certain that the reimbursement will be obtained. The amount recognized for the reimbursement should
not exceed the book value of the estimated debts.
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26. Share-based Payment
27. Other Financial Instruments such as Preferred Shares and Perpetual Capital Securities
28. Revenue
Is the Company subject to any disclosure requirements for special industries?
No.
1. Criteria for Recognition Time of Revenue from Sale of Goods
The significant risks and rewards of ownership of the goods have been transferred to the buyer by the enterprise;
The enterprise retains neither continuous management right that usually keeps relation with the ownership nor
effective control over the sold goods; The relevant amount of revenue can be measured in a reliable way; The
relevant economic benefits may flow into the enterprise; and the relevant costs incurred or to be incurred can be
measured in a reliable way.
Confirmation methods of sales revenues of the Company:
(1) Confirmation methods of domestic sales revenue
Shall satisfy following conditions: products should be delivered according to customer’s requirements; amount of
sales revenues is determined, received or respected to receive; sales slip should be invoiced; costs of sold products
should be calculated;
(2) Confirmation methods of export sales revenue
Shall satisfy following conditions: products should be produced according to export sales agreement signed with
customers, received export declaration after qualified inspection and obtained bill of lading (waybill) after
delivery by transport company; amount of sales revenues is determined, received or respected to receive; sales slip
should be invoiced; costs of sold products should be calculated.
If the collection of the price as stipulated in the contract or agreement is delayed and if it has the financing nature,
the revenue incurred by selling goods shall be ascertained in accordance with the fair value of the receivable price
as stipulated in the contract or agreement.
2. Recognition Basis of Revenue from Transferring Use Rights of Assets
The relevant economic benefits are likely to flow into the enterprise; and the amount of revenues can be measured
in a reliable way. The revenue from a alienating the right to use assets shall be recognized in the light of the
following methods:
(1) The amount of interest revenue should be measured and confirmed in accordance with the length of time for
which the enterprise's cash is used by others and the actual interest rate;
(2) The amount of royalty revenue should be measured and confirmed in accordance with the period and method
of charging as stipulated in the relevant contract or agreement.
3. Recognition Basis and Method for Recognizing the Revenue from Providing Labor Services
If the Company can, on the date of the balance sheet, reliably estimate the outcome of a transaction concerning the
labor services it provides, it shall recognize the revenue from providing services employing the
percentage-of-completion method. Schedule of completion under the transaction concerning the providing of
labor services shall be recognized in the light of the measurement of the work completed.
The reliably estimate the outcome of a transaction concerning the labor services it provides, which simultaneously
meets the following conditions:
(1). The amount of revenue can be measured in a reliable way.
(2). Relevant economy profits may inflow enterprises
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
(3). The schedule of completion of the transaction can be measured in a reliable way.
(4). The cost occurred or will occur in the transaction can be measured in a reliable way.
The Company shall ascertain the total revenue from the providing of labor services in accordance with the
received or to-be-received price of the party that receives the labor services as stipulated in the contract or
agreement, unless the received or to-be-received price as stipulated in the contract or agreement is unfair. The
Company shall, on the date of the balance sheet, ascertain the current revenue from providing labor services in
accordance with the amount of multiplying the total amount of revenues from providing labor services by the
schedule of completion then deducting the accumulative revenues from the providing of labor services that have
been recognized in the previous accounting periods. At the same time, the enterprise shall carry forward the
current cost of labor services in accordance with the sum of multiplying the total amount of revenues arising from
the providing of labor services by the schedule of completion and then deducting the accumulative revenues from
the providing of labor services.
If the Company can’t, on the date of the balance sheet, reliably estimate the outcome of a transaction concerning
the labor services it provides, it shall be handled under the following conditions:
(1). If the cost of labor services incurred is expected to be compensated, the revenue from the providing of labor
services shall be recognized in accordance with the amount of the cost of labor services incurred, and the cost of
labor services shall be carried forward at the same amount;
(2). If the cost of labor services incurred is not expected to compensate, the cost incurred should be included in the
current profits and losses, and no revenue from the providing of labor services may be recognized.
If the contracts the Company sign with other enterprises include sale of goods and rendering of service, and both
of them can be separated and individually calculated, deal with them separately. For those sale of goods and
rendering of service cannot be separated, or though can be separated but not be individually calculated, consider
sale of goods and rendering of service as sale of goods.
4. Assets Transfer with Repurchase Conditions
When selling goods or transferring assets, the Company signs agreement of sale of goods or assets transfer, judges
the sale of goods whether meeting the recognition condition of revenue or not in lie with the agreement or not. If
sales with Buyback Agreements belong to financing transaction, the Company derecognizes the revenue of sale,
when delivering products or assets. If the price of repurchase is higher than the balance of sale price, withdraw
interest on schedule during the repo period, withdraw financial cost.
29. Government Subsidies
(1) Judgment Basis and Accounting Treatment of Government Subsidies Related to Assets
Government subsidies related to assets are recognized as deferred income and recorded into gains/losses in
reasonable and systematic way by stage in line with service life of assets purchased or constructed.
(2) Judgment Basis and Accounting Treatment of Government Subsidies Related to Profits
Government subsidies related to profits, as for those subsidies used for compensating the related future expenses
or losses of the enterprise shall be recognized as deferred income and shall included into the current gains/losses
during the period when the relevant expenses or losses are recognized; those subsidies used for compensating the
related expenses or losses incurred to the enterprise shall be directly included into the current gains/losses.
Government subsidies related to daily activities of enterprises shall be recorded into other incomes; government
subsidies that have nothing to do with daily activities of enterprises shall be recorded into non-operating revenues
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and expenditure.
The obtained government subsidies closely related to policy concessional loan write-downs related borrowing
costs; when getting the loans with policy preferential interest rate provided by lending bank, the Company shall
take the actual obtained borrowing balance as entry value of borrowings, and calculate related borrowing costs in
accordance with loan principal and policy preferential interest rate.
The government recognized need to return, which write-downs related assets book value when initially recognized,
adjusting assets book value; deposited in the balance of relevant deferred income, write-downs related deferred
income balance, the part beyond include in the current profits and losses, for those not in deferred income, include
in current profits or losses directly.
30. Deferred Income Tax Assets/Deferred Income Tax Liabilities
Deferred income tax assets and deferred income tax liabilities recognize in line with the difference between tax
base of assets and liabilities and their book value. On balance sheet date, deferred income tax assets and deferred
income tax liabilities calculated in line with suitable tax rate in the period of estimate recover the assets or pay off
the liabilities.
1. Recognition Basis of Deferred Income Tax Assets
The Company probably recognizes the deferred income tax assets incurred from deductable temporary difference
using the limit of taxable income amount of deductible losses and tax credits deducting temporary differences and
can be brought forward to next accounting year. However, derecognize the deferred income tax assets incurred
from the initial recognition of assets or liabilities in the transaction of the follows with these characteristics: (1)
The transaction is not enterprise combination. (2) When the transaction occurring, it has no influence to the
accounting profits, taxable amount or deductible losses.
The deductable temporary difference of relevant association enterprise investment, simultaneously meet the
follow conditions, recognize as corresponding deferred tax assets; temporary difference probably switch back in
the foreseeable future, and obtain taxable amount using for deducting deductable temporary difference.
2. Recognition Basis of Deferred Income Tax Liabilities
The Company recognizes the taxable temporary differences unpaid in the current period or previous period as
deferred income tax liabilities. But not include:
(1) Temporary differences formed by the initial recognition of goodwill
(2) The transaction or event is not formed by enterprise combination, and the happen of transaction or event has
no influence to the accounting profits or temporary differences formed by taxable income (Deductible losses)
(3) For taxable temporary differences related to the investment with the subsidiary and association enterprise, the
time of the reverse of temporary differences can be control and the temporary difference probably does not switch
back in the foreseeable future.
3. Deferred Income Tax Assets and Deferred Income Tax Liabilities are Stated at Net Offset Amounts when
the Following Conditions are Simultaneously Satisfied:
(1) The Company is legally authorized to settle the income tax assets and liabilities of the current period at net
amounts; and
(2) The deferred income tax assets and liabilities are related to the income tax levied by the same tax authority on
the same tax payer, or such on different tax payers but in the future period of the reversal of each important
deferred income tax assets and liabilities, the involved tax payers intend to settle the income tax assets and
liabilities of the current period at net amounts or obtain assets and repay debts at the same time.
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31. Lease
(1) Accounting Treatment of Operating Lease
1) Operating Leasing Assets
Rent charge paid for leasing assets shall be apportioned at the straight-line method and recorded into the current
expense within the overall rent period including rent-free period. The initial direct expense paid by the Company
related to lease transaction shall be included into the current expense.
Where the lessor undertakes the expenses related to the lease that should be undertaken by the Company, the
Company shall deduct such expense from total rental, and such deducted rental fee shall be apportioned within the
rent period and included into the current expense.
2) Operation Renting out Assets
Rent charge received for renting out assets shall be apportioned at the straight-line method and recognized as
rental income within the overall rent period including rent-free period. The initial direct expense paid by the
Company related to lease transaction shall be included into the current expense. In the event of the larger amount,
it shall be capitalized and recoded into the current income by installment within the overall lease period.
Where the Company undertakes the expenses related to the lease that should be undertaken by the lessor, the
Company shall deduct such expense from total rental income, and such deducted rental fee shall be apportioned
within the rent period.
(2) Accounting Treatments of Financial Lease
1) Assets acquired under finance leases: On the lease beginning date, the Company shall record the lower one of
the fair value of the leased asset and the present value of the minimum lease payments on the lease beginning date
as the entering value in an account, recognize the amount of the minimum lease payments as the entering value in
an account of long-term account payable, and treat the balance between the recorded amount of the leased asset
and the long-term account payable as unrecognized financing charges.
For the recognition standards, measurement and depreciation methods for assets acquired under finance leases, see
Note IV. (14) Fixed assets herein.
The unrecognized financing charges are amortized over the lease term and recorded into finance costs adopting
the effective interest rate method.
2) Assets lost under finance leases: On the lease beginning date, the Company shall recognize the difference
between financing lease receivables and the unguaranteed residual value in a finance lease as unrealized financing
income and recognize as income of lease during the future period of receiving lease income. The initial direct cost
related to lease transaction occurred in the Company, record into initial calculation of financing lease receivables,
decrease the amount of lease income recognized during lease period.
32. Other Significant Accounting Policies and Estimates
33. Changes in Main Accounting Policies and Estimates
(1) Change of Accounting Policies
□ Applicable √ Not applicable
102
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
(2) Changes in Accounting Estimates
□ Applicable √ Not applicable
34. Other
VI. Taxation
1. Main Taxes and Tax Rate
Category of taxes Tax basis Tax rate
Rental income was 5%, interest income
Revenue from sale of goods, taxable
VAT was 6%, water fee income was 11%, and
revenue from rendering services
others income was 17%
Urban maintenance and construction tax Turnover tax actually paid 7%
Enterprise income tax Taxable income 25%
70% of the original value of the property
Property tax 1.20%
considered as tax base
Property tax Rental income as tax base 12%
Notes of the disclosure situation of the taxpaying bodies with different enterprises income tax rate
Name Income tax rate
The Company 25%
Hongta Renheng 15%
Golden Pheasant Chemical 15%
Huaxin Color Printing 15%
Zhuhai Huafeng 15%
Kunshan Focai 25%
Zhejiang Hongta 25%
2. Tax Preference
1. According to the Circular on issuing the First Name List of Hi-tech Enterprise through the review in
Guangdong Province for Y2015 (YKGS (2015) Document No. 24) issued by Science & Technology Department
of Guangdong Province, Hongta Renheng passed First Batch of Hi-tech Enterprise in Guangdong Province for
Y2015, and gained Certificate for Hi-tech Enterprise (Certificate No.: GR201544000238, with three years of
validity). Hongta Renheng reapplied for the recognition of Hi-tech Enterprise in 2018, and the result hasn’t come
out yet, so it shall temporarily pay the corporate income tax according to the corporate income tax rate of 15%.
2. According to the Notice about the Second Name List of Proposed Hi-tech Enterprise in Guangdong Province
for Y2016 published by the National Leading Group Office for the Management of High-tech Enterprises
Recognition, Golden Pheasant Chemical passed the recheck of Hi-tech Enterprise, Certificate No.:
103
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
GR201644004219, with three years of validity. Thus Golden Pheasant Chemical shall pay the corporate income
tax according to the corporate income tax rate of 15% in 2018.
3. According to the First Name List of Proposed Hi-tech Enterprise in Guangdong Province for Y2016 issued by
the National Leading Group Office for the Management of High-tech Enterprises Recognition, the subsidiary of
the Company, Zhuhai Huafeng Paper Co., Ltd. had passed the affirmation of the first name list high-tech
enterprise of 2016 in Guangdong Province, and gained Certificate for Hi-tech Enterprise (Certificate No.:
GR201644001293, with three years of validity). Thus Zhuhai Huafeng Paper Co., Ltd. shall pay the corporate
income tax according to the corporate income tax rate of 15% in 2018.
4. According to the Circular on issuing the Name List of Hi-tech Enterprise in Guangdong Province for Y2015
(YKGZi [2016] Document No. 17) jointly issued by Science & Technology Department of Guangdong Province,
Department of Finance of Guangdong Province, Guangdong Provincial Office, SAT, Guangdong Local Taxation
Bureau, the subsidiary of the Company Huaxin (Foshan) Color Printing Co., Ltd. had passed the affirmation of
high-tech enterprise of 2016 and the gained the Certification of Hi-tech Enterprise (the Certification No.:
GR201544001352 with the validity for 3 years). Huaxin Color Printing reapplied for the recognition of Hi-tech
Enterprise in 2018, and the result hasn’t come out yet, so it shall temporarily pay the corporate income tax
according to the corporate income tax rate of 15%.
3. Other
VII. Notes to Major Items in the Consolidated Financial Statements of the Company
1. Monetary Funds
Unit: RMB
Item Ending balance Beginning balance
Cash on hand 208,623.57 173,601.37
Bank deposits 194,166,175.14 254,078,310.38
Other monetary funds 160,238,064.51 33,400,956.90
Total 354,612,863.22 287,652,868.65
Other notes:
Of which, the restricted monetary capital was as follow:
Item Ending balance Beginning balance
Cash Deposit 106,305,264.51 6,284,026.90
Other use restricted deposits 53,932,800.00 27,116,930.00
Total 160,238,064.51 33,400,956.90
2. Financial assets at fair value through profit or loss
Unit: RMB
Item Ending balance Beginning balance
Other notes:
104
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
3. Derivative Financial Assets
□ Applicable √ Not applicable
4. Notes Receivable
(1)Notes Receivable Listed by Category
Unit: RMB
Item Ending balance Beginning balance
Bank acceptance bill 327,391,208.87 428,945,798.73
Commercial acceptance bill 1,605,355.28 1,753,865.72
Total 328,996,564.15 430,699,664.45
(2) Notes Receivable Pledged by the Company at the End of the Period
Unit: RMB
Item Amount
Bank acceptance bill 48,419,769.97
Total 48,419,769.97
(3) Notes Receivable Endorsed by the Company or Discounted and not due on the Balance Sheet Date at the
End of the Period
Unit: RMB
Derecognized Amount at the end of the Non-derecognized amount at the end of the
Item
period period
Bank acceptance bill 1,081,395,643.57
Total 1,081,395,643.57
(4) Notes Transferred to Accounts Receivable because Drawer of the Notes Failed to Execute the Contract
or Agreement
Unit: RMB
Amount of the notes transferred to accounts receivable at the end
Item
of the period
Other notes:
105
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
5. Accounts Receivable
(1) Accounts Receivable Classified by Category
Unit: RMB
Ending balance Beginning balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Category Withdra
Carrying Carrying
Proportio wal Proportio Withdrawal
Amount Amount value Amount Amount value
n proportio n proportion
n
Accounts receivable
withdrawal of bad
746,346, 3,217,48 743,129,1 733,348 3,218,491 730,130,22
debt provision by 94.77% 0.43% 94.67% 0.44%
665.11 6.94 78.17 ,714.44 .38 3.06
credit risks
characteristics:
Accounts receivable
with insignificant
single amount for 41,222,7 41,222,7 41,284, 41,284,52
5.23% 100.00% 5.33% 100.00%
which bad debt 16.77 16.77 524.04 4.04
provision separately
accrued
787,569, 44,440,2 743,129,1 774,633 44,503,01 730,130,22
Total 100.00% 5.64% 100.00% 5.75%
381.88 03.71 78.17 ,238.48 5.42 3.06
Accounts receivable with significant single amount for which bad debt provision separately accrued at the end of the period
□ Applicable √ Not applicable
Among these groups, accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
Ending balance
Aging
Account receivable Bad debt provision Withdrawal proportion
Subentry within 1 year
1-3 months 687,521,204.47
4-12 months 55,358,980.31 2,564,359.48 4.63%
Subtotal of within 1 year 742,880,184.78 2,564,359.48 0.35%
1 to 2 years 2,637,572.29 263,757.23 10.00%
2 to 3 years 83,612.64 16,722.53 20.00%
Over 3 years 745,295.40 372,647.70 50.00%
3- 4 years 176.14 88.07 50.00%
106
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Over 5 years 745,119.26 372,559.63 50.00%
Total 746,346,665.11 3,217,486.94 0.43%
Notes of the basis of recognizing the group:
Among these groups, accounts receivable adopting balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
Among these groups, accounts receivable adopting other methods to withdraw bad debt provision:
(2) Bad Debt Provision Withdrawal, Reversed or Recovered in the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB0.00; the amount of the reversed or
collected part during the Reporting Period was of RMB62,811.71.
Significant amount of reversed or recovered bad debt provision:
Unit: RMB
Name of the entity Amount Method
(3) Particulars of the Actual Verification of Accounts Receivable during the Reporting Period
Unit: RMB
Item Amount
Of which: significant actual verification of accounts receivable
Unit: RMB
Whether occurred
because of
Name of the entity Nature Amount Reason Procedure
connected party
transactions
Notes:
(4) Top Five of Account Receivable of Ending Balance Collected by Arrears Party
Name of the entity Ending balance Proportion% Relationship with the Time
Company
Customer A 54,515,497.24 6.92% Non-connected party Within 1 year
Customer B 39,218,442.31 4.98% Non-connected party Within 1 year
Customer C 28,175,923.26 3.58% Non-connected party Within 1 year
Customer D 23,109,918.27 2.93% Non-connected party Within 1 year
Customer E 22,371,921.70 2.84% Non-connected party Within 1 year
Total 167,391,702.78 21.25%
107
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
(5) Derecogniziton of Account Receivable due to the Transfer of Financial Assets
(6) The Amount of the Assets and Liabilities Formed due to the Transfer and the Continued Involvement of
Accounts Receivable
Other notes:
6. Prepayment
(1) List by Aging Analysis:
Unit: RMB
Ending balance Beginning balance
Aging
Amount Proportion Amount Proportion
Within 1 year 187,293,540.68 87.54% 106,169,940.89 81.48%
1 to 2 years 26,326,652.46 12.30% 23,790,082.66 18.26%
Over 3ears 337,286.50 0.16% 337,286.50 0.26%
Total 213,957,479.64 -- 130,297,310.05 --
Notes of the reasons of the prepayment ages over 1 year with significant amount but failed settled in time:
(2) Top 5 of the Ending Balance of the Prepayment Collected according to the Prepayment Target
Name of the entity Ending amount Proportion (%) Time Reason
China Paper Corporation 86,075,703.10 40.23% Within 1 year Did not arrived in the
settlement period
Customer B 24,072,558.33 11.25% Within 1 year Did not arrived in the
settlement period
Customer C 17,898,042.83 8.37% Within 1 year Did not arrived in the
settlement period
Customer D 16,424,935.47 7.68% Within 1 year Did not arrived in the
settlement period
Customer E 8,872,664.26 4.15% Within 1 year Did not arrived in the
settlement period
Total 153,343,903.99 71.67%
Other notes:
7. Interest Receivable
(1) Category of Interest Receivable
Unit: RMB
108
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Item Ending balance Beginning balance
Fixed time deposits 633,440.15 141,388.09
Total 633,440.15 141,388.09
(2) Significant Overdue Interest
Whether occurred
Entity Ending balance Overdue time Overdue reason impairment and its
judgment basis
Other notes:
8. Dividend Receivable
(1) Dividend Receivable
Unit: RMB
Item (or investees) Ending balance Beginning balance
(2) Significant Dividend Receivable Aged over 1 Year
Unit: RMB
Whether occurred
Item (or investees) Ending balance Aging Reason impairment and its
judgment basis
Other notes:
9. Other Accounts Receivable
(1) Other Account Receivable Classified by Category
Unit: RMB
Ending balance Beginning balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Category Withdra
Carrying Carrying
Proportio wal Proportio Withdrawal
Amount Amount value Amount Amount value
n proportio n proportion
n
Other accounts
receivable with 18,690,7 18,582,4 108,227.0 18,582, 18,582,48
40.25% 99.42% 40.04% 100.00%
significant single 08.21 81.20 1 481.20 1.20
amount for which
109
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
bad debt provision
separately accrued
Other accounts
receivable withdrawn
21,550,2 1,513,21 20,037,04 21,621, 1,513,213 20,108,143.
bad debt provision 46.41% 7.02% 46.60% 7.00%
61.27 3.18 8.09 356.32 .18 14
according to credit
risks characteristics
Other accounts
receivable with
insignificant single 6,198,52 6,198,52 6,198,5 6,198,529
13.35% 100.00% 13.36% 100.00%
amount for which 9.18 9.18 29.18 .18
bad debt provision
separately accrued
46,439,4 26,294,2 20,145,27 46,402, 26,294,22 20,108,143.
Total 100.00% 56.62% 100.00% 56.67%
98.66 23.56 5.10 366.70 3.56 14
Other accounts receivable with significant single amount for which bad debt provision separately accrued at the end of the period
√ Applicable □ Not applicable
Unit: RMB
Ending balance
Other accounts
Other accounts
receivable Bad debt provision Withdrawal proportion Withdrawal reason
receivable
Hong Kong Hang Fung
Holdings Limited Co., 12,690,708.21 12,582,481.20 99.15% Not expected to recover
Ltd.
Zhuhai Yidesheng
6,000,000.00 6,000,000.00 100.00% Not expected to recover
Industrial Co., Ltd.
Total 18,690,708.21 18,582,481.20 -- --
Among these groups, other accounts receivable adopting aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
Ending balance
Aging
Other accounts receivable Bad debt provision Withdrawal proportion
Subentry within 1 year
1-3 months 3,540,176.25
4-12 months 12,059,406.43 603,110.03 5.00%
Subtotal of within 1 year 15,599,582.68 603,110.03 3.87%
1 to 2 years 4,201,942.26 420,194.23 10.00%
2 to 3 years 1,281,530.81 256,306.16 20.00%
110
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Over 3 years 467,205.52 233,602.76 50.00%
3-4 years 441,205.52 220,602.76 50.00%
Over 5 years 26,000.00 13,000.00 50.00%
Total 21,550,261.27 1,513,213.18 7.02%
Notes:
Among these groups, other accounts receivable adopting balance percentage method to withdraw bad debt provision
□ Applicable √ Not applicable
Among these groups, other accounts receivable adopting other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
(2) Bad Debt Provision Withdrawal, Reversed or Recovered in the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB 0.00; the amount of the reversed or
collected part during the Reporting Period was of RMB0.00.
Significant amount of reversed or recovered bad debt provision;
Unit: RMB
Name of the entity Reversed or collected amount Method
(3) Particulars of the Actual Verification of Other Accounts Receivable during the Reporting Period
Unit: RMB
Item Amount
Of which: significant actual verification of other accounts receivable
Unit: RMB
Whether occurred
because of
Name of the entity Nature Amount Reason Procedure
connected party
transactions
Notes of write-off other accounts receivable:
(4) Other Account Receivable Classified by Account Nature
Unit: RMB
Nature Ending carrying amount Beginning carrying amount
Margin 3,354,666.50 5,129,666.50
Pretty cash 1,289,352.88 1,563,520.43
Freight and miscellaneous charges on
3,702,137.42 3,088,597.59
behalf
Compensation for victim’s families on 9,760,000.00 9,760,000.00
111
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
behalf
Other intercourse funds 28,333,341.86 26,860,582.18
Total 46,439,498.66 46,402,366.70
(5) Top 5 of the Ending Balance of the Other Accounts Receivable Collected according to the Arrears Party
Unit: RMB
Ending balance of
Name of the entity Nature Ending balance Aging Proportion%
bad debt provision
Other intercourse
Customer A 12,690,708.21 Over 3 years 27.33% 12,582,481.20
funds
Payment of
Customer B compensation on 9,760,000.00 Within 1 year 21.02% 488,000.00
behalf
Other intercourse
Customer C 6,000,000.00 Over 3 years 12.92% 6,000,000.00
funds
Customer D Margin 2,000,000.00 Over 3 years 4.31% 2,000,000.00
Customer E Margin 1,520,000.00 1 to 2 years 3.27% 152,000.00
Total -- 31,970,708.21 -- 68.84% 21,222,481.20
(6) Account Receivable Involving Government Subsidies
Unit: RMB
Project of government Estimated recovering
Name of the entity Ending balance Ending aging
subsidies time, amount and basis
(7) Other Account Receivable Derecognized due to the Transfer of Financial Assets
(8) Amount of Transfer Other Account Receivable and Assets and Liabilities Formed by its Continuous
Involvement
Other notes:
The account receivable at the end of the Reporting Period from Compensation for victim’s families on behalf was
RMB9,760,000.00 which was the advance paid by Zhuhai Huafeng Paper Co., Ltd., the Company’s holding
subsidiary, to families of the victims who died in “3.4 Safety Accident”
10. Inventory
(1) Category of Inventory
Unit: RMB
112
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Ending balance Beginning balance
Item Falling price Falling price
Carrying amount Carrying value Carrying amount Carrying value
reserves reserves
Raw materials 277,352,366.51 4,405,881.46 272,946,485.05 307,249,280.55 4,405,881.46 302,843,399.09
Goods in process 75,225,333.89 75,225,333.89 37,051,626.77 37,051,626.77
Inventory goods 400,107,482.67 6,490,549.35 393,616,933.32 252,774,871.60 6,490,549.35 246,284,322.25
Total 752,685,183.07 10,896,430.81 741,788,752.26 597,075,778.92 10,896,430.81 586,179,348.11
Whether the company need satisfy relevant disclosure requirements stated in SZSE Industrial Information Disclosure Guidance
No.4---Listed Company Specialized in Seed Industry and Planting Businesses or not?
No
(2) Falling Price Reserves of Inventory
Unit: RMB
Increase Decrease
Beginning
Item Reverse or Ending balance
balance Withdrawal Other Other
write-off
Raw materials 4,405,881.46 4,405,881.46
Inventory goods 6,490,549.35 6,490,549.35
Total 10,896,430.81 10,896,430.81
(3) Notes to the Ending Balance of Inventory Including Capitalized Borrowing Expense
(4) Completed but Unsettled Assets Generated from Construction Contacts at the Period-end
Unit: RMB
Item Amount
Other notes:
11. Held-for-sale Assets
Unit: RMB
Estimated disposal
Item Ending carrying value Fair value Estimated disposal time
expense
Other notes:
12. Non-current Assets Due Within 1 Year
Unit: RMB
113
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Item Ending balance Beginning balance
Other notes:
13. Other Current Assets
Unit: RMB
Item Ending balance Beginning balance
The VAT deduction 27,831,329.21 22,185,700.04
Structured Deposits 1,000,000.00
Advance Payment of corporate income tax 13,826.63
Damaged property to be disposed for
20,961,100.36
typhoon
Total 27,831,329.21 44,160,627.03
Other notes:
For the damaged properties to be disposed for typhoon in the Reporting Period, the Company has received the compensation from the
insurance company.
14. Available-for-sale Financial Assets
(1) List of Available-for-sale Financial Assets
Unit: RMB
Ending balance Beginning balance
Item Carrying Depreciation Carrying Depreciation
Carrying value Carrying value
amount reserves amount reserves
Available-for-sale equity
627,643,841.04 627,643,841.04 627,643,841.04 627,643,841.04
instruments:
Measured at cost 627,643,841.04 627,643,841.04 627,643,841.04 627,643,841.04
Total 627,643,841.04 627,643,841.04 627,643,841.04 627,643,841.04
(2) Available-for-sale Financial Assets Measured by Fair Value at the Period-end
Unit: RMB
Available-for-sale equity Available-for-sale debt
Category Total
instruments instruments
(3) Available-for-sale Financial Assets Measured by Cost at the Period-end
Unit: RMB
114
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Ending balance Beginning balance Shareholdi Cash
ng bonus of
Investee Period-beg Period-beg proportion the
Increase Decrease Period-end Increase Decrease Period-end
inning inning among the Reporting
investees Period
China
Guangfa
288,700.00 288,700.00 0.00%
Bank Co.,
Ltd.
China
Chengtong
627,355,14 627,355,14
Finance 10.00%
1.04 1.04
Corporatio
n Ltd.
627,643,84 627,643,84
Total --
1.04 1.04
(4) Changes in Depreciation of Available-for-sale Financial Assets during the Reporting Period
Unit: RMB
Available-for-sale equity Available-for-sale debt
Category Total
instruments instruments
(5) Notes to the Available-for-sale Equity Instrument with Serious Fall or Non-transient Fall in Ending Fair
Value but without Provisions for Impairment
Unit: RMB
Item of
Falling scope of Withdrawn Reason for not
available-for-sale Duration of
Investment cost Ending fair value fair value against impairment withdrawing the
equity falling (month)
the cost amount impairment
instruments
Other notes
(1) In 2015, the Company was transferred 0.0004248% of shares of China Guangfa Bank Co., Ltd. by its former
subsidiary Foshan Chengtong Paper Co., Ltd. that has been disposed.
(2) The Company’s former associated enterprise China Chengtong Finance Corporation Ltd. increased its
registered capital by RMB4 billion in this year, of which 0.3 billion shares were invested by the Company at
RMB1.32 per share. The actual investment was RMB396 million. After the capital increase, the proportion of
shares in China Chengtong Finance Corporation Ltd. held by the Company decreased from 20.00% to 10.00%
without control or joint control rights as well as significant influence. The Company would transfer the investment
in China Chengtong Finance Corporation Ltd. to available-for-sale financial assets that would be measured at cost.
No serious or non-transient falling happened to the available-for-sale equity instruments at the end of the period,
thus the depreciation reserves were not withdrawn.
115
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
15. Held-to-maturity Investment
(1) List of Held-to-maturity Investment
Unit: RMB
Ending balance Beginning balance
Item Depreciation Depreciation
Carrying amount Carrying value Carrying amount Carrying value
reserves reserves
(2) Significant Held-to-maturity Investment at the End of the Period
Unit: RMB
Item Par value Coupon rate Actual interest rate Due date
(3) Re-classified Held-to-maturity Investment in the Current Period
Other notes
16. Long-term Accounts Receivable
(1) List of Long-term Accounts Receivable
Unit: RMB
Ending balance Beginning balance
Interval of
Item Carrying Bad debt Carrying Bad debt
Carrying value Carrying value discount rate
amount provision amount provision
(2) Long-term Accounts Receivable Derecognized Due to the Transfer of Financial Assets
(3) Amount of Assets and Liabilities Generated from the Transfer and Continuous Involvement of
Long-term Accounts Receivable
Other notes
17. Long-term Equity Investment
Unit: RMB
Increase/decrease Ending
Additiona Gains and Adjustme Cash Withdraw balance
Beginnin Reduced Changes Ending
Investees l losses nt of bonus or al of of
g balance investmen of other Other balance
investmen recognize other profits depreciati depreciati
t equity
t d under comprehe announce on on
116
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
the equity nsive d to issue reserves reserves
method income
I. Joint ventures
II. Associated enterprises
Guangdo
ng
Chengton 8,294,365 -88,375.9 8,205,989
g .17 2 .25
Logistics
Co., Ltd.
8,294,365 -88,375.9 8,205,989
Subtotal
.17 2 .25
8,294,365 -88,375.9 8,205,989
Total
.17 2 .25
Other notes
(1) In 2012, the subsidiary of the Company Zhuhai S.E.Z.Hongta Renheng Paper Co., Ltd. held 24% of the shares
of Guangdong Chengtong Logistics Co., Ltd. with significant influences, and the equity method shall be applied.
On 31 March 2013, Guangdong Chengtong Logistics Co., Ltd. executed the shares withdrawal and assets
reduction [(Singapore) Renheng Industry Co., Ltd. (holding 25% shares) withdrew the equity of Guangdong
Chengtong Logistics Co., Ltd.]. Therefore, the shareholding proportion of Guangdong Chengtong Logistics Co.,
Ltd. by the subsidiary of the Company Zhuhai S.E.Z.Hongta Renheng Paper Co., Ltd. increased from 24% to 32%
with significant influences, and shall be measured by equity method.
18. Investment Property
(1) Investment Property Adopted the Cost Measurement Mode
√ Applicable □ Not applicable
Unit: RMB
Item Houses and buildings Land use right Construction in progress Total
I. Original carrying value
1. Beginning balance 46,506,036.02 46,506,036.02
2. Increased amount of
the period
(1) Outsourcing
(2) Transfer from
inventory\fixed
assets\construction in
progress
(3) Enterprise
117
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
combination increase
3. Decreased amount of
the period
(1) Disposal
(2) Other transfer
4. Ending balance 46,506,036.02 46,506,036.02
II. Accumulative
depreciation and
accumulative
amortization
1. Beginning balance 14,413,679.73 14,413,679.73
2. Increased amount of
337,709.62 337,709.62
the period
(1) Withdrawal or
337,709.62 337,709.62
amortization
3. Decreased amount of
the period
(1) Disposal
(2) Other transfer
4. Ending balance 14,751,389.35 14,751,389.35
III. Depreciation reserves
1. Beginning balance
2. Increased amount of
the period
(1) Withdrawal
3. Decreased amount of
the period
(1) Disposal
(2) Other transfer
4. Ending balance
118
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
IV. Carrying value
1. Ending carrying value 31,754,646.67 31,754,646.67
2. Beginning carrying
32,092,356.29 32,092,356.29
value
(2) Investment Property Adopted the Fair Value Measurement Mode
□ Applicable √ Not applicable
(3) Investment Property Failed to Accomplish Certification of Property
Unit: RMB
Item Carrying value Reason
Other notes
19. Fixed Assets
(1) List of Fixed Assets
Unit: RMB
Machinery Transportation Electronic
Houses and
Item equipment equipment and Total
buildings
others
I. Original carrying
value
1. Beginning balance 1,158,249,569.78 2,825,912,365.48 44,645,338.25 134,213,664.23 4,163,020,937.74
2. Increased amount
1,033,530.43 5,927,743.51 1,871,380.27 2,155,319.91 10,987,974.12
of the period
(1) Purchase 1,033,530.43 4,773,734.80 5,807,265.23
(2) Transfer from
construction in 1,154,008.71
progress
(3) Enterprise
combination increase
3. Decreased amount
9,556,272.61 2,001,898.65 1,383,367.71 12,941,538.97
of the period
(1) Disposal or Scrap 9,556,272.61 2,001,898.65 1,383,367.71 12,941,538.97
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
4. Ending balance 1,159,283,100.21 2,822,283,836.38 44,514,819.87 134,985,616.43 4,161,067,372.89
II. Accumulative
depreciation
1. Beginning balance 400,525,039.42 1,247,659,071.06 38,150,002.83 97,705,678.03 1,784,039,791.34
2. Increased amount
16,690,144.63 54,272,717.98 1,022,156.72 4,069,178.42 76,054,197.75
of the period
(1) Withdrawal 16,690,144.63 54,272,717.98 1,022,156.72 4,069,178.42 76,054,197.75
3. Decreased amount
4,843,132.71 1,739,735.16 1,327,689.48 7,910,557.35
of the period
(1) Disposal or Scrap 4,843,132.71 1,739,735.16 1,327,689.48 7,910,557.35
4. Ending balance 417,215,184.05 1,297,088,656.33 37,432,424.39 100,447,166.97 1,852,183,431.74
III. Depreciation
reserves
1. Beginning balance 76,679,757.00 76,679,757.00
2. Increased amount
of the period
(1) Withdrawal
3. Decreased amount
of the period
(1) Disposal or Scrap
4. Ending balance 76,679,757.00 76,679,757.00
IV. Carrying value
1. Ending carrying
742,067,916.16 1,448,515,423.05 7,082,395.48 34,538,449.46 2,232,204,184.15
value
2. Beginning
757,724,530.36 1,501,573,537.42 6,495,335.42 36,507,986.20 2,302,301,389.40
carrying value
(2) List of Temporarily Idle Fixed Assets
Unit: RMB
Original carrying Accumulative Impairment
Item Carrying value Note
value depreciation provision
Naught
120
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
(3) Fixed Assets Leased in by Financing Lease
Unit: RMB
Accumulative
Item Original carrying value Impairment provision Carrying value
depreciation
Houses and buildings 12,212,610.00 11,601,979.50 610,630.50
Machinery equipment 3,160,000.00 3,002,000.00 158,000.00
Total 15,372,610.00 14,603,979.50 768,630.50
(4) Fixed Assets Leased out by Operation Lease
Unit: RMB
Item Ending carrying value
(5) Fixed Assets Failed to Accomplish Certification of Property
Unit: RMB
Item Carrying value Reason
Property right certificate was under
Houses and buildings 100,958,296.01
process
Other notes
20. Construction in Progress
(1) List of Construction in Progress
Unit: RMB
Ending balance Beginning balance
Item Depreciation Depreciation
Carrying amount Carrying value Carrying amount Carrying value
reserves reserves
BM3 Tetra
5,739,108.55 5,739,108.55 5,168,440.11 5,168,440.11
project
Upscale special
white cardboard 2,480,438.79 2,480,438.79 2,480,438.79 2,480,438.79
BM4 new project
Latex phase II
matching raw
16,695,269.54 16,695,269.54 15,918,047.55 15,918,047.55
material tank
farm project
Advanced 2,431,959.91 2,431,959.91
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
waste-water
treatment and
water reuse
project
Equipment under
7,067,610.63 7,067,610.63 5,047,332.75 5,047,332.75
Construction
BM3 coating
draught fan
energy saving 1,070,085.47 1,070,085.47 1,070,085.47 1,070,085.47
renovation
project
BM3 Reel
alternation of
hydro-acupunctur 1,967,411.17 1,967,411.17 1,967,411.17 1,967,411.17
e renovation
project
Renovation
project on BM3
1,447,975.78 1,447,975.78
Clean-In-Place of
molded net
Renovation
project on BM3 1,302,234.23 1,302,234.23
Broke Pulper
Sewage-delivery
2,648,313.83 2,648,313.83
system
BM2 Self-made
Sizing Starch 1,335,743.71 1,335,743.71
System
Other 7,727,036.23 7,727,036.23 5,232,058.44 5,232,058.44
Total 49,481,227.93 49,481,227.93 39,315,774.19 39,315,774.19
(2) Changes in Significant Construction in Progress during the Reporting Period
Unit: RMB
Proporti Accumul Of Capitaliz
on of ated which: ation rate
Transferr
Beginnin Other accumul amount amount of
Increase ed in Ending Job Capital
Item Budget g decrease ated of of interests
d amount fixed balance schedule resources
balance d amount investme interest capitaliz for the
assets
nt in capitaliz ed Reportin
construct ation interests g Period
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
ions to for the
budget Reportin
g Period
BM3
18,730,0 5,168,44 570,668. 5,739,10
Tetra 0.31% 30.64% Other
00.00 0.11 44 8.55
project
Latex
phase II
matching
raw 20,000,0 15,918,0 777,221. 16,695,2
0.83% 83.48% Other
material 00.00 47.55 99 69.54
tank
farm
project
Advance
d
waste-w
ater
18,000,0 2,431,95 2,431,95
treatmen 0.00 0.00% 0.00% Other
00.00 9.91 9.91
t and
water
reuse
project
BM3
coating
draught
fan
1,300,00 1,070,08 1,070,08
energy 0.82% 82.31% Other
0.00 5.47 5.47
saving
renovati
on
project
BM3
Reel
alternati
on of
hydro-ac 2,000,00 1,967,41 1,967,41
0.98% 98.37% Other
upunctur 0.00 1.17 1.17
e
renovati
on
project
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60,030,0 26,555,9 1,347,89 2,431,95 25,471,8
Total -- -- --
00.00 44.21 0.43 9.91 74.73
(3) List of the Withdrawal of the Impairment Provision for Construction in Progress
Unit: RMB
Item Amount withdrawn Reason for withdrawal
Other notes
The construction in progress transferred into fixed assets in the Reporting Period was of RMB1,154,008.71.
21. Engineering Materials
Unit: RMB
Item Ending balance Beginning balance
Other notes:
22. Liquidation of Fixed Assets
Unit: RMB
Item Ending balance Beginning balance
Other notes:
23. Productive Living Assets
(1) Productive Living Assets Adopted Cost Measurement Mode
□ Applicable √ Not applicable
(2) Productive Living Assets Adopted Fair Value Measurement Mode
□ Applicable √ Not applicable
24. Oil and Gas Assets
□ Applicable √ Not applicable
25. Intangible Assets
(1) List of Intangible Assets
Unit: RMB
Item Land use right Patent right Non-patent right Software and other Total
124
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
I. Original carrying
value
1. Beginning balance 146,970,093.89 56,822,865.97 8,653,219.40 212,446,179.26
2. Increased amount
71,759.83 71,759.83
of the period
(1) Purchase 71,759.83 71,759.83
(2) Internal R&D
(3) Business
combination increase
3. Decreased amount
14,532,760.00 14,532,760.00
of the period
(1) Disposal 14,532,760.00 14,532,760.00
4. Ending balance 132,437,333.89 56,822,865.97 8,724,979.23 197,985,179.09
II. Accumulated
amortization
1. Beginning balance 49,595,308.00 19,221,477.69 3,912,178.35 72,728,964.04
2. Increased amount
3,184,380.78 2,444,212.73 508,352.32 6,136,945.83
of the period
(1) Withdrawal 3,184,380.78 2,444,212.73 508,352.32 6,136,945.83
3. Decreased amount
579,352.48 579,352.48
of the period
(1) Disposal 579,352.48 579,352.48
4. Ending balance 52,200,336.30 21,665,690.42 4,420,530.67 78,286,557.39
III. Depreciation
reserves
1. Beginning balance
2. Increased amount
of the period
(1) Withdrawal
3. Decreased amount
of the period
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
(1) Disposal
4. Ending balance
IV. Carrying value
1. Ending carrying
80,236,997.59 35,157,175.55 4,304,448.56 119,698,621.70
value
2. Beginning
97,374,785.89 37,601,388.28 4,741,041.05 139,717,215.22
carrying value
The proportion of intangible assets formed from the internal R&D of the Company at the Period-end to the ending balance of
intangible assets was 29.37%.
(2) Land Use Right with Certificate of Title Uncompleted
Unit: RMB
Item Carrying value Reason
Other notes:
26. R&D Expense
Unit: RMB
Beginning Ending
Item Increase Decrease
balance balance
New-type
cigarette box 2,778,163.77 2,778,163.77
board
Total 2,778,163.77 2,778,163.77
Other notes
27. Goodwill
(1) Original Carrying Value of Goodwill
Unit: RMB
Name of the
invested units or Beginning
Increase Decrease Ending balance
events generating balance
goodwill
Zhuhai S.E.Z.
Hongta Renheng 9,129,025.01 9,129,025.01
Paper Co., Ltd.
126
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Zhuhai Golden
Pheasant
2,418,280.28 2,418,280.28
Chemicals Co.,
Ltd.
Total 11,547,305.29 11,547,305.29
(2) Impairment Provision for Goodwill
Unit: RMB
Name of the
invested units or Beginning
Increase Decrease Ending balance
events generating balance
goodwill
Notes of the testing process of goodwill impairment, parameters and the recognition method of goodwill impairment losses:
Other notes
On 30 June 2009, the Company obtained the control of Zhuhai S.E.Z. Hongta Renheng Paper Co., Ltd. through
business combination not under the same control with the combination cost RMB808,448,702.06, and obtained
the fair value of the identifiable net assets of the Company RMB799,319,677.05. Combination cost being larger
than the fair value of the identifiable net assets balance formed goodwill RMB9,129,025.01. At the end of the
period, through combining the analysis of the present value of the expected future cash flow of the assets with the
evaluation of assets group of the two production line equipment and recoverable amount, there was no sign of
goodwill impairment, thus no provision for impairment loss.
On 1 July 2012, the Company obtained the control of Zhuhai Golden Pheasant Chemical Co., Ltd. through
business combination not under the same control with the combination cost RMB69,000,000.00, and obtained the
fair value of the identifiable net assets of the Company RMB66,581,719.72. Combination cost being larger than
the fair value of the identifiable net assets balance formed goodwill RMB2,418,280.28. At the end of the period,
through the analysis of the present value of the expected future cash flow of Zhuhai Golden Pheasant Chemical
Co., Ltd., there was no sign of goodwill impairment, thus no provision for impairment loss.
28. Long-term Prepaid Expense
Unit: RMB
Amortization Other decreased
Item Beginning balance Increased amount Ending balance
amount of the period amount
Decoration expense
213,321.10 22,454.85 190,866.25
for rent-in plant
Fee for technical
232,806.84 43,651.32 189,155.52
service
Maintaining
renovation of
2,810,762.23 217,758.53 607,245.79 2,421,274.97
construction
project
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Total 3,256,890.17 217,758.53 673,351.96 2,801,296.74
Other notes
29. Deferred Income Tax Assets/Deferred Income Tax Liabilities
(1) Deferred Income Tax Assets that Had not Been Set-off
Unit: RMB
Ending balance Beginning balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference assets difference assets
Provision for impairment
144,093,941.83 21,629,140.63 144,093,941.83 21,629,140.63
of assets
Withholding sales
11,004,330.01 1,650,649.50 11,004,330.01 1,650,649.50
agency fee
Provisions 760,457.18 114,068.58 760,457.18 114,068.58
Accrued expenses 25,610,056.09 3,841,508.41 25,610,056.09 3,841,508.41
Net amount of change in
fair value of trading 2,394,879.25 359,231.89 2,394,879.25 359,231.89
financial assets
Total 183,863,664.36 27,594,599.01 183,863,664.36 27,594,599.01
(2) Deferred Income Tax Liabilities Had Not Been Off-set
Unit: RMB
Ending balance Beginning balance
Item Deductible temporary Deferred income tax Deductible temporary Deferred income tax
difference liabilities difference liabilities
Assets evaluation
appreciation in the
14,923,964.07 2,238,594.61 14,923,964.07 2,238,594.61
business combination not
under the same control
Total 14,923,964.07 2,238,594.61 14,923,964.07 2,238,594.61
(3) Deferred Income Tax Assets or Liabilities Listed by Net Amount after Off-set
Unit: RMB
Mutual set-off amount of Ending balance of Mutual set-off amount of Beginning balance of
Item deferred income tax deferred income tax deferred income tax deferred income tax
assets and liabilities at assets or liabilities after assets and liabilities at assets or liabilities after
128
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
the period-end off-set the period-begin off-set
Deferred income tax
27,594,599.01 27,594,599.01
assets
Deferred income tax
2,238,594.61 2,238,594.61
liabilities
(4) List of Unrecognized Deferred Income Tax Assets
Unit: RMB
Item Ending balance Beginning balance
Deductible losses 67,269,298.96 67,269,298.96
Provision for fixed assets impairment 201,333.37 201,333.37
Total 67,470,632.33 67,470,632.33
(5) Deductible Losses of Unrecognized Deferred Income Tax Assets will Due in the Following Years
Unit: RMB
Years Ending amount Beginning amount Notes
Y2018 13,206,217.94 13,206,217.94
Y2019
Y2020 49,162,723.17 49,162,723.17
Y2021 1,734,170.90 1,734,170.90
Y2022 3,166,186.95 3,166,186.95
Total 67,269,298.96 67,269,298.96 --
Other notes:
30. Other Non-current Assets
Unit: RMB
Item Ending balance Beginning balance
Prepayment of equipment 807,067.64 5,235,044.33
Total 807,067.64 5,235,044.33
Other notes:
31. Short-term Borrowings
(1) Category of Short-term Borrowings
Unit: RMB
129
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Item Ending balance Beginning balance
Pledge loan 210,626,792.00 199,095,460.59
Guaranteed loan 566,146,483.16 698,330,783.93
Total 776,773,275.16 897,426,244.52
Notes of short-term loans category
(1) The pledge loan was generated from the taking of the margin in other monetary capital as the pledge by the
Company.
(2) The guarantee loan was generated from the providing of guarantees for subsidiaries by the Company.
(2) List of the Short-term Borrowings Overdue but Not Returned
The amount of the overdue unpaid short-term borrowings at the period-end was of RMB0.00, of which the significant overdue
unpaid short-term loans are as follows:
Unit: RMB
Borrower Ending balance Interest rate Overdue time Overdue charge rate
Other notes:
32. Financial Liabilities at Fair Value through Profit or Loss
Unit: RMB
Item Ending balance Beginning balance
Financial liabilities specified as measured
by fair value and the changes included in 1,053,987.24 2,394,879.25
the current gains and losses
Total 1,053,987.24 2,394,879.25
Other notes:
The ending balance was the fair value generated from the bank’s foreign exchange contract product purchase by
Zhuhai Hongta Renheng Packing Co., Ltd., the subsidiary of the Company, measured at the difference between
the exchange rate of US dollar locked in the contract and the actual exchange rate on 30 June 2018.
33. Derivative Financial Liabilities
□ Applicable √ Not applicable
34. Notes Payable
Unit: RMB
Category Ending balance Beginning balance
Bank’s acceptance bill 149,811,246.41 8,530,196.41
130
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Total 149,811,246.41 8,530,196.41
The total amount of the due but not paid notes payable at the end of the period was of RMB0.00.
35. Accounts Payable
(1) List of Accounts Payable
Unit: RMB
Item Ending balance Beginning balance
Payment of materials 256,147,086.68 257,450,045.60
Payment of equipment 2,499,931.57 9,163,006.20
Payment of freight 38,568,193.32 53,544,546.45
Other 13,264,452.22 21,089,564.14
Total 310,479,663.79 341,247,162.39
(2) Significant Accounts Payable Aging over One Year
Unit: RMB
Item Ending balance Unpaid/ Un-carry-over reason
TEMBEL INC. 3,502,696.97 Unsettled
Marubeni Corporation 2,235,321.52 Unsettled
Guangzhou Dingsheng Ind. And Trade Co.,
2,419,153.83 Unsettled
Ltd.
Total 8,157,172.32 --
Other notes:
36. Advances from Customers
(1) List of Advances from Customers
Unit: RMB
Item Ending balance Beginning balance
Within 1 year 26,447,207.64 21,099,280.81
1-2 years 151,892.92 185,873.32
2-3 years 266,511.43 239,511.43
Over 3 years 245,079.52 245,079.52
Total 27,110,691.51 21,769,745.08
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
(2) Significant Advances from Customers Aging over One Year
Unit: RMB
Item Ending balance Unpaid/ Un-carry-over reason
(3) Settled but Uncompleted Projects Formed by Construction Contracts at the Period-end
Unit: RMB
Item Amount
Other notes:
37. Payroll Payable
(1) List of Payroll Payable
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
I. Short-term salary 29,068,767.86 89,789,649.82 98,173,588.53 20,684,829.15
II. Post-employment
benefit-defined 193,390.47 7,856,603.53 7,835,184.42 214,809.58
contribution plans
III. Termination benefits 650,280.00 650,280.00
Total 29,262,158.33 98,296,533.35 106,659,052.95 20,899,638.73
(2) List of Short-term Salary
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
1. Salary, bonus,
19,456,610.16 79,244,821.97 88,290,578.52 10,410,853.61
allowance, subsidy
2. Employee welfare 2,721,288.15 2,721,288.15
3. Social insurance 3,292,652.15 3,292,652.15
Of which: 1. Medical
2,829,877.54 2,829,877.54
insurance premiums
Work-related injury
202,676.52 202,676.52
insurance
Maternity insurance 260,098.09 260,098.09
4. Housing fund 2,545,004.68 2,545,004.68
5. Labor union budget 9,612,157.70 1,985,882.87 1,324,065.03 10,273,975.54
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
and employee education
budget
Total 29,068,767.86 89,789,649.82 98,173,588.53 20,684,829.15
(3) List of Defined Contribution Plans
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
1. Basic pension benefits 6,042,497.55 6,042,497.55
2. Unemployment
321,860.57 321,860.57
insurance
3. Annuity 193,390.47 1,492,245.41 1,470,826.30 214,809.58
Total 193,390.47 7,856,603.53 7,835,184.42 214,809.58
Other notes:
38. Taxes Payable
Unit: RMB
Item Ending balance Beginning balance
VAT 7,130,757.07 9,173,589.49
Corporate income tax 5,284,725.08 4,829,691.00
Personal income tax 363,834.65 220,969.58
Urban maintenance and construction tax 319,610.08 443,966.24
Property tax 4,134,286.77 3,997,526.54
Education Surcharge 228,292.87 317,118.82
Stamp tax -144,445.32 149,295.59
Land use tax 1,260,808.68 2,264,945.84
Environmental tariff 85,433.54
Total 18,663,303.42 21,397,103.10
Other notes:
The environmental tariff was newly added in the Reporting Period.
39. Interest Payable
Unit: RMB
Item Ending balance Beginning balance
Enterprise bond interest 9,402,739.73 4,455,452.06
Interest payable of short-term borrowings 8,183,018.11 3,354,342.94
133
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Interest payable of borrowings provided by
1,166,184.87 55,585.83
connected parties
Total 18,751,942.71 7,865,380.83
List of the significant overdue unpaid interest:
Unit: RMB
Borrower Overdue amount Overdue reasons
Other notes:
40. Dividends Payable
Unit: RMB
Item Ending balance Beginning balance
Ordinary share dividends 29,913,098.67 12,116,789.76
Total 29,913,098.67 12,116,789.76
Other notes, including significant dividends payable unpaid for over one year, the unpaid reason shall be disclosed:
The dividends payable at the period-end were mainly the profits that should be paid to the non-controlling
shareholders of the subsidiary-Zhuhai Golden Pheasant Chemical Co., Ltd.
41. Other Accounts Payable
(1) Other Accounts Payable Listed by Nature of Account
Unit: RMB
Item Ending balance Beginning balance
Pledged and margin 17,773,753.37 13,124,079.64
Prepayment 7,626,643.60 6,232,605.94
Capital of related parties 58,110,384.98 8,110,384.98
Final payment of engineering 1,885,480.20 1,158,579.69
Other 8,090,263.33 2,203,530.86
Total 93,486,525.48 30,829,181.11
(2) Significant Other Accounts Payable Aging over One Year
Unit: RMB
Item Ending balance Unpaid/Un-carry-over reason
Other notes
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
42. Held-for-sale Liabilities
Unit: RMB
Item Ending balance Beginning balance
Other notes
43. Non-current Liabilities Due within One Year
Unit: RMB
Item Ending balance Beginning balance
Bonds payable due within one year 199,985,829.38 199,834,258.85
Total 199,985,829.38 199,834,258.85
Other notes
The bonds has been cashed completely when due on 31 July 2018. For more details, please refer to the announcement
(Announcement No.: 2018-049) disclosed by the Company.
44. Other Current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Increase/decrease of the short-term bonds payable:
Unit: RMB
Amortizat
Withdraw
ion of Repayme
The al of
Bonds Issuing Issuing Beginnin premium nt in the Ending
Par value Duration current interest
name date amount g balance and Reporting balance
issue by par
depreciati Period
value
on
Other notes
45. Long-term Borrowings
(1) Category of Long-term Borrowings
Unit: RMB
Item Ending balance Beginning balance
Guaranteed loan 300,000,000.00 200,000,000.00
Total 300,000,000.00 200,000,000.00
Notes to the category of long-term borrowings:
Other notes, including the interval of interest rate:
135
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
The guaranteed loan was a 2-year loan from the Guangdong Branch of the Export-Import Bank of China obtained
by Zhuhai Hongta Renheng Packing Co., Ltd., the subsidiary of the Company, through the joint liability guarantee
provided by the Company, of which RMB0.2 billion with the interest rate of 4.5125% will be due in February
2019 and RMB0.1 billion with the interest rate of 5.375% will be due in March 2020.
46. Bonds Payable
(1) List of Bonds Payable
Unit: RMB
Item Ending balance Beginning balance
(2) Increase/Decrease of Bonds Payable (Excluding Other Financial Instrument Classified as Financial
Liabilities such as Preferred Shares and Perpetual Bonds)
Unit: RMB
(3) Notes to the Conditions and Time of the Shares Transfer of the Convertible Corporate Bonds
(4) Notes to Other Financial Instrument Classified as Financial Liabilities
Basic situation of other financial instrument such as preferred shares and perpetual bonds outstanding at the period-end
Changes in financial instrument such as preferred shares and perpetual bonds outstanding at the period-end
Unit: RMB
Outstanding Period-beginning Increase Decrease Period-end
financial Carrying Carrying Carrying Carrying
Amount Amount Amount Amount
instrument value value value value
Notes to basis for the classification of other financial instrument as financial liabilities
Other notes
47. Long-term Accounts Payable
(1) Long-term Accounts Payable Listed by Nature of Account
Unit: RMB
Item Ending balance Beginning balance
Financial leasing 825,912.17
Loan from non-financial institution 16,000,000.00 16,000,000.00
Total 16,000,000.00 16,825,912.17
Other notes:
The loan from non-financial institution was a loan of RMB16,000,000.00 with 4.35% of annual interest rate
136
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
obtained by Zhuhai Golden Pheasant Chemical Co., Ltd., the holding subsidiary of the Company, provided by its
shareholder, Zhejiang Golden Pheasant Group Co., Ltd.
48. Long-term Payroll Payable
(1) List of Long-term Payroll Payable
Unit: RMB
Item Ending balance Beginning balance
(2) Changes in Defined Benefit Plans
Obligation present value of defined benefit plans:
Unit: RMB
Item Reporting period Same period of last year
Plan assets:
Unit: RMB
Item Reporting period Same period of last year
Net liabilities (net assets) of defined benefit plans:
Unit: RMB
Item Reporting period Same period of last year
Notes of influence of content of defined benefit plans and its relevant risks to the future cash flow, time and uncertainty of the
Company:
Notes to the results of significant actuarial assumptions and sensitivity analysis of defined benefit plans:
Other notes:
49. Specific Accounts Payable
Unit: RMB
Reason for
Item Beginning balance Increase Decrease Ending balance
formation
Other notes:
50. Provisions
Unit: RMB
Item Ending balance Beginning balance Reason for formation
Predicted losses resulting from
Product quality guarantee 1,366,445.61 1,366,445.61
any product quality problem
Total 1,366,445.61 1,366,445.61 --
137
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Other notes, including notes to related significant assumptions and evaluation of significant provisions:
51. Deferred Income
Unit: RMB
Reason for
Item Beginning balance Increase Decrease Ending balance
formation
Government
30,773,540.27 2,358,270.19 1,528,842.28 31,602,968.18
subsidies
Total 30,773,540.27 2,358,270.19 1,528,842.28 31,602,968.18 --
Item involving government subsidies:
Unit: RMB
Amount Amount
recorded into recorded into Amount
Amount of Related to
Beginning non-operatin other income offset cost in Other Ending
Item newly assets/related
balance g income in in the the Reporting changes balance
subsidy income
the Reporting Reporting Period
Period Period
Renovation
project of the
information
system of
Related to
paper-making 720,000.00 16,000.00 704,000.00
assets
enterprise
energy
management
center
No. 1 paper
machine
Related to
update & 224,000.00 4,800.00 219,200.00
assets
renovation
project
Liquid paper
Related to
renovation 233,333.20 17,500.02 215,833.18
assets
project
Renovation
project of the
information Related to
1,096,666.71 139,999.98 956,666.73
system of assets
energy
management
138
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
center
Steam
condensation
water Related to
1,536,000.00 192,000.00 1,344,000.00
recycling and assets
energy saving
projects
Subsidy of
improvement
Related to
of Zhuhai 1,398,794.33 349,698.62 1,049,095.71
assets
motor
efficiency
Subsidy of
latex phase II
production
Related to
line 228,000.00 228,000.00
assets
technological
transformatio
n
BM1 ink-jet
printer
system and
drive system
10,031,627.7 Related to
upgrade 223,753.78 9,807,873.93
1 assets
synthesis
technique
transformatio
n project
Zhuhai
Gaolan Port
national
treasury
equipment Related to
960,266.59 20,800.02 939,466.57
renewal assets
(Robot
Application)
special fund
subsidies
Energy
management Related to
891,746.71 113,839.98 777,906.73
center assets
energy-savin
139
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
g
technological
innovation
support fund
Post-awarded
subsidies of
Automatic Related to
4,268,161.40 89,502.84 4,178,658.56
packaging assets
line technical
innovation
Post-awarded
subsidies of
HCB-Turn
Nozzle
Related to
optimization 1,754,105.57 36,417.42 1,717,688.15
assets
and
technological
transformatio
n project
Post-awarded
subsidies of
TP liquid
food packing
Related to
board 4,937,748.66 4,937,748.66
assets
synthesis
technique
transformatio
n project
Post-awarded
subsidies of
MES
technical
renovation Related to
1,893,089.39 324,529.62 1,568,559.77
project of assets
Zhuhai
Huafeng
Paper Co.,
Ltd.
Support
funds for
Related to
restoring 600,000.00 600,000.00
assets
production
after typhoon
140
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Subsidy for
renovation II
on power
Related to
transforming 2,358,270.19 2,358,270.19
assets
and
distribution
equipment
30,773,540.2 31,602,968.1
Total 2,358,270.19 1,528,842.28 --
7 8
Other notes:
52. Other Non-current Liabilities
Unit: RMB
Item Ending balance Beginning balance
Other notes:
53. Share Capital
Unit: RMB
Increase/decrease (+/-)
Beginning
New shares Bonus issue Ending balance
balance Bonus shares Other Subtotal
issued from profit
The sum of
505,425,000.00 505,425,000.00
shares
Other notes:
54. Other Equity Instrument
(1) The Basic Information of Other Financial Instruments such as Preferred Stock and Perpetual Bond
Outstanding at the End of the Period
(2) Changes in Financial Instruments such as Preferred Stock and Perpetual Bond Outstanding at the End
of the Period
Unit: RMB
Outstanding Period-beginning Increase Decrease Period-end
financial Carrying Carrying Carrying Carrying
Amount Amount Amount Amount
instruments value value value value
The current changes in other equity instrument and the corresponding reasons and the basis of the relevant accounting treatment
Other notes:
141
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
55. Capital Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Capital premium
256,362,525.38 256,362,525.38
(premium on stock)
Other capital reserves 459,848.04 459,848.04
Total 256,822,373.42 256,822,373.42
Other notes, including changes and reason of change:
56. Treasury Shares
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Other notes, including changes and reason of change:
57. Other Comprehensive Income
Unit: RMB
Reporting Period
Less: recorded
in other
Attributable
comprehensive Attributable
Income to owners
income in to
Beginning before Less: of the Ending
Item prior period non-control
balance taxation in Income tax Company balance
and transferred ling
the Current expense as the
in profit or interests
Period parent after
loss in the after tax
tax
Current
Period
II. Other comprehensive income that
169,714.3
may subsequently be reclassified to 169,714.39
9
profit or loss
Of which: Share of other
comprehensive income of investees 169,714.3
169,714.39
that will be reclassified to profit or 9
loss under equity method
169,714.3
Total of other comprehensive income 169,714.39
9
Other notes, including the adjustment of the effective gain/loss on cash flow hedges to the initial recognized amount:
142
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
58. Specific Reserve
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Other notes, including changes and reason of change:
59. Surplus Reserves
Unit: RMB
Item Beginning balance Increase Decrease Ending balance
Statutory surplus
192,647,450.61 192,647,450.61
reserves
Total 192,647,450.61 192,647,450.61
Notes, including changes and reason of change:
60. Retained Profits
Unit: RMB
Item Reporting Period Same period of last year
Beginning balance of retained profits before
1,027,794,897.70 1,027,703,010.59
adjustments
Beginning balance of retained profits after
1,027,794,897.79 1,027,703,010.59
adjustments
Add: Net profit attributable to owners of the
-15,299,762.79 12,487,648.99
Company as the parent
Dividend of ordinary shares payable 22,053,834.14 22,821,841.15
Ending retained profits 990,441,300.86 1,017,368,818.43
List of adjustment of beginning retained profits:
(1) RMB0.00 beginning retained profits was affected by retrospective adjustment conducted according to the Accounting Standards
for Business Enterprises and relevant new regulations.
(2) RMB0.00 beginning retained profits was affected by changes in accounting policies.
(3) RMB0.00 beginning retained profits was affected by correction of significant accounting errors.
(4) RMB0.00 beginning retained profits was affected by changes in combination scope arising from same control.
(5) RMB0.00 beginning retained profits was affected totally by other adjustments.
61. Operating Revenue and Cost of Sales
Unit: RMB
143
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Reporting Period Same Period of last year
Item
Operating revenue Cost of sales Operating revenue Cost of sales
Main operations 1,646,488,580.95 1,500,276,960.43 1,523,112,335.30 1,340,382,118.18
Other operations 100,667,759.97 94,861,978.25 44,086,866.92 35,834,516.23
Total 1,747,156,340.92 1,595,138,938.68 1,567,199,202.22 1,376,216,634.41
62. Taxes and Surtaxes
Unit: RMB
Item Reporting Period Same Period of last year
Urban maintenance and construction tax 2,234,486.66 3,328,884.81
Education Surcharge 1,607,145.55 2,380,405.64
Property tax 4,181,949.65 2,655,782.38
Land use tax 1,155,803.20 1,035,476.86
Vehicle and vessel use tax 11,114.21 22,241.76
Stamp Duty 739,190.35 975,469.93
Environmental tariff 184,939.09
Total 10,114,628.71 10,398,261.38
Other notes:
The environmental tariff was newly added in the Reporting Period.
63. Selling Expense
Unit: RMB
Item Reporting Period Same Period of last year
Salary and benefits 6,126,482.73 6,721,431.29
Freight and miscellaneous charges 50,297,643.49 59,110,703.87
Business entertainment fees 2,355,830.99 3,006,468.08
Warehousing fees/rental fees 4,346,575.09 1,480,042.06
Packing charges 4,844,772.59 4,021,497.51
Other 2,026,450.79 2,455,914.12
Total 69,997,755.68 76,796,056.93
Other notes:
64. Administrative Expense
Unit: RMB
144
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Item Reporting Period Same Period of last year
Salary 22,682,884.61 17,141,761.15
Social insurance 9,707,779.29 10,409,625.10
Taxation 2,894.54 713.76
Depreciation 7,324,462.45 5,280,229.08
Office expenses 3,140,805.52 1,198,518.53
Business entertainment fees 890,084.10 815,729.67
Other 23,339,768.60 26,602,933.18
Total 67,088,679.11 61,449,510.47
Other notes:
65. Finance Costs
Unit: RMB
Item Reporting Period Same Period of last year
Interest expense 46,082,510.39 60,706,032.85
Less: Interest income 1,573,895.57 14,169,653.48
Foreign exchange gains or losses -1,056,338.33 2,874,650.33
Other 2,484,172.25 58,671.56
Total 45,936,448.74 49,469,701.26
Other notes:
66. Asset Impairment Loss
Unit: RMB
Item Reporting Period Same Period of last year
I. Bad debt loss -59,432.48
Total -59,432.48
Other notes:
67. Gain on Changes in Fair Value
Unit: RMB
Sources Reporting Period Same period of last year
Financial liabilities at fair value through
1,340,892.01
profit or loss
Total 1,340,892.01
Other notes:
145
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
The gains on the change in fair value was the gains on changes in fair value due to the changes in foreign
exchange rate of FX Forward signed by the Company’s subsidiary-Zhuhai Hongta Renheng Packing Co., Ltd.
68. Investment Income
Unit: RMB
Item Reporting Period Same Period of last year
Long-term equity investment income
-88,375.92 16,267,328.42
accounted by equity method
Total -88,375.92 16,267,328.42
Other notes:
69. Asset Disposal Income
Unit: RMB
Sources Reporting Period Same period of last year
Gains or losses from disposal of fixed
68,414.74 -23,474.80
assets
Total 68,414.74 -23,474.80
70. Other Income
Unit: RMB
Sources Reporting Period Same period of last year
Amortization of government subsidies in
1,528,842.28 1,359,634.62
deferred income
Subsidy for enterprise R&D 1,288,000.00 530,700.00
Project subsidy for high-tech enterprises 302,000.00
Standardized strategic specific funds 23,100.00 80,000.00
Subsidy for promoting employment (social
14,557.35
insurance subsidy)
Patent grants and others 370,386.14 38,400.00
Government subsidy from Zhuhai
International Container Terminals (Gaolan) 493,500.00
Limited
Specific funds for technology development 805,000.00
Surplus subsidies for the Guangdong
Project in the Complete Trash-cleaning 450,000.00
Project
146
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Subsidy for improvement of
106,200.00
electro-mechanic performance
Supporting fund for disaster relief and
169,000.00
production resumption
Compensation for losses caused by the
production suspension due to the 5,690,035.00
interruption of power supply
Total 9,069,363.42 4,179,991.97
71. Non-operating Income
Unit: RMB
Amount recorded in the current
Item Reporting Period Same Period of last year
non-recurring profit or loss
Other 1,600,770.29 2,077,465.21 1,600,770.29
Total 1,600,770.29 2,077,465.21 1,600,770.29
Government subsidies recorded into current profit or loss
Unit: RMB
Whether
influence the Special Related to
Distribution Distribution Reporting Same period
Item Nature profits or subsidy or assets/related
entity reason Period of last year
losses of the not income
year or not
Other notes:
72. Non-operating Expense
Unit: RMB
Amount recorded in the current
Item Reporting Period Same Period of last year
non-recurring profit or loss
Other 930,302.34 41,617.20 930,302.34
Total 930,302.34 41,617.20 930,302.34
Other notes:
The increase in non-operating expense was mainly losses generated by abnormal cessation.
73. Income Tax Expense
(1) List of Income Tax Expense
Unit: RMB
147
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Item Reporting Period Same Period of last year
Current income tax expense 2,962,396.75 96,393.17
Total 2,962,396.75 96,393.17
(2) Adjustment Process of Accounting Profit and Income Tax Expense
Unit: RMB
Item Reporting Period
Profit before taxation -29,999,915.32
Current income tax expense accounted at statutory/applicable tax
2,079,785.96
rate
Influence of applying different tax rates by subsidiaries -666,822.19
Influence of income tax before adjustment -542,714.87
Influence of deductable temporary difference or deductable
losses of unrecognized deferred income tax in the Reporting 2,092,147.85
Period
Income tax expense 2,962,396.75
Other notes
74. Other Comprehensive Income
Refer to Note 57 for details.
75. Cash Flow Statement
(1) Cash Generated from Other Operating Activities
Unit: RMB
Item Reporting Period Same Period of last year
Government subsidies 14,620,469.92 2,575,107.35
Interest income from deposits in banks 1,065,623.85 3,786,417.17
Cash pledge 4,840,265.19 2,995,438.82
Intercourse funds 51,289,766.80 31,078,254.27
Insurance indemnity 14,495,853.54 534,498.77
Other 4,476,822.68 4,265,511.43
Total 90,788,801.98 45,235,227.81
Notes:
148
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
(2) Cash Used in Other Operating Activities
Unit: RMB
Item Reporting Period Same Period of last year
Utilities 805,005.73 2,131,962.95
Repair charge 1,712,016.02 1,039,174.01
Transport charge 396,080.12 304,173.31
Business entertainment expenses 2,501,271.39 3,312,259.55
Rental fees 3,145,769.80 1,001,934.70
Business travel charge 1,977,241.19 2,639,391.15
Emission charges 2,864,750.05 2,081,949.73
Handling charge for banks 4,319,357.78 1,294,501.90
Premium 497,040.79 3,429,623.26
Charge for the agency 2,122,258.55 3,122,993.34
Intercourse funds 1,629,491.28 3,182,689.06
Correspondence 625,555.10 612,765.17
Vehicle charge 950,964.12 1,872,359.74
Other 17,379,738.87 19,893,889.09
Total 40,926,540.79 45,919,666.96
Notes:
(3) Cash Generated from Other Investing Activities
Unit: RMB
Item Reporting Period Same Period of last year
Notes:
(4) Cash Used in Other Investing Activities
Unit: RMB
Item Reporting Period Same Period of last year
Notes:
(5) Cash Generated from Other Financing Activities
Unit: RMB
Item Reporting Period Same Period of last year
Restricted monetary capital as margin or 33,400,956.90 109,000,000.00
149
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
pledge
Total 33,400,956.90 109,000,000.00
Notes:
(6) Cash Used in Other Financing Activities
Unit: RMB
Item Reporting Period Same Period of last year
Restricted monetary capital as margin or
159,238,064.51 129,018,017.46
pledge
Total 159,238,064.51 129,018,017.46
Notes:
76. Supplemental Information for Cash Flow Statement
(1) Supplemental Information for Cash Flow Statement
Unit: RMB
Supplemental information Reporting Period Same period of last year
1. Reconciliation of net profit to net cash
-- --
flows generated from operating activities
Net profit -32,962,312.07 15,232,328.20
Add: Provision for impairment of assets -59,432.48
Depreciation of fixed assets, oil-gas assets,
76,391,907.37 77,045,836.22
and productive living assets
Amortization of intangible assets 6,136,945.83 5,423,418.58
Amortization of long-term prepaid expenses 673,351.96 627,890.62
Losses from disposal of fixed assets,
intangible assets and other long-lived assets -68,414.74 -134,195.10
(gains: negative)
Losses from changes in fair value (gains:
-1,340,892.01
negative)
Finance costs (gains: negative) 46,082,510.39 49,469,701.26
Investment loss (gains: negative) 88,375.92 -16,267,328.42
Decrease in inventory (gains: negative) -155,609,404.15 -41,167,407.70
Decrease in accounts receivable generated
21,336,141.46 -456,470,884.35
from operating activities (gains: negative)
Increase in accounts payable used in 108,124,208.63 -240,892,656.88
150
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
operating activities (decrease: negative)
Net cash generated from/used in operating
68,792,986.11 -607,133,297.57
activities
2. Significant investing and financing
activities without involvement of cash -- --
receipts and payments
3. Net increase/decrease of cash and cash
-- --
equivalent:
Ending balance of cash 194,374,798.71 464,981,711.09
Less: beginning balance of cash 254,251,911.75 533,995,466.41
Net increase in cash and cash equivalents -59,877,113.04 -69,013,755.32
(2) Net Cash Paid For Acquisition of Subsidiaries
Unit: RMB
Amount
Of which: --
Of which: --
Of which: --
Other notes:
(3) Net Cash Receive from Disposal of the Subsidiaries
Unit: RMB
Amount
Of which: --
Of which: --
Of which: --
Other notes:
(4) Cash and Cash Equivalent
Unit: RMB
Item Ending balance Beginning balance
I. Cash 194,374,798.71 254,251,911.75
Including: Cash on hand 208,623.57 173,601.37
Bank deposit on demand 194,166,175.14 254,078,310.38
III. Ending balance of cash and cash 194,374,798.71 254,251,911.75
151
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
equivalents
Other notes:
77. Notes to Items of the Statements of Changes in Owners’ Equity
Notes to the name of “Other” of ending balance of the same period of last year adjusted and the amount adjusted:
78. Assets with Restricted Ownership or Right to Use
Unit: RMB
Item Ending carrying value Reason for restriction
Monetary capital 160,238,064.51 Margin
Notes payable 48,419,769.97 Notes pledged
Total 208,657,834.48 --
Other notes:
79. Foreign Currency Monetary Items
(1) Foreign Currency Monetary Items
Unit: RMB
Ending foreign currency Ending balance converted to
Item Exchange rate
balance RMB
Of which: USD 19,631,139.16 6.62 129,896,626.85
HKD 91,724.21 0.84 77,339.44
GBP 248,037.03 8.66 2,146,785.30
Of which: USD 4,328,051.41 6.62 28,636,948.55
HKD 2,982,178.46 0.84 2,514,274.67
Short-term borrowings --
Of which: USD 24,464,721.33 6.62 161,873,275.16
Prepayment --
Of which: USD 17,315,926.15 6.62 114,572,556.91
EUR 247,655.60 7.65 1,894,936.81
Other accounts receivable --
Of which: HKD 15,052,435.31 0.84 12,690,708.21
Accounts payable --
Of which: USD 16,587,215.03 6.62 109,750,967.00
EUR 6,329.30 7.65 48,428.66
152
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Other notes:
(2) Notes to Overseas Entities Including: for Significant Oversea Entities, Main Operating Place, Recording
Currency and Selection Basis Shall Be Disclosed; if there Are Changes in Recording Currency, Relevant
Reasons Shall Be Disclosed.
□ Applicable √ Not applicable
80. Arbitrage
Qualitative and quantitative information of relevant arbitrage instruments, hedged risk in line with the type of arbitrage to disclose:
81. Other
VIII. Changes of Consolidation Scope
1. Business Combination Not under the Same Control
(1) Business Combination Not under the Same Control during the Reporting Period
Unit: RMB
Income of Net profits of
Time and
Cost of Recognition acquiree from acquiree from
Name of place of Proportion of Way to gain
gaining the Purchase date basis of the purchase the purchase
acquiree gaining the equity the equity
equity purchase date date to date to
equity
period-end period-end
Other notes:
(2) Combination Cost and Goodwill
Unit: RMB
Combination cost
Note to determination method of the fair value of the combination cost, consideration and changes:
The main formation reason for the large goodwill:
Other notes:
(3) The Identifiable Assets and Liabilities of Acquiree on Purchase Date
Unit: RMB
Fair value on purchase date Carrying value on purchase date
The determination method of the fair value of identifiable assets and liabilities
153
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Contingent liability of acquiree undertaken in the business combination
Other notes:
(4) Gains or losses from Re-measurement of Equity Held before the Purchase Date at Fair Value
Whether there is a transaction that through multiple transaction step by step to realize business combination and gaining the control
during the Reporting Period
□ Yes √ No
(5) Notes to Reasonable Consideration or Fair Value of Identifiable Assets and Liabilities of the Acquiree
that Cannot Be Determined on the Acquisition Date or during the Period-end of the Merger
(6) Other Notes
2. Business Combination under the Same Control
(1) Business Combination under the Same Control during the Reporting Period
Unit: RMB
Income from Net profits
the from the Income of the Net profits of
Recognition
period-begin period-begin acquiree the acquiree
Combined Proportion of Combination basis of
Basis ning to the ning to the during the during the
party the equity date combination
combination combination period of period of
date
date of the date of the comparison comparison
acquiree acquiree
Other notes:
(2) Combination Cost
Unit: RMB
Combination cost
Note to contingent consideration and other changes:
Other notes:
(3) The Carrying Value of Assets and Liabilities of the Combined Party on the Combination Date
Unit: RMB
Combination date Period-end of the last period
Contingent liabilities of the combined party undertaken in the business combination
Other notes:
154
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
3. Counter Purchase
Basic information of trading, the basis of transactions constitute counter purchase, the retain assets , liabilities of the listed companies
whether constituted a business and its basis, the determination of the combination costs, the amount and calculation of adjusted rights
and interests in accordance with the equity transaction process.
4. The Disposal of Subsidiary
Whether there is a single disposal of the investment to the subsidiary and lost control?
□ Yes √ No
Whether there are several disposals of the investment to the subsidiary and lost controls?
□ Yes √ No
5. Changes in Combination Scope for Other Reasons
Note to changes in combination scope for other reasons (such as newly establishment or liquidation of subsidiaries, etc.) and relevant
information:
6. Other
IX. Equity in Other Entities
1. Equity in Subsidiary
(1) Subsidiaries
Main operating Nature of Holding percentage (%)
Name Registration place Way of gaining
place business Directly Indirectly
Business
Zhuhai S.E.Z.
Manufacturing combination not
Hongta Renheng Zhuhai Zhuhai 41.97%
industry under the same
Paper Co., Ltd.
control
Business
Zhuhai Huafeng Manufacturing combination
Zhuhai Zhuhai 100.00%
Paper Co., Ltd. industry under the same
control
Zhuhai Golden Business
Pheasant Manufacturing combination not
Zhuhai Zhuhai 51.00%
Chemical Co., industry under the same
Ltd. control
Huaxin (Foshan) Manufacturing
Foshan Foshan 100.00% Establishment
Color Printing industry
155
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Co., Ltd.
Kunshan Focai
Manufacturing
Packaging & Suzhou Suzhou 100.00% Establishment
industry
Printing Co., Ltd.
Zhejiang Hongta
Renheng
Manufacturing
Packaging Jiaxing Jiaxing 100.00% Establishment
industry
Technology Co.,
Ltd.
Notes: holding proportion in subsidiary different from voting proportion:
On acquisition date as 30 June 2009, the Company gained 40.176% shares of Hongta Renheng by the way of
capital and share increase. There were five directors in the Board of Directors of Hongta Renheng, of which the
Company sent three directors, Yunnan Hongta Group Co., Ltd. and Renheng Industrial Co., Ltd. sent one director
respectively. The Chairman of the Board (Legal representative) was sent by the Company, General Manager and
Chief Financial Officer were also sent by the Company, so as to control the routine producing and operating
activities of Hongta Renheng, and thus it shall be consolidated into the consolidated statement of the Company
since Jul. 2009.
On 1 Feb. 2010, Hongta Renheng finished relevant change procedures for capital increase in industry and
commerce, and thus shares of Hongta Renheng held by the Company increased to 41.9653%. Meanwhile, the
contract and Articles of Association of Hongta Renheng was revised according to the resolution of the Board of
Directors of Hongta Renheng on 25 Feb. 2010. Afterwards, the directors of the Board of Directors changed from
five to seven, as the Company sent four directors, Yunnan Hongta Group Co., Ltd. sent two directors, Renheng
Industrial Co., Ltd. sent one, Dragon State International Limited didn’t send any director. The Company still can
decide the financial and operating policies of Hongta Renheng, and will continue to include it into the
consolidated financial statements of the Company in this year.
Basis of holding half or less voting rights but still controlling the investee and holding more than half of the voting rights but not
controlling the investee:
Significant structural entities and controlling basis in the scope of combination:
Basis of determining whether the Company is the agent or the principal:
Other Notes:
(2) Significant Non-wholly-owned Subsidiary
Unit: RMB
The profit or loss Declaring dividends Balance of
Shareholding proportion
attributable to the distributed to non-controlling
Name of non-controlling
non-controlling non-controlling shareholders at the
shareholders
shareholders shareholders period-end
Zhuhai Hongta Renheng
58.03% 7,690,488.36 0.00 100,435,409.44
Packaging Co., Ltd.
Holding proportion of minority shareholder in subsidiary different from voting proportion:
156
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Other notes:
(3) The Main Financial Information of Significant Not Wholly-owned Subsidiary
Unit: RMB
Ending balance Beginning balance
Non-curr Non-curr Non-curr Non-curr
Name Current Total Current Total Current Total Current Total
ent ent ent ent
assets assets liabilities liabilities assets assets liabilities liabilities
assets liability assets liability
Zhuhai
Hongta
Renheng 2,294,26 2,283,06 4,577,33 1,292,32 547,338, 1,839,66 2,066,88 2,341,31 4,408,19 1,247,24 374,334, 1,621,58
Packagin 1,132.28 9,887.05 1,019.33 8,216.58 220.19 6,436.77 7,651.66 1,528.10 9,179.76 8,199.38 704.45 2,903.83
g Co.,
Ltd.
Unit: RMB
Reporting Period Same period of last year
Cash flows Cash flows
Total Total
Name Operating from Operating from
Net profit comprehensi Net profit comprehensi
revenue operating revenue operating
ve income ve income
activities activities
Zhuhai
Hongta
1,598,489,61 -35,995,509.2 -35,995,509.2 69,214,338.0 1,440,879,20 -612,704,117.
Renheng -851,936.40 -851,936.40
3.06 3 3 1 6.84 80
Packaging
Co., Ltd.
Other notes:
(4) Significant Restrictions on Using the Assets and Liquidating the Liabilities of the Company
(5) Financial Support or Other Supports Provided to Structural Entities Incorporated into the Scope of
Consolidated Financial Statements
Other notes:
157
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
2. The Transaction of the Company with Its Owner’s Equity Share Changed but Still Controlling the
Subsidiary
(1) Note to the Owner’s Equity Share Changed in Subsidiary
(2) The Transaction’s Influence on the Equity of Non-controlling Shareholders and the Owner's Equity
Attributable to the Company as the Parent
Unit: RMB
Other notes:
3. Equity in Joint Ventures or Associated Enterprises
(1) Significant Joint Ventures or Associated Enterprises
Holding percentage (%) Accounting
treatment of the
Main operating Nature of investment to
Name Registration place
place business Directly Indirectly joint venture or
associated
enterprise
Notes to holding proportion of joint venture or associated enterprise different from voting proportion:
Basis of holding less than 20% of the voting rights but has a significant impact or holding 20% or more voting rights but does not
have a significant impact:
(2) Main Financial Information of Significant Joint Ventures
Unit: RMB
Beginning balance/The same period of last
Ending balance/Reporting Period
year
Other notes:
(3) Main Financial Information of Significant Associated Enterprise
Unit: RMB
Beginning balance/The same period of last
Ending balance/Reporting Period
year
Other notes:
158
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
(4) Summary Financial Information of Insignificant Joint Ventures or Associated Enterprises
Unit: RMB
Beginning balance/The same period of last
Ending balance/Reporting Period
year
Joint venture: -- --
The total of following items according to the
-- --
shareholding proportions
Associated enterprise: -- --
The total of following items according to the
-- --
shareholding proportions
Other notes:
(5) Note to the Significant Restrictions on the Ability of Joint Ventures or Associated Enterprises to
Transfer Funds to the Company
(6) The Excess Loss of Joint Ventures or Associated Enterprises
Unit: RMB
The cumulative recognized The derecognized losses (or the
The accumulative unrecognized
Name losses in previous share of net profit) in Reporting
losses in Reporting Period
accumulatively derecognized Period
Other notes:
(7) The Unrecognized Commitment Related to Investment to Joint Ventures
(8) Contingent Liabilities Related to Investment to Joint Ventures or Associated Enterprises
4. Significant Common Operation
Proportion /share portion
Name Main operating place Registration place Nature of business
Directly Indirectly
Notes to holding proportion or share portion in common operation different from voting proportion:
For common operation as a single entity, basis of classifying as common operation
Other notes:
5. Equity in the Structured Entity Excluded in the Scope of Consolidated Financial Statements
Notes to the structured entity excluded in the scope of consolidated financial statements:
159
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
6. Other
X. The Risk Related to Financial Instruments
XI. The Disclosure of Fair Value
1. Ending Fair Value of Assets and Liabilities at Fair Value
Unit: RMB
Ending fair value
Item Fair value measurement Fair value measurement Fair value measurement
Total
items at level 1 items at level 2 items at level 3
I. Consistent fair value
-- -- -- --
measurement
VI. Financial liabilities
designated to be measured
at fair value and its
1,053,987.24 1,053,987.24
changes be included into
the current gains and
losses
II. Inconsistent fair value
-- -- -- --
measurement
2. Market Price Recognition Basis for Consistent and Inconsistent Fair Value Measurement Items at Level
1
The Company listed the carrying value of financial assets instruments measured at fair value on 31 December
2017 according to three levels of fair value. When the overall fair value classified in three levels, it’s in line with
the first level of three levels of each significant input value used in the calculation of fair value. Definitions of
three levels were as follows:
The first level, the non-adjustable offer of the same assets or liabilities in the active market on the calculation date;
The second level, the directly or indirectly observable input value of related assets or liabilities except the input
value on the first level;
The second level input value including: 1)Offer of similar assets or liabilities in the active market; 2) offer of
identical or similar assets or liabilities in the non-active market; 3) Other observable input value except offer,
including the observable interest rate during the interval period of common offer, profit rate curve, implied
volatility and credit spread etc.; 4) the input value for market verification etc..
The third level was the unobserved input value of related assets or liabilities.
160
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
3. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for
Consistent and Inconsistent Fair Value Measurement Items at Level 2
4. Valuation Technique Adopted and Nature and Amount Determination of Important Parameters for
Consistent and Inconsistent Fair Value Measurement Items at Level 3
5. Sensitiveness Analysis on Unobservable Parameters and Adjustment Information between Beginning and
Ending Carrying Value of Consistent Fair Value Measurement Items at Level 3
6. Explain the Reason for Conversion and the Governing Policy when the Conversion Happens if
Conversion Happens among Consistent Fair Value Measurement Items at Different Levels
7. Changes in the Valuation Technique in the Current Period and the Reason for Such Changes
8. Fair Value of Financial Assets and Liabilities Not Measured at Fair Value
9. Other
XII. Connected Party and Connected Transaction
1. Information Related to the Company as the Parent of the Company
Proportion of share Proportion of voting
held by the rights owned by the
Name Registration place Nature of business Registered capital Company as the Company as the
parent against the parent against the
Company (%) Company (%)
Foshan Huaxin
Manufacturing
Development Co., Foshan 457,930,000.00 65.20% 65.20%
industry
Ltd.
China National
Paper Industry Beijing Comprehensive 5,033,000,000.00 65.31% 65.31%
Investment Corp.
China Chengtong
Holdings Group Co., Beijing Comprehensive 11,300,000,000.00 65.31% 65.31%
Ltd.
Notes: information on the Company as the parent:
Foshan Huaxin Development Co., Ltd.:
On 28 June 2005, Foshan Gongying Investment Holding Co., Ltd. transferred 62.1142% shares (capital contribution was RMB
284,440,000) of Foshan Huaxin Development Co., Ltd. to China National Materials Development & Investment Corporation which
has changed its name to China National Paper-industry Investment Corporation. Foshan Huaxin Development Co., Ltd is the parent
company and holds 65.20% shares of the Company.
China National Paper Industry Investment Corp.:
161
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
China National Paper-industry Investment Corporation originally held 0.11% shares of the Company, and China National
Paper-industry Investment Corporation held 65.31% shares of the Company directly and indirectly as the actual controller of the
Company.
China Chengtong Holdings Group Co., Ltd.:
China Chengtong Holdings Group Co., Ltd. holds 100% shares of China National Paper-industry Investment Corporation and has
become the ultimate controller of the Company.
The ultimate controller of the Company is China Chengtong Holdings Group Co., Ltd..
Other notes:
2. Subsidiaries of the Company
Refer to Note IX Equity in Other Entities for details.
3. Information on the Joint Ventures and Associated Enterprises of the Company
Refer to Note IX Equity in Other Entities for details of significant joint ventures or associated enterprises of the Company.
Information on other joint venture or associated enterprise of occurring connected transactions with the Company in Reporting
Period, or forming balance due to connected transactions made in previous period:
Name Relationship with the Company
Guangdong Chengtong Logistics Co., Ltd. Associated enterprise
Other notes:
4. Information on Other Connected Parties
Name Relationship with the Company
Foshan Huaxin Import & Export Co., Ltd. Under the control of the same actual controller
Guangdong Guanhao High-tech Co., Ltd. Under the control of the same actual controller
Dragon State International Limited Under the control of the same ultimate controller
Tianjin Port Free Trade Zone Zhongwu Investment Development
Under the control of the same actual controller
Co., Ltd.
Yueyang Forest & Paper Co., Ltd. Under the control of the same actual controller
Yueyang Antai industrial Co., Ltd Under the control of the same actual controller
Yuanjian Paper Co., Ltd. Under the control of the same actual controller
Hunan Juntai Pulp Paper Co., Ltd. Under the control of the same actual controller
Guangdong Guanhao High-tech Industrial Co., Ltd. Under the control of the same ultimate controller
Dragon State Investment Development Co., Ltd. Under the control of the same ultimate controller
China Chengtong International Co., Ltd. Under the control of the same ultimate controller
HONG KONG DRAGON STATE YAN WING
Under the control of the same ultimate controller
INTERNATIONAL COMPANY
162
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Zhanjiang Guanhao Paper Co., Ltd. Under the control of the same ultimate controller
Under the control of the independent director of the actual
Guangzhou Chenhui Pulp & Paper Trading Co., Ltd.
controller
Chengtong Energy (Guangdong) Co., Ltd. Under the control of the same ultimate controller
Tianjin CMST Chuangshi Logistics Co., Ltd. Under the control of the same ultimate controller
Other notes
5. List of Connected Transactions
(1) Information on Acquisition of Goods and Reception of Labor Service (Unit:RMB’0,000)
Information on acquisition of goods and reception of labor service
Unit: RMB
The approval trade Whether exceed trade Same period of last
Connected party Content Reporting Period
credit credit or not year
China National
Purchase of raw
Paper Industry 214,094,722.75 1,142,360,300.00 No 40,655,817.71
material
Investment Corp.
Guangdong
Purchase of raw
Guanhao High-tech 24,783.31 3,000,000.00 No 110,607.52
material
Co., Ltd.
Tianjin Port Free
Trade Zone
Zhongwu Purchase of raw
10,000,000.00 No 1,054,621.78
Investment material
Development Co.,
Ltd.
Yueyang Antai Purchase of raw
692,400.00 5,500,000.00 No 183,809.40
Industrial Co., Ltd. material
Yueyang Forest & Purchase of raw
171,715.38 50,000,000.00 No
Paper Co., Ltd. material
Guangdong
Purchase of raw
Guanhao High-tech 140,188.95 230,000.00 No
material
Industrial Co., Ltd.
Guangzhou
Chenhui Pulp & Purchase of raw
296,711.81 45,000,000.00 No
Paper Trading Co., material
Ltd.
Guangdong Providing logistics
2,049,320.03 6,450,000.00 No 8,826,501.22
Chengtong service
163
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Logistics Co., Ltd.
Tianjin CMST
Providing logistics
Chuangshi Logistics 13,872,403.69 110,000,000.00 No
service
Co., Ltd.
Information of sales of goods and provision of labor service
Unit: RMB
Connected party Content Reporting Period Same period of last year
China National Paper Industry
Sales of raw material 760,598.86 21,362,968.18
Investment Corp.
Yueyang Forest & Paper Co.,
Sales of products 8,187,800.99 14,220,555.35
Ltd.
Guangdong Guanhao High-tech Sales of products and raw
6,929,987.67 5,826,618.90
Co., Ltd. materials
Zhanjiang Guanhao Paper Co.,
Sales of products 174,670.48 65,290.60
Ltd.
Guangzhou Chenhui Pulp &
Sales of products 29,727,062.28
Paper Trading Co., Ltd.
Notes:
(2) Information on Connected Trusteeship/Contract
Lists of related trusteeship/contract:
Unit: RMB
Name of the Name of the Income
entruster/contract entrustee/ Type Start date Due date Pricing basis recognized in this
ee contractor Reporting Period
Notes:
Lists of entrust/contractee
Unit: RMB
Name of the Name of the Charge
entruster/contract entrustee/ Type Start date Due date Pricing basis recognized in this
ee contractor Reporting Period
Notes:
(3) Information on Connected Lease
The Company was lessor:
Unit: RMB
The lease income confirmed in The lease income confirmed in
Name of lessee Category of leased assets
the Reporting Period the same period of last year
164
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Guangdong Chengtong
Houses and buildings 0.00 267,988.57
Logistics Co., Ltd.
The Company was lessee:
Unit: RMB
The lease fee confirmed in the The lease fee confirmed in the
Name of lessor Category of leased assets
Reporting Period same period of last year
Notes:
(4) Information on Connected Guarantee
The Company was guarantor:
Unit: RMB
Execution accomplished
Secured party Guarantee amount Start date End date
or not
Zhuhai Hongta Renheng
100,000,000.00 23 Feb. 2017 29 Apr. 2017 Yes
Packaging Co., Ltd.
Subtotal 100,000,000.00
Zhuhai Hongta Renheng
70,000,000.00 2 Jan. 2018 13 Mar. 2020 No
Packaging Co., Ltd.
Zhuhai Hongta Renheng
200,000,000.00 28 Feb. 2017 28 Feb. 2019 No
Packaging Co., Ltd.
Zhuhai Hongta Renheng
100,000,000.00 29 Mar. 2018 30 Mar. 2020 No
Packaging Co., Ltd.
Zhuhai Hongta Renheng
330,000,000.00 23 May 2017 22 May 2020 No
Packaging Co., Ltd.
Zhuhai Hongta Renheng
200,000,000.00 1 Mar. 2016 31 Dec. 2019 No
Packaging Co., Ltd.
Zhuhai Hongta Renheng
200,000,000.00 15 Jul. 2017 15 Jul. 2019 No
Packaging Co., Ltd.
Zhuhai Hongta Renheng
100,000,000.00 12 Sep. 2017 31 Mar. 2019 No
Packaging Co., Ltd.
Zhuhai Hongta Renheng
100,000,000.00 10 Nov. 2017 9 Nov. 2019 No
Packaging Co., Ltd.
Zhuhai Hongta Renheng
100,000,000.00 13 Nov. 2017 3 Sep. 2018 No
Packaging Co., Ltd.
Zhuhai Huafeng Paper
350,000,000.00 29 Oct. 2016 28 Oct. 2019 No
Co., Ltd.
Huaxin (Foshan) Color
20,000,000.00 30 Mar. 2018 29 Mar. 2019 No
Printing Co., Ltd.
165
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Huaxin (Foshan) Color
60,000,000.00 1 Jan. 2016 31 Dec. 2020 No
Printing Co., Ltd.
Zhuhai Hongta Renheng
100,000,000.00 28 Jul. 2017 14 May 2018 No
Packaging Co., Ltd.
Subtotal 1,930,000,000.00
Total 2,030,000,000.00
The Company was secured party
Unit: RMB
Execution accomplished
Guarantor: Guarantee amount Start date End date
or not
Notes:
(5) Information on Inter-bank Lending of Capital of Related Parties
Unit: RMB
Connected party Amount Start date End date Note
Borrowing
Foshan Huaxin
7,000,000.00 27 Oct. 2017 31 Dec. 2018
Development Co., Ltd.
China Paper Corporation 50,000,000.00 4 Apr. 2018 31 Dec. 2018
Lending
(6) Information on Assets Transfer and Debt Restructuring by Connected Party
Unit: RMB
Connected party Content Reporting period Same period of last year
(7) Information on Remuneration for Key Management Personnel
Unit: RMB
Item Reporting period Same period of last year
(8) Other Connected Transactions
(1) According to the 1st Meeting of the 5th Board of Directors of 2013 on 18 April, 2013 and 2012 Annual General Meeting on 15
May, 2013, Financial Services Agreement signed by this Company and Chengtong Finance Co., Ltd. and related transaction bills for
financial services were discussed and approved to conduct relevant financial services. The sum of daily maximum outstanding of
deposits and interests on deposit of this Company in Chengtong Finance Co., Ltd. shall not be higher than 5% of the total assets
audited last year (outstanding of deposits excluding loans or settlement amount); the sum of credit extension and interests shall not be
higher than RMB600,000,000; relevant settlement businesses shall also be conducted as required. Up to 30 June 2018, the balance of
166
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
deposits of the Company in Chengtong Finance Co., Ltd. was RMB75,934,765.03.
6. Accounts Receivable and Payable of Connected Party
(1) Accounts Receivable
Unit: RMB
Ending balance Beginning balance
Item Connected party
Carrying amount Bad debt provision Carrying amount Bad debt provision
Guangdong Guanhao
Accounts receivable 4,122,380.38 4,380,668.14
High-tech Co., Ltd.
Yueyang Forest &
Accounts receivable 2,424,424.80 7,043,454.67
Paper Co., Ltd.
Yueyang Antai
Accounts receivable 5,302.10 5,302.10 5,302.10 5,302.10
Industrial Co., Ltd
Foshan Huaxin
Accounts receivable Import & Export 549,882.60 201,380.64 549,882.60 201,380.64
Co., Ltd.
Long Bond
Investment
Accounts receivable 183.36 88.07 176.14 88.07
Development Co.,
Ltd.
Zhanjiang Guanhao
Accounts receivable 202,617.76
Paper Co., Ltd.
Guangzhou Chenhui
Accounts receivable Pulp & Paper 12,220,704.16 2,018,375.33
Trading Co., Ltd.
Accounts receivable Subtotal 19,525,495.16 206,770.81 13,997,858.98 206,770.81
China Paper
Prepayments 86,083,141.10 1,939,495.40
Corporation
Guangzhou Chenhui
Prepayments Pulp & Paper 3,259,470.15
Trading Co., Ltd.
Prepayments Subtotal 86,083,141.10 5,198,965.55
Guangdong
Other accounts
Chengtong Logistics 942,415.87 62,254.41 1,019,540.63 62,254.41
receivable
Co., Ltd.
Other accounts
Subtotal 942,415.87 62,254.41 1,019,540.63 62,254.41
receivable
167
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
(2) Accounts Payable
Unit: RMB
Item Connected party Ending carrying amount Beginning carrying amount
Accounts payable China Paper Corporation 3,481,589.13 19,794,676.49
Guangdong Chengtong
Accounts payable 258,232.44 4,413,891.39
Logistics Co., Ltd.
Guangdong Guanhao High-tech
Accounts payable 28,748.64 135,922.28
Industrial Co., Ltd.
Yueyang Antai Industrial Co.,
Accounts payable 810,108.00 298,400.00
Ltd
Guangzhou Chenhui Pulp &
Accounts payable 1,726,693.75 1,726,693.70
Paper Trading Co., Ltd.
Tianjin Port Free Trade Zone
Accounts payable Zhongwu Investment 2,052,704.73
Development Co., Ltd.
Tianjin CMST Chuangshi
Accounts payable 13,872,403.69
Logistics Co., Ltd.
Accounts payable Subtotal 20,177,775.65 28,422,288.59
Guangzhou Chenhui Pulp &
Advances from customers 227,148.69 1,992,812.03
Paper Trading Co., Ltd.
Advances from customers China Paper Corporation 1,709,515.79 573,515.79
Advances from customers Subtotal 1,936,664.48 2,566,327.82
Foshan Huaxin Development
Interests payable 144,876.66 55,585.83
Co., Ltd.
Interests payable China Paper Corporation 650,000.00
Interests payable Subtotal 794,876.66 55,585.83
Foshan Huaxin Development
Dividends payable 5,931,216.54
Co., Ltd.
Dividends payable Subtotal 5,931,216.54
Guangdong Chengtong
Other accounts payable 1,110,384.98 1,110,384.98
Logistics Co., Ltd.
Foshan Huaxin Development
Other accounts payable 7,000,000.00 7,000,000.00
Co., Ltd.
Other accounts payable China Paper Corporation 50,000,000.00
Tianjin CMST Chuangshi
Other accounts payable 8,200,000.00
Logistics Co., Ltd.
Other accounts payable Subtotal 66,310,384.98 8,110,384.98
168
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
7. Commitments of Connected Party
8. Other
XIII. Stock Payment
1. The Overall Situation of Stock Payment
□ Applicable □ Not applicable
2. The Stock Payment Settled in Equity
□ Applicable □ Not applicable
3. The Stock Payment Settled in Cash
□ Applicable □ Not applicable
4. Modification and Termination of the Stock Payment
Naught
5. Other
XIV. Commitments and Contingency
1. Significant Commitments
Significant commitments on the balance sheet date
As of 30 June 2018, there was no significant commitment for the Company to disclose.
2. Contingency
(1) Significant Contingency on Balance Sheet Date
Pending action, contingency formed by arbitration and its financial influence
1) The Company’s sub-subsidiary Zhuhai Golden Pheasant Chemical Co., Ltd. signed a loan contract with
Guangzhou Hong He Gu Kang Ti Leisure Co., Ltd. (hereinafter referred to as “Hong He Gu Company”) on 12
Dec. 2011, stating that Hong He Gu Company borrowed RMB 500,000 from Zhuhai Golden Pheasant Chemical
Co., Ltd. from 12 Dec. 2011 to 31 May 2012. When the contract expired, Hong He Gu Company shall take the
initiative to repay the loan principal and interest. The legal representative Wang Renhe served as the guarantee of
Hong He Gu Company, but Hong He Gu Company did not paid the loan as agreed when the contract expired.
According to (2015) ZJFPMCZ No. 20 Civil Judgment, Hong He Gu Company shall repay RMB500,000 to the
Company and Wang Renhe shall bare the joint liability for satisfaction. Up to 30 June 2018, Zhuhai Golden
Pheasant Chemical Co., Ltd. withdrawn 100% bad debt provision for the said RMB500,000 payable by Hong He
169
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Gu Company in other accounts receivable for the difficulty of recovery.
2) Up to 30 June 2018, Guangdong Regall Group Co., Ltd. (hereinafter referred to as “Regall Group”) owed the
goods payment of RMB9,919,562.58 to the Company’s subsidiary Zhuhai S.E.Z Hongta Renheng Paper Co., Ltd.
(hereinafter referred to as “Hongta Renheng”) (with an account age over three years). On 28 Mar. 2008, the said
two parties signed an agreement on repayment with wood pulp. According to the said agreement, Regall Group
shall repay wood pulp as the consideration, which shall be executed before 15 May 2008. However, Regall Group
did not perform the said agreement. Up to 31 Oct. 2008, only RMB3,099,200.00 was executed as consideration
for the debt. On 29 Oct. 2008, Hongta Renheng sent a Notice on Terminating Agreement to Regall Group, but
Regall Group asked to continue the execution of the Agreement. On 6 Dec. 2008, Hongta Renheng submitted a
bill of compliant on the goods payment dispute to Guangzhou Huangfu District People’s Court, requesting the
Court to terminate the agreement on repayment with wood pulp and asking Regall Group to repay the goods
payment of RMB10,047,398.58 and take all resulting responsibilities. On 28 June 2009, the Court issued (2009)
HMEC Zi No.72 Civil Judgment, stating that the Company’s Notice on Terminating Agreement was invalid.
Hongta Renheng appealed to Guangzhou Intermediate People’s Court against the decision and Guangzhou
Intermediate People’s Court ruled that the case shall be remanded for retrial in the Court of the first instance. On
12 June 2010, the Court issued (2010) HMEC Zi No.1 Civil Judgment, stating that the Agreement on Setting Debt
off with Pulp Payment was legal and effective and that Regall Group should pay Hongta Renheng the debt of
RMB9,786,596.96. However, as Regall Group wasn’t able to supply pulp, it shall pay RMB9,786, 596.96 back to
Hongta Renheng. Regall Group appealed to Guangzhou Intermediate People’s Court against the decision. On 25
Nov. 2010, in accordance with (2010) SZFMEZ Zi No. 1851 Civil Judgment Letter, the Court rejected the appeal
and maintained the original judgment. Up to 30 June 2018, RMB127,836.00 was received by Hongta Renheng.
Hongta Renheng has withdrawn 100% bad debt provision for the said residual uncollected amount due to the
difficulty of recovery.
3) Up to 30 June 2018, Zhuhai Eastern Zhengtai Power Equipment Co., Ltd. owed the goods payment of RMB
2,925,825.54 to the Company’s subsidiary Hongta Renheng. In line with (2010) XMEC Zi No.641 Civil Judgment,
Hongta Renheng won the appeal and Zhuhai East Zhengtai Power Equipment Co., Ltd. shall pay loans of RMB
2,405,789.44 and corresponding penalty back to Hongta Renheng. Zhuhai East Zhengtai Power Equipment Co.,
Ltd. filed an appeal against the judgment. The court rejected the appeal in the second trial and the decision was
upheld on 12 Oct. 2010. Since such payment was difficult to be collected back, Hongta Renheng withdrew 100%
bad debt provision for the said amount.
4) Up to 30 June 2018, Zhuhai Gongbei Ronghui Trade Co., Ltd. owed the goods payment of RMB1,016,655.73
to the company’s subsidiary Hongta Renheng. Hongta Renheng won the appeal at the first instance in accordance
with (2009) XMEC Zi No. 2174 Civil Judgment, but Zhuhai Gongbei Ronghui Trade Co., Ltd. owned nothing to
execute the judgment. Therefore, the company withdrew 100% bad debt provision for the said amount.
5) Up to 30 June 2018, Shenzhen Xieji Industry Co., Ltd. owed the goods payment of RMB3,760,350.10 to
Hongta Renheng, in accordance with (2011) SZFMEZ Zi No. 1318 Civil Judgment, Hongta Renheng won the
appeal. However Shenzhen Xieji Industry Co., Ltd. was unable to repay. Therefore, it continued to withdraw
100% bad debt provision for the said account receivable.
6) Up to 30 June 2018, Qingdao Donglu Packing Development Co., Ltd. owed the goods payment of RMB
450,000.00 to Hongta Renheng. Hongta Renheng won the appeal at the first instance in accordance with (2010)
NSC Zi No. 20678 Civil Judgment. Although Hongta Renheng won the first instance, there were no properties to
execute the judgment. Therefore, the company withdrew 100% bad debt provision for the said account receivable.
7) Up to 30 June 2018, Foshan Jiahe Paper Trading Co., Ltd. owed the goods payment of RMB4,902,239.70 to
Hongta Renheng. Hongta Renheng won the appeal at the first instance in accordance with (2011) FCFMEC Zi No.
170
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
852 Civil Judgment. Since Hongta Renheng won the first instance, and collected RMB 1.75 million in total. The
collectability of the balance of RMB3,152,239.70 was uncertain. Therefore, the balance of RMB3,152,239.70
shall be withdrawn 100% bad debt provision.
8) Up to 30 June 2018, Kaifeng Boke Printing Co., Ltd. owned the goods payment of RMB4,635,249.60 to
Zhuhai Huafeng Paper Co., Ltd.. In line with (2015) ZJFMECZ No. 609 Civil Judgment, Kaifeng Boke Printing
Co., Ltd shall repay RMB4,635,249.60 and relevant interests. However, Zhuhai Huafeng Paper Co., Ltd. applied
to the court for property attachment prior to lawsuit, freezing corresponding bank deposits owned by the
respondent and closing down the respondent’s land and equipment. Up to 30 June 2018, RMB922,328.60 in total
was not taken back, Corresponding bad debt provision shall be withdrawn for the balance of the account
receivable with uncertainty of collectability at 100%.
9) Zhuhai Bidao Energy Co., Ltd. occupied an area covering 3,535.34 m2 of the company’s subsidiary Hongta
Renheng, and ignored the notice issued by Hongta Renheng about its infringement act. In 2016, Hongta Renheng
prosecuted Zhuhai Baidao Energy Co., Ltd. in Zhuhai Xiangzhou District People’s Court, requiring the other
party to stop its infringement act and pay RMB 2.68 million as the land occupation fee. In accordance with the
(2017) Y04MZ No. 1759 Civil Judgment in which Hongta Renheng won the appeal, Zhuhai Bidao Energy Co.,
Ltd. shall return the occupied land of Hongta Renheng and pay the land occupation fee at RMB48 per square
meter each year.
10）The Company’s subsidiary Zhuhai Golden Pheasant Chemical Co., Ltd. and Hunan Henghan Hi-tech Co., Ltd.
(hereinafter referred to as Hunan Henghan) developed mutual business relationship in October 2013. However,
Hunan Henghan delayed the payment for goods. According to (2015) NMCZi No. 05988 Civil Meditation
Document, Hunan Henghan agreed to pay RMB290,500.00 for goods and RMB10,000.00 as the penalty for
overdue payment at one time to Zhuhai Golden Pheasant Chemical Co., Ltd. before 30 Apr. 2016. Up to30 June
2018, Hunan Henghan paid RMB50,000.00, but the rest payment for goods amounting to RMB240,500.00 and
RMB10,000.00 as the penalty for overdue payment remained unpaid. Zhuhai Golden Pheasant Chemical Co., Ltd.
has withdrawn 100% bad debt provision for RMB240,500.00 that shall be paid by Hunan Henghan due to the
difficulty of recovery.
11) Hengyang Feier Cultural Goods (Electrical Appliances) Co., Ltd. prosecuted Zhuhai Huafeng due to the
dispute in product quality in Zhuhai Jinwan District Intermediate People’s Court in Guangdong Province,
requiring the compensation of RMB2.96 million. According to (2017) Y04MZ No. 728 Civil Judgment, such
claim was rejected.
12) Zhuhai Huafeng brought a lawsuit against Jiangsu Tianxing High-Altitude Anti-Corrosion Engineering Co., Ltd.
and Wuhan Kedio Electric Power Technology Co., Ltd. on 16 Mar. 2017. In the lawsuit, Zhuhai Huafeng asked
Jiangsu Tianxing High-Altitude Anti-Corrosion Engineering Co., Ltd. and Wuhan Kedio Electric Power
Technology Co., Ltd. to repay the compensation amount of RMB 9.76 million that was paid by Zhuhai Huafeng to
relatives of the victims in the 3.4 safety accident for Jiangsu Tianxing High-Altitude Anti-Corrosion Engineering
Co., Ltd. and Wuhan Kedio Electric Power Technology Co., Ltd. Then, Wuhan Kedio Electric Power Technology
Co., Ltd. applied to add Yancheng Xinda High-Altitude Anti-Corrosion Co., Ltd. as a defendant and Yancheng
Xinda High-Altitude Anti-Corrosion Co., Ltd. applied to add Liu Jiechun, the actual constructor, as a defendant.
The court opened a court session on 20 Nov. 2017. As the four defendants requested that the civil compensation
case be tried after the trial of the "3.4 Safety Accident" criminal case and after the liability of each party is
determined, Zhuhai Jinwan District People's Court suspended the trial of the civil compensation case.
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Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
(2) In Despite of no Significant Contingency to Disclose, the Company Shall Also Make Relevant
Statements
There was no significant contingency in the Company.
3. Other
XV. Events after Balance Sheet Date
1. Significant Non-adjusted Events
Unit: RMB
Influence number to the
Reason of inability to estimate
Item Content financial position and operating
influence number
results
2. Profit Distribution
Unit: RMB
3. Sales Return
4. Notes to Other Events after Balance Sheet Date
XVI. Other Significant Events
1. The Accounting Errors Correction in Previous Period
(1) Retrospective Restatement
Unit: RMB
Name of the influenced report
Content Processing program accumulative impact
items during comparison period
(2) Prospective Application
Reason for adopting prospective
Content Processing program
application
172
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
2. Debt Restructuring
3. Assets Replacement
(1) Non-monetary Assets Exchange
(2) Other Assets Replacement
4. Pension Plan
Approved in the 9th meeting of the 6th of Board of Directors in 2016, the company could participate in the
corporate pension plan of China Chengtong Holdings Co., Ltd., and formulate its own pension plan
implementation rules under the framework of China Chengtong Holdings Co., Ltd. in line with China National
Paper Industry Investment Corp. Pension Plan Implementation Rules and the actual situation. Annuity payment is
divided into enterprise contribution and individual contribution. The total annual contribution of the enterprise is
5% of the total salary of the previous year, the individual contribution of the employee is 25% of the contribution
of the enterprise, and the employee who is in service before 1 Jan. 2017 of the Company can volunteer to
participation in the annuity plan.
5. Discontinued Operations
Unit: RMB
Profit from
discontinued
operations
Income tax
Item Income Expense Total profit Net profit attributable to
expense
owners of the
Company as the
parent
Other notes
6. Segment Information
(1) Determination Basis and Accounting Policies of Reportable Segment
(2) The Financial Information of Reportable Segment
Unit: RMB
Item Offset among segment Total
173
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
(3) If there Was no Reportable Segment, or the Total Amount of Assets and Liabilities of Each Reportable
Segment Could not Be Reported, Relevant Reasons Shall Be Clearly Stated
(4) Other Notes
7. Other Significant Transactions and Events with Influence on Investors’ Decision-making
The Company held the 4th Meeting of the 6th Board of Directors on 22 Oct. 2014 and the 2nd Extraordinary
General Meeting of 2014 on 10 Nov. 2014, on which the Proposal on Application of Issuing MTN was reviewed
and approved. Against the capital situation and demand of production and operation of the Company, the
Company planned to apply to National Association of Financial Market Institutional Investors for the issuance of
MTN not less than RMB0.5 billion. The funds raised will be used to supplement the working capital and operating
capital of the Company. On 12 June 2015, the Company received the Notice on Accepting Registration (ZSXZ
[2015]MTNNo.253) from National Association of Financial Market Institutional Investors, in which the
Company’s MTN was consented to be registered. The Company issued the MTN of RMB0.2 billion on 29 July
2015 at the coupon rate of 5.28% with the duration of three years from the issuing date on. The fund raised after
deducting the underwriting fees and custodian fees generated from the bond issuance was RMB199,100,000.00.
The aforesaid MTN has been cashed completely on 31 July 2018.
8. Other
XVII. Notes of Main Items in the Financial Statements of the Company as the Parent
1. Accounts Receivable
(1) Accounts Receivable Disclosed by Category
Unit: RMB
Ending balance Beginning balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Category Withdra
Carrying Carrying
Proportio wal Proportio Withdrawal
Amount Amount value Amount Amount value
n proportio n proportion
n
Accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end:
□ Applicable √ Not applicable
In the groups, accounts receivable adopted aging analysis method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, accounts receivable adopted balance percentage method to withdraw bad debt provision:
□ Applicable √ Not applicable
In the groups, accounts receivable adopted other methods to withdraw bad debt provision:
174
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB0.00; the amount of the reversed or
collected part during the Reporting Period was of RMB0.00.
Of which the bad debt provision reversed or recovered with significant amount in the Reporting Period:
Unit: RMB
Name of the entity Amount Way of recovery
(3) Accounts Receivable with Actual Verification during the Reporting Period
Unit: RMB
Item Amount verified
Of which the verification of significant accounts receivable:
Unit: RMB
Verification Whether generated
Reason for
Name Nature Amount verified procedures from connected
verification
performed transactions
Notes:
(4) Top 5 Accounts Receivable in Ending Balance Collected according to the Arrears Party
(5) Accounts Receivable Derecognized due to the Transfer of Financial Assets
(6) The Amount of Assets and Liabilities Generated from the Transfer and the Continued Involvement of
Accounts Receivable
Other notes:
2. Other Accounts Receivable
(1) Other Accounts Receivable Disclosed by Category
Unit: RMB
Ending balance Beginning balance
Carrying amount Bad debt provision Carrying amount Bad debt provision
Category Withdra
Carrying Carrying
Proportio wal Proportio Withdrawal
Amount Amount value Amount Amount value
n proportio n proportion
n
Other accounts 278,867, 278,867,1 187,029 187,029,66
100.00% 100.00%
receivable withdrawn 133.91 33.91 ,661.31 1.31
175
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
bad debt provision
according to credit
risks characteristics
278,867, 278,867,1 187,029 187,029,66
Total 100.00% 100.00%
133.91 33.91 ,661.31 1.31
Other accounts receivable with significant single amount for which bad debt provision separately accrued at the period-end
□ Applicable √ Not applicable
In the groups, other accounts receivable adopted aging analysis method to withdraw bad debt provision:
√ Applicable □ Not applicable
Unit: RMB
Ending balance
Aging
Other accounts receivable Bad debt provision Withdrawal proportion
Subentry within 1 year
Within 3 months 109,148.78
Subtotal of within 1 year 109,148.78
Total 109,148.78
Notes to the determination basis for the Group:
In the groups, other accounts receivable adopted balance percentage method to withdraw bad debt provision
□ Applicable √ Not applicable
In the groups, other accounts receivable adopted other methods to withdraw bad debt provision:
□ Applicable √ Not applicable
(2) Bad Debt Provision Withdrawn, Reversed or Recovered in the Reporting Period
The withdrawal amount of the bad debt provision during the Reporting Period was of RMB0.00; the amount of the reversed or
collected part during the Reporting Period was of RMB0.00.
Of which the bad debt provision reversed or recovered with significant amount during the Reporting Period:
Unit: RMB
Name of entity Amount reversed or recovered Way of recovery
(3) Other Accounts Receivable with Actual Verification during the Reporting Period
Unit: RMB
Item Amount verified
Of which the verification of significant other accounts receivable:
Unit: RMB
Verification Whether generated
Reason for
Name of entity Nature Amount verified procedures from connected
verification
performed transactions
176
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Notes:
(4) Other Account Receivable Classified by Account Nature
Unit: RMB
Nature Ending carrying amount Beginning carrying amount
Petty cash etc. 109,148.78 263,378.03
Intercourse funds among entities in the
278,757,985.13 186,766,283.28
consolidation scope
Total 278,867,133.91 187,029,661.31
(5) Top 5 Other Accounts Receivable in Ending Balance Collected according to the Arrears Party
Unit: RMB
Proportion to total
ending balance of Ending balance of
Name of the entity Nature Ending balance Aging
other accounts bad debt provision
receivable
Zhuhai Hongta
Borrowings and
Renheng Packaging 177,487,622.89 Within 1 year 63.65%
interests
Co., Ltd.
Huaxin (Foshan)
Borrowings and
Color Printing Co., 101,270,362.24 1-2 years 36.31%
interests
Ltd.
Total -- 278,757,985.13 -- 99.96%
(6) Account Receivable Involving Government Subsidies
Unit: RMB
Project of government Estimated recovering
Name of the entity Ending balance Ending aging
subsidies time, amount and basis
(7) Other Accounts Receivable Derecognized due to the Transfer of Financial Assets
(8) Amount of Assets and Liabilities Generated from the Transfer and Continuous Involvement of Other
Accounts Receivable
Other notes:
3. Long-term Equity Investment
Unit: RMB
177
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Ending balance Beginning balance
Item Depreciation Depreciation
Carrying amount Carrying value Carrying amount Carrying value
reserve reserve
Investment to
1,065,107,442.14 1,065,107,442.14 1,070,107,442.14 1,070,107,442.14
subsidiaries
Total 1,065,107,442.14 1,065,107,442.14 1,070,107,442.14 1,070,107,442.14
(1) Investment to the Subsidiary
Unit: RMB
Depreciation Ending balance of
Beginning
Investee Increase Decrease Ending balance reserve depreciation
balance
withdrawn reserve
Huaxin (Foshan)
Color Printing Co., 122,536,745.03 122,536,745.03
Ltd.
Zhuhai Hongta
Renheng
927,570,697.11 927,570,697.11
Packaging Co.,
Ltd.
Kunshan Focai
Packaging & 5,000,000.00 5,000,000.00 0.00
Printing Co., Ltd.
Zhejiang Hongta
Renheng
Packaging 15,000,000.00 15,000,000.00
Technology Co.,
Ltd.
Total 1,070,107,442.14 5,000,000.00 1,065,107,442.14
(2) Investment to Joint Ventures and Associated Enterprises
Unit: RMB
Increase/decrease
Ending
Gains and Adjustme
Cash Withdraw balance
Additiona losses nt of
Beginnin Reduced Changes bonus or al of Ending of
Investee l recognize other
g balance investmen of other profits impairme Other balance depreciati
investmen d under comprehe
t equity announce nt on
t the equity nsive
d to issue provision reserve
method income
178
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
I. Joint ventures
II. Associated enterprises
(3)Other Notes
(1) On acquisition date as 30 June 2009, the Company gained 40.176% shares of Hongta Renheng by the way of
capital and share increase, there were five directors in the Board of Directors of Hongta Renheng, of which the
Company sent three directors, Yunnan Hongta Group Co., Ltd. and Renheng Industrial Co., Ltd. sent one director
respectively. The Chairman of the Board (Legal representative) was sent by the Company, General Manager and
Chief Financial Officer were also sent by the Company, so as to control the routine producing and operating
activities of Hongta Renheng. Therefore, the company was consolidated into the consolidated statement of the
Company since Jul. 2009.
On 1 Feb. 2010, Hongta Renheng finished the change procedures for capital increase in industry and commerce,
so shares of Hongta Renheng held by the Company increased to 41.9653%. Meanwhile, the company revised the
contract and Articles of Association of Hongta Renheng according to the resolutions of the Board of Directors of
Hongta Renheng on 25 Feb. 2010, after which the directors of the Board of Directors changed from five to seven,
as the Company sent four directors, Yunnan Hongta Group Co., Ltd. sent two directors, Renheng Industrial Co.,
Ltd. sent one, Dragon State International Limited didn’t send any directors. The Company still can decide the
financial and operating policies of Hongta Renheng. Therefore, it’s still within the consolidated scope during this
Reporting Period.
(2) According to the 4th meeting of the 5th Board of Directors held on 28 June 2013, which received and approved
the Proposal on Connected Transaction of Purchasing Equity of Huaxin (Foshan) Color Printing Co., Ltd. Owned
by Longbon International Co., Ltd., the Company purchased 25% equity of Huaxin (Foshan) Color Printing Co.,
Ltd. owned by Longbon International Co., Ltd. through the Equity Transfer Agreement with the base day of the
equity protocol transfer on 30 June 2013. The transfer price took the net assets through assessment of Huaxin
(Foshan) Color Printing Co., Ltd. of RMB199,450,300 as reference, and both parties agreed to transfer 25%
equity with the price of RMB49,862,600. Relevant equity alternation procedures were completed in September
2013. In October 2013, the Company had completely paid the equity purchasing account of RMB49,862,600.
After the equity transfer, Huaxin (Foshan) Color Printing Co., Ltd. became the wholly-owned subsidiary of the
Company.
(3) In accordance with the Proposal on Increasing Investment to Chengtong Finance Co., Ltd. reviewed and
approved on the 4th Meeting of the 7th Board of Directors, the Company increased 0.3 billion shares of investment
to Chengtong Finance Co., Ltd at RMB1.32 per share. The actual investment by the Company was RMB396
million. After the investment increase, the proportion of shares in China Chengtong Finance Corporation Ltd. held
by the Company decreased from 20.00% to 10.00% without control or joint control rights as well as significant
influence. The Company would transfer the investment in China Chengtong Finance Corporation Ltd. to
available-for-sale financial assets that would be measured by cost method and reclassified into available-for-sale
financial assets.
4. Operating Revenue and Cost of Sales
Unit: RMB
Item Reporting Period Same period of last year
179
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Operating revenue Cost of sales Operating revenue Cost of sales
Other notes:
5. Investment Income
Unit: RMB
Item Reporting Period Same period of last year
Long-term equity investment income
4,807,389.97
accounted by cost method
Long-term equity investment income
16,418,417.73
accounted by equity method
Investment income from disposal of
3,214,180.81
long-term equity investment
Total 3,214,180.81 21,225,807.70
6. Other
XVIII. Supplementary Materials
1. Items and Amounts of Non-recurring Profit or Loss
√ Applicable □ Not applicable
Unit: RMB
Item Amount Note
Gains/losses on the disposal of non-current
68,414.74
assets
Government grants recognized in the current
period, except for those acquired in the
ordinary course of business or granted at 9,069,363.42
certain quotas or amounts according to the
government’s unified standards
Gain/loss from change of fair value of
trading assets and liabilities, and investment
gains from disposal of trading financial
assets and liabilities and available-for-sale 1,340,892.01
financial assets, other than valid hedging
related to the Company’s common
businesses
Other non-operating income and expense
670,467.95
other than the above
180
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Less: Income tax effects 1,669,464.19
Non-controlling interests effects 5,575,692.85
Total 3,903,981.08 --
Explain the reasons if the Company classifies an item as an non-recurring gain/loss according to the definition in the Explanatory
Announcement No. 1 on Information Disclosure for Companies Offering Their Securities to the Public—Non-recurring Gains and
Losses, or classifies any extraordinary gain/loss item mentioned in the said explanatory announcement as a recurrent gain/loss item
□ Applicable √ Not applicable
2. Return on Equity and Earnings Per Share
EPS (Yuan/share)
Profit as of Reporting Period Weighted average ROE (%)
EPS-basic EPS-diluted
Net profit attributable to ordinary
-0.78% -0.0303 -0.0303
shareholders of the Company
Net profit attributable to ordinary
shareholders of the Company after
-0.98% -0.0380 -0.0380
deduction of non-recurring profit
and loss
3. Differences between Accounting Data under Domestic and Overseas Accounting Standards
(1) Differences of Net Profit and Net Assets Disclosed in Financial Reports Prepared under International
and Chinese Accounting Standards
□ Applicable √ Not applicable
(2) Differences of Net profit and Net assets Disclosed in Financial Reports Prepared under Overseas and
Chinese Accounting Standards
□ Applicable √ Not applicable
(3) Explain Reasons for the Differences between Accounting Data under Domestic and Overseas
Accounting Standards; for any Adjustment Made to the Difference Existing in the Data Audited by the
Foreign Auditing Agent, Such Foreign Auditing Agent’s Name Shall Be Clearly Stated
4. Other
181
Foshan Huaxin Packaging Co., Ltd. Interim Report 2018
Part XI Documents Available for Reference
1. The financial statements signed and stamped by the Company’s legal representative, Chief Financial Officer and Financial
Manager;
2. The originals of all the announcements and documents disclosed by the Company on the media designated by the China Securities
Regulatory Commission during the Reporting Period; and
3. The 2018 Interim Report with the signature of the Chairman of the Board.
182
