SHANDONG CHENMING PAPER HOLDINGS LIMITED

Transcription

1 SHANDONG CHENMING PAPER HOLDINGS LIMITED 2013 Third Quarter Report I Important Notice The board of directors (the Board ), the supervisory committee (the Supervisory Committee ) and the directors (the Directors ), supervisors (the Supervisors ) and senior management (the Senior Management ) of the Company hereby warrant the truthfulness, accuracy and completeness of the contents of the quarter report (the Quarter Report ), and there are no false representations, misleading statements or material omissions contained in this Report, and are jointly and severally responsible for the liabilities of the Company. All Directors were present at the Board meeting to consider and approve this Quarter Report. Chen Hongguo, head of the Company, Wang Chunfang, head in charge of accounting and Dong Lianming, head of the accounting department (Accounting Officer), declare that they warrant the truthfulness, accuracy and completeness of the financial statements in the Quarter Report. 1

2 II Major Financial Data and Change of Shareholders I. Major accounting data and financial indicators Retrospective adjustment to or restatement of the accounting data for prior years by the Company due to change of accounting policies and correction of accounting errors Yes No As at the end of the reporting period Increase/decrease as at the end of the reporting period compared to the end of the prior year (%) As at the end of the prior year Total assets (RMB) 48,057,436, ,725,421, % Net assets attributable to shareholders of the Company (RMB) 13,884,134, ,759,496, % Increase/decrease for the reporting period compared to the corresponding period of the prior year (%) From the beginning of the year to the end of the reporting period Increase/decrease for the period from the beginning of the year to the end of the reporting period compared to the corresponding period of the prior year (%) The reporting period Revenue (RMB) 5,025,294, % 15,053,196, % Net profit attributable to shareholders of the Company (RMB) 196,585, % 529,995, % Net profit after extraordinary gains or losses attributable to shareholders of the Company (RMB) 144,121, % 278,660, % Net cash flows from operating activities (RMB) 1,044,925, % Basic earnings per share (RMB per share) % % Diluted earnings per share (RMB per share) % % Rate of return on net assets on weighted average basis (%) 1.41% 1.12% 3.81% 2.82% 2

3 Items and amounts of extraordinary gains or losses Applicable Not applicable Unit: RMB Item period from the beginning of the year to the end of the reporting period Note Profit or loss from disposal of -47,773, non-current assets (including write-off of provision for assets impairment) Government grants (except for the 123,234, government grants closely related to the normal operation of the company and granted constantly at a fixed amount or quantity in accordance with a certain standard based on state policies) accounted for in profit or loss for the current period Profit or loss from debt restructuring 100, Non-operating gains and losses other than the above items 287,547, Other gain or loss items within the definition of extraordinary gain or loss 9,229, Gain or loss from the change in fair value of timber assets measured at fair value Less: Effect of income tax 29,428, Effect of minority interests (after tax) 91,575, Total 251,334, Notes for the Company s extraordinary gain or loss items as defined in the Explanatory Announcement on Information Disclosure for Companies Offering Their Securities to the Public No.1 - Extraordinary Gains or Losses and the extraordinary gain or loss items as illustrated in the Explanatory Announcement on Information Disclosure for Companies Offering Their Securities to the Public No.1 - Extraordinary Gains or Losses defined as its recurring gain or loss items. Applicable Not applicable 3

4 II. Total number of shareholders and the shareholding of top ten shareholders as at the end of the reporting period Names of shareholders HKSCC NOMINEES LIMITED SHOUGUANG CHENMING HOLDINGS COMPANY LIMITED Agreed repurchase earmarked account at GF SECURITIES CO., LTD. Zhongrong International Trust Co., Ltd. Haitong Umbrella Bao No. 1 Securities Investment Assembled Funds Trust PLATINUM ASIA FUND Nature of shareholders Overseas legal person State-owned legal person Unit: Share The total number of shareholders was 136,792, of which Total number of shareholders at the end of the reporting period 107,495 were holders of A shares, 28,725 holders of B shares and 572 holders of H shares. Shareholding of top ten shareholders Percentage Number of Share pledged or locked-up of Number of restricted Status shareholding shares shares of (%) held held shares Number Caitong Fund Everbright Bank Yuan Mei No. 1 Assets Mangement Programme BILL & MELINDA GATES FOUNDATION TRUST Yunnan International Trust Co., Ltd. Yunnan Trust Growth 2013 No. 2 Assembled Funds Trust Programme BBH A/C VANGUARD EMERGING MARKETS STOCK INDEX FUND GE ASSET MANAGEMENT FUNDS PLC GEAM CHINA A SHARE FUND Domestic non-state-owned legal person Domestic non-state-owned legal person Overseas legal person Domestic non-state-owned legal person Overseas legal person Domestic non-state-owned legal person Overseas legal person Overseas legal person 18.90% 389,801, % 206,403, % 86,600, % 33,294, % 32,341, % 25,223, % 22,757, % 13,912, % 12,036, % 10,806,

5 Shareholding of top ten shareholders of non-restricted shares Number of non-restricted Class of shares Names of shareholders shares held Class of shares Number HKSCC NOMINEES LIMITED 389,801,000 Overseas listed 389,801,000 foreign shares SHOUGUANG CHENMING HOLDINGS COMPANY LIMITED 206,403,657 RMB ordinary shares 206,403,657 Agreed repurchase earmarked account at GF SECURITIES CO., LTD. Zhongrong International Trust Co., Ltd. Haitong Umbrella Bao No. 1 Securities Investment Assembled Funds Trust 86,600,000 RMB ordinary shares 33,294,538 RMB ordinary shares PLATINUM ASIA FUND 32,341,052 Domestic listed foreign shares Caitong Fund Everbright Bank 25,223,693 RMB ordinary Yuan Mei No. 1 Assets shares Management Programme BILL & MELINDA GATES 22,757,391 RMB ordinary FOUNDATION TRUST shares Yunnan International Trust Co., Ltd. Yunnan Trust Growth 2013 No. 2 Assembled Funds Trust Programme BBH A/C VANGUARD EMERGING MARKETS STOCK INDEX FUND GE ASSET MANAGEMENT FUNDS PLC GEAM CHINA A SHARE FUND Connected relationship or connect-party relationship among the above shareholders 13,912,335 RMB ordinary shares 12,036,985 Domestic listed foreign shares 10,806,649 RMB ordinary shares 86,600,000 33,294,538 32,341,052 25,223,693 22,757,391 13,912,335 12,036,985 10,806,649 Shouguang Chenming Holdings Company Limited, a state-owned legal person shareholder, is not connected with any of the shareholders in the above. It is not a person acting in concert under Administration of Disclosure of Information on the Change of Shareholdings in Listed Companies Procedures. Save in the above, it is not aware of any other shareholders of tradable shares are persons acting in concert and is also not aware of any other shareholders of tradable shares are connected with each others. 5

6 Whether any shareholder of the Company engages in agreed repurchase trading during the reporting period Yes No Unit: share Beneficial shareholders participated in the trading Shouguang Chenming Holdings Company Limited Securities broker company participated in the trading Initially agreed repurchase trading Number Percentage (%) Number Shares repurchase trading during the reporting period Percentage (%) As at the end of the reporting period Number of shareholding Percentage of shareholding (%) GF Securities Co., Ltd. 86,600, % ,600, % On 21 January 2013, Shouguang Chenming Holdings Company Limited, the controlling shareholder of the Company, disposed of 86,600,000 shares, representing 4.20% of the total share capital of the Company through agreed repurchase type securities trading. GF Securities Co., Ltd. was the securities broker company which participated in the trading. The repurchase period is 1 year. During the reporting period, Chenming Holdings did not engage in repurchase trading. As at the end of the reporting period, GF Securities Co., Ltd. held, through the agreed repurchase earmarked account, 86,600,000 shares of the Company, representing 4.20% of the total share capital of the Company. 6

7 III Material Matters I. Explanation of material changes in major accounting statement items and financial indicators during the reporting period (I) Analysis of asset and liability of the Company Increase/ decrease (%) Unit: RMB Reason for the change Item 30 September December 2012 Monetary funds 3,096,074, ,456,217, (1) Bills receivable 2,468,497, ,852,478, (2) Long-term equity investments 88,033, ,796, (3) Construction materials 104,309, ,054, (4) Disposal of fixed assets 57,556, ,309, (5) Bills payable 637,110, ,285,627, (6) Advance receipts 531,602, ,835, (7) Other payables 646,153, ,772, (8) Non-current liabilities due within one year 690,657, ,368,108, (9) Interest payable 250,293, ,046, (10) Other current liabilities 1,823,805, ,659, , (11) Explanation of the reasons leading to the major changes: (1) Monetary funds decreased by 30.52% mainly due to a decrease in spot currency received by the Company and an increase in project investment during the reporting period. (2) Bills receivable increased by 33.25% mainly due to an increase in acceptance bills received by the Company during the reporting period. (3) Long-term equity investments decreased by 75.33% mainly due to the transfer of equity interests in our subsidiary, Shanghai Runchen Equity Investment Fund Co., Ltd. (4) Construction materials increased by 38.98% mainly due to an increase in materials for the Jilin Chenming relocation project. 7

8 (5) Disposal of fixed assets decreased by 79.97% mainly due to the Jilin Chenming relocation project close to completion and the loss on disposal of fixed assets offset by special payables. (6) Bills payable decreased by 50.44% mainly due to a decrease in bank acceptance bills issued by the Company for payment for goods during the reporting period. (7) Advance receipts increased by 52.83% mainly due to the greater efforts made by the Company to gain customers and an increase in payment in advance from customers. (8) Other payables increased by 48.28% mainly due to an increase in security deposit and accrued expenses received by the Company. (9) Non-current liabilities due within one year decreased by 49.52% mainly due to the repayment of long-term borrowings by the Company. (10) Interest payable increased by 88.13% mainly due to the interest on medium-term notes and corporate bonds withdrawn by the Company. (11) Other current liabilities increased by 10,227.62% mainly due to the issue of short-term commercial paper of RMB1,800 million by the Company. 8

9 (II) Explanation of the material changes in profit and loss items during the reporting period as compared to the corresponding period of the prior year January - September 2013 Corresponding period of the prior year Increase/ decrease (%) Unit: RMB Reason for the change Item Loss on impairment of assets -8,879, ,594, (1) Profit or loss from change in fair value 9,229, ,457, (2) Investment income 5,313, ,971, (3) Non-operating income 432,438, ,966, (4) Non-operating expenses 62,821, ,063, (5) Income tax expenses 117,976, , , (6) Explanation of the reasons leading to the major changes: (1) Loss on impairment of assets decreased by % from the corresponding period of the prior year mainly due to a decrease in bad debt provisions as a result of account receivables items. (2) Profit or loss from change in fair value decreased by 40.29% from the corresponding period of the prior year mainly due to the changes in fair value of forestry assets measured at fair value. (3) Investment income increased by % from the corresponding period of the prior year mainly due to investment income of RMB million arising from disposal of subsidiary and a decrease in loss incurred by associates. (4) Non-operating income increased by 30.27% from the corresponding period of the prior year mainly due to compensation for the suspension of Wuhan Plant 1 and transfer of government subsidies. (5) Non-operating expenses increased by % from the corresponding period of the prior year mainly due to the loss on disposal of accumulated and idle non-current assets. 9

10 (6) Income tax expenses increased by 35,682.70% from the corresponding period of the prior year mainly due to an increase in the income tax provision in accordance with the tax law as a result of increase in revenue in the market recovery. (7) Gross profit, net profits net profit attributable to shareholders of the Company and minority interests increased by 1,567.12%, 1,263.09%, % and 73.27% respectively from the corresponding period of the prior year mainly due to a decrease in production costs as compared to the corresponding period of the prior year by strengthening our internal control, an increase in sales of paper pulp as a result of active market development, as well as an increase in profit margin of the products. (III) Analysis of the cash flow during the reporting period reporting period corresponding period of the prior year Unit: RMB Increase/ decrease (%) Item Net cash flows from operating activities 1,044,925, ,787, Net cash flows from investing activities -1,676,114, ,092,774, Net cash flows from financing activities -1,120,946, ,022, , Explanation of the reasons leading to the major changes: (1) Net cash flows from operating activities increased by % from the corresponding period of the prior year mainly due to the greater efforts made by the Company to collect receivables as a result of an increase in cash received from sale of goods, as well as the higher percentage of payment for goods by bills by the Company. (2) Net cash flows from investing activities decreased by 53.38% from the corresponding period of the prior year mainly due to an increase in new project investment as compared to the prior year. (3) Net cash flows from financing activities decreased by 2,446.28% from the corresponding period of the prior year mainly due to an increase in new projects as compared to the prior year and an increase in borrowings. 10

11 II. Progress of material matters and analysis of their effects and solutions 1. Particulars of repurchase of B shares by the Company On 12 December 2012, the Company convened the Third Extraordinary General Meeting, the Class Meeting for Holders of Domestic listed shares (A shares and B shares) and the Class Meeting for Holders of Overseas Listed Shares (H shares), on which resolutions in respect of repurchase of B shares by the Company were approved, respectively. On 26 February 2013, such repurchase of B shares by the Company had obtained the approval of the Shenzhen Stock Exchange and the Company had issued announcements such as Repurchase Report which marked the commencement of repurchase. As of the end of this reporting period, the Company cumulatively repurchased 86,573,974 B shares, representing % of the Company s total share capital. The highest repurchase price was HK$4.00 per share, while the lowest price was HK$3.38 per share. The total amount paid amounted to HK$330,911, (stamp duty and commission inclusive). 2. Particulars of repurchase of H shares by the Company On 21 August 2013, the Company convened the 2013 First Extraordinary General Meeting, the 2013 First Class Meeting for Holders of Domestic Listed Shares (A shares and B shares) and the 2013 First Class Meeting for Holders of Overseas Listed Shares (H shares), on which resolutions in respect of authorising the Board a general mandate to repurchase H shares of the Company were approved, respectively. On the following day, the Company made an announcement on the resolutions of the general meetings, and notice to creditors on repurchase of H shares of the Company and reduction of registered capital. On 10 October 2013, the Company received the reply letter Lu Shang Wu Wai Zi Zi No. [2013] 705 from the Department of Commerce of Shandong Province. It is preliminary agreed that the Company can repurchase not more than 39,127,000 issued overseas listed shares (H shares). The registered capital shall be reduced accordingly based on the actual number of the repurchased shares. Currently, the Company is processing relevant reply procedures with SAFE. As at the date of this report, the Company has not repurchased any shares yet. 11

12 3. During the reporting period, Jiangxi Chenming, Economic and Technological Development Zone Branch Office of Nanchang Land Reserve Centre and Management Committee of Nanchang Economic and Technological Development Zone had entered into a Land Reserve Contract in respect of the State-owned Land Use Rights in Nanchang City. The land which is subject to land resumption was the 400 mu land where the plant of Jianxi Chenming was located. The minutes summary Hong Jing Guan Fa [2013] No. 40 explicitly specified that the basis of compensation of the acquisition for this land resumption was RMB230,000 per mu (include all buildings and fixtures erected on the land and relocation compensation), in aggregate of RMB92 million. The transaction is executed in accordance with the application of Jiangxi Chenming and the land reserve plan of Nanchang Municiapl Government. The land subject to land resumption is an idle land of Jiangxi Chenming. Therefore, the land resumption can help the Company fully utilise its land resources and maximise the benefit from our own resources. The compensation of the acquisition will be used to replenish the working capital of the Company. This land resumption will not have a material effect on the financial condition and operating results of the Company. 4. In order to construct the Zhanjiang Pulp Project, on 27 July 2006, the sixteenth meeting of the fourth session of the Board of the Company resolved to pass the resolutions in respect of the establishment of Zhanjiang Chenming Paper Pulp Co., Ltd. (hereinafter referred to as Zhanjiang Chenming ) and provision of part of guarantees for its bank loans. It is agreed that a loan for long-term project of RMB6,000 million from a syndicate of banks including China Development Bank and other banks will be applied upon the establishment of Zhanjiang Chenming. The loan is secured by the future assets of the project, with the remaining part being secured by the joint liability guarantee provided by the Company. During the reporting period, Zhanjiang Chenming and the syndicate of banks, in which China Development Bank as the lead bank and the agent bank, has completed the land mortgage registration. The secured land area was 1,733,335 sqaure metre and the secured loan amounted to RMB629,200,600, with a term from 25 March 2008 to 24 March The secured land registration number is Zhan Guo Yong (2009) No

13 Tentative announcement Summary of material matters Disclosure Date disclosure website enquiry index Announcement on 22 August Resolutions of the 2013 First Extraordinary General Meeting and 2013 First Class Meeting for Holders of Domestic Listed Shares (A shares and B shares) and the Class Meeting for Holders of Overseas Listed Shares (H shares) Announcement on the 20 January Loan Contract entered into between Zhanjiang Chenming and a bank consortium Announcement on Resolutions of the Sixteenth Meeting of the Fourth Session of the Board 29 July III. Undertakings made by the Company and shareholders interested in 5% or m ore of the shares of the Company made during the reporting period or before the reporting period but subsisting to the reporting period Undertaking Undertaking on change in Undertaking made in offering documents or Undertaking made during Party involved in undertaking Details of undertaking Undertakin g date Term Particul ars on the 13

14 Undertaking Undertaking made on initial public offering or refinancing Party involved in undertaking Details of undertaking Shouguang Chenming Holdings Co., Ltd, the controlling shareholder of the Company (1) According to the plan on defective properties of the Company, Shouguang Chenming Holdings Company Limited has guaranteed and undertaken that: according to the application of the Company, for defective property(ies) owned by the Company and its holding company which situated in the administrative area of Shouguang city, Shouguang Chenming Holdings will purchase it(them) and have it (them) being transferred to itself pursuant to the law in accordance with the result of the related asset valuation if the Company decides to transfer and dispose of it(them) and there is no other transferee; (2) before the Company transfers and disposes of the defective properties pursuant to the law, if the defects cause the Company to incur any economic losses (including but not limited to damages, penalties and relocation costs), Shouguang Chenming Holdings will bear such economic losses; (3) during the corrective activities taken to the defective properties of buildings and land of subsidiaries of the Company situated outside the local areas (including the administrative area of Shouguang city), the economic losses such as penalties or relocation costs implemented by competent administrative authorities and borne by the subsidiaries arising from defects of insufficient title documents shall be paid pursuant to the law by Shouguang Chenming Holdings after verification. Undertakin g date 16 January 2008 Term During the issuance of H shares, no specific term Particul ars on the Strictly impleme nted 14

15 Undertaking Party involved in undertaking Details of undertaking Shouguang Chenming Holdings Co., Ltd, the controlling shareholder of the Company (1) Shouguang Chenming Holdings shall not engage, whether solely, jointly, or by representing itself or any other persons or companies, and shall not procure its associates (as defined in The Listing Rules of Hong Kong Stock Exchange) to engage, in any business which competes with the business of the Company and its subsidiaries ( Chenming Group or we ) directly or indirectly, in any country and region which our business exists (or any part of the world if in any form of electronics business), or in any business that directly or indirectly competes with Chenming Group s business which we operate from time to time (including but not limited to any business in the form of sole proprietorship, joint ventures or acquisitions, or holding interests directly or indirectly in such enterprises, or by any other means); (2) in the event that Shouguang Chenming Holdings is required by its business to, whether solely, jointly, or by representing itself or any other persons or companies, engage in business which directly or indirectly competes against Chenming Group s business, or obtain any business opportunity which directly or indirectly competes against Chenming Group s business, it shall endeavour to procure that Chenming Group shall have priority to obtain the right to operate such business or to obtain such business opportunity; (3) if Shouguang Chenming Holdings is in breach of the abovementioned undertakings, it shall Undertakin g date 22 May 2008 Term During the issuance of H shares, no specific term Particul ars on the Strictly impleme nted 15

16 Undertaking Party involved in undertaking Details of undertaking indemnify us for any loss caused by such breach and the Company shall have the right to acquire all businesses of Shouguang Chenming Holdings, which directly or indirectly compete with the businesses of our Group, at market price or cost price (whichever price is lower); (4) Shouguang Chenming Holdings shall not make use of its position as the controlling shareholder (as defined in The Listing Rules of Hong Kong Stock Exchange) of our Group to jeopardise the legal interests of Chenming Group and its shareholders with other persons or companies or on their behalf. Undertakin g date Term Particul ars on the Other undertakings made to minority Does the undertaki Specific reasons for non- Yes Not applicable 16

17 IV. Estimate of the operating results for 2013 Warning of projection on cumulative net profit for the period between the beginning of the year to the end of the next reporting period to be at a loss or expected to have material changes as compared to the corresponding period of prior year and its explanation. Applicable Not applicable V. Registration report on reception of research investigations, communications and interviews during the reporting period Date of Place of reception reception 9 July 2013 Conference room of the Company 13 September 2013 Conference room of the Company Manner of reception On-site research investigation On-site research investigation Class of parties accommodated Institution Institution Parties accommodated Minsheng Tonghui Asset Management Co., Ltd. Everbright Pramerica Fund Management Co., Ltd. Main topics of discussion and information provided Recent production and operation of the Company Recent production and operation of the Company 17

18 VI Financial Statements I. Financial Statements 1. Consolidated Balance Sheet Prepared by: Shandong Chenming Paper Holdings Limited Unit: RMB Item Closing balance Opening balance CURRENT ASSETS: Monetary funds 3,096,074, ,456,217, Balances with clearing companies Loans to banks and other financial institutions Held-for-trading financial assets Bills receivable 2,468,497, ,852,478, Accounts receivable 3,310,747, ,602,955, Prepayments 2,033,877, ,636,233, Premium receivable Receivables from reinsurers Reinsurance contract reserves receivable Interest receivable Dividend receivable Other receivables 1,260,910, ,284,655, Financial assets purchased under agreements to resell Inventories 4,062,807, ,412,548, Non-current assets due within one year Other current assets 1,653,097, ,803,256, Total current assets 17,886,012, ,048,345, NON-CURRENT ASSETS: Entrusted loans and advances to customers Available-for-sale financial assets Held-to-maturity investments Long-term receivables Long-term equity investments 88,033, ,796, Investment properties 19,908, ,211, Fixed assets 21,823,371, ,751,339, Construction in progress 4,593,105, ,017,604, Construction materials 104,309, ,054,

19 Item Closing balance Opening balance Disposal of fixed assets 57,556, ,309, Consumable biological assets 1,282,516, ,169,269, Oil and gas assets Intangible assets 1,501,805, ,416,497, Development expenditure Goodwill 20,283, ,283, Long-term prepaid expenses 211,168, ,770, Deferred income tax assets 469,366, ,938, Other non-current assets Total non-current assets 30,171,424, ,677,076, Total assets 48,057,436, ,725,421, CURRENT LIABILITIES: Short-term borrowings 12,053,509, ,876,398, Borrowings from the central bank Customer bank deposits and due to banks and other financial institutions Placements from banks and other financial institutions Held-for-trading financial liabilities Bills payable 637,110, ,285,627, Accounts payable 2,916,367, ,239,782, Advance receipts 531,602, ,835, Assets sold under agreements to repurchase Handling charges and commission payable Staff remuneration payables 133,001, ,847, Taxes payable 124,716, ,816, Interest payable 250,293, ,046, Dividend payable Other payables 646,153, ,772, Due to reinsurers Insurance contract reserves Customer brokerage deposits Securities underwriting brokerage deposits Non-current liabilities due within one year 690,657, ,368,108, Other current liabilities 1,823,805, ,659, Total current liabilities 19,807,219, ,988,894,

20 Item Closing balance Opening balance NON-CURRENT LIABILITIES: Long-term borrowings 3,856,914, ,933,167, Bonds payable 6,264,399, ,256,263, Long-term payables Special payables 601,989, ,526, Estimated liabilities Deferred income tax liabilities Other non-current liabilities 3,049,711, ,560,151, Total non-current liabilities 13,773,015, ,391,109, TOTAL LIABILITIES 33,580,235, ,380,003, OWNERS EQUITY (OR SHAREHOLDERS EQUITY): Paid-up capital (or share capital) 2,062,045, ,062,045, Capital reserves 6,383,471, ,414,892, Less: Treasury shares 265,363, Special reserves Surplus reserves 1,132,116, ,132,116, General risk provisions Retained profit 4,560,978, ,149,511, Difference in foreign currency translation 10,886, , Total equity attributable to equity holders of the Company 13,884,134, ,759,496, Minority interests 593,065, ,921, Total owners equity (or shareholders equity) 14,477,200, ,345,417, TOTAL LIABILITIES AND OWNERS EQUITY (OR SHAREHOLDERS EQUITY) 48,057,436, ,725,421, Legal Representative: Chen Hongguo Financial controller: Wang Chunfang Head of the financial department: Dong Lianming 20

21 2. Balance sheet of the Company Prepared by: Shandong Chenming Paper Holdings Limited Unit: RMB Item Closing balance Opening balance CURRENT ASSETS: Monetary funds 1,613,174, ,057,756, Held-for-trading financial assets Bills receivable 1,598,260, ,592,967, Accounts receivable 4,307,860, ,497, Prepayments 1,127,577, ,962, Interest receivable Dividend receivable 592,453, ,215, Other receivables 8,742,500, ,232,778, Inventories 972,353, ,107, Non-current assets due within one year 500,000, Other current assets 86,891, ,260, Total current assets 19,041,072, ,884,546, NON-CURRENT ASSETS: Available-for-sale financial assets Held-to-maturity investments Long-term receivables Long-term equity investments 8,675,646, ,991,578, Investment property 19,908, ,211, Fixed assets 5,246,593, ,006,474, Construction in progress 71,433, ,157, Construction materials 1,743, ,536, Disposal of fixed assets Productive biological assets Oil and gas assets Intangible assets 310,547, ,572, Development expenditure Goodwill Long-term prepaid expenses Deferred income tax assets 17,320, ,517, Other non-current assets Total non-current assets 14,343,191, ,870,048, TOTAL ASSETS 33,384,264, ,754,594,

22 Item Closing balance Opening balance CURRENT LIABILITIES: Short-term borrowings 6,425,191, ,847,558, Held-for-trading financial liabilities Bills payable 134,000, ,432, Accounts payable 1,098,696, ,044,590, Advance receipts 265,569, ,522, Staff remuneration payables 67,325, ,268, Taxes payable 33,430, ,109, Interest payable 243,482, ,893, Dividend payable Other payables 257,329, ,596, Non-current liabilities due within one year 222,960, ,843, Other current liabilities 1,808,128, ,328, Total current liabilities 10,556,114, ,982,143, NON-CURRENT LIABILITIES: Long-term borrowings 781,052, ,112, Bonds payable 5,766,364, ,760,200, Long-term payables Special payables Estimated liabilities Deferred income tax liabilities Other non-current liabilities 2,604,621, ,214,846, Total non-current liabilities 9,152,037, ,327,159, Total liabilities 19,708,151, ,309,303, OWNERS EQUITY (OR SHAREHOLDERS EQUITY): Paid-up capital (or share capital) 2,062,045, ,062,045, Capital reserves 6,184,215, ,184,215, Less: Treasury shares 265,363, Special reserves Surplus reserves 1,119,926, ,119,926, General risk provisions Retained profit 4,575,287, ,079,103, Difference in foreign currency translation Total owners equity (or shareholders equity) 13,676,113, ,445,291, TOTAL LIABILITIES AND OWNERS EQUITY (OR SHAREHOLDERS EQUITY) 33,384,264, ,754,594, Legal Representative: Chen Hongguo Financial controller: Wang Chunfang Head of the financial department: Dong Lianming 22

23 3. Consolidated Income Statement for the reporting period Shandong Chenming Paper Holdings Limited 23 Unit: RMB Item reporting period prior period I. Total revenue 5,025,294, ,001,125, Including: Revenue 5,025,294, ,001,125, II. Total operating costs 4,870,088, ,073,803, Including: Operating costs 4,038,682, ,227,112, Business taxes and surcharges 24,719, ,309, Sales and distribution expenses 270,152, ,850, General and administrative expenses 309,492, ,962, Finance expenses 231,269, ,410, Loss on impairment of assets -4,227, , Investment income ( - denotes loss) 130, ,254, Including: Investment income from associates and joint ventures -440, ,254, III. Operating profit ( - denotes loss) 155,337, ,932, Plus: Non-operating income 96,133, ,498, Less: Non-operating expenses 23,281, ,758, Including: Loss on disposal of non-current assets 21,879, , IV. Total profit ( - denotes total loss) 228,188, ,807, Less: Income tax expenses 35,105, ,196, V. Net profit ( - denotes net loss) 193,083, ,610, Net profit attributable to shareholders of the Company 196,585, ,909, Minority interests -3,502, ,298, VI. Earnings per share: (I) Basic earnings per share (II) Diluted earnings per share VII. Other comprehensive income 1,848, , VIII.Total comprehensive income 194,931, ,767,489.45

24 Item reporting period prior period Total comprehensive income attributable to shareholders of the Company 198,433, ,065, Total comprehensive income attributable to minority interests -3,502, ,298, Legal Representative: Chen Hongguo Financial controller: Wang Chunfang Head of the financial department: Dong Lianming 24

25 4. Income statement of the Company for the reporting period Prepared by: Shandong Chenming Paper Holdings Limited Unit: RMB Item reporting period prior period I. Revenue 2,370,392, ,214,888, Less: Operating costs 1,864,167, ,821,831, Business taxes and surcharges 9,922, ,494, Sales and distribution expenses 70,574, ,071, General and administrative expenses 147,351, ,877, Finance expenses 136,913, ,588, Loss on impairment of assets 4,501, ,103, Investment income ( - denotes loss) 130, ,459, Including: Investment income from associates and joint ventures -440, ,254, II. Operating profit ( - denotes loss) 137,090, ,588, Plus: Non-operating income 1,578, ,616, Less: Non-operating expenses 6,270, , Including: Loss on disposal of non-current assets 5,270, , III. Total profit ( - denotes total loss) 132,397, ,575, Less: Income tax expenses 14,687, ,564, IV. Net profit ( - denotes net loss) 117,709, ,011, V. Earnings per share: (I) Basic earnings per share (II) Diluted earnings per share VII. Total comprehensive income 117,709, ,011, Legal Representative: Chen Hongguo Financial controller: Wang Chunfang Head of the financial department: Dong Lianming 25

26 5. Consolidated Income Statement from the beginning of the year to the end of the reporting period Prepared by: Shandong Chenming Paper Holdings Limited Unit: RMB Item reporting period prior period I. Total revenue 15,053,196, ,965,577, Including: Revenue 15,053,196, ,965,577, Interest income Earned premium Handling charges and commission income II. Total operating costs 14,815,085, ,259,640, Including: Operating costs 12,290,031, ,727,625, Interest expenses Handling charges and commission expenses Surrenders Net claims paid Net change in insurance contract reserves Policyholder dividend expenses Expenses for reinsurance accepted Business taxes and surcharges 63,687, ,156, Sales and distribution expenses 840,551, ,809, General and administrative expenses 912,015, ,757, Finance expenses 717,678, ,696, Loss on impairment of assets -8,879, ,594, Plus: Gain on change in fair value ( - denotes loss) 9,229, ,457, Investment income ( - denotes loss) 5,313, ,971, Including: Investment income from associates and joint ventures -19, ,971, Foreign exchange gains ( - denotes loss) 26

27 Item reporting period prior period III. Operating profit ( - denotes loss) 252,653, ,576, Plus: Non-operating income 432,438, ,966, Less: Non-operating expenses 62,821, ,063, Including: Loss on disposal of non-current assets 57,750, ,589, IV. Total profit ( - denotes total loss) 622,270, ,326, Less: Income tax expenses 117,976, , V. Net profit ( - denotes net loss) 504,293, ,996, Including: Net profit achieved by the acquisition before business merger Net profit attributable to shareholders of the Company 529,995, ,154, Minority interests -25,701, ,157, VI. Earnings per share: (I) Basic earnings per share (II) Diluted earnings per share VII. Other comprehensive income 9,957, , VIII.Total comprehensive income 514,250, ,000, Total comprehensive income attributable to shareholders of the Company 539,952, ,158, Total comprehensive income attributable to minority interests -25,701, ,157, Legal Representative: Chen Hongguo Financial controller: Wang Chunfang Head of the financial department: Dong Lianming 27

28 6. Income statement of the Company from the beginning of the year to the end of the reporting period Prepared by: Shandong Chenming Paper Holdings Limited Unit: RMB Item reporting period prior period I. Revenue 7,287,424, ,302,112, Less: Operating costs 5,840,720, ,270,075, Business taxes and surcharges 31,366, ,160, Selling and distribution expenses 221,752, ,102, General and administrative expenses 437,747, ,662, Finance expenses 391,759, ,580, Loss on impairment of assets 8,203, ,148, Plus: Gain on change in fair value ( - denotes loss) Investment income ( - denotes loss) 255,843, ,252, Including: Investment income from associates and joint ventures -19, ,971, II. Operating profit ( - denotes loss) 611,719, ,931, Plus: Non-operating income 95,672, ,227, Less: Non-operating expenses 35,234, , Including: Loss on disposal of non-current assets 33,734, , III. Total profit ( - denotes total loss) 672,157, ,379, Less: Income tax expenses 57,444, ,924, IV. Net profit ( - denotes net loss) 614,712, ,455, V. Earnings per share: (I) Basic earnings per share (II) Diluted earnings per share VI. Other comprehensive income VII. Total comprehensive income 614,712, ,455, Legal Representative: Chen Hongguo Financial controller: Wang Chunfang Head of the financial department: Dong Lianming 28

29 7. Consolidated cash flow statement from the beginning of the year to the end of the reporting period Prepared by: Shandong Chenming Paper Holdings Limited reporting period Unit: RMB prior period Item I. Cash flows from operating activities: Cash received from sales of goods and rendering of services 17,933,539, ,135,299, Net increase in customer bank deposits and due to banks and other financial institutions Net increase in borrowings from the central bank Net increase in placements from other financial institutions Cash received from premiums under original insurance contracts Net cash received from reinsurance business Net increase in deposits from policyholders Net increase from disposal of held-for-trading financial assets Cash received from interest, handling charges and commissions Net increase in placements from banks and other financial institutions Net capital increase of repurchase business Tax rebates received 18,840, ,344, Cash received relating to other operating activities 95,449, ,983, Subtotal of cash inflows from operating activities 18,047,828, ,421,627, Cash paid for goods and services 15,228,571, ,723,218, Net increase in loans and advances to customers Net increase in deposits with the central bank and other financial institutions 29

30 reporting period prior period Item Cash paid for claims under original insurance contracts Cash paid for interest, handling charges and commission Cash paid for policyholder dividend Cash paid to and for employees 601,968, ,767, Payments of taxes and surcharges 771,231, ,311, Cash paid relating to other operating activities 401,132, ,542, Subtotal of cash outflows from operating activities 17,002,903, ,083,840, Net cash flows from operating activities 1,044,925, ,787, II. Cash flows from investment activities: Cash received from investments Cash received from investment income Net cash received from disposal of fixed assets, intangible assets and other long-term assets 256,077, , Net cash received from disposal of subsidiaries and other business units 485,238, Cash received relating to other investment activities 365,961, ,982, Subtotal of cash inflows from investment activities 1,107,277, ,812, Cash paid for purchase of fixed assets, intangible assets and other long-term assets 2,783,392, ,504,586, Cash paid on investments 270,000, Net increase in pledged loans Net cash paid for acquisition of subsidiaries and other business units Cash paid relating to other investment activities Subtotal of cash outflows from investment activities 2,783,392, ,774,586,

31 reporting period prior period Item Net cash flows from investment activities -1,676,114, ,092,774, III. Cash flows from financing activities: Cash received from capital contribution 66,000, Including: cash received from minority interest contribution to subsidiaries 66,000, Cash received from borrowings 15,408,384, ,627,355, Cash received from bonds issue Cash received relating to other financing activities 3,283,300, ,245,088, Subtotal of cash inflows from financing activities 18,757,684, ,872,443, Cash repayments on borrowing 16,935,564, ,872,124, Cash paid for dividend and profit distribution or interest payment 1,041,755, ,044,341, Including: dividend and profit paid to minority interests by subsidiaries 12,801, ,420, Cash paid relating to other financing activities 1,901,310, Subtotal of cash outflows from financing activities 19,878,630, ,916,466, Net cash flows from financing activities -1,120,946, ,022, IV. Effect of changes in foreign exchange rate on cash and cash equivalents 12,146, ,804, V. Net increase in cash and cash equivalents -1,739,988, ,205, Plus: Balance of cash and cash equivalents as at the beginning of the period 2,347,264, ,317,048, VI. Balance of cash and cash equivalents as at the end of the period 607,275, ,520,843, Legal Representative: Chen Hongguo Financial controller: Wang Chunfang Head of the financial department: Dong Lianming 31

32 8. Cash flow statement of the Company from the beginning of the year to the end of the reporting period Prepared by: Shandong Chenming Paper Holdings Limited reporting period Unit: RMB prior period Item I. Cash flows from operating activities: Cash received from sales of goods and rendering of services 7,883,683, ,504,753, Tax rebates received Cash received relating to other operating activities 162,953, ,176, Subtotal of cash inflows from operating activities 8,046,637, ,711,929, Cash paid for goods and services 10,339,155, ,781,250, Cash paid to and for employees 241,038, ,593, Payments of taxes and surcharges 365,280, ,353, Cash paid relating to other operating activities -790,437, ,594, Subtotal of cash outflows from operating activities 10,155,038, ,724,790, Net cash outflows from operating activities -2,108,400, ,138, II. Cash flows from investing activities: Cash received from investments 500,000, ,000, Cash received from investment income intangible assets and other long-term assets 42,253, ,520, Net cash received from disposal of fixed assets, intangible assets and other long-term assets 88, , Net cash received from disposal of subsidiaries and other business units 235,238, Cash received relating to other investment activities Subtotal of cash inflows from investment activities 777,580, ,569,

33 reporting period prior period Item Cash paid for purchase of fixed assets, intangible assets and other long-term assets 65,385, ,808, Cash paid on investments 80,813, ,465, Net cash paid for acquisition of subsidiaries and other business units Cash paid relating to other investment activities Subtotal of cash outflows from investment activities 146,198, ,274, Net cash flows from investment activities 631,381, ,704, III. Cash flows from financing activities: Cash received from capital contribution Cash received from borrowings 9,366,866, ,474,339, Cash received from bonds issue 3,279,300, Cash received relating to other financing activities 1,083,500, Subtotal of cash inflows from financing activities 12,646,166, ,557,839, Cash repayments on borrowing 10,653,538, ,702,151, Cash paid for dividend and profit distribution or interest payment 436,205, ,971, Cash paid relating to other financing activities 1,858,777, ,472, Subtotal of cash outflows from financing activities 12,948,521, ,072,595, Net cash flows from financing activities -302,355, ,514,755, IV. Effect of changes in foreign exchange rate on cash and cash equivalents 1,193, ,163, V. Net increase in cash and cash equivalents -1,778,180, ,161,158, Plus: Balance of cash and cash equivalents as at the beginning of the period 1,786,622, ,290,039, VI. Balance of cash and cash equivalents as at the end of the period 8,441, ,880, Legal Representative: Chen Hongguo Financial controller: Wang Chunfang Head of the financial department: Dong Lianming 33

34 II. Auditors Report Has the third quarter report already been audited yet? Yes No The third quarter report of the Company is unaudited. SHANDONG CHENMING PAPER HOLDINGS LIMITED 25 October