SHANDONG CHENMING PAPER HOLDINGS LIMITED Interim Financial Report 2023
SHANDONG CHENMING PAPER HOLDINGS LIMITED
Interim Financial Report 2023
August 2023I Financial Report
I. Auditors’ Report
Is the interim report audited
□ Yes √ No
The interim financial report is unaudited.II. Financial Statements
The unit in the notes to the financial statements is: RMB
1. Consolidated balance sheet
Prepared by: Shandong Chenming Paper Holdings Limited
30 June 2023
Unit: RMB
Item 30 June 2023 31 December 2022
CURRENT ASSETS:
Monetary funds 13755530864.83 14000434986.08
Financial assets held for trading 50433870.59 74708444.88
Accounts receivable 2946153971.11 3212260445.96
Accounts receivable financing 614794433.04 924960384.16
Prepayments 846920981.37 788191626.82
Other receivables 1645909354.44 1717445443.44
Including: Interest receivable – –
Dividend receivable – –
Inventories 6777881649.68 6821916159.95
Non-current assets due within one year 3852470167.90 3998724415.85
Other current assets 1160886486.81 1180807801.62
Total current assets 31650981779.77 32719449708.76
NON-CURRENT ASSETS:
Long-term receivables 1372560959.21 1486807783.47
Long-term equity investments 4354672770.24 4277013369.56
Other non-current financial assets 785374459.73 786750761.62
Investment property 6154324519.02 6256723113.15
Fixed assets 32975722557.54 33797738695.30
Construction in progress 674425091.26 558866880.36
Bearer biological assets 16780814.36 13697336.80
Right-of-use assets 175084081.35 181614699.25
Intangible assets 1837906882.94 1831338830.92
Goodwill 35220543.80 26946905.38
Long-term prepaid expenses 41879965.99 44462851.45
Deferred income tax assets 1562270625.95 1335700565.60
Other non-current assets 1015655705.42 983905908.00
Total non-current assets 51001878976.81 51581567700.86
Total assets 82652860756.58 84301017409.62
SHANDONG CHENMING PAPER HOLDINGS LIMITED 1
INTERIM REPORT 2023I Financial Report
II. Financial Statements (Cont’d)
1. Consolidated balance sheet (Cont’d)
Item 30 June 2023 31 December 2022
CURRENT LIABILITIES:
Short-term borrowings 34946527126.28 36385048295.02
Bills payable 3530803793.61 3128595835.04
Accounts payable 3972082627.54 4114966767.76
Receipts in advance 12959619.33 14261436.67
Contract liabilities 1629061591.45 1306029389.80
Employee benefits payable 114802027.95 144925887.00
Taxes payable 134129746.74 261011669.09
Other payables 2059334576.71 1870403909.17
Including: Interest payable – 15895930.51
Dividend payable – –
Non-current liabilities due within one year 4152676912.29 4673505241.86
Total current liabilities 50552378021.90 51898748431.41
NON-CURRENT LIABILITIES:
Long-term borrowings 4895546304.36 3982236251.08
Lease liabilities 49288793.84 53596047.46
Long-term payables 2840065362.58 3160771126.31
Deferred income 1386819506.16 1469230468.46
Deferred income tax liabilities 13647914.79 8181264.29
Total non-current liabilities 9185367881.73 8674015157.60
Total liabilities 59737745903.63 60572763589.01
OWNERS’ EQUITY:
Share capital 2979742200.00 2979742200.00
Other equity instruments 996000000.00 996000000.00
Including: Preference shares – –
Perpetual Bonds 996000000.00 996000000.00
Capital reserves 5333733000.37 5361200522.29
Less: Treasury shares 128780100.00 128780100.00
Other comprehensive income -907674603.11 -821940694.57
Special reserves 19914734.49 15791710.95
Surplus reserves 1212009109.97 1212009109.97
General risk provisions 79900268.71 79900268.71
Retained profit 8702562313.47 9390642477.57
Total equity attributable to owners of the Company 18287406923.90 19084565494.92
Minority interest 4627707929.05 4643688325.69
Total owners’ equity 22915114852.95 23728253820.61
Total liabilities and owners’ equity 82652860756.58 84301017409.62
Legal Representative: Financial controller: Head of the financial department:
Chen Hongguo Dong Lianming Zhang Bo
2 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
II. Financial Statements (Cont’d)
2. Balance sheet of the Company
Unit: RMB
Item 30 June 2023 31 December 2022
CURRENT ASSETS:
Monetary funds 4842652489.67 5661807164.72
Bills receivable 2665209020.76 3482822426.80
Accounts receivable 2520259119.61 134755527.73
Prepayments 1131421810.91 375206833.58
Other receivables 8352806067.27 9337019470.13
Inventories 638303459.00 692338698.67
Non-current assets due within one year 3190542.30 13434710.01
Other current assets 76616158.33 86159558.49
Total current assets 20230458667.85 19783544390.13
NON-CURRENT ASSETS:
Long-term receivables 12069279.21 15914404.25
Long-term equity investments 18885983088.94 18826163036.33
Other non-current financial assets 122374459.73 123750761.62
Fixed assets 3547645657.47 3654340361.49
Construction in progress 29630298.21 24865009.58
Intangible assets 483415378.84 490533559.72
Deferred income tax assets 559868680.69 518171288.92
Other non-current assets 13217145.67 986260.70
Total non-current assets 23654203988.76 23654724682.61
Total assets 43884662656.61 43438269072.74
CURRENT LIABILITIES:
Short-term borrowings 12547491670.15 12885183530.81
Bills payable 9351434692.20 9455780407.30
Accounts payable 825592347.73 1288578359.05
Contract liabilities 4188916529.77 1503256921.15
Staff remuneration payables 47516337.34 65349838.50
Tax payables 9573634.48 11729028.39
Other payables 875210000.44 1856098294.14
Including: Interest payable – 15895930.51
Dividend payable – –
Non-current liabilities due within one year 1026488877.77 1171869377.78
Total current liabilities 28872224089.88 28237845757.12
SHANDONG CHENMING PAPER HOLDINGS LIMITED 3
INTERIM REPORT 2023I Financial Report
II. Financial Statements (Cont’d)
2. Balance sheet of the Company (Cont’d)
Item 30 June 2023 31 December 2022
NON-CURRENT LIABILITIES:
Long-term borrowings 1460844500.00 1698253561.10
Long-term payables 293382733.53 150911348.00
Deferred income 32391082.12 33251328.04
Total non-current liabilities 1786618315.65 1882416237.14
Total liabilities 30658842405.53 30120261994.26
OWNERS’ EQUITY
Share capital 2979742200.00 2979742200.00
Other equity instruments 996000000.00 996000000.00
Including: Preference shares – –
Perpetual Bonds 996000000.00 996000000.00
Capital reserves 5119757519.19 5147225041.11
Less: Treasury shares 128780100.00 128780100.00
Special reserves 3327739.59 2066138.15
Surplus reserves 1199819528.06 1199819528.06
Retained profit 3055953364.24 3121934271.16
Total owners’ equity 13225820251.08 13318007078.48
Total liabilities and owners’ equity 43884662656.61 43438269072.74
4 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
II. Financial Statements (Cont’d)
3. Consolidated income statement
Unit: RMB
Item First half of 2023 First half of 2022
I. Total revenue 12564962781.31 16676428365.83
Including: Revenue 12564962781.31 16676428365.83
II. Total operating costs 13439844164.10 16436429464.84
Including: Operating costs 11496731662.58 14124548249.51
Taxes and surcharges 105817810.49 116108890.55
Sales and distribution expenses 106666717.54 138055763.65
General and administrative expenses 328296224.86 353167395.54
Research and development expense 552804828.58 683514560.93
Finance expenses 849526920.05 1021034604.66
Including: Interest expenses 856872614.18 991475816.56
Interest income 94532686.92 150582370.85
Plus: Other income 108155697.19 149264611.68
Investment income (“-” denotes loss) -42756726.88 -24138176.90
Including: In vestment income from associates and joint
ventures 23934269.81 26616556.58
Gai ns on derecognition of financial assets
measured at amortised cost
(“-” denotes loss) -67175214.10 -56307959.46
Gain on change in fair value (“-” denotes loss) -19815797.83 -58813415.49
Credit impairment loss (“-” denotes loss) -43081750.88 -25363341.17
Lo ss on impairment of assets
(“-” denotes loss) -43314485.76 1936644.09
Gain on disposal of assets (“-” denotes loss) 11759266.91 1605314.49
III. Operating profit (“-” denotes loss) -903935180.04 284490537.69
Plus: Non-operating income 940805.30 1093429.33
Less: Non-operating expenses 3138190.06 10202739.60
IV. Total profit (“-” denotes total loss) -906132564.80 275381227.42
Less: Income tax expenses -211491182.14 1378726.69
V. Net profit (“-” denotes net loss) -694641382.66 274002500.73
(I) Classification according to the continuity of operation: – –
1. Net profit from continuing operations (“-” denotes
net loss) -694641382.66 274002500.73
2. Net profit from discontinued operations (“-”
denotes net loss) – –
(II) Classification according to ownership: – –
1. Net profit attributable to shareholders of the
Company -688080164.10 230141463.76
2. Profit or loss of minority interest -6561218.56 43861036.97
VI. Net other comprehensive income after tax -85733908.54 -150576277.41
Net other comprehensive income after tax attributable to
shareholders of the Company -85733908.54 -150576277.41
(1) Other comprehensive income that cannot be reclassified
to profit and loss – –
(2) Other comprehensive income that will be reclassified to
profit and loss -85733908.54 -150576277.41
1. Exchange differences arising from translation
of financial statements denominated in foreign
currencies -88339013.66 -155319427.95
2. Other comprehensive income that may be
reclassified to profit and loss under the equity
method 2605105.12 4743150.54
Other comprehensive income net of tax attributable to
minority interest
SHANDONG CHENMING PAPER HOLDINGS LIMITED 5
INTERIM REPORT 2023I Financial Report
II. Financial Statements (Cont’d)
3. Consolidated income statement (Cont’d)
Item First half of 2023 First half of 2022
VII. Total comprehensive income -780375291.20 123426223.32
To tal comprehensive income attributable to shareholders of
the Company -773814072.64 79565186.35
Total comprehensive income attributable to minority interest -6561218.56 43861036.97
VIII. Earnings per share: – –
(I) Basic earnings per share -0.250 0.064
(II) Diluted earnings per share -0.250 0.064
Legal Representative: Financial controller: Head of the financial department:
Chen Hongguo Dong Lianming Zhang Bo
6 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
II. Financial Statements (Cont’d)
4. Income statement of the Company
Unit: RMB
Item First half of 2023 First half of 2022
I. Revenue 3904584964.10 3746662856.50
Less: Operating costs 3746877337.08 3381230045.73
Taxes and surcharges 19988361.19 14470073.85
Sales and distribution expenses 4148207.41 3847240.05
General and administrative expenses 51547136.68 89156653.40
Research and development expense 117941892.00 165518080.69
Finance expenses 125869235.74 210696803.24
Including: Interest expenses 245995158.97 333394473.97
Interest income 212850374.32 230217851.40
Plus: Other income 13833015.46 24145213.86
Investment income (“-” denotes loss) 55178952.64 237259432.75
In cluding: Investment income from associates and joint
ventures -2829947.39 -5337689.31
Gai ns on derecognition of financial assets measured at
amortised cost (“-” denotes loss) -22621312.74 -30954557.50
Gain on change in fair value (“-” denotes loss) – –
Credit impairment loss (“-” denotes loss) -6264582.46 -722675.75
Loss on impairment of assets (“-” denotes loss) – –
Gain on disposal of assets (“-” denotes loss) 9745045.43 172652.98
II. Operating profit (“-” denotes loss) -89294774.93 142598583.38
Plus: Non-operating income 451184.77 61000.00
Less: Non-operating expenses 1912008.53 3003746.82
III. Total profit (“-” denotes total loss) -90755598.69 139655836.56
Less: Income tax expenses -41697391.77 -15843567.25
IV. Net profit (“-” denotes net loss) -49058206.92 155499403.81
(I) Net profit from continuing operations
(“-” denotes net loss) -49058206.92 155499403.81
(II) Net profit from discontinued operations
(“-” denotes net loss) – –
V. Total comprehensive income -49058206.92 155499403.81
SHANDONG CHENMING PAPER HOLDINGS LIMITED 7
INTERIM REPORT 2023I Financial Report
II. Financial Statements (Cont’d)
5. Consolidated cash flow statement
Unit: RMB
Item First half of 2023 First half of 2022
I. Cash flows from operating activities:
Cash received from sales of goods and rendering of services 12654981362.62 16841914152.37
Tax rebates received 109519774.17 697745590.84
Cash received relating to other operating activities 880312282.56 833956367.80
Subtotal of cash inflows from operating activities 13644813419.35 18373616111.01
Cash paid for goods and services 9962778364.17 15019129399.82
Cash paid to and for employees 667506780.80 721958063.20
Payments of taxes and surcharges 428775626.59 635688016.57
Cash paid relating to other operating activities 802664900.20 998576421.97
Subtotal of cash outflows from operating activities 11861725671.76 17375351901.56
Net cash flows from operating activities 1783087747.59 998264209.45
II. Cash flows from investing activities:
Cash received from investments 6376301.89 –
Cash received from investment income 1730212.77 4740000.00
Net cash received from disposal of fixed assets intangible
assets and other long-term assets 147784119.60 3921115.56
Subtotal of cash inflows from investing activities 155890634.26 8661115.56
Ca sh paid for purchase of fixed assets intangible assets and
other long-term assets 104455019.88 815285839.39
Net cash paid for acquisition of subsidiaries and other
business units 4934751.03 –
Subtotal of cash outflows from investing activities 109389770.91 815285839.39
Net cash flows from investing activities 46500863.35 -806624723.83
8 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
II. Financial Statements (Cont’d)
5. Consolidated cash flow statement (Cont’d)
Item First half of 2023 First half of 2022
III. Cash flows from financing activities:
Cash received from investments – 400000000.00
In cluding: Cash received from subsidiaries from minority
investment – 400000000.00
Cash received from borrowings 17765551073.77 17740613294.18
Cash received relating to other financing activities 1128264589.15 2078910644.82
Subtotal of cash inflows from financing activities 18893815662.92 20219523939.00
Cash repayments of amounts borrowed 18186471433.20 16096915969.19
Ca sh paid for dividend and profit distribution or interest
payment 853357265.46 1053952956.06
Inc luding: Dividend and profit paid by subsidiaries to minority
shareholders 9419178.08 –
Cash paid relating to other financing activities 1942169772.07 3310774061.40
Subtotal of cash outflows from financing activities 20981998470.73 20461642986.65
Net cash flows from financing activities -2088182807.81 -242119047.65
IV. Effect of foreign exchange rate changes on cash and cash
equivalents -58096458.38 24169806.97
V. Net increase in cash and cash equivalents -316690655.25 -26309755.06
Pl us: Balance of cash and cash equivalents as at the
beginning of the period 2159460149.51 3168915847.02
VI. Balance of cash and cash equivalents as at the end of the
period 1842769494.26 3142606091.96
SHANDONG CHENMING PAPER HOLDINGS LIMITED 9
INTERIM REPORT 2023I Financial Report
II. Financial Statements (Cont’d)
6. Cash flow statement of the Company
Unit: RMB
Item First half of 2023 First half of 2022
I. Cash flows from operating activities:
Cash received from sales of goods and rendering of services 3929585126.95 3937092906.31
Tax rebates received 10186261.55 9335732.78
Cash received relating to other operating activities 244461863.48 268488989.46
Subtotal of cash inflows from operating activities 4184233251.98 4214917628.55
Cash paid for goods and services 3646421670.77 3559003036.92
Cash paid to and for employees 159974284.62 168707495.45
Payments of taxes and surcharges 23767270.65 146897297.11
Cash paid relating to other operating activities 222463991.65 255001227.95
Subtotal of cash outflows from operating activities 4052627217.69 4129609057.43
Net cash flows from operating activities 131606034.29 85308571.12
II. Cash flows from investing activities:
Cash received from investments 6376301.89 –
Cash received from investment income 81730212.77 401816698.06
Net cash received from disposal of fixed assets intangible
assets and other long-term assets 40443619.60 3527572.65
Subtotal of cash inflows from investing activities 128550134.26 405344270.71
Ca sh paid for purchase of fixed assets intangible assets and
other long-term assets 19406565.34 12870064.02
Subtotal of cash outflows used in investing activities 19406565.34 12870064.02
Net cash flows from investing activities 109143568.92 392474206.69
10 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
II. Financial Statements (Cont’d)
6. Cash flow statement of the Company (Cont’d)
Item First half of 2023 First half of 2022
III. Cash flows from financing activities:
Cash received from borrowings 10014688564.21 10531501508.20
Cash received relating to other financing activities 1362715891.06 247000000.00
Subtotal of cash inflows from financing activities 11377404455.27 10778501508.20
Cash repayments of amounts borrowed 10389789485.97 10584544305.53
Ca sh paid for dividend and profit distribution or interest
payment 242860355.63 320363139.80
Cash paid relating to other financing activities 438804497.05 307022816.27
Subtotal of cash outflows from financing activities 11071454338.65 11211930261.60
Net cash flows from financing activities 305950116.62 -433428753.40
IV. Effect of foreign exchange rate changes on cash and cash
equivalents -3138503.82 6179448.15
V. Net increase in cash and cash equivalents 543561216.01 50533472.56
Plu s: Balance of cash and cash equivalents as at the
beginning of the period 233971948.99 893454314.56
VI. Balance of cash and cash equivalents as at the end of the
period 777533165.00 943987787.12
SHANDONG CHENMING PAPER HOLDINGS LIMITED 11
INTERIM REPORT 2023I Financial Report
12 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023
II. Financial Statements (Cont’d)
7. Consolidated statement of changes in owners’ equity
Amount for the period
Unit: RMB
First half of 2023
Equity attributable to owners of the Company
Other equity instruments Other
Preference Perpetual Capital Less: comprehensive Special Surplus General risk Minority Total
Item Share capital shares Bonds Others reserves treasury shares income reserves reserves provisions Retained profit Others Subtotal interest owners’ equity
I. Balance as at the end of the prior year 2979742200.00 – 996000000.00 – 5361200522.29 128780100.00 -821940694.57 15791710.95 1212009109.97 79900268.71 9390642477.57 – 19084565494.92 4643688325.69 23728253820.61
II. Balance as at the beginning of the year 2979742200.00 – 996000000.00 – 5361200522.29 128780100.00 -821940694.57 15791710.95 1212009109.97 79900268.71 9390642477.57 – 19084565494.92 4643688325.69 23728253820.61
III. Changes in the period (“-” denotes decrease) – – – – -27467521.92 – -85733908.54 4123023.54 – – -688080164.10 – -797158571.02 -15980396.64 -813138967.66
(I) Total comprehensive income – – – – – – -85733908.54 – – – -688080164.10 – -773814072.64 -6561218.56 -780375291.20
(II) Capital paid in and reduced by owners – – – – -27467521.92 – – – – – – – -27467521.92 – -27467521.92
1. Amount of share-based payments
recognised in owners’ equity – – – – -27467521.92 – – – – – – – -27467521.92 – -27467521.92
(III) Profit distribution – – – – – – – – – – – – – -9419178.08 -9419178.08
1. Distribution to shareholders (or owners) – – – – – – – – – – – – – -9419178.08 -9419178.08
(IV) Transfer within owners’ equity – – – – – – – – – – – – – – –
(V) Special reserves – – – – – – – 4123023.54 – – – – 4123023.54 – 4123023.54
1. Withdrew in the period – – – – – – – 13373517.00 – – – – 13373517.00 – 13373517.00
2. Used in the period (denotes in “-”) – – – – – – – -9250493.46 – – – – -9250493.46 – -9250493.46
IV. Balance as at the end of the period 2979742200.00 – 996000000.00 – 5333733000.37 128780100.00 -907674603.11 19914734.49 1212009109.97 79900268.71 8702562313.47 – 18287406923.90 4627707929.05 22915114852.95I Financial Report
SHANDONG CHENMING PAPER HOLDINGS LIMITED 13
INTERIM REPORT 2023
II. Financial Statements (Cont’d)
7. Consolidated statement of changes in owners’ equity (Cont’d)
Amounts for the prior year
Unit: RMB
First half of 2022
Equity attributable to owners of the Company
Other equity instruments Other
Preference Perpetual Capital Less: comprehensive Special Surplus General risk Retained Minority Total
Item Share capital shares Bonds Others reserves treasury shares income reserves reserves provisions profit Others Subtotal interest owners’ equity
I. Balance as at the end of the prior year 2984208200.00 – 996000000.00 – 5282805114.62 226860000.00 -445582729.36 – 1212009109.97 76825918.60 9210372613.81 – 19089778227.64 3457050907.26 22546829134.90
Plus: Others – – – – -55547014.21 – – – – – 83754093.05 – 28207078.84 – 28207078.84
II. Balance as at the beginning of the year 2984208200.00 – 996000000.00 – 5227258100.41 226860000.00 -445582729.36 – 1212009109.97 76825918.60 9294126706.86 – 19117985306.48 3457050907.26 22575036213.74
III. Changes in the period (“-” denotes decrease) – – – – 22826801.91 – -150576277.41 – – – 230141463.76 – 102391988.26 414361772.63 516753760.89
(I) Total comprehensive income – – – – – – -150576277.41 – – – 230141463.76 – 79565186.35 44038587.32 123603773.67
(II) Capital paid in and reduced by owners – – – – 22826801.91 – – – – – – – 22826801.91 370323185.31 393149987.22
1. Ordinary shares paid by owners – – – – – – – – – – – – – 370323185.31 370323185.31
2. Capital paid by holders of other equity
instruments – – – – – – – – – – – – – – –
3. Amount of share-based payments
recognised in owners’ equity – – – – -6850012.78 – – – – – – – -6850012.78 – -6850012.78
4. Others – – – – 29676814.69 – – – – – – – 29676814.69 – 29676814.69
(III) Profit distribution – – – – – – – – – – – – – – –
(IV) Transfer within owners’ equity – – – – – – – – – – – – – – –
IV. Balance as at the end of the period 2984208200.00 – 996000000.00 – 5250084902.32 226860000.00 -596159006.77 – 1212009109.97 76825918.60 9524268170.62 – 19220377294.74 3871412679.89 23091789974.63I Financial Report
14 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023
II. Financial Statements (Cont’d)
8. Statement of changes in owners’ equity of the Company
Amounts for the period
Unit: RMB
First half of 2023
Other equity instruments Other
Preference Perpetual Less: comprehensive Special Surplus Total
Item Share capital shares Bonds Others Capital reserves treasury shares income reserves reserves Retained profit Others owners’ equity
I. Balance as at the end of the prior year 2979742200.00 – 996000000.00 – 5147225041.11 128780100.00 – 2066138.15 1199819528.06 3121934271.16 – 13318007078.48
II. Balance as at the beginning of the year 2979742200.00 – 996000000.00 – 5147225041.11 128780100.00 – 2066138.15 1199819528.06 3121934271.16 – 13318007078.48
III. Changes in the period (“-” denotes decrease) – – – – -27467521.92 – – 1261601.44 – -65980906.92 – -92186827.40
(I) Total comprehensive income – – – – – – – – – -65980906.92 – -65980906.92
(II) Capital paid in and reduced by owners – – – – -27467521.92 – – – – – – -27467521.92
1. Amount of share-based payments
recognised in owners’ equity – – – – -27467521.92 – – – – – – -27467521.92
(III) Profit distribution – – – – – – – – – – – –
(IV) Transfer within owners’ equity – – – – – – – – – – – –
(V) Special reserves – – – – – – – 1261601.44 – – – 1261601.44
1. Withdrew in the period – – – – – – – 1284902.41 – – – 1284902.41
2. Used in the period – – – – – – – -23300.97 – – – -23300.97
IV. Balance as at the end of the period 2979742200.00 – 996000000.00 – 5119757519.19 128780100.00 – 3327739.59 1199819528.06 3055953364.24 – 13225820251.08I Financial Report
SHANDONG CHENMING PAPER HOLDINGS LIMITED 15
INTERIM REPORT 2023
II. Financial Statements (Cont’d)
8. Statement of changes in owners’ equity of the Company (Cont’d)
Amounts for the prior year
Unit: RMB
First half of 2022
Other equity instruments Other
Preference Perpetual Less: comprehensive Special Surplus Total
Item Share capital shares Bonds Others Capital reserves treasury shares income reserves reserves Retained profit Others owners’ equity
I. Balance as at the end of the prior year 2984208200.00 – 996000000.00 – 5154365336.31 226860000.00 – – 1199819528.06 2921641460.59 – 13029174524.96
II. Balance as at the beginning of the year 2984208200.00 – 996000000.00 – 5154365336.31 226860000.00 – – 1199819528.06 2921641460.59 – 13029174524.96
III. Changes in the period (“-” denotes decrease) – – – – -6850012.78 – – – – 155499403.81 – 148649391.03
(I) Total comprehensive income – – – – – – – – – 155499403.81 – 155499403.81
(II) Capital paid in and reduced by owners – – – – -6850012.78 – – – – – – -6850012.78
1. Amount of share-based payments
recognised in owners’ equity – – – – -6850012.78 – – – – – – -6850012.78
(III) Profit distribution – – – – – – – – – – – –
(IV) Transfer within owners’ equity – – – – – – – – – – – –
IV. Balance as at the end of the period 2984208200.00 – 996000000.00 – 5147515323.53 226860000.00 – – 1199819528.06 3077140864.40 – 13177823915.99I Financial Report
III. General Information of the Company
1. Company overview
The predecessor of Shandong Chenming Paper Holdings Limited (hereinafter referred to as the “Company”) was
Shandong Shouguang Paper Mill Corporation which was changed as a joint stock company with limited liability through
offering to specific investors in May 1993. In December 1996 with approval by Lu Gai Zi [1996] No. 270 issued by the
People’s Government of Shandong Province and Zheng Wei [1996] No. 59 of the Securities Committee of the State
Council the Company was changed as a joint stock company with limited liability established by share offer.In May 1997 with approval by Zheng Wei Fa [1997] No. 26 issued by the Securities Committee of the State Council
the Company issued 115000000 domestic listed foreign shares (B shares) under public offering which were listed and
traded on Shenzhen Stock Exchange from 26 May 1997.In September 2000 with approval by Zheng Jian Gong Si Zi [2000] No. 151 issued by the China Securities Regulatory
Commission the Company issued an additional 70000000 RMB ordinary shares (A shares) which were listed and
traded on Shenzhen Stock Exchange from 20 November 2000.In June 2008 with approval by the Stock Exchange of Hong Kong Limited the Company issued 355700000 H shares.At the same time 35570000 H shares were allocated to the National Council for Social Security Fund by our relevant
state-owned shareholder and converted into overseas listed foreign shares (H shares) for the purpose of reducing the
number of state-owned shares. The additionally issued H shares were listed and traded on Hong Kong Stock Exchange
on 18 June 2008.As at 30 June 2023 the total share capital of the Company was 2979742200 shares. For details please refer to Note
VII. 37.The Company established a corporate governance structure comprising the general meeting the board of directors
and the supervisory committee and has human resources department information technology department corporate
management department legal affairs department financial management department capital management department
securities investment department procurement department audit department and other departments.The Company and its subsidiaries (the “Company”) are principally engaged in among other things processing and
sale of paper products (including machine-made paper and paper board) paper making raw materials and machinery;
generation and sale of electric power and thermal power; forestry saplings growing processing and sale of timber;
manufacturing processing and sale of wood products; and hotel service and equipment financial and operating leasing
investment properties and property service etc.The financial statements and notes thereto were approved at the sixth meeting of the tenth session of the board of
directors of the Company (the “Board”) on 30 August 2023.
2. Scope of consolidation
Subsidiaries of the Company included in the scope of consolidation in 2023 totalled 79. For details please refer to
Note IX “Interest in other entities”. The scope of consolidation of the Company during the year had one more company
included compared to the prior year. For details please refer to Note VIII “Change in scope of consolidation”.
16 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
IV. Basis of Preparation of the Financial Statements
1. Basis of preparation
These financial statements are prepared in accordance with the accounting standards for business enterprises the
application guidelines thereof interpretations and other related rules (collectively referred to as “ASBEs”) promulgated
by the Ministry of Finance. In addition the Company also discloses relevant financial information in accordance withthe “Preparation Rules for Information Disclosure by Companies Offering Securities to the Public No. 15 – GeneralProvisions on Financial Reports” (revised in 2014) of the CSRC.The financial statements are presented on a going concern.The Company’s financial statements have been prepared on an accrual basis. Except for certain financial instruments
the financial statements are prepared under the historical cost convention. In the event that impairment of assets
occurs a provision for impairment is made accordingly in accordance with the relevant regulations.
2. Going concern
No facts or circumstances comprise a material uncertainty about the Company’s going concern basis within 12 months
since the end of the reporting period.V. Significant Accounting Policies and Accounting Estimates
Specific accounting policies and accounting estimates are indicated as follows:
The Company and its subsidiaries are principally engaged in machine-made paper electricity and heat construction
materials paper making chemical products processing of moulds hotel management and other operations. The Company
and its subsidiaries formulated certain specific accounting policies and accounting estimates for the transactions and matters
such as revenue recognition determination of performance progress and R&D expenses based on their actual production and
operation characteristics pursuant to the requirements under the relevant ASBEs. For details please refer to this Note V. 29
“Revenue”. For the critical accounting judgments and estimates made by the management please refer to Note V. 38 “Changesin significant accounting policies and accounting estimates”.
1. Statement of compliance with the Accounting Standards for Business Enterprises
These financial statements have been prepared in conformity with the ASBEs which truly and fully reflect the financial
position of the consolidated entity and the Company as at 30 June 2023 and relevant information such as the operating
results and cash flows of the consolidated entity and the Company for the first half of 2023.
2. Accounting period
The accounting period of the Company is from 1 January to 31 December of each calendar year.
3. Operating cycle
The operating cycle of the Company lasts for 12 months.SHANDONG CHENMING PAPER HOLDINGS LIMITED 17
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
4. Functional currency
The functional currency of the Company and its domestic subsidiaries is Renminbi (“RMB”). Overseas subsidiaries of the
Company recognise U.S. dollar (“USD” or “US$”) Japanese yen (“JPY”) Euro (“EUR”) and South Korean Won (“KRW”)
as their respective functional currency according to the general economic environment in which these subsidiaries
operate. The Company prepares the financial statements in RMB.
5. Accounting treatment of business combinations under common control and not under common control
(1) Business combination under common control
For the business combination involving entities under common control the assets and liabilities of the party being
merged that are obtained in the business combination by the absorbing party shall be measured at the carrying
amounts as recorded by the ultimate controlling party in the consolidated financial statements at the combination
date. The difference between the carrying amount of the consideration paid for the combination (or the aggregate
nominal value of shares issued as consideration) and the carrying amount of the net assets obtained in the
combination is charged to the capital reserve (share capital premium/capital premium). If the capital reserve (share
capital premium/capital premium) is not sufficient to absorb the difference any excess shall be adjusted against
retained earnings.Business combinations involving entities under common control and achieved in stages
In the separate financial statements the initial investment cost is calculated based on the shareholding portion
of the assets and liabilities obtained and are measured at the carrying amounts as recorded by the party being
merged at the combination date. The difference between the initial investment cost and the sum of the carrying
amount of the original investment cost prior to the combination and the carrying amount of consideration paid for
the combination is adjusted to the capital reserve (share capital premium/capital premium) if the capital reserve is
not sufficient to absorb the difference the excess difference shall be adjusted to retained earnings.In the consolidated financial statements the assets and liabilities of the party being merged that are obtained
at the combination by the absorbing party shall be measured at the carrying value as recorded by the ultimate
controlling party in the consolidated financial statements at combination date. The difference between the sum
of the carrying value from original shareholding portion and the new investment cost incurred at combination
date and the carrying value of net assets obtained at combination date shall be adjusted to capital reserve (share
capital premium/capital premium) if the balance of capital reserve is not sufficient to absorb the differences
any excess is adjusted to retained earnings. The long-term investment prior to the absorbing party obtaining
the control of the party being merged the recognised profit or loss comprehensive income and other change
of owners’ equity at the closer date of the acquisition date and combination date under common control shall
separately offset the opening balance of retained earnings and profit or loss during comparative statements.
(2) Business combination not under common control
For business combinations involving entities not under common control the cost for each combination is
measured at the aggregate fair value at acquisition date of assets given liabilities incurred or assumed and
equity securities issued by the acquirer in exchange for control of the acquiree. At acquisition date the acquired
assets liabilities or contingent liabilities of acquiree are measured at their fair value.
18 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
5. Accounting treatment of business combinations under common control and not under common control
(Cont’d)
(2) Business combination not under common control (Cont’d)
Where the cost of combination exceeds the acquirer’s interest in the fair value of the acquiree’s identifiable net
assets the difference is recognised as goodwill and subsequently measured on the basis of its cost minus
accumulative impairment provision; Where the cost of combination is less than the acquirer’s interest in the fair
value of the acquiree’s identifiable net assets the difference is recognised in profit or loss for the current period
after reassessment.Business combinations involving entities not under common control and achieved in stages
In the separate financial statements the initial investment cost of the investment is the sum of the carrying amount
of the equity investment held by the entity prior to the acquisition date and the additional investment cost at the
acquisition date. The disposal accounting policy of other comprehensive income related with equity investment
prior to the acquisition date recognised under equity method shall be compliance with the method when the
acquiree disposes the related assets or liabilities. Owners’ equity due to the changes of other owners’ equity other
than the changes of net profit other comprehensive income and profit distribution shall be transferred to profit or
loss for current period when disposed of. If the equity investment held by the entity prior to the acquisition date is
measured at fair value the cumulative changes in fair value recognised in other comprehensive income shall be
transferred to retained earnings for current period when accounted for using cost method.In the consolidation financial statements the combination cost is the sum of consideration paid at acquisition date
and fair value of the acquiree’s equity investment held prior to acquisition date. The cost of equity of the acquiree
held prior to acquisition date shall be remeasured at the fair value at acquisition date and the difference between
the fair value and carrying amount shall be recognised as investment income or loss for the current period.Other comprehensive income and changes of other owners’ equity related with acquiree’s equity held prior to
acquisition date shall be transferred to investment profit or loss for current period at acquisition date except for
the other comprehensive income incurred by the changes of net assets or net liabilities due to the remeasurement
of defined benefit plans.
(3) Transaction fees attribution during business combination
The audit legal valuation advisory and other intermediary fees and other relevant administrative expenses arising
from business combinations are recognised in profit or loss when incurred. Transaction costs of equity or debt
securities issued as the considerations of business combination are included in the initial recognition amounts.SHANDONG CHENMING PAPER HOLDINGS LIMITED 19
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
6. Preparation of consolidated financial statements
(1) Scope of consolidation
The scope of consolidation of the consolidated financial statements is determined on the basis of control. The
term “control” refers to the fact that the Company has power over the investee and is entitled to variable returns
from its involvement with the investee and the ability to use its power over the investee to affect the amount of
those returns. A subsidiary is an entity controlled by the Company (including an enterprise a separable part of an
investee a structured entity etc.).
(2) Basis for preparation of the consolidated financial statements
The consolidated financial statements are prepared by the Company based on the financial statements of the
Company and its subsidiaries and other relevant information. In preparing the consolidated financial statements
the accounting policies and accounting periods of the Company and its subsidiaries shall be consistent and intra-
company significant transactions and balances are eliminated.A subsidiary and its business acquired through a business combination involving entities under common control
during the reporting period shall be included in the scope of the consolidation of the Company from the date
of being controlled by the ultimate controlling party and its operating results and cash flows from the date of
being controlled by the ultimate controlling party are included in the consolidated income statement and the
consolidated cash flow statement respectively.For a subsidiary and its business acquired through a business combination involving entities not under common
control during the reporting period its income expenses and profits are included in the consolidated income
statement and cash flows are included in the consolidated cash flow statement from the acquisition date to the
end of the reporting period.The shareholders’ equity of the subsidiaries that is not attributable to the Company is presented under
shareholders’ equity in the consolidated balance sheet as minority interest. The portion of net profit or loss of
subsidiaries for the period attributable to minority interest is presented in the consolidated income statement
under the “profit or loss of minority interest”. When the amount of loss attributable to the minority shareholders of
a subsidiary exceeds the minority shareholders’ portion of the opening balance of owners’ equity of the subsidiary
the excess amount shall be allocated against minority interest.
(3) Acquisition of non-controlling interests in subsidiaries
The difference between the long-term equity investments costs acquired by the acquisition of non-controlling
interests and the share of the net assets from subsidiaries from the date of acquisition or the date of combination
based on the new shareholding ratio as well as the difference between the proceeds from the partial disposal
of the equity investment without losing control over its subsidiary and the disposal of the long-term equity
investment corresponding to the share of the net assets of the subsidiaries from the date of acquisition or the date
of combination is adjusted to the capital reserve. If the capital reserve is not sufficient any excess is adjusted to
retained earnings.
(4) Accounting treatment for loss of control over subsidiaries
For the loss of control over a subsidiary due to disposal of a portion of the equity investment or other reasons
the remaining equity is measured at fair value on the date when the control is lost. The difference arising from
the sum of consideration received for disposal of equity interest and the fair value of remaining equity interest
over the sum of the share of the carrying amount of net assets of the former subsidiary calculated continuously
from the purchase date based on the shareholding percentage before disposal and the goodwill is recognised as
investment income in the period when the control is lost.Other comprehensive income related to equity investment in the former subsidiary shall be transferred to current
profit or loss at the time when the control is lost except for other comprehensive income arising from changes in
net assets or net liabilities due to remeasurement of defined benefit plan by the investee.
20 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
7. Classification of joint arrangements and accounting treatment for joint operations
A joint arrangement refers to an arrangement of two or more parties have joint control. The joint arrangements of the
Company comprise joint operations and joint ventures.
(1) Joint operations
Joint operations refer to a joint arrangement during which the Company is entitled to relevant assets and
obligations of this arrangement.The Company recognises the following items in relation to its interest in a joint operation and accounts for them in
accordance with the relevant ASBEs:
A. the assets held solely by it and assets held jointly according to its share;
B. the liabilities assumed solely by it and liabilities assumed jointly according to its share;
C. the revenue from sale of output from joint operations;
D. the revenue from sale of output from joint operations according to its share;
E. the fees solely incurred by it and fees incurred from joint operations according to its share.
(2) Joint ventures
Joint ventures refer to a joint arrangement during which the Company only is entitled to net assets of this
arrangement.The Company accounts for its investments in joint ventures in accordance with the requirements relating to
accounting treatment using equity method for long-term equity investments.
8. Standards for recognising cash and cash equivalents
Cash refers to cash on hand and deposits readily available for payment purpose. Cash equivalents refer to short-term
and highly liquid investments held by the Company which are readily convertible into known amount of cash and which
are subject to insignificant risk of value change.SHANDONG CHENMING PAPER HOLDINGS LIMITED 21
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
9. Foreign currency operations and translation of statements denominated in foreign currency
(1) Foreign currency operations
The foreign currency operations of the Company are translated into the functional currency at the prevailing spot
exchange rate on the date of exchange.On the balance sheet date foreign currency monetary items shall be translated at the spot exchange rate on
the balance sheet date. The exchange difference arising from the difference between the spot exchange rate
on the balance sheet date and the spot exchange rate upon initial recognition or the last balance sheet date will
be recognised in profit or loss for the period. The foreign currency non-monetary items measured at historical
cost shall still be measured by the functional currency translated at the spot exchange rate on the date of the
transaction. Foreign currency non-monetary items measured at fair value are translated at the spot exchange
rate on the date of determination of the fair value. The difference between the amounts of the functional currency
before and after the translation will be recognised in profit or loss or other comprehensive income for the period
based on the nature of the non-monetary items.
(2) Translation of financial statements denominated in foreign currency
When translating the financial statements denominated in foreign currency of overseas subsidiaries assets and
liabilities on the balance sheet are translated at the spot exchange rate prevailing at the balance sheet date;
owner’s equity items except for “retained profit” are translated at the spot exchange rates at the dates on which
such items arose.Income and expenses items in the income statement are translated at the prevailing spot exchange rate on the
transaction date.All items in the cash flow statements shall be translated at the prevailing spot exchange rate on the date that
the cash flow transaction occurred. Effects arising from changes of exchange rate on cash shall be presented
separately as the “effect of foreign exchange rate changes on cash and cash equivalents” item in the cash flow
statements.The differences arising from translation of financial statements shall be included in the “other comprehensiveincome” item in owners’ equity in the balance sheet.On disposal of foreign operations and loss of control exchange differences arising from the translation of financial
statements denominated in foreign currencies related to the disposed foreign operations which has been included
in shareholders’ equity in the balance sheet shall be transferred to profit or loss in whole or in proportionate share
in the period in which the disposal took place.
22 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
10. Financial instruments
A financial instrument is a contract that gives rise to a financial asset of one party and a financial liability or equity
instrument of another party.
(1) Recognition and derecognition of financial instruments
Financial asset or financial liability will be recognised when the Company became one of the parties under a
financial instrument contract.Financial asset that satisfied any of the following criteria shall be derecognised:
* the contract right to receive the cash flows of the financial asset has terminated;
* the financial asset has been transferred and meets the derecognition criteria for the transfer of financial
asset as described below.A financial liability (or a part thereof) is derecognised only when the present obligation is discharged in full or in
part. If an agreement is entered between the Company (debtor) and a creditor to replace the existing financial
liabilities with new financial liabilities and the contractual terms of the new financial liabilities are substantially
different from those of the existing financial liabilities the existing financial liabilities shall be derecognised and the
new financial liabilities shall be recognised.Conventionally traded financial assets shall be recognised and derecognised at the trading date.
(2) Classification and measurement of financial assets
The Company classifies the financial assets according to the business model for managing the financial assets
and characteristics of the contractual cash flows as follows: financial assets measured at amortised cost financial
assets measured at fair value through other comprehensive income and financial assets measured at fair value
through profit or loss.Financial assets measured at amortised cost
A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated
at fair value through profit or loss:
The Company’s business model for managing such financial assets is to collect contractual cash flows;
The contractual terms of the financial asset stipulate that cash flows generated on specific dates are solely
payments of principal and interest on the principal amount outstanding.Subsequent to initial recognition such financial assets are measured at amortised cost using the effective interest
method. A gain or loss on a financial asset that is measured at amortised cost and is not part of a hedging
relationship shall be recognised in profit or loss for the current period when the financial asset is derecognised
amortised using the effective interest method or with impairment recognised.SHANDONG CHENMING PAPER HOLDINGS LIMITED 23
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
10. Financial instruments (Cont’d)
(2) Classification and measurement of financial assets (Cont’d)
Financial assets measured at fair value through other comprehensive income
A financial asset is classified as measured at fair value through other comprehensive income if it meets both of the
following conditions and is not designated at fair value through profit or loss:
The Company’s business model for managing such financial assets is achieved both by collecting collect
contractual cash flows and selling such financial assets;
The contractual terms of the financial asset stipulate that cash flows generated on specific dates are solely
payments of principal and interest on the principal amount outstanding.Subsequent to initial recognition such financial assets are subsequently measured at fair value. Interest calculated
using the effective interest method impairment losses or gains and foreign exchange gains and losses are
recognised in profit or loss for the current period and other gains or losses are recognised in other comprehensive
income. On derecognition the cumulative gain or loss previously recognised in other comprehensive income is
reclassified from other comprehensive income to profit or loss.Financial assets measured at fair value through profit or loss
The Company classifies the financial assets other than those measured at amortised cost and measured at fair
value through other comprehensive income as financial assets measured at fair value through profit or loss. Upon
initial recognition the Company irrevocably designates certain financial assets that are required to be measured
at amortised cost or at fair value through other comprehensive income as financial assets measured at fair value
through profit or loss in order to eliminate or significantly reduce accounting mismatch.Upon initial recognition such financial assets are measured at fair value. Except for those held for hedging
purposes gains or losses (including interests and dividend income) arising from such financial assets are
recognised in the profit or loss for the current period.The business model for managing financial assets refers to how the Company manages its financial assets in
order to generate cash flows. That is the Company’s business model determines whether cash flows will result
from collecting contractual cash flows selling financial assets or both. The Company determines the business
model for managing financial assets on the basis of objective facts and specific business objectives for managing
financial assets determined by key management personnel.The Company assesses the characteristics of the contractual cash flows of financial assets to determine whether
the contractual cash flows generated by the relevant financial assets on a specific date are solely payments of
principal and interest on the principal amount outstanding. The principal refers to the fair value of the financial
assets at the initial recognition. Interest includes consideration for the time value of money for the credit risk
associated with the principal amount outstanding during a particular period of time and for other basic lending
risks costs and profits. In addition the Company evaluates the contractual terms that may result in a change in
the time distribution or amount of contractual cash flows from a financial asset to determine whether it meets the
requirements of the above contractual cash flow characteristics.
24 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
10. Financial instruments (Cont’d)
(2) Classification and measurement of financial assets (Cont’d)
Financial assets measured at fair value through profit or loss (Cont’d)
All affected financial assets are reclassified on the first day of the first reporting period following the change in
the business model where the Company changes its business model for managing financial assets; otherwise
financial assets shall not be reclassified after initial recognition.Financial assets are measured at fair value upon initial recognition. For financial assets measured at fair value
through profit or loss relevant transaction costs are directly recognised in profit or loss for the current period.For other categories of financial assets relevant transaction costs are included in the amount initially recognised.Accounts receivable arising from sales of goods or rendering services without significant financing component
are initially recognised based on the transaction price expected to be entitled by the Company.
(3) Classification and measurement of financial liabilities
At initial recognition financial liabilities of the Company are classified as financial liabilities measured at fair value
through profit or loss and financial liabilities measured at amortised cost. For financial liabilities not classified
as measured at fair value through profit or loss relevant transaction costs are included in the amount initially
recognised.Financial liabilities measured at fair value through profit or loss
Financial liabilities measured at fair value through profit or loss comprise held-for-trading financial liabilities and
financial liabilities designated at fair value through profit or loss upon initial recognition. Such financial liabilities
are subsequently measured at fair value and the gains or losses from the change in fair value and the dividend or
interest expenses related to the financial liabilities are included in the profit or loss of the current period.Financial liabilities measured at amortised cost
Other financial liabilities are subsequently measured at amortised cost using the effective interest rate method
and the gains or losses arising from derecognition or amortisation are recognised in profit or loss for the current
period.Classification between financial liabilities and equity instruments
A financial liability is a liability if:
* it has a contractual obligation to pay in cash or other financial assets to other parties.* it has a contractual obligation to exchange financial assets or financial liabilities under potential adverse
condition with other parties.* it is a non-derivative instrument contract which will or may be settled with the entity’s own equity
instruments and the entity will deliver a variable number of its own equity instruments according to such
contract.* it is a derivative instrument contract which will or may be settled with the entity’s own equity instruments
except for a derivative instrument contract that exchanges a fixed amount of cash or other financial asset
with a fixed number of its own equity instruments.SHANDONG CHENMING PAPER HOLDINGS LIMITED 25
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
10. Financial instruments (Cont’d)
(3) Classification and measurement of financial liabilities (Cont’d)
Classification between financial liabilities and equity instruments (Cont’d)
Equity instruments are any contract that evidences a residual interest in the assets of an entity after deducting all
of its liabilities.If the Company cannot unconditionally avoid the performance of a contractual obligation by paying cash or
delivering other financial assets the contractual obligation meets the definition of financial liabilities.Where a financial instrument must or may be settled with the Company’s own equity instruments the Company’s
own equity instruments used to settle such instrument should be considered as to whether it is as a substitute
for cash or other financial assets or for the purpose of enabling the holder of the instrument to be entitled to the
remaining interest in the assets of the issuer after deducting all of its liabilities. For the former it is a financial
liability of the Company; for the latter it is the Company’s own equity instruments.
(4) Fair value of financial instruments
The methods for determining the fair value of the financial assets or financial liabilities are set out in Note V. 11.
(5) Impairment of financial assets
The Company makes provision for impairment based on expected credit losses (ECLs) on the following items:
Financial assets measured at amortised cost;
Receivables and debt investments measured at fair value through other comprehensive income;
Contract assets as defined in the Accounting Standards for Business Enterprises No. 14 – Revenue;
Lease receivables;
Financial guarantee contracts (except those measured at fair value through profit or loss or formed by continuing
involvement of transferred financial assets or the transfer does not qualify for derecognition).
26 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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V. Significant Accounting Policies and Accounting Estimates (Cont’d)
10. Financial instruments (Cont’d)
(5) Impairment of financial assets (Cont’d)
Measurement of ECLs
ECLs are the weighted average of credit losses of financial instruments weighted by the risk of default. Credit
losses refer to the difference between all contractual cash flows receivable according to the contract and
discounted according to the original effective interest rate and all cash flows expected to be received i.e. the
present value of all cash shortages.The Company takes into account reasonable and well-founded information such as past events current conditions
and forecasts of future economic conditions and calculates the probability-weighted amount of the present value
of the difference between the cash flows receivable from the contract and the cash flows expected to be received
weighted by the risk of default.The Company measures ECLs of financial instruments at different stages. If the credit risk of the financial
instrument did not increase significantly upon initial recognition it is at the first stage and the Company makes
provision for impairment based on the ECLs within the next 12 months; if the credit risk of a financial instrument
increased significantly upon initial recognition but has not yet incurred credit impairment it is at the second stage
and the Company makes provision for impairment based on the lifetime ECLs of the instrument; if the financial
instrument incurred credit impairment upon initial recognition it is at the third stage and the Company makes
provision for impairment based on the lifetime ECLs of the instrument.For financial instruments with low credit risk on the balance sheet date the Company assumes that the credit
risk did not increase significantly upon initial recognition and makes provision for impairment based on the ECLs
within the next 12 months.Lifetime ECLs represent the ECLs resulting from all possible default events over the expected life of a financial
instrument. The 12-month ECLs are the ECLs resulting from possible default events on a financial instrument
within 12 months (or a shorter period if the expected life of the financial instrument is less than 12 months) after
the balance sheet date and is a portion of lifetime ECLs.The maximum period to be considered when estimating ECLs is the maximum contractual period over which the
Company is exposed to credit risk including renewal options.For the financial instruments at the first and second stages and with low credit risks the Company calculates
the interest income based on the book balance and the effective interest rate before deducting the impairment
provisions. For financial instruments at the third stage interest income is calculated based on the amortised cost
after deducting impairment provisions made from the book balance and the effective interest rate.SHANDONG CHENMING PAPER HOLDINGS LIMITED 27
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
10. Financial instruments (Cont’d)
(5) Impairment of financial assets (Cont’d)
Bills receivable accounts receivable and contract assets
For bills receivable accounts receivable and contract assets regardless of whether there is a significant financing
component the Company always makes provision for impairment at an amount equal to lifetime ECLs.When the Company is unable to assess the information of ECLs for an individual financial asset at a reasonable
cost it classifies bills receivable and accounts receivable into portfolios based on the credit risk characteristics
and calculates the ECLs on a portfolio basis. The basis for determining the portfolios is as follows:
A. Bills receivable
Bills receivable portfolio 1: Bank acceptance bills
Bills receivable portfolio 2: Commercial acceptance bills
B. Accounts receivable
Accounts receivable portfolio 1: Due from related party customers
Accounts receivable portfolio 2: Due from non-related party customers
Accounts receivable portfolio 3: Factoring receivables
For bills receivable classified as a portfolio the Company refers to the historical credit loss experience combined
with the current situation and the forecast of future economic conditions to calculate the ECLs based on default
risk exposure and lifetime ECL rate.For accounts receivable classified as a portfolio the Company refers to the historical credit loss experience
combined with the current situation and the forecast of future economic conditions to prepare a comparison table
of the ageing/overdue days of accounts receivable and the lifetime ECL rate to calculate the ECLs.Other receivables
The Company classifies other receivables into portfolios based on credit risk characteristics and calculates the
ECLs on a portfolio basis. The basis for determining the portfolios is as follows:
Other receivables portfolio 1: Amount due from government authorities
Other receivables portfolio 2: Amount due from related parties
Other receivables portfolio 3: Other receivables
For other receivables classified as a portfolio the Company calculates the ECLs based on default risk exposure
and the ECL rate over the next 12 months or the entire lifetime.
28 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
10. Financial instruments (Cont’d)
(5) Impairment of financial assets (Cont’d)
Long-term receivables
The Company’s long-term receivables include finance lease receivables and deposits receivable.The Company classifies the finance lease receivables deposits receivable and other receivables into portfolios
based on the credit risk characteristics and calculates the ECLs on a portfolio basis. The basis for determining
the portfolios is as follows:
A. Finance lease receivables
Finance lease receivables portfolio 1: Receivables not past due
Finance lease receivables portfolio 2: Overdue receivables
B. Other long-term receivables
Other long-term receivables portfolio 1: Deposits receivable
Other long-term receivables portfolio 2: Other receivables
For deposits receivable and receivables for construction projects the Company refers to the historical credit loss
experience combined with the current situation and the forecast of future economic conditions and calculates
the ECLs based on default risk exposure and lifetime ECL rate.Except for those of finance lease receivables and deposits receivable the ECLs of other receivables and long-
term receivables classified as a portfolio are measured based on default risk exposure and ECL rate over the next
12 months or the entire lifetime.
Debt investments and other debt investments
For debt investments and other debt investments the Company measures the ECLs based on the nature of the
investment the types of counterparty and risk exposure and default risk exposure and ECL rate within the next
12 months or the entire lifetime.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 29
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
10. Financial instruments (Cont’d)
(5) Impairment of financial assets (Cont’d)
Assessment of significant increase in credit risk
In assessing whether the credit risk of a financial instrument has increased significantly upon initial recognition the
Company compares the risk of default of the financial instrument at the balance sheet date with that at the date
of initial recognition to determine the relative change in risk of default within the expected lifetime of the financial
instrument.In determining whether the credit risk has increased significantly upon initial recognition the Company considers
reasonable and well-founded information including forward-looking information which can be obtained without
unnecessary extra costs or efforts. Information considered by the Company includes:
The debtor’s failure to make payments of principal and interest on their contractually due dates;
An actual or expected significant deterioration in a financial instrument’s external or internal credit rating (if any);
An actual or expected significant deterioration in the operating results of the debtor;
Existing or expected changes in the technological market economic or legal environment that have a significant
adverse effect on the debtor’s ability to meet its obligation to the Company.Depending on the nature of the financial instruments the Company assesses whether there has been a significant
increase in credit risk on either an individual basis or a collective basis. When the assessment is performed on a
collective basis the financial instruments are grouped based on their common credit risk characteristics such as
past due information and credit risk ratings.The Company determines that the credit risk on a financial asset has increased significantly if it is more than 30
days past due.Credit-impaired financial assets
At balance sheet date the Company assesses whether financial assets measured at amortised cost and debt
investments measured at fair value through other comprehensive income are credit-impaired. A financial asset is
credit-impaired when one or more events that have an adverse effect on the estimated future cash flows of the
financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable
events:
Significant financial difficulty of the issuer or debtor;
A breach of contract by the debtor such as a default or delinquency in interest or principal payments;
For economic or contractual reasons relating to the debtor’s financial difficulty the Company having granted to
the debtor a concession that would not otherwise consider;
It becoming probable that the debtor will enter bankruptcy or other financial reorganisation;
The disappearance of an active market for that financial asset because of financial difficulties of the issuer or
debtor.
30 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
10. Financial instruments (Cont’d)
(5) Impairment of financial assets (Cont’d)
Presentation of provisions for ECLs
ECLs are remeasured at each balance sheet date to reflect changes in the financial instrument’s credit risk upon
initial recognition. Any change in the ECL amount is recognised as an impairment gain or loss in profit or loss for
the current period. For financial assets measured at amortised cost the provisions of impairment is deducted
from the carrying amount of the financial assets presented in the balance sheet; for debt investments at fair value
through other comprehensive income the Company makes provisions of impairment in other comprehensive
income without reducing the carrying amount of the financial asset.Write-offs
The book balance of a financial asset is directly written off to the extent that there is no realistic prospect of
recovery of the contractual cash flows of the financial asset (either partially or in full). Such write-off constitutes
derecognition of such financial asset. This is generally the case when the Company determines that the debtor
does not have assets or sources of income that could generate sufficient cash flows to repay the amounts subject
to the write-off. However financial assets that are written off could still be subject to enforcement activities in
order to comply with the Company’s procedures for recovery of amounts due.If a write-off of financial assets is subsequently recovered the recovery is credited to profit or loss in the period in
which the recovery occurs.
(6) Transfer of financial assets
Transfer of financial assets refers to the transfer or delivery of financial assets to another party other than the
issuer of such financial assets (the transferee).If the Company transfers substantially all the risks and rewards of ownership of the financial asset to the
transferee the financial asset shall be derecognised. If the Company retains substantially all the risks and rewards
of ownership of a financial asset the financial asset shall not be derecognised.If the Company neither transfers nor retains substantially all the risks and rewards of ownership of the financial
asset it accounts for the transaction as follows: if the Company does not retain control it derecognises the
financial asset and recognises any resulting assets or liabilities; if the control over the financial asset is not waived
the relevant financial asset is recognised according to the extent of its continuing involvement in the transferred
financial asset and the relevant liability is recognised accordingly.
(7) Offset of financial assets and financial liabilities
If the Company owns the legitimate rights of offsetting the recognised financial assets and financial liabilities
which are enforceable currently and the Company plans to realise the financial assets or to clear off the financial
liabilities on a net amount basis or simultaneously the net amount of financial assets and financial liabilities shall
be presented in the balance sheet upon offsetting. Otherwise financial assets and financial liabilities are presented
separately in the balance sheet without offsetting.SHANDONG CHENMING PAPER HOLDINGS LIMITED 31
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
11. Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date.The Company measures the relevant asset and liability at fair value based on the presumption that the orderly
transaction to sell the asset or transfer the liability takes place either in the principal market for the relevant asset or
liability or in the absence of a principal market in the most advantageous market for relevant the asset or liability. The
principal or the most advantageous market must be a trading market accessible by the Company at the measurement
date. The Company adopts the presumption that market participants would use when pricing the asset or liability in their
best economic interest.If there exists an active market for a financial asset or financial liability the Company uses the quotation on the active
market as its fair value. If the market for a financial instrument is inactive the Company uses valuation technique to
recognise its fair value.Fair value measurement of a non-financial asset takes into account a market participant’s ability to generate economic
benefits by using the asset in its best use or by selling it to another market participant that would use the asset in its
best use.The Company adopts valuation techniques that are appropriate in the current circumstance and for which sufficient data
and other information are available prioritises the use of relevant observable inputs and uses unobservable inputs only
under the circumstances where such relevant observable inputs cannot be obtained or practicably obtained.Assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the
fair value hierarchy based on the lowest level input that is significant to the fair value measurement as a whole. Level 1:
based on quoted prices (unadjusted) in active markets for identical assets or liabilities obtainable at the measurement
date. Level 2: observable inputs for the relevant asset or liability either directly or indirectly except for Level 1 input.Level 3: unobservable inputs for the relevant assets or liability.At each balance sheet date the Company reassesses assets and liabilities measured at fair value that are recognised
in the financial statements on a recurring basis to determine whether transfers have occurred between fair value
measurement hierarchy levels.
12. Inventories
(1) Classification of inventories
Inventories of the Company mainly include raw materials work in progress goods in stock development products
and consumable biological assets etc.
(2) Pricing of inventories dispatched
Inventories of the Company are measured at their actual cost when obtained. Cost of raw materials goods in
stock and others will be calculated with weighted average method when being dispatched.Consumable biological assets refer to biological assets held-for-sale which include growing timber. Consumable
biological assets without a stock are stated at historical cost at initial recognition and subsequently measured
at fair value when there is a stock. Changes in fair values shall be recognised as profit or loss in the current
period. The cost of self-planting self-cultivating consumable biological assets is the necessary expenses
directly attributable to such assets prior to canopy closure including borrowing costs eligible for capitalisation.Subsequent expenses such as maintenance cost incurred after canopy closure shall be included in profit or loss
for the current period.The cost of consumable biological assets shall at the time of harvest or disposal be carried forward at carrying
amount using the stock volume proportion method.
32 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
12. Inventories (Cont’d)
(3) Recognition of net realisable value of inventories and provision for inventory impairment
Net realisable value of inventories refers to the amount of the estimated price of inventories less the estimated
cost incurred upon completion estimated sales expenses and taxes and levies. The realisable value of inventories
shall be determined on the basis of definite evidence purpose of holding the inventories and effect of after-
balance-sheet-date events.At the balance sheet date provision for inventory impairment is made when the cost is higher than the net
realisable value. The Company usually make provision for inventory impairment based on categories of inventories.At the balance sheet date in case the factors causing inventory impairment no longer exists the original provision
for inventory impairment shall be reversed.
(4) Inventory stock taking system
The Company implements permanent inventory system as its inventory stock taking system.
(5) Amortisation of low-value consumables and packaging materials
The low-value consumables of the Company are amortised when issued for use.Packaging materials for turnover are amortised when issued for use.
13. Long-term equity investments
Long-term equity investments include the equity investments in subsidiaries joint ventures and associates. Associates
of the Company are those investees that the Company imposes significant influence over.
(1) Determination of initial investment cost
Long-term equity investments acquired through business combinations: for a long-term equity investment
acquired through a business combination involving enterprises under common control the investment cost shall
be the absorbing party’s share of the carrying amount of the owners’ equity under the consolidated financial
statements of the ultimate controlling party on the date of combination. For a long-term equity investment
acquired through a business combination involving enterprises not under common control the investment cost of
the long-term equity investment shall be the cost of combination.Long-term equity investments acquired through other means: for a long-term equity investment acquired by cash
payment the initial investment cost shall be the purchase cost actually paid; for a long-term equity investment
acquired by issuing equity securities the initial investment cost shall be the fair value of equity securities issued.SHANDONG CHENMING PAPER HOLDINGS LIMITED 33
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
13. Long-term equity investments (Cont’d)
(2) Subsequent measurement and method for profit or loss recognition
Investments in subsidiaries shall be accounted for using the cost method. Except for the investments which meet
the conditions of holding for sale investments in associates and joint ventures shall be accounted for using the
equity method.For a long-term equity investment accounted for using the cost method the cash dividends or profits declared by
the investees for distribution shall be recognised as investment gains and included in profit or loss for the current
period except the case of receiving the actual consideration paid for the investment or the declared but not yet
distributed cash dividends or profits which is included in the consideration.For a long-term equity investment accounted for using the equity method where the initial investment cost
exceeds the investor’s interest in the fair value of the investee’s identifiable net assets at the acquisition date no
adjustment shall be made to the investment cost of the long-term equity investment. Where the initial investment
cost is less than the investor’s interest in the fair value of the investee’s identifiable net assets at the acquisition
date adjustment shall be made to the carrying amount of the long-term equity investment and the difference shall
be charged to profit or loss for the current period.Under the equity method investment gain and other comprehensive income shall be recognised based on the
Company’s share of the net profits or losses and other comprehensive income made by the investee respectively.Meanwhile the carrying amount of long-term equity investment shall be adjusted. The carrying amount of long-
term equity investment shall be reduced based on the Group’s share of profit or cash dividend distributed by
the investee. In respect of the other movement of net profit or loss other comprehensive income and profit
distribution of investee the carrying amount of long-term equity investment shall be adjusted and included in
the capital reserves (other capital reserves). The Group shall recognise its share of the investee’s net profits or
losses based on the fair values of the investee’s individual separately identifiable assets at the time of acquisition
after making appropriate adjustments thereto according to the accounting policies and accounting periods of the
Company.For additional equity investment made in order to obtain significant influence or common control over investee
without resulted in control the initial investment cost under the equity method shall be the aggregate of fair value
of previously held equity investment and additional investment cost on the date of transfer. For investments in non-
trading equity instruments that were previously classified as at fair value through other comprehensive income the
cumulative fair value changes associated with them that were previously included in other comprehensive income
are transferred to retained earnings upon the change to the equity method of accounting.In the event of loss of common control or significant influence over investee due to partial disposal of equity
investment the remaining equity interest after disposal shall be accounted for according to the Accounting
Standard for Business Enterprises No. 22 – Recognition and measurement of Financial Instruments. The difference
between its fair value and carrying amount shall be included in profit or loss for the current period. In respect
of other comprehensive income recognised under previous equity investment using equity method it shall be
accounted for in accordance with the same accounting treatment for direct disposal of relevant asset or liability by
investee at the time when equity method was ceased to be used. Movement of other owners’ equity related to the
previous equity investment shall be transferred to profit or loss for the current period.In the event of loss of control over investee due to partial disposal of equity investment the remaining equity
interest which can apply common control or impose significant influence over the investee after disposal shall be
accounted for using equity method. Such remaining equity interest shall be treated as accounting for using equity
method since it is obtained and adjustment was made accordingly. For the remaining equity interest which cannot
apply common control or impose significant influence over the investee after disposal it shall be accounted for
using the Accounting Standard for Business Enterprises No. 22 – Recognition and measurement of Financial
Instruments. The difference between its fair value and carrying amount as at the date of losing control shall be
included in profit or loss for the current period.
34 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
13. Long-term equity investments (Cont’d)
(2) Subsequent measurement and method for profit or loss recognition (Cont’d)
If the shareholding ratio of the Company is reduced due to the capital increase of other investors and as a result
the Company loses the control of but still can apply common control or impose significant influence over the
investee the net asset increase due to the capital increase of the investee attributable to the Company shall be
recognised according to the new shareholding ratio and the difference with the original carrying amount of the
long-term equity investment corresponding to the shareholding ratio reduction part that should be carried forward
shall be recorded in the profit or loss for the current period; and then it shall be adjusted according to the new
shareholding ratio as if equity method is used for accounting when acquiring the investment.In respect of the transactions between the Company and its associates and joint ventures the share of unrealised
gain or loss arising from internal transactions shall be eliminated by the portion attributable to the Company.Investment gain or loss shall be recognised accordingly. However any unrealised loss arising from internal
transactions between the Company and an investee is not eliminated to the extent that the loss is impairment loss
of the transferred assets.
(3) Basis for determining the common control and significant influence on the investee
Common control is the contractually agreed sharing of control over an arrangement which relevant activities of
such arrangement must be decided by unanimously agreement from parties who share control. When determining
if there is any common control it should first be identified if the arrangement is controlled by all the participants
or the group consisting of the participants and then determined if the decision on the arranged activity can be
made only with the unanimous consent of the participants sharing the control. If all the participants or a group
of participants can only decide the relevant activities of certain arrangement through concerted action it can
be considered that all the participants or a group of participants share common control on the arrangement. If
there are two or more participant groups that can collectively control certain arrangement it does not constitute
common control. When determining if there is any common control the relevant protection rights will not be taken
into account.Significant influence is the power of the investor to participate in the financial and operating policy decisions of
an investee but to fail to control or joint control the formulation of such policies together with other parties. When
determining if there is any significant influence on the investee the influence of the voting shares of the investee
held by the investor directly and indirectly and the potential voting rights held by the investor and other parties
which are exercisable in the current period and converted to the equity of the investee including the warrants
stock options and convertible bonds that are issued by the investee and can be converted in the current period
shall be taken into account.When the Company holds directly or indirectly through the subsidiary 20% (inclusive) to 50% of the voting shares
of the investee it is generally considered to have significant influence on the investee unless there is concrete
evidence to prove that it cannot participate in the production and operation decision-making of the investee and
cannot pose significant influence in this situation. When the Company owns less than 20% of the voting shares
of the investee it is generally considered that it has not significantly influenced on the investee unless there is
concrete evidence to prove that it can participate in the production and operation decision-making of the investee
and can impose significant influence in this situation.
(4) Impairment test method and impairment provision
For the method for making impairment provision for the investment in subsidiaries associates and joint ventures
please refer to Note V. 22.SHANDONG CHENMING PAPER HOLDINGS LIMITED 35
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
14. Investment property
Investment property refers to real estate held to earn rentals or for capital appreciation or both. The investment property
of the Company includes leased land use rights land use rights held for sale after appreciation and leased buildings.The investment property of the Company is measured initially at cost upon acquisition and subject to depreciation or
amortisation in the relevant periods according to the relevant provisions on fixed assets or intangible assets.For the method for making impairment provision for the investment property adopted cost method for subsequent
measurement please refer to Note V. 22.When an investment property is sold transferred retired or damaged the amount of proceeds on disposal of the
property net of the carrying amount and related tax and surcharges is recognised in profit or loss for the current period.
15. Fixed assets
(1) Conditions for recognition of fixed assets
Fixed assets represent the tangible assets held by the Company using in the production of goods rendering of
services and for operation and administrative purposes with useful life over one year.Fixed assets are recognised when it is probable that the related economic benefits will flow to the Company and
the costs can be reliably measured.The Company’s fixed assets are initially measured at the actual cost at the time of acquisition.Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is probable
that the associated economic benefits will flow to the Company and the related cost can be reliably measured.The cost of routine repairs of fixed assets that do not qualify as capitalised subsequent expenditure is charged to
current profit or loss or included in the cost of the related assets in accordance with the beneficiary object when
incurred. The carrying amount of the replaced part is derecognised.
(2) Depreciation method by category of fixed assets
The Company adopts the straight-line method for depreciation. Provision for depreciation will be started when the
fixed asset reaches its expected usable state and stopped when the fixed asset is derecognised or classified as a
non-current asset held for sale. Without regard to the depreciation provision the Company determines the annual
depreciation rate by category estimated useful lives and estimated residual value of the fixed assets as below:
Useful lives of Estimated residual Annual depreciation
Category depreciation (Year) value (%) rate (%)
Housing and building structure 20-40 5-10 2.25-4.75
Machinery and equipment 8-20 5-10 4.50-11.88
Transportation equipment 5-8 5-10 11.25-19.00
Electronic equipment and others 5 5-10 18.00-19.00
Where for the fixed assets for which impairment provision is made to determine the depreciation rate the
accumulated amount of the fixed asset impairment provision that has been made shall be deducted.
36 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
15. Fixed assets (Cont’d)
(3) The impairment test method and impairment provision method of the fixed assets are set out in Note V. 22.
(4) The Company will review the useful lives estimated net residual value and depreciation method of the fixed assets
at the end of each year.When there is any difference between the useful lives estimate and the originally estimated value the useful
lives of the fixed asset shall be adjusted. When there is any difference between the estimated net residual value
estimate and the originally estimated value the estimated net residual value shall be adjusted.
(5) Disposal of fixed assets
A fixed asset is derecognised on disposal or when it is expected that there shall be no economic benefit arising
from using or after disposal. Where the fixed assets are sold transferred retired or damaged the income received
after disposal after deducting the carrying amount and related taxes are recognised in profit or loss for the current
period.
16. Construction in progress
Construction in progress of the Company is recognised based on the actual construction cost including all necessary
expenditures incurred for construction projects capitalised borrowing costs for the construction in progress before it
has reached the working condition for its intended use and other related expenses during the construction period.A construction in progress is reclassified to fixed assets when it has reached the working condition for its intended use.The method for impairment provision of construction in progress is set out in Note V. 22.
17. Materials for project
The materials for project of the Group refer to various materials prepared for construction in progress including
construction materials equipment not yet installed and tools for production.The purchased materials for project are measured at cost and the planning materials for project are transferred to
construction in progress. After the completion of the project the remaining materials for project are transferred to
inventory.The method for impairment provision of materials for project is set out in Note V. 22.The closing balance of materials for project is presented as “construction in progress” item in the balance sheet.SHANDONG CHENMING PAPER HOLDINGS LIMITED 37
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
18. Borrowing costs
(1) Recognition principle for the capitalisation of the borrowing costs
The borrowing costs incurred by the Company directly attributable to the acquisition construction or production
of a qualifying asset will be capitalised and included in the cost of relevant asset. Other borrowing costs will be
recognised as expenses when incurred according to the incurred amount and included in the profit or loss for the
current period. When the borrowing costs meet all the following conditions capitalisation shall be started:
* The capital expenditure has been incurred which includes the expenditure incurred by paying cash
transferring non-cash assets or undertaking interest-bearing liabilities for acquiring constructing or
producing the qualifying assets;
* The borrowing costs have been incurred;
* The acquisition construction or production activity necessary for the asset to be ready for its intended use
or sale has been started.
(2) Capitalisation period of borrowing costs
When a qualifying asset acquired constructed or produced by the Company is ready for its intended use or sale
the capitalisation of the borrowing costs shall discontinue. The borrowing costs incurred after a qualifying asset
is ready for its intended use or sale shall be recognised as expenses when incurred according to the incurred
amount and included in the profit or loss for the current period.Capitalisation of borrowing costs shall be suspended during periods in which the acquisition construction or
production of a qualifying asset is interrupted abnormally when the interruption is for a continuous period of more
than 3 months. The capitalisation of the borrowing costs shall be continued in the normal interruption period.
(3) Calculation methods for capitalisation rate and capitalised amount of the borrowing costs
Where funds are borrowed for a specific purpose the amount of interest to be capitalised shall be the actual
interest expense incurred on that borrowing for the period less any bank interest earned from depositing the
borrowed funds before being used into banks or any investment income on the temporary investment of those
funds. Where funds are borrowed for general purpose the Company shall determine the amount of interest
to be capitalised on such borrowings by applying a capitalisation rate to the weighted average of the excess
amounts of cumulative expenditures on the asset over and above the amounts of specific-purpose borrowings.The capitalisation rate shall be the weighted average of the interest rates applicable to the general-purpose
borrowings.During the capitalisation period exchange differences on a specific purpose borrowing denominated in foreign
currency shall be capitalised. Exchange differences related to general-purpose borrowings denominated in foreign
currency shall be included in profit or loss for the current period.
38 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
19. Biological assets
Bearer biological assets refer to biological assets held for the purpose of producing agricultural products providing
labour services or renting including economic forests firewood forests productive livestock and draught animals. The
Company’s bearer biological assets are mainly tea trees. The cost of a planted or propagated bearer biological asset
includes the expenses directly attributable to the asset and necessarily incurred before the asset is ready for its intended
production and operation including the borrowing costs that are eligible for capitalisation.The management protection and feeding costs of a biological asset subsequent to crown closure or after the asset is
ready for its intended production and operation are expensed and recognised in profit or loss as incurred.Depreciation of bearer biological assets is calculated using the straight-line method over the estimated useful life of
each biological asset less its residual value as follows:
Estimated residual Annual depreciation
Type of bearer biological assets Useful life (year) value rate
Tea tree 10 5% 9.50%
The Company reviews the useful life and estimated net residual value of a bearer biological asset and the depreciation
method applied at least at each financial year-end. A change in the useful life or estimated net residual value of a fixed
asset or the depreciation method used shall be accounted for as a change in accounting estimate.The difference between the disposal income of the sale loss death or damage of a bearer biological asset net of its
carrying amount and related taxes is recognised in profit or loss for the current period.The method for impairment provision of bearer biological assets is set out in Note V. 22.
20. Right-of-use assets
(1) Conditions for recognition of right-of-use assets
Right-of-use assets are defined as the right of underlying assets in the lease term for the Company as a lessee.Right-of-use assets are initially measured at cost at the commencement date of the lease. The cost includes the
amount of the initial measurement of lease liability; lease payments made at or before the inception of the lease
less any lease incentives enjoyed; initial direct costs incurred by the Company as lessee; costs to be incurred in
dismantling and removing the underlying assets restoring the site on which it is located or restoring the underlying
asset to the condition required by the terms and conditions of the lease incurred by the Company as lessee. As
a lessee the Company recognises and measures the costs of dismantling and restoration in accordance with the
Accounting Standard for Business Enterprises No. 13 – Contingencies. Subsequently the lease liability is adjusted
for any remeasurement of the lease liability.
(2) Depreciation method of right-of-use assets
The Company uses the straight-line method for depreciation. Where the Company as a lessee is reasonably
certain to obtain ownership of the leased asset at the end of the lease term such asset is depreciated over the
remaining useful life of the leased asset. Where ownership of the lease assets during the lease term cannot be
reasonably determined right-of-use assets are depreciated over the lease term or the remainder of useful lives of
the lease assets whichever is shorter.
(3) For the methods of impairment test and impairment provision of right-of-use assets please refer to Note V. 22.
SHANDONG CHENMING PAPER HOLDINGS LIMITED 39
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
21. Intangible assets
The intangible assets of the Company include land use rights software patents and certificates of third party right.The intangible asset is initially measured at cost and its useful life is determined upon acquisition. If the useful life is
finite the intangible asset will be amortised over the estimated useful life using the amortisation method that can reflect
the estimated realisation of the economic benefits related to the asset starting from the time when it is available for use.If it is unable to reliably determine the estimated realisation straight-line method shall be adopted for amortisation. The
intangible assets with uncertain useful life will not be amortised.The amortisation methods for the intangible assets with finite useful life are as follows:
Type Useful life Method of amortisation Remark
Land use rights 50-70 Straight-line method
Software 5-10 Straight-line method
Patents 5-20 Straight-line method
Certificates of third party right 3 Straight-line method
The Company reviews the useful life and amortisation method of the intangible assets with finite useful life at the end of
each year. If it is different from the previous estimates the original estimates will be adjusted and will be treated as a
change in accounting estimate.If it is estimated on the balance sheet date that certain intangible asset can no longer bring future economic benefit to
the company the carrying amount of the intangible asset will be entirely transferred into the profit or loss for the current
period.The impairment method for the intangible assets is set out in Note V. 22.
22. Long-term asset impairment
Impairment of long-term equity investments in subsidiaries associates and joint ventures asset impairment on
investment property fixed assets construction in progress bearer biological assets measured at cost right-of-use
assets intangible assets goodwill and others (excluding inventories investment property measured at fair value
deferred tax assets and financial assets) subsequently measured at cost is determined as follows:
The Company determines if there is any indication of asset impairment as at the balance sheet date. If there is any
evidence indicating that an asset may be impaired recoverable amount shall be estimated for impairment test. Goodwill
arising from business combinations intangible assets with an indefinite useful life and intangible assets not ready for
use will be tested for impairment annually regardless of whether there is any indication of impairment.The recoverable amount of an asset is the higher of its fair value less costs of disposal and the present value of the
future cash flows expected to be derived from the asset. The Company estimates the recoverable amount of an
individual asset. If it is not possible to estimate the recoverable amount of the individual asset the Company shall
determine the recoverable amount of the asset group to which the asset belongs. The determination of an asset group
is based on whether major cash inflows generated by the asset group are independent of the cash inflows from other
assets or asset groups.
40 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
22. Long-term asset impairment (Cont’d)
When the recoverable amount of an asset or an asset group is less than its carrying amount the carrying amount is
reduced to its recoverable amount. The reduction amount is charged to profit or loss and an impairment provision is
made accordingly.For the purpose of impairment test of goodwill the carrying amount of goodwill acquired in a business combination is
allocated to the relevant asset groups on a reasonable basis from the acquisition date; where it is difficult to allocate
to the related asset groups it is allocated to the combination of related asset groups. The related asset groups or
combination of asset groups are those which can benefit from the synergies of the business combination and are not
larger than the reportable segments identified by the Company.In the impairment test if there is any indication that an asset group or a combination of asset groups related to goodwill
may be impaired the Company first tests the asset group or set of asset groups excluding goodwill for impairment
calculates the recoverable amount and recognises the corresponding impairment loss. An impairment test is then carried
out on the asset group or combination of asset groups containing goodwill by comparing its carrying amount with its
recoverable amount. If the recoverable amount is lower than the carrying amount an impairment loss is recognised for
goodwill.An impairment loss recognised shall not be reversed in a subsequent period.
23. Long-term prepaid expenses
The long-term prepaid expenses incurred by the Company shall be recognised based on the actual cost and evenly
amortised over the estimated benefit period. For the long-term prepaid expense that cannot benefit the subsequent
accounting periods its value after amortisation shall be entirely included in the profit or loss for the current period.
24. Contract liabilities
A contract liability represents the Company’s obligation to transfer goods to a customer for which the Company has
received consideration (or an amount of consideration is due) from the customer. If the customer has already paid
the contract consideration before the Company transfers goods to the customer or the Company has obtained the
unconditional collection right the Company will recognise such amount received or receivable as contract liabilities
at earlier of the actual payment by the customer or the amount payable becoming due. Contract assets and contract
liabilities under the same contract are presented on a net basis and contract assets and contract liabilities under
different contracts are not offset.
25. Employee benefits
(1) Scope of employee benefits
Employee benefits are all forms of considerations or compensation given by an entity in exchange for services
rendered by employees or for the termination of employment. Employee benefits include short-term staff
remuneration post-employment benefits termination benefits and other long-term employee benefits. Employee
benefits include benefits provided to employees’ spouses children other dependants family members of
deceased employees and other beneficiaries.Employee benefits are presented as “employee benefits payable” and “long-term employee benefits payable” in
the balance sheet respectively according to liquidity.SHANDONG CHENMING PAPER HOLDINGS LIMITED 41
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
25. Employee benefits (Cont’d)
(2) Short-term staff remuneration
Employee wages or salaries actually incurred bonuses and social insurance contributions such as medical
insurance work injury insurance maternity insurance and housing fund contributed at the applicable benchmarks
and rates are recognised as a liability as the employees provide services with a corresponding charge to profit or
loss or included in the cost of assets where appropriate.
(3) Post-employment benefits
Post-employment benefit plans include defined contribution plans and defined benefit plans. A defined
contribution plan is a post-employment benefit plan under which the Company pays fixed contributions into
a separate fund and the Company has no further obligations for payment. A defined benefit plan is a post-
employment benefit plan other than a defined contribution plan.Defined contribution plans
Defined contribution plans include basic pension insurance and unemployment insurance.During the accounting period in which an employee provides service the amount payable calculated according to
the defined contribution plan is recognised as a liability and included in the profit or loss for the current period or
the cost of relevant assets.Defined benefit plans
For defined benefit plans the actuarial valuation is carried out by an independent actuary on the annual balance
sheet date and the cost of providing benefits is determined by the expected cumulative benefit unit method. The
cost of staff remuneration arising from the Company’s defined benefit plans includes the following components:
* Service cost including current service cost past service cost and settlement gain or loss. In particular
the current service cost refers to the increase in the present value of obligations of defined benefit plans
arising from the service provided by staff in the current period; the past service cost refers to the increase or
decrease in the present value of obligations of defined benefit plans related to the service of the staff in the
previous period arising from the revision of defined benefit plans.* Net interest on net liabilities or net assets of defined benefit plans including interest income from the assets
under the plans interest expense arising from the obligations of defined benefit plans and interest affected
by asset caps.* Changes arising from the remeasurement of net liabilities or net assets of defined benefit plans.Unless other accounting standards require or allow costs of staff welfare to be included in costs of assets
the Company will include the above items * and * in the current profit and loss; and include item * in other
comprehensive income which will not be transferred back to profit or loss in subsequent accounting periods.When the original defined benefit plan is terminated all the part originally included in other comprehensive income
shall be transferred to retained profit within the scope of equity.
42 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
25. Employee benefits (Cont’d)
(4) Termination benefits
When the Company provides termination benefits to employees employee benefits liabilities arising from
termination benefits are recognised in profit or loss for the current period at the earlier of the following dates: when
the Company cannot revoke unilaterally compensation for dismissal due to the cancellation of labour relationship
plans and employee redundant proposals; the Company recognises cost and expenses related to payment of
compensation for dismissal and restructuring.For the early retirement plans economic compensations before the actual retirement date were classified as
termination benefits. During the period from the date of cease of render of services to the actual retirement
date relevant wages and contribution to social insurance for the employees proposed to be paid are recognised
in profit or loss on a one-off basis. Economic compensation after the official retirement date such as normal
pension is accounted for as post-employment benefits.
(5) Other long-term benefits
Other long-term employee benefits provided by the Group to employees that meet the conditions for defined
contribution plans are accounted for in accordance with the relevant provisions relating to defined contribution
plans as stated above. If the conditions for defined benefit plans are met the benefits shall accounted for inaccordance with the relevant provisions relating to defined benefit plans but the “changes arising from theremeasurement of net liabilities or net assets of defined benefit plans” in the relevant employee benefits shall be
included in the current profit and loss or the relevant costs of assets.
26. Provisions
Obligations pertinent to the contingencies which satisfy the following conditions are recognised by the Company as
provisions:
(1) the obligation is a current obligation borne by the Company;
(2) it is likely that an outflow of economic benefits from the Company will be resulted from the performance of the
obligation;
(3) the amount of the obligation can be reliably measured.
The provisions shall be initially measured based on the best estimate for the expenditure required for the performance
of the current obligation after taking into account relevant risks uncertainties time value of money and other
factors pertinent to the contingencies. If the time value of money has significant influence the best estimates shall
be determined after discounting the relevant future cash outflow. The Company reviews the carrying amount of the
provisions on the balance sheet date and adjust the carrying amount to reflect the current best estimates.If all or some expenses incurred for settlement of recognised provisions are expected to be borne by the third party
the compensation amount shall on a recoverable basis be recognised as asset separately and compensation amount
recognised shall not be more than the carrying amount of provisions.SHANDONG CHENMING PAPER HOLDINGS LIMITED 43
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
27. Share-based payments and equity instruments
(1) Category of share-based payment
The Company’s share-based payment is either equity-settled or cash-settled.
(2) Determination of fair value of equity instruments
For the existence of an active market for options and other equity instruments granted by the Company the fair
value is determined at the quoted price in the active market. For options and other equity instruments with no
active market option pricing model shall be used to estimate the fair value of the equity instruments. The following
factors shall be taken into account using option pricing models: A. the exercise price of the option; B. the validity
period of the option; C. the current market price of the share; D. the expected volatility of the share price; E.predicted dividend of the share; and F. risk-free rate of the option within the validity period.
(3) Recognition of vesting of equity instruments based on the best estimate
On each balance sheet date within the vesting period the estimated number of equity instruments expected to
vest is revised based on the best estimate made by the Company according to the latest available subsequent
information as to changes in the number of employees with exercisable rights. On the vesting date the final
estimated number of equity instruments expected to vest should equal the actual number of equity instruments
expected to vest.
(4) Accounting treatment of implementation modification and termination of share-based payment
Equity-settled share-based payment shall be measured at the fair value of the equity instruments granted to
employees. For those may immediately vest after the grant the fair value of equity instrument at the grant date
shall be included in the relevant costs or expenses and the capital reserve shall be increased accordingly.If the right may not be exercised until the vesting period comes to an end or until the specified performance
conditions are met on each balance sheet date within the vesting period the services obtained in the current
period shall based on the best estimate of the number of vested equity instruments be included in the relevant
costs or expenses and the capital reserve at the fair value of the equity instrument at the grant date. After the
vesting period relevant costs or expenses and total shareholders’ equity which have been recognised will not be
adjusted.Cash-settled share-based payment shall be measured in accordance with the fair value of liability calculated
and recognised based on the shares or other equity instruments undertaken by the Company. For those may
immediately vest after the grant the fair value of the liability undertaken by the Company shall on the date of the
grant be included in the relevant costs or expenses and the liabilities shall be increased accordingly. If the right
may not be exercised until the vesting period comes to an end or until the specified performance conditions are
met on each balance sheet date within the vesting period the services obtained in the current period shall based
on the best estimate of the information about the exercisable right be included in the relevant costs or expenses
and the corresponding liabilities at the fair value of the liability undertaken by the Company. For each of the
balance sheet date and settlement date before the settlement of the relevant liabilities fair value of the liabilities
shall be remeasured and the changes will be included in the profit or loss for the current period.When there are changes in the Company’s share-based payment plans if the modification increases the fair value
of the equity instruments granted corresponding recognition of service increase in accordance with the increase
in the fair value of the equity instruments; if the modification increases the number of equity instruments granted
the increase in fair value of the equity instruments is recognised as a corresponding increase in service achieved.An increase in the fair value of equity instruments refers to the difference between the fair values of the modified
date. If the modification reduces the total fair value of shares paid or not conductive to the use of other employees
share-based payment plans to modify the terms and conditions of service it will continue to be accounted for in
the accounting treatment as if the change had not occurred unless the Company cancelled some or all of the
equity instruments granted.During the vesting period if the cancelled equity instruments (except for failure to meet the conditions of the non-
market vesting conditions) granted by the Company to cancel the equity instruments granted amount treated as
accelerated vesting of the remaining period should be recognised immediately in profit or loss while recognising
capital reserves. If employees or other parties can choose to meet non-vesting conditions but they are not met in
the vesting period the Company will treat them as cancelled equity instruments granted.
44 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
28. Perpetual Bonds
(1) Classification of financial liabilities and equity instruments
Financial instruments issued by the Company are classified into financial assets financial liabilities or equity
instruments on the basis of the substance of the contractual arrangements and the economic nature not only
its legal form together with the definition of financial asset financial liability and equity instruments on initial
recognition.
(2) Accounting treatment of Perpetual Bonds
Financial instruments issued by the Company are initially recognised and measured in accordance with the
financial instrument standards; thereafter interest or dividends are accrued on each balance sheet date and
accounted for in accordance with relevant specific ASBEs i.e. to determine the accounting treatment for interest
expenditure or dividend distribution of the instrument based on the classification of the financial instrument issued.For financial instruments classified as equity instruments their interest expenses or dividend distributions are
treated as profit distribution of the Company and their repurchases and cancellations are treated as changes in
equity; for financial instruments classified as financial liabilities their interest expenses or dividend distribution are
in principle accounted for with reference to borrowing costs and the gains or losses arising from their repurchases
or redemption are included in the profit or loss for the current period.For the transaction costs such as fees and commissions incurred by the Company for issuing financial
instruments if such financial instruments are classified as debt instruments and measured at amortised cost they
are included in the initial measured amount of the instruments issued; if such financial instruments are classified
as equity instruments they are deducted from equity.
29. Revenue
(1) General principles
The Company recognises revenue when it satisfies a performance obligation in the contract i.e. when the
customer obtains control of the relevant goods or services.Where a contract has two or more performance obligations the Company allocates the transaction price to each
performance obligation based on the percentage of respective unit price of goods or services guaranteed by
each performance obligation and recognises as revenue based on the transaction price that is allocated to each
performance obligation.If one of the following conditions is fulfilled the Company performs its performance obligation within a certain
period; otherwise it performs its performance obligation at a point of time:
* when the customer simultaneously receives and consumes the benefits provided by the Company when the
Company performs its obligations under the contract;
* when the customer is able to control the goods in progress in the course of performance by the Company
under the contract;
* when the goods produced by the Company under the contract are irreplaceable and the Company has the
right to payment for performance completed to date during the whole contract term.For performance obligations performed within a certain period the Company recognises revenue by measuring
the progress towards complete of that performance obligation within that certain period. When the progress
of performance cannot be reasonably determined if the costs incurred by the Company are expected to be
compensated the revenue shall be recognised at the amount of costs incurred until the progress of performance
can be reasonably determined.SHANDONG CHENMING PAPER HOLDINGS LIMITED 45
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
29. Revenue (Cont’d)
(1) General principles (Cont’d)
For performance obligation performed at a point of time the Company recognises revenue at the point of time at
which the customer obtains control of relevant goods or services. To determine whether a customer has obtained
control of goods or services the Company considers the following indications:
* The Company has the current right to receive payment for the goods which is when the customer has the
current payment obligations for the goods.* The Company has transferred the legal title of the goods to the customer which is when the client
possesses the legal title of the goods.* The Company has transferred the physical possession of goods to the customer which is when the
customer obtains physical possession of the goods.* The Company has transferred all of the substantial risks and rewards of ownership of the goods to the
customer which is when the customer obtain all of the substantial risks and rewards of ownership of the
goods to the customer.* The customer has accepted the goods or services.* Other information indicates that the customer has obtained control of the goods.The Company’s right to consideration in exchange for goods or services that the Company has transferred to
customers (and such right depends on factors other than passage of time) is accounted for as contract assets
and contract assets are subject to impairment based on ECLs (Note V. 10(5)). The Company’s unconditional
right to receive consideration from customers (only depends on passage of time) is accounted for as accounts
receivable. The Company’s obligation to transfer goods or services to customers for which the Company has
received or should receive consideration from customers is accounted for as contract liabilities.Contract assets and contract liabilities under the same contract are presented on a net basis. Where the net
amount has a debit balance it is presented in “contract assets” or “other non-current assets” according to its
liquidity. Where the net amount has a credit balance it is presented in “contract liabilities” or “other non-currentliabilities” according to its liquidity.
(2) Specific methods
Specific method for revenue recognition of machine-made paper business of the Company: in terms of domestic
sales of machine-made paper revenue is recognised when goods are delivered to the customers and such
deliveries are confirmed; while in terms of overseas sales of machine-made paper revenue is recognised on the
day when goods are loaded on board and declared.Specific method for recognition of finance lease income of the Company: according to the repayment schedule
the income is recognised by instalments according to the effective interest rate.Specific method for recognition of revenue from real estate of the Company: revenue is recognised by amortising
the property rental income on a straight-line basis over the lease term.The specific method for the Company to recognise revenue from electricity and steam: the sales of steam and
electricity by the Company are performance obligations performed at a point of time. For sales of electricity the
Company recognises revenue from sales of electricity based on the quantity of electricity delivered to customers
every month at a price agreed in the contract. For sales of steam the Company recognises revenue from sales of
steam based on the amount of steam delivered to customers every month at a price agreed in the contract.The specific method for the Company to recognise revenue from construction materials moulds and paper
chemicals: revenue is recognised when goods are delivered to the customers and such deliveries are confirmed.
46 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
30. Contract costs
Contract costs are either the incremental costs of obtaining a contract with a customer or the costs to fulfil a contract
with a customer.Incremental costs of obtaining a contract are those costs that the Company incurs to obtain a contract with a customer
that it would not have incurred if the contract had not been obtained e.g. sales commission. The Company recognises
the incremental costs of obtaining a contract with a customer as an asset if it expects to recover those costs. Other
costs of obtaining a contract are expensed when incurred.If the costs to fulfil a contract with a customer are not within the scope of inventories or other ASBEs the Company
recognises an asset from the costs incurred to fulfil a contract only if those costs meet all of the following criteria:
* the costs relate directly to an existing contract or to a specifically identifiable anticipated contract including direct
labour direct materials allocations of overheads (or similar costs) costs that are explicitly chargeable to the
customer and other costs that are incurred only because the Company entered into the contract;
* the costs generate or enhance resources of the Company that will be used in satisfying (or in continuing to satisfy)
performance obligations in the future;
* the costs are expected to be recovered.Assets recognised for the incremental costs of obtaining a contract and assets recognised for the costs to fulfil a
contract (the “assets related to contract costs”) are amortised on a systematic basis that is consistent with the transfer
to the customer of the goods or services to which the assets relate and recognised in profit or loss for the current
period.The Company recognises an impairment loss in profit or loss to the extent that the carrying amount of an asset related
to contract costs exceeds:
* remaining amount of consideration that the Company expects to receive in exchange for the goods or services to
which the asset relates;
* the cost estimated to be happened for the transfer of related goods or services.The costs of contract performance recognised as assets if the amortisation period is less than one year or a normal
operating cycle upon the initial recognition are presented as “Inventories” item and if the amortisation period is more
than one year or a normal operating cycle upon the initial recognition are presented as “other non-current assets” item.The contract obtaining costs recognised as assets if the amortisation period is less than one year or a normal operating
cycle upon the initial recognition are presented as “other current assets” item and if the amortisation period is more
than one year or a normal operating cycle upon the initial recognition are presented as “other non-current assets” item.SHANDONG CHENMING PAPER HOLDINGS LIMITED 47
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
31. Government grants
A government grant is recognised when the grant will be received and that the Company will comply with the conditions
attaching to the grant.If a government grant is in the form of a monetary asset it is measured at the amount received or receivable. If a
government grant is in the form of non-monetary asset it is measured at fair value; if the fair value cannot be obtained in
a reliable way it is measured at the nominal amount of RMB1.Government grants obtained for acquisition or construction of long-term assets or other forms of long-term asset
formation are classified as government grants related to assets while the remaining government grants are classified as
government grants related to revenue.Regarding the government grant not clearly defined in the official documents and can form long-term assets the part
of government grant which can be referred to the value of the assets is classified as government grant related to assets
and the remaining part is government grant related to revenue. For the government grant that is difficult to distinguish
the entire government grant is classified as government grant related to revenue.A government grant related to an asset shall be recognised as deferred income and evenly amortised to profit or loss
over the useful life of the asset in a reasonable and systematic manner. For a government grant related to revenue if
the grant is a compensation for related costs expenses or losses incurred the grant shall be recognised in profit or
loss for the current period or used to offset related costs; if the grant is a compensation for related costs expenses or
losses to be incurred in subsequent periods the grant shall be recognised as deferred income and recognised in profit
or loss over the periods in which the related costs expenses or losses are recognised. A government grant measured at
nominal amount is directly included in profit or loss for the current period. The Company adopts a consistent approach
to the same or similar government grants.A government grant related to daily activities is recognised in other gains or used to offset related costs relying on the
essence of economic business; otherwise recognised in non-operating income.For the repayment of a government grant already recognised if the carrying amount of relevant assets was written off
at initial recognition the carrying amount of the assets shall be adjusted; if there is any related deferred income the
repayment shall be offset against the carrying amount of the deferred income and any excess shall be recognised in
profit or loss for the current period; otherwise the repayment shall be recognised immediately in profit or loss for the
current period.
32. Deferred income tax assets/deferred income tax liabilities
Income tax comprises current income tax expense and deferred income tax expense which are included in profit or
loss for the current period as income tax expenses except for deferred tax related to transactions or events that are
directly recognised in owners’ equity which are recognised in owners’ equity and deferred tax arising from a business
combination which is adjusted against the carrying amount of goodwill.Temporary differences arising from the difference between the carrying amount of an asset or liability and its tax base
at the balance sheet date of the Company shall be recognised as deferred income tax using the balance sheet liability
method.All the taxable temporary differences are recognised as deferred income tax liabilities except for those incurred in the
following transactions:
(1) The initial recognition of goodwill and the initial recognition of an asset or liability in a transaction which is neither
a business combination nor affects accounting profit or taxable profit (or deductible loss) when the transaction
occurs;
(2) The taxable temporary differences associated with investments in subsidiaries associates and joint ventures and
the Company is able to control the timing of the reversal of the temporary difference and it is probable that the
temporary difference will not reverse in the foreseeable future.
48 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
32. Deferred income tax assets/deferred income tax liabilities (Cont’d)
The Company recognises a deferred income tax asset for the carry forward of deductible temporary differences
deductible losses and tax credits to subsequent periods to the extent that it is probable that future taxable profits
will be available against which the deductible temporary differences deductible losses and tax credits can be utilised
except for those incurred in the following transactions:
(1) The transaction is neither a business combination nor affects accounting profit or taxable profit (or deductible loss)
when the transaction occurs;
(2) The deductible temporary differences associated with investments in subsidiaries associates and joint ventures
the corresponding deferred income tax asset is recognised when both of the following conditions are satisfied: it is
probable that the temporary difference will reverse in the foreseeable future and it is probable that taxable profits
will be available in the future against which the temporary difference can be utilised.At the balance sheet date deferred income tax assets and deferred income tax liabilities are measured at the tax
rates that are expected to apply to the period when the asset is realised or the liability is settled and their tax effect is
reflected accordingly.At the balance sheet date the Company reviews the carrying amount of a deferred income tax asset. If it is probable
that sufficient taxable profits will not be available in future periods to allow the benefit of the deferred tax asset to be
utilised the carrying amount of the deferred tax asset is reduced. Any such reduction in amount is reversed when it
becomes probable that sufficient taxable profits will be available.
33. Lease
(1) Identification of leases
On the beginning date of the contract the Company (as a lessee or lessor) assesses whether the customer in
the contract has the right to obtain substantially all of the economic benefits from use of the identified asset
throughout the period of use and has the right to direct the use of the identified asset throughout the period of
use. If a contract conveys the right to control the use of an identified asset and multiple identified assets for a
period of time in exchange for consideration the Company identifies such contract is or contains a lease.
(2) The Company as lessee
On the beginning date of the lease the Company recognises right-of-use assets and lease liabilities for all leases
except for short-term lease and low-value asset lease with simplified approach.The accounting policy for right-of-use assets is set out in Note V. 20.The lease liability is initially measured at the present value of the lease payments that are not paid at the beginning
date of the lease using the interest rate implicit in the lease. Where the interest rate implicit in the lease cannot be
determined the incremental borrowing rate is used as the discount rate. Lease payments include fixed payments
and in-substance fixed payments less any lease incentives receivable; variable lease payments that are based
on an index or a rate; the exercise price of a purchase option if the lessee is reasonably certain to exercise
that option; payments for terminating the lease if the lease term reflects the lessee exercising that option of
terminating; and amounts expected to be payable by the lessee under residual value guarantees. Subsequently
the interest expense on the lease liability for each period during the lease term is calculated using a constant
periodic rate of interest and is recognised in profit or loss for the current period. Variable lease payments not
included in the measurement of lease liabilities are recognised in profit or loss for the period in which they actually
arise.SHANDONG CHENMING PAPER HOLDINGS LIMITED 49
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
33. Lease (Continued)
(2) The Company as lessee (Continued)
Short-term lease
Short-term leases refer to leases with a lease term of less than 12 months from the commencement date except
for those with a purchase option.Lease payments on short-term leases are recognised in the cost of related assets or current profit or loss on a
straight-line basis over the lease term.For short-term leases the Company chooses to adopt the above simplified approach for the following types of
assets that meet the conditions of short-term lease according to the classification of leased assets.Low-value equipment
Transportation vehicles
Low-value asset lease
A low-value asset lease is a lease that the value of a single leased asset is below RMB40000 when it is a new
asset.Lease payments on low-value asset leases are recognised on a straight-line basis over the lease term and either
included in the cost of the related asset or charged to profit or loss for the current period.For a low-value asset lease the Company chooses the above simplified approach based on the specific
circumstances of each lease.Lease modification
The Company accounts for a lease modification as a separate lease when the modification occurs and the
following conditions are met: * the lease modification expands the scope of lease by adding the right to use
one or more of the leased assets; and * the increase in consideration is equivalent to the separate price for the
expanded scope of lease adjusted for that contractual situation.Where a lease modification is not accounted for as a separate lease at the effective date of the lease modification
the Company reallocates the consideration of the modified contract reassesses the lease term and remeasures
the lease liability based on the present value of the lease payments after the modification and the revised discount
rate.If a lease modification results in a reduction in the scope of the lease or a shortening of the lease term the
Company reduces the carrying amount of the right-of-use asset accordingly and includes in the profit or loss for
the period the gain or loss associated with the partial or complete termination of the lease.Where other lease modifications result in a remeasurement of the lease liability the Company adjusts the carrying
amount of the right-of-use asset accordingly.
50 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
33. Lease (Continued)
(3) The Company as lessor
When the Company is a lessor a lease is classified as a finance lease whenever the terms of the lease transfer
substantially all the risks and rewards of asset ownership to the lessee. All leases other than financial leases are
classified as operating leases.Finance leases
Under finance leases the Company accounts for finance lease receivables at the beginning of the lease term at
the net lease investment which is the sum of the unsecured residual value and the present value of the lease
receipts outstanding at the commencement date of the lease discounted at the interest rate implicit in the lease.The Company as lessor calculates and recognises interest income for each period of the lease term based on
a fixed periodic interest rate. Variable lease payments acquired by the Company as lessor that are not included
in the net measurement of lease investments are included in profit or loss for the period when they are actually
incurred.Derecognition and impairment of finance lease receivables are accounted for in accordance with the requirements
under the Accounting Standard for Business Enterprises No. 22 – Recognition and Measurement of Financial
Instruments and the Accounting Standards for Business Enterprises No. 23 – Transfer of Financial Assets.Operating lease
Lease payments under operating leases are recognised in profit or loss on a straight-line basis over the lease term.Initial direct costs incurred in relation to operating leases are capitalised and amortised over the lease term on the
same basis as rental income and recognised in profit or loss for the current period. The variable lease payments
obtained in relation to operating leases that are not included in the lease payments are recognised in profit or loss
in the period in which they actually incurred.Lease modification
The Company accounts for a modification in an operating lease as a new lease from the effective date of the
modification and the amount of lease receipts received in advance or receivable in respect of the lease prior to the
modification is treated as a receipt under the new lease.The Company accounts for a modification in a finance lease as a separate lease when the change occurs and
the following conditions are met: * the modification expands the scope of lease by adding the right to use one
or more of the leased assets; and * the increase in consideration is equivalent to the separate price for the
expanded scope of lease adjusted for that contractual situation.Where a finance lease is modified and not accounted for as a separate lease the Company accounts for the
modified lease in the following circumstances: * If the modification takes effect on the lease commencement
date the lease will be classified as an operating lease the Company will account for it as a new lease from the
effective date of the lease modification and use the net lease investment before the effective date of the lease
modification; * If the modification takes effect on the lease commencement date the lease will be classified as a
finance lease and the Company will conduct accounting treatment in accordance with the Accounting Standards
for Business Enterprises No. 22 – Recognition and Measurement of Financial Instruments on modifying or
renegotiating contracts.SHANDONG CHENMING PAPER HOLDINGS LIMITED 51
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
33. Lease (Continued)
(4) Sublease
When the Company is an intermediate lessor the sublease is classified with reference to the right-of-use assets
arising from the head lease. If the head lease is a short-term lease for which the Company adopts a simplified
approach then the Company classifies the sublease as an operating lease.
(5) Sale and leaseback
The lessee and the lessor shall assess and determine whether the transfer of assets in a sale and leaseback
transaction is a sale in accordance with the requirements of the Accounting Standard for Business Enterprises No.
14 – Revenue.
Where asset transfer under the sale and leaseback transactions is a sale the lessee shall measure the right-
of-use assets created by the sale and leaseback based on the portion of carrying amount of the original assets
related to right of use obtained upon leaseback and only recognise relevant profit or loss for the right transferred
to the lessor. The lessor shall account for the purchase of assets in accordance with other applicable ASBEs and
account for the lease of assets in accordance with this standard.Where asset transfer under the sale and leaseback transactions is not a sale the lessee shall continue to
recognise the transferred assets while recognising a financial liability equal to the transfer income and account
for such liability according to the Accounting Standard for Business Enterprises No. 22 – Recognition and
Measurement of Financial Instruments; or not to recognise the transferred assets but recognise a financial asset
equal to the transfer income and account for such asset according to the Accounting Standard for Business
Enterprises No. 22 – Recognition and Measurement of Financial Instruments.
34. Production safety expenses
According to relevant provisions the Company makes provisions for production safety expenses based on the revenue
of the power plant in the previous year and the prescribed percentages. The specific provisions are as follows: * if
the revenue of the previous year did not exceed RMB10 million provisions would be made at 3%; * if the revenue of
the previous year exceeded RMB10 million but did not exceed RMB100 million provisions would be made at 1.5%; *
if the revenue of the previous year exceeded RMB100 million but did not exceed RMB1000 million provisions would
be made at 1%; * if the revenue of the previous year exceeded RMB1000 million but did not exceed RMB5000
million provisions would be made at 0.8%; * if the revenue of the previous year exceeded RMB5000 million but did
not exceed RMB10000 million provisions would be made at 0.6%; * if the revenue of the previous year exceeded
RMB10000 million provisions would be made at 0.2%.Provisions for production safety expenses are included in the cost of related products or profit or loss of the current
period and included in “special reserves” correspondingly.When the provisions for production safety expenses and maintenance costs are utilised within the prescribed scope
if such production safety expenses are applied and related to revenue expenditures specific reserve is directly offset.When fixed assets are incurred they are included in the “construction in progress” item and transferred to fixed assets
when the status of the assets is ready for intended use. They are then offset against specific reserve based on the
amount included in fixed assets while corresponding amount is recognised in accumulated depreciation. Such fixed
assets are no longer depreciated in subsequent periods.
52 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
35. Repurchase of shares
Prior to cancellation or transfer of shares repurchased the Company recognises all expenditures arising from share
repurchase as cost of treasury shares in the treasury share account. Considerations and transaction fee incurred from
the repurchase of shares shall lead to the elimination of owners’ equity and does not recognise profit or loss when
shares of the Company are repurchased transferred or cancelled.The difference between the actual amount received and the carrying amount of the treasury shares are recognised as
capital reserve when the treasury shares are transferred if the capital reserve is not sufficient to be offset the excess
amount shall be recognised to offset surplus reserve and retained profit. When the treasury shares are cancelled
the capital shall be eliminated according to the number of shares and par value of cancelled shares the difference
between the actual amount received and the carrying amount of the treasury shares are recognised as capital reserve
if the capital reserve is not sufficient to be offset the excess amount shall be recognised to offset surplus reserve and
retained profit.
36. Restricted shares
If the Company grants the restricted shares to incentive participants under an equity incentive plan the incentive
participants shall subscribe for the shares first. If the unlocking conditions stipulated in the equity incentive plan cannot
be fulfilled subsequently the Company repurchase the shares at the predetermined price. If the registration and other
capital increase procedures for the restricted shares issued to employees are completed in accordance with relevant
regulations the Company recognises share capital and capital reserve (or capital premium) based on the subscription
money received from the employees on the grant date; and recognises treasury shares and other payables for
repurchase obligation.
37. Critical accounting judgments and estimates
The Company gives continuous assessment on among other things the reasonable expectations of future events and
the critical accounting estimates and key assumptions adopted according to its historical experience and other factors.The critical accounting estimates and key assumptions that are likely to lead to significant adjustment risks of the
carrying amount of assets and liabilities for the next financial year are listed as follows:
Classification of financial assets
Significant judgements involved in determining the classification of financial assets include the analysis of business
models and contractual cash flow characteristics.Factors considered by the Company in determining the business model for a group of financial assets include how the
asset’s performance is evaluated and reported to key management personnel how risks are assessed and managed
and how the relevant management personnel are compensated.When the Company assesses whether the contractual cash flows of the financial assets are consistent with basic
lending arrangements the main judgements are described as below: whether the principal amount may change over
the life of the financial asset (for example if there are repayments of principal); whether the interest includes only
consideration for the time value of money credit risk other basic lending risks and a profit margin and cost. For
example whether the amount repaid in advance reflects only the outstanding principal and interest thereon as well as
reasonable compensation paid for early termination of the contract.SHANDONG CHENMING PAPER HOLDINGS LIMITED 53
INTERIM REPORT 2023I Financial Report
V. Significant Accounting Policies and Accounting Estimates (Cont’d)
37. Critical accounting judgments and estimates (Continued)
Measurement of the ECLs of accounts receivable
The Company calculates the ECLs of accounts receivable using the exposure to default risk and ECL rate of accounts
receivable and determines the ECL rate based on default probability and default loss rate. When determining the ECL
rate the Company adjusts its historical data by referring to information such as historical credit loss experience as well
as current situation and forward-looking information. When considering the forward-looking information indicators used
by the Company include the risk of economic downturn external market environment technology environment and
changes in customers. The assumptions relating to the ECL calculation are monitored and reviewed by the Company on
a regularly basis.Impairment of goodwill
The Company assesses the impairment of goodwill at least annually which requires estimates on the use value of asset
groups allocated with goodwill. When estimating use value the Company is required to estimate the future cash flow
from such asset groups while selecting the appropriate discount rate to calculate the present value of future cash flow.Deferred income tax assets
Deferred income tax assets are recognised for all unused tax losses to the extent that it is probable that taxable profit
will be available against which the losses can be utilised. Significant management judgement is required to determine
the amount of deferred income tax assets that can be recognised based upon the likely timing and level of future
taxable profits together with future tax planning strategies.Share-based payments
When calculating the liabilities and expenses related to the equity incentive plan the management of the Company is
required to make judgments and estimates on issues such as the turnover rate and vesting conditions. Differences in
the judgments and estimates will have a material effect on the financial statements.
38. Changes in significant accounting policies and accounting estimates
(1) Changes in significant accounting policies
The Company did not have any change in significant accounting policies during the year.
(2) Changes in significant accounting estimates
The Company did not have any change in significant accounting estimates during the year.
54 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VI. Taxation
1. Main tax types and tax rates
Tax type Tax Base Tax rate
Value added tax (VAT) VAT payable (VAT payable is calculated 13/9/6
by multiplying taxable sales amount
by the applicable tax rate less current
deductible input VAT)
Property tax Rental income and property price 1.2/12
Urban maintenance and construction tax Turnover tax payable 7
Enterprise income tax (EIT) Taxable income 25
Disclosure of taxable entities subject to different EIT tax rates
Name of taxable entity EIT tax rate
Shandong Chenming Paper Holdings Limited 15
Shouguang Meilun Paper Co. Ltd. 15
Jilin Chenming Paper Co. Ltd. 15
Jiangxi Chenming Paper Co. Ltd. 15
Zhanjiang Chenming Pulp & Paper Co. Ltd. 15
Huanggang Chenming Pulp & Paper Co. Ltd. 15
Kunshan Tuoan Plastic Products Co. Ltd. 15
Shouguang Xinyuan Coal Co. Ltd. 20
Shouguang Chenming Papermaking Machine Co. Ltd. 20
Shouguang Wei Yuan Logistics Company Limited 20
Shouguang Shun Da Customs Declaration Co. Ltd. 20
Zhanjiang Chenming Arboriculture Development Co. Ltd. Exempt from EIT
Nanchang Chenming Arboriculture Development Co. Ltd. Exempt from EIT
Chenming Arboriculture Co. Ltd. Exempt from EIT
Yangjiang Chenming Arboriculture Development Co. Ltd. Exempt from EIT
SHANDONG CHENMING PAPER HOLDINGS LIMITED 55
INTERIM REPORT 2023I Financial Report
VI. Taxation (Continued)
2. Tax incentives
(1) Enterprise income tax
On 15 December 2021 the Company received a high and new technology enterprise certificate with a certification
number of GR202137005666. Pursuant to the requirements under the Law of the People’s Republic of China on
Enterprise Income Tax and the relevant policies the Company is subject to a corporate income tax rate of 15% of
taxable income and is entitled to the preferential treatment from 2021 to 2023.Shouguang Meilun Paper Co. Ltd. a subsidiary of the Company received a high and new technology enterprise
certificate with a certification number of GR202137005468 on 15 December 2021. Pursuant to the requirements
under the Law of the People’s Republic of China on Enterprise Income Tax and the relevant policies Shouguang
Meilun is subject to an enterprise income tax rate of 15% of taxable income and is entitled to the preferential
treatment from 2021 to 2023.Jilin Chenming Paper Co. Ltd. a subsidiary of the Company received a high and new technology enterprise
certificate with a certification number of GR202222000414 on 29 November 2022. Pursuant to the requirements
under the Law of the People’s Republic of China on Enterprise Income Tax and the relevant policies Jilin
Chenming is subject to an enterprise income tax rate of 15% of taxable income and is entitled to the preferential
treatment from 2022 to 2024.Jiangxi Chenming Paper Co. Ltd. a subsidiary of the Company received a high and new technology enterprise
certificate with a certification number of GR202236000018 on 4 November 2022. Pursuant to the requirements
under the Law of the People’s Republic of China on Enterprise Income Tax and the relevant policies Jiangxi
Chenming is subject to an enterprise income tax rate of 15% of taxable income and is entitled to the preferential
treatment from 2022 to 2024.Zhanjiang Chenming Pulp & Paper Co. Ltd. a subsidiary of the Company received a high and new technology
enterprise certificate with a certification number of GR202144001212 on 20 December 2021. Pursuant to the
requirements under the Law of the People’s Republic of China on Enterprise Income Tax and the relevant policies
Zhanjiang Chenming is subject to an enterprise income tax rate of 15% of taxable income and is entitled to the
preferential treatment from 2021 to 2023.Huanggang Chenming Pulp & Paper Co. Ltd. a subsidiary of the Company received a high and new technology
enterprise certificate with a certification number of GR202042001471 on 1 December 2020. Pursuant to the
requirements under the Law of the People’s Republic of China on Enterprise Income Tax and the relevant policies
Huanggang Chenming is subject to an enterprise income tax rate of 15% of taxable income and is entitled to the
preferential treatment from 2020 to 2022.Kunshan Tuoan Plastic Products Co. Ltd. a subsidiary of the Company received a high and new technology
enterprise certificate with a certification number of GR202032004526 on 2 December 2020. Pursuant to the
requirements under the Law of the People’s Republic of China on Enterprise Income Tax and the relevant policies
Kunshan Tuoan is subject to an enterprise income tax rate of 15% of taxable income and is entitled to the
preferential treatment from 2020 to 2022.Pursuant to the requirements of Rule 27(1) of Law of the People’s Republic of China on Enterprise Income Tax and
Rule 86(1) of regulations for the Implementation of Law of the People’s Republic of China on Enterprise Income
Tax Zhanjiang Chenming Arboriculture Development Co. Ltd. Yangjiang Chenming Arboriculture Development
Co. Ltd. Nanchang Chenming Arboriculture Development Co. Ltd. and Chenming Arboriculture Co. Ltd. which
are the subsidiaries of the Company have completed the filings for EIT reduction for exemption from EIT.
56 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VI. Taxation (Continued)
2. Tax incentives (Continued)
(1) Enterprise income tax (Continued)
Shouguang Xinyuan Coal Co. Ltd. Shouguang Chenming Papermaking Machine Co. Ltd. Shouguang Wei Yuan
Logistics Company Limited and Shouguang Shun Da Customs Declaration Co Ltd. which are subsidiaries of
the Company are small and micro enterprises. Pursuant to the Announcement of the Ministry of Finance and the
State Administration of Taxation on the Implementation of Preferential Income Tax Policies for Small and Micro
Enterprises and Individual Industrial and Commercial Business (Cai Shui [2021] No. 12) and the Announcement of
the Ministry of Finance and the State Administration of Taxation on Further Implementation of Preferential Income
Tax Policies for Small and Micro Enterprises (Cai Shui [2022] No. 13) the annual taxable income of a small low-
profit enterprise that is less than RMB1 million shall be included in its taxable income at a reduced rate of 12.5%
with the applicable enterprise income tax rate of 20%. The annual taxable income of a small low-profit enterprise
that is more than RMB1 million but not exceeding RMB3 million shall be included in its taxable income at a
reduced rate of 25% with the applicable enterprise income tax rate of 20%.Guangdong Chenming Panels Co. Ltd. a subsidiary of the Company meets the requirements of Rule 99 of the
Regulations for the Implementation of Law of the People’s Republic of China on Enterprise Income Tax (Decree
No. 512 of the State Council of the People’s Republic of China) and the Announcement of the Ministry of Finance
and the State Administration of Taxation on Improvement of the Value-added Tax Policy for the Comprehensive
Utilisation of Resources (Cai Shui [2021] No. 40): For enterprises that derive income from the products listed in
the Catalogue which are in line with related national or industry standards by making use of the resources listed in
the Catalogue as the main raw materials taxable income will be calculated at a reduced rate of 90% of the total
revenue. To be entitled to the above tax benefits the ratio of the resources listed in the Catalogue and the raw
materials used for the product shall be consistent with the required technical standards stated in the Catalogue.
(2) Value-added Tax (“VAT”)
Pursuant to Rule 10 of the Interim Regulation of the People’s Republic of China on Value Added Tax Zhanjiang
Chenming Arboriculture Development Co. Ltd. Yangjiang Chenming Arboriculture Development Co. Ltd.Nanchang Chenming Arboriculture Development Co. Ltd. and Chenming Arboriculture Co. Ltd. which are
subsidiaries of the Company are exempt from VAT and have completed the filings for VAT reduction for
exemption from VAT.SHANDONG CHENMING PAPER HOLDINGS LIMITED 57
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements
1. Monetary funds
Unit: RMB
Item Closing balance Opening balance
Treasury cash 3577158.84 3491219.08
Bank deposit 1839192335.42 2155968930.43
Other monetary funds 11912761370.57 11840974836.57
Total 13755530864.83 14000434986.08
Of which: Total deposits in overseas banks 334092239.78 593378097.70
Total restricted amount due to mortgages pledges or freezes 11853449355.40 11756140645.56
Other explanations:
* Other monetary funds of RMB8797013971.15 were the guarantee deposit for the application for bank
acceptance with the banks by the Company;
* Other monetary funds of RMB2657225384.25 were the guarantee deposit for the application for letter of credit
with the banks by the Company;
* Other monetary funds of RMB322500000.00 were the guarantee deposit for the application for guarantees with
the banks by the Company;
* Other monetary funds of RMB76710000.00 were the Company’s statutory reserve deposits at the People’s Bank
of China;
* Other monetary funds included accrued interest of RMB59312015.17.
2. Financial assets held for trading
Unit: RMB
Item Closing balance Opening balance
Financial assets measured at fair value through profit or loss 50433870.59 74708444.88
Of which:
Investment in equity instruments 50433870.59 74708444.88
Total 50433870.59 74708444.88
Explanation: Financial assets held for trading were shares of China Bohai Bank subscribed by the Company.
58 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
3. Accounts receivable
(1) Disclosure of accounts receivable by category
Unit: RMB
Closing balance Opening balance
Book balance Bad debt provision Book balance Bad debt provision
Percentage Percentage Percentage Percentage
Category Amount (%) Amount (%) Carrying amount Amount (%) Amount (%) Carrying amount
Accounts receivable assessed
individually for bad debt provision 221531626.66 6.49 221531626.66 100.00 226667597.47 6.13 226667597.47 100.00
Accounts receivable assessed
collectively for bad debt provision 3193714088.42 93.51 247560117.31 7.75 2946153971.11 3473893247.32 93.87 261632801.36 7.53 3212260445.96
Of which:
Due from related party customers 6494662.96 0.19 6756.49 0.10 6487906.47 8639295.98 0.23 1775510.01 20.55 6863785.97
Due from non-related party
customers 1852451198.85 54.24 49073801.39 2.65 1803377397.46 2081296530.28 56.24 52357160.25 2.52 2028939370.03
Factoring receivables 1334768226.61 39.08 198479559.43 14.87 1136288667.18 1383957421.06 37.40 207500131.10 14.99 1176457289.96
Total 3415245715.08 100.00 469091743.97 13.74 2946153971.11 3700560844.79 100.00 488300398.83 13.20 3212260445.96
Items assessed individually for bad debt provision:
Unit: RMB
Closing balance
Provision
Bad debts percentage
Name Book balance provision (%) Provision reason
Hengfeng Hongyuan Real Estate Holdings Co. Ltd. 45493811.40 45493811.40 100.00 Long outstanding
Ningxia Lingwu Baota Dagu Storage and
Transportation Co. Ltd. 27600000.00 27600000.00 100.00 Long outstanding
Foshan Shunde Xingchen Paper Co. Ltd. 26236528.70 26236528.70 100.00 Long outstanding
Zhengzhou Hongyang Paper Products Co. Ltd. 14933432.93 14933432.93 100.00 Long outstanding
Shandong Bisheng Printing Materials Co. Ltd. 14813369.27 14813369.27 100.00 Long outstanding
Henan Yibang Technology Trading Co. Ltd. 13396601.22 13396601.22 100.00 Long outstanding
90 companies including Shandong Yiming New
Material Technology Corp Co. Ltd. 79057883.14 79057883.14 100.00 Long outstanding
Total 221531626.66 221531626.66 100.00
SHANDONG CHENMING PAPER HOLDINGS LIMITED 59
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
3. Accounts receivable (Cont’d)
(1) Disclosure of accounts receivable by category (Cont’d)
Items assessed collectively for bad debt provision: Due from related party customers
Unit: RMB
Closing balance
Bad debts Provision
Name Book balance provision percentage (%)
Within 1 year 6494662.96 6756.49 0.10
Total 6494662.96 6756.49 0.10
Items assessed collectively for bad debt provision: Receivables from non-related party customer
Unit: RMB
Closing balance
Bad debts Provision
Name Book balance provision percentage (%)
Within 1 year 1742600457.64 8196561.59 0.47
1 to 2 years 49846903.41 8433176.68 16.92
2 to 3 years 2788682.14 1217451.72 43.66
Over 3 years 57215155.66 31226611.40 54.58
Total 1852451198.85 49073801.39 2.65
Items assessed collectively for bad debt provision: Factoring receivables
Unit: RMB
Closing balance
Bad debts Provision
Name Book balance provision percentage (%)
Within 1 year 279980044.46 15564778.33 5.56
1 to 2 years 904649222.15 130814781.10 14.46
2 to 3 years
Over 3 years 150138960.00 52100000.00 34.70
Total 1334768226.61 198479559.43 14.87
60 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
3. Accounts receivable (Cont’d)
(1) Disclosure of accounts receivable by category (Cont’d)
If the bad debt provision of accounts receivable is made in accordance with the general model of ECLs please
disclose the information about bad debt provision with reference to the way of disclosure of other receivables:
√ Applicable □ Not applicable
Disclosure by ageing
Unit: RMB
Ageing Closing balance
Within 1 year (including 1 year) 2029075165.06
1 to 2 years 1024496125.56
2 to 3 years 2788682.14
Over 3 years 358885742.32
Subtotal 3415245715.08
Bad debts provision 469091743.97
Total 2946153971.11
The basis used by the ageing analysis of the accounts receivable of the Company: the ageing of accounts
receivable is the length of time of the Company’s outstanding accounts receivable based on invoice date. The
closing balance is recognised one by one from the end of the period onwards until the amounts add up to the
balance. It is also broken up by intervals of within 1 year 1-2 years 2-3 years 3-4 years 4-5 years and over 5
years.
(2) Provision recovery or reversal of bad debt provision for the period
Bad debt provision for the period:
Unit: RMB
Changes in the period
Recovery
Category Opening balance Provision or reversal Written-off Others Closing balance
Bad debts provision 488300398.83 21928911.71 13618485.47 27600041.68 80960.58 469091743.97
Total 488300398.83 21928911.71 13618485.47 27600041.68 80960.58 469091743.97
Explanation: Others represent the accounts receivable with provision for bad debts transferred from the merger of
Jiangxi Chenming Port Co. Ltd.SHANDONG CHENMING PAPER HOLDINGS LIMITED 61
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
3. Accounts receivable (Cont’d)
(3) Top five accounts receivable based on closing balance of debtors
The total amount of top five accounts receivable based on closing balance of debtors for the period amounted
to RMB1128033226.63 in total accounting for 33.03% of the total closing balance of accounts receivable. The
closing balance of the corresponding bad debt provision amounted to RMB116908685.72 in total.Unit: RMB
As a percentage
of the closing
Closing balance balance of the Closing balance
of accounts total accounts of bad debt
Name of entity receivable receivable (%) provision
Customer I 481810233.33 14.11 40333075.30
Customer II 222656666.64 6.52 24596930.88
Customer III 198805660.00 5.82 27024669.68
Customer IV 121908333.33 3.57 14629000.00
Customer V 102852333.33 3.01 10325009.86
Total 1128033226.63 33.03 116908685.72
4. Accounts receivable financing
Unit: RMB
Item Closing balance Opening balance
Bills receivable 614794433.04 924960384.16
Total 614794433.04 924960384.16
Changes (increase or decrease) during the period and change in fair value of accounts receivable financing
□ Applicable √ Not applicable
If the provision for impairment of accounts receivable financing is made in accordance with the general model of
ECLs please disclose the information about provision for impairment with reference to the way of disclosure of other
receivables:
□ Applicable √ Not applicable
62 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
5. Prepayments
(1) Presentation of prepayments according to ageing analysis
Unit: RMB
Closing balance Opening balance
Ageing Amount Percentage Amount Percentage
Within 1 year 805903097.64 95.16% 749904460.45 95.14%
1 to 2 years 41017883.73 4.84% 38287166.37 4.86%
Total 846920981.37 100.00% 788191626.82 100.00%
(2) Top five prepayments based on closing balance of prepaid parties
The total amount of top five prepayments based on closing balance of prepaid parties for the period amounted to
RMB379724428.05 accounting for 44.84% of the closing balance of the total prepayments.Unit: RMB
As a percentage
of the closing
Closing balance balance of the
Name of entity of prepayments total prepayments
Customer I 131294630.13 15.50%
Customer II 71725703.12 8.47%
Customer III 63062594.80 7.45%
Customer IV 60929500.00 7.19%
Customer V 52712000.00 6.22%
Total 379724428.05 44.84%
SHANDONG CHENMING PAPER HOLDINGS LIMITED 63
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
6. Other receivables
Unit: RMB
Item Closing balance Opening balance
Other receivables 1645909354.44 1717445443.44
Total 1645909354.44 1717445443.44
(1) Other receivables by nature
Unit: RMB
Closing book Opening book
Nature balance balance
Open credit 2022161667.40 2108991172.35
Reserve and borrowings 32813868.97 26270269.00
Guarantee deposit and deposit 12109761.41 12230367.80
Others 46303026.70 52332819.95
Total 2113388324.48 2199824629.10
(2) Particulars of bad debt provision
Unit: RMB
Stage 1 Stage 2 Stage 3
Lifetime ECLs Lifetime ECLs
ECLs for the (not credit- (credit-
Bad debts provision next 12 months impaired) impaired) Total
Balance as at 1 January 2023 73559281.09 408819904.57 482379185.66
Balance as at 1 January 2023
for the period
– Transferred to stage 2
– Transferred to stage 3
– Reversed to stage 2
– Reversed to stage 1
Provision for the period 13193201.53 421349.71 13614551.24
Reversal for the period 1298753.94 27264570.68 28563324.62
Transfer for the period
Write-off for the period
Other changes 48557.76 48557.76
Balance as at 30 June 2023 85502286.44 381976683.60 467478970.04
64 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
6. Other receivables (Cont’d)
(2) Particulars of bad debt provision (Cont’d)
Changes in carrying book balances with significant changes in loss provision for the period
□ Applicable √ Not applicable
Explanation: In 2023 the Company obtained control over Jiangxi Chenming Port Co. Ltd. Other changes in bad
debt provision as described in the table above represent the balance of bad debt provision of such company at
the acquisition date.Disclosure by ageing
Unit: RMB
Ageing Closing balance
Within 1 year (including 1 year) 496853852.10
1 to 2 years 310379496.32
2 to 3 years 643164143.67
Over 3 years 662990832.39
Total 2113388324.48
(3) Provision recovery or reversal of bad debt provision for the period
Bad debt provision for the period:
Unit: RMB
Changes in the period
Opening Recovery
Category balance Provision or reversal Write-off Others Closing balance
Bad debts provision 482379185.66 13614551.24 28563324.62 48557.76 467478970.04
Total 482379185.66 13614551.24 28563324.62 48557.76 467478970.04
SHANDONG CHENMING PAPER HOLDINGS LIMITED 65
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
6. Other receivables (Cont’d)
(4) Top five accounts receivable based on closing balance of debtors
The total amount of top five accounts receivable based on closing balance of debtors for the period amounted
to RMB1258260155.89 in total accounting for 59.52% of the total closing balance of accounts receivable. The
closing balance of the corresponding bad debt provision amounted to RMB266924822.62 in total.Unit: RMB
Percentage
to total closing Closing balance
balance of other of bad debt
Name of entity Nature Closing balance Ageing receivables provision
Customer I Consideration for equity 472854783.56 2 to 3 years 22.37% 48950000.00
transfer 3 to 4 years
Customer II Consideration for equity 453002316.85 3 to 4 years 21.43% 140010695.06
transfer
Customer III Consideration for equity 143940305.63 1 to 2 years 6.81% 64773137.54
transfer 2 to 3 years
Customer IV Consideration for equity 114840000.00 Within 1 year 5.43% 5742000.00
transfer
Customer V Financial support and 73622749.85 Within 1 year 3.48% 7448990.02
interest 1 to 2 years
Total 1258260155.89 59.52% 266924822.62
7. Inventories
Whether the Company needs to comply with the disclosure requirements for real estate industries
No
(1) Categories of inventories
Unit: RMB
Closing balance Opening balance
Impairment Impairment
provision for provision for
inventories or inventories or
performance performance
Item Book balance costs Carrying amount Book balance costs Carrying amount
Raw materials 1894223179.82 18068973.64 1876154206.18 2488652200.15 18096641.64 2470555558.51
Work-in-process products 133398598.07 133398598.07 111248779.69 111248779.69
Goods in stock 2163112731.64 43314485.76 2119798245.88 1622062893.55 16737849.96 1605325043.59
Developing costs 1156377072.09 1156377072.09 1138178959.32 1138178959.32
Consumable biological assets 1492153527.46 1492153527.46 1496607818.84 1496607818.84
Total 6839265109.08 61383459.40 6777881649.68 6856750651.55 34834491.60 6821916159.95
Note: Consumable biological assets are forestry assets.
66 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
7. Inventories (Cont’d)
(2) Impairment provision for inventories or performance costs
Unit: RMB
Increase during the period Decrease during the period
Opening Reversal or Closing
Item balance Provision Others transfer Others balance
Raw materials 18096641.64 27668.00 18068973.64
Goods in stock 16737849.96 43314485.76 16737849.96 43314485.76
Total 34834491.60 43314485.76 16765517.96 61383459.40
Basis for recognition of net realisable value: Net realisable value of goods in stock is recognised on the basis of
the estimated selling price net of related taxes and selling expenses. Basis for recognition of net realisable value:
the estimated selling price of the target product net of related taxes selling expenses and costs to be incurred
until completion.Reversal or transfer of impairment provision for inventories during the period was due to: Impairment provision for
inventories during the period due to the purchase of raw materials for which impairment provision had been made
and the sale of inventories for which impairment provision had been made.
8. Non-current assets due within one year
Unit: RMB
Item Closing balance Opening balance
Long-term receivables due within one year 3852470167.90 3998724415.85
Total 3852470167.90 3998724415.85
Explanations:
* Long-term receivables due within one year amounting to RMB3736417788.05 (amount for the prior year: RMB3920915510.01) were
financial lease receivables;
* Long-term receivables due within one year amounting to RMB116052379.85 (amount for the prior year: RMB77808905.84) were
deposits receivable.
9. Other current assets
Unit: RMB
Item Closing balance Opening balance
Prepaid expenses 332730125.13 241313507.50
Receivables under financial lease due within one year 328065332.45 340546803.50
Factoring receivables due within one year 274708276.63 298446276.63
Input tax amount to be deducted 90137290.97 141038575.79
Prepaid tax 70252896.53 92806690.76
Other payments 64992565.10 66655947.44
Total 1160886486.81 1180807801.62
SHANDONG CHENMING PAPER HOLDINGS LIMITED 67
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
10. Long-term receivables
Unit: RMB
Closing balance Opening balance Discount
Item Book balance Bad debts provision Carrying amount Book balance Bad debts provision Carrying amount rate range
Finance lease payments 6349305959.96 1305082476.71 5044223483.25 6739718184.27 1302116713.90 5437601470.37 4%-12%
Less: Unrealised financing income 173784123.48 173784123.48 271455622.37 271455622.37
Equipment lease financing 382214607.49 382214607.49 351446696.64 351446696.64
Less: Unrealised financing income 27622840.15 27622840.15 32060345.32 32060345.32
Subtotal 6530113603.82 1305082476.71 5225031127.11 6787648913.22 1302116713.90 5485532199.32
Less: Long-term receivables due within one year 4910948881.99 1058478714.09 3852470167.90 5075152713.36 1076428297.51 3998724415.85
Total 1619164721.83 246603762.62 1372560959.21 1712496199.86 225688416.39 1486807783.47
Particulars of bad debt provision impairment
Unit: RMB
Stage 1 Stage 2 Stage 3
Lifetime ECLs
ECLs for the (not credit- Lifetime ECLs
Bad debts provision next 12 months impaired) (credit-impaired) Total
Balance as at 1 January 2023 3237410.85 222451005.54 225688416.39
Balance as at 1 January 2023 for the period 3237410.85 222451005.54 225688416.39
– Transferred to stage 2
– Transferred to stage 3
– Reversed to stage 2
– Reversed to stage 1
Provision for the period 21450269.72 21450269.72
Reversal for the period 98613.99 98613.99
Transfer for the period
Write-off for the period
Other changes -436309.50 -436309.50
Balance as at 30 June 2023 2702487.36 243901275.26 246603762.62
Note: Other changes represented the transfer of the bad debt provision for long-term financing lease payments due within one year from long-
term receivables to non-current assets due within one year during the period.Changes in carrying book balances with significant changes in loss provision for the period
□ Applicable √ Not applicable
68 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
11. Long-term equity investments
Unit: RMB
Change for the period
Investment
Opening gain or loss Adjustment Distribution Closing Closing
balance recognised of other Other change of cash balance balance of
(carrying Additional Withdrawn under equity comprehensive in equity dividend or Impairment (carrying impairment
Investee amount) contribution contribution method income interest profit declared provision Others amount) provision
I. Joint ventures
Shouguang Chenming Huisen
New-style Construction
Materials Co. Ltd. 7892659.42 1025474.67 1100000.00 7818134.09
Weifang Port Wood Chip
Terminal Co. Ltd. 74848570.73 -3915613.06 70932957.67
Shouguang Meite
Environmental Technology
Co. Ltd. 8921843.88 9656629.58 18578473.46
Shouguang Jintou Industrial
Investment Partnership
(Limited Partnership) 2359998661.67 -803127.31 2359195534.36
Weifang Xingxing United
Chemical Co. Ltd. 91874385.12 91874385.12
Subtotal 2543536120.82 5963363.88 1100000.00 2548399484.70
II. Associates
Zhuhai Dechen New Third
Board Equity Investment
Fund Company (Limited
Partnership) 36776710.91 5000000.00 35769.93 31812480.84
Ningbo Kaichen Huamei Equity
Investment Fund Partnership
(Limited Partnership) 197218318.77 -3089.85 197215228.92
Nanchang Tianchen Port Co.Ltd. 59345429.05 3760608.16 2125403.30 60980633.91
Goldtrust Futures Co. Ltd. 178389182.83 -177137.24 178212045.59
Chenming (Qingdao) Asset
Management Co. Ltd. 6482035.69 27510.92 6509546.61
Guangdong Nanyue Bank
Co. Ltd. 1314611000.54 14327244.01 2605105.12 1331543349.67
Subtotal 1733477248.74 59345429.05 5000000.00 17970905.93 2605105.12 2125403.30 1806273285.54
Total 4277013369.56 59345429.05 5000000.00 23934269.81 2605105.12 3225403.30 4354672770.24
SHANDONG CHENMING PAPER HOLDINGS LIMITED 69
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
12. Other non-current financial assets
Unit: RMB
Item Closing balance Opening balance
Investment in debt instruments 663000000.00 663000000.00
Investment in equity instruments 122374459.73 123750761.62
Total 785374459.73 786750761.62
13. Investment property
(1) Investment property under the cost method
√ Applicable □ Not applicable
Unit: RMB
Housing and
Item building structure Total
I. Original carrying amount
1. Opening balance 7160214568.83 7160214568.83
2. Increase during the period
(1) Acquisition
3. Decrease during the period 3155127.04 3155127.04
(1) Disposal 3155127.04 3155127.04
4. Closing balance 7157059441.79 7157059441.79
II. Accumulated depreciation and accumulated amortisation
1. Opening balance 903491455.68 903491455.68
2. Increase during the period 99749771.43 99749771.43
(1) Provision or amortisation 99749771.43 99749771.43
3. Decrease during the period 506304.34 506304.34
(1) Disposal 506304.34 506304.34
4. Closing balance 1002734922.77 1002734922.77
III. Impairment provision
1. Opening balance
2. Increase during the period
(1) Provision
3. Decrease during the period
(1) Disposal
(2) Transferred due to debt restructuring
4. Closing balance
IV. Carrying amount
1. Closing carrying amount 6154324519.02 6154324519.02
2. Opening carrying amount 6256723113.15 6256723113.15
70 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
13. Investment property (Cont’d)
(1) Investment property under the cost method (Cont’d)
Note: Investment properties under the Company primarily include:
* Pujiang International Finance Plaza located at No. 1098 Dongdaming Road Hongkou District Shanghai is a long-term held office
property of Shanghai Hongtai Real Estate Co. Ltd. a subsidiary of the Company mainly used for external rental or office purposes;
* Jinan Chenming Finance Building (濟南晨鳴金融大廈) located in No. 7 Zone Hanyu Financial Business Center No. 7000 Jingshi
Road Jinan Innovation Zone is a long-term held office property of Shandong Chenming Investment Limited a subsidiary of the
Company mainly used for external rental or office purposes;
* Fatum Apartment (法朵公寓) located at No. 463 Anbo Road No. 22 Lane 467 Anbo Road Yangpu District Shanghai is a long-
term held apartment property of Shanghai Herui Investment Co. Ltd. a subsidiary of the Company mainly used for external rental
purposes;
* Guangzhou Zhengjia Plaza (廣州正佳廣場) located at Room 3901-3926 No. 372 Huanshi East Road Yuexiu District Guangzhou
is a long-term held office property of Guangzhou Chenming Property Management Co. Ltd. a subsidiary of the Company mainly
used for external rental purposes;
* Shenzhen Zhuoyue Baozhong Times Square (深圳卓越寶中時代廣場) located at Room 3201-3210 Building C Zhuoyue Baozhong
Times Square (Phase 2) Xin’an Sub-district Bao’an District Shenzhen is a long-term held office property of Guangzhou Chenming
Property Management Co. Ltd. a subsidiary of the Company mainly used for external rental purposes.* Shanghai Xizang South Road shop located at No. 518-528 Xizang South Road Shanghai is a long-term store held by Wuhan
Junheng Property Management Co. Ltd. a subsidiary mainly for external rental purposes.
(2) Investment property under the fair value method
□ Applicable √ Not applicable
14. Fixed assets
Unit: RMB
Item Closing balance Opening balance
Fixed assets 32705962616.97 33527978754.73
Disposal of fixed assets 269759940.57 269759940.57
Total 32975722557.54 33797738695.30
SHANDONG CHENMING PAPER HOLDINGS LIMITED 71
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
14. Fixed assets (Cont’d)
(1) Particulars of fixed assets
Unit: RMB
Electronic
Housing and Machinery and equipment
Item building structure equipment Vehicles and others Total
I. Original carrying amount:
1. Opening balance 10286809124.89 43106182009.60 288801665.32 400465471.75 54082258271.56
2. Increase during the period 157781537.57 100275378.24 3858108.56 4379990.07 266295014.44
(1) Acquisition 6680702.78 67294320.85 1865070.94 3954275.14 79794369.71
(2) Transferred from construction in
progress 2816881.40 30148765.87 32965647.27
(3) Increase due to business
combination 148283953.39 2832291.52 1993037.62 425714.93 153534997.46
3. Decrease during the period 14572261.40 14975053.02 496759.27 2507761.56 32551835.25
(1) Disposal or retirement 14572261.40 14975053.02 496759.27 2507761.56 32551835.25
4. Closing balance 10430018401.06 43191482334.82 292163014.61 402337700.26 54316001450.75
II. Accumulated depreciation
1. Opening balance 2329752339.57 17561160193.98 200474107.77 258849412.20 20350236053.52
2. Increase during the period 173982240.84 880608831.89 11092467.73 5955495.73 1071639036.19
(1) Provision 133108443.58 879938525.21 10383519.51 5750532.09 1029181020.39
(2) Increase due to business
combination 40873797.26 670306.68 708948.22 204963.64 42458015.80
3. Decrease during the period 5639596.73 7890452.65 256285.18 2093384.68 15879719.24
(1) Disposal or retirement 5639596.73 7890452.65 256285.18 2093384.68 15879719.24
4. Closing balance 2498094983.68 18433878573.22 211310290.32 262711523.25 21405995370.47
III. Provision for impairment
1. Opening balance 27808852.79 168785487.47 13889.13 7435233.92 204043463.31
2. Increase during the period
(1) Provision
3. Decrease during the period
(1) Disposal or retirement
4. Closing balance 27808852.79 168785487.47 13889.13 7435233.92 204043463.31
IV. Carrying amount
1. Closing carrying amount 7904114564.59 24588818274.13 80838835.16 132190943.09 32705962616.97
2. Opening carrying amount 7929247932.53 25376236328.15 88313668.42 134180825.63 33527978754.73
72 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
14. Fixed assets (Cont’d)
(2) Particulars of temporarily idle fixed assets
Unit: RMB
Original carrying Accumulated Provision for
Item amount depreciation impairment Carrying amount Remark
Housing and building structure 72585434.37 24639785.75 3093008.64 44852639.98
Machinery and equipment 893374015.71 563977620.65 147863071.36 181533323.70
Electronic equipment and others 478399.18 430411.06 7187.27 40800.85
Total 966437849.26 589047817.46 150963267.27 226426764.53
(3) Particulars of fixed assets without obtaining property right certificates
Unit: RMB
Reason for not yet
obtaining property
Item Carrying amount right certificates
Housing and building structure (Zhanjiang Chenming
Pulp & Paper Co. Ltd.) 998765824.60 Under application
Housing and building structure (Huanggang Chenming
Pulp & Paper Co. Ltd.) 584615688.59 Under application
Housing and building structure (Shouguang Meilun Paper Co. Ltd.) 521012901.37 Under application
Housing and building structure (Jilin Chenming Paper Co. Ltd.) 369108268.46 Under application
Housing and building structure (Jiangxi Chenming Paper
Co. Ltd.) 197048976.25 Under application
Housing and building structure (Shandong Chenming Paper
Holdings Limited) 93423000.91 Under application
(4) Disposal of fixed assets
Unit: RMB
Item Closing balance Opening balance
Machinery equipment electronic and other equipment in production
workshop of Wuhan Chenming 3457743.88 3457743.88
Housing and office equipment of Wuhan Chenming management
integrated office 168170645.13 168170645.13
Generator machinery equipment of Qianneng Electric Power factory
area 59225154.99 59225154.99
Boiler room and other structures of Qianneng Electric Power factory
area 38801269.05 38801269.05
Transportation and others of Qianneng Electric Power factory area 105127.52 105127.52
Total 269759940.57 269759940.57
SHANDONG CHENMING PAPER HOLDINGS LIMITED 73
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
15. Construction in progress
Unit: RMB
Item Closing balance Opening balance
Construction in progress 666573576.71 551020785.44
Materials for project 7851514.55 7846094.92
Total 674425091.26 558866880.36
(1) Particulars of construction in progress
Unit: RMB
Closing balance Opening balance
Impairment Impairment
Item Book balance provision Carrying amount Book balance provision Carrying amount
Relocation of Wuhan 4800 papermaking
machine project (Zhanjiang) 359821563.97 359821563.97 303942703.51 303942703.51
Technological transformation project 179165773.85 179165773.85 121193391.56 121193391.56
Integrated forestry pulp and paper project
(Huanggang Pulp & Paper) 45524448.90 45524448.90 45538442.78 45538442.78
Others 103200461.75 21138671.76 82061789.99 101484919.35 21138671.76 80346247.59
Total 687712248.47 21138671.76 666573576.71 572159457.20 21138671.76 551020785.44
(2) Changes in material construction in progress projects for the period
Unit: RMB
Of which:
Capitalised Capitalisation
Transfer Other interest rate of the
Increase to fixed asset deductions Accumulated Accumulated amount interest
Opening during the during the during the Closing investment Construction capitalised during the amount for Source
Project name Budget balance period period period balance to budget progress interest period the period of fund
Relocation of Wuhan 4800
papermaking machine
project (Zhanjiang) 800000000.00 303942703.51 55878860.46 359821563.97 44.98% 44.98% Self-owned funds
Integrated forestry pulp and
paper project (Huanggang
Pulp & Paper) 320000000.00 45538442.78 8363873.16 8377867.04 45524448.90 30.72% 30.72% Self-owned funds
Total 1120000000.00 349481146.29 64242733.62 8377867.04 405346012.87
74 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
15. Construction in progress (Cont’d)
(3) Materials for project
Unit: RMB
Closing balance Opening balance
Impairment Impairment
Item Book balance provision Carrying amount Book balance provision Carrying amount
Special materials 7851514.55 7851514.55 7846094.92 7846094.92
Total 7851514.55 7851514.55 7846094.92 7846094.92
16. Bearer biological assets
(1) Bearer biological assets under the cost method
√ Applicable □ Not applicable
Unit: RMB
Item Tea trees Total
I. Original carrying amount
1. Opening balance 13697336.80 13697336.80
2. Increase during the period 3083477.56 3083477.56
(1) Purchase
(2) Self-cultivation 3083477.56 3083477.56
3. Decrease during the period
4. Closing balance 16780814.36 16780814.36
II. Accumulated depreciation
1. Opening balance
2. Increase during the period
3. Decrease during the period
4. Closing balance
III. Impairment provision
1. Opening balance
2. Increase during the period
3. Decrease during the period
4. Closing balance
IV. Carrying amount
1. Closing carrying amount 16780814.36 16780814.36
2. Opening carrying amount 13697336.80 13697336.80
SHANDONG CHENMING PAPER HOLDINGS LIMITED 75
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
17. Right-of-use assets
Unit: RMB
Housing and
Item Land use rights building structure Total
I. Original carrying amount
1. Opening balance 205820222.41 5546607.90 211366830.31
2. Increase during the period
3. Decrease during the period 3213041.31 12385.32 3225426.63
(1) Transfer or held for sale 3089188.11 3089188.11
(2) Other decreases 123853.20 12385.32 136238.52
4. Closing balance 202607181.10 5534222.58 208141403.68
II. Accumulated depreciation
1. Opening balance 28702609.31 1049521.75 29752131.06
2. Increase during the period 3434275.84 137854.17 3572130.01
(1) Provision 3434275.84 137854.17 3572130.01
3. Decrease during the period 266938.74 266938.74
(1) Transfer or held for sale 266938.74 266938.74
4. Closing balance 31869946.41 1187375.92 33057322.33
III. Impairment provision
1. Opening balance
2. Increase during the period
(1) Provision
3. Decrease during the period
(1) Disposal
4. Closing balance
IV. Carrying amount
1. Closing carrying amount 170737234.69 4346846.66 175084081.35
2. Opening carrying amount 177117613.10 4497086.15 181614699.25
Explanation: The reason for other decreases is that the original recognised amount of right-of-use assets was tax-
included and as the invoices for leasing have been received the input tax amount offset the original carrying amount of
the right-of-use assets.
76 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
18. Intangible assets
(1) Particulars of intangible assets
Unit: RMB
Unpatented Certificates of
Item Land use rights Patents technology third party right Total
I. Original carrying amount
1. Opening balance 2317286177.57 22054431.73 27493613.05 15908674.87 2382742897.22
2. Increase during the period 35251750.67 35251750.67
(1) Acquisition 24205100.00 24205100.00
(2) Increase due to business
combination 11046650.67 11046650.67
3. Decrease during the period
4. Closing balance 2352537928.24 22054431.73 27493613.05 15908674.87 2417994647.89
II. Accumulated amortisation
1. Opening balance 512384814.26 22054431.73 1056145.44 15908674.87 551404066.30
2. Increase during the period 28625702.85 57995.83 28683698.65
(1) Provision 26543505.50 57995.83 26601501.33
(2) Increase due to business
combination 2082197.32 2082197.32
3. Decrease during the period
4. Closing balance 541010517.08 22054431.73 1114141.27 15908674.87 580087764.95
III. Impairment provision
1. Opening balance
2. Increase during the period
3. Decrease during the period
4. Closing balance
IV. Carrying amount
1. Closing carrying amount 1811527411.16 26379471.78 1837906882.94
2. Opening carrying amount 1804901363.31 26437467.61 1831338830.92
Explanation: * For details of restricted ownership please refer to note VII. 63;
* Certificates of third party right refer to enterprise emission rights.SHANDONG CHENMING PAPER HOLDINGS LIMITED 77
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
19. Goodwill
(1) Original carrying amount of goodwill
Unit: RMB
Increase during Decrease during
the period the period
Arising from
business
Name of investee or event generating goodwill Opening balance combinations Disposal Closing balance
Jilin Chenming Paper Co. Ltd. 14314160.60 14314160.60
Kunshan Tuoan Plastic Products Co. Ltd. 26946905.38 26946905.38
Jiangxi Chenming Port Co. Ltd. 8273638.42 8273638.42
Total 41261065.98 8273638.42 49534704.40
(2) Provision for impairment of goodwill
Unit: RMB
Increase during Decrease during
the period the period
Name of investee or event generating goodwill Opening balance Provision Disposal Closing balance
Jilin Chenming Paper Co. Ltd. 14314160.60 14314160.60
Total 14314160.60 14314160.60
The Company assessed the recoverable amount of goodwill and determined that the goodwill related to the
Company’s plastic business was not impaired. With the category of the principal activities as the basis for
determining the reporting segments the Company regarded Kunshan Tuoan Plastic Products Co. Ltd. and
Jiangxi Chenming Port Co. Ltd. as an asset group. The recoverable amount was determined based on the present
value of the estimated future cash flows.Future cash flows were determined based on the financial budget for 2023 to 2027 as approved by the
management and adopted 7.28% as the discount rate which was the interest rate of the 5-year bonds issued by
the Company in 2018. The cash flows for more than 5 years are calculated based on the growth rate of 5%. Other
key assumptions used in estimating future cash flows included the estimated sales and gross profit based on the
performance of such asset group in the past and the expectation to market development by the management. The
management believed that any reasonable change in the above assumptions will not result in the total book value
of the asset group Kunshan Tuoan Plastic Products Co. Ltd. exceeding its recoverable amount.
20. Long-term prepaid expenses
Unit: RMB
Opening Increase during Amortisation Other
Item balance the period during the period deductions Closing balance
Woodland expenses 7233827.75 347610.66 1244638.45 6336799.96
Others 37229023.70 40130.01 1725987.68 35543166.03
Total 44462851.45 387740.67 2970626.13 41879965.99
78 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
21. Deferred income tax assets/deferred income tax liabilities
(1) Deferred income tax assets before offsetting
Unit: RMB
Closing balance Opening balance
Deductible temporary Deferred income Deductible temporary Deferred income
Item difference tax assets difference tax assets
Provision for impairment of assets 2689226543.47 572930085.69 2344419524.10 549431097.40
Unrealised profit arising from intra-group
transactions 1399629.90 349907.48 47231691.32 11807922.83
Outstanding payables 122792373.61 18768839.94 169723942.88 26380462.69
Deferred income 160218077.69 24632987.76 193822821.65 29673699.36
Deductible loss 5965548854.64 942938248.29 4578592243.20 716030918.97
Debt restructuring 30831.05 7707.76
Special reserves 19914734.49 2650556.79 15791710.95 2368756.59
Total 8959100213.80 1562270625.95 7349612765.15 1335700565.60
(2) Deferred income tax liabilities before offsetting
Unit: RMB
Closing balance Opening balance
Taxable temporary Deferred income Taxable temporary Deferred income
Item differences tax liabilities differences tax liabilities
Asset valuation increment from business
combinations involving entities not under
common control 56746069.84 10242663.26 19104051.04 4776012.76
Debt restructuring 13621006.12 3405251.53 13621006.12 3405251.53
Total 70367075.96 13647914.79 32725057.16 8181264.29
SHANDONG CHENMING PAPER HOLDINGS LIMITED 79
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
21. Deferred income tax assets/deferred income tax liabilities (Cont’d)
(3) The breakdown of unrecognised deferred income tax assets
Unit: RMB
Item Closing balance Opening balance
Deductible temporary difference 61132211.70 10365962.12
Deductible loss 680496027.54 808569643.83
Total 741628239.24 818935605.95
(4) Expiry of deductible loss of unrecognised deferred income tax assets falls in the years as follows
Unit: RMB
Year Closing balance Opening balance Remark
2023—189187446.57
2024178453414.73178453991.84
2025237824072.25251671920.26
2026117354955.05119959990.04
202769296295.1269296295.12
202877567290.39—
Total 680496027.54 808569643.83
22. Other non-current assets
Unit: RMB
Closing balance Opening balance
Book Impairment Impairment
Item balance provision Carrying amount Book balance provision Carrying amount
Prepayments for certificates of third party
right 2612250.68 2612250.68 2612250.68 2612250.68
Payments for engineering and equipment 1013043454.74 1013043454.74 981293657.32 981293657.32
Total 1015655705.42 1015655705.42 983905908.00 983905908.00
80 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
23. Short-term borrowings
(1) Classification of short-term borrowings
Unit: RMB
Item Closing balance Opening balance
Discounted borrowings 14310500000.00 16207640000.00
Credit borrowings 9770481878.49 9613884197.48
Guaranteed borrowings 9411256447.63 9757184167.65
Pledged borrowings 1389288800.16 741339929.89
Mortgage borrowings 65000000.00 65000000.00
Total 34946527126.28 36385048295.02
Explanation of the classification of short-term borrowings:
* For classification and amount of pledged borrowings and mortgage assets please see 1. Monetary funds
and 63. Assets with restricted ownerships or right to use in Note VII.* For classification and amount of mortgage borrowings and mortgage assets please see 1. Monetary funds
and 63. Assets with restricted ownerships or right to use in Note VII.* Overdue outstanding short-term borrowings: total outstanding short-term borrowings overdue as at the end
of the period amounted to RMB0.00.* Short-term borrowings included accrued interest of RMB18290191.17.
24. Bills payable
Unit: RMB
Category Closing balance Opening balance
Commercial acceptance bills 2326739583.28 1922361633.83
Bank acceptance bills 1204064210.33 1206234201.21
Total 3530803793.61 3128595835.04
Total outstanding bills payable due as at the end of the period amounted to RMB0.00.SHANDONG CHENMING PAPER HOLDINGS LIMITED 81
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
25. Accounts payable
(1) Particulars of accounts payable
Unit: RMB
Item Closing balance Opening balance
Payment for goods 3451530854.53 3619549023.04
Payment for engineering 183561582.14 146144102.25
Payment for equipment 105349826.86 100493461.51
Others 231640364.01 248780180.96
Total 3972082627.54 4114966767.76
(2) Disclosure by ageing
Unit: RMB
Ageing Closing balance Opening balance
Within 1 year (including 1 year) 3640462482.19 3746315716.20
1 to 2 years 91931628.46 98287651.12
2 to 3 years 32304508.59 52080919.33
Over 3 years 207384008.30 218282481.11
Total 3972082627.54 4114966767.76
The basis used by the ageing analysis of the accounts payable of the Company: the ageing of accounts payable
is the length of time of the Company’s outstanding accounts payable based on invoice date. The closing balance
is recognised one by one from the end of the period onwards until the amounts add up to the balance. It is also
broken up by intervals of within 1 year 1-2 years 2-3 years 3-4 years 4-5 years and over 5 years.
(3) Significant accounts payable aged over 1 year
Unit: RMB
Reason for outstanding
Item Closing balance or not transfer
Weifang Xingxing United Chemical Co. Ltd. 26905494.34 Not due for payment
Omya Haiming (Nanchang) Chemical Co. Ltd. 16000000.00 Not due for payment
MILLTEXS.P.A 13788818.45 Not due for payment
Zhejiang Jndia Pipeline Industry Co. Ltd. 11477155.91 Not due for payment
Voith Germany 5410815.85 Not due for payment
Total 73582284.55
82 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
26. Receipts in advance
(1) Particulars of receipts in advance
Unit: RMB
Item Closing balance Opening balance
Prepaid rents and property fees 12959619.33 14261436.67
Total 12959619.33 14261436.67
27. Contract liabilities
Unit: RMB
Item Closing balance Opening balance
Payment for goods in advance 1629061591.45 1306029389.80
Total 1629061591.45 1306029389.80
28. Staff remuneration payables
(1) Particulars of staff remuneration payables
Unit: RMB
Increase Decrease
Opening during during Closing
Item balance the period the period balance
I. Short-term remuneration 99353543.41 535303722.87 545954477.69 88702788.59
II. Retirement benefit plan-defined
contribution scheme 45572343.59 101013727.12 120486831.35 26099239.36
III. Termination benefits 1065471.76 1065471.76
IV. Other benefits due within one year
Total 144925887.00 637382921.75 667506780.80 114802027.95
SHANDONG CHENMING PAPER HOLDINGS LIMITED 83
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
28. Staff remuneration payables (Cont’d)
(2) Particulars of short-term remuneration
Unit: RMB
Decrease
Increase during during
Item Opening balance the period the period Closing balance
1. Salaries bonuses allowance and subsidies 84374864.77 409233898.71 422708539.58 70900223.90
2. Staff welfare 24252540.07 24252540.07 331036.18
3. Social insurance premium 4072690.50 53322211.30 50963905.10 6430996.70
Of which: Medical insurance premium 669598.55 48618545.65 47989841.92 1298302.28
Work-related injury insurance premium 2514203.46 3825280.09 2082524.61 4256958.94
Maternity insurance premium 888888.49 878385.56 891538.57 875735.48
4. Housing provident funds 7500937.80 34025150.85 35678548.44 5847540.21
5. Union funds and workers’ education 463017.47 9311206.98 6993594.83 2780629.62
6. Other short-term remuneration 2942032.87 5158714.96 5357349.67 2743398.16
Total 99353543.41 535303722.87 545954477.69 88702788.59
(3) Defined contribution plan
Unit: RMB
Increase Decrease
Opening during during Closing
Item balance the period the period balance
1. Basic pension insurance premiums 43615129.42 97229819.35 117696173.02 23148775.75
2. Unemployment insurance premiums 1957214.17 3783907.77 2790658.33 2950463.61
3. Enterprise annuity payment
Total 45572343.59 101013727.12 120486831.35 26099239.36
84 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
29. Tax payables
Unit: RMB
Item Closing balance Opening balance
Value added tax 51105204.81 128305607.36
Property tax 25501429.87 34531806.76
Enterprise income tax 21447951.95 51538384.55
Stamp duty 11048346.40 12987679.08
Land use tax 8976877.20 10659878.19
Environmental protection tax 3898266.33 3674817.23
Resource tax 3000000.00 3500000.00
Urban maintenance and construction tax 2798467.11 5069014.46
Educational surcharges and others 2337703.88 3955412.99
Land appreciation tax 2024028.20 2024028.20
Individual income tax 1991470.99 4765040.27
Total 134129746.74 261011669.09
30. Other payables
Unit: RMB
Item Closing balance Opening balance
Other payables 2059334576.71 1854507978.66
Interest payable 15895930.51
Total 2059334576.71 1870403909.17
SHANDONG CHENMING PAPER HOLDINGS LIMITED 85
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
30. Other payables (Cont’d)
(1) Other payables
1) Other payables by nature
Unit: RMB
Item Closing balance Opening balance
Deposit 791373992.08 788792126.26
Open credit 703492005.81 490279690.52
Accrued expenses 355747871.50 355492234.45
The obligation to repurchase shares under the share
incentive scheme 129112395.74 129112395.74
Others 79608311.58 90831531.69
Total 2059334576.71 1854507978.66
2) Significant other payables aged over 1 year
Unit: RMB
Reason for outstanding
Item Closing balance or not transfer
Zhanjiang Runbao Trading Co. Ltd. 160000000.00 Not due for payment
Shanghai Shuilan Property Management 136000000.00 Not due for payment
Co. Ltd.Nine Dragons Dawei Holdings Co. Ltd. 30000000.00 Not due for payment
Weifang Xingxing United Chemical Co. Ltd. 16860000.00 Not due for payment
Wuhan Tianrui Paper Co. Ltd. 7941708.00 Not due for payment
Total 350801708.00
(2) Interest payable
Unit: RMB
Item Closing balance Opening balance
Interest on corporate bonds 15895930.51
Total 15895930.51
86 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
31. Non-current liabilities due within one year
Unit: RMB
Item Closing balance Opening balance
Long-term payables due within one year 2507044660.93 2398150298.72
Long-term borrowings due within one year 1641025533.78 1920748225.56
Bonds payable due within one year 350000000.00
Lease liabilities due within one year 4606717.58 4606717.58
Total 4152676912.29 4673505241.86
32. Long-term borrowings
(1) Types of long-term borrowings
Unit: RMB
Item Closing balance Opening balance
Mortgage borrowings 4262402572.55 3118508092.17
Credit borrowings 1362804500.00 1405855117.94
Guaranteed borrowings 911364765.59 1378621266.53
Less: Long-term borrowings due within one year 1641025533.78 1920748225.56
Total 4895546304.36 3982236251.08
Explanation of the types of long-term borrowings:
* For classification and amount of mortgage assets of mortgage borrowings please see 63. Assets with
restricted ownerships or right to use in Note VII;
* Long-term borrowings included accrued interest of RMB14309265.59.
33. Bonds payable
(1) Bonds payable
Unit: RMB
Item Closing balance Opening balance
18 Chenming Bond 01 – Chenming Group
Total
SHANDONG CHENMING PAPER HOLDINGS LIMITED 87
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
33. Bonds payable (Cont’d)
(2) Increase/decrease in bonds payable (excluding other financial instruments such as preference shares and
Perpetual Bonds classified as financial liabilities)
Unit: RMB
Issue Amortisation Redemption
Date of during the Interest at of premium/ during the Closing
Bond name Par value issue Term Amount Opening balance period par value discount period balance
18 Chenming Bond 01 –
Chenming Group 350000000.00 2018-4-2 5 years 350000000.00 350000000.00 15895930.51 365895930.51
Subtotal 350000000.00 350000000.00 15895930.51 365895930.51
Less: B onds payable due within
one year 350000000.00
Total 350000000.00 15895930.51 365895930.51
34. Lease liabilities
Unit: RMB
Item Closing balance Opening balance
Lease payments payable 72538903.11 76929509.38
Less: Unrecognised financing expenses 18643391.69 18726744.34
Subtotal 53895511.42 58202765.04
Less: Lease liabilities due within one year 4606717.58 4606717.58
Total 49288793.84 53596047.46
88 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
35. Long-term payables
Unit: RMB
Item Closing balance Opening balance
Long-term payables 2840065362.58 3160771126.31
Total 2840065362.58 3160771126.31
(1) By nature
Unit: RMB
Item Closing balance Opening balance
Financial leasing 4785829789.29 4928891190.81
China Development Bank Special Fund 343750000.00 412500000.00
Contributions by other partners 211530234.22 211530234.22
Retention for the financial leasing operations 6000000.00 6000000.00
Subtotal 5347110023.51 5558921425.03
Less: Long-term payables due within one year 2507044660.93 2398150298.72
Total 2840065362.58 3160771126.31
36. Deferred income
Unit: RMB
Increase during Decrease during
Item Opening balance the period the period Closing balance Reason
Government grants 1469230468.46 82410962.30 1386819506.16 Financial provision
Total 1469230468.46 82410962.30 1386819506.16
SHANDONG CHENMING PAPER HOLDINGS LIMITED 89
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
36. Deferred income (Cont’d)
Items in respect of government grants:
Unit: RMB
New grants Include in
Opening during the other income Other Closing Asset-related/
Liability item balance period for the period changes balance income-related
Funding for environmental protection 576455283.80 26522207.20 549933076.60 Asset-related government
grants
Huanggang forestry-pulp-paper project 470994523.05 12513108.90 458481414.15 Asset-related government
grants
Infrastructure and environmental protection 208320966.69 5758794.72 202562171.97 Asset-related government
engineering grants
Financial subsidies for technological 132614525.64 34821957.48 97792568.16 Asset-related government
transformation project grants
Zhanjiang forestry-pulp-paper project 46711964.27 2047316.46 44664647.81 Asset-related government
grants
Project fund for National Key Technology 958425.00 82350.00 876075.00 Asset-related government
Research and Development Program grants
Others 33174780.01 665227.54 32509552.47 Asset-related government
grants
Total 1469230468.46 82410962.30 1386819506.16
37. Share capital
Unit: RMB
Increase/decrease during the year (+/-)
Shares
converted from
Opening balance New issue Bonus issue reserves Others Subtotal Closing balance
Total number of shares 2979742200.00 2979742200.00
38. Other equity instruments
(1) Perpetual Bonds outstanding at the end of the period
Unit: RMB
Maturity date
Outstanding financial Year of Accounting Dividend or or renewal Condition for
instruments issuance classification interest rate Issue price Issue size Amount status conversion Conversion
17 Lu Chenming MTN001 2017 Equity 8.97% 100.00 10000000.00 1000000000.00 No defined Nil Non-convertible
instrument maturity date
Total 10000000.00 1000000000.00
90 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
38. Other equity instruments (Continued)
(2) Changes in Perpetual Bonds outstanding at the end of the period
Unit: RMB
Beginning of the period Increase during the period Decrease during the period End of the period
Outstanding financial Carrying Carrying Carrying Carrying
instruments Number amount Number amount Number amount Number amount
17 Lu Chenming MTN001 10000000.00 996000000.00 10000000.00 996000000.00
Total 10000000.00 996000000.00 10000000.00 996000000.00
Changes (increase or decrease) in other equity instruments during the period the reasons for such changes and
the basis for relevant accounting treatment:
The Company issued medium-term notes amounting to RMB1000 million on 12 July 2017 at a coupon rate of
6.80%. The proceeds net of issue costs amounted to RMB996.00 million.
The notes are debts without a defined maturity date and will continue indefinitely until the exercise of the right
of redemption by the Company. The interest rate of the bills is determined by the basic interest rate + the initial
interest rate + 300BP. It has the feature of capped interest rates and the capped interest rate does not exceed the
average interest rate level of the same type of instruments in the same industry in the same period; The Company
has the right to defer any payment of interest. The right of redemption of the notes is vested in the Company so
that it is up to the Company to decide whether to redeem or not; the priority of repayment of the principal and
interest of medium-term notes for the period is the same as other outstanding debt financing instruments of the
issuers in the event of winding up because there is low probability of bankruptcy that the Company will not be
liable for contractual obligations to deliver cash or other financial assets expected.Based on the above the notes do not contain any term giving rise to any contractual obligation to deliver cash
or other financial assets to any other entity or to exchange any financial asset or financial liability with any other
entity under potential adverse circumstances. Consequently they are eligible to be recognised and accounted for
as equity instruments and included under other equity – Perpetual Bonds.
39. Capital reserves
Unit: RMB
Increase during Decrease during
Item Opening balance the period the period Closing balance
Capital premium (share premium) 4604712413.16 4604712413.16
Other capital reserves 756488109.13 27467521.92 729020587.21
Total 5361200522.29 27467521.92 5333733000.37
Other explanations including changes (increase or decrease) during the period and reasons for such changes:
Based on the performance in the first half of 2023 the management of the Company estimated that the performance
indicators for 2023 cannot be fulfilled and the corresponding third batch of the 30% Restricted Shares cannot be
unlocked. Accordingly the capital reserve of RMB27467521.92 recognised in previous years was written off according
to the cancellation treatment.SHANDONG CHENMING PAPER HOLDINGS LIMITED 91
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
40. Treasury shares
Unit: RMB
Increase during Decrease during
Item Opening balance the period the period Closing balance
Share incentive 128780100.00 128780100.00
Total 128780100.00 128780100.00
41. Other comprehensive income
Unit: RMB
During the period
Less: Less:
Transferred Transferred
from other from other
comprehensive comprehensive
income in prior income in prior
Incurred periods to periods to Attributable to Attributable
before income profit or loss retained parent to minority
tax for during earnings during Less: Income company shareholders
Item Opening balance the period the period the period tax expenses after tax after tax Closing balance
I. Other comprehensive income that cannot be
reclassified to profit or loss in subsequent periods
II. Other comprehensive income that will be reclassified
to profit and loss in subsequent periods -821940694.57 -85733908.54 -907674603.11
Of which: O ther comprehensive income that may be
reclassified to profit or loss under the
equity method -9916102.69 2605105.12 -7310997.57
T ranslation differences of financial statements
denominated in foreign currency -812024591.88 -88339013.66 -900363605.54
Total other comprehensive income -821940694.57 -85733908.54 -907674603.11
42. General risk reserves
Unit: RMB
Increase during Decrease during
Item Opening balance the period the period Closing balance
General risk reserves 79900268.71 79900268.71
Total 79900268.71 79900268.71
43. Special reserves
Unit: RMB
Increase during Decrease during
Item Opening balance the period the period Closing balance
Production safety expenses 15791710.95 13373517.00 9250493.46 19914734.49
Total 15791710.95 13373517.00 9250493.46 19914734.49
92 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
44. Surplus reserves
Unit: RMB
Increase during Decrease during
Item Opening balance the period the period Closing balance
Statutory surplus reserves 1212009109.97 1212009109.97
Total 1212009109.97 1212009109.97
45. Retained profit
Unit: RMB
Item The period The prior period
Retained profit as at the end of the prior year before adjustment 9390642477.57 9294126706.86
Adjustment to opening balance of retained earnings (increase + decrease -)
Opening balance of retained profit after adjustment 9390642477.57 9294126706.86
Plus: Net profit for the period attributable to shareholders of the parent
company -688080164.10 189290120.82
Less: Transfer of statutory surplus reserves
Transfer of discretionary surplus reserves
Transfer of general risk reserves 3074350.11
Perpetual Bonds interest payable 89700000.00
Retained profit as at the end of the period 8702562313.47 9390642477.57
46. Revenue and operating costs
Unit: RMB
Amount for the period Amount for the prior period
Item Revenue Costs Revenue Costs
Principal activities 12420935712.78 11377205194.89 16170535559.24 13692044445.11
Other activities 144027068.53 119526467.69 505892806.59 432503804.40
Total 12564962781.31 11496731662.58 16676428365.83 14124548249.51
SHANDONG CHENMING PAPER HOLDINGS LIMITED 93
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
46. Revenue and operating costs (Cont’d)
Information related to revenue:
Unit: RMB
Machine-made Hotel and
Category of contract paper Financial services property rentals Others Total
Type of goods 12065096786.14 90836358.97 118740344.32 290289291.88 12564962781.31
Including:
Machine-made paper 11300765054.86 11300765054.86
Chemical pulp 240438232.65 240438232.65
Processing of moulds 100217749.88 100217749.88
Electricity and steam 120561393.77 120561393.77
Construction materials 106371211.95 106371211.95
Paper chemicals 60607594.98 60607594.98
Hotel and property rentals 109744705.55 109744705.55
Others 342724509.88 90836358.97 8995638.77 83700330.05 526256837.67
By geographical area 12065096786.14 90836358.97 118740344.32 290289291.88 12564962781.31
Including:
Mainland China 8691224985.35 90836358.97 118740344.32 290289291.88 9191090980.52
Other countries and regions 3373871800.79 3373871800.79
By the timing of delivery 12065096786.14 90836358.97 118740344.32 290289291.88 12564962781.31
Including:
Goods (at a point in time) 11932557803.64 6317579.78 290105088.62 12228980472.04
Services (within a certain period) 120561393.77 90836358.97 107856141.55 319253894.29
Leasing income 11977588.73 4566622.99 184203.26 16728414.98
Information related to the transaction price allocated to residual performance obligations:
At the end of the reporting period the amount of revenue with signed contracts but unfulfilled or uncompleted
performance obligation was RMB2 675475342.05 which was expected to be recognised in 2023.
94 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
47. Taxes and surcharges
Unit: RMB
Amount for Amount for
Item the period the prior period
Property tax 43867342.48 41715466.80
Stamp duty 20624364.19 24637949.80
Land use tax 17689934.66 4547575.80
Water resource tax 7866553.80 5678351.10
Environmental protection tax 6474664.23 6793722.79
Urban maintenance and construction tax 5065031.72 17218814.49
Educational surcharges and local education surcharge 3832275.95 11612306.79
Water conservation funds 375223.40 350123.53
Vehicle and vessel tax 22420.06 1998845.57
Cultural undertaking development tax 1528301.88
Land appreciation tax 27432.00
Total 105817810.49 116108890.55
48. Selling and distribution expenses
Unit: RMB
Amount for Amount for
Item the period the prior period
Wages and surcharges 50366970.26 72692606.41
Business hospitality expenses 23235804.11 22786567.81
Travel expenses 12003217.19 8535839.64
Selling commissions 3387483.92 6883405.06
Rental expenses 3238179.10 2478458.25
Depreciation expenses 2820127.76 5541590.42
Office expenses 1137272.19 1108123.52
Warehouse expenses 429220.85 503789.82
Others 10048442.16 17525382.72
Total 106666717.54 138055763.65
SHANDONG CHENMING PAPER HOLDINGS LIMITED 95
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
49. General and administrative expenses
Unit: RMB
Amount for Amount for
Item the period the prior period
Wages and surcharges 118217373.00 113861878.26
Depreciation expenses 44973785.82 47710740.44
Hospitality expenses 44140876.01 38886989.85
Welfare expenses 31454087.17 35507840.57
Amortisation of intangible assets 23286773.73 25828580.24
Insurance premium 9440871.93 9449472.17
Repair fees 9337357.64 9615210.77
Others 47445099.56 72306683.24
Total 328296224.86 353167395.54
50. R&D expenses
Unit: RMB
Amount for Amount for
Item the period the prior period
Consumption of raw materials 366319485.67 453243553.84
Utilities 75235547.39 105357973.18
Wages and surcharges 66209728.31 76633329.10
Depreciation expenses 23682873.40 23781607.53
Insurance premium 13868772.48 15220882.81
Welfare expenses 3443387.62 4712671.38
Housing provident funds 2384161.81 2698047.92
Other expenses 1660871.90 1866495.17
Total 552804828.58 683514560.93
51. Finance expenses
Unit: RMB
Amount for Amount for
Item the period the prior period
Interest expenses 856872614.18 991475816.56
Less: capitalised interest amount
Interest income 94532686.92 150582370.85
Foreign exchange gains and losses -34863785.35 -21746160.65
Less: Capitalisation of foreign exchange gains and losses
Bank charges and others 122050778.14 201887319.60
Total 849526920.05 1021034604.66
96 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
52. Other income
Unit: RMB
Amount for Amount for
Source of other income the period the prior period
Government grants – amortised deferred income included in profit or loss 82410962.30 52355943.37
Government grants – directly included in profit or loss 25744734.89 96908668.31
Total 108155697.19 149264611.68
53. Investment income
Unit: RMB
Amount for Amount for
Item the period the prior period
Income from long-term equity investments accounted for using
the equity method 23934269.81 26616556.58
Investment gain on disposal of long-term equity investments 6812.52
Investment income on holding financial assets held for trading and
other non-current financial assets 630212.77 6301220.33
Investment gain on derecognition of financial assets -67175214.10 -56307959.46
Gain on debt restructuring -145995.36 -754806.87
Total -42756726.88 -24138176.90
54. Gain on change in fair value
Unit: RMB
Amount for Amount for
Source of gain on change in fair value the period the prior period
Financial assets held for trading -25565577.25 -62122863.58
Gain on change in fair value of consumable biological assets measured
at fair value 5749779.42 3309448.09
Total -19815797.83 -58813415.49
55. Credit impairment loss
Unit: RMB
Amount for Amount for
Item the period the prior period
Bad debt loss of accounts receivable -43081750.88 -25363341.17
Total -43081750.88 -25363341.17
SHANDONG CHENMING PAPER HOLDINGS LIMITED 97
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
56. Loss on impairment of assets
Unit: RMB
Amount for Amount for
Item the period the prior period
Loss on inventory impairment and loss on impairment of costs of
contract performance -43314485.76 1936644.09
Total -43314485.76 1936644.09
57. Asset disposal income
Unit: RMB
Amount for Amount for
Source of asset disposal income the period the prior period
Gain on disposal of fixed assets (“-” denotes loss) 11759266.91 1605314.49
Total 11759266.91 1605314.49
58. Non-operating income
Unit: RMB
Amount included in
extraordinary gains
Amount for Amount for or losses for
Item the period the prior period the period
Gain on damage and retirement of non-current
assets 433184.77 23874.29 433184.77
Fine income 323305.00 215595.32 318305.00
Exempted debts 12888.00 11345.80 12888.00
Others 171427.53 842613.92 176427.53
Total 940805.30 1093429.33 940805.30
59. Non-operating expenses
Unit: RMB
Amount included in
extraordinary gains
Amount for Amount for or losses for
Item the period the prior period the period
Loss on damage and retirement of non-current
assets 3074424.63 5557464.33 3074424.63
Default penalty 4626610.27
Donation 5000.00
Others 63765.43 13665.00 63765.43
Total 3138190.06 10202739.60 3138190.06
98 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
60. Income tax expenses
(1) Particulars of income tax expenses
Unit: RMB
Amount for Amount for
Item the period the prior period
Income tax expenses for the period 22508021.82 51225155.03
Deferred income tax expenses -233999203.96 -49846428.34
Total -211491182.14 1378726.69
(2) Reconciliation between accounting profit and income tax expenses
Unit: RMB
Amount for
Item the period
Total profit -906132564.80
Income tax expenses calculated at statutory/applicable tax rates -135919884.72
Effect of different tax rates applicable to subsidiaries 27248703.09
Effect of adjustments for income tax for prior periods 9207371.67
Profit and loss of joint ventures and associates accounted for using the equity method -3590140.47
Effect of income not subject to tax -4055086.68
Non-deductible costs expenses and losses 7486299.55
Effect of utilisation of previously unrecognised deductible loss on deferred income
tax assets -44216260.65
Effect of current unrecognised deductible temporary difference or deductible loss
arising from deferred tax income assets 23986101.00
Tax effect of R&D fee deduction (listed with“-”) -79940345.85
Tax incentives such as equipment credits -11697939.08
Income tax expense -211491182.14
61. Items on statements of cash flow
(1) Cash received relating to other operating activities
Unit: RMB
Amount for Amount for
Item the period the prior period
Net proceedings from the financial leasing business 638037439.53 125816344.91
Interest income 96517182.23 147503480.13
Government support fund 16978364.27 94023387.98
Open credit and other income 128779296.53 466613154.78
Total 880312282.56 833956367.80
SHANDONG CHENMING PAPER HOLDINGS LIMITED 99
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
61. Items on statements of cash flow (Cont’d)
(2) Cash paid relating to other operating activities
Unit: RMB
Amount for Amount for
Item the period the prior period
Expenses and open credit 802664900.20 998576421.97
Total 802664900.20 998576421.97
(3) Cash received relating to other financing activities
Unit: RMB
Amount for Amount for
Item the period the prior period
Equipment sale and leaseback 1122264589.15 2068410644.82
Recovery of deposit for financial leasing 6000000.00 10500000.00
Total 1128264589.15 2078910644.82
(4) Cash paid relating to other financing activities
Unit: RMB
Amount for Amount for
Item the period the prior period
Repayment of equipment sale and leaseback 1376861062.23 961427794.77
Repayment of bonds 350000000.00 1078685100.00
Increase of restricted bank deposits 97308709.84 992161166.63
Payment for equity in China Development Bank funds 68750000.00 27500000.00
Payment for finance lease deposits 49250000.00 51000000.00
Purchase or repayment of short-term commercial paper and MTNs 200000000.00
Total 1942169772.07 3310774061.40
100 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
62. Supplementary information on cash flow statement
(1) Supplementary information on cash flow statement
Unit: RMB
Amount for Amount for
Supplementary information the period the prior period
1. Reconciliation of net profit as cash flows from operating activities:
Net profit -694641382.66 274002500.73
Plus: Provision for impairment of assets 86396236.64 23426697.08
Depreciation of fixed assets depletion of oil and gas
assets and depreciation of bearer biological assets and
investment property 1128930791.82 1138180403.64
Depreciation of right-of-use assets 3572130.01 3916179.79
Amortisation of intangible assets 26601501.33 28127606.73
Amortisation of long-term prepaid expenses 2970626.13 2055896.23
Loss on disposal of fixed assets intangible assets and
other long-term assets (“-” denotes gain) -11759266.91 -1605314.49
Loss on retirement of fixed assets (“-” denotes gain) 2641239.86 5533590.04
Loss on changes in fair value (“-” denotes gain) 19815797.83 58813415.49
Finance expenses (“-” denotes gain) 856872614.18 991475816.56
Investment loss (“-” denotes gain) 42756726.88 24138176.90
Decrease in deferred income tax assets
(“-” denotes increase) -226570060.35 -49397297.55
Increase in deferred income tax liabilities
(“-” denotes decrease) 5466650.50 -449130.79
Decrease in inventories (“-” denotes increase) 35683655.24 -105936523.16
Decrease in operating receivables (“-” denotes increase) 643109345.71 -1497590484.79
Increase in operating payables (“-” denotes decrease) -138758858.62 103572677.04
Others
Net cash flows from operating activities 1783087747.59 998264209.45
2. Major investing and financing activities not involving cash
settlements:
Capital converted from debts
Convertible corporate bonds due within one year
Finance leases of fixed assets
3. Net change in cash and cash equivalents:
Closing balance of cash 1842769494.26 3142606091.96
Less: Opening balance of cash 2159460149.51 3168915847.02
Plus: Closing balance of cash equivalents
Less: Opening balance of cash equivalents
Net increase in cash and cash equivalents -316690655.25 -26309755.06
SHANDONG CHENMING PAPER HOLDINGS LIMITED 101
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
62. Supplementary information on cash flow statement (Cont’d)
(2) Net cash of acquisition subsidiaries paid in current period
Unit: RMB
Amount
Cash or cash equivalents paid in the current period for business combinations that
occurred during the period 5400000.00
Of which:
Less: Cash and cash equivalents held by the subsidiary on the acquisition date 465248.97
Of which:
Plus: Cash or cash equivalents paid in the current period for business combinations that
occurred during previous periods
Of which:
Net cash paid for acquisition of subsidiaries 4934751.03
(3) Cash and cash equivalents composition
Unit: RMB
Item Closing balance Opening balance
I. Cash 1842769494.26 2159460149.51
Of which: Treasury cash 3577158.84 3491219.08
Bank deposit that can be used for payment at any time 1839192335.42 2155968930.43
II. Cash equivalents
Of which: Bond investment with maturity within 3 months
III. Balance of cash and cash equivalent at end of period 1842769494.26 2159460149.51
63. Assets with restricted ownerships or right to use
Unit: RMB
Closing
Item carrying amount Reasons for such restriction
Monetary funds 11912761370.57 As deposits for bank acceptance bills and letters of credit
security deposits for loans deposit reserves interest
receivable etc. (Note VII. 1)
Fixed assets 5380577035.38 As collateral for bank borrowings and long-term payables
(Note VII. 14)
Investment property 4754893839.15 As collateral for bank borrowings (Note VII. 13)
Intangible assets 550003479.41 As collateral for bank borrowings and long-term payables
(Note VII. 18)
Accounts receivable 188497651.34 As collateral for borrowings (Note VII. 3)
Total 22786733375.85
102 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
64. Foreign currency items
(1) Foreign currency items
Unit: RMB
Closing foreign Closing balance
Item currency balance Exchange rate in RMB
Monetary funds
Of which: USD 50971917.74 7.2258 368312883.21
EUR 2777106.44 7.8771 21875545.14
HKD 1026323.52 0.9220 946270.29
GBP 1648.02 9.1432 15068.18
JPY 1197.00 0.0501 59.97
Accounts receivables
Of which: USD 18584628.34 7.2258 134288807.46
EUR 8855976.60 7.8771 69759413.28
JPY 146734998.00 0.0501 7351423.40
Accounts payable
Of which: USD 95242773.80 7.2258 688205234.92
EUR 1196397.65 7.8771 9424143.93
JPY 187909.00 0.0501 9414.24
Other receivables
Of which: USD 8727.39 7.2258 63062.37
EUR 69241.34 7.8771 545420.96
Other payables
Of which: USD 1377668.71 7.2258 9954758.56
EUR 1488642.25 7.8771 11726183.87
JPY 8800.00 0.0501 440.88
Short-term borrowings
Of which: USD 12697585.99 7.2258 91750216.85
EUR 382900.00 7.8771 3016141.59
(2) Explanation on overseas operating entities (including major overseas operating entities) which shall disclose
their overseas principal places of business functional currency and basis. Reasons shall be disclosed if there
is any change in the functional currency.√ Applicable □ Not applicable
Principal place of Place of Functional
No. Name of subsidiary business incorporation currency
1 Chenming GmbH Hamburg Germany Hamburg Germany EUR
2 Chenming Paper Korea Co. Ltd. Seoul Korea Seoul Korea KRW
3 Chenming International Co. Ltd. Los Angeles USA Los Angeles USA USD
4 Chenming Paper Japan Co. Ltd. Tokyo Japan Tokyo Japan JPY
5 Chenming Paper United States Co. Ltd. Los Angeles USA Los Angeles USA USD
6 Chenming (Overseas) Limited Hong Kong China Hong Kong China USD
7 Chenming (Singapore) Limited Singapore Singapore USD
8 Chenming (HK) Limited Hong Kong China Hong Kong China USD
SHANDONG CHENMING PAPER HOLDINGS LIMITED 103
INTERIM REPORT 2023I Financial Report
VII. Notes to Items of the Consolidated Financial Statements (Cont’d)
65. Government grants
(1) General information of government grants
Unit: RMB
Amount included in
the current profit
Type Amount Reporting item and loss
Funding for environmental protection 549933076.60 Deferred income 26522207.20
Huanggang forestry-pulp-paper project 458481414.15 Deferred income 12513108.90
Infrastructure and environmental protection
engineering 202562171.97 Deferred income 5758794.72
Financial subsidies for technological
transformation project 97792568.16 Deferred income 34821957.48
Zhanjiang forestry-pulp-paper project 44664647.81 Deferred income 2047316.46
Project Funding for National Key Technology
Research and Development Program 876075.00 Deferred income 82350.00
Others 32509552.47 Deferred income 665227.54
Subsidies for foreign trade projects 10833800.00 Other income 10833800.00
Government rewards 7220880.00 Other income 7220880.00
Immediate VAT refund 3186241.18 Other income 3186241.18
Refund of tax 2877613.59 Other income 2877613.59
Enterprise reform and development subsidies 612000.00 Other income 612000.00
Afforestation subsidy 459000.12 Other income 459000.12
Financial subsidies for technological
transformation project 370000.00 Other income 370000.00
Funding for environmental protection 72000.00 Other income 72000.00
Employment expansion subsidies 52000.00 Other income 52000.00
Employment stabilisation subsidies 9500.00 Other income 9500.00
Others 51700.00 Other income 51700.00
Total 1412564241.05 108155697.19
104 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
VIII. Change in Scope of Consolidation
1. Business combination not under common control
(1) Business combination not under common control during the current period
Unit: RMB
The income of The net profit
acquiree from of acquiree
The basis for the date of from the date
Date of Consideration The way of determining acquisition to of acquisition
acquiring the for acquiring Shareholding acquiring the Acquisition the date of the end of the to the end of
Acquiree shareholding the shareholding ratio acquired shareholding date acquisition period the period
Jiangxi Chenming Port Co. Ltd. 2023.3.31 5400000.00 100.00% Acquisition 2023.3.31 Control 2501184.09 899011.43
(2) Cost of combination and goodwill
Unit: RMB
Jiangxi Chenming
Cost of combination Port Co. Ltd.– Cash 5400000.00
– Fair value of non-cash assets
– Fair value of debt issued or assumed
– Fair value of equity securities issued
– Fair value of contingent consideration
– Fair value of the equity held before the acquisition date on the acquisition date
– Others
Total cost of combination 5400000.00
Less: the interest in the fair value of the identifiable net assets acquired -2873638.42
Amount of goodwill/cost of combination being less than the interest in the fair
value of the identifiable net assets acquired 8273638.42
SHANDONG CHENMING PAPER HOLDINGS LIMITED 105
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VIII. Change in Scope of Consolidation (Cont’d)
1. Business combination not under common control (Cont’d)
(3) Acquiree’s identifiable assets or liabilities as at the acquisition date
Unit: RMB
Jiangxi Chenming Port Co. Ltd.Fair value as at Carrying amount as at
the acquisition date the acquisition date
Assets: 183176943.51 85831727.82
Monetary funds 465248.97 465248.97
Accounts receivable 3537419.24 3537419.24
Long-term equity investment 59345429.05 2450000.00
Fixed assets 111076981.66 74175345.69
Intangible assets 8486760.00 4938609.33
Liabilities: 186050581.93 186050581.93
Borrowings
Accounts payable 179009234.83 179009234.83
Deferred income tax liabilities 6067468.00 6067468.00
Net assets -2873638.42 -100218854.11
Less: minority interest
Net assets acquired -2873638.42 -100218854.11
IX. Interest in Other Entities
1. Interest in subsidiaries
(1) Constitution of the Group
Principle place Place of Nature of Type of legal Shareholding Issued debt Issued share
Name of subsidiary of business incorporation business person Direct Indirect Acquisition securities capital
Shouguang Meilun Paper Co. Ltd. Shouguang Shouguang Paper making For-profit corporation 62.49% Establishment 0 0
Shouguang Meichen Energy Shouguang Shouguang Electricity For-profit corporation 100% Establishment 0 0
Technology Co. Ltd.Shouguang Chenming Art Paper Shouguang Shouguang Paper making For-profit corporation 75% Establishment 0 0
Co. Ltd.Shandong Chenming Paper Sales Shouguang Shouguang Sales of paper For-profit corporation 100% Establishment 0 0
Co. Ltd. product
Shanghai Chenming Pulp & Paper Shanghai Shanghai Paper product For-profit corporation 100% Establishment 0 0
Sales Co. Ltd. trading
Shouguang Chenming Import and Shouguang Shouguang Trading For-profit corporation 100% Establishment 0 0
Export Trade Co. Ltd.Jiangxi Chenming Supply Chain Jiangxi Jiangxi Trading For-profit corporation 70% Establishment 0 0
Management Co. Ltd.Zhanjiang Chenming Pulp & Paper Zhanjiang Zhanjiang Paper making For-profit corporation 82.67% Establishment 0 0
Co. Ltd.Zhanjiang Chenming Arboriculture Zhanjiang Zhanjiang Arboriculture For-profit corporation 100% Establishment 0 0
Development Co. Ltd.
106 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
IX. Interest in other entities (Cont’d)
1. Interest in subsidiaries (Cont’d)
(1) Constitution of the Group (Cont’d)
Principle place Place of Nature of Type of legal Shareholding Issued debt Issued share
Name of subsidiary of business incorporation business person Direct Indirect Acquisition securities capital
Yangjiang Chenming Arboriculture Yangjiang Yangjiang Arboriculture For-profit corporation 100% Establishment 0 0
Development Co. Ltd.Guangdong Huirui Investment Co. Zhanjiang Zhanjiang Investment For-profit corporation 100% Establishment 0 0
Ltd.Hubei Changjiang Chenming Huanggang Huanggang Fund For-profit corporation 59.97% Establishment 0 0
Huanggang Equity Investment
Fund Partnership (Limited
Partnership)
Hainan Chenming Technology Co. Haikou Haikou Wholesale and retail For-profit corporation 100% Establishment 0 0
Ltd.Foshan Chenming Import and Foshan Foshan Trading For-profit corporation 100% Establishment 0 0
Export Trade Co. Ltd.Shanghai Herui Investment Co. Ltd. Shanghai Shanghai Business services For-profit corporation 100% Merger and 0 0
acquisition
Zhanjiang Chenming Port Co. Ltd. Zhanjiang Zhanjiang Port services For-profit corporation 100% Establishment 0 0
Zhanjiang Meilun Pulp & Paper Co. Zhanjiang Zhanjiang Paper making For-profit corporation 100% Establishment 0 0
Ltd.Guangdong Chenming Panels Co. Guangdong Guangdong Panels For-profit corporation 100% Establishment 0 0
Ltd.Jiangxi Chenming Tea Co. Ltd. Jiangxi Jiangxi Tea business For-profit corporation 100% Establishment 0 0
Jiangxi Chenming Paper Co. Ltd. Nanchang Nanchang Paper making For-profit corporation 100% Establishment 0 0
Jiangxi Chenming Logistics Co. Ltd. Nanchang Nanchang Logistics For-profit corporation 100% Establishment 0 0
Nanchang Shengheng Trading Co. Nanchang Nanchang Trading For-profit corporation 100% Establishment 0 0
Ltd.Nanchang Kunheng Trading Co. Nanchang Nanchang Trading For-profit corporation 100% Establishment 0 0
Ltd.Nanchang Chenming Arboriculture Nanchang Nanchang Arboriculture For-profit corporation 100% Establishment 0 0
Development Co. Ltd.Jiangxi Chenming Port Co. Ltd. Jiangxi Jiangxi Cargo transportation For-profit corporation 100% Acquisition 0 0
Wuhan Chenming Hanyang Paper Wuhan Wuhan Paper making For-profit corporation 65.21% 34.64% Establishment 0 0
Holdings Co. Ltd.Wuhan Chenming Qianneng Electric Wuhan Wuhan Thermal power For-profit corporation 51% Establishment 0 0
Power Co. Ltd.Shandong Dingkun Asset Shouguang Shouguang Business services For-profit corporation 100% Establishment 0 0
Management Partnership (Limited
Partnership)
Jilin Chenming Paper Co. Ltd. Jilin Jilin Paper making For-profit corporation 100% Acquisition 0 0
Fuyu Chenming Paper Co. Ltd. Fuyu Fuyu Paper making For-profit corporation 100% Establishment 0 0
Jilin Chenming New-style Wall Jilin Jilin Wall materials For-profit corporation 100% Establishment 0 0
Materials Co. Ltd
Jilin Chenming Logistics Co. Ltd. Jilin Jilin Logistics For-profit corporation 100% Establishment 0 0
Huanggang Chenming Pulp & Paper Huanggang Huanggang Pulp production For-profit corporation 70.15% 29.85% Establishment 0 0
Co. Ltd.Huanggang Chenming Paper Huanggang Huanggang Paper making For-profit corporation 100% Establishment 0 0
Technology Co. Ltd.Huanggang Chenming Port Service Huanggang Huanggang Port services For-profit corporation 100% Establishment 0 0
Co. Ltd.SHANDONG CHENMING PAPER HOLDINGS LIMITED 107
INTERIM REPORT 2023I Financial Report
IX. Interest in other entities (Cont’d)
1. Interest in subsidiaries (Cont’d)
(1) Constitution of the Group (Cont’d)
Principle place Place of Nature of Type of legal Shareholding Issued debt Issued share
Name of subsidiary of business incorporation business person Direct Indirect Acquisition securities capital
Huanggang Chenming Pulp & Fiber Huanggang Huanggang Trading For-profit corporation 100% Establishment 0 0
Trading Co. Ltd.Hubei Huanggang Chenming Equity Huanggang Huanggang Capital market For-profit corporation 60% Establishment 0 0
Investment Fund Management services
Co. Ltd.Shandong Chenming Group Finance Jinan Jinan Finance For-profit corporation 80% 20% Establishment 0 0
Co. Ltd.Chenming (HK) Limited Hong Kong Hong Kong Paper product For-profit corporation 100% Establishment 0 0
trading
Shandong Chenming Financial Jinan Jinan Financial leasing For-profit corporation 100% Establishment 0 0
Leasing Co. Ltd.Qingdao Chenming Nonghai Qingdao Qingdao Financial leasing For-profit corporation 100% Establishment 0 0
Financial Leasing Co. Ltd
Shanghai Chenming Financial Shanghai Shanghai Financial leasing For-profit corporation 100% Establishment 0 0
Leasing Co. Ltd.Wuhan Junheng Property Wuhan Wuhan Property For-profit corporation 100% Merger and 0 0
Management Co. Ltd. acquisition
Guangzhou Chenming Property Guangzhou Guangzhou Property For-profit corporation 100% Establishment 0 0
Management Co. Ltd.Shandong Chenming Investment Jinan Jinan Investment For-profit corporation 100% Establishment 0 0
Limited
Beijing Chenming Financial Leasing Beijing Beijing Financial leasing For-profit corporation 100% Establishment 0 0
Co. Ltd.Shanxi Fuyin Industrial Trading Co. Taiyuan Taiyuan Wholesale and retail For-profit corporation 100% Acquisition 0 0
Ltd.Chongmin Culture Development Shanghai Shanghai Leasing and business For-profit corporation 100% Acquisition 0 0
(Shanghai) Co. Ltd. services
Jinan Chenming Paper Sales Co. Jinan Jinan Investment For-profit corporation 100% Establishment 0 0
Ltd. management/
Paper product
trading
Shandong Chenming Commercial Jinan Jinan Business factoring For-profit corporation 100% Establishment 0 0
Factoring Co. Ltd.Guangzhou Chenming Commercial Guangzhou Guangzhou Business factoring For-profit corporation 51% Establishment 0 0
Factoring Co. Ltd.Chenming GmbH Germany Germany Paper product For-profit corporation 100% Establishment 0 0
trading
Chenming Paper Japan Co. Ltd. Japan Japan Paper product For-profit corporation 100% Establishment 0 0
trading
Chenming International Co. Ltd. the United States the United States Paper product For-profit corporation 100% Establishment 0 0
trading
Chenming Paper United States Co. the United States the United States Paper product For-profit corporation 100% Establishment 0 0
Ltd. trading
Chenming Paper Korea Co. Ltd. Korea Korea Paper product For-profit corporation 100% Establishment 0 0
trading
Chenming (Overseas) Limited Hong Kong Hong Kong Paper product For-profit corporation 100% Establishment 0 0
trading
Chenming (Singapore) Limited Singapore Singapore Paper product For-profit corporation 100% Establishment 0 0
trading
Meilun (BVI) Limited Cayman Cayman Commerce For-profit corporation 100% Establishment 0 0
Shanghai Chenming Industry Co. Shanghai Shanghai Property investment For-profit corporation 100% Establishment 0 0
Ltd. and management
Shanghai Chenyin Trading Co. Ltd. Shanghai Shanghai Trading For-profit corporation 51% Establishment 0 0
108 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
IX. Interest in other entities (Cont’d)
1. Interest in subsidiaries (Cont’d)
(1) Constitution of the Group (Cont’d)
Principle place Place of Nature of Type of legal Shareholding Issued debt Issued share
Name of subsidiary of business incorporation business person Direct Indirect Acquisition securities capital
Shanghai Hongtai Real Estate Co. Shanghai Shanghai Real estate For-profit corporation 100% Merger and 0 0
Ltd. acquisition
Shanghai Hongtai Property Shanghai Shanghai Property For-profit corporation 100% Merger and 0 0
Management Co. Ltd. acquisition
Shandong Grand View Hotel Co. Shouguang Shouguang Catering For-profit corporation 70% Establishment 0 0
Ltd.Shouguang Chenming Papermaking Shouguang Shouguang Machinery For-profit corporation 100% Establishment 0 0
Machine Co. Ltd. manufacturing
Shouguang Hongxiang Printing and Shouguang Shouguang Printing and For-profit corporation 100% Acquisition 0 0
Packaging Co. Ltd. packaging
Shouguang Chenming Modern Shouguang Shouguang Transportation For-profit corporation 100% Establishment 0 0
Logistic Co. Ltd.Shouguang Hongyi Decorative Shouguang Shouguang Packaging For-profit corporation 100% Merger and 0 0
Packaging Co. Ltd. acquisition
Kunshan Tuoan Plastic Products Kunshan Kunshan Rubber and plastic For-profit corporation 100% Merger and 0 0
Co. Ltd. acquisition
Shouguang Xinyuan Coal Co. Ltd. Shouguang Shouguang Coal For-profit corporation 100% Merger and 0 0
acquisition
Shouguang Wei Yuan Logistics Shouguang Shouguang Logistics For-profit corporation 100% Merger and 0 0
Company Limited acquisition
Shouguang City Run Sheng Wasted Shouguang Shouguang Purchase and sale of For-profit corporation 100% Merger and 0 0
Paper Recycle Co. Ltd. waste acquisition
Shouguang Shun Da Customs Shouguang Shouguang Customs declaration For-profit corporation 100% Establishment 0 0
Declaration Co Ltd.Huanggang Chenming Arboriculture Huanggang Huanggang Arboriculture For-profit corporation 100% Establishment 0 0
Development Co. Ltd.Chenming Arboriculture Co. Ltd. Wuhan Wuhan Arboriculture For-profit corporation 100% Establishment 0 0
Hailaer Chenming Paper Co. Ltd. Hailaer Hailaer Paper making For-profit corporation 75% Establishment 0 0
Weifang Chenming Growth Driver Weifang Weifang Fund For-profit corporation 79% Establishment 0 0
Replacement Equity Investment
Fund Partnership (Limited
Partnership)
Weifang Chendu Equity Investment Shouguang Shouguang Capital market For-profit corporation 79.75% Establishment 0 0
Partnership (Limited Partnership) services
Nanjing Chenming Culture Nanjing Nanjing Marketing For-profit corporation 100% Establishment 0 0
Communication Co. Ltd.
(2) Major non-wholly owned subsidiaries
Unit: RMB
Gain or loss Dividend to
attributable to minority interest Closing
Minority minority interest declared during balance of
Name of subsidiary interest during the period the period minority interest
Shouguang Chenming Art Paper Co. Ltd. 25.00% 396368.16 98249523.36
Shouguang Meilun Paper Co. Ltd. 37.51% 12619413.24 9419178.08 2499723544.78
Zhanjiang Chenming Pulp & Paper Co. Ltd. 17.33% -17281674.12 1496781680.24
SHANDONG CHENMING PAPER HOLDINGS LIMITED 109
INTERIM REPORT 2023I Financial Report
110 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023
IX. Interest in Other Entities (Cont’d)
1. Interest in subsidiaries (Cont’d)
(3) Key financial information of major non-wholly owned subsidiaries
Unit: RMB
Closing balance Opening balance
Non-current Non-current Non-current Non-current
Name of subsidiary Current assets assets Total assets Current liabilities liabilities Total liabilities Current assets assets Total assets Current liabilities liabilities Total liabilities
Shouguang Chenming
Art Paper Co. Ltd. 758835938.53 439827453.86 1198663392.39 800665298.98 5000000.00 805665298.98 592821595.68 455020296.41 1047841892.09 656429271.34 656429271.34
Shouguang Meilun
Paper Co. Ltd. 7406998021.31 10248738927.89 17655736949.20 7928361439.11 1210968284.36 9139329723.47 5271560197.74 10517781981.22 15789342178.96 5706873517.18 1592276073.16 7299149590.34
Zhanjiang Chenming
Pulp & Paper Co.Ltd. 13311726510.58 13133443755.93 26445170266.51 15538216860.30 1736060722.95 17274277583.25 12177003083.15 13209726474.81 25386729557.96 14522121479.88 1696026289.09 16218147768.97
Unit: RMB
Amount for the period Amount for the prior period
Total Cash flows Total Cash flows
comprehensive from operating comprehensive from operating
Name of subsidiary Revenue Net profit income activities Revenue Net profit income activities
Shouguang Chenming Art Paper Co. Ltd. 307683134.58 1585472.66 1585472.66 98313422.22 322720534.36 -1342438.95 -1342438.95 133667925.23
Shouguang Meilun Paper Co. Ltd. 4453614876.18 33639568.69 33639568.69 883836062.48 3956822454.56 114261960.45 114261960.45 1167059642.56
Zhanjiang Chenming Pulp & Paper Co. Ltd. 5372507782.65 -40134946.90 -37529841.78 813258132.16 5841511419.81 181827121.84 181827121.84 1308835701.84I Financial Report
IX. Interest in Other Entities (Cont’d)
2. Interest in joint arrangements or associates
(1) Major joint ventures and associates
Accounting
method for
investment in
Principle place Place of Shareholding joint ventures
Name of joint venture and associate of business incorporation Nature of business Direct Indirect or associates
Weifang Port Wood Chip Terminal Co. Ltd. Weifang Weifang Port construction 50.00% Equity method
Shouguang Jintou Industrial Investment
Partnership (Limited Partnership) Shouguang Shouguang Investment 49.57% Equity method
Ningbo Kaichen Huamei Equity Investment
Fund Partnership (Limited Partnership) Ningbo Ningbo Investment management 40.00% Equity method
Zhuhai Dechen New Third Board Equity
Investment Fund Company (Limited
Partnership) Zhuhai Zhuhai Investment management 50.00% Equity method
Goldtrust Futures Co. Ltd. Changsha Changsha Futures 35.43% Equity method
Guangdong Nanyue Bank Co. Ltd. Guangdong Guangdong Banking 6.76% Equity method
(2) Key financial information of major joint ventures
Unit: RMB
Closing balance/ Opening balance/
amount for ‘amount for the
Weifang Port Wood Chip Terminal Co. Ltd. the period prior period
Current assets 13917909.50 27197876.06
Of which: Cash and cash equivalents 5343639.64 4280737.42
Non-current assets 480210142.19 489392605.54
Total assets 494128051.69 516590481.60
Current liabilities 29483896.67 24865100.48
Non-current liabilities 338050969.91 357300969.89
Total liabilities 367534866.58 382166070.37
Minority interest
Equity interest attributable to shareholders of the parent company 126593185.11 134424411.23
Share of net assets based on shareholding 63296592.56 67212205.62
Adjustments
– Goodwill
– Unrealised profit arising from intra-group transactions
– Others 7636365.12 7636365.12
Carrying amount of equity investment in joint ventures 70932957.67 74848570.73
Fair value of equity investment in joint ventures where publicly
quoted prices exist
Revenue 26129240.43 31433562.91
Finance expenses 9778624.54 10778949.56
Income tax expenses
Net profit -8041206.50 -6013863.17
Net profit from discontinued operations
Other comprehensive income
Total comprehensive income -8041206.50 -6013863.17
Dividends received from joint ventures during the year
SHANDONG CHENMING PAPER HOLDINGS LIMITED 111
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IX. Interest in Other Entities (Cont’d)
2. Interest in joint arrangements or associates (Cont’d)
(2) Key financial information of major joint ventures (Cont’d)
Closing balance/ Opening balance/
Shouguang Jintou Industrial Investment Partnership amount for amount for
(Limited Partnership) the period the prior period
Current assets 1366378092.22 1373114822.27
Of which: Cash and cash equivalents 98092.22 98300.08
Non-current assets 992000000.00 992000000.00
Total assets 2358378092.22 2365114822.27
Current liabilities 1000.00 1000.00
Non-current liabilities
Total liabilities 1000.00 1000.00
Minority interest
Equity interest attributable to shareholders of the parent company 2358377092.22 2365113822.27
Share of net assets based on shareholding 1169033374.35 1172372731.02
Adjustments
– Goodwill
– Unrealised profit arising from intra-group transactions
– Others 1190162160.01 1187625930.65
Carrying amount of equity investment in joint ventures 2359195534.36 2359998661.67
Fair value of equity investment in joint ventures where publicly
quoted prices exist
Revenue
Finance expenses 1620207.86
Income tax expenses
Net profit -1620207.86
Net profit from discontinued operations
Other comprehensive income
Total comprehensive income
Dividends received from joint ventures during the year
112 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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IX. Interest in Other Entities (Cont’d)
2. Interest in joint arrangements or associates (Cont’d)
(3) Key financial information of major associates
Unit: RMB
Closing balance/ Opening balance/
Ningbo Kaichen Huamei Equity Investment Fund Partnership amount for amount for
(Limited Partnership) the period the prior period
Current assets 4322919.99 4330644.90
Non-current assets 189276814.94 189276814.94
Total assets 193599734.93 193607459.84
Current liabilities 149740.00 149740.00
Non-current liabilities
Total liabilities 149740.00 149740.00
Minority interest
Equity interest attributable to shareholders of the parent company 193449994.93 193457719.84
Share of net assets based on shareholding 77376902.77 77379992.61
Adjustments
– Goodwill
– Unrealised profit arising from intra-group transactions
– Others 119838326.15 119838326.16
Carrying amount of equity investment in associates 197215228.92 197218318.77
Fair value of equity investment in associates where publicly
quoted prices exist
Revenue
Net profit -7724.91 -8044.64
Net profit from discontinued operations
Other comprehensive income
Total comprehensive income -7724.91 -8044.64
Dividends received from associates during the year
SHANDONG CHENMING PAPER HOLDINGS LIMITED 113
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IX. Interest in Other Entities (Cont’d)
2. Interest in joint arrangements or associates (Cont’d)
(3) Key financial information of major associates (Cont’d)
Closing balance/ Opening balance/
Zhuhai Dechen New Third Board Equity Investment Fund Company amount for amount for
(Limited Partnership) the period the prior period
Current assets 32423116.82 42352069.89
Non-current assets 31213708.00 31213708.00
Total assets 63636824.82 73565777.89
Current liabilities 5500.00 5000.00
Non-current liabilities
Total liabilities 5500.00 5000.00
Minority interest
Equity interest attributable to shareholders of the parent company 63631324.82 73560777.89
Share of net assets based on shareholding 31812480.84 36776710.91
Adjustments
– Goodwill
– Unrealised profit arising from intra-group transactions
– Others
Carrying amount of equity investment in associates 31812480.84 36776710.91
Fair value of equity investment in associates where publicly
quoted prices exist
Revenue
Net profit 71546.93 -4006504.95
Net profit from discontinued operations
Other comprehensive income
Total comprehensive income 71546.93 -4006504.95
Dividends received from associates during the year
114 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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IX. Interest in Other Entities (Cont’d)
2. Interest in joint arrangements or associates (Cont’d)
(3) Key financial information of major associates (Cont’d)
Closing balance/ Opening balance/
amount for amount for
Goldtrust Futures Co. Ltd. the period the prior period
Current assets 821662429.67 577035187.04
Non-current assets 480166319.83 297668426.77
Total assets 1301828749.50 874703613.81
Current liabilities 1082672661.98 665847237.87
Non-current liabilities 42878877.79 33761891.27
Total liabilities 1125551539.77 699609129.14
Minority interest
Equity interest attributable to shareholders of the parent company 176277209.73 175094484.67
Share of net assets based on shareholding 62455015.41 62035975.92
Adjustments
– Goodwill 104073292.25 104073292.25
– Unrealised profit arising from intra-group transactions
– Others 11683737.93 12279914.66
Carrying amount of equity investment in associates 178212045.59 178389182.83
Fair value of equity investment in associates where publicly
quoted prices exist
Revenue 29661817.38 27108619.25
Net profit -2222578.59 -7109291.31
Net profit from discontinued operations
Other comprehensive income
Total comprehensive income -2222578.59 -7109291.31
Dividends received from associates during the year
SHANDONG CHENMING PAPER HOLDINGS LIMITED 115
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IX. Interest in Other Entities (Cont’d)
2. Interest in joint arrangements or associates (Cont’d)
(3) Key financial information of major associates (Cont’d)
Closing balance/ Opening balance/
amount for amount for
Guangdong Nanyue Bank Co. Ltd. the period the prior period
Current assets 170787680642.25 153109778598.66
Non-current assets 82849851268.13 74753438649.12
Total assets 253637531910.38 227863217247.78
Current liabilities 207280787023.03 181929537932.08
Non-current liabilities 26578782100.09 26407317751.35
Total liabilities 233859569123.12 208336855683.43
Minority interest 65996100.75 65058817.68
Equity interest attributable to shareholders of the parent company 19711966686.51 19461302746.67
Share of net assets based on shareholding 1331543349.67 1314611000.54
Adjustments
– Goodwill
– Unrealised profit arising from intra-group transactions
– Others
Carrying amount of equity investment in associates 1331543349.67 1314611000.54
Fair value of equity investment in associates where publicly
quoted prices exist
Revenue 1048426151.95 1372177865.46
Net profit 222221106.76 365449485.74
Net profit from discontinued operations
Other comprehensive income 38565582.88 70787018.40
Total comprehensive income 260786689.64 436236504.14
Dividends received from associates during the year
(4) Summary financial information of non-major joint ventures and associates
Unit: RMB
Closing balance/ Opening balance/
amount for amount for
the period the prior period
Joint ventures:
Total carrying amount of investment 118270992.67 108688888.42
Total amount of the following items based on shareholding
– Net profit 10682104.25 -3056784.45
– Other comprehensive income
– Total comprehensive income 10682104.25 -3056784.45
Associates:
Total carrying amount of investment 67490180.52 6482035.69
Total amount of the following items based on shareholding
– Net profit 3788119.08 -168899.05
– Other comprehensive income
– Total comprehensive income 3788119.08 -168899.05
116 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X. Risk Relating to Financial Instruments
Main financial instruments of the Group include monetary funds accounts receivable accounts receivable financing other
receivables non-current assets due within one year other current assets long-term receivables bills payable accounts
payable other payables short-term borrowings non-current liabilities due within one year long-term borrowings bonds
payable lease liabilities and long-term payables. Details of financial instruments refer to related notes. The risks associated
with these financial instruments and the risk management policies adopted by the Company to mitigate these risks are
described below. The management of the Company manages and monitors these exposures to ensure that the above risks
are controlled in a limited extent.
1. Risk management goals and policies
The Company aims to seek the appropriate balance between the risks and benefits in order to mitigate the adverse
effects on the Company’s financial performance from financial risk. Based on such objectives the Company’s risk
management policies are established to identify and analyse the risks faced by the Company to set appropriate risk
limits and devise corresponding internal control procedures and to monitor risks faced by the Company. Such risk
management policies and internal control systems are reviewed regularly to adapt to changes in market conditions and
the Company’s activities. The internal audit department of the Company undertakes both regular and ad-hoc reviews of
risk management controls and procedures.Risks associated with the financial instrument of the Company mainly include credit risk liquidity risk market risk
(including exchange rate risk interest rate risk and commodity price risk).The board of directors is responsible to plan and establish the Company’s risk management structure make risk
management policies and related guidelines and supervise the implementation of risk management. The Company has
already made risk management risks to identify and analyse risks that the Company face. These policies mentioned
specific risks covering market credit risk and liquidity risk etc. The Company regularly assesses market environment
and the operation of the Company changes to determine if to make alteration to risk management policy and systems.The Company’s risk management is implemented by Risk Management Committee according to the approval of the
board of directors. The Risk Management Committee works closely with other business department of the Company to
identify evaluating and avoiding certain risks. The Company’s internal audit department will audit the risk management
control and procedures regularly and report the result to audit committee of the Company.The Company spreads risks through diverse investment and business lines and through making risk management
policy to reduce risks of single industry specific area and counterpart.
(1) Credit risk
Credit risk refers to risk associated with the default of contract obligation of a transaction counterparty resulting in
financial losses to the Company.The Company manages credit risk based category. Credit risks mainly arose from bank deposit bills receivable
accounts receivable other receivables and long-term receivables etc.The Company’s bank deposit mainly deposits in state-owned banks and other large and medium-sized listed
banks. The Company anticipated that the bank deposit does not have significant credit risk.SHANDONG CHENMING PAPER HOLDINGS LIMITED 117
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X. Risk Relating to Financial Instruments (Cont’d)
1. Risk management goals and policies (Cont’d)
(1) Credit risk (Cont’d)
For accounts receivables other receivables and long-term receivables the Company set related policies to control
exposure of credit risks. The Company evaluates client’s credit quality and set related credit period based on the
client’s financial status credit records and other factors such as current market situation etc. The Company keeps
monitor the client’s credit record and for client with deteriorate credit records the Company will ensure the credit
risk is under control in whole by means of written notice of payment collection shorten or cancel credit period.The Company’s debtor spread over different industry and area. The Company continued to assess the credit
evaluation to receivables and purchase credit guarantee insurance if necessary.The biggest credit risk exposure of the Company is the carrying amount of each financial asset in the balance
sheet. The Company did not provide financial guarantee which resulted in credit risks.The amount of top 5 accounts receivable of the Company accounted for 33.03% (2022: 30.43%) of the
Company’s total accounts receivables. The amount of top 5 other receivable of the Company accounted for
59.52% (2022: 64.05%) of the Company’s total other receivables.
(2) Liquidity risk
Liquidity risk refers to the risks that the Company will not be able to meet its obligations associated with its
financial liabilities that are settled by delivering cash or other financial assets.To manage the liquidity risk the Company monitors and maintains a level of cash and cash equivalents to finance
the Company’s operations and mitigate the effects of fluctuations in cash flows. The management of the Company
monitors the usage of bank borrowings and ensures compliance with the borrowing agreements. In the meantime
we obtain commitments from major financial institutions to provide sufficient standby funds to meet short-term
and long-term funding needs.Operating cash of the Company was generated from capital and bank and other borrowings. As at 30 June 2023
the Company’s unused bank loan credit was RMB43059.3568 million (31 December 2022: RMB42790.5456
million).
118 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X. Risk Relating to Financial Instruments (Cont’d)
1. Risk management goals and policies (Cont’d)
(2) Liquidity risk (Cont’d)
As at the end of the period the financial assets financial liabilities and off balance sheet guarantee held by the
Company are analysed by their maturity date as below at their remaining undiscounted contractual cash flows (in
RMB’0000):
Closing balance
Within 1 1 to 2 2 to 5 over 5
Item year years years years Total
Financial assets:
Monetary funds 1375553.09 1375553.09
Accounts receivable 341524.57 341524.57
Accounts receivable financing 61479.44 61479.44
Other receivables 211338.83 211338.83
Long-term receivables 30774.14 134798.60 165572.74
Other current assets 116088.65 116088.65
Non-current assets due within one year 395340.31 395340.31
Total financial assets 2501324.89 30774.14 134798.60 2666897.63
Financial liabilities:
Short-term borrowings 3494652.71 3494652.71
Bills payable 353080.38 353080.38
Accounts payable 397208.26 397208.26
Other payables 205933.46 205933.46
Non-current liabilities due within one year 435000.57 435000.57
Long-term borrowings 95041.95 258081.07 136431.61 489554.63
Lease liabilities 446.64 1418.27 4928.31 6793.22
Long-term payables 157089.70 94238.35 48653.02 299981.07
Total financial liabilities and contingent liabilities 4885875.38 252578.29 353737.69 190012.94 5682204.30
SHANDONG CHENMING PAPER HOLDINGS LIMITED 119
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X. Risk Relating to Financial Instruments (Cont’d)
1. Risk management goals and policies (Cont’d)
(2) Liquidity risk (Cont’d)
As at the end of the prior year the financial assets financial liabilities and off-balance sheet guarantee held by the
Company are analysed by their maturity date as below at their remaining undiscounted contractual cash flows (in
RMB’0000):
Closing balance of the prior year
Item Within 1 year 1 to 2 years 2 to 5 years Over 5 years Total
Financial assets:
Monetary funds 1400043.50 1400043.50
Accounts receivable 370056.08 370056.08
Accounts receivable financing 92496.04 92496.04
Other receivables 219982.47 219982.47
Long-term receivables 139749.85 34634.23 174384.08
Other current assets 79590.39 79590.39
Non-current assets due within one year 492071.00 492071.00
Total financial assets 2654239.48 139749.85 34634.23 2828623.56
Financial liabilities:
Short-term borrowings 3638504.83 3638504.83
Bills payable 312859.58 312859.58
Accounts payable 411496.68 411496.68
Other payables 185450.80 185450.80
Non-current liabilities due within one year 487609.74 487609.74
Long-term borrowings 102329.00 181247.82 114646.81 398223.63
Lease liabilities 408.73 1338.55 5485.00 7232.28
Long-term payables 169345.00 105959.87 59653.02 334957.89
Total financial liabilities and contingent liabilities 5035921.63 272082.73 288546.24 179784.83 5776335.43
The financial liabilities disclosed above are based on cash flows that are not discounted and may differ from the
carrying amount of the line items of the balance sheet.Maximum guarantee amount for signed guarantee contracts does not represent the amount to be paid.
120 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X. Risk Relating to Financial Instruments (Cont’d)
1. Risk management goals and policies (Cont’d)
(3) Market risk
Market risk includes interest rate risk and currency risk refers to the risk that the fair value or future cash flow of a
financial instrument will be fluctuated due to the changes in market price.Interest rate risk
Interest rate risk refers to the risk that the fair value or future cash flow of a financial instrument will be fluctuated
due to the floating rate. Interest rate risk arises from recognised interest-bearing financial instrument and
unrecognised financial instrument (e.g. loan commitments).The Company’s interest rate risk arises from long-term interest-bearing liabilities including long-term borrowing
and bonds payable. Financial liabilities issued at floating rate expose the Company to cash flow interest rate
risk. Financial liabilities issued at fixed rate expose the Company to fair value interest rate risk. The Company
determines the relative proportions of its fixed rate and floating rate contracts depending on the prevailing market
conditions and to maintain an appropriate combination of financial instruments at fixed rate and floating rate
through regular reviews and monitors.The Company continuously monitors the interest rate position of the Company. The Company did not enter
into any interest rate hedging arrangements. But the management is responsible to monitor the risks of interest
rate and consider to hedge significant interest risk if necessary. Increase in interest rates will increase the cost
of new borrowing and the interest expenses with respect to the Company’s outstanding floating rate interest-
bearing borrowings and therefore could have a material adverse effect on the Company’s financial result. The
management will make adjustments with reference to the latest market conditions. These adjustments may
include enter into interest swap agreement to mitigate its exposure to the interest rate risk.Interest bearing financial instrument held by the Company are as follows (in RMB’0000):
Balance for Balance for
Item the period the prior period
Financial instrument with fixed interest rate
Financial liabilities
Of which: Short-term borrowings 3494652.71 3638504.83
Long-term borrowings 489554.63 398223.63
Long-term borrowings due within one year 164102.55 192074.82
Bonds payable due within one year 35000.00
Total 4148309.89 4263803.28
Financial instrument with floating interest rate
Financial assets
Of which: Monetary funds 183919.23 215596.89
Total 183919.23 215596.89
SHANDONG CHENMING PAPER HOLDINGS LIMITED 121
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X. Risk Relating to Financial Instruments (Cont’d)
1. Risk management goals and policies (Cont’d)
(3) Market risk (Cont’d)
Interest rate risk (Cont’d)
As at 30 June 2023 if the interest rates of borrowings at floating interest rates increase or decrease by 25 basis
points with all other factors remain unchanged the Company’s net profit and shareholders’ equity will increase or
decrease by RMB103707700 (31 December 2022: RMB105720100).The financial instruments held by the Company at the reporting date expose the Company to fair value interest
rate risk. This sensitivity analysis as above has been determined assuming that the change in interest rates had
occurred at the reporting date and arisen from the recalculation of the above financial instrument issued at new
interest rates. The non-derivative tools issued at floating interest rate held by the Company at the reporting date
expose the Company to cash flow interest rate risk. The effect to the net profit and shareholder’s equity illustrated
in the sensitivity analysis as above is arisen from the effect to the annual estimate amount of interest expenses or
revenue at the floating interest rate. The analysis is performed on the same basis for prior year.Exchange rate risk
Exchange risk refers to the risk that the fair value or future cash flows of a financial instrument will be fluctuated
due to the changes in foreign currency rates. Foreign currency risk arises on financial instruments that are
denominated in a currency other than the functional currency in which they are measured.The principal business of the Company is situated within the PRC and is denominated in RMB. However foreign
exchange risks still exist for the assets and liabilities in foreign currencies and future foreign currency transactions
as recognised by the Company (assets and liabilities in foreign currencies and foreign currency transactions are
mainly denominated in US dollar Japanese yen South Korean Won Euro Hong Kong dollar and British pound).The following table details the financial assets and liabilities held by the Company which denominated in foreign
currencies and amounted to RMB as at 30 June 2023 are as follows (in RMB’0000):
Liabilities denominated in foreign currency Asset denominated in foreign currency
Closing Closing balance Closing balance
Item balance of the prior year Closing balance of the prior year
USD 78991.02 130604.70 50266.48 88289.61
EUR 2416.65 20033.37 9218.04 14744.91
HKD 94.63 100.71
JPY 735.15 768.90
GBP 1.51 1.37
Total 81407.67 150638.07 60315.81 103905.5
The Group continuously monitors the size of the Group’s foreign currency transactions and foreign currency
assets and liabilities to minimise the foreign exchange risks it faces and for this reason the Group may aim to
avoid foreign exchange risk by signing forward foreign exchange contracts or currency swap contracts.
122 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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X. Risk Relating to Financial Instruments (Cont’d)
1. Risk management goals and policies (Cont’d)
(3) Market risk (Cont’d)
Exchange rate risk (Cont’d)
With other variables unchanged the after-tax effect of the possible reasonable changes in the exchange rate of
foreign currency to RMB on the current profit and loss of the Company is as follows (in RMB’0000):
Increase (decrease) in after-tax profits Balance for the period Balance for the prior period
Increase in exchange rate of USD 5% -1436.23 5% -2115.75
Decrease in exchange rate of USD -5% 1436.23 -5% 2115.75
Increase in exchange rate of EUR 5% -340.07 5% -264.42
Decrease in exchange rate of EUR -5% 340.07 -5% 264.42
Other price risks
Other price risks refer to the risk of fluctuations caused by changes in market prices other than exchange rate
risks and interest rate risks whether arising from factors related to a single financial instrument or its issuer or
from factors related to all similar financial instruments traded on the market. Other price risks can stem from
changes in commodity prices stock market indexes equity instrument prices and other risk variables.Listed equity instrument investments held by the Company classified as financial assets held for trading other
non-current financial assets and other equity instrument investments are measured at fair value on the balance
sheet date. Therefore the Company is subject to the risk of changes in the securities market.The Company monitors closely the impact of price changes on the price risk of the Company’s investment in
equity securities. The Company has not taken any measures to avoid other price risks. However the management
is responsible for monitoring other price risks and will consider holding multiple equity securities portfolios to
reduce the price risk of equity securities investment when necessary.With other variables unchanged the after-tax effect of the change of -32.49% (last year: -32.63%) in equity
securities investment prices on the Company’s current profit and loss and other comprehensive income is as
follows (unit: RMB’0000):
Increase (decrease) in Increase (decrease) in other
after-tax profits comprehensive income
Balance for Balance for Balance for Balance for
Item the period the prior period the period the prior period
Due to the rise in the price of equity securities
investment
Due to the decline in the price of equity securities
investment -2427.46 -3617.77
SHANDONG CHENMING PAPER HOLDINGS LIMITED 123
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X. Risk Relating to Financial Instruments (Cont’d)
2. Capital management
The objective of the Company’s capital risk management is to safeguard the Company’s ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce the cost of capital.In order to maintain or adjust the capital structure the Company may adjust its financing methods adjust the number
of dividends paid to shareholders return capital to shareholders issue new shares or disposes assets to reduce its
liabilities.The Company monitors capital on the basis of the gearing ratio. This ratio is calculated as net liabilities divided by total
capital. As at 30 June 2023 the Company’s gearing ratio is 72.28% (31 December 2022: 71.85%).XI. Fair Value Disclosure
Based on the inputs of the lowest level that are of great significance to the measurement as a whole in the fair value
measurement the fair value can be categorised as:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.Level 2: Observable inputs other than the quoted market price of assets or liabilities in Level 1 either directly (the prices) or
indirectly (derived from prices).Level 3: Any input that is not based on observable market data (unobservable inputs) is used for assets or liabilities.
1. Fair value of assets and liabilities measured at fair value as at the end of the period
Unit: RMB
Fair value as at the end of the period
Level 1 fair value Level 2 fair value Level 3 fair value
Item measurement measurement measurement Total
I. Continuous measurement of fair value － － － －
(I) Financial assets held for trading 50433870.59 50433870.59
(1) Equity instrument investments 50433870.59 50433870.59
(II) Accounts receivable financing 614794433.04 614794433.04
(III) Other non-current financial assets 785374459.73 785374459.73
(IV) Biological assets 1492153527.46 1492153527.46
1. Consumable biological assets 1492153527.46 1492153527.46
Total assets continuously measured at fair value 50433870.59 2892322420.23 2942756290.82
In the current year there were no transfers between Level 1 and Level 2 or transfers into or out of Level 3 for the fair
value measurements of the Company’s financial assets and financial liabilities.
124 SHANDONG CHENMING PAPER HOLDINGS LIMITED
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XI. Fair Value Disclosure (Cont’d)
2. Quantitative information about significant unobservable inputs used in the level 3 fair value
measurement that are significant
Unit: RMB
Fair value as at
the end of Valuation
Item the period techniques Unobservable inputs Range
Equity instrument investments:
Shandong Hongqiao Venture 77860000.00 Cost method
Capital Co. Ltd.Consumable biological assets:
Forestry 1492153527.46 Replacement cost Cost per mu for the first 854.36
method year of Eucalyptus (RMB/tonne)
Cost per mu for the first 627.52
year of Pines (RMB/tonne)
Roll back method of Unit price per tonne of 575.00
market price Eucalyptus wood (RMB/tonne)
Unit price per tonne of 572.00
wet pine (RMB/tonne)
Unit price per tonne of 695.00
Chinese fir (RMB/tonne)
XII. Related Parties and Related Party Transactions
1. Parent company of the Company
Shareholding Voting right
Registered of the parent of the parent
Place of capital company in company in
Name of parent company incorporation Business nature (RMB’0000) the Company the Company
Chenming Holdings Co. Ltd. Shouguang Investment in manufacture of 123878.77 27.57% 27.57%
paper electricity steam and
arboriculture
The ultimate controller of the Company is Shouguang State-owned Assets Supervision and Administration Office.
2. Subsidiaries of the Company
For details of the Company’s subsidiaries please refer to Note IX. 1.SHANDONG CHENMING PAPER HOLDINGS LIMITED 125
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XII. Related Parties and Related Party Transactions (Cont’d)
3. Joint ventures and associates of the Company
For details of material joint ventures and associates of the Company please refer to Note IX. 2.Balance of related party transaction between the Company and its joint ventures or associates during the period or prior
periods are as follows:
Name of joint ventures or associates Relation
Shouguang Chenming Huisen New-style Construction Materials Co. Ltd. A joint venture of the Company
Weifang Port Wood Chip Terminal Co. Ltd. A joint venture of the Company
Shouguang Meite Environmental Technology Co. Ltd. A joint venture of the Company
Weifang Xingxing United Chemical Co. Ltd. A joint venture of the Company
Chenming (Qingdao) Asset Management Co. Ltd. An associate of the Company
Guangdong Nanyue Bank Co. Ltd. An associate of the Company
Lide Technology Co. Ltd. An associate of the Company
Other explanation: The former name of Weifang Port Wood Chip Terminal Co. Ltd. was Weifang Sime Darby West Port
Co. Ltd.
4. Other related parties
Name of other related parties Relation
Shouguang Huixin Construction Materials Co. Ltd. A subsidiary of a company invested by the Directors
and Senior Management of the Company
Chen Hongguo Hu Changqing Li Xingchun Li Feng Li Key management personnel of the Company
Chuanxuan Yuan Xikun Li Xueqin Li Zhenzhong Li Weixian
Dong Lianming etc.
5. Related party transactions
(1) Purchase and sales of goods and rendering and receiving services
Table on purchase of goods/receiving of services
Unit: RMB
Whether the
Transaction transaction
Details of related Amount for facility facility is Amount for the
Related party party transaction the period approved exceeded prior period
Weifang Port Wood
Chip Terminal Co. Ltd. Port miscellaneous expenses 20317747.45 N/A N/A 32355133.76
126 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
XII. Related Parties and Related Party Transactions (Cont’d)
5. Related party transactions (Cont’d)
(1) Purchase and sales of goods and rendering and receiving services (Cont’d)
Table on sales of goods/providing of services
Unit: RMB
Details of related Amount for Amount for
Related party party transaction the period the prior period
Shouguang Chenming Huisen New-style
Construction Materials Co. Ltd. Sales of electricity and steam 7876218.22 8581891.97
Shouguang Huixin Construction Materials
Co. Ltd. Sales of cement coal oil etc. 55815.97 26377.86
(2) Related party leasing
The Company as lessor:
Unit: RMB
Lease income Lease income
recognised for recognised for
Name of lessee Type of leased asset the current period the previous period
Shouguang Meite Environmental
Technology Co. Ltd. Investment property 733944.95 733944.95
Chenming (Qingdao) Asset Management
Co. Ltd. Housing and building structure 431707.46 337346.26
Lide Technology Co. Ltd. Housing and building structure 949010.43 872208.34
(3) Related party guarantee
The Company as guarantor
Unit: RMB
Whether
Commencement performance
Amount date of Expiry date of guarantee
Party being guaranteed under guarantee guarantee of guarantee is completed
Hainan Chenming Technology Co. Ltd. 30000000.00 2022-9-20 2023-9-20 No
Hainan Chenming Technology Co. Ltd. 50000000.00 2023-3-30 2024-3-30 No
Hainan Chenming Technology Co. Ltd. 30000000.00 2022-9-20 2023-9-19 No
Hainan Chenming Technology Co. Ltd. 50000000.00 2023-3-30 2024-3-29 No
Hainan Chenming Technology Co. Ltd. 20100000.00 2022-9-20 2023-9-20 No
Hainan Chenming Technology Co. Ltd. 100000000.00 2023-3-30 2023-9-28 No
Hainan Chenming Technology Co. Ltd. 186000000.00 2023-3-29 2023-9-28 No
Hainan Chenming Technology Co. Ltd. 39600000.00 2023-4-6 2023-10-6 No
Hainan Chenming Technology Co. Ltd. 100000000.00 2023-5-31 2023-11-30 No
Hainan Chenming Technology Co. Ltd. 56400000.00 2023-6-29 2023-12-29 No
SHANDONG CHENMING PAPER HOLDINGS LIMITED 127
INTERIM REPORT 2023I Financial Report
XII. Related Parties and Related Party Transactions (Cont’d)
5. Related party transactions (Cont’d)
(3) Related party guarantee (Cont’d)
Whether
Commencement performance
Amount date of Expiry date of guarantee
Party being guaranteed under guarantee guarantee of guarantee is completed
Hainan Chenming Technology Co. Ltd. 30000000.00 2023-2-10 2023-8-10 No
Hainan Chenming Technology Co. Ltd. 20000000.00 2023-3-16 2023-8-16 No
Hainan Chenming Technology Co. Ltd. 50050000.00 2023-5-25 2023-11-25 No
Hainan Chenming Technology Co. Ltd. 19950000.00 2023-5-30 2023-11-30 No
Huanggang Chenming Pulp & Paper Co. Ltd. 90000000.00 2023-4-27 2024/4/26 No
Huanggang Chenming Pulp & Paper Co. Ltd. 20000000.00 2023-5-23 2024/5/22 No
Huanggang Chenming Pulp & Paper Co. Ltd. 30000000.00 2022-7-27 2023/7/26 No
Huanggang Chenming Pulp & Paper Co. Ltd. 45000000.00 2022-8-19 2023/8/18 No
Huanggang Chenming Pulp & Paper Co. Ltd. 200000000.00 2022-8-24 2023/8/23 No
Huanggang Chenming Pulp & Paper Co. Ltd. 200000000.00 2022-12-23 2023/12/22 No
Huanggang Chenming Pulp & Paper Co. Ltd. 100000000.00 2023-1-3 2023/12/22 No
Huanggang Chenming Pulp & Paper Co. Ltd. 20000000.00 2022-8-17 2023/8/17 No
Huanggang Chenming Pulp & Paper Co. Ltd. 50000000.00 2022-9-27 2023/9/26 No
Huanggang Chenming Pulp & Paper Co. Ltd. 50000000.00 2022-10-13 2023/10/13 No
Jilin Chenming Paper Co. Ltd. 8000000.00 2023-5-31 2023-11-27 No
Jilin Chenming Paper Co. Ltd. 18000000.00 2023-6-27 2024-5-10 No
Jiangxi Chenming Paper Co. Ltd. 10000000.00 2022-8-10 2023-8-7 No
Jiangxi Chenming Paper Co. Ltd. 10000000.00 2022-8-30 2023-8-28 No
Jiangxi Chenming Paper Co. Ltd. 10000000.00 2023-1-19 2024-1-18 No
Jiangxi Chenming Paper Co. Ltd. 10000000.00 2022-9-9 2023-9-4 No
Jiangxi Chenming Paper Co. Ltd. 30000000.00 2023-1-12 2023-7-9 No
Jiangxi Chenming Paper Co. Ltd. 20000000.00 2023-1-12 2023-7-9 No
Jiangxi Chenming Paper Co. Ltd. 94000000.00 2023-3-18 2023-9-13 No
Jiangxi Chenming Paper Co. Ltd. 99450000.00 2023-3-18 2023-9-13 No
Jiangxi Chenming Paper Co. Ltd. 800000.00 2023-3-15 2023-9-15 No
Jiangxi Chenming Paper Co. Ltd. 12100000.00 2023-3-22 2023-9-18 No
Jiangxi Chenming Paper Co. Ltd. 13867900.00 2023-2-16 2023-8-16 No
Jiangxi Chenming Paper Co. Ltd. 3016141.59 2023-3-10 2023-9-4 No
Jiangxi Chenming Paper Co. Ltd. 31000000.00 2023-3-31 2024-9-30 No
Jiangxi Chenming Paper Co. Ltd. 2000000.00 2023-4-12 2023-10-12 No
Jiangxi Chenming Paper Co. Ltd. 70000000.00 2023-4-20 2024-4-19 No
Jiangxi Chenming Paper Co. Ltd. 1000000.00 2023-5-4 2023-11-4 No
Jiangxi Chenming Paper Co. Ltd. 33000000.00 2023-5-9 2024-9-30 No
Jiangxi Chenming Paper Co. Ltd. 160000000.00 2023-5-24 2024-5-22 No
Jiangxi Chenming Paper Co. Ltd. 60000000.00 2023-5-25 2024-5-22 No
Jiangxi Chenming Paper Co. Ltd. 1400000.00 2023-6-8 2023-12-8 No
Jiangxi Chenming Paper Co. Ltd. 1650000.00 2023-6-9 2023-9-9 No
Jiangxi Chenming Paper Co. Ltd. 10000000.00 2023-6-12 2024-6-7 No
Jiangxi Chenming Paper Co. Ltd. 30000000.00 2023-6-13 2024-6-11 No
Jiangxi Chenming Paper Co. Ltd. 80000000.00 2023-6-16 2024-6-15 No
128 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
XII. Related Parties and Related Party Transactions (Cont’d)
5. Related party transactions (Cont’d)
(3) Related party guarantee (Cont’d)
Whether
Commencement performance
Amount date of Expiry date of guarantee
Party being guaranteed under guarantee guarantee of guarantee is completed
Jiangxi Chenming Paper Co. Ltd. 50000000.00 2023-6-19 2024-5-22 No
Jiangxi Chenming Paper Co. Ltd. 250000000.00 2023-6-19 2024-6-13 No
Jiangxi Chenming Paper Co. Ltd. 14002000.00 2023-6-19 2023-12-15 No
Jiangxi Chenming Paper Co. Ltd. 20000000.00 2023-6-20 2024-6-17 No
Jiangxi Chenming Paper Co. Ltd. 20000000.00 2023-6-21 2024-6-17 No
Jiangxi Chenming Paper Co. Ltd. 17924293.14 2023-6-25 2024-6-20 No
Jiangxi Chenming Paper Co. Ltd. 2550000.00 2023-6-27 2024-9-30 No
Jiangxi Chenming Paper Co. Ltd. 10000000.00 2023-6-29 2024-6-24 No
Jiangxi Chenming Paper Co. Ltd. 250000000.00 2023-6-30 2024-6-28 No
Jiangxi Chenming Paper Co. Ltd. 80000000.00 2022-7-1 2024-7-1 No
Shouguang Chenming Import and Export Trade
Co. Ltd. 149995461.94 2023-6-27 2023-12-25 No
Shandong Chenming Paper Sales Co. Ltd. 150000000.00 2022-8-19 2023-8-22 No
Shandong Chenming Paper Sales Co. Ltd. 100000000.00 2022-9-16 2023-9-19 No
Shandong Chenming Paper Sales Co. Ltd. 80000000.00 2022-9-16 2023-9-19 No
Shandong Chenming Paper Sales Co. Ltd. 165854444.58 2022-10-9 2023-10-8 No
Shandong Chenming Paper Sales Co. Ltd. 379780113.16 2022-10-9 2023-10-8 No
Shandong Chenming Paper Sales Co. Ltd. 160000000.00 2022-12-23 2023-12-18 No
Shandong Chenming Paper Sales Co. Ltd. 260000000.00 2022-12-23 2023-12-18 No
Shandong Chenming Paper Sales Co. Ltd. 50000000.00 2023-1-5 2024-1-2 No
Shandong Chenming Paper Sales Co. Ltd. 50000000.00 2023-1-12 2024-1-8 No
Shandong Chenming Paper Sales Co. Ltd. 290525401.17 2023-2-13 2023-8-11 No
Shandong Chenming Paper Sales Co. Ltd. 330033668.83 2023-4-6 2024-4-8 No
Shandong Chenming Paper Sales Co. Ltd. 129933410.35 2023-4-6 2024-4-8 No
Shanghai Chenming Pulp & Paper Sales Co. Ltd. 5000000.00 2022-10-26 2023-10-25 No
Shanghai Chenming Pulp & Paper Sales Co. Ltd. 50000000.00 2023-2-23 2023-8-23 No
Shanghai Chenming Pulp & Paper Sales Co. Ltd. 10000000.00 2023-5-29 2024-5-25 No
Shanghai Chenming Pulp & Paper Sales Co. Ltd. 10000000.00 2023-2-13 2026-2-12 No
Kunshan Tuoan Plastic Products Co. Ltd. 10000000.00 2023/2/27 2023/8/26 No
Kunshan Tuoan Plastic Products Co. Ltd. 20000000.00 2023/2/27 2024/2/26 No
Chenming (HK) Limited 77298616.85 2023-5-18 2023-11-14 No
Shouguang Meilun Paper Co. Ltd. 364394014.75 2023-6-19 2024-6-19 No
Shouguang Meilun Paper Co. Ltd. 88180874.40 2023-6-27 2024-6-27 No
Shouguang Meilun Paper Co. Ltd. 44000000.00 2022-7-31 2023-7-30 No
Shouguang Meilun Paper Co. Ltd. 205308929.42 2023-1-11 2023-7-10 No
Shouguang Meilun Paper Co. Ltd. 38551963.36 2023-2-8 2023-8-7 No
Shouguang Meilun Paper Co. Ltd. 10000000.00 2023-2-28 2024-2-27 No
Shouguang Meilun Paper Co. Ltd. 190200798.22 2023-6-19 2023-12-15 No
Shouguang Meilun Paper Co. Ltd. 34000000.00 2023-4-28 2023-7-27 No
SHANDONG CHENMING PAPER HOLDINGS LIMITED 129
INTERIM REPORT 2023I Financial Report
XII. Related Parties and Related Party Transactions (Cont’d)
5. Related party transactions (Cont’d)
(3) Related party guarantee (Cont’d)
Whether
Commencement performance
Amount date of Expiry date of guarantee
Party being guaranteed under guarantee guarantee of guarantee is completed
Shouguang Meilun Paper Co. Ltd. 285000000.00 2023-6-29 2023/12/26 No
Shouguang Meilun Paper Co. Ltd. 125573440.23 2023-1-29 2023-7-31 No
Shouguang Meilun Paper Co. Ltd. 100164057.08 2022-7-29 2023-7-24 No
Shouguang Meilun Paper Co. Ltd. 20000000.00 2022-8-31 2023-8-31 No
Shouguang Meilun Paper Co. Ltd. 200000000.00 2023-4-25 2024-4-24 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 100000000.00 2022-8-9 2023-8-8 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 100000000.00 2022-8-12 2023-8-11 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 100000000.00 2022-8-17 2023-8-16 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 67000000.00 2022-8-18 2023-8-17 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 59000000.00 2022-8-19 2023-8-18 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 50000000.00 2022-9-14 2023-9-13 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 100000000.00 2022-10-9 2023-10-8 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 57500000.00 2022-10-18 2023-10-17 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 50000000.00 2022-11-16 2023-11-15 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 50000000.00 2022-11-29 2023-11-28 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 47382000.00 2022-12-21 2023-12-8 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 200000000.00 2023-1-12 2023-8-8 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 65000000.00 2023-1-18 2023-7-17 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 21000000.00 2023-1-16 2024-1-15 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 50000000.00 2023-1-18 2023-7-17 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 15000000.00 2023-1-20 2024-1-19 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 14000000.00 2023-1-30 2024-1-29 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 200000000.00 2023-2-15 2023-8-14 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 125000000.00 2023-2-23 2024-3-20 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 80000000.00 2023-2-23 2024-3-20 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 50000000.00 2023-3-23 2024-3-21 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 45000000.00 2023-3-28 2023-9-22 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 50000000.00 2023-3-29 2023-9-29 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 4000000.00 2023-4-3 2024-4-2 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 200000000.00 2023-4-25 2023-10-20 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 68000000.00 2023-4-24 2024-4-20 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 120000000.00 2023-4-21 2024-4-19 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 50000000.00 2023-5-6 2023-10-25 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 74500000.00 2023-5-25 2024-5-24 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 99600000.00 2023-5-30 2023-11-27 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 50000000.00 2023-5-9 2023-11-9 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 40000000.00 2023-6-9 2023-12-8 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 220000000.00 2023-6-8 2024-5-26 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 65000000.00 2023-6-21 2023-12-18 No
130 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
XII. Related Parties and Related Party Transactions (Cont’d)
5. Related party transactions (Cont’d)
(3) Related party guarantee (Cont’d)
Whether
Commencement performance
Amount date of Expiry date of guarantee
Party being guaranteed under guarantee guarantee of guarantee is completed
Zhanjiang Chenming Pulp & Paper Co. Ltd. 50000000.00 2023-6-25 2024-6-24 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 81200000.00 2023-6-19 2024-6-19 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 70000000.00 2023-6-21 2024-6-20 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 77450000.00 2020-10-16 2023-10-15 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 112450000.00 2020-11-11 2023-11-10 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 98000000.00 2020-12-10 2023-12-9 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 98000000.00 2021-1-5 2024-1-4 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 140000000.00 2021-12-23 2023-12-23 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 90000000.00 2022-6-17 2025-6-16 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 90000000.00 2022-6-17 2025-6-16 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 90000000.00 2022-5-31 2024-5-30 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 50000000.00 2022-1-26 2023-12-22 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 47000000.00 2022-10-25 2024-10-19 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 137133300.00 2022-6-29 2025-6-29 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 93000000.00 2023-3-31 2026-3-29 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 100000000.00 2023-6-20 2026-6-20 No
Zhanjiang Chenming Pulp & Paper Co. Ltd. 180000000.00 2023-6-2 2026-6-20 No
Weifang Port Wood Chip Terminal Co. Ltd. 105200000.00 2017-12-20 2027-12-20 No
Total 11701070829.07
(4) Related party lending and borrowing
Unit: RMB
Borrowing Commencement
Related party amount date Expiry date Description
Borrowing
Chenming Holdings Co. Ltd. 40000000.00 2023-1-1 2023-6-30 Controlling
shareholder
Guangdong Nanyue Bank Co. Ltd. 842600000.00 2023-1-1 2023-6-30 Associate
SHANDONG CHENMING PAPER HOLDINGS LIMITED 131
INTERIM REPORT 2023I Financial Report
XII. Related Parties and Related Party Transactions (Cont’d)
6. Related party accounts receivable and accounts payable
(1) Receivables
Unit: RMB
Closing balance Opening balance
Item Related party Book balance Bad debts provision Book balance Bad debts provision
Accounts receivable Shouguang Chenming Huisen 6467589.17 6692.83 1856833.50 1392.06
New-style Construction Materials
Co. Ltd.Accounts receivable Shouguang Huixin Construction 27073.79 63.66
Materials Co. Ltd.Other receivables Weifang Port Wood Chip Terminal 73622749.85 7448990.02 71722249.85 3755227.15
Co. Ltd.Accounts receivable Shouguang Meite Environmental 6782462.48 1774117.95
Technology Co. Ltd.Payments in advance Shouguang Meite Environmental 6370726.99
Technology Co. Ltd.Other receivables Shouguang Meite Environmental 16799133.87 3286036.69 18291242.68 1779523.20
Technology Co. Ltd.Other receivables Xuchang Chenming Paper Co. Ltd. 327400.00 6791.28 327400.00 6791.28
(2) Payable
Unit: RMB
Closing book Opening book
Item Related party balance balance
Accounts payable Weifang Port Wood Chip Terminal Co. Ltd. 7367747.45 19479518.82
Accounts payable Shouguang Meite Environmental Technology Co. Ltd. 8382468.95
Accounts payable Weifang Xingxing United Chemical Co. Ltd. 26905494.34 26905494.34
Other payables Weifang Xingxing United Chemical Co. Ltd. 16860000.00 16860000.00
Other payables Lide Technology Co. Ltd. 559897.05 508619.46
Other payables Chenming (Qingdao) Asset Management Co. Ltd. 115583.42 116656.55
Receipts in advance Chenming (Qingdao) Asset Management Co. Ltd. 2000.00
Contract liabilities Shouguang Huixin Construction Materials Co. Ltd. 20000.00
(3) Deposits with related parties
Unit: RMB
Closing book Opening book
Item Related party balance balance
Bank deposit Guangdong Nanyue Bank Co. Ltd. 50022794.15 10069515.51
Other monetary funds Guangdong Nanyue Bank Co. Ltd. 1027400000.00 927400000.00
(4) Loans from related parties
Unit: RMB
Closing book Opening book
Item Related party balance balance
Short-term borrowings Guangdong Nanyue Bank Co. Ltd. 2059100000.00 1909100000.00
132 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
XIII. Share-based Payment
1. General information of share-based payment
√ Applicable □ Not applicable
Unit: RMB
Total equity instruments of the Company granted during the period 0
Total exercised equity instruments of the Company during the period 0
Total lapsed equity instruments of the Company during the period 22645800.00
Range of exercise prices and contractual remaining period for share options issued by the See explanation
Company at the end of the period for details
Other explanation: On 29 May 2020 the Resolution on the Matters Relating to Adjustments to the 2020 Restricted
A Share Incentive Scheme of the Company and the Resolution in Relation to the Grant of Restricted Shares to the
Participants were considered and approved at the tenth extraordinary meeting of ninth session of the Board and the
fifth extraordinary meeting of the ninth session of the Supervisory Committee of the Company by which 79.60 million
restricted shares were granted. The grant date was 29 May 2020 and the fair value of the restricted shares was the
ex-rights price of the shares on the grant date. The Restricted Shares to be granted under the Incentive Scheme were
“granted once and unlocked in batches”. For the period commencing from the first trading day after expiry of the
24-month period from the date on which the registration of the grant of the Restricted Shares is completed and ending
on the last trading day of the 36-month period from the date on which the registration of the grant of the Restricted
Shares is completed 40% of the Restricted Shares will be unlocked; for the period commencing from the first trading
day after expiry of the 36-month period from the date on which the registration of the grant of the Restricted Shares
is completed and ending on the last trading day of the 48-month period from the date on which the registration of the
grant of the Restricted Shares is completed 30% of the Restricted Shares will be unlocked; for the period commencing
from the first trading day after expiry of the 48-month period from the date on which the registration of the grant of
the Restricted Shares is completed and ending on the last trading day of the 60-month period from the date on which
the registration of the grant of the Restricted Shares is completed 30% of the Restricted Shares will be unlocked.Meanwhile during the three accounting years from 2021 to 2023 the Restricted Shares granted under the Incentive
Scheme shall be subject to annual performance appraisal for unlocking (for details of specific performance evaluation
conditions please refer to the announcement of the Company). The Company estimated that the performance indicators
for 2023 cannot be fulfilled and the corresponding third batch of the 30% Restricted Shares cannot be unlocked. In
addition 49652000 shares lapsed due to the resignation of some Senior Management members.
2. Equity-settled share-based payment
√ Applicable □ Not applicable
Unit: RMB
Ex-right price of
The method of determining the fair value of equity instrument on the grant date grant of share
See explanation
Basis for determining the quantity of exercisable equity instruments for details
Reasons for significant difference between the current estimate and previous estimate Nil
Accumulated amount of equity-settled share-based payment included in the capital reserve 58698080.00
Total amount of equity-settled share-based payment recognised in the current period -27467521.92
Other explanation: At each balance sheet date during the vesting period the Company based on the latest information
such as the latest update on the change in the number of entitled employees will make best estimates to adjust the
expected number of equity instruments that can be vested. As at the exercise date the final estimated number of
exercisable equity instruments should equal the actual number of exercisable equity instruments.SHANDONG CHENMING PAPER HOLDINGS LIMITED 133
INTERIM REPORT 2023I Financial Report
XIV. Undertaking and Contingency
1. Significant commitments
Significant commitments as at the balance sheet date
Unit: RMB
Capital commitments contracted for but not yet
necessary to be recognised on the balance sheet Closing balance Opening balance
Commitments in relation to acquisition and construction of
long-term assets 394868914.72 184833000.27
2. Contingency
As at 30 June 2023 the Company had no contingent items such as outstanding litigation and external guarantees that
should be disclosed.XV. Post-balance Sheet Event
1. On 11 May 2023 Shandong Chenming Paper Holdings Limited published the Announcement on the Exercise of the
Redemption Option of the 2017 First Tranche of Medium-term Notes and the Announcement on the Redemption of the
2017 First Tranche of Medium-term Notes on Shanghai Clearing House (www.shclearing.com) and Chinamoney (www.
chinamoney.com.cn). The Company intended to redeem “17 Lu Chenming MTN001” in full. The date of principal and
interest payment was 12 July 2023 and the amount of principal and interest payment was RMB1089.7 million. On 12
July 2023 the Company completed the payment of the principal and interest of “17 Lu Chenming MTN001” (bond code:
101779001) with a total of RMB1089.7 million in principal and interest paid.
2. On 17 July 2023 Shandong Chenming Paper Holdings Limited convened the ninth extraordinary meeting of the tenth
session of the Board and the fifth extraordinary meeting of the tenth session of the Supervisory Committee at which
the Resolution on Failing to Fulfil the Unlocking Conditions for the Second Unlocking Period under the 2020 Restricted A
Share Incentive Scheme and Repurchase and Cancellation of Certain Restricted Shares was considered and approved.The resolution allowed the repurchase and cancellation of 22929000 restricted A shares of the participants that have
been granted but not yet unlocked including 22593000 restricted shares granted to 98 participants for the second
unlocking period and 336000 restricted shares granted to five departed staff for the third unlocking period. All the
related Directors and related Supervisors have abstained from voting. The changes in the share capital structure of the
Company after the repurchase and cancellation are as follows:
Before the change Change After the change
Nature of shares Number (shares) Percentage Number (shares) Number (shares) Percentage
Restricted shares 59507587 2.00% -22929000 36578587 1.24%
Non-restricted shares 2920234613 98.00% 2920234613 98.76%
Total number of shares 2979742200 100.00% -22929000 2956813200 100.00%
XVI. Other Material Matters
1. Segment information
(1) Basis for determination and accounting policies
According to the Company’s internal organisational structure management requirements and internal reporting
system the Company’s operating business is divided into 4 reporting segments. These report segments are
determined based on the financial information required by the company’s daily internal management. The
management of the Group regularly evaluates the operating results of these reporting segments to determine the
allocation of resources to them and evaluate their performance.
134 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
XVI. Other Material Matters (Cont’d)
1. Segment information (Cont’d)
(1) Basis for determination and accounting policies (Cont’d)
The Company’s reporting segments include:
(1) Machine-made paper and pulp segment which is responsible for production and sales of machine-made
paper and pulp;
(2) Financial services segment which provides financial services;
(3) Hotels and property rentals segment which engages in property leasing;
(4) Other segments which is responsible for the above segments otherwise.
Segment report information is disclosed in accordance with the accounting policies and measurement standards
adopted by each segment when reporting to management. These accounting policies and measurement basis are
consistent with the accounting policies and measurement basis used in preparing the financial statements.
(2) Financial information of reporting segment
Unit: RMB
Machine-made Hotels and
Item paper and pulp Financial services property rentals Others Elimination Total
Revenue 39476912657.97 177268060.87 131290586.44 572304835.43 27792813359.40 12564962781.31
Of which: revenue from
external transactions 12065096786.14 90836358.97 118740344.32 290289291.88 – 12564962781.31
Revenue from inter-segment
transactions 27411815871.83 86431701.90 12550242.12 282015543.55 27792813359.40 –
Of which: Revenue from
principal activities 31384239458.66 177173721.25 60933019.69 413380818.93 19614791305.75 12420935712.78
Operating costs 38520939069.72 126482676.26 68582448.16 542328134.83 27761600666.39 11496731662.58
Of which: Costs of principal
activities 30859129272.33 126482676.26 37016668.91 393758731.55 20039182154.16 11377205194.89
Operating expenses 91452287.47 145808.06 11116898.90 3953215.77 1492.66 106666717.54
Of which: Salaries 45098380.67 72901.73 3574025.74 1621662.12 – 50366970.26
Depreciation expenses 924400.19 – 1889865.39 5862.18 – 2820127.76
Office expenses 1128584.76 – 6629.23 2058.20 – 1137272.19
Travel expenses 11756448.37 12886.33 1223.13 232659.36 – 12003217.19
Selling commissions 790986.61 – 2425469.11 171028.20 – 3387483.92
Rental expenses 3195914.93 – – 42264.17 – 3238179.10
Hospitality expenses 22702904.49 60020.00 8206.24 466166.04 1492.66 23235804.11
Warehouse expenses 93953.41 – – 335267.44 – 429220.85
Others 5760714.04 – 3211480.06 1076248.06 – 10048442.16
Operating profit/(loss) -623546726.55 39091841.23 -61163817.15 56633428.35 314949905.92 -903935180.04
Total cost of construction in
progress incurred during
the period 146009004.57 – – 2509433.97 – 148518438.54
Fixed assets acquired in the
current period 79181364.03 – 157609.55 455396.13 – 79794369.71
Intangible assets acquired
during the period 24205100.00 – – – – 24205100.00
Total assets 152006775904.45 22919601699.02 8438207685.88 10515826833.53 111227551366.30 82652860756.58
Total liabilities 107344765983.53 5073124221.75 3855939230.82 3905173097.84 60441256630.31 59737745903.63
Basis of accounting: The transfer prices between the Company’s segments are based on market prices.SHANDONG CHENMING PAPER HOLDINGS LIMITED 135
INTERIM REPORT 2023I Financial Report
XVII. Major Item Notes of the Parent Company’s Financial Statements
1. Accounts receivable
(1) Disclosure of accounts receivable by category
Unit: RMB
Closing balance Opening balance
Book balance Bad debts provision Book balance Bad debts provision
Provision Provision
Percentage percentage Percentage percentage
Category Amount (%) Amount (%) Carrying amount Amount (%) Amount (%) Carrying amount
Accounts receivable assessed
individually for bad debt provision
Accounts receivable assessed
collectively for bad debt provision 2524824903.83 100.00 4565784.22 0.18 2520259119.61 139392924.13 100.00 4637396.40 3.33 134755527.73
Of which:
Due from related party customers 2512278523.26 99.50 6658.13 0.00 2512271865.13 101246295.74 72.63 101246295.74
Due from non-related party customers 12546380.57 0.50 4559126.09 36.34 7987254.48 38146628.39 27.37 4637396.40 12.16 33509231.99
Total 2524824903.83 100.00 4565784.22 0.18 2520259119.61 139392924.13 100.00 4637396.40 3.33 134755527.73
136 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
XVII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
1. Accounts receivable (Cont’d)
(1) Disclosure of accounts receivable by category (Cont’d)
Items assessed collectively for bad debt provision: Due from related party customers
Unit: RMB
Closing balance
Bad debts Provision
Name Book balance provision percentage (%)
Within 1 year 2512278523.26 6658.13 0.00
Total 2512278523.26 6658.13 0.00
Items assessed collectively for bad debt provision: Receivables from non-related party customer
Unit: RMB
Closing balance
Bad debts Provision
Name Book balance provision percentage (%)
Within 1 year 8043559.40 56304.92 0.70
1 to 2 years
2 to 3 years
Over 3 years 4502821.17 4502821.17 100.00
Total 12546380.57 4559126.09 36.34
Disclosure by ageing
Unit: RMB
Ageing Closing balance
Within 1 year (including 1 year) 2520322082.66
1 to 2 years
2 to 3 years
Over 3 years 4502821.17
Subtotal 2524824903.83
Less: Bad debt provision 4565784.22
Total 2520259119.61
SHANDONG CHENMING PAPER HOLDINGS LIMITED 137
INTERIM REPORT 2023I Financial Report
XVII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
1. Accounts receivable (Cont’d)
(2) Provision recovery or reversal of bad debt provision for the period
Bad debt provision for the period:
Unit: RMB
Changes in the period
Opening Recovery Closing
Category balance Provision or reversal Write-off Others balance
Bad debt provision 4637396.40 71612.18 4565784.22
Total 4637396.40 71612.18 4565784.22
(3) Top five accounts receivable based on closing balance of debtors
The total amount of top five accounts receivable based on closing balance of debtors for the period amounted
to RMB2511327361.34 in total accounting for 99.47% of the total closing balance of accounts receivable. The
closing balance of the corresponding bad debt provision amounted to RMB0.00 in total.Unit: RMB
Percentage to
total closing
Closing balance balance of Closing balance
of accounts accounts of bad debt
Name of entity receivable receivable provision
Customer I 1417896807.62 56.16
Customer II 1000000000.00 39.61
Customer III 72800000.00 2.88
Customer IV 10630553.72 0.42
Customer V 10000000.00 0.40
Total 2511327361.34 99.47
138 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
XVII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
2. Other receivables
Unit: RMB
Item Closing balance Opening balance
Other receivables 8352806067.27 9337019470.13
Total 8352806067.27 9337019470.13
(1) Other receivables by nature
Unit: RMB
Closing book Opening book
Nature balance balance
Open credit 8415914078.75 9391199670.38
Reserve and borrowings 20758876.60 15112113.60
Guarantee deposit and deposit 730500.00 850000.00
Others 4908983.57 13027863.16
Total 8442312438.92 9420189647.14
(2) Particulars of bad debt provision
Unit: RMB
Stage 1 Stage 2 Stage 3
Lifetime ECLs Lifetime ECLs
ECLs for the (not credit- (credit-
Bad debts provision next 12 months impaired) impaired) Total
Balance as at 1 January 2023 34208745.73 48961431.28 83170177.01
Balance as at 1 January 2023 for the period
– Transferred to stage 2
– Transferred to stage 3
– Reversed to stage 2
– Reversed to stage 1
Provision for the period 5914844.93 421349.71 6336194.64
Reversal for the period
Transfer for the period
Write-off for the period
Other changes
Balance as at 30 June 2023 40123590.66 49382780.99 89506371.65
SHANDONG CHENMING PAPER HOLDINGS LIMITED 139
INTERIM REPORT 2023I Financial Report
XVII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
2. Other receivables (Cont’d)
(2) Particulars of bad debt provision (Cont’d)
Changes in carrying book balances with significant changes in loss provision for the period
□ Applicable √ Not applicable
Disclosure by ageing
Unit: RMB
Ageing Closing balance
Within 1 year (including 1 year) 8290851749.53
1 to 2 years 68570416.65
2 to 3 years 3547424.94
Over 3 years 79342847.80
Total 8442312438.92
(3) Provision recovery or reversal of bad debt provision for the period
Bad debt provision for the period:
Unit: RMB
Changes in the period
Opening Recovery
Category balance Provision or reversal Write-off Others Closing balance
Other receivables 83170177.01 6336194.64 89506371.65
Total 83170177.01 6336194.64 89506371.65
140 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
XVII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
2. Other receivables (Cont’d)
(4) Top five accounts receivable based on closing balance of debtors
The total amount of top five other receivables based on closing balance of debtors for the period amounted
to RMB4443181018.88 in total accounting for 52.64% of the total closing balance of other receivables. The
closing balance of the corresponding bad debt provision amounted to RMB0.00 in total.Unit: RMB
Percentage
to total closing Closing balance
balance of other of bad debt
Name of entity Nature Closing balance Ageing receivables provision
Customer I Open credit 1277000000.00 Within 1 year 15.13%
Customer II Open credit 1047280075.00 Within 1 year 12.41%
Customer III Open credit 921800000.00 Within 1 year 10.92%
Customer IV Open credit 709692418.87 Within 1 year 8.41%
Customer V Open credit 487408525.01 Within 1 year 5.77%
Total 4443181018.88 52.64%
3. Long-term equity investments
Unit: RMB
Closing balance Opening balance
Impairment Impairment
Item Book balance provision Book value Book balance provision Book value
Investment in subsidiaries 18571694740.81 18571694740.81 18502944740.81 18502944740.81
Investment in associates and joint ventures 320282894.09 5994545.96 314288348.13 329212841.48 5994545.96 323218295.52
Total 18891977634.90 5994545.96 18885983088.94 18832157582.29 5994545.96 18826163036.33
SHANDONG CHENMING PAPER HOLDINGS LIMITED 141
INTERIM REPORT 2023I Financial Report
XVII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
3. Long-term equity investments (Cont’d)
(1) Investment in subsidiaries
Unit: RMB
Closing
Opening Change for the period Closing balance of
balance Additional Withdrawn Impairment balance impairment
Investee (Book value) contribution contribution provision Others (book value) provision
Chenming Paper Korea Co. Ltd. 6143400.00 6143400.00
Chenming GmbH 4083235.00 4083235.00
Hailaer Chenming Paper Co. Ltd. 12000000.00 12000000.00
Huanggang Chenming Pulp & Paper
Co. Ltd. 2350000000.00 2350000000.00
Huanggang Chenming Arboriculture
Development Co. Ltd. 70000000.00 70000000.00
Jinan Chenming Investment and
Management Co. Ltd. 100000000.00 100000000.00
Wuhan Chenming Hanyang Paper
Holdings Co. Ltd. 264493210.21 264493210.21
Shandong Grand View Hotel Co. Ltd. 80500000.00 80500000.00
Zhanjiang Chenming Pulp & Paper
Co. Ltd. 5137500000.00 68750000.00 5206250000.00
Shouguang Chenming Modern Logistic
Co. Ltd. 10000000.00 10000000.00
Shouguang Chenming Art Paper Co. Ltd. 113616063.80 113616063.80
Shouguang Meilun Paper Co. Ltd. 4449441979.31 4449441979.31
Shouguang Shun Da Customs
Declaration Co Ltd. 1500000.00 1500000.00
Shandong Chenming Paper Sales Co.Ltd. 762641208.20 762641208.20
Shouguang Chenming Import and
Export Trade Co. Ltd. 250000000.00 250000000.00
Shouguang Chenming Papermaking
Machine Co. Ltd. 2000000.00 2000000.00
Shouguang Hongxiang Printing and
Packaging Co. Ltd. 3730000.00 3730000.00
Shandong Chenming Group Finance
Co. Ltd. 4000000000.00 4000000000.00
Chenming Arboriculture Co. Ltd. 45000000.00 45000000.00
Chenming Paper United States Co. Ltd. 6407800.00 6407800.00
Weifang Chenming Growth Driver
Replacement Equity Investment Fund
Partnership (Limited Partnership) 592500340.53 592500340.53
Weifang Chendu Equity Investment
Partnership (Limited Partnership) 241387503.76 241387503.76
Total 18502944740.81 68750000.00 18571694740.81
142 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
XVII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
3. Long-term equity investments (Cont’d)
(2) Investment in associates and joint ventures
Unit: RMB
Change for the period
Investment Distribution
gain or loss Adjustment of cash Closing
Opening recognised of other Other change dividend or Closing balance of
balance Additional Withdrawn under equity comprehensive in equity profit Impairment balance impairment
Investee (book value) contribution contribution method income interest declared provision Others (book value) provision
I. Associates
Zhuhai Dechen New Third Board Equity
Investment Fund Company (Limited
Partnership) 36776710.91 5000000.00 35769.93 31812480.84
Ningbo Kaichen Huamei Equity Investment
Fund Partnership (Limited Partnership) 197218318.77 -3089.85 197215228.92
Chenming (Qingdao) Asset Management
Co. Ltd. 6482035.69 27510.92 6509546.61
Xuchang Chenming Paper Co. Ltd. 0.00 5994545.96
Subtotal 240477065.37 5000000.00 60191.00 235537256.37 5994545.96
II. Joint ventures
Shouguang Chenming Huisen New-style
Construction Materials Co. Ltd. 7892659.42 1025474.67 1100000.00 7818134.09
Weifang Port Wood Chip Terminal Co. Ltd. 74848570.73 -3915613.06 70932957.67
Subtotal 82741230.15 -2890138.39 1100000.00 78751091.76
Total 323218295.52 5000000.00 -2829947.39 1100000.00 314288348.13 5994545.96
SHANDONG CHENMING PAPER HOLDINGS LIMITED 143
INTERIM REPORT 2023I Financial Report
XVII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
4. Revenue and operating costs
Unit: RMB
Amount for the period Amount for the prior period
Item Revenue Costs Revenue Costs
Principal activities 2588800023.67 2692576337.91 3140980202.71 2884740920.89
Other activities 1315784940.43 1054300999.17 605682653.79 496489124.84
Total 3904584964.10 3746877337.08 3746662856.50 3381230045.73
Information related to revenue:
Unit: RMB
Category of contract Machine-made paper Others Total
Type of goods 2588800023.67 1315784940.43 3904584964.10
Including:
Machine-made paper 2228816873.67 2228816873.67
Material sales 1038125689.11 1038125689.11
Leasing 8728934.62 8728934.62
Others 359983150.00 268930316.70 628913466.70
By geographical area 2588800023.67 1315784940.43 3904584964.10
Including:
Mainland China 2588800023.67 1315784940.43 3904584964.10
Other countries and regions
By the timing of delivery 2588800023.67 1315784940.43 3904584964.10
Including:
Goods (at a point in time) 2588800023.67 1307056005.81 3895856029.48
Services (within a certain period)
Leasing income 8728934.62 8728934.62
Information related to the transaction price allocated to the remaining performance obligations:
As at the end of the reporting period the amount of income corresponding to the agreements that have been entered
into but have not yet fulfilled or not fully fulfilled their performance obligations amounted to RMB4188916529.77
which is expected to be recognised in 2023.
144 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023I Financial Report
XVII. Major Item Notes of the Parent Company’s Financial Statements (Cont’d)
5. Investment income
Unit: RMB
Amount for Amount for
Item the period the prior period
Income from long-term equity investments accounted for using the
cost method 80000000.00 270000000.00
Income from long-term equity investments accounted for using the
equity method -2829947.39 -5337689.31
Investment gain on disposal of long-term equity investments 630212.77 751679.56
Investment gain on holding other non-current financial assets 2800000.00
Investment gain on derecognition of financial assets -22621312.74 -30954557.50
Total 55178952.64 237259432.75
XVIII. Supplementary information
1. Breakdown of extraordinary gains or losses for the current period
√ Applicable □ Not applicable
Unit: RMB
Item Amount Remark
Profit or loss from disposal of non-current assets (including write-off
of provision for assets impairment) 9118027.05
Government grants (except for the 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 108155697.19
Profit or loss from debt restructuring -145995.36
Except for effective hedging business conducted in the ordinary course
of business of the Company gain or loss arising from the change in
fair value of financial assets held for trading and financial liabilities held
for trading as well as investment gains from disposal of financial assets
held for trading financial liabilities held for trading and financial assets
available for sale -25565577.25
Reversal of provision for impairment of receivables individually tested for
impairment 68586443.66
Gain or loss arising from fair value change of consumable biological
assets subsequently measured at fair value 5749779.42
Other gain or loss items within the definition of extraordinary gain or loss 443855.10
Less: Effect of income tax 39664063.42
Effect of minority interest (after tax) 2919113.00
Total 123759053.39
SHANDONG CHENMING PAPER HOLDINGS LIMITED 145
INTERIM REPORT 2023I Financial Report
XVIII. Supplementary information (Cont’d)
1. Breakdown of extraordinary gains or losses for the current period (Cont’d)
Other profit or loss items consistent with the definition of extraordinary items:
□ Applicable √ Not applicable
The Company does not have other profit or loss items consistent with the definition of extraordinary items.Explanation on classification of non-recurring profit and loss listed in Explanatory Announcement No. 1 on Information
Disclosure of Companies Offering Their Securities to the Public – Non-recurring Profit and Loss as non-recurring profit
and loss
□ Applicable √ Not applicable
2. Return on net assets and earnings per share
Rate of return
on net assets Earnings per share
on weighted Basic Diluted
Profit for the reporting period average basis (RMB per share) (RMB per share)
Net profit attributable to ordinary shareholders of
the Company -4.15% -0.250 -0.250
Net profit after extraordinary gains or losses
attributable to ordinary shareholders of the
Company -4.85% -0.292 -0.292
Data specification: The net profit attributable to shareholders of the Company does not exclude the effect of the interest
payment deferred and accumulated to subsequent periods for Perpetual Bonds. When calculating financial indicators
such as earnings per share and rate of return on weighted average net assets the interest on Perpetual Bonds of
RMB44481369.86 during the reporting period is deducted.
3. Accounting data difference under accounting standard at home and abroad
(1) Differences of net profit and net assets disclosed in financial reports prepared under IAS and Chinese
accounting standards
□ Applicable √ Not applicable
(2) Differences of net profit and net assets disclosed in financial reports prepared under oversea and Chinese
accounting standards
□ Applicable √ Not applicable
The Board of Shandong Chenming Paper Holdings Limited
30 August 2023
146 SHANDONG CHENMING PAPER HOLDINGS LIMITED
INTERIM REPORT 2023
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