C&S Paper Co., Ltd.

C&S Paper Co., Ltd. Semi-annual Report 2021

Semi-Annual Report 2021

August 2021

C&S Paper Co., Ltd. Semi-annual Report 2021

Section I Important Notice, Contents and Definitions

The Board of Directors and the Board of Supervisors of the Company and its directors, supervisors and senior management warrant that the information contained in this semi-annual report is true, accurate and complete without any false and misleading statements or material omissions, and severally and jointly accept legal liability thereof.

Liu Peng, the person in charge of the Company, Dong Ye, the person in charge of accounting of the Company, and Xu Xianjing, the person in charge of the accounting department of the Company, have declared that they warrant the truthfulness, accuracy and completeness of the financial statements set out in this semi-annual report.

All directors of the Company attended the Board meeting on which this report was reviewed.

Discrepancies in the sum of decimals in this report are caused by rounding.

The forward-looking statements in this report, including future plans and development strategies, do not constitute substantive commitments of the Company to investors. Investors should be aware of the investment risks.

The Company has described potential risk factors and countermeasures that may exist in its operations in detail in Section III Discussion and Analysis of the Management and Section X Risks Faced by the Company and Countermeasures.

C&S Paper Co., Ltd. Semi-annual Report 2021

Investors are advised to pay attention to the relevant contents.

The Company plans not to distribute cash dividend, issue bonus share, or transfer capital reserve into share capital.

C&S Paper Co., Ltd. Semi-annual Report 2021

Section I Important Notice, Contents and Definitions .............................................................................................................................1 Section II Company Profile and Key Financial Indicators ......................................................................................................................6 Section III Discussion and Analysis of the Management .........................................................................................................................9 Section IV Corporate Governance ......................................................................................................................................................... 27 Section V Environmental and Social Responsibilities ........................................................................................................................... 31 Section VI Significant Events ................................................................................................................................................................ 40 Section VII Changes in Shareholding and Information of Shareholders ............................................................................................... 60 Section VIII Particulars of Preference Shares ........................................................................................................................................ 69 Section IX Corporate Bonds .................................................................................................................................................................. 70 Section X Financial Report .................................................................................................................................................................... 71

C&S Paper Co., Ltd. Semi-annual Report 2021

Documents Available for Inspection

The Semi-annual Report 2021 affixed with the signature of Mr. Liu Peng, the Company’s legal representative
Financial statements affixed with the signatures and stamps of Mr. Liu Peng, the legal representative of the Company, Mr. Dong Ye, person in charge of accounting, and Ms. Xu Xianjing, person in charge of accounting department of the Company
All original copies of the Company’s documents and the original drafts of the Company’s announcements as disclosed in the newspaper designated by the CSRC during the reporting period
Place for document inspection: Office of the Board of Directors

C&S Paper Co., Ltd. Semi-annual Report 2021

Definitions

Term		Definition
The Company, Company, C&S		C&S Paper Co., Ltd.
Zhongshun Group		Guangdong Zhongshun Paper Group Co., Ltd.
Chung Shun Co.		Chung Shun Co., a Hong Kong-based company
Zhongshan Trading		Zhongshan Zhongshun Trading Co., Ltd.
Zhong Shun International		Zhong Shun International Co., Ltd., a Hong Kong-based company
C&S Hong Kong		C&S Hong Kong Co., Ltd., a Hong Kong-based company
Beijing Trading		Beijing C&S Paper Co., Ltd.
Xiaogan Trading		Xiaogan C&S Trading Co., Ltd.
Chengdu Trading		Chengdu Zhongshun Paper Co., Ltd.
Hangzhou Trading		Hangzhou Jie Rou Trading Co., Ltd.
Shanghai Trading		Shanghai Huicong Paper Co., Ltd.
		C&S (Sichuan) Paper Co., Ltd., formerly known as Chengdu Tiantian
Sichuan C&S
		Paper Co., Ltd.

Jiangmen C&S		Jiangmen Zhongshun Paper Co., Ltd.
Zhejiang C&S		Zhejiang Zhongshun Paper Co., Ltd.
		C&S (Hubei) Paper Co., Ltd., formerly known as Hubei Zhongshun
Hubei C&S
		Hongchang Paper Co., Ltd.

Yunfu C&S		C&S (Yunfu) Paper Co., Ltd.
		Yunfu Hengtai Trading Co., Ltd., formerly known as C&S (Yunfu)
Yunfu Trading
		Trading Co., Ltd.

Tangshan C&S, Tangshan subsidiary		C&S Paper Co., Ltd. Tangshan Branch
		C&S (Zhongshan) Paper Co., Ltd., formerly known as Zhongshan Tongfu
Zhongshan Paper
		Trade Co., Ltd.

Macao C&S		C&S (Macao) Co., Ltd.
Dazhou C&S		C&S (Dazhou) Paper Co., Ltd.
Sun C&S		Sun Daily Necessities Co., Ltd.
Dolemi		Dolemi Sanitary Products Co., Ltd.
Jiangsu C&S		C&S (Jiangsu) Paper Co., Ltd.
Yunnan Dolemi		Yunnan Dolemi Trading Co., Ltd.
Luzhou Dolemi		Luzhou Dolemi Sanitary Products Co., Ltd.
Mianyang Dolemi		Mianyang Dolemi Sanitary Products Co., Ltd.
Mazars		Mazars CPA Limited (LLP)

C&S Paper Co., Ltd. Semi-annual Report 2021

Section II Company Profile and Key Financial Indicators

I. Company Profile

I. Company Profile
Stock name	C&S	Stock code	002511
Stock exchange on which the
	Shenzhen Stock Exchange
shares are listed

Chinese name of the Company	中顺洁柔纸业股份有限公司
Abbreviation of Chinese name of
	中顺洁柔
the Company (if any)

English name of the Company (if
	C&S Paper Co., Ltd.
any)

Abbreviation of English name of
	C&S
the company (if any)

Legal representative of the	Liu Peng
Company

II. Contact Persons and Contact Methods

	Sectary to the Board	Representative of securities affairs
Name	Zhang Haijun	Liang Yao
	No. 136 Caihong Avenue, West District,	No. 136 Caihong Avenue, West District,
Address
	Zhongshan City	Zhongshan City

Tel	0760-87883333	0760-87883333
Fax	0760-23886886	0760-23886886
Email	[email protected]	[email protected]

III. Other Information

1. Contact information of the Company

Whether there are changes in the Company’s registered address, office address and postal code, website, and email address during the reporting period

√ Applicable □ Not applicable

√ Applicable □ Not applicable
Registered address	No. 1 Longcheng Road, Dongsheng Town, Zhongshan City
Postal code of registered address	528414
Office address	No. 136 Caihong Avenue, West District, Zhongshan City
Postal code of office address	528401
Company website	https://www.zsjr.com/
Email	[email protected]
Disclosure date on the website on which the
temporary announcements are publicized (if	April 29, 2021
any)

C&S Paper Co., Ltd. Semi-annual Report 2021

Search index on the website on which the Announcement on Resolutions of the 4th Meeting of the Fifth Session of the temporary announcements are publicized (if Board of Directors, Articles of Association of the Company (April 2021); for any) details, please refer to http://www.cninfo.com.cn

2. Information disclosure and location for inspection of documents

Where there are changes in information disclosure and location for inspection of documents during the reporting

period

□ Applicable √ Not applicable

There are no changes in the name of the newspaper selected by the Company for information disclosure, website designated by CSRC for publicizing the semi-annual report, and the location for inspection of the semi-annual report during the reporting period. Please refer to the Annual Report 2020 for details.

IV. Main Accounting Data and Financial Indicators

Whether the Company needs to perform retrospective adjustment or restatement of accounting data for previous

years

□ Yes √ No

		Same period of previous	Changes over same period of
	Current period
		year	previous year

Operating income (RMB)	4,247,641,836.38	3,616,201,399.80	17.46%
Net profit attributable to shareholders of
	407,161,317.15	452,699,484.61	-10.06%
the listed company (RMB)

Net profit attributable to shareholders of
the listed company after deducting non-	398,988,234.69	446,535,737.96	-10.65%
recurring profit and loss (RMB)
Net cash flow from operating activities
	737,865,788.19	504,558,588.33	46.24%
(RMB)

Basic earnings per share (RMB/share)	0.3140	0.3519	-10.77%
Diluted earnings per share (RMB/share)	0.3109	0.3462	-10.20%
Weighted average return on net assets	7.98%	10.46%	-2.48%
			Changes over end of previous
	End of current period	End of previous year
			year

Total assets (RMB)	7,138,935,102.92	7,478,439,747.77	-4.54%
Net assets attributable to shareholders of
	4,851,858,577.42	5,042,146,076.42	-3.77%
the listed company (RMB)

C&S Paper Co., Ltd. Semi-annual Report 2021

V. Difference in Accounting Data under Domestic and International Accounting Standards

1. Net profit and net asset differences under International Financial Reporting Standards (IFRS) and Chinese Accounting Standards (CAS)

□ Applicable √ Not applicable

No such differences for the reporting period

2. Net profit and net asset differences under foreign accounting standards and Chinese Accounting Standards (CAS)

□ Applicable √ Not applicable

No such differences for the reporting period

VI. Non-recurring Items and Amounts

√ Applicable □ Not applicable

Unit: RMB

Item	Amount	Description
Profits/losses from the disposal of non-current asset (including	-887,044.27
the write-off that accrued for impairment of assets)
Governmental grants reckoned into current profits/losses (not	10,556,600.31
including grants enjoyed in quota or ration according to national
standards, which are closely relevant to the company’s business)
	358,473.15	Returns on principal-protected wealth management products at maturity and reverse repo of treasury bonds
Profits/losses from assets entrusted to others for investment or
management

Other non-operating income and expenses except for the	-187,907.30
aforementioned items
Less: Influence of income tax	1,667,039.43
Total	8,173,082.46	--

Reason shall be provided if the company defines non-recurring profit and loss items as defined or listed in the No.

1 Explanatory Announcement on Information Disclosure for Companies Offering their Securities to the Public—

Non-recurring Profit and Loss as recurring profit and loss items.

□ Applicable √ Not applicable

The Company did not define any non-recurring profit and loss items defined or listed in the No. 1 Explanatory

Announcement on Information Disclosure of Companies Offering Securities to the Public—Non-recurring Profit

and Loss as recurring profit and loss items during the reporting period.

C&S Paper Co., Ltd. Semi-annual Report 2021

Section III Discussion and Analysis of the Management

I. Principal Businesses of the Company during the Reporting Period

Mr. Deng Yingzhong, founder of the Company, initiated his entrepreneurial process in 1978. Starting from intensive paper processing, the Company has developed into a leading household paper enterprise integrating R&D, production and sales after forty-three years of striving. With an adherence to its corporate values of “products need brands, enterprises need brands, and people need brands”, the Company has extended its products from household paper to cross-category household daily necessities including cotton series products, sanitary wipes, baby diapers, etc.

Currently, the Company features three major brands, namely, Jie Rou, Sun, and Dolemi. Main products include paper rolls, coreless rolls, facial tissues, tissue handkerchiefs, wipes, personal care products, baby diapers, cotton tissues, etc. Product series involve Face series, Lotion series, Natural Wood series, Antibacterial Paper series, Jin Zun series, wipes, Sun series, Dolemi series, OKBEBE series, and Cotton Tissue series. Specifics are given in the following:

1. Household paper (Jie Rou brand + Sun brand)

Face Series: Face wettable facial tissue is a feature product of the Company. Through constant quality upgrading, the newly developed four-layer thick facial tissues remain pliable and thick even when they are wet. One piece of this facial tissue is as thick as two pieces of average tissues, which optimizes the products’ user experience and fashion sense. In 2020, in order to better reflect the brand’s image and high-end style, the Company incorporated oil painting elements into its packaging and launched Face oil painting series products, which is called the “artwork of paper tissues”.

Lotion Series: Lotion water retention facial tissues are characterized by the skin-friendly lotion and moisturizing factor. They feel soft and smooth, thanks to the water retention factors. This product is especially suitable for delicate skin and applicable to mothers and infants, people with nasal allergy, and people wearing makeup.

Natural Wood Series: The Company launched the first noble yellow tissues (with low whiteness), “Jie Rou Natural Wood Series” in 2017, based on the consumption concepts of health and safety. Its soft and pliable texture is attributable to 100% imported raw wood pulp. Quality of the whole series is superb.

Antibacterial Series: With the advent of the post-pandemic era in China, the Company introduced the antibacterial

C&S Paper Co., Ltd. Semi-annual Report 2021

series products in early 2021 in line with changes in consumption habits of consumers. The products contain antibacterial factors and have been proved with experiments to effectively reduce the growth of more than 99% of bacteria on paper tissues. They can effectively inhibit bacteria such as E. coli and staphylococcus aureus, thereby protecting the health of consumers.

Jin Zun Series: Made from 100% imported raw wood pulp, Jin Zun products are thick, pliable, and cost-effective. Wipes: Wipe products of the Company are diversified, including mother and baby wipes, disinfection wipes, personal care wipes, kitchen wipes, and pure water wipes, which can meet the needs of consumers in different scenarios.

Sun Series: The Company launched the new brand Sun in 2019 in conjunction with the 300,000-ton bamboo-pulppaper integration project in order to accelerate the coverage of high-, mid- and low-end household paper markets in China and satisfy consumption needs at different levels. This initiated the Company’s “dual brand” business strategy. Sun is positioned to be a highly cost-effective product that has good quality yet lower prices. It is the key to raise the market share of the Company in the future.

2. Personal care products (Dolemi brand)

Dolemi Series: In 2019, the Company launched a new personal care brand, Dolemi, to cater for upgrading consumption. The surface of Dolemi pads is made from natural cotton. The products feature two-way air circulation and are elastic, soft, and fit. Thanks to the good air circulation, consumers will feel at ease. They enable women pursuing better quality of life to experience “thin pads and get rid of side leakage”.

OKBEBE Series: This care brand for newborn babies was rolled out in early 2021. Products include baby diapers and pull-up pants. With medical level high standards, the products are skin-friendly, breathable, dry and easy to absorb. They are dedicated to providing babies with safer and more comfortable growth experience, having passed the surveillance on six product performance indicators including allergenic microbial inspection and production environment bacteria.

3. Quality health products

Cotton Tissue Series: In 2018, the Company stepped out of the household paper field and introduced the “Cotton Tissue“ products. The products feature 100% fresh cotton, complete physical processes, and unbleached. As being natural, healthy, soft, skin-friendly, and dry-wet dual use, they can be used for personal cleaning and care as cotton pads and face towels, especially by infants and women.

Medical surgical masks: In response to the government’s call, the Company quickly initiated medical mask production and rolled out medical surgical mask products. The products are characterized by “high efficiency

C&S Paper Co., Ltd. Semi-annual Report 2021

filtration, low breathing resistance, and comfortable wearing”, and have passed the EU CE and US FDA certifications. Third-party laboratory testing from US, EU and Japan proves the products to have reached the highest quality standards of their kind.

Other quality health products: In line with the Company’s strategic planning and market needs, the Company successively launched personalized products that are fit with consumer needs since 2020, including makeup removal wipes, feminine care wipes, alcohol disinfectant wipes, mouthwashes, disinfectant hand sanitizers, face wash towels, disposable sweat-absorbent wipes, insoles, etc. This enables the Company to form a diversified development pattern on the basis of pursuing high quality and individualization.

Currently, the competition in China’s household paper industry is still fierce and industry concentration is increasing. With strengthened awareness on the concept of healthy living, consumers pay increasing attention to brands. Product quality is still a prominent concern in the industry. Amid all these, the Company has become one of the representative brands of high-end household paper in the market through continuous brand building and quality assurance, and robust production capacity layout and channel expansion. It is ranked among the first echelon in the household paper industry and is well recognized by consumers and capital markets. In addition, with an adherence to the value concept of “Only Care About You”, the Company continues to tap consumer needs and constantly upgrades and optimizes products with leverage on its strong R&D and innovation capabilities. The Company is committed to providing consumers with products of better quality, more comfort, and more tailored to their individual needs. The Company aims to achieve national product coverage which is underpinned by continuously improved product reputation among consumes and strengthened and consolidated brand awareness.

II. Analysis of Core Competitiveness

1. Belonging to the first echelon of the domestic household paper industry

The Company is a top-performing enterprise in the first echelon of the domestic household paper industry. Its products are sold at home and abroad including Southeast Asia, the Middle East, Europe and United States.

2. Constantly optimized product structure

The Company boasts three major brands, namely, Jie Rou, Sun, and Dolemi. Main products include paper rolls, coreless rolls, facial tissues, tissue handkerchiefs, wipes, personal care products, baby diapers, cotton tissues, etc. The Company continuously optimizes its product structure and raises the sales proportion of high-end products, high-gross profit products and non-roll categories. In addition, it has strengthened the sales of major series like Face, Lotion, and Natural Wood, formulated distribution standards for each major channel, raised the market share

C&S Paper Co., Ltd. Semi-annual Report 2021

in each channel, and continuously improved the gross profit and profitability of products.

3. Stable and effective management team

The R&D, production, procurement, sales, quality control, and operation teams have successively introduced excellent professionals since 2014. At present, the Company boasts the most outstanding R&D, production and sales teams in the industry, and has gradually established the professional manager management system. Excellent and professional management teams have effectively reinforced and improved the Company’s new product R&D, product quality and marketing management. The management team of the Company has formulated long-term and strategic plans in line with actual situation of the Company, industry development level, and market demands. Moreover, the management team is capable of making reasonable decisions on operation management issues with relation to R&D, production, marketing, investment, and financing, and effectively implementing such decisions. The excellent management team fundamentally guarantees the Company’s competitiveness and sustainable development in the future.

4. Nationwide marketing network

The Company has been building and improving its marketing networks based on its keen and strategic insights and reasonable layout. The Company has enhanced its profitability by expanding its channels from a single dealer channel in 2015 to six channels at present, namely, GT (general trade channels), KA (key account channels), AFH (away from home channels), EC (e-commerce channels), RC (new retail channels), and SC (maternal and infant channels). Its current marketing network covers most of the prefecture-level (and county-level) cities. Products are directly sold to counties and then distributed to towns. This helps achieve segmented and flat market operation and expand the dealer network.

Furthermore, while ensuring the smooth operation of other channels, the Company has established a professional e-commerce operation team, devoted more resources to e-commerce platforms, built and improved the corresponding supply chain system, and intensified its routine operation management. At present, it has reached cooperation with renowned platforms such as Tmall, JD, and Pinduoduo. In addition, it has developed an AFH service team for AFH channels and customer bases to match the growing AFH market. Attributable to a robust sales network plus quality and diversified products, the Company is able to constantly consolidate its market basis, improve consumer experience, and enhance brand reputation, which can help achieve sustainable and stable growth in the future.

5. Nationwide layout of production bases

The Company has developed a production layout covering East China, South China, West China, North China,

C&S Paper Co., Ltd. Semi-annual Report 2021

and Central China, through its subsidiaries including Jiangmen C&S, Yunfu C&S, Sichuan C&S, Zhejiang C&S, Hubei C&S, and Tangshan Branch. Thanks to the nationwide layout of production bases, the Company has narrowed the distance to customers, reduced transportation costs, and enhanced transportation efficiency.

6. Product quality at an international level

The Company has always regarded product quality as its lifeline of survival and development ever since its incorporation. First-class quality derives from first-class raw materials. Raw materials of the Company have passed the ISO quality management system certification. Besides strict feed inspection procedures, it has introduced HACCP food hygiene and safety management system to control the hygiene and quality of products from the source. Moreover, its products have passed ISO9001 quality management system certification which is the strictest detecting system for product quality. The Company has observed internationally-advanced quality management system standards and utilized advanced processes, formulas, and control procedures in production to ensure each technical performance indicator.

7. Good R&D capabilities

The Company is equipped with a complete product development system and the subordinate R&D department boasts strong independent R&D capabilities and excellent product formula technologies. In recent years, the Company has continuously upgraded and optimized its products, in a bid to provide consumers with products of better quality, more comfort, and more aligned with their individual needs. Products of the Company have extended from household paper to cross-category household daily necessities including cotton series products, sanitary wipes, baby diapers, etc. The Company’s speed of bringing forth new products is at the forefront of the industry.

8. First-class production equipment

The Company drives development via technology and has introduced cutting-edge papermaking and processing equipment. Advanced technology and highly automatic equipment have strengthened the Company’s efficiency, further satisfied the ever-growing market demands, and served as an unstoppable driving force to development.

9. Outstanding environmental protection awareness and technology

Along with the deepening of industrialization, the concept of environmental protection has been deeply rooted among the people. The Company has adhered to the concept of “seeking green benefits and fulfilling corporate social responsibilities”, and utilized advanced environmental protection technologies to pursue its objective of environmental protection. Its waste water and gas emissions are superior to the national standards and industryleading.

C&S Paper Co., Ltd. Semi-annual Report 2021

III. Analysis of Principal Businesses

Please refer to relevant contents in “I. Principal Businesses of the Company during the Reporting Period”.

YoY changes in major financial data

Unit: RMB

		Same period of
	Current period		YoY changes	Reason of change
		previous year

Operating income	4,247,641,836.38	3,616,201,399.80	17.46%
	2,562,244,166.21	1,931,406,918.16		An increase of RMB630,837,248.05 or
				32.66% was recorded in the reporting
				period over the same period of 2020,
Operating cost			32.66%	mainly owing to 1) increase in operating
				income; and 2) adjusting transportation
				expenses of the selling expenses to
				operating cost as per the New Revenue
				Standards during the reporting period.
Selling expenses	915,478,651.72	848,071,082.60	7.95%
Administrative	165,200,078.38	185,701,854.01
			-11.04%
expenses

	-1,803,144.04	-1,022,002.23		A reduction of RMB781,141.81 or
				76.43% was witnessed in the reporting
Finance expenses			-76.43%	period compared with the same period of
				2020, mainly due to the increase in bank
				interest income during the reporting
				period..
Income tax	81,099,520.72	85,783,253.92
			-5.46%
expenses

R&D investment	97,414,812.32	90,860,828.24	7.21%
	737,865,788.19	504,558,588.33		Net cash flow from operating activities:
				This item recorded an increase of
Net cash flow				RMB233,307,199.86 or 46.24% in the
from operating			46.24%	reporting period compared with the same
activities				period of 2020, mainly due to the
				increase in sales revenue during the
				reporting period.
Net cash flow	-267,293,095.91	-241,861,919.70
from investing			-10.51%
activities
	-815,627,674.59	-45,815,658.83		Net cash flow from financing activities:
				This item recorded a decrease of
				RMB769,812,015.76 or 1680.24% in the
Net cash flow				reporting period compared with the same
from financing			-1680.24%	period of 2020, mainly due to the
activities				decrease in cash received from
				borrowings and the payment of
				repurchased shares during the reporting
				period.
Net increase in	-348,809,933.39	220,436,993.67
cash and cash			-258.24%
equivalents

C&S Paper Co., Ltd. Semi-annual Report 2021

Whether there are significant changes in the profit composition or source of profits of the Company during the reporting period

□ Applicable √ Not applicable

There were no significant changes in the profit composition or source of profits of the Company during the reporting period.

Composition of operating income

Unit: RMB

	Current period	Current period	Same period of previous year	Same period of previous year
		Proportion in		Proportion in	YoY changes
	Amount		Amount
		operating income		operating income

Total operating	4,247,641,836.38		3,616,201,399.80		17.46%
		100%		100%
income

By industry
Household paper	4,082,881,792.19	96.12%	3,533,490,254.91	97.71%	15.55%
Personal care	40,295,818.30	0.95%	67,214,587.03	1.86%	-40.05%
Others	124,464,225.89	2.93%	15,496,557.86	0.43%	703.17%
By product
Finished products	4,116,080,985.46	96.90%	3,595,014,915.99	99.41%	14.49%
Semi-finished
	7,096,625.03	0.17%	5,689,925.95	0.16%	24.72%
products

Others	124,464,225.89	2.93%	15,496,557.86	0.43%	703.17%
By region
Domestic	4,149,892,689.00	97.70%	3,522,252,149.36	97.40%	17.82%
Overseas	97,749,147.38	2.30%	93,949,250.44	2.60%	4.04%

Industries, products, or regions that accounted for over 10% of the Company’s operating income or operating

profit

√ Applicable □ Not applicable

Unit: RMB

						YoY changes of
			Gross profit	YoY changes of	YoY changes of
	Operating income	Operating cost				operating gross
			margin	operating income	operating cost
						profit margin

By industry
Household paper	4,082,881,792.19	2,438,970,899.44	40.26%	15.55%	28.26%	-5.93%
By product
Finished products	4,116,080,985.46	2,456,914,117.77	40.31%	14.49%	28.40%	-6.46%

C&S Paper Co., Ltd. Semi-annual Report 2021

By region
Domestic	4,149,892,689.00	2,505,260,432.09	39.63%	17.82%	33.05%	-6.91%

Where the statistical standards for the Company’s principal business data were adjusted in the reporting period,

whether principal business data of the Company in the recent period were adjusted as per statistical standards at

the end of the reporting period

□ Applicable √ Not applicable

Reasons for YoY changes of relevant data over 30%

□ Applicable √ Not applicable

IV. Analysis of Non-principal Businesses

√ Applicable □ Not applicable

Unit: RMB

		Proportion in total
	Amount		Explanation of reason	Is it consistently applied?
		profit

			Returns on principal-
			protected wealth
Investment income	358,473.15	0.07%	management products at	No
			maturity and reverse repo of
			treasury bonds
			Provision for impairment of
Asset impairment	-2,753,828.11	-0.56%		No
			inventories

			Government grants, income
Non-operating
	1,708,366.54	0.35%	from fine and compensation,	No
income
			and others

Non-operating			External donations and
	3,638,183.86	0.75%		No
expense			others

V. Analysis of Assets and Liabilities

1. Significant changes in the composition of assets

Unit: RMB

	End of current period	End of current period	End of previous year	End of previous year
		Proportion			Proportio
				Proportion in		Explanation of significant changes
	Amount	in total	Amount		n changes
				total assets
		assets

	788,702,136.99		1,125,196,199. 56
Monetary funds		11.05%		15.05%	-4.00%

Accounts	933,313,137.98		1,051,423,939. 59
		13.07%		14.06%	-0.99%
receivable

			1,661,274,495. 32
Inventory	1,624,309,444.82	22.75%		22.21%	0.54%

C&S Paper Co., Ltd. Semi-annual Report 2021

Investment	33,856,923.84		34,575,365.94
		0.47%		0.46%	0.01%
property

	3,182,792,165.52		2,792,587,302. 21
Fixed assets		44.58%		37.34%	7.24%

	55,534,528.69		275,904,617.95			Construction work in progress: This
						item recorded a decrease of
						RMB220,370,089.26 or 79.87% in the
Construction						reporting period compared with the end
work in		0.78%		3.69%	-2.91%	of 2020, mainly owing to the fact that
progress						certain construction work in progress
						reached the usable state and were
						thereby transferred to fixed assets
						during the reporting period.
	11,151,372.57					Right-of-use assets: This item recorded
						an increase of RMB11,151,372.57 or
						100.00% in the reporting period
Right-of-use		0.16%			0.16%	compared with the end of 2020, mainly
assets						owing to the fact that leased assets
						were confirmed as right-of-use assets
						upon the adoption of the new lease
						standards during the reporting period.
			142,942,941.34			Short-term borrowing: This item
						recorded a decrease of
Short-term						RMB142,942,941.34 or 100.00% in the
				1.91%	-1.91%	reporting period compared with the end
borrowing
						of 2020, mainly owing to the decrease
						in short-term loans from banks during
						the reporting period.
Contract	103,501,369.49		137,333,617.40
		1.45%		1.84%	-0.39%
liabilities

	5,526,106.56					Lease liabilities: This item recorded an
						increase of RMB5,526,106.56 or
						100.00% in the reporting period
Lease liabilities		0.08%			0.08%	compared with the end of 2020, mainly
						owing to the confirmation of lease
						liabilities upon the adoption of the new
						lease standards during the reporting
						period.

2. Main overseas assets

□ Applicable √ Not applicable

3. Assets and liabilities measured at fair value

□ Applicable √ Not applicable

4. Restriction of asset rights as at the end of the reporting period

Item	Book value at the end of theperiod (RMB)	Reason for restriction
Monetaryfunds	87,477,934.6	6 Securitydeposits for issuingletter of credit and

C&S Paper Co., Ltd. Semi-annual Report 2021

		notes
Total	87,477,934.66

VI. Analysis of Investment

1. Overview

√ Applicable □ Not applicable

Investment amount during the reporting	Investment amount of previous year
		Changes
period (RMB)	(RMB)

328,193,755.53	401,314,982.57	-18.22%

2. Major equity investment during the reporting period

□ Applicable √ Not applicable

3. Major non-equity investment during the reporting period

□ Applicable √ Not applicable

4. Financial asset investment

(1) Security investment

□ Applicable √ Not applicable

The Company did not invest in securities during the reporting period.

(2) Derivative investment

□ Applicable √ Not applicable

The Company did not invest in derivatives during the reporting period.

VII. Major Asset and Equity Sales

1. Sales of major assets

□ Applicable √ Not applicable

The Company did not sell major assets during the reporting period.

C&S Paper Co., Ltd. Semi-annual Report 2021

2. Sales of major equity

□ Applicable √ Not applicable

VIII. Analysis of Main Holding and Joint-stock Companies

√ Applicable □ Not applicable

Description of main subsidiaries and of joint-stock companies which have influence on the Company’s net profit by over 10%

C&S Paper Co., Ltd. Semi-annual Report 2021

Unit: RMB

Company
	Company type	Principal businesses	Registered capital	Total assets	Net assets	Operating income	Operating profit	Net profit
name

		R&D, production, and sales (including
		online sales): household paper, maternal
		and infant products, cosmetics, wipes,
		non-woven products, daily necessities,
		and cleaning supplies; sales (including
Jiangmen		online sales) of Class I and II medical
	Subsidiary	devices. (The above items do not involve	RMB345,985,031	1,778,554,306.27	1,452,371,161.76	747,241,439.87	115,039,007.95	97,876,239.26
C&S
		special management measures for the
		foreign access). (For items that must be
		approved in accordance with the law, the
		company may carry out business
		operations upon approval by competent
		departments.)
		R&D, production, wholesale, retail and
		online sales: household paper, sanitary
		products, maternal and infant products,
		daily necessities, cosmetics, medical
		devices, sanitary materials, non-woven
		fabrics and products, polymer materials
		and products, daily sundries, and
		disinfection supplies (excluding
		hazardous chemicals); wholesale, retail
Yunfu C&S	Subsidiary	and online sales: food; import and export	RMB650 million	2,126,862,446.83	1,244,184,883.95	1,460,190,589.00	157,532,303.17	133,746,121.37
		of goods and technologies (excluding the

		import and export of goods and
		technologies prohibited by the State or
		involving administrative approval);
		warehousing services (limited to
		warehouses qualified in fire protection
		without hazardous chemicals). (For items
		that must be approved in accordance with
		the law, the company may carry out
		business operations upon approval by

C&S Paper Co., Ltd. Semi-annual Report 2021

		competent departments.)
		Licensed items: production of sanitary
		products and disposable medical supplies;
		import and export of goods (for items that
		must be approved in accordance with the
		law, the company may carry out business
		operations upon approval by competent
		departments, and the specific business
		items are subject to the approval
		document or the permit issued by relevant
		department). General items: sales of
		sanitary products and disposable medical
		supplies; sales of personal hygiene
		products; sales of daily necessities;
Sichuan C&S	Subsidiary	manufacture of paper products; sales of	RMB100 million	1,138,234,120.55	834,215,732.60	964,018,416.58	93,193,559.94	78,591,624.35
		paper products; manufacture of paper;
		manufacture of daily chemical products;
		sales of daily chemical products; sales of
		Class II medical devices; sales of Class I
		medical devices; manufacture of
		industrial textile products; sales of
		industrial textile products; manufacture of
		maternal and infant products; sales of
		maternal and infant products. (The
		company may carry out business
		operations independently according to the
		law based on the business license, except
		for items that must be licensed according
		to the law.)
		Licensed items: production of sanitary
		products and disposable medical supplies;
		production of cosmetics (for items that
		must be approved in accordance with the
Hubei C&S	Subsidiary	law, companies may carry out business	RMB200 million	1,689,435,694.57	444,177,395.36	742,844,886.22	91,690,308.10	69,303,869.68
		operations upon approval by relevant

		departments, and the specific business
		items are subject to the approval
		document or the permit issued by
		competent department). General items:

C&S Paper Co., Ltd. Semi-annual Report 2021

==> picture [113 x 276] intentionally omitted <==

==> picture [425 x 276] intentionally omitted <==

sales of sanitary products and disposable medical supplies; retail of cosmetics; wholesale of cosmetics; manufacture of paper; sales of personal hygiene products; sales of knitwear; manufacture of maternal and infant products; sales of maternal and infant products; sales of paper products; manufacture of paper products; sales of daily necessities; sales of daily chemical products; sales of disinfectants (excluding hazardous chemicals); Internet sales (excluding the sales of commodities requiring a permit); sales of Class I medical devices; sales of Class II medical devices; import and export of goods and technologies (excluding the import and export of goods and technologies prohibited by the State or involving administrative approval). (For items that must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments.)

C&S Paper Co., Ltd. Semi-annual Report 2021

Acquisition and disposal of subsidiaries during the reporting period

□ Applicable √ Not applicable

Description of main holding and joint-stock companies

None

IX. Structured Entities Controlled by the Company

□ Applicable √ Not applicable

X. Risks Faced by the Company and Countermeasures

1. Risk of great fluctuations in pulp prices

Pulp is an international bulk raw material and its price is obviously affected by the world economic cycle. Pulp is the primary raw material of the Company’s production, accounting for 40%-60% of the total production costs. Therefore, substantial fluctuations in pulp prices pose a risk to the Company.

The Company is equipped with a professional procurement team which, on the premise of ensuring normal production inventory, adjusts the purchase rhythm by professionally evaluating the future trend of pump boards and coordinating the market conditions of international pulp prices. The Company has cemented long-term supply contracts with pulp suppliers that have large production scale, abundant forest resources and advanced production technologies to ensure stable raw material procurement. It has established a global procurement network with purchases in Europe, North America, South America, etc.

2. Risk of exchange rate

The import of machinery equipment and pulp and the export of products to overseas market of the Company are mainly settled in USD, HKD, and EUR. Since exchange rates fluctuate under the impact of the international economic situation, the Company faces exchange rate risks.

The Company pays close attention to changes in the foreign exchange market on a daily basis and hedges against exchange losses brought by RMB depreciation or two-way fluctuations by adjusting the structure of foreign currency assets and liabilities and reducing overall foreign currency liabilities. In addition, the Company started to adopt the spot selling rate accounting for foreign currency transactions since 2015 in accordance with its actual needs and in compliance with foreign exchange requirements. In this way, the Company may choose to buy foreign currency and pay for the goods at a rate favorable to the Company at an appropriate time.

C&S Paper Co., Ltd. Semi-annual Report 2021

Furthermore, the Company hedges against and avoids exchange rate risks via centralized management of foreign exchange funds, purchase payment hedging, etc. based on changes in the foreign exchange market and actual development of the Company. With regard to exchange rate risk exposure, the Company also uses hedging and other financial tools to conduct reasonable risk management.

3. Risk of regional market competition

Household paper is a vast market in China in terms of both geography and market space. Given the low unit value, transportation expenses taking up a large part of the sales price, and limitations of the transportation radius, the main competition in the household paper industry lies in regional markets. High-end, mid-end, and low-end products compete in regional markets, with the influence of spending power and consumption habit. Judging from the development trend of the industry, mid- and high-end household paper of national brands has more competitive edge. However, at present, some regional brands have an advantage in some regional markets. Compared with overseas counterparts, China’s household paper industry requires continued integration. The Company embraces production bases and a sales network across the country and offers mid- and high-end products under national brands. Nevertheless, it is inescapable from the risk of regional market competition.

After years of development, the Company has become one of the leading companies in the domestic household paper industry. It has built a marketing network covering most prefecture (county) level cities and a production base with national presence. As a result, transportation costs can be effectively reduced and transportation efficiency effectively improved by shorting the distance with consumers. As the Company continues to deepen and expand sales channels, it will gradually cover untapped outlets. In the future, in response to market competition, the Company will strengthen channel sinking, increase market penetration, further expand its scale, and further improve its overall market competitiveness and shares.

Risk of industrial policies

Stricter requirements have been raised for the papermaking industry in the aspects of scale, technology, equipment, and environmental protection, as multiple industry plans and supporting policies have been successively issued by relevant departments, including the Papermaking Industry Development Policy , the Notice on the Management of Elevated Source Pollution Discharge Permits in Thermal Power and Papermaking Industries and Pilot Cities of Beijing-Tianjin-Hebei Region , and the Opinions of China Paper Association on “Thirteenth Five-year” Development Plan of the Papermaking Industry . Particularly, a number of measures have been introduced through environmental protection policies to drive the all-round, coordinated, and sustainable development of the household paper industry, including 1) optimizing the industrial distribution to reasonably allocate resources and

C&S Paper Co., Ltd. Semi-annual Report 2021

promoting clean production to preserve the ecological environment; 2) pushing energy conservation and emission reduction to shut down outdated production facilities, and adjusting product structure and improving product quality; 3) developing resource-saving models to advocate green consumption; and 4) optimizing enterprise structure and driving M&A and restructuring. These policies are designated to strengthen household paper industry concentration, close backward production facilities, and optimize resource allocation. The Company, as an enterprise in the first echelon of the domestic household paper industry, is underpinned by national policies related to the sustainable development of the household paper industry. Precisely because of this, industrial policy adjustment, if any, will impact the production and operations of the Company to some extent.

In the face of increasing stringent environmental protection policies, as a responsible domestic enterprise in the household paper industry, the Company and its subsidiaries strictly abide by environmental protection laws and regulations of the state and local governments. Production bases are equipped with state-of-the-art papermaking equipment, processing equipment and environmental protection treatment equipment and facilities, and adopt advanced environmental protection technologies. With continuous capital and technological inputs and improvement in pollution control of the production process, the Company strives to reduce environmental pollution and ensure green production. The Company will continue to optimize production efficiency in response to requirements of national industrial policies.

5. Risk of safe production

Most of the materials involved in the household paper industry are flammable, including the main raw material of pulp, the main packing materials of plastic-film packing bags and cartons, the semi-finished product of body paper, and finished products. Due to the characteristics of low unit value and large market consumption, household paper manufacturers have to keep a mass of pulp, packing materials, and semi-finished and finished products from the entry of raw materials into the plant to the delivery of products to the market. Thus, fire can cause enormous losses to such manufacturers. In addition, a large number of production lines have been put into use, which may pose certain occupational health hazard and cause harm to the occupational health of employees. Even though the overall safe production risk of the Company is controllable, it still faces certain safe production risks.

In view of this, the Company has formulated strict fire management regulations for raw materials and semifinished and finished products, established a full-time safety management department, equipped adequate fire protection equipment in production areas, and bought full insurance for risky properties. As such, the Company’s fire safety risk is low.

In response to possible occupational health hazards, the Company, at the equipment design and procurement

C&S Paper Co., Ltd. Semi-annual Report 2021

stages, requires suppliers to carry out intrinsic safety design and fulfill the protection measures during the installation process. At the same time, the Company has passed the ISO45001 occupational health and safety (OHS) management system and continues to maintain its effective operations to reduce the occupational health and safety risks of employees.

6. Risk of logistics transportation

The spread of the COVID-19 pandemic in 2020 has hindered domestic and foreign logistics transportation by sea and land to varying degrees, affecting both the Company’s procurement and sales and upstream suppliers and downstream dealers. In other words, the Company has suffered from multiple dimensions. Though impacts of the pandemic are phased and temporary, risks are unavoidable for the Company as being at the mid- and downstream of the household paper industry chain.

The Company has quickly formulated response strategies during the pandemic and actively coordinated supply chain allocation. In terms of supply, the Company flexibly adjusts supply area based on the optimal principle to guarantee adequate goods supply to customers. In terms of logistics, the Company implements integrated management for logistics and warehouses as well as production and sales under the premise of well taking safety precautions. Personnel in all positions are asked to stick to their posts and maintain close communication with sales to assure smooth logistics to the greatest extent.

C&S Paper Co., Ltd. Semi-annual Report 2021

Section IV Corporate Governance

I. Annual General Meeting and Extraordinary General Meetings Held during the Reporting Period

1. Shareholder meetings during the reporting period

		Ratio of investor
Session of meeting	Type		Date of convening	Date of disclosure	Resolutions of the meeting
		participation

					Announcement on
					Resolutions of 2021 First
					Extraordinary General
					Meeting of Shareholders
2021 First	Extraordinary				(Announcement No.: 2021-
Extraordinary	general meeting	53.68%	January 21, 2021	January 22, 2021	18). See_Securities Times_,
General Meeting	of shareholders				Securities Daily,China
					_Securities Journal_and
					CNINFO
					(www.cninfo.com.cn) for
					details.
					Announcement on
					Resolutions of 2021 Second
					Extraordinary General
					Meeting of Shareholders
2021 Second	Extraordinary				(Announcement No.: 2021-
Extraordinary	general meeting	54.85%	January 29, 2021	January 30, 2021	26). See_Securities Times_,
General Meeting	of shareholders				Securities Daily,China
					_Securities Journal_and
					CNINFO
					(www.cninfo.com.cn) for
					details.
					Announcement on
					Resolutions of 2021 Third
					Extraordinary General
					Meeting of Shareholders
2021 Third	Extraordinary				(Announcement No.: 2021-
Extraordinary	general meeting	54.72%	April 07, 2021	April 08, 2021	49). See_Securities Times_,
General Meeting	of shareholders				Securities Daily,China
					_Securities Journal_and
					CNINFO
					(www.cninfo.com.cn) for
					details.
					Announcement on
					Resolutions of 2020 Annual
					General Meeting of
2020 Annual General	Annual general				Shareholders
Meeting of		54.78%	May 19, 2021	May 20, 2021	(Announcement No.: 2021-
	meeting
Shareholders					72). See_Securities Times_,

					Securities Daily,China
					_Securities Journal_and
					CNINFO

C&S Paper Co., Ltd. Semi-annual Report 2021

					(www.cninfo.com.cn) for
					details.
					Announcement on
					Resolutions of 2021 Fourth
					Extraordinary General
					Meeting of Shareholders
2021 Fourth	Extraordinary				(Announcement No.: 2021-
Extraordinary	general meeting	57.22%	June 07, 2021	June 08, 2021	89). See_Securities Times_,
General Meeting	of shareholders				Securities Daily,China
					_Securities Journal_and
					CNINFO
					(www.cninfo.com.cn) for
					details.

2. Extraordinary general meetings of shareholders proposed to be convened by preferred shareholders whose voting rights were resumed

□ Applicable √ Not applicable

II. Changes in Directors, Supervisors and Senior Management of the Company

√ Applicable □ Not applicable

Name	Position	Type	Date	Reason
		Resigned upon
Zeng Yi	Director	expiry of term of	January 21, 2021	Expiry of term of office
		office
		Resigned upon
	Independent
Huang Hongyan		expiry of term of	January 21, 2021	Expiry of term of office
	Director
		office

		Resigned upon
	Independent
Ge Guangrui		expiry of term of	January 21, 2021	Expiry of term of office
	Director
		office

	Independent
He Guoquan		Elected	January 21, 2021	Elected upon the change of board of directors
	Director

	Independent
Liu Die		Elected	January 21, 2021	Elected upon the change of board of directors
	Director

Yue Yong	Director	Resigned	March 18, 2021	Voluntary resign
Deng Guanbiao	President	Resigned	March 19, 2021	Voluntary resign
Liu Peng	President	Appointed	March 22, 2021	Appointed by the board of directors
Deng Yingzhong	Chairman	Resigned	April 09, 2021	Voluntary resign
Liu Peng	Chairman	Elected	April 12, 2021	Elected by the board of directors
Li Zhaojin	Vice President	Appointed	April 12, 2021	Appointed by the board of directors
Deng Wenxi	Vice President	Appointed	April 27, 2021	Appointed by the board of directors
	Director, Joint
Dai Zhenji		Resigned	April 28, 2021	Voluntary resign
	President

Li Youquan	Supervisor	Resigned	July 12, 2021	Voluntary resign
Zhang Yang	Vice President	Appointed	July 12, 2021	Appointed by the board of directors
Zhou Qichao	Board Secretary,	Resigned	July 29, 2021	Voluntary resign

C&S Paper Co., Ltd. Semi-annual Report 2021

	Vice President
	Vice President,
Zhang Haijun		Appointed	August 23,2021	Appointed by the board of directors
	Board Secretary

III. Profit Distribution and Conversion of Capital Reserve to Share Capital during the Reporting Period

□ Applicable √ Not applicable

The Company plans not to distribute cash dividend, issue bonus share, or transfer capital reserve into share capital for the half year.

IV. Implementation of the Stock Incentive Plan, Employee Stock Ownership Plan, and Other Employee Incentives of the Company

√ Applicable □ Not applicable

1. Implementation of the Phase II stock incentive plan

On May 22, 2021, the Company convened the 5th meeting of the fifth session of the Board of Directors and the 3rd meeting of the fifth session of the Board of Supervisors, which considered and approved the Proposal on Achieving the Unlock Conditions of the Second Unlock Period for Restricted Stocks Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan . There were 499 holders of restricted stocks meeting the unlock conditions, and the number of stocks that could be unlocked was 4,809,045. The unlock date of these restricted stocks was June 30, 2021. The above meetings also reviewed and approved the P roposal on the Repurchase and Deregistration of Partial Restricted Stocks Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan . The Board of Directors of the Company approved to repurchase and deregister a total of 2,021,305 restricted shares that had been granted but not unlocked. In addition, the aforesaid meetings also deliberated and approved the Proposal on Achieving the Exercise Conditions of the Second Exercise Period for Stock Options Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan . There were 2,274 holders of stock options meeting the exercise conditions, and the number of options that could be exercised was 2,948,559. The Proposal on the Repurchase and Deregistration of Partial Stock Options Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan was also considered and approved. The Board agreed to deregister 1,294,091 options that had been granted but not exercised.

On May 28, 2021, the Company held the 6th meeting of the fifth session of the Board of Directors and the 4th

C&S Paper Co., Ltd. Semi-annual Report 2021

meeting of the fifth session of the Board of Supervisors, which reviewed and approved the Proposal on Adjusting the Exercise Price of Stock Options under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan . Pursuant to the Company’s profit distribution plan in 2020 and relevant provisions of the 2018 Stock Option and Restricted Stock Incentive Plan (Draft) , the Company adjusted the exercise price of first-granted stock options from RMB8.572/share to RMB8.472/share, and adjusted the exercise price of reserved stock options from RMB13.965/share to RMB13.865/share.

On July 6, 2021, the cancellation procedures for 1,294,091 first-granted stock options that had been granted but not exercised were completed at the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited.

Please continue to pay attention to the Company’s information disclosure for subsequent implementation progress or changes.

2. Implementation of the Phase II employee stock ownership plan

As of January 5, 2021, all stocks held under the Company’s Phase II Employee Stock Ownership Plan, i.e. 11,709,583 shares, had been sold out. As per relevant provisions of the Phase II Employee Stock Ownership Plan, the implementation of the Plan is completed and thus the Plan is terminated.

3. Implementation of the Phase III employee stock ownership plan

On May 22, 2021, the Company held the 5th meeting of the fifth session of the Board of Directors and the 3rd meeting of the fifth session of the Board of Supervisors, which considered and approved the Proposal on Phase III Employee Stock Ownership Plan (Draft) and Its Summary . In order to improve employee cohesion and corporate competitiveness and ensure the attainment of the Company’s future development strategies and business goals, the Company plans to roll out Phase III Employee Stock Ownership Plan; preferred shares and deferred shares are set at a leverage ratio of 1:1, with a cap of 400 million shares and 200 participants.

On June 7, 2021, the Company convened the 2021 Fourth Extraordinary General Meeting, which considered and approved proposals relevant to Phase III Employee Stock Ownership Plan. In order to ensure the Plan’s smooth implementation, the shareholders’ meeting authorized the Board of Directors to fully handle matters relevant to the Plan.

Please continue to pay attention to the Company’s information disclosure for subsequent implementation progress or changes.

C&S Paper Co., Ltd. Semi-annual Report 2021

Section V Environmental and Social Responsibilities

I. Main Environmental Protection Issues

Whether the listed company and its subsidiaries are the key pollution discharge units published by the

environmental protection department

√ Yes □ No

	Main
						Ilt
Name of	pollutants	Ways of	Number of	Distribution	Concentrati	mpemene d pollutant	Total	Total	Excessive
company or	and		discharge	of discharge	on of			approved
		discharge				discharge	discharge		discharge
subsidiary	particular		outlets	outlets	discharge			discharge
	pollutants					standards

		After
		treatment, it
Jiangmen		is		Centralized
Zhongshun	Waste water	discharged	1	processing	80mg/L	200mg/L	158.95t	335.6 t/a	None
Paper Co.,	- COD	to the		facilities in
Ltd.		sewage		the factory
		treatment
		plant
		After
		treatment, it
Jiangmen	Waste water	is		Centralized
Zhongshun	- Ammonia	discharged	1	processing	1.76mg/L	8mg/L	3.497t	13.4 t/a	None
Paper Co.		to the		facilities in
, Ltd.	nitrogen	sewage		the factory
		treatment
		plant
				Production
				waste water
		After		discharge
				(DW001)
		treatment, it
				flows
		enters the
C&S		water		through the hl it
(Sichuan)	Waste water	purification	1	canne no the main	48mg/L	80mg/L	19.6168t	96 t/a	None
Paper Co.,	- COD	station
Ltd.		through		outlet DW002
		urban		(confluent
		sewage
				with
		pipeline
				domestic
				waste
				water)
				Production
		After		waste water
		treatment, it		discharge
		enters the		(DW001)
C&S	Waste water	water		flows
(Sichuan)	- Ammonia	purification	1	through the	0.203mg/L	8mg/L	0.083t	9.6 t/a	None
Paper Co.,		station		channel into
Ltd.	nitrogen	through		the main
		urban		outlet
		sewage		DW002
		pipeline		(confluent
				with

C&S Paper Co., Ltd. Semi-annual Report 2021

				domestic
				waste
				water)
				Three
				chimneys	1# boiler
C&S	Waste gas -	Discharge		(2# boiler is	2.5 mg/m³
(Sichuan)	PM	directly	3	the standby	2# boiler 0	20 mg/Nm3	0.156t	/	None
Paper Co.,	(particulate	through the		boiler,	mg/m³ 3#
Ltd.	matter)	flue		monitoring	boiler 2.7
				when being	mg/m³
				used)
				Three
				chimneys	1# boiler 27
C&S	Waste as -	Discharge		(2# boiler is	mg/m³
(Sichuan)	g Nitrogen	directly	3	the standby	2# boiler 0	150	1.8886t	31.35 t/a	None
Paper Co.,		through the		boiler,	mg/m³ 3#	mg/Nm3
Ltd.	oxide	flue		monitoring	boiler 29
				when being	mg/m³
				used)
				Three
				chimneys
C&S	Waste gas -	Discharge		(2# boiler is
(Sichuan)	Sulfur	directly	3	the standby	0	50 mg/Nm3	0	/	None
Paper Co.		through the		boiler
, Ltd.	dioxide	flue		, monitoring
				when being
				used)
		After
		treatment, it
		is
		discharged
Zhejiang		to Jiaxing		Centralized
Zhongshun	Waste water	Industrial	1	processing	37.2mg/L	500mg/L	7.7875t	139.7 t/a	None
Paper Co.,	- COD	Sewage		facilities in
Ltd.		Treatment		the factory
		Plant
		through
		municipal
		pipe
		After
		treatment, it
		is
		discharged
Zhejiang	Waste water	to Jiaxing		Centralized
Zhongshun	- Ammonia	Industrial	1	processing	0.4529mg/L	35mg/L	0.1t	9.78 t/a	None
Paper Co.		Sewage		facilities in
, Ltd.	nitrogen	Treatment		the factory
		Plant
		through
		municipal
		pipe
		After		After
		treatment, it		centralized
		is		processing
C&S		discharged t Bi		facilities in th ft
(Hubei)	Waste water	o quan Sewage	1	e acory, it is	109mg/L	400mg/L	45.25t	152.25 t/a	None
Paper Co.,	- COD
Ltd.		Treatment Plant		discharged to Biquan
		through		Sewage
		municipal		Treatment
		pipe		Plant
C&S	Waste water	After		After
			1		6.913mg/L	30mg/L	4.52t	15.25 t/a	None
(Hubei)	- Ammonia	treatment,it		centralized

C&S Paper Co., Ltd. Semi-annual Report 2021

Paper Co.,	nitrogen	is		processing
Ltd.		discharged		facilities in
		to Biquan		the factory,
		Sewage		it is
		Treatment		discharged
		Plant		to Biquan
		through		Sewage
		municipal		Treatment
		pipe		Plant
		Dedusting
		by bag
C&S	Waste gas -	filter, dlfii
(Hubei)	PM	esuurzat on by	1	One	13.1	30 mg/Nm3	6.95t	28.63 t/a	None
Paper Co.,	(particulate			chimney	mg/Nm3
Ltd.	matter)	limestone- gypsum and
		denitration
		by SNCR
	W	Dedusting
		by bag
C&S		filter, dlfii
(Hubei)	aste gas - Sulfur	esuurzat on by	1	One	58 mg/Nm3	200	33.79t	203.87 t/a	None
Paper Co.,				chimney		mg/Nm3
Ltd.	dioxide	limestone- gypsum and
		denitration
		by SNCR
	W	Dedusting
		by bag
C&S		filter, dlfii
(Hubei)	aste gas - Nitrogen id	esuurzat on by	1	One	109	200	52.26t	239.85 t/a	None
Paper Co.,				chimney	mg/Nm3	mg/Nm3
Ltd.	oxe	limestone- gypsum and
		denitration
		by SNCR
C&S				Sewage
(Yunfu)	Waste water	Continuous	1	treatment	32.16mg/L	80mg/L	35.605t	197.1 t/a	None
Paper Co.,	- COD	discharge		station in
Ltd.				the factory
C&S				Sewage
	Waste water
(Yunfu)	- Ammonia	Continuous	1	treatment	1.98mg/L	8mg/L	2.185t	19.76 t/a	None
Paper Co.		discharge		station in
, Ltd.	nitrogen			the factory

		After being
		treated by
		the plant
		sewage		The main
C&S Paper		treatment tti it i		outlet of the
Co., Ltd.	Waste water	saon, s discharged	1	zone (Lvyuan	29.19mg/L	50mg/L	3.76t	16.5 t/a	None
Tangshan	- COD
Branch		to the Lvyuan		Sewage Treatment
		Sewage		Plant)
		Treatment
		Plant in the
		zone
		After being		The main
C&S Paper		treated by		outlet of the
	Waste water	the plant		zone
Co., Ltd.	- Ammonia	sewage	1	(Lvyuan	0.576mg/L	5mg/L	0.078t	1.65 t/a	None
Tanshan
g Branch	nitrogen	treatment		Sewage
		station, it is		Treatment
		discharged		Plant)

C&S Paper Co., Ltd. Semi-annual Report 2021

		to the
		Lvyuan
		Sewage
		Treatment
		Plant in the
		zone
C&S Paper	Waste gas -	Discharge
Co., Ltd.	PM	directly	1	One	2.75	5 mg/Nm3	0.22t	2.46 t/a	None
Tangshan	(particulate	through the		chimney	mg/Nm3
Branch	matter)	flue
C&S Paper		Discharge
	Waste as -
Co., Ltd.	g Nitrogen	directly	1	One	19.22	30 mg/Nm3	0.705t	18.46 t/a	None
Tangshan		through the		chimney	mg/Nm3
Branch	oxide	flue

C&S Paper		Discharge
	Waste as -
Co., Ltd.	g Sulfur	directly	1	One	ND (not	10 mg/Nm3	0	6.15 t/a	None
Tangshan		through the		chimney	detected)
Branch	dioxide	flue

Construction and operation of pollution prevention and control facilities

(1) Compliance obligation fulfillment: The Company and its subsidiaries strictly abide by national and local environmental laws and regulations; all new projects strictly implement the environmental impact assessment system and “three simultaneous” system; all production activities strictly comply with the Environmental Protection Law of the People’s Republic of China , the Law of the People’s Republic of China on the Prevention and Control of Water Pollution , the Law of the People’s Republic of China on the Prevention and Control of Atmospheric Pollution , the Law of the People’s Republic of China on the Prevention and Control of Environmental Pollution by Solid Waste and the Action Plan for Prevention and Control of Water Pollution , and ensure that all pollutant treatment and discharge are in line with the requirements of laws and regulations.

(2) Configuration and operation of water treatment equipment and facilities: Each subsidiary has a complete set of environmental protection treatment equipment and facilities. The main sewage treatment processes are anaerobic, aerobic and subsequent deep treatment processes, which can achieve the discharge standards of various sewage indicators. In addition, each subsidiary is equipped with a recycling water system, in which the reclaimed water that meets the usage standard is used for re-production to reduce the discharge of sewage as far as possible. The sewage of Jiangmen, Zhejiang, Hubei and Tangshan companies is discharged after centralized treatment in the company and treated by the local sewage treatment plants. After centralized treatment in the company, the sewage of Sichuan Company enters water purification station through urban sewage pipeline; the sewage of Yunfu Company, after treated by the company’s sewage treatment station and reaching the standard, is discharged in an organized manner.

C&S Paper Co., Ltd. Semi-annual Report 2021

(3) Online monitoring and operation of water treatment facilities: Five subsidiaries in Yunfu, Sichuan, Zhejiang, Hubei and Tangshan have all installed online sewage monitoring facilities, which are directly supervised by local environmental protection bureau. For Jiangmen Company, after the centralized treatment within the company, the sewage is discharged to the sewage plant of the local paper industry base; there is no other sewage outlet and no online monitoring facilities; third-party agencies have been invited to conduct monitoring each quarter, and the test data meet all requirements.

(4) Boiler waste gas emission: Sichuan Branch and Tangshan Branch are equipped with natural gas boilers. Hubei Branch is equipped with a coal-fired boiler, and waste gas is emitted uniformly after desulfurization and denitrification. Boiler waste gas emission conforms to GB13271-2014 Emission Standard of Air Pollutants for Boiler .

Environmental impact assessment of construction projects and other administrative permits for environmental protection

(1) Administrative permits: According to the Measures for the Administration of Pollutant Discharge Permit of the Ministry of Environmental Protection of the People’s Republic of China, the applications were submitted to the Environmental Protection Bureau. All the subsidiaries attained the new pollutant discharge permit in 2017, and completed its renewal and change in May 2020.

(2) Construction projects: the Company has always been strictly in accordance with environmental laws and regulations to implement the control of construction projects. Environmental impact assessment was carried out for all construction projects and environmental protection project construction was arranged according to construction plan, to ensure that the environmental protection facilities and the main project are designed, constructed and put into use at the same time. At present, all construction projects put into production have completed environmental impact assessment and acceptance and approval.

Emergency plan for sudden environmental events

(1) Preparation and reporting of emergency plan for sudden environmental events: The Company strictly implements emergency response rules for sudden environmental events, and, in accordance with the technical requirements in the Technical Guidelines for Preparation of Emergency Plans for Environmental Pollution Accidents , employs a professional advisory and guidance organization to formulate the Emergency Plan for Sudden Environmental Events , which has been reviewed by and filed with the Environmental Protection Bureau.

(2) Emergency response supplies, training and drill: The Company has matched the corresponding emergency

C&S Paper Co., Ltd. Semi-annual Report 2021

response supplies according to the requirements of the Emergency Plan for Sudden Environmental Events . Emergency response measures for hazardous chemicals have been prepared according to environmental protection requirements, and necessary labor protection supplies and emergency response supplies have been provided in accordance with safety technical instructions, and checked and updated regularly. The Company regularly carries out emergency training and drill and suitability assessment of the emergency plan to ensure the effectiveness and enforceability of the emergency plan.

Environmental self-monitoring program

(1) Self-monitoring ledger: The Company strictly abides by laws and regulations, carries out self-monitoring work in accordance with environmental protection requirements, establishes environmental management ledger and data, and constantly improves it.

(2) Waste water monitoring: At present, self-monitoring is a combination of manual monitoring and automatic monitoring, and qualified units are entrusted to carry out monitoring regularly. Automatic monitoring projects: main discharge outlet of waste water (COD, ammonia nitrogen, flow rate, PH, total nitrogen); Manual monitoring projects: COD, BOD, ammonia nitrogen, SS, chroma, PH, total phosphorus and total nitrogen indicators are monitored daily; for other sewage monitoring items, uncontrolled emissions, solid waste and factory boundary noise, each subsidiary entrusts qualified units to carry out monitoring work monthly or quarterly according to the local environmental protection requirements.

(3) Waste gas monitoring: The main testing items are nitrogen oxide, ringelman emittance, sulfur dioxide and soot. The testing frequency is in compliance with the requirements of regulations.

(4) The self-monitoring data of pollutant discharge and environmental monitoring plans of each subsidiary are disclosed on the national key pollution source information disclosure website and the provincial key pollution source information disclosure website.

Administrative penalties due to environmental issues during the reporting period

				Impact on
					Rectification
Name of company or	Reason of penalty	Violation	Penalty result	production and	measures of the
subsidiary				operation of the
				listed company	Company

None	None	None	None	None	None

Other environmental information that should be disclosed

None

Other relevant information on environmental protection

C&S Paper Co., Ltd. Semi-annual Report 2021

(1) Energy saving and emission reduction

The Company has always adhered to the concept of green and low-carbon development and integrates environmental protection into corporate development. In the process of production, the Company continuously modifies equipment and innovates in technologies, with power and steam consumption per ton of paper decreasing year by year. This could maximize energy saving and emission reduction on the basis of reducing costs, thereby realizing the win-win of economic and social benefits.

YoY reductions in standard coal conversed from power/steam consumption per ton of paper 2017 - 2021	YoY reductions in standard coal conversed from power/steam consumption per ton of paper 2017 - 2021	YoY reductions in standard coal conversed from power/steam consumption per ton of paper 2017 - 2021	YoY reductions in standard coal conversed from power/steam consumption per ton of paper 2017 - 2021	YoY reductions in standard coal conversed from power/steam consumption per ton of paper 2017 - 2021	H1
Item	January-June 2021	2020	2019	2018	2017
Standard coal reduction conversed from power consumption per ton of paper	4	9	7	4	6
Standard coal reduction conversed from steam consumption per ton of paper	7	16	20	11	20

(2) Carbon emission right trading

China’s first emissions trading scheme (ETS) was launched in Shenzhen on June 18, 2013. Since then, Beijing,

Tianjin, Shanghai, Guangdong, Hubei, Chongqing and other provinces and cities have rolled out pilot projects for carbon emission trading. Among the seven pilot regions, most of the provinces and cities issue quota to emission control enterprises free of charge. As a result, the primary market for quota trading adopts the method of administrative allocation. Wherein, Guangdong, Shenzhen and Hubei issue certain quotas to emission control enterprises through bidding.

As of December 31, 2020, Jiangmen production base and Yunfu production base have carbon emission quota.

Hubei production base conducted budgeting and opened an account in 2020 and is expected to initiate quota and

accounting in 2021. The provinces where other subsidiaries are located have not yet started to issue carbon emission quota and accounting.

Carbon trading status of Jiangmen and Yunfu production bases (Unit: 10,000 tons)	Carbon trading status of Jiangmen and Yunfu production bases (Unit: 10,000 tons)	Carbon trading status of Jiangmen and Yunfu production bases (Unit: 10,000 tons)	Carbon trading status of Jiangmen and Yunfu production bases (Unit: 10,000 tons)	Carbon trading status of Jiangmen and Yunfu production bases (Unit: 10,000 tons)
Item	2019	2018	2017	2016
Actual emission of Jiangmen base	13.60	15.30	16.28	15.10
Emission quota of Jiangmen base	16.46	16.24	16.69	13.81
Actual emission of Yunfu base	20.43	14.86	12.13	/
Emission quota of Yunfu base	23.11	14.68	12.02	/
Note: The actual carbon emissions in 2020 will be announced after the audit agency completes calculation; according to actual energy control in production, it is expected that the actual emissions of Jiangmen and Yunfu production bases will be below the quota in 2020.

Note: The actual carbon emissions in 2020 will be announced after the audit agency completes calculation; according to actual energy control in production, it is expected that the actual emissions of Jiangmen and Yunfu production bases will be below the quota in 2020.

The actual emission of Jiangmen production base in 2016 was higher than the emission quota. Through

C&S Paper Co., Ltd. Semi-annual Report 2021

continuous energy saving and emission reduction measures, the base has continuously reduced power, steam and pulp consumption in production. As a result, the actual emissions in 2017, 2018 and 2019 were all below the quota. The actual emission of Yunfu production base in 2017 and 2018 was higher than the emission quota. Through continuous energy saving and emission reduction measures, the base has continuously reduced power, steam and pulp consumption in production. As a result, the actual emission in 2019 was below the quota.

The Company will continue to devote itself to energy-saving, emission-reduction and consumption-reduction actions and implement them simultaneously across the entire group, to fulfill its corporate social responsibilities for environmental protection.

II. Corporate Social Responsibilities

As a nation enterprise with important social influence and a leading enterprise in the household paper industry, the Company has actively fulfilled its corporate social responsibilities. Specifics are as follows:

In January 2021, Jiangmen C&S organized party members to visit local elderly in need and donated supplies worth RMB3,200.
In February 2021, the Company contributed materials worth more than RMB1 million to front-line pandemic control personnel in Shijiazhuang, Hebei Province. Hubei C&S donated C&S paper products equivalent to a value of RMB10,440 to Xiaonan District Fire Rescue Brigade as a way of respect to fire officers.
In March 2021, the Company helped international fight against the pandemic by giving 4 million pieces of medical masks to Russia, Pakistan, Myanmar and other “Belt and Road” countries. Party members of Jiangmen C&S volunteered in the afforestation activities of Yuqian Village and donated 3,000 saplings and supplies worth RMB8,200.
In April 2021, in joint efforts with Guangzhou Yuexiu District Center for Disease Control and Prevention, Guangzhou Emergency Broadcast of Guangzhou Traffic Radio FM106.1, and Guangzhou Charity Association, the Company donated 120,000 anti-pandemic kits (medical surgical masks + sterilization sanitary wipes) to Guangzhou.
In June 2021, Jiangmen C&S organized party members and visited local widows and lonely elderlies before the Dragon Boat Festival and donated a total of RMB4,182 in supplies. In addition, in order to support the education development of Shuangshui Town, Jiangmen C&S contributed RMB50,000 to Shuangshui Dr. Huang Kejing School for the purchase of smart blackboards.
During the period from January to June 2021, charitable funds of the Company provided assistance up to RMB250,000 to employees and people from the society, which helped 21 needy families and individuals.
In July 2021, the Company teamed up with several charitable organizations and contributed more than RMB1.6

C&S Paper Co., Ltd. Semi-annual Report 2021

million to disaster-stricken areas in Henan.

C&S Paper Co., Ltd. Semi-annual Report 2021

Section VI Significant Events

I. Commitments Completed by Actual Controllers, Shareholders, Related parties, Purchasers, or the Company within the Reporting Period and Commitments Not Fulfilled by the End of the Reporting Period

√ Applicable □ Not applicable

						Fulfillment
Cause of	Undertaking	Type of	Content of commitment	Time of	Term of	of
Commitment	Party	commitment		commitment	commitment	commitmen
						t
Share reform

commitment

Commitments in the
acquisition report or
the equity change
report
Commitments made
during asset
restructuring
			Directors, supervisors, and senior
			management promise that they
			will not transfer more than 25% of
			the total shares of the Company
			they hold each year during the
			term of office. If they leave office
Commitments made	Directors,		before the expiry of the term of office the romise not to transfer
during the initial	supervisors, and		, y p more than 25% of the total shares f h C h hld h	November 25,	Long-term	Strictly
public offering or	senior			2010		observed
refinancing	management		o te ompany tey o eac year within the term of office and
			within six months after the term
			of office expires (which is agreed
			when they took office). Moreover,
			they will not transfer their shares
			of the Company within half a year
			after they leave office.
			They promise not to sell all their
			shares (including shares obtained		During the
			from exercise and other shares)		implementat
	Liu Jinfeng		within six months after the end of	November 12,	ion of the	Strictly
			the exercise of the last stock	2020	equity	observed
Equity incentive			options. Besides, they promise to		incentive
commitments
			strictly conform to stock trading-		plan
			related laws and regulations.
			They promise not to sell all their		During the
	Dong Ye, Ye					Strictly
			shares (including shares obtained	June 25, 2021	implementat
	Longfang					observed
			from exercise and other shares)		ion of the

C&S Paper Co., Ltd. Semi-annual Report 2021

		within six months after the end of		equity
		the exercise of the last stock		incentive
		options. Besides, they promise to		plan
		strictly conform to stock trading-
		related laws and regulations.
	Deng
	Yingzhong,
	Deng Guanbiao,	They promise not to compete with
	Deng Guanjie,	the Company in the same	January 1,	Long-term	Strictly
	and Guangdong		2009		observed
	Zhongshun	business.
	Paper Group
	Co., Ltd.
		Cash dividends shall be
		distributed when dividend
		conditions are met. The Board of
		Directors of the Company shall
		comprehensively consider
		industry characteristics,
	C&S Paper Co.,	development stage, business	August 28,		Strictly
		model, profitability, and major		Long-term
	Ltd.		2014		observed
		capital spending (if any),
		distinguish the following
		circumstances, and propose
		differentiated cash dividend
		policies in compliance with the
		procedures stipulated in the
		Articles of Association.
				Between the
Other commitments				end of the
to minority				repurchase
shareholders				plan and the
				start of the

				next
				repurchase
		The 2019 repurchase plan was		plan (the
		terminated due to objective		Company
	C&S Paper Co.,	reasons. The Company will		reviewed	Strictly
		perform the necessary procedures	May 21, 2020	and passed
	Ltd.				observed
		and immediately restart the		the share
		repurchase work upon the end of		repurchase
		the exercise period.		plan on
				January 5,
				2021, and
				will
				continue the
				share
				repurchase
				plan)
		He promises not to reduce any
				Within six
		shares of the Company he holds
				months from th
		within six months upon the
	Deng Yingzhong	completion of the share increase	November 04,	e completion	Strictly
		plan, not to engage in insider	2020		observed
				of the share
		trading and short-term trading,		increase
		and not to trade shares of the
				plan
		Companyduringsensitive

C&S Paper Co., Ltd. Semi-annual Report 2021

	periods.
	For all employees who purchase
	C&S Paper stocks (no less than
	1,000 shares) between May 10
	and May 31, 2021 and hold them
	continuously until May 30, 2022		May 10,
Deng Yingzhong	while still serving in the Company	May 07, 2021	2021 - June	Strictly
	by then, any losses incurred from			observed
	the aforesaid stocks will be fully		30, 2022
	compensated by Mr. Deng
	Yingzhong while any profits
	generated will entirely belong to
	the employee.
	They promise not to reduce or		Ma 09
	pledge any shares they hold
	directly or indirectly in the
	Company in any way from May 9,
	2021 to May 30, 2022, including
Deng	new shares added due to the transfer of caital reserve into
Yingzhong,	p share capital or distribution of k diidd f h	May 09, 2021	y , 2021 - May 30 2022	Strictly
Deng Guanbiao,				observed
Deng Guanjie	stoc vens or te aforementioned shares during the		,
	commitment period. For any
	violation of the above
	commitment, all the incurred
	earnings will belong to the
	Company.
	They promise not to reduce or
	pledge any shares they hold
	directly or indirectly in the
Liu Peng, Chen	Company from the date when the
	_Letter of Commitment_is signed
Haiyuan, Liang
	(i.e. May 14, 2021) to December
Yongliang, Li Youuan Yue	31, 2021, including new shares		May 14,
q, Yong, Zhou	added due to the transfer of	May 14, 2021	2021 -	Strictly
	capital reserve into share capital		December	observed
Qichao, Ye Longfang, Dong	or distribution of stock dividends		31, 2021
Ye, Li Zhaojin,	for the aforementioned shares
	during the commitment period.
and Deng Wenxi
	For any violation of the above
	commitment, all the incurred
	earnings will belong to the
	Company.
	He promises not to reduce any
	shares he or his parents, spouse or
	children hold in the Company
	directly or indirectly in the
	Company in any way within 12 months from the last reduction of		February 05,
Zhou Qichao	the Company’s shares in 2021 (i.e.	July 10, 2021	2021 -	Strictly
			February 4,	observed
	February 5, 2021), including new		2022
	shares added due to the transfer of

	capital reserve into share capital
	or distribution of stock dividends
	for the aforementioned shares
	duringthe commitmentperiod.

C&S Paper Co., Ltd. Semi-annual Report 2021

		For any violation of the above
		commitment, all the incurred
		earnings will belong to the
		Company.
Whether
commitments are	Yes
fulfilled on time

II. Appropriation of Funds for Non-operating Purposes by Controlling Shareholder and Its Related Parties

□ Applicable √ Not applicable

During the reporting period, the Company did not have any funds appropriated for non-operating purposes by the controlling shareholder and its related parties.

III. External Guarantee in Violation of Prescribed Procedures

□ Applicable √ Not applicable

During the reporting period, there was no external guarantee in violation of prescribed procedures.

IV. Engagement and Dismissal of Accounting Firm

Whether the Semi-annual Report has been audited

□ Yes √ No

The Semi-annual Report of the Company has not been audited.

V. Explanation by the Board of Directors and the Board of Supervisors of the “Non-standard Audit Report” for the Reporting Period Issued by the Accounting Firm

□ Applicable √ Not applicable

VI. Explanation by the Board of Directors of the “Non-standard Audit Report” of the Previous Year

□ Applicable √ Not applicable

VII. Matters relating to Bankruptcy and Restructuring

□ Applicable √ Not applicable

No bankruptcy and restructuring-related matters of the Company happened during the reporting period.

C&S Paper Co., Ltd. Semi-annual Report 2021

VIII. Litigations

Material litigations and arbitrations

□ Applicable √ Not applicable

There were no material litigations or arbitrations during the reporting period.

Other litigations

√ Applicable □ Not applicable

	Amount	Whether		Hearing results	Execution of
Basic information			Litigation
	involved	projected		and influences of	judgment of the	Date of	Index of
of the litigation			(arbitration)
	(RMB	liabilities were		the litigation	litigation	disclosure	disclosure
(arbitration)			progress
	10,000)	incurred		(arbitration)	(arbitration)

	660.37		Both the
Zhongshan			first	The verdict of
Trading sued			instance and
				second instance
Shenzhen			the second
				came into force.
Yongxinghua		No	instance	Zhongshan	Ongoing
Trading Co., Ltd.,			ruled that
Feng, & Liang for			Zhongshan	Trading has
				applied for
a sales contract			Trading
				execution.
dispute			won the
			case.
Zhongshan	31.36		The first	The verdict of
Trading sued			instance	first instance	The first round
Guangzhou			supported	came into force.	of execution
Yingjing Trade		No	all the	Zhongshan	ended. No
Co., Ltd. for a			claims by	Trading has	properties have
sales contract			Zhongshan	applied for	been recovered.
dispute			Trading.	execution.
	33.64		The first	The verdict of
Zhongshan
			instance	first instance	The execution
Trading sued
			supported	came into force.	has been
Shaoyang Jiahe		No	all the	Zhongshan	completed. All
Trading Co Ltd
., . for a sales contract			claims by	Trading has	the payment has
			Zhongshan	applied for	been recovered.
dispute
			Trading.	execution.

	2,932.01		Both the
Zhongshan
Trading sued			first	The verdict of
Shanghai Tongli			instance and	second instance	The execution is
			the second
Trading Co., Ltd.				came into force.	in progress.
and eight natural		No	instance	Zhongshan	RMB71,500
			ruled that
person defendants			Zhongshan	Trading has	was recovered
including Liu for a				applied for	in June.
			Trading
sales contract			won the	execution.
dispute			case.

	30.25	No (Note:	The first
Yin sued C&S
		Whether	instance	Wait for the
Paper for a dispute		projected	ruled that	verdict of the first	Not applicable
over the right to
health		liabilities will	C&S won	instance.
		be incurred	the case.

C&S Paper Co., Ltd. Semi-annual Report 2021

		cannot be	The second
		determined prior	instance
		to the verdict.)	sent the
			case back to
			the first
			instance
			court for a
			retrial. The
			first
			instance
			retrial has
			been
			opened.
			C&S is
			waiting for
			the verdict.
	5.65			Xi’an Minsheng
Sichuan C&S sued			The case	has not fulfilled
				the repayment	The first round
Xi’an Minsheng			was
				obligation in line	of enforcement
Department Store		No	mediated	with the paper of	ended;
Management Co.,			and closed
Ltd. for a contract			in the first	civil mediation.	RMB5,000 were
				Sichuan C&S has	recovered.
dispute			instance.
				applied for legal
				enforcement.
Zhongshan	28.55			The verdict of
Trading sued			The verdict	first instance	First round of
Guangzhou Jv Se			of first	came into force.
Mai Ke Internet		No	instance	Zhongshan	execution
					ended No fund
Service Co., Ltd.			came into	Trading has	. was recovered.
for a sales contract			force.	applied for
dispute				execution..
	525.16		The case
			was	Xincheng Tongda
Xiaogan C&S sued			mediated	has not fulfilled
			and closed
Wuhan Xincheng				obligation in line
			in the first
Tongda Trading		No	instance	with the paper of	Ongoing
Co., Ltd. for a				civil mediation.
sales contract			(with a	Xiaogan C&S has
			mediation
dispute				applied for legal
			amount of
			RMB4,496,	enforcement..
			05235).
	31.08			Wait for the
				verdict to be
			The first	served to the
Sales contract			instance has	defendant. After
		No	ruled in	the verdict comes	Not applicable
dispute with Yu
			favor of the	into force, the
			company.	company will
				apply for legal
				enforcement.

C&S Paper Co., Ltd. Semi-annual Report 2021

IX. Penalty and Rectification

□ Applicable √ Not applicable

No penalties and rectifications of the Company occurred during the reporting period.

X. Integrity Records of the Company and its Controlling Shareholder and Actual Controller

□ Applicable √ Not applicable

XI. Material Related Party Transaction

1. Related party transactions relating to daily operations

√ Applicable □ Not applicable

			Content	Pricing		Amount of		Approve	Whether	Settleme
							Proporti				Availabl
Party of related	Related	Type of related	of	rules of	Price of related	related	on in the amount	d	to	nt of	e market prices	Date of	Index
			related	related		party		transacti	outstrip	related			of
party	relations	party			party		of				for	disclosu
			party	party		transacti		on limit	the	party			disclos
transacti on	hip	transacti on			transacti ons		similar transacti				similar transacti	re
			transacti	transacti		on		(RMB1	approve	transacti			ure
			on	on		(RMB1 0,000)	ons	0,000)	d limit	on	ons

Deng
Yingzho	Actual
ng,	controll			Market	Market					Transfer	Market	Decemb	2019-
Deng	er of the	Lease	Rental	fair	fair	147.4	25.49%	294.81	No	settleme	fair	er 06,
													93
Guanbia	Compan			price	price					nt	price	2019
o, Deng	y
Guanjie
Deng
Yingzho	Actual
ng,	controll			Market	Market					Transfer	Market	October	2020-
Deng	er of the	Lease	Rental	fair	fair	16.68	2.88%	33.36	No	settleme	fair
												30, 2020	82
Guanbia	Compan			price	price					nt	price
o, Deng	y
Guanjie
Deng
Yingzho	Actual
ng,	controll			Market	Market					Transfer	Market
Deng	er of the	Lease	Rental	fair	fair	0.65	0.11%		Yes	settleme	fair
Guanbia	Compan			price	price					nt	price
o, Deng	y
Guanjie
	A
Pengzho
	compan
u Lexiang	y where	Daily
shenghu	the senior	operatio n trnti	Sale of	Market fair rice	Market fair rice	79.64	0.02%	150	No	Transfer settleme nt	Market fair rice	Decemb er 16, 2020	2020-
o			goods										99
Trading Co.	manager Yue	asac on		p	p						p
, Ltd.	Yong’s
	son

C&S Paper Co., Ltd. Semi-annual Report 2021

	holds
	shares
	and
	serves
	as a
	supervis
	or
	A
	compan
	y where
	the
Sichuan	senior
West Lexiang	manager Yue	Daily
shenghu	Yong’s	operatio n transacti	Sale of	Market fair rice	Market fair rice	28.91	0.01%	50	No	Transfer settleme nt	Market fair rice	Decemb er 16, 2020	2020-
o	son		goods										99
Trading Co.,	holds shares	on		p	p						p
Ltd.	and
	serves
	as a
	supervis
	or
	A
	compan
	y where
	the
	senior
Chongqi ng	manager Yue	Daily
Qinyue	Yong’s	operatio n transacti	Sale of	Market fair rice	Market fair rice		0.00%	100	No	Transfer settleme nt	Market fair rice	Decemb er 16, 2020	2020-
Trading	brother		goods										99
Co., Ltd.	holds shares	on		p	p						p
	and
	serves
	as a
	supervis
	or
Total				--	--	273.28	--	628.17	--	--	--	--	--
Details of returns of large sales				Not applicable
Where the total amount of daily
				The excessive amounts of related party transaction of RMB6,500 in the reporting period is
related-party transactions occurred in
				renting properties from related parties. It falls within the authority of the Chairman of the
the current period is estimated by
				Company and can be implemented without the approval of the Board of Directors.
category, actual performance during

the reporting period (if any)

Reason(s) for a large difference
between the transaction price and the				Exercise at fair price
market reference price (if applicable)

2. Related party transactions relating to acquisition and sale of assets or equity

□ Applicable √ Not applicable

During the reporting period, there was no related party transaction relating to acquisition and sale of assets or equity.

C&S Paper Co., Ltd. Semi-annual Report 2021

3. Related party transactions relating to joint outbound investment

□ Applicable √ Not applicable

During the reporting period, there was no related party transaction relating to joint outbound investment.

4. Related party transactions relating to creditor’s rights and debts

√ Applicable □ Not applicable

Whether there was non-operating related party transaction relating to creditor’s rights and debts

□ Yes √ No

During the reporting period, there was no non-operating related party transaction relating to creditor’s rights and debts.

5. Transactions with related party financial companies or financial companies controlled by the Company

□ Applicable √ Not applicable

The Company did not have deposit, loan, credit or other financial business transactions with financial companies

that have related relationship, financial companies controlled by the Company and related parties.

6. Other significant related party transactions

□ Applicable √ Not applicable

During the reporting period, there were no other significant related party transactions.

XII. Significant Contracts and Their Performance

1. Custody, contracting and leasing matters

(1) Custody

□ Applicable √ Not applicable

During the reporting period, there was no custody.

(2) Contracting

□ Applicable √ Not applicable

C&S Paper Co., Ltd. Semi-annual Report 2021

During the reporting period, there was no contracting.

(3) Leasing

√ Applicable □ Not applicable

Description of leasing matters

On December 5, 2019, the Company convened the 19th meeting of the fourth session of the Board of Directors and the 16th meeting of the fourth session of the Board of Supervisors, on which the Proposal on Daily Related Party Transactions in 2021 was reviewed and approved. Due to the needs of operation and business, the Board of Directors of the Company agreed that the Company and its wholly-owned subsidiary, Zhongshan Zhongshun Trading Co., Ltd., leased the real estate jointly owned by Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie, the actual controllers of the Company. The lease term is from January 1, 2020 to December 31, 2021, and the total rent involved is RMB5,896,200. During the deliberation of this proposal, the Company’s three related directors, Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie, withdrew from voting, while the remaining six attending directors unanimously approved this related party transaction. The three independent directors of the Company respectively issued Prior Approval Opinions and Opinions of Independent Directors on the proposal, agreeing to submit the proposal to the Board of Directors for deliberation and agreeing to the related party transaction.

On October 29, 2020, the Company convened the 28th meeting of the fourth session of the Board of Directors and the 22nd meeting of the fourth session of the Board of Supervisors, on which the Proposal on Adding to RelatedParty Leasing Transactions was reviewed and approved. The Board of Directors of the Company agreed that the Company’s wholly-owned subsidiary, C&S (Yunfu) Paper Co., Ltd., leased the real estate jointly owned by the actual controllers of the Company Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie to be used as its R&D center. The lease term is from November 1, 2020 to December 31, 2021, and the total rent involved is RMB389,300. During the deliberation of this proposal, the Company’s three related directors, Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie, withdrew from voting, while the remaining six attending directors unanimously approved this related party transaction. The three independent directors of the Company respectively issued Prior Approval Opinions and Opinions of Independent Directors on the proposal, agreeing to submit the proposal to the Board of Directors for deliberation and agreeing to the related party transaction. The Company’s holding subsidiary, Dolemi Sanitary Products Co., Ltd., leased the real estate jointly owned by

C&S Paper Co., Ltd. Semi-annual Report 2021

actual controllers of the Company Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr. Deng Guanjie to be used as residence. The lease term is from December 1, 2020 to December 31, 2021, and the total rent involved is RMB14,100. The amount of this related party transaction falls within the approval authority of the Company’s Chairman and has been approved by the Chairman.

Projects whose profits or losses brought to the Company reached more than 10% of the total profits of the Company during the reporting period

□ Applicable √ Not applicable

During the reporting period, there were no leasing projects whose profits or losses brought to the Company reached more than 10% of the total profits of the Company during the reporting period.

2. Material guarantee

√ Applicable □ Not applicable

Unit: RMB10,000

External guarantee of the Company and subsidiaries (excluding guarantee for subsidiaries)	External guarantee of the Company and subsidiaries (excluding guarantee for subsidiaries)	External guarantee of the Company and subsidiaries (excluding guarantee for subsidiaries)	External guarantee of the Company and subsidiaries (excluding guarantee for subsidiaries)	External guarantee of the Company and subsidiaries (excluding guarantee for subsidiaries)	External guarantee of the Company and subsidiaries (excluding guarantee for subsidiaries)	External guarantee of the Company and subsidiaries (excluding guarantee for subsidiaries)	External guarantee of the Company and subsidiaries (excluding guarantee for subsidiaries)	External guarantee of the Company and subsidiaries (excluding guarantee for subsidiaries)	External guarantee of the Company and subsidiaries (excluding guarantee for subsidiaries)
	Disclosure
	date of						Counter		Whether	Whether
Name of	relevant	Guarantee	Actual date	Actual	Guarantee	Collateral	guarant	Guarantee	it has	it is
guarantee	announcem		of	guarantee					been	related
		limit			type	(if any)	ee (if	period
object	ent on		occurrence	amount					complete	party
	guarantee						any)		d	guarantee
	limit
							Joint
Wuhan Jie					Joint and		and
Rou E-	December	8,000	September	4,610	several	None	several	2020.9.23	No	No
commerce	06, 2019		23, 2020		liability		liability	-2021.9.4
Co., Ltd.					guarantee		guarant
							ee
							Joint
Shanghai					Joint and		and	2020.10.1
Junmeng E-	December	13,000	October 16,	4,480	several	None	several	6-	No	No
commerce	06, 2019		2020		liability		liability
Co., Ltd.					guarantee		guarant	2021.9.4
							ee
Total approved amount				Total actual amount of
of external guarantee			0	external guarantee						0
during the reporting				during the reporting
period (A1)				period (A2)
Total approved amount
				Total actual guarantee
of external guarantee at			21,000	balance at the end of the						9,090
the end of the reporting
period (A3)				reporting period (A4)

			Guarantee of the Company for subsidiaries
Name of	Disclosure	Guarantee	Actual date	Actual	Guarantee	Collateral	Counter	Guarantee	Whether	Whether

C&S Paper Co., Ltd. Semi-annual Report 2021

guarantee	date of	limit	of	guarantee	type	(if any)	guarant	period	it has	it is
object	relevant		occurrence	amount			ee (if		been	related
	announcem						any)		complete	party
	ent on								d	guarantee
	guarantee
	limit
					Joint and
								2020.9.15
Zhongshan	December	15,000	September	12,385.56	several	None	None	-	No	No
Trading	05, 2019		15, 2020		liability
					guarantee			2023.8.31

					Joint and
Zhongshan	December	13,600	March 02,	0	several	None	None	2021.3.2-	No	No
Trading	15, 2020		2021		liability			2026.3.1
					guarantee
					Joint and			2020.12.3
Zhongshan	December	3,000	December	0	several	None	None	0-	No	No
Trading	05, 2019		30, 2020		liability			2024.12.3
					guarantee			1
					Joint and
								2020.12.1
Zhongshan	December	25,000	December	0	several	None	None	5-	No	No
Trading	05, 2019		15, 2020		liability
					guarantee			2024.12.9

					Joint and			2019.7.12
Zhongshan	December	9,000	July 12,	4,610	several	None	None	-	No	No
Trading	19, 2018		2019		liability			2024.12.3
					guarantee			1
					Joint and
								2020.10.1
Jiangmen	December	12,000	October 15,	1,943.18	several	None	None	5-	No	No
C&S	05, 2019		2020		liability
					guarantee			2023.8.31

					Joint and			2018.3.27
Jiangmen	December	10,000	March 27,	0	several	None	None	-	No	No
C&S	15, 2017		2018		liability			2023.12.3
					guarantee			1
					Joint and
								2021.1.4-
Jiangmen	December	12,000	January 04,	4,648.97	several	None	None	2023.11.0	No	No
C&S	15, 2020		2021		liability
					guarantee			1

					Joint and			2020.11.2
Jiangmen	December	10,000	November	1,382.68	several	None	None	6-	No	No
C&S	05, 2019		16, 2020		liability			2023.11.2
					guarantee			5
					Joint and
								2021.5.13
Jiangmen	December	15,000	May 13,	0	several	None	None	-	No	No
C&S	15, 2020		2021		liability
					guarantee			2024.3.30

					Joint and			2020.12.2
Jiangmen	December	5,000	December	0	several	None	None	3-	No	No
C&S	05, 2019		23, 2020		liability			2025.12.2
					guarantee			3
					Joint and			2018.5.30
Jiangmen	December		May 30,
		16,000		0	several	None	None	-	No	No
C&S	15, 2017		2018
					liability			2023.5.30

C&S Paper Co., Ltd. Semi-annual Report 2021

					guarantee
					Joint and
								2020.4.14
Yunfu C&S	December	8,000	April 14,	0	several	None	None	-	No	No
	05, 2019		2020		liability
					guarantee			2028.4.14

					Joint and			2020.11.2
Yunfu C&S	December	5,000	November	800	several	None	None	0-	No	No
	05, 2019		20, 2020		liability			2023.12.3
					guarantee			1
					Joint and
								2020.10.1
Yunfu C&S	December	10,000	October 15,	4,076.71	several	None	None	5-	No	No
	05, 2019		2020		liability
					guarantee			2023.8.31

					Joint and			2020.11.1
Yunfu C&S	December	10,000	October 15,	1,160.02	several	None	None	6-	No	No
	05, 2019		2020		liability			2023.11.1
					guarantee			5
					Joint and
								2021.5.13
Yunfu C&S	December	15,000	May 13,	0	several	None	None	-	No	No
	15, 2020		2021		liability
					guarantee			2024.3.30

					Joint and
								2021.1.4-
Yunfu C&S	December	7,000	January 04,	1,722.39	several	None	None	2023.11.0	No	No
	15, 2020		2021		liability
					guarantee			1

					Joint and
								2020.2.25
Hubei C&S	December	10,000	February	0	several	None	None	-	No	No
	05, 2019		25, 2020		liability
					guarantee			2025.12.4

Zhongshan
Trading,					Joint and
Hubei	December	9,705.6	June 01,	4,906.41	several	None	None	2021.6.1-	No	No
C&S, and	15, 2020		2021		liability			2023.4.22
Macao					guarantee
C&S
Jiangmen C&S
					Joint and
, Yunfu	December	25,000	January 08,	19.18	several	None	None	2019.1.8-	No	No
	19, 2018		2019		liability			2022.1.8
C&S, Hubei C&S					guarantee

C&S Hong
Kong, Zhon					Joint and
g Shun	December	32,352	July 08,	482.57	several	None	None	2020.7.8-	No	No
	05, 2019		2020		liability			2024.7.31
Internationa l, Macao					guarantee
C&S
C&S Hong
Kong,					Joint and			2020.3.20
Zhong	December	16,913.96	March 20,	1,341.23	several	None	None	-	No	No
Shun	05, 2019		2020		liability
Internationa					guarantee			2022.9.19
l

C&S Paper Co., Ltd. Semi-annual Report 2021

C&S Hong					Joint and			2021.3.17
Kong,,	December	33,328	March 17,	2,523.47	several	None	None	-	No	No
Macao	15, 2020		2021		liability			2025.12.3
C&S					guarantee			1
C&S Hong								2020212
Kong, Zhon					Joint and
g Shun	December	41,087.04	February	11,396.07	several	None	None	.. -	No	No
	05, 2019		12, 2020		liability
Internationa l, Macao					guarantee			2022.2.12
C&S
C&S Hong					Joint and
								2020.2.25
Kong,	December	12,940.8	February	2,463.14	several	None	None	-	No	No
Macao	05, 2019		25, 2020		liability
C&S					guarantee			2022.2.25

C&S Hong					Joint and
								2020.11.1
Kong,,	December	6,470.4	November	0	several	None	None	2-	No	No
Macao	05, 2019		12, 2020		liability
C&S					guarantee			2024.3.1

C&S Hong					Joint and
								2020.3.27
Kong,,	December	15,528.96	March 27,	1,110.43	several	None	None	-	No	No
Macao	05, 2019		2020		liability
C&S					guarantee			2023.2.19

C&S Hong								2018928
Kong, Zhon					Joint and
g Shun	December	17,997.12	September	0	several	None	None	.. -	No	No
	15, 2017		28, 2018		liability
Internationa l, Macao					guarantee			2022.8.31
C&S
C&S Hong								2020130
Kong, Zhon					Joint and
g Shun	December	19,411.2	January 30,	609.5	several	None	None	.. -	No	No
	05, 2019		2020		liability
Internationa l, Macao					guarantee			2023.1.30
C&S
					Joint and
								2018.3.23
Macao	December	7,117.44	March 23,	1,553.22	several	None	None	-	No	No
C&S	15, 2017		2018		liability
					guarantee			2022.9.23

					Joint and
								2018.8.15
Macao	December	7,000	August 15,	794.98	several	None	None	-	No	No
C&S	15, 2017		2018		liability
					guarantee			2025.8.15

					Joint and
								2021.3.30
Macao	December	6,470.4	March 30,	1,009.38	several	None	None	-	No	No
C&S	15, 2020		2021		liability
					guarantee			2024.3.30

C&S Hong Kn
					Joint and
og, Zhong	December	22,646.4	September	2,690.1	several	None	None	2020.9.1-	No	No
	05, 2019		01, 2020		liability			2022.7.9
Shun					guarantee
Internationa

C&S Paper Co., Ltd. Semi-annual Report 2021

l, Macao
C&S
						Joint and
C&S Hong	December	14,105.47		July 01,	11,376.24	several	None	None	2020.7.1-	No	No
Kong	05, 2019			2020		liability			2022.6.30
						guarantee
						Joint and
Macao	December	27,046.27		July 01,	8,717.77	several	None	None	2020.7.1-	No	No
C&S	05, 2019			2020		liability			2022.6.30
						guarantee
Total approved amount					Total actual amount of
of guarantee for		112,104			guarantee for		14,810.62
subsidiaries during the					subsidiaries during the
reporting period (B1)					reporting period (B2)
Total approved amount					Total actual guarantee
of guarantee for		525,721.06			balance to subsidiaries at		83,723.2
subsidiaries at the end of					the end of the reporting
the reporting period (B3)					period (B4)
Guarantee of subsidiaries to subsidiaries
	Disclosure
	date of							Counter		Whether	Whether
Name of	relevant	Guarantee		Actual date	Actual	Guarantee	Collateral	guarant	Guarantee	it has	it is
guarantee	announcem			of	guarantee					been	related
		limit				type	(if any)	ee (if	period
object	ent on			occurrence	amount					complete	party
	guarantee							any)		d	guarantee
	limit
Total amount of the Company’s guarantee (the sum of the first three items)
					Total actual amount of
Total approved amount of
guarantee during the reporting			112,104		guarantee during the		14,810.62
					reporting period (A2 +
period (A1 + B1 + C1)					B2 + C2)

					Total actual guarantee
Total approved amount of
guarantee at the end of the			546,721.06		balance at the end of the		92,813.2
					reporting period
reporting period (A3 + B3 + C3)					(A4+B4+C4)

Proportion of the total actual amount of guarantee
					19.13%
(A4 + B4 + C4) in the net assets of the Company

Wherein:
Balance of guarantee for shareholders, actual
					0
controllers and their related parties (D)

Balance of debt guarantee provided directly or
indirectly for objects whose asset-liability ratio					0
exceeds 70% (E)
Amount of guarantees in excess of 50% of net
					31,011.15
assets (F)

Total amount of the above three guarantees (D + E
					31,011.15
+ F)

Description of situations that the guarantee
liability has occurred or there is evidence showing
that the Company may be jointly and severally					None
liable for undue guarantee contracts during the
reporting period (if any)

C&S Paper Co., Ltd. Semi-annual Report 2021

Description of providing external guarantee in No violation of prescribed procedures (if any)

Detailed description on the guarantees with different types: None

3. Entrusted wealth management

√ Applicable □ Not applicable

Unit: RMB10,000

					Amount overdue but
	Source of entrusted	Incurred amount of
Specific type	wealth management	entrusted wealth	Undue balance	Amount overdue but	not recovered with
				not recovered	impairment having
	funds	management			been accrued

Wealth management
	Self-owned fund	1,000	0	0	0
product of bank

Wealth management
product of securities	Self-owned fund	9,500	0	0	0
company
Total		10,500	0	0	0

Explanation of high-risk entrusted wealth management with large individual amount or low safety, poor liquidity

and no principal guarantee

□ Applicable √ Not applicable

Entrusted wealth management is expected to fail to recover the principal or there are other circumstances that may

lead to impairment

□ Applicable √ Not applicable

4. Significant contracts for daily operation

□ Applicable √ Not applicable

5. Other significant contracts

□ Applicable √ Not applicable

There were no other significant contracts during the reporting period.

XIII. Other Significant Events

√ Applicable □ Not applicable

	Announcement		Announce
No.		Announcement name
	time		ment

C&S Paper Co., Ltd. Semi-annual Report 2021

			number

1	January 06, 2021	Announcement on Resolutions of the 30th Meeting of the Fourth Session of the Board of Directors	2021-01	Securities Times, Securities Daily, China Securities Journal, and CNINF
2	January 06, 2021	Announcement on Resolutions of the 24th Meeting of the Fourth Session of the Board of Supervisors	2021-02
3	January 06, 2021	Announcement on the Re-election of the Board of Directors	2021-03
4	January 06, 2021	Announcement on the Re-election of the Board of Supervisor	2021-04
5	January 06, 2021	Plan of the Company for Repurchasing Partial Public Shares	2021-05
6	January 06, 2021	Notice on Convening 2021 First Extraordinary General Meeting	2021-06
7	January 06, 2021	Announcement on Completion of Stock Sales and Termination of Phase II Employee Stock Ownership Plan	2021-07
8	January 06, 2021	Announcement on Pre-disclosure of the Share Reduction Plan by Senior Management of the Company	2021-08
9	January 09, 2021	Announcement on Shareholding Information of the Top Ten Shareholders in Matters Relevant to Share Repurchase	2021-09
10	January 09, 2021	Share Repurchase Report	2021-10
11	January 14, 2021	Announcement on Resolutions of the 31st Meeting of the Fourth Session of the Board of Directors	2021-11
12	January 14, 2021	Announcement on Resolutions of the 25th Meeting of the Fourth Session of the Board of Supervisors	2021-12
13	January 14, 2021	Announcement of the Company on Building a New 400,000-ton High- grade Household Paper Project	2021-13
14	January 14, 2021	Announcement on Use of Self-owned Idle Funds for Reverse Repo of Treasury Bonds in 2021	2021-14
15	January 14, 2021	Notice on Convening 2021 Second Extraordinary General Meeting	2021-15
16	January 14, 2021	Announcement on the Re-election of the Employee Representative Supervisors	2021-16
17	January 15, 2021	Announcement on Wholly-owned Subsidiary Obtaining the High-tech Enterprise Certificate (Renewal)	2021-17
18	January 22, 2021	Announcement on Resolutions of 2021 First Extraordinary General Meeting of Shareholders	2021-18
19	January 22, 2021	Announcement on Resolutions of the 1st Meeting of the Fifth Session of the Board of Directors	2021-19
20	January 22, 2021	Announcement on Resolutions of the 1st Meeting of the Fifth Session of the Board of Supervisors	2021-20
21	January 22, 2021	Announcement on the Appointment of Senior Managers	2021-21
22	January 22, 2021	Announcement on the Appointment of the Person in Charge of the Audit Dept. and the Representative of Securities Affairs	2021-22
23	January 22, 2021	Announcement on the Completion of Industrial and Commercial Registration Amendment of Subsidiaries	2021-23
24	January 28, 2021	Announcement on the First Repurchase of Company Shares	2021-24
25	January 29, 2021	Announcement on Progress of Repurchase of Company Shares	2021-25
26	January 30, 2021	Announcement on Resolutions of 2021 Second Extraordinary General Meeting of Shareholders	2021-26
27	January 30, 2021	Announcement on Progress of Repurchase of Company Shares	2021-27
28	February 03, 2021	Announcement on Progress of Repurchase of Company Shares	2021-28
29	February 05, 2021	Announcement on Progress of Repurchase of Company Shares	2021-29
30	February 06, 2021	Announcement on Completion of the Share Reduction Plan by Senior Management of the Company	2021-30
31	February 27, 2021	Announcement on Investment and Establishment of a Wholly-owned	2021-31

C&S Paper Co., Ltd. Semi-annual Report 2021

		Subsidiary and Completion of Industrial and Commercial Registration
32	February 27, 2021	Annual Performance Bulletin 2020	2021-32
33	March 03, 2021	Announcement on Progress of Repurchase of Company Shares	2021-33
34	March 04, 2021	Announcement on Completion of the Industrial and Commercial Registration Amendment of the Company	2021-34
35	March 04, 2021	Announcement on the Repurchase and Deregistration Completion of Reserved Restricted Stocks Awarded in the First Grant under the 2018 Stock Option and Restricted Stock Incentive Plan	2021-35
36	March 06, 2021	Announcement on Independent Directors Obtaining the Qualification Certificate for Independent Directors	2021-36
37	March 06, 2021	Announcement on the Early Termination of the Share Reduction Plan by Directors and Senior Management of the Company	2021-37
38	March 10, 2021	Announcement on the Completion of Industrial and Commercial Registration Amendment of Wholly-owned Subsidiary	2021-38
39	March 16, 2021	Announcement on the Progress of the New 400,000-ton High-grade Household Paper Project	2021-39
40	March 19, 2021	Announcement on Resignation of the Company’s Director	2021-40
41	March 23, 2021	Announcement on Resolutions of the 2nd Meeting of the Fifth Session of the Board of Directors	2021-41
42	March 23, 2021	Announcement on By-election of Non-Independent Directors of the Fifth Session of the Board of Directors	2021-42
43	March 23, 2021	Announcement on Change of President of the Company	2021-43
44	March 23, 2021	Announcement on the Additional Appointment of the Representative of Securities Affairs	2021-44
45	March 23, 2021	Notice on Convening the 2021 Third Extraordinary General Meeting	2021-45
46	March 24, 2021	Announcement on Progress of Repurchase of Company Shares	2021-46
47	March 25, 2021	Announcement on Progress of Repurchase of Company Shares	2021-47
48	April 06, 2021	Announcement on Progress of Repurchase of Company Shares	2021-48
49	April 08, 2021	Announcement on Resolutions of the 2021 Third Extraordinary General Meeting	2021-49
50	April 10, 2021	Announcement on Acceptance Completion of Phase II of Hubei New Project	2021-50
51	April 13, 2021	Announcement on Resolutions of 3rd Meeting of the Fifth Session of the Board of Directors	2021-51
52	April 13, 2021	Announcement on Change of Chairman of the Company	2021-52
53	April 13, 2021	Announcement on Appointment of the Vice President of the Company	2021-53
54	April 29, 2021	Announcement on Resolutions of the 4th Meeting of the Fifth Session of the Board of Directors	2021-54
55	April 29, 2021	Announcement on Resolutions of the 2nd Meeting of the Fifth Session of the Board of Supervisors	2021-55
56	April 29, 2021	Summary of Annual Report 2020	2021-56
57	April 29, 2021	Announcement on the Proposal on 2020 Profit Distribution Plan	2021-57
58	April 29, 2021	Announcement on Appointment of the Vice President of the Company	2021-58
59	April 29, 2021	Notice on Convening 2020 Annual General Meeting	2021-59
60	April 29, 2021	Notice on Convening the Online Performance Presentation for Annual Report 2020	2021-60
61	April 29, 2021	Text of the First Quarter Report 2021	2021-61
62	April 29, 2021	Announcement on Resignation of the Director and Co-president of the	2021-62

C&S Paper Co., Ltd. Semi-annual Report 2021

		Company
63	May 06, 2021	Announcement on Progress of Repurchase of Company Shares	2021-63
64	May 07, 2021	Announcement on Wholly-owned Subsidiary Obtaining the High-tech Enterprise Certificate (Renewal)	2021-64
65	May 08, 2021	Announcement on Progress of Repurchase of Company Shares	2021-65
66	May 10, 2021	Announcement on the Issuance of a Proposal by Chairman and Actual Controllers of the Company to All Employees for Increasing Shareholding of the Company	2021-66
67	May 10, 2021	Announcement on Commitments by Actual Controllers of the Company of Not Reducing or Pledging Shares of the Company	2021-67
68	May 13, 2021	Announcement on Increase of Company Shares by Senior Management and Supervisors of the Company	2021-68
69	May 14, 2021	Announcement on Increase of Company Shares by Chairman and Senior Management of the Company	2021-69
70	May 19, 2021	Announcement on Increase of Company Shares by Senior Management and Supervisors of the Company	2021-70
71	May 19, 2021	Reply to the Letter of Concern from Shenzhen Stock Exchange	2021-71
72	May 20, 2021	Announcement on Resolutions of 2020 Annual General Meeting of Shareholders	2021-72
73	May 22, 2021	Announcement on Resolutions of the 5th Meeting of the Fifth Session of the Board of Directors	2021-73
74	May 22, 2021	Announcement on Resolutions of the 3rd Meeting of the Fifth Session of the Board of Supervisors	2021-74
75	May 22, 2021	Announcement on Adjusting the Price and Amount of the Company’s Share Repurchase	2021-75
76	May 22, 2021	Announcement on Changes to Accounting Policies	2021-76
77	May 22, 2021	Announcement on Change of the Person in Charge of the Audit Dept. of the Company	2021-77
78	May 22, 2021	Announcement on Continued Engagement of the Accounting Firm	2021-78
79	May 22, 2021	Announcement on Amending the Articles of Association of the Company	2021-79
80	May 22, 2021	Announcement on Achieving the Unlock Conditions of the Second Unlock Period for Restricted Stocks Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan	2021-80
81	May 22, 2021	Announcement on Achieving the Exercise Conditions of the Second Exercise Period for Stock Options Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan	2021-81
82	May 22, 2021	Announcement on the Repurchase and Deregistration of Partial Restricted Stocks Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan	2021-82
83	May 22, 2021	Announcement on the Deregistration of Partial Stock Options Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan	2021-83
84	May 22, 2021	Notice on Convening the 2021 Fourth Extraordinary General Meeting	2021-84
85	May 29, 2021	Announcement on Increase of Company Shares by Supervisors of the Company	2021-85
86	June 02, 2021	Announcement on Progress of Repurchase of Company Shares	2021-86
87	June 03, 2021	Indicative Announcement on Convening the 2021 Fourth Extraordinary General Meeting	2021-87
88	June 05, 2021	Announcement on Completion of the Industrial and Commercial Registration Amendment of the Company	2021-88
89	June 08, 2021	Announcement on Resolutions of the 2021 Fourth Extraordinary	2021-89

C&S Paper Co., Ltd. Semi-annual Report 2021

		General Meeting
90	June 08, 2021	Announcement on Capital Reduction	2021-90
91	June 08, 2021	Announcement on Progress of Repurchase of Company Shares	2021-91
92	June 08, 2021	Announcement on Progress of Repurchase of Company Shares	2021-92
93	June 11, 2021	Announcement on Implementation of 2020 Annual Equity Allocation	2021-93
94	June 19, 2021	Announcement on Resolutions of the 6th Meeting of the Fifth Session of the Board of Directors	2021-94
95	June 19, 2021	Announcement on Resolutions of the 4th Meeting of the Fifth Session of the Board of Supervisors	2021-95
96	June 19, 2021	Announcement on Adjusting the Exercise Price of Stock Options under 2018 Stock Option and Restricted Stock Incentive Plan	2021-96
97	June 28, 2021	Indicative Announcement on Adopting the Autonomous Exercise Mode in the Second Exercise Period for Stock Options Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan	2021-97
98	June 28, 2021	Indicative Announcement on Lifting the Sales Restrictions in the Second Unlock Period for Restricted Stocks Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan	2021-98

XIV. Significant Events of Subsidiaries of the Company

√ Applicable □ Not applicable

	Announcement		Announcement
No.		Announcement name		Disclosure media
	time		number

1	January 15, 2021	Announcement on Wholly-owned Subsidiary Obtaining the High-tech Enterprise Certificate (Renewal)	2021-17	Securities Times, Securities Daily, China Securities Journal, and CNINF
2	January 22, 2021	Announcement on the Completion of Industrial and Commercial Registration Amendment of Subsidiaries	2021-23
3	February 27, 2021	Announcement on Investment and Establishment of a Wholly- owned Subsidiary and Completion of Industrial and Commercial Registration	2021-31
4	March 10, 2021	Announcement on the Completion of Industrial and Commercial Registration Amendment of Wholly-owned Subsidiary	2021-38
5	May 07, 2021	Announcement on Wholly-owned Subsidiary Obtaining the High-tech Enterprise Certificate (Renewal)	2021-64

C&S Paper Co., Ltd. Semi-annual Report 2021

Section VII Changes in Shareholding and Information of Shareholders

I. Changes in Share Capital

1. Changes in shares

Unit: share

	Before change	Before change	Increase/decrease (+, -) of this change	Increase/decrease (+, -) of this change	Increase/decrease (+, -) of this change	Increase/decrease (+, -) of this change	Increase/decrease (+, -) of this change	After change	After change
					Shares
		Percentag	New	Bonus	transferr				Percentag
	Number		shares		ed from	Others	Subtotal	Number
		e		shares					e
			issued		surplus
					reserve
I. Shares subject to
	36,858,323	2.81%	75,000			-7,165,895	-7,090,895	29,767,428	2.27%
selling restrictions

1. Shares held by the

state

2. Shares held by
state-owned legal
person
3. Shares held by
other domestic	34,906,289	2.66%				-7,283,961	-7,283,961	27,622,328	2.11%
shareholders
Including: Shares
held by domestic legal
persons
Shares held by
domestic natural	34,906,289	2.66%				-7,283,961	-7,283,961	27,622,328	2.11%
persons
4. Shares held by
	1,952,034	0.15%	75,000			118,066	193,066	2,145,100	0.16%
foreign shareholders

Including: Shares
held by foreign legal
persons
Shares held by
	1,952,034	0.15%	75,000			118,066	193,066	2,145,100	0.16%
foreign natural persons

II. Shares without
	1,274,840,644	97.19%	386,478			6,954,005	7,340,483	1,282,181,127	97.73%
selling restrictions

1. RMB-denominated
	1,274,840,644	97.19%	386,478			6,954,005	7,340,483	1,282,181,127	97.73%
ordinary shares

2. Domestic listed

foreign shares

3. Overseas listed

foreign shares

4. Others
III. Total number of	1,311,698,967	100.00%	461,478			-211,890	249,588	1,311,948,555	100.00%

C&S Paper Co., Ltd. Semi-annual Report 2021

Explanation on changes in shares

√ Applicable □ Not applicable

During January 1, 2021 and February 28, 2021, vesting incentive recipients of stock options awarded in the first grant and reserved stock options under the 2018 Stock Option and Restricted Stock Incentive Plan exercised the right of 461,478 shares. As a result, the Company’s total share capital increased by 461,478 shares.
During the first unlock period for restricted shares awarded in the first grant under the 2018 Stock Option and Restricted Stock Incentive Plan , 24 incentive recipients were unable to unlock the shares since they left the Company or failed to pass performance appraisal or unable to unlock all the shares since they passed the performance appraisal but failed to get a full mark and therefore could only unlock shares proportioned to their mark. As a result, the Company had to repurchase and cancel a total of 211,890 restricted shares that had been granted but not unlocked. The deregistration procedures for the aforementioned restricted shares had been completed at the Shenzhen Branch of China Securities Depository and Clearing Corporation Limited as at March 3, 2021. As a result, the Company’s total share capital decreased by 211,890 shares.

Approval of changes in shares

√ Applicable □ Not applicable

The Board of Directors’ disposition of the repurchase and deregistration matters for the first unlocking of reserved restricted shares under the 2018 Stock Option and Restricted Stock Incentive Plan had been authorized by the 2019 First Extraordinary General Meeting and reviewed and approved by the 28th meeting of the fourth session of the Board of Directors and 22nd meeting of the fourth session of the Board of Supervisors.
The Board of Directors’ disposition of the exercise matters for the first exercise period of restricted stock options awarded in the first grant and reserved stock options under the 2018 Stock Option and Restricted Stock Incentive Plan had been authorized by the 2019 First Extraordinary General Meeting and reviewed and approved by the 23rd meeting of the fourth session of the Board of Directors, the 19th meeting of the fourth session of the

Board of Supervisors, the 28th meeting of the fourth session of the Board of Directors, and the 22nd meeting of the fourth session of the Board of Supervisors.

Transfer of title of changed shares

□ Applicable √ Not applicable

Implementation of share repurchase

C&S Paper Co., Ltd. Semi-annual Report 2021

√ Applicable □ Not applicable

On January 5, 2021, the Company held the 30th meeting of the fourth session of the Board of Directors which reviewed and passed the Proposal on Share Repurchase of the Company . The Company plans to repurchase shares of the Company via centralized bidding transaction, with a total amount of RMB180million (inclusive) to RMB360 million (inclusive). The repurchase price shall not outstrip RMB31.515/share (inclusive). All shares to be repurchased will be used for equity incentives or employee stock ownership plans.

On May 21, 2021, the Company held the fifth meeting of the fifth session of the Board of Directors which reviewed and passed the Proposal on Adjusting the Price and Amount of the Company’s Share Repurchase . Taking into account positive changes in the capital market and the Company’s share price and based on confidence in operations and future business development, the Company adjusts the upper price limit of the share repurchase from RMB31.515/share (inclusive) to RMB45/share (inclusive) and the amount range from RMB180-360 million to RMB330-660 million. This could ensure the smooth implementation of the share repurchase and relevant incentive matters in the future.

From January 27 to June 30, 2021, the Company repurchased a total of 18,535,177 shares through its special repurchase securities account, accounting for 1.4128% of its total share capital at the time. The highest and lowest transaction price was RMB34.50/share and RMB23.27/share, respectively, and the total transaction amount was RMB532,605,631.96 (excluding transaction fee).

Implementation of share repurchase by centralized bidding

□ Applicable √ Not applicable

Impact of share changes on basic earnings per share and diluted earnings per share, net assets per share attributable to ordinary shareholders of the Company, and other financial indicators in last year and the latest period

□ Applicable √ Not applicable

Other contents considered necessary by the Company or required to be disclosed by the securities regulatory authority

□ Applicable √ Not applicable

2. Changes in shares subject to selling restrictions

√ Applicable □ Not applicable

C&S Paper Co., Ltd. Semi-annual Report 2021

Unit: share

		Number of shares released	Increase in shares subject to	Number of shares subject to
	Number of shares
Shareholder’s	subject to selling	from selling	selling	selling	Reason for Selling	Date of release
	restrictions at the					from selling
name		restrictions di h	restrictions di h	restrictions at h d f h	restrictions
	beginning of the					restrictions
	period	urng te period	urng te period	te en o te year

					Lock-up shares of
Deng Yingzhong	5,064,608			5,064,608		Long-term
					senior management

					Lock-up shares of
Deng Guanbiao	3,718,105			3,718,105		Long-term
					senior management

					Lock-up shares of
Deng Guanjie	900,730			900,730		Long-term
					senior management

					Lock-up shares of
					senior management;
					the increase in
Liu Peng			45,975	45,975	restricted shares is due	Long-term
					to the proportional
					locking of
					shareholding increase
					Lock-up shares of
Liu Jinfeng	1,579,475	527,563		1,051,912		Long-term
					senior management

					Lock-up shares of
					senior management;
					the increase in
Chen Haiyuan			12,675	12,675	restricted shares is due	Long-term
					to the proportional
					locking of
					shareholding increase
					Lock-up shares of
Li Youquan	33,300			33,300		Long-term
					senior management

					Lock-up shares of
					senior management;
					the increase in
Yue Yong	9,261,243	2,127,937	330,000	7,463,305	restricted shares is due	Long-term
					to the proportional
					locking of unlocked
					restricted shares
Zhou
					Lock-up shares of
QichaoZhou	497,754	123,750		374,004		Long-term
					senior management
Qichao

Ye LongfangYe					Lock-up shares of
	112,500			112,500		Long-term
Longfang					senior management

					Lock-up shares of
					senior management;
					the increase in
Dong Ye	119,794	53,250	45,000	111,544	restricted shares is due	Long-term
					to the proportional
					locking of unlocked
					restricted shares
					Lock-up shares of
Li Zhaojin			8,100	8,100	senior management;	Long-term
					the increase in

C&S Paper Co., Ltd. Semi-annual Report 2021

					restricted shares is due
					to the proportional
					locking of
					shareholding increase
					Lock-up shares of
					senior management;
					the increase in
Deng Wenxi			15,825	15,825	restricted shares is due	Long-term
					to the proportional
					locking of
					shareholding increase
					Lock-up shares of
						Release of selling
					senior management;
						restrictions in
Dai Zhenji	265,034		304,966	570,000	no share reduction	accordance with
					within 6 months upon
					leaving the post, with	relevant
						regulations
					all shares being locked

					In accordance with
					2018 Stock Option and
					Restricted Stock
					Incentive Plan (Draft),
					the second unlocking
					was conducted for	Pursuant to_2018_
Equity incentive					restricted stocks of	Stock Option and
	15,305,780	5,020,935		10,284,845	some incentive	Restricted Stock
recipients
					recipients awarded in	Incentive Plan
					the first grant, with an	(Draft)
					unlocking ratio of
					30%. The second and
					third unlocking for
					reserved stocks has
					not been conducted.
Total	36,858,323	7,853,435	762,541	29,767,428	--	--

II. Issuance and Listing of Securities

□ Applicable √ Not applicable

III. Total Number of Shareholders and Shareholding

Unit: share

					Total number of preferred	Total number of preferred	Total number of preferred
Total number of ordinary					shareholders whose voting
shareholders as at the end of		75,430			rights were resumed at the end			0
the reporting period					of the reporting period (if any)
					(see Note VIII)
	Shareholdings of ordinary shareholders with m				ore than 5% or the top 10 ordinary shareholders
			Share	Number of		Number of			Pledged, marked or
							Number of ordinar shares
			holdin	ordinary	Increase/dec	ordinary			frozen
Name of	Nature of shareholder		g	shares held at	rease during	shares held	y held without selling			Number of
shareholder			percen t	the end of the ti	the reporting id	subject to lli			Share
			age (%)	reporng period	pero	seng restrictions	restrictions		status	shares

C&S Paper Co., Ltd. Semi-annual Report 2021

Guangdong Zhongshun Paper Group Co., Ltd.	Domestic non-state- owned legal person	28.63 %	375,655,958		375,655,958


Chung Shun Co.	Foreign legal person	20.31 %	266,504,789		266,504,789


Hong Kong Securities Clearing Co., Ltd.	Foreign legal person	7.12%	93,436,636		93,436,636


National Social Security Fund Portfolio 406	Others	1.00%	13,112,327		13,112,327


ICBC - Fuguo Tianhui Select Growth Hybrid Securities Investment Fund (LOF)	Others	0.79%	10,303,557		10,303,557


Yue Yong	Domestic natural person	0.74%	9,665,241	7,903,305	1,761,936
CCB - Fuguo Value Creation Hybrid Securities Investment Fund	Others	0.74%	9,664,807		9,664,807


CITIC Securities - CITIC Bank - CITIC Securities Outstanding Growth Two- Year Holding Period Hybrid Collective Asset Management Plan	Others	0.68%	8,958,645		8,958,645


Taikang Life Insurance - Unit-linked - Innovation Power	Others	0.67%	8,773,968		8,773,968


National Social Security Fund Portfolio 101	Others	0.59%	7,749,378		7,749,378


		1. Among the top ten shareholders mentioned above, Guangdong Zhongshun Paper
		Group Co., Ltd. and Chung Shun Co. are the enterprises controlled by actual controllers
Description on the related relationship or		of the Company, i.e. Deng Yingzhong, Deng Guanbiao and Deng Guanjie. That is,
		Guangdong Zhongshun Paper Group Co., Ltd. and Chung Shun Co. are related parties.
parties acting-in-concert arrangements
		Mr. Yue Yong is an incumbent senior manager of the Company.
among the above shareholders
		2. It is unknown to the Company whether there is related party relationship among other

		shareholders, or whether there is acting-in-concert among other shareholders as
		stipulated in the_Administrative Measuresfor the Disclosure of Information on Changes_

C&S Paper Co., Ltd. Semi-annual Report 2021

in Shareholders’ Shareholding of Listed Companies .

	in Shareholders’ Shareholding of Listed Companies.	in Shareholders’ Shareholding of Listed Companies.	in Shareholders’ Shareholding of Listed Companies.	in Shareholders’ Shareholding of Listed Companies.
Description on entrusting/being entrusted
with voting rights and waver of voting	None
rights by the aforementioned
shareholders:
	There is a special repurchase account “C&S Paper Special Repurchase Securities
Description on special repurchase
	Account” among the top 10 shareholders. As of the end of the reporting period, this
account among top 10 shareholders (if
	repurchase account held 20,431,077 shares, with a shareholding ratio of 1.56%. Pursuant
any) (see note 11)
	to relevant regulations, it is not included in the list of top 10 shareholders.

Shareholdings of top 10 ordinary shareholders not subject to selling restrictions
		Number of ordinary shares held at the end of the	Type of shares
Name of shareholder		reporting period not subject to selling
			Type of shares	Number of shares
		restrictions

Guangdong Zhongshun Paper Group Co., Ltd.		375,655,958	RMB-
			denominated	375,655,958
			ordinary shares
Chung Shun Co.		266,504,789	RMB-
			denominated	266,504,789
			ordinary shares
Hong Kong Securities Clearing Co., Ltd.		93,436,636	RMB-
			denominated	93,436,636
			ordinary shares
National Social Security Fund Portfolio 406		13,112,327	RMB-
			denominated	13,112,327
			ordinary shares
ICBC - Fuguo Tianhui Select Growth Hybrid Securities Investment Fund (LOF)		10,303,557	RMB-
			denominated	10,303,557
			ordinary shares
CCB - Fuguo Value Creation Hybrid Securities Investment Fund		9,664,807	RMB-
			denominated	9,664,807
			ordinary shares
CITIC Securities - CITIC Bank - CITIC Securities Outstanding Growth Two-Year Holding Period Hybrid Collective Asset Management Plan		8,958,645
			RMB-
			denominated	8,958,645
			ordinary shares

Taikang Life Insurance - Unit-linked - Innovation Power		8,773,968	RMB-
			denominated	8,773,968
			ordinary shares
National Social Security Fund Portfolio 101		7,749,378	RMB-
			denominated	7,749,378
			ordinary shares
Yue Yong		1,761,936	RMB-
			denominated	1,761,936
			ordinary shares
	1. Among the top ten shareholders mentioned above, Guangdong Zhongshun Paper
Description on the related relationship or
	Group Co., Ltd. and Chung Shun Co. are the enterprises controlled by actual controllers
parties acting-in-concert among the top
	of the Company, i.e. Deng Yingzhong, Deng Guanbiao and Deng Guanjie. That is,
ten ordinary shareholders without selling
	Guangdong Zhongshun Paper Group Co., Ltd. and Chung Shun Co. are related parties.
restrictions and between the top ten
	Mr. Yue Yong is an incumbent senior manager of the Company.
ordinary shareholders without selling
restrictions and the top ten ordinary	2. It is unknown to the Company whether there is related party relationship among other
shareholders	shareholders, or whether there is acting-in-concert among other shareholders as
	stipulated in the_Administrative Measuresfor the Disclosure of Information on Changes_

Among the top ten shareholders mentioned above, Guangdong Zhongshun Paper Description on the related relationship or Group Co., Ltd. and Chung Shun Co. are the enterprises controlled by actual controllers parties acting-in-concert among the top of the Company, i.e. Deng Yingzhong, Deng Guanbiao and Deng Guanjie. That is, ten ordinary shareholders without selling Guangdong Zhongshun Paper Group Co., Ltd. and Chung Shun Co. are related parties. restrictions and between the top ten Mr. Yue Yong is an incumbent senior manager of the Company. ordinary shareholders without selling 2. It is unknown to the Company whether there is related party relationship among other restrictions and the top ten ordinary shareholders shareholders, or whether there is acting-in-concert among other shareholders as stipulated in the Administrative Measures for the Disclosure of Information on Changes

C&S Paper Co., Ltd. Semi-annual Report 2021

in Shareholders’ Shareholding of Listed Companies .

Whether the top ten ordinary shareholders and the top ten shareholders without selling restrictions conducted the agreed repurchase transaction during the reporting period

□ Yes √ No

The Company’s top ten ordinary shareholders and top ten ordinary shareholders without selling restrictions did not conduct agreed repurchase transactions during the reporting period.

IV. Changes in Shareholding of Directors, Supervisors and Senior Management

√ Applicable □ Not applicable

							Number of
								Number of	Number of
			Number of h hld	Increase of	Decrease	Number of	shares subject t lli	shares subject	shares subject to
Name	Position	Position	sares e at the bii	shares	of shares	shares held	o seng restrictions td t th	to selling	selling
		status		during the	during the	at the end		restrictions	restrictions
			egnnng of the year	year	year	of the year	grane a e beginning of	granted in the	granted at the
							the period	period	end of the period

Deng
	Director	Incumbent	6,752,811			6,752,811
Yingzhong

	Chairman,
Liu Peng		Incumbent		61,300		61,300
	President

Deng	Vice
		Incumbent	4,957,473			4,957,473
Guanbiao	Chairman

Deng	Vice
		Incumbent	1,200,974			1,200,974
Guanjie	Chairman

	Director,
Liu
	Vice	Incumbent	2,410,550		601,200	1,809,350
Jinfeng
	President

	Independe
He Haidi		Incumbent
	nt Director

He	Independe
		Incumbent
Guoquan	nt Director

	Independe
Liu Die		Incumbent
	nt Director

	Vice
Yue Yong		Incumbent	10,537,741		872,500	9,665,241
	President

Ye	Vice
		Incumbent	150,000			150,000
Longfang	President

	Vice
Li Zhaojin		Incumbent		10,800		10,800
	President

Deng	Vice
		Incumbent		21,100		21,100
Wenxi	President

Zhang	Vice
		Incumbent
Yang	President

Dong Ye	Chief	Incumbent	228,725			228,725

C&S Paper Co., Ltd. Semi-annual Report 2021

	Financial
	Officer
	Chairman
Chen	of the
	Board of	Incumbent		5,000		5,000
Haiyuan
	Supervisor
	s
Liang
	Supervisor	Incumbent
Yongliang

Li
	Supervisor	Resigned	62,280	3,000		65,280
Youquan

	Director,
Dai Zhenji	Joint	Resigned	1,670,000	300,000		1,970,000
	President
Deng
	Chairman	Resigned
Yingzhong

Deng
	President	Resigned
Guanbiao

	Board
Zhou	Secretary,	Resigned	498,672		124,600	374,072
Qichao	Vice
	President
Yue Yong	Director	Resigned
Zeng Yi	Director	Resigned
Huang	Independe
		Resigned
Hongyan	nt Director

Ge	Independe
		Resigned
Guangrui	nt Director

Total	--	--	28,469,226	401,200	1,598,300	27,272,126	0	0	0

V. Changes of Shareholders and Actual Controllers

Changes of controlling shareholders during the reporting period

□ Applicable √ Not applicable

There was no change of the Company’s controlling shareholder during the reporting period. Changes of actual controllers during the reporting period

□ Applicable √ Not applicable

There was no change of the Company’s actual controllers during the reporting period.

C&S Paper Co., Ltd. Semi-annual Report 2021

Section VIII Particulars of Preference Shares

□ Applicable √ Not applicable

The Company had no preference shares during the reporting period.

C&S Paper Co., Ltd. Semi-annual Report 2021

Section IX Corporate Bonds

□ Applicable √ Not applicable

C&S Paper Co., Ltd. Semi-annual Report 2021

Section X Financial Report

I. Audit Report

Whether the Semi-annual Report has been audited

□ Yes √ No

The Semi-annual Report of the Company has not been audited.

II. Financial Statements

Unit of financial statements: RMB

1. Consolidated balance sheet

Prepared by: C&S Paper Co., Ltd.

June 30, 2021

Unit: RMB

Item	June 30, 2021	December 31, 2020
Current assets:
Monetary funds	788,702,136.99	1,125,196,199.56
Settlement reserve
Lending to banks and other

financial institutions

Tradable financial assets
Derivative financial assets
Notes receivable	1,513,142.38	724,419.74
Accounts receivable	933,313,137.98	1,051,423,939.59
Accounts receivable financing
Prepayments	12,834,587.00	26,819,108.57
Premium receivable
Reinsurance payables
Reinsurance contract reserves

receivable

Other receivables	21,117,810.56	15,824,945.56
Including: Interest receivable
Dividends receivable
Financial assets held under resale

agreements

Inventory	1,624,309,444.82	1,661,274,495.32

C&S Paper Co., Ltd. Semi-annual Report 2021

Contract assets
Assets held for sale	57,073,059.69	57,073,059.69
Non-current assets due within one

year

Other current assets	34,666,236.56	101,584,569.30
Total current assets	3,473,529,555.98	4,039,920,737.33
Non-current assets:
Loans and advances to customers
Investments in creditor’s rights
Investments in other creditor’s

rights

Long-term receivable
Long-term equity investment
Investment in other equity

instruments

Other non-current financial assets
Investment property	33,856,923.84	34,575,365.94
Fixed assets	3,182,792,165.52	2,792,587,302.21
Construction work in progress	55,534,528.69	275,904,617.95
Productive biological assets
Oil & gas assets
Right-of-use assets	11,151,372.57
Intangible assets	169,199,442.04	169,355,772.24
Development expenses
Goodwill	64,654.15	64,654.15
Long-term deferred expenses	22,695,522.53	26,635,983.14
Deferred income tax assets	145,176,431.76	111,367,362.66
Other non-current assets	44,934,505.84	28,027,952.15
Total non-current assets	3,665,405,546.94	3,438,519,010.44
Total assets	7,138,935,102.92	7,478,439,747.77
Current liabilities:
Short-term borrowings		142,942,941.34
Borrowings from PBC
Placements from banks and other

financial institutions

Tradable financial liabilities
Derivative financial liabilities
Notes payable	289,707,176.43	234,887,563.22
Accounts payable	723,033,087.39	761,519,389.26
Payments received in advance
Contract liabilities	103,501,369.49	137,333,617.40
Proceeds from financial assets sold

under repo

C&S Paper Co., Ltd. Semi-annual Report 2021

Customer bank deposits and due to

banks and other financial institutions

Funds from securities trading

agency

Funds from securities underwriting

agency

Employee remuneration payable	111,500,389.45	123,524,627.11
Tax and fees payable	77,697,704.37	112,608,054.87
Other payables	796,391,000.45	754,844,580.09
Including: Interests payable
Dividends payable	1,594,446.41	1,437,466.77
Transaction fee and commission

receivable

Reinsurance payable
Liabilities held for sale
Non-current liabilities due within
	6,038,594.62
one year

Other current liabilities	13,400,882.00	17,628,086.63
Total current liabilities	2,121,270,204.20	2,285,288,859.92
Non-current liabilities:
Insurance contract reserves
Long-term borrowings
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities	5,526,106.56
Long-term payable
Long-term employee remuneration

payable

Provision
Deferred income	112,092,990.63	115,101,158.13
Deferred income tax liabilities	47,103,893.91	35,903,653.30
Other non-current liabilities
Total non-current liabilities	164,722,991.10	151,004,811.43
Total liabilities	2,285,993,195.30	2,436,293,671.35
Owner’s equity:
Share capital	1,311,043,971.00	1,311,487,077.00
Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserve	941,625,561.08	907,006,505.05
Less: Treasury shares	599,354,148.06	96,480,911.29
Other comprehensive income
Special reserves

C&S Paper Co., Ltd. Semi-annual Report 2021

Surplus reserves	61,469,258.27	61,469,258.27
General reserves
Retained earnings	3,137,073,935.13	2,858,664,147.39
Total equity attributable to owners of
	4,851,858,577.42	5,042,146,076.42
the parent company

Equities of minority shareholders	1,083,330.20
Total owner’s equity	4,852,941,907.62	5,042,146,076.42
Total liabilities and owners’ equities	7,138,935,102.92	7,478,439,747.77

Legal representative: Liu Peng Person in charge of accounting: Dong Ye Person in charge of accounting department: Xu Xianjing

2. Balance sheet of the Parent Company

Unit: RMB

Item	June 30, 2021	December 31, 2020
Current assets:
Monetary funds	83,716,953.94	170,229,178.13
Tradable financial assets
Derivative financial assets
Notes receivable
Accounts receivable	180,374,886.52	92,647,372.33
Accounts receivable financing
Prepayments	9,452,593.95	7,940,396.34
Other receivables	114,345,050.47	136,987,584.64
Including: Interest receivable
Dividends receivable
Inventory	172,205,617.01	156,605,546.36
Contract assets
Assets held for sale
Non-current assets due within one

year

Other current assets	2,287,198.40	52,517,725.87
Total current assets	562,382,300.29	616,927,803.67
Non-current assets:
Investments in creditor’s rights
Investments in other creditor’s

rights

Long-term receivable
Long-term equity investment	1,939,122,205.28	1,928,113,219.50
Investment in other equity

instruments

Other non-current financial assets

C&S Paper Co., Ltd. Semi-annual Report 2021

Investment property	17,549,963.77	17,939,329.51
Fixed assets	248,258,276.83	257,354,688.59
Construction work in progress	544,254.89
Productive biological assets
Oil & gas assets
Right-of-use assets	2,054,171.93
Intangible assets	26,626,212.20	25,205,232.21
Development expenses
Goodwill
Long-term deferred expenses
Deferred income tax assets	65,222,700.02	46,811,106.77
Other non-current assets	16,107,417.95	2,619,959.27
Total non-current assets	2,315,485,202.87	2,278,043,535.85
Total assets	2,877,867,503.16	2,894,971,339.52
Current liabilities:
Short-term borrowings
Tradable financial liabilities
Derivative financial liabilities
Notes payable
Accounts payable	552,768,863.59	420,061,168.44
Payments received in advance
Contract liabilities	43,205,322.20	17,388,431.01
Employee remuneration payable	37,443,890.70	44,678,713.21
Tax and fees payable	5,413,588.15	5,995,417.05
Other payables	93,744,117.45	126,072,040.24
Including: Interests payable
Dividends payable	1,594,446.41	1,437,466.77
Liabilities held for sale
Non-current liabilities due within
	733,541.13
one year

Other current liabilities	5,616,691.89	2,260,496.03
Total current liabilities	738,926,015.11	616,456,265.98
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preference shares
Perpetual bonds
Lease liabilities	1,331,461.99
Long-term payable
Long-term employee remuneration

payable

Provision
Deferred income	5,251,791.53	5,855,467.25

C&S Paper Co., Ltd. Semi-annual Report 2021

Deferred income tax liabilities	7,250,149.26	7,202,336.33
Other non-current liabilities
Total non-current liabilities	13,833,402.78	13,057,803.58
Total liabilities	752,759,417.89	629,514,069.56
Owner’s equity:
Share capital	1,311,043,971.00	1,311,487,077.00
Other equity instruments
Including: Preference shares
Perpetual bonds
Capital reserve	861,277,099.91	831,693,206.19
Less: Treasury shares	599,354,148.06	96,480,911.29
Other comprehensive income
Special reserves
Surplus reserves	61,347,923.99	61,347,923.99
Retained earnings	490,793,238.43	157,409,974.07
Total owner’s equity	2,125,108,085.27	2,265,457,269.96
Total liabilities and owners’ equities	2,877,867,503.16	2,894,971,339.52

3. Consolidated income statement

Unit: RMB

Item	Half-Year of 2021	Half-Year of 2020
I. Total Operating Income	4,247,641,836.38	3,616,201,399.80
Including: Operating income	4,247,641,836.38	3,616,201,399.80
Interest income
Gross earned premiums
Service charge and

commission income

II. Total Operating Cost	3,767,785,569.02	3,081,938,688.14
Including: Operating costs	2,562,244,166.21	1,931,406,918.16
Interest expenses
Service charge and

commission expenses

Surrender value
Net compensation expenses
Net appropriation of

insurance reserve

Policy dividends expenses
Reinsurance costs
Tax and surcharges	29,251,004.43	26,920,007.36
Selling expenses	915,478,651.72	848,071,082.60
Administrative expenses	165,200,078.38	185,701,854.01
R&D expenses	97,414,812.32	90,860,828.24

C&S Paper Co., Ltd. Semi-annual Report 2021

Finance expenses	-1,803,144.04	-1,022,002.23
Including: Interest fees	975,546.01	1,140,788.29
Interest income	6,623,270.61	4,060,998.02
Plus: Other income	11,671,362.52	15,174,645.20
Return on investment (“-”
	358,473.15	2,287,274.87
indicates loss)

Including: Return on
investment in associates and joint
ventures
Income from the
derecognition of financial assets
measured at amortized cost
Exchange gains (“-” indicates

loss)

Gains from net exposure

hedging (“-” indicates loss)

Gains from changes in fair

value (“-” indicates loss)

Credit impairment losses (“-”
	1,301,606.93	-1,423,699.75
indicates loss)

Asset impairment losses (“-”
	-2,753,828.11	-850,381.40
indicates loss)

Return on disposal of assets (“-
	-259,896.46	-896,870.05
” indicates loss)

III. Operating Profit (“-” indicates loss)	490,173,985.39	548,553,680.53
Plus: Non-operating income	1,708,366.54	3,169,241.16
Less: Non-operating expenditure	3,638,183.86	13,240,183.16
IV. Total Profit (“-” indicates total loss)	488,244,168.07	538,482,738.53
Less: Income tax expense	81,099,520.72	85,783,253.92
V. Net Profit (“-” indicates net loss)	407,144,647.35	452,699,484.61
i. Classified by operation continuity
1. Net profit from continued
	407,144,647.35	452,699,484.61
operation (“-” indicates net loss)

2. Net profit from discontinued

operation (“-” indicates net loss)

ii. Classified by attribution of

ownership

1. Net profit attributable to owners
	407,161,317.15	452,699,484.61
of the parent company

2. Minority shareholders’ profits and
	-16,669.80
losses

VI. Net Amount of Other Comprehensive

Income after Tax

Total other comprehensive after-tax net
income attributable to owners of the
parent company
i. Other comprehensive income not

able to be reclassified into theprofit or

C&S Paper Co., Ltd. Semi-annual Report 2021

loss
1. Changes of re-

measurement of the defined benefit plan

2. Other comprehensive
income that cannot be transferred into the
profit or loss under equity method
3. Changes in fair value of

investment in other equity instruments

4. Changes in fair value of

credit risk of the enterprise

5. Others
ii. Other comprehensive income

reclassified into the profit or loss

1. Other comprehensive
income to be transferred into the profit or
loss under equity method
2. Changes in fair value of

investment in other creditor’s rights

3. Financial assets
reclassified into other comprehensive
income
4. Impairment provision for
credit of investment in other creditor’s
rights
5. Reserve of cash flow

hedge

6. Converted difference in

foreign currency financial statements

7. Others
Total other comprehensive after-tax net
income attributable to minority
shareholders
VII. Total Comprehensive Income	407,144,647.35	452,699,484.61
Total comprehensive income
attributable to owners of the parent	407,161,317.15	452,699,484.61
company
Total comprehensive income
	-16,669.80
attributable to minority shareholders

VIII. Earnings per Share:
i. Basic earnings per share	0.3140	0.3519
ii. Diluted earnings per share	0.3109	0.3462

For business combinations of the current period under common control, the net profit realized by the combined party before the combination is: RMB0.00; the net profit realized by the combined party in last period is: RMB0.00.

Legal representative: Liu Peng Person in charge of accounting: Dong Ye Person in charge of accounting department: Xu Xianjing

C&S Paper Co., Ltd. Semi-annual Report 2021

4. Income statement of the Parent Company

Unit: RMB

Item	Half-Year of 2021	Half-Year of 2020
I. Operating Income	916,066,342.46	853,891,264.03
Less: Operating cost	788,799,370.03	712,614,977.74
Tax and surcharges	2,176,306.49	2,631,659.04
Selling expenses	87,176,883.65	66,501,515.28
Administrative expenses	65,964,350.45	91,173,785.60
R&D expenses
Finance expenses	-884,099.85	672,377.63
Including: Interest fees	26,220.26
Interest income	809,358.94	1,722,164.19
Plus: Other income	1,516,457.89	1,098,835.80
Return on investment (“-”
	482,704,072.79	142,109,515.77
indicates loss)

Including: Return on
investment in associates and joint
ventures
Profits from
derecognition of financial assets at
amortized cost
Gains from net exposure

hedging (“-” indicates loss)

Gains from changes in fair

value (“-” indicates loss)

Credit impairment losses (“-”
	-573,774.23	-1,477,826.65
indicates loss)

Asset impairment losses (“-”
	-15,126.42	-235,210.66
indicates loss)

Return on disposal of assets
		-613,479.84
(“-” indicates loss)

II. Operating Profit (“-” indicates loss)	456,465,161.72	121,178,783.16
Plus: Non-operating income	204,390.14	367,540.33
Less: Non-operating expenditure	1,457,600.53	11,762,151.77
III. Total Profit (“-” indicates total loss)	455,211,951.33	109,784,171.72
Less: Income tax expense	-6,922,842.44	-3,727,647.46
IV. Net Profit (“-” indicates net loss)	462,134,793.77	113,511,819.18
i. Net profit from continued
	462,134,793.77	113,511,819.18
operation (“-” indicates net loss)

ii. Net profit from discontinued

operation (“-” indicates net loss)

V. Net Amount of Other Comprehensive

Income after Tax

i. Other comprehensive income not

able to be reclassified into theprofit or

C&S Paper Co., Ltd. Semi-annual Report 2021

loss
1. Changes of re-

measurement of the defined benefit plan

2. Other comprehensive
income that cannot be transferred into
the profit or loss under equity method
3. Changes in fair value of

investment in other equity instruments

4. Changes in fair value of

credit risk of the enterprise

5. Others
ii. Other comprehensive income

reclassified into the profit or loss

1. Other comprehensive
income to be transferred into the profit
or loss under equity method
2. Changes in fair value of

investment in other creditor’s rights

3. Financial assets
reclassified into other comprehensive
income
4. Impairment provision for
credit of investment in other creditor’s
rights
5. Reserve of cash flow

hedge

6. Converted difference in

foreign currency financial statements

7. Others
VI. Total Comprehensive Income	462,134,793.77	113,511,819.18
VII. Earnings per Share:
i. Basic earnings per share
ii. Diluted earnings per share

5. Consolidated cash flow statement

Unit: RMB

Item	Half-Year of 2021	Half-Year of 2020
I. Cash Flows from Operating Activities:
Cash received from sale of goods or
	4,360,141,241.09	3,613,430,926.28
rendering of services

Net increase in deposits from
customers, banks and non-bank financial
institutions
Net increase in due to central banks
Net increase in placements from other

financial institutions

C&S Paper Co., Ltd. Semi-annual Report 2021

Cash received from the premium of

direct insurance contracts

Net cash from reinsurance business
Net increase in deposits and

investment of the insured

Cash obtained from interest, net fee

and commission

Net increase in placements from banks

and other financial institutions

Net increase in repo service fund
Net cash from agent securities trading
Tax rebates		120,214.00
Cash received related to other
	38,362,676.67	76,989,647.10
operating activities

Sub-total of cash inflow from operating
	4,398,503,917.76	3,690,540,787.38
activities

Cash paid for goods purchased and
	2,487,866,757.79	2,226,834,895.97
services rendered

Net loans and advances to customers
Net increase in deposits with the
central bank, banks and non-bank financial
institutions
Cash paid for claims of direct

insurance contracts

Net increase in placements with banks

and non-bank financial institutions

Cash paid for interest, fee and

commission

Cash paid for dividends of the insured
Cash paid to and on behalf of
	435,057,207.01	340,957,388.41
employees

Tax payments	310,071,504.86	259,738,653.85
Cash payments related to other
	427,642,659.91	358,451,260.82
operating activities

Sub-total of cash outflow from operating
	3,660,638,129.57	3,185,982,199.05
activities

Net cash flows from operating activities	737,865,788.19	504,558,588.33
II. Cash Flows from Investing Activities:
Cash from realization of investment
Cash received from the return on
	358,473.15	2,287,274.87
investments

Net cash received from the disposal of
fixed assets, intangible assets, and other	10,542,186.47	30,060,788.00
long-term assets
Net amount of cash received from the
disposal of subsidiaries and other operating
organizations
Cash received related to other	50,000,000.00	127,105,000.00

C&S Paper Co., Ltd. Semi-annual Report 2021

investing activities
Sub-total of cash inflow from investing
	60,900,659.62	159,453,062.87
activities

Cash paid for the acquisition and
construction of fixed assets, intangible	328,193,755.53	188,914,982.57
assets, and other long-term assets
Cash paid for investments
Net increase in pledged loans
Net amount of cash paid for
acquisition of subsidiaries and other
operating organizations
Cash payments related to other
		212,400,000.00
investing activities

Sub-total of cash outflow from investing
	328,193,755.53	401,314,982.57
activities

Net cash flows from investing activities	-267,293,095.91	-241,861,919.70
III. Cash Flows from Financing Activities:
Cash received from capital
	11,355,276.29
contribution

Including: Proceeds received by
subsidiaries from minority shareholders’
investment
Cash received from borrowings	13,042,460.23	257,722,148.28
Cash received related to other

financing activities

Sub-total of cash inflow from financing
	24,397,736.52	257,722,148.28
activities

Cash paid for repayments of
	155,939,151.58	164,917,045.18
borrowings

Cash payment for interest expenses
	129,388,592.82	98,173,895.03
and distribution of dividends or profits

Including: Dividend and profit paid by

subsidiaries to minority shareholders

Cash payments related to other
	554,697,666.71	40,446,866.90
financing activities

Sub-total of cash outflow from financing
	840,025,411.11	303,537,807.11
activities

Net cash flows from financing activities	-815,627,674.59	-45,815,658.83
IV. Effect of Exchange Rate Changes on
	-3,754,951.08	3,555,983.87
Cash and Cash Equivalents

V. Net Increase in Cash and Cash
	-348,809,933.39	220,436,993.67
Equivalents

Plus: Opening balance of cash and
	1,050,034,135.72	675,996,852.97
cash equivalents

VI. Closing Balance of Cash and Cash
	701,224,202.33	896,433,846.64
Equivalents

C&S Paper Co., Ltd. Semi-annual Report 2021

6. Cash flow statement of the Parent Company

Unit: RMB

Item	Half-Year of 2021	Half-Year of 2020
I. Cash Flows from Operating Activities:
Cash received from sale of goods or
	825,204,668.76	746,412,698.39
rendering of services

Tax rebates		120,214.00
Cash received related to other operating
	350,780,128.27	987,204,013.79
activities

Sub-total of cash inflow from operating
	1,175,984,797.03	1,733,736,926.18
activities

Cash paid for goods purchased and
	628,652,955.42	491,197,761.73
services rendered

Cash paid to and on behalf of employees	105,969,767.52	66,675,479.70
Tax payments	12,714,786.96	21,863,845.36
Cash payments related to other operating
	361,078,648.58	428,397,315.97
activities

Sub-total of cash outflow from operating
	1,108,416,158.48	1,008,134,402.76
activities

Net cash flows from operating activities	67,568,638.55	725,602,523.42
II. Cash Flows from Investing Activities:
Cash from realization of investment
Cash received from the return on
	482,704,072.79	141,992,629.47
investments

Net cash received from the disposal of
fixed assets, intangible assets, and other long-
term assets
Net amount of cash received from the
disposal of subsidiaries and other operating
organizations
Cash received related to other investing
	50,000,000.00	127,105,000.00
activities

Sub-total of cash inflow from investing
	532,704,072.79	269,097,629.47
activities

Cash paid for the acquisition and
construction of fixed assets, intangible assets,	21,866,189.95	18,608,797.77
and other long-term assets
Cash paid for investments	5,000,000.00	665,600,000.00
Net amount of cash paid for acquisition of

subsidiaries and other operating organizations

Cash payments related to other investing
		152,400,000.00
activities

Sub-total of cash outflow from investing
	26,866,189.95	836,608,797.77
activities

Net cash flows from investing activities	505,837,882.84	-567,511,168.30
III. Cash Flows from Financing Activities:

C&S Paper Co., Ltd. Semi-annual Report 2021

Cash received from capital contribution	10,255,276.29
Cash received from borrowings
Cash received related to other financing

activities

Sub-total of cash inflow from financing
	10,255,276.29
activities

Cash paid for repayments of borrowings
Cash payment for interest expenses and
	128,594,549.77	96,955,934.28
distribution of dividends or profits

Cash payments related to other financing
	574,898,356.02	31,482,661.04
activities

Sub-total of cash outflow from financing
	703,492,905.79	128,438,595.32
activities

Net cash flows from financing activities	-693,237,629.50	-128,438,595.32
IV. Effect of Exchange Rate Changes on Cash
	-783.27	259,845.46
and Cash Equivalents

V. Net Increase in Cash and Cash Equivalents	-119,831,891.38	29,912,605.26
Plus: Opening balance of cash and cash
	169,851,203.76	156,151,560.82
equivalents

VI. Closing Balance of Cash and Cash
	50,019,312.38	186,064,166.08
Equivalents

C&S Paper Co., Ltd. Semi-annual Report 2021

7. Consolidated statement of changes in owner’s equity

Amount of the current period

Unit: RMB

									Half-Year of 2021	Half-Year of 2021
					Owner’s equity attributable to the				Parent Company
		Other equity
							Other
		instruments
Item							compr	Specia		Gener				Equity of	Total owner’s
		Pref eren ce shar es
	Share capital		Perp etual bond s		Capital reserve	Less: Treasury	ehensi	l	Surplus	al	Retained earnings	Others	Subtotal	minority	equity
				Othe rs		shares	ve	reserv	reserves	reserv				shareholders

							incom	es		es
							e

I. Balance at
the End of	1,311,487,077.00				907,006,505.05	96,480,911.29			61,469,258.27		2,858,664,147.39		5,042,146,076.42		5,042,146,076.42
Last Year
Plus:
Alternation to

accounting

policies

Correction to
previous

errors

Business
combinations
involving
enterprises
under
common

C&S Paper Co., Ltd. Semi-annual Report 2021

control


Others

II. Balance at
the Beginning	1,311,487,077.00	907,006,505.05	96,480,911.29	61,469,258.27	2,858,664,147.39	5,042,146,076.42		5,042,146,076.42
of the Year
III. Changes in
the Period (“-”
	-443,106.00	34,619,056.03	502,873,236.77		278,409,787.74	-190,287,499.00	1,083,330.20	-189,204,168.80
Indicates

Decrease)
i. Total
comprehensiv					407,161,317.15	407,161,317.15	-16,669.80	407,144,647.35
e income
ii. Capital
contributed or
	-443,106.00	34,619,056.03	502,873,236.77			-468,697,286.74	1,100,000.00	-467,597,286.74
decreased by

owner
1 Ordinary
shares
	1,578,199.00	15,730,354.61				17,308,553.61	1,100,000.00	18,408,553.61
contributed by

owners
2 Capital
contributed by
owners of
other equity
instruments
3 Share based
payments
	-2,021,305.00	18,888,701.42	-29,732,395.14			46,599,791.56		46,599,791.56
recognized as

owner’s equity
4 Others			532,605,631.91			-532,605,631.91		-532,605,631.91

C&S Paper Co., Ltd. Semi-annual Report 2021

iii. Profit
	-128,751,529.41	-128,751,529.41	-128,751,529.41
distribution

1
Appropriation

of surplus

reserves
2
Appropriation

of general risk

reserves
3 Distribution
to owners (or	-128,751,529.41	-128,751,529.41	-128,751,529.41
shareholders)
4 Others
iv. Interior
balance from
owner’s equity
1 Added
capital (or
share capital)
from capital
reserves
2 Added
capital (or
share capital)
from surplus
reserves
3
Compensation
of loss with
surplus
reserves

					C&S Paper Co.,Ltd. Semi-annual Report 2021	C&S Paper Co.,Ltd. Semi-annual Report 2021	C&S Paper Co.,Ltd. Semi-annual Report 2021	C&S Paper Co.,Ltd. Semi-annual Report 2021
4 Retained
earnings of
carry-over of
the defined
benefit plan
5 Retained
earnings of
carry-over of

other

comprehensiv
e income
6 Others
v. Special

reserves

1
Appropriation
for the period
2 Use for the

period

vi. Others
IV. Closing								4,852,941,907.62
Balance of the	1,311,043,971.00	941,625,561.08	599,354,148.06	61,469,258.27	3,137,073,935.13	4,851,858,577.42	1,083,330.20
Period

C&S Paper Co., Ltd. Semi-annual Report 2021

Amount of last period

Unit: RMB

									Half-Year of 2020	Half-Year of 2020
					Owner’s equity attributable to the				Parent Company
		Other equity
					Capital reserve		Other
		instruments
Item							compr	Specia		Gener				Equity of	Total owner’s
		Pref eren ce shar es
	Share capital		Perp etual bond s			Less: Treasury	ehensi	l	Surplus	al	Retained earnings	Others	Subtotal	minority	equity
				Othe rs		shares	ve	reserv	reserves	reserv				shareholders

							incom	es		es
							e

I. Balance at
the End of	1,308,891,273.00				760,731,416.57	104,792,649.00			53,205,582.86		2,058,968,835.80		4,077,004,459.23		4,077,004,459.23
Last Year
Plus:
Alternation to

accounting

policies

Correction to
previous

errors

Business
combinations
involving
enterprises

under
common
control

					C&S Paper Co.,Ltd. Semi-annual Report 2021	C&S Paper Co.,Ltd. Semi-annual Report 2021	C&S Paper Co.,Ltd. Semi-annual Report 2021
Others
II. Balance at
the Beginning	1,308,891,273.00	760,731,416.57	104,792,649.00	53,205,582.86	2,058,968,835.80	4,077,004,459.23	4,077,004,459.23
of the Year
III. Changes in
the Period (“-”
	1,788,786.00	97,621,072.22	-1,072,825.04		354,753,498.45	455,236,181.71	455,236,181.71
Indicates

Decrease)
i. Total
comprehensiv					452,699,484.61	452,699,484.61	452,699,484.61
e income
ii. Capital
contributed or
	1,788,786.00	97,621,072.22	-1,072,825.04			100,482,683.26	100,482,683.26
decreased by

owner
1 Ordinary
shares
	2,591,508.00	19,622,899.06				22,214,407.06	22,214,407.06
contributed by

owners
2 Capital
contributed by
owners of
other equity
instruments
3 Share based
payments
	-802,722.00	77,998,173.16	-28,753,546.80			105,948,997.96	105,948,997.96
recognized as

owner’s equity
4 Others			27,680,721.76			-27,680,721.76	-27,680,721.76
iii. Profit
					-97,945,986.16	-97,945,986.16	-97,945,986.16
distribution

1

C&S Paper Co., Ltd. Semi-annual Report 2021

Appropriation
of surplus
reserves
2
Appropriation

of general risk

reserves
3 Distribution
to owners (or	-97,945,986.16	-97,945,986.16	-97,945,986.16
shareholders)
4 Others
iv. Interior
balance from
owner’s equity
1 Added
capital (or
share capital)
from capital
reserves
2 Added
capital (or
share capital)
from surplus
reserves
3
Compensation
of loss with
surplus
reserves
4 Retained
earnings of
carry-over of

C&S Paper Co., Ltd. Semi-annual Report 2021

the defined
benefit plan
5 Retained
earnings of
carry-over of

other

comprehensiv
e income
6 Others
v. Special

reserves

1
Appropriation
for the period
2 Use for the

period

vi. Others
IV. Closing
Balance of the	1,310,680,059.00	858,352,488.79	103,719,823.96	53,205,582.86	2,413,722,334.25	4,532,240,640.94	4,532,240,640.94
Period

8. Statement of changes in owner’s equity of the Parent Company

Amount of the current period

Unit: RMB

						Half-Year of 2021	Half-Year of 2021
		Other equity instruments					Other
Item						Less: Treasury		Special		Retained		Total owner’s
	Share capital	Preferen	Perpetua		Capital reserve		comprehensive		Surplus reserves		Others
				Others		shares		reserves		earnings		equity
		ce	l bonds				income

C&S Paper Co., Ltd. Semi-annual Report 2021


I. Balance at the End of
	1,311,487,077.00	831,693,206.19	96,480,911.29	61,347,923.99	157,409,974.07	2,265,457,269.96
Last Year

Plus: Alternation to

accounting policies

Correction to

previous errors

Others
II. Balance at the
	1,311,487,077.00	831,693,206.19	96,480,911.29	61,347,923.99	157,409,974.07	2,265,457,269.96
Beginning of the Year

III. Changes in the Period
	-443,106.00	29,583,893.72	502,873,236.77		333,383,264.36	-140,349,184.69
(“-” Indicates Decrease)

i. Total comprehensive
					462,134,793.77	462,134,793.77
income

ii. Capital contributed or
	-443,106.00	29,583,893.72	502,873,236.77			-473,732,449.05
decreased by owner

1 Ordinary shares
	1,578,199.00	15,730,354.61				17,308,553.61
contributed by owners

2 Capital contributed by
owners of other equity
instruments
3 Share based payments
recognized as owner’s	-2,021,305.00	13,853,539.11	-29,732,395.14			41,564,629.25
equity
4 Others			532,605,631.91			-532,605,631.91
iii. Profit distribution					-128,751,529.41	-128,751,529.41
1 Appropriation of

surplus reserves

2 Distribution to owners
					-128,751,529.41	-128,751,529.41
(or shareholders)

C&S Paper Co., Ltd. Semi-annual Report 2021

3 Others
iv. Interior balance from

owner’s equity

1 Added capital (or share
capital) from capital
reserves
2 Added capital (or share
capital) from surplus
reserves
3 Compensation of loss

with surplus reserves

4 Retained earnings of
carry-over of the defined
benefit plan
5 Retained earnings of
carry-over of other
comprehensive income
6 Others
v. Special reserves
1 Appropriation for the

period

2 Use for the period
vi. Others
IV. Closing Balance of						2,125,108,085.27
	1,311,043,971.00	861,277,099.91	599,354,148.06	61,347,923.99	490,793,238.43
the Period

C&S Paper Co., Ltd. Semi-annual Report 2021

Amount of last period

Unit: RMB

					Half-Year of 2020	Half-Year of 2020	Half-Year of 2020
		Other equity instruments
Item		Preferen				Less: Treasury	Other	Special	Surplus	Retained		Total owner’s
	Share capital		Perpetua		Capital reserve		comprehensive				Others
		ce	l bonds	Others		shares	income	reserves	reserves	earnings		equity
		shares
I. Balance at the
	1,308,891,273.00				690,241,724.38	104,792,649.00			53,084,248.58	180,966,989.79		2,128,391,586.75
End of Last Year

Plus:
Alternation to
accounting policies
Correction

to previous errors

Others
II. Balance at the
Beginning of the	1,308,891,273.00				690,241,724.38	104,792,649.00			53,084,248.58	180,966,989.79		2,128,391,586.75
Year
III. Changes in the
Period (“-” Indicates	1,788,786.00				91,049,055.52	-1,072,825.04				15,565,833.02		109,476,499.58
Decrease)
i. Total
comprehensive										113,511,819.18		113,511,819.18
income
ii. Capital
contributed or	1,788,786.00				91,049,055.52	-1,072,825.04						93,910,666.56
decreased by owner
1 Ordinary shares
contributed by	2,591,508.00				19,622,899.06							22,214,407.06
owners

C&S Paper Co., Ltd. Semi-annual Report 2021

2 Capital
contributed by

owners of other

equity instruments
3 Share based
payments
	-802,722.00	71,426,156.46	-28,753,546.80		99,376,981.26
recognized as

owner’s equity
4 Others			27,680,721.76		-27,680,721.76
iii. Profit
				-97,945,986.16	-97,945,986.16
distribution

1 Appropriation of

surplus reserves

2 Distribution to
owners (or				-97,945,986.16	-97,945,986.16
shareholders)
3 Others
iv. Interior balance

from owner’s equity

1 Added capital (or
share capital) from
capital reserves
2 Added capital (or
share capital) from
surplus reserves
3 Compensation of
loss with surplus
reserves
4 Retained earnings
of carry-over of the
defined benefit plan
5 Retained earnings

of carry-over of

				C&S Paper Co.,Ltd. Semi-annual Report 2021	C&S Paper Co.,Ltd. Semi-annual Report 2021	C&S Paper Co.,Ltd. Semi-annual Report 2021
other
comprehensive
income
6 Others
v. Special reserves
1 Appropriation for

the period

2 Use for the period
vi. Others
IV. Closing Balance
	1,310,680,059.00	781,290,779.90	103,719,823.96	53,084,248.58	196,532,822.81	2,237,868,086.33
of the Period

C&S Paper Co., Ltd. Semi-annual Report 2021

III. Basic Information of the Company

1. Development history of the Company

C&S Paper Co., Ltd. (hereinafter referred to as “the Company”) is a joint stock limited company restructured from Zhongshan Zhongshun Paper Manufacturing Co., Ltd., with all shareholders of the original company as its initiators. The Company has obtained a business license of enterprise legal person with the registration number of 442000400013713 issued by Guangdong Province Administration for Industry and Commerce on December 31, 2008.

In November 2010, under the approval of the Notice on the Approval of the Initial Public Offering of Shares of C&S Paper Co., Ltd. (CSRC Xu Ke [2010] No. 1539) issued by China Securities Regulatory Commission, the Company issued 40,000,000 RMB-denominated ordinary shares (A shares) to the public, each having a par value of RMB1. The share capital after the public offering was RMB160,000,000.00.

On May 22, 2012, the Company held the 2011 Annual General Meeting of Shareholders and approved the Proposal on the 2011 Profit Distribution Plan , applying for an increase of registered capital by RMB48,000,000.00. With the base number of 160,000,000.00 total shares as at the end of 2011, the Company planned to convert capital reserve into new shares on the basis of three shares for every ten existing shares. The registered capital after the change was RMB208,000,000.00.

On June 3, 2013, the Company held the 2012 Annual General Meeting of Shareholders and approved the Proposal on the 2012 Profit Distribution Plan , applying for an increase of registered capital by RMB104,000,000.00. With the base number of 208,000,000.00 total shares as at the end of 2012, the Company planned to convert capital reserve into new shares on the basis of five shares for every ten existing shares. The registered capital after the change was RMB312,000,000.00.

On May 8, 2014, the Company held the 2013 Annual General Meeting of Shareholders and approved the Proposal on the 2013 Profit Distribution Plan , applying for an increase of registered capital by RMB93,600,000.00. With the base number of 312,000,000.00 total shares as at the end of 2013, the Company planned to convert capital reserve into new shares on the basis of three shares for every ten existing shares. The registered capital after the change was RMB405,600,000.00.

On May 8, 2015, the Company held the 2014 Annual General Meeting of Shareholders and approved the Proposal on the 2014 Profit Distribution Plan , applying for an increase of registered capital by RMB81,120,000.00. With the base number of 405,600,000 total shares as at the end of 2014, the Company planned to convert capital reserve

C&S Paper Co., Ltd. Semi-annual Report 2021

into new shares on the basis of two shares for every ten existing shares. The registered capital after the change was RMB486,720,000.00.

Pursuant to the resolutions of the 7th meeting of the third session of the Board of Directors, the 9th meeting of the third session of the Board of Directors, the third extraordinary general meeting of 2015 and the 10th meeting of the third session of the Board of Directors, the Company planned to grant 17,133,000 restricted RMBdenominated ordinary shares (A shares) to 242 incentive recipients including Liu Jinfeng through private placement, with a par value of RMB1 per share and a grant price of RMB4.25 per share. Upon completion, 16,957,000 restricted RMB-denominated ordinary shares (A shares) were actually granted to a total of 199 incentive recipients with 43 employees withdrawing from the plan. The registered capital after the change was RMB503,677,000.00.

Pursuant to the resolutions of the third extraordinary general meeting of 2015, the 11th meeting of the third session of the Board of Directors and the 9th meeting of the third session of the Board of Supervisors, the Company planned to grant 1,867,000 restricted RMB-denominated ordinary shares (A shares) to 68 incentive recipients including Duan Xianglei through private placement, with a par value of RMB1 per share and a grant price of RMB4.80 per share. Upon completion, 1,847,000 restricted RMB-denominated ordinary shares (A shares) were granted to a total of 54 incentive recipients with 14 employees withdrawing from the plan. The registered capital after the change was RMB505,524,000.00.

On October 24, 2016, at the 15th meeting of the third session of the Board of Directors, the Proposal on the Repurchase and Deregistration of Partial Restricted Stocks under the Company’s Restricted Stock Incentive Plan and Proposal on Changing the Registered Capital and Amending the Articles of Association of the Company were reviewed and approved. Pursuant to the resolution of the meeting of the Board of Directors, the Company applied for the repurchase and deregistration of 266,000 restricted stocks. Among them, the repurchase price of restricted stocks awarded in the first grant was RMB4.25 per share, the repurchase price of reserved restricted stocks was RMB4.80 per share, and the registered capital after the change was RMB505,258,000.00.

On May 10, 2017, the Company held the 2016 Annual General Meeting of Shareholders and approved the Proposal on the 2016 Profit Distribution Plan , applying for an increase of registered capital by RMB252,629,000.00. With the base number of 505,258,000 total shares as at the end of 2016, the Company planned to convert capital reserve into new shares on the basis of five shares for every ten existing shares. The registered capital after the change was RMB757,887,000.00.

Pursuant to the resolutions of the 22nd and 24th meeting of the third session of the Board of Directors in 2017, as

C&S Paper Co., Ltd. Semi-annual Report 2021

some incentive recipients were disqualified to hold incentive stocks after leaving the Company or failing the appraisal, the Company planned to repurchase and deregister the restricted stocks of 35 incentive recipients. Among them, 25 incentive recipients were granted in the first period with 382,462.50 restricted stocks and ten incentive recipients were granted with 39,997.50 reserved restricted stocks. A total of 422,460 shares were repurchased and deregistered. The registered capital after the reduction was RMB757,464,540.00.

On May 8, 2018, the Company held the 2017 Annual General Meeting of Shareholders and approved the Proposal on the 2017 Profit Distribution Plan , applying for an increase of registered capital by RMB530,225,178.00. With the base number of 757,464,540 total shares as at the end of 2016, the Company planned to convert capital reserve into new shares on the basis of seven shares for every ten existing shares. The registered capital after the change was RMB1,287,689,718.00.

Pursuant to the resolution of the 5th meeting of the fourth session of the Board of Directors in 2018, as some incentive recipients were disqualified to hold incentive stocks after leaving the Company or failing the appraisal at the second unlocking period under the Restricted Stock Incentive Plan , the Company planned to repurchase and deregister the restricted stocks of 46 incentive recipients. Among them, 38 incentive recipients were granted in the first period with 985,426 restricted stocks and ten incentive recipients were granted with 11,551 reserved restricted stocks. A total of 996,977 shares were repurchased and deregistered. The registered capital after the reduction was RMB1,286,692,741.00.

Pursuant to the resolutions of the 9th meeting of the fourth session of the Board of Directors and the first extraordinary general meeting in 2019, the Company planned to grant 21,717,500 restricted RMB-denominated ordinary shares (A shares) to 671 incentive recipients including Dong Ye through private placement, with a par value of RMB1 per share. Wherein, 19,675,500 restricted RMB-denominated ordinary shares (A shares) were granted to a total of 569 incentive recipients at the price of RMB4.33, with 102 employees withdrawing from the plan. The registered capital after the change was RMB1,306,368,241.00.

Pursuant to the resolutions of the 12th and 13th meeting of the fourth session of the Board of Directors, as some incentive recipients were disqualified to hold incentive stocks after leaving the Company or failing the appraisal, the Company planned to repurchase and deregister the restricted stocks of 32 incentive recipients. Among them, 22 incentive recipients were granted in the first period with 211,803 restricted stocks and ten incentive recipients were granted with 56,865 reserved restricted stocks. A total of 268,668 shares were repurchased and deregistered. The registered capital after the reduction was RMB1,306,099,573.00.

Pursuant to the Proposal on Granting Reserved Stock Options and Restricted Stocks to Incentive Recipients

100

C&S Paper Co., Ltd. Semi-annual Report 2021

reviewed and approved at the 16th meeting of the fourth session of the Board of Directors in 2019, the Company planned to grant 64 incentive recipients with 3,500,000 restricted stocks with a grant price of RMB7.02 per share. The incentive plan actually granted 46 incentive recipients with 2,791,700 restricted ordinary shares as 18 incentive recipients did not subscribe for the restricted stocks due to resignation or voluntary abandonment and 13 incentive recipients did not fully pay for the subscribed restricted stocks. The registered capital after the grant was RMB1,308,891,273.00.

The 23rd meeting of the fourth session of the Board of Directors and the second extraordinary general meeting of 2020 reviewed and approved the Proposal on the Repurchase and Deregistration of Partial Restricted Stocks Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan . Pursuant to the proposal, as some incentive recipients were disqualified to hold incentive stocks after leaving the Company or failing the appraisal or some recipients passed the appraisal but did not attain a full score and hence could not unlock all the stocks, the Company decided to repurchase and deregister total 802,722 restricted shares of 241 incentive recipients. The registered capital after the reduction was RMB1,308,088,551.00.

The 28th meeting of the fourth session of the Board of Directors and the fifth extraordinary general meeting of 2020 reviewed and approved the Proposal on the Repurchase and Deregistration of Partial Reserved Restricted Stocks under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan . Pursuant to the proposal, as some incentive recipients were disqualified to hold incentive stocks after leaving the Company or failing the appraisal or some recipients passed the appraisal but did not attain a full score and hence could not unlock all the stocks, the Company decided to repurchase and deregister total 211,890 restricted shares of 24 incentive recipients. The registered capital after the reduction was RMB1,307,876,661.00.

At the 23rd meeting of the fourth session of the Board of Directors, the Proposal on Achieving the Exercise Conditions of the First Exercise Period for Stock Options Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan was reviewed and approved. The proposal agreed that the exercise conditions under the first exercise period for the stock options awarded in the first grant had been met as set out in the 2018 Stock Option and Restricted Stock Incentive Plan (Draft) , and the exercise method was independent exercise. The number of incentive recipients in conformity with the exercise conditions reached 2,522 and the number of stock options that had met exercise conditions was 3,431,505. The exercise period was from June 10, 2020 to February 26, 2021. At the 28th meeting of the fourth session of the Board of Directors, the Proposal on Achieving the Exercise Conditions of the First Exercise Period for Reserved Stock Options under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan was reviewed and approved. The proposal

101

C&S Paper Co., Ltd. Semi-annual Report 2021

agreed that the exercise conditions under the first exercise period for the reserved stock options had been met as set out in the 2018 Stock Option and Restricted Stock Incentive Plan (Draft) , and the exercise method was independent exercise. The number of incentive recipients in conformity with the exercise conditions reached 88 and the number of stock options that have met exercise conditions was 640,389. The exercise period was from November 17, 2020 to September 10, 2021. As of December 31, 2020, the incentive recipients who had met the above exercise conditions have successively begun to exercise their rights, and a total of 3,610,416 shares have been subscribed.

As at December 31, 2020, the Company has had a registered capital of RMB1,311,487,077.00 and a share capital of RMB1,311,487,077.00.

At the 5th meeting of the fifth session of the Board of Directors and the third meeting of the fifth session of the Board of Supervisors, the Proposal on Achieving the Exercise Conditions of the Second Exercise Period for Stock Options Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan was reviewed and approved. The proposal agreed that the exercise conditions under the second exercise period for the stock options awarded in the first grant had been met as set out in the 2018 Stock Option and Restricted Stock Incentive Plan (Draft) , and the exercise method was independent exercise. The number of incentive recipients in conformity with the exercise conditions reached 2,274 and the number of stock options that had met exercise conditions was 2,948,559. The exercise period was from June 30, 2021 to February 28, 2022. As of December 31, 2021, the incentive recipients who had met the above exercise conditions have successively begun to exercise their rights, and a total of 1,578,199 shares have been subscribed.

The 5th meeting of the fifth session of the Board of Directors and the fourth extraordinary general meeting of 2021 reviewed and approved the Proposal on the Repurchase and Deregistration of Partial Restricted Stocks Awarded in the First Grant under the Company’s 2018 Stock Option and Restricted Stock Incentive Plan . At the second unlock period for restricted shares awarded in the first grant under the 2018 Stock Option and Restricted Stock Incentive Plan , 35 incentive recipients were disqualified since they left the Company before the unlock, with 1,993,600 restricted shares that had been granted but unlocked; 61 incentive recipients passed the personal appraisal but did not attain a full score and hence could not unlock all the stocks, with 27,705 shares unable to be locked. In June 2021, repurchase and deregistration payments were made to relevant personnel whose shares needed to be repurchased and deregistered, and the follow-up repurchase and deregistration procedures and procedures for changing with the industrial and commercial department are in process.

102

C&S Paper Co., Ltd. Semi-annual Report 2021

2. Registered address, form of organization, and headquarters of the Company

Form of organization: Company limited by shares

Registered address: No. 1 Longcheng Road, Dongsheng Town, Zhongshan City

Office address of the headquarters of the Company: No. 136 Caihong Avenue, West District, Zhongshan City

3. Business nature and main business activities of the Company

C&S Paper Co., Ltd. and its subsidiaries (hereafter generally referred to as “the Company”) are in the household paper industry. The Company mainly engages in the following: R&D, production, processing and sales (including online sales): high-end household paper series products, tissue boxes, sanitary products, cosmetics, non-woven products, daily necessities (limited to daily plastic products, daily metal products, daily rubber products, and daily ceramic products), daily chemical products (excluding hazardous chemicals), and Class I medical devices; operation and production of Class II and Class III medical devices.

4. Actual controller of the Company

The actual controllers of the Company are Deng Yingzhong, Deng Guanbiao, and Deng Guanjie (Deng Yingzhong is the other two’s father).

5. Approver for the issue of the financial statements and date of approval

The financial statements were approved for issue by the Board of Directors of the Company on August 30, 2021.

6. Scope of the consolidation of financial statements

As of June 30, 2021, the Company has 23 subsidiaries which are included in the consolidated scope, as detailed in “Note IX. Equities in Other Entities”. Compared with last year, four subsidiaries have been newly added into the consolidated scope during the reporting period. For details, see “Note VIII. Changes in Consolidated Scope”.

IV. Preparation Basis for Financial Statements

1. Basis of preparation

The financial statements of the Company have been prepared on a going concern basis based on actual transactions and events and according to the Accounting Standards for Business Enterprises - Basic Standards

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promulgated by the Ministry of Finance (MOF No. 33 Document and No. 76 Revision), the 42 accounting standards, Guidelines for the Application of the Accounting Standards for Business Enterprises , interpretation to the accounting standards for business enterprises and other relevant regulations that are successively promulgated on or after February 15, 2006 (hereinafter collectively referred to as “Accounting Standards for Business Enterprises”), and rules set out in No. 15 Preparation and Reporting Rules of Information Disclosure of Public Offering Companies - General Rules for Financial Statements (2014 Revision) issued by China Securities Regulatory Commission based on actual transactions and events.

In accordance with the relevant rules of Accounting Standards for Business Enterprises, the financial accounting of the Company is based on accrual basis. Apart from some financial tools, the accounting measurement of the financial statements is based on historical cost method. Provision for impairment of asset is set aside if it is recognized.

2. Going concern

The Company shall be a going concern for at least 12 months following the end of the reporting period. There are no major events that will affect the Company’s operational ability; therefore the assumption on which the financial statements are based is reasonable.

V. Significant Accounting Policies and Accounting Estimates

Specific accounting policies and accounting estimates:

C&S Paper Co., Ltd. and all its subsidiaries have set out several specific accounting policies and accounting estimates for transactions and events with relation to the recognition of incomes and income taxes in accordance with the Accounting Standards for Business Enterprises and their own operational characteristics. Please refer to “Note V (39) Revenue” for details. As for explanations of significant accounting judgments and estimates made by the management, please refer to “Note V (44) Significant changes of accounting policies and accounting estimates”.

1. Statement of compliance with the accounting standards for business enterprises

The financial statements of the Company conform to the requirements set out in the Accounting Standards for Business Enterprises. The statements truthfully and completely reflect the financial status, operating results, cash

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flow, and other relevant information of the Company. In addition, the financial statements of the Company are also in accordance with disclosure requirements for financial statements and notes in No. 15 Preparation and Reporting Rules of Information Disclosure of Public Offering Companies - General Rules for Financial Statements of the China Securities Regulatory Commission (2014 Revision) in all material aspects

2. Accounting period

The accounting year of the Company is from January 1 to December 31 of each calendar year.

3. Operating cycle

The operating cycle of the Company normally refers to the periods during which the Company purchases assets for processing and then gets cash or cash equivalents from the processed items. Normally, the operating cycle of a company is shorter than a year. The Company sets 12 months as a full operating cycle and uses the 12-month period as a standard for the liquidity of assets and liabilities.

4. Standard currency for accounting

RMB is the main currency in the main economic environments in which the Company and its domestic subsidiaries operate. Therefore, the Company and its subsidiaries use RMB as the standard currency for bookkeeping. The currency for accounting used in the Company’s financial statements is RMB.

5. Accounting treatment measures of business combinations involving enterprises under common control and business combinations involving enterprises not under common control

Business combinations refer to the combination of two or more independent enterprises to form a reporting entity of transactions or events. Business combination can be classified as business combinations involving enterprises under common control and business combinations involving enterprises not under common control.

(1) Business combinations involving enterprises under common control

Business combinations under common control means enterprises involved in the business combination are under ultimate control by one party or the same multi-parties before and after combination, and such control is not temporary. For business combinations under common control, those who obtain control of enterprises involved in the business combination on the combination date are the acquirer while other enterprises involved in the business combination are the acquiree. Combination date is the date that the combining party actually obtains control of the

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combined party.

Assets and liabilities that the acquirer gets from the acquiree are calculated and measured at the book values on the combination date. If there are differences between the book values of the net assets the acquirer receives and the book values of the combination consideration it pays (or the face values of the issued shares), the differences will be used to adjust capital reserves (share premium). Where capital reserves (share premium) are insufficient to offset, retained earnings shall be adjusted.

All direct expenses related to the business combinations paid by the acquirer shall be included in current profits and losses upon occurrence.

(2) Business combinations involving enterprises not under common control

Business combinations not under common control means enterprises involved in the business combination are not under ultimate control by one party or the same multi-parties before and after combination. For business combinations not under common control, those who obtain control of enterprises involved in the business combination on the acquisition date are the acquirer, while other enterprises involved in the business combination are the acquiree. Acquisition date is the date that the acquirer actually obtains control of the acquiree.

For business combinations not under common control, the costs of combination include the assets the acquirer pays, liabilities the acquirer bears, and the fair value of the equity securities issued on the date of combination for the acquisition of control over the acquiree. The costs of auditing, legal services, evaluation consulting, other intermediary expenses and other management fees incurred for business combination shall be included in current profits and losses. The transaction costs of the equity securities and debt securities issued by the acquirer shall be included in the initially confirmed amounts of equity securities and debt securities. The contingent consideration involved shall be included in the costs of business combination based on its fair value at the acquisition date. If, within 12 months after the acquisition, there is new or further evidence for conditions that have already existed on the acquisition date and the contingent consideration shall be re-adjusted, the combination goodwill shall be adjusted accordingly. The acquirer’s costs of business combinations and its identifiable net assets obtained from business combinations shall be assessed at the fair values on the acquisition date. If the costs of business combinations are higher than the identifiable net assets of the acquiree on the acquisition date, the gap between them shall be confirmed as goodwill. If the costs of business combinations are lower than the fair values of the identifiable net assets of the acquiree on the acquisition date, the fair values of identifiable assets, liabilities and continent liabilities as well as the measurement of combination costs shall be reassessed; if, upon reassessment,

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the business combination costs are still lower than the fair values of the identifiable net assets of the acquiree, the difference shall be included in profits and losses of the current period.

If the deductible temporary differences the acquirer gets from the acquiree are not eligible to be confirmed as deferred tax asset on the acquisition date, and within 12 months of the acquisition, there are new or further evidence for the conditions that have already existed on the acquisition date that the economic profits brought by the deductible temporary differences of the acquiree could be achieved, such differences shall be confirmed as deferred tax asset. At the same time, the goodwill shall be reduced. Where the goodwill is insufficient to be deducted, the gap between them shall be included in current profits and losses. Apart from the aforementioned situations, all deductible temporary differences confirmed to be relevant to the business combination shall be recorded in current profits and losses.

For business combinations not under common control that are achieved through multiple steps, whether they can be regarded as package deals shall be judged in accordance with Notice No.5 of the Interpretation of Accounting Standards for Business Enterprises of the Ministry of Finance (C.K. [2012] No.19), and the standards of “package deals” set out in Article 51 of the Accounting Standard for Business Enterprises No. 33 – Consolidated Financial Statements (please refer to Note V (6) “methods for preparation of consolidated financial statements” (2)). In the event that the combination is regarded as “package deals”, accounting treatment shall be done by referring to the descriptions in previous paragraphs of this section and “Note V (22) Long-term equity investments” herein; if not, accounting treatment shall be done by distinguishing individual financial statements from consolidated financial statements::

In individual financial statements, the initial investment costs shall be the sum of the book value of the equity investment of the acquiree held before the acquisition date and the new investment costs on the acquisition date; if other comprehensive income is involved in the equities of the acquiree before the acquisition date, accounting processing shall be done for the comprehensive income related to this investment by adopting the same basis for directly disposing of relevant assets or liabilities of the acquiree during the disposal of this investment (that is, except for the corresponding shares of the changes caused by re-measurement of the net liabilities or net assets of the defined benefit plan by the acquiree, which are accounted by the equity method, others shall be transferred to the return on investment of the current period).

In consolidated financial statements, the equities of the acquiree held before the acquisition date shall be remeasured at the fair value of the equities on the acquisition date, and the difference between the fair value and the

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book value shall be recognized as the return on investment of the current period; if other comprehensive income is involved in the equities of the acquiree before the acquisition date, accounting processing shall be done for the comprehensive income related to this investment by adopting the same basis for directly disposing of relevant assets or liabilities of the acquiree (that is, except for the corresponding shares of the changes caused by remeasurement of the net liabilities or net assets of the defined benefit plan by the acquiree, which are accounted by the equity method, others shall be transferred to the return on investment of the current period).

6. Methods for preparation of consolidated financial statements

(1) Principles of determining the scope of consolidated financial statements

The scope of consolidation of consolidated financial statements shall be subject to the basis of control. Control refers to the power the investor owns against the investee, which allows the investor to enjoy the variable return by attending relevant activities held by the investee, and to be capable of using such power to affect the amount of return. The scope of consolidation is the Company and all of its subsidiaries. Subsidiaries refer to entities controlled by the Company.

The Company shall reassess whether it controls an investee if facts and circumstances indicate that there are changes to the relevant elements of control as defined above.

(2) Methods for preparation of consolidated financial statements

The Company shall include the subsidiaries in the scope of consolidation from the date it acquires the actual control over the net assets and the decision-making of production and operations of such subsidiaries; accordingly, the Company shall terminate including them in the scope of consolidation from the date it loses the actual control. In terms of subsidiaries already disposed of, the operating results and cash flows before the disposal date have been included in the consolidated income statements and the consolidated cash flow statements appropriately; as for subsidiaries disposed in the current period, the opening balance in the consolidated balance sheet shall not be adjusted. In case of subsidiaries added through business combinations not under the same control, the operating results and cash flows after the acquisition date have been included in the consolidated income statements and the consolidated cash flow statements appropriately, and the opening and comparative balance in the consolidated balance sheet shall not be adjusted. In case of subsidiaries added through business combinations under the same control among which the Company absorbs the combined party, the operating results and cash flows of the combined party from the beginning of the period in which the combination happens to the combination date have

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been included in the consolidated income statements and the consolidated cash flow statements appropriately, and the comparative balance in the consolidated balance sheet shall be adjusted simultaneously.

In case of inconsistencies in the accounting policies or periods between subsidiaries and the Company during preparation of consolidated financial statements, financial statements of subsidiaries shall be adjusted according to the accounting policies and periods adopted by the Company. For subsidiaries acquired by business combinations not under the same control, their financial statements shall be adjusted based on the fair value of the identifiable net assets on the acquisition date.

All major business transaction balance, transactions, and unrealized profit of the Company shall be offset during preparation of consolidated financial statements.

Shareholders’ equities of subsidiaries and the part of the net profit and loss of the current period not attributable to the Company shall be presented separately under the shareholders’ equities and the net profit in the consolidated financial statements as equities of minority shareholders and minority shareholders’ profits and losses. Shares of equities of minority shareholders in the net profit and loss of the current period of subsidiaries shall be presented under the “minority shareholders’ profits and losses” in the consolidated income statement. If the loss of a subsidiary which is shared by its minority shareholders exceeds the minority shareholders’ share in the opening balance of the subsidiary, the minority interest shall be reduced.

If the Parent Company loses control of a subsidiary due to partial disposal of equity investment or other reasons, it shall re-measure the remaining equity at fair value on the date of loss of control. The sum of consideration obtained from equity disposal and fair value of the remaining equity, minus the difference between the Parent Company’s share of the subsidiary’s net assets that is continuously calculated from the acquisition date, shall be recognized as investment income for the reporting period when the loss of control takes place. Accounting processing shall be done for the other comprehensive income related to this investment in the subsidiary’s equities by adopting the same basis for directly disposing of relevant assets or liabilities of the acquiree during the loss of control (that is, except for the changes caused by re-measurement of the net liabilities or net assets of the defined benefit plan by the previous subsidiary, others shall be transferred to the return on investment of the current period). After that, subsequent measurement shall be done for the remaining equity of this part as per relevant provisions in the Accounting Standards for Business Enterprises No. 2 - Long-term Equity Investment or the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments . See “Note V (22)” or “Note V (10)” for details.

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If the Company disposes of investments in a subsidiary’s equities by steps via transactions until it loses control, it shall check whether these transactions from disposal of the investments in the subsidiary’s equities to the loss of control are package deals. If the terms, conditions, and economic effects of transactions on disposing of equity investment in the subsidiary conform to one or more of the following circumstances, that means these multiple transactions should be treated as package deals in accounting processing: 1) Those transactions are reached at the same time or after taking into consideration the influence of each other; 2) those transactions together produce a complete commercial outcome; 3) the occurrence of one transaction depends on the occurrence of at least one other transaction; 4) one transaction alone does not seem to be economical, but all those transactions are economical when are considered as a whole. If those transactions are package deals, each transaction shall be treated as a transaction that results in loss of control of the subsidiary in accounting processing. However, the difference between each disposal price before loss of control and the Parent Company’s share of the subsidiary’s net assets corresponding to the disposal investment shall be recognized as other comprehensive income in the consolidated financial statements and, upon loss of control, transferred to the profit and loss of the current reporting period.

7. Classification of joint operation arrangements and accounting treatment methods for joint operations: None

8. Criteria for recognition of cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits that can be used for payment at any time, and short-term (due within three months from the acquisition date) investment held by the Company with high liquidity, easy to convert to cash in a known amount, and small risk of value changes.

9. Translation of transactions and financial statements denominated in foreign currencies

(1) Methods for translation of transactions denominated in foreign currencies

At the initial recognition of foreign currency transactions of the Company, foreign currency will be translated into the amount of standard currency for accounting at the spot exchange rate or its approximate exchange rate on the transaction date. However, the business of exchange of foreign currencies or transactions related to the exchange of foreign currencies, foreign currency will be translated into the amount of standard currency for accounting at the exchange rate actually adopted.

(2) Methods for translation of monetary and non-monetary items in foreign currencies

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On the balance sheet date, the foreign currency monetary items are translated at the spot exchange rate on that date. Exchange difference resulting from the difference between the spot exchange rate on the balance sheet date and that at the initial recognition or on the previous balance sheet date shall be recognized as the profit and loss of the current period.

Non-monetary items that are measured at historical cost in foreign currencies shall still be converted at the spot exchange rate on the transaction date with the amount of standard currency for accounting unchanged. Nonmonetary items that are measured at fair value in foreign currencies are translated using the foreign exchange rate at the date the fair value is recognized. The difference between the amount of standard currency for accounting after translation and the original amount of the standard currency for accounting shall be treated as a change in fair value (including the change in the exchange rate) and recognized as the profit and loss of the current period or other comprehensive income.

(3) Methods for translation of foreign-currency financial statements

Foreign-currency financial statements of overseas operations shall be translated into RMB financial statements by the following methods: The assets and liabilities in the balance sheet shall be converted at the spot exchange rate on the balance sheet date; except “undistributed profits”, all the other owner’s equity items are converted at the spot exchange rate at the time of occurrence. Income and expense items in the income statement shall be translated using the foreign exchange rates ruling at the dates of the transactions. Difference resulting from translation of foreign-currency financial statements by the above methods shall be recognized as other comprehensive income. Translation of comparative financial statements shall be subject to the above provisions.

10. Financial instruments

When the Company becomes a party to a financial instrument contract, the financial instrument is confirmed to be either financial assets or financial liabilities.

(1) Classification, recognition, and measurement of financial assets

According to the business model of managing financial assets and the contractual cash flow characteristics of financial assets, the Company classified financial assets into the following categories: financial assets measured at the amortized cost, financial assets measured at fair value through other comprehensive income and financial assets measured at fair value through profit and loss of the current period.

Financial assets are measured at fair value upon initial recognition. For financial assets measured at fair value through profit and loss of the current period, transaction costs are directly included in profit and loss of the current

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period. For other types of financial assets, related transaction costs are included in their initial recognized amounts. In terms of the accounts receivable or notes receivable arising from selling products or providing labor service without or not considering major financing component, the Company shall regard the expected consideration amount that it has rights to charge as the initial recognition amount.

1) Financial assets measured at amortized cost

For the business model where the Company manages the financial assets carried at amortized cost, the Company aims to charge the contract cash flows, and the characteristics of the contract cash flows of this kind of financial assets are consistent with the basic lending arrangements. That is, cash flows generated on specified dates are solely payments of principal and interest on the principal amount outstanding. This kind of financial assets are subsequently measured at amortized cost using the effective interest method. Gain or loss arising from amortization or impairment is recognized in profit and loss of the current period.

2) Financial assets measured at fair value through other comprehensive income

The business model for the Company to manage this type of financial assets aims at both obtaining the contract cash flows and selling the financial assets, and the characteristics of the contract cash flows of this kind of financial assets are consistent with the basic lending arrangements. The Company measures this kind of financial assets at fair value through other comprehensive income, but recognizes the impairment losses or gains, exchange profit and loss, and interest income calculated by the effective interest method as the profit and loss of the current period.

Additionally, the Company designates some non-tradable equity instruments as financial assets at fair value through other comprehensive income. The Company recognizes relevant dividend income from such financial assets as the profit and loss of the current period, and changes in fair value as other comprehensive income. When such financial assets are derecognized, the accumulated gains or losses previously recognized as other comprehensive income shall be transferred from other comprehensive income to retained earnings and not recognized as the profit and loss of the current period.

3) Financial assets measured at fair value through profit and loss of the current period

All financial assets other than the other two preceding types are classified as financial assets measured at fair value through profit and loss of the current period. Moreover, at initial recognition, to eliminate or significantly reduce accounting mismatches, the Company may designate some financial assets as financial assets measured at fair value through profit and loss of the current period.

Such financial assets shall be measured at fair value, and changes in fair value are recognized as the profit and

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loss of the current period.

(2) Classification, recognition, and measurement of financial liabilities

At initial recognition, financial liabilities are classified into financial liabilities measured at fair value through profit or loss and other financial liabilities. For financial liabilities at fair value through profit and loss of the current period, transaction costs are directly included in profit and loss of the current period. For other types of financial liabilities, related transaction costs are included in their initial recognized amounts.

1) Financial liabilities measured at fair value through profit and loss of the current period

Financial liabilities measured at fair value through profit and loss of the current period include tradable financial liabilities (including derivatives belonging to financial liabilities) and financial liabilities designated to be measured at fair value through profit and loss of the current period at initial recognition.

Tradable financial liabilities (including derivatives that are financial liabilities) are subsequently measured at fair value, and changes in fair value -- except for those related to hedging accounting -- are recognized as profit and loss of the current period.

For those that are designated as financial liabilities measured at fair value through profit or loss, the changes in fair value resulting from changes in the credit risk of the Company shall be recognized as other comprehensive income; besides, when such liabilities are derecognized, the amount of accumulative changes in fair value resulting from credit risk changes that are recognized as other comprehensive income shall be transferred to retained earnings. Other changes in fair value shall be recognized as the profit and loss of the current period. If the treatment of the credit risk changes in such financial liabilities by the above methods will result in expansion of the accounting mismatch in the profit and loss, the Company shall recognize all gains or losses in such financial liabilities (including the amount subject to the credit risk changes of the Company) as the profit and loss of the current period.

2) Other financial liabilities

Except for financial liabilities resulting from financial asset transfers not meeting the conditions for derecognition or the continuous involvement in the transferred financial asset, or financial guarantee contracts, other financial liabilities shall be classified into the financial liabilities measured at amortized cost, which shall be subsequently measured at amortized cost, and the gains or losses resulting from derecognition or amortization shall be recognized as the profit and loss of the current period.

(3) Recognition basis and measurement method of financial asset transfer

Once one of the following conditions is met, the financial assets shall be derecognized:

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1) The contract right to charge the cash flows of the financial assets is terminated; 2) the financial assets have been transferred, and almost all the risks and rewards of the ownership of the financial assets are transferred to the transferee; 3) the financial assets have been transferred, and the Company has given up the control over the financial assets although it does not transfer or retain almost all the risks and rewards of the ownership of the financial assets.

If the Company has neither transferred nor retained almost all the risks and rewards of the ownership of the financial assets, and the Company does not waive its control of the financial assets, it shall recognize the relevant financial assets within the extent of its continuous involvement in the transferred financial assets and recognize the relevant liabilities. The continuous involvement in the transferred financial assets refers to the level of risk with which the Company is faced due to changes in the financial asset values.

When overall transfer of financial assets meets the conditions for derecognization, the book value of the transferred financial assets and the difference between the consideration received due to transfer and the accumulative changes in fair value that is originally recognized as other comprehensive income shall be recognized as the profit and loss of the current period.

When partial transfer of financial assets meets the conditions for derecognization, the book value of the transferred financial assets shall be apportioned to the fair value between the derecognized part and the recognized part, and the consideration received due to transfer and the difference between the accumulative changes in fair value that is originally recognized as other comprehensive income, which shall be apportioned to the derecognized part, and the apportioned book value as mentioned above shall be recognized as the profit and loss of the current period.

When the Company sells financial assets with additional recourse or transfers the endorsed financial assets held, it shall check whether almost all the risks and rewards of the ownership of the financial assets are transferred. If the Company has transferred almost all the risks and rewards of the ownership of the financial assets to the transferee, it shall derecognize the financial assets; if the Company retains almost all the risks and rewards of the ownership of the financial assets, it shall not derecognize the financial assets; if the Company neither transfers nor retains almost all the risks and rewards of the ownership of the financial assets, it shall judge whether it has retained control over the assets and conduct accounting processing following the principles described in previous paragraphs.

(4) Derecognition of financial liabilities

If current obligations of the financial liabilities (or some of the liabilities) have been released, the Company shall

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derecognize the financial liabilities (or some of the liabilities). Where the Company (borrower) and a lender sign an agreement to replace the existing financial liability by way of assumption of new financial liability with the terms of the new financial liability substantially different from those of the existing financial liability, it derecognizes the existing financial liability while recognizing the new financial liability. If the contract terms of the existing financial liability are materially changed in whole (or in part), the existing financial liability will be derecognized, and the financial liability after changes of terms will be recognized as a new financial liability.

If a financial liability is derecognized in whole (or in part), the difference between the book value of the derecognized portion and the consideration paid (including the non-cash assets transferred out or the new financial liability assumed) is recognized as the profit and loss of the current period.

(5) Offsetting financial assets and financial liabilities

When the Company has the statutory right to offset the recognized amount of financial assets and financial liabilities, and this statutory right is currently enforceable, and the Company plans to net the financial assets or simultaneously realize the financial assets and pay off the financial liabilities, the financial assets and financial liabilities are presented in the balance sheet at the net amount after offsetting each other. Otherwise, financial assets and financial liabilities are presented separately in the balance sheet and are not offset against each other.

(6) Methods for determining the fair value of financial assets and financial liabilities

The fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. If there are active markets for a financial instrument, the Company establishes its fair value by using quotes in the active markets. Quotes in active markets refer to prices that are readily available on a regular basis from exchanges, brokers, trade associations, pricing service institutions, etc., and represent the prices of market transactions that actually occur in a fair trade. If there is no active market, the Company establishes fair value by using valuation techniques.

Valuation techniques include reference to price used in recent market transactions between knowledgeable, willing parties, reference to the current fair value of other financial instruments that are substantially the same, discounted cash flow analysis, option pricing models, etc. During valuation, the Company adopts the valuation techniques that are applicable under current circumstances and supported by sufficient available data and other information, selects the input values that are consistent with the characteristics of the assets or liabilities considered by the market participants in the transaction of the relevant assets or liabilities, and preferentially uses the relevant observable inputs. Unobservable input values are used where the relevant observable input values are not available or are not practicable.

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(7) Equity instruments

An equity instrument refers to a contract that can prove the Company owns the remaining equity in the assets after deducting all liabilities. The Company’s issuance (including refinancing), repurchase, sales or cancellation of equity instruments are treated as changes in equities, and transaction costs related to equity transactions are deducted from equities. The Company does not recognize changes in the fair value of equity instruments.

The distribution of dividends by equity instruments (including “interests” generated by instruments that are classified as equity instruments) during their period existence shall be treated as profit distribution.

(8) Impairment of financial assets

The financial assets for which the Company needs to recognize impairment losses are financial assets measured at amortized cost, debt instrument investments measured at fair value through other comprehensive income, and lease receivables, mainly including notes receivable, accounts receivable, and other receivables. In addition, for some financial guarantee contracts, impairment reserves are set aside and credit impairment losses are recognized as per the accounting policies described in this section.

1) Methods for recognizing impairment reserves

Based on the expected credit loss, the Company sets aside provisions for impairment of the above items by methods (general method or simplified method) for measuring expected credit loss applicable to them and recognizes credit impairment loss.

Credit loss refers to the difference between all contract cash flow receivables discounted at the original effective interest rate under the contract and all expected cash flow receivables, i.e., the present value of all cash shortages. Specifically, for financial assets that have been credit-impaired at the time of purchase or origin, the Company discounts the financial assets at the credit-adjusted actual interest rate.

The general method for measuring expected credit loss means that the Company assesses on each balance sheet date whether the credit risk of financial assets has increased significantly since the initial recognition. If yes, the Company measures loss reserves at an amount equivalent to the expected credit loss in the entire duration; if not, the Company measures loss reserves at an amount equivalent to the expected credit loss in the next 12 months. The Company considers all reasonable and evidence-based information, including forward-looking information, when assessing expected credit loss;

As for financial instruments with low credit risk on the balance sheet date, the Company measures the loss reserves according to the expected credit loss in the future 12 months, assuming that its credit risk has had no significant increase since its initial recognition. The Company chooses to measure loss reserves according to the

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expected credit loss in the next 12 months or in the entire duration based on whether the credit risk has increased significantly since initial recognition.

2) Standards for judging whether credit risk has increased significantly since initial recognition

If the probability of default (PD) of a financial asset in the expected duration recognized on the balance sheet date is significantly higher than that in the expected duration recognized at the time of initial recognition, the credit risk of the financial asset has increased significantly. Except for special circumstances, the Company determines whether credit risk has increased significantly since initial recognition by reasonably assessing the changes in the PD in the entire duration with the changes in the coming 12 months.

3) Portfolio method for assessing expected credit risk based on portfolios

The Company assesses individual credit risk of financial assets with significantly different credit risks. Examples include the following: receivables from related parties; receivables that have disputes with counterparties or those involved in litigation or arbitration; there are obvious signs that the debtor is very unlikely to fulfill the repayment obligation.

In addition to financial assets whose individual credit risk is assessed, the Company divides financial assets into different groups based on common risk characteristics, and assesses credit risk on a portfolio basis.

4) Accounting treatment methods for impairment of financial assets

At the end of the reporting period, the Company calculates the expected credit loss of financial assets. If the expected credit loss is greater than the book value of its current impairment provisions, the difference is recognized as an impairment loss; if it is less than the current book value of the impairment provisions, the difference is recognized as impairment gains.

5) Methods for recognizing credit losses of financial assets

a. Notes receivable

The Company measures loss reserves for notes receivable at an amount equivalent to expected credit loss in the entire duration. The Company divides notes receivable into different portfolios based on their credit risk

characteristics:

Item	Basis for determiningtheportfolio
Banker’s acceptance	Acceptors are banks with low credit risks.
Trade acceptance	The aging of trade acceptance is used as credit risk characteristics.

b. Accounts receivable

The Company measures loss reserves for accounts receivable without major financing component at an amount equivalent to expected credit loss in the entire duration.

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The Company measures loss reserves for accounts receivable and lease receivables with major financing component at an amount equivalent to expected credit loss in the duration.

Except for accounts receivable whose individual credit risk is assessed, the Company divides accounts receivable

into different portfolios based on their credit risk characteristics:

Item	Basis for determiningtheportfolio
Aging portfolio	This portfolio uses aging of accounts receivable as credit risk characteristics.
Relatedparty portfolio	This portfolio comprises amounts of related parties within the consolidated scope.

c. Other receivables

The Company adopts the amount equivalent to the expected credit loss in the coming 12 months or in the entire

duration to measure impairment losses based on whether the credit risk of other receivables has increased significantly since initial recognition. Except for other receivables whose individual credit risk is assessed, the Company divides other receivables into different portfolios based on their credit risk characteristics:

Item	Basis for determiningtheportfolio
Aging portfolio	This portfolio uses aging of other receivables as credit risk characteristics.
Relatedparty portfolio	This portfolio comprises amounts of related parties within the consolidated scope.

11. Notes receivable

For details, please refer to 10. Financial instruments in V. Significant Accounting Policies and Accounting Estimates of Section X.

12. Accounts receivable

For details, please refer to 10. Financial instruments in V. Significant Accounting Policies and Accounting Estimates of Section X.

13. Accounts receivable financing: None

14. Other receivables

Recognition methods and accounting treatment methods for expected credit loss in other receivables

For details, please refer to 10. Financial instruments in V. Significant Accounting Policies and Accounting Estimates of Section X.

15. Inventories

(1) Classification of inventories

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Inventories mainly include raw materials, goods in process, materials for consigned processing, commodity stocks, packages, and low-value consumables.

(2) Pricing methods for inventory acquisition and delivery

Inventories are priced at actual cost when they are acquired. Inventory costs include procurement costs, processing cost, and other costs. Inventories are priced by the weighted average method during receipt and delivery.

(3) Methods for recognition of the net realizable value of inventories and the provisions for impairment of inventories

The net realizable value refers to the amount of the estimated selling price of the inventory minus the estimated cost, estimated selling expenses, and related taxes and fees at the time of completion in daily activities. When recognizing the net realizable value of inventories based on the substantial evidence obtained, the Company also considers the purpose of holding the inventories and the impact on matters after the balance sheet date.

On the balance sheet date, inventories are measured at the lower of costs and the net realizable value. When the net realizable value is lower than costs, the Company sets aside provisions for inventory impairment. Provisions for inventory impairment are set aside based on the difference between the cost of individual inventory item and its net realizable value.

After provisions for the inventory impairment are set aside, if the influencing factors in previous write-down of the inventory value disappear, causing the net realizable value of the inventory to be higher than its book value, it shall be reversed within the amount of the provisions for inventory impairment that have been set aside and recognized as the profit and loss of the current period.

(4) The perpetual inventory system is adopted for the inventories.
(5) Amortization method for low-value consumables and packages

The one-time amortization method is adopted for low-value consumables and packages upon receipt.

16. Contract assets: None

17. Contract costs: None

18. Assets held for sale

The Company classifies non-current assets or a disposal group as held for sale (including exchange of nonmonetary assets with commercial substance, the same below) if their book values are recovered principally

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through disposal rather than through continuing use. Specifically, the following conditions shall be met simultaneously: A certain non-current asset or disposal group can be sold immediately under the current conditions according to the practice of selling such assets or disposal groups in similar transactions; the Company has made a resolution of an offer and obtained the purchase commitment; the sale is expected to be completed within one year. Among them, the disposal group refers to a group of assets that are disposed of as a whole through sale or other means in a transaction, and the liabilities directly related to these assets that are transferred in the transaction. If the asset group or the combination of asset groups to which the goodwill (obtained from business combination) has been allocated in accordance with the Accounting Standards for Business Enterprises No. 8 -- Impairment of Assets , the disposal group shall include the goodwill allocated to it. During initial measurement or re-measurement of the non-current assets and disposal groups classified into heldfor-sale assets on the balance sheet date, if the book value of such assets is higher than the net value deducting the cost of offer, the book value is written down to the recoverable amount by the Company, the written-down amount is recognized as profit and loss of the current period and impairment provisions are set aside at the same time. For the disposal group, the recognized asset impairment loss is first deducted from the book value of the goodwill in the disposal group, and then deducted in proportion from the book value of non-current assets specified in the applicable Accounting Standards for Business Enterprises No. 42 - Non-Current Assets and Disposal Groups Held for Sale and Discontinued Operations (hereinafter referred to as the “Standards for Assets Held for Sale”). If the fair value of the disposal group held for sale on the subsequent balance sheet date increases after deducting the selling expenses, the previously written down amount shall be restored, and reversed within the amount of the asset impairment losses recognized for non-current assets as per the Standards for Assets Held for Sale applicable after the assets are classified into those held for sale, and the reversed amount shall be recognized as the profit and loss of the current period. Besides, the book value of the reversed amount shall be increased in proportion according to the proportion of the book value of the non-current assets specified in the Standards for Assets Held for Sale applicable to those except for the goodwill in the disposal group. The book value of the goodwill that has been deducted, and the asset impairment losses recognized before the non-current assets are classified into assets held for sale as per the Standards for Assets Held for Sale shall not be reversed.

Non-current assets held for sale and non-current assets in the disposal group are not subject to depreciation or amortization. Interest and other expenses on liabilities in the disposal group held for sale continue to be recognized.

When the non-current assets or disposal group no longer meets the conditions for classification into the assets held

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for sale, the Company no longer classifies them into the category or removes the non-current assets from the disposal group held for sale, and measures them at the lower of the following two: (1) in terms of the book value before classification into assets held for sale, for which the measurement standard is the amount after adjustment according to the depreciation, amortization, or impairment that should have been recognized under the assumption that they are not classified into assets held for sale; and (2) the recoverable amount.

19. Investments in creditor’s rights: None

20. Other investments in creditor’s rights: None

21. Long-term receivables: None

22. Long-term equity investments

The long-term equity investments herein refer to the long-term equity investments in which the Company has control, joint control, or significant influence on the investee. Long-term equity investments where the Company has no control, joint control, or significant influence on the investee are accounted as financial assets measured at fair value through profit and loss of the current period. Among them, for those that are non-tradable, the Company may choose to designate them as the financial assets measured at fair value through other comprehensive income for accounting during initial recognition. See “Note V (10)” for their detailed accounting policies.

Joint control refers to the common control over a particular arrangement according to relevant agreement, and that the decisions on relevant activities under such arrangement are subject to the unanimous consent from the parties sharing the joint control. Significant influence means having the power to participate in the financial and operating policy decision-making of the investee, but cannot control or, together with other parties, jointly control the formulation of these policies.

(1) Determination of investment cost

For long-term equity investments obtained from combination of enterprises under common control, the share of the combined party’s owner’s equity in the book value of the consolidated financial statements of the final controlling party which is acquired on the combination date shall be regarded as the initial investment cost for long-term equity investments. The capital reserves shall be adjusted if there is difference between the initial investment cost of long-term equity investment and the cash paid, the transferred non-cash assets, and the book value of the debts assumed; if the capital reserve is insufficient to offset, the retained earnings shall be adjusted. If the equity securities issued are used as the combination consideration, the share of the combined party’s owner’s

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equity in the book value of the consolidated financial statements of the final controlling party which is acquired on the combination date shall be regarded as the initial investment cost for long-term equity investments; the total book value of the shares issued shall be the share capital; the capital reserves shall be adjusted if there is difference between the initial investment cost of long-term equity investments and the total book value of the shares issued; if the capital reserves are insufficient to balance the difference, retained earnings shall be adjusted.

For long-term equity investments obtained from combination of enterprises under different control, the combination costs on the acquisition date shall be used as the initial investment costs of the long-term equity investment; the combination costs include the sum of the assets paid by the acquirer, the liabilities incurred or assumed, and the fair value of the equity securities issued.

Intermediary expenses such as auditing, legal services, assessment and consulting and other related management expenses incurred by the combining party or acquirer for the business combination shall be recognized as the profit and loss of the current period.

Other equity investments except for long-term equity investments formed via business combination are initially measured at cost. Subject to the way the long-term equity investments are obtained, the costs shall be recognized based on the cash actually paid by the Company for acquisition, the fair value of the equity securities issued by the Company, the value agreed in the investment contract or agreement, the fair value or original book value of the assets swapped out in a non-monetary asset exchange transaction, and the fair value of the long-term equity investment itself. Expenses, taxes, and other necessary expenditures directly related to acquisition of long-term equity investments are also recognized as investment costs.

(2) Subsequent measurement and recognition of profit and loss

If the Company has common control or significant influence over the investee (except for constituting coproprietors), the long-term equity investment shall be accounted for by using the equity method. Additionally, the Company’s financial statements apply the cost method for long-term equity investments that can make control in the investee

1) Long-term equity investments accounted for using the cost method

When the cost method is used, the long-term equity investments are calculated according to the initial investment cost. In the event that the investment is added or recovered, the cost of the long-term equity investments shall be adjusted. With the exception of the price actually paid at the acquisition of investment or cash dividends or profits included in consideration, declared but not issued yet, the return on investment of the current period shall be recognized according to the cash dividends or profits declared to be issued by the investee.

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2) Long-term equity investments accounted for using the equity method When using equity method, if the initial investment cost of long-term equity investments is greater than the fair value share of the identifiable net assets entitled of the investee at the time of investment, the initial investment of the long-term equity investments shall not be adjusted. If the initial investment cost of long-term equity investments is lower than the fair value share of the identifiable net assets entitled of the investee at the time of investment, the difference shall be recognized as profit and loss of the current period and the cost of the long-term equity investments shall be adjusted at the same time.

When the equity method is used, return on investment and other comprehensive income shall be respectively determined based on the share of net profit or loss and other comprehensive income realized by the investee that shall be attributable or assumed, and the book value of long-term equity investments shall be adjusted at the same time. Attributable share shall be calculated based on the profit or cash dividends declared by the investee and the book value of long-term equity investments shall be accordingly decreased. In respect to other changes of owner’s equity of the investee in addition to net profit or loss, other comprehensive income and profit distribution, the book value of long-term equity investments shall be adjusted and recognized as capital surplus. When confirming the share of the investee’s net profit and loss, the Company shall confirm the investee’s net profit after adjustment based on the fair value of the identifiable net assets of the investee at the acquisition of the investment. Where the accounting policy and accounting period adopted by the investee differs from those of the Company, the investee’s financial statements shall be adjusted according to the Company’s accounting policy and accounting period, and the return on investment and other comprehensive income shall be recognized accordingly. Where the transactions are between the Company and the associates and joint ventures, and the assets that are invested or sold do not constitute business, unrealized internal transaction profits and losses incurred between the Company and the associates and joint ventures shall be offset with the part attributable to the Company which is calculated on a due pro-rata basis, and the return on investment shall be recognized on this basis. However, unrealized internal transaction losses incurred between the Company and the investees shall not be offset if they fall under the impairment losses on assets transferred.

When confirming the limit of net loss incurred by the investee, the limit is the extent that the book value of the long-term equity investments and other long-term equity that substantially constitutes a net investment in the investment target is written down to zero. Additionally, if the Company has obligations to assume additional losses of the investee, provisions are recognized according to the expected obligation, and recognized as investment losses for the period. Where the investee records net profit in the future, the Company resumes and

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recognizes the profit-sharing amount after such amount makes up the unrecognized loss-sharing amount.

23. Investment property

Measurement model for investment property

Measurement by the cost method

Depreciation or amortization method

Investment properties are real estate held to generate rental income or earn capital gains or both. Investment properties include land use rights leased out, land use rights held for transfer after appreciation, buildings leased out, etc.

Investment property is initially measured at cost. Subsequent costs are included in the investment property’s cost only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. Other subsequent costs are recognized as profit and loss of the current period when incurred.

The Company adopts the cost model for subsequent measurement of investment property, and depreciates or amortizes it according to policies consistent with those for buildings or land use rights.

Impairment test method and impairment provision method for investment property are detailed in “Note V (31)”. Investment properties are derecognized when they are disposed of or permanently withdrawn from use and it is expected that no economic benefit can be generated from its disposal. The income from selling, transferring, writing off or destroying investment property, less its book value and relevant taxes and fees, is recognized as profit and loss of the current period.

24. Fixed assets

(1) Recognition conditions

Fixed assets are tangible assets with a useful life of more than one accounting year that are held for production or supply of goods or labor services, for rental to third parties, or for use in the organizations. Fixed assets shall only be recognized when relevant economic interest may flow into the Company and costs thereof can be reliably measured. Fixed assets shall be initially measured at cost and by taking into account the impact of estimated disposal expense.

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(2) Depreciation method

Type	Depreciation method	Depreciation life	Residual value rate	Annual depreciation rate
				3.00%, 3.17% to 9.00%,
Properties and buildings	Straight-line depreciation	10 to 30 years	5%. 10%
				9.50%

				4.50%, 4.75% to 45.00%,
Equipment	Straight-line depreciation	2 to 20 years	5%. 10%
				47.50%

				6.43%, 6.79% to 18.00%,
Motor vehicles	Straight-line depreciation	5 to 14 years	5%. 10%
				19.00%

				11.25%, 11.88% to
Office equipment	Straight-line depreciation	3 to 8 years	5%. 10%
				30.00%, 31.67%

				18.00%, 19.00% to
Production equipment	Straight-line depreciation	2 to 5 years	5%. 10%
				45.00%, 47.50%

Estimated residual value refers to the current amount where, supposed the service life of a fixed asset has expired and it is in the expected status of such expiration, the Company obtains from the disposal of such asset after the estimated disposal expense is deducted.

(3) Determination basis, pricing method and depreciation method of fixed assets acquired under finance leases

Leases of assets where substantially all the risks and rewards of ownership have been transferred are classified as finance leases. Title may or may not eventually be transferred. The fixed asset leased in through finance leases adopts the same depreciation policy self-owned fixed assets. If it can be reasonably ascertained that the ownership of the asset leased can be obtained by the expiration of the tenancy, the asset is depreciated over its service life; if not, the asset is depreciated over the shorter of the tenancy and the service life of the leased asset.

25. Construction work in process

Construction work in progress is measured at actual project expenditure, comprising project expenditure incurred during construction and other necessary cost incurred.

The Company’s Construction work in progress is transferred to fixed assets when the assets are ready for their intended use. If the fixed assets under construction have reached the expected usable status but have not yet completed the final account for completed project, they shall be recognized as fixed assets according to the estimated value, and accrue depreciation. After the completion of the final account for completed project, the original estimated value is adjusted according to the actual cost, but the original accrued depreciation amount is not adjusted.

Impairment test method and impairment provision method for Construction work in progress are detailed in “Note V (31)”.

26. Borrowing costs

Borrowing costs include interest on borrowings, amortizations of discounts or premiums, incidental expenses,

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exchange difference resulting from foreign-currency borrowings, etc. The borrowing costs that can be directly attributable to the acquisition, construction or production of an asset eligible for capitalization shall be capitalized if the capital expenditures have been incurred, the borrowing costs have been incurred, or the necessary purchase, construction or production activities to make the asset reach the expected available or marketable state have begun. When the assets with the purchase, construction or production meeting the capitalization conditions reach the expected available or marketable state, they cease to be capitalized. Any other borrowing costs are recognized as an expense in the period when they are incurred.

The amount of interest that shall be capitalized is determined based on the interest expenses incurred in the period when a specifically borrowed fund is obtained less any income earned on the unused borrowing fund as a deposit in a bank or as a temporary investment. Where funds are borrowed for a general purpose, the amount of interest that shall be capitalized is determined by multiplying the part of the accumulative asset disbursements in excess of the weighted average asset disbursement for the specifically borrowed fund by the capitalization rate of the general borrowing used. The capitalization rate is the weighted average interest rates applicable to the generalpurpose borrowings.

During the capitalization, all exchange differences arising from earmarked foreign-currency borrowings shall be capitalized; exchange differences arising from general-purpose foreign-currency borrowings shall be recognized as profit and loss of the current period.

Assets eligible for capitalization refer to assets such as fixed assets, investment real estates and inventories that can reach the expected available or marketable status after a long period of purchase, construction or production activities.

If the acquisition, construction or production of an asset eligible for capitalization is continuously suspended for over three months for abnormal reasons, capitalization of the borrowing costs shall be suspended, until the acquisition, construction or production of the asset is resumed.

27. Biological assets: None

28. Oil & gas assets: None

29. Right-of-use assets

(1) Recognition methods

Under the new lease standards, except for short-term leases and low-value asset leases, the lessee will no longer distinguish financial leases and operating leases. All leases adopt the same accounting methods, and right-of-use assets and lease liabilities need to be recognized.

Right-of-use assets refer to the right of the Company as the lessee to use the leased assets during the term of lease.

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(2) Accounting treatment methods

The right-of-use asset is measured at cost at the commencement date. The cost of right-of-use asset comprises: the amount equal to the lease liability at its initial recognition; lease payments made at or before the commencement of the lease, less any lease incentives received; any initial direct costs incurred by the lessee; an estimate of costs to be incurred by the lessee in dismantling and removing the underlying asset, 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. The Company as the lessee recognizes and measures the aforementioned dismantling, restoration and other costs in accordance with Accounting Standard for Business Enterprises No. 13 - Contingencies . Subsequent adjustments are made for any remeasurement of lease liabilities.

The straight-line method is used to accrue depreciation. For right-of-use assets, if it is reasonably ascertained that the ownership of the asset will be transferred to the lessee at the end of the lease term, then depreciation period runs to the end of the useful life of the lease asset. If it cannot be reasonably ascertain that the ownership of the asset leased will be transferred to the lessee at the end of the lease term, then depreciation period runs to the earlier of the end of the useful life of the asset or the end of the lease term.

Impairment test method and impairment provision method for right-of-use assets are detailed in “Note V (31)”.

For short-term leases and low-value asset leases, the Company may choose not to recognize as right-of-use assets but as the cost of the related asset or as profit and loss of the current period in accordance with the straight-line method or other systematically reasonable methods during each period of the lease.

30. Intangible assets

(1) Pricing method, service life, and impairment test

Intangible assets refer to identifiable non-monetary assets without physical substance owned or controlled by the Company.

Intangible assets are initially measured at cost. Costs of intangible assets are included in intangible assets’ book value, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. Other costs of intangible assets are recognized as profit and loss of the current period when incurred.

Land use rights acquired are generally accounted for as intangible assets. With respect to self-built buildings including plants, the relevant land use right expenses and buildings’ construction costs are accounted for as

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intangible assets and fixed assets, respectively. For purchased houses and buildings, the price paid is distributed between the land use right and the building. If it is difficult to distribute, it shall all be included in fixed assets. From the beginning of use of intangible assets with finite service life, the accumulated amount of the original value less estimated net residual value and the provisions for asset impairment set aside shall be amortized evenly in stages by straight-line method over their service life. Intangible assets with uncertain service lives are not amortized.

The Company reviews the service life and amortization method of intangible asset with finite service life at the end of the reporting period, and a change therein (if any) shall be accounted for as a change in accounting estimates. Additionally, the Company reviews the service life and amortization method of intangible asset with uncertain service life. If there is evidence that the period when it brings economic benefits to the enterprise is foreseeable, its service life shall be estimated and it is amortized according to the amortization policy for intangible assets with finite service life.

Impairment test method and impairment provision method for intangible assets are detailed in “Note V (31)”.

(2) Accounting policy for expenditure on internal research and development

The Company classifies the expenditure on an internal research and development project into expenditure on the research phase and expenditure on the development phase.

Expenditure on the research phase is recognized as profit and loss of the current period when incurred.

Expenditure on the development phase is recognized as intangible asset when all the following criteria are met, while expenditure in the development phase that does not meet the following criteria is recognized as profit and loss of the current period when incurred:

1) technically feasible to complete the intangible asset so that it will be available for use or sale;
2) the intention to complete the intangible asset and use or sell it;

3) how the intangible asset will generate probable future economic benefits. Among other things, the Company can demonstrate the existence of a market for the output of the intangible asset or the intangible asset itself or, if it is to be used internally, the usefulness of the intangible asset;

4) the availability of adequate technical, financial and other resources to complete the development and the ability to use or sell the intangible asset;

5) the ability to measure reliably the expenditure attributable to the intangible asset during the development.

Where the expenditure on research and development incurred cannot be classified into the expenditure on research

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phase or the expenditure on development phase, it shall be recognized as profit and loss of the current period when incurred.

31. Long-term asset impairment

The Company determines on the balance sheet date whether there is any indication that the non-current and nonfinancial assets may have been impaired, including fixed assets, construction work in progress, intangible assets with limited service life, and investment properties measured using the cost model, and long-term equity investments in subsidiaries, joint ventures and associates. If there is any indication that the asset is likely to be impaired, the Company will estimate the recoverable amount and carry out the impairment test. Impairment tests shall be conducted each year for goodwill and intangible assets with uncertain service life and not yet in use, whether or not there is any indication of impairment.

If an impairment test shows that the recoverable amount of an asset is lower than its book value, the difference is recognized as a provision for impairment and recognized as the impairment loss. The recoverable amount is determined based on the higher of the net amount of the fair value of the asset minus the disposal expenses and the present value of the expected future cash flow of the asset. The fair value of asset is determined according to the price of the sales agreement in fair trade. If there is no sales agreement but an active market for the asset, the fair value is determined according to the price offered by the buyer for the asset. If there is neither sales agreement nor active market for the asset, the fair value of the asset shall be estimated based on the best information available. The disposal costs include legal fees, relevant taxes and fees, as well as handling fees related to the disposal of asset, and the direct costs incurred to ensure the asset reaches the marketable state. The present value of the expected future cash flow of an asset shall be determined by the discounted cash at an appropriate discount rate, on the basis of the expected future cash flow generated during the continuous use or final disposal of an asset. Provisions for asset impairment are calculated and recognized on an individual basis. If it is difficult to estimate the recoverable amount of individual assets, the Company will determine the recoverable amount of the asset group on the basis of the asset group to which the asset belongs. Asset group refers to the smallest asset portfolio which can independently generate cash inflows.

When an impairment test is performed on the goodwill separately listed in the financial statement, book value of such goodwill is apportioned to the asset group or combination of asset groups that can benefit from the synergy effect of business combination. If the test result shows that the recoverable amount of the asset group or combination of asset groups is lower than their book value, corresponding impairment losses on goodwill will be

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recognized. The impairment loss shall first offset against the book value of goodwill that is apportioned to asset group or a combination of asset groups, and then offset against the book value of assets excluding goodwill in the asset group or the combination of asset groups on a pro-rata basis according to the proportion of their book value. Once the aforementioned asset impairment loss is recognized, it will not be reversed in subsequent accounting periods even if the value can be recovered.

32. Long-term unamortized expenses

Long-term unamortized expenses are expenses which have been incurred but shall be amortized over a period longer than one year, including the reporting period and the future periods. Long-term unamortized expenses shall be amortized based on the straight-line method over the expected benefit period.

33. Contract liabilities

A contract liability is the Group’s obligation to transfer goods or services to a customer for which the Group has received consideration from the customer.

Contract assets and liabilities within a single contract should be presented on a net basis. If the net amount is debit balance, it shall be presented in the item of “contract assets” or “other non-current assets” based on its liquidity. If the net amount is credit balance, it shall be presented in the item of “contract liabilities” or “other non-current liabilities” based on its liquidity.

34. Employee remuneration

(1) Accounting treatment method for short-term remuneration

Short-term remuneration includes salaries, bonuses, allowances and subsidies, employee welfare, medical insurance fees, maternity insurance fees, employment injury insurance fees, housing provident funds, labor union fees, staff education funds, and non-monetary welfare. The Company shall, within the accounting period when its employees provide service, recognize actual short-term remuneration as liabilities which shall be recognized as profit and loss of the current period or relevant asset costs. Wherein, non-monetary benefits are measured at fair value.

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(2) Accounting treatment method for post-employment benefits

Post-employment benefit includes basic endowment insurance, unemployment insurance, etc. It also includes defined contribution plans. Where defined contribution plans are adopted, the corresponding amount payable shall be recognized as profit and loss of the current period or relevant asset costs in which it is incurred.

(3) Accounting treatment method for dismissal benefits

If the Company terminates the labor relationship with an employee before the employee’s labor contract expires, or proposes to give the employee compensation for encouraging the employee to voluntarily accept dismissal, the liabilities arising from the compensation giving to the employee for the termination of the labor relationship with the employee shall be recognized as profit and loss of the current period, when the Company cannot unilaterally withdraw the termination of the labor relationship plan or the dismissal proposal, or when it recognizes the costs related to the restructuring of the payment of the dismissal benefits, whichever is earlier. However, if it is expected that the dismissal benefits cannot be paid in full within twelve months after the end of the annual reporting period, they shall be accounted for according to other long-term employee remunerations.

Internal retirement schemes for employees shall be accounted for following the same principles of the above dismissal benefits. Where the salaries and social insurance fees of early retirees to be paid by the Company from the date when employees stop providing services to the normal retirement date meet the recognition conditions for projected liabilities, they shall be recognized as profit and loss of the current period.

(4) Accounting treatment method for other long-term employee benefits

Other long-term benefits provided by the Company to employees that meet the conditions of the defined contribution plan are accounted for in accordance with the defined contribution plan; other long-term benefits are accounted for in accordance with the defined benefit plan.

35. Lease liabilities

(1) Recognition methods

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assets and lease liabilities need to be recognized.

(2) Accounting treatment methods

1) The lessee shall calculate the interest expenses of the lease liability in each period of the lease term and include them in the profit and loss of the current period.

2) For short-term leases and low-value asset leases, the lessee may choose not to recognize as right-of-use assets but as the cost of the related asset or as profit and loss of the current period in accordance with the straight-line method or other systematically reasonable methods during each period of the lease term;

Pursuant to requirements of the new lease standards, the Company recognizes lease liabilities for all leased assets based on the present value of the minimum lease payment of future rent payable (except for short-term leases and low-value asset leases that have been handled with the simplified method), and confirm depreciation and unrecognized financing expenses separately from January 1, 2021. Information of the comparable period is not adjusted.

36. Provision

An obligation related to contingent issues and meeting the following conditions shall be deemed a provision: (1) such an obligation is a current one assumed by the Company; (2) fulfilling such an obligation might cause economic benefits to flow out of the Company; and (3) the amount of such an obligation is measurable reliably. On the balance sheet date, a provision is measured at the best estimate of the expenditure required to settle the related present obligation, with comprehensive consideration of factors such as the risks, uncertainty and time value of money relating to a contingency.

A provision is separately recognized as an asset and the recognized compensation amount shall not exceed the book value of the provision, when all or part of the expenses required to pay off the provision are expected to be compensated by a third party and the amount of compensation is basically determined to be receivable.

37. Share-based payment

Share-based payment is the transaction made through granting equity instruments or bearing the liabilities recognized based on such instruments in exchange for services rendered by employees or other parties. The Company’s share-based payment includes equity-settled share-based payment and cash-settled share-based payment.

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(1) Equity-settled share-based payment

Where the share payment is settled through equity for acquisition of service from employees, it shall be measured at the fair value of the equity instruments granted to the employees. If the right cannot be exercised until the vesting period ends or until the prescribed performance conditions are met, the amount of such fair value shall, based on the best estimate of the number of vested equity instruments, be recognized as the relevant costs or expenses by straight-line method; if the right can be exercised immediately following the grant, the amount of such fair value shall be recognized as the relevant costs or expenses on the grant date, and the capital reserve shall be increased accordingly.

On each balance sheet date within the vesting period, the Company carries out the best estimation based on such follow-up information such as the variation of the number of vested staff acquired recently, and revises the number of estimated vested equity instruments. The impact of the above estimates shall be recognized as the relevant costs or expenses of the current period, and the capital reserve shall be adjusted accordingly.

For an equity-settled share-based payment in return for the service of any other party, if the fair value of the service of any other party can be reliably measured, it shall be measured at the fair value of the service of any other party on the acquisition date; if the fair value of the service of any other party cannot be reliably measured, but the fair value of the equity instruments can be reliably measured, it shall be measured at the fair value of the equity instruments on the acquisition date and included in the relevant costs or expenses, and the shareholders’ equity shall be increased correspondingly.

(2) Cash-settled share payment

The cash-settled share-based payment shall be measured at the fair value of the Company’s liabilities determined based on shares or other equity instruments. If the right may be exercised immediately after the grant, relevant costs or expenses shall be recognized the grant date, and the liabilities shall be increased accordingly. If the right may not be exercised until the vesting period ends or until the specified performance conditions are met, on each balance sheet date within the vesting period, the services obtained in the current period shall, based on the best estimate of the information about the exercisable right, be recognized as the relevant costs or expenses at the fair value of the liability undertaken by the Company, and liabilities shall be increased accordingly.

The fair value of liabilities is re-measured and any change thereto is recognized as profit and loss of the current period on each balance sheet date and settlement date prior to settlement of the relevant liabilities.

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38. Preference shares, perpetual bonds and other financial instruments: None

39. Revenue

Accounting policy for recognition and measurement of revenue

The revenue is recognized when the customers take control of the relevant goods or services if the contract between the Company and the customers meet all the following conditions: 1) the parties to the contract have approved such contract and undertake to perform their respective obligations; 2) the contract has specified the rights and obligations of the parties thereto and in connection with the transfer of goods or provision of labor services; 3) the contract sets out clear payment terms related to the transfer of goods; 4) the contract has commercial substance, meaning that the performance thereof will change the risk, time distribution or amount of the Company’s future cash flow; 5) the Company is very likely to recover the consideration obtained by transferring goods to customers.

On the enforcing date of the contract, the Company identifies all individual performance obligations in the contract, and apportions the transaction price to each individual performance obligation according to the relative proportion of the individual selling price of the goods. When determining the transaction price, the Company has considered the impact of such factors including variable consideration, major financing component of the contract, non-cash consideration, and consideration payable to the customer.

With respect to each individual performance obligation of the contract, the Company will recognize the transaction price apportioned to such obligation as revenue based on the progress of performance during the relevant performance periods, if any of the following conditions is met: 1) the customer obtains and consumes the economic benefits brought by the Company’s performance during such performance; 2) the customer can control the goods in progress during the Company’s performance; 3) the goods produced from the Company’s performance has irreplaceable use, and in respect of the portion of revenue arising from the Company’s performance completed to date, the Company is entitled to collect revenue during the entire validity period of the contract. The progress of performance is determined according to the nature of the transferred goods using the input or output method. When such progress cannot be reasonably determined, if the costs incurred are expected to be compensated, the Company recognizes revenue based on the amount of costs incurred, until the progress of performance can be reasonably determined.

If none of the aforesaid conditions is met, the Company will recognize the transaction price apportioned to such individual performance obligation when the customer obtains the control over relevant goods. To decide whether

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the customer has obtained the control over goods, the Company takes into account the following indications: 1) the enterprise has the present right to collection for the goods, meaning the customer bears the present obligation to payment for the goods; 2) the enterprise has passed the legal title to the goods to the customer, meaning the customer has had the legal title to the goods; 3) the enterprise has transferred the physical possession of the goods to the customer, meaning the customer has had the physical possession of the goods; 4) the enterprise has transferred the major risks and remunerations concerning the title to the goods to the customer, meaning the customer has obtained the major risks and remunerations concerning the title to the goods; 5) the customer has accepted the goods; 6) other indications to show that the customer has obtained the control over the goods.

Generally, the Company’s business of goods selling only comprises the performance obligation of transferring the goods. The control of the goods is transferred when they are sent out and the Company receives the signed receipt and other documents from the customer, so the Company confirms the realization of revenue at that point in time. The discounts, rewards and other arrangements in some contracts between the Company and customers constitute variable consideration. The Company uses the expected value method or the most likely amount to determine the best estimates for variable consideration, but the transaction price containing variable consideration shall not exceed the amount of cumulatively recognized revenue that is unlikely to have major reversals when the relevant uncertainties are eliminated.

Situations where different business models are adopted for different businesses, which may lead to the differences in the accounting policy for recognition of revenue: None

40. Government grants

Government grants are monetary or non-monetary assets acquired by the Company from the government free of charge, excluding the capital invested by the government as an investor and granted corresponding owner’s equity. Government grants are classified into government grants related to assets and government grants related to income. The Company defines the government grants for purchasing or constructing or otherwise forming longterm assets as asset-related government grants; other government grants are defined as the income-related government grants. Government grants shall be measured at the amount received or receivable if they are monetary assets. Non-monetary government grants shall be measured at fair value; if the fair value cannot be reliably obtained, they shall be measured at the nominal amount. The government grants measured at the nominal amount shall be directly recognized as the profit and loss of the current period.

Asset-related government grants are recognized as deferred income, and included in the profit and loss of the

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current period in stages according to a reasonable and systematic method over the service life of the relevant assets. The income-related government grants shall be recognized as deferred income if they are used to compensate relevant expenses or losses in subsequent periods, and shall be recognized as profit and loss of the current period during the recognition of related expenses; the grants used to compensate related expenses or losses already incurred shall be directly recognized as profit and loss of the current period.

The government grants related to both assets and income shall be accounted for by distinguishing different parts; if it is difficult to distinguish, they shall be, as a whole, classified as income-related government grants.

Government grants related to the Company’s daily activities shall be recognized as other profit and loss or write down relevant costs according to the essence of economic business; those unrelated to the Company’s daily activities shall be recognized as non-operating income and expenditure.

If the recognized government grants need to be returned and there is relevant deferred income balance, the book balance of relevant deferred income shall be written off, and the excess shall be recognized as profit and loss of the current period; otherwise, government grants shall be directly recognized as profit and loss of the current period.

41. Deferred income tax assets/deferred income tax liabilities

(1) Current income tax

On the balance sheet date, the Company measures a current tax liability (or asset) arising from the current and prior periods based on the amount of income tax expected to be paid by the Company (or returned by tax authority) calculated by related tax laws. The taxable income which is the basis for calculation of the current income tax is calculated after appropriate adjustments to the pretax accounting profits for the reporting period.

(2) Deferred income tax assets and deferred income tax liabilities

For the difference between the book value of certain assets and liabilities and their tax bases, and the temporary differences between the book values and the tax bases of items, of which the tax bases can be determined for tax purposes according to the tax laws but which have not been recognized as assets and liabilities, the Company recognizes deferred income tax assets and deferred income tax liabilities using the balance sheet debt method. Where the taxable temporary differences arise from the initial recognition of goodwill and the initial recognition of an asset or liability arising from the transaction that is not a business combination, nor, at the time of the

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transaction, affects neither accounting profit and taxable profit (or deductible loss), the relevant deferred income tax liability shall not be recognized. Additionally, in respect of taxable temporary difference associated with investments in subsidiaries, joint ventures and associates, where the Company can control the timing of the reversal of the temporary differences and it is probable that the temporary differences will not be reversed in the foreseeable future, the relevant deferred income tax liability shall not be recognized. Other than the above exceptions, the Company shall recognize deferred income tax liabilities arising out from all other taxable temporary differences.

Where the deductible temporary differences arise from the initial recognition of an asset or liability arising from the transaction that is not a business combination, nor, at the time of the transaction, affects neither accounting profit and taxable profit (or deductible loss), the relevant deferred income tax liability shall not be recognized. Additionally, in respect of deductible temporary difference associated with investments in subsidiaries, joint ventures and associates, where it is probable that the temporary differences will not be reversed in the foreseeable future or taxable profit will not be available against which the deductible temporary differences can be utilized in the future, the relevant deferred income tax liability shall not be recognized. Other than the above exceptions, the Company recognizes a deferred tax asset for other deductible temporary differences, to the extent that it is probable that future taxable profit will be available against which the deductible temporary differences can be utilized.

The tax effects of deductible losses and taxes available for carrying over are recognized as an asset when it is probable that future taxable profits would be available against which these losses can be utilized.

At the balance sheet date, deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, according to the requirements of tax laws.

The book value of deferred tax assets is reviewed at the balance sheet date and written down to the extent that it is no longer probable that sufficient taxable profit will be available in future periods to allow the deferred tax assets to be utilized. Such write-down is reversed when it becomes probable that sufficient taxable profits will be available.

(3) Income tax expenses

Income taxes comprise current income tax and deferred income tax.

The current income tax and deferred income tax expense or income is recognized as the profit and loss of the

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current period except that the current income tax and deferred income tax is related to transactions or events, which are recognized as other comprehensive income or directly recognized as shareholders’ equity, and thus recognized as other comprehensive income or shareholders’ equity, and that the book value of goodwill is adjusted due to deferred income tax arising from business combination.

42. Leases

(1) Accounting treatment method for operating lease

1) Assets rented through operating lease

For right-of-use assets, if it is reasonably ascertained that the ownership of the asset will be transferred to the lessee at the end of the lease term, then depreciation period runs to the end of the useful life of the lease asset. If it cannot be reasonably ascertained that the ownership of the leased asset will be transferred to the lessee at the end of the lease term, then depreciation period runs to the earlier of the end of the useful life of the asset or the end of the lease term. Meanwhile, the lessee needs to determine whether the right-of-use asset is impaired and account for the identified impairment loss.

2) Assets leased out through operating lease

Lease payments collected by the Company for leasing out assets are amortized on a straight-line basis during the entire lease term without deducting the rent-free period and recognized as lease income. The initial direct costs paid by the Company relevant to the lease transaction shall be included in the current expenses; if the amount is large, it shall be capitalized, and recognized as profit and loss of the current period on the same basis as the recognized lease income over the lease term.

For lease-related expenses that should be borne by the lessee but borne by the Company instead, the Company should deduct them from the total rental income, and the amount after deduction is allocated within the lease term.

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(2) Accounting treatment method for finance lease

1) Assets rented through finance lease

The Company takes the lower of the fair value of the rented asset and the present value of the minimum lease payments as the entry value of the rented asset, the minimum lease payments as the entry value of the long-term payable, and the difference as unrecognized financing cost.

For details on the determination basis, pricing method and depreciation method of assets rented through finance leases, please refer to “Note V (24)”.

The Company uses the effective interest method to amortize unrecognized financing cost during the lease term of the asset and include them in finance expenses.

2) Assets leased out through finance lease

The Company recognizes the difference between the sum of financing lease receivable and unguaranteed residual value and their present value as unrealized financing income on the lease start date, and recognizes as lease income during each period when the rent is received in the future. Initial direct costs incurred to the Company relevant to the lease transaction are included in the initial measurement of the financing lease receivable, and the amount of revenue recognized during the lease period is reduced at the same time.

43. Other important accounting policies and accounting estimates: None

44. Significant changes of accounting policies and accounting estimates

(1) Significant changes of accounting policies

√ Applicable □ Not applicable

Contents and reasons for changes to
	Approval procedure	Remarks
accounting policies

On December 12, 2018, the Ministry of
Finance issued the revised_Accounting_
Standards for Business Enterprises No. 21
-- Leases(C.K. [2018] No. 35) (hereinafter
referred to as the “New Lease Standards”),	On May 21, 2021, the Company convened	Details can be found in the_Announcement_
requiring that enterprises listed both within	the 5th meeting of the fifth session of the
		on Changes to Accounting Policies
the borders and abroad as well as	Board of Directors and the 3rd meeting of
		(Announcement No.: 2021-76) dated May
enterprises listed abroad and adopting	the fifth session of the Board of
		22, 2021 on CNINFO
IFRS or Accounting Standards for	Supervisors, and approved the_Proposal on_
		(http://www.cninfo.com.cn) .
Business Enterprises to prepare financial	Changes to Accounting Policies.

statements should implement these revised
Standards from January 1, 2019; other
enterprises listed within China shall
implement these revised Standards from

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January 1, 2021.

(2) Significant changes of accounting estimates

□ Applicable √ Not applicable

(3) Description on the adjustment of relevant items in the financial statements at the beginning of the year for the first time adoption of the new leasing standards since 2021

Applicable

Whether to adjust the subjects of the balance sheet at the beginning of the year

√ Yes □ No

Consolidated balance sheet

Unit: RMB

Item	December 31, 2020	January 01, 2021
Current assets:
Monetary funds	1,125,196,199.56	1,125,196,199.56
Settlement reserve
Lending to banks and

other financial institutions

Tradable financial assets
Derivative financial

assets

Notes receivable	724,419.74	724,419.74
Accounts receivable	1,051,423,939.59	1,051,423,939.59
Accounts receivable

financing

Prepayments	26,819,108.57	26,819,108.57
Premium receivable
Reinsurance payables
Reinsurance contract

reserves receivable

Other receivables	15,824,945.56	15,824,945.56
Including: Interest

receivable

Dividends

receivable

Financial assets held

under resale agreements

Inventory	1,661,274,495.32	1,661,274,495.32
Contract assets
Assets held for sale	57,073,059.69	57,073,059.69
Non-current assets due

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C&S Paper Co., Ltd. Semi-annual Report 2021

within one year
Other current assets	101,584,569.30	101,584,569.30
Total current assets	4,039,920,737.33	4,039,920,737.33
Non-current assets:
Loans and advances to

customers

Investments in creditor’s

rights

Investments in other

creditor’s rights

Long-term receivable
Long-term equity

investment

Investment in other

equity instruments

Other non-current

financial assets

Investment property	34,575,365.94	34,575,365.94
Fixed assets	2,792,587,302.21	2,792,587,302.21
Construction work in	275,904,617.95
		275,904,617.95
progress

Productive biological

assets

Oil & gas assets
Right-of-use assets		10,611,654.31	10,611,654.31
Intangible assets	169,355,772.24	169,355,772.24
Development expenses
Goodwill	64,654.15	64,654.15
Long-term deferred	26,635,983.14
		26,635,983.14
expenses

Deferred income tax	111,367,362.66
		111,367,362.66
assets

Other non-current assets	28,027,952.15	28,027,952.15
Total non-current assets	3,438,519,010.44	3,449,130,664.75	10,611,654.31
Total assets	7,478,439,747.77	7,489,051,402.08	10,611,654.31
Current liabilities:
Short-term borrowings	142,942,941.34	142,942,941.34
Borrowings from PBC
Placements from banks
and other financial
institutions
Tradable financial

liabilities

Derivative financial

liabilities

Notes payable	234,887,563.22	234,887,563.22

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C&S Paper Co., Ltd. Semi-annual Report 2021

Accounts payable	761,519,389.26	761,519,389.26
Payments received in

advance

Contract liabilities	137,333,617.40	137,333,617.40
Proceeds from financial

assets sold under repo

Customer bank deposits
and due to banks and other
financial institutions
Funds from securities

trading agency

Funds from securities

underwriting agency

Employee remuneration	123,524,627.11
		123,524,627.11
payable

Tax and fees payable	112,608,054.87	112,608,054.87
Other payables	754,844,580.09	754,844,580.09
Including: Interests

payable

Dividends	1,437,466.77
		1,437,466.77
payable

Transaction fee and

commission receivable

Reinsurance payable
Liabilities held for sale
Non-current liabilities
		3,472,854.73	3,472,854.73
due within one year

Other current liabilities	17,628,086.63	17,628,086.63
Total current liabilities	2,285,288,859.92	2,288,761,714.65	3,472,854.73
Non-current liabilities:
Insurance contract

reserves

Long-term borrowings
Bonds payable
Including: Preference

shares

Perpetual

bonds

Lease liabilities		7,138,799.58	7,138,799.58
Long-term payable
Long-term employee

remuneration payable

Provision
Deferred income	115,101,158.13	115,101,158.13
Deferred income tax	35,903,653.30
		35,903,653.30
liabilities

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Other non-current

liabilities

Total non-current liabilities	151,004,811.43	158,143,611.01	7,138,799.58
Total liabilities	2,436,293,671.35	2,446,905,325.66	10,611,654.31
Owner’s equity:
Share capital	1,311,487,077.00	1,311,487,077.00
Other equity instruments
Including: Preference

shares

Perpetual

bonds

Capital reserve	907,006,505.05	907,006,505.05
Less: Treasury shares	96,480,911.29	96,480,911.29
Other comprehensive

income

Special reserves
Surplus reserves	61,469,258.27	61,469,258.27
General reserves
Retained earnings	2,858,664,147.39	2,858,664,147.39
Total equity attributable to	5,042,146,076.42
owners of the parent		5,042,146,076.42
company
Equities of minority

shareholders

Total owner’s equity	5,042,146,076.42	5,042,146,076.42
Total liabilities and owners’	7,478,439,747.77
		7,489,051,402.08	10,611,654.31
equities

Explanation of adjustment

The Company started to adopt the New Lease Standards from January 1, 2021.

Balance sheet of the Parent Company

Unit: RMB

Item	December 31, 2020	January 01, 2021
Current assets:
Monetary funds	170,229,178.13	170,229,178.13
Tradable financial assets
Derivative financial

assets

Notes receivable
Accounts receivable	92,647,372.33	92,647,372.33
Accounts receivable

financing

Prepayments	7,940,396.34	7,940,396.34
Other receivables	136,987,584.64	136,987,584.64

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C&S Paper Co., Ltd. Semi-annual Report 2021

Including: Interest

receivable

Dividends

receivable

Inventory	156,605,546.36	156,605,546.36
Contract assets
Assets held for sale
Non-current assets due

within one year

Other current assets	52,517,725.87	52,517,725.87
Total current assets	616,927,803.67	616,927,803.67
Non-current assets:
Investments in creditor’s

rights

Investments in other

creditor’s rights

Long-term receivable
Long-term equity	1,928,113,219.50
		1,928,113,219.50
investment

Investment in other

equity instruments

Other non-current

financial assets

Investment property	17,939,329.51	17,939,329.51
Fixed assets	257,354,688.59	257,354,688.59
Construction work in

progress

Productive biological

assets

Oil & gas assets
Right-of-use assets		2,649,675.09	2,649,675.09
Intangible assets	25,205,232.21	25,205,232.21
Development expenses
Goodwill
Long-term deferred

expenses

Deferred income tax	46,811,106.77
		46,811,106.77
assets

Other non-current assets	2,619,959.27	2,619,959.27
Total non-current assets	2,278,043,535.85	2,280,693,210.94	2,649,675.09
Total assets	2,894,971,339.52	2,897,621,014.61	2,649,675.09
Current liabilities:
Short-term borrowings
Tradable financial

liabilities

Derivative financial

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C&S Paper Co., Ltd. Semi-annual Report 2021

liabilities
Notes payable
Accounts payable	420,061,168.44	420,061,168.44
Payments received in

advance

Contract liabilities	17,388,431.01	17,388,431.01
Employee remuneration	44,678,713.21
		44,678,713.21
payable

Tax and fees payable	5,995,417.05	5,995,417.05
Other payables	126,072,040.24	126,072,040.24
Including: Interests

payable

Dividends	1,437,466.77
		1,437,466.77
payable

Liabilities held for sale
Non-current liabilities
		967,707.49	967,707.49
due within one year

Other current liabilities	2,260,496.03	2,260,496.03
Total current liabilities	616,456,265.98	617,423,973.47	967,707.49
Non-current liabilities:
Long-term borrowings
Bonds payable
Including: Preference

shares

Perpetual

bonds

Lease liabilities		1,681,967.60	1,681,967.60
Long-term payable
Long-term employee

remuneration payable

Provision
Deferred income	5,855,467.25	5,855,467.25
Deferred income tax	7,202,336.33
		7,202,336.33
liabilities

Other non-current

liabilities

Total non-current liabilities	13,057,803.58	14,739,771.18	1,681,967.60
Total liabilities	629,514,069.56	632,163,744.65	2,649,675.09
Owner’s equity:
Share capital	1,311,487,077.00	1,311,487,077.00
Other equity instruments
Including: Preference

shares

Perpetual

bonds

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C&S Paper Co., Ltd. Semi-annual Report 2021

Capital reserve	831,693,206.19	831,693,206.19
Less: Treasury shares	96,480,911.29	96,480,911.29
Other comprehensive

income

Special reserves
Surplus reserves	61,347,923.99	61,347,923.99
Retained earnings	157,409,974.07	157,409,974.07
Total owner’s equity	2,265,457,269.96	2,265,457,269.96
Total liabilities and owners’	2,894,971,339.52
		2,897,621,014.61	2,649,675.09
equities

Explanation of adjustment

The Company started to adopt the New Lease Standards from January 1, 2021.

(4) Description on the retrospective adjustment of previous comparable data at the first time adoption of the new leasing standards in 2021

□ Applicable √ Not applicable

45. Others: None

VI. Taxes

1. Main tax types and tax rates

Tax	Tax basis	Tax rate
	Taxable VAT (calculated based on the
	difference of deducting the amount of
Value-added tax	input tax which is allowed to be deducted	13%
	in the current period from the result of
	multiplying taxable sales by applicable tax
	rate)
City construction and maintenance tax	Turnover tax paid	5%. 7%
Corporate income tax	Taxable income	15%, 16.5%, 20%, 25%, progressive rate
Education surcharges	Turnover tax paid	3%
Local education surcharges	Turnover tax paid	2%

Description of disclosure if different income tax rates apply to different corporate taxpayers

Name of taxpayer	Income tax rate
C&S Paper Co., Ltd., Zhongshan Zhongshun Trading Co., Ltd.,
C&S (Hubei) Paper Co., Ltd., Xiaogan C&S Trading Co., Ltd.,
Zhejiang Zhongshun Paper Co., Ltd., Chengdu Zhongshun Paper
Co., Ltd., Hangzhou Jie Rou Trading Co., Ltd., Beijing C&S	25%
Paper Co., Ltd., Sun Daily Necessities Co., Ltd., Shanghai
Huicong Paper Co., Ltd., Yunfu Hengtai Trading Co., Ltd., C&S
(Dazhou) Paper Co., Ltd., Dolemi SanitaryProducts Co., Ltd.,

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C&S Paper Co., Ltd. Semi-annual Report 2021

C&S (Jiangsu) Paper Co., Ltd., Yunnan Dolemi Trading Co.,
Ltd., Luzhou Dolemi Sanitary Products Co., Ltd., and Mianyang
Dolemi Sanitary Products Co., Ltd.
C&S (Zhongshan) Paper Co., Ltd.	20%
Zhong Shun International Co., Ltd., and C&S Hong Kong Co.,
	16.50%
Ltd. (Note 1)

Jiangmen Zhongshun Paper Co., Ltd., C&S (Sichuan) Paper Co.,
	15%
Ltd., and C&S (Yunfu) Paper Co., Ltd.

C&S (Macao) Co., Ltd. (Note 2)	Progressive rate

2. Tax incentive

Jiangmen Zhongshun Paper Co., Ltd. was certified as a high-tech enterprise of Guangdong Province in 2018, and was awarded the Certificate of High-tech Enterprise (No. GR201844008474) on November 28, 2018, with a valid term of three years. Therefore, the corporate income tax is calculated at a tax rate of 15% during the reporting period.

C&S (Sichuan) Paper Co., Ltd. was certified as a high-tech enterprise of Sichuan Province in 2020, and was awarded the Certificate of High-tech Enterprise (No. GR202051001193) on September 11, 2020, with a valid term of three years. Therefore, the corporate income tax is calculated at a tax rate of 15% during the reporting period.

C&S (Yunfu) Paper Co., Ltd. was certified as a high-tech enterprise of Guangdong Province in 2020, and was awarded the Certificate of High-tech Enterprise (No. GR202044006774) on December 9, 2020, with a valid term of three years. Therefore, the corporate income tax is calculated at a tax rate of 15% during the reporting period.

Pursuant to relevant provisions of the Announcement of the State Administration of Taxation and the Ministry of Finance on the Implementation of Preferential Income Tax Policies for Small and Micro Enterprises and Individual Industrial and Commercial Households (MOF and SAT Doc. No. 2021 [012]) and the Announcement of the State Administration of Taxation on Issues Concerning the Implementation of Inclusive Income Tax Reduction and Exemption Policies for Small and Low-profit Enterprises (SAT Doc. No. 2019 [002]), C&S (Zhongshan) Paper Co., Ltd. is entitled to the inclusive income tax reduction and exemption policy for small and low-profit enterprises in 2021. Specifically, if the annual taxable income does not exceed RMB1 million, the taxable income is calculated at a reduced rate of 12.5% with a corporate income tax rate of 20%; if the annual taxable income is over RMB1 million but less than RMB3 million, the taxable income is calculated at a reduced rate of 50% while the corporate income tax rate is levied at 20%.

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C&S Paper Co., Ltd. Semi-annual Report 2021

3. Others

Note 1: C&S Hong Kong Co., Ltd. is a Hong Kong-based company incorporated according to the laws of Hong Kong, and adopts the tax laws thereof. The tax rate for its income tax is 16.50%;

Note 2: C&S (Macao) Co., Ltd. is a Macao-based company incorporated according to the laws of Macao. Its complementary tax adopts a progressive rate (tax on taxable income that is less than MOP300,000 is exempted, and the taxable income that is more than MOP300,000 is taxed at 12%).

VII. Notes to Items of the Consolidated Financial Statements

1. Monetary fund

	Unit: RMB Balance at the end of the period Balance at the beginning of the period 56,626.99 36,349.55 694,226,698.05 1,047,785,634.71 94,418,811.95 77,374,215.30 788,702,136.99 1,125,196,199.56 30,091,357.87 99,311,423.25	Unit: RMB Balance at the end of the period Balance at the beginning of the period 56,626.99 36,349.55 694,226,698.05 1,047,785,634.71 94,418,811.95 77,374,215.30 788,702,136.99 1,125,196,199.56 30,091,357.87 99,311,423.25
Item	Balance at the end of the period	Balance at the beginning of the period
Cash on hand	56,626.99	36,349.55
Bank deposits	694,226,698.05	1,047,785,634.71
Other monetary funds	94,418,811.95	77,374,215.30
Total	788,702,136.99	1,125,196,199.56
Including: Total deposits in overseas
	30,091,357.87	99,311,423.25
banks

Other description

Balance of other monetary funds at the end of the reporting period is the security deposit for issuing letters of

credit and bank acceptance bill and balance of Alipay. Refer to “Note VII (81)” for circumstances where ownership of monetary funds is restricted.

2. Transactional financial assets: None

3. Derivative financial assets: None

4. Notes receivable

(1) Notes receivable presentation by category

Unit: RMB

Item	Balance at the end of the period	Balance at the beginning of the period
Bank acceptance bill	190,080.00	724,419.74
Trade acceptance bill	1,323,062.38	0.00
Total	1,513,142.38	724,419.74

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C&S Paper Co., Ltd. Semi-annual Report 2021

Provision of bad debt reserve by portfolio: None

Provision of bad debt reserve by portfolio

Description of reason for the portfolio:

If the bad debt reserve of notes receivable is set aside according to general model of expected credit loss, please

refer to the disclosure method of other receivables to disclose relevant information on bad debt reserve:

□ Applicable √ Not applicable

(2) Bad debt reserve that is set aside, recovered or transferred back in the reporting period: None

(3) Notes receivable that the Company has pledged at the end of the reporting period: None

(4) Notes receivable that the Company has endorsed or discounted at the end of the reporting period and are not due on the balance sheet date: None

(5) Notes that are transferred to notes receivable because the drawer does not perform the contract at the end of the reporting period: None

Other descriptions:

(1) The Company has no pledged notes receivable as at June 30, 2021.
(2) The Company has no derecognized notes receivable that are endorsed or discounted but not due as at June 30, 2021.

(3) The Company has no notes that are transferred to notes receivable because the drawer does not perform the contract as at June 30, 2021.

(6) Notes receivable actually written off in the reporting period: None

5. Accounts receivable

(1) Accounts receivable disclosure by category

Unit: RMB

	Balance at the end of the year	Balance at the end of the year	Balance at the end of the year	Balance at the end of the year		Balance at	Balance at	the beginning of the year	the beginning of the year	the beginning of the year
			Impairment					Impairment
	Book balance					Bk bl
Type			provision		Book	oo	aance	provision
										Book value
		Percenta		Provision	value		Percentag		Provision
	Amount		Amount			Amount		Amount
		ge		ratio			e		ratio

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C&S Paper Co., Ltd. Semi-annual Report 2021

Accounts receivable
for which bad debt	34,324,6	3.54%	10,681,0	31.12%	23,643,60	34,567,65	3.17%	10,681,06	30.90%	23,886,582.
reserve is set aside	76.68		68.59		8.09	1.21		8.59		62
individually
Including:
Accounts receivable
for which bad debt	935,319,	96.46%	25,649,5	2.74%	909,669,5	1,054,953	96.83%	27,415,94	2.60%	1,027,537,3
reserve is set aside in	040.34		10.45		29.89	,298.93		1.96		56.97
portfolios
Including:
Portfolio based on	935,319,		25,649,5	2.74%	909,669,5	1,054,953		27,415,94		1,027,537,3
		96.46%					96.83%		2.60%
aging	040.34		10.45		29.89	,298.93		1.96		56.97

	969,643,		36,330,5	3.75%	933,313,1 37.98	1,089,520		38,097,01		1,051,423,9 39.59
Total		100.00%					100.00%		3.50%
	717.02		79.04			,950.14		0.55

Bad debt reserve set aside individually: 10,681,068.59

Unit: RMB

	Balance at the end of the period	Balance at the end of the period	Balance at the end of the period	Balance at the end of the period
Name
	Book balance	Impairment provision	Ratio of provision	Reason for provision

				It is difficult to recover
				all goods payments due
Institution 1	6,116,636.66	2,462,996.13	40.27%	to the poor business
				performance of the
				customer.
				It is difficult to recover
				all goods payments due
Institution 2	28,208,040.02	8,218,072.46	29.13%	to the poor business
				performance of the
				customer.
Total	34,324,676.68	10,681,068.59	--	--

Bad debt reserve set aside in portfolios: 25,649,510.45

Unit: RMB

	Balance at the end of the period	Balance at the end of the period	Balance at the end of the period
Name
	Book balance	Impairment provision	Ratio of provision

Within the credit period	760,706,754.96	15,214,135.10	2.00%
Credit period - 1 year	168,688,133.48	8,434,406.67	5.00%
Subtotal of those within 1 year	929,394,888.44	23,648,541.77	2.54%
1 to 2 years	563,198.16	84,479.72	15.00%
2 to 3 years	4,732,949.69	1,419,884.91	30.00%
Over 3 years	628,004.05	496,604.05	79.08%
Total	935,319,040.34	25,649,510.45	--

Description of reason for the portfolio: Accounts receivable with the same aging have similar credit risk

characteristics.

Provision of bad debt reserve by portfolio: None

Description of reason for the portfolio:

If the bad debt reserve of accounts receivable is set aside according to general model of expected credit loss,

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C&S Paper Co., Ltd. Semi-annual Report 2021

please refer to the disclosure method of other receivables to disclose relevant information on bad debt reserve:

□ Applicable √ Not applicable

Disclose by aging

Unit: RMB

Aging	Balance at the end of the period
Within 1 year (inclusive)	929,394,888.44
1 to 2 years	563,198.16
2 to 3 years	4,732,949.69
Over 3 years	34,952,680.73
3 to 4 years	14,481,101.38
4 to 5 years	13,989,738.64
Over 5 years	6,481,840.71
Total	969,643,717.02

(2) Bad debt reserve that is set aside, recovered or transferred back in the reporting period

Provision of bad debt reserve of the reporting period:

Unit: RMB

	Balance at the	Amount of change in the reporting period	Amount of change in the reporting period	Amount of change in the reporting period	Amount of change in the reporting period
						Balance at the
Type	beginning of the		Recovery or
		Provision		Write-off	Others	end of the period
	period		reversal

Accounts
	38,097,010.55	-1,766,431.51				36,330,579.04
receivable

Total	38,097,010.55	-1,766,431.51				36,330,579.04

Wherein, the amount of recovered or transferred back bad debt reserve in the reporting period is important: None

(3) Accounts receivable actually written off in the reporting period: None

(4) Top five debtors in closing balance of accounts receivable

Unit: RMB

		Percentage in total balance of
	Balance of accounts receivable at		Balance for bad debt reserve at
Name of institution		accounts receivable at the end of
	the end of the period		the end of the period
		the period

1st	240,902,755.98	24.84%	4,819,486.05
2nd	101,975,148.19	10.52%	3,063,592.00
3rd	54,259,924.13	5.60%	1,325,376.26
4th	31,518,078.02	3.25%	972,258.60
5th	28,969,449.44	2.99%	1,184,244.29
Total	457,625,355.76	47.20%

151

C&S Paper Co., Ltd. Semi-annual Report 2021

(5) Accounts receivable derecognized due to transfer of financial assets

The Company has no accounts receivable derecognized due to the transfer of financial assets as at the end of the reporting period

(6) Amounts of assets and liabilities that are formed by the transfer and ongoing involvement of accounts receivable

The Company has no amounts of assets and liabilities that are formed by the transfer and ongoing involvement of

accounts receivable as at the end of the reporting period.

Other description: None

6. Accounts receivable financing

Increase and decrease of accounts receivable financing and changes in fair value in the reporting period

□ Applicable √ Not applicable

If the provisions for asset impairment of accounts receivable financing are set aside according to general model of

expected credit loss, please refer to the disclosure method of other receivables to disclose relevant information on provisions for asset impairment:

□ Applicable √ Not applicable

Other description: None

7. Prepayments

(1) Prepayments presentation by aging

Unit: RMB

	Balance at the end of the period	Balance at the end of the period	Balance at the beginning of the period	Balance at the beginning of the period
Aging
	Amount	Percentage	Amount	Percentage

Within 1 year	12,804,377.00	99.76%	26,819,108.57	100.00%
1 to 2 years	30,210.00	0.24%
Total	12,834,587.00	--	26,819,108.57	--

Explanation on the reason of untimely settlement of prepayments whose age exceeds one year with significant

amount: None

(2) Top five payees in closing balance of prepayment

The Company’s total prepayment amount of the top five payees in closing balance of prepayment is

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C&S Paper Co., Ltd. Semi-annual Report 2021

RMB8,196,395.68, accounting for 63.86% of closing balance of prepayment.

Other description: None

8. Other receivables

Unit: RMB

Item	Balance at the end of the period	Balance at the beginning of the period
Other receivables	21,117,810.56	15,824,945.56
Total	21,117,810.56	15,824,945.56

(1) Interest receivable

1) Classification of interest receivable: None

2) Significant overdue interest: None

3) Provision of bad debt reserve

□ Applicable √ Not applicable

(2) Dividends receivable

1) Classification of dividends receivable: None

2) Significant dividends receivable exceeding one year: None

3) Provision of bad debt reserve

□ Applicable √ Not applicable

Other description: None

(3) Other receivables

1) Classification of other receivables by nature

Unit: RMB

		Book balance at the beginning of the
Nature	Book balance at the end of the period
		period

Margins and deposits	4,398,979.17	4,621,457.93
Current accounts	5,255,892.23	5,350,546.55
Reserve	1,778,041.01	1,704,120.13
Others	12,000,234.22	5,999,332.44

153

C&S Paper Co., Ltd. Semi-annual Report 2021

Total 23,433,146.63 17,675,457.05

2) Provision of bad debt reserve

Unit: RMB

	Phase I	Phase II	Phase III
		Expected credit losses in	Expected credit losses in
Bad debt provision	Expected credit loss			Total
		the whole duration (without	the whole duration (with
	in the next 12 months
		credit impairment)	credit impairment)

Balance as at January 1,
	1,850,511.49			1,850,511.49
2021

Balance as at January 1,
2021 in the reporting	——	——	——	——
period
Provision in the reporting
	464,824.58			464,824.58
period

Balance as at June 30,
	2,315,336.07			2,315,336.07
2021

Description of changes in the book balance where there are significant changes in provision for the current period

□ Applicable √ Not applicable

Disclose by aging

Unit: RMB

Aging	Balance at the end of the period
Within 1 year (inclusive)	19,339,617.17
1 to 2 years	852,567.91
2 to 3 years	2,110,636.86
Over 3 years	1,130,324.69
3 to 4 years	1,058,637.44
4 to 5 years	27,454.05
Over 5 years	44,233.20
Total	23,433,146.63

3) Bad debt reserve that is set aside, recovered or transferred back in the reporting period

Provision of bad debt reserve of the reporting period:

Unit: RMB

	Balance at the	Amount of change in the reporting period	Amount of change in the reporting period	Amount of change in the reporting period	Amount of change in the reporting period
						Balance at the
Type	beginning of the		Recovery or
		Provision		Write-off	Others	end of the period
	period		reversal
Other receivables	1,850,511.49	464,824.58				2,315,336.07
Total	1,850,511.49	464,824.58				2,315,336.07

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C&S Paper Co., Ltd. Semi-annual Report 2021

Where the amount of recovered or reversed bad debt reserve in the reporting period is important: None

4) Other receivables actually written off in the reporting period: None

5) Top five debtors in closing balance of other accounts receivable

Unit: RMB

				Percentage in total
					Balance of bad debt
Name of institution	Nature of the amount	Balance at the end of	Aging	balance of other	reserve at the end of
		the period		receivables at the
				end of the period	the period

1st	Others	9,460,860.30	Within 1 year	40.37%	473,043.02
2nd	Margins and deposits	1,100,000.00	2-3 years	4.69%	330,000.00
3rd	Margins and deposits	600,000.00	2-3 years	2.56%	180,000.00
4th	Margins and deposits	600,000.00	3-4 years	2.56%	300,000.00
			Within 1 year, 1-2
5th	Margins and deposits	560,000.00	years, 2- 3 years, 3-4	2.39%	162,500.00
			years
Total	--	12,320,860.30	--	52.57%	1,445,543.02

6) Receivables involving government grants: None

7) Other receivables derecognized due to the transfer of financial assets: None

8) Amount of assets and liabilities that are formed by the transfer and ongoing involvement of other receivables: None

9. Inventory

Whether the Company needs to comply with requirements for disclosure in the real estate industry: No

(1) Classification of inventories

Unit: RMB

	Balance at the end of the period	Balance at the end of the period	Balance at the end of the period	Balance at the beginning of the period	Balance at the beginning of the period	Balance at the beginning of the period
		Provision for			Provision for
		impairment of			impairment of
Item
	Book balance	inventories or	Book value	Book balance	inventories or	Book value
		provision for			provision for
		contract			contract
		performance cost			performance cost
Raw materials	1,070,227,399.23	185,609.86	1,070,041,789.37	1,148,312,808.05	133,039.11	1,148,179,768.94
Work-in-process
	49,416,644.06	422,448.32	48,994,195.74	40,777,441.76	306,847.08	40,470,594.68
products

Commodity	435,922,026.80	2,524,005.70	433,398,021.10	410,313,722.29	2,738,280.52	407,575,441.77

155

C&S Paper Co., Ltd. Semi-annual Report 2021

stocks
Packages	33,282,071.36	284,363.42	32,997,707.94	32,644,525.84	145,489.07	32,499,036.77
Low-value
	23,001,401.72	617,506.21	22,383,895.51	13,889,922.62	529,767.94	13,360,154.68
consumables

Materials for
consigned	16,493,835.16	0.00	16,493,835.16	19,189,498.48		19,189,498.48
processing
Total	1,628,343,378.33	4,033,933.51	1,624,309,444.82	1,665,127,919.04	3,853,423.72	1,661,274,495.32

(2) Provision for impairment of inventories or provision for contract performance cost

Unit: RMB

	Balance at the	Increase in the current period	Increase in the current period	Decrease in the current period	Decrease in the current period
						Balance at the
Item	beginning of the			Reversal or
		Provision	Others		Others	end of the period
	period			written off
Raw materials	133,039.11	208,273.26		155,702.51		185,609.86
Work-in-process
	306,847.08	288,779.68		173,178.44		422,448.32
products

Commodity
	2,738,280.52	997,462.20		1,211,737.02		2,524,005.70
stocks

Packages	145,489.07	210,502.25		71,627.90		284,363.42
Low-value
	529,767.94	313,992.36		226,254.09		617,506.21
consumables

Total	3,853,423.72	2,019,009.75		1,838,499.96		4,033,933.51

(3) Explanation that balance of inventory at the end of the reporting period includes amount of capitalization of borrowing costs: None

(4) Explanation on amortized amount of contract performance cost in the reporting period: None

10. Contract assets

If the bad debt reserve of contrast assets is set aside according to general model of expected credit loss, please

refer to the disclosure method of other receivables to disclose relevant information on bad debt reserve:

□ Applicable √ Not applicable

Provision for impairment of contract assets in the reporting period: None

11. Assets held for sale

Unit: RMB

	Book balance at
		Impairment	Book value at the		Estimated	Estimated
Item	the end of the			Fair value
		provision	end of the period		disposal fee	disposal time
	period

Immovable assets						December 31,
	57,073,059.69		57,073,059.69	66,285,118.00
of the old factory						2021

156

C&S Paper Co., Ltd. Semi-annual Report 2021

of Hubei C&S
(including land
use rights)
Total	57,073,059.69	57,073,059.69	66,285,118.00	--

Other description:

In December 2019, in order to boost the investment and construction of Phase II of the high-end household paper project in the industrial zone in the Economic Development Area of Xiaonan District, Xiaogan City, the Company signed an agreement on the acquisition of the immovable assets in the old factory of Hubei C&S (including land

use rights) upon consultation with Xiaonan District People’s Government of Xiaogan City. The Company believed that the immovable assets of the old factory of Hubei C&S (including land use rights) could be sold immediately in the current situation, according to similar transactions where such assets were sold. The Company signed a binding purchase agreement with Xiaogan Changxing Investment Co., Ltd. and Xiaonan District People’s Government of Xiaogan City regarding the transfer of such assets in December 2019. The Agreement contained important terms and conditions including the price and time of the transaction as well as penalty for breach of contract that was strict enough. Therefore, there is little possibility for the agreement to be significantly changed or canceled. The Company originally estimated that the ultimate transfer would be completed before December 2020. However, under the impact of the Covid-19 pandemic in 2020, the government shifted its focus to antipandemic work with people’s interests above everything else. Especially, Xiaogan City of Hubei Province was one of the hardest-hit areas, so the government has put all efforts in the fight against the virus and post-pandemic economic rejuvenation. As a result, it was unable to pay all asset transfer amount within the agreed period. The Company has received most of the asset transfer payment as of the reporting date (RMB58.14 million).

12. Non-current assets due within one year: None

13. Other current assets

Unit: RMB

Item	Balance at the end of the period	Balance at the beginning of the period
Wealth management products		50,000,000.00
Input VAT to be deducted	33,611,344.77	51,550,834.13
Prepaid corporate income tax	1,054,891.79	33,735.17
Total	34,666,236.56	101,584,569.30

Other description: None

157

C&S Paper Co., Ltd. Semi-annual Report 2021

14. Investments in creditor’s rights

Description of changes in the book balance where there are significant changes in provision for the current period

□ Applicable √ Not applicable

Other description: None

15. Other investments in creditor’s rights

Description of changes in the book balance where there are significant changes in provision for the current period

□ Applicable √ Not applicable

Other description: None

16. Long-term receivables

(1) Long-term receivables

Description of changes in the book balance where there are significant changes in provision for the current period

□ Applicable √ Not applicable

(2) Long-term receivables derecognized due to the transfer of financial assets: None

(3) Amounts of assets and liabilities that are formed by the transfer and ongoing involvement of long-term receivables: None

17. Long-term equity investment: None

18. Investment in other equity instruments: None

19. Other non-current financial assets: None

20. Investment property

(1) Investment property measured at cost

√ Applicable □ Not applicable

Unit: RMB

			Construction work in
Item	Properties and buildings	Land use rights		Total
			progress

I. Original Book Value

158

C&S Paper Co., Ltd. Semi-annual Report 2021

1. Balance at the
	31,072,632.92	21,661,131.29	52,733,764.21
beginning of the period

2. Increase in the current

period

(1) External purchase
(2) Inventory\fixed
assets\transfer from
construction work in
progress
(3) Increase in business

combination

3. Decrease in the current

period

(1) Disposal
(2) Other transfers out
4. Balance at the end of
	31,072,632.92	21,661,131.29	52,733,764.21
the period

II. Accumulated
Depreciation and
Amortization
1. Balance at the
	12,995,477.31	5,162,920.96	18,158,398.27
beginning of the period

2. Increase in the current
	486,421.32	232,020.78	718,442.10
period

(1) Provision or
	486,421.32	232,020.78	718,442.10
amortization

3. Decrease in the current

period

(1) Disposal
(2) Other transfers out
4. Balance at the end of
	13,481,898.63	5,394,941.74	18,876,840.37
the period

III. Impairment Provision
1. Balance at the

beginning of the period

2. Increase in the current

period

(1) Provision
3. Decrease in the current

period

(1) Disposal
(2) Other transfers out
4. Balance at the end of

the period

IV. Book Value
1. Book value at the end			33,856,923.84
	17,590,734.29	16,266,189.55
of the period

2. Book value at the	18,077,155.61	16,498,210.33	34,575,365.94

159

C&S Paper Co., Ltd. Semi-annual Report 2021

beginning of the period

(2) Investment property measured at fair value

□ Applicable √ Not applicable

(3) Investment property that the certificate of title has not been issued

The Company does not have investment property that the certificate of title has not been issued as at June 30, 2021.

21. Fixed assets

Unit: RMB

Item	Balance at the end of the period	Balance at the beginning of the period
Fixed assets	3,182,792,165.52	2,792,587,302.21
Total	3,182,792,165.52	2,792,587,302.21

(1) Information on fixed assets

Unit: RMB

	Properties and				Production
Item		Equipment	Office equipment	Motor vehicles		Total
	buildings				equipment

I. Original Book

Value

1. Balance at
the beginning of	1,120,022,374.29	3,014,753,086.43	54,682,544.73	17,187,070.95	79,292,109.05	4,285,937,185.45
the period
2. Increase in
	212,097,885.51	330,616,989.41	3,206,098.62	2,207,607.08	14,719,985.94	562,848,566.56
the current period

(1) Purchase		207,340.70	2,356,163.74	2,207,607.08	5,605,888.51	10,377,000.03
(2)
Inventory\fixed
assets\transfer	212,097,885.51	330,409,648.71	849,934.88		9,114,097.43	552,471,566.53
from construction
work in progress
(3) Increase
in business
combination

3. Decrease in
	6,500.00	24,662,638.49	151,431.82		498,872.65	25,319,442.96
the current period

(1) Disposal	6,500.00	24,662,638.49	151,431.82		498,872.65	25,319,442.96

160

C&S Paper Co., Ltd. Semi-annual Report 2021

or scrap

4. Balance at
the end of the	1,332,113,759.80	3,320,707,437.35	57,737,211.53	19,394,678.03	93,513,222.34	4,823,466,309.05
period
II. Accumulated

Depreciation

1. Balance at
the beginning of	230,627,030.94	1,170,141,702.77	26,023,963.29	8,459,387.08	41,628,743.42	1,476,880,827.50
the period
2. Increase in
	23,017,434.76	128,699,060.47	4,229,425.08	833,983.50	5,604,732.32	162,384,636.13
the current period

(1) Provision	23,017,434.76	128,699,060.47	4,229,425.08	833,983.50	5,604,732.32	162,384,636.13

3. Decrease in
	5,850.00	11,822,474.99	132,384.81		310,523.79	12,271,233.59
the current period

(1) Disposal
	5,850.00	11,822,474.99	132,384.81		310,523.79	12,271,233.59
or scrap


4. Balance at
the end of the	253,638,615.70	1,287,018,288.25	30,121,003.56	9,293,370.58	46,922,951.95	1,626,994,230.04
period
III. Impairment

Provision

1. Balance at
the beginning of		16,415,970.27	1,219.51		51,865.96	16,469,055.74
the period
2. Increase in
		2,285,297.81				2,285,297.81
the current period

(1) Provision		2,285,297.81				2,285,297.81

3. Decrease in
		5,021,354.59	1,219.51		51,865.96	5,074,440.06
the current period

(1) Disposal
		5,021,354.59	1,219.51		51,865.96	5,074,440.06
or scrap


4. Balance at
the end of the		13,679,913.49				13,679,913.49
period
IV. Book Value
1. Book value
at the end of the	1,078,475,144.10	2,020,009,235.61	27,616,207.97	10,101,307.45	46,590,270.39	3,182,792,165.52
period
2. Book value
at the beginning	889,395,343.35	1,828,195,413.39	28,657,361.93	8,727,683.87	37,611,499.67	2,792,587,302.21
of the period

161

C&S Paper Co., Ltd. Semi-annual Report 2021

(2) Information on temporarily idle fixed assets

Unit: RMB

		Accumulated	Impairment
Item	Original book value			Book value	Remarks
		depreciation	provision

Equipment	25,446,420.81	10,971,916.85	13,679,913.49	794,590.47
Total	25,446,420.81	10,971,916.85	13,679,913.49	794,590.47

(3) Fixed assets leased through operating

Unit: RMB

Item	Book value at the end of the period
Machinery and equipment leased out through operating lease	574,633.12
Total	574,633.12

(4) Fixed assets that the certificate of title has not been issued

Unit: RMB

		Reasons for the certificate of title having
Item	Book value
		not been issued

Workshops of Zhejiang C&S	3,680,024.54	Processing
Plants and warehouses of Tangshan Branch	46,484,957.02	Processing
Workshops, warehouses, dormitories and
	155,491,394.59	Processing
boilers of Hubei C&S Phase II project

Warehouse of Yunfu C&S	21,164,864.85	Processing
Total	226,821,241.00

Other description: There was no limitation on the ownership of fixed assets of the Company at the end of the

reporting period.

(5) Disposal of fixed assets: None

22. Construction work in process

Unit: RMB

Item	Balance at the end of the period	Balance at the beginning of the period
Construction work in process	55,534,528.69	275,904,617.95
Total	55,534,528.69	275,904,617.95

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(1) Construction work in progress

Unit: RMB

	Balance at the end of the	Balance at the end of the	period	Balance at the beginning of	Balance at the beginning of	the period
Item		Impairment			Impairment
	Book balance		Book value	Book balance		Book value
		provision			provision

Construction
work of C&S	443,396.21		443,396.21
Paper
Construction
work of Jiangmen	5,431,119.88		5,431,119.88	1,028,646.43		1,028,646.43
C&S
Construction
work of Zhejiang	5,309,309.84		5,309,309.84	249,608.17		249,608.17
C&S
Construction
work of Sichuan				5,760,144.05		5,760,144.05
C&S
Construction
work of Tangshan	100,858.68		100,858.68
Branch
Construction
work of Hubei	38,447,658.15		38,447,658.15	244,523,934.15		244,523,934.15
C&S
Construction
work of Yunfu	5,271,603.86		5,271,603.86	24,342,285.15		24,342,285.15
C&S
Construction
work of Jiangsu	530,582.07		530,582.07
C&S
Total	55,534,528.69		55,534,528.69	275,904,617.95		275,904,617.95

(2) Changes of significant construction work in progress in the current period

Unit: RMB

		Balance	Increase		Decrease	Balance				Includin
				Amount of fixed			Proporti on of the		Accumul ative	g: Amount	Interest aitaliz
Item	Budget	at the beginnin g of the	in the	assets transferr ed in the	in the	at the	cumulati ve construct	Construc tion progress	amount of interest	of interest capitaliz a	p tion rate	Source
	number		current id		current id	end of h					in the	of fund
		year	pero	current period	pero	te year	ion input in budget		capitaliz ation	ation in the	current period
										period
Construc		. 0
tion	470,000		443,396.			443,396.
work of							95.00%	95.00%				Others
	0		21			21
C&S
Paper
Construc
	22,376,	5 1,028,64	20,641,8	16,239,3		5,431,11	96.84%	96.84%				Others
tion

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C&S Paper Co., Ltd. Semi-annual Report 2021

work of	05.11	6.43	13.10	39.65	9.88
Jiangme
n C&S
Construc
tion	10,980,5	249,608.	10,040,7	4,981,02	5,309,30
work of						93.71%	93.71%	Others
	43.94	17	25.49	3.82	9.84
Zhejiang
C&S
Construc
tion	13,386,5	5,760,14	6,086,37	11,846,5
work of						100.00%	100.00%	Others
	63.41	4.05	2.24	16.29
Sichuan
C&S
Construc
tion	306,200,		3,122,52	3,021,66	100,858.
work of						19.80%	19.80%	Others
	000.00		0.35	1.67	68
Tangsha
n Branch
Construc
tion	1,353,00	244,523,	273,668,	479,744,	38,447,6
work of						94.24%	94.24%	Others
	0,000.00	934.15	529.01	805.01	58.15
Hubei
C&S
Construc
tion	60,035,1	24,342,2	17,567,5	36,638,2	5,271,60
work of						85.59%	85.59%	Others
	57.05	85.15	38.80	20.09	3.86
Yunfu
C&S
Construc
tion	695,600,		530,582.		530,582.
work of						0.08%	0.08%	Others
	000.00		07		07
Jiangsu
C&S
	2,462,04	275,904,	332,101,	552,471,	55,534,5
Total						--	--	--
	8,769.51	617.95	477.27	566.53	28.69

(3) Construction-in-progress provision set aside in the current period

There was no situation where the recoverable amount of the construction work in progress is lower than the book value which required provisions in the Company in the reporting period.

(4) Construction materials: None

23. Productive biological assets

(1) Productive biological assets measured at cost

□ Applicable √ Not applicable

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(2) Productive biological assets measured at fair value

□ Applicable √ Not applicable

24. Oil & gas assets

□ Applicable √ Not applicable

25. Right-of-use assets

Unit: RMB

Item	Housing	Total
I. Original Book Value		-
1. Balance at the beginning of the period	10,611,654.31	10,611,654.31
2. Increase in the current period	2,720,964.20	2,720,964.20
3. Decrease in the current period		-
4. Balance at the end of the period	13,332,618.51	13,332,618.51
II. Accumulated Depreciation		-
1. Balance at the beginning of the period		-
2. Increase in the current period	2,181,245.94	2,181,245.94
(1) Provision	2,181,245.94	2,181,245.94
3. Decrease in the current period		-
(1) Disposal		-
4. Balance at the end of the period	2,181,245.94	2,181,245.94
IV. Book Value		-
1. Book value at the end of the period	11,151,372.57	11,151,372.57
2. Book value at the beginning of the
	10,611,654.31	10,611,654.31
period

Other description: None

26. Intangible assets

(1) Intangible assets

Unit: RMB

			Non-patented	Application
Item	Land use right	Patent right			Trademark right	Total
			technology	software

I. Original Book

Value

1. Balance at
the beginning of	189,064,322.15	1,342,721.84		18,819,434.67	168,370.83	209,394,849.49
the period
2. Increase
		208,301.89		2,961,517.07		3,169,818.96
in the current

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C&S Paper Co., Ltd. Semi-annual Report 2021

period
(1)
		208,301.89	2,961,517.07		3,169,818.96
Purchase

(2)

Internal R&D

(3)
Increase in
business
combination

3. Decrease in

the current period

(1)

Disposal


4. Balance at
the end of the	189,064,322.15	1,551,023.73	21,780,951.74	168,370.83	212,564,668.45
period
II. Accumulated

Amortization

1. Balance at
the beginning of	29,450,960.14	885,237.05	9,534,509.23	168,370.83	40,039,077.25
the period
2. Increase
in the current	1,898,651.76	52,125.56	1,375,371.84		3,326,149.16
period
(1)
	1,898,651.76	52,125.56	1,375,371.84		3,326,149.16
Provision


3. Decrease
in the current
period
(1)

Disposal


4. Balance at
the end of the	31,349,611.90	937,362.61	10,909,881.07	168,370.83	43,365,226.41
period
III. Impairment

Provision

1. Balance at
the beginning of
the period
2. Increase
in the current
period
(1)

Provision

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3. Decrease
in the current
period
(1) Disposal

4. Balance at
the end of the
period
IV. Book Value
1. Book
value at the end	157,714,710.25	613,661.12	10,871,070.67	169,199,442.04
of the period
2. Book
value at the	159,613,362.01	457,484.79	9,284,925.44	169,355,772.24
beginning of the
period

The intangible assets generated other than internal R&D of the Company at the end of the period occupy 0.00% of

the balance of intangible assets.

(2) Information on the land use rights that the certificate of title has not been issued: None

27. Development expenses: None

28. Goodwill

(1) Original book value of goodwill

Unit: RMB

		Increase in the current period	Decrease in the current period
Name of investee	Balance at the
		Formed by		Balance at the
or the matters	beginning of the
forming goodwill	period	business	Disposal	end of the period
		combination
Merger of
Zhongshan Paper
involving	64,654.15			64,654.15
enterprises not
under common
control
Total	64,654.15			64,654.15

(2) Provision for impairment of goodwill

Relevant information on the asset group or asset group portfolio in which the goodwill is located

Explain the method to confirm the process of goodwill impairment test, key parameters (e.g. the growth rate in the predictive period when predicting the present value of future cash flow, the growth rate in the stable period, profit

167

C&S Paper Co., Ltd. Semi-annual Report 2021

rate, discount rate, and predictive period), and the goodwill impairment loss:

After conducting the asset impairment test by combining the goodwill with corresponding asset groups, there was no impairment as at June 30, 2021, and provisions at the end of the reporting period were not set aside.

Influence of the goodwill impairment test

Other description: None

29. Long-term unamortized expenses

Unit: RMB

	Balance at the
		Increase in the	Amortized amount		Balance at the end of
Item	beginning of the			Other decreases
		current period	of the current period		the period
	period

Use rights of sewage
	2,308,598.93		692,579.70		1,616,019.23
discharge

Decoration fees of
	22,365,634.21	996,330.31	4,847,261.22		18,514,703.30
office buildings

Electricity use rights	1,961,750.00	855,750.00	252,700.00		2,564,800.00
Total	26,635,983.14	1,852,080.31	5,792,540.92		22,695,522.53

Other description: None

30. Deferred income tax assets/deferred income tax liabilities

(1) Deferred income tax assets that were not offset

Unit: RMB

	Balance at the end of the period	Balance at the end of the period	Balance at the beginning of the period	Balance at the beginning of the period
Item	Deductible temporary	Deferred income tax	Deductible temporary	Deferred income tax
	differences	assets	differences	assets
Provision for asset
	37,974,366.81	8,317,385.82	37,236,661.77	8,048,641.53
impairment

Unrealized profit in
	57,005,616.36	11,349,710.74	59,038,241.84	11,427,908.55
internal transaction

Deductible loss	189,732,725.24	47,433,181.31	157,221,067.56	39,305,266.89
Accrued expenses	60,267,582.48	15,066,895.62	60,267,582.48	15,066,895.62
Provision for impairment
	13,679,913.49	2,339,937.78	16,469,055.74	2,795,038.08
of fixed assets

Provision for impairment
	4,033,933.51	723,165.58	3,853,423.72	702,165.91
of inventories

Equity incentive cost	212,634,286.41	51,669,774.75	136,647,479.87	33,312,991.30
Deferred income	33,105,520.64	8,276,380.16	2,833,819.12	708,454.78
Total	608,433,944.94	145,176,431.76	473,567,332.10	111,367,362.66

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(2) Deferred income tax liabilities that were not offset

Unit: RMB

	Balance at the end of the period	Balance at the end of the period	Balance at the beginning of the period	Balance at the beginning of the period
Item	Taxable temporary	Deferred income tax	Taxable temporary	Deferred income tax
	differences	liabilities	differences	liabilities
Pre-tax deduction of
fixed assets at one time	242,603,626.84	47,103,893.91	190,069,258.27	35,903,653.30
as stipulated in the tax
law
Total	242,603,626.84	47,103,893.91	190,069,258.27	35,903,653.30

(3) Presentation of deferred income tax assets or liabilities by the net amount after offset

Unit: RMB

	Offset amount of the	Balance of the deferred	Offset amount of the	Balance of the deferred
	deferred income tax	income tax assets or	deferred income tax	income tax assets or
Item	assets and liabilities at	liabilities after offset at	assets and liabilities at	liabilities after offset at
	the end of the reporting	the end of the reporting	the beginning of the	the beginning of the
	period	period	reporting period	reporting period
Deferred income tax		145,176,431.76		111,367,362.66

assets

Deferred income tax		47,103,893.91		35,903,653.30

liabilities

(4) Breakdown of unconfirmed deferred income tax assets

Unit: RMB

Item	Balance at the end of the period	Balance at the beginning of the period
Deductible temporary differences	671,548.30	2,710,860.27
Total	671,548.30	2,710,860.27

(5) Deductible losses of the unconfirmed deferred income tax assets due in the next year: None

31. Other non-current assets

Unit: RMB

	Balance at the end of the period	Balance at the end of the period	Balance at the end of the period	Balance at the beginning of the period	Balance at the beginning of the period	Balance at the beginning of the period
Item		Impairment			Impairment
	Book balance		Book value	Book balance		Book value
		provision			provision

Prepayment for software	1,192,660.18		1,192,660.18	2,027,042.24		2,027,042.24
	43,741,845.6		43,741,845.6	26,000,909.9		26,000,909.9
Prepayment for engineering equipment
	6		6	1		1

	44,934,505.8		44,934,505.8 4	28,027,952.1		28,027,952.1 5
Total
	4			5

Other description: None

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C&S Paper Co., Ltd. Semi-annual Report 2021

32. Short-term borrowings

(1) Classification of short-term borrowings

Unit: RMB

Item	Balance at the end of the period	Balance at the beginning of the period
Guaranteed borrowings		142,942,941.34
Total		142,942,941.34

Description of classification of short-term borrowings: None

(2) Short-term borrowings overdue but unpaid

Other description: There were no short-term borrowings overdue but unpaid in the Company at the end of the reporting period.

33. Tradable financial liabilities: None

34. Derivative financial liabilities: None

35. Notes payable

Unit: RMB

Category	Balance at the end of the period	Balance at the beginning of the period
Banker’s acceptance	289,707,176.43	234,887,563.22
Total	289,707,176.43	234,887,563.22

The total amount of the notes payable due but unpaid at the end of the reporting period is RMB0.00.

36. Accounts payable

(1) List of accounts payable

Unit: RMB

Item	Balance at the end of the period	Balance at the beginning of the period
Accounts payable	723,033,087.39	761,519,389.26
Total	723,033,087.39	761,519,389.26

(2) Significant accounts payable with aging over one year

Other description: The Company has no significant accounts payable with aging over one year at the end of the reporting period.

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C&S Paper Co., Ltd. Semi-annual Report 2021

37. Payments received in advance

(1) List of payments received in advance: None

(2) Significant payments received in advance with aging over one year

The Company has no significant payments received in advance with aging over one year at the end of the reporting period.

38. Contract liabilities

Unit: RMB

Item	Balance at the end of the period	Balance at the beginning of the period
Advances on sales	103,501,369.49	137,333,617.40
Total	103,501,369.49	137,333,617.40

Amount with significant changes in book value during the reporting period and reason: None

39. Employee remuneration payable

(1) List of employee remuneration payable

Unit: RMB

	Balance at the beginning	Increase in the current	Decrease in the current	Balance at the end of the
Item
	of the period	period	period	period

I. Short-term
	123,506,119.43	397,444,239.77	409,820,099.96	111,130,259.24
Compensation

II. Post-employment
Benefits - Defined	18,507.68	25,494,529.67	25,142,907.14	370,130.21
Contribution Plan
III. Dismissal Benefits		156,259.98	156,259.98
Total	123,524,627.11	423,095,029.42	435,119,267.08	111,500,389.45

(2) List of short-term remuneration

Unit: RMB

	Balance at the beginning	Increase in the current	Decrease in the current	Balance at the end of the
Item
	of the period	period	period	period

1. Salary, bonus and
	122,595,782.24	361,113,483.15	375,743,596.02	107,965,669.37
subsidy

2. Employee welfare		13,078,772.04	11,949,297.53	1,129,474.51
3. Social insurance
	252,766.51	12,926,746.92	12,344,203.08	835,310.35
premiums

Including: Medical	250,105.53	10,975,075.83	10,409,117.65	816,063.71

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C&S Paper Co., Ltd. Semi-annual Report 2021

insurance
Employment
	167.06	1,142,952.97	1,125,343.83	17,776.20
injury insurance

Maternity
	2,493.92	808,718.12	809,741.60	1,470.44
insurance

4. Housing provident
	374,311.00	8,527,072.24	8,542,073.24	359,310.00
fund

5. Labor union fee and
	283,259.68	1,798,165.42	1,240,930.09	840,495.01
staff education fee

Total	123,506,119.43	397,444,239.77	409,820,099.96	111,130,259.24

(3) List of defined contribution plans

Unit: RMB

	Balance at the beginning	Increase in the current	Decrease in the current	Balance at the end of the
Item
	of the period	period	period	period

1. Basic endowment
	17,927.54	24,671,585.74	24,331,167.43	358,345.85
insurance

2. Unemployment
	580.14	822,943.93	811,739.71	11,784.36
insurance

Total	18,507.68	25,494,529.67	25,142,907.14	370,130.21

Other description: There was no delinquency of employee remuneration payable in the Company at the end of the reporting period.

40. Tax and fees payable

Unit: RMB

Item	Balance at the end of the period	Balance at the beginning of the period
Value-added tax	29,179,356.47	25,574,167.63
Corporate income tax	36,669,532.30	79,266,423.94
Individual income tax	2,196,145.64	1,840,329.83
City construction and maintenance tax	1,837,733.39	1,593,768.94
Property tax	3,958,770.37	1,087,129.90
Education surcharges	877,842.66	829,794.94
Local education surcharges	585,228.48	524,068.91
Land use tax	821,151.63	796,430.89
Stamp tax	692,502.21	596,629.80
Security fund for the disabled	680,567.93	334,989.76
Environmental protection tax	132,841.63	97,465.13
Resource tax	66,031.66	66,855.20
Total	77,697,704.37	112,608,054.87

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C&S Paper Co., Ltd. Semi-annual Report 2021

Other description: None

41. Other payables

Unit: RMB

Item	Balance at the end of the period	Balance at the beginning of the period
Dividend payable	1,594,446.41	1,437,466.77
Other payables	794,796,554.04	753,407,113.32
Total	796,391,000.45	754,844,580.09

(1) Interest payable: None

(2) Dividends payable

Unit: RMB

Item	Balance at the end of the period	Balance at the beginning of the period
Dividends for restricted shares	1,594,446.41	1,437,466.77
Total	1,594,446.41	1,437,466.77

Other descriptions, including important dividends payable exceeding one year, and the reasons for non-payment

that should be disclosed: None

(3) Other payables

1) Other payables based on amount nature

Unit: RMB

Item	Balance at the end of the period	Balance at the beginning of the period
Margins and deposits	22,073,998.74	20,964,424.40
Unpaid fees	731,510,591.33	658,391,225.24
Others	2,144,169.58	2,373,791.75
Repurchase obligation of restricted shares	39,067,794.39	68,800,189.53
Authorized collection and payment of
individual income tax under the equity		2,877,482.40
incentive
Total	794,796,554.04	753,407,113.32

2) Other important payables with aging exceeding one year

Unit: RMB

Item	Balance at the end of the period	Reason for unsettlement or not carry-over
1st	6,323,465.21	Not yet settled

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C&S Paper Co., Ltd. Semi-annual Report 2021

Total 6,323,465.21 --

Other description: None

42. Liabilities held for sale: None

43. Non-current liabilities due within one year

Unit: RMB

Item	Balance at the end of the period	Balance at the beginning of the period
Lease liabilities due within one year	6,038,594.62	3,472,854.73
Total	6,038,594.62	3,472,854.73

Other description: None

44. Other current liabilities

Unit: RMB

Item	Balance at the end of the period	Balance at the beginning of the period
Tax pending changeover	13,400,882.00	17,628,086.63
Total	13,400,882.00	17,628,086.63

Changes in short-term bonds payable: None

45. Long-term borrowings

(1) List of long-term borrowings

Description of classification of long-term borrowings: None

Other descriptions, including the interval of interest rate: None

46. Bonds payable

(1) Bonds payable: None

(2) Changes in the increase and decrease of the bonds payable (excluding other financial instruments such as preference shares and perpetual bonds that are divided into financial liabilities): None

(3) Descriptions of the conditions for converting conditions and time of converting bonds: None

(4) Descriptions of other financial instruments that are divided into financial liabilities: None

Basic information on other financial instruments in issue at the end of the reporting period, such as the preference shares and perpetual bonds: None

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C&S Paper Co., Ltd. Semi-annual Report 2021

Table of changes in other financial instruments in issue at the end of the reporting period, such as the preference shares and perpetual bonds: None

47. Lease liabilities

	Unit: RMB Balance at the end of the period Balance at the beginning of the period 5,526,106.56 7,138,799.58 5,526,106.56 7,138,799.58	Unit: RMB Balance at the end of the period Balance at the beginning of the period 5,526,106.56 7,138,799.58 5,526,106.56 7,138,799.58
Item	Balance at the end of the period	Balance at the beginning of the period
Housing rent	5,526,106.56	7,138,799.58
Total	5,526,106.56	7,138,799.58

Other description: None

48. Long-term payables: None

(1) Long-term payables listed based on amount nature: None

(2) Special payables: None

49. Long-term employee remuneration payable

(1) Table of long-term employee remuneration payable: None

(2) Changes of the defined benefit plan

Description of content and associated risk of defined benefit plan and the impact on the Company’s future cash

flow, time and uncertainty: None

Description of major actuarial assumptions and sensitivity analysis results of defined benefit plan: None

Other description: None

50. Projected liabilities: None

51. Deferred income

Unit: RMB

	Balance at the
		Increase in the	Decrease in the	Balance at the end of
Item	beginning of the				Reason
		current period	current period	the period
	period

					Government grants
Government grants	115,101,158.13	4,000,000.00	7,008,167.50	112,092,990.63
					related to assets

Total	115,101,158.13	4,000,000.00	7,008,167.50	112,092,990.63	--

Projects involving government grants:

175

C&S Paper Co., Ltd. Semi-annual Report 2021

Unit: RMB

			Amount
		Increased	included in	Amount	Amount of
Liability item	Balance at the beginning f th id	amount of grants in the	non- operating i i h	included in other income i h	offset costs in	Other	Balance at the end of the id	Related to
					the current	changes		asset/income
	o e pero	current period	ncome n te current	n te current period	period		pero
			period
Support
funds for
sewage								Related to
centralized	972,000.00			60,750.00			911,250.00
								asset
water
treatment
project
Ex-post funds
awarded to
the first batch
of the union	4,081,579.34			317,293.32			3,764,286.02	Related to
enterprises								asset
for technical
transformatio
n in 2017
Support
funds for the
technical
transformatio	3,640,736.00			403,311.72			3,237,424.28	Related to
n of								asset
equipment
production
line
Support
funds for								Related to
enterprise	3,219,688.10			396,187.14			2,823,500.96
								asset
technical
upgrading
Subsidies for
the
infrastructure	30,535,934.0						30,000,215.8	Related to
construction				535,718.16
	0						4	asset
of new
factory in
Hubei
Provincial
funds for
traditional	910,714.30			53,571.42			857,142.88	Related to
industry								asset
transformatio
n projects
Subsidies for
the expansion
of the high-
grade
household	1,906,666.83			79,999.98			1,826,666.85	Related to
paper project								asset
with an
annual output
of 25,000
tons
Discount
								Related to
interest funds	2,439,593.75			96,937.50			2,342,656.25
								asset
for imported

176

C&S Paper Co., Ltd. Semi-annual Report 2021

equipment
Financial
support funds
for
construction					Related to
expansion of	7,453,253.75		312,723.90	7,140,529.85
					asset
25,000-ton
high-grade
household
paper project
Subsidies for
construction					Related to
of the water	1,369,861.36		77,539.32	1,292,322.04
					asset
treatment
project
Subsidies for
sewage	2,664,772.67		238,636.38	2,426,136.29	Related to
treatment					asset
station
Special funds
for capacity
expansion of					Related to
25,000-ton	1,820,833.22		287,500.02	1,533,333.20
					asset
high-grade
household
paper project
Support
funds for the
construction					Related to
of	3,032,539.79		159,523.80	2,873,015.99
					asset
environmenta
l protection
facilities
Support
funds for					Related to
equipment of	9,467,571.00		985,624.08	8,481,946.92
					asset
Phase II
project
Support
funds for the	16,172,657.6			15,046,946.4	Related to
transformatio			1,125,711.24
	5			1	asset
n of Phase I
project
Support
funds for the
construction	21,188,970.5			20,408,088.2	Related to
of Automated			780,882.36
	8			2	asset
Storage &
Retrieval
System
Funds for
reconstructio
n project of	1,389,966.67		510,600.00	879,366.67	Related to
automatic					asset
production
lines
Subsidy
funds for the	2,833,819.12	4,000,000.00	585,657.16	6,248,161.96	Related to
smart factory					asset
project
	115,101,158.			112,092,990.
Total		4,000,000.00	7,008,167.50
	13			63

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52. Other non-current liabilities: None

53. Share capital

Unit: RMB

		Increase and decrease of this	Increase and decrease of this	Increase and decrease of this	change (+ and -)	change (+ and -)
	Balance at the bii f th	Issuance of		Shares			Balance at the d f th
	egnnng o e period	additional	Bonus shares	transferred from surplus	Others	Subtotal	en o e period
		shares		reserve

Total number	1,311,487,077.00						1,311,043,971. 00
		1,578,199.00			-2,021,305.00	-443,106.00
of shares

Other description: For details about changes in the Company’s share capital in the reporting period, please refer to

“1. Development history of the Company in III. Basic Information of the Company of Section X” for details.

54. Other equity instruments

(1) Basic information on other financial instruments in issue at the end of the reporting period, such as the preference shares and perpetual bonds: None

(2) Table of changes in other financial instruments in issue at the end of the reporting period, such as the preference shares and perpetual bonds

Description of increase/decrease of other equity instruments in the reporting period, reasons of change, and accounting basis: None

Other description: None

55. Capital reserve

Unit: RMB

	Balance at the beginning	Increase in the current	Decrease in the current	Balance at the end of the
Item
	of the period	period	period	period

Capital premium (share
	626,797,181.97	15,730,354.61	6,730,945.65	635,796,590.93
premium)

Other capital reserve	280,209,323.08	28,643,935.91	3,024,288.84	305,828,970.15
Total	907,006,505.05	44,374,290.52	9,755,234.49	941,625,561.08

Other descriptions, including increase/decrease in the reporting period and reasons of change:

(1) The exercise of stock options awarded in the first grant and the exercise of reserved stock options as per the

2018 Stock Option and Restricted Stock Incentive Plan increased “capital reserve-share premium” by

RMB15,730,354.61 and decreased “capital reserve-other capital reserve” by RMB3,024,288.84. The repurchase and deregistration of incentive stocks decreased “capital reserve-other capital reserve” by RMB6,730,945.65.

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(2) The Company set aside provision for equity incentive costs and fees in the reporting period and RMB12,167,835.66 was included in “capital reserve - other capital reserve”. Difference between the deductible amount before tax under the 2018 Stock Option and Restricted Stock Incentive Plan and recognized book expense was confirmed as deferred income tax asset and RMB16,476,100.25 was included in “capital reserve - other capital reserve”.

56. Treasury shares

Unit: RMB

	Balance at the beginning	Increase in the current	Decrease in the current	Balance at the end of the
Item
	of the period	period	period	period

Restricted shares	68,800,189.53	1,352,409.36	31,084,804.50	39,067,794.39
Ordinary shares	27,680,721.76	532,605,631.91		560,286,353.67
Total	96,480,911.29	533,958,041.27	31,084,804.50	599,354,148.06

Other descriptions, including increase/decrease in the reporting period and reasons of change:

Notes: (1) The second unlock period unlocked 4,809,045 shares of first-grant stock options at RMB4.33/share granted under the 2018 Stock Option and Restricted Stock Incentive Plan . Totally RMB20,823,164.85 was included in the decrease of the current period. As some incentive recipients for stocks awarded in the first grant left the Company or failed to pass the appraisal, the Company repurchased and deregistered 2,021,305 shares with RMB4.33 per share and a total amount of RMB8,752,250.65, which was included in the decrease of the current period. Cash dividends waiting to be issued to holders of restricted shares can be withdrawn. For holders of restricted shares that are expected to be unlocked in the future, RMB1,509,389.00 was included in the decrease of the current period.

(2) A cash dividend of RMB400,218.39 was withdrawn for shares originally held by repurchase and deregistration recipients and therefore included in the increase of the current period; a cash dividend of RMB952,190.97 for shares unlocked in the second unlock period was included in the increase of the current period.

(3) The Company has carried out share repurchase with a special securities repurchase account via centralized bidding, with a total transaction amount of RMB532,605,631.91.

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57. Other comprehensive income: None

58. Special reserves: None

59. Surplus reserve

Unit: RMB

	Balance at the beginning	Increase in the current	Decrease in the current	Balance at the end of the
Item
	of the period	period	period	period

Statutory surplus reserve	61,469,258.27			61,469,258.27
Total	61,469,258.27			61,469,258.27

Explanation of surplus reserves, including increase/decrease in the reporting period and reasons of change: None

60. Retained earnings

Unit: RMB

Item	Current period	Last period
Retained earnings before adjustment at the end of
	2,858,664,147.39	2,058,968,835.80
the last period

Retained earnings at the beginning of the period	2,858,664,147.39
		2,058,968,835.80
after adjustment

Plus: Net profit attributable to owners of the
	407,161,317.15	452,699,484.61
parent company of the current period

Dividends on ordinary shares payable	128,751,529.41	97,945,986.16
Retained earnings at the end of the period	3,137,073,935.13	2,413,722,334.25

Details on adjusting retained earnings at the beginning of the period:

(1) As a result of retrospective adjustments according to the Accounting Standards for Business Enterprises and its related new provisions, the impact on retained earnings at the beginning of the period was RMB0.00.

(2) Due to the changes in accounting policies, the impact on retained earnings at the beginning of the period was RMB0.00.

(3) Due to the correction of material accounting errors, the impact on retained earnings at the beginning of the period was RMB0.00.

(4) Due to the changes in the scope of combination caused by the same control, the impact on retained earnings at the beginning of the period was RMB0.00.

(5) Other adjustments affected retained earnings at the beginning of the period by a total of RMB0.00.

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61. Operating income and operating cost

Unit: RMB

	Incurred in the current period	Incurred in the current period	Incurred in the prior period	Incurred in the prior period
Item
	Income	Cost	Income	Cost

Principal business	4,123,177,610.49	2,462,562,811.28	3,600,704,841.94	1,918,216,266.98
Other businesses	124,464,225.89	99,681,354.93	15,496,557.86	13,190,651.18
Total	4,247,641,836.38	2,562,244,166.21	3,616,201,399.80	1,931,406,918.16

Information related to income:

Unit: RMB

Contract classification	Branch 1	Total
By product type	4,247,641,836.38	4,247,641,836.38
Including:
Household paper	4,082,881,792.19	4,082,881,792.19
Personal care	40,295,818.30	40,295,818.30
Others	124,464,225.89	124,464,225.89
By operating region	4,247,641,836.38	4,247,641,836.38
Including:
Domestic	4,149,892,689.00	4,149,892,689.00
Abroad	97,749,147.38	97,749,147.38
Including:
Including:
Including:
Including:
Including:
Total	4,247,641,836.38	4,247,641,836.38

Information related to performance obligation: None

Information related to the transaction price apportioned to the remaining performance obligation:

The amount of income corresponding to the obligations of contract performance with an executed contract that is

not performed or fully performed at the end of the reporting period is RMB10,852,118.31, of which the income of RMB10,852,118.31 is expected to be confirmed as income in the year of 2021.

Other description: None

62. Tax and surcharges

Unit: RMB

Item	Incurred in the current period	Incurred in the prior period
City construction and maintenance tax	10,406,083.91	9,361,201.41

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Education surcharges	4,922,998.46	4,706,053.57
Resource tax	55,344.16
Property tax	5,361,355.73	4,767,707.05
Land use tax	1,364,954.29	1,746,360.26
Vehicle and vessel tax	9,030.00	12,360.00
Stamp tax	3,544,054.89	3,007,283.02
Local education surcharges	3,281,999.30	3,137,369.06
Environmental protection tax	305,183.69	181,672.99
Total	29,251,004.43	26,920,007.36

Other description: None

63. Selling expenses

Unit: RMB

Item	Incurred in the current period	Incurred in the prior period
Employee remuneration	188,440,219.32	134,986,732.37
Advertising expenses	136,856,089.50	74,270,803.62
Product promotion fees	486,488,574.50	411,196,541.39
Shopping mall management fees	42,603,638.54	48,753,624.04
Transportation expenses	44,766,089.36	165,690,045.64
Traveling expenses	9,543,610.64	4,940,998.20
Business entertainment expenses	899,984.09	436,080.12
Rental fees	4,279,089.03	3,183,544.55
Others	1,601,356.74	4,612,712.67
Total	915,478,651.72	848,071,082.60

Other description: None

64. Administrative expenses

Unit: RMB

Item	Incurred in the current period	Incurred in the prior period
Employee remuneration	74,061,162.35	70,379,157.38
Equity incentive cost	12,167,835.66	52,983,211.08
Depreciation and amortization fees	34,639,880.19	31,544,768.00
Office allowance	12,660,998.77	10,475,476.21
Consulting service fees	8,688,604.92	4,773,171.55
Outsourcing warehouse management fees	8,791,106.82	5,349,303.92
Business entertainment expenses	2,582,730.40	1,580,927.02
Traveling expenses	950,329.72	393,381.65
Environmental protection fees	1,244,274.84	1,251,298.69
Rental fees	3,679,190.64	1,475,930.22

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C&S Paper Co., Ltd. Semi-annual Report 2021

Others	5,733,964.07	5,495,228.29
Total	165,200,078.38	185,701,854.01

Other description: None

65. R&D expenses

Unit: RMB

Item	Incurred in the current period	Incurred in the prior period
Employee remuneration	18,956,073.80	17,174,899.12
Direct investment	62,873,043.34	59,534,214.24
Depreciation and amortization fees	13,685,779.13	12,202,630.08
Others	1,899,916.05	1,949,084.80
Total	97,414,812.32	90,860,828.24

Other description: None

66. Finance expenses

Unit: RMB

Item	Incurred in the current period	Incurred in the prior period
Interest fees	975,546.01	1,140,788.29
Less: Interest income	6,623,270.61	4,060,998.02
Exchange profit and loss	1,346,250.22	-993,705.23
Plus: Transaction fee	2,498,330.34	2,891,912.73
Total	-1,803,144.04	-1,022,002.23

Other description: None

67. Other income

Unit: RMB

Sources of other income	Incurred in the current period	Incurred in the prior period
Refund of individual income tax	1,137,762.21	696,845.15
Support funds for the transformation of
	1,125,711.24	224,780.22
Phase I project

Subsidies for R&D, famous-brand and
high-quality products, and	1,020,000.00
income/efficiency increase
Support funds for equipment of Phase II
	985,624.08	985,624.08
project

Support funds for the construction of
	780,882.36	192,647.06
Automated Storage & Retrieval System

Support funds for technical upgrading
	700,000.00
project 2020

Subsidy funds for the smart factory project	585,657.16

183

C&S Paper Co., Ltd. Semi-annual Report 2021

Subsidies for the infrastructure
	535,718.16	535,718.16
construction of new factory in Hubei

Funds for reconstruction project of
	510,600.00
automatic production lines

Subsidies for internship, employment, job
	489,780.86
stabilization and training

VAT exemption for employment of retired
	411,700.00	438,350.00
soldiers and poor population

Support funds for the technical
transformation of equipment production	403,311.72	403,311.72
line
Provincial support funds for enterprise
	396,187.14	264,124.76
technical upgrading

Ex-post funds awarded to the first batch of
the union enterprises for the technical	317,293.32	317,293.32
transformation in 2017
Financial support funds for construction
expansion of 25,000-ton high-grade	312,723.90	312,723.90
household paper project
Special funds for capacity expansion of
25,000-ton high-grade household paper	287,500.02	287,500.02
project
Technical demonstration fee for water
	280,000.00
intake points

Subsidies for sewage treatment station	238,636.38	238,636.38
Special award funds for the restructuring
	210,900.00
of industrial enterprises

Support funds for the construction of
	159,523.80	159,523.80
environmental protection facilities

Tax contribution reward	100,000.00
Subsidies for job creation for the poor	97,995.00
Discount interest funds for imported
	96,937.50	96,937.50
equipment

Subsidies for the expansion of the high-
grade household paper project with an	79,999.98	79,999.98
annual output of 25,000 tons
Subsidies for construction of the water
	77,539.32	77,539.32
treatment project

Rewards for creation of odor-free
	62,752.29
enterprise

Support funds for sewage centralized water
	60,750.00	60,750.00
treatment project

Provincial funds for traditional industry
	53,571.42	35,714.28
transformation projects

Financial rewards for cleaner production
	50,000.00
transformation

Rewards for demonstration enterprise of
informatization and industrialization	50,000.00
integration

184

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Subsidies for employment and
	31,604.66
entrepreneurship

Subsidies for encouraging scaled
	20,000.00
development of enterprises

Subsidies for new exports of exporting
	700.00
enterprises

Awards for breakthroughs with increases in
		300,000.00
business revenues

Subsidies for photovoltaic power rooftop		224,640.00
Financial support funds for industry
		7,892,985.55
collaboration

Support policy rewards of 2018 from the
Bureau of Economy and Information		1,310,000.00
Technology Pengzhou City
Energy efficiency special fund 2019 of the
Science, Industry and Commerce Bureau		20,000.00
(cleaner production enterprise)
Management system certification rewards
2018 of Pengzhou Administration for		10,000.00
Market Regulation
Subsidies for pandemic prevention system
construction of enterprises by Bureau of		9,000.00
Economy and Information Technology
Pengzhou City
Total	11,671,362.52	15,174,645.20

68. Return on investment

Unit: RMB

Item	Incurred in the current period	Incurred in the prior period
Others	358,473.15	2,287,274.87
Total	358,473.15	2,287,274.87

Other description: “Others” refer to returns on principal-protected wealth management products at maturity and

reverse repo of treasury bonds of the Company.

69. Profit of net exposure hedging: None

70. Income from changes in fair value: None

71. Credit impairment loss

Unit: RMB

Item	Incurred in the current period	Incurred in the prior period
Bad debt loss from other receivables	-464,824.58	-1,502,718.88
Bad debt loss from accounts receivable	1,766,431.51	79,019.13

185

C&S Paper Co., Ltd. Semi-annual Report 2021

Total 1,301,606.93 -1,423,699.75

Other description: None

72. Asset impairment loss

Unit: RMB

Item	Incurred in the current period	Incurred in the prior period
II. Impairment Loss of Inventories and
	-468,530.30	-850,381.40
Contract Performance Cost

V. Impairment Loss of Fixed Assets	-2,285,297.81
Total	-2,753,828.11	-850,381.40

Other description: None

73. Return on disposal of assets

Unit: RMB

Source	Incurred in the current period	Incurred in the prior period
Disposal of fixed assets	-259,896.46	-896,870.05
Total	-259,896.46	-896,870.05

74. Non-operating income

Unit: RMB

			Amount recognized as profit or
Item	Incurred in the current period	Incurred in the prior period
			loss of the current period

Government grants	23,000.00	1,997,067.57	23,000.00
Income from fine and
	907,005.44	640,155.42	907,005.44
compensation

Profit from damage and
	98,166.07	1,758.21	98,166.07
retirement of non-current assets

Including: Fixed assets	98,166.07	1,758.21	98,166.07
Others	680,195.03	530,259.96	680,195.03
Total	1,708,366.54	3,169,241.16	1,708,366.54

Government grants recognized as profit and loss of the current period:

Unit: RMB

				Whether the t fftd
						Amount	Amount
Grants	Issuer	Reason	Nature and	gran aece the profit and l f th	Whether a	incurred in	incurred in	Related to
			type		special grant	the current	the last	asset/income
				oss o e year		period	period

Rewards for	People’s		Grants
advanced	Government		received for					Related to
party	of	Grant	the	No	No	2,000.00
								income
organizations	Shuangshui		performance

and	Town, Xinhui		of the State’s

186

C&S Paper Co., Ltd. Semi-annual Report 2021

individuals	District,		function of
2020	Jiangmen		ensuring the
	City		supply or
			price control
			of a public
			utility or
			socially
			necessary
			product
			Grants
			received for
			the
			performance
Subsidies for	Human		of the State’s
enterprises’	Resources		function of
employee	and Social	Grant	ensuring the	No	No	21,000.00		Related to
training for	Security		supply or					income
job	Bureau of		price control
adaptation	Yunfu City		of a public
			utility or
			socially
			necessary
			product
			Grants
			received for
			the
			performance
	Labor and		of the State’s
Subsidies for	Employment		function of
job	Administratio	Grant	ensuring the	No	No		291,200.00	Related to
	n of Xiaonan		supply or					income
stabilization	District,		price control
	Xiaogan City		of a public
			utility or
			socially
			necessary
			product
			Grants
			received for
			the
			performance
	Labor and		of the State’s
Subsidies for	Employment		function of
job	Administratio	Grant	ensuring the	No	No		27,200.00	Related to
	n of Xiaonan		supply or					income
stabilization	District,		price control
	Xiaogan City		of a public
			utility or
			socially
			necessary
			product
			Grants
	Labor and Emloment
Social			received for
security	py Administratio	Grant	the	No	No		37,332.00	Related to
subsidies for			performance					income
enterprises	n of Xiaonan		of the State’s
	District,
			function of

187

C&S Paper Co., Ltd. Semi-annual Report 2021

	Xiaogan City		ensuring the
			supply or
			price control
			of a public
			utility or
			socially
			necessary
			product
			Grants
			received as a
	Central		result of
Special			compliance
	Treasury Pament
award funds			with local
for the	y Center of	Reward	government	No	No	410,000.00	Related to
restructuring			policies such				income
of industrial	Xiaogan City, Xiaonan		as investment
enterprises			attraction and
	District
			other local
			support
			policies
			Grants
			received for
			the
			performance
	Labor and		of the State’s
Subsidies for	Employment		function of
job	Administratio	Grant	ensuring the	No	No	29,142.57	Related to
	n of		supply or				income
stabilization	Pengzhou		price control
	City		of a public
			utility or
			socially
			necessary
			product
			Grants
			received for
			the
Job			performance ’
stabilization subsid from	Hangzhou Municial		of the States
			function of
y the	p Employment	Grant	ensuring the	No	No	887.00	Related to
			supply or				income
Unemployme nt Insurance	Service Center		price control
			of a public
Fund			utility or
			socially
			necessary
			product
			Grants
Job			received for
stabilization	Employment		the
subsidy from	Management		performance				Related to
the	Service	Grant	of the State’s	No	No	389,857.30
							income
Unemployme	Office of		function of
nt Insurance	Pinghu City		ensuring the
Fund			supply or
			price control

188

C&S Paper Co., Ltd. Semi-annual Report 2021

			of a public
			utility or
			socially
			necessary
			product
			Grants
			received for
			the
			performance
	Social		of the State’s
Subsidies for	Insurance		function of
job	Fund	Grant	ensuring the	No	No	245,515.30	Related to
	Administratio		supply or				income
stabilization	n of Chengdu		price control
	City		of a public
			utility or
			socially
			necessary
			product
			Grants
			received for
			the
			performance
	Human		of the State’s
One-off	Resources		function of
employment	and Social	Grant	ensuring the	No	No	238,317.87	Related to
	Security		supply or				income
subsidy	Bureau of		price control
	Luoding City		of a public
			utility or
			socially
			necessary
			product
Sbidi f			Grants
			received for
			the
			performance
	Social		of the State’s function of
uses or job stabilization	Insurance Bureau of Ytin	Grant	ensuring the	No	No	87,935.77	Related to
			supply or				income
	ua County		price control of a public
			utility or
			socially
			necessary
			product
			Grants
Job			received for
	Human		the
stabilization subsid from
	Resources		performance
y the l	and Social	Grant	of the State’s	No	No	72,684.00	Related to
	Security		function of				income
Unempoyme nt Insurance	Bureau of		ensuring the
	Yunfu City		supply or
Fund
			price control

			of apublic

189

C&S Paper Co., Ltd. Semi-annual Report 2021

			utility or
			socially
			necessary
			product
			Grants
			received for
			the
Job	Social		performance
			of the State’s
stabilization subsid from	Insurance Fund
			function of
y the	Administratio	Grant	ensuring the	No	No	50,801.57	Related to
			supply or				income
Unemployme nt Insurance	n of Zhongshan		price control
			of a public
Fund	City
			utility or
			socially
			necessary
			product
			Grants
			received for
	Dongsheng		the
Employee	Branch of the		performance
			of the State’s
subsidies for enterrises	Human Resources
			function of
p with work	and Social	Grant	ensuring the	No	No	40,400.00	Related to
			supply or				income
and production	Security Bureau of		price control
			of a public
resumption	Zhongshan
			utility or
	City		socially
			necessary
			product
			Grants
			received for
			the
Enterprise			performance
			of the State’s
training subsid from	Fourth		function of
y the Fourth	Technical	Grant	ensuring the	No	No	33,000.00	Related to
	School of		supply or				income
Technical School of	Xiaogan City		price control
Xiaogan City			of a public
			utility or
			socially
			necessary
			product
			Grants
			received for
	Financial		the
Subsidies for	Payment		performance f th Stt’
Covid-19	(Accounting)	Grant	o e aes function of	No	No	19,750.00	Related to
prevention	Center of						income
and control	Jiaxing Port		ensuring the
			supply or
	District
			price control

			of a public
			utilityor

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C&S Paper Co., Ltd. Semi-annual Report 2021

			socially
			necessary
			product
			Grants
			received for
			the
Job			performance
	Social		of the State’s
stabilization subsid from
	Insurance		function of
y the	Fund	Grant	ensuring the	No	No	16,343.00	Related to
	Administratio		supply or				income
Unemployme nt Insurance	n of Yunfu		price control
	City		of a public
Fund
			utility or
			socially
			necessary
			product
i			Grants
			received as a
	Development		result of
			compliance with local
	and
Securty social services	Construction Management Citt f	Grant	government	No	No	5,000.00	Related to
			policies such				income
	ommee o Port District,		as investment attraction and
	Jiaxing City
			other local
			support
			policies
			Grants
			received for
			the
Job			performance
	Human		of the State’s
stabilization subsid from
	Resources		function of
y the	and Social	Grant	ensuring the	No	No	1,500.00	Related to
	Security		supply or				income
Unemployme nt Insurance	Bureau of		price control
	Luoding City		of a public
Fund
			utility or
			socially
			necessary
			product
			Grants
			received for
	Dongsheng		the
Job	Branch of the		performance
stabilization	Human		of the State’s
subsidy from	Resources		function of				Related to
the	and Social	Grant	ensuring the	No	No	118.16
							income
Unemployme	Security		supply or
nt Insurance	Bureau of		price control
Fund	Zhongshan		of a public
	City		utility or
			socially
			necessary

191

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			product
			Grants
			received as a
			result of
			compliance
Funds for	Finance		with local
promoting	Bureau of	Grant	government	No	No		83.03	Related to
industrial			policies such					income
development	Yunfu City		as investment
			attraction and
			other local
			support
			policies
Total						23,000.00	1,997,067.57

Other description: None

75. Non-operating expenses

Unit: RMB

			Amount recognized as profit or
Item	Incurred in the current period	Incurred in the prior period
			loss of the current period

External donations	1,760,851.30	11,952,705.59	1,760,851.30
Others	1,152,018.68	1,267,171.07	1,152,018.68
Loss from damage and
	725,313.88	20,306.50	725,313.88
retirement of non-current assets

Including: Fixed assets	725,313.88	20,306.50	725,313.88
Total	3,638,183.86	13,240,183.16	3,638,183.86

Other description: None

76. Income tax expenses

(1) Table of income tax expenses

Unit: RMB

Item	Incurred in the current period	Incurred in the prior period
Current income tax expense	87,232,248.96	76,953,980.75
Deferred income tax expense	-6,132,728.24	8,829,273.17
Total	81,099,520.72	85,783,253.92

(2) Adjustment process of accounting profits and income tax expenses

Unit: RMB

Item	Incurred in the current period
Total profit	488,244,168.07
Income tax expenses calculated at the statutory/applicable tax	122,061,042.02

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C&S Paper Co., Ltd. Semi-annual Report 2021

rate
Impacts of different tax rates applied to subsidiaries	-40,492,083.06
Impacts of adjustments to income taxes during the prior period	-1,905,505.90
Impacts of non-deductible costs, expenses and losses	1,436,067.66
Income tax expenses	81,099,520.72

Other description: None

77. Other comprehensive income

Please refer to the notes for details.

78. Items of the cash flow statement

(1) Cash received related to other operating activities

Unit: RMB

Item	Incurred in the current period	Incurred in the prior period
Current accounts	10,003,853.92	12,564,390.63
Fiscal appropriation	7,136,732.81	36,365,077.82
Interest income	6,623,270.61	4,060,998.02
Authorized collection of individual income
	9,395,040.46	17,943,967.78
tax under the equity incentive

Others	5,203,778.87	6,055,212.85
Total	38,362,676.67	76,989,647.10

Explanation of cash received related to other operating activities: None

(2) Cash payments related to other operating activities

Unit: RMB

Item	Incurred in the current period	Incurred in the prior period
Expenses paid	409,369,512.68	316,942,453.60
Current accounts	6,431,125.10	2,335,741.67
Authorized payment of individual income
	10,715,472.44	28,191,169.72
tax under the equity incentive

Others	1,126,549.69	10,981,895.83
Total	427,642,659.91	358,451,260.82

Explanation of cash paid related to other operating activities: None

(3) Cash received related to other investing activities

Unit: RMB

193

C&S Paper Co., Ltd. Semi-annual Report 2021

Item	Incurred in the current period	Incurred in the prior period
Principal repayment on maturity of wealth
	50,000,000.00	40,000,000.00
management products

Principal repayment on maturity of
		87,105,000.00
treasury bonds reverse repo

Total	50,000,000.00	127,105,000.00

Explanation of cash received related to other investment activities: None

(4) Cash payments related to other investing activities

Unit: RMB

Item	Incurred in the current period	Incurred in the prior period
Purchasing wealth management products		212,400,000.00
Total		212,400,000.00

Explanation of cash paid related to other investment activities: None

(5) Cash received related to other financing activities: None

(6) Cash payments related to other financing activities

Unit: RMB

Item	Incurred in the current period	Incurred in the prior period
Repurchase and deregistration of equity
	8,752,250.65	3,475,786.26
incentives

Share repurchase	532,605,631.91	27,680,721.76
Deposits of security deposits for bills,
	12,315,870.82	9,290,358.88
letters of guarantee and letters of credit

Repayment of principal and interests of
lease liabilities under the new lease	1,023,913.33
standards
Total	554,697,666.71	40,446,866.90

Explanation of cash paid related to other financing activities: None

79. Supplementary information to cash flow statement

(1) Supplementary information to cash flow statement

Unit: RMB

Supplementary information	Amount of the current period	Amount of last period
1 Reconciliation of net profit to cash flows
	--	--
from operating activities:

Net Profit	407,144,647.35	452,699,484.61
Plus: Provisions for asset impairment	1,452,221.18	2,274,081.15

194

C&S Paper Co., Ltd. Semi-annual Report 2021

Depreciation of fixed assets, oil
and gas assets and productive biological	163,103,078.23	145,151,634.15
assets
Depreciation of use right assets	2,181,245.94
Intangible asset amortization	3,326,149.16	2,901,377.36
Long-term unamortized expenses	5,792,540.92	3,200,058.79
Losses from disposal of fixed
assets, intangible assets and other long-term	259,896.46	896,870.05
assets (“-” indicates income)
Losses from fixed assets write-off
	627,147.81	18,548.29
(“-” indicates income)

Losses from changes in fair value

(“-” indicates income)

Finance expenses (“-” indicates
	4,730,497.09	-2,415,195.58
income)

Investment losses (“-” indicates
	-358,473.15	-2,287,274.87
income)

Decrease in deferred income tax
	-17,332,968.85	1,306,113.02
assets (“-” indicates increase)

Increase in deferred income tax
	11,200,240.61	7,523,160.15
liabilities (“-” indicates decrease)

Decrease in inventories (“-”
	36,965,050.50	-192,512,816.22
indicates increase)

Decrease in operating receivables
	78,196,966.06	-100,988,107.49
(“-” indicates increase)

Increase in operating payables (“-”
	40,577,548.88	186,790,654.92
indicates decrease)

Others
Net cash flows from operating	737,865,788.19	504,558,588.33
activities
2 Significant investment and financing
	--	--
activities not involving cash:

Conversion of debt to capital
Convertible corporate bonds due within

one year

Fixed assets acquired under finance

lease

3 Net changes in cash and cash equivalents:	--	--
Balance of cash at the end of the period	701,224,202.33	896,433,846.64
Less: Balance of cash at the beginning
	1,050,034,135.72	675,996,852.97
of the period

Plus: Balance of cash equivalents at the

end of the period

Less: Balance of cash equivalents at the

beginning of the period

Net increase in cash and cash	-348,809,933.39	220,436,993.67
equivalents

195

C&S Paper Co., Ltd. Semi-annual Report 2021

(2) Net cash paid to acquire subsidiaries during the period: None

(3) Net cash received from the disposal of subsidiaries during the period: None

(4) Constitution of cash and cash equivalents

Unit: RMB

Item	Balance at the end of the period	Balance at the beginning of the period
I. Cash	701,224,202.33	1,050,034,135.72
Including: Cash on hand	56,626.99	36,349.55
Bank deposits always available for
	694,226,698.05	1,047,785,634.71
payment

Other monetary funds always
	6,940,877.29	2,212,151.46
available for payment

III. Balance of Cash and Cash Equivalents at	701,224,202.33	1,050,034,135.72
the End of the Period

Other description: None

80. Notes to items in the statement of changes in owner’s equity

Description on the name and amount of items under “Others” whose closing balance in last year was adjusted and other relevant issues: None

81. Assets with restricted right to use or ownership

Unit: RMB

Item	Book value at the end of the period	Reason for restriction
		Security deposits for issuing letter of credit
Other monetary funds	87,477,934.66
		and notes

Total	87,477,934.66	--

Other description: None

82. Foreign currency monetary items

(1) Foreign currency monetary items

Unit: RMB

	Balance of foreign currency at		Balance of converted RMB at
Item		Conversion rate
	the end of the period		the end of the period

Monetary funds	--	--	170,188,998.60
Including: USD	25,368,909.56	6.4704	164,146,992.42
EUR
HKD	7,251,567.67	0.8332	6,042,006.18

196

C&S Paper Co., Ltd. Semi-annual Report 2021

Accounts receivable	--	--	29,765,127.44
Including: USD	1,052.88	6.4704	6,812.55
EUR
HKD	35,715,692.38	0.8332	29,758,314.89
Long-term borrowings	--	--
Including: USD
EUR
HKD
Other receivables			1,509,084.28
Including: HKD	1,811,190.93	0.8332	1,509,084.28
Accounts payable			173,342,875.75
Including: USD	26,774,200.70	6.4704	173,239,788.21
EUR	13,400.00	7.6931	103,087.54
Other payables			5,664,414.41
Including: HKD	6,790,466.58	0.8332	5,657,816.75
USD	1,013.42	6.4704	6,557.23
MOP	50.00	0.8086	40.43

Other description: None

(2) For overseas business entities, especially important ones, disclose their main overseas business address, the standard currency for accounting and selection basis. If there are changes in the standard currency for accounting, reasons shall be also provided

√ Applicable □ Not applicable

Overseas business entity	Business address	Standard currencyfor accounting
ZhongShun International Co., Ltd.	Hong Kong	RMB
C&S HongKongCo., Ltd.	Hong Kong	RMB
C&S (Macao) Co., Ltd.	Macao	RMB

83. Hedges

Disclosure of hedged items and related hedging instruments and qualitative and quantitative information about hedged risks according to the type of hedging: None

84. Government grants

(1) Basic information on government grants

Unit: RMB

			Amount recognized as profit or
Category	Amount	Reporting items
			loss for the current period

Related to asset	4,000,000.00	Deferred income

197

C&S Paper Co., Ltd. Semi-annual Report 2021

Related to asset	7,008,167.50	Other income	7,008,167.50
Related to income	3,525,432.81	Other income	3,525,432.81
Related to income	23,000.00	Non-operating income	23,000.00
Total	14,556,600.31		10,556,600.31

(2) Return of government grants

□ Applicable √ Not applicable

Other description:

Please refer to Note VII (51), (67) and (74) for details.

85. Others: None

VIII. Changes in the Consolidated Scope

1. Business combinations of enterprises not under common control

(1) Business combinations of enterprises not under common control in the reporting period: None

(2) Combination costs and goodwill

Method of determining the fair value of combination costs and descriptions of contingent consideration and its

changes: None

Main reasons for the formation of huge goodwill: None

Other description: None

(3) Acquiree’s identifiable assets and liabilities on the acquisition date

Method of determining the fair value of identifiable assets and liabilities: None

Acquiree’s contingent liabilities assumed in a business combination: None

Other description: None

(4) Profit or loss arising from the recalculation based on fair value of equities held before the acquisition date

Whether there are transactions through which business combination is achieved in stages while control is obtained

within the reporting period

198

C&S Paper Co., Ltd. Semi-annual Report 2021

□ Yes √ No

(5) Descriptions of being unable to determine the consideration or the fair value of acquiree’s identifiable assets and liabilities on the acquisition date or at the end of the current period of combination

None

(6) Other descriptions

None

2. Business combinations of enterprises under common control

(1) Business combinations of enterprises under common control in the current period: None

(2) Combination costs

Description on contingent consideration and its changes: None

Other description: None

(3) Book value of assets and liabilities of the combined party on the date of combination

Contingent liabilities of the combined party assumed in a business combination: None

Other description: None

3. Reverse purchase

Basic information of transactions, basis for transactions constituting reverse purchase, whether assets and

liabilities retained by listed companies constitute a business and its basis, determination of combination costs, adjustment of equity amount and calculation when dealing as equity transactions: None

4. Disposal of subsidiaries

Whether there is situation that one disposal of investment in a subsidiary results in a loss of control

□ Yes √ No

Whether there is situation that the disposal of investment in a subsidiary is achieved in stages through multiple transactions while the control is lost in the reporting period

□ Yes √ No

199

C&S Paper Co., Ltd. Semi-annual Report 2021

5. Changes in the scope of consolidation due to other reasons

Description of changes in the scope of combination due to other reasons (establishment or liquidation of subsidiaries, etc.) and related situations:

The Company invested and founded C&S (Jiangsu) Paper Co., Ltd. on February 25, 2021, with a registered capital of RMB200 million. C&S Paper Co., Ltd. holds 100% of its stakes. C&S (Jiangsu) Paper Co., Ltd. was incorporated into the scope of consolidated statements from February. Currently, C&S (Jiangsu) Paper has started operating activities.

On May 19, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and Yunnan Jiaqu Trading Co., Ltd. jointly invested and established Yunnan Dolemi Trading Co., Ltd., with a registered capital of RMB4 million. Dolemi Sanitary Products holds 60% of the shares while Yunnan Jiaqu holds 40% of the shares. The Company has incorporated Yunnan Dolemi Trading Co., Ltd. into the scope of its consolidated statements since May 2021. Currently, Yunnan Dolemi has started operating activities.

On May 20, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and Luzhou Longmatan District Jisheng Trading Co., Ltd. jointly invested and established Luzhou Dolemi Sanitary Products Co., Ltd., with a registered capital of RMB1.5 million. Dolemi Sanitary Products holds 60% of the shares while Jisheng Trading holds 40% of the shares. The Company has incorporated Luzhou Dolemi Sanitary Products Co., Ltd. into the scope of its consolidated statements since May 2021. Currently, Luzhou Dolemi has started operating activities.

On June 08, 2021, Dolemi Sanitary Products Co., Ltd., a wholly owned subsidiary of the Company, and Sichuan Zhong’en Liancheng Technology Co., Ltd. jointly invested and established Mianyang Dolemi Sanitary Products Co., Ltd., with a registered capital of RMB1.5 million. Dolemi Sanitary Products holds 60% of the shares while Zhong’en Liancheng holds 40% of the shares. The Company has incorporated Mianyang Dolemi Sanitary Products Co., Ltd. into the scope of its consolidated statements since May 2021. Currently, Mianyang Dolemi has no operating activities.

6. Others: None

IX. Equities in Other Entities

1. Equities in subsidiaries

200

C&S Paper Co., Ltd. Semi-annual Report 2021

(1) Composition of the enterprise group

				Shareholding	Shareholding
Name of	Main business	Registered				Obtaining
			Principal businesses	percentage
subsidiary	address	address				method
				Direct	Indirect

			R&D, production, and sales (including online sales): household paper, maternal and infant products,			Capital
Jiangmen	Jiangmen,	Jiangmen,	cosmetics, wipes, non-woven products, daily necessities, and cleaning supplies; sales (including online			contributio
Zhongshun Paper			sales) of Class I and II medical devices. (The above items do not involve special management	88.25%	11.75%	n for
	Guangdong	Guangdong
Co., Ltd.			measures for the access of foreign investment.) (For items that must be approved in accordance with			establishm
			the law, the company may carry out business operations upon approval by competent departments.)			ent
			General items: manufacture of paper products; sales of paper products; sales of paper pulp; sales of
			personal hygiene products; sales of hygiene products and disposable medical products; sales of
			disinfectants (excluding hazardous chemicals); sales of Class I medical devices; retail of Class I
			medical devices; sales of Class II medical devices; retail of class II medical devices; wholesale of
			medical face masks; retail of medical face masks; sales of general merchandise; retail of daily			Capital
Zhejiang			necessities; sales of maternal and infant products; wholesale of kitchenware, sanitary ware and daily			contributio
Zhongshun Paper	Jiaxing, Zhejiang	Jiaxing, Zhejiang	sundries; wholesale of cosmetics; retail of cosmetics; wholesale of needle textiles and raw materials;	75.00%	25.00%	n for
Co., Ltd.			sales of needle textiles; sales of chemical industry products (excluding chemical products that need to			establishm
			be licensed); Internet sales (excluding the sales of commodities requiring a permit) (The company may			ent
			carry out business operations independently according to the law based on the business license, except
			for items that must be licensed according to the law.) (For items that must be approved in accordance
			with the law, the company may carry out business operations upon approval by competent
			departments.)
						Capital
C&S Hong Kong						contributio
	Hong Kong	Hong Kong	Purchase of pulp		100.00%	n for
Co., Ltd.
						establishm
						ent
			R&D, production, wholesale, retail and online sales: household paper, sanitary products, maternal and
						Capital tibti
			infant products, daily necessities, cosmetics, medical devices, sanitary materials, non-woven fabrics
C&S (Yunfu)	Yunfu,	Yunfu,	and products, polymer materials and products, daily sundries, and disinfectant products (excluding	100.00%		conruo n for
Paper Co., Ltd.	Guangdong	Guangdong	hazardous chemicals); wholesale, retail and online sales: food; import and export of goods and
						establishm
			technologies (excluding the import and export of goods and technologies prohibited by the State or			ent
			involvingadministrative approval); warehousingservices (limited to warehousesqualified in fire

201

C&S Paper Co., Ltd. Semi-annual Report 2021

			protection without hazardous chemicals). (For items that must be approved in accordance with the law,
			the company may carry out business operations upon approval by competent departments.)
			Wholesale, retain and online sales: paper, wood pulp, sanitary products, maternal and infant products, cosmetics, daily necessities, medical equipment, daily sundries, disinfection supplies (excluding
						Capital
Yunfu Hengtai Trading Co., Ltd. (note)	Yunfu,	Yunfu,	dangerous chemicals); import and export of goods or technologies (excluding the import and export of	100.00%		contributio n for establishm
	Guangdong	Guangdong	goods and technologies prohibited by the State or involving administrative approval). (For items that
			must be approved in accordance with the law, the company may carry out business operations upon approval by competent departments.)			ent

						Capital
C&S (Macao)						contributio
	Macao	Macao	Wholesale, trade		100.00%	n for
Co., Ltd.
						establishm
						ent
			Wholesale, retail and online sales (sales only on third-party platforms) of paper supplies, paper
			products (excluding printing products), wood pulp, general merchandise, hygiene products, cosmetics,			Business
			nonwoven products, chemical products for daily use, Class I medical devices and food; warehousing			combinati
Zhongshan			(excluding hazardous chemicals and precursor chemicals); import and export of goods and			ons
Zhongshun	Zhongshan,	Zhongshan,	technologies; operations of Class II and Class III medical devices. (The above business scope involves	100.00%		involving
	Guangdong	Guangdong	food operations, import and export of goods, and import and export of technologies.) (Exclude items			enterprises
Trading Co., Ltd.			prohibited by laws and administrative regulations; items whose operations are restricted by laws and			under
			administrative regulations shall not be carried out unless the permit has been obtained.) (For items that			common
			must be approved in accordance with the law, the company may carry out business operations upon			control
			approval by competent departments.)
						Business
						combinati
			Import, export and sales of paper products, general merchandise and pulp boards; sales of cosmetics,			ons
Xiaogan C&S	Xiaogan, Hubei	Xiaogan, Hubei	shower gel and sanitary pads; sales of baby products (excluding food). (For items that must be		100.00%	involving
Trading Co., Ltd.			approved in accordance with the law, the company may carry out business operations upon approval			enterprises
			by competent departments.)			under
						common
						control
						Business
			Sales of paper products, daily necessities, paper pulp, and pulp boards; import and export of goods.
						combinati ons
			(The company may independently select business items and carry out business activities in accordance
Beijing C&S	Beijing	Beijing	with the law; for items that must be approved in accordance with the law, the company may carry out		100.00%	involving
Paper Co., Ltd.			business operations upon approval by competent departments based on contents of the approval; it is
			prohibited to engage in business activities of items prohibited and restricted by the city’s industrial			enterprises
						under
			policies.)
						common

202

C&S Paper Co., Ltd. Semi-annual Report 2021

						control
						Business
			Sales of household paper, cleaning products, general merchandise, hygiene products, baby products,			combinati ons
Chengdu Zhongshun Paper Co Ltd	Pengzhou,	Pengzhou,	cosmetics, nonwoven products, feminine hygiene products, chemical products for daily use, daily necessities, medical devices, medical supplies and disinfectant products (excluding hazardous chemicals); e-commerce (For items that must be approved in accordance with the law the company		100.00%	involving
	Sichuan	Sichuan				enterprises
., .			, may carry out business operations upon approval by competent departments.)			under common
						control
						Business
			Wholesale, retail: paper products, paper pulp, general merchandise; import and export of goods and			combinati
Hangzhou Jie			technologies (exclude items prohibited by laws and administrative regulations; items whose operations			ons
Rou Trading Co.,	Hangzhou,	Hangzhou,	are restricted by laws and administrative regulations shall not be carried out unless the permit has been		100.00%	involving
	Zhejiang	Zhejiang	obtained); other legitimate items that do not need approval according to the law) (for items that must			enterprises
Ltd.			be approved in accordance with the law, the company may carry out business operations upon			under
			approval by competent departments)			common
						control
						Business
						combinati
Shanghai			Household paper, paper pulp, pulp boards, import and export of goods and technologies. (For items			ons
Huicong Paper	Shanghai	Shanghai	that must be approved in accordance with the law, the company may carry out business operations		100.00%	involving
						enterprises
Co., Ltd.			upon approval by competent departments.)			under
						common
						control
			Licensed items: production of sanitary products and disposable medical supplies; production of
			cosmetics (for items that must be approved in accordance with the law, companies may carry out
			business operations upon approval by relevant departments, and the specific business items are subject			Business
			to the approval document or the permit issued by competent department). General items: sales of
						combinati
			sanitary products and disposable medical supplies; retail of cosmetics; wholesale of cosmetics; manufacture of aer; sales of ersonal hiene roducts; sales of knitwear; manufacture of maternal
						ons
C&S (Hubei)	Xiaogan, Hubei	Xiaogan, Hubei	pp p yg p and infant products; sales of maternal and infant products; sales of paper products; manufacture of	93.375%	6.625%	involving
Paper Co., Ltd.						enterprises
			paper products; sales of daily necessities; sales of daily chemical products; sales of disinfectants (excluding hazardous chemicals); Internet sales (excluding the sales of commodities requiring a			under
						common
			permit); sales of Class I medical devices; sales of Class II medical devices; import and export of goods
						control
			and technologies (excluding the import and export of goods and technologies prohibited by the State
			or involving administrative approval). (For items that must be approved in accordance with the law,
			the company may carry out business operations upon approval by competent departments.)

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C&S Paper Co., Ltd. Semi-annual Report 2021

						Business
						combinati
Zhong Shun						ons
International Co.,	Hong Kong,	Hong Kong,	Sales of paper products		100.00%	involving
	China	China				enterprises
Ltd.						under
						common
						control
			Licensed items: production of sanitary products and disposable medical supplies; import and export of
			goods (for items that must be approved in accordance with the law, the company may carry out			Business
			business operations upon approval by competent departments, and the specific business items are
						combinati
			subject to the approval document or the permit issued by relevant department). General items: sales of it dt d dibl dil li l f l hi dt l f dil
						ons
C&S (Sichuan)	Pengzhou,	Pengzhou,	sanary proucs an sposae meca suppes; saes o persona ygene proucs; saes o ay necessities; manufacture of paper products; sales of paper products; manufacture of paper; ft f dil hil dt l f dil hil dt l f Cl II dil	100.00%		involving
Paper Co., Ltd.	Sichuan	Sichuan				enterprises
			manuacure o ay cemca proucs; saes o ay cemca proucs; saes o ass meca devices; sales of Class I medical devices; manufacture of industrial textile products; sales of industrial			under
						common
			textile products; manufacture of maternal and infant products; sales of maternal and infant products.
						control
			(The company may carry out business operations independently according to the law based on the
			business license, except for items that must be licensed according to the law.)
						Business
			Production, processing and sales: high-class household paper products (excluding printing process);			combinati ons
C&S (Zhongshan) Paper Co Ltd	Zhongshan,	Zhongshan,	import and export of pulp boards (exclude items prohibited by laws and administrative regulations; items whose operations are restricted by laws and administrative regulations shall not be carried out unless the permit has been obtained) (For items that must be approved in accordance with the law the	100.00%		involving
	Guangdong	Guangdong				enterprises
., .			. , company may carry out business operations upon approval by competent departments.)			under common
						control
			R&D, production, processing, and sales (including online sales): household paper, tissue boxes,
			hygiene products, cosmetics, non-woven products, plastic products, metalware, rubber products,
			ceramics, baby products, feminine hygiene products and daily necessities; bamboo and forest trees			Capital contributio
			planting; acquisition of raw materials of bamboo and wood for paper making; R&D, production and
C&S (Dazhou)	Dazhou, Sichuan	Dazhou, Sichuan	sales of bamboo pulp, wood pulp, bamboo chips and wood chips; combined heat and power and sales;	100.00%		n for
Paper Co., Ltd.			warehouse leasing; processing and sales of lime and limestone; processing of industrial wastewater
			and gray water reuse; general import and export business; sales of construction materials, hardware			establishm ent
			and electrical products, and chemical products (excluding hazardous products). (For items that must be
			approved in accordance with the law, the company may carry out business operations upon approval
			by competent departments.)
Sun Daily	Yunfu,	Yunfu,	R&D, production, processing, and online sales: paper products, hygiene products, cosmetics,	50.00%	50.00%	Capital

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C&S Paper Co., Ltd. Semi-annual Report 2021

Necessities Co.,	Guangdong	Guangdong	nonwoven products, plastic products for daily use, chemical products for daily use, metalware for			contributio
Ltd.			daily use, rubber products for daily use, and ceramics for daily use; import and export of goods or			n for
			technologies (excluding the import and export of goods and technologies prohibited by the State or			establishm
			involving administrative approval). (For items that must be approved in accordance with the law, the			ent
			company may carry out business operations upon approval by competent departments.)
			General items: manufacture of paper products; Internet sales (sales only on third-party platforms)
			(excluding the sales of commodities requiring a permit); sales of personal hygiene products; sales of household products, sales of hygiene products and disposable medical products; retail of cosmetics;			Capital
Dolemi Sanitary Products Co., Ltd	Zhongshan,	Zhongshan,	sales of general merchandise; sales of plastic products; sales of metal products; sales of rubber	60.00%	40.00%	contributio n for establishm
	Guangdong	Guangdong	products; manufacture of daily-use ceramic products. (The company may carry out business operations
.			independently according to the law based on the business license, except for items that must be licensed according to the law.) (For items that must be approved in accordance with the law, the			ent
			company may carry out business operations upon approval by competent departments.)
						Capital tibti
			Sales of hygiene products, household products, cosmetics, daily necessities, plastic products, metal
Yunnan Dolemi	Kunming,	Kunming,	products, and rubber products; manufacture of ceramic products and paper products (For items that		60.00%	conruo n for tblih
Trading Co., Ltd.	Yunnan	Yunnan	must be approved in accordance with the law, the company may carry out business operations upon
			approval by competent departments.)			esasm ent

			General items: sales of personal hygiene products; sales of paper products; Internet sales (excluding
						Capital
Luzhou Dolemi			the sales of commodities requiring a permit); sales of household products; sales of sanitary products			contributio
Sanitary Products	Luzhou, Sichuan	Luzhou, Sichuan	and disposable medical products; sales of daily necessities; sales of plastic products; sales of metal		60.00%	n for
			products; sales of rubber products; manufacture of daily-use ceramic products (the company may carry
Co., Ltd.			out business operations independently according to the law based on the business license, except for			establishm
			items that must be licensed according to the law)			ent

			General items: wholesale of cosmetics; sales of personal hygiene products; manufacture of paper products; Internet sales (excluding the sales of commodities requiring a permit); sales of household
						Capital
Mianyang Dolemi Sanitary Products Co Ltd	Mianyang,	Mianyang,	products; sales of sanitary products and disposable medical products; retail of cosmetics; sales of daily		60.00%	contributio n for establishm
	Sichuan	Sichuan	necessities; sales of plastic products; sales of metal products; sales of rubber products; manufacture of
., .			daily-use ceramic products (the company may carry out business operations independently according to the law based on the business license, except for items that must be licensed according to the law).			ent

			Licensed items: manufacture of Class II medical devices; import and export of goods; import and
			export of technologies; manufacture of Class III medical devices; operation of Class III medical			Capital contributio
			devices (for items that must be approved in accordance with the law, companies may carry out
C&S (Jiangsu)	Suqian, Jiangsu	Suqian, Jiangsu	business operations upon approval by relevant departments, and the specific business items are subject	100.00%		n for
Paper Co., Ltd.			to approval result). General items: manufacture of paper products; sales of plastic products; sales of
						establishm
			paper products; Internet sales (excluding the sales of commodities requiring a permit); sales of daily			ent
			necessities; sales of personal hygiene products; sales of household products; sales of sanitary products

			and disposable medicalproducts; retail of cosmetics; wholesale of cosmetics; sales of knitwear;

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==> picture [206 x 86] intentionally omitted <==

wholesale of kitchen utensils and daily groceries; sales of metal products; sales of rubber products; manufacture of daily-sue ceramic products; R&D of kitchen utensils and daily groceries; retail of kitchen utensils and daily groceries; sewage treatment and recycling; manufacture of Class I medical devices; sales of Class I medical devices; sales of Class II medical devices; sales of disinfectants (excluding hazardous chemicals). (The company may carry out business operations independently according to the law based on the business license, except for items that must be licensed according to the law)

==> picture [114 x 86] intentionally omitted <==

Description of the difference between the percentage of shares held in a subsidiary and the percentage of voting rights: None

Basis for holding 50% or less than of the voting rights but controlling the investee, or holding 50% or more of the voting rights but not controlling the investee: None

Basis for controlling the important consolidated structured entities: None Basis for determining whether the Company is an agent or a principal: None

Other descriptions: All shares held indirectly belong to the shares held by wholly-owned subsidiaries of the Company.

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C&S Paper Co., Ltd. Semi-annual Report 2021

(2) Important non-wholly-owned subsidiaries

Description that the percentage of shares held by minority shareholders in a subsidiary is different from the

percentage of their voting rights: None

Other description: The Company does not have important non-wholly-owned subsidiaries.

(3) Main financial information of important non-wholly-owned subsidiaries: None

(4) Significant restrictions on the use of the assets and the repayment of the debts of the enterprise group: None

(5) Financial or other support provided to consolidated structured entities: None

Other description:

Note: C&S (Yunfu) Co., Ltd. was changed to Yunfu Hengtai Trading Co., Ltd. in March 2021.

2. Transactions in which the share of owner’s equity in a subsidiary changes while control of the subsidiary is still retained

(1) Description of changes in the share of owner’s equity in the subsidiary: None

(2) Impact of the transaction on the equity of minority shareholders and the equity attributable to owners of the Parent Company

Other description: There are no transactions of the Company in which the share of owner’s equity in a subsidiary

changes and control of the subsidiary is retained.

3. Interests in joint arrangements or associates

(1) Important joint ventures or associates

Description that the percentage of shares in joint ventures or associates is different from the percentage of voting

rights: None

Basis for holding less than 20% of the voting rights but with significant influence, or holding 20% or more of the voting rights but without significant influence: None

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(2) Main financial information of important joint ventures: None

(3) Main financial information of important associates: None

(4) Summary financial information of unimportant joint ventures and associates: None

(5) Description of significant restrictions on the ability of joint ventures or associates to transfer funds to the Company: None

(6) Excess losses incurred by joint ventures or associates: None

(7) Unconfirmed commitments related to the investment in joint ventures: None

(8) Contingent liabilities related to the investment in joint ventures or associates: None

4. Important joint operation

The Company does not have important joint operations.

5. Interests in unconsolidated structured entities

Description of unconsolidated structured entities:

The Company does not have interests in unconsolidated structured entities.

6. Others: None

X. Risks Associated with Financial Instruments

The main financial instruments of the Company include monetary funds, notes receivable, accounts receivable, notes payable, accounts payable, other payables, loans, etc. Please refer to relevant items of “Note VII” for detailed information of all financial instruments. The risks associated with these financial instruments and the risk management policies adopted by the Company to reduce these risks are as follows. The management of the Company manages and monitors these risk exposures to ensure that the above risks are kept within control.

The Company adopts the sensitivity analysis method to analyze the possible impact of reasonable and possible changes in risk variables on the profit and loss or shareholder equities in the current period. Since any risk variable rarely changes in isolation and the correlation between the variables will have a significant effect on the ultimate financial impact of changes in a certain risk variable, the following contents are under the consumption that changes of a variable are independent.

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C&S Paper Co., Ltd. Semi-annual Report 2021

The goal of the Company’s risk management is to strike a proper balance between risks and gains and to minimize the negative impact of risks on the business performance of the Company while maximizing the interests of shareholders and other equity investors. Based on this risk management goal, the basic strategy of the Company’s risk management is to determine and analyze all kinds of risks faced by the Company, clarify the minimum of risk acceptance and conduct risk management, and monitor risks of all kinds in a timely and reliable manner to control risks within the limits.

1. Credit risk

Credit risk refers to the risk of financial losses of one party caused by the failure of the other party to perform its obligations. As of June 30, 2021, the largest credit exposure that may cause financial losses to the Company mainly comes from the losses of the Company’s financial assets due to failure of the other contractual party to perform its obligations.

In order to reduce credit risk, the Company only conducts transactions with recognized customers with good credit status, and continuously monitors the accounts receivable through credit monitoring of existing customers and aging analysis to ensure that the Company does not face the risk of bad debts and keep the overall credit risk within control.

Liquid funds of the Company are deposited in banks with high credit ratings, so the credit risk of liquid funds is low.

2. Interest rate risk

Interest rate risk refers to the risk of fluctuations in the fair value or future cash flow of financial instruments due to changes in market interest rates. The interest rate risk faced by the Company mainly comes from bank borrowings (please refer to “Note VII (32), (43) and (45)” for details). By developing a good relationship with banks and carrying out proper design of credit lines, types of credits, and credit terms, the Company ensures sufficient bank credit lines to meet its various financing needs. The risk of interest rate fluctuation can be reasonably reduced by shortening the term of a single loan and specially stipulating early prepayment terms.

3. Foreign exchange risk

Foreign exchange risk refers to the risk of fluctuations in the fair value or future cash flow of financial instruments due to changes in foreign exchange rates. The Company tries its best to match foreign currency income with foreign currency expenditure to reduce foreign exchange risks.

Foreign exchange risks borne by the Company are mainly related to USD and HKD. Except for purchasing and selling in USD and HKD by its overseas subsidiaries, other major business activities of the Company are priced

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C&S Paper Co., Ltd. Semi-annual Report 2021

and settled in RMB. See “Note VII (82)” for the conversion of foreign currency financial assets and liabilities into

RMB as of June 30, 2021. During the reporting period, the Company generated exchange profit and loss of RMB1,346,250.22.

Sensitivity analysis of foreign exchange risk:

Analysis assumption: On the basis that all other variables remain constant on the balance sheet date, the possible, reasonable changes of foreign exchange rate will have the following pre-tax effects on the Company’s profit and

loss and shareholders’ equity in the current period:

Unit: RMB

	Current period	Current period
Item
	Impact on profit	Impact on shareholders’ equity

Depreciation of RMB against foreign currency by 1.00%	-214073.94	-214073.94
Appreciation of RMB against foreign currency by 1.00%	214073.94	214073.94

4. Liquidity risk

Liquidity risk refers to the risk of capital shortage when an enterprise fulfills its obligation to settle accounts by delivering cash or other financial assets. The Company’s policy is to ensure that it has sufficient cash to repay

mature debts. Liquidity risk is centrally controlled by the financial departments of the Company. The financial

departments monitor cash balances, negotiable securities that can be cashed in at any time, and carry out rolling

forecasts on cash flows in the next six months to ensure that the Company has sufficient funds to repay debts under all reasonable forecasts.

Financial liabilities held by the Company as of June 30, 2021 analyzed based on the maturity period of undiscounted remaining contractual obligations are as follows:

Unit: RMB


Item	Within 1 year	Over 1 year	Total

	289,707,176.43		289,707,176.43
Notes payable

	711,941,179.23	11,091,908.16	723,033,087.39
Accounts payable

	784,298,181.50	12,092,818.95	796,391,000.45
Other payables

	1,785,946,537.16	23,184,727.11	1,809,131,264.27
Total

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C&S Paper Co., Ltd. Semi-annual Report 2021

XI. Disclosure of Fair Value

1. Fair value of assets and liabilities measured at fair value at the end of the reporting period: None

2. Basis for determining the market price of recurring and non-recurring fair value measurement items in Level 1: None

3. Qualitative and quantitative information on important parameters and valuation techniques used for recurring and non-recurring fair value measurement items in Level 2: None

4. Qualitative and quantitative information on important parameters and valuation techniques used for recurring and non-recurring fair value measurement items in Level 3: None

5. Adjustment information and sensitivity analysis of unobservable parameters between the opening and

closing book values of recurring fair value measurement items of Level 3: None

6. For recurring fair value measurement items with transfer between different levels, reasons for such transfer and policies for determining the time of conversion: None

7. Changes in valuation techniques within the reporting period and reasons for such changes: None

8. Fair value of financial assets and financial liabilities not measured at fair value: None

9. Others: None

XII. Related Parties and Related Party Transactions

1. Information on the Parent Company of the Company

				Shareholding	Percentage of voting
Name of Parent	Registered address	Principal businesses	Registered capital	percentage of the	right of the Parent
Company				Parent Company to	Company to the
				the Company	Company
		External investment;
		consulting of
		information on
Guangdong		commodities
Zhongshun Paper	Zhongshan,	circulation	RMB30 million	28.63%	28.63%
	Guangdong	(exclusive of real
Group Co., Ltd.		estate, labor
		services, financial
		futures, and studying
		abroad)

Information on the Company’s Parent Company

The ultimate controller of the Company is Mr. Deng Yingzhong, the father, and Mr. Deng Guanbiao and Mr. Deng

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C&S Paper Co., Ltd. Semi-annual Report 2021

Guanjie, whose two sons.

Other description: None

2. Information on subsidiaries of the Company

See Note IX Equities in Other Entities for detailed information on the subsidiaries of the Company.

3. Information on the joint ventures and associates of the Company

For important joint ventures or associates, please refer to the notes for details.

Other description: The Company does not have interests in joint venture arrangements or associates.

4. Information on other related parties

Name of other related parties	Relationship between other related parties and the Company
	The second-largest shareholder of the Company, with 20.31% of the
Chung Shun Co.
	Company’s shares

	A company controlled by the nephew and the husband of the niece
Guangzhou Zhongshun Trade Co., Ltd.
	of Mr. Deng Yingzhong, director of the Company

	A company controlled by Guangdong Zhongshun Paper Group Co.,
Bama Zhongshun Health Products Co., Ltd.
	Ltd., the Company’s controlling shareholder

	The partially-owned subsidiary of Bama Zhongshun Health
Yantai Zhongshun Network Technology Co., Ltd.	Products Co., Ltd. controlled by the Company’s controlling
	shareholders
	Formerly known as Zhongshun Industrial Investment (Shenzhen)
Shenzhen Zhongshun Caizhi Investment Co., Ltd.	Co., Ltd., a company controlled by the Company’s actually
	controllers, i.e. Mr. Deng Yingzhong, Mr. Deng Guanbiao and Mr.
	Deng Guanjie
	A company where the senior manager Yue Yong’s son holds shares
Pengzhou Lexiangshenghuo Trading Co., Ltd.
	and serves as a supervisor

	A company where the senior manager Yue Yong’s son holds shares
Sichuan West Lexiangshenghuo Trading Co., Ltd.
	and serves as a supervisor

	A company where the senior manager Yue Yong’s brother holds
Chongqing Qinyue Trading Co., Ltd.
	shares and serves as a supervisor

Other description: The Company’s directors, supervisors, senior managers and their close family members are

related parties of the company.

5. Information on related party transactions

(1) Related party transactions for purchase and sale of goods, and provision and acceptance of labor services: None

Table of sale of goods/provision of labor services

Unit: RMB

Related party Content of related party Incurred in the current period Incurred in the prior period

212

C&S Paper Co., Ltd. Semi-annual Report 2021

	transactions
Pengzhou Lexiangshenghuo
	Sale of goods	796,449.56	828,658.05
Trading Co., Ltd.

Sichuan West Lexiangshenghuo
	Sale of goods	289,094.73	180,809.75
Trading Co., Ltd.

Chongqing Qinyue Trading Co.,
	Sale of goods		247,979.83
Ltd.

Guangdong Zhongshun Paper
	Sale of goods		56,637.17
Group Co., Ltd.

Explanation of the related party transactions for purchase and sale of goods, and provision and acceptance of labor

services: None

(2) Related entrusted management/contracting and entrusting management/contracting out: None

(3) Related lease

The Company as the lessee: None

The Company as the lessee:

Unit: RMB

		Lease fee confirmed in the	Lease fee confirmed in the last
Name of lessor	Type of leased assets
		current period	period

Mr. Deng Yingzhong, Mr. Deng
Guanbiao and Mr. Deng	Housing lease	1,459,590.68	1,474,047.18
Guanjie

Explanation of related lease: None

(4) Related guarantee: None

(5) Interbank borrowing between related parties: None

(6) Asset transfer and debt reorganization between related parties: None

(7) Remuneration for key managers

Unit: RMB

Item	Incurred in the current period	Incurred in the prior period
Remuneration for key managers	11,500,854.16	8,140,753.70

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C&S Paper Co., Ltd. Semi-annual Report 2021

(8) Other related party transactions: None

6. Receivables from and payables to related parties

(1) Receivables

Unit: RMB

		Balance at the end of the period	Balance at the end of the period	Balance at the beginning of the period	Balance at the beginning of the period
Item	Related party		Impairment		Impairment
		Book balance		Book balance
			provision		provision

	Chongqing Qinyue
Accounts receivable				60,876.03	3,043.80
	Trading Co., Ltd.

	Chongqing Qinyue
Other receivables				44.63	2.23
	Trading Co., Ltd.

(2) Payables

Unit: RMB

		Book balance at the end of the	Book balance at the beginning
Item	Related party
		period	of the period

	Sichuan West Lexiangshenghuo
Contract liabilities		23,518.90	195.90
	Trading Co., Ltd.

	Pengzhou Lexiangshenghuo
Contract liabilities		13.67	1.67
	Trading Co., Ltd.

	Chongqing Qinyue Trading Co.,
Other payables		0.77
	Ltd.

7. Commitments of related parties: None

8. Others

XIII. Share-based Payment

1. Overall information on share-based payment

√ Applicable □ Not applicable

Unit: RMB

The Company’s total amount of all equity instruments granted in the 0.00 current period The Company’s total amount of all equity instruments exercised in the 6,387,244.00 current period The Company’s total amount of all equity instruments expired in the 3,315,396.00 current period The exercise price in the first exercise period for stock options awarded by the Company in the first grant Scope of exercise prices and remaining contractual term of the Company’ period as at the end of reporting period is stock options issued as at the end of the reporting period RMB8.572/share, the exercise price in the first exercise period for reserved stock options is RMB13.965/share,

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C&S Paper Co., Ltd. Semi-annual Report 2021

and the exercise price in the second exercise period for first-grant stock options is RMB8.472/share. The validity period is from the grant date of the stock options to the date when all stock options are exercised or canceled, with a maximum period of 60 months.

Other description: None

2. Equity-settled share-based payment

√ Applicable □ Not applicable

Unit: RMB

	1. Restricted shares: the stock closing prices at the grant date
Method of determining the fair value of equity instruments at the	2. Stock options: Black-Scholes model for option pricing
grant date	3. Employee stock ownership plan: the stock closing prices at
	the grant date
Basis for determining the number of vested equity instruments	Upon approval of the general meeting of shareholders
Reasons for significant differences between current estimates and
	None
previous estimates

Cumulative amount of equity-settled share-based payments
	171,552,833.56
recognized as capital surplus

Total fees confirmed by the equity-settled share-based payment in
	12,167,835.66
the current period

Other description: None

3. Cash-settled share-based payment

□ Applicable √ Not applicable

4. Revision and termination of share-based payment

There was no revision and termination of share-based payment of the Company during the reporting period.

5. Others: None

XIV. Commitments and Contingencies

1. Significant commitments

Significant commitments on the balance sheet date

As at June 30, 2021, the Company had no significant commitments that should have been disclosed but are not disclosed.

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C&S Paper Co., Ltd. Semi-annual Report 2021

2. Contingencies

(1) Significant contingent matters on the balance sheet date

As at June 30, 2021, the Company had no significant contingent matters that should have been disclosed but are

not disclosed.

(2) Explanations are also necessary if the Company has no significant contingent matters to be disclosed

There are no significant contingent matters to be disclosed in the Company.

3. Others: None

XV. Events after Balance Sheet Date

1. Significant non-adjusting events: None

2. Profit distribution: None

3. Sales return: None

4. Explanation on other events after the balance sheet date: None

XVI. Other Significant Matters

1. Corrections to previous accounting errors

(1) Retroactive restatement approach: None

(2) Prospective approach: None

2. Debt restructuring: None

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C&S Paper Co., Ltd. Semi-annual Report 2021

3. Assets replacing

(1) Exchange of non-monetary assets: None

(2) Other asset replacing: None

4. Annuities plan: None

5. Operation discontinuation: None

6. Segment information

(1) Determination basis and accounting policies of reporting segments

The Company does not have operating segments with different economic features and hence has not identified operating segments according to internal organization structure, management requirements and internal reporting policies. Therefore, there was no information on reporting segments based on operating segments to be disclosed.

(2) Financial information on reporting segments: None

(3) Explanation on reasons if the Company has no reporting segments or is unable to disclose the total assets and liabilities of the reporting segments: None

(4) Other description: None

7. Other important transactions and matters that may affect the decisions of investors: None

8. Others

In 2020, the Company signed the XIAOYIDA Business Cooperation Agreement with Bank of China Limited Zhongshan Branch and Shanghai Junmeng E-commerce Co., Ltd. (No. 2020-XYDXY-33725001), under which the bank offers a credit line of XIAOYIDA service up to RMB130 million to Shanghai Junmeng and the Company provides a joint and several liability guarantee. The line of credit is valid until June 4, 2021 and the financing period does not exceed 90 days. As of June 30, 2021, Shanghai Junmeng had a financing balance of the XIAOYIDA service at RMB44.8 million.

In 2020, Zhongshan Zhongshun Trading Co., Ltd., a subsidiary of the Company, signed the XIAOYIDA Business Cooperation Agreement with Bank of China Limited Zhongshan Branch and Wuhan Jie Rou E-commerce Co., Ltd. (No. 2020-XYDXY-33725002), under which the bank offers a credit line of XIAOYIDA service up to RMB80 million to Wuhan Jie Rou and the Company provides a joint and several liability guarantee. The line of

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C&S Paper Co., Ltd. Semi-annual Report 2021

credit is valid until June 4, 2021 and the financing period does not exceed 90 days. As of June 30, 2021, Wuhan Jie Rou had a financing balance of the XIAOYIDA service at RMB46.1 million.

XVII. Notes to Major Items of Financial Statements of the Parent Company

1. Accounts receivable

(1) Accounts receivable disclosure by category

Unit: RMB

	Balance at the end of the year	Balance at the end of the year	Balance at the end of the year	Balance at the end of the year	Balance at the end of the year	Balance at the beginning of the year	Balance at the beginning of the year	Balance at the beginning of the year	Balance at the beginning of the year	Balance at the beginning of the year
			Impairment					Impairment
	Book balance					Bk bl
Type			provision		Book	oo aance		provision
										Book value
		Percenta		Provision	value		Percentag		Provision
	Amount		Amount			Amount		Amount
		ge		ratio			e		ratio

Including:
Accounts receivable
for which bad debt	182,140,	100.00%	1,765,30	0.97%	180,374,8	94,047,36	100.00%	1,399,993	1.49%	92,647,372.
reserve is set aside in	196.12		9.60		86.52	5.99		.66		33
portfolios
Including:
Portfolio based on	69,802,7		1,765,30		68,037,48	56,099,68		1,399,993		54,699,687.
		38.32%		2.53%			59.65%		2.50%
aging	98.34		9.60		8.74	1.03		.66		37

Portfolio based on	112,337,				112,337,3	37,947,68				37,947,684.
		61.68%					40.35%
related parties	397.78				97.78	4.96				96

	182,140,		1,765,30		180,374,8 86.52	94,047,36		1,399,993		92,647,372. 33
Total		100.00%		0.97%			100.00%		1.49%
	196.12		9.60			5.99		.66

Bad debt reserve set aside individually: None

Bad debt reserve set aside in portfolios: 1,765,309.60

Unit: RMB

	Balance at the end of the period	Balance at the end of the period	Balance at the end of the period
Name
	Book balance	Impairment provision	Ratio of provision

Within the credit period	58,724,778.36	1,174,495.57	2.00%
Credit period - 1 year	10,925,833.41	546,291.67	5.00%
Subtotal of those within 1 year	69,650,611.77	1,720,787.24	2.47%
1 to 2 years	7,557.36	1,133.60	15.00%
2 to 3 years	144,629.21	43,388.76	30.00%
3 to 5 years			50.00%
Over 5 years			100.00%

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	C&S Paper Co.,Ltd. Semi-annual Report 2021	C&S Paper Co.,Ltd. Semi-annual Report 2021	C&S Paper Co.,Ltd. Semi-annual Report 2021
	69,802,798.34 1,765,309.60 --
Total	69,802,798.34	1,765,309.60	--

Description of reason for the portfolio:

Accounts receivable with the same aging have similar credit risk characteristics.

Provision of bad debt reserve by portfolio: None

Description of reason for the portfolio: None

Provision of bad debt reserve by portfolio: None

Description of reason for the portfolio: None

Provision of bad debt reserve by portfolio: None

Description of reason for the portfolio:

If the bad debt reserve of accounts receivable is set aside according to general model of expected credit loss,

please refer to the disclosure method of other receivables to disclose relevant information on bad debt reserve:

□ Applicable √ Not applicable

Disclose by aging

Unit: RMB

Aging	Balance at the end of the period
Within 1 year (inclusive)	181,988,009.55
1 to 2 years	7,557.36
2 to 3 years	144,629.21
Total	182,140,196.12

(2) Bad debt reserve that is set aside, recovered or transferred back in the reporting period

Provision of bad debt reserve of the reporting period:

Unit: RMB

	Balance at the	Amount of change in the reporting period	Amount of change in the reporting period	Amount of change in the reporting period	Amount of change in the reporting period
						Balance at the
Type	beginning of the		Recovery or
		Provision		Write-off	Others	end of the period
	period		reversal

Accounts
	1,399,993.66	365,315.94				1,765,309.60
receivable

Total	1,399,993.66	365,315.94				1,765,309.60

Wherein, the amount of recovered or transferred back bad debt reserve in the reporting period is important: None

(3) Accounts receivable actually written off in the reporting period: None

Description of write-offs of important accounts receivable: None

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C&S Paper Co., Ltd. Semi-annual Report 2021

Description on the write-offs of accounts receivables:

The Company did not have written-off accounts receivable in the reporting period.

(4) Top five debtors in closing balance of accounts receivable

Unit: RMB

		Percentage in total balance of
	Balance of accounts receivable		Balance for bad debt reserve at
Name of institution		accounts receivable at the end
	at the end of the period		the end of the period
		of the period

1st	112,301,902.68	61.66%
2nd	12,935,492.71	7.10%	258,709.85
3rd	10,164,016.37	5.58%	305,546.90
4th	7,919,065.93	4.35%	220,220.10
5th	7,534,401.58	4.14%
Total	150,854,879.27	82.83%

(5) Accounts receivable derecognized due to transfer of financial assets

The Company has no accounts receivable derecognized due to the transfer of financial assets as at the end of the reporting period.

(6) Amounts of assets and liabilities that are formed by the transfer and ongoing involvement of accounts receivable

The Company has no amounts of assets and liabilities that are formed by the transfer and ongoing involvement of accounts receivable as at the end of the reporting period.

Other description: None

2. Other receivables

Unit: RMB

Item	Balance at the end of the period	Balance at the beginning of the period
Other receivables	114,345,050.47	136,987,584.64
Total	114,345,050.47	136,987,584.64

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C&S Paper Co., Ltd. Semi-annual Report 2021

(1) Interest receivable

1) Classification of interest receivable: None

2) Significant overdue interest: None

3) Provision of bad debt reserve

□ Applicable √ Not applicable

(2) Dividends receivable

1) Classification of dividends receivable: None

2) Significant dividends receivable exceeding one year: None

3) Provision of bad debt reserve

□ Applicable √ Not applicable

Other description: None

(3) Other receivables

1) Classification of other receivables by nature

Unit: RMB

		Book balance at the beginning of the
Nature	Book balance at the end of the period
		period

Margins and deposits	261,812.00	113,606.00
Current accounts	103,687,258.75	131,125,900.41
Reserve	950,342.06	639,681.19
Others	10,040,119.85	5,494,420.94
Total	114,939,532.66	137,373,608.54

2) Provision of bad debt reserve

Unit: RMB

	Phase I	Phase II	Phase III
		Expected credit losses in	Expected credit losses in
Bad debt provision	Expected credit loss			Total
		the whole duration (without	the whole duration (with
	in the next 12 months
		credit impairment)	credit impairment)

Balance as at January 1,
	386,023.90			386,023.90
2021

Balance as at January 1,	——	——	——	——

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C&S Paper Co., Ltd. Semi-annual Report 2021

2021 in the reporting
period
Provision in the reporting
	208,458.29	208,458.29
period

Balance as at June 30,
	594,482.19	594,482.19
2021

Description of changes in the book balance where there are significant changes in provision for the current period

□ Applicable √ Not applicable

Disclose by aging

Unit: RMB

Aging	Balance at the end of the period
Within 1 year (inclusive)	114,903,178.61
1 to 2 years	28,000.00
Over 3 years	8,354.05
4 to 5 years	8,354.05
Total	114,939,532.66

3) Bad debt reserve that is set aside, recovered or transferred back in the reporting period

Provision of bad debt reserve of the reporting period:

Unit: RMB

	Balance at the	Amount of change in the reporting period	Amount of change in the reporting period	Amount of change in the reporting period	Amount of change in the reporting period
						Balance at the
Type	beginning of the		Recovery or
		Provision		Write-off	Others	end of the period
	period		reversal

Other receivables	386,023.90	208,458.29				594,482.19
Total	386,023.90	208,458.29				594,482.19

The Company did not have other receivables that were not written off in the reporting period.

Where the amount of recovered or reversed bad debt reserve in the reporting period is important: None

4) Other receivables actually written off in the reporting period: None

Description of write-offs of important other receivables: None

Description on the write-offs of other receivables: None

5) Top five debtors in closing balance of other accounts receivable

Unit: RMB

				Percentage in total
	Nature of the	Balance at the end			Balance of bad debt
Name of institution			Aging	balance of other
	amount	of the period			reserve at the end of
				receivables at the end

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C&S Paper Co., Ltd. Semi-annual Report 2021

				of the period	the period
1st	Current accounts	103,243,400.98	Within 1 year	89.82%
2nd	Current accounts	9,460,860.30	Within 1 year	8.23%	473,043.02
3rd	Current accounts	163,112.43	Within 1 year	0.14%	8,155.62
4th	Current accounts	88,661.21	Within 1 year	0.08%
5th	Current accounts	50,000.00	Within 1 year	0.04%	2,500.00
Total	--	113,006,034.92	--	98.31%	483,698.64

6) Receivables involving government grants: None

7) Other receivables derecognized due to the transfer of financial assets: None

8) Amount of assets and liabilities that are formed by the transfer and ongoing involvement of other receivables: None

3. Long-term equity investment

Unit: RMB

	Balance at the end of the	Balance at the end of the	period	Balance at the beginning of t	Balance at the beginning of t	he period
Item	Book balance	Impairment			Impairment
			Book value	Book balance		Book value
		provision			provision

Investment in	1,939,122,205.28
			1,939,122,205.28	1,928,113,219.50		1,928,113,219.50
subsidiaries

Total	1,939,122,205.28		1,939,122,205.28	1,928,113,219.50		1,928,113,219.50

(1) Investment in subsidiaries

Unit: RMB

	Opening		Increase/decrease in the period	Increase/decrease in the period	Increase/decrease in the period		Closing balance
						Closing balance
Investee	balance (book	Increase in	Decrease in	Impairment			of impairment
					Others	(book value)
	value)	investment	investment	Provision			provision

Zhongshan
Zhongshun Trading Co.,	94,817,296.68				1,159,775.82	95,977,072.50
Ltd.
C&S (Sichuan)	173,385,439.9
					1,761,963.00	175,147,402.98
Paper Co., Ltd.	8

Zhejiang
Zhongshun	56,524,520.15				802,495.02	57,327,015.17
Paper Co., Ltd.
C&S
(Zhongshan)	12,683,100.00					12,683,100.00
Paper Co., Ltd.
Jiangmen Zhongshun Paper Co., Ltd.
	698,614,821.4
					340,178.52	698,954,999.99
	7

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C&S Paper Co., Ltd. Semi-annual Report 2021

C&S (Hubei)	196,016,245.1
			951,367.92	196,967,613.05
Paper Co., Ltd.	3

C&S (Yunfu)	657,837,465.4
			791,191.08	658,628,656.50
Paper Co., Ltd.	2

Yunfu Hengtai
Trading Co.,	30,200,274.51			30,200,274.51
Ltd.
Chengdu
Zhongshun	627,524.58		21,634.32	649,158.90
Paper Co., Ltd.
Xiaogan C&S
Trading Co.,	311,467.66		119,344.02	430,811.68
Ltd.
Huicong Paper
	5,926.18		1,086.90	7,013.08
Co., Ltd.

Hangzhou Jie
Rou Trading	104,095.00		11,326.26	115,421.26
Co., Ltd.
Zhong Shun
International	785,042.74		48,622.92	833,665.66
Co., Ltd.
Sun Daily
Necessities Co.,	200,000.00			200,000.00
Ltd.
C&S (Dazhou)
	6,000,000.00			6,000,000.00
Paper Co., Ltd.

C&S (Jiangsu)
		5,000,000.00		5,000,000.00
Paper Co., Ltd.

	1,928,113,219. 50			1,939,122,205. 28
Total		5,000,000.00	6,008,985.78

(2) Investment in associates and joint ventures: None

(3) Other description: None

4. Operating income and operating cost

Unit: RMB

	Incurred in the current period	Incurred in the current period	Incurred in the prior period	Incurred in the prior period
Item
	Income	Cost	Income	Cost

Principal business	506,782,115.67	414,158,999.43	493,288,414.96	377,715,003.73
Other businesses	409,284,226.79	374,640,370.60	360,602,849.07	334,899,974.01
Total	916,066,342.46	788,799,370.03	853,891,264.03	712,614,977.74

Information related to income:

Unit: RMB

Contract classification	Branch 1	Branch 2		Total
By product type	916,066,342.46			916,066,342.46

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C&S Paper Co., Ltd. Semi-annual Report 2021

Household paper	502,779,375.26	502,779,375.26
Personal care	4,002,740.41	4,002,740.41
Others	409,284,226.79	409,284,226.79
By operating region	916,066,342.46	916,066,342.46
Domestic	916,066,342.46	916,066,342.46
Total	916,066,342.46	916,066,342.46

Information related to performance obligation: None

Information related to the transaction price apportioned to the remaining performance obligation:

The amount of income corresponding to the obligations of contract performance with an executed contract that is not performed or fully performed at the end of the reporting period is RMB1,063,051.14, of which the income of RMB1,063,051.14 is expected to be confirmed as income in the year of 2021.

Other description: None

5. Return on investment

Unit: RMB

Item	Incurred in the current period	Incurred in the prior period
Income from long-term equity-based
investment accounted for using the cost	482,375,000.00	140,000,000.00
method
Others	329,072.79	2,109,515.77
Total	482,704,072.79	142,109,515.77

6. Others: None

XVIII. Supplementary Information

1. List of non-recurring profits and losses of the reporting period

√ Applicable □ Not applicable

Unit: RMB

Item	Amount	Description
Profits/losses from the disposal of non-
	-887,044.27
current asset

Governmental grants reckoned into current
profits/losses (not including grants enjoyed
in quota or ration according to national	10,556,600.31
standards, which are closely relevant to the
company’s business)
Profits/losses from assets entrusted to others		Returns on principal-protected wealth
	358,473.15
for investment or management		managementproducts at maturityand

225

C&S Paper Co., Ltd. Semi-annual Report 2021

		reverse repo of treasury bonds
Other non-operating income and expenses
	-187,907.30
except for the aforementioned items

Less: Influence of income tax	1,667,039.43
Total	8,173,082.46	--

Reason shall be provided if the company defines non-recurring profit and loss items as defined or listed in the No.

1 Explanatory Announcement on Information Disclosure for Companies Offering their Securities to the Public—

Non-recurring Profit and Loss as recurring profit and loss items.

□ Applicable √ Not applicable

2. Return on net assets and earnings per share

		Earnings per share	Earnings per share
Profit in the reporting period	Weighted average return on net assets	Basic earnings per share	Diluted earnings per
		(RMB/share)	share (RMB/share)
Net profit attributable to the		0.3140	0.3109
ordinary shareholders of the	7.98%
Company
Net profit attributable to the
ordinary shareholders of the	7.82%	0.3077	0.3046
Company after excluding non-
recurring profit and loss

3. Difference in accounting data under domestic and international accounting standards

(1) Net profit and net asset differences under International Financial Reporting Standards (IFRS) and Chinese Accounting Standards (CAS)

□ Applicable √ Not applicable

(2) Net profit and net asset differences under foreign accounting standards and Chinese Accounting Standards (CAS)

□ Applicable √ Not applicable

(3) Explanation of reasons for the differences between accounting data disclosed under domestic and overseas accounting standards. If differences are adjusted based on data audited by overseas audit institutions, the name of the institution should be noted.

4. Others

If there are any ambiguities, the Chinese version shall prevail.

226

AI assistant

C&S Paper Co., Ltd. — Interim / Quarterly Report 2021

54537_rns_2021-08-30_c69b7409-ffd2-4f43-8a98-55bb91d269c6.PDF

C&S Paper Co., Ltd.

Semi-Annual Report 2021

Section I Important Notice, Contents and Definitions

Discrepancies in the sum of decimals in this report are caused by rounding.

Contents

Documents Available for Inspection

Definitions

Section II Company Profile and Key Financial Indicators

I. Company Profile

II. Contact Persons and Contact Methods

III. Other Information

1. Contact information of the Company

√ Applicable □ Not applicable

2. Information disclosure and location for inspection of documents

□ Applicable √ Not applicable

IV. Main Accounting Data and Financial Indicators

years

□ Yes √ No

V. Difference in Accounting Data under Domestic and International Accounting Standards

1. Net profit and net asset differences under International Financial Reporting Standards (IFRS) and Chinese Accounting Standards (CAS)

2. Net profit and net asset differences under foreign accounting standards and Chinese Accounting Standards (CAS)

VI. Non-recurring Items and Amounts

□ Applicable √ Not applicable

Section III Discussion and Analysis of the Management

I. Principal Businesses of the Company during the Reporting Period

1. Household paper (Jie Rou brand + Sun brand)

2. Personal care products (Dolemi brand)

3. Quality health products

II. Analysis of Core Competitiveness

1. Belonging to the first echelon of the domestic household paper industry

2. Constantly optimized product structure

3. Stable and effective management team

4. Nationwide marketing network

5. Nationwide layout of production bases

6. Product quality at an international level

7. Good R&D capabilities

8. First-class production equipment

9. Outstanding environmental protection awareness and technology

III. Analysis of Principal Businesses

□ Applicable √ Not applicable

profit

IV. Analysis of Non-principal Businesses

V. Analysis of Assets and Liabilities

1. Significant changes in the composition of assets

2. Main overseas assets

3. Assets and liabilities measured at fair value

4. Restriction of asset rights as at the end of the reporting period

VI. Analysis of Investment

1. Overview

2. Major equity investment during the reporting period

3. Major non-equity investment during the reporting period

4. Financial asset investment

(1) Security investment

(2) Derivative investment

VII. Major Asset and Equity Sales

1. Sales of major assets

2. Sales of major equity

VIII. Analysis of Main Holding and Joint-stock Companies

IX. Structured Entities Controlled by the Company

X. Risks Faced by the Company and Countermeasures

1. Risk of great fluctuations in pulp prices

2. Risk of exchange rate

3. Risk of regional market competition

5. Risk of safe production

6. Risk of logistics transportation

Section IV Corporate Governance

I. Annual General Meeting and Extraordinary General Meetings Held during the Reporting Period

1. Shareholder meetings during the reporting period

2. Extraordinary general meetings of shareholders proposed to be convened by preferred shareholders whose voting rights were resumed

II. Changes in Directors, Supervisors and Senior Management of the Company

√ Applicable □ Not applicable

III. Profit Distribution and Conversion of Capital Reserve to Share Capital during the Reporting Period

IV. Implementation of the Stock Incentive Plan, Employee Stock Ownership Plan, and Other Employee Incentives of the Company

√ Applicable □ Not applicable

1. Implementation of the Phase II stock incentive plan

2. Implementation of the Phase II employee stock ownership plan

3. Implementation of the Phase III employee stock ownership plan

C&S Paper Co., Ltd. Interim / Quarterly Report 2021